Welcome, everyone. It is now ten a. M. Eastern Daylight Time. Mr.
Chairman, you can begin when you are ready.
Thank you. Good morning, everyone. My name is Kevin Cabot, and I'm the Chairman of the Board of Directors of Unum Group. On behalf of the entire Board, I'd like to thank you for joining us today for the Unum Group twenty twenty one Annual Meeting of Shareholders. As you know, we again made the decision to conduct this meeting virtually to best protect everyone's health and safety during the continuing COVID pandemic.
More than a year into this health crisis, few of us have been untouched by its wide ranging impacts. Certainly, the pandemic has put the importance of what Unum does into clear focus, serving the working world in time of need. Unum provides affordable access to vital employee benefits that help protect families' financial futures. Although the pandemic is not over, we are encouraged by the improving US trends and opt optimism that Unum is well and are optimistic that Unum is well positioned to return to its growth path as the world recovers. We hope all of you are doing well and appreciate your flexibility with the virtual meeting format.
Although we certainly miss seeing each of you in person, we are pleased that the virtual format provides an affordable means for even more of our shareholders to attend the meeting. It was important to us that this meeting be conducted as inclusively as possible by providing shareholders the same opportunities to participate as during an in person meeting. Shareholders who have not already voted or wish to change their votes will have the ability to do so during this meeting and may also submit questions online at any time through the Q and A tab on your virtual meeting screen. We will address shareholder questions during a Q and A session that will follow the business portion of the meeting and a brief management report by our CEO, Rick McKinnon. Before beginning the business portion of the meeting, I want to first acknowledge some others with me today.
I'm joined online by my fellow board members, each of whom has been nominated for reelection at this meeting. You can find additional information about each director nominee in our proxy materials. Also in attendance today is Lisa Inglaces, our general counsel, who will assist me in conducting the meeting and serve as parliamentarian. In in addition to the members of the senior management who are in attendance today, representatives of Ernst and Young LLP, Unum's independent auditor, have joined us and are available to address any relevant questions during the meeting. I would now like to call the meeting to order.
We will move to the formal business portion of the meeting, and I will turn the call over to Lisa Inglese. Lisa?
Thank you, Kevin. I'd like to remind everyone that the rules of conduct for the meeting are available through the materials tab at the bottom of your virtual meeting screen. If you have logged into the meeting with your control number, you may submit a question through the q and a tab at the bottom of your screen at any time during this meeting. All questions must relate to our business or otherwise be relevant or suitable to the purpose of this meeting. If we don't get to all questions during the meeting, we will summarize answers to them on our investors website after the meeting.
If we receive similar questions, we may group them together so that we address them only once and allow for as many different topics as possible. We will only address questions that are submitted with the shareholder's first and last name and the approximate number of shares the shareholder owns. The polls for voting on all matters at this annual meeting opened at 09:45AM eastern time today, fifteen minutes prior to the start of the meeting. If there are shareholders who have not voted and want to vote or who want to change their votes, please do so now using the voting tab at the bottom of your virtual meeting screen. If you have previously voted by proxy, you do not need to vote today unless you wish to change your vote.
I have received an affidavit of distribution from Broadridge Financial Solutions establishing that the notice of meeting and the accompanying proxy materials and annual report were mailed or made available on or about 04/15/2021 to shareholders of record on 03/29/2021, the record date for shareholders entitled to notice of this meeting. Our inspector of elections, a representative from Broadridge Financial Solutions, is present by phone at this meeting and has reported that we have received proxies representing a majority of our outstanding shares of common stock, which represents a quorum for the meeting. The matters requiring the vote by the shareholders are described in our proxy statement. We will now consider the three proposals before us. The first voting item is the election of 11 directors whose names and qualifications are listed in our proxy statement.
Each of our directors has been nominated to serve as a director for a one year term ending at the annual meeting in 2022. The second voting item is the advisory vote on the compensation of our named executive officers as described in the proxy statement. The third voting item is the ratification of the appointment of Ernst and Young LLP as the company's independent auditor for 2021. The board of directors has recommended a vote for each of the director nominees and for each of the other two proposals. If you are voting today and have not yet voted, please do so now.
In order to vote online, you will need the control number that you received with your proxy materials. I will pause here to allow another moment for shareholders to complete their voting. Okay. It is now 10:06AM eastern time, and the polls for voting on the matters before this meeting are now closed. I will now review the preliminary voting results.
The inspector of election reports that based on the votes cast prior to this meeting, the company has received proxies sufficient to elect each of the 11 director nominees to give advisory approval of the compensation of our named executive officers as described in our proxy statement, and to ratify the appointment of the auditors. The final voting results will be published in a Form eight k report, which will we will file with the SEC within four business days after the inspector of elections certifies the results. Kevin, that completes my report.
Thank you, Lisa. This concludes the business portion of today's meeting. The Unum Group twenty twenty one Annual Meeting of Shareholders is now adjourned. Let me now turn this over to our President and Chief Executive Officer, Rick McKinney, for a brief management report.
Thank you, Kevin, and good morning, everyone. We appreciate you joining us for our virtual webcast annual shareholder meeting. As Kevin mentioned, the COVID-nineteen pandemic continues to impact the economic and social environment, yet there are encouraging signs on the horizon. Increasing vaccinations and lower infection rates are driving employment higher, more small businesses to reopen, consumer spending to increase, and people taking small steps toward a return to normalcy. While the pandemic is not over and there are still difficult areas in the world, today does look very different than it did a few short months ago.
Against this backdrop, we continue to be well positioned to grow as the country and the world recovers from the pandemic. The last fifteen months have been a challenge, but we have taken the time to improve how we operate and deliver value to our customers. Our resulting strong and stable financial position, combined with the know how of our team, gives us great confidence in our ability to serve more companies and customers as the environment improves. The pandemic has shown a bright and lasting light on the importance of what we do. As a global benefits leader, Unum's corporate purpose of helping the working world thrive throughout life's moments has never been clearer.
Through a team of 10,700 employees in The US, UK, Ireland and Poland, we proudly serve more than 180,000 businesses and 43,000,000 employees and their families. Through the broad range of financial protection products we offer, we paid $7,600,000,000 in benefits last year to our customers. This includes more than $150,000,000 to families as a result of COVID life claims. This money combined with our empathetic ear help provide stability people need so that they can focus on recovering and continuing to live their fullest lives. Our focus on serving customers in the workplace and the workforce allows us to leverage the strong relationships between employers and their employees.
By working with employers, the workplace also gives us a front row seat to understand some of today's most complex business challenges. And the insight we've gained has enabled us to become a leader in helping companies navigate the increasingly complex leave environment and simplifying benefits administration. Last year, we clearly demonstrated our ability to deliver in a crisis, and I'm proud of the way we responded to the needs of our customers, our communities and our people. Through a year of unprecedented challenges, we learned that our we leaned on our foundation, a clear purpose, a solid balance sheet, and our incredible and committed team. Looking back a year ago, safety was our top priority, and we quickly moved our team to remote working when the pandemic took hold.
As we learned, this added flexibility allowed our people to manage their unique family and school obligations as well. Internally, we also adapted as volumes spiked and we helped customers navigate their own challenging situations. Thanks to the professionalism and dedication of our people, we maintain record service levels through this uncertainty and continue to introduce new capabilities to meet the demands of a digital world. With most of our people still working partly or fully remote, we're charting a course to a new and adaptive model of workplace flexibility that will continue after the pandemic recedes. We also didn't lose sight of the needs of the communities where we operate.
When schools shifted to remote learning and food security grew in our hometowns, we donated more than $420,000 to bridge the technology gap for students at home and funded food programs to feed those in need. In total, Unum donated $13,000,000 across our geographic footprint to enhance educational opportunities, promote well-being, and help our communities at time of need. As we look back, 2020 was a year of extraordinary disruption. Yet through a prudent business approach and unyielding commitment to serving our customers, we maintained our strong market presence and profitability. This disciplined execution not only resulted in after tax operating income of more than $1,000,000,000 but also enabled us to continue aggressively investing in our digital capabilities and distribution channels to enhance the customer experience and ready ourselves for the economic return.
We also recently completed a transaction to reinsure most of our closed block individual disability insurance to a third party. The move freed up significant amount of capital that enhances our financial flexibility. Today, we hold more than $1,500,000,000 in cash, a $650,000,000 jump from this time last year. With these strong capital metrics as a backdrop and improving fundamentals, the Board approved a more than 5% increase to our quarterly stock dividend. This demonstrates confidence in our capital position and performance outlook for the year.
I also expect this improving environment will allow us to gradually resume share buybacks in the second half of twenty twenty one. Just as our purpose drives us to deliver for those who count on us, it also guides our approach to sustainability and social responsibility. Unum is working in partnership with all of our stakeholders for positive impact, including our customers, the communities where we work and our employees. In each of these partnerships, our goal is to create better places and opportunities for those we serve, making positive impacts and to do so in a transparent way. Our 2020 Environmental, Social and Governance report, which we released in April, outlines our commitment to these areas.
This includes corporate governance, community involvement, employee engagement, our environmental impact and responsible business practices. Our ESG strategic framework is aligned with our overall strategy and ranges from how we continue to serve our customers and communities, how we invest the funds that are entrusted to us, and how we manage our environmental footprint. We know that caring for the world around us takes many forms, and we continue to harness the passion and commitment of our employees to make a real and lasting difference. I would encourage all of you to visit the responsibility section of our website and read our full ESG report. Our ability to serve others is rooted in cultivating the right culture at Unum.
We strive to assure that everyone who works at Unum can be their authentic selves. As an organization serving many different types of businesses and different individuals, we strongly believe in the importance of creating an environment where all are welcome, differences are embraced, and a diversity of ideas and experiences spark the creativity and connection our customers expect. This is why we invest in creating a dynamic environment that rewards our people and helps them learn and grow to better serve our customers. The pride our people feel for what they do is not driven only by our service to customers and society, but by our steadfast commitment to doing the right thing. This year, for the first time, we are proud to have been recognized as one of the world's most ethical companies by the EthiSphere Institute.
This accolade recognizes our culture and is in addition to other recognition we have received for our commitment to diversity, well-being, and civic engagement. Before we go to your questions, I wanna leave you with these thoughts. Without a doubt, the pandemic and resulting economic disruption was a great test for all of us. The experiences of the last fifteen months underscore the critical need for what we do. With our particular focus, workers and their families can count on us in time of need, and employers can trust us with the financial protection to keep their employees secure.
We've shown uncommon resilience enabled by our financial underpinnings and strong culture. These elements allowed us to build on our leading market positions and drive innovation in the employee benefits landscape. We're here today because of our outstanding people, and I am confident in their ability to deliver for our customers, help protect more workers and their families and realize our full potential. With that, I'd like to now move to the question and answer portion of our meeting. Lisa previously reviewed some of the rules around these submissions.
Please keep in mind that questions may be submitted through the Q and A tab at the bottom of your virtual meeting screen, if you have your shareholder control number. Lisa, could you please go through any submissions we have to address at this time?
Sure. Thank you, Rick. As you mentioned, the Q and A tab is active now, and we also received some questions from shareholders in advance of the meeting. For those questions we do not address today, we will summarize written responses on the on the proxy materials section of our investor website. Again, we may group similar questions together to avoid duplication.
So with that, let me go to the first question, which I'll address to you, Rick. And I am combining this from multiple submissions. Why are political and charitable donations made by the company rather than using those funds to reinvest or distribute to shareholders?
Thank you for the question. So there are two types of donations we're talking about, political and charitable. So let me start with, that by law, political donations cannot be made with general company funds. Political campaigns can only accept funds from individuals and political action committees, or PACs. In our case, the Unum PAC, which is funded entirely by employees and board members, makes contributions to political groups, and publishes an annual political contribution report on our website, detailing which organizations are receiving the money.
We have been recognized as a trendsetter for the last several years on the CPA Ziegland Index for Corporate Disclosure and Accountability. I'd add also add with the work that we do as a company to expand access to critical employee benefits is a nonpartisan issue. The giving to the UniPAC reflects this as contributions are made to groups on both sides of the aisle. Through these contributions, we share our story, advocate for policies that strengthen access to financial protection benefits, and emphasize the important role we have in society. This work also furthers the company's business interests, which we think ultimately does benefit our shareholders.
So on the charitable giving side, this does occur through a mix of corporate funding and employee giving. So Unum does make direct grants to nonprofit organizations that align with our corporate social responsibility strategy and address the needs of our home communities. Our giving strategy does focus on promoting equitable access to education and workforce development, also to community well-being, particularly in the mental health area, disaster relief and social justice. We also have a matching gifts program to match donations made by employees to many nonprofits, which allows them to direct a portion of our company giving. We are leaders and active participants in the communities where we operate.
By promoting more inclusive outcomes in education, food security, and social justice, we can help create a healthier community that is more prepared for the workforce of the future. And we also know that today's employees wanna work for companies that are engaged in communities and with causes important to them. So from the local level to national perspectives, we think that being active participants in the public discourse of issues important to our business and in making our communities stronger is a valuable investment of time and our precious resources.
Thank you, Rick. Here's the next question. How can management more clearly communicate the impact that concerns about the adequacy of long term care reserves and low interest rates on fixed income securities have on the market value of Unum stock?
So thank you for that question. We regularly discuss both LTC and the persistency persistently low interest rates on our quarterly earnings analyst calls and at a variety of other venues. In these discussions, we emphasize the actions we have taken and will continue to take to navigate these challenging dynamics. On the LTC front, we stopped selling new LTC policies a decade ago, but we are still managing this closed block of policyholders. We continue to take proactive measures to provide for the long term stability of this block and provide transparency to our shareholders.
So this actually includes rate increases on in force business, updates to our liability and interest rate assumptions, as we learn more from the experience of this block. And it also includes cash contributions to properly capitalize the block. Also last year, we agreed to establish additional statutory LTC reserves over a period of seven years, which we expect to fund with existing cash flows. We also continue to identify opportunities to enhance the capital efficiency of our Closed Block business segment. Through the reinsurance transaction of our Closed Block individual disability insurance business that we announced at the end of last year, we have freed up $600,000,000 in capital, enhancing our financial strength and flexibility.
With regard to low interest rates, we've been taking proactive steps across our product lines to address the low interest rate environment. As noted in the question, our long term investment philosophy focuses on fixed income holdings, and we have seen yields on traditional investments decrease over time. We do manage the liability discount rates gradually with premium rate increases on new sales and our in force cases to reflect the lower interest rate environment. Our sales and underwriting teams do a great job managing persistency, renewals and case life cycles with these adjustments included. We have managed the credit risk in our investment portfolio at a generally consistent level and do not sacrifice quality to reach for yield.
In the last several years, we have also allocated a portion of our portfolio assets to achieve a longer term return consistent with the liability funding requirements. Team offsets the added risk of these holdings with investments in higher quality assets.
Okay. I'd like to stay with you for this next question as well, Rick. As a shareholder for the last few years, I have not seen any board member or insider purchase Unum stock with their own money. Why don't we see more insider buying, that risks the personal capital of the board and senior leaders?
It's a good and fair question. I would make sure that everybody understands that a substantial portion of the compensation of our directors and senior officers is paid in the form of company equity. They're also subject everyone in that list is subject to robust stock ownership and holding requirements. So we think this approach ensures that the compensation of board members and senior management is tightly aligned with the long term interest of our shareholders. And since these stock awards are compensation for services to the company, I'd also describe it as personal capital of our directors and senior officers that's at risk in the same manner as other shareholders.
You can find more details about how we compensate both the Board and our named executive officers in this year's proxy statement and also updates throughout the year with filings with the SEC.
Okay. Thank you, Rick. Next, I'd like to direct a question to Kevin. This is also a combination of several submissions we received on this topic. How does the board think about age or generational diversity?
As millennials are expected to comprise the majority of the workforce in the next few years, should the Board consider changes to reflect this?
Thanks, Lisa. That's an interesting question. So let me start with our overall approach to diversity. As a company, we're committed to creating an environment at Unum that welcomes people of diverse backgrounds and perspectives and reflects our customers and communities. That commitment starts with the board, particularly in the areas tenure, race and ethnicity, gender, experience, and age.
And our governance committee reviews the board composition annually to ensure that we reflect a range of backgrounds and overall experience. You can find details and a good discussion about these various diversity factors in our proxy statement. And I tell you, I'm proud to say that we've been recognized as being a leader in diversity at the board level and among committee leadership positions. As a Board, we're also very focused on generational differences in society and among our customers. When you think about the Board, the candidate pool for directors in the millennial age bracket is very limited considering the requisite experience expected.
So given that reality and the importance that generational shifts in the workforce has for our company, we regularly seek expertise on this topic, including outside advisers that provide counsel on these topics and trends. And it's a topic that I can assure you we will continue to review as we move forward.
Okay. Thank you, Kevin. This next question is also for you. The company appears to be continuing to increase its focus and investments in technology and transformation efforts. Will there be any effort made to increase the number of directors with qualifications in technology and digital transformation?
Well, this question dovetails nicely with the topic I just addressed about diversity. As I mentioned, the governance committee regularly looks at the composition of the board to ensure the appropriate skill sets are adequately represented. When you think about the director recruiting process, we typically look at items such as whether we need to replace skill sets of a departing director or any particular needs based on the strategic direction of the company at the time and which skills are most needed to effectively balance the overall expertise represented across the board. So certainly, transformation and technology are areas we believe to be important and our skill sets we consider when evaluating the overall mix of the board. I'd note that we currently have three of our board members with experience in this area.
We also seek outside expertise to provide additional counsel to the board on digital transformation and technology issues and trends. So again, this area will be something the board continues to look at going forward.
Okay. Thank you, Kevin. And thank you to everyone who submitted questions. This now concludes the Q and A session. As I mentioned before, we will post responses to those questions that we didn't get to, on our Investors website in the proxy materials section after this meeting.
With that, Rick, I'll turn it back to you.
Great. Thank you, Lisa. As we close today, I want to thank you for your continued support of Unum. I know I speak from my fellow Board members in saying we are proud to be associated with this company. The business of this meeting has now been concluded.
Again, we thank you for attending today and hope you'll join us again next year. Please have a good day.
Thank you for attending the twenty twenty one Unum Group Annual Meeting of Shareholders. You may now disconnect.