Aflac Inc. said Chairman and Chief Executive Officer Daniel P. Amos is giving up his 2008 bonus of $2.8 million because the company's operating results last year aren't reflected in its stock price.

 

Kriss Cloninger III, president and chief financial officer, is reducing his bonus by 35%, or about $477,000, Aflac also said.

 

Shares of supplemental insurer Aflac (NYSE: AFL) have declined sharply over the past year. A year ago, the company's stock was trading as high as $64.04 a share, while it closed on Feb. 23, 2009, at $15.80 a share, according to the A.M. Best stock indexes.

 

In 2008, Aflac outperformed the S&P 500, the S&P Life Index and the Dow, but the board agreed to accept the proposals, Robert B. "Ben" Johnson, an Aflac board member and chairman of its compensation committee, said in a statement.

 

Fourth-quarter net income for Aflac declined 48% to $197 million as its bottom line got hit with realized investment losses of $262 million. Full-year 2008 net income dropped 23% to $1.25 billion on realized investment losses totaling $655 million.

 

Full-year 2008 operating earnings for the Columbus, Ga.-based Aflac rose 18.5% to $1.9 billion.

 

In November, Aflac said Amos would give up about $26 million in golden parachute provisions in his employment contract (BestWire, Nov. 17, 2008).

 

Amos' salary in 2008 was $1.3 million, while Cloninger's salary was $857,700.

 

Units of Aflac currently have a Best's Financial Strength rating of A+ (Superior).