<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
EQUITABLE OF IOWA COMPANIES
(Name of Registrant as Specified In Its Charter)
John A. Merriman, Secretary and General Counsel
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_____________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________
3) Filing Party:
_____________________________________________
4) Date Filed:
_____________________________________________
<PAGE>
<PAGE>
______________________
604 Locust Street
Des Moines, Iowa 50309
______________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 28, 1994
____________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of EQUITABLE OF
IOWA COMPANIES will be held in the Governor's Room of the Des Moines Club,
33rd Floor Ruan Center, Seventh and Grand Avenue, Des Moines, Iowa, on
Thursday, April 28, 1994, at 9:30 a.m., Des Moines local time, for the
following purposes:
1. To elect four directors.
2. To approve the appointment of auditors for the year 1994.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 10, 1994, will
be entitled to notice of and to vote at the meeting or any adjournment
thereof.
Shareholders are cordially invited to attend the meeting in person. IF YOU
WILL NOT BE ABLE TO ATTEND THE MEETING IN PERSON, PLEASE DATE, INDICATE YOUR
CHOICE ON THE MATTERS TO BE VOTED UPON, AND SIGN THE ENCLOSED PROXY AND RETURN
IT PROMPTLY IN THE ENCLOSED ENVELOPE.
A copy of the Annual Report to Shareholders for 1993, including audited
financial statements, is enclosed.
By Order of the Board of Directors.
John A. Merriman
Secretary
Des Moines, Iowa
March 18, 1994
<PAGE>
<PAGE>
EQUITABLE OF IOWA COMPANIES
PROXY STATEMENT
Annual Meeting of Shareholders, April 28, 1994
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of EQUITABLE OF IOWA
COMPANIES (the "Company"), 604 Locust Street, Des Moines, Iowa, 50309, for use
at the Annual Meeting of Shareholders to be held April 28, 1994, and any
adjournment thereof (the "Meeting"). When such proxy is properly executed and
returned, the shares it represents will be voted at the Meeting in accordance
with the instructions contained therein. If no direction is given, proxies
will be voted in favor of election of the four director nominees named herein,
and approval of Ernst & Young as auditors for 1994. Any shareholder
furnishing a proxy may revoke it at any time before it is voted either by
voting in person or by delivering a revocation or later dated proxy to the
Secretary of the Company. The Proxy Statement and the accompanying Proxies
will be first mailed to shareholders on or about March 21, 1994.
The cost of the solicitation of the Proxies will be borne by the Company.
Proxies may be solicited by the Board of Directors or management personally,
by telephone or by facsimile.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH OF THE PROPOSALS
DESCRIBED IN THIS PROXY STATEMENT.
<PAGE>
<PAGE>
VOTING SECURITIES
Only shareholders of record as of the close of business on March 10, 1994,
will be entitled to the notice of and to vote at the Meeting. The Company has
a single class of Common Stock without par value ("Common Stock"), of which
31,532,903 shares were outstanding and entitled to vote on such date. Shares
present in person or represented by proxy at the Meeting will be tabulated for
determination of whether or not a quorum is present. A quorum will be present
if a majority of the votes entitled to be cast on a matter are represented for
any purpose at the Meeting. Votes withheld for any director, abstentions and
broker-dealer non- votes represented at the Meeting will be counted for quorum
purposes, but will not be counted as votes cast with respect to any matter to
come before the Meeting and will not affect the outcome of any matter. If a
quorum exists, directors will be elected by a majority of the votes cast by
the shares entitled to vote in the election and action on other matters,
including appointment of auditors, will be approved if the votes cast favoring
the action exceed the votes cast opposing the action. Holders of Common Stock
are entitled to cumulative voting in the election of directors which means
that each shareholder is entitled to as many votes as shall equal the number
of votes which such shareholder would be entitled to cast multiplied by the
number of directors to be elected, and such shareholder may cast all such
votes for a single director, or distribute them among the number to be voted
for, or any two or more of them, as such shareholder may see fit. The Board
of Directors unanimously recommends election of the nominees named herein and
a vote "For" each of the other matters to be considered at the Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following sets forth, as of March 10, 1994, security ownership with
respect to beneficial owners of more than five percent of the Company's Common
Stock.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of Class
_________________ ________________ ________________
<S> <C> <C>
Helen Hubbell Ingham (1) 3,034,136 9.6%
1429 North
Federal Hwy.
Ft. Lauderdale, FL 33304
Hans F. E. Wachtmeister 1,924,392 6.1%
Belmont Hill School
Belmont, MA 02178
<FN>
(1) All shares held in a revocable trust of which her husband, Richard S.
Ingham, a director of the Company is trustee. Excludes 87,984 shares held by
a trust for the benefit of their children of which Mr. Ingham is co-trustee,
and 17,228 shares owned directly by Mr. Ingham or in his revocable trust.
</TABLE>
<PAGE>
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors may consist of not less than 9 nor more than 15
members, divided into three classes. At each annual meeting of shareholders,
the number of directors equal to the number of the class whose term expires at
the time of such meeting shall be elected to hold office until the third
succeeding annual meeting and until their successors are elected and
qualified. There are presently eleven directors with the terms of three
expiring at the Meeting. Dr. Drury, Messrs. Hubbell, Ingham, Jr., and Urban
have been nominated by the Board of Directors for election by the shareholders
for terms ending in 1997, and all, except for Mr. Ingham, Jr., are presently
directors of the Company. Mr. Ingham, Jr. is the son of Mr. and Mrs. Ingham.
Consistent with the provisions of the Company's Restated Articles of
Incorporation, Mr. Ingham, who served as a director of the Company during
1993, will be retiring from the Board of Directors as a result of attaining
the age of seventy. Mr. Ingham's retirement will be effective upon the
conclusion of the Meeting. Upon the election of the nominees the Board of
Directors will consist of eleven members.
Although the Board anticipates that all nominees will be able to serve, in the
event any one or more should be unable to do so, proxies will be voted for
such substitute nominee or nominees as the Board in its discretion may
recommend. Proxies will be voted for the election of the nominees unless the
stockholder giving the proxy withholds such authority.
The following information is furnished for each continuing director and
nominee:
<TABLE>
<CAPTION>
Name; (Age);
Principal Occupation
During Last Five Years; Year First Year
Directorships in Other Elected Term
Public Companies Director Expires
________________________ __________ ________
<S> <C> <C>
Richard B. Covey (64), Partner in law firm of 1971(a) 1995
Carter, Ledyard & Milburn
Doris M. Drury (67), John J. Sullivan 1986 1994
Professor of Economics and Special
Assistant to the President Regis University,
Colorado (since January, 1990); previously
Professor of Economics, University of Denver;
President, Center for Business and Economic
Forecasting, Inc.; Director, Public Service
Company of Colorado, Inc. and Colorado National
Bankshares, Inc.
James L. Heskett (60), Professor, 1985 1995
Harvard University Graduate School of
Business Administration; Director, Cardinal
Distribution, Inc.
<FN>
(a) Includes period in which served as director of Equitable Life, which, in
a 1977 reorganization, became a wholly-owned subsidiary of the Company.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Name; (Age);
Principal Occupation
During Last Five Years; Year First Year
Directorships in Other Elected Term
Public Companies Director Expires
_______________________ ___________ ________
<S> <C> <C>
Richard S. Ingham, Jr. (48), Vice President ____ ____
and Controller, Asterisk, Inc.
(diversified media and retail holding
company)
Fred S. Hubbell (42), Chairman 1987 1994
(since April, 1993), President, and
Chief Executive Officer (since April,
1989) of the Company, Equitable
American Insurance Company ("Equitable
American") (since January, 1993), and
Equitable Life Insurance Company of Iowa
("Equitable Life") (since May, 1992),
and Chairman of Equitable Investment
Services, Inc. ("EISI") and USG Annuity
& Life Company ("USG"); Director,
Pioneer Hi-Bred International, Inc.
Robert E. Lee (58), Retired (February 1989) 1981 1995
Chairman and Director, First Interstate
Bank of Denver (commercial banking);
since March 1989, Executive Director, The
Denver Foundation (community foundation);
Director, Meredith Corporation, and
Storage Technology Corporation
James E. Luhrs (59), Consultant to the Company, 1983 1995
President and Chief Executive Officer,
Equitable Life (prior to May, 1992)
Jack D. Rehm (61), Chairman (since July, 1992), 1988 1996
President and Director (since February 1988)
and Chief Executive Officer (since February
1989) and previously an officer, Meredith
Corporation (diversified media company);
Director, The Vernon Company and Inter-
national Multifoods, Inc.
Thomas N. Urban (59), Chairman, President and 1979 1994
Director, Pioneer Hi-Bred International, Inc.
(hybrid seed corn business), Director, Sigma
Aldrich Corp.
Hans F. E. Wachtmeister (49), Teacher, Belmont 1981 1996
Hill School, Belmont, Massachusetts (since
August 1987).
Richard S. White (56), General Manager (since 1993 1996
December 1982) of the John Deere Des Moines
Works of Deere & Company.
</TABLE>
<PAGE>
<PAGE>
Committees of the Board of Directors
The Board of Directors has standing Compensation and Audit Committees and does
not have a standing Nominating Committee. The Compensation Committee
administers the executive compensation and benefit programs of the Company and
its subsidiaries. It is composed of four directors, Dr. Drury, Messrs. Covey,
Lee, and Rehm, who are not employees of the Company. The Committee met three
times during 1993 to evaluate the executive compensation program. The
Committee sometimes seeks advice from outside consultants in evaluating
compensation levels and benefit programs. The Committee each year reviews and
approves salaries for the Company's Board of Directors and executive personnel
and administers incentive compensation programs. The report of the
Compensation Committee on these compensation and benefit programs is provided
below.
The Audit Committee is composed of four directors, Messrs. Heskett, Ingham,
Urban, and White, who are not Company employees. The Committee met three
times in 1993 with the Company's independent auditors, internal auditors, and
other personnel to review internal financial controls, the principles and
practices of financial reporting, contingencies which might affect the
Company's financial position, the impact of regulatory requirements, and the
adequacy of the Company's disclosure. The Committee reviews the application
of accounting principles and practices, including adequacy of disclosure, and
the work of internal auditors and comments and recommendations of the
independent auditors. The Committee also nominates the independent auditors,
reviews the independent auditors' examination and reports and the Company's
system of internal controls, and determines whether the independent auditors
have access to all necessary data.
The Board also has an Executive Committee whose members are Messrs. Covey,
Heskett, Hubbell, Ingham, Lee, and Urban.
Compensation of the Board of Directors
The Board of Directors held five meetings during 1993. All members attended
at least 75% of the total number of meetings of the Board and committees of
the Board on which they served. In 1993 compensation of the non-employee
directors of the Company consisted of an annual fee of $12,000 and $750 for
each Board and Committee meeting attended, and an additional $750 was paid to
the Chair of each Committee. The Company has a program by which non-employee
directors may receive restricted stock in lieu of their annual fees. The
restricted stock vests at the end of each year of service on the Board of
Directors and entitles the director to all incidents of ownership including
the payment of dividends. Nine directors have elected to participate in this
program.
Mr. Luhrs serves as an independent contractor/consultant to the Company until
April 1, 1995 pursuant to an Agreement entered into in 1992 and receives
$65,000 for each of the final two years of the Agreement. Mr. Luhrs will,
prior to April 30, 1995, remain eligible for payment and vesting of previously
granted awards.
<PAGE>
<PAGE>
Executive Officers of the Company
Executive officers of the Company do not have fixed terms but serve until
removed by the Board of Directors. The principal occupations of each of the
persons named below are their respective offices with the Company or its
subsidiaries for more than the past five years unless otherwise noted. The
executive officers of the Company are:
Lawrence V. Durland, Jr. Age 47. Senior Vice President of the Company,
Equitable American and Equitable Life.
William E. Heng. Age 48. Senior Vice President-Administration of Equitable
Life and USG.
Fred S. Hubbell. Age 42. Chairman (since April, 1993), President and Chief
Executive Officer (since April, 1989) of the Company, Equitable American
(since January, 1993), Equitable Life (since May, 1992), and Chairman of EISI
and USG.
Paul E. Larson. Age 41. Executive Vice President, Treasurer and Chief
Financial Officer of the Company, Equitable American (since January, 1993) and
USG, and Executive Vice President and Chief Financial Officer of Equitable
Life.
Jon P. Newsome. Age 51. Executive Vice President-Sales and Marketing of the
Company, Equitable Life (since August, 1993), President and Chief Executive
Officer of USG.
John A. Merriman. Age 51. Secretary and General Counsel of the Company, USG
and Equitable American (since January, 1993) and Assistant Secretary and
General Counsel of Equitable Life.
Paul R. Schlaack. Age 47. President and Chief Executive Officer of EISI, the
Company's investment management subsidiary.
David A. Terwilliger. Age 36. Vice President and Controller of the Company,
Equitable American (since January, 1993), EISI, Equitable Life, and USG.
<PAGE>
<PAGE>
Security Ownership of Management
The following sets forth, as of March 10, 1994, the beneficial security
ownership of the Company's Common Stock by the directors and named executive
officers individually and the directors and executive officers as a group:
<TABLE>
<CAPTION>
Name Number of Shares (1) Percent of Class (2)
_________________________________________________________________________
<S> <C> <C>
Mr. Covey 18,668 *
Dr. Drury 11,628 *
Mr. Heskett 12,428 *
Mr. Hubbell 638,004 2.0%
Mr. Ingham 3,139,348 9.9%
Mr. Ingham, Jr. 24,004 *
Mr. Lee 7,982 *
Mr. Luhrs 148,756 *
Mr. Rehm 16,155 *
Mr. Urban 15,228 *
Mr. Wachtmeister 1,924,392 6.1%
Mr. White 1,488 *
Mr. Durland, Jr. 86,406 *
Mr. Heng 18,163 *
Mr. Larson 114,247 *
Mr. Merriman 109,700 *
Mr. Newsome 90,352 *
Mr. Schlaack 226,750 *
Mr. Terwilliger 7,907 *
All directors and executive
officers as a group (19) 6,611,606 20.8%
<FN>
(1) Included are shares held beneficially or of record by spouses and shares
held by a fiduciary, but the directors disclaim beneficial ownership of such
shares as follows: Hubbell, 156,730; Ingham, 3,122,120; and Wachtmeister,
1,835,056. Beneficial owners have sole voting and investment power with
respect to all shares except for those held by trustees. Includes shares
subject to exercisable options: Durland, Jr., 18,600; Heng, 4,200; Hubbell,
89,300; Larson, 55,200; Luhrs, 44,000; Merriman, 40,400; Newsome, 29,400;
Schlaack, 20,000; Terwilliger, 600; and all directors and executive officers
as a group, 305,700. Includes shares held in Company 401(k) Savings Plan by
the following persons: Durland, Jr., 11,356; Heng, 7,171; Hubbell, 18,638;
Larson, 8,213; Luhrs, 16,436; Merriman, 13,319; Schlaack, 18,966; Terwilliger,
5,350; and all directors and executive officers as a group, 99,449.
(2) An (*) indicates that the individual's ownership interests of the
Company's Common Stock is less than one percent.
</TABLE>
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION AND BENEFITS
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning
compensation paid or accrued by the Company and its subsidiaries for the last
three fiscal years with respect to Mr. Hubbell, as the Company's Chief
Executive Officer, and each of the next four most highly compensated executive
officers (the "named executive officers"):
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
All
Restricted Other
Name and Stock LTIP Compen-
Principal Salary Bonus Awards Options Payouts sation
Position Year ($) ($) ($)(1) (#)(2) ($)(3) ($)(4)
_____________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Fred S. Hubbell 1993 395,833 320,000 267,600 34,000 27,073 14,497
President & CEO 1992 345,000 210,000 - 0 - 38,000 113,366 9,364
1991 328,750 181,500 - 0 - 36,000 - 0 - 9,238
Paul R. Schlaack 1993 279,917 281,000 223,000 18,000 34,330 14,497
President & CEO 1992 264,250 265,320 - 0 - 20,000 79,968 9,364
EISI 1991 251,750 212,520 - 0 - 20,000 - 0 - 9,238
Jon P. Newsome 1993 266,539 119,250 98,008 29,000 23,214 14,497
President & CEO 1992 227,750 101,640 - 0 - 22,000 9,600 9,364
USG 1991 214,750 89,380 - 0 - 18,000 - 0 - 9,238
Paul E. Larson 1993 193,583 85,950 78,997 21,000 11,018 14,497
Executive V.P., 1992 170,250 77,850 - 0 - 16,800 18,092 9,368
Treas. & CFO 1991 160,750 66,420 - 0 - 16,000 - 0 - 9,238
Lawrence V. 1993 188,333 75,600 68,294 8,000 - 0 - 4,283
Durland, Jr., 1992 180,500 48,870 - 0 - 8,000 - 0 - 4,364
Sr. V.P. 1991 172,750 38,500 - 0 - 8,000 - 0 - 4,238
<FN>
(1) Valuation of awards based upon fair market value stock price of
$27.875 on May 1, 1993. 1993 restricted stock awards vest 10% after
2nd year, 30% after 3rd year, 60% after 4th year, and 100% after 5th
year. 1990 restricted stock awards vest March 9, 1995. At December
31, 1993 (based upon the fair market value stock price of $33.875) the
number and market value of all shares of restricted stock held by each
of the named executive officers were as follows: Mr. Hubbell (81,600;
$2,764,200), Mr. Schlaack (56,000; $1,897,000), Mr. Newsome (33,516;
$1,135,355), Mr. Larson (30,834; $1,044,502), Mr. Durland, Jr.
(26,450; $895,994). Restricted stock awards will vest in the event of
a change of control of the Company. The shareholder is entitled to
receive cash dividends and has all other rights as a shareholder as to
such shares prior to vesting, however upon voluntary termination by
the shareholder prior to vesting the full award is forfeited. Any
future grants of restricted shares to the named executive officers
will be consistent with the compensation philosophy of the Company
discussed below. Other than grants of restricted stock under the
Company's stock purchase incentive plan discussed below, further
grants are not contemplated prior to the vesting of the 1990 awards.
All share information presented to reflect two for one stock split
effective June 1, 1993.
(2) Awards comprised of qualified and non-qualified stock options. All
options were granted with an exercise price equal to the then fair
market value of the underlying stock. Five year vesting period with
20% exercisable after 3rd year, 50% after 4th year, and 100% after 5th
year. Unvested options are forfeited upon voluntary termination of
employment with the Company. All options will vest and the 1991
options were granted in tandem with limited stock appreciation rights
exercisable in cash, in the event of a change of control of the
Company.
(3) Payments represent cash bonus received by the named executive officer
upon the achievement of specified three year cumulative performance
goals. The earned bonus vests consistent with the option to which it
is associated and is paid only upon the exercise of the option held by
the named executive officer.
(4) This compensation includes the payment of $10,000 to each named
executive officer in lieu of typical perquisite payments except for
Mr. Durland, Jr., who is not eligible to receive these payments. The
payments are classified as taxable income and are required to be
applied to specified business expenses of the named executive.
Additionally, this compensation includes contributions to the
Company's 401(k) Plan on behalf of each named executive officer to
match a portion of their pre-tax deferral contributions (included
under the Salary column) made by each to such plan.
</TABLE>
<PAGE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock
options during the last fiscal year to the named executive officers under
the Company's 1992 Stock Incentive Plan:
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Options Grant
Underlying Granted to Exercise Date
Options Employees or Base Expiration Present
Granted(#) in Fiscal Price Date Value
(1) Year ($/sh) $ (2)
______________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Fred S. 34,000 14.3% 25.75 3-03-03 315,520
Hubbell
Paul R. 18,000 7.6% 25.75 3-03-03 167,040
Schlaack
Jon P. 24,000 10.1% 25.75 3-03-03 222,720
Newsome 5,000 2.1% 36.75 10-06-03 66,250
Paul E. 16,000 6.7% 25.75 3-03-03 148,480
Larson 5,000 2.1% 36.75 10-06-03 66,250
Lawrence V. 8,000 3.4% 25.75 3-03-03 74,240
Durland, Jr.
<FN>
(1) Options were granted with exercise price equal to the then fair market
value of the underlying stock. Five year vesting period with 20%
exercisable after 3rd year, 50% after 4th year, and 100% after 5th
year. Unvested options are forfeited upon a voluntary termination of
employment with the Company. The options will vest in the event of a
change of control of the Company. One-half of each option grant
expiring on March 3, 2003 is an incentive stock option.
(2) Value of $9.28 per share for the March 3 options and $13.25 for the
October 6 options are derived through application of the Black-Scholes
option pricing model. The actual value, if any, an executive may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised, so there is no assurance
the value realized by the named individual will be at or near the
value estimated by the Black-Scholes model. The estimated values
derived are based on assumptions of a 6% risk-free rate of return, an
expected stock price volatility of .39 calculated using stock prices
for 5 years prior to the grant date, a 2.7% future dividend yield
which is approximately equal to the Company's Common Stock historical
dividend yield, and 10 years to time of exercise. A downward
adjustment of 13% was made to the valuation to reflect the risk of
forfeiture characteristics of the options. If there is no stock price
appreciation above the option exercise price, the option will have no
value. If the stock price appreciates at levels equal to that
determined by the Black-Scholes model, the value appreciation realized
by all shareholders based on the March 3 options and stock price will
be $270 million of which the named executive officers would receive
.3% or approximately $900,000 of such increase in value. In addition,
if the stock price, based on the October 6 options and stock price,
appreciates at levels equal to that determined by the Black-Scholes
model, the value appreciation received by all shareholders will be
$387 million of which the named executive officers would receive .1%
or approximately $150,000 of such increase in value.
</TABLE>
<PAGE>
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table provides information, with respect to named executive
officers, concerning the exercise of options during the last fiscal year
and value of unexercised options held as of the end of the fiscal year:
<TABLE>
<CAPTION>
Number of
securities Value of
underlying unexercised
unexercised in-the-money
Shares options/SARs options/SARs
Acquired Value at Fy-End(#) at Fy-End($)
on Realized exercisable/ exercisable/
Name Exercise ($)(1) unexercisable unexercisable
(#) (2)
__________________________________________________________________________
<S> <C> <C> <C> <C>
Fred S. Hubbell 44,000 1,114,694 42,900/ 1,186,488/
173,200 3,932,925
Paul R. Schlaack 24,800 443,025 0/ 0/
84,000 1,872,125
Jon P. Newsome 13,200 290,602 11,000/ 315,219/
91,800 1,821,263
Paul E. Larson 18,200 444,388 30,000/ 832,000/
85,800 1,837,100
Lawrence V.
Durland, Jr. 14,400 411,075 8,000/ 220,875/
38,000 854,002
<FN>
(1) Value realized determined from market price on date of exercise less
the exercise price.
(2) Value determined from market price at fiscal year end ($33.875) less
exercise price. The actual value, if any, an executive may realize
will depend on the stock price on date of exercise of option, so
there is no assurance the value stated will be equal to the value
realized by the executive.
</TABLE>
<PAGE>
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
EIC, S&P 500 COMPOSITE INDEX, VALUE LINE INSURANCE: LIFE INDEX
The following performance graph provides comparative cumulative, five year
shareholder returns on an indexed basis of the Company's Common Stock with
the Standard & Poor's 500 Composite Index and the Value Line Insurance:
Life Index. This latter published industry index reflects the analysis of
the performance of fifteen life insurance companies selected by Value Line
Institutional Services.
PERFORMANCE GRAPH
1989 1990 1991 1992 1993
_______ _______ _______ _______ _______
EIC $147.32 $ 84.31 $218.52 $481.25 $734.53
S&P 500 $131.49 $127.32 $166.21 $179.30 $197.23
Life Index $155.78 $135.01 $197.50 $259.77 $261.72
*Assumes $100 invested on December 31, 1988, in
EIC Common Stock, S&P 500 Composite Index,
and Value Line Insurance: Life Index.
Cumulative total return assumes reinvestment
of dividends.
<PAGE>
<PAGE>
Employee Pension Plan. The Company and its wholly owned subsidiaries
maintain noncontributory defined benefit pension plans for all employees.
As participants must be age 55 to receive any benefits, none of the named
executive officers are presently eligible for retirement benefits under the
plan. The amounts paid by the employer are determined on an aggregate
actuarial basis, and no specific amounts are set aside for any individual.
In 1993 no contribution was required to fund the plan. The level of the
pension benefit is determined by an employee's salary and years of service.
Messrs. Hubbell, Schlaack, Larson, Durland, Jr. and Newsome have 11, 9, 17,
8, and 5 years of credited service, respectively. Retirement benefits from
Social Security are taken into account by crediting a lower rate of benefit
accrued on that portion of participant's salary subject to Social Security
taxation than on the portion above the maximum Social Security taxable wage
base. After service for seven years, the pension plan benefit is fully
vested.
The following Table sets forth the annual retirement benefits under the
formula based on a straight life annuity, assuming retirement at age 65,
currently payable for the indicated combinations of salary and years of
service. The table shows the combined amount that would be payable from
the pension plan, excess benefit plan, and supplemental plan.
<TABLE>
<CAPTION>
Years of Service
______________________________________________________________
Final Five-Year
Average Annual
Compensation 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$125,000 $ 40,598 $ 54,131 $ 67,663 $ 67,663 $ 67,663
$150,000 49,035 65,381 81,726 81,726 81,726
$175,000 57,473 76,631 95,788 95,788 95,788
$200,000 65,910 87,881 109,851 109,851 109,851
$225,000 74,348 99,131 123,913 123,913 123,913
$250,000 82,785 110,381 137,976 137,976 137,976
$300,000 99,660 132,881 166,101 166,101 166,101
$400,000 133,410 177,881 222,351 222,351 222,351
$450,000 150,285 200,381 250,476 250,476 250,476
$500,000 167,160 222,881 278,601 278,601 278,601
</TABLE>
OTHER COMPENSATION ARRANGEMENTS
The named executive officers are participants in the Company's Executive
Severance Pay Plan. This Plan provides benefits, depending upon length of
service but limited to one year's salary. Benefits accrue to eligible
employees under the Plan on termination of employment but compensation from
other employment, disability or retirement plans is deducted from benefits
otherwise payable. The Plan provides that upon a change of control of the
Company, benefits will vest if the named executives are terminated within
two years of the occurrence of such an event.
The named executive officers are participants in the Company's Key Employee
Incentive Plan. This Plan is a means for the Company to provide incentives
and rewards to those persons who are in a position to contribute
significantly to the long term profits and growth of the Company. Various
programs are administered by the Compensation Committee under this Plan.
The Plan also provides acceleration of awards at specified target levels in
the event of a change of control of the Company.
Various award programs under the Company's 1982 and 1992 Stock Incentive
Plan have been established in which the named executive officers are
participants. These Plans contain provisions which allow for vesting of
awards upon termination of employment, as a result of designated events,
and for acceleration of awards upon a change of control of the Company.
REPORT OF COMPANY'S COMPENSATION COMMITTEE
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information in regard to
the compensation and benefits provided to the Company's Chief Executive
Officer and the next four most highly compensated executive officers. The
disclosure requirements for these five individuals (the "named executive
officers") include the use of tables set forth above and a report
explaining the rationale and considerations that led to fundamental
executive compensation decisions affecting those individuals. In
fulfillment of this requirement, the Compensation Committee has prepared
the following report.
Compensation Philosophy. This report describes the compensation philosophy
followed by the Committee and resulting actions taken by the Company for
the reporting periods shown in the various compensation tables supporting
this report. The Committee approves payment amounts and award levels for
executive officers of the Company and its subsidiaries. In its analysis
and in reaching compensation related decisions, the Committee has direct
access to both competitive data and an independent compensation consultant.
The executive compensation program of the Company has been designed to:
* Provide a pay for performance policy that differentiates
compensation amounts based upon corporate and individual performance as
compared to the life insurance industry;
* Motivate key senior officers to achieve strategic business
initiatives and reward them for such achievement;
* Provide compensation opportunities which are comparable to those
offered by other leading companies, thus allowing the Company to compete
for and retain talented executives who are important to the Company's
long-term success; and
* Align the interests of executives with the long-term interests of
stockholders through award opportunities that can result in ownership of
Common Stock.
At present, the executive compensation program is comprised of salary,
annual cash incentive opportunities, long-term incentive opportunities in
the form of cash incentives, stock options and restricted stock and
benefits typically offered to executives by similar corporations. Salary
and standard annual incentive payouts are targeted at the 50th percentile
of industry surveys. These independently prepared surveys provide specific
data on compensation paid at various executive levels of life insurance
companies of comparable asset size, and include many companies included in
the published industry index presented in the Performance Graph on page 12,
but are not limited to them. An individual's total cash compensation can
exceed industry averages when cash bonus payouts are greater than targeted
levels based on the performance of the Company exceeding that of the
industry on average. Stock options and restricted stock are used to align
managers' interests with those of the shareholders but significant vesting
periods are also used to encourage long term stock ownership and retention
as employees.
As an executive's level of responsibility increases, a greater portion of
his or her potential total compensation opportunity is based upon
performance incentives and less on salary and employee benefits, causing
greater potential variability in the individual's absolute compensation
level from year-to-year. In addition, the higher that one rises in the
organization, the greater the mix of compensation shifts to stock-based
awards.
CEO's Compensation. Mr. Hubbell's base salary was increased from $350,000
to $400,000 (14.3%) effective February 1, 1993. This increase reflected
consideration of (1) compensation data provided by comparative industry
surveys, (2) the Committee's assessment of performance over the previous
one-year period which exceeded or met agreed upon objectives including, in
order of importance, increased operating earnings, return on equity, growth
of assets, achievement of a return on assets objective while maintaining
adequate capitalization to retain current ratings from the A.M. Best and
Standard & Poors rating agencies, maintaining adequate spreads consistent
with insurance product pricing, and reducing delinquencies, reducing higher
risk assets and increasing life insurance sales, and (3) a comparison of
the financial performance of the Company for the previous one year period
which exceeded or met that of comparable life insurance companies. While
the relative weight assigned to each factor, or component thereof, is not
quantified, greatest weight is given to comparative compensation industry
data. The independently prepared industry surveys utilized are national in
scope and include information from nationally recognized compensation
consulting firms. These surveys include many of the companies in the index
shown on page 12, but are not limited to them. These surveys are used to
define the midpoint of Mr. Hubbell's salary range for his base salary
whereas his level of performance, along with the performance of the Company
compared to the companies in the index and other life insurance and annuity
companies, determines his comparative position within the salary range.
The base salary was set somewhat below the 50% level shown by the surveys
after consideration of all of the factors. The cash bonus if earned may
increase Mr. Hubbell's total compensation above the 50% level relative to
the industry survey data.
Mr. Hubbell earned a cash bonus for 1993 in the amount of $320,000 based on
a statistical review of predetermined targets for the Company's 1993
performance. This review included an assessment of how the Company's
operating earnings and return on equity compared with established
objectives based upon expected industry performance in those same
performance measures. Mr. Hubbell's incentive opportunity may range from
0% - 80% of his base salary. In 1993 Mr. Hubbell earned an 80% incentive
bonus payment for the Company's 1993 performance. The performance of the
Company considerably exceeded the target level and industry average, hence
Mr. Hubbell's bonus payment was at the maximum level.
In 1993 Mr. Hubbell was granted an option to purchase 34,000 shares of the
Company's Common Stock at an exercise price of $25.75 per share which was
equal to the market value of the stock on the date of grant. The amount of
the option granted was determined by the practices of other comparable
companies as verified by external surveys and outside consultants, as well
as Mr. Hubbell's level of responsibilities, amounts of options and
restricted stock awards previously granted, number of options exercised and
held, and past and expected contributions to the Company.
In 1993 Mr. Hubbell received 9,600 shares of restricted stock under the
1992 Stock Purchase Incentive Plan for increasing his direct holdings by a
pre-established target set by the Committee prior to the commencement of
the Plan. This award represents 20% of the amount by which his
shareholdings increased over the 12 month period. These shares are
reported in the Summary Compensation Table and vest over a 5 year period.
Mr. Hubbell also received $10,000 in lieu of typical perquisite payments.
This payment is classified as taxable income and is applied directly to
business expenses. In addition the Company contributed $4,497 to Mr.
Hubbell's 401(k) account.
Salaries. Effective February 1, 1993, the Committee increased the salaries
paid to the other executive officers. Those individuals were granted
salary increases based on individual performance compared to their agreed
upon objectives and national insurance industry compensation data for
executive officers with similar levels of responsibilities at life
insurance companies of comparable asset size. As considered in
establishing Mr. Hubbell's compensation, the compensation survey data is
used to define the competitive midpoint of each executive's salary range
and individual and Company performance determines comparative position
within the range.
Effective September 1, 1993, the Committee approved salary increases for
certain executive officers of the Company based upon increases in
responsibilities resulting from the Company's new organizational
structure. The Committee considered current industry survey data and proxy
analysis comparing base salaries of the affected executives to comparable
positions in similar organizations.
Bonus Awards for 1993. In 1993, the named executive officers of the
Company earned cash bonuses based on a review of the Company's 1993
performance compared to predetermined targets. This review included an
assessment of how the Company's operating earnings and return on equity
compared with established objectives based upon expected industry
performance in those same performance measures. Payment was based on the
degree of statistical achievement of the above mentioned performance
objectives which the Committee established in January, 1993. The
performance of the Company considerably exceeded the target level and
industry averages, hence each executive officer's bonus payment was at the
maximum level.
Stock Awards in 1993 . The Company's stock incentive plans are designed to
align a significant portion of the executive compensation program with
shareholder interests. These shareholder approved plans permit the
granting of several different types of stock-based awards. Two types of
awards have been granted to executive officers and other key employees
under the 1992 Stock Incentive Plan. Substantially all awards have been in
the form of stock options which grant the participant a right to purchase
shares of common stock, subject to a significant vesting period, over a
ten-year period. The exercise price of the options is equal to the fair
market value per share as of the date the option is granted. The amount of
options granted is determined by the practices of other comparable
companies as verified by external surveys and outside consultants, as well
as each executive officer's level of responsibilities, amounts of options
and restricted stock awards previously granted, number of options exercised
and held, and past and expected contributions to the Company. Additionally
restricted stock has been awarded to participants. These are awards of
shares of common stock which cannot be sold or otherwise disposed of until
the applicable restriction period lapses and which are forfeited if the
participant terminates employment for any reason other than retirement,
disability or death prior to the lapsing of the restriction period (or
applicable portion of such period). This Stock Purchase Incentive Plan is
designed to increase management's ownership of Company stock over a five
year period. Under this program the Committee awards restricted stock
equal to 20% of the amount of increased individual ownership of the
Company's stock.
All stock awards granted in 1993 did not exceed 1% of the total outstanding
stock of the Company. The Committee intends to maintain this annual award
limit over time. In granting stock options and restricted stock, the
Committee took into account the practices of other comparable companies as
verified by external surveys and outside consultants, as well as the
executive's level of responsibility, number of options exercised and held,
and past and expected contributions to the Company.
In 1993 Section 162(m) of the Internal Revenue Code was amended to place
limitations on the deductibility to the Company of compensation paid to the
named executive officers. The current policy of the Committee is to
establish executive compensation levels and programs that will be
competitive within the industry and attract highly talented individuals.
It is the goal of the Committee that executive compensation will be
structured so as not to be subject to the deductibility limitations of
Section 162(m) to the extent practical and consistent with its compensation
policy.
EQUITABLE OF IOWA COMPANIES
COMPENSATION COMMITTEE
By: Robert E. Lee, Chairman
Richard B. Covey
Doris M. Drury
Jack D. Rehm
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Hubbell Realty Company ("Hubbell Company") is a one-third partner and is
managing general partner in a partnership owning an office and retail
complex in downtown Des Moines, Iowa. The Company is a primary guarantor,
secured by a mortgage and guarantees from the partners, of the
partnership's $26,310,013 permanent financing and receives an annual fee of
$148,322. Company subsidiaries have leased Hubbell Company properties. In
1993 the Company paid to the partnership fees and rent totaling $365,473.
The Board of Directors believes that these fee and lease terms are
comparable to those which would have been paid to an unrelated party.
Certain Company directors and officers are also directors or shareholders
of Hubbell Company, all of whose voting securities are owned by Hubbell
family members.
Compensation Committee Interlocks and Insider Participation
Mr. Hubbell serves as the Chairman of the Compensation Committee of
Pioneer Hi-Bred International, Inc. Mr. Urban, who is the Chairman and
President of Pioneer Hi-Bred International, Inc., serves as a member of
the Board of Directors of the Company. The Board of Directors does not
believe that this relationship has provided Mr. Hubbell with any favorable
compensation arrangements or authority which would not have otherwise been
granted to him by the Board of Directors as the Chief Executive Officer of
the Company.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than ten
percent of the Company's stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange
Commission. These persons are required to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on a review of the
copies of such forms furnished to the Company and written representations
from these persons, the Company believes that all Section 16(a) filing
requirements applicable to its executive officers, directors and greater
than ten percent beneficial owners were complied with, with one exception.
In a single transaction, Mr. Luhrs exercised stock options and properly
reported this activity, however, the report of the related disposition of
shares acquired on exercise of the options was not timely made.
APPROVAL OF AUDITORS
The Board of Directors has appointed the accounting firm of Ernst & Young
to act as independent auditors for the Company during 1994. The Company
knows of no direct or material indirect financial interest of this
accounting firm in the Company. Representatives of Ernst & Young are
expected to be present at the Meeting, may make a statement if they desire
to do so, and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
To be included in the proxy statement and form of proxy for the 1995 Annual
Meeting of Shareholders, shareholder proposals intended to be presented at
that meeting must be received by the Company at its principal office no
later than December 1, 1994 and otherwise be in compliance with applicable
securities laws.
OTHER MATTERS
Management does not know of any matters to be presented at the meeting
other than those stated above. If any other business should come before
the meeting, the persons named in the enclosed proxy will vote thereon as
he or they determine to be in the best interests of the Company.
A copy of the Annual Report to Shareholders for 1993 is mailed to
shareholders together with this Proxy Statement. Such report is not
incorporated in this Proxy Statement and is not to be considered a part of
the proxy soliciting material.
By Order of the Board of Directors.
John A. Merriman
Secretary
Des Moines, Iowa
March 18, 1994
<PAGE>
<PAGE>
EQUITABLE OF IOWA COMPANIES
Proxy For Annual Meeting of Shareholders
April 28, 1994
This proxy is solicited by the Board of Directors
The undersigned hereby appoints FREDERICK S. HUBBELL, PAUL E. LARSON AND
JOHN A. MERRIMAN, and each of them as Proxies, with power of substitution in
each, to vote all shares of the Common Stock of Equitable of Iowa Companies
(the "Company"), which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held on April 28, 1994 at 9:30
a.m., Des Moines local time, and at any adjournment thereof, on all matters
set forth in the Notice of Meeting and Proxy Statement dated March 18, 1994, a
copy of which has been received by the undersigned, as follows:
PLEASE MARK VOTES [ ] OR [X]
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE
VOTED "FOR" EACH OF THE MATTERS STATED.
1. ELECTION OF DIRECTORS:
[ ] FOR electing all nominees [ ] WITHHOLD AUTHORITY to vote for
listed below (except as all nominees listed below.
marked to the contrary.)
Doris M. Drury, Fred S. Hubbell,
Richard S. Ingham, Jr., and Thomas N. Urban
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the space below.)
______________________________________________________________________________
2. APPROVAL OF THE APPOINTMENT OF ERNST & YOUNG AS AUDITORS FOR THE COMPANY.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. The Proxies are authorized to vote upon such other matters as may properly
come before the meeting as they determine to be in the best interests of
the Company.
Dated _______________________________, 1994
___________________________________________
___________________________________________
Signature of Shareholder(s)
IMPORTANT: Please mark this proxy, date,
sign exactly as your name(s) appear(s) and
return in the enclosed envelope. If shares
are held jointly, signature should indicate
that status. Trustees and others signing
in a representative capacity should so
indicate.
(Please complete, date, sign and mail this Proxy Card
in the envelope provided)
