2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 306 Compensation Discussion and Analysis How did we perform? MetLife’s Strategy The Company’s strategy is founded on the principle of One MetLife, where digital and simplified are the key enablers of MetLife’s four strategic cornerstones: • optimizing value and risk by focusing on our businesses with higher internal rates of return, lower capital intensity, and maximum cash generation; • driving operational excellence, by transforming into a high-performance operating company with a competitive cost structure; • strengthening our distribution channels to drive efficiency and productivity through digitalization and improved customer persistency; and • taking a targeted approach to deliver the right solutions for the right customers through differentiated customer value propositions. This enterprise strategy will enhance our ability to focus on the right markets, build clear differentiators, and continue to make the right investments to deliver shareholder value. Highlights of Business Results 2017 Business Results Under the leadership of CEO Steven A. Kandarian, the year 2017 was one of the most transformational in MetLife’s history. The Separation of MetLife’s U.S. retail business, which dated to the Company’s origins in 1868 and is now known as Brighthouse Financial, was the centerpiece of the Company’s strategy to become simpler and less capital intensive with stronger Free Cash Flow. MetLife also grew its fee-based businesses such as MetLife Investment Management ( MIM ), which provides asset management services to institutional clients. MetLife’s acquisition of Logan Circle Partners, L.P., bolstered this strategy by adding $38.5 billion to MIM’s assets under management (as of December 31, 2017), giving global clients a broader set of investment solutions, and significantly enhancing the Company’s reach in the consultant distribution channel. MetLife’s top growth priorities continue to include asset management services. A key element of MetLife’s strategy is to return excess capital to shareholders. The Company’s 2017 ratio of Core Free Cash Flow to Core Adjusted Earnings was 75 percent, the top end of its Business Plan range. This strong Core Free Cash Flow helped MetLife return $4.6 billion to shareholders through dividends and share repurchases. The Company’s Core Adjusted EPS also grew by 5 percent. MetLife’s capital management philosophy has remained consistent. The Company pursues attractive organic opportunities and merger and acquisition opportunities that align with its strategy and culture. But if organic and inorganic growth cannot clear a risk-adjusted hurdle rate, MetLife will return excess capital to its rightful owners, the shareholders. In other areas, MetLife did not live up to its own high standards. The Company reviewed its practices and procedures used to estimate its reserves related to unresponsive or missing group annuitants. MetLife concluded it had not tried hard enough to find people in the pension plans whose obligations it had assumed, and the decision to release the reserves backing those obligations was an error. As a result, MetLife increased reserves by $510 million, before income tax. MetLife is committed to locating and paying as many of these customers as possible, with interest, and to re-setting the bar to best-in-class standards for future communication with annuitants. While it’s a disappointment that the issue was not escalated earlier for remediation, MetLife discovered the issue itself, self-reported it to its primary regulator, and is taking all necessary steps to fix it. On the heels of the missing or unresponsive U.S. group annuitant issue, the Company also discovered that it was over- reserved in the MetLife Holdings segment for variable annuity guarantees assumed from a former operating joint venture in Japan. As a result, MetLife reduced these reserves by $896 2018 Proxy Statement 45 Total of 04 pages in section METLIFE, INC.