THG 2019 Proxy Statement

THE HANOVER INSURANCE GROUP 2019 PROXY STATEMENT 14 by a petition signed by at least 100 record holders of our Common Stock representing in the aggregate at least one percent of the outstanding shares entitled to vote on the election of directors. Communicating with the Board Shareholders and other interested parties can communicate with the Board, including the non-management directors and the Independent Presiding Director, by writing to The Hanover Insurance Group, Inc., Board of Directors, Attn: Corporate Secretary, 440 Lincoln Street, Worcester, Massachusetts 01653, through the website www.HanoverAlertLine.com or by calling 1-800-533-2547. An independent third-party service retrieves all submissions to the website and answers all calls to the toll-free telephone number, and passes the information on to our General Counsel, our General Auditor and the chair of the Audit Committee, who, when appropriate, transmit the information to the appropriate member of the Board. Communications may be anonymous or confidential. Complaints relating to the Company’s accounting, internal accounting controls or auditing matters will be referred to the chair of the Audit Committee. Other concerns will be referred to the Chair of the Board. All shareholder-related complaints and concerns will be received, processed and acknowledged by the Board. Further information regarding communications with the Board may be found at the Company’s website, www.hanover.com , under “About Us-Corporate Governance—Contact the Board.” Director Compensation The Compensation Committee (the “ Committee ”) is responsible for advising the Board with respect to the Company’s director compensation practices and programs. In executing such responsibilities in 2018, the Committee reviewed relevant market data provided by F.W. Cook to assist it in developing compensation recommendations. The market data considered included an analysis of data from the Comparative Proxy Data Companies (for more information on these companies, please see page 26), size-adjusted general industry survey data from F.W. Cook’s 2017 Non-Employee Director Compensation Report (a comprehensive survey source comprised of 300 randomly selected companies from various industries categorized based on their revenue and market cap) and a review of recent trends and developments in director compensation. The Committee presented its recommendations to the full Board, which, at its May meeting, made its compensation decision for the succeeding year (beginning immediately following the Annual Meeting of Shareholders and running until the next Annual Meeting of Shareholders (the “ Annual Compensation Cycle” )) . In setting director compensation, the Board considered competitive pay levels in light of the amount of time that directors expend in fulfilling their duties to the Company, as well as the level of skill and expertise the Company requires of its Board. Additionally, awards to directors under the Company’s 2014 Long-Term Incentive Plan (the “ 2014 Plan ”) must comply with the annual limits contained in the plan. Based upon its review of the information provided above and the Committee’s recommendation, for the 2018/2019 Annual Compensation Cycle, the Board elected to increase the annual Board member stock and cash retainer fees, as well as the chair and member retainers for the Compensation Committee, as indicated below. The increases were designed to compensate the Board for its increasing responsibilities and to remain competitive from a marketplace perspective. Fees 2018/2019 Annual Compensation Cycle 2017/2018 Annual Compensation Cycle Annual Director Retainer Stock Component (issued pursuant to the 2014 Plan) $135,000 $125,000 Cash Component $95,000 $90,000 Chair of the Board Retainer $125,000 $125,000 Committee Chairperson Retainers* NCGC $21,000 $21,000 Compensation $25,000 $21,000 Audit $36,000 $36,000 Committee Member Annual Retainer NCGC $10,000 $10,000 Compensation $11,000 $10,000 Audit $15,000 $15,000 * Includes both committee chairperson and committee member retainer. Additionally, the Company’s charitable foundation provides matching contributions to gifts made by directors to qualified charities, up to $5,000 per director per calendar year. At the election of each director, (i) cash retainers may be converted to Common Stock, and (ii) cash and stock compensation may be deferred pursuant to our non-employee director deferral plan. Deferred cash amounts are accrued in a bookkeeping account that is credited with notional interest based on the so-called General Agreement on Tariffs and Trade (“ GATT ”) rate (2.80% for 2018 and 3.36% for 2019, as determined using the November 2017 and 2018 published rates, respectively).