Form 8-K
8-K — TRAVELERS COMPANIES, INC.
Accession: 0001104659-26-065727
Filed: 2026-05-22
Period: 2026-05-20
CIK: 0000086312
SIC: 6331 (FIRE, MARINE & CASUALTY INSURANCE)
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Submission of Matters to a Vote of Security Holders
Item: Financial Statements and Exhibits
Documents
8-K — tm2614971d2_8k.htm (Primary)
EX-10.1 — EXHIBIT 10.1 (tm2614971d2_ex10-1.htm)
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8-K — FORM 8-K
8-K (Primary)
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2026-05-20
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 20, 2026
The
Travelers Companies, Inc.
(Exact name of registrant as specified in its
charter)
Minnesota
(State or
other jurisdiction of
incorporation)
001-10898
(Commission
File Number)
41-0518860
(IRS Employer
Identification
No.)
485
Lexington Avenue
New York,
New York 10017
(Address
of principal executive offices) (Zip code)
(917)
778-6000
(Registrant’s
telephone number, including area code)
Not Applicable
(Former name or
former address, if changed since last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see
General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Common
stock, without par value
TRV
New
York Stock Exchange
Indicate by check mark whether the registrant is
an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
e)
On May 20, 2026, the shareholders of The Travelers Companies, Inc. (the “Company”) approved an amendment to The
Travelers Companies, Inc. Amended and Restated 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”) at the Company’s
annual meeting of shareholders. The amendment increases the number of shares authorized for issuance under the 2023 Stock Incentive Plan
by 5,000,000 shares. The material terms of the 2023 Stock Incentive Plan, as amended, are described in the Company’s definitive Proxy Statement, dated April 7, 2026, under the heading “Item 4 — Amendment to The Travelers Companies, Inc. Amended
and Restated 2023 Stock Incentive Plan”, which is incorporated herein by reference.
The
2023 Stock Incentive Plan, as amended, is filed as Exhibit 10.1 hereto.
Item 5.07. Submission of Matters to a Vote of Security Holders.
The Company held its annual meeting of shareholders on May 20, 2026.
For more information on the following proposals submitted to shareholders, see the Company’s definitive proxy statement, dated April
7, 2026. Below are the final voting results.
Item 1 — Election of Directors
Name
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
Russell G. Golden
168,238,679
1,639,828
319,720
19,515,425
Thomas B. Leonardi
153,419,673
16,264,670
513,884
19,515,425
Clarence Otis Jr.
160,722,985
9,063,326
411,916
19,515,425
Elizabeth E. Robinson
164,661,733
5,140,320
396,174
19,515,425
Todd C. Schermerhorn
168,340,221
1,525,966
332,040
19,515,425
Alan D. Schnitzer
162,326,012
7,561,754
310,461
19,515,425
Bridget van Kralingen
168,566,054
1,323,649
308,524
19,515,425
David S. Williams
169,179,519
699,251
319,457
19,515,425
Item 2 — Ratification of Independent Registered Public
Accounting Firm
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
176,385,126
13,020,934
307,592
0
Item 3 — Non-Binding Vote to Approve Executive Compensation
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
157,619,183
11,431,214
1,147,830
19,515,425
Item 4 — Amendment to The Travelers Companies, Inc. Amended
and Restated 2023 Stock Incentive Plan
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
124,148,482
45,264,986
784,759
19,515,425
1
Item 5 — Shareholder Proposal Relating to a Report on
Climate-Related Pricing and Coverage Decisions
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
24,894,789
143,415,990
1,887,488
19,515,425
Item
6 — Shareholder Proposal Relating to an Independent Board Chairman
Votes For
Votes Against
Votes Abstained
Broker Non-Votes
36,359,133
132,910,022
929,072
19,515,425
Item 9.01. Financial Statements and
Exhibits.
(d)
Exhibits.
Exhibit No.
Description
10.1
The Travelers Companies, Inc. Amended and Restated 2023 Stock Incentive Plan.
101.1
Pursuant to Rule 406 of Regulation S-T, the cover page to this Current Report on Form 8-K is formatted in Inline XBRL.
104.1
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101.1.)
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
The Travelers Companies, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 22, 2026
THE TRAVELERS COMPANIES, INC.
By:
/s/ Christine K. Kalla
Name: Christine K. Kalla
Title: Executive Vice President and General Counsel
3
EX-10.1 — EXHIBIT 10.1
EX-10.1
Filename: tm2614971d2_ex10-1.htm · Sequence: 2
EXHIBIT 10.1
THE TRAVELERS COMPANIES, INC.
Amended and Restated 2023 STOCK INCENTIVE PLAN
1. Purpose.
The purposes of The Travelers Companies, Inc. Amended and Restated 2023 Stock Incentive Plan (the “Plan”) are (i) to
attract and retain Eligible Persons by providing competitive compensation opportunities, (ii) to provide Eligible Persons with incentive-based
compensation in the form of Company Common Stock, (iii) to attract and compensate non-employee directors for service as Board and
committee members, (iv) to encourage decision making based upon long-term goals, and (v) to align the interest of Eligible Persons
with that of the Company’s shareholders by encouraging such persons to acquire a greater ownership position in the Company.
2. Definitions.
Wherever used herein, the following terms shall have the respective meanings set forth below:
“Award” means an award to a Participant made
in accordance with the terms of the Plan.
“Board” means the Board of Directors of the Company.
“Code” means the Internal Revenue Code of 1986,
as amended from time to time, and any successor thereto.
“Company” means The Travelers Companies, Inc.
“Committee” means the Compensation Committee
of the Board, or a subcommittee of that committee, or such other committee of the Board (including, without limitation, the full Board)
to which the Board has delegated power to act under or pursuant to the provisions of the Plan. Unless otherwise determined by the Board,
the Committee shall consist of no less than two directors, all of whom shall be intended to qualify as “independent directors”
within the meaning of Rule 303A of the New York Stock Exchange, and as “non-employee directors” within the meaning of
Rule 16b-3 under the Exchange Act.
“Common Stock” means the common stock of the
Company.
“Change of Control” means the first to occur
of (i) any “person” within the meaning of Section 14(d) of the Exchange Act, other than a Permitted Holder,
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of fifty
percent (50%) or more of the then-outstanding Common Stock, other than pursuant to a purchase of Common Stock from the Company; (ii) individuals
who constitute the Board on the Effective Date, cease for any reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the Effective Date, whose election, or nomination for election by the Company’s shareholders,
was approved by a vote of at least three quarters of the directors comprising the Board on the Effective Date (either by a specific vote
or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such
nomination) shall be, for purposes of this clause (ii), considered as though such person were a member of the Board on the Effective Date;
(iii) any plan or proposal for the liquidation of the Company is adopted by the shareholders of the Company; (iv) all or substantially
all of the assets of the Company are sold, liquidated or distributed (in one or a series of related transactions) to any person or group
other than Permitted Holders; or (v) the consummation of a reorganization, merger, consolidation or other corporate transaction involving
the Company (a “Transaction”), in each case, with respect to which the shareholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own more than fifty percent (50%) of the combined voting power of the Company or
other entity resulting from such Transaction in substantially the same proportion as their ownership of the voting power of the Company
immediately prior to such Transaction. Notwithstanding the foregoing, for purposes of Awards hereunder that are subject to the provisions
of Section 409A of the Code and the regulations promulgated thereunder (“Code Section 409A”), no Change of Control
shall be deemed to have occurred upon an event described in clauses (i) through (v) above that would have the effect of changing
the time of payment of such Award unless such event would also constitute a change in the ownership or effective control of, or a change
in the ownership of a substantial portion of the assets of, the Company for purposes of Code Section 409A.
1
“Effective Date” means the effective date of
this Plan, as defined in Section 25.
“Eligible Person” means an employee, non-employee
director, consultant or other service provider with respect to the Company or its affiliates.
“Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, and any successor thereto.
“Fair Market Value” means, as of a specified
date, unless otherwise determined by the Committee, the closing trading price of a share of Common Stock on the New York Stock Exchange
or on any national securities exchange on which the shares of Common Stock are then listed, or if the shares were not traded on such date,
then on the immediately preceding date on which such shares of Common Stock were traded, all as reported by such source as the Committee
may select.
“ISO” means an incentive stock option as defined
in Section 422 of the Code.
“Option Proceeds” means the cash actually received
by the Company for the exercise price in connection with the exercise of a stock option granted under the Plan plus the tax benefit that
could be realized by the Company as a result of such stock option exercise, which tax benefit shall be determined by multiplying (a) the
amount that is deductible for federal income tax purposes as a result of such stock option exercise (currently, equal to the amount upon
which the Participant’s withholding tax obligation is calculated) times (b) the maximum federal corporate income tax rate for
the year of exercise. To the extent a Participant pays the exercise price and/or withholding taxes with shares of Common Stock, Option
Proceeds shall not be calculated with respect to the amounts so paid with shares.
“Participant” means an Eligible Person who is
selected by the Committee to participate in the Plan.
“Permitted Holder” means (i) the Company
or any of its affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any
of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership
of stock of the Company.
“Performance Conditions” may, for purposes of
Awards under the Plan, include one or more of: earnings per share, earnings before interest and tax, net income, adjusted net income,
core income, stock price, total shareholder return, market share, return on equity, cash return on equity, achievement of profit, loss
and/or expense ratio, revenue targets, cash flows, book value, return on assets or return on capital, improvements in capital structure,
revenues or sales, working capital, credit rating, improvement in workforce diversity, employee retention, closing of corporate transactions,
customer satisfaction, or implementation, completion or attainment of products or projects. Such Performance Conditions may be based on
the attainment of levels set for such financial measures with respect to the Company or any subsidiary, division, business unit, or any
combination thereof and may be set as an absolute measure or relative to a designated peer group or index of comparable companies. Such
Performance Conditions shall be set and defined by the Committee, and for purposes of defining such Performance Conditions, the Committee
may elect to exclude the impact of certain extraordinary or non-recurring items. Unless specifically determined by the Committee at the
time a Performance Condition is set, the satisfaction of any Performance Condition shall be determined by eliminating the impact of any
change in accounting rules which becomes effective following the time such Performance Condition is set.
“Prior Plan” means the Company’s Amended
and Restated 2014 Stock Incentive Plan.
2
“Prior Plan Award” means an equity award granted
under the Prior Plan which remained outstanding as of the Effective Date, as set forth in Section 25.
3. Shares
Subject to the Plan. Subject to adjustment as provided in Section 20, the number of shares of Common Stock which shall be available
and reserved for grant of Awards under the Plan shall be 12,889,184. The shares of Common Stock issued under the Plan may come from authorized
and unissued shares or shares purchased in the open market.
Shares of Common Stock subject to an Award granted under this Plan
or a Prior Plan Award that expires unexercised, that is forfeited, terminated or canceled, that is settled in cash or other forms of property,
or otherwise does not result in the issuance of shares of Common Stock, in whole or in part, shall thereafter again be available for grant
under the Plan. If the exercise price of any stock option is satisfied by delivering shares of Common Stock to the Company (by tender
of such shares or attestation) or by authorizing the Company to retain shares of Common Stock, only the number of shares of Common Stock
delivered to the Participant net of shares of Common Stock delivered to the Company (by tender or attestation) or retained by the Company
shall be deemed delivered for purposes of determining the maximum number of shares of Common Stock available for grant under the Plan.
To the extent any shares of Common Stock subject to an Award are not delivered to a Participant because such shares are used to satisfy
an applicable tax or other withholding obligations, such shares shall not be deemed to have been delivered for purposes of determining
the maximum number of shares of Common Stock available for grant under the Plan. Shares of Common Stock purchased by the Company on the
open market using Option Proceeds shall also be available for grant under the Plan; provided, however, that the increase in the number
of shares of Common Stock available for grant pursuant to such market purchases shall not be greater than the number that could be repurchased
at Fair Market Value on the date of exercise of the stock option giving rise to such Option Proceeds.
In addition, the number of shares of Common Stock available for grant
under the Plan shall not be reduced by shares subject to Awards granted upon the assumption of or in substitution for awards granted by
a business or entity that is merged into or acquired by (or whose assets are acquired by) the Company.
4. Administration.
4.1 Committee Authority. The Committee shall have full and exclusive power to administer and interpret the Plan, to grant Awards
and to adopt such administrative rules, regulations, procedures and guidelines governing the Plan and the Awards as it may deem necessary
in its discretion, from time to time. The Committee’s authority shall include, but not be limited to, the authority to:
(i) determine the type and timing of Awards to be granted under the Plan;
(ii) select Award recipients and determine the extent of their participation;
(iii) establish all other terms, conditions, restrictions and limitations applicable to Awards and the shares of Common Stock issued pursuant
to Awards, including, but not limited to, those relating to a Participant’s retirement, death, disability, leave of absence or termination
of employment; and
(iv) waive vesting or forfeiture conditions with respect to outstanding Awards.
The Committee’s right to make any decision, interpretation
or determination under the Plan shall be in its sole and absolute discretion.
4.2 Administration of the Plan. The administration of the Plan shall be managed by the Committee. The Committee shall have the
power to prescribe and modify, as necessary, the form of Award document, to correct any defect, supply any omission or clarify any inconsistency
in the Plan and/or in any Award document and to take such actions and make such administrative determinations that the Committee deems
appropriate in its discretion. Any decision of the Committee in the administration and interpretation of the Plan, as described herein,
shall be final, binding and conclusive on all parties concerned, including the Company, its shareholders and subsidiaries and all Participants.
3
4.3 Delegation of Authority. To the extent permitted under applicable law, the Committee may at any time delegate to a committee
of the Board or one or more officers of the Company some or all of its authority over the administration of the Plan, with respect to
persons who are not subject to the reporting requirements of Section 16(a) of the Exchange Act.
5. Eligibility.
The Committee shall determine which Eligible Persons shall be eligible to receive Awards. No Eligible Person shall have at any time the
right to receive an Award, or having been selected for an Award, to receive any further Awards.
The Committee may also grant stock options, stock appreciation rights,
restricted stock, performance awards or other Awards under the Plan in substitution for, or in connection with the assumption of, existing
options, stock appreciation rights, restricted stock, performance awards or other awards granted, awarded or issued by another entity
and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a merger, consolidation,
plan of exchange, acquisition of property or stock, separation, reorganization or liquidation to which the Company or any subsidiary is
a party. The terms and conditions of the substitute Awards may vary from the terms and conditions set forth in the Plan to the extent
the Committee at the time of the grant may deem appropriate to conform, in whole or in part, to the provisions of the awards in substitution
for which they are granted.
6. Awards.
Awards under the Plan may consist of: non-qualified stock options, ISOs, stock appreciation rights, restricted stock, performance
awards and any other stock-based awards, including deferred stock units.
7. Stock
Options.
7.1 Types of Options. Stock options granted under the Plan may be non-qualified stock options, ISOs or any other type of stock
option permitted under the Code, as determined by the Committee and evidenced by the document governing the Award.
7.2 ISOs. The terms and conditions of any ISO shall be subject to the provisions of Section 422 of the Code and the terms,
conditions, limitations and administrative procedures established by the Committee. At the discretion of the Committee, ISOs may
be granted to any employee of the Company and its subsidiaries, as such term is defined in Section 424(f) of the Code (each,
a “Subsidiary”). No ISO may be granted to any Participant who, at the time of such grant, owns more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or of any Subsidiary, unless (i) the exercise price for
such ISO is at least one-hundred and ten percent (110%) of the Fair Market Value of a share of Common Stock on the date the ISO is granted,
and (ii) the date on which such ISO terminates is a date not later than the day preceding the fifth anniversary of the date on which
the ISO is granted. Any Participant who disposes of shares acquired upon the exercise of an ISO either within two years after the date
of grant of such ISO or within one year after the transfer of such shares to the Participant, shall notify the Company of such disposition
and of the amount realized upon such disposition. The maximum number of shares of Common Stock available under the Plan for issuance as
ISOs shall be the full number of shares reserved for issuance under Section 3 hereof.
All stock options granted under the Plan are intended to be
nonqualified stock options, unless the applicable Award document expressly states that the stock option is intended to be an ISO. If a
stock option is intended to be an ISO, and if for any reason such stock option (or portion thereof) shall not qualify as an ISO, then,
to the extent of such nonqualification, such stock option (or portion thereof) shall be regarded as a nonqualified stock option granted
under the Plan; provided that such stock option (or portion thereof) otherwise complies with the Plan’s requirements relating to
nonqualified stock options.
4
7.3 Exercise Price and Period. The Committee shall establish the exercise price, which price (other than for substitute options
pursuant to Section 5 or options intended to meet the requirements described under Section 26 for Eligible Persons outside of
the United States) shall be no less than the Fair Market Value of a share of the Common Stock on the date of grant. Each stock option
may be exercised in whole or in part on the terms provided in the Award document. The Committee also shall establish the period during
which a stock option is exercisable, provided that in no event may a stock option be exercisable for a period of more than ten (10) years
from the date of grant.
When a stock option is no longer exercisable, it shall be deemed
to have lapsed or expired.
7.4 Manner of Exercise. The exercise price of each share as to which a stock option is exercised and, if requested, the amount
of any federal, state, local or foreign withholding taxes, shall be paid in full at the time of such exercise. For purposes of this Section 7.4,
the exercise date of a stock option shall be the later of the date a notice of exercise is received by the Company and, if applicable,
the date payment is received by the Company pursuant to clauses (i), (ii), (iii), (iv) or (v) below. The exercise of any stock
option shall be contingent on and subject to such payment of the exercise price and withholding taxes, or the arrangement for the satisfaction
of such payments in a manner satisfactory to the Committee. Such payment shall be made in any of the following forms:
(i) in cash (including check, bank draft or money order),
(ii) by delivery of shares of Common Stock owned by the Participant (by tender of such shares or by attestation) having a Fair Market Value
as of the date of exercise equal to the exercise price for the total number of shares as to which the option is exercised, plus applicable
taxes, if requested, subject to (A) the shares so delivered having such characteristics as are required, if necessary, in order to
avoid adverse accounting consequences to the Company on account of use of such shares to pay the exercise price and (B) such other
guidelines for the tender of Common Stock as the Committee may establish,
(iii) if approved by the Committee in the related Award document or other action by the Committee, authorization of the Company to retain
from the total number of shares of Common Stock as to which the option is exercised that number of shares of Common Stock having a Fair
Market Value as of the date of exercise equal to the exercise price for the total number of shares as to which the option is exercised,
plus applicable taxes, if requested (i.e., a “net settlement” arrangement),
(iv) subject to such rules as may be established by the Committee, through the delivery of irrevocable instructions to a broker to
sell shares obtained upon the exercise of the stock option and to deliver promptly to the Company an amount out of the proceeds of such
sale equal to the aggregate exercise price for the Shares being purchased, or
(v) such other consideration as the Committee deems appropriate, or by a combination of cash, shares of Common Stock, retention of shares
and such other consideration.
The Committee may, with the consent of the Participant and
subject to Section 21, cancel any outstanding stock option in consideration of a cash payment in an amount not greater than the excess,
if any, of the aggregate Fair Market Value (on the date of such cancellation) of the shares subject to the stock option over the aggregate
exercise price of such stock option; provided, however, that the Participant’s consent is not required for such a cancellation pursuant
to Section 13 hereof.
5
7.5 Automatic Exercise in Certain Circumstances. Notwithstanding Sections 7.3 and 7.4 of the Plan, to the extent that any portion
of a vested and exercisable stock option remains unexercised as of the close of business on the expiration date of the stock option (either
the originally scheduled expiration date or such earlier date on which the stock option would otherwise expire pursuant to the applicable
Award documents in connection with a termination of employment other than due to gross misconduct or cause) (the “Automatic Exercise
Date”), the entire vested and exercisable portion of such stock option will be exercised on the Automatic Exercise Date without
any further action by the Participant to whom the stock option was granted (or the person or persons to whom the stock option may have
been transferred in accordance with Section 15 of the Plan and any applicable Award documents), but only if (i) the Fair Market
Value per share of Common Stock on the Automatic Exercise Date is at least $0.01 greater than the per share exercise price of the stock
option, and (ii) no suspension of the automatic option exercise program described under this Section 7.5 is then in effect.
The aggregate exercise price for any option exercise under this Section 7.5 and any related withholding taxes will be paid by the
Company retaining from the total number of shares of Common Stock as to which the stock option is being exercised a number of shares having
an aggregate Fair Market Value as of the Automatic Exercise Date equal to the amount of such aggregate exercise price plus the applicable
withholding taxes. Consistent with Section 26 of the Plan, the Committee shall have the authority to limit or modify the applicability
of this provision to Participants who are foreign nationals or employed outside of the United States, or both. Because the responsibility
for exercising a stock option rests with the Participant, and because the exercise procedure described in this Section 7.5 is provided
only as a convenience to Participants, neither the Committee, the Company nor any of its directors, officers, employees or agents shall
incur any liability to any Participant if a stock option expires unexercised because an exercise pursuant to this Section 7.5 fails
to occur for any reason.
8. Stock
Appreciation Rights. An Award of a stock appreciation right shall entitle the Participant, subject to terms and conditions determined
by the Committee, to receive upon exercise of the stock appreciation right all or a portion of the excess of the Fair Market Value of
a specified number of shares of Common Stock as of the date of exercise of the stock appreciation right over a specified strike price,
which price (other than for substitute stock appreciation rights pursuant to Section 5 or stock appreciation rights intended to meet
the requirements described under Section 26 for Eligible Persons outside of the United States) shall be no less than the Fair Market
Value of a share of the Common Stock on the date of grant of the stock appreciation right or the date of grant of a previously granted
related stock option, as determined by the Committee in its discretion. A stock appreciation right may be granted in connection with a
previously or contemporaneously granted stock option, or independent of any stock option. If issued in connection with a previously granted
related stock option, the Committee shall impose a condition that the exercise of the stock appreciation right cancels the related stock
option and exercise of the related stock option cancels the stock appreciation right, and the other terms of the stock appreciation right
shall be identical in all respects to the terms of the related stock option except for the medium of payment. Each stock appreciation
right may be exercised in whole or in part on the terms provided in the Award document. Stock appreciation rights granted independent
of any stock option shall be exercisable for such period as specified by the Committee; provided that, in no event may a stock
appreciation right be exercisable for a period of more than ten (10) years. When a stock appreciation right is no longer exercisable,
it shall be deemed to have lapsed or terminated. Except as otherwise provided in the applicable agreement, upon exercise of a stock appreciation
right, payment to the Participant shall be made in the form of cash, shares of Common Stock or a combination of cash and shares of Common
Stock as promptly as practicable after such exercise. The Award document may provide for a limitation upon the amount or percentage of
the total appreciation on which payment (whether in cash and/or shares of Common Stock) may be made in the event of the exercise of a
stock appreciation right. The Committee may, with the consent of the Participant and subject to Section 21, cancel any outstanding
stock appreciation right in consideration of a cash payment in an amount not in excess of the difference between the aggregate Fair Market
Value (on the date of such cancellation) of any shares subject to the stock appreciation right and the aggregate strike price of such
Shares; provided, however, that the Participant’s consent is not required for such a cancellation in connection with the purchase
of such stock appreciation right pursuant to Section 13 hereof. The automatic exercise provisions described under Section 7.5
with respect to stock options shall apply on a similar basis with respect to stock appreciation rights.
6
9. Restricted
Stock. Restricted stock may be granted in the form of actual shares of Common Stock, which shall be evidenced by a certificate with
an appropriate legend, or in uncertificated direct registration form, registered in the name of the Participant but held by the Company
until the end of the restricted period, as determined by the Committee. As a condition to the receipt of an award of restricted stock
in the form of actual shares of Common Stock, a Participant may be required to execute any stock powers, escrow agreements or other documents
as may be determined by the Committee. Any conditions, limitations, restrictions, vesting and forfeiture provisions shall be established
by the Committee in its discretion.
The Committee may, on behalf of the Company, approve the purchase by
the Company of any shares subject to an Award of restricted stock, to the extent vested, for an amount equal to the aggregate Fair Market
Value of such shares on the date of purchase. Awards of restricted stock may provide the Participant with dividends or dividend equivalents
(pursuant to Section 17) and voting rights, if in the form of actual shares, prior to vesting.
10. Performance
Awards. Performance awards may be in the form of performance shares valued with reference to a share of Common Stock or performance
units valued with reference to an amount of property (including cash) other than shares of Common Stock. Performance awards may also be
granted in the form of any other stock-based Award. Performance awards shall entitle a Participant to future payments based upon the attainment
of Performance Conditions established in writing by the Committee. Payment shall be made in cash, shares of Common Stock or any combination
thereof, as determined by the Committee. The Award document establishing a performance award may establish that a portion of a Participant’s
Award will be paid for performance that exceeds the minimum target but falls below the maximum target available to the Award. The Award
document shall also provide for the timing of payment.
Following the conclusion or acceleration of the period of time designated
for attainment of the Performance Conditions, the Committee shall determine the extent to which the Performance Conditions have been attained
and shall then cause to be delivered to the Participant (i) a number of shares of Common Stock equal to the number of performance
shares or the value of such performance units determined by the Committee to have been earned, and/or (ii) cash equal to the Fair
Market Value of such number of performance shares or the value of performance units, as the Committee shall elect or as shall have been
stated in the applicable Award document.
11. Other
Stock-Based Awards. The Committee may issue unrestricted shares of Common Stock, or other awards denominated in Common Stock (including
but not limited to phantom stock and restricted or deferred stock units), to Participants, alone or in tandem with other Awards, in such
amounts and subject to such terms and conditions as the Committee shall from time to time in its sole discretion determine.
12. Award
Documents. Each Award under the Plan shall be evidenced by an Award document (which may consist of a term sheet or an agreement, and
may be provided in electronic form) setting forth the terms and conditions, as determined by the Committee, which shall apply to such
Award, in addition to the terms and conditions specified in the Plan. The Committee may, in its discretion, place terms in the Award documents
that provide for the acceleration of any time periods relating to the exercise or realization of any Awards so that such Awards may be
exercised or realized in full on or before a date fixed by the Committee, in connection with a Change of Control.
13. Change
of Control. The Committee may, in its discretion, at the time an Award is made hereunder or at any time prior to, coincident with
or after the time of a Change of Control:
(i) provide for the purchase or cancellation of such Awards, for an amount of cash, if any, equal to the amount which could have been
obtained upon the exercise or realization of such rights had such Awards been currently exercisable or payable;
(ii) make such adjustment to the Awards then outstanding as the Committee deems appropriate to reflect such transaction or change (including
the acceleration of vesting); and/or
7
(iii) cause the Awards then outstanding to be assumed, or new rights substituted therefore, by the surviving corporation in such Change
of Control.
The Committee may, in its discretion, include such further provisions
and limitations in any Award document as it may deem equitable and in the best interests of the Company.
14. Withholding.
The Company and its subsidiaries shall have the right to deduct from any payment to be made pursuant to the Plan, or to require prior
to the issuance or delivery of any shares of Common Stock or the payment of cash under the Plan, any taxes (whether federal, state, local
or foreign) to be withheld therefrom. Additionally, the Committee may permit or require a Participant to publicly sell, in a manner prescribed
by the Committee, a sufficient number of Shares in connection with the settlement of an Award (with a remittance of the sale proceeds
to the Company) to cover applicable tax withholdings. The Committee may, in its discretion, permit a Participant to elect to satisfy such
withholding obligation by any of the methods pursuant to which the exercise price of a stock option may be paid pursuant to Section 7.
Any satisfaction of tax obligations through the withholding of shares may only be up to the statutory minimum tax rate, or such higher
rates of up to maximum applicable withholding rates as may be permitted by the Committee. Any fraction of a share of Common Stock required
to satisfy such obligation shall be disregarded and the amount due shall instead be paid in cash to the Participant.
15. Transferability.
Except as provided in this Section, during the lifetime of a Participant to whom an Award is granted, only that Participant (or that Participant’s
legal representative in the case of disability) may exercise a stock option or stock appreciation right, or receive payment with respect
to restricted stock, a performance award or any other Award. The Committee may permit (on such terms, conditions and limitations as it
determines), an Award of restricted stock, stock options, stock appreciation rights, performance shares or performance units or other
Awards to be transferred or transferable to family members, charities or estate planning vehicles, in each case, for no consideration
and only to the extent permissible by law and, in the case of an ISO, to the extent permissible under Section 422 of the Code. Other
than as stated in the preceding sentence, no Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered
by a Participant otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company.
16. Deferrals
and Settlements. The Committee may require or permit Participants to elect to defer the issuance of shares or the settlement of Awards
in cash under such rules and procedures as it may establish under the Plan. It may also provide that deferred settlements include
the payment or crediting of interest or dividend equivalents on the deferral amounts. Any such rules or procedures shall comply with
the requirements of Code Section 409A, including those with respect to the time when a deferral election may be made, the period
of the deferral and the events that would result in the payment of the deferred amount.
17. Dividends
and Dividend Equivalents. An Award (other than a stock option or stock appreciation right) may, if so determined by the Committee,
provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to Common Stock subject
to the Award (both before and after the Common Stock subject to the Award is earned, vested or acquired), which payments may be either
made currently or credited to an account for the Participant, and may be settled in cash or Common Stock, as determined by the Committee;
provided, however, that in the case of any performance-based Awards, any associated dividends or dividend equivalent payments will not
be paid unless and until the corresponding portion of the underlying Award is earned. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Common Stock, may be subject to such conditions, restrictions and contingencies
as the Committee shall establish, including the reinvestment of such credited amounts in Common Stock equivalents.
18. No
Right to Awards or Employment. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not
be construed as giving a Participant the right to continue in the employ of the Company or its subsidiaries. Further, the Company and
its subsidiaries expressly reserve the right at any time to dismiss a Participant without any liability, or any claim under the Plan,
except as expressly provided herein or in any Award document entered into hereunder.
19. Rights
as a Shareholder. Unless the Committee determines otherwise, a Participant shall not have any rights as a shareholder with respect
to shares of Common Stock covered by an Award until the date the Participant becomes the holder of record with respect to such shares.
No adjustment will be made for dividends or other rights for which the record date is prior to such date, except as provided in Section 17.
8
20. Adjustment
of and Changes in Common Stock. Except as otherwise provided under Section 13 or as separately addressed pursuant to Section 17,
in the event of any Share dividend or split, reorganization, recapitalization, merger, consolidation, spin-off, combination or transaction
or exchange of Shares or other corporate exchange, equity restructuring (as defined under Financial Accounting Standards Board (FASB)
Accounting Standards Codification 718), or any distribution to shareholders other than regular cash dividends or any transaction similar
to the foregoing the Committee shall cause there to be made a substitution or adjustment, as it determines to be equitable in order to
prevent a dilution or enlargement of rights relative to other shareholders of Common Stock, to (i) the number and kind of shares
of Common Stock or other securities issued or reserved for issuance pursuant to the Plan and to outstanding Awards (including but not
limited to the number and kind of shares of Common Stock or other securities to which such Awards are subject, and the exercise or strike
price of such Awards) to the extent such other Awards would not otherwise automatically adjust in the equity restructuring, (ii) the
maximum number of Shares for which Awards may be granted during a specified period to any Participant, and/or (iii) any other affected
terms of such Awards; provided, in each case, that no such adjustment shall be authorized under this Section 20 to the extent that
such adjustment would cause an Award to be subject to adverse tax consequences under Section 409A of the Code. In either case, any
such substitution or adjustment shall be conclusive and binding for all purposes of the Plan. Unless otherwise determined by the Committee,
the number of shares of Common Stock subject to an Award shall always be a whole number. In no event shall an outstanding stock option
or stock appreciation right be amended for the sole purpose of decreasing the exercise price or strike price thereof, except in accordance
with Section 21 of the Plan.
21. Amendment;
Repricing. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, provided that (i) no amendment
shall be made without shareholder approval if such approval is necessary in order for the Plan to continue to comply with the rules of
the New York Stock Exchange, and (ii) no amendment, suspension or termination may materially adversely affect any outstanding Award
without the consent of the Participant to whom such Award was made; provided, however, that the Committee may amend the
Plan in such manner as it deems necessary to permit the granting of Awards to meet the requirements of the Code or other applicable laws
(including, without limitation, to avoid adverse tax or accounting consequences to the Company or to Participants). Except for adjustments
pursuant to Section 20, in no event may any stock option or stock appreciation right granted under the Plan be amended to decrease
the exercise price or strike price thereof, as the case may be, or be cancelled (i) in exchange for a cash payment exceeding the
excess (if any) of the Fair Market Value of shares covered by such stock option or stock appreciation right over the corresponding exercise
price or strike price for such Award or (ii) in conjunction with the grant of any new stock option or stock appreciation right or
other Award with a lower exercise price or strike price, as the case may be, or otherwise be subject to any action that would be treated
under the rules of the New York Stock Exchange as a “repricing” of such stock option or stock appreciation right, unless
such amendment, cancellation or action is approved by the Company’s shareholders in accordance with applicable law and rules of
the New York Stock Exchange.
22. Government
and Other Regulations. The obligation of the Company to settle Awards in Common Stock shall be subject to all applicable laws, rules,
and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award
to the contrary, the Company shall be under no obligation to offer to sell or to sell and shall be prohibited from offering to sell or
selling any shares of Common Stock pursuant to an Award unless such shares have been properly registered for sale pursuant to the Securities
Act of 1933 with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the
Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms
and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the
Securities Act of 1933 any of the shares of Common Stock to be offered or sold under the Plan. If the shares of Common Stock offered for
sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act of 1933, the Company
may restrict the transfer of such shares and may legend the Common Stock certificates representing such shares in such manner as it deems
advisable to ensure the availability of any such exemption.
9
23. Relationship
to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any subsidiary or affiliate of the Company except as otherwise
specifically provided in such other plan.
24. Governing
Law. The Plan shall be construed and its provisions enforced and administered in accordance with the laws of the State of Minnesota
applicable to contracts made and performed wholly within such state by residents thereof.
25. Effective
Date. This Plan, prior to the amendment and restatement thereof, was initially approved by the Board on February 8, 2023, subject
to approval by the Company’s shareholders, and became effective upon the date of such shareholder approval on May 24, 2023
(the “Effective Date”). Subject to earlier termination pursuant to Section 21, the Plan shall terminate on the tenth
anniversary of the Effective Date. No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but Awards
theretofore granted may extend beyond that date.
26. Foreign
Eligible Persons. Awards may be granted to Participants who are foreign nationals or employed outside the United States, or both,
on such terms and conditions different from those applicable to Awards to Participants employed in the United States as may, in the judgment
of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose
conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for
Eligible Persons on assignments outside their home country.
27. Compliance
with Code Section 409A.
27.1 Separation from Service. If any amount shall be payable with respect to any Award hereunder as a result of a Participant’s
termination of employment or other service and such amount is subject to the provisions of Code Section 409A, then notwithstanding
any other provision of this Plan, a termination of employment or other service will be deemed to have occurred only at such time as the
Participant has experienced a “separation from service” as such term is defined for purposes of Code Section 409A.
27.2 Timing of Payment to a Specified Employee. If any amount shall be payable with respect to any Award hereunder as a result of
a Participant’s “separation from service” at such time as the Participant is a “specified employee” and
such amount is subject to the provisions of Code Section 409A, then notwithstanding any other provision of this Plan, no payment
shall be made, except as permitted under Code Section 409A, prior to the first day of the seventh (7th) calendar month beginning
after the Participant’s separation from service (or the date of his or her earlier death). The Company may adopt a specified employee
policy that will apply to identify the specified employees for all deferred compensation plans subject to Code Section 409A; otherwise,
specified employees will be identified using the default standards contained in the regulations under Code Section 409A.
27.3 General Compliance with Code Section 409A. Notwithstanding other provisions of the Plan or any Award agreements thereunder,
no Award shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner that would result in the
imposition of an additional tax under Code Section 409A upon a Participant. In the event that it is reasonably determined by the
Committee that, as a result of Code Section 409A, payments in respect of any Award under the Plan may not be made at the time contemplated
by the terms of the Plan or the relevant Award agreement, as the case may be, without causing the Participant holding such Award to be
subject to taxation under Code Section 409A, such payments or other benefits shall be deferred, if deferral will make such payment
or other benefits compliant under Code Section 409A, or otherwise such payment or other benefits shall be restructured, to the minimum
extent necessary, in a manner, reasonably determined by the Committee, that does not cause such an accelerated or additional tax or result
in an additional cost to the Company (without any reduction in such payments or benefits ultimately paid or provided to the Participant).
The Company shall use commercially reasonable efforts to implement the provisions of this Section 27 in good faith; provided that
neither the Company, the Board, the Committee nor any of the Company’s employees, directors or representatives shall have any liability
to Participants with respect to this Section 27.
10
28. Awards
Subject to the Plan. In the event of a conflict between any term or provision contained in the Plan and a term contained in any Award
agreement, the applicable terms and provisions of the Plan will govern and prevail.
29. Fractional
Shares. Notwithstanding other provisions of the Plan or any Award agreements thereunder, the Company shall not be obligated to issue
or deliver fractional Shares pursuant to the Plan or any Award and the Committee shall determine whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be
cancelled, terminated or otherwise eliminated with, or without, consideration.
30. Severability.
If any provision of the Plan or any Award is, or becomes or is deemed to be invalid, illegal, unenforceable in any jurisdiction or as
to any Participant or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction,
Participant or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
31. Forfeiture/Clawback.
Any Awards granted under the Plan may be subject to reduction, cancellation, forfeiture or recoupment to the extent required by applicable
law or listed company rules or to the extent otherwise provided in an Award agreement at the time of grant.
11
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