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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Genworth Financial, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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		6620 West Broad Street     Richmond, Virginia 23230

April 4, 2012

Dear Stockholder,

You are invited to attend the 2012 Annual Meeting of Stockholders to be held at 9:00 a.m. local time on Thursday, May 17, 2012, at The Westin Richmond, 6631 West Broad Street, Richmond, Virginia 23230.

The Annual Meeting will include a report on our business operations, discussion and voting on the matters set forth in the accompanying Notice of Annual Meeting and proxy statement, and discussion and voting on any other business matters properly brought before the meeting.

Whether or not you plan to attend, you can ensure your shares are represented at the meeting by promptly submitting your proxy by telephone, by Internet or by completing, signing, dating and returning your proxy card in the enclosed envelope.

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NOTICE OF 2012 ANNUAL MEETING OF STOCKHOLDERS

9:00 a.m., May 17, 2012

The Westin Richmond

6631 West Broad Street

Richmond, Virginia 23230

April 4, 2012

To the Stockholders:

NOTICE IS HEREBY GIVEN that Genworth Financial, Inc.’s 2012 Annual Meeting of Stockholders will be held at The Westin Richmond, 6631 West Broad Street, Richmond, Virginia 23230, on Thursday, May 17, 2012, at 9:00 a.m. local time, to address all matters that may properly come before the Annual Meeting. In addition to receiving a report on our business operations, stockholders will be asked:

Stockholders of record at the close of business on March 21, 2012 will be entitled to vote at the meeting and any adjournments.

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CONTENTS

• To be voted on at the meeting

Every stockholder’s vote is important. Please complete, sign,

date and return your proxy card, or submit your

proxy by telephone or by Internet.

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ELECTION OF DIRECTORS

Currently, nine directors serve on our Board of Directors, the terms for whom all expire at the Annual Meeting. One of our current directors, Dr. Risa J. Lavizzo-Mourey, will not stand for re-election at the Annual Meeting. Our Board of Directors adopted a resolution in March 2012, upon the recommendation of the Nominating Committee, setting the size of the Board of Directors at eight members, effective as of the Annual Meeting. Accordingly, at the Annual Meeting, eight directors are to be elected to hold office until the 2013 Annual Meeting and until their successors have been elected and have qualified. Working through its Nominating Committee, our Board of Directors continues to evaluate the optimal size for the Board and will continue to consider the addition of one or more independent directors to the Board.

The eight nominees for election at the Annual Meeting are listed on pages 8 to 11 with brief biographies and descriptions of their qualifications and skills to serve as our directors. See the Board of Directors and Committees—Board Composition section for a description of how our directors’ blend of backgrounds benefits our company. The Board of Directors has determined that seven of the eight nominees are independent directors under the New York Stock Exchange (“NYSE”) listing requirements and our Governance Principles, which are discussed below in the Corporate Governance section.

All of the nominees named in this proxy statement have been nominated by our Board of Directors to be elected by holders of our common stock. We are not aware of any reason why any nominee would be unable to serve as a director. If a nominee for election is unable to serve, the shares represented by all valid proxies will be voted for the election of any other person that our Board of Directors may nominate as a substitute.

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		Steven W. Alesio, 58, former Chairman of the Board of The Dun & Bradstreet Corporation. Director since March 2010.   Mr. Alesio has been a Senior Advisor at Providence Equity Partners since December 2010. Mr. Alesio was the Chairman of the Board of The Dun & Bradstreet Corporation (“D&B”) from May 2005 until his retirement in June 2010. He was initially elected to D&B’s board of directors in May 2002. Mr. Alesio served as D&B’s Chief Executive Officer from January 2005 to December 2009, its President from May 2002 to February 2007, its Chief Operating Officer from May 2002 to December 2004 and its Senior Vice President of Global Marketing, Strategy Implementation, E-Business Solutions™ and Asia-Pacific/Latin America from January 2001 to April 2002. Before joining D&B, Mr. Alesio was with the American Express Company for 19 years, most recently serving as President and General Manager of the Business Services Group and as a member of that company’s Planning and Policy Committee, a position he held from January 1996 to December 2000. During the last five years, Mr. Alesio also previously served as a director of The Dun & Bradstreet Corporation. Mr. Alesio received a B.S. in Accounting from St. Francis College and an M.B.A. from the University of Pennsylvania’s Wharton School.   Qualifications: Mr. Alesio, as the former chairman and former chief executive officer of a public company, has developed significant strategic and marketing expertise and also has substantial experience managing international operations and technology changes. Mr. Alesio also has 19 years of experience with a financial services company as well as experience with accounting and finance.
		William H. Bolinder, 68, former President, Chief Executive Officer and a director of Acadia Trust N.A. Director since October 2010.   Mr. Bolinder retired in June 2006 from serving as President, Chief Executive Officer and a director of Acadia Trust N.A., positions he had held since 2003. He had previously been a member of the Group Management Board for Zurich Financial Services Group from 1994 to 2002. Mr. Bolinder joined Zurich American Insurance Company, USA in 1986 as Chief Operating Officer and became Chief Executive Officer in 1987. He has been a director of Endurance Specialty Holdings Ltd. since December 2001 and became the non-executive Chairman of the Board in March 2011. Mr. Bolinder was a director of Quanta Capital Holding Ltd. from January 2007 to October 2008. Mr. Bolinder has also served on the board of the American Insurance Association, American Institute for Chartered Property Casualty Underwriting, Insurance Institute for Applied Ethics, Insurance Institute of America, Insurance Services Office, Inc. and the National Association of Independent Insurers. Mr. Bolinder received a B.S. in Business Administration from the University of Massachusetts, Dartmouth.   Qualifications: Mr. Bolinder offers extensive experience in the insurance and financial services industry, including a combined 16 years serving in various positions with one of the world’s largest insurance companies and its U.S. subsidiary, and three years as president, chief executive officer and director of an investment advisory and trustee company. Mr. Bolinder’s current and former directorships with underwriters of specialty lines of insurance and reinsurance provide valuable knowledge regarding the international financial services sector.

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		Michael D. Fraizer, 53, Chairman of the Board, President and Chief Executive Officer of Genworth Financial, Inc. Director since May 2004.   Mr. Fraizer has been our Chairman of the Board, President and Chief Executive Officer since the completion of our initial public offering (“IPO”) in May 2004. Prior to our IPO, he was a Senior Vice President of General Electric Company (“GE”) and served as Chairman and Chief Executive Officer of GE Financial Assurance Holdings, Inc. (“GEFAHI”). Prior to serving in those roles, Mr. Fraizer served in various capacities at GE, including leadership roles at GE Capital Commercial Real Estate, GE Japan, GE Corporate Business Development and GE Corporate Audit Staff. Mr. Fraizer currently serves on the boards of the Andre Agassi Charitable Foundation and the Richmond Performing Arts CenterStage. He is also a member of the executive counsel of the Bridging Richmond Initiative, a member of the VCU School of Education Advancement Council and a Board member of Richmond’s Future. Mr. Fraizer received a B.A. in Political Science from Carleton College.   Qualifications: Mr. Fraizer brings insight across commercial, financial and operational aspects of our business, from his current role and history with the company. Mr. Fraizer has held a number of chief executive officer and general management roles in his 31 year career that have required strategic, financial, business transformation and business building skills in U.S. and international markets.
		Nancy J. Karch, 64, former Senior Partner of McKinsey & Company. Director since October 2005.   Ms. Karch was a Senior Partner of McKinsey & Company, an independent consulting firm, from 1988 until her retirement in 2000. Prior thereto, Ms. Karch served in various executive capacities at McKinsey since 1974. She is a director of Kimberly-Clark Corp., Liz Claiborne, Inc., MasterCard Incorporated, and The Corporate Executive Board Company. Ms. Karch is also on the board of the Westchester Land Trust and Northern Westchester Hospital, both not-for-profit organizations. Ms. Karch received a B.A. in Mathematics from Cornell University, an M.S. in Mathematics from Northeastern University and an M.B.A. from Harvard Business School.   Qualifications: Ms. Karch, based on her 26 years at a global consulting firm, including 12 years as a Senior Partner, offers substantial expertise in the area of strategic and marketing issues. Ms. Karch also has substantial experience as a public company director.

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		Christine B. Mead, 56, former Executive Vice President and Chief Financial Officer of Safeco Corporation. Director since October 2009.   Ms. Mead was the Executive Vice President and Chief Financial Officer of Safeco Corporation and the Co-President of the Safeco insurance companies from November 2004 until her retirement in December 2005. From January 2002 to November 2004, Ms. Mead served as Senior Vice President, Chief Financial Officer and Secretary of Safeco Corporation. Prior to joining Safeco in 2002, Ms. Mead served in various roles at Travelers Insurance Companies from 1989 to 2001, including Senior Vice President and Chief Financial Officer, Chief Accounting Officer, and Controller. Ms. Mead also served with Price Waterhouse LLP from 1980 to 1989, and with Deloitte Haskins & Sells in the United Kingdom from 1976 to 1980. Ms. Mead also serves as a director of CLS Group Holdings AG and is on the board of the Idaho Chapter of The Nature Conservancy, a non-profit organization. Ms. Mead received a B.S. in Accounting from University College Cardiff, United Kingdom.   Qualifications: Ms. Mead brings experience as the former chief financial officer of a public company. She worked for 16 years in the insurance industry, as well as 13 years for major accounting firms. Her international background adds a unique perspective to our Board.
		Thomas E. Moloney, 68, former Senior Executive Vice President and Chief Financial Officer of John Hancock Financial Services, Inc. Director since October 2009.   Mr. Moloney served as the interim Chief Financial Officer of MSC—Medical Services Company from December 31, 2007 to March 31, 2008. He retired as the Senior Executive Vice President and Chief Financial Officer of John Hancock Financial Services, Inc. in December 2004. He had served in that position since 1992. Mr. Moloney served in various other roles at John Hancock Financial Services, Inc. during his tenure from 1965 to 1992, including Vice President, Controller, and Senior Accountant. Mr. Moloney is on the boards of Nashoba Learning Group and the Boston Children’s Museum, both non-profit organizations. During the last five years, Mr. Moloney also previously served as a director of MSC—Medical Services Company (a public company). Mr. Moloney received a B.A. in Accounting from Bentley College and holds a Professional Director Certification from the Corporate Directors Group.   Qualifications: Mr. Moloney provides almost 40 years of insurance industry and accounting experience, including having served as the chief financial officer of a public insurance company. He provides extensive knowledge of accounting and finance in regard to insurance products and industry trends.

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		James A. Parke, 66, former Vice Chairman and Chief Financial Officer of GE Capital Services and former Senior Vice President of General Electric Company. Director since May 2004.   Mr. Parke retired as Vice Chairman and Chief Financial Officer of GE Capital Services and a Senior Vice President at GE in December 2005. He had served in those positions since 2002. From 1989 to 2002 he was Senior Vice President and Chief Financial Officer at GE Capital Services and a Vice President of GE. Prior thereto, from 1981 to 1989 he held various management positions in several GE businesses. He also serves as a director of buildOn, a not-for-profit corporation. Mr. Parke received a B.A. in History, Political Science and Economics from Concordia College in Minnesota.   Qualifications: Mr. Parke offers extensive experience in the areas of finance, financial services and capital markets, gained in part through his 37 years of experience with GE and GE Capital, including having served as a former Vice Chairman and Chief Financial Officer of GE Capital, where he helped build GE’s financial and insurance businesses.
		James S. Riepe, 68, former Vice Chairman of T. Rowe Price Group, Inc. Director since March 2006 and Lead Director since February 2009.   Mr. Riepe is a retired Vice Chairman and a Senior Advisor at T. Rowe Price Group, Inc. Mr. Riepe served as the Vice Chairman of T. Rowe Price Group, Inc. from 1997 until his retirement in December 2005. Prior to joining T. Rowe Price Group, Inc. in 1982, Mr. Riepe was an Executive Vice President of The Vanguard Group. Mr. Riepe serves as a director of The NASDAQ OMX Group, Inc. and LPL Investment Holdings, Inc. He is a member of the University of Pennsylvania’s Board of Trustees. Mr. Riepe previously served as a director of T. Rowe Price Group, Inc. (a public company) and 57 T. Rowe Price registered investment companies (mutual funds). Mr. Riepe received a B.S. in Industrial Management, an M.B.A. and an Honorary Doctor of Laws degree from the University of Pennsylvania.   Qualifications: Mr. Riepe brings to the Board significant expertise in finance and investments gained through his experiences as a senior executive in the investment management industry, including 23 years with T. Rowe Price.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF MR. ALESIO, MR. BOLINDER, MR. FRAIZER, MS. KARCH, MS. MEAD, MR. MOLONEY, MR. PARKE AND MR. RIEPE.

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CORPORATE GOVERNANCE

Governance Principles

Our Governance Principles are published on Genworth’s website, as are our other corporate governance materials, including the charters adopted by the Board for each of our standing committees and any key practices adopted by the committees. To view these materials, go to www.genworth.com, click “Investors” and then click “Corporate Governance.” The Board regularly reviews corporate governance developments and may modify these principles, charters and key practices as warranted. Any modifications will be reflected in the documents on Genworth’s website.

Meeting Attendance

The Board held 11 meetings during 2011. During 2011, each of our directors attended more than 75% of the aggregate of (1) the total number of meetings of the Board of Directors (held during the period for which he or she has been a director) and (2) the total number of meetings held by all committees of the Board on which he or she served (during the periods that he or she served). As set forth in the Governance Principles, directors are expected to attend the Annual Meeting. All of our directors serving at the time of our 2011 Annual Meeting of Stockholders attended the meeting.

Board Leadership Structure

Our Board of Directors functions in a collaborative fashion that emphasizes active participation and leadership by all of its members. With respect to the role of Chairman, our Board believes that one of its most important responsibilities is determining which director is most appropriate to serve in that role. The Board has determined that, by virtue of his tenure with and extensive knowledge of the company, Mr. Fraizer is the appropriate choice to serve as Chairman of the Board at this time. The Board believes that the combination of Mr. Fraizer as both Chairman and Chief Executive Officer (“CEO”), together with Mr. Riepe, the Lead Director selected from among and by the independent directors, is currently the appropriate leadership structure for the company. The Chairman and the Lead Director provide leadership to the Board as a whole in setting its strategic priorities. In his position as CEO, Mr. Fraizer has primary responsibility for the day-to-day operations of the company and, accordingly, is able to effectively communicate the Board’s strategic findings and guidance to management. In his position as Lead Director, Mr. Riepe presides at all meetings of independent directors, is available to work with the Chairman to discuss stockholder inquiries regarding the Board and exercises the other responsibilities described below. At this time, Mr. Fraizer is the sole member of the Board who is not independent. With a supermajority of independent directors, a strong committee structure, a Lead Director with well-defined responsibilities, and the fact that the Chairman/CEO does not serve on any Board committees, Genworth’s Board of Directors is comfortable with its existing leadership structure. Our Board reviews its leadership structure from time to time as appropriate.

As more fully set forth in our Governance Principles, available on our website (to view, go to www.genworth.com, click “Investors,” then click “Corporate Governance,” then click “Governance Principles” and finally click “Governance Principles” one more time), the Lead Director’s responsibilities and authority include:

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Role of Board in the Oversight of Risk

Our Board of Directors recognizes that, although risk management is primarily the responsibility of Genworth’s management, the Board plays a critical role in the oversight of risk. As a financial services company, the very nature of our business involves the underwriting, management and assumption of risks on behalf of our customers. The Board believes it is an important part of its responsibilities to oversee the company’s overall risk assessment processes and management thereof. The Board as a whole discusses with management specific business risks as part of its regular reviews of the individual business units and also on a company-wide basis as part of its strategic reviews. The Board also utilizes its committees to oversee specific risks and receives regular reports from the committees on the areas of risk for which they have oversight. The Audit Committee has responsibility for oversight of risks associated with financial accounting and reporting, including the system of internal control. This oversight includes reviewing and discussing with management the company’s risk assessment process and management policies with respect to the company’s major financial risk exposures, including investments, and the procedures utilized by management to identify and mitigate the exposure to such risks. The Compensation Committee oversees the risks relating to compensation plans and programs, as well as management development and leadership succession in the company’s various business units. Our Nominating Committee is responsible for the oversight of risks relating to corporate governance. Our Legal and Public Affairs Committee oversees risks associated with litigation, legislative and regulatory changes and compliance policies and issues, as well as government relations and potential reputational risks. We believe that our risk oversight structure is also supported by our current Board leadership structure, with the Chairman of the Board and the Lead Director working together with our independent Audit Committee and our other standing committees.

Director Independence

Our Board currently consists of nine directors, eight of whom are independent (as defined by our Governance Principles and NYSE listing standards) and one of whom is our President and CEO. For a director to be independent, the Board must determine that the director does not have any direct or indirect material relationship with Genworth. The Board has established guidelines to assist it in determining director independence, which conform to, or are more exacting than, the independence requirements of the NYSE. The independence guidelines are set forth in Section 4 of our Governance Principles, which are available on our website. In addition to applying these guidelines, the Board will consider all relevant facts and circumstances in making an independence determination. The Board has determined that Mr. Alesio, Mr. Bolinder, Ms. Karch, Ms. Mead, Mr. Moloney, Mr. Parke, and Mr. Riepe satisfy the NYSE’s independence requirements and Genworth’s independence guidelines. In addition, the Board has determined that Dr. Lavizzo-Mourey, who is currently serving on the Board but is not standing for re-election at the Annual Meeting, also satisfies the NYSE’s independence guidelines and Genworth’s independence guidelines. The Board also previously determined that J. Robert “Bob” Kerrey, who resigned from our Board effective March 14, 2012, satisfied the NYSE’s independence requirements and Genworth’s independence guidelines.

In addition to the independence guidelines discussed above, members of the Audit Committee also must satisfy additional independence requirements established by the SEC and the NYSE. Specifically, they may not accept, directly or indirectly, any consulting, advisory or other compensatory fee from Genworth or any of its subsidiaries other than their directors’ compensation and they may not be affiliated with Genworth or any of its subsidiaries. The Board has determined that all the members of the Audit Committee satisfy the relevant SEC and NYSE independence requirements.

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Code of Business Conduct and Ethics

All of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, must act ethically at all times and in accordance with the policies comprising our code of business conduct and ethics set forth in our Code of Ethics. If an actual or potential conflict of interest arises for a director, the director shall promptly inform the CEO. Our Code of Ethics is published in the corporate governance section of our website. To view our Code of Ethics, go to www.genworth.com, click “Investors,” then click “Corporate Governance,” then click “Code of Business Conduct & Ethics” and finally click “Genworth Code of Ethics.” Section 11 of our Governance Principles, which are available on our website, more fully addresses our Code of Ethics. Under our Governance Principles, the Board will not permit any waiver of any ethics policy for any director or executive officer. Within the time period required by the SEC and the NYSE, we will post on our website any amendment to our Code of Ethics.

BOARD OF DIRECTORS AND COMMITTEES

Board Composition

Our Board of Directors is composed of individuals with diverse experience at policy-making levels in business, government, education and technology in areas that are relevant to the company’s global activities. Each director was nominated on the basis of the unique set of qualifications and skills he or she brings to the Board, as well as how those qualifications and skills blend with those of the others on the Board as a whole. See the Election of Directors section for a description of each director nominee’s qualifications and skills.

As a group, apart from Mr. Fraizer, our board nominees include two former chief executive officers (Mr. Alesio and Mr. Bolinder), three former chief financial officers (Ms. Mead, Mr. Moloney and Mr. Parke), three directors with a background in insurance (Mr. Bolinder, Ms. Mead and Mr. Moloney), three with experience in mergers and acquisitions (Ms. Mead, Mr. Moloney and Mr. Parke), four with risk experience (Mr. Bolinder, Ms. Mead, Mr. Moloney and Mr. Parke), three with consumer marketing experience (Mr. Alesio, Ms. Karch and Mr. Riepe) and two with distribution experience (Mr. Alesio and Ms. Karch). The blend of our directors’ unique backgrounds ensures that issues facing the company are examined and addressed with the benefit of a broad array of perspectives and expertise.

Subject to the rights of the holders of any outstanding series of our preferred stock, our certificate of incorporation provides that the number of authorized directors of our company will be fixed from time to time by a resolution adopted by our Board of Directors, but will not be less than one nor more than 15. Our Governance Principles further state that the size of the Board should be in the range of seven to 15 directors. As discussed above, our Board of Directors has set the size of the Board of Directors at eight members, effective at the Annual Meeting, but continues to evaluate the optimal size for the Board and will continue to consider the addition of one or more independent directors to the Board.

Each director elected by the holders of our common stock will serve until the next annual meeting of stockholders and until his or her successor is elected and qualified, or until the earlier of his or her death, resignation, disqualification or removal. The holders of common stock do not have cumulative voting rights in the election of directors.

Our Governance Principles provide that directors who serve as chief executive officers or in equivalent positions for other public companies should not serve on more than two other boards of public companies in addition to the Genworth Board and other directors should not serve on more than four other boards of public companies in addition to the Genworth Board.

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Board Committees

The four standing committees of the Board are the Audit Committee, the Compensation Committee, the Nominating Committee and the Legal and Public Affairs Committee. These committees are described below. The Board has established written charters for each of its four standing committees. Our Board of Directors may also establish various other committees to assist it in carrying out its responsibilities.

The table below shows the current Board committee memberships and the number of meetings each committee held in 2011.

* Mr. Fraizer, a non-independent director, does not serve on any standing committees of the Board.

+ Lead Director

C = Committee Chair

X = Committee Member

Audit Committee

The Audit Committee consists solely of “independent” directors as defined under the applicable rules of the NYSE and the SEC. In addition, the Board has determined that all four of the Audit Committee’s current members, Ms. Mead and Messrs. Moloney, Parke and Riepe, are “audit committee financial experts,” as defined by SEC rules.

As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.genworth.com, click “Investors,” then click “Corporate Governance,” then click “Audit Committee” and finally click “Charter”), the Audit Committee is concerned primarily with the accuracy and effectiveness of the audits of our financial statements. The Audit Committee’s duties include:

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The Audit Committee has determined that in view of the increased demands and responsibilities of the committee, its members generally should not serve on more than two additional audit committees of other public companies. The Audit Committee’s report appears on page 69 of this proxy statement.

Management Development and Compensation Committee

The Compensation Committee consists solely of “independent” directors under the applicable rules of the NYSE. As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.genworth.com, click “Investors,” then click “Corporate Governance,” then click “Management Development and Compensation Committee” and finally click “Charter”), the Compensation Committee’s responsibilities include:

Under its charter, the Compensation Committee has authority to delegate any of its responsibilities to subcommittees as the Compensation Committee may deem appropriate in its sole discretion. The Compensation Committee’s report appears on page 45 of this proxy statement. Additional information regarding the Compensation Committee’s processes and procedures for consideration of executive compensation is provided in the Compensation Discussion and Analysis section below.

Nominating and Corporate Governance Committee

The Nominating Committee consists solely of “independent” directors under the applicable rules of the NYSE. As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.genworth.com, click “Investors,” then click “Corporate Governance,” then click “Nominating and Corporate Governance Committee” and finally click “Charter”), the Nominating Committee’s responsibilities include:

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The Nominating Committee makes recommendations to our Board of Directors of candidates for election to our Board, and our Board of Directors nominates director candidates and makes recommendations to our stockholders. This committee will consider all stockholder recommendations for candidates for the Board, which should be sent to the Nominating and Corporate Governance Committee, c/o Leon E. Roday, Secretary, Genworth Financial, Inc., 6620 West Broad Street, Building #1, Richmond, Virginia 23230.

The Nominating Committee believes all director nominees should meet certain qualifications and possess certain qualities or skills that, when considered in light of the qualities and skills of the other director nominees, assist the Board in overseeing the company’s operations and developing and pursuing its strategic objectives. The Nominating Committee believes each director nominee should at a minimum:

The Nominating Committee, as a matter of practice, takes diversity factors into account when considering potential director nominees. The company does not have a formal policy on Board diversity. The qualifications, qualities and skills required for directors are further set forth in Section 3 of Genworth’s Governance Principles, which are available on our website.

In addition to considering candidates suggested by stockholders, the Nominating Committee considers potential candidates recommended by current directors, company officers, employees and others. We have also engaged an outside search firm to assist us in identifying and evaluating potential director candidates. The Nominating Committee considers all potential candidates regardless of the source of the recommendation and determines whether potential candidates meet our qualifications, qualities and skills for directors. Where there is an interest in a particular candidate, the Nominating Committee’s review is multi-faceted and typically includes a review of written materials regarding the candidate, due diligence performed internally and externally, a review of a completed candidate questionnaire and one or more interviews with members of the Nominating Committee.

Legal and Public Affairs Committee

The principal purpose of the Legal and Public Affairs Committee is to assist the Board in its oversight responsibilities relating to our practices and positions on corporate legal, regulatory and legislative issues, compliance and consumer policies and corporate citizenship initiatives that affect our stockholders, employees and customers. As more fully set forth in its charter, which can be found in the corporate governance section of our website (to view, go to www.genworth.com, click “Investors,” then click “Corporate Governance,” then click “Legal and Public Affairs Committee” and finally click “Charter”), the Legal and Public Affairs Committee’s responsibilities include:

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Meetings of Non-Management and Independent Directors

Our independent directors met without management present at each regularly scheduled Board meeting during 2011. Our Governance Principles provide that the non-management directors will meet without management present at each regularly scheduled Board meeting. Michael D. Fraizer, our President and CEO, is currently the only employee of the company who serves on our Board. In addition, our Governance Principles provide that if the non-management directors include individuals who are not independent directors (whose independence is determined in accordance with the NYSE listing standards and our Governance Principles), then the independent directors on our Board will separately meet at least one time each year without the presence of non-independent directors. The Board has determined that all of our current non-management directors are also independent directors. Our Governance Principles provide that the Lead Director, currently Mr. Riepe, will preside at the meetings of the non-management directors and the independent directors. The non-management and independent directors may meet without management present at such other times as determined by the Lead Director or at the request of the non-management or independent directors.

Compensation of Directors

The Nominating Committee has the responsibility for reviewing and recommending to the Board compensation and benefits for “non-management directors.” Non-management directors are those directors who are not executive officers of Genworth or its affiliates. Accordingly, all directors, other than Mr. Fraizer, are regarded as non-management directors. Mr. Fraizer does not receive any compensation for serving as a director.

The company’s compensation and benefits for non-management directors are as follows:

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Amounts payable to non-management directors are prorated for partial years of service.

Pursuant to its charter, the Nominating Committee conducts an annual review of non-management director compensation and benefits and recommends any changes to the Board of Directors for the Board’s consideration. As part of its 2011 review, the Nominating Committee engaged Steven Hall & Partners, LLC to provide competitive market data and advice regarding outside director compensation. Based on this review, the Nominating Committee did not recommend any changes to the company’s non-management director compensation and benefits program.

The following table sets forth information concerning compensation paid or accrued by us in 2011 to our non-management directors.

2011 Director Compensation Table

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Director Stock Ownership Policy

To help promote the alignment of the personal interests of the company’s directors with the interests of our stockholders, we have established a stock ownership policy for all non-management directors. Each non-management director is expected to hold at least $300,000 worth of Genworth common stock and/or DSUs while serving as a director of Genworth. This constitutes almost four times the portion of the annual retainer that is paid to a non-management director in cash (unless the director elects to receive DSUs rather than cash). Each non-management director has seven years from the date he or she becomes a non-management director to attain this ownership threshold. The DSUs held by the non-management directors settle in shares of common stock beginning one year after the director leaves the Board in a single payment or in payments over ten years, at the election of the director, or earlier upon the death of the director.

The following table shows the stock ownership as of March 21, 2012 of our non-management directors, the percentage of the ownership threshold that they have reached, and the portion of the seven-year period that has elapsed in which the non-management director must attain enough stock to satisfy his or her ownership guideline. The value of each non-management director’s stock ownership is based on the closing price of our common stock on March 21, 2012.

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INFORMATION RELATING TO DIRECTORS, DIRECTOR NOMINEES, EXECUTIVE OFFICERS AND SIGNIFICANT STOCKHOLDERS

Ownership of Genworth Common Stock

The following table sets forth information as of March 21, 2012, regarding the beneficial ownership of our common stock by:

Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated in the footnotes to the table, each of the directors and executive officers possesses sole voting and investment power with respect to all shares set forth opposite his or her name. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock issuable upon the exercise of stock options or stock appreciation rights (“SARs”) or upon the conversion of restricted stock units (“RSUs”) held by that person that are currently exercisable or convertible, or are exercisable or convertible within 60 days of March 21, 2012, are deemed to be issued and outstanding. These shares, however, are not deemed outstanding for purposes of computing percentage ownership of any other stockholder. As of March 21, 2012, there were 491,475,307 shares of common stock outstanding and no shares of any other class of voting securities outstanding.

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The address of each director and executive officer listed below is c/o Genworth Financial, Inc., 6620 West Broad Street, Richmond, Virginia 23230.

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Ownership of Genworth Canada Common Shares

In July 2009, Genworth MI Canada Inc. (“Genworth Canada”), our indirect subsidiary, completed the initial public offering of its common shares. Following completion of Genworth Canada’s initial public offering, we beneficially own 57.5% of the common shares of Genworth Canada. The following table sets forth information as of March 21, 2012, regarding the beneficial ownership of the common shares of Genworth Canada by:

Beneficial ownership is determined in accordance with the rules of the SEC. Directors and executive officers possess sole voting and investment power with respect to all shares set forth by their name. As of March 21, 2012, there were 98,666,796 common shares of Genworth Canada outstanding and no shares of any other class of voting securities outstanding.

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COMPENSATION DISCUSSION AND ANALYSIS

This section provides an overview and analysis of our compensation programs and policies, including the material compensation decisions made under the programs with respect to the following executive officers, whom we refer to as our “named executive officers” or “NEOs:”

Executive Summary

Key compensation decisions and developments in 2011 and 2012 are summarized below, followed by a discussion of the background and rationale for these actions. We also provide an analysis of our performance over the last several years and the alignment of executive compensation with such performance, with a particular focus on CEO compensation.

2011 Key Compensation Decisions and Developments

2012 Key Decisions and Developments

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2011 Performance Summary

For Genworth, 2011 was a year of repositioning actions targeted at strengthening the company’s balance sheet in anticipation of a continued uncertain environment, and developing a foundation for improved stockholder value. At business portfolio and product line levels, we took important steps to improve our focus around leadership positions, strengthen risk buffers and capital generation, and support future redeployment of capital. Actions completed or that we continue to pursue include the planned minority initial public offering (“IPO”) of our Australian mortgage insurance business, shifting new business mix and volumes, selling or exiting non-strategic lines and blocks of business, further streamlining our cost base, and adding to our holding company capital flexibility.¹

The company reported net operating income² of $214 million for 2011, or $0.44 per basic share, compared with a net operating income of $126 million, or $0.26 per basic share, in 2010. Although these results represent year-over-year improvement, we fell short of our goals for company net operating income, net operating earnings per basic share (“Net Operating EPS”)³ and operating return on equity (“ROE”)⁴ in 2011. The shortfall for 2011 was caused largely by the challenging U.S. housing and employment markets, which negatively impacted our U.S. Mortgage Insurance segment. We did make progress in repositioning our business portfolio for improved performance, continuing to strengthen our investment portfolio, and increasing risk buffers and financial flexibility. Our holding company ended 2011 with approximately $950 million of cash and liquid securities, which exceeded our buffer target of maintaining cash balances of at least two times our holding company’s annual debt service expense.

In our Insurance and Wealth Management Division, we delivered improved net operating income and ROE through our International Protection, Wealth Management and U.S. Life Insurance segments. We generally met our net operating income and ROE goals in our U.S. Life Insurance segment due to improved performance in life and long-term care insurance. We completed various product re-pricing actions to improve margins and adjust for the low interest rate environment, introduced a new generation of long-term care insurance products, expanded the use of reinsurance to manage capital, and generated $265 million in dividends to the holding company. We also made strategic decisions to exit the variable annuity lines, sold our Medicare supplement insurance business, and entered into an agreement to sell our tax and accounting advisor unit (expected to close in the first half of 2012).

In our Mortgage Insurance Division, prolonged depressed housing market and economic conditions resulted in losses in our U.S. Mortgage Insurance segment that exceeded forecasts and affected the overall financial results for the division and the company. We developed capital strategies that allowed for the prudent writing of

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new business and generation of new capital. Separately, we exceeded expectations with respect to loss mitigation savings and profitability of new insurance written after mid-2008. Financial results in our International Mortgage Insurance segment were below expectations, particularly due to increased loss levels in Australia and Ireland, along with higher interest expense and slowing origination markets. We ended the year with strong capital positions and generated dividends of $213 million to the holding company from that segment. We also announced our intention to pursue an IPO of up to 40% of our Australian mortgage insurance business, which will rebalance company exposure to housing risk, support future growth opportunities for that business by providing expanded access to the capital markets, and support capital deployment opportunities.

Impact of Performance on 2011 Compensation

We believe that, in the aggregate, our compensation program for our NEOs has yielded an appropriate pay-for-performance relationship for 2011 and over a longer time horizon. As described above, the company’s performance in 2011 was below targeted levels, and as a result annual cash incentive compensation in 2011 was below target for our named executive officers. Similarly, our mid- and long-term incentives, which are tied to company and stock price performance over a longer period, have yielded limited value based on the company’s failure to fully achieve those performance targets and our stock price performance. When considered together, our 2011 compensation programs demonstrate a strong pay-for-performance alignment between our named executive officers and stockholder interests.

We emphasize the importance of the Compensation Committee’s judgment of performance against financial and non-financial objectives in our annual incentive program, rather than a pure formula-based approach. This supports a more effective incentive and reward structure for executives during a time when substantial variables persist regarding external market volatility, shifting global regulatory and capital requirements, and strategic alternatives under review by the Board and management. As described in more detail below, for 2011, Mr. Fraizer was awarded an annual incentive at 33% of his target, which reflects a decrease over the prior year. This award was made considering his leadership to strategically reposition the company for improved stockholder value, manage risks in an uncertain environment, maintain sound international performance and support the transition of the U.S. life companies. This award was significantly below target given total company net operating income, net operating EPS and ROE performance was below expectations relative to goals established at the outset of 2011. The Compensation Committee also considered the company’s stock price performance in addition to strategic steps taken to rebuild mid- to long-term stockholder value. Other named executive officers were each awarded below target annual incentives, with the amount for each named executive officer differing based on the Compensation Committee’s judgment of financial and non-financial performance of each individual and the organizations they are responsible for relative to goals established at the outset of 2011.

Pursuant to our 2010-2011 mid-term incentive, we made payouts ranging from zero to 14.4% of target to our named executive officers. The 2010-2011 mid-term incentive, established in early 2010, was intended to reward performance across several independently weighted financial metrics, including total company goals and segment-specific goals. Performance in our U.S. Mortgage Insurance segment, as well as total company performance, was below threshold levels, thus earning no payouts for those weighted portions. Below-target payouts were earned by some named executive officers relating to above threshold levels of performance in our other operating segments. For more information, see the Mid-Term & Other Long-Term Incentives section below.

New mid- and long-term incentives awarded in 2011 were intended to align executive’s interests with future rebuilding of mid- to long-term stockholder value. Annual long-term equity grants made to named executive officers in February 2011 consisted solely of Capped SARs, which deliver value only to the extent company stock price increases from the grant date. Additionally, our 2011-2013 mid-term incentive, established in early 2011, will reward company achievement of effective annual ROE growth and improvement in the company’s book value multiple over that three-year performance period (see the Mid-Term & Other Long-Term Incentives section below). Together, these new grants in 2011 ensure significant alignment of named executive officers’ interests with rebuilding mid-to long-term stockholder value and stock price growth particularly.

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Evaluating Our Performance and Pay Relationship over Time

The results of our compensation programs over time also demonstrate a strong pay-for-performance relationship. The following information is intended to summarize those results over the past five years, and to illustrate such alignment with particular focus on CEO compensation. Our financial results for the past few years, particularly in terms of net operating income and stock price performance, have been disappointing, reflecting in large part underperformance of our U.S. Mortgage Insurance segment as well as impacts from the global financial crisis. Accordingly, our compensation programs have yielded the following results that demonstrate pay has been aligned with company performance below expectations:

Specifically with respect to CEO compensation, the CEO Incentive Pay For 2007-2011 Performance Years table below summarizes the five-year average annual compensation earned through our annual incentive and mid-term incentive programs over the five-year period from 2007 through 2011. The incentives paid below should be considered relative to company financial performance over that same period. The results of our compensation programs demonstrate a clear alignment of CEO pay with company performance over this time. As the company’s performance has not reached targeted levels during recent years, our compensation program has delivered annual and mid-term cash compensation that is below target levels. We did not include the grant-date fair value of SARs granted to Mr. Fraizer during this time period in the below table, as we consider those grants to be incentives for future company performance and long-term stock price appreciation. The SARs vest over a period of years and have a ten-year term, thus maintaining significant incentives for building long-term stockholder value.

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CEO Incentive Pay For 2007-2011 Performance Years

Consideration of Last Year’s Advisory Stockholder Vote on Executive Compensation

At the 2011 Annual Meeting of Stockholders on May 18, 2011 (the “2011 Annual Meeting”), over 94% of the shares voted were voted to approve the compensation of the company’s named executive officers, as discussed and disclosed in the 2011 proxy statement. The Board and the Compensation Committee appreciate and value the views of our stockholders. In considering the results of this advisory vote on executive compensation, the Compensation Committee concluded that the company’s overall pay practices and the compensation paid to our named executive officers relative to the company’s performance enjoy strong stockholder support.

In light of this support, the Compensation Committee has determined to retain its general approach to executive compensation and does not intend to make significant changes to our executive compensation program for 2012. Going forward, future advisory votes on executive compensation will serve as an additional tool to guide the Compensation Committee in evaluating the alignment of the company’s executive compensation program with the interests of the company and its stockholders.

Also at the 2011 Annual Meeting, our stockholders expressed a preference that advisory votes on executive compensation occur once every year. Consistent with this preference, the Board determined to implement an advisory vote on executive compensation every year until the next required vote on the frequency of stockholder advisory votes on the compensation of executive officers, which is scheduled to occur no later than the 2017 Annual Meeting of Stockholders.

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Governance and Principles Underlying Our Compensation Programs

Our objective in compensating executive officers is to attract, retain and motivate employees of superior ability who are dedicated to the long-term interests of our stockholders. With this objective in mind, the following principles guide our compensation program design and individual compensation decisions. Additionally, we have highlighted below key elements of our compensation program or policies that illustrate how we support these principles in practice:

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Our Annual Compensation Program

Our annual compensation program for executive officers consists of the following key elements: base salary, annual incentive, mid- to long-term incentives and annual long-term equity grants. Additionally, we provide certain other benefits to our executive officers to ensure competitive compensation and benefits consistent with the marketplace and our guiding principles. Below is a summary and assessment of actions taken with respect to our annual compensation program for 2011.

Base Salary

Base salaries are generally intended to reflect the scope of an executive officer’s responsibilities and level of experience, reward sustained performance over time and be market-competitive. The Compensation Committee approved, upon the recommendation of our CEO, limited base salary adjustments for 2011 for two of our named executive officers. Mr. Kelleher was awarded a base salary increase of 8% in recognition of his sustained performance and to ensure his compensation was at a competitive level relative to his new role as Executive Vice President and segment leader. Mr. Joelson was awarded an increase of 7% in recognition of his sustained individual performance and in order to maintain market competitive levels of compensation for his role as our Chief Investment Officer. The base salaries for Mr. Fraizer (in effect since 2005), Mr. Roday and Mr. Schneider remained unchanged in 2011.

In connection with hiring Mr. Klein to serve as the company’s new CFO, we established a starting annual base salary of $550,000. We believe this amount represents a market competitive rate for his experience and for this position at companies of similar size within our industry.

Annual Incentive

Our 2011 annual incentives were paid based on the Compensation Committee’s judgment of performance against key financial and non-financial objectives for the year. Each named executive officer has an annual incentive target established at the beginning of the year, expressed as a percentage of base salary (individual target values are reported in the 2011 Grants of Plan-Based Awards Table below). Target annual incentive opportunities for the named executive officers typically range from 100% to 200% of base salary.

Performance against the financial and non-financial objectives summarized below is the primary factor considered by the Compensation Committee when awarding annual incentives to our named executive officers. Actual performance against any particular objective noted below, however, did not result in any pre-determined or formulaic payouts. Instead, the Compensation Committee subjectively and qualitatively reviewed performance results against the applicable financial and non-financial objectives in determining the actual payouts of the annual incentives. We believe this flexible approach to annual incentives effectively supports our compensation principles by motivating executive officers with clear performance objectives at the outset of the year, while preserving the Compensation Committee’s discretion to exercise their judgment to reward actions viewed as being in the best long-term interests of stockholders.

Key financial objectives used to evaluate 2011 performance and results are summarized below. Net operating income and ROE represent key top-level measures of financial performance for the year. Additionally, we placed an emphasis on meeting targeted statutory capital ratios and generating dividends to the holding company from our operating segments. Our insurance subsidiaries both in the U.S. and internationally are subject to various statutory capital requirements, which are important to our ability to write new insurance, to grow our businesses and to pay dividends to the holding company. These statutory capital requirements, often expressed as ratios and percentages (as shown in the table below), are also important to the financial strength ratings of our insurance subsidiaries and the holding company. Other non-financial operating or strategic objectives considered when determining 2011 annual incentive awards to each of our named executive officers are described further below.

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The table below summarizes the key financial targets for the company and our operating segments established by the Compensation Committee for 2011, and performance against those targets, used as the basis for judging financial performance for the NEOs in 2011:

Upon considering that total company financial performance was below targeted levels for 2011, all named executive officers received a below-target annual incentive award. With respect to individual named executive officer annual incentive awards, below is a summary of other key factors taken into consideration when determining individual payouts. The CEO provided the Compensation Committee with a performance assessment for each of the named executive officers and made recommendations for 2011 annual incentives (excluding himself). The Compensation Committee reviews those recommendations with the CEO, and determines the final awards. Likewise, the Compensation Committee evaluated the performance of the CEO for 2011 and, with input from the Board and the Compensation Committee’s independent compensation consultant, determined his annual incentive award for 2011. Amounts paid for 2011 are reported under the “Non-Equity Incentive Plan” column of the 2011 Summary Compensation Table.

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For Mr. Fraizer, his annual incentive award was based on several factors, including the financial metrics summarized above, development and execution of business strategies, management of the organization, risk management, and overall leadership. Financial performance for 2011 was disappointing and generally below the targets set for net operating income and ROE, especially in the U.S. Mortgage Insurance segment.

Good progress was made on increasing liquidity at the holding company level and strengthening the balance sheet. Certain non-core assets were identified for disposition and several transactions were completed. During 2011, the company also created two primary operating divisions – the Insurance and Wealth Management Division and the Mortgage Insurance Division – in order to better align our businesses. In order to add to our financing flexibility and rebalance exposure to housing risks, planning for a minority IPO of our Australian mortgage insurance business was initiated and then publicly announced. Mr. Fraizer also led further development of capital management strategies and economic capital assessments for the various businesses.

Through the course of the year, as part of the ongoing review of the company’s business portfolio, various strategic business options available to the company were developed, analyzed and reviewed with the Board, with consideration of the implications to the company, stockholders, bondholders, and customers. Some options were eliminated and others refined when considering capital implications, feasibility of execution, regulatory interests, rating agency views, levels of risk, and competitive positioning. Through this work, which resulted in some of the strategic actions noted above, progress was made toward repositioning the company in ways intended to increase stockholder value.

Together with other members of senior management, Mr. Fraizer also drove expanded engagement with the company’s investors, rating agencies and regulators in order to strengthen communications and support the strategic initiatives noted above. Substantial progress was also made toward further strengthening of our enterprise risk management analyses and processes.

In total, Mr. Fraizer’s accomplishments relative to the company’s performance and his financial and non-financial objectives resulted in an annual incentive award of 33% of his targeted amount for 2011, which reflects a decrease in amount versus his 2010 annual incentive award.

For Mr. Klein, who joined the company in April 2011 and began serving as our CFO in May 2011, the greatest weight for his annual incentive award was given to his leadership and contributions as CFO for that portion of the year. Positive consideration was also given to his leadership of the finance, actuarial and investor relations functions of the organization, and accomplishments of certain strategic and operational objectives, including:

In total, Mr. Klein’s leadership and accomplishments during his tenure as CFO resulted in an annual incentive award of 86% of his targeted amount for 2011.

For Mr. Kelleher, who served as our CFO until May 2011, and led our Retirement and Protection segment for all of 2011, significant weight was given to total company financial performance, which was below target for the year, in addition to financial performance of our Retirement and Protection segment, which achieved target

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performance for 2011, as noted above. Additionally, the Compensation Committee considered Mr. Kelleher’s role in achieving certain operational and strategic successes as the segment leader for Retirement and Protection in 2011, which included:

These results and accomplishments resulted in an annual incentive award to Mr. Kelleher of 74% of his targeted amount for 2011.

For Mr. Joelson, his annual incentive award reflects his leadership of our investments organization. Overall, the greatest weight was given to our 2011 investment performance, which was generally at or above expectations, including net investment income. Additional key factors considered by the Compensation Committee in determining Mr. Joelson’s annual incentive included the following accomplishments:

With these considerations, the Compensation Committee approved an annual incentive award to Mr. Joelson of 87% of his targeted amount for 2011.

For Mr. Roday, his annual incentive award reflects his leadership of the legal, compliance and government relations functions in the company. As a member of the corporate leadership team, some weight was given to the annual financial performance of the whole company, which was below target. Additional key factors evaluated in determining his annual incentive included the following accomplishments:

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Additionally, the company’s compliance and board governance efforts remained strong. With these factors under consideration, Mr. Roday was awarded an annual incentive of approximately 72% of his target for 2011.

For Mr. Schneider, his annual incentive award reflects his leadership of our U.S. Mortgage Insurance segment through a very challenging market environment. As noted above, loss mitigation results in that segment exceeded the stated target by 26%, while the net operating loss in that segment was significantly below target for 2011. The net operating loss was driven largely by continuing stresses in the U.S. housing market, unemployment levels and growing levels of foreclosures, which also resulted in increases in reserves affecting operating results. On a comparative basis, we have experienced lower primary delinquency rates and lower net losses than our mortgage insurance competitors through the current U.S. residential real estate cycle. Other key factors taken into consideration in determining Mr. Schneider’s annual incentive award were:

With these considerations, the Compensation Committee approved an annual incentive award to Mr. Schneider of 70% of his targeted amount for 2011.

Annual Long-Term Equity Grants

We believe that the largest component of our compensation program should be in the form of longer-term incentives, including annual equity grants of SARs, RSUs, or a combination thereof in February of each year. Since 2009, our named executive officers have only been awarded annual equity grants in the form of SARs due to the company’s low stock price relative to the book value per share of the company. Additionally, our annual equity grants to Mr. Fraizer since 2006 have been 100% SARs, reflecting his unique role as CEO and the need for his long-term alignment with stock price appreciation. We believe that SARs, which are settled in shares of common stock and deliver no value unless the company’s stock price increases following the grant, provide the purest form of long-term stockholder alignment for our executive officers.

Beginning with our 2011 annual equity grant, we used Capped SARs, which include a limit on the maximum value per share upon exercise in order to achieve expense savings through a reduced grant date fair value. The Capped SAR awards made in 2011 have a maximum share value of $75.00, which allows us to realize significant expense savings without materially diminishing the incentive and reward for long-term stock price appreciation. If the maximum stock price is reached, then any portion of the Capped SARs that is vested will automatically be exercised and settled in stock, and any unvested portion of the award will remain unvested until such date that it was originally scheduled to vest. If the stock price remains above the maximum share value at such time, then the previously unvested portion of the award will automatically be exercised on the scheduled vesting date.

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Individual named executive officer grants in 2011 reflected share amounts consistent with grant levels in prior years, adjusted slightly for each individual based on the Compensation Committee’s discretionary evaluation of each named executive officer’s performance, competitive pay levels, retention needs and ability of the named executive officer to influence stock price appreciation. The grants of Capped SARs and RSUs to Mr. Klein in 2011 were awarded in connection with his offer of employment, and were intended to provide market competitive compensation as well as long-term alignment with stockholders through an initial equity grant. Consideration was also given to certain compensation that Mr. Klein forfeited from his former employer.

Awards of Capped SARs to our named executive officers in 2011 (and RSUs awarded to Mr. Klein) vest 25% per year, beginning on the first anniversary of the grant date. The awards are generally forfeited upon termination of employment with the company prior to vesting, except for limited instances described in the Potential Payments Upon Termination or Change of Control section below. Shares acquired by executive officers through the exercise of SARs or the vesting of RSUs, are subject to a retention ratio until his or her stock ownership guidelines are met, and shares acquired through the exercise of stock options or SARs are subject to the company’s 9-month net hold policy (see the Stock Ownership Guidelines and Net Hold Policy section below).

Mid-Term & Other Long-Term Incentives

The company has historically provided a mid-term incentive award to its executive officers to reward performance over a multi-year performance cycle. Prior to 2010, we established mid-term incentives measuring discrete three-year performance periods. Beginning in 2010, we transitioned the mid-term incentive program to utilize smaller annual grants with rolling three-year performance cycles. In order to facilitate that transition from discrete to rolling measurement periods, the Compensation Committee approved a two-year (2010-2011) incentive for that initial period only, in addition to a three-year (2010-2012) incentive. Each executive officer at the time had a target award opportunity established at the time of the grant, with individual targets under the new rolling three-year performance cycles being approximately one-third of targeted levels under the pre-2010 approach.

The 2010-2011 mid-term incentive performance period has closed, and earned awards were paid to participants in February 2012 and are reported in the “Non-Equity Incentive Plan Compensation” column of the 2011 Summary Compensation Table. Goals for the 2010-2011 mid-term plan were established in early 2010 with the intent of rewarding 2-year progress toward 3-year financial operating plan objectives for the company and our operating segments. Each metric was independently weighted such that performance below threshold for all metrics would result in no payouts, and payout above threshold for one or more metrics could then result in a partial payout. Performance above maximum goals for all metrics would results in payout at 200% of targeted amounts (150% of target in the case of the CEO).

The approach to the 2010-2011 mid-term incentive was intended to provide a meaningful multi-year performance incentive at a time when broader economic challenges arising from the global financial crisis in 2008 created many uncertainties and challenges. We did this through use of multiple, independently weighted metrics, such that a single variance would not overly impact performance, as well as providing differentiated weighting of metrics by participant based on their role and organizational responsibilities at the time of the award. Notwithstanding the level of achievement, the Compensation Committee reserved the right to exercise negative discretion to pay out a lesser amount, and to determine whether to pay any earned award in cash or shares of company stock at the end of each performance period. Awards of the 2010-2011 mid-term incentive to the named executive officers as noted below, were paid in cash.

The 2010-2011 Mid-Term Performance Metrics & Results table below summarizes the goals, weights assigned, results and weighted performance factors by organizational category that generated the rewards to the named executive officers, which are described in the 2010-2011 Mid-Term Performance Weight Assigned and Earned Payout by NEO table further below.

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2010-2011 Mid-Term Performance Metrics & Results