June 11, 2007 -- In the tradition-bound world of insurance companies, every risk is carefully calculated. There's endless talk of liability, premiums and actuarial tables.
But at the headquarters of one insurance giant, in the quiet town of Columbus, Ga., something speaks, or quacks, more loudly: It's Aflac!
Thanks to the famously feathered Aflac pitchman, that white duck who shouts out the company's now familiar name, 90 percent of Americans recognize the name Aflac.The man responsible for hatching that duck is Dan Amos, who has been Aflac's CEO for 17 years.
For Amos, deciding to use the duck was not an easy call, but rather a calculated risk.
"It was definitely a risk, a big risk," he said, "because you were making fun of your name."
'There's Going to Be This Duck …'
Seven years ago a new ad agency came up with something entirely different from the older Aflac ads. After viewing the duck, focus groups loved it, but Amos' fellow CEO friends told him not to roll the dice.
"I tried to explain it to people. … I said, 'There's going to be this duck on a park bench and it quacks 'AF-LAC.' People give you the dumbest look you've ever seen," he said. "I said no more, I'm going to run it. If it doesn't work, we're going to pull it and move on."
The ad was an instant megahit and the bird has redefined the company — and Amos' wardrobe. These days he wears only duck ties.
"Everybody started giving me duck ties," he said, pointing to his tie. "Like this is a Japanese one -- you can see how traditional it is."
"Some of our agents actually put [a stuffed duck] in the front seat of their car and ride around with it," said Amos, who also collects pop culture references to the duck.
"When Ben Affleck was so popular … every time he got mentioned, the Aflac duck got mentioned. So what's [the] difference between the two? The duck has webbed feet, Affleck has a Web page."
Fan mail also came pouring in, including one letter from, the first President Bush, requesting a duck for his dog Millie.
"I send him ducks all the time now," Amos said.
Quacking All the Way to the Bank
There are even duck rules that Amos and the company abide by.
"I do not eat duck," he said. "Never pate -- never, never, never. I'm not kidding. We don't serve it at meals, at the banquets, nothing."
The duck is also big in Japan, where Aflac does two-thirds of its business -- a business that is booming.
Since 1990, Aflac's total return to shareholders is almost 3,000 percent, compared with a 598 percent rise in the Dow Jones industrial average.
Stock Soars, Investors Cash In
An $11,000 investment in the Aflac stock in 1955 is worth $100 million today.
"One grandchild's already goin' to college on it," said Monell Cole, an early investor, "and another one starting this fall. And they'll be using it to go to school on."
Last year Aflac brought in $1.5 billion in profits. Perhaps that's one reason the Aflac CEO is so comfortable gambling on something else: his own pay.
After one of his shareholders approached him in November about inflated CEO salaries, Amos decided to become the first and only chief executive in America to give shareholders a say in how much he's paid every year.
"I think the majority of the shareholders will look at the performance of the company, look at the pay and how it was done, and on what basis, and I think they'll be happy with it," Amos said.
Say for Pay
The move comes as national outrage over skyrocketing executive pay erupts, with unhappy shareholders calling CEOs "chicken" for denying investors a say in what executives are paid.
Dawn Wolfe represents an investor group that's asked more than 20 companies to consider these so-called "Say for Pay" proposals.
"We're not talking about micromanaging dollar amounts here, where we're going to set a level or a cap or say a CEO should be paid X amount," said Wolfe, a social research and advocacy analyst at Boston Common Asset Management. "It's just a way for us to voice whether or not we believe the package is reasonable and supportable."
Last year Amos was paid $14.1 million, and he insists that letting shareholders voice their opinions on that paycheck isn't a gamble at all.
"I'm not a politician -- I don't know all this stuff. I just know that in our case, as I look at it, if we perform well, I'll do well. And if we don't, I won't. And that's fair," he said.
"What I say about this particular issue is very simple," Amos said. "You should just listen to your shareholders. … I realized it was a movement that they wanted, and it made sense and so we did it."
Risk and Reward
While Amos has done well, he's also done well by Aflac. Since he became CEO, the company's stock price has risen almost 3,000 percent.
There is one difference between Amos and other successful CEOs who haven't followed his lead: Amos weighed the decision using an insurance man's well-developed theory about risk.
"When I went to college I majored in risk management insurance, and there were three principles: Don't risk a lot for a little, don't risk more than you can afford to lose, and consider the odds," he said. "I take risk, but I always use those three principles."
Amos also believes it's better to be respected than feared by shareholders and employees alike.
"My family always said, 'If you treat the employees well, they'll take care of the company and then everything else will work out,'" he said. "That's pretty much the way we've done it."
There is one other calculated risk in the equation — one Amos is prepared to live with. "The duck is underpaid," he said.