| | | | | 1 | | | |
| | | | | 4 | | | |
| | | | | 4 | | | |
| | | | | 4 | | | |
| | | | | 6 | | | |
| | | | | 7 | | | |
| | | | | 10 | | | |
| | | | | 10 | | | |
| | | | | 10 | | | |
| | | | | 10 | | | |
| | | | | 11 | | | |
| | | | | 12 | | | |
| | | | | 12 | | | |
| | | | | 12 | | | |
| | | | | 12 | | | |
| | | | | 13 | | | |
| | | | | 13 | | | |
| | | | | 13 | | | |
| | | | | 13 | | | |
| | | | | 15 | | | |
| | | | | 15 | | | |
| | | | | 15 | | | |
| | | | | 17 | | | |
| | | | | 17 | | | |
| | | | | 18 | | | |
| | | | | 19 | | | |
| Proposal 2. Non-Binding Vote on Executive Compensation | | | |
|
| | |
| | | | | 21 | | | |
| | | | | 21 | | | |
| | | | | 21 | | | |
| | | |
|
| | ||
| | | | | 26 | | | |
| | | |
|
| | ||
| | | | | 27 | | | |
| | | | | 28 | | | |
| | | | | 31 | | | |
| | | | | 33 | | | |
| | | | | 34 | | |
| | | | | 35 | | | |
| | | | | 35 | | | |
| | | | | 37 | | | |
| | | | | 37 | | | |
| | | | | 37 | | | |
| | | | | 37 | | | |
| | | | | 37 | | | |
| | | | | 38 | | | |
| | | | | 38 | | | |
| | | | | 38 | | | |
| | | | | 39 | | | |
| | | | | 40 | | | |
| | | | | 40 | | | |
| | | | | 41 | | | |
| | | | | 42 | | | |
| | | | | 43 | | | |
| | | | | 46 | | | |
| | | | | 46 | | | |
| | | | | 46 | | | |
| | | | | 47 | | | |
| | | | | 47 | | | |
| | | | | 48 | | | |
| | | | | 49 | | | |
| | | | | 49 | | | |
| | | | | 49 | | | |
| | | | | 53 | | | |
| | | | | 54 | | | |
| | | | | 54 | | | |
| | | | | 54 | | | |
| | | | | 56 | | | |
| | | | | 57 | | | |
| Proposal 3. Appointment of Independent Auditors | | | |
|
| | |
| | | | | 59 | | | |
| | | | | 59 | | | |
| | | | | 59 | | | |
|
Shareholder Proposals for 2020 Annual Meeting |
| | |
|
| | |
| | | | | 61 | | | |
| | | |
|
| |
|
AXIS Capital Holdings Limited
2019 Annual General Meeting |
| |
Thursday, May 2, 2019
8:30 a.m. local time
AXIS House 92 Pitts Bay Road Pembroke HM 08 Bermuda Directions to the 2019 Annual General Meeting may be obtained by contacting our Corporate Secretary at: +1.441.496.2600.
|
|
|
Definition
|
| |
When used in this proxy statement, the terms “we,” “us,” “our,” “the Company,” “AXIS” and “AXIS Capital” refer to AXIS Capital Holdings Limited.
|
|
|
Agenda
|
| |
1.
The election of the four nominees for Class III Directors as identified in this proxy statement.
|
|
| | | |
2.
The approval, by non-binding vote, of the compensation paid to our named executive officers.
|
|
| | | |
3.
To appoint Deloitte Ltd. (“Deloitte”) to act as our independent registered public accounting firm for the fiscal year ending December 31, 2019 and the authorization of our Board, acting through the Audit Committee, to set the fees for the independent registered public accounting firm.
|
|
| | | |
4.
Such other business as may properly come before the meeting or any postponements or adjournments thereof.
|
|
|
Proxies Solicited By
|
| |
The Board of Directors of AXIS Capital Holdings Limited. The Company will bear the cost of soliciting proxies for the Annual General Meeting.
|
|
|
First Mailing Date
|
| | We anticipate mailing the proxy statement on March 28, 2019. | |
|
Record Date
|
| |
March 8, 2019. On the record date, there were 83,933,462 outstanding common shares entitled to vote at the meeting.
|
|
|
Voting
|
| |
Except as set forth in our bye-laws, each common share entitles the holder of record to one vote. In accordance with our bye-laws, shareholders whose shares constitute 9.5% or more of the voting power of our common shares are entitled to less than one vote for each common share held by them, but only in the event that a U.S. shareholder, as defined in our bye-laws, owning 9.5% or more of our common shares is first determined to exist. We will notify any shareholder whose voting power is reduced prior to the meeting.
|
|
|
Majority Vote Standard
|
| |
Two or more persons present in person and representing in person or by proxy shares representing more than fifty percent (50%) of the aggregate voting power of the Company constitutes a quorum. Abstentions and “broker non-votes” will be counted for purposes of determining a quorum. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not have discretionary voting power for a proposal and has not received instructions from the beneficial owner. Under current New York Stock Exchange (“NYSE”) rules, the proposal to appoint Deloitte as our independent registered public accounting firm is considered a “discretionary” item. Therefore, there will be no “broker non-votes” on the approval of the appointment of Deloitte.
The affirmative vote of a majority of the votes cast by the holders of shares represented in person or by proxy at the Annual General Meeting is required for: (i) the election of directors; (ii) the non-binding determination of the compensation paid to our named executive officers; and (iii) the appointment of Deloitte.
|
|
PROXY STATEMENT SUMMARY 1 |
| | | |
In determining whether: (i) a director nominee has been elected by the shareholders; (ii) the compensation paid to our named executive officers has been approved; and (iii) the appointment of Deloitte has been approved, abstentions and “broker non-votes” (if applicable) will have no effect on the outcome of any of these proposals because such shares are not considered votes cast.
We will count common shares held by shareholders who have signed their proxy cards or properly submitted their proxy by phone or over the Internet but have not specified how their shares are to be voted towards the presence of a quorum, and we will vote those shares in accordance with the Board’s recommendations for each of the proposals contained in this proxy statement.
|
|
|
Proxies
|
| |
We will vote signed returned proxies “FOR” (i) the election of each of the four nominees for Class III director; (ii) the approval, by non-binding vote, of the compensation paid to our named executive officers; and (iii) the appointment of Deloitte, unless you vote differently on the proxy card.
|
|
|
Revoking Your Proxy
|
| |
Any shareholder giving a proxy has the power to revoke it prior to its exercise by sending notice of revocation to our Secretary in writing, by executing and delivering a subsequent proxy card or by voting in person at the meeting. To revoke a proxy previously submitted over the Internet or by telephone, you may simply vote again at a later date, using the same procedures, in which case your later submitted vote will be recorded and your earlier vote revoked. You may also vote in person at the Annual General Meeting.
|
|
|
2018 Company Financial Performance
|
| |
2018 net income available to common shareholders was $0.4 million and operating return on average common equity (“OROACE”)1 was 3.7%, as compared to ($416 million) and (5.4%), respectively, in 2017. Ex-PGAAP operating return on average common equity (“ex-PGAAP OROACE”)2 for the years ending 2018 and 2017 was 4.7% and (5.1%), respectively.
Diluted book value per common share (“DBVPS”) rose at an annual compounded rate of 8.3% from 2002 through 2018 and diluted book value per common share, adjusted for accumulated dividends declared, increased at a 10.1% annual compounded rate for the same period. DBVPS as of December 31, 2018 was $49.93 compared to DBVPS as of December 31, 2017 of $53.88, a decrease of $3.95. The decrease over the past twelve months was driven by unrealized investment losses reported in other comprehensive income and common share dividends declared.
The quarterly dividend was increased by 3% in December 2018 to $0.40 per share, representing the fifteenth consecutive annual dividend increase since we declared our first dividend following our initial public offering.
|
|
|
Executive Compensation Program
|
| |
Key Features
•
OROACE and growth in DBVPS adjusted for dividends were the Company financial metrics used for evaluating cash bonus awards and equity awards, respectively. Total Shareholder Return will be the Company’s financial metric for evaluating performance of performance vesting equity awards granted in 2019;
|
|
2 PROXY STATEMENT SUMMARY |
| | | |
•
The Annual Incentive Plan incorporates a business unit financial metric further enhancing the correlation between executive pay and performance;
•
Equity targets are based on target dollar amount, not a fixed number of shares or units, allowing for closer targeting of market pay levels;
•
Equity grants for our named executive officers (“NEOs”) and other senior executives are split evenly between performance-vesting and time-vesting awards;
•
Stock ownership guidelines apply to the Company’s senior officers and directors, in order to encourage a long-term focus in managing the Company;
•
Employment agreements for our NEOs do not have excise tax gross-up provisions and limit perquisites;
•
Executive compensation recoupment, or “clawback”, policy allows the Compensation Committee to recoup compensation paid to our NEOs under certain circumstances;
•
Insider trading policy prohibits all employees and directors from hedging the economic risk of owning AXIS stock or pledging AXIS stock for loans or other obligations;
•
Equity award agreements have “double-trigger” provisions, which provide for accelerated vesting of awards due to a change of control only if either AXIS terminates the executive’s employment without cause or the executive terminates his or her employment for good reason within two years following a change of control; and
•
Equity awards for staff (excluding NEOs and senior executives) are generally settled 50% in cash at vesting in order to reduce the overall number of equity awards utilized, or burn rate, under our equity plan.
|
|
|
Corporate Governance Highlights
|
| |
Corporate Governance continues to be an area of significant focus for our Board. In order to ensure that our corporate governance framework enables our Board to oversee the operation and strategic direction of our Company and carry out its responsibilities to shareholders, we regularly engage with our shareholders as well as governance organizations. In 2018, management reached out to and offered to speak with our major shareholders representing over 50% of shares outstanding to obtain their view on our executive compensation and corporate governance practices. These interactions help us to review our corporate governance principles and practices to ensure that they are appropriate in light of emerging practices and reflect our strong commitment to good corporate governance. Our current practices include the following, many of which are discussed in further detail throughout this proxy statement:
•
Majority vote standard for election of directors
•
No stockholder rights plan (“poison pill”)
•
Independent lead director
•
No “over-boarding.” None of our directors serve on the board of directors of more than three other publicly-held corporations
•
Shareholders holding 10% or more of our outstanding stock have the right to call a special meeting
•
Shareholder engagement
•
Majority independent Board and fully independent Audit, Compensation and Corporate Governance and Nominating Committees
•
Regular Board and Committee self-evaluation process
|
|
PROXY STATEMENT SUMMARY 3 |
4 PROPOSAL 1. ELECTION OF DIRECTORS |
| |
DIRECTORS
|
| | | Albert Benchimol |
| | Michael Butt |
| | Charles Davis |
| | Robert Friedman |
| | Christopher Greetham |
| | Elanor Hardwick |
| | Maurice Keane |
| | Thomas Ramey |
| | Henry Smith |
| | Barbara Yastine |
| | Wilhelm Zeller |
| | Lizabeth Zlatkus |
| |
| | EXPERIENTIAL CRITERIA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Public Company Experience | | | |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| | | | |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
| | Digital Experience | | | | | | | | | | | | | | | | | | |
✓
|
| | | | | | | | | | |
✓
|
| | | | | | | |
| | Insurance Experience | | | |
✓
|
| |
✓
|
| |
✓
|
| | | | |
✓
|
| | | | | | | |
✓
|
| | | | |
✓
|
| |
✓
|
| |
✓
|
| |
| | Reinsurance Experience | | | |
✓
|
| |
✓
|
| |
✓
|
| | | | |
✓
|
| | | | | | | | | | | | | | | | |
✓
|
| | | | |
| | Finance Experience | | | |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
| | International Experience | | | |
✓
|
| |
✓
|
| |
✓
|
| | | | |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| |
✓
|
| | | | |
✓
|
| |
✓
|
| |
| | Banking Experience | | | |
✓
|
| | | | |
✓
|
| | | | |
✓
|
| | | | |
✓
|
| | | | |
✓
|
| |
✓
|
| | | | | | | |
| | Legal/Regulatory Experience | | | | | | | | | | | | |
✓
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | COMPOSITION | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Other Current Public Boards | | | |
0
|
| |
0
|
| |
2
|
| |
1
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
0
|
| |
3
|
| |
1
|
| |
2
|
| |
| | Age | | | |
61
|
| |
76
|
| |
70
|
| |
76
|
| |
74
|
| |
46
|
| |
77
|
| |
75
|
| |
70
|
| |
59
|
| |
74
|
| |
60
|
| |
| | Tenure (Years) | | | |
7
|
| |
16
|
| |
16
|
| |
16
|
| |
12
|
| |
0.3
|
| |
16
|
| |
9
|
| |
14
|
| |
0.6
|
| |
9
|
| |
0
|
| |
| | Gender | | | |
M
|
| |
M
|
| |
M
|
| |
M
|
| |
M
|
| |
F
|
| |
M
|
| |
M
|
| |
M
|
| |
F
|
| |
M
|
| |
F
|
| |
PROPOSAL 1. ELECTION OF DIRECTORS 5 |
|
Name
|
| |
Age
|
| |
Class
|
| |
Position
|
|
| Albert A. Benchimol | | |
61
|
| |
III
|
| |
Chief Executive Officer and President
|
|
| Christopher V. Greetham | | |
74
|
| |
III
|
| |
Independent Director
|
|
| Maurice A. Keane | | |
77
|
| |
III
|
| |
Independent Director
|
|
| Henry B. Smith | | |
70
|
| |
III
|
| |
Independent Director
|
|
| Albert A. Benchimol | | |
Albert A. Benchimol was appointed President and Chief Executive Officer of AXIS Capital Holdings Limited in May 2012 and has served as a director since January 2012. Mr. Benchimol joined the Company as Executive Vice President and Chief Financial Officer in January 2011. He formerly served as Executive Vice President and Chief Financial Officer of PartnerRe Ltd. from April 2000 through September 2010, and Chief Executive Officer of PartnerRe Ltd.’s Capital Markets Group business unit from June 2007 through September 2010. Prior to joining PartnerRe, Mr. Benchimol was Senior Vice President and Treasurer at Reliance Group Holdings, Inc. for 11 years and was previously with the Bank of Montreal from 1982 to 1989. In January 2019, Mr. Benchimol assumed the role as Chair of the Association of Bermuda Insurers and Reinsurers after serving as Vice-Chair from 2017 through 2018, and in February 2019, he was appointed as an External Member of the Council of Lloyd’s.
|
|
| Christopher V. Greetham | | |
Christopher V. Greetham has served as a director since October 2006. From 1996 to 2006, he served as Chief Investment Officer of XL Capital Ltd. From 1982 to 1996, Mr. Greetham was Chief Financial Officer of OIL Insurance Ltd. and President of OIL Investment Corporation Ltd. Between 1975 and 1982, Mr. Greetham served as an investment analyst and a portfolio manager at Bankers Trust Company.
|
|
| Maurice A. Keane | | |
Maurice A. Keane has served as a director since September 2002. Mr. Keane formerly was the Group Chief Executive Officer of the Bank of Ireland, a position he held from 1998 until 2002. He was Deputy Group Chief Executive Officer from 1991 through 1997, having been a Managing Director since 1983. He was a member of the National Pension Reserve Fund Commission from February 2007 until December 2014. He served as a director of Irish Bank Resolution Corporation Limited (formerly Anglo Irish Bank Corporation Limited) from the time of its nationalization in January 2009 until February 2013.
|
|
| Henry B. Smith | | |
Henry B. Smith has served as a director since May 2004. Mr. Smith served as the Chief Executive Officer and President of W.P. Stewart & Co., Ltd. from May 2005 to March 2006. Mr. Smith is the former Chief Executive Officer of the Bank of Bermuda Limited, a position he held from March 1997 until March 2004. He joined the Bank of Bermuda in 1973 as a management trainee and held various senior positions within the Bank of Bermuda, including Executive Vice President and Chief Operations Officer, Executive Vice President, Europe and Senior Vice President and General Manager, Retail Banking.
|
|
6 PROPOSAL 1. ELECTION OF DIRECTORS |
|
Name
|
| |
Age
|
| |
Class
|
| |
Position
|
|
| Michael A. Butt | | |
76
|
| |
I
|
| |
Chairman of the Board
|
|
| Charles A. Davis | | |
70
|
| |
I
|
| |
Independent Director
|
|
| Robert L. Friedman | | |
76
|
| |
II
|
| |
Independent Director
|
|
| Elanor R. Hardwick | | |
46
|
| |
I
|
| |
Independent Director
|
|
| Thomas C. Ramey | | |
75
|
| |
II
|
| |
Independent Director
|
|
| Barbara A. Yastine | | |
59
|
| |
I
|
| |
Independent Director
|
|
| Wilhelm Zeller | | |
74
|
| |
II
|
| |
Independent Director
|
|
| Lizabeth H. Zlatkus | | |
60
|
| |
II
|
| |
Independent Director
|
|
| Michael A. Butt | | |
Michael A. Butt has served as Chairman of the Board or a director since September 2002. Mr. Butt has over 50 years of insurance industry experience. From 1982 to 1986, Mr. Butt was the Chairman of Sedgwick Limited and Vice Chairman of the Sedgwick Group plc. From 1987 to 1992, Mr. Butt served as Chairman and Chief Executive Officer of Eagle Star Holdings plc and Eagle Star Insurance Company. From 1993 to 1998, Mr. Butt was Chief Executive Officer and President of Mid Ocean Limited. From 1998 to August 2002, Mr. Butt was a director of XL Capital Ltd. Mr. Butt also is a former director of the Farmers Insurance Group, BAT Industries and Instituto Nazionale delle Assicuranzioni. Mr. Butt also was the Chairman of the Association of Bermuda Insurers and Reinsurers from January 2008 through December 2009. In 2011, Mr. Butt was appointed as an Officer of the Order of the British Empire to commemorate his distinguished contributions toward the building of the Bermuda reinsurance industry and in 2019 was named by the International Insurance Society as its 2019 Insurance Hall of Fame Laureate.
|
|
| Charles A. Davis | | |
Charles A. Davis has served as a director since our inception. Since June 2005, Mr. Davis has been a member and the Chief Executive Officer of Stone Point Capital LLC (“Stone Point”). From 1998 until May 2005, he was with MMC Capital, Inc., a subsidiary of Marsh & McLennan Companies, Inc., serving as the Chief Executive Officer from 1999 to 2005 and Chairman from 2002 to 2005. He also served as a Vice Chairman of Marsh & McLennan Companies, Inc. from 1999 to November 2004. Prior to joining MMC Capital in 1998, Mr. Davis spent 23 years at Goldman, Sachs & Co., where, among other positions, he served as head of Investment Banking Services worldwide, head of the Financial Services Industry Group, a General Partner, a Senior Director and a Limited Partner. Mr. Davis is also a director of The Hershey Company and The Progressive Corporation.
|
|
| Robert L. Friedman | | |
Robert L. Friedman has served as a director since our inception. Since July 2012, Mr. Friedman has been a Senior Advisor of The Blackstone Group L.P. (“Blackstone”). From February 1999 to June 2012, he was a Senior Managing Director of that firm, and from January 2003 to August 2010 he was also its Chief Legal Officer. Prior to joining Blackstone, Mr. Friedman was a partner at Simpson Thacher & Bartlett LLP for 25 years, where he served as a senior member of that law firm’s mergers and acquisitions practice. Mr. Friedman is Chairman of the Board of Harrington Reinsurance Holdings Limited and serves as a director of YRC Worldwide Inc.
|
|
PROPOSAL 1. ELECTION OF DIRECTORS 7 |
| Elanor R. Hardwick | | |
Elanor R. Hardwick has served as a director since November 2018. Ms. Hardwick serves as Chief Digital Officer of UBS, leading the bank’s innovation and digitization activities across all business lines and functions globally. From 2016 to 2018, Ms. Hardwick served as Head of Innovation of Deutsche Bank, leading innovation across business lines and functions globally and supporting the company’s digital strategy development. Previously, she was Chief Executive Officer of Credit Benchmark Ltd., a FinTech start-up and provider of credit risk data, leading the company from its foundation in 2012. Prior to that, Ms. Hardwick held a succession of senior leadership positions at Thomson Reuters, including Global Head of Strategy, Investment and Advisory; Global Head of Professional Publishing; and Head of Strategy for Europe and Asia. Ms. Hardwick has also worked at Morgan Stanley International, Booz-Allen & Hamilton and the United Kingdom’s Department of Trade and Industry. She earned an M.B.A. from Harvard Business School and an M.A. from the University of Cambridge.
|
|
| Thomas C. Ramey | | |
Thomas C. Ramey was elected as a director in July 2009. Mr. Ramey was Chairman and President of Liberty International, a wholly owned subsidiary of Liberty Mutual Group, from 1997 to 2009. He also served as Executive Vice President of Liberty Mutual Group from 1995 through 2009. Prior to joining Liberty, he was President and Chief Executive Officer of American International Healthcare, a subsidiary of AIG, and founder and President of an international healthcare trading company. He is currently a trustee of the Brookings Institution. Mr. Ramey was formerly a Director of The Warranty Group, the International Insurance Society, the Coalition of Services Industries and Chairman of the International Fund for Animal Welfare. He was also formerly a member of the Chongqing, China Mayor’s International Advisory Council.
|
|
| Barbara A. Yastine | | |
Barbara A. Yastine has served as a director since July 2018. Ms. Yastine previously served as Chair, President and Chief Executive Officer of Ally Bank from March 2012 to September 2015, and as Chief Administrative Officer of Ally Financial, overseeing the risk, compliance, legal and technology areas, and Chair of Ally Bank, from May 2010 to March 2012. Prior to joining Ally Financial, she served as a Principal of Southgate Alternative Investments, a start-up diversified alternative asset manager, beginning in June 2007. She served as Chief Financial Officer for investment bank Credit Suisse First Boston from October 2002 to August 2004. From 1987 through 2002, Ms. Yastine worked at Citigroup and its predecessor companies. From September 2015 to June 2016, Ms. Yastine served as a director and Co-Chief Executive Officer of Lebenthal Holdings, LLC. In November 2017, Lebenthal and certain of its subsidiaries filed voluntary petitions for bankruptcy under Chapter 7 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Ms. Yastine currently serves as a member of the Board of Directors of First Data Corporation, Primerica Inc. and Zions Bancorporation. She received a BA in Journalism and an MBA from New York University.
|
|
| Wilhelm Zeller | | |
Wilhelm Zeller was elected as a director in July 2009. From 1996 to June 2009, Mr. Zeller served as the Chairman of the Executive Board of Hannover Re. Prior to joining Hannover Re, he was a member of the Executive Board of Cologne Re from 1977 through 1995. In 1995, he was also a member of the Executive Council of General Re Corporation, the new principal shareholder of Cologne Re. From 1970 through 1977, Mr. Zeller served as the head of the Casualty Department and International Department Non-Life at Zurich Insurance Company. A NACD board leadership fellow, he currently is a corporate director and consultant, serving as a director of EIS Group Ltd. and Willis Towers Watson.
|
|
| Lizabeth H. Zlatkus | | |
Lizabeth H. Zlatkus was appointed as a director in March 2019. Until her retirement from The Hartford Financial Services Group, Ms. Zlatkus held many senior leadership positions during her tenure from 1983 to 2011 including Chief
|
|
8 PROPOSAL 1. ELECTION OF DIRECTORS |
| | | |
Financial Officer and Chief Risk Officer of the firm and Co-President of Hartford Life Insurance Companies. She also served as Executive Vice President of two of The Hartford’s largest divisions, the international operations and the group life and disability divisions. Ms. Zlatkus currently serves as a director on the boards of Indivior PLC and Boston Private Financial Holdings, Inc. and sits on the Pennsylvania State University Business School Board, where she also served as Chair from 2012 to 2015, and is a member of The Connecticut Science Center Trustee Board, serving on its executive committee since 2012. Additionally, Ms. Zlatkus was formerly a director of Legal & General Group, Plc and Computer Sciences Corporation. She also previously served as Regulatory Chair for the North American Chief Risk Officers Council, as a member on the Hewlett Packard Financial Services Board of Advisors, as a member of the LOMA Board of Directors and as Trustee of the Connecticut Women’s Hall of Fame.
|
|
PROPOSAL 1. ELECTION OF DIRECTORS 9 |
10 CORPORATE GOVERNANCE |
|
Name
|
| |
Audit
|
| |
Compensation
|
| |
Corporate
Governance and Nominating |
| |
Finance
|
| |
Risk
|
| |
Executive
|
| |
Independent
Director |
| | | | | | | | | | ||||||||||||||||||
| Albert A. Benchimol | | | | | | | | | | | | | | |
Member
|
| |
Member
|
| | | | | | | | | | | | | ||||||||||||||||||
| Michael A. Butt | | | | | | | | | | | | | | | | | |
Member
|
| | | | | | | | | | | | | ||||||||||||||||||
| Charles A. Davis | | | | | | | | | | | |
Chair
|
| |
Member
|
| |
Member
|
| |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Robert L. Friedman | | | | | | | | | | | |
Member
|
| |
Member
|
| | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Christopher V. Greetham | | |
Member
|
| |
Member
|
| | | | |
Member
|
| |
Chair
|
| | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Elanor R. Hardwick | | |
Member
|
| | | | | | | | | | |
Member
|
| | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Maurice A. Keane | | |
Member
|
| |
Member
|
| |
Chair
|
| | | | | | | | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Thomas C. Ramey | | |
Chair
|
| |
Member
|
| |
Member
|
| | | | | | | | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Henry B. Smith | | |
Member
|
| |
Chair
|
| |
Member
|
| | | | | | | |
Chair
|
| |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Barbara A. Yastine | | |
Member
|
| | | | |
Member
|
| | | | |
Member
|
| | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Wilhelm Zeller | | | | | | | | | | | |
Member
|
| |
Member
|
| | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| Lizabeth H. Zlatkus | | |
Member
|
| | | | | | | |
Member
|
| | | | | | | |
✓
|
| | | | | | | | | | ||||||||||||||||||
| 2018 Meetings | | |
13
|
| |
6
|
| |
4
|
| |
4
|
| |
4
|
| |
0
|
| | | | | | | | | | | | | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CORPORATE GOVERNANCE 11 |
12 CORPORATE GOVERNANCE |
CORPORATE GOVERNANCE 13 |
14 CORPORATE GOVERNANCE |
CORPORATE GOVERNANCE 15 |
16 CORPORATE GOVERNANCE |
|
Directors and Executive Officers
|
| |
Number of
Common Shares(1) |
| |
Percent of
Outstanding Common Shares(1) |
| ||||||
| Albert A. Benchimol | | | | | 305,470 | | | | | | * | | |
| Michael A. Butt | | | | | 979,507 | | | | | | 1.2% | | |
| Charles A. Davis | | | | | 38,314 | | | | | | * | | |
| Robert L. Friedman | | | | | 63,314 | | | | | | * | | |
| Christopher V. Greetham | | | | | 26,797 | | | | | | * | | |
| Elanor R. Hardwick | | | | | 2,570 | | | | | | * | | |
| Maurice A. Keane | | | | | 105,496 | | | | | | * | | |
| Thomas C. Ramey | | | | | 14,124 | | | | | | * | | |
| Henry B. Smith | | | | | 52,453 | | | | | | * | | |
| Barbara A. Yastine | | | | | 2,755 | | | | | | * | | |
| Wilhelm Zeller | | | | | 17,250 | | | | | | * | | |
| Lizabeth H. Zlatkus | | | | | 1,561 | | | | | | * | | |
| Steve K. Arora | | | | | 10,883 | | | | | | * | | |
| David S. Phillips | | | | | 26,922 | | | | | | * | | |
| Peter J. Vogt | | | | | 13,662 | | | | | | * | | |
| Peter W. Wilson | | | | | 35,305 | | | | | | * | | |
| All directors and executive officers as a group (16 persons) | | | | | 1,696,383 | | | | | | 2.0% | | |
| Other Shareholders | | | | | | | | | | | | | |
| The Vanguard Group(2) | | | | | 7,422,036 | | | | | | 8.9% | | |
| Pzena Investment Management, LLC(3) | | | | | 6,816,149 | | | | | | 8.2% | | |
| Vulcan Value Partners, LLC(4) | | | | | 6,302,253 | | | | | | 7.5% | | |
| T. Rowe Price Associates, Inc.(5) | | | | | 5,427,973 | | | | | | 6.4% | | |
PRINCIPAL SHAREHOLDERS 17 |
18 PRINCIPAL SHAREHOLDERS |
|
Name
|
| |
Age
|
| |
Position
|
|
| Albert A. Benchimol(1) | | |
61
|
| | Chief Executive Officer, President and Director | |
| Steve K. Arora | | |
42
|
| | Chief Executive Officer, AXIS Reinsurance | |
| David S. Phillips | | |
50
|
| | Chief Investment Officer | |
| Peter J. Vogt | | |
55
|
| | Chief Financial Officer | |
| Peter W. Wilson | | |
59
|
| | Chief Executive Officer, AXIS Insurance | |
| Steve K. Arora | | |
Steve Arora joined AXIS in January 2018 as CEO of its reinsurance business. Mr. Arora came to AXIS from Swiss Re where he spent 18 years in a variety of senior positions, most recently as Head of Casualty Reinsurance and as a member of the Reinsurance Executive Committee. He has held positions in New York, Munich, London, Tokyo and Zurich, and his expertise crosses Finance, Risk Management, Underwriting, and General Management. In his most recent role at Swiss Re, Mr. Arora led a 250 person organization that spanned the Company’s global network of offices. Previously he served as President and Managing Director of Swiss Re Japan, where he had oversight of the Company’s entire Japanese platform. Mr. Arora held multiple positions at GE Insurance Solutions prior to its acquisition by Swiss Re.
|
|
| David S. Phillips | | |
David Phillips joined AXIS as Chief Investment Officer in April 2014. With more than 20 years of experience in investments, Mr. Phillips previously served as Head of Investments for PartnerRe where he had management and asset allocation responsibilities for public fixed income, public equities, private equities, and alternative fixed income. Prior to PartnerRe, he was the Director of Research and a Portfolio Manager at Oppenheimer Capital, an institutional money manager based in New York City. Mr. Phillips, CFA, received an MBA from the Wharton School of the University of Pennsylvania and an AB from Princeton University.
|
|
| Peter J. Vogt | | |
Peter Vogt was appointed Chief Financial Officer of AXIS Capital in January 2018. He previously served as the Company’s Deputy CFO from July 1, 2017 until his appointment as CFO in January 2018 and was also Chief Operating Officer of AXIS Insurance from 2013 to June 2017. Mr. Vogt joined AXIS in 2010 as CFO and COO of the Company’s Accident & Health business unit. Prior to AXIS, Mr. Vogt served as CFO of Penn Mutual Life Insurance Company. He also held the CFO role at CIGNA’s Group Insurance business. Mr. Vogt started his career at Hartford Life Insurance Company where, over nearly 14 years, he held a series of actuarial roles and eventually led sales, marketing and product development for its corporate retirement business. Mr. Vogt holds a BBA in Actuarial Science from Temple University and is a Fellow of the Society of Actuaries and a Member of the American Academy of Actuaries.
|
|
| Peter W. Wilson | | |
Peter W. Wilson was appointed Chief Executive Officer of AXIS Insurance in April 2014. He joined AXIS in May 2013 as President of U.S. Insurance. Prior to joining the Company, Mr. Wilson served as President and Chief Operating Officer for CNA Specialty, a unit of CNA Financial Corporation, which is focused on professional and management liability, healthcare, surety and other specialized insurance products and services. During his more than 20-year tenure with CNA Financial Corporation, Mr. Wilson served in a number of leadership positions and had management responsibility for a diverse group of business units operating both in the U.S. and internationally. Prior to CNA, he served as an Executive Vice President at AIG, where he managed AIG’s commercial public D&O business in the U.S.
|
|
EXECUTIVE OFFICERS 19 |
20 PROPOSAL 2. NON-BINDING VOTE ON EXECUTIVE COMPENSATION |
|
Name
|
| |
Title
|
|
| Albert A. Benchimol | | | Chief Executive Officer and President | |
| Steve K. Arora(1) | | | Chief Executive Officer, AXIS Reinsurance | |
| David S. Phillips | | | Chief Investment Officer | |
| Peter J. Vogt(2) | | | Chief Financial Officer | |
| Peter W. Wilson | | | Chief Executive Officer, AXIS Insurance | |
|
Name
|
| |
Page
|
|
| Executive Summary | | | | |
| Executive Compensation Philosophy and Key Features | | | | |
| Elements of Executive Compensation | | | | |
| Compensation Committee Process | | | | |
| Other Compensation Topics | | | |
COMPENSATION DISCUSSION AND ANALYSIS 21 |
22 COMPENSATION DISCUSSION AND ANALYSIS |
|
Compensation Program Changes
|
| |
Rationale
|
|
| Change performance metric for PSUs to relative TSR. | | |
•
The use of relative TSR as the performance metric for the PSUs is designed to align payouts with shareholder value creation.
•
TSR is an objective, transparent measure that is aligned with shareholders.
•
Since a significant portion of our NEOs’ compensation is provided in the form of equity, TSR has a strong impact on the compensation realized by executives over time.
|
|
| Revise performance scale for PSUs. | | |
•
Maintain executives’ alignment to our long-term goals.
•
The prior PSU design impacts several cycles of awards in the event of a single year or quarter of catastrophic events, eliminating their retentive power.
•
The new leverage plan lowers the volatility of PSU payouts as the Company changes its focus to a less-volatile business.
|
|
| Expand Performance Peer Group for assessing performance of PSUs. | | |
•
The expanded Performance Peer Group:
—
Addresses the reduced number of comparable peers due to merger and acquisition activity.
—
Provides a statistically-robust sample to avoid potential relative payout anomalies that could occur with a smaller sample size.
•
Better represents AXIS’ global footprint by adding relevant international peers.
|
|
| Eliminate three-year performance look back used to determine the grant pool size for time vesting RSUs. | | |
•
Ensure that executives’ interests are aligned with the interests of our shareholders through the ownership of stock.
•
The removal of the look back simplifies the program and is consistent with market practice.
—
The removal of the look back eliminates the possibility that new NEOs are awarded stock based on retrospective performance goals.
|
|
24 COMPENSATION DISCUSSION AND ANALYSIS |
|
Say On Pay History
|
| ||||||
|
2016
|
| |
2017
|
| |
2018
|
|
|
97.35%
|
| |
97.29%
|
| |
90.68%
|
|
|
What We Do |
| |
✓
Set robust goals, ensuring adequate stretch goals within our risk framework
|
|
|
✓
Link performance metrics to strategy to support shareholder value
|
| |||
|
✓
Retain downward discretion of incentive awards by our Compensation Committee
|
| |||
|
✓
Provide appropriate mix of fixed and variable pay to reward Company, business unit and individual performance
|
| |||
|
✓
Split equity awards between performance-vesting and time-vesting awards over 3- and
4-year periods
|
| |||
|
✓
Maintain stock ownership guidelines
|
| |||
|
✓
Maintain a Clawback Policy
|
| |||
|
✓
Retain an independent compensation consultant
|
| |||
|
✓
Engage in regular shareholder outreach
|
| |||
| | | | ||
|
What We Don’t Do |
| |
✓
No hedging or pledging of AXIS stock
|
|
|
✓
No individual executive retirement plans
|
| |||
|
✓
No excessive executive perquisites
|
| |||
|
✓
No excise tax gross-ups upon change of control or termination
|
| |||
|
✓
No single-trigger vesting of equity-based awards upon change in control
|
|
COMPENSATION DISCUSSION AND ANALYSIS 25 |
| | | |
Used In:
|
| | | | |||
|
Metric
|
| |
Annual
Incentive Awards |
| |
Long-Term
Incentive Awards |
| |
Why Metric is Important to AXIS and Our Strategy
|
|
| OROACE | | |
X
|
| | | | |
•
Our goal is to achieve top quintile OROACE to deliver value creation for shareholders; therefore, we have aligned our annual incentive program to this financial metric.
•
This metric reflects the rate of return the Company is earning on its capital and surplus.
•
Generally, the higher the return, the better the Company is making use of the funds invested by its shareholders, assuming risk is measured and managed appropriately.
|
|
| Relative DBVPS Growth | | | | | |
X
|
| |
•
P&C (re)insurance is a balance sheet business where book value and future business prospects (as measured by book value growth) imply business valuation. Higher and more consistent book value per share growth over time is an indication of effective and prudent use of capital and is shown to deliver value over time.
•
Our goal is to achieve top quintile value creation with industry average volatility reflecting effective and prudent use of capital. Growth in diluted book value per share is a good measure of how we are tracking relative to this goal.
•
Comparison to relevant peers ensures payouts are achieved only when AXIS outperforms similarly-situated companies.
|
|
| Relative Total Shareholder Return (“TSR”) | | | | | |
X
|
| |
•
Relative TSR measures shareholder value creation compared to a group of similarly-situated companies.
•
TSR explicitly links the senior executives’ incentive compensation to shareholder value.
•
Successful execution against long-term financial and strategic plans should drive an increase in TSR over the long-term.
•
Directly correlates to key performance metrics, for example, DBVPS and earnings growth.
|
|
26 COMPENSATION DISCUSSION AND ANALYSIS |
| | | |
Element
|
| |
Link to Shareholder Value
|
|
| Fixed | | | Base Salary | | |
•
Attract and retain talented executives
•
Compensate executives for level of responsibility and experience
|
|
| Performance-Based | | |
Annual Incentive Awards
|
| |
•
Incentive targets are tied to achievement of key annual financial and non-financial measures
•
NEOs are evaluated against established strategic initiatives important to driving profitable growth
•
Promote accountability
|
|
| Performance-Based | | |
Long-Term Incentive Awards
|
| |
•
Foster a culture of ownership, aligning the long-term interests of our NEOs with those of our shareholders
•
Promote accountability and strategic long-term decision making
•
Retain key executives
|
|
COMPENSATION DISCUSSION AND ANALYSIS 27 |
|
Name
|
| |
2018 Bonus Target
|
| |||
| Albert A. Benchimol | | | | | 175% | | |
| Steve K. Arora | | | | | 125% | | |
| David S. Phillips | | | | | 125% | | |
| Peter J. Vogt | | | | | 100% | | |
| Peter W. Wilson | | | | | 125% | | |
|
Metric
|
| |
Company Financial
Metric (OROACE) Weighting |
| |
Business
Unit Financial Metric Weighting |
| |
Non-Financial
Weighting |
| |||||||||
| CEO | | | | | 70% | | | | | | N/A | | | | | | 30% | | |
| Business Unit Leaders | | | | | 35% | | | | | | 35% | | | | | | 30% | | |
| Corporate Function Leaders | | | | | 60% | | | | | | N/A | | | | | | 40% | | |
| |
Annual Incentive Plan Goal Ranges (1)
|
| | ||||||||||||||
| | | | | |
OROACE
Achievement |
| | |
Multiplier
|
| | ||||||
| | Maximum | | | | | | 14% | | | | | | | 200% | | | |
| | Target | | | | | | 9% | | | | | | | 100% | | | |
| | Threshold | | | | | | 4% | | | | | | | 50% | | | |
28 COMPENSATION DISCUSSION AND ANALYSIS |
|
2018 Metric
|
| |
Payout Factor
|
| |
x Weighting
|
| |
= Adjusted
Weighting |
| |
X Target
Bonus |
| |
= Bonus
Payout |
| |||||||||||||||
|
OROACE
|
| | | | 57% | | | | | | 70% | | | | | | 39.9% | | | | | $ | 1,925,000 | | | | | $ | 768,075 | | |
| Non-Financial | | | | | 150% | | | | | | 30% | | | | | | 45.0% | | | | | $ | 866,250 | | | ||||||
| TOTAL | | | | | | | | | | | | | | | | | 84.9% | | | | | $ | 1,634,325 | | | ||||||
| ADJUSTED TOTAL | | | | | | | | | | | | | | | | | 69.9% | | | | | $ | 1,345,575 | | |
|
2018 Metric
|
| |
Payout Factor
|
| |
x Weighting
|
| |
= Adjusted
Weighting |
| |
X Target
Bonus |
| |
= Bonus
Payout |
| |||||||||||||||
|
OROACE
|
| | | | 100% | | | | | | 35% | | | | | | 35.0% | | | | | $ | 1,125,000 | | | | | $ | 393,750 | | |
| Business Unit Financial | | | | | 100% | | | | | | 35% | | | | | | 35.0% | | | | | $ | 393,750 | | | ||||||
| Non-Financial | | | | | 100% | | | | | | 30% | | | | | | 30.0% | | | | | $ | 337,500 | | | ||||||
| TOTAL | | | | | | | | | | | | | | | | | 100.0% | | | | |
$
|
1,125,000
|
| |
COMPENSATION DISCUSSION AND ANALYSIS 29 |
|
2018 Metric
|
| |
Payout Factor
|
| |
x Weighting
|
| |
= Adjusted
Weighting |
| |
X Target
Bonus |
| |
= Bonus
Payout |
| |||||||||||||||
|
OROACE
|
| | | | 57% | | | | | | 35% | | | | | | 20.0% | | | | | $ | 718,750 | | | | | $ | 143,391 | | |
| Business Unit Financial | | | | | 130% | | | | | | 35% | | | | | | 45.5% | | | | | $ | 327,031 | | | ||||||
| Non-Financial | | | | | 135% | | | | | | 30% | | | | | | 40.5% | | | | | $ | 291,094 | | | ||||||
| TOTAL | | | | | | | | | | | | | | | | | 106.0% | | | | |
$
|
761,516
|
| |
|
2018 Metric
|
| |
Payout Factor
|
| |
x Weighting
|
| |
= Adjusted
Weighting |
| |
X Target
Bonus |
| |
= Bonus
Payout |
| |||||||||||||||
|
OROACE
|
| | | | 57% | | | | | | 60% | | | | | | 34.2% | | | | | $ | 550,000 | | | | | $ | 188,100 | | |
| Non-Financial | | | | | 160% | | | | | | 40% | | | | | | 64.0% | | | | | $ | 352,000 | | | ||||||
| TOTAL | | | | | | | | | | | | | | | | | 98.2% | | | | |
$
|
540,100
|
| |
30 COMPENSATION DISCUSSION AND ANALYSIS |
|
2018 Metric
|
| |
Payout Factor
|
| |
x Weighting
|
| |
= Adjusted
Weighting |
| |
X Target
Bonus |
| |
= Bonus
Payout |
| |||||||||||||||
|
OROACE
|
| | | | 57% | | | | | | 35% | | | | | | 20.0% | | | | | $ | 1,125,000 | | | | | $ | 224,438 | | |
| Business Unit Financial | | | | | 15% | | | | | | 35% | | | | | | 5.3% | | | | | $ | 59,063 | | | ||||||
| Non-Financial | | | | | 160% | | | | | | 30% | | | | | | 48.0% | | | | | $ | 540,000 | | | ||||||
| TOTAL | | | | | | | | | | | | | | | | | 73.2% | | | | | $ | 823,500 | | | ||||||
| ADJUSTED TOTAL | | | | | | | | | | | | | | | | | 65.3% | | | | | $ | 735,000 | | |
|
50% RSUs
|
| |
50% PSUs
|
|
|
•
Vests 25% per year over four years
•
The number of RSUs granted is based on three- year look-back for relative DBVPS
|
| |
•
Vests in a single installment on the third anniversary of the grant date
•
The number of PSUs that ultimately vest is based on three-year relative DBVPS
•
Peer group is established at time of grant with performance measured after three years
|
|
COMPENSATION DISCUSSION AND ANALYSIS 31 |
| | | | | |
2018 PSU and RSU Awards
(Relating to 2017 Performance) |
| | ||||||||||||||||||||||||
| |
Name
|
| | |
RSUs
($) |
| | |
PSUs
($) |
| | |
RSUs in Lieu
of bonus ($) |
| | |
Total ($)(1)
|
| | ||||||||||||
| | Albert A. Benchimol | | | | | | 2,124,955 | | | | | | | 2,499,990 | | | | | | | - | | | | | | | 4,624,945 | | | |
| | Steve K. Arora(2) | | | | | | 3,412,982 | | | | | | | - | | | | | | | - | | | | | | | 3,412,982 | | | |
| | David S. Phillips(3) | | | | | | 305,954 | | | | | | | 359,977 | | | | | | | 586,484 | | | | | | | 1,252,415 | | | |
| | Peter J. Vogt(3) | | | | | | 299,989 | | | | | | | 299,989 | | | | | | | 213,258 | | | | | | | 813,236 | | | |
| | Peter W. Wilson(3) | | | | | | 382,466 | | | | | | | 449,984 | | | | | | | 494,962 | | | | | | | 1,327,412 | | | |
| | | |
DBVPS Percentile
|
| |
Multiplier
|
| ||||||
| Maximum | | | | | 75% | | | | | | 125% | | |
| Target | | | | | 50% | | | | | | 100% | | |
| Threshold | | | | | 25% | | | | | | 75% | | |
| | | |
DBVPS Percentile
|
| |
Multiplier
|
| ||||||
| Maximum | | | | | 85% | | | | | | 200% | | |
| Target | | | | | 55% | | | | | | 100% | | |
| Threshold | | |
Less than 25%
|
| | | | 0% | | |
32 COMPENSATION DISCUSSION AND ANALYSIS |
| | | | | |
PSUs Granted in 2016 Performance Period
(September 2015 – September 2018) |
| | ||||||||||
| |
Name
|
| | |
Number of Target PSUs
Granted |
| | |
Equity Incentive Plan
Awards: # of PSUs Based on Performance |
| | ||||||
| | Albert A. Benchimol | | | | | | 46,468 | | | | | | | 37,174 | | | |
| | Steve K. Arora(1) | | | | | | N/A | | | | | | | N/A | | | |
| | David S. Phillips | | | | | | 6,691 | | | | | | | 5,353 | | | |
| | Peter J. Vogt(1) | | | | | | N/A | | | | | | | N/A | | | |
| | Peter W. Wilson | | | | | | 8,364 | | | | | | | 6,691 | | | |
| | | | | |
2019 Equity Awards
(Relating to 2018 Performance) |
| | | | | | | | | ||||||||||
| |
Name
|
| | |
RSUs
($) |
| | |
PSUs
($) |
| | |
Total
($) |
| | |||||||||
| | Albert A. Benchimol | | | | | | 3,375,000 | | | | | | | 3,375,000 | | | | | | | 6,750,000 | | | |
| | Steve K. Arora | | | | | | 700,000 | | | | | | | 700,000 | | | | | | | 1,400,000 | | | |
| | David S. Phillips | | | | | | 360,000 | | | | | | | 360,000 | | | | | | | 720,000 | | | |
| | Peter J. Vogt | | | | | | 475,000 | | | | | | | 475,000 | | | | | | | 950,000 | | | |
| | Peter W. Wilson | | | | | | 500,000 | | | | | | | 500,000 | | | | | | | 1,000,000 | | | |
COMPENSATION DISCUSSION AND ANALYSIS 33 |
34 COMPENSATION DISCUSSION AND ANALYSIS |
COMPENSATION DISCUSSION AND ANALYSIS 35 |
|
Peer Groups(1)
|
| |||
|
2018 Compensation Benchmarking Peer Companies(2)
•
Alleghany Corporation
•
Arch Capital Group Ltd.
•
Argo Group International Holdings, Ltd.
•
Aspen Insurance Holdings Limited
•
Everest Re Group, Ltd.
•
Markel Corporation
•
Renaissance Re Holdings Ltd.
•
W.R. Berkley Corporation
|
| |
Performance Peer Companies (In effect for 2019)
•
Alleghany Corporation
•
American Financial Group, Inc.
•
American International Group, Inc.
•
Arch Capital Group
•
Argo Group International Holdings, Ltd.
•
Chubb Limited
•
Cincinnati Financial Corporation
•
CNA Financial Corporation
•
Everest Re Group, Ltd.
•
Fairfax Holdings Limited
•
Hannover Ruck SE
•
The Hanover Insurance Group, Inc.
•
The Hartford Financial Services Group, Inc.
•
James River Group Holdings Ltd.
•
Kinsale Capital Group
•
Lancashire Holdings Limited
•
Markel Corporation
•
Munich RE
•
Old Republic International Corporation
•
ProAssurance Corporation
•
QBE
•
RenaissanceRe Holdings Ltd.
•
RLI Corp
•
RSA Insurance Group plc
•
SCOR SE
•
Selective Insurance Group
•
Swiss Re LTD
•
The Traveler’s Companies, Inc.
•
United Fire Group, Inc.
•
W.R. Berkley Corp
•
Zurich Re
|
|
|
Selection Criteria
|
| |||
|
•
Size-appropriate global (re)insurance companies
•
Underwrite similar lines of business with similar geographic breadth
•
Representative of the competitive marketplace for talent
•
Strong capitalization as indicated by A.M. Best rating
|
| |
•
Global (re)insurance companies with similar geographic breadth
•
Relevant public P&C insurers and reinsurers
•
Relevant international company with similar P&C underwriting operations
•
Representative of the marketplace for investment capital
|
|
36 COMPENSATION DISCUSSION AND ANALYSIS |
COMPENSATION DISCUSSION AND ANALYSIS 37 |
38 COMPENSATION DISCUSSION AND ANALYSIS |
COMPENSATION COMMITTEE REPORT 39 |
| Name and Principal Position |
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Stock
Awards ($)(1)(2) |
| |
Non-Equity
Incentive Plan Compensation ($) |
| |
All
Other Compensation ($)(3) |
| |
Total
($) |
| |||||||||||||||||||||
|
Albert A. Benchimol
CEO, President and Director |
| | | | 2018 | | | | | | 1,100,000 | | | | | | - | | | | | | 4,624,945 | | | | | | 1,345,575 | | | | | | 734,276 | | | | | | 7,804,796 | | |
| | | 2017 | | | | | | 1,100,000 | | | | | | - | | | | | | 5,374,920 | | | | | | - | | | | | | 767,547 | | | | | | 7,242,467 | | | |||
| | | 2016 | | | | | | 1,100,000 | | | | | | - | | | | | | 4,999,957 | | | | | | 1,950,025 | | | | | | 672,177 | | | | | | 8,722,159 | | | |||
| Steve K. Arora CEO, AXIS Reinsurance |
| | | | 2018 | | | | | | 900,000 | | | | | | 1,125,000 (4) | | | | | | 3,412,982(5) | | | | | | - | | | | | | 485,105 | | | | | | 5,923,087 | | |
| David S. Phillips Chief Investment Officer |
| | | | 2018 | | | | | | 575,000 | | | | | | - | | | | | | 1,252,415 | | | | | | 761,516 | | | | | | 63,700 | | | | | | 2,652,631 | | |
| Peter J. Vogt Chief Financial Officer |
| | | | 2018 | | | | | | 550,000 | | | | | | - | | | | | | 813,236 | | | | | | 540,100 | | | | | | 66,375 | | | | | | 1,969,711 | | |
|
Peter W. Wilson
CEO, AXIS Insurance |
| | | | 2018 | | | | | | 900,000 | | | | | | - | | | | | | 1,327,412 | | | | | | 735,000 | | | | | | 96,656 | | | | | | 3,059,068 | | |
| | | 2017 | | | | | | 800,000 | | | | | | - | | | | | | 967,447 | | | | | | - | | | | | | 80,200 | | | | | | 1,847,647 | | | |||
| | | 2016 | | | | | | 800,000 | | | | | | - | | | | | | 899,966 | | | | | | 929,000 | | | | | | 86,041 | | | | | | 2,715,007 | | |
40 EXECUTIVE COMPENSATION |
|
Name
|
| |
Personal Use
of Aircraft ($)(1) |
| |
Housing
Allowance ($) |
| |
Retirement
Contributions ($)(2) |
| |
Other
Compensation ($)(3) |
| |
All Other
Compensation ($) |
| |||||||||||||||
| Albert A. Benchimol | | | | | 54,862 | | | | | | 300,000 | | | | | | 27,500 | | | | | | 351,914 | | | | | | 734,276 | | |
| Steve K. Arora | | | | | | | | | | | 300,000 | | | | | | 90,000 | | | | | | 95,105 | | | | | | 485,105 | | |
| David S. Phillips | | | | | | | | | | | - | | | | | | 57,500 | | | | | | 6,200 | | | | | | 63,700 | | |
| Peter J. Vogt | | | | | | | | | | | - | | | | | | 27,500 | | | | | | 38,875 | | | | | | 66,375 | | |
| Peter W. Wilson | | | | | | | | | | | - | | | | | | 90,000 | | | | | | 6,656 | | | | | | 96,656 | | |
EXECUTIVE COMPENSATION 41 |
| | | | | | | | | |
Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(2) |
| |
Estimated Future Payouts Under
Equity Incentive Plan Awards(6) |
| |
All Other
Stock Awards: Number of Shares of Stock or Units (#)(10) |
| |
Grant Date
Fair Value of Stock Awards ($)(11) |
| ||||||||||||||||||||||||||||||||||||
|
Name
|
| |
Award
Type |
| |
Grant
Date(1) |
| |
Threshold
($)(3) |
| |
Target
($)(4) |
| |
Maximum
($)(5) |
| |
Threshold
#(7) |
| |
Target
#(8) |
| |
Maximum
#(9) |
| ||||||||||||||||||||||||||||||
|
Albert A. Benchimol
|
| |
PSU
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 51,135 | | | | | | 102,270 | | | | | | - | | | | | | 2,499,990 | | |
|
RSU(15)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 43,464 | | | | | | 2,124,955 | | | |||
|
Annual Incentive Award
|
| |
N/A
|
| | | | - | | | | | | 1,925,000 | | | | | | 3,850,000 | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | |||
|
Steve K. Arora
|
| |
RSU(12)
|
| |
1/1/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 20,296 | | | | | | 999,984 | | |
|
RSU(13)
|
| |
1/1/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 48,975 | | | | | | 2,412,998 | | | |||
|
Annual Incentive Award(14)
|
| |
N/A
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | |||
|
David S. Phillips
|
| |
PSU
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 7,363 | | | | | | 14,726 | | | | | | - | | | | | | 359,977 | | |
|
RSU(13)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 11,996 | | | | | | 586,484 | | | |||
|
RSU(15)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 6,258 | | | | | | 305,954 | | | |||
|
Annual Incentive Award
|
| |
N/A
|
| | | | - | | | | | | 718,750 | | | | | | 1,437,500 | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | |||
|
Peter J. Vogt
|
| |
PSU
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 6,136 | | | | | | 12,272 | | | | | | - | | | | | | 299,989 | | |
|
RSU(13)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 4,362 | | | | | | 213,258 | | | |||
|
RSU(15)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 6,136 | | | | | | 299,989 | | | |||
|
Annual Incentive Award
|
| |
N/A
|
| | | | - | | | | | | 550,000 | | | | | | 1,100,000 | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | |||
|
Peter W. Wilson
|
| |
PSU
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 9,204 | | | | | | 18,408 | | | | | | - | | | | | | 449,984 | | |
|
RSU(13)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 10,124 | | | | | | 494,962 | | | |||
|
RSU(15)
|
| |
2/6/2018
|
| | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | 7,823 | | | | | | 382,466 | | | |||
|
Annual Incentive Award
|
| |
N/A
|
| | | | - | | | | | | 1,125,000 | | | | | | 2,250,000 | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | |
42 EXECUTIVE COMPENSATION |
| Albert A. Benchimol | | |
The Company has entered into an employment agreement with Mr. Benchimol dated May 3, 2012, most recently amended on December 6, 2018.
|
|
| | | |
In connection with the recent renewal of Mr. Benchimol’s employment agreement, no changes were made to material terms other than: (i) extending the term for five years to December 31, 2023; (ii) including a lump sum cash payment equal to the grant date fair value of his most recent long-term equity award in the event he is terminated without “Cause” or leaves for “Good Reason”; and (iii) clarifying that if any payments made in connection with his termination following a “Change in Control” were to constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code, such payments shall either be reduced so that no portion of any such payments would constitute an excess parachute payment, or shall be paid in full, depending upon which approach would result in his receiving the greatest amount of payments after taxes. In the case of the latter approach, Mr. Benchimol would be liable for any excise tax owed.
|
|
| | | |
Under the employment agreement, Mr. Benchimol is entitled to: (i) an annual base salary of no less than $1,100,000; (ii) participation in our annual incentive plan at an annual bonus target of 175% of base salary should performance targets be met; (iii) participation in our long-term equity compensation plan; (iv) payment of severance in the event of the termination of Mr. Benchimol without “Cause” or his resignation from the Company for “Good Reason” as defined in the agreement; (v) a monthly housing allowance of $25,000 for a residence in Bermuda; (vi) up to 30 hours of personal use of the Company aircraft each calendar year; (vii) participation in any employment benefit plans made available to our executives; and (viii) any fringe benefits provided to our executives generally. These benefits are reflected in the “All Other Compensation” column of the “Summary Compensation Table” and the related footnote.
|
|
| | | |
Mr. Benchimol’s employment agreement provides for certain benefits upon termination of his employment for various reasons, as described below in the section entitled “Potential Payments Upon Termination or Change in Control.”
|
|
| | | |
The employment agreement also provides for a 12-month notice period should Mr. Benchimol desire to voluntarily terminate his employment with the Company and non-competition and non-solicitation provisions for a period of 24 months from the date of any termination.
|
|
| Steve K. Arora | | |
Mr. Arora serves as the Chief Executive Officer of AXIS Reinsurance under an employment agreement dated July 5, 2017 for a term of service commencing January 1, 2018 to January 1, 2021 and is entitled to: (i) an annual base salary of no less than $900,000; (ii) participation in our annual incentive plan at an annual bonus target of 125% of base salary should performance targets be met, provided that for the calendar year 2018 the amount paid to him was not to be less than $1,125,000; (iii) participation in our long-term equity compensation plan with an annual target restricted stock unit award valued at $1,400,000, provided that for the calendar year 2018, Mr. Arora received (a) a sign-on equity award valued at $1,000,000; and (b) a one-time “make whole” equity award valued at an amount equal to the aggregate value of equity forfeited by Mr. Arora as a result of his termination of employment with his previous employer; (iv) for the calendar year 2018, a sign-on cash award in the amount of $1,000,000; (v) participation in any employment benefit plans generally made available to our executives; and (vi) any fringe benefits we provide to our executives generally. These benefits are reflected in the “All Other Compensation” column of the “Summary Compensation Table” and the related footnote.
|
|
| | | |
Mr. Arora’s employment agreement also provides for certain benefits upon termination of his employment for various reasons, as described below under “Potential Payments Upon Termination or Change in Control.”
|
|
| | | |
Additionally, a 12-month notice period is required in the event Mr. Arora voluntarily terminates his employment with the Company and non-competition and non-solicitation provisions apply for a period of 12 months from the date of any termination under the employment agreement.
|
|
EXECUTIVE COMPENSATION 43 |
| David S. Phillips | | |
Mr. Phillips serves as the Company’s Chief Investment Officer under an employment agreement dated March 21, 2014 for a term of service that commenced on April 17, 2014 which automatically renews annually in December unless either Mr. Phillips or the Company provides six months’ prior written notice of nonrenewal to the other party, or Mr. Phillips is otherwise terminated under the employment agreement. Under the employment agreement, Mr. Phillips is entitled to: (i) an annual base salary of no less than $575,000; (ii) participation in our annual incentive plan at an annual bonus target of 125% of base salary should performance targets be met; (iii) participation in our long-term equity compensation plan with an annual target restricted stock unit award valued at $720,000; (iv) participation in any employment benefit plans generally made available to our executives; and (v) any fringe benefits we provide to our executives generally. These benefits are reflected in the “All Other Compensation” column of the “Summary Compensation Table” and the related footnote.
|
|
| | | |
Mr. Phillip’s employment agreement provides for certain benefits upon termination of his employment for various reasons, as described below in the section entitled “Potential Payments Upon Termination or Change in Control.”
|
|
| | | |
The employment agreement also provides for a six (6) month notice period in the event Mr. Phillips voluntarily terminates his employment with the Company, a non-competition provision for a period of three (3) months from the date of Mr. Phillips’ voluntary resignation and a non-solicitation provision for a period of six (6) months from the date of termination of his employment for any reason.
|
|
| Peter J. Vogt | | |
Mr. Vogt serves as our Chief Finance Officer under the terms of an employment agreement dated December 11, 2017 for a term of service that commenced on January 1, 2018 to December 31, 2020 and is entitled to: (i) an annual base salary of no less than $550,000; (ii) participation in our annual incentive plan at an annual bonus target of 100% of base salary should performance targets be met; (iii) participation in our long-term equity compensation plan with an annual target restricted stock unit award valued at $900,000; (iv) participation in any employment benefit plans generally made available to our executives; and (v) any fringe benefits we provide to our executives generally. Additionally, the employment agreement provided for a one-time payment in the amount of $100,000, less applicable taxes and withholdings, for relocation expenses. These benefits are reflected in the “All Other Compensation” column of the “Summary Compensation Table” and the related footnote.
|
|
| | | |
Additionally, Mr. Vogt’s employment agreement provides for certain benefits upon termination of his employment for various reasons, as described below under “Potential Payments Upon Termination or Change in Control.”
|
|
| | | |
The employment agreement also requires a 12-month notice period in the event Mr. Vogt voluntarily terminates his employment with the Company and non-competition and non-solicitation provisions which apply for a period of 12 months from the date of termination for any reason under the employment agreement.
|
|
| Peter W. Wilson | | |
Under the terms of an employment agreement dated June 23, 2014, Mr. Wilson serves as our Chief Executive Officer of AXIS Insurance for a term of service to December 31, 2019 and is entitled to: (i) an annual base salary of no less than $800,000 (which was increased to $900,000 beginning in 2018); (ii) participation in our annual incentive plan at an annual bonus target of 125% of base salary should performance targets be met; (iii) participation in our long-term equity compensation plan with an initial annual target restricted stock unit award valued at $900,000 (which was increased to $1,000,000 beginning in 2019); (iv) participation in any employment benefit plans generally made available to our executives; and (v) any fringe benefits we provide to our executives generally. These benefits are reflected above in the “All Other Compensation” column of the “Summary Compensation Table” and the related footnote.
|
|
44 EXECUTIVE COMPENSATION |
| | | |
Mr. Wilson’s employment agreement provides for certain benefits upon termination of his employment for various reasons, as described below under “Potential Payments Upon Termination or Change in Control.”
|
|
| | | |
Additionally, a 12-month notice period is required in the event Mr. Wilson voluntarily terminates his employment with the Company and non-competition and non-solicitation provisions apply for a period of 12 months from the date of any termination under the employment agreement.
|
|
EXECUTIVE COMPENSATION 45 |
46 EXECUTIVE COMPENSATION |
| | | |
Stock Awards
|
| ||||||||||||||||||||||||
|
Name
|
| |
Grant Date
|
| |
Number of Shares
or Number Units of Stock that have Not Vested (#) |
| |
Market Value of
Shares or Units of Stock That Have Not Vested ($) |
| |
Equity Incentive
Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity Incentive
Plan Awards: Market or Payout Value of PSU Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| ||||||||||||
|
Albert A. Benchimol
|
| |
5/18/2015(1)
|
| | | | 11,159 | | | | | | 576,251 | | | | | | - | | | | | | - | | |
|
2/2/2016(1)
|
| | | | 23,234 | | | | | | 1,199,804 | | | | | | - | | | | | | - | | | |||
|
2/2/2016(2)
|
| | | | 37,174 | | | | | | 1,919,665 | | | | | | - | | | | | | - | | | |||
|
1/31/2017(1)
|
| | | | 33,686 | | | | | | 1,739,545 | | | | | | 39,056 | | | | | | 2,016,852 | | | |||
|
2/6/2018(1)
|
| | | | 43,464 | | | | | | 2,244,481 | | | | | | 51,135 | | | | | | 2,640,611 | | | |||
| | | | | | | | | | | | | | | | | | | | | |
Aggregate
Market Value: |
| ||||||
| | | | | | | | | | | | | | | | | | | | | | | | 12,337,209 | | | |||
|
Steve K. Arora
|
| |
1/1/2018(3)
|
| | | | 20,296 | | | | | | 1,048,085 | | | | | | - | | | | | | - | | |
|
1/1/2018(4)
|
| | | | 48,975 | | | | | | 2,529,069 | | | | | | - | | | | | | | | | |||
| | | | | | | | | | | | | | | | | | | | | |
Aggregate
Market Value: |
| ||||||
| | | | | | | | | | | | | | | | | | | | | | | | 3,577,154 | | | |||
|
David S. Phillips
|
| |
2/3/2015(1)
|
| | | | 1,580 | | | | | | 81,591 | | | | | | - | | | | | | - | | |
|
2/2/2016(1)
|
| | | | 3,346 | | | | | | 172,787 | | | | | | - | | | | | | - | | | |||
|
2/2/2016(2)
|
| | | | 5,353 | | | | | | 276,429 | | | | | | - | | | | | | - | | | |||
|
1/31/2017(1)
|
| | | | 4,851 | | | | | | 250,506 | | | | | | 5,624 | | | | | | 290,423 | | | |||
|
2/6/2018(1)
|
| | | | 6,258 | | | | | | 323,163 | | | | | | 7,363 | | | | | | 380,225 | | | |||
|
2/6/2018(5)
|
| | | | 11,996 | | | | | | 619,473 | | | | | | - | | | | | | - | | | |||
| | | | | | | | | | | | | | | | | | | | | |
Aggregate
Market Value: |
| ||||||
| | | | | | | | | | | | | | | | | | | | | | | | 2,394,598 | | | |||
|
Peter J. Vogt
|
| |
2/3/2015(1)
|
| | | | 1,462 | | | | | | 75,498 | | | | | | - | | | | | | - | | |
|
2/2/2016(1)
|
| | | | 2,788 | | | | | | 143,972 | | | | | | - | | | | | | - | | | |||
|
1/31/2017(1)
|
| | | | 4,687 | | | | | | 242,037 | | | | | | - | | | | | | - | | | |||
|
5/1/2017(1)
|
| | | | 6,263 | | | | | | 323,421 | | | | | | - | | | | | | - | | | |||
|
2/6/2018(1)
|
| | | | 6,136 | | | | | | 316,863 | | | | | | 6,136 | | | | | | 316,863 | | | |||
|
2/6/2018(5)
|
| | | | 4,362 | | | | | | 225,254 | | | | | | - | | | | | | - | | | |||
| | | | | | | | | | | | | | | | | | | | | |
Aggregate
Market Value: |
| ||||||
| | | | | | | | | | | | | | | | | | | | | | | | 1,643,908 | | | |||
|
Peter W. Wilson
|
| |
2/3/2015(1)
|
| | | | 1,974 | | | | | | 101,937 | | | | | | - | | | | | | - | | |
|
2/2/2016(1)
|
| | | | 4,182 | | | | | | 215,958 | | | | | | - | | | | | | - | | | |||
|
2/2/2016(2)
|
| | | | 6,691 | | | | | | 345,523 | | | | | | - | | | | | | - | | | |||
|
1/31/2017(1)
|
| | | | 6,063 | | | | | | 313,093 | | | | | | 7,030 | | | | | | 363,029 | | | |||
|
2/6/2018(1)
|
| | | | 7,823 | | | | | | 403,980 | | | | | | 9,204 | | | | | | 475,295 | | | |||
|
2/6/2018(5)
|
| | | | 10,124 | | | | | | 522,803 | | | | | | - | | | | | | - | | | |||
| | | | | | | | | | | | | | | | | | | | | |
Aggregate
Market Value: |
| ||||||
| | | | | | | | | | | | | | | | | | | | | | | | 2,741,619 | | |
EXECUTIVE COMPENSATION 47 |
| | | |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||
|
Name
|
| |
Number of
Shares Acquired on Exercise (#) |
| |
Value
Realized on Exercise ($) |
| |
Number of
Shares Acquired on Vesting (#) |
| |
Market Value
Realized on Vesting ($) |
| ||||||||||||
| Albert A. Benchimol | | | | | - | | | | | | - | | | | | | 69,710 | | | | | | 3,801,690(1) | | |
| Steve K. Arora | | | | | - | | | | | | - | | | | | | - | | | | | | - | | |
| David S. Phillips | | | | | - | | | | | | - | | | | | | 26,661 | | | | | | 1,450,437(2) | | |
| Peter J. Vogt | | | | | - | | | | | | - | | | | | | 8,196 | | | | | | 414,748(3) | | |
| Peter W. Wilson | | | | | - | | | | | | - | | | | | | 17,601 | | | | | | 842,384(4) | | |
48 EXECUTIVE COMPENSATION |
|
Name
|
| |
Executive
Contributions in Last FY ($) |
| |
Registrant
Contributions in Last FY ($)(1) |
| |
Aggregate
Earnings in Last FY ($) |
| |
Aggregate
Withdrawals/ Distributions ($) |
| |
Aggregate
Balance at Last FYE ($)(2) |
| |||||||||||||||
| Albert A. Benchimol | | | | | - | | | | | | - | | | | | | - | | | | | | - | | | | | | - | | |
| Steve K. Arora | | | | | - | | | | | | 62,500 | | | | | | - | | | | | | - | | | | | | 62,500 | | |
| David S. Phillips | | | | | - | | | | | | 30,000 | | | | | | (8,366) | | | | | | - | | | | | | 187,104 | | |
| Peter J. Vogt | | | | | - | | | | | | - | | | | | | (11,882) | | | | | | - | | | | | | 116,248 | | |
| Peter W. Wilson | | | | | - | | | | | | 62,500 | | | | | | (12,213) | | | | | | - | | | | | | 275,499 | | |
EXECUTIVE COMPENSATION 49 |
50 EXECUTIVE COMPENSATION |
EXECUTIVE COMPENSATION 51 |
|
Name
|
| |
Death or
Disability |
| |
Executive
Termination for Good Reason or Company Termination Without Cause (pre-Change in Control) |
| |
Executive
Termination for Good Reason or Company Termination Without Cause in Connection with Change in Control (1) |
| |||||||||
| Albert A. Benchimol | | | | | | | | | | | | | | | | | | | |
| Base Pay ($) | | | | | 1,100,000 | | | | | | 2,200,000 | | | | | | 2,200,000 | | |
| Separation Bonus ($) | | | | | 1,925,000 | | | | | | 6,579,650 | | | | | | 8,906,975 | | |
| Value of Equity Awards ($)(2) | | | | | 12,337,209 | | | | | | 12,337,209 | | | | | | 12,337,209 | | |
| Benefits and Perquisites: Medical, Dental, Vision ($)(3) | | | | | 44,235 | | | | | | 44,235 | | | | | | 44,235 | | |
| Cash Payments(4) | | | | | - | | | | | | 6,750,000 | | | | | | 6,750,000 | | |
| Total ($) | | | | | 15,406,444 | | | | | | 27,911,094 | | | | | | 30,238,419 | | |
| Steve K. Arora | | | | | | | | | | | | | | | | | | | |
| Base Pay ($) | | | | | - | | | | | | 900,000 | | | | | | 900,000 | | |
| Separation Bonus ($) | | | | | 1,125,000 | | | | | | 2,250,000 | | | | | | 3,375,000 | | |
| Value of Equity Awards ($)(2) | | | | | 3,577,154 | | | | | | 3,577,154 | | | | | | 3,577,154 | | |
| Benefits and Perquisites: Medical, Dental, Vision ($)(3) | | | | | 29,364 | | | | | | 29,364 | | | | | | 29,364 | | |
| Total ($) | | | | | 4,731,518 | | | | | | 6,756,518 | | | | | | 7,881,518 | | |
| David S. Phillips | | | | | | | | | | | | | | | | | | | |
| Base Pay ($) | | | | | - | | | | | | 431,250 | | | | | | 575,000 | | |
| Separation Bonus ($) | | | | | 718,750 | | | | | | 1,257,813 | | | | | | 1,437,500 | | |
| Value of Equity Awards ($)(2) | | | | | 2,394,598 | | | | | | 2,394,598 | | | | | | 2,394,598 | | |
| Benefits and Perquisites: Medical, Dental, Vision ($)(3) | | | | | 31,050 | | | | | | 31,050 | | | | | | 31,050 | | |
| Total ($) | | | | | 3,144,398 | | | | | | 4,114,711 | | | | | | 4,438,148 | | |
| Peter J. Vogt | | | | | | | | | | | | | | | | | | | |
| Base Pay ($) | | | | | - | | | | | | 550,000 | | | | | | 550,000 | | |
| Separation Bonus ($) | | | | | 550,000 | | | | | | 1,100,000 | | | | | | 1,650,000 | | |
| Value of Equity Awards ($)(2) | | | | | 1,643,908 | | | | | | 1,643,908 | | | | | | 1,643,908 | | |
| Benefits and Perquisites: Medical, Dental, Vision ($)(3) | | | | | 31,050 | | | | | | 31,050 | | | | | | 31,050 | | |
| Total ($) | | | | | 2,224,958 | | | | | | 3,324,958 | | | | | | 3,874,958 | | |
| Peter W. Wilson | | | | | | | | | | | | | | | | | | | |
| Base Pay ($) | | | | | - | | | | | | 800,000 | | | | | | 800,000 | | |
| Separation Bonus ($) | | | | | 1,125,000 | | | | | | 2,250,000 | | | | | | 3,375,000 | | |
| Value of Equity Awards ($)(2) | | | | | 2,741,619 | | | | | | 2,741,619 | | | | | | 2,741,619 | | |
| Benefits and Perquisites: Medical, Dental, Vision ($)(3) | | | | | 21,181 | | | | | | 21,181 | | | | | | 21,181 | | |
| Total ($) | | | | | 3,887,800 | | | | | | 5,812,800 | | | | | | 6,937,800 | | |
52 EXECUTIVE COMPENSATION |
EXECUTIVE COMPENSATION 53 |
|
Name
|
| |
Fees
Earned or Paid in Cash ($)(1) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| |||||||||
| Michael A. Butt | | | | | 364,863(2) | | | | | | 500,000(3) | | | | | | 864,863 | | |
| Charles A. Davis | | | | | 230,000 | | | | | | - | | | | | | 230,000 | | |
| Robert L. Friedman | | | | | 220,000 | | | | | | - | | | | | | 220,000 | | |
| Christopher V. Greetham | | | | | 317,000(2) | | | | | | - | | | | | | 317,000 | | |
| Elanor R. Hardwick | | | | | 33,333 | | | | | | - | | | | | | 33,333 | | |
| Maurice A. Keane | | | | | 284,500(2) | | | | | | - | | | | | | 284,500 | | |
| Cheryl-Ann Lister | | | | | 225,000 | | | | | | - | | | | | | 225,000 | | |
| Thomas C. Ramey | | | | | 262,500 | | | | | | - | | | | | | 262,500 | | |
| Henry B. Smith | | | | | 366,500(2) | | | | | | - | | | | | | 366,500 | | |
| Barbara A. Yastine | | | | | 105,000 | | | | | | - | | | | | | 105,000 | | |
| Wilhelm Zeller | | | | | 220,000 | | | | | | - | | | | | | 220,000 | | |
| Lizabeth Zlatkus | | | | | -(4) | | | | | | - | | | | | | - | | |
54 2018 DIRECTOR COMPENSATION |
|
Committee Member
|
| |
Annual
Retainer |
| |||
| Audit Committee | | | | $ | 15,000 | | |
| Compensation Committee | | | | $ | 10,000 | | |
| Corporate Governance and Nominating Committee | | | | $ | 7,500 | | |
| Finance Committee | | | | $ | 10,000 | | |
| Risk Committee | | | | $ | 10,000 | | |
|
Committee Chair
|
| |
Annual
Retainer |
| |||
| Audit Committee | | | | $ | 30,000 | | |
| Compensation Committee | | | | $ | 15,000 | | |
| Corporate Governance and Nominating Committee | | | | $ | 7,500 | | |
| Finance Committee | | | | $ | 10,000 | | |
| Risk Committee | | | | $ | 20,000 | | |
2018 DIRECTOR COMPENSATION 55 |
|
Plan Category
|
| |
Number of Securities
to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) |
| |
Weighted-Average
Exercise Price Outstanding Options, Warrants and Rights(2) |
| |
Number of Securities
Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in the First Column)(3) |
| |||||||||
| Equity compensation plans approved by security holders |
| | | | 1,642,805 | | | | | | - | | | | | | 2,824,592 | | |
| Equity compensation plans not approved by security holders | | | | | - | | | | | | - | | | | | | - | | |
| Total | | | | | 1,642,805 | | | | | | - | | | | | | 2,824,592 | | |
56 EQUITY COMPENSATION PLAN INFORMATION |
AUDIT COMMITTEE REPORT 57 |
58 PROPOSAL 3. APPOINTMENT OF INDEPENDENT AUDITORS |
| | | |
Fiscal Year
2018 ($) |
| |
Fiscal Year
2017 ($) |
| ||||||
| Audit Fees(1) | | | | | 5,697,126 | | | | | | 6,580,443 | | |
| Audit-Related Fees(2) | | | | | 89,870 | | | | | | 79,220 | | |
| Tax Fees(3) | | | | | 71,225 | | | | | | 45,053 | | |
| All Other Fees(4) | | | | | - | | | | | | 39,712 | | |
| Total | | | | | 5,858,221 | | | | | | 6,744,428 | | |
PRINCIPAL ACCOUNTING FEES AND SERVICES 59 |
60 SHAREHOLDER PROPOSALS FOR 2020 ANNUAL MEETING |
OTHER MATTERS 61 |
|
At and For the year Ended December 31,
(in thousands) |
| |
2018
|
| |
2017
|
| ||||||
| Statement of Operations Data: | | | | | | | | | | | | | |
| Net income (loss) available (attributable) to common shareholders | | | | $ | 396 | | | | | $ | (415,779) | | |
| Net investment (gains) losses, net of tax(1) | | | | | 138,576 | | | | | | (26,204) | | |
| Foreign exchange losses (gains), net of tax(2) | | | | | (33,496) | | | | | | 126,960 | | |
| Transaction and reorganization expenses, net of tax(3) | | | | | 55,904 | | | | | | 23,879 | | |
| Revaluation of net deferred tax asset(4) | | | | | - | | | | | | 41,629 | | |
| Bargain purchase gain(4) | | | | | - | | | | | | (15,044) | | |
| Operating income (loss)(5) | | | | | 161,380 | | | | | | (264,559) | | |
| Amortization of VOBA and intangible assets, net of tax(6) | | | | | 149,470 | | | | | | 42,644 | | |
| Amortization of acquisition costs, net of tax(7) | | | | | (101,628) | | | | | | (26,443) | | |
| Ex-PGAAP operating income (loss)(8) | | | | | 209,222 | | | | | | (248,358) | | |
|
Return on Average Common Shareholders Equity:
|
| |
2018
|
| |
2017
|
| ||||||
| Return on average common equity | | | | | - | | | | | | (8.6%) | | |
| Operating return on average common equity(9) | | | | | 3.7% | | | | | | (5.4%) | | |
| Ex-PGAAP operating return on average common equity(10) | | | | | 4.7% | | | | | | (5.1%) | | |
| Average common shareholders’ equity | | | | $ | 4,410,668 | | | | | $ | 4,856,280 | | |
| | | |
2018
|
| |||||||||||||||||||||
|
Annualized Return on Average Common Shareholders’
Equity: |
| |
Year
ended |
| |
Nine
months ended |
| |
Six
months ended |
| |
Three
months ended |
| ||||||||||||
| Annualized return on average common equity | | | | | - | | | | | | 5.9% | | | | | | 6.9% | | | | | | 5.5% | | |
|
Annualized operating return on average common equity(9)
|
| | | | 3.7% | | | | | | 9.1% | | | | | | 10.1% | | | | | | 10.8% | | |
|
Annualized ex-PGAAP operating return on average common equity(10)
|
| | | | 4.7% | | | | | | 10.2% | | | | | | 11.3% | | | | | | 12.2% | | |
62 Appendix 1 |
Appendix 1 63 |
64 Appendix 1 |