DEF 14A of United Fire Group Inc
Filed Apr 8, 2025 · FY20240000101199-25-000019
BOARD OF DIRECTORS
BOARD OF DIRECTORS Our Board of Directors currently consists of 11 directors. The current membership includes: James W. Noyce (Chairperson), John-Paul E. Besong, Scott L. Carlton, Brenda K. Clancy, Christopher R. Drahozal, Matthew R. Foran, Mark A. Green, Kevin J. Leidwinger, Lura E. McBride, George D. Milligan and Susan E. Voss.
Corporate Governance
Corporate Governance In order to promote the highest standards of management for the benefit of shareholders, our Board of Directors follows certain governance practices regarding how the Board of Directors conducts its business and fulfills its duties. United Fire Group, Inc.’s Corporate Governance Guidelines may be obtained free of charge by writing to United Fire Group, Inc., Attn: Investor Relations, P.O. Box 73909, Cedar Rapids, Iowa 52407-3909, or on our public website, http://ir.ufginsurance.com, by selecting Overview and then Governance Documents. The following describes the governance practices used by the Board of Directors.
Board Size, Composition and Independence Determination
Board Size, Composition and Independence Determination Our Board of Directors currently consists of 11 members, divided among three classes (Class A, Class B and Class C). Mr. Noyce serves as the Chairperson. The Board of Directors requires a majority of our directors to be independent, as defined by The Nasdaq Global Select Market (“Nasdaq”) in its listing rules (the "Nasdaq Listing Rules"). The Board of Directors determines director independence by applying the definition of independence contained in the applicable Nasdaq Listing Rules, both for purposes of Nasdaq’s rule requiring that a majority of the Board of Directors consist of independent directors and its rules requiring the Audit Committee, Nominating and Governance Committee and Compensation and Human Capital Committee (“Compensation Committee”) to be comprised entirely of independent directors. The Board of Directors has analyzed the independence of each director who served on the Board of Directors during 2024 and each director nominee and determined that 10 of our 11 existing directors are independent within the meaning of the Nasdaq Listing Rules. Mr. Leidwinger, our President and Chief Executive Officer, is the only director deemed not independent.
Qualifications, Skills and Diversity of Directors and Director Nominees
Qualifications, Skills and Diversity of Directors and Director Nominees Our Nominating and Governance Committee, with input from our Chief Executive Officer, reviews and evaluates all director nominees, including incumbent nominees. The Nominating and Governance Committee and the Board of Directors seek qualified individuals who possess the minimum qualifications and the desirable qualities or skills described under the heading “Director Nomination Process” in this Proxy Statement. All our incumbent directors and nominees possess both the specific minimum qualifications and the desirable qualities or skills. The following charts reflect the qualifications, key skill sets and diversity of our nominees and continuing directors.
Qualifications, Skills and Diversity of Directors and Director Nominees
| Director Qualifications and Experience | John Paul Besong | Scott Carlton | Brenda Clancy | Christopher Drahozal | Matthew Foran | Mark Green | Kevin Leidwinger | Lura McBride | George Milligan | James Noyce | Susan Voss | | Academia & Education | | | | X | | | | | | | | | Accounting | | X | X | | | | | | | X | | | Actuarial | | | | | | | | | | X | | | Senior Administration | X | X | X | | X | X | X | X | X | X | X | | Business Operations | X | X | X | | X | X | X | X | X | X | | | Corporate Governance | X | X | X | X | X | X | X | X | X | X | X | | Finance & Capital | | X | X | | X | X | | X | | X | X | | Industry Service | | | X | | X | X | X | | X | X | X | | Investment | | | | | X | X | X | | X | X | | | Marketing | | | | | X | X | X | X | | | | | Regulatory & Government | | | | X | | | | | | | X | | Risk Management | | X | X | | X | X | X | X | X | X | | | Technology & Systems | X | | X | | X | | X | X | | | |
Qualifications, Skills and Diversity of Directors and Director Nominees
Our directors provide an effective mix of experience and fresh perspective, as shown on the following charts. The average age is 62 as of April 8, 2025. The average tenure is 11.7 years.
Director Compensation
Director Compensation We have designed the compensation of our non-employee directors to attract and retain qualified directors and to align directors’ interests with the interests of our shareholders. See “Director Compensation” in this Proxy Statement for a description of our directors’ compensation program and the fees paid to our non-employee directors during 2024.
PROPOSAL ONE — ELECTION OF DIRECTORS
PROPOSAL ONE — ELECTION OF DIRECTORS Our Articles of Incorporation require that our Board of Directors be divided into three classes, A, B and C, with one class elected at each Annual Meeting. The Board of Directors must consist of no more than 15 and no less than nine members, with the exact number fixed by the Board of Directors. The membership of our Board of Directors is currently fixed at 11, divided among three classes (Class A, Class B and Class C). The three individuals identified as continuing Class B directors have, upon the recommendation of the Nominating and Governance Committee, been nominated for election to our Board of Directors at this year’s Annual Meeting.
Director Nominees
Director Nominees
Directors (Class B) — Terms Expiring in 2025
Directors (Class B) — Terms Expiring in 2025
Directors (Class B) — Terms Expiring in 2025
| John-Paul E. Besong Age 71 Director since 2013 | Mr. Besong has a strong technical, business and management background, having previously held the position of Senior Vice President of e-Business and Chief Information Officer for Rockwell Collins, a Fortune 500 company based in Cedar Rapids, Iowa, that provides aviation electronics for both commercial and military aircraft. He was appointed Senior Vice President and Chief Information Officer in 2003, serving until 2015. Since 2015, Mr. Besong has served as a director of QCR Holdings, Inc. of Moline, Illinois, a multi-bank holding company. Mr. Besong is a strong community supporter and member of various industry and community boards. He serves on the board of directors of Lean Aerospace Initiative (LAI), Junior Achievement of Eastern Iowa (Cedar Rapids Area), Mercy Medical Center, Iowa Public Television Foundation and Technology Association of Iowa (“TAI”) CIO Advisory Board, where he serves as a member and former chair of the executive board of TAI. Mr. Besong’s business background provides him with a very strong understanding of technological advances critical to the insurance industry. The Board of Directors believes that Mr. Besong’s qualifications to serve as director include his business acumen and distinguished management career as an officer and information technology expert of a Fortune 500 company. | | Matthew R. Foran Age 44 Director since 2022 | Mr. Foran brings extensive experience in the insurance technology sector and investment experience to the Board of Directors. Mr. Foran is Co-Founder and President of Stoic Lane, Inc., a private equity holding company in Chicago, Illinois, positions he has held since 2021. Mr. Foran is also a Trustee of the American College of Financial Services, a private college focused on professional training for financial practitioners. From 2018 to April of 2021, he was Head of Alternative Distribution at The Hartford Insurance Group, an investment and insurance company. Mr. Foran’s background includes serving as leader of IVANS Marketplace at Applied Systems, an insurance technology and software company, from 2015 to 2018; as a board member of GuideOne Insurance from 2015 to 2018; as Founder and CEO at EvoSure, LLC, an early InsurTech firm that was acquired by Applied Systems, from 2012 to 2015; as Director of Strategy and Operational Planning and Execution at Zurich North America from 2009 to 2012; and in a business development role at Marsh USA, Inc. from 2004 to 2009. Mr. Foran graduated from the University of Illinois with a degree in Economics. |
Directors (Class B) — Terms Expiring in 2025
| James W. Noyce Age 69 Director since 2009 | Mr. Noyce has a strong business, accounting, and insurance industry background, with extensive public company experience. Before retiring, Mr. Noyce had nearly three decades of experience in the financial services industry, most recently as Chief Executive Officer and Director of FBL Financial Group, Inc. (“FBL”), an insurance holding company headquartered in West Des Moines, Iowa. While at FBL, Mr. Noyce served as Chief Executive Officer and Director (2007-2009), Chief Financial Officer (1996-2007), and Chief Administrative Officer (2002-2007). From January 2000 to July 2002, he was Executive Vice President and General Manager of the property casualty companies managed by FBL. Mr. Noyce began his employment with FBL and its affiliates in 1985. From January to May 2016, Mr. Noyce served as Interim CEO of the Greater Des Moines YMCA while the organization performed a search for a permanent CEO. Since 2009, Mr. Noyce has served as a director of West Bancorporation, Inc. of West Des Moines, Iowa, a bank holding company, and was named Board Chairman in April 2018. Mr. Noyce has held or still holds numerous professional certifications and designations including certified public accountant; Fellow, Casualty Actuarial Society; Associate, Society of Actuaries; Fellow, Life Management Institute; and Member, American Academy of Actuaries. He was named Outstanding CPA in Business and Industry by the Iowa Society of CPAs and was inducted into the American Institute of Certified Public Accountants’ Business and Industry Hall of Fame in 2007. He is also an audit committee financial expert. |
Directors (Class B) — Terms Expiring in 2025
Directors in uncontested elections are elected by a majority vote of the shares, represented either virtually or by proxy, and entitled to vote in the election at the Annual Meeting at which a quorum is present. In tabulating the voting results for the election of directors, “FOR” votes are counted in favor of the election of a director, and “AGAINST” votes are counted against the election of a director. Abstentions will have the same effect as a vote against the director. The Board of Directors recommends a vote FOR the election to the Board of each of the three director nominees identified in this Proxy Statement.
Continuing Directors
Continuing Directors The following individuals are continuing members of our Board of Directors who are not up for election at the Annual Meeting.
Directors (Class A) — Terms Expiring in 2026
Directors (Class A) — Terms Expiring in 2026
Directors (Class A) — Terms Expiring in 2026
| Scott L. Carlton Age 56 Director since 2012 | Mr. Carlton has a strong international business background and extensive experience within the finance and accounting functions in a global public company. He is currently the President of Tokai Carbon GE LLC, the US subsidiary of Tokai Carbon, a global leader in carbon-based materials, a position he has held since 2017. Prior to this position, Mr. Carlton was the President of SGL Carbon LLC (“SGL Carbon”) for 10 years, leading the U.S. companies of SGL Carbon, a leading worldwide manufacturer of carbon-based products. From 2002 until 2007, Mr. Carlton served as Vice President of Finance and Controlling for the largest business unit of SGL Carbon, and in that capacity was responsible for the controlling, finance, and accounting functions. Since beginning his career with SGL Carbon in 1994, Mr. Carlton has worked in a variety of accounting and financial positions at various locations within and outside of the U.S. Mr. Carlton holds a bachelor’s degree in financial management, a Master of Business Administration degree from the University of North Carolina at Charlotte and completed the Senior Executive Education Program at the London Business School. Mr. Carlton also has insurance experience on both a domestic and international scale. He is a Certified Director within the National Association of Corporate Directors (“NACD”) and was previously a director of the Carolina chapter of the NACD. Mr. Carlton serves on the board of E4 Carolinas of Charlotte, North Carolina. Mr. Carlton is a first cousin by marriage to Mr. Drahozal, another director of the Company. | | Brenda K. Clancy Age 70 Director since 2016 | Ms. Clancy has a wealth of valuable experience in the insurance industry, having most recently served as the Global Chief Technology Officer for AEGON N.V. (“AEGON”) (2013-2016), which is a multinational life insurance, pensions and asset management company headquartered in The Hague, Netherlands. AEGON is a parent company of Transamerica Corporation, an American holding company for various life insurance companies and investment firms doing business primarily in the United States, offering life and supplemental health insurance, investments, and retirement services. Throughout her 40-year career with AEGON, Ms. Clancy held numerous financial leadership positions including President of Transamerica Life Insurance Company (2008-2016), Executive Vice President and Chief Operating Officer of Transamerica Life Insurance Company (2004-2008), Senior Vice President, Information & Finance and Treasurer of Life Investors Insurance Co. of America (1997-2004), and Vice President and Controller of Life Investors Insurance Co. of America (1992-1997). She was actively involved in all major acquisitions, strategy development, change initiatives and business integration. Ms. Clancy served as a Director for UnityPoint Health, a nonprofit healthcare organization operating in Iowa, Illinois, and Wisconsin until December 31, 2022. She is also an audit committee financial expert. |
Directors (Class A) — Terms Expiring in 2026
| Kevin J. Leidwinger Age 61 Director since 2022 | Kevin J. Leidwinger serves as President and Chief Executive Officer of the Company. He joined the Company in August 2022 to lead the Company through its ongoing transformation, bringing 30 years of industry experience to the role. Mr. Leidwinger previously served as President and Chief Operating Officer of CNA Commercial in Chicago, a property and casualty business insurance company, from June 2015 to April 2022. Prior to joining CNA in 2015, he held the role of Global Casualty Manager for Chubb, responsible for the company’s worldwide portfolio of general liability, workers compensation, excess umbrella, auto, environmental and errors and omissions business. Mr. Leidwinger is a graduate of Dickinson College in Carlisle, Pennsylvania. He was named 2021 board chair of the National Council on Compensation Insurance (NCCI). | | Susan E. Voss Age 69 Director since 2014 | Ms. Voss joined American Enterprise Group, Inc. as its Vice President and General Counsel in November 2013. Headquartered in Des Moines, Iowa, American Enterprise Group provides personal and customized health and life insurance solutions for individuals, families and small business owners. In 2019, Voss became VP of Government Relations and retired on December 31, 2019. Prior to joining American Enterprise Group, Inc., Ms. Voss founded her own consulting firm in 2013, Voss Consulting, LLC, which provides consulting and expert witness services in the areas of insurance and financial product regulation and compliance issues. Before Voss Consulting, Ms. Voss worked in Iowa state government for 31 years, the last 20 of which were spent with the Iowa Insurance Division. In 2005 she was appointed by then-Governor Tom Vilsack to serve as Iowa Insurance Commissioner, a position she held until 2013. Ms. Voss was elected by her peers as an officer of the National Association of Insurance Commissioners (“NAIC”) in 2007 and served as its President in 2011. During her time as Iowa Insurance Commissioner and her tenure with the NAIC, Ms. Voss served on a number of NAIC committees including: Market Conduct and Regulation Committee (which she chaired from 2005 to 2006), the Principles-Based Reserving Working Group (which she chaired in 2012), International Insurance Committee (which she chaired in 2012), Life and Annuities Committee, Financial Condition Committee and Financial Regulation Standards and Accreditation Committee. Ms. Voss is also a member of the Board of Directors for NCCI-the National Council of Compensation Insurers and Everlake Life Insurance Company. Ms. Voss brings regulatory and compliance expertise to the Board of Directors. |
Directors (Class C) — Terms Expiring in 2027
Directors (Class C) — Terms Expiring in 2027
Directors (Class C) — Terms Expiring in 2027
| Mark A. Green Age 57 Director since 2022 | Mr. Green is an Independent Insurance Consultant with Atchley Consulting, an insurance consulting company, since July of 2022. While at Atchley, Mr. Green also served as Operating Partner at Vistria Group, a private equity firm in Chicago, Illinois, from 2021 to 2024. Mr. Green has an extensive background in the insurance sector with business development roles, as well as investment experience. In addition to his role at Vistria Group, Mr. Green was selected to serve as an Executive Board Member at MGT Insurance, an insurance tech startup, in October 2023. Prior to joining Vistria Group in 2021, he served for five years at Kemper Corporation, a specialized insurance provider, as Executive Vice President of Business Development and Reinsurance, and Executive Vice President and President of Life and Health. From 2009 to 2016, Mr. Green gained valuable experience in various roles at Allstate Corporation, including as Vice President and Senior Vice President at Allstate Financial, President of Ivantage from 2013 to 2015, President of Allstate Dealer Services from 2014 to 2015, and President of Encompass Insurance Company from 2015 to 2016. Prior to joining Allstate, Mr. Green worked for various other companies in the insurance industry from 1995 to 2009. He holds a bachelor’s degree from Macalester College, and a Master of Business Administration degree from Columbia University. |
Directors (Class C) — Terms Expiring in 2027
| Christopher R. Drahozal Age 63 Director since 1997 | Mr. Drahozal is the John M. Rounds Professor of Law at the University of Kansas School of Law in Lawrence, Kansas, where he has taught since 1994. During Fall 2015 and Fall 2018 he was the Mason Ladd Distinguished Visiting Professor of Law at the University of Iowa College of Law. He is on the Board of Directors of The McIntyre Foundation. From 2012 to 2016, Mr. Drahozal served as special advisor to the Consumer Financial Protection Bureau, a government agency headquartered in Washington, D.C., on matters related to the use of arbitration clauses in consumer financial services contracts. Prior to teaching, Mr. Drahozal was in private law practice in Washington, D.C., and served as a law clerk for the Iran-U.S. Claims Tribunal, the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court. Mr. Drahozal is a first cousin by marriage to Mr. Carlton, another director of the Company. Mr. Drahozal is an internationally known scholar whose writing focuses on the law and economics of dispute resolution, particularly arbitration. | | Lura E. McBride Age 53 Director since 2020 | Lura E. McBride is the President & CEO at Van Meter Inc. ("Van Meter"), a one-hundred percent employee-owned electrical and automation distributor, a position she has held since 2016. She previously served as Chief Operating Officer at Van Meter since 2010. In this role, she has responsibility for the overall vision, direction, and growth strategy of Van Meter, which employs over 800 employee-owners in 25 locations across Iowa, Nebraska, Kansas, Virginia, Alabama, Wisconsin, and Minnesota. She has experience building strong leadership and a high performing culture to create lasting value for customers, supplier partners, communities, and employee-owners. She serves on the Van Meter Board of Directors, the Werner Electric Supply Board of Directors and the National Association of Electrical Distributors (NAED). Prior to joining Van Meter in 2008, she worked for almost 15 years at Accenture, a global management consulting company based out of Chicago, Illinois. Her work experience was in the areas of Systems Integration, Change Management, Human Performance, Knowledge Management, Business Process Design and Program Management. Ms. McBride graduated from the University of Iowa with degrees in Finance and Marketing. In the community, Ms. McBride serves on various boards and committees including The Tippie School of Business Advisory Board, Tanager Place, The Hall-Perrine Foundation, Unity Point St. Luke’s Hospital, Iowa BIG and the Cedar Rapids Police Chief Council. | | George D. Milligan Age 68 Director since 1999 | Mr. Milligan has a strong business background, with service since 1985 as President of The Graham Group, Inc., of Des Moines, Iowa. The Graham Group, Inc. consists of a real estate firm specializing in developing office buildings and a construction firm specializing in constructing hospital facilities. Since 2005, Mr. Milligan has also served as a director of West Bancorporation, Inc. of West Des Moines, Iowa, a bank holding company. Mr. Milligan serves as a director on the loan committee and nominating and governance committee of the West Bancorporation, Inc. Board of Directors. Mr. Milligan previously served as director of Allied Life Insurance Company. Mr. Milligan is a long-time community leader and supporter, being active with the Boy Scouts of America, the Dowling Foundation, and the Variety Club of Iowa. |
Compensation and Benefits Philosophy
Compensation and Benefits Philosophy When determining the compensation levels for our named executive officers, the Compensation Committee considers the following principles: • Performance. The Compensation Committee has tied the compensation of our named executive officers to the Company’s achievement of pre-established performance goals. The Compensation Committee considers the individual’s contribution to Company performance and, where applicable, to the performance of his or her functional area. The Compensation Committee and Board of Directors believe that tying each named executive officer’s compensation to the achievement of pre-established performance goals creates an incentive for the executive to achieve the Company’s objectives and further aligns his or her interests with those of our shareholders. • Fairness and Reasonableness. We strive to provide compensation and benefit programs that are fair and competitive with our industry peers, while reasonably rewarding our named executive officers for their service relative to performance. • Cost. We strive to provide appropriate incentives and motivation to our named executive officers that will continue to increase value to our shareholders by designing compensation programs that we believe are cost-effective and affordable. Competitive Market Review Mercer, the Compensation Committee’s independent compensation consultant, assisted the Compensation Committee in analyzing our comparison group and evaluating the competitiveness and design of our 2024 compensation program for our named executive officers. The Compensation Committee used Mercer’s Executive Compensation Review (“Market Analysis”) to evaluate the reasonableness of 2024 salary recommendations for our named executive officers. As described below, the Market Analysis used both comparison group data and published survey data. The Compensation Committee identified the 14-company comparison group noted below to evaluate 2024 compensation decisions, after considering the recommendations of Mercer. Based on Mercer's recommendation, companies included in the comparison group met the following criteria: • Industry group: property and casualty, and multi-line insurance carriers; • Revenues between $350 million and $3.2 billion; and • Market capitalization between $250 million and $8 billion. The Compensation Committee included the following 14 companies in the 2024 comparison group used to evaluate its 2024 compensation decisions. This was the same peer group that was used to evaluate 2023 compensation decisions except for (i) the removal of AMERISAFE, Inc., Mercury General Corporation, Palomar Holdings, Inc., Selective Insurance Group, Inc., and Stewart Information Services Corporation, and (ii) the addition of White Mountains Insurance Group, Ltd. and Kinsale Capital Group, Inc., to better position the Company as compared to the composite company size median in the peer group and to maintain the statistical validity of the peer group.
Risk Considerations
Risk Considerations We believe that the design of our compensation program for named executive officers provides an appropriate balance of fixed compensation (base salary) and at-risk compensation (incentives). Total direct compensation of our named executive officers is intended to provide a balanced program that encourages the named executive officers to take appropriate risks aimed at improving Company performance and enhancing long-term shareholder value, while avoiding inappropriate risks. In this regard, our compensation program for our named executive officers is designed to include, among other things, the following features: • a balanced mix of cash-based and equity-based compensation; • a balanced mix of short-term and long-term incentives; • variable compensation based on a variety of performance goals; • threshold performance goals that must be achieved to earn incentives; • time-based vesting requirements for equity-based compensation; and • stock ownership guidelines. After reviewing our Company’s compensation plans applicable to all employees, we have determined that none of these plans create risks that are reasonably likely to have a materially adverse effect on the Company.
Elements of 2024 Target Direct Compensation
| Element | Type | Form | Period | Purpose | | Annual Base Salary | Fixed | Cash | Ongoing | Attract and retain; recognize individual performance | | Annual Incentive Plan | Variable | Cash | 1 year | Incentivizes short-term company and individual performance | | Long-Term Incentive Plan (“LTIP”) | Variable | RSUs time-based | 3-year ratable | Shareholder alignment, incentivizes long-term value creation and retention; represents 50% of total award opportunity | | | | PSUs performance-based | 3-year cliff | Incentivizes long-term company performance, shareholder alignment and encourages retention; represents 50% of total award opportunity |
Annual Base Salary — 2023 and 2024
(1) In determining Mr. Leidwinger's salary increase, the Compensation Committee took into consideration, among other things, improved Company financial performance and the Market Analysis. Annual Incentive Plan Structure & Design We have an Annual Incentive Plan (“AIP”) that provides annual performance-based cash awards to all Company employees, including all our named executive officers. The AIP ties a portion of each employee’s annual compensation directly to our financial performance. Our objective in using the AIP is to provide a strong financial incentive for all employees to achieve corporate and functional area goals. To determine the amount of performance-based cash awards for each named executive officer, we used five corporate performance measures that are defined further below: (1) adjusted return-on-equity; (2) written premium growth; (3) net adjusted loss ratio; (4) underwriting expense ratio; and (5) core earnings. The Compensation Committee selected these metrics as AIP performance measures in order to encourage management to focus on balanced growth, profitability, and expense discipline. As illustrated in the table below, we weigh each corporate performance measure and establish threshold, target, and maximum performance goals for each corporate performance measure, with increasingly higher awards for achieving increasingly higher performance. Each named executive officer can receive a performance-based cash award for each corporate performance measure. We pay no performance-based cash award for a corporate performance measure if the threshold goal for that measure is not achieved unless the Compensation Committee exercises discretion. The AIP also includes an individual performance component, pursuant to which each named executive officer’s annual performance-based award could be decreased to 0% or increased to up to 200% subject to the maximum payouts described below depending on their individual performance against goals established for them at the beginning of the fiscal year by Mr. Leidwinger (with respect to the named executive officers other than himself) or by the Board (with respect to Mr. Leidwinger). Performance with respect to each named executive officer’s individual performance goals is certified by the Board and based on Mr. Leidwinger’s evaluation with respect to named executive officers other than himself, in accordance with the table below:
Annual Base Salary — 2023 and 2024
| Individual Performance Factor | Needs Improvement | Achieved Some | Achieved All | Exceeded Some | Exceeded All | | Individual Payout (% of Target) | 0% | 0-80% | 80-105% | 105-150% | 150-200% |
Annual Base Salary — 2023 and 2024
| Base Salary | × | Target Bonus Opportunity (%) | × | Corporate Performance Factor (%) | × | Individual Performance Factor (%) | = | Annual Payout Factor |
AIP Target Bonus Opportunity and Weighting of Corporate Performance Measures — 2024
AIP Target Bonus Opportunity and Weighting of Corporate Performance Measures — 2024 The following table shows the target bonus opportunity and corporate performance measure weightings for each of our named executive officers for 2024. The target bonus percentages remained the same as compared to 2023 for the named executive officers other than Mr. Hernandez. Mr. Hernandez's target bonus opportunity was established by the Compensation Committee in connection with the commencement of his employment and was based on his compensation from his prior employer and internal pay equity.
AIP Target Bonus Opportunity and Weighting of Corporate Performance Measures — 2024
| Named Executive Officer | Target Bonus Opportunity as % of Base Salary | Core Earnings | Written Premium Growth | Net Adjusted Loss Ratio | Underwriting Expense Ratio | Adjusted ROE | | Kevin J. Leidwinger | 125% | 30% | 20% | 20% | 20% | 10% | | Eric J. Martin | 75% | 30% | 20% | 20% | 20% | 10% | | Julie A. Stephenson | 110% | 30% | 20% | 20% | 20% | 10% | | Steven D. Hernandez | 50% | 30% | 20% | 20% | 20% | 10% | | Sarah E. Madsen | 75% | 30% | 20% | 20% | 20% | 10% |
AIP Target Bonus Opportunity and Weighting of Corporate Performance Measures — 2024
Goal-Setting Process and Achievement The Compensation Committee annually reviews the threshold, target, and maximum goals for each corporate performance measure in order to evaluate whether they remain rigorous and aligned with shareholder interests. Management presents recommendations to the Compensation Committee regarding the goals, but the Compensation Committee retains the ultimate decision-making authority to set the goals. AIP goals are designed to be challenging, but achievable, given the economic and market conditions at the time the goals are set, with achievement of the maximum goals designed to be difficult. Consistent with past practices, the 2024 AIP goals were set in February 2024. The following tables show the 2024 performance goals and achievement for each corporate performance measure and each named executive officer’s certified individual performance factor for 2024.
AIP Goals and Achievement — 2024
AIP Goals and Achievement — 2024
AIP Goals and Achievement — 2024
| | 2024 AIP Goals (%) | | | 2024 AIP Achievement (%) | | | Performance Measures | Threshold | Target | Maximum | Results | Weighted Payout % | | Adjusted ROE | 2.0% | 5.0% | 8.0% | 7.9% | 14.8% | | Written Premium Growth (millions) | 1,215 | 1,350 | 1,485 | 1,374.1 | 21.8% | | Net Adjusted Loss Ratio | 70.0% | 67.5% | 65.0% | 63.5% | 30.0% | | Underwriting Expense Ratio | 35.0% | 33.5% | 32.0% | 35.8% | 0.0% | | Core Earnings (millions) | 25 | 50 | 75 | 81.9 | 45.0% | | | | | | Achievement Level | 111.6% |
AIP Goals and Achievement — 2024
| Named Executive Officer | 2024 Individual Performance Factor (%) | | Kevin J. Leidwinger | 107% | | Eric J. Martin | 107% | | Julie A. Stephenson | 107% | | Steven D. Hernandez | 105% | | Sarah E. Madsen | 105% |
AIP Goals and Achievement — 2024
Individual Performance Factor Modifier Other than for Mr. Leidwinger, each participating named executive officer’s payout under the 2024 AIP was subject to an individual modifier (as described above) based on the Compensation Committee’s assessment of individual and business unit performance. The individual modifier may increase or decrease the named executive officer's payout under the 2024 AIP based on individual performance. In making its assessment, the Compensation Committee considered the recommendations of Mr. Leidwinger based on his review of the performance of each participating named executive offcer against the objectives established by the committee at the beginning of the year with respect to the individual performance factor. For 2024, the application of the individual performance factor was determined based on each participating named executive officer’s performance with respect to: •objective areas that directly impact the financial performance of the Company and align with goals of the Company; •achieving challenging but attainable levels of profitability; •effort, expertise, initiative, decision making, and commitment during the calendar year; and •the need to maintain compensation near market median levels in a competitive market for key talent. Similarly, Mr. Leidwinger’s 2024 AIP payout was also subject to an individual performance modifier which was determined and evaluated by the Board. The Board considered the same general factors used to evaluate AIP payout for all officers described above. Additionally, with respect to Mr. Leidwinger, the Board’s assessment of his individual performance factor was determined based on his performance of his 2024 CEO goals, which included: •enhancement of underwriting capabilities, including setting up an underwriting center model office; •evolve actuarial functions to improve reserving and pricing capabilities; •improve distribution management; •continued development of capital management and investor relations; •decisive execution of key strategic initiatives (including evolving the human resources function and leveraging technology to drive process efficiency) during 2024 to address Company performance; and •communication with the Board, staff, and improved collaboration and communication among key business unit leaders – particularly with underwriting, claims, and actuary departments. Payments to named executive officers under our AIP were made in March 2025 for performance during 2024 and are reported in the Summary Compensation Table — 2024 of this Proxy Statement under the Non-Equity Incentive Plan Compensation column. Long-Term Incentive Plan Design & Structure At the beginning of each year, the Compensation Committee grants equity awards based on its review of the competitive market and individual performance. Once the grant level is determined, the Compensation Committee allocates the grant to the then-serving executive officers to a mix of performance stock units (“PSUs”) and restricted stock units (“RSUs”), as summarized below. Beginning in 2024, the Compensation Committee eliminated stock option awards from the mix of annual equity awards granted to our named executive officers in order to better align with competitive market practice. The Company does not schedule its equity grants in anticipation of the release of material non-public information ("MNPI") nor does the Company time the release of MNPI based on equity grant dates.
AIP Goals and Achievement — 2024
| Grant Type | Allocation (%) | Vesting | | PSUs | 50 | “cliff” vest on the third anniversary of the grant date (assuming achievement of performance goals and continued employment) | | RSUs | 50 | ratable vest in three equal installments on the annual anniversary of the grant date (assuming continued employment) |
Grant Type Allocation
Grant Type Allocation PSUs — The PSUs are: • earned over a three-year performance period, subject to continued employment; • earned only to the extent that goals are achieved among five separate performance measures; and • settled in shares of Company Common Stock with vesting between 0% and 200% of the target award based upon the results achieved. RSUs — The RSUs vest in the three equal installments on the annual anniversary of the grant date and are settled into an equivalent number of shares of Company Common Stock, in each case, generally subject to the executive remaining employed by us through the vesting date. The purposes of the awards are to encourage shareholder alignment, long-term value creation and, by way of the three-year vesting schedule, executive retention. Beginning in 2024, the Compensation Committee determined to update the vesting schedule for RSUs to vest in three annual installments rather than cliff vesting on the third anniversary of the grant date, as they had done in prior years, in order to align with competitive market practice. Performance Measure Selection The 2024 PSU performance measures are core earnings (weighted at 30%), written premium growth (weighted at 20%), net adjusted loss ratio (weighted at 20%), underwriting expense ratio (weighted at 20%), and adjusted ROE (weighted at 10%). The Compensation Committee added core earnings as a performance measure for the 2024 PSUs because it removes volatile earnings impacts, allowing management to better assess and compare underlying Company profitability period over period. Please see the “Annual Incentive Plan” section above for a description of these metrics. These goals were selected because they are viewed as key indicators of our successful operation of our long-term operating plan. PSU performance goals are measured over a three-year performance period. Goal-Setting Process The Compensation Committee annually reviews the threshold, target, and maximum goals for each performance measure of the PSUs to evaluate whether they remain rigorous and aligned with shareholder interests. Management presents recommendations to the Compensation Committee regarding the goals, but the Compensation Committee retains the ultimate decision-making authority to set the goals. The performance goals established for the 2024 PSU grant were designed to be challenging, but achievable, given the economic and market conditions at the time the goals were set, with vesting at the maximum goal designed to be difficult. 2024 Grant The 2024 target award opportunities and allocation to each grant type for our participating named executive officers are summarized below. Mr. Hernandez's target award opportunity was established by the Compensation Committee in connection with the commencement of his employment and was based on his compensation from his prior employer and internal pay equity. Mr. Martin's target award opportunity was increased for 2024 in recognition of his success as Chief Financial Officer and to more closely align his total direct compensation with the competitive market.
LTIP Grant — 2024
LTIP Grant — 2024
LTIP Grant — 2024
| Named Executive Officer | Total Stock Award ($) | | PSUs ($) | | RSUs ($) | | | Kevin J. Leidwinger (1) | | 1,600,000 | | 800,000 | | 800,000 | | Eric J. Martin | | 500,940 | | 250,470 | | 250,470 | | Julie A. Stephenson | | 654,638 | | 327,319 | | 327,319 | | Steven D. Hernandez | | 231,000 | | 115,500 | | 115,500 | | Sarah E. Madsen | | 287,214 | | 143,607 | | 143,607 |
LTIP Grant — 2024
(1) Mr. Leidwinger's total stock award is inclusive of an additional LTIP award made to him in October of 2024 in order to correct his 2024 LTIP percentage amount. The Compensation Committee determined that the award to Mr. Leidwinger under the Company's 2024 LTIP was inadvertently set at an amount that was 50 percentage points less (as a percentage of his base salary) than the amount of his LTIP award for 2023. Consequently, the Committee approved an award to Mr. Leidwinger under the Company's 2024 LTIP (subject to the same vesting requirements and dates originally established thereunder) of an additional 9,095 RSUs and an additional 9,095 PSUs pursuant to, and in all respect subject to, the terms of the Company's 2024 LTIP for Mr. Leidwinger previously approved by the Committee and the Board. 2022 Grant The PSUs granted to the then-serving named executive officers in 2022 vested based on performance from January 1, 2022 through December 31, 2024 and service through the third anniversary of the grant date. Based on performance against the pre-established performance goals, the 2022 PSUs vested at 0.0% of target. Pursuant to the terms of his Executive Employment Offer Letter, the minimum achievement level for Mr. Leidwinger’s 2022 PSU award was equal to the target amount.
LTIP Grant — 2024
| | 2022 PSU Goals | | | 2022 PSU Achievement (%) | | | Performance Measures | Threshold | Target | Maximum | Results | Weighted Payout % | | Adjusted ROE (Three-Year Average) | 3% | 5% | 7% | 2.1% | 0% | | GAAP Combined Ratio (Three-Year Average) | 102% | 99% | 96% | 103.3% | 0% | | | | | | Achievement Level | 0% |
LTIP Grant — 2024
Additional Compensation Hernandez Appointment Pursuant to the terms of Mr. Hernandez's employment, in order to compensate him for equity compensation that he forfeited upon separating from his prior employer, Mr. Hernandez was granted an RSU award with respect to 16,995 shares, which will vest with respect to 7,356 shares on May 15, 2025, and with respect to 9,639 shares on May 15, 2026. In addition, Mr. Hernandez was paid a sign-on bonus in the amount of $128,000. Company-Sponsored Benefit Plans We believe the insurance and retirement benefit plans we sponsor are an important part of fair and reasonable compensation for all of our employees, including our named executive officers. We design these benefit plans to attract and retain a strong employee base, to provide a measure of financial security for our employees and to assist our employees in providing for their own financial security in a manner that recognizes individual needs and preferences. We also provide these programs because we believe that employees who have a plan for health and financial security are better employees. We apply these programs equally to all employees. Our benefit plans consist of an insurance plan that provides health, vision, dental, disability and basic term life insurance coverage and various retirement plans, including a defined-benefit pension plan and a 401(k) plan with a Company match. The pension plan is discussed further under "Pension Benefits" below. Nonqualified Deferred Compensation The United Fire & Casualty Company Supplemental Retirement & Deferral Plan (the “NQDC”) is a non-qualified deferred compensation plan made available to management, including our named executive officers, pursuant to which they may elect to defer a portion of their salary, of which the contribution and earnings are immediately vested at 100%. Notional interest is credited to each participant’s deferred account which will be distributed in predetermined installments commencing upon his or her separation from service or paid in a lump sum upon his or her death or a termination of employment upon a change in control of the Company. The NQDC is discussed further under “Nonqualified Deferred Compensation” below. Perquisites We do not rely upon perquisites as a method of providing significant compensation to any of our employees, preferring instead to use direct compensation and incentive plans. We provide only those perquisites that are related to our business or that we believe are necessary to attract and retain key executive personnel. For 2024, we paid country club dues for certain of our named executive officers so they have a club available for business entertainment on our behalf. Perquisites and other personal benefits paid to a named executive officer are reported in the All Other Compensation column of the Summary Compensation Table — 2024. We expect our other named executive officers to use our corporate aircraft for business travel whenever it is reasonable to do so. Occasionally, a spouse or other guest may accompany executive officers on corporate aircraft when the aircraft is already scheduled for business purposes and can accommodate additional passengers. In those cases, there is no aggregate incremental cost to the Company. In addition, we permit Mr. Leidwinger to use our corporate aircraft for personal travel, and under limited circumstances, directors and other executive officers may be permitted to use the aircraft for personal travel as well.
Named Executive Officers as Shareholders
(1) Equity ownership targets for Mr. Leidwinger as a Tier 4 executive were calculated as the number of shares equal to five times his base salary (increased from four times his base salary). Equity ownership targets for Mr. Martin and Ms. Stephenson as Tier 3 executives were calculated as the number of shares equal to three times base salary (increased from one and one-half times base salary). Equity ownership targets for Mr. Hernandez and Ms. Madsen as Tier 2 executives were calculated as the number of shares equal to one and a half times base salary. The minimum target ownership for each executive officer is determined annually using the executive officer's annual base salary as of March 31 of the applicable year (each such date, a "Measurement Date") and (i) the average daily closing price per share of the Company's Common Stock for the month ending on the Measurement Date or (ii) any other price per share of the Company's Common Stock that the Nominating & Governance Committee deems appropriate. (2) Stock that counts towards satisfaction of the stock ownership guidelines includes: (i) shares owned outright by the executive officer or their immediate family members residing in the same household; (ii) RSUs and restructured stock units issued and held by the executive officer (whether vested or unvested); (iii) shares subject to PSUs that have vested and settled in shares, and shares owned through a 401(k) account; and (iv) shares acquired upon stock option exercises that the executive officer continues to hold. Shares subject to unvested PSUs and unexercised options, whether or not vested, do not count towards determining compliance. The target number of shares is the number of shares to be held by the named executive officer within five years of becoming subject to the Executive Officer Stock Ownership Guidelines.
2024 Summary Compensation Table
2024 Summary Compensation Table
Summary Compensation Table — 2024
Summary Compensation Table — 2024
Summary Compensation Table — 2024
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Non- qualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | Kevin J. Leidwinger President/Chief Executive Officer | 2024 | 787,500 | — | 1,561,248 | — | 1,194,120 | 15,810 | 43,538 | 3,602,216 | | | 2023 | 750,000 | 309,540 | 1,125,011 | 374,998 | 159,460 | — | 31,288 | 2,750,297 | | | 2022 | 257,813 | 336,563 | 818,210 | 100,942 | — | — | 38,317 | 1,551,845 | | Eric J. Martin EVP/Chief Financial Officer | 2024 | 496,705 | 20,000 | 500,932 | — | 444,844 | 14,278 | 20,444 | 1,497,203 | | | 2023 | 484,000 | 147,759 | 272,260 | 90,746 | 70,967 | 32,222 | 18,699 | 1,116,653 | | | 2022 | 326,563 | 250,000 | 496,096 | 66,799 | — | — | 15,472 | 1,154,930 | | Julie A. Stephenson EVP/Chief Operating Officer | 2024 | 590,094 | — | 654,642 | — | 775,107 | 15,267 | 24,645 | 2,059,755 | | | 2023 | 520,549 | 617,564 | 1,525,818 | 145,247 | 123,654 | — | 234,293 | 3,167,125 | | Steven D. Hernandez SVP/Chief Human Resources Officer | 2024 | 235,278 | 128,000 | 626,980 | — | 137,849 | — | 8,983 | 1,137,090 | | Sarah E. Madsen SVP/Chief Legal Officer | 2024 | 379,713 | — | 287,234 | — | 333,710 | 11,607 | 11,500 | 1,023,764 |
Summary Compensation Table — 2024
(1) The amount reported in this column for Mr. Hernandez for 2024 includes a $128,000 sign-on bonus granted to him in connection with the commencement of his employment representing four months of his foregone bonus and dividends. The amount reported in this column for Mr. Martin for 2024 represents a retention bonus of $20,000, payment of which was subject to his continued employment through April 1, 2024. (2) Amounts in this column represent the aggregate grant date fair value for PSUs and RSUs, as applicable, granted during 2024, 2023 and 2022. Amounts in this column are calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The grant date fair value for stock awards is measured based on the closing price of our Company Common Stock on the grant date, and the probable satisfaction of the performance conditions for the PSU awards as of the date of grant. Assuming the highest level of performance is achieved for the 2024 PSUs, the maximum value of amounts in this column at the grant date would be as follows: Mr. Leidwinger, $1,561,254; Mr. Martin, $500,940; Ms. Stephenson, $654,638; Mr. Hernandez, $117,639; and Ms. Madsen, $287,213 The values shown have not been adjusted to reflect that these units are subject to forfeiture. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K for the year ended December 31, 2024. (3) Amounts in this column represent the aggregate grant date fair value for options granted during 2023 and 2022. Amounts in this column are calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K for the year ended December 31, 2024. (4) All employees are eligible to participate in our annual performance-based cash award plan if they are in our employ at the time the cash awards for that year are paid. The amounts shown in this column are those amounts earned by the executive for the year shown. These amounts were determined and paid in the subsequent year. For example, any non-equity incentive plan awards shown for 2024 were earned in 2024 but determined and paid in 2025. (5) The 2024 amount in this column reflects the change in pension value under the United Pension Plan that is described further in the "Pension Benefits" section and above market earnings under the Company’s nonqualified deferred compensation plan. There were no above market deferred compensation earnings for any named executive officers in 2024. (6) All Other Compensation for 2024 includes:
Summary Compensation Table — 2024
| Name | Matching Contributions to 401(k) Plan ($) | | Perquisites and Other Personal Benefits ($) (1) | | Tax Reimbursement ($) | | Total ($) | | | Kevin J. Leidwinger | | 11,500 | | 32,038 | | — | | 43,538 | | Eric J. Martin | | 11,500 | | 8,944 | | — | | 20,444 | | Julie A. Stephenson | | 11,500 | | 13,145 | | — | | 24,645 | | Steven D. Hernandez | | 8,983 | | — | | — | | 8,983 | | Sarah E. Madsen | | 11,500 | | — | | — | | 11,500 |
Summary Compensation Table — 2024
(1)For Mr. Leidwinger, the amount shown for perquisites and other personal benefits consists of country club dues paid on his behalf and the incremental costs associated with his personal use of corporate aircraft. For Mr. Martin, the amount shown for perquisites and other personal benefits consists of country club dues paid on his behalf. For Ms. Stephenson, the amount shown for perquisites and other personal benefits consists of country club dues paid on her behalf and costs associated with her personal use of corporate aircraft.
2024 Grants of Plan-Based Awards
2024 Grants of Plan-Based Awards The following table details the grants of plan-based awards to our named executive officers in 2024 under the AIP and the United Fire Group, Inc. 2021 Stock and Incentive Plan, as applicable.
2024 Grants of Plan-Based Awards
| | | Estimated Future Payouts under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of shares of stock or units (#) | All Other Option Awards: Number of securities underlying options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | Name | Grant Date | Threshold ($)(1) | Target ($)(2) | Maximum ($)(3) | Threshold (#)(4) | Target (#) | Maximum (#) | | | | | | Kevin J. Leidwinger | 3/20/2024 (6) | — | — | — | 2,729 | 27,285 | 54,570 | — | — | — | 599,997 | | | 3/20/2024 (7) | — | — | — | — | — | — | 27,285 | — | — | 599,997 | | | —(8) | 100,000 | 1,000,000 | 1,500,000 | — | — | — | — | — | — | — | | | 10/29/2024 (9) | — | — | — | 910 | 9,095 | 18,190 | — | — | — | 180,627 | | | 10/29/2024 (10) | — | — | — | — | — | — | 9,095 | — | — | 180,627 | | Eric J. Martin | 3/20/2024(6) | — | — | — | 1,139 | 11,390 | 22,780 | — | — | — | 250,466 | | | 3/20/2024 (7) | — | — | — | — | — | — | 11,390 | — | — | 250,466 | | | —(8) | 37,571 | 375,705 | 563,558 | — | — | — | — | — | — | — | | Julie A. Stephenson | 3/20/2024 (6) | — | — | — | 1,489 | 14,885 | 29,770 | — | — | — | 327,321 | | | 3/20/2024 (7) | — | — | — | — | — | — | 14,885 | — | — | 327,321 | | | —(8) | 65,464 | 654,638 | 981,956 | — | — | — | — | — | — | — | | Steven D. Hernandez | 5/15/2024 (6) | — | — | — | 496 | 4,957 | 9,914 | — | — | — | 115,498 | | | 5/15/2024 (7) | — | — | — | — | — | — | 4,957 | — | — | 115,498 | | | 5/15/2024(11) | — | — | — | — | — | — | 16,995 | — | — | 395,984 | | | —(8) | 19,250 | 192,500 | 288,750 | — | — | — | — | — | — | — | | Sarah E. Madsen | 3/20/2024 (6) | — | — | — | 653 | 6,531 | 13,062 | — | — | — | 143,617 | | | 3/20/2024 (7) | — | — | — | — | — | — | 6,531 | — | — | 143,617 | | | —(8) | 28,721 | 287,213 | 430,819 | — | — | — | — | — | — | — |
2024 Grants of Plan-Based Awards
(1) We estimate the amounts shown in this column by assuming the achievement of the threshold level for the least-weighted performance measure used in our AIP and by multiplying 2024 base salary by 12.50% for Mr. Leidwinger; 7.50% for Mr. Martin; 11.00% for Ms. Stephenson; 5.00% for Mr. Hernandez; and 7.50% for Ms. Madsen. (2) We estimate the amounts shown in this column by assuming the achievement of target levels for all applicable performance measures used in our AIP and by multiplying 2024 base salary by 125% for Mr. Leidwinger; 75% for Mr. Martin; 110% for Ms. Stephenson; 50% for Mr. Hernandez; and 75% for Ms. Madsen. (3) We estimate the amounts shown in this column by assuming the achievement of maximum levels for all applicable performance measures used in our AIP and by multiplying 2024 base salary by 187.5% for Mr. Leidwinger; 112.5% for Mr. Martin; 165% for Ms. Stephenson; 75% for Mr. Hernandez; and 112.5% for Ms. Madsen. (4) We estimate the amounts shown in this column by assuming the achievement of the threshold level for only the lowest weighted performance measure under our 2024 PSUs. (5) Amounts in this column represent the aggregate grant date fair value for RSUs and PSUs granted during 2024, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation. The grant date fair value for RSU and PSU awards is measured based on the closing price of our Company Common Stock on the grant date and the probable satisfaction of the performance conditions for the PSU awards as of the date of grant. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K for the year ended December 31, 2024. (6) Represents PSUs that are scheduled to vest on the third anniversary of the grant date only if and to the extent the Company achieves performance goals relating to Core Earnings, Written Premium Growth, Net Loss Ratio, Underwriting Expense Ratio, and Adjusted ROE over the 2024-2026 performance period. (7) Represents a grant of RSUs that are scheduled to vest in three equal installments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment through each such vesting date. (8) There is no specific grant date for awards under our AIP. We paid awards based on our 2024 performance during the first quarter of 2025. Please see Compensation Discussion and Analysis in this Proxy Statement for further information regarding the AIP. Actual amounts paid to each named executive officer under our AIP for 2024 are shown in the Summary Compensation Table — 2024 in this Proxy Statement and were calculated based on each individual’s base salary for 2024. (9) These PSUs granted October 29, 2024, will vest on October 29, 2027, and are reported assuming target achievement. These additional PSUs were approved by the Board of Directors due to an inadvertent oversight that Mr. Leidwinger's long term incentive plan award for 2024 was inadvertently set in March 2024 at an amount that was 50 percentage points less (as a percentage of his base salary) than his long term incentive plan award for 2023, which was not the intention of the Board of Directors. The grant date fair value for these RSU and PSU awards is measured based on the closing price of our Company Common Stock on the grant date and the probable satisfaction of the performance conditions for the PSU awards as of the grant date. (10) These RSUs vest in three equal installments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment through each such vesting date. These additional RSUs were approved by the Board of Directors due to an inadvertent oversight that resulted in Mr. Leidwinger's long-term incentive plan award for 2024 being set at an amount that was 50 percentage points less (as a percentage of his base salary) than his long term incentive plan award for 2023, which was not the intention of the Board of Directors. (11)The RSUs represent a replacement equity award granted to Mr. Hernandez in connection with the commencement of his employment to replace equity awards forfeited at his previous employer, which will vest with respect to 7,356 shares on May 15, 2025 and will vest with respect to 9,639 shares on May 15, 2026.
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End The following table details the outstanding equity awards held by each of our named executive officers as of December 31, 2024.
Outstanding Equity Awards at 2024 Fiscal Year-End
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | 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 Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Kevin J. Leidwinger | 8/22/2022(2) | 6,490 | 3,246 | 29.45 | 8/22/2032 | — | — | — | — | | | 8/22/2022(3) | — | — | — | — | — | — | 6,855 | 195,025 | | | 8/22/2022(4) | — | — | — | — | 3,428 | 97,527 | — | — | | | 2/24/2023(2) | 11,215 | 22,431 | 28.39 | 2/24/2033 | — | — | — | — | | | 2/24/2023(5) | — | — | — | — | — | — | 26,418 | 751,592 | | | 2/24/2023(4) | — | — | — | — | 13,209 | 375,796 | — | — | | | 3/20/2024(6) | — | — | — | — | — | | 27,285 | 776,258 | | | 3/20/2024(7) | — | — | — | — | 27,285 | 776,258 | — | — | | | 10/29/2024(8) | — | — | — | — | — | | 9,095 | 258,753 | | | 10/29/2024(9) | — | — | — | — | 9,095 | 258,753 | — | — | | Eric J. Martin | 4/18/2022(2) | 4,086 | 2,044 | 29.57 | 4/18/2032 | — | — | — | — | | | 4/18/2022(10) | — | — | — | — | 0 | — | 4,518 | 128,537 | | | 4/18/2022(4) | — | — | — | — | 2,259 | 64,269 | — | — | | | 2/24/2023(2) | 2,714 | 5,428 | 28.39 | 2/24/2033 | — | — | — | — | | | 2/24/2023(5) | — | — | — | — | — | — | 6,393 | 181,881 | | | 2/24/2023(4) | — | — | — | — | 3,197 | 90,955 | — | — | | | 3/20/2024(6) | — | — | — | — | — | — | 11,390 | 324,046 | | | 3/20/2024(7) | — | — | — | — | 11,390 | 324,046 | — | — | | Julie A. Stephenson | 1/30/2023(11) | — | — | — | — | 17,835 | 507,406 | — | — | | | 2/24/2023(2) | 4,344 | 8,688 | 28.39 | 2/24/2033 | — | — | — | — | | | 2/24/2023(5) | — | — | — | — | — | — | 10,232 | 291,100 | | | 2/24/2023(4) | — | — | — | — | 5,116 | 145,550 | | — | | | 3/20/2024(6) | — | — | — | — | — | — | 14,885 | 423,478 | | | 3/20/2024(7) | — | — | — | — | 14,885 | 423,478 | — | — | | Steven D. Hernandez | 5/15/2024(3) | — | — | — | — | — | — | 4,957 | 141,027 | | | 5/15/2024(4) | — | — | — | — | 4,957 | 141,027 | | — | | | 5/15/2024(12) | — | — | — | — | 16,995 | 483,508 | — | — | | Sarah E. Madsen…… | 2/18/2022(2) | 1,497 | 749 | 29.51 | 2/18/2032 | — | — | — | — | | | 2/18/2022(13) | — | — | — | — | 1,588 | 45,179 | — | — | | | 2/18/2022(4) | — | — | — | — | 794 | 22,589 | — | — | | | 2/24/2023(2) | 1,660 | 3,320 | 28.39 | 2/24/2033 | — | — | — | — | | | 2/24/2023(5) | — | — | — | — | — | — | 3,910 | 111,240 | | | 2/24/2023(4) | — | — | — | — | 1,955 | 55,620 | — | — | | | 3/20/2024(6) | — | — | — | — | — | — | 6,531 | 185,807 | | | 3/20/2024(7) | — | — | — | — | 6,531 | 185,807 | — | — |
Outstanding Equity Awards at 2024 Fiscal Year-End
(1) The market value of shares or units of stock that have not vested reflects a stock price of $28.45, our closing stock price on December 31, 2024, the last trading day of 2024. (2) These options vest in three equal installments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment through each such vesting date. (3) These PSUs granted on August 22, 2022, will vest on August 22, 2025, and have a guaranteed minimum vesting level equal to target per the terms of the awards. (4) These RSUs cliff vest on the third anniversary of the grant date, subject to the named executive officer’s continued employment through such vesting date. (5) These PSUs granted on February 24, 2023, will vest on February 24, 2026, and are reported assuming target achievement. (6) These RSUs vest in three equal installments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment through each such vesting date. (7) These PSUs granted on March 20, 2024, will vest on March 20, 2027, and are reported assuming target achievement. (8) These RSUs vest in three equal installments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment through each such vesting date. These additional RSUs were approved by the Board of Directors due to an inadvertent oversight that Mr. Leidwinger's long term incentive plan award for 2024 was inadvertently set in March 2024 at an amount that was 50 percentage points less (as a percentage of his base salary) than his long term incentive plan award for 2023, which was not the intention of the Board of Directors. (9) These PSUs granted October 29, 2024, will vest on October 29, 2027, and are reported assuming target achievement. These additional PSUs were approved by the Board of Directors due to an inadvertent oversight that Mr. Leidwinger's long term incentive plan award for 2024 was inadvertently set in March 2024 at an amount that was 50 percentage points less (as a percentage of his base salary) than his long term incentive plan award for 2023, which was not the intention of the Board of Directors. (10)These PSUs granted on April 18, 2022, will vest on April 18, 2025, and are reported assuming target achievement. These RSUs vested with respect to 17,835 shares on March 31, 2025. (11)These RSUs vested with respect to 17,835 shares on March 31, 2025. (12) These RSUs represent a replacement equity award granted to Mr. Hernandez in connection with the commencement of his employment to replace equity awards forfeited at his previous employer, which will vest with respect to 7,356 shares on May 15, 2025 and will vest with respect to 9,639 shares on May 15, 2026. (13)These PSUs granted February 18, 2022, vested on February 18, 2025, and are reported assuming target achievement.
2024 Option Exercises and Stock Award Vesting
2024 Option Exercises and Stock Award Vesting The following table represents the number and value of shares acquired by our named executive officers through the exercise of options and vesting of stock awards during fiscal year 2024.
2024 Option Exercises and Stock Award Vesting
| | Option Awards | | | | Stock Awards | | | | | Name | Number of Shares Acquired Upon Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) | | | Kevin J. Leidwinger | | — | | — | | 5,833 | | 165,949 | | Eric J. Martin | | — | | — | | 4,000 | | 88,120 | | Julie A. Stephenson | | — | | — | | 9,234 | | 201,024 | | Steven D. Hernandez | | — | | — | | — | | — | | Sarah E. Madsen | | — | | — | | 68 | | 1,654 |
Pension Benefits
Pension Benefits All our employees who are 21 years of age and older automatically participate in our defined-benefit pension plan after completing one year of employment and 1,000 hours of service. When eligibility criteria are met, the employee participates in the plan on the next January 1 or July 1. Employees become 100% vested in the plan after completing three years of service. Effective July 1, 2021, the Company amended the defined-benefit pension plan to convert it from a traditional pension plan with a benefits formula based on annual compensation and years of service to a “cash balance” defined-benefit plan. Participants retained all benefits previously accrued under the traditional pension benefit formula. Prior to July 1, 2021, plan benefits equaled 1.25% of an employee’s five-year average annual compensation, plus 0.5% of average annual compensation in excess of covered compensation, multiplied by the lesser of years of service or 35 years. Effective July 1, 2021, plan benefits equal 4.0%-7.0% of the participant’s annual compensation for the plan year plus 2.0%-3.5% of the participant’s compensation in excess of covered compensation, in each case, depending on the participant’s years of service. Participants are credited with interest on their balances under the plan at the greater of 2% or the discount rate on the yield of 30-year Treasury securities. Covered compensation is determined by reference to the Social Security taxable wage base. Average annual compensation means annual compensation, averaged over the period of five consecutive years of service that produces the highest average. The pension plan uses only salary to determine the average annual compensation. Under federal law, for 2024 the maximum compensation that could be considered for determining benefits was $345,000. The normal form of payment under the pension plan is a joint and 50% survivor annuity for a participant who is married on the annuity starting date and a life annuity for a participant who is unmarried on the annuity starting date. Participants may elect to receive a monthly pension over the participant’s life or a term of up to 20 years or, if the actuarial equivalent of the annuity is $50,000 or less, in the form of a lump sum cash payment. The amount of monthly pension benefits varies depending upon the form of payment elected by the participant, but the payments are in each case the actuarial equivalent of the normal form of payment. Distributions will be in the form of a lump-sum cash payment for vested participant balances of $50,000 or less. Assets of the pension plan belong to the Company and are not taxable to the employee until paid as a benefit. Such assets are subject to a substantial risk of forfeiture until vested by the employee. Normal retirement age under the pension plan is 65, which is the earliest time a participant may retire under the pension plan without any benefit reduction due to age. The earliest age a participant may retire under the plan and still receive benefits is age 55. Participants electing early retirement with at least 20 years of service receive a reduction in benefits of 6% for each year the participant retires after age 55 and before age 60, and a reduction in benefits of 4% for each year the participant retires after age 60 and before age 65. If a participant elects early retirement with less than 20 years of service to us, then the participant’s reduction in benefits is based on an actuarial calculation. None of our named executive officers are currently eligible for early retirement under our pension plan. The following table reports the present value of the annual defined benefit payable for each named executive officer under our pension plan. The present value is based on the retirement benefit formula for the compensation levels and years of service of those officers. As of December 31, 2024, Mr. Leidwinger, Ms. Stephenson, and Mr. Hernandez had not yet satisfied the service requirements to fully vest in the pension plan.
Pension Benefits — 2024
Pension Benefits — 2024
Pension Benefits — 2024
| Name | Plan Name | Number of Years of Credited Service (#) | | Present Value of Accumulated Benefits ($) | | Payments During Last Fiscal Year ($) | | | Kevin J. Leidwinger | United Pension Plan | | 1 | | 15,810 | | — | | Eric J. Martin | United Pension Plan | | 2 | | 29,251 | | — | | Julie A. Stephenson | United Pension Plan | | 1 | | 15,267 | | — | | Steven D. Hernandez | United Pension Plan | | — | | — | | — | | Sarah E. Madsen | United Pension Plan | | 7 | | 96,400 | | — |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The NQDC is a non-qualified deferred compensation plan made available to management, including our named executive officers. Employees participating in the NQDC may elect to defer a portion of their salary, of which the contribution and earnings are immediately vested at 100%. Notional interest is credited to each participant’s deferred account which will be distributed in predetermined installments commencing upon his or her separation from service or paid in a lump sum upon his or her death or a termination of employment upon a change in control of the Company. Participant deferrals are 100% vested immediately. If the executive officer dies or becomes disabled while employed by us, we will pay the plan benefits as directed by that executive officer. The NQDC allows participants to utilize in-service distributions to satisfy short-term savings goals. Participants can create these in-service payable accounts at the time of initial enrollment or at re-enrollment. The amounts deferred are subject to our creditors. The following table provides information about the participation by each of our named executive officers in the NQDC.
Nonqualified Deferred Compensation — 2024
Nonqualified Deferred Compensation — 2024
Nonqualified Deferred Compensation — 2024
| Name | Executive Contributions in Last FY ($) (1) | | Registrant Contributions in Last FY ($) (2) | | Aggregate Earnings in Last FY ($) (3) | | Aggregate Withdrawals/Distributions ($) | | Aggregate Balance at Last FYE ($) (4) | | | Kevin J. Leidwinger | | | | | | | | | | | | NQDC | | 56,630 | | — | | 6,097 | | — | | 111,539 | | Eric J. Martin | | | | | | | | | | | | NQDC | | 120,214 | | — | | 13,249 | | — | | 186,998 | | Julie A. Stephenson | | | | | | | | | | | | NQDC | | 104,916 | | — | | 6,722 | | — | | 145,389 |
Nonqualified Deferred Compensation — 2024
| Name | Executive Contributions in Last FY ($) (1) | | Registrant Contributions in Last FY ($) (2) | | Aggregate Earnings in Last FY ($) (3) | | Aggregate Withdrawals/Distributions ($) | | Aggregate Balance at Last FYE ($) (4) | | | Steven D. Hernandez | | | | | | | | | | | | NQDC | | — | | — | | — | | — | | — | | Sarah E. Madsen | | | | | | | | | | | | NQDC | | 115,773 | | — | | 54,812 | | — | | 385,007 |
Nonqualified Deferred Compensation — 2024
(1) All amounts reported in this column were reported as part of either “Base Salary” or “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table — 2024 in this Proxy Statement. (2) The amounts reported in this column do not include any above-market earnings. (3) Amounts in this column include the following amounts that were previously reported in the Summary Compensation Table as compensation for 2023 and 2022, respectively: Mr. Leidwinger — $45,000, $0; Mr. Martin — $48,400, $0; and Ms. Stephenson — $31,625, $0.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Change in Control Severance Agreements The Company has entered into Change in Control Severance Agreements with each of the named executive officers with the exception of Mr. Hernandez. These agreements, among other things, provide for: (1) an 18-month non-competition agreement and (2) in the event of both a change in control and termination of employment by the Company without cause or by the named executive officer for good reason: (a) a severance benefit payable to the named executive officer in an amount equal to 1.5 times the sum of his or her highest annual base salary in effect during the 12-month period prior to his or her termination date plus his or her target annual incentive compensation (or, if higher, the average of the annual bonuses earned by the named executive officer in respect of the three fiscal years of the Company immediately preceding the fiscal year in which the change in control occurs); (b) the continuation of certain insurance benefits for a period of 18 months; (c) the full vesting of each long-term incentive award held by the named executive officer, with any performance measures deemed satisfied at the target level; and (d) certain outplacement benefits. The Compensation Committee believes that these agreements help accomplish the Company’s compensation objectives of attracting and retaining superior talent through competitive compensation. The Compensation Committee also believes that it is appropriate to provide our named executive officers with the protections afforded by these agreements and that these agreements promote management independence and help retain and focus the named executive officers in the event of a change in control. Upon termination of employment for any reason, our named executive officers will also receive compensation and benefits pursuant to our pension plan and deferred compensation plans. Such plans and arrangements do not discriminate in scope, terms, or operation in favor of our named executive officers. Our named executive officers are vested in the benefits available under these plans, and therefore do not receive any enhanced benefit as a result of any termination or change in control. Stephenson Severance Benefit Agreement In addition to her Change in Control Severance Agreement, Ms. Stephenson was also a party to the Severance Benefit Agreement, which provides that, if Ms. Stephenson’s employment was terminated by the Company without cause (as defined in the Severance Benefit Agreement) prior to January 30, 2025, then, subject to her execution and non-revocation of a release of claims, she would have been entitled to (i) a cash payment equal to the sum of (A) her annual base salary, plus (B) her target bonus under the AIP, payable, in the Company’s discretion, as a lump sum or in equal installments over a one-year period ($1,207,500); (ii) reimbursement of the cost of continued health insurance benefits for Ms. Stephenson and her family for a period of 18 months ($26,549); and (iii) a pro-rated bonus under the AIP for the year in which the termination occurs, based on actual performance ($353,972). The information in the following tables describes the compensation that would be payable under specific circumstances if our named executive officers’ employment had terminated on December 31, 2024:
Potential Payments Upon Termination or Change In Control — 2024
Potential Payments Upon Termination or Change In Control — 2024
Potential Payments Upon Termination or Change In Control — 2024
| Name | Death or Retirement ($)(2) | | Disability ($) | | Change in Control ($)(3) | | Termination for Cause ($) | | Change in Control With Termination ($)(4) | | | Kevin J. Leidwinger | | 4,491,980 | | 3,491,980 | | 3,491,980 | | — | | 7,726,958 | | Eric J. Martin | | 1,489,926 | | 1,114,221 | | 1,114,221 | | — | | 3,036,429 | | Julie A. Stephenson(1) | | 2,385,016 | | 1,789,892 | | 1,789,892 | | — | | 3,710,020 | | Steven D. Hernandez(5) | | 958,061 | | 765,561 | | 765,561 | | — | | 1,659,437 | | Sarah E. Madsen | | 893,752 | | 606,540 | | 606,540 | | — | | 1,945,559 |
Potential Payments Upon Termination or Change In Control — 2024
(1) Please see “Stephenson Severance Benefit Agreement” above for a description and quantification of severance benefits that would be payable to Ms. Stephenson in the event she was terminated by the Company without cause prior to January 30, 2025. (2) As of December 31, 2024, none of the named executive officers have achieved normal retirement age under our benefit plans. The figures in this column assume the accelerated vesting by the Board of Directors of all unvested stock options, RSUs and PSUs, as applicable. For the purposes of this table, we have assumed accelerated vesting of the PSUs at target. (3) Under their existing Change in Control Severance Agreements, the named executive officers are entitled to payment only if their employment is terminated by any reason other than a Nonqualifying Termination. Nonqualifying Termination is defined to include (a) by the Company for cause, (b) by the named executive officer for reason other than a good reason, (c) the named executive officer’s death, and (d) by the Company due to the executive’s absence from the executive’s duties with the Company on a full-time basis for a period of 180 consecutive days as a result of the executive’s incapacity due to physical or mental illness. The figures in this column assume the accelerated vesting by the Board of Directors of all unvested stock options, RSUs and PSUs, as applicable and based on target performance with respect to the PSUs. (4) Per their existing Change in Control Severance Agreements, the amounts reported in this column as separation compensation for the named executive officers equal the sum of (i) 1.5 times the sum of the executive’s highest annual base salary and target annual incentive compensation (or, if higher, the average of the annual bonuses earned by the named executive officer in respect of the three fiscal years of the Company immediately preceding the fiscal year in which the change in control occurs), (ii) the named executive officer’s target annual bonus, prorated based on the termination date, and (iii) the value attributable to the accelerated vesting of all unvested stock options, RSUs and PSUs, as applicable. (5) Under the terms of the existing Change in Control Severance Agreements for the named executive officers, if the payments and benefits they are entitled to receive under these agreements would result in the payment of the excise tax imposed by Section 4999 of the Internal Revenue Code, then their payments and benefits may be subject to reduction. Under their agreements, change in control payments and benefits are reduced by the minimum amount necessary to avoid federal excise tax, if the reduction would result in the named executive officers receiving a higher net after-tax amount. The amounts in this column do not reflect the application of any reduction in payment or benefit according to the terms of the Change in Control Severance Agreements. (6) While Mr. Hernandez does not have a Change in Control Severance Agreement, values are included for death, disability and change in control as if such agreement were in place. In general, we do not make a payment to a participant in our AIP for a particular year unless the participant is employed by us on the date incentive payments are made, typically in March of the following year. In the case of death or retirement, and at the discretion of our Chairperson of the Board and our Chief Executive Officer, we will pay an AIP payment to a participant prorated to the date of death or retirement. Amounts shown for death and retirement assume our Chairperson of the Board and our Chief Executive Officer exercised their discretion to make the payment. The Change in Control Severance Agreements in place for named executive officers state that in the event of a termination of employment by the Company without cause or by the named executive officer for good reason, they will be paid an amount equal to their target payment under our AIP for the year in which the termination occurs, prorated to the date of termination. In this case, termination is presumed to occur on December 31, 2024. Upon termination of employment due to death or retirement, the Board of Directors may, at its discretion, accelerate the vesting of any unvested option awards. In addition, under the terms of the option award agreements, the vesting of unvested stock options will accelerate upon a change in control. Amounts shown are calculated using the fair market value of the stock underlying in-the-money options that would have become exercisable on December 31, 2024, assuming that the Board of Directors accelerated the vesting of all unvested options. Upon termination of employment due to death, retirement or disability or a change in control not involving termination, the Board of Directors may, at its discretion, accelerate the vesting of any unvested RSU or PSU awards. Amounts shown assume a voluntary acceleration of vesting by the Board of Directors, with PSUs assumed to be accelerated at target. The Change in Control Severance Agreements for the named executive officers provide for the continuation of medical, accident, disability, and life insurance benefits with respect to the named executive officer and his/her dependents for a period of 18 months following a change in control at substantially the same level that existed immediately prior to the change in control. The amounts shown for the named executive officers reflect the cost of these benefits as they existed on December 31, 2024. The Change in Control Severance Agreements for the named executive officers provide for outplacement services for a period of 12 months following a change in control. The cost to the Company of these outplacement services is capped for each executive at $15,000.
Pay Ratio Disclosure
Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Kevin J. Leidwinger, our President and Chief Executive Officer as of December 31, 2024. The median of the annual total compensation of all our employees, excluding Kevin J. Leidwinger, was $100,838 in 2024, calculated in accordance with the Summary Compensation Table rules. To identify the median employee, we compiled total cash compensation identified in our payroll records, excluding equity awards, for all full-time, part-time, temporary and seasonal employees employed as of December 31, 2024. We selected total cash compensation as it reflects the principal form of compensation delivered to all our employees. Further, we annualized cash compensation (other than bonus awards) for permanent full- and part-time employees who were not employed for all of 2024. The annual total compensation of Kevin J. Leidwinger for the purpose of this disclosure is $3,602,216. Based on this information, for 2024 the ratio of the annual total compensation of Mr. Leidwinger, our President and Chief Executive Officer, to the median of the annual total compensation of all employees is estimated to be 35.7 to 1.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
Pay Versus Performance Table
Pay Versus Performance Table As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the fiscal years ended December 31, 2024, 2023, 2022, 2021, and 2020. In determining the “compensation actually paid” (CAP) to our named executive officers ("NEOs"), SEC rules require us to make various adjustments to amounts reported in the Summary Compensation Table because the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. The table below summarizes compensation values reported in our Summary Compensation Table, as well as the adjusted values required in this section by SEC rules. As identified in the footnotes to the table, the determination of CAP includes adjustments to reflect, among other things, period-to-period changes in the accounting value of unvested equity awards. Accordingly, such amounts do not reflect the value of compensation actually delivered to or received in the period reported in the table.
Pay Versus Performance Table
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (j) | (k) | (j) | (k) | | | | | | | | | Value of Initial Fixed $100 Investment Based on: (4) | | | | | Year (1) | Summary Compensation Table Total for Current PEO ($)(2) | Summary Compensation Table Total for Former PEO ($)(2) | Compensation Actually Paid to Current PEO ($)(3) | Compensation Actually Paid to Former PEO ($)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(3) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(5) | Net Income ($000s) | Adjusted ROE (%)(6) | | 2024 | $3,602,216 | N/A | $4,998,453 | N/A | $1,429,453 | $1,820,377 | $72.60 | $152.77 | $31,442 | 7.9% | | 2023 | $2,750,297 | N/A | $1,740,613 | N/A | $1,452,785 | $1,037,819 | $51.49 | $114.50 | $-29,689 | -3.8% | | 2022 | $1,551,845 | $1,739,780 | $1,562,931 | $1,468,766 | $825,850 | $838,313 | $68.01 | $107.88 | $15,031 | 3.0% | | 2021 | N/A | $2,387,206 | N/A | $2,678,683 | $865,170 | $802,746 | $56.44 | $118.13 | $80,594 | 7.2% | | 2020 | N/A | $2,118,816 | N/A | $686,264 | $1,075,628 | $475,102 | $59.76 | $100.89 | $-112,706 | -13.4% |
Pay Versus Performance Table
(1)The Principal Executive Officer (“PEO”) and named executive officers for the applicable years were as follows:
Pay Versus Performance Table
| Year | Current PEO | Former PEO | Non-PEO NEOs | | 2024 | Kevin J. Leidwinger | | Julie A. Stephenson; Eric J. Martin; Sarah E. Madsen; and Steven Hernandez | | 2023 | Kevin J. Leidwinger | | Julie A. Stephenson; Eric J. Martin; Robert F. Cataldo; and Micah Woolstenhulme | | 2022 | Kevin J. Leidwinger | Randy A. Ramlo | Eric J. Martin; Robert F. Cataldo; Jeremy J. Bahl; Micah Woolstenhulme; Randy L. Patten; and Michael T. Wilkins | | 2021 | | Randy A. Ramlo | Michael T. Wilkins; Randy L. Patten; Robert F. Cataldo; Micah Woolstenhulme; and Dawn M. Jaffray | | 2020 | | Randy A. Ramlo | Michael T. Wilkins; Dawn M. Jaffray; Robert F. Cataldo; and Neal R. Scharmer |
Pay Versus Performance Table
(2)Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Messrs Leidwinger and Ramlo and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s named executive officers reported for the applicable year other than the PEOs for such years. (3)To calculate compensation actually paid, adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Messrs. Leidwinger and Ramlo and for the average of the other named executive officers is set forth following the footnotes of this table. (4)Pursuant to rules of the SEC, the comparison assumes $100 was invested on December 31, 2019. Historic stock price performance is not necessarily indicative of future stock price performance. (5)The TSR Peer Group consists of Standard & Poor’s 600 Property and Casualty Index. This is the same industry index used for purposes of the Company’s stock price performance graph in its Annual Report to stockholders. (6)As noted in the CD&A for 2024 the Compensation Committee determined that Adjusted ROE continues to be viewed as a core driver of the Company’s performance and stockholder value creation and, accordingly, was utilized as a component in both the 2024 AIP and 2024 PSUs. Adjusted ROE is our return-on-equity, calculated in accordance with GAAP, excluding the impact of market value changes on investments.
Pay Versus Performance Table
| | 2020 | | 2021 | | 2022 | | | 2023 | | 2024 | | | Adjustments | Former PEO | Average non-PEO NEOs | Former PEO | Average non-PEO NEOs | Former PEO | Current PEO | Average non-PEO NEOs | Current PEO | Average non-PEO NEOs | Current PEO | Average non-PEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” and “Option Awards” Columns in the Summary Compensation Table for Applicable FY (a) | $-570,904 | $-316,962 | $-856,025 | $-282,058 | $-297,179 | $-919,152 | $-296,673 | $-1,500,009 | $-604,516 | $-1,561,248 | $-517,447 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End (b) | $244,579 | $150,389 | $678,624 | $221,278 | $52,121 | $758,427 | $232,501 | $853,662 | $325,097 | $2,605,123 | $796,916 | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Vested during Applicable FY, determined as of Vesting Date (c) | $— | $— | $— | $— | $— | $171,811 | $32,232 | $— | $62,291 | $— | $— | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End (d) | $-815,303 | $-248,518 | $60,113 | $12,296 | $102,827 | $— | $33,568 | $-326,705 | $-180,706 | $246,918 | $97,360 | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date (e) | $-63,206 | $-21,734 | $379,673 | $82,599 | $303,084 | $— | $40,726 | $-42,231 | $111 | $111,921 | $13,671 |
Pay Versus Performance Table
| Deduction of ASC 718 Fair Value of Awards Granted during Prior FY that were Forfeited during Applicable FY, determined as of Prior FY End (f) | $— | $— | $-76,166 | $-112,552 | $-521,131 | $— | $-49,924 | $— | $-3,439 | $— | $— | | Increase based on Dividends or Other Earnings Paid during Applicable FY prior to Vesting Date | $74,600 | $16,632 | $98,373 | $19,217 | $64,267 | $— | $6,439 | $5,600 | $4,217 | $9,333 | $3,159 | | Increase based on Incremental Fair Value of Options/SARs Modified during Applicable FY | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— | | Deduction for Change in the Actuarial Present Values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of the Summary Compensation Table for Applicable FY(g) | $-323,233 | $-224,026 | $-4,867 | $-33,855 | $— | $— | $— | $— | $-25,286 | $-15,810 | $-10,288 | | Increase for Service Cost and, if applicable, Prior Service Cost for Pension Plans(h) | $20,915 | $43,693 | $11,752 | $30,651 | $24,998 | $— | $13,594 | $— | $7,265 | $— | $7,553 | | TOTAL ADJUSTMENTS | $-1,432,552 | $-600,526 | $291,477 | $-62,424 | $-271,013 | $11,086 | $12,463 | $-1,009,684 | $-414,966 | $1,396,237 | $390,924 |
Pay Versus Performance Table
a.Represents the grant date fair value of the stock option and stock awards granted during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. b.Represents the fair value as of the indicated fiscal year-end of the outstanding and unvested option awards and stock awards granted during such fiscal year, computed in accordance with the methodology used for financial reporting purposes. c.Represents the fair value at vesting of the option awards and stock awards that were granted and vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. d.Represents the change in fair value during the indicated fiscal year of each option award and stock award that was granted in a prior fiscal year and that remained outstanding and unvested as of the last day of the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year. e.Represents the change in fair value, measured from the prior fiscal year-end to the vesting date, of each option award and stock award that was granted in a prior fiscal year, and which vested during the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. f.Represents the fair value as of the last day of the prior fiscal year of the option award and stock awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with the methodology used for financial reporting purposes. g.Represents the aggregate change in the actuarial present value of the accumulated benefits under all defined benefit and actuarial pension plans reported in the Summary Compensation Table for the indicated fiscal year. h.Represents the sum of the actuarial present value of the benefits under all defined benefit and actuarial pension plans attributable to services rendered during the indicated fiscal year, calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles. i.See footnote 1 above for the named executive officers included in the average for each year.
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the Named Executive Officers
Performance Measures Used to Link Company Performance and Compensation Actually Paid to the Named Executive Officers The following is a list of financial performance measures, which in the Company’s assessment represent the most important financial measures used by the Company to link CAP to the named executive officers for 2024. Please see the CD&A for a further description of these metrics and how they are used in the Company’s executive compensation program, including the AIP and 2024 PSUs. We believe the following performance measures represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended December 31, 2024: •Adjusted Return on Equity, •Written Premium Growth, •Core Earnings, •Net Adjusted Loss Ratio, and •Underwriting Expense Ratio.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION We have designed the compensation of our directors to attract and retain qualified directors and to align director compensation with the interests of our shareholders. The Compensation Committee is responsible for making recommendations to the Board of Directors regarding compensation plans and the elements of director compensation.
Non-Employee Director Compensation — 2024
Non-Employee Director Compensation — 2024
Non-Employee Director Compensation — 2024
| Name | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1)(2) | | Option Awards ($)(3) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | Total Compensation ($) | | | John-Paul E. Besong | | 89,000 | | 73,837 | | — | | — | | 162,837 | | Scott L. Carlton | | 103,000 | | 73,837 | | — | | — | | 176,837 | | Brenda K. Clancy | | 114,000 | | 73,837 | | — | | — | | 187,837 | | Christopher R. Drahozal | | 98,000 | | 73,837 | | — | | — | | 171,837 | | Matthew Foran | | 93,000 | | 73,837 | | — | | — | | 166,837 | | Mark A. Green | | 102,000 | | 73,837 | | — | | — | | 175,837 | | Lura E. McBride | | 91,000 | | 73,837 | | — | | — | | 164,837 | | George D. Milligan | | 107,000 | | 73,837 | | — | | — | | 180,837 | | James W. Noyce | | 148,000 | | 73,837 | | — | | — | | 221,837 | | Susan E. Voss | | 105,500 | | 73,837 | | — | | — | | 179,337 |
Non-Employee Director Compensation — 2024
(1) Stock awards represented in this column are scheduled to vest on May 15, 2025, and are subject to forfeiture until vested. Aggregate RSUs outstanding at December 31, 2024 for each of the following non-employee directors was: Besong — 3,219, Carlton — 3,219, Clancy — 3,219, Drahozal — 3,219, Foran — 3,219, Green — 3,219, McBride — 3219, Milligan — 3,219, Noyce — 3,219, and Voss — 3,219. On December 31, 2024, Mr. Noyce’s plan balance under the Directors’ Deferred Compensation Plan, including any accrued dividends, represented 4,286 phantom stock units. (2) Amounts in this column represent the aggregate grant date fair value for restricted stock granted during 2024 calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation. For a discussion of valuation assumptions used, see Note 9 to the Consolidated Financial Statements included in our Company’s Annual Report on Form 10-K for the year ended December 31, 2024. (3) All options held by non-employee directors expired in May 2024 and no other options were issued after 2013; therefore, there are no outstanding options held by Board members as of December 31, 2024.