DEF 14A of Investors Title Co
Filed Apr 12, 2024 · FY20230001140361-24-019530
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS Directors who are not employees of the Company receive an annual retainer for Board services of $7,500 and an attendance fee of $2,500 for each meeting of the Board of Directors attended, in addition to actual travel expenses related to the meetings. Non-employee directors also receive a $750 fee for participating in a committee meeting, provided that the committee meeting is held on a day other than the regularly scheduled Board meeting date. The Audit Committee Chairperson receives an additional annual retainer of $500. Directors who are employees of the Company are paid no fees or other remuneration for service on the Board or on any Board committee. On May 17, 2023, the date of the Company’s 2023 Annual Meeting of Shareholders, each non-employee director was granted 750 stock appreciation rights (“SARs”) under the Company’s 2019 Stock Appreciation Rights Plan (the “2019 Plan”) with an exercise price of $140.10. Upon exercise of each SAR, a director is entitled to receive an amount (payable in shares of Common Stock) equal to the difference between the closing price of Common Stock on the business day immediately preceding the date of exercise and the exercise price. The number of shares paid on exercise is determined by dividing this amount by the closing price of Common Stock on the business day immediately preceding the date of exercise. These SARs vest and become exercisable in four quarterly installments beginning June 30, 2023, and will expire on May 17, 2030. The Board of Directors makes all decisions regarding the compensation of the members of the Board of Directors. The Chief Executive Officer makes periodic recommendations regarding director compensation, and the Board of Directors may exercise its discretion in modifying any recommended compensation adjustments or awards to the directors. The Board of Directors does not use a compensation consultant for determining or recommending the amount or form of director compensation. The following table shows the compensation earned by each non-employee director for fiscal 2023:
2023 Director Compensation
2023 Director Compensation
2023 Director Compensation
| Name(1) | Fees Earned or Paid In Cash ($) | Option Awards ($)(2) | Total ($) | | Tammy F. Coley | 21,250 | 43,719 | 64,969 | | David L. Francis | 19,000 | 43,719 | 62,719 | | Richard M. Hutson II | 17,500 | 43,719 | 61,219 | | Elton C. Parker, Jr. | 21,750 | 43,719 | 65,469 | | James E. Scott | 20,500 | 76,830 | 97,330 | | James H. Speed, Jr | 17,500 | 43,719 | 61,219 |
2023 Director Compensation
| (1) J. Allen Fine, Chief Executive Officer and Chairman of the Board, James A. Fine, Jr., President, Chief Financial Officer and Treasurer, and W. Morris Fine, Executive Vice President and Secretary, are not included in this table as they are employees of the Company and do not receive additional compensation for their services as directors. The compensation received by Messrs. Fine, Fine, Jr. and Fine as employees of the Company is shown in the Summary Compensation Table on page 22. |
2023 Director Compensation
| (2) The amounts shown in this column indicate the grant date fair value of SARs computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. For additional information regarding the assumptions made in calculating these amounts, see Note 7 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The aggregate number of SARs outstanding at December 31, 2023 held by directors was as follows: |
2023 Director Compensation
| Name | Outstanding SARs at Fiscal Year End | | Tammy F. Coley | 1,875, of which 1,687 were vested | | David L. Francis | 5,250, of which 5,062 were vested | | Richard M. Hutson II | 5,250, of which 5,062 were vested | | Elton C. Parker | 3,750, of which 3,562 were vested | | James E. Scott | 1,500, of which 1,312 were vested | | James H. Speed | 5,250, of which 5,062 were vested |
2023 Director Compensation
The Company did not grant any options in fiscal 2023. There were no option awards outstanding at December 31, 2023 held by directors.
Proposal 1 - Election of Directors
Proposal 1 - Election of Directors The Company’s Board of Directors is composed of nine members divided into three classes with staggered three-year terms for each class. Based on the recommendations of the Nominating Committee, the Board of Directors has nominated James A. Fine, Jr., Elton C. Parker, Jr. and James E. Scott for election to serve for a three-year period or until their respective successors have been elected and qualified.
Information Regarding Nominees for Election as Directors
Information Regarding Nominees for Election as Directors
Information Regarding Nominees for Election as Directors
| Name | Age | Served as Director Since | Term to Expire | | James A. Fine, Jr. | 61 | 1997 | 2027 | | Elton C. Parker, Jr. | 72 | 2020 | 2027 | | James E. Scott | 62 | 2023 | 2027 |
Information Regarding Nominees for Election as Directors
James A. Fine, Jr. is President, Chief Financial Officer and Treasurer of the Company, Executive Vice President, Chief Financial Officer and Treasurer of Investors Title Insurance Company, Executive Vice President and Chief Financial Officer of National Investors Title Insurance Company, Executive Vice President of Investors Title Management Services, Inc., President of Investors Title Exchange Corporation and Investors Title Accommodation Corporation, and Chief Executive Officer of Investors Trust Company and Investors Capital Management Company. Investors Title Insurance Company, National Investors Title Insurance Company, Investors Title Management Services, Inc., Investors Title Exchange Corporation, Investors Title Accommodation Corporation, Investors Capital Management Company and Investors Trust Company are all wholly owned subsidiaries of the Company. Mr. Fine is the son of J. Allen Fine, Chief Executive Officer and Chairman of the Board of the Company, and brother of W. Morris Fine, Executive Vice President and Secretary of the Company. During the past five years, Mr. Fine has served on the Board of Directors of Investors Title Company. Mr. Fine was selected and qualified to serve on the Board of Directors because he has extensive title insurance industry, operations and marketing experience in addition to a background in investment strategy and executive level management and strategic planning experience. Elton C. Parker Jr. retired in 2006 as an audit partner of the Raleigh, North Carolina office of Deloitte & Touche LLC, a public accounting firm, where he had been employed since 1974. Beginning in 1985, Mr. Parker served in the supervising partner roles in the audit of various types of insurance companies in North and South Carolina practice until his retirement. Since 2006, Mr. Parker has served as the Managing Member of Elpark Financial LLC, a financial advisory and consulting firm and, since 1982 has served as President of Elpark Inc. and subsidiaries, a family-owned real estate, farming and investment company. Mr. Parker has served on the Board of Directors of Investors Title Company since 2020. Mr. Parker, a Certified Public Accountant, was selected and qualified to serve on the Board of Directors because he has extensive experience in public accounting, particularly with respect to insurance companies, management and strategic planning. James E. Scott retired in 2021 as a tax partner of Ernst & Young LLP, a public accounting firm, after thirty-seven years of service. During his career, Mr. Scott advised large public and private companies with respect to tax planning and reporting, leading global service and delivery teams. Since retirement, Mr. Scott has provided consulting services to corporate clients and is currently a consultant for Ernst & Young. Mr. Scott, a Certified Public Accountant, was selected and qualified to serve on the Board of Directors because he has extensive experience in public accounting, particularly with respect to tax planning and reporting.
Information Regarding Directors Continuing in Office
Information Regarding Directors Continuing in Office
Information Regarding Directors Continuing in Office
| Name | Age | Served as Director Since | Term to Expire | | J. Allen Fine | 89 | 1973 | 2025 | | David L. Francis | 90 | 1982 | 2025 | | James H. Speed, Jr. | 70 | 2010 | 2025 | | Tammy F. Coley | 57 | 2020 | 2026 | | W. Morris Fine | 57 | 1999 | 2026 | | Richard M. Hutson II | 83 | 2008 | 2026 |
Information Regarding Directors Continuing in Office
J. Allen Fine was the principal organizer of Investors Title Insurance Company and has been Chairman of the Board of the Company, Investors Title Insurance Company, and National Investors Title Insurance Company, since their incorporation. Mr. Fine served as President of Investors Title Insurance Company until February 1997, when he was named Chief Executive Officer. Additionally, Mr. Fine serves as Chief Executive Officer of the Company and National Investors Title Insurance Company, and Chairman of the Board of Investors Title Exchange Corporation, Investors Capital Management Company and Investors Trust Company. Mr. Fine is the father of James A. Fine, Jr., President, Chief Financial Officer and Treasurer of the Company, and W. Morris Fine, Executive Vice President and Secretary of the Company. During the past five years, Mr. Fine has served on the Board of Directors of Investors Title Company. Mr. Fine was selected and qualified to serve on the Board of Directors because he is the founder of the Company and has extensive title insurance industry, operations and marketing experience as well as a strong executive background in real estate, strategic planning and business administration. David L. Francis retired in 1997 as the President of Marsh Mortgage Company, a mortgage banking firm, and Marsh Associates, Inc., a property management company, where he had been employed since 1963. During the past five years, Mr. Francis has served on the Board of Directors of Investors Title Company. Mr. Francis was selected and qualified to serve on the Board of Directors because he has extensive experience in mortgage lending, real estate and property management. James H. Speed, Jr. served as President and Chief Executive Officer of North Carolina Mutual Life Insurance Company, the oldest and largest insurance company in America with roots in the African-American community, until his retirement in December 2015. During the past five years, Mr. Speed, a Certified Public Accountant, has served on the boards of directors of Investors Title Company, Brown Capital Management Funds, Centaur Mutual Funds, Chesapeake Investment Trust, Hillman Capital Management Investment Trust, Starboard Investment Trust and WST Investment Trust. Mr. Speed was selected and qualified to serve on the Board of Directors because he has a strong executive background and extensive experience in finance, public accounting and insurance. Tammy F. Coley is the Chief Transformation Officer at BlackLine, a leading provider of cloud software that automates and enhances controls over finance and accounting. During the fourteen years prior to joining BlackLine in September 2017, Ms. Coley led the Enterprise Accounting and Internal Controls function at Cox Communications, a company that provides digital cable television, telecommunications and home automation services. Ms. Coley, a Certified Public Accountant, has served on the Board of Directors of Investors Title Company since 2020. Ms. Coley was selected and qualified to serve on the Board of Directors because she has strong experience in executive leadership, operational management, and public accounting. W. Morris Fine is Executive Vice President and Secretary of the Company, President and Chief Operating Officer of Investors Title Insurance Company and National Investors Title Insurance Company, President and Chairman of the Board of Investors Title Management Services, Inc., Vice President of Investors Title Exchange Corporation and Investors Title Accommodation Corporation, and Chief Financial Officer and Treasurer of Investors Trust Company and Investors Capital Management Company. Mr. Fine is the son of J. Allen Fine, Chief Executive Officer and Chairman of the Board of the Company, and brother of James A. Fine, Jr., President, Chief Financial Officer and Treasurer of the Company. During the past five years, Mr. Fine has served on the Board of Directors of Investors Title Company. Mr. Fine was selected and qualified to serve on the Board of Directors because he has extensive title insurance industry, operations, and marketing experience in addition to a background in public accounting and executive level management and strategic planning experience. Richard M. Hutson II is a practicing attorney and, since 2006, has been the principal of Hutson Law Office, P.A., the successor firm to Hutson, Hughes and Powell P.A. in Durham, North Carolina. Mr. Hutson has been engaged in the practice of law since 1965 and served as a principal of Hutson, Hughes and Powell P.A. from 1993 to 2006. Additionally, he has served in leadership roles of local and national professional and civic organizations and during the past five years, has served on the Board of Directors of Investors Title Company. Mr. Hutson was selected and qualified to serve on the Board of Directors because he has extensive experience in corporate and business law, corporate restructuring, and governance matters, as well as in depth knowledge of the Company’s business as he has assisted the Company in various matters beginning with its formation in 1972.
Elements of Executive Compensation
| • | potential payments and benefits upon change of control; and |
Summary Compensation Table
Summary Compensation Table The table below summarizes the total compensation for each of the named executive officers for each of the fiscal years ended December 31, 2023 and December 31, 2022, respectively.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | All Other Compensation ($)(2) | Total ($) | | J. Allen Fine Chief Executive Officer and Chairman of the Board | 2023 | 558,500 | 100,000 | 72,733 | 731,233 | | | 2022 | 533,500 | 1,000,000 | 82,573 | 1,616,073 | | James A. Fine, Jr. President, Chief Financial Officer and Treasurer | 2023 | 479,000 | 100,000 | 72,714 | 651,714 | | | 2022 | 457,500 | 1,000,000 | 76,164 | 1,533,664 | | W. Morris Fine Executive Vice President & Secretary | 2023 | 479,000 | 100,000 | 78,489 | 657,489 | | | 2022 | 457,500 | 1,000,000 | 86,246 | 1,543,746 |
Summary Compensation Table
| (1) Reflects cash bonuses earned in the applicable year. |
Summary Compensation Table
| (2) Amounts set forth as “All Other Compensation” for fiscal 2023 consists of the following: |
Summary Compensation Table
| Name | 401(k) Contributions ($) | Supplemental Retirement Cash Payment ($) | Life and Health Insurance ($) | Personal Use of Company Vehicle ($) | Total ($) | | J. Allen Fine | 9,900 | 44,781 | 8,021 | 10,031 | 72,733 | | James A. Fine, Jr. | 9,900 | 41,888 | 12,053 | 8,873 | 72,714 | | W. Morris Fine | 9,900 | 41,888 | 12,053 | 14,648 | 78,489 |
Employment Agreements
| • | accrued benefits under the Nonqualified Supplemental Retirement Benefit Plan and Nonqualified Deferred Compensation Plan (if any); |
Employment Agreements
| • | accrued benefits under the Nonqualified Supplemental Retirement Benefit Plan and Nonqualified Deferred Compensation Plan (if any); |
Employment Agreements
| • | accrued benefits under the Nonqualified Supplemental Retirement Benefit Plan and Nonqualified Deferred Compensation Plan (if any); |
Employment Agreements
| • | accrued benefits under the Nonqualified Supplemental Retirement Benefit Plan and Nonqualified Deferred Compensation Plan. |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 There were no grants of plan-based awards to the named executive officers in the fiscal year ended December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End There were no outstanding equity awards to the named executive officers as of December 31, 2023.
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested There was no exercise of options or SARs or vesting of shares of Common Stock held by the named executive officers in fiscal 2023.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation and certain financial performance measures of the Company. The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee view the link between the Company’s performance and compensation for the named executive officers.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return ($)(5) | Net Income ($)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (h) | | 2023 | 731,233 | 731,233 | 654,602 | 654,602 | 124.27 | 21,685,900 | | 2022 | 1,616,073 | 1,616,073 | 1,538,705 | 1,538,705 | 108.78 | 23,903,000 | | 2021 | 1,558,657 | 1,558,657 | 1,492,167 | 1,492,167 | 140.95 | 67,020,300 |
PAY VERSUS PERFORMANCE
| (1) For each year, reflects the total compensation amount reported for J. Allen Fine, Chief Executive Officer and Chairman of the Board of the Company, in the “Total” column of the Summary Compensation Table that appears on page 22. |
PAY VERSUS PERFORMANCE
| (2) For each year, reflects the amount of “compensation actually paid” to Allen Fine, Chief Executive Officer and Chairman of the Board of the Company, as computed in accordance with Item 402(v) of Regulation S-K. No equity awards have been granted to J. Allen Fine during the years covered by the table above, nor did he hold any outstanding equity awards during such years, and, as a result, no adjustments were made to J. Allen Fine’s total compensation as reported in the Summary Compensation Table. |
PAY VERSUS PERFORMANCE
| (3) For each year, reflects the average of the total compensation amounts reported for our other named executive officers as a group (excluding J. Allen Fine) in the “Total” column of the Summary Compensation Table that appears on page 22. The names of each of the other named executive officers included for purposes of calculating the average amount for each year are: James A. Fine, Jr., President, Chief Financial Officer and Treasurer, and W. Morris Fine, Executive Vice President and Secretary. |
PAY VERSUS PERFORMANCE
| (4) For each year, reflects the average of the amounts of “compensation actually paid” to the other named executive officers as a group (excluding J. Allen Fine), as computed in accordance with Item 402(v) of Regulation S-K. The names of each of the other named executive officers included for purposes of calculating the average amount for each year are: James A. Fine, Jr., President, Chief Financial Officer and Treasurer, and W. Morris Fine, Executive Vice President and Secretary. No equity awards have been granted to James A. Fine, Jr. or W. Morris Fine during the years covered by the table above, nor did they hold any outstanding equity awards during such years, and, as a result, no adjustments were made to total compensation as reported in the Summary Compensation Table. |
PAY VERSUS PERFORMANCE
| (5) Cumulative “Total Shareholder Return” (“Company TSR”) is calculated by dividing the sum of (i) the difference between the share price of Common Stock at the end and the beginning of the measurement period and (ii) the cumulative amount of dividends paid on shares of Common Stock for the measurement period, assuming dividend reinvestment, by the share price of Common Stock at the beginning of the measurement period. Each amount assumes that $100 was invested in Common Stock on December 31, 2020, and that dividends were reinvested for additional shares. |
PAY VERSUS PERFORMANCE
| (6) Reflects the dollar amount of net income reported in the Company’s audited financial statements for the applicable year. |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. The following graph compares, for each of 2023, 2022 and 2021, the “compensation actually paid” to the Chief Executive Officer and the average “Compensation Actually Paid” to our other named executive officers for each of those years to the Company TSR. The Compensation Committee does not consider Company TSR as a general matter when designing the Company’s executive compensation program. As described in more detail under “Executive Compensation—Narrative Discussion of Executive Compensation” above, the Compensation Committee does review stock performance when making compensation decisions but focuses on building long term shareholder value while at the same time acknowledging the cyclical nature of the Company’s business. The following graph compares, for each of 2023, 2022 and 2021, the “compensation actually paid” to the Chief Executive Officer, and the average “Compensation Actually Paid” to our other named executive officers for each of those years to our net income as reported in our audited financial statements for each year. The Company does not use net income alone as a performance measure in the overall executive compensation program. However, the Compensation Committee considers net income among other metrics when determining annual salary adjustments and discretionary incentive bonuses.