DEF 14A of American Financial Group Inc
Filed Apr 4, 2025 · FY20240001140361-25-012231
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| Age | 47 Director Since | 2025 | Craig Lindner, Jr. Mr. Lindner currently serves as the Divisional President of AFG Real Estate Investments, a position he has held since 2017. In this role, he manages the Company’s portfolio of apartments, resort and marina properties and other commercial real estate, in addition to its extensive portfolio of commercial mortgages. Mr. Lindner joined AFG in 2002. Over the course of a 20-year career in real estate investing and the insurance industry, he has played a key role in overseeing the management and operations of the Company’s investments in real estate equity and debt. During much of this time, he also served as a member of the executive team of AFG’s Annuity Group until the time of its sale in 2021. He served on the Board of Directors of Cranemere, a long-term industrial holding company, from 2017-2020. The Board believes that it will benefit significantly from Mr. Lindner’s experience and acumen in real estate investing and operations, which represents a significant portion of the Company’s alternative investment portfolio and is a meaningful contributor to AFG’s net investment income. |
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| Age | 62 Director Since | 2019 | Mary Beth Martin Ms. Martin has served as the Executive Director of the Farmer Family Foundation in Cincinnati, Ohio since 2007. In that role, she manages the organization’s philanthropic goals and objectives, and oversees grant investments. For over 20 years, Ms. Martin previously served in the banking and commercial real estate industries where she led commercial real estate, private bank, trust, and asset management groups at regional banking institutions. Ms. Martin is active in her community and currently serves on the Board of Directors of a number of charitable organizations, including Accelerate Great Schools, where she also serves as Secretary and Treasurer, Teach for America Ohio and Ohio Excels. The Board believes that Ms. Martin’s management experience in various sectors as well as her financial, investment and commercial real estate experience will significantly benefit the Board of Directors. |
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| Age | 60 Director Since | 2021 | Amy Y. Murray Ms. Murray has over 35 years of leadership experience in the corporate world and in local and federal government. She most recently served as Deputy Assistant Secretary of Defense/Deputy, Industrial Policy (from June 2020 to January 2021) and Director of the Office of Small Business (from March 2020 to January 2021) for the U.S. Department of Defense. During 2011 and from 2013-2020, Ms. Murray was a member of the Cincinnati, Ohio City Council serving at various times as chair or vice chair of numerous committees, including the Economic Growth and Zoning Committee, the Major Transportation and Regional Cooperation Committee, the Budget and Finance Committee and the Law and Public Safety Committee. Also, from 2000-2014, she served as founder and chief consultant of The Japan Consulting Group which provides services regarding strategies for successful business relationships with Japanese companies, both in Japan and the United States. Prior to such time, Ms. Murray spent 14 years in various positions at the Procter & Gamble Company, a leading multinational manufacturer of consumer-packaged goods, including as a manager of Global Business Development for Asia and Global Customer Business Development. In addition, Ms. Murray completed the National Association of Corporate Directors’ Cyber-Risk Oversight Program and received the CERT Certificate in Cybersecurity Oversight issued by the Software Engineering Institute at Carnegie Mellon University. She serves on the boards of the Mayfield Education & Research Foundation and The Shephard Chemical Company. Ms. Murray is active in the community having served on the boards of several charitable organizations including Cincinnati Zoo and Botanical Society and Boy Scouts of America – Dan Beard Council. The Board believes that Ms. Murray’s varied skill set, including government affairs, data security, public relations, corporate, financial consulting and community engagement will help to guide the Company through numerous opportunities in the years to come. |
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| Age | 60 Director Since | 2024 | Roger K. Newport Mr. Newport served as Chief Executive Officer and a Director of AK Steel Holding Corporation, a publicly-traded manufacturing company, from January 2016 until March 2020, when he retired in connection with the acquisition of AK Steel by Cleveland-Cliffs Inc. Prior to that, Mr. Newport served in other executive roles at AK Steel, including Executive Vice President, Finance and Chief Financial Officer, as well as Controller and Chief Accounting Officer. Mr. Newport served in a variety of other leadership positions since joining AK Steel in 1985, including Vice President, Business Planning and Development, and Assistant Treasurer, Investor Relations. In addition, since 2018, Mr. Newport has been a Director of Alliant Energy Corporation, an energy-services provider that operates as a regulated investor-owned public utility holding company. He currently serves on Alliant Energy’s Audit Committee, of which he previously served as Chair, and its Nominating and Governance Committee. Mr. Newport has been active in the community, having served on a variety of local and regional boards for organizations that serve the areas of academia, community development, and at-risk children and families. Mr. Newport’s experience as a principal executive officer, principal financial officer, principal accounting officer and controller qualifies him for membership on the Company’s Board, as well as an “audit committee financial expert” under SEC guidelines. He has significant leadership and financial experience with large and complex publicly-traded companies, which the Board believes is valuable to the Company. |
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| Age | 66 Director Since | 2020 | Evans N. Nwankwo Mr. Nwankwo has worked in the commercial construction industry for nearly 40 years and is the Founder and President of Megen Construction Company, one of the region’s premier builders. Megen Construction provides a full range of services including construction management, design/build, general contracting, estimating and program management, and was the first LEED Platinum builder in the State of Ohio. Megen Construction is a top-ten minority-owned business in Greater Cincinnati. Mr. Nwankwo is active in his community and around the world. He is the founder of NuWay Foundation, a charitable organization focused on improving the lives and economic conditions of the less fortunate in African villages through health, opportunity, pure water and education (H.O.P.E.). He is the Board Chairman of Ambassadors for Self Determination, a nonprofit organization focused on assisting regions of the world with their efforts towards self-determination of their governance. He has also served on the Board of Directors of a number of charitable organizations, including the American Red Cross (Cincinnati Chapter) and the University of Cincinnati College of Arts & Sciences. As a business owner, entrepreneur and first-generation immigrant, the Board believes that Mr. Nwankwo brings a distinct perspective to risk assessment and management, which we believe is a valuable asset to our Board. |
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| Age | 45 Director Since | 2025 | David L. Thompson, Jr. Mr. Thompson currently serves as Chairman of the Board, President and Chief Operating Officer of Great American Insurance Company, AFG’s flagship property and casualty insurance company. Since joining Great American in 2006, he has served in various senior management capacities and has had direct executive oversight of many of Great American’s specialty property and casualty businesses, as well as its corporate reinsurance operations, the Company’s wholly owned retail agency, Dempsey & Siders, and was instrumental in the formation of its Predictive Analytics function. Raised in a multi-lingual, international household, Mr. Thompson spent his formative years in Poland, Germany, Switzerland, Hungary and Russia before returning to the United States. Mr. Thompson serves on the Board of Directors of the American Property Casualty Insurance Association (APCIA). With his significant experience and knowledge of the Company’s P&C insurance operations, the Board believes that Mr. Thompson is able to share unique knowledge of the day-to-day business while also providing insights to help shape the Company’s current and future strategy. |
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| Age | 66 Director Since | 2002 | William W. Verity Mr. Verity has been Chairman and CEO of Verity Investment Partners, an investment management company, since 2002, and prior to that, he was a Partner of Pathway Guidance LLC, an executive consulting firm. Previously, Mr. Verity was Chairman and CEO of ENCOR Holdings, Inc., which owned and operated several product and manufacturing companies, and he worked as an associate in corporate finance at Alex. Brown & Sons, an investment bank. He previously served on the Board of Directors of Chiquita Brands International, Inc., an international food products marketer and distributor. Mr. Verity’s position as the principal executive officer of a privately held company and his over 30 years of executive and Board experience with complex asset management issues, qualify him for membership on the Company’s Board and Corporate Governance and Compensation Committees. In addition, his executive consulting experience provides him with insight into high-level corporate governance, executive compensation matters and business management matters, all of which the Company and the Board deal with on a regular basis. |
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| Age | 72 Director Since | 2008 | John I. Von Lehman Mr. Von Lehman began his career as a certified public accountant for Haskins & Sells, a predecessor of Deloitte, LLP. For more than five years until his retirement in 2007, Mr. Von Lehman served as Executive Vice President, Chief Financial Officer, Secretary and a director of The Midland Company, an Ohio-based provider of specialty insurance products (“Midland”). He served on the Board of Directors and as Chairman of the Audit Committee of Ohio National Mutual Funds until 2016 and is involved with several Cincinnati-based charitable organizations. Mr. Von Lehman’s 18 years of service as CFO and director of another publicly traded provider of insurance products qualifies him for membership on the Company’s Board. Specifically, Mr. Von Lehman’s position at Midland provided him with significant knowledge of and experience in property and casualty insurance operations, investment portfolio oversight, capital management and allocation and public company financial statement preparation. In his capacity as a certified public accountant and Chief Financial Officer of Midland, Mr. Von Lehman developed significant experience in preparing, auditing, analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues that compare to those of the Company and which qualify him as an “audit committee financial expert” under SEC guidelines. The depth in his understanding of internal control over financial reporting and risk assessment skills that evolved in his experience with Midland constitute attributes that the Board believes benefit the Company. |
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SUMMARY OF ATTRIBUTES AND EXPERIENCE OF BOARD NOMINEES In considering each director nominee, the Board and the Corporate Governance Committee evaluated each individual’s qualifications, qualities and skills to serve as a director. The Board believes that each director nominee brings a unique and valuable mix of experience and attributes to the Board. The following matrix provides information regarding the director nominees, including certain areas of knowledge, skills and experience that the Board believes are relevant to our business and strategic goals. The type and degree of knowledge, skill and experience below varies among our directors. The matrix is a non-exclusive summary and does not include all knowledge, skills, experience or other attributes of our directors that may be relevant and valuable to their service on our Board; a director may possess other relevant and important knowledge, skills and experience not indicated in the matrix. Additional information on each director nominee, including some of their specific experience, qualifications, attributes or skills, is set forth in the biographies on pages 10 to 15 of this proxy statement. Ratification of Appointment of Independent Registered Public Accounting Firm The Company’s Audit Committee Charter requires that the Audit Committee appoint annually an independent registered public accounting firm to serve as auditors. In February 2025, the Audit Committee appointed Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for 2025. Although the Audit Committee has the sole authority to appoint auditors, shareholders are being asked to ratify this appointment. If the shareholders do not ratify the appointment, the Audit Committee will take that fact into consideration but may determine to continue to retain Ernst & Young. However, the Audit Committee in its discretion may engage a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company whether or not the shareholders ratify the appointment.
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| The Board of Directors recommends that shareholders vote FOR the ratification of the Audit Committee’s appointment of Ernst & Young as our independent registered public accounting firm for 2025. |
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Audit Fees and Non-Audit Fees The following table presents fees for professional services performed by Ernst & Young for the years ended December 31, 2024 and 2023.
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| | 2024 | 2023 | | Audit fees(1) | $8,275,000 | $7,836,000 | | Audit related fees | — | 31,000 | | Tax fees(2) | 388,000 | 515,000 | | All other fees(3) | 615,000 | 588,000 | | Total | $9,278,000 | $8,970,000 |
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| (1) These aggregate fees were for audits of the financial statements (including services incurred to render an opinion under Section 404 of the Sarbanes-Oxley Act of 2002), subsidiary insurance company audits, reviews of SEC filings, and quarterly reviews. |
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| (2) These fees relate primarily to tax compliance engagements for preparation and review of foreign tax returns and certain collateralized loan obligations, in addition to other tax advisory services. |
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| (3) These fees relate primarily to agreed-upon procedure engagements for certain collateralized loan obligation structures managed by AFG. |
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Representatives of Ernst & Young are expected to be at the meeting and will be given the opportunity to make a statement if they so desire. They will also be available to respond to appropriate questions from shareholders. Pre-Approval of Services Provided by the Independent Registered Public Accounting Firm The Audit Committee has adopted policies that require pre-approval for any audit and non-audit services to be provided to AFG by Ernst & Young LLP. The Audit Committee delegated authority to the Committee Chairperson to pre-approve certain non-audit services which arise between meetings of the Audit Committee. Pursuant to these procedures and delegation of authority, the Audit Committee was informed of and pre-approved any such audit and other services during 2024. No services were provided with respect to the de minimis waiver process provided by rules of the SEC. Advisory Vote on Compensation of our Named Executive Officers The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the SEC (commonly referred to as “Say-on-Pay”). Our practice is to conduct this non-binding vote on an annual basis, and at our 2023 Annual Meeting, our shareholders overwhelmingly supported the continuation of this practice, with approximately 98% of the shares voted for annual advisory votes on the non-binding, advisory proposal as to the frequency of future Say-on-Pay votes. As described below under the heading “Compensation Discussion and Analysis” beginning on page 40 of this proxy statement, we seek to closely align the interests of our named executive officers with the interests of our shareholders. We structure our programs to discourage excessive risk-taking through a balanced use of compensation vehicles and metrics with an overall goal of delivering sustained long-term shareholder value while aligning our executives’ interests with those of our shareholders. Further, our programs require that a substantial portion of each named executive officer’s compensation be contingent on delivering performance results that benefit our shareholders. Our compensation programs are designed to reward our named executive officers for achieving short-term and long-term strategic and operational goals designed to increase total shareholder return. Shareholders should note that, because the advisory vote on executive compensation occurs well after the beginning of the compensation year and because the different elements of our executive compensation programs are designed to operate in an integrated manner and to complement one another, in many cases it may not be appropriate or feasible to change our executive compensation programs in consideration of any one year’s advisory vote on executive compensation by the time of the following year’s annual meeting of shareholders.
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| The Board of Directors recommends that shareholders vote FOR the approval of the compensation of our named executive officers as disclosed in this proxy statement. |
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The vote on this matter is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC. The vote is advisory, which means that the vote is not binding on the Company, our Board of Directors or the Compensation Committee. Nevertheless, the Board and the Compensation Committee does and will review and consider the voting results when making decisions regarding our executive compensation program. Accordingly, we ask our shareholders to approve, on an advisory basis, the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure. Approval of Amendment to Amended and Restated 2015 Stock Incentive Plan Solely to Add Non-Employee Directors as Participants On March 31, 2025, our Board, at the recommendation of the Governance Committee, approved an amendment to our Amended and Restated 2015 Stock Incentive Plan (as amended, the “Amended Plan”), subject to approval by our shareholders. The sole purpose of the amendment is to enable non-employee Directors to receive the equity component of their annual compensation for Board service under the Amended Plan. The limited proposed changes to the Amended Plan relate to this purpose and the Amended Plan otherwise includes all the same terms and conditions approved by shareholders at the 2024 Annual Meeting. The Company is not requesting any additional shares to be added to the Amended Plan’s existing pool. As of March 17, 2025, 2,182,909 common shares were authorized for issuance under the Amended Plan. The Company historically has issued restricted stock compensation to non-employee Directors under the terms of the Non-Employee Directors Compensation Plan, as amended (the “Directors Plan”). Upon shareholder approval of the Amended Plan, the Company will amend the Directors Plan to remove any ability to issue equity and will deregister all remaining common shares under the Director Plan. For more information on non-employee Director Compensation, please refer to the “2024 Director Compensation Schedule” on page 63 and the “2024 Director Compensation” table on page 64.
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| The Board of Directors recommends a vote FOR the approval of the Amendment to the Amended and Restated 2015 Stock Incentive Plan solely to add non- employee Directors as participants. |
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Overview While the Amended Plan is an “omnibus” stock plan providing for a variety of equity award vehicles, including stock options, stock appreciation rights (which we refer to as SARs), restricted stock awards, restricted stock units and stock awards, we have awarded solely restricted stock to employees since 2016 and expect to continue to do so. Non-employee Directors are not eligible to receive any award other than restricted stock awards under the Amended Plan. The below provisions of the Amended Plan are designed to align plan awards with shareholder interests. These provisions are already effective in the Amended Plan and will not be affected by the proposed amendment to add non-employee Directors as participants.
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| • | Double-Trigger Change in Control – Awards that are continued or converted into similar awards of the successor company will not accelerate vesting based solely on a change in control, and gross-ups are not provided to cover personal income taxes or excise taxes. |
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| • | not issued or delivered as a result of the net settlement of an outstanding stock option or stock appreciation right, as applicable, or |
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| • | purchased on the open market by the Company with cash proceeds received from the exercise of stock options. |
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| • | No Repricing of Stock Options or SARs – No repricing of options or SARs without the approval of shareholders. |
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| • | No Discounted Stock Options or SARs – No discounting of the exercise price or base price of stock options or SARs. |
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The following is a summary of the Amended Plan. Because the sole purpose of the proposed amendment is to enable non-employee Directors to receive the equity component of their annual compensation for Board service under the Amended Plan, all proposed changes are administrative and/or made to facilitate the addition of non-employee Directors as participants. The full text of the Amended Plan is attached as Appendix A to this proxy statement, and the following summary is qualified in its entirety by reference to Appendix A. Director Equity Compensation During the past three years, aggregate awards to non-employee Directors (all of which have been comprised of restricted shares), which are made annually on or about June 1, have totaled 10,232 restricted shares, 11,288 restricted shares and 9,144 restricted shares for 2024, 2023 and 2022, respectively. There are currently no shares underlying outstanding awards to non-employee Directors as of the date of this Proxy Statement. Administration and Eligibility The Board of Directors has designated the Compensation Committee as administrator of the Amended Plan. Each member of the Compensation Committee is a (i) “non-employee director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1933, as amended, and (ii) an “independent director” within the meaning of the rules of the NYSE. The Compensation Committee has exclusive power to determine the participants in the Amended Plan, the level of participation of each participant and the terms and conditions of all awards. In addition to non-employee Directors of the Company, all full-time employees of the Company and its subsidiaries are eligible to participate in the Amended Plan. Limits on Plan Awards The number of shares available for issuance pursuant to awards under the Amended Plan is limited to the total number approved by shareholders. A participant may receive multiple awards under the Amended Plan, but no participant will receive awards representing more than 500,000 shares in any year. Types of Awards Restricted Stock As discussed above, we have awarded solely restricted stock to employees since 2016 and expect to continue to do so. Non-employee Directors are not eligible to receive any award other than restricted stock awards under the Amended Plan. A restricted stock award represents common shares that are issued subject to restrictions on transfer and vesting requirements as determined by the Compensation Committee. Restricted stock awards to employee participants generally provide for “cliff vesting” after four years. Subject to the transfer restrictions and vesting requirements of the award, the participant has the same rights as a shareholder, including all voting and dividend rights, during the restriction period, unless the Committee determines otherwise at the time of the grant. Stock Options Non-employee Directors are not eligible to receive stock options under the Amended Plan. Stock options granted under the Amended Plan may be either non-qualified stock options or incentive stock options qualifying under Section 422 of the Internal Revenue Code. The price of any stock option granted may not be less than the fair market value of the common shares on the date the option is granted. The option price may be paid in cash, common shares, through a broker-assisted cashless exercise or as otherwise permitted by the Compensation Committee. The Compensation Committee determines the terms of each stock option grant at the time of the grant with options generally terminating after a ten-year period from the date of the grant. The Compensation Committee specifies at the time each option is granted the time or times at which and in what proportions an option becomes vested and exercisable and the terms and conditions of termination of stock options upon death, disability or retirement. Generally, if an option holder’s employment terminates for any reason other than death, disability or retirement, stock options will cease vesting and will terminate on the earlier to occur of the stated expiration date or 90 days following termination of employment. SARs Non-employee Directors are not eligible to receive SARs under the Amended Plan. A SAR entitles the participant, upon settlement, to receive a payment based on the excess of the fair market value of a common share on the date of settlement over the base price of the right, multiplied by the applicable number of common shares. SARs may be granted on a stand-alone basis or in tandem with a related stock option. The base price may not be less than the fair market value of a common share on the date of grant. The Compensation Committee determines the vesting requirements and the payment and other terms of SAR, including the effect of termination of service of a participant and may accelerate the vesting of SARs at any time. Generally, all SARs terminate after the ten-year period from the date of the grant. SARs may be payable in cash or in common shares or in a combination of both. Stock Units Non-employee Directors are not eligible to receive stock units under the Amended Plan. An award of stock units provides the participant the right to receive a payment based on the value of a common share. Stock units may be subject to such vesting requirements, restrictions and payment conditions as the Compensation Committee determines are appropriate. Stock unit awards are payable in cash or in common shares or in a combination of both. Stock units may also be granted together with related dividend equivalent rights. Stock Awards Non-employee Directors are not eligible to receive stock awards under the Amended Plan. A stock award represents common shares that are issued free of restrictions on transfer and free of forfeiture conditions and as to which the participant is entitled to all the rights of a shareholder. Vesting of Awards Vesting requirements for any awards under the Amended Plan may be based on the continued service of the participant for a specified time period, the attainment of specified performance goals established by the Compensation Committee, or both. Effect of Change of Control The Amended Plan provides for double-trigger change in control vesting provisions such that if awards are continued or converted into similar awards of the successor company, such awards will not result in accelerated vesting unless the participant is terminated without cause by the Company or for good reason by the participant within 18 months after the change in control. If awards are not continued or converted into similar awards of the successor company, then the awards will have accelerated vesting immediately prior to the change in control. Limited Transferability Except under an award agreement or as permitted by the Compensation Committee, awards granted under the Amended Plan are nontransferable except upon death by will or by the laws of descent or distribution or under a qualified domestic relations order. Adjustments for Corporate Changes In the event of recapitalizations, reclassifications or other specified events affecting the Company or common shares, appropriate and equitable adjustments may be made to the number and kind of common shares available for grant, as well as to other maximum limitations under the Amended Plan, and the number and kind of common shares or other rights and prices under outstanding awards. Term, Amendment and Termination
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The Amended Plan will expire on May 23, 2034. Accordingly, shareholder approval of the proposed amendment to the Amended Plan will not extend the term previously approved by shareholders. The Board may at any time and from time to time and in any respect amend or modify the Amended Plan. The Board may seek the approval of any amendment or modification by the Company’s shareholders to the extent it deems necessary or advisable in its sole discretion to the extent necessary to bring the plan or any outstanding awards into compliance with applicable law or stock exchange rules, to prevent adverse tax or accounting consequences to the Company or participants under Section 409A of the Code or accounting rules or for any other purpose. No amendment or modification of the Amended Plan will adversely affect any outstanding award without the consent of the participant or the permitted transferee of the award. Federal Income Tax Consequences Below is a summary of the principal U.S. federal income tax consequences to participants and to the Company of awards granted under the Amended Plan. This summary is not a complete analysis of all potential tax consequences relevant to participants and to the Company and does not describe tax consequences based on particular circumstances. The laws governing the tax consequences of these awards are highly technical and such laws are subject to change. Restricted Stock Awards, Restricted Stock Units and Other Stock-Based Awards Restricted stock that is subject to a substantial risk of forfeiture generally results in income recognition by the participant in an amount equal to the excess of the fair market value of the shares of stock over the purchase price, if any, of the restricted stock at the time the restrictions lapse. However, if permitted by the Company, a recipient of restricted stock may make an election under Section 83(b) of the Internal Revenue Code to instead be taxed on the excess of the fair market value of the shares granted, measured at the time of grant and determined without regard to any applicable risk of forfeiture or transfer restrictions, over the purchase price, if any, of such restricted stock. A participant who has been granted common shares that are not subject to a substantial risk of forfeiture for federal income tax purposes will realize ordinary income in an amount equal to the fair market value of the shares at the time of grant. A recipient of restricted stock units, performance awards or other stock-based awards (other than restricted stock) will generally recognize ordinary income at the time that the award is settled in an amount equal to the cash and/or fair market value of the shares received at settlement. In each of the foregoing cases, the Company will have a corresponding deduction at the same time the participant recognizes such income. Income and payroll taxes are required to be withheld on the amount of compensation attributable to the restricted stock, which can be withheld in cash or shares. Options When a nonqualified stock option is granted, there are no income tax consequences for the option holder or the Company. When a nonqualified stock option is exercised, in general, the option holder recognizes compensation equal to the excess of the fair market value of the underlying ordinary shares on the date of exercise over the exercise price. The Company is entitled to a deduction equal to the compensation recognized by the option holder for the taxable year that ends with or within the taxable year in which the option holder recognized the compensation. When an incentive stock option is granted, there are no income tax consequences for the option holder or the Company. When an incentive stock option is exercised, the option holder does not recognize income, and the Company does not receive a deduction. The option holder, however, must treat the excess of the fair market value of the underlying ordinary shares on the date of exercise over the option price as an item of adjustment for purposes of the alternative minimum tax. If the option holder disposes of the underlying shares after the option holder has held the shares for at least two years after the incentive stock option was granted and one year after the incentive stock option was exercised, the amount the option holder receives upon the disposition over the exercise price is treated as long-term capital gain for the option holder. The Company is not entitled to a deduction. If the option holder makes a “disqualifying disposition” of the underlying shares by disposing of the shares before they have been held for at least two years after the date the incentive stock option was granted and one year after the date the incentive stock option was exercised, the option holder recognizes compensation income equal to the excess of the fair market value of the underlying shares on the date the incentive option was exercised or, if less, the amount received on the disposition minus the exercise price. The Company is entitled to a deduction equal to the compensation recognized by the option holder for our taxable year that ends with or within the taxable year in which the option holder recognized the compensation. SARs Upon the exercise of a SAR, the participant will recognize compensation income in an amount equal to the cash received plus the fair market value of any shares received from the exercise. The participant’s tax basis in the common shares received on exercise of the SAR will be equal to the compensation income recognized with respect to the common shares. The participant’s holding period for shares acquired after the exercise of a SAR begins on the exercise date. Income and payroll taxes are required to be withheld on the amount of compensation attributable to the exercise of the SAR, whether the income is paid in cash or shares. Upon the exercise of a SAR, the Company will generally be entitled to a deduction in the amount of the compensation income recognized by the participant. New Plan Benefits Because future awards under the Amended Plan will be granted in the discretion of the Compensation Committee, the type, number, recipients, and other terms of such awards cannot be determined at this time. Information regarding our recent practices with respect to stock-based compensation awarded to employees under the Amended Plan is presented in the “Summary Compensation Table” and these related tables: “Grants of Plan-Based Awards,” “Outstanding Equity Awards at Fiscal Year-End,” and “Options Exercised and Stock Vested,” elsewhere in this proxy statement, and in the “Compensation Discussion and Analysis,” section below. Information regarding our recent practices with respect to stock-based compensation awarded to non-employee Directors under the prior plan utilized for Director equity awards is presented in the “2024 Director Compensation Schedule” table on page 63. Management The directors, nominees for director and executive officers of the Company are as follows:
Board of Directors
Board of Directors The Board does not currently have a Chairperson. Additionally, the Board does not have a formal policy as to whether the same person may serve as both the principal executive officer of the Company and Chairperson. At the present time, the Board does not believe that such a policy is necessary because the current Board membership, together with the Company’s management, possesses the requisite leadership and industry skills, expertise and experience to oversee the business and affairs of the Company effectively. The Board believes that this flexibility is in the best interest of the Company and that a one-size-fits-all approach to corporate governance, with a mandated independent Chairperson, would not result in better governance or oversight. The Company’s Corporate Governance Guidelines provide for the selection of a Lead Director from the independent directors at times when the Company has no Chairperson or no independent Chairperson. The Lead Independent Director is appointed annually and is generally expected to serve for more than one year. The Lead Independent Director has the authority to call meetings of the non-employee directors and to preside over such meetings. When the Chairperson, or in the absence of a Chairperson, the Co-CEOs, are absent, the Lead Independent Director presides over meetings of the Board. The Lead Independent Director
Board of Directors
| Gregory G. Joseph |
Board of Directors
Among other delineated responsibilities:
Board of Directors
| • | Serves as a liaison between the non-employee directors and the Co-CEOs, encouraging direct communication between them, including providing feedback and counsel regarding interactions with the Board. |
Board of Directors
| • | Consults on Board meeting agendas and other information sent to the Board. |
Board of Directors
| • | Reviews the quality, quantity, appropriateness and timeliness of information provided to the Board. |
Board of Directors
| • | Consults on and approves Board meeting schedules to ensure there is sufficient time for discussion of all agenda items. |
Board of Directors
| • | Facilitates discussion and open dialogue among the independent directors during Board meetings, executive sessions and outside of Board meetings. |
Board of Directors
| • | Maintains availability, when appropriate, for consultation and direct communication with shareholders. |
Board of Directors
| • | Communicates with the Co-CEOs and, as appropriate, regarding significant matters including decisions reached, suggestions, views or concerns expressed by non-employee directors in executive sessions or outside of Board meetings. |
Board of Directors
Board of Directors and Committees There are 13 members on the Board of Directors, though only 12 nominees for Director at the 2025 Annual Meeting. On February 19, 2025, upon the recommendation of the Corporate Governance Committee, the Board elected Messrs. Lindner Jr. and Thompson. Also on February 19, Mr. Evans informed the Board that he did not intend to stand for reelection at the 2025 Annual Meeting. Mr. Evans joined the Board in 1985, and served as both a senior executive and Director until 2014, when he retired from the executive management team and became Executive Consultant to the Company. He will continue to provide valuable counsel to the Co-CEOs and the Company in his Executive Consultant role. The Board met eight times during 2025. Each incumbent director attended at least 75% of total Board and committee meetings to which he or she was appointed and served during 2025. The members of the Board are expected to be present at the annual meeting. All of the Directors attended last year’s annual meeting, which permitted their ability to respond to shareholder questions. The committees of the Board consist of the Audit Committee, Compensation Committee and Corporate Governance Committee. Each committee is governed by a charter that defines its role and responsibilities and are available on the Company’s website at www.AFGinc.com under “Leadership and Governance – Board Committees.” A printed copy of these charters may be obtained by shareholders upon written request addressed to the Company’s Secretary, at the address set forth under “Board Communications” in the Proxy Statement Summary. The below table identifies membership and the Chairperson of each of the current committees of the Board, as well as the number of times each committee met during 2025.
Board of Directors
| Director | Lead Independent Director | Audit Committee | Compensation Committee | Corporate Governance Committee | | Gregory G. Joseph | | Chair | | | | Mary Beth Martin | | | Chair | Member | | Amy Y. Murray(1) | | Member | Member | | | Roger K. Newport(2) | | Member | | | | Evans N. Nwankwo | | | | Member | | William W. Verity | | | Member | Chair | | John I. Von Lehman | | Member | | Member | | Meetings in 2024 | | 9 | 6 | 5 |
Board of Directors
| (1) Ms. Murray joined the Compensation Committee on May 23, 2024. |
Board of Directors
| (2) Mr. Newport was elected to the Board and appointed to the Audit Committee on February 27, 2024. |
Board of Directors
Primary responsibilities of each committee include: Audit Committee
Board of Directors
| Members: Gregory G. Joseph (Chair) Amy Y. Murray Roger K. Newport John I. Von Lehman 9 Meetings in 2024 |
Board of Directors
| • | Oversees the Company’s accounting and financial reporting processes, audits of the financial statements, and internal controls over financial reporting. |
Board of Directors
| • | Appoints the Company’s independent registered public accounting firm and oversees the relationship, including by monitoring the auditor’s independence, establishing the auditor’s compensation and reviewing the scope of the auditor’s work, including pre-approval of audit and non-audit services. |
Board of Directors
| • | Reviews and discusses with our management and independent registered public accounting firm, the Company’s interim and audited annual financial statements, and recommends to the Board whether the audited annual financial statements should be included in the Company’s annual report on Form 10-K. |
Board of Directors
| • | Reviews management’s report on its assessment of the effectiveness of internal control over financial reporting and the independent public accounting firm’s report on the effectiveness of internal control over financial reporting. |
Board of Directors
| • | Reviews the adequacy and effectiveness of the Company’s internal controls, including a review of the scope and results of its program. Reviews and approves or ratifies all transactions with related persons that whether required to be disclosed or not in the proxy statement. |
Board of Directors
| • | Reviews and discusses with management and the independent auditors earnings press releases. |
Board of Directors
| • | Discusses with management the Company’s guidelines and policies related to enterprise risk assessment and risk management (including regular cybersecurity risk management assessments) and assists the Board of Directors in its oversight of the Company’s enterprise risk management process, including privacy, cybersecurity, social and environmental risks and governance. |
Board of Directors
Compensation Committee
Board of Directors
| Members: Mary Beth Martin (Chair) Amy Y. Murray William W. Verity 6 Meetings in 2024 |
Board of Directors
| • | Monitors adherence to the Company’s pay-for-performance compensation philosophy. |
Board of Directors
| • | Ensures that the total compensation paid to the named executive officers is fair, reasonable and competitive. |
Board of Directors
| • | Oversees the Company’s stock incentive plans, incentive plans covering senior executive officers and deferred compensation plans. |
Board of Directors
| • | Reviews and approves corporate goals and objectives relevant to CEO compensation, evaluates CEO performance in light of those goals and objectives, and determines and approves CEO compensation level(s) based on this evaluation. |
Board of Directors
| • | Has the sole authority to retain or obtain the advice of a compensation consultant, outside legal counsel and any other advisors for assistance in carrying out its responsibilities. |
Board of Directors
| • | Oversees the Company’s Executive Officer Clawback Policy. |
Board of Directors
Corporate Governance Committee
Board of Directors
| Members: William W. Verity (Chair) Mary Beth Martin Evans N. Nwankwo John I. Von Lehman 5 Meetings in 2024 |
Board of Directors
| • | Oversees Board succession planning, including establishing criteria for selecting new directors and identifying individuals qualified to be Board members as needed. |
Board of Directors
| • | Recommends director nominees for the next annual meeting of shareholders, the appointment and removal of members of the Board committees and the amount and form of compensation to non-management directors. |
Board of Directors
| • | Reviews the reporting structure, operations and charters for each of the Board committees and recommends changes to the full Board. |
Board of Directors
| • | Develops, recommends to the full Board and oversees an annual self-evaluation process of the Board and its committees. |
Board of Directors
| • | Advises the Board in connection with succession planning for the Co-CEOs and other key executives. |
Board of Directors
| • | Advises the Board with respect to stewardship and sustainability issues in order to assist in the development and refinement of the Company’s strategies and policies in these areas. |
Board of Directors
| • | Conducts and facilitates Board and Committee succession and recruitment activities, both in and outside of regular meetings. |
Board of Directors
Audit Committee Report In accordance with the Audit Committee’s charter, which it reviews annually, the Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. The Company’s management has the primary responsibility for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed the audited consolidated financial statements and the related schedules in the Annual Report on Form 10-K with Company management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements, among other matters. The Committee is comprised solely of independent directors as defined by the NYSE listing standards and Rule 10A-3 of the Securities Exchange Act of 1934 (“Exchange Act”). The members of the Committee are Gregory G. Joseph (Chairperson), Amy Y. Murray, Roger K. Newport and John I. Von Lehman. The Board has determined that two of the Audit Committee’s members, Mr. Newport and Mr. Von Lehman, are each considered to be an “audit committee financial expert” as defined under SEC rules. The meetings of the Committee are designed to facilitate and encourage communication among the Committee, the Company’s management, the Company’s internal audit function and the Company’s independent auditor. The Audit Committee schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its tasks. These meetings include, whenever appropriate, executive sessions in which the Audit Committee meets separately with the independent auditors, internal auditors and management personnel. In addition, the Audit Committee reviews key initiatives and programs aimed at maintaining the effectiveness of the Company’s internal control over financial reporting. Together with senior members of the Company’s management team, the Audit Committee reviews the plans of the internal auditors, the results of internal audit examinations and evaluations by management and the Company’s independent auditors of the Company’s internal control over financial reporting and the quality of the Company’s financial reporting. As part of this process, the Audit Committee monitors the scope and adequacy of the Company’s internal auditing program, including reviewing internal audit department staffing levels and steps taken to maintain the effectiveness of internal procedures and controls. The Audit Committee recognizes the importance of maintaining the independence of the Company’s independent auditor, both in fact and appearance. Each year, the Committee evaluates the qualifications, performance and independence of the Company’s independent auditor and determines whether to re-engage the current independent auditor. In doing so, the Audit Committee considers a number of factors, including the quality and efficiency of the services provided by the auditors, the auditors’ capabilities and the auditors’ technical expertise. In addition, the Committee has discussed with the independent auditor the firm’s independence from Company management and the Company, including the matters in the letter from the firm required by the Public Company Accounting Oversight Board (United States) (“PCAOB”) Rule 3526, Communication with Audit Committees Concerning Independence, and considered the compatibility of non-audit services with the independent auditor’s independence. The Committee reviewed and discussed together with management and the independent auditor the Company’s audited consolidated financial statements for the year ended December 31, 2024, and the results of management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent auditor’s audit of internal control over financial reporting. The Committee also reviewed with the independent auditor, which is responsible for expressing an opinion on the conformity of the audited consolidated financial statements and related schedules with US generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Committee by the standards of the PCAOB, including PCAOB Auditing Standard No. 1301, Communications With Audit Committees, the rules of the Securities and Exchange Commission, and other applicable regulations. In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements and related schedules and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Annual Report on Form 10-K for the year ended December 31, 2024, filed by the Company with the Securities and Exchange Commission. This Audit Committee Report does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filings under the Securities Act of 1933, as amended, or the Exchange Act, as amended, except to the extent the Company specifically incorporates this Report by reference therein. Members of the Audit Committee: Gregory G. Joseph, Chair Amy Y. Murray Roger K. Newport John I. Von Lehman Majority Voting for Directors All directors stand for election each year. Directors are elected by a plurality of votes received under Ohio law. However, the Company’s Regulations require that a director who receives a greater number of votes cast against than cast in favor shall continue to serve on the Board pursuant to Ohio law but must tender his or her resignation to the Company’s Board of Directors. In such event, the Corporate Governance Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation or whether other action should be taken. The Board of Directors will act on the Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The director who tenders his or her resignation will not participate in the Corporate Governance Committee’s or Board of Directors’ decision. Director Nomination Process and Qualifications of Candidates Our Corporate Governance Guidelines identify criteria considered to evaluate prospective nominees for director. Our Corporate Governance Guidelines are available on the Company’s website at www.AFGinc.com. Nominees for director are recommended by the Corporate Governance Committee in accordance with the principles in its charter and the Corporate Governance Guidelines. The Corporate Governance Committee considers suitability for membership on the Board on a case-by-case basis. Although the Committee does not prescribe minimum qualifications or standards for directors, candidates for Board membership should have the highest personal and professional integrity, demonstrated exceptional ability and judgment and availability and willingness to take the time necessary to properly discharge the duties of a director. The Board seeks candidates with a broad range of experiences, qualifications and skills that the Board believes enable each candidate to make a significant contribution to the Board. The Corporate Governance guidelines require that the Board will also consider Board candidates from both corporate positions and non-traditional environments such as government, academia and nonprofit organizations.
Board of Directors
The Corporate Governance Committee does not have a policy relating to the consideration of director candidates recommended by shareholders because Ohio law and the Company’s Regulations afford shareholders certain rights related to such matters. The Regulations provide that to be eligible for election at a meeting of shareholders, candidates must be nominated by or at the direction of the Board of Directors or nominated by a shareholder who has complied with the procedures set forth in the Regulations. Procedures that shareholders must follow to nominate a director candidate are set forth on page 74 under, “Other Matters—Submitting Shareholder Proposals for the 2026 Annual Meeting of Shareholders.” The Committee will make its determinations on whether to nominate an individual in the context of the Board as a whole based on the Board’s then-current needs, the merits of each such candidate and the qualifications of other available candidates. The Committee has no obligation to respond to shareholders who propose candidates that it has determined not to nominate for election to the Board, but the Committee may do so in its sole discretion. All director candidates are evaluated similarly whether nominated by the Board or by a shareholder. The Corporate Governance Committee did not seek, nor did it receive the recommendation of, any of the director candidates named in this proxy statement from any shareholder, independent director, executive officer or third-party search firm in connection with its own approval of such candidates. The Company has not paid any fee to a third party to assist it in identifying or evaluating nominees. Director Independence In accordance with NYSE rules, the Board affirmatively determines the independence of each director and nominee for election as a director in accordance with guidelines it has adopted, which guidelines comply with the NYSE listing standards. For a director to be considered independent, the Board must determine affirmatively that a director does not have any material relationship with the Company directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. A material relationship can include, but is not limited to, commercial, industrial, banking, consulting, legal, accounting, charitable and family relationships. Based on these standards, the Board has determined that each of Mmes. Martin and Murray and Messrs. Joseph, Newport, Nwankwo, Verity and Von Lehman, is independent and has no material relationship with the Company, except as a director and shareholder of the Company. In reaching its independence determinations for 2024, the Committee considered that the Company purchased vehicles from, and had vehicles serviced by, automobile dealerships affiliated with a company of which Mr. Joseph is an executive and part owner. The small amounts involved in these transactions, which were pre-approved by the Audit Committee as transactions with a related party despite not requiring disclosure pursuant to SEC Regulation S-K Item 404, were deemed by AFG’s Board of Directors not to be material. See our policies regarding transactions with related parties as set forth below under, “Review, Approval or Ratification of Transactions with Related Persons” on page 39. Other Corporate Governance Matters, Practices and Procedures
Compensation Consultant Engagement
Compensation Consultant Engagement From time to time, the Company engages Pay Governance LLC (“Pay Governance”) as its independent compensation consultant. The scope of these engagements varies from full assessments of the Company’s executive compensation program to specific consulting projects. As discussed further below, the Company most recently engaged Pay Governance in 2024, when Pay Governance provided the Compensation Committee with outside independent analysis and perspectives relating to the Committee’s evaluation of proposed changes to the Senior Executive Annual Bonus Plan (“Annual Bonus Plan”) and the impact of those changes on the Company’s overall executive compensation program. Prior to 2024, the Company most recently has engaged Pay Governance to provide the Company and the Compensation Committee with advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on the Company’s peer group; evaluation of performance metrics and peer performance; and analysis and recommendations regarding the Company’s salaries, annual and long-term incentive compensation plans; executive benefits and perquisites for the Co-CEOs; and executive compensation programs and processes in the context of AFG’s going-forward configuration as a specialty property and casualty insurance company following the sale of its annuity business. The Compensation Committee has reviewed the independence of Pay Governance considering applicable SEC rules and NYSE listing standards regarding compensation consultant independence and has affirmatively concluded Pay Governance is independent from the Company and has no conflict of interest relating to its engagement.
CEO Compensation
| • | Annual incentive target compensation; |
CEO Compensation
| • | Long-term incentive target compensation; or |
CEO Compensation
| • | Targeted value of equity compensation. |
Establishing Total Compensation Levels
Establishing Total Compensation Levels The Compensation Committee believes that compensation levels for the Co-CEOs should be based primarily upon the Committee’s assessment of the Co-CEOs’ leadership performance and potential to enhance long-term sustainable shareholder value. The Compensation Committee relies upon a combination of judgment and guidelines in determining the amount and mix of compensation elements for the Co-CEOs. The compensation levels for the other NEOs are similarly determined by the Co-CEOs, and reviewed and approved by the Compensation Committee, again based primarily upon the assessment of each NEO’s leadership performance and potential to enhance long-term sustainable shareholder value. The Compensation Committee and the Co-CEOs analyze peer groups, including the Compensation Peer Group (as defined below), and industry pay rates at least annually in reviewing the appropriateness and competitiveness of the Company’s compensation programs. In analyzing market pay levels among the Compensation Peer Group, the Compensation Committee factors into its analysis the variance in size (both in terms of revenues and market capitalization) among the companies. The Compensation Committee and the Co-CEOs have designed the executive compensation program that will attract, motivate, retain and reward the highest level of executive leadership possible and to align the interests of AFG’s executives with those of AFG’s shareholders. The Compensation Committee utilizes the peer and industry review as a point of reference for measurement and not as a determinative factor. Although the Company seeks to offer a level of total compensation to NEOs that is competitive with the compensation paid by companies in the Compensation Peer Group, the Company does not target or benchmark a particular percentile with respect to our executives’ total pay packages or any individual components of pay. Rather, the compensation levels and performance of the companies in the Compensation Peer Group constitute one of the many factors considered by the Compensation Committee and described in this Compensation Discussion and Analysis. The Compensation Peer Group, which the Compensation Committee annually reviews and updates when appropriate, is designed to reflect the Company’s business mix and to consist of companies against which the Compensation Committee believes AFG competes for talent and for shareholder investment and in the marketplace for business. The “Compensation Peer Group” for 2024, which was unchanged from 2023, consists of the following companies:
Absence of Change in Control or Employment Agreements; “Double Trigger” Equity Awards
Absence of Change in Control or Employment Agreements; “Double Trigger” Equity Awards Neither of the Co-CEOs or any other NEO is a party to an employment or other agreement providing for severance or change in control payments. Awards under the Company’s shareholder-approved equity incentive plan do not provide for automatic acceleration of awards for any participant, including the NEOs. These awards include a “double trigger,” which means that, if the awards are assumed by the surviving entity in the change of control, vesting of the awards will not accelerate unless the participant also has a qualifying termination of employment (by the Company without cause or by the participant for good reason). If the surviving entity does not assume the equity awards upon the change in control, unvested awards will become vested upon the occurrence of the change in control.
Equity Incentive Compensation
Equity Incentive Compensation The Compensation Committee views long-term incentive compensation in the form of equity awards as a critical element of the executive compensation program. The Company utilizes restricted share awards that cliff-vest after four years. The Compensation Committee believes that this incentivizes and rewards our NEOs for long-term performance based on the value of our common shares and aligns the interests of our NEOs with those of our shareholders. The Compensation Committee, as well as the Co-CEOs, also believe that the relatively extended cliff vesting period of four years provides the Company with retention benefits for the NEOs and other key employees. The Compensation Committee was mindful of the substantial ownership of the Company’s common shares by executive officers, particularly the Co-CEOs, and the effect of such ownership in aligning their interests with those of the Company’s shareholders.
Recovery of Prior Awards
Recovery of Prior Awards The Company’s Executive Officer Clawback Policy (the “Clawback Policy”) is designed to comply with the final clawback rules adopted by the Securities and Exchange Commission pursuant to Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 303A.14 of the New York Stock Exchange rules. The Board has designated the Compensation Committee to administer the Clawback Policy. The Clawback Policy applies in the case of an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The recovery of such compensation applies regardless of whether an executive officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. The Clawback Policy provides that the Company, on a reasonably prompt basis following such an accounting restatement, will require the reimbursement or forfeiture of erroneously awarded compensation received by current and former executive officers during the three completed fiscal years immediately preceding the required restatement date over the amount of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts. The Company will provide any affected executive officer with a written notice of such amount and a demand for repayment or return. If an executive officer fails to repay erroneously awarded compensation to the Company when due, the Company will take all actions reasonable and appropriate to recover such amounts. The Company’s ability to recoup incentive compensation paid under the Clawback Policy is in addition to the recoupment requirements of Section 304 of the Sarbanes-Oxley Act. Also, each of the Senior Executive Annual Bonus Plan and Senior Executive Long Term Incentive Compensation Plan contain specific provisions regarding recovery of awards in the event of restatement of materially inaccurate financial results, which provisions apply to senior employees of the Company beyond the executive officers to which the Clawback Policy applies. In addition, the Company maintains a broader recoupment policy for performance awards that applies to senior management employees beyond the executive officer group to which the Clawback Policy applies. 2024 Compensation Components The Compensation Committee continues to monitor and evaluate on an ongoing basis the mix of cash and equity compensation awarded to the NEOs and the extent to which such compensation aligns the interests of the NEOs with those of AFG’s shareholders. The Compensation Committee annually considers and discusses the structure of the Company’s executive compensation program and the relative weighting of various compensation elements. As discussed in more detail below, in 2024 this annual review exercise led the Committee to reevaluate, and ultimately redesign, the metrics utilized in the Annual Bonus Plan to align more closely with and incentivize performance in the Company’s highest priority value-creation objectives. For 2024, the principal components of compensation for NEOs were unchanged from recent prior years:
Recovery of Prior Awards
| • | annual performance-based incentive compensation; |
Recovery of Prior Awards
| • | long-term performance-based incentive compensation; |
Recovery of Prior Awards
| What We Do | | | | Compensation heavily weighted toward variable “at risk”, performance-based annual and long-term pay aligned with Company financial and stock performance | | | Double-trigger requirement for equity vesting upon a change of control | | | Four-year cliff vesting of equity awards with proportionate vesting upon a qualified retirement | | | Periodic engagement of independent compensation consultant | | | Robust share ownership guidelines for executive officers and non-employee directors | | | Both annual and long-term incentive awards include absolute and relative performance metrics | | | Broad recoupment policy for performance awards that applies to senior management employees beyond executive officer group required by SEC/NYSE rules |
Recovery of Prior Awards
| What We Don't Do | | | | No guaranteed minimums for performance-based cash incentives | | | No executive officer tax gross-ups for perquisites | | | No individual employment agreements or change of control agreements | | | No director or executive officer hedging and no pledging of common shares unless preapproved in limited circumstances | | | No plans that encourage excessive risk-taking |
Overview of 2024 Compensation Determinations and Results
Overview of 2024 Compensation Determinations and Results AFG annually holds an advisory vote on the compensation of its NEOs, commonly referred to as a Say-on-Pay vote. In 2024, our shareholders approved the compensation of our NEOs, with approximately 95% of votes cast in favor of our Say-on-Pay resolution. The Compensation Committee believes that the result of the advisory vote is valuable in assessing its compensation decisions and considers each year’s vote in its annual review and design of the Company’s executive compensation programs. In 2023, the Company’s overall performance was very strong on an absolute basis and relative to its industry peers, including a core return on equity of 19.8%, combined ratio of 90.3%, growth in book value per share plus dividends of 16.6%, and the return of approximately $900 million to shareholders through regular and special dividends and share repurchases. Notwithstanding AFG’s strong financial performance in 2023, the Company’s Operating EPS and Specialty P&C Earnings—the two metrics under the Annual Bonus Plan—each fell below target. The executive compensation program for 2024 was designed similarly to the program in 2023. The principal change, as discussed further in the “Annual Bonus Plan” section below, resulted from the Committee’s annual review of the Company’s compensation program, with guidance and input from Pay Governance, its independent compensation consultant. For 2024, the Committee determined to use three near-equally weighted metrics for the Co-CEOs and President, each of which is a key driver of AFG’s financial performance and a focus of its investors. The Operating EPS metric was retained from prior years. As the other two metrics, the Committee added annual return on equity and relative growth in book value per share compared to the companies in the Compensation Peer Group. For each metric, the Committee strove to set challenging target levels that would be achievable only through strong Company performance and maximum levels that would represent extraordinary performance, both objectively under AFG’s business plan and relative to its Compensation Peer Group companies. In addition to these metrics, Messrs. Hertzman and Weiss retained a discretionary element under the Annual Bonus Plan. In 2024, AFG delivered strong financial and operational performance, which included Operating EPS of $10.75, record premium production, record P&C investment income, annual core return on equity of 19.3%, and growth in book value per share plus dividends, excluding AOCI, of 19.6%. This excellent performance allowed the Company to return nearly $800 million of capital to shareholders, comprised of $246 million of regular dividends and $545 million of special dividends. When reviewing total 2024 compensation paid to the NEOs, the Compensation Committee determined that the Company’s results appropriately rewarded them under the 2024 Annual Bonus Plan with payments that were above target (112-115% of target) but below their respective maximum levels. The Compensation Committee credited the named executive officers for their leadership and believed that total 2024 compensation, principally incentive compensation earned based on Company results, was appropriate and consistent with the Company’s pay-for-performance philosophy.
Annual Bonus Plan
Annual Bonus Plan Under the Annual Bonus Plan, participants can earn annual performance-based cash awards based on AFG’s current year performance, as the Committee believes that the Company’s overall performance is substantially related to the performance of its executives. In the first quarter of 2024, as part of its annual review of AFG’s executive compensation program, the Committee conducted an in-depth evaluation of the Annual Bonus Plan. Preliminarily, the Committee noted that the two existing plan metrics (Operating EPS and P&C Operating Earnings) overlapped, as the largest factor in meeting targeted Operating EPS was achieving strong P&C Operating Earnings. Moreover, certain annual financial measures that the Co-CEOs and senior management believe drive the Company’s success and are typically highlighted in internal and external communications—including return on equity and growth in book value per share—were not represented in the Annual Bonus Plan. The Committee therefore undertook a process to enhance the Annual Bonus Plan with the goal of achieving certain key goals. The goals included, among others, creating a structure that would incentivize participants to produce outcomes aligned with the Company’s financial success and shareholder value creation; cover both specialty P&C insurance performance and investment performance; be well-tailored and not incentivize improper risk-taking; and, ideally, include both absolute and relative measures comparing performance to peer companies. As part of its evaluation, which was assisted by Pay Governance, the Committee analyzed a wide variety of potential structures and metrics, benchmarked annual incentive plans of Compensation Peer Group companies and other insurance and non-insurance companies, reviewed incentive plan trends and prevailing practices generally for large public companies, and conducted discussions with the other independent Directors, the Co-CEOs and other senior executives. The Committee ultimately selected as metrics key financial measures that management utilizes internally and emphasizes externally in communications (e.g., earnings releases, earnings calls, securities filings and investor meetings) as critical drivers of its business performance and shareholder value creation. As such, the Committee adopted three metrics for the 2024 Annual Plan:
Annual Bonus Plan
| • | Operating EPS, which was retained from prior years as an Annual Bonus Plan metric; |
Annual Bonus Plan
| • | Annual return on equity (“Annual ROE”); and, |
Annual Bonus Plan
| • | Relative annual growth in book value per share (“GBVPS”). |
Annual Bonus Plan
One topic the Compensation Committee also evaluated and discussed with Pay Governance were the advantages and disadvantages of including two new metrics in the Annual Bonus Plan—annual ROE and relative annual GBVPS—that were similar to, though different from, measures utilized in the Senior Executive LTIC. Among the factors considered by the Committee were the difference in performance measurement periods (one year vs. three years); the different composition of peer companies for relative measurement of GBVPS performance (14 companies in the Compensation Peer Group and 23 companies in the Senior Executive LTIC comparison group); the difference in relative weighting of the metrics between the two plans (three near-equally weighted metrics vs. two equally weighted metrics); target, maximum and threshold hurdles levels that are not aligned between the two plans; and the different composition of participants in each plan (a majority of the NEOs are not participants in the Senior Executive LTIC). The Committee also considered that the different performance measurement periods between the Annual Bonus Plan and the Senior Executive LTIC have the potential to create some constructive, natural tension when senior management is considering alternatives for key strategic and business initiatives, as certain decisions may positively impact metrics under one plan’s period while potentially creating offsetting results in the other plan period. Accordingly, notwithstanding some similarity, the Committee determined to include annual ROE and relative annual GBVPS from among the many alternatives they considered because of the metrics’ criticality to AFG’s success and their heightened importance to investors. All of the NEOs other than Mr. Thompson participate in the Annual Bonus Plan. Awards to the Co-CEOs and Mr. Berding under the 2024 Annual Bonus Plan were weighted as follows: Operating EPS: 34%; annual ROE: 33%; and relative annual GBVPS: 33%. These three metrics constituted 60% of the annual award (20% for each metric) for Messrs. Hertzman and Weiss, with the remaining 40% subjectively determined by the Co-CEOs based on individual performance. If earned, the Company pays cash awards under the Annual Bonus Plan in the first quarter for the prior year’s performance. The Compensation Committee delineated levels of achievement under each Company performance component. For results below a defined threshold, no award would be earned for the relevant component. Thresholds were established for a minimum award, target award and maximum award. The Committee determined that exceeding the highest threshold under any component would reflect significant outperformance and merit payment of the maximum award amounts. The Compensation Committee established the performance metrics’ ranges for 2024 after reviewing the Company’s 2024 business plan prepared by management, approved by the Co-CEOs and reviewed with the Board of Directors. Results for each component are determined from the Company’s results reported consistent with past practice. The Annual Bonus Plan includes provisions for adjustments to performance thresholds in the event of a modification of the methodology of Company reporting for any measure. Any modification would result in an adjustment, as determined by the Compensation Committee, in a manner that provides for an identical award for the affected component based on identical adjusted results. Mr. Thompson’s cash incentive compensation was determined based on numerous objective factors contained in multiple annual and multi-year compensation programs applicable to Great American Insurance Company and the business units overseen by Mr. Thompson. Amounts paid to Mr. Thompson each year, including during 2024, represent business results from prior years which may have been affected by subsequent development of the business results. The bonus shown for Mr. Thompson reflects the amounts paid to him during 2024.
Annual Bonus Plan – 2024 Targets and Maximums
Annual Bonus Plan – 2024 Targets and Maximums The target and maximum awards for each participant are set forth in the table below.
Annual Bonus Plan – 2024 Targets and Maximums
| Name | Operating EPS Target ($) | Annual ROE Target (%) | Relative Annual GBVPS Target ($) | Discretionary Target ($) | Total Target ($) | Maximum ($) | | Carl H. Lindner III | 782,000 | 759,000 | 759,000 | — | 2,300,000 | 3,450,000 | | S. Craig Lindner | 782,000 | 759,000 | 759,000 | — | 2,300,000 | 3,450,000 | | John B. Berding | 595,000 | 577,500 | 577,500 | — | 1,750,000 | 2,450,000 | | Brian S. Hertzman | 80,000 | 80,000 | 80,000 | 160,000 | 400,000 | 500,000 | | Mark A. Weiss | 76,000 | 76,000 | 76,000 | 152,000 | 380,000 | 475,000 |
Annual Bonus Plan – 2024 Components
Annual Bonus Plan – 2024 Components Operating EPS is calculated as the Company’s diluted core earnings per share. Annual ROE is calculated as the percentage equal to the Company’s core operating earnings divided by the Company’s shareholders’ equity (excluding accumulated other comprehensive income). Relative Annual GBVPS is defined as annual growth in book value per share, excluding accumulated other comprehensive income (“AOCI”), plus dividends, relative to AFG’s Compensation Peer Group companies. Each of Operating EPS, Annual ROE and Relative Annual GBVPS are as reported to shareholders in the Company’s quarterly earnings releases and exclude certain items that may not be indicative of its ongoing core operations such as the impact of discontinued operations, net realized gains and losses and special items that are not necessarily indicative of operating trends. In setting the 2024 target and maximum levels, the Compensation Committee considered AFG’s 2024 business plan and factors which might impact ongoing earnings, including, but not limited to, competition, market influences, projective competitor performance, governmental regulation and the Board of Directors’ desire to devote resources to other internal corporate objectives, such as acquisitions or start-ups. For each metric, the Committee set the target at levels that would represent very strong Company performance and the maximum at levels that would represent extraordinary performance, both objectively under AFG’s business plan and comparatively relative to its peers’ projected performance.
Annual Bonus Plan – 2024 Components
| Operating EPS | Award as Percentage of Target(1) | Annual ROE | Award as Percentage of Target(1) | Relative Annual GBVPS | Award as Percentage of Target(1) | | Less than $8.80 | 0% | Less than 12% | 0% | (3) | 0% | | $8.80 | 20% | 12% | 20% | (3) | 20% | | $11.00 | 100% | 16% | 100% | (3) | 100% | | $12.10 or more | Maximum(2) | 20% or more | Maximum(2) | (3) | Maximum(2) |
Annual Bonus Plan – 2024 Components
| (1) Where results for any metric fell within performance ranges, the award for the component was to be determined by straight-line interpolation rounded up to the nearest dollar. |
Annual Bonus Plan – 2024 Components
| (2) 150% for the Co-CEOs, 140% for Mr. Berding, and 125% for Mr. Hertzman and Mr. Weiss. |
Annual Bonus Plan – 2024 Components
| (3) The Company’s annual GBVPS must be in the top third of the Compensation Peer Group to earn a target award. A maximum award is earned only in the event that the Company is first among all Compensation Peer Group companies in annual GBVPS. |
Annual Bonus Plan – 2024 Components
For Mr. Hertzman and Mr. Weiss, 40% of the annual cash target award was determined under the discretionary component by the Co-CEOs based on the Co-CEOs’ evaluation of the NEOs relative to overall performance for 2024. The determination for Mr. Hertzman and Mr. Weiss included a consideration of all factors deemed relevant, including, but not limited to, operational, qualitative measurements relating to the development and implementation of strategic initiatives and annual objectives; responses to unexpected developments; the development of management personnel; and the impact of any extraordinary transactions involving or affecting the Company and its subsidiaries.
Annual Bonus Plan – 2024 Component Results and Awards
Annual Bonus Plan – 2024 Component Results and Awards The percentage achievement and award paid to each participant under each component of the Annual Bonus Plan is set forth below.
Annual Bonus Plan – 2024 Component Results and Awards
| | Reported Operating EPS of $10.75 | | Reported Annual ROE of 19.3% | | Relative Annual GBVPS | | Discretionary Award | | | | Award as Percentage of Target (%) | Award ($) | Award as Percentage of Target (%) | Award ($) | Award as Percentage of Target (%) | Award ($) | Award as Percentage of Target (%) | Award ($) | | Carl H. Lindner III | 90.9 | 710,838 | 141.3 | 1,072,467 | 112.5 | 853,875 | — | — | | S. Craig Lindner | 90.9 | 710,838 | 141.3 | 1,072,467 | 112.5 | 853,875 | — | — | | John B. Berding | 90.9 | 540,855 | 133.0 | 768,075 | 110.0 | 635,250 | — | — | | Brian S. Hertzman | 90.9 | 72,720 | 120.6 | 96,480 | 106.25 | 85,000 | 120.0 | 192,000 | | Mark A. Weiss | 90.9 | 69,084 | 120.6 | 91,656 | 106.25 | 80,750 | 120.0 | 182,400 |
Annual Bonus Plan – 2024 Component Results and Awards
The total award, also expressed as a percentage of the target and maximum award, paid to each participant for 2024 under the Annual Bonus Plan was:
Annual Bonus Plan – 2024 Component Results and Awards
| | | Total Award as a Percentage of | | | Name | Total 2024 Award ($) | Target (%) | Maximum (%) | | Carl H. Lindner III | 2,637,180 | 114.7 | 76.4 | | S. Craig Lindner | 2,637,180 | 114.7 | 76.4 | | John B. Berding | 1,944,180 | 111.1 | 79.4 | | Brian H. Hertzman | 446,200 | 111.6 | 89.2 | | Mark A. Weiss | 423,890 | 111.6 | 89.2 |
Senior Executive Long Term Incentive Compensation Plan
Senior Executive Long Term Incentive Compensation Plan The Senior Executive Long Term Incentive Compensation Plan (the “Senior Executive LTIC”) rewards long-term Company performance through cash awards payable upon the achievement of three-year performance goals determined annually by the Compensation Committee. The Compensation Committee sets these three-year performance goals during the first quarter of each three-year period. As such, the Senior Executive LTIC performance goals for the 2022-2024 period discussed below were determined by the Compensation Committee in the first quarter of 2022. Awards under the Senior Executive LTIC utilize two evenly weighted performance criteria: book value per share growth versus the book value per share growth of the group of companies (the “plan companies”) and average annual return on equity growth. The long-term book value per share calculations, for the Company and each plan company, are adjusted to add dividends and other capital distributions made on common shares, exclude accumulated other comprehensive income, and negate the effects of any accounting changes. The awards provide for such adjustments so that accounting changes do not artificially affect book value per share and so that other comprehensive income and the impact of distributions do not influence Company decisions like, for example, the timing and amount of dividends paid in a manner not consistent with a goal of continuing to increase shareholder value. Long-term annual return on equity is defined as the percentage equal to the Company’s core operating earnings divided by the Company’s shareholders’ equity (excluding accumulated other comprehensive income), and the applicable percentage in determining award amounts, if any, is the average return on equity for each of the three years in the performance period. Awards granted under the Senior Executive LTIC to the Co-CEOs and Mr. Berding are provided in the table below. Each of the performance components are equally weighted with one-half of the target amounts and maximum amounts set forth below allocated to each of book value per share growth versus plan companies and average annual return on equity.
Senior Executive Long Term Incentive Compensation Plan
| | | Three-Year Performance Period Ending | Potential Payments | | | Name | Grant Year | | Target ($) | Maximum ($) | | Carl H. Lindner III | 2022 | 12/31/2024 | 2,500,000 | 5,000,000 | | | 2023 | 12/31/2025 | 2,500,000 | 5,000,000 | | | 2024 | 12/31/2026 | 2,500,000 | 5,000,000 | | S. Craig Lindner | 2022 | 12/31/2024 | 2,500,000 | 5,000,000 | | | 2023 | 12/31/2025 | 2,500,000 | 5,000,000 | | | 2024 | 12/31/2026 | 2,500,000 | 5,000,000 | | John B. Berding | 2022 | 12/31/2024 | 1,250,000 | 2,500,000 | | | 2023 | 12/31/2025 | 1,600,000 | 3,200,000 | | | 2024 | 12/31/2026 | 2,000,000 | 4,000,000 |
Senior Executive Long Term Incentive Compensation Plan
The following table shows the performance targets established to earn the minimum and maximum awards under the Senior Executive LTIC for the performance periods ending 2022 – 2026.
Senior Executive Long Term Incentive Compensation Plan
| | Calculation of Award Amount | | | | | Three-Year Performance Period Ending | Long-Term Growth in Book Value Per Share(1) | | Long-Term Return on Equity(2) | | | | Minimum | Maximum | Minimum | Maximum | | 12/31/2022 | (3) | (4) | 10.0% | 14.00% | | 12/31/2023 | (3) | (4) | 10.0% | 14.50% | | 12/31/2024 | (3) | (4) | 11.0% | 15.25% | | 12/31/2025 | (3) | (4) | 11.0% | 16.50% | | 12/31/2026 | (3) | (4) | 11.0% | 16.50% |
Senior Executive Long Term Incentive Compensation Plan
| (1) Based on book value per share growth as compared to the plan companies. No award will be paid for results below the minimum. |
Senior Executive Long Term Incentive Compensation Plan
| (2) For a return on equity greater than the minimum but less than the maximum, the award amount is calculated by applying straight-line interpolation rounded to the nearest whole dollar amount. The target amount is payable at the midpoint between the minimum and maximum. No award will be paid for results below the minimum. |
Senior Executive Long Term Incentive Compensation Plan
| (3) Book value per share growth must exceed that of the lower quartile of that of the plan companies. Target amounts payable for book value per share growth in the top 37.5% of plan companies. |
Senior Executive Long Term Incentive Compensation Plan
| (4) Book value per share growth must exceed that of all plan companies. |
Senior Executive Long Term Incentive Compensation Plan
Under the long-term growth in book value per share component, if the Company’s growth in book value per share over the three-year performance period placed it in the fourth (lowest) quartile of the plan companies, no award for the metric would be payable to any participant. If the Company’s growth in book value per share exceeded all plan companies, each participant would receive the maximum amount payable for the metric (200% of the target amount). If the Company’s growth in book value per share exceeded the fourth (lowest) quartile of the plan companies but did not exceed that of all plan companies, each participant would be entitled to an award (expressed as a percentage of target) calculated by applying straight-line interpolation for growth in book value per share between 0% (for being in the fourth (lowest) quartile of plan companies) and 200% (for growth in book value per share exceeding all plan companies). In order for a participant to receive the target amount, the Company’s growth in book value per share must be in the top 37.5% of the plan companies. As provided in the Senior Executive LTIC, two plan companies that were acquired during the three-year performance period were excluded when calculating awards. After excluding these four companies, the plan companies for the three-year period ended December 31, 2024, were:
Senior Executive Long Term Incentive Compensation Plan
| 1. American International Group, Inc. | | 2. Arch Capital Group Ltd. | | 3. Assurant, Inc. | | 4. Axis Capital Holdings Ltd. | | 5. Chubb Limited | | 6. Cincinnati Financial Corp. | | 7. CNA Financial Corporation | | 8. Employers Holdings, Inc. | | 9. Fairfax Financial Holdings Limited | | 10. Global Indemnity Group, LLC | | 11. The Hanover Insurance Group, Inc. |
Senior Executive Long Term Incentive Compensation Plan
| 12. The Hartford Financial Services Group, Inc. | | 13. Horace Mann Educators Corp. | | 14. Markel Corporation | | 15. Old Republic International Corporation | | 16. ProAssurance Corporation | | 17. RenaissanceRe Holdings Ltd. | | 18. RLI Corp. | | 19. Safety Insurance Group, Inc. | | 20. Selective Insurance | | 21. Travelers Companies, Inc. | | 22. W.R. Berkley Corporation |
Senior Executive Long Term Incentive Compensation Plan
The Company’s growth in book value per share for the period from January 1, 2022 through December 31, 2024 placed it fifth in comparison to the plan companies (entitling each participant to 76.8% of the maximum award for this component). Each Co-CEO received an award of $1,920,000 and Mr. Berding received an award for this component of $960,000 for the performance period. Long-term return on equity awards are based on average annual return on equity for the performance period. For the 2022-2024 performance period, if the return on equity percentage equaled or exceeded 15.25% the participant would receive the maximum award amount attributed to this metric. If the return on equity percentage equals or is less than 11%, the participant would receive no award amount. For a return on equity greater than 11% but less than 15.25%, the award amount will be calculated by applying straight-line interpolation rounded to the nearest whole dollar amount. Each participant’s target award of 50% of the maximum award for the return on equity component would be earned if the Company’s return on equity equaled 13.125% for the three-year period. The Company’s annual average return on equity for 2022-2024 was 20.1%. Each participant was entitled to the maximum award for this component. Each Co-CEO received an award of $2,500,000, and Mr. Berding received an award for this component of $1,250,000. After combining the two components, each of the Co-CEOs received an award of $4,420,000 and Mr. Berding received an award of $2,210,000. These amounts represented 176.8% of the target award and 88.4% of the maximum award. Long-Term Equity Incentive Compensation—Broad-Based Equity Award The Compensation Committee believes long-term equity incentive compensation encourages management to focus on long-term Company performance and provides an opportunity for the NEOs and certain designated key employees to increase their stake in the Company through equity awards that vest over time. The Compensation Committee believes that equity awards represent an important part of AFG’s performance-based compensation system and that they align AFG’s senior executives’ interests with those of its shareholders. Equity awards are generally granted at a regularly scheduled Compensation Committee meeting in February after the market has had the opportunity to assess AFG’s announcement of results of the recently ended year and fourth quarter and key points of the Company’s business plan for the coming year. The Company does not currently grant new awards of stock options, stock appreciation rights or similar option-like instruments. Accordingly, the Company has no specific policy or practice on the timing of such awards in relation to the disclosure of material public information. Annual grants by the Compensation Committee consist of restricted shares awarded to executive officers and certain designated key employees. All restricted shares cliff-vest after four years and contain double-trigger vesting, which limits acceleration of awards to situations where a change in control is accompanied by a qualified termination of employment. In determining the value of annual grants to key employees, the Compensation Committee takes into consideration the dilutive effect to shareholders as well as the expense to AFG as stock-based awards vest. The Compensation Committee believes that several features present in stock-based awards give recipients substantial incentive to maximize AFG’s long-term success. Specifically, the Compensation Committee believes that, because all awards vest over time, with restricted stock awards “cliff” vesting in four years, these awards promote executive retention due to the potential for forfeiture of awards that have not fully vested upon departure from AFG. Equity award levels for participants are determined based on market and compensation peer company data, expense to AFG, the relative benefits to participants of such expense, the performance and overall compensation level of participants and award amounts from previous years. Equity grants vary among participants based on their positions within the Company, and AFG believes that the consideration of these factors results in reasonable grant levels to its NEOs and other employees. Restricted shares granted in 2024 to the NEOs, which are schedule to vest in 2028 under the terms of their award agreements, are set forth in the Grants of Plan-Based Awards Table on page 59 of this proxy statement. Perquisites and Other Personal Benefits Perquisites, such as insurance coverage, the personal use of corporate aircraft, certain entertainment expenses and administrative staff attending to occasional personal matters are made available to AFG’s executive officers. The amounts allocated for administrative matters are estimated based on the time spent and employment cost incurred. The Compensation Committee views the perquisites provided to the NEOs together with all other compensation elements as a component of total compensation and believes that diminishing or eliminating any perquisites would require a corresponding increase in other compensation components. Therefore, the Compensation Committee believes these perquisites, as a component of total executive compensation, to be reasonable and consistent with the overall goal of offering competitive compensation programs. The benefits and the estimated costs to the Company of such benefits are included in the All Other Compensation table below on page 58. During 2024, as in prior years, the Company operated corporate aircraft used for the business travel of management and staff of the Company and its subsidiaries. The Board has encouraged the Co-CEOs to use corporate aircraft for all travel whenever practicable for security, productivity, health, safety and confidentiality reasons. Notwithstanding, the Compensation Committee and the Co-CEOs jointly acknowledge that personal aircraft use is a personal benefit. Each Co-CEO and the President is provided a fixed number of hours per year for personal use (140 flight hours for each Co-CEO and 40 hours for the President) to replace additional cash compensation that would have been paid. In utilizing personal flight hours, on certain occasions, an executive’s spouse, other family members or guests may fly on the corporate aircraft. The flight hour benefit for the Co-CEOs has remained the same since 2020. For taxable benefits, the dollar amounts are included as taxable income to the NEOs, and the Company does not provide tax gross-up payments for any perquisites. See footnote (2) to the “All Other Compensation” table below on page 58 for a discussion of the tax treatment of aircraft benefits. In addition to the flight hour limit, the Compensation Committee also limits the annual insurance benefit, and NEOs reimburse the Company for any amounts exceeding the limit. As discussed above, the Compensation Committee views perquisites as an element of the Co-CEOs’ total compensation and evaluates any increase in perquisites with reference to the entirety of the Co-CEOs’ compensation package. Moreover, the Co-CEOs have not had an increase in base salary, annual incentive target compensation, long-term incentive target compensation, or the target value of their equity compensation in over four years. Mindful of these items, in early 2024, as part of the Compensation Committee’s review of the Co-CEOs compensation package as a whole, the Committee determined to raise the annual insurance benefit to $600,000, representing a $100,000 increase.
Senior Executive Long Term Incentive Compensation Plan
The Company also maintains a Deferred Compensation Plan pursuant to which certain employees of AFG and its subsidiaries (currently those paid $110,000 or more annually) may defer up to 80% of their annual salary and/or bonus. For 2024, participants could elect to have the value of deferrals earn a fixed rate of interest, set annually by the Board of Directors (6.0% in 2024); or earn a return as determined by one or more publicly traded mutual funds. A deferral term of either a fixed number of years or upon termination of employment must be elected at the time of deferral. Under the plan, no federal or state income taxes are paid on deferred compensation. Rather, such taxes will be due upon receipt at the end of the deferral period.
Retirement and Other Related Benefits
| Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Carl H. Lindner III Co-Chief Executive Officer (Co-Principal Executive Officer) | 2024 | 1,250,000 | 1,500,013 | 7,057,180 | 1,762,836 | 11,570,029 | | | 2023 | 1,250,000 | 1,500,054 | 5,308,570 | 1,785,524 | 9,844,148 | | | 2022 | 1,250,000 | 1,500,128 | 8,146,970 | 1,773,301 | 12,670,399 | | S. Craig Lindner Co-Chief Executive Officer (Co-Principal Executive Officer) | 2024 | 1,250,000 | 1,500,013 | 7,057,180 | 1,738,584 | 11,545,777 | | | 2023 | 1,250,000 | 1,500,054 | 5,308,570 | 1,855,942 | 9,914,566 | | | 2022 | 1,250,000 | 1,500,128 | 8,146,970 | 1,740,770 | 12,637,868 | | John B. Berding President of AFG and American Money Management | 2024 | 1,050,000 | 1,125,073 | 4,154,180 | 416,474 | 6,745,727 | | | 2023 | 1,050,000 | 3,125,187 | 2,859,005 | 276,300 | 7,310,492 | | | 2022 | 1,044,231 | 950,036 | 3,953,030 | 220,025 | 6,167,322 | | Brian S. Hertzman Senior Vice President and Chief Financial Officer | 2024 | 525,000 | 400,062 | 446,200 | 108,189 | 1,479,481 | | | 2023 | 500,000 | 320,128 | 261,812 | 110,629 | 1,192,569 | | | 2022 | 460,193 | 320,117 | 431,250 | 108,527 | 1,320,087 | | David L. Thompson, Jr. President and Chief Operating Officer of Great American Insurance Group | 2024 | 770,000 | 600,031 | 917,550 | 196,585 | 2,484,167 | | | 2023 | 700,000 | 500,018 | 632,775 | 174,234 | 2,007,027 | | | 2022 | 610,577 | 500,132 | 437,645 | 158,298 | 1,706,652 | | Mark A. Weiss Senior Vice President and General Counsel | 2024 | 560,000 | 380,116 | 423,890 | 81,257 | 1,445,263 | | | 2023 | 540,000 | 320,128 | 226,432 | 79,785 | 1,166,345 |
2024 Director Compensation Schedule
2024 Director Compensation Schedule
2024 Director Compensation Schedule
| Compensation Element | ($)(1) | | Board Member Annual Retainer | 145,000 | | Lead Independent Director Retainer | 30,000 | | Audit Committee Chair Annual Retainer | 15,000 | | Compensation Committee Chair Annual Retainer | 5,000 | | Corporate Governance Committee Chair Annual Retainer | 5,000 | | Audit Committee Non-Chair Member Annual Retainer | 10,000 | | Attendance Fee per Day for Offsite Meetings | 2,000 | | Annual Restricted Stock Award | 165,000 |
2024 Director Compensation Schedule
| (1) Non-employee directors who become directors during the year receive a pro rata portion of these annual retainers. The Company reimburses non-employee directors for travel and lodging expenses incurred in connection with meeting attendance. The Audit Committee chair does not receive a member retainer in addition to the chair retainer. |
2024 Director Compensation Schedule
Beginning in 2014, after almost 40 years as the Company’s General Counsel, James E. Evans transitioned from an officer and employee of the Company to an executive consultant to the Company. Under his consulting agreement, Mr. Evans agreed to provide consulting services to the Company and its subsidiaries and affiliates. Mr. Evans’ duties include being required to make himself available to answer questions and consult with the Company upon reasonable request and where his cooperation is required or requested to assist the Company in connection with litigation or regulatory inquiries relating to matters arising while he served as an officer of the Company. The Company provides Mr. Evans with office space and administrative support as necessary for the provision of consulting services. While the initial term of the consulting arrangement was three years, the Board of Directors has annually extended the agreement in one-year increments, and the consulting fee in effect for 2024 was $150,000. To date, Mr. Evans has consulted on a constant and consistent basis, primarily in the Company’s offices but at times by phone, with the Co-CEOs, General Counsel and other members of senior management on a wide range of matters, including strategic transactions, capital management and other matters important to the Company’s shareholders. The Corporate Governance Committee has determined that Mr. Evans’s duties as an executive consultant to the Company require a significant time commitment, in excess of his duties as a director, and are provided on a constant basis not in connection with Board or Committee meetings. The Corporate Governance Committee has further determined that the consulting fees paid to Mr. Evans are reasonable in light of the services that Mr. Evans provides and that shareholders benefit from Mr. Evans’s continuing services to the Company. As noted above, Mr. Evans has informed the Board that he does not intend to stand for reelection at the 2025 Annual Meeting. He will, however, continue to contribute to the Company in his role as Executive Consultant. The table below shows the fees actually paid to each non-employee director in 2024.
2024 Director Compensation
2024 Director Compensation
2024 Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Award ($)(1) | All Other Compensation ($)(2) | Total ($) | | James E. Evans | 150,500 | 165,000 | 153,254 | 468,754 | | Gregory G. Joseph | 193,000 | 165,000 | — | 358,000 | | Mary Beth Martin | 155,500 | 165,000 | — | 320,500 | | Amy Y. Murray | 160,500 | 165,000 | — | 325,500 | | Roger K. Newport(3) | 135,500 | 165,000 | — | 300,500 | | Evans N. Nwankwo | 150,500 | 165,000 | — | 315,500 | | William W. Verity | 147,500 | 165,000 | — | 312,500 | | John I. Von Lehman | 152,500 | 165,000 | — | 317,500 |
2024 Director Compensation
| (1) Calculated as the compensation cost for financial statement reporting purposes with respect to the annual stock grant under the Non-Employee Director Compensation Plan. See “Security Ownership of Certain Beneficial Owners and Management” on page 26 for detail on beneficial ownership of AFG common shares by directors. |
2024 Director Compensation
| (2) All Other Compensation consists of amounts paid to Mr. Evans under a consulting arrangement, as amended, entered into between the Company and Mr. Evans in connection with his transition from executive officer and employee of the Company to executive consultant. Under the arrangement, Mr. Evans received a consulting fee in 2024 of $150,000 as well as parking and related expenses as compensation in addition to amounts received in accordance with the Company’s compensation policies for non-employee directors. |
2024 Director Compensation
| (3) Mr. Newport joined the Board on February 27, 2024. |
2024 Director Compensation
Ratio of Co-CEO Total Pay to “Median Employee” Total Pay Under rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Company is providing the following information about the relationship of the annual total compensation of its employees and the annual total compensation of the Co-CEOs. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with SEC rules. This information should be read together with the “Compensation Discussion and Analysis” beginning on page 40. AFG identified the “median employee” as of December 31, 2023. The median employee was a full-time, salaried employee located in the United States. AFG’s employee base may differ from other companies in the insurance and financial service industry. In total, at December 31, 2023, AFG employed a total of 922 part-time seasonal insurance adjusters and other part-time employees (approximately 11% of all employees) which are included in the total employee numbers, but all earned less from the Company than the median employee in 2024. As a result, the ratio set forth below may not be correlative to the ratio for other companies comparable in size or industry because of differences in operations. AFG utilized the following methodology and the material assumptions, adjustments, and estimates:
2024 Director Compensation
| • | As of December 31, 2023, our total employee population consisted of 8,520 individuals working at our parent company and consolidated subsidiaries, with approximately 5.3% located in Mexico. |
2024 Director Compensation
| • | SEC rules permit us to exclude up to 5% of our non-U.S. employees when identifying the median employee. AFG excluded employees in England (60 employees), Ireland (25 employees), Singapore (99 employees) and Canada, Spain and Denmark (total of 15 employees), which collectively represented less than 2.4% of AFG’s employees. |
2024 Director Compensation
| • | For the remaining employees, AFG compiled total 2023 wages, tips, and other compensation from 2023 year-end tax reporting data. For amounts paid in foreign currencies, AFG converted 2023 wages based on the conversion rate on the last business day of 2023. |
2024 Director Compensation
| • | AFG calculated the median employee’s 2024 total compensation using the same methodology as used to determine the Co-CEOs total compensation as set forth in the Summary Compensation Table on page 57 of this proxy statement. |
2024 Director Compensation
| • | With respect to the 2024 total compensation of each Co-CEO, the Company used the amount reported in the “Total” column of the Summary Compensation Table. |
2024 Director Compensation
The 2024 total compensation for the median employee (other than the Co-CEOs) was $99,192, and the 2024 total compensation of each Co-CEO is set forth under “Total Compensation” in the Summary Compensation Table. Based on this information, the ratios of 2024 total compensation of each Co-CEO to the 2024 total compensation of the median employee were 117 to 1. PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the following table reports the compensation of our Principal Executive Officer (PEO), and the average compensation of our other Named Executive Officers (Other NEOs) as reported in the Summary Compensation Table for the past three fiscal years, as well as their “compensation actually paid” as calculated pursuant to SEC rules and certain performance measures required by such rules.
2024 Director Compensation
| Year | Summary Compensation Table Total Compensation for PEO ($)(1) | | Compensation Actually Paid to PEO ($)(2) | | Average Summary Compensation Table Total Compensation for Other NEOs ($)(3) | Average Compensation Actually Paid to Other NEOs ($)(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income(5) (millions) ($) | Core EPS ($) | | | Carl H. Lindner III | S. Craig Lindner | Carl H. Lindner III | S. Craig Lindner | | | Total Shareholder Return ($) | Peer Group(4) Total Shareholder Return ($) | | | | 2024 | 11,570,059 | 11,545,807 | 12,918,695 | 12,894,443 | 3,038,664 | 3,609,210 | 207.26 | 222.43 | 887 | 10.75 | | 2023 | 9,844,148 | 9,914,566 | 9,311,061 | 9,381,479 | 2,919,108 | 2,775,385 | 167.51 | 164.49 | 852 | 10.56 | | 2022 | 12,670,399 | 12,637,868 | 13,456,927 | 13,424,396 | 2,854,120 | 3,133,065 | 181.22 | 148.53 | 898 | 11.63 | | 2021 | 12,449,582 | 12,341,739 | 16,851,687 | 16,743,844 | 2,639,597 | 4,137,031 | 163.26 | 124.95 | 1,995 | 11.59 | | 2020 | 9,631,170 | 9,596,241 | 8,637,205 | 8,602,276 | 1,991,354 | 1,659,485 | 83.81 | 106.33 | 732 | 8.44 |
2024 Director Compensation
| (1) For 2020 through 2024, our PEOs were the Co-CEOs, Carl H. Lindner III and S. Craig Lindner. The dollar amounts reported in this column are the amounts of total compensation reported for the Co-CEOs for each corresponding year in the “Total” column of the Summary Compensation Table. |
2024 Director Compensation
| (2) “Compensation actually paid” to our Co-CEOs and Other NEOs in each of 2024, 2023, 2022, 2021 and 2020 reflects the respective amounts set forth in the “Total” column of the Summary Compensation Table, as adjusted as set forth in the table below (dollars in thousands), in accordance with SEC rules. The dollar amounts reflected in the “Total” column of the Summary Compensation Table and above do not reflect the actual amount of compensation earned by or paid to our Co-CEOs and Other NEOs during the applicable year. For information regarding the decisions made by our management and Compensation Committee in regards to the NEO compensation for each fiscal year, please see the Compensation Discussion & Analysis section of this proxy statement. |
2024 Director Compensation
| Covered Year | 2024 | | | 2023 | | | 2022 | | | 2021 | | | 2020 | | | | | Carl H. Lindner III ($) | S. Craig Lindner ($) | Non-PEO NEOs Average ($) | Carl H. Lindner III ($) | S. Craig Lindner ($) | Non-PEO NEOs Average ($) | Carl H. Lindner III ($) | S. Craig Lindner ($) | Non-PEO NEOs Average ($) | Carl H. Lindner III ($) | S. Craig Lindner ($) | Non-PEO NEOs Average ($) | Carl H. Lindner III ($) | S. Craig Lindner ($) | Non-PEO NEOs Average ($) | | Summary Compensation Table “Total” | 11,570.1 | 11,545.8 | 3,038.7 | 9,844.1 | 9,914.6 | 2,919.1 | 12,670.4 | 12,637.9 | 2,854.1 | 12,449.6 | 12,341.7 | 2,639.6 | 9,631.2 | 9,596.2 | 1,991.4 | | Less: Stock Award Values Reported in Summary Compensation Table for Covered Year | (1,500.0) | (1,500.0) | (626.3) | (1,500.1) | (1,500.1) | (1,066.4) | (1,500.1) | (1,500.1) | (592.6) | (1,500.1) | (1,500.1) | (538.8) | (1,500.1) | (1,500.1) | (507.6) | | Plus: Fair Value of Stock Awards Granted in Covered Year | 1,627.0 | 1,627.0 | 679.3 | 1,349.3 | 1,349.3 | 1,018.1 | 1,537.5 | 1,537.5 | 607.4 | 1,853.5 | 1,853.5 | 665.8 | 1,260.8 | 1,260.8 | 426.6 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years | 650.3 | 650.3 | 292.5 | (718.8) | (718.8) | (210.0) | (1.7) | (1.7) | (0.6) | 2,126.9 | 2,126.9 | 718.0 | (975.7) | (975.7) | (324.8) | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in Covered Year | 111.4 | 111.4 | 29.1 | (89.5) | (89.5) | (22.8) | (25.9) | (25.9) | (8.2) | 341.1 | 341.1 | 110.9 | (8.4) | (8.4) | (2.7) | | Dividends Paid during Covered Year on Unvested Stock Awards | 460.0 | 460.0 | 195.9 | 425.9 | 425.9 | 137.4 | 776.7 | 776.7 | 273.0 | 1,580.7 | 1,580.7 | 541.6 | 229.5 | 229.5 | 76.6 | | Compensation Actually Paid | 12,918.7 | 12,894.4 | 3,609.2 | 9,311.1 | 9,381.5 | 2,775.4 | 13,456.9 | 13,424.4 | 3,133.1 | 16,851.7 | 16,743.8 | 4,137.0 | 8,637.2 | 8,602.3 | 1,659.5 |
2024 Director Compensation
| (3) For 2024 and 2023, the Other NEOs were John B. Berding, Brian S. Hertzman, David L. Thompson, Jr. and Mark A. Weiss. For 2022, the Other NEOs were John B. Berding, Brian S. Hertzman, Vito C. Peraino and David L. Thompson, Jr. For 2021 and 2020, our Other NEOs were John B. Berding, Michelle A. Gillis, Brian S. Hertzman and Vito C. Peraino. |
2024 Director Compensation
| (4) For the relevant fiscal year, the dollar amounts reported represent the cumulative total shareholder return (TSR) of the S&P 500 Property & Casualty Index (“Peer Group TSR”) for the measurement periods ending on December 31 of each of 2024, 2023, 2022, 2021 and 2020, respectively. |
2024 Director Compensation
| (5) The dollar amounts reported represent the amount of net income (loss) reflected in our consolidated audited financial statements in the Company’s Annual Reports on Form 10-K for each of the years ended December 31, 2024, 2023, 2022, 2021 and 2020, respectively. |
2024 Director Compensation
The most important financial performance measures that link “compensation actually paid” to named executive officers in the applicable year to company performance are listed below. For a description of these financial measures, see pages 48-56.
2024 Director Compensation
| Most Important Performance Measures | | Core Earnings per Share | | Book Value per Share Growth vs. Industry Companies One Year and Three Year | | Core Return on Equity One Year and Three Year |
2024 Director Compensation
Relationship Between Compensation Actually Paid and Performance Measures In the “Compensation Discussion and Analysis” section beginning on page 40 of this proxy statement, we provide greater detail on the elements of our executive compensation program and our “pay-for-performance” compensation philosophy. We believe the Company’s executive compensation program and the executive compensation decisions included in the Summary Compensation Table and related disclosures appropriately reward our Co-CEOs and the Other NEOs for Company and individual performance, assist the Company in retaining our senior leadership team and support long-term value creation for our shareholders. The “compensation actually paid” in each of the years reported above and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance” as the “compensation actually paid” fluctuated year-over-year, primarily due to the result of stock performance and dividends paid and varying levels of achievement against pre-established performance goals. Moreover, awards that may be earned under the Senior Executive Long-Term Incentive Compensation Plan, which represent a substantial percentage of target and maximum incentive compensation for the Co-CEOs payable each year, relate to performance results over a three-year period and may not specifically align the Company’s performance measures with “compensation actually paid” in a particular year. Co-CEO compensation in the tables below are averages of the compensation paid to our Co-CEOs in the applicable year. Relationship Between Compensation Actually Paid to our Co-CEOs and the Average of the Compensation Actually Paid to the Other NEOs and the Company’s Cumulative TSR and Comparison of Company’s Cumulative TSR and Peer Group TSR. The table below reflects the relationship between the “compensation actually paid” for the Company’s Co-CEOs and the average Other NEOs versus the Company’s TSR and the peer group TSR, assuming an initial fixed investment of $100 for the years ended December 31, 2024, 2023, 2022, 2021 and 2020. Relationship Between Compensation Actually Paid to our Co-CEOs and the Average of the Compensation Actually Paid to the Other NEOs and the Company’s Net Income. The table below reflects the relationship between the “compensation actually paid” for the Company’s Co-CEOs and the average Other NEOs versus the Company’s Net Income (in thousands) for the year ended December 31, 2024, 2023, 2022, 2021 and 2020. Net income for 2021 includes the sale of the annuity business to Massachusetts Mutual Life Insurance Company for approximately $3.5 billion of after-tax proceeds. Relationship Between Compensation Actually Paid to our Co-CEOs and the Average of the Compensation Actually Paid to the Other NEOs and the Company’s Core Earnings Per Share. The table below reflects the relationship between the “compensation actually paid” for the Company’s Co-CEOs and the average Other NEOs versus the Company’s Core EPS for the years ended December 31, 2024, 2023, 2022, 2021 and 2020. EQUITY COMPENSATION PLAN INFORMATION The following reflects certain information about common shares authorized for issuance at December 31, 2024, under the Company’s equity compensation plans.
2024 Director Compensation
| Plan category | (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights | (b) Weighted-average exercise price of outstanding options, warrants, and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) | | Equity compensation plans approved by security holders | 18,932(2) | $52.33 | 2,773,457(1) | | Equity compensation plans not approved by security holders | — | — | — | | Total | 18,932 | $52.33 | 2,773,457 |
2024 Director Compensation
| (1) Includes 2.3 million shares issuable under the Company’s equity incentive plans, 399,511 shares issuable under AFG’s Employee Stock Purchase Plan and 36,286 shares issuable under AFG’s Non-Employee Directors Compensation Plan. |
2024 Director Compensation
| (2) These 18,932 shares related to stock options that, as of March 1, 2025, had expired or been exercised. The Company now has no outstanding stock options. |
2024 Director Compensation
| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on Thursday, May 22, 2025. The Proxy Statement and Annual Report to Shareholders and Form 10-K are available at www.AFGinc.com. |
Do I have an opportunity to cumulate my votes for director nominees?
Do I have an opportunity to cumulate my votes for director nominees? Cumulative voting allows a shareholder to multiply the number of shares owned on the record date by the number of directors to be elected and to cast the total for one nominee or distribute the votes among the nominees as the shareholder desires. Shareholders of the Company have cumulative voting rights in the election of directors if certain conditions are met. In order for cumulative voting to apply, notice of cumulative voting must be given in writing to the Company’s Secretary not less than 48 hours before the time fixed for the holding of the meeting. As of the date of this proxy statement, the Company has not received a notice from any shareholder requesting cumulative voting. If proper notice of cumulative voting is received by the Company, the 12 nominees who receive the greatest number of votes will be elected, subject to the tender of resignation and related procedures set forth above under, “What vote is required to approve each proposal” with respect to incumbent directors who fail to receive more votes in favor than votes withheld. The authority solicited by this proxy statement includes discretionary authority to cumulate votes in the election of directors. If cumulative voting is in effect with respect to the election of directors, the named proxies reserve the right to cumulate the votes represented by the proxies they receive and distribute such votes in accordance with their sole discretion, except that shareholders’ votes will not be cast for a nominee as to whom such shareholder instructs that such votes be cast “AGAINST” or “ABSTAIN.” Other Matters Copies of Annual Report on Form 10-K The Company makes available on its website all of its filings that are made electronically with the Securities and Exchange Commission (“SEC”), including Forms 10-K, 10-Q and 8-K. To access these filings, go to the Company’s website (www.AFGinc.com), click on “Investor Relations” on the home page and select “Financial Information.” Copies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, including financial statements and schedules, as filed with the SEC, are also available without charge to shareholders upon written request addressed to: Investor Relations American Financial Group, Inc. Great American Insurance Group Tower 301 East Fourth Street Cincinnati, Ohio 45202 Submitting Shareholder Proposals for the 2026 Annual Meeting of Shareholders Under the rules and regulations of the SEC, any proposal that a shareholder of the Company intends to present at the annual meeting of shareholders to be held in 2026 and which such shareholder desires to have included in the Company’s proxy materials for such meeting must be received by the Secretary of the Company not less than 120 calendar days before the one-year anniversary date of this year’s proxy statement, or December 5, 2025. Our Regulations, as they may be amended from time to time, may contain additional requirements for matters to be properly presented at annual meetings of shareholders. The proxy card used by AFG for the annual meeting typically grants authority to management to vote in its discretion on any matters that come before the meeting for which adequate notice has not been received. In order for a notice to be deemed adequate for the 2026 annual meeting, it must be received by February 18, 2026. Shareholders wishing to nominate a director candidate must provide written notice at least 90 and not more than 120 days prior to the annual meeting to the Secretary of the Company setting forth or accompanied by: (1) certain biographical, stock ownership and investment intent disclosures about the proposed nominee as set forth in the Regulations; (2) certain biographical, stock ownership and hedging or similar activity disclosures about the shareholder giving the notice and specified persons associated with such shareholder as set forth in the Regulations; (3) verification of the accuracy or completeness of any nomination information at the Company’s request; (4) a statement that a nomination that is inaccurate or incomplete in any manner shall be disregarded; (5) a representation that the shareholder was a record holder of the Company’s voting stock and intended to appear, in person or by proxy, at the meeting to make the nomination; and (6) the consent of each such nominee to serve as director if elected. In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees at the 2026 annual meeting must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than December 5, 2025.