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1.
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To elect 12 directors;
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2.
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To ratify our independent registered public accounting firm; and
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3.
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To approve on an advisory basis our named executive officer compensation.
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Important Notice
Contingent Remote Access: Due to the emerging public health impact of the coronavirus (COVID-19), we will monitor the need to allow participation or attendance solely by means of remote communication. In that event, details on how to participate will be set forth in a press release issued by the Company and available at www.AFGinc.com. If you plan to attend the meeting, please check our website one week prior to the meeting for details. |
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i
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ii
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to
Be Held on Wednesday, May 20, 2020. The Proxy Statement and Annual Report to Shareholders and Form 10-K (the “Proxy Materials”) are available at www.AFGinc.com. |
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2020 Proxy Statement | General Information
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1
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2020 Proxy Statement | General Information
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2
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•
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“FOR” the election of the 12 nominees proposed for the Board of Directors;
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•
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“FOR” the ratification of the Company’s independent registered public accounting firm; and
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“FOR” the approval, on an advisory basis, of compensation of our named executive officers as disclosed in this proxy statement.
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2020 Proxy Statement | General Information
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3
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2020 Proxy Statement | General Information
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4
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Carl H. Lindner III
Age: 66 Director Since: 1991 |
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Mr. Lindner has been Co-Chief Executive Officer since January 2005, and since 1996, he has served as Co-President of the Company. Until 2010, for over ten years, Mr. Lindner served as President, and since 2010, Mr. Lindner has served as CEO of AFG’s Property and Casualty Insurance Group and has been principally responsible for the Company’s property and casualty insurance operations. The Board believes that Mr. Lindner’s familiarity with the Company as a whole, as well as his experience and expertise in its core property and casualty insurance businesses, makes his service on the Board of Directors extremely beneficial to the Company.
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S. Craig Lindner
Age: 65 Director Since: 1985 |
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Mr. Lindner has been Co-Chief Executive Officer since January 2005, and since 1996, he has served as Co-President of the Company. Mr. Lindner served as President of Great American Financial Resources, Inc., a subsidiary of the Company, for more than ten years prior to 2018 when he was elected Chief Executive Officer and has been principally responsible for the Company’s annuity operations. Until 2011, for over ten years, Mr. Lindner served as President of American Money Management Corporation (“AMMC”), a subsidiary that provides investment services for the Company and certain of its affiliated companies, and Mr. Lindner continues to be primarily responsible for the Company’s investment portfolio. The Board believes that Mr. Lindner’s familiarity with the Company as a whole, as well as his experience and expertise in its core annuity operations and the Company’s investment portfolio, makes his service on the Board of Directors extremely beneficial to the Company. Mr. Lindner and Carl H. Lindner III are brothers.
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2020 Proxy Statement | Proposals
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5
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Gregory G. Joseph
Lead Independent Director Since: 2019 Age: 57 Director Since: 2008 Board Committees: Audit (Chair) |
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Mr. Joseph, an attorney, has been an executive and a principal of various automotive retailers in the Greater Cincinnati, Ohio area known as the Joseph Automotive Group for more than five years. Since 2005, Mr. Joseph has served on the Board of Trustees of Xavier University, a private university located in Cincinnati, Ohio. He served on the board of directors of Infinity Property & Casualty Corporation, an insurance company primarily offering personal automobile insurance which was purchased by Kemper Corp. in 2018, from 2003 to 2008, the last two years as the lead director. Mr. Joseph’s service as a lead director of a publicly traded provider of insurance products provided him with significant knowledge of and experience in the business operations of a publicly-traded insurance holding company, which is beneficial to the Company in light of the many issues applicable to the insurance industry. Additionally, Mr. Joseph’s extensive background and experience at public and private businesses enable him to provide to the Board insights and advice on the broad variety of situations and issues that the Board faces.
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Kenneth C. Ambrecht
Age: 74 Director Since: 2005 Board Committees: Compensation Corporate Governance |
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Mr. Ambrecht has extensive corporate finance experience having worked in the U.S. capital markets for over 30 years. In December 2005, Mr. Ambrecht organized KCA Associates LLC, through which he serves as a consultant to several companies, advising them with respect to financial transactions. From July 2004 to December 2005, he served as a Managing Director with the investment banking firm First Albany Capital. For more than five years prior, Mr. Ambrecht was a Managing Director with Royal Bank Canada Capital Markets. Prior to that post, Mr. Ambrecht worked with the investment bank Lehman Brothers as Managing Director of its capital markets division. For more than five years, Mr. Ambrecht has been a member of the Boards of Directors of Spectrum Brands, Inc., a global consumer products company, and Fortescue Metals Group Limited, an Australian mining company. He previously served on the Board of Directors of Dominion Petroleum Ltd., a Bermuda oil and gas reserves company, and Great American Financial Resources, Inc. The Board believes that Mr. Ambrecht’s knowledge and experience in the areas of corporate finance, capital markets, capital structures and investment portfolio management benefit the Company in light of its businesses.
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John B. Berding
Age: 57 Director Since: 2012 |
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Mr. Berding was elected President of AMMC in January 2011. Prior to his election as President, he held a number of investment-related executive positions with AMMC and other AFG subsidiaries. Mr. Berding has over 30 years of experience as an investment professional, and he has spent his entire career with the Company and its affiliates. The Board values Mr. Berding’s knowledge of financial markets and investment management as well as his specific knowledge of the Company’s investment portfolio and strategy and has determined that his ability to contribute his experience on a constant basis as a member of the Board are invaluable to the Company.
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2020 Proxy Statement | Proposals
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6
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Joseph E. (Jeff) Consolino
Age: 53 Director Since: 2012 |
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Mr. Consolino joined the Board of Directors in December 2012 and became Executive Vice President and Chief Financial Officer of the Company in February 2013. From February 2013 until its acquisition by the Company in November 2016, he served as Chairman of the Board of the Company’s majority-owned subsidiary, National Interstate Corporation. In December 2015, Mr. Consolino was appointed to serve as Chairman of the Board of Neon Capital Limited, a subsidiary of the Company. Prior to joining the Company, Mr. Consolino served as President and Chief Financial Officer of Validus Holdings, Ltd., a Bermuda-based property and casualty (re)insurance company. Mr. Consolino also served as Chief Executive Officer, President and founding Director of PαCRe Ltd., a Bermuda-based underwriter of top-layer property catastrophe (re)insurance during his time as an executive officer of Validus through December 2015, when PαCRe Ltd. ceased operations and returned all capital to its shareholders. Prior to joining Validus in March 2006, Mr. Consolino served as a managing director in Merrill Lynch’s investment banking division. While at Merrill Lynch, Mr. Consolino specialized in insurance company advisory and financing transactions. He currently serves as a director of AmWINS Group, Inc., a wholesale insurance broker based in Charlotte, North Carolina. Until 2015, Mr. Consolino served on the boards of directors of Validus and PαCRe Ltd and also previously served as a member of the Board of Overseers of the School of Risk Management at St. John's University. The Board believes that Mr. Consolino’s experience serving as president and chief financial officer for both a property and casualty insurance company group and a publicly-traded holding company, knowledge of its operations and his over 25 years of experience in insurance-related financial matters give him unique qualifications to serve as a member of the Board.
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Virginia “Gina” C.
Drosos Age: 57 Director Since: 2013 Board Committees: Audit Corporate Governance |
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Ms. Drosos began serving as Chief Executive Officer of Signet Jewelers Limited, a specialty retail jeweler, in August 2017, after having served on the Board of Directors of the company for more than five years. She previously served as Chief Executive Officer, from 2014-2017, and President, from 2013-2017, of Assurex Health, a personalized medicine company specializing in pharmacogenomics for neuropsychiatric and other disorders. Beginning in 1987, Ms. Drosos worked for the Procter & Gamble Company, a leading multinational manufacturer of consumer packaged goods. During her 25-year career at Procter & Gamble, she held numerous positions of increasing responsibility, including as Group President of Global Female Beauty, Beauty and Grooming from 2010 until August 2011 and most recently as Group President, Global Beauty Care, until her retirement from the company in September 2012. As a current chief executive officer of a public company and as a former executive at one of the world’s leading consumer packaged goods organizations, Ms. Drosos brings valuable skills and insights to the Company. She possesses a broad background in strategic, business and financial planning and operations, both nationally and internationally.
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2020 Proxy Statement | Proposals
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7
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James E. Evans
Age: 74 Director Since: 1985 |
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Mr. Evans has served as an Executive Consultant to the Company since 2014. From 1994 through 2013, Mr. Evans served as Senior Vice President of the Company, and he also served as General Counsel until March 2012 when he was elected Executive Counsel. Prior to that, he served as Vice President and General Counsel of American Financial Corporation, the predecessor to AFG, beginning in 1976. Mr. Evans also previously served on the Boards of Directors of The Penn Central Corporation, Citicasters, Inc. and other companies affiliated with the Company. He began his career in the private practice of law with Keating Muething & Klekamp PLL in 1971. The Board believes that Mr. Evans’ many years of experience with complex legal and business issues involving the Company specifically, as well as his legal and business expertise generally, render his Board service invaluable to the Company.
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Terry S. Jacobs
Age: 77 Director Since: 2003 Board Committees: Compensation (Chair) Audit |
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Mr. Jacobs has served as Chairman and CEO of The JFP Group, LLC, a real estate development company, since September 2005. From its founding in 1996 until September 2005, Mr. Jacobs was Chairman of the Board and CEO of Regent Communications, Inc., a public holding company in the radio broadcasting business. From September 2010 through September 2015, he served as non-executive Chairman of the Board of Adelante Media Group, LLC, a private company which owns and operates radio and television stations and specializes in Spanish language programming. Mr. Jacobs serves as Chair of the Actuarial Committee and a member of the Audit Committee of the Ohio Bureau of Workers’ Compensation (BWC) Board of Directors, is a Fellow of the Casualty Actuarial Society, a professional organization focused on applying actuarial science to property, casualty and similar risk exposures and is a Member of the American Academy of Actuaries. Mr. Jacobs’ principal executive officer experience qualifies him for membership on the Company’s Board and as an “audit committee financial expert” under SEC guidelines. In his career, Mr. Jacobs has significant chief executive officer experience and has held board positions for 10 public companies, six private companies and nine charitable organizations. Mr. Jacobs has significant experience in understanding and critically assessing risks in the property and casualty insurance industry, which the Board believes is valuable to the Company.
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Mary Beth Martin
Age: 57 Director Since: 2019 |
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Ms. Martin has served as the Executive Director of the Farmer Family Foundation in Cincinnati, Ohio for the past 12 years. 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, Music Hall Revitalization Corporation, Teach for America Southwest 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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2020 Proxy Statement | Proposals
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8
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William W. Verity
Age: 61 Director Since: 2002 Board Committees: Corporate Governance (Chair) Compensation |
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Mr. Verity has been President of Verity Investment Partners, an investment management company, since January 1, 2002, and prior to that, he was a partner of Pathway Guidance L.L.C., an executive consulting firm, from October 2000. Previously, Mr. Verity was Chairman and Chief Executive Officer of ENCOR Holdings, Inc., a developer and manufacturer of plastic molded components and worked as an associate in corporate finance at Alex. Brown & Sons, an investment bank, from 1985 to 1987. 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 ten 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, Mr. Verity’s 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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John I. Von Lehman
Age: 67 Director Since: 2008 Board Committees: Audit Corporate Governance |
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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 December 31, 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 in light of its businesses.
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2020 Proxy Statement | Proposals
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9
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2019
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2018
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Audit fees (1)
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$8,910,000
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$8,541,000
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Audit related fees
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75,000
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—
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Tax fees (2)
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567,000
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628,000
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All other fees (3)
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409,000
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425,000
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Total
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$9,961,000
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$9,594,000
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(1)
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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)
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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)
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These fees relate primarily to agreed-upon procedure engagements for certain collateralized loan obligation structures managed by AFG.
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2020 Proxy Statement | Proposals
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10
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2020 Proxy Statement | Proposals
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11
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Age
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Position
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Director or
Executive Since |
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Carl H. Lindner III
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66
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Co-Chief Executive Officer, Co-President and Director
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1979
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S. Craig Lindner
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65
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Co-Chief Executive Officer, Co-President and Director
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1980
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Kenneth C. Ambrecht
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74
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Director
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2005
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John B. Berding
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57
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President of American Money Management Corporation and Director
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2012
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Joseph E. (Jeff) Consolino
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53
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Executive Vice President, Chief Financial Officer, Chairman of the Board of Neon Capital Limited and Director
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2012
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Gregory G. Joseph
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57
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Lead Independent Director
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2008
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Virginia “Gina” C. Drosos
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57
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Director
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2013
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James E. Evans
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74
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Director
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1976
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Terry S. Jacobs
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77
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Director
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2003
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Mary Beth Martin
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57
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Director
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2019
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William W. Verity
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61
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Director
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2002
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John I. Von Lehman
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67
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Director
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2008
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Michelle A. Gillis
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51
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Senior Vice President and Chief Administrative Officer
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2013
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Vito C. Peraino
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64
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Senior Vice President and General Counsel
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2012
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2020 Proxy Statement | Company Information
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12
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Name of Beneficial Owner/Group
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Common Shares
Beneficially Owned (1) |
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Percent of Class
(* means less than 1%) |
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Directors and Named Executive Officers
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Carl H. Lindner III (2)
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5,450,844
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6.1%
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S. Craig Lindner (3)
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4,919,427
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5.5%
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Kenneth C. Ambrecht
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37,157
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*
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John B. Berding (4)
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170,007
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*
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Joseph E. (Jeff) Consolino
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222,019
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*
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Virginia “Gina” C. Drosos
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9,120
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*
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James E. Evans
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122,233
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*
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Terry S. Jacobs
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3,500
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*
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Gregory G. Joseph (5)
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105,860
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*
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Mary Beth Martin
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1,479
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*
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William W. Verity
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6,678
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*
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John I. Von Lehman
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10,806
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*
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Michelle A. Gillis
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76,154
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*
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Vito C. Peraino (6)
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98,947
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*
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All Directors and Executive Officers as a group (14 persons) (7)
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10,877,167
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12.1%
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Other Beneficial Owners of More than 5% of the Common Shares
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Edyth B. Lindner (8)
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5,865,909
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6.5%
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BlackRock, Inc. (9)
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9,061,940
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10.1%
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The Vanguard Group (10)
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7,628,304
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8.5%
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(1)
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Includes the following numbers of shares that may be acquired within 60 days of March 1, 2020 through the exercise of options held by such person: Carl H. Lindner III – 150,000; S. Craig Lindner – 100,000; John B. Berding – 113,334; Joseph E. (Jeff) Consolino – 5,000; Michelle A. Gillis – 39,048 and Vito C. Peraino – 4,000. Shares held in the Company’s 401(k) Retirement and Savings Plan (RASP) and detailed in footnotes (3) and (4) are provided as of March 1, 2020. For Mr. Berding, shares owned excludes shares held in the RASP, for which each serves on the Administrative Plan Committee, other than those shares allocated to his personal RASP account.
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(2)
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Includes 2,623,593 shares held in his trust over which he holds voting and dispositive power; 343,162 shares held by a trust over which his spouse has voting and dispositive power; 838,480 shares held in a limited liability company over which shares he holds dispositive power; 355,585 shares held by a charitable foundation over which he shares voting and dispositive power with his brother, S. Craig Lindner and his mother, Edyth B. Lindner; 3,984 shares held in trusts for family members over which he holds voting and dispositive power; 1,000,000 shares held in a trust over which he holds voting power; and 136,040 shares held in two charitable foundations over which he and/or his spouse have or share voting and dispositive power.
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(3)
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Includes 3,095,292 shares held in his trust over which he has voting and dispositive power; 36,166 shares held in the RASP; 113,229 shares held by a trust over which his spouse has voting and dispositive power; 355,585 shares held by a charitable foundation over which he shares voting and dispositive power with his brother, Carl H. Lindner III and his mother, Edyth B. Lindner; 1,000,000 shares held in a trust over which he holds voting power; and 219,155 shares held by a charitable foundation over which he shares voting and dispositive power with his spouse.
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(4)
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Includes 1,484 shares held in the RASP and 233 shares held by a family trust.
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(5)
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Includes 64,977 shares held by companies in which he is a minority shareholder and for which he serves as an executive officer or director, 3,000 shares held by a family partnership in which he holds a 25% interest and 810 shares held as trustee in a trust for the benefit of family members.
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(6)
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Includes 19,558 shares held by spouse.
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2020 Proxy Statement | Company Information
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13
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(7)
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Shares held by all directors, nominees and executive officers as a group is calculated by counting shares over which Carl H. Lindner III and S. Craig Lindner share voting and dispositive power only once.
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(8)
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Includes 2,510,324 shares held in her trust over which she has voting and dispositive power. Also includes 355,585 shares held in a charitable foundation over which she shares voting and dispositive power with her sons, Carl H. Lindner III and S. Craig Lindner and 3,000,000 shares held in a trust over which she has dispositive power. The address for Mrs. Lindner is 301 East Fourth Street, Cincinnati, Ohio 45202.
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(9)
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Based solely on information contained in a Schedule 13G amendment filed with the SEC on February 4, 2020 by BlackRock, Inc. reporting sole voting power of 8,528,912 shares and sole dispositive power of 9,061,940 shares. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY, 10055.
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(10)
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Based solely on information contained in a Schedule 13G amendment filed with the SEC on February 12, 2020 by The Vanguard Group reporting sole voting power of 51,694 shares, shared voting power of 33,731 shares, sole dispositive power of 7,549,840 shares and shared dispositive power of 78,464 shares. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania, 19355.
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2020 Proxy Statement | Company Information
|
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14
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Board Independence and Leadership
|
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•
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The Board has determined that a majority of our directors and nominees are independent under our independence standards and the New York Stock Exchange listing standards
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•
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We have a lead independent director empowered with broadly defined authorities and responsibilities who also serves as Chairman of our Audit Committee, responsible for overseeing our accounting and financial reporting processes, audits of the financial statements, and internal controls over financial reporting.
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•
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Independent directors regularly (at least quarterly) hold executive sessions, which are chaired by our lead independent director.
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Accountability to Shareholders
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•
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All of our directors are elected annually.
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•
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Our directors are elected by a majority voting standard in uncontested elections.
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Board Composition and Evaluation
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•
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Our Board consists of directors with a diverse mix of skills, experience and background.
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•
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Our Board and Board committees each undertake a robust annual self-evaluation.
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Board Committees
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•
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We have three Board committees—Audit, Compensation and Corporate Governance.
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•
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Each Board committee is composed entirely of independent directors under our independence standards and the New York Stock Exchange listing standards.
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Director and Officer Stock Ownership
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•
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Our independent directors are required to own shares of our stock having a value of at least five times their annual cash retainer.
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•
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Each Co-CEO is required to own five times his base salary in Company shares.
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•
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All other named executive officers as well as Company senior management (approximately 40 persons) must own one times his or her base salary in Company shares.
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•
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Our executive officers and directors as a group own a substantial percentage of our outstanding common stock which directly aligns our executive officers and directors with our other shareholders.
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| |||
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Compensation Governance
|
| |
•
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| |
Our fully independent Compensation Committee oversees all aspects of our named executive compensation program.
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•
|
| |
We structure a large portion of our named executive officers’ compensation to be performance based.
|
| |||
|
•
|
| |
We have an annual shareholder advisory vote to approve named executive officer compensation.
|
| |||
|
•
|
| |
We do not maintain employment agreements or agreements to pay severance upon a change in control with any of our executive officers.
|
| |||
|
Ethics and Corporate Responsibilities
|
| |
•
|
| |
Our Code of Ethics, which applies to all officers, employees and directors, is disclosed on our website.
|
|
|
•
|
| |
We have an active and robust ethics and compliance program, which includes required regular employee training.
|
| |||
|
•
|
| |
We are committed to corporate responsibility and sustainability and report on our efforts through our website.
|
|
|
2020 Proxy Statement | Corporate Governance
|
| |
15
|
|
|
|
|
|
2020 Proxy Statement | Corporate Governance
|
| |
16
|
|
|
|
|
•
|
appoint the Company’s independent registered public accounting firm and oversee the relationship; including 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;
|
•
|
review and discuss with our management and independent registered public accounting firm, the Company’s interim and audited annual financial statements, and recommend to the Board whether the audited annual financial statements should be included in the Company’s annual report on Form 10-K;
|
•
|
review 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;
|
•
|
review the adequacy and implementation of the Company’s internal audit function, including a review of the scope and results of its program;
|
•
|
review and approve or ratify all transactions with related persons that are required to be disclosed in the proxy statement; and
|
•
|
discuss with management the Company’s guidelines and policies related to enterprise risk assessment and risk management.
|
|
2020 Proxy Statement | Corporate Governance
|
| |
17
|
|
|
|
|
|
Director
|
| |
Lead
Independent Director |
| |
Audit
Committee |
| |
Compensation
Committee |
| |
Corporate
Governance Committee |
|
|
Kenneth C. Ambrecht
|
| |
|
| |
|
| |
Member
|
| |
Member
|
|
|
Virginia “Gina” C. Drosos
|
| |
|
| |
Member
|
| |
|
| |
Member
|
|
|
Terry S. Jacobs
|
| |
|
| |
Member
|
| |
Chair
|
| |
|
|
|
Gregory G. Joseph
|
| |
X
|
| |
Chair
|
| |
|
| |
|
|
|
Mary Beth Martin
|
| |
|
| |
|
| |
Member
|
| |
Member
|
|
|
William W. Verity
|
| |
|
| |
|
| |
Member
|
| |
Chair
|
|
|
John I. Von Lehman
|
| |
|
| |
Member
|
| |
|
| |
Member
|
|
|
Meetings in 2019
|
| |
|
| |
7
|
| |
4
|
| |
6
|
|
|
2020 Proxy Statement | Corporate Governance
|
| |
18
|
|
|
|
|
•
|
Serves as a liaison between the non-employee directors and the Co-CEOs, without inhibiting direct communication between them, including providing feedback and counsel regarding interactions with the Board;
|
•
|
Consults on Board meeting agendas and other information sent to the Board;
|
•
|
Reviews the quality, quantity, appropriateness and timeliness of information provided to the Board;
|
•
|
Consults on and approves Board meeting schedules to ensure there is sufficient time for discussion of all agenda items;
|
•
|
Facilitates discussion and open dialogue among the independent directors during Board meetings, executive sessions and outside of Board meetings;
|
•
|
Maintains availability, when appropriate, for consultation and direct communication with shareholders; and
|
•
|
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.
|
|
2020 Proxy Statement | Corporate Governance
|
| |
19
|
|
|
|
|
|
2020 Proxy Statement | Corporate Governance
|
| |
20
|
|
|
|
|
•
|
Operating our business with integrity and managing financial risk;
|
•
|
Giving back to our communities and promoting social opportunity;
|
•
|
Creating a welcoming and rewarding place to work and build a career; and
|
•
|
Managing environmental risk and operating sustainably.
|
|
2020 Proxy Statement | Corporate Governance
|
| |
21
|
|
|
|
|
|
2020 Proxy Statement | Corporate Governance
|
| |
22
|
|
|
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
23
|
|
|
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
24
|
|
|
|
|
1.
|
Alleghany Corporation
|
2.
|
Arch Capital Group Ltd.
|
3.
|
Assurant Inc.
|
4.
|
Chubb Limited
|
5.
|
Cincinnati Financial Corporation
|
6.
|
CNA Financial Corp.
|
7.
|
The Hartford Financial Services Group, Inc.
|
8.
|
Lincoln National Corporation
|
9.
|
Markel Corporation
|
10.
|
RLI Corp.
|
11.
|
Voya Financial, Inc.
|
12.
|
W. R. Berkley Corporation
|
|
|
| |
Total Shareholder Return (%)
|
| ||||||
|
One
Year |
| |
Three
Year |
| |
Five
Year |
| |||
|
AFG
|
| |
27.07
|
| |
42.76
|
| |
119.59
|
|
|
S&P 400 Midcap
|
| |
26.17
|
| |
30.37
|
| |
53.96
|
|
|
S&P 500 Insurance
|
| |
29.38
|
| |
33.48
|
| |
60.60
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
25
|
|
|
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
26
|
|
|
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
27
|
|
|
|
|
•
|
base salary and annual performance-based cash bonuses;
|
•
|
long-term incentive compensation;
|
•
|
retirement and deferred compensation benefits; and
|
•
|
perquisites and other personal benefits.
|
|
Compensation Element
|
| |
Strategic Role in Compensation
|
| |||
|
Base salary is determined based on position, scope of responsibilities, experience, tenure, qualifications and competitive data.
|
| |
•
|
| |
Provides a fixed level of compensation for services rendered during the year.
|
|
|
•
|
| |
Attracts and retains executive talent.
|
| |||
|
Annual cash incentive awards under the Senior Executive Annual Bonus Plan are variable awards payable in large part based on Company performance and results established by the Compensation Committee.
|
| |
•
|
| |
Provides focus on annual performance goals linked to Company success and shareholder value.
|
|
|
•
|
| |
Motivates and rewards named executive officers to achieve strong annual business results that will contribute to the Company’s long-term success without creating an incentive to take excessive risk.
|
| |||
|
Long-term incentive awards through annual restricted share grants.
|
| |
•
|
| |
Ensures that the named executive officers have a significant continuing interest in the long-term financial success of the Company.
|
|
|
•
|
| |
Aligns the interests of the named executive officers with Company shareholders.
|
| |||
|
•
|
| |
Encourages decisions and rewards performance that contributes to the long-term Company success.
|
| |||
|
•
|
| |
Encourages executive retention.
|
| |||
|
•
|
| |
Discourages excessive risk taking.
|
| |||
|
Long-term cash awards under the Senior Executive Long Term Incentive Compensation Plan.
|
| |
•
|
| |
Encourages focus on growth in book value and return on equity growth, primary drivers of long-term shareholder value.
|
|
|
•
|
| |
Encourages retention through three-year performance periods.
|
| |||
|
•
|
| |
Long-term focus discourages excessive risk taking.
|
| |||
|
Retirement benefits which provide competitive retirement benefits that are generally comparable to those provided to all employees.
|
| |
•
|
| |
Provides qualified retirement benefits through Company matching of a percentage of contributions in a defined contribution plan.
|
|
|
•
|
| |
Provides non-qualified contributions where tax law limits amounts.
|
| |||
|
•
|
| |
Attracts executive talent.
|
| |||
|
•
|
| |
Provides the opportunity to accrue a reasonable retirement benefit.
|
| |||
|
Deferred compensation elections, which are voluntary and permit deferral of base salary or bonus into our common shares and/or cash at an interest rate determined annually.
|
| |
•
|
| |
Permits named executive officers to defer receipt of all or any part of their base salary and/or annual cash bonus.
|
|
|
•
|
| |
Provides a retention feature through reasonable return potential.
|
| |||
|
•
|
| |
Provides an attractive tax planning opportunity designed to attract and retain executives.
|
| |||
|
Perquisites including health care; life, disability, auto and home insurance; aircraft usage; entertainment; and administrative services.
|
| |
•
|
| |
Provides competitive compensation elements designed to attract and retain executive talent.
|
|
|
•
|
| |
Personal use of Company aircraft enhances security and personal safety as well as enhancing productivity.
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
28
|
|
|
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
29
|
|
|
|
|
|
Name
|
| |
Operating
EPS Target ($) |
| |
Specialty
P&C Earnings Target ($) |
| |
Annuity
Earnings Target ($) |
| |
Discretionary
Target ($) |
| |
Total
Target ($) |
| |
Maximum ($)
|
|
|
Carl H. Lindner III
|
| |
750,000
|
| |
787,500
|
| |
525,000
|
| |
—
|
| |
2,062,500
|
| |
2,821,875
|
|
|
S. Craig Lindner
|
| |
750,000
|
| |
787,500
|
| |
525,000
|
| |
—
|
| |
2,062,500
|
| |
2,821,875
|
|
|
Joseph E. (Jeff) Consolino
|
| |
592,500
|
| |
533,250
|
| |
355,500
|
| |
—
|
| |
1,481,250
|
| |
1,910,813
|
|
|
John B. Berding
|
| |
592,500
|
| |
533,250
|
| |
355,500
|
| |
—
|
| |
1,481,250
|
| |
1,910,813
|
|
|
Michelle A. Gillis
|
| |
137,500
|
| |
—
|
| |
—
|
| |
137,500
|
| |
275,000
|
| |
343,750
|
|
|
Vito C. Peraino
|
| |
310,000
|
| |
—
|
| |
—
|
| |
310,000
|
| |
620,000
|
| |
775,000
|
|
|
Operating EPS
|
| |
Percentage of Bonus
Target to be paid for Operating EPS Component |
|
|
Less than $7.73
|
| |
0
|
|
|
$8.60
|
| |
100%
|
|
|
$9.46 or more
|
| |
Maximum(1)
|
|
(1)
|
175% for the Co-CEOs, 150% for Mr. Consolino and Mr. Berding and 125% for Ms. Gillis and Mr. Peraino.
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
30
|
|
|
|
|
|
Specialty P&C
Earnings (in millions) |
| |
Percentage of Bonus
Target to be paid for Specialty P&C Earnings Component |
|
|
Less than $693.3
|
| |
0
|
|
|
$693.3
|
| |
85%
|
|
|
$753.6
|
| |
Target of 100%
|
|
|
$813.9 or more
|
| |
115%
|
|
|
Annuity Earnings
(in millions) |
| |
Percentage of Bonus
Target to be paid for Annuity Earnings Component |
|
|
Less than $415.8
|
| |
0
|
|
|
$415.8
|
| |
85%
|
|
|
$452.0
|
| |
Target of 100%
|
|
|
$488.1 or more
|
| |
115%
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
31
|
|
|
|
|
|
Name
|
| |
Total 2019
Bonus Paid ($) |
| |
Total Bonus as a
Percentage of |
| |||
|
Target
(%) |
| |
Maximum
(%) |
| ||||||
|
Carl H. Lindner III
|
| |
2,153,548
|
| |
104.4
|
| |
76.32
|
|
|
S. Craig Lindner
|
| |
2,153,548
|
| |
104.4
|
| |
76.32
|
|
|
Joseph E. (Jeff) Consolino
|
| |
1,540,934
|
| |
104.0
|
| |
80.64
|
|
|
John B. Berding
|
| |
1,540,934
|
| |
104.0
|
| |
80.64
|
|
|
Michelle A. Gillis
|
| |
310,174
|
| |
112.8
|
| |
90.23
|
|
|
Vito C. Peraino
|
| |
699,302
|
| |
112.8
|
| |
90.23
|
|
|
Name
|
| |
Grant
Year |
| |
Three-Year
Performance Period Ending |
| |
Potential Payments |
| |||
|
Target
($) |
| |
Maximum
($) |
| |||||||||
|
Carl H. Lindner III
|
| |
2017
|
| |
12/31/2019
|
| |
2,500,000
|
| |
5,000,000
|
|
|
2018
|
| |
12/31/2020
|
| |
2,500,000
|
| |
5,000,000
|
| |||
|
2019
|
| |
12/31/2021
|
| |
2,500,000
|
| |
5,000,000
|
| |||
|
S. Craig Lindner
|
| |
2017
|
| |
12/31/2019
|
| |
2,500,000
|
| |
5,000,000
|
|
|
2018
|
| |
12/31/2020
|
| |
2,500,000
|
| |
5,000,000
|
| |||
|
2019
|
| |
12/31/2021
|
| |
2,500,000
|
| |
5,000,000
|
| |||
|
Joseph E. (Jeff) Consolino
|
| |
2017
|
| |
12/31/2019
|
| |
750,000
|
| |
1,500,000
|
|
|
2018
|
| |
12/31/2020
|
| |
800,000
|
| |
1,600,000
|
| |||
|
2019
|
| |
12/31/2021
|
| |
800,000
|
| |
1,600,000
|
| |||
|
John B. Berding
|
| |
2017
|
| |
12/31/2019
|
| |
750,000
|
| |
1,500,000
|
|
|
2018
|
| |
12/31/2020
|
| |
800,000
|
| |
1,600,000
|
| |||
|
2019
|
| |
12/31/2021
|
| |
800,000
|
| |
1,600,000
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
32
|
|
|
|
|
|
Three-Year
Performance Period Ending |
| | | ||||||||||
|
Growth in Book Value
Per Share (1) |
| |
Return on Equity(2)
|
| |||||||||
|
Minimum
|
| |
Maximum
|
| |
Minimum
|
| |
Maximum
|
| |||
|
12/31/2019
|
| |
(3)
|
| |
(4)
|
| |
9%
|
| |
12%
|
|
|
12/31/2020
|
| |
(3)
|
| |
(4)
|
| |
10%
|
| |
14%
|
|
|
12/31/2021
|
| |
(3)
|
| |
(4)
|
| |
10%
|
| |
14%
|
|
|
(1) Based on book value per share growth as compared to the plan companies which were determined to approximate the Company’s business mix of property and casualty insurance and annuities. No bonus will be paid for results below the minimum.
|
| ||||||||||||
|
(2) For a return on equity greater than the minimum but less than the maximum, the bonus 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 bonus will be paid for results below the minimum.
|
| ||||||||||||
|
(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.
|
| ||||||||||||
|
(4) Book value per share growth must exceed that of all plan companies.
|
|
1.
|
Alleghany Corp.
|
2.
|
American Equity Investment Life Holding Co.
|
3.
|
American National Insurance Co.
|
4.
|
Arch Capital Group Ltd.
|
5.
|
Argo Group International Holdings, Ltd.
|
6.
|
Assurant, Inc.
|
7.
|
Chubb Limited
|
8.
|
Cincinnati Financial Corp.
|
9.
|
CNA Financial Corporation
|
10.
|
CNO Financial Group, Inc.
|
11.
|
The Hanover Insurance Group, Inc.
|
12.
|
The Hartford Financial Services Group, Inc.
|
13.
|
Horace Mann Educators Corp.
|
14.
|
Lincoln National Corp.
|
15.
|
Markel Corporation
|
16.
|
Metlife, Inc.
|
17.
|
National Western Life Group, Inc.
|
18.
|
Protective Insurance Corporation
|
19.
|
Old Republic International Corporation
|
20.
|
RLI Corp.
|
21.
|
Travelers Companies, Inc.
|
22.
|
Voya Financial, Inc.
|
23.
|
W.R. Berkley Corporation
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
33
|
|
|
|
|
|
Name
|
| |
2017-2019
Performance Period Bonus Award ($) |
|
|
Carl H. Lindner III
|
| |
4,444,444
|
|
|
S. Craig Lindner
|
| |
4,444,444
|
|
|
Joseph E. (Jeff) Consolino
|
| |
1,333,333
|
|
|
John B. Berding
|
| |
1,333,333
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
34
|
|
|
|
|
|
2020 Proxy Statement | Compensation Discussion and Analysis
|
| |
35
|
|
|
|
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($) (1) |
| |
Stock
Awards ($) (2) |
| |
Non-Equity
Incentive Plan Compensation ($) (3) |
| |
All Other
Compensation ($) (4) |
| |
Total
($) |
|
|
Carl H. Lindner III
Co-Chief Executive Officer and Co-President (Co-Principal Executive Officer) |
| |
2019
|
| |
1,250,000
|
| |
1,500,045
|
| |
6,597,992
|
| |
1,116,550
|
| |
10,464,587
|
|
|
2018
|
| |
1,234,615
|
| |
1,500,474
|
| |
6,461,345
|
| |
1,012,951
|
| |
10,209,385
|
| |||
|
2017
|
| |
1,150,000
|
| |
5,195,752
|
| |
2,231,547
|
| |
1,195,551
|
| |
9,772,850
|
| |||
|
S. Craig Lindner
Co-Chief Executive Officer and Co-President (Co-Principal Executive Officer) |
| |
2019
|
| |
1,250,000
|
| |
1,500,045
|
| |
6,597,992
|
| |
1,109,383
|
| |
10,457,420
|
|
|
2018
|
| |
1,234,615
|
| |
1,500,474
|
| |
6,461,345
|
| |
995,061
|
| |
10,191,495
|
| |||
|
2017
|
| |
1,150,000
|
| |
5,195,752
|
| |
2,231,547
|
| |
1,024,850
|
| |
9,602,149
|
| |||
|
Joseph E. (Jeff) Consolino
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
| |
2019
|
| |
960,000
|
| |
800,157
|
| |
2,874,267
|
| |
149,259
|
| |
4,783,682
|
|
|
2018
|
| |
921,346
|
| |
800,177
|
| |
2,815,031
|
| |
147,246
|
| |
4,683,800
|
| |||
|
2017
|
| |
895,192
|
| |
1,909,133
|
| |
1,535,950
|
| |
130,459
|
| |
4,470,735
|
| |||
|
John B. Berding
President of American Money Management |
| |
2019
|
| |
960,000
|
| |
950,062
|
| |
2,874,267
|
| |
99,597
|
| |
4,883,926
|
|
|
2018
|
| |
928,846
|
| |
950,281
|
| |
2,815,031
|
| |
99,986
|
| |
4,794,144
|
| |||
|
2017
|
| |
900,000
|
| |
2,008,662
|
| |
1,535,950
|
| |
93,010
|
| |
4,537,622
|
| |||
|
Michelle A. Gillis
Senior Vice President and Chief Administrative Officer |
| |
2019
|
| |
390,770
|
| |
320,162
|
| |
310,174
|
| |
61,482
|
| |
1,082,589
|
|
|
2018
|
| |
355,979
|
| |
320,522
|
| |
314,040
|
| |
57,557
|
| |
1,048,098
|
| |||
|
2017
|
| |
342,354
|
| |
300,303
|
| |
297,500
|
| |
52,587
|
| |
992,745
|
| |||
|
Vito C. Peraino
Senior Vice President and General Counsel |
| |
2019
|
| |
625,385
|
| |
600,117
|
| |
699,302
|
| |
79,044
|
| |
2,003,849
|
|
|
2018
|
| |
604,615
|
| |
600,415
|
| |
697,866
|
| |
78,679
|
| |
1,981,575
|
| |||
|
2017
|
| |
586,154
|
| |
600,134
|
| |
686,538
|
| |
75,433
|
| |
1,948,259
|
|
(1)
|
Amounts shown are not reduced to reflect the named executive officers’ elections, if any, to defer receipt of salary into the Deferred Compensation Plan.
|
(2)
|
Amount shown for 2019 represents the dollar amount which will be expensed for financial statement reporting purposes over the four-year cliff vesting period of discretionary restricted stock awards made by the Compensation Committee for compensation expense incurred by the Company. Amounts were determined in accordance with FASB ASC 718 (Compensation – Stock Compensation), rather than as an amount paid to or realized. With respect to the Co-CEOs, Mr. Consolino and Mr. Berding, amounts for 2017 includes the final awards paid in Company common shares for the three-year performance period ended December 31, 2017 under the terminated Senior Executive Equity Bonus Plan while amounts paid in cash for the years ended December 31, 2018 and 2019 under the successor Senior Executive LTIC are including in the adjacent column.
|
(3)
|
Non-equity incentive plan compensation payments to all named executive officers include those made pursuant to the Annual Senior Executive Bonus Plan, a performance-based annual cash bonus plan. For the Co-CEOs, Mr. Consolino and Mr. Berding, amounts also include payments for the three-year performance periods ended December 31, 2018 and 2019 under the Senior Executive LTIC which are further described in the Compensation Discussion and Analysis section beginning on page 23 of this proxy statement.
|
(4)
|
See the All Other Compensation chart below which details the components of these amounts.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
36
|
|
|
|
|
|
Item
|
| |
C.H. Lindner
III (1)(2) |
| |
S.C. Lindner
(1)(2) |
| |
J. E.
Consolino (3) |
| |
J.B. Berding
|
| |
M.A. Gillis
|
| |
V.C. Peraino
|
|
|
Insurance (Auto/Home Executive Insurance Program)
|
| |
548,257
|
| |
472,993
|
| |
43,168
|
| |
30,929
|
| |
13,472
|
| |
12,502
|
|
|
Aircraft Usage
|
| |
568,425
|
| |
561,258
|
| |
36,833
|
| |
—
|
| |
—
|
| |
—
|
|
|
Annual RASP Contribution (4)
|
| |
18,200
|
| |
18,200
|
| |
18,200
|
| |
18,200
|
| |
18,200
|
| |
18,200
|
|
|
Annual Auxiliary RASP Contribution (4)
|
| |
28,800
|
| |
28,800
|
| |
28,800
|
| |
28,800
|
| |
16,992
|
| |
28,800
|
|
|
Other (5)
|
| |
135,507
|
| |
161,776
|
| |
22,258
|
| |
21,668
|
| |
12,818
|
| |
19,542
|
|
|
Total (2)
|
| |
1,116,550
|
| |
1,109,383
|
| |
149,259
|
| |
99,597
|
| |
61,482
|
| |
79,044
|
|
(1)
|
The value of the use of corporate aircraft is calculated based on the aggregate incremental cost to the Company, including fuel costs, trip-related maintenance, universal weather-monitoring costs, on-board catering, landing/ramp fees and other miscellaneous variable costs. Fixed costs which do not change based on usage, such as pilot salaries, the amortized costs of the company aircraft, and the cost of maintenance not related to trips, are excluded. Amounts for personal use of company aircraft are included in the table. This incremental cost valuation of aircraft use is different from the standard industry fare level valuation used to impute income to the executives for tax purposes.
|
(2)
|
All perquisites excluding aircraft, retirement plan and health savings account company match are limited to $500,000 for Mr. C.H. Lindner III and Mr. S.C. Lindner. For Mr. C.H. Lindner and Mr. S.C. Lindner, such perquisites totaled $1,299,188 and $1,243,027, respectively, and each reimbursed the Company for the excess of $182,639 and $133,644, respectively. Amounts shown for all items except “Total” do not give effect to any repayment, but the “Totals” for Mr. C.H. Lindner and Mr. S.C. Lindner have been reduced by the amounts reimbursed and the reduced amounts are set forth for 2019 in the “All Other Compensation” column for each of them.
|
(3)
|
Aircraft usage for Mr. Consolino relates solely to travel related to attending meetings of Boards of Directors, other than the Company, on which he served during 2019.
|
(4)
|
For information regarding the RASP and Auxiliary RASP, see “Compensation Discussion and Analysis—Retirement and Other Related Benefits” on page 35.
|
(5)
|
Includes group life insurance; car, parking and related expenses; business club dues; security services; and health savings account company match. Also includes estimated amounts for meals and entertainment and administrative services.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
37
|
|
|
|
|
|
Name
|
| |
Grant
Date |
| |
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards |
| |
All other
Stock Awards: Number of Shares of Stock or Units (#) (1) |
| |
Closing
Market Price on the Date of Grant ($/Sh) |
| |
Grant Date
Fair Value of Stock and Option Awards ($) |
| ||||||
|
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |||||||||||||||
|
Carl H. Lindner III
|
| |
2/26/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
15,110
|
| |
99.62
|
| |
1,505,258
|
|
|
2/26/2019 (2)
|
| |
0
|
| |
2,062,500
|
| |
2,821,875
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
2/26/2019 (3)
|
| |
—
|
| |
2,500,000
|
| |
5,000,000
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
S. Craig Lindner
|
| |
2/26/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
15,110
|
| |
99.62
|
| |
1,505,258
|
|
|
2/26/2019 (2)
|
| |
0
|
| |
2,062,500
|
| |
2,821,875
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
2/26/2019 (3)
|
| |
—
|
| |
2,500,000
|
| |
5,000,000
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
Joseph E. (Jeff) Consolino
|
| |
2/26/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
8,060
|
| |
99.62
|
| |
802,937
|
|
|
2/20/2019(2)
|
| |
0
|
| |
1,481,250
|
| |
1,910,813
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
2/26/2019(3)
|
| |
—
|
| |
800,000
|
| |
1,600,000
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
John B. Berding
|
| |
2/26/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
9,570
|
| |
99.62
|
| |
953,363
|
|
|
2/20/2019(2)
|
| |
0
|
| |
1,481,250
|
| |
1,910,813
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
2/26/2019(3)
|
| |
—
|
| |
800,000
|
| |
1,600,000
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
Michelle A. Gillis
|
| |
2/26/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
3,225
|
| |
99.62
|
| |
321,275
|
|
|
2/26/2019
|
| |
0
|
| |
275,000
|
| |
343,750
|
| |
—
|
| |
—
|
| |
—
|
| |||
|
Vito C. Peraino
|
| |
2/26/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
6,045
|
| |
99.62
|
| |
602,203
|
|
|
2/26/2019
|
| |
0
|
| |
620,000
|
| |
762,500
|
| |
—
|
| |
—
|
| |
—
|
|
(1)
|
These restricted shares were granted pursuant to the Company’s stock incentive plan and cliff-vest four years after the grant date. Holders of restricted shares generally have full voting and dividend rights on all restricted shares during the vesting period.
|
(2)
|
These represent awards under the Senior Executive Annual Bonus Plan. These amounts, to the extent earned for 2019 and paid in 2020, are shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation” because these awards were recognized in 2019 for financial statement reporting purposes.
|
(3)
|
These represent awards under the Senior Executive LTIC. Grants in 2019 cover a three-year performance period 2019-2021. One-half of award payment based on the Company’s growth in book value per share over the three years compared to plan companies, and one-half of award payment based on meeting or exceeding average annual core return on equity goals over the three-year period. Payments of awards, if any, will be made in early 2022.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
38
|
|
|
|
|
|
|
| |
|
| |
Option Awards (1)
|
| |
Stock Awards
|
| ||||||||||||
|
Name
|
| |
Grant Date
|
| |
Number
of Securities Underlying Unexercised Options Exercisable (#) |
| |
Number
of Securities Underlying Unexercised Options Unexercisable (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number of
Shares or Units of Stock That Have Not Vested (#) (2) |
| |
Market
Value of Shares or Units of Stock That Have Not Vested ($) |
|
|
Carl H. Lindner
|
| |
02/21/2013
|
| |
50,000
|
| |
|
| |
44.01
|
| |
02/21/2023
|
| |
|
| |
|
|
|
02/24/2014
|
| |
50,000
|
| |
|
| |
56.44
|
| |
02/24/2024
|
| |
|
| |
|
| |||
|
02/23/2015
|
| |
40,000
|
| |
10,000
|
| |
63.15
|
| |
02/23/2025
|
| |
|
| |
|
| |||
|
02/23/2016
|
| |
|
| |
|
| |
|
| |
|
| |
22,400
|
| |
2,456,160
|
| |||
|
02/22/2017
|
| |
|
| |
|
| |
|
| |
|
| |
15,885
|
| |
1,741,790
|
| |||
|
02/21/2018
|
| |
|
| |
|
| |
|
| |
|
| |
13,295
|
| |
1,457,797
|
| |||
|
02/26/2019
|
| |
|
| |
|
| |
|
| |
|
| |
15,110
|
| |
1,656,812
|
| |||
|
S. Craig Lindner
|
| |
02/21/2013
|
| |
50,000
|
| |
|
| |
44.01
|
| |
02/21/2023
|
| |
|
| |
|
|
|
02/24/2014
|
| |
50,000
|
| |
|
| |
56.44
|
| |
02/24/2024
|
| |
|
| |
|
| |||
|
02/23/2015
|
| |
40,000
|
| |
10,000
|
| |
63.15
|
| |
02/23/2025
|
| |
|
| |
|
| |||
|
02/23/2016
|
| |
|
| |
|
| |
|
| |
|
| |
22,400
|
| |
2,456,160
|
| |||
|
02/22/2017
|
| |
|
| |
|
| |
|
| |
|
| |
15,885
|
| |
1,741,790
|
| |||
|
02/21/2018
|
| |
|
| |
|
| |
|
| |
|
| |
13,295
|
| |
1,457,797
|
| |||
|
02/26/2019
|
| |
|
| |
|
| |
|
| |
|
| |
15,110
|
| |
1,656,812
|
| |||
|
Joseph E. (Jeff) Consolino
|
| |
02/23/2015
|
| |
|
| |
5,000
|
| |
63.15
|
| |
02/23/2025
|
| |
|
| |
|
|
|
02/23/2016
|
| |
|
| |
|
| |
|
| |
|
| |
11,200
|
| |
1,228,080
|
| |||
|
02/22/2017
|
| |
|
| |
|
| |
|
| |
|
| |
8,475
|
| |
929,284
|
| |||
|
02/21/2018
|
| |
|
| |
|
| |
|
| |
|
| |
7,090
|
| |
777,419
|
| |||
|
02/26/2019
|
| |
|
| |
|
| |
|
| |
|
| |
8,060
|
| |
883,779
|
| |||
|
John B. Berding
|
| |
02/23/2012
|
| |
27,377
|
| |
|
| |
38.11
|
| |
02/23/2022
|
| |
|
| |
|
|
|
02/21/2013
|
| |
27,728
|
| |
|
| |
44.01
|
| |
02/21/2023
|
| |
|
| |
|
| |||
|
02/24/2014
|
| |
28,229
|
| |
|
| |
56.44
|
| |
02/24/2024
|
| |
|
| |
|
| |||
|
02/23/2015
|
| |
24,000
|
| |
6,000
|
| |
63.15
|
| |
02/23/2025
|
| |
|
| |
|
| |||
|
02/23/2016
|
| |
|
| |
|
| |
|
| |
|
| |
13,440
|
| |
1,473,696
|
| |||
|
02/22/2017
|
| |
|
| |
|
| |
|
| |
|
| |
9,530
|
| |
1,044,965
|
| |||
|
02/21/2018
|
| |
|
| |
|
| |
|
| |
|
| |
8,420
|
| |
923,253
|
| |||
|
02/26/2019
|
| |
|
| |
|
| |
|
| |
|
| |
9,570
|
| |
1,049,351
|
| |||
|
Michelle A. Gillis
|
| |
02/16/2011
|
| |
5,240
|
| |
|
| |
34.34
|
| |
02/16/2021
|
| |
|
| |
|
|
|
02/23/2012
|
| |
3,861
|
| |
|
| |
38.11
|
| |
02/23/2022
|
| |
|
| |
|
| |||
|
03/12/2012
|
| |
947
|
| |
|
| |
37.60
|
| |
03/12/2022
|
| |
|
| |
|
| |||
|
02/21/2013
|
| |
9,000
|
| |
|
| |
44.01
|
| |
02/21/2023
|
| |
|
| |
|
| |||
|
02/24/2014
|
| |
10,000
|
| |
|
| |
56.44
|
| |
02/24/2024
|
| |
|
| |
|
| |||
|
02/23/2015
|
| |
8,000
|
| |
2,000
|
| |
63.15
|
| |
02/23/2025
|
| |
|
| |
|
| |||
|
02/23/2016
|
| |
|
| |
|
| |
|
| |
|
| |
4,480
|
| |
491,232
|
| |||
|
02/22/2017
|
| |
|
| |
|
| |
|
| |
|
| |
3,180
|
| |
348,687
|
| |||
|
02/21/2018
|
| |
|
| |
|
| |
|
| |
|
| |
2,840
|
| |
311,406
|
| |||
|
02/26/2019
|
| |
|
| |
|
| |
|
| |
|
| |
3,225
|
| |
353,621
|
| |||
|
Vito C. Peraino
|
| |
02/23/2015
|
| |
|
| |
4,000
|
| |
63.15
|
| |
02/23/2025
|
| |
|
| |||
|
02/23/2016
|
| |
|
| |
|
| |
|
| |
|
| |
8,960
|
| |
982,464
|
| |||
|
02/22/2017
|
| |
|
| |
|
| |
|
| |
|
| |
6,355
|
| |
696,826
|
| |||
|
02/21/2018
|
| |
|
| |
|
| |
|
| |
|
| |
5,320
|
| |
583,338
|
| |||
|
02/26/2019
|
| |
|
| |
|
| |
|
| |
|
| |
6,045
|
| |
662,834
|
|
(1)
|
Represents employee stock options that become exercisable for 20% of the shares initially granted on the first anniversary of the date of grant, with an additional 20% becoming exercisable on each subsequent anniversary. They are generally exercisable for ten years. The options become fully exercisable in the event of death or disability or upon a change in control of the Company. The Company ceased granting stock options after the 2015 broad-based grant.
|
(2)
|
Represents restricted shares which cliff-vest four years following the award grant date.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
39
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
|
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
Number of Shares
Acquired on Exercise (#) |
| |
Value Realized on Exercise
($)(1) |
| |
Number of Shares
Acquired on Vesting (#) |
| |
Value Realized on Vesting
($)(2) |
|
|
Carl H. Lindner III
|
| |
50,000
|
| |
3,303,000
|
| |
11,880
|
| |
1,184,555
|
|
|
S. Craig Lindner
|
| |
50,000
|
| |
3,312,200
|
| |
11,880
|
| |
1,184,555
|
|
|
Joseph E. (Jeff) Consolino
|
| |
10,000
|
| |
422,150
|
| |
5,940
|
| |
592,277
|
|
|
John B. Berding
|
| |
31,254
|
| |
2,054,489
|
| |
7,130
|
| |
710,932
|
|
|
Michelle A. Gillis
|
| |
4,952
|
| |
341,635
|
| |
2,380
|
| |
237,310
|
|
|
Vito C. Peraino
|
| |
20,000
|
| |
798,051
|
| |
4,760
|
| |
474,620
|
|
(1)
|
The dollar value realized reflects the difference between the closing price of the Company common shares on the date of exercise and the stock option exercise price.
|
(2)
|
The dollar value realized reflects the market value of the vested shares based on the closing price of the Company common shares on the vesting date or, if not a business day, the next preceding business day.
|
|
Name
|
| |
Executive
contributions in last FY($) |
| |
Registrant contributions in last FY($) (1)
|
| |
Aggregate earnings (loss) in last FY($) (2)
|
| |
Aggregate
withdrawals / distributions($) |
| |
Aggregate balances at last FYE($)
|
|
|
Carl H. Lindner III
|
| |
-
|
| |
28,800
|
| |
984,760
|
| |
-
|
| |
4,627,246
|
|
|
S. Craig Lindner
|
| |
-
|
| |
28,800
|
| |
1,164,935
|
| |
-
|
| |
5,161,397
|
|
|
Joseph E. (Jeff) Consolino
|
| |
-
|
| |
28,800
|
| |
32,230
|
| |
-
|
| |
226,323
|
|
|
John B. Berding
|
| |
-
|
| |
28,800
|
| |
459,579
|
| |
-
|
| |
2,194,379
|
|
|
Michelle A. Gillis
|
| |
-
|
| |
16,992
|
| |
20,813
|
| |
-
|
| |
138,109
|
|
|
Vito C. Peraino
|
| |
101,056
|
| |
28,800
|
| |
310,735
|
| |
-
|
| |
1,624,078
|
|
(1)
|
Represents Company contributions credited to participants’ Auxiliary RASP accounts which are included in the supplemental All Other Compensation table on page 37.
|
(2)
|
Earnings are calculated by reference to actual earnings or losses of mutual funds and securities, including Company common shares, held by the plans.
|
Members of the Compensation Committee:
|
Terry S. Jacobs (Chairman)
Kenneth C. Ambrecht Mary Beth Martin William W. Verity |
|
2020 Proxy Statement | Executive Compensation
|
| |
40
|
|
|
|
|
|
Compensation Element
|
| |
Non-Employee Director
Compensation ($) (1) |
|
|
Board Member Annual Retainer
|
| |
100,000
|
|
|
Lead Independent Director Retainer
|
| |
25,000
|
|
|
Audit Committee Chair Annual Retainer
|
| |
35,000
|
|
|
Compensation and Corporate Governance Committee Chair Annual Retainer
|
| |
15,000
|
|
|
Audit Committee Non-Chair Member Annual Retainer
|
| |
15,000
|
|
|
Compensation and Corporate Governance Committee Non-Chair Member Annual Retainer
|
| |
10,000
|
|
|
Attendance Fee per Day for Offsite Meetings
|
| |
2,000
|
|
|
Annual Restricted Stock Award
|
| |
145,000
|
|
(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. Committee chairs do not receive member retainers in addition to chair retainers.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
41
|
|
|
|
|
|
Name
|
| |
Fees Earned
or Paid in Cash ($) |
| |
Stock
Award ($) (1) |
| |
All Other
Compensation ($) |
| |
Total ($)
|
|
|
Kenneth C. Ambrecht
|
| |
133,917
|
| |
145,016
|
| |
—
|
| |
278,933
|
|
|
Virginia “Gina” C. Drosos
|
| |
126,917
|
| |
145,016
|
| |
—
|
| |
271,933
|
|
|
James E. Evans (2)
|
| |
113,917
|
| |
145,016
|
| |
355,226
|
| |
614,159
|
|
|
Terry S. Jacobs
|
| |
143,917
|
| |
145,016
|
| |
—
|
| |
288,933
|
|
|
Gregory G. Joseph
|
| |
169,750
|
| |
145,016
|
| |
—
|
| |
314,766
|
|
|
Mary Beth Martin
|
| |
106,583
|
| |
145,016
|
| |
—
|
| |
251,599
|
|
|
William W. Verity
|
| |
138,917
|
| |
145,016
|
| |
—
|
| |
283,933
|
|
|
John I. Von Lehman
|
| |
124,917
|
| |
145,016
|
| |
—
|
| |
269,933
|
|
(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 13 for detail on beneficial ownership of AFG common shares by directors.
|
(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 2019 of $350,000 as well as parking and related expenses and compensation for his continued service as a director in accordance with the Company’s compensation policies for non-employee directors. In December 2019, the consulting arrangement was extended for 2020 at a reduced consulting fee of $150,000.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
42
|
|
|
|
|
•
|
As of December 31, 2019, our total employee population consisted of 8,422 individuals working at our parent company and consolidated subsidiaries, with approximately 92% of these individuals located in the United States, approximately 3% located in Europe (primarily England and Ireland), approximately 4% located in Mexico and less than 1% collectively located in Canada, Singapore and Australia.
|
•
|
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 (223 employees), Ireland (30 employees), Singapore (80 employees) and Australia (one employee), which collectively represented less than 4% of AFG’s employees.
|
•
|
For the remaining employees, AFG compiled total 2019 wages, tips, and other compensation from 2019 year-end tax reporting data. For amounts paid in foreign currencies, AFG converted 2019 wages based on the conversion rate on the last business day of 2019.
|
•
|
Using this data, AFG determined that its “median employee” as of December 31, 2019 was a full-time, salaried employee located in the United States.
|
•
|
AFG calculated the employee’s 2019 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 36 of this proxy statement.
|
•
|
With respect to the 2019 total compensation of each Co-CEO, the Company used the amount reported in the “Total” column of the Summary Compensation Table on page 36 of this proxy statement.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
43
|
|
|
|
|
|
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
|
| |
1,917,790
|
| |
$50.93
|
| |
3,421,135 (1)
|
|
|
Equity compensation plans not approved by security holders
|
| |
—
|
| |
—
|
| |
320,412 (2)
|
|
|
Total
|
| |
1,917,790
|
| |
$50.93
|
| |
3,741,547
|
|
(1)
|
Includes 2.54 million shares issuable under the Company’s equity incentive plans, 847,165 shares issuable under AFG’s Employee Stock Purchase Plan and 33,942 shares issuable under AFG’s Non-Employee Directors Compensation Plan.
|
(2)
|
Represents shares issuable under AFG’s Deferred Compensation Plan. For a description of this plan, see “Compensation Discussion and Analysis—Retirement and Other Related Benefits” on page 35.
|
|
2020 Proxy Statement | Executive Compensation
|
| |
44
|
|
|
|
|
|
2020 Proxy Statement | Other Matters
|
| |
45
|
|