PROPOSAL NO. 1

ELECTION OF DIRECTORS

At our 2024 Annual Meeting, our stockholders will elect ten directors, constituting the entire Board of Directors. The Chairman of the Board is elected by the Board of Directors following the annual meeting of stockholders.

(1)      Under our Guidelines on Corporate Governance, directors are generally expected to retire at age 80. The Board may waive this age limitation in special circumstances. After careful consideration as to the mix of skills, experience and other characteristics that is desired by the Board to ensure optimal performance, the Board, in consultation with the Nominating and Corporate Governance Committee, has decided that it is in the best interest of the Company to waive Mr. Clarke’s mandatory retirement at age 80 so that he may stand for reelection this year. Mr. Clarke’s extensive experience in legal, regulatory, and corporate governance matters, as well as his in-depth knowledge of banking and finance were considered in making this decision. Mr. Clarke recused himself from all Board discussions of the waiver and abstained from the vote.

All director nominees were elected as a director at our 2023 annual meeting of stockholders, with the exception of Ms. Vaid, who was appointed to the Board effective August 1, 2023.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE ABOVE TEN NOMINEES FOR DIRECTOR.

CORPORATE GOVERNANCE

Corporate Governance Highlights

We have:

•        an independent Chairman of the Board, separate from the Chief Executive Officer role;

•        key board committees (Audit, Compensation and Nominating and Corporate Governance) comprised solely of independent directors;

•        a declassified board, meaning all of our directors are elected annually;

•        a majority voting standard for the election of directors in uncontested elections; and

•        a single class of common stock with equal voting rights, such that one share equals one vote.

In addition, we:

•        conduct annual board and committee evaluations;

•        prohibit hedging transactions and short sales by executive officers and directors; and

•        have minimum stock ownership guidelines for our executive officers and directors.

Board of Directors

We are currently managed by a Board of Directors comprised of ten members, the majority of whom are “independent” within the meaning of the listing standards of the NYSE. Assuming the election of the 2024 director slate set proposed by the Company and described above, these independent directors are: Thomas G. Apel, C. Allen Bradley, Jr., William S. Corey, Jr., Robert L. Clarke, Deborah J. Matz, Karen R. Pallotta, Manolo Sánchez, and Helen Vaid. The Board of Directors has determined that none of these directors has any material relationship with us or our management that would impair the independence of their judgment in carrying out their responsibilities to us.

The roles of Chairman of the Board and CEO are separate, and each role is held by a different individual. The Chairman of the Board is elected by the Board of Directors following the annual meeting of stockholders. As discussed below, the Chairman of the Board presides over the regular and any special meetings of our non-management directors. Our non-management directors meet after each regularly scheduled Board meeting.

All of our directors shall be elected at the 2024 Annual Meeting and hold office until the next annual election of directors or until his or her successor shall be chosen and shall be qualified, or until his or her death or the effective date of his or her resignation or removal for cause. Currently, the act of the majority of a quorum of the directors shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, the Certificate of Incorporation, or the By-Laws.

The Company has a majority voting standard such that votes cast for any director must exceed the votes cast against such director in an uncontested election. The Company also requires a director who fails to receive a majority vote in an uncontested election to tender his or her resignation. Under the Company’s By-Laws, in a contested election (i.e., where the Secretary of the Company determines that the number of nominees exceeds the number of directors to be elected as of the date seven days prior to the scheduled mailing date of the proxy statement for such annual meeting of stockholders), the plurality voting standard would apply and a director nominee receiving a plurality of votes cast will be elected as a director. During 2023, the Board of Directors held seven meetings and executed six consents in lieu of meetings. No director attended less than 75% of the aggregate of all meetings of the Board and the committees (if any) on which the director served.

The Board of Directors has adopted the Stewart Code of Business Conduct and Ethics, Guidelines on Corporate Governance, and Code of Ethics for Chief Executive Officer, Principal Financial Officer, and Principal Accounting Officer, each of which is available on our website at stewart.com/corporate-governance and in print to any stockholder who requests it. We intend to disclose any amendment to or waiver under our Code of Ethics for Chief Executive Officer, Principal Financial Officer, and Principal Accounting Officer by posting such information on our website. In 2023, we had no such waivers. Our Guidelines on Corporate Governance and the charters of the Audit Committee, the

Compensation Committee, and the Nominating and Corporate Governance Committee are available on our website at stewart.com/corporate-governance and in print to any stockholder who requests them. Our Guidelines on Corporate Governance strongly encourage attendance in person by our directors at our annual meetings of stockholders. All of our then elected directors attended our 2023 annual meeting of stockholders.

Director Qualifications

Each of our directors is an individual of high character and integrity, with an inquiring mind, and works well with others. Each director nominee brings a unique background and set of skills to the Board, giving the Board of Directors, as a whole, competence and experience in a wide variety of areas, including insurance, real estate, technology, strategic planning, corporate governance, executive management, accounting, finance, government and international business. For information regarding the qualifications, backgrounds, and experience of our director nominees, please see each nominee’s biographical information set forth in “Proposal 1” above.

Pursuant to our Guidelines on Corporate Governance, the Board of Directors has adopted a director education policy in order to encourage our directors to periodically attend director continuing education programs. Under the policy, directors are reimbursed for attending continuing education programs consistent with their duties as directors, and we also reimburse directors for reasonable expenses incurred to attend such programs. The Company and each director are members of the National Association of Corporate Directors (“NACD”). As members of NACD, our directors have access to various educational programs, materials, and reports. In addition to encouraging director education through external programs, the Board of Directors also routinely incorporates educational topics into its meeting agendas.

Risk Oversight

The Board of Directors has ultimate responsibility for protecting value for all stakeholders. Among other things, the Board of Directors is responsible for understanding the risks to which we are exposed, approving management’s strategy to manage these risks, and monitoring and measuring management’s performance in implementing the strategy. The Board of Directors works with its committees and management to effectively implement its risk oversight role.

The Audit Committee, with the assistance of management, oversees the risks associated with the integrity of our financial statements, our compliance with legal and regulatory requirements, our liquidity requirements, cybersecurity protections and procedures, other exposures to financial risk, and the Company’s enterprise risk management program. The Audit Committee reviews with management, independent accountants, and internal auditors (which internal audit function has been outsourced to Deloitte & Touche LLP) the accounting policies, the systems of internal controls and the quality and appropriateness of disclosure and content in the financial statements or other external financial communications. The Audit Committee, with the assistance of our legal, human resources, and compliance departments, also performs oversight of our various conduct and ethics programs and policies, including the Stewart Code of Business Conduct and Ethics, reviews these programs and policies and monitors the results of our compliance efforts. To the extent the Audit Committee identifies any material risks or related issues, the risks or issues are addressed with the full Board of Directors.

Stewart and its Board of Directors recognize the importance of protecting our clients’ and partners’ privacy, confidentiality, and data integrity. As such, we continuously and methodically evaluate cyber risks, monitor how they evolve, and evaluate their impact. The Board’s oversight of cybersecurity risks occurs at both the full Board level and at the Board committee level through the Audit Committee. The Board receives, at each regularly scheduled meeting, a risk report which includes an updated cybersecurity risk exposure assessment, a summary of existing cybersecurity controls and risk mitigations, and further planned controls and risk mitigation activities. Our Chief Information Security Officer reports quarterly to the Audit Committee concerning the Company’s cybersecurity program and operations.

The Nominating and Corporate Governance Committee, with the assistance of management, oversees risks associated with administering our Guidelines on Corporate Governance and is responsible for reviewing and making recommendations for selection of nominees for election as directors by our stockholders and reviewing the various governance policies affecting the Company, including the Company’s sustainability policies and practices. To the extent the Nominating and Corporate Governance Committee identifies any material risks or related issues, the risks or issues are addressed with the full Board of Directors.

The Compensation Committee, with the assistance of management, oversees risks associated with our compensation programs and policies. To the extent the Compensation Committee identifies any material risks or related issues, the risks or issues are addressed with the full Board of Directors.

Committees of the Board of Directors

For 2024, the Board of Directors will have the following committees (the “Committees”): an Audit Committee, a Nominating and Corporate Governance Committee, and a Compensation Committee.

Audit Committee.    The Audit Committee’s duty is to assist the Board of Directors in fulfilling its oversight responsibility of

•        the integrity of the financial statements of the Company;

•        the independent registered accountants’ qualifications, independence, and performance;

•        the Company’s system of controls over financial reporting, performance of its internal audit function and the independent registered accountants, and compliance with ethical standards adopted by the Company;

•        the compliance by the Company with legal and regulatory requirements; and

•        the procedures relating to the Company’s cybersecurity and data oversight.

The Audit Committee has sole authority to appoint or replace our independent registered accountants. The Audit Committee has the authority to engage independent counsel and other advisors as it determines necessary to carry out its duties. For a complete list of the Audit Committee’s responsibilities, please see the Audit Committee charter adopted by our Board of Directors, which is available on our website at stewart.com/corporate-governance.

The Audit Committee currently consists of Robert L. Clarke (Chair), William S. Corey, Deborah Matz, Manolo Sánchez, and Helen Vaid, each of whom possesses the necessary levels of financial literacy required to serve. Each of the members of the Audit Committee is “independent” as defined under the listing standards of the NYSE and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Board of Directors has determined that the following members of the Audit Committee meet the requirements of an “audit committee financial expert” as defined in the rules of the SEC: Robert L. Clarke, William S. Corey, Deborah Matz, Manolo Sánchez, and Helen Vaid. No member of our Audit Committee serves on the audit committees of more than three public companies. During 2023, the Audit Committee held nine regular meetings.

The Audit Committee has established procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls and auditing matters, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters.

Persons wishing to communicate with the Audit Committee may do so by writing in care of the Chair, Audit Committee, Stewart Information Services Corporation, 1360 Post Oak Boulevard, Suite 100, Houston, Texas 77056.

Nominating and Corporate Governance Committee.    It is the Nominating and Corporate Governance Committee’s duty to

•        identify individuals who may become Board members or advisory directors;

•        select or recommend director nominees for the next annual meeting of stockholders;

•        develop and recommend to the Board of Directors a set of corporate governance principles applicable to the Company;

•        provide oversight of the Company’s corporate governance;

•        oversee the evaluation of the Board of Directors, its Committees and management; and

•        review and evaluate the Company’s sustainability policies and practices.

The Nominating and Corporate Governance Committee currently consists of C. Allen Bradley, Jr. (Chair), Deborah Matz, Karen R. Pallotta, and Manolo Sánchez, each of whom is “independent” as that term is defined in the listing standards of the NYSE. The Nominating and Corporate Governance Committee held fourteen meetings during 2023. For a complete list of the responsibilities of the Nominating and Corporate Governance Committee, please see our Nominating and Corporate Governance Committee’s charter, which is available on our website at stewart.com/corporate-governance.

Our Guidelines on Corporate Governance require that a majority of our Board of Directors be “independent” as that term is defined in the rules of the NYSE. As described above, a majority of our current Board of Directors is “independent” under the listing standards of the NYSE. In considering candidates for election as independent directors, our Guidelines on Corporate Governance also provide that the Nominating and Corporate Governance Committee shall be guided by the following principles:

•        Each director should be an individual of the highest character and integrity and have an inquiring mind, experience at a strategic or policy-setting level, or otherwise possess a high level of specialized expertise, and the ability to work well with others. Special expertise or experience that will benefit the growth of the Company’s business is particularly desirable.

•        Each director should have sufficient time available to devote to the affairs of the Company in order to carry out the responsibilities of a director and, absent special circumstances approved by the Board of Directors; no director should simultaneously serve on the board of directors of more than three other entities, excluding non-public companies such as those related to personal or family business and charitable, educational or other non-profit entities. Directors are not qualified for service on the Board of Directors unless they are able to make a commitment to prepare for, and attend, meetings of the Board of Directors and its committees on a regular basis.

•        Each independent director should be free of any significant conflict of interest that would interfere with the independence and proper performance of the responsibilities of a director. Directors to be nominated for election by the holders of Company Common Stock should not be chosen as representatives of a constituent group or organization; rather, each should utilize his or her unique experience and background to represent and act in the best interests of all stockholders as a group.

•        Each director is required to have equity ownership in the Company.

While the Board of Directors does not have a formal quantitative policy with respect to Board nominee diversity, the Nominating and Corporate Governance Committee of the Board of Directors considers Board diversity an integral part of the nominating selection process. In recommending proposed nominees to the full Board of Directors, the Nominating and Corporate Governance Committee is charged with building and maintaining a Board that has an ideal mix of talent and experience to achieve our business objectives in the current environment. In particular, the Nominating and Corporate Governance Committee is focused on relevant subject matter expertise, depth of knowledge in key areas that are important to us, and diversity of thought, background, perspective, and experience as well as diversity including, but not limited to race, gender, national origin, age and sexual orientation so as to facilitate robust debate and broad thinking on strategies and tactics pursued by us. There are no minimum requirements for nomination. For further information on director qualification, see our Guidelines on Corporate Governance located at stewart.com/corporate-governance.

Pursuant to our By-Laws, the Nominating and Corporate Governance Committee will accept and consider director nominations made by stockholders. To be considered for nomination at our 2024 annual meeting of stockholders, stockholder nominations must be received by us no later than February 7, 2024, and no earlier than January 8, 2024. In addition to satisfying the foregoing requirements under our By-Laws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.

Persons wishing to submit the names of candidates for consideration by the Nominating and Corporate Governance Committee may submit such nominations in writing addressed to the Nominating and Corporate Governance Committee in care of the Secretary, Stewart Information Services Corporation, 1360 Post Oak Boulevard, Suite 100, Houston, Texas 77056. Any such submission should include the information required by our By-Laws, including the candidate’s name, credentials, contact information and consent to be considered as a candidate.

Compensation Committee.    It is the duty of the Compensation Committee to assist the Board of Directors in discharging its responsibilities relating to the Company’s compensation policies, the compensation of the Company’s officers and senior managers, and to produce the required report on executive compensation for inclusion in the Company’s annual proxy statement. The Compensation Committee currently consists of Karen R. Pallotta (Chair), Thomas G. Apel, William S. Corey and Helen Vaid. During 2023, the Compensation Committee held six meetings and executed one consent in lieu of a meeting. Our Board of Directors has determined that each member of our Compensation Committee is “independent” as that term is defined under the listing standards of the NYSE.

For a complete list of the responsibilities of the Compensation Committee, please see our Compensation Committee charter, which is available on our website at stewart.com/corporate-governance. The Compensation Committee’s specific duties and responsibilities include, but are not limited to, the following:

•        Establishing and monitoring the basic philosophy and policies governing the compensation of executive officers and employees or officers of the Company who are also serving as members of the Board of Directors;

•        Reviewing recommendations submitted by the CEO, then approving and submitting to the Board of Directors for formal ratification any decisions with respect to the compensation for executive officers and officers of the Company who also are serving as members of the Board of Directors. These recommendations may include base pay, incentive compensation plans, perquisites, equity-based plans and relevant metrics and target award levels;

•        Approving and submitting to the Board of Directors for formal ratification compensation decisions with respect to the compensation plan of the CEO;

•        Recommending a pay-for-performance based CEO compensation plan to the Board of Directors and overseeing administration of the plan, including evaluating the CEO’s performance in light of the goals under the plan;

•        Reviewing and approving employment agreements, severance agreements and change in control agreements with the executive officers and any employees or officers of the Company who are also serving as members of the Board of Directors;

•        Reviewing the overall compensation structure and programs for all employees (including a review of any risks to the Company that may arise from such structure or programs);

•        Approving the equity-based compensation plans of the Company; and

•        Reviewing and discussing with management the disclosures in this proxy statement’s Compensation Discussion and Analysis (the “CD&A”), making a recommendation to the Board of Directors regarding the inclusion of the CD&A in this proxy statement, and producing a Compensation Committee Report for inclusion in the Company’s proxy statement, each in accordance with the requirements of the SEC.

In addition, the Compensation Committee has the sole authority to retain and terminate any independent compensation consultant. The Compensation Committee is responsible for determining the independence of its advisors by taking into consideration all factors relevant to advisor independence, including the factors set forth in the NYSE Listed Company Manual. The Compensation Committee has authority to direct the work of the compensation consultants and establish the consultants’ fees. It may also obtain advice and assistance from other advisors it determines necessary for effective completion of its duties. The Company is required to fund (i) the Compensation Committee’s approved expenses for any independent advisors employed by the Compensation Committee, and (ii) any other reasonable expenses incurred by the Compensation Committee.

Share Ownership Guidelines; Restrictions on Trading in Company Securities

In an effort to more closely link our non-employee directors’ financial interests with those of our stockholders, our Board established share ownership guidelines for our non-management directors. Each director is required to own an amount of Common Stock equal to a multiple of five times the stock portion of the annual director retainer. Each director has five years from initial election to acquire the required amount of Common Stock. Currently, seven

of the ten directors hold shares in excess of the shares required to meet the ownership guideline. The acquisition period for the remaining three shorter-tenured directors has not expired and each is progressing appropriately toward the required holdings.

Because short-range speculation in our securities based on fluctuations in the market may cause conflicts of interests with our stockholders, our Securities Trading and Investment Policy, applicable to our directors, executive officers (including the Named Executive Officers (as defined herein)) and all other employees prohibits trading in options, warrants, and puts and calls related to our securities and prohibits selling our securities short, holding our securities in margin accounts or pledging our securities as collateral for a loan except under very limited circumstances. Further, our Securities Trading and Investment Policy contains an anti-hedging policy that prohibits our directors, executive officers (including the Named Executive Officers) and all other employees from entering into hedging transactions, such as zero-cost collars and forward sale contracts, that are designed to hedge or offset any decrease in the market value of Company securities.

•        Formalized the Disclosure Committee process, with adoption of Committee charter, appointment of committee members, and regular cadence of meetings; and

•        Adopted and implemented a revised Director Orientation Program.

Social

•        Through The Stewart Title Foundation, Inc. and our Culture of Caring, Stewart supports the local communities of our employees. We have:

•        Increased our charitable donations through our semi-annual Community Service Awards program by 60% from 2021, supporting employee-designated charities, foundations and other non-profit organizations in all 50 states and the District of Columbia. The program was honored with NEI Global Relocation’s Corporate Responsibility Award for Community Service;

•        Strengthened communities in 9 cities across the U.S. by funding home repairs though our charitable partner, Rebuilding Together, providing opportunities for our employees to give back; and

•        Expanded the newest Stewart Scholarship class by 35% from 2022, giving $136,000 to 68 students pursuing their undergraduate degrees and who are dependents of Stewart employees.

•        Continued Diversity Equity & Inclusion (DE&I) Council efforts through an increased focus on community service and employee resources and remained committed to our employee value proposition through enhanced, inclusive benefits offerings and learning opportunities;

•        Delivered an employee appreciation bonus in the first quarter to all employees;

•        Partnered with an outside firm to complete a U.S. Employee Engagement Survey in 2022 and gauge progress with a U.S. Employee Pulse Survey delivered in 2023, with our results affording us recognition in the Top Workplaces program as a 2023 Top Workplace USA; and

•        Continued enhancements to our employee health and welfare programs to improve our overall value proposition:

•        Expanded wellness resources for our employees through our new Stewart Wellness Program, powered by Virgin Pulse, focused on improving physical health and well-being, as well as social, mental, and financial wellness;

•        Introduced a Childbirth and Bonding Paid Leave Program through our ongoing efforts to create inclusive programs and practices that appropriately support our employees and their families; and

•        Transitioned our Short-Term Disability program to be fully Company-paid, reducing cost and expanding access for our employees.

Environmental

•        Home office now powered 100% by renewable energy;

•        Impacted the environment positively through recycling efforts that resulted in:

•        More than 13,500 trees kept from being harvested

•        Continued our emphasis on reduced water usage and use of technology to reduce paper consumption by more than 5.3 million sheets of paper; and

•        Our NotaryCam subsidiary performed over 31,000 signings remotely online — eliminating the associated carbon emissions of vehicles traveling for those signings.

Additional information regarding our governance, sustainability initiatives and progress is available through our website at stewart.com/sustainability and stewart.com/corporate-governance. The information on our website, including our most recent Sustainability Report, is not, and shall not be deemed to be incorporated by reference into this Proxy Statement or any other filings with the SEC unless expressly noted in any such other filings.

Below is biographical information for our executive officers (except Mr. Eppinger, whose biographical information is contained on page 9):

Elizabeth K. Giddens.    Elizabeth K. Giddens, 53 years old, serves as Stewart’s Chief Legal Officer and Corporate Secretary. She leads Stewart’s legal organization, overseeing underwriting, claims, litigation, compliance, corporate governance, and regulatory areas for Stewart and its subsidiaries. Ms. Giddens is also a member of the board of directors of Stewart Title Guaranty Company, Stewart Title Company, and Stewart Title Insurance Company. She joined Stewart in 2022 as Deputy Chief Legal Officer and was promoted to Chief Legal Officer in 2023. Prior to joining Stewart, Ms. Giddens served as Senior Vice President, General Counsel, Chief Ethics & Compliance Officer, and Corporate Secretary for Integer Holdings Corporation from 2019 – 2021. From 2012 – 2019, she served as Senior Vice President, Deputy General Counsel, and Corporate Secretary for Mr. Cooper Group Inc. (formerly Nationstar Mortgage). Ms. Giddens has more than 25 years of legal experience practicing in law firms and public companies and holds a Juris Doctor from the University of Oklahoma College of Law, a Master of Business Administration from the University of Tulsa, and a Bachelor of Arts from Trinity University. She is a member of the Texas and Oklahoma Bar Associations and is licensed to practice law in Texas and Oklahoma.

David C. Hisey.    David C. Hisey, 63 years old, has served as Chief Financial Officer (“CFO”) and Treasurer of the Company since 2017. He leads Stewart’s financial organization and strategy, overseeing financial planning and analysis, accounting, treasury and audit functions, as well as investor relations, corporate development, lender services and property management. As CFO, Mr. Hisey partners with each area of the business to help with their financial and commercial success, focusing on top-line growth and bottom-line improvement. Mr. Hisey has more than 35 years of financial leadership experience and holds a Bachelor of Business Administration magna cum laude in Accounting from James Madison University and is licensed as a Certified Public Accountant in the Commonwealth of Virginia.

Emily A. Kain.    Emily A. Kain, 41 years old, has served as Stewart’s Chief Human Resources Officer (“CHRO”) since 2020. She is responsible for the people side of the business, focusing on the development and execution of the broader human resource and talent strategies, and also leads the corporate communications and community relations functions. Ms. Kain serves as an essential member of both Stewart’s DE&I Council and Sustainability Executive Leadership Council. Ms. Kain joined Stewart in 2014 as the manager of employee onboarding and re-engineered the hiring and onboarding processes, employee experience and employee referral program, and developed and launched the Stewart Celebrates global recognition program. As CHRO, she leads the organization in the areas of talent management, organizational design and succession planning, performance management, inclusion and diversity, total rewards, and all aspects of HR operations transformation. Prior to joining Stewart, Ms. Kain worked in public accounting and held multiple human resources positions in both the professional services and oil and gas industries. She draws on experience from both domestic and international roles of increasing scope and responsibility and has applied her extensive experience to advancing Stewart’s HR function and strategy in support of the overall business plan and strategic direction of the organization. She holds a Bachelor’s degree in accounting from Louisiana State University and a Master’s degree in accounting, with a concentration in internal audit, from the University of New Orleans. She also completed the Executive Education, Emerging Leaders Program at Rice University in 2011.

Steven M. Lessack.    Steven M. Lessack, 71 years old, has served as Group President of the Company since 2019. With more than 35 years of title insurance and related real estate knowledge, he also holds the position of Group President for Stewart Title Guaranty Company and Stewart Title Company. He is responsible for and oversees Direct Operations throughout the United States as well as our Commercial Services group, Asset Preservation, Inc., and

Stewart Insurance Risk Management within the United States. In 1997, he opened the Company’s Canadian operation and is responsible for the Company’s expansion activities outside of the United States. He serves as Executive Director of Stewart Title Europe Limited and Stewart Title Malta as well as CEO for Stewart Title Limited and Chairman of the Board of Stewart Title Insurance Company. He attended California State University in San Bernardino.

Brad A. Rable.    Brad Rable, 57 years old, has served as Group President, Technology and Operations of the Company since 2022. Prior to being promoted to his current role, Mr. Rable served as Chief Information Officer of the Company from 2015 – 2022. A veteran IT leader and executive with significant experience in developing major initiatives, Mr. Rable is responsible for all areas of digital business enablement, enterprise technology solutions, enterprise operations, and related strategies. Prior to joining Stewart, Mr. Rable was an executive partner with Gartner Executive Programs. He previously served as Executive Vice President, CIO, and Chief Strategy Officer for AIG/United Guaranty, leading the technology and product development divisions, as well as the innovation team that launched the AIG Mortgage Advisory Company. Mr. Rable received a Master of Arts in computer information resource management from Webster University, Missouri, and a Bachelor of Science in management information systems from Bowling Green State University, Ohio.

Tara S. Smith.    Tara S. Smith, 44 years old, has served as Group President of Stewart’s Agency Operations since 2019. In this role, she manages Stewart’s independent title agency network and all products and services offered to our agents, while also having oversight of Stewart’s corporate marketing function. Ms. Smith joined Stewart in 2013 after 12 years in public accounting through which she provided strategic guidance to clients in the oil-and-gas and financial services industries. Her leadership, deep knowledge, strategy implementation and problem-solving led to her rising through leadership roles at Stewart that included the positions of Vice President, Agency Financial Director, and Executive Vice President. Ms. Smith serves on the American Land Title Association’s Board of Governors and was named one of Housing Wire’s “Women of Influence” in both 2017 and 2021 for her contributions to the industry. She earned a Bachelor of Business Administration in finance from the University of Texas at Austin.

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This Compensation Discussion and Analysis (‘‘CD&A’’) describes the Company’s executive compensation program for 2023. The following pages explain the process, objectives and structure of the executive compensation decisions made by our Compensation Committee (the “Committee”) and our Board of Directors for 2023. This CD&A is intended to be read in conjunction with the tables beginning on page 36 below, which provide detailed historical compensation information for our Named Executive Officers (‘‘NEOs’’).

For 2023, our NEOs were:

Executive Summary

Our financial performance in 2023 continued to be negatively impacted by the rise in and volatility of interest rates that resulted in historically low real estate activity levels. This led us to continue to manage the business with a focus on cost discipline while also seeking out opportunities for targeted investments in skills and capabilities to best position us for the long term. We continued to make significant progress on our long-term strategic investments and enterprise initiatives critical to building a stronger and more resilient business. We achieved share growth in attractive Direct, Agency, and Commercial markets and improved our technology to enhance the customer experience, gain efficiency in our operations, and improve our data management and access. Additionally, our stock price performance was strong, gaining 37.5% during 2023. Results of the year include:

Net Income Attributable to the Company:    $30.4M ($1.11 per diluted share) compared to $162.3M ($5.94 per diluted share) in 2022;

Total Revenues:    $2.3B compared to $3.1B in 2022;

Direct Title Revenues:    $962.7M compared to $1,246.3M in 2022;

Gross Agency Revenues:    $986.0M compared to $1,466.2M in 2022;

Return on Equity:    2.2% compared to 11.9% in 2022;

Reported Pre-Tax Margin:    2.7% compared to 7.6% in 2022; and

Stock Performance:    Increase of 37.5% compared to a decrease of 46.4% in 2022.

2023 Pay Decisions

Although the Company’s financial results were adversely impacted by the continued weakness in the real estate market including rapidly rising interest rates and their negative impact on loan originations, the Compensation Committee believes the Company’s executive officers and NEOs appropriately balanced cost management activities with demonstrated progress and achievement on key strategic initiatives that better position the Company for long term success. As a result, the Compensation Committee believes that the compensation paid to the Company’s NEOs for 2023 was well aligned with Company performance and consistent with our long-standing track record of demonstrating a strong pay-for-performance philosophy. Decisions made for 2023 included:

•        Focusing NEO target pay packages on variable compensation (78% for our CEO and 69% for our other NEOs), as described in the “2023 Pay Mix” section;

•        Widening performance target levels on the financial metrics in our Short-Term Incentive Plan (“STIP”), which resulted in payouts between 75-78% of target; and

•        Emphasizing performance-based awards (60%) with a continued balance of time-based awards (40%) to promote retention and shareholder alignment in our Long-Term Incentive Plan (“LTIP”), as described in the “Long Term Incentives” section.

Say-on-Pay Proposal

The Company holds an advisory vote on executive compensation every year. An overwhelming majority (98.5%) of the votes on our 2023 Say-on-Pay proposal were cast in favor of the proposal, which was similar to our 2022 result. The Committee interprets this continued strong level of support as affirmation of the overall structure of our executive compensation program and our approach to compensation decisions. As our business evolves, we are committed to the continuous improvement of our executive compensation program to ensure alignment with our strategic business priorities, to support our ability to attract, motivate and retain top executive talent, and to align executive compensation with performance.

Our executive compensation program is also intended to be market competitive. For 2023, the Committee approved a ‘‘total direct compensation opportunity’’ for each executive officer consisting of base salary, target short-term incentive compensation, and target long-term incentive compensation. The intent is for total direct compensation to be competitive among the comparator group, specifically targeting the pay comparator group median. The Committee also considers historical and individual circumstances, including tenure, experience, individual performance, retention factors, and the availability of comparable data for each position.

The Committee believes the majority of executive officer compensation should be “at-risk,’’ with the realized value heavily dependent upon the Company’s financial, operational, and shareholder return performance. We believe executive officers should be rewarded appropriately for their efforts when financial performance meets or exceeds established objectives. Likewise, incentive compensation may be below target or not be earned if performance does not meet established goals or thresholds. Additionally, we believe executive officers should also be evaluated on their leadership competencies and individual contributions and achievements on key non-financial company objectives that contribute to our vision of being the premier title services company. These beliefs form the foundation of our incentive compensation, which is designed to appropriately balance annual results and the Company’s sustained, multi-year success. Short-term awards are payable in cash, while long-term awards are equity-based.

Implementing the Philosophy in 2023

We believe one of the most important and primary objectives of our executive compensation program is to create a strong and meaningful relationship between the compensation earned by our executive officers and the long-term sustainable success of our Company and shareholders. During 2023, in support of this objective, the Committee determined that the performance goals under the STIP set in the fourth quarter of 2022 did not appropriately reflect the increased risk that the business forecasts used to establish 2023 performance goals could be materially inaccurate as a result of the Company’s inability to reasonably predict the timing, magnitude or direction of Federal Reserve monetary policy decisions and their resulting impact on the housing finance market. In response, the Committee widened the STIP performance ranges by lowering the threshold and increasing the maximum goals for our performance metrics. This resulted in threshold performance targets reflective of the downside risk to real estate activity and more rigorous maximum performance targets to minimize the risk of excessive payouts. The target performance goal for each performance metric was not adjusted and the payout opportunities for each NEO were not modified. The Committee believed this approach would better align with our pay-for-performance philosophy by reducing the risk of inaccurate forecasts contributing to either excessive or overly punitive payouts. See the “2023 Performance Metrics, Goals, Results and Bonus Payouts” section for more information.

To provide our NEOs and other executive officers with compensation that is competitive, target pay levels are generally set at the median for the pay comparator group with an opportunity to earn compensation in excess of the median in return for exceeding performance goals and conversely respond in cases where performance goals are not met.

Our NEOs and other executive officers are eligible for additional benefits and limited perquisites in line with market practices as well as the same health and welfare benefits available to our general employee population.

2023 Pay Mix

The core principle of our executive compensation philosophy is to pay for performance. Accordingly, our executive officer compensation program is heavily weighted toward ‘‘at-risk’’ variable compensation.

We have three elements of total direct compensation: base salary, short-term incentive, and long-term incentive. As illustrated in the charts below, in 2023, 78% of target total direct compensation to Mr. Eppinger, our CEO, was variable and “at-risk”, while the average mix of other NEO target total direct compensation was 69% variable and “at-risk”.

Benchmarking and Pay Comparison

When considering our compensation practices and pay levels, the Committee reviews the compensation practices and pay levels of a comparator group of companies to determine market levels. Since there are only four publicly-held title insurance companies, and two of those are substantially larger than the Company, a pay comparator group was established by the Committee that reflects companies of comparable size that share a comparable labor market. The Committee periodically reviews the composition of this group to ensure that the companies in the group are relevant for comparative purposes and that the companies in the group have executive officer positions with similar scope and responsibilities.

To identify an appropriate comparison group, the Committee and its independent compensation consultant reviewed data for potential comparators relating to revenue (generally 0.5x to 2.0x our size), market capitalization, and sector within the insurance industry. The Committee also considered business focus (such as title companies, mortgage insurance companies, property/casualty insurance companies, mortgage companies, reinsurance companies, and similar companies within the insurance sector) and the relevance of the company as a comparator based on a ‘‘comparator of comparators’’ assessment, which includes comparator companies of the other publicly-held title companies.

For 2023, the Committee considered the Company’s size relative to the companies in last year’s comparator group and approved changes designed to maintain companies of comparable size. American Equity Investment Life Holding Company, CNO Financial Group, and Hilltop Holdings were removed considering business focus, and Employers Holdings, Enstar Group, James River Group Holdings, Safety Insurance Group, and United Fire Group were all removed considering their relatively smaller revenue size. American National Insurance Company was acquired in May 2022 and is no longer publicly traded. Cincinnati Financial Corporation, Rocket Companies, Erie Indemnity Company, Mr. Cooper Group, UWM Holdings Corporation, and PennyMac Financial Services were all added.

Base Salaries

The Company pays an annual base salary to each NEO to provide the executive officer with a fixed rate of cash compensation during the year. In establishing base salaries, the Committee considers a variety of factors including, but not limited to, leadership and operational performance as it relates to an executive officer’s level of duties and responsibilities, the executive officer’s impact on the Company’s achievement of its strategic objectives, and the executive officer’s base salary relative to the base salaries of individuals in a similar role in peer companies.

In connection with its annual review of executive officer compensation, the Committee considered each NEO’s base salary, and in response to the downturn in the real estate market, elected not to make changes to salary levels for 2023 as shown in the table below:

(1)      Ms. Giddens became an executive officer January 1, 2023.

Short-Term Incentives

Short-Term Incentive Plan for 2023

The Committee believes short-term incentive compensation is a necessary component in providing a competitive pay opportunity. Further, we believe our short-term incentive approach should align to the Company’s overall objectives and contribute to creating shareholder value. We believe this is achieved by emphasizing financial metrics that our executive officers can directly influence and that strongly correlate to our stock performance and giving the Committee the ability to consider leadership competencies and individual contributions and achievements on key non-financial company objectives.

Setting Target Award Opportunities

The Committee established a short-term incentive target award amount for each NEO as a percentage of base salary. This target is used at the end of the year as the base point for determining any actual award earned. The Committee sets the target award opportunities based on each NEO’s level of responsibility and ability to impact our business results, as well as relative to benchmark pay data, as outlined on page 24.

The 2023 short-term incentive target award opportunities, which were the same as in 2022, were as follows:

2023 Performance Metrics, Goals, Results and Bonus Payouts under the STIP

Consistent with the previous year, the Committee chose to maintain Net Revenue and Pre-Tax Margin as the financial metrics and maintain an Individual Qualitative metric in our 2023 STIP. The Committee believes Pre-Tax Margin and Net Revenue, as defined below, align our NEOs’ interests with the financial objectives of the Company and are two of the most important metrics used by shareholders to evaluate the financial performance of our business. The Individual Qualitative metric was maintained because we believe it further aligns our STIP to our compensation philosophy of incentivizing our executives to achieve financial and strategic goals in a way that creates and sustains long-term value. A heavier weighting on Pre-Tax Margin was maintained because we believe it provides the best measure of our progress towards improving our operating performance and executing on strategic priorities that will drive sustainable, long-term success. Additionally, we believe this heavier weighting better aligns our STIP with our shareholders because of the strong correlation of Pre-Tax Margin with stock price returns.

For Mr. Eppinger, Mr. Hisey, and Ms. Giddens, short-term incentive bonus payouts are based on the achievement of corporate goals. For Mr. Lessack and Ms. Smith, the short-term incentive bonus payout is a mix of corporate-level and business-specific goals tied to the business units they lead, as set forth in the tables below. Mr. Lessack was given a heavier weighting on his business-specific goals to reflect the significant influence his business unit’s performance has on the Company’s overall results. Ms. Smith was given a heavier weighting on her Business Unit Net Operating Revenue as compared to Business Unit Contribution Margin to align with the financials goals for Agency Services.

For each financial goal, the achievement of threshold performance results in a payout multiple of 50% of target, and the achievement of maximum performance results in a payout multiple of 200% of target. Performance below threshold levels results in no payout for that incentive component, and performance between threshold and maximum levels results in an interpolated payout between 50% and 200%.

Our performance target goals are set in alignment with our annual financial plan, which is developed in the fourth quarter of the preceding year and reviewed and approved by the Company’s Board of Directors no later than early in the first quarter. The development of our annual financial plan is a rigorous process that considers many factors including, but not limited to, prior year performance, industry data, key economic data and forecasts, Company strategic objectives, and long-term financial goals. The resulting target performance goals reflect performance that we feel balance reasonable attainment in the anticipated market environment and objective progress towards our longer-term financial goals that will benefit our shareholders. Target performance goals may be set above or below prior year actual results depending upon whether industry and financial forecasts expect a more favorable or challenging market environment compared to the previous year. Threshold and maximum performance target levels are then adjusted from target performance goals.

The target performance goals approved in the fourth quarter of 2022 for Pre-Tax Margin and Net Revenue were 5.15% – 5.65% and $1,632M, respectively. These targets were set below the prior year’s results and reflected the expectation that the housing market softening that started in the second half of 2022 would continue into 2023. Forecasts by Fannie Mae and the MBA expected total mortgage originations to decline 22% from 2022 and existing and new home sales to be lower by 17% and 9%, respectively. Additionally, the average 30-year mortgage interest rate was expected to be 5.8% for the full year compared to 5.3% for 2022.

Although we follow a rigorous process to develop our annual plan and use forecasts from sources such as Fannie Mae and the Mortgage Bankers Association, forecasting future rates and real estate activity can be difficult and unpredictable and result in market forecast assumptions that prove to be inaccurate. Since the title insurance business is highly sensitive to changes in the level of activity and sales prices in the real estate market, driven primarily by mortgage interest rates, sharp and unexpected changes in rates can significantly impact our revenues and margin. As a result, setting threshold and maximum performance goals is a difficult exercise. The Committee strives to set performance levels that create a range of achievement from threshold to maximum that reflects the risks and uncertainty of the anticipated business environment and align with payout opportunities that together, lead to strong pay-for-performance outcomes.

During 2023, following the release of the Federal Reserve meeting minutes in Q1 that significantly changed the expected direction of interest rates for the year, the Committee determined that the performance levels originally established in the fourth quarter of the preceding year were too narrow and did not create a range of achievement that accurately reflected the increased forecast risks associated with the uncertainty of interest rates. Additionally, the Committee considered the historical performance and payouts under the STIP and determined the use of narrower performance ranges contributed to significant volatility in the yearly payouts. As a result, the Committee decided to modify the original narrower ranges and adopt wider performance ranges to more appropriately reflect increased forecast risks and strengthen the alignment between payouts and performance achieved relative to actual market conditions. The Committee believed this approach would better align with our pay-for-performance philosophy by reducing the risk of inaccurate forecasts contributing to either excessive or overly punitive payouts.

In revising the threshold and maximum performance target goals for 2023, the Committee considered the increased uncertainty and volatility around interest rates and responded by setting wider performance ranges on both financial metrics compared to previous years. The target performance goal for each performance metric was not modified. For Pre-Tax Margin, the threshold performance goal was set 350 basis points below the low end of the target range and the maximum performance goal was set 350 basis points above the high end of the target range. This created a performance achievement range of 1.65% to 9.15%. For Net Revenue, the threshold and maximum performance goals were set 20% below and above the target performance goal, respectively, to create a performance achievement range of $1,306M to $1,958M. The Committee believed wider performance ranges would:

•        More effectively motivate and reward management to balance navigating a highly uncertain real estate market with creating long-term value.

•        More closely align with our pay-for-performance philosophy by reducing the impact of sharp and unexpected changes to the real estate market relative to the assumptions used to set performance target levels.

•        Create more rigor in achieving a maximum payout while reducing the risk of a demotivating outcome.

For 2024, in recognition of the continuing uncertainty of future rates and increased risk of forecasts being materially inaccurate as a result, the Committee intends to maintain the use of wider performance ranges.

The following tables provide a breakdown of targeted award opportunities, metrics used to determine short-term incentive payout, performance levels, performance results, and the actual short-term incentive payout as a percent of the target amount indicated in the table above for each NEO. Performance range numbers are rounded.

Individual Qualitative Metric

The Committee used the individual qualitative metric to consider each executive officer’s contributions towards key company strategic objectives and demonstrated leadership competencies. The following contributions and accomplishments were considered in evaluating each NEO’s individual performance:

Frederick H. Eppinger

•        Made and integrated acquisitions to expand service offerings, enhance technological capabilities, and grow market presence in certain strategic markets;

•        Continued to strengthen talent in key senior leadership positions;

•        Continued to lead the Company’s efforts to make progress on Sustainability objectives;

•        Continued to champion a culture of caring and community outreach; and

•        Continued to improve our employee value proposition by dedicating resources to enhance our health and welfare benefits offering, provide more learning and development opportunities for all employees, and support employee engagement.

David C. Hisey

•        Improved processes to more effectively support acquisitions in different stages;

•        Demonstrated progress towards enhancing capital, cash management and investment frameworks to improve returns; and

•        Continued to strengthen organization talent through successful hiring and succession planning.

Steven M. Lessack

•        Demonstrated progress on key leadership succession plans;

•        Demonstrated progress in market share growth in key markets; and

•        Implemented and executed operational improvements to increase revenue and reduce costs.

Tara S. Smith

•        Completed title production state expansion and enhanced the quality of our product in several key states;

•        Implemented model to support growth of key commercial accounts;

•        Continued deployment of technology solutions and enhancements to improve the experience of our Agents; and

•        Demonstrated progress towards revenue growth in key markets.

Elizabeth K. Giddens

•        Supported the Company’s sustainability efforts in partnership with the Sustainability Committee, and advised the Board and management with respect to corporate governance matters;

•        Demonstrated progress on leadership education for newly hired and acquired leaders;

•        Expanded Underwriter Mentorship Program; and

•        Launched new initiatives focused on Underwriter development.

Additionally, payout on the individual qualitative metric is capped at the higher of 1) Financial Metrics result or 2) Target payout.

Corporate and Business Unit Performance Goals — Mr. Lessack

(1)      The Business Unit (“BU”) for Mr. Lessack includes Direct Operations, Commercial Services, Asset Preservation Inc., Relocation Services, Stewart Insurance & Risk Management, and International Operations. Contribution Margin and Net Operating Revenue are calculated based on aggregate results and on an adjusted basis following the same description for Pre-Tax Margin and Net Revenue, respectively.

Corporate and Business Unit Performance Goals — Ms. Smith

(1)      The Business Unit (“BU”) for Ms. Smith is Agency Services. Contribution Margin and Net Operating Revenue are calculated based on aggregate results and on an adjusted basis following the same description for Pre-Tax Margin and Net Revenue, respectively.

The following table shows the calculation of each NEO’s actual 2023 short-term incentive bonus based on the target opportunity and total payout multiple from the results shown in the tables above. The Committee approved the payout of the individual qualitative metric at target for each NEO in recognition of their individual achievements and demonstrated leadership competencies. The Committee also considered the performance of the Company and believed that the executive officers and NEOs appropriately balanced short-term disciplined cost management activities with long-term investments that will benefit the Company and shareholders in the long term in a difficult operating environment.

(1)      Reflects the aggregate payout multiple from the results shown in the tables above.

Long-Term Incentives

Long-Term Incentive (LTI) Plan for 2023

We believe that long-term incentives are critical to helping the Company achieve alignment of shareholder and executive officer interests by rewarding NEOs for the creation of sustained shareholder value and providing us with a means to attract, retain, and motivate the high-caliber executive officers needed to achieve our desired performance goals.

For 2023, performance-based and time-based restricted stock units represented 60% and 40%, respectively, of the total value of the award based on the grant date fair value. This mix is intended to balance the achievement of performance goals with the importance of retaining key executive officers critical to executing our long-term strategy and delivering strong returns to our shareholders, and also recognizes market practices.

Time-Based Restricted Stock Units

Time-based equity awards are granted in the form of restricted stock units. These are intended to encourage the retention of our NEOs and align their interests with those of shareholders by providing a continuing incentive to increase shareholder value. The realized value of the award depends on the Company’s share price at the time awarded units vest. The time-based restricted stock units vest in equal annual installments over three years from the grant date of the award.

Performance Based Restricted Stock Units

Performance-based equity awards are granted in the form of restricted stock units and are subject to both performance and time restrictions and are either earned at 100% of the target grant or forfeited. For the performance restriction to be met, the Company must achieve a certain target percentage of Pre-Tax Margin (as defined previously) in three out of seven quarters beginning with Q2 2023 and ending with Q4 2024. If the performance restriction is not met, then the full award will be forfeited. The Committee felt achievement of the target in three out of seven quarters provided the best balance of incentivizing sustainable long-term performance with the risk and challenges of predicting future performance in the real estate market which can be highly volatile largely due to interest rate changes. The time restriction is considered met on the third anniversary of the grant date.

The Committee considered many different metrics but decided to maintain Pre-Tax Margin because it provides a strong measure of management’s operational performance and has a strong correlation to shareholder returns. Additionally, a key part of our long-term strategy is to build a stable and resilient company that can sustain the ups and downs of a full real estate cycle. The Committee believes Pre-Tax Margin aligns well to measuring management’s execution on our long-term strategy, which can have a significant impact on long-term shareholder returns. Although Pre-Tax Margin is also used in our STIP, the Committee believes that along with the approach used to set the targets in each plan as well as the design of each plan, it provides the best and most direct way to retain and reward our NEOs for their performance and align their compensation with the interests of our shareholders.

In setting the Pre-Tax Margin target for 2023, the Committee considered many factors including historical Pre-Tax Margin performance, key economic and real estate market forecasts, and progress made on our long-term strategy. These factors were weighed against the objectives of our LTI program and the Committee decided to set the target for the 2023 grant at 5.0%. We believed this target provided a balance between setting an attainable and sustainable level of operational performance and the difficulty and uncertainty of predicting future performance. Additionally, we believed it was appropriate to set the target below the prior year’s target because of the softening of the real estate market largely due to rising interest rates.

The Committee believes the design of our performance-based restricted stock units promote a strong pay and performance alignment. The use of Pre-Tax Margin provides a metric that strongly contributes to total shareholder returns and is a metric that management can directly influence. It is measured over a period that can be reasonably forecast and balances attainability with a sustainable level of operational performance. Additionally, the award can only be earned at a maximum 100% of the target grant if the performance restriction is met. This means that for executive officers to realize any upside over the three-year vesting period, shareholder returns must be positive.

The Decision-Making Process

The Committee, Management, and the Committee’s independent compensation consultant collaborate in designing the executive officer compensation plans with the shared goal of developing and implementing a program that will assist the Company in the accomplishment of its strategic objectives, provide meaningful reward opportunities for NEOs and other executive officers, and promote shareholder value.

The Role of the Compensation Committee

The Committee is comprised solely of independent, non-employee members of the Board of Directors and oversees all components of the executive officer compensation program. Details of the Committee’s authority and responsibilities are specified in its Charter, which is available at stewart.com/corporate-governance.

The Committee determines the components and amount of compensation for our NEOs and other executive officers and provides overall guidance for employee compensation policies and programs. The Committee reserves the right to make modifications to annual incentive plans and retains an independent compensation consultant to receive guidance and insight on best practices. The Committee reviews and sets the compensation of the CEO, evaluates CEO performance and compensation in executive session without management present, and consults with the CEO for compensation recommendations for other executive officers. The CEO’s recommendations are based on the achievement of targeted metrics, performance of the individual’s respective business or function, the individual’s contribution to the Company’s short-term and long-term success and employee retention considerations. The Committee reviews current compensation best practices with its independent compensation consultant, considers our CEO’s recommendations and approves, in its sole discretion, any compensation changes affecting our executive officers.

The Role of Management

Members of management assist the Committee by providing individual and aggregate pay recommendations that management believes recognize individual contributions and provide market-competitive compensation for executive officers that is consistent with the Company’s compensation philosophy. As part of this process, management engages with the Committee regarding the information provided on market trends, potential compensation plan designs, and industry trends, before making recommendations to the Committee. In support of 2023 compensation plans, management:

•        Recommended base salaries and short-term and long-term incentive target levels for executive officers other than the CEO; and

•        Proposed incentive metrics, targeted performance levels including threshold and maximum performance levels, and plan components for the short-term and long-term incentive plans.

At the end of the 2023 performance year, management reviewed metric-based performance relative to goals in 2023 for each executive officer, and the CEO presented recommendations regarding short-term and long-term incentive award payouts for each of the executive officers aside from himself.

The Committee reviews and discusses management’s recommendations in executive session in conjunction with its independent compensation consultant, when making compensation decisions or recommendations to the full Board.

The Role of the Compensation Consultant

For the 2023 plan year, the Committee engaged Mercer (US) LLC (“Mercer”) to assist in providing a comprehensive assessment of its executive officer compensation programs.

The Committee’s independent compensation consultant provides various executive officer compensation services to the Committee. Generally, these services include advising the Committee on the principles of our executive officer compensation program and providing market information and analysis regarding the competitiveness of our program design and award values in relation to performance. In addition, the consultants attended meetings of the Committee, as requested by the Committee Chair.

The NYSE has adopted guidelines for compensation committees to consider when evaluating Compensation Committee advisor independence. The Committee reviewed these guidelines and determined that Mercer is an independent consultant under these guidelines. Mercer performed no services for the Company other than services for the Committee regarding executive officer and non-employee director compensation.

Management communicated with the consultants and provided data to them regarding executive officers but did not direct the consultants’ activities, which were directed by the Committee.

The Committee maintains sole authority to select, retain, terminate, and approve fees and other retention terms of the relationship with the compensation consultant.

Executive Compensation Risk Mitigation

The Committee does not believe that the Company’s compensation policies and practices encourage excessive or unnecessary risk-taking by our executive officers and other employees. Moreover, the Committee believes that our compensation program is designed with an appropriate mix of compensation to mitigate these risks. Practices include:

•        Setting base compensation for executive officers within reasonable ranges of our competitive market and rewarding executive officers through our short-term and long-term incentive plans for exceptional performance when the Company outperforms to align management’s interests with shareholders’ interests;

•        Assuring the Committee maintains discretion to consider any imprudent risk assumption or action that led to short-term gains or otherwise unduly contributed to the attainment of specific objectives and to adjust awards accordingly;

•        Incorporating performance-based long-term incentives, which encourage consistent behavior and reward long-term, sustained Company performance;

•        Prohibiting trading of derivatives or hedging by executive officers and directors, as required in the Company’s Securities Trading and Investment Policy;

•        Maintaining a claw back policy to recover any performance-based compensation paid to current and former executive officers, including stock-based awards that is determined to have been wrongfully earned in light of a financial restatement;

•        Benchmarking current compensation practices, policies and pay levels with our pay comparator group on a routine basis;

•        Requiring a mandatory forfeiture of grants of unvested equity upon a termination by the Company for cause;

•        Ensuring that the Company’s executive officer compensation program is overseen by a committee of independent directors, who are advised as needed by both internal and external risk experts; and

•        Using share ownership guidelines that require executives to retain a specified ownership level of equity awards.

Stock Ownership Guidelines

A significant focus of our compensation philosophy is on aligning the interests of our executive officers with those of our shareholders. In 2017, the Company implemented stock ownership guidelines, as presented in the table below.

Under the established stock ownership guidelines, the required levels of ownership as a multiple of base salary is five times for the CEO and two times for other NEOs. These levels of ownership must be achieved within a five-year period from either the date the guidelines became effective or the time an individual becomes an executive officer, whichever is later.

The Committee annually monitors stock ownership requirements and the progress of executive officers toward achieving those guidelines. In making this determination, the Committee considers Common Stock beneficially owned by the executive officer (but excluding options whether or not exercisable), and time-based restricted stock granted to the executive officer.

As of December 31, 2023, Messrs. Eppinger, Hisey, Lessack and Ms. Smith have achieved their respective guideline ownership levels. Ms. Giddens is still within the five-year timeframe to comply.

Equity Award Policies

The Committee has a policy against making equity grants to our executive officers until any material non-public information has been disclosed to the public.

Claw Back Policy

Effective October 2, 2023, we amended our compensation recovery policy (“claw back policy”) in compliance with the NYSE’s listing standards. Our claw back policy provides for the recovery of erroneously awarded incentive-based compensation paid to current and former executive officers in the event of an accounting restatement, without regard to any fault or misconduct, unless such recovery is impracticable. The claw back policy covers all incentive-based compensation as defined in the final rule, which includes performance-based awards granted under the 2020 Incentive Plan and annual cash-based bonus awards under our STIP.

Hedging and Pledging

The Company’s Securities Trading and Investment Policy prohibits any director, executive officer, employee, or any Section 16 Reporting Person from engaging in transactions designed to insulate them from changes in the Company’s stock price. The Company’s anti-hedging policy prohibits our directors, executive officers, Section 16 Reporting Persons, and all other employees from entering into transactions that include (without limitation) equity swaps or short sales of our securities, margin accounts or pledges of our securities, and hedges or monetization transactions involving our securities that are designed to offset any decrease in the market value of the Company’s securities. In ‎addition, the purchase or sale of puts, calls, options, or other derivative securities based on the Company’s securities is prohibited under this policy and borrowing against any account in which our securities are held is prohibited.

Health and Welfare Plans

The Company’s executive officers, along with all other employees, are eligible to participate in our medical, dental, vision, life, accidental death and disability, long-term disability, short-term disability, and other applicable employee benefits. In addition, executive officers and other key personnel are provided an executive benefit plan that consists of additional Company-paid long-term disability and group variable life insurance basic coverage.

Defined Contribution Plan

The primary tax qualified long-term compensation plan offered to Company employees in the United States is the Stewart 401(k) Savings Plan. Executive officers participate in this plan on the same terms as our other employees.

Deferred Compensation Plan

The Salary Deferred Compensation Plan is a nonqualified, elective, deferred compensation plan designed to supplement any existing qualified plans and provide an extra financial benefit to key personnel and highly compensated employees. The Company supports this plan as an additional method for key personnel and highly compensated employees to defer all or a portion of their salary, commissions, and bonus to plan for retirement. Assets are held in a separate rabbi trust to pay plan benefits. Rabbi trust assets are subject to the claims of creditors of the Company in the event of bankruptcy. None of the NEOs contributed to this plan in 2023.

Executive Officer Employment Agreements

The Board has approved, based on the recommendation of the Committee, the provision of certain post-termination benefits to executive officers to encourage their continued leadership and commitment in the event of a change in control. In exchange for the benefits provided under each agreement, executive officers are required to agree to certain confidentiality, non-competition, and non-solicitation covenants which the Committee believes are valuable to us when an executive officer’s employment terminates. In addition, the Committee believes that executive officers should be provided with an inducement to remain in the service of our Company in the event of any proposed or anticipated change in control of our Company in order to facilitate an orderly transition, without placing the executive officer in a position where he or she is concerned about being terminated without compensation in connection with such a transaction.

Individual employment agreements exist between each NEO and the Company. The employment agreements articulate the terms and conditions of an executive officer’s employment with the Company, including termination provisions and applicable restrictive covenants. The Committee believes the employment agreements provide assurance to the executive officers by articulating employment terms not subject to change except by annual action.

Generally, each agreement contains the following provisions:

•        Term:    following the completion of the initial term, each agreement will automatically be extended annually for a one-year term, unless at least 90 days prior to the applicable renewal date either party gives written notice that the term should not be further extended after the next termination date. Mr. Eppinger has an employment term concluding on December 31, 2025. Following the completion of the existing term for Mr. Eppinger, the agreement will automatically be extended annually for additional one-year terms, unless at least 90 days prior to the applicable renewal date either party gives written notice that the term should not be further extended after the next termination date.

•        Salary:    initial annual base salary, subject to annual review and increase by the Board.

•        Short-Term and Long-Term Incentive Participation:    opportunity to participate in the Company’s short- and long-term incentive plans are subject to annual review by the Committee. No guaranteed amounts are paid under either our short-term or long-term incentive plans, except as set forth in any accelerated vesting provisions of the respective agreements.

•        Benefit Plan Participation:    opportunity to participate in other Benefits offered to employees such as group life, qualified Employee Stock Purchase Plan (“ESPP”), medical plan, and other fringe benefits.

•        Perquisites:    perquisites include normal paid association and membership dues, executive development up to $5,000, financial planning services, and additional executive life insurance and disability benefits for all NEOs. Mr. Eppinger received a monthly housing allowance and participated in the Director Charitable Matching Gift Program in 2023. Mr. Lessack received monthly auto allowances. These are described in more detail in the “All Other Compensation” section.

•        Severance and Change in Control Provisions:    described in more detail in the “Potential Payments upon Termination or Change in Control” section.

•        Additional Stockholder-Friendly Requirements:    minimum Company stock ownership requirements and restricted covenants including confidentiality, non-competition, and non-solicitation.

Option Agreement Amendment

As previously disclosed, on March 8, 2023, the Compensation Committee adopted an amendment (the “Option Amendment”) to the outstanding stock option award agreements, other than any such agreements with Mr. Eppinger. The Option Amendment provides that, if the option holder’s employment with the Company is terminated in connection with a Qualifying Retirement (as defined below), the exercise period for such option shall be extended to the lesser of five years from the date of such Qualifying Retirement and the remaining term of the option. The Compensation Committee adopted the Option Amendment in order to harmonize the terms of its stock option award agreements with the terms of its restricted stock unit award agreements — which was an issue initially highlighted for the Compensation Committee in connection with the retirement of a former executive officer at the end of 2022. Additionally, the Compensation Committee determined that it was appropriate to extend the exercise period so that retirement eligible employees would not defer retirement when stock options may be underwater due to factors primarily related to the current macroeconomic environment.

A Qualifying Retirement means (a) such employee’s employment is terminated by reason of (i) voluntary resignation by the employee at or after age sixty (60) with at least five (5) years of continuous employment with the Company or a subsidiary of the Company or (ii) voluntary resignation by the employee at or after age sixty-five (65), and (b) such employee executes, delivers, and ‎does not revoke, a full release of claims against the Company on or after ‎the date the employee ceases to be employed by the Company in the form provided by the Company.

(1)      Represents grant date fair value of stock awards granted in the designated year calculated in accordance with FASB ASC Topic 718. For additional information regarding such computations and any related assumptions, see Note 11 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. More information on fiscal 2023 Stock Awards is set forth in ‘‘Compensation Discussion and Analysis — Elements of 2023 NEO Compensation — Long-term Incentives’’ and in ‘‘Grants of Plan-Based Awards’’ below.

(2)      Represents grant date fair value of stock options granted to each NEO in the designated year completed in accordance with FASB ASC Topic 718.

(3)      Represents cash incentive awards paid to the NEOs. More information on fiscal 2023 Non-Equity Incentive Plan Compensation is set forth in “Compensation Discussion and Analysis — Elements of 2023 Named Executive Officer Compensation,” and “Compensation Discussion and Analysis — 2023 Performance Metrics, Goals, Results, and Bonus Payouts.”

(4)      See the following table captioned “All Other Compensation.”

(1)      Reflects 2023 Short-term Incentive Award. More information on fiscal 2023 Non-Equity Incentive Plan Awards is set forth in “Compensation Discussion and Analysis — 2023 Performance Metrics, Goals, Results, and Bonus Payouts.”

(2)      Reflects grant of Performance-Based Restricted Stock Units. For the performance restriction to be met, the Company must achieve 5.0% or greater Pre-Tax Margin in three of seven quarters from Q2 2023 through Q4 2024. 100% of the granted units will be forfeited if the performance restriction is not met. The time restriction is considered met on the third anniversary of the grant date. The grant date fair value is the closing price of the stock ($40.89 on March 8, 2023) on the grant date. More information on fiscal 2023 Equity Incentive Plan Awards is set forth in “Compensation Discussion and Analysis — Long-Term Incentive Plan for 2023.”

(3)      Reflects grant of Time-Based Restricted Stock Units that vest ratably over three years, commencing on the first anniversary of the grant date. The grant date fair value is the closing price of the stock ($40.89 on March 8, 2023) on the grant date. More information on fiscal 2023 Equity Incentive Plan Awards is set forth in “Compensation Discussion and Analysis — Long-Term Incentive Plan for 2023.”

Nonqualified Deferred Compensation Plans

The Company previously established the Deferred Compensation Plan as described on page 34. None of our NEOs deferred 2023 compensation under the plan or have an existing balance.

(2)      As of the date of termination, any accrued but unpaid base salary, accrued but unused vacation time, earned but unpaid short-term incentive and long-term incentive payments for the prior fiscal year, vested employee benefits (401(k) Plan) and expenses entitled for reimbursement are collectively known as “Accrued Amounts”. This payment applies to all types of terminations except termination for “Cause”.

(3)      Under the 2018 Incentive Plan and 2020 Incentive Plan, all grants require a “double trigger” to accelerate or modify vesting conditions after a change in control, requiring both a change in control event and a qualifying termination of employment before any vesting will be accelerated.

(4)      In the event of death or disability, vested Stock Options must be exercised on the earlier of one year following the termination of employment or the expiration date. In the event of retirement, vested Stock Options must be exercised on the earlier of five years following the termination of employment or the expiration date. For the other termination categories, vested Stock Options must be exercised on the earlier of 60 days following the termination of employment or the Expiration Date.

All NEOs are required to sign a document obligating confidentiality, as well as a 12-month non-competition and non-solicitation covenant. If the NEOs violate any provisions, they forfeit all unvested awards and incentive plan benefits.

In addition to the payments and provisions above, if Mr. Eppinger and the Company agree to mutually separate upon the conclusion of the employment term on December 31, 2025, he will be entitled to his unvested time-based long-term incentives delivered as per the vesting schedule, and unvested performance-based long-term incentives delivered as per the vesting schedule, upon attainment of performance criteria.

The tables below show details of payout amounts under each termination category if they would have occurred on December 31, 2023. Long-term incentive values reflect the closing price of our Common Stock of $58.75 on December 31, 2023 multiplied by the target number of unvested shares/units for each NEO. Stock Options values reflect the aggregate value of the difference between the closing price of our Common Stock of $58.75 on December 31, 2023 and the per share exercise prices multiplied by the number of vested Options for each NEO. Long-term incentive forfeiture provisions and pro-rata calculations have been incorporated as applicable.

(1)      As of December 31, 2023, per his employment agreement Mr. Eppinger was not eligible for retirement benefits and would therefore not receive any payments under that termination category.

(1)      As of December 31, 2023, Ms. Smith was not retirement eligible due to her age and therefore would not receive any payments under that termination category.

(1)      As of December 31, 2023, Ms. Giddens was not retirement eligible due to her age and therefore would not receive any payments under that termination category.