There will be executive compensation changes at Argo Group International Holdings, Ltd. from its 2020 fiscal year, following unanimous approval by the company’s board of directors. Governance enhancements are also being proposed.
The approved changes include the specialty insurer’s long-term incentive plan (LTIP), whose design has been revised in line with Argo’s strategy execution. Performance awards under the LTIP will now be measured over a three-year performance period, instead of just over a year previously, and will be earned based on return on equity and book value per share metrics.
In addition, stock ownership guidelines have been increased. Argo said these underscore its commitment to driving long-term performance on behalf of all shareholders. The chief executive’s ownership guideline will now be equal to six times base salary instead of five.
Other named executive officer ownership guidelines, meanwhile, have been adjusted from two-and-a-half to three times base salary. As for directors, they will be required to own stock equal to five times (formerly three) the annual cash retainer they receive for service on the board.
In terms of improving governance, the board will be presenting two proposals at next year’s annual general meeting to amend the bye-laws of the international underwriter. One is to commence the process of phased declassification of the Argo board, and the other is to reduce the maximum size of the board from 13 to 11.