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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arch Capital Group Ltd | NASDAQ:ACGL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.76 | -0.80% | 94.41 | 91.24 | 100.00 | 95.585 | 92.78 | 94.82 | 1,696,540 | 05:00:00 |
Check the appropriate box: | ||||||||||||||
o | Preliminary Proxy Statement | |||||||||||||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||||||||||
ý | Definitive Proxy Statement | |||||||||||||
o | Definitive Additional Materials | |||||||||||||
o | Soliciting Material under §240.14a-12 | |||||||||||||
ARCH CAPITAL GROUP LTD. | ||||||||||||||
(Name of Registrant as Specified In Its Charter) | ||||||||||||||
Not Applicable | ||||||||||||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||||||||||||
Payment of Filing Fee (Check all boxes that apply): | ||||||||||||||
ý | No fee required. | |||||||||||||
o | Fee paid previously with preliminary materials. | |||||||||||||
o | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
Arch Capital Group Ltd. | ||||||||
Waterloo House, Ground Floor | ||||||||
100 Pitts Bay Road | ||||||||
Pembroke HM 08, Bermuda | ||||||||
T: (441) 278-9250 | ||||||||
archgroup.com |
March 25, 2022 |
Conyers Corporate Services (Bermuda) Limited Secretary | ||
Hamilton, Bermuda March 25, 2022 | ||
Go to the website listed on your proxy card or Notice to vote VIA THE INTERNET. | |||||
Call the telephone number specified on your proxy card or on your Voting Instruction Form to vote BY TELEPHONE. | |||||
If you received paper copies of your proxy materials, mark, sign, date and return your proxy card in the postage-paid envelope provided to vote BY MAIL. | |||||
Scan the QR Code on your proxy card, Notice or Voting Instruction Form to vote with your MOBILE DEVICE. | |||||
Attend the virtual meeting to vote (see “Annual Meeting Attendance” in “Annex A—General Information”). | |||||
Important Notice Regarding Annual Meeting To log in to the Annual Meeting as a shareholder, a control number will be required. For registered shareholders, the control number can be found on your proxy card, voting instruction form or notice to shareholders. |
Any questions for the Annual Meeting must be submitted in advance at shareholderinfo@archgroup.com by 11:59 p.m. Eastern Daylight Time on May 1, 2022. | ||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: | ||
This Proxy Statement and 2021 Annual Report are available at proxyvote.com. On or about March 25, 2022, we expect to mail to our shareholders a Notice of Internet Availability containing instructions on how to access our proxy materials, including our Proxy Statement and 2021 Annual Report. The Notice of Internet Availability also will instruct you on how to access and submit your proxy through the internet, by phone or with your mobile device. |
3 | | 2022 PROXY STATEMENT |
SAFE HARBOR STATEMENT | |||||
PROXY SUMMARY | |||||
Roadmap of Voting Matters | |||||
Director Nominees | |||||
Shareholder Engagement | |||||
Key Executive Compensation Policies and Practices | |||||
Sustainability Practices | |||||
General Information | |||||
Learn More About Our Company | |||||
GOVERNANCE | |||||
Item 1—Election of Directors | |||||
Board | |||||
Committees of the Board | |||||
Nominees | |||||
Appointed Directors, Continuing Directors and Senior Management | |||||
Director Compensation | |||||
Certain Relationships and Related Transactions | |||||
SHARE OWNERSHIP | |||||
Security Ownership of Certain Beneficial Owners and Management | |||||
Common Shares | |||||
Preferred Shares | |||||
Delinquent Section 16(a) Reports | |||||
COMPENSATION | |||||
Item 2—Advisory Vote to Approve Named Executive Officer Compensation | |||||
Compensation Discussion and Analysis | |||||
Strong Link Between Pay and Performance | |||||
2021 Performance at a Glance | |||||
Long-Term Performance | |||||
Executive Compensation Philosophy | |||||
How We Make Compensation Decisions | |||||
Shareholder Engagement and Results of Say-on-Pay Votes | |||||
Elements of Compensation Program | |||||
COMPENSATION (continued) | |||||
2021 Compensation Decisions for Named Executive Officers | |||||
2022 Long-Term Incentive Awards | |||||
Additional Compensation Policies and Practices | |||||
Tax Considerations | |||||
Report of the Compensation Committee on the Compensation Discussion and Analysis | |||||
Compensation Committee Interlocks and Insider Participation | |||||
Executive Compensation Tables | |||||
Employment Arrangements | |||||
2022 LONG-TERM INCENTIVE AND SHARE AWARD PLAN | |||||
Item 3—Approval of the 2022 Plan | |||||
Introduction | |||||
Reasons for the Proposal | |||||
Key Data | |||||
Promotion of Sound Corporate Governance Practices | |||||
Description of 2022 Plan | |||||
AUDIT MATTERS | |||||
Report of the Audit Committee of the Board | |||||
Principal Auditor Fees and Services | |||||
Item 4—Appointment of Independent Registered Public Accounting Firm | |||||
SUBSIDIARY DIRECTORS | |||||
Item 5—Election of Subsidiary Directors | |||||
Nominees | |||||
ANNEX A—GENERAL INFORMATION | A-1 | ||||
ANNEX B—ARCH CAPITAL GROUP LTD. 2022 LONG-TERM INCENTIVE AND SHARE AWARD PLAN | B-1 | ||||
ANNEX C—NON-GAAP FINANCIAL MEASURES | C-1 |
2022 PROXY STATEMENT | | 4 |
5 | | 2022 PROXY STATEMENT |
ROADMAP OF VOTING MATTERS |
Our Board’s Recommendation | |||||
ITEM 1 - Election of Directors (page 12) | |||||
The Arch Capital Board of Directors (the “Board”) and the Nominating and Governance Committee of the Board believe that the four Director nominees possess the necessary qualifications and experience to provide quality advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of shareholders. | FOR Each Director Nominee | ||||
ITEM 2 - Advisory Vote to Approve Named Executive Officer Compensation (page 36) | |||||
The Company seeks a non-binding advisory vote to approve the compensation of its named executive officers as described in the Compensation Discussion and Analysis beginning on page 36 and the Executive Compensation Tables beginning on page 60. The Board values shareholders’ opinions, and the Compensation Committee of the Board will take into account the outcome of the advisory vote when considering future executive compensation decisions. | FOR | ||||
ITEM 3 - Approval of the Arch Capital Group Ltd. 2022 Long-Term Incentive and Share Award Plan (page 73) | |||||
On February 25, 2022, with the recommendation of the Compensation Committee, the Board adopted the 2022 Long-Term Incentive and Share Award Plan (the “2022 Plan”), subject to shareholder approval. The Board and the Compensation Committee believe that the 2022 Plan provides for competitive compensation opportunities, encourages long-term service, recognizes individual contributions and rewards achievement of performance goals, and promotes the creation of long-term value for shareholders by aligning the interests of such persons with those of shareholders. | FOR | ||||
ITEM 4 - Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm (page 82) | |||||
The Audit Committee of the Board and the Board believe that the retention of PricewaterhouseCoopers LLP to serve as the Independent Auditors for the fiscal year ending December 31, 2022, is in the best interests of the Company and its shareholders. As required by Bermuda law, shareholders are being asked to appoint the Audit Committee’s selection of the Independent Auditors. | FOR One Year | ||||
ITEM 5 - Election of Designated Company Directors of Certain Non-U.S. Subsidiaries (page 83) | |||||
The Board and management believe that the named Designated Company Director nominees possess the necessary qualifications and experience to provide oversight for the Company’s non-U.S. subsidiaries. | FOR Each Director Nominee |
2022 PROXY STATEMENT | | 6 |
DIRECTOR NOMINEES | See page 18 |
Committee Membership (1) | |||||||||||||||||||||||||||||
Name | Age | Director Since | Primary Occupation | A | C | E | FIR | NG | UW | ||||||||||||||||||||
John L. Bunce, Jr. | 63 | November 2001 | Managing Director and Founder of Greyhawk Capital Management, LLC | n | n | n | n | ||||||||||||||||||||||
Marc Grandisson | 54 | March 2018 | Chief Executive Officer, Arch Capital | n | |||||||||||||||||||||||||
Moira Kilcoyne | 60 | January 2020 | Owner of MAK Management Consulting | n | n | n | |||||||||||||||||||||||
Eugene S. Sunshine | 72 | July 2014 | Former Senior Vice President for Business and Finance at Northwestern University | n | n | n |
SHAREHOLDER ENGAGEMENT | See page 45 |
7 | | 2022 PROXY STATEMENT |
KEY EXECUTIVE COMPENSATION POLICIES AND PRACTICES | See page 45 |
What We Do |
What We Don’t Do |
2022 PROXY STATEMENT | | 8 |
As a global (re)insurer, we provide services and insurance coverages that allow our clients to rebuild after major losses and improve their resilience; we integrate ESG considerations into our underwriting to reduce risk and take advantage of opportunities for the benefit of our stakeholders. | By actively managing ESG risks and embedding compliance, transparency, data protection and resiliency across all areas of our operations, we protect our people and customers who entrust us with their personal information and business. | We believe incorporating material, nonfinancial ESG factors into investment selection and risk management has the potential to enhance long-term investment returns. | We are committed to investing in the success of our employees as individuals and professionals to create long-term sustainable growth as an organization. | Striving to make a difference by investing in our communities is one of Arch’s core values, woven into the fabric of our culture. |
9 | | 2022 PROXY STATEMENT |
1. Our Business | 2. Our Operations | 3. Our Investing | 4. Our People | 5. Our Communities | |||||||||||||||||||||||||
n | Strategic approach to enterprise risk management, including integration of climate risk. | n | Ensuring data privacy and protection. | n | Adopting and implementing a Responsible Investment Policy. | n | Implementing our D&I strategy and continued focus on creating an inclusive culture. | n | Corporate giving of $6.3 million to organizations that support our giving focus areas. | ||||||||||||||||||||
n | Underwriting initiatives to improve resiliency and transition to a lower carbon economy. | n | Conducting business ethically. | n | Continuing to focus on impact investments. | n | Activating a new career leveling framework. | n | Forming an Arch Group Foundation. | ||||||||||||||||||||
n | Underwriting socially sustainable insurance products. | n | Measuring and commitment to reduce our operational greenhouse gas emissions. | n | Integrating ESG risks in investment decisions. | n | Protecting our employees’ health and well-being. | n | Organizing a first worldwide volunteer event to celebrate Arch’s 20th anniversary. |
2022 PROXY STATEMENT | | 10 |
n | Our website—archgroup.com | n | Proxy website—proxyvote.com, which includes this Proxy Statement and our 2021 Annual Report. |
11 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 12 |
Independence | Tenure | Age | ||||||||||||
13 | | 2022 PROXY STATEMENT |
Audit Committee | Oversees management of financial reporting and compliance risks. | ||||
Compensation Committee | Oversees the management of risks relating to the Company’s compensation plans and arrangements, retention of personnel and succession planning. | ||||
Executive Committee | Oversees and directs the business and affairs of the Company in intervals between meetings of the Board. | ||||
Finance, Investment and Risk Committee | Oversees risks relating to the financial, investment, operational (including information technology and data security) and other risk affairs of the Company. | ||||
Nominating and Governance Committee | Oversees risks associated with the composition of the Board, corporate governance and ESG matters. | ||||
Underwriting Oversight Committee | Oversees risks relating to our underwriting activities, including with respect to accumulations and aggregations of exposures in our insurance, reinsurance and mortgage businesses. |
2022 PROXY STATEMENT | | 14 |
15 | | 2022 PROXY STATEMENT |
Director | Audit | Compensation | Executive | Finance, Investment and Risk | Nominating and Governance | Underwriting Oversight | ||||||||||||||||||||||||||||||||
John L. Bunce, Jr. | n | n | n | Chair | ||||||||||||||||||||||||||||||||||
Eric W. Doppstadt | n | Chair | n | |||||||||||||||||||||||||||||||||||
Francis Ebong | n | n | ||||||||||||||||||||||||||||||||||||
Laurie S. Goodman | n | n | n | |||||||||||||||||||||||||||||||||||
Marc Grandisson | n | |||||||||||||||||||||||||||||||||||||
Moira Kilcoyne | n | n | n | |||||||||||||||||||||||||||||||||||
Eileen Mallesch | n | n | ||||||||||||||||||||||||||||||||||||
Louis J. Paglia | n | n | Chair | |||||||||||||||||||||||||||||||||||
John M. Pasquesi | Chair | n | n | n | ||||||||||||||||||||||||||||||||||
Brian S. Posner | Chair | n | n | |||||||||||||||||||||||||||||||||||
Eugene S. Sunshine | n | Chair | n | |||||||||||||||||||||||||||||||||||
John D. Vollaro | n | n | ||||||||||||||||||||||||||||||||||||
Thomas R. Watjen | n | n | n |
2022 PROXY STATEMENT | | 16 |
17 | | 2022 PROXY STATEMENT |
John L Bunce, Jr. | ||||||||
n | 63 years old | Mr. Bunce is a Managing Director and Founder of Greyhawk Capital Management, LLC and Managing Director and Founder of Steel Box, LLC. Both Greyhawk and Steel Box are investment organizations. Mr. Bunce has served as a director of numerous public and private companies and he continues to serve on several private company boards and as an Overseer of the Hoover Institution. He holds an A.B. from Stanford University and an M.B.A. from Harvard Business School. Mr. Bunce’s qualifications for service on our Board include his corporate finance background, investment skills, extensive experience in evaluating and overseeing companies in a wide range of industries and service on boards of directors of other companies. | ||||||
n | Director since November 2001 | |||||||
n | Class III Director of Arch Capital | |||||||
n | Compensation Committee | |||||||
n | Executive Committee | |||||||
n | Finance, Investment and Risk Committee | |||||||
n | Nominating and Governance Committee |
Marc Grandisson | ||||||||
n | 54 years old | Mr. Grandisson is the Chief Executive Officer of Arch Capital as well as a member of our Board, both positions he has served in since March 2018. From March 2018 to December 2020, he was also President of Arch Capital, and from January 2016 to March 2018, he was President and Chief Operating Officer of Arch Capital. Prior to that role, he was Chairman and Chief Executive Officer of Arch Worldwide Reinsurance Group from 2005 to 2015 and the Chairman and Chief Executive Officer of Arch Worldwide Mortgage Group from February 2014 to December 2015. He joined Arch Reinsurance Ltd. (“Arch Re Bermuda”) in October 2001 as Chief Actuary. He subsequently held various leadership roles, including Chief Underwriting Officer and Actuary, President and Chief Operating Officer, eventually being named President and Chief Executive Officer at Arch Re Bermuda. Prior to joining Arch, he held various positions with the Berkshire Hathaway Group, F&G Re, Inc. and Tillinghast/Towers Perrin. He holds a B.Sc. in Actuarial Science from Université Laval in Canada and an M.B.A. from The Wharton School of the University of Pennsylvania. He is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries. Mr. Grandisson’s qualifications for service on our Board include his financial background, extensive executive management and operating experience in the insurance industry and his in-depth knowledge of our operations. | ||||||
n | With Arch since October 2001 | |||||||
n | Chief Executive Officer of Arch Capital | |||||||
n | Director since March 2018 | |||||||
n | Class III Director of Arch Capital | |||||||
n | Executive Committee | |||||||
Moira Kilcoyne | ||||||||
n | 60 years old | Ms. Kilcoyne is a technology industry veteran with extensive financial services experience. From 2013 to 2016, she served as Co-Chief Information Officer of Morgan Stanley where she co-headed the company’s global technology and data business and she also sat on the firm’s Management Committee. Prior to becoming Co-Chief Information Officer, Ms. Kilcoyne held a number of senior technology roles within Morgan Stanley. She currently serves on the boards of directors of Quilter plc and Citrix Systems, Inc. and she is also the Vice Chair of the Manhattan College board of trustees. Ms. Kilcoyne has a B.S. in Mathematics from Manhattan College. Ms. Kilcoyne’s qualifications for service on our Board include her more than 30 years of experience in the technology industry, her extensive financial services experience and service on boards of directors of other companies. | ||||||
n | Director since January 2020 | |||||||
n | Class III Director of Arch Capital | |||||||
n | Finance, Investment and Risk Committee | |||||||
n | Nominating and Governance Committee | |||||||
n | Underwriting Oversight Committee | |||||||
2022 PROXY STATEMENT | | 18 |
Eugene S. Sunshine | ||||||||
n | 72 years old | Mr. Sunshine retired at the end of August 2014 as the Senior Vice President for Business and Finance at Northwestern University, the university’s chief financial and administrative officer. Before joining Northwestern in 1997, he was Senior Vice President for Administration at The Johns Hopkins University. Prior to Johns Hopkins, Mr. Sunshine held positions as New York State Deputy Commissioner for Tax Policy and New York State Treasurer as well as Director of Energy Conservation for the New York State Energy Office. He currently is a member of the board of directors of Chicago Board Options Exchange, and was a member of the board of directors of Kaufman Hall and Associates, from 2014 through 2022. He holds a B.A. from Northwestern University and a Master of Public Administration degree from Syracuse University’s School of Citizenship and Public Affairs. Mr. Sunshine’s qualifications for service on our Board include his strong financial background and extensive executive management and operating experience. | ||||||
n | Director since July 2014 | |||||||
n | Class III Director of Arch Capital | |||||||
n | Audit Committee | |||||||
n | Compensation Committee | |||||||
n | Nominating and Governance Committee | |||||||
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL. |
19 | | 2022 PROXY STATEMENT |
Eric W. Doppstadt | ||||||||
n | 62 years old | Mr. Doppstadt serves as Vice President and Chief Investment Officer of the Ford Foundation. Mr. Doppstadt has been with the Ford Foundation since 1989, most recently as director of private equity investments for the foundation’s endowment. He joined the Ford Foundation as resident counsel, later assuming senior positions managing the Ford’s alternative investment portfolio. He has also served on the investment advisory boards of numerous private equity and venture capital funds. Mr. Doppstadt holds the Chartered Financial Analyst designation from the CFA Institute and is a director of Harvard Management Company and Makena Capital Management, LLC. He holds an A.B. from The University of Chicago and a J.D. from New York University School of Law. Mr. Doppstadt’s qualifications for service on our Board include his extensive investment experience and investment management skills. | ||||||
n | Director since November 2010 | |||||||
n | Class II Director of Arch Capital | |||||||
n | Term expires 2024 | |||||||
n | Compensation Committee | |||||||
n | Finance, Investment and Risk Committee | |||||||
n | Nominating and Governance Committee | |||||||
Francis Ebong | ||||||||
n | 41 years old | Mr. Ebong is currently Managing Director, Program Management at X, Alphabet’s in-house research and development division, where he is tasked with launching technologies to improve the lives of billions of people. He has an extensive background in technology and innovation, including serving as the Director of Global Operations and Partnerships at Facebook from 2015 to 2017, where he led a global team responsible for launches including FB Live, Marketplace and Messenger. Prior to Facebook, Mr. Ebong was the Head of Operations at Postmates and has experience working at Apple and Deloitte. Mr. Ebong is a veteran of the U.S. Navy and has a degree from the U.S. Naval Academy and an M.B.A. from the George Washington School of Business. Mr. Ebong’s qualifications for service on our Board include his extensive experience in the technology industry and his operating management skills. | ||||||
n | Director since August 2021 | |||||||
n | Class I Director of Arch Capital | |||||||
n | Term expires 2023 | |||||||
n | Finance, Investment and Risk Committee | |||||||
n | Underwriting Oversight Committee | |||||||
2022 PROXY STATEMENT | | 20 |
Laurie S. Goodman | ||||||||
n | 66 years old | Ms. Goodman is an Institute Fellow at the Urban Institute and Founder of its Housing Finance Policy Center. Before joining the Urban Institute in 2013, Ms. Goodman spent 30 years at several Wall Street firms. From 2008 to 2013, she was Senior Managing Director at Amherst Securities Group, LP. From 1993 to 2008, Ms. Goodman was head of global fixed income research and Manager of U.S. securitized products research at UBS and predecessor firms. Before that, she was a senior fixed income analyst, a mortgage portfolio manager and a senior economist at the Federal Reserve Bank of New York. Ms. Goodman serves on the board of directors of Home Point Capital Inc., and real estate investment trust MFA Financial and is an adviser to The Amherst Group, LLC. She is currently serving as a member of the Consumer Financial Protection Bureau’s Consumer Advocacy Board and she previously served as a member of the Federal Reserve Bank of New York’s Financial Advisory Roundtable as well as the Bipartisan Policy Center’s Housing Commission and Fannie Mae’s Affordable Housing Advisory Council. Ms. Goodman has a B.A. in Mathematics from the University of Pennsylvania and an A.M. and Ph.D. in Economics from Stanford University. Ms. Goodman's qualifications for service on our Board include her extensive analytics and strategy experience, her housing finance expertise and her service on boards of directors of other companies. | ||||||
n | Director since May 2018 | |||||||
n | Class II Director of Arch Capital | |||||||
n | Term expires 2024 | |||||||
n | Audit Committee | |||||||
n | Nominating and Governance Committee | |||||||
n | Underwriting Oversight Committee | |||||||
Eileen Mallesch | ||||||||
n | 66 years old | Ms. Mallesch has more than 30 years of finance and risk experience, including serving as Senior Vice President and Chief Financial Officer for Nationwide’s Property and Casualty segment from 2005 to 2009. Prior to that, she was Chief Financial Officer, Senior Vice President at Genworth (2003 to 2005) and General Electric’s (2000 to 2003) Group Insurance and Life Insurance businesses. Ms. Mallesch has broad finance and business strategy expertise in the insurance, telecommunications and consumer products industries. Her significant board experience includes current positions on the boards of Brighthouse Financial and Fifth Third Bancorp. She previously served on the boards of Bob Evans from 2008 to 2018, Libbey Inc. from 2016 to 2020 and State Auto Financial from 2010 to 2021. Ms. Mallesch has a B.S. in Accounting from the City University of New York and is a CPA. Ms. Mallesch’s qualifications for service on our Board include her extensive financial background and executive management and operating experience in the insurance industry. | ||||||
n | Director since August 2021 | |||||||
n | Class I Director of Arch Capital | |||||||
n | Term expires 2023 | |||||||
n | Audit Committee | |||||||
n | Underwriting Oversight Committee | |||||||
21 | | 2022 PROXY STATEMENT |
Louis J. Paglia | ||||||||
n | 64 years old | Mr. Paglia is the founding member of Oakstone Capital LLC, a private investment firm. He previously founded Customer Choice LLC in April 2010, a data analytics company serving the electric utility industry. He previously served as Executive Vice President of UIL Holdings Corporation, an electric utility, contracting and energy infrastructure company. Mr. Paglia also served as UIL Holdings’ Chief Financial Officer and as President of its investment subsidiaries. Prior to joining UIL Holdings, Mr. Paglia was Executive Vice President and Chief Financial Officer of eCredit.com, a credit evaluation software company. Prior to that, Mr. Paglia served as the Chief Financial Officer for TIG Holdings Inc., a property and casualty insurance and reinsurance holding company, and Emisphere Technologies, Inc. Mr. Paglia currently serves on the board of directors of Sarissa Capital Acquisition Corp. He holds a B.S. in Engineering from Massachusetts Institute of Technology and an M.B.A. from The Wharton School of the University of Pennsylvania. Mr. Paglia’s qualifications for service on our Board include his strong financial background and extensive executive management and operating experience in financial services companies. | ||||||
n | Director since July 2014 | |||||||
n | Class I Director of Arch Capital | |||||||
n | Term expires 2023 | |||||||
n | Compensation Committee | |||||||
n | Nominating and Governance Committee | |||||||
n | Underwriting Oversight Committee |
John M. Pasquesi | ||||||||
n | 62 years old | Mr. Pasquesi has been Chair of Board of Arch Capital since September 2019 and a director since October 2001. From November 3, 2017 to September 14, 2019, he served as Lead Director. Mr. Pasquesi is the Managing Member of Otter Capital LLC, a private equity investment firm he founded in January 2001. He holds an A.B. from Dartmouth College and an M.B.A. from Stanford Graduate School of Business. Mr. Pasquesi’s qualifications for service on our Board include his investment skills, extensive experience in evaluating and overseeing companies in a wide range of industries, including the insurance industry, and service on boards of directors of other companies. | ||||||
n | Director since October 2001 | |||||||
n | Chair of Board | |||||||
n | Class II Director of Arch Capital | |||||||
n | Term expires 2024 | |||||||
n | Executive Committee | |||||||
n | Finance, investment and Risk Committee | |||||||
n | Nominating and Governance Committee | |||||||
n | Underwriting Oversight Committee |
Brian S. Posner | ||||||||
n | 60 years old | Mr. Posner has been a private investor since March 2008 and is the President of Point Rider Group LLC, a consulting and advisory services firm focused on financial, bio-pharmaceutical and other services-related companies. From 2005 to March 2008, Mr. Posner served as the President, Chief Executive Officer and Co-Chief Investment Officer of ClearBridge Advisors, LLC, an asset management company and a wholly owned subsidiary of Legg Mason (since acquired by Franklin Resources). In 2000, Mr. Posner co-founded Hygrove Partners LLC, a private investment fund, and served as the Managing Member for five years. He served as a portfolio manager and an analyst at Fidelity Investments from 1987 to 1996 and, from 1997 to 1999, at Warburg Pincus Asset Management/Credit Suisse Asset Management where he also served as Co-Chief Investment Officer and director of research. Mr. Posner currently serves on the board of directors of Biogen Inc. and he is a trustee and Chair of the AQR Funds. He holds a B.A. from Northwestern University and an M.B.A. from the University of Chicago Booth School of Business. Mr. Posner’s qualifications for service on our Board include his strong financial background, executive management and operating experience in financial services companies, investment skills and extensive experience as a leading institutional investment manager and advisor. | ||||||
n | Director since November 2010 | |||||||
n | Class I Director of Arch Capital | |||||||
n | Term expires 2023 | |||||||
n | Audit Committee | |||||||
n | Nominating and Governance Committee | |||||||
n | Underwriting Oversight Committee | |||||||
2022 PROXY STATEMENT | | 22 |
John D. Vollaro | ||||||||
n | 77 years old | Mr. Vollaro has been a Senior Advisor of Arch Capital since April 2009 and has served as a director of Arch Capital since November 2009. He was Executive Vice President and Chief Financial Officer of Arch Capital from January 2002 to March 2009 and Treasurer of Arch Capital from May 2002 to March 2009. Prior to joining us, Mr. Vollaro acted as an independent consultant in the insurance industry since March 2000. Prior to March 2000, Mr. Vollaro was President and Chief Operating Officer of W.R. Berkley Corporation from January 1996 and a director from September 1995 until March 2000. Mr. Vollaro was Chief Executive Officer of Signet Star Holdings, Inc., a joint venture between W.R. Berkley Corporation and General Re Corporation, from July 1993 to December 1995. Mr. Vollaro served as Executive Vice President of W.R. Berkley Corporation from 1991 until 1993, Chief Financial Officer and Treasurer of W.R. Berkley Corporation from 1983 to 1993 and Senior Vice President of W.R. Berkley Corporation from 1983 to 1991. Mr. Vollaro’s qualifications for service on our Board include his strong financial background, extensive executive management and operating experience in the insurance industry and his in-depth knowledge of our operations. | ||||||
n | Director since November 2009 | |||||||
n | Class I Director of Arch Capital | |||||||
n | Term expires 2023 | |||||||
n | Finance, Investment and Risk Committee | |||||||
n | Underwriting Oversight Committee | |||||||
Thomas R. Watjen | ||||||||
n | 67 years old | Mr. Watjen has extensive experience in the insurance sector having spent over 20 years at Unum Group and its predecessor, The Provident Companies. From 2003 to 2015, he was President and Chief Executive Officer of Unum Group. Prior to this, Mr. Watjen served as Vice Chairman and Chief Operating Officer of Unum Group from 2002 to 2003 and Executive Vice President, Finance and Risk Management for the company from 1999 to 2002. In 1994, he joined The Provident Companies as Executive Vice President and Chief Financial Officer and was later named Vice Chairman and Chief Operating Officer, a position he held from 1997 to 1999. Prior to Unum Group, Mr. Watjen worked at Morgan Stanley & Co. as Managing Director, Investment Banking from 1987 to 1994. From 1984 to 1987 he worked at Conning & Company in the consulting and venture capital areas, and from 1981 to 1984 he worked with Aetna Life & Casualty in both the investment and finance areas. He currently serves on the board of directors of Prudential plc, and was a member of the board of directors of LocatorX from 2019 through 2022 as well as SunTrust Bank from 2010 through 2019. Mr. Watjen also serves on the board of visitors of Virginia Military Institute. He holds a B.A. in Economics from the Virginia Military Institute and an M.B.A. from the University of Virginia, Darden School of Business Administration. Mr. Watjen’s qualifications for service on our Board include his extensive senior management and operating experience in the insurance industry and his service on boards of directors of other companies. | ||||||
n | Director since January 2020 | |||||||
n | Class II Director of Arch Capital | |||||||
n | Term expires 2024 | |||||||
n | Audit Committee | |||||||
n | Compensation Committee | |||||||
n | Finance, Investment and Risk Committee |
23 | | 2022 PROXY STATEMENT |
Maamoun Rajeh | ||||||||
n | 51 years old | Mr. Rajeh has served as Chairman and Chief Executive Officer of Arch Worldwide Reinsurance Group since October 2017. From July 2014 to September 2017, he was Chairman and Chief Executive Officer of Arch Re Bermuda. He joined Arch Re Bermuda in 2001 as an underwriter, ultimately becoming Chief Underwriting Officer in November 2005. Most recently, he was President and Chief Executive Officer of Arch Reinsurance Europe Underwriting Designated Activity Company (“Arch Re Europe”) from October 2012 to July 2014. From 1999 to 2001, Mr. Rajeh served as Assistant Vice President at HartRe, a subsidiary of The Hartford Financial Services Group, Inc. Mr. Rajeh also served in several business analysis positions at the United States Fidelity and Guarantee Company between 1992 and 1996 and as an underwriter at F&G Re from 1996 to 1999. He has a B.S. from The Wharton School of Business of the University of Pennsylvania and he is a Chartered Property Casualty Underwriter. | ||||||
n | With Arch since December 2001 | |||||||
n | Chairman and Chief Executive Officer, Arch Worldwide Reinsurance Group |
2022 PROXY STATEMENT | | 24 |
David E. Gansberg | ||||||||
n | 49 years old | Mr. Gansberg was named Chief Executive Officer of Arch Capital’s Global Mortgage Group, which provides mortgage insurance and reinsurance on a worldwide basis, on March 1, 2019. From February 2013 through February 2019, he was the President and Chief Executive Officer of Arch Mortgage Insurance Company. From July 2007 to February 2013, Mr. Gansberg was Executive Vice President and a director at Arch Reinsurance Company (“Arch Re (U.S.)”). Prior to that, he held various underwriting, operational and strategic roles at Arch Re Bermuda and Arch Capital Services LLC, which he joined in December 2001. Prior to joining Arch, Mr. Gansberg held various positions with ACE Bermuda and Cigna Property and Casualty. He holds a B.S. in Actuarial Mathematics from the University of Michigan. | ||||||
n | With Arch since December 2001 | |||||||
n | Chief Executive Officer, Global Mortgage Group |
Jennifer Centrone | ||||||||
n | 49 years old | Ms. Centrone is the Executive Vice President, Chief Human Resources Officer of Arch Capital Services LLC, where she is responsible for leading the organization’s talent and culture strategies. Prior to joining Arch, Ms. Centrone was Senior Vice President, Human Resources at Voya Financial from August 2015 to May 2019, where she was responsible for leading key talent, organizational and transformational strategies. Before Voya Financial, Ms. Centrone held senior human resources roles at both The Hartford Financial Services Group, Inc. and Accenture. She holds a B.A. in English Writing and Literature from Fairfield University. | ||||||
n | With Arch since June 2019 | |||||||
n | Executive Vice President, Chief Human Resources Officer of Arch Capital Services LLC |
Chris Hovey | ||||||||
n | 55 years old | Mr. Hovey is Chief Operations Officer of Arch Capital Services LLC. From July 2018 to January 2020, Mr. Hovey served as Executive Vice President and Chief Information Officer at Arch Capital Services LLC. Prior to that, he held the role of Chief Operating Officer of Arch Mortgage Insurance Company. Before joining Arch, Mr. Hovey acted as Chief Operating Officer for PMI Mortgage Insurance Co. (“PMI”) since 2011. He also served as Senior Vice President of servicing operations and loss management for PMI, which he originally joined in 2002. Mr. Hovey holds a B.A. from San Francisco State University and an M.B.A. from Saint Mary’s College in Moraga, California. | ||||||
n | With Arch since January 2014 | |||||||
n | Chief Operations Officer of Arch Capital Services LLC |
Louis T. Petrillo | ||||||||
n | 56 years old | Mr. Petrillo has been President and General Counsel of Arch Capital Services LLC since April 2002. From May 2000 to April 2002, he was Senior Vice President, General Counsel and Secretary of Arch Capital. From 1996 until May 2000, Mr. Petrillo was Vice President and Associate General Counsel of Arch Capital’s reinsurance subsidiary. Prior to that time, Mr. Petrillo practiced law at the New York firm of Willkie Farr & Gallagher LLP. He holds a B.A. from Tufts University and a law degree from Columbia University. | ||||||
n | With Arch since January 1996 | |||||||
n | President and General Counsel of Arch Capital Services LLC |
25 | | 2022 PROXY STATEMENT |
Jay Rajendra | ||||||||
n | 41 years old | Mr. Rajendra is the Chief Strategy and Innovation Officer at Arch Capital. He is responsible for pursuing new business models and technologies while leading Arch’s analytics capabilities to improve profitability and growth. Mr. Rajendra joined Arch in 2016 in the role of Chief Analytics Officer for Arch Capital, a position he held until January 2020. Prior to joining Arch, Mr. Rajendra was Head of Business Solutions for XL Catlin’s Strategic Analytics team. Before XL, Mr. Rajendra was a Senior Consultant at Towers Watson in both North America and Europe, where he advised large international (re)insurers and start-ups on pricing, strategy and M&A. He is a Fellow of the Institute of Actuaries, Fellow of the Casualty Actuarial Society and Member of the American Academy of Actuaries. He holds a combined Bachelors and Masters in Mathematics from Oxford University and an M.B.A. from Massachusetts Institute of Technology. | ||||||
n | With Arch since August 2016 | |||||||
n | Chief Strategy and Innovation Officer of Arch Capital |
Christine Todd | ||||||||
n | 55 years old | Ms. Todd is Senior Vice President, Chief Investment Officer of Arch Capital and President of Arch Investment Management Ltd. (“AIM”). She joined Arch in June 2021 and has responsibility for setting the firm’s investment strategy and managing the day-to-day operations of the investment portfolio. Prior to joining Arch, Ms. Todd was Head of Fixed Income, U.S., for Amundi US from February 2019 to May 2021. She has also held executive roles at Neighborly Investments, Standish Mellon Asset Management Company LLC and Gannett, Welsh & Kotler. She is a Chartered Financial Analyst and holds a B.A. from Georgetown University and an M.B.A. from Boston University. | ||||||
n | With Arch since June 2021 | |||||||
n | Senior Vice President, Chief Investment Officer of Arch Capital |
2022 PROXY STATEMENT | | 26 |
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||||||||||||||||||||
John L. Bunce, Jr. | NC | 148,517 | 124,997 | 24,835 | 298,349 | |||||||||||||||||||||||||||
Eric W. Doppstadt | FC | 150,017 | 124,997 | — | 275,014 | |||||||||||||||||||||||||||
Francis Ebong (4) | 91,096 | 91,062 | 16,250 | 198,408 | ||||||||||||||||||||||||||||
Laurie S. Goodman | 148,517 | 124,997 | 42,177 | 315,691 | ||||||||||||||||||||||||||||
Moira Kilcoyne | 123,517 | 124,997 | — | 248,514 | ||||||||||||||||||||||||||||
Eileen Mallesch (4) | 108,767 | 91,062 | — | 199,829 | ||||||||||||||||||||||||||||
Louis J. Paglia | UC | 173,517 | 124,997 | 25,000 | 323,514 | |||||||||||||||||||||||||||
John M. Pasquesi* | EC | 258,517 | 124,997 | 25,000 | 408,514 | |||||||||||||||||||||||||||
Brian S. Posner | AC | 173,517 | 124,997 | 30,000 | 328,514 | |||||||||||||||||||||||||||
Eugene S. Sunshine | CC | 173,517 | 124,997 | 6,000 | 304,514 | |||||||||||||||||||||||||||
John D. Vollaro | 500,000 | (5) | — | 59,059 | (6) | 559,059 | ||||||||||||||||||||||||||
Thomas R. Watjen | 148,517 | 124,997 | — | 273,514 |
27 | | 2022 PROXY STATEMENT |
Committee Chair/Member | Annual Fee | |||||||
Audit Committee Chair | $ | 50,000 | ||||||
Audit Committee Member | $ | 25,000 | ||||||
Chair of Board | $ | 125,000 | ||||||
Compensation Committee Chair | $ | 25,000 | ||||||
Executive Committee Chair | $ | 10,000 | ||||||
Finance, Investment and Risk Committee Chair | $ | 25,000 | ||||||
Nominating and Governance Committee Chair | $ | 25,000 | ||||||
Underwriting Oversight Committee Chair | $ | 50,000 |
2022 PROXY STATEMENT | | 28 |
29 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 30 |
31 | | 2022 PROXY STATEMENT |
Common Shares | ||||||||
Name and Address of Beneficial Owner | (A) Number of Common Shares Beneficially Owned (1) | (B) Rule 13d-3 Percentage Ownership (1) | ||||||
Artisan Partners Holdings LP (2) 875 East Wisconsin Avenue, Suite 800 Milwaukee, Wisconsin 53202 | 36,684,714 | 9.7 | % | |||||
The Vanguard Group (3) 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 33,407,250 | 8.8 | % | |||||
Baron Capital Group, Inc. (4) 767 Fifth Avenue New York, New York 10153 | 21,532,452 | 5.7 | % | |||||
Capital World Investors (5) 333 South Hope Street Los Angeles, California 90071 | 20,738,867 | 5.5 | % | |||||
Marc Grandisson (6) | 4,183,632 | 1.1 | % | |||||
John L. Bunce, Jr. (7) | 2,095,336 | * | ||||||
Eric W. Doppstadt (8) | 70,781 | * | ||||||
Francis Ebong (9) | 2,178 | * | ||||||
Laurie S. Goodman (10) | 28,127 | * | ||||||
Moira Kilcoyne (11) | 18,111 | * | ||||||
Eileen Mallesch (12) | 4,356 | * | ||||||
Louis J. Paglia (13) | 49,700 | * | ||||||
John M. Pasquesi (14) | 5,342,888 | 1.4 | % | |||||
Brian S. Posner (15) | 110,087 | * | ||||||
Eugene S. Sunshine (16) | 27,005 | * | ||||||
John D. Vollaro (17) | 462,882 | * | ||||||
Thomas R. Watjen (18) | 19,315 | * | ||||||
David E. Gansberg (19) | 461,108 | * | ||||||
François Morin (20) | 591,015 | * | ||||||
Nicolas Papadopoulo (21) | 1,307,513 | * | ||||||
Maamoun Rajeh (22) | 855,843 | * | ||||||
All directors and executive officers (19 persons) (23) | 16,057,604 | 4.2 | % |
2022 PROXY STATEMENT | | 32 |
33 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 34 |
Preferred Shares | ||||||||
Name of Beneficial Owner | Number of Series F Preferred Shares Beneficially Owned | Percentage of Class Owned | ||||||
Brian S. Posner | 3,000 | * | ||||||
All directors and executive officers (19 persons) | 3,000 | * |
35 | | 2022 PROXY STATEMENT |
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL. |
Name | Title | ||||
Marc Grandisson | Chief Executive Officer and Class III Director, Arch Capital | ||||
François Morin | Executive Vice President, Chief Financial Officer and Treasurer, Arch Capital | ||||
Nicolas Papadopoulo | President and Chief Underwriting Officer, Arch Capital and CEO, Arch Worldwide Insurance Group | ||||
Maamoun Rajeh | Chairman and Chief Executive Officer, Arch Worldwide Reinsurance Group | ||||
David E. Gansberg | Chief Executive Officer, Global Mortgage Group |
2022 PROXY STATEMENT | | 36 |
CEO Target Mix of Pay | Other Named Executive Officers Target Mix of Pay | |||||||
As illustrated above for our CEO, 75% of target compensation was performance-based and 60% consists of long-term incentives. | As illustrated above for our other named executive officers, 68% of target compensation was performance-based and 48% consists of long-term incentives. |
37 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 38 |
39 | | 2022 PROXY STATEMENT |
Growth in Book Value and Tangible Book Value per Common Share |
2022 PROXY STATEMENT | | 40 |
Net Income ROE and Operating Income ROE |
41 | | 2022 PROXY STATEMENT |
Total Shareholder Return |
2022 PROXY STATEMENT | | 42 |
43 | | 2022 PROXY STATEMENT |
Peer Group Selection Process | |||||
Step 1: Industry Filters | Select industries relative to Arch Capital’s business operations. | ||||
Step 2: Size Filters | Filter companies based on revenue and asset size. | ||||
Step 3: Additional Subjective Filters | Review business descriptions and additional financial measures. |
2022 PROXY STATEMENT | | 44 |
Purpose of the Peer Group | |||||
Pay Comparisons | Determine competitive pay levels and identify differences from general industry market data. | ||||
Assess ability to attract, retain, engage and motivate top talent. | |||||
Compensation Structure | Provide benchmarks for compensation structure (pay mix, performance metrics, leverage, vehicles, etc.). | ||||
Use as a foundation or reference when making design changes to the compensation program. | |||||
Performance Comparisons | Assess performance relative to companies facing similar business challenges. | ||||
Use as an input to setting incentive plan goals. | |||||
Financial Performance | Company performance is measured in absolute terms, as well as versus prior year results, and in relative terms in comparison with the performance of peer companies in our Peer Group on the same financial metrics. |
2021 Peer Group | ||
Alleghany Corporation | ||
American Financial Group, Inc. | ||
Argo Group International Holdings, Ltd. | ||
Assurant, Inc. | ||
AXIS Capital Holdings Limited | ||
CNA Financial Corporation | ||
Cincinnati Financial Corporation | ||
Essent Group Ltd. | ||
Everest Re Group, Ltd. | ||
First American Financial Corporation | ||
The Hanover Insurance Group, Inc. | ||
The Hartford Financial Services Group | ||
Markel Corporation | ||
Old Republic International Corporation | ||
Radian Group Inc. | ||
RenaissanceRe Holdings Ltd. | ||
Selective Insurance Group, Inc. | ||
W. R. Berkley Corporation |
45 | | 2022 PROXY STATEMENT |
2021 Named Executive Officer Target Short-Term Incentive Opportunity | |||||||||||
Name | Base Salary | Target (%) | Target Bonus | ||||||||
Marc Grandisson | $1,000,000 | 165% | $1,650,000 | ||||||||
François Morin | $675,000 | 135% | $911,250 | ||||||||
Nicolas Papadopoulo | $800,000 | 150% | $1,200,000 | ||||||||
Maamoun Rajeh | $725,000 | 135% | $978,750 | ||||||||
David E. Gansberg | $725,000 | 135% | $978,750 |
Level of Performance | ROE Scale | Payout Factor | ||||||
Threshold | 7.50% | 59.3% | ||||||
Target | 10.06% | 100.0% | ||||||
Maximum | 15.09% | 200.0% |
2022 PROXY STATEMENT | | 46 |
Performance Criteria | Measurement | Weights for Corporate Executives | Weights for Unit Executives | Range of Payout Percentages | ||||||||||
Financial Metrics— Group Level | The incentive compensation payout multiple at the group level is based on each of the underwriting units’ incentive compensation formula plan multiples and is determined as follows: 1 - Convert the payout levels for each unit to an ROE-equivalent, which is inferred1 using the current underwriting year’s ROE scale. 2 - Derive a group-wide ROE supporting the incentive compensation formula plans using the unit-specific inferred ROEs, weighted by the capital allocated (or deployed) to each underwriting unit. 3 - Compare the group-wide ROE to the target level ROE for the current year in order to assess the relative performance of the group. 4 - Compute the group-level payout multiple using the applicable scale. | 70% | 20% for Reinsurance and Mortgage Executives 30% for President role | 0–200% | ||||||||||
Financial Metrics— Segment Level | The incentive compensation payout level for each unit executive measured under this category is equal to his respective unit’s incentive compensation formula plan multiple (total bonus payout dollars for the unit for the current year expressed as a percentage of the aggregate target bonus pool for the unit for the current year), as described in “Overview” above. | 0% | 50% for Reinsurance and Mortgage Executives 40% for President role | 0–200% | ||||||||||
Strategic Metrics2 | Based on each executive’s year-end performance evaluation measuring the achievement of strategic objectives. | 30% | 30% | 0–250% | ||||||||||
Total | 100% | 100% | 0–200% |
47 | | 2022 PROXY STATEMENT |
Range of Payouts as % of Target - Financial Goals - Group Level | Threshold | Target | Maximum | ||||||||
Payout as a % of Target1 | 20% | 100% | 200% | ||||||||
Level of Goal Achievement Required | 85% | 100% | 115% |
Range of Payouts as % of Target - Financial Goals - Segment Level | Threshold | Target | Maximum | ||||||||
Payout as a % of Target1 | 20% | 100% | 200% | ||||||||
Level of Goal Achievement Required | 50% | 100% | 150% |
Strategic Performance Rating | Payout1 | ||||
Exceptional Achievements | 250% | ||||
Exceeds Expectations | 150% | ||||
Meets Expectations | 100% | ||||
Needs Development | 50% | ||||
Unsatisfactory | 0% |
2022 PROXY STATEMENT | | 48 |
Performance Shares 55% of Economic Value | Stock Options 25% of Economic Value | Restricted Shares 20% of Economic Value | ||||||||||||||||||||||||||||||
Performance Period: 3 years. Underlying Value: Denoted in shares of Arch Capital. Metrics: Absolute Tangible Book Value per share growth over the 3-year performance period, with a TSR modifier of +/- 25% , relative to the TSR of our Peer Group set forth within “How We Make Compensation Decisions—Selected Competitors.” Opportunities: Pre-established threshold, target and maximum opportunities (e.g., 50%, 100%, 200%). Below threshold performance results in 0% shares earned. Payout: Earned shares vest in March following the end of the performance period, with the number of vested shares dependent upon the level of goal achievement. | + | Vesting: 3-year ratable commencing on the first anniversary of the grant date. Exercise Price: Equal to the closing share price on the grant date. Life: 10-year maximum term. | + | Vesting: 3-year ratable commencing on the first anniversary of the grant date. Underlying Value: Denoted in shares of Arch Capital. Payout: In shares. Dividends: Accrue and are paid out upon vesting. |
49 | | 2022 PROXY STATEMENT |
Level of Performance | Growth in TBVPS | Shares Earned as a % of Target | ||||||
Threshold | 6% | 50% | ||||||
Target | 11% | 100% | ||||||
Maximum | 16% | 200% |
Name | 2021 Target (% of Base Salary) | ||||
Marc Grandisson | 450% | ||||
François Morin | 200% | ||||
Nicolas Papadopoulo | 300% | ||||
Maamoun Rajeh | 200% | ||||
David E. Gansberg | 200% |
Annual Change in TBVPS | Payout Percentage | TSR Percentile | Shares Modifier | |||||||||||
<6% | 0% | ≤20% | 75% | |||||||||||
6% | 50% | 35% | 100% | |||||||||||
11% | 100% | 65% | 100% | |||||||||||
≥16% | 200% | ≥80% | 125% |
2022 PROXY STATEMENT | | 50 |
Chief Executive Officer | ||||||||||||||||||||||||||
Marc Grandisson Chief Executive Officer | ||||||||||||||||||||||||||
Strategic Goals | ||||||||||||||||||||||||||
Mr. Grandisson’s strategic goals were based on Company performance, including in relation to the Peer Group, progress on key strategic initiatives and succession planning, as discussed below. Under Mr. Grandisson’s leadership, the Company celebrated 20 years and delivered excellent financial results, as highlighted in the “2021 Performance at a Glance” section, notwithstanding active catastrophes and continued uncertainty related to COVID-19. The Compensation Committee evaluated the Company’s growth in after-tax operating income achieved under his leadership, the Company’s continued strong performance in relation to its Peer Group and the Company’s overall focus on underwriting discipline and its conservative approach to investments and capital management. The Committee also reviewed Mr. Grandisson’s oversight of key strategic initiatives in the areas of analytics, M&A, diversity and inclusion, and succession planning as well as continued progress on global IT transformation and Arch Management System, both of which are multi-year initiatives to upgrade and refresh core processes and systems that will generate productivity, efficiency and consumer centric solutions. | ||||||||||||||||||||||||||
Compensation Decisions | ||||||||||||||||||||||||||
■ Base Salary | No change was made to Mr. Grandisson’s base salary in 2021. Effective January 1, 2022, Mr. Grandisson’s base salary was increased to $1,225,000 from $1,000,000 following our annual benchmarking review. | |||||||||||||||||||||||||
■ Short-Term Cash Incentive | The Compensation Committee reviewed Mr. Grandisson’s performance against his strategic goals, which resulted in a payout factor of 195% on the portion of his bonus that was based on strategic performance. | |||||||||||||||||||||||||
2021 STI Metric | Payout Factor | x Weighting | = Adjusted Weighting | x Target Bonus | = Bonus Payout | |||||||||||||||||||||
Financial Performance—Group | 200% | 70% | 140.00% | $1,650,000 | $2,310,000 | |||||||||||||||||||||
Strategic Performance | 195% | 30% | 58.5% | 965,250 | ||||||||||||||||||||||
TOTAL | 100% | 198.5% | $3,275,250 | |||||||||||||||||||||||
No change was made to Mr. Grandisson’s Short-Term Cash Incentive target in 2021. Effective January 1, 2022, Mr. Grandisson’s Short-Term Cash Incentive target was increased to 200% from 165%, following our annual benchmarking review. | ||||||||||||||||||||||||||
■ Long-Term Incentive | On February 26, 2021, the Compensation Committee approved the annual award summarized in the table below. The performance shares are reflected at target, since performance will be measured over the forward-looking three-year period, which will ultimately determine the number of shares earned. | |||||||||||||||||||||||||
Performance Shares | Stock Options | Time-Based Restricted Shares | ||||||||||||||||||||||||
Grant Date | Number of Shares | Value1 | Number of Options | Value1 | Number of Shares | Value1 | Total | |||||||||||||||||||
Feb 26, 2021 | 69,095 | $2,474,983 | 122,254 | $1,125,018 | 25,126 | $900,013 | $4,500,014 | |||||||||||||||||||
■ 2019-2021 Perfor-mance Share Cycle Vesting | The starting TBVPS for the 2019 grants was $19.96. At the end of 2021, the TBVPS grew to $31.07, a 15.89% annualized increase over the performance period, resulting in a payout percentage of 177.8%, based on TBVPS growth. Based on Arch Capital’s TSR over the three-year performance period of 56.6%, which placed it in the 66.7th percentile of our Peer Group, the resulting TSR multiplier was 102.8%, and the overall payout factor was set at 182.8%. | |||||||||||||||||||||||||
2019 Grant | Approved Payout Factor | Total Vested | Additional Shares Awarded | Value of Additional Shares at 12/31/2021 | ||||||||||||||||||||||
75,758 | 182.8% | 138,486 | 62,728 | $2,788,260 | ||||||||||||||||||||||
1 The total long-term incentive value provided in the summary above for performance share awards differs from the grant date fair value reported in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables. The values in the summary above were based on the closing price of our shares on the grant date and the target number of shares. The values in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables were computed at the grant date in accordance with ASC Topic 718. Stock options are valued on the grant date based on the Black-Scholes option pricing methodology and restricted shares are valued based on the closing price of our common shares on the grant date. |
51 | | 2022 PROXY STATEMENT |
Chief Financial Officer | ||||||||||||||||||||||||||
François Morin Executive Vice President, Chief Financial Officer and Treasurer | ||||||||||||||||||||||||||
Strategic Goals | ||||||||||||||||||||||||||
Mr. Morin’s strategic goals were based on our financial strength ratings, strategic initiatives, updating of financials systems, treasury operations and processes and succession planning, as discussed below. Mr. Morin worked effectively at managing investor, rating agency and auditor relations to keep our financial strength ratings strong. Under Mr. Morin’s leadership, the Company raised $500 million in Series G Preference Shares (at 4.55% coupon, fixed for life), in order to refinance its Series E Preferred Shares. The Compensation Committee evaluated Mr. Morin’s role in strategic initiatives, including the successful restructuring of our ownership rights in Somers resulting in the de-consolidation of Somers from the Company’s financial statements, the deployment of $450 million in Insurance Corporate-Owned Life Insurance and formation of an Irish Collective Asset-Management Vehicle to house certain investments. Mr. Morin also continued focus on the multi-year transformation of group-wide financial systems and reporting, treasury operations, risk management and investment processes and identified the next level of leaders for the function. | ||||||||||||||||||||||||||
Compensation Decisions | ||||||||||||||||||||||||||
■ Base Salary | Mr. Morin’s salary was increased from $625,000 to $675,000 in January 2021 following our annual benchmarking review, and no adjustments were made for 2022. | |||||||||||||||||||||||||
■ Short-Term Cash Incentive | The Compensation Committee reviewed Mr. Morin’s performance against his strategic goals, which resulted in a payout factor of 200% on the portion of his bonus that was based on strategic performance. | |||||||||||||||||||||||||
2021 STI Metric | Payout Factor | x Weighting | = Adjusted Weighting | x Target Bonus | = Bonus Payout | |||||||||||||||||||||
Financial Performance—Group | 200% | 70% | 140.00% | $911,250 | $1,275,700 | |||||||||||||||||||||
Strategic Performance | 200% | 30% | 60% | 546,800 | ||||||||||||||||||||||
TOTAL | 100% | 200% | $1,822,500 | |||||||||||||||||||||||
■ Long-Term Incentive | On February 26, 2021, the Compensation Committee approved the annual award summarized in the table below. The performance shares are reflected at target, since performance will be measured over the forward-looking three-year period, which will ultimately determine the number of shares earned. | |||||||||||||||||||||||||
Performance Shares | Stock Options | Time-Based Restricted Shares | ||||||||||||||||||||||||
Grant Date | Number of Shares | Value1 | Number of Options | Value1 | Number of Shares | Value1 | Total | |||||||||||||||||||
Feb 26, 2021 | 20,729 | $742,513 | 36,676 | $337,504 | 7,538 | $270,011 | $1,350,028 | |||||||||||||||||||
■ 2019-2021 Perfor-mance Share Cycle Vesting | The starting TBVPS for the 2019 grants was $19.96. At the end of 2021, the TBVPS grew to $31.07, a 15.89% annualized increase over the performance period, resulting in a payout percentage of 177.8%, based on TBVPS growth. Based on Arch Capital’s TSR over the three-year performance period of 56.6%, which placed it in the 66.7th percentile of our Peer Group, the resulting TSR multiplier was 102.8%, and the overall payout factor was set at 182.8%. | |||||||||||||||||||||||||
2019 Grant | Approved Payout Factor | Total Vested | Additional Shares Awarded | Value of Additional Shares at 12/31/2021 | ||||||||||||||||||||||
21,044 | 182.8% | 38,468 | 17,424 | $774,497 | ||||||||||||||||||||||
1 The total long-term incentive value provided in the summary above for performance share awards differs from the grant date fair value reported in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables. The values in the summary above were based on the closing price of our shares on the grant date and the target number of shares. The values in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables were computed at the grant date in accordance with ASC Topic 718. Stock options are valued on the grant date based on the Black-Scholes option pricing methodology and restricted shares are valued based on the closing price of our common shares on the grant date. |
2022 PROXY STATEMENT | | 52 |
Insurance Unit Executive | ||||||||||||||||||||||||||
Nicolas Papadopoulo President and Chief Underwriting Officer, Arch Capital and CEO, Arch Worldwide Insurance Group | ||||||||||||||||||||||||||
Strategic Goals | ||||||||||||||||||||||||||
Mr. Papadopoulo’s strategic goals were based on growth strategies, strategic initiatives, leadership development, and diversity and inclusion initiatives, as described below. Mr. Papadopoulo continues to create alignment and common strategies around future growth for all Arch’s segments, namely, Insurance, Reinsurance and Mortgage. Under Mr. Papadopoulo’s leadership, Insurance group net written premiums grew over 30%, the most of any of our insurance peers and expanded Arch’s footprint in Middle Market and increased gross written premiums by 25% in Insurance North America. The Compensation Committee also evaluated Mr. Papadopoulo’s role in strategic initiatives, including the use of strategic analytics and digital partnership successes to drive innovation and increase profitability. Mr. Papadopoulo focused on continuing to support the development of leaders across Arch and those identified as high potential talent. Mr. Papadopoulo also concentrated on the Company’s diversity and inclusion initiatives, including serving as Executive Sponsor of the newly formed Women and Allies Employee Network. | ||||||||||||||||||||||||||
Compensation Decisions | ||||||||||||||||||||||||||
■ Base Salary | Mr. Papadopoulo’s salary was increased from $750,000 to $800,000 in January 2021 following our annual benchmarking review, and no adjustments were made for 2022. | |||||||||||||||||||||||||
■ Short-Term Cash Incentive | The Compensation Committee reviewed Mr. Papadopoulo’s performance against his strategic goals, which resulted in a payout factor of 225% on the portion of his bonus that was based on strategic performance. | |||||||||||||||||||||||||
2021 STI Metric | Payout Factor | x Weighting | = Adjusted Weighting | x Target Bonus | = Bonus Payout | |||||||||||||||||||||
Financial Performance—Group | 200% | 30% | 60% | $1,200,000 | $720,000 | |||||||||||||||||||||
Financial Performance—Segment1 | 128.5% | 40% | 51.4% | 616,800 | ||||||||||||||||||||||
Strategic Performance | 225% | 30% | 67.5% | 810,000 | ||||||||||||||||||||||
TOTAL | 100% | 178.9% | $2,146,800 | |||||||||||||||||||||||
1 Payout factor was derived from a 30%, 5%, 5% weighted contribution respectively from Insurance, Reinsurance and Mortgage segments. | ||||||||||||||||||||||||||
■ Long-Term Incentive | On February 26, 2021, the Compensation Committee approved the annual award summarized in the table below. The performance shares are reflected at target, since performance will be measured over the forward-looking three-year period, which will ultimately determine the number of shares earned. | |||||||||||||||||||||||||
Performance Shares | Stock Options | Time-Based Restricted Shares | ||||||||||||||||||||||||
Grant Date | Number of Shares | Value1 | Number of Options | Value1 | Number of Shares | Value1 | Total | |||||||||||||||||||
Feb 26, 2021 | 36,851 | $1,320,003 | 65,202 | $600,008 | 13,400 | $479,988 | $2,399,999 | |||||||||||||||||||
■ 2019-2021 Perfor-mance Share Cycle Vesting | The starting TBVPS for the 2019 grants was $19.96. At the end of 2021, the TBVPS grew to $31.07, a 15.89% annualized increase over the performance period, resulting in a payout percentage of 177.8%, based on TBVPS growth. Based on Arch Capital’s TSR over the three-year performance period of 56.6%, which placed it in the 66.7th percentile of our Peer Group, the resulting TSR multiplier was 102.8%, and the overall payout factor was set at 182.8%. | |||||||||||||||||||||||||
2019 Grant | Approved Payout Factor | Total Vested | Additional Shares Awarded | Value of Additional Shares at 12/31/2021 | ||||||||||||||||||||||
25,253 | 182.8% | 46,162 | 20,909 | $929,405 | ||||||||||||||||||||||
1 The total long-term incentive value provided in the summary above for performance share awards differs from the grant date fair value reported in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables. The values in the summary above were based on the closing price of our shares on the grant date and the target number of shares. The values in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables were computed at the grant date in accordance with ASC Topic 718. Stock options are valued on the grant date based on the Black-Scholes option pricing methodology and restricted shares are valued based on the closing price of our common shares on the grant date. |
53 | | 2022 PROXY STATEMENT |
Reinsurance Unit Executive | ||||||||||||||||||||||||||
Maamoun Rajeh Chairman and Chief Executive Officer, Arch Worldwide Reinsurance Group | ||||||||||||||||||||||||||
Strategic Goals | ||||||||||||||||||||||||||
Mr. Rajeh’s strategic goals were based on reinsurance growth and margin improvement, strategic initiatives, improvement of operational efficiencies, leadership development and diversity and inclusion initiatives, as described below. Under Mr. Rajeh’s direction of the reinsurance group, the group generated $1.3 billion in business growth and improved margins. The Compensation Committee also evaluated Mr. Rajeh’s role in strategic initiatives, including the acquisition of Precision Marketing Asia Pacific (PMAP), which will increase distribution in Japan and the completion of the Somers acquisition. Mr. Rajeh continued to increase operational efficiency, with the launch of Large Loss Reporting and in partnership with IT and Strategic Analytics, continues to find ways to increase capacity and efficiency. Mr. Rajeh continues to focus on the development of leaders in the group and initiated the Arch RE-thinking program for the next generation of leaders. Mr. Rajeh continues to focus the group on the Company’s diversity and inclusion goals, including training programs and the expansion of the successful Internship Program. | ||||||||||||||||||||||||||
Compensation Decisions | ||||||||||||||||||||||||||
■ Base Salary | Mr. Rajeh’s salary was increased from $650,000 to $725,000 in January 2021 following our annual benchmarking review, and no adjustments were made for 2022. | |||||||||||||||||||||||||
■ Short-Term Cash Incentive | The Compensation Committee reviewed Mr. Rajeh’s performance against his strategic goals, which resulted in a payout factor of 175% on the portion of his bonus that was based on strategic performance. | |||||||||||||||||||||||||
2021 STI Metric | Payout Factor | x Weighting | = Adjusted Weighting | x Target Bonus | = Bonus Payout | |||||||||||||||||||||
Financial Performance—Group | 200% | 20% | 40% | $978,750 | $391,500 | |||||||||||||||||||||
Financial Performance—Segment1 | 123.3% | 50% | 61.65% | 603,400 | ||||||||||||||||||||||
Strategic Performance | 175% | 30% | 52.5% | 513,800 | ||||||||||||||||||||||
TOTAL | 100% | 154.15% | $1,508,700 | |||||||||||||||||||||||
1 The payout factor was reduced for amounts calculated under the reinsurance segment’s formula under the short-term cash incentive plan attributable to performance for prior underwriting years in recognition of the fact that an additional bonus amount of $409,000 was also paid to Mr. Rajeh in March 2022 for those prior underwriting years due to his continued participation in the Reinsurance segment’s separate Formula Approach bonus plan for those prior years. In order to more clearly focus Mr. Rajeh’s incentives on the factors established under our current short-term cash incentive plan, all of Mr. Rajeh’s legacy entitlements under the Formula Approach were satisfied by a payment of $3,191,451 in March 2022, which was in addition to the $409,000 payment described above. | ||||||||||||||||||||||||||
■ Long-Term Incentive | On February 26, 2021, the Compensation Committee approved the annual award summarized in the table below. The performance shares are reflected at target, since performance will be measured over the forward-looking three-year period, which will ultimately determine the number of shares earned. | |||||||||||||||||||||||||
Performance Shares | Stock Options | Time-Based Restricted Shares | ||||||||||||||||||||||||
Grant Date | Number of Shares | Value1 | Number of Options | Value1 | Number of Shares | Value1 | Total | |||||||||||||||||||
Feb 26, 2021 | 22,264 | $797,496 | 39,393 | $362,506 | 8,096 | $289,999 | $1,450,001 | |||||||||||||||||||
■ 2019-2021 Perfor-mance Share Cycle Vesting | The starting TBVPS for the 2019 grants was $19.96. At the end of 2021, the TBVPS grew to $31.07, a 15.89% annualized increase over the performance period, resulting in a payout percentage of 177.8%, based on TBVPS growth. Based on Arch Capital’s TSR over the three-year performance period of 56.6%, which placed it in the 66.7th percentile of our Peer Group, the resulting TSR multiplier was 102.8%, and the overall payout factor was set at 182.8%. | |||||||||||||||||||||||||
2019 Grant | Approved Payout Factor | Total Vested | Additional Shares Awarded | Value of Additional Shares at 12/31/2021 | ||||||||||||||||||||||
21,886 | 182.8% | 40,008 | 18,122 | $805,523 | ||||||||||||||||||||||
1 The total long-term incentive value provided in the summary above for performance share awards differs from the grant date fair value reported in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables. The values in the summary above were based on the closing price of our shares on the grant date and the target number of shares. The values in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables were computed at the grant date in accordance with ASC Topic 718. Stock options are valued on the grant date based on the Black-Scholes option pricing methodology and restricted shares are valued based on the closing price of our common shares on the grant date. |
2022 PROXY STATEMENT | | 54 |
Mortgage Unit Executive | ||||||||||||||||||||||||||
David E. Gansberg Chief Executive Officer, Global Mortgage Group | ||||||||||||||||||||||||||
Strategic Goals | ||||||||||||||||||||||||||
Mr. Gansberg’s strategic goals were based on underwriting profits, strategic initiatives, leadership development, and diversity and inclusion initiatives, as described below. Under Mr. Gansberg’s leadership, the Mortgage group earned $953 million of underwriting profit at a 27% combined ratio, a 60% increase in profit and 32-point drop in combined ratio over 2020. The group’s year-end delinquency rate declined to 2.36% vs. 4.19% at year-end 2020, the lowest of all legacy competitors. The Compensation Committee also evaluated his oversight of strategic initiatives including the completion of the Westpac Lenders Mortgage Insurance Limited (WLMI) acquisition and execution of a reinsurance strategy to maximize capital efficiency. Mr. Gansberg continues to support the development and coaching of his leadership team, in addition to the development of the next generation of leaders. Under Mr. Gansberg’s direction, the Mortgage group was named a top 3 Best Places To Work for the third year in a row by Triad Business Journal. As part of the Company’s group-wide efforts, Mr. Gansberg’s commitment to diversity and inclusion activities remain strong, with the selection of the group’s first Arch MI Scholar at North Carolina A&T University - the nation’s largest historically Black college, located in Greensboro, NC. The group was also named an honoree in the Triad Business Journal’s inaugural Leaders in Diversity awards. | ||||||||||||||||||||||||||
Compensation Decisions | ||||||||||||||||||||||||||
■ Base Salary | Mr. Gansberg’s salary was increased from $650,000 to $725,000 in January 2021 following our annual benchmarking review, and no adjustments were made for 2022. | |||||||||||||||||||||||||
■ Short-Term Cash Incentive | The Compensation Committee reviewed Mr. Gansberg’s performance against his strategic goals, which resulted in a payout factor of 175% on the portion of his bonus that was based on strategic performance. | |||||||||||||||||||||||||
2021 STI Metric | Payout Factor | x Weighting | = Adjusted Weighting | x Target Bonus | = Bonus Payout | |||||||||||||||||||||
Financial Performance—Group | 200% | 20% | 40% | $978,750 | $391,500 | |||||||||||||||||||||
Financial Performance—Segment1 | 116.1% | 50% | 58.05% | 568,200 | ||||||||||||||||||||||
Strategic Performance | 175% | 30% | 52.5% | 513,800 | ||||||||||||||||||||||
TOTAL | 100% | 150.55% | $1,473,500 | |||||||||||||||||||||||
1 The payout factor was reduced for amounts calculated under the mortgage segment’s formula under the short-term cash incentive plan attributable to performance for prior underwriting years in recognition of the fact that an additional bonus amount of $398,000 was also paid to Mr. Gansberg in March 2022 for those prior underwriting years due to his continued participation in the Mortgage segment’s separate formulaic bonus plan for those prior years. | ||||||||||||||||||||||||||
■ Long-Term Incentive | On February 26, 2021, the Compensation Committee approved the annual award summarized in the table below. The performance shares are reflected at target, since performance will be measured over the forward-looking three-year period, which will ultimately determine the number of shares earned. | |||||||||||||||||||||||||
Performance Shares | Stock Options | Time-Based Restricted Shares | ||||||||||||||||||||||||
Grant Date | Number of Shares | Value1 | Number of Options | Value1 | Number of Shares | Value1 | Total | |||||||||||||||||||
Feb 26, 2021 | 22,264 | $797,496 | 39,393 | $362,506 | 8,096 | $289,999 | $1,450,001 | |||||||||||||||||||
■ 2019-2021 Perfor-mance Share Cycle Vesting | The starting TBVPS for the 2019 grants was $19.96. At the end of 2021, the TBVPS grew to $31.07, a 15.89% annualized increase over the performance period, resulting in a payout percentage of 177.8%, based on TBVPS growth. Based on Arch Capital’s TSR over the three-year performance period of 56.6%, which placed it in the 66.7th percentile of our Peer Group, the resulting TSR multiplier was 102.8%, and the overall payout factor was set at 182.8%. | |||||||||||||||||||||||||
2019 Grant | Approved Payout Factor | Total Vested | Additional Shares Awarded | Value of Additional Shares at 12/31/2021 | ||||||||||||||||||||||
14,989 | 182.8% | 27,400 | 12,411 | $551,669 | ||||||||||||||||||||||
1 The total long-term incentive value provided in the summary above for performance share awards differs from the grant date fair value reported in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables. The values in the summary above were based on the closing price of our shares on the grant date and the target number of shares. The values in the “2021 Summary Compensation” and “2021 Grants of Plan-Based Awards” Tables were computed at the grant date in accordance with ASC Topic 718. Stock options are valued on the grant date based on the Black-Scholes option pricing methodology and restricted shares are valued based on the closing price of our common shares on the grant date. |
55 | | 2022 PROXY STATEMENT |
Name | 2022 Target (% of Base Salary) | February 2022 Regular Grants1 | ||||||
Marc Grandisson2 | 450% | $5,512,500 | ||||||
François Morin | 200% | $1,350,000 | ||||||
Nicolas Papadopoulo | 300% | $2,400,000 | ||||||
Maamoun Rajeh | 200% | $1,450,000 | ||||||
David E. Gansberg | 200% | $1,450,000 |
2022 PROXY STATEMENT | | 56 |
57 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 58 |
COMPENSATION COMMITTEE Eugene S. Sunshine (Chair) John L. Bunce, Jr. Eric W. Doppstadt Louis J. Paglia Thomas R. Watjen (as of September 17, 2021) |
59 | | 2022 PROXY STATEMENT |
2021 Summary Compensation Table |
Name and Principal Position | Year | Salary ($)(1) | Annual Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | ||||||||||||||||||||||||||||||
Marc Grandisson | 2021 | 1,000,000 | — | 3,482,784 | 1,125,018 | 3,300,000 | 428,211 | 9,336,013 | ||||||||||||||||||||||||||||||
Chief Executive Officer and Class III Director, Arch Capital | 2020 | 1,000,000 | — | 3,477,082 | 1,125,006 | 2,737,000 | 440,744 | 8,779,832 | ||||||||||||||||||||||||||||||
2019 | 1,000,000 | — | 3,614,402 | 1,125,114 | 3,176,000 | 444,513 | 9,360,029 | |||||||||||||||||||||||||||||||
François Morin | 2021 | 675,000 | — | 1,044,861 | 337,504 | 1,822,500 | (7) | 298,034 | 4,177,899 | |||||||||||||||||||||||||||||
Executive Vice President, Chief Financial Officer and Treasurer, Arch Capital | 2020 | 625,000 | — | 965,844 | 312,501 | (6) | 1,425,000 | 285,260 | 3,613,605 | |||||||||||||||||||||||||||||
2019 | 625,000 | — | 1,003,998 | 312,532 | 1,561,000 | (7) | 282,755 | 3,785,285 | ||||||||||||||||||||||||||||||
Nicolas Papadopoulo | 2021 | 800,000 | — | 1,857,478 | 600,008 | 2,192,600 | 409,873 | 5,859,959 | ||||||||||||||||||||||||||||||
President and Chief Underwriting Officer, Arch Capital and CEO, Arch Worldwide Insurance Group | 2020 | 750,000 | — | 1,159,012 | 374,999 | 1,419,000 | 399,517 | 4,102,528 | ||||||||||||||||||||||||||||||
2019 | 750,000 | — | 1,204,824 | 375,035 | 1,544,000 | 382,650 | 4,256,509 | |||||||||||||||||||||||||||||||
Maamoun Rajeh | 2021 | 725,000 | 3,600,451 | (8) | 1,122,227 | 362,506 | 1,548,400 | 560,148 | 7,918,732 | |||||||||||||||||||||||||||||
Chairman and Chief Executive Officer, Arch Worldwide Reinsurance Group | 2020 | 650,000 | 589,856 | (8) | 1,004,477 | 325,002 | 1,165,144 | (9) | 588,785 | 4,323,264 | ||||||||||||||||||||||||||||
2019 | 650,000 | 916,827 | (8) | 1,044,163 | 325,031 | 1,247,182 | 531,746 | 4,714,949 | ||||||||||||||||||||||||||||||
David E. Gansberg | 2021 | 725,000 | 398,000 | (10) | 1,122,227 | 362,506 | 1,513,200 | 79,493 | 4,200,426 | |||||||||||||||||||||||||||||
Chief Executive Officer, Global Mortgage Group | 2020 | 650,000 | 213,200 | (10) | 1,004,477 | 325,002 | 1,223,800 | 72,016 | 3,488,495 | |||||||||||||||||||||||||||||
2019 | 631,792 | 368,402 | (10) | 859,035 | 200,812 | 1,255,176 | 67,644 | 3,382,861 | ||||||||||||||||||||||||||||||
2022 PROXY STATEMENT | | 60 |
Name | Housing Allowance (Bermuda)($) | Retirement Plans ($)(a) | Social Insurance ($)(b) | Other ($)(c) | ||||||||||
Marc Grandisson | 218,251 | 122,950 | 1,868 | — | ||||||||||
François Morin | 82,644 | 90,735 | 1,868 | 75,000 | ||||||||||
Nicolas Papadopoulo | 217,508 | 93,950 | 1,868 | — | ||||||||||
Maamoun Rajeh | 218,954 | 97,985 | 1,868 | 139,000 | ||||||||||
David E. Gansberg | — | 78,410 | — | — |
Marc Grandisson | François Morin | Nicolas Papadopoulo | Maamoun Rajeh | David E. Gansberg | |||||||||||||
Automobile Allowance | Y | Y | Y | ||||||||||||||
Cell Allowance | Y | ||||||||||||||||
Club Dues | Y | Y | Y | Y | |||||||||||||
Family Travel | Y | Y | Y | Y | |||||||||||||
Life Insurance and LTD | Y | Y | Y | Y | |||||||||||||
Fees for Children Schooling | Y | Y | Y | ||||||||||||||
Tax Preparation Services | Y | Y | Y | Y |
61 | | 2022 PROXY STATEMENT |
2021 | Grants of Plan-Based Awards |
Est. Future Payouts Under Non-Equity Incentive Plan Awards (2) | Est. Future Payouts Under Equity Incentive Plan Awards (3) | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($/Sh) (5) | Grant Date Fair Value of Stock and Option Awards ($)(6) | ||||||||||||||||||||||||||||||||||||
Name | Grant Date (1) | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||||||||||||||||
Marc Grandisson | 2/26/2021 | 34,548 | 69,095 | 138,190 | 37.38 | 2,582,771 | |||||||||||||||||||||||||||||||||||
2/26/2021 | 25,126 | 35.82 | 900,013 | ||||||||||||||||||||||||||||||||||||||
2/26/2021 | 122,254 | 35.82 | 1,125,018 | ||||||||||||||||||||||||||||||||||||||
NA | 330,000 | 1,650,000 | 3,300,000 | ||||||||||||||||||||||||||||||||||||||
François Morin (7) | 2/26/2021 | 10,365 | 20,729 | 41,458 | 37.38 | 774,850 | |||||||||||||||||||||||||||||||||||
2/26/2021 | 7,538 | 35.82 | 270,011 | ||||||||||||||||||||||||||||||||||||||
2/26/2021 | 36,676 | 35.82 | 337,504 | ||||||||||||||||||||||||||||||||||||||
NA | 182,250 | 911,250 | 1,822,500 | ||||||||||||||||||||||||||||||||||||||
Nicolas Papadopoulo | 2/26/2021 | 18,426 | 36,851 | 73,702 | 37.38 | 1,377,490 | |||||||||||||||||||||||||||||||||||
2/26/2021 | 13,400 | 35.82 | 479,988 | ||||||||||||||||||||||||||||||||||||||
2/26/2021 | 65,202 | 35.82 | 600,008 | ||||||||||||||||||||||||||||||||||||||
NA | 240,000 | 1,200,000 | 2,400,000 | ||||||||||||||||||||||||||||||||||||||
Maamoun Rajeh | 2/26/2021 | 11,132 | 22,264 | 44,528 | 37.38 | 832,228 | |||||||||||||||||||||||||||||||||||
2/26/2021 | 8,096 | 35.82 | 289,999 | ||||||||||||||||||||||||||||||||||||||
2/26/2021 | 39,393 | 35.82 | 362,506 | ||||||||||||||||||||||||||||||||||||||
NA | 195,750 | 978,750 | 1,957,500 | ||||||||||||||||||||||||||||||||||||||
David E. Gansberg | 2/26/2021 | 11,132 | 22,264 | 44,528 | 37.38 | 832,228 | |||||||||||||||||||||||||||||||||||
2/26/2021 | 8,096 | 35.82 | 289,999 | ||||||||||||||||||||||||||||||||||||||
2/26/2021 | 39,393 | 35.82 | 362,506 | ||||||||||||||||||||||||||||||||||||||
NA | 195,750 | 978,750 | 1,957,500 |
2022 PROXY STATEMENT | | 62 |
Outstanding Equity Awards at 2021 Fiscal Year-End |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | ||||||||||||||||||||||||
Marc Grandisson | 75,000 | — | 12.86 | 5/9/2022 | 48,439 | 2,153,114 | 203,198 | 9,032,151 | ||||||||||||||||||||||||
100,800 | — | 14.22 | 11/12/2022 | |||||||||||||||||||||||||||||
53,100 | — | 17.84 | 5/9/2023 | |||||||||||||||||||||||||||||
48,000 | — | 19.09 | 5/13/2024 | |||||||||||||||||||||||||||||
80,991 | — | 19.03 | 11/6/2024 | |||||||||||||||||||||||||||||
43,890 | — | 20.84 | 5/13/2025 | |||||||||||||||||||||||||||||
34,830 | — | 23.90 | 5/13/2026 | |||||||||||||||||||||||||||||
69,600 | — | 32.09 | 5/8/2027 | |||||||||||||||||||||||||||||
616,284 | — | 26.79 | 4/9/2028 | |||||||||||||||||||||||||||||
133,821 | — | 26.55 | 5/11/2028 | |||||||||||||||||||||||||||||
94,864 | 47,361 | 32.67 | 2/28/2029 | |||||||||||||||||||||||||||||
46,107 | 91,939 | 42.42 | 2/27/2030 | |||||||||||||||||||||||||||||
— | 122,254 | 35.82 | 2/26/2031 | |||||||||||||||||||||||||||||
François Morin | 3,300 | — | 12.86 | 5/9/2022 | 14,014 | 622,922 | 57,980 | 2,577,211 | ||||||||||||||||||||||||
16,500 | — | 14.22 | 11/12/2022 | |||||||||||||||||||||||||||||
5,655 | — | 17.84 | 5/9/2023 | |||||||||||||||||||||||||||||
5,025 | — | 18.09 | 7/25/2023 | |||||||||||||||||||||||||||||
6,000 | — | 19.09 | 5/13/2024 | |||||||||||||||||||||||||||||
4,599 | — | 19.43 | 12/4/2024 | |||||||||||||||||||||||||||||
11,460 | — | 20.84 | 5/13/2025 | |||||||||||||||||||||||||||||
12,630 | — | 23.90 | 5/13/2026 | |||||||||||||||||||||||||||||
11,010 | — | 32.09 | 5/8/2027 | |||||||||||||||||||||||||||||
31,224 | — | 26.55 | 5/11/2028 | |||||||||||||||||||||||||||||
27,534 | — | 29.13 | 7/24/2028 | |||||||||||||||||||||||||||||
26,351 | 13,156 | 32.67 | 2/28/2029 | |||||||||||||||||||||||||||||
12,807 | 25,539 | 42.42 | 2/27/2030 | |||||||||||||||||||||||||||||
38,309 | — | 42.42 | 2/27/2030 | |||||||||||||||||||||||||||||
— | 36,676 | 35.82 | 2/26/2031 |
63 | | 2022 PROXY STATEMENT |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | 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 ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | ||||||||||||||||||||||||
Nicolas Papadopoulo | 9,213 | — | 20.84 | 5/13/2025 | 21,171 | 941,051 | 81,552 | 3,624,986 | ||||||||||||||||||||||||
21,930 | — | 23.90 | 5/13/2026 | |||||||||||||||||||||||||||||
22,050 | — | 32.09 | 5/8/2027 | |||||||||||||||||||||||||||||
150,000 | — | 32.13 | 9/19/2027 | |||||||||||||||||||||||||||||
44,607 | — | 26.55 | 5/11/2028 | |||||||||||||||||||||||||||||
31,621 | 15,787 | 32.67 | 2/28/2029 | |||||||||||||||||||||||||||||
15,369 | 30,646 | 42.42 | 2/27/2030 | |||||||||||||||||||||||||||||
— | 65,202 | 35.82 | 2/26/2031 | |||||||||||||||||||||||||||||
Maamoun Rajeh | 19,800 | — | 17.84 | 5/9/2023 | 14,831 | 659,238 | 61,005 | 2,711,672 | ||||||||||||||||||||||||
19,500 | — | 19.09 | 5/13/2024 | |||||||||||||||||||||||||||||
32,286 | — | 19.33 | 7/1/2024 | |||||||||||||||||||||||||||||
20,040 | — | 20.84 | 5/13/2025 | |||||||||||||||||||||||||||||
15,900 | — | 23.90 | 5/13/2026 | |||||||||||||||||||||||||||||
15,930 | — | 32.09 | 5/8/2027 | |||||||||||||||||||||||||||||
31,500 | — | 32.13 | 9/19/2027 | |||||||||||||||||||||||||||||
38,661 | — | 26.55 | 5/11/2028 | |||||||||||||||||||||||||||||
27,405 | 13,682 | 32.67 | 2/28/2029 | |||||||||||||||||||||||||||||
13,319 | 26,561 | 42.42 | 2/27/2030 | |||||||||||||||||||||||||||||
— | 39,393 | 35.82 | 2/26/2031 | |||||||||||||||||||||||||||||
63,308 | — | 35.82 | 2/26/2031 | |||||||||||||||||||||||||||||
David E. Gansberg | 9,900 | — | 12.86 | 5/9/2022 | 14,749 | 655,593 | 54,108 | 2,405,101 | ||||||||||||||||||||||||
18,810 | — | 14.22 | 11/12/2022 | |||||||||||||||||||||||||||||
7,395 | — | 17.84 | 5/9/2023 | |||||||||||||||||||||||||||||
29,070 | — | 17.68 | 2/4/2024 | |||||||||||||||||||||||||||||
10,950 | — | 19.09 | 5/13/2024 | |||||||||||||||||||||||||||||
13,560 | — | 20.84 | 5/13/2025 | |||||||||||||||||||||||||||||
10,770 | — | 23.90 | 5/13/2026 | |||||||||||||||||||||||||||||
15,090 | — | 32.09 | 5/8/2027 | |||||||||||||||||||||||||||||
15,822 | — | 26.55 | 5/11/2028 | |||||||||||||||||||||||||||||
10,624 | 5,305 | 32.67 | 2/28/2029 | |||||||||||||||||||||||||||||
5,982 | 2,990 | 41.43 | 10/1/2029 | |||||||||||||||||||||||||||||
13,319 | 26,561 | 42.42 | 2/27/2030 | |||||||||||||||||||||||||||||
— | 39,393 | 35.82 | 2/26/2031 |
2022 PROXY STATEMENT | | 64 |
Option Awards | Stock Awards | ||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) | |||||||||||||
Marc Grandisson | 72,000 | 2,064,650 | 181,343 | 6,731,769 | |||||||||||||
François Morin | 6,200 | 185,287 | 77,060 | 2,861,866 | |||||||||||||
Nicolas Papadopoulo | — | — | 60,449 | 2,243,975 | |||||||||||||
Maamoun Rajeh | 105,603 | 2,887,864 | 52,391 | 1,944,847 | |||||||||||||
David E. Gansberg | 9,900 | 260,525 | 24,239 | 900,677 |
Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last FYE ($)(3) | ||||||||||||||||||
Marc Grandisson | — | — | — | — | — | ||||||||||||||||||
François Morin | — | — | — | — | — | ||||||||||||||||||
Nicolas Papadopoulo | — | — | — | — | — | ||||||||||||||||||
Maamoun Rajeh | — | — | — | — | — | ||||||||||||||||||
David E. Gansberg | 8,485 | 43,500 | 237,534 | — | 1,360,658 |
65 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 66 |
Name | Without Good Reason ($)(1)(2) | For Cause ($) | Death ($)(3) | Disability ($)(4) | Without Cause or For Good Reason (as applicable) ($)(3) | Without Cause or For Good Reason (as applicable) following a Change in Control ($)(3) | |||||||||||||||||
Marc Grandisson | |||||||||||||||||||||||
Cash Severance (5) | — | — | 4,300,000 | — | 6,125,000 | 6,125,000 | |||||||||||||||||
Accelerated Vesting of Share-Based Awards (6) | — | — | 12,984,865 | 12,984,865 | — | 12,984,865 | |||||||||||||||||
Health & Welfare (7) | — | — | 35,151 | 35,151 | 35,151 | 35,151 | |||||||||||||||||
Total | — | — | 17,320,016 | 13,020,016 | 6,160,151 | 19,145,016 | |||||||||||||||||
François Morin | |||||||||||||||||||||||
Cash Severance (8) | — | — | — | — | 2,041,875 | 2,041,875 | |||||||||||||||||
Accelerated Vesting of Share-Based Awards (6) | — | — | 3,723,469 | 3,723,469 | — | 3,723,469 | |||||||||||||||||
Health & Welfare (7) | — | — | 34,253 | 34,253 | 34,253 | 34,253 | |||||||||||||||||
Total | — | — | 3,757,722 | 3,757,722 | 2,076,128 | 5,799,597 | |||||||||||||||||
Nicolas Papadopoulo | |||||||||||||||||||||||
Cash Severance (8) | — | — | — | — | 2,600,000 | 2,600,000 | |||||||||||||||||
Accelerated Vesting of Share-Based Awards (6) | — | — | 5,376,913 | 5,376,913 | — | 5,376,913 | |||||||||||||||||
Health & Welfare (7) | — | — | 34,253 | 34,253 | 34,253 | 34,253 | |||||||||||||||||
Total | — | — | 5,411,166 | 5,411,166 | 2,634,253 | 8,011,166 | |||||||||||||||||
Maamoun Rajeh | |||||||||||||||||||||||
Cash Severance (8) | — | — | — | — | 2,193,125 | 2,193,125 | |||||||||||||||||
Accelerated Vesting of Share-Based Awards (6) | — | — | 3,925,965 | 3,925,965 | — | 3,925,965 | |||||||||||||||||
Health & Welfare (7) | — | — | 33,973 | 33,973 | 33,973 | 33,973 | |||||||||||||||||
Total | — | — | 3,959,938 | 3,959,938 | 2,227,098 | 6,153,063 | |||||||||||||||||
David E. Gansberg | |||||||||||||||||||||||
Cash Severance (9) | — | — | — | — | 3,007,500 | 2,682,500 | |||||||||||||||||
Accelerated Vesting of Share-Based Awards (6) | — | — | 3,526,097 | 3,526,097 | — | 3,526,097 | |||||||||||||||||
Health & Welfare (7) | — | — | 31,785 | 31,785 | 31,785 | 31,785 | |||||||||||||||||
Total | — | — | 3,557,882 | 3,557,882 | 3,039,285 | 6,240,382 |
67 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 68 |
69 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 70 |
71 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 72 |
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL. |
73 | | 2022 PROXY STATEMENT |
Total shares underlying outstanding stock options | 16,792,580 | |||||||
Weighted average exercise price of outstanding stock options | $ | 26.67 | ||||||
Weighted average remaining contractual life of outstanding stock options | 4.63 | |||||||
Total shares underlying outstanding unvested restricted and performance stock and restricted and performance unit awards | 4,681,568 | |||||||
Total shares currently available for grant under the 2015 Plan | 606,942 | |||||||
Total shares currently available for grant under the 2018 Plan (full value shares are counted as 3.6 common shares for every one share subject to such award) | 4,342,596 | |||||||
Remaining full value shares available for grant under existing plans | 1,513,519 | |||||||
Total common shares issued and outstanding as of March 10, 2022 | 377,471,271 |
Year | Total Shares Subject to Options | Total Shares Subject to Full Value Awards | Weighted Average Common Shares Outstanding | Annual Burn Rate | ||||||||||
2021 | 1,243,984 | 1,946,877 | 391,748,715 | 0.81 | % | |||||||||
2020 | 1,121,833 | 1,535,330 | 403,062,179 | 0.66 | % | |||||||||
2019 | 1,228,280 | 1,195,741 | 401,802,815 | 0.60 | % | |||||||||
Average Three-Year Burn Rate | 0.69 | % |
2022 PROXY STATEMENT | | 74 |
75 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 76 |
77 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 78 |
Column A | Column B | Column C | ||||||||||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Stock Options (1), Warrants and Rights | Weighted-Average Exercise Price of Outstanding Stock Options (1), Warrants and Rights ($) | 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 | 17,812,796 | 25.06 | 12,445,518 | |||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||
Total | 17,812,796 | 25.06 | 12,445,518 | (2) |
79 | | 2022 PROXY STATEMENT |
AUDIT COMMITTEE Brian S. Posner (Chair) Laurie S. Goodman Eileen Mallesch Eugene S. Sunshine Thomas R. Watjen |
2022 PROXY STATEMENT | | 80 |
Year Ended December 31, | |||||||||||
2021 | 2020 | Description | |||||||||
Audit Fees | $ | 9,884,417 | $ | 9,012,788 | Includes fees for the integrated audit of our annual financial statements and internal control over financial reporting, review of our financial statements included in our quarterly reports on Form 10-Q and statutory audits for our insurance subsidiaries. Audit fees for the year ended December 31, 2021 increased when compared to prior year primarily due to acquisitions resulting in increased reporting requirements in 2021. | ||||||
Audit Related Fees | 454,685 | 370,542 | Includes fees for assurance and related services that are traditionally performed by independent accountants, including employee benefit plan audits, due diligence related to mergers and acquisitions, regulatory and compliance attestations and agreed-upon procedures not required by regulation. Audit related fees for the year ended December 31, 2021 increased when compared to prior year primarily due to assistance with state regulatory examinations. | ||||||||
Tax Fees | 804,919 | 801,160 | Fees for tax services consists primarily of fees for tax compliance, tax advice and tax planning. | ||||||||
All Other Fees | 78,273 | 153,195 | Fees for services that are not included in the above categories consisted primarily of software licenses and professional services rendered in connection with various consulting. | ||||||||
Total1 | $ | 11,222,294 | $ | 10,337,685 |
81 | | 2022 PROXY STATEMENT |
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL. |
2022 PROXY STATEMENT | | 82 |
Arch Capital Holdings Ltd. | Arch Investment Management Ltd. | |||||||
François Morin; Chiara Nannini | François Morin; Christine Todd | |||||||
Arch Credit Risk Services (Bermuda) Ltd. | Arch Global Services Holdings Ltd. | |||||||
Seamus Fearon; H. Beau Franklin; James Haney | Chris Hovey; François Morin | |||||||
Arch Investment Property Holdings Ltd. | Alternative Re Holdings Limited, Alternative Re Limited | |||||||
Robert Appleby; W. Preston Hutchings; David J. Mulholland | François Morin; Chiara Nannini | |||||||
Arch Reinsurance Ltd. | Arch Underwriters Ltd. | |||||||
Matthew Dragonetti; Jerome Halgan; Pierre Jal; Maamoun Rajeh | Matthew Dragonetti; Jerome Halgan; Pierre Jal; Maamoun Rajeh | |||||||
Arch Investment Holdings I Ltd., Arch Investment Holdings II Ltd., Arch Investment Holdings III Ltd., Arch Investment Holdings IV Ltd. | Other Non-U.S. Subsidiaries, as Required or Designated Under Bye-Law 75 (except as otherwise indicated herein) | |||||||
François Morin; David J. Mulholland; Christine Todd | François Morin; Maamoun Rajeh | |||||||
83 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | 84 |
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL. |
85 | | 2022 PROXY STATEMENT |
Internet Availability of Proxy Materials | ||||||||
Shareholders Entitled to Vote and Voting Standard | ||||||||
2022 PROXY STATEMENT | | A-1 |
Quorum; Votes Required for Approval | ||||||||
A-2 | | 2022 PROXY STATEMENT |
Effect of Your Proxy | ||||||||
Effect of Not Casting Your Vote | ||||||||
Revoking Your Proxy or Changing Your Vote | ||||||||
2022 PROXY STATEMENT | | A-3 |
Annual Meeting Attendance | ||||||||
Limitation on Voting Under Our Bye-laws | ||||||||
A-4 | | 2022 PROXY STATEMENT |
Proxy Solicitation | ||||||||
Corporate Governance Materials | ||||||||
Reduce Duplicate Mailings | ||||||||
2022 PROXY STATEMENT | | A-5 |
Shareholder Proposals for the 2023 Annual General Meeting | ||||||||
Contacting Our Board, Individual Directors and Committees | ||||||||
Registered and Principal Executive Offices | ||||||||
Our registered office is located at: | Our principal executive offices are located at: | ||||
Clarendon House 2 Church Street Hamilton HM 11, Bermuda Phone: (441) 295-1422 | Waterloo House, Ground Floor 100 Pitts Bay Road Pembroke HM 08, Bermuda Phone: (441) 278-9250 |
A-6 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | B-1 |
B-2 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | B-3 |
B-4 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | B-5 |
B-6 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | B-7 |
B-8 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | B-9 |
B-10 | | 2022 PROXY STATEMENT |
2022 PROXY STATEMENT | | B-11 |
Year Ended | |||||||||||
December 31, | December 31, | ||||||||||
(U.S. Dollars in thousands, except share data) | 2021 | 2020 | |||||||||
Net income available to Arch common shareholders (a) | $ | 2,093,405 | $ | 1,363,909 | |||||||
Net realized (gains) losses | (307,466) | (814,808) | |||||||||
Equity in net (income) of investment funds accounted for using the equity method | (366,402) | (146,693) | |||||||||
Net foreign exchange losses (gains) | (42,743) | 80,591 | |||||||||
Transaction costs and other | 1,199 | 9,964 | |||||||||
Loss on redemption of preferred shares | 15,101 | — | |||||||||
Income tax expense (benefit) | 41,836 | 64,145 | |||||||||
After-tax operating income available to Arch common shareholders (b) | $ | 1,434,930 | $ | 557,108 | |||||||
Beginning common shareholders’ equity | $ | 12,325,886 | $ | 10,717,371 | |||||||
Ending common shareholders’ equity | 12,715,896 | 12,325,886 | |||||||||
Average common shareholders’ equity (c) | $ | 12,520,891 | $ | 11,521,629 | |||||||
Annualized return on average common equity (a)/(c) | 16.7 | % | 11.8 | % | |||||||
Annualized operating return on average common equity (b)/(c) | 11.5 | % | 4.8 | % |
C-1 | | 2022 PROXY STATEMENT |
Year Ended | |||||||||||
December 31, | December 31, | ||||||||||
(U.S. Dollars in thousands, except share data) | 2021 | 2020 | |||||||||
Total shareholders’ equity available to Arch | $ | 13,545,896 | $ | 13,105,886 | |||||||
Less preferred shareholders’ equity | 830,000 | 780,000 | |||||||||
Common shareholders’ equity available to Arch (a) | $ | 12,715,896 | $ | 12,325,886 | |||||||
Less: goodwill and intangible assets | 941,962 | 681,943 | |||||||||
Common shareholders’ equity available to Arch less goodwill and intangible assets (b) | $ | 11,773,934 | $ | 11,643,943 | |||||||
Common shares and common share equivalents outstanding, net of treasury shares (c) | 378,923,894 | 406,720,642 | |||||||||
Book value per common share (a)/(c) | $ | 33.56 | $ | 30.31 | |||||||
Tangible book value per common share (b)/(c) | $ | 31.07 | $ | 28.63 |
2022 PROXY STATEMENT | | C-2 |
1 Year Arch Capital Chart |
1 Month Arch Capital Chart |
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