We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
MGIC Investment Corp | NYSE:MTG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.04 | -0.19% | 20.51 | 20.81 | 20.015 | 20.26 | 3,151,313 | 22:30:00 |
WISCONSIN
|
|
39-1486475
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
MGIC PLAZA, 250 EAST KILBOURN AVENUE,
|
|
|
MILWAUKEE, WISCONSIN
|
|
53202
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Title of Each Class:
|
Common Stock, Par Value $1 Per Share
|
|
|
Common Share Purchase Rights
|
|
Name of Each Exchange on Which
|
|
|
Registered:
|
New York Stock Exchange
|
|
Title of Class:
|
None
|
|
Large accelerated filer ☒
|
Accelerated filer ☐
|
|
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
|
|
Emerging growth company ☐
|
|
TABLE OF CONTENTS
|
|||
|
|
Page No.
|
|
PART III
|
|
|
|
|
Item 10.
|
||
|
Item 11.
|
||
|
Item 12.
|
||
|
Item 13.
|
||
|
Item 14.
|
||
PART IV
|
|
|
|
|
Item 15.
|
||
|
|||
|
|
|
|
|
|
||
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
•
|
Net operating income for 2016 was $395.6 million, up 29% from 2015 ($306.1 million), with net operating income per diluted share of $0.99, up 32% from 2015 ($0.75). In 2015, as a result of our return to consistent profitability, the valuation allowance against our deferred tax assets ("DTA") was eliminated, resulting in the one-time realization of $848 million of tax benefits ($1.81 per fully diluted share). As a result, we believe our 2016 versus 2015 financial performance should be reviewed on a net operating income basis, which among other things, excludes the effect of the elimination of the DTA valuation allowance. Net operating income and net operating income per diluted share are non-GAAP financial measures. See "Explanation and Reconciliation of our use of Non-GAAP Financial Measures" in Item 7 in our Original Filing.
|
•
|
Our book of flow insurance in force, the principal source of our future revenue, grew by 5% in 2016, principally as result of an 11% increase in new insurance written.
|
•
|
We sold non-convertible senior debt for the first time in over ten years, using the proceeds to eliminate 66 million potentially dilutive shares through convertible note repurchase transactions.
|
•
|
Eliminated any retesting feature for all equity grants (2016, retroactive to 2014-2016 cycle)
|
•
|
Increased stock ownership guidelines (2017)
|
•
|
Changed our 2017 equity grants to:
|
◦
|
Establish three-year cliff vesting for all equity grants
|
◦
|
Reduce the number of annual equity award shares due to increasing stock price
|
◦
|
Tie vesting of 100% of the CEO’s annual equity awards (and the awards of all Executive Vice Presidents) to achievement of a performance goal relating to increased book value per share
|
•
|
Expanded benchmarking comparator group to better reflect pay and performance peers (2017)
|
•
|
Our bonus plan design results in payments for meeting goals that have the right amount of rigor:
|
◦
|
Over 40% of the CEO’s bonus depends on the extent to which we achieve EPS and ROE goals
|
▪
|
Our 2016 net operating income per diluted share was 32% more than 2015 ($0.99 vs. $0.75) (net operating income per diluted share is a non-GAAP financial measure; see "Explanation and Reconciliation of our use of Non-GAAP Financial Measures" in Item 7 in our Original Filing)
|
▪
|
Our 2016 GAAP Return on Equity ("ROE") was at the 85th percentile of the Simulated Peer Group discussed below (source: Bloomberg, which calculates ROE by dividing GAAP net income by average equity outstanding)
|
•
|
Our vesting goals for long-term equity awards also reflect the right amount of rigor:
|
◦
|
Full vesting for 80% of the CEO’s 2016 long-term equity awards requires 14.9% annual growth in adjusted book value per share
|
•
|
Our CEO’s 2016 compensation does not generate concern under simulations made by the Committee's independent compensation consultant of the quantitative pay-for-performance model of a leading proxy governance firm when using:
|
•
|
The 10-company self-selected peer group we used to assess 2016 compensation,
|
•
|
The expanded 14-company peer group the Committee adopted in March 2017 (by adding four companies to the prior group), and
|
◦
|
A simulated peer group constructed using the peer selection methodology of the proxy governance firm based on our 14-company peer group (the “Simulated Peer Group”).
|
(1) Net Operating Income and Net Operating Income per Diluted Share are non-GAAP measures of performance. For a description of how we calculate these measures and for a reconciliation of these measures to their nearest comparable GAAP measures, see "Explanation and Reconciliation of our use of Non-GAAP Financial Measures" in Item 7 in our Original Filing.
|
(1) Adjusted Book Value per Share is a non-GAAP financial measure. Adjusted Book Value per Share excluding Accumulated Other Comprehensive Income ("AOCI") was used to determine March 2017 vesting of long-term equity awards granted in 2016. Adjusted Book Value per Share excluding both AOCI and Deferred Tax Assets ("DTA") was used to determine March 2017 vesting of long-term equity awards granted in 2015. For a description of how we calculate these measures and for a reconciliation of these measures to their nearest comparable GAAP measures, see the Appendix to this CD&A.
|
(2) New insurance written refers to direct new insurance written (before the effects of reinsurance).
|
Capital Position
• MGIC was upgraded to an investment grade rating by Moody's and Standard and Poor’s.
• Re-entered the senior debt markets for the first time in 10 years, issuing senior notes and using a portion of the proceeds to repurchase convertible notes.
• Eliminated 66 million potentially dilutive shares through transactions listed above and other transactions during the year.
Grow Insurance in Force
• Grew flow insurance in force by more than 5%.
• Successfully introduced new premium rate cards projected to generate sufficient Risk Adjusted Return on Capital to build shareholder value.
• Wrote more than 80% of new insurance written with FICO scores 700 and greater.
• Had an 18% market share while maintaining pricing discipline in an intensely competitive lender-paid mortgage insurance market.
|
|
Manage Role of Mortgage Insurance in Housing Policy
• Held leadership positions in trade associations.
• Continued to enhance the Company’s reputation as a key contributor to housing policy discussions.
Pursue Business Opportunities
• Negotiated a business plan with the GSEs that allowed our credit insurance subsidiary to participate in GSE credit risk transfer pilot programs, thereby enabling us to gain hands-on experience through such participation.
Develop Co-Workers
• Continued to build a robust talent review and succession mechanism for all management and key contributor positions.
|
What we heard
|
|
How we responded
|
Shareholders prefer goals to determine vesting of equity awards that are largely different from the goals used to determine the annual bonus.
|
|
For the equity grants made in January 2015, 2016 and 2017, vesting of performance-based equity awards is based on growth in adjusted book value per share, which is a different financial goal than any goal used in determining annual bonuses.
|
Shareholders prefer that equity awards have longer-term performance goals.
|
|
For all equity awards granted in January 2017, vesting is determined based on achievement of a three-year cumulative adjusted book value per share growth goal with no partial vesting in the interim years (i.e., "cliff vesting").
|
The Company should eliminate any retesting feature in equity grants.
|
|
We modified the 2014-2016 grants of other long-term equity awards to prevent vesting based on performance in any year later than the originally scheduled performance year.
|
Investors prefer more robust stock ownership guidelines for our named executed officers.
|
|
In January 2017, we increased the stock ownership guidelines for our NEOs as discussed below.
|
•
|
“Double trigger” is required for any benefits to be paid (equity awards granted after January 2015 will not vest upon a change in control if the Committee determines that the awards will be assumed or replaced);
|
•
|
Cash severance does not exceed 2x base salary plus bonus plus retirement plan accrual; and
|
•
|
There is no excise tax gross-up provision.
|
•
|
No granting of stock options with an exercise price less than the fair market value of the Company’s common stock on the date of grant
|
•
|
No re-pricing (reduction in exercise price) of stock options
|
•
|
No cash buy-outs of underwater stock options
|
•
|
No inclusion of reload provisions in any stock option grant
|
•
|
No payment of dividends on performance shares before they are vested
|
•
|
No single trigger vesting of awards upon a change in control in which the awards are assumed or replaced
|
•
|
No recycling of shares withheld for tax purposes upon vesting
|
•
|
No granting of more than 5% of the awards under the plan with a vesting period of less than one year
|
•
|
No Committee discretion to accelerate vesting of awards, except under certain limited instances like death and disability
|
•
|
Attract and retain high-quality executives
: We want a competitive pay opportunity in the sense that:
|
◦
|
our base salaries are on average around the median of a group of peers over a several year time horizon, and
|
◦
|
our bonus and long-term equity awards, when performance is strong, move total direct compensation above the market median to reflect that strong performance.
|
•
|
Align executive compensation with long-term shareholder interests
: We aim to achieve a close alignment between compensation and long-term shareholder interests by:
|
◦
|
linking compensation to Company and executive performance; and
|
◦
|
paying a substantial portion of total direct compensation in:
|
§
|
bonuses based on specific goals that align payouts with Company performance, and
|
§
|
long-term equity awards whose vesting is based on three-year goals that align payouts with Company performance and whose value reflects total shareholder value.
|
•
|
Limit perquisites
: Perks for our executive officers are minimal.
|
•
|
Review and approval of bonus and equity compensation goals and objectives;
|
•
|
Evaluation of performance in light of these goals and objectives; and
|
•
|
Evaluation of the competitiveness of the CEO’s total compensation package.
|
•
|
Provided an evaluation of NEO compensation compared to peers.
|
•
|
Provided advice about the annual bonus plan, including the goals and target performance incorporated into the formula that is used to determine payouts.
|
•
|
Provided advice about the long-term equity incentive program, including the level of awards granted under the program and the vesting provisions.
|
•
|
Provided advice regarding “best practice” compensation practices, such as stock retention guidelines.
|
•
|
Reviewed the peer group used for competitive analyses and provided advice regarding the addition of four peers to the group for 2017.
|
•
|
Reviewed drafts and commented on the CD&A and related compensation tables for the Proxy Statement.
|
•
|
Size of the Group.
Due to the limited number of public companies in the mortgage, surety and title insurance industries, our peer group of ten companies has been smaller than the peer groups of most other companies. In addition, the number is expected to decrease as one of the peer companies has agreed to be acquired by a non-public company, and two of the other companies have significantly decreased in size since 2008 as a result of the financial crisis. Because of the relatively small peer group and the prospect of it becoming smaller, the Committee chose to increase the size of our peer group.
|
•
|
Composition of the Group
. As noted above, our peer group has previously been composed of companies in the mortgage, surety and title insurance industries. However, recent talent acquisition has been from outside those industries: two NEOs and several of the officers we have most recently hired joined us from banking and mortgage finance companies. Therefore, the Committee determined that those industries should be represented in our peer group.
|
•
|
We have not sought talent from those companies.
|
•
|
Those companies do not have meaningful exposure to the residential real estate market and their total shareholder returns would not be expected to be correlated with ours.
|
•
|
None of those companies chose us as a peer.
|
|
|
Peer Group
|
||
|
MGIC
|
25th percentile
|
Median
|
75th percentile
|
Bonus Opportunity
(1)
(% of Base Salary)
|
300%
|
300%
|
301%
|
368%
|
|
Actual
|
Actual
|
2016 Performance Levels
|
|
|
2014
|
2015
|
Target
|
Maximum
|
Diluted After-Tax Earnings Per Share
|
$0.64
|
$2.60
|
$0.67
|
$0.80
|
|
Net income
|
|
|
|
|
($ millions)
|
Diluted EPS
1
|
Explanation
|
|
2015 Actual
|
1,172
|
|
$2.60
|
|
Income Tax
|
(818
|
)
|
(1.75)
|
In 2015, we reversed the valuation allowance that had been recorded against deferred tax assets. In addition, the 2016 budget reflects tax expense, while the 2015 actual results did not.
|
Realized Investment Gains
|
(28
|
)
|
(0.06)
|
$28 million of investment gains were recognized in 2015. At the end of 2015, our investment portfolio was in a net unrealized loss position and we did not budget recognized investment gains for 2016.
|
Premium Deficiency Reserve
|
(24
|
)
|
(0.05)
|
Our 2015 results reflected a $24 million benefit associated with the premium deficiency reserve (PDR) we established in 2007. The PDR was eliminated in 2016, therefore, no similar benefit was budgeted for.
|
Employee Costs
|
(8
|
)
|
(0.02)
|
Following the financial crisis, our new insurance written declined for several years and we were forced to make headcount reductions, which reduced our employee costs. In recent years, our new insurance written has increased and we have added employees to develop and service that new business.
|
Effects of Reinsurance Transactions
|
(7
|
)
|
(0.01)
|
Net impact of the non-recurring 2015 termination of our 2013 Quota Share reinsurance transaction and its replacement with a new reinsurance transaction.
|
Other
|
(15
|
)
|
(0.03)
|
|
2016 Target Performance
|
272
|
|
$0.67
|
|
1.
|
The Diluted EPS impacts of changes in net income are calculated based on the weighted average diluted shares used to calculate 2015 diluted EPS (as reported in our Annual Report on Form 10-K filed with the SEC on February 26, 2016).
|
|
Actual
|
Actual
|
2016 Performance Levels
|
|
|
2014
|
2015
|
Target
|
Maximum
|
Return on Equity
|
33.8%
|
113.0%
|
12.2%
|
14.8%
|
Net Income ($ millions)
|
252
|
1,172
|
272
|
331
|
Beginning Shareholders' Equity ($ millions)
|
745
|
1,037
|
2,236
|
2,236
|
|
Actual
|
Actual
|
2016 Performance Levels
|
|
|
2014
|
2015
|
Target
|
Maximum
|
New Insurance Written ($ billions)
|
33.4
|
43.0
|
41.0
|
45.0
|
|
Actual
|
Actual
|
2016 Performance Levels
|
|
|
2014
|
2015
|
Target
|
Maximum
|
Expense Ratio
|
14.7%
|
14.9%
|
16.9%
|
14.9%
|
|
Actual
|
Actual
|
2016 Performance Levels
|
|
|
2014
|
2015
|
Target
|
Maximum
|
Loss Ratio
|
2.2%
|
1.5%
|
10.0%
|
3.0%
|
•
|
the three-year cumulative goal for vesting of the 2016 and 2015 BV Awards,
|
•
|
the 2016 and 2015 growth in adjusted book value per share as calculated for each of the awards, and
|
•
|
the resulting vesting percentage.
|
|
3-year Cumulative Goal
|
2015 Actual
|
2016 Actual
|
2016 Vesting %
|
2016 BV Awards
|
$3.49
|
-
|
$0.94
|
26.9%
|
2015 BV Awards
|
$3.39
|
$1.21
|
$1.40
|
33.3%
|
|
Guideline
(value of shares) |
Actual Ownership
(value at 12/31/16) |
Actual Ownership as a Multiple of Base Salary
|
CEO
|
$4,944,000
|
$11,667,173
|
14.2 x
|
Total Other NEOs
|
$5,946,100
|
$11,492,486
|
5.5 x
|
Reconciliation of Book Value per Share to Adjusted Book Value per Share for 2016 Equity Awards
|
||||||||
|
|
|
|
|
||||
(In thousands, except per share amounts)
|
|
2015
|
|
2016
|
||||
Shareholders' Equity (Book Value)
|
|
$
|
2,236,140
|
|
|
$
|
2,548,842
|
|
Divided by Shares Outstanding
|
|
339,657
|
|
|
340,663
|
|
||
Book Value per Share
|
|
$
|
6.58
|
|
|
$
|
7.48
|
|
|
|
|
|
|
||||
Adjusted Book Value for 2016 Equity Awards (from below)
|
|
$
|
2,297,020
|
|
|
$
|
2,623,942
|
|
Divided by Shares Outstanding
|
|
339,657
|
|
|
340,663
|
|
||
Adjusted Book Value per Share for 2016 Equity Awards
|
|
$
|
6.76
|
|
|
$
|
7.70
|
|
|
|
|
|
|
||||
Shareholders' Equity (Book Value)
|
|
$
|
2,236,140
|
|
|
$
|
2,548,842
|
|
Accumulated Other Comprehensive Income ("AOCI")
|
|
60,880
|
|
|
75,100
|
|
||
Adjusted Book Value for 2016 Equity Awards
|
|
$
|
2,297,020
|
|
|
$
|
2,623,942
|
|
Name and
Principal Position |
Year
|
Salary
($) |
Stock Awards
(1)
($) |
Non-Equity Incentive Plan Compensation
(2)
($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings
(3)
($) |
All Other Compensation
(4)
($) |
Total
($) |
Patrick Sinks
(5)
|
2016
|
818,462
|
1,664,040
|
2,200,000
|
1,100,922
|
14,850
|
5,798,274
|
President and Chief
|
2015
|
769,331
|
3,143,000
|
2,200,000
|
455,612
|
14,600
|
6,582,543
|
Executive Officer
|
2014
|
618,623
|
1,519,288
|
1,360,000
|
949,765
|
14,350
|
4,462,026
|
Timothy Mattke
|
2016
|
511,539
|
570,528
|
1,093,900
|
246,002
|
14,850
|
2,436,819
|
Executive Vice
|
2015
|
464,231
|
1,077,600
|
1,096,900
|
101,070
|
14,600
|
2,754,401
|
President and
|
2014
|
327,697
|
828,703
|
755,000
|
130,869
|
14,350
|
2,056,619
|
Chief Financial Officer
|
|
|
|
|
|
|
|
Gregory Chi
(6)
|
2016
|
313,077
|
219,155
|
510,700
|
220,190
|
14,850
|
1,277,972
|
Senior Vice President -
|
2015
|
303,923
|
395,120
|
440,600
|
147,744
|
14,600
|
1,301,987
|
Info Services
|
|
|
|
|
|
|
|
Jeffrey Lane
|
2016
|
815,385
|
570,528
|
1,128,000
|
455,896
|
14,850
|
2,984,659
|
Executive Vice
|
2015
|
797,600
|
1,077,600
|
1,129,800
|
238,920
|
14,600
|
3,258,520
|
President and
|
2014
|
774,362
|
828,703
|
1,200,000
|
717,037
|
14,350
|
3,534,452
|
General Counsel
|
|
|
|
|
|
|
|
Stephen Mackey
(6)
|
2016
|
434,846
|
570,528
|
837,000
|
30,094
|
10,600
|
1,883,068
|
Executive Vice
|
|
|
|
|
|
|
|
President and Chief
|
|
|
|
|
|
|
|
Risk Officer
|
|
|
|
|
|
|
|
(1)
|
Our stock awards are granted under programs described in “Compensation Discussion and Analysis — Long-Term Equity Awards” above. The amounts shown in this column represent the grant date fair value of the restricted equity awards granted to named executive officers in the years shown, computed in accordance with FASB ASC Topic 718. The fair value of restricted equity is based on the closing price of our Common Stock on the New York Stock Exchange on the date of grant. The vesting of all of the awards represented in this column is subject to our meeting certain performance conditions. In accordance with the rules of the SEC, all of the figures in this column represent the value at the grant date based upon the probable outcome of the applicable performance conditions as of the grant date. If the full value of the applicable awards for 2016, 2015 and 2014 were shown, assuming the highest levels of the applicable performance conditions were achieved, rather than an amount based upon the probable outcome of the applicable performance conditions, then the amounts shown would have been:
|
|
Name
|
2016
|
2015
|
2014
|
|||
|
Patrick Sinks
|
$1,981,000
|
$3,143,000
|
$1,854,600
|
|||
|
Timothy Mattke
|
679,200
|
|
1,077,600
|
|
1,011,600
|
|
|
Gregory Chi
|
249,040
|
|
395,120
|
|
See Note
(5)
|
|
|
Jeffrey Lane
|
679,200
|
|
1,077,600
|
|
1,011,600
|
|
|
Stephen Mackey
|
679,200
|
|
See Note
(5)
|
|
See Note
(5)
|
|
(2)
|
Our 2016 bonus program is described in “Compensation Discussion and Analysis — Our 2016 Executive Compensation — Annual Bonus” above. The percentage of the maximum bonuses paid was calculated based on a formula which compares actual performance to threshold, target and maximum performance achievement levels for five different financial performance goals (each with specific weights and in total weighted 75%) and a subjective assessment of performance against five different business goals (each with the same weight and in total weighted 25%). Our 2014 and 2015 bonus programs were structurally similar to the 2016 bonus program. All goals for the 2014-2016 bonus programs were considered and approved by the Management Development, Nominating and Governance Committee.
|
(3)
|
The Company does not maintain a nonqualified deferred compensation plan for its employees. The amounts shown in this column reflect, if positive, the sum of (a) the aggregate change in present value of accumulated pension benefits during the
|
•
|
For other than Mr. Mackey, the difference between (a) the present value of the annual pension payments that the named executive officer would be entitled to receive beginning at age 62, or current age if older than 62, and continuing for his life expectancy determined at the end of the year shown and by assuming that the officer’s employment with us ended on the last day of the year shown, and (b) the same calculation done as if the officer’s employment had ended one year earlier.
|
•
|
For Mr. Mackey, the difference between (a) the present value as of December 31, 2016 of the accumulated benefit under the "Cash Component" (described following the table titled “Pension Benefits at 2016 Fiscal Year-End”) of our Pension Plan, and (b) the same calculation as of December 31, 2015.
|
|
|
2016
|
2015
|
2014
|
|||||||||||||||
|
Name
|
Change in
Actuarial Assumptions |
Change Due to Other Factors
|
Change in
Actuarial Assumptions |
Change Due to Other Factors
|
Change in
Actuarial Assumptions |
Change Due to Other Factors
|
||||||||||||
|
Patrick Sinks
|
$
|
176,166
|
|
$
|
924,756
|
|
$
|
(200,769
|
)
|
$
|
656,381
|
|
$
|
482,826
|
|
$
|
466,939
|
|
|
Timothy Mattke
|
56,713
|
|
189,289
|
|
(47,985)
|
|
149,055
|
|
71,878
|
|
59,291
|
|
||||||
|
Gregory Chi
|
28,120
|
|
192,070
|
|
(29,433)
|
|
177,177
|
|
See Note
(5)
|
|
See Note
(5)
|
|
||||||
|
Jeffrey Lane
|
96,390
|
|
359,506
|
|
(138,269)
|
|
377,189
|
|
405,696
|
|
311,341
|
|
||||||
|
Stephen Mackey
|
(426)
|
|
30,520
|
|
See Note
(5)
|
|
See Note
(5)
|
|
See Note
(5)
|
|
See Note
(5)
|
|
(4)
|
Amounts in this column for 2016 consist of matching 401(k) contributions and discretionary retirement plan contributions.
|
(5)
|
Mr. Sinks assumed the position of Chief Executive Officer on March 1, 2015. His 2015 compensation generally represents a full year of compensation as CEO, with the exception of his January and February 2015 base salary, which he earned at a lower rate while President and Chief Operating Officer.
|
(6)
|
No compensation data is provided for years prior to Messrs. Chi and Mackey becoming a “named executive officer.”
|
Name
|
Type of Award
|
Grant
Date |
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards (1) |
Estimated Future
Payouts Under Equity Incentive Plan Awards |
Grant Date
Fair Value of Stock and Option Awards (2) ($) |
||||||||||
Threshold
($) |
Target
($) |
Maximum
($) |
Threshold
(#) |
Target
(#) |
Maximum
(#) |
||||||||||
Patrick Sinks
|
Other
(3)
|
1/25/2016
|
|
|
|
0
|
70,000
|
|
70,000
|
|
396,200
|
|
|||
|
Performance Based
(4)
|
1/25/2016
|
0
|
1,236,000
|
|
2,472,000
|
|
0
|
224,000
|
|
280,000
|
|
1,267,840
|
|
|
Timothy Mattke
|
Other (3) |
1/25/2016
|
|
|
|
0
|
24,000
|
|
24,000
|
|
135,840
|
|
|||
|
Performance Based
(4)
|
1/25/2016
|
0
|
579,400
|
|
1,158,800
|
|
0
|
76,800
|
|
96,000
|
|
434,688
|
|
|
Gregory Chi
|
Other (3) |
1/25/2016
|
|
|
|
0
|
17,600
|
|
17,600
|
|
99,616
|
|
|||
|
Performance Based
(4)
|
1/25/2016
|
0
|
283,700
|
|
567,400
|
|
0
|
21,120
|
|
26,400
|
|
119,539
|
|
|
Jeffrey Lane
|
Other (3) |
1/25/2016
|
|
|
|
0
|
24,000
|
|
24,000
|
|
135,840
|
|
|||
|
Performance Based
(4)
|
1/25/2016
|
0
|
597,487
|
|
1,194,973
|
|
0
|
76,800
|
|
96,000
|
|
434,688
|
|
|
Stephen Mackey
|
Other (3) |
1/25/2016
|
|
|
|
0
|
24,000
|
|
24,000
|
|
135,840
|
|
|||
|
Performance Based
(4)
|
1/25/2016
|
0
|
492,550
|
|
985,100
|
|
0
|
76,800
|
|
96,000
|
|
434,688
|
|
(1)
|
Our Non-Equity Incentive Awards are described in “Annual Bonus” in our Compensation Discussion and Analysis above.
|
(2)
|
All of the figures in this column represent the value of stock unit awards at the grant date based upon the probable outcome of the applicable performance conditions as of the grant date. The grant date fair value is based on the New York Stock Exchange closing price on the day the award was granted.
|
(3)
|
These are the CR Awards described in “2016 Other Long-Term Equity Awards – CR (Combined Ratio) Awards” in our Compensation Discussion and Analysis above.
|
(4)
|
For Equity Incentive Plan Awards, these are the BV Awards described in “2016 Performance-Based Long-Term Equity Awards – BV (Book Value) Awards” in our Compensation Discussion and Analysis above.
|
|
|
|
|
|
Equity Incentive Plan Awards
|
||||||
Name
|
Number of Shares or Units of Stock That Have Not Vested
(1)
(#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested
(2)
($)
|
|
Number of Unearned Shares, Units or
Other Rights That Have Not Vested
(3)
(#)
|
|
Market or Payout
Value of Unearned Shares, Units or Other Rights That Have Not Vested
(2)
($)
|
||||
Patrick Sinks
|
—
|
|
|
—
|
|
|
595,975
|
|
|
6,072,985
|
|
Timothy Mattke
|
—
|
|
|
—
|
|
|
217,824
|
|
|
2,219,627
|
|
Gregory Chi
|
5,868
|
|
|
59,795
|
|
|
56,594
|
|
|
696,262
|
|
Jeffrey Lane
|
—
|
|
|
—
|
|
|
217,824
|
|
|
2,219,627
|
|
Stephen Mackey
|
—
|
|
|
—
|
|
|
121,472
|
|
|
1,237,800
|
|
(1)
|
Consists of restricted equity granted to Mr. Chi on January 27, 2014, prior to his becoming a named executive officer. Those awards vest in February in each of the first three years following the grant date and are not subject to performance targets.
|
(2)
|
Based on the closing price of the Common Stock on the New York Stock Exchange at 2016 year-end, which was $10.19.
|
(3)
|
Consists of:
|
(a)
|
Performance-based restricted equity granted January 27, 2014; January 26, 2015; and January 25, 2016 (other than to Mr. Mackey) that will vest in February or March in each of the first three years following the grant dates if we meet certain performance targets (with the vesting amounts, if any, dependent upon our performance).
|
(b)
|
Other restricted equity granted January 27, 2014 (other than to Messrs. Chi and Mackey); January 26, 2015 (other than to Mr. Mackey); and January 25, 2016; in each case, one-third of the units awarded will vest in February in each of the first three years following the grant dates if we meet certain performance targets.
|
(c)
|
Other restricted equity granted July 22, 2015 to Mr. Mackey, one-third of which will vest in July in each of the first three years following the grant date if we meet certain performance targets.
|
|
Stock Awards
|
||||
Name
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value Realized
on Vesting
(1)
($)
|
||
Patrick Sinks
|
259,955
|
|
|
1,907,887
|
|
Timothy Mattke
|
90,055
|
|
|
657,173
|
|
Gregory Chi
|
43,842
|
|
|
312,703
|
|
Jeffrey Lane
|
118,176
|
|
|
867,269
|
|
Stephen Mackey
|
10,000
|
|
|
69,200
|
|
(1)
|
Value realized is the market value at the close of business on the vesting date. None of our named executive officers sold any shares in 2016 though some shares that vested were withheld to pay taxes due as a result of the vesting of the shares.
|
Name
|
Plan Name
(1)
|
Number of Years Credited Service
(#) |
Present Value of
Accumulated Benefit (2) ($) |
Payments During Last Fiscal Year
(3)
($) |
||
Patrick Sinks
|
Qualified Pension Plan
|
38.4
|
2,734,641
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
38.4
|
2,241,268
|
|
26,323
|
|
Timothy Mattke
|
Qualified Pension Plan
|
10.6
|
455,090
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
10.6
|
155,359
|
|
—
|
|
Gregory Chi
|
Qualified Pension Plan
|
4.9
|
571,234
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
4.9
|
111,950
|
|
—
|
|
Jeffrey Lane
(4)
|
Qualified Pension Plan
|
20.3
|
2,550,823
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
20.3
|
1,803,169
|
|
16,731
|
|
Stephen Mackey
|
Qualified Pension Plan
|
1.5
|
16,563
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
1.5
|
20,734
|
|
—
|
|
(1)
|
See below for a summary of these plans.
|
(2)
|
The amount shown in this column, for other than Mr. Mackey, is the present value of the annual pension payments that the named executive officer would be entitled to receive beginning at age 62 (which is the earliest age that unreduced benefits under the Qualified Pension Plan and SERP may be received), or current age if older than 62, and continuing for his life expectancy determined at the end of 2016 and by assuming that the officer’s employment with us ended on the last day of that year. See Note 11 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ending December 31, 2016 for the discount rate used to calculate the present value of benefits under these plans. The amount shown in this column for Mr. Mackey is the present value as of December 31, 2016 of the accumulated benefit under the "Cash Component" (described below) of our Pension Plan, assuming retirement at age 65 (the earliest age at which unreduced benefits may be received under the Cash Component of the Pension Plan. The amounts shown assume that each executive is 100% vested in his pension benefit; however, Mr. Chi is 40% vested and Mr. Mackey is 0% vested.
|
(3)
|
For Messrs. Sinks and Lane, the amounts shown in this column represent distribution amounts received from the MGIC SERP during the fiscal year ended December 31, 2016, to pay the employee portion of the Social Security tax attributable to benefits earned under the plan during fiscal year 2016, as well as amounts distributed to cover the income tax thereon.
|
(4)
|
Includes an annual benefit of $34,000 credited to Mr. Lane as part of his initial employment. This amount represents $424,289 of the present value of Mr. Lane’s benefits.
|
Name
|
Termination Scenario
|
Total
($)
|
Cash Payment
(1)
($)
|
Value of Restricted Equity and Stock Options that will Vest on an Accelerated Basis
(2)
($)
|
Value of Restricted Equity and Stock Options Eligible for Continued Vesting
(2)
($)
|
Value of Other Benefits
(3)
($)
|
|||||
Patrick Sinks
|
Change in control with qualifying termination
|
12,344,025
|
|
5,470,374
|
|
6,697,184
|
|
—
|
|
176,467
|
|
|
Change in control without qualifying termination
|
752,063
|
|
—
|
|
752,063
|
|
—
|
|
—
|
|
|
Death
|
6,697,184
|
|
—
|
|
6,697,184
|
|
—
|
|
—
|
|
Timothy
Mattke |
Change in control with qualifying termination
|
5,440,197
|
|
2,846,095
|
|
2,448,535
|
|
—
|
|
145,567
|
|
|
Change in control without qualifying termination
|
410,209
|
|
—
|
|
410,209
|
|
—
|
|
—
|
|
|
Death
|
2,448,535
|
|
—
|
|
2,448,535
|
|
—
|
|
—
|
|
Gregory Chi
|
Change in control with qualifying termination
|
2,409,172
|
|
1,511,621
|
|
807,975
|
|
—
|
|
89,576
|
|
|
Change in control without qualifying termination
|
60,610
|
|
—
|
|
60,610
|
|
—
|
|
—
|
|
|
Death
|
807,975
|
|
—
|
|
807,975
|
|
—
|
|
—
|
|
Jeffrey Lane
|
Change in control with qualifying termination
|
6,414,895
|
|
3,811,335
|
|
2,448,535
|
|
—
|
|
155,025
|
|
|
Change in control without qualifying termination
|
410,209
|
|
—
|
|
410,209
|
|
—
|
|
—
|
|
|
Retirement
|
1,225,735
|
|
—
|
|
—
|
|
1,225,735
|
|
—
|
|
|
Death
|
2,448,535
|
|
—
|
|
2,448,535
|
|
—
|
|
—
|
|
Stephen Mackey
|
Change in control in qualifying termination
|
1,270,750
|
|
—
|
|
1,270,750
|
|
—
|
|
—
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
1,426,600
|
|
—
|
|
1,426,600
|
|
—
|
|
—
|
|
(1)
|
As described further in “Change in Control Agreements” below, each of our current named executive officers is a party to a Key Executive Employment and Severance Agreement (“KEESA”) that may provide for payments after a change in control. A qualifying termination is a termination within three years after the change in control by the Company other than for cause, death or disability or by the executive for good reason. Amounts are payable in one or two lump sums, depending on limits on amounts that may be paid within six months under applicable tax rules and regulations. The first lump sum is payable within 10 business days after the termination date and the second lump sum, if required by applicable tax rules and regulations, is payable six months thereafter.
|
(2)
|
The value attributed to restricted stock that accelerates or is eligible for continued vesting is calculated using the closing price on the New York Stock Exchange on December 31, 2016 (which is a higher valuation than that specified by IRS regulations for tax purposes). The accelerated vesting occurs as a result of the terms of the restricted stock award, not under the KEESA.
|
(3)
|
In connection with a change in control, other benefits include three years of health and welfare benefits, outplacement costs, and an allowance for tax, legal and accounting fees.
|
Compensation Component
|
|
Compensation Program
|
Annual Retainer – Chairman of the Board
|
|
$250,000
|
Annual Retainer – Non-Chairman Directors
|
|
$125,000, which may be elected to be deferred and either converted into share units or credited to an interest-bearing account.
|
Annual Equity Retainer
|
|
$100,000 in cash-settled restricted stock units that vest immediately but are not settled for approximately one year. Such settlement may be deferred at the option of the director.
|
Annual Retainer – Lead Director
|
|
$25,000
|
Annual Retainer – Committee Chair
|
|
$25,000 for the Audit Committee
$25,000 for the Management Development, Nominating and Governance Committee $15,000 for all other committees (1) |
Annual Retainer – Committee Member
|
|
$15,000 for Audit Committee
$5,000 for other committees (1) |
Meeting Fees (after 5
th
meeting)
(2)
|
|
$3,000 for Board meetings
$2,000 for Committee meetings |
Stock Ownership Guidelines
|
|
Ownership of 25,000 shares of Common Stock, including deferred share units that have vested or are scheduled to vest within one year. Directors are expected to meet the guideline within five years of joining the Board.
(3)
|
Expense Reimbursement
|
|
Subject to certain limits, we reimburse directors, and for meetings not held on our premises, their spouses, for travel, lodging and related expenses incurred in connection with attending Board and Committee meetings.
|
Directors & Officers Insurance
|
|
We pay premiums for D&O liability insurance under which the directors are insureds.
|
(1)
|
Excludes the Executive Committee. Other than the Executive Committee, directors who are members of management do not serve on any committees.
|
(2)
|
After the fifth Board meeting attended, or the fifth committee meeting attended for a particular committee, our non-management directors receive $3,000 for each Board meeting attended, and the committee members receive $2,000 for all committee
|
(3)
|
Each of our non-employee Directors satisfies this guideline.
|
Name
|
|
Fees Earned or
Paid in Cash ($) (1) |
|
Total Stock Awards
($) (2) |
|
Total
($) |
Daniel A. Arrigoni
|
|
178,000
|
|
100,000
|
|
278,000
|
Cassandra C. Carr
|
|
146,000
|
|
100,000
|
|
246,000
|
C. Edward Chaplin
|
|
152,000
|
|
100,000
|
|
252,000
|
Curt S. Culver
|
|
259,000
|
|
100,000
|
|
359,000
|
Timothy A. Holt
|
|
187,000
|
|
100,000
|
|
287,000
|
Kenneth M. Jastrow, II
|
|
183,000
|
|
100,000
|
|
283,000
|
Michael E. Lehman
|
|
180,250
|
|
100,000
|
|
280,250
|
Donald T. Nicolaisen
(3)
|
|
156,000
|
|
100,000
|
|
256,000
|
Gary A. Poliner
|
|
185,750
|
|
100,000
|
|
285,750
|
Mark M. Zandi
|
|
141,000
|
|
100,000
|
|
241,000
|
(1)
|
The following directors elected to defer certain fees shown in this column into share units as described under “Compensation of Directors — Non-Employee Director Compensation Plan — Deferred Compensation Plan and Annual Grant of Share Units” above: Mr. Chaplin deferred $149,500 of the fees and received 19,214 share units; Mr. Poliner deferred all of the fees and received 23,949 share units; and Dr. Zandi deferred $130,000 of the fees and received 16,953 share units.
|
(2)
|
The amount shown in this column for each director represents the grant date fair value of the annual share unit award granted to non-employee directors in 2016 under our Deferred Compensation Plan, computed in accordance with FASB Accounting Standard Codification (“ASC”) Topic 718. The value of each share unit is equal to the value of our Common Stock on the grant date. See “Compensation of Directors — Non-Employee Director Compensation Plan — Deferred Compensation Plan and Annual Grant of Share Units” above for more information about these grants.
|
(3)
|
Mr. Nicolaisen resigned as a member of our Board of Directors effective October 20, 2016. In recognition of his service on our Board, we made contributions in a total amount of $25,000 to charities that he designated. These contributions were not solicited by Mr. Nicolaisen, were not made under any agreement with him and are not included in the table.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Name
|
|
Shares
Beneficially Owned |
|
Percent of Class
|
|
The Vanguard Group, Inc.
(1)
100 Vanguard Boulevard, Malvern, PA 19355 |
|
29,213,614
|
|
|
8.6%
|
Wellington Management Group LLP
(2)
280 Congress Street, Boston, MA 02210 |
|
25,455,429
|
|
|
7.5%
|
BlackRock, Inc.
(3)
55 East 52nd Street, New York, NY 10055 |
|
21,949,111
|
|
|
6.4%
|
(1)
|
The Vanguard Group, Inc. reported ownership as of December 31, 2016, on behalf of itself and certain subsidiaries. It reported that it had sole dispositive power for 28,786,505 shares and shared dispositive power for 427,109 shares. It further reported that it had sole voting power for 408,728 shares and shared voting power for 36,172 shares.
|
(2)
|
Wellington reported ownership as of December 31, 2016, on behalf of itself and several subsidiaries. It reported that it had sole dispositive power for no shares and shared dispositive power for 25,455,429 shares. It further reported that it had sole voting power for no shares and shared voting power for 17,314,761 shares.
|
(3)
|
BlackRock, Inc. reported ownership as of December 31, 2016, on behalf of itself and several subsidiaries. It reported that it had sole dispositive power for 21,949,111 shares and shared dispositive power for no shares. It further reported that it had sole voting power for 21,166,697 shares and shared voting power for no shares.
|
Name of Beneficial Owner
|
Common Stock Owned Directly
(1)
|
Common Stock Owned Indirectly
(2)
|
Restricted Stock and Common Stock Underlying RSUs
(3)
|
Total Number of Shares Beneficially Owned
|
Director Deferred Stock Units / Additional Underlying Units
|
Total Shares Beneficially
Owned Plus Underlying Units |
|||||
Daniel A. Arrigoni
|
—
|
|
20,000
|
|
—
|
|
20,000
|
|
9,606
(4)
|
29,606
|
|
Cassandra C. Carr
|
5,000
|
|
—
|
|
—
|
|
5,000
|
|
32,604
(4)
|
37,604
|
|
C. Edward Chaplin
|
10,000
|
|
—
|
|
—
|
|
10,000
|
|
55,432
(4)
|
65,432
|
|
Curt S. Culver
|
1,521,659
|
|
40,000
|
|
—
|
|
1,561,659
|
|
9,606
(4)
|
1,571,265
|
|
Timothy A. Holt
|
20,000
|
|
—
|
|
—
|
|
20,000
|
|
67,953
(4)
|
87,953
|
|
Kenneth M. Jastrow, II
|
1,146
|
|
—
|
|
31,552
|
|
32,698
|
|
39,742
(4)
|
72,440
|
|
Michael E. Lehman
|
19,939
|
|
—
|
|
3,050
|
|
22,989
|
|
10,987
(4)
|
33,976
|
|
Gary A. Poliner
|
—
|
|
—
|
|
—
|
|
—
|
|
94,451
(4)
|
94,451
|
|
Mark M. Zandi
|
—
|
|
—
|
|
—
|
|
—
|
|
51,114
(4)
|
51,114
|
|
Patrick Sinks
|
969,867
|
|
10,616
|
|
—
|
|
980,483
|
|
675,921
(5)
|
1,656,404
|
|
Timothy M. Mattke
|
204,497
|
|
866
|
|
—
|
|
205,363
|
|
231,744
(5)
|
437,107
|
|
Gregory A. Chi
|
119,950
|
|
—
|
|
—
|
|
119,950
|
|
84,413
(5)
|
204,363
|
|
Jeffrey H. Lane
|
595,205
|
|
—
|
|
—
|
|
595,205
|
|
231,744
(5)
|
826,949
|
|
Stephen C. Mackey
|
27,087
|
|
—
|
|
10,000
|
|
37,087
|
|
201,776
(5)
|
238,863
|
|
All Directors and Executive Officers as a Group (16 Persons)
|
3,583,770
|
|
172,145
|
|
44,602
|
|
3,800,517
(6)
|
2,099,679
|
5,900,196
|
|
(1)
|
Includes shares for which investment power is shared as follows: Mr. Chi — 119,950; all directors and executive officers as a group — 119,950.
|
(2)
|
Includes shares held in our Profit Sharing and Savings Plan as follows: Mr. Sinks — 10,616; Mr. Mattke — 866; and all executive officers as a group — 14,487. Also includes shares held by a family trust affiliated with: Mr. Arrigoni — 20,000; Mr. Culver — 40,000; and all directors and executive officers as a group — 157,658.
|
(3)
|
Includes:
|
•
|
Shares underlying restricted stock units (“RSUs”) which were issued to our non-management directors pursuant to our former RSU award program (See “Compensation of Directors — Former RSU Award Program” in our 2015 Proxy Statement filed with the SEC on March 24, 2015 (“our 2015 Proxy Statement”)) and could be settled in shares of Common Stock within 60 days of the record date as follows: Mr. Jastrow — 3,050 and Mr. Lehman — 3,050. Directors have neither voting nor investment power over the shares underlying any of these units.
|
•
|
19,769 shares underlying RSUs which are held by Mr. Jastrow under the Deposit Share Program for Non-Employee Directors under our 2002 Stock Incentive Plan (See “Compensation of Directors — Former Deposit Share Program” in our 2015 Proxy Statement) and could be settled in shares of Common Stock within 60 days of the record date. Mr. Jastrow has neither voting nor investment power over the shares underlying any of these units.
|
•
|
6,733 shares of restricted stock that Mr. Jastrow held under the Deposit Share Program for Non-Employee Directors under our 1991 and 2002 Stock Incentive Plans. Mr. Jastrow has sole voting power and no investment power over these shares.
|
•
|
2,000 shares held by Mr. Jastrow under our 1993 Restricted Stock Plan for Non-Employee Directors. (See “Compensation of Directors — Former Restricted Stock Plan” in our 2015 Proxy Statement). Mr. Jastrow has sole voting power and no investment power over these shares.
|
(4)
|
Represents share equivalents held under our Deferred Compensation Plan for Non-Employee Directors (See “Compensation of Directors — Deferred Compensation Plan and Annual Grant of Share Units” below) over which the directors have neither voting nor investment power.
|
(5)
|
Represents shares underlying stock-settled RSUs that cannot be settled in Common Stock within 60 days of the record date. For all directors and executive officers as a group — 1,728,184.
|
(6)
|
Individual directors and executive officers, as well as directors and executive officers as a group, beneficially own less than 1% of the shares of Common Stock outstanding, as of June 2, 2017.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
•
|
the terms of the contract or transaction are fair and equitable, at arm’s length and are not detrimental to our interests;
|
•
|
the existence and nature of the interests of the officer are fully disclosed to and approved by the Audit Committee; and
|
•
|
the interested officer has not participated on our behalf in the consideration, negotiation or approval of the contract or transaction.
|
•
|
was an executive officer of a charity to which we made contributions, or
|
•
|
was an executive officer or member of a law firm or investment banking firm providing services to us, or
|
•
|
received any direct compensation from us other than as a director, or if during such period a member of the director’s immediate family received compensation from us.
|
Item 14.
|
Principal Accountant Fees and Services.
|
|
2016
|
|
2015
|
||||
Audit Fees
|
$
|
2,135,000
|
|
|
$
|
2,206,264
|
|
Audit-Related Fees
|
149,838
|
|
|
35,500
|
|
||
Tax Fees
|
36,074
|
|
|
37,000
|
|
||
All Other Fees
|
89,970
|
|
|
2,970
|
|
||
Total Fees
|
$
|
2,410,882
|
|
|
$
|
2,281,734
|
|
Item 15.
|
Exhibits.
|
Exhibit
Number
|
|
Description of Exhibit
|
31.1
|
|
Certification of CEO under Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
Certification of CFO under Section 302 of the Sarbanes-Oxley Act of 2002
|
/s/ Patrick Sinks
|
|
Patrick Sinks
|
|
President, Chief Executive Officer and Director
|
|
1 Year MGIC Investment Chart |
1 Month MGIC Investment Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions