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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 | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 20.55 | 0 | 12:00:00 |
Filed by the Registrant [X]
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Filed by a Party other than the Registrant [ ]
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Check the appropriate box:
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[ ] Preliminary Proxy Statement
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[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X] Definitive Proxy Statement
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[ ] Definitive Additional Materials
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[ ] Soliciting Material under §240.14a-12
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MGIC Investment Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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[X]
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No fee required.
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[ ]
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 23, 2020
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Our Proxy Statement and 2019 Annual Report to Shareholders are available at https://materials.proxyvote.com/552848. Your vote is very important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote your shares via telephone, online, or by completing, signing, dating and returning your proxy card or voting instruction form in the pre-addressed envelope provided. No postage is required if your proxy card or voting instruction form is mailed in the United States. If you attend the meeting and are a holder of record entitled to vote, you may vote in person, even if you have previously voted by telephone, online or by mailing your proxy card. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares.
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(1)
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Election of the thirteen directors named in the Proxy Statement, each for a term ending at the Annual Meeting in 2021;
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(4)
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Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020; and
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By Order of the Board of Directors
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Paula C. Maggio, Secretary
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March 20, 2020
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YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY VOTE VIA TELEPHONE, ONLINE
OR BY COMPLETING, SIGNING, DATING AND RETURNING
YOUR PROXY CARD OR VOTING INSTRUCTION FORM
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Leadership Transition
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2019 Grants of Plan-Based Awards
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Outstanding Equity Awards at 2019 Fiscal Year-End
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2019 Stock Vested
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Pension Benefits at 2019 Fiscal Year-End
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2019 CEO Pay Ratio
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Delinquent Section 16(a) Reports
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Item 3 - Approval of the MGIC Investment Corporation 2020 Omnibus Incentive Plan
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Proposed Terms of the 2020 Omnibus Incentive Plan
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Shareholder Vote Required
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Item 4 – Ratification of Appointment of Independent Registered Public Accounting Firm
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Appendix A – Glossary of Terms and Acronyms
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Appendix B – Explanation and Reconciliation of Non-GAAP Measures
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Appendix C – MGIC Investment Corporation 2020 Omnibus Incentive Plan
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Appendix C - 1
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Proposal
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Voting Matter
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More Information
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Board Vote Recommendation
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1
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Election of Thirteen Director Nominees
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Page 26
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FOR each Director Nominee
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2
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Advisory Vote on Executive Compensation
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Page 29
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FOR
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3
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Approval of 2020 Omnibus Incentive Plan
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Page 68
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FOR
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4
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Ratification of Independent Registered Public Accounting Firm
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Page 78
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FOR
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(1)
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This is a non-GAAP measure of performance. For a description of how we calculate this measure and for a reconciliation of this measure to its nearest comparable GAAP measure, see Appendix B to this Proxy Statement.
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(2)
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Direct new insurance written (before the effects of reinsurance).
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(3)
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Direct primary insurance in force (before the effects of reinsurance), which is an important driver of our future premiums.
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Business Strategy
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Results
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Capital Position - Manage and deploy capital to optimize creation of shareholder value.
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»
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Executed a $316 million insurance linked note transaction, our second such post-financial crisis transaction, which provides an alternative source of capital, and enables the Company to enhance its returns and better manage its risk profile.
Increased dividends from MGIC to our holding company from $220 million in 2018 to $280 million in 2019.
Re-started the payment of quarterly dividends by our holding company, after having suspended such payments during the financial crisis.
Repurchased 8.7 million shares of our common stock, returning $114 million to shareholders.
MGIC received an upgrade in its financial strength rating from Moody's Investors Service (from Baa2 to Baa1).
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Developing Co-Workers - Develop and diversify the talents of co-workers.
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»
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Executed on the Company's succession plan for key roles in the organization, including Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Chief Risk Officer, promoting all such officers from within the organization.
Delivered training workshops designed to build strategic capabilities which enhance performance.
Continued to enhance career developments, talent analytics and financial health capabilities for employees.
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Role in Housing Finance Industry - Preserve and expand the role of the Company and private mortgage insurance in housing finance policy.
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Held leadership roles in key trade association working groups.
Continued to enhance the reputation of the Company and the industry relative to changing housing finance policy and a broader role for private mortgage insurance.
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2019 Top 100 Workplaces in Southeastern Wisconsin winner (Journal Sentinel, Inc.). MGIC has been the recipient of this award for ten consecutive years, one of only 13 companies to have achieved this.
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2018 Well Workplace Platinum Award (Wellness Council of America). The Platinum Award is the highest honor presented and is awarded to an organization recognized for its leadership and innovative commitment to the health and well-being of its employees. MGIC was one of 10 companies nationwide to receive the Platinum Award.
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Eddy Award (Pension & Investments). MGIC was recognized with a 2019 first place award for “Pre-Retirement Preparation for Employees.”
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Name
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Age(1)
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Director Since
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Primary Occupation
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Independent
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Committee
Memberships
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Daniel A. Arrigoni
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69
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2013
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Former President and CEO
of U.S. Bank Home Mortgage Corp.
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ü
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• Audit
• Risk Management
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C. Edward Chaplin
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63
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2014
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Corporate Director; Former President and CFO of MBIA Inc.
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ü
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• Risk Management
• Securities Investment
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Curt S. Culver
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67
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1999
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Chairman of the Board
Former CEO of MGIC Investment Corp.
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• Executive
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Jay C. Hartzell ª
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50
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2019
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Dean of the McCombs School of Business at the University of Texas at Austin
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ü
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• Audit
• Risk Management |
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Timothy A. Holt ª
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66
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2012
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Corporate Director; Former SVP and Chief Investment Officer of Aetna, Inc.
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ü
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• Audit
• Securities Investment (C)
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Kenneth M. Jastrow, II
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72
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1994
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Lead Independent Director
Corporate Director and Private Investor; Former Chairman & CEO
of Temple-Inland Inc.
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ü
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• Executive
• MDNG * (C)
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Jodeen A. Kozlak
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56
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2018
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Founder and CEO of Kozlak Capital Partners, LLC. Former Global SVP of Human Resources of Alibaba Group
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ü
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• MDNG *
• Securities Investment
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Michael E. Lehman ª
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69
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2001
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Special Advisor to the Chancellor of the University of Wisconsin and Interim Chief Operating Officer of the Wisconsin School of Business; Former EVP and CFO of Sun Microsystems, Inc.
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ü
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• Audit (C)
• MDNG *
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Melissa B. Lora ª
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57
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2018
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Corporate Director; Former President of Taco Bell International
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ü
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• Audit
• MDNG* |
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Timothy J. Mattke
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44
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2019
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CEO of MGIC Investment Corp.
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• Executive (C)
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Gary A. Poliner
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66
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2013
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Corporate Director; Former President of The Northwestern Mutual Life Insurance Company
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ü
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• Audit
• Risk Management (C)
• Securities Investment
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Sheryl L. Sculley ª
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67
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2019
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Corporate Director, Former City Manager of the City of San Antonio, Texas
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ü
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• Audit
• Securities Investment |
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Mark M. Zandi
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60
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2010
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Chief Economist of Moody's
Analytics, Inc.
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ü
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• Risk Management
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ª
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=
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Audit Committee Financial Expert
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*
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=
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Management Development, Nominating and Governance Committee
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C
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Committee Chair
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(1)
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As of March 6, 2020
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MGIC Investment Corporation
P.O. Box 488
MGIC Plaza, 270 East Kilbourn Avenue
Milwaukee, WI 53201
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By Telephone — Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States, or 1-718-921-8500 from other countries, and follow the instructions. Have your proxy card available when you call.
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Online — Access “www.voteproxy.com” and follow the on-screen instructions. Have your proxy card available when you access the web page.
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By Mail — You may submit a proxy by completing, signing and dating your proxy card and mailing it in the accompanying pre-addressed envelope.
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By Telephone — Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States, or 1-718-921-8500 from other countries, and follow the instructions. Have your proxy card available when you call.
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Online — Access “www.voteproxy.com” and follow the on-screen instructions. Have your proxy card available when you access the web page.
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By Mail — You may submit a proxy by completing, signing and dating your proxy card and mailing it in the accompanying pre-addressed envelope.
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Name
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Shares Beneficially Owned
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Percent of Class
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The Vanguard Group, Inc.(1)
100 Vanguard Boulevard, Malvern, PA 19355 |
35,323,266
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10.4
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%
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BlackRock, Inc.(2)
55 East 52nd Street, New York, NY 10055 |
17,966,749
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5.3
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%
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(1)
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The Vanguard Group, Inc. reported ownership as of December 31, 2019, on behalf of itself and certain subsidiaries. It reported that it had sole dispositive power for 35,134,288 shares and shared dispositive power for 188,978 shares. It further reported that it had sole voting power for 184,013 shares and shared voting power for 54,502 shares.
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(2)
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BlackRock, Inc. reported ownership as of December 31, 2019, on behalf of itself and certain subsidiaries. It reported that it had sole dispositive power for 17,966,749 shares and shared dispositive power for no shares. It further reported that it had sole voting power for 16,459,007 shares and shared voting power for no shares.
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Name of Beneficial Owner
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Common Stock Owned Directly(1)
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Common Stock Owned Indirectly(2)
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Restricted Stock and Common Stock Underlying RSUs(3)
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Total Number of Shares Beneficially Owned
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Director Deferred Stock Units / Additional Underlying Units
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Total Shares Beneficially
Owned Plus Underlying Units |
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Daniel A. Arrigoni
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—
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25,000
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—
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25,000
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7,394(4)
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32,394
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Cassandra C. Carr
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5,000
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—
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—
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5,000
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30,711(4)
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35,711
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C. Edward Chaplin
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10,000
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—
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—
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10,000
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50,727(4)
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60,727
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Curt S. Culver
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11,504
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1,238,818
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—
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1,250,322
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7,394(4)
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1,257,716
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Jay C. Hartzell
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—
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—
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—
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—
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9,240(4)
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9,240
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Timothy A. Holt
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20,000
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—
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—
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20,000
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75,217(4)
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95,217
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Kenneth M. Jastrow, II
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1,146
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—
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31,552
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32,698
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37,947(4)
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70,645
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Jodeen A. Kozlak
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—
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—
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—
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—
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13,322(4)
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13,322
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Michael E. Lehman
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26,939
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—
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3,050
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29,989
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8,794(4)
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38,783
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Melissa B. Lora
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—
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—
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—
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—
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22,474(4)
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22,474
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Gary A. Poliner
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—
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—
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—
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—
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126,372(4)
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126,372
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Sheryl L. Sculley
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—
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—
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—
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—
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9,240(4)
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9,240
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Mark M. Zandi
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—
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—
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—
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—
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49,477(4)
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49,477
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Timothy M. Mattke
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327,321
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873
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—
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328,194
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615,600(5)
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943,794
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Salvatore A. Miosi
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169,602
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2,416
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—
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172,018
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483,600(5)
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655,618
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Nathaniel H. Colson
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4,875
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—
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—
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4,875
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135,782(5)
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140,657
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James J. Hughes
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—
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178,759
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—
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178,759
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371,100(5)
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549,859
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Paula C. Maggio
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3,712
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—
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—
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3,712
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241,334(5)
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245,046
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Patrick Sinks(7)
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632,946
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10,706
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—
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643,652
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658,000(5)
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1,301,652
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Stephen Mackey
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56,007
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—
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—
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56,007
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—
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56,007
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All Directors and Executive Officers as a Group (20 Persons)
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617,358
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1,445,866
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34,602
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2,097,826(6)
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2,506,925
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4,604,751
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(1)
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Includes shares for which investment power is shared as follows: all directors and executive officers as a group — 29,389.
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(2)
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Includes:
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•
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Shares held in our Profit Sharing and Savings Plan as follows: Mr. Sinks — 10,706; Mr. Mattke — 873; Mr. Miosi — 2,416; and all executive officers as a group — 3,289 (Mr. Sinks was not an executive officer as of March 6, 2020).
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•
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Shares held by a family trust affiliated with: Mr. Arrigoni — 25,000; Mr. Culver — 981,755; Mr. Hughes — 178,759; and all directors and executive officers as a group — 1,185,514.
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•
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Shares held by a Foundation for which Mr. Culver has no pecuniary interest but shares voting and dispositive power — 257,063.
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(3)
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Includes:
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•
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Shares underlying RSUs that 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.
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19,769 shares underlying RSUs that 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.
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•
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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.
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•
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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.
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(4)
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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. For all directors as a group — 448,309.
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(5)
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Represents shares underlying stock-settled RSUs that cannot be settled in Common Stock within 60 days of the record date. For all executive officers as a group — 2,058,616.
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(6)
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As of March 6, 2020, no individual director or executive officer beneficially owned more than 1% of the Common Stock outstanding, and all directors and executive officers as a group beneficially owned less than 1% of the shares of Common Stock outstanding.
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(7)
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Reflects ownership as of retirement date of January 31, 2020, adjusted to reflect known March 4, 2020 vesting of RSUs.
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•
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was an executive officer of a charity to which we made contributions,
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•
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was an executive officer or member of a law firm or investment banking firm providing services to us, or
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•
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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.
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•
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presiding at all meetings of the Board at which the Chairman is not present;
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•
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having the authority to call and lead executive sessions of directors without the presence of any director who is an officer (or if determined by the Board, a former officer) (the Board meets in executive session after at least two Board meetings each year);
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•
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serving as a conduit between the CEO and the independent directors to the extent requested by the independent directors;
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•
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serving as a conduit for the Board’s informational needs, including proposing topics for Board meeting agendas; and
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•
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being available, if requested by major shareholders, for consultation and communication.
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Skills and Experience
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Relevance to MGIC
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Board Composition
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Accounting
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We operate in a complex financial and regulatory environment.
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Chief Executive Officer
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Experience at the highest level of an organization provides expertise that will foster participation in the development and implementation of the Company's business strategies.
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Financial
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Knowledge of finance or financial reporting and experience with debt and capital markets transactions is important to executing our business strategies.
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Human Resources
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As a financial services firm, human capital represents an important asset. Knowledge of human resources matters is important to executing our business strategies.
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Insurance
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Insurance industry experience provides understanding of our business and strategies.
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Investments
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We manage a large and long-term investment portfolio to support our obligations to pay future claims of our policyholders.
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Public Company Executive Experience
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As a complex, publicly-held company, practical insight into shareholder concerns and governance matters is important.
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Regulatory / Public Affairs
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Our business requires compliance with a variety of federal, state and GSE requirements, and involves relationships with various government and non-government organizations.
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Housing Markets / Risk Management
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A main component of our business involves taking and managing risk associated with the housing markets.
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Technology / Cyber
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We continue to undergo a business process transformation involving upgrades to our technology and to manage our cybersecurity risks.
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•
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The Management Development, Nominating and Governance Committee evaluates the incentives and risks associated with our compensation philosophy and programs, and oversees operational risks related to human resources.
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•
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The Risk Management Committee assists the Board in overseeing the Company's enterprise risk management framework, including the Company's risk appetite on an enterprise-wide basis, and in overseeing the following key Company risks: Mortgage Credit; Capital Risk related to the required amount of capital; non-investment portfolio counterparty risk; model risk; operational risk related to underwriting, servicing, claims, risk and sales; and macroeconomic business risk.
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•
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The Securities Investment Committee oversees risks related to our investment portfolio and capital management, which includes market risk; investment portfolio counterparty risk; capital risk related to our capital structure, access to capital and credit rating; and liquidity risk.
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•
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The Audit Committee oversees our processes for assessing risks (other than risks overseen by other committees) and the effectiveness of our system of internal controls. In performing this function, the Audit Committee considers information from our independent registered public accounting firm and internal auditors and discusses relevant issues with management, the Internal Audit Director and the independent registered public accounting firm. The Audit Committee assists the Board in overseeing compliance risk; cybersecurity risk; and operational risk related to information systems, finance and legal matters. In addition, the Audit Committee meets with the Chief Risk Officer and the Chairman of the Risk Management Committee to discuss and review in a general manner the Risk Management Committee's oversight of the Company's enterprise risk management framework.
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SHERYL L. SCULLEY
Director Since: 2019
Age: 67
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Committees: Audit Committee; Securities Investment Committee
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Sheryl L. Sculley is the former City Manager of the City of San Antonio Texas, the Chief Executive Officer of the municipal corporation, a position she held from 2005 until her retirement in April 2019. Prior to serving in that role, Ms. Sculley had been the Assistant City Manager (Chief Operating Officer) of Phoenix, Arizona from 1989 until 2005, the City Manager (Chief Executive Officer) of Kalamazoo, Michigan from 1984 until 1989 and in other city management roles before then.
Ms. Sculley’s experience as a Chief Executive Officer leading large municipalities provides our Board with expertise on management, investment, financial and human resources matters.
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MARK M. ZANDI
Director Since: 2010
Age: 60
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Committees: Risk Management Committee
|
|
Mark M. Zandi, since 2007, has been Chief Economist of Moody’s Analytics, Inc., where he directs economic research. Moody’s Analytics is a leading provider of economic research, data and analytical tools. It is a subsidiary of Moody’s Corporation that is separately managed from Moody’s Investors Service, the rating agency subsidiary of Moody’s Corporation. Dr. Zandi is a trusted adviser to policymakers and an influential source of economic analysis for businesses, journalists and the public, and he frequently testifies before Congress on economic matters.
Dr. Zandi, with his economics and residential real estate industry expertise, brings to the Board a deep understanding of the economic factors that shape our industry. In addition, Dr. Zandi has expertise in the legislative and regulatory processes relevant to our business.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE THIRTEEN NOMINEES. SIGNED PROXY CARDS AND VOTING INSTRUCTION FORMS WILL BE VOTED FOR THE NOMINEES UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD OR VOTING INSTRUCTION FORM.
|
Compensation Component
|
|
Compensation
|
Annual Retainer – Chairman of the Board
|
|
$250,000, which may be elected to be deferred and either converted into cash-settled share units or credited to a bookkeeping account to which interest is credited.
|
Annual Retainer – Non-Chairman Directors
|
|
$150,000, which may be elected to be deferred and either converted into cash-settled share units or credited to a bookkeeping account to which interest is credited.
|
Annual Retainer – Equity
|
|
$100,000 in cash-settled RSUs 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 other committees(1) |
Annual Retainer – Committee Member
|
|
$15,000 for Audit Committee
$5,000 for other committees(1) |
Meeting Fees (after 5th meeting)(2)
|
|
$5,000 for Board meetings
$3,000 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 but may attend committee meetings.
|
(2)
|
After a non-management director attends five Board meetings in a given year, he or she is paid $5,000 for each subsequent Board meeting attended in that year. After a non-management director attends five meetings of a particular committee in a given year, he or she is paid $3,000 for each subsequent meeting of that committee attended in that year. However, directors are paid for attendance at only one committee meeting on any given day, regardless of the number of meetings attended on that day. Meetings of the Board of MGIC (or Committees of its Board) that are not held in conjunction with meetings of the Board of the Company (or Committees of its Board) are counted to determine meeting fees.
|
(3)
|
Each of our non-employee directors satisfies this guideline.
|
Name
|
|
Fees Earned or
Paid in Cash ($)(1) |
|
Total Stock Awards
($)(2) |
|
Total
($) |
Daniel A. Arrigoni
|
|
202,000
|
|
100,000
|
|
302,000
|
Cassandra C. Carr
|
|
165,000
|
|
100,000
|
|
265,000
|
C. Edward Chaplin
|
|
168,000
|
|
100,000
|
|
268,000
|
Curt S. Culver
|
|
255,000
|
|
100,000
|
|
355,000
|
Jay C. Hartzell
|
|
42,500
|
|
26,600
|
|
69,100
|
Timothy A. Holt
|
|
206,000
|
|
100,000
|
|
306,000
|
Kenneth M. Jastrow, II
|
|
205,000
|
|
100,000
|
|
305,000
|
Jodeen A. Kozlak
|
|
168,000
|
|
100,000
|
|
268,000
|
Michael E. Lehman
|
|
206,000
|
|
100,000
|
|
306,000
|
Melissa B. Lora
|
|
202,000
|
|
100,000
|
|
302,000
|
Gary A. Poliner
|
|
211,000
|
|
100,000
|
|
311,000
|
Sheryl L. Sculley
|
|
42,500
|
|
26,600
|
|
69,100
|
Mark M. Zandi
|
|
160,000
|
|
100,000
|
|
260,000
|
(1)
|
The following directors elected to defer certain fees shown in this column into share units as described under " — Non-Employee Director Compensation Program — Deferred Compensation Plan and Annual Grant of Share Units" above: Ms. Kozlak elected to defer $61,333 of the fees and received 4,591 share units; and Mr. Poliner elected to defer $26,000 of the fees and received 1,932 share units.
|
(2)
|
The amount shown in this column for each director represents the grant date fair value of the annual share unit granted to non-employee directors in 2019 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 “— Non-Employee Director Compensation Program — Deferred Compensation Plan and Annual Grant of Share Units” above for more information about these grants.
|
Name
|
Title (as of December 31, 2019)
|
Timothy J. Mattke
|
Chief Executive Officer
|
Salvatore A. Miosi
|
President and Chief Operating Officer
|
Nathaniel H. Colson
|
Executive Vice President and Chief Financial Officer
|
James J. Hughes
|
Executive Vice President – Sales and Business Development*
|
Paula C. Maggio
|
Executive Vice President, General Counsel and Secretary
|
Patrick Sinks
|
Vice Chairman (July 25, 2019 – January 31, 2020) and Former President and Chief Executive Officer (stepped down from position July 25, 2019)
|
Stephen C. Mackey
|
Former Executive Vice President and Chief Risk Officer (through May 6, 2019)
|
•
|
Adjusted net operating income per diluted share for 2019 was $1.84, up 3.3% from 2018 ($1.78), with adjusted net operating income of $669.7 million, up slightly from 2018 ($668.7 million).(1) Adjusted net operating income was a component of ROE, one of the financial performance measures that determined payouts under our 2019 annual bonus program, as described below under "Components of our Executive Compensation Program – Annual Bonus."
|
|
•
|
ROE for 2019 continued to be strong at 18.1%.(1)
|
|
•
|
New insurance written was $63.4 billion in 2019, up more than 25% from 2018 ($50.5 billion), and was one of the financial metrics that determined payouts under our 2019 bonus program. Aided in part by our new insurance written, our book of direct primary insurance in force, an important driver of our future revenue, grew by more than 6% in 2019.
|
|
•
|
Our GAAP book value per share grew by more than 23% in 2019. Growth in adjusted book value per share is used to determine vesting of our long-term equity awards. For a reconciliation of GAAP book value per share to the adjusted book value per share used to determine vesting of our long-term equity awards, see Appendix B.
|
|
(1) Adjusted net operating income and adjusted 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 Appendix B. For purposes of our 2019 bonus program, ROE is calculated as adjusted net operating income, divided by beginning shareholders' equity, excluding accumulated other comprehensive income (loss).
|
|
(1) Direct new insurance written (before the effects of reinsurance).
|
|
(2) For a reconciliation of the book value per share shown above to the book value per share used to determine vesting of our long-term equity awards, see Appendix B.
|
(1)
|
For purposes of the bonus calculation, ROE is calculated as adjusted net operating income divided by beginning shareholders' equity, excluding accumulated other comprehensive income (loss). Adjusted net operating income and adjusted book value per share are non-GAAP financial measures. For a description of how we calculate these measures and for a reconciliation of these measures to their nearest comparable GAAP measures, see Appendix B to this Proxy Statement.
|
Stock Ownership Guidelines
|
è
|
Our stock ownership guidelines require our CEO to own Company stock equal in value to at least six times his base salary, and require our other NEOs to own Company stock equal in value to at least three times their base salaries. See "Other Aspects of our Executive Compensation Program" below for more information about the guidelines.
|
Post-Vesting
Stock Holding Requirements
|
è
|
Our NEOs and other executive officers are required to hold, for one year after vesting, the lower of 25% of shares that vest under equity awards and 50% of the shares that were received by the officer after taking account of shares withheld to cover taxes. Apart from what is required, we have had a culture of stock retention by senior executives. Excluding shares withheld from equity awards for income tax withholding, none of our current NEOs has sold our stock while an NEO. Upon Mr. Sinks stepping down from his role as our CEO, he sold a portion of his holdings in our stock; however, at year-end, his holdings still amounted to more than twelve times his base salary.
|
No Hedging, Pledging or
10b5-1 Plans
|
è
|
Our policies prohibit directors, NEOs, other officers and certain employees from entering into hedging transactions referencing the Company’s equity securities, holding Company securities in a margin account, or pledging Company securities as collateral for a loan. They also prohibit the use by those individuals of plans created pursuant to Rule 10b5-1 of the Securities Exchange Act which may otherwise have allowed such persons to sell our stock while in possession of material non-public information about us. For more information, see "Other Aspects of our Executive Compensation Program – Hedging, Pledging and 10b5-1 Plan Prohibitions" below.
|
High Percentage of Performance-Based Compensation
|
è
|
86% of our former CEO's actual 2019 TDC and 62% of our current CEO's actual 2019 TDC was tied to achievement of pre‑set performance goals. Excluding the time-vested long-term equity awards granted to our current CEO upon his election to that position (discussed below under "Leadership Transition"), which are not part of our standard long-term equity program, 80% of our current CEO's actual 2019 TDC was tied to achievement of pre-set performance goals.
|
Limited Perquisites
|
è
|
Our perquisites are very modest, ranging between approximately $800 and $7,600 in 2019 for our current NEOs.
|
Effective Use
of Equity Compensation with Low Burn Rate
and Dilution
|
è
|
The total equity awards granted to all participants under our 2015 Omnibus Incentive Plan in each of 2019 and January 2020 represented between approximately 0.5% and 0.6% of our outstanding shares at the prior December 31. The Company's dilution from outstanding awards was in the 10th percentile among all companies in the Benchmarking Peer Group (calculated as outstanding equity awards on December 31, 2019, as a percentage of weighted average total shares outstanding). Based on a “burn rate” methodology that uses the average of the total awards granted (after applying a multiple of 2.5 for RSUs versus options) and the weighted average number of shares outstanding during each of the last three completed years, our three-year average annual “burn rate” for 2017-2019 was approximately 1.2%.
|
Limited Change in Control Benefits
|
è
|
“Double trigger” is generally required for any benefits to be paid.
Equity awards may vest upon a change in control only if the Committee determines that the awards will not be assumed or replaced.
Cash severance does not exceed 2 times base salary plus bonus plus retirement plan accrual.
There is no excise tax gross-up provision.
|
Employment Agreements
|
è
|
None; we only provide the limited provisions referred to above that are effective after a change in control.
|
“Clawback” Policy
|
è
|
Our “clawback” policy applies to cash incentive compensation as well as equity award compensation received by our NEOs and other executive officers.
|
Compensation Consultant
|
è
|
The Compensation Consultant is retained by the Committee and performs no services for the Company, other than the consulting services to the Committee regarding executive compensation and non-employee director compensation.
|
Compensation Risk Evaluation
|
è
|
Annually, the Committee reviews an executive compensation risk evaluation designed to ensure that our compensation programs do not motivate excessive risk-taking and are not reasonably likely to have a material adverse effect on the Company.
|
Omnibus Incentive Plan
|
è
|
Our 2015 Omnibus Incentive Plan, approved by shareholders, and our 2020 Omnibus Incentive Plan, proposed for approval by shareholders at the 2020 meeting of shareholders, contain the following provisions:
• 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 and no exchange of underwater stock options for another award or for cash, without shareholder approval;
• No inclusion of reload provisions in any stock option grant;
• No payment of dividends on performance-vested RSUs before they are vested;
• No payment of dividends on time-vested RSUs before they are vested (2020 Plan only);
• 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; and
• No Committee discretion to accelerate vesting of awards, except under certain limited instances like death, disability and retirement.
|
•
|
Attract and retain high-quality executives. We want a competitive pay opportunity that provides for:
|
◦
|
base salaries that are near the median of our Benchmarking Peers, and
|
◦
|
bonus and long-term equity awards that, when performance is strong, move TDC above the median of our Benchmarking Peers to motivate and reward strong performance.
|
•
|
Align executive compensation with long-term shareholder interests. We align compensation and long-term shareholder interests by:
|
◦
|
linking executive compensation to Company and executive performance; and
|
◦
|
paying a substantial portion of TDC in:
|
§
|
bonuses that are at-risk and are based on specific goals that align payouts with Company performance, with quantitative financial metrics accounting for 75% of the bonus calculation and qualitative business goals, directly related to our business strategies, accounting for 25% of the bonus calculation; and
|
§
|
long-term equity awards, with vesting based on a three-year quantitative performance goal that aligns payouts with Company performance and whose value directly reflects our stock price. All of the long-term equity awards granted to our then-NEOs in our standard granting cycle in each of January 2018, 2019 and 2020, were 100% performance-vested and only vest after a three-year performance period. As described below under "Leadership Transition," in July 2019, certain NEOs received a one-time grant of RSUs that time-vest only after a three-year employment period.
|
•
|
Reviewing and approving bonus and equity compensation goals and objectives;
|
•
|
Evaluating performance in light of these goals and objectives; and
|
•
|
Evaluating the competitiveness of the CEO’s total compensation package.
|
•
|
An evaluation of NEO compensation compared to Benchmarking Peers;
|
•
|
Advice related to compensation adjustments made in connection with our leadership transition;
|
•
|
Advice about the annual bonus plan, including the goals and target performance incorporated into the formula that is used to determine payouts;
|
•
|
Advice about the long-term equity incentive program, including the level of awards granted under the program and the vesting provisions;
|
•
|
Advice regarding “best practice” compensation practices;
|
•
|
Review and analysis of our peer group used to evaluate our executive compensation;
|
•
|
Simulations of quantitative pay-for-performance models and review of policy statements of a leading proxy governance firm;
|
•
|
An evaluation of the costs and provisions of change in control benefits for executives;
|
•
|
Review of drafts of the CD&A and related compensation tables for the Proxy Statement; and
|
•
|
An evaluation of compensation for the non-employee directors compared to our Benchmarking Peers.
|
MGIC Peer Group
|
|
Mortgage Insurer - Direct Competitor(1)
|
Direct Exposure to Residential Real Estate Market
|
Industry in which we Compete for Talent
|
Chose us as a Peer
|
Business
|
Ambac Financial Group, Inc.
|
|
|
X
|
X
|
X
|
Financial Guaranty Insurer
|
Arch Capital Group Ltd.
|
|
X
|
X
|
X
|
|
Includes Mortgage Insurer
|
Assured Guaranty Ltd.
|
|
|
X
|
X
|
X
|
Financial Guaranty Insurer
|
Essent Group Ltd.
|
|
X
|
X
|
X
|
X
|
Mortgage Insurer
|
Fidelity National Financial Inc.
|
|
|
X
|
X
|
|
Title Ins & Other R.E. Services
|
First American Fin'l Corp.
|
|
|
X
|
X
|
|
Title Ins & Other R.E. Services
|
Flagstar Bancorp Inc.
|
|
|
X
|
X
|
|
Mortgage Orig & Svg; Banking
|
Genworth Financial Inc.
|
|
X
|
X
|
X
|
X
|
Includes Mortgage Insurer
|
MBIA Inc.
|
|
|
X
|
X
|
X
|
Financial Guaranty Insurer
|
NMI Holdings Inc.
|
|
X
|
X
|
X
|
X
|
Mortgage Insurer
|
Ocwen Financial Corp.
|
|
|
X
|
X
|
X
|
Mortgage Svg & Lending
|
PennyMac Fin'l Services Inc.
|
|
|
X
|
X
|
X
|
Mortgage Svg & Lending
|
Radian Group Inc.
|
|
X
|
X
|
X
|
X
|
Mortgage Insurer
|
(1)
|
Parent companies of direct competitors whose overall results are principally or significantly impacted by these competitors.
|
(1)
|
Represents the annualized 2019 TDC for our current CEO for the period of time he was CEO; 2019 TDC for our former CEO; and 2018 TDC for our Benchmarking Peer Group because that was the latest TDC information available when this report was prepared.
|
•
|
The Committee reaffirmed the Company's fundamental compensation program, consisting of a base salary administered within a base salary range with a midpoint near the median level of an executive's Benchmarking Peer Group counterparts, an annual incentive opportunity based on objective financial and operational performance criteria, and long-term equity awards consisting of performance-based RSUs.
|
•
|
Effective upon their promotions, the Committee adjusted base salaries and maximum potential annual bonuses for Messrs. Mattke, Miosi and Colson, to be more competitive with their new roles: Salaries and maximum bonuses were increased to $775,000 and 3x, $620,000 and 2.75x, and $275,000 and 1.8x for Messrs. Mattke, Miosi and Colson, respectively.
|
•
|
In connection with the leadership transition, the Committee also granted, to the following executives, a one-time award of RSUs that cliff vest in July 2022, which are designed for retention and to provide additional alignment with shareholders: Mr. Mattke – 75,000 RSUs; Mr. Miosi – 60,000 RSUs; Mr. Colson – 20,000 RSUs and Mr. Hughes – 37,500 RSUs.
|
•
|
As part of our succession plan, Mr. Sinks played a critical role by acting as Vice Chairman during his tenure in that position. This helped to ensure a smooth transition of his prior responsibilities as CEO to Mr. Mattke. For the five months that Mr. Sinks served as our Vice Chairman during 2019, he continued to participate in our executive compensation program at the same base salary and potential annual bonus levels.
|
Maximum Bonus Opportunity (Multiple of Base Salary)
|
|||
Executive
|
Before July 2019
Leadership Transition
|
After July 2019
Leadership Transition
|
Prorated
|
Timothy J. Mattke
|
2.25
|
3.00
|
2.56
|
Salvatore A. Miosi
|
2.25
|
2.75
|
2.46
|
Nathaniel H. Colson
|
0.60
|
1.80
|
1.10
|
James J. Hughes
|
2.25
|
2.25
|
2.25
|
Paula C. Maggio
|
1.80
|
1.80
|
1.80
|
Patrick Sinks
|
3.00
|
3.00
|
3.00
|
CEO Maximum Bonus Opportunity (Multiple of Base Salary)
|
|||
|
Benchmarking Peer Group (source: 2019 Proxy Statements)
|
||
MGIC
|
25th percentile
|
Median
|
75th percentile
|
3.00
|
2.63
|
3.00
|
3.64
|
2019 Bonus Percentage
|
|
|
|
|
|
|||||
|
|
|
|
|
Maximum Possible Score (Weight)
|
|
Weighted Score
|
|||
|
2019 Performance Levels
|
Actual 2019
|
|
|||||||
|
Threshold
|
Target
|
Maximum
|
Score
|
||||||
Financial Performance Goals:
|
|
|
|
|
|
|
|
|||
Return on Equity
|
10.0%
|
13.5%
|
21.0%
|
18.1%
|
60
|
|
48.4
|
|
|
|
New Insurance Written (billions)
|
$42.0
|
$52.0
|
$55.0
|
$64.9
|
40
|
|
40.0
|
|
|
|
Total
|
|
|
|
|
100
|
%
|
88.4
|
|
|
|
Times: Total Weight of Financial Performance Goals
|
|
|
|
|
X 75%
|
|
66.3
|
%
|
||
|
|
|
|
|
|
|
|
|||
Business Objectives:
|
|
|
|
|
|
|
|
|||
Capital Position
|
For a discussion of performance against these business objectives, see "Performance Against Business Objectives"
|
|
|
|
||||||
Manage Role of MI in Housing Policy
|
|
|
|
|||||||
Develop Co-Workers
|
|
|
|
|||||||
Total
|
|
|
|
|
100
|
%
|
80.0
|
|
|
|
Times: Total Weight of Business Objectives
|
|
|
|
|
X 25%
|
|
20.0
|
%
|
||
2019 Bonus Percentage
|
|
|
86.3
|
%
|
Business Objective
|
|
Results
|
Capital Position - Manage and deploy capital to optimize creation of shareholder value.
|
»
|
Executed a $316 million insurance linked note transaction, our second such post-financial crisis transaction, which provides an alternative source of capital, and enables the Company to enhance its returns and better manage its risk profile.
Increased dividends from MGIC to our holding company from $220 million in 2018 to $280 million in 2019.
Re-started the payment of quarterly dividends by our holding company, after having suspended such payments during the financial crisis.
Repurchased 8.7 million shares of our common stock, returning $114 million to shareholders.
MGIC received an upgrade in its financial strength rating from Moody's Investors Service (from Baa2 to Baa1).
|
Developing Co-Workers - Develop and diversify the talents of co-workers.
|
»
|
Executed on the Company's succession plan for key roles in the organization, including Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Chief Risk Officer, promoting all such officers from within the organization.
Delivered training workshops designed to build strategic capabilities which enhance performance.
Continued to enhance career developments, talent analytics and financial health capabilities for employees.
|
Role in Housing Finance Industry - Preserve and expand the role of the Company and private mortgage insurance in housing finance policy.
|
»
|
Held leadership roles in key trade association working groups.
Continued to enhance the reputation of the Company and the industry relative to changing housing finance policy and a broader role for private mortgage insurance.
|
ROE Performance Levels for Company's Bonus Plan Compared to Benchmarks
|
|
|
Company's Threshold ROE (for no bonus payout)(1)
|
10.0
|
%
|
Company's Target ROE (for 50% bonus payout)(1)
|
13.5
|
%
|
Company's Maximum ROE (for 100% bonus payout)(1)
|
21.0
|
%
|
Average 2018 ROE of Company's Benchmarking Peers(2)
|
8.8
|
%
|
(1)
|
For purposes of the bonus plan, we calculate ROE as adjusted net operating income, divided by beginning shareholders' equity, excluding accumulated other comprehensive income (loss). Adjusted net operating income is a non-GAAP measures of performance. For a description of how we calculate this measure and for a reconciliation of this measure to its nearest comparable GAAP measures, see Appendix B.
|
(2)
|
Represents 2018 Net income available to common shareholders, adjusted (from Bloomberg), divided by beginning shareholders' equity, excluding accumulated other comprehensive income (loss).
|
MGIC 2019 NIW Performance Levels (billions)
|
||
Threshold (for no bonus payout)
|
Target (for 50% bonus payout)
|
Maximum (for 100% bonus payout)
|
$42
|
$52
|
$55
|
|
|
|
|
Notes: (1) Adjusted net operating income (loss) is a non-GAAP financial measure. For a description of how we calculate this measure and for a reconciliation of this measure to its nearest comparable GAAP measure, see Appendix B to this Proxy Statement.
(2) For comparability between periods, the bonuses of our former and current CEOs are provided.
|
|
|
Note: Reflects 2019 ROE for all companies, as reported by Bloomberg, which differs from the calculation of ROE for bonus purposes. Pretax Income per dollar of TDC reflects 2019 pretax income for all companies, annualized 2019 TDC data for our current CEO for the time he was in that position, and 2018 TDC data for the peer groups because that was the latest TDC information available when this report was prepared.
|
|
(1)
|
Represents a portion of the RSUs granted, calculated based on the probable outcome of the applicable performance conditions as of the grant date.
|
(2)
|
2018 awards as reported in 2019 proxy statements are used for Benchmarking Peers because that is the most recent information that is available.
|
(3)
|
Represents the weighted average stock price on the two dates on which awards were granted.
|
•
|
the three-year cumulative goal for vesting of the 2019, 2018 and 2017 Cliff BV Awards, and
|
•
|
the growth in ABV per share as of the end of 2019, as calculated for the awards;
|
•
|
2020 vesting percentage for the 2017 awards; no 2018 or 2019 grants will vest until the end of their three-year performance period
|
Growth in Adjusted Book Value per Share for 2019, 2018 and 2017 Cliff BV Awards
|
|
||||
|
3-year Cumulative Goal
|
2017-2019 Actual Growth
|
2018-2019 Actual Growth
|
2019 Actual Growth
|
Vesting %
|
2019 Equity Awards
|
$6.02
|
|
|
$1.96
|
|
2018 Equity Awards
|
$4.98
|
|
$3.58
|
|
|
2017 Equity Awards
|
$3.56
|
$4.26
|
|
|
100%
|
|
Guideline
(value of shares) |
Actual Ownership
(value at 12/31/19) |
Actual Ownership
as a Multiple of
Base Salary
|
CEO
|
$4,650,000
|
$5,353,738
|
6.9
|
Total Other Current NEOs
|
$5,197,200
|
$6,627,677
|
3.8
|
Name and
Principal Position |
Year
|
Salary
($) |
Stock Awards(1)
($) |
Non-Equity Incentive Plan Compensation(2)
($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings(3)
($) |
All Other Compensation(4)
($) |
Total
($) |
||||||
Timothy Mattke(5)
|
2019
|
645,873
|
|
2,144,934
|
|
1,474,000
|
|
504,486
|
|
24,950
|
|
4,794,243
|
|
Chief Executive
|
2018
|
542,119
|
|
1,435,801
|
|
1,106,000
|
|
54,457
|
|
15,100
|
|
3,153,477
|
|
Officer
|
2017
|
526,327
|
|
868,444
|
|
966,800
|
|
396,358
|
|
14,850
|
|
2,772,779
|
|
Salvatore Miosi(5), (6)
|
2019
|
495,593
|
|
1,947,384
|
|
1,082,500
|
|
507,286
|
|
24,950
|
|
4,057,713
|
|
President and
|
2018
|
398,550
|
|
1,435,801
|
|
813,000
|
|
84,115
|
|
15,100
|
|
2,746,566
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
||||||
Nathaniel Colson(5), (6)
|
2019
|
206,180
|
|
374,593
|
|
223,100
|
|
14,822
|
|
8,808
|
|
827,503
|
|
Executive Vice
|
|
|
|
|
|
|
|
||||||
President and Chief
|
|
|
|
|
|
|
|
||||||
Financial Officer
|
|
|
|
|
|
|
|
||||||
James Hughes(7)
|
2019
|
421,500
|
|
1,651,059
|
|
825,200
|
|
558,689
|
|
24,950
|
|
3,481,398
|
|
Executive Vice
|
2018
|
408,769
|
|
1,435,801
|
|
834,000
|
|
126,953
|
|
15,100
|
|
2,820,623
|
|
President - Sales &
|
2017
|
365,081
|
|
868,444
|
|
729,000
|
|
469,507
|
|
14,850
|
|
2,446,882
|
|
Bus. Development
|
|
|
|
|
|
|
|
||||||
Paula Maggio(6)
|
2019
|
409,062
|
|
1,157,184
|
|
640,600
|
|
39,438
|
|
24,950
|
|
2,271,234
|
|
Executive Vice
|
|
|
|
|
|
|
|
|
|||||
President and
|
|
|
|
|
|
|
|
|
|||||
General Counsel
|
|
|
|
|
|
|
|
|
|||||
Patrick Sinks(5)
|
2019
|
895,304
|
|
3,375,120
|
|
2,336,800
|
|
909,738
|
|
24,950
|
|
7,541,912
|
|
Vice Chairman
|
2018
|
868,635
|
|
4,187,753
|
|
2,311,300
|
|
588,738
|
|
15,100
|
|
7,971,526
|
|
|
2017
|
843,000
|
|
2,532,961
|
|
2,065,500
|
|
1,577,483
|
|
14,850
|
|
7,033,794
|
|
Stephen Mackey(8)
|
2019
|
204,151
|
|
1,157,184
|
|
—
|
|
61,492
|
|
483,294
|
|
1,906,121
|
|
Former Executive
|
2018
|
460,765
|
|
1,435,801
|
|
940,000
|
|
49,299
|
|
24,500
|
|
2,910,365
|
|
Vice President and
|
2017
|
447,373
|
|
868,444
|
|
801,500
|
|
52,884
|
|
24,050
|
|
2,194,251
|
|
Chief Risk Officer
|
|
|
|
|
|
|
|
(1)
|
Our equity awards are granted under programs described in "Components of our Executive Compensation Program — Long-Term Equity Awards” in our CD&A. The amounts shown in this column represent the grant date fair value of the restricted equity awards granted to NEOs 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 NYSE on the date of grant. In 2019, this was $12.37 (on a weighted average basis) for our CEO; and ranged from $11.76 to $13.99 (on a weighted average basis) for our other NEOs; in 2018, it was $15.81; and in 2017, it was $10.41. 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 2019, 2018 and 2017 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
|
2019
|
2018
|
2017
|
||||||
|
Timothy Mattke
|
$
|
2,398,950
|
|
$
|
1,669,536
|
|
$
|
1,099,296
|
|
|
Salvatore Miosi
|
2,201,400
|
|
1,669,536
|
|
See Note (6)
|
|
|||
|
Nathaniel Colson
|
388,056
|
|
See Note (6)
|
|
See Note (6)
|
|
|||
|
James Hughes
|
1,905,075
|
|
1,669,536
|
|
1,099,296
|
|
|||
|
Paula Maggio
|
1,411,200
|
|
See Note (6)
|
|
See Note (6)
|
|
|||
|
Patrick Sinks(7)
|
4,116,000
|
|
4,869,480
|
|
3,206,280
|
|
|||
|
Stephen Mackey(8)
|
1,411,200
|
|
1,669,536
|
|
1,099,296
|
|
(2)
|
Our 2019 bonus program is described in "Components of our Executive Compensation Program — Annual Bonus” in our CD&A. The percentage of the maximum bonuses paid was calculated based on a formula that compares actual performance to threshold, target and maximum performance achievement levels for two different financial performance goals (each with specific weights and in total weighted 75%) and a subjective assessment of performance against three different business objectives. Our 2018 and 2017 bonus programs were structurally similar to the 2019 bonus program; however the 2017 program considered a greater number of financial performance goals and business objectives. All goals for the 2017-2019 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 year pursuant to our Pension Plan and our Supplemental Executive Retirement Plan (“SERP”) when retirement benefits are also provided under the SERP, and (b) distributions the named executive officer received from our Qualified Pension Plan or SERP during the year.
|
(a)
|
For other than Mr. Colson, Ms. Maggio and 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.
|
(b)
|
For Mr. Colson and Ms. Maggio, the difference between (a) the present value as of December 31, 2019 of the accumulated benefit under the "Cash Component" (described following the table titled “Pension Benefits at 2019 Fiscal Year-End") of our Pension Plan, and (b) the same calculation as of the prior year-end.
|
(c)
|
For Mr. Mackey, the difference between (a) the sum of (I) the distribution Mr. Mackey is expected to receive from the Pension Plan on February 1, 2020, and (II) the distribution Mr. Mackey received from the SERP in 2019, and (b) the present value as of December 31, 2018 of the accumulated benefit under the "Cash Component."
|
(d)
|
For all years shown, the change in the present value of accumulated pension benefits between years represents the net result of (a) the officer being one year closer to the receipt of the pension payments, which generally means the present value is higher, and the annual pension payment (for Mr. Colson, Ms. Maggio and Mr. Mackey, their accumulated benefit) is higher due to the additional benefit earned because of one more year (in the case of Mr. Mackey, a partial year) of employment; (b) a change in actuarial assumptions used to calculate the benefit, primarily changes in the discount rate used to calculate the present value at the end of each of those years; (c) a decrease for the effect of distributions that the NEOs received from our Qualified Pension Plan or SERP; (d) an increase for (I) in the case of Mr. Sinks and Mr. Mattke, in-service distributions received from our SERP to pay their portion of social security taxes and related income tax from such distributions, and (II) in the case of Mr. Mackey, a lump-sum distribution from the SERP. For each NEO, the change for 2019, 2018 and 2017 consists of:
|
|
|
2019
|
2018
|
2017
|
|||||||||||||||
|
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
|
||||||||||||
|
Timothy Mattke
|
$
|
336,693
|
|
$
|
167,793
|
|
$
|
(219,652
|
)
|
$
|
274,109
|
|
$
|
173,042
|
|
$
|
223,316
|
|
|
Salvatore Miosi
|
297,162
|
|
210,124
|
|
(208,703
|
)
|
292,818
|
|
See Note (6)
|
|
See Note (6)
|
|
||||||
|
Nathaniel Colson
|
6,503
|
|
8,319
|
|
See Note (6)
|
|
See Note (6)
|
|
See Note (6)
|
|
See Note (6)
|
|
||||||
|
James Hughes
|
318,594
|
|
240,095
|
|
(237,244
|
)
|
364,197
|
|
222,500
|
|
247,007
|
|
||||||
|
Paula Maggio
|
4,607
|
|
34,831
|
|
See Note (6)
|
|
See Note (6)
|
|
See Note (6)
|
|
See Note (6)
|
|
||||||
|
Patrick Sinks
|
669,333
|
|
240,405
|
|
(522,207
|
)
|
1,110,945
|
|
570,271
|
|
1,007,212
|
|
||||||
|
Stephen Mackey
|
5,960
|
|
55,532
|
|
(2,083
|
)
|
51,382
|
|
6,401
|
|
46,483
|
|
(4)
|
Amounts in this column for 2019, for other than Mr. Mackey, consist of matching 401(K) contributions and discretionary retirement plan contributions. For Mr. Mackey, the amount reflects $458,344 of severance paid in 2019 in connection with his separation from service with the Company, and a matching 401(k) contribution and discretionary retirement plan contribution of $24,950.
|
(5)
|
In July 2019, Mr. Sinks stepped down as our President and CEO, but agreed to remain with the Company until January 31, 2020 in the position of Vice Chairman.
|
(6)
|
No compensation data is provided for the years prior to Mr. Miosi, Mr. Colson or Ms. Maggio becoming an NEO.
|
(7)
|
NEO holds this position with Mortgage Guaranty Insurance Corporation, a wholly owned subsidiary of the Company, and not with the Company.
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards(1) |
Estimated Future Payouts
Under Equity Incentive Plan Awards(2) |
All Other Stock Awards
|
Grant Date
Fair Value of Stock and Option Awards(3) ($) |
||||||||
Name
|
Grant Date
|
Type of Award
|
Target
($) |
Maximum
($) |
Target
(#) |
Maximum
(#) |
(#)
|
|||||||
Timothy Mattke
|
1/21/2019
|
Annual Bonus Incentive(1)
|
854,041
|
|
1,708,081
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Cliff Perf. Vest(4)
|
|
|
98,400
|
|
120,000
|
|
|
1,157,184
|
|
|||
|
7/25/2019
|
RSUs-Cliff Time Vest(5)
|
|
|
|
|
75,000
|
|
987,750
|
|
||||
Salvatore Miosi
|
1/21/2019
|
Annual Bonus Incentive(1)
|
627,158
|
|
1,254,317
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Cliff Perf. Vest(4)
|
|
|
98,400
|
|
120,000
|
|
|
1,157,184
|
|
|||
|
7/25/2019
|
RSUs-Cliff Time Vest(5)
|
|
|
|
|
60,000
|
|
790,200
|
|
||||
Nathaniel Colson
|
1/21/2019
|
Annual Bonus Incentive(1)
|
129,251
|
|
258,503
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Perf. Vest(6)
|
|
|
5,215
|
|
6,360
|
|
|
61,331
|
|
|||
|
1/21/2019
|
RSUs-Time Vest(7)
|
|
|
|
|
4,240
|
|
49,862
|
|
||||
|
7/25/2019
|
RSUs-Cliff Time Vest(5)
|
|
|
|
|
20,000
|
|
263,400
|
|
||||
James Hughes
|
1/21/2019
|
Annual Bonus Incentive(1)
|
478,125
|
|
956,250
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Cliff Perf. Vest(4)
|
|
|
98,400
|
|
120,000
|
|
|
1,157,184
|
|
|||
|
7/25/2019
|
RSUs-Cliff Time Vest(5)
|
|
|
|
|
37,500
|
|
493,875
|
|
||||
Paula Maggio
|
1/21/2019
|
Annual Bonus Incentive(1)
|
371,160
|
|
742,320
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Cliff Perf. Vest(4)
|
|
|
98,400
|
|
120,000
|
|
|
1,157,184
|
|
|||
Patrick Sinks
|
1/21/2019
|
Annual Bonus Incentive(1)
|
1,353,900
|
|
2,707,800
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Cliff Perf. Vest(4)
|
|
|
287,000
|
|
350,000
|
|
|
3,375,120
|
|
|||
Stephen Mackey(8)
|
1/21/2019
|
Annual Bonus Incentive(1)
|
538,200
|
|
1,076,400
|
|
|
|
|
|
||||
|
1/21/2019
|
RSUs-Cliff Perf. Vest(4)
|
|
|
98,400
|
|
120,000
|
|
|
1,157,184
|
|
(1)
|
Our Non-Equity Incentive Plan Awards are described in "Components of our Executive Compensation Program — Annual Bonus” in our CD&A. This table does not include a "threshold" column because under our 2019 Non-Equity Incentive Awards, a zero payout was possible if threshold performance targets were not achieved. Messrs. Mattke, Miosi and Colson were each promoted during 2019; the amounts shown in this column have been calculated based on their prorated salaries and bonus multiples for the time they were in each of their positions during 2019.
|
(2)
|
Our Equity Incentive Plan Awards are described in “Components of our Executive Compensation Program - 2019 Long-Term Equity Awards” in our CD&A. This table does not include a "threshold" column because under our 2019 Long-Term Equity Awards, a zero payout is possible for performance vested awards if no adjusted book value per share growth is achieved, and a zero payout is possible for time vested awards if the NEO departs before vesting.
|
(3)
|
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 NYSE closing price on the day the award was granted or the prior day if the NYSE was closed on the day the award was granted.
|
(4)
|
These are the Cliff BV Awards described in “Components of our Executive Compensation Program - 2019 Long-Term Equity Awards” in our CD&A.
|
(5)
|
These are the one-time Cliff Time Vested Awards described in “Components of our Executive Compensation Program - 2019 Long-Term Equity Awards” in our CD&A that were awarded in connection with the execution of our leadership transition.
|
(6)
|
These are the BV Awards described in "Components of our Executive Compensation Program - 2019 Long-Term Equity Awards” in our CD&A.
|
(7)
|
These are the Time Vested Awards described in “Components of our Executive Compensation Program - 2019 Long-Term Equity Awards” in our CD&A.
|
(8)
|
Our standard terms for stock awards provide that separation from service with the Company results in forfeiture of the awards. In connection with Mr. Mackey’s separation from service, the Company waived the forfeiture of Mr. Mackey’s 2017 stock award; Mr. Mackey’s 2018 and 2019 stock awards were forfeited. The value of Mr. Mackey’s 2017 award when the forfeiture was waived, based upon the probable outcome of the applicable performance conditions and the closing price of our Common Stock on the NYSE on that date, had increased from $868,444 to $1,156,257. The award remains subject to the performance condition described in “Components of our Executive Compensation Program - 2018 and 2017 Long-Term Equity Awards” in our CD&A.
|
|
|
|
|
|
Equity Incentive Plan Awards
|
||||||
Name
|
Number of Shares or
Units That Have Not Vested(1) (#) |
|
Market Value of Shares or Units That Have Not Vested(2)
($) |
|
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) ($) |
||||
Timothy Mattke
|
75,000
|
|
|
1,062,750
|
|
|
328,440
|
|
|
4,653,995
|
|
Salvatore Miosi
|
60,000
|
|
|
850,200
|
|
|
328,440
|
|
|
4,653,995
|
|
Nathaniel Colson
|
26,242
|
|
|
371,849
|
|
|
6,214
|
|
|
88,052
|
|
James Hughes
|
37,500
|
|
|
531,375
|
|
|
328,440
|
|
|
4,653,995
|
|
Paula Maggio
|
13,334
|
|
|
188,943
|
|
|
117,240
|
|
|
1,661,291
|
|
Patrick Sinks
|
—
|
|
|
—
|
|
|
957,950
|
|
|
13,574,152
|
|
Stephen Mackey
|
—
|
|
|
—
|
|
|
105,600
|
|
|
1,496,352
|
|
(1)
|
Consists of:
|
(a)
|
Cliff Time Vested RSUs awarded in July 2019 to Messrs. Mattke (75,000), Miosi (60,000), Colson (20,000) and Hughes (37,500) in connection with our CEO succession and management realignment. Those RSUs vest in July 2022, subject to continued employment with the Company, and are not subject to performance targets.
|
(b)
|
Time Vested RSUs awarded in July 2018 to Ms. Maggio (13,334), upon her joining the Company and prior to her becoming an NEO. Those awards vest in July in each of the first three years following the year of grant subject to her continued employment with the Company and are not subject to performance targets.
|
(c)
|
Time Vested RSUs awarded to Mr. Colson in each of January 2017 (668) and January 2018 (1,334), prior to his becoming an NEO. Those awards vest in January in each of the first three years following the year of grant subject to his continued employment with the Company, and are not subject to performance targets.
|
(d)
|
Time Vested RSUs granted in January 2019 to Mr. Colson (4,240). Those awards vest in January in each of the first three years following the year of grant, are not subject to performance targets and are reflected in the 2019 Grants of Plan Based Awards Table.
|
(2)
|
Based on the closing price of the Common Stock on the NYSE at 2019 year-end, which was $14.17.
|
(3)
|
Consists of:
|
(a)
|
Cliff Performance Vested RSUs awarded January 21, 2019 to Messrs. Mattke (117,240), Miosi (117,240), Hughes (117,240) and Sinks (341,950) and Ms. Maggio (117,240) that will cliff vest in February 2022 based on achievement of a three-year cumulative goal for growth in adjusted book value per share and are reflected in the 2019 Grants of Plan Based Awards Table. For more information, see “Components of our Executive Compensation Program - 2019 Long Term Equity Awards” in our CD&A.
|
(b)
|
Cliff Performance Vested RSUs awarded January 22, 2018 to Messrs. Mattke (105,600), Miosi (105,600), Hughes (105,600), and Sinks (308,000) that will cliff vest in February 2021 based on achievement of a three-year cumulative goal for growth in adjusted book value per share. For more information, see "Components of our Executive Compensation Program - 2018 and 2017 Long Term Equity Awards" in our CD&A.
|
(c)
|
Cliff Performance Vested RSUs awarded January 23, 2017 to Messrs. Mattke (105,600), Miosi (105,600), Hughes (105,600), Sinks (308,000) and Mackey (105,600) that cliff vested in March 2020 based on achievement of a three-year cumulative goal for growth in adjusted book value per share. For more information, see "Components of our Executive Compensation Program - 2018 and 2017 Long Term Equity Awards" in our CD&A.
|
(d)
|
Performance Vested RSUs awarded on January 21, 2019 to Mr. Colson (6,214) that will vest over a three-year period, based on achievement of a three-year cumulative goal for growth in adjusted book value per share and are reflected in the 2019 Grants of Plan Based Awards Table. For more information, see “Components of our Executive Compensation Program - 2019 Long-Term Equity Awards” in our CD&A.
|
Name
|
Number of Shares Acquired on Vesting (#)
|
Value Realized on Vesting(1)
($) |
||
Timothy Mattke
|
39,968
|
|
523,095
|
|
Salvatore Miosi
|
14,660
|
|
189,198
|
|
Nathaniel Colson
|
2,000
|
|
24,720
|
|
James Hughes
|
14,660
|
|
189,198
|
|
Paula Maggio
|
6,666
|
|
89,991
|
|
Patrick Sinks
|
116,574
|
|
1,525,703
|
|
Stephen Mackey
|
39,968
|
|
523,095
|
|
(1)
|
Value realized is the market value at the close of business on the vesting date.
|
Name
|
Plan Name(1)
|
Number of Years Credited Service
(#) |
Present Value of Accumulated Benefit(2)
($) |
Payments During Last Fiscal Year(3)
($) |
||
Timothy Mattke
|
Qualified Pension Plan
|
13.6
|
1,351,975
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
13.6
|
198,851
|
|
5,101
|
|
Salvatore Miosi
|
Qualified Pension Plan
|
31.7
|
1,891,813
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
31.7
|
120,918
|
|
—
|
|
Nathaniel Colson
|
Qualified Pension Plan
|
5.4
|
34,692
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
5.4
|
—
|
|
—
|
|
James Hughes
|
Qualified Pension Plan
|
32.3
|
2,623,389
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
32.3
|
115,862
|
|
—
|
|
Paula Maggio
|
Qualified Pension Plan
|
1.5
|
21,917
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
1.5
|
27,263
|
|
—
|
|
Patrick Sinks
|
Qualified Pension Plan
|
41.4
|
3,420,062
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
41.4
|
4,587,179
|
|
16,514
|
|
Stephen Mackey
|
Qualified Pension Plan
|
3.9
|
165,541
|
|
—
|
|
|
Supplemental Executive Retirement Plan
|
3.9
|
—
|
|
35,431
|
|
(1)
|
See below for a summary of these plans.
|
(2)
|
The amount shown in this column, for other than Mr. Colson, Ms. Maggio and 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 or her life expectancy determined at the end of 2019, 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, 2019 for the discount rate used to calculate the present value of benefits under these plans. The amount shown in this column for Mr. Colson and Ms. Maggio is the present value as of December 31, 2019 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 amount shown in this column for Mr. Mackey is the accumulated benefit under the "Cash Component" (described below) of our Pension Plan (Mr. Mackey received a qualified lump sum payment on February 1, 2020).
|
(3)
|
For Mr. Sinks and Mr. Mattke, the amount shown in this column represents distribution amounts received from the SERP during the fiscal year ended December 31, 2019, to pay the employee portion of the Social Security tax attributable to benefits earned under the plan during fiscal year 2019, as well as amounts distributed to cover the income tax thereon. For Mr. Mackey, the amount reflects a 2019 lump sum payout from the SERP.
|
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)
($) |
|||||
Timothy
Mattke |
Change in control with qualifying termination
|
11,059,678
|
|
5,128,557
|
|
5,755,854
|
|
—
|
|
175,267
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
5,755,854
|
|
—
|
|
5,755,854
|
|
—
|
|
—
|
|
Salvatore Miosi
|
Change in control with qualifying termination
|
3,635,755
|
|
—
|
|
3,635,753
|
|
—
|
|
2
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
5,543,304
|
|
—
|
|
5,543,304
|
|
—
|
|
—
|
|
Nathaniel Colson
|
Change in control with qualifying termination
|
642,099
|
|
75,675
|
|
461,970
|
|
—
|
|
104,454
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
461,970
|
|
—
|
|
461,970
|
|
—
|
|
—
|
|
James Hughes
|
Change in control with qualifying termination
|
3,437,589
|
|
—
|
|
3,437,585
|
|
—
|
|
4
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
5,224,479
|
|
—
|
|
5,224,479
|
|
—
|
|
—
|
|
Paula Maggio
|
Change in control with qualifying termination
|
2,000,477
|
|
—
|
|
1,889,343
|
|
—
|
|
111,134
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Death
|
1,889,343
|
|
—
|
|
1,889,343
|
|
—
|
|
—
|
|
Patrick Sinks
|
Change in control with qualifying termination
|
14,612,891
|
|
762,276
|
|
13,688,220
|
|
—
|
|
162,395
|
|
|
Change in control without qualifying termination
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Retirement
|
8,728,720
|
|
—
|
|
—
|
|
8,728,720
|
|
—
|
|
|
Death
|
13,688,220
|
|
—
|
|
13,688,220
|
|
—
|
|
—
|
|
Stephen Mackey
|
Separation from service
|
1,782,817
|
|
286,465
|
|
—
|
|
1,496,352
|
|
—
|
|
(1)
|
As described further in “Change in Control Agreements and Severance Pay” below, each of our current NEOs is a party to a 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
|
(2)
|
For other than Mr. Mackey, the value attributed to restricted equity that accelerates or is eligible for continued vesting is calculated using the closing price on the NYSE on December 31, 2019 (which is a higher valuation than that specified by IRS regulations for tax purposes). The value of equity that would vest on an accelerated basis was reduced under the Cut-Back Provision as follows: Mr. Miosi – $1,907,551; and Mr. Hughes –$1,786,894.
|
(3)
|
For other than Mr. Mackey, 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. Other benefits were reduced under the Cut-Back Provision as follows: Mr. Miosi – $159,765; Mr. Hughes –$140,263; and Ms. Maggio – $12,464.
|
Median of the 2019 Annual Total Compensation of all of our Employees,
except the CEO
|
2019 Annual Total Compensation
of the CEO
|
Ratio of the Median of the 2019
Annual Total Compensation of all of our Employees, except the CEO,
to the Annual 2019
Total Compensation of the CEO
|
$ 149,146
|
$ 6,873,472
|
1:46
|
•
|
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.
|
•
|
The number of shares that may be covered by Awards granted to any one participant in any fiscal year (excluding any Matching Awards) will not exceed 1,000,000 shares.
|
•
|
The maximum amount paid to any participant in any fiscal year under all Incentive Awards (including any Matching Award) will not exceed $7,500,000.
|
•
|
net income, pre-tax income or earnings before interest, taxes and depreciation and amortization,
|
•
|
earnings per share,
|
•
|
operating earnings, which is net income excluding realized gains and losses,
|
•
|
cash flow, including operating cash flow, which excludes the same items as are excluded in operating earnings,
|
•
|
return on assets, capital, investment, invested capital or equity;
|
•
|
total return to shareholders or another return measure in which the denominator is one objective financial metric derived from the Company’s financial statements and the denominator is another one,
|
•
|
expenses or a ratio related to expenses, such as the ratio of expenses from insurance operations to net premiums written or earned,
|
•
|
incurred or paid losses or ratios related to those losses, such as the ratio of incurred losses to net premiums written or earned,
|
•
|
market share,
|
•
|
book value,
|
•
|
book value per share growth,
|
•
|
common stock share price,
|
•
|
surplus,
|
•
|
statutory capital,
|
•
|
economic value added,
|
•
|
gross or net revenues, and
|
•
|
new insurance written.
|
•
|
determined on a Company-wide basis or, where applicable, with respect to one or more subsidiaries, operating units, divisions, books of business, new insurance written, types of insurance that we write, acquired businesses, minority investments, partnerships or joint ventures,
|
•
|
determined on a relative or an absolute basis, or
|
•
|
determined on a per share (either basic or fully diluted) or an aggregate basis.
|
•
|
relate to a security that is, or will shortly become, traded on a recognized securities market,
|
•
|
provide rights and entitlements that are substantially equivalent to or better than the rights and entitlements under the existing award,
|
•
|
be of substantially equivalent economic value, and
|
•
|
provide that awards become fully vested and exercisable if the participant’s employment is terminated within three years following the Change in Control without Cause or by the participant for Good Reason. For this purpose, “Good Reason” and “Cause” are as defined in the Company’s KEESA (see “Compensation and Related Tables - Change in Control Agreements”).
|
•
|
Each option and SAR outstanding would generally immediately vest and become exercisable to the full extent of the original grant for the remainder of its term.
|
•
|
The Committee could, in its discretion, provide, either absolutely or subject to the election of the optionee, that each option and SAR be surrendered or exercised for cash equal to the excess of the Fair Market Value of the Common Stock at the time of exercise over the exercise price.
|
•
|
All outstanding restricted stock and RSUs that vest without reference to the extent to which one or more Performance Goals are attained shall become vested to the maximum extent provided in the award.
|
•
|
All outstanding restricted stock and RSUs that vest with reference to the extent to which one or more Performance Goals are attained shall become vested in an amount calculated by assuming that the Performance Goal(s) have been satisfied at the target level specified in the Participant’s award agreement or, if greater, as otherwise specified by the Committee at or after grant.
|
|
Equity Compensation Plan Information
|
|||||
|
(A) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
(B) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
|
(C) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))
|
|||
Equity compensation plans approved by security holders
|
4,141,661(1)
|
|
—
|
|
3,439,836(2)
|
|
Equity compensation plans not approved by security holders
|
—
|
|
—
|
|
—
|
|
Total
|
4,141,661(1)
|
|
—
|
|
3,439,836(2)
|
|
(1)
|
Includes 4,115,792 RSUs granted under our 2015 Omnibus Incentive Plan for which shares will be issued if certain criteria are met. Of the RSUs granted under the 205 Plan, 3,143,457 RSUs are subject to performance conditions and the remaining RSUs are subject to service conditions. Also includes 25,869 vested RSUs granted under our 2002 Stock Incentive Plan for which shares will be issued in the future.
|
(2)
|
Reflects shares available for granting as of December 31, 2019; the number has been materially reduced by awards made in January 2020. All of these shares are available under our 2015 Plan.
|
Name
|
Dollar Value of Restricted Stock Units ($)(1)
|
Number of Restricted Stock Units
|
Cash Bonuses ($)
|
|||
Timothy Mattke
|
2,144,934
|
|
173,400
|
|
1,474,000
|
|
Salvatore Miosi
|
1,947,384
|
|
158,400
|
|
1,082,500
|
|
Nathaniel Colson
|
374,593
|
|
29,455
|
|
223,100
|
|
James Hughes
|
1,651,059
|
|
135,900
|
|
825,200
|
|
Paula Maggio
|
1,157,184
|
|
98,400
|
|
640,600
|
|
Patrick Sinks
|
3,375,120
|
|
287,000
|
|
2,336,800
|
|
Stephen Mackey
|
1,157,184
|
|
98,400
|
|
—
|
|
All Executive Officers as of 3/6/20, including the NEOs
|
8,016,511
|
|
654,803
|
|
5,153,200
|
|
Non-Executive Director Group
|
—
|
|
—
|
|
—
|
|
Non-Executive Officer Employee Group as of 3/6/20
|
8,400,083
|
|
714,293
|
|
—
|
|
(1)
|
The dollar value and number of RSUs shown are based upon the probable outcome of the applicable performance conditions as of the grant date. The RSUs are valued at the NYSE closing prices on the dates of the awards, or the previous day if the NYSE was not open for trading on the date of the award.
|
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2020 OMNIBUS INCENTIVE PLAN. SIGNED PROXY CARDS AND VOTING INSTRUCTION FORMS WILL
BE VOTED FOR APPROVAL OF THE 2020 OMNIBUS INCENTIVE PLAN UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD OR VOTING INSTRUCTION FORM.
|
|
2019
|
2018
|
||
Audit Fees
|
2,834,000
|
|
2,328,800
|
|
Audit-Related Fees
|
140,711
|
|
107,140
|
|
Tax Fees
|
35,552
|
|
35,778
|
|
All Other Fees
|
3,870
|
|
3,870
|
|
Total Fees
|
3,014,133
|
|
2,475,588
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM. PROXY CARDS AND VOTING INSTRUCTION FORMS WILL
BE VOTED FOR RATIFICATION UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONS
ON THE PROXY CARD OR VOTING INSTRUCTION FORM.
|
Term
|
Description
|
Benchmarking Peer Group / Benchmarking Peers
|
The peer group used by the Committee to benchmark 2018 executive compensation.
|
CD&A
|
Compensation Discussion & Analysis.
|
Committee
|
The Management Development, Nominating and Governance Committee of our Board.
|
Compensation Consultant
|
Frederic W. Cook & Co., the Committee’s independent compensation consultant.
|
EVP
|
Executive Vice President.
|
GAAP
|
Generally Accepted Accounting Principles in the United States.
|
MGIC
|
Our wholly-owned subsidiary, Mortgage Guaranty Insurance Corporation.
|
Named Executive Officers
|
Our chief executive officer, our chief financial officer and our three other most highly compensated executive officers. The NEOs are the officers listed in the SCT. For 2018, the NEOs also included our former General Counsel.
|
NEOs
|
Named Executive Officers.
|
NIW
|
Direct new insurance written (before the effects of reinsurance).
|
NYSE
|
New York Stock Exchange.
|
ROE
|
Return on Equity. Unless otherwise indicated, ROE is calculated as Adjusted Net Operating Income divided by beginning of the year shareholders' equity, excluding accumulated other comprehensive income (loss).
|
RSUs
|
Restricted Stock Units.
|
SCT
|
Summary Compensation Table that appears on page 52.
|
Tax Act
|
The U.S. tax reform enacted on December 22, 2017 and commonly referred to as the "Tax Cuts and Jobs Act."
|
TDC
|
Total direct compensation, which consists of base salary, bonus (or non-equity incentive compensation) and equity awards (valued at their grant date value reported in the SCT).
|
(1)
|
Net realized investment gains (losses). The recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles.
|
(2)
|
Gains and losses on debt extinguishment. Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, improve our debt profile, and/or reduce potential dilution from our outstanding convertible debt.
|
(3)
|
Net impairment losses recognized in earnings. The recognition of net impairment losses on investments can vary significantly in both size and timing, depending on market credit cycles, individual issuer performance, and general economic conditions.
|
(4)
|
Infrequent or unusual non-operating items. Our income tax expense for 2017 reflects the remeasurement of our net deferred tax assets to reflect the lower corporate income tax rate under the Tax Act. Our 2018 and 2017 income tax expense also includes amounts related to our IRS dispute and is related to past transactions which are non-recurring in nature and are not part of our primary operating activities.
|
(1)
|
For the Year Ended December 31, 2018, the Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share does not foot due to rounding of the adjustments.
|
Reconciliation of Book Value per Share to Adjusted Book Value per Share for
2019 Equity Awards
|
||||||||
|
|
|
|
|
||||
(In thousands, except per share amounts)
|
|
2019
|
|
2018
|
||||
Shareholders' Equity (Book Value)
|
|
$
|
4,309,234
|
|
|
$
|
3,581,891
|
|
Divided by Shares Outstanding
|
|
347,308
|
|
|
355,371
|
|
||
Book Value per Share
|
|
$
|
12.41
|
|
|
$
|
10.08
|
|
|
|
|
|
|
||||
Adjusted Book Value for 2019 Equity Awards (from below)
|
|
$
|
4,411,605
|
|
|
$
|
3,706,105
|
|
Divided by Shares Outstanding (from below)
|
|
355,992
|
|
|
355,371
|
|
||
Adjusted Book Value per Share for 2019 Equity Awards
|
|
$
|
12.39
|
|
|
$
|
10.43
|
|
|
|
|
|
|
||||
Shareholders' Equity (Book Value)
|
|
$
|
4,309,234
|
|
|
$
|
3,581,891
|
|
Litigation Accruals
|
|
18,565
|
|
|
—
|
|
||
Common Stock Repurchases
|
|
114,126
|
|
|
—
|
|
||
Accumulated Other Comprehensive (Income) Loss
|
|
(72,707
|
)
|
|
124,214
|
|
||
Initiation of Dividends
|
|
42,387
|
|
|
—
|
|
||
Adjusted Book Value for 2019 Equity Awards
|
|
$
|
4,411,605
|
|
|
$
|
3,706,105
|
|
|
|
|
|
|
||||
Shares Outstanding
|
|
347,308
|
|
|
355,371
|
|
||
Common Stock Repurchases
|
|
8,684
|
|
|
—
|
|
||
Adjusted Shares Outstanding
|
|
355,992
|
|
|
355,371
|
|
•
|
Accumulated Other Comprehensive Income (Loss)
|
•
|
Certain Litigation Settlements / Judgments
|
•
|
Repurchases of Common Stock
|
•
|
Repurchases of Convertible Debt
|
•
|
Adjustments for Changes in Tax Laws
|
•
|
Adjustments for Changes in Accounting Principle
|
Reconciliation of Book Value per Share to Adjusted Book Value per Share for
2018 Equity Awards
|
||||||||||||
|
|
|
|
|
|
|
||||||
(In thousands, except per share amounts)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Shareholders' Equity (Book Value)
|
|
$
|
4,309,234
|
|
|
$
|
3,581,891
|
|
|
$
|
3,154,526
|
|
Divided by Shares Outstanding
|
|
347,308
|
|
|
355,371
|
|
|
370,567
|
|
|||
Book Value per Share
|
|
$
|
12.41
|
|
|
$
|
10.08
|
|
|
$
|
8.51
|
|
|
|
|
|
|
|
|
||||||
Adjusted Book Value for 2018 Equity Awards (from below)
|
|
$
|
4,541,797
|
|
|
$
|
3,878,684
|
|
|
$
|
3,198,309
|
|
Divided by Shares Outstanding (from below)
|
|
371,973
|
|
|
371,353
|
|
|
370,567
|
|
|||
Adjusted Book Value per Share for 2018 Equity Awards
|
|
$
|
12.21
|
|
|
$
|
10.44
|
|
|
$
|
8.63
|
|
|
|
|
|
|
|
|
||||||
Shareholders' Equity (Book Value)
|
|
$
|
4,309,234
|
|
|
$
|
3,581,891
|
|
|
$
|
3,154,526
|
|
Common Stock Repurchases
|
|
289,185
|
|
|
175,059
|
|
|
—
|
|
|||
Litigation Accruals
|
|
16,103
|
|
|
(2,462
|
)
|
|
—
|
|
|||
Accumulated Other Comprehensive (Income) Loss
|
|
(72,707
|
)
|
|
124,214
|
|
|
43,783
|
|
|||
Tax Law and Change in Accounting Principle
|
|
(18
|
)
|
|
(18
|
)
|
|
—
|
|
|||
Adjusted Book Value for 2018 Equity Awards
|
|
$
|
4,541,797
|
|
|
$
|
3,878,684
|
|
|
$
|
3,198,309
|
|
|
|
|
|
|
|
|
||||||
Shares Outstanding
|
|
347,308
|
|
|
355,371
|
|
|
370,567
|
|
|||
Common Stock Repurchases
|
|
24,665
|
|
|
15,982
|
|
|
—
|
|
|||
Adjusted Shares Outstanding
|
|
371,973
|
|
|
371,353
|
|
|
370,567
|
|
•
|
net income, pre-tax income or earnings before interest, taxes and depreciation and amortization,
|
•
|
earnings per share,
|
•
|
operating earnings, which is net income excluding realized gains and losses,
|
•
|
cash flow, including operating cash flow, which excludes the same items as are excluded in operating earnings,
|
•
|
return on assets, capital, investment, invested capital or equity,
|
•
|
total return to shareholders or another return measure in which the denominator is one objective financial metric derived from the Company's financial statements and the denominator is another one,
|
•
|
expenses or a ratio related to expenses, such as the ratio of expenses from insurance operations to net premiums written or earned,
|
•
|
incurred or paid losses or ratios related to those losses, such as the ratio of incurred losses to the net premiums written or earned,
|
•
|
market share,
|
•
|
book value,
|
•
|
book value per share,
|
•
|
common stock share price,
|
•
|
increase in surplus,
|
•
|
statutory capital,
|
•
|
economic value added,
|
•
|
gross or net revenues, and
|
•
|
new insurance written.
|
1 Year MGIC Investment Chart |
1 Month MGIC Investment Chart |
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