UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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Radian Group Inc.
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Radian Group Inc.
1500 Market Street Philadelphia, Pennsylvania 19102
800.523.1988 215.231.1000 |
April 5, 2019
Dear Stockholder:
You are cordially invited to attend the 2019 Annual Meeting of Stockholders of Radian Group Inc., which will be held at our headquarters, 1500 Market Street, 18th Floor, Philadelphia, Pennsylvania 19102, at 9:00 a.m. local time on May 15, 2019. The accompanying Notice of 2019 Annual Meeting of Stockholders and proxy statement describe the items to be considered and acted upon by the stockholders at the meeting.
Regardless of whether you plan to attend the annual meeting, please sign, date and return the enclosed proxy card as soon as possible so that your shares can be voted in accordance with your instructions. If you attend the meeting, you may revoke your proxy, if you wish, and vote personally. Because the representation of stockholders at the annual meeting is very important, we thank you in advance for your participation.
Sincerely,
Edward J. Hoffman General Counsel and Corporate Secretary |
RADIAN GROUP INC.
1500 Market Street
Philadelphia, Pennsylvania 19102
NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS
Regardless of whether you plan to attend Radians annual meeting, please submit your proxy with voting instructions. To submit your proxy by mail, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. For instructions about voting, please see How Shares May Be Voted on page 1 of the proxy statement.
By Order of the Board of Directors,
Edward J. Hoffman
General Counsel and Corporate Secretary
Philadelphia, Pennsylvania
April 5, 2019
2019 Proxy Statement 1 |
RADIAN GROUP INC.
1500 Market Street
Philadelphia, Pennsylvania 19102
www.radian.biz
PROXY STATEMENT
FOR 2019 ANNUAL MEETING OF STOCKHOLDERS
The board of directors (the Board) of Radian Group Inc. (Radian or the Company) is furnishing this proxy statement to solicit proxies from the Companys stockholders for use at Radians 2019 Annual Meeting of Stockholders (the Annual Meeting). A copy of the Notice of 2019 Annual Meeting of Stockholders accompanies this proxy statement. These materials are also available on the internet at www.radian.biz/StockholderReports. This proxy statement and the accompanying proxy card are being mailed to stockholders beginning on or about April 9, 2019 to furnish information relating to the business to be transacted at the Annual Meeting.
2019 Proxy Statement 1 |
Information About Voting
The following table summarizes the vote threshold required for approval of each item of business to be transacted at the Annual Meeting. In addition, the table shows the effect on the outcome of the vote of: (i) abstentions; (ii) uninstructed shares held by brokers (which result in broker non-votes when a beneficial owner of shares held in street name does not provide voting instructions and, as a result, the Nominee is prohibited from voting those shares on certain proposals); and (iii) signed but unmarked proxy cards.
Proposal |
Voted Required for Approval |
Effect of Abstentions (1) |
Uninstructed Shares/ Effect of Broker Non-votes (1) |
Signed but Unmarked Proxy Cards (2) |
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Proposal 1 |
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Election of directors |
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Majority of votes cast with respect to each nominee (3) |
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No effect (4) | |
Not voted/No effect |
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Voted For each nominee |
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Proposal 2 |
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Advisory, non-binding vote to approve named executive officer compensation |
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Majority of shares present in person or represented by proxy and entitled to vote |
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Same effect as a vote Against |
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Not voted/No effect |
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Voted For | ||||||
Proposal 3 |
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Ratification of the appointment of PricewaterhouseCoopers LLP as Radians independent registered public accounting firm for the year ending December 31, 2019 |
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Majority of shares present in person or represented by proxy and entitled to vote |
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Same effect as a vote Against |
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Discretionary vote by broker |
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Voted For |
(1) | Abstentions and broker non-votes are included for purposes of determining whether a quorum is present, however, abstentions are considered entitled to vote whereas broker non-votes are not. |
(2) | If you complete and return your proxy card properly, but do not provide instructions on your proxy card as to how to vote your shares, your shares will be voted as shown in this column and in accordance with the judgment of the individuals named as proxies on the proxy card as to any other matter properly brought before the Annual Meeting. |
(3) | See below for an explanation of our majority voting standard with respect to uncontested director elections. |
(4) | Under Section 4.13(f) of our Amended and Restated By-Laws (the By-Laws), abstentions are not counted as votes For or Against a directors election. |
2 2019 Proxy Statement |
Information About Voting
As described in the table above, in an uncontested election, meaning the number of director nominees is equal to or less than the number of directors to be elected at the meeting, our directors are elected by majority voting (Proposal 1). For an uncontested election of directors, a director is elected only if the number of shares voted For that director exceeds the number of shares voted Against that director. In accordance with our By-Laws, each of our incumbent directors submits a conditional resignation in advance of the Annual Meeting that will become effective if the number of shares voted For that director does not exceed the number of shares voted Against that director and the Board accepts the directors resignation. If retirement eligible, the director also may choose to retire from the Board before the resignation is accepted by the Board and becomes effective. If a sitting director fails to receive a majority of the votes cast, our Board will determine within 90 days of the Annual Meeting whether to accept the resignation of such director, unless the director retires during this 90-day period. If a nominee fails to receive a majority of the votes cast and the Board accepts the directors resignation or the director retires, there would be a vacancy created on the Board. Our Board would then have the option under our By-Laws either to appoint someone to fill the vacancy or to reduce the size of the Board.
This years election of directors is an uncontested election of directors. If there were a contested election, then plurality voting, by which directors receiving the greatest number of votes cast would be elected, would apply.
We will announce the preliminary voting results at the conclusion of the Annual Meeting, if practicable, and we will publish the voting results in a Current Report on Form 8-K that will be filed with the United States Securities and Exchange Commission (the SEC) within four business days after the conclusion of the Annual Meeting.
2019 Proxy Statement 3 |
PROPOSAL 1 ELECTION OF DIRECTORS
Our Amended and Restated Certificate of Incorporation and our By-Laws provide for the annual election of directors. These organizational documents also provide that the number of directors, which shall not be less than nine or more than fourteen, shall be determined by our Board. Our Board has set the current number of directors at 11, and has approved a reduction in the size of the Board to 10 members effective at the Annual Meeting, as discussed below.
Upon election, each of our directors serves for a one-year term and until his or her successor has been duly elected and qualified, or until his or her earlier removal or resignation. Our Board currently consists of Herbert Wender, David C. Carney, Howard B. Culang, Debra Hess, Lisa W. Hess, Stephen T. Hopkins, Gaetano Muzio, Gregory V. Serio, Noel J. Spiegel, David H. Stevens and Richard G. Thornberry.
Upon completion of his current term at the Annual Meeting, Mr. Hopkins will be retiring from the Board, and therefore, will not be standing for reelection. Effective upon Mr. Hopkins retirement, the Board has approved a reduction in the size of the Board from 11 to 10 members. Upon the recommendation of the Governance Committee of our Board, the Board has nominated each of our current directors, other than Mr. Hopkins, for reelection. All nominees (other than our Chief Executive Officer, Mr. Thornberry) are independent under applicable independence rules of the SEC and the NYSE, and all nominees have consented to be named in this proxy statement and to serve if elected. If, at the time of the Annual Meeting, any nominee is not available for election, proxies may be voted for another person nominated by the Board, the position may become vacant or the size of the Board may be reduced.
When evaluating director nominees for election at our Annual Meeting, our Governance Committee seeks to nominate a Board that will be most effective in overseeing the affairs of the Company, and in particular, in supporting the development and execution of the Companys strategic plan. See Item 1. BusinessGeneralBusiness Strategy on pages 12 and 13 of our Annual Report on Form 10-K for the year ended December 31, 2018 for a discussion of the Companys current strategic focus.
Our Governance Committee regularly engages in discussion regarding Board succession planning and Board refreshment, frequently assessing whether our director nominees possess an appropriate diversity of experience, skills, perspective and tenure to complement one anothers strengths and to help drive our results. As part of this process and following a comprehensive director search process conducted with assistance from Spencer Stuart, a leading third-party search firm, the Governance Committee nominated Debra Hess and David H. Stevens to join the Board. Upon this recommendation, on March 19, 2019, the Board appointed Ms. Debra Hess and Mr. Stevens to the Board, strengthening the qualifications and diversity of our Board and further aligning the Boards skills with our strategic position as a market-leading residential mortgage and real estate services enterprise. The Board believes that the addition of two new highly qualified directors, with leadership experience, strategic insight, and deep experience in the mortgage and real estate industries and government affairs, reinforces the Companys commitment to strong corporate governance and enhancing stockholder value. As part of our Board orientation process, Ms. Debra Hess and Mr. Stevens are requested to attend all meetings of the Boards standing committees for a period of one year. In addition, the Board expects to appoint Ms. Debra Hess and Mr. Stevens to one or more standing committees in May 2019.
4 2019 Proxy Statement |
Proposal 1 Election of Directors
In addition to diversity of experience, skills and perspective, our Board believes diversity in tenure also is important in effectively overseeing our businesses. The performance of our mortgage insurance (MI) and our mortgage, real estate and title services (Services) businesses can be impacted significantly by mortgage credit and housing market cycles. The Board believes that the institutional knowledge acquired through previous credit and market cycles in our industries is critical to effectively overseeing our risk management going forward. As a result, the Governance Committee seeks to nominate a Board that has a diversity of tenure. The following represents our current Board tenure, reflecting the balance between engaging new talent and maintaining institutional knowledge of our businesses and the markets in which they operate.
The Governance Committee assesses the overall composition of the Board at least annually and regularly considers new potential nominees for director who would enhance the Boards oversight objectives. |
* Upon Mr. Hopkinss retirement at the 2019 |
2019 Proxy Statement 5 |
Proposal 1 Election of Directors
Biographical Information for Director Nominees
Biographical information for each of the director nominees is provided below along with a discussion of each nominees specific experience, qualifications, attributes or skills that have led the Board to conclude that he or she should be nominated for election or reelection.
Herbert Wender
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Chairman of the Board
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Mr. Wender, 81, has served as non-executive Chairman of our Board since May 2005. He also previously served in this role from August 1992 to May 1999 and as Lead Director from May 1999 until his current appointment. Mr. Wender served as Chairman of the Board and Chief Executive Officer of Radian Guaranty Inc., our principal MI subsidiary (Radian Guaranty), from June 1983 until July 1992. Between 1998 and 2001, Mr. Wender also served as a director and Vice Chairman of LandAmerica Financial Group, Inc., a title insurance company. Before that, he was Chairman of the Board and Chief Executive Officer of LandAmerica Financial Groups predecessor title insurance company, Commonwealth Land Title Insurance Company. He has been a director of Radian since July 1992.
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Skills and Qualifications Mr. Wenders extensive leadership experience on our Board, his intimate familiarity with Radian, his prior management experience as Chief Executive Officer of Radian Guaranty and his industry experience give him the expertise, skills and judgment to serve as a director and non-executive Chairman.
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David C. Carney
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Committees: Audit (Chair) Credit Management Governance |
Mr. Carney, 81, most recently served as President of Carney Consulting, an accounting consulting firm, from March 1995 until 2018. He served as Executive Vice President of Jefferson Health Systems, the parent company of a regional network of health care providers, from 1996 until 1999. Before that, he served as Chief Financial Officer of CoreStates Financial Corp, a NYSE banking and financial services holding company, from 1991 to 1995. Mr. Carney is a certified public accountant and served as Philadelphia Area Managing Partner for Ernst & Young LLP from 1980 through 1991. Mr. Carney served as Chairman of the Board of ImageMax, Inc., a publicly-held provider of outsourced document management solutions, from 1999 through 2003 and as ImageMaxs acting CEO, from June 2000 to June 2001. Mr. Carney also served as a director of CSAA Insurance Group, an AAA insurer, from 2011 through 2014. Mr. Carney served as a director of AAA Club Alliance from 1996 until May 2018 and as a director of AAA Club Partners from 2005 until May 2018. He has been a director of Radian since November 1992.
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Skills and Qualifications Mr. Carneys service as a director of Radian through various business and economic cycles gives him significant knowledge of Radian, its history and its businesses. Mr. Carneys experience as a CPA, as managing partner of the Philadelphia area offices of one of the big four nationally recognized accounting firms, as a Chief Financial Officer of a large, publically-traded financial institution and as Chairman of the Audit Committee of a AAA insurer give him particular financial expertise and management experience relevant to his qualifications as a director and as the Chairman of the Audit Committee of our Board. In addition, Mr. Carneys consulting experience and service on other boards of directors give him a broad perspective and insight on effective running and advising a business.
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6 2019 Proxy Statement |
Proposal 1 Election of Directors
Howard B. Culang
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Committees: Credit Management (Chair) Compensation and Human Resources Governance |
Mr. Culang, 72, served as President of Laurel Corporation, a financial services firm, from January 1996 through December 2011. Mr. Culang was a Managing Member of JH Capital Management LLC, a management company for a private equity fund, from July 1998 to December 2010, and of Cognitive Capital Management LLC, a management company for a fund of hedge funds, from April 2001 to December 2005. In the past, he has served as Vice Chairman of Residential Services Corporation of America, the holding company for Prudential Home Mortgage Company, a mortgage lending company, Lenders Service, Inc., a mortgage services company, and Prudential Real Estate Affiliates, a real estate services company, and as a Managing Director and member of the Executive Committee of the Prudential Home Mortgage Company, where he worked from November 1985 to December 2005. Mr. Culang also held a number of senior management positions with Citibank, N.A., including as a Senior Credit Officer. Mr. Culang currently serves as a director of Phase Change Software, LLC (formerly ioSemantics, LLC), a privately-owned artificial intelligence (AI) software company. He has been a director of Radian since June 1999.
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Skills and Qualifications Mr. Culangs service as a director of Radian through various business and economic cycles gives him significant knowledge of Radian, its history and its businesses. In addition, his significant management experience in the mortgage and financial services industries gives him valuable expertise and a broad understanding of the mortgage and real estate businesses. These experiences are particularly relevant in Mr. Culangs role as the Chair of the Credit Management Committee of our Board. His role as a director of an AI software company has given him important insights into emerging technology trends in the financial services sector, including AI and cyber security that are valuable in overseeing our technology initiatives.
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Debra Hess
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Ms. Debra Hess, 54, served as Chief Financial Officer of NorthStar Asset Management Group, a global asset management firm focused on strategically managing real estate and other investment platforms, from July 2011 until January 2017 and as Chief Financial Officer of NorthStar Realty Finance Corp., a real estate investment company, from July 2011 until January 2017. Additionally, from 2011 until 2015, Ms. Hess held various other positions, including Chief Financial Officer and Treasurer of companies owned by Northstar Asset Management Group, including NS Income, NS Healthcare, NS Income II and NorthStar/RXR. Prior to joining NorthStar, Ms. Hess served as Chief Financial Officer of H/2 Capital Partners, a privately owned fund sponsor that invests in real estate related assets, from August 2008 to June 2011. From March 2003 to July 2008, Ms. Hess was a managing director at Fortress Investment Group, an investment management firm, where she also served as Chief Financial Officer of Newcastle Investment Corp., a Fortress portfolio company and a NYSE-listed REIT. From 1993 to 2003, Ms. Hess served in various positions at Goldman, Sachs & Co., including as Vice President in Goldman Sachs Principal Finance Group and as a Manager of Financial Reporting in Goldman Sachs Finance Division. Ms. Hess currently serves on the board of directors of AG Mortgage Investment Trust, Inc., a publicly traded mortgage REIT. She also serves on the Board of CenterPoint Properties Trust, an acquiror, developer and manager of industrial real estate and transportation infrastructure. She has been a director of Radian since March 2019.
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Skills and Qualifications Ms. Hess extensive banking, finance and real estate experience gives her valuable insight into our businesses and the industries in which we operate. In addition, her roles as the Chief Financial Officer of various publicly traded companies and executive management roles with companies in the financial services and mortgage and real estate sectors provide her with significant financial, accounting and compliance expertise in areas that are valuable to the Boards oversight responsibilities and in supporting our strategic focus.
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2019 Proxy Statement 7 |
Proposal 1 Election of Directors
Lisa W. Hess
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Committees: Finance and Investment (Chair) Compensation and Human Resources Governance
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Ms. Lisa Hess, 63, has been President and Managing Partner of SkyTop Capital Management LLC (SkyTop), an investment fund, since October 2010. From October 2002 to December 2008, she was the Chief Investment Officer of Loews Corporation, a diversified holding company, where she was responsible for managing approximately $50 billion in assets. Ms. Hess was a Founding Partner of Zesiger Capital Group, a diversified money manager, and also has held positions at First Boston Corporation, an investment bank, Odyssey Partners, a private equity firm, and Goldman, Sachs & Co. She has served on the U.S. Treasury Debt Advisory Committee and the Federal Reserve Bank of New York Investors Advisory Committee. Since June 2009, Ms. Hess has been a Trustee of Teachers Insurance and Annuity Association (TIAA), a financial services organization. She has been a director of Radian since February 2011.
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Skills and Qualifications Ms. Hess extensive experience managing financial assets, including in her current role with SkyTop, and previously as a chief investment officer of Loews Corporation, and as a member of various investment and advisory committees, gives her a broad range of expertise with respect to finance, investments and the capital markets that is particularly beneficial to the Board and in her role as Chair of the Finance and Investment Committee of the Board. Her position as President and Managing Partner of SkyTop brings a current, day-to-day business perspective that is valuable in enhancing Board oversight in todays operating environment. In addition, her experience serving on the corporate governance committee at TIAA brings an added perspective and insight to the Boards consideration of corporate governance issues and the concerns of institutional shareholders.
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Gaetano Muzio
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Committees: Compensation and Human Resources Finance and Investment
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Mr. Muzio, 65, is a Principal and co-founder of Ocean Gate Capital Management, LP (Ocean Gate), an investment fund. For 27 years prior to founding Ocean Gate, Mr. Muzio worked at Goldman, Sachs & Co. in various positions, including serving as a Managing Director from 1996 until 2004. In 1986, he became the first Global Mortgage and Asset Backed Sales Manager responsible for creating the sales team and strategy for, and was also one of the founding members of, Goldmans Mortgage and Asset Backed Department. In 1990, he became a general partner and Co-Head of Goldmans Mortgage Department, with responsibilities for overseeing trading, risk management, sales, research, structured finance and compliance for the department. He has been a director of Radian since May 2012.
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Skills and Qualifications Mr. Muzio possesses a broad understanding of the mortgage industry. In addition, his significant experience in finance, risk management, corporate governance and strategy gives him extensive expertise in several areas that are valuable to the Boards oversight responsibilities.
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8 2019 Proxy Statement |
Proposal 1 Election of Directors
Gregory V. Serio
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Committees: Governance (Chair) Audit Credit Management
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Mr. Serio, 57, serves as a partner with Park Strategies, LLC (Park Strategies), a management and government relations consulting firm, since January 2005. He currently serves as the head of Park Strategies risk and insurance management practice group. He is also a partner in the DAmato Law Group, a New York-based legal practice. Prior to joining Park Strategies, Mr. Serio served as Superintendent of Insurance for the State of New York from May 2001 to January 2005. From January 1995 until his appointment as Superintendent in 2001, Mr. Serio served as First Deputy Superintendent and General Counsel of the New York Insurance Department. Mr. Serio also has served as the Chairman of the Government Affairs Task Force of the National Association of Insurance Commissioners (NAIC) and as a member of and NAIC representative on the Financial Services and Banking Information Infrastructure Committee of the United States Treasury. He was also a commissioner of the International Commission on Holocaust Era Insurance Claims. He is also a trustee of the Senior Health Insurance Plan Trust and director of the Senior Health Insurance Company of Pennsylvania, two positions to which he was appointed by the Commissioner of Insurance of the Commonwealth of Pennsylvania. He has been a director of Radian since May 2012.
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Skills and Qualifications From both his private and public sector roles, Mr. Serio possesses extensive knowledge and experience in the insurance industry. His in-depth understanding of insurance regulatory matters, including financial and market conduct examinations and other compliance-related matters, combined with his experience in risk management and corporate governance matters, further strengthens the Boards oversight and perspective in these areas. He is also a Board Leadership Fellow of the National Association of Corporate Directors, which, together with his current and past work experiences, provides him with especially valuable expertise in his role as Chair of the Governance Committee of our Board.
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Noel J. Spiegel
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Committees: Audit Credit Management Finance and Investment
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Mr. Spiegel, 71, was a partner at Deloitte & Touche, LLP (Deloitte) where he practiced from September 1969 until May 2010. In his career at Deloitte, he served in numerous management positions, including as Deputy Managing Partner; a member of Deloittes Executive Committee; Managing Partner of Deloittes Transaction Assurance practice, Global Offerings and International Financial Reporting Standards practice and Technology, Media and Telecommunications practice (Northeast Region); and as Partner-in-Charge of Audit Operations in Deloittes New York Office. Mr. Spiegel currently serves as Lead Independent Director and chairs the audit committee of American Eagle Outfitters, Inc. Mr. Spiegel also currently serves on the board and chairs the audit committee of vTv Therapeutics, Inc. He has been a director of Radian since February 2011.
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Skills and Qualifications Mr. Spiegels significant prior service as a partner at Deloitte, and his current experience as chair of audit committees of publicly held companies, provides him with a depth of experience in management, financial reporting, risk management, public accounting and finance that is of significant value and relevance to the Board and in particular the Audit Committee. In addition, his work with many public companies as an independent auditor provides him with a unique perspective and depth of insight with respect to corporate governance, Board leadership and corporate strategy.
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2019 Proxy Statement 9 |
Proposal 1 Election of Directors
David H. Stevens
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Mr. Stevens, 62, recently served as CEO of the Mortgage Bankers Association, a national association representing the real estate finance industry, from May 2011 until his retirement in September 2018. Prior to this role, from 2009 until March 2011, Mr. Stevens served in the Obama Administration as the U.S. Assistant Secretary of Housing and FHA Commissioner at HUD (US Department of Housing and Urban Development). Mr. Stevens has also served in a variety of key mortgage and real estate industry leadership roles, including as President and Chief Operating Officer of the Long & Foster Companies, Inc., including its core real estate company and all affiliated businesses of mortgage, settlement services and insurance, Executive Vice President of Wholesale Lending at Wells Fargo Home Mortgage, a mortgage lending division, and Senior Vice President in charge of Single Family Lending at Freddie Mac. Mr. Stevens currently serves on the board of directors of Dynex Capital, Inc., a publicly traded REIT. In addition, he is a Senior Advisor to Mortgage Media, a website focused on the mortgage and real estate industry, and currently provides advisory services in real estate finance and provides technical and strategic consultation to financial institutions and intermediaries. He has been a director of Radian since March 2019.
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Skills and Qualifications With over 30 years of leadership experience in mortgage finance, real estate, capital markets and housing policy, Mr. Stevens possesses a deep understanding of all aspects of the mortgage and real estate industries. His leadership experience and broad relationships in the industries in which we operate, combined with his knowledge of housing regulatory and housing finance policy issues, provide him with expertise and insights that are valuable to our Boards oversight responsibilities and the Companys operations and strategic objectives.
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Richard G. Thornberry
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Mr. Thornberry, 60, has served as Radians Chief Executive Officer since March 2017. Before joining Radian, from 2006 until 2017, Mr. Thornberry served as the Chairman and Chief Executive Officer of NexSpring Group, LLC (NexSpring Group), a company that he co-founded in 2006. NexSpring Group has provided mortgage industry advisory and technology services to private equity investors, mortgage lenders, financial institutions, mortgage investors and other mortgage industry participants. Mr. Thornberry also has served as the Chairman and Chief Executive Officer of NexSpring Financial, LLC, an early stage fintech company that he co-founded to focus on improving the overall value proposition for all participants in a residential mortgage origination transaction. Prior to founding NexSpring Group, from 1999 until 2005, Mr. Thornberry served as President and Chief Executive Officer of Nexstar Financial Corporation, an end-to-end mortgage business process outsourcing firm, which he co-founded in 1999 and sold to MBNA Home Finance in 2005. Mr. Thornberry has also held executive positions with MBNA Home Finance from 2005 until 2006, Citicorp Mortgage Inc. from 1996 until 1998 and Residential Services Corporation of America/Prudential Home Mortgage Company from 1987 until 1996. Mr. Thornberry currently serves on the board of directors of the Mortgage Bankers Association and as an executive council member of the Housing Policy Council. Mr. Thornberry began his career as a certified public accountant at Deloitte where he primarily worked with financial services clients and entrepreneurial businesses. He has been a director of Radian since March 2017.
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Skills and Qualifications Mr. Thornberrys broad understanding of the mortgage and real estate industries and experience leading innovative mortgage industry businesses gives him a unique perspective and set of skills to lead our Company and contribute to the Board.
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10 2019 Proxy Statement |
Proposal 1 Election of Directors
Additional Information Regarding Directors
For additional information regarding our Board, its standing committees, and our standards for corporate governance and director independence, refer to the sections entitled Corporate Governance and Board Matters and Compensation of Executive Officers and DirectorsDirector Compensation below.
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Radians Board of Directors recommends a vote FOR each of the director nominees. Signed proxies will be voted FOR each of the director nominees unless a stockholder gives other instructions on the proxy card. |
2019 Proxy Statement 11 |
Proposal 2 Advisory Vote to Approve the Compensation of the Companys Named Executive Officers
2019 Proxy Statement 13 |
Proposal 2 Advisory Vote to Approve the Compensation of the Companys Named Executive Officers
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Radians Board of Directors recommends a vote FOR approval of the compensation of the Companys Named Executive Officers as disclosed in this proxy statement. Signed proxies will be voted FOR approval unless a stockholder gives other instructions on the proxy card.
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14 2019 Proxy Statement |
PROPOSAL 3 RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
The Audit Committee of our Board is responsible for selecting an independent registered public accounting firm to perform the annual audit of our financial statements. The Audit Committees appointment of PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for 2019 is being submitted to our stockholders for ratification. PwC has been Radians independent registered public accounting firm since 2007. The Audit Committee believes that the continued retention of the independent registered public accounting firm is in the best interests of the Company and its stockholders. A representative of PwC is expected to attend our Annual Meeting, will have an opportunity to make a statement if he or she desires, and will be available to respond to questions.
If the stockholders fail to ratify the appointment of PwC, the Audit Committee will reconsider whether to retain the firm. Regardless of whether the stockholders ratify the appointment of PwC at the Annual Meeting, the Audit Committee, in its discretion, may retain PwC or select a new independent registered public accounting firm at any time if it determines that doing so would be in the Companys best interests and those of our stockholders.
Independent Registered Public Accounting Firm Fees and Services
The following is a summary of the fees billed for professional services rendered to Radian by PwC for the fiscal years ended December 31, 2018 and December 31, 2017:
Type of Fees
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2018
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2017
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Audit Fees
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$ | 3,445,486 | $ | 3,567,726 | ||||
Audit-Related Fees
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201,787 | 180,083 | ||||||
Tax Fees
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462,150 | 315,557 | ||||||
All Other Fees
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26,740 | 86,207 | ||||||
Total
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$ | 4,136,163 | $ | 4,149,573 |
For purpose of the above table, in accordance with the SECs definitions and rules:
| Audit Fees are fees for professional services for the audit of the financial statements included in our Annual Report on Form 10-K (which includes an audit of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002), for the review of our financial statements included in our Quarterly Reports on Form 10-Q, for the review of registration statements filed under the Securities Act of 1933, as amended (the Securities Act) and for services that normally are provided in connection with statutory and regulatory filings. |
| Audit-Related Fees, if any, are fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and which are not reported under Audit Fees, including services related to consultation on financial accounting and reporting matters. |
| Tax Fees are fees for professional services for tax compliance, tax advice and tax planning. |
| All Other Fees are fees for products and services provided by our independent registered public accounting firm other than those services reported above. For both 2018 and 2017, All Other Fees included miscellaneous advisory services fees, as well as license fees for accounting research software products. |
2019 Proxy Statement 15 |
Proposal 3 Ratification of the Appointment of Pricewaterhousecoopers LLP
In addition to retaining PwC to audit our consolidated financial statements for 2018, we retained PwC to provide other auditing and advisory services as discussed above. We understand the need for PwC to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of PwC, our Audit Committee is required to pre-approve all non-audit work performed by PwC in accordance with applicable SEC rules and our pre-approval policy. All services provided by PwC and listed in the table above were approved by the Audit Committee in accordance with our pre-approval policy.
The Audit Committee considered the nature and proposed extent of the non-audit services provided by PwC and determined that those services were in compliance with the provision of independent audit services by the firm.
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Radians Board of Directors recommends a vote FOR ratification of the appointment of PricewaterhouseCoopers LLP as Radians independent registered public accounting firm for the year ending December 31, 2019. Signed proxies will be voted FOR ratification unless a stockholder gives other instructions on the proxy card.
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16 2019 Proxy Statement |
The following information is provided with respect to each of our current executive officers other than our Chief Executive Officer whose information is set forth under Proposal 1Election of Directors. Our executive officers are appointed by our Board to serve in their respective capacities until their successors are duly appointed and qualified or until their earlier resignation or removal.
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J. Franklin Hall
Senior Executive Vice President and Chief Financial Officer
Age: 50 |
Mr. Hall joined Radian in December 2014 and became Radians Chief Financial Officer on January 1, 2015. Prior to joining Radian, Mr. Hall served in a number of different roles with First Financial Bancorp, a bank holding company based in Cincinnati, Ohio, including serving as Executive Vice President and Chief Financial Officer from 2005 until 2012, and then as Executive Vice President, Chief Financial Officer and Chief Operating Officer from 2012 until 2013. Mr. Hall began his career at Ernst & Young LLP. | ||
|
Derek V. Brummer
Senior Executive Vice President, Mortgage Insurance and Risk Services
Age: 48 |
Mr. Brummer was appointed to his current role in 2018 and is responsible for all mortgage insurance, mortgage credit risk products and related operations. Prior to his current role, Mr. Brummer served as Executive Vice President, Chief Risk Officer of the Company and also held several positions with Radian Asset Assurance, our former financial guaranty business that was sold to Assured Guaranty Corp. in April 2015. Prior to joining Radian in 2002, Mr. Brummer was a corporate associate at Allen & Overy, and Cravath, Swaine & Moore, both in New York. | ||
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Edward J. Hoffman
Senior Executive Vice President, General Counsel and Corporate Secretary
Age: 45 |
Mr. Hoffman was appointed General Counsel and Corporate Secretary of Radian in 2008. Mr. Hoffman also provides executive oversight for the Companys compensation and human resources and government relations functions. Prior to joining Radian in 2005, Mr. Hoffman practiced in the Corporate and Securities Group of Drinker Biddle & Reath LLP in Philadelphia. Mr. Hoffman also currently serves as our Corporate Responsibility Officer. | ||
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Brien J. McMahon
Senior Executive Vice President and Chief Franchise Officer
Age: 59 |
Mr. McMahon joined Radian in 2010 as Executive Vice President, Chief Franchise Officer. He led our Mortgage Insurance sales group until May 2017, when he assumed responsibility for all of our enterprise-wide sales. Before joining Radian, Mr. McMahon served as executive vice president for Realogy Franchise Group (Realogy), where he directed sales, training and administration for multiple premier real estate brands including: Better Homes and Gardens Real Estate, Century 21 Real Estate LLC, Coldwell Banker, Coldwell Banker Commercial, ERA, and Sothebys International Realty. Prior to Realogy, Mr. McMahon served 14 years with PHH US Mortgage in a variety of roles, including senior vice president of national sales. | ||
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Eric R. Ray
Senior Executive Vice President, Technology and Transaction Services
Age: 57 |
Mr. Ray joined Radian in his current role in 2018 and is responsible for the overall vision, strategy and leadership for our enterprise-wide information technology function and for leading the Companys Services businesses. Prior to joining Radian, Mr. Ray served in various roles with IBM Corporation (IBM) in Armonk, New York from 1983 until 2018. Most recently, Mr. Ray served as IBMs General Manager, Global Technology Services from 2015 until 2018 and was responsible for the IBM North American technology consulting business, project based services and enterprise-wide technology offerings. Prior to that, he served as IBMs General Manager, Global Financial Services Sector from 2009 until 2014 and General Manager, Financial Services Sector from 2007 until 2009. | ||
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Robert J. Quigley
Senior Vice President, Controller and Chief Accounting Officer
Age: 47 |
Mr. Quigley was appointed Senior Vice President and Controller (serving as the Companys principal accounting officer) in November 2018. Mr. Quigley joined Radian in 2009 as Senior Vice President, Assistant Corporate Controller and most recently served as Radians Senior Vice President, Financial Planning and Analysis prior to his current appointment. Prior to joining Radian, Mr. Quigley spent 10 years with Capmark Financial Group, Inc., a global provider of financial services to investors in commercial real estate-related assets, where he held positions of increasing responsibility leading to his appointment as Senior Vice President, Chief Accounting Officer, North America. Mr. Quigley began his career in public accounting and auditing with KPMG US LLP and then Ernst & Young LLP. |
24 2019 Proxy Statement |
BENEFICIAL OWNERSHIP OF COMMON STOCK
Security Ownership of Management
The following table shows all shares of our common stock that were beneficially owned, as of March 10, 2019, by: (i) each of our current directors, nominees for director at the Annual Meeting and our NEOs; and (ii) all of our current directors and executive officers as a group. In general, a person beneficially owns shares if he or she has, or shares with others, the right to vote or dispose of them, or if he or she has the right to acquire them within 60 days of March 18, 2019 (such as by exercising options).
Name (1) |
Shares Beneficially Owned (#) (2)
|
Percent of Class
|
||||||
Herbert Wender
|
563,121 | * | ||||||
David C. Carney
|
232,461 | * | ||||||
Howard B. Culang
|
234,476 | * | ||||||
Debra Hess
|
0 | * | ||||||
Lisa W. Hess
|
97,378 | * | ||||||
Stephen T. Hopkins
|
236,426 | * | ||||||
Gaetano Muzio
|
97,964 | * | ||||||
Gregory V. Serio
|
76,582 | * | ||||||
Noel J. Spiegel
|
143,760 | * | ||||||
David H. Stevens
|
0 | * | ||||||
Richard G. Thornberry
|
105,671 | * | ||||||
Derek V. Brummer
|
120,346 | * | ||||||
J. Franklin Hall
|
25,808 | * | ||||||
Edward J. Hoffman
|
128,898 | * | ||||||
Brien J. McMahon
|
111,198 | * | ||||||
All current directors and executive officers as a group (17 persons)
|
2,190,612 | 1.025 | % |
* | Less than one percent of class. Percentages are calculated in accordance with Rule 13d-3 under the Exchange Act. |
(1) | The address of each person listed is c/o Radian Group Inc., 1500 Market Street, Philadelphia, Pennsylvania 19102. |
(2) | Each individual (including each current executive officer) has or is entitled to have within 60 days of March 10, 2019, sole voting or dispositive power with respect to the shares reported as beneficially owned, other than: (i) Mr. Hopkins, who shares voting and dispositive power with his spouse with respect to 10,000 of the shares reported as beneficially owned; (ii) Mr. Spiegel, whose spouse owns 10,000 of the shares reported as beneficially owned and as to which shares Mr. Spiegel disclaims beneficial ownership; and (iii) Mr. Hoffman, who shares voting and dispositive power with his spouse with respect to 19,500 of the shares reported as beneficially owned. In addition to shares owned outright, the amounts reported include: |
| Shares of our common stock allocable to our NEOs based on their holdings in the Radian Group Inc. Stock Fund under the Radian Group Inc. Savings Incentive Plan (the Savings Plan) as of March 10, 2019. |
| Shares that may be acquired within 60 days of March 10, 2019 through the exercise of non-qualified stock options, as follows: Mr. Brummer24,920 shares; Mr. Hoffman63,340 shares; and Mr. McMahon68,270 shares; and all current directors and executive officers as a group161,740 shares. |
| Shares that may be acquired within 60 days of March 10, 2019 upon the conversion of restricted stock units awarded to our non-executive directors and executive officers as follows: Mr. Wender312,991 shares; Mr. Carney167,706 shares; Mr. Culang167,706 shares; Ms. Lisa Hess97,378 shares; Mr. Hopkins167,706 shares; Mr. Muzio92,964 shares; Mr. Serio76,582 shares; Mr. Spiegel113,760 shares; |
2019 Proxy Statement 25 |
Beneficial Ownership of Common Stock
Mr. Brummer8,468 shares; Mr. Hall7,111 shares; Mr. Hoffman7,111 shares; Mr. McMahon6,447 shares; Mr. Thornberry41,953 shares; and all current directors and executive officers as a group1,273,410 shares. All vested restricted stock units granted to a non-executive director will be converted into shares of our common stock upon the directors departure from our board. In addition to shares payable for vested restricted stock units, the amounts reported in the above table also include all shares payable upon retirement to those directors who are or will be eligible to retire within 60 days of March 10, 2019. |
| Shares that may be issued within 60 days of March 10, 2019 upon the conversion of phantom stock awards granted to our non-executive directors as follows: Mr. Wender57,459 shares; Mr. Carney59,555 shares; Mr. Culang58,720 shares; Mr. Hopkins58,720 shares; and all current directors and executive officers as a group234,454 shares. All vested phantom stock awards granted to a director will be converted into shares of our common stock upon the directors departure from our board. The amounts reported in the above table include all shares payable upon retirement to those directors who are or will be eligible to retire within 60 days of March 10, 2019, including dividend equivalents to be settled in shares of our common stock upon conversion of a directors phantom shares. |
Security Ownership of Certain Stockholders
The following table provides information concerning beneficial ownership of our common stock by the only persons shown by our records or the SECs public records as beneficially owning more than 5% of our common stock. For purposes of determining the existence and identity of, and the amount of common stock owned by, any stockholder, we rely on filings with the SEC of Schedules 13D, 13F and 13G (or any similar filings) as of any date, subject to our actual knowledge of the ownership of our common stock.
Name and Business Address
|
Shares Beneficially Owned (#)
|
Percent of Class*
|
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The Vanguard Group (1) |
19,533,349 | 9.15 | % | |||||
100 Vanguard Blvd. |
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Malvern, PA 19355
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FMR LLC (2) |
19,158,659 | 8.98 | % | |||||
245 Summer Street |
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Boston, MA 02110
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BlackRock, Inc. (3) |
15,678,772 | 7.34 | % | |||||
55 East 52nd Street |
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New York, NY 10055 |
* | Based on shares of common stock outstanding at December 31, 2018. |
(1) | Based on a Schedule 13G/A filed with the SEC on February 12, 2019, The Vanguard Group reports that it has sole dispositive power with respect to 19,312,713 shares, sole voting power with respect to 214,128 shares, shared dispositive power with respect to 220,636 shares and shared voting power with respect to 29,672 shares. These shares are beneficially owned by funds and accounts managed by The Vanguard Group, Inc. and its subsidiaries. |
(2) | Based on a Schedule 13G/A filed with the SEC on February 13, 2019. These securities are beneficially owned by FMR LLC and various investment management subsidiaries and affiliates of FMR LLC. FMR LLC reports that it has sole dispositive power with respect to 19,158,659 shares and sole voting power with respect to 2,761,633 shares. Members of the Johnson family, including Abigail P. Johnson, a Director, Chairman and the Chief Executive Officer of FMR LLC, may be deemed to control FMR LLC. |
(3) | Based on a Schedule 13G/A filed with the SEC on February 11, 2019, BlackRock, Inc. reports that it has sole dispositive power with respect to 15,678,772 shares and sole voting power with respect to 14,895,881 shares. These shares are beneficially owned by funds and accounts managed by BlackRock, Inc. and its subsidiaries. |
26 2019 Proxy Statement |
Beneficial Ownership of Common Stock
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC and to furnish copies of these reports to us. Based on our review of the copies of the reports we have received, and written representations received from our executive officers and directors with respect to the filing of reports on Forms 3, 4 and 5, we believe that all filings required to be made during 2018 were made on a timely basis.
2019 Proxy Statement 27 |
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis includes forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the U.S. Private Securities Litigation Reform Act of 1995. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of managements current views and assumptions with respect to future events, and are not a guarantee of future performance. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Cautionary Note Regarding Forward Looking Statements-Safe Harbor Provisions and the Risk Factors detailed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date of this Compensation Discussion and Analysis. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason. |
CD&A Roadmap
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53 | ||||||
In this CD&A, we discuss the executive compensation program for our NEOs, including our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers. For 2018, our NEOs were as follows:
Our Named Executive Officers*
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Richard G. Thornberry Chief Executive Officer |
J. Franklin Hall Senior Executive Vice President, Chief Financial Officer (our principal financial officer)
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Derek V. Brummer Senior Executive Vice President, Mortgage Insurance and Risk Services |
Edward J. Hoffman Senior Executive Vice President, General |
Brien J. McMahon Senior Executive Vice President, Chief |
* | Please see Executive Officers for additional information regarding our NEOs. |
I. Compensation Principles and Objectives
Our executive compensation program is designed under the direction of the Compensation and Human Resources Committee of our Board (the Committee) to attract, motivate and retain high quality executive officers and to align our pay-for-performance philosophy with our overall business and strategic objectives. This pay-for-performance philosophy is intended to ensure that our NEOs interests are aligned with those of our stockholders, while not encouraging inappropriate actions, including unnecessary or excessive risk taking. The Committee has developed a set of principles and objectives to guide decisions about how to compensate executive officers appropriately for their contributions toward achieving our strategic, operational and financial objectives. Specifically, we believe our executive compensation program should:
| Focus executives on long-term performance that aligns with stockholders interests; |
| Support the execution of our business strategy and performance; |
| Maintain an appropriate balance between short-term and long-term compensation, while weighting total compensation in favor of longer-term variable pay; |
| Manage risk with appropriate protection and controls; |
28 2019 Proxy Statement |
Compensation of Executive Officers and Directors
| Maintain pay practices that are externally competitive and reasonable; and |
| Remain flexible to respond to changes in our businesses, strategies and current market developments. |
As background for the discussion that follows, we provide the following highlights regarding our 2018 performance and the material decisions affecting the 2018 compensation program for our NEOs.
Our 2018 Performance
$606.0 million
Net Income |
$484.9 million increase in net income compared to $121.1 million in 2017. Strong net income in 2018 driven by, among other items: (i) an increase in net premiums earned due to growth in our higher return monthly premium business; (ii) continued favorable loss trends, including reduced new defaults and positive reserve development; and (iii) an increase in investment income. | $104.6 million
Provision for Losses |
23% improvement over 2017, primarily due to favorable reserve developments and lower new defaults in 2018 | |||
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$2.77
Diluted Net Income Per Share |
Compared to diluted net income per share of $0.55 in 2017, which was negatively impacted by the impairment of goodwill and other acquired intangible assets related to our Services business. | 5% increase
in New Insurance |
NIW for the full year 2018 set a company record for NIW written on a flow basis with $56.5 billion of NIW, compared to $53.9 billion in 2017
21% increase in NIW for our higher return, borrower-paid MI business compared to 2017 | |||
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$2.69
Adjusted Diluted Net Operating Income Per Share (1)
|
48% increase compared to adjusted diluted net operating income per share of $1.82 in 2017 | 10% increase
in Primary Insurance |
$221.4 billion as of December 31, 2018, compared to $200.7 billion as of December 31, 2017 | |||
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18.7%
Return on Equity |
Compared to 4.1% return on equity in 2017 | 8% increase
in Net Mortgage |
Over $1 billion in 2018, compared to $932.8 million in 2017 | |||
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18.2%
Adjusted Net Operating |
Compared to 13.7% adjusted net operating return on equity in 2017 | 18% increase
in Book Value per |
Book value per share of $16.34 as of December 31, 2018, compared to $13.90 as of December 31, 2017 |
✓ | Completed a series of capital actions in 2018 that enhanced our return on capital, increased Radian Guarantys financial position under the GSEs Private Mortgage Insurer Eligibility Requirements or PMIERs, and strengthened Radian Groups liquidity position, including most notably, the completion of the MI industrys first |
(1) | On a consolidated basis, adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity are non-GAAP financial measures. See pages 89 through 93 of our Annual Report on Form 10-K for the year ended December 31, 2018, for definitions of our non-GAAP financial measures, including reconciliations of the most comparable GAAP measures of consolidated pretax income, diluted net income per share and return on equity, to our non-GAAP financial measures for the consolidated company of adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity. |
2019 Proxy Statement 29 |
Compensation of Executive Officers and Directors
combined insurance-linked note (ILN) and Excess-of-Loss (XOL) reinsurance transaction and Radian Guarantys $450 million return of capital to Radian Group. |
✓ | Leveraged our analytics-driven risk management team and platform to drive growth in the economic value of our MI portfolio, to evolve our risk-based pricing platforms, and to execute high-value risk distribution strategies for reducing through the cycle volatility and risks in our performance. |
✓ | Continued to position our Services business for profitable growth through investments in talent, facilities, technology, and three strategic acquisitions. |
✓ | Achieved a three-year total stockholder return (TSR) of 22.2% and earned a rating agency upgrade in 2018, including for Radian Guaranty, our principal MI subsidiary. |
Please see IV. Primary Components of CompensationB. Short-Term Incentive Program2018 Short-Term Incentive Analysis for additional information regarding our 2018 performance.
Our 2018 Executive Compensation Program
➣ | NEO Compensation Heavily Weighted Towards Performance-Based, Variable Compensation. |
Fixed compensation has continued to represent a limited portion of our NEOs total compensation. Base salary represented only 15% of Mr. Thornberrys 2018 total target compensation and, on average, only 30% of the total target compensation for our other NEOs. The remaining target compensation of our NEOs was tied to, and is contingent upon, Company and individual performance. The following charts highlight, for the CEO and our other NEOs, the percentage of 2018 total target compensation that was attributable to each primary component of compensation (average of each component for the other NEOs). The information presented is based on components of compensation at target, and therefore, not directly comparable to amounts set forth in the 2018 Summary Compensation Table.
30 2019 Proxy Statement |
Compensation of Executive Officers and Directors
➣ | 2018 STI Awards Funded Above Target Due to Our Strong 2018 Performance. |
As discussed above, the Company had an exceptional performance year, with a 48% year-over-year increase in consolidated adjusted diluted net operating income per share, growth in book value per share, improved financial strength and flexibility, record flow NIW for the third consecutive year and growth in our insurance-in-force to over $220 billion, one of the largest portfolios in the MI industry. Further, with respect to capital management, we executed our industrys first-ever simultaneous ILN and XOL reinsurance transaction and improved our financial flexibility with Radian Guarantys $450 million return of capital to Radian Group. In recognition of these achievements, the independent directors awarded Mr. Thornberry a STI award of 185% of target and the Committee awarded STI awards to our other NEOs of between 165% and 186% of target. See IV. Primary Components of CompensationB. Short-Term Incentive Program2018 Short-Term Incentive Analysis for additional information regarding the 2018 STI awards. See II. Executive SummaryOur 2018 Performance for a description of adjusted diluted net operating income per share.
➣ | STI Awards Have Consistently Demonstrated Strong Correlation Between Pay and Performance. |
As demonstrated in the following chart, our decisions regarding STI awards as a percentage of target have demonstrated a strong correlation between pay and performance throughout various business cycles.
Survival (1) Stabilize and Grow Traditional MI (2) Grow & Diversify (3)
Survival (1) Stabilize and Grow Traditional MI (2) Grow & Diversify (3)
(1) | Survival. A period characterized by overcoming significant losses, maximizing capital and flexibility, retaining customer relationships and GSE eligibility and protecting employee morale and motivation. STI awards as a percentage of target generally reflected the poor financial performance following the financial crisis. |
(2) | Stabilize and Grow Traditional MI. A period characterized by rebuilding customer relationships, divesting our former financial guaranty business, improving financial strength and flexibility, modernizing our operations and technology, enhancing our risk capabilities to take into consideration lessons learned from the financial crisis and new data sources and technologies, and growing our talent base. STI awards generally reflected: (1) a return to operating profitability; (2) on-going compliance with PMIERs; (3) improvement in our capital and liquidity positions and corresponding rating agency upgrades. |
2019 Proxy Statement 31 |
Compensation of Executive Officers and Directors
(3) | Grow and Diversify. A period characterized by continuing to enhance our traditional MI business through operational excellence and service, utilizing our mortgage credit expertise to pursue opportunities outside of traditional mortgage insurance, expanding our presence throughout the mortgage value chain to include fee-for-services business in mortgage and real estate services, and expanding and retaining talent, including talent brought in through acquisitions. Other than in 2015 in which we underperformed relative to our financial plan, STI awards generally reflected: (1) growth in our insured MI portfolio (multiple years of record-breaking volumes of flow NIW); (2) further improvement in our capital and liquidity positions, including enhanced risk distribution strategies to reduce through the cycle volatility and risks in our performance; and (3) our ongoing efforts to diversify our revenue sources, including the acquisition and integration of Clayton and five other follow-on acquisitions aimed at increasing our presence throughout the mortgage and real estate value chain. |
➣ | STI Program for 2018 Utilizes a Quantitatively Driven, One Company Approach, Reducing Discretion and Eliminating the MTI Award; Last Remaining MTI Award (2017 MI Portfolio) Was Paid Above Target Given Strong Credit Performance and Projected Profitability of 2017 Insured Portfolio. |
In 2009, following the financial crisis, the Committee replaced our short-term bonus plan with a plan that allows for short-term and medium-term cash incentive awards. This plan, the Radian Group Inc. Short-Term and Medium-Term Incentive Plan for Executive Employees (the STI/MTI Plan), provided the Committee with the flexibility to introduce a medium-term (two-year) performance period during which our executive officers continue to have pay at risk associated with the credit performance and projected profitability of insurance written during the short-term performance period. As discussed below, the Committee adopted a quantitatively driven, One Company approach to our STI program for 2018, which reduced Committee discretion and eliminated different funding levels for our separate business lines, and therefore, made a discretionary, MI-centric approach such as the MTI component of our STI program, less relevant. For this and other reasons discussed below under IV. Primary Components of CompensationB. Short-Term Incentive Program, the Committee did not include an MTI component as part of our 2018 STI program.
The last remaining MTI awardthe 2017 MTI awardwas based on the credit performance and projected profitability of our 2017 MI portfolio through the end of 2018. Based on the credit performance and the expected strong profitability of this portfolio, we believe this portfolio represents one of the strongest performing portfolios that we have ever written. As a result, the Committee awarded the maximum payout of 115% of target for the 2017 MTI awards.
See V. Other CompensationA. 2017 MTI for more information regarding the 2017 MTI award.
32 2019 Proxy Statement |
Compensation of Executive Officers and Directors
➣ | Year-over-Year Increase in CEO Compensation Primarily Due to Higher STI Funding and Structure of our Cash-Incentive Awards (Including Elimination of MTI Component). |
As illustrated below, Mr. Thornberrys compensation increased from 2017 to 2018 primarily due to an increase in his cash-incentive awards (STI and MTI). With respect to the change in his cash-incentive awards, only 15% (approximately $0.45 million) solely relates to an increase in the amount awarded to Mr. Thornberry based on performance (185% of STI target for 2018 compared to 125% of STI target for 2017). The remaining amount of his cash-incentive change relates to the structure of our cash-incentive programs, including: (i) Mr. Thornberrys not receiving an MTI payment in 2017 (he joined the Company in March 2017, and therefore, had not received a prior MTI award); and (2) his receiving his full cash-incentive award as STI in 2018, reflecting the Committees decision not to include an MTI component as part of our 2018 cash-incentive program. See IV. Primary Components of CompensationB. Short-Term Incentive Program for more information.
Reflects (1) an increase in STI as a result of improved performance; and (2) a full STI paid for 2018 compared to 2017, for which 50% of the 2017 STI was withheld as MTI. Mr. Thornberry joined Radian in March 2017, and therefore, was not eligible to receive an MTI in 2017, resulting in the year-over-year increase for MTI. Base Short-Term Incentive Medium-Term Incentive Cash Sing- on Bonus CASH COMPENSATION Long-Term Incentive All other Comp TOTAL Compensation 2017 $ 750,000 937,500- 500,000 $ 2,187,500 4,749,044 84,503 $ 7,021,047 2018 $ 800,000 2,775,000 1,078,125- $ 4,653,125 4,800,169 80,397 $9,533,691 Difference ($) $ 50,000 (500,000) $2,465,625 51,125 -4,106 $ 2,512,64
* | Represents pro rata amount paid to Mr. Thornberry in 2017 of his $750,000 annual base salary. |
2019 Proxy Statement 33 |
Compensation of Executive Officers and Directors
➣ | Our Compensation Programs are Constantly Evolving to Support Business and Strategic Objectives and to Address Market Conditions and Best Practices. |
Our Committee is focused on ensuring that our executive compensation program is aligned with our overall strategic objectives. We believe this is apparent based on how our executive compensation program has evolved over time to reflect market conditions and to help drive our strategic objectives. Since the financial crisis, broadly speaking, the Company has performed through three business cycles or periods (as defined above, Survival, Stabilize and Grow Traditional Mortgage Insurance, and Grow and Diversify). Throughout each of these periods, the Committee has revised our executive compensation program to support our strategic objectives and to take into account the market factors influencing the type and form of awards that would be most appropriate for our executives. The following illustrates significant changes in our executive compensation program during each of these business cycles:
Bonus Program Instituted STI/MTI Plan to emphasize credit performance STI program became more structured in approach, with heavy
strategic focus on managing financial strength, promoting the role of private MI, retaining employees, and building contingency plans strengthen our financial position...to allow us to continue to write profitable MI business 2010 Corporate STI
Metric STI business metrics became more narrowly focused on growing NIW and market share while improving operating performance, improving capital and financial positions, and modernizing our platforms 2012 - 2014 NIW, Market Share, and NIW Return on
Equity comprise virtually all business metrics, measured on an absolute and relative basis STI reflects additional of Services business with separate funding levels for each business line and a set of shared corporate objectives; Positioning for the
Future is highlighted with diversification of products and services as a core focus expanding our existing offerings to source customers in adjacent markets - 2015 Services STI Metric2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Survival
Stabilize and Grow Traditional Mortgage Insurance Grow and Diversify 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Long-Term Incentive Plan Issued non-equity, cash-based awards focused on internal business metrics critical for survival capital
management, MI credit quality, and [return to] operating profitability - 2009 LTI Metrics (among others) As financial performance became more predictable, we replaced non-equity awards with LTI awards entirely comprised of performance-based equity
awards based on traditional measures of performance (e.g. TSR performance on a relative and absolute basis) the 2011 awards are highly formulaic, and therefore, are objectively measurable by our NEOs and stockholders - Radian 2012 CD&A Further
predictability of future results allows for the incorporation of challenging internal business metric (growth in adjusted book value per share into LTI program Our 2016 LTI awards provide meaningful payouts only if the Company outperforms our
compensation peer group and produces strong growth in book value - Radian 2017 CD&A
Bonus Program Instituted STI/MTI Plan to emphasize credit performance STI program
became more structured in approach, with heavy strategic focus on managing financial strength, promoting the role of private MI, retaining employees, and building contingency plans strengthen our financial position...to allow us to continue to write
profitable MI business 2010 Corporate STI Metric STI business metrics became more narrowly focused on growing NIW and market share while improving operating performance, improving capital and financial positions, and modernizing our platforms 2012 -
2014 NIW, Market Share, and NIW Return on Equity comprise virtually all business metrics, measured on an absolute and relative basis STI reflects additional of Services business with separate funding levels for each business line and a set of shared
corporate objectives; Positioning for the Future is highlighted with diversification of products and services as a core focus expanding our existing offerings to source customers in adjacent markets - 2015 Services STI Metric2009 2010 2011 2012 2013
2014 2015 2016 2017 2018 Survival 3-year TSR: -16% Stabilize and Grow Traditional Mortgage Insurance 3-year TSR: +119% Grow and Diversify 3-year TSR: +22% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Long-Term Incentive Plan Issued non-equity,
cash-based awards focused on internal business metrics critical for survival capital management, MI credit quality, and [return to] operating profitability - 2009 LTI Metrics (among others) As financial performance became more predictable, we
replaced non-equity awards with LTI awards entirely comprised on performance-based equity awards based on traditional measures of performance (e.g. TSR performance on a relative and absolute basis) the 2011 awards are highly formulaic, and
therefore, are objectively measurable by our NEOs and stockholders - Radian 2012 CD&A Further predictability of future results allows for the incorporation of challenging internal business metric (growth in adjusted book value per share into LTI
program Our 2016 LTI awards provide meaningful payouts only if the Company outperforms our compensation peer group and produces strong growth in book value - Radian 2017 CD&A
34 2019 Proxy Statement |
Compensation of Executive Officers and Directors
➣ | Two-Thirds of Annual LTI Awards are Performance-Based, Requiring Strong Absolute Growth in Book Value. Failure to Perform over the Long-Term Significantly Diminishes our NEOs Realized Pay. |
Our 2018 LTI awards provide for meaningful payouts only if we produce strong growth in book value. The 2018 performance-based restricted stock units (performance-based RSUs), which represent two-thirds of the total target value of our NEOs 2018 LTI awards, have an absolute book value growth metric. The Company must achieve at least a 40% increase in LTI Book Value per Share over a three-year performance period (as defined below in IV. Primary Components of CompensationC. Long-Term Incentive ProgramLTI Awards Granted in 20182018 Performance-Based RSUs) for a NEO to be eligible to receive an award at target.
2018 Long-Term Incentive Award Time-Based RSUs: 33% Book Value RSUs: 67%
A failure to achieve our long-term objectives will have a significant, negative effect on our NEOs realized pay. For example, the performance-based RSUs granted to our executive officers in 2013 and 2015 resulted in no payout and those granted in 2014 resulted in only a 4% of target payout for our NEOs upon the conclusion of the three-year performance period for these awards. Because these performance-based RSUs represented, on average, between 24% and 32% of the 2013 through 2015 total target compensation of our NEOs who received these grants, realized pay for these NEOs was well below targeted compensation for these years.
➣ | We Have Implemented Strong Governance and Compensation Practices; We Do Not Engage in Problematic Pay Practices. |
2019 Proxy Statement 35 |
Compensation of Executive Officers and Directors
III. Compensation Process and Oversight
A. Committee Process and Role
The Committee provides direction and oversight for our compensation and human resources programs, processes and functions. The Committee is supported by our Head of Human Resources and our General Counsel, who serve as liaisons to the Committee. The Committee has the sole authority to engage and terminate consulting firms and legal counsel as it deems appropriate to advise it and the Board with respect to executive compensation and human resources matters, including the sole authority to approve the compensation and other terms related to their engagement. The Committee currently retains Pay Governance as its sole independent compensation consultant. Pay Governance provides compensation advisory services to the Company relating to the compensation of executive officers and non-executive directors. Generally, these services include advising the Committee on the principal aspects of our compensation programs and evolving industry practices and providing market information, risk assessments and other analyses regarding our program design and incentive plan practices. Other than this work, Pay Governance performs no services for the Company. The Committee chair approves the payment of all work performed by the independent compensation consultant for the Company, and the Committee annually reviews the independence and performance of Pay Governance. The Committee also engages, from time to time, external legal counsel to provide legal advice in connection with executive compensation matters. In 2018, the Committee assessed the independence of Pay Governance and the Committees primary external counsel and concluded that the work performed by these advisors does not raise any conflict of interest. For a complete discussion of the responsibilities delegated by our Board to the Committee, please see the Committee charter, which is available on our website at www.radian.biz.
B. Consideration of Stockholder Input Regarding our Executive Compensation Program
Overview of Process
As part of our commitment to engaging with our investors, management frequently meets with stockholders to discuss matters of significance to them, including our executive compensation program. These meetings are conducted in the ordinary course of business regardless of the level of stockholder support we receive for our executive compensation program in any given year. In addition, to the extent stockholders indicate a concern with respect to our executive compensation program (through negative say-on-pay votes or otherwise), management will seek to identify and contact those stockholders to better understand their concerns. This may occur as part of our solicitation efforts in connection with our annual meeting of stockholders. In addition, if the overall level of stockholder support for our executive compensation program is below an acceptable level, we will embark on a broad stockholder outreach program to better understand stockholder concerns and what we can do to address them.
Through our stockholder engagement process, we learn about our stockholders voting considerations, influences and processes, as well as their perspectives and priorities with respect to executive compensation and other matters. Management shares this information with the Committee and with our Governance Committee, as relevant, and our Board committees regularly report to the full Board. Management and the Committee consider the outcome of our most recent say-on-pay vote and the information we learn from our solicitation and outreach efforts in designing our executive compensation program each year. In recent periods, as a general matter, stockholders have indicated that they want to better understand how our executive compensation program is aligned with, and is intended to advance, our strategic objectives. In response, we have enhanced our CD&A disclosure to reflect the evolution and strategic alignment of our executive compensation program with our business priorities, which the Committee considers to be one of its most critical responsibilities. See II. Executive SummaryOur 2018 Executive Compensation ProgramOur Compensation Programs are Constantly Evolving to Support Business and Strategic Objectives and to Address Market Conditions and Best Practices. At our 2018 Annual Meeting of Stockholders, approximately 95% of the votes cast were voted in support of our executive compensation program. We very much appreciate this support from our stockholders.
C. Setting Compensation
To set compensation for the NEOs, we utilize different compensation tools, including external benchmarking, internal equity, and wealth accumulation analyses. These collectively represent our primary compensation tools for establishing appropriate compensation levels for our NEOs. In addition, when evaluating a NEOs compensation, the Committee typically will assess the NEOs overall performance, skill sets, experience and current and potential future
36 2019 Proxy Statement |
Compensation of Executive Officers and Directors
career path within the Company. For the compensation of the NEOs other than the CEO, the main participants in our compensation process are the Committee, its independent compensation consultant and two members of managementthe CEO and the Head of Human Resources. The Committee has ultimate authority over compensation decisions for the NEOs other than the CEO. The process for establishing the compensation of our NEOs other than the CEO is as follows:
Independent Compensation Consultant Annually prepares an analysis of competitive market compensation data for each NEO position that is provided to the Committee and the Head of Human Resources Head of Human Resources Prepares initial compensation proposals for each NEO using the competitive market compensation data along with data from the primary compensation tools CEO Reviews recommendations of Head of Human Resources and may make adjustments Compensation Committee Reviews the recommendations of the CEO. It may approve the proposals, make adjustments based on its own view of the primary compensation tools or other factors, or seek additional information from the Head of Human Resources or the independent compensation consultant
We believe that managements participation in the compensation process is critical to an equitable program that is effective in motivating our NEOs, and to ensure that the process appropriately reflects our pay-for-performance culture, current strategies and our focus on risk management. Our NEOs annually develop a set of shared performance goals and associated metrics, which are predominantly based on the Companys annual operating plan that is approved by our Board, including those annual objectives that are intended to further our long-term strategic vision. In addition, each NEO develops a set of individual performance goals and presents them to the CEO, who reviews and adjusts them, as necessary, and then presents them to the Committee. These shared and individual performance goals and metrics serve as the primary basis for determining a NEOs STI award. The process for assessing performance against these objectives is discussed in greater detail below.
With respect to the CEO, the independent directors of our Board have the ultimate authority over compensation decisions. The process for establishing the compensation of our CEO is as follows:
Independent Compensation Consultant Annually prepares an analysis of competitive market compensation data for the CEO Compensation Committee The Committee has the sole responsibility to develop an annual compensation proposal, utilizing the primary compensation tools and competitive compensation market data developed by the independent compensation consultant Independent Directors Reviews the recommendation of the Committee. They may approve the proposal, make adjustments based on their own view of the primary compensation tools or other factors, or seek additional information from the Committee or the independent compensation consultant before making a final determination with respect to compensation for the CEO Potential Additional Information Requested
Benchmarking Compensation
We consider external benchmarking to be an important analytical tool to help us establish competitive points of reference for evaluating executive compensation. We benchmark each executive officer position annually and, if necessary, when a search for a new executive officer position is undertaken. It has been our practice to collaborate with the Committees independent compensation consultant in this process to apply a consistent and disciplined approach in our benchmarking methodology and philosophy.
2019 Proxy Statement 37 |
Compensation of Executive Officers and Directors
For 2018 compensation, we benchmarked each of the primary components of our 2018 compensation program, as well as the 2018 total target cash and direct compensation for each NEO, to external market reference points. In benchmarking an executive officers total target cash compensation, we consider base salary plus cash-based short-term and medium-term incentives (as applicable). Total target direct compensation consists of target cash compensation plus the annualized accounting value of long-term incentives. To the extent information was available, our NEOs compensation was benchmarked against similarly situated executive positions at other companies using one or all of the following three reference points (collectively referred to as the benchmark references), as appropriate:
Primary Compensation Peer Group. On an annual basis, management prepares, and the Committee reviews and approves, compensation peer companies to serve as the primary compensation peer group that is relevant for evaluating executive officer compensation. For 2018 benchmarking, the Committee approved the following peer companies:
2018 Peer Group
|
Mortgage
|
Services Competitor
|
List Radian as a Peer
|
Business
|
|||||||||||||||
Arch Capital Group Ltd. *
|
|
X |
|
Mortgage Insurance |
|||||||||||||||
Black Knight Inc. *
|
|
X |
|
Mortgage & Real Estate Services |
|||||||||||||||
CoreLogic, Inc.
|
|
X |
|
Mortgage & Real Estate Services |
|||||||||||||||
Essent Group Ltd.
|
|
X |
|
|
X |
|
Mortgage Insurance |
||||||||||||
Fidelity National Financial, Inc.
|
|
X |
|
Title & Other Real Estate Services |
|||||||||||||||
First American Financial Corp.
|
|
X |
|
Title & Other Real Estate Services |
|||||||||||||||
Genworth Financial Inc.
|
|
X |
|
|
X |
|
Mortgage Insurance |
||||||||||||
MGIC Investment Corp.
|
|
X |
|
|
X |
|
Mortgage Insurance |
||||||||||||
Nationstar Mortgage Holdings Inc.
|
|
X |
|
Mortgage Servicing & Lending |
|||||||||||||||
Old Republic International
|
|
X |
|
Title & Other Real Estate Services |
|||||||||||||||
PennyMac Financial Services, Inc. *
|
|
X |
|
Mortgage Servicing & Lending |
|||||||||||||||
Stewart Information Services Corp.
|
|
X |
|
|
X |
|
Title & Other Real Estate Services |
||||||||||||
NMI Holdings, Inc.
|
|
X |
|
|
X |
|
Mortgage Insurance |
(in millions) |
2018 Peer Median (1)
|
Radian (1)
| ||||||||
Revenue
|
|
$1,953
|
|
|
$1,238
|
| ||||
Market Cap
|
|
$3,468
|
|
|
$3,517
|
|
* | For 2018, the Committee: (1) removed from the primary compensation peer group - PHH Corporation and Walter Investment Management due to declines in their market capitalization and United Guaranty Corporation given its acquisition by Arch Capital Group; and (2) added to the primary compensation peer group - PennyMac Financial Services, Inc. and Black Knight Inc. given their broad mix of mortgage services activities (and Black Knights divestiture from Fidelity National Financial) and Arch Capital Group Ltd., a mortgage insurance competitor that acquired United Guaranty Corporation. |
(1) | Determined as of August 2017 in connection with the assessment of our Primary Compensation Peer Group for benchmarking 2018 compensation. |
We believe the companies included within our 2018 primary compensation peer group were appropriate to consider in evaluating 2018 compensation based on the following:
| In most cases, the roles and responsibilities of our NEOs were sufficiently similar to the equivalent executive positions within the primary compensation peer group; |
| They represented our primary competition for talent; and |
| We consider them as primary competitors of our MI or Services business or otherwise having significant operations in the mortgage and real estate industry. |
38 2019 Proxy Statement |
Compensation of Executive Officers and Directors
From time to time, third parties such as proxy advisory institutions establish peer groups for the Company for the purpose of assessing the Companys relative performance and compensation. The Committee reviews these peer groups in the ordinary course but does not utilize these peer groups for the purpose of evaluating our NEOs compensation and the Companys performance, mainly because the Committee believes the primary compensation peer group approved by the Committee represents the most appropriate compensation peer group for the Company for the reasons discussed above.
Financial Services and General Industry Reference Points. Because we compete for talent in markets other than those in which we compete for business, we also use, as necessary, broader financial services and general industry compensation reference points.
The financial services data and the general industry data are compiled annually by Willis Towers Watson, an independent third-party, from 205 organizations that participate in Willis Towers Watsons Financial Services Executive Compensation Database (Financial Services) and from 760 organizations across a range of industries that participate in Willis Towers Watsons General Industry Executive Compensation Database (General Industry).
For these two reference points, we use pre-established subsets of companies contained in the databases of Willis Towers Watson, so that we compare our NEOs compensation to that of companies of reasonably similar size to us. The subsets are based on standard revenue ranges that are provided in published compensation surveys, and we do not select or have any influence over the companies that participate in these surveys. The subset of companies we use consists of a broad array of companies in the financial services industry, including property/casualty insurance, life/health insurance, and investment, brokerage, retail and commercial bank organizations. The financial services data is focused on companies with assets of less than $20 billion and revenues less than $3 billion, while the general industry data is composed of companies with revenues of less than $3 billion. We do not participate in the selection of the companies for inclusion in these reference points and are not made aware of the companies that constitute these reference points.
We use benchmarking to identify a competitive compensation range for each executive officer position. From a quantitative perspective, we generally consider an executive officers compensation to be market competitive if it is within a 15% range of the median of the applicable benchmark references. However, because executive officer roles and responsibilities often vary within the industries in which we participate and in the broader financial services segment, our benchmarking process is tailored for each executive officer position, with an emphasis on benchmark data for comparable positions and, in particular, comparable positions in our primary compensation peer group, if available. For each executive officer, the Committee may use one or more of the three benchmark references or, in some cases, a subset of the primary compensation peer group, depending on its judgment concerning the comparability of executive officer roles to these benchmark references. As a result, the Committees assessment of market competitiveness, in addition to the quantifiable benchmark data, may take into consideration other factors such as the scale and scope of the companies as well as specific roles against which our executive officer positions are being compared and the potential market demand for such positions.
For each of the NEOs, the results of the benchmarking conducted by the independent compensation consultant in October 2017 for the purpose of setting 2018 target compensation (expressed as a percentile of the benchmarked group) were as follows:
Executive Officer
|
Primary Compensation Peer Group Reference Point
|
Financial Services Reference Point
|
General Industry Reference Point
| |||
Mr. Thornberry
|
Below 50th | Between 50th and 75th | At 50th | |||
Mr. Hall
|
Below 50th | At 50th | Below 50th | |||
Mr. Brummer
|
At 50th | Between 50th and 75th | Not Applicable (1) | |||
Mr. Hoffman
|
At 50th | Between 50th and 75th | At 50th | |||
Mr. McMahon
|
Not Applicable (1) | Between 50th and 75th | Between 50th and 75th | |||
(1) Positions within the relevant benchmarked group are not sufficiently similar to the NEOs role to provide an appropriate benchmark for compensation evaluation purposes. |
2019 Proxy Statement 39 |
Compensation of Executive Officers and Directors
As our benchmarking process for 2018 illustrates, while the Committee considers benchmarking a valuable reference point for assessing the competitiveness of the NEOs compensation, the Committee does not set compensation for the NEOs to adhere strictly to any specific benchmarked reference point.
Internal Equity
While external benchmarking is important in assessing the overall competitiveness of our compensation program, we believe that our compensation program must also be internally consistent and equitable to reflect an executives responsibilities and contributions to value creation and to ensure teamwork and coordination across the organization. As a result, in addition to benchmarking, our CEO and the Committee have sought to achieve internal equity among our executive officer group, as appropriate, when setting the components of compensation.
Our review of internal equity involves comparing the compensation of positions within a given level of the organization as well as comparing the differences in compensation among various organizational levels. For 2018 compensation, the Committee compared the compensation for each NEO (other than the CEO) against his peers in the executive officer group, making changes as appropriate to preserve internal equity among the executive officers other than the CEO. Although we monitor the difference in pay between the CEO and the other executive officers, given the uniqueness of the CEO position and its breadth of responsibilities, we do not perform a formal internal equity analysis of the CEO relative to other executive officer positions.
Wealth Accumulation
The Committee regularly reviews total reward tally sheets for each of the NEOs and considers the current value and potential future value of existing equity awards as factors in evaluating a NEOs compensation.
IV. Primary Components of Compensation
Our executive compensation program provides a balanced mix of pay through the following primary components, as highlighted by our CEOs pay mix:
Base Salary (15% of CEO's target compensation) Established to provide a competitive level of compensation for day-to-day
performance of job responsibilities Short-Term Incentive (27% of CEO's target compensation)100% performance-based Ensures that significant portion of annual compensation is at risk Performance metrics designed to incent achievement of short-term
corporate and individual performance goals that are critical to our strategic plan. Long-Term Incentive (58% of CEO's target compensation) Designed to drive sustained business performance, encourage retention, and align executives' interests with
shareholders' long-term interests Performance awards (67%) are payable in stock if performance targets are met RSUs (33%) vest in equal installments over three years
Base
Salary (15% of CEO's target compensation) Established to provide a competitive level of compensation for day-to-day performance of job responsibilities Short-Term Incentive (27% of CEO's target compensation)100% performance-based Ensures that
significant portion of annual compensation is at risk Performance metrics designed to incent achievement of short-term corporate and individual performance goals that are critical to our strategic plan. Long-Term Incentive (58% of CEO's target
compensation) Designed to drive sustained business performance, encourage retention, and align executives' interests with shareholders' long-term interests Performance awards (67%) are payable in stock if performance targets are met RSUs (33%) vest
in equal installments over three years
40 2019 Proxy Statement |
Compensation of Executive Officers and Directors
A. Base Salary
Base salaries are paid to executive officers to provide them with a competitive level of compensation for the day-to-day performance of their job responsibilities. As discussed above, base salaries for the NEOs primarily are established based on competitive market compensation data and internal equity. The following table provides the level of base salary for each of the NEOs:
Name
|
2018 Base Salary (1)
| ||||
Richard G. Thornberry
|
$ | 800,000 | |||
J. Franklin Hall
|
$ | 425,000 | |||
Derek V. Brummer
|
$ | 475,000 | |||
Edward J. Hoffman
|
$ | 425,000 | |||
Brien J. McMahon
|
$ | 425,000 |
(1) | No changes were made to the NEOs base salaries for 2019. |
B. Short-Term Incentive Program
This discussion refers to the 2018 performance objectives for the Company and the NEOs as well as to the Companys and NEOs actual 2018 performance results. These objectives and results are disclosed in the limited context of our compensation programs. We specifically caution investors not to apply these statements to other contexts.
Overview of Annual Program Design
Our STI/MTI Plan allows the Committee to design cash incentive programs for performance periods of up to two years, with the STI period covering the first calendar year in which the award is granted, and if included, an MTI period covering the full two-year performance period (from January 1 of the year of grant through December 31 of the second performance year). Management and the Committee annually assess whether to include an MTI component as part of this cash incentive program. For 2018, the Committee determined not to include an MTI component, based on its evaluation of the following:
| The adoption of a One Company approach to our 2018 STI program, which eliminated different funding levels for our separate business lines, and therefore, made an MI-centric approach such as has been used in the past for MTI (i.e., MI portfolio profitability) less attractive and relevant; |
| An overall desire to reduce the discretionary elements of our cash incentive programs such as MTI and to eliminate duplication among our STI and MTI metrics given that risk management (the primary focus of MTI) is explicitly included as a strategic objective in our 2018 STI program; and |
| The increased complexity added by the MTI component and its impact on transparency to investors and participants. |
For a discussion of the 2017 MTI included in the Non-Equity Incentive Plan Compensation column of our 2018 Summary Compensation Table, see V. Other CompensationA. 2017 MTI below.
The amount of STI awarded to a NEO is based on the NEOs achievement of specified performance goals for the applicable year. Corporate and business unit/departmental goals are established each year in the context of our annual business planning process and are approved by our Board. Using these objectives, individual performance goals are established by each NEO and adjusted and approved by the CEO and the Committee (or the independent directors), as discussed in III. Compensation Process and Oversight above. By tying the STI award to our annual operating plan, the Committee aims to ensure accountability, focus and alignment throughout the Company with respect to those matters determined to be most critical to driving long-term stockholder value.
2019 Proxy Statement 41 |
Compensation of Executive Officers and Directors
2018 Short-Term Incentive Analysis
2018 STI Funding Levels
For 2018, the funding levels for the NEOs STI awards were determined based on the Committees assessment of the Companys performance against a shared set of corporate performance metrics and strategic objectives. The following table highlights: (i) the metrics, corresponding targets (as applicable), and weightings for each performance area; (ii) the Companys actual performance against these targets (as applicable); and (iii) the percentage payout approved by the Committee for each area of performance:
Performance Area and Weighting
|
Metric |
2018 Performance Level (1) |
2018 |
Metric |
% of Target | |||||||||||||
Threshold
|
Target: Low End
|
Target
|
Target: High End
|
Maximum
| ||||||||||||||
Financial Performance Metrics (65% Weighting)
|
Pre-Tax Operating EPS (2)
|
$2.25
|
$2.85
|
$3.00
|
$3.15
|
$3.45
|
$3.41
|
30%
|
188%
| |||||||||
Adjusted Operating Leverage (3)
|
0%
|
-
|
8.5%
|
-
|
14%
|
11.9%
|
30%
|
162%
| ||||||||||
New Insurance Written (NIW) (4)
|
$35.0B
|
$45.0B
|
$50.0B
|
$55.0B
|
$65.0B
|
$57.9B
|
20%
|
137%
| ||||||||||
Return on Capital (5)
|
10.9%
|
15.0%
|
16.0%
|
17.0%
|
19.4%
|
18.5%
|
20%
|
164%
| ||||||||||
Weighted Achievement of Financial Performance Metrics:
|
165%
|
Performance Area and Weighting
|
Metric |
Metric |
% of Target | |||||||||||||
Strategic Objectives (35% Weighting)(6)
|
One Company
|
20%
|
150%
| |||||||||||||
Risk Management
|
20%
|
175%
| ||||||||||||||
Diversify and Grow
|
20%
|
100%
| ||||||||||||||
Operational Excellence
|
20%
|
125%
| ||||||||||||||
Capital and Liquidity
|
20%
|
200%
| ||||||||||||||
Weighted Achievement of Strategic Objectives:
|
150%
|
2018 STI Funding Level (as a percentage of target): (165% x 65%) + (150% x 35%) = 160%
(1) | Measured quantitatively, with performance relative to target resulting in the following funding levels: (1) at or below Threshold = 0%; Target Low End = 90%; Target = 100%; Target High End = 110%; at or above Maximum = 200%. Funding percentages are interpolated for results between the referenced funding levels. |
(2) | Measured as adjusted diluted pretax operating income per share, and calculated for compensation purposes as: (A) adjusted pretax operating income divided by (B) weighted-average diluted common shares outstanding (which is equivalent to weighted-average number of common and common-equivalent shares outstandingdiluted). On a consolidated basis, adjusted pretax operating income is a non-GAAP financial measure. See pages 89 to 93 of our Annual Report on Form 10-K for the year ended December 31, 2018, for a more detailed explanation of adjusted pretax operating income, including a reconciliation of adjusted pretax operating income to the most comparable GAAP measure, pretax income from continuing operations. The target for 2018 STI ($3.00 per share) represents an increase of $46 million or 7% over our 2017 actual performance of $2.80 per share. This targeted increase was primarily driven by planned growth of $85 million in revenue, including more rigorous targets for net premiums earned, Services revenue and net investment income, combined with declines in interest and operating expenses. |
(3) | Measured as the percentage change in annual adjusted operating revenue (which consists of net premiums earnedinsurance, services revenue and other income), less the percentage change in adjusted operating expenses (which consists of policy acquisition costs, cost of services and other operating expenses and restructuring and other exit costs, but excluding impairment of other long-lived assets and loss from the sale of a business line). For 2018, for purposes of calculating Adjusted Operating Leverage, the impact of acquisitions (revenues and expenses) and the increase in short-term incentive awards above target are excluded. The target for 2018 STI (8.5%, which was composed of 8% expected growth in revenue and a 0.5% decline in expenses) represents a significant increase compared to our 2017 actual performance (-5.8%). |
42 2019 Proxy Statement |
Compensation of Executive Officers and Directors
(4) | Measured as new, traditional MI business and the NIW equivalent of new insurance written through non-traditional mortgage insurance executions such as our participation in the GSEs credit risk transfer transactions. The target for 2018 STI ($50 billion) represents a 7% decrease compared to our 2017 actual performance of $53.9 billion. Our target for 2018 was established primarily based on: (i) the projected size of the mortgage market (using an average of estimates from the Mortgage Bankers Association, Fannie Mae and Freddie Mac), which resulted in a 5% projected decrease in the mortgage origination market from 2017; (ii) our estimate of private MIs penetration rate or share of the mortgage origination market; (iii) our projection regarding Radians share of the private MI market; and (iv) the potential negative impact on NIW associated with our strategic focus on economic value generation from NIW and heightened competition in the MI industry. |
(5) | Measured as the projected return (including projected investment income and the impact of reinsurance, but excluding debt leverage) on capital required by PMIERs for 2018 on traditional mortgage insurance NIW. The target for 2018 STI (16%) represents a 14% increase compared to our 2017 actual performance (14.1%), with the increased target mainly attributable to the change in tax laws, partially offset by heightened competition in the MI industry. |
(6) | Measured qualitatively, taking into consideration the various factors that influence our NEOs decision-making throughout the performance period. Performance against each of these strategic objectives, including performance highlights impacting the Committees assessment, was as follows: |
2019 Proxy Statement 43 |
Compensation of Executive Officers and Directors
One Company (150% Result) Operating with a shared purpose, values and strategy across the organization to drive engagement, develop our talent, increase stockholder value and enhance the value proposition to customers Risk Management (175% Result) Ensure the Company maintains comprehensive enterprise risk management, including credit, operational, underwriting, counterparty, and risk/return discipline based on sound data and analytics, with an emphasis on risk culture, positive economic value, compliance and long-term Diversify & Grow (100% Result)Leverage our core competencies to enhance our value proposition to customers, grow our traditional MI business in innovative ways, and meaningfully expand our presence in the mortgage and real estate value chain beyond traditional MI Operational Excellence (125% Result) Enhance the quality, efficiency and performance of our operations and product and service delivery, applying technology as appropriate, to positively differentiate our business and enhance the customer experience and grow stockholder value Capital &Liquidity (200% Result) Optimize our capital and liquidity to achieve strategic objectives by ensuring ongoing compliance with the PMIERs, increased financial flexibility, and continuing to make meaningful progress towards investment grade ratings Enterprise-wide integration of our corporate values, internal communication platforms, technology infrastructure, financial management platforms, STI programs/performance management processes, talent acquisition, and employee recognition programs. Launched our new One Company Radian brand and developed a plan to complete roll-out enterprise-wide throughout 2019. Enhanced our counterparty risk management processes related to originators, services and reinsurers, including development of a servicer segmentation framework to improve our servicer risk management oversight and reporting. Leveraged our analytics-driven risk management framework to drive growth in the economic value of our insured MI portfolio, the ongoing evolution of risk-based pricing platforms (including launch of Radar Rates) and our ability consummate high value risk distribution strategies to shape our insured MI portfolio and reduce through-the-cycle risks and volatility. Achieved a record level of NIW (flow basis) in 2018, while growing our overall insured MI portfolio by over 10%, and increasing the economic value of the portfolio. Continued to participate in GSE credit risk transfer transactions at attractive risk-adjusted returns. Despite underperformance in our Services business compared to our financial plan, we continue to position this business for profitable growth through key investments in talent, facilities, technology, and three acquisitions, including a title insurance company. Continued to make significant progress in transforming our business into a digital enterprise, including ongoing progress in our MI modernization initiative focused on servicing, the transformation of our title platform, development of a new technology platform to support our real estate brokerage business, the consolidation of our finance systems, implementation of a new HR system, and completed acquisitions of a new technology platform for valuation services and a data analytics company. Improved the operational capabilities of our MI underwriting function, driving a 20% increase in productivity over 2017. Executed an integrated ILN and XOL Reinsurance transaction (first of its kind in the MI industry), securing capital relief under PMIERs and distributing risk to the capital markets and reinsurance markets to mitigate volatility in future economic and credit cycles. Paid a $450 million return of capital from Radian Guaranty to Radian Group company, representing the first return of capital from Radian Guaranty (outside of internal restructurings) since before the financial crisis. Repurchased approximately 3 million shares of our common stock in 2018.
2018 STI Payouts for NEOs
At the end of each performance year, each NEO (other than the CEO) provides a performance self-assessment to the CEO and the CEO provides a similar self-assessment to the Committee, in each case including his level of attainment of the specified performance goals. The CEO reviews the performance of each NEO (other than himself) against his respective performance goals and makes specific recommendations to the Committee regarding the amount of STI, if any, to be awarded. Maximum achievement can result in an STI award of up to 200% of the target amount, while performance below expectations can result in a below-target award or no award.
The Committee (or the independent directors in the case of the CEO) retains ultimate authority with respect to amounts awarded to the NEOs under the STI/MTI Plan. Although actual performance measured against the performance goals (as reflected by the STI funding levels discussed above) is the primary consideration for the STI awards, the Committee or the independent directors may, depending on the circumstances, exercise discretion in determining the amount to be awarded to each NEO. For each NEO, the Committee or the independent directors may weight the various performance goals differently in light of the NEOs role, giving appropriate consideration to the degree to which each NEO impacted our performance.
The following table sets forth, for each NEO: (i) the maximum amount that could have been awarded under the STI/MTI Plan for 2018 short-term performance (column a); (ii) the NEOs target 2018 STI award (column b); (iii) the total amount actually awarded to the NEO based on 2018 short-term performance and paid as a bonus to the NEO (column c): and (iv) individual performance highlights for each NEO (column (d)).
44 2019 Proxy Statement |
Compensation of Executive Officers and Directors
Name
|
(a) 2018 Maximum Award
|
(b) 2018 Target STI
|
(c) 2018 Total Amount Awarded ($ and % of Target)
|
(d) Individual Performance Highlights
| |||||||||||||
Mr. Thornberry |
$3,000,000 |
$1,500,000 |
$2,775,000 |
Oversaw the Companys strong financial performance and the successful execution of a capital plan to further strengthen our financial and liquidity positions Drove a third-consecutive record performance year for our MI business with respect to flow NIW, while strengthening our Services business foundations to support our strategic diversification Developed the new One Radian branding platform supporting our One Company vision Developed a long-term strategic vision for the Company to grow our businesses and diversify our presence throughout the mortgage value chain Drove integration of our corporate values, communication platforms, and employee programs across the enterprise
| |||||||||||||
Mr. Hall |
850,000 |
425,000 |
735,000 |
Successfully executed a capital plan to further strengthen our financial and liquidity positions, including the MI industrys first- ever combined ILN and XOL reinsurance transactions and Radian Guarantys $450 million return of capital to Radian Group Focused organization on expense management that met internal and external financial goals Led a rigorous review and negotiation of three acquisitions that complement our strategic diversification
| |||||||||||||
Mr. Brummer |
1,050,000 |
525,000 |
975,000 |
Expanded the Companys use of reinsurance to improve Radian Guarantys expected return on required capital and financial position under the PMIERs and to manage the Companys MI portfolio Led the development of the Companys innovative, combined ILN and XOL structure that provided significant capital flexibility Developed a strategy to offer a spectrum of risk-based pricing solutions for our customers Improved Radians pricing and risk decision making capabilities Further developed our use of data analytics to support our core expertise in mortgage risk and real estate services
| |||||||||||||
Mr. Hoffman |
850,000 |
425,000 |
785,000 |
Managed various litigation and regulatory matters Oversaw the legal execution of the Companys pricing strategy (ensuring compliance and competitiveness) and capital plan to further strengthen our financial and liquidity positions Completed the implementation of the Companys One Company HR programs and information systems to strengthen our culture and talent development Restructured our government relations function and successfully conducted a broad-based stockholder outreach program
| |||||||||||||
Mr. McMahon |
850,000 |
425,000 |
700,000 |
Drove a One Company enterprise sales organization that further diversified revenue opportunities and strengthened our customer value proposition Achieved a record setting level of NIW for our primary, flow MI business for a third consecutive year
|
2019 Proxy Statement 45 |
Compensation of Executive Officers and Directors
C. Long-Term Incentive Program
Each year, in designing the annual LTI awards for the NEOs, the Committee reviews and assesses the types of awards that would best complement our existing LTI program to enhance long-term stockholder value. As part of its assessment, the Committee considers, among other things, the following factors:
(i) | Whether the awards will effectively motivate the NEOs to achieve rigorous, performance-based objectives in line with our long-term strategic vision for the Company; |
(ii) | Whether the awards will remain motivational and retentive through various economic cycles; |
(iii) | The potential financial, accounting and tax impact of the awards; |
(iv) | Whether the award objectives will be clear to the NEOs, stockholders and other constituencies; |
(v) | The potential impact of the awards on risk behavior; and |
(vi) | Input from our stockholders with respect to the form and performance metrics for our awards. |
LTI Awards Granted in 2018
For 2018, the Committee granted annual LTI awards to our NEOs comprising the following:
Time-Based RSUs: 33% Book Value RSUs: 67%
For 2018, the Committee chose these LTI components to: (1) focus our NEOs on driving growth in our book value, which more than any other performance metric, best reflects our ultimate success in executing upon our strategic plan; and (2) ensure that the annual LTI awards continue to include a retention component through various performance cycles. The Committee chose the mix of time-based and performance-based awards to ensure the award was predominantly performance-based, but also to ensure that a meaningful number of RSUs would vest annually for our NEOs, creating an on-going retention element to our LTI program that would persist through various business cycles. See II. Executive SummaryOur 2018 Compensation ProgramTwo-Thirds of Annual LTI Awards are Performance-Based, Requiring Strong Absolute Growth in Book Value. Failure to Perform Over the Long-Term Significantly Diminishes our NEOs Realized Pay above.
2018 Performance-Based RSUs.
The 2018 Book Value RSU (BV RSU) awards will vest on May 9, 2021, based on the attainment of specified performance goals, subject to certain conditions that could accelerate their vesting. Each vested BV RSU will be payable in one share of the Companys common stock.
On the vesting date, each NEO will become vested in a number of shares of the Companys common stock (from 0 to 200% of his BV RSU target) based on the Companys cumulative growth in LTI Book Value per Share (as defined below) over a three-year performance period (from March 31, 2018 through March 31, 2021), as follows:
3-Year LTI Book Value per Share Growth (1)
|
Payout Percentage (1) (% of BV RSU Target)
| |
³60%
|
200%
| |
50%
|
150%
| |
40%
|
100%
| |
30%
|
50%
| |
<20%(2)
|
0%
|
46 2019 Proxy Statement |
Compensation of Executive Officers and Directors
(1) | If the Companys growth in LTI Book Value per Share falls between two referenced percentages, the payout percentage will be interpolated. |
(2) | If the Companys growth in LTI Book Value per Share is less than 20%, the payout percentage will be 0. |
The Companys LTI Book Value per Share is defined as: (A) Book Value adjusted to exclude: (1) accumulated other comprehensive income; and (2) the impact, if any, during the three-year performance period from declared dividends on common shares; divided by (B) basic shares of common stock outstanding.
The BV RSUs include a one-year, post-vesting holding period, such that the vested 2018 BV RSUs will not be converted into shares (other than shares withheld to pay taxes due at vesting) until the one-year anniversary of the vesting date of the 2018 BV RSUs. However, as set forth in the applicable grant instrument, the post-vesting holding period will not apply in certain circumstances, such as: (i) the NEOs death or disability; (ii) the occurrence of a change of control after the end of the performance period; or (iii) certain terminations of employment in the event of a change of control before the end of the performance period.
The BV RSUs provide for double trigger vesting in the event of a change of control. In the event of a change of control of the Company before the end of the three-year performance period, the BV RSUs will become vested at the end of the three-year performance period, provided that the NEO remains employed by the Company through that date. If, in connection with the change of control, the NEOs employment is terminated by the Company without cause, or the NEO terminates employment for good reason (as those terms are defined in the grant instrument), in each case within 90 days before or within one year after a change of control, the BV RSUs will become vested upon such termination (or the date of the change of control, if later). The amount that will become vested in the event of a change of control will be at the projected performance achievement for the full performance period based on the Companys performance through the end of the fiscal quarter immediately prior to the fiscal quarter in which the change of control occurs.
If a retirement eligible NEO retires before the end of the three-year performance period, generally the award will remain outstanding and will vest at the end of the performance period to the extent that the performance criteria are satisfied (or in the amount described above in the event of a change of control). Additionally, the BV RSUs will become fully vested at target (or in the amount described above in the event of a change of control) in the event of the NEOs death or disability during employment.
Except as set forth above with respect to a termination of employment in connection with a change of control, if the NEO is involuntarily terminated by the Company other than for cause or the NEO terminates employment for good reason, in each case six months or more after the award is granted, and the NEO executes a written release of claims against the Company, a prorated portion of the unvested BV RSUs (based on the number of months that the NEO was employed following the date the award was granted) will remain outstanding and will represent the NEOs new target award; provided however, that if termination occurs within six months prior to the end of the three-year performance period, the BV RSUs will not be prorated and the grant date target award will remain outstanding in its entirety. Any BV RSUs that remain outstanding will vest at the end of the performance period to the extent that the performance criteria are satisfied (or as described above in the event of a change of control).
The BV RSUs also include a provision that prohibits the NEO from competing with the Company and from soliciting the Companys employees or customers for a period of 18 months with respect to Mr. Thornberry and a period of 12 months for each of the other NEOs (in each case, the Restricted Period) following termination of the NEOs employment for any reason.
2018 Time-Based RSUs.
The Time-Based RSUs are scheduled to vest in pro rata installments on each of the first three anniversaries of the grant date (i.e., May 9, 2019, May 9, 2020 and May 9, 2021), as long as the NEO is an employee of the Company on the vesting date.
In the event of the NEOs retirement, death or disability before the end of the three-year vesting period, any unvested Time-Based RSUs will become fully vested. Additionally, except as set forth below with respect to a termination of
2019 Proxy Statement 47 |
Compensation of Executive Officers and Directors
employment in connection with a change of control, if the NEO is involuntarily terminated by the Company other than for cause or the NEO terminates employment for good reason and the NEO executes a written release of claims against the Company, any unvested Time-Based RSUs will become vested as follows: (i) if the termination occurs up through and including the first anniversary of the grant date, one-third of the Time-Based RSUs awarded will become vested and the remaining Time-Based RSUs will be forfeited and (ii) if the termination occurs after the first anniversary of the grant date, all remaining unvested Time-Based RSUs will become fully vested.
The Time-Based RSU awards provide for double trigger vesting in the event of a change of control. In the event of a change of control of the Company, if the NEOs employment is terminated by the Company without cause, or the NEO terminates employment for good reason, in each case within 90 days before or one year after a change of control, the Time-Based RSUs will become fully vested upon termination (or, the date of the change of control, if later).
The Time-Based RSUs also include a provision that prohibits the NEO from competing with the Company and from soliciting the Companys employees or customers for the applicable Restricted Period following termination of the NEOs employment for any reason.
Stock Ownership
Consistent with our compensation philosophy, we believe that senior management, including the NEOs, should have a significant equity investment in the Company to further align their interests and actions with the long-term interests of our stockholders and to further focus the NEOs on sustained performance.
Under our stock ownership guidelines, within three years of being designated an executive officer, Mr. Thornberry and the other NEOs are required to hold shares with a minimum aggregate market value equal to 7 times salary and 2.5 times salary, respectively. In addition, our 2016 through 2018 performance-based RSUs include a one-year, post-vesting share retention period applicable to all NEOs.
As of December 31, 2018, each of our NEOs was in compliance with our stock ownership guidelines. A NEOs failure to comply with the guidelines will be considered by the Committee in determining subsequent equity compensation awards to the NEO, including potentially reducing or eliminating future equity awards and making awards otherwise paid in cash, such as STI awards, payable in stock and subject to these guidelines. Willful or intentional violations may also be considered cause for purposes of termination from employment.
In addition to the primary components of their compensation, the NEOs receive additional compensation through their participation in our benefit plans as well as, to a very limited extent, through perquisites. For 2018, the NEOs also received the last outstanding MTI award, the 2017 MTI award.
A. 2017 MTI
Before 2018, the Committee regularly included an MTI component as part of the NEOs cash incentive programs, with performance under these MTI awards dependent upon the credit performance and profitability of the mortgage insurance that we wrote during a particular STI period. Each NEOs MTI target for these years was established at the time that STI was awarded, with only 50% of the amount awarded being paid to the NEO as an STI bonus (as referenced in the Bonus column of our prior years Summary Compensation Tables), and the remaining 50% of each NEOs STI award then becoming that NEOs target MTI award for the full two-year MTI performance period.
48 2019 Proxy Statement |
Compensation of Executive Officers and Directors
At the end of the two-year MTI performance period, the Committee then determined what percentage, if any, of the target MTI award would be paid to the NEOs based on the Companys achievement of certain pre-established business and financial performance metrics and goals. Other than for determining the MTI target amount (which was derived based on each individuals STI performance), individual officer performance was not evaluated for purposes of determining or paying the MTI awards, as all NEOs receive the same percentage payout relative to target. The following diagram illustrates the award process under our STI/MTI Plan for the 2017 STI/MTI awards:
STI/MTI Target % of Base Salary Awarded 0 - 200% of Target 50% 50% STI Paid MTI Target Established MTI Paid 0 - 115% of Target Performance Period MTI Performance Period January 2017 December 2017 March 2018 December 2018 STI Payment March 2019 MTI Payment
As illustrated above, the 2017 MTI target awards were established in March 2018 at the time that the 2017 STI awards were paid to the NEOs. Performance under the 2017 MTI award was measured based on the credit performance and profitability of the mortgage insurance we wrote in 2017, as measured through the end of 2018 by the Companys cumulative incurred loss ratio, projected return on PMIERs capital and projected total profitability.
The Committee does not directly correlate payments under MTI awards with achievement of specific performance metrics, primarily because of the significant number of variables that affect both the credit performance and profitability of NIW, many of which are outside of our NEOs control. The Committee does, however, use business targets established by management in the ordinary course of business as a point of reference in assessing the strength of a particular NIW vintage.
2019 Proxy Statement 49 |
Compensation of Executive Officers and Directors
As of December 31, 2018, the two-year credit default rate for the 2017 portfolio was 0.8%, a favorable rate compared to historical rates for our MI business. As demonstrated in the chart below, with respect to credit default rate, the 2017 portfolio is similar to the post-financial crisis 2009 through 2016 portfolios and is significantly better than the pre-crisis 2001 through 2004 portfolios at the same point of development.
We have found early default experience, or EDE, which we define as the frequency of defaults occurring during the first six months following loan origination, to be a strong indicator of the underwriting quality of an insured portfolio. As demonstrated in the following chart, the performance of the 2017 portfolio of flow (loan-by-loan) insurance is consistent with the recent trend of extremely low EDE rates (well below historical experience), indicating that the underwriting quality for this book of business is very strong.
50 2019 Proxy Statement |
Compensation of Executive Officers and Directors
The chart above excludes defaults in areas that, following hurricanes Harvey and Irma in the third quarter of 2017, the U.S. Federal Emergency Management Agency designated as individual assistance disaster areas, as most of these defaults, as expected, have cured and generally are not considered credit related. See pages 102 to 107 of our Annual Report on Form 10-K for the year ended December 31, 2018 for further information.
In addition to credit performance, the Committee evaluates the projected profitability of an insured portfolio to assess its overall strength of performance and potential value creation. As demonstrated in the following table, as of December 31, 2018, the 2017 portfolio yielded a loss ratio of 5.1%, generally in line with the 2009 through 2016 portfolio average of 4.5%, despite modest pricing reductions in recent years. As a result, similar to our other post-crisis vintages, the 2017 insured portfolio is expected to produce strong profitability. Loss ratio is calculated as the provision for losses as a percentage of net premiums earned.
(1) | Represents inception-to-date losses incurred as a percentage of net premiums earned. |
To date, the credit performance of the 2017 insured portfolio has been stronger than originally anticipated, with the total projected, life of loan unlevered return for this portfolio (i.e., after-tax underwriting returns plus projected investment income) as of December 31, 2018 falling within our targeted return range and having increased from our initial expectation. This has translated to better than anticipated projected profitability for the portfolio, with the projected lifetime after-tax net income for the 2017 portfolio now higher than our original estimates.
2019 Proxy Statement 51 |
Compensation of Executive Officers and Directors
In light of the strong credit performance and better than projected profitability of our 2017 portfolio of flow insurance, this portfolio is expected to generate significant economic value for the Company. As a result, the Committee awarded the maximum payout of 115% of target for the 2017 MTI awards. These amounts are included in the Non-Equity Incentive Plan Compensation column of our 2018 Summary Compensation Table, and the following table illustrates for each NEO the target award amount and the amount awarded under the 2017 MTI award.
Executive Officer
|
2017 MTI Target
|
Approved Payout
| ||
Richard G. Thornberry
|
$937,500 | $1,078,125 | ||
J. Franklin Hall
|
$250,000 | $ 287,500 | ||
Derek V. Brummer
|
$307,500 | $ 353,625 | ||
Edward J. Hoffman
|
$272,500 | $ 313,375 | ||
Brien J. McMahon
|
$255,000 | $ 293,250 |
B. Retirement Compensation
We are committed to providing all of the Companys employees with competitive benefits that make sense for their financial security.
Savings Incentive Plan
The Savings Plan serves as a retirement vehicle for the NEOs and other employees. The Savings Plan, among other things, provides for quarterly matching contributions by Radian equal to 100% of employee contributions (up to 6.0% of eligible pay for 2018). Each of the NEOs participated in the Savings Plan in 2018.
Benefit Restoration Plan
We maintain the Radian Group Inc. Benefit Restoration Plan (BRP) to provide additional retirement benefits to our employees who are eligible to participate in the Savings Plan and whose benefits under the Savings Plan are limited by applicable IRS limits on eligible compensation. See Nonqualified Deferred Compensation below. We believe the BRP is an appropriate plan for employees and stockholders for the following reasons:
| Participation is predominately based on compensation earned rather than an employees title or position. All employees whose eligible pay exceeds the IRS compensation limit ($275,000 for 2018) are eligible to participate in the BRP in the same year in which they exceed the IRS limit. The Company makes annual contributions to each participants account based on eligible compensation; |
| The same formula for calculating benefits under the BRP is used for all participants, creating alignment throughout the organization; and |
| In determining benefits under the BRP, bonus and commissions will affect a participants contribution only for the year in which they occur. As a result, compensation in one year is not locked into the benefit formula going forward. |
C. Deferred Compensation
We maintain a voluntary deferred compensation plan for the Companys executive officers. The deferred compensation plan allows executive officers to defer (or if amounts were previously deferred, to re-defer subject to certain limitations) receipt of all or a portion of cash received under their STI/MTI awards and the cash or shares associated with the vesting of RSUs. Deferring compensation allows executive officers to invest such amounts during the deferral period. The deferred compensation program complies with the requirements of applicable IRS regulations. See Nonqualified Deferred Compensation below.
D. Perquisites
In the ordinary course, perquisites generally represent an immaterial component of our NEOs compensation. In 2018, Mr. Thornberry received no perquisites, and the perquisites for each of our other NEOs represented less than 1% of total salary.
52 2019 Proxy Statement |
Compensation of Executive Officers and Directors
2019 Proxy Statement 53 |
Compensation of Executive Officers and Directors
54 2019 Proxy Statement |
Compensation of Executive Officers and Directors
2019 Proxy Statement 55 |
Compensation of Executive Officers and Directors
The following table provides information about compensation paid to each of our non-executive directors in 2018.
2018 Director Compensation
Name
|
Fees or Paid in Cash ($)
|
Stock Awards(2) ($)
|
Change to Nonqualified Deferred Compensation Earnings(3) ($)
|
All
Other
|
Total ($)
|
|||||||||||||||
Herbert Wender
|
546,163 | (4) | 225,000 | | | 771,163 | ||||||||||||||
David C. Carney
|
129,125 | 125,000 | | | 254,125 | |||||||||||||||
Howard B. Culang
|
119,125 | 125,000 | | | 244,125 | |||||||||||||||
Debra Hess(1)
|
| | | | | |||||||||||||||
Lisa W. Hess
|
85,875 | 125,000 | | | 210,875 | |||||||||||||||
Stephen T. Hopkins
|
119,125 | 125,000 | | | 244,125 | |||||||||||||||
Gaetano Muzio
|
76,375 | 125,000 | | | 201,375 | |||||||||||||||
Gregory V. Serio
|
105,875 | 125,000 | | | 230,875 | |||||||||||||||
Noel J. Spiegel
|
96,375 | 125,000 | | | 221,375 | |||||||||||||||
David H. Stevens(1)
|
| | | | |
(1) | Ms. Debra Hess and Mr. Stevens were appointed as directors of the Company on March 19, 2019, and therefore did not receive any director compensation for 2018. |
(2) | Represents the grant date fair value of awards computed in accordance with the accounting standard regarding share-based compensation payments. Each non-executive director who was elected at our 2018 Annual Meeting of Stockholders was awarded 7,833 RSUs (stock settled) on May 9, 2018, with a grant date fair value of $125,000. In addition, Mr. Wender received an additional award of 6,266 RSUs (stock settled) with a grant date fair value of $100,000 for his service as non-executive Chairman. For a discussion of the assumptions used in calculating the grant date fair values, see Note 16, Share-Based and Other Compensation Programs, of Notes to Consolidated Financial Statements in our 2018 Annual Report on Form 10-K. |
As of December 31, 2018, each non-executive director held the following number of shares of phantom stock and RSUs pursuant to grants awarded by the Company:
Name
|
Shares of Phantom Stock* (#)
|
Restricted Stock Units (#)
| ||||||||
Mr. Wender
|
57,459 | 312,991 | ||||||||
Mr. Carney
|
59,555 | 167,706 | ||||||||
Mr. Culang
|
58,720 | 167,706 | ||||||||
Ms. Debra Hess
|
| | ||||||||
Ms. Lisa Hess
|
| 113,760 | ||||||||
Mr. Hopkins
|
58,720 | 167,706 | ||||||||
Mr. Muzio
|
| 92,964 | ||||||||
Mr. Serio
|
| 92,964 | ||||||||
Mr. Spiegel
|
| 113,760 | ||||||||
Mr. Stevens
|
| |
*Includes dividend equivalents to be issued upon conversion of the phantom shares accrued through March 10, 2019. |
(3) | We do not pay above-market or preferential interest or earnings on amounts deferred under the Radian Director Deferred Compensation Plan. |
56 2019 Proxy Statement |
Compensation of Executive Officers and Directors
(4) | Mr. Wender deferred 100% of his cash compensation paid in 2018 pursuant to the Radian Voluntary Deferred Compensation Plan for Directors. |
The following table describes our compensatory and other arrangements with: (1) Mr. Thornberry, our principal executive officer; (2) Mr. Hall, our principal financial officer; and (3) Messrs. Brummer, Hoffman, and McMahon, our three most highly compensated executive officers (other than our principal executive officer and principal financial officer) serving as executive officers at December 31, 2018.
2018 Summary Compensation Table
Name/Title
|
Year
|
Salary ($)
|
Bonus ($) (1)
|
Stock Awards ($) (2)
|
Option Awards ($) (2)
|
Non-Equity Incentive Plan Compensation ($) (3)
|
All Other Compensation ($) (4)
|
Total ($)
| ||||||||||||||||||||||||||||||||
Richard G. Thornberry Chief Executive Officer (Principal Executive Officer)
|
|
2018 |
|
|
800,000 |
|
|
2,775,000 |
|
|
4,800,169 |
|
|
|
|
|
1,078,125 |
|
|
80,397 |
|
|
9,533,691 |
| ||||||||||||||||
2017 | 605,769 | 1,437,500 | 4,749,044 | | | 84,503 | 6,876,816 | |||||||||||||||||||||||||||||||||
J. Franklin Hall Senior Executive V.P., Chief Financial Officer
|
|
2018 |
|
|
425,000 |
|
|
735,000 |
|
|
825,345 |
|
|
|
|
|
287,500 |
|
|
31,839 |
|
|
2,304,684 |
| ||||||||||||||||
|
2017 |
|
|
400,000 |
|
|
250,000 |
|
|
625,055 |
|
|
|
|
|
316,250 |
|
|
23,309 |
|
|
1,614,614 |
| |||||||||||||||||
|
2016 |
|
|
400,000 |
|
|
275,000 |
|
|
546,330 |
|
|
125,000 |
|
|
212,500 |
|
|
23,309 |
|
|
1,582,139 |
| |||||||||||||||||
Derek V. Brummer Senior Executive V.P., Mortgage Insurance and Risk Services
|
|
2018 |
|
|
475,000 |
|
|
975,000 |
|
|
1,012,570 |
|
|
|
|
|
353,625 |
|
|
46,656 |
|
|
2,862,851 |
| ||||||||||||||||
|
2017 |
|
|
450,000 |
|
|
307,500 |
|
|
718,721 |
|
|
|
|
|
388,125 |
|
|
30,081 |
|
|
1,894,427 |
| |||||||||||||||||
|
2016 |
|
|
415,000 |
|
|
337,500 |
|
|
788,090 |
|
|
143,828 |
|
|
271,875 |
|
|
28,113 |
|
|
1,984,406 |
| |||||||||||||||||
Edward J. Hoffman Senior Executive V.P., General Counsel and Corporate Secretary
|
|
2018 |
|
|
425,000 |
|
|
785,000 |
|
|
825,345 |
|
|
|
|
|
313,375 |
|
|
35,900 |
|
|
2,384,620 |
| ||||||||||||||||
|
2017 |
|
|
400,000 |
|
|
272,500 |
|
|
625,055 |
|
|
|
|
|
388,125 |
|
|
26,452 |
|
|
1,712,132 |
| |||||||||||||||||
|
2016 |
|
|
400,000 |
|
|
337,500 |
|
|
706,080 |
|
|
125,000 |
|
|
250,000 |
|
|
26,452 |
|
|
1,845,032 |
| |||||||||||||||||
Brien J. McMahon Senior Executive V.P., Chief Franchise Officer
|
|
2018 |
|
|
425,000 |
|
|
700,000 |
|
|
825,345 |
|
|
|
|
|
293,250 |
|
|
47,412 |
|
|
2,291,007 |
| ||||||||||||||||
|
2017 |
|
|
350,000 |
|
|
255,000 |
|
|
686,435 |
|
|
|
|
|
339,308 |
|
|
32,667 |
|
|
1,663,410 |
| |||||||||||||||||
(1) | Represents the STI award paid to each of our NEOs under our STI/MTI Plan for the performance year in which it was earned. For 2018, each NEO was paid 100% of his STI award for the year earned. For 2017 and 2016, each NEO was paid 50% of his STI award for the year earned, with the remaining 50% forming the NEOs target MTI award. MTI award payments are reported in the Non-Equity Incentive Plan Compensation column, as described in footnote (3) below. See Compensation Discussion and AnalysisIV. Primary Components of CompensationB. Short-Term Incentive Program. |
(2) | Represents the grant date fair value of the awards computed in accordance with the accounting standard regarding share-based compensation payments. For a discussion of the assumptions used in calculating the grant date fair values, see Note 16, Share-Based and Other Compensation Programs, of Notes to Consolidated Financial Statements in our 2018 Annual Report on Form 10-K. |
2019 Proxy Statement 57 |
Compensation of Executive Officers and Directors
In accordance with the rules of the SEC, the amounts in the Stock Awards column include the grant date fair values of the BV RSUs granted in 2018, 2017 and 2016, taking into account our perspective, as of the applicable grant date, regarding the probability for payout of the awards (175%, 175% and 200% for the 2018, 2017 and 2016 awards, respectively). The actual value that may be received by our NEOs will depend on our performance against the applicable performance conditions at the end of the applicable performance period. If the value of the BV RSU awards for 2018, 2017 and 2016 were shown assuming the highest level of the applicable performance conditions were achieved (200%), the amounts reflected for this column in the table above would have been:
Fiscal 2018 Grants
|
Fiscal 2017 Grants
|
Fiscal 2016 Grants
|
||||||||||||||||||||||
Name
|
Probable
|
Highest Level of
|
Probable Outcome ($)
|
Highest Level of
|
Probable Outcome ($)
|
Highest Level of
|
||||||||||||||||||
Richard G. Thornberry |
$ |
4,800,169 |
|
$ | 5,333,521 |
$ |
4,749,044 |
|
$ |
5,000,260 |
|
$ |
N/A |
|
$ |
N/A |
| |||||||
J. Franklin Hall |
$ |
825,345 |
|
$ |
917,041 |
|
$ |
625,055 |
|
$ |
666,924 |
|
$ |
546,330 |
|
$ |
546,330 |
| ||||||
Derek V. Brummer |
$ |
1,012,570 |
|
$ |
1,125,069 |
|
$ |
718,721 |
|
$ |
766,890 |
|
$ |
788,090 |
|
$ |
788,090 |
| ||||||
Edward J. Hoffman |
$ |
825,345 |
|
$ |
917,041 |
|
$ |
625,055 |
|
$ |
666,924 |
|
$ |
706,080 |
|
$ |
706,080 |
| ||||||
Brien J. McMahon |
$ |
825,345 |
|
$ |
917,041 |
|
$ |
686,435 |
|
$ |
719,952 |
|
|
* |
|
|
* |
|
*Value of BV RSU awards for 2016 are not presented for Mr. McMahon who was not an executive officer for 2016. |
For Mr. Thornberry, amounts reported for 2017 also include a one-time grant of 53,534 time-based RSUs that were granted on his initial employment date with the Company to further align his interests with the interests of the Companys stockholders. For Mr. McMahon, amounts reported for 2017 also include a one-time grant of 10,000 time-based RSUs that were granted in connection with our CEO transition and prior to him being designated as an executive officer.
(3) | Represents the MTI award paid to each of our NEOs with respect to the year in which it is earned (for 2018, reported amounts represent payments pursuant to the 2017 MTI award, covering the 2017 through 2018 performance period). See Compensation Discussion and AnalysisIV. Primary Components of CompensationB. Short-Term Incentive Program. |
(4) | For 2018, All Other Compensation includes the following amounts: |
Name
|
Savings
Plan ($)
|
Benefit Restoration ($)
|
Imputed Income for ($)
|
Imputed income ($)
|
Other ($)
|
Tax Gross-Ups ($)
|
Total ($)
| ||||||||||||||||||||||||||||
Richard G. Thornberry |
|
16,500 |
|
|
43,428 |
|
|
4,056 |
|
|
16,413 |
|
|
0 |
|
|
0 |
|
|
80,397 |
| ||||||||||||||
J. Franklin Hall |
|
16,500 |
|
|
15,339 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
31,839 |
| ||||||||||||||
Derek V. Brummer |
|
16,500 |
|
|
19,096 |
|
|
2,018 |
|
|
1,842 |
|
7,200(a) |
|
0 |
|
|
46,656 |
| ||||||||||||||||
Edward J. Hoffman |
|
16,500 |
|
|
15,339 |
|
|
2,167 |
|
|
1,894 |
|
0 |
|
0 |
|
|
35,900 |
| ||||||||||||||||
Brien J. McMahon |
|
16,500 |
|
|
15,267 |
|
|
3,372 |
|
|
4,253 |
|
4,634(b) |
|
3,386 |
(c) |
|
47,412 |
|
(a) | Reflects the value of parking benefits provided to Mr. Brummer. |
(b) | Reflects income recognized in connection with family travel to accompany Mr. McMahon to a business-related event. |
(c) | Represents tax gross-up payments for income recognized by Mr. McMahon in connection with his and his familys travel to and attendance at a business-related event. |
58 2019 Proxy Statement |
Compensation of Executive Officers and Directors
2018 Grants of Plan Based Awards
Estimated Future Payouts under Non-Equity Incentive Plan Awards (1)
|
Estimated Future Payouts under Equity Incentive Plan Awards (2)
|
All Other Stock Awards: Number of Shares of Stock or |
Grant Date Fair Value of Stock and Option |
|||||||||||||||||||||||||
Name
|
Grant Date
|
Target ($)
|
Maximum ($)
|
Target (#)
|
Maximum (#)
|
Units (#) (3)
|
Awards ($) (4)
|
|||||||||||||||||||||
Richard G. Thornberry |
|
2/13/2018 |
|
|
937,500 |
|
|
1,078,125 |
|
|||||||||||||||||||
|
5/9/2018 |
|
|
66,920 |
|
|
1,066,705 |
| ||||||||||||||||||||
|
5/9/2018 |
|
|
150,240 |
|
|
300,480 |
|
|
3,733,464 |
| |||||||||||||||||
J. Franklin Hall |
|
2/13/2018 |
|
|
250,000 |
|
|
287,500 |
|
|||||||||||||||||||
|
5/9/2018 |
|
|
11,510 |
|
|
183,469 |
| ||||||||||||||||||||
|
5/9/2018 |
|
|
25,830 |
|
|
51,660 |
|
|
641,876 |
| |||||||||||||||||
Derek V. Brummer |
|
2/13/2018 |
|
|
307,500 |
|
|
353,625 |
|
|||||||||||||||||||
|
5/9/2018 |
|
|
14,120 |
|
|
225,073 |
| ||||||||||||||||||||
|
5/9/2018 |
|
|
31,690 |
|
|
63,380 |
|
|
787,497 |
| |||||||||||||||||
Edward J. Hoffman |
|
2/13/2018 |
|
|
272,500 |
|
|
313,375 |
|
|||||||||||||||||||
|
5/9/2018 |
|
|
11,510 |
|
|
183,469 |
| ||||||||||||||||||||
|
5/9/2018 |
|
|
25,830 |
|
|
51,660 |
|
|
641,876 |
| |||||||||||||||||
Brien J. McMahon |
|
2/13/2018 |
|
|
255,000 |
|
|
293,250 |
|
|||||||||||||||||||
|
5/9/2018 |
|
|
11,510 |
|
|
183,469 |
| ||||||||||||||||||||
|
5/9/2018 |
|
|
25,830 |
|
|
51,660 |
|
|
641,876 |
|
(1) | Represents the 2017 MTI award (covering the 2017 through 2018 performance period) granted under our STI/MTI Plan. As discussed above under Compensation Discussion and AnalysisIV. Primary Components of CompensationB. Short-Term Incentive Program, each NEOs target 2017 MTI award was established in 2018, in connection with the payment of the 2017 STI awards. Each NEO was entitled to a cash payment for the two-year performance period ranging from 0% to 115% of his target 2017 MTI award. See the 2018 Summary Compensation Table for the amounts paid to each NEO under this award. These awards do not have a threshold level or equivalent. |
(2) | Represents the target and maximum number of shares that may be issued pursuant to the BV RSU awards granted to each of the NEOs under the Amended and Restated Equity Plan. At the end of the performance period, the NEOs will be entitled to receive a number of RSUs (from 0 to 200% of target) based the Companys absolute growth in LTI Book Value per Share (as defined under the awards). The grant date fair value incorporates our perspective regarding the probability of the payout for this award. For more information, see Compensation Discussion and AnalysisIV. Primary Components of CompensationC. Long-Term Incentive Program LTI Awards Granted in 20182018 Performance-Based RSUs. These awards do not have a threshold level or equivalent. |
(3) | Represents the 2018 Time-Based RSUs granted to our NEOs. For more information, see Compensation Discussion and AnalysisIV. Primary Components of CompensationC. Long-Term Incentive ProgramLTI Awards Granted in 20182018 Time-Based RSUs. |
(4) | Represents the grant date fair value of the awards computed in accordance with the accounting standard regarding share-based compensation payments. For a discussion of the assumptions used in calculating these amounts, see Note 16, Share-Based and Other Compensation Programs, of Notes to Consolidated Financial Statements in our 2018 Annual Report on Form 10-K. For the BV RSUs, the grant date fair value incorporates our perspective as of the grant date regarding the probability for payout of the awards. Actual amounts to be paid to our NEOs will depend on our performance against the applicable performance conditions at the end of the applicable performance period. |
2019 Proxy Statement 59 |
Compensation of Executive Officers and Directors
Outstanding Equity Awards at 2018 Fiscal Year-End
Option Awards
|
Stock Awards
| |||||||||||||||||||||||||||||||||||||||
Name
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of Shares or Units of Stock that Have Not Vested (#)
|
Market Value of Shares or Units of Stock that Have Not Vested ($) (1)
|
Equity Incentive Plan Awards: Number of Unearned Shares or Units of Stock That Have Not Vested (#) (1)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units of Stock that Have Not Vested ($) (1)
| ||||||||||||||||||||||||||||||||
Richard G. Thornberry |
|
53,534 |
(2) |
$ |
875,816 |
|
||||||||||||||||||||||||||||||||||
|
40,341 |
(3) |
$ |
659,979 |
|
|||||||||||||||||||||||||||||||||||
|
134,760 |
(4) |
$ |
2,204,674 |
| |||||||||||||||||||||||||||||||||||
|
62,290 |
(5) |
$ |
1,019,064 |
| |||||||||||||||||||||||||||||||||||
|
66,920 |
(6) |
$ |
1,094,811 |
|
|||||||||||||||||||||||||||||||||||
|
300,480
|
(7)
|
$
|
4,915,853
|
| |||||||||||||||||||||||||||||||||||
J. Franklin Hall |
|
0 |
|
|
7,640 |
(8) |
|
18.42 |
|
|
7/8/2025 |
|
||||||||||||||||||||||||||||
|
0 |
|
|
12,880 |
(9) |
|
12.16 |
|
|
5/10/2026 |
|
|||||||||||||||||||||||||||||
|
63,020 |
(10) |
$ |
1,031,007 |
| |||||||||||||||||||||||||||||||||||
|
6,727 |
(3) |
$ |
110,054 |
|
|||||||||||||||||||||||||||||||||||
|
22,460 |
(4) |
$ |
367,446 |
| |||||||||||||||||||||||||||||||||||
|
10,390 |
(5) |
$ |
169,980 |
| |||||||||||||||||||||||||||||||||||
|
11,510 |
(6) |
$ |
188,304 |
|
|||||||||||||||||||||||||||||||||||
|
51,660
|
(7)
|
$
|
845,158
|
| |||||||||||||||||||||||||||||||||||
Derek V. Brummer |
|
13,130 |
|
|
0 |
|
|
13.99 |
|
|
5/13/2023 |
|
||||||||||||||||||||||||||||
|
11,790 |
|
|
0 |
|
|
15.44 |
|
|
6/16/2024 |
|
|||||||||||||||||||||||||||||
|
0 |
|
|
8,780 |
(8) |
|
18.42 |
|
|
7/8/2025 |
|
|||||||||||||||||||||||||||||
|
0 |
|
|
14,820 |
(9) |
|
12.16 |
|
|
5/10/2026 |
|
|||||||||||||||||||||||||||||