Argo Governance, Compensation Enhancements

August 9, 2019

Argo Group International Holdings announced it will introduce two proposals at the Company’s 2020 Annual General Meeting of shareholders [AGM] as part of its continuing enhancement of the Company’s corporate governance practices.

“These measures support continued value creation for all our shareholders and demonstrate our commitment to ensuring alignment with our shareholders,” said Gary Woods, Chairman of the Board. “We value the input we receive from our shareholders and maintain a productive dialogue with them.”

The company said, “The Argo Board of Directors will present two proposals at the 2020 AGM to amend the Company’s Bye-Laws to: [1] commence the process of phased declassification of the Argo Board of Directors, which will conclude at the 2022 AGM, after which the entire Board will stand for election annually; and [2] reduce the maximum size of the Board from 13 to 11.

“As the Company disclosed in a May 13, 2019 filing with the Securities and Exchange Commission, the Board intends to continue its proactive refreshment process, which will include a reduction in the size of the Board to 10 members over the next three years as a function of the retirement of some directors and ongoing recruitment of new directors. The Board believes that this orderly refreshment process, with periods of overlapping service among current and new directors, provides stability and will ensure the effective transfer of key institutional knowledge beneficial to overseeing the Company’s business.

“Additionally, the Board of Directors has approved a series of changes to the Company’s executive compensation program. The Board believes these changes will enhance the alignment between compensation and long-term shareholder value creation.

Details on Executive Compensation Changes

“The Board has unanimously approved the following changes to take effect beginning in the Company’s 2020 fiscal year.

“Long-Term Incentive Plan [LTIP] Design Changes Enhance Alignment of Incentives with Execution of Argo’s Long-Term Strategy

“Performance awards under the LTIP will be measured over a three-year performance period [previously a one-year period] and will be earned based on Return on Equity and Book Value Per Share metrics.

“Increased Stock Ownership Guidelines Underscore Commitment to Driving Long-Term Performance on Behalf of All Shareholders

  • “The CEO’s ownership guideline will be equal to six times base salary [prior multiple was five times base salary].
  • “Other named executive officer [“NEO”] ownership guidelines will be equal to three times base salary [prior multiple was two-and-a-half times base salary].
  • “Directors will be required to own stock equal to five times the annual cash retainer they receive for service on the Board of Directors [prior multiple was three times the annual cash retainer they receive for service on the Board of Directors].”

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