GENERAL INFORMATION

Q:	Why am I receiving these materials?

 

A:

You are receiving these proxy materials because you were a shareholder of RenaissanceRe Holdings Ltd. (“RenaissanceRe” or the “Company”) as of March 23, 2015 (the “Record Date”) and are entitled to attend and vote at the Annual Meeting to be held at Renaissance House, 12 Crow Lane, Pembroke HM 19, Bermuda on May 20, 2015, at 9:00 a.m., Atlantic Daylight Time, or any postponement or adjournment thereof.

 

This proxy statement (this “Proxy Statement”) summarizes the information you need to know to vote at the Annual Meeting. The notice regarding the availability of proxy materials (the “Notice”), this Proxy Statement, the Notice of Annual General Meeting, and the proxy card are first being made available to shareholders on or about April 8, 2015. We have made available with this Proxy Statement our 2014 Annual Report to Shareholders, although the Annual Report shall not be deemed to be part of this Proxy Statement.

 

Q:	Why did I receive a notice in the mail regarding the Internet availability of proxy materials?

 

A:

Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC” or the “Commission”) and applicable Bermuda law, we are providing access to our proxy materials over the Internet. Accordingly, we are sending the Notice to holders of our common shares, par value $1.00 per share. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice or to request to receive a printed set of the proxy materials, as described below.

 

Q:	How can I get electronic access to the proxy materials?

 

A:	The Notice provides you with instructions regarding how to:

 

•

Access (for viewing and/or printing purposes) our proxy materials for the Annual Meeting on the Internet; and

 

•

Instruct us to send our future proxy materials to you electronically by e-mail.

If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.

 

Q:	How can I receive a printed copy of the proxy materials?

 

A:	The Notice provides you with instructions regarding how to:

 

•

Request a printed copy of our proxy materials for the Annual Meeting; and

 

•

Instruct us to send printed copies of our future proxy materials to you by mail.

 

If you choose to receive future proxy materials by mail, your election to receive proxy materials by mail will remain in effect until you terminate it.

 

Q:	What will I be voting on at the Annual Meeting?

 

A:	You will be voting on four items (individually, a “Proposal” and, collectively, the “Proposals”):

 

1.

To elect three Class II directors to serve until our 2018 Annual General Meeting of Shareholders (the “Board Nominees Proposal”);

 

2.

To conduct a non-binding advisory vote to approve the compensation of our named executive officers as disclosed in this Proxy Statement (the “Say on Pay Proposal”);

 

3.

To re-approve the material terms of the performance goals specified in the RenaissanceRe Holdings Ltd. 2010 Performance Share Plan for purposes of Section 162(m) of the Code (the “162(m) Proposal”); and

 

4.

To approve the appointment of Ernst & Young Ltd., our independent registered public accounting firm, to serve as our auditors for the 2015 fiscal year and until our 2016 Annual General Meeting of Shareholders, and to refer the determination of the auditors’ remuneration to the Board of Directors of the Company (the “Board”) (collectively, the “Independent Auditors Proposal”).

 

Shareholders may also be asked to consider and take action with respect to such other matters as may properly come before the Annual Meeting.

 

Q:	What are the voting recommendations of the Board?

 

A:	The Board recommends the following votes:

 

1.

“FOR” the Board Nominees Proposal

 

2.

“FOR” the Say on Pay Proposal

 

3.

“FOR” the 162(m) Proposal

 

4.

“FOR” the Independent Auditors Proposal

 

Q:	Who is entitled to vote?

 

A:

The Board has set March 23, 2015 as the Record Date for the Annual Meeting. If you were the beneficial owner of common shares held in street name, or a shareholder of record with respect to our common shares at the close of business on the Record Date, you are entitled to notice of, and may vote at, the Annual Meeting. The common shares are our only class of equity securities outstanding and entitled to vote at the Annual Meeting.

 

Q:	What is the quorum requirement?

 

A:

As of March 23, 2015, 46,025,698 common shares were issued and outstanding. The presence of two persons in person and throughout the Annual Meeting representing, in person or by proxy, more than 50% of the common shares outstanding and entitled to vote on the matters to be considered at the Annual Meeting is required to constitute a quorum for the transaction of business at the Annual Meeting.

 

Q:	Who is soliciting my proxy?

 

A:

Your proxy is being solicited by the Board. MacKenzie Partners is acting as the solicitation agent on behalf of the Board. See “Who pays the costs of soliciting proxies?” below. The persons named in the proxy card have been designated as proxies by the Board. Such persons designated as proxies are officers of RenaissanceRe.

 

Q:	Who pays the costs of soliciting proxies?

 

A:	The Company will bear the cost of solicitation of proxies. We have engaged the firm of MacKenzie Partners to assist in the solicitation of proxies for a fee of $10,000, plus the reimbursement of certain expenses.

Further solicitation may be made by our directors, officers, and employees personally, by telephone, Internet, or otherwise, but such persons will not be specifically compensated for such services. We may also solicit, through bankers, brokers, or other persons, proxies from beneficial holders of the common shares. Upon request, we will reimburse brokers, dealers, banks, or similar entities for reasonable expenses incurred in forwarding copies of the proxy materials relating to the Annual Meeting to the beneficial owners of common shares that such persons hold of record.

 

Q:	What is the difference between holding common shares as a shareholder of record and as a beneficial owner of common shares held in street name?

 

A:

Shareholder of Record. If your common shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the shareholder of record with respect to those shares, and the Notice was sent directly to you by Broadridge Financial Solutions, Inc., the Company’s tabulation agent and Inspector of Election (our “Inspector of Election”).

 

Beneficial Owner of Common Shares Held in Street Name. If your common shares are held in an account at a brokerage firm, bank, broker-dealer, or similar organization, then you are the beneficial owner of common shares held in street name, and the Notice should have been forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner of common shares held in street name, you have the right to direct that organization on how to vote the common shares held in your account.

 

Q:	If I am a shareholder of record of common shares, how do I vote?

 

A:	If you are a shareholder of record, you may vote in person at the Annual Meeting, in which case we will give you a ballot when you arrive. If you do not wish to vote in person or if you will not be attending the Annual Meeting, you may vote by proxy in accordance with the following instructions:

 

•

You may vote by proxy over the Internet by following the instructions provided in the Notice; or

 

•

If you requested printed copies of the proxy materials by mail, you must either:

 

1.

fill out the enclosed proxy card, date and sign it, and return it in the enclosed postage paid envelope; or

 

2.

vote by Internet (instructions are on the proxy card).

 

								GENERAL INFORMATION—CONTINUED

Q:	If I am a beneficial owner of common shares held in street name, how do I vote?

 

A:

If you are a beneficial owner of common shares held in street name and you wish to vote in person at the Annual Meeting, you must obtain and produce at the Annual Meeting a valid proxy from the organization that holds your common shares along with valid identification. We will give you a ballot when you arrive.

 

If you do not wish to vote in person or you will not be attending the Annual Meeting, you have the right to direct your brokerage firm, bank, broker-dealer, or similar organization on how to vote the common shares held in your account. Please refer to the voting instructions provided by such organization for directions as to how to vote the common shares that you beneficially own.

 

Q:	What does it mean if I receive more than one Notice or set of printed proxy materials?

 

A:	Generally, it means that you hold common shares registered in more than one account. To ensure that all of your shares are voted, please vote in the manner described above with respect to each Notice or in the proxy card accompanying the proxy materials.

 

Q:	What happens if I do not give specific voting instructions?

 

A:	Shareholder of Record. If you are a shareholder of record and you:

 

•

indicate when voting on the Internet that you wish to vote as recommended by our Board; or

 

•

sign and return a proxy card without giving specific voting instructions,

 

then the proxies will vote your shares in the manner recommended by our Board on all matters presented in this Proxy Statement and as the proxies may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting. Withheld votes for election of directors and proxies marked as abstentions to a proposal will not be counted except for purposes of determining whether a quorum is present.

 

Beneficial Owner of Common Shares Held in Street Name. Under the rules of the New York Stock Exchange (the “NYSE”), if you are a beneficial owner of common shares held in street name and do not provide the organization that holds your shares with specific voting instructions, your organization may generally vote on routine matters but cannot vote on non-routine matters. See “Which Proposals are considered ‘routine’ or ‘non-routine’?”

below. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter at least 10 days before the Annual Meeting, the organization that holds your shares will inform our Inspector of Election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.” When our Inspector of Election tabulates the votes for any particular non-routine matter, broker non-votes (like abstentions) will be counted for purposes of determining whether a quorum is present, but will not otherwise be counted. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided by that organization.

 

Q:	Which Proposals are considered “routine” or “non-routine”?

 

A:	Under the rules of the NYSE, (i) Proposal 1 (Board Nominees Proposal), Proposal 2 (Say on Pay Proposal) and Proposal 3 (162(m) Proposal) are non-routine matters and (ii) Proposal 4 (Independent Auditors Proposal) is a routine matter.

 

Q:	May I change my vote after I have submitted a proxy or otherwise instructed how my shares are to be voted?

 

A:

Yes. You may change your vote or revoke your proxy at any time before your proxy is voted at the Annual Meeting. You may vote again on a later date by following the same procedures by which you submitted your original vote, or by attending the Annual Meeting and voting in person. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the Annual Meeting or specifically request in writing that your prior proxy be revoked. Your latest vote or proxy, however submitted, will be counted. If you wish to change your vote or revoke your proxy, you must do so in sufficient time to permit the necessary examination and tabulation of the subsequent proxy or revocation before the vote is taken.

 

Q:	Am I entitled to appraisal rights?

 

A:	The Board has not proposed for consideration at the Annual Meeting any transaction for which the laws of Bermuda grant appraisal rights to shareholders.

 

Q:	How does the voting take place at the Annual Meeting?

 

A:

The Board has adopted a majority vote standard in uncontested director elections. Because the Company did not receive proper advance notice in accordance with the Amended and Restated Bye-Laws of the Company (the “Bye-laws”) of any shareholder nominees for Class II director, the election of directors solicited hereby is an uncontested election.

 

The Say on Pay Proposal, the 162(m) Proposal and the Independent Auditors Proposal each requires the affirmative “FOR” vote of a majority of the votes cast at the Annual Meeting. The vote on the Say on Pay Proposal is not binding on the Board or the Company.

 

A hand vote will be taken unless a poll is requested pursuant to the Bye-laws. Proxies marked as abstentions to a proposal will not be counted except for purposes of determining whether a quorum is present. The rules of the NYSE do not permit your bank, broker or other nominee to vote your shares on proposals that are not considered routine. When a proposal is not a routine matter and your bank, broker or other nominee has not received your voting instructions with respect to that proposal, your bank, broker or other nominee cannot vote your shares on that proposal. This is generally referred to as a “broker non-vote.” Your bank, broker or other nominee may not vote your shares with respect to (i) the Board Nominees Proposal, (ii) the Say on Pay Proposal or (iii) the 162(m) Proposal in the absence of your specific instructions as to how to vote with respect to each of these Proposals because, under the rules of the NYSE, these Proposals are considered to be non-routine. For routine matters, unless your proxy indicates otherwise, the persons named as your proxies will vote your shares according to the recommendation of the Board.

 

Q:	How many votes do I have?

 

A:

Each of our common shares entitles its holder to one vote on each matter that is voted upon at the Annual Meeting or any postponements or adjournments thereof, subject to certain provisions of our Bye-laws that reduce the total voting power of any shareholder owning, directly or indirectly, beneficially or otherwise, as described in our Bye-laws, more than 9.9% of the common shares to not more than 9.9% of the total voting power of our capital stock unless otherwise waived at the discretion of the Board. In addition, the Board may limit a shareholder’s voting rights where the Board deems it necessary to do so to avoid adverse tax, legal, or regulatory consequences.

 

The reduction of such voting power may have the effect of increasing another shareholder’s voting power to more than 9.9%, thereby requiring a corresponding reduction in such other shareholder’s voting power.

 

Because the applicability of the voting power reduction provisions to any particular shareholder depends on facts and circumstances that may be known only to the shareholder or related persons, we request that any holder of common shares with reason to believe that it is a shareholder whose common shares carry more than 9.9% of the voting power of RenaissanceRe contact us promptly so that we may determine whether the voting power of such holder’s common shares

should be reduced. The Board is empowered to require any shareholder to provide information as to that shareholder’s beneficial ownership of common shares, the names of persons having beneficial ownership of the shareholder’s common shares, relationships with other shareholders or any other facts the directors may consider relevant to the determination of the number of common shares attributable to any person. The Board may disregard the votes attached to common shares of any holder who fails to respond to such a request or who, in the Board’s judgment, submits incomplete or inaccurate information. The Board retains the discretion to make such final adjustments that it considers fair and reasonable in all circumstances as to the aggregate number of votes attaching to the common shares of any shareholder to ensure that no shareholder’s voting power is more than 9.9% of the total voting power of our capital stock at any time.

 

These restrictions may be waived by the Board in its sole discretion. To date, the Board has never granted such a waiver.

 

Q:	What else will happen at the Annual Meeting?

 

A:	The only other item currently on the Annual Meeting agenda is for the shareholders to receive the report of Ernst & Young Ltd., our independent auditors, and our audited financial statements for the year ended December 31, 2014.

 

Q:	Where can I find the voting results of the Annual Meeting?

 

A:	The preliminary voting results will be announced at the Annual Meeting. The final voting results will be tallied by our Inspector of Election and filed with the SEC on a Current Report on Form 8-K within four business days following the Annual Meeting.

 

Q:	How can I communicate with RenaissanceRe’s Board?

 

A:

Our Board encourages any shareholder or other party to communicate directly with the Board, any committee of the Board, or our non-management directors as a group. Any such communications should be addressed to the intended recipient in the care of the Corporate Secretary and, if properly addressed, will be forwarded to the intended recipient unopened. Shareholders can send communications electronically through our website at www.renre.com by clicking on “secretary@renre.com” under “Contact Us—Legal or Corporate Information” or by mail to: RenaissanceRe Holdings Ltd., P.O. Box HM 2527, Hamilton HM GX, Bermuda, Attn: Corporate Secretary.

 

								DIRECTORS AND EXECUTIVE OFFICERS OF RENAISSANCERE

The table below sets forth the names, ages, and titles of the executive officers, directors, and nominees for director of RenaissanceRe as of March 23, 2015. The executive officers provide functional oversight of the Company’s business units and have primary responsibility for setting Company policy and decision-making authority. Our executive officers include the members of the Governance Committee of the Chief Executive Officer (the “Governance Committee”) and each other person who meets the

definition of “executive officer” set forth under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Governance Committee currently consists of the Chief Executive Officer, the Chief Operating Officer and Chief Financial Officer, the Group Chief Underwriting Officer, the Group Chief Risk Officer, the Group General Counsel, and the Chief Accounting Officer. Currently, each of our Named Executive Officers is a member of the Governance Committee.

 

Ralph B. Levy has served as one of our directors since 2007 and as Non-Executive Chair of the Board since May 2011. Mr. Levy is a Class III director. In January 2012, Mr. Levy joined JAMS as an Atlanta office arbitration and mediation neutral panel member. In 2011, Mr. Levy retired from his position as a Senior Partner at the law firm King & Spalding LLP, which he joined in 1974 and where he served as Managing Partner from 1993 to 1999. Mr. Levy is a former chairman (2004 to 2006) of, and served from 2000 through June 2012 as a member of, the Board of Directors of the Attorneys’ Liability Assurance Society (Bermuda) Ltd., then a Bermuda-based mutual insurance company but which has since redomesticated in the U.S., and its subsidiary, Attorneys’ Liability Assurance Society, Inc. Earlier in his career, Mr. Levy served as a military trial lawyer and judge in the U.S. Navy Judge Advocates General’s Corp.

Kevin J. O’Donnell has served as our Chief Executive Officer since July 2013, as our President since November 2012 and as one of our directors since July 2013. Mr. O’Donnell previously served in a number of roles with the Company since joining the Company in 1996, including Global Chief Underwriting Officer, Executive Vice

President, Senior Vice President, Vice President, and Assistant Vice President.

Jeffrey D. Kelly has served as our Executive Vice President and Chief Financial Officer since 2009 and as our Chief Operating Officer since December 31, 2014. Prior to joining RenaissanceRe, Mr. Kelly served as Chief Financial Officer of National City Corporation from 2000 until his retirement in 2008. Mr. Kelly also served as Vice Chairman of National City Corporation from 2004 to 2008. Since October 2012, Mr. Kelly has served as a member of the Board of Directors of The Progressive Corporation, on which he previously served from 2000 until 2009.

Ross A. Curtis, Senior Vice President, has served as our Group Chief Underwriting Officer since July 2014. Mr. Curtis previously served in a number of roles with the Company since joining the Company in 1999 as a Catastrophe Reinsurance Analyst, including Chief Underwriting Officer of European Operations based in London, England, from 2010 to 2014 and Senior Vice President of Renaissance Reinsurance Ltd. in Bermuda, primarily responsible for underwriting the international and retrocessional property catastrophe portfolios, and assisting in the development of our specialty reinsurance lines from 2006 to 2010.

 

Ian D. Branagan, Senior Vice President, has served as our Group Chief Risk Officer since 2009 and as the Head of Group Risk Modeling since 2005. Mr. Branagan joined the Company in 1998 to open the Company’s Dublin office, later relocating to Bermuda with additional responsibilities for underwriting risk and modeling across the Company’s (re)insurance operations. Mr. Branagan subsequently assumed the responsibility of managing risk globally for the Company and, in 2013, relocated to the Company’s London office. Prior to joining the Company, Mr. Branagan led the international activities of Applied Insurance Research Inc. (“AIR”), which included the development and marketing of AIR’s catastrophe models and tools.

Stephen H. Weinstein, Senior Vice President since 2005, has served as our Group General Counsel and Corporate Secretary since joining RenaissanceRe in 2002 and as Chief Compliance Officer since 2004. From 2002, Mr. Weinstein also served as a Vice President of RenaissanceRe. Prior to joining RenaissanceRe, Mr. Weinstein specialized in corporate law as an attorney at Willkie Farr & Gallagher LLP.

Mark A. Wilcox has served as our Senior Vice President and Chief Accounting Officer since 2006 and as our Corporate Controller since 2005. Prior to this, Mr. Wilcox served as our Vice President and Internal Auditor from 2003. Prior to joining RenaissanceRe, Mr. Wilcox worked for PricewaterhouseCoopers LLP from 1997 until 2003, where he was Senior Manager of Audit and Business Advisory Services within the firm’s Insurance Practice. Mr. Wilcox is a Certified Public Accountant and a Chartered Financial Analyst.

David C. Bushnell has served as one of our directors since 2008. Mr. Bushnell is a Class I director. Mr. Bushnell has served as the principal of Bushnell Consulting, a financial services consulting firm, since 2008. Mr. Bushnell retired from Citigroup Inc. (“Citigroup”) in 2007, after 22 years of service. Mr. Bushnell served as the Senior Risk Officer of Citigroup from 2003 through 2007 and retired as Chief Administrative Officer in 2007. Following his retirement from Citigroup, Mr. Bushnell served as a consultant to Citigroup until December 31, 2008. Previously, Mr. Bushnell worked for Salomon Smith Barney Inc. (later acquired by Citigroup) and its predecessors in a variety of positions, including as a managing director and Chief Risk Officer. Mr. Bushnell serves on the Board of Directors of Cordia Bancorp Inc. (“Cordia”), and its wholly owned subsidiary, Bank of Virginia. He serves as Chairman of Bank of Virginia’s Credit Committee and serves on its Asset/Liability Management Committee.

James L. Gibbons has served as one of our directors since 2008. Mr. Gibbons is a Class I director. Mr. Gibbons is a Bermudian citizen who is Chairman of Harbour International Trust Company Limited and is the Treasurer of Edmund Gibbons Limited. Mr. Gibbons also serves as a Senior Adviser and Director of Clarien Group Limited (“Clarien”), an international financial company, as well as President of Bermuda Air Conditioning Limited. In June 2013, Mr. Gibbons was elected as a member of the Board of Directors of Nordic American Tankers Limited, a publicly held company. From 1999 to 2013, Mr. Gibbons served as Chair, and, from 1999 to 2010, as President and Chief Executive Officer, of Capital G Bank Limited, a majority of the equity of which was acquired by Clarien.

Brian G. J. Gray has served as one of our directors since May 2013. Mr. Gray is a Class II director. From 2008 until his retirement in 2012, Mr. Gray served as Group Chief Underwriting Officer of Swiss Reinsurance Company Ltd. (“Swiss Re”) and was a member of Swiss

Re’s Group Executive Committee. From 2005 through 2008, he was a member of the Group Executive Board, responsible for underwriting Property and Specialty Product Lines on a global basis for Swiss Re. Mr. Gray joined Swiss Re in Canada in 1985, and served in a variety of roles, including President and Chief Executive Officer of Swiss Re Canada from 2001 to 2005 and Senior Vice President of Swiss Re Canada from 1997 to 2001.

William F. Hagerty IV is a nominee for election to our Board at the Annual Meeting. If elected, Mr. Hagerty will serve as a new Class II director. From January 2011 until his resignation in January 2015, Mr. Hagerty served as Tennessee Commissioner of Economic and Community Development. In January 2015, Mr. Hagerty rejoined Hagerty, Peterson & Company, LLC (“Hagerty Peterson”), a private equity investment firm at which he had previously served as a Founder and Managing Director commencing in 1996. From 1996 to January 2011, Mr. Hagerty served as the Vice Chairman of National Electronics Warranty Corporation (now NEW Asurion Corporation), an administrator of warranty programs based in Sterling, Virginia. Prior to the founding of Hagerty Peterson, Mr. Hagerty was affiliated with Trident Capital, L.P., a private equity investment firm based in Chicago, Illinois, during 1993 and 1994. From 1991 to 1993, Mr. Hagerty served as a member of the White House Staff, including in the position of Chief Economist for the President’s Council on Competitiveness. Mr. Hagerty has served on the board of directors of Sound Advice Inc. from 1998 through its acquisition in 2001; Houghton Mifflin Harcourt Inc. from May 2010 until June 2012; and since December 2010 with R.J. O’Brien Inc., an independent futures brokerage and clearing firm.

Jean D. Hamilton has served as one of our directors since 2005. Ms. Hamilton is a Class I director. Ms. Hamilton is an independent consultant/private investor and a Member of the Brock Capital Group LLC. Previously, she held various positions with Prudential Financial, Inc., including Executive Vice President, and was Chief Executive Officer of Prudential Institutional from 1998 through 2002. Prior to joining Prudential, she held several positions with The First National Bank of Chicago, including Senior Vice President and Head of the Northeastern Corporate Banking Department. She is currently a Trustee, a member of the Audit Committee, and chair of the Board Valuation Committee of First Eagle Funds and First Eagle Variable Funds.

Henry Klehm III has served as one of our directors since 2006. Mr. Klehm is a Class III director. In 2008, Mr. Klehm joined the law firm Jones Day as a partner in the firm’s Securities Litigation & SEC Enforcement Practice. From 2002 to 2007, Mr. Klehm served as Global Head of Compliance for Deutsche Bank, AG. Prior to joining Deutsche Bank, AG, Mr. Klehm served as Chief Regulatory Officer and Deputy General Counsel at Prudential Financial from 1999 to 2002. Prior to joining Prudential, Mr. Klehm served in various positions with the SEC, including as Senior Associate Director of the Northeast Regional Office.

W. James MacGinnitie has served as one of our directors since 2000 and was the Non-Executive Chair of the Board from 2005 to 2011. Mr. MacGinnitie will retire from the Board in connection with the Annual Meeting. Mr. MacGinnitie is a Class II director. Mr. MacGinnitie is an independent actuary and consultant. He served as Senior Vice President and Chief Financial Officer of CNA Financial from 1997 to 1999. Prior to joining CNA, Mr. MacGinnitie was a partner of Ernst & Young Ltd. and National Director of its actuarial services. Earlier in his

 

								DIRECTORS AND EXECUTIVE OFFICERS OF RENAISSANCERE—CONTINUED

career, he was a principal in Tillinghast, primarily responsible for its property-casualty actuarial consulting services. Mr. MacGinnitie is a Fellow of both the Casualty Actuarial Society and the Society of Actuaries, and has served as President of both organizations as well as of the American Academy of Actuaries and the International Actuarial Association. Mr. MacGinnitie served on the Board of Directors of Trustmark Mutual Holding Company from 2000 until his retirement from the board in 2010.

Anthony M. Santomero has served as one of our directors since 2008. Mr. Santomero is a Class I director. Mr. Santomero served as Senior Advisor at McKinsey & Company from 2006 to 2008. From 2000 to 2006, Mr. Santomero was President and Chief Executive Officer of the Federal Reserve Bank of Philadelphia. Prior to joining the Federal Reserve, Mr. Santomero was the Richard K. Mellon Professor of Finance at the University of Pennsylvania’s Wharton School and held various positions there, including Director of the Financial Institutions Center and Deputy Dean. Mr. Santomero serves on the Board of Directors of Penn Mutual Life Insurance Company, Citigroup Inc., Citibank, N.A and Columbia Funds. Mr. Santomero currently serves as the Chair of the Risk Management Committee of Citigroup Inc. and Chairman of the Board of Directors of Citibank, N.A. In addition, Mr. Santomero served on the Board of Directors of BofA Fund Series Trust from 2008 until 2011.

Nicholas L. Trivisonno has served as one of our directors since 2004. Mr. Trivisonno is a Class III director. Mr. Trivisonno was Chairman and Chief Executive Officer of ACNielsen Corporation from 1996 through 2001. Prior to joining ACNielsen, he was Executive Vice President and Chief Financial Officer of Dun & Bradstreet Corporation. Previously, he held several positions at GTE Corporation, including Group President, Executive Vice President, Strategic Planning, Senior Vice President Finance, and Vice President and Controller. Mr. Trivisonno began his career as a certified public accountant with Arthur Andersen & Co. and was appointed a managing partner in 1986.

Edward J. Zore has served as one of our directors since 2010. Mr. Zore is a Class III director. Mr. Zore served in a variety of capacities at The Northwestern Mutual Life Insurance Company, principally as Chairman (2009 to 2010), as Chief Executive Officer (2001 to 2010), and as President (2000 to 2009). He currently serves on the Northwestern Mutual Board of Trustees. He was a member of the Audit Committee of Russell Company, a subsidiary of Northwestern, until December 2014. Mr. Zore began his career with the Northwestern Mutual investment department, and also served as the company’s Executive Vice President, Chief Financial Officer and Chief Investment Officer, and as a director of Northwestern Mutual Series Fund, Inc. He is the Lead Director of the Board of Directors of ManpowerGroup Inc., and is the Chair of its Executive Compensation and Human Resources Committee. Previously, Mr. Zore served as Chairman of the Board of Mason Street Funds, Inc. from 2000 to 2007.

 

								SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND  DIRECTORS—CONTINUED

We have adopted a written policy with respect to the review, approval, and ratification of transactions with related persons. The policy covers, among other things, transactions between us and any of our executive officers, directors, nominees for director, any of their immediate family members or any other related persons as defined in

Item 404 of Regulation S-K. Transactions covered by this policy are reviewed to determine whether the transaction is in the best interests of the Company and our shareholders. The transactions described below include certain transactions we have entered into with parties that are, or could be deemed to be, related to us.

 

RenaissanceRe has a significant physical presence in Bermuda, including our corporate headquarters, and provides support to various charitable organizations in the Bermuda community that meet certain guidelines, including organizations that support insurance industry education and training, crime prevention, substance abuse prevention, affordable housing, and educational assistance. As part of our efforts, we match donations made by our officers and other employees to appropriately registered Bermuda charities in good standing at a ratio of up to 4:1, generally up to a maximum matching contribution for each employee of $10,000 per year. We also make direct charitable contributions, in addition to the employee matching program. Certain of our executive officers and directors, and spouses of certain of these persons, serve and have served as directors, officers or trustees of some of these organizations, including organizations receiving charitable grants from the Bermuda Community Foundation (the “BCF”), discussed below; however, other than to the Bermuda Hospitals Charitable Trust (the “BHCT”), as discussed below, we did not contribute more than $120,000 to any one charity in the 2014 fiscal year for which any of these individuals served as a director, officer or trustee.

In 2013, RenaissanceRe committed to contribute $2.0 million to the BCF in conjunction with the twentieth anniversary of our founding. The BCF was created in 2013 as an umbrella Bermuda charitable organization for the purpose of the distribution of charitable donations to charitable causes based in Bermuda. As a Bermuda-based organization, from its formation, RenaissanceRe and its Bermuda-based employees have benefited, directly and indirectly, from many of the services and activities provided by the charitable associations that are or will be supported by the BCF. Of the $2.0 million contribution, $0.5 million was retained by the BCF as part of its permanent endowment; $1.2 million was designated for

RenaissanceRe’s program giving for 2014, 2015 and 2016 and administered by the BCF at the direction of the Company; and the balance of $0.3 million was designated to be utilized by the BCF for 2013 and 2014 pass through grants to certain designated Bermuda-based charities, including the Bermuda Sloop Foundation and Friends of the Bermuda Railway Trail, and, in a special initiative to encourage sustainability in the philanthropic sector, matching grants to Bermuda-based charities with endowed funds at the BCF. Peter C. Durhager, our former Chief Administrative Officer, serves as the founding Chair of the BCF and receives no compensation from the BCF in that role. During 2014, Mr. Durhager coordinated RenaissanceRe’s charitable giving activities, including the designation of grants to Bermuda-based charities such as the grant made to the BCF.

In 2011, RenaissanceRe made a commitment to contribute $1.0 million to the BHCT in connection with the King Edward VII Memorial Hospital (“KEMH”) redevelopment project. KEMH is the only hospital, and substantially the principal health care facility, in Bermuda, and accordingly is used by all residents of Bermuda, including every Bermuda-based employee of RenaissanceRe. The BHCT is an independent body that accepts and manages donor contributions on behalf of KEMH. Mr. Gibbons serves on the Campaign Steering Committee of the BHCT, an ad hoc, informal committee of local businessmen and women, which works to raise public awareness of the KEMH redevelopment project and provides support for fundraising activities. Neither Mr. Gibbons nor any employee of RenaissanceRe currently serves as a director, officer or trustee of the BHCT, KEMH or the Bermuda Hospitals Board, which oversees the operations of KEMH. The $1.0 million commitment was paid in June 2014.

 

BlackRock reported beneficial ownership interest of more than 5% of our common shares as of December 31, 2014. Affiliates of BlackRock currently provide investment management, risk analytics and investment accounting services to RenaissanceRe and its

subsidiaries. During 2014, we incurred $3.3 million in fees relating to these services. These fees were at then-prevailing market rates determined pursuant to arm’s-length negotiations between us and such affiliates.

 

								CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS—CONTINUED

From time to time, certain officers of RenaissanceRe have made investments in investment funds in which RenaissanceRe has also invested. None of these officers receives any compensation in

connection with such investments or exercises any management discretion over any such investment fund.

 

In accordance with the Company’s policies, Named Executive Officers and certain other officers of the Company are permitted business use and up to 25 hours per year of Company-funded personal use of the aircraft utilized by the Company under a fractional interest program with NetJets Aviation Inc. (the “Aircraft Interest”). In addition, the Compensation and Corporate Governance Committee (the “Compensation Committee”) has approved a form of aircraft use agreement to allow these officers to utilize the Aircraft Interest for additional travel provided that these officers pay for such use in advance of any such trip at the fully loaded variable rate (which rate represents the Company’s “aggregate incremental cost” of such use

within the meaning of Regulation S-K and the rules and other guidance of the Commission) and, at all times, maintain a deposit with the Company, from which the Company is authorized to withdraw funds in order to satisfy any amounts owed under the agreement. Messrs. O’Donnell and Kelly have each entered into an aircraft use agreement with the Company. In respect of his arrangement, Mr. Kelly paid $80,043 for personal use of the Aircraft Interest during 2014. Mr. O’Donnell did not have any personal use of the Aircraft Interest during 2014 which required payment pursuant to his aircraft use agreement with the Company.

 

Our Board and management have a strong commitment to effective corporate governance. We believe we have a comprehensive corporate governance framework for our operations which, among other things, takes into account the requirements of the Sarbanes-Oxley Act of 2002, the SEC, the NYSE and the Dodd-Frank Act of 2010. The key components of this framework are set forth in the following documents:

 

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our Bye-laws;

 

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our Guidelines on Significant Corporate Governance Issues (the “Corporate Governance Guidelines”);

 

•

our Code of Ethics and Conduct (the “Code of Ethics”);

 

•

our Audit Committee Charter; and

 

•

our Compensation and Corporate Governance Committee Charter.

A copy of each of these documents is published on our website at www.renre.com under “Investor Information—Corporate Governance,” except our Bye-laws, which are filed with the SEC and can be found on the SEC website at www.sec.gov. Each of these documents is available in print to any shareholder upon request. The Board regularly reviews corporate governance developments and modifies the Company’s Corporate Governance Guidelines, the Code of Ethics, committee charters, and key Board practices as the Board believes to be warranted. Based on the foregoing, in 2014 the Company revised the Corporate Governance Guidelines and the Code of Ethics. In addition, in conjunction with the 2014 annual review, the Company amended the Investment and Risk Management Committee’s charter. Neither the Bye-laws nor any other committee charter was amended in 2014.

In November 2014, our Board of Directors approved an amendment to the Corporate Governance Guidelines to include a majority voting policy for uncontested director elections. See “Compensation Discussion and Analysis—Shareholder Engagement; Adoption of Majority Voting” below for additional information.

 

Our Board is composed of 11 directors, 10 of whom are independent. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with RenaissanceRe. The Board has established guidelines to assist it in determining director independence, which conform to, and which we believe are more exacting than, the independence requirements in the NYSE listing standards. In addition to applying these guidelines, which are set forth in our Corporate Governance Guidelines, the Board will consider all relevant facts and circumstances known or reported to it in making an independence determination.

In February 2015, the Compensation Committee conducted a review of the independence of each of our current directors and director nominees. During this review, the Board considered, among other things, transactions and relationships between each director or any member of their immediate family and RenaissanceRe or its subsidiaries and affiliates and relationships between directors or their affiliates and members of RenaissanceRe’s senior management or their affiliates. As a result of this review, the Board affirmatively determined that Ms. Hamilton and each of Messrs. Bushnell, Gibbons, Gray, Klehm, Levy, MacGinnitie, Santomero, Trivisonno and Zore are “independent” directors for purposes of compliance with the

NYSE listing standards and SEC rules (“Independent Directors”). The Board also determined that Mr. Hagerty would be, if elected to the Board, an Independent Director for such purposes. Mr. O’Donnell is not considered an Independent Director because of his employment as an executive officer of RenaissanceRe.

In particular, in the course of the Board’s determination regarding the independence of each non-management director, the Board considered, in respect of Mr. Bushnell, the fact of Mr. Bushnell’s prior employment with Citigroup (see “Directors and Executive Officers of RenaissanceRe”), and, in respect of Mr. Santomero, the fact of Mr. Santomero’s service as a director of Citigroup, and Citigroup’s current and prior financial relationships with RenaissanceRe, including as one of the joint lead managers of the Company’s underwritten offering in March 2015 of $300 million aggregate principal amount of 3.70% Senior Notes due 2025, and its roles in the past in respect of certain other offerings of RenaissanceRe. In addition to the foregoing, Jones Day, the law firm at which Mr. Klehm is currently a partner, has provided legal services to Mr. Bushnell relating to his former employment at Citigroup. The Company is not a party to these legal proceedings. In addition, Jones Day received fees from Platinum Underwriters Holdings, Ltd. (“Platinum”) relating to its defined contribution plans in respect of 2014 of less than $10,000.

 

								CORPORATE GOVERNANCE—CONTINUED

Our Corporate Governance Guidelines contain Board membership criteria that apply to nominees for a position on our Board. Pursuant to these criteria, our Compensation Committee takes a holistic approach in identifying and considering potential director nominees and in evaluating the current composition of our Board. In general, the Compensation Committee focuses primarily on the composition and competencies of our Board as a whole, how the traits possessed by individual director nominees complement one another, the ability of the current and proposed members to operate collegially and effectively, and the intersection of these factors with the Company’s current strategy, operational plans and oversight requirements. Accordingly, when evaluating individual director nominees within this framework, our Compensation Committee considers, among others, the following factors:

 

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the personal and professional ethics, integrity and values of the candidate;

 

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the independence of the candidate under legal, regulatory and other applicable standards, including the ability of the candidate to represent all of our shareholders without any conflicting relationship with any particular constituency;

 

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the professional experience and industry expertise of the candidate and whether this will add to or complement that of the existing Board, in light of the Company’s evolving strategic and operational plans over time;

•

the compatibility of the candidate with the existing Board;

 

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the ability and willingness of the candidate to devote sufficient time to carrying out Board duties and responsibilities fully and effectively;

 

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the commitment of the candidate to serve on our Board for a potentially extended period of time, given the benefits our Board ascribes to continuity and a breadth of experience with our strategies and risk management processes, and with a view toward effective oversight of management’s efforts to attempt to ensure the safety and soundness of our Company in light of the market cycles and earnings volatility that characterize our industry, as well as other matters;

 

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as summarized in detail below, maintaining a diversity of skills, experience, and viewpoints represented on the Board as a whole; and

 

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such other attributes of the candidate, our business and strategic conditions and external factors as our Compensation Committee deems appropriate at such time and from time to time.

Our Compensation Committee has the discretion to weigh these factors as it deems appropriate. The importance of these factors may vary from candidate to candidate, depending on our evolving circumstances.

 

As described above, the Corporate Governance Guidelines provide that the Company has not established specific criteria for directors but believes that candidates should show evidence of leadership in their particular field and have broad experience and the ability to exercise sound business judgment. The Compensation Committee carries out the Board’s director selection, recruitment and nomination obligations. As part of these obligations, the Compensation Committee evaluates and discusses diversity at both the Board and the committee levels, considering, as contemplated by the Corporate Governance Guidelines, the diversity, skills, and experience of

candidates in the context of the needs of the Board as a whole. In assessing the performance of current directors, and in selecting directors, the Board generally seeks a combination of qualities and experience that will contribute to the exercise of the duties of the Board, in light of the evolving strategic direction and needs of the Company. This consideration includes a broad evaluation of diversity of skills, experience, and viewpoints represented on the Board as a whole. The assessment is undertaken by the Compensation Committee no less frequently than annually and at appropriate intervals.

 

The Board has currently implemented a leadership structure that separates the role of the Chief Executive Officer and the Chair of the Board. The Board has determined that having an independent director serve as Non-Executive Chair of the Board is in the best interest of shareholders at this time. The Company believes that this

structure currently assists the Independent Directors in the oversight of the Company and facilitates participation of the Independent Directors in setting agendas and establishing priorities and procedures for the work of the Board.

 

The Company considers enterprise-wide risk management (“ERM”) to be a key strategic objective. ERM is managed by the senior executive team under the oversight of the Board and is implemented by personnel from across the organization. The Company believes that its ERM processes and practices help to identify potential events that may affect the Company; to quantify, evaluate and manage the risks to which it is exposed; and to provide reasonable assurance regarding the achievement of corporate objectives. We believe that the Company’s commitment to and investment in effective ERM can represent a significant competitive advantage, and is essential to the Company’s corporate strategy and goal of achieving for shareholders long-term growth in tangible book value per common share plus the change in accumulated dividends. The Company’s efforts to identify and monitor business environment risk and operational risk are conducted under the oversight of our Board and its committees and coordinated by senior personnel including the Chief Operating Officer and Chief Financial Officer, the Group Chief Risk Officer, and the Group General Counsel and Chief Compliance Officer, each of whom reports directly to the Chief Executive Officer; as well as other senior personnel such as the Chief Accounting Officer and Corporate Controller, and Head of Internal Audit.

The Board is actively involved in the oversight of risks that could affect the Company. Among other things, the members of the Board have regular, direct access to the senior executives named above, as well as other officers responsible for the operational and controls functions of the Company. While the Board primarily delegates its risk management to its committees, as disclosed in the descriptions of each of the committees below and as contemplated in the charters of each of the committees, the Board regularly reviews the coordination of its oversight of Company risk.

We believe our ERM assists our efforts to minimize the likelihood of suffering financial outcomes in excess of the ranges that we have estimated in respect of specific investments, underwriting decisions, or other operating or business activities. We also seek, as a

component of our ERM, to minimize the likelihood of the occurrence, or to reduce the severity, of a range of operational risks to which we are exposed, which we consider to be risks that may not give rise to an immediate financial loss but would potentially impair our strategy, tactical plans, operating platform, or reputation. We believe that effective board oversight enhances the quality of our risk management as well as facilitates sound corporate governance.

Our committees regularly receive and discuss materials from each other, including, but not limited to, the Audit Committee and the Investment and Risk Management Committee. The Company believes this activity enables the directors to be cognizant of the various risks across the Company. Each committee performs a comprehensive annual self-assessment as part of the Board’s overall governance effectiveness review and assessment, which accordingly reflects the committees’ evaluation of our corporate risk management practices and, if applicable, the identification of potential new oversight needs in light of changes in our strategy, operations or business environment. Each committee has broad powers to ensure that it has the resources to satisfy its duties under its charter. Periodically, in an effort to enhance the flow of information and exchange of ideas across the committees, a committee will open its normal course proceedings to informational attendance by members of other committees. The Non-Executive Chair of the Board does not serve on any of these standing committees but participates in each committee from time to time on an ex officio basis and seeks, among other things, to monitor the identification of risks or other matters that might require cross-committee coordination or the attention of the full Board. Each committee also has access to outside advisors as well as management. In addition, management representatives from the Company’s risk, administrative, legal, accounting and internal audit functions separately meet with, and are interviewed by, the Audit Committee in executive sessions. The Company’s Group Chief Risk Officer separately meets with the Investment and Risk Management Committee in executive session.

 

In conjunction with ERM, as well as our strategic and operational planning, we regularly review senior executive compensation and our firm-wide compensation programs and policies, in an ongoing effort to seek to eliminate or mitigate potential risks arising from such programs and policies, to align our executives and employees with the long-term interests of shareholders, to ensure the safety and soundness of our Company over the market cycles and earnings volatility that characterize our industry, and to ensure that our compensation structure, elements and incentives are not reasonably likely to have a material adverse effect on the Company. We seek to design our compensation plans, including our incentive compensation programs, to incorporate a range of components that we believe help to mitigate potential risks while rewarding employees for pursuing our strategic and financial objectives through appropriate risk taking, risk management, and prudent tactical and strategic decision making. Senior executives from our risk, compliance, administrative, and finance functions, as well as the Board’s and the Compensation Committee’s outside compensation consultants, are

involved in this review process, which is conducted under the oversight of our Compensation Committee. The process includes executive sessions between the Compensation Committee and, as the Compensation Committee sees fit, members of management, which include representatives from the risk, administrative, legal, accounting and internal audit functions. With respect to 2014 and the compensation programs in place for 2015, based in part on the information and analyses provided by management and its own advisors, the Compensation Committee concluded that the Company’s compensation programs are not reasonably likely to have a material adverse effect on the Company. Among the features of our compensation programs considered in this review were the following:

 

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Company-wide Basis for Incentive Compensation Determinations. The annual and long-term incentive compensation of our Named Executive Officers and our other executive officers more broadly are principally determined based on our overall corporate performance and the attainment of individual performance goals,

 

								CORPORATE GOVERNANCE—CONTINUED

rather than on the short-term financial performance of a particular business unit, legal entity, segment, or other division of the Company.

 

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Alignment of Shareholder and Executive Interests. The majority of our long-term incentive awards to our executive officers are delivered in the form of restricted shares with three- or four-year vesting periods, including performance shares that vest only on the attainment of Compensation Committee-determined performance metrics as well as service periods. We do not provide grants of equity or equity-linked instruments with a vesting term of less than three years. See “Compensation Discussion and Analysis—Principal Components of Compensation—Long-Term Equity-Based Incentives.” Moreover, as described in detail below, we have adopted share ownership guidelines which apply to each executive officer and director, which require each executive officer and director to hold significant equity interests in the Company. See “Compensation Discussion and Analysis—Principal Components of Compensation—Equity Ownership and Retention Requirements.”

 

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Tangible Performance Metrics Based Upon Corporate Performance. As described in detail below, a meaningful component of the compensation of each Named Executive Officer and each other executive officer consists of restricted common shares granted under our Performance Share Plan, as to which vesting is contingent upon the attainment of specific Company-wide performance measures as well as the completion of service periods, as established by our Compensation Committee in its sole discretion (see “Compensation Discussion and Analysis—Principal Components of Compensation” below for additional information regarding the components of compensation). In each of 2012, 2013 and 2014, 25% of the target equity awards for each Named Executive Officer included within their annual cycle compensation package was comprised of performance shares. No performance shares held by our executives vested based on 2012, 2013 or 2014 performance and 100% of the tranches of such shares related to 2012, 2013 and 2014 performance have been forfeited because the performance hurdles were not attained. See “Compensation Discussion and Analysis—Principal Components of Compensation—Long-Term Equity-Based Incentives” below for additional information.

 

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Balanced Compensation Elements. Our compensation program for executive officers is designed to provide a balanced mix of

salary, annual incentive compensation, and long-term incentive compensation, the realization of which depends on corporate and individual performance. The Compensation Committee believes that the mix of types of compensation delivered by the Company is not overly weighted toward a single form of compensation, or inappropriately designed to overly encourage short-term financial results or unbalanced operational execution, and instead promotes the pursuit of long-term financial performance, enterprise-wide, prudent risk management and stewardship of our capital.

 

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Long-Term Focus. We aspire to be the world’s best underwriter by matching well-structured risks with efficient sources of capital. Through our operating subsidiaries, we seek to produce superior returns for our shareholders by being a trusted, long-term partner to our customers for assessing and managing risk, and by delivering responsive solutions. Overall, our strategy focuses on superior risk selection, superior customer relationships and superior capital management. By focusing on these strategic goals, we seek to produce long-term growth in tangible book value per common share plus accumulated dividends for our shareholders. We anticipate that individual periods may be marked by substantial volatility. Accordingly, we believe that our senior-most executives should have a large proportion of their compensation in the form of long-term equity incentives to reflect the contributions of these executive officers to our longer-term results and to foster their alignment with long-term shareholders. Accordingly, all the equity-based compensation granted to our executive officers is scheduled to vest over three or more years. Moreover, we believe that our policies requiring robust long-term equity ownership of shares by our executives and directors also support alignment with long-term shareholders. We do not permit our executives or directors to hedge, pledge, effect short sales of, or enter into margin loans on, RenaissanceRe securities.

Our Compensation Committee, which consists exclusively of Independent Directors, reviews our compensation programs for consistency with our risk management practices and to assist us in ensuring that our programs align our executives and employees with the long-term interests of shareholders and with seeking to ensure the safety and soundness of our Company over the market cycles and earnings volatility that characterizes our industry. For detailed information regarding the composition of our compensation programs, see “Compensation Discussion and Analysis—Principal Components of Compensation” below.

 

All directors, officers and employees of RenaissanceRe are expected to act at all times in accordance with the policies comprising the Code of Ethics. In 2014, as in prior years, each director and officer affirmed his or her current and continuing compliance with our Code of Ethics. During the first quarter of 2015, each director and officer provided an updated affirmation to the Company. In addition to the

web address below, our Code of Ethics is also available in print to any shareholder upon request. Amendments to our Code of Ethics related to certain matters will be published on the RenaissanceRe website as required under SEC rules, at www.renre.com under “Investor Information—Corporate Governance.”

 

The Audit Committee, on behalf of itself and our other non-management directors, has established procedures to enable employees or other parties who may have a concern about RenaissanceRe’s conduct or policies to communicate that concern.

Our employees are encouraged and expected to report any conduct which they believe in good faith to be an actual or apparent violation of our Code of Ethics. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures pertaining to receiving, retaining, and treating complaints received regarding accounting, internal accounting controls, or auditing matters, and with respect to the confidential, anonymous submission

by Company employees of concerns regarding, among other things, questionable accounting or auditing matters.

These communications may be anonymous, and may be submitted in writing, e-mailed, or reported by phone through various internal and external mechanisms as provided on the Company’s internal website. Additional procedures by which internal communications may be made are provided to each employee. Our Code of Ethics prohibits any employee or director from retaliating or taking any adverse action against anyone for raising or helping to resolve an integrity concern.

 

During 2014, the Board conducted four regularly scheduled meetings, and one special meeting in conjunction with our acquisition of Platinum, each of which was attended by all of the members of the Board (except that Mr. Zore did not attend the August quarterly meeting of the Board). The Audit Committee, the Compensation Committee and the Investment and Risk Management Committee each met four times in 2014. The Audit Committee and the Investment and Risk Management Committee held one joint meeting during 2014. The Transaction Committee and the Offerings Committee each meet on an as-needed basis. The Audit Committee conducted four informational calls in connection with the review of our quarterly earnings releases and periodic filings. Other than Mr. Zore, who did not attend the August meeting of the Board, all incumbent directors attended 100% of the aggregate of all Board meetings and meetings of the committees on which they served during 2014. In addition, the Board or its committees conducted certain other

informational calls relating to various matters, including a number of informational calls in connection with our acquisition of Platinum.

Our Independent Directors meet separately from Mr. O’Donnell, our sole management director, and other members of management in executive sessions each quarter. In connection with each of the regularly scheduled Board meetings in 2014, Mr. Levy acted as the chair of the executive sessions of the Board. The standing committees of the Board also conduct regular executive sessions; these are chaired by the respective chairpersons of the committees.

The members of the Board are expected to attend the Company’s annual general meetings of shareholders. Our annual general meetings of shareholders are required by our Bye-laws to be held outside of the United States and have to date always been held in Bermuda. At the 2014 Annual General Meeting of Shareholders, all of the directors elected to the Board were in attendance.

 

								COMMITTEES OF THE BOARD

The Audit Committee presently consists of Messrs. Bushnell, Gibbons (Chair) and MacGinnitie. The Board has determined that each member of the Audit Committee meets the independence standards of the Commission and the NYSE. The Board has also determined that each member of the Audit Committee is financially literate and has accounting or related financial management expertise as required by NYSE rules and is an “audit committee financial expert” under the Commission’s rules. Following the Annual Meeting and concurrent meetings of the Board in May, it is expected that Mr. Hagerty, if elected, will commence serving on the Audit Committee. The Board has also determined that Mr. Hagerty meets the independence standards of the Commission and the NYSE and is financially literate and has accounting or related financial management expertise as required by NYSE rules and is an “audit committee financial expert” under the Commission’s rules.

The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to, among other things: (i) the integrity of our financial statements; (ii) our compliance with legal and regulatory requirements; (iii) our independent auditors’ qualifications and independence; and (iv) the performance of our internal audit function and independent auditors.

The Audit Committee reviews and discusses our annual and quarterly financial statements, press releases, and other financial information and the top-line revenue estimates we provide to analysts, investors, and rating agencies, with both management and the independent auditors. The Audit Committee also reviews the effect of regulatory and accounting initiatives on our financial statements with management, the Head of Internal Audit, and our independent auditors.

In addition, the Audit Committee provides an avenue for communication between our independent auditors, financial management, and the Board. The Audit Committee has the sole authority to appoint, compensate, retain and conduct oversight of the work of our independent auditors, and to approve any proposed non-audit work to be conducted by the independent auditors. The Audit Committee is required to obtain, at least annually, a report from our independent auditors describing the auditors’ quality control procedures, issues arising from the results of implementing such procedures, the resolution or proposed resolution of any such issues, and any relationships between the auditors and us.

Furthermore, the Audit Committee is responsible for the Board-level oversight of our management-based Controls and Compliance Committee (the “Controls Committee”). The Controls Committee is responsible for implementing and reviewing policies, procedures, and practices relating to accounting, financial reporting, internal controls, regulatory, legal, compliance, and related matters, for ensuring our compliance with applicable laws, regulations, and other relevant standards and for reviewing and approving structured or complex transactions and products that may pose accounting, regulatory, financial reporting, compliance, legal, reputation, tax, or other risks to the Company. The Controls Committee reports regularly to the Audit Committee.

The Audit Committee has adopted a written charter, which is reviewed and reassessed annually. The Audit Committee charter is available on our website at www.renre.com under “Investor Information—Corporate Governance” and is available in print upon request to any shareholder.

 

Representatives of our risk, administrative, legal, accounting and internal audit functions regularly participate in the meetings of the Audit Committee. Other members of management also participate regularly to support the Audit Committee’s proceedings, or as requested by the Audit Committee. Executive sessions of the Audit Committee are held in conjunction with each committee meeting throughout the year, including sessions in which the committee meets with our independent auditors and independent actuaries, as well as individual members of management, including the Head of Internal Audit, without other members of management present.

Pursuant to the Audit Committee charter and applicable rules of the NYSE, our Audit Committee performs an annual self-assessment. In respect of 2014, the Audit Committee concluded that, in all material respects, it had fulfilled its responsibilities and satisfied the requirements of the Audit Committee charter and applicable laws and regulations.

 

Compensation Oversight

The Compensation Committee presently consists of Ms. Hamilton and Messrs. Klehm (Chair) and Trivisonno. The Compensation Committee has responsibility for executive officer and director compensation (as well as compensation for the Head of Internal Audit), corporate governance matters, and the nomination and evaluation of directors. It has the authority to establish compensation policies and programs, to administer all employee and Board stock-based compensation plans, and to approve stock options, restricted shares, performance shares, and similar share-based grants under our stock incentive plans. As summarized above, the Compensation Committee reviews our compensation programs for consistency with our risk management practices and to assist us in seeking to ensure that our compensation programs align our executives and employees with the long-term interests of shareholders and with seeking to ensure the safety and soundness of our Company over the market cycles and earnings volatility that characterize our industry. The Board has determined that all members of the Compensation Committee meet the independence standards of Rule 16b-3 of the Exchange Act and the NYSE.

The Compensation Committee has the authority to retain outside advisors, including compensation consultants and counsel, to assist it with its responsibilities, including its evaluation of our compensation plans and programs and the determination of the actual and proposed compensation for executive officers and directors; the Compensation Committee also has the authority to terminate any of these outside advisors. The Compensation Committee also has the authority to approve any such consultant’s fees and the other terms of such retention, which is at RenaissanceRe’s expense. The Compensation Committee’s current utilization of outside compensation consultants on executive compensation matters is summarized below under “Compensation Discussion and Analysis—Governance and Compensation Process—Use of Third-Party Advisors.”

On behalf of the Board, our Compensation Committee collaborates with our Chief Executive Officer in the development and monitoring of our programs for emergency and long-term executive succession. The Compensation Committee generally reviews these matters with our Chief Executive Officer quarterly. Individuals who are identified as having potential for senior executive positions are identified to the Compensation Committee, in part utilizing the results of the Company’s internal review and feedback processes. The careers of such persons are monitored to ensure that over time they have

appropriate exposure both to the Board and to our businesses. These individuals interact with our Board in various ways, including through participation in Board meetings and other Board-related activities and meetings with individual directors. The Compensation Committee regularly briefs the full Board on these matters.

Director Nominations

Pursuant to applicable NYSE rules, the Board has accorded to the Compensation Committee the responsibility to consider the effectiveness and composition of the Board, and to nominate candidates for election by our shareholders, and to fill vacancies on the Board that emerge from time to time. The Compensation Committee has articulated and communicated with the Board the capabilities, attributes, characteristics and traits it believes support effective director contributions and fiduciary oversight in light of the criteria set forth below. From time to time in prior years, and including in 2014, the Compensation Committee engaged executive recruiters to identify potential nominees to the Board, including in respect of the criteria referred to above, and to provide related services such as background checks and other due diligence.

In connection with its consideration of potential nominees for election by shareholders, the Compensation Committee will consider nominees to the Board recommended by no fewer than 20 shareholders holding in the aggregate not less than 10% of the outstanding paid-up share capital of RenaissanceRe. Any such recommendation must be sent to our Corporate Secretary not less than 60 days prior to the scheduled date of the annual general meeting of shareholders and must set forth for each nominee: (i) the name, age, business address, and residence address of the nominee; (ii) the principal occupation or employment of the nominee; (iii) the class or series and number of shares of capital stock of RenaissanceRe that are owned beneficially or of record by the nominee; and (iv) any other information relating to the nominee that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (“Proxy Filings”). The written notice must also include the following information with regard to the shareholders giving the notice:

 

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the name and record address of such shareholders;

 

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the class or series and number of shares of capital stock of RenaissanceRe that are owned beneficially or of record by such shareholders;

 

								COMMITTEES OF THE BOARD—CONTINUED

•

a description of all arrangements or understandings between such shareholders and each proposed nominee and any other person (including his or her name and address) pursuant to which the nomination(s) are to be made by such shareholders;

 

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a representation that such shareholder intends to appear in person or by proxy at the annual general meeting of shareholders to nominate the persons named in its notice; and

 

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any other information relating to such shareholder that would be required to be disclosed in a Proxy Filing.

Such notice must be accompanied by a written consent of each proposed nominee to be named as a nominee and to serve as a director if elected. The Compensation Committee may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.

Assuming that the shareholders suggesting a nomination follow the procedure outlined above, in considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, the Compensation Committee will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by Board members or by other persons. These criteria typically include the candidate’s integrity, business acumen, leadership qualities, experience in the reinsurance, insurance, and risk-bearing industries and other industries in which RenaissanceRe may participate, independence, judgment, mindset, vision, record of accomplishment, ability to work with others, potential conflicts of interest and the ability and willingness to devote sufficient time to carrying out Board duties effectively in light of our Bermuda location. The Compensation Committee does not assign specific weight to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Our Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge, and abilities that will allow the Board to fulfill its responsibilities. To that end, the Board considers, among other factors, the diversity of candidates for directors. See “Corporate Governance—Director Qualifications and Director Nominee Considerations” and “Corporate Governance—Board Diversity” above.

Corporate Governance

Pursuant to the Compensation Committee charter and applicable NYSE rules, our Compensation Committee performs an annual self-assessment. In respect of 2014, the Compensation Committee concluded that, in all material respects, it had fulfilled its responsibilities and satisfied the requirements of the Compensation Committee charter and applicable laws and regulations.

In addition, pursuant to applicable NYSE rules, the Compensation Committee oversees, at least annually, an assessment of the effectiveness of the Board’s corporate governance practices. Over time the Compensation Committee has used a range of external and internal resources to facilitate and support these assessments. In 2014, the Committee retained an independent third party (the “Governance Consultant”) to evaluate the Board’s corporate governance practices and processes. The Governance Consultant conducted in-depth interviews with each director and Named Executive Officer, and reviewed a wide range of Company and Board materials. In August 2014 the Governance Consultant presented its

findings to the full Board. The Governance Consultant observed that the process had been effective with a high degree of cooperation from each director and each participating member of management. The Governance Consultant opined to the Board that, in sum, the Board’s and the Company’s governance policies, practices and processes were effective and that the process had identified no “red flags”; indicated that the Company’s governance compared favorably to the broader public company data maintained by that firm; and provided that there was no specific area in which the Company and the Board did not meet its governance obligations. Among other things, the Governance Consultant commented favorably on the success with which the Board and the Company effectuated the Company’s 2013 chief executive officer succession; the quality of fiduciary support and business execution of the management team; the cultivation of respectful relationships among directors and management; and the candor, integrity and work effort which the Governance Consultant stated characterized the Company’s boardroom culture. In addition, the Governance Consultant commented on the ongoing efforts of the Board to oversee the Company’s development and execution of its long-term strategic vision, annual strategic plans and related tactical plans, observing that the process participants believed that meaningful enhancements had been adopted in recent years.

The Governance Consultant also recommended considering enhancements to a certain number of discrete areas, including continued focus on strategic planning and oversight. With the support of management, the Board has implemented related enhancements, including certain changes to the Board and committee agenda setting and reporting processes. We anticipate that specific processes and resources will continue to evolve over time as our strategy and market position changes, and as circumstances otherwise warrant.

As noted above, the Compensation Committee regularly reviews and evaluates our Corporate Governance Guidelines, charters and practices. In November 2014, the Compensation Committee recommended that the Board approve an amendment to our Corporate Governance Guidelines to include a majority voting policy for uncontested director elections. Our revised Corporate Governance Guidelines are described in more detail below under “Compensation Discussion and Analysis—Shareholder Engagement; Adoption of Majority Voting.”

The Compensation Committee is responsible, after consideration of the desires of individual Board members and of the input of the Non-Executive Chair of the Board and the Chief Executive Officer, for the assignment of Board members to various committees. Chair assignments are expected to be rotated from time to time, although exceptions may also be made as circumstances warrant (for example, the deepening of relevant expertise). Non-chair assignments are expected to be rotated periodically, though not necessarily within any specified time frame, to promote new perspectives within each committee.

Processes and Support

Our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, and Group General Counsel participate in the Compensation Committee’s meetings. Other members of management also participate regularly to support the Compensation Committee’s proceedings, or as requested by the Compensation Committee. The Compensation Committee meets regularly in

 

executive session at each of its meetings without members of management present. The Compensation Committee has access to, and regularly meets with, its own independent compensation consultant and counsel to the Board. These meetings occur both with and without management present. Our Chief Executive Officer provides the Compensation Committee with strategic context regarding our products, underwriting and operational risks, strategy and performance, and shareholder value-creation over time, as well as advising the Compensation Committee on matters such as the alignment of our incentive plan performance measures with our overall strategy, and the impact of the design of our equity incentive awards on our ability to attract, motivate, and retain highly talented executive officers. The Chief Executive Officer also makes recommendations to the Compensation Committee regarding compensation for current or proposed executive officers, who are supervised by our Chief Executive Officer, including his evaluation of the performance of our Named Executive Officers (other than the Chief Executive Officer), who are currently the senior members of our executive management team. Our Chief Operating Officer and Chief Financial Officer, among other things, provides the Compensation Committee with internal and external analyses regarding the structure and competitiveness of our

compensation programs and the details of the design and operation of our various compensation and incentive plans, and provides the Compensation Committee with detailed reviews of the estimated and actual results for the performance measures impacting estimated and actual payments to the executive officers. Our Group General Counsel is available at meetings to provide input on the Board’s and the Compensation Committee’s governance and legal obligations, and to provide analyses of developments relating to the legal and regulatory environment applicable to us. Moreover, attendance by the Chief Executive Officer and other members of management facilitates management’s review of this Proxy Statement in order to determine that the Compensation Discussion and Analysis included in this Proxy Statement is appropriate and for purposes of the executive officer certification required by the Sarbanes-Oxley Act of 2002.

The Compensation Committee has adopted a written charter, which is reviewed and reassessed annually. The Compensation Committee charter is available on our website at www.renre.com under “Investor Information—Corporate Governance” and is available in print upon request to any shareholder.

 

The Investment and Risk Management Committee presently consists of Messrs. Gray, Santomero (Chair) and Zore. The primary purposes of the Investment and Risk Management Committee, as outlined in its charter, are to assist the Board with oversight of the Company’s (a) investment activities and (b) financial risk management. Our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, Group Chief Risk Officer, Chief Investment Officer, and the President of RenaissanceRe Ventures Ltd., among other members of management from time to time, participate in the Investment and Risk Management Committee’s meetings. However, the Investment and Risk Management Committee regularly meets in executive session without members of management present.

With respect to investment activities, among other things, the Investment and Risk Management Committee (i) advises the Board regarding the Company’s investment-related activities, including its investment guidelines and benchmarks, specific investment transactions, investment manager review and investment performance; (ii) oversees the development of, maintenance of, and compliance with investment strategies, guidelines and objectives, including asset allocation, and seeks to ensure that adequate procedures are in place to monitor adherence to the Company’s investment guidelines; (iii) oversees the means and process by which the Company discharges its fiduciary duties with respect to investment matters to minority investors in the Company’s managed joint ventures; and (iv) oversees the strategic asset allocations of our investment portfolio.

With respect to financial risk management, among other things, the Investment and Risk Management Committee (i) assists the Board in assessing and providing oversight to management relating to the identification and evaluation of the Company’s financial, non-operational risks, which it closely coordinates with the Audit Committee; (ii) oversees the establishment and maintenance of regular reporting systems from management to the Investment and Risk Management Committee with respect to current and projected financial, non-operational risks, and assesses the adequacy of management’s risk assessments and the appropriateness of any significant judgments made by management in such assessments; (iii) regularly inquires of management about significant financial, non-operational risks or exposures and assesses the steps management has taken or plans to take to minimize, offset or tolerate such risks; (iv) reviews and reports to the Board, as appropriate, as to risks in the Company’s liability portfolios; (v) reviews the processes and systems by which the Company manages its third-party credit exposures; and (vi) oversees our corporate risk management, including the financial risk associated with the insurance and reinsurance we write.

The Investment and Risk Management Committee has adopted a written charter, which is reviewed and reassessed annually. The Investment and Risk Management Committee also conducts an annual self-evaluation of its performance including its effectiveness and compliance with its charter. In respect of 2014, the Investment and Risk Management Committee concluded that, in all material respects, it had fulfilled its responsibilities and satisfied the requirements of the Investment and Risk Management Committee charter.

 

								COMMITTEES OF THE BOARD—CONTINUED

Our directors seek to effectuate effective oversight of management’s efforts to ensure the safety and soundness of our Company and our appropriate implementation of risk mitigation policies and programs. In addition to the specific risk management activities conducted by the standing committees of the Board as summarized above and as contemplated in the charters of each of the committees, the committees seek to regularly review the coordination of their oversight of our financial and operating risks and routinely collaborate to address specific matters requiring coordination and cross-committee oversight. In addition, at each quarterly meeting, each committee reviews and discusses its current agenda and future agendas in the

context of the Company’s strategic plan and any new Company, industry or market information communicated to the Board. Among other things, regular agenda items of the standing committees foster consideration of reported items for potential reporting to other committees or to the full Board, and the quarterly agenda of the full Board regularly provides for reporting by each standing committee in respect of these discussions. We believe that these and other collaborative efforts of the Board’s oversight support our efforts to sustain high levels of ERM, as well as facilitate sound corporate governance.

 

The Transaction Committee presently consists of Messrs. Gibbons, Gray, Levy, and O’Donnell (Chair). The Transaction Committee has the authority of the Board to consider and approve, on behalf of the

full Board, certain strategic investments and other possible transactions. The Transaction Committee meets on an as-needed basis and did not meet in 2014.

 

The Offerings Committee presently consists of Messrs. Gibbons, Gray, Levy and O’Donnell (Chair). The Offerings Committee has the authority to consider and approve, on behalf of the full Board, transactions pursuant to RenaissanceRe’s shelf registration program,

including setting the terms, amount and price of any such offering. The Offerings Committee meets on an as-needed basis and did not meet in 2014.

 

Mr. Levy currently serves as the Non-Executive Chair of the Board. In addition to chairing each meeting of the Board, Mr. Levy’s role as Non-Executive Chair of the Board includes: (i) the authority to call meetings of the Board; (ii) setting the agendas for the Board meetings and executive sessions to ensure that the Board members receive the information necessary to fulfill the Board’s primary responsibilities; (iii) chairing executive sessions of the Independent Directors; (iv) briefing the Chief Executive Officer on issues arising in the executive sessions, as appropriate; (v) facilitating discussion among the Independent Directors on key issues and concerns outside of a Board meeting and serving as a non-exclusive conduit to the Chief Executive Officer of the views, concerns, and issues of the

Independent Directors; (vi) interviewing candidates for directorship; and (vii) together or in coordination with Mr. O’Donnell, representing the organization in external interactions with certain of the Company’s stakeholders and employees.

Mr. Levy does not serve as a member of the Audit Committee, the Compensation Committee or the Investment and Risk Management Committee, but rather attends such meetings and other functions of the committees on an ex officio basis as the facts and circumstances warrant. As noted, Mr. Levy serves as a member of the Transaction Committee and Offerings Committee, which meet on an as-needed basis.

 

Under Section 16 of the Exchange Act, our directors and executive officers, and any persons holding more than 10% of the outstanding common shares, are required to report their initial ownership of common shares and any subsequent changes in that ownership to the Commission. Specific filing dates for these reports have been established by the Commission, and we are required to disclose in this Proxy Statement any failure by such persons to file these reports

in a timely manner during the 2014 fiscal year. Based upon our review of copies of such reports furnished to us, we believe that during the 2014 fiscal year our executive officers and directors and the holders of more than 10% of the outstanding common shares complied with all reporting requirements of Section 16(a) under the Exchange Act.

 

								DIRECTOR SHARE OWNERSHIP GUIDELINES

Our non-executive directors receive the majority of their directors’ compensation in RenaissanceRe equity and are required to maintain certain ownership levels of common shares during their service. Each of our non-executive directors is required to hold common shares having a value equal to five times the then-current annual cash retainer applicable to the director (or such lesser amount as the director may have been granted to date). See “Director Compensation—Director Equity Ownership Policy” for more information on our share ownership guidelines. Our Compensation Committee retains discretion to waive non-compliance with our director equity ownership policy in light of an individual director’s particular facts and circumstances from time to time. For information

on the Independent Directors’ share ownership, see “Security Ownership of Certain Beneficial Owners, Management and Directors.” In addition, our Independent Directors and executive officers are subject to our anti-hedging and other trading policies, which, unless otherwise approved by our Group General Counsel, prohibit transactions in our securities outside of Company-designated “window” periods (except pursuant to previously adopted, approved Rule 10b5-1 plans), hedging the market value of any of the Company’s securities, and short sales of, or margin loans on, RenaissanceRe securities. Each of our directors is in compliance with our anti-hedging and other trading policies.

 

No director who served on the Compensation Committee during fiscal year 2014 was, during fiscal year 2014, an officer or employee of the Company or was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K. No executive

officer of the Company served on any board of directors or compensation committee of any other company for which any of the Company’s directors served as an executive officer at any time during fiscal year 2014.

 

								AUDIT COMMITTEE REPORT

								COMPENSATION DISCUSSION AND ANALYSIS

Highlights of Our Compensation Program

What We DO:

 

ü

Tie Pay to Performance. A significant portion of each Named Executive Officer’s annual compensation is tied to corporate and individual performance, including the determination of each Named Executive Officer’s annual cash incentive bonus and the amount of performance shares that are earned under our Performance Share Plan.

 

ü	Mitigate Risk. We seek to design and manage our compensation plans in part to manage business and operational risk in conjunction with our broader ERM efforts, including by designing elements intended to discourage short-term risk taking at the expense of long-term results.

 

ü	Conduct an Annual Say-on-Pay Vote. We value our shareholders’ input on our executive compensation programs and provide them with the opportunity each year to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers in this Proxy Statement.

 

ü

Maintain Robust Stock Ownership Guidelines. To further align the interests of our Named Executive Officers and our shareholders, our Named Executive Officers are subject to a robust equity ownership policy. Our Chief Executive Officer is required to hold Company equity having a value equal to 7.5 times his actual salary and each of our other Named Executive Officers is required to hold Company equity having a value equal to 4.5 times his target salary. Each of our Named Executive Officers currently holds equity in excess of these values.

 

ü	Require Minimum Vesting Periods. We utilize vesting periods of no less than three years under our long-term incentive plans to align the long-term interests of our Named Executive Officers with those of our shareholders.

 

ü	Have a Clawback Policy. Our Board has authority to recoup certain compensation payments to our Chief Executive Officer if the Company is required to file an accounting restatement with the SEC due to the material noncompliance with applicable securities law financial reporting requirements.

What We DO NOT Do:

 

û

No Vesting of Performance Shares if Threshold Performance Is Not Achieved. No performance shares vest with respect to a performance year if our relative total shareholder return rank is below the 35th percentile of our peer group. As a result, 100% of the performance shares related to each of 2012, 2013 and 2014 performance were forfeited.

 

û	No Tax Gross-ups for Excise Taxes. We do not provide employees, including our Named Executive Officers, with a gross-up for U.S. excise taxes that may be imposed as a result of severance or other payments made in connection with a change of control.

 

û	No Tax Gross-ups on Perquisites to Named Executive Officers. Our Named Executive Officers are not entitled to U.S. federal income tax gross-ups on perquisites.

 

û	No Repricing of Stock Options and Stock Appreciation Rights. Our stock incentive plans prohibit the repricing of stock options and stock appreciation rights without prior shareholder approval. We have never repriced stock options or stock appreciation rights in the past.

 

û	No Special Retirement Programs for Executive Officers. Our Named Executive Officers do not participate in any retirement programs that are not generally available to our employees.

 

û

No Hedging and No Pledging. Our employees, including our Named Executive Officers, and our directors, are subject to our trading policies, which prohibit, among other things, our employees and directors from directly hedging the value of, entering into short sales or margin loans on, or pledging any of our securities.

 

û	No Unapproved Trading Plans. Our Named Executive Officers are prohibited from establishing a trading plan pursuant to Exchange Act Rule 10b5-1 without pre-approval and may not trade in our stock outside of such a plan without pre-approval.

 

û	No Payment of Dividends on Unvested Performance Shares. We do not pay dividends or dividend equivalents on unearned and unvested performance shares.

 

û	No Vesting of Equity Awards in Less than Three Years. Our long-term equity-based incentive awards, whether in performance shares, restricted shares, cash-settled restricted units, or otherwise, all provide for vesting across a period of three or more years.

 

2014 Strategic, Financial and Operating Highlights

RenaissanceRe achieved strong operating and financial performance in 2014, notwithstanding the increasingly competitive reinsurance market. We believe that 2014 represented a successful year in respect of our long-term strategic objectives and the execution of our 2014 tactical plan. In particular, we successfully engaged in a process to pursue alternatives to accelerate our organic growth strategy through the evaluation and potential execution of strategic transactions, which culminated in our announcement in November 2014 of our agreement to acquire Platinum. As summarized in more detail below, we believe, and our Board’s assessment of our 2014 execution reflected, that our planning and efforts relating to strategic, analytical, due diligence, structuring, talent and client retention, negotiation, financial planning and integration efforts associated with our acquisition of Platinum were strong and are likely to foster long-term strategic and financial value for shareholders of RenaissanceRe.

Our financial and operating performance was strong in 2014. Among other things, we achieved:

 

•

An increase in tangible book value per common share plus change in accumulated dividends of 13.9%, which was seventh highest in our peer group (see “—The Market for Talent” below for additional information regarding our peer group);

 

•

An operating return on average common equity of 13.7%, third in our peer group;

 

•

Gross premiums written of $1.6 billion, down only 3.4% from 2013 while maintaining sustained efforts to preserve portfolio quality and maintain underwriting discipline;

 

•

A share price to tangible book value per common share multiple of 1.15x; and

 

•

Substantial returns of capital to our investors, including $582.5 million of capital to our common and preferred shareholders through share repurchases and dividends.

In addition to our execution in respect of Platinum, we enhanced our strategy and built our competitive advantages further in 2014, as follows:

 

•

Attractive Net Portfolio of Assumed Risks. We seek to construct a portfolio of reinsurance, insurance and insurance risks that produces a superior expected return. Our portfolio construction and risk management seek to focus on a broad range of potential outcomes, and we seek to align our compensation determinations with our assessment of these efforts, rather than focus exclusively on the outcomes of any one year in which our short term financial results are heavily impacted by the occurrence or non-occurrence of catastrophic loss events. Throughout 2014, we made several tactical decisions, which we judged to be successful, including a decision to reduce net exposure to risk with the weakest expected returns while maintaining exposure to the perils we believe maintained the most attractive expected returns. Overall, considering the challenging conditions in the markets in which we specialize, we were pleased with the quality of the portfolio we built in 2014.

•

Superior Customer Relationships. We grew the depth and breadth of our relationships with identified core clients and expanded the services and products we can offer them, including new product launches and program expansions. We continued to expand our specialty reinsurance line of business by adding key team members, new product offerings, and improved internal risk tools, supporting the growth of our casualty and specialty lines to approximately $347 million of gross written premium in our specialty segment in 2014. We believe that we succeeded in key initiatives to serve our clients in locations suitable to them, sourcing risk we believe to be attractive through the continued successful build-out of our platforms in Lloyd’s, the U.S. and Singapore. At the same time, we continued to strengthen our Bermuda operations and expanded client options available through our flagship operating entities.

 

•

Superior Risk Selection. We completed projects to build, enhance or refresh important tools, databases, models, and systems that we use for strategic risk management activities including portfolio construction, analysis, diagnostics, aggregation, and roll-up.

 

•

Superior Capital Management. We executed our joint venture and other third-party capital structure strategies successfully by expanding our investor base, rewarding long-term investors with capital returns, and expanding our strategy in respect of our Upsilon vehicles. We returned more capital to shareholders than in any previous year, totaling $582.5 million of capital to our common and preferred shareholders through share repurchases and dividends. In addition, in 2014, we returned $342.1 million of capital to third party investors in our managed joint ventures. We maintained all of our ratings for our operating and joint ventures businesses. We generated strong risk-adjusted returns from our investment portfolio, with total investment return of $165 million in 2014, reflecting, among other things, our determinations in respect of our public equity allocation and strong results from our portfolio of strategic investments.

 

•

Strategic Projects. As summarized in more detail below, we successfully implemented a range of other strategic projects including key initiatives related to our reinsurance accounting systems and investments platform, our suite of risk management tools, the potential advent of Solvency II and developments in respect of the Bermuda regulatory system, our U.S. federal and state government engagement efforts, and other items reviewed, approved and monitored by our Board.

Additional information regarding these and other achievements in 2014 is provided below under the heading “—Principal Components of Compensation—2014 Compensation Determinations.” The Compensation Committee carefully considered this information, together with input from management and its own advisers, in making its determinations with respect to 2014 compensation for our management team and our Named Executive Officers.

In light of the foregoing and for the reasons set forth below, the Compensation Committee recommends that our shareholders vote favorably on this year’s resolution in Proposal 2 to approve 2014 Named Executive Officer compensation.

 

								COMPENSATION DISCUSSION AND ANALYSIS—CONTINUED

Over time and in light of our business strategy, we have sought to develop a compensation philosophy that both supports and is consistent with our risk-management practices, and that helps to ensure that our compensation programs align our executives and employees with the long-term interests of our shareholders. To support our mission to seek to be the best underwriter, our strategy is to operate an integrated system to match well-structured risk and efficient capital. We believe that operating our business as an integrated system enables us to pursue three competitive advantages: superior customer relationships, superior risk selection and superior capital management. Accordingly, we rely on a team-based approach to lead, manage, and operate the Company. As a result, our senior executive officers, including our Named Executive Officers, generally have responsibilities not only relating to their respective business units or functions, but also in developing, implementing, and monitoring our overall strategic plan, maintaining and enhancing our operations and resources, identifying, analyzing, responding to, and managing various risks impacting the Company from time to time, and developing and addressing our policy, talent, and leadership needs on a Company-wide basis. Our compensation philosophy therefore seeks to reinforce

and reward this team-based culture and approach by incentivizing our Named Executive Officers through pay practices based substantially on the overall success of the Company, rather than predominantly on that of individual business units or functions. Furthermore, our compensation philosophy seeks to ensure the operational and financial consistency of our Company over the market cycles and earnings volatility that characterize our industry.

The key principles of our executive compensation philosophy are:

 

•

Aligning shareholder and executive interests through significant share ownership and retention requirements for all of our senior management, including each of our Named Executive Officers;

 

•

Fostering performance-based compensation by holding a meaningful portion of pay at risk through our performance-based annual incentive bonus and our long-term equity program; and

 

•

Encouraging a team structure that supports our strategy of operating through an integrated system and rewarding executives substantially on the basis of team success that has a positive impact on overall business results.

 

2014 Compensation

As shown in the Summary Compensation Table below, total reported compensation of our Chief Executive Officer decreased meaningfully in 2014, driven by a reduction in his performance-based annual incentive bonus and reduced grants of long-term equity incentives. In sum, Mr. O’Donnell’s:

 

•

total compensation (as reported in the Summary Compensation Table) decreased by 11.4% in 2014 as compared to 2013, from $8,233,288 to $7,297,681;

 

•

cash-based annual incentive performance bonus decreased by 10.0% in 2014 as compared to 2013, from $2,413,130 to $2,171,820, as a result of a reduced formula payout;

•

long-term incentive equity grants (as reported in our Summary Compensation Table) decreased by 14.8% in 2014 as compared to 2013, from a grant date fair value of $4,316,338 in 2013 to $3,679,996 in 2014; and

 

•

performance shares that were subject to the 2014 performance period were forfeited in their entirety (as discussed in more detail below), which shares had a value as of December 31, 2014 equal to $980,682.

The following table sets forth our Chief Executive Officer’s total compensation, as reported in the Summary Compensation Table (other than amounts reported in the “All Other Compensation” column) for each of 2012, 2013 and 2014:

 

Similarly, annual compensation realized by our other Named Executive Officers was below targeted levels, driven largely by the forfeiture of all performance shares relating to the 2014 calendar year

performance period and the decrease in the business performance factor applied to the 2014 annual incentive performance bonus as compared to 2013. Moreover, the grant date fair value of long-term

 

incentive equity grants made to each of Messrs. Kelly and Branagan was reduced in 2014 compared to 2013.

The Compensation Committee reviewed these compensation outcomes and adjustments in light of factors, including, on the one hand, our strong operating performance and attainment of our strategic and tactical goals (as described in more detail below), and our relative total shareholder return during the measurement periods pertinent to the 2014 performance period, on the other. The Compensation Committee determined that the 2014 compensation of our Named Executive Officers was appropriate in light of these factors, our compensation philosophy and our risk management goals.

2014 Performance Share Results

While our business performance factor, which relates to the annual cash-based performance bonus of our Named Executive Officers and other employees, is in part measured through financial performance and in part based on our strategic accomplishments, as assessed through the process outlined below (see “—Principal Components of Compensation—Performance-Based Annual Incentive Bonus” below), our performance share program is purely formulaic.

For our performance share program, the Compensation Committee has established performance thresholds based upon the Company’s total shareholder return relative to our peer group over a three-year period. The Compensation Committee believes that total shareholder

return is one of the most relevant measures of the long-term success of the Company’s business. Relative total shareholder return has been selected for several reasons, most significantly its likely correlation to long-term growth in tangible book value per common share. In addition, it is simple to calculate, verify and compare; and directly correlates with shareholder results over the performance period. Because of the historical stability of the relative total shareholder return metric, the Compensation Committee determined not to adjust the threshold calculation utilized for any of these periods, which might have been necessary had an absolute metric been used. The Compensation Committee may consider adjustments to this formula and may consider and select alternative or supplemental metrics for future periods.

As noted below, the drop in our stock price at the end of 2014 following the announcement of the Platinum acquisition, had a significant adverse impact on our 2014 total shareholder return for purposes of our performance share program. Given our relative total shareholder return performance for 2014, as determined under our performance share program, all of the performance share tranches related to 2014 performance are not eligible to become vested and were forfeited following the approval of the total shareholder return results by the Board in February 2015. This impacted one-third of the performance shares granted in each of the 2012-2014, 2013-2015 and 2014-2016 performance share cycles, as shown in the following table:

 

The target value of the forfeited shares as of December 31, 2014 for each of our 2012-2014, 2013-2015 and 2014-2016 performance share cycles and Mr. O’Donnell’s 2012 and 2013 special performance share award as a result of 2014 relative total shareholder return performance is shown in the table below. The values shown represent the value of the number of performance shares (together with any accrued but unpaid dividends), measured at December 31, 2014, that were forfeited by the respective Named Executive Officers.

 

Name		2012-2014 Performance Share Grants—Value of Performance Shares Forfeited at Target (1)
Kevin J. O’Donnell		$	980,682
Jeffrey D. Kelly		$	383,925
Ross A. Curtis		$	262,851
Ian D. Branagan		$	294,369
Stephen H. Weinstein		$	300,965

(1)	Based on the closing price of the common shares of $97.22 on December 31, 2014.

Pay and Performance Over the Long Term

In 2014, Mercer (US) Inc. (“Mercer”) delivered to the Compensation Committee a review of pay and performance for our Chief Executive Officer, evaluating his realizable pay for the previous five-year period.

Pay realized over the short and long term and financial performance across key financial measures were compared on a relative basis to our peer group (see “—The Market for Talent” below for additional information regarding our peer group) to determine whether the Company’s performance was aligned with the realizable pay delivered to our Chief Executive Officer. For purposes of this analysis, realizable pay is defined for the relevant period as base salary earned, plus actual performance-based incentive bonus paid, plus the fiscal year-end value of equity awards as defined by: the “in-the-money” value of stock options granted in the period; the value of the restricted shares granted in the period; and/or the value of the equity underlying performance share or unit awards settled in the period. This analysis was conducted over a five-year period.

Overall, the review confirmed that there was alignment over the five-year time period, which supports our executive compensation philosophy. Because of the highly volatile nature of our business and

 

								COMPENSATION DISCUSSION AND ANALYSIS—CONTINUED

industry, we seek to structure our pay programs to align with performance over the long term.

The following graphs illustrate the alignment of our Chief Executive Officer’s five-year realizable pay, based on the most recently available

complete peer group proxy data, with growth in book value per common share (compounded annually), as compared to our current peer group, as well as total shareholder return performance over the same period.

 

 

 

At our 2014 Annual General Meeting of Shareholders, our Say on Pay Proposal resulted in a favorable vote from approximately 91% of the shares cast. We believe this high percentage primarily was due to the appropriateness of the overall design of our compensation programs and our regular communications with our shareholders and responsiveness to shareholder feedback obtained through our regular engagement process. After consideration of the shareholder input we received, which in general supported the structure and design of our compensation plans and programs, particularly our emphasis on long-term equity awards, as well as our strong performance and management’s and the Compensation Committee’s assessment of the continuing success of our compensation programs, the

Compensation Committee determined that the overall design of our compensation programs during 2014 would be maintained consistent with immediate past years. The Compensation Committee will continue to work to ensure that our Named Executive Officers’ interests are aligned with our shareholders’ interests to support long-term value creation and continue to strengthen the Company.

Consistent with the shareholder resolution on the frequency of the vote to approve our Named Executive Officer’s compensation, the Compensation Committee has determined to submit an advisory vote on an annual basis.

 

Engagement and Outreach

We have a regular and robust outreach program aimed at facilitating communications with our shareholders. These discussions principally focus on our corporate strategy, financial results and performance and related matters. These discussions principally occur in public settings or through other mediums in accordance with Regulation FD as promulgated by the SEC. We also seek and receive input from time to time regarding additional matters, such as those relating to our executive compensation program and on corporate governance matters.

In 2014, in addition to financial reporting and strategic outlook, our shareholder engagement and communications principally focused on discussing our views of the benefit of the Platinum acquisition and pursuing support for the approval of the acquisition by the former shareholders of Platinum. At the special meeting of Platinum’s shareholders held on February 27, 2015, approximately 99% of the shares cast were voted in favor of the acquisition.

Adoption of Majority Voting Policy

In November 2014, our Board of Directors approved an amendment to the Company’s Corporate Governance Guidelines to include a

 

majority voting policy for uncontested director elections. The Board adopted the change as part of its regular review and evaluation of the Corporate Governance Guidelines, charters and practices. The Board’s evaluation also reflected communications received from time to time from, and a review of the broadly disseminated policy positions of, a number of our significant institutional investors.

Pursuant to our revised Corporate Governance Guidelines, to be elected in an uncontested election, director nominees who receive a majority of the votes cast (meaning the number of shares voted “FOR” a director nominee exceeds the number of votes cast “AGAINST” that nominee) will be elected as directors at the Annual Meeting. However, in the event that a nominee for election fails to receive a majority of votes cast at an election which is uncontested, such nominee will tender, promptly following certification of the election results, an

irrevocable resignation that will be effective upon the Board’s acceptance of such resignation. Upon the submission of such resignation, the Compensation Committee will promptly consider the resignation and make a recommendation to the Board, and the Board will consider any relevant factors in deciding whether to accept or reject the director’s resignation. Subject to applicable legal and regulatory requirements, the Board will act on the recommendation of the Compensation Committee and will publicly disclose the Board’s decision regarding the tendered resignation(s) no later than ninety (90) days following certification of the election results. Our majority voting policy is set forth in our Corporate Governance Guidelines, which can found on our website located at www.renre.com under “Investor Information—Corporate Governance.”

 

								COMPENSATION DISCUSSION AND ANALYSIS—CONTINUED

Our compensation design framework, outlined below, holds our Named Executive Officers and our other executive officers accountable for annual and long-term performance, manages compensation-related risk-taking within the parameters of our

philosophy, and supports the guiding principles that drive our overall pay philosophy. The table below describes the components of our pay program and how each supports that philosophy.

 

Although the Compensation Committee has determined not to mandate a specific allocation among the components of pay listed above, it is the Compensation Committee’s policy that a majority of total direct compensation paid to our Named Executive Officers be at-risk, with a substantial portion subject to the achievement of performance objectives as well as service-based criteria. Our pay-for-performance approach to compensation provides that a large

percentage of a Named Executive Officer’s total compensation should be at-risk in the form of incentive awards, the majority of which are structured to be long-term in nature with both performance vesting and time service conditions to further align the interests of the Named Executive Officers with those of our shareholders and the long-term success of our organization.

 

The pay mixes between fixed (base salary) and at-risk (restricted shares, performance shares and performance-based annual incentive bonus) target pay of our Chief Executive Officer and our other Named

Executive Officers for 2014, which illustrate the Company’s emphasis on long-term and at-risk compensation, are reflected in the charts below:

 

We believe that our success depends in large part upon our ability to attract and retain our senior executive officers. Our culture, which we believe to be distinctive and inherent to our strategy, is team-focused and designed to reward team performance. We seek to recruit and retain senior executives who possess a number of specific personal and professional qualities that will contribute to the ongoing success of the Company. We believe that our requirement that executives possess such criteria limits our available talent pool and makes it critical that we retain our key talent. We are subject to competition to recruit our senior executives and other key employees, exacerbated by the industry-leading returns that we have generated since our inception, our reputation for innovation, and the strong relationships we seek to foster with clients, brokers, capital providers, regulators, and rating agencies. This competition for talent has increased during recent years as a result of, among other things: non-traditional entrants into our industry, such as investment banks, hedge funds and pension funds, seeking to recruit seasoned talent to assist in developing new business lines; new reinsurance companies backed or funded by such or other entities, some of which explicitly seek to replicate our business model; the proliferation of third-party capital utilization by insurance and reinsurance companies and non-traditional competitors; and the growth in demand for catastrophic and specialty risk coverage in emerging markets.

In order to ensure that our compensation programs reflect competitive practices and dynamics in our industry, as well as to maintain competitive compensation program designs and levels, the Compensation Committee utilizes market data and the compensation ranges of our peer group. For Named Executive Officers, the Compensation Committee focuses on peer analyses provided by its independent compensation consultant, Mercer, and may also take

into account information from its advisors and management regarding pay practices of competitors who are not subject to the proxy statement filing requirements of the U.S. federal securities laws and, thus, not required to publicly disclose their executive compensation arrangements. In addition, we compare our performance to a peer group of companies approved by the Compensation Committee for purposes of determining compensation levels under both our performance-based annual incentive bonus and long-term equity incentive programs. For individual Named Executive Officers, we do not target any specific peer group percentile levels. In 2014, target average total direct compensation levels approximated the median. Named Executive Officers’ actual compensation may be adjusted based on factors including personal and corporate performance, differences in the role of any Named Executive Officer versus executives in the peer group, variations in reported compensation driven by geographic location and related market practices, and retention needs.

The following 12 companies comprised our 2014 peer group:

 

Allied World Assurance Company Holdings, AG		Montpelier Re Holdings Ltd.
Arch Capital Group Ltd.		PartnerRe Ltd.
Aspen Insurance Holdings Limited		Platinum Underwriters Holdings, Ltd.
Axis Capital Holdings Limited		Validus Holdings, Ltd.
Endurance Specialty Holdings Ltd.		White Mountains Insurance Group, Ltd.
Everest Re Group, Ltd.		XL Group plc

 

								COMPENSATION DISCUSSION AND ANALYSIS—CONTINUED

Our Compensation Committee regularly reviews and assesses the membership of the peer group to ensure continued applicability. The peer group is developed by the Company and the Compensation Committee’s independent compensation consultant and reviewed and selected by the Compensation Committee. It reflects those companies with businesses that are relatively similar to ours and that are in relatively similar jurisdictions to ours and from which we seek to attract qualified executives.

In selecting peers, the Compensation Committee seeks to maintain consistency from year to year, to the extent appropriate. It also considers company size—both revenue and market capitalization. While the Company’s revenue may fall below the peer group median in some years, our market capitalization is regularly above median. Several companies included in our peer group have revenue somewhat higher than the range typically used by proxy advisors to determine peer companies. We believe it is appropriate to include these companies, regardless of revenue, because these selected peer companies are our primary competitors for executive talent. We review peer company compensation levels relative to size to determine whether inclusion of these somewhat larger companies affects our analysis of market pay levels, and have concluded that they do not have a significant impact on our competitive pay positioning.

We also compete for talent with non-traditional companies, including hedge funds and investment firms, both inside and outside of our industry and including direct and indirect competitors such as Aeolus Re Ltd., Greenlight Reinsurance Ltd., Hamilton Re Ltd., Swan Re Ltd., and Nephila Capital Ltd., as well as larger firms such as ACE

Ltd., American International Group, Inc., the reinsurance operations of Berkshire Hathaway Inc., Hannover Rückversicherung AG, Ironshore Inc., Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (Munich Re) and Swiss Re Ltd. Although we do not include these firms in our peer group, we try to monitor their compensation practices where information is available and to be cognizant of competitive pressures from these market entrants in our program design and determinations.

Our 2014 peer group was unchanged from 2013. Through 2014 our peer group had remained substantially the same over a period of years, facilitating a fairly consistent measure for comparing executive compensation. In 2015, the peer group will no longer include Platinum, which we acquired on March 2, 2015, and will include Third Point Reinsurance Ltd. (“Third Point”). Like us, Third Point is a Bermuda-domiciled and -headquartered company focused on reinsurance coverages, including many of the lines in which we specialize. Third Point went public in the second half of 2013 and 2014 was accordingly its first full year of operations as a public company. For 2015, management and Mercer determined that Third Point’s operations, executive team and compensation practices have attained sufficient comparability with ours such that inclusion within our peer group is appropriate. Since January 1, 2015, strategic combinations involving members of our peer group including Axis Capital Holdings Limited, Endurance Specialty Holdings Ltd., Montpelier Holdings Ltd., PartnerRe Ltd. and XL Group plc have all been announced. Our Compensation Committee continues to actively monitor developments, including those described above, and regularly considers potentially appropriate adjustments to our peer group.

 

2014 Compensation Determinations

Our Compensation Committee reviews the performance of each of our Named Executive Officers annually to determine appropriate compensation actions and determinations. As described above, the Company’s goal for its executive compensation program is to support and reinforce our risk management while attracting, motivating and retaining a talented, entrepreneurial and creative team of executives who will provide leadership for the Company in dynamic and competitive markets and can support our strategy to operate an integrated system to match well-structured risk and efficient capital. We seek to accomplish this goal in a way that rewards performance and is aligned with our shareholders’ long-term interests.

Strategic Accomplishments; Acquisition of Platinum

In 2014 RenaissanceRe, led by the Named Executive Officers, performed well in respect of our long-term strategic objectives and the execution of our 2014 tactical plan. In particular, 2014 was marked by a fulsome process to pursue alternatives to accelerate our organic growth strategy through the evaluation and potential execution of strategic transactions. This process culminated in our announcement, in November 2014, of our agreement to acquire Platinum.

We believe, and our Board’s assessment of our 2014 execution reflected, that our planning and efforts relating to strategic, analytical,

due diligence, structuring, talent and client retention, negotiation, financial and integration efforts associated with our acquisition of Platinum were strong and are likely to foster long-term strategic and financial value for shareholders of RenaissanceRe. Among other things, we:

 

•

reaffirmed our long-term strategy and clearly identified how a selectively identified and appropriately executed strategic transaction could further it;

 

•

screened a wide range of potential acquisition partners with a range of attributes and characteristics;

 

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acted proactively in respect of Platinum, which included obtaining an exclusive period to conduct due diligence;

 

•

conducted extensive due diligence, with each Named Executive Officer and each executive officer responsible for managing work streams as well as analytical and milestone deliverables;

 

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maintained pricing and negotiation discipline, resulting in a process which culminated in a favorable bid acceptable to Platinum and its board of directors, whose fairness was assessed favorably by the financial advisers to both parties;

 

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designed and executed communication plans for a broad range of stakeholders, including shareholders, clients, brokers, rating agencies, regulators, and employees of both companies;

 

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designed and executed a closing plan which obtained all required U.S. federal approvals by December 31, 2014, and all other required governmental approvals by February 27, 2015; and

 

•

successfully financed the transaction on a basis that we judged to be cost-effective while maintaining high levels of capital adequacy and liquidity.

We believe our acquisition of Platinum will provide meaningful long-term strategic benefits and increases the likelihood we will produce superior financial long-term returns to shareholders. Among other things, we believe the acquisition of Platinum:

 

•

is complementary to and enhances our principal competitive advantages—superior customer relationships, superior risk selection and superior capital management—by broadening our relationships and facilitating the application of these core capabilities to a broader client base, thereby increasing our access to desirable risk and offering opportunities for efficient capital management;

 

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will, in particular, accelerate the growth of our U.S. platform by expanding our client base and enhancing our U.S. market presence in casualty and specialty reinsurance lines of business;

 

•

will allow us to increase our market presence, offer a broader array of products and serve our clients with a larger capital base that reflects our financial strength and capital flexibility;

•

will create a company with greater size and economies of scale, which should better enable us to respond to competitive pressures and provide an increased opportunity to compete profitably;

 

•

will be attractive to the Company from a financial perspective, including by being accretive to book value per share and earnings per share; and

 

•

will foster greater financial strength and flexibility post-closing.

On November 24, 2014, we announced our intent to acquire Platinum and summarized the terms and conditions and form of transaction consideration, which included issuing approximately 19% of our shares then outstanding. As reflected in the table below, we believe that our total shareholder return as measured at year-end was substantially impacted by the expected issuance of these shares. In light of that expected issuance of approximately 7.5 million shares at closing, management evaluated our share price performance during the period from announcement through the closing of the Platinum acquisition, which we believe reflected strong shareholder and stakeholder support for the strategic merits and long-term potential financial benefits of the Platinum acquisition. Our total shareholder returns were 21.3% in 2013 and 10.8% in 2012. (For calculation of total shareholder return for purposes of our Performance Share Plan, see “—2014 Performance Share Results” above.)