Board Structure and Processes

Our Commitment to Corporate Governance

Our Board and management have a strong commitment to effective corporate governance. We believe we have a comprehensive corporate governance framework which takes into account applicable regulatory requirements and best practices. The key components of this framework are set forth in the following documents:

●	our Bye-laws;
●	our Corporate Governance Guidelines;
●	our Code of Ethics;
●	our Audit Committee Charter;
●	our Governance and Human Capital Committee Charter; and
●	our Investment and Risk Management Committee Charter.

The Board regularly reviews corporate governance developments and modifies our Corporate Governance Guidelines, Code of Ethics, committee charters and key Board practices when it believes modifications are warranted. A copy of each of these documents is published on our website at www.renre.com under “Investors—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.

Code of Ethics

Our Code of Ethics applies to all of our directors and employees, including our principal executive officer, principal financial officer, and principal accounting officer, and all of our employees performing financial or accounting functions. Our Code of Ethics is available without charge on our website, www.renre.com, under “Investors—Corporate Governance.” We will also provide a printed copy of our Code of Ethics to any shareholder upon request. We intend to disclose any amendments to our Code of Ethics by posting them on our website. Any waivers of our Code of Ethics applicable to our directors, principal executive officer, principal financial officer, principal accounting officer, controller and other executive officers who perform similar functions will be disclosed by filing a Current Report on Form 8-K with the SEC.

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Board Leadership Structure

Pursuant to our Corporate Governance Guidelines, the Chair of the Board may be an officer/director or an outside director and may or may not be the Chief Executive Officer, at the option of the Board. The Board believes it should be free to make these determinations depending on what it believes is best for the Company and our shareholders in light of all the circumstances. At this time, the Board has determined that it is appropriate to separate the roles of Chair and Chief Executive Officer and to have a Non-Executive Chair of the Board. The Board believes that having an independent director serve as Non-Executive Chair of the Board is in the best interests of the Company and our shareholders at this time and 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.

Role of the Non-Executive Chair of the Board

Currently, Mr. Gibbons serves as the Non-Executive Chair of the Board. In addition to chairing each meeting of the Board, the Non-Executive Chair of the Board has significant responsibilities, including: (i) having the authority to call meetings of the Board; (ii) setting the agendas for Board meetings and executive sessions to ensure that 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 that arise in the executive sessions, as appropriate; (v) facilitating discussion among the independent directors on key issues and concerns that arise outside of Board meetings and serving as a non-exclusive conduit to communicate views, concerns and issues of the independent directors to the Chief Executive Officer; (vi) interviewing candidates for directorship; (vii) facilitating the assessment of the Board’s effectiveness, at the direction of the Governance and Human Capital Committee; and (viii) together or in coordination with the Chief Executive Officer, representing the organization in external interactions with shareholders, employees and other stakeholders.

The Non-Executive Chair of the Board typically does not serve as a member of the Board’s three principal standing committees (the Audit Committee, the Governance and Human Capital Committee, and the Investment and Risk Management Committee), but rather attends such meetings and other functions of the committees on an ex officio basis as warranted by the facts and circumstances. Given the challenges presented by the COVID-19 pandemic, Mr. Gibbons has been serving as an interim member of the Governance and Human Capital Committee, as further discussed in “—Meetings and Attendance” below. The Non-Executive Chair of the Board serves as a member of the Transaction Committee and the Offerings Committee, which meet on an as-needed basis.

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Director Engagement

Meetings and Attendance

Our Bye-laws and operating guidelines prohibit directors from participating in meetings of the Board or its committees while present in the United States or its territories, whether in person, via teleconference or otherwise. Due to these prohibitions, as well as travel restrictions and safety concerns related to the COVID-19 pandemic, some of our continuing directors who are based in the United States were unable to attend certain Board and committee meetings held in Bermuda in 2021. Three of our directors (two of whom are independent) are based outside of the United States: Mr. Gibbons, our Non-Executive Chair of the Board, Mr. O’Donnell, our Chief Executive Officer, and Mr. Gray.

Despite these unique circumstances, our independent directors continued to discharge their oversight and fiduciary duties in the ordinary course, including by holding regular, robust virtual informational sessions designed to cover the same information normally covered at in-person Board and committee meetings, supplemented by additional informational calls and reports. When action requiring a formal Board or committee meeting with a vote of directors was necessary, we convened formal meetings of the Board or the applicable committee. At these meetings only those directors not based in the United States or who were able to travel outside of the United States participated in order to comply with our Bye-laws and operating guidelines. Despite these unprecedented challenges, we believe we maintained good governance practices while complying with Bermuda law and SEC and NYSE regulations, as well as with our Bye-laws, corporate governance documents and operating guidelines.

Our Board held the following informational sessions and formal meetings of the Board and committees during 2021:

	Board		Audit Committee		Corporate Governance and Human Capital Management Committee		Investment and Risk Management Committee		Transaction Committee		Offerings Committee
Meetings	4		5		4		1		—		1
Virtual Informational Sessions	5		7		3		4		—		—

Messrs. Gibbons, Gray, Klehm and O’Donnell, Mses. Sanders and Trudell, and Dr. Rahmani each attended 75% or more of the meetings of the Board and committees of the Board on which they served during 2021 (during the periods that they served). Due to the restrictions noted above, Messrs. Bushnell, Santomero and Hennes, were not able to attend certain Board and committee meetings, and, as a result, did not attend 75% or more of the formal meetings of the Board and committees of the Board on which they served during 2021 (during the periods that they served). However, each director attended all of the informational sessions of the Board and respective committees, and attended all of the formal meetings of the Board and committees of the Board on which he or she served during 2021 (during the periods that they served) that they were able to attend safely. For more information on our committees, please see below.

Generally, it is the practice of our Board to attend our annual general meetings of shareholders. However, due to the safety concerns and travel restrictions discussed above, none of our non-executive directors were able to attend our 2021 Annual General Meeting, which was held on May 5, 2021 in Bermuda.

As safety concerns are reduced and travel restrictions enacted in response to the COVID-19 pandemic are eased or lifted, we expect that our directors will attend meetings of the Board and of the committees of the Board on which he or she serves, and the annual general meeting of shareholders, in line with historical practices.

Executive Sessions

Separate executive sessions of our non-management directors are held in conjunction with each regular quarterly Board meeting. The Non-Executive Chair of the Board presides at these executive sessions of the Board. The standing committees of the Board also conduct regular executive sessions, which are chaired by the respective chairs of the committees. In 2021, executive sessions of our non-management directors were also held in connection with the virtual informational sessions of the Board and standing committees.

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Shareholder Engagement

We maintain an active, management-led dialogue with our shareholders and other stakeholders. Their views on our Company and its performance are important to our Board. We provide regular updates to our Board on our shareholder engagement efforts, and, in certain instances, members of our Board engage directly with shareholders.

 

In 2021, based on investor feedback, we took steps to streamline and enhance our shareholder disclosures, including a new format for our quarterly Earnings Release and changes to the Financial Supplement

How We Share and Respond to Feedback ●  Provide summary of investor outreach activity at each quarterly Board meeting, and a summary of direct shareholder communications at each quarterly Governance and Human Capital Committee meeting ●  Extensive outreach and discussion with our shareholders in 2020 and 2021 informed changes to our executive compensation program, resulting in recent high say-on-pay support ●  Shareholder, and broader stakeholder, input has informed our ESG strategy, program and reporting

Communicating with the Board

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

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 our 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 by the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures for receiving, retaining and treating complaints regarding accounting, internal accounting controls or auditing matters, as well as for confidential submission by Company employees of concerns regarding questionable accounting or auditing matters, among other things. 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.

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Committees of the Board

The Board maintains three principal standing committees: the Audit Committee, the Governance and Human Capital Committee, and the Investment and Risk Management Committee. The primary responsibilities of these committees are summarized below and more fully described in their charters. These committees may delegate any of their responsibilities to a subcommittee composed of one or more members of the committee. In addition, the Board maintains two standing, special purpose committees: the Transaction Committee and the Offerings Committee. The responsibilities of these committees are summarized below.

The Board has determined that each member of the Audit Committee and the Governance and Human Capital Committee meets the applicable 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, in each case, given his or her experience as set forth in his or her biography above.

Audit Committee

Members David C. Bushnell (Chair) Valerie Rahmani Carol P. Sanders

The Audit Committee’s key responsibilities include oversight of: ●   Our accounting and financial reporting process, as well as the integrity, quality and accuracy of our financial statements, including internal controls; ●   Our operational risk assessment and risk management process; ●   Our compliance with legal and regulatory requirements, including review of our Code of Ethics and internal compliance program; ●   Our information and cybersecurity programs; ●   Our use of non-GAAP measures and metrics, including environmental, social and governance metrics; ●   Our independent auditor’s appointment, compensation, qualifications, independence and performance; and ●   The performance of our internal audit function.

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Corporate Governance and Human Capital Management Committee

Current Members Henry Klehm III (Chair) Jean D. Hamilton Cynthia Trudell James L. Gibbons (interim) Post-Annual General Meeting Members Henry Klehm III (Chair) Cynthia Trudell Shyam Gidumal (pending election) James L. Gibbons (interim)

The Corporate Governance and Human Capital Management Committee’s key responsibilities include: Compensation-Related ●   Determining compensation of our Chief Executive Officer and directors, and reviewing and approving recommendations of other executive officers’ compensation; ●   Overseeing incentive and stock-based compensation plans, including granting and setting the terms of awards; ●   Evaluating performance of executive officers; ●   Reviewing and recommending policies, practices and procedures concerning compensation strategy and other human resources-related matters, including DEI and employee development; ●   Reviewing and advising on executive succession planning; and ●   Reviewing, analyzing and overseeing the mitigation of risks associated with our compensation programs. Corporate Governance-Related ●   Overseeing and supervising the director nomination process, including identifying and evaluating prospective Board candidates; ●   Reviewing and monitoring the performance and composition of the Board and its committees; ●   Overseeing the new director orientation process and director continuing education policies; ●   Developing and evaluating our corporate governance practices and procedures, including compliance with legal and regulatory requirements; ●   Overseeing and reviewing related-party transactions (as defined in SEC Regulation S-K, Item 404) for potential conflicts of interest; ●   Overseeing, monitoring and reviewing our policies, programs and practices related to ESG matters, including sustainability, health and safety and DEI matters; and ●   Reviewing any properly submitted shareholder proposals.

Governance and Human Capital Committee Advisors

The Governance and Human Capital Committee has the authority to select, retain and dismiss compensation consultants, financial and other advisors and independent legal counsel as it deems necessary in accordance with the procedures set forth in the charter and considering independence and potential conflicts of interest. For a discussion regarding our independent compensation consultant, please see “Executive Compensation—Compensation Discussion and Analysis—Compensation Determination Process—Role of Compensation Consultants” below.

In addition, our Governance and Human Capital Committee 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 in light of the market cycles and earnings volatility that characterize our industry. For a discussion regarding our compensation policies and practices as they relate to our risk management see “Executive Compensation—Compensation Discussion and Analysis—Compensation Governance—Compensation and Risk Management” below.

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Compensation Committee Interlocks and Insider Participation

Mr. Gibbons, Mr. Gray, Ms. Hamilton, Mr. Klehm and Ms. Trudell served on the Governance and Human Capital Committee during the 2021 fiscal year. No member of the Governance and Human Capital Committee during the 2021 fiscal year was an officer or employee of the Company during the 2021 fiscal year or was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a transaction with a related person under Item 404 of Regulation S-K (“Regulation S-K”) of the U.S. Securities Act of 1933, as amended (the “Securities Act”). No executive officer of the Company served on any board of directors or compensation committee of any other company for which any of our directors served as an executive officer at any time during the 2021 fiscal year.

Investment and Risk Management Committee

Members Anthony M. Santomero (Chair) Brian G. J. Gray Duncan P. Hennes

The Investment and Risk Management Committee’s key responsibilities include: ●   Overseeing our investment strategies, performance and risk management; ●   Reviewing management procedures to develop investment strategies and risk limits and monitoring adherence to those guidelines; ●   Reviewing and monitoring investment manager and investment portfolio performance; ●   Assisting the Board with assessing our financial, non-operational risk management, in coordination with the Audit Committee; and ●   Overseeing the processes used to manage key financial risks, including risks related to liquidity, solvency margins, capital management and leverage, third-party credit risk, foreign exchange exposure, financial risk of climate change, and insurance risks.

Special Purpose Committees

Transaction Committee

The Transaction Committee presently consists of Messrs. Gibbons, Gray and O’Donnell (Chair) and Ms. Hamilton. 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.

Offerings Committee

The Offerings Committee presently consists of Messrs. Gibbons, Gray and O’Donnell (Chair) and Ms. Hamilton. The Offerings Committee has the authority to consider and approve, on behalf of the full Board, transactions pursuant to our shelf registration program, including setting the terms, amount and price of any such offering.

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Certain Relationships and Related Transactions

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. Each transaction covered by this policy is reviewed to determine whether the transaction is in the best interests of the Company and our shareholders. Pursuant to the policy, our Governance and Human Capital Committee also conducts a reasonable prior review and oversight of all related-party transactions required to be disclosed pursuant to Item 404 of Regulation S-K for potential conflicts of interest, including to determine whether any such transaction is inconsistent with the 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.

Relationship with BlackRock, Inc.

BlackRock, Inc. (“BlackRock”) reported a beneficial ownership interest of more than 5% of our common shares as of December 31, 2021. Affiliates of BlackRock provide investment management, risk analytics and investment accounting services to us. During 2021, we incurred $5.9 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.

Relationship with Coralisle Group Ltd.

Mr. Gibbons is the Treasurer of EGL, the parent company of Coralisle. We entered into reinsurance contracts with Coralisle pursuant to which we received premiums of approximately $0.3 million from Coralisle in 2021, and paid claims to Coralisle of approximately $nil in 2021. We renewed certain of these reinsurance contracts in December 2021 and we expect to receive premiums of approximately $0.3 million from Coralisle in 2022 as a result of those renewals. To date in 2022, we have paid approximately $3,300 of claims to Coralisle. In his position at EGL, Mr. Gibbons is not directly involved in the management of Coralisle, and all of these transactions with Coralisle were entered into in the ordinary course of business on terms available to similarly situated parties.

Relationship with State Farm Mutual Automobile Insurance Company

State Farm Mutual Automobile Insurance Company (“State Farm”) reported a beneficial ownership interest of more than 5% of our common shares as of December 31, 2021. From time to time we have entered into, and expect in the future to enter into, reinsurance transactions with State Farm in the ordinary course of business on terms available to similarly situated parties. For reference, in 2021, we recorded reinsurance premiums of $22.9 million from State Farm and its subsidiaries and our insurance subsidiaries paid claims on such reinsurance to State Farm and its subsidiaries of $14.2 million. In 2022, we expect to record about $25 million in reinsurance premiums from State Farm. State Farm is also an investor in RenaissanceRe-managed vehicles Top Layer Reinsurance Ltd. and DaVinciRe Holdings Ltd.

Use of Company Aircraft

Pursuant to their employment agreements, our named executive officers and certain other officers are permitted business use and a limited amount of Company-funded personal use (with a value up to the aggregate incremental cost to us of $85,000) of our fractional interest program with NetJets Aviation Inc. (“NetJets”). On occasion, we may allow additional hours of Company-funded personal use of our aircraft interest on a case-by-case basis. In 2020 and 2021, for safety reasons, the Governance and Human Capital Committee adopted a policy allowing our named executive officers reasonable additional Company-funded personal use of our NetJets program for the duration of the COVID-19 pandemic. The aggregate incremental cost to us of any personal use is included in the Summary Compensation Table below. Our named executive officers pay imputed income tax on the value of these benefits and are not entitled to tax gross-ups on any perquisites. In addition, Mr. O’Donnell; Ross Curtis, our Chief Underwriting Officer; and Robert Qutub, our Chief Financial Officer have each entered into an aircraft use agreement with us which allows them to use our fractional interest program with NetJets for additional travel beyond that which is provided for in their employment arrangements, provided that they pay for such use in advance of any trip at the fully loaded variable rate (which rate represents our aggregate incremental cost of such use within the meaning of Regulation

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S-K and the rules and other guidance of the Commission). They must maintain a deposit with us from which we are authorized to withdraw funds in order to satisfy any amounts owed under the agreement. The form of aircraft use agreement was approved by the Governance and Human Capital Committee. None of our named executive officers had any additional personal use of the aircraft interest for travel during 2021 for which they were required to reimburse us. For additional information regarding our named executive officers’ and certain other officers’ use of our corporate aircraft, see “Executive Compensation—Compensation Discussion and Analysis—Principal Components of Our Executive Compensation Program—Additional Compensation Practices—Other Benefits and Perquisites” below.

Housing Arrangements with Executive Officers

As discussed under “Executive Compensation—Compensation Discussion and Analysis—Principal Components of Our Executive Compensation Program—Additional Compensation Practices—Other Benefits and Perquisites” below, we provide housing allowances to certain of our named executive officers, as well as to other executive officers and employees. The amount of the housing allowance is included in the Summary Compensation Table for each named executive officer (see “Executive Compensation—Executive Compensation Tables—All Other Compensation Table” below). Our executive officers pay imputed income tax on the value of these benefits and are not entitled to tax gross-ups on any perquisites. From time to time, our subsidiaries enter into long-term leases for properties in Bermuda, which we sublease to certain officers, including certain of our named executive officers. In 2021, one of our subsidiaries acquired a property in Bermuda previously subject to a long-term lease and subsequently leased this property to Mr. O’Donnell for his Bermuda residence at market rates, consistent with his historical housing benefits. Except for this arrangement, we are not currently the lessor or lessee on the residence of any of our named executive officers.

Charitable Donations

RenaissanceRe provides support to various charitable organizations in Bermuda and other communities in which we operate, 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 employees to appropriately registered charities up to certain maximum amounts and make direct charitable contributions. Certain of our executive officers and directors, director nominees, and spouses of certain of these persons, serve and have served as directors, officers or trustees of some of these organizations. We did not contribute more than $120,000 to any one charity in 2021 for which any of our executive officers and directors, director nominees and spouses of certain of these persons served as a director, officer or trustee.

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The Board’s Role and Key Responsibilities

Strategic Oversight

Our Board believes that long-range strategic issues should be discussed and reviewed at regular Board meetings. Our Corporate Governance Guidelines provide that the Board review and critique our strategic plan at least annually, with quarterly reviews of performance in comparison to the financial plan. Senior management and the full Board engage in long-term strategy discussions at least annually, and the Board and committees regularly receive updates from business function leaders on our performance against our tactical plans.

Our strategic plan drives the Board’s goal setting in many areas. For example, the goals of each Board committee are tied to the achievement of the strategic plan. The Governance and Human Capital Committee determines and measures compensation against the achievement of strategic goals and objectives.

Risk Oversight

We consider enterprise-wide risk management to be a key strategic objective and believe that our enterprise-wide risk management processes and practices help to identify potential events that may affect us; quantify, evaluate and manage the risks to which we are exposed; and provide reasonable assurance regarding the achievement of corporate objectives. For each identified and measured risk, we have identified (i) a day-to-day owner and management response, (ii) a process for monitoring and reporting on the risk, (iii) a senior management committee, and (iv) Board and/or committee oversight. We believe that this risk management process, along with our culture and focus on enterprise-wide risk management, ensures effective risk oversight by our Board.

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Risk Management Process

 

 

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Board Oversight of ESG

We have an integrated approach to ESG governance, with cross-collaboration among our Board committees and management. Our Board and its committees are actively engaged in the oversight of environmental, social and governance initiatives and our management provides regular reports on progress and developments.

The Governance and Human Capital Committee, pursuant to its charter, is charged with overseeing, monitoring and reviewing our ESG policies, programs and practices. This oversight includes sustainability, health and safety, DEI and related matters. Our dedicated ESG team reports to the Governance and Human Capital Committee quarterly, and to the full Board at least annually, on our ESG initiatives and progress on implementation of our ESG strategy. In addition, the Governance and Human Capital Committee is actively engaged in the oversight of our employees, work environment, DEI initiatives and compensation practices, and receives regular updates from management on progress and developments, and our executive management team and Governance and Human Capital Committee receive regular reports on progress against our annual human resources tactical plans.

The consideration of the impacts of climate change is integral to our enterprise-wide risk management process. Certain aspects of ESG are monitored by the full Board or other committees. For example, the IRMC is charged with overseeing key financial risks, such as the financial risk of climate change. We have been progressively integrating the consideration of the financial risk of climate change into our governance frameworks, risk management processes, and business strategies over the past several years.

 

 

Cross-Committee Risk and Strategy Oversight Collaboration

At their quarterly meetings, each committee reviews and discusses its current and future agendas in the context of our strategic plan and any new Company, industry or market information and identifies matters that should be discussed with other committees or the full Board. In addition, each standing committee reports to the full Board at each quarterly Board meeting. Our Audit, Governance and Human Capital, and Investment and Risk Management Committees coordinate their oversight of our financial and operating risks and routinely collaborate to address specific matters requiring coordination and cross-committee oversight. We believe that these collaborative efforts sustain high levels of enterprise-wide risk management and facilitate sound corporate governance.

Succession Planning

We believe that succession planning is key to ensuring effective risk oversight and execution of our strategy and that our succession planning programs ensure that the Board has appropriate oversight. On behalf of the Board, our Governance and Human Capital Committee collaborates with our Chief Executive Officer in the development and monitoring of our programs for emergency and long-term executive succession, generally on a quarterly basis. To foster diverse talent, we apply a DEI lens to the selection process for our leadership and management development programs. Individuals who we believe have potential for senior executive positions are identified to the Governance and Human Capital Committee, in part by utilizing the results of the Company’s internal review and feedback processes. The careers of these individuals 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 Governance and Human Capital Committee regularly briefs the full Board on these matters.

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Compensation Determination Process

In order to ensure that we maintain an executive compensation program that aligns the interests of our executives with the long-term interests of our shareholders, our Governance and Human Capital Committee leads a rigorous and continuous process evaluating our executive compensation program throughout the year.

Role of Governance and Human Capital Committee

Our Governance and Human Capital Committee establishes and oversees our executive compensation philosophy and has primary responsibility for overseeing executive compensation policies and programs. The Governance and Human Capital Committee is responsible for determining all aspects of our Chief Executive Officer’s compensation and for approving compensation for all other named executive officers, after reviewing the Chief Executive Officer’s recommendations with respect to those executives. The Governance and Human Capital Committee’s responsibilities with respect to compensation are set forth in its charter, and are described in more detail above under “Corporate Governance—Board Structure and Processes—Committees of the Board—Corporate Governance and Human Capital Management Committee.”

The Governance and Human Capital Committee meets at least quarterly and meetings may include other members of the Board, members of management and third-party advisors. A portion of each meeting is spent in executive session in which no members of management are present. Only members of the Governance and Human Capital Committee may vote on committee matters.

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Role of Compensation Consultants

The Governance and Human Capital Committee has retained Mercer as its independent compensation consultant to provide market intelligence on compensation trends, views and recommendations with respect to our compensation programs, and analyses and recommendations with respect to the amount and form of senior executive and director compensation.

During 2021, the Governance and Human Capital Committee renewed its engagement of Mercer, a wholly owned subsidiary of Marsh & McLennan Companies, Inc. (“Marsh”). Other subsidiaries of Marsh acted as a broker or agent with respect to 30.0% of our gross premiums written and 24.2% of ceded written premiums in 2021. No member of management or the Governance and Human Capital Committee has any contractual or pecuniary arrangement with Mercer. During 2021, Mercer performed compensation advisory and other services on behalf of the Governance and Human Capital Committee and the Company. We incurred fees in 2021 in respect of these engagements totaling approximately $476,000. The Governance and Human Capital Committee approved fees for all compensation or related advisory services.

The Governance and Human Capital Committee has assessed the independence of Mercer pursuant to the SEC rules and the NYSE listing standards and has concluded that the engagement did not raise any conflicts of interest. In reaching this conclusion, the Governance and Human Capital Committee considered the factors relevant to Mercer’s independence from management, including the factors set forth in the NYSE listing standards.

Role of Management

Our executive officers and key members of our human resources function help support the Governance and Human Capital Committee’s executive compensation process, and the Chief Executive Officer regularly attends and participates in portions of the Governance and Human Capital Committee’s meetings. He provides the Governance and Human Capital Committee with strategic context regarding our products, underwriting and operational risks, strategy and performance, and shareholder value-creation over time. Our Chief Executive Officer also advises the Governance and Human Capital 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 regarding the compensation of executive officers who report to him, including our named executive officers, and reports to the Governance and Human Capital Committee regarding his evaluation of their performance. In addition, our executive officers collaborate on the development of our strategic plan, which the Governance and Human Capital Committee uses as the basis for setting the goals and targets for our performance-based compensation.

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Peer Group

The Market for Talent

Our ability to attract and retain talented executive officers is critical to achieving our strategic goals. We believe that the pool of candidates that meet our criteria is small and that competition for talent continues to increase.

While the Governance and Human Capital Committee does not target specific compensation component levels or total compensation of the named executive officers against market data, it periodically assesses the competitiveness of the compensation levels of our named executive officers and considers the overall competitive market in which we operate. With the assistance of management and its independent compensation consultant, Mercer, the Governance and Human Capital Committee uses market data of a group of peer companies to conduct this assessment.

Peer Selection

The Governance and Human Capital Committee dedicates significant time and effort to developing a relevant compensation peer group for the Company and works with Mercer and management to regularly review and assess the peer group to ensure continued applicability. Our compensation peer group is composed of companies with significant reinsurance operations and risk portfolios that are comparable to ours, taking into account the criteria described below.

In selecting peers, the Governance and Human Capital Committee considers the following key criteria:

Key Criteria when Identifying Peer Group Companies

Companies that have a similar business and whose results are driven by a similar risk portfolio	The companies in our compensation peer group should be companies with which we compete for business.  The companies are in risk-bearing businesses with significant reinsurance operations and risk portfolios, with similar financial characteristics.
Company size, by revenue and market capitalization	We consider both the revenue and market capitalization of prospective peer companies.  Our market presence and financial position are broadly comparable with our compensation peer group as a whole and with the individual companies that comprise it.  We include some companies with higher revenues because they are our primary competitors for both business and executive talent and the number of similarly sized competitors continues to shrink due to industry consolidation.  To ensure competitive pay analysis is not unduly influenced by the larger companies, we review the competitive pay information for all companies individually, rather than relying on average or other summary statistics that may be distorted by outliers.
Companies we compete with for qualified executive talent	The companies in our compensation peer group should be those companies with which we compete for executive talent and from which we seek to attract qualified executives.  The companies should have similar professional skill and talent needs.  We consider companies who select us for inclusion in their peer group.
Companies located in similar jurisdictions	Companies in similar jurisdictions to us are in competitive pay markets with similar pay practices.
Consistency from year-to-year	We seek to maintain consistency in the peer group from year-to-year, to the extent appropriate to ensure long-term alignment of goal measurement.

 

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In February 2021, the Governance and Human Capital Committee assessed and determined the composition of our compensation peer group for 2021. Apart from changes in our peer group due to industry consolidation, our peer group for 2021 remained consistent with our peer group from 2020. The following nine companies comprised our compensation peer group for 2021:

●  Alleghany Corporation ●  Arch Capital Group Ltd. ●  Argo Group International Holdings, Ltd.

●  Axis Capital Holdings Limited ●  Everest Re Group, Ltd. ●  Greenlight Capital Re, Ltd.

●  Markel Corporation ●  Third Point Reinsurance Ltd.(1) ●  W. R. Berkley Corporation

Overlap with Selected Peers All the companies in our compensation peer group that disclosed a peer group for compensation purposes in their 2021 proxy statements also listed us as a peer.

(1)	On February 26, 2021, Third Point Reinsurance Ltd. and Sirius International Insurance Group, Ltd. completed their previously announced merger and launched SiriusPoint Ltd. Third Point Reinsurance Ltd. was included in our peer group for compensation decisions made prior to the merger, and following the merger, SiriusPoint Ltd. continued to be included in our compensation peer group.

Due to industry consolidation, the number of standalone publicly traded companies that meet the above criteria has decreased over the past several years. Nevertheless, we believe this is still a carefully considered peer group comprised of companies that we compete with for business and executive talent. We also compete for talent with non-traditional entrants into our industry and other companies in a variety of different sectors. Although we do not include these firms in our compensation peer group, we monitor their compensation practices to inform our compensation program design and determinations.

As discussed below under “—Principal Components of Our Executive Compensation Program,” in addition to using our compensation peer group to set and analyze our executive compensation program and levels, we also used this peer group of companies to measure certain performance metrics for annual incentive bonuses for 2021.

Managing Dilution

Management and the Governance and Human Capital Committee balance the goal of aligning the interests of our executives and employees with the long-term interests of shareholders with active monitoring of our equity-based grant practices and potential for shareholder dilution. In determining 2021 equity-based grants, the Governance and Human Capital Committee and the Board considered our prior equity grant practices, currently outstanding restricted share awards, and the impact on shareholder dilution of these instruments and of contemplated grants. We periodically analyze the impact of our equity-based grants on dilution and share plan utilization models used by our institutional shareholders and by third parties who issue proxy voting recommendations.

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Principal Components of Our Executive Compensation Program

Salary

Base salaries provide a fixed component of compensation at a competitive level to attract and retain executives. Salaries for our named executive officers are based on several factors, including the scope of job responsibilities, experience, expertise, performance and competitive market compensation. From time to time, salaries may be adjusted to reflect promotions, increases in responsibilities and competitive considerations. As discussed above under “—Executive Summary – 2021 Executive Compensation Highlights,” in 2021, each of the named executive officers received a salary increase to reflect our assessment of the market landscape in relation to their increasing responsibilities as our organization has grown in scope and complexity.

Name		2020 Salary			2021 Salary		% Increase
Kevin J. O’Donnell	$	1,100,000		$	1,180,000		7.3%
Robert Qutub		$635,000			$650,000		2.4%
Ross A. Curtis		$675,000			$725,000		7.4%
Ian D. Branagan		£475,000			£492,700		3.7%
Sean G. Brosnan		$425,000			$525,000		23.5%

Annual Incentive Bonus

Our annual incentive bonus contributes to the alignment of named executive officer compensation and corporate performance. Amounts are earned based on our attainment of both financial measures and quantitative and qualitative strategic and operating accomplishments. The Governance and Human Capital Committee and management believe that quantitative results should be the primary measure of executive performance, but not the sole measure. This is because our business is subject to significant volatility over the short- and intermediate-term due to our exposure to catastrophic events, which makes it difficult to evaluate performance purely on a quantitative basis. This mix of qualitative and quantitative objectives is chosen to encourage underwriting discipline and to discourage excessive or inappropriate risk taking. The objectives also emphasize the investment of time and resources in projects to increase scalability and efficiency that will benefit shareholders over the long term. When considered together with the other components of our program that utilize different performance metrics and time frames, this mix helps ensure that short-term corporate performance is not pursued at the expense of long-term shareholder value creation.

We believe that our performance-based annual incentive bonus process fosters relative internal pay equity and aligns employees with overall corporate results in a manner consistent with our team-based compensation philosophy and organizational culture.

Annual Incentive Bonus Mechanics

At the beginning of each year, in connection with its annual compensation review, the Governance and Human Capital Committee determines a target level for each named executive officer’s annual incentive bonus. At the same time, the Governance and Human Capital Committee selects and approves the financial performance metrics and strategic accomplishments that will be used to determine the ultimate amount of the annual incentive bonus. This includes establishing specific targets, thresholds and maximums for each of the performance metrics.

Following year end, the Governance and Human Capital Committee measures our performance against the approved financial metrics and strategic accomplishments to determine a “business performance factor.” The business performance factor is equal to the sum of the outcomes for each performance metric, calculated as the percentage achievement multiplied by its relative weight, and subject to a maximum. Bonus allocations for all employees, including our named executive officers, are then made from a pool funded by multiplying the aggregate target bonuses by the business performance factor after adjusting for individual performance and contributions.

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2021 Annual Incentive Bonus Determinations

As discussed above under “—Executive Summary – 2021 Executive Compensation Highlights,” the target levels for annual incentive bonuses for our named executive officers other than the CEO were increased in 2021 to reflect our assessment of the competitive landscape in light of the expanding scope of their responsibilities as the Company continues to grow in both scale and complexity:

Name	2020 Target (% of Salary)		2021 Target (% of Salary)
Kevin J. O’Donnell	225%		225%
Robert Qutub	125%		150%
Ross A. Curtis	125%		150%
Ian D. Branagan	125%		150%
Sean G. Brosnan	90%		100%

These amounts were determined by the Governance and Human Capital Committee based on its annual analysis of the competitiveness of our executive compensation program, which is conducted with the assistance of our independent compensation consultant Mercer. The Governance and Human Capital Committee believes these amounts reflect our competitive position in the industry and support our goal of having a significant portion of our named executive officer pay be at-risk.

Performance Metrics

For 2021, the Governance and Human Capital Committee approved a mix of financial performance metrics and strategic accomplishments in its annual incentive bonus determinations, as set forth below. The Governance and Human Capital Committee believes that each financial performance metric represents an important measure of the financial success of our business, and, together with the strategic accomplishments, serve to balance risk and reward and drive achievement of our strategic goals.

The performance metrics approved by the Governance and Human Capital Committee for 2021 are set forth below.

 

The financial performance metrics for 2021 were consistent with 2020. For relative performance metrics, combined ratio rank versus peers and ratio of operating return on average common equity to peer median, we continued to target outperformance against our peers. For our ratio of actual gross written premiums to budget metric, we increased the targeted gross premiums written by approximately 29% to reflect anticipated growth in 2021. This was in addition to the 22% increase in the target in 2020, and in each of these years, we have surpassed each of these robust growth targets while maintaining our strategy and strict underwriting discipline.

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The strategic accomplishments approved by the Board for 2021 included:

 

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Full details of the specific targets, thresholds and maximums for each metric, as well as the actual results for 2021, are set forth in the graphic below. For each performance metric, an actual result below the set threshold would result in no payout related to that metric.

(1)	Actual payout between threshold and target and target and maximum is determined by straight-line interpolation.
(2)	To calculate, we compared our performance to our compensation peer group for 2021, which is described above.
(3)	Operating return on average common equity is a non-GAAP financial measure. A reconciliation of non-GAAP financial measures is included in “Appendix A” to this proxy statement.
(4)	With input from management and in conjunction with the Board’s annual review of our strategic plan, the Governance and Human Capital Committee evaluates performance on the pre-established strategic accomplishments, resulting in a score between 0 and 3.0, which translates to a specific payout on the pre-established payout schedule.

2021 Payout Determination

In February 2022, the Governance and Human Capital Committee reviewed the Company’s performance for the 2021 fiscal year. Performance against financial metrics is calculated formulaically based on actual results. To determine performance against strategic accomplishments, the Governance and Human Capital Committee reviews detailed information provided by management regarding progress on each of the various pre-established goals and consults with the Audit Committee, the Investment and Risk Management Committee, and the Non-Executive Chair of the Board, then gives a score to each area and averages the results to determine a final “strategic projects score” that corresponds to a pre-established payout percentage. The Governance and Human Capital Committee believes that, as discussed above under “—Executive Summary—Link Between Pay and Performance for 2021,” the Company performed very well against the pre-established strategic accomplishments for the annual incentive bonuses for 2021.

Based on our actual performance achievements, the Governance and Human Capital Committee established an overall business performance factor of 87% of target for 2021 (in accordance with the formula described above) and determined that the actual annual incentive bonus for 2021 for each named executive officer would be equal to our business performance factor of 87%, multiplied by his target bonus amount.

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The target and actual annual incentive bonuses for 2021 for each of our named executive officers, as determined by the Governance and Human Capital Committee, are set forth in the table below:

Name		Base Salary ($)		Target 2021 Bonus as a Percent of Base Salary (%)		Target 2021 Bonus ($)		Actual 2021 Bonus ($)
Kevin J. O’Donnell		1,180,000		225%		2,655,000		2,309,850
Robert Qutub		650,000		150%		975,000		848,250
Ross A. Curtis		725,000		150%		1,087,500		946,125
Ian D. Branagan(1)		666,722		150%		1,000,082		870,072
Sean G. Brosnan		525,000		100%		525,000		456,750

(1)	Mr. Branagan’s base salary of £492,700 was converted into U.S. dollars at the exchange rate of 1.35 on December 31, 2021.

Long-Term Incentives

Our long-term incentive awards link the compensation of our named executive officers directly to corporate performance over the long term. These awards make up a significant component of total direct compensation. For Messrs. O’Donnell, Qutub, Curtis and Branagan, who are the members of our management governance committee, the long-term incentive award consists of a combination of performance shares and time-vested restricted shares. Consistent with other senior leaders in the organization who are not members of the management governance committee, Mr. Brosnan’s award consists of time-vested performance shares only. The combination of awards with performance-based and service-based vesting supports our pay-for-performance philosophy by encouraging long-term performance, retention and shareholder value-creation and fostering an ownership culture.

Long-Term Incentive Award Mechanics

Generally, the Governance and Human Capital Committee makes annual long-term incentive awards to the named executive officers in connection with its annual review of compensation in the first quarter of the year. The Governance and Human Capital Committee may also grant equity awards from time to time to reflect promotions, special achievements, new hires or retention needs.

Time-vested restricted shares generally vest in four equal annual installments subject to continued service with the Company. Performance share awards generally have a three-year performance period, and cliff vest at the end of a three-year service period.

The Governance and Human Capital Committee reviews the terms and conditions of our performance shares at least annually to ensure alignment with our strategic plan. It selects the performance metric or metrics that will be used, and sets specific targets, thresholds and maximums. In response to shareholder feedback, the Governance and Human Capital Committee made significant enhancements to the weighting, design and structure of the 2021 performance shares.

Dividends are generally payable currently with respect to time-vested restricted shares. Dividends are accrued on unvested performance shares and are paid without interest at the same time as the underlying shares vest. No dividends are paid on forfeited performance shares.

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