Chris Hovey
ARCH CAPITAL GROUPAbout Chris Hovey
Chris Hovey, age 58, is Chief Operations Officer at Arch Capital Services LLC. He joined Arch in January 2014 and previously served as Executive Vice President and Chief Information Officer (2018–Jan 2020), and Chief Operating Officer of Arch Mortgage Insurance Company; earlier, he was COO of PMI Mortgage Insurance Co. and SVP of servicing operations and loss management at PMI (joined 2002). He holds a bachelor’s degree from San Francisco State University and an MBA from Saint Mary’s College in Moraga, California . Company performance context: Arch delivered $4.3B net income and $3.5B after-tax operating income in 2024, with annualized net income ROE of 22.8% and operating ROE of 18.9%; total shareholder return (TSR) was 30.8% in 2024 .
| Performance Metric | 1-year | 3-year | 5-year |
|---|---|---|---|
| Annualized ROE | 22.8% | 20.6% | 17.7% |
| Operating ROE | 18.9% | 17.5% | 13.8% |
| Book Value Return per Share | 13.1% | 58.3% | 101.0% |
| Tangible Book Value Return per Share | 10.1% | 59.4% | 101.1% |
| TSR | 30.8% | 118.5% | 126.4% |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arch Capital Services LLC | Chief Operations Officer | Not disclosed; current | Enterprise operations leadership across Arch; prior CIO experience supports digital/IT execution |
| Arch Capital Services LLC | EVP & Chief Information Officer | 2018–Jan 2020 | Led technology and data initiatives underpinning operational efficiency |
| Arch Mortgage Insurance Company | Chief Operating Officer | Not disclosed | Led mortgage insurance operations; loss management and servicing expertise |
| PMI Mortgage Insurance Co. | Chief Operating Officer | 2011–2014 (joined Arch in 2014) | Operational turnaround and servicing/loss management leadership |
| PMI Mortgage Insurance Co. | SVP, Servicing Operations & Loss Management | 2002–2011 | Built servicing and loss management capabilities |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Arch Global Services Holdings Ltd. (non‑U.S. subsidiary) | Designated Company Director nominee | 2025 AGM slate | Governance of subsidiary operations in alignment with group strategy |
The proxy biography lists internal executive roles; no public company board seats or external directorships are disclosed for Hovey .
Fixed Compensation
Hovey is not a Named Executive Officer (NEO); individual base salary and bonus amounts are not disclosed in the proxy. Company framework for executives emphasizes pay-for-performance.
| Element | Design/Policy | Notes |
|---|---|---|
| Base Salary | Reviewed annually; set to market for role, location, scope | NEO methodology disclosed; non‑NEO specifics (incl. Hovey) not provided |
| Short‑Term Incentive | Formulaic annual cash bonus tied to ROE and strategic goals | 70% financial metrics; 30% strategic goals for executives |
| Long‑Term Incentive | Mix of performance shares (55%), stock options (25%), restricted shares (20%) | 3‑year performance periods; options/restricted shares vest ratably over 3 years |
| Governance | Clawbacks; stock ownership/holding guidelines; no hedging; pledging limits | Applies to executives; specifics for Hovey not individually disclosed |
Performance Compensation
Company program mechanics and 2024 outcomes; Hovey’s individual awards/payouts are not disclosed.
| Short‑Term Incentive Metric | Weighting | 2024 Target | 2024 Actual | Payout Factor |
|---|---|---|---|---|
| Group ROE (across units) | 70% (corporate executives); 50% unit + 20% group for unit execs | 13.69% ROE target | 129.6% of target goal achievement | 200.0% of target (group) |
| Strategic goals | 30% | Structured objectives per executive | Determined by committee | 0–250% scale; capped by overall 200% |
| Long‑Term Incentive Component | Metric | Targets | Vesting | Modifier |
|---|---|---|---|---|
| Performance Shares (55%) | Adjusted Tangible Book Value per Share (ATBVPS) | Threshold 6% = 50%; Target 11% = 100%; Max 16% = 200% | Earned shares vest after 3‑year period | TSR modifier ±25% vs Performance Peer Group (35th–65th no change) |
| Stock Options (25%) | Share price appreciation | 10‑year term; exercise price ≥ grant date close | 3‑year ratable vesting | No repricing; Black‑Scholes valuation |
| Restricted Shares (20%) | Service | 3‑year ratable vesting | Shares; dividends accrue and pay at vest | Aligns retention and ownership |
2024 unit results used in STI: Insurance 128.7%→157.4% payout; Reinsurance 144.5%→189.1%; Mortgage 145.2%→190.4%; Investment 111.0%→122.0% . Performance shares granted in Feb 2022 (2022–2024 period) paid 200% based on TBVPS growth and TSR modifier for NEOs; structure informs executive alignment broadly .
Equity Ownership & Alignment
| Policy/Guideline | Company stance |
|---|---|
| Executive stock ownership and holding | Company applies stock ownership and holding guidelines to executives; details by individual not disclosed for Hovey |
| Hedging | Prohibited for directors, officers, employees; no short sales or derivatives on Arch securities |
| Pledging | Limited; company policies restrict number/type of shares that can be pledged |
| Award design | Minimum vesting periods; performance‑based majority; options strike ≥ market; no dividends on unearned awards |
Individual beneficial ownership for Hovey is not broken out in the proxy’s common share ownership table; the table lists directors and NEOs specifically .
Employment Terms
- Employment agreement terms, severance multiples, and change‑of‑control provisions are disclosed for NEOs; Hovey‑specific contract economics are not disclosed in the proxy .
- Company standards include clawbacks on incentive‑based compensation for executive officers; double‑trigger change‑in‑control on assumed equity awards; insider trading policy with hedging prohibition; and share holding requirements to align with long‑term value creation .
Investment Implications
- Alignment: Arch’s executive pay program ties cash bonuses to ROE and long‑term equity to ATBVPS growth with a TSR modifier, supporting shareholder value creation; these structures likely govern senior operators such as Hovey even if his individual grants are not disclosed .
- Retention and selling pressure: Three‑year vesting, holding requirements, and anti‑hedging/pledging policies reduce near‑term selling pressure and align behavior; lack of Hovey‑specific Form 4 granularity in the proxy limits visibility into his personal trading cadence .
- Execution risk: Hovey’s deep operations and mortgage servicing background combined with Arch’s strong 2024 performance (ROE and TSR) suggests operational discipline; continued delivery on technology and process efficiency is a lever for value in Insurance/Reinsurance/Mortgage segments .
- Governance backdrop: High say‑on‑pay support (95.3% in 2024) and independent compensation consultants (Meridian; Pay Governance) indicate stable compensation governance with peer benchmarking, lowering pay‑related headline risk .