Christine Todd
ARCH CAPITAL GROUPAbout Christine Todd
Christine Todd, 58, is Chief Investment Officer of Arch Capital Group Ltd. and President of Arch Investment Management Ltd. (AIM). She joined Arch in June 2021, holds the CFA charter, and earned a B.A. from Georgetown University and an MBA from Boston University . Under her leadership, Arch’s investment portfolio outperformed its benchmark by 89 bps, and the fixed income portfolio’s risk‑adjusted return ranked in the top 5% of peers over the three years ended December 31, 2024 . Company performance metrics used in incentive plans show strong value creation: 2022–2024 tangible book value per share (TBVPS) growth annualized 23.6% (capped at 200% payout), with 116% TSR placing ACGL in the 94.4th percentile of its peer group over the same period .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Amundi US | Head of Fixed Income, U.S. | Feb 2019 – May 2021 | Led U.S. fixed income; senior investment leadership |
| Neighborly Investments | Executive role | Not disclosed | Held executive responsibilities |
| Standish Mellon Asset Management Company LLC | Executive role | Not disclosed | Held executive responsibilities |
| Gannett, Welsh & Kotler | Executive role | Not disclosed | Held executive responsibilities |
Fixed Compensation
- 2024 adjustments: Base salary increased to $800,000 from $685,000; STI target increased to 150% from 140%; LTI target increased to 215% from 200% (no adjustments for 2025 decisions) .
- Employment agreement provides $800,000 base salary and 150% target annual bonus .
| Year | Base Salary ($) | Target Bonus (%) | Target Bonus ($) | Actual Bonus Paid ($) |
|---|---|---|---|---|
| 2024 | 800,000 | 150% | 1,200,000 | 1,932,000 |
2024 Summary Compensation (for context): Salary $800,000; Stock Awards $2,355,237; Option Awards $1,430,325; Non-Equity Incentive $1,932,000; All Other Compensation $450,311; Total $6,967,873 .
Performance Compensation
2024 Short‑Term Incentive (STI) – Formula and Outcome
- Committee assessed Ms. Todd’s strategic goals at a 200% payout factor; group financial goal payout 200% of target; investment segment financial goal payout 122% of target .
| STI Component | Payout Factor | Weighting | Adjusted Weighting | Target Dollars ($) | Payout ($) |
|---|---|---|---|---|---|
| Financial Performance — Group | 200% | 20% | 40% | 1,200,000 | 480,000 |
| Financial Performance — Segment (Investment) | 122% | 50% | 61% | 732,000 | — (rolls into total) |
| Strategic Performance | 200% | 30% | 60% | 720,000 | — (rolls into total) |
| Total | — | 100% | 161% | — | 1,932,000 |
Additional performance context: Investment portfolio outperformed benchmark by 89 bps; fixed income risk‑adjusted return top 5% over the three years ended 12/31/2024 .
2024 Long‑Term Incentive (LTI) – Annual Award (Feb 27, 2024)
- LTI target set at 215% of salary for 2024 .
- Standard vesting: restricted shares/units vest in three equal annual installments starting on first anniversary; options generally vest in three equal annual installments starting on first anniversary .
| Grant Date | Instrument | Quantity/Target | Exercise Price | Vesting | Grant‑Date Fair Value ($) |
|---|---|---|---|---|---|
| Feb 27, 2024 | Performance Shares (target) | 10,846 | — | Earned over 3 years; TSR modifier | 945,988 |
| Feb 27, 2024 | Stock Options | 13,998 | 82.22 | 3 equal annual installments starting 2/27/2025 | 430,080 |
| Feb 27, 2024 | Time‑Based RS | 3,944 | — | 3 equal annual installments starting 2/27/2025 | 343,996 |
Performance Share framework and achieved results (for the 2022–2024 cycle): TBVPS growth implied 200% payout; TSR 94.4th percentile led to a 125% modifier but payout capped at 200% .
2024 Outperformance Award (Nov 19, 2024) – Succession‑Related, Retention‑Focused
- Structure and size: 50% premium‑priced options and 50% time‑vested restricted shares; options strike at $161.24 . Premium‑priced options vest on the third anniversary; award terms include a two‑year post‑exercise holding period and non‑compete conditions before value can be realized .
| Grant Date | Instrument | Quantity | Exercise Price | Vesting/Holding | Grant‑Date Fair Value ($) |
|---|---|---|---|---|---|
| Nov 19, 2024 | Premium‑Priced Options | 34,961 | 161.24 | Vest on 3rd anniversary; 2‑year post‑exercise hold; non‑compete conditions | 1,000,245 |
| Nov 19, 2024 | Time‑Based Restricted Shares | 10,450 | — | Vest in full on 3rd anniversary | 999,961 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 12, 2025)
| Holder | Common Shares Beneficially Owned | Rule 13d‑3 % |
|---|---|---|
| Christine Todd | 199,007 | <1% (“*”) |
Breakdown detail for Ms. Todd (as of March 12, 2025):
- 70,955 directly owned, including 18,338 time‑based restricted shares .
- Options exercisable within 60 days: 60,720 .
- Performance restricted shares subject to forfeiture: 67,332 .
- Additional options not exercisable within 60 days: 63,119 .
Outstanding Equity Awards at 12/31/2024 (Selected Ms. Todd line items)
| Category | Detail |
|---|---|
| Unvested time‑based shares | 42,121 shares; market value $3,889,874 at $92.35 closing price |
| Unearned performance shares | 46,738 shares; market/payout value $4,316,254 at $92.35 |
| Options (exercisable) | 20,030 @ $34.71 exp. 6/7/2031; 12,779 @ $42.54 exp. 2/25/2032; 5,603 @ $64.17 exp. 2/24/2033 |
| Options (unexercisable) | 6,380 @ $42.54 exp. 2/25/2032; 11,174 @ $64.17 exp. 2/24/2033; 13,998 @ $82.22 exp. 2/27/2034; 34,961 @ $161.24 exp. 11/19/2034 |
| Special note | 5,666 options from 2023 bonus election vested on grant date (2/27/2024) |
Alignment and governance policies:
- Executive share ownership guideline: 4× base salary for Section 16 executives; all NEOs in compliance .
- Share holding requirement: retain 50% of net profit shares until guideline met .
- Hedging prohibited; pledging discouraged and limited to the lesser of 30% of beneficially owned shares or 0.5% of outstanding, with prior approval; pledged shares don’t count toward ownership guidelines .
- Clawback policy applies to cash and equity incentive‑based compensation (three‑year lookback in case of restatement, per exchange rules) .
- No tax gross‑ups and no excise tax gross‑ups for change in control payments .
Employment Terms
Employment Agreement (summary for Ms. Todd)
- Base $800,000; target annual bonus 150% of base; participation in benefits customary for Bermuda‑based senior executives (including housing and auto allowance) .
- Termination provisions include: if terminated without cause or resigns for good reason, salary through six‑month anniversary of termination plus target annual bonus and pro‑rated target annual bonus through notice date .
- Resignation without good reason requires six months’ notice; company may place executive on garden leave and then pay a lump sum equal to one‑half of the “bonus amount” plus pro‑rated portion thereafter, per plan definitions .
Potential Payments on Separation (as of 12/31/2024)
| Scenario | Cash Severance ($) | Accelerated Vesting ($) | Health & Welfare ($) | Total ($) |
|---|---|---|---|---|
| Death | — | 5,747,334 | 13,542 | 5,760,876 |
| Disability | — | 5,747,334 | 13,542 | 5,760,876 |
| Without Cause or For Good Reason | 2,600,000 | — | 13,542 | 2,613,542 |
| Without Cause or For Good Reason following Change in Control | 2,600,000 | 5,747,334 | 13,542 | 8,360,876 |
Change‑in‑control equity treatment adheres to double‑trigger provisions for awards assumed by an acquirer .
Performance & Track Record
- Investment leadership: Portfolio outperformed benchmark by 89 bps; fixed income risk‑adjusted return top 5% over 3 years ended 12/31/2024 .
- Enterprise value creation metrics used for incentives delivered: 2022–2024 TBVPS growth annualized 23.6% (200% payout cap); TSR 116% at the 94.4th percentile (TSR modifier at 125%), capped at 200% payout for the cycle .
- Say‑on‑Pay results signal strong shareholder support: 95.3% approval in 2024; 93.9% in 2023; 94.6% in 2022; 95.1% in 2021; 94.6% in 2020 .
Compensation Structure Analysis
- Cash vs. equity mix: Equity dominates target pay; other NEOs (including CIO) had ~80% long‑term incentives at target, reinforcing alignment with shareholder returns .
- Shift and rigor: 2024 LTI targeted at 215% of salary for Ms. Todd; performance shares with TBVPS goals and TSR modifier add rigor and relative assessment .
- Retention design: 2024 Outperformance Award with premium‑priced options, 3‑year cliff vesting, two‑year post‑exercise holding, and non‑compete requirements defers realizable value for at least five years, strengthening retention and long‑term focus .
- Governance safeguards: Clawback; no hedging; constrained pledging; no tax gross‑ups; double‑trigger CIC equity .
Vesting Schedules and Potential Selling Pressure
- Standard 2024 annual LTI grants (options and time‑based RS) vest in three equal annual installments beginning 2/27/2025; performance shares vest based on 3‑year results, then settle in shares .
- November 19, 2024 Outperformance RS vest in full on the third anniversary (11/19/2027) ; premium‑priced options vest on 11/19/2027 with a two‑year post‑exercise holding period and non‑compete conditions, limiting near‑term monetization pressure even after vesting .
Equity Ownership & Alignment Policies (Quick Reference)
- Executive share ownership: 4× salary; all NEOs compliant .
- Share retention: 50% of net profit shares until ownership guideline met .
- Hedging: Prohibited .
- Pledging: Discouraged; limited to the lesser of 30% of beneficially owned or 0.5% of outstanding shares with prior approval; pledged shares excluded from ownership compliance .
- Clawback: Applies to incentive compensation upon restatement (three‑year lookback) .
Investment Implications
- Alignment: High at‑risk and long‑dated equity, premium‑priced options, strict holding/non‑compete terms, and 4× salary ownership guidelines indicate strong alignment and reduced short‑term selling incentives .
- Retention: Multi‑year cliff vesting and post‑exercise holding on the 2024 Outperformance Award, plus standard three‑year vesting on annual grants, create meaningful retention hooks through at least 2027–2029 .
- Pay‑for‑performance: STI and LTI frameworks linked to ROE, TBVPS growth, and relative TSR delivered maximum outcomes for the 2022–2024 cycle; continued strong execution in investments supports above‑target STI results for 2024 .
- Governance risk: Hedging bans, limited pledging, robust clawback, and no gross‑ups reduce governance red flags; strong Say‑on‑Pay support further mitigates pay risk perceptions .
- Monitoring: Watch Section 16 filings around annual vesting dates (e.g., 2/27 each year) and the 11/19/2027 cliff vest; note that premium‑priced options carry a two‑year post‑exercise hold that tempers immediate selling capacity .