François Morin
ARCH CAPITAL GROUPAbout François Morin
François Morin, 57, is Executive Vice President, Chief Financial Officer and Treasurer of Arch Capital Group Ltd. (since May 2018). He joined Arch in 2011 as Chief Actuary and Deputy Chief Risk Officer, became Senior Vice President, Chief Risk Officer and Chief Actuary in 2015, and holds a B.Sc. in Actuarial Science (Université Laval). He is a Fellow of the Casualty Actuarial Society, Chartered Financial Analyst, Chartered Enterprise Risk Analyst, and Member of the American Academy of Actuaries . Under Arch’s performance framework, 2024 outcomes included net income of $4.3B, operating ROE of 18.9%, combined ratio of 82.5%, NPW growth of 16.8%, and 2024 TSR of 30.8% (3-year TSR 118.5%), with BVPS up 13.1% (nearly 24% including the $5 special dividend) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Arch Capital Group Ltd. | EVP, Chief Financial Officer and Treasurer | May 2018–present | Led capital management strategy (incl. 2024 $1.9B special dividend) and investor relations during CEO transition . |
| Arch Capital Group Ltd. | SVP, Chief Risk Officer and Chief Actuary | May 2015–May 2018 | Enterprise risk and actuarial oversight . |
| Arch Capital Group Ltd. | Chief Actuary and Deputy Chief Risk Officer | Oct 2011–May 2015 | Enterprise risk and actuarial leadership . |
| Towers Watson & Co. (incl. Towers Perrin/Tillinghast) | Various actuarial roles | Jan 1990–Sep 2011 | Actuarial and advisory expertise . |
External Roles
No external public company directorships are listed in Mr. Morin’s biography in the 2025 Proxy Statement .
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base salary | $800,000 | Increased from $750,000 effective Jan 2024 . |
| Target annual bonus (% of base) | 150% | Increased from 140% effective Jan 2024 . |
| Target LTI (% of base) | 230% (2024 cycle) | Increased from 200% effective Jan 2024 . |
| Target LTI (% of base) | 275% (2025 cycle) | Effective Jan 1, 2025 per benchmarking review . |
Performance Compensation
| Metric | Weight | 2024 Target/Scale | 2024 Result | Payout |
|---|---|---|---|---|
| Group financial (ROE-based) | 70% | ROE target 13.69% (threshold 7.5%; max 20.54%); payout range 20%–200% . | Group goal achievement 129.6% of target (exceeding max scale) . | 200% of target . |
| Strategic objectives | 30% | Discretionary scale; payout can exceed 200% only if financial ≥100% . | Performance assessed at 225% for Morin . | 225% of target for this component . |
| Total STI outcome | — | — | Weighted 70%×200% + 30%×225% = 208% . | Cash bonus: $2,400,000 (target $1.2M × 208%) . |
Additional detail:
- Mr. Morin elected to receive 20% of his 2024 approved STI in fully vested stock options granted March 4, 2025 (14,788 options, 10-year term; Black-Scholes value $480,000) under the Bermuda-based election program .
Long-Term Incentive Plan Design (2024 cycle)
- Mix: 55% performance shares (PSUs), 25% stock options, 20% time-based restricted shares .
- PSU metric: 3-year Adjusted Tangible Book Value per Share (ATBVPS) growth with TSR modifier (±25%); threshold 6% (50%), target 11% (100%), max 16% (200%) .
- 2022–2024 PSU payout (for grants made Feb 2022): 200% based on TBVPS growth, with TSR modifier; vesting March 2025 .
2024 Equity Awards (Grant Detail)
| Grant type | Grant date | #/Strike | Vesting | Grant date value |
|---|---|---|---|---|
| Performance Shares (target) | Feb 27, 2024 | 11,603 | Earned on 3-year ATBVPS with TSR modifier; vests Mar 2027 . | $1,081,864 . |
| Stock Options | Feb 27, 2024 | 14,975 @ $82.22 (adjusted for special dividend) | Ratable over 3 years; 10-year term . | $460,098 . |
| Restricted Shares | Feb 27, 2024 | 4,219 | Ratable over 3 years . | $367,981 . |
| Outperformance Award – Premium-Priced Options | Nov 19, 2024 | 52,441 @ $161.24 | Cliff vest at 3 years; 10-year term; 2-year post-exercise holding; 10-year non-compete compliance required to exercise . | $1,500,353 . |
| Outperformance Award – Restricted Shares | Nov 19, 2024 | 15,676 | Vest in full on 3rd anniversary; 5-year holding from grant (net shares) . | $1,500,036 . |
Notes on Outperformance Awards:
- $161.24 strike is ~70% above grant-date close ($95.69) and ~76% above 2025 average price through Mar 12, 2025; awards designed to deliver value only with substantial long-term outperformance and carry extended vesting/holding and restrictive covenants .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership (Mar 12, 2025) | 700,780 shares; less than 1% of outstanding . |
| Breakdown (within 60 days) | 274,681 common shares (incl. 24,937 RS) + 349,119 options exercisable + 76,980 performance RS subject to forfeiture; excludes 85,479 options not yet exercisable . |
| Unvested time-based stock | 56,346 shares; market value $5,203,553 at 12/31/2024 . |
| Unvested performance awards (target) | 50,638 shares; market/payout value $4,676,419 at 12/31/2024 . |
| Executive ownership guidelines | 4× base salary for Section 16 officers; 5-year compliance window; all NEOs in compliance . |
| Holding requirements | Must retain 50% of net profit shares until guideline met . |
| Hedging and pledging | Hedging prohibited; pledging limited (≤30% of owned shares or 0.5% of outstanding), subject to approvals; pledged shares don’t count toward ownership . |
Vesting/holding features that reduce near‑term selling pressure:
- Outperformance RS must be held for 5 years from grant (net shares) .
- Premium options require 2-year post-exercise holding and non-compete compliance; no interim vesting before year 3 .
Employment Terms
| Provision | Summary (Morin) |
|---|---|
| Base salary; target bonus | Base $800,000; target annual bonus 150% of base . |
| Benefits | Standard exec benefits for Bermuda-based roles (e.g., housing and auto allowances) . |
| Term/notice | Six-month notice on resignation (with possible garden leave); termination effective at 6 months after notice by either party . |
| Severance (no cause / good reason) | Base salary through 6 months after termination, plus (i) target annual bonus and (ii) pro‑rated target bonus to notice date; half paid at 60 days post-termination, remainder over 6 months; 6 months of health coverage; release and covenants required . |
| Non-compete / non-solicit | 1-year non-compete and non-solicit post-termination; if resignation without good reason, extension only if company pays daily amount tied to salary and bonus and continues health coverage; periods reduced by any garden leave . |
| CIC treatment | Cash severance amounts are the same with/without CIC in the tabular estimates; equity awards include double-trigger CIC provisions when assumed by an acquirer . |
| Clawback | Company clawback of incentive-based comp upon restatement in accordance with Nasdaq rules . |
Termination Scenarios — Estimated Payments (as of Dec 31, 2024)
| Scenario | Cash Severance | Accelerated Equity (intrinsic) | Health & Welfare | Total |
|---|---|---|---|---|
| Without cause or for good reason | $2,600,000 | — | $32,786 | $2,632,786 . |
| Following a change in control (without cause or for good reason) | $2,600,000 | $7,022,378 | $32,786 | $9,655,163 . |
| Death | — | $7,022,378 | $32,786 | $7,055,163 . |
| Disability | — | $7,022,378 | $32,786 | $7,055,163 . |
Compensation Structure Analysis
- Strong pay-for-performance linkage: 2024 STI paid at 208% driven by ROE-based formula (200%) and high strategic score (225%); PSU framework centered on 3-year ATBVPS with TSR modifier .
- Shift toward performance leverage and retention: November 2024 Outperformance Awards add premium-priced options (strike $161.24) and long holding/vesting periods, increasing at‑risk equity and deferring potential realizable value for ≥5 years .
- No hedging, limited pledging, double‑trigger CIC on equity, and clawback policy align with governance best practices and mitigate risk-taking .
- Shareholder support: Say‑on‑Pay approval 95.3% in 2024, consistent with >90% since 2020 .
Related Party Transactions and Red Flags
- No Morin‑specific related‑party transactions are disclosed; general related‑party review procedures are in place .
- Governance safeguards include: no tax gross‑ups, no option repricings, hedging prohibited, and pledging limits .
Investment Implications
- Alignment: High equity ownership (700,780 beneficial) with 4× salary ownership guideline, 50% net share retention, and stringent hedging/pledging limits suggest strong alignment with long-term shareholders .
- Retention and reduced near-term selling pressure: Premium-priced options and 3-year cliff vesting plus 2-year post‑exercise holds, combined with 5-year holding on restricted shares and one‑year non‑compete, create multi‑year retention hooks and defer monetization .
- Performance orientation: STI and PSU designs tied to ROE and ATBVPS/TSR, respectively, align compensation with value creation drivers (BVPS growth, ROE, TSR) that Arch emphasizes; 2024 results (18.9% operating ROE, 13.1% BVPS return, 30.8% TSR) validate payout outcomes .
- Downside risk mitigation: Clawback, double‑trigger CIC equity treatment, and no tax gross‑ups reduce governance risk; high Say‑on‑Pay support lowers pay‑related overhang .