Michael Derstine
About Michael Derstine
Michael Derstine, 55, serves as Executive Vice President and Chief Risk Officer (CRO) of Enact Holdings, Inc. (ticker: ACT). He has been EVP & CRO since May 2021, after serving as Senior Vice President & CRO from March 2013 to May 2021; he is responsible for risk management, pricing, credit policy, and quality assurance . Enact’s 2024 corporate performance under the executive team’s scorecard delivered Adjusted Operating Income of $718 million (200% funding), Adjusted ROE of 14.9% (200% funding), and an Expense Ratio of 23.0% (100% funding), which together supported above-target annual incentive payouts for NEOs including Derstine .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Enact Holdings, Inc. | Executive Vice President & Chief Risk Officer | May 2021–present | Leads risk management, pricing, credit policy, and quality assurance; “Risk & Pricing Management” scorecard area funded above target in 2024 |
| Enact Holdings, Inc. | Senior Vice President & Chief Risk Officer | Mar 2013–May 2021 | Led enterprise risk and credit/pricing disciplines through IPO-era transition and evolving housing/credit cycles |
External Roles
No public external roles are disclosed for Mr. Derstine in the 2025 proxy’s NEO biographies section .
Fixed Compensation
- Base salary rate as of 12/31/2024: $425,000; +13% vs prior year (company’s base salary schedule) .
- 2024 target annual incentive: increased to 75% of base salary for CRO role .
Michael Derstine – Summary Compensation (USD)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $335,000 | $367,308 | $415,385 |
| Bonus | $128,000 | $83,333 | $43,334 |
| Stock Awards (RSUs/PSUs grant-date fair value) | $333,624 | $395,870 | $488,170 |
| Non-Equity Incentive Plan Compensation (AIP) | $323,000 | $361,000 | $510,000 |
| All Other Compensation | $51,380 | $68,573 | $80,232 |
| Total | $1,171,004 | $1,276,084 | $1,537,121 |
2024 All Other Compensation – Details (USD)
| Component | Amount |
|---|---|
| Company contributions to retirement plans | $62,111 |
| Life insurance premiums | $5,021 |
| Financial counseling | $13,100 |
| Total | $80,232 |
Performance Compensation
Annual Incentive (AIP) design and 2024 scorecard
- 2024 target bonus: 75% of base salary; AIP payout range 0–200% of target .
- Individual 2024 outcome: $510,000 (≈160% of $318,750 target) based on corporate scorecard results .
2024 AIP Scorecard (Corporate)
| Metric | Weight | Threshold | Target | Maximum | 2024 Result | Funding |
|---|---|---|---|---|---|---|
| Adjusted Operating Income ($MM) | 30% | $220 | $488–$536 | $700 | $718 | 200% |
| Adjusted ROE (%) | 30% | 4.7% | 10.3%–11.3% | 14.5% | 14.9% | 200% |
| Expense Ratio (%) | 10% | 25% | 23% | 21% | 23.0% | 100% |
| Strategic Objectives | 30% | — | — | — | As assessed | 100% |
2024 Individual AIP Detail (CRO)
| Item | Value |
|---|---|
| Target bonus ($) | $318,750 |
| Actual payout ($) | $510,000 |
| Payout as % of target | ≈160% |
Long-Term Incentives (LTI)
- Mix/weighting: In 2024, PSUs increased to 70% of total target LTI for NEOs; RSUs comprise the remainder .
- 2024 LTI target award value (CRO): $500,000; Granted 7,182 RSUs and 10,772 target PSUs on 2/16/2024 .
- PSU metric: Three-year Book Value per Share (BVPS) Growth; 2024–2026 performance grid: Threshold 17% (50% payout), Target 35% (100%), Maximum 44% (200%) .
- Prior-cycle PSUs: 2022–2024 PSUs were earned at 200% of target based on BVPS Growth results (corporate-wide) .
Outstanding Equity and Vesting Schedules (as of 12/31/2024)
| Type | Tranche | Units (#) | Vesting schedule | 12/31/24 Value ($) |
|---|---|---|---|---|
| RSU | 2022 grant | 2,864 | 100% on 2/11/2025 | $92,736 |
| RSU | 2023 grant | 5,847 | 50% on 2/9/2025; 50% on 2/9/2026 | $189,326 |
| RSU | 2024 grant | 7,343 | 1/3 on 2/16/2025, 2/16/2026, 2/16/2027 | $237,766 |
| PSU | 2022–2024 (earned) | 17,236 | Earned at 200% per plan; settlement timing per award terms | $558,102 |
| PSU | 2023–2025 (in-flight) | 17,552 (max reporting) | Earned/vest based on 3-year goals through 12/31/2025 | $568,334 |
| PSU | 2024–2026 (in-flight) | 11,014 (target reporting) | Earned/vest based on 3-year goals through 12/31/2026 | $356,633 |
Notes: Market values use $32.38 closing price on 12/31/2024 . 2023–2025 PSU counts shown at “max” solely for reporting conventions; 2024–2026 PSU counts at “target” .
Additional LTI design details: RSUs vest 33% annually beginning first anniversary; PSUs pay 0–200% of target based on BVPS Growth over the 3-year period, with Committee discretion to reduce payouts; no stock options/SARs were granted to NEOs in 2024 .
Equity Ownership & Alignment
- Beneficial ownership: 33,771 shares of Enact common stock as of March 19, 2025 (less than 1%) .
- Stock ownership guidelines: CRO must hold ≥2x base salary in qualifying equity; all NEOs are in compliance or on track under the 5-year phase-in timeline; unearned PSUs do not count toward compliance .
- Hedging/pledging: Executives are prohibited from hedging Enact stock and from holding/pledging shares in margin or as collateral; robust clawback policies apply to incentive compensation (SEC-compliant plus supplemental misconduct-based recoupment) .
- Form of equity held: Outstanding awards table shows RSUs/PSUs and no listed option holdings for Mr. Derstine as of year-end 2024 .
- Deferred compensation: Restoration Plan (non-qualified DC) company contribution of $34,511 in 2024; year-end aggregate balance $298,428 .
Employment Terms
Severance (without Change of Control)
- Cash severance: 1× base salary + target annual incentive; pro-rata AIP paid based on actual results; 12 months COBRA-equivalent cash; partial vesting of next-scheduled tranche of time-based awards; performance awards remain outstanding and prorate; CEO-only pension vesting not applicable to CRO. Restrictive covenants: 12-month non-compete, 24-month non-solicit, confidentiality .
Change-of-Control (Double Trigger)
- If terminated without cause/for good reason within 2 years post-CoC: 2× base + target AIP; pro-rata AIP (actual/target mechanics per plan); immediate vesting of RSUs and pro-rated vesting of performance awards at actual (if determinable) or target; 18 months COBRA-equivalent cash and continued life insurance; full vesting of applicable nonqualified plans .
Potential Payments (as of 12/31/2024; uses $32.38 share price)
| Scenario | Cash Severance | Pro-Rata AIP | Health/Life | LTI Vesting | Total |
|---|---|---|---|---|---|
| Involuntary termination (no CoC) | $744,000 | $510,000 | $32,786 | $1,322,874 | $2,609,660 |
| Involuntary termination following CoC | $1,488,000 | $510,000 | $49,178 health + $8,821 life | $1,575,697 | $3,631,696 |
Compensation Peer Group & Say‑on‑Pay
- 2024 peer group maintained (15 companies), including Arch Capital Group, Essent Group, MGIC Investment, NMI Holdings, Radian Group, First American Financial, PennyMac Financial, Walker & Dunlop, among others .
- 2024 say‑on‑pay approval: over 99% of votes cast in favor .
Risk Indicators & Governance Policies
- Anti-hedging and anti-pledging restrictions for insiders; SEC-compliant clawback and supplemental discretionary clawback in place .
- Compensation Committee’s annual risk review (led by CRO’s Risk Department) concluded compensation policies do not encourage excessive risk-taking for 2024 .
- No excise tax gross‑ups for CoC benefits; double-trigger required for CoC severance; use of independent compensation consultant .
Investment Implications
- Pay-for-performance alignment: 2024 AIP paid ~160% of target for Derstine, directly reflecting 200% funding on AOI and ROE and balanced funding on expense/strategic metrics; LTI is more performance‑weighted (70% PSUs), keyed to BVPS Growth over three years .
- Near-term vesting/supply watch: Multiple RSU tranches vest in early 2025 (2/11, 2/9, 2/16), and 2022–2024 PSUs were earned at 200%, which may create episodic selling pressure around settlement windows, subject to trading windows and ownership guidelines .
- Retention and CoC economics: Standard market severance (1× no‑CoC; 2× with CoC) with double-trigger mitigates windfall risk while providing continuity protection; non‑compete/non‑solicit provisions reduce immediate competitive risk on departure .
- Alignment and risk controls: Ownership guidelines (2× salary for CRO), anti‑pledging/hedging, and clawbacks support long‑term alignment; Committee’s risk review suggests comp design does not incentivize excessive risk-taking .