Stephen Donnarumma
ASSURED GUARANTYAbout Stephen Donnarumma
Stephen Donnarumma, age 62, is Assured Guaranty’s Chief Credit Officer (CCO), a role he has held since 2007 (CCO of AGM from 2009 until AGM merged into AG in 2024). He joined Assured Guaranty in 1993 and previously worked at Financial Guaranty Insurance Company (1989–1993), Fannie Mae (1987–1989), and Moody’s Investors Service (1985–1987) . In 2024 he oversaw global credit underwriting across public, structured, and infrastructure finance and led harmonization of credit standards post the U.S. insurance company combination . Company compensation decisions reference core operating income per share, core operating ROE, core operating shareholders’ equity per share, core ABV per share, and PVP as key measures tied to management incentives , and AGO’s 2023 one-year TSR was 22.5% (53rd percentile) and three-year annualized TSR 35.9% (100th percentile) versus the compensation peer group .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Assured Guaranty (AG/AGM/AG Re) | Chief Credit Officer (AG since 2007; AGM 2009–2024); previously Deputy Chief Credit Officer (AGL), COO and Chief Underwriting Officer (AG Re), Chief Risk Officer (AG) | 2007–present (CCO); prior roles since 1993 | Led global underwriting; expanded climate risk criteria; harmonized credit manuals and limits following combination of U.S. insurance companies |
| Financial Guaranty Insurance Company | Underwriting of domestic/international financial guaranty transactions | 1989–1993 | Core underwriting leadership in monoline insured finance |
| Fannie Mae | Director of Credit Risk Analysis | 1987–1989 | Credit risk analytics for mortgage credit |
| Moody’s Investors Service | Analyst | 1985–1987 | Credit analysis foundations |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Assured Guaranty Re Ltd. (AG Re) | Director (subsidiary board) | Elected for one-year term at the AGM cycle | Nominated alongside other AGO executives for the 2024–2025 AG Re board slate |
Fixed Compensation
| Year | Base salary ($) | All other compensation ($) | Total ($) |
|---|---|---|---|
| 2024 | 600,000 | 274,912 | 3,370,960 |
| 2023 | 525,000 | 217,712 | 2,992,385 |
| 2022 | 500,000 | 241,548 | 2,697,890 |
2024 perquisites and other compensation detail:
- Employer retirement plan contributions: $248,535
- Matching gift donations: $25,000
- Miscellaneous: $1,377
Base salary increased to $600,000 for 2024 reflecting 2023 performance and credit department scope .
Performance Compensation
Cash incentive (non-equity) – 2024 formula and payout
- Target bonus: 200% of base salary (2.0x), i.e., $1,200,000
- Weightings: 67% financial performance targets; 33% individual/non-financial objectives
- 2024 scores: financial 64.6%; individual 57.8%
- Actual cash incentive paid: $1,467,861
| Component | Weight | Target | Actual/Score | Payout ($) | Vesting |
|---|---|---|---|---|---|
| Cash incentive (2024) | 67% financial; 33% individual | $1,200,000 (2.0x salary) | 64.6% financial; 57.8% individual | 1,467,861 | Cash, paid in 2025 |
Note: AGO’s compensation framework references core operating EPS, core operating ROE, core operating shareholders’ equity per share, core ABV per share, and PVP among the key measures used to determine management compensation .
2024 equity grants
| Instrument | Grant date | Threshold (sh) | Target (sh) | Max (sh) | Grant-date fair value ($) |
|---|---|---|---|---|---|
| PSU – tranche A (company uses ABV/TSR PSUs) | Feb 21, 2024 | 1,701 | 3,402 | 8,505 | 354,727 |
| PSU – tranche B (company uses ABV/TSR PSUs) | Feb 21, 2024 | 1,701 | 3,402 | 6,804 | 288,626 |
| RSU (time-based) | Feb 21, 2024 | — | 4,536 | — | 384,834 |
2024 shares vested:
| Metric | 2024 |
|---|---|
| Shares acquired on vesting (gross) | 30,753 |
| Value realized on vesting ($) | 2,611,852 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Mar 7, 2025) | 93,241 common shares; unvested restricted shares: 0; RSUs: 38,210 (RSUs shown for alignment but not “beneficially owned” under SEC rules) |
| Ownership vs guideline | Guideline = 5× salary; current ownership = 13.2× salary (exceeds) |
| Anti-pledging / pledging status | Pledging requires approvals and financial capacity test; as of Mar 19, 2025 no director or executive officer has pledged shares |
| Anti-hedging policy | Hedging of common shares prohibited |
| Unvested time-based RSUs (12/31/2024) | 4,788 ($430,968); 4,917 ($442,579); 4,536 ($408,285); 7,674 ($690,734); 7,182 ($646,452) |
| Unearned PSUs outstanding (12/31/2024) | 1,844 ($165,978); 1,844 ($165,978); 1,701 ($153,107); 1,701 ($153,107) |
| Option awards | No stock options disclosed in the 12/31/2024 outstanding awards table (stock awards and PSUs only) |
| Delivery/vesting mechanics | RSUs deliver upon vesting on specified anniversaries; example: 2/23/2022 grant vested 2/23/2025 |
Employment Terms
| Provision | Key terms / values |
|---|---|
| Severance plan (NEOs) | One year salary; average of last three annual cash incentives; pro-rata annual cash incentive for year of termination; one year of medical/dental benefits; equity per award terms |
| Termination without cause / for good reason (as if 12/31/2024) | Salary continuation $600,000; cash incentive $1,298,554; benefits $27,910; unvested RSUs $1,281,832; unvested PSUs $2,143,466; total $5,351,762 |
| Death or disability (as if 12/31/2024) | Unvested RSUs $1,281,832; unvested PSUs $2,143,466; total $3,425,298 |
| Retirement (as if 12/31/2024) | Unvested RSUs $1,281,832; unvested PSUs $3,072,690; total $4,354,522 |
| Change-in-control treatment | No single-trigger vesting; double-trigger required; no 280G excise tax gross-ups |
| Clawback policy (scope) | Forfeiture/recoupment for misconduct; acts likely to injure the Company; restatements (regardless of misconduct); overstatement of objective metrics; covenant violations; etc. Applies to RSUs, ABV PSUs, Relative TSR PSUs, and cash incentives |
| Restrictive covenants | Certain rights to vesting/distributions following retirement, termination without cause or for good reason are subject to continuing compliance with restrictive covenants; violations can lead to forfeiture/repayment |
| Non-qualified deferred compensation (2024) | Executive contributions $101,268; registrant contributions $202,535; aggregate earnings $558,392; aggregate balance $5,399,556 |
Performance & Track Record
- 2024 key achievements (CCO): led credit review of 2,000+ transactions; advanced climate risk criteria and new geographic/asset class underwriting; harmonized credit standards post U.S. company combination; modernized U.S. public finance systems .
- 2023 highlights (CCO): 1,400+ transaction credit reviews; created obligor/sector/geography risk-limit methodology; expanded climate risk criteria; designed pooled muni structure preserving tax-exempt cash flows; contributed to AG Analytics platform .
- Committee performance context: AGO’s one-year TSR (2023 performance year) was 22.5% (53rd percentile), and three-year annualized TSR was 35.9% (100th percentile) vs peer group used by the compensation committee .
Compensation Structure Analysis
- Cash vs equity mix: 2024 total comp $3.37M with salary $0.60M, cash incentive $1.47M, and share awards $1.03M, indicating substantial at-risk pay tied to performance and equity .
- Shift and structure of LTI: 2024 equity comprised PSUs (two tranches with performance ranges) and time-based RSUs; no stock options disclosed in outstanding awards, consistent with a tilt toward RSUs/PSUs over options .
- Target rigor and formula: Cash incentive formula weights financial metrics 67% and individual objectives 33%; 2024 scores (64.6%/57.8%) generated a payout of $1.47M vs $1.2M target, showing formulaic alignment with measured outcomes .
- Clawbacks/controls: Broad clawback triggers covering both equity and cash; anti-hedging and restrictive pledging policies; no excise tax gross-ups under 280G .
Investment Implications
- Alignment: Ownership at 13.2× salary vs a 5× guideline, no pledging, anti-hedging policy, and substantial PSU usage indicate strong alignment with long-term value creation and shareholder-friendly risk controls .
- Retention and pressure: Meaningful unvested RSUs/PSUs outstanding and a severance framework providing one year of salary plus average bonus and benefit continuation suggest balanced retention economics; 2024 vesting of 30,753 shares (~$2.61M) indicates periodic supply from vesting, though sale constraints are moderated by ownership guidelines already exceeded .
- Pay-for-performance: Cash incentive outcomes reflect sub-maximum scores on financial/individual measures; LTI split between ABV- and TSR-linked PSUs plus time-based RSUs anchors longer-term performance sensitivity in areas the company tracks closely (core operating ROE/EPS, ABV, PVP) .
- Execution risk: As CCO, Donnarumma’s remit across credit underwriting and evolving climate-risk criteria means credit cycle inflections and sector/geographic concentrations are key operational levers; reported achievements in 2024–2023 show continued tightening of standards and modernization, which should mitigate downside but may cap near-term volume if risk thresholds tighten .