Stephen Ksenak
About Stephen Ksenak
Stephen M. Ksenak is Senior Managing Director and General Counsel of Ambac Financial Group, serving in this role since July 2011; he joined Ambac in 2002 after practicing law at King & Spalding LLP . He is 59 and oversees Ambac’s legal affairs, a critical function through the company’s transformation and de-risking initiatives . Company performance in 2024 included total revenue from continuing operations up 89% to $236 million, Everspan gross premiums written up 40% to $382 million, Cirrata revenue up 93% to $99 million with EBITDA margin over 51%, and reduced Gross Operating Run Rate Expense to $13.9 million in Q4 . The rTSR percentile rank for 2024 was 10th, and Say-on-Pay approval was approximately 95% at the 2024 annual meeting, indicating strong shareholder support for the compensation program .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ambac Financial Group | Vice President & Assistant General Counsel | 2002–2011 | Managed corporate legal matters during legacy FG runoff and restructuring phase |
| Ambac Financial Group | Senior Managing Director & General Counsel | 2011–present | Leads legal affairs across Ambac; central to governance, compensation documentation, and transaction execution |
| King & Spalding LLP | Attorney | pre-2002 | Complex corporate and securities legal practice prior to joining Ambac |
External Roles
No external directorships or committee roles disclosed for Stephen M. Ksenak in the proxy .
Fixed Compensation
Multi-year cash and reported equity compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 600,000 | 600,000 | 600,000 |
| Bonus ($) | 74,000 | — | — |
| Stock Awards ($) | 670,619 | 808,864 | 742,754 |
| Non-Equity Incentive Plan Compensation ($) | 646,600 | 665,000 | 577,500 |
| All Other Compensation ($) | 13,323 | 14,323 | 14,984 |
| Total ($) | 2,004,542 | 2,088,187 | 1,935,238 |
- Employment agreement establishes base salary not less than $600,000 and a target annual incentive not less than 50% of base salary, with awards tied to pre-established performance goals .
Performance Compensation
Short-Term Incentive Plan (STIP) metrics and 2024 outcomes used for all NEOs (financial portion was applied uniformly; strategic portion varied by role):
| Metric (2024 STIP) | Weight | Threshold | Target | Maximum | Actual | Payout Indicator |
|---|---|---|---|---|---|---|
| Earned premium & program fees at Everspan ($mm, Q4 vs budget) | 28.6% | 28 | 31 | 34 | 22.9 | Below threshold (no payout) |
| Underwritten programs at Everspan (#) | 7.1% | 6 | 8 | 10 | 8 | 100% of target |
| New MGAs/programs at Cirrata (# ≥$5mm annualized GPW) | 14.3% | 4 | 6 | 8 | 13 | 200% of max |
| EBITDA margin at Cirrata (%) | 21.4% | 35% | 45% | 50% | 51.5% | 200% of max |
| Net Par Outstanding ($bn; reduction vs Jan 1) | 14.3% | 17.8 | 17.4 | 16.8 | Committee treated as max due to pending AAC sale | 200% of max (discretion) |
| Gross Operating Run Rate Expenses ($mm, Q4 vs budget) | 14.3% | 15.1 | 14.6 | 14.2 | 13.9 | 200% of max |
- For 2024, STIP weighting was 70% financial metrics and 30% strategic goals; the Committee applied the same financial multiplier to all NEOs, with strategic assessments individualized by the CEO and approved by the Committee .
- 2025 STIP: metrics revised to Adjusted EBITDA Margin (40%), Everspan Combined Ratio (20%), and Revenue Growth (40%); strategic goals removed to reduce discretion .
Long-Term Incentive Plan (LTIP) design and 2024 grants:
| Metric (2024 LTIP PSUs) | Weight | Target | Max | Payout Range |
|---|---|---|---|---|
| WLACC Outstanding at AAC ($bn) | ~22% | 3.4 | 3.0 | 0–200% (with rTSR ±20%) |
| Everspan Cumulative Gross Written Premium ($mm) | ~39% | 1,566 | 1,723 | 0–200% (with rTSR ±20%) |
| Everspan Cumulative EBITDA ($mm) | ~39% | 40.0 | 46.5 | 0–200% (with rTSR ±20%) |
| Cirrata Cumulative Gross Written Premium ($mm) | ~39% | 1,092 | 1,256 | 0–200% (with rTSR ±20%) |
| Cirrata Cumulative EBITDA ($mm) | ~39% | 49.0 | 56.0 | 0–200% (with rTSR ±20%) |
- 2024 LTIP grants to Ksenak: PSUs target 33,085 units (max 66,170); RSUs 14,179 units; grant date fair values $527,375 (PSUs) and $215,379 (RSUs). RSUs vest in three equal annual installments (Mar 13, 2025; Mar 3, 2026; Mar 3, 2027); PSUs settle within 75 days after Dec 31, 2026 subject to rTSR modifier .
- 2021 LTIP payout settled in early 2024 reflected company performance (WLACC reduced to $8.337bn and Xchange EBITDA $12.9mm), with rTSR reducing payout by 10%; Ksenak realized $687,424 from 2021 PSUs at 152.2% after rTSR .
Equity Ownership & Alignment
| Ownership Metric | 2024 (Record Date: Apr 10, 2024) | 2025 (Record Date: Apr 3, 2025) |
|---|---|---|
| Beneficial Ownership (shares) | 192,339 (<1%) | 264,799 (<1%) |
| Unvested RSUs (12/31/2024) | 28,432; $359,665 market value | — |
| Unearned PSUs (12/31/2024, target) | 100,650; $1,273,223 value | — |
| Executive Stock Ownership Guideline | 2x base salary requirement | 2x base salary requirement |
| Compliance (value vs requirement) | Required: $1,200,000; Owned value: $2,073,376 (meets/exceeds) | Required: $1,200,000; Owned value: $2,073,376 (as of record date) |
| Hedging/Pledging Policy | Hedging and pledging of Ambac stock are prohibited | Hedging and pledging of Ambac stock are prohibited |
Vesting schedules for outstanding awards:
- RSUs granted in 2024 vest equal thirds on Mar 13, 2025; Mar 3, 2026; Mar 3, 2027 .
- RSUs granted in 2023 vest equal thirds on Mar 3, 2024; Mar 3, 2025; Mar 3, 2026 .
- RSUs granted in 2022 vested equal thirds on Feb 28, 2023; Feb 28, 2024; Feb 28, 2025 .
- PSUs granted in 2022/2023/2024 have three-year performance periods and settle within 75 days post period-end, subject to rTSR modifier .
Insider selling pressure indicators:
- Company policy prohibits hedging/pledging and requires pre-clearance and trading only in open windows, reducing near-term selling pressure signals . 2025 PSU accelerations were approved only for the CEO, CFO, and Group COO due to conclusion of legacy business performance criteria; Ksenak’s PSUs were not included in that acceleration, implying continued performance-based retention hooks in his equity mix .
Employment Terms
Key terms of Stephen M. Ksenak’s employment agreement (Jan 4, 2017):
- Term: One-year term with automatic annual renewals unless notice given ≥90 days before expiration .
- Compensation: Base salary ≥$600,000; target annual incentive ≥50% of base; eligible for equity under incentive plans with LTIP target set ≥$225,000, similar form/terms to other senior executives .
- Severance (no change-in-control): If terminated without Cause/by Ksenak for Good Reason, severance equals 1.5x (base + target bonus), plus pro-rated target bonus, 12 months COBRA-equivalent benefits; 12 months vesting acceleration on time-based awards; deemed service for performance awards with pro-rata eligibility based on actual performance .
- Severance (change-in-control): If terminated in contemplation of and ≤90 days before or within 1 year after a CoC, severance multiple increases to 2.0x (base + target bonus); all time-based awards fully vest; performance-based awards eligible based on actual performance through period end .
- Restrictive covenants: 12-month non-compete and non-solicit; confidentiality, mutual non-disparagement, and cooperation .
- Clawback: Subject to company recoupment policy adopted effective Oct 2, 2023 for accounting restatements (amounts calculated without regard to taxes) .
- Ownership guidelines: Required to hold Ambac common stock equal to 2x base salary; retention of net shares from awards until compliant .
Potential payments upon termination (illustrative as of Dec 31, 2024 at $12.65/share):
| Scenario | Severance Payment ($) | RSU Settlement ($) | PSU Settlement ($) | Pro-rata STIP ($) | Benefits ($) | Total ($) |
|---|---|---|---|---|---|---|
| Death/Disability | — | 1,200,599 | 1,273,210 (at 100% per plan terms) | 400,000 | — | 2,873,809 |
| Involuntary Termination w/o Cause or by Executive for Good Reason | 1,500,000 | 1,200,599 | — (payable post-period based on actuals) | 400,000 | 53,181 | 3,153,780 |
| Involuntary Termination w/o Cause or by Executive for Good Reason (in CoC window) | 2,000,000 | 1,200,599 | — (payable post-period based on actuals) | 400,000 | 53,181 | 3,653,780 |
Investment Implications
- Pay-for-performance alignment: Ksenak’s 2024 compensation was predominantly at-risk through PSUs/RSUs and STIP, with company-level financial metrics paying at or above target (except Everspan earned premium), and strategic goals assessed by role. LTIP metrics focus on WLACC reduction and growth/EBITDA at Everspan/Cirrata, with rTSR modifier tightening payouts versus peers .
- Retention risk: Unvested RSUs and performance-tethered PSUs (100,650 target units as of year-end 2024) create meaningful retention hooks; unlike some peers, Ksenak did not receive 2025 PSU acceleration, keeping performance alignment intact post AAC sale .
- Alignment safeguards: Strong stock ownership compliance (>$2.0m vs $1.2m required), strict prohibition on hedging/pledging, and clawback policy mitigate misalignment and reduce adverse trading signals .
- Change-of-control economics: 2.0x cash severance in CoC cases plus equity treatment is competitive but not excessive; single-trigger equity vesting limited to time-based awards with performance awards determined by actual results, preserving shareholder alignment .
- Shareholder sentiment: High Say-on-Pay support (~95% in 2024) and peer-benchmarked program indicate limited governance overhang; 2025 STIP shifts to objective P&C metrics should further strengthen pay discipline tied to core businesses .