Jon Stenberg

About Jon Stenberg

Jon Stenberg (age 59) is Citizens, Inc.’s Chief Executive Officer (since July 1, 2024) and President (since March 18, 2024), with over 30 years of life insurance leadership; he holds an MBA from Wharton and a B.S. from Central Michigan University, and is a U.S. Army veteran . Company performance during 2024 included $1.1B of new insurance issued (+54% YoY), total assets of $1.7B, no debt, diluted EPS of $0.29, book value per share of $4.21, and adjusted book value per share of $6.14; net income before tax declined to $15.0M from $26.2M on lower investment gains and a legal fee accrual, while premiums rose for the first time since 2017 (+$6.3M) . Total shareholder return (SEC “Pay vs Performance” table; value of initial $100) improved to $75.52 in 2024 from $50.66 in 2023, reflecting better equity performance though still below 2021 baseline . As CEO, he is a non‑independent director nominee (2025) and will not receive additional pay for board service .

Past Roles

External Roles

Board Governance

• Status and history: Director nominee in 2025; as CEO, classified as non‑independent and not compensated for Board service .
• Committees: All standing committees (Audit, Compensation, Investment, Nominating & Governance) are composed entirely of independent directors; with an independent Chair, Mr. Jerry “Chip” Davis, Jr. .
• Independence safeguards: Independent Chair structure; independent directors hold executive sessions at least three times per year without management present .
• Attendance: The Board met seven times in 2024; each director attended at least 75% of Board and committee meetings .

Dual‑role implications: CEO/non‑independent director status is mitigated by an independent Chair and fully independent committees, helping maintain oversight and compensation independence .

Fixed Compensation

Perquisites and tax gross-ups note: 2024 “All Other Compensation” included relocation and a $39,109 tax gross-up—an investor alignment consideration .

Performance Compensation

Short‑Term Incentive (Cash)

Detailed 2024 STI metrics and outcomes:

Long‑Term Incentive (Equity)

• Structure: Annual LTI split 60% PSUs and 40% RSUs; PSUs have a 3‑year performance period; RSUs vest ratably over three years to aid retention .

• 2024 Grants (pro‑rated for start date):

  Executive	LTI Target ($)	RSUs (shares)	PSUs (shares)
  Jon Stenberg	$325,962	60,928	91,391

• PSU performance metric: Compound growth in adjusted book value per Class A share (ABV) from grant to 12/31/2026; payout schedule: < $6.79 = 0%; $6.79–$8.00 = 50%; $8.01–$9.36 = 100%; > $9.37 = 200%; PSUs settle 3/28/2027 subject to continued employment and standard exceptions .

• Equity grant timing policy: Annual grants made on last market day in March; typically after 10‑K filing and prior‑year earnings release .

Equity Ownership & Alignment

Note: PSUs shown in “Outstanding Equity Awards” reflect threshold shares for disclosure purposes; actual payout depends on ABV performance .

Employment Terms

Estimated separation economics if terminated on 12/31/2024 (per proxy illustration):

Performance & Track Record

• Growth and sales: Issued $1.1B of new insurance in 2024 (+54% YoY), the highest in company history; expanded domestic licensing to 43 states (from 35) and agent network from >2,000 to >9,000; introduced new products domestically and internationally .
• Profitability and capital: 2024 net income before tax decreased to $15.0M vs. $26.2M in 2023 due to lower investment gains and a $3.5M legal fee accrual; premiums increased by $6.3M; no debt; A.M. Best maintained B++ with “Very Strong” balance sheet for CICA Domestic .
• Shareholder outcomes: Value of initial $100 investment rose to $75.52 in 2024 from $50.66 in 2023 (Pay‑versus‑Performance TSR series) .
• Pay alignment: 2024 Say‑on‑Pay support was 90% (advisory), indicating shareholder alignment with compensation structure .

Compensation Committee & Peer Group

• Committee independence and advisor: Independent Compensation Committee engages Meridian as independent consultant; no conflicts reported .
• Peer group benchmarking: Compensation benchmarked to a cross‑industry peer set (insurance/consumer finance) around Citizens’ scale; Citizens’ assets at 12/31/2023 were $1,669M vs. peer 50th percentile of ~$1,500M .

Related Party Transactions

• The company reported no related person transactions over $120,000 since January 1, 2024 requiring disclosure; Audit Committee pre‑approves related party transactions per policy .

Risk Indicators & Red Flags

• Tax gross‑up: 2024 relocation-related tax gross‑up of $39,109 paid to Stenberg (per “All Other Compensation”)—often viewed as shareholder‑unfriendly unless transitional and non‑recurring .
• Change‑in‑control leverage: CIC severance of 2x salary and 2x most recent annual bonus plus full equity vesting increases payout sensitivity to control events .
• Litigation note: 2024 included a $3.5M non‑cash accrual for legal fees awarded in a trade secret case on appeal (company‑level risk) .
• Insider selling pressure: Multiple vesting dates in March 2025–2027 (inducement RSUs on 3/18 annually; annual RSUs on 3/31; PSUs settle 3/28/2027) may create supply overhang potential, though hedging/pledging is prohibited, trading windows are controlled, and 10b5‑1 plans are permitted .

Investment Implications

• Alignment: High at‑risk mix (STI tied to four operational and financial pillars; PSU metric tied to ABV CAGR) supports pay‑for‑performance; strong 2024 Say‑on‑Pay (90%) indicates investor acceptance .
• Retention and execution: Significant multi‑year unvested equity (inducement RSUs and LTI RSUs/PSUs) and a 24‑month non‑compete reinforce retention through 2027 as the ABV‑linked PSU cycle matures .
• Governance safeguards: Independent Chair, fully independent committees, and a clawback policy mitigate dual‑role (CEO/Director) concerns and enhance oversight quality .
• Watch items: Relocation tax gross‑up optics, CIC severance terms, and clustered vesting windows warrant monitoring for potential sentiment or trading impacts; offset by pre‑clearance, blackout controls, and prohibition on pledging/hedging .