Annette B. Szady
About Annette B. Szady
Annette B. Szady, 63 (as disclosed for Class A directors in the 2024 proxy), has served as a director of Donegal Group Inc. since 2020 . She is a certified public accountant and previously served as Director of the Bureau of Financial Examinations at the Pennsylvania Insurance Department (2011–2016), following 20 years in financial leadership roles including 15 years as vice president and chief financial officer for the largest writer of professional liability insurance for physicians in Pennsylvania .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Pennsylvania Insurance Department | Director, Bureau of Financial Examinations | 2011–2016 | Oversight of insurer financial examinations and regulatory compliance |
| Professional liability insurer (largest writer for physicians in PA) | Vice President & Chief Financial Officer | 15 years within a prior 20-year period (years not specified) | Financial leadership and control over insurer operations |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Donegal Mutual Insurance Company | Director | Current (as of 2024/2025 proxies) | Interlocks with DGICA’s board; Donegal Mutual is the controlling shareholder |
Board Governance
- Committee memberships:
- Audit Committee member; the committee met 8 times in 2024 , and Szady attended 6 of the 2024 Audit Committee meetings (joined April 2024) .
- Designated “financial expert” on the Audit Committee (with Hess and Huber); all Audit Committee members satisfy SEC independence and financial literacy requirements .
- Not listed as a member of the Compensation Committee (members: Hess, Kraft, Mahan, Moore) or Nominating Committee (members: Hess, Kraft, Mahan) in 2025 proxy .
- Independence: Other than the CEO (Burke), all directors are independent; Audit Committee members (including Szady) satisfy independence requirements under the Exchange Act and PHCA .
- Attendance: Each director attended at least 75% of total board and committee meetings in 2024; all directors attended the 2024 annual stockholders’ meeting .
- Lead independent director: DGICA does not have a separate lead independent director; the chairman role is combined with the CEO at DGICA, while Donegal Mutual has an independent chairman .
Committee Attendance (2024)
| Committee | Meetings Held | Szady Meetings Attended |
|---|---|---|
| Audit | 8 | 6 |
Fixed Compensation
- Annual retainer structure (2025 framework): $90,000 cash plus 500 shares of Class A restricted stock (estimated value $7,735 based on 12/31/2024 close), with per-meeting fees of $500 for board meetings beyond five, $300 for Compensation and Executive Committee meetings, $500 for Coordinating, Nominating and Special Committee meetings, and $750 for Audit Committee meetings .
| Type of Compensation | Amount | Form of Payment |
|---|---|---|
| Base Retainer | $90,000 | Cash |
| Annual Equity Retainer | 500 shares; $7,735 (estimated) | Restricted Class A stock |
| Per Board Meeting >5 | $500 | Cash |
| Per Compensation & Executive Committee Meeting | $300 | Cash |
| Per Coordinating, Nominating & Special Committee Meeting | $500 | Cash |
| Per Audit Committee Meeting | $750 | Cash |
Director Compensation (Year-over-Year)
| Metric | 2023 | 2024 |
|---|---|---|
| Fees Earned or Paid in Cash ($) | $93,500 | $96,250 |
| Stock Awards ($) | $7,100 | $6,995 |
| Option Awards ($) | $6,795 | $6,345 |
| Total ($) | $107,395 | $109,590 |
Performance Compensation
- Directors are eligible for non-qualified stock options; DGICA typically grants options to directors when executive options are granted. Options have 5-year terms, are granted at market closing price on the day before grant, and vest in three equal annual cumulative installments .
Annual Option Grants to Szady
| Grant Year | Grant Date | Shares | Exercise Price | Fair Value | Vesting Start | Expiration |
|---|---|---|---|---|---|---|
| 2023 | 12/21/2023 | 4,500 | $13.87 | $6,795 | 7/1/2024 | 12/21/2028 |
| 2024 | 12/19/2024 | 4,500 | $15.76 | $6,345 | 7/1/2025 | 12/19/2029 |
Other Directorships & Interlocks
| Entity | Relationship | Governance Relevance |
|---|---|---|
| Donegal Mutual Insurance Company | Szady also serves as director | Donegal Mutual controls ~70% of DGICA voting power; extensive inter-company agreements (pooling, reinsurance, expense-sharing) reviewed via Coordinating Committee; potential structural conflict to monitor . |
Expertise & Qualifications
- Certified Public Accountant; designated audit committee financial expert .
- Insurance regulatory leadership as Director of Bureau of Financial Examinations (PA Insurance Department) .
- Deep insurance finance experience, including 15 years as VP & CFO for a major professional liability insurer .
Equity Ownership
- Beneficial ownership: 16,000 shares of Class A common stock; <1% of outstanding shares (beneficial ownership includes joint/spousal holdings and options exercisable within 60 days of March 3, 2025) .
- Currently exercisable options within 60 days: DGICA notes each director holds 13,500 exercisable options within 60 days, except certain named exceptions; Szady is not listed as an exception, implying 13,500 .
- Outstanding equity awards (as of 12/31/2024):
| Award Type | Exercisable (#) | Unexercisable (#) | Exercise Price | Expiration | Stock/Units Not Vested | Market Value |
|---|---|---|---|---|---|---|
| Option | 4,500 | — | $14.43 | 12/17/2025 | — | — |
| Option | 4,500 | — | $14.39 | 12/16/2026 | — | — |
| Option | 3,000 | 1,500 | $14.09 | 12/15/2027 | — | — |
| Option | 1,500 | 3,000 | $13.87 | 12/21/2028 | — | — |
| Option | — | 4,500 | $15.76 | 12/19/2029 | — | — |
| Restricted Stock | — | — | — | — | 500 | $7,735 |
Governance Assessment
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Positives
- Independence and expertise: Szady is an independent director and a designated audit committee financial expert, bolstering oversight of financial reporting and risk .
- Engagement: Attended at least 75% of combined board/committee meetings and all directors attended the 2024 annual meeting; joined Audit Committee in April 2024 and attended 6 of 8 audit meetings, indicating active participation .
- Audit Committee scope: Committee oversees financial reporting, internal controls, enterprise risk management, and cybersecurity; explicitly reviews related-person transactions (excluding those governed by the Coordinating Committee) .
-
Risk Indicators and potential conflicts
- Controlling shareholder and interlocks: Donegal Mutual owns ~70% of combined voting power; six of ten/eleven DGICA directors also serve as Donegal Mutual directors (including Szady), creating interlocks amid extensive inter-company agreements—DGICA mitigates through a Coordinating Committee and a Special Committee comprised only of non-Donegal Mutual directors, but structural conflicts warrant monitoring .
- Board leadership: DGICA combines CEO and chairman roles and does not have a lead independent director, which can concentrate authority; DGICA notes Donegal Mutual has separated these roles .
-
Compensation and alignment
- Balanced director pay mix: Cash retainer plus modest equity via annual restricted shares and small option grants; Szady’s total director compensation rose slightly from $107,395 (2023) to $109,590 (2024), consistent with stable, non-excessive director pay .
- Ownership: Szady’s beneficial ownership is 16,000 shares (<1%); option holdings are typical for DGICA directors, with structured vesting over three years; no pledging disclosures referenced in the proxy materials reviewed .
Overall: Szady’s audit and regulatory expertise, independence, and attendance support board effectiveness; however, interlocks with the controlling shareholder and absence of a lead independent director are governance risks investors should monitor for potential influence over related-party decisions and strategic direction .