Jack L. Hess
About Jack L. Hess
Jack L. Hess, age 77, is an independent Class A director of Donegal Group Inc. (DGICA), serving since 2011 with his current term expiring in 2026. He is a certified public accountant with more than 40 years’ experience, retired as partner of Bertz, Hess & Co., LLP on December 31, 2015 (partner since 1982), and is managing partner of Hempland Associates, a real estate investment partnership in Lancaster County, PA. He has been a director of Donegal Mutual Insurance Company since 2009 and a director of Conestoga Title Insurance Company (a Donegal Mutual subsidiary) since 2006; he is designated as a financial expert on DGICA’s Audit Committee and is considered independent under SEC/PHCA rules.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Bertz, Hess & Co., LLP (public accounting firm) | Partner | 1982–2015 | Auditing/tax expertise; retired 12/31/2015 |
| Trout, Ebersole & Groff, LLP (peer director biography context) | — | — | Context only (Hess’s peers designated financial experts) |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Donegal Mutual Insurance Company | Chairman of the Board | Chairman as of proxy date; director since 2009 | Serves on Donegal Mutual Compensation Committee (members as of 2025: Anderson, Callahan (Chair), Hess, Kraft); joint meetings with DGICA comp committee |
| Conestoga Title Insurance Company (Donegal Mutual subsidiary) | Director | Since 2006 | Title insurance oversight experience |
| Hempland Associates (real estate investment partnership) | Managing Partner | Ongoing | Real estate investment management |
Board Governance
- Committee assignments and chair roles (2025):
- Executive Committee: Burke (Chair), Hess, Kraft.
- Audit Committee: Hess, Huber (Chair), Moore, Schatz, Szady; all satisfy SEC/PHCA independence; Hess is designated financial expert.
- Nominating Committee: Hess, Kraft, Mahan (Chair).
- Compensation Committee: Hess (Chair), Kraft, Mahan, Moore; meets jointly at times with Donegal Mutual’s committee.
- Independence and leadership:
- Other than the CEO/Chairman (Burke), all DGICA directors are independent; DGICA does not have a lead independent director; Hess serves as Chairman at Donegal Mutual (separating roles between entities).
- Majority of DGICA directors also serve on Donegal Mutual’s board due to Donegal Mutual’s majority voting control (structural interlock).
Attendance and Engagement (2024)
| Committee | Meetings Held | Hess Meetings Attended |
|---|---|---|
| Executive | 12 | 12 |
| Audit | 8 | 8 |
| Nominating | 2 | 2 |
| Compensation | 3 | 3 |
- All directors attended ≥75% of board and committee meetings; all attended the 2024 annual meeting.
Fixed Compensation
Director Retainer and Meeting Fees Structure (for 2024/2025 cycle)
| Type | Amount | Form/Notes |
|---|---|---|
| Base Annual Retainer | $97,735 | $90,000 cash + 500 Class A restricted shares on first business day of 2025 (estimated at $7,735 based on 12/31/2024 close) |
| Per board meeting beyond 5 per year | $500 | Cash |
| Per Compensation Committee meeting | $300 | Cash |
| Per Executive Committee meeting | $300 | Cash |
| Per Coordinating/Nominating/Special Committee meeting | $500 | Cash |
| Per Audit Committee meeting | $750 | Cash |
2024 Non-Officer Director Compensation (Hess)
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Total ($) |
|---|---|---|---|---|
| Jack L. Hess | 110,000 | 6,995 | 6,345 | 123,340 |
Performance Compensation
Annual Equity Grants to Directors
| Grant Type | Grant Date | Shares/Units | Exercise Price | Fair Value | Vesting | Expiration |
|---|---|---|---|---|---|---|
| Restricted Stock | First business day of year | 500 | — | $6,995 (Jan 2024 issuance) | Standard director award; annual | — |
| Stock Option | 12/19/2024 | 4,500 | $15.76 | $6,345 (option FV per director) | Vests in 3 equal annual cumulative installments commencing 7/1/2025 | 12/19/2029 |
DGICA typically grants director options alongside executive option grants; five-year term, strike set at the closing market price on the day before grant; directors also receive annual 500-share restricted stock awards.
Outstanding Director Equity Awards (as of 12/31/2024)
| Award | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration | Unvested Stock (#) | Market Value ($) |
|---|---|---|---|---|---|---|
| Options | 4,500 | — | 14.43 | 12/17/2025 | — | — |
| Options | 4,500 | — | 14.39 | 12/16/2026 | — | — |
| Options | 3,000 | 1,500 | 14.09 | 12/15/2027 | — | — |
| Options | 1,500 | 3,000 | 13.87 | 12/21/2028 | — | — |
| Options | — | 4,500 | 15.76 | 12/19/2029 | — | — |
| Restricted Stock | — | — | — | — | 500 | 7,735 |
Other Directorships & Interlocks
| Company | Role | Committee Roles | Interlock Notes |
|---|---|---|---|
| Donegal Mutual Insurance Company | Chairman; Director since 2009 | Compensation Committee member (DG Mutual’s comp committee reconstituted in 2025: Anderson, Callahan (Chair), Hess, Kraft) | Donegal Mutual controls DGICA’s director elections; majority of DGICA directors also serve on Donegal Mutual’s board (structural interlock). |
| Conestoga Title Insurance Company | Director since 2006 | — | Subsidiary of Donegal Mutual. |
- Compensation Committee Interlocks: Proxy states no member of DGICA’s compensation committee is a former/current officer of DGICA or Donegal Mutual, and no member has interlocking relationships as defined by SEC rules.
Expertise & Qualifications
- Designated financial expert on DGICA’s Audit Committee; extensive accounting experience.
- CPA for 40+ years; auditing and tax expertise; business management credentials (long-tenured accounting firm partner; managing partner in real estate).
- Committee leadership (Compensation Committee Chair), experience overseeing executive and broad employee compensation and benefits.
Equity Ownership
| Holder | Class A Shares Beneficially Owned | % of Class A | Class B Shares Beneficially Owned | % of Class B |
|---|---|---|---|---|
| Jack L. Hess | 116,415 | <1% | — | — |
- As of March 3, 2025, footnote indicates Hess does not hold any currently exercisable stock options, unlike most directors; directors generally hold currently exercisable options to purchase 13,500 shares, except Hess.
- Note: Outstanding award table above reflects positions as of 12/31/2024, which included exercisable options; the beneficial ownership footnote as of 3/3/2025 shows no currently exercisable options for Hess, implying potential exercises or changes after year-end. Further Form 4 review was attempted but insider-trades data retrieval could not be completed due to an authorization error.
Governance Assessment
- Independence and effectiveness: Hess is independent and serves on all four key committees (Exec, Audit, Nominating, Compensation), chairing Compensation; he is a designated audit financial expert and maintained perfect committee attendance in 2024—indicative of strong engagement.
- Structural interlocks: Donegal Mutual’s majority control results in a majority of DGICA directors (including Hess) also serving on Donegal Mutual’s board; while common in controlled companies, this is a governance risk that investors should monitor (coordinating committee oversees DGICA–Donegal Mutual transactions separately from audit committee).
- Related-party oversight: Audit Committee annually reviews related person transactions excluding those between Donegal Mutual and DGICA, which require Coordinating Committee approval—clear delineation helps mitigate conflicts, though investors should assess effectiveness.
- Compensation alignment: Director pay is primarily cash with modest equity (500-share RSU plus small option grant with multi-year vesting), supporting alignment but with limited “at-risk” exposure typical for non-employee directors.
- Hedging policy: DGICA has not adopted a policy restricting hedging by employees, officers, directors, or designees—potential alignment concern versus best practices at many peers.
- Legal proceedings: Proxy discloses no material proceedings involving directors or major holders as of March 17, 2025.
Overall signal: High attendance and committee leadership (including Compensation Chair and Audit financial expert) support board effectiveness; structural interlocks with the controlling shareholder (Donegal Mutual) and absence of a hedging policy merit continued monitoring for conflicts and investor alignment.