Jeffrey D. Miller
About Jeffrey D. Miller
Jeffrey D. Miller serves as Executive Vice President and Chief Financial Officer of Donegal Group Inc. (DGICA) and is a named executive officer in the company’s proxy statements. His continuous service as EVP & CFO is documented across multiple 10-K certifications from 2015 through 2024, evidencing long-tenured financial leadership at DGICA . DGICA’s operating performance during his recent tenure inflected positively in 2024: total revenues grew 6.7% year over year to $989.6 million and net income rose to $50.9 million from $4.4 million in 2023, while the combined ratio improved to 98.6 from 104.4 and the Class A TSR value rose to 130.65 (from a $100 base at 12/31/2019) .
Past Roles
| Organization | Role | Years (documented) | Strategic impact |
|---|---|---|---|
| Donegal Group Inc. | Executive Vice President & Chief Financial Officer | 2015–2024 (documented across SEC filings) | Principal financial officer; SEC 10‑K certification signatory underscoring responsibility for fair presentation of financial condition and results |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Donegal Mutual Insurance Company | Director | Current as of 2024 | Governance role at DGICA’s controlling affiliate; receives director fees and restricted stock via Donegal Mutual’s board service |
Fixed Compensation
Multi-year compensation elements for Miller (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $618,000 | $643,000 | $643,000 |
| Annual Cash Bonus (AIP) | $157,443 | $0 | $466,175 |
| Long-Term Cash Bonus (3-yr plan) | $92,614 | $0 | $0 |
| Option Awards (grant-date FV) | $31,080 | $31,710 | $31,020 |
| Stock Awards | $7,145 | $7,100 | $6,995 |
| All Other Compensation | $108,575 | $110,300 | $111,425 |
| Total Compensation | $1,014,857 | $792,110 | $1,258,615 |
Notes:
- Management withheld AIP bonuses for 2023 across NEOs due to plan thresholds; AIP resumed in 2024 on improved performance .
Performance Compensation
2024 Annual Incentive Plan (AIP) structure and outcomes:
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual |
|---|---|---|---|---|---|
| Commercial Lines Premium Growth | 15% | 0.5% | 2.0% | 3.5% | 4.3% |
| Adjusted Statutory Combined Ratio | 65% | 100.0% | 97.0% | 94.0% | 96.9% |
| Operating Return on Equity | 20% | 7.5% | 9.0% | 10.5% | 8.6% |
- Vesting/Equity: On December 19, 2024, Miller received 22,000 stock options (5-year term) at $15.76, vesting in three equal annual cumulative installments beginning July 1, 2025 .
- Payout: Miller’s 2024 AIP payout was $466,175, reflecting achievement primarily on commercial lines growth and underwriting results .
- Long-term plan: 2023–2025 cash LTIP tied to average adjusted statutory combined ratio; must be employed on 12/31/2025 to receive payout .
Option exercise activity (2024):
| Item | 2024 |
|---|---|
| Options exercised | 85,000 shares |
| Value realized on exercise | $106,920 |
Equity Ownership & Alignment
Ownership and awards as of March 3, 2025 / December 31, 2024:
| Item | Detail |
|---|---|
| Beneficial ownership – Class A | 129,715 shares (less than 1% of Class A outstanding) |
| Beneficial ownership – Class B | 584 shares |
| Options exercisable (within 60 days of 3/3/2025) | 66,000 Class A shares |
| Outstanding options (12/31/2024) | Exercisable: 24,000 @ $14.43 (exp. 12/17/2025); 21,000 @ $14.39 (12/16/2026); 14,000 @ $14.09 (12/15/2027); 7,000 @ $13.87 (12/21/2028). Unexercisable: 7,000 @ $14.09 (12/15/2027); 14,000 @ $13.87 (12/21/2028); 22,000 @ $15.76 (12/19/2029) |
| Unvested stock awards | 500 Class A shares (market value $7,735 at 12/31/2024) |
| Hedging/Pledging | Company and Donegal Mutual have an insider trading policy, but no anti-hedging policy; no specific pledging disclosures noted |
Signal watch:
- Upcoming vesting (July each year 2025–2027) on 22,000 options may create periodic sell pressure around vest dates, subject to personal decisions and blackout windows .
Employment Terms
Key contractual terms for Miller’s employment and potential separation economics:
| Provision | Details |
|---|---|
| Agreement term | Initial 42-month term for Burke and Miller; auto-renews annually; current term for Miller expires March 31, 2026 |
| Participation | Eligible for AIP and LTIP; standard benefits; minimum base salary floor per agreement |
| Non-compete / Non-solicit | Non-compete for two years post-termination; includes confidentiality and non-solicitation provisions |
| Change-of-Control (CoC) definition | Includes >25% voting power acquisition; certain mergers; sale substantially all assets; board composition change per defined tests |
| CoC severance trigger | If terminated within 12 months after a CoC, by company without cause, or by executive with or without Good Reason, severance is paid |
| Severance multiple | 36 months of base salary; plus additional 6 months for Burke and Miller (paid after initial 36 months) |
| Benefits continuation | Company-paid medical/health/disability/life premiums for 36 months (assumes no premium rate increase) |
| Excise tax gross-up | Company obligated to pay any excise taxes in respect of parachute payments (shareholder-unfriendly) |
| Clawback | Not specifically disclosed in proxy narrative |
Estimated amounts potentially payable to Miller as of 12/31/2024 (illustrative assumptions in proxy):
| Event | Severance Benefits ($) | Stock Options ($) | Other Benefits ($) | Total ($) |
|---|---|---|---|---|
| Voluntary Termination | — | 78,160 | — | 78,160 |
| Involuntary-for-Cause | — | 78,160 | — | 78,160 |
| Involuntary (without Cause) | 2,250,500 | 78,160 | 51,819 | 2,380,479 |
| Change-in-Control + termination | 2,250,500 | 78,160 | 51,819 | 2,380,479 |
Performance & Track Record
Company-level outcomes that underpin incentive pay linkages:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total Revenues ($mm) | $848.2 | $927.3 | $989.6 |
| Net Income ($mm) | ($2.0) | $4.4 | $50.9 |
| Combined Ratio (%) | 103.3 | 104.4 | 98.6 |
| Class A TSR value ($100 base at 12/31/2019) | 109.16 | 112.65 | 130.65 |
Context:
- Pay-for-performance: AIP is tied to commercial lines growth, underwriting profitability (adjusted statutory combined), and operating ROE; LTIP is tied to multi-year adjusted statutory combined ratio .
- 2024 improvement drove AIP payouts after 2023 plan thresholds were not met (no NEO bonuses for 2023) .
Compensation Structure Analysis
- Mix shift and alignment: 2024 compensation is more cash-heavy vs 2023 (AIP restored on stronger underwriting and growth), while equity grant values remained consistent YoY, indicating leverage to operating performance rather than equity re-pricing .
- Options, not RSUs/PSUs: Long-term equity is delivered via 5-year options vesting over 3 years; company policy does not reprice options without stockholder approval (mitigates repricing risk) .
- Governance flags: Employment agreements include excise tax gross-ups and allow executive-initiated termination within 12 months of CoC to receive severance; company has not adopted an anti-hedging policy (potential misalignment risk) .
Compensation Peer Group (for benchmarking)
For 2024 compensation review, the company referenced: Cincinnati Financial, Erie Indemnity, The Hanover Insurance Group, Horace Mann Educators, Kemper, ProAssurance, RLI, Selective Insurance Group, and United Fire Group .
Say-on-Pay & Shareholder Feedback
- In 2023, DGICA held say‑on‑pay and frequency votes; as a controlled company (Donegal Mutual holding ~71% of combined voting power), the proxy indicated Donegal Mutual would support three‑year frequency and approve say‑on‑pay; specific approval percentages were not disclosed in the proxy .
Risk Indicators & Red Flags
- Excise tax gross-up on golden parachutes (shareholder-unfriendly) .
- No anti‑hedging policy adopted (potential misalignment) despite existence of insider trading policy and procedures .
- Controlled company structure reduces external governance pressure; majority voting power by Donegal Mutual influences outcomes including say‑on‑pay .
Investment Implications
- Incentive design is tightly coupled to underwriting profitability and growth; 2024 payouts appear supported by improved combined ratio and revenue growth, suggesting alignment in upcycles .
- Watch near-term insider supply: sizable option exercises in 2024 and a three‑year vesting ramp (2025–2027) could create episodic selling pressure, although subject to policy windows .
- Governance discount likely persists: excise tax gross‑ups, permissive CoC severance triggers, and lack of anti‑hedging policy may weigh on governance quality assessments even as performance improves .
- Tenured CFO continuity is a positive for execution; multi‑year documentation of his CFO role aligns with the 2024 operating rebound, but investors should monitor 2025–2026 LTIP outcomes tied to sustained underwriting profitability .