Sanjay Pandey
About Sanjay Pandey
Executive Vice President and Chief Information Officer (CIO) of Donegal Group Inc. (DGI) and Donegal Mutual since 2025; previously Senior Vice President & CIO from 2013–2025 and other roles at the company from 2000–2013; age 58 . Company performance during the latest year includes total revenues of $989.6 million (+6.7% YoY), net income of $50.9 million, and improvement in combined ratio to 98.6; DGI’s Class A TSR (value of $100 since 12/31/2019) rose to $130.65 in 2024 from $112.65 in 2023 . His CIO tenure coincides with a multi‑year systems modernization program (workers’ comp in 2020, personal lines in 2021, multiple commercial lines in 2023, homeowners conversions in 2024, remaining lines in 2025, full completion targeted 2026) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Donegal Mutual & Donegal Group Inc. | EVP & CIO | 2025–present | Executive technology leadership |
| Donegal Mutual & Donegal Group Inc. | SVP & CIO | 2013–2025 | CIO tenure overlaps systems modernization across major lines and platforms (2020–2026 roadmap) |
| Donegal Mutual & Donegal Group Inc. | Various roles | 2000–2013 | Progressive leadership roles prior to CIO |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No public external directorships or roles disclosed for Pandey in company filings reviewed |
Fixed Compensation
| Item | FY 2022 | FY 2023 | FY 2024 | Current/Base |
|---|---|---|---|---|
| Base Salary ($) | 468,000 | 488,000 | 488,000 | 425,000 (listed annual base salary in 2025 officer pay table) |
| All Other Compensation ($) | 18,075 | 19,800 | 20,365 | — |
Notes: “All Other Compensation” primarily reflects 401(k) match; no pensions or deferred compensation plans in 2022–2024 .
Performance Compensation
Annual Cash Incentive – Plan Design and 2024 Outcome
| Metric | Weight | Threshold | Target | Maximum | Actual Result (2024) | Payout Notes |
|---|---|---|---|---|---|---|
| Commercial Lines Direct Premium Growth | 15% | 0.5% | 2.0% | 3.5% | 4.3% | Contributed to 2024 bonus funding |
| Adjusted Statutory Combined Ratio | 65% | 100.0% | 97.0% | 94.0% | 96.9% | Contributed to 2024 bonus funding |
| Operating Return on Equity | 20% | 7.5% | 9.0% | 10.5% | 8.6% | Contributed to 2024 bonus funding |
| Individual Bonus Potential (as % of Base) | — | 40% | 70% | 100% | — | Range applied across NEOs |
| Actual Annual Cash Bonus – Pandey ($) | — | — | — | — | 353,800 (FY 2024) | 2023 bonus was $0 given plan threshold not met |
Plan funding for 2024 based on commercial lines growth, underwriting results (adjusted statutory combined ratio) and DGI operating ROE; no bonuses paid for 2023 under the plan .
Long-Term Incentive – Stock Options (Equity)
| Grant Year | Grant Date | Award Type | Shares | Exercise Price | Vesting | Expiration |
|---|---|---|---|---|---|---|
| 2024 | 12/19/2024 | Non-qualified options | 20,000 | $15.76 | 1/3 annually starting 7/1/2025 | 12/19/2029 (5-year term noted for options) |
| 2023 | 12/21/2023 | Non-qualified options | 18,000 | $13.87 | 1/3 annually starting 7/1/2024 | 12/21/2028 |
Notes: DGI uses predominantly stock options (not RSUs/PSUs) for executive equity; grants generally vest over three years and are exercisable for five years; no automatic acceleration on business combinations unless specified; acceleration on death/disability .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Class A) | 91,903 shares as of March 3, 2025; <1% of outstanding |
| Options – Exercisable (12/31/2024) | 57,000 total: 21,000 @ $14.43 (exp 12/17/2025), 18,000 @ $14.39 (exp 12/16/2026), 12,000 @ $14.09 (exp 12/15/2027), 6,000 @ $13.87 (exp 12/21/2028) |
| Options – Unexercisable (12/31/2024) | 38,000 total: 6,000 @ $14.09 (exp 12/15/2027), 12,000 @ $13.87 (exp 12/21/2028), 20,000 @ $15.76 (exp 12/19/2029) |
| Option Exercises (Realized) | 2024: 75,000 shares exercised; value realized $48,603. 2023: 35,000 shares; value realized $57,015 |
| Pledging/Hedging | Company discloses no adopted policy restricting hedging/offsetting transactions for employees/officers/directors; no pledging disclosed for Pandey |
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment Agreement Term | Auto-renewing agreements; current term for Pandey expires September 30, 2025 (36-month initial term with annual auto-extensions unless notice not to renew) |
| Participation & Benefits | Customary indemnification, confidentiality and non-solicitation; participation in incentive and benefit plans |
| Non-Compete | Specifically included for CEO (Burke) and CFO (Miller); not disclosed for Pandey |
| Severance – Involuntary Termination (no CIC) | 36 months of base salary paid in 36 monthly installments; continuation value of medical/health/disability/life insurance premiums for 36 months; example estimate for Pandey: $1,464,000 severance + $56,217 benefits; options valued at $67,440 in the disclosure table |
| Change‑in‑Control (CIC) Economics | If employment terminates within 12 months after a CIC (by company without Cause, or by executive with or without Good Reason): same 36-month salary multiple; same 36-month benefits; potential excise tax gross‑up per agreement |
| Clawbacks/Deferred Comp/Pension | No non‑qualified deferred comp or defined benefit pensions for NEOs in 2022–2024; no specific clawback policy disclosure located in reviewed sections |
Multi-Year Compensation Summary (Named Executive Officer)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 468,000 | 488,000 | 488,000 |
| Annual Cash Bonus ($) | 119,252 | — | 353,800 |
| Long-Term Cash Bonus ($) | 70,148 | — | — |
| Stock Awards ($) | — | — | — |
| Option Awards ($) | 26,640 | 27,180 | 28,200 |
| All Other Compensation ($) | 18,075 | 19,800 | 20,365 |
| Total ($) | 702,115 | 534,980 | 890,365 |
Performance & Track Record
- 2024 operating performance improved materially: total revenues $989.6 million (+6.7% YoY), net income $50.9 million, operating metrics (combined ratio 98.6) supportive of incentive payouts tied to underwriting results and operating ROE .
- Class A TSR (value of $100 since 12/31/2019) rose to $130.65 in 2024 from $112.65 in 2023; peer group TSR at $136.71 in 2024 .
- Multi‑year technology modernization (workers’ comp 2020; personal lines 2021; commercial lines and dwelling fire/homeowners conversions 2023–2024; remaining lines slated for 2025; full conversion targeted 2026) supports longer‑term efficiency and product agility objectives under his CIO remit .
Compensation Structure Observations
- Pay mix shifted back to performance in 2024: after no 2023 bonuses, NEOs received ~$2.093 million in 2024 cash incentives tied to commercial lines growth, adjusted statutory combined ratio, and operating ROE .
- LTI design remains option‑only (vs RSUs/PSUs), vesting over three years with 5‑year exercise term; aligns realized value to stock price appreciation but offers shorter duration vs typical 7–10 year terms, potentially increasing exercise/sell cadence near expiry .
- Peer benchmarking used Willis Towers Watson and a nine‑company insurance peer set in 2024 review (CINF, ERIE, THG, HMN, KMPR, PRA, RLI, SIGI, UFCS) .
Investment Implications
- Positive alignment: 2024 bonus plan metrics (underwriting results and operating ROE) and actual results indicate pay-for-performance calibration; Pandey’s 2024 cash bonus ($353,800) reflects company-level achievements across weighted metrics .
- Retention and selling pressure: Significant option activity (75,000 shares exercised in 2024; 35,000 in 2023) and a 5‑year option term may drive periodic exercise-related supply; continued sizable unexercisable options (38,000 at YE 2024) vest through 2027–2029, creating scheduled future overhang/vesting events .
- Governance red flags to monitor: (i) CIC severance at 3x salary with eligibility upon CIC plus termination (including executive resignation within 12 months) and potential excise tax gross‑up; (ii) lack of a stated anti‑hedging policy; both diminish alignment quality vs best practice .
- Ownership and alignment: Pandey’s beneficial ownership (91,903 shares; <1%) plus 57,000 currently exercisable options provide “skin in the game,” but overall insider ownership across NEOs remains modest; no pledging disclosed .