W. Daniel DeLamater
About W. Daniel DeLamater
Executive Vice President and Chief Operating Officer (COO) of Donegal Group Inc. (DGI) and Donegal Mutual since January 1, 2024; age 52. Prior roles include Senior Vice President (SVP) and Head of Field Operations & National Accounts (2022–2024), SVP National Accounts (2020–2022), and President of Southern Mutual Insurance Company since 2016, with prior roles at Southern Mutual dating back to 2000 . 2024 corporate performance improved materially: revenues +6.7% to $989.6M and net income rose to $50.9M (from $4.4M in 2023); Class A stock ended 2024 at $15.47 (+10.6% YoY); combined ratio improved to 98.6; 5-year Class A TSR proxy metric shows $130.65 value of $100 base (peer $136.71) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Donegal Group Inc. / Donegal Mutual | EVP & Chief Operating Officer | 2024–Present | Oversees Claims, Enterprise Analytics, Field Ops & National Accounts, HR, Internal Audit & Risk, Investments, Legal to support scaling products/systems/processes . |
| Donegal Mutual | SVP & Head of Field Operations & National Accounts | 2022–2024 | Led field ops and national accounts to strengthen agency relationships; platform for COO elevation . |
| Donegal Mutual | SVP, National Accounts | 2020–2022 | Drove national agency relationship efforts via newly formed National Accounts Team . |
| Southern Mutual Insurance Company (Donegal Insurance Group member) | President | 2016–Present | Leadership of member company within pooling structure . |
| Southern Mutual Insurance Company | Multiple roles | 2000–2016 | Progressive underwriting/marketing/management roles prior to presidency . |
External Roles
- Not disclosed.
Fixed Compensation
| Year | Base Salary ($) | Stock Awards ($) | Option Awards ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 547,000 | — | 28,200 (12/19/2024 grant, $15.76 strike) | 20,425 (401k match) | 992,284 |
Notes:
- No RSU grants to NEOs; only directors receive annual 500-share restricted stock awards .
- Options vest in three equal annual installments beginning July 1, 2025; five-year term .
Performance Compensation
| Component | Metric(s) | Weight | 2024 Target(s) | 2024 Actual | Payout Mechanics | 2024 Payout ($) |
|---|---|---|---|---|---|---|
| Annual Cash Incentive | Commercial lines direct premium growth | 15% | Target 2.0% (range 0.5%–3.5% ladder) | 4.3% | Formulaic by metric×weight; committee could reduce but not increase | 396,659 |
| Adjusted statutory combined ratio (Donegal Insurance Group) | 65% | Target 97.0% (ladder 100%→94%) | 96.9% | |||
| Operating ROE (Company) | 20% | Target 9.0% (ladder 7.5%→10.5%) | 8.6% | |||
| Long-Term Cash Incentive (2023–2025 cycle; pays 2026) | 3-yr average adjusted statutory combined ratio | — | Payout schedule: <94%=85% of salary; ≥99–99.99%=15%; ≥100%=none (graduated scale) | In progress (requires employment on 12/31/2025) | Committee may reduce, not increase | — |
Additional plan parameters:
- Incentive opportunity schedule for NEOs ranges from 40% (threshold) to 100% (maximum) of base salary; applied per metric and weighting .
- 2025 annual plan approved with same three metrics and committee discretion .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 49,495 Class A shares; <1% of outstanding . |
| Options exercisable within 60 days (as of 3/3/2025) | 48,000 Class A options . |
| Outstanding options (12/31/2024) | 12,000 @ $14.43 exp. 12/17/2025; 18,000 @ $14.39 exp. 12/16/2026; 12,000 ex./6,000 unex. @ $14.09 exp. 12/15/2027; 6,000 ex./12,000 unex. @ $13.87 exp. 12/21/2028; 20,000 unex. @ $15.76 exp. 12/19/2029 (all 5-year term) . |
| 2024 option activity | Exercised 20,000 options; value realized $12,989 . |
| Ownership guidelines | Not disclosed. |
| Hedging/pledging | Company states it has not adopted any practice or policy regarding employees’ ability to engage in hedging transactions; no pledging disclosure noted . |
Potential insider selling pressure:
- Significant currently exercisable/options becoming exercisable (48,000 within 60 days; additional unexercisable tranches vest annually) could create periodic supply upon vest/exercise .
Employment Terms
- Agreement term: Initial 36 months; auto-renews one year unless either party gives ≥60 days’ notice. Current term expires December 31, 2025 (for DeLamater) .
- Covenants: Indemnification, confidentiality, non-solicitation; non-compete applies only to Burke and Miller (not DeLamater) .
- Incentive eligibility: Annual and long-term executive incentive plans; equity option awards under stock plans .
- Severance/change-of-control economics (estimated as of 12/31/2024):
- Involuntary Termination (without cause): 36 months of base salary ($1,641,000), continuation-equivalent benefits ($65,019), plus option value $58,080; total $1,764,099 .
- Change-in-Control with termination within 12 months (double trigger; includes voluntary or involuntary by company per definition): same as above; total $1,764,099 .
- Clawback/tax gross-ups: No clawback policy disclosure; agreement provides for potential excise tax amounts in certain cases (as specified by agreements) .
- Pension/Deferred comp: None; company offers 401(k) match ($20,425 in 2024) .
Compensation Structure Analysis
- Mix shift and 2024 outcomes: After zero bonuses in 2023 across NEOs, 2024 paid formulaic cash bonuses tied to underwriting (combined ratio), commercial growth, and operating ROE; DeLamater received $396,659, reflecting substantial operating improvement; stock options were granted with 3-year vesting and a 5-year term, maintaining performance sensitivity to stock price appreciation .
- Equity design: Options only (no RSUs/PSUs) for executives align upside to share price but provide less retention certainty than RSUs; vesting schedule creates steady retention through 2027–2029 .
- Peer benchmarking: 2024 compensation review used nine insurers (CINF, ERIE, THG, HMN, KMPR, PRA, RLI, SIGI, UFCS) to assess competitiveness .
- Governance flag: Absence of a formal hedging prohibition policy is noted; the proxy states no adopted policy regarding hedging instruments for employees/officers/directors .
Investment Implications
- Alignment: Annual and long-term cash incentives tied to core underwriting and ROE metrics indicate pay-for-performance aligned with franchise value drivers (growth quality and profitability) .
- Retention risk: Low near-term risk—contract through 12/31/2025 with auto-renewal, strong double-trigger change-in-control and robust 3x salary severance in both involuntary and CoC termination scenarios; multi-year option vesting further anchors retention .
- Trading signals: Large bank of exercisable/outstanding options (48k exercisable within 60 days; more vesting annually) and a history of exercises (20k in 2024) suggest periodic sale potential around vest and liquidity windows; monitor Form 4s for cadence/size .
- Performance track: 2024’s improved combined ratio (98.6), revenue growth (+6.7%), and net income recovery ($50.9M) supported high-plan payouts and could sustain incentive momentum into the 2023–2025 LTI calculation; stock advanced 10.6% in 2024 and 5-year Class A TSR (proxy PVP metric) stands at $130.65 versus peer $136.71, implying scope to close relative performance gaps if underwriting improvements persist .
Net: Compensation levers emphasize underwriting discipline and profitable growth; retention protections are strong; the option-heavy mix amplifies sensitivity to share price but introduces potential selling pressure around vestings. Monitoring combined ratio trajectory and insider Form 4s is key for trading and governance signaling .