John M. Mutschink

About John M. Mutschink

Executive Vice President and Chief Administrative Officer at Employers Holdings, Inc. (EIG); designated a Named Executive Officer (NEO). In 2024 his contributions included effective management of the Company’s human resource and corporate services functions, leadership of multiple strategic initiatives, and support to the Compensation Committee . Pay is tied to (i) short-term Adjusted GAAP Calendar Year Combined Ratio and (ii) long-term three-year change in Adjusted Book Value Per Share (ABVPS) versus the 10-year U.S. Treasury; company results in 2024 included a 98.0% combined ratio, $118.6M net income ($4.71 diluted EPS), and year-end ABVPS of $50.71 (+9.8% YoY) .

Fixed Compensation

• 2024 base salary rate: $370,000; 2023: $360,000 .

2024 “All Other Compensation” detail (paid in 2024):

• Car allowance $14,400; 401(k) match $13,800; cash dividends on vested equity $41,793; life insurance premium $930; personal benefits $912; HSA $1,200; total $73,035 .

Multi-year summary compensation (values per SEC Summary Compensation Tables):

Performance Compensation

Short-term incentives (STI):

• Program design: 100% performance-based; payout only if Combined Ratio ≤ pre-set “Bonus Hurdle” (2024 hurdle: 102.0%) . 2024 combined ratio was 98.0%, enabling payouts; committee then used discretion by executive .
• Target bonus (as % of base): 55% (EVP) .

STI outcomes:

Long-term incentives (LTI):

• Mix and metrics: PSUs 65% of LTI; RSUs 35%. PSUs tied to three-year annualized change in ABVPS versus average 10Y U.S. Treasury; payout: 0% at <Treasury, 100% at Treasury+4%, 250% at Treasury+9%. RSUs vest 25% annually over four years .

Key 2024 grants (Feb 26, 2024):

• PSUs: target 4,940 units (max 12,350); grant-date fair value $229,018 .
• RSUs: 2,660 units; vest 25% on each of Mar 15, 2025/2026/2027/2028; grant-date fair value $123,318 .
• PSU performance period: Jan 1, 2024–Dec 31, 2026; payout (if any) by Mar 15, 2027, per schedule noted above .

Key 2023 grants (Mar 15, 2023) for context:

• PSUs: target 4,860 units (max 12,150); design switched to three-year ABVPS vs 10Y Treasury starting 2023 .
• RSUs: 2,620 units; 25% annual vesting on Mar 15, 2024–2027 .

Equity Ownership & Alignment

Beneficial ownership (as of Mar 24, 2025): 15,389 common shares; less than 1% of outstanding .

Outstanding and unvested equity (Dec 31, 2024):

• Unvested RSUs: 2,660 (2024 grant); 1,965 (2023); 1,350 (2022); 105 (Aug 2021); 470 (Mar 2021) .
• Unearned PSUs at maximum: 12,350 (2024 grant); 12,150 (2023 grant) .
• 2024 vesting/acquisition: 5,160 shares vested from awards; value realized $244,680 .

Vesting schedules:

• RSUs: equal 25% tranches on Mar 15 annually (2025–2028 for 2024 awards) .
• PSUs: three-year performance period; payout depends on ABVPS vs 10Y Treasury performance; 2024 PSU period 2024–2026; payable by Mar 15, 2027 if earned .

Ownership policies and restrictions:

• Executive stock ownership guideline: Executive Vice President = 3x base salary; each NEO either meets the requirement or is within the 10-year transition period .
• Anti-hedging policy applies to VPs and above; pledging of equity granted under the plan is generally prohibited .
• Clawbacks: robust misconduct clawback plus SEC Rule 10D-1 compliant recovery policy for erroneously awarded incentive-based comp to Section 16 officers (including NEOs) .

Pension/deferral:

• No defined benefit pension (SERP) and no nonqualified deferred compensation .

Employment Terms

Severance economics (Key Executive Change in Control and Severance Plan; EVP level):

• Qualifying termination outside Change-in-Control (CIC) period: 125% of (base + target bonus) paid over 15 months, plus lump-sum COBRA premiums for 15 months .
• Double-trigger CIC (termination without cause or for Good Reason within -6 to +24 months of CIC): 200% of (base + target bonus) in a lump sum, plus lump-sum COBRA premiums for 24 months .
• Conditions: release of claims; restrictive covenants including non-competition, non-solicitation, confidentiality, and cooperation .
• No excise tax gross-ups; best-net cutback applies if Section 4999 excise tax would otherwise apply .

Equity treatment on CIC/termination:

• If awards not assumed in CIC: RSUs fully vest; PSUs vest at target (or based on actual if CIC after performance period) .
• If awards assumed and post-CIC termination without cause (and for certain RSU grants, Good Reason): RSUs fully vest; PSUs treated as above .
• Death/disability: unvested RSUs fully vest; PSUs earned based on actual/defined terms; certain pro-rata provisions apply per award year .

Clawback:

• Company maintains misconduct clawback and SEC 10D-1 compliant recovery policy administered by the Compensation Committee .

Performance & Track Record

• 2024 contribution narrative: “effective management of human resource and corporate services,” leadership of multiple strategic initiatives, and support and counsel to the Compensation Committee .
• Company performance context:
  • 2023: Combined ratio 94.7%; net income $118.1M; ABVPS $47.26 (up 10.5%) .
  • 2024: Combined ratio 98.0%; net income $118.6M; ABVPS $50.71 (up 9.8%) .

Compensation Peer Group and Say‑on‑Pay

• Peer group used for 2024 pay decisions included AMERISAFE, Donegal Group, Global Indemnity, Hallmark Financial, HCI Group, Horace Mann, Kinsale, Lemonade, National Western Life, NI Holdings, Palomar, ProAssurance, RLI, Safety Insurance, Selective Insurance, SiriusPoint, Tiptree, and United Fire; Argo was removed; Lemonade added .
• Say‑on‑pay support has exceeded 95% of votes cast in each of the last five years (continuing endorsement cited by the Compensation Committee) .

Investment Implications

• Alignment: A high proportion of at‑risk pay. STI is geared to underwriting discipline (combined ratio ≤ threshold), while PSUs require multi‑year ABVPS outperformance versus the 10‑year U.S. Treasury, directly tying realizable pay to profitable growth and capital compounding .
• Retention and potential selling cadence: Material unvested RSUs (next tranches vest Mar 15 annually through 2028) and multi‑year PSUs (2024–2026 performance with potential distribution by Mar 15, 2027) encourage retention; periodic RSU settlements could add incremental selling pressure around vest dates, subject to insider trading windows .
• Governance risk mitigants: No CIC tax gross‑ups, robust clawbacks, ownership requirements, and anti‑hedging/anti‑pledging policies reduce shareholder‑unfriendly risk and enhance alignment .
• Downside/COSO risk: Severance of 125% (non‑CIC) and 200% (double‑trigger CIC) of salary+target bonus for EVPs is competitive but not excessive; encourages focus during transitions while avoiding golden parachute optics .

Appendices

2024 Grants and Outstanding Awards Detail (selected)