Michael Pedraja
Employers HoldingsAbout Michael Pedraja
Michael A. Pedraja, 56, was appointed Executive Vice President and Chief Financial Officer of Employers Holdings, Inc. (EIG) in March 2025; he joined as CFO-Designate effective February 3, 2025, and assumed CFO responsibilities on or about March 31, 2025 . He brings 30+ years of insurance-focused finance experience, including Group CFO at Ariel Re Services, SVP & Treasurer at Allstate, and prior investment banking roles at Aon Securities, Barclays, and Credit Suisse; he holds a B.S. in Commerce from DePaul University . Company performance context heading into his tenure: 2024 net written premium of $769.5M, net investment income $107.0M, net income $118.6M (diluted EPS $4.71), Adjusted GAAP Calendar Year Combined Ratio 98.0%, ABVPS $50.71; TSR value of $147.79 on a $100 base from 2019 to 2024, versus peer group TSR of $227.67 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ariel Re Services | Group Chief Financial Officer | 2021–2024 | Led global reinsurance finance; deep insurance/reinsurance expertise |
| The Allstate Corporation | Senior Vice President & Treasurer | 2019–2021 | Corporate treasury leadership for a large P&C carrier |
| Aon Securities; Barclays; Credit Suisse | Investment banker (insurance focus) | 20+ years (not individually disclosed) | Advised on insurance capital and transactions across leading platforms |
External Roles
- None disclosed in company filings .
Fixed Compensation
| Component | 2025 Terms |
|---|---|
| Annual Base Salary | $535,000 |
| Target Annual Bonus | 70% of base salary |
| Long-Term Incentive (LTI) Target Value | $600,000; awards in the same form as other EVPs |
| Sign-on Bonus | $525,000 (subject to repayment upon certain terminations within 1 year) |
Performance Compensation
Short-Term Incentive (Annual Cash Bonus)
| Metric | Target/Hurdle | Payout Range | Notes |
|---|---|---|---|
| Adjusted GAAP Calendar Year Combined Ratio | Bonus Hurdle: ≤102.0% | 0%–250% of target, at Committee discretion if hurdle achieved | Aligns with underwriting profitability and operating discipline |
Long-Term Incentive Design (Company Program Reference)
| Instrument | Metric | Threshold | Target | Maximum | Performance Period | Settlement Timing |
|---|---|---|---|---|---|---|
| PSUs | Annualized 3-year change in ABVPS over 10-Year U.S. Treasury | < Treasury +0.0% → 0% payout | Treasury +4.0% → 100% payout | Treasury +9.0% → 250% payout | 2024–2026 (example from current program) | By March 15, 2027 |
| RSUs | Service-based vesting | — | — | — | 4-year schedule | Vests 25% on each of March 15, 2025, 2026, 2027, 2028 (2024 grant schedule, indicative of program) |
- Make-whole inducement: PSU award with $1,200,000 target value granted on the same date as 2025 LTI awards, with the same vesting conditions and terms as 2025 PSUs (to offset forfeited equity at prior employer) .
- EIG’s LTI mix emphasizes PSUs and RSUs; program weighting in 2024 was ~65% PSUs / 35% RSUs for NEOs, reflecting performance orientation .
Clawback, Hedging/Pledging
- Robust clawbacks covering cash and equity incentives, plus compensation recovery policy compliant with SEC Rule 10D-1 and NYSE listing standards for Section 16 officers .
- Hedging and pledging of company equity prohibited for Vice President and above (includes EVPs/CFO) .
Equity Ownership & Alignment
| Item | Details |
|---|---|
| Stock Ownership Guidelines | EVP: 3x base salary; 10-year window to achieve; unearned PSUs and unexercised options excluded; guideline compliance evaluated post-appointment |
| Beneficial Ownership | Not disclosed for Pedraja in 2025 proxy (he was appointed in 2025; 2024 NEOs shown exclude him) |
| Options | No stock options granted in 2024; EIG program focused on RSUs/PSUs |
| Pledging/Hedging | Prohibited; trading subject to insider compliance policy |
Employment Terms
| Term | Details |
|---|---|
| Appointment Timeline | CFO-Designate effective February 3, 2025; appointed EVP & CFO March 19, 2025; expected to assume CFO role on or about March 31, 2025 |
| Offer Letter | Base $535k; bonus target 70% of base; LTI target $600k (form matches EVPs); $525k sign-on (repayable under certain conditions within 1 year); $1.2M target PSU make-whole award with 2025 PSU terms |
| Severance (Non-CIC) | EVP: 125% of (base + target bonus) paid over 15 months; lump-sum COBRA-equivalent premiums for 15 months; subject to release and restrictive covenants |
| Severance (CIC Period) | EVP: 200% of (base + target bonus) paid lump sum; lump-sum COBRA-equivalent premiums for 24 months; best-net cut provision (no excise tax gross-up) |
| Equity Treatment (Change in Control) | If awards not assumed: RSUs vest; PSUs pay at target (or actual if performance period completed). If assumed and terminated without cause (or Good Reason where applicable): RSUs vest; PSUs treated as above |
| Bonus Treatment (CIC) | If employed through CIC consummation: prorated bonus; 250% of target if threshold met at transaction; 100% if threshold not met |
| Clawbacks/Policies | Comprehensive clawbacks; anti-hedging; anti-pledging; regular annual equity grant cadence; grant timing controls |
Performance & Track Record
- Strategic credentials: Group CFO at Ariel Re, SVP & Treasurer at Allstate, and >20 years of insurance investment banking—combining operating finance, capital markets, and sector expertise .
- Company performance context: 2024 Adjusted GAAP Calendar Year Combined Ratio 98.0%; ABVPS $50.71; net written premium $769.5M; net income $118.6M (diluted EPS $4.71); TSR $147.79 vs peer group $227.67 over the 2019–2024 measurement window .
Compensation Peer Group & Say-on-Pay
- Peer group used for executive pay benchmarking includes peers across P&C and select life/health carriers (e.g., AMERISAFE, Kinsale, RLI, Selective, Palomar, Lemonade, Safety Insurance, Global Indemnity, etc.) .
- Say-on-Pay outcomes: In each of the last five years, >95% of votes cast supported the executive compensation program; no design changes made in response to 2024 vote .
Investment Implications
- Pay-for-performance alignment: Pedraja’s incentives are tied to underwriting profitability (Combined Ratio) and multi-year ABVPS vs 10-year Treasury—metrics that directly link compensation to value creation drivers for a workers’ comp carrier .
- Retention and overhang: Inducement PSU ($1.2M target) and standard LTI cadence support retention; RSU four-year schedules and PSU three-year performance periods smooth insider selling pressure, while hedging/pledging prohibitions reduce misalignment risks .
- Change-in-control economics: EVP multiples (200% CIC; 125% non-CIC) and equity acceleration mechanics (target PSU payout if not assumed) define potential event-driven compensation; absence of tax gross-ups is shareholder-friendly .
- Ownership discipline: EVP 3x salary guideline over 10 years, robust clawbacks, and anti-hedging/pledging policies strengthen alignment; lack of disclosed personal ownership at appointment is typical for a mid-year entrant, with guideline compliance expected over time .