McKeel Hagerty
About McKeel Hagerty
McKeel Hagerty is 57 and has served as CEO since 2000 and as combined Chairman and CEO since April 2, 2024 . He holds BA degrees in English and Philosophy from Pepperdine University and a Master’s in Theology from Saint Vladimir’s Orthodox Seminary . Company performance over the last two fiscal years shows revenue growth and EBITDA improvement with positive, but lower, net income; details below in Financial Performance [Values retrieved from S&P Global].
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hagerty, Inc. | Various roles prior to CEO | 1987–1999 | Long-tenured operator before becoming CEO; specific titles not disclosed |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| YPO (Young Presidents’ Organization) | International Board Chair | 2016–2017 | Global leadership position among CEOs |
| Grand Ventures | General Partner | 2017–2021 | Venture investing experience |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Bonus Paid ($) | Stock Awards Grant-Date Fair Value ($) | All Other Compensation ($) |
|---|---|---|---|---|---|
| 2023 | 850,001 | 100% (per employment agreement) | 765,001 | 700,000 (elected to forego $1,000,000 of entitled 200% award) | 64,475 |
| 2024 | 850,001 | 100% (unchanged from 2023) | 617,101 | 1,700,000 | 39,888 |
| 2025 (Targets) | 1,200,000 | 200% AIP | N/A | 200,000 (PRSUs only; equity target reduced from 200% of salary) | N/A |
Notes:
- Directors who are employees (including McKeel Hagerty) do not receive director fees .
Performance Compensation
| Plan / Award | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Annual Incentive Plan (2024) | Adjusted EBITDA | 37.5% | Company target set by Board | Plan achievement = 72.6% of target; CEO payout approved at 100% of 72.6% = $617,101 | Cash, paid following year |
| Annual Incentive Plan (2024) | Operating Income | 37.5% | Company target | Included in 72.6% composite | Cash |
| Annual Incentive Plan (2024) | Total Revenue Growth | 25% | Company target | Included in 72.6% composite | Cash |
| 2024 PRSUs (92,896 target shares) | Aggregate Adjusted Operating Income (2024–2026) | N/A | Threshold 70%, Max 150% of target | Earned range maps to 35%–200% of target shares | Committee determination generally in Q1 2027; continuous employment required through determination date |
| 2022 PRSUs (3,707,136 target shares – part of total PRSUs outstanding) | Stock price hurdles | N/A | 25% vests at $20.00; 25% at $25.00; 50% at $30.00, each for 60 consecutive trading days on NYSE before April 1, 2029 | Not disclosed | Time/event-based upon thresholds; remaining employment terms apply |
| RSUs (2024 grant 92,896 shares) | Time-based | N/A | N/A | N/A | One-third vests on each of first, second, and third anniversaries of April 1, 2024 grant date |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 51,905,299 shares; 14.9% of outstanding common stock |
| Unvested RSUs | 860,798 units; aggregate market/payout value $8,306,701 (at $9.65 close on 12/31/2024) |
| Unvested PRSUs | 3,800,032 units; aggregate market/payout value $36,670,309 (at $9.65 close on 12/31/2024) |
| CEO stock ownership guideline | 6× base salary; as of 2025 proxy, CEO met threshold (with new base salary implies $7.2M guideline) |
| Hedging/pledging | Hedging and pledging prohibited without written approval from Board and Chief Legal Officer per Insider Trading Policy |
| Trading controls | Section 16 persons must use approved 10b5-1 plans to sell and pre-clear trades; cooling-off periods apply |
| Director compensation | Employee directors (incl. CEO) receive no director cash/equity compensation |
Related-party context:
- Preferred stock dividends in 2024 to trusts connected to Hagerty family ($350,000 and $700,000) .
- Use of family-owned aircraft for business: $381,700 paid in 2024 (and $716,900 in 2023) .
- Soon Hagerty (spouse): $149,875 total compensation in 2024; independent contractor agreement amended April 2025 for up to $90,000 through Aug 31, 2025 .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement | Employment Agreement dated Jan 1, 2018; amended March 2023 |
| 2025 compensation redesign | Salary increased to $1.2M; AIP target increased to 200% of salary; equity target reduced to $200,000 PRSUs only |
| Severance (non-Cause / Good Reason) | 24 months base salary; 24 months participation in AIP (actual performance); 24 months participation in Equity Incentive Plan (actual performance; pro-rata in partial year at end of period); 24 months health/dental benefits; subject to release |
| Good Reason (summary) | Material reduction in compensation/benefits; materially inconsistent duties; adverse change in authority/reporting; required relocation or burdensome travel; failure of successor to assume; company breach |
| Restrictive covenants | Non-compete and non-solicitation of employees during employment and 12 months post-termination |
| Change-in-control equity terms | If involuntary termination without Cause within 24 months post-CIC, unvested RSUs fully vest; PRSUs that were determined “Earned” immediately prior to CIC fully vest |
Board Governance
- Roles: Combined Chairman and CEO since Feb 2024; Lead Independent Director (Bill Swanson) appointed to counterbalance and oversee executive sessions, agendas, performance and succession .
- Independence: All directors except McKeel Hagerty are independent under NYSE and SEC rules .
- Controlled company status: Hagerty is a NYSE “controlled company” via Hagerty Holding Corp. (HHC), utilizing exemption only for Nominating & Governance Committee (includes one management director) .
- Committees: McKeel Hagerty serves on the Nominating & Governance Committee; Audit and Compensation Committees are fully independent .
- Attendance: In 2024, Board held 7 meetings; Audit 6; Nominating & Governance 5; Compensation 10; Finance & Capital 8; all directors attended at least 75% of the meetings of the Board/committees on which they served .
Financial Performance
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenues ($USD) | 1,000,213,000* | 1,200,038,000* |
| EBITDA ($USD) | 69,042,000* | 105,236,000* |
| Net Income ($USD) | 16,554,000* | 9,590,000* |
Values retrieved from S&P Global.
Compensation Structure Analysis
- 2025 mix shifts toward cash: Higher base (+41%) and higher annual variable cash (AIP 200%) while equity target is reduced to a fixed $200,000 PRSU-only grant, reflecting founder-level ownership alignment and prioritization of near-term operating performance accountability .
- Strong pay-for-performance linkages:
- Annual Incentive tied to Adjusted EBITDA, operating income, and revenue growth with disclosed 2024 payout calibration (72.6% of target; CEO payout adjusted to 100% of that amount by Board discretion) .
- Long-term PRSUs linked to multi-year Adjusted Operating Income (2024–2026) and earlier 2022 award linked to sustained stock price thresholds .
- Governance policies strengthen alignment: NYSE-compliant Clawback Policy; anti-hedging/pledging restrictions; robust insider trading controls, mandatory 10b5-1 for Section 16 sales .
- Equity overhang and vesting overhang: Significant unvested RSUs/PRSUs implying ongoing alignment but potential future dilution as awards vest; majority of PRSU overhang (2022 grant) requires material sustained stock price performance .
Investment Implications
- Founder alignment and reduced equity grants: As a ~14.9% beneficial owner, McKeel Hagerty’s reduced annual equity grant and higher AIP target concentrate incentives on delivering near-term operating improvements while preserving shareholder dilution; expect more focus on EBITDA and margin execution in 2025 .
- Large performance equity overhang: The 2022 price-based PRSUs and 2024 AOI-based PRSUs create strong upside convexity if performance and sustained price thresholds are met; failure to hit thresholds limits equity realization, aligning shareholder protection .
- Governance mitigants to dual role: Lead Independent Director and independent committees offset combined Chair/CEO concerns; controlled-company status persists but exemptions used are limited, reducing governance risk vs. typical controlled structures .
- Related-party transactions are disclosed and governed: Family aircraft use and spouse consulting appear modest and policy-controlled but should be monitored for optics and independence perceptions .
Overall: Compensation design emphasizes performance (EBITDA, operating income, revenue) and long-term AOI/price hurdles, with founder ownership and governance safeguards limiting misalignment risks.