Beth Costello
HARTFORD INSURANCE GROUPAbout Beth Costello
Beth A. Costello is Executive Vice President and Chief Financial Officer (CFO) of The Hartford (HIG) since July 1, 2014, responsible for finance, accounting, tax, treasury, strategic sourcing, real estate, investor relations, and oversight of the chief actuary, chief underwriting officer and Hartford Funds leadership . She earned a B.S. in Business Administration from Bryant University and was a certified public accountant; prior roles include partner at Arthur Andersen and senior manager at Deloitte . Her age is listed as 57 in 2025 by MarketScreener . Under her finance leadership, 2024 results included net income and core earnings of ~$3.1B each with ROE of 19.9% and 16.7% respectively, and capital returns of $2.1B (including $1.5B buybacks and an 11% dividend increase) . Company TSR rose from a $100 base to $202 in 2024 (five-year pay-versus-performance series), reflecting strong shareholder outcomes during her tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Hartford | President, Talcott Resolution (legacy annuity business) | 2012–2014 | Led wind-down/reporting segment; managed capital and reporting for legacy liabilities . |
| The Hartford | SVP & Controller; Deputy Controller; VP (SOX 404 compliance) | 2004–2012 | Led finance transformation; strengthened accounting policy and corporate controls . |
| Deloitte & Touche LLP | Senior Manager, Audit | Pre‑2004 | Public company audit leadership; controls and reporting expertise . |
| Arthur Andersen LLP | Partner | Pre‑2004 | Assurance and advisory leadership . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Bushnell Center for the Performing Arts | Chair, Board of Trustees | Current | Regional civic leadership; stakeholder engagement . |
| The Village for Families & Children | Board Director | Current | Community impact; financial stewardship . |
| Connecticut Women’s Hall of Fame | Board Member | Current | Advocacy and recognition for women leaders . |
Fixed Compensation
Multi-year compensation (SEC Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 762,500 | 775,000 | 793,750 |
| Non-Equity Incentive (AIP) ($) | 1,924,000 | 1,579,500 | 1,930,500 |
| Stock Awards (PSUs) ($) | 1,288,375 | 1,327,324 | 2,182,440 |
| Option Awards ($) | 1,250,000 | 1,212,500 | 650,000 |
| All Other Comp ($) | 66,100 | 53,154 | 65,325 |
| Total ($) | 5,290,975 | 4,990,959 | 5,625,952 |
2024 cash/bonus specifics: Base salary $800,000 (proxy summary presentation) ; AIP target $1,350,000 and payout $1,930,500 (AIP funding 143%) .
Performance Compensation
2024 incentive design and outcomes:
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Annual Incentive Plan (AIP):
- Primary metric: Compensation Core Earnings; 2024 target $2.84B; actual $3.15B; formulaic funding 143% of target; committee made no discretionary adjustment .
- Beth’s AIP: Target $1,350,000; payout $1,930,500 (143%) .
-
Long-Term Incentive (LTI) 2024 award: $2,600,000 with 75% PSUs and 25% stock options .
- PSUs:
- Weighting: 2/3 Compensation Core ROE; 1/3 peer-relative TSR .
- ROE target: Average annual Compensation Core ROE of 15.5% for 2024–2026; threshold (80% of target) and max (120% of target) map to 0–200% payout .
- Grant details (Feb 27, 2024): Threshold 2,376 shares; Target 20,368; Max 40,735; vesting at 12/31/2026; dividend equivalents accrue but pay only if/when shares vest .
- Stock options:
- 25,223 options at $95.74 strike; vest 1/3 annually over 3 years; 10-year term .
- PSUs:
-
Prior cycle PSU payout: 2022–2024 performance shares paid at 180% (ROE 200%, TSR 160%) certified Feb 18, 2025 .
Detailed incentive matrix:
| Incentive | Metric | Weight | Target | Actual/Status | Payout/Terms |
|---|---|---|---|---|---|
| 2024 AIP | Compensation Core Earnings | 100% (funding driver) | $2.84B | $3.15B; 143% formulaic | 143% of target; Beth paid $1,930,500 |
| 2024–2026 PSUs | Compensation Core ROE | 2/3 | Avg 15.5% | In-flight | 0–200%; 3-year |
| 2024–2026 PSUs | Peer-relative TSR | 1/3 | 55th percentile target; no payout <30th; cap 200% at 85th | In-flight | 0–200%; 3-year |
| 2024 Options | Stock price | — | $95.74 strike | In-flight | Vest 1/3 annually; 10-year term |
| 2022–2024 PSUs | ROE / TSR | 50% / 50% | Program terms | ROE 200%; TSR 73rd pct (160%) | 180% payout certified |
Equity Ownership & Alignment
- Beneficial ownership (as of March 24, 2025): 557,977 common shares; total stock-based holdings 671,828 (includes RSUs and PSUs at target and options not exercisable within 60 days) .
- Options exercisable within 60 days: 470,403 shares .
- Outstanding unearned PSUs:
- 2023 grant: 31,954 shares at 200% scenario value $3,495,768 .
- 2024 grant: 41,090 shares at 200% scenario value $4,495,246 .
- Insider exercises/vesting (2024):
- Options exercised: 110,991 shares; value realized $6,152,758 .
- Stock awards vested (primarily PSUs): 34,365 shares; value realized $3,877,058 .
- Alignment policies:
- Stock ownership requirement: 4x salary for NEOs; all NEOs met requirements as of March 24, 2025 .
- Hedging/pledging: Prohibited for Senior Executives; no margin or pledging allowed .
- Dividend equivalents: Pay only on vesting; none on stock options .
Employment Terms
- Agreements: No individual employment contracts for NEOs .
- Severance plan: Lump sum equal to 2x (base salary + target AIP) if involuntarily terminated not for cause, before/after change of control; subject to restrictive covenants (non-compete and non-solicit for one year; confidentiality; non-disparagement) .
- Change-of-control (CoC): Double-trigger vesting if awards assumed/replaced; immediate vesting if not assumed/replaced; pro rata AIP; no excise tax gross-ups; CoC definitions and Good Reason detailed in proxy .
- Clawback: Comprehensive recoupment policy updated in Sept 2023, covering restatements (SEC/NYSE compliant) and misconduct; applies to time- and performance-based incentive comp .
Compensation Structure vs Performance
- Pay mix emphasizes variable compensation (NEO ~80% variable; CEO ~93%) .
- 2024 program elevated PSUs to 75% of LTI and reduced options to 25%, increasing at-risk alignment with ROE and TSR outcomes .
- AIP design ties payouts to Compensation Core Earnings with guardrails and committee qualitative review; 2024 funding 143% reflecting outperformance across business lines and investment yields .
Company Performance Benchmarks (context for CFO alignment)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 21,046,000,000* | 23,145,000,000* | 25,012,000,000* |
| EBITDA ($) | 3,029,000,000* | 3,744,000,000* | 4,323,000,000* |
Values retrieved from S&P Global.*
Company TSR (value of initial fixed $100 investment):
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR ($) | 83 | 120 | 135 | 146 | 202 |
Additional 2024 outcomes (AIP/PSU key metrics): net income ROE 19.9%; core earnings ROE 16.7%; core earnings $3.1B; dividend increase 11%; repurchases $1.5B .
Compensation Governance, Peer Group, and Say‑on‑Pay
- Compensation Committee membership and independent consultant (CAP) oversight; annual risk review; program changes based on shareholder feedback (ownership policy enhanced) .
- Corporate peer group used for benchmarking includes major insurers; The Hartford ranks ~61st percentile in revenues and 57th percentile in market cap among peers .
- Say‑on‑Pay support: ~91% approval at 2024 annual meeting .
Investment Implications
- Alignment: Heavy tilt to PSUs linked to Compensation Core ROE and TSR drives strong pay-for-performance, with ownership guidelines and hedging/pledging prohibitions reinforcing shareholder alignment .
- Vesting/Supply Dynamics: 2024 option grant (25,223 at $95.74) and unearned PSUs (73,044 at max scenarios) create potential future share supply; 2024 exercises/vesting (110,991 options exercised; 34,365 shares vested) indicate periodic liquidity events but within normal executive program cadence .
- Retention & Risk: No individual employment contracts, but severance/change-of-control protections (2x salary+bonus; double‑trigger equity) plus clear non‑compete/non‑solicit reduce turnover risk in adverse scenarios . Comprehensive clawback further mitigates governance risk .
- Performance Levers: AIP sensitivity to Compensation Core Earnings and PSU reliance on ROE/TSR means underwriting margins, reserve development, investment yields, and peer-relative returns are primary drivers for realized pay—historically supportive given multi-year TSR and ROE outcomes .