Bret Conklin
HORACE MANN EDUCATORS CORP /DE/About Bret Conklin
Bret A. Conklin, age 61, serves as Executive Vice President, Finance Transformation; he announced his intention to retire in 2025 and transitioned from CFO effective October 1, 2024 after serving as HMN’s CFO since April 2017 and holding senior finance roles at HMN since 2002 . He has over 35 years of insurance industry experience, including prior roles at Kemper Insurance, Pekin Insurance, and seven years in public accounting at KPMG Peat Marwick specializing in insurance . Company performance in 2024 included net income of $102.8M, core earnings of $132.1M (AIP-adjusted core earnings $141.4M), total revenue +7% YoY, and TSR of 24.1%—with P&C profitability restored (combined ratio 97.9%, segment earnings $49.1M) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Horace Mann Educators Corp. | EVP, Finance Transformation | 2024–2025 | Led finance transformation during CFO succession; supported multi-segment profitability recovery . |
| Horace Mann Educators Corp. | Chief Financial Officer | 2017–2024 | Oversaw capital, earnings quality, and incentive design alignment through volatility; supported improved ROE and TSR . |
| Horace Mann Educators Corp. | SVP & Controller | 2002–2017 | Led corporate reporting and accounting operations; strengthened finance infrastructure . |
| Horace Mann Educators Corp. | VP & Controller | 1998–2000 | Corporate controller responsibilities prior to Kemper stint . |
| Kemper Insurance | Vice President | 2000–2002 | Directed corporate financial reporting and accounting operations . |
| Pekin Insurance | VP & Controller | 1992–1998 | Managed financial reporting and control environment . |
| KPMG Peat Marwick | Public Accounting (Insurance Practice) | 1985–1992 | Specialized in insurance; built technical audit and reporting expertise . |
External Roles
No additional external board or committee roles for Mr. Conklin are disclosed in the proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 520,833 | 525,000 | 541,667 |
| Annualized Base Salary ($) | — | 525,000 | 545,000 (+3.8%) |
| All Other Compensation ($) | 36,892 | 36,408 | 34,048 |
Performance Compensation
| Component | Structure | 2024 Target | 2024 Actual |
|---|---|---|---|
| AIP (Annual Incentive) | 50% AIP Adjusted Core Earnings; 25% AIP Adjusted ROE; 25% Insurance Premiums & Contract Charges Earned; max 200% of target | 70% of base salary | $607,539; 111.5% of base salary |
| LTIP – PBRSUs (2024–2026) | Relative TSR (50%) + Relative 3-yr Core ROE (50%); CSR modifier ±10%; 3-year performance, vests Jan 1, 2027 | 8,477 target shares (threshold 4,239; max 16,954) | Earned post-performance period (not yet determined) |
| LTIP – RSUs (Service-based) | 33%/33%/34% vesting over 3 years; accrues dividend equivalents | 3,393 units | Time-based vesting (schedule applies) |
| LTIP – Stock Options | 4-year ratable vesting (25% annually); 10-year term; exercise price at grant | 22,156 options @ $35.39, expiring 3/6/2034; grant 3/6/2024 | Value only upon stock appreciation; 12-month post-exercise holding required |
2024 AIP Plan Results (Company-level)
| Measure | Threshold | Target | Maximum | Actual | Result | Weighting | Payout Contribution |
|---|---|---|---|---|---|---|---|
| AIP Adjusted Core Earnings ($M) | 114 | 129 | 144 | 141 | 182.4% | 50% | 91.2% |
| AIP Adjusted ROE (%) | 7.5 | 8.5 | 9.5 | 9.3 | 182.0% | 25% | 45.5% |
| Premiums & Contract Charges Earned ($M) | 1,131 | 1,148 | 1,171 | 1,144 | 94.1% | 25% | 23.5% |
| Total AIP Payout (as % of target) | 100% | 160.2% |
Prior PBRSU Payout (2022–2024 performance period)
| Measure | Weight | Payout |
|---|---|---|
| Relative TSR vs Russell 2000 Insurance (excludes brokers/reinsurance/financial guarantee/health) | 50% | 33.0% |
| Relative 3-yr Core ROE vs peers | 50% | 37.2% |
| CSR Scorecard Modifier | ±10% | +7% |
| Final PBRSU Payout | 77.2% |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership | 197,406 shares; <1% of class |
| Ownership Guidelines (EVP target) | 350% of salary |
| Actual Ownership vs Guideline | 642% actual; 97,343 shares; market value $3,496,565 (12-month average price basis) |
| Hedging/Pledging | Prohibited for Directors and Executive Officers |
| Post-exercise Holding | 12-month holding requirement on net option exercise proceeds |
Outstanding Equity at FY2024 (Selected Conklin details)
| Type | Units | Key Terms |
|---|---|---|
| Unvested RSUs (service-based) | 7,069 units; MV $277,317 at $39.23 | 33/33/34% over 3 years; accrues dividend equivalents |
| Unearned PBRSUs (performance-based) | 25,955 units; payout value $1,018,215 at $39.23 | Earn/vest on performance schedule (2023–2025, 2024–2026) |
| Options (latest grant) | 22,156 options @ $35.39 (3/6/2024–3/6/2034) | 25% vest annually over 4 years; 10-year term |
Employment Terms
- Employment agreements: Company minimizes individual employment agreements; none disclosed for Mr. Conklin .
- Severance: Executive Severance multiple 1.5x salary + target bonus; Change-in-Control (double trigger) multiple 2.0x; no tax gross-ups .
- Estimated payments (as of 12/31/2024): Involuntary termination without cause total $1,814,378; change-in-control total $3,617,323, inclusive of AIP, option/RSU treatment; amounts based on $39.23 stock price and plan assumptions .
- Clawback: Complies with SEC Rule 10D-1 and NYSE 303A.14; cash and equity awards subject to recoupment for restatements/misconduct .
- Insider Trading Policy: Equity grant timing controls; blackout windows; options not granted around MNPI releases .
Compensation Structure Analysis
- Pay mix: Significant “at-risk” pay via performance-based incentives; options and RSUs balance retention and performance alignment; 2025 LTIP shifted to 60% PBRSUs, 20% RSUs, 20% options, responding to shareholder feedback .
- AIP rigor: 2024 AIP payout at 160.2% driven by strong adjusted core earnings and ROE; premiums slightly below target—resulting in weighted outcomes and capped awards .
- Relative performance: 2022–2024 PBRSUs paid 77.2% after CSR modifier, indicating below-target relative TSR/ROE versus peers despite strong 2024 absolute results .
- Say-on-pay: 60.4% approval in 2024 led to program enhancements (higher PBRSU weighting, CEO ownership guideline raised, option weighting reduced) .
Equity Ownership & Alignment Details
| Ownership Metric | Value |
|---|---|
| Shares pledged as collateral | Not permitted under policy (prohibited) |
| Stock ownership guideline compliance | Exceeded (642% vs 350% target) |
| Vested vs unvested | Mix includes service RSUs and performance RSUs; options exercisable and unexercisable per schedules |
| Ownership as % of outstanding | <1% beneficial ownership |
Performance & Track Record
| Metric/Initiative | 2024 Outcome |
|---|---|
| TSR | 24.1% |
| Total revenue growth | +7% YoY |
| Core earnings | $132.1M; AIP-adjusted $141.4M |
| P&C profitability restoration | Segment earnings $49.1M; combined ratio 97.9%; +238% vs prior year |
Compensation Peer Group (Benchmarking)
| Peers (selected) | 2024 Peer Set |
|---|---|
| Multiline/life/P&C insurers | Ambac, Kemper, Selective Insurance, National Western Life, Hanover, Argo, Primerica, United Fire Group, CNO, ProAssurance, White Mountains, Employers Holdings, RLI |
Fixed Compensation (Multi-year Summary for Conklin)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 520,833 | 525,000 | 541,667 |
| Stock Awards ($) | 420,000 | 420,000 | 420,000 |
| Option Awards ($) | 180,000 | 180,000 | 180,000 |
| Non-Equity Incentive ($) | 203,125 | 263,057 | 607,539 |
| All Other Compensation ($) | 36,892 | 36,408 | 34,048 |
| Total ($) | 1,360,850 | 1,424,465 | 1,783,254 |
Vesting Schedules and Insider Selling Pressure
| Instrument | Vesting / Maturity | Key Dates |
|---|---|---|
| PBRSUs (2022–2024) | Matured and vested Jan 1, 2025 at 77.2% of target (CSR +7%) | 1/1/2025 |
| PBRSUs (2023–2025) | Earn/vest post 3-year period | Jan 1, 2026 |
| PBRSUs (2024–2026) | Earn/vest post 3-year period | Jan 1, 2027 |
| RSUs (service-based) | 33%/33%/34% annually | Grants 3/6/2024 start vesting 2025–2027 |
| Options (2024 grant) | 25% annually; 10-year term; exercise price $35.39 | 3/6/2024 grant; expires 3/6/2034; post-exercise 12-month holding mitigates immediate selling |
- Hedging and pledging prohibitions further mitigate near-term selling pressure; stock option proceeds must be held for 12 months post-exercise .
Employment Terms (Severance & CIC Economics)
| Plan | Trigger | Multiple | Form | Tax Gross-up | Notes |
|---|---|---|---|---|---|
| Executive Severance | Loss of position (no CIC) | 1.5x salary + target bonus (Conklin) | Salary continuation | None | Standard market design; no duplicate benefits . |
| Change-in-Control (CIC) | Double trigger | 2.0x salary + target bonus (Conklin) | Lump sum | None; modified cap to avoid excise tax | Equity acceleration/payout per plan terms . |
Governance and Policies Relevant to Pay and Risk
- Clawbacks: SEC Rule 10D-1 compliant; recoupment for restatements/misconduct across cash and equity .
- Ownership & Holding: EVP guideline 350% of salary; Conklin at 642%; includes RSUs; options excluded from guideline calculation .
- Prohibitions: Hedging and pledging prohibited for Directors/Executive Officers .
- Grant Timing: No option grants around MNPI releases; blackout/trading window controls .
Investment Implications
- Alignment: Conklin exceeds ownership guidelines (642% vs 350%) and is subject to hedging/pledging bans and 12-month post-exercise holding—strong alignment with shareholders and reduced sell pressure from options .
- Pay-for-performance: 2024 AIP paid 160.2% on strong adjusted core earnings and ROE, while 2022–2024 PBRSUs paid 77.2% on relative metrics—indicates balanced design linking cash to absolute results and equity to relative performance .
- Transition risk: Retirement planned in 2025 and CFO succession completed in 2024 add near-term execution risk, though structured severance/CIC terms and finance transformation role aim to stabilize transition .
- Shareholder feedback: 60.4% say-on-pay in 2024 prompted shifts to increase PBRSU weighting and CEO ownership requirements—positive signal on responsiveness and tightening pay-performance linkage .
- Potential trading signals: PBRSU maturities (2025–2027) and RSU schedules create predictable vesting events; post-exercise holding and no pledging reduce immediate sale risk, but monitor Form 4 filings around vest/exercise dates for flow impacts .