Donald Carley
Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer at 
HORACE MANN EDUCATORS CORP /DE/
HORACE MANN EDUCATORS CORP /DE/Executive
About Donald Carley
Donald M. Carley (age 57) is Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer at Horace Mann Educators Corp. He joined HMN in January 2016 as General Counsel, added Corporate Secretary and Chief Compliance Officer in May 2016, was promoted to Senior Vice President in November 2016, and to Executive Vice President in November 2019. Prior roles include Associate General Counsel at State Farm (2008–2015) and about a decade in private practice at Sonnenschein Nath & Rosenthal LLP (now Dentons US LLP), most recently as partner, with expertise in corporate governance, M&A, complex transactions, litigation, government affairs and regulatory matters . HMN’s performance incentives tie directly to shareholder return and ROE: 2024 AIP paid out at 160.2% on strong adjusted ROE of 9.3% and core earnings, while 2022–2024 PBRSUs paid 70.2% of target (77.2% after CSR modifier), reflecting relative TSR/ROE vs peers; P&C earnings improved 238% in 2024 to $49.1M from a prior-year loss, underscoring operational recovery .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Horace Mann (HMN) | General Counsel; Corporate Secretary & Chief Compliance Officer | 2016–present (GC from Jan 2016; CS/CCO from May 2016) | Built governance/compliance; advised on corporate and regulatory strategy |
| Horace Mann (HMN) | Senior Vice President; Executive Vice President | SVP Nov 2016; EVP Nov 2019 | Advanced to executive leadership overseeing legal/compliance and corporate governance |
| State Farm Mutual Automobile Insurance Company | Associate General Counsel | 2008–2015 | Led corporate governance, M&A, regulatory, litigation and operational legal issues |
| Sonnenschein Nath & Rosenthal LLP (now Dentons US LLP) | Partner (private practice) | ~10 years prior to 2008 | Complex corporate/M&A, governance and litigation expertise; partner leadership |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed in HMN proxy filings | — | — | No external public-company directorships disclosed for Carley |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 406,667 | 418,333 | 432,500 |
| Target AIP (% of salary) | — | 50% | 50% |
| Actual AIP Paid ($) | 132,167 | 149,722 | 346,497 |
| Actual AIP (% of base) | — | 35.6% | 79.7% |
| All Other Compensation ($) | 38,601 | 51,604 | 52,465 |
Performance Compensation
Annual Incentive Plan (AIP) – FY 2023
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout Contribution |
|---|---|---|---|---|---|---|
| AIP Adjusted Core Earnings ($M) | 50% | 83 | 98 | 114 | 86 | 29.2% |
| AIP Adjusted ROE (%) | 25% | 5.5 | 6.5 | 7.5 | 5.7 | 15.0% |
| Insurance Premiums & Contract Charges Earned ($M) | 25% | 1,040 | 1,055 | 1,077 | 1,057 | 27.4% |
| Total Payout | — | — | — | — | — | 71.6% |
Annual Incentive Plan (AIP) – FY 2024
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout Contribution |
|---|---|---|---|---|---|---|
| Adjusted Core Earnings ($M) | 50% | 114 | 129 | 144 | 141 | 91.2% |
| Adjusted ROE (%) | 25% | 7.5 | 8.5 | 9.5 | 9.3 | 45.5% |
| Insurance Premiums & Contract Charges Earned ($M) | 25% | 1,131 | 1,148 | 1,171 | 1,144 | 23.5% |
| Total Payout | — | — | — | — | — | 160.2% |
Long-Term Incentive Plan (LTIP) – PBRSU Results
| Performance Period | Metric | Weight | Result |
|---|---|---|---|
| 2021–2023 (vested Jan 1, 2024) | Relative TSR vs peers | 50% | 28.5% |
| 2021–2023 (vested Jan 1, 2024) | Relative Core ROE vs peers | 50% | 43.0% |
| 2021–2023 | Total PBRSU payout | — | 71.5% |
| 2022–2024 (vested Jan 1, 2025) | Relative TSR vs peers | 50% | 33.0% |
| 2022–2024 (vested Jan 1, 2025) | Relative Core ROE vs peers | 50% | 37.2% |
| 2022–2024 | Total PBRSU payout (pre-modifier) | — | 70.2% |
| 2022–2024 | CSR scorecard modifier | ±10% | +7% |
| 2022–2024 | Final PBRSU payout | — | 77.2% |
Key LTIP design features: PBRSUs are 50% of 2024 LTIP (60% in 2025), earned over 3 years on 100% relative measures (TSR and 3-year average Core ROE) with a +/-10% CSR modifier; service RSUs are 20% (3-year ratable vest); stock options are 30% in 2024 (10-year term, 4-year ratable vest, 12-month post-exercise holding), reduced to 20% in 2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/15/2025) | 122,748 shares; less than 1% of class |
| Ownership guidelines (Exec VP) | Target 350% of salary; Carley actual 380% (46,034 shares; $1,653,554 market value using 12-month average) as of 12/31/2024 |
| Hedging/pledging policy | Prohibited for Directors and Executive Officers; pre-clearance and 10b5-1 plan oversight in place |
| Vested holdings (footnote disclosure) | 91,535 vested stock options; 17,367 vested share-based RSUs |
| Unvested service RSUs | 4,458 units; market value $174,887 |
| Unearned PBRSUs (unvested) | 16,562 units; payout value $649,727 |
| 2024 equity vesting/exercise activity | Options exercised: 14,988; value realized $176,663. RSUs vested: 5,122; value realized $181,073 |
| Option grant/exercise terms (selected) | 2024 grant: 13,848 options @ $35.39 (exp. 03/06/34). 2023: 9,828 @ $35.98 (exp. 03/08/33). 2022: 7,054 @ $41.39 (exp. 03/09/32). 2021: 3,637 @ $40.10 (exp. 03/03/31). Earlier grants include 2017–2020 tranches |
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreements | Standard practice: no individual employment agreements for Executive Officers (minimal use) |
| Severance plan multiple | Executive Severance: 1.5x salary + target AIP (salary continuation). CIC plan: 2.0x salary + target AIP (double-trigger; lump sum). No tax gross-up; no duplicate benefits |
| Clawback | NYSE/SEC-compliant clawback effective Oct 2, 2023; recoupment for restatements; misconduct recovery under CECP |
| Minimum vesting | 1-year minimum vesting for all equity grants; stock option 12-month post-exercise holding requirement |
Estimated Payments to Carley (as of fiscal year-end scenario tables)
| Scenario (as of) | Cash Severance ($) | AIP ($) | Stock Options Acceleration ($) | RSU Acceleration ($) | Health & Welfare ($) | Total ($) |
|---|---|---|---|---|---|---|
| Involuntary Termination w/o Cause (12/31/2023) | 945,000 | 210,000 | 0 | 446,022 | 40,067 | 1,195,067 |
| Change in Control (12/31/2023) | 1,260,000 | 210,000 | 0 | 612,763 | 40,067 | 2,122,830 |
| Involuntary Termination w/o Cause (12/31/2024) | 978,750 | 217,500 | 85,117 | 559,022 | 43,128 | 1,239,378 |
| Change in Control (12/31/2024) | 1,305,000 | 217,500 | 85,117 | 765,764 | 43,128 | 2,416,509 |
Performance & Track Record
- Company AIP outcomes tied to absolute earnings/ROE and premiums: 71.6% payout for 2023; 160.2% for 2024 (adjusted ROE 9.3%), indicating strong recent operational execution .
- Relative performance vs peers moderates LTIP payouts: 2022–2024 PBRSUs at 70.2% pre-modifier, 77.2% post-CSR modifier; 2021–2023 paid 71.5%—highlighting balanced pay-for-performance with emphasis on relative TSR and ROE .
- Pay-versus-performance context: 2024 value of an initial $100 investment in HMN at $107.23 vs peer group $200.73; HMN net income $102.80 and AIP adjusted core earnings $141.00, framing shareholder return vs operating metrics .
- P&C earnings recovery: 2024 P&C earnings improved 238% to $49.1M vs a loss of $35.5M in 2023—key driver of AIP overperformance .
Compensation Structure Notes
- 2024 target LTIP grant value for Carley: $375,000; vehicles include PBRSUs, service RSUs, and options (30% options in 2024; reduced to 20% in 2025) .
- 2023 LTIP grant specifics: PBRSUs 2,606–10,424 potential shares; service RSUs 2,085 units; options 13,104 @ $35.98 (3/8/2023) .
- 2024 LTIP grant specifics: PBRSUs 2,650–10,598 potential shares; service RSUs 2,121 units; options 13,848 @ $35.39 (3/6/2024) .
- Vesting schedules: service RSUs vest 33%/33%/34% over three years; options vest 25% annually over four years (10-year term); PBRSUs vest 100% at end of 3-year period (2022 grant vested in 2025; 2023 in 2026; 2024 in 2027) .
Governance, Say-on-Pay & Peer Framework
- Compensation Committee: Independent directors Mark E. Konen (Chair), Beverley J. McClure, H. Wade Reece; independent consultant CAP engaged and assessed as independent .
- Say-on-Pay results: 97.4% approval in 2023; 60.4% approval in 2024—company conducted fall-2024 shareholder outreach and increased PBRSU weight to 60% in 2025, reduced options to 20%, and raised CEO ownership guideline to 600% .
- PBRSU peer set: Russell 2000 Insurance Index (excludes brokerage, reinsurance, financial guarantee, health) used for relative TSR and ROE assessments .
Investment Implications
- Alignment: Carley’s pay mix has substantial at-risk and equity components tied to absolute AIP measures and relative TSR/ROE in PBRSUs; he exceeds ownership guidelines (380% vs 350%) and is subject to hedging/pledging prohibitions and a robust clawback, indicating strong alignment and reduced agency risk .
- Retention and selling pressure: Multi-year vesting across RSUs/options and 12-month post-exercise holding create retention hooks; 2024 option exercises (14,988 shares; $176,663 realized) suggest periodic liquidity needs but the holding requirement dampens near-term selling pressure .
- Change-in-control economics: Moderate severance (1.5x) and CIC (2.0x, double-trigger, no gross-ups) with equity acceleration provide protection without excessive parachute risk; latest estimates: $1.24M w/o cause vs $2.42M CIC (as of 12/31/2024) .
- Performance signaling: High 2024 AIP payout reflects near-term operational momentum; below-target 3-year PBRSU payouts (77.2% post-modifier) imply relative performance still catching up—watch future PBRSU cycles and TSR vs peer index for trend inflection .
- Governance overhang: 2024 say-on-pay at 60.4% introduces scrutiny; HMN’s responsive design changes (higher PBRSU weight, lower options) should improve perceived alignment—monitor 2025 vote outcome and any further program refinements .