Kirk Lusk
About Kirk Lusk
Kirk Lusk (age 64) is Chief Financial Officer of Heritage Insurance Holdings, Inc. (HRTG), serving as CFO since April 2018 (co-CFO from January 2018). Prior roles include CFO of Narragansett Bay Insurance Company (2013–2018), International CFO of Aetna, Inc. (2008–2012), CFO of Alea Group Holdings Bermuda Ltd. (2005–2008), and CFO roles at GE ERC’s Global Casualty and GE Capital Auto Warranty Services (1998–2004) . Company performance tied to incentive outcomes in 2024 included net income of $61.5M, ROE of 24.1%, book value per share up 30.3%, net premiums earned up 10.1%, and a 3-year TSR value of $205.78 for a $100 initial investment as of 12/31/2024 .
Past Roles
| Organization | Role | Years | Strategic Impact / Focus |
|---|---|---|---|
| Narragansett Bay Insurance Company | Chief Financial Officer | 2013–2018 | Executive finance leadership |
| Aetna, Inc. | International Chief Financial Officer | 2008–2012 | International finance leadership |
| Alea Group Holdings Bermuda Ltd. | Chief Financial Officer | 2005–2008 | Executive finance leadership |
| GE ERC Global Casualty; GE Capital Auto Warranty Services | Chief Financial Officer | 1998–2004 | Executive finance leadership |
External Roles
None disclosed for Lusk in the executive officer biographies within the proxy .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 950,000 | 800,000 |
| Employment Agreement Base for 2024+ ($) | — | 800,000 (effective 12/31/2023) |
Notes:
- All Other Compensation (select 2024 items): paid time off accrual payout $274,011; employer-paid employee share of health/dental/vision/life premiums $8,183; 401(k) contribution $13,200; additional life insurance premium $20,897 .
Performance Compensation
Annual Cash Incentive – Plan Design (2024)
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Net Operating Ratio | 60% | 100% [definition] | 96% | 92% | 87.7% | 146% |
| ROAE | 20% | 4% | 8% | 12% | 24.1% | 146% |
| Qualitative | 20% | — | — | — | — | 123% |
Definition notes: Net operating ratio numerator is net losses & LAE + policy acquisition + G&A – net investment income – policy fee income; denominator is net premiums earned. ROAE = net income / average equity excluding AOCI .
Annual Cash Incentive – Payout Summary (2024)
| Threshold ($) | Target ($) | Maximum ($) | Actual Payout ($) | % of Target |
|---|---|---|---|---|
| 240,000 | 520,000 | 760,000 | 736,000 | 141.5% |
Long-Term Incentives (LTI) – 2024 Grants and Metrics
| LTI Component | 2024 Grant Value ($) | Metrics and Weighting | Performance Period | Vesting |
|---|---|---|---|---|
| Time-Based Restricted Stock | 320,000 | — | — | 1/3 annually on 12/15/2024, 12/15/2025, 12/15/2026 |
| Performance-Based Restricted Stock | Target 400,000 (Threshold 200,000; Max 600,000) | 50% 3-year adjusted book value per share growth (ex-dividends, ex-AOCI); 50% 3-year TSR | 1/1/2024–12/31/2026 | Vests after performance period based on achievement (no later than 3/30/2027) |
Multi-Year Compensation Mix (select values)
| Year | Salary ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2023 | 950,000 | 1,100,000 | 447,000 | 47,800 | 2,544,800 |
| 2024 | 800,000 | 720,000 | 736,000 | 337,562 | 2,593,561 |
Equity Ownership & Alignment
| Ownership Detail | Value |
|---|---|
| Total Beneficial Ownership (shares) | 618,756 |
| Ownership (% of outstanding) | 2.0% (out of 30,993,270 shares outstanding on 4/16/2025) |
| Components disclosed | Includes 248,098 performance-based shares at maximum, 56,980 performance-based shares at target, and 82,643 unvested time-based shares (all unvested) |
Policies impacting alignment and trading:
- Hedging and pledging: Company policy prohibits pledging or holding shares in a margin account and prohibits short sales; hedging transactions require pre-clearance from the CFO .
- Clawback: A formal clawback policy adopted in 2023 applies to awards; all awards under the Omnibus Incentive Plan are subject to clawback .
- Corporate Governance Guidelines emphasize encouraging stock ownership by directors and senior management (programmatic principle) .
Employment Terms
| Term | Detail |
|---|---|
| Agreement Effective Date | December 31, 2023 |
| Base Salary | $800,000 |
| Annual Cash Incentive | Threshold $240,000; Target $520,000; Maximum $760,000 |
| Time-Based RS Annual Grant | $320,000; vests in 3 equal annual installments |
| Performance-Based RS Annual Grant | Threshold $200,000; Target $400,000; Maximum $600,000; vests based on plan metrics |
| Severance (No-Cause or Good Reason) | Lump-sum = 1x (base salary + target annual cash incentive); time-based awards vest; performance-based awards forfeited |
| Change-in-Control (Double Trigger) | If terminated without cause or resigns for good reason after CoC: severance as above + pro-rated annual incentive based on actual performance; time-based awards vest; performance-based awards vest at target |
| Restrictive Covenants | 1-year non-solicitation, non-interference, and non-compete post-termination |
| Benefits/Perquisites | Medical, life, hospitalization, disability insurance ; additional life insurance premium paid by company in 2024 ($20,897) |
Vesting Schedules and Outstanding Awards (as of 12/31/2024)
| Award Type | Grant Date | Unvested/Unearned Shares (#) | Market Value ($) | Key Dates / Notes |
|---|---|---|---|---|
| Time-Based RS | 7/11/2023 | 24,509 | 296,559 | Vests 1/3 on 12/15/2023, 12/15/2024, 12/15/2025 |
| Time-Based RS | 2/26/2024 | 30,390 | 367,719 | Vests 1/3 on 12/15/2024, 12/15/2025, 12/15/2026 |
| Performance-Based RS | 7/11/2023 | 196,078 (max) | 2,372,544 | 3-year performance period ends 12/31/2025; vests based on achievement, no later than 3/30/2026 |
| Performance-Based RS | 2/26/2024 | 85,470 (max) | 1,034,187 | 3-year performance period ends 12/31/2026; vests based on achievement, no later than 3/30/2027 |
Note: Market values computed by the company at $12.10/share as of 12/31/2024; performance-based counts shown at maximum for disclosure purposes .
Performance & Track Record Linkage
| KPI | 2023 | 2024 |
|---|---|---|
| Net Income ($M) | 45.3 | 61.5 |
| ROE (%) | 25.8 | 24.1 |
| Book Value/Share ($) | 7.29 (12/31/23) | 9.50 (12/31/24) (+30.3%) |
| Net Premiums Earned ($M) | 697.2 | 767.9 (+10.1%) |
| Cumulative TSR (Value of $100) | 110.88 (2023) | 205.78 (2024) |
2024 annual bonus metrics and outcomes for Lusk (NOR, ROAE, qualitative) paid out at 141.5% of target, consistent with strong profitability and capital accretion in 2024 .
Compensation Structure Analysis
- Cash vs equity mix shifted YoY: base salary declined (from $950k to $800k), stock awards declined ($1.1M to $720k), while annual cash incentive increased ($447k to $736k), reflecting stronger annual performance outcomes in 2024 .
- LTI emphasis on multi-year metrics (3-yr adjusted BVPS growth and 3-yr TSR, each 50%) increases alignment with long-term value creation; no stock options outstanding as of year-end; equity awards are RS/PRS .
- Governance guardrails: clawback in place; no tax gross-ups on perquisites; no repricing/backdating; no options below FMV; pledging prohibited .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay support: approximately 76% of votes cast in favor; Committee continued shareholder outreach and considers feedback in future decisions .
Compensation Committee & Advisors
- Compensation Committee members (2024): Pappas, Vattamattam, Whiting (Chair), Barlas; all independent; 4 meetings in 2024 .
- Independent consultant: Pay Governance; Committee concluded no conflicts of interest for 2024 .
Related Party Transactions (screen for red flags)
- Related party transactions disclosed involve a director’s (Berset) agency commissions and employment of the Chairman’s son; no related-party transactions involving Lusk are disclosed in this section .
Investment Implications
- Incentive alignment: Lusk’s 2024 bonus tied primarily to net operating ratio (60%) and ROAE (20%) with results well above targets; LTI focused on 3-year BVPS growth and TSR, supporting long-term alignment and capital discipline .
- Vesting/supply dynamics: Multiple time-based tranches vest on 12/15/2025 and 12/15/2026, and performance awards cliff-vest after 12/31/2025 and 12/31/2026 performance periods; monitor Form 4s near these dates for potential selling pressure signals .
- Retention and CoC protections: One-year non-compete/non-solicit and double-trigger CoC with target vest for performance awards provide retention but also create defined separation economics (1x base + target bonus, plus pro-rated bonus on CoC) .
- Governance risk mitigants: Clawback policy, prohibition on pledging/short sales, and no tax gross-ups reduce shareholder-unfriendly risk; say-on-pay at 76% suggests moderate but not overwhelming support, warranting continued engagement .
- Program dilution: Board seeks to increase 2023 Plan share reserve by 1.8M shares, which would raise overhang to ~12.1% if approved—an overall program consideration for equity issuance cadence (not specific to Lusk) .