Tim Johns
About Tim Johns
Tim Johns, 69, is President of Zephyr Insurance Company (HRTG subsidiary) and has served in this role since April 2018. Prior to HRTG, he was a health insurance executive, including EVP and Chief Consumer Officer at Hawaii Medical Service Association (Blue Cross Blue Shield of Hawaii) from 2011–2017, and he has served as a director of Hawaiian Electric Co., Inc. since 2005 . Zephyr’s 2021 incentive metrics for Johns tied payout to operational performance (net operating ratio, organic GPW growth, qualitative goals), with a payout at 104% of target, indicating above-target execution; company-wide 2021 highlights included improved combined ratio and 10.7% growth in gross premiums earned . Heritage’s pay-versus-performance disclosures indicate alignment between compensation actually paid and both TSR and net (loss) income, and Johns was included among non-CEO NEOs for 2021 in that analysis .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Zephyr Insurance Company (HRTG subsidiary) | President | Apr 2018–present | Leads HRTG’s Hawaii-focused subsidiary; detailed impact not separately disclosed . |
| Hawaii Medical Service Association (BCBS of Hawaii) | EVP & Chief Consumer Officer; health insurance executive | 2011–2017 | Consumer leadership and health insurance operations; detailed impact not separately disclosed . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Hawaiian Electric Co., Inc. | Director | Feb 2005–present (as of 2025) | Public company directorship . |
| Private real estate-related orgs & non-profit/charitable foundations | Trustee/Director | Not disclosed | Roles referenced; specific entities and dates not disclosed . |
Fixed Compensation
Multi-year summary (as disclosed in proxies):
| Metric | FY 2020 | FY 2021 |
|---|---|---|
| Salary ($) | $300,000 | $300,000 |
| Bonus ($) | $125,000 | — |
| Stock Awards ($) | — (not reported) | $0 |
| Non-Equity Incentive Plan Compensation ($) | — | $125,000 |
| All Other Compensation ($) | $19,537 | $29,445 (includes payment of accrued/unused vacation time) |
| Total ($) | $444,537 | $454,445 |
Key elements from employment agreement:
- Base salary: $300,000 at Zephyr (effective April 2, 2018) .
- Benefits: Medical, dental, prescription, disability insurance; reimbursement of travel expenses .
Performance Compensation
2021 Zephyr incentive compensation program (ICP) metrics and outcomes:
| Weighting | Metric | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| 60% | Zephyr net operating ratio* | 89% | 87% | 85% | 88% | 90% of target |
| 20% | Ex-Wind Only Organic GPW growth** | 5% | 10% | 15% | 14% | 125% of target |
| 20% | Qualitative | — | — | — | — | 95% |
- 2021 payout summary: $125,000, representing 104% of target .
- 2020 payout summary: $125,000 ICP bonus .
Notes:
- Net operating ratio numerator: net losses and LAE + policy acquisition costs + G&A – net investment income – policy fee income; denominator: net premiums earned .
- Organic GPW growth excludes premiums from acquisitions for 12 months post acquisition .
Equity Ownership & Alignment
| Date | Beneficial Ownership (Shares) | % of Class | Pledged Shares | Notes |
|---|---|---|---|---|
| April 14, 2022 | — (not reported for Johns) | — | Prohibited by Insider Trading Policy | Company policy prohibits pledging and short sales; hedging requires CFO pre-clearance . |
Additional alignment signals:
- No stock options outstanding company-wide as of Dec 31, 2024; equity awards consist of time-based and performance-based restricted stock (not options) .
- No stock awards reported for Johns in FY 2021 .
Employment Terms
| Agreement Effective Date | Employer | Role | Contract Term | Base Salary | Incentive Eligibility | Severance (Voluntary without Good Reason or Term Expiry) | Termination for Cause | Non-Compete/Non-Solicit | Change-of-Control Terms | Benefits |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 2, 2018 | Zephyr Insurance Company (HRTG subsidiary) | President & CEO | Until terminated | $300,000 | Eligible to participate in HRTG Omnibus Incentive Plan; Zephyr ICP based on Zephyr financials and individual metrics | Base salary for 90 days | Accrued but unpaid base salary and obligations; “Cause” includes felony conviction, willful misconduct/gross negligence, material economic harm, failure to follow Board directions, fraud/embezzlement/theft/dishonesty, policy violations, breach of agreement | Two-year post-termination non-solicit and non-compete | No explicit separate change-of-control economics disclosed for Johns | Medical, dental, prescription, disability; travel reimbursement |
Clawback: All awards under the Omnibus Incentive Plan subject to 2023 clawback policy adopted per SEC/NYSE rules .
Insider trading: Pre-clearance required; pledging and short sales prohibited .
Investment Implications
- Alignment and selling pressure: Johns’ compensation is heavily cash-based with no stock awards reported in FY 2021; combined with no options outstanding company-wide, this indicates limited forced selling from vesting calendars and lower immediate insider selling pressure .
- Ownership and pledging risk: Tim Johns was not reported as a beneficial owner in the April 14, 2022 table, and company policy prohibits pledging and short sales, reducing alignment risks associated with collateralization or hedging; hedging requires CFO pre-clearance, improving control of transaction timing .
- Performance linkage: 2021 ICP metrics for Zephyr (net operating ratio, organic GPW growth) yielded a 104% of target payout, tying cash incentives to core underwriting performance and growth—supportive of operational execution signals .
- Retention risk: Employment terms include a modest 90-day salary payment if Johns terminates without good reason or at expiry, and two-year non-compete/non-solicit covenants that can deter immediate competitive departures; absence of large change-of-control severance suggests limited golden parachute economics .
- Governance/filing hygiene: Company disclosed 2024 Section 16(a) delinquent filings only for a director (Mr. Pappas), with no untimely filings noted for Johns, which reduces regulatory red-flag risk .
- Peer benchmarking context: HRTG benchmarks executive comp against a broad P&C peer set, but no specific percentile targets are used; Johns’ Zephyr-centric incentive design focuses on subsidiary performance rather than HRTG TSR, implying that equity-based pay-for-performance alignment for Johns may be less direct than for HRTG’s CEO/CFO .
Overall: Johns’ incentives are tied to Zephyr operating performance and growth, with limited equity participation and no pledging—reducing selling pressure but weakening direct shareholder-return alignment. Restrictive covenants and modest severance indicate manageable retention risk; operational payout above target in 2021 supports execution credibility at the subsidiary level .