Gabriel Tirador
MERCURY GENERALAbout Gabriel Tirador
Chief Executive Officer of Mercury General Corporation since January 1, 2007; Director since 2003; previously President (2001–2023) and CFO (1998–2001). Age 60 and an inactive CPA with prior audit experience at KPMG; earlier roles include VP/Controller at Automobile Club of Southern California and Assistant Controller at Mercury (joined 1994) . Performance under his tenure shows strong 2024 recovery: net income of $467.95M and underwriting profit of $205.53M with combined ratio 0.96, producing a 2024 TSR value of $168 on a $100 base versus $92 in 2023; pay-versus-performance metrics emphasize underwriting profit, operating income, and combined ratio as key drivers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercury General Corporation | Chief Executive Officer | 2007–present | Led turnaround to 2024 underwriting profit and net income recovery; focus on combined ratio discipline |
| Mercury General Corporation | President | 2001–2023 | Oversaw multi-decade operations and growth; transitioned leadership to separate President/COO in 2024 |
| Mercury General Corporation | Chief Financial Officer | 1998–2001 | Strengthened financial reporting and controls; brought accounting rigor |
| Mercury General Corporation | Assistant Controller | 1994–1996 | Built foundational finance processes |
| Automobile Club of Southern California | Vice President & Controller | 1997–1998 | External operational finance experience in insurance-adjacent services |
| KPMG LLP | Auditor | Pre-1994 | Audit discipline; informs governance and financial oversight |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Automobile Club of Southern California | Vice President & Controller | 1997–1998 | External finance leadership; operational experience leveraged at Mercury |
| KPMG LLP | Auditor | Pre-1994 | Audit expertise; supports board and executive oversight quality |
Multi-Year Compensation Summary (Gabriel Tirador)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $1,174,657 | $1,220,767 | $1,341,933 |
| Bonus (incl. half‑month bonus, sign‑ons) | $50,152 | $387,331 | $56,767 |
| Stock Awards (PSUs grant-date fair value) | — | — | $926,540 |
| Non‑equity Incentive Plan (MIP) | — | — | $1,327,339 |
| All Other Compensation | $83,246 | $90,250 | $26,012 |
| Total | $1,308,055 | $1,698,348 | $3,678,591 |
Fixed Compensation (2024)
| Component | Detail |
|---|---|
| Base Salary | $1,341,933 |
| Target Bonus % | 100% of base salary (MIP target opportunity) |
| Actual Bonus Paid (Half‑month employee bonus) | $56,767 |
Performance Compensation
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Annual Cash Bonus (MIP) – 2024 | Metric | Weighting | Target | Actual | Payout | Vesting/Timing | |---|---|---|---|---|---| | GAAP underwriting profit margin (1 − combined ratio) | 100% corporate CPM | 4% margin | 4% margin (combined ratio 0.96) | CPM 100%; Individual multiplier 100%; Paid $1,327,339 | Calculated and approved in Q1 post year‑end; paid shortly after approval |
-
LTIP PSUs – Granted February 7, 2024 | Feature | Detail | |---|---| | Instrument | Performance-based phantom stock units (cash-settled) | | Performance Metrics | Average combined ratio and market share growth (equally weighted), plus individual performance; 3-year period | | Grant (Target/Threshold/Max) | Target 23,979; Threshold 11,989; Max 35,968 | | Maximum Payout | 150% of target | | Vesting Date | End of 3-year period (12/31/2026) | | Settlement Basis | Cash amount per unit based on average share price near end of period; requires continued employment through payment | | 12/31/2024 Estimated Payout Value (at target) | $1,594,109 |
Equity Ownership & Alignment
| Metric | Value |
|---|---|
| Beneficial ownership (common) | 51,213 shares; less than 1% |
| Shares outstanding (reference) | 55,388,627 (as of 3/17/2025) |
| Ownership % of outstanding | ~0.09% (51,213 / 55,388,627) |
| Unvested PSUs (target) | 23,979 units; estimated payout value $1,594,109 at 12/31/2024 |
| Stock options – exercised in 2024 | 12,500 shares; value realized $438,810 |
| Stock options – outstanding at 12/31/2024 | None outstanding |
| Hedging/Pledging | Prohibited for executives and directors (no hedging, pledging, or margin purchases) |
| Ownership guidelines | Not disclosed in proxy (executives) |
Employment Terms
| Term | Detail |
|---|---|
| Employment start date at Mercury | Assistant Controller from March 1994; CFO Feb 1998–Oct 2001; President Oct 2001–Dec 2023; CEO since Jan 1, 2007 |
| Agreement/term | No employment agreement with specific term; employment at will |
| Severance provisions | No severance agreements covering executive officers |
| Change-of-control | No change-of-control (“parachute”) arrangements |
| Clawback policy | Mandatory recovery of erroneously awarded incentive comp for 3 years prior to a restatement; effective Oct 2, 2023 |
| Non-compete / Non-solicit | Not disclosed |
| Deferred compensation / SERP | None, aside from qualified 401(k); no SERP |
| Perquisites | Personal use of company automobile and parking ($13,937 in 2024) |
Board Governance (Director Service, Committees, Independence)
- Board Service and Roles: Director since 2003; CEO since 2007; not independent under NYSE rules (executive officer) .
- Committees: Member, Investment Committee (alongside George Joseph, Victor Joseph, Braunegg, Ellis, Cappello; Chair Braunegg as of Feb 7, 2025) .
- Board Leadership: Roles split between Chairman (George Joseph) and CEO (Tirador); Lead Independent Director (Martha Marcon) coordinates independent director activities and executive sessions—mitigates dual-role concentration risk .
- Attendance: Board held 4 meetings in 2024; all directors attended ≥75% of board/committee meetings; two directors attended the 2024 annual meeting .
Director Compensation (Employee-Director)
| Year | Director Fees |
|---|---|
| 2022 | $56,000 |
| 2023 | $60,000 |
| 2024 | $0 |
Pay Versus Performance (Context for PEO, Gabriel Tirador)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| PEO Summary Comp Total | $2,892,692 | $1,707,323 | $1,347,555 | $1,698,348 | $4,346,160 |
| Company TSR (Value of $100) | $113.69 | $120.71 | $81.33 | $92.34 | $168.31 |
| Net Income (Loss) | $374,606,536 | $247,937,243 | $(512,672,098) | $96,335,874 | $467,953,442 |
| Underwriting Profit (Loss) | $246,672,928 | $65,010,451 | $(344,067,476) | $(231,655,187) | $205,527,611 |
Company-selected performance measures: Underwriting Profit, Operating Income, Combined Ratio .
Compensation Structure Analysis
- Mix shift toward performance-linked cash: Introduction of cash-settled PSUs under the 2024 LTIP, targeting 75% of salary for CEO, with payout up to 150% based on combined ratio and market share growth—reduces equity overhang and aligns to underwriting outcomes .
- Annual incentive fully tied to corporate performance: 2024 MIP 100% weighted to underwriting profit margin via CPM; target 4% achieved; CPM 100% yielded $1.33M payout for the CEO, with individual multiplier at 100% .
- Benchmarking and consultant use: Compensation Committee did not use external peer benchmarking for 2024; relied on committee experience and longstanding resolution delegations, indicating a bespoke approach tied to Mercury’s operating model .
- Governance safeguards: NYSE-compliant clawback adopted in 2023; strict hedging/pledging prohibitions reduce misalignment risks .
Vesting Schedules and Insider Selling Pressure
- PSUs vest after the three-year period ending December 31, 2026; payout in cash based on average share price near period end; maximum 150% of target; requires continued employment through payment .
- Options activity: CEO realized $438,810 on exercise of 12,500 options in 2024; no options outstanding at year-end, reducing forward selling pressure from option overhang .
- Hedging/pledging: Prohibited, mitigating forced selling or collateral-driven disposals .
Equity Ownership & Alignment Notes
- Beneficial ownership of 51,213 shares (<1%), with substantial unearned PSU exposure (23,979 units, $1.59M est. payout value at 12/31/2024) providing forward alignment to performance metrics; no pledging permitted .
- Ownership guidelines for executives are not disclosed; ESOP allocations may be included in reported beneficial ownership .
Compensation Committee Analysis
- Committee composition: Independent directors Little, Braunegg, Cappello; Chair Cappello; three meetings held in 2024 .
- Scope: Designs/administers executive comp including MIP and 2024 LTIP; considers say‑on‑pay outcomes (96% approval in 2024) in policy decisions .
- Interlocks: No compensation interlocks; members are non‑employees .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: >96%; no changes made for 2025 based on results .
- CEO Pay Ratio: 43:1 for 2024 (median employee $85,899; CEO $3,678,591) .
Board Service Considerations (Dual-role implications)
- CEO serves as a director; Chairman role separated (George Joseph); Lead Independent Director established and independent-majority board mitigates independence concerns; CEO not independent under NYSE rules .
- Investment Committee membership provides direct oversight over investment strategies and managers—aligns operating execution with capital deployment .
Related Party Transactions (Context)
- Family affiliations centered on Joseph family; policy requires Nominating/Corporate Governance Committee oversight for transactions involving directors/CEO/5% holders; disclosed 2024 agency commissions and compensation to family members, reinforcing governance process .
Investment Implications
- Pay-for-performance alignment is strong: MIP exclusively tied to underwriting profit margin and LTIP PSUs tied to combined ratio and market share growth, with clawbacks and anti‑hedging/pledging policies—supports disciplined underwriting and sustainable ROE .
- Retention risk moderate: No severance or change‑of‑control protections and cash-settled PSUs that require continued employment through payout—combines retention hooks with shareholder‑friendly exit economics .
- Governance balance: Split Chair/CEO and Lead Independent Director structure offsets dual‑role concerns; majority independent board and committee independence; however, concentrated insider ownership and related‑party ties warrant ongoing monitoring for minority shareholder protections .
- Trading signals: 2024 option exercise removed legacy option overhang; future cash PSU payouts linked to operational outcomes—watch combined ratio trajectory and market share gains through 2026 to gauge incentive realizability and potential payout‑driven liquidity events .