George Joseph
MERCURY GENERALAbout George Joseph
George Joseph is Chairman of the Board at Mercury General Corporation, founder of the Company, and former Chief Executive Officer (1961–2006). He is 103 years old and has served as a director since 1961 (Mercury Casualty predecessor) and at Mercury General since 1985, with deep expertise in underwriting, claims, and rate making . Company performance has rebounded, with 2024 net income of $467,953,442 and underwriting profit of $205,527,611; cumulative TSR value from an initial $100 investment rose to $168.31 by 2024, signaling improved shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercury General Corporation | Chief Executive Officer | 1961–2006 | Founder; led underwriting, claims management, and pricing, shaping the company’s P&C franchise |
| Mercury General Corporation | Chairman of the Board | 1961–Present | Board leadership; oversight of management and capital allocation; separation from CEO role since 2007 |
External Roles
No external public company directorships were disclosed in the proxy for the past five years for Mr. Joseph .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1,152,503 | $1,197,741 | $1,317,802 |
| Annual “one-half-month” Bonus ($) | $49,224 | $350,145 | $55,763 |
| Target Annual Bonus (% of Salary) | — | — | 100% (MIP target for NEOs) |
| Perquisites ($) | $20,841 | $21,192 | $18,650 |
Performance Compensation
Annual Cash Bonus (MIP) – 2024
| Component | Metric/Term | Target | Actual/Payout | Notes |
|---|---|---|---|---|
| Company Performance Multiplier (CPM) | GAAP underwriting profit margin (1 – combined ratio) | 4% target | 100% CPM (combined ratio 0.96; margin 4%) | Company-wide funding basis |
| Individual Performance Multiplier | Discretionary assessment | 100% typical | 100% for Mr. Joseph | Committee discretion |
| Annual Non-Equity Incentive ($) | Payout under MIP | $1,294,198 target-based calc | $1,294,198 paid | Approved and paid post-year-end |
Long-Term Incentive Plan (LTIP) – Performance-Based PSUs (Cash-Settled)
| Attribute | Detail |
|---|---|
| Grant Date | February 7, 2024 |
| Target PSUs (units) | 23,527 |
| Maximum PSUs (units) | 35,290 (150% of target) |
| Performance Period | 3 years ending December 31, 2026 |
| Performance Metrics | Company’s average combined ratio and growth in market share, weighted equally; plus individual performance component |
| Settlement/Payout Basis | Cash payout per unit based on average share price near end of performance period; continued employment required through payment date |
| FY-2024 Marked Payout Value of Unearned Units | $1,564,042 |
The Company does not grant equity awards settled in shares; LTIP awards are cash-settled phantom stock units, and the Company did not time grants around material nonpublic information .
Equity Ownership & Alignment
| Ownership Item | Value |
|---|---|
| Beneficial Ownership (Shares) | 19,567,934 |
| Ownership (% of Outstanding) | 35.3% |
| Options Outstanding (Exercisable/Unexercisable) | None |
| Unvested PSUs (units) | 23,527 (target) |
| Payout Value of Unvested PSUs | $1,564,042 (as of FY-2024 year-end) |
| Hedging/Pledging | Prohibited for directors and executives |
Shares pledged as collateral are prohibited by policy; no pledging disclosures for Mr. Joseph were made .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment Agreement | None; at-will, may be terminated at any time at Board’s discretion |
| Severance | No severance agreements for executive officers |
| Change-of-Control | No parachute or change-of-control arrangements |
| Deferred Compensation/SERP | None beyond qualified 401(k) plan; no SERP |
| Clawback Policy | Adopted Oct 2, 2023 under Rule 10D-1; recovers erroneously awarded incentive compensation for three fiscal years preceding restatement |
| Non-Compete/Non-Solicit | Not disclosed |
Perquisites Detail (Historical)
| Perquisite | 2022 | 2023 | 2024 |
|---|---|---|---|
| Auto & Parking ($) | $9,500 | $7,750 | $5,088 |
| Club Dues ($) | $11,341 | $13,442 | $13,562 |
| Total Perquisites ($) | $20,841 | $21,192 | $18,650 |
Board Governance
- Board Service: Chairman since 1961; Director since 1985 (Mercury General), predecessor board service since 1961 .
- Independence: Not independent (executive officer); five directors determined independent (Braunegg, Cappello, Ellis, Little, Marcon) .
- Committee Roles: Member, Investment Committee (chair rotated in 2025 to Braunegg); not on Audit or Compensation or Nominating/Governance .
- Board Leadership: CEO and Chairman roles separated since 2007; Lead Independent Director (Marcon) oversees non-management sessions .
- Attendance: Board met four times; each director attended ≥75% of aggregate Board and committee meetings in 2024; four executive sessions of non-management directors were held .
Performance & Track Record (Company-Level)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Cumulative TSR – Company ($100 basis) | $113.69 | $120.71 | $81.33 | $92.34 | $168.31 |
| Cumulative TSR – Custom Peer Group ($100 basis) | $103.14 | $128.24 | $141.87 | $160.07 | $208.01 |
| Cumulative TSR – S&P 500 P&C Index ($100 basis) | $106.96 | $127.58 | $151.65 | $168.05 | $227.67 |
| Net Income (Loss) ($) | $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 |
Director Compensation (Context)
- Non-employee directors receive cash fees; no equity grants to directors. Employees (including Mr. Joseph) do not receive director equity; 2024 director cash fees apply only to non-employee directors .
- Mr. Joseph’s “Director Fees” in All Other Compensation were $56,000 (2022) and $60,000 (2023), but $0 in 2024 .
Compensation Committee Analysis
- Members: Ramona L. Cappello (Chair), George G. Braunegg, Joshua E. Little; all independent; met three times in 2024 .
- Methodology: 2024 compensation not benchmarked to peers; committee relied on experience; executive team historically sets other officers’ compensation under a 1986 board resolution .
- Program Design: Simple mix—base salary, annual cash bonuses (MIP), long-term cash incentives (LTIP PSUs), broad-based benefits; no severance, no change-of-control, no SERP/deferred comp; clawback in place .
- Say-on-Pay: 2024 approval exceeded 96% .
Related Party Transactions (Red Flags/Monitoring)
| Related Party | Relationship | Transaction | Amount |
|---|---|---|---|
| Metro West Insurance Services, Inc. | Beneficial owner is George Toney (Mr. Joseph’s nephew; brother of Company’s Chief Actuary) | Agency commissions (standard contract) | $1,141,498 (2024) |
| Alan Joseph | Mr. Joseph’s son; Company employee | Compensation (Portfolio Underwriter) | $154,515 (2024) |
The Nominating/Corporate Governance Committee oversees related party transactions under a formal policy; certain transactions have standing pre-approval per policy .
Investment Implications
- Alignment and control: Mr. Joseph’s 35.3% beneficial ownership creates strong alignment with shareholders; hedging/pledging prohibitions further reduce misalignment risks .
- Pay-for-performance: Annual MIP tied directly to underwriting profitability (combined ratio) with a 4% margin target; 2024 CPM at 100% and payout of $1.29M indicate direct linkage to financial outcomes . LTIP PSUs are cash-settled and tied equally to combined ratio and market share growth over a 3-year period, reinforcing multi-year execution and retention via continued employment conditions .
- Governance checks: Dual-role risks (Chairman, largest shareholder; spouse and son on the board) are mitigated by separation of CEO/Chairman roles, lead independent director, and majority-independent board/committees .
- Transition/retention risk: No employment agreements, severance, or change-of-control benefits reduce entrenchment risk but place greater weight on ongoing performance-based cash incentives; clawback policy aligns with regulatory best practice .
- Trading signals: Lack of share-settled equity and option overhang (none outstanding) reduces mechanical insider selling pressure; PSUs are cash-settled at period end, valued on stock price, tying payouts to share performance while avoiding dilution . High say-on-pay approval (>96%) supports stability of compensation structure .