Theodore Stalick
MERCURY GENERALAbout Theodore Stalick
Theodore R. Stalick is Senior Vice President and Chief Financial Officer (principal financial officer and principal accounting officer) of Mercury General Corporation; he has served as CFO since 2001 and was age 60 as of February 8, 2024. He is a Certified Public Accountant with a B.S. in Business Administration (Accounting/Finance) and an MBA with a Business Analytics concentration; he oversees enterprise risk management including cybersecurity and chairs Mercury’s ERM Committee . Company performance has rebounded under recent execution: 2024 net income was $468.0M and underwriting profit $205.5M, versus losses in 2022 and 2023; cumulative TSR (from a $100 base) reached $168.31 in 2024, outpacing the Company’s custom peer group and the S&P 500 P&C Insurance Index for that period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercury General | Controller; later SVP & CFO | Controller: 1997–2001; CFO since 2001 | Internal finance leadership; elevated to CFO to drive ERM and financial oversight |
| Cumberland Surety | Chief Financial Officer | 1995–1997 | Led surety insurer finance before joining Mercury |
| American Bonding Company | Vice President & Treasurer | n/a | Treasury leadership in bonding/insurance sector |
| The Walt Disney Company | Senior Auditor | n/a | Big-company audit discipline; controls rigor |
| Coopers & Lybrand | Public Accounting | Began 1986 | Foundation in public accounting; CPA track |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No public company directorships or external board roles disclosed in proxies |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $820,307 | $841,770 | $880,360 |
| Target Bonus % of Salary | Discretionary/no target | Discretionary/no target | 70% of salary |
| Actual MIP (Non-Equity Incentive) ($) | — | — | $700,000 |
| “Bonus” Column ($) | $35,885 | $198,760 | $37,918 |
Notes:
- 2024 target bonus calibrated under Mercury Incentive Plan (MIP); 2023 and 2022 executive bonuses were discretionary without set targets .
Performance Compensation
Annual MIP (2024)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| GAAP underwriting profit margin (1 − combined ratio), CPM formula | 100% corporate; subject to individual multiplier | 4% margin target (CPM capped at 1.5x) | 4% achieved (combined ratio 0.96 → CPM 100%) | $700,000; individual performance multiplier 115% | Cash bonus, approved Q1 post-year |
Long-Term PSUs (Granted Feb 7, 2024)
| Grant Date | Instrument | Target Units | Threshold | Max | Grant-Date Fair Value | Metrics & Weighting | Performance Period / Vesting |
|---|---|---|---|---|---|---|---|
| 02/07/2024 | Performance-based phantom stock units (PSUs, cash-settled) | 11,000 | 5,500 | 16,500 | $425,030 | Avg combined ratio and market share growth each fiscal year (equally weighted) plus individual performance; max payout 150% | Earned after 3-year period ending Dec 31, 2026; cash payout based on average share price near period end; requires continued employment through payment date |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Common) | 5,734 shares as of April 1, 2025; less than 1% outstanding |
| Beneficial Ownership (Prior Year) | 5,704 shares as of March 26, 2024; less than 1% outstanding |
| Unvested PSUs | 11,000 target units outstanding at 12/31/2024; estimated payout value $731,263 (market-based estimate) |
| Options (Exercisable/Unexercisable) | None outstanding for Stalick at 12/31/2023 and 12/31/2024 |
| Pledging / Hedging | Prohibited for named executive officers; pledging, margin purchases, hedging/monetization transactions barred |
| Ownership Guidelines | No specific executive stock ownership guidelines disclosed in proxies; equity awards are cash-settled PSUs under LTIP |
Insider selling pressure indicators:
- No option exercises or stock vesting reported for Stalick in 2024; none in 2023 . Attempt to fetch recent Form 4 transactions encountered an authorization error; proxy tables indicate limited transactional activity by Stalick in 2023–2024 .
Employment Terms
- No employment agreements with fixed terms; executive employment may be terminated at any time at the Board’s discretion .
- Severance and change-of-control: No severance agreements and no change-of-control or “parachute” arrangements; 2024 proxy notes no CIC arrangements other than payment of earned but unpaid cash bonuses at the time of a change of control .
- Clawback: NYSE Rule 10D-1 compliant policy adopted October 2, 2023; mandatory recovery of erroneously awarded incentive-based compensation for three years preceding any required restatement .
- Hedging/pledging: Comprehensive prohibition for executives and directors (hedging, margin purchases, pledging collateral) .
- Deferred comp/SERP: None aside from qualified 401(k); no supplemental executive retirement plan .
- Perquisites: Personal auto use/parking allowance only; Stalick perqs were $0 (2024), $6,760 (2023), $7,679 (2022) .
Company Performance Context
Pay-versus-Performance Metrics (Company-wide)
| Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Net Income (Loss) ($) | $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 |
| Value of $100 Investment – Company TSR | $113.69 | $120.71 | $81.33 | $92.34 | $168.31 |
| Value of $100 Investment – Custom Peer Group TSR | $103.14 | $128.24 | $141.87 | $160.07 | $208.01 |
| Value of $100 Investment – S&P 500 P&C Index TSR | $106.96 | $127.58 | $151.65 | $168.05 | $227.67 |
Core Financials (S&P Global)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $4,120,838,000* | $4,509,008,000* | $5,355,445,000* |
| EBITDA ($) | $(571,093,000)* | $195,837,000* | $679,137,000* |
Values retrieved from S&P Global.*
Say-on-Pay & Compensation Committee Practices
- Shareholders approved NEO compensation by more than 96% of votes cast at the 2024 annual meeting; the Compensation Committee made no policy changes for 2025 based on that outcome .
- Shareholders approved NEO compensation by more than 94% of votes cast at the 2023 annual meeting; no policy changes were deemed necessary for 2024 .
- Benchmarking: The Compensation Committee did not use external compensation benchmarking to set 2024 executive pay; decisions relied on committee and management experience and internal merit considerations .
- Compensation Committee members: Ramona L. Cappello (Chair), George G. Braunegg, Joshua E. Little; all independent .
Performance Compensation Structure Analysis
- Shift toward cash-settled PSUs: 2024 introduced LTIP PSUs for executives that settle in cash based on stock price and performance outcomes, reducing dilution but preserving price exposure; max payout 150% .
- MIP formulaic tie to underwriting profitability: 2024 bonuses linked fully to corporate combined ratio outcome (CPM target 4%) plus individual multiplier; Stalick received a 115% individual multiplier, signaling above-target individual assessment .
- Guaranteed vs at-risk: 2024 total compensation included substantial at-risk components (MIP and PSUs) alongside salary; the company avoids complex guaranteed arrangements (no severance/CIC; no deferred comp outside 401(k)) .
Track Record, Value Creation, and Execution Risk
- Tenure and domain expertise: CFO since 2001; CPA; leads ERM and cybersecurity oversight—strength in capital discipline and control environment .
- Value creation markers: 2024 net income and underwriting profit recovery, and positive TSR trajectory versus 2022–2023 downturns, align MIP outcomes with operational rebound .
- Execution risks: Cash-settled PSU design requires sustained performance across combined ratio and market share over 2024–2026 and continued employment through payout, embedding retention and operating discipline .
Investment Implications
- Alignment: MIP tied to underwriting profitability and PSUs tied to combined ratio/market share plus stock price exposure creates meaningful pay-for-performance linkage; prohibition on hedging/pledging and adoption of a clawback enhance governance quality .
- Retention and selling pressure: Required continued employment to receive PSU payouts and absence of option exercises for Stalick in 2023–2024 suggest low immediate selling pressure; ownership is modest but coupled with unvested PSUs .
- Policy conservatism: No severance/CIC arrangements and no deferred comp/SERP limit guaranteed pay risk; high say-on-pay support (>96% in 2024; >94% in 2023) indicates broad shareholder acceptance of current structure .
- Performance leverage: Rebound in underwriting profit and net income, alongside improving EBITDA and revenues, supports constructive near-term incentives; investors should monitor combined ratio and market share trajectories through the 2026 PSU performance period for payout risk calibration .