Victor Joseph
MERCURY GENERALAbout Victor Joseph
Victor G. Joseph is President and Chief Operating Officer of Mercury General Corporation (NYSE: MCY) and has been employed by the company since 2009; he served as VP & Chief Underwriting Officer (2017–2022), EVP & COO (2022–2023), and was appointed President & COO in January 2024. He is age 38 and has served on the Board since 2024; he is the son of Founder/Chairman George Joseph and Director Vicky Wai Yee Joseph and is not independent due to his executive role and family relationship . Corporate performance improved notably in 2024 with GAAP underwriting profit margin at 4%, CPM=100% for bonuses, net income $467.95M, and cumulative TSR value rising to $168.31 (vs. $92.34 in 2023) .
Revenue and EBITDA trend:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $4,120,838,000* | $4,509,008,000* | $5,355,445,000* |
| EBITDA ($USD) | $(571,093,000)* | $195,837,000* | $679,137,000* |
| *Values retrieved from S&P Global. |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercury General (MCY) | VP & Chief Underwriting Officer | Jul 2017 – Jan 2022 | Led underwriting function |
| Mercury General (MCY) | EVP & Chief Operating Officer | Jan 2022 – Dec 2023 | Oversaw company operations |
| Mercury General (MCY) | President & Chief Operating Officer | Jan 2024 – Present | Operations leadership during period of improved underwriting profitability (CPM=100% in 2024; net income rose) |
External Roles
- The proxy biography section lists public company directorships held in the past five years and does not disclose any external public company boards for Victor Joseph .
Fixed Compensation
| Component ($USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $491,077 | $541,384 | $818,650 |
| Bonus | $21,784 | $226,118 | $35,051 |
| Stock Awards (fair value) | — | — | $452,695 (PSUs granted 2/7/2024) |
| Non-Equity Incentive Plan Compensation | — | — | $802,308 |
| All Other Compensation | $10,675 | $11,550 | $12,075 |
| Total | $523,536 | $779,052 | $2,120,779 |
Notes:
- Annual base salary for 2024 was set at $812,400 (8.3% increase), though salary paid was $818,650 reflecting payroll timing .
Performance Compensation
| Program | Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| MIP (2024) | GAAP underwriting profit margin (CPM) | 100% corporate performance; subject to individual multiplier | 4% (CPM target 1.0; capped at 1.5) | 4% (combined ratio 0.96) → CPM=100% | $802,308 paid to Victor (Non-Equity Incentive) | Approved and paid post-year in Q1, per plan procedures |
| PSUs (LTIP, granted 2/7/2024) | Average combined ratio and growth in market share (equally weighted) + individual performance | N/A (performance-based cash-settled phantom stock) | Target 11,716 PSUs; Threshold 5,858; Max 17,574 | In-progress (3-year period ending 12/31/2026) | Cash payout depends on avg share price and performance; max 150% of target | Vests and pays in cash after performance period, subject to continued employment |
| MIP (2023) | GAAP underwriting profit (CPM) and individual performance | 75% CPM; 25% individual | $190,000,000 underwriting profit target | CPM=0% (no company-funded portion) | Individual performance bonuses paid; Victor Bonus $226,118 | Paid after approval; timing per MIP |
Equity Ownership & Alignment
| Item | 2023 | 2024 | 2025 |
|---|---|---|---|
| Beneficial Ownership (Common Shares) | 33 shares | 34 shares | 34 shares |
| Ownership % of Outstanding | <1.0% | <1.0% | <1.0% |
| Unvested PSUs (target) | — | 11,716 units (granted 2/7/2024) | 11,716 units (as of 12/31/2024 FY-end) |
| Market/Payout Value of Unvested PSUs | — | $778,860 | $778,860 (FY-end 2024 disclosure) |
| Options (exercisable/unexercisable) | — | — | — |
| Pledging/Hedging | Prohibited by policy for named executive officers | Prohibited | Prohibited |
Policy notes:
- Executive hedging and pledging of company stock are prohibited; clawback policy adopted effective Oct 2, 2023, mandates recovery of erroneously awarded incentive-based compensation for restatements .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment agreement | None; executives are at-will and may be terminated at the Board’s discretion |
| Severance | No severance agreements; termination benefits may be paid as needed |
| Change-of-control | No parachute arrangements; only cash bonuses awarded and earned but unpaid at the date of change of control would be paid |
| Deferred comp | None beyond qualified 401(k) plan; no SERP |
| Clawback | Mandatory recovery for erroneously awarded incentive comp (Rule 10D‑1; NYSE) |
| Hedging/Pledging | Prohibited for named executive officers |
Board Governance
- Director since 2024; dual role as President & COO and director; not independent due to executive status and family relationship with Chairman George Joseph .
- Committees: Member, Investment Committee (appointed Feb 9, 2024; continues on committee) .
- Attendance: Board held 4 meetings in 2024; each director attended at least 75% of aggregate Board and committee meetings .
- Independence architecture: Majority independent board; Lead Independent Director presides at executive sessions (4 sessions in 2024); lead independent is Martha E. Marcon (also Audit Chair; Nominating/Corporate Governance former Chair) .
- Director fees: Employee directors (George Joseph, Gabriel Tirador, Victor Joseph) are compensated as executives and do not receive director equity; non‑employee directors receive per‑meeting fees and retainers; no equity grants to non‑employee directors . Starting 2024, employee directors no longer receive director fees .
Director Compensation (Context for Board Service)
| Name | 2024 Cash Fees |
|---|---|
| George G. Braunegg | $100,800 |
| Ramona L. Cappello | $79,300 |
| James G. Ellis | $86,000 |
| Vicky Wai Yee Joseph | $62,400 |
| Joshua E. Little | $95,200 |
| Martha E. Marcon | $127,600 |
Fee structure: $7,800 quarterly fee and $7,800 per Board meeting; committee chairs/members receive additional per‑meeting fees; Lead Independent Director retainer $25,000; non‑employee directors receive no equity .
Compensation Structure Analysis
- Mix shift to long-term cash-settled PSUs: MCY introduced the 2024 LTIP with performance-based cash PSUs (phantom stock), avoiding equity grants and aligning payouts to average share price and underwriting/market share targets; Victor’s target PSUs equal 60% of base salary .
- Annual bonus rigor improved in 2024: CPM tied to a 4% GAAP underwriting profit margin target; actual at 4% yielded CPM=100%, with individual multipliers largely at 100% (Victor’s payout $802,308) .
- 2023 bonus discretion: Company CPM=0% given underwriting loss; bonuses paid under individual performance component, evidencing discretion use in down year .
- No severance/CoC packages; clawback adopted; hedging/pledging prohibited—shareholder-friendly governance constraints .
Compensation Peer Group and Say‑on‑Pay
- Peer group used for performance TSR benchmarking includes P&C insurers such as Allstate, Progressive, Chubb, Travelers, Erie, Hanover, Markel, Berkshire ‘B’, etc. (full list in proxy) .
- Say‑on‑pay approval: >94% support at 2023 annual meeting; Compensation Committee made no specific changes for 2024 in response .
Performance & Track Record
- Pay vs Performance (company-wide): Cumulative TSR value moved from $92.34 (2023) to $168.31 (2024); net income improved to $467.95M and underwriting profit to $205.53M in 2024 .
- 2024 operational incentives: CPM tied to underwriting margin reached target (4%), supporting aligned bonus outcomes .
- Strategic program adoption: Introduction of LTIP PSUs in 2024 broadens retention/incentive toolkit for NEOs including Victor .
Risk Indicators & Red Flags
- Dual-role and family ties: Victor is an executive and director; son of the controlling founder and Chairman—raises independence optics; however, board maintains majority independence and robust committee structure .
- Minimal personal share ownership: Beneficial ownership is 34 shares (<1%), with incentives primarily cash-settled PSUs—limited “skin-in-the-game” alignment via direct equity .
- Discretionary bonuses in down year: 2023 CPM=0%, yet individual bonuses paid—monitor committee rigor in weak underwriting cycles .
- Positive governance controls: No severance or CoC parachutes; clawback effective 2023; hedging/pledging banned .
Investment Implications
- Incentive alignment is increasingly tied to underwriting profitability and market share growth (via CPM and PSUs), which should support disciplined pricing and growth—watch combined ratio trajectory and PIF trends for payout sensitivity .
- Retention risk appears contained near term (3‑year PSU schedule to 12/31/2026; strong 2024 payouts), but the absence of equity ownership by Victor reduces long-term equity alignment; monitor future LTIP cycles and any move toward share‑settled awards .
- Governance optics: Dual-role and family control may limit independence; however, majority‑independent board, active lead independent director, and committee architecture mitigate governance risk—continue tracking say‑on‑pay and committee decisions in low-CPM years .
- Trading signals: No options outstanding and PSUs are cash-settled; insider selling pressure is likely low from expiring options. Monitor Form 4s for cash PSU payouts in 2026 and any open‑market transactions; beneficial ownership remains de minimis .