Adam Pollitzer
NMI HoldingsAbout Adam Pollitzer
Adam S. Pollitzer is President and CEO of NMI Holdings, Inc. (NMIH) and a director since 2022; age 46, with a BBA from the University of Michigan (Ross). He joined NMI in May 2017 as EVP/CFO and became CEO on January 1, 2022, bringing 20+ years of mortgage insurance and investment banking experience from J.P. Morgan Securities LLC . In 2024, NMI posted record revenue ($651.0M), net income ($360.1M), ROE (17.4%), and EPS ($4.43), while shares rose 23.9% during the year, illustrating strong operating execution under Pollitzer’s leadership .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NMI Holdings, Inc. | President & CEO; Director | 2022–Present | Responsible for day-to-day management, financial performance, and long-term strategy . |
| NMI Holdings, Inc. | EVP & CFO | 2017–2021 | Led finance; contributed to growth and credit performance positioning . |
| J.P. Morgan Securities LLC | Managing Director, Corporate & Investment Banking (Insurance Coverage) | Pre-2017 | Led advisory and capital raising for North American insurance companies . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | None disclosed in proxy/8-Ks . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 | Notes |
|---|---|---|---|---|
| Base Salary ($) | 800,000 | 900,000 | 975,000 | 2024 increase reflects competitive alignment vs MI peers . |
| Target Bonus (% of Salary) | — | — | 175% | CEO target set at 175% of base salary for 2024 . |
| Non-Equity Incentive Paid ($) | 1,620,000 | 2,699,550 | 3,071,250 | Committee approved 180% of target based on performance . |
| Executive Cash Allowance ($) | 38,400 | 38,400 | 38,400 | Standardized allowance; part of “All Other Comp” . |
| 401(k) Match ($) | 17,250 | 17,250 | 17,250 | Included in “All Other Comp” . |
Performance Compensation
Annual Bonus Framework (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual Result | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted ROE | 30% | 8.0% | 12.0% | 16.0% | 18.4% | 180% |
| Adjusted Net Operating Income ($M) | 30% | 205.5 | 308.9 | 416.8 | 478.1 | 180% |
| New Insurance Written ($B) | 25% | 35.0 | 40.5 | 45.0 | 46.0 | 180% |
| Adjusted Expense Ratio | 15% | 24.50% | 22.50% | 20.50% | 20.22% | 180% |
- Committee approved bonuses for NEOs at 180% of target based on exceeding maximum on all metrics .
Long-Term Incentives (2024 grants)
| Grant Type | Grant Date | Units/Target (#) | Grant Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|
| RSUs | 2/7/2024 | 81,277 | 2,437,497 | 40% each on 1st and 2nd anniversaries; 20% on 3rd anniversary . |
| PRSUs (BVPS) | 2/7/2024 | 81,277 (target) | 2,437,497 | Earned on 3-year BVPS CAGR; 50% @7.5%, 100% @10.0%, 200% @17.5%; linear interpolation; vests at end of performance period (2024–2026) . |
- 2022 PRSU cycle (2022–2024) paid at 200% based on 21.9% BVPS CAGR, evidencing strong long-term value creation linkage .
- Program design emphasizes variable pay; base salary was 13% of CEO’s 2024 target comp; remainder at-risk (cash + equity) .
Pay-for-Performance and Say-on-Pay
- Most important metrics used to link pay and performance: BVPS, ROE, Net Operating Income .
- 2024 Say-on-Pay approval: ~94.5% support for prior year compensation program .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 447,756 shares beneficially owned; includes 386,631 shares held directly and 20,375 vested options; <1% of shares outstanding (78,238,719) . |
| Ownership Guidelines | CEO must hold 5x base salary; executives must retain 50% of net shares until guideline met; all NEOs met guidelines as of 12/31/2024 . |
| Hedging/Pledging | Absolute prohibition on hedging and pledging; no margin accounts or collateral pledges permitted . |
| Vested vs Unvested | Proxy details show vested options count; RSU/PRSU unvested share counts for CEO not itemized in beneficial ownership table . |
Employment Terms
| Provision | Non‑CIC Severance | Change in Control (CIC) Severance |
|---|---|---|
| Eligibility | NEO participates in Severance Plan . | Double-trigger required (CIC + qualifying termination within 24 months or within 6 months pre-CIC with definitive agreement) . |
| Cash Severance | Generally 12 months base salary and 12 months healthcare premiums for CEO upon Severance Termination (as of 12/31/2024) . | Lump sum = (Base Salary + Target Bonus) × 2.0x for CEO; plus pro‑rated target bonus for year of termination; plus 24 months COBRA premiums . |
| Equity Treatment | RSUs: pro‑rata vesting if terminated without cause on/after first anniversary of grant; PRSUs remain outstanding to end of period and vest pro‑rata if earned (no acceleration) . | Upon CIC: all RSUs and options vest; PRSUs earn at greater of performance-to-date (through quarter‑end before CIC) or target, and vest immediately; if termination occurs post‑CIC, options’ exercise window extended per plan . |
| Clawback | Compensation Recovery Policy effective Sep 13, 2023; applies to erroneously awarded incentive compensation after restatements (SEC/Nasdaq compliant) . | |
| Tax Gross‑Ups | None (no excise or other tax gross‑ups) . |
Selected CEO illustrative payout sensitivities (Company estimates at 12/31/2024, $36.76 stock): Termination Following CIC total $18.99M; “No Termination Following CIC” equity vesting value $11.83M; death/disability equity value $9.05M (per tabulated assumptions) .
Board Governance
- Role: Pollitzer serves as President & CEO and director (non‑independent); he does not receive separate director compensation .
- Board structure: Executive Chairman role is separate from CEO; Lead Independent Director established with robust duties; 7/9 directors are independent; all committees are fully independent .
- Committees: Pollitzer is not a member of Audit, Governance & Nominating, Risk, or Compensation Committees .
- Attendance: Board met 8 times in 2024; all directors met policy (≥75% meetings); broad attendance was strong across board and committees .
Director Service and Compensation (Pollitzer)
| Item | Detail |
|---|---|
| Director Since | 2022 . |
| Independence | Not independent (management director) . |
| Committees | None . |
| Director Fees | Receives NEO compensation, not director retainers/RSUs . |
Company Performance (Context for Pay)
| Metric (FY2024) | Result |
|---|---|
| Total Revenue ($M) | 651.0 |
| Net Income ($M) | 360.1 |
| ROE (%) | 17.4 |
| Diluted EPS ($) | 4.43 |
| NIW ($B) | 46.0 |
| Primary IIF ($B) | 210 |
| 2024 Share Performance | +23.9% for the year |
Compensation Structure Analysis
- Mix shift and leverage: CEO’s package remains heavily at‑risk (cash + equity) with long‑term PRSUs tied to three‑year BVPS growth, reinforcing durable value creation vs. volatile TSR .
- Metric rigor and outcomes: 2024 annual plan used four financially material levers (AROE, Adjusted NOI, NIW, Expense Ratio), each exceeded maximum; payout at 180% of target shows strong linkage to above‑plan operating execution .
- LTI performance realization: 2022 PRSUs paid at 200% on 21.9% BVPS CAGR, magnifying realized comp but aligned to compounding book value growth .
- Governance features: No tax gross‑ups; strict hedging/pledging ban; clawback aligned to SEC/Nasdaq; independent Comp Committee with independent consultant (Semler Brossy) .
- Peer benchmarking: Committee emphasizes MI peers (Enact, Essent, MGIC, Radian) and broader insurance/real estate set without rigid percentile targeting .
Risk Indicators & Red Flags
- Pledging/Hedging: Prohibited (mitigates alignment concerns) .
- Option repricing/tax gross‑ups: None disclosed .
- Related party transactions: None above $120,000 requiring disclosure in 2024 .
- Say‑on‑pay: Strong 94.5% approval in 2024 (low opposition risk) .
- Equity vesting pressure: RSU 40/40/20 cadence and PRSU cliff vesting can create lumpy settlement windows; however, hedging/pledging bans and ownership retention requirements temper selling incentives .
Equity Ownership & Beneficial Holdings (Detail)
| Holder | Shares Beneficially Owned | % Outstanding | Notes |
|---|---|---|---|
| Adam S. Pollitzer | 447,756 | <1% | 386,631 shares directly; 20,375 vested options; balance from other holdings; base outstanding shares 78,238,719 . |
Employment & Contracts
- At‑will employment with annual salary, discretionary bonus eligibility, and equity under omnibus plan, consistent with NEOs’ employment arrangements .
- Severance Plan provides baseline protection (salary and healthcare) based on service; CEO eligible amounts disclosed in potential payments table; CIC plan applies only with double‑trigger .
Investment Implications
- Alignment and retention: High ownership requirement (5x salary), retention requirements, and significant unvested PRSU exposure support retention and alignment; hedging/pledging bans reduce misalignment risk .
- Pay-for-performance: Bonus metrics tightly coupled to ROE, NOI, NIW, and expense discipline; LTI tied to BVPS CAGR (2022–2024 paid at 200%), underpinning durable value creation signals, though elevating realized pay in strong periods .
- Potential selling pressure: RSU 40/40/20 and PRSU vesting at cycle-end can create periodic liquidity events; strict policies and ownership retention rules mitigate but do not eliminate event-driven supply risk .
- Change-in-control: Moderate CIC severance multiple (2.0x) and double-trigger reduce entrenchment concerns while providing continuity; immediate RSU vesting and PRSU “greater of performance-to-date or target” upon CIC are customary and shareholder‑standard terms .
- Governance: Separated Chair/CEO structure, lead independent director, and fully independent committees support oversight integrity amid CEO/Director dual role .