Bradley Shuster

About Bradley Shuster

Founder and Executive Chairman of NMI Holdings since 2012; Executive Chairman and Chairman of the Board; previously CEO (2012–2018), and President (2012–2014). Age 70; education: B.S., UC Berkeley; M.B.A., UCLA; NACD CERT Certificate in Cybersecurity Oversight; also holds CPA and CFA certifications. Under his board leadership, NMI’s performance has strengthened: cumulative TSR value of a $100 investment rose from $68 (2020) to $111 (2024), net income grew from $171.6M (2020) to $360.1M (2024), and BVPS increased from $15.45 (2020) to $29.80 (2024) .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Short-Term Incentive (STIP)

• 2024 payout approved at 180% of total targeted bonus opportunity for NEOs employed at time of payment .
• Objectives included managing costs, high-quality business to achieve sustainable revenues, adjusted operating income, and strong ROE targets (committee retained discretion) .

Long-Term Incentive (LTI)

• 2024 equity mix for NEOs generally 50:50 RSUs/PRSUs; Shuster received RSUs only in 2024 .
• PRSUs earn-out based on cumulative BVPS growth over 3-year period (50% threshold; 100% target; 150% above-target; 200% max; linear interpolation) .

Equity Ownership & Alignment

• Beneficial ownership: 1,045,477 shares (1.3% of outstanding) comprised of 431,337 direct shares, 47,150 in Shuster Family Trust, and 566,990 vested stock options .
• Executive ownership guidelines: Executive Chairman required to hold shares valued at 10x base salary; all NEOs met requirements as of 12/31/2024; 50% post-vesting/exercise retention until compliance .
• Absolute prohibition on hedging and pledging; may not hold securities in margin accounts or pledge as collateral .

Outstanding Equity Awards (as of 12/31/2024)

Upcoming Vesting Events (indicative selling pressure considerations)

Employment Terms

• Severance Plan (all employees including NEOs): upon Severance Termination (workforce reduction/elimination/other reasons at Company discretion), NEOs receive three months’ base salary and health coverage per full year of service, capped at 12 months; as of 12/31/2024, Shuster eligible for 12 months .
• CIC Severance Plan (double-trigger): Shuster designated with 2.0x severance multiple and 24-month COBRA period; benefits include lump-sum of 2×(base + target bonus), pro-rated target bonus, COBRA premiums, and accrued amounts; accelerated vesting rules apply for options/RSUs; PRSUs vest based on performance or target at change-in-control per award terms .

Other policies:

• Clawback: adopted Sept 13, 2023; recovery of excess incentive-based compensation after restatement (NASDAQ 5608) .
• No excise tax or other income tax gross-ups for NEOs .

Board Governance

• Board service: Director since 2012; Executive Chairman and Chairman of the Board; not independent; separate roles for Executive Chairman and CEO; Lead Independent Director in place (Steven L. Scheid) .
• Committees: Shuster does not serve on Audit, Governance & Nominating, Risk, or Compensation Committees; all committee members are independent .
• Board meetings and attendance: Board met 8 times in 2024; all directors met attendance policy; majority attended 100%; all directors attended stockholder meeting; regular executive sessions of independent directors .
• Director compensation: As an NEO, Shuster does not receive director retainers/equity for board service (non-employee director package: $110k cash retainer + $140k RSUs; chair/lead fees apply to independent directors) .

Compensation Peer Group (Benchmarking)

• Committee does not fix pay to a specific percentile; uses flexible range with focus on direct MI peers and surveys .
• Compensation consultant Semler Brossy (independent; no conflicts) .

Say-on-Pay & Shareholder Feedback

• 2024 say-on-pay approval: ~94.5% support for 2023 NEO compensation .
• Ongoing engagement: >100 investor meetings in 2024; feedback informs compensation and disclosure enhancements .

Performance & Track Record

• Most important performance measures used to link NEO pay: BVPS, ROE, Net Operating Income .
• 2022 PRSUs vested based on committee certification of performance on 2/12/2025 (for applicable NEOs; Shuster does not receive PRSUs) .

Board Service History and Dual-Role Implications

• Board roles: Executive Chairman and Chairman of the Board since 2019; director since 2012; not independent .
• Independence safeguards: Separate CEO and Executive Chairman roles; Lead Independent Director with defined responsibilities; independent chairs and members for all committees; regular executive sessions of independent directors .
• Attendance/governance: Board met 8 times in 2024; attendance standards met; strong governance profile and stock ownership requirements for directors (5× cash retainer; all but a newer director in compliance as of 12/31/2024) .

Investment Implications

• Alignment: Shuster’s 1.3% beneficial ownership, strict 10× salary ownership guideline, and absolute prohibitions on hedging/pledging signal strong alignment with shareholders .
• Incentives: 2024 STIP paid at 180% of target on strong financial outcomes; LTI for Shuster is time-based RSUs (retention/continuity), while broader NEO PRSUs explicitly tie pay to BVPS growth (long-term value creation) .
• Retention and change-of-control: Double-trigger CIC with 2× multiple and 24-month COBRA; quantified outcomes indicate controlled severance risk with no gross-ups; robust clawback coverage .
• Trading/vesting watchpoints: Scheduled RSU vesting tranches in Feb 2025–2027 could introduce periodic Form 4 activity; however, absolute pledging/hedging bans reduce misalignment risk .
• Governance quality: Separate Chair/CEO, strong independent committee structure, high say-on-pay approval, and active shareholder engagement support governance premium and mitigate dual-role independence concerns .