Craig R. Smiddy
OLD REPUBLIC INTERNATIONALAbout Craig R. Smiddy
Craig R. Smiddy, age 60, has served as Old Republic International Corporation’s President and Chief Executive Officer since 2019 and as a director since 2019; he chairs the Board’s Executive Committee . Under his tenure, total shareholder return rose from an indexed 100 at year-end 2019 to 229.23 at year-end 2024, outpacing the approved peer group’s 182.62 . ORI’s pay-for-performance design links Smiddy’s incentives to underwriting results and long-term book value/operating ROE; in 2024, consolidated net earned premiums and fees grew 13.3% (max payout) and the combined ratio was 93.9% (above-threshold), contributing to his PRP payout of $2.416M .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Old Republic International Corporation | President & Chief Operating Officer | Jun 2018–2019 | Elevated corporate leadership ahead of CEO election |
| Old Republic International Corporation | President & Chief Executive Officer | 2019–present | Leads enterprise; Board director and Executive Committee Chair |
| Old Republic General Insurance Group, Inc. | Chief Operating Officer → President | 2013–2018 | Led general insurance segment operations |
External Roles
- No other public company directorships are disclosed for Smiddy in the proxy .
Fixed Compensation
Multi-year compensation mix (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $890,000 | $926,667 | $985,000 |
| Legacy Bonus (pre-PRP) | $1,451,018 | $0 | $0 |
| Stock Awards | $1,638,000 | $1,933,420 | $3,387,359 |
| Option Awards (Grant-date value) | $554,400 | $652,000 | $854,074 |
| Non-Equity Incentive (PRP payout) | — | $2,278,211 | $2,416,698 |
| All Other Compensation | $6,592 | $37,019 | $36,024 |
| Total | $4,540,010 | $5,887,317 | $7,679,154 |
Annual cash incentive framework:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| PRP Target Bonus % of Salary | N/A | 165% | 175% |
| PRP Target ($) | N/A | $1,529,000 | $1,723,750 |
| PRP Actual Payout ($) | N/A | $2,278,211 | $2,416,698 |
Performance Compensation
2024 PRP annual bonus (paid in 2025; vesting requires employment on payment date) :
| Component | Weight | Target | Actual | Payout ($) | Vesting/Timing |
|---|---|---|---|---|---|
| Net Earned Premiums & Fees (YoY change, consolidated ex-Title/RFIG run-off) | 35% | 5.0% (objective); 2.0% (threshold); 8.0% (max) | 13.3% → 200% of component | $1,206,625 | Cash, paid following fiscal year; employment required |
| Combined Ratio (consolidated ex-RFIG run-off) | 35% | 92.5% (objective); 99.0% (threshold); 89.0% (max) | 93.9% → 89.2% of component | $538,155 | Cash, paid following fiscal year; employment required |
| Discretionary (individual performance) | 30% | 0–200% scale | Committee-determined | $671,918 | Cash, paid following fiscal year; employment required |
| Total | 100% | — | — | $2,416,698 | — |
2024 PSU long-term equity (3-year performance period ending 12/31/2026) :
| Metric | Weight | Threshold | Objective | Maximum | Award |
|---|---|---|---|---|---|
| 3-Year Avg Operating ROE | 50% | 6% | 11% | 18% | 86,737 PSUs (target) |
| 3-Year Book Value Annual Compound Total Return per Share (incl. dividends) | 50% | 6% | 11% | 18% | 86,737 PSUs (target) |
| Vesting/Payout | — | — | — | — | Stock settled within 90 days of certification; 0–200% earned; cash for dividend equivalents |
2024 RSU and Option grants (time-based) :
| Instrument | Grant Date | Amount | Terms | Exercise Price | Vesting |
|---|---|---|---|---|---|
| RSUs | 03/06/2024 | 28,912 units | Stock settled; dividend equivalents paid in cash | — | 3 equal installments starting 03/06/2025 |
| Options | 03/06/2024 | 186,479 options | 10-year term | $29.29 | 3 equal installments starting 03/06/2025 |
Option exercises and stock vested in 2024:
| Item | 2024 Activity |
|---|---|
| Options Exercised (shares) | 14,500 |
| Value Realized on Exercise | $187,050 |
| Restricted Shares Vested (shares) | 50,616 |
| Value Realized on Vesting | $1,525,027 |
Equity Ownership & Alignment
| Ownership/Grant Element | Detail |
|---|---|
| Total Beneficial Ownership | 979,786 shares (0.39% of class) |
| Composition of Beneficial Ownership | Options exercisable within 60 days: 793,297 shares; employee plan shares: 41,461; other shares: 145,028 |
| Options Outstanding (12/31/2024) | Exercisable: 616,980; Unexercisable: 421,999 |
| Unvested RSUs/Restricted Stock (12/31/2024) | 106,986 shares; market value $3,871,823 (at $36.19) |
| PSU (Target) Outstanding | 86,737 units; market value $3,139,012 (at $36.19) |
| Hedging/Pledging | Prohibited for directors and executive officers |
| Stock Ownership Guidelines | CEO: 6× base salary; 5 years to comply; directors increased to $400,000 ownership in 2025 |
| Guideline Compliance | All directors/executives meet or are within the compliance window |
Employment Terms
- Employment contracts and severance: ORI has no employment agreements or severance/golden parachute arrangements for executives; all employees are at-will .
- Change-of-control (CIC) treatment: Awards under 2022 Plan accelerate if not assumed, or if assumed and terminated within 36 months post-CIC; PRP vests on termination without cause in connection with CIC; KEPRP balances become immediately vested/payable on CIC .
Potential payments (illustrative, assuming CIC at 12/31/2024, stock at $36.19):
| Scenario | PRP (Target) | Acceleration of Equity | KEPRP Balance | Total |
|---|---|---|---|---|
| CIC (no termination) | $0 | $11,211,116 | $3,854,076 | $15,065,192 |
| Involuntary/Constructive Termination post-CIC | $1,723,750 | $11,211,116 | $3,854,076 | $16,788,942 |
| Death/Disability | $1,723,750 | $11,211,116 | $3,854,076 | $16,788,942 |
Clawback policy and trading rules:
- Clawback: ORI will promptly seek recovery of erroneously awarded compensation upon an accounting restatement, per NYSE Section 303A.14 and SEC Rule 10D-1; recovery is required regardless of individual knowledge; impracticability exceptions defined by the Compensation Committee .
- Securities Trading Policy: prohibits short sales, derivatives, margin accounts, pledging; anti-hedging/pledging enforced .
Board Governance
- Board roles: Smiddy is a Director since 2019 and chairs the Executive Committee; the Board’s Chairman is separate (Spencer LeRoy III); all directors except the CEO are independent; a Lead Independent Director is designated .
- Committees and membership: Audit, Compensation, and Governance & Nominating consist exclusively of independent directors; Smiddy is not a member of those committees and does not receive director fees; he leads executive sessions via the Executive Committee and shareholder engagement dialogues .
- Attendance: In 2024, the Board met quarterly; each incumbent director attended at least 75% of Board and committee meetings .
Director compensation framework (non-employee directors; Smiddy excluded):
- 2025 changes: Annual Board fee increased to $195,000; added $75,000 in annual RSUs (one-year vest); committee chair fees maintained; membership fees removed .
- Statement: “Directors who are employees…receive no compensation for their services as directors…” .
Compensation Committee Analysis and Peer Group
- Compensation Committee: comprised of independent directors; retains FW Cook as independent consultant; shifts larger share of executive pay to long-term equity and performance-based award structures .
- Peer group (approved): American Financial Group, AIG, W.R. Berkley, Chubb, Cincinnati Financial, CNA Financial, Fidelity National Financial, First American Financial, The Hartford, Stewart Information Services, Travelers .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approvals: 94% approval in 2024 for 2023 pay; 94.8% approval in 2023 for 2022 pay .
- Engagement: CEO Smiddy led outreach to largest institutions, informing compensation transparency and the adoption of long-term PSU metrics (book value TRS, operating ROE) .
Investment Implications
- Pay-for-performance alignment: Smiddy’s 2024 PRP cash bonus was driven by underwriting and premium growth (max payout on growth, above-threshold on combined ratio), consistent with ORI’s focus on underwriting income and net operating income as key pay-versus-performance measures . PSU metrics directly tie equity to multi-year operating ROE and book value TRS .
- Retention and selling pressure: Significant unvested equity (106,986 RSUs and 86,737 PSUs) and 421,999 unexercisable options suggest continued retention hooks; scheduled vesting begins March 2025 for 2024 RSUs/options, potentially creating periodic settlement-related selling needs; anti-hedging/pledging policy mitigates alignment risks .
- Governance checks: No employment contracts or golden parachutes; CIC acceleration applies only if awards are not assumed or after qualifying terminations, limiting guaranteed payouts; a robust clawback policy and independent Compensation Committee oversight support investor alignment .
- Performance track record: TSR outperformed peers over 5 years (229.23 vs. 182.62), reinforcing that long-term incentives are reasonably linked to shareholder value creation; annual PRP targets and outcomes reflect strong 2024 operational execution .