Frank J. Sodaro
OLD REPUBLIC INTERNATIONALAbout Frank J. Sodaro
Senior Vice President and Chief Financial Officer of Old Republic International (ORI), appointed July 1, 2021; executives are at-will with no employment contracts or standalone severance agreements . ORI’s pay-for-performance program ties Sodaro’s incentives to Net Earned Premiums & Fees growth and the consolidated combined ratio; in 2024 the company delivered 13.3% net earned premiums & fees growth and a 93.9% combined ratio, driving above-target PRP payouts . Company TSR improved from a value-of-$100 index of 133.84 (2021) to 180.36 (2023), with peer TSR at 124.70 and 147.60 respectively, underscoring alignment with shareholder returns .
Fixed Compensation
Base salary and target bonus
| Year | Base Salary ($) | PRP Target Bonus (% of Salary) | Target Bonus ($) |
|---|---|---|---|
| 2022 | 523,000 | N/A (KEPRP regime) | N/A |
| 2023 | 560,667 | 110% | 504,600 |
| 2024 | 590,000 | 110% | 649,000 |
Total cash incentive payouts (PRP/bonus)
| Year | Cash Incentive Type | Total Paid ($) |
|---|---|---|
| 2022 | KEPRP (bonus) | 439,495 |
| 2023 | PRP (non‑equity incentive) | 751,854 |
| 2024 | PRP (non‑equity incentive) | 909,898 |
Performance Compensation
Annual PRP metrics and payout detail (2024)
| Metric | Weighting | Target Structure | Actual Performance | Component Payout ($) | Vesting |
|---|---|---|---|---|---|
| $/% change – Net Earned Premiums & Fees (ex Title & RFIG) | 35% | 2.0% threshold, 5.0% objective, 8.0% max | 13.3% (max achievement 200%) | 454,300 | Must be employed at payment; vests in full upon separation without cause in connection with a change in control |
| % Underwriting Margin/Combined Ratio (consolidated, ex RFIG) | 35% | 99.0% threshold, 92.5% objective, 89.0% max | 93.9% (above-threshold 89.2%) | 202,618 | Same PRP vesting provisions |
| Discretionary | 30% | Committee assessment (0–200%) | Not disclosed; paid amount | 252,980 | Same PRP vesting provisions |
| Total PRP (2024) | — | — | — | 909,898 | — |
Equity awards granted (2024)
| Award Type | Grant Date | Quantity | Exercise/Performance Terms | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| RSUs | 3/6/2024 | 9,032 | N/A | 264,547 | Vest in three equal installments beginning 3/6/2025 |
| PSUs (Target) | 3/6/2024 | 27,100 target (13,550 thr/54,200 max) | 3-year performance period (ends 12/31/2026) | 793,759 | Vest based on performance at period end |
| Stock Options | 3/6/2024 | 60,000 | $29.29 strike; 10-year term | 274,800 | Vest in three equal installments beginning 3/6/2025 |
Prior-year (2023) equity awards snapshot
| Award Type | Grant Date | Quantity | Exercise Price | Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| Restricted Stock (RSA) | 3/16/2023 | 25,000 | N/A | 607,750 | 3 equal installments beginning 3/16/2024 |
| Stock Options | 3/16/2023 | 70,000 | $24.31 | 228,200 | 3 equal installments beginning 3/16/2024 |
Equity Ownership & Alignment
Beneficial ownership (as of March 12, 2025)
| Category | Shares |
|---|---|
| Shares subject to stock options (within 60 days) | 182,600 |
| Shares held by employee plans | 3,900 |
| Other shares beneficially owned | 46,009 |
| Total beneficial ownership | 232,509 |
| Percent of class | Less than 0.1% (**) |
| Restricted stock included in ownership | 23,355 |
Outstanding equity awards at year-end 2024 (unvested/uneared)
| Category | Amount | Valuation Basis |
|---|---|---|
| Unvested RS/RSUs | 32,387 shares | $1,172,086 at $36.19/share (12/31/2024 close) |
| Unearned PSUs (2024 grant) | 27,100 units | $980,749 at $36.19/unit |
| Options (selected lines) | 10,000 @ $20.98 exp 2/20/2028; 15,000 @ $21.12 exp 3/19/2029; 20,000 @ $16.17 exp 3/17/2030; 21,000/9,000 @ $21.30 exp 3/09/2031; 39,960/20,040 @ $24.49 exp 3/10/2032; 23,310/46,690 @ $24.31 exp 3/16/2033; 60,000 @ $29.29 exp 3/06/2034 | Options valued for CIC scenarios using market vs exercise price differential |
Alignment policies and compliance
- Hedging, short sales, options, margin accounts, and pledging company stock are prohibited for directors and executive officers .
- Officer stock ownership guidelines: CEO 6x salary; President 4x; other Office of the CEO 1.5x salary; executives have five years to comply; all directors and executive officers are currently in compliance or within the allowed timeline .
Insider selling/vesting activity
- 2024: No option exercises; 14,985 restricted shares vested (value $450,965) .
- Administrative note: a late Form 4 (Jan 24, 2023) disclosed Sodaro’s surrender of 441 shares upon vesting on May 31, 2022, reflecting tax withholding, not open-market selling .
Employment Terms
- Employment status: At-will; no employment contracts or separate golden-parachute severance agreements for executive officers .
- PRP vesting: requires employment at payment; vests pro rata upon death/disability and in full upon separation without cause in connection with a change in control .
- Equity vesting/separation: RSUs/options forfeit upon separation prior to vesting, except continued vesting after retirement at age ≥65 with ≥10 years of service; PSUs forfeit upon separation unless retirement at age ≥65 with ≥10 years of service, death, or disability (then vesting subject to performance) .
- Change-in-control (CIC) treatment: If awards are not assumed or substituted, unvested equity accelerates at CIC; PRP amounts shown at target for CIC payout modeling .
CIC / termination economics (Frank J. Sodaro; modeled at $36.19/share as of 12/31/2024)
| Scenario | PRP ($) | Equity Acceleration ($) | KEPRP Account ($) | Total ($) |
|---|---|---|---|---|
| Involuntary or Constructive Termination | 0 | 0 | 449,335 | 449,335 |
| Change in Control (awards not assumed) | 0 | 3,489,990 | 641,907 | 4,131,897 |
| Involuntary/Constructive Termination following CIC | 649,000 | 3,489,990 | 641,907 | 4,780,897 |
| Death/Disability | 649,000 | 3,489,990 | 449,335 | 4,588,325 |
| Retirement | 0 | 0 | 449,335 | 449,335 |
| Voluntary Resignation | 0 | 0 | 449,335 | 449,335 |
Other benefits:
- KEPRP legacy deferred comp balance: $641,907 at 12/31/2024; $593,863 at 12/31/2023 .
- New nonqualified Deferred Compensation Plan adopted effective Jan 1, 2025, enabling elective deferrals by eligible executives .
- Clawback policy maintained; annual compensation risk assessments conducted .
Compensation Structure Analysis
- Mix shift to objective, performance-based incentives: PRP replaced KEPRPs beginning with performance year 2023; equity shifted to RSUs, PSUs, and options beginning 2024, increasing at-risk pay clarity and long-term alignment .
- Transparent performance metrics with fixed weightings and targets (growth and combined ratio), avoiding target resetting; say-on-pay approval at 94% signals shareholder support .
- No tax gross-ups or golden-parachute severance; CIC treatment limited to equity acceleration and PRP provisions, mitigating pay-for-failure risk .
Performance & Track Record
| Indicator | 2023 | 2024 |
|---|---|---|
| $/% change – Net Earned Premiums & Fees (ex Title & RFIG) | 8.2% | 13.3% |
| Combined Ratio (consolidated, ex RFIG) | 92.8% | 93.9% |
| TSR value-of-$100 (Company vs Peer) | Company 180.36; Peer 147.60 (for 2023) | Not shown in proxy; most recent TSR table covers 2023 |
CFO Sarbanes-Oxley certifications demonstrate ongoing oversight of reporting controls and fairness of financial presentation (multiple periods) .
Governance, Peer Benchmarking, and Say‑on‑Pay
- Compensation Peer Group (2024): American Financial Group, American International Group, W. R. Berkley, Chubb, Cincinnati Financial, CNA Financial, Fidelity National Financial, First American Financial, The Hartford, Stewart Information Services, Travelers .
- Say‑on‑Pay approval: 94% in the prior year, considered by the Committee in current-year decisions .
- Compensation Committee (2024): Independent directors Steven J. Bateman, Lisa J. Caldwell, John M. Dixon, Peter B. McNitt, Glenn W. Reed, J. Eric Smith, Fredricka Taubitz .
Equity Ownership & Awards – Multi‑Year Snapshot
| Metric | 2022 YE | 2023 YE | 2024 YE |
|---|---|---|---|
| Unvested Restricted/RSUs (shares) | 20,000 | 38,340 | 32,387 |
| Options – unexercisable (shares) | 60,000 @ $24.49 exp 3/10/2032 | 70,000 @ $24.31 exp 3/16/2033 | 60,000 @ $29.29 exp 3/06/2034; plus prior ladders |
| Options – exercisable (selected) | 10,000–22,500 across various strikes/expiries | 10,000–29,250 across various strikes/expiries | 10,000–39,960 across various strikes/expiries |
| RS/RSU vesting in year (shares; value) | 1,503; $35,952 (2022) | 4,708; $164,369 (2023) | 14,985; $450,965 (2024) |
Investment Implications
- Pay-for-performance alignment: Sodaro’s cash incentive outcomes and equity mix are directly linked to underwriting profitability and growth, with clear thresholds and maximums; strong 2024 growth (13.3%) and solid combined ratio (93.9%) drove above-target payouts without target resetting, supporting alignment and retention .
- Limited severance risk: No employment contracts or golden parachutes; CIC economics are concentrated in equity acceleration (and PRP provisions) rather than cash multiples—reducing pay-for-failure risk and lowering potential downside from executive turnover .
- Selling pressure indicators: No option exercises in 2024, but ongoing RS/RSU vesting could create periodic tax-withholding dispositions; hedging/pledging prohibitions reduce misalignment or leveraged exposure risk .
- Ownership alignment: Beneficial ownership plus significant unvested/PSU opportunity and option ladders provide multi-year retention hooks; stock ownership guidelines and compliance improve alignment with shareholders .