John Murphy
PROGRESSIVE CORP/OH/About John Murphy
Claims President of The Progressive Corporation since December 2021, responsible for claims strategy and resolution across all product lines; joined Progressive in 1992 after starting as a claims representative and holding multiple leadership roles in claims and customer operations. He holds a bachelor’s degree in psychology from the State University of New York at Albany . Company performance during his tenure includes 2024 net premiums written of $74.4B, combined ratio of 88.8, underwriting margin of 11.2%, and Gainshare factor of 1.78 (driving elevated annual cash payouts); Progressive’s 5-year TSR outperformed the S&P 500 by ~2.8x and its peer group by ~2.2x .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Progressive Corporation | Claims President | Dec 2021–Present | Leads claims strategy and resolution across all product lines . |
| The Progressive Corporation | Customer Relationship Management President | ~Feb 2016–Dec 2021 | Led customer care (sales & delivery), customer experience, systems experience, and operational support; scaled customer operations . |
| The Progressive Corporation | CRM Business Leader | Feb 2015–Jan 2016 | Transitioned CRM operations, process improvements . |
| The Progressive Corporation | Physical Damage/Service Center Process Business Leader | ~2012–2015 | Optimized physical damage processes and service center operations . |
| The Progressive Corporation | Claims Business Leader; Senior Claims Director; Regional Claims Manager; National Implementation Leader | 1992–2012 | Multi-state operational leadership and national process implementations . |
External Roles
- None disclosed in proxy statements or company leadership bios .
Fixed Compensation
Multi-year reported compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $550,000 | $576,539 | $602,116 |
| Stock Awards ($) | $1,375,024 | $1,450,083 | $1,512,817 |
| Non-Equity Incentive (Gainshare) ($) | $473,000 | $1,026,239 | $1,071,766 |
| All Other Compensation ($) | $12,750 | $12,000 | $12,000 |
| Total ($) | $2,410,774 | $3,064,861 | $3,198,699 |
Additional salary reference: Committee-set annual salary for 2024 was $605,000 (+4.3% YoY), noting implementation timing differences with SCT reporting .
Performance Compensation
Annual Cash Incentive (Gainshare)
| Component | Target | Maximum | Actual 2024 |
|---|---|---|---|
| Gainshare (as multiple of salary) | 1.00x | 2.00x | Factor 1.78 |
| Dollar Target/Max ($) | Target $602,116 | Max $1,204,232 | Paid $1,071,766 |
Gainshare drivers and matrices: Business unit profitability and PIF growth at product-level; agency auto, direct auto, special lines scored 2.00; property matrices scored 0.00; commercial lines scored 1.03; weighted to yield Gainshare factor 1.78 .
Equity Awards (2024 Grants)
| Award Type | Target Units | Maximum Units | Vesting & Performance Conditions |
|---|---|---|---|
| Time-based RSUs | 2,945 | n/a | Vest in equal tranches Jan 2027/2028/2029 |
| Performance-based RSUs (Insurance Market Growth) | 4,417 | 11,043 (2.5x) | 3-year (2024–2026) market outgrowth vs private passenger auto & commercial auto; profitability requirement: combined ratio ≤96 over latest 12 months; performance factor set July 2027; if profitability not met by Jan 31, 2029, forfeit . |
Performance metrics and targets for market-growth awards:
- Target outgrowth +2 percentage points; maximum +3.5 percentage points (per business line) .
- Profitability gate: combined ratio 96 or better .
Upcoming Vesting Schedule (Unvested Time-Based RSUs Earned under Qualified Retirement)
| Date | Units |
|---|---|
| 01/01/2025 | 2,428 |
| 01/21/2025 | 3,595 |
| 01/20/2026 | 4,996 |
| 01/19/2027 | 4,079 |
| 01/18/2028 | 2,385 |
| 01/16/2029 | 983 |
Rule of 70 eligibility (accelerated retirement vesting rights): Murphy satisfied; time-based equity value at 12/31/2024 $3,427,307; performance-based at maximum $8,344,509 (2024 awards become eligible 1/1/2025) .
Equity Ownership & Alignment
| Ownership Measure | Amount |
|---|---|
| Beneficially owned common shares | 60,447 (less than 1%) |
| Units equivalent to common shares (deferred/RSU equivalents) | 12,678 |
| Total interest (shares + equivalents) | 73,125 |
| Unvested time-based RSUs (earned under qualified retirement) | 17,253; market value $4,133,991 (at $239.61) |
| Unearned performance-based RSUs not vested | 45,883; market value $10,994,026 (at $239.61) |
| Executive stock ownership guideline | 3x salary; counts 401(k), EDCP units, and unvested time-based RSUs; excludes performance-based RSUs |
| Compliance with guideline | All NEOs, including Murphy, satisfied as of 1/31/2025 |
| Hedging/derivatives policy | Prohibited (options, swaps, collars, exchange funds) |
| Pledging policy | Prohibited; no pledges reported |
Insider transactions context (third-party aggregation):
- GuruFocus reports Murphy owned ~58,675 shares as of 2025-09-19 and made 11 Form 4 sales over the past 5 years (net sale ~24,104 over 18 months) .
- Note: Use Form 4s for exact dates/quantities; our attempt to fetch via insider-trades skill was unsuccessful due to access error; aggregate figures provide directional selling pressure context.
Employment Terms
| Term | Key Provision |
|---|---|
| Employment agreement | None (Progressive does not use employment agreements for executive officers) |
| Severance (Executive Separation Allowance Plan) | 3x salary; plus up to 18 months medical/dental/vision at employee rates; outplacement (~$13k). Murphy estimate at 12/31/2024: $1,815,000 severance; $28,502 health benefits . |
| Change-in-control (equity plans) | Double-trigger: if awards are honored/assumed, accelerated vesting upon termination without cause or for good reason within 24 months; if not honored, immediate vest/cash-out at FMV; performance awards deemed earned at higher of target or performance to date . |
| CIC equity value (illustrative at 12/31/2024) | Murphy: $8,822,201 (time-based + performance-based at target + dividend equivalents) . |
| Non-compete | Included in equity agreements since 2021 awards . |
| Clawbacks & forfeiture | Dodd-Frank clawback policy (restatements); recovery of inflated payouts; forfeiture/recoupment for “disqualifying activity” including reputational harm and Code of Conduct violations . |
Performance & Track Record
| Period | Key Operating/Shareholder Outcomes |
|---|---|
| 2023 | Net premiums written +20%; PIF +9%; combined ratio 94.9; Gainshare factor 1.78; 5-year TSR exceeded S&P 500 by 1.9x (four-year outperformance vs peers 2.2x) . |
| 2024 | Net premiums written $74.4B (+$12.9B YoY); PIF 35M (+~5M YoY); underwriting margin 11.2% (combined ratio 88.8); investment income $2.8B; Gainshare factor 1.78; 5-year TSR exceeded S&P 500 by ~2.8x and peer group by ~2.2x . |
Compensation Structure Analysis
- Heavy at-risk pay: 2024 targets for NEOs average 82% of target compensation at-risk and up to ~90% of maximum potential compensation; Murphy’s mix includes time-based (1.0x salary) and performance-based RSUs (1.5x salary target with up to 2.5x payout), and Gainshare (1.0x target, 2.0x max) .
- Performance metrics tightened: Market-growth awards require outgrowing private passenger auto and commercial auto markets by 2–3.5pp and meeting a profit gate (≤96 combined ratio), curbing low-quality growth .
- No pensions, no tax gross-ups, no hedging/pledging; clawback and reputational harm forfeiture provisions reduce agency risk .
Equity Vesting & Insider Selling Pressure
- Significant scheduled vesting through 2029 under qualified retirement; near-term tranches in January 2025 and 2026 could coincide with Form 4 sales for tax/portfolio reasons, as commonly observed in executive vesting events .
- Aggregate third-party Form 4 data suggests consistent net sales over recent periods; monitor filings around vest dates for incremental supply .
Compensation Peer Group & Benchmarking
- For the Claims President role, market benchmarking used Mercer PCICS surveys for P&C claims executives at insurers with >$10B direct written premium; Murphy’s 2024 total compensation, assuming 1.00 performance factors, was above the 75th percentile in reviewed market data .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: 95% of votes cast supported executive compensation program, indicating strong shareholder alignment .
Investment Implications
- Alignment: Robust pay-for-performance design (market outgrowth + profit gate; companywide Gainshare) and strict hedging/pledging prohibitions support shareholder alignment. Murphy meets ownership guidelines (≥3x salary), and retirement eligibility further ties outcomes to long-term performance .
- Retention risk: Qualified retirement vesting rights and sizable CIC equity protections lower voluntary departure risk; severance is salary-only (3x), limiting windfall risk vs peers .
- Trading signals: Elevated 2024 Gainshare (1.78) and multi-year TSR outperformance reflect strong execution in claims and pricing; watch for periodic insider selling around January vesting dates and July performance certifications on PSUs (2027), which can create technical supply without signaling fundamental weakness .
- Governance safeguards: No employment agreements, robust clawbacks, and reputational harm forfeiture provisions mitigate agency problems; absence of hedging/pledging reduces downside misalignment .