Jon Knutzen
Palomar HoldingsAbout Jon Knutzen
Jon Knutzen is Palomar’s Chief Risk Officer (CRO), serving since April 2019, with a career spanning reinsurance broking and risk leadership at TigerRisk Partners, BMS Intermediaries, Advocate Reinsurance Partners, Holborn Corporation, Guy Carpenter, and John B. Collins Associates; he holds a B.S. from South Dakota State University . He was 51 as of April 3, 2023 and 52 as of April 2, 2024; he continues as CRO in 2025 . His pay is tightly linked to company performance via annual cash bonuses tied to pre-tax adjusted net income (ANI) metrics and MBOs, and long-term PSUs tied 70% to Adjusted ROE and 30% to GWP, with 2023 AIP paying 129.2% of target and 2024 PSUs set with ROE and GWP targets; effective 2025, PSUs include a ±20% Relative TSR modifier versus the S&P 1500 P&C Index .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TigerRisk Partners | Partner; led Property Specialty & Reinsurance Solutions | May 2017–Apr 2019 | Led property specialty and reinsurance solutions practice |
| BMS Intermediaries | Executive Vice President | Sep 2016–Mar 2017 | Senior reinsurance intermediary leadership |
| Advocate Reinsurance Partners (acq. by BMS) | Partner | Mar 2015–Sep 2016 | Partner-level leadership pre-acquisition |
| TigerRisk Partners | Property Specialty Practice Leader | Apr 2013–Mar 2015 | Built property specialty practice |
| Holborn; Guy Carpenter; John B. Collins Associates | Various leadership roles | Not disclosed | Reinsurance brokerage leadership positions |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No external directorships or public company board roles disclosed in proxy |
Fixed Compensation
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Base Salary ($) | 300,000 | 345,833 | 376,539 | 448,654 |
| Target Bonus % | — | — | 70% | — |
| Actual Bonus Paid ($) | 169,183 | 196,126 | 340,667 | 646,062 |
| Stock Awards ($) | 2,138,697 | 176,129 | 272,927 | 455,002 |
| Option Awards ($) | 36,292 | 44,198 | — | — |
| All Other Compensation ($) | 8,700 | 9,150 | 9,900 | 10,350 |
| Total Compensation ($) | 2,652,872 | 771,436 | 1,000,033 | 1,560,068 |
Performance Compensation
Annual Incentive Plan (AIP) – 2023 Structure and Outcomes
| Metric | Weighting | Payout as % of Target | Weighted Average Payout |
|---|---|---|---|
| Pre-Tax ANI | 40% | 141.6% | 56.6% |
| Pre-Tax ANI before catastrophe losses | 40% | 131.6% | 52.6% |
| MBOs | 20% | 100.0% | 20.0% |
| Total payout | — | — | 129.2% |
His 2023 target bonus was 70% of base salary and payouts were made by March 15, 2024 under Committee oversight .
Long-Term Incentives (PSUs/RSUs) – 2024 Grant Design
| Metric | Weighting | Performance Period | Vesting Period | Threshold | Target | Max |
|---|---|---|---|---|---|---|
| Adjusted ROE | 70% | 3 years | 3 years | 9.0% | 12.0% | 15.0% |
| Gross Written Premium (GWP, $mm) | 30% | 1 year | 3 years | 1,270 | 1,490 | 1,710 |
Effective 2023, Palomar eliminated stock options from the LTI mix and shifted to 50% PSUs and 50% RSUs to increase performance-based equity; 2025 adds a ±20% RTSR modifier for Section 16 officers’ PSUs versus the S&P 1500 P&C Index .
Equity Ownership & Alignment
Beneficial Ownership Progress
| Metric | 2023 (as of Apr 3, 2023) | 2024 (as of Apr 2, 2024) | 2025 (as of Apr 1, 2025) |
|---|---|---|---|
| Shares held directly (#) | 10,487 | 15,161 | 20,548 |
| Options exercisable within 60 days (#) | 75,195 | 75,090 | 75,552 |
| RSUs scheduled to vest within 60 days (#) | — | — | 612 |
| Total beneficial shares (#) | 85,682 | 90,251 | 96,712 |
| Beneficial ownership (%) | <1% | <1% | <1% |
Anti-hedging/anti-pledging: executives are prohibited from hedging, pledging, short sales, derivatives, and margin accounts involving Palomar stock .
Stock ownership guidelines: expanded in 2025 to 6x base salary for CEO and 3x for other executives; five years to comply; performance awards excluded; in-the-money options excluded effective 2024; Committee reviews annually .
Compliance: as of 2023, NEOs subject to guidelines met their ownership requirements .
Key Outstanding Equity Awards (as of Dec 31, 2024)
| Grant Type | Grant Date | Unvested Shares (#) | Market Value ($) |
|---|---|---|---|
| PSUs (Supplemental 2021) | 11/18/2021 | 27,623 | 1,337,977 |
| RSUs/PSUs (2022) | 1/26/2022 | 2,667 | 278,568 |
| RSUs/PSUs (2023) | 1/31/2023 | 6,562 | 685,401 |
| RSUs/PSUs (2024) | 1/29/2024 | 10,225 | 1,068,001 |
2021 supplemental PSUs carry stock price hurdles and were valued via Monte Carlo; at Dec 31, 2024, per-unit fair values were $36.37 for NEO grants; valuing at market price without probability would imply a higher target market value .
Option Awards and Vesting Schedule (as of Dec 31, 2023)
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 4/16/2019 | 70,822 | — | 15.00 | 4/16/2029 |
| 9/8/2020 | 887 | 204 | 98.95 | 9/8/2030 |
| 1/27/2021 | 1,378 | 44 | 97.87 | 1/27/2031 |
| 1/26/2022 | 1,317 | 900 | 49.53 | 1/26/2032 |
Option vesting: 25% at first anniversary; remainder monthly over 36 months (2020 grants) or 24 months (2021–2022 grants). RSUs vest 1/3 annually over three years; PSUs vest based on performance plus service .
Insider Selling Pressure (Exercises/Vesting)
| Metric | 2023 | 2024 |
|---|---|---|
| Shares acquired on exercise (#) | — | — |
| Value realized on exercise ($) | — | — |
| Shares acquired on vesting (#) | 4,071 | 5,247 |
| Value realized on vesting ($) | 226,892 | 431,582 |
Employment Terms
Severance and Change-of-Control Economics (Illustrative; assumes termination date shown)
| Scenario | Dec 31, 2023 Assumption | Dec 31, 2024 Assumption |
|---|---|---|
| Cash severance (12 months base salary) | $380,000 | $450,000 |
| Non-equity incentive (target bonus multiple) | $266,000 (100% of target bonus) | $360,000 (100% of target bonus) |
| Stock options acceleration | $5,373 | $3,789 |
| PSUs acceleration | $254,190 | $757,367 |
| RSUs acceleration | $674,991 | $1,175,794 |
| Continuation of medical benefits | $1,097 | $1,097 |
| Total – Termination without Cause or for Good Reason | $938,305 | $1,473,937 |
| Total – Qualifying Termination in Connection with CIC (double trigger) | $1,581,651 | $2,748,047 |
All employment agreements require a double trigger for CIC payments; the 2019 plan allows assumption/substitution of awards by a successor .
Clawback and Trading Policies
- Clawback: Enhanced in Oct 2023 to remove “at fault” requirement; expanded to current/former officers; removed Committee discretion; triggers include both material and non-material restatements and other qualifying events; exceeds SEC requirements .
- Insider Trading: Prohibits short sales, hedging, pledging, monetization transactions, derivatives, margin accounts; blackout periods enforced .
Compensation Structure Analysis
- Shift toward at-risk pay: 2023 target pay mix increased at-risk share; AIP capped at 200% of target with Committee oversight and distinct STI vs LTI metrics to avoid overlap .
- LTI redesign: Options eliminated beginning 2023; PSU weighting raised from 20% to 50%; RSUs reduced to 50%; 2025 adds ±20% RTSR PSU modifier vs. S&P 1500 P&C index .
- Ownership alignment: Executive stock ownership multiples increased to 3x base for non-CEO executives in 2025 (from 2x), with in-the-money options excluded from compliance methodology effective 2024 .
- Shareholder support: 2024 say-on-pay >94% approval; ongoing engagement with investors and proxy advisors .
Performance & Track Record
- 2023 AIP outcome: Combined payout at 129.2% of target based on pre-tax ANI, pre-tax ANI ex catastrophe losses, and MBOs, evidencing strong execution against financial and operational goals .
- 2024 LTI metrics: ROE and GWP targets set within three-year and one-year performance windows respectively; emphasis on long-term value creation .
- 2025 PSU modifier: Relative TSR vs. the S&P 1500 P&C Index adds market-relative performance discipline .
Investment Implications
- Alignment: Elevated PSU weighting, ROE/GWP targets, and the 2025 RTSR modifier strengthen pay-for-performance linkage; increased ownership multiples and anti-pledging rules further align incentives .
- Retention risk: Double-trigger CIC, 12-month salary plus 100% target bonus severance, and sizable unvested RSU/PSU balances reduce near-term departure risk; rising acceleration values at higher stock prices could be a retention lever but may elevate CIC sensitivity .
- Trading signals: No option exercises in 2023–2024 and steady vesting activity suggest limited near-term selling pressure beyond scheduled RSU/PSU settlements; anti-hedging/pledging policy mitigates adverse alignment risks .
- Governance: Strong say-on-pay support and robust clawback policy lower headline risk; distinct STI/LTI metrics and prohibition of single-trigger CIC/tax gross-ups are shareholder-friendly .