Rodolphe Hervé
Palomar HoldingsAbout Rodolphe Hervé
Palomar’s Chief Operating Officer since July 1, 2024, Rodolphe Hervé (age 47) brings >15 years of specialty insurance and reinsurance operating/transformation leadership from SCOR SE and QBE North America, and holds an MBA from Wharton and a Master’s in Management from ESCP Business School . Company performance context for his first partial year: FY2024 GWP rose 35.1% to $1.5B, ROE was 19.6% (Adjusted ROE 22.2%), and net income was $117.6M, underscoring a strong pay-for-performance backdrop; 2024 AIP paid out at 180% of target on pre-tax ANI and pre-tax ANI before catastrophe losses outperformance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SCOR SE | Global Head of P&C Operations; previously CEO North America & Global Head of Operations (Specialty Insurance) and Global CTO | 2020–2024 | Led international insurance, reinsurance, claims, pricing and modeling systems/processes; transformation leadership across specialty insurance |
| QBE North America | SVP, Head of Business Enablement; SVP, Operations & Transformations (various roles) | 2010–2020 | Led operations and transformation initiatives supporting expansion into specialty lines |
| Earlier career | Roles at Bain & Company, Orange Ventures, Morgan Stanley | Not disclosed | Strategy/finance/venture experience prior to insurance industry |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No public company directorships or committee roles disclosed for Hervé |
Fixed Compensation
| Metric | 2024 | 2025 |
|---|---|---|
| Base Salary | $425,000 (set on hire) | $446,000 (4.9% increase) |
| Target Bonus % | 70% of base salary | Not explicitly stated (AIP structure unchanged; corporate metrics maintained) |
| Target Bonus ($) | $297,500 | — |
| Actual Bonus Paid | $535,500 (180% of target) | — |
Performance Compensation
2024 Annual Incentive Plan (AIP) – Structure and Outcomes
| Metric | Weighting | Threshold | Target | Max | Actual | Payout % |
|---|---|---|---|---|---|---|
| Pre-Tax Adjusted Net Income (ANI) | 40% | $120.6M | $141.9M | $163.2M | $168.8M | 200% |
| Pre-Tax ANI before Catastrophe Losses | 40% | $127.0M | $149.4M | $171.8M | $196.7M | 200% |
| MBOs (Individual) | 20% | Goals | Goals | Goals | Achieved Target | 100% |
| Total AIP Payout | — | — | — | — | — | 180% weighted average |
- Hervé 2024 AIP: Target $297,500; earned 180% = $535,500 .
2024 Long-Term Incentive (LTI) Grants
| Grant Type | Grant Date | Shares/Units | Grant-Date Fair Value | Vesting | Notes |
|---|---|---|---|---|---|
| RSU (annual LTI + sign-on combined grant) | 7/31/2024 | 9,206 | $847,044 | 1/3 on each anniversary of grant (i.e., 7/31/2025, 7/31/2026, 7/31/2027), subject to continued service | 2024 annual LTI was 100% RSUs due to mid-year hire; received separate $550,000 sign-on make‑whole RSUs; standard mix (50% PSUs/50% RSUs) resumes with 2025 grant |
- Context: For NEOs, 2024 annual LTI mix standard was 50% PSUs/50% RSUs, but Hervé received only RSUs due to joining after Q2; sign-on RSUs were granted to offset forfeited awards from prior employer .
- RSU vesting creates 3 equal tranches (~3,068 units each) scheduled on 7/31/2025, 7/31/2026, 7/31/2027 (based on 1/3 schedule disclosed) .
PSU Program Design (Company-wide, relevant to 2025 forward grants)
| Metric | Weighting | Performance Period | Threshold | Target | Max |
|---|---|---|---|---|---|
| Adjusted ROE | 70% | 3 years | 9.0% | 12.0% | 15.0% |
| GWP | 30% | 1 year (with time-vesting to 3 years) | $1.63B | $1.92B | $2.20B |
- 2025 PSUs also include a +/-20% RTSR modifier versus the S&P 1500 P&C Insurance Index; payouts still capped at 200% .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Shares Held Directly | 127 |
| Options Exercisable Within 60 Days | 0 |
| RSUs Scheduled to Vest Within 60 Days | Not listed for Hervé as of April 1, 2025 (table shows only if within 60 days) |
| Total Beneficial Ownership | 127 shares (<1%) |
| Shares Outstanding (denominator) | 26,734,469 as of April 1, 2025 |
| Pledging/Hedging | Prohibited for executives and directors (anti-hedging/anti-pledging policy) |
| Stock Ownership Guidelines | 3x base salary for executive officers effective 2025; 5-year compliance window; must hold net shares until guideline met; PSUs not counted until achieved; options excluded; in‑the‑money options excluded beginning 2024 |
- Insider selling pressure: three scheduled RSU vest tranches from the 7/31/2024 grant may create periodic liquidity events around 7/31 in 2025, 2026, 2027 (1/3 per year, subject to continued service) .
- Alignment: Low current beneficial ownership with significant unvested RSUs puts alignment largely in unvested equity; anti-pledging policy reduces collateral-driven selling risk .
Employment Terms
| Term | Detail |
|---|---|
| Start Date | Effective July 1, 2024 (appointed June 20, 2024) |
| Base Salary (Hire) | $425,000 |
| Target Bonus | 70% of base salary (AIP) |
| 2024 Sign-on Equity | One-time $550,000 RSUs (three equal annual installments) |
| Standard Executive LTI Mix | 50% PSUs / 50% RSUs for 2025 onwards |
| Employment Agreement | Standard Form Agreement approved 7/20/2023 |
| Severance (Without Cause / Good Reason) | 12 months base salary; COBRA reimbursements up to 12 months; pro‑rata target bonus only if employed ≥3 years |
| Change-in-Control (CIC) | Double-trigger: if terminated without cause/for good reason within 12 months post‑CIC, receive severance as above plus acceleration of unvested equity (if awards assumed/continued) |
| Non-Solicitation | 12 months post-separation |
| CIC and Termination Economics (Illustrative as of 12/31/2024) | Termination without Cause/Good Reason: Cash severance $425,000; non‑equity incentive $297,500; RSUs accelerated value $320,557; COBRA $21,930; Total $1,064,987 |
| CIC + Qualifying Termination (Double Trigger) | Cash severance $425,000; non‑equity incentive $297,500; RSUs accelerated value $961,567; COBRA $21,930; Total $1,705,997 |
| Clawback | Policy enhanced in 2023 (restatement and other triggers; no “at fault” requirement; expanded population; reduced discretion) |
| Tax Gross-ups | None for CIC-related payments |
| Single-Trigger CIC Payments | None (company policy) |
Performance & Track Record (Company context during tenure)
| Metric (FY2024) | Result |
|---|---|
| Gross Written Premiums (GWP) | $1.5B (+35.1% YoY) |
| Net Income | $117.6M (vs. $79.2M in 2023) |
| Adjusted Net Income | $133.5M (vs. $93.5M in 2023) |
| ROE / Adjusted ROE | 19.6% / 22.2% |
| AIP Payout Multiple (Company-wide) | 180% based on ANI and ANI ex-cat performance; MBOs at 100% |
- Related party transactions: none for Hervé disclosed in 8‑K at appointment .
- Say-on-Pay governance signal: 2024 advisory vote approval >94% .
- Compensation benchmarking: Pay Governance engaged; peer group refreshed for 2025 reflecting growth/scale (e.g., adds Selective Insurance, RLI, Kinsale, White Mountains, etc.) .
Compensation Structure Analysis
- Cash vs. equity mix: For Hervé’s 2024 entry year, equity dominated by RSUs (annual RSU + sign‑on RSU), with standard 50/50 PSU/RSU mix to resume in 2025—shifting more pay to performance-contingent equity (PSUs) going forward .
- Performance metric rigor: AIP corporate metrics (pre‑tax ANI and pre‑tax ANI ex‑cat, each 40%) hit maximum in 2024; MBOs at target; overall AIP paid 180% .
- Governance safeguards: robust clawback; anti‑hedging/anti‑pledging; no tax gross‑ups; no single-trigger CIC benefits; enhanced stock ownership guidelines (3x salary for executives) .
- Equity award structure: RSUs vest over 3 years (1/3 per year); PSUs use 70% three‑year Adjusted ROE and 30% one‑year GWP, with 2025 addition of +/-20% RTSR modifier to strengthen shareholder alignment .
Investment Implications
- Near-term selling pressure risk: Three scheduled RSU vest tranches from the 7/31/2024 9,206‑unit award (1/3 yearly) may create liquidity windows around 7/31 in 2025–2027; anti‑pledging reduces collateral-driven sales risk .
- Alignment and retention: Low current beneficial ownership (127 shares) plus sizable unvested RSUs shift alignment to vesting; enhanced 2025 guidelines (3x salary) and five‑year compliance window should increase owned share base over time .
- Pay-for-performance momentum: 2024 AIP payout at 180% on strong ANI metrics and company performance (GWP +35.1%; Adj ROE 22.2%) supports incentive credibility and future PSU realizability if performance sustains .
- Change-in-control economics: Double-trigger structure balances retention with shareholder protections; illustrative CIC termination value for Hervé was $1.706M as of 12/31/2024, driven by RSU acceleration at $104.45/share reference price .
- Governance reception: >94% say‑on‑pay approval in 2024 and continued shareholder support for 2025 program changes (e.g., RTSR modifier) indicate low external governance risk premia around compensation design .
Notes
• 2024 PSU participation: none for Hervé due to mid‑year start; resumes to standard mix in 2025 .
• No related-party transactions at appointment; age and education verified in 8‑K .
• Insider trading and pledging strictly prohibited; ownership guidelines impose meaningful accumulation targets .