Edward Rand Jr.
PROASSURANCEAbout Edward Rand Jr.
Edward L. Rand, Jr. (age 58) is President and Chief Executive Officer of ProAssurance Corporation and has served as a director since 2019; he previously served as CFO (2004–2018) and President/COO (2018–June 2019), and earlier held senior finance roles at PartnerRe, Atlantic American, and United Capitol; he holds a B.A. in Economics from Davidson College . In 2024 under his leadership, ProAssurance reported Non‑GAAP operating income of $48.6M, net income of $52.7M ($1.03/diluted share), net investment income up 11.7% to >$141M, book value per share up 7.7% to $23.49, and an improved combined ratio of 109.4% (−3.3 pts YoY) . Performance share awards for the 2022–2024 cycle paid 0% based on relative TSR (36.33% vs index 67.63%) and book value CAGR (0.61% vs 4% threshold), showing strict long‑term performance gating . A pending acquisition by The Doctors Company (announced March 19, 2025) creates potential change‑of‑control dynamics; the merger will be voted at a separate special meeting .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ProAssurance | CFO; President & COO; President & CEO; Director | CFO 2004–2018; P/COO 2018–6/2019; CEO since 7/2019; Director since 2019 | Led finance during transformation; elevated to COO and CEO; board member aligning management and board oversight |
| PartnerRe Ltd. | Chief Accounting Officer & Head of Corporate Finance | 2000–2004 | Global reinsurance finance leadership |
| Atlantic American Corporation | Chief Financial Officer | 1996–2000 | Public insurer CFO; capital markets exposure |
| United Capitol Insurance Company | Controller | 1992–1996 | P&C operating finance and controls |
| Coopers & Lybrand (PwC) | Auditor | ~4 years (pre‑1992) | Foundational audit/controls expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed for Mr. Rand in the proxy . |
Fixed Compensation
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2022 | 987,499 | — |
| 2023 | 1,000,000 | — |
| 2024 | 1,029,231 | Annualized salary as of 4/1/2024 set at $1,040,000 |
Additional fixed elements and policies:
- Perquisites: includes personal aircraft usage; 2024 incremental cost attributed to Rand was $20,089 .
- Deferred compensation: 2024 executive contribution $61,490; company match $41,054; year‑end balance $2,843,709; 2024 plan earnings $363,683 .
- Clawback: Dodd‑Frank compliant recoupment updated Sept 6, 2023; 3‑year lookback; no indemnification for recovered comp .
- Anti‑hedging: hedging transactions prohibited for employees and directors .
- Ownership guidelines: CEO required to hold shares worth 5x base salary; minimum 1‑year post‑vesting holding for awards since 2010 .
Performance Compensation
Annual Incentive Plan (AIP) structure and 2024 outcome (CEO)
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Weighted Achievement |
|---|---|---|---|---|---|---|
| Consolidated Non‑GAAP Operating Results Improvement ($M) | 70% | 10 | 20–40 | 55 | 67.7 | 140.0% |
| Individual Performance | 30% | — | — | — | 200% | 60.0% |
| Total AIP Achievement | — | — | — | — | — | 200.0% |
- CEO AIP target: 120% of salary; 2024 earned 240% of salary, paid in cash; amount $2,496,000 .
- 2025 AIP metric shift: Operating Ratio (70% for corporate execs) plus Individual Performance (30%); segment leaders include Segment Operating Ratio (30%) .
Long‑Term Incentive Plan (LTIP)
- Instruments and vesting: Performance Shares (3‑year cliff, payout 50–200% of target on metrics) and RSUs (since 2023, vest ratably 1/3 per year over 3 years) .
- 2024 grants (CEO): RSUs 88,996 (grant‑date value $1,296,683); Performance Shares target 88,996 (threshold 44,498; max 177,992; grant‑date value $1,296,672); grant date May 23, 2024 .
- 2024 LTIP performance metrics (for 2024–2026 PSU cycle): 50% Relative Total Return vs S&P 1500 P&C; 50% cumulative Non‑GAAP Operating ROE (threshold 12%, target 21%, max 30%) .
- 2022–2024 PSU cycle: 0% payout (PRA TSR 36.33% vs index 67.63%; book value CAGR 0.61% vs 4% threshold) .
Multi‑Year Compensation (CEO)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 987,499 | 1,000,000 | 1,029,231 |
| Stock Awards ($) | 2,000,000 | 2,200,000 | 2,593,355 |
| Non‑Equity Incentive ($) | 1,278,000 | 420,000 | 2,496,000 |
| All Other Compensation ($) | 101,633 | 105,832 | 108,248 |
| Total ($) | 4,367,132 | 3,725,832 | 6,226,834 |
Observations:
- 2024 pay mix is heavily at‑risk; the company states 77% of CEO’s 2025 target total direct compensation is “at‑risk” .
- 2024 AIP paid at max for operating earnings improvement; PSUs for 2022–2024 paid 0%, demonstrating alignment with long‑term performance .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/24/2025) | 235,414 shares; held in a joint brokerage account with spouse; <1% of shares outstanding . |
| Outstanding Unvested RSUs (CEO) | 40,371 (2/22/2022); 36,870 (2/28/2023); 88,997 (5/23/2024) . |
| Outstanding Target PSUs (CEO) | 40,371 (2/22/2022); 55,304 (2/28/2023); 88,997 (5/23/2024) . |
| Options | None outstanding; no option exercises in 2024 . |
| 2024 Vested RSUs (value realized) | 92,892 units; $1,137,713 value realized (tax‑net shares delivered) . |
| Ownership Guidelines | CEO 5x base salary; 1‑year post‑vesting hold requirement for awards since 2010 . |
| Hedging/Pledging | Hedging prohibited; no explicit pledging disclosure noted in cited sections . |
Note: Ownership table excludes unvested RSUs/PSUs and shows star “*” for <1%; all directors and officers as a group owned 1.21% .
Employment Terms
- CEO Employment Agreement: initial term to July 1, 2025 with automatic 1‑year renewals; minimum base salary $900,000; AIP target ≥120% of base; initial $2M RSU vesting over 5 years; annual LTI ≥$750k; up to 50 hours personal aircraft use .
- Severance (non‑CoC): if terminated without cause or resigns for good reason, 2x current base salary plus 2x average AIP for prior 3 years, paid in installments; non‑compete duration equals multiple (e.g., 2 years for 2x) .
- Change‑of‑Control (double‑trigger): same severance multiple if termination without cause or good reason within 2 years post‑CoC; no single‑trigger payouts; no excise tax gross‑up for CEO (one legacy NEO has pre‑2010 gross‑up) .
- Clawback: Dodd‑Frank Rule 10D‑1 compliant; 3‑year lookback; applies to cash and equity; no indemnification .
Board Governance (Director Service and Roles)
- Board Service: Elected to Board in 2019; Class I director with term expiring in 2026 .
- Committee Roles: Member, Executive Committee (with the independent Chair and Vice Chair); the Executive Committee did not meet in 2024 .
- Independence/Dual‑Role: As CEO, Rand is not independent; the Board has an independent Chairman (since May 2022) and holds executive sessions of independent directors quarterly; no Lead Independent Director designated given independent Chair .
- Attendance: The Board held four meetings in 2024; all directors attended all Board meetings and at least 75% of their committee meetings .
- Director Compensation: Management directors (including Rand) receive no additional director pay .
Say‑on‑Pay & Shareholder Feedback
| Proxy Year | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Favorable Say‑on‑Pay Vote | 87% | 96% | 97% | 94% | 85% |
| Citations: |
Committee practices:
- Compensation Committee members are independent; uses F.W. Cook as independent advisor; peer group of 17 P&C insurers used for 2024 decisions .
- 2024 peers include Amerisafe, Employers, Selective Insurance, RLI, Erie Indemnity, etc.; PRA positioned at $5.6B assets, $0.8B market cap, $1.2B revenue relative to peers .
Performance & Track Record Highlights
- 2024 improvement: Non‑GAAP operating income $48.6M (vs ~$(9.0)M in 2023), combined ratio 109.4% (−3.3 pts YoY), net investment income up 11.7%, BVPS up 7.7% to $23.49 .
- Segment underwriting improvements: Specialty P&C underwriting loss improved by $46.0M; MPL underwriting loss improved by $46.4M; Workers’ Comp underwriting loss improved by $11.5M YoY .
- Long‑term discipline: 2022–2024 PSUs paid 0% due to underperformance versus relative TSR and book value CAGR thresholds .
Risk Indicators & Red Flags
- Positive: Double‑trigger CoC; no option repricing; anti‑hedging; Dodd‑Frank‑compliant clawback; no CEO excise tax gross‑up; stock ownership guidelines .
- Watch: Pending merger with The Doctors Company may activate double‑trigger severance if role changes/acquisition closes; potential retention risk/opportunity for accelerated vesting on RSUs/PSUs per plan terms .
Data Exhibits
2024 AIP Targets and Achievement (All NEOs’ framework summary)
| Performance Criteria ($ in millions) | 2024 Threshold | 2024 Target | 2024 Max | 2024 Actual | Target Weight | Achieved Weight (CEO) |
|---|---|---|---|---|---|---|
| Non‑GAAP Operating Results Improvement (CEO/CFO/EVP GC) | 10 | 20–40 | 55 | 68 | 70% | 140% |
| Individual Performance (CEO) | — | — | — | 200% | 30% | 60% |
| Workers’ Comp Underwriting Results (segment leader) | 3 | 8–18 | 25 | 12 | 30% | 30% (WC) |
| MPL Underwriting Results (segment leader) | 8 | 15–25 | 40 | 46 | 30% | 60% (MPL) |
Note: CEO total weighted achievement 200%; other NEOs ranged 134%–176% of target .
CEO Grants of Plan‑Based Awards (2024)
| Grant | Grant Date | RSUs (#) | PSUs Threshold/Target/Max (#) | Grant Date Fair Value ($) |
|---|---|---|---|---|
| AIP Target/Range (cash) | 2/28/2024 | — | — | Target $1,248,000; Max $2,496,000 |
| PSUs | 5/23/2024 | — | 44,498 / 88,996 / 177,992 | $1,296,672 |
| RSUs | 5/23/2024 | 88,996 | — | $1,296,683 |
Outstanding CEO Equity at 12/31/2024
| Award Type | Grant Date | Units Unvested (#) | Notes |
|---|---|---|---|
| RSUs | 2/22/2022 | 40,371 | Time‑based; 3‑yr schedule |
| PSUs (target) | 2/22/2022 | 40,371 | 2022–2024 metrics; certified at 0% payout |
| RSUs | 2/28/2023 | 36,870 | Time‑based; 3‑yr schedule |
| PSUs (target) | 2/28/2023 | 55,304 | 2023–2025 metrics |
| RSUs | 5/23/2024 | 88,997 | Time‑based; 3‑yr schedule |
| PSUs (target) | 5/23/2024 | 88,997 | 2024–2026 metrics |
Board Service History, Committee Roles, and Dual‑Role Implications
- Service: Director since 2019; Class I (term expires 2026) .
- Committees: Executive Committee member alongside the independent Chair and Vice Chair; EC did not meet in 2024 .
- Dual Role: CEO and director (not Chair); the Board is led by an independent Chairman with regular independent executive sessions (quarterly), mitigating concentration‑of‑power concerns; no Lead Independent Director given presence of independent Chair .
- Independence: CEO is non‑independent by definition; majority of board is independent .
- Attendance: All directors attended all Board meetings in 2024 and ≥75% of their committee meetings .
- Director Pay: Management directors receive no additional director compensation .
Investment Implications
- Pay‑for‑performance alignment: 2024 AIP paid at max on a clear, auditable Non‑GAAP operating earnings improvement metric; long‑term rigor evidenced by 0% payout of 2022–2024 PSUs, limiting windfalls amid sub‑benchmark TSR/book value growth .
- Retention and selling pressure: RSUs vest ratably over three years, creating ongoing taxable events and potential periodic selling to cover taxes; 2024 vested RSUs of 92,892 ($1.14M value realized) illustrate cadence; no options outstanding reduces forced‑exercise pressure .
- Alignment and governance: 5x‑salary ownership guideline, one‑year post‑vesting hold, anti‑hedging, and a robust clawback support alignment; absence of CEO gross‑up and double‑trigger CoC terms are shareholder‑friendly .
- Change‑of‑control overhang: The proposed sale to The Doctors Company adds binary optionality; if duties diminish or role changes post‑closing, CEO qualifies for double‑trigger severance (2x salary + 2x average bonus), implying retention cost but reducing management distraction risk during the process .
- Execution risk: While 2024 operating improvement is notable, multi‑year PSU forfeiture highlights execution challenges vs peers; 2025 AIP’s Operating Ratio focus tightens linkage to insurance economics (underwriting plus investment income), a constructive pivot to durable profitability .