Michael Stone
RLIAbout Michael J. Stone
Independent director at RLI since 2012 (age 76). Former President & Chief Operating Officer of RLI’s principal insurance subsidiaries (2002–2015) and earlier senior roles at Travelers Insurance Group (1977–1996). Education: B.A. in Political Science, Bellarmine College; J.D., magna cum laude, University of Louisville. Current RLI board committee service includes Finance & Risk and Human Capital & Compensation; he chaired the board’s Strategy & Risk Committee in 2024 before its dissolution effective January 1, 2025 .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| RLI (principal insurance subsidiaries) | President & Chief Operating Officer | Jan 2002 – Dec 2015 | Responsible for overall direction of principal insurance subsidiaries |
| RLI | Executive roles (joined RLI in 1996) | 1996 – 2002 | Various executive officer positions prior to COO role |
| Travelers Insurance Group | Managerial and executive officer positions | 1977 – May 1996 | Various leadership roles at Travelers |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| SILAC, Inc. | Director | Current | Current board service |
| Kairos Acquisition Corp. | Director | Former | Former board member (SPAC) |
| UnityPoint Health | Chairperson, Board of Directors | Former | Non-profit healthcare system |
| Bellarmine University | Board of Trustees member | Former | University governance role |
Board Governance
- Independence: Classified as Independent Director; only independent directors serve on Audit, Human Capital & Compensation, and Nominating & Corporate Governance committees .
- Committee assignments (2024): Strategy & Risk (Chair), Human Capital & Compensation; (effective Jan 1, 2025): Finance & Risk, Human Capital & Compensation; Strategy & Risk dissolved and ERM oversight shifted to Finance & Risk .
- Attendance and engagement: Board met 4 times in 2024; no director attended fewer than 75% of Board and committee meetings during their service period; independent directors meet in executive session at regularly scheduled meetings; all 12 directors then in office attended the 2024 Annual Meeting of Shareholders .
- Anti-hedging/pledging: Directors are prohibited from hedging, holding RLI securities in margin accounts, or pledging securities as loan collateral .
- Director share ownership guideline: Prior guideline $500,000 (met or within five years as of Dec 31, 2024); effective Jan 1, 2025, raised to $1,000,000 for directors and $1,500,000 for the Chairman; directors may not sell shares until guideline is met .
Fixed Compensation
| Component | Policy/Structure | Amount/Stone’s 2024 Actual |
|---|---|---|
| Annual Board retainer (cash) | Cash retainer | $80,000 (policy); Stone received within Fees Earned in Cash |
| Committee membership retainer | Audit $15,000; All other committees $10,000 each | Stone on HCCC ($10,000) and Strategy & Risk ($10,000) in 2024 |
| Committee chair retainer | Audit $20,000; HCCC $20,000; All other committees $10,000 | Strategy & Risk Chair: $10,000 |
| Chairman of the Board retainer | $100,000 (half cash, half RSUs) | Not applicable to Stone in 2024 |
| RSU grant (annual equity) | Granted at annual meeting; vests at next annual meeting or 1 year; dividend equivalents accrue | $99,919 grant-date fair value in 2024; 698 RSUs granted (1,396 post-split), vest at 2025 meeting; Stone can defer under Director Deferred Plan |
| Total 2024 director compensation (Stone) | Fees + RSU fair value | $110,000 cash; $99,919 stock awards; total $209,919 |
Notes:
- RSU value increased to $125,000 starting with grants upon election at the 2025 annual meeting to keep program competitive .
- Directors may defer cash/RSU compensation into the Nonemployee Director Deferred Compensation Plan; RLI funds a rabbi trust to purchase RLI shares for deferred share elections .
Performance Compensation
| Performance-linked Component | Applies to RLI Directors? | Details |
|---|---|---|
| Performance-based metrics (e.g., TSR, ROI, ESG) tied to director pay | No | Nonemployee director compensation comprises cash retainers, committee/committee chair retainers, and time-based RSUs; no disclosed performance metrics for directors |
Other Directorships & Interlocks
| Company | Type | Role | Potential Interlock/Notes |
|---|---|---|---|
| SILAC, Inc. | Insurance | Director (current) | Current external board role |
| Kairos Acquisition Corp. | Public (SPAC) | Director (former) | Former public company board role |
| UnityPoint Health | Non-profit | Board Chair (former) | Health system leadership role |
| Bellarmine University | Academic | Trustee (former) | Academic governance |
| SS&C Technologies (related party) | Public software/fintech | Brother of SS&C’s Chairman/CEO | RLI licenses SS&C software; $570,685 paid in 2024; reviewed/approved under Related Party Transaction Policy; Stone not involved in negotiations/review |
Expertise & Qualifications
- Nearly 40 years of insurance industry experience; 19 years at RLI culminating as President & COO of principal insurance subsidiaries; responsible for overall direction of core insurance operations .
- Legal training (J.D., magna cum laude), supporting governance and risk oversight .
Equity Ownership
| Item | Detail |
|---|---|
| Total beneficial ownership | 431,680 shares; includes 270 shares held by spouse; includes 1,438 RSUs (1,396 granted on May 2, 2024 plus dividend equivalents through Mar 17, 2025) scheduled to vest at the 2025 Annual Meeting |
| Ownership as % of outstanding | Less than 1% (per director notation “*”) |
| Vested vs. unvested | RSUs vest at 2025 meeting; directors may elect to defer RSUs into Director Deferred Plan |
| Pledging/hedging | Prohibited for directors (anti-hedging/anti-pledging policy) |
| Director ownership guideline | $500,000 guideline in place for 2024 (met or within 5 years); increased to $1,000,000 effective Jan 1, 2025; shares cannot be sold until guideline met |
Governance Assessment
Key findings
- Independence and attendance: Stone is classified as independent; board reports no director below 75% attendance; independent directors meet in executive session at regular meetings, indicating sound governance hygiene .
- Committee leadership and risk oversight: Chaired Strategy & Risk in 2024 during enterprise risk and strategy oversight; in 2025, ERM oversight consolidated under Finance & Risk where he serves, maintaining continuity of risk oversight .
- Compensation alignment: Director pay mix balances cash retainers with annual RSUs; 2025 increase in RSU value and higher ownership guidelines further align director incentives with shareholder value; anti-hedging/pledging enhances alignment .
- Potential conflict (RED FLAG, mitigated): Related-party transaction with SS&C (brother is SS&C CEO); $570,685 paid in 2024 for portfolio accounting software. Mitigations: independent committee review/approval per policy; terms reviewed for arm’s-length comparability; neither Stone, his brother, nor the former RLI Chair participated in negotiations or approvals. Nonetheless, continued monitoring is warranted given the family relationship .
- Shareholder confidence signal: Say-on-Pay support exceeded 97% in 2024, indicating broad investor support for RLI’s executive pay practices and governance framework .