Seth Davis
RLIAbout Seth Davis
Seth A. Davis is Vice President, Controller at RLI and an executive officer since 2019; he is 53 years old as of the 2025 proxy. Promotion history: VP, Controller (promoted July 1, 2019), previously VP, Corporate Services (June 2018–June 2019) and VP, Internal Audit (December 2005–May 2018) . RLI’s executive pay is linked to company performance via Market Value Potential (MVP), Operating ROE, combined ratio, and stock options; RLI’s TSR has outperformed peer group over 2020–2024, and the HCCC benchmarks compensation versus peers annually .
Company TSR (Indexed to $100 investment)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| RLI cumulative TSR ($ index) | $118.12 | $130.76 | $162.97 | $169.12 | $215.73 |
Past Roles
| Organization | Role | Years | Source |
|---|---|---|---|
| RLI Corp. | Vice President, Controller | 2019–present | |
| RLI Corp. | Vice President, Corporate Services | 2018–2019 | |
| RLI Corp. | Vice President, Internal Audit | 2005–2018 |
External Roles
- No external directorships or outside roles for Seth Davis are disclosed in proxies reviewed. (No disclosure in DEF 14A 2021–2025) .
Fixed Compensation
- Seth Davis is not a Named Executive Officer (NEO) in the proxies, so specific base salary, target bonus %, and summary compensation amounts are not disclosed. NEOs include CEO, CFO, COO, CIO, and Chief Legal Officer for 2022–2025 .
- As a home office Vice President, he participates in the Management Incentive Program (MIP), which pays an annual bonus as a percentage of year-end base pay tied to financial goals and annual objectives .
Performance Compensation
RLI uses Company-wide programs for executives. As a VP, Davis is covered by MIP; senior executives (CEO/COO/CFO) use MVP; stock options are granted under LTIP.
MIP Structure and Weighting (applies to home office VPs; examples shown for Diefenthaler/Fick, design governs VP participants)
| Component | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Max bonus (% of base) | 90% | 90% | 100% | 100% |
| MVP weighting | 22.5% (payout $0–$100M) | 22.5% (payout $0–$100M) | 40% (payout $0–$100M) | 40% (payout $0–$100M) |
| ROE weighting | 22.5% (payout 7%–16%) | 22.5% (payout 7%–16%) | 20% (payout 7%–16%) | 20% (payout 7%–16%) |
| Combined ratio weighting | 22.5% (payout 100–85) | 22.5% (payout 100–85) | 20% (payout 100–85) | 20% (payout 100–85) |
| Annual objectives weighting | 22.5% (0–100% achieved) | 22.5% (0–100% achieved) | 20% (0–100% achieved) | 20% (0–100% achieved) |
Notes:
- Annual objectives cover customer experience, innovation/strategic fit, product adjacencies, cultural adaptability, people/technology alignment, and financial/growth goals (mix varies slightly by year) .
- ROE and combined ratio defined as non-GAAP operating ROE and underwriting profitability, respectively; in 2022 the HCCC excluded the Maui Jim gain from ROE/MVP for incentive calculations .
LTIP and Vesting Mechanics
- Stock options for executives vest immediately upon qualifying “Retirement” (age+service ≥75 or satisfying non-compete/other terms), must be exercised within the earlier of three years post-termination or original expiration; death/disability cause immediate vesting; termination for cause forfeits options and bonuses .
- Change-in-control: Board must substitute awards with surviving company equity with full vesting for qualifying terminations within two years, or permit exercise/cash-out at change in control .
Equity Ownership & Alignment
- Stock ownership guideline for Vice Presidents: hold RLI stock valued at ≥1.5x base salary; executives must meet within five years; until reaching the level, net shares from option exercises/long-term awards must be retained .
- Anti-hedging/anti-pledging: Company prohibits executive officers (including VP-level executive officers) from hedging and from holding RLI shares in margin accounts or pledging as collateral; 2025 proxy details Rule 10b5‑1 framework and confirms no Director, Officer, or employee entered new 10b5‑1 plans in 2024 . Earlier proxies reiterate hedging/pledging prohibitions for NEOs and officers at VP-level or higher .
Employment Terms
- Contracts/severance: RLI has not entered into employment or severance agreements with its executive officers; payouts arise only under incentive plans and LTIP post-termination mechanics described above .
- Retirement definition for incentives and continued payouts requires age+service ≥75 or satisfying non-compete and other terms; UPP/MIP/MVP treatment outlined (no forfeiture of bonus bank at change in control; retirement allows payouts per plan design) .
- Deferred compensation: Executive officers may elect to defer up to 100% of cash compensation into mutual funds or RLI stock credits held in a Rabbi Trust; dividends reinvested; distributions can be lump sum or installments, at termination or scheduled while employed .
Investment Implications
- Alignment: Ownership guideline (1.5x base for VPs), option-based LTIP, and anti-hedging/anti-pledging policies indicate strong alignment and reduced misalignment risks for VP-level executive officers like Davis .
- Retention and payout timing: Absence of employment/severance agreements lowers guaranteed retention economics, but MIP/MVP banking features (for applicable roles) and LTIP retirement vesting create multi-year incentive continuity and controlled exit economics .
- Trading signals: Strict insider trading windows and no 10b5‑1 plans entered in 2024 reduce opportunistic trading; any future Form 4 activity should be evaluated against blackout periods and ownership guideline compliance .
- Performance linkage: Incentive metrics (MVP, operating ROE, combined ratio) and demonstrated TSR outperformance vs peers (2020–2024) suggest pay-for-performance discipline; benchmark ranks and peer reviews by HCCC reinforce external competitiveness without evident pay inflation for non-NEOs .