George Murphy
SAFETY INSURANCE GROUPAbout George Murphy
George M. Murphy, CPCU, is President, Chief Executive Officer, and Chairperson of the Board of Safety Insurance Group (SAFT). He became CEO on April 1, 2016 (director since Feb 2016; Chair since Mar 3, 2023) and has been employed by Safety for 36 years; age 58 as of the 2025 record date . Under his tenure, Safety highlights long-term value creation, including 1,428% total shareholder return since the 2002 IPO, while 2024 delivered record top-line growth (Direct Written Premium +20.4%), but with a 101.1% combined ratio and non-GAAP operating EPS of $4.16; 2024 EBIT was $86.4m, driving a 139% bonus funding outcome . Murphy holds the Chartered Property Casualty Underwriter (CPCU) designation and serves on the Board of Trustees of the Insurance Library Association of Boston .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Safety Insurance Group | President & Chief Executive Officer | 2016–present | Led growth with 2024 record DWP (+20.4%) and structured pay-for-performance (annual EBIT metric; 3-yr PSUs tied to combined ratio and relative TSR) . |
| Safety Insurance Group | Chairperson of the Board | 2023–present | Combined CEO/Chair role with Lead Independent Director counterbalance; 100% board/committee attendance in 2024 . |
| Safety Insurance Group (Subsidiaries) | Vice President of Marketing | 2005–2016 | Built deep agent relationships across MA, NH, ME — a core growth channel . |
| Safety Insurance Group | Director; Investment Committee member | Since Feb 2016 | Capital deployment oversight; later appointed Chair of Investment Committee . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Insurance Library Association of Boston | Board of Trustees | Ongoing | Industry network and education; supports governance and thought leadership . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 800,000 | 800,000 | 800,000 |
| Time-Vested Stock Awards ($) | 405,000 | 450,000 | 495,000 |
| Performance-Based Stock Awards ($) | 495,000 | 550,000 | 605,000 |
| Non-Equity Incentive Plan Comp ($) | 473,600 | — | 1,390,000 |
| All Other Comp ($) | 579,590 | 162,783 | 389,625 |
| Total ($) | 2,753,190 | 1,962,783 | 3,679,625 |
- All Other includes EICP deferred bonus and match, 401(k) match, dividends on restricted shares ($65,700 in 2024), perqs (parking, auto), and life insurance; 2024 EICP allocation for Murphy was $261,610 .
- Pay ratio in 2024: 39:1 (CEO total $3,679,625 vs median employee $93,528) .
- Base salaries targeted at the median of peers; CEO had 72% of target pay “at risk” in 2024, above peer CEOs per Pay Governance benchmarking .
Performance Compensation
Annual Incentive Plan (AIP)
| Item | 2024 |
|---|---|
| Metric | Earnings before interest, taxes, changes in unrealized gains on equity securities and credit loss expense (EBIT-adjusted) |
| Target ($) | 62.3 million |
| Actual ($) | 86.4 million |
| Payout vs Target | 139% |
| CEO Payout ($) | 1,390,000 |
| CEO Payout Opportunity | 62.5% (thr) / 125% (target) / 187.5% (max) of salary |
| 2024 AIP Plan Update | Amended & restated plan; updated CEO payout opportunity; expanded eligible performance objectives |
Long-Term Incentives (LTI) – 2024 Grants
| Grant Date | Time-Based RS | Performance-Based RS | Total Shares | Grant Value ($) | Key Vesting / Design |
|---|---|---|---|---|---|
| Feb 27, 2024 | 5,782 | 6,715 | 12,497 | 1,100,000 | Time RS: 30% vests 2/27/2025, 30% vests 2/27/2026, 40% vests 2/27/2027; PSUs cliff-vest after 3-year period if performance conditions are met . |
Performance Share Design (applies to recent PSU cycles):
- 60% weighting: 3-year average combined ratio vs peer-derived target; payout 0–200% .
- 40% weighting: 3-year relative TSR vs property-casualty peers; payout 0–200%; capped at 100% if absolute TSR is negative .
- Retirement provisions allow pro-rata or acceleration subject to age/service conditions .
2022–2024 PSU Outcome:
- Combined ratio (3-yr): 102.0% ⇒ 58% payout (on the 60% weight) .
- Relative TSR: 16% (22nd percentile) ⇒ below 30th percentile threshold ⇒ 0% payout (on the 40% weight) .
- Total PSU payout: 34.8% of target; CEO: 2,027 shares earned vs 5,456 target (3,429 forfeited) .
Equity Ownership & Alignment
- Beneficial ownership: 113,919 SAFT shares (0.8% of outstanding 14,893,703 shares as of Mar 17, 2025) .
- Stock ownership guidelines: CEO 5x base salary; all NEOs meet guidelines .
- Anti-hedging and anti-pledging: Executives and directors prohibited from hedging or pledging SAFT equity; sales mandated through pre-approved plans .
- Options: None outstanding (no option grants since 2003 to NEOs) .
Unvested Restricted Stock at 12/31/2024 (CEO)
| Award | Shares | Market Value ($) |
|---|---|---|
| 2022 Time-based (vests through 2/23/2025) | 1,906 | 157,087 |
| 2022 Performance-based (performance-contingent) | 5,456 | 449,574 |
| 2023 Time-based (vests through 2/22/2026) | 3,618 | 298,148 |
| 2023 Performance-based (performance-contingent) | 6,051 | 498,602 |
| 2024 Time-based (vests through 2/27/2027) | 5,782 | 476,437 |
| 2024 Performance-based (performance-contingent) | 6,715 | 553,316 |
Deferred Compensation (EICP) – CEO
- 2024 EICP allocation: $261,610; company match $24,124 .
- EICP year-end 2024 account balance: $7,875,414; 2024 aggregate earnings $735,664 .
- Pool equals 1.75% of insurance subs’ annual consolidated statutory net income; invests in mutual funds; paid on termination/change-in-control per plan .
Employment Terms
- Employment agreement renewed to Dec 31, 2025; annual renewals require Compensation Committee action (90+ days prior) .
- Severance (no CIC): lump sum equal to remaining term salary; continuation of life/health benefits for remaining term; acceleration of unvested restricted stock not granted in year of termination; at 12/31/2024 scenario, total estimated $2,239,399 for CEO .
- Change-in-control (double trigger): greater of standard severance or 3x (CEO/CFO) base salary + most recent annual bonus; 3 years of life/health benefits for CEO/CFO; target AIP deemed achieved for in-year payout; equity vests; CEO estimated $5,941,128 at 12/31/2024 (includes $2,433,164 accelerated equity; $1,000,000 AIP at target; $2,400,000 3x base+bonus; $107,964 benefits) .
- Non-compete and non-solicitation provisions; confidentiality obligations .
- Clawback policy (adopted Aug 2023) per SEC/Nasdaq rules; applies to current/former Section 16 officers; no misconduct requirement .
- No excise tax gross-ups on change-in-control payments .
Board Governance
- Roles: CEO and Chair of the Board; Chair of the Investment Committee .
- Independence: All directors other than the CEO are independent under Nasdaq/SEC rules .
- Lead Independent Director: Thalia M. Meehan (approves agendas/materials; leads executive sessions each quarterly meeting) .
- Attendance: 2024—five board meetings; all directors had 100% attendance at board and committee meetings .
- Director compensation: Employee directors (incl. CEO) receive no director fees; only non-employee directors are paid retainers/equity .
Board and Committees (as relevant to Murphy)
- Board Chair (since Mar 3, 2023) .
- Investment Committee Chair (Investment oversight of invested assets and policies) .
Dual-role implications (CEO + Chair):
- Governance mitigations include empowered Lead Independent Director, independent committees, and regular executive sessions without management .
Director Compensation (for completeness)
- Non-employee director annual cash retainer: $95,000; additional retainers for LID ($25,000), Audit Chair ($17,500), Comp and N&G Chairs ($12,500); 1,000-share annual equity grant (Feb 27, 2024) .
- Director stock ownership guideline: 4x annual cash retainer within five years; in compliance by longer-tenured directors .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval: 97.7% support in 2024 .
- Compensation consultant: Pay Governance (independent; no conflicts) .
- 2024 AIP amended/updated; CEO payout opportunity adjusted to align with industry benchmarks .
Compensation Peer Group (2024)
- American Coastal, Argo Group, Donegal, Employers Holdings, HCI Group, Heritage, Horace Mann, Mercury General, NI Holdings, Palomar, RLI, Selective, Skyward Specialty (new in 2024), United Fire, Universal Insurance Holdings; Hanover removed (size), Hallmark removed (market cap pressure) .
Performance & Track Record
| Measure | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Combined Ratio (%) | 87.1 | 93.0 | 97.2 | 107.7 | 101.1 |
| GAAP Net Income ($m) | 138.2 | 130.7 | 46.6 | 18.9 | 70.7 |
| Company TSR (Index=100 at 12/31/2019) | 88.3 | 100.8 | 103.9 | 94.7 | 113.3 |
Additional 2024 operating highlights:
- DWP +20.4%; policy counts +8.5%; premium per policy +10.9% .
- EBIT-adjusted $86.4m; AIP funded at 139% of target .
- Non-GAAP operating EPS $4.16 .
- Long-term TSR since IPO: 1,428% through 12/31/2024 .
Insider Transactions and Selling Pressure
Recent reported Form 4 activity for George M. Murphy:
- Feb 25, 2025: Sale of 1,185 shares at $79.41 (MarketWatch insider table) .
- Mar 4, 2024: Acquisitions/dispositions around Feb 27–Mar 4 window (annual grant/withholding cluster) (Benzinga’s Form 4 summary) .
- Mar 2, 2023: Tax withholding disposition around Feb 27–Mar 1 (Benzinga summary) .
Policy note: SAFT’s insider trading policy prohibits hedging/pledging and mandates sales via pre-approved plans, which can reduce signaling risk of routine sales (e.g., tax-withholding) .
Compensation Structure Analysis
- Mix shift toward performance equity: 55% of 2024 LTI in PSUs; 45% time-based RSUs; PSU cap if absolute TSR negative .
- AIP metric focused on EBIT-adjusted; 2024 plan updated and CEO opportunity aligned with market benchmarks .
- No option repricing; no excise tax gross-ups; double-trigger CIC vesting — shareholder-friendly .
- Strong ownership alignment: CEO exceeds 5x salary guideline; no pledging/hedging allowed .
Related Party Transactions and Red Flags
- Related party transactions: none reported for 2024 .
- Governance mitigants: Lead Independent Director, independent Audit/Comp/N&G committees, term limits for committee chairs .
- Risk flags: Dual CEO/Chair role; however, mitigated by LID structure and frequent executive sessions .
- Clawback policy adopted; robust ownership and trading policies .
Employment Terms (Detail – CEO)
| Scenario (as of 12/31/2024) | Key Terms | Estimated Value |
|---|---|---|
| Change-in-Control + qualifying termination (double trigger) | 3x base + most recent bonus; 3 years life/health; target AIP for in-year; equity vests | $5,941,128 |
| Involuntary (without cause) | Lump sum remaining term salary; life/health for remaining term; vesting of unvested RS not granted in year of termination | $2,239,399 |
| Resignation for Good Reason (no CIC) | Lump sum remaining term salary; life/health for remaining term; (equity forfeited) | $835,988 |
| With Cause | Limited amounts (e.g., 3 months base and benefits in certain cases) | $208,997 |
| Death/Disability | Base salary; one-year benefits (disability); equity per plan | $3,269,152 |
Definitions: “Cause,” “Good Reason,” and “Change in Control” per employment agreements; plan-level double-trigger applies to equity .
Investment Implications
- Alignment strong: High at-risk pay (AIP + PSUs), stringent clawback, robust ownership rules, and no hedging/pledging reduce agency risk .
- Performance sensitivity: AIP tied to EBIT-adjusted and PSUs to combined ratio/relative TSR produced a below-target 34.8% payout for the 2022–2024 PSU cycle, evidencing downside responsiveness; 2024 AIP paid 139% on improved EBIT .
- Retention economics: Annual contract renewals plus sizable unvested equity and significant EICP balance ($7.88m) support retention; CIC economics (3x base+bonus; equity vesting) are within typical small/mid-cap P&C norms but meaningful .
- Governance: CEO/Chair combination warrants monitoring; mitigated by empowered LID and independent committees with perfect attendance; Say-on-Pay support (97.7%) indicates shareholder acceptance of current program .
- Trading signals: Recent Form 4s suggest routine grant/withholding cadence and a small 2025 sale; with pre-approved plan mandates, incremental negative signal appears limited absent pattern changes .