Paul Narciso

About Paul J. Narciso

Paul J. Narciso is Vice President – Claims at Safety Insurance Group (SAFT), age 61, with 34 years at Safety and 38 years of claim experience including prior roles at two national carriers . He has led Claims since his appointment on August 5, 2013, during a period of strong long-term shareholder value creation (total return since IPO: 1,428% through 12/31/2024) and recent operational scale-up (2024 direct written premiums +20.4%, policy counts +8.5%, average premium per policy +10.9%) . Company performance context: 2024 GAAP net income $70.7M and combined ratio 101.1%; TSR periods: 1-year 13%, 3-year 11%, 5-year 11% .

Past Roles

External Roles

No external board or committee roles for Mr. Narciso were disclosed.

Fixed Compensation

All Other Compensation components (2024): EICP bonus $108,370; 401(k) company match $26,496; dividends on restricted shares $31,439; other compensation $10,605 (includes term life premium above $50k and parking) .

Performance Compensation

Grants of plan-based awards (2024):

• Stock awards: 4,488 shares; grant date fair value $375,000; granted 2/27/2024 .
• Annual incentive payout range for 2024 as above; actual paid $276,220 .

Equity Ownership & Alignment

• Beneficial ownership: 39,046 shares; 0.3% of outstanding as of March 17, 2025 .

• Outstanding unvested restricted stock at 12/31/2024:

  Grant Type (Footnote)	Shares (#)	Market Value ($)
  2022 RSU (1)	794	65,459
  2022 PSU (2)	2,273	187,295
  2023 RSU (3)	1,448	119,282
  2023 PSU (4)	2,420	199,408
  2024 RSU (5)	1,977	162,905
  2024 PSU (6)	2,318	191,003
  Note: Market values calculated using $82.40 per share at 12/31/2024 .

• Restricted stock vested in 2024: 3,523 shares; value realized $301,472 .

• Stock options: None outstanding or exercised; Company had no options for NEOs at 12/31/2024 .

• Ownership guidelines: Executives must hold stock valued at 3× base salary; all NEOs meet guidelines . Anti-hedging and anti-pledging policies prohibit hedging and pledging; insider sales must be via pre-approved trading plans .

Employment Terms

• Role start: Appointed VP – Claims on August 5, 2013; employed by Safety since 1990 .
• Contract term: Employment agreements renewed annually; current term runs through December 31, 2025 .
• Severance (no CoC): If terminated without cause, lump sum equal to remaining annual base salary ($331,200), life/health benefits for remaining term (~$34,300), and acceleration of previously granted unvested restricted stock (excluding grants made in year of termination) valued at $571,444 as of 12/31/2024 .
• Change-in-control (double trigger required): If CoC followed by termination without cause or resignation for Good Reason, estimated total incremental payments $1,855,071, which include:
  • Equity acceleration: $925,352
  • Annual incentive deemed at target: $198,720
  • Cash severance: 2× annual base + most recent bonus = $662,399
  • Life/health benefits: 2 years ($68,600)
• Other termination scenarios (estimated totals): With cause $91,375; resignation for Good Reason (no CoC) $365,500; death/disability $1,290,852 .
• Non-compete/non-solicit: Included in agreements; confidentiality obligations; definitions for Cause and Good Reason specified (e.g., material reduction in responsibilities; relocation >75 miles; specified misconduct) .
• Clawback: Recoupment policy for incentive compensation upon accounting restatement within 3 years .
• Tax gross-ups: None for change-in-control excise taxes; equity plan prohibits option repricing/share recycling without stockholder approval .
• Benefits: Standard welfare benefits and 401(k) with 100% match up to 8% at plan year end; no defined benefit pension .

Deferred Compensation (EICP)

Compensation Structure Analysis

• Mix shift: Significant equity-based LTI with 55% performance shares and 45% time-based shares in 2024; emphasizes long-term TSR and combined ratio outcomes .
• Pay at risk: Company emphasizes at-risk compensation; while CEO metric disclosed (72% at risk), similar philosophy applies across NEOs .
• Alignment safeguards: Robust ownership guidelines; anti-hedging/anti-pledging; double-trigger CoC; clawback policy; no excise tax gross-ups; limits on perquisites .
• Annual incentive calibration: 2024 cash bonus paid ($276,220), reflecting performance outcomes under the Annual Performance Incentive Plan; 2023 showed no payout for NEOs (illustrating sensitivity to performance) .

Investment Implications

• Alignment and dilution risk: Strong alignment via ownership guidelines and prohibitions on hedging/pledging reduce misalignment risk; no options outstanding mitigates option overhang .
• Retention dynamics: Double-trigger CoC protections and meaningful unvested PSUs/RSUs create retention hooks through 2027; severance terms are moderate for NEOs (2× cash + benefits) vs peers .
• Performance-linked upside: PSU metrics tied to 3-year TSR vs peers and combined ratio could drive outsized equity vesting (0–200%) if underwriting profitability improves; 2024 combined ratio 101.1% suggests execution focus on loss trends and rate adequacy is pivotal near-term .
• Trading signals: 2024 RSU vesting (3,523 shares; $301,472) may create periodic liquidity but insider sales are constrained to pre-approved plans; absence of pledging reduces forced-sale risk; monitor Form 4 filings for incremental selling pressure around vest dates .
• Governance quality: Independent comp committee with external consultant, clawback, and no gross-ups support shareholder-friendly compensation practices, lowering governance red-flag risk .