John J. Marchioni
SELECTIVE INSURANCE GROUPAbout John J. Marchioni
Chairman, President & CEO of Selective Insurance Group since 2020; Director since 2019; Chairman since 2022. Age 55. Education: Princeton University (B.A.); Harvard University (Advanced Management Program); CPCU designation . Under his leadership, SIGI delivered strong multi‑year TSR on the 2021 LTIP cycle (154.53% TSR; 41% statutory operating return on policyholder surplus; 49% NPW growth) driving maximum cash unit payouts in 2024 . 2024 corporate results were mixed with GAAP ROE of 7.0%, non‑GAAP operating ROE of 7.1%, a 103.0% GAAP combined ratio due to 7.1 pts of adverse prior‑year casualty reserve development, offset by 12% NPW growth, 8% new business growth, and 9.5% renewal price increases . Financial trajectory under his tenure shows revenue growth and a volatile EBITDA profile:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 3,661,535,000* | 4,216,256,000* | 4,833,498,000* |
| EBITDA ($) | 351,377,000* | 517,854,000* | 354,433,000* |
| *Values retrieved from S&P Global. |
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Selective Insurance Group | President & CEO | 2020–present | Oversight of all company operations; led strategic initiatives and industry engagement . |
| Selective Insurance Group | President & COO | 2013–2020 | Drove enterprise execution and operational performance . |
| Selective Insurance Group | EVP, Insurance Operations | 2010–2013 | Led underwriting/field operations at scale . |
| Selective Insurance Group | EVP, Chief Underwriting & Field Ops Officer | 2008–2010 | Advanced underwriting rigor and distribution effectiveness . |
| Selective Insurance Group | EVP, Chief Field Ops Officer | 2007–2008 | Strengthened field execution . |
| Selective Insurance Group | SVP, Director of Personal Lines | 2005–2007 | Grew and managed personal lines . |
| Selective Insurance Group | Various roles incl. Government Affairs | 1998–2005 | Built regulatory and industry fluency foundational to current leadership . |
External Roles
| Organization | Role | Years |
|---|---|---|
| The Institutes | Board of Trustees | Since 2022 |
| American Property Casualty Insurance Association | Director; Executive Committee Member | Director since 2020; Executive Committee since Jan 2024 |
| Commerce and Industry Association of New Jersey | Director | Since 2015 |
| St. John’s University School of Risk Management, Insurance and Actuarial Science | Board of Overseers | Since 2021 |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary paid ($) | 988,462 | 1,000,000 | 1,042,308 |
| Base salary rate as of Feb 24, 2024 ($) | — | — | 1,050,000 |
| All other compensation ($) | 93,565 | 88,850 | 93,096 (includes DCP/401k matches and tax prep) |
| CEO pay ratio | — | — | 46x (CEO: $6,314,664; median: $136,133) |
Notes:
- 2024 base salary rate increased 5% vs. 2023 reflecting performance and peer alignment .
- Perquisites are limited (e.g., tax preparation; $4,500 in 2024), consistent with industry practice .
Performance Compensation
Annual Cash Incentive (ACIP) – Structure and 2024 Outcome
| Item | Plan design / Result |
|---|---|
| Target construct | Two components: financial (GAAP combined ratio) and strategic (13 measures). Financial pays 0% above 100% CR; 120% at 88% CR. Strategic 0–50% with potential +5% upside . |
| 2024 results | GAAP combined ratio 103.0% → 0 points (financial); strategic measures funded at 50 points (12/13 achieved; partial upside on rate) . |
| CEO ACIP opportunity | 0–350% of base salary . |
| CEO ACIP actual (2024) | 115% of base salary = $1,200,000; down 40% YoY given 2024 financial performance headwinds . |
| ACIP (CEO) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non‑equity incentive paid ($) | 2,100,000 | 2,000,000 | 1,200,000 |
Long‑Term Incentive Program (LTIP) – Design and 2024 Grants
| Element | 2024 Grant | Vesting/Performance |
|---|---|---|
| RSUs (performance‑based) | 30,185 units; grant date fair value $2,979,260 (2/2/2024) | 3‑year; vest/pay after achieving either cumulative non‑GAAP operating ROE ≥12% (ex‑AOCI baseline) or ≥5% cumulative policy count or statutory NPW growth over 1/1/2024–12/31/2026; settled ~2/2/2027 . |
| Cash Incentive Units (CIUs) | Threshold 4,400; Target 10,000; Max 15,000 units; grant date fair value $1,000,000 (2/2/2024) | 3‑year; value floats with SIGI TSR; earned units scale 0–150% based on 3‑yr statutory NPW growth and operating ROS vs. peer index; settled ~2027 . |
Historical LTIP performance reference: 2021 grant achieved 100% on RSUs and 150% on CIUs driven by 154.53% TSR, 41% operating ROS, and 49% NPW growth for 1/1/2021–12/31/2023 .
Multi‑Year Summary Compensation (CEO)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 988,462 | 1,000,000 | 1,042,308 |
| Stock awards ($) | 2,628,160 | 2,764,181 | 3,979,260 |
| Non‑equity incentive ($) | 2,100,000 | 2,000,000 | 1,200,000 |
| Change in pension/def. comp. earnings ($) | — | 130,795 | — |
| All other comp ($) | 93,565 | 88,850 | 93,096 |
| Total ($) | 5,810,187 | 5,983,826 | 6,314,664 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 150,485 shares, incl. 135,395 in a trust . |
| % of outstanding | ~0.25% (150,485 / 60,740,489 shares outstanding) . |
| Pledging | None; no directors or execs hold shares in margin accounts or pledged . |
| Ownership guidelines | CEO: 6x base salary; retention of at least 75% of net shares acquired until guideline met; all officers have met or are on track . |
| Hedging policy | Hedging prohibited for officers/directors/employees . |
| 2024 stock vested | 34,678 shares/units vested; value realized $3,833,129 (mix of RSUs and CIUs) . |
| Outstanding unvested (12/31/2024) | 34,075 stock units ($3,759,379 mkt value) ; unearned RSU/CIU awards spanning 2023–2024 grants with stated counts and payout values (assumes max CIU performance): 7,000; 21,276; 10,000; 30,631 units with respective values $1,138,539; $1,989,705; $1,416,081; $2,864,620 . |
| Early retirement vesting nuance | Achieved “Award Early Retirement Age” on May 28, 2024; RSU/CIU awards vest subject only to performance conditions thereafter . |
Employment Terms
| Term | CEO (Marchioni) |
|---|---|
| Employment agreement start | Feb 1, 2020 (upon CEO appointment) . |
| Base salary rate (2/24/2024) | $1,050,000 . |
| Severance (no CIC) | 2x multiple; 24 months of benefits . |
| Change‑in‑control (CIC) | 2.99x multiple; 36 months of benefits; double‑trigger for cash and equity . |
| 409A compliance | Programs structured to comply with Section 409A timing rules . |
| Potential payouts (as of 12/31/2024) | Retirement $9,915,462; Death/Disability $16,282,129; Termination w/o Cause or Resignation w/ Good Reason $16,332,415; Termination Following CIC $22,232,002 . |
| Clawback policy | Adopted Dec 1, 2023; compliant with SEC/Nasdaq; restatement‑based recoupment regardless of misconduct . |
Nonqualified Deferred Compensation (2024):
- Executive contributions $43,308; company contributions $56,950; aggregate earnings $257,395; 12/31/2024 balance $1,966,677 .
Board Governance and Service
- Board service: Director since 2019; Chairman since 2022; serves on the Executive Committee .
- Dual‑role implications: Combined CEO/Chair is mitigated by presence of a Lead Independent Director (Robert Kelly Doherty, Lead Independent Director since 2022) and independent committees .
- Independence: As CEO, not independent; board features fully independent committees and a Compensation and Human Capital Committee (CHCC) with an independent consultant .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay support exceeded 99% of votes cast; CHCC considered this feedback and maintained calibrated pay‑for‑performance design .
Compensation Peer Groups (context)
- LTIP cash units measured vs. Cash Incentive Unit Peer Group: Auto‑Owners Insurance Group; Cincinnati Financial; CNA Financial; Donegal Insurance Group; Erie Indemnity; Liberty Mutual; The Hanover; United Fire Group; Utica National; Westfield Group .
- Benchmarking for grant sizing references a broader “Proxy Peer Group” and survey data (not fully enumerated in proxy) .
Performance & Track Record
- 2024: GAAP ROE 7.0%; non‑GAAP operating ROE 7.1%; combined ratio 103.0% (incl. 7.1 pts adverse prior‑year casualty reserve development); NPW +12%; new business +8%; renewal pure price +9.5% .
- Prior LTIP cycle (2021–2023): 154.53% TSR; 41% statutory operating ROS; 49% NPW growth driving 150% CIU payout factor .
Risk Indicators & Red Flags
- Hedging prohibited; no pledging or margin use by directors/execs .
- Double‑trigger CIC; no option repricing; no excise tax gross‑ups; limited perquisites .
- Equity grants timed post Q4/year‑end earnings under a documented policy .
- Insider trading policy in place (policy filed with 10‑K) .
Additional Financial Context
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | 3,661,535,000* | 4,216,256,000* | 4,833,498,000* |
| EBITDA ($) | 351,377,000* | 517,854,000* | 354,433,000* |
| *Values retrieved from S&P Global. |
Investment Implications
- Alignment: High equity orientation via performance‑based RSUs (~75% of LTIP value) and CIUs (~25%), with rigorous three‑year performance gates (ROE or growth for RSUs; TSR and relative statutory metrics for CIUs) and strong ownership/retention policies; hedging/pledging prohibited—favorable for alignment and reduces sell‑pressure post‑vesting .
- Retention risk: Robust severance/CIC protections (2x; 2.99x) and multi‑year award cycles support stability; early‑retirement status means awards vest subject to performance conditions only, which may modestly increase payout certainty but still ties value to performance .
- Near‑term selling pressure: 2022 RSUs/CIUs settled in early 2025; 2023 awards settle in 2026; 2024 awards in 2027; 75% net‑share retention until guideline met tempers disposals; no pledging reduces forced‑sale risk .
- Pay‑for‑performance signal: 2024 ACIP cut 40% YoY on underwriting headwinds (adverse reserve development), while LTIP size increased to better align with peers—balanced approach that rewards long‑term value creation while acknowledging near‑term results .