Patrick S. Brennan
SELECTIVE INSURANCE GROUPAbout Patrick S. Brennan
Patrick S. Brennan, age 50, is Executive Vice President and Chief Financial Officer of Selective Insurance Group, Inc., appointed effective October 1, 2024. He previously served at The Progressive Corporation as Treasurer (2016–2024), Commercial Lines Product Manager (2010–2015), and Senior Manager of Investor Relations (2006–2010). He holds a B.S. in Mathematics and an MBA from the University of Notre Dame and completed the University of Chicago Executive Program for Prospective CFOs. Company performance relevant to pay-for-performance: 2024 GAAP ROE 7.0%, non-GAAP operating ROE 7.1% (vs. 12% target), combined ratio 103.0% with 7.1 points adverse prior-year casualty reserve development, overall statutory net premiums written (NPW) +12%, after-tax net investment income +17%, and 2024 TSR -4.6% (1-year), 5.9% (3-year), 9.0% (5-year), 14.8% (10-year) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Selective Insurance Group | EVP & CFO | Oct 2024–Present | Leads finance, SEC/statutory reporting, IR, sustainability, tax, capital planning, treasury, billing, investments, ERM, reinsurance, FP&A, and procurement; facilitates 2025 budget and investor transition . |
| The Progressive Corporation | Treasurer | 2016–2024 | Capital markets, liquidity, investment oversight; member of North American CRO Council . |
| The Progressive Corporation | Commercial Lines Product Manager | 2010–2015 | Product/pricing execution in commercial lines . |
| The Progressive Corporation | Senior Manager, Investor Relations | 2006–2010 | Sell-side buy-side engagement, disclosure quality . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| St. Ignatius High School | Vice Chair, Board of Regents | Unspecified | Community leadership and governance exposure . |
| North American Chief Risk Officer Council | Member | 2016–2024 | Risk management best practices network . |
| Association of Finance Professionals | Member | Unspecified | Finance professional standards and development . |
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base Salary | $650,000 | Set upon appointment as CFO effective Oct 1, 2024 . |
| Target Bonus % | Not disclosed | Brennan received a guaranteed make-whole ACIP payment, not standard ACIP target . |
| Actual Bonus Paid | $500,000 | Guaranteed “Make-Whole ACIP Payment” for 2024 . |
Performance Compensation
- Brennan did not participate in the 2024 LTIP cycle; instead, he received retention/make-whole equity and cash awards aligned to onboarding and forfeited pay from prior employer .
| Incentive Type | Metric | Weighting/Structure | 2024 Target | 2024 Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Corporate ACIP (structure reference) | GAAP combined ratio | Financial component 50% of ACIP; 0% payout over 100% combined ratio | Target 95%; max at ≤88% | 103.0% combined ratio → 0 points financial; strategic component funded at 50 points; Brennan’s bonus was guaranteed and not based on ACIP results . | N/A for Brennan (guaranteed payment) . |
| Strategic ACIP (structure reference) | 13 strategic measures | 0–50 points (+5 potential for exceeding pure rate) | Full achievement of 13 measures | 12/13 achieved; strategic funded at 50 pts; pure rate exceeded partially (+3 of +5) . | N/A for Brennan (guaranteed payment) . |
| Equity Make-Whole & Retention Award (RSUs) | Time-vested RSUs | Not performance-based | Grant date fair value $1,100,000 | Granted | Vests on third anniversary of grant date of October 8, 2025 (i.e., October 8, 2028), subject to continued employment . |
| Cash Make-Whole & Retention Award | Cash bonus | Not performance-based | $220,000 (first payment) and $244,000 (second payment) | $220,000 paid in 2024; $244,000 payable following 1-year anniversary of employment | Second payment following Oct 1, 2025 anniversary . |
Equity Ownership & Alignment
| Measure | As of/Detail | Amount |
|---|---|---|
| Beneficial Ownership (common stock) | Feb 20, 2025 | 12,082 shares; <1% of outstanding; no margin accounts or pledged shares . |
| Unvested RSUs | Dec 31, 2024 | 12,036 units; market value $1,125,607 . |
| Options (exercisable/unexercisable) | Feb 20, 2025 | None; no options vesting within 60 days . |
| Shares Pledged as Collateral | Feb 20, 2025 | None (explicit prohibition/none held in margin accounts) . |
| Stock Ownership Guidelines | CFO requirement | 4x base salary; must meet within later of 5 years from role or 3 years from changes; retain 75% of net shares until guideline met; officers have met or are on track . |
| Hedging Policy | Company-wide | Hedging of Selective stock prohibited for officers/directors/employees . |
Employment Terms
| Term/Provision | Brennan Detail | Source |
|---|---|---|
| Contract Term | Initial three-year term commencing Oct 1, 2024; ends Oct 1, 2027; auto-renews annually unless terminated by written notice . | |
| Severance (no CIC) | Termination without Cause or resignation for Good Reason: 1.5x (salary + average of prior 3 years’ cash incentive), paid in 12 installments; partial benefits reimbursement up to 18 months; immediate vesting of outstanding equity/cash incentive awards except termination for Cause/resignation other than Good Reason . | |
| Severance (Change in Control) | Double-trigger: within two years post-CIC, lump-sum severance equal to 1.5x of greater of (salary + target bonus) or (salary + average of prior 3 bonuses); partial benefits reimbursement for 18 months; equity/cash awards vest; cash incentive units multiplied by 150% in payout calculations . | |
| Non-Compete | Not disclosed in proxy summary; agreements include confidentiality and two-year non-solicitation . | |
| Release Requirement | Severance conditioned on customary release of claims . | |
| Tax Gross-ups | No excise tax gross-ups in current employment agreements . | |
| Clawback | SEC/Nasdaq-compliant Dodd-Frank clawback effective for compensation received on/after Oct 2, 2023 due to accounting restatements (regardless of misconduct) . |
Compensation Structure Analysis
- 2024 onboarding featured guaranteed and retention-focused awards (cash and time-vested RSUs) rather than performance-conditioned LTIP for Brennan, reflecting market recruiting requirements and forfeited compensation from his prior employer; the broader NEO program remains heavily performance-based (ACIP tied to combined ratio and strategic measures; LTIP tied to three-year ROE/TSR/peer-relative statutory metrics) .
- Stock ownership guidelines and hedging/pledging prohibitions strengthen alignment; double-trigger CIC, no gross-ups, and robust clawback reduce governance risk .
Performance & Track Record
- Company operating performance in 2024: GAAP ROE 7.0%, non-GAAP operating ROE 7.1% (below 12% target), combined ratio 103.0% with 7.1 points prior-year reserve development; NPW growth +12%; after-tax net investment income +17% .
- TSR context: -4.6% (1-year), 5.9% (3-year), 9.0% (5-year), 14.8% (10-year), highlighting long-term value creation despite 2024 underwriting headwinds .
- Ratings reaffirmed with stable outlooks by AM Best (A+), S&P (A), Moody’s (A2), Fitch (A+) in 2024, supporting financial strength during Brennan’s onboarding as CFO .
Vesting Schedules and Potential Selling Pressure
- RSUs: Brennan’s Equity Make-Whole & Retention Award vests on the third anniversary of the grant date of October 8, 2025 (i.e., October 8, 2028), subject to continued employment; dividend equivalents accrue but are payable only upon vesting .
- Cash retention: $244,000 payable following his one-year employment anniversary (post Oct 1, 2025) .
- No options outstanding; no pledged shares; hedging prohibited—limits near-term forced selling/pledging risk. Monitor Form 4 filings and any 10b5-1 plans around RSU vest dates .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval exceeded 99% of votes cast; CHCC did not materially change compensation framework, maintaining emphasis on balanced short- and long-term performance alignment .
Equity Ownership & Beneficial Ownership Table
| Metric | Date | Amount |
|---|---|---|
| Total shares beneficially owned | Feb 20, 2025 | 12,082; <1% of class; no margin or pledged accounts . |
| Unvested RSUs (market value) | Dec 31, 2024 | 12,036; $1,125,607 . |
Employment & Contracts Summary Table
| Item | Brennan |
|---|---|
| Initial Term End | Oct 1, 2027 . |
| Auto-Renewal | Annual extensions unless notice . |
| Severance (No CIC) | 1.5x (salary + 3-year average bonus); 12 installments; benefits reimbursement up to 18 months; equity/cash awards vest (except Cause) . |
| Severance (CIC) | Double-trigger; 1.5x of greater of (salary + target bonus) or (salary + 3-year average bonus); lump sum; 18 months benefits; equity/cash awards vest; CIUs at 150% . |
| Non-Solicit | 2 years post-termination . |
| Clawback | Dodd-Frank/Nasdaq compliant . |
| Gross-Ups | None . |
Investment Implications
- Alignment: Strong governance features—ownership requirements (4x salary for CFO), hedging/pledging prohibitions, clawback, double-trigger CIC—indicate high alignment and reduced agency risk; Brennan’s guaranteed/retention awards are standard for recruiting senior talent without diluting long-term performance orientation of the broader program .
- Retention: Time-vested RSUs (vesting Oct 2028) and staged cash retention (through/after Oct 2025) provide clear retention hooks; severance economics (1.5x multiples) are moderate and market-consistent, supporting stability through transition cycles .
- Trading signals: No pledging; options absent; next liquidity events likely around retention cash (post-Anniversary) and RSU vesting; monitor insider trading windows/10b5-1 plans as vest dates approach, and watch ACIP/LTIP funding sensitivity to combined ratio improvements and reserve development trajectory .
- Execution risk: 2024 underwriting challenges (adverse reserve development) depressed ACIP financial funding, but investment performance was strong; CFO priorities likely include reserve adequacy, pricing discipline, capital management, and investor communications—key levers for ACIP/LTIP outcomes and valuation re-rating .