Paul Kush
SELECTIVE INSURANCE GROUPAbout Paul Kush
Executive Vice President and Chief Claims Officer at Selective Insurance Group since 2019; age 65 in the latest proxy. Education: B.S. from Duquesne University; Wharton School/American Institute of CPCU Advanced Executive Education Program . Company performance context during his tenure (claims leadership impacts underwriting results and combined ratio) is summarized below.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return – Value of $100 Investment | 104.46 | 129.52 | 142.03 | 161.42 | 154.01 |
| Peer Group TSR – Value of $100 Investment | 90.45 | 101.26 | 108.70 | 123.18 | 161.18 |
| Net Income ($USD thousands) | 246,355 | 403,837 | 224,886 | 365,238 | 207,012 |
| GAAP Combined Ratio (%) | 94.9 | 92.8 | 95.1 | 96.5 | 103.0 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ProSight Specialty Insurance | Chief Claims Officer | 2010–2019 | Led specialty-lines claims function (as Chief Claims Officer) |
| Crum & Forster | Senior Vice President, Claims; other management roles | 1982–2009 | Claims management and leadership |
External Roles
No external board or committee roles for Kush are disclosed in SIGI proxies; his biography lists corporate roles and education only .
Fixed Compensation
- Stock ownership guidelines for Executive Vice Presidents require stock holdings equal to 3x base salary, measured within five years of status and updated for salary changes; unexercised options do not count . Officers must retain at least 75% of shares acquired from equity awards, net of taxes/transaction costs, until meeting guidelines .
- Hedging is prohibited for officers, directors, and employees (e.g., collars, swaps, exchange funds) to ensure alignment with shareholders .
- Clawback policy (effective for compensation received on/after Oct 2, 2023) mandates recoupment of excess incentive compensation for accounting restatements, regardless of misconduct; supersedes prior policy and aligns with SEC/Nasdaq rules .
- Perquisites disclosed for NEOs are limited (tax preparation services, executive physicals) . Deferred compensation program is offered to certain officers via a nonqualified plan .
Performance Compensation
Selective’s incentive framework ties annual cash incentives (ACIP) to financial and strategic goals; long-term incentives (LTIP) utilize performance-based RSUs and cash incentive units with three-year performance periods .
| Component | Design | Metrics/Weighting | Vesting/Timing | 2024 Actual Funding |
|---|---|---|---|---|
| ACIP – Corporate | Financial: GAAP Combined Ratio; Strategic: 13 measures with potential +5 points for exceeding rate target | Financial pays 0% at CR>100% and up to 120% at ≤88%; Strategic up to 50 points (+5 potential) | Paid annually; CHCC discretion on payouts | Financial: 0 points; Strategic: 50 points |
| ACIP – Corporate (2023 reference) | Financial + Strategic (14 measures; +5 potential) | Financial funded at 35 points (CR=96.5%); Strategic funded at 83 points (12 achieved, 1 partial, 1 missed) | Annual | Financial 35; Strategic 83 |
| LTIP – Performance RSUs | 3-year period; majority of grant value | Triggers include cumulative non-GAAP operating ROE threshold and growth metrics; prior cycles required ≥12% ROE or growth targets | Generally vests at 3 years after grant upon performance | Grant sizing and metrics disclosed at plan level |
| LTIP – Cash Incentive Units | ~25% of 2024 grant value (except CFO Brennan) | Value per unit ($100 initial) marked to SIGI TSR; units earned per matrix vs peer index for 3-year statutory NPW growth and operating return on policyholder surplus | Vests/pays following end of 3-year period | Peer group methodology disclosed; payout matrix detailed |
Long-term plan results example: the 2021 grant paid out in 2024 at 100% for RSUs and 150% of units at $154.53 for CIUs (TSR 154.53%, statutory operating return 41%, NPW growth 49%) .
Equity Ownership & Alignment
| Policy/Item | Detail |
|---|---|
| Ownership multiple | Executive Vice Presidents: 3x base salary; compliance deadline: later of five years from status or three years from requirement changes |
| Counted holdings | Beneficial ownership shares, 75% of unvested RSUs (and related DEUs), and shares in benefit plans; unexercised options excluded |
| Retention | Must retain 75% of shares acquired from equity awards until meeting guideline |
| Hedging/Pledging | Hedging prohibited; pledging not expressly addressed in proxies reviewed |
| Clawback | Mandatory recoupment for restatements; supersedes prior policy; SEC/Nasdaq-compliant |
| Compliance status | Company states officers have met or are on track to meet the guidelines |
Employment Terms
SICA maintains employment agreements with key executive officers (including NEOs) with severance and change-in-control protections; Kush’s specific agreement terms are not separately disclosed in proxies.
| Provision | Term |
|---|---|
| Agreement term | Initial three-year term; auto-renewal in one-year periods unless terminated with notice |
| Severance – without cause (no change-in-control) | Multiple of base salary + average of last three ACIP payments (paid in installments); continued/reimbursed medical/dental/vision for specified months; immediate vesting of certain equity/cash awards except for terminations for cause |
| Severance – death/disability | Multiple of base salary + average of last three ACIP payments, reduced by insurance proceeds; paid in installments |
| Change-in-control (double trigger) | Lump sum multiple using greater of salary+target ACIP or salary+3-year average ACIP; continued/reimbursed benefits; CIUs multiplied at 150% initial units |
| Tax gross-ups | Current employment agreements do not include excise tax gross-ups |
Note: The company emphasizes double-trigger mechanics and market-competitive terms to mitigate retention risk around potential change-in-control events .
Insider Transactions & Vesting Pressure
Form 4 activity indicates routine tax-related dispositions and grant-related changes; examples below.
| Date | Form/Type | Shares | Price | Value | Notes/Source |
|---|---|---|---|---|---|
| 2022-12-13 | Form 4 – Disposition | -1,400 | $90.18 | -$126,252 | Reported as sale; aggregator data |
| 2024-02-02 | Form 4 – Tax | -1,290 | $96.80 | -$124,872 | Reported as tax withholding; aggregator data |
| 2022-02-03 (tran date 2022-02-01) | Form 4 – Grant | +4,041 | — | — | Equity award entry; aggregator data |
| 2025-02-10 | Form 4 – Filed | — | — | — | Filing existence (SIGI insiders batch) |
These events are consistent with RSU vesting cycles and related tax withholding, which can create periodic insider-selling pressure around vest dates; SIGI prohibits hedging and requires post-vesting share retention until guidelines are met, mitigating misalignment risk .
Say-on-Pay & Peer Benchmarking
- Say-on-pay approval: 98% in 2023 ; 99% in 2024 .
- LTIP peer group used to determine CIU performance includes Auto-Owners, Cincinnati Financial, CNA, Donegal, Erie, Hanover, Liberty Mutual, United Fire Group, Utica National, Westfield .
- CHCC benchmarking indicated 2024 total compensation for NEOs was 15.9% below the combined benchmark median; annual cash compensation was 21.5% below median due to challenging 2024 performance .
Performance & Track Record
- Executive biography: Present position since 2019; prior claims leadership at ProSight (2010–2019) and Crum & Forster (1982–2009); Duquesne B.S.; Wharton/AICPCU program .
- Company performance during his tenure: strong TSR vs peer group in 2020–2023, with 2024 negative TSR and elevated combined ratio (103%) primarily due to unfavorable prior-year casualty reserve development .
Compensation Committee & Governance
- Compensation committee oversees pay policies; report and oversight disclosed (2023) .
- Clawback and hedging policies in effect; ownership guidelines enforced by CHCC, with cure provisions if officers fall short of requirements .
Investment Implications
- Alignment: As an EVP subject to 3x salary ownership, 75% retention of award shares, and hedging prohibition, Kush’s incentives align with long-term value creation and underwriting/claims discipline; mandatory clawback further reduces downside governance risk .
- Selling pressure: Form 4 tax-related dispositions around vest dates suggest periodic supply from withholding; not indicative of discretionary selling, but traders should monitor calendar clustering of vest events .
- Pay-for-performance: ACIP funding zeroed on financial component in 2024 given 103% combined ratio, while strategic measures funded 50 points; LTIP remains leveraged to TSR and insurance operating metrics versus peers, supporting multi-year alignment .
- Retention risk: Employment agreements for key executives feature double-trigger change-in-control protections and market-competitive severance without tax gross-ups; Kush’s specific contract terms are not disclosed, but corporate frameworks mitigate turnover risk during strategic transitions .