Terrence W. Cavanaugh
SELECTIVE INSURANCE GROUPAbout Terrence W. Cavanaugh
Independent director of Selective Insurance Group since 2018; age 71. Founding partner at Accretive Consulting (since 2017), former President & CEO of Erie Indemnity (2008–2016), and long-tenured Chubb executive (1975–2007). Education: B.B.A., University of Notre Dame; Program for Management Development, Harvard Business School. Core credentials include >40 years of P&C insurance leadership, distribution, underwriting/operations, risk management, and talent development .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Accretive Consulting LLC | Founding Partner | 2017–present | Advisory work leveraging insurance growth and distribution expertise |
| Erie Indemnity Company | President & CEO | 2008–2016 | Led Fortune 500 insurer; growth in DPW and surplus, profitability, agent relationships |
| Chubb Group | COO, Surety & Trade Credit; CMO; underwriting/field roles | 1975–2007 | Operations, marketing, underwriting leadership across segments |
| Insurance Information Institute | Chair; Director | 2011–2016 (Chair 2015–2016) | Industry thought leadership and public disclosure expertise |
| Property Casualty Insurance Association | Chair; Director | 2008–2017 (Chair 2014–2015) | Industry advocacy, risk and regulatory engagement |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Highmark Health | Director | 2013–present | Health sector board service (not a public P&C competitor) |
| Naples Airport Authority | Board of Commissioners | 2022–present | Local government oversight of airport operations |
| The Institutes | Trustee | 2010–2016 | Insurance credentialing and education influence |
Board Governance
- Committee memberships: Audit Committee member; Risk Committee member. Not a chair; Audit Chair is H. Elizabeth Mitchell, Risk Chair is John S. Scheid .
- Independence: Board determined he is independent under Nasdaq/SEC rules; all members of Audit and Risk Committees are independent .
- Attendance: Board held 7 meetings in 2024; independent directors met 4 times without management. All directors attended at least 75% of aggregate Board/committee meetings; average attendance >98%; all then-serving directors attended the 2024 annual meeting .
- Lead independent director: Robert Kelly Doherty (since 2022) .
- Board refreshment/retirement: Mandatory director retirement age is 72; Cavanaugh is 71, indicating approaching age-based turnover consideration .
Fixed Compensation
| Component | 2024 Amount | Details |
|---|---|---|
| Annual Retainer | $100,074 | Directors can elect stock; Cavanaugh elected to take 1,038 shares valued at $100,074 |
| Annual Equity Grant (RSUs) | $110,004 | Unvested RSUs at year-end: 1,141 units; grant under 2024 Omnibus Stock Plan |
| Committee Chair Fees | $0 | Not a chair; Audit Chair $35k, Risk Chair $25k (program terms) |
| Committee Member Fees | $0 | SIGI pays member fees only for a third committee ($8k); Cavanaugh serves on two |
| Total 2024 Director Pay | $210,078 | Fees + stock awards |
Performance Compensation
- Directors do not receive performance-based awards; annual equity is RSUs with service-based vesting. No options or performance metrics disclosed for director equity .
Other Directorships & Interlocks
| Company/Entity | Public Company? | Potential Interlock/Conflict | Notes |
|---|---|---|---|
| Highmark Health | No (non-profit health) | Low | Not overlapping with SIGI’s P&C footprint |
| Naples Airport Authority | No | Low | Government board role |
| Industry associations (III, PCI) | No | Low | Prior industry associations, no current related-party exposure disclosed |
No specific related-party transactions or independence exceptions disclosed for Cavanaugh; Board independence review flagged other directors (Doherty, Mitchell, Sampson), not Cavanaugh .
Expertise & Qualifications
- Insurance industry, risk management, financial statement/audit/public disclosure, finance/capital management/M&A, investment, agency distribution, technology/cybersecurity, legal/regulatory, marketing/branding, human capital management .
Equity Ownership
| Metric | Value | Notes |
|---|---|---|
| Beneficial ownership (2/20/2025) | 20,659 shares | Less than 1% of class; no margin pledging or pledged shares |
| Director RSUs unvested (12/31/2024) | 1,141 units | Program RSUs for directors |
| Insider trades (Form 4) | 1,000 shares bought @ $98.47 (2/2/2024) ; 2,000 shares bought @ $85.85 (7/23/2024) ; 2,000 shares bought @ $75.72 (7/25/2025) | |
| Ownership guidelines | 5x annual retainer; all directors met or are on track | Company-wide disclosure; no individual shortfall noted |
| Hedging/pledging policy | Hedging prohibited; pledging oversight by CHCC | Company policy prohibits hedging; CHCC oversees pledging policy |
Governance Assessment
- Committee effectiveness: Placement on Audit and Risk signals Board reliance on his financial reporting, disclosure, and enterprise risk oversight experience; not over-concentrated (no chair role), which mitigates key-person risk .
- Independence & conflicts: Confirmed independent; no Cavanaugh-specific related-party exposures disclosed; company’s Related Person Policy routes approvals through the Audit Committee and prohibits conflicted members from participating .
- Engagement: Strong Board-wide attendance (>98% average); all directors ≥75% threshold; Cavanaugh’s insider purchases in 2024–2025 are a positive alignment signal (skin-in-the-game) .
- Compensation alignment: Director pay mix of retainer and RSUs, with option to take retainer in stock (which Cavanaugh did), supports ownership and alignment; absence of option grants or performance pay reduces pay-for-performance leverage but is consistent with director governance norms .
- RED FLAGS: None disclosed (no pledging, no related-party transactions tied to Cavanaugh, no attendance issues). Watchlist item: mandatory retirement age 72 suggests potential near-term Board turnover and succession planning need for Audit/Risk bench strength .
Board Governance (Program Overview)
| Item | Practice |
|---|---|
| Majority voting for directors | Resignation required if not receiving majority in uncontested elections; CG&N Committee reviews; Board acts within 90 days |
| Executive sessions | Independents met 4 times in 2024 |
| Overboarding limits | Max 4 public boards (2 if CEO) with pre-clearance for conflicts/time demands |
| Clawback policy | Dodd-Frank compliant, mandatory recoupment on restatements; effective Dec 1, 2023 |
| Say-on-pay support | 2024 approval >99% of votes cast (climate of shareholder support) |
Director Compensation (Program)
| Type | Amount | Notes |
|---|---|---|
| Annual Retainer | $100,000 | Cash or stock election |
| Annual RSU grant | $110,000 | Under 2024 Omnibus Stock Plan |
| Committee chair fees | $25,000–$35,000 | Audit $35k; Risk $25k; Finance & Investments $35k; CG&N $25k; CHCC $25k |
| Third committee member fee | $8,000 | No fees for first two committees |
| Lead Independent Director | $40,000 | Separate fee |
Related Party Transactions (Policy Context)
Audit Committee pre-approves related-party transactions; conflicted members recuse; reviews benefit to Selective, independence impacts, terms vs third parties. 2024 disclosures focus on large holders (BlackRock, Vanguard, Fidelity) and fund services; none attribute transactions to Cavanaugh .
Equity Ownership (Detail)
| Holder | Shares (2/20/2025) | % of Class | Notes |
|---|---|---|---|
| Terrence W. Cavanaugh | 20,659 | * | Less than 1%; no options exercisable; no RSUs vesting within 60 days; no pledging/margin |
| Unvested RSUs (12/31/2024) | 1,141 | N/A | Director RSUs per program |
Insider Trades (Recent)
| Date | Action | Shares | Price | Source |
|---|---|---|---|---|
| 2024-02-02 | Purchase | 1,000 | $98.47 | |
| 2024-07-23 | Purchase | 2,000 | $85.85 | |
| 2025-07-25 | Purchase | 2,000 | $75.72 |
Governance Assessment Summary
- Strengths: Deep insurance expertise deployed on Audit and Risk; independent, engaged, with positive insider buying; compensation and equity design promote alignment; robust corporate governance (majority voting, clawback, hedging ban, overboarding limits) .
- Watch items: Approaching mandatory retirement age could necessitate succession for risk/audit competencies; continued monitoring of insider ownership growth vs director ownership guidelines (company says all directors met/on-track) .
- No identified conflicts or red flags tied to Cavanaugh in 2024–2025 disclosures .