Frederick H. Eppinger, Jr.
STEWART INFORMATION SERVICESAbout Frederick H. Eppinger, Jr.
Frederick H. Eppinger, Jr. (age 66) is Chief Executive Officer of Stewart Information Services Corporation (STC) and a director since 2016; he has served as CEO since 2019 . In 2024, STC delivered $2.5B in total revenues (+10% y/y), $73.3M in net income, 4.6% reported pre-tax margin, and a 14.9% share price increase; 2021 peak “compensation actually paid” tracked a very strong TSR year, underscoring sensitivity of equity pay to stock performance . STC’s board states that during his five-year tenure as CEO, market cap more than doubled and title market share exceeded 10%; management is targeting 11–12% pre-tax margins and 15% market share longer term .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| McKinsey & Company | Senior Partner | 1985–2000 | Built deep operating/strategy expertise; foundation for later CEO roles |
| ChannelPoint, Inc. | EVP | 2000–2001 | B2B technology for insurance distribution |
| The Hartford Financial Services Group | EVP, P&C Field & Service Operations | 2001–2003 | Large-scale P&C operations leadership |
| The Hanover Insurance Group | President & CEO | 2003–2016 | Led growth from regional to global P/C carrier |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Centene Corporation (NYSE: CNC) | Director | 2006–present | Long-tenured S&P 500 healthcare director |
| QBE Insurance Group (NASDAQ: QBEIF) | Director | Jan–Dec 2019 | Global P/C insurance |
| The Hanover Insurance Group (NYSE: THG) | Director | 2003–2016 | Former CEO/Director |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 953,000 | 953,000 | 995,885 |
| Target Bonus (% of salary) | — | 125% (prior level) | 150% |
| Target Bonus ($) | — | — | 1,493,828 |
Compensation mix emphasized at-risk pay: 80% of CEO target total direct compensation variable in 2024 .
Performance Compensation
2024 Short-Term Incentive Plan (STIP) – CEO
| Metric | Weight | Target | 2024 Actual | Component Payout |
|---|---|---|---|---|
| Pre-Tax Margin (Adjusted) | 60% | 3.75%–4.25% | 4.41% | 105.3% |
| Net Revenue (Adjusted) | 20% | $1,500M | $1,612.7M | 150.1% |
| Individual Qualitative | 20% | — (capped) | — | Weighted 23.3% cap (116.5% x 20%) |
| Total STIP Payout Multiple | — | — | — | 116.5% |
Resulting 2024 cash bonus: $1,745,818 (116.5% of $1,493,828 target) .
Long-Term Incentives (LTI)
- 2024 LTI mix: 50% Performance RSUs (PRSUs), 50% Time-based RSUs (TRSUs) .
- 2024 PRSUs: 20,261 units; vest only if Adjusted Pre-Tax Margin ≥4.5% in any 3 of 7 quarters from Q2’24–Q4’25; Committee certified the performance condition was met on Feb 26, 2025; units then vest on the 3rd anniversary of grant (3/26/2027) .
- 2024 TRSUs: 20,261 units; vest in three equal annual tranches on each of the first three anniversaries of 3/26/2024 (i.e., 3/26/2025, 3/26/2026, 3/26/2027) .
- 2024 LTI grant-date values: $1,244,836 (PRSUs) and $1,244,836 (TRSUs) at $61.44/share .
Prior-cycle performance: 2023 PRSUs’ performance condition (≥5.0% Pre-Tax Margin in 3 of 7 quarters Q2’23–Q4’24) was certified met on Aug 6, 2024; those units now vest on their 3rd anniversary .
Multi-year CEO Compensation
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 953,000 | 953,000 | 995,885 |
| Stock Awards (FASB ASC 718 FV) | 2,144,198 | 2,144,190 | 2,489,672 |
| Non-Equity Incentive (STIP) | 671,432 | 923,527 | 1,745,818 |
| All Other Compensation | 171,683 | 142,210 | 195,191 |
| SEC Total | 3,940,313 | 4,162,926 | 5,426,566 |
All Other Compensation in 2024 included restricted stock dividends ($100,817), housing allowance ($48,000), financial planning ($16,730), 401(k) match ($10,350) and insurance benefits .
Equity Ownership & Alignment
- Beneficial ownership: 325,969 shares (1.16% of class) as of March 11, 2025; includes 187,424 vested/exercisable options; excludes 78,977 unvested RSUs .
- CEO stock ownership guideline: 5x salary; all NEOs, including CEO, met guidelines as of Dec 31, 2024 .
- Anti-hedging/anti-pledging: Hedging and pledging of company stock are prohibited; limited exception for pledging requires pre-approval and clear independent repayment capacity .
- Trading controls: Blackouts, pre-clearance for Section 16 insiders, and 10b5-1 plan oversight by CLO .
- 2024 equity vesting activity: 26,301 shares vested for value realized of $1,614,830; no option exercises reported for CEO in 2024 .
- In-the-money option value reference (for potential supply/pressure): as of 12/31/2024 price ($67.49), CEO’s vested options had an aggregate intrinsic value of ~$4.60M .
Outstanding Equity Detail (12/31/2024)
| Instrument | Quantity | Exercise/Terms | Expiration/Notes |
|---|---|---|---|
| Stock Options (granted 2/7/2020) | 143,437 | $39.76 | Exp. 2/7/2030; vested/exercisable |
| Stock Options (granted 3/10/2021) | 43,987 | $53.24 | Exp. 3/10/2031; vested/exercisable |
| Unvested TRSUs (2022) | 4,440 | 3-year ratable vest | Remaining as scheduled |
| Unvested TRSUs (2023) | 13,984 | 3-year ratable vest | Remaining as scheduled |
| PRSUs (2023; perf met) | 31,463 | Time vest only remaining | Vests on 3rd anniversary of grant |
| TRSUs (2024) | 20,261 | 3-year ratable vest | 3/26/2025–2027 |
| PRSUs (2024; perf met) | 20,261 | Vests at 3rd anniversary | Perf certified 2/26/2025 |
Employment Terms
- Amended & Restated CEO Employment Agreement (Dec 3, 2024) extends term to Dec 31, 2028; base salary set at $1,100,000; eligible for annual and long-term incentives at Committee discretion .
- Restrictive covenants: Confidentiality, 12-month non-compete/non-solicit; robust trade secrets/IP provisions .
- Clawback: Policy amended Oct 2, 2023; recovers erroneously awarded incentive comp (including equity) after restatements, regardless of fault, unless recovery impracticable .
- Perquisites under agreement include LTD, group variable life, deferred comp eligibility, paid association dues (with approval), executive development (up to $5,000), monthly housing allowance up to $4,000, and travel expenses for home base trips .
Severance / Change-in-Control (as disclosed)
| Scenario | Cash | STI | Equity | Options | COBRA | Notes |
|---|---|---|---|---|---|---|
| Death/Disability | — | Prorated target | Pro-rata vesting | Vested exercisable | 12 mo (Disability) | Standard benefits |
| Involuntary Termination (No CIC) | 2x base salary (CEO) | Not applicable | Pro-rata vesting | Vested exercisable | 18 mo (CEO) | Double-trigger not required |
| CIC + Qualifying Termination | 2x base salary + 2x target STI | 2x target | Accelerated at target | Fully vested | 18 mo (CEO) | Double-trigger equity acceleration |
Illustrative CEO payout values if event occurred 12/31/2024 (stock at $67.49): $9.88M (invol. term no CIC) vs $15.71M (CIC+QT), inclusive of equity acceleration and options value . Agreement includes 280G best-net (cutback vs full pay) provision; no excise tax gross-up .
Board Governance
- Board structure: Independent Chairman (Thomas G. Apel); CEO and Chair roles separated; all key committees (Audit, Compensation, Nominating & Corporate Governance) fully independent .
- Eppinger board role: Director since 2016; no committee memberships .
- Board process: Majority voting standard; annual director elections; regular executive sessions of non-management directors .
- Attendance: In 2024, the Board held 7 meetings and 7 written consents; no director attended less than 75% of combined board/committee meetings .
- Director ownership guidelines: 5x stock portion of annual retainer; 9 of 10 directors in compliance; remaining director on track within allowed period .
Dual-role implications: CEO also serves as director, but independent chair and fully independent committees reduce concentration of power and mitigate independence concerns; anti-hedging, ownership guidelines, and majority voting further align governance with investors .
Performance & Track Record
| Indicator | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 Investment (STC TSR) | 122.55 | 206.56 | 114.37 | 163.93 | 193.81 |
| Peer Group TSR (Indexed) | 94.84 | 123.24 | 117.11 | 161.31 | 201.73 |
Operational highlights (2024): total revenues $2.42B (+10%), pre-tax margin 4.6% (vs 2.7% in 2023), net income $73.3M; title direct revenues rose on stronger commercial; STC emphasizes cost discipline with targeted investment for resilience . Title loss provision remained disciplined at 3.9% of title revenues (vs 4.1% in 2023) .
Board assessment of tenure: “More than doubling our market cap and increasing market share to over 10%” during first five years as CEO; forward targets 11–12% pretax margins, 15% share .
Compensation Structure Analysis
- Pay-for-performance alignment:
- Heavy variable mix (80% for CEO) ;
- STIP metrics (Pre-Tax Margin 60%, Net Revenue 20%) tied to investor-relevant outcomes; 2024 payout at 116.5% reflects above-target performance .
- PRSUs linked to multi-quarter Adjusted Pre-Tax Margin hurdles (3 of 7 quarters) with payout capped at target; time-based vesting requires continued service—design balances performance and retention .
- 2024 structural shifts: CEO target bonus raised to 150% from 125% (market alignment); LTI increased 16.1% y/y; LTI mix adjusted to 50/50 PRSU/TRSU to promote retention while maintaining performance linkage .
- Governance features: No option repricing; no CIC excise tax gross-ups; double-trigger vesting on change-in-control; clawback policy compliant with NYSE Rule 10D-1 .
Say-on-Pay & Peer Group
- 2024 Say-on-Pay support: 97.6% approval (strong endorsement) .
- 2024 comparator group spans title, mortgage/credit, and specialty insurers (e.g., FAF, ORI, RDN, RLI, CINF, PFSI, RKT, MRCO, SIGI, THG, etc.) reflecting comparable size and labor market dynamics .
Related Party, Risk Indicators & Policies
- Related-party transactions: No Eppinger-specific related-party transactions disclosed; broader related-party items (e.g., legacy family agreements, immaterial vendor and lease relationships tied to other executives/directors) were reviewed per policy .
- Hedging/pledging: Prohibited; margin accounts disallowed except with pre-approval in limited pledge cases .
- Clawback: Restatement-based recovery of incentive comp regardless of misconduct .
- Section 16 filings: Company reported 2024 compliance; one executive (not CEO) had a late report; no CEO delinquencies disclosed .
Director Service and Roles
| Attribute | Detail |
|---|---|
| Director Since | 2016 |
| Committee Memberships | None (CEO/Director) |
| Independence | Not independent as CEO; Board has independent Chair and fully independent committees |
| Attendance | No director <75% in 2024 |
Investment Implications
- Alignment positives: High at-risk pay; margin- and revenue-linked STIP; PRSUs tied to multi-quarter margin; robust clawback and anti-hedging/pledging policies; ownership guideline compliance; strong say-on-pay support (97.6%) .
- Retention and continuity: Contract extended to 2028; clear post-termination economics; 12-month non-compete; balanced LTI mix supports talent retention amid cyclical housing volumes .
- Execution levers: Focus on pre-tax margin improvement and commercial mix; technology modernization; disciplined title loss provisioning; potential upside if refinance and purchase activity rebound per macro forecasts .
- Watch items: 2024 pre-tax margin (4.6%) remains below long-term 11–12% ambition; increased LTI and higher target bonus expand absolute pay—continued delivery on ROIC/TSR and market share goals will be key to sustaining investor support .
Appendix: Additional Data Tables
CEO Beneficial Ownership Breakdown (as of March 11, 2025)
| Item | Amount |
|---|---|
| Total Beneficially Owned Shares | 325,969 (1.16%) |
| Included Vested/Exercisable Options | 187,424 |
| Excluded Unvested RSUs | 78,977 |
CEO 2024 Grants
| Grant Type | Grant Date | Units | FV/Share | Grant Date FV | Vesting Terms |
|---|---|---|---|---|---|
| PRSUs | 3/26/2024 | 20,261 | $61.44 | $1,244,836 | Earn at 100% if ≥4.5% Adjusted Pre-Tax Margin in 3 of 7 quarters (Q2’24–Q4’25); certified met 2/26/2025; vests on 3rd anniversary |
| TRSUs | 3/26/2024 | 20,261 | $61.44 | $1,244,836 | 3 equal annual installments on each anniversary |
Company Pay vs Performance (select metrics)
| Year | “Compensation Actually Paid” to CEO ($) | Net Income ($M) | Pre-Tax Margin | STC TSR (Indexed to $100) |
|---|---|---|---|---|
| 2020 | 5,933,605 | 154.9 | 9.5% | 122.55 |
| 2021 | 10,064,576 | 323.2 | 13.1% | 206.56 |
| 2022 | (1,589,146) | 162.3 | 7.6% | 114.37 |
| 2023 | 5,062,657 | 30.4 | 2.7% | 163.93 |
| 2024 | 6,219,391 | 73.3 | 4.6% | 193.81 |
2024 Company Performance Snapshot
| Metric | 2023 | 2024 |
|---|---|---|
| Operating Revenues ($B) | 2.21 | 2.42 |
| Pre-Tax Margin | 2.7% | 4.6% |
| Net Income ($M) | 30.4 | 73.3 |
| Title Loss Provision (% of title revenues) | 4.1% | 3.9% |
Notes on Policies
- Securities Trading & Investment Policy: prohibits trading on MNPI, hedging, short-term trading, pledging/margin (with narrow exceptions), requires pre-clearance for insiders and supports 10b5-1 plans adopted in good faith .
- Executive stock ownership and director guidelines; ownership compliance and anti-hedging publicly disclosed .
All data above sourced from STC’s 2025 DEF 14A (proxy), 2024 Form 10‑K, and Form 8‑K filings as cited.