Bryan J. Salvatore
HANOVER INSURANCE GROUPAbout Bryan J. Salvatore
Executive Vice President and President, Specialty at The Hanover Insurance Group (THG). Joined THG in June 2017 after 20 years at Zurich North America, where he led the $2.2B specialty products business and rebuilt Zurich’s accident & health business; prior roles include Director in the programs division at Frank Crystal & Co. . Education: BA, Fairfield University; MBA, Fordham University . Specialty segment performance in 2024: net written premium growth +6.2% YoY; company delivered pre-tax operating income $650.1M, ex-cat operating income $1,026.0M, combined ratio 94.8% . Proxy STIP funding set at 150% of target based on financial results and strategic objectives; three-year TSR for 2022–2024 was 30.17% with relative TSR at 23rd percentile (RTSR PBRSUs paid 25% of target), while three-year average Adjusted Operating ROE was 11.5% (ROE PBRSUs paid 125% of target) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Zurich North America | President, Specialty Products | ~2012–2017 | Led $2.2B specialty products business; expanded capabilities for distribution partners . |
| Zurich North America | Accident & Health lead | ~2007 onward | Rebuilt accident & health presence; expanded product offerings and distribution . |
| Zurich North America | Specialties Field Operations & Marketing | From 1997 | Led field operations/marketing for specialties . |
| Frank Crystal & Co., Inc. | Director, Programs Division | Pre-1997 | Directed programs division at leading brokerage firm . |
External Roles
| Organization | Role | Years | Note |
|---|---|---|---|
| Professional Liability Underwriting Society (PLUS) | Chairman | Not disclosed | Industry leadership role reported by Comparably . |
| American Red Cross (Zurich core charity) | Led charitable giving/volunteer efforts | Not disclosed | Reported in executive bio context . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 594,231 | 619,231 | 640,385 |
| Target Bonus % of Base | 110% (prior target cited) | 110% (prior to 2024 increase) | 120% (increased for 2024) |
| Actual STIP Bonus Paid ($) | 544,000 | 687,500 | 1,175,500 |
Performance Compensation
Annual Incentive (STIP) – 2024 Design and Outcomes
| Metric | Weighting | Target | Actual | Payout Component |
|---|---|---|---|---|
| Pre-Tax Operating Income | 20% | $461M | $650.1M | 175% of target for this component |
| Ex-Cat Operating Income | 50% | $874M | $1,026.0M | 187% of target for this component |
| Strategic Objectives | 30% | Pre-established | Achieved / 115% | 115% for this component |
| STIP Funding Decision | — | — | — | Final funding set at 150% (committee used discretion vs. ~163% metric output) |
Salvatore-specific outcome: 2024 STIP award $1,175,500 .
Long-Term Incentives (LTI) – Structure and 2024 Grants
| Component | Grant Date | Shares/Options Granted (2024) | Performance / Vesting | Payout Mechanics |
|---|---|---|---|---|
| RTSR PBRSUs | 2/27/2024 | 1,863 target units | Earned based on 3-year relative TSR vs peer group; cliff vest at 3 years | 0–150% of target; 25th/50th/75th percentile thresholds; cap at 100% if absolute TSR negative |
| ROE PBRSUs | 2/27/2024 | 1,863 target units | Earned on 3-year avg Adjusted Operating ROE; cliff vest at 3 years | 0–150% of target; 6%/10%/13% ROE thresholds |
| TBRSUs | 2/27/2024 | 1,863 units | Time-based; cliff vest on 3rd anniversary | Dividend equivalents accrue; paid only if award vests |
| Stock Options | 2/27/2024 | 8,288 options @ $134.26 strike | 10-year term; vest 1/3 per year on grant anniversaries | Value only if THG stock price exceeds strike |
Historical LTI outcomes (payouts on prior grants):
- RTSR PBRSUs (2022–2024 performance): 30.17% THG TSR; 23rd percentile vs peers; payout 25% of target .
- ROE PBRSUs (2022–2024 performance): 3-year avg Adjusted Operating ROE 11.5%; payout 125% of target .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 87,771 shares as of Mar 12, 2025; includes 67,316 shares underlying options exercisable within 60 days . |
| Ownership Guidelines Status | Counted shares 36,540; ownership multiple 8.5x base salary; all NEOs in compliance . |
| Hedging/Pledging | Prohibited for directors and executive officers under THG policy . |
| Outstanding Equity Awards (12/31/2024) | TBRSUs: 1,910 unvested ($295,401 market value at $154.66/share); PBRSUs: multiple tranches outstanding (e.g., 2023 ROE PBRSUs 1,638; 2024 PBRSUs 1,910 each); Options: exercisable tranches from 2017–2021 grants and unexercisable tranches for 2022–2024 (e.g., 2024 options 8,288 unexercisable) . |
| Stock Ownership Policy | Significant ownership requirements; RSUs and PBRSUs (at target) counted; options excluded for guideline multiples . |
Vested vs. Unvested Snapshot (12/31/2024)
| Category | Exercisable/Unexercisable | Count |
|---|---|---|
| Stock Options | Exercisable (e.g., 2017: 21,052; 2018: 16,394; 2019: 7,732; 2020: 10,386; 2021: 7,753) | See row-level counts |
| Stock Options | Unexercisable (e.g., 2022: 2,336; 2023: 4,756; 2024: 8,288) | See row-level counts |
| RSUs (TBRSUs) | Unvested (e.g., 2024: 1,910) | $295,401 market value at $154.66 |
| RSUs (PBRSUs) | Unvested (multi-year tranches) | Values and target/pacing per table |
Note: Market values reflect $154.66 closing price on 12/31/2024 .
Vesting Timeline and Potential Selling Pressure
- 2024 options vest one-third each on 2/27/2025, 2/27/2026, 2/27/2027 (10-year expiry 2/27/2034) .
- 2024 TBRSUs/PBRSUs cliff vest on 2/27/2027 (subject to performance for PBRSUs) .
- Consistent annual vesting cycles for options may create periodic liquidity windows; RSU cliffs concentrate vesting in 2027, potentially increasing near-term supply if sales occur post-vesting under THG’s insider trading windows .
Employment Terms
| Provision | Key Terms |
|---|---|
| Severance (non-CIC) | Lump-sum approximating one year’s target cash comp (base + target bonus); condition: separation agreement; for CFO Farber, 2x base salary plus one year continued vesting; “good reason” includes comp reduction, adverse role change, relocation . |
| Change-in-Control (CIC) | Double trigger; multipliers: 1.5x (Salvatore), 2x (CEO/CFO); includes lump-sum equal to multiplier × (base + target bonus), pro-rated target STIP for year, one-year health coverage, outplacement, and 401(k)/NQ plan contribution equivalent; no 280G gross-ups . |
| Equity on CIC/Retirement | If awards not assumed, 100% vest based on achievement as of CIC; if assumed and then terminated, vesting accelerates; TBRSUs for retirement-eligible executives vest upon CIC (Section 409A compliance); Salvatore will meet retirement eligibility in 2025 for 2022–2024 awards . |
| Clawbacks | NYSE-compliant policy for restatements; additional recoupment in equity award agreements for violations (non-solicit/non-interference/confidentiality/Code of Conduct) . |
| Restrictive Covenants | All executive officers subject to non-solicitation, non-interference, confidentiality agreements . |
| Insider Trading | Company policy governs trading; exhibits filed with 2024 10-K; trading windows apply . |
Compensation Structure Analysis
- Pay mix skews to performance-based compensation: variable opportunities ~three-quarters of NEO target compensation; majority via multi-year equity .
- 2024 STIP targets were tightened (Ex-Cat Operating Income target raised +16.7% YoY to $874M); actuals exceeded targets, but committee capped STIP funding at 150% to balance expense/growth .
- LTI design blends relative TSR and Adjusted Operating ROE PBRSUs with TBRSUs and options; outcomes show stronger ROE performance (125%) vs weaker relative TSR (25%), indicating alignment to operating value creation even when market-relative returns lag peers .
- No option repricing; no 280G gross-ups; hedging/pledging prohibited—favorable governance signals for alignment and risk control .
Equity Ownership & Alignment (Detailed)
| Metric | Value |
|---|---|
| Shares Beneficially Owned | 87,771; includes 67,316 options exercisable within 60 days (as of 3/12/2025) . |
| Ownership Guideline Multiple | 8.5x base salary (counted shares 36,540) . |
| Compliance | All current NEOs compliant with guidelines . |
| Shares Counted in Guideline | Outright, household, unvested RSUs, target PBRSUs, estate vehicles, deferred shares (options excluded) . |
| Policy | Hedging and pledging prohibited for officers/directors . |
Employment Terms (Illustrative CIC Economics for Salvatore)
| Scenario (as of 12/31/2024) | Cash Severance | Pro-rated STIP | Unvested RSUs Value | Unexercisable Options Value | Health/Outplacement/Plan Credit | Total |
|---|---|---|---|---|---|---|
| Change in Control (double trigger) | $2,128,500 | $774,000 | $2,097,654 | $274,141 | $131,341 (health $31,341; outplacement $40,000; plan credit $60,000) | $5,405,636 |
Note: Values assume triggering event on 12/31/2024 and THG closing price $154.66 .
Performance & Track Record
- Specialty segment delivered strong pre-tax operating income materially above plan and +6.2% net written premium growth in 2024; progress on wholesale/small business initiatives and critical technology platforms; maintained high employee engagement .
- Company-level achievements included net income $426.0M, combined ratio 94.8%, dividend increased 5.9%, and share repurchases of ~$26.7M in 2024 .
- Strategic objectives funding certified at 115%/target for 2024—quality of earnings, profitability improvement, portfolio growth, and organizational effectiveness (including AI adoption) .
- Relative TSR underperformed peers for the 2022–2024 period (23rd percentile), while operating ROE metrics remained strong (11.5% 3-year average) .
Say-on-Pay & Peer Benchmarking
- Say-on-pay: >95% approval of executive compensation annually since 2011 .
- Compensation consultant: CAP; peer benchmarking versus P&C comparables (e.g., AFG, CNA, Selective, Hartford, W.R. Berkley, etc.) and market surveys; emphasis on competitiveness and retention .
Investment Implications
- Alignment: Heavy use of performance-based equity (RTSR and ROE PBRSUs) and strict governance (no hedging/pledging; clawbacks) align incentives to longer-term value creation and risk control .
- Execution signals: Specialty outperformance and technology investments support margin durability; however, relative TSR underperformance vs peers tempered LTI payouts—constructive for pay-for-performance integrity .
- Near-term selling pressure: Option tranches vest annually (2025–2027) and 2024 RSUs cliff vest in 2027; retirement eligibility in 2025 adds potential for accelerated vesting under CIC scenarios—monitor Form 4 activity around vest dates and trading windows .
- Retention risk: Competitive severance/CIC protections (1.5x multiple) and compliance with ownership guidelines suggest balanced retention incentives; no tax gross-up or option repricing reduces governance risk .