Jeffrey M. Farber
Executive Vice President and Chief Financial Officer; Principal Accounting Officer at 
HANOVER INSURANCE GROUP
HANOVER INSURANCE GROUPExecutive
About Jeffrey M. Farber
Executive Vice President and Chief Financial Officer of The Hanover Insurance Group (THG); year hired 2016 and currently one of the Named Executive Officers (NEOs) . 2024 company performance included Net Income of $426.0 million, combined ratio of 94.8%, and 4.7% net written premium growth, underpinning strong incentive funding and payouts tied to Pre-Tax Operating Income, Ex‑Cat Operating Income, and strategic objectives . Pay-for-performance alignment is reinforced by significant equity weighting (PBRSUs tied to 3‑year Relative TSR and 3‑year average Adjusted Operating ROE) and robust ownership—Farber is in compliance with stock ownership guidelines at 13.3x base salary, with counting methods excluding unexercised options . Governance policies prohibit pledging/hedging, provide NYSE-compliant clawbacks, and require double-trigger change-in-control protections (with retirement-eligible TBRSUs treated per 409A) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Hanover Insurance Group | EVP & CFO | 2016–present | Leads corporate finance, investment, actuarial, facilities, risk management, corporate development and financial reporting; drove enhanced budgeting, margin recapture strategy development, capital and reinsurance actions . |
External Roles
- No external directorships or outside roles disclosed for Farber in the available documents.
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary Rate ($) | $765,000 | $785,000 (↑2.6%) |
Performance Compensation
Short-Term Incentive Program (STIP) design and 2024 results
| Metric | Weighting | Target | Actual | Payout vs Target |
|---|---|---|---|---|
| Pre-Tax Operating Income | 20% | $461M | $650.1M | 175% |
| Ex‑Cat Operating Income | 50% | $874M | $1,026.0M | 187% |
| Strategic Objectives | 30% | Pre-set | Certified at 115% | 115% |
| STIP Funding | — | — | — | 150% (committee discretion vs ~163% formula) |
| Year | STIP Target (% of Salary) | Bonus Paid ($) |
|---|---|---|
| 2023 | 125% (raised from 120%) | $908,438 |
| 2024 | 130% (raised from 125%) | $1,530,750 |
Strategic achievements cited for Farber include leading finance and risk teams, enhancing expense prioritization, sponsoring Women@Hanover BRG, and impacting investment portfolio, capital, and reinsurance actions .
Long-Term Incentive design and 2024 grants (mix ~25% each)
| Component | Units (2024) | Vesting | Performance Metric / Terms |
|---|---|---|---|
| RTSR PBRSUs | 3,445 target | Cliff vest at 3 years | Relative TSR vs peer group; payout 0–150% (≥75th=150%, 50th=100%, 25th=50%; negative TSR caps at 100%; minimum 25% if TSR > compounded dividend yield even if <25th) . |
| ROE PBRSUs | 3,445 target | Cliff vest at 3 years | 3‑yr average Adjusted Operating ROE; payout 0–150% (<6%=0%, 10%=100%, ≥13%=150%) . |
| TBRSUs | 3,445 | Cliff vest at 3 years | Time-based with dividend equivalents; retirement-eligible treatment per plan and 409A . |
| Stock Options | 15,332 | 1/3 vest annually over 3 years; 10‑year term | Exercise price $134.26 (2/27/24 grant) . |
PBRSU Company Performance (payouts apply program-wide):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| 3‑Year TSR (%) | 9.40% | 14.84% | 30.17% |
| RTSR Percentile | 43rd | 36th | 23rd |
| RTSR PBRSU Payout (%) | 86.96% | 72.73% | 25.00% |
| 3‑Year Avg Adjusted Operating ROE (%) | 12.0% | 11.1% | 11.5% |
| ROE PBRSU Payout (%) | 130.0% | 112.0% | 125.0% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Shares Beneficially Owned (3/12/2025) | 131,321; includes 95,104 shares underlying options exercisable within 60 days; shares voting/investment power shared with spouse: 7,500; <1% of class . |
| Stock Ownership Guidelines (NEOs) | Must reach 1x salary in 18 months, then 2–4x within 3 years (CEO 4–6x); unexercised options not counted . |
| Compliance Status (Farber) | 65,557 shares counted; ownership level 13.3x base salary . |
| Hedging/Pledging | Prohibited for executive officers and directors . |
| Clawback | NYSE/SEC-compliant clawback for restatements; additional recoupment in equity agreements for non-solicit/interference/confidentiality and Code violations . |
Employment Terms
| Provision | Terms |
|---|---|
| Severance (without cause / good reason) | Lump-sum ≈ one year’s cash comp for execs; for Farber: 2× current base salary plus one year continued vesting of then-outstanding equity awards; separation agreement required . |
| Change-in-Control Plan (double trigger) | Lump-sum multiplier × (base salary + target bonus): Farber 2.0×; plus cash equal to 401(k) and NQ plan credits, health benefits for up to 1 year, target STIP pro-rated, and outplacement; no 280G tax gross-ups . |
| TBRSUs at CoC (retirement eligibility) | Certain TBRSUs for retirement-eligible executives (including Farber) vest immediately upon CoC per 409A; otherwise time-based vesting or accelerated if terminated post-CoC . |
Potential Payments (as of 12/31/2024, illustrative)
| Scenario | Cash Severance ($) | Cash Incentives ($) | Unvested RSUs ($) | Unexercisable Options ($) | Health & Welfare ($) | Outplacement ($) | 401(k)/NQ Severance ($) | Total ($) |
|---|---|---|---|---|---|---|---|---|
| Without Cause | $1,570,000 | — | $1,199,852 | $244,964 | — | — | — | $3,014,816 |
| Change in Control | $3,611,000 | $1,020,500 | $3,988,063 | $521,220 | $22,912 | $40,000 | $60,000 | $9,263,695 |
Notes: Cash incentives reflect target STIP pro‑ration; RSU and option values follow plan assumptions at the hypothetical trigger date; TBRSU/PBRSU treatment per footnotes .
Compensation & Ownership (Multi-Year)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $731,539 | $758,077 | $780,385 |
| Stock Awards ($) | $1,237,685 | $1,312,684 | $1,389,541 |
| Option Awards ($) | $412,511 | $437,510 | $462,525 |
| Non‑Equity Incentive Plan Compensation ($) | $776,160 | $908,438 | $1,530,750 |
| All Other Compensation ($) | $81,140 | $82,500 | $83,533 |
| Total ($) | $3,239,035 | $3,499,209 | $4,246,734 |
All Other Compensation (2024)
| Category | Amount ($) |
|---|---|
| Financial Planning Services | $13,520 |
| Matching Contributions to Qualified Charities | $5,000 |
| Spousal Travel | $1,663 |
| Executive Physicals | $3,350 |
| Defined Contribution Plan Company Contribution | $20,700 |
| Non‑Qualified Retirement Savings Plan Contribution | $39,300 |
| Total All Other Compensation | $83,533 |
Non‑Qualified Retirement Savings Plan (2024)
| Item | Amount ($) |
|---|---|
| Company Contributions (2024, made in 2025) | $39,300 |
| Aggregate Earnings (2024) | $13,903 |
| Aggregate Balance (12/31/2024) | $351,187 |
Compensation Structure Analysis
- Increased at-risk pay: Farber’s STIP target rose from 125% to 130% of salary in 2024; base salary increased 2.6%, while LTI grant fair value rose ~5.8%, keeping emphasis on variable equity .
- Strong performance linkage: 2024 STIP funded 150% with metrics exceeding targets; PBRSU programs paid 25% on RTSR and 125% on ROE for the 2022–2024 cycle .
- Shareholder protections: Double-trigger CoC, no option repricing, no 280G tax gross-ups, clawbacks and recoupments; pledging/hedging prohibited .
- Peer benchmarking: Compensation programs benchmarked against a P&C peer set (American Financial Group, CNA, Kemper, Hartford, W.R. Berkley, Markel, Mercury General, Old Republic, Selective, AXIS, Cincinnati Financial) .
Equity Ownership & Alignment Details
- Beneficial ownership: 131,321 shares incl. 95,104 options exercisable within 60 days; shared voting/investment power on 7,500 shares; <1% of class .
- Guideline compliance: 65,557 shares counted under guidelines; 13.3x salary multiple (credits unvested RSUs/PSUs at target; excludes unexercised options) .
- Policy: Hedging and pledging of THG securities prohibited; clawback policies enforced .
Related Party Transactions & Risk Indicators
- Related-party policy: Board-led review with $100,000 threshold; no related-person transactions to report .
- Risk controls: Annual incentive plan risk assessment by CRO-led committee; robust ERM and reinsurance programs; explicit cyber and residual markets disclosures .
- Say-on-pay: Historical shareholder approval >95% for executive compensation proposals .
Compensation Peer Group (Benchmarking)
- Comparative Proxy Data companies used by CHCC include: American Financial Group, AXIS Capital, Cincinnati Financial, CNA Financial, Kemper, Markel Group, Mercury General, Old Republic, Selective Insurance Group, The Hartford, W.R. Berkley .
Say‑on‑Pay & Shareholder Feedback
- Annual advisory vote on executive compensation (say‑on‑pay) has received overwhelming support (>95% of votes cast) over many years; THG intends to continue annual votes .
Expertise & Qualifications
- Executive leadership scope: Finance, investments, actuarial, risk, corporate development, financial reporting; budgeting enhancements; investment/capital/reinsurance execution; sponsorship of Women@Hanover BRG .
- (Education/age not disclosed in available filings.)
Work History & Career Trajectory
- THG EVP & CFO since 2016; key strategic and financial leadership contributions documented in CD&A .
- (Prior employers/roles not disclosed in available filings.)
Compensation Committee & Governance
- CHCC members: J. Paul Condrin III (Chair), Kevin J. Bradicich, Cynthia L. Egan; independent consultant CAP supports peer selection and program design .
- Governance practices include independent Chair, separate CEO/Chair roles, board risk oversight, and sustainability oversight .
Investment Implications
- Alignment: High equity mix (PBRSUs and TBRSUs) with multi-year vesting and RTSR/ROE metrics aligns Farber’s realized pay with shareholder value creation; strong guideline compliance (13.3x) supports skin-in-the-game .
- Retention/pressure: Retirement eligibility and scheduled option/RSU vesting create periodic potential supply; however pledging/hedging prohibitions and clawbacks mitigate misalignment risk .
- Change-in-control economics: Double-trigger design with quantified payouts reduces single-trigger windfalls; no tax gross-ups limit shareholder-unfriendly costs .
- Performance momentum: 2024 STIP overachievement and ROE PBRSU payout at 125% (2022–2024) are positive for near-term compensation realization; RTSR underperformance (25% payout) emphasizes relative market execution risk .
THE HANOVER INSURANCE GROUP citations: ; ; 10‑K references: –.