Sarah Madsen
About Sarah Madsen
Sarah E. Madsen is Senior Vice President, Chief Legal Officer & Corporate Secretary of United Fire Group, Inc. (UFG), appointed effective March 31, 2022, overseeing legal, regulatory, governance, compliance, and vendor management . Prior to UFG, she served as corporate counsel and was a partner at a Twin Cities litigation firm; at UFG she expanded staff counsel operations, established a vendor management office, and reduced outside legal spend without compromising service quality . Company performance indicators relevant to executive pay include Adjusted ROE of 7.9% in 2024, Net Income of $31.4M, and pay-versus-performance TSR of $72.60 on a $100 base (vs. $51.49 in 2023, $68.01 in 2022) . UFG’s executive compensation program uses balanced short- and long-term metrics—Adjusted ROE, Core Earnings, written premium growth, net adjusted loss ratio, and expense ratio—across the AIP and PSUs to align pay with performance .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| United Fire Group, Inc. | Assistant General Counsel | 2018–2022 | Expanded staff counsel operations; established vendor management office; reduced outside legal spend |
| United Fire Group, Inc. | Chief Legal Officer & Corporate Secretary | 2022–present | Oversees legal, regulatory, governance, compliance, vendor management; corporate secretary responsibilities |
| Twin Cities Litigation Firm | Partner | Prior to 2018 | Litigation leadership; corporate counsel experience pre-UFG |
External Roles
No public company board roles or external directorships disclosed.
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | $370,000 | $382,950 (+3.5%) | Approved by Compensation Committee |
| All Other Compensation ($) | — | $11,500 [401(k) match] | No perquisites disclosed for Ms. Madsen in 2024 |
| Change in Pension Value & NQDC Earnings ($) | — | $11,607 | UFG sponsors defined-benefit pension and NQDC plan |
Performance Compensation
| AIP Metric (2024) | Weight | Target | Actual | Weighted Payout % | Notes |
|---|---|---|---|---|---|
| Core Earnings (pre-tax, adjusted) | 30% | $50.0M | $81.9M | 45.0% | Adds back/normalizes certain items |
| Written Premium Growth | 20% | $1,350.0M | $1,374.1M | 21.8% | Encourages balanced growth |
| Net Adjusted Loss Ratio | 20% | 67.5% | 63.5% | 30.0% | Profitability focus; CATs held at target for calc |
| Underwriting Expense Ratio | 20% | 33.5% | 35.8% | 0.0% | Expense discipline |
| Adjusted ROE | 10% | 5.0% | 7.9% | 14.8% | ROE ex MV changes on investments |
| Corporate Performance Factor | — | — | — | 111.6% [sum] | Sum of weighted payouts |
| Individual Performance Modifier (Madsen) | — | — | — | 105% | Based on goals certification |
| 2024 AIP Cash Payout ($) | — | — | — | — | $333,710 paid Mar-2025 [formula per plan] |
| LTIP Grant (2024) | PSUs ($) | RSUs ($) | Total ($) | Structure |
|---|---|---|---|---|
| Grant Fair Value | $143,607 | $143,607 | $287,214 | PSUs: 3-yr cliff vest; RSUs: 3 annual tranches |
| PSUs Target # | 6,531 [3/20/2024] | — | — | Measures: Core Earnings (30%), Written Premium (20%), Net Loss Ratio (20%), Expense Ratio (20%), Adjusted ROE (10%) |
| RSUs # | — | 6,531 [3/20/2024] | — | Time-based vesting in 3 equal annual installments |
| 2024 Stock Awards Vested | Shares | Value Realized ($) |
|---|---|---|
| Stock Awards Vested in 2024 | 68 | $1,654 |
Equity Ownership & Alignment
| Ownership Detail (Record Date: Mar 24, 2025) | Amount |
|---|---|
| Total Beneficial Ownership (# shares) | 20,484 |
| Directly Owned | 14,343 |
| 401(k) Holdings | 575 |
| Options Exercisable ≤60 days | 5,566 |
| % of Shares Outstanding | <1% |
| Shares Pledged | None (and pledging prohibited) |
| Stock Ownership Guidelines (Tier 2) | Target: 25,923 shares; Qualifying held: 14,918; trending to goal within 5-year window |
| Outstanding Equity (12/31/2024) | Count | Key Terms |
|---|---|---|
| Unvested RSUs | 6,531 (#, $185,807 MV) | 3 equal annual tranches from 3/20/2024 |
| Unvested PSUs | 6,531 (#, $185,807 MV) | Cliff vest on 3/20/2027 subject to performance |
| Options (2/18/2022 grant) | 1,497 exercisable; 749 unexercisable; $29.51 strike; expire 2/18/2032 | Vest over 3 years |
| Options (2/24/2023 grant) | 1,660 exercisable; 3,320 unexercisable; $28.39 strike; expire 2/24/2033 | Vest over 3 years |
Anti-hedging and anti-pledging policies prohibit hedging, margin accounts, and pledging for directors and officers; revised Aug 18, 2023, strengthening alignment .
Employment Terms
| Provision | Terms |
|---|---|
| Change-in-Control Severance | Double trigger: payment only upon termination for good reason/without cause after a CoC (nonqualifying terminations excluded) |
| Cash Severance Multiple | 1.5x highest annual base salary + target annual incentive; plus prorated target bonus for year of termination |
| Equity | Board discretion to accelerate RSUs/PSUs upon death/retirement/disability/CoC; PSUs assumed at target in illustrations |
| Benefits Continuation | Medical, accident, disability, life insurance for 18 months post-CoC |
| Outplacement | Up to $15,000 for 12 months post-CoC |
| Clawback | Dodd-Frank/Nasdaq-compliant clawback for incentive comp on accounting restatements; revised Aug 18, 2023 |
| Anti-Hedging/Pledging | Prohibited; revised Aug 18, 2023 |
| Tax Gross-Ups | No excise tax gross-up; “cutback” to avoid 4999 excise tax if it yields higher net after-tax amount |
| Hypothetical 12/31/2024 Termination Scenarios (Ms. Madsen) | Amount ($) |
|---|---|
| Death/Retirement | $893,752 |
| Disability | $606,540 |
| Change in Control (no termination) | $606,540 |
| Change in Control with Qualifying Termination | $1,945,559 |
Performance & Track Record
- UFG’s pay-versus-performance TSR improved to $72.60 in 2024 from $51.49 in 2023, with Adjusted ROE rising to 7.9% and Net Income turning to $31.4M from a loss in 2023, aligning with performance-driven incentives .
- As Corporate Secretary and CLO, Madsen supports governance, ESG policy refreshes, and insider trading policy enhancements adopted in 2024, reinforcing compliance and board effectiveness .
- Operational achievements from her legal leadership include expanding staff counsel operations, instituting vendor management office discipline, and reducing external legal spend .
| Company Operating Performance | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($) | $1,004.4M* [Values retrieved from S&P Global] | $1,097.1M | $1,257.3M* [Values retrieved from S&P Global] |
| EBITDA ($) | $22.9M* [Values retrieved from S&P Global] | -$26.0M* [Values retrieved from S&P Global] | $95.2M* [Values retrieved from S&P Global] |
| Pay vs Performance Indicators | 2022 | 2023 | 2024 |
|---|---|---|---|
| Adjusted ROE (%) | 3.0 | -3.8 | 7.9 |
| Net Income ($000s) | 15,031 | -29,689 | 31,442 |
| Company TSR (Value of $100) ($) | 68.01 | 51.49 | 72.60 |
Compensation Committee Analysis
- Compensation & Human Capital Committee chaired by Susan E. Voss; independent directors only; six meetings in 2024 .
- Mercer engaged as independent compensation consultant; independence affirmed; peer group framework updated to 14 property & casualty peers to maintain statistical validity and size comparability .
| 2024 Compensation Peer Group |
|---|
| American Coastal Insurance Corporation; Argo Group International Holdings, Ltd.; Donegal Group Inc.; Employers Holdings, Inc.; Global Indemnity Group, LLC; Heritage Insurance Holdings, Inc.; Horace Mann Educators Corporation; Kinsale Capital Corporation; ProAssurance Corporation; RLI Corp.; Safety Insurance Group, Inc.; Tiptree Inc.; Universal Insurance Holdings, Inc.; White Mountains Insurance Group Ltd. |
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~97%; five-year average approval ~98%; no program changes implemented solely due to 2024 vote result .
Governance, Hedging/Pledging, and ESG
- Revised Insider Trading Policy, executive stock ownership guidelines (Aug-2024), and comprehensive refresh of board-approved policies in 2024 .
- Executive ownership guidelines updated: Tier 2 target equals 1.5x base salary converted to shares; five-year transition period; Ms. Madsen trending to goal .
- Anti-hedging/anti-pledging policy prohibits hedging and pledging; none of management’s disclosed shares are pledged .
Investment Implications
- Pay-for-performance alignment is strong: 2024 AIP and PSU metrics emphasize ROE, underwriting profitability, growth, and core earnings; Ms. Madsen’s 2024 AIP payout reflected above-target corporate results with a modest individual modifier (105%), indicating execution discipline in a turnaround year .
- Retention risk appears contained: meaningful unvested RSU/PSU balances, options with multi-year vesting, and double-trigger CoC protection; no pledging or hedging permitted .
- Governance and compliance leadership (policy refreshes, insider trading controls, ownership guidelines) under Madsen support risk management and shareholder alignment; high say-on-pay support underscores investor confidence .
S&P Global disclaimer: Values marked with an asterisk (*) were retrieved from S&P Global.