Steven Hernandez
About Steven D. Hernandez
Senior Vice President and Chief Human Resources Officer at United Fire Group (UFG), appointed in May 2024, with compensation structured to balance cash and long-term equity tied to operating performance . 2024 corporate results under the Annual Incentive Plan (AIP) achieved 111.6% of target on the weighted scorecard (strong core earnings and loss ratio performance offset by expense ratio), and his individual performance factor was certified at 105% . 2024 total reported compensation was $1,137,090, including base salary, a sign-on bonus, equity awards (RSUs/PSUs), and an AIP payout determined in 2025 for 2024 performance . UFG’s say‑on‑pay support remained high (97% approval at the 2024 AGM), indicating investor alignment with the pay program design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in company filings | — | — | — |
[No disclosure for Mr. Hernandez’s prior employers/roles found in the company’s 2025 DEF 14A or 8‑K filings searched]
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed in company filings | — | — | — |
[No external directorships or public roles disclosed in the 2025 DEF 14A]
Fixed Compensation
| Item | 2024 | Notes |
|---|---|---|
| Base Salary | $385,000 | Established by the Compensation Committee at hire, based on prior employer compensation and internal equity . |
| Sign‑on Bonus | $128,000 | To replace four months of foregone bonus/dividends from prior employer . |
| All Other Compensation | $8,983 | Reported in SCT; components not detailed in cited sections . |
| Defined Benefit Pension (Present Value) | — | No pension value reported for 2024 . |
| Nonqualified Deferred Compensation Contributions | — | No NQDC participation reported for 2024 . |
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Design, Goal Achievement, and Payout
| Metric | Weight | Threshold | Target | Maximum | 2024 Result | Weighted Payout % |
|---|---|---|---|---|---|---|
| Adjusted ROE | 10% | 2.0% | 5.0% | 8.0% | 7.9% | 14.8% |
| Written Premium Growth (millions) | 20% | 1,215 | 1,350 | 1,485 | 1,374.1 | 21.8% |
| Net Adjusted Loss Ratio | 20% | 70.0% | 67.5% | 65.0% | 63.5% | 30.0% |
| Underwriting Expense Ratio | 20% | 35.0% | 33.5% | 32.0% | 35.8% | 0.0% |
| Core Earnings (millions) | 30% | 25 | 50 | 75 | 81.9 | 45.0% |
| Corporate Achievement Level | — | — | — | — | — | 111.6% |
| Individual Performance Factor (Hernandez) | — | — | — | — | — | 105% |
Additional AIP parameters and payout:
- Target bonus opportunity: 50% of base salary for Hernandez .
- Actual 2024 AIP paid (determined/paid in 2025): $137,849 (company-wide payment timing in March 2025) .
AIP calculation method and modifier framework:
- Payout formula: Base Salary × Target Bonus % × Corporate Performance Factor × Individual Performance Factor; individual modifiers can range 0–200% within maximums .
- Payments to NEOs for 2024 performance were made in March 2025 .
Long-Term Incentive Plan (LTIP) – 2024 Grants and Structure
Allocation and metrics:
- 2024 LTIP eliminated stock options; mix is 50% PSUs (three-year cliff) and 50% RSUs (three equal annual installments) .
- 2024 PSU performance measures and weights: Core Earnings (30%), Written Premium Growth (20%), Net Adjusted Loss Ratio (20%), Underwriting Expense Ratio (20%), Adjusted ROE (10%); vesting 0%–200% based on three-year results (2024–2026) .
Hernandez 2024 LTIP awards:
| Grant Type | Grant Date | Target Units/Amount | Vesting | Notes |
|---|---|---|---|---|
| PSUs | 05/15/2024 | 4,957 target; $115,498 FV | Cliff vests on 3rd anniversary (05/15/2027), subject to performance | Metrics/weights as above; reported at target . |
| RSUs | 05/15/2024 | 4,957; $115,498 FV | Three equal annual installments on each anniversary (05/15/2025, 05/15/2026, 05/15/2027) | Time-based vesting subject to continued employment . |
| Replacement RSUs | 05/15/2024 | 16,995; $395,984 FV | 7,356 on 05/15/2025; 9,639 on 05/15/2026 | To replace forfeited equity from prior employer . |
Company performance precedent (context for rigor):
- 2022 PSUs for then-serving NEOs vested at 0% based on 2022–2024 performance; shows plan’s performance‑contingency (not applicable to Hernandez’s 2024 hire grant) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (3/24/2025) | 24,349 shares; less than 1% of outstanding; none pledged . |
| Stock Ownership Guidelines | Tier 2; target = 1.5× salary (measured in shares); five-year compliance window . |
| Guideline Compliance (Record Date) | Target: 26,062 shares; Qualifying shares held: 63,149 (exceeds guideline) . |
| Anti‑Hedging/Anti‑Pledging Policy | Hedging prohibited; holding in margin or pledging company securities prohibited (policy revised Aug 18, 2023) . |
| Options Outstanding | None for Hernandez as of 12/31/2024 . |
| Unvested Time‑Based RSUs (12/31/2024) | 4,957 units; market value $141,027 at $28.45 close . |
| Unvested PSUs (target) (12/31/2024) | 4,957 units; reported at target; market value not shown for PSUs in the RSU column . |
| Replacement RSUs Outstanding (12/31/2024) | 16,995 units; market value $483,508 at $28.45 close . |
Vesting schedule (near-term supply considerations):
- Replacement RSUs: 7,356 units vesting on 05/15/2025 and 9,639 units vesting on 05/15/2026 .
- 2024 annual RSUs: three-year ratable vesting on each of the first three anniversaries of 05/15/2024 (time-based) .
- 2024 PSUs: performance period 2024–2026; vest on 05/15/2027 based on results (0%–200%) .
Employment Terms
| Term | Detail |
|---|---|
| Start Date / Role | Commenced as Chief Human Resources Officer in May 2024 . |
| 2024 Base Salary | $385,000 (set at hire; based on prior employer comp and internal equity) . |
| AIP Target | 50% of base salary (NEO schedule) . |
| Change‑in‑Control Severance (effective 08/28/2025) | Standard form agreement: 18‑month non‑compete; upon both a change in control and Company termination without cause, severance = 1.5× highest base salary + target annual incentive, 18 months of certain insurance benefits, full vesting of LTI with PSUs at target, and outplacement benefits . |
| Clawback Policy | Recovery of erroneously awarded incentive compensation for executive officers in event of an accounting restatement (updated to align with Nasdaq/Dodd‑Frank) . |
| Anti‑Hedging/Anti‑Pledging | Hedging prohibited; no margin/pledging of Company securities . |
| Pension / NQDC | No pension present value or NQDC participation reported for Hernandez in 2024 . |
Potential payments table (as of 12/31/2024; methodological context):
- The proxy included hypothetical values for death, disability, change in control, and change in control with termination for Hernandez “as if” a CiC agreement were in place (he did not have one at 12/31/2024); these mechanics align with the Company’s CiC framework used for other NEOs . The actual CiC agreement for Hernandez was later executed effective August 28, 2025 with the terms shown above .
Compensation Committee, Peer Group, and Say‑on‑Pay
- Peer benchmarking: Mercer advised on the 2024 program using a 14‑company P&C/multi‑line peer group; the committee reviewed market medians alongside company performance, role scope, and internal structure .
- 2024 comparison group companies (selected examples): Kinsale Capital, RLI, Horace Mann, Safety Insurance, Employers Holdings, White Mountains, and others (full 14‑company list in the proxy) .
- Say‑on‑pay: 97% approval in 2024; five‑year average ~98% .
Investment Implications
- Alignment and retention: Hernandez materially exceeds stock ownership guidelines (63,149 qualifying shares vs 26,062 target), signaling meaningful skin‑in‑the‑game under a policy that prohibits hedging and pledging, lowering alignment risk .
- Near‑term selling pressure watch: Significant scheduled vesting of replacement RSUs in 2025 (7,356 sh) and 2026 (9,639 sh), plus annual RSUs vesting ratably, could create periodic liquidity events; monitor Form 4s around vest dates for any sales .
- Pay‑for‑performance: 2024 AIP scored 111.6% on corporate metrics with a 105% individual factor, while 2022 PSUs for then‑NEOs paid at 0%—underscoring incentive rigor; 2024 LTIP uses five operating metrics and eliminates options, balancing upside with risk control .
- Change‑in‑control protections: As of Aug 2025, Hernandez has a double‑trigger CiC agreement (1.5× base+target, 18‑month benefits, target vesting), which supports retention in strategic scenarios but also crystallizes equity at target upon qualifying termination; governance risk mitigated by clawback and anti‑pledging policies .
Summary: The package is standard for a newly hired CHRO with meaningful equity, rigorous performance linkage, and strong governance guardrails (clawback, anti‑pledging). The largest near‑term catalysts for trading behavior are the 2025/2026 replacement RSU vestings; track filings around those dates and AIP/PSU performance trajectories through 2026 for signals on realized pay vs performance .
Appendix: 2024 Summary Compensation Table (extract for Hernandez)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non‑Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 235,278 | 128,000 | 626,980 | 137,849 | 8,983 | 1,137,090 |
[Notes: The “Bonus” reflects a sign‑on payment; stock awards represent grant‑date fair values per ASC 718; the AIP amount was earned for 2024 and paid in 2025] .