10-K/A: Enstar Group Files Amendment to 2024 Annual Report, Providing Detailed Information on Directors, Executive Compensation, and Corporate Governance

Enstar Group Limited files an amendment to its 2024 Annual Report on Form 10-K/A to include previously omitted information regarding directors, executive compensation, corporate governance, and related matters.

Summary

• Enstar Group Limited is filing Amendment No. 1 on Form 10-K/A to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
• The amendment includes information required by Items 10 through 14 of Part III of Form 10-K, which was previously omitted.
• The company's definitive proxy statement containing this information will not be filed before the deadline, necessitating this amendment.
• The amendment restates Items 10 through 14 of Part III of the 2024 Form 10-K, updates the number of Common Shares outstanding to 14,909,767, and removes the statement about incorporating information by reference from the definitive proxy statement.
• New certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included.
• Exhibit 3.2 is replaced to reflect the Seventh Amended and Restated Bye-Laws.
• The aggregate market value of the registrant's voting and non-voting common equity held by non-affiliates as of June 28, 2024 was $3.4 billion based on the closing price of $305.70 per ordinary share on the NASDAQ Stock Market on that date.
• As of April 28, 2025, the registrant had outstanding 14,909,767 voting ordinary shares, par value $1.00 per share.

Sentiment

Score: 7

Explanation: The document is largely factual and informative, presenting details about executive compensation, corporate governance, and related matters. The sentiment is neutral to slightly positive, reflecting the company's efforts to maintain transparency and align executive interests with those of shareholders.

Positives

• The company has a Clawback Policy that allows for recoupment of incentive compensation in the event of an accounting restatement due to material noncompliance with financial reporting requirements.
• The company has adopted an Insider Trading Policy to promote compliance with insider trading laws.
• The company has adopted a Code of Conduct that applies to all of its directors and employees.
• The company's Share Ownership Guidelines require executive officers, directors, and certain members of senior management to achieve and maintain ownership of company shares.
• The company's executive compensation programs are designed to align executives' long-term interests with those of shareholders.
• The company has employment agreements with its named executive officers, which include restrictive covenants for non-competition, non-solicitation, and confidentiality.

Negatives

• At last year's annual general meeting held on June 6, 2024, our shareholders approved the compensation of our executive officers with 67% of the total votes cast in favor of the proposal, which the Compensation Committee strives for a higher level of shareholder approval.
• The company's RLE for the year fell short of target due to adverse development within certain of the company's run-off portfolios.

Risks

• The company operates in a competitive and rapidly evolving industry, and attracting, retaining and properly incentivizing key executives and employees in this competitive environment remains a priority for the Board and the Compensation Committee.
• The company's earnings are derived primarily from Run-Off Liability Earnings and Total Investment Return rather than revenue, making peer comparison on the basis of revenue not a useful metric for us.
• The company is subject to the risk of adverse development within certain of the company's run-off portfolios.

Future Outlook

The Merger with Elk Bidco Limited is expected to close in mid-2025.

Industry Context

The document notes that despite the exit of some companies from the legacy market, the acquisition and management of companies and portfolios in run-off continues to be competitive.

Comparison to Industry Standards

• The Compensation Committee reviewed publicly available executive officer compensation information described in the periodic filings of a group of other publicly traded companies in our industry.
• The peer group selection process focused on three criteria, which was consistent with prior years: (i) industry; (ii) geography (with a significant preference for the use of Bermuda companies); and (iii) size, with reference to: (A) total shareholders equity within approximately 0.5 to 2.5 times of our total shareholders equity and (B) total assets within approximately 0.5 to 2.5 times of our total assets.
• The following companies were reviewed to provide an overall backdrop to the Compensation Committees decisions: Arch Capital Group Ltd., Hanover Insurance Group, Selective Insurance Group, Assured Guaranty Ltd., Hiscox Ltd., SiriusPoint Ltd., AXIS Capital Holdings, Markel Corporation, White Mountains Insurance Group, Essent Group Ltd., RenaissanceRe Holdings Ltd., W.R. Berkley, Everest Re Group Ltd.

Management Changes

Corporate Governance

Related Party Transactions

• The company has made various investments in funds and separate accounts managed by Stone Point or affiliates of Stone Point, and the company has also made direct investments in entities affiliated with Stone Point.
• During 2024 and through February 28, 2025, the company was invoiced an aggregate of $2.5 million for services provided by Mitchell and Genex for medical treatment utilization review, medical bill review, durable medical equipment coverage and pharmacy benefit management services pursuant to third party administrator arrangements for primarily workers' compensation portfolios in run-off that the company manages.
• As of December 31, 2024, the company owns 24.6% of the common shares of Monument Re. As of December 31, 2024, a fund managed by Stone Point owns 15.7% of Monument Re's preferred shares.
• In March 2022, the company entered into a three-year sponsorship agreement with Saracens, to sponsor and promote women's sports, gender equality and community outreach. The company committed to pay Saracens up to 115,000 per year ($156,400) plus VAT, and in return the company receives certain marketing and other rights and will support them in their community outreach efforts.
• In addition to our three-year sponsorship, in March 2024 we purchased eight corporate hospitality tickets from Saracens for the cost of 72,000 ($91,000) plus VAT, for the purpose of corporate entertaining.

Stakeholder Impact

• The Merger with Elk Bidco Limited is expected to close in mid-2025, which will result in the Company surviving the Merger as a wholly owned subsidiary of the Parent.
• The company's executive compensation programs are designed to align executives' long-term interests with those of shareholders.

Next Steps

• The Merger with Elk Bidco Limited is expected to close in mid-2025.

Key Dates

Keywords

executive compensation, directors, corporate governance, incentive compensation, share ownership, Sarbanes-Oxley, equity plan, clawback policy, insider trading, audit committee, related party transactions, Form 10-K/A, Enstar Group Limited, financial reporting, risk management, merger