DEF: Hagerty, Inc. Announces 2025 Annual Meeting of Stockholders and Director Nominees

Sentiment:

Proxy Statement 24 April 2025 4:06 PM

Hagerty, Inc. will hold its 2025 Annual Meeting of Stockholders virtually on June 3, 2025, to elect directors and ratify the appointment of Deloitte & Touche LLP as its independent accounting firm.

Summary

Hagerty, Inc. is holding its Annual Meeting of Stockholders on June 3, 2025, virtually.
Stockholders as of the record date, April 4, 2025, are entitled to vote.
The meeting will address the election of nine director nominees and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the year ending December 31, 2025.
The Board of Directors recommends voting for the election of all director nominees and for the ratification of Deloitte.
Stockholders can vote online, by telephone, or by mail following the instructions on their proxy card or notice.
The company's Board consists of nine directors, with McKeel Hagerty serving as Chairman and CEO, and William Swanson as Lead Director.
F. Michael Crowley will not stand for re-election, and Michael Heaton has been nominated to fill the vacancy.
The company is a controlled company under NYSE Listing Rules due to Hagerty Holding Corp. (HHC) holding more than 50% of the voting power.
The company has four standing Board committees: Audit, Talent, Culture, and Compensation, Nominating and Governance, and Finance and Capital.
The company has adopted a Clawback Policy for the recovery of erroneously awarded incentive compensation.
The company has adopted an insider trading policy that applies to all of its employees, officers, and directors.
The company has adopted a policy for the review, approval, and ratification of related person transactions.
The company has entered into an Investor Rights Agreement with HHC, Markel, and State Farm.
The company is party to a Tax Receivable Agreement with The Hagerty Group LLC, HHC, and Markel.
The company is party to an Amended and Restated Exchange Agreement with Markel, HHC, and The Hagerty Group.
The company is party to a Securities Purchase Agreement with State Farm, Markel, and persons related to HHC.
The company is party to a Registration Rights Agreement with the Investors.
Hagerty Re entered into an unsecured term loan credit facility with State Farm in the aggregate principal amount of $25.0 million.
The company is a party to that Sixth Amended and Restated Limited Liability Company Agreement of The Hagerty Group, dated as of December 18, 2023 with The Hagerty Group, HHC, Markel, and the other members party thereto.
State Farm has been a key strategic partner since 2020 when we entered into a 10-year master alliance agreement and associated managing general underwriter agreement with State Farm, under which the State Farm Classic+ policy is offered to State Farm's customers through State Farm agents.
Effective March 1, 2023, Hagerty Re has a quota share reinsurance agreement to cede 50% of the risk related to U.S. policies written with a total insured value equal to or greater than $5 million to Oglesby Reinsurance Company, a subsidiary of State Farm.
Markel has been a key strategic partner since 2013 when they acquired Essentia Insurance Company, a Missouri-domiciled insurance company owned by Markel (Essentia), to exclusively underwrite our U.S. insurance program.
Pursuant to a quota share reinsurance agreement between Hagerty Re and Evanston Insurance Company, an Illinois-domiciled insurance company owned by Markel (Evanston), during the years ended December 31, 2023 and December 31, 2024, Hagerty Re assumed approximately 80% of the risks written through Hagerty's U.S. Managing General Agents.
Soon Hagerty, McKeel Hagerty's wife, served as our Senior Vice President of Brand until November 30, 2023, when she transitioned to a part-time employment role as Senior Adviser for Brand Strategy.
Our executives have used an aircraft for business purposes that is jointly owned indirectly by McKeel Hagerty and Tammy Hagerty, McKeel Hagerty's sister and beneficial owner of more than 5% of our equity securities.
Under the Investor Rights Agreement, HHC, the beneficial owner of more than 5% of our equity securities, has the right to nominate two directors to our Board, or in lieu of a designated nominee HHC may appoint an advisor to our Board.
In April 2022, we acquired Speed Digital LLC ('Speed Digital') for a purchase price of $15 million.
From time to time, in the ordinary course of business, our directors, executive officers, principal stockholders and their related parties, purchase Hagerty insurance policies for their vehicles or otherwise purchase or sell their vehicles through Hagerty Marketplace at auction or in private transactions.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a neutral to slightly positive tone. The company is taking steps to ensure good corporate governance and maintain key strategic relationships.

Positives

The Board recommends voting 'FOR' all director nominees and the ratification of Deloitte.
The company has four standing Board committees: Audit, Talent, Culture, and Compensation, Nominating and Governance, and Finance and Capital.
The company has adopted a Clawback Policy for the recovery of erroneously awarded incentive compensation from Section 16 officers.
The company has adopted an insider trading policy that applies to all of its employees, officers, and directors.
The company has adopted a policy for the review, approval, and ratification of related person transactions.
State Farm has been a key strategic partner since 2020 when we entered into a 10-year master alliance agreement and associated managing general underwriter agreement with State Farm, under which the State Farm Classic+ policy is offered to State Farm's customers through State Farm agents.
Markel has been a key strategic partner since 2013 when they acquired Essentia Insurance Company, a Missouri-domiciled insurance company owned by Markel (Essentia), to exclusively underwrite our U.S. insurance program.

Negatives

Hagerty is a controlled company under NYSE rules due to HHC's majority voting power, which reduces some corporate governance protections for minority shareholders.

Risks

The company operates in a very competitive and rapidly changing environment and new risks emerge from time to time.
The company's future operating results and financial position, business strategy and plans, products, services, and technology implementations, market conditions, growth and trends, expansion plans and opportunities, and our objectives for future operations are subject to risks and uncertainties.
The company's ability to compete effectively within its industry and attract and retain its insurance policyholders and paid Hagerty Drivers Club subscribers is subject to risks and uncertainties.
The company's ability to maintain key strategic relationships with its insurance distribution and underwriting carrier partners is subject to risks and uncertainties.
The company's ability to prevent, monitor, and detect fraudulent activity is subject to risks and uncertainties.
The company's ability to manage risks associated with disruptions, interruptions, outages or other issues with its technology platforms or its use of third-party services is subject to risks and uncertainties.
The company's ability to accelerate the adoption of its membership products as well as any new insurance programs and products it offers is subject to risks and uncertainties.
The company's ability to manage the cyclical nature of the insurance business, including through any periods of recession, economic downturn or inflation is subject to risks and uncertainties.
The company's ability to address unexpected increases in the frequency or severity of claims is subject to risks and uncertainties.
The company's ability to comply with the numerous laws and regulations applicable to its business, including state, federal and foreign laws relating to insurance and rate increases, privacy, the internet, and accounting matters is subject to risks and uncertainties.

Future Outlook

The company expects its executive compensation program to continue to evolve commensurate with its growth in 2025.

Industry Context

The document provides standard proxy information, including director nominations, executive compensation, and related party transactions, which is typical for publicly traded companies in preparation for their annual meetings. The relationships with key strategic partners like State Farm and Markel are highlighted, indicating the importance of these alliances to Hagerty's business model.

Comparison to Industry Standards

The director compensation structure, including annual retainers and stock grants, is generally in line with industry standards for publicly traded companies of similar size and complexity.
The company's reliance on a controlled company exemption is not uncommon, particularly for companies with significant insider ownership.
The related party transactions disclosed are typical for companies with strategic alliances and significant shareholders, and the company has a policy in place to ensure these transactions are conducted on an arm's-length basis.
The company's audit and compensation committee structures and responsibilities align with best practices for corporate governance.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Director	F. Michael Crowley	Michael Heaton	Immediately prior to the Annual Meeting	F. Michael Crowley decided not to stand for re-election.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Director Compensation	Amendment to the Non-Employee Director Compensation Structure	April 1, 2025	Increased annual stock grant to $125,000 and adjusted retainers for board and committee chairs.

Related Party Transactions

State Farm is a related party as a result of its director designation rights and stock ownership in us.
Markel has been a key strategic partner since 2013 when they acquired Essentia Insurance Company, a Missouri-domiciled insurance company owned by Markel (Essentia), to exclusively underwrite our U.S. insurance program.
Soon Hagerty, McKeel Hagerty's wife, served as our Senior Vice President of Brand until November 30, 2023, when she transitioned to a part-time employment role as Senior Adviser for Brand Strategy.
Our executives have used an aircraft for business purposes that is jointly owned indirectly by McKeel Hagerty and Tammy Hagerty, McKeel Hagerty's sister and beneficial owner of more than 5% of our equity securities.
Under the Investor Rights Agreement, HHC, the beneficial owner of more than 5% of our equity securities, has the right to nominate two directors to our Board, or in lieu of a designated nominee HHC may appoint an advisor to our Board.
In April 2022, we acquired Speed Digital LLC ('Speed Digital') for a purchase price of $15 million.
From time to time, in the ordinary course of business, our directors, executive officers, principal stockholders and their related parties, purchase Hagerty insurance policies for their vehicles or otherwise purchase or sell their vehicles through Hagerty Marketplace at auction or in private transactions.

Stakeholder Impact

Shareholders are asked to vote on key proposals, including the election of directors and the ratification of the independent accounting firm.
Employees are subject to the company's Code of Conduct and Insider Trading Policy.
The company's relationships with strategic partners like State Farm and Markel impact its business operations and financial performance.
The company's executive compensation program is designed to align the interests of executives with those of shareholders.

Next Steps

Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
The company will hold its Annual Meeting of Stockholders on June 3, 2025.
The company will continue to monitor and manage its risk management program.
The company will continue to evaluate and refine its executive compensation program.

Key Dates

Date	Description
August 17, 2021	Aldel, HHC, Markel, and State Farm entered into the Investor Rights Agreement.
August 16, 2021	Paul Rehrig's Employment Agreement.
December 2, 2021	Investor Rights Agreement became effective.
November 2021	We entered into a board advisor agreement with Mr. Becker's company, BDO USA LLP.
April 2022	We acquired Speed Digital LLC for a purchase price of $15 million.
March 23, 2022	Amended and Restated Exchange Agreement with Markel, HHC, and The Hagerty Group.
September 6, 2022	Employment Agreement with Mr. McClymont.
March 1, 2023	Hagerty Re has a quota share reinsurance agreement to cede 50% of the risk related to U.S. policies written with a total insured value equal to or greater than $5 million to Oglesby Reinsurance Company, a subsidiary of State Farm.
March 2023	Amendment to Mr. Hagertys Employment Agreement.
March 2023	Amendment to Mr. McClymonts Employment Agreement.
June 23, 2023	Securities Purchase Agreement with State Farm, Markel, and persons related to HHC.
June 23, 2023	Amended Tax Receivable Agreement with The Hagerty Group LLC, HHC, and Markel.
June 23, 2023	Registration Rights Agreement with the Investors.
September 19, 2023	Hagerty Re entered into an unsecured term loan credit facility with State Farm in the aggregate principal amount of $25.0 million.
December 18, 2023	Sixth Amended and Restated Limited Liability Company Agreement of The Hagerty Group.
November 30, 2023	Soon Hagerty transitioned to a part-time employment role as Senior Adviser for Brand Strategy.
February 2024	Board determined that combining the offices of Chairman and CEO would be in the best interests of Hagerty and its stockholders.
April 2, 2024	McKeel Hagerty has served as the Chairman of the Board.
July 9, 2024	Anthony Kuczinski was appointed to our Board.
June 24, 2024	We paid dividends on the Preferred Stock to the following Investors: $3.5 million to State Farm, $1.05 million to Markel, $350,000 to the McKeel O Hagerty Revocable Trust, and $700,000 to the Tammy J. Hagerty Revocable Trust.
July 5, 2024	We completed the exchange of our (i) Public Warrants (Public Warrants), (ii) Private Warrants (Private Warrants), (iii) Underwriter Warrants (Underwriter Warrants), (iv) OTM Warrants (together with the Private Warrants and the Underwriter Warrants, the 'Private Placement Warrants'), and (v) PIPE Warrants (together with the Public Warrants and Private Placement Warrants, the 'Warrants'), which resulted in the aggregate issuance of 3,876,201 shares of Class A Common Stock in exchange for 19,483,539 Warrants, with a nominal cash settlement paid in lieu of fractional shares (the 'Warrant Exchange').
June 2024	Jeffrey (Jeff) Briglia has served as Hagertys President of Insurance.
December 2, 2024	Mr. Rehrigs employment with us as President, Hagerty Media & Entertainment ended.
December 2024	We entered into an independent contractor agreement with Ms. Hagerty, for her to supply us with strategic brand advisory and event management and consulting services.
December 2024	The agreement provides that Mr. Becker may observe Board meetings at the request of the presiding chairman or the chief executive officer, attend one annual full-day retreat to provide advice and recommendations regarding our strategy and future operations to our Board, CEO, or CFO; and provide advice and recommendations regarding our operations as requested by our Board and management on an as-needed basis.
February 3, 2025	Our Board amended the Non-Employee Director Compensation Structure.
April 4, 2025	Record date for the Annual Meeting.
April 16, 2025	We announced that F. Michael Crowley decided not to stand for re-election and that his service on our Board would end immediately prior to the Annual Meeting and that Markel Group Inc. has exercised its rights under the Investor Rights Agreement to nominate Michael Heaton to fill the vacancy caused by Mr. Crowley's departure.
April 24, 2025	On or about Thursday, April 24, 2025, we will mail a notice or proxy card to all stockholders entitled to vote at the Annual Meeting containing instructions on how to access our proxy materials and vote.
May 20, 2025	Stockholders who prefer a paper copy of the proxy materials may request this on or before May 20, 2025, by following the instructions provided in the notice we will send.
June 3, 2025	Annual Meeting of Stockholders.
August 31, 2025	The agreement was amended in April 2025 to extend the service period through August 31, 2025, and provides for a total fee of $90,000 plus reimbursement of pre-approved expenses.
December 25, 2025	Stockholders must provide written notice of their proposal to us no later than the close of business 120 days from the one year anniversary of the date this Proxy Statement is first released to stockholders, which is December 25, 2025.
February 3, 2026	Stockholder director nominations must be submitted in writing no later than the close of business 90 days prior to the one year anniversary of the Annual Meeting date, which is March 5, 2026, and not earlier than the close of business 120 days prior to the one year anniversary of the Annual Meeting date, which is February 3, 2026, assuming we do not change the date of the 2026 annual meeting of stockholders by more than 30 days before or after the one year anniversary of the Annual Meeting.
March 5, 2026	Stockholder director nominations must be submitted in writing no later than the close of business 90 days prior to the one year anniversary of the Annual Meeting date, which is March 5, 2026, and not earlier than the close of business 120 days prior to the one year anniversary of the Annual Meeting date, which is February 3, 2026, assuming we do not change the date of the 2026 annual meeting of stockholders by more than 30 days before or after the one year anniversary of the Annual Meeting.
April 4, 2026	To comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees, other than the Company's nominees, must provide notice that sets forth the information required by Rule 14a-19 under the Securities and Exchange Act of 1934 ('Exchange Act') no later than the close of business 60 days prior to the one year anniversary of the Annual Meeting Date which is April 4, 2026.

Keywords

Annual Meeting, Proxy Statement, Board of Directors, Director Nominees, Deloitte, Stockholders, Corporate Governance, Related Person Transactions, Investor Rights Agreement, Tax Receivable Agreement, State Farm, Markel, Executive Compensation, Risk Management, Insurance

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.