DEF: Palomar Holdings Sets Date for 2025 Annual Meeting, Outlines Key Proposals

Palomar Holdings will hold its 2025 Annual Meeting of Stockholders on May 22, 2025, to vote on director elections, executive compensation, and auditor ratification.

Summary

• Palomar Holdings, Inc. will hold its 2025 Annual Meeting of Stockholders on May 22, 2025, at its La Jolla, California offices.
• Stockholders of record as of April 1, 2025, are eligible to vote.
• The meeting will address the election of two Class III Directors, an advisory vote on executive compensation, and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The Board recommends voting for the election of Mac Armstrong and Martha Notaras as Class III directors, for the approval of executive compensation, and for the ratification of Ernst & Young LLP.
• The company highlights its corporate governance practices, including annual board and committee evaluations, independent directors, and quarterly cybersecurity updates.
• Executive compensation includes base salary, annual incentive plan (AIP), and long-term equity incentives (LTI), with a focus on pay-for-performance.
• The company's 2024 financial performance included a 35.1% increase in gross written premiums (GWP) to $1.5 billion and net income of $117.6 million.
• The Compensation Committee approved a 180% payout of target under the 2024 AIP based on company and individual performance.
• The company has enhanced its clawback policy and stock ownership guidelines for executives and directors.
• The company is asking shareholders to approve, on a non-binding advisory basis, the compensation of our Named Executive Officers (which consist of our Chief Executive Officer, Chief Financial Officer, and our next three highest paid executives) as described in detail in the section of this Proxy Statement titled Executive Compensation.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and shareholder support for the company's compensation program.

Positives

• The company has strong corporate governance practices, including independent directors and regular board evaluations.
• Executive compensation is heavily weighted towards at-risk pay, aligning management interests with shareholder value.
• The company achieved significant growth in GWP and net income in 2024.
• The company has a clawback policy and stock ownership guidelines in place.
• The company is asking shareholders to approve, on a non-binding advisory basis, the compensation of our Named Executive Officers (which consist of our Chief Executive Officer, Chief Financial Officer, and our next three highest paid executives) as described in detail in the section of this Proxy Statement titled Executive Compensation.

Future Outlook

The company aims to continue its growth trajectory and maintain a pay-for-performance culture.

Management Comments

• On behalf of the Board of Directors, I would like to express our appreciation of your interest in Palomar.
• We believe our well-structured executive compensation programs that are rooted in a pay-for-performance philosophy have aided in focusing management behavior on achieving rigorous performance objectives that contribute to long-term shareholder value creation.

Industry Context

The document benchmarks Palomar's executive compensation against a peer group of insurance companies, reflecting an awareness of industry standards.

Comparison to Industry Standards

• The document benchmarks Palomar's executive compensation against a peer group of 16 public companies for 2024, which are insurance companies deemed to be of similar size and scope when considering Palomar's weighted positioning of market capitalization and gross written premiums.
• For 2025 benchmarking purposes, the peer group was revamped to 17 public companies, of which six were constituents of the 2024 peer group and 11 are new additions.
• The document mentions that the Compensation Committee utilized a balance of cash and equity in setting director compensation, considering market comparison studies and trends.
• The document mentions that the Compensation Committee engaged with Pay Governance to advise the Committee on matters related to executive compensation.

Management Changes

Corporate Governance

Related Party Transactions

• In 2024, Mac Armstrongs brother, Jake Armstrong, served as our EVP, Operations. For fiscal year 2024, Jake Armstrong earned/received: i) base salary of approximately $288,500, ii) an annual cash incentive bonus of approximately $97,000, iii) long-term equity incentives in the form of stock options and RSUs and PSUs with a combined grant date fair value of approximately $118,000 and iv) approximately $10,500 in 401(k) plan employer contributions.

Stakeholder Impact

• Shareholders: The document provides information relevant to voting decisions and highlights the company's performance and governance practices.
• Employees: The document outlines executive compensation and benefits, as well as the company's commitment to a pay-for-performance culture.
• Customers: The document does not directly address the impact on customers.
• Suppliers: The document does not directly address the impact on suppliers.
• Creditors: The document does not directly address the impact on creditors.

Next Steps

• Stockholders are urged to vote via the Internet, telephone, or mail.
• The company will continue to engage with shareholders and solicit feedback on executive compensation, corporate governance, and sustainability matters.
• The company will continue to review and refine its compensation and governance practices to align with market best practices and shareholder expectations.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, directors, auditor, governance, Palomar Holdings, PLMR