REGIONAL: Sagicor’s top execs shared US$24.3m in 2019

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(Trinidad Express) – SHAREHOLDERS of Sagicor Financial Company have expressed shock that the insurance company, which is headquartered in Barbados, paid its top five executives total compensation of US$24,315,981 in 2019.

And the shareholders of the company, which is now listed on the Toronto Stock Exchange, told Express Business that they were surprised the new chairman of the company, Canadian accountant Timothy Hodgson, will receive an annual retainer fee of US$220,000 a year for his services to the company.

Hodgson, an accountant, was previously the managing partner of Canada’s Alignvest Management Corporation, which describes itself as an alternative investment management firm. Alignvest Management Corporation is the parent company of Alignvest Acquisition II Corporation, the special purpose acquisition corporation that entered into a business combination arrangement with Sagicor that culminated in the insurer’s listing in Toronto in December.

The information is disclosed in Sagicor’s 2019 management information circular was made available to investors of the company, along with other documents, on May 1 2020 to inform their deliberations before the insurance company’s virtual annual meeting. That meeting was held last week Tuesday following a two-week adjournment.

The compensation packages of the top executives of the region’s largest insurance company are not expected to reoccur in 2020 and beyond because close to US$10 million of the 2019 compensation for the top two executive was as a result of lumpsum payments to them due to reductions in their compensation.

On December 5, 2019, Sagicor began trading exclusively on the Toronto Stock Exchange after being listed on the Barbados, T&T and London stock exchanges in 2003, 2004 and 2007 respectively.

The company’s share price on the Toronto Stock Exchange started 2020 at C$9.75 but declined to C$5.49 on Monday, a reduction in shareholder value of 43.7 per cent.

The information circular at page 37 discloses:

• Sagicor’s group president and CEO, Barbados-born but Florida resident, Dodridge Miller, received a total of US$14,971,744 in compensation in 2019;

•Miller’s second in command, Ravi Rambarran, Sagicor Life’s Trinidad-born president, who now resides in Jamaica, received total compensation of US$4,876,208;

• Sagicor’s group chief financial officer, Canadian Andre Mousseau received total compensation of US$1,835,138;

• President of Sagicor Group Jamaica Ltd, Chris Zacca, collected US$1,554,695; and

• President of Sagicor USA, Bart Catmull, received US$1,078,196.

According to the Sagicor information circular, Miller’s salary for 2019, which included the value of housing benefits and car allowance, was US$1,280,515 or US$106,709.58 a month.

Included in his 2019 compensation was US$8,920,800 paid to him comprising: US$1,345,800 delivered in cash for a reduction in salary, and US$7,575,000 delivered in shares for a substantial reduction in severance entitlement.

The US$7.57 million lumpsum received by Miller arose because he and Rambarran agreed in 2018 to a reduction in their calculated severance amounts “to better align with Canadian public company practices.” Rambarran received a lumpsum payment of US$2 million in shares for a substantial reduction in his severance entitlement when compared to pre-arrangement entitlements.

The document states: “Certain executives, including Messrs Miller and Rambarran, had their calculated severance amounts reduced, and had the circumstances under which the applicable executive would be paid severance, modified in the company’s favour.

These executives were compensated for this change by a lumpsum award of common shares.”

Sagicor Financial Company also reduced Miller’s base salary be reduced from US$1,117,000 to US$700,000, “in line with comparable Canadian public company benchmarks.” Miller received a cash payment of US$1,345,800 to compensate him for the reduction in salary over three years.

The changes to the compensation packages of Miller and Rambarran were based on input from Hugessen Consulting, a Canadian business management company.

Miller, Rambarran and the CFO Andre Mousseau are also entitled to receive specific Restricted Share Unit (RSU) grants pursuant to their contracts, which will comprise their long-term incentive grants for 2020 through 2022. The RSU grants were made to “closely align the incentives of certain executives with the interests of the company’s shareholders,” according to Sagicor.

Miller, Rambarran and Mousseau received the RSU grants under their new employment contracts, which were dated December 5, 2019. Miller and Rambarran are entitled to RSUs in respect of 675,000 shares and 600,000 shares, respectively while Mousseau is entitled to 360,000 shares. One-third of the RSUs vest on a time basis, one third vest based on return-on-equity targets and one-third vest only if the shares trade above C$12 per share for 20 out of 30 consecutive trading days before December 5, 2024.

Alone among the top five executives, Miller and Rambarran also participate in a defined benefit plan sponsored by Sagicor. The closing present value of Miller’s defined benefit obligation was US$15,893,587 at the end of 2019. Miller is now 62 years old, turns 65 in three years time, and had 30.77 years years of credited service to the company at the end of 2019.

The closing present value of Rambarran’s defined benefit obligation at the end of last year was US$3,382,589.

Sagicor’s top five executives are also entitled to an incentive plan awards, comprising the value of option-based and share-based award and a non-equity incentive plan compensation.

The value vested by Miller for the option-based award in 2019 amounted to US$886,422. For his share-based award, the value vested in 2019 was US$1,377,955 and his non-equity incentive plan compensation earned totaled US$1,145,505. Rambarran received US$56,738 in option-based awards, US$352,412 in share-based award and US$681,000 in non-equity incentive plan compensation.

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