8-KLeadership Changes

ARCH CAPITAL GROUP LTD. 8-K Report, Executive Changes (Dec 17, 2008)

Filed December 17, 2008For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) filed an 8-K on December 17, 2008, primarily to report on executive compensation arrangements. The key event detailed is the company's decision to merge two non-qualified deferred compensation plans and bring them into compliance with Section 409A of the Internal Revenue Code. This consolidation also involved a significant contribution to the CEO, Dinos Iordanou's, account.

Key Highlights

  • 1Arch Capital Group Ltd. merged two non-qualified deferred compensation plans.
  • 2The combined plan was brought into compliance with Section 409A of the Internal Revenue Code.
  • 3A contribution of $2,466,526 was made to the account of President and CEO, Dinos Iordanou.
  • 4This contribution is intended to provide supplemental pension benefits for services rendered prior to the contribution date.
  • 5The contribution also recognizes pension benefits previously foregone by Mr. Iordanou from a former employer.
  • 6The credited amount is fully vested on the contribution date (December 11, 2008).
  • 7The total amount, including notional earnings, is scheduled for distribution to Mr. Iordanou on or before December 31, 2017.

Frequently Asked Questions

The main purpose of this 8-K filing was to report on changes to the company's deferred compensation plans and a significant contribution made to the CEO's account, ensuring compliance with tax regulations.

The $2,466,526 credited to CEO Dinos Iordanou's account is for supplemental pension benefits, recognizing services performed before the contribution date and past foregone pension benefits from a previous employer. This was part of the renewal of his employment agreement.

The credited amount, along with any notional earnings, will be distributed to Mr. Iordanou on or before December 31, 2017, according to his distribution election and the plan's terms.

Compliance with Section 409A of the Internal Revenue Code is important for non-qualified deferred compensation plans to avoid adverse tax consequences for both the company and the executive, such as immediate taxation and penalties on deferred amounts.