8-KLeadership ChangesExhibits & Filings

ARCH CAPITAL GROUP LTD. 8-K Report, Executive Changes (Oct 6, 2014)

Filed October 6, 2014For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) filed a Form 8-K on October 6, 2014, to report an amendment to the employment agreement for its Chairman, President, and CEO, Constantine Iordanou. The key change is the elimination of the company's obligation to provide excise tax gross-ups for any 'golden parachute' payments to Mr. Iordanou. This amendment aligns with the company's stated policy of not providing such gross-ups to any employees, signifying a shift in executive compensation practices regarding tax liabilities on certain termination payments. The agreement extends Mr. Iordanou's tenure as President and CEO through March 31, 2018, unless terminated earlier under the terms of the agreement. While the tax gross-up provision has been removed, the other terms of the employment agreement remain substantially the same. Investors should note this change in executive compensation structure and its implications for potential future payouts to the CEO.

Key Highlights

  • 1Arch Capital Group Ltd. amended the employment agreement for CEO Constantine Iordanou.
  • 2The amendment eliminates the company's obligation to cover 'golden parachute' excise taxes for Mr. Iordanou.
  • 3This change reflects Arch Capital's broader policy of not providing excise tax gross-ups to any employees.
  • 4Mr. Iordanou's employment as President and CEO is extended through March 31, 2018.
  • 5The core terms of the employment agreement remain largely unchanged, aside from the tax gross-up provision.
  • 6This filing also serves to attach the amended employment agreement as an exhibit.

Frequently Asked Questions

The primary change is the removal of Arch Capital Group's commitment to reimburse Mr. Iordanou for any excise taxes imposed on 'golden parachute' payments under Section 4999 of the Internal Revenue Code. The company will no longer provide these tax gross-ups.

Yes, the filing states that this amendment aligns with the company's policy, which now eliminates excise tax gross-ups for 'any of its employees'. This indicates a consistent change in compensation practice across the organization.

Under the amended agreement, Mr. Iordanou is set to continue as President and Chief Executive Officer until March 31, 2018, unless his employment is terminated earlier as per the agreement's terms.

No, the filing indicates that the amended employment agreement is otherwise substantially the same as his prior agreement. The focus of the amendment is solely on the elimination of the tax gross-up provision.