8-KLeadership ChangesRegulation FDExhibits & Filings

ARCH CAPITAL GROUP LTD. 8-K Report, Executive Changes (Sep 19, 2017)

Filed September 19, 2017For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) announced significant leadership transitions effective October 1, 2017. Nicolas Papadopoulo has been appointed Chairman and CEO of Arch Worldwide Insurance Group and Chief Underwriting Officer for Property & Casualty Operations, succeeding David McElroy. Mr. Papadopoulo, a long-time executive with the company, will receive a base compensation of $750,000, a target bonus of 100% of base, with a guaranteed minimum bonus of two times base for 2018 and 2019, alongside stock awards and options. He also has the right to purchase $5 million of company stock. David McElroy is transitioning from his current roles to become Executive Chairman of Arch Insurance Group Inc. and Vice Chairman of Arch Worldwide Insurance Group through December 31, 2017. Thereafter, he will transition to a Vice Chairman role and provide consulting services for up to 50 days per year, with a base compensation of $150,000. Maamoun Rajeh has been promoted to Chairman and CEO of Arch Worldwide Reinsurance Group.

Key Highlights

  • 1Leadership transition: Nicolas Papadopoulo appointed Chairman and CEO of Arch Worldwide Insurance Group and Chief Underwriting Officer for P&C Operations.
  • 2Succession planning: David McElroy transitions to Executive Chairman and Vice Chairman roles, then to a consulting capacity, citing a desire to spend more time with family.
  • 3Key Executive Compensation: Mr. Papadopoulo's compensation package includes a $750,000 base salary, a target 100% bonus, and a guaranteed minimum bonus of 2x base for 2018-2019.
  • 4Significant Equity Awards for Mr. Papadopoulo: Includes 5,000 shares, 50,000 stock options with phased vesting, and 15,000 restricted shares vesting over three years.
  • 5Shareholder Opportunity: Mr. Papadopoulo has the right to purchase $5 million of ACGL common stock at the prevailing market price.
  • 6Internal Promotion: Maamoun Rajeh promoted to Chairman and CEO of Arch Worldwide Reinsurance Group.
  • 7Executive Agreement: Mr. Papadopoulo has entered into noncompetition, nonsolicitation, and confidentiality agreements.

Frequently Asked Questions

ACGL announced that Nicolas Papadopoulo will become Chairman and CEO of Arch Worldwide Insurance Group and Chief Underwriting Officer for Property & Casualty Operations, effective October 1, 2017. David McElroy is transitioning from his current roles to Executive Chairman of Arch Insurance Group Inc. and Vice Chairman of Arch Worldwide Insurance Group until December 31, 2017, after which he will serve as Vice Chairman and provide consulting services. Maamoun Rajeh has been promoted to Chairman and CEO of Arch Worldwide Reinsurance Group.

Mr. Papadopoulo's new role comes with a base compensation of $750,000 per year. He is eligible for a discretionary bonus with a target of 100% of his base salary. For calendar years 2018 and 2019, he is guaranteed a minimum bonus of two times his base compensation. He also received significant equity awards, including stock shares, stock options, and restricted shares, with specific vesting schedules.

After December 31, 2017, Mr. McElroy will transition from being an employee to serving as Vice Chairman of Arch Worldwide Insurance Group. He will also provide up to 50 days of consulting services annually to ACGL as requested. His compensation for this role will include a base of $150,000 per year, with eligibility for a discretionary bonus, and potential tax payments as outlined in his Consulting Agreement.

Nicolas Papadopoulo has been granted the right to purchase $5 million of Arch Capital Group Ltd. common stock at the closing market price immediately preceding the purchase. This indicates a significant personal investment and alignment with the company's shareholder interests.