SEC Settles With P&C Insurer Who Allegedly Failed To Disclose CEO Compensation

The Securities and Exchange Commission today announced settled charges against Bermuda-based insurance company Argo Group International Holdings, Ltd. for failing to fully disclose perquisites and benefits provided to its former chief executive officer.

The SEC’s order finds that in its proxy statements for 2014 through 2018, Argo disclosed that it had provided a total of approximately $1.2 million in perquisites and personal benefits, chiefly retirement and financial planning benefits, to its then CEO.

According to the order, Argo failed to disclose over $5.3 million it had paid on the CEO’s behalf, including in filings for 2018 after a shareholder issued a press release alleging undisclosed perks to the CEO. The order finds that the perks Argo paid for, but did not disclose, included personal use of corporate aircraft, helicopter trips and other personal travel, housing costs, transportation for family members, personal services, club memberships, and tickets and transportation to entertainment events.

The order finds that, as a result, Argo understated perks and personal benefits paid to the CEO over this period by more than $1 million per year, or 400%. The CEO resigned from that position in November 2019.

“Even after being made aware of potential inaccuracies in its disclosures related to executive compensation, Argo did not accurately and adequately inform shareholders about the perks and benefits it provided its highest-ranking executive over a five-year period,” said Kelly Gibson, Director of the SEC’s Philadelphia Regional Office. “We continue to focus on whether companies are fully disclosing compensation paid to their top executives and have appropriate internal controls in place to ensure that shareholders receive information to which they are entitled.”

The SEC’s order charges Argo with violating federal securities law provisions concerning proxy solicitation, reporting, books and records, and internal controls. Without admitting or denying the SEC’s findings, Argo consented to the SEC’s cease-and-desist order, which requires Argo to pay a $900,000 civil penalty.

The SEC’s continuing investigation is being conducted by Oreste McClung and Brian Higgins, and supervised by Brendan McGlynn, all of the Philadelphia Regional Office.