Argo Group Fined Over Perks to ‘Bon Vivant’ CEO
Insurance firm Argo Team International Holdings has agreed to pay out $900,000 to settle expenses that it failed to disclose extra than $five.3 million in benefits to its former CEO, together with particular use of company aircraft.
Mark Watson stepped down as CEO in November 2019, soon immediately after Argo reported it experienced gained subpoenas from the U.S. Securities and Trade Fee trying to get documents relevant to its disclosures about government compensation.
The SEC issued an administrative buy past week acquiring Argo understated the price of benefits it gave Watson from 2014 by means of 2018 by four hundred%, disclosing only about $1.two million in its proxy statements when it experienced truly paid him extra than $five.3 million worthy of of more benefits.
Even immediately after activist trader Voce Cash Administration accused Argo in a February 2019 letter to shareholders of misdirecting company belongings “to help the life-style and hobbies of [Watson] at the cost of shareholders,” Argo allegedly failed to disclose extra than $1 million worthy of of benefits in its April 2019 proxy assertion.
To settle the SEC’s expenses, Argo agreed to pay out a $900,000 civil penalty.
Watson turned CEO of the underwriter of specialty coverage and reinsurance solutions in 2000 immediately after investing in predecessor firm Argonaut Team.
According to the SEC, Argo disclosed benefits paid to Watson that consisted predominantly of 401(k) and retirement contributions, the imputed price of coverage protection, supplemental government retirement strategy positive aspects, housing and dwelling leave allowances, health care premiums and monetary organizing companies.
Those people similar proxy statements, however, allegedly did not disclose Argo experienced paid for, between other points, Watson’s particular use of company aircraft and automobiles, helicopter excursions, use of a car or truck company by household customers, club and concierge company memberships, and tickets and transportation to sporting, style or other enjoyment gatherings.
Voce Cash gave up a proxy struggle in Might 2019. In its letter to shareholders, it reported Watson “appears to be rather the bon vivant” and that it was “deeply anxious that Mr. Watson’s hobbies, pet assignments and the cult of persona he evidently needs to develop for himself have commandeered and corrupted Argo’s priorities.”