Argo Group Fined Over Perks to ‘Bon Vivant’ CEO

Insurance plan corporation Argo Group Global Holdings has agreed to fork out $900,000 to settle fees that it failed to disclose extra than $5.three million in benefits to its former CEO, which includes own use of company aircraft.

Mark Watson stepped down as CEO in November 2019, shortly just after Argo explained it had been given subpoenas from the U.S. Securities and Trade Commission seeking documents relevant to its disclosures about government payment.

The SEC issued an administrative buy final 7 days getting Argo understated the benefit of benefits it gave Watson from 2014 via 2018 by 400{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d}, disclosing only about $1.two million in its proxy statements when it had basically compensated him extra than $5.three million really worth of extra benefits.

Even just after activist investor Voce Capital Administration accused Argo in a February 2019 letter to shareholders of misdirecting company assets “to guidance the life-style and hobbies of [Watson] at the price of shareholders,” Argo allegedly failed to disclose extra than $1 million really worth of benefits in its April 2019 proxy assertion.

To settle the SEC’s fees, Argo agreed to fork out a $900,000 civil penalty.

Watson turned CEO of the underwriter of specialty insurance and reinsurance goods in 2000 just after investing in predecessor corporation Argonaut Group.

According to the SEC, Argo disclosed benefits compensated to Watson that consisted predominantly of 401(k) and retirement contributions, the imputed benefit of insurance protection, supplemental government retirement prepare advantages, housing and residence go away allowances, healthcare rates and monetary scheduling expert services.

All those similar proxy statements, nevertheless, allegedly did not disclose Argo had compensated for, among other things, Watson’s own use of company aircraft and vehicles, helicopter outings, use of a auto support by family members customers, club and concierge support memberships, and tickets and transportation to sporting, style or other amusement functions.

Voce Capital gave up a proxy fight in Could 2019. In its letter to shareholders, it explained Watson “appears to be really the bon vivant” and that it was “deeply worried that Mr. Watson’s hobbies, pet projects and the cult of identity he seemingly wishes to create for himself have commandeered and corrupted Argo’s priorities.”