Argo Group International Holdings, Ltd., an insurance company based in Bermuda, agreed to settle the charges against it by the Securities and Exchange Commission (SEC).
The Commission alleged that Argo failed to fully disclose the benefits and perquisites it provided to its former chief executive officer (CEO).
In its proxy statements for 2014 until 2018, Argo disclosed that it gave a total of approximately $1.2 million in perquisites and personal benefits, primarily retirement and financial planning benefits to its then CEO.
The insurance company did not disclose more than $5.3 million it paid on behalf of the CEO including personal use of corporate aircraft, helicopter trips other personal travel, housing costs, transportation for family members, personal services, club memberships as well tickets and transportation to entertainment events.
The SEC found that Argo understated the perks and personal benefits paid to its former CEO by $1 million or 400 percent per year during the relevant period.
In 2018, a shareholder in the insurance company issued a press release alleging its disclosure failure related to the matter. The CEO stepped down from his position in November 2019.
Argo agrees to pay $900,000 to settle SEC complaint
According to the SEC, Argo violated the federal securities law provisions regarding proxy solicitation, reporting, books and records, and internal controls.
In a statement, SEC Philadelphia Regional Office Director Kelly Gibson said, “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.”
“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,” she added.
Argo agreed to settle with the SEC without admitting or denying the allegation against it. The insurance company consented to the Commission’s cease-and-desist order, which included payment of a civil penalty of $900,000.