UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
_____________________________________
Filed by the Registrant x | Filed by a Party other than the Registrant o | ||||||||||
Check the appropriate box: | |||||||||||
o | Preliminary Proxy Statement | ||||||||||
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||||||||
x | Definitive Proxy Statement | ||||||||||
o | Definitive Additional Materials | ||||||||||
o | Soliciting Material Pursuant to §240.14a-12 | ||||||||||
ENSTAR GROUP LIMITED
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Dear Fellow Shareholders:
On behalf of Enstar Group Limited's Board of Directors, I am pleased to invite you to attend our 2022 Annual General Meeting of Shareholders, which will be held virtually on Wednesday, June 1, 2022 at 9:00 a.m. Atlantic time, when we will vote on the matters described in the notice of the Annual General Meeting and the proxy statement. In the interim, I encourage you to read our 2021 Annual Report on Form 10-K to learn more about our successes during the year and to view our first-ever year-end results video.
2021 was a busy and productive year for Enstar. As a global run-off market leader and provider of capital release solutions, we assumed $3.8 billion of new legacy business through seven completed transactions. Our net loss reserves increased by 35% from the prior year as a result of these transactions. We continue to be the partner of choice for the world’s leading insurance groups seeking the transfer of large portfolios of risk.
We also moved forward several strategic initiatives, including the re-alignment of our investment portfolio and crystallizing much of our 2020 investment gains in the InRe Fund, extending our Environmental, Social, and Governance (“ESG”) work, completing a $500 million senior notes transaction qualifying as Tier 3 eligible capital, and returning capital to shareholders. The latter included the repurchase of the Hillhouse Group’s entire 26.3% holding in Enstar at a discount to book value.
Meanwhile, our book value per share increased by 10.6% over the year, resulting in a three-year average increase in book value per share of 27%. While Return on Equity ("ROE") for the year of 7.1% was lower than our expectations, our three-year average ROE was 24%. Although most financial hurdles in our executive compensation plan were missed, our Annual Incentive Program also rewards individual strategic and operational successes, many of which were achieved in 2021 and further strengthened our business. These objectives were designed to drive progress across our key pillars of innovation, discipline, financial optimization and operational excellence.
The Board’s priorities for 2021 included the development of an ESG strategy for Enstar. Notably, we have selected three core focus areas of Climate Change, Investments, and Human Capital, and published our inaugural Corporate Sustainability Report in March 2022. Our Compensation Committee adopted a new charter as the Human Resources and Compensation Committee and now actively oversees human capital initiatives. While there is still more to do, we are pushing forward in the right direction and committed to demonstrating continued progress.
On executive compensation, we were not satisfied with the shareholder voting results on our executive compensation proposal last year, and Rick Becker and I met with shareholders this winter to solicit feedback. We understand the views expressed and are incorporating them into our program design and committee discussions.
Since our 2021 Annual General Meeting, we added two new female directors. I am very pleased to welcome Sharon Beesley, CEO of a prominent Bermuda law firm and formerly a Board member at the Bermuda Monetary Authority, and Orla Gregory, who will be familiar to you as our Acting Chief Financial Officer and Chief Operating Officer. Our proxy statement includes Board diversity details, which show that already a third of our directors self-identify as female or as an underrepresented minority. We will also continue to work towards our stated target for gender diversity of 30%.
I encourage you to have your say by voting as soon as possible. You can do so over the internet, by telephone, or, if you received a proxy/voting instruction card, by marking, dating, and signing it, and returning it by mail. I hope you virtually attend the Annual General Meeting, and I thank you for your continued support of Enstar.
Sincerely, | ||
 | ||
| Robert J. Campbell | ||
| Chairman of the Board | ||
NOTICE OF 2022 ANNUAL GENERAL MEETING OF SHAREHOLDERS
¿ | WHEN Wednesday, June 1, 2022 at 9:00 a.m. Atlantic time (8:00 a.m. Eastern time) | : | WHERE The Annual General Meeting can be accessed virtually via the Internet by visiting www.virtualshareholdermeeting.com/ESGR2022 | |||||||||||
| ITEMS OF BUSINESS | ||||||||||||||
1.To vote on a proposal to amend the Company's Amended and Restated 2016 Equity Incentive Plan to increase the number of shares reserved for issuance pursuant to awards granted under the plan.
2.To vote on a proposal to elect four Class I directors and four Class III directors nominated by our Board to hold office until 2023.
3.To hold an advisory vote to approve executive compensation.
4.To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2022 and to authorize the Board of Directors, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm.
| ANNUAL MEETING DETAILS | ||||||||||||||
Only holders of record of our voting ordinary shares at the close of business on April 4, 2022 are entitled to notice of and to vote at the meeting.
You are cordially invited to attend the virtual Annual General Meeting. This year’s Annual General Meeting will be held solely by means of a virtual-only meeting over live webcast. So long as you were a holder of record of our voting ordinary shares as of the close of business on April 4, 2022, you or your proxy holder can attend, submit your questions, and vote your shares electronically at the virtual Annual General Meeting by visiting www.virtualshareholdermeeting.com/ESGR2022 and using your control number included in the proxy materials. During the meeting, you will be able to ask questions and will have the opportunity to vote to the same extent as you would at an in-person meeting of shareholders.
To ensure that your vote is counted at the meeting, please vote as promptly as possible. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your vote by proxy is revocable at your option in the manner described in the proxy statement.
By Order of the Board of Directors,
 | ||
| Audrey B. Taranto | ||
| General Counsel and Corporate Secretary | ||
| Hamilton, Bermuda | ||
| April 21, 2022 | ||
Important notice regarding the availability of proxy materials for the Annual General meeting of Shareholders to be held on June 1, 2022. This notice of meeting, the proxy statement, the proxy card and the annual report to shareholders for the year ended December 31, 2021 are available at https://investor.enstargroup.com/annual-reports.
TABLE OF CONTENTS
| Change in Control and Post-Termination Payments | |||||
| Shareholder Proposals for the 2023 Annual General Meeting | |||||
Proxy Statement
Summary
Summary
To assist you in reviewing our proxy statement, we have summarized several key topics below. The following description is only a summary and does not contain all of the information that you should consider before voting. For more complete information, you should carefully review the rest of our proxy statement, as well as our Annual Report to Shareholders for the year ended December 31, 2021.
ANNUAL GENERAL MEETING OF SHAREHOLDERS INFORMATION
¿ | WHEN Wednesday, June 1, 2022 at 9:00 a.m. Atlantic time (8:00 a.m. Eastern time) | : | WHERE The Annual General Meeting can be accessed virtually via the Internet by visiting www.virtualshareholdermeeting.com/ESGR2022 | |||||||||||
| ! | RECORD DATE April 4, 2022 | ü | VOTING Your vote is very important and we urge you to vote as soon as possible. See Question and Answer No. 9 for voting instructions | |||||||||||
VOTING MATTERS
| Proposal | Board of Directors’ Vote Recommendation | Page References | |||||||||
| 1 | Approval of an amendment to the Company's Amended and Restated 2016 Equity Incentive Plan to increase the number of shares reserved for issuance pursuant to awards granted under the plan. | FOR | Page 80 (Proposal No. 1) | ||||||||
| 2 | Election of Directors: To vote on a proposal to elect four Class I directors and four Class III directors nominated by our Board to hold office until 2023 | FOR the Director Nominees | Page 7 (Nominee Biographies) Page 89 (Proposal No. 2) | ||||||||
| 3 | Advisory Approval of Enstar’s Executive Compensation | FOR | Page 48 (Compensation Discussion and Analysis) Page 65 (Summary Compensation Table) Page 90 (Proposal No. 3) | ||||||||
| 4 | Ratification of PricewaterhouseCoopers LLP as the Independent Registered Public Accounting Firm for 2022 | FOR | Page 91 (Proposal No. 4) Page 92 (Audit and Non-Audit Fees Table) | ||||||||
Enstar Group Limited / i / 2022 Proxy Statement | ||||||||
PROXY STATEMENT SUMMARY
BOARD COMPOSITION
The following describes our current Board composition and current committee assignments of each of our directors with ages and tenures calculated as of April 21, 2022.
| Director Since | Other Public Board | Committee Membership | |||||||||||||||||||||||||||||||||
| Name | Primary Occupation | Age | Independent | AC | HC | NC | RC | IC | EC | ||||||||||||||||||||||||||
| Non-Management Directors | |||||||||||||||||||||||||||||||||||
| B. Frederick Becker | Non-Executive Director | 2015 | 75 | 0 | Yes | l E | C | C | |||||||||||||||||||||||||||
| Sharon A. Beesley | CEO, BeesMont Law Limited and BeesMont Consultancy Limited | 2021 | 65 | 0 | Yes | l | |||||||||||||||||||||||||||||
Robert Campbell (Chair) | Partner, Beck Mack & Oliver | 2007 | 73 | 1 | Yes | C E | l | l | C | C | |||||||||||||||||||||||||
| James Carey | Managing Director, Stone Point Capital | 2013 | 55 | 1 | No | l | |||||||||||||||||||||||||||||
| Susan L. Cross | Former Global Chief Actuary, XL Group (now AXA XL) | 2020 | 62 | 1 | Yes | l E | l | ||||||||||||||||||||||||||||
| Hans-Peter Gerhardt | Former CEO of Asia Capital Re, PARIS RE and AXA Re | 2015 | 66 | 0 | Yes | l | l | l | |||||||||||||||||||||||||||
| W. Myron Hendry | Former Executive Vice President and Chief Platform Officer, XL Group (now AXA XL) | 2019 | 73 | 0 | Yes | l | l | ||||||||||||||||||||||||||||
| Hitesh Patel | Non-Executive Director | 2015 | 61 | 0 | Yes | l E | l | C | |||||||||||||||||||||||||||
| Poul Winslow | Senior Managing Director, Canada Pension Plan Investment Board | 2015 | 56 | 0 | Yes | l | l | l | |||||||||||||||||||||||||||
| Management Directors | |||||||||||||||||||||||||||||||||||
| Orla Gregory | Acting CFO and COO, Enstar Group Limited | 2022 | 48 | 0 | No | ||||||||||||||||||||||||||||||
| Paul O’Shea | President, Enstar Group Limited | 2001 | 64 | 0 | No | ||||||||||||||||||||||||||||||
| Dominic Silvester | CEO, Enstar Group Limited | 2001 | 61 | 0 | No | l | l | ||||||||||||||||||||||||||||
C = Committee Chair AC = Audit Committee RC = Risk Committee E = Audit Committee Financial Expert HC = Human Resources and Compensation Committee IC = Investment Committee l = Committee Member NC = Nominating and Governance Committee EC = Executive Committee | |||||||||||||||||||||||||||||||||||
| Range of Tenures | Mix of Ages | Independent Oversight | ||||||||||||||||||
| <5 | n n n n | 45-59 | n n n | n n n n n n n n n n n n | ||||||||||||||||
| 5-10 | n n n n n | 60-65 | n n n n n | 8 of 12 independent directors | ||||||||||||||||
| >10 | n n n | 66+ | n n n n | n n n n n n | ||||||||||||||||
| Average Tenure: | Average Age: | 4 of 6 independent committees | ||||||||||||||||||
8.3 Years | 63.3 Years | |||||||||||||||||||
Enstar Group Limited / ii / 2022 Proxy Statement | ||||||||
PROXY STATEMENT SUMMARY
CORPORATE GOVERNANCE HIGHLIGHTS
Our Corporate Governance Policies Reflect Feedback From Stakeholders
In early 2022, we sought feedback from our large shareholders, speaking to the holders of approximately 31% of our outstanding voting ordinary shares, as described on page 50. We also spoke to one major proxy advisory firm and invited conversations with another major proxy advisory firm and with several additional significant shareholders who advised that they did not feel a need to meet with us this year. Directors whose firms represent an additional 14% of our outstanding voting ordinary shares are actively involved in our Board's oversight of compensation and governance matters, and were not included in the engagement program.
Many of our corporate governance practices are a result of valuable feedback and collaboration with our shareholders and other stakeholders who have provided important external viewpoints that help inform our decisions and our strategy. Highlights of these practices are listed below:
Board Diversity The Board amended its diversity policy in 2021 in response to shareholder feedback to strengthen its commitment to improving diversity amongst its members by imposing aspirational diversity targets. Following the recent appointments of Sharon A. Beesley in September 2021 and Orla Gregory in February 2022, 33% of our Board is comprised of persons who self-identify as female or as an underrepresented minority. | Board Declassification In 2021, the Board asked shareholders to approve an amendment to our bye-laws to declassify the Board, following feedback received during previous shareholder engagement programs expressing a preference to elect directors annually. | ESG Initiatives We are placing increasing emphasis on the importance of ESG to deliver the Company’s strategy for the benefit of our shareholders while recognizing our role in the wider community, and providing stakeholders with regular and transparent reporting regarding the Company's ESG impacts. In March 2022, we released our inaugural Corporate Sustainability Report, as well as a SASB Report and our TCFD Report, each for the year ended December 31, 2021. | ||||||||||||
| Independent Oversight | ■8 of 12 of our directors are independent (approximately 67% of our Board) ■Our Board and each of its committees are led by independent directors ■Our Audit Committee, Human Resources and Compensation Committee, Nominating and Governance Committee, and Risk Committee are entirely independent ■We hold regular executive sessions of independent directors | ||||
| Board Composition | ■We have an ongoing Board succession planning process with a focus on diversity (3 diverse directors were elected in the last two years) ■We have a distribution of director tenures and ages ■We conduct annual Board and committee assessments ■We have established director orientation and ongoing director education programs ■Our directors are not “over-boarded" - none of our current directors serve on the Board of more than one other publicly traded company | ||||
| Shareholder Rights | ■We removed our classified Board structure in 2021 with all directors to be elected annually beginning in 2023 ■We have a majority voting standard in uncontested elections of directors ■We do not have a shareholder rights plan (“poison pill”) ■We have no super-majority voting requirements other than as required by Bermuda law ■Our equity incentive plan prohibits re-pricing of underwater stock options and SARs without shareholder approval | ||||
Good Governance Practices | ■We have rigorous Share Ownership Guidelines for executives and non-employee directors ■We prohibit hedging Company shares ■Our stringent Clawback Policy is applicable to directors and executives ■Our global Code of Conduct that requires all employees and directors to adhere to high ethical standards ■We conduct an annual risk assessment of our compensation programs ■Our Human Resources and Compensation Committee periodically engages an independent compensation consultant ■Our shareholder engagement program solicits feedback on governance and compensation programs ■Our shareholder advisory vote on executive compensation is held annually | ||||
Enstar Group Limited / iii / 2022 Proxy Statement | ||||||||
PROXY STATEMENT SUMMARY
2021 BUSINESS HIGHLIGHTS
Enstar is a multi-faceted insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. Select highlights of 2021 included:
| $437m | |||||||||||
| Net earnings of $437m in 2021 driven by investment returns and $283 million of favorable prior period development from our claims management strategies | |||||||||||
| 10.4% | Growth in book value per share grew over 10.4% to $316.34 as of December 31, 2021 | |||||||
| 7.1% | Return on opening equity for the year | |||||||
| $3.8b | 2.5% | ||||||||||||||||||||||
| Assumed $3.8b of liabilities assumed in 2021 through the execution of 7 transactions | Total investment return in 2021 | ||||||||||||||||||||||
| $6.3b | Total shareholders' equity as of December 31, 2021 | 14% | Since 2010 Enstar's compounded annual growth rate in diluted book value per share has been 14% | |||||||||||
| $21.7b | Total investable assets were $21.7bn as of December 31, 2021 | $34.8b | From inception, Enstar Group has completed or announced transactions to acquire $34.8bn in gross loss reserves and defendant and asbestos and environmental liabilities and has successfully run-off $17.5bn of those liabilities | |||||||||||
2021 PERFORMANCE VERSUS PEERS
Source: S&P Global Market Intelligence for peer company data. Peer group includes the companies selected as our peers by our Human Resources and Compensation Committee, as described in "Compensation Discussion and Analysis - Peer Group."
Source: S&P Global Market Intelligence for peer company data. Peer group includes the companies selected as our peers by our Human Resources and Compensation Committee, as described in "Compensation Discussion and Analysis - Peer Group."Enstar Group Limited / iv / 2022 Proxy Statement | ||||||||
PROXY STATEMENT SUMMARY
EXECUTIVE COMPENSATION
Philosophy: We are a rapidly growing company operating in an extremely competitive and changing industry. Our compensation program is based on these core principles: | ||
| 1 | Incentivize performance consistent with clearly defined corporate objectives | 3 | Competitively compensate our executives | |||||||||||
| 2 | Align our executives’ long-term interests with those of our shareholders | 4 | Retain and attract qualified executives who are able to contribute to our long-term success | |||||||||||
Key Compensation Decisions for 2021 Performance Year
Our Human Resources and Compensation Committee made the following key compensation decisions:
Annual Incentive Awards:
| Corporate Financial Objectives (50% Weighting) | Operational Performance Objectives (50% Weighting) | |||||||
•"Threshold" level of achievement was met on one Company Financial Objective, growth in fully diluted book value per share. •Financial Objectives for return on equity and Non-GAAP Operating Income were not achieved. •This drove substantially lower awards in 2021, with the Company Financial portion of the plan paying out at less than 30% of each executive's target opportunity. | •Strategic initiatives were progressed and many operational goals were met. •Individual Operational Performance Objectives were achieved largely between "partial" and "target" levels of opportunity. •The Acting CFO & COO exceeded several objectives and received payment above "target," as she assumed Acting CFO duties during the year. | |||||||
Long-term Incentive Awards:
| CEO / President / Acting CFO & COO | •No new long-term equity incentive awards were granted to these executive officers following grants made to them in 2020. | ||||
| CCO / CIO | •Granted long term equity incentive awards to the CCO and CIO consisting of 70% performance share units ("PSUs") and 30% restricted share units ("RSUs"). •The ultimate value of the PSUs is subject to the achievement by the Company of certain levels of growth in three-year fully diluted book value per share and three-year average annual operating ROE. •These executives also received retention RSU awards during 2021 that cliff vest after three years during 2021. | ||||
Results of Say-on-Pay Vote
At last year's annual general meeting held on June 9, 2021, our shareholders approved the compensation of our executive officers with 63% of the total votes cast in favor of the proposal. This was a significant decrease from the 99% approval that we received at the prior annual general meeting. The Board and the Human Resources and Compensation Committee find the results disappointing and are in the process of revising elements of the Company's compensation programs, considering shareholder feedback.
Enstar Group Limited / v / 2022 Proxy Statement | ||||||||
PROXY STATEMENT SUMMARY
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to our financial condition, results of operations, business strategies, ESG objectives, operating efficiencies, competitive positions, growth opportunities, plans and objectives of our management, as well as the markets for our securities and the insurance and reinsurance sectors in general. Statements that include words such as "estimate," "project," "plan," "intend," "expect," "anticipate," "believe," "would," "should," "could," "seek," "may" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. Forward-looking statements may appear throughout this proxy statement, including in the Chairman's letter and Annual Incentive Program section of Compensation Discussion & Analysis. These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Important risk factors regarding Enstar can be found under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021. Furthermore, Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law.
Enstar Group Limited / vi / 2022 Proxy Statement | ||||||||
Questions
and Answers
and Answers
| 1. WHY AM I RECEIVING THESE PROXY MATERIALS? | ||
We have made these proxy materials available to you on the internet or, in some cases, have delivered printed copies of these proxy materials to you by mail in connection with the solicitation of proxies by the Board of Directors (the "Board") of Enstar Group Limited (the "Company") for use at the 2022 Annual General Meeting of Shareholders of the Company to be held on Wednesday, June 1, 2022 at 9:00 a.m. Atlantic time. This year’s Annual General Meeting will again be held via the internet and will be a completely virtual meeting hosted by members of our management team in Bermuda. These proxy materials are first being sent or given to shareholders on April 21, 2022. You are invited to attend the virtual Annual General Meeting and are requested to vote on the proposals described in this proxy statement.
| 2. WHY DID I RECEIVE A ONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PROXY MATERIALS? | ||
Pursuant to rules adopted by the Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials via the internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") to our shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy are included in the Notice. In addition, shareholders may request proxy materials in printed form by mail or electronically by email on an ongoing basis.
We believe that providing access to our proxy materials via the internet will expedite shareholders’ receipt of materials, while lowering costs and reducing the environmental impact of our Annual General Meeting because we will print and mail fewer full sets of materials.
| 3. WHAT IS INCLUDED IN THESE PROXY MATERIALS? | |||||
These "proxy materials" include this proxy statement, our Annual Report to Shareholders for the year ended December 31, 2021 and, if you received printed copies of the proxy materials by mail, the proxy card. We have included the Annual Report for informational purposes and not as a means of soliciting your proxy.
Enstar Group Limited / 1 / 2022 Proxy Statement | ||||||||
QUESTIONS AND ANSWERS
| 4. WHAT MATTERS ARE BEING VOTED ON AT THE ANNUAL GENERAL MEETING AND WHAT ARE THE BOARD'S VOTING RECOMMENDATIONS? | |||||
Shareholders will vote on the following proposals at the Annual General Meeting:
| Proposal | Board of Directors’ Vote Recommendation | Page References | |||||||||
| 1 | Approval of an amendment to the Company's Amended and Restated 2016 Equity Incentive Plan to increase the number of shares reserved for issuance pursuant to awards granted under the plan. | FOR | Page 80 (Proposal No. 1) | ||||||||
| 2 | Election of Directors: To vote on a proposal to elect four Class I directors and four Class III directors nominated by our Board to hold office until 2023 | FOR the Director Nominees | Page 7 (Nominee Biographies) Page 89 (Proposal No. 2) | ||||||||
| 3 | Advisory Approval of Enstar’s Executive Compensation | FOR | Page 48 (Compensation Discussion and Analysis) Page 65 (Summary Compensation Table) Page 90 (Proposal No. 3) | ||||||||
| 4 | Ratification of PricewaterhouseCoopers LLP as the Independent Registered Public Accounting Firm for 2022 | FOR | Page 91 (Proposal No. 4) Page 92 (Audit and Non-Audit Fees Table) | ||||||||
| 5. HOW CAN I GET ELECTRONIC ACCESS TO THE PROXY MATERIALS? | |||||
The Notice includes instructions regarding how to (i) view on the internet our proxy materials for the Annual General Meeting and (ii) instruct us to send future proxy materials to you by email. Our proxy materials are also available on our website under "Annual General Meeting Materials" at https://investor.enstargroup.com/annual-reports.
Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents to you. If you choose to receive future proxy materials by email, you will receive an email message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect until you terminate it.
| 6. WHO MAY VOTE AT THE ANNUAL GENERAL MEETING? | |||||
Only holders of record of our voting ordinary shares as of the close of business on April 4, 2022 (the "record date") are entitled to notice of and to attend and vote at the Annual General Meeting. As used in this proxy statement, the term "ordinary shares" does not include our non-voting convertible common shares. As of the record date, there were 16,506,173 ordinary shares issued and outstanding and entitled to vote at the Annual General Meeting, which number includes 1,424 unvested restricted shares. Except as set forth in our bye-laws, each ordinary share entitles the holder thereof to one vote.
| 7. WHAT IS THE DIFFERENCE BETWEEN A SHAREHOLDER OF RECORD AND A BENEFICIAL OWNER OF SHARES HELD IN THE STREET NAME? | |||||
Shareholder of Record. If your shares are represented by certificates or book entries in your name so that you appear as a shareholder on the records of American Stock Transfer & Trust Company, our stock transfer agent, you are considered the shareholder of record with respect to those shares, and the Notice or, in some cases, the proxy materials, were sent directly to you. If you request printed copies of the proxy materials, you will also receive a proxy card.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar institution, then you are the beneficial owner of shares held in street name and the Notice was forwarded to you by that institution. The institution holding your account is considered the shareholder of record
Enstar Group Limited / 2 / 2022 Proxy Statement | ||||||||
QUESTIONS AND ANSWERS
for purposes of voting at the Annual General Meeting. As a beneficial owner, you have the right to instruct that institution on how to vote the shares held in your account.
| 8. WHAT DO I DO IF I RECEIVED MORE THAN ONE NOTICE OR PROXY CARD? | |||||
If you receive more than one Notice or proxy card because you have multiple accounts, you should provide voting instructions for all accounts referenced to be sure all of your shares are voted.
| 9. HOW DO I VOTE? | |||||
We hope that you will be able to attend the virtual Annual General Meeting. Whether or not you expect to attend the Annual General Meeting, we urge you to vote your shares at your earliest convenience by one of the methods described below, so that your shares will be represented.
Shareholders of record can vote any one of these ways:
VIA THE INTERNET : | Before the Annual General Meeting: You may vote by proxy via the internet by following the instructions provided in the Notice. At the Annual General Meeting: You may vote your shares electronically during the meeting by visiting www.virtualshareholdermeeting.com/ESGR2022. To enter the meeting, holders will need the control number that is printed in the box marked by the arrow on the Notice. We recommend logging in at least 15 minutes before the meeting to ensure you are logged in when the meeting starts. | |||||||
BY MAIL + | If you received printed copies of the proxy materials, you may vote by proxy by filling out the proxy card and sending it back in the envelope provided. | |||||||
BY TELEPHONE ) | You may vote by proxy by calling the telephone number found on the internet voting site or on the proxy card, if you received a printed copy of the proxy materials. | |||||||
If you own shares in street name, you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Internet and/or telephone voting also will be offered to shareholders owning shares through most banks and brokers. If you own shares in street name and you wish to attend and/or vote your shares at the virtual Annual General Meeting, you must (i) obtain a legal proxy from the institution that holds your shares, (ii) obtain your control number so that you may access the webcast and (iii) attend the Annual General Meeting, or permit a personal representative with the legal proxy, to vote at the virtual Annual General Meeting. You should contact your bank or brokerage account representative to learn how to obtain a legal proxy.
| 10. WHAT IS THE VOTING DEADLINE IF VOTING BY INTERNET OR TELEPHONE? | |||||
If you vote by internet (before the Annual General Meeting) or by telephone, you must transmit your vote by 11:59 p.m. Eastern time on May 31, 2022.
| 11. WHY IS THE ANNUAL GENERAL MEETING BEING WEBCAST ONLINE? | |||||
Due to the ongoing impact of the COVID-19 pandemic and to support the health and safety of our shareholders and other participants at the Annual General Meeting, this year’s meeting will be a virtual meeting of shareholders held via a live audio webcast. The virtual meeting will provide shareholders with the same rights as a physical meeting.
Enstar Group Limited / 3 / 2022 Proxy Statement | ||||||||
QUESTIONS AND ANSWERS
| 12. HOW CAN I ATTEND AND PARTICIPATE IN THE VIRTUAL ANNUAL GENERAL MEETING? | |||||
You may attend the virtual Annual General Meeting if you were an Enstar shareholder of record as of the close of business on April 4, 2022 or you hold a valid proxy for the Annual General Meeting. You may attend the meeting by accessing the webcast of the Annual General Meeting, where you will be able to listen to the meeting live, submit questions, and vote online. To do so, you will need to visit www.virtualshareholdermeeting.com/ESGR2022 and use your control number provided in the proxy materials to gain access to the website. If your shares are held in street name, you should follow the directions set forth above in the “How do I vote?” section. If you do not have your control number, you will not be able to join the Annual General Meeting, vote at the Annual General Meeting, or ask questions or access the list of shareholders as of the record date at the Annual General Meeting. If you attend the virtual Annual General Meeting by participating in the webcast, you will also be able to cast your vote, or revoke a previous vote, during the Annual General Meeting. The meeting webcast will begin promptly at 9:00 a.m. Atlantic time (8:00 a.m. Eastern time). We encourage you to access the meeting prior to the start time. Online check-in will begin at 8:45 a.m. Atlantic time (7:45 a.m. Eastern time), and you should allow ample time for the check-in procedures.
| 13. CAN I ASK QUESTIONS AT THE ANNUAL GENERAL MEETING? | |||||
Yes, shareholders of record as of the record date will be able to ask questions by joining the virtual Annual General Meeting and typing their question in the box in the Annual General Meeting portal. To help ensure that we have a productive and efficient meeting, and in fairness to all those in attendance, shareholders will also find posted our rules of conduct for the Annual General Meeting when logging in prior to the start of the meeting. In accordance with the rules of conduct, we ask that shareholders limit their remarks to one brief question or comment that is relevant to the Annual General Meeting or our business and that such remarks are respectful of fellow shareholders and meeting participants. Questions may be grouped by topic by management with a representative question read aloud and answered. In addition, questions may be deemed to be out of order if they are, among other things, irrelevant to our business, repetitious of statements already made, or in furtherance of the speaker’s own personal, political or business interests. Questions will be addressed in the Q&A portion of the Annual General Meeting.
| 14. WHAT IF I NEED TECHNICAL ASSISTANCE ACCESSING OR PARTICIPATING IN THE ANNUAL GENERAL MEETING? | |||||
If you encounter any difficulties accessing the Annual General Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual General Meeting login page.
| 15. WHAT IS THE QUORUM REQUIREMENT FOR THE ANNUAL GENERAL MEETING? | |||||
Two or more shareholders present in person or by proxy and entitled to vote at least a majority of the shares entitled to vote at the meeting constitute a quorum for the transaction of business at the meeting. Abstentions and broker non-votes will be included in determining the presence of a quorum at the meeting. A broker non-vote occurs when a broker, bank or other nominee does not have discretionary voting power for a particular proposal and has not received voting instructions from the beneficial owner for that proposal and, as a result, the institution that holds the shares is prohibited from voting those shares. Shares that are properly voted on the internet or by telephone or for which proxy cards are properly executed and returned, but lacking voting directions, will be counted toward the presence of a quorum. Virtual attendance at the Annual General Meeting also constitutes presence in person for purposes of a quorum.
| 16. HOW ARE PROXIES VOTED? | |||||
Shares that are properly voted on the internet or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual General Meeting in accordance with the directions given or, in the absence of directions, in accordance with the Board’s recommendations as set forth in "What are the Board’s voting
Enstar Group Limited / 4 / 2022 Proxy Statement | ||||||||
QUESTIONS AND ANSWERS
recommendations?" above. If any other business is brought before the meeting, proxies will be voted, to the extent permitted by applicable law, in accordance with the judgment of the persons voting the proxies.
The manner in which your shares may be voted depends on how your shares are held. If you own shares of record, you may vote by proxy, meaning you authorize individuals named on the proxy to vote your shares. If you do not vote by proxy or in person at the Annual General Meeting, your shares will not be voted. If you own shares in street name, you may instruct the institution holding your shares on how to vote your shares. If you do not provide voting instructions, the institution may nevertheless vote your shares on your behalf with respect to the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022, but not on any other matters being considered at the meeting.
| 17. WHAT ARE THE VOTING REQUIREMENTS TO APPROVE EACH OF THE PROPOSALS? | |||||
| Proposal | Voting Requirements | Effect of Abstentions | Broker Discretionary Voting Allowed? | Effect of Broker Non-Votes | |||||||||||||
| 1 | Approval of an amendment to the Company's Amended and Restated 2016 Equity Incentive Plan to increase the number of shares reserved for issuance pursuant to awards granted under the plan. | Affirmative Vote of Majority of Votes Cast | No effect on outcome | No | No effect on outcome | ||||||||||||
| 2 | Election of Directors: To vote on a proposal to elect four Class I directors and four Class III directors nominated by our Board to hold office until 2023 | Affirmative Vote of Majority of Votes Cast | No effect on outcome | No | No effect on outcome | ||||||||||||
| 3 | Advisory Approval of Enstar’s Executive Compensation | Affirmative Vote of Majority of Votes Cast (to be approved on an advisory basis) | No effect on outcome | No | Not applicable | ||||||||||||
| 4 | Ratification of PricewaterhouseCoopers LLP as the Independent Registered Public Accounting Firm for 2022 | Affirmative Vote of Majority of Votes Cast | No effect on outcome | Yes | Not applicable | ||||||||||||
Each of the proposals to be voted on at the meeting is adopted by a majority of votes cast (as indicated in the table above), which means that a proposal must receive more votes "for" than votes "against" to be adopted. For the director election in Proposal 2, each nominee must receive more votes "for" than votes "against" to have a seat on the Board. Abstentions and broker non-votes are not considered votes for the purposes of any of the above listed proposals, and therefore have no effect on the election of the director nominees or the adoption of any of the other proposals.
| 18. CAN I CHANGE MY VOTE AFTER I HAVE VOTED? | |||||
You may revoke your proxy and change your vote at any time before the final vote at the Annual General Meeting. You may vote again on a later date (before the Annual General Meeting) via the internet or by telephone (in which case only your latest internet or telephone proxy submitted prior to 11:59 p.m. Eastern time on May 31, 2022 will be counted), by filling out and returning a new proxy card bearing a later date, or by attending the Annual General Meeting and voting during the webcast. However, your attendance at the Annual General Meeting will not automatically revoke your proxy unless you vote again at the Annual General Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation prior to the Annual General Meeting to our Corporate Secretary at the mailing address of our principal executive office: Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX Bermuda.
Enstar Group Limited / 5 / 2022 Proxy Statement | ||||||||
QUESTIONS AND ANSWERS
| 19. WHO IS PAYING FOR THE COST OF THIS PROXY SOLICITATION? | |||||
We will bear the cost of preparing and soliciting proxies, including the reasonable charges and expenses of brokerage firms or other nominees for forwarding proxy materials to the beneficial owners of our ordinary shares. In addition to solicitation by mail, certain of our directors, officers and employees may solicit proxies personally or by telephone or other electronic means without extra compensation, other than reimbursement for actual expenses incurred in connection with the solicitation.
Enstar Group Limited / 6 / 2022 Proxy Statement | ||||||||
Corporate
Governance
Governance
BOARD OF DIRECTORS
We are in the process of declassifying our Board after our shareholders approved management's proposal to transition to one-year terms for our directors at the 2021 annual general meeting. Our Board is currently divided into three classes designated Class I, Class II and Class III. The term of office for each of our Class I and Class III directors expires at this year’s Annual General Meeting. The term of office for each of our Class II directors expires at our annual general meeting in 2023.
Historically, at each annual general meeting, the successors of the class of directors whose term expires at that meeting were elected to hold office for a term expiring at the annual general meeting to be held in the third year following the year of their election. However, going forward all of our directors will be elected to one-year terms. This means that the Class I and Class III directors will stand for reelection this year at the 2022 Annual General Meeting and, if elected, will hold office until the 2023 annual general meeting. The Class II directors will stand for reelection next year at the 2023 annual general meeting along with the prior Class I and Class III directors, but such directors will no longer belong to a specific class, as we will have fully transitioned to one-year terms for all of our directors.
The Board believes that all of its directors have demonstrated professional integrity, ability and judgment, as well as leadership and strategic management abilities, and have each performed well in their respective time served as directors and contributed to the overall effectiveness of our Board.
Enstar Group Limited / 7 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Particular attributes that are significant to each individual director’s selection to serve on the Board are described below.
Nominees
| Dominic Silvester | |||||
 | Biographical Information Dominic Silvester has served as a director and the Chief Executive Officer of the Company since its formation in 2001. In 1993, Mr. Silvester began a business venture in Bermuda to provide run-off services to the insurance and reinsurance industry. In 1995, the business was assumed by Enstar Limited, which is now a subsidiary of the Company, and for which Mr. Silvester has since then served as Chief Executive Officer. Prior to co-founding the Company, Mr. Silvester served as the Chief Financial Officer of Anchor Underwriting Managers Limited from 1988 until 1993. Skills and Qualifications Company leader; industry expertise; corporate strategy As a co-founder and CEO of the Company, Mr. Silvester contributes to the Board his intimate knowledge of the Company and the run-off industry. He is well known in the industry and is primarily responsible for identifying and developing our business strategies and acquisition opportunities on a worldwide basis. Mr. Silvester has served as our CEO since the Company’s inception, demonstrating his proven ability to manage and grow the business. | ||||
Director Since: 2001 Age: 61 Class: III Enstar Committees: Investment, Executive Enstar Officer Title: Chief Executive Officer Bermuda resident; UK citizen | |||||
| Robert Campbell | |||||
 | Biographical Information Robert Campbell was appointed as the independent Chairman of the Board in November 2011. Mr. Campbell has been a Partner with the investment advisory firm of Beck, Mack & Oliver, LLC since 1990. Certain Other Directorships Mr. Campbell is a director and chairman of the audit committee of AgroFresh Solutions, Inc. (formerly Boulevard Acquisition Corp.), a publicly traded global agricultural technologies company. From 2015 through 2017, he was also a director of Boulevard Acquisition Corp. II, a blank check company that completed its initial public offering in September 2015. He previously served as a director of Camden National Corporation, a publicly traded company, from 1999 to 2014. Skills and Qualifications Financial, accounting, and investment expertise; leadership skills Mr. Campbell brings to the Board his extensive understanding of finance and accounting, which he obtained through over 40 years of analyzing financial services companies and which is very valuable in his role as chairman of our Audit Committee. In addition, Mr. Campbell’s investment management expertise makes him a key member of our Investment Committee, of which he serves as chairman. Mr. Campbell continues to spend considerable time and energy in his role, which is significant to the leadership and function of our Board. | ||||
Director Since: 2007 Age: 73 Class: I Enstar Committees: Audit (Chair), Human Resources and Compensation, Investment (Chair), Nominating and Governance, Executive (Chair) US resident; US citizen | |||||
Enstar Group Limited / 8 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
| Sharon A. Beesley | |||||
 | |||||
Biographical Information Ms. Beesley currently serves as the Chief Executive Officer and senior partner of BeesMont Law Limited, a Bermuda-based commercial law firm, which she established in 2008. She also serves as Chief Executive Officer of BeesMont Consultancy Limited, a Bermuda-based consultancy business, a position she has held since 2000. Ms. Beesley previously served as a Director on the Board of the Bermuda Monetary Authority from 2016 to 2021. Prior to 2000, Ms. Beesley was engaged in private legal practice in Bermuda and other international jurisdictions. Skills and Qualifications Legal expertise; regulatory and government experience; corporate governance Ms. Beesley brings to our Board her multi-jurisdictional legal expertise, strategic and risk management perspectives, gained from over 40 years of experience in the legal and financial services industry advising on all areas of corporate law, investment funds, structured finance, joint venture structures, and mergers and acquisitions as a Solicitor in England and Wales, Hong Kong, and as a practicing Barrister and Attorney of the Bermuda Bar. In addition, Ms. Beesley's experience as a former director of our insurance group supervisor, the Bermuda Monetary Authority, is particularly valuable to our Board as we manage increasingly complex compliance, regulatory and governance matters. | |||||
Director Since: 2021 Age: 65 Class: I Enstar Committees: Nominating and Governance Bermuda resident; British, Canadian and Irish citizen | |||||
| Susan L. Cross | |||||
 | Biographical Information Susan L. Cross has served as a director since October 2020. She served as Executive Vice President and Global Chief Actuary at XL Group (now AXA XL), from 2008 to 2018, and prior to that served as Senior Vice President and Chief Actuary of various operating segments of XL Group since 1999. Certain Other Directorships Ms. Cross currently serves as a non-executive director at Unum Group, a Fortune 500 publicly held insurance company and leading provider of financial protection benefits, where she sits on the Audit Committee and Risk and Finance Committee. Previously, she has served on the boards of IFG Companies, American Strategic Insurance and several XL subsidiaries, including Mid Ocean Limited and XL Life Ltd. Skills and Qualifications Actuarial expertise; risk management, regulatory and governance skills; industry experience Ms. Cross brings significant actuarial expertise to our Board, obtained from over 20 years of senior management experience as an actuary with XL Group. Her industry experience is particularly valuable to our Audit Committee and our Risk Committee given the complex nature of our run-off business. As a director of a Fortune 500 company, Ms. Cross also has knowledge of corporate governance matters and practices, which is valuable to our Board. | ||||
Director Since: 2020 Age: 62 Class: III Enstar Committees: Audit, Risk US resident; US citizen | |||||
Enstar Group Limited / 9 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
| Hans-Peter Gerhardt | |||||
 | Biographical Information Hans-Peter Gerhardt served as the Chief Executive Officer of Asia Capital Reinsurance Group from October 2015 through June 2017. He has served continuously in the reinsurance industry since 1981. He is the former Chief Executive Officer of PARIS RE Holdings Limited, serving in that position from the company’s initial formation in 2006 through the completion of its merger into Partner Re Ltd. in June 2010. He previously served as the Chief Executive Officer of AXA Re from 2003 to 2006, also serving as Chairman of AXA Liabilities Managers, the AXA Group’s run-off operation, during that time. Certain Other Directorships Mr. Gerhardt served as a non-executive director of our subsidiary StarStone Specialty Holdings Ltd. until January 1, 2021. He previously served as a non-executive director of African Risk Capacity, Tokio Millenium Re and Tokio Marine Kiln as well as Asia Capital Reinsurance Group (until May 2017) and as an independent director of Brit Insurance Holdings PLC until the company’s acquisition by Fairfax Financial Holdings in 2015. Skills and Qualifications Underwriting expertise; proven industry veteran Mr. Gerhardt brings decades of insurance industry management expertise to our Board. He is a proven industry veteran, with significant leadership experience, including several successful tenures in CEO roles. | ||||
Director Since: 2015 Age: 66 Class: III Enstar Committees: Risk, Human Resources and Compensation, Executive Swiss resident; German citizen | |||||
| Orla Gregory | |||||
 | Biographical Information Ms. Gregory is our Acting Chief Financial Officer and Chief Operating Officer. She was appointed to the role of Acting Chief Financial Officer in September 2021 and has served as our Chief Operating Officer since 2016. Since joining us in 2003, Ms. Gregory has held increasingly senior roles, including Chief Integration Officer from 2015 to 2016, Executive Vice President of Mergers and Acquisitions of our subsidiary, Enstar Limited, from 2014 to 2015, Senior Vice President of Mergers and Acquisitions from 2009 to 2014, and Financial Controller from 2003 to 2009. Ms. Gregory previously served as a Financial Controller of Irish European Reinsurance Company Ltd. in Ireland, an Investment Accountant with Ernst & Young Bermuda, and as a Financial Accountant for QBE Insurance & Reinsurance (Europe) Limited. Skills and Qualifications Company leader; finance & accounting; operations and technology; human capital management; industry expertise Ms. Gregory is a qualified chartered accountant and experienced company executive who has spent more than 27 years in the insurance and reinsurance industry, including 18 years with our Company. As Acting Chief Financial Officer & Chief Operating Officer of the Company, Ms. Gregory brings to our Board intimate knowledge and expertise regarding the Company and our industry. Her experience developing and managing the Company's operations and global workforce is particularly valuable to our Board in light of the Company's strategic focus on human capital management. | ||||
Director Since: 2022 Age: 47 Class: I Enstar Officer Title: Acting CFO / COO Bermuda resident; Irish citizen | |||||
Enstar Group Limited / 10 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
| Paul O'Shea | |||||
 | Biographical Information Paul O’Shea was appointed as President of the Company in December 2016. He previously served as Executive Vice President and Joint Chief Operating Officer of the Company since our formation in 2001 and has also been a director throughout this time. He has led our mergers and acquisitions operations, including overseeing our transaction sourcing, due diligence, and negotiations processes. In 1994, Mr. O’Shea joined Dominic Silvester in his run-off business venture in Bermuda, and he served as a director and Executive Vice President of Enstar Limited, which is now a subsidiary of the Company, from 1995 until 2001. Prior to co-founding the Company, he served as the Executive Vice President, Chief Operating Officer and a director of Belvedere Group/Caliban Group from 1985 until 1994. Skills and Qualifications Company leader; long track record of successful acquisitions; industry expertise Mr. O’Shea is a qualified chartered accountant who has spent more than 30 years in the insurance and reinsurance industry, including many years in senior management roles. As a co-founder of the Company, Mr. O’Shea has intimate knowledge and expertise regarding the Company and our industry. He has been instrumental in sourcing, negotiating and completing numerous significant transactions since our formation. | ||||
Director Since: 2001 Age: 64 Class: I Enstar Officer Title: President Bermuda resident; Irish citizen | |||||
| Poul Winslow | |||||
 | Biographical Information Poul Winslow is a Senior Managing Director & Global Head of Capital Markets and Factor Investing of the Canada Pension Plan Investment Board ("CPP Investments"), a role he has held since 2018. Previously Mr. Winslow served as Head of External Portfolio Management and Head of Thematic Investing for CPP Investments. Prior to joining CPP Investments in 2009, Mr. Winslow had several senior management and investment roles at Nordea Investment Management in Denmark, Sweden and the United States. He also served as the Chief Investment Officer of Andra AP-Fonden (AP2) in Sweden. Mr. Winslow recently announced his planned retirement from CPP Investments at the end of May 2022. He will remain CPP Investments' designated director representative. Certain Other Directorships Mr. Winslow is a director for the Standards Board for Alternative Investments, an international standard-setting body for the alternative investment industry. He previously served as a director of Viking Cruises Ltd., a private company, from 2016 to 2018. Skills and Qualifications Investment expertise; compensation and governance experience Mr. Winslow brings significant investment expertise to our Board gained from his years in senior investment roles, which is highly valuable to our Investment Committee as it oversees our investment strategies and portfolios. His experiences at CPP Investments, including exposure to compensation and governance policies, are valuable in his role on our Compensation Committee. | ||||
Director Since: 2015 Age: 56 Class: III Enstar Committees: Human Resources and Compensation, Investment, Executive Canadian resident; Danish citizen | |||||
Enstar Group Limited / 11 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Continuing Directors
| B. Frederick (Rick) Becker | |||||
 | Biographical Information Rick Becker has 40 years of experience in the insurance and healthcare industries. He served as Chairman of Clarity Group, Inc., a company he co-founded more than 18 years ago that specialized as a healthcare professional liability and risk management service provider until it was sold in early 2020. Prior to co-founding Clarity Group, Inc., he served as Chairman and Chief Executive Officer of MMI Companies, Inc. from 1985 until its sale to The St. Paul Companies in 2000. Mr. Becker has previously served as President and CEO of Ideal Mutual and McDonough Caperton Employee Benefits, Inc., and also served as State Compensation Commissioner for the State of West Virginia. He began his career as a practicing attorney. Skills and Qualifications Compensation, governance, and risk management experience; industry knowledge. Mr. Becker has over 40 years of experience within the insurance and healthcare industries. The Board also values Mr. Becker’s corporate governance experience, which he has gained from serving on many other boards over the years. In addition, his previous work on compensation matters makes him well-suited to serve as Chairman of our Human Resources and Compensation Committee. He has an extensive background in risk management, which enhances our risk oversight and monitoring capabilities. | ||||
Director Since: 2015 Age: 75 Class: II Enstar Committees: Audit, Human Resources and Compensation (Chair), Nominating and Governance (Chair) US resident; US citizen | |||||
| James Carey | |||||
 | Biographical Information James Carey is a Managing Director of Stone Point Capital LLC, a private equity firm based in Greenwich, Connecticut. Stone Point Capital serves as the manager of the Trident Funds, which invest exclusively in the global financial services industry. Mr. Carey has been with Stone Point Capital and its predecessor entities since 1997. He previously served as a director of the Company from its formation in 2001 until the Company became publicly traded in 2007. Mr. Carey rejoined the Board in 2013. Certain Other Directorships From July 2018, Mr. Carey has served as a director of Focus Financial Partners, a publicly traded company that invests in independent fiduciary wealth management firms. Mr. Carey also currently serves on the boards of certain privately held portfolio companies of the Trident Funds. He previously served as non-executive chairman of PARIS RE Holdings Limited and as a director of Alterra Capital Holdings Limited, Cunningham Lindsay Group Limited, Lockton International Holdings Limited, and Privilege Underwriters, Inc. Skills and Qualifications Investment expertise; industry knowledge; significant acquisition experience Having worked in the private equity business for over 20 years, Mr. Carey brings an extensive background and expertise in the insurance and financial services industries. His in-depth knowledge of investments and investment strategies is significant in his role on our Investment Committee. We also value his contributions as an experienced director in the insurance industry, as well as his extensive knowledge of the Company. | ||||
Director Since: 2013 Age: 55 Class: II Enstar Committees: Investment US resident; US citizen | |||||
Enstar Group Limited / 12 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
| Willard Myron Hendry, Jr | |||||
 | Biographical Information Myron Hendry most recently served as an executive advisor to AXA on integration matters. He previously served as the Executive Vice President and Chief Platform Officer for XL Group from 2009-2018, where he was responsible, on a Global basis, for Technology, Operations, Real Estate, Procurement, Continuous Improvement Programs and XL Group’s Service Centers in India and Poland. He also served as Director on the XL India Business Services Private Limited Board, and he was the Chairman of the XL Group Corporate Crisis Committee responsible for Disaster Recovery and Business Continuity. Mr. Hendry was the founder of the XL Group’s Leadership Listening Program. Throughout his career, he also held technology, operational and claims leadership roles at Bank of America’s Balboa Insurance Group, Safeco Insurance and CNA Insurance. Skills and Qualifications Operations and Technology Mr. Hendry brings to our Board expertise in insurance industry-specific information technology and operations management. His extensive experience as an executive engaging on technology matters at the board level is valuable to our Board and Risk Committee. | ||||
Director Since: 2019 Age: 73 Class: II Enstar Committees: Nominating and Governance, Risk US resident; US citizen | |||||
| Hitesh Patel | |||||
 | Biographical Information Hitesh Patel served as Chief Executive Officer of Lucida, plc, a UK life insurance company, from 2012 to 2013, and prior to that as its Finance Director and Chief Investment Officer since 2007. Mr. Patel has over 30 years of experience working in the insurance industry, having served in the United Kingdom as KPMG LLP's Lead Partner on Insurance Accounting and Regulatory Services from 2000 to 2007. He originally joined KPMG in 1982 and trained as an auditor. Certain Other Directorships Mr. Patel is the Independent Non-Executive Chairman of Capital Home Loans Limited, a privately held buy-to-let mortgage provider and also a non-executive director of Landmark Mortgages Limited. Mr. Patel chairs the Audit Committee and is a member of the Risk Committee and Nomination and Remuneration Committee for Capital Home Loans and Landmark Mortgages Limited. Mr. Patel is a member of the Council of the London School of Hygiene and Tropical Medicine. He is also the Non-Executive Chairman of Augusta Ventures Holdings Limited which provides litigation finance. He is also the Chair of the Insurance Committee of the Institute of Chartered Accountants of England and Wales since 2012. Until December 2019, Mr. Patel served as a non-executive director at Aviva Life Holdings UK Ltd and Aviva Insurance Limited (subsidiaries of Aviva plc) and as Chairman of its Audit Committee and member of the Risk and Investment Committees. Skills and Qualifications Accounting expertise; regulatory and governance skills; industry experience Mr. Patel brings significant accounting expertise to our Board, obtained from over two decades of auditing and advising insurance companies on accounting and regulatory issues, which is highly valuable to our Audit Committee. His experience with insurance regulations and the regulatory environment is also a key attribute because our company is regulated in many jurisdictions around the world. As a former industry CEO, he also has significant knowledge of corporate governance matters and practices, which is valuable to our Board and the Nominating and Governance Committee. | ||||
Director Since: 2015 Age: 61 Class: II Enstar Committees: Audit, Nominating and Governance, Risk (Chair) UK resident; UK citizen | |||||
Enstar Group Limited / 13 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
BOARD COMPOSITION
As illustrated by the director biographies on the previous pages, our Board is made up of a diverse group of leaders with substantial experience in their respective fields. Our Board believes that the combination of the various skills, qualifications and experiences of its directors contributes to an effective and well-functioning Board and that, individually and as a whole, its directors possess the necessary qualifications to provide effective oversight and insightful strategic guidance.
We continually review our Board’s composition to identify the skills needed for our Company both in the near term and into the future. Ongoing strategic board succession planning and annual reviews of Board composition by the Nominating and Governance Committee assure that the Board continues to maintain an appropriate mix of objectivity, skills and experiences to provide fresh perspectives and effective oversight and guidance to management, while leveraging the institutional knowledge and historical perspective of our longer-tenured directors.
In September 2021, the Company appointed Sharon A. Beesley to the Board. Ms. Beesley brings extensive industry and Bermuda-specific experience to our Board. She filled the vacancy created by the resignation of Jie Liu from the Board on February 7, 2021. The most recent addition to the Board was Orla M. Gregory, who was appointed in February 2022. Ms. Gregory is also our Acting Chief Financial Officer and Chief Operating Officer, and she brings extensive industry experience and a deep knowledge of the Company's operations to our Board.
Board Membership Criteria
The Board and the Nominating and Governance Committee believe that there are general qualifications that all directors must exhibit and other key qualifications and experiences that should be represented on the Board as a whole but not necessarily by each individual director. Given the complex nature of our business and the insurance and reinsurance industry, we seek directors whose experiences, although varying and diverse, are also complementary to and demonstrate a familiarity with the substantive matters necessary to lead the Company and navigate our business.
Qualifications Required of All Directors
The Board and the Nominating and Governance Committee require that each director possess high personal and professional integrity and character, strong business judgement, the ability to represent the interests of the Company's shareholders, knowledge regarding insurance, reinsurance and investment matters, as well as other factors discussed below.
Enstar Group Limited / 14 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Key Qualifications and Experiences to be Represented on the Board
The Board has identified key qualifications and experiences that are important to be represented on the Board as a whole, in light of the Company's business strategy and expected future business needs. The Board reviews these categories from time to time, alongside its consideration of whether there are new areas that would benefit it in executing its oversight duties. The table below summarizes these key qualifications and how they are linked to our Company's business.
| Enstar's Business Characteristics | Desired Skill | What the Skill Represents | ||||||
The Company’s business is a specialized global enterprise operating within a complex and highly- regulated industry. | Extensive Insurance Industry Experience | Extensive experience within the insurance industry including in executive, director or other leadership roles at major insurance institutions. | ||||||
The Board’s responsibilities include understanding and overseeing the various risks facing the Company and ensuring that appropriate policies and procedures are in place to effectively manage risk. | Risk Management | Experience related to establishing risk appetite levels and risk management processes for operations, acquisitions, underwriting, and investment portfolios. | ||||||
The Company’s business is multifaceted and involves complex financial and insurance transactions in many countries subject to various regulatory prudential standards. We are committed to disciplined financial management and accurate disclosure. | Finance and Accounting | Experience related to developing and understanding finance and capital management needs in line with corporate strategies, as well as financial reporting, audit and actuarial-related expertise. | ||||||
The Company's investment portfolio continues to grow in size and complexity, totaling $21.7 billion as of December 31, 2021. | Investment | Expertise related to assessing large and complex investment portfolios and determining investment strategies in line with delineated risk appetites. | ||||||
The Company's long-term success is dependent on setting and executing a responsible corporate strategy and the continuous review of strategic transactions. | Strategy | Experience challenging management on setting and/or adjusting business strategies, including acquisitions, divestitures, operations, and investments. | ||||||
The size, nature and complexity of the Company's business presents both opportunities and challenges to advancing our sustainability initiatives, and requires an appropriately designed corporate governance framework to protect the interests of the Company's stakeholders. | Corporate Governance | A practical understanding of developing and championing governance procedures and protections that drive Board and management accountability and protection of shareholder interests, including ESG knowledge and advocacy. | ||||||
The Company’s business requires compliance with a variety of regulatory requirements across a number of countries and the ability to maintain relationships with various governmental entities and regulators. | Regulatory and Government | A deep understanding of the highly regulated environment in which we operate, and the ever-changing regulations and requirements that govern our operations and shape our future strategies. | ||||||
The Company's scale and complexity requires aligning many areas of our operations, including integration of new businesses, technology, and human resources, while remaining innovative and adaptable in an increasingly digital society. | Business Operations and Technology | A practical understanding of developing, implementing, and assessing business operations, processes, and associated risks, including information systems and technology used therein. | ||||||
The Company's global workforce represents one of our key resources. | Human Capital Management | Experience managing a large and/or global workforce and recruiting and retaining talent. | ||||||
Enstar Group Limited / 15 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Consideration of Board Diversity
We seek to identify candidates who represent a mix of backgrounds and experiences that will improve the Board’s ability, as a whole, to serve our needs and the interests of our shareholders. In February 2019, the Board adopted a formal diversity policy applicable to the selection of directors. The Board considers diversity to include gender, ethnicity, nationality, age, sexual orientation, geographic background, and other personal characteristics. Our Board Diversity Policy requires the Nominating and Governance Committee to actively consider diversity in its regular assessments of board composition and in its efforts to identify potential director candidates, including specifically requiring that diverse individuals based on gender, race and ethnicity be included in formal searches for new directors.
The Board assesses the effectiveness of its diversity policy every year through our Board and committee evaluation process and annual composition review. Where potential improvements are identified, the Nominating and Governance Committee may propose changes to the policy to enhance its effectiveness. Board diversity has also been a key topic in our annual shareholder engagement discussions. In response to shareholder feedback and upon recommendation from the Nominating and Governance Committee, the Board amended its diversity policy in 2021 to strengthen its commitment to improving diversity amongst its members by imposing aspirational diversity targets.
As provided in the revised policy, the Board endeavors to maintain diversity amongst its members such that at least 30% of the Board will be comprised of persons who self-identify as female or as an underrepresented minority or LGBTQ+. On gender diversity specifically, the Board is committed to maintaining at least three female Board members and over time will aim to reach and maintain a minimum of at least 30% female representation on the Board. For purposes of these targets, an underrepresented minority is a person who self-identifies within one or more of the following categories that have been established by the U.S. Equal Employment Opportunity Commission: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Other Pacific Islander or two or more races or ethnicities.
Following the recent appointments of Mmes. Beesley and Gregory, 33% of our Board is comprised of persons who self-identify as female or as an underrepresented minority, and three, or 25%, self-identify as female. The Board intends to continue to improve its overall diversity over time without further increases to its size, unless otherwise determined appropriate by our Board.
Enstar Group Limited / 16 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Our Board's Current Skill, Experience, and Demographic Profile
The matrix below summarizes certain of the key experiences, qualifications, skills, diversity and attributes that our directors bring to the Board to enable effective oversight. This matrix is intended to provide a summary of our directors' qualifications and skills in which they specifically declare expertise or leading experience in, and is not a complete list of each director's strengths or contributions to the Board. Additional details on each director's experiences, qualifications, skills, and attributes are set forth in their biographies. The categories listed under the "Skills and Experience" column in the matrix below are defined under the section heading, "Key Qualifications and Experiences to be Represented on the Board" above. Further details regarding the independence of our directors including determinations of independence for each are set out fully under the section heading, "Independence of Directors" below.
| Director | |||||||||||||||||||||||||||||||||||||||||
| Skills and Experience | RB | SB | RC | JC | SC | HPG | OG | MH | PO'S | HP | DS | PW | |||||||||||||||||||||||||||||
| Extensive Insurance Industry Experience | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||||
| Risk Management | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||
| Finance and Accounting | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||||
| Investment | l | l | l | l | l | ||||||||||||||||||||||||||||||||||||
| Strategy | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||||||
| Corporate Governance | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||||
| Regulatory and Government | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||||
| Business Operations and Technology | l | l | l | l | |||||||||||||||||||||||||||||||||||||
| Human Capital Management | l | l | |||||||||||||||||||||||||||||||||||||||
| Tenure and Independence | |||||||||||||||||||||||||||||||||||||||||
| Tenure (years) | 7 | 1 | 15 | 9 | 2 | 7 | <1 | 3 | 21 | 7 | 21 | 7 | |||||||||||||||||||||||||||||
| Independence | l | l | l | l | l | l | l | l | |||||||||||||||||||||||||||||||||
| Demographics | |||||||||||||||||||||||||||||||||||||||||
| Age (years) | 75 | 65 | 73 | 55 | 62 | 66 | 48 | 73 | 64 | 61 | 61 | 56 | |||||||||||||||||||||||||||||
| Gender Identity | M | F | M | M | F | M | F | M | M | M | M | M | |||||||||||||||||||||||||||||
| African American or Black | |||||||||||||||||||||||||||||||||||||||||
| Alaskan Native or American Indian | |||||||||||||||||||||||||||||||||||||||||
| Asian | l | ||||||||||||||||||||||||||||||||||||||||
| Hispanic or Latinx | |||||||||||||||||||||||||||||||||||||||||
| Native Hawaiian or Pacific Islander | |||||||||||||||||||||||||||||||||||||||||
| White | l | l | l | l | l | l | l | l | l | l | l | ||||||||||||||||||||||||||||||
| Two or More Races or Ethnicities | |||||||||||||||||||||||||||||||||||||||||
| LGBTQ+ | |||||||||||||||||||||||||||||||||||||||||
Enstar Group Limited / 17 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Evaluation and Nomination of Director Candidates
Primary responsibility for identifying and evaluating director candidates and for recommending the re-nomination of incumbent directors resides with the Nominating and Governance Committee, which consists entirely of independent directors under applicable SEC rules and Nasdaq listing standards. Our Board Chair also shares some responsibility for new director recruitment, including the responsibility of working with our CEO, Nominating and Governance Committee and the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that director candidates must possess. The Nominating and Governance Committee, with input from our Board Chair, then establishes the criteria for director nominees based on these inputs, which are outlined under the section headings, "Qualifications Required of All Directors" and "Key Qualifications and Experiences to be Represented on the Board" of this proxy statement above.
Nomination of New Candidates
Potential director candidates meeting the criteria established by the Nominating and Governance Committee and adopted by the full Board have primarily been identified through the periodic solicitation of recommendations from members of the Board and individuals known to the Board, the use of third-party search firms retained by the Nominating and Governance Committee, and shareholders; however, in certain private placement or acquisition-related transactions, parties have obtained the right to designate a board representative. The Nominating and Governance Committee is authorized, at the Company's expense, to retain search firms to identify potential director candidates, as well as other external advisors, including for purposes of performing background reviews of potential candidates. Search firms retained by the Nominating and Governance Committee are provided guidance as to the particular experience, skills, or other characteristics that the Board is then seeking. The Nominating and Governance Committee may delegate responsibility for day-to-day management and oversight of a search firm engagement to its Chair, any one or more of its members, the Board's Chair, and/or appropriate members of management with the Nominating and Governance Committee's oversight.
The evaluation of new director candidates involves several steps performed on a rolling basis and not always taken in the following order. The Nominating and Governance Committee reviews and verifies the candidate's qualifications and background information and evaluates the candidate's attributes relative to the identified needs of the Board. If the Nominating and Governance Committee wishes to pursue a candidate further, it arranges candidate interviews with committee members and other members of the Board and certain executive officers to ensure that candidates not only possess the requisite skills and characteristics, but also the personality, leadership traits, work ethic, and independence of thought to effectively contribute as a member of the Board. After assessing the feedback, the Nominating and Governance Committee presents each selected candidate to the Board for consideration. The Board then nominates successful candidates for election to the Board at the Annual General Meeting. Director candidates are principally identified and evaluated in anticipation of upcoming director elections and other potential or expected Board vacancies. From time to time, the Board may create and fill vacancies in its membership which arise between annual meetings of shareholders using the process described above.
Re-nomination of Incumbents
To ensure that the Board continues to evolve in a manner that serves the changing business and strategic needs of the Company, before recommending for re-nomination a slate of incumbent directors for an additional term, the Nominating and Governance Committee also evaluates each incumbent director’s overall service to the Company during the director’s term including the director’s level of participation and quality of performance, and whether the incumbent directors possess the requisite skills and perspective, both individually and collectively. This evaluation is based primarily on the results of the annual review it performs with the Board of the requisite skills and characteristics of Board members, as well as the composition of the Board as a whole and the results of the Board’s annual self-evaluation. The Nominating and Governance Committee considered and nominated the candidates proposed for election as directors at the Annual General Meeting, with the Board unanimously agreeing on the nominees.
Enstar Group Limited / 18 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Shareholder Recommendations
In accordance with its charter, the Nominating and Governance Committee will consider director candidates submitted by shareholders. Shareholders may recommend candidates to serve as directors by submitting a written notice to the Nominating and Governance Committee at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda. Shareholder recommendations must be accompanied by sufficient information to assess the candidate’s qualifications and contain the candidate’s consent to serve as a director if elected. Shareholder nominees will be evaluated by the Nominating and Governance Committee in the same manner as nominees it selects itself.
DIRECTORSHIP ARRANGEMENTS
On June 3, 2015, CPP Investments purchased 1,501,211 shares of Enstar from fund partnerships that had acquired shares as consideration in one of our acquisitions. In connection with the 2015 transaction: (i) the selling shareholders' rights terminated; and (ii) we and CPP Investments entered into a new Shareholder Rights Agreement granting CPP Investments contractual shareholder rights that were substantially similar to those rights previously held by the selling shareholders, including the right to designate one representative to our Board. CPP Investments designated Poul Winslow as a director of the Company, and he was appointed in September 2015. On April 14, 2021, CPP Investments notified the Company of Mr. Winslow's planned retirement from CPP Investments at the end of May 2022. CPP Investments has informed the Company that Mr. Winslow will continue to serve as the designated director representative of CPP Investments following his retirement. The designation right terminates if CPP Investments ceases to beneficially own at least 75% of the total number of voting and non-voting shares acquired by it in the original transaction. CPP Investments has subsequently acquired additional shares, including through CPPIB Epsilon Ontario Limited Partnership, and its current direct and indirect holdings, together with the shares held by CPPIB Epsilon Ontario Trust Limited Partnership, constitute an aggregate economic interest of approximately 21.2%. Mr. Winslow serves as a trustee of the trust that serves as the general partners of CPPIB Epsilon Ontario Limited Partnership.
INDEPENDENCE OF DIRECTORS
Our Board currently consists of twelve directors, of which nine are non-management directors, and eight are independent. The Company's Corporate Governance Guidelines provide, and our Board believes, that a majority of its members should be independent directors who meet the criteria for independence required by the Nasdaq listing standards, as determined by the Board. The Charters of our Audit Committee, Human Resources and Compensation Committee, and Nominating and Governance Committee also require that every member of such committees meet the criteria for independence required by the Nasdaq listing standards, as determined by the Board, and in certain instances, enhanced independence standards within the meaning of SEC rules. These requirements are included in the Corporate Governance Guidelines and the committee charters, which are available at www.enstargroup.com under "Investor Relations" — "Corporate Governance."
| Board and Committee Independence Statistics | |||||
| Independence | |||||
| Board |  | ||||
| Audit |  | ||||
Human Resources and Compensation | | ||||
Nominating and Governance |  | ||||
| Risk | | ||||
| Investment |  | ||||
| Executive |  | ||||
Enstar Group Limited / 19 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Affirmative Determination of Independence
To assess independence, the Nominating and Governance Committee and the Board review the independence of each director at the time of their appointment and no less than annually thereafter. For a director to be considered independent, the Board must determine that the director meets the definition of independence included in Nasdaq Marketplace Rule 5605(a)(2). This requires a determination that the director does not have any direct or indirect material relationship with us, which in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making such determination, the Nominating and Governance Committee and the Board consider all known relevant facts and circumstances, including but not limited to the director’s commercial, industrial, banking, consulting, legal, accounting, investment, charitable and familial relationships known or reported to us in connection with the preparation of this proxy statement or otherwise.
In making their independence determination, the Nominating and Governance Committee and the Board specifically considered the following transaction during 2021 and concluded it did not impair any director's independence:
▪Upon the recommendation of an independent broker, one of our subsidiaries entered into a one-year lease for a corporate apartment in a building that is owned by a company in which Ms. Cross and her husband hold a 40% interest, and in which Ms. Cross's husband serves as President. Ms. Cross was not involved in the sourcing or negotiations of the transaction. This transaction involved immaterial dollar amounts below the amounts that would preclude a finding of independence under Nasdaq listing standards or qualify it as a related party transaction.
Consistent with these considerations and based on the report and recommendation of the Nominating and Governance Committee, the Board affirmatively determined that:
▪Messrs. Campbell, Becker, Gerhardt, Hendry, Patel, and Winslow and Mmes. Beesley, and Cross qualify as non-employee directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are independent within the meaning of Nasdaq Marketplace Rule 5605(a)(2);
▪Messrs. Campbell, Becker, and Patel and Ms. Cross meet the enhanced independence standards defined in Nasdaq Marketplace Rule 5605(c)(2) and Rule 10A-3(b) of the Exchange Act, with respect to members of the Audit Committee;
▪Messrs. Campbell, Becker, Gerhardt, and Winslow meet the enhanced independence standards defined in Nasdaq Marketplace Rule 5605(d)(2)(A) and Rule 10C-1(b)(1)(ii)(A) and (B) of the Exchange Act, with respect to members of the Human Resources and Compensation Committee;
▪Mr. Carey is a non-employee director within the meaning of Rule 16b-3 under the Exchange Act, but is not independent within the meaning of Nasdaq Marketplace Rule 5605(a)(2) due to matters described under "Certain Relationships and Related Transactions" beginning on page 42 of this proxy statement;
▪Messrs. Silvester and O'Shea and Ms. Gregory are management directors and are not independent due to their service with us as executive officers.
For details about certain relationships and transactions among us and our executive officers and directors, see "Certain Relationships and Related Transactions."
Enstar Group Limited / 20 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
BOARD LEADERSHIP STRUCTURE
Our Board is supportive of objective, independent leadership for itself and each of its committees. Our Board views the active, objective, independent oversight of management as central to effective Board governance, to serving the best interests of our Company and our shareholders, and to executing our strategic objectives and creating long-term value. This support is exemplified in our Board's track record of: maintaining separate roles of Board Chair and Chief Executive Officer since 2011, appointing an independent director to serve as our Board's Chair for the last decade, and appointing independent directors to serve as chairs of each of the Board's committees for the last five years.
Independent Board Leadership
The Board is currently led by an independent director, Robert Campbell, who has served as its Chair since 2011. Our Bye-laws and Corporate Governance Guidelines permit the roles of Board Chair and Chief Executive Officer to be filled by the same or different individuals, although our Board continues to express a preference for the separation of the two roles. This flexibility allows the Board to determine whether the two roles should be combined or separated based upon our Company's evolving needs, strategy, operating environment, shareholder input, and the Board’s assessment of its leadership from time to time. The Board believes that our shareholders are best served at this time by having an independent director serve as Chair. Our Board believes this leadership structure effectively allocates authority, responsibility, and oversight between management and the independent members of our Board. It gives primary responsibility for the operational leadership and strategic direction of the Company to our Chief Executive Officer, while the Chair facilitates our Board’s independent oversight of management, promotes communication between senior management and our Board about issues such as company strategy and performance, leadership team development, succession planning, and executive compensation. Our Chair engages with shareholders, and supports the Board's Nominating and Governance Committee's consideration of key governance matters. The Board recognizes, however, that no single leadership model is right for all companies at all times and that, depending on the circumstances in the future, other leadership models might be appropriate for us. | Robert Campbell BOARD CHAIR Partner, Beck, Mack & Oliver, LLC | |||||||
As a result of his experience as a director on other public company boards, his deep understanding of Enstar and its business acquired from his 10+ years of service as Chair of our Board, and his extensive understanding of finance and investments, Mr. Campbell is uniquely positioned to work collaboratively with our CEO, while providing strong independent oversight of management. In addition to his core responsibilities as Board Chair described further below, Mr. Campbell is an actively engaged director who regularly communicates with the CEO and other members of the senior management on various topics of importance to the Company. In recognition of Mr. Campbell’s strong leadership stemming from his industry-relevant knowledge, operational and governance experience and communication skills, the Board, upon recommendation from the Nominating and Governance Committee, re-appointed Mr. Campbell as the Board's Chair for another one-year term beginning in 2022. | ||||||||
Enstar Group Limited / 21 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Duties of our Board Chair
| Board Leadership | Board Culture | |||||||||||||
•Presiding at all meetings of the Board, including executive sessions of the independent directors •Calling meetings of the Board •Soliciting views and feedback from all Board members and prompting engagement | •Serving as a liaison between the CEO and executive management team and the Board •Encouraging rigorous review, debate and challenge •Providing support, advice, and feedback from our Board to the CEO while respecting executive responsibility | |||||||||||||
| Board Priorities | Board Performance and Development | |||||||||||||
•Focusing on key issues and tasks facing our Company, and on topics of interest to our Board •Assisting our Board, Nominating and Governance Committee, and management in complying with our Corporate Governance Guidelines and promoting corporate governance best practices •Contributing to the annual performance review of the CEO, and participating in succession planning with our Human Resources and Compensation Committee | •Promoting the efficient and effective performance and functioning of our Board •Consulting with our Nominating and Governance Committee on our Board's annual self-evaluation •Preparing improvement plans to address areas identified during self-evaluation process and monitor progress •With our Nominating and Governance Committee, consulting in the identification and evaluation of director candidates' qualifications and consulting on committee membership and committee chairs | |||||||||||||
| Board Meetings | Shareholders and Other Stakeholders | |||||||||||||
•Planning, reviewing, and approving meeting agendas for our Board •Approving meeting schedules to provide for sufficient time for discussion of agenda items •Advising the CEO and management of the information needs of our Board •Developing topics of discussion for executive sessions of our Board | •Consulting and directly communicating with shareholders and other key constituents, as appropriate •Leading annual shareholder engagement program to discuss executive compensation and corporate governance matters •Being available for communication with our primary regulators (with or without management present) to discuss the appropriateness of our Board’s oversight of management and our Company | |||||||||||||
Enstar Group Limited / 22 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
COMMITTEES OF THE BOARD
Our Board has six standing committees: the Audit Committee, the Human Resources and Compensation Committee, the Nominating and Governance Committee, the Risk Committee, the Investment Committee, and the Executive Committee. Details of the composition and primary responsibilities of each of the Board's standing committees are summarized in the sections titled "Committee Membership" and "Information about our Committees" below.
Committee Membership
The Board appoints members of its committees annually, with the Nominating and Governance Committee reviewing and recommending committee membership. Interim changes to committee membership may be made by the Board, upon recommendation from the Nominating and Governance Committee, following director appointments, resignations, or periodic reviews considering the changing needs of our business or Board. When determining committee composition and leadership, both the Nominating and Governance Committee and the Board may consider a variety of factors including: committee composition requirements set out in each committee's charter, individual director experience and qualifications, director independence, time commitments and constraints, the results of previous Board or committee evaluations, director tenure, succession planning and refreshment needs, diversity, and such other factors as thought appropriate from time to time.
Information About Our Committees
Our committees operate under written charters that have been approved by the Board, and each Committee reviews its charter annually and recommends any proposed changes to the Board. Current copies of the charters for all of our committees are available on our website at http://www.enstargroup.com/corporate-governance. In addition, any shareholder may receive copies of these documents in print, without charge, by contacting the Corporate Secretary at P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda. The primary responsibilities of each of our committees are described below.
Enstar Group Limited / 23 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
AC: Audit Committee | |||||||||||||||||||||||
| CHAIR | MEMBERS | MEETINGS HELD | |||||||||||||||||||||
| | | | IN 2021: | |||||||||||||||||||
| 8 | |||||||||||||||||||||||
| INDEPENDENCE | |||||||||||||||||||||||
| Robert Campbell | B. Frederick Becker | Susan L. Cross | Hitesh Patel | 4 out of 4 | |||||||||||||||||||
2021 Highlights The Committee supported the Company's design and presentation of a new suite of financial performance measures that are included in the Company's 2021 Annual Report on Form 10-K. In support of our ESG strategy, the committee provided oversight of the disclosure controls and procedures applicable to our inaugural ESG disclosures. | Primary Responsibilities ▪Overseeing our accounting and financial reporting process, including our internal controls over financial reporting. ▪Overseeing the quality and integrity of our financial statements. ▪Engaging and overseeing the Company's independent registered public accounting firm (taking into account the vote on shareholder ratification) and considering the independence, qualifications and performance of our independent auditors. ▪Pre-approving compensation, fees and services of our independent auditors and reviewing the scope and results of their audit. ▪Reviewing the performance of our internal audit function. ▪Reviewing, and where appropriate approving, our internal audit function's audit plan, staffing, budget, responsibilities and performance. ▪Reviewing and providing oversight of all related party transactions. ▪Periodically reviewing our risk exposures and the adequacy of our controls over such exposures in coordination with our Risk Committee. ▪Periodically reviewing the adequacy and effectiveness of the controls and procedures (including the level of assurance) applicable to our key ESG disclosures. | ||||||||||||||||||||||
Additional Information The Audit Committee's Report is set forth beginning on page 79 of this proxy statement. | |||||||||||||||||||||||
(1)The Board has determined that all members of the Audit Committee (including its Chair) satisfy the criteria adopted by the SEC to serve as "audit committee financial experts."
HC: Human Resources and Compensation Committee | |||||||||||||||||||||||
| CHAIR | MEMBERS | MEETINGS HELD | |||||||||||||||||||||
| | | | IN 2021: | |||||||||||||||||||
| 7 | |||||||||||||||||||||||
| INDEPENDENCE | |||||||||||||||||||||||
| B. Frederick Becker | Robert Campbell | Hans-Peter Gerhardt | Poul Winslow | 4 out of 4 | |||||||||||||||||||
2021 Highlights In support of our ESG strategy, the Board expanded the Committee's remit to include oversight of human capital management matters. The Committee's name was changed to the Human Resources and Compensation Committee to emphasize its expanded role. | Primary Responsibilities ▪Overseeing policies and strategies relating to talent, leadership and culture, including diversity, equity, and inclusion. ▪Overseeing our management development and succession plans and processes. ▪Determining the compensation of our executive officers. ▪Establishing our compensation philosophy. ▪Overseeing the development and implementation of our compensation programs, including our incentive plans and equity plans. ▪Overseeing the risks associated with the design and operation of our compensation programs, policies and practices. ▪Periodically reviewing the compensation of our directors and making recommendations to our Board with respect to the adequacy and structure of compensation. ▪Maintaining sole authority to retain, terminate and approve fees and other terms of engagement of its compensation consultant and to obtain advice and assistance from internal or external legal, accounting or other advisors. | ||||||||||||||||||||||
Additional Information Additional information on the Human Resources and Compensation Committee and the role of management in setting compensation is provided below in "Executive Compensation - Compensation Discussion and Analysis." | |||||||||||||||||||||||
Enstar Group Limited / 24 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
NC: Nominating and Governance Committee | |||||||||||||||||||||||
| CHAIR | MEMBERS(1) | MEETINGS HELD | |||||||||||||||||||||
| | | | | IN 2021: | ||||||||||||||||||
| 6 | |||||||||||||||||||||||
| INDEPENDENCE | |||||||||||||||||||||||
| B. Frederick Becker | Sharon A. Beesley | Robert Campbell | W. Myron Hendry | Hitesh Patel | 5 out of 5 | ||||||||||||||||||
2021 Highlights In a continuing effort to improve Board diversity, the Committee established diversity targets and led the appointment of two new female directors in 2021 and 2022. The Committee also reviewed and recommended changes to the composition of the Board's committees making four out of six entirely independent and adding a female director to the Committee. Additional Information In 2021, the Committee enhanced its oversight of, and communication with, subsidiary boards by continuing its program of encouraging our directors to attend key subsidiary board meetings and reviewing significant subsidiary dashboards. | Primary Responsibilities ▪Establishing and overseeing the group’s organizational, governance and communication structures and confirming the operating effectiveness of each. ▪Establishing director qualification criteria; identifying individuals qualified to become directors; and reviewing any candidates proposed by directors, management or shareholders for appointment or reappointment to the Board. ▪Overseeing our Board succession planning process, and recommending annual director nominees to the Board and the Company's shareholders. ▪Reviewing the composition and function of the Board and its committees; recommending changes thereto; and recommending committee and leadership appointments to the Board. ▪Overseeing the annual evaluation of the performance and effectiveness of the Board and its committees, and making any recommendations for improvement. ▪Reviewing the composition and effectiveness of the group's material subsidiary boards, and overseeing their adherence to the group's established governance and communication frameworks. ▪Advising the Board with respect to corporate governance-related matters. | ||||||||||||||||||||||
(1)Ms. Beesley was appointed to the Nominating and Governance Committee on October 1, 2021.
RC: Risk Committee | |||||||||||||||||||||||
| CHAIR | MEMBERS | MEETINGS HELD | |||||||||||||||||||||
| | | | IN 2021: | |||||||||||||||||||
| 5 | |||||||||||||||||||||||
| INDEPENDENCE | |||||||||||||||||||||||
| Hitesh Patel | Susan L. Cross | Hans-Peter Gerhardt | W. Myron Hendry | 4 out of 4 | |||||||||||||||||||
2021 Highlights The Committee oversaw the development and implementation of the Company's ESG strategy in 2021. The Committee also formed a temporary subcommittee to monitor InRe Fund redemption matters following changes to the Company's investment strategy. | Primary Responsibilities ▪Assisting the Board in overseeing the integrity and effectiveness of the Company's Enterprise Risk Management framework. ▪Reviewing and evaluating the risks to which we are exposed, as well as monitoring and overseeing the guidelines and policies that govern the processes by which we identify, assess, and manage our exposure to risk. ▪Reviewing and monitoring our overall risk strategy and Board-approved risk appetite and overseeing any significant mitigating actions required. ▪Reviewing the Company’s forward-looking risk and solvency assessment and capital management. ▪Periodically reviewing and approving the level of risk assumed in underwriting, investment and operational activities. ▪Reviewing and monitoring the potential impact of emerging risks. ▪Overseeing the Company’s ESG risks, strategies, policies, programs and practices. | ||||||||||||||||||||||
Additional Information Additional information regarding the Risk Committee and the Board's oversight of risk is provided below under the Section titled "Board Oversight of Risk" beginning on page 29. | |||||||||||||||||||||||
Enstar Group Limited / 25 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
IC: Investment Committee | |||||||||||||||||||||||
| CHAIR | MEMBERS | MEETINGS HELD | |||||||||||||||||||||
| | | | IN 2021: | |||||||||||||||||||
| 5 | |||||||||||||||||||||||
| INDEPENDENCE | |||||||||||||||||||||||
| Robert Campbell | James Carey | Dominic Silvester | Poul Winslow | 2 out of 4 | |||||||||||||||||||
2021 Highlights In support of our ESG strategy, the Committee incorporated ESG considerations into our Investment Policy and external manager monitoring process, determining that more than 90% of our externally managed assets are managed by asset managers who are signatories of the UN Principles of Responsible Investment. The Committee also allocated $30m to impact investments for the year ended December 31, 2021. Additional Information In 2021, the Committee oversaw implementation of our Strategic Asset Allocation, and participated in quarterly polling exercises to gather information on market views and other topics of interest. | Primary Responsibilities ▪Determining our investment strategy. ▪Developing and reviewing our investment policies and guidelines and overseeing compliance with these guidelines and various regulatory requirements. ▪Overseeing our investments, including approval of investment transactions. ▪Reviewing and monitoring the Company’s investment performance quarterly and annually against plan and external benchmarks agreed from time to time. ▪Overseeing the selection, retention and evaluation of outside investment managers. ▪Overseeing investment-related risks, including those related to the Company's cash and investment portfolios and investment strategies. ▪Overseeing our internal investment management function. ▪Coordinating with other committees of the Board to assist with the implementation of the Company's ESG strategy. ▪Reviewing and approving the Company's use of derivatives. | ||||||||||||||||||||||
EC: Executive Committee | |||||||||||||||||||||||
| CHAIR | MEMBERS | MEETINGS HELD | |||||||||||||||||||||
| | | | IN 2021: | |||||||||||||||||||
| 0 | |||||||||||||||||||||||
| INDEPENDENCE | |||||||||||||||||||||||
| Robert Campbell | Hans-Peter Gerhardt | Dominic Silvester | Poul Winslow | 3 out of 4 | |||||||||||||||||||
2021 Highlights Because our full Board was able to meet throughout the year as needed, the Committee was not required to convene any meetings in 2021. Our Board reviewed and updated the Committee's charter in 2021, and determined that the Committee's purpose and composition remain appropriate for the effective functioning of the Board. | Primary Responsibilities ▪To exercise the power and authority of the Board when the entire Board is not available to meet, except that the Executive Committee may not authorize the following: –the issuance of equity securities of the Company; –the merger, amalgamation, or other change in control transaction of the company; –the sale of all or substantially all of the assets of the Company; –the liquidation or dissolution of the Company; –any transaction that, in the aggregate, exceeds 10% of the Company's total assets; –any action that requires approval of the entire Board by the Company's Memorandum of Association or the Company's Bye-laws; or –any action prescribed by applicable law, rule or regulation, including but not limited to those prescribed by listing rules or SEC regulations (such as those powers granted to the Compensation, Audit, and Nominating and Governance Committees and requiring independent director decisions). | ||||||||||||||||||||||
Enstar Group Limited / 26 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
DIRECTOR ATTENDANCE AT MEETINGS
We expect our directors to attend our annual general meeting of shareholders as well as all meetings of the Board and each committee on which they serve, absent extraordinary circumstances. In 2021, our Board held eleven meetings and its committees held 35 meetings in aggregate, for a combined total of 46 Board and committee meetings. No incumbent director attended fewer than 75% of the total number of Board and applicable committee meetings held during the year ended December 31, 2021, in each case during the period that such director served. In addition, all directors serving on our Board at the time of our 2021 annual general meeting of shareholders attended the meeting, which was held virtually on a remote basis due to the ongoing COVID-19 pandemic.
Our independent directors also meet privately in executive session on a regular basis without our CEO or other members of management present. In 2021, our independent directors met in such executive sessions each quarter without management. Our Board Chair leads these executive sessions.
*Our Executive Committee did not convene any meetings in 2021, which is not unexpected as the committee is only used in situations where the full Board cannot reasonably be convened.
Enstar Group Limited / 27 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
BOARD AND COMMITTEE EVALUATIONS
Determine Format The process, including evaluation method, is reviewed annually by the Nominating and Governance Committee. Unless otherwise agreed, written questionnaires are used for the Board and each standing committee and are updated and tailored each year to address the significant processes that drive board effectiveness. | Our Board and each of its committees continually seek to improve their performance. Throughout the year, directors are encouraged to provide periodic input to the Board Chair, committee Chairs, senior management and/or the Group General Counsel and Corporate Secretary regarding topical agenda items and proposed enhancements to Board and committee effectiveness. We believe that this continuous feedback cycle along with our formal annual evaluation process helps to ensure the continued effectiveness of our Board and its committees. Formal Self-Evaluation The Nominating and Governance Committee, with input from Board and committee Chairs, is responsible for overseeing the formal annual evaluation process, which includes the development and approval of the evaluation, its administration, summarization and collective reviews of the results, and the development and monitoring of any remediation plans. Our annual Board evaluations typically cover the following areas: Board and committee efficiency and overall effectiveness; Board and committee structure; Board and committee composition; satisfaction with the performance of the Chair; director access to Board leadership, the CEO and other members of senior management; quality of Board and committee discussions and balance between presentations and discussion; quality and clarity of materials presented to directors; Board and committee information needs; satisfaction with meeting agendas and the frequency and format of meetings and time allocations; areas where directors want to increase their focus; Board and committee dynamics and culture; Board and committee access to experts and advisors; and satisfaction with the format of the evaluation. Enhancements Made in Response Actions taken in response to the evaluation process during recent years include: ▪Streamlined Board committee structure and meeting cadence; ▪Management with varying degrees of seniority present to the Board and its committees; ▪Information and materials regularly provided to directors continue to evolve to alleviate “information overload” and to enable directors to focus on the key data; ▪Format of Board meetings has been altered to enable more time for director discussion in executive sessions; ▪Director education and presentations on emerging risk areas, corporate governance, industry disruptors and competitors; ▪Board members added with expertise in areas critical to the Company’s business strategy and operations; and ▪Enhanced discussion about key areas of Board and committee focus. | |||||||||||||
Conduct Evaluation Each director completes a written questionnaire on an unattributed basis for the Board and for each committee on which they serve. The questionnaires include open-ended questions and space for candid commentary. | ||||||||||||||
Collate Results Reports are produced summarizing the written questionnaires, which include all responses and highlight year-over-year trends. All comments are unattributed, included verbatim and shared with the full Board and each applicable committee. | ||||||||||||||
Review Feedback The Board Chair leads a discussion of the written Board and committee evaluation results at the Board level. Separately, each committee Chair leads a discussion of the applicable written committee evaluation at each committee meeting and reports on their discussions to the full Board. | ||||||||||||||
Respond to Director Input In response to feedback from the evaluation process, our Board and committees work with management to take concrete steps to improve policies, processes, and procedures to further Board and committee effectiveness. | ||||||||||||||
Enstar Group Limited / 28 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
DIRECTOR ORIENTATION AND CONTINUING EDUCATION
We have a comprehensive orientation program for all new directors. This orientation program includes one-on-one meetings with senior management, visits to our headquarters when possible, and extensive written materials to familiarize new directors with our business, financial performance, strategic plans, director and executive compensation programs, and corporate governance policies and practices.
We also offer continuing education to assist directors in enhancing their skills and knowledge to better perform their duties and to recognize, and deal appropriately with, issues that may arise. These programs may be part of regular Board and committee meetings or provided by qualified third parties on various topics. In addition, the Company pays for all reasonable expenses for any director who wishes to attend an external director continuing education program approved by the Board's Chair.
BOARD OVERSIGHT OF RISK MANAGEMENT
Inherent in the Board’s responsibilities is an understanding of and effective oversight over the various risks facing the Company. The Board does not view risk in isolation. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk taking is essential for the Company to be competitive on a global basis and to achieve the Company’s long-term strategic objectives. Ensuring appropriate governance structures, processes and procedures are in place to provide for effective risk management that is aligned with strategy and embedded throughout our operations is fundamental to the Board. This facilitates:
▪understanding critical risks in the Company’s business and strategy;
▪allocating responsibilities for risk oversight among the full Board and its committees;
▪evaluating the Company’s risk management processes and whether they are functioning adequately;
▪facilitating open communication between management and Directors; and
▪fostering an appropriate culture of integrity and risk awareness.
Our Risk Governance Documents
We are committed to responsible and rigorous risk management and through a comprehensive approach with a defined Enterprise Risk Management Framework ("ERM Framework") and Risk Appetite Framework (collectively, our "ERM Program"). Management and the Board regularly review the ERM Framework and Risk Appetite Framework to promote continuous enhancement and improvement. The ERM Framework sets forth roles, responsibilities, and accountability for the management of risk and describes how our Board oversees the establishment of our risk appetite, including both quantitative limits and qualitative statements and objectives for our activities. This framework of objective, independent Board oversight and management’s robust risk management better enables us to serve our clients, deliver long-term value for our shareholders, and achieve our strategic objectives.
Our ERM Framework serves as the foundation for consistent and effective risk management. It outlines the key risks that our Company faces: strategic risk, capital adequacy risk, acquisition/transaction risk, reserving risk, investment risk, liquidity risk, foreign exchange risk, credit/counterparty risk, operational risk, regulatory risk, tax risk, and ESG risk. It describes components of our risk management approach, including our culture of effectively managing risk, risk appetite, risk management processes, and risk management governance structure.
Our Risk Appetite Framework defines the aggregate levels and types of risk our Board and management believe appropriate to achieve our Company’s strategic objectives and business plans.
Enstar Group Limited / 29 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Our Risk Governance Structure
The Board, with the assistance of its committees, reviews and oversees our ERM Program, including management's implementation of the same. Our risk governance structure is designed to complement our Board’s commitment to maintaining an objective, independent Board and committee leadership structure, and to fostering integrity over risk management throughout our Company.
A summary of our risk governance structure is set out below. Further details of our Company’s risk management policies, practices and framework are described in "Item. 1 Business - Enterprise Risk Management" of our Annual Report on Form 10-K for the year ended December 31, 2021.
Enstar Group Limited / 30 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
| í | ||||||||
Board of Directors Our Board provides objective, independent oversight of risk and: ▪Receives regular updates from our Risk Committee and other Board committees, providing our Board with integrated, thorough insight about how our company manages risk. ▪Receives regular risk reporting from management including a report that provides updates on how key and emerging risks are being identified, assessed and mitigated. This includes comprehensive independent risk reviews of strategic initiatives (e.g. acquisitions). ▪Periodically holds stand-alone sessions at (and between) Board meetings to discuss the risks that are considered prevailing or urgent, including those identified in management’s report on key risks. Examples of key risk stand-alone discussion topics include risks related to COVID-19, information security, cybersecurity, sustainability, and human capital management (including diversity, equity and inclusion). ▪Oversees senior management’s development and implementation of our ERM Framework, our Risk Appetite Framework, and our capital, strategic, and financial operating plans. ▪Oversees directly and through committees our financial performance, execution against capital, strategic, and financial operating plans, compliance with risk appetite parameters, and the adequacy of internal controls, each of which our management monitors. ▪Directly oversees legal and compliance risk, and regularly receives updates from management on legal and compliance risk-related matters such as those arising from litigation. ▪Considers risk when reviewing material transactions and in connection with strategic planning and other matters. ▪Reviews and approves our ERM Framework and Risk Appetite Framework annually or more frequently in connection with material changes in the Company's risk profile. | Risk Committee Our Risk Committee has primary committee responsibility for overseeing the ERM Framework, our overall risk appetite, and material risks facing our company. The Committee regularly receives updates from management on risk-related matters and risk reporting from management and management risk committees, including a report that addresses and provides updates on key and emerging risks. The Committee also oversees senior management’s development of our ERM Framework and Risk Appetite Framework, and management’s alignment of our risk profile to our capital, strategic and operating plans. In addition, our Risk Committee approves our ERM Framework and Risk Appetite Framework on an annual basis and recommends them to the Board for approval. | |||||||
í | Audit Committee Our Audit Committee oversees the Company's internal controls over financial reporting. The Committee receives direct reports on internal controls from the Company’s Internal Audit leadership, who meets with the Committee on a quarterly basis and maintains an open dialogue with the Committee's Chair. | |||||||
í | Human Resources and Compensation Committee Our Human Resources and Compensation Committee oversees the development of our compensation policies and practices, which are designed to balance risk and reward in a way that does not encourage unnecessary or excessive risk-taking by our employees. The Committee also oversees and supports the Board in management succession planning. | |||||||
í | Nominating and Governance Committee Our Nominating and Governance Committee provides additional risk management oversight for corporate governance matters, including with respect to reviewing Board and Committee composition, and the Company’s relations with shareholders. | |||||||
í | Investment Committee Our Investment Committee provides additional risk management oversight for investment risk. The Committee regularly evaluates and tests the Company's investment portfolio and investment strategies under various stress scenarios, oversees compliance with investment guidelines (which assists the Company in monitoring its investment-related risks), and it monitors and evaluates the Company's internal investment management department and external investment managers. | |||||||
| 2 | ||||||||
Role of Management While the Board and its committees oversee the ERM Program, the Company's management team is charged with its implementation and ongoing maintenance. The Company has robust internal processes and an effective internal control environment that facilitates the identification and management of risks and regular communication with the Board. This includes an enterprise risk management system utilizing a 'Three Lines Model' with the first line comprising management designed and owned processes and controls, the second line comprising various risk controls and compliance oversight functions established by management, and the third line comprising independent assurance from our Internal Audit function and other outside agencies as required. Management communicates routinely with the Board, Board committees and individual directors on the significant risks identified and how they are being managed. Additionally, our Chief Risk Officer, the Company’s senior-most risk manager, reports jointly to the CEO and the Risk Committee, and participates in Board, Risk Committee, Audit Committee, and Investment Committee meetings. Our Head of Internal Audit also reports directly to the Audit Committee. | ||||||||
Enstar Group Limited / 31 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Oversight of Certain Key Risks
Oversight of COVID-19 Related Risks  | During 2021, in addition to COVID-19 discussions as part of risk updates to the Board and the relevant committees, the Board continued to be provided with updates on COVID-19’s impact to our business, financial condition and operations through memos, teleconferences or other appropriate means of communication. We have COVID-19 risk protocols and responses embedded across our operations and will continue to evaluate our approach in addressing COVID-19-related risks as circumstances evolve. | ||||
Oversight of Information Security Related Risks œ | The Board, directly and through the Risk Committee, also maintains oversight over information security and cybersecurity risk. The Board and Risk Committee receive and provide feedback on regular updates from management regarding information security and cybersecurity governance processes, the status of projects to strengthen internal information security and cybersecurity and also discuss any significant information or cyber incidents, including recent incidents throughout the industry and the emerging threat landscape. | ||||
Oversight of Climate Change Related Risks ¸ | The Risk Committee assists the Board in overseeing the management of long-term risks posed by climate change, including specific actions performed or to be performed in order to address the risks that climate changes poses to the Company. In addition, the Risk Committee reviews our sustainability programs and goals related to determining and reducing our climate impact in our operations and monitors our progress toward achieving such goals. | ||||
Oversight of Human Capital Management Related Risks  | The Board is actively engaged in overseeing senior management development and succession as well as the Company’s key human capital management strategies. The Human Resources and Compensation Committee oversees succession planning, talent optimization initiatives, HR strategy, incentive compensation, and progress related to diversity, equity and inclusion. The Nominating and Governance Committee oversees director succession planning. Both committees provide reports and feedback to the full Board for its collective review and discussion. | ||||
ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
Enstar has long emphasized corporate responsibility. Engagement with our shareholders in 2021 demonstrated that, although interest in ESG issues has existed for quite some time, there is a growing trend towards greater oversight, integration and reporting by companies on these issues. Many of the shareholders we spoke to during our annual engagement discussions held in early 2022 expressed an interest in learning more about our ESG initiatives. We have placed increased emphasis on the importance of ESG to deliver the Company’s strategy for the benefit of its shareholders while recognizing our role in the wider community, and providing stakeholders with regular and transparent reporting regarding the Company's ESG impacts. In March 2022, we released our inaugural Corporate Sustainability Report, as well as a SASB Report and a TCFD Report, each for the year ended December 31, 2021. These disclosure reflect recent feedback we heard from shareholders on ESG during our engagement discussions, and we plan to continue to incorporate feedback from shareholders into our ESG strategy and programs as they evolve. For more information regarding our ESG initiatives and related matters or to obtain copies our annual ESG reports, please visit the “Sustainability” section of our corporate website.
Enstar Group Limited / 32 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
ESG Governance Structure
Over the past year and a half, we formalized the oversight, executive leadership, and operationalization of the Company's ESG efforts, designing a structure to ensure these topics are integrated into the foundation of Enstar's governance framework. Sustainability is a key Board focus, with responsibility for ESG development and oversight primarily assigned to the Risk Committee, in coordination with other committees of the Board as appropriate. In September 2021, management established an ESG Oversight Group that includes senior executives from key functional areas and is led by our Group Chief Risk Officer. The ESG Oversight Group, by and through various ESG working groups it may establish from time to time, is responsible for implementing and reporting on the Company's ESG program to the Board and its committees.
ESG Strategy
Enstar's ESG strategy is informed by a materiality assessment, and focused on three primary areas:
¸ Addressing Climate Change Understand and mitigate the three major types of climate risk which may affect the sustainability of our business including insurance contracts we may assume. | è Sustainable Investing Explore and improve the sustainable impact of our investment activities while maintaining our objective of obtaining the highest possible level of risk-adjusted investment returns consistent with the preservation of capital, liquidity, and prudent diversification. | Developing our Human Capital f Support a diverse, equitable and inclusive workforce to become an employer of choice that draws strength, opportunities, and financial growth from the diversity of our workforce. | ||||||||||||
ESG Highlights
Select achievements from our 2021 ESG program are highlighted below:
| ù | |||||||||||
| Published our inaugural Corporate Sustainability Report, SASB Report, and TCFD Report | |||||||||||
| ¸ | Embedded consideration of climate-related physical, transition and liability risks across our business | |||||||
| è | $30m in impact investments made for the year ended December 31, 2021 | |||||||
| ¬ | § | ||||||||||||||||||||||
| Introduced new flexible working arrangements and a group-wide Wellbeing Platform to provide our employees with emotional, physical, and financial wellbeing support | Formalized a Vendor Code of Conduct setting out our expectations for vendors who provide goods and services to us in line with our ESG standards | ||||||||||||||||||||||
Enstar Group Limited / 33 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
CODE OF CONDUCT
We have adopted a Code of Conduct that applies to all of our directors and employees, including all senior executives and financial officers. A copy of our Code of Conduct is available on our website at http://www.enstargroup.com/corporate-governance by clicking on "Code of Conduct."
In addition, any shareholder may receive a copy of the Code of Conduct or any of our committee charters in print, without charge, by contacting Investor Relations at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton HM JX, Bermuda. We intend to post any amendments to our Code of Conduct on our website. In addition, we intend to disclose any waiver of a provision of the Code of Conduct that applies to our senior executives and financial officers by posting such information on our website or by filing a Form 8-K with the SEC within the prescribed time period. No such waivers currently exist.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
| Shareholders and other interested parties may send written communications directed to the Board, a committee of the Board, the Board's Chair, a committee Chair, independent directors as a group or an individual director, by mail to the address specified in this section. The notice may specify whether the communication is directed to the entire Board, to the independent directors, or to a particular Board committee or individual director. | + | Enstar Group Limited Attention: Corporate Secretary P.O. Box HM 2267 Windsor Place, 3rd Floor 22 Queen Street Hamilton HM JX Bermuda | |||||||||
Our Corporate Secretary's office will review any communications sent to the Board and provide the Board with a summary and copies of communications that relate to the functions of the Board or a Board committee or that otherwise warrant Board attention. In addition, the Office of the Corporate Secretary may forward certain communications only to the Board's Chair, the Chair of the relevant Board committee or the individual Board member to whom a communication is directed. Concerns relating to the Company’s accounting, internal accounting controls or auditing matters will be referred directly to members of the Audit Committee. Those items that are unrelated to the duties and responsibilities of the Board or its committees may not be provided to the Board by the Office of the Corporate Secretary, including, without limitation, business solicitations, advertisements and surveys; requests for donations and sponsorships; job referral materials such as resumes; unsolicited ideas and business proposals; and material that is determined to be illegal or otherwise inappropriate.
Enstar Group Limited / 34 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
DIRECTOR COMPENSATION
Director Compensation Program
Our Human Resources and Compensation Committee is responsible for periodically reviewing non-employee director compensation and making recommendations to our Board with respect to any changes. The Human Resources and Compensation Committee conducts a comprehensive review no less than biennially, which may include working with our independent compensation consultant.
In 2021, our director compensation program included:
▪a retainer payable quarterly for non-employee directors, and additional retainers payable quarterly for the Chairman of the Board and committee chairs;
▪an equity retainer payable annually in the form of restricted ordinary shares with a one-year vesting period for non-employee directors and the Chairman of the Board; and
▪meeting fees for all Board and committee meetings attended.
Directors who are employees of the Company receive no fees for their services as directors. Pursuant to the terms of his employment with Canada Pension Plan Investment Board ("CPP Investments"), cash fees earned by Mr. Winslow are paid directly to CPP Investments, and he has waived his equity retainer fee. Mr. Carey holds fees accrued for his service as a director solely for the benefit of Stone Point Capital, of which he is a Managing Director.
Our director retainer and meeting fees in place as of December 31, 2021 are set forth below. Committee fees differ due to workload and composition of each committee and are periodically evaluated by the Human Resources and Compensation Committee.
2021 Retainer Fees(1) | Annual Amounts Payable | 2021 Meeting Fees | Amounts Payable for Attendance | |||||||||||
Non-Employee Directors(2) | $175,000 | Board Meetings (in Person) | $3,500 | |||||||||||
Chairman of the Board(3) | $175,000 | Board Meetings (by teleconference) | $1,000 | |||||||||||
| Audit Committee Chairman | $10,000 | Audit Committee Meetings | $1,500 | |||||||||||
| Human Resources and Compensation Committee Chairman | $20,000 | Human Resources and Compensation Committee Meetings | $1,250 | |||||||||||
| Nominating and Governance Committee Chairman | $5,000 | Nominating and Governance Committee Meetings | $1,000 | |||||||||||
| Investment Committee Chairman | $5,000 | Investment Committee Meetings | $1,250 | |||||||||||
| Risk Committee Chairman | $10,000 | Risk Committee Meetings | $1,250 | |||||||||||
(1)Effective January 1, 2022, we revised the structure and amounts of our director retainer fees and removed meeting fees following a comprehensive review completed by the Human Resources and Compensation Committee during the year.
(2)$100,000 of the non-employee director retainer fee is payable restricted ordinary shares subject to a one-year vesting period and $75,000 is payable in cash.
(3)The Chairman of the Board retainer fee is in addition to the Non-Employee Director retainer fee. The Chairman's total retainer fees are payable half in cash and half in restricted ordinary shares subject to a one-year vesting period.
Deferred Compensation Plan
The Amended and Restated Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors (the "Deferred Compensation Plan") provides each non-employee director with the opportunity to elect (i) to defer receipt of all or a portion of his or her cash or equity compensation until retirement or termination
Enstar Group Limited / 35 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
and (ii) to receive all or a portion of his or her cash compensation for services as a director in the form of our ordinary shares instead of cash.
Non-employee directors electing to defer compensation have such compensation converted into share units payable as a lump sum distribution after the director leaves the Board. The lump sum share unit distribution is made in the form of ordinary shares, with fractional shares paid in cash. Non-employee directors electing to receive compensation in the form of ordinary shares receive whole ordinary shares (with any fractional shares payable in cash) as of the date compensation would otherwise have been payable. A director's participation in the Deferred Compensation Plan does not affect the vesting schedule of the equity portion of the retainer fees described above.
Director Compensation Table
The following table summarizes the 2021 compensation of our non-employee directors who served during the year.
| Name | Fees Earned or Paid in Cash(1)(2) | Stock Awards(3) | Total | ||||||||||||||
| Robert Campbell | $ | 210,250 | $ | 175,000 | $ | 385,250 | |||||||||||
| B. Frederick Becker | $ | 140,250 | $ | 100,000 | $ | 240,250 | |||||||||||
Sharon A. Beesley(4) | $ | 78,000 | $ | 50,000 | $ | 128,000 | |||||||||||
James Carey(5) | $ | 91,000 | $ | 100,000 | $ | 191,000 | |||||||||||
| Susan L. Cross | $ | 104,500 | $ | 100,000 | $ | 204,500 | |||||||||||
| Hans-Peter Gerhardt | $ | 98,500 | $ | 100,000 | $ | 198,500 | |||||||||||
| W. Myron Hendry | $ | 92,750 | $ | 100,000 | $ | 192,750 | |||||||||||
Jie Liu(6) | $ | 21,000 | $ | — | $ | 21,000 | |||||||||||
| Hitesh Patel | $ | 135,500 | $ | 100,000 | $ | 235,500 | |||||||||||
Poul Winslow(7) | $ | 99,250 | $ | — | $ | 99,250 | |||||||||||
(1)Director fees listed in this column may be deferred by directors under the Deferred Compensation Plan.
(2)Share units (rounded to the nearest whole share) acquired in lieu of the cash compensation portion of director retainer fees for 2021 under the Deferred Compensation Plan were as follows: (a) Mr. Campbell — 910 units; (b) Mr. Carey — 394 units; and (c) Mr. Patel — 253 units. Total share units under the Deferred Compensation Plan held by directors as of the record date are described in the footnotes to the Principal Shareholders and Management Ownership table. Mr. Patel received 133 ordinary shares in lieu of fees earned in cash for 2021.
(3)This column lists the aggregate grant date fair value of Enstar restricted ordinary shares awarded to directors as part of their Board retainer and Chairman of the Board retainer, computed in accordance with FASB Accounting Standards Codification (ASC) Topic 718. The value of the restricted ordinary shares is determined based on the closing price of our ordinary shares on the grant date. For information on the valuation assumptions with respect to awards made, refer to Note 20 to our consolidated financial statements for the year ended December 31, 2021, as included in our Annual Report on Form 10-K for the year ended December 31, 2021. The amounts above reflect the grant date fair value for these awards, excluding the accounting effect of any estimate of future forfeitures, and do not necessarily correspond to the actual value that might be recognized by the directors. Restricted ordinary shares are subject to a one-year vesting period and are forfeited in their entirety if a director leaves the Board prior to the vesting date. Restricted ordinary share awards listed in this column may be deferred by directors under the Deferred Compensation Plan in the form of restricted share units, subject to the same one-year vesting period ("RSUs"). The number of restricted ordinary shares or RSUs (rounded to nearest whole share) acquired by our directors during 2021 was as follows: (a) Mr. Campbell — 710 RSUs; (b) Mr. Becker — 405 restricted ordinary shares; (c) Ms. Beesley – 210 restricted ordinary shares; (d) Mr. Carey – 405 RSUs; (e) Ms. Cross – 405 restricted ordinary shares; (f) Mr. Gerhardt — 405 restricted ordinary shares; (g) Mr. Hendry — 405 RSUs; (h) Mr. Patel — 405 RSUs. Fractional amounts are payable in cash at the time of vesting. Total restricted ordinary shares and RSUs held by directors as of the record date are described in the footnotes to the Principal Shareholders and Management Ownership table.
(4)Ms. Beesley was appointed to the Board effective October 1, 2021.
(5)Mr. Carey holds fees accrued for his service as a director solely for the benefit of Stone Point Capital, of which he is a Managing Director.
(6)Fees earned by Mr. Liu in cash were payable directly to Hillhouse Group pursuant to the terms of his employment. Mr. Liu resigned from our Board effective February 7, 2021.
(7)Mr. Winslow has waived his annual equity retainer. Fees earned by him in cash are payable directly to CPP Investments pursuant to the terms of his employment.
Enstar Group Limited / 36 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
EXECUTIVE OFFICERS
| Dominic Silvester | Chief Executive Officer | ||||||||||
| Biographical Information Dominic Silvester has served as a director and the Chief Executive Officer of the Company since its formation in 2001. In 1993, Mr. Silvester began a business venture in Bermuda to provide run-off services to the insurance and reinsurance industry. In 1995, the business was assumed by Enstar Limited, which is now a subsidiary of the Company, and for which Mr. Silvester has since then served as Chief Executive Officer. Prior to co-founding the Company, Mr. Silvester served as the Chief Financial Officer of Anchor Underwriting Managers Limited from 1988 until 1993. | ||||||||||
Officer Since: 2001 | Age: 61 | ||||||||||
| Paul O'Shea | President | ||||||||||
| Biographical Information Paul O’Shea was appointed as President of the Company in December 2016. He previously served as Executive Vice President and Joint Chief Operating Officer of the Company since our formation in 2001, and has also been a director throughout this time. He has led our mergers and acquisitions operations, including overseeing our transaction sourcing, due diligence, and negotiations processes. In 1994, Mr. O’Shea joined Dominic Silvester in his run-off business venture in Bermuda, and he served as a director and Executive Vice President of Enstar Limited, which is now a subsidiary of the Company, from 1995 until 2001. Prior to co-founding the Company, he served as the Executive Vice President, Chief Operating Officer and a director of Belvedere Group/Caliban Group from 1985 until 1994. | ||||||||||
Officer Since: 2001 | Age: 64 | ||||||||||
| Orla Gregory | Acting Chief Financial Officer and Chief Operating Officer | ||||||||||
| Biographical Information Orla Gregory was appointed to the role of Acting Chief Financial Officer in September 2021 and has served as the Company's Chief Operating Officer since 2016. She has also served as a director since February 2022. Since joining the Company in 2003, Ms. Gregory has held increasingly senior roles, including Chief Integration Officer from 2015 to 2016; Executive Vice President of Mergers and Acquisitions of our subsidiary, Enstar Limited, from 2014 to 2015; Senior Vice President of Mergers and Acquisitions from 2009 to 2014, and Financial Controller from 2003 to 2009. Ms. Gregory served as Financial Controller of Irish European Reinsurance Company Ltd. in Ireland from 2001 to 2003, and she was an Investment Accountant with Ernst & Young Bermuda 1999 to 2001. Prior to that, Ms. Gregory worked for QBE Insurance & Reinsurance (Europe) Limited in Ireland from 1993 to 1998 as a Financial Accountant. | ||||||||||
Officer Since: 2015 | Age: 47 | ||||||||||
Enstar Group Limited / 37 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
| Nazar Alobaidat | Chief Investment Officer | ||||||||||
 | Biographical Information Nazar Alobaidat joined Enstar as Chief Investment Officer in 2016. He formerly served as Managing Director and CIO of AIG Property Casualty’s U.S., Canada and Bermuda regions and was with AIG from 2009-2016. Prior to that, he served as Vice President within the investment banking division of Lehman Brothers and Barclays Capital, specializing in derivatives and financing transactions for corporate clients of the investment bank. He previously served in the capital markets group of Deloitte from 2001-2006. Mr. Alobaidat is also a Certified Public Accountant. | ||||||||||
Officer Since: 2019 | Age: 44 | ||||||||||
| Paul Brockman | Chief Claims Officer | ||||||||||
 | Biographical Information Paul Brockman was appointed Chief Claims Officer in September 2020. He previously served as the President and Chief Executive Officer of Enstar (US) Inc. ("Enstar US") from July 2016 to September 2020. He served as President and Chief Operating Officer of Enstar US from November 2014 to July 2016. From October 2012 to November 2014, he served as Senior Vice President, Head of Commutations for Enstar US. Before joining Enstar US, he worked as Head of Reinsurance for Resolute Management Services UK Ltd. in its London office from April 2007 to October 2012 and, from April 2001 to April 2007, he worked as Manager of Reinsurance Cash Collection and Debt Litigation within the reinsurance asset division of Equitas Management Services Ltd in London. | ||||||||||
Officer Since: 2016 | Age: 49 | ||||||||||
| Audrey Taranto | General Counsel | ||||||||||
 | Biographical Information Audrey Taranto has served as General Counsel since February 2019. From June 2017 to February 2019, she served as Group Head of Legal and from to April 2012 to June 2017 as SVP, Securities Counsel. She continues to serve as the Company’s Corporate Secretary, a position she has held since 2012. Prior to 2012, she was Senior Counsel and Assistant Corporate Secretary at Cigna Corporation and an Associate in the corporate department of Drinker Biddle & Reath LLP. | ||||||||||
Officer Since: 2020 | Age: 42 | ||||||||||
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CORPORATE GOVERNANCE
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The table below sets forth information as of April 4, 2022 (unless otherwise indicated) regarding beneficial ownership of our voting ordinary shares by each of the following, in each case based on information provided to us by these individuals:
▪each person or group known to us to be the beneficial owner of more than 5% of our ordinary shares;
▪each of our current directors and director nominees;
▪each of the individuals named in the Summary Compensation Table; and
▪all of our current directors and executive officers as a group.
The table describes the ownership of our voting ordinary shares (including restricted voting ordinary shares), which are the only shares entitled to vote at the Annual General Meeting. Percentages are based on 16,506,173 ordinary shares outstanding as of April 4, 2022. Certain shareholders listed in the table also hold non-voting ordinary shares, as described in "-Non-Voting Ordinary Shares."
Voting Ordinary Shares
Unless otherwise indicated, each person has sole voting and dispositive power with respect to all shares shown as beneficially owned by them.
| Name of Beneficial Owner | Number of Shares | Percent of Class | ||||||
Stone Point Capital LLC(1) | 1,635,986 | 9.9% | ||||||
Canada Pension Plan Investment Board(2) | 1,501,211 | 9.1% | ||||||
The Vanguard Group(3) | 1,066,503 | 6.5% | ||||||
Wellington Management Group LLP(4) | 1,038,942 | 6.3% | ||||||
BlackRock, Inc.(5) | 880,637 | 5.3% | ||||||
Poul Winslow (as a Trustee of CPPIB Epsilon Ontario Trust)(6) | 741,735 | 4.5% | ||||||
Dominic Silvester(7) | 585,022 | 3.5% | ||||||
Paul O’Shea(8) | 242,287 | 1.5% | ||||||
Robert Campbell(9) | 185,212 | 1.1% | ||||||
Orla Gregory(10) | 47,790 | * | ||||||
Hans-Peter Gerhardt(11) | 13,578 | * | ||||||
Paul Brockman(12) | 8,433 | * | ||||||
James Carey(13) | 7,706 | * | ||||||
B. Frederick Becker(14) | 5,241 | * | ||||||
Hitesh Patel(15) | 5,327 | * | ||||||
Nazar Alobaidat(16) | 3,974 | * | ||||||
W. Myron Hendry(17) | 1,381 | * | ||||||
Susan L. Cross(18) | 1,092 | * | ||||||
Sharon A. Beesley(19) | 591 | * | ||||||
Guy Bowker(20) | — | * | ||||||
Zachary Wolf(21) | 3,222 | * | ||||||
All Current Executive Officers and Directors as a group (15 persons)(22) | 1,854,270 | 11.2% | ||||||
* Less than 1%
(1)Based on information provided in a Schedule 13D/A filed jointly on June 22, 2020 by Trident V, L.P. (“Trident V”), Trident Capital V, L.P. (“Trident V GP”), Trident V Parallel Fund, L.P. (“Trident V Parallel”), Trident Capital V-PF, L.P. (“Trident V Parallel GP”), Trident V Professionals Fund, L.P. (“Trident V Professionals” and, together with Trident V and Trident V Parallel, the “Trident V Funds”), Stone Point GP Ltd. (“Trident V Professionals GP” and, together with Trident V GP and Trident V Parallel GP, the “Trident V GPs”) (collectively, the “Stone Point Partnerships”), Stone Point Capital LLC (“Stone Point”), Trident Public Equity LP (“TPE LP”) and Trident Public Equity GP LLC
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CORPORATE GOVERNANCE
("TPE GP"). Each of the following persons may be deemed to beneficially own an aggregate of the 1,635,986 Ordinary Shares held by or held for TPE LP: (i) each of the Trident V Funds, which has shared voting and dispositive power with respect to such shares; (ii) Trident V GP, in its capacity as sole general partner of Trident V; (iii) Trident V Parallel GP, in its capacity as sole general partner of Trident V Parallel; (iv) Trident V Professionals GP, in its capacity as sole general partner of Trident V Professionals; (v) Stone Point, in its capacity as the manager of each of the Trident V Funds; and (vi) TPE GP, in its capacity as sole general partner of TPE LP. James Carey, a member of our Board, is a member and Managing Director of Stone Point, an owner of one of four general partners of each of Trident V GP and Trident V Parallel GP, and a shareholder and director of Trident V Professionals GP. See footnote 13 with respect to 7,706 ordinary shares issuable to Mr. Carey pursuant to the Deferred Compensation Plan and not included in Stone Point’s total reported holdings of 1,635,986 shares. Although these share units accrue to Mr. Carey personally, he holds these share units solely for the benefit of Stone Point, which may be deemed an indirect beneficial owner. The principal address for each Stone Point entity is c/o Stone Point at its principal address, which is 20 Horseneck Lane, Greenwich, CT 06830.
(2)Based on information provided in a Schedule 13D/A filed jointly on June 15, 2018 by (a) CPP Investments, (b) CPPIB Epsilon Ontario Limited Partnership ("CPPIB LP"), (c) CPPIB Epsilon Ontario Trust ("CPPIB Trust"), (d) Poul A. Winslow and (e) R. Scott Lawrence. CPP Investments' reported holding of 1,501,211 ordinary shares excludes 741,735 ordinary shares held indirectly through CPPIB LP. CPPIB Trust is the general partner of CPPIB LP, and Messrs. Winslow and Lawrence are trustees of CPPIB Trust. By virtue of their roles as a trustee of CPPIB Trust, Messrs. Winslow and Lawrence have shared voting and shared dispositive power over the shares. CPP Investments also owns 1,192,941 Series C non-voting ordinary shares and 404,771 Series E non-voting ordinary shares. The principal address of the above persons and entities is One Queen Street East, Suite 2500 Toronto, ON M5C 2W5 Canada.
(3)Based on information provided in a Schedule 13G/A filed on February 10, 2022 by The Vanguard Group ("Vanguard"). Vanguard has shared voting power over 11,031 shares, sole dispositive power over 1,045,184 shares and shared dispositive power over 21,319 shares. The principal address for Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
(4)Based on information provided in a Schedule 13G/A filed on February 4, 2022 by Wellington Management Group LLP ("Wellington"), Wellington Group Holdings LLP ("Wellington Holdings") and Wellington Investment Advisors Holdings LLP ("Wellington Advisors"). Wellington, Wellington Holdings and Wellington Advisors have shared voting power over 848,697 shares and shared dispositive power over 1,038,942 shares. The principal address for Wellington, Wellington Holdings and Wellington Advisors is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210.
(5)Based on information provided in a Schedule 13G filed on February 4, 2022 by BlackRock, Inc. ("BlackRock"). BlackRock has sole voting power over 853,427 shares and sole dispositive power over 880,637 shares. The principal address for BlackRock is 55 East 52nd Street, New York, NY 10055.
(6)Consists of 741,735 shares held by CPPIB LP. Mr. Winslow is one of two trustees of the CPPIB Trust, which is the general partner of CPPIB LP, but he has no pecuniary interest in the shares held by CPPIB LP. Mr. Winslow disclaims any beneficial ownership of the shares owned by CPP Investments. See footnote 2.
(7)Consists of (a) 101,854 ordinary shares held directly by Mr. Silvester and (b) 483,168 shares held indirectly by Rock Pigeon Limited, a Guernsey company, of which Mr. Silvester and his spouse own 58.66% and 41.34%, respectively. Does not include Mr. Silvester's Joint Share Ownership Interest in 565,630 ordinary shares relating to an award granted to Mr. Silvester under our Joint Share Ownership Plan, a sub-plan of our Amended and Restated 2016 Equity Incentive Plan. Under the terms of a joint share ownership agreement between Enstar, Mr. Silvester and the trustee of the Enstar Group Limited Employee Benefit Trust, Mr. Silvester holds a shared ownership interest with the Trustee in the ordinary shares underlying the award, subject to certain vesting and other conditions. The Trustee holds the legal title of all the ordinary shares underlying the award, and all voting rights in respect of the shares underlying the award have been waived.
(8)Consists of (a) 90,813 ordinary shares held directly by Mr. O’Shea and (b) 147,831 ordinary shares held by the Elbow Trust (of which Mr. O'Shea and his immediate family are the sole beneficiaries). The trustee of the Elbow Trust is R&H Trust Co. (BVI) Ltd. 12,500 ordinary shares held directly by Mr. O'Shea and all ordinary shares held by the Elbow Trust are held in margin accounts. As of April 4, 2022, the aggregate margin balance on such accounts was $1.3 million.
(9)Consists of 43,556 ordinary shares held directly by Mr. Campbell, (b) 42,500 ordinary shares held by a self-directed pension plan, (c) 32,300 ordinary shares owned by Mr. Campbell’s spouse, (d) 25,050 ordinary shares owned by Osprey Partners, (e) 12,400 ordinary shares owned by Mr. Campbell’s children, (f) 3,000 ordinary shares owned by the Robert J. Campbell Family Trust, (g) 2,500 ordinary shares owned by the F.W. Spellissy Trust, (h) 500 ordinary shares owned by the Amy S. Campbell Family Trust, and (i) 22,706 ordinary shares issuable pursuant to the Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors.
(10)Consists of 47,790 ordinary shares held directly by Ms. Gregory.
(11)Consists of 13,197 ordinary shares held directly by Mr. Gerhardt and 381 restricted ordinary shares held directly by Mr. Gerhardt scheduled to vest on April 1, 2023.
(12)Consists of 8,433 ordinary shares held directly by Mr. Brockman.
(13)Consists of 7,706 ordinary shares issuable pursuant to the Deferred Compensation Plan held by Mr. Carey solely for the benefit of Stone Point, of which Mr. Carey is a Managing Director. Mr. Carey disclaims beneficial ownership of these share units, except to the extent of his pecuniary interest therein, if any. Stone Point may be deemed an indirect beneficial owner of these ordinary shares. Does not include the ordinary shares held by the Trident V Funds described in footnote 1. Mr. Carey is a member of the investment committee and owner of one of the four general partners of both of Trident V GP (the general partner of Trident V) and Trident V Parallel GP (the general partner of Trident V Parallel). Mr. Carey is also a member and Managing Director of Stone Point and a shareholder and director of Trident V Professionals GP, which is the general partner of Trident V Professionals. Mr. Carey disclaims beneficial ownership of the shares held of record or beneficially by Stone Point, except to the extent of any pecuniary interest therein.
(14)Consists of (a) 1,060 ordinary shares held directly by Mr. Becker, (b) 381 restricted ordinary shares held directly by Mr. Becker scheduled to vest on April 1, 2023 and (c) 3,800 ordinary shares issuable to Mr. Becker pursuant the Deferred Compensation Plan. Mr. Becker also holds 1,000 Depositary Shares, each representing a 1/1000th interest in a 7% Perpetual Non-Cumulative Series E Preferred Share issued by the Company not reflected in the table above.
(15)Consists of 484 ordinary shares held directly by Mr. Patel and 4,843 ordinary shares issuable to Mr. Patel pursuant to the Deferred Compensation Plan.
(16)Consists of 3,974 ordinary shares held directly by Mr. Alobaidat.
(17)Consists of 1,381 ordinary shares issuable to Mr. Hendry pursuant the Deferred Compensation Plan.
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CORPORATE GOVERNANCE
(18)Consists of 711 ordinary shares held directly by Ms. Cross and 381 restricted ordinary shares held directly by Ms. Cross scheduled to vest on April 1, 2023.
(19)Consists of 209 restricted ordinary shares scheduled to vest to Ms. Beesley on October 1, 2022 and 381 restricted ordinary shares scheduled to on April 1, 2023.
(20)Mr. Bowker resigned as Enstar's Chief Financial Officer on March 1, 2021.
(21)Consists of 3,222 ordinary shares held directly by Mr. Wolf. Mr. Wolf resigned as Enstar's Chief Financial Officer on August 10, 2021.
(22)See footnotes 5 through 18.
Non-Voting Ordinary Shares
In addition to voting ordinary shares, we had a total of 1,597,712 issued and outstanding non-voting ordinary shares as of April 4, 2022. These shares are held by CPP Investments as set forth in the table below.
| Name of Beneficial Owner | Ordinary Voting Shares | Series C Non-Voting Ordinary Shares | Series E Non-Voting Ordinary Shares | Economic Interest | ||||||||||
| CPP Investments and CPPIB Trust | 2,242,946 | 1,192,941 | 404,771 | 21.2 | % | |||||||||
For additional information on our non-voting ordinary shares, refer to Note 18 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.
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CORPORATE GOVERNANCE
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Person Transaction Procedures
From time to time, we have participated in transactions in which one or more of our directors, executive officers or large shareholders has an interest. These transactions, called related-party transactions, are described below. All related-party transactions require the approval of our Audit Committee (comprised entirely of independent directors), which reviews each transaction for fairness, business purpose, and reasonableness. Each transaction involving the Company and an affiliate entered into during 2021 was approved by our Audit Committee. Investment transactions with related parties are also subject to the review and approval of our Investment Committee.
In addition, our Board has adopted a Code of Conduct, which states that our directors, officers and employees must avoid engaging in any activity that might create a conflict of interest or a perception of a conflict of interest. The Code of Conduct requires these individuals to raise any proposed or actual transaction that they believe may create a conflict of interest for Audit Committee consideration and review. In any situation where an Audit Committee member could be perceived as having a potential conflict of interest, that member is expected to recuse himself or herself from the matter, and the non-interested members of the Audit Committee review the transaction. In addition, our directors and executive officers are required to declare any interests or potential conflicts of interest annually, and update these declarations on an ongoing basis. Certain of our directors and executive officers have made personal commitments and investments in entities that are affiliates of, or otherwise related to, funds managed by or companies affiliated with Stone Point Capital LLC ("Stone Point") and Hillhouse Group, including some of the those reflected in the disclosure below. A summary of all declared interests is provided to the Board regularly.
On an annual basis, each director and executive officer completes a Directors’ and Officers’ Questionnaire that requires disclosure of any transactions with the Company in which he or she, or any member of his or her immediate family, has a direct or indirect material interest. A summary of responses from the questionnaires is reported to the Audit Committee.
Transactions Involving Related Persons
Stone Point and its Affiliates
Investment funds managed by Stone Point own an aggregate of 1,635,986 of our Voting Ordinary Shares (which constitutes approximately 9.9% of our outstanding voting ordinary shares), which were acquired through several private transactions occurring from May 2012 to July 2012 and an additional private transaction that closed in May 2018. James D. Carey, one of our directors, is the sole member of an entity that is one of four general partners of the entities serving as general partners for the Trident funds, is a member of the investment committees of such general partners, and is a member and Managing Director of Stone Point.
Investments
We have made various investments in funds and separate accounts managed by Stone Point or affiliates of Stone Point, and we have also made direct investments in entities affiliated with Stone Point. The table below summarizes our investments related to Stone Point and the fees we have paid to Stone Point and its affiliates in connection with such investments. Regarding these investments:
•Where we have made an investment in a fund, the manager of such fund generally charges certain fees to the fund, which are deducted from the net asset value.
•The aggregate fee amounts in respect of fund investments included in the table below are estimated using the fee provisions applicable to each fund pursuant to the relevant subscription documents. No cash payments were made in respect of these fee amounts.
•We are treated no less favorably than similarly situated investors in these funds, and fees charged pursuant to investments affiliated with Stone Point were on an arm's-length basis.
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CORPORATE GOVERNANCE
| Investment | Carrying Value as of December 31, 2021 | 2021 Aggregate Fees | Outstanding Commitments as of December 31, 2021 | ||||||||
| (in millions of U.S. dollars) | |||||||||||
Investments in Funds and Separate Accounts managed by Stone Point and its affiliates(1) | $ | 1,105 | $ | 18 | $ | 239 | |||||
Direct Investment in Stone Point Credit Corporation(2) | $ | 25 | $ | 0.5 | $ | 25 | |||||
Direct Investment in Mitchell TopCo Holdings(3) | $ | 25 | N/A | $ | — | ||||||
Direct Investment in T-VIII Celestial Co-Invest LP(4) | $ | 14 | N/A | $ | 0.5 | ||||||
Direct Investment in Evergreen Parent L.P.(5) | $ | 224 | N/A | $ | — | ||||||
(1)Includes investments managed by Stone Point or one of the following entities in which funds managed by Stone Point have ownership interests: Eagle Point Credit Management LLC, SKY Harbor Capital Management, LLC, PRIMA Capital Advisors, LLC, Henderson Park Capital, and Marble Point Investments LP. Mr. Carey is a member of the board of managers of Eagle Point Credit Management LLC. Also includes investments managed by Sound Point Capital Management, L.P., in which Mr. Carey has an indirect minority ownership and for which he serves as a member of its board of managers.
(2)Investment in Stone Point Credit Corporation, a business development company and affiliate of Stone Point.
(3)Co-investment alongside an affiliate of Stone Point in Mitchell TopCo Holdings, the parent company of Mitchell International ("Mitchell"), and Genex Services.
(4)On March 19, 2021, we entered into a commitment letter to invest $12 million in T-VIII Celestial Co-Invest LP, an entity formed by Stone Point to participate in a private equity transaction to acquire CoreLogic, Inc. (NYSE: CLGX). The transaction closed on April 20, 2021.
(5)We have an 8.5% interest in Evergreen Parent L.P. ("Evergreen"), the parent company of AmTrust Financial Services, Inc., and an affiliate of Stone Point owns 21.8% of the equity interests of Evergreen.
During 2021 and the first quarter of 2022, we entered into the following transactions in which Stone Point and/or its affiliates had an interest:
•On August 31 2021, Mitchell agreed to provide third-party outsourcing managed care services to one of our subsidiaries in the ordinary course of business. During 2021 we incurred $8 million of fees associated with these services.
•On January 1, 2022, we invested $53 million in Eagle Point Credit Partners, a fund that is managed by an entity in which Stone Point has an interest.
•On February 22, 2022, we invested $125 million into Sky Harbor Short Duration High Yield Fund, an entity that is managed by Sky Harbor Capital Management, which is an entity owned in part by funds managed by Stone Point.
•On February 28, 2022, we invested $50 million into a separate account managed by Eagle Point Credit Management LLC, an entity which is owned in part by funds managed by Stone Point.
StarStone and Atrium
On November 30, 2020, we and Stone Point completed the sale and recapitalization of StarStone U.S.'s U.S. business ("StarStone U.S.") to Core Specialty Insurance Holdings, Inc. ("Core Specialty") in a transaction described in Note 5 - "Divestitures, Held-for-Sale Businesses and Discontinued Operations" to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. As of December 31, 2020, we owned an indirect 59.0% interest in North Bay Holdings Limited ("North Bay"), and the Trident V Funds and the Dowling Funds owned 39.3% and 1.7%, respectively. As of December 31, 2020, North Bay owned 100.0% of StarStone Specialty Holdings Limited (“SSHL”), the holding company for the StarStone Group, which previously included StarStone U.S. North Bay also owned 92.1% of Northshore Holdings Limited ("Northshore"), the holding company that owned Atrium Underwriting Group Limited and its subsidiaries (collectively, "Atrium") and Arden Reinsurance Company Ltd. ("Arden") as of December 31, 2020, with the remaining share ownership of Northshore being held on behalf of certain Atrium employees.
On January 1, 2021, following the sale of StarStone U.S., pursuant to the terms of a Recapitalization Agreement entered into on August 13, 2020 among us, the Trident V Funds and the Dowling Funds, we exchanged a portion of
Enstar Group Limited / 43 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
our indirect interest in Northshore for all of the Trident V Funds’ indirect interest in StarStone U.S., which was owned through an interest in Core Specialty (the “Exchange Transaction”). Following the Exchange Transaction, we own 24.7% of Core Specialty on a fully diluted basis, which in turn owns StarStone U.S., and 13.8% of Northshore, which continues to own Atrium and Arden. Furthermore, the Trident V Funds no longer own any interest in Core Specialty but own 76.3% of Northshore, while the Dowling Funds own 0.4% of Core Specialty and 1.6% of Northshore. The Exchange Transaction had no impact on the ultimate ownership of SSHL, which continues to own StarStone's international business ("StarStone International"), with us, the Trident V Funds and the Dowling Funds retaining our and their current ownership interests in SSHL of 59.0%, 39.3% and 1.7%, respectively. The Trident V Funds have an obligation with respect to their proportionate share of an intercompany receivable from North Bay to our wholly owned subsidiary in the amount of $12.6 million (plus accrued interest), which is required to be offset by its share of any future distributions from StarStone International. StarStone International was placed into an orderly run-off on June 10, 2020. Effective January 1, 2021, Northshore was deconsolidated and our remaining investment with a carrying value of $37 million as of December 31, 2021 is accounted for as a privately held equity investment and carried at its fair value. During the first quarter of 2021, we recognized a loss of $8 million on completion of the Exchange Transaction. Following the Exchange Transaction, North Bay no longer held any direct or indirect interest in Northshore, SSHL or Core Specialty and on October 26, 2021, North Bay was liquidated.
On March 15, 2021, we and Stone Point sold StarStone Underwriting Limited ("SUL"), a Lloyd's managing agency, together with the right to operate Lloyd's Syndicate 1301, to Inigo Limited ("Inigo"). We, the Trident V Funds and the Dowling Funds received $30.0 million of consideration from the sale of SUL in the form of Inigo shares and $1 million in cash. Following the completion of the sale of SUL to Inigo on March 15, 2021, we recognized a gain on the sale of $23 million in the first quarter of 2021. In addition, we and the Trident V Funds have committed to invest up to $27.0 million and $18.0 million, respectively, in Inigo. In connection with our investment in Inigo, on November 17, 2020, we committed to lend Trident V up to $18 million. No amount was drawn on the commitment, and on February 12, 2021, the commitment was terminated. As of December 31, 2021, Enstar had funded $17 million of its capital commitment to Inigo, with $10 million yet to be called by Inigo. As of December 31, 2021, our investment in Inigo was carried at $43 million (December 31, 2020: $17 million) representing 5.4% of the total outstanding ordinary shares of Inigo and was accounted for as a privately held equity investment and carried at fair value. In conjunction with the transaction, Enstar, the Trident V Funds and the Dowling Funds will retain the economics of Syndicate 1301’s 2020 and prior years’ underwriting years of account as this business runs off.
In connection with the closing of the Exchange Transaction, we entered into amended and restated shareholders’ agreements with the Trident V Funds and the Dowling Funds with respect to our investment in SSHL and Northshore. Pursuant to the terms of the SSHL shareholders agreement, at any time after December 31, 2022, the Trident V Funds have the right to cause us to purchase their shares in SSHL at their fair market value, and the Dowling Funds have the right to participate in any such sale transaction initiated by the Trident V Funds. We would be entitled to pay the purchase price for such SSHL shares in cash or in unrestricted ordinary shares of Enstar that are then listed or admitted to trading on a national securities exchange. At any time after March 31, 2023, we will have the right to cause the Trident V Funds and the Dowling Funds to sell their shares in SSHL to us at their fair market value. We would be obligated to pay the purchase price for such SSHL shares in cash.
Pursuant to the terms of the Northshore shareholders agreement, our shares in Northshore are subject to an 18-month restriction on transfer following the Exchange Transaction, after which the Trident V Funds have a right of first offer to acquire our shares in Northshore if we wish to sell them. We have certain rights to participate in sales of Northshore shares by the Trident V Funds, and the Trident V Funds have certain rights to cause us to sell our Northshore shares if the Trident V Funds wish to sell control of Northshore or the Atrium business.
Our subsidiary Cavello Bay Reinsurance Limited entered into a $5 million xs $130 million excess of loss reinsurance agreement, effective December 31, 2021, with StarStone Insurance SE, which is part of StarStone International, to a Construction All Risk policy for a premium of $9 thousand.
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CORPORATE GOVERNANCE
Monument Re
On July 27, 2021, we entered into a subscription agreement with Monument Insurance Group Limited ("Monument Re") and its other common shareholders to subscribe to a newly issued class of Monument Re preferred stock. As part of this agreement, our existing classes of preferred shares in Monument Re (including any accrued unpaid dividends thereon) was exchanged for the new class of preferred shares. Following the transaction we continue to own 20.0% of the common shares of Monument Re and 24.4% of the new class of preferred shares as of December 31, 2021, which is reduced to 13.7% on a committed capital basis. A fund managed by Stone Point has acquired 6.7% of the new class of preferred shares as of December 31, 2021, which increases to 11.2% on a committed capital basis. This transaction closed on December 14, 2021.
Hillhouse Group (Former Related Party)
On July 22, 2021, we repurchased the Hillhouse Funds’ (as defined below) entire equity interest in Enstar, and as a result the Hillhouse Group (as defined below) ceased to be a related party on the same date. Certain of our directors and executive officers have made personal commitments and investments in entities managed by Hillhouse Group, including some of the entities listed herein.
We have historically made significant direct investments in funds (the "Hillhouse Funds") managed by Hillhouse Capital Management, Ltd. and Hillhouse Capital Advisors, Ltd. (together, "Hillhouse Group") and AnglePoint Asset Management Ltd., an affiliate of Hillhouse Group ("AnglePoint Cayman"). From February 2017 to February 2021, Jie Liu, a partner of AnglePoint HK (as defined below), served on our Board.
On February 21, 2021, we entered into a Termination and Release Agreement (the "TRA") with the InRe Fund, Hillhouse Group, AnglePoint Cayman, AnglePoint Asset Management Limited (“AnglePoint HK”), and InRe Fund GP, Ltd. (“InRe GP”) pursuant to which we agreed to terminate certain relationships with Hillhouse and its affiliates, primarily with respect to the InRe Fund. In connection with AnglePoint Cayman ceasing to serve as investment manager of the InRe Fund, affiliates of Hillhouse Group agreed to a deduction of $100 million from amounts due to them from the InRe Fund and to waive their right to receive any performance fees that could have been earned for 2021. Enstar also redeemed its other investments in Hillhouse Funds at their carrying value plus an implied interim return and received $381 million in the form of additional interest in the InRe Fund.
AnglePoint Cayman previously received sub-advisory services with respect to InRe Fund from its affiliate, AnglePoint HK, an investment advisory company licensed by the Securities and Futures Commission in Hong Kong. Pursuant to the TRA, Enstar acquired an option to buy AnglePoint HK, which it also had the right to assign to a third-party. On April 1, 2021, Enstar entered into a Designation Agreement with Jie Liu, a former director of Enstar, (the "Designation Agreement"), pursuant to which Enstar designated Mr. Liu, an AnglePoint HK partner, as the purchaser of AnglePoint HK, and he acquired the company from an affiliate of Hillhouse Group on the same day. AnglePoint Cayman simultaneously assigned its investment management agreement with InRe Fund to AnglePoint HK. The Designation Agreement required Enstar and AnglePoint HK to amend the InRe Fund investment management agreement and limited partnership agreement to incorporate a revised fee structure for AnglePoint HK and certain other agreed changes. The revised fee structure consisted of a reimbursement of AnglePoint HK's reasonable operating expenses, plus a performance fee equal to 10% of our return on investment in the InRe Fund. For the calendar year 2021, there was also a minimum performance fee payable to AnglePoint HK of $10 million. As a result of the terms of the Designation Agreement, the InRe Fund qualified as a variable interest entity and was consolidated effective April 1, 2021. During the fourth quarter of 2021, we completed the liquidation of our investment in the InRe Fund.
On September 1, 2021, we completed the purchase of the Hillhouse Group's entire 27.7% interest in Enhanzed Reinsurance Limited ("Enhanzed Re") for a purchase price of $217 million and assumed its remaining outstanding capital commitment to Enhanzed Re of $40 million. Following the completion of the transaction, our equity interests in Enhanzed Re increased from 47.4% to 75.1% with Allianz SE ("Allianz") continuing to own the remaining 24.9%. Upon closing, we consolidated Enhanzed Re.
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CORPORATE GOVERNANCE
AnglePoint HK (Former Related Party)
As described above, on April 1, 2021, AnglePoint Cayman assigned its investment management agreement with the InRe Fund to AnglePoint HK. On October 15, 2021, we notified AnglePoint HK of our decision to terminate the investment management agreement among the InRe Fund, the general partner of the InRe Fund, and AnglePoint HK. Prior to terminating the InRe Fund investment management agreement, we incurred $10 million of performance fees and $5 million of operating expenses with respect to management by AnglePoint HK of the InRe Fund, which were deducted from the net asset value.
Enhanzed Re
Enhanzed Re was a joint venture between Enstar, Allianz and Hillhouse Group that was capitalized in December 2018. Enhanzed Re is a Bermuda-based Class 4 and Class E reinsurer and reinsures life, non-life run-off, and property and casualty insurance business, initially sourced from Allianz and Enstar. We, Allianz and Hillhouse Group affiliates have made initial equity investment commitments in aggregate of $470 million to Enhanzed Re. As described above, on September 1, 2021, we completed the purchase of the Hillhouse Group's entire 27.7% interest in Enhanzed Re. Upon closing, we consolidated Enhanzed Re (previously accounted for as an equity method investment) and as a result, it ceased to be a related party on the same date.
Enstar acts as the (re)insurance manager for Enhanzed Re, and an affiliate of Allianz provides investment management services to Enhanzed Re. During 2021, we ceded 10% of certain run-off transactions to Enhanzed Re on the same terms and conditions as those received by Enstar.
Citco
In June 2018, our subsidiary made a $50 million indirect investment in the shares of Citco III Limited ("Citco"), a fund administrator with global operations. Pursuant to an investment agreement and in consideration for participation therein, a related party of Hillhouse Group provided investment support to such subsidiary. As of December 31, 2021, we owned 31.9% of the common shares in HH CTCO Holdings Limited, which in turn owns 15.4% of the convertible preferred shares, amounting to a 6.2% interest in the total equity of Citco. As of December 31, 2021, Trident owned a 3.4% interest in Citco. James D. Carey, our director, currently serves as an observer to the board of directors of Citco in connection with Trident's investment therein.
Wellington
Wellington and certain of its affiliates collectively owned 6.3% of our voting ordinary shares as of December 31, 2021. We have made investments in funds managed by Wellington or affiliates of Wellington. As of December 31, 2021, the market value of our investments in funds managed by Wellington or affiliates of Wellington was $33 million, and we incurred no fees during the year ended December 31, 2021. As of December 31, 2021, the market value of our investments in a separate account managed by Wellington was $3.3 billion, and we incurred fees of $1.8 million in respect of such investments during the year ended December 31, 2021. Where we have made investments in funds (i) the manager generally charges certain fees to the fund, which are deducted from the net asset value, (ii) the aggregate fee amount reported is estimated using the fee provisions applicable to each fund pursuant to the relevant subscription documents and no cash payments were made in respect of these fee amounts, and (iii) we are treated no less favorably than similarly situated investors in these funds, and fees charged pursuant to investments affiliated with Wellington were on an arm's-length basis.
Saracens Group
An entity controlled by Dominic Silvester owns a controlling stake in Saracens Limited, a U.K. professional sports organization for rugby and netball ("Saracens"). Paul O’Shea is a minority shareholder in the entity, and both serve as non-employee directors of Saracens. In March 2022, we entered into a three-year sponsorship agreement with Saracens Women's (rugby) and Saracens Mavericks (woman's netball), to sponsor and promote women's sports, gender equality and community outreach as a part of our ESG program. We committed to pay Saracens up to £115,000 per year (approximately $156,400) plus VAT, and in return we receive certain marketing and other rights and will support them in their community outreach efforts. We have the option to exit the sponsorship following the first year. The sponsorship opportunity was entered into on an arms-length basis.
Enstar Group Limited / 46 / 2022 Proxy Statement | ||||||||
CORPORATE GOVERNANCE
Family Relationships
Alex O'Shea, the son of Paul O'Shea, commenced employment with Enstar as VP, Mergers & Acquisitions in August 2021. Alex O'Shea's aggregate compensation in 2021 (including salary, bonus, and long term incentive awards at grant date fair value) was $111,252 and was established in accordance with Enstar's employment and compensation practices applicable to employees with equivalent qualifications, experience and responsibilities. He is also eligible to participate in Enstar's employee benefit programs on the same basis as other eligible employees. Paul O'Shea is recused from all related compensation decisions and is not the line manager.
Indemnification of Directors and Officers; Director Indemnity Agreements
We have Indemnification Agreements with each of our directors. Each Indemnification Agreement provides, among other things, that we will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of such indemnitee’s status as a director or officer of the Company, such indemnitee was, is or is threatened to be made a party or participant in any threatened, pending or completed proceeding, whether of a civil, criminal, administrative, regulatory or investigative nature, against all judgments, fines, penalties, excise taxes, interest and amounts paid in settlement and incurred by such indemnitee in connection with such proceeding. In addition, each of the Indemnification Agreements provides for the advancement of expenses incurred by the indemnitee in connection with any proceeding covered by the agreement, subject to certain exceptions. None of the Indemnification Agreements precludes any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including but not limited to, any rights arising under our governing documents, or any other agreement, any vote of our shareholders or any applicable law.
Our executive officers’ employment agreements provide them with indemnification protection to the fullest extent permitted by applicable law in the jurisdictions in which they are employed.
Enstar Group Limited / 47 / 2022 Proxy Statement | ||||||||
Executive
Compensation
Compensation
COMPENSATION DISCUSSION AND ANALYSIS
Company Performance
We delivered net earnings of $437 million for 2021, which resulted in a 10.4% increase in our book value per share and return on equity of 7.1%. As of December 31, 2021, our book value per share was $316.34. In addition, we delivered significant operational achievements, including the assumption of $3.8 billion of liabilities in seven run-off transactions.
The graphs below show our performance versus the peer median in growth in book value per common share (compounded annually) during the three- and one-year periods ended December 31, 2021 and return on equity for the same time periods. Although relative performance metrics are not built into our incentive programs because of the unique nature of our business (as described in "- Peer Group" below), our Human Resources and Compensation Committee (the "Compensation Committee") monitors our performance versus our peers for background information purposes.
•Source: S&P Market Intelligence for peer company data. Peer group includes the companies selected as our peers by our Human Resources and Compensation Committee, as described in "- Peer Group."
Management Team
During 2021, our principal executive officer, principal financial officer, and three most highly compensated executive officers were:
•Dominic Silvester - Chief Executive Officer ("CEO") and co-founder;
•Paul O'Shea - President and co-founder;
•Orla Gregory - Acting Chief Financial Officer and Chief Operating Officer ("Acting CFO and COO");
•Paul Brockman - Chief Claims Officer ("CCO"); and
•Nazar Alobaidat - Chief Investment Officer ("CIO").
Also required to be included in this proxy statement are two former employees that served as our principal financial officer during a portion of 2021:
•Zachary Wolf - Former Chief Financial Officer (employment ended August 10, 2021); and
•Guy Bowker - Former Chief Financial Officer (employment ended March 1, 2021).
Enstar Group Limited / 48 / 2022 Proxy Statement | ||||||||
EXECUTIVE COMPENSATION
Contributions of each of the executive officers in 2021 are described more fully in this Compensation Discussion and Analysis.
Objectives of our Executive Compensation Program
Our Compensation Committee is responsible for establishing the philosophy and objectives of our compensation program, designing and administering the various elements of our compensation program, and assessing the performance of our executive officers and the effectiveness of our compensation program in achieving their objectives.
We operate in an extremely competitive and rapidly evolving industry, and we believe that the skill, talent, judgment, and dedication of our executive officers are critical to increasing the long-term value of our company. In recent years, we have seen new entrants into the run-off business as well as increased competition in the broader market for talent. Retaining our key executives and employees is a priority for the Compensation Committee.
We therefore strive to maintain an executive compensation program that will:
▪incentivize performance consistent with clearly defined corporate objectives;
▪align our executives’ long-term interests with those of our shareholders;
▪competitively compensate our executives; and
▪retain and attract qualified executives to drive our long-term success.
We have long identified growing our book value per share as our primary corporate objectives, and we believe that long-term growth in fully diluted book value per share is an important measure of our financial performance. Growth in our book value is driven primarily by growth in our net earnings, which is in turn driven in large part by: (i) successfully pricing and completing new run-off transactions; (ii) effectively managing claims; (iii) effectively managing our investments to deliver superior risk-adjusted total investment return; and (iv) prudently managing our capital.
2021 Financial Metrics
For 2021, we used several financial metrics in our annual and long-term incentive compensation programs, which include one and three-year growth in fully diluted book value per share, return on equity, Non-GAAP Operating Income, and Non-GAAP Operating Income return on equity. Non-GAAP Operating Income is a non-GAAP financial measure that we formerly disclosed in our quarterly and annual reports for investors to use in evaluating the performance of our core business in a way aligned with how our management team analyzes our results. We also incorporated operational performance objectives into our 2021 Annual Incentive Program, which are designed to drive success across our business and to support long-term growth.
Changes to 2022 Financial Metrics Applicable to Go-Forward Compensation Programs
In connection with the preparation of our 2021 Annual Report on Form 10-K, we developed and presented a new suite of refined financial performance measures, certain of which are incorporated into our compensation programs beginning in 2022. These measures include adjusted book value per share and adjusted return on equity, which are relatively consistent with the fully diluted book value per share and Non-GAAP Operating Income measures used in our compensation programs in 2021. Other new measures include Run-off liability earnings, which measures our claims management performance, and total investment return, which measures our investment management performance. For a complete description of our new financial measures and the differences between those measures and our previously reported measures, refer to pages 63-65 of our 2021 Annual Report on Form 10-K.
Enstar Group Limited / 49 / 2022 Proxy Statement | ||||||||
EXECUTIVE COMPENSATION
Roles of Executive Officers
The Compensation Committee makes compensation determinations for all of our executive officers. As part of the determination process, Mr. Silvester, our CEO, assesses our overall performance and the individual contribution of each member of the executive leadership team. On an annual basis, he reviews the prior year’s compensation and presents recommendations to the Compensation Committee for salary adjustments and annual incentive awards for each executive officer, taking into consideration each executive's achievement of his or her operational performance objectives.
The Compensation Committee discusses all recommendations with Mr. Silvester and then meets in executive session without Mr. Silvester present to evaluate his recommendations, review the performance of all of the executive officers, discuss CEO compensation, and make final compensation decisions.
Ms. Gregory, our Acting CFO and COO, attends portions of the meetings of our Compensation Committee from time to time to provide information relating to our financial results and plans, performance assessments of our executive officers, human resources strategies and other personnel-related data, and she supports Mr. Silvester in preparing recommendations to the Compensation Committee.
Shareholder Engagement and Results of Shareholder Vote on Compensation
The Board continues to believe that meaningful shareholder engagement is a valuable tool for understanding our shareholders' views and preferences regarding our compensation and governance practices, and asked the Chairman of the Board (Mr. Campbell) and Chairman of the Compensation Committee and the Nominating and Governance Committee (Mr. Becker) to engage with shareholders as they have for many years to better understand these results.
Led by Messrs. Campbell and Becker, we spoke with several shareholders representing approximately 31% of our outstanding voting ordinary shares. We also spoke to one major proxy advisory firm, and invited conversations with another major proxy advisory firm and with additional significant shareholders representing approximately 13% of our outstanding shares, who advised that they did not feel a need to meet with us this year. Directors whose firms represent an additional 14% of our outstanding voting ordinary shares are actively involved in our Board's oversight of compensation and governance matters, and were not included in the engagement program.
At last year's annual general meeting held on June 9, 2021, our shareholders approved the compensation of our executive officers with 63% of the total votes cast in favor of the proposal. This was a significant decrease from the 99% approval that we received at the 2020 annual general meeting. The Board and the Compensation Committee find the results disappointing and are in the process of revising elements of the Company's compensation programs in conjunction with considering shareholder feedback.
We have taken, and continue to take, the feedback we receive from our shareholders and advisory firms into account in making compensation decisions and designing future compensation programs. The shareholders we spoke to this year identified the compensation for our executive officers as a key area of focus. In particular, we reviewed the weightings of financial versus non-financial measures of performance used in our Annual Incentive Program, the award cycles used in our long-term incentive program for certain of our executives, and executive employment agreement terms.
Shareholders also noted that clear and detailed disclosure was important to their evaluation of our executive compensation, and we aim to provide appropriately detailed and useful disclosure in our proxy statement accordingly. See "Corporate Governance" for more information regarding our efforts to engage with shareholders on corporate governance matters such as diversity and ESG.
Enstar Group Limited / 50 / 2022 Proxy Statement | ||||||||
EXECUTIVE COMPENSATION
Principal Elements of Executive Compensation
Our executive compensation program currently consists of three principal elements: base salaries, annual incentive compensation and long-term incentive compensation. Executives also receive certain other benefits, including those pursuant to their employment agreements. The table below describes the principal elements of our executive compensation as well as the other components of our program, each of which is described in more detail later in this proxy statement.
| Element | Description | Key Features | ||||||
| Base Salary | Provides the fixed portion of an executive’s compensation that reflects scope of skills, experience and performance | ▪Provides a base component of total compensation ▪Established largely based on scope of responsibilities, market conditions, and individual and Company factors | ||||||
| Annual Incentive Compensation | Provides "at risk" pay that reflects annual Company performance and individual performance | ▪Aligns executive and shareholder interests ▪Rewards performance consistent with financial and individual operational performance objectives that are designed to drive the Company's annual business plan and key business priorities | ||||||
| Long-Term Incentive ("LTI") Compensation | Includes (a) PSUs that "cliff vest" following a three-year performance period subject to the Company's achievement of financial performance metrics, (b) RSUs that are subject to time- and service-based vesting conditions, and (c) for our CEO, a Joint Share Ownership Plan ("JSOP") award that "cliff vests" following a three-year performance period subject to the Company's share price growth with a payout level determined by appreciation and the achievement of a financial performance metric | ▪Aligns executive and shareholder interests ▪Drives long-term performance and promotes retention ▪Heavily weighted towards performance-based awards ▪PSUs do not vest unless performance measurements are met ▪PSU vesting occurs within a range of 50-60% to 150-200% depending on the level of achievement ▪JSOP vesting requires share price hurdle to be met on the vesting date. Additionally, the value of the award will be reduced by 20% if a performance condition tied to fully diluted book value per share is not also achieved | ||||||
| Other Benefits and Perquisites | Reflects the local market and competitive practices such as retirement benefits, and, in the case of our Bermuda headquarters, payroll and social insurance tax contributions. Our CEO's employment agreement also provides benefits related to residing in Bermuda including allowances for housing and certain travel. | ▪Provides benefits consistent with certain local market practices in order to remain competitive in the marketplace for industry talent ▪Promotes retention of executive leadership team | ||||||
| Employment Agreements | Provides certain protections for executives and their families in the event of death or long-term disability, termination, or change in control, as well as certain other benefits | ▪Provides Enstar with protections such as restrictive covenants (non-competition, non-solicitation, confidentiality, etc.) ▪Promotes retention over a multi-year term and a sense of continuity among the leadership team ▪Consistent with competitive conditions and legal requirements in Bermuda | ||||||
Enstar Group Limited / 51 / 2022 Proxy Statement | ||||||||
EXECUTIVE COMPENSATION
Compensation Allocations among Elements
For 2021, consistent with past practice, we did not have a pre-established policy or target for the allocation of the components of our program, and the Compensation Committee considered all compensation components in total when evaluating and making decisions with respect to each individual component. Although it does not mandate a specific allocation among the components of pay, the Compensation Committee believes that a meaningful portion of each executive’s total compensation should be "at risk" and performance-based.
Performance-based compensation (excluding other benefits and perquisites) during 2021 reported in the Summary Compensation Table constituted 55% of our CEO's total compensation, which reflects the fact that no new long-term equity incentive awards were made to the CEO in 2021 following the grant in 2020 of a multi-year JSOP long-term incentive award, and the CEO's annual incentive award being earned below the target award opportunity level for 2021.
The percentage of performance-based compensation (excluding other benefits and perquisites) for 2021 for our other executive officers serving as of December 31, 2021 was as follows: (i) Paul O'Shea - 46%; (ii) Orla Gregory - 52%; (iii) Paul Brockman - 24%; and (iv) Nazar Alobaidat - 33%. The percentages of performance-based compensation during 2021 reported in the Summary Compensation Table reflect the fact that no new long-term equity incentive awards were granted to Mr. O'Shea and Ms. Gregory in 2021 following awards made to them during 2020 that were intended to cover three-year periods, which are 75% performance-based. The percentages for all executives reflect 2021 annual incentive awards earned below the target award opportunity.
Role of Compensation Consultants
The Compensation Committee has the authority under its charter to retain compensation consultants and outside legal counsel or other advisors and, before selecting a consultant or advisor, must consider its independence. In 2021, the Compensation Committee engaged McLagan, an Aon Hewitt Company ("McLagan") for executive compensation advice, which included a review and benchmarking of our executive compensation for each of our executive officers, an analysis of our annual and long-term incentive programs, and advice regarding our peer group. McLagan also advised the Compensation Committee and management with respect to steps that could be taken to address our most recent say-on-pay vote and compensation practices. McLagan's fees for its services during 2021 were $42,577. McLagan is a division of Aon plc ("Aon"), the parent company of subsidiaries that provide insurance brokerage-related services to our subsidiaries and affiliates unrelated to the compensation consulting services. Fees for these Aon services were $45,174 for 2021, and constituted a de minimis portion of Aon's 2021 revenue (less than 1%). The Compensation Committee assessed the independence of McLagan in light of applicable SEC and Nasdaq rules and reviewed responses from the consultant addressing factors related to its independence. Following this review, the Compensation Committee concluded that the firm was independent and that their advisory services did not raise any conflicts of interest.
Peer Group
In making compensatory decisions with respect to the 2021 performance year, including assessing whether we were meeting our goal of providing competitive compensation, the Compensation Committee reviewed publicly available executive officer compensation information described in the periodic filings of a group of other publicly traded companies in our industry. The Compensation Committee reviews our peer group annually, and following the most recent review, we added Markel Corporation to our peer group.
The Compensation Committee generally seeks to include in our peer group companies that fall approximately within our size guidelines and include comparable aspects of our business. However, establishing a reliable peer group presents challenges for Enstar because our primary business is acquiring and operating (re)insurance companies and portfolios in run-off, whereas most in our industry focus primarily on writing new (re)insurance business. Run-off is a niche within the insurance industry, fragmented with several privately-held specialist managers, and divisions within significantly larger insurance franchises.
Enstar Group Limited / 52 / 2022 Proxy Statement | ||||||||
EXECUTIVE COMPENSATION
While pay at our peer companies is generally relevant to provide a frame of reference to the Compensation Committee in determining executive compensation, the Compensation Committee reviewed the compensation paid by these companies for informational and overall comparison purposes only. We did not compensate our executives to align with a specific benchmark or target percentile or precise position within our peer group. Instead, we sought only to be generally competitive relative to our peers with the compensation we offer our executives. Given the significant differences between us and our most similar peers relating to business, operations, and executive team structure, we believe that formulaic benchmarking against our peer group or other companies to set 2021 compensation would not have provided meaningful guidance, although we will continue to evaluate our methodologies and views in future years.
The following companies were reviewed to provide an overall backdrop to the Compensation Committee’s decisions:
| Alleghany Corporation | Everest Re Group Ltd. | Selective Insurance Group | |||||||||||||||
| Arch Capital Group Ltd. | Hanover Insurance Group | SiriusPoint Ltd. | |||||||||||||||
| Argo Group International Holdings | Hiscox Ltd. | White Mountains Insurance Group | |||||||||||||||
Assured Guaranty Ltd. | Markel Corporation | W.R. Berkley | |||||||||||||||
| AXIS Capital Holdings | RenaissanceRe Holdings Ltd. | ||||||||||||||||
The peer group selection process focused on three criteria, which was consistent with prior years: (i) industry; (ii) geography (with a significant preference for the use of Bermuda companies); and (iii) size, with reference to: (A) total shareholders’ equity within approximately 0.5 to 2.5 times of our total shareholders’ equity and (B) total assets within approximately 0.5 to 2.5 times of our total assets.
Industry. Given the lack of companies directly comparable to Enstar, we have designed our peer group around companies primarily focused on property and casualty (re)insurance, which are the companies against which we compete for talent. Where possible, we look for aspects of other companies that reflect elements similar to operations or strategies we have.
Geography. Publicly traded Bermuda companies (or publicly traded companies domiciled elsewhere with prominent Bermuda operations) are most relevant because these are the companies against which we generally compete for talent, and the Compensation Committee believes market conditions across other Bermuda-based companies are largely what drives executives’ views as to whether they are compensated competitively. We also include several companies domiciled in the United States and one in the United Kingdom in our peer group for diversification given our subsidiaries' presence in these locations.
Size. Run-off profits are derived primarily from reserve releases and investment income rather than revenue, making peer comparison on the basis of revenue a much less relevant metric for us. The Compensation Committee designed our peer group targeting companies with approximately 0.5 to 2.5 times our shareholder equity or total assets (measured using financial data available at the time of consideration), which are metrics we find most relevant for purposes of comparison. The Compensation Committee also considers market capitalization in selecting our peer group.
Base Salaries
We set the base salaries of our executive officers based on the scope of the executives’ responsibilities and roles at Enstar, taking into account the Compensation Committee's view of the appropriate level of salary for each individual as compared to the executive's other compensation elements. The Compensation Committee considers a variety of factors in adjusting base salaries, including Company and individual performance, retention, cost of living estimates and competitive market total compensation figures for similar executive officer positions based on publicly available information. Our goal is to provide base salary amounts at levels necessary to achieve our compensation objectives of competitively compensating our executives and retaining and attracting qualified executives who are able to