EX-10.16: DESCRIPTION OF COMPENSATORY ARRANGEMENTS

EX-10.16 2 y18019exv10w16.htm EX-10.16: DESCRIPTION OF COMPENSATORY ARRANGEMENTS EX-10.16
 

Exhibit 10.16
COMPENSATION OF NAMED EXECUTIVE OFFICERS OF ALLEGHANY CORPORATION (THE “COMPANY”)
     The following information relates to the compensation of the chief executive officer and the four other most highly compensated executive officers of the Company serving as executive officers at the end of 2005.
SUMMARY COMPENSATION TABLE
                                                 
    Annual Compensation   Long-Term    
                            Other Annual   Incentive   All Other
Name and Principal                   Bonus   Compensation   Plan Payouts   Compensation
Position   Year   Salary   (1)   (2)   (3)   (4)
Weston M. Hicks,
     2005     $ 800,000     $ 810,000     $ 8,074     $ —     $ 126,915  
President and chief
     2004       700,000       518,007       5,104       —       111,430  
executive officer(5)
     2003       624,000       468,000       4,743       —       99,866  
 
                                                
Roger B. Gorham
     2005     $ 416,667     $ 337,500     $ 6,457     $ —     $ 67,227  
Senior Vice President – Finance and Investments and chief financial officer (6)
     2004       25,189       —       277       —       142  
 
                                                
Robert M. Hart,
     2005     $ 491,497     $ 292,507     $ 7,347     $ 886,104     $ 83,544  
Senior Vice President,
     2004       472,593       282,703       6,787       706,485       79,956  
General Counsel and Secretary
     2003       454,416       268,149       6,304       460,788       76,581  
 
                                                
James P. Slattery,
     2005     $ 432,640     $ 257,637     $ 4,622     $ 557,163     $ 71,512  
Senior Vice President —
     2004       416,000       227,136       4,756       293,781       68,733  
Insurance
     2003       400,000       229,200       4,569       —       66,024  
 
                                                
Peter R. Sismondo,
     2005     $ 239,455     $ 136,203     $ 3,208     $ 455,328     $ 40,200  
Vice President, Controller,
     2004       230,245       103,749       3,030       363,114       38,579  
Treasurer and Assistant Secretary
     2003       221,389       101,485       2,867       236,940       37,034  
 
(1)   These amounts represent (i) bonuses earned in respect of the relevant year under the 2005 Management Plan, which is designed to reward executive officers for the attainment of one or more performance goals established by the Compensation Committee, subject to reduction or elimination of any such bonus based on such criteria as the Compensation Committee shall determine, including, but not limited to, individual objectives established by the Compensation Committee, and (ii) in the case of the 2005 amounts for Messrs. Gorham and Sismondo, additional discretionary bonuses of $76,969 and $25,000, respectively, paid outside the 2005 Management Plan.
 
(2)   These amounts represent (i) payments for reimbursement of taxes on income imputed pursuant to the Company’s long-term disability and group term life insurance policies, and (ii) in the case of the 2005 amounts for each of Messrs. Hicks and Gorham, the additional amount of $2,500 representing the payment of luncheon club dues and fees.
 
(3)   These amounts represent payouts in February 2005 in settlement of performance shares awarded under the 1993 Long-Term Incentive Plan (the “1993 Plan”), which entitled the holder thereof to payouts of cash and/or Common Stock (in such proportion as is determined by the Compensation Committee) up to a maximum amount equal to the value of one share of Common Stock on the payout date for each performance share, depending upon the average annual compound growth in the Company’s Earnings Per Share (as defined by the Compensation Committee pursuant to the 1993 Plan) for the 2001-2004 award period. Such payout was made in cash to the extent of minimum statutory withholding requirements in respect of the award, with the balance in Common Stock.
 
(4)   The 2005 amounts listed for Messrs. Hicks, Gorham, Hart, Slattery and Sismondo include (i) savings benefits of $119,375, $61,875, $73,606, $64,792 and $35,861, respectively, credited pursuant to the Deferred Compensation Plan; and (ii) benefits valued at $3,520, $1,332, $5,918, $2,700 and $1,130, respectively, pursuant to the Securities and Exchange Commission rules, of life insurance maintained by the Company on their behalf. Such life insurance policies provide a death benefit to an executive

 

 

    officer who is an employee at the time of his death equal to four times the amount of such executive officer’s annual salary at January 1 of the year of his death. The 2005 amounts listed for each of Messrs. Hicks, Gorham, Hart and Slattery also include compensation of $4,020, and the 2005 amount listed for Mr. Sismondo also includes compensation of $3,209, in respect of other insurance coverage.
 
(5)   Mr. Hicks was appointed President and chief executive officer of the Company effective December 31, 2004, and was Executive Vice President of the Company prior thereto.
 
(6)   Mr. Gorham has been a Senior Vice President of the Company since December 2004 and chief financial officer since May 1, 2005.