Insurance Underwriter Settles SEC Charges for Understating CEO Pay in Proxy Statements

An international insurance underwriter settled SEC charges for understating in its definitive proxy statements the perquisites and personal benefits paid to its CEO.

According to the SEC order, the company failed to disclose $5.3 million that it had paid on the former CEO's behalf. Among the undisclosed benefits were use of corporate aircraft, helicopter trips, housing costs, transportation for family members, personal services, club memberships, and tickets and transportation to entertainment events, retirement plan benefits, insurance coverage, medical premiums, and financial planning services. The SEC also found that the company failed to correct the information even after it discovered potential inaccuracies in its proxy statements.

As a result, the SEC found violations of, among other sections, Exchange Act Sections 14 ("Proxies") and 13 ("Periodicals and other reports").

To settle the charges, the company agreed to (i) cease and desist from further violations of federal securities laws and (ii) pay a civil money penalty in the amount of $900,000.