Argo settles $900,000 with SEC over misreporting CEO benefits
Argo Group International Holdings has settled $900,000 charges brought by the US Securities and Exchange Commission (SEC) after the regulator found its chief executive had received perks worth four times more than had been disclosed.
Mark Watson, Argo’s former CEO, resigned in November 2019 following an investigation by the SEC into the insurer's compensation practices and associated disclosure issues.
Argo disclosed that it had provided a total of approximately $1.2 million in perquisites and personal benefits, chiefly retirement and financial planning benefits, to its then CEO. However, according to the SEC's order, Argo failed to disclose over $5.3 million it had paid on the CEO’s behalf, including in filings for 2018 after a shareholder issued a press release alleging undisclosed perks to the CEO.
The order found that the perks Argo paid for, but did not disclose, included "personal use of corporate aircraft, helicopter trips and other personal travel, housing costs, transportation for family members, personal services, club memberships, and tickets and transportation to entertainment events".
"Argo understated perks and personal benefits paid to the CEO over this period by more than $1 million per year, or 400 percent," the SEC said in a statement on June 4.
The SEC’s order charges Argo with violating federal securities law provisions concerning proxy solicitation, reporting, books and records, and internal controls.
The SEC stated that Argo has agreed to its cease-and-desist order, which requires it to pay a $900,000 civil penalty, "without admitting or denying the SEC’s findings".
Kelly Gibson, director of the SEC’s Philadelphia regional office, said: “Even after being made aware of potential inaccuracies in its disclosures related to executive compensation, Argo did not accurately and adequately inform shareholders about the perks and benefits it provided its highest-ranking executive over a five-year period.”
Gibson said the SEC remains focused on whether companies are fully disclosing compensation paid to their top executives, and have appropriate internal controls in place to ensure that shareholders receive information to which they are entitled.
