DEF 14A: Hagerty, Inc. Announces Details for 2024 Annual Stockholders Meeting

Hagerty, Inc. will hold its 2024 Annual Meeting of Stockholders virtually on June 4, 2024, to elect directors and ratify the appointment of Deloitte & Touche LLP as its independent accounting firm.

Summary

• Hagerty, Inc. is holding its Annual Meeting of Stockholders virtually on June 4, 2024, at 11:00 a.m. ET.
• Stockholders as of the record date, April 5, 2024, are entitled to vote.
• The meeting will address the election of eight director nominees and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the year ending December 31, 2024.
• The Board recommends voting for the election of all director nominees and for the ratification of Deloitte.
• Proxy materials are available electronically starting April 25, 2024.
• Stockholders can vote online, by telephone, or by mail following the instructions on their proxy card or notice.
• The company's Board consists of eight directors, with McKeel Hagerty serving as Chairman and CEO, and William Swanson as Lead Director.
• The Board has determined that all directors, except McKeel Hagerty, are independent.
• Hagerty operates under a controlled company exemption from certain NYSE listing rules due to HHC holding more than 50% of the voting power.
• The company has four standing Board committees: Audit, Talent, Culture and Compensation, Nominating and Governance, and Finance and Capital.
• The Nominating and Governance Committee oversees the company's environmental, social, and governance (ESG) goals, efforts, progress, and disclosures.
• The company has adopted a Clawback Policy for recovery of erroneously awarded incentive compensation.
• The company has adopted an insider trading policy that includes restrictions and limitations on the ability of our directors, officers, and certain other employees to engage in transactions involving the hedging and pledging of our Class A Common Stock.

Sentiment

Score: 7

Explanation: The document is primarily factual and procedural, with a slightly positive tone due to management's expressions of pleasure and commitment to ESG principles. The presence of related party transactions and the controlled company structure introduce some caution.

Positives

• The Board is composed of experienced and qualified individuals.
• The company has a clear corporate governance structure with independent oversight.
• The company is committed to ESG principles and has a strategy for driving impact.
• The company has adopted policies to ensure ethical conduct and accountability.
• The company has a strong relationship with its independent accounting firm, Deloitte.

Negatives

• Hagerty operates under a controlled company exemption, which may reduce some stockholder protections.
• The company's Nominating and Governance Committee is not composed entirely of independent directors.
• The company has a Tax Receivable Agreement that could result in significant payments to HHC and Markel.

Risks

• The company's success depends on its ability to compete effectively and retain insurance policyholders and subscribers.
• The company is subject to risks associated with disruptions to its technology platforms.
• The company must comply with numerous laws and regulations, including those related to insurance, privacy, and accounting.
• The company is subject to risks associated with being a controlled company.
• The company could face litigation, government inquiries, and investigations.

Future Outlook

The company will leverage the findings of its materiality assessment and ongoing strategy work to further amplify its Impact. Priorities include defining and executing on highest priority Impact initiatives, assessing and acting on new and existing systems and processes for collecting and reporting Impact data, setting and publishing measurable, actionable, and strategic long-term Impact targets, and expanding disclosures on key ESG issues in accordance with select reporting frameworks.

Management Comments

• McKeel Hagerty, Chairman and CEO, expresses pleasure in inviting stockholders to the Annual Meeting and urges them to vote.
• The company wants to lead the industry with ideas that drive positive impact for our teams, our members, and the communities in which we live and work.
• Doing so is essential to delivering on our purpose to save driving and car culture for future generations.

Industry Context

The announcement reflects standard corporate governance practices for publicly traded companies, including the holding of annual meetings, election of directors, and appointment of auditors. The focus on ESG reflects a growing trend among companies to address environmental and social issues.

Comparison to Industry Standards

• The board structure, with a combined Chairman and CEO and a Lead Director, is a common model, although some companies separate these roles for enhanced independent oversight.
• The use of a controlled company exemption is also common among companies with significant insider ownership, but it can raise concerns about minority shareholder rights.
• The company's ESG initiatives are in line with industry trends, but the specific targets and disclosures will need to be assessed against peers to determine their effectiveness.
• The executive compensation structure, including base salary, bonus, and stock awards, is typical for publicly traded companies of similar size and industry.
• The related party transactions, particularly those with Markel and State Farm, are significant and require careful scrutiny to ensure they are on terms favorable to the company and its stockholders.
• Comparable companies include other specialty insurance providers, automotive enthusiast brands, and membership organizations.

Related Party Transactions

• The company has an Investor Rights Agreement with HHC, Markel, and State Farm.
• The company has a Tax Receivable Agreement with The Hagerty Group, HHC, and Markel.
• The company has an Exchange Agreement with Markel, HHC, and The Hagerty Group.
• The company entered into a Securities Purchase Agreement with State Farm, Markel, and persons related to HHC for the issuance of Series A Preferred Stock.
• Hagerty Re entered into an unsecured term loan credit facility with State Farm.
• The company has a State Farm Alliance Agreement and Reinsurance Agreement.
• The company has a Markel Alliance Agreement and Reinsurance Agreement.
• The company made payments to Soon Hagerty, McKeel Hagerty's wife, for her role as Senior Vice President of Brand and Senior Adviser for Brand Strategy.
• The company made payments for the use of an aircraft jointly owned indirectly by McKeel Hagerty and Tammy Hagerty.
• The company made payments to Matthew Becker's company for his role as an advisor to the Board.
• The company made deferred payments to Rob Kauffman for the acquisition of Speed Digital LLC.

Stakeholder Impact

• Stockholders have the opportunity to vote on key corporate governance matters.
• Employees are impacted by the company's compensation policies and ESG initiatives.
• Customers benefit from the company's products and services, including insurance and membership programs.
• Strategic partners, such as Markel and State Farm, have significant relationships with the company.
• The company's ESG initiatives impact the environment and communities in which it operates.

Next Steps

• Stockholders are encouraged to review the proxy materials and vote on the proposals.
• The company will hold the Annual Meeting on June 4, 2024.
• The company will continue to implement its ESG strategy and report on its progress.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Board of Directors, Corporate Governance, Director Election, Deloitte, Audit Committee, ESG, Executive Compensation, Related Party Transactions, Stock Ownership, Controlled Company, Risk Management, Hagerty