Argo Group International Holdings Ltd. announced late yesterday that Mark E. Watson III, the group’s chief executive officer is retiring, effective immediately.
According to the announcement, Kevin J. Rehnberg has been named interim chief executive officer, subject to Bermuda regulatory approval.
Watson’s exit comes on the heels of last month’s move by the Securities and Exchange Commission to investigate the company’s disclosures about executive compensation. In addition, an Argo Group shareholder, Voce Capital Management LLC, a hedge fund that owns close to a 6 percent stake in the insurer, has waged a campaign against Argo’s alleged excessive corporate expenses, which it said included corporate jet travel and housing for CEO Watson. Argo has denied all accusations regarding lavish spending.
In a Feb. 25, 2019 letter to shareholders, Voce detailed concerns about “shockingly inappropriate” corporate expenses. These expenses included personal use of corporate property, “gross misallocations of capital on wasteful items and frivolous vanity sponsorships, and an overall spendthrift culture that misdirects [Argo] assets to support the lifestyle and hobbies of [Watson] at the expense of shareholders,” the Voce letter said.
Voce had sought seats on Argo’s board but gave up this quest in May.
The Bermuda-based specialty insurer and reinsurer said the independent directors of the board continue to conduct their review of governance and compensation matters. “The company continues to believe that the amounts involved are not material to the company’s financial position or results of operations,” said Argo in a statement announcing Watson’s exit, adding that it is “fully cooperating” with the SEC investigation with respect to the company’s disclosures of certain compensation matters.
Argo said Watson will continue to serve as a member of the board and as an adviser to the company until Dec. 30, 2019 to ensure a smooth transition.
“The board thanks Mark for his 20 years of service and his leadership in building the business and wishes him well in his next endeavor,” said the chairman of Argo’s board of directors, Gary V. Woods.
“It has been a great honor to build and lead this great company, and I look forward to its continued success under Kevin Rehnberg’s leadership,” said Watson.
Since Jan. 1, 2019, Rehnberg has been president, Argo Group U.S. Inc., head of the Americas and chief administrative officer. From March 2013 to January 2019, Rehnberg was president of Argo’s U.S. operations, overseeing all activities of Argo’s U.S.-based business segments.
Before joining Argo, Rehnberg served as executive vice president for specialty lines at OneBeacon Insurance, where he oversaw specialty underwriting operations and acquired and built new lines of specialty business. Prior to that, he held positions at The St. Paul Travelers Companies, Liberty International and Chubb Corporation. He has a bachelor’s degree from Princeton University.
“Argo’s board of directors has complete confidence in Kevin’s ability to lead the company. Kevin’s extensive leadership experience, including his strong track record running our Americas business, will ensure a smooth transition and position the company for continued growth and performance,” said Chairman Woods.
(This article was originally published on our sister website, Insurance Journal.)