Argo confirms SEC subpoena

Argo Group International Holdings has announced that it has received a subpoena from the U.S. Securities and Exchange Commission (SEC) seeking documents primarily with respect to the company’s disclosure of certain compensation-related perquisites.

In a statement, the company said that, working with the assistance of outside counsel, it is “fully cooperating with the SEC” and that it did not believe that the amounts involved were material to the company’s financial position or results of operations.

Argo also affirmed that its independent directors were conducting a review of governance and compensation matters.

Bloomberg reported that the SEC investigation comes after an activist investor, Voce Capital Management, accused Argo of misusing corporate assets, such as company-owned aircraft and housing. Additionally, according to a regulatory filing, Argo CEO Mark Watson earned roughly $8.4 million in total compensation in 2018 — a 180% increase over his 2017 earnings.

“Argo is committed to governance practices that support continued value creation for all shareholders, consistent with the company’s August 8, 2019, press release, which disclosed several proposed enhancements to the company’s governance and compensation programs, including declassification of the company’s board and reduction of board size as part of its ongoing board refreshment process,” Argo said in a statement.

Those proposed enhancements include the phased declassification of the board of directors, which will conclude in 2022, after which the entire board will stand for election annually, as well as the reduction of the maximum board size from 13 to 11.

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