- The board of directors of First American Financial Remancized the leadership game to the title insurance company and settlement of $ 6 billion after the arrest of its CEO and accused of assault for offense. The financial director intervenes to fill the position of CEO, and the chairman of the board of directors will plunge as new executive president at First American. The CEO ousted Kenneth D. Degiorgio – whose lawyers say that it will be authorized for reprehensible acts – will always receive millions of people in the introductory as detailed by his contract, the company told investors this month.
The CEO of First American Financial was summarily ousted After being Order and accused With assault in San Juan this month. Kenneth D. Degiorgio was traveling aboard a cruise ship Virgin Voyages Caribbean with his wife when he was accused of choking Another passenger in a maritime incident that has been captured on surveillance images and considered by security agents, according to a FBI Affidavit.
A few days after the arrest of Degiorgio, First American Financial announced that his job had been dismissed without reason, which means that Degiorgio should still perceive around $ 18.6 million, according to a Revised shareholder report The company has published. This payment includes $ 7.24 million in departure compensation, $ 9.14 million in accelerated equity acceleration which he was entitled in the context of his remuneration package, and $ 2.2 million due to him as part of the company’s retirement plan. If he had been dismissed “for good reason”, which almost never happens among the CEOs in the world of US companies listed on the stock market, the company said that he would not have been entitled to any payment.
The expert in corporate governance and associate professor at Georgetown University, Jason Schloetzer, said Fortune A board of directors can terminate a CEO without reason after being brought to protect the reputation of the company, avoid disputes and maintain operational stability, in particular when a dismissal for the cause is not yet justified by evidence.
“Termination without reason reduces the risk of unjustified legal action, in particular when the accusations have not yet led to a conviction and the Council cannot prove the participation of the CEO in misconduct,” said Schloetzer. “The decision of the board of directors certainly sends a message to the shareholders that he is actively supervised management and prioritizes the long -term interests of the company on what could become a distraction of managers.”
Eric Hoffmann, vice-president and data director of the compensation consulting company, told advisers Fortune Cash dismissal payments are generally a multiple salary and a multiple of bonus and twice is relatively common. In the case of First American, the two are 2x, which is not outside market standards. In addition, the units of limited limited action not acquired from Degiorgio held at the time of termination were immediately acquired on an accelerated basis. This means that instead of Degiorgio had to wait for the period of its equity to flow, he will obtain his shares relatively immediately, said Hoffman.
Hoffman also noted that Degiorgio had just negotiated a New job agreement With First American dated February 18, 2025, which brought his annual salary to $ 1 million. The agreement was to continue until December 31, 2027 – unless it was terminated earlier.
A spokesperson for First American Financial did not comment beyond the official statements of the company.
After having dismissed Degiorgio, First American Financial appointed financial director Mark Seaton, 47, as CEO and appointed him to the Board of Directors. The board of directors promoted the former treasurer Matthew Wajner as a financial director to replace Seaton and the chairman of the board of directors, Dennis Gilmore, will go to the executive president of First American, the company announced.
After the reshuffle of managers, First American published a modified report of shareholders within the framework of his annual shareholders meeting in May which reflected new appointments and offered additional “office corrections” to the previous proxy declaration, said the company. THE Revised proxy statement shows that Degiorgio is entitled to various payments worth $ 18.6 million after being terminated without reason, while the declaration of proxy published Before his arrest And Ester showed the total of $ 16.4 million. The difference had been listed in the “handicap” column in the original proxy, Hoffman said.
“We look forward to our next chapter under the solid direction of Mark Seaton,” said Gilmore in a press release. “No one is ready to be our CEO than Mark, who played a leading role in our most critical strategic initiatives, which stimulate the digital transformation of our business. We would like to thank Ken Degiorgio for his many years of service in First American. ”
Seaton has been a financial director since 2013 and joined the company in 2006. Degiorgio was appointed CEO in February 2022 and had been in the company for 25 years.
Degiorgio’s legal team said Fortune Earlier this month, the former CEO responded to a bass patron on the cruise ship that “harassed” Degiorgio’s wife, Nichol Degiorgio, and made her feel “threatened and intimidated”.
“Although responsible for a simple crime, Mr. Degiorgio is looking forward to absolved any reprehensible act,” said his lawyer.
San Juan field office The FBI said that the authorities of cruise ships had alerted the FBI to the incident that would have taken place aboard the Virgin Voyages resilient lady in the early hours of March 31. The investigation is underway.
According to the Affidavit, the alleged fight between Degiorgio and a patron at the “On The Rocks” bar aboard the ship occurred after Nichol Degiorgio asked the barefoot boss, who danced, to put his shoes back. The boss would have told Degiorgio to “be silent” and had described him as “b – ch”, while showing him his middle finger.
The surveillance images of the states of affidavit showed that Degiorgio rose, headed for the boss and rolled his hands around the boss’s throat. The victim told FBI agents that Kenneth Degiorgio had compressed his throat with force while saying to him: “I will kill you, during the alleged assault. A bartender on the ship called the security personnel after the alleged fight.
“The violent crimes committed on board cruise ships are federal competence and we take them very seriously,” said the Special Agent in charge of Devin J. Kowalski of the San Juan field office of the FBI. “If you violate the law at sea, expect to deal with consequences on earth.”
Attempts to reach Degiorgio failed.
This story was initially presented on Fortune.com
