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DEF 14A 1 esgr-202169xdef14a.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

_____________________________________


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o		Preliminary Proxy Statement

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x		Definitive Proxy Statement

o		Definitive Additional Materials

o		Soliciting Material Pursuant to §240.14a-12

ENSTAR GROUP LIMITED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Dear Fellow Shareholders:

On behalf of Enstar Group Limited's Board of Directors, I am pleased to invite you to attend our 2021 Annual General Meeting of Shareholders which will be held virtually on Wednesday, June 9, 2021 at 9:00 a.m. Atlantic time. The matters we will vote on are described in the notice of the Annual General Meeting and the Proxy Statement that follow. I also encourage you to read our 2020 Annual Report on Form 10-K.

Since inception, Enstar has established itself as a global leader in the run-off space, proving its resilience during both the good times and the more challenging times, and 2020 was no exception. Through the execution of our four growth fundamentals - innovation, discipline, financial optimization, and operational excellence - we continue to deliver an expanding suite of insurance solutions for new and existing partners, driving long-term value for our shareholders.

STRATEGY & PERFORMANCE

From the outset of the COVID-19 pandemic, our Board worked closely with management to oversee the operational and strategic impact, monitor risk and communicate with our regulators and other stakeholders. Management took immediate measures to support the health and safety of our employees and the wider Enstar community. We are extremely proud of how our employees responded to the challenges and our ability to transition seamlessly to remote working with minimal operational disruption to our business.

Looking back at Enstar’s 2020 performance, it was an excellent year for our company. We delivered record net earnings of $1.72 billion, or $78.80 per fully diluted share. As we have seen in recent years, the impact of market volatility can cause fluctuations in our investment portfolios year to year, and 2020 net earnings reflected net realized and unrealized gains of $1.6 billion. We finished the year with cash and investments up by 22.7% to $17.3 billion as compared to $14.1 billion as of year-end 2019.

Our legacy business continues to thrive as we announced seven transactions in 2020. These included two adverse development cover reinsurance agreements with leading (re)insurers, AXA XL and Aspen, alongside our more traditional loss portfolio transfer solutions.

Last year we made the decision to move away from majority-owned live businesses to capitalize on the growth opportunities we are seeing in core P&C run-off. To that end, we announced several transactions – alongside trusted partners – at our live underwriting operations, StarStone and Atrium. These transactions allow us to retain meaningful minority investments in the platforms, with Enstar retaining and managing the legacy portfolios.

COMPENSATION

Our 2020 financial results and the success of the corporate financial component of our annual incentive award program were reflected in the compensation of our employees, as we achieved maximum levels of performance targets.

Reported compensation for the year was primarily driven by the action we took in January 2020 to maintain and incentivize our leadership team. We extended employment agreements with, and granted new long-term incentive awards to, our Chief Executive Officer, President and Chief Operating Officer. These executives had not received long-term incentive awards since 2017. These awards are reported in the Summary Compensation Table at their full grant date fair value in year one.

CORPORATE GOVERNANCE

We were delighted that Susan Cross joined the Board in October 2020 to serve on Enstar’s Audit and Risk Committees, having previously held the Chief Actuary position at XL Group Ltd. (now AXA XL).

Rick Becker and I again engaged with our shareholders and proxy advisory firms to gather insight on our executive compensation and corporate governance matters. In consideration of feedback from our shareholders, and our desire to continue to enhance our corporate governance practices, we have included Proposal No. 1 in this Proxy Statement to amend our Bye-Laws to declassify the Board of Directors. The Proxy Statement also provides a summary of the primary issues we covered in these meetings.

VOTING

I urge you to vote as soon as possible using the internet, telephone, or, by completing and returning the proxy/voting instruction card by mail. I look forward to your online attendance at the 2021 Annual General Meeting.

Thank you for your continued support.


Sincerely,

Robert J. Campbell
Chairman of the Board

NOTICE OF 2021 ANNUAL GENERAL MEETING OF SHAREHOLDERS

WHEN

Wednesday, June 9, 2021 at 9:00 a.m.

Atlantic time (8:00 a.m. Eastern time)

WHERE

The Annual General Meeting can be

accessed virtually via the Internet by visiting

www.virtualshareholdermeeting.com/ESGR2021

ITEMS OF BUSINESS

1.To vote on a proposal to amend the Fifth Amended and Restated Bye-Laws of the Company to declassify our Board of Directors over a three-year period.

2.To vote on a proposal to elect four Class III Directors nominated by our Board to hold office until 2022, if Proposal 1 is approved by the shareholders, or, if Proposal 1 is not approved, to hold office until 2024.

3.To hold an advisory vote to approve executive compensation.

4.To ratify the appointment of KPMG Audit Limited as our independent registered public accounting firm for 2021 and to authorize the Board of Directors, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm.

ANNUAL MEETING DETAILS

Only holders of record of our voting ordinary shares at the close of business on April 13, 2021 are entitled to notice of and to vote at the meeting.

You are cordially invited to attend the virtual Annual General Meeting. Due to public health and travel concerns related to the COVID-19 pandemic, this year’s Annual General Meeting will be held solely by means of a virtual-only meeting over live webcast. So long as you were a holder of record of our voting ordinary shares as of the close of business on April 13, 2021, you or your proxy holder can attend, submit your questions, and vote your shares electronically at the virtual Annual General Meeting by visiting www.virtualshareholdermeeting.com/ESGR2021 and using your control number included in the proxy materials. During the meeting, you will be able to ask questions and will have the opportunity to vote to the same extent as you would at an in-person meeting of shareholders.

To ensure that your vote is counted at the meeting, please vote as promptly as possible. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your vote by proxy is revocable at your option in the manner described in the proxy statement.

By Order of the Board of Directors,



Audrey B. Taranto
General Counsel and Corporate Secretary
Hamilton, Bermuda
April 26, 2021

Important notice regarding the availability of proxy materials for the Annual General meeting of Shareholders to be held on June 9, 2021. This notice of meeting, the proxy statement, the proxy card and the annual report to shareholders for the year ended December 31, 2020 are available at https://investor.enstargroup.com/annual-reports.

TABLE OF CONTENTS


Proxy Statement Summary			i

Questions and Answers			1

Corporate Governance			6

Board of Directors			6

Directorship Arrangements			12

Independence of Directors			12

Board Leadership Structure			12

Board Meetings and Committees			13

Board Oversight of Risk Management			16

Director Nominations, Qualifications and Recommendations			19

Code of Conduct			21

Shareholder Communications with the Board			22

Director Compensation			23

Director Compensation Program			23

Deferred Compensation Plan			23

Director Compensation Table			24

Executive Officers			25

Principal Shareholders and Management Ownership			27

Certain Relationships and Related Transactions			30

Related Person Transaction Procedures			30

Transactions Involving Related Persons			30

Indemnification of Directors and Officers; Director Indemnity Agreements			34

Executive Compensation			36

Compensation Discussion and Analysis			36

Executive Summary			36

Objectives of our Executive Compensation Program			37

Roles of Executive Officers			37

Principal Elements of Executive Compensation			38

Role of Compensation Consultants			39

Peer Group			39

Base Salaries			40

Annual Incentive Compensation			41

Long-Term Incentive Compensation			46

Alignment of Pay and Performance			49

Executive Employment Agreements			49

Other Benefits and Perquisites			49

Change in Control and Post-Termination Payments			50

Clawback of Incentive Compensation			50

Shareholder Engagement and Results of Shareholder Vote on Compensation			50


Other Matters			51

Compensation Risk Assessment			52

Compensation Committee Report			52

Executive Compensation Tables			53

Summary Compensation Table			53

Grants of Plan-Based Awards			55

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table			56

Outstanding Equity Awards at Fiscal Year-End			57

Option Exercises and Stock Vested during Fiscal Year			58

Potential Payments upon Termination or Change in Control			58

CEO Pay Ratio			64

Equity Compensation Plan Information			64

Audit Committee Report			65

Proposal No. 1 — Board Declassification			66

Proposal No. 2 — Election of Directors			67

Proposal No. 3 — Advisory Vote to Approve Executive Compensation			68

Proposal No. 4 — Ratification of Appointment of Independent Registered Public Accounting Firm			69

Audit and Non-Audit Fees			69

Other Governance Matters			71

Shareholder Proposals for the 2022 Annual General Meeting			71

Householding			71

Other Matters			71

Proxy Statement
Summary

To assist you in reviewing our proxy statement, we have summarized several key topics below. The following description is only a summary and does not contain all of the information that you should consider before voting. For more complete information, you should carefully review the rest of our proxy statement, as well as our Annual Report to Shareholders for the year ended December 31, 2020.

ANNUAL GENERAL MEETING OF SHAREHOLDERS INFORMATION

WHEN

Wednesday, June 9, 2021 at 9:00 a.m.

Atlantic time (8:00 a.m. Eastern time)

WHERE

The Annual General Meeting can be

accessed virtually via the Internet by visiting

www.virtualshareholdermeeting.com/ESGR2021

RECORD DATE

April 13, 2021

VOTING

Your vote is very important and we urge you to

vote as soon as possible. See Question and

Answer No. 9 for voting instructions

VOTING MATTERS


Proposal		Board of Directors’ Vote Recommendation	Page References

1	Approval of an amendment to the Fifth Amended and Restated Bye-Laws of the Company to declassify the Board of Directors over a three-year period	FOR	Page 66 (Proposal No. 1)

2	Election of Directors: To vote on a proposal to elect four Class III Directors nominated by our Board to hold office until 2022, if Proposal 1 is approved by the shareholders, or, if Proposal 1 is not approved, to hold office until 2024	FOR the Director Nominees	Page 6 (Nominee Biographies) Page 67 (Proposal No. 2)

3	Advisory Approval of Enstar’s Executive Compensation	FOR	Page 36 (Compensation Discussion and Analysis) Page 53 (Summary Compensation Table) Page