Employers
Holdings, Inc.
10375
Professional Circle
Reno,
NV 89521
June
26, 2009
Jeffrey
P. Riedler, Esq.
Assistant
Director
Division
of Corporate Finance
United
States Securities and Exchange Commission
100 F
Street, N.E.
Washington,
D.C. 20549-4720
Dear
Mr. Riedler:
Employers
Holdings, Inc., a Nevada corporation (referred to as the “Company”), is
submitting this letter in response to your letter to Douglas D. Dirks dated June
15, 2009, regarding the Company’s Proxy Statement on Schedule 14A for its 2009
Annual Meeting of Stockholders filed with the Securities and Exchange Commission
(the “Commission”) on April 16, 2009 (the “Proxy Statement”).
Your
comments are set forth below, followed by the Company’s
responses. Page references refer to the Proxy Statement.
Schedule
14A
Compensation Discussion and
Analysis
General
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1.
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Please
include a table disclosing option exercises and stock vested as required
by Item 402(g) of Regulation S-K.
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Response:
The
table required by Item 402(g) of Regulation S-K requests
information regarding the number of shares acquired by the named executive
officers as a result of the exercise of stock options, the value realized as a
result of that exercise, the number of shares acquired on the vesting of stock
grants and the value realized as a result of that vesting. The
Company has been publicly traded for just over two years. During the
2008 fiscal year, none of the Company’s named executive officers exercised stock
options. Therefore, none of the Company’s named executive officers
received shares (or value) as a result of an exercise of stock
options. Similarly, during the 2008 fiscal year, none of the
Company’s named executive officers' stock awards granted from the Company vested
and, therefore, the named executive officers did not receive any value
associated with vesting.
June
26, 2009
Page
2
Item
402(a)(5) of Regulation S-K provides: "Omission of Table or
Column: A table or column may be omitted if there has been no
compensation awarded to, earned by, or paid to any of the named executive
officers or directors required to be reported in that table or column in any
fiscal year covered by the table." For the reasons described above
and in reliance on Item 402(a)(5) of Regulation S-K, the Company did not include
in its Proxy Statement the table otherwise required by Item 402(g) of Regulation
S-K.
The
Company acknowledges that stock (or stock unit) grants to named executive
officers will vest in future fiscal years, including fiscal year 2009, and that
stock options may be exercised by named executive officers in such
years. In future filings, the Company will include the table required
by Item 402(g) of Regulation S-K, with the appropriate information, to the
extent required by applicable rules and regulations.
Annual Bonus, page
14
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2.
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Please
expand your disclosure in this section to enumerate the individual goals
that were set for each named executive
officer.
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Response:
As
described below, the Company respectfully submits that its disclosure of the
individual goals applicable to the named executive officers' annual bonuses was
adequate, and any information regarding such goals that was not disclosed in the
Proxy Statement is not material to investors. The Company believes
that the disclosure provided in the Proxy Statement is sufficient to provide
investors with adequate information regarding the individual goals.
(a)
Disclosure Provided is
Sufficient to Satisfy the Requirement to Enumerate Individual
Goals
The
Company believes that it has provided adequate disclosure in the Proxy Statement
through its enumeration of the individual goals that were set for the named
executive officers' annual bonuses and the role these goals played in the
overall compensation of the named executive officers. Specifically,
at page 15, the Company explained the process for the establishment of the
individual goals for each of the named executive officers, which goals were
based on the Compensation Committee's discussions with the Chief Executive
Officer (the "CEO"). The Company then provided several of the
individual goals that applied to some, and in the case of the successful
acquisition and integration of AmCOMP Incorporated (“AmCOMP”), all of the named
executive officers. Finally, at page 16, the Company presented (i)
the annual bonus determinations made by the Compensation Committee based on
input from the CEO (except as to the CEO himself), (ii) the named executive
officers’ levels of satisfaction of their respective individual goals and (iii)
the payment calculations associated therewith.
Each of
the individual goals included or was associated with the following three bullets
reprinted from pages 15 - 16:
June
26, 2009
Page
3
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“Developing
and implementing strategies and business plans that further our business
operations, including the successful acquisition and integration of AmCOMP
Incorporated;
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Ensuring
compliance with various legal requirements such as public filings and
corporate compliance;
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Developing
internal capabilities to reduce the reliance on outside expertise and/or
the need to hire additional
staff.”
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(b)
Additional Disclosure Would
Not Be Material to Investors and Therefore the Disclosure Provided Was Sufficient
to Provide Investors With Adequate Information Regarding the Individual
Goals
The
Company also respectfully submits that disclosure of any additional information
regarding the individual performance goals would not be material to investors
and the Company believes that its disclosure in the Proxy Statement was
sufficient for an investor to understand the nature of the goals and the role
that these goals played in the overall compensation program for the named
executive officers. In this regard, the Company described the
elements of its executive compensation program at pages 13 through 17, and
provided details regarding the individual goals on pages 15 and 16, which goals
are listed in Section 2(a) above.
As this
disclosure indicates, for the 2008 fiscal year, the Compensation Committee
approved individual goals for each of the named executive officers, and, for
each named executive officer, one of these goals was related to the successful
acquisition and integration of AmCOMP. This goal, which was disclosed
at page 15, represented the largest single individual goal for each of the named
executive officers. Additionally, the Company respectfully notes that
the table appearing at page 15 indicates that each named executive officer was
eligible for an annual cash bonus of between 45% and 90% of his base salary,
with 80% of the bonus based on the achievement of corporate performance goals
(which were described at page 15) and 20% of the bonus based on the achievement
of individual performance goals (which were also described at page
15). Thus, the maximum payout for the individual performance goal
portion of each named executive officer’s cash bonus was, depending on the named
executive officer, only 9-18% of his base salary.
For
each of the named executive officers, the value of achieving all of his
individual performance goals — other than the goal regarding the successful
acquisition and integration of AmCOMP — ranged from 2.7% to 9% of each named
executive officer’s base salary, and was an even smaller number when expressed
as a percentage of the total compensation received by the named executive
officers for the 2008 fiscal year. Moreover, the above percentages
would be even lower when the value of all other disclosed individual goals are
taken into account. Finally, inasmuch as each of the named executive officers
had several individual goals, and the goal related to the AmCOMP acquisition
constituted 50% of the individual goals for four of the named executive officers
and 70% of the individual goals for the remaining named executive officer, each
of the remaining goals ranged from only .9% to 3.6% of salary. In
fact, seven of such individual goals ranged from .9% to 1.1% of salary, and the
other eight ranged from 1.35% to 3.6% of salary. Consequently, given
the small percentages of the named executive officers' base salaries that could
have been paid out upon
June
26, 2009
Page
4
the
achievement of all individual performance goals, the Company respectfully
submits that any goals not specifically identified in the Proxy Statement were
immaterial to each named executive officer’s total
compensation. Therefore, the Company believes that the disclosures in
the Proxy Statement are adequate for an investor to understand this component of
the Company’s executive compensation program.
In
future filings, the Company agrees to enumerate the individual performance goals
applicable to the named executive officers to the extent such information is
material to an investor's understanding of the compensation of the Company's
named executive officers, and disclosure of such goals would not result in
competitive harm to the Company.
* * *
In
connection with our response to your letter, the Company acknowledges the
following:
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the
Company is responsible for the adequacy and accuracy of the disclosure in
the Company’s filing;
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comments
from the Staff (the "Staff") of the Commission or changes to disclosure in
response to Staff comments do not foreclose the Commission from taking any
action with respect to the filing;
and
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the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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If you
have any questions regarding the foregoing, please contact the undersigned at
(775) 327-2547.
| Very truly yours, | |
| EMPLOYERS HOLDINGS, INC. | |
| /s/ Lenard T. Ormsby | |
| Lenard T. Ormsby, Esq. | |
| Executive Vice President, Chief Legal Officer & | |
| General Counsel |
cc: Michael
Rosenthall, Esq., Securities and Exchange Commission
Douglas D. Dirks, Employers Holdings,
Inc.
Susan J. Sutherland, Esq., Skadden,
Arps, Slate, Meagher & Flom LLP
David C. Ingles, Esq., Skadden, Arps,
Slate, Meagher & Flom LLP