Watson steps down as CEO of Argo Group
Mark Watson has stepped down as chief executive officer of Argo Group International Holdings.
The surprise immediate departure comes only months after a bruising proxy battle with activist investor Voce Capital Management LLC.
Argo is due to release its third-quarter earnings results tomorrow afternoon, one day earlier than previously planned. Last week, the Bermudian-based company warned that its earnings will be adversely affected by several loss items.
Kevin Rehnberg has been named as interim CEO, effective immediately and subject to Bermuda regulatory approval.
The company said that to ensure a smooth transition, Mr Watson will continue to serve as a member of the board and as an adviser to the company until December 30.
Gary Woods, chairman of Argo’s board of directors, thanked Mr Watson for “20 years of service and his leadership in building the business, and wishes him well in his next endeavour”.
Mr Watson said: “It has been a great honour to build and lead this great company, and I look forward to its continued success under Kevin Rehnberg’s leadership.”
Earlier this year a proxy battle erupted between Argo Group and activist shareholders Voce Capital.
Voce Capital, a San-Francisco hedge fund that at the time was the beneficial owner of about 5.6 per cent of the shares of Argo, attacked what it called a “spendthrift culture” and “inappropriate corporate expenses” at Argo.
Argo hit back by saying Voce’s claims were “poorly researched” and had “little regard for the truth”.
Voce also pushed to have a number of Argo’s directors replaced, but withdrew its nominations just before the company’s annual meeting in May.
Argo did not mention the proxy battle in its statement regarding Mr Watson’s departure.
It stated it is fully co-operating with an investigation by the US Securities and Exchange Commission, which is in respect to its disclosures on certain compensation matters.
Argo also said that its independent directors of the board are continuing to conduct their review of governance and compensation matters, and that “the company continues to believe that the amounts involved are not material to the company’s financial position or results of operations”.
Interim CEO Mr Rehnberg has, since the start of the year, been president of Argo Group US Inc, head of the Americas and chief administrative officer. For the six years previous, he was president of Argo’s US operations,
Mr Woods said the board 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”.
While Mr Rehnberg said: “It is an honour to take on the interim CEO role and along with Argo’s talented leadership team, I’m proud to serve our clients and distribution partners.
“Argo is well positioned to continue delivering strong results for shareholders through profitable underwriting, longstanding relationships with distribution partners, operational excellence and disciplined capital management. We have also demonstrated the ability to unlock significant efficiencies and enhance customer service through technology and innovation. I will remain focused on these operating strategies.”
Before joining Argo, Mr Rehnberg was with OneBeacon Insurance.
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