Argo Group International Holdings, Ltd. has taken action to strengthen its internal controls following its probe on the perquisites enjoyed by former chief executive Mark E. Watson III.
In a 71-page proxy statement filed by the international underwriter ahead of its April annual general meeting, Argo revealed the results of its extensive investigation which examined the ex-CEO’s use of corporate aircraft, his travel and entertainment expenditures, and any other amounts paid by or benefits provided by the company at Watson’s request or on his behalf from 2014 to 2019.
The probe, which involved the engagement of outside counsel and a forensic auditor, was conducted after Argo received a subpoena from the US Securities and Exchange Commission seeking documents with respect to the firm’s disclosure of certain compensation-related perquisites received by Watson during the period.
In the March 06 filing seen by Insurance Business, Argo identified the perks provided to Watson from 2017 to 2019 which were either not fully disclosed or not disclosed at all in previous annual meeting proxy statements. These included residences and furniture in Bermuda and New York, concierge service membership dues, family vacations, and even museum benefit event tickets.
In 2017 alone, the amounts totalled nearly US$1.6 million (around CA$2.18 million).
Now it looks like Argo has learned its lesson and won’t want an encore.
“In connection with the investigation, the company has adopted and implemented a set of new and enhanced written policies and procedures to strengthen the company’s internal controls and procedures regarding travel, entertainment, and related expenses,” noted the Bermuda-headquartered group.
Among those rolled out are Argo’s revised executive perquisite policy and revised airplane use policy, as well as enhancements to its internal process of perquisites reporting and to controls relating to the review of expense reports.
Meanwhile, under Watson’s separation agreement with Argo, he agreed to reimburse the specialist insurer for certain alleged personal expenses paid for by the firm, subject to proceeding to arbitration as to expenses being disputed by the former boss. Watson stepped down as chief executive last November.
