- The board of First American Monetary reshuffled the management deck on the $6 billion title insurance coverage and settlement agency after its CEO was arrested and charged with misdemeanor assault. The CFO is stepping in to fill the CEO place, and the board chairman will dive in as a brand new govt chair at First American. Ousted CEO Kenneth D. DeGiorgio—whose attorneys say he will likely be cleared of wrongdoing—will nonetheless accumulate hundreds of thousands in severance as detailed underneath his contract, the corporate informed buyers this month.
The CEO of First American Monetary was summarily ousted after he was arrested and charged with assault in San Juan this month. Kenneth D. DeGiorgio was touring aboard a Virgin Voyages Caribbean cruise ship together with his spouse when he was accused of choking one other passenger in a maritime incident that was captured on surveillance footage and considered by safety officers, in response to an FBI affidavit.
Days after DeGiorgio’s arrest, First American Monetary introduced his employment was terminated with out trigger—which suggests DeGiorgio nonetheless stands to gather about $18.6 million, in response to a revised shareholder report the corporate revealed. That fee contains $7.24 million in severance, $9.14 million in accelerated vesting of fairness he was entitled to as a part of his compensation bundle, and $2.2 million owed to him underneath the corporate’s retirement plan. Had he been terminated “for cause,” which nearly by no means occurs amongst CEOs on the planet of U.S. publicly traded corporations, the corporate indicated he wouldn’t have been entitled to any funds in anyway.
Company governance knowledgeable and Georgetown College affiliate professor Jason Schloetzer informed Fortune a board would possibly terminate a CEO with out trigger after costs are introduced to guard the corporate’s popularity, keep away from authorized disputes, and keep operational stability—significantly when a for trigger termination is not but justified by the proof.
“Terminating without cause reduces the risk of a wrongful termination lawsuit, especially when the charges haven’t yet resulted in a conviction and the board cannot prove the CEO’s involvement in the misconduct,” mentioned Schloetzer. “The board’s decision certainly sends a message to shareholders that it is actively overseeing management and prioritizes the company’s long term interests over what may become a leadership distraction.”
Eric Hoffmann, vp and chief knowledge officer at compensation consulting agency Farient Advisors, informed Fortune money severance funds are sometimes a a number of of wage and a a number of of bonus and two occasions is comparatively widespread. In First American’s case, each are 2x, which isn’t exterior of market norms. As well as, the unvested restricted inventory models DeGiorgio held on the time of termination had been instantly vested on an accelerated foundation. Which means as an alternative of DeGiorgio having to attend for the time interval on his fairness to elapse, he’ll get his shares comparatively instantly, mentioned Hoffman.
Hoffman additionally famous that DeGiorgio had simply negotiated a new employment settlement with First American dated Feb. 18, 2025, which boosted his annual wage to $1 million. The settlement was slated to proceed till Dec. 31, 2027—until he was terminated earlier.
A spokesman for First American Monetary didn’t remark past the corporate’s official statements.
After firing DeGiorgio, First American Monetary named chief monetary officer Mark Seaton, 47, as CEO and appointed him to the board. The board promoted former treasurer Matthew Wajner as CFO to interchange Seaton and board chairman Dennis Gilmore will transition into govt chairman of First American, the corporate introduced.
Following the management reshuffle, First American issued an amended shareholder report in reference to its annual stockholder assembly in Could that mirrored the brand new appointments and provided extra “clerical corrections” to the prior proxy assertion, the corporate mentioned. The revised proxy assertion exhibits that DeGiorgio is entitled to numerous funds valued at $18.6 million upon being terminated with out trigger, whereas the proxy assertion issued earlier than his arrest and ouster confirmed the whole as $16.4 million. The distinction had been listed within the “Disability” column within the unique proxy, mentioned Hoffman.
“We are looking forward to our next chapter under the strong leadership of Mark Seaton,” mentioned Gilmore in a press launch. “No one is more ready to be our CEO than Mark, who has played a leading role in our most critical strategic initiatives, which are driving the digital transformation of our business. We want to thank Ken DeGiorgio for his many years of service to First American.”
Seaton has been CFO since 2013 and joined the corporate in 2006. DeGiorgio was named CEO in February 2022 and had been with the corporate for 25 years.
DeGiorgio’s authorized workforce informed Fortune: “The incident was the result of Mr. DeGiorgio standing up for his wife of over 30 years, who a man was harassing, making her feel threatened and intimidated.
As the father of two daughters and husband of his high school sweetheart, Mr. DeGiorgio says it has been the honor of a lifetime to have served at the helm of First American, a great company that champions a workforce that is over two-thirds female.”
The San Juan area workplace of the FBI mentioned cruise ship authorities alerted the FBI in regards to the incident that allegedly occurred on board the Virgin Voyages’ Resilient Girl within the early hours of March 31. The investigation is ongoing.
In accordance with the affidavit, the alleged struggle between DeGiorgio and a patron on the “On the Rocks” bar aboard the ship occurred after Nichol DeGiorgio requested the barefoot patron, who was dancing, to place his footwear again on. The patron allegedly informed DeGiorgio to “shut up,” and referred to as her a “b–ch,” whereas displaying her his center finger.
The affidavit states surveillance footage confirmed DeGiorgio allegedly get up, stroll over to the patron, and wrap his palms across the patron’s throat. The sufferer informed FBI brokers Kenneth DeGiorgio compressed his throat with power whereas allegedly telling him, “I am going to f—ing kill you,” throughout the alleged assault. A bartender on the ship referred to as safety workers after the alleged struggle.
“Violent crimes committed aboard cruise ships fall under federal jurisdiction and we take them very seriously,” mentioned Performing Particular Agent in Cost Devin J. Kowalski of the FBI’s San Juan Area Workplace. “If you break the law at sea, expect to face consequences on land.”
Makes an attempt to achieve DeGiorgio had been unsuccessful.
This story was initially featured on Fortune.com
