Employee Share-Based Incentive Compensation Plans

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Employee Share-Based Incentive Compensation Plans

White Mountains’s share-based incentive compensation plans are designed to incentivize key employees to maximize shareholder value over long periods of time. White Mountains believes that this is best pursued by utilizing a pay-for-performance program that closely aligns the financial interests of management with those of its shareholders while rewarding appropriate risk taking. White Mountains accomplishes this by emphasizing variable long-term compensation that is contingent on performance over a number of years rather than fixed entitlements. White Mountains expenses all its share-based compensation. As a result, White Mountains’s calculation of its owners’ returns includes the expense of all outstanding share-based compensation awards.

The WTM Incentive Plan provides for grants of various types of share-based and non-share-based incentive awards to key employees and directors of White Mountains. As of December 31, 2024 and 2023, White Mountains’ share-based incentive compensation awards consist of performance shares and restricted shares.

Performance Shares

Performance shares are designed to reward employees for meeting company-wide performance targets. Performance shares are conditional grants of a specified maximum number of common shares or an equivalent amount of cash. Awards generally vest at the end of a three-year service period, are subject to the attainment of pre-specified performance goals, and are valued based on the market value of common shares at the time awards are paid. Performance shares earned under the WTM Incentive Plan are typically paid in cash but may be paid in common shares. Compensation expense is recognized for the vested portion of the awards over the related service periods. The level of payout ranges from zero to two times the number of shares initially granted, depending on White Mountains’s financial performance. Performance shares become payable at the conclusion of a performance cycle (typically three years) if pre-defined financial targets are met. The performance measure used for determining performance share payouts is the growth in compensation value per share (“CVPS”), which is the average of the growth in adjusted book value per share and the growth in intrinsic value per share. Intrinsic value per share is calculated by adjusting White Mountains’s adjusted book value per share for differences between the adjusted book value of certain assets and liabilities and White Mountains’s estimate of their underlying intrinsic value.

The following table presents performance share activity for the years ended December 31, 2024, 2023 and 2022 for performance shares granted under the WTM Incentive Plan:


	Year Ended December 31,
	2024			2023			2022
$ in Millions	Target Performance Shares Outstanding	Accrued Expense		Target Performance Shares Outstanding	Accrued Expense		Target Performance Shares Outstanding	Accrued Expense
Beginning of period	37,031	$	69.4	39,449	$	67.5	40,828	$	42.2
Shares paid or expired (1)	(13,475)	(44.9)		(13,350)	(40.8)		(14,625)	(26.4)
New grants	11,405	—		10,895	—		13,225	—
Forfeitures and cancellations (2)	(102)	—		37	(.1)		21	(.4)

Expense recognized	—	46.6		—	42.8		—	52.1
End of period	34,859	$	71.1	37,031	$	69.4	39,449	$	67.5

(1)WTM performance share payments in 2024 for the 2021-2023 performance cycle, which were paid in March 2024 at 188% of target.

WTM performance share payments in 2023 for the 2020-2022 performance cycle, which were paid in March 2023 at 200% of target.

WTM performance share payments in 2022 for the 2019-2021 performance cycle, which were paid in March 2022 at 172% of target.

(2)Amounts include changes in assumed forfeitures, as required under GAAP.

During 2024, White Mountains granted 11,405 performance shares for the 2024-2026 performance cycle. During 2023, White Mountains granted 10,895 performance shares for the 2023-2025 performance cycle. During 2022, White Mountains granted 13,225 performance shares for the 2022-2024 performance cycle.

For the 2021-2023 performance cycle, the Company issued common shares for 100 performance shares earned, and all other performance shares earned were settled in cash. For the 2020-2022 performance cycle, all performance shares earned were settled in cash. For the 2019-2021 performance cycle, the Company issued common shares for 750 performance shares earned, and all other performance shares earned were settled in cash. If all outstanding performance shares had vested on December 31, 2024, the total additional compensation cost to be recognized would have been $23.1 million, based on accrual factors as of December 31, 2024 (common share price and payout assumptions).

The following table presents performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of December 31, 2024 for each performance cycle:


	December 31, 2024
$ in Millions	Target Performance Shares Outstanding	Accrued Expense
Performance cycle:
2024 – 2026	11,405	$	6.5
2023 – 2025	10,835	14.4
2022 – 2024	13,150	51.3
Sub-total	35,390	72.2
Assumed forfeitures	(531)	(1.1)
Total	34,859	$	71.1

For the 2024-2026 performance cycle, the targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan is 11% average annual growth in CVPS. Average annual growth of 6% or less would result in no payout, and average annual growth of 16% or more would result in a payout of 200%.

For the 2023-2025 performance cycle, the targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan is 11% average annual growth in CVPS. Average annual growth of 6% or less would result in no payout, and average annual growth of 16% or more would result in a payout of 200%.

For the 2022-2024 performance cycle, the targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan is 9% average annual growth in CVPS. Average annual growth of 4% or less would result in no payout, and average annual growth of 14% or more would result in a payout of 200%.

Restricted Shares

Restricted shares are grants of a specified number of common shares that generally vest at the end of a 34-month service period. The following table presents the unrecognized compensation cost associated with the outstanding restricted share awards under the WTM Incentive Plan for the years ended December 31, 2024, 2023 and 2022:


	Year Ended December 31,
	2024			2023			2022
$ in Millions	Restricted Shares	Unamortized Issue Date Fair Value		Restricted Shares	Unamortized Issue Date Fair Value		Restricted Shares	Unamortized Issue Date Fair Value
Non-vested:
Beginning of period	37,595	$	16.2	38,350	$	15.5	37,850	$	15.9
Issued	11,405	20.0		10,895	16.0		13,225	13.8
Vested	(13,475)	—		(11,650)	—		(12,725)	—
Forfeited	(135)	—		—	—		—	—

Expense recognized	—	(16.3)		—	(15.3)		—	(14.2)
End of period	35,390	$	19.9	37,595	$	16.2	38,350	$	15.5

During 2024, White Mountains issued 11,405 restricted shares that vest on January 1, 2027. During 2023, White Mountains issued 10,895 restricted shares that vest on January 1, 2026. During 2022, White Mountains issued 13,225 restricted shares that vest on January 1, 2025. The unamortized issue date fair value as of December 31, 2024 is expected to be recognized ratably over the remaining vesting periods.