Related-Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related-Party Transactions

RELATED-PARTY TRANSACTIONS

In 2014, the Company entered into a three year employment agreement with Mr. John R. Hart, President and Chief Executive Officer, effective from January 1, 2015 to December 31, 2017, that provides for the following:

• An initial base salary of $2.2 million for 2015, and standard benefits package, subject to an annual cost of living adjustment that is subject to Compensation Committee approval and certain termination benefits.

• An incentive award based on the growth of the Company’s book value per share during the fiscal year, above a threshold.  The threshold above which an incentive award is earned is 80% of the S&P 500 total return for the five previous years.  If the increase in book value per share exceeds this threshold, the incentive compensation award is 7.5% of the increase in book value per share, multiplied by the number of shares outstanding at the beginning of the year. The award earned for an applicable year is subject to proration if Mr. Hart’s employment is terminated other than for cause or if he resigns for good reason. For the three years ended December 31, 2014, the growth in book value per share did not exceed the threshold and no incentive award was earned.

On August 6, 2012, the Company entered into a severance agreement with each of Maxim C. W. Webb, Executive Vice President and Chief Financial Officer, and John T. Perri, Vice President and Chief Accounting Officer.  Each agreement provides for the payment of two years base salary and a pro rata portion of the annual cash incentive payment, as well as reimbursement of up to one year of COBRA expenses, in the event of an involuntary termination of employment (other than for “cause”) or a resignation for “good reason.”  Each agreement has a term of two years and will automatically renew for an additional two year term unless, at least 90 days before the expiration of the then current term, the compensation committee decides to terminate or amend the agreement. The agreements with Mr. Webb and Mr. Perri automatically renewed on August 6, 2014.

The Company has agreements with its President and CEO, and certain other officers and non-employee directors, to defer compensation into Rabbi Trust accounts held in the name of the Company.  The total value of the deferred compensation obligation for all participants at December 31, 2014, and 2013, was $24.6 million and $24.2 million, respectively, and is included in the accompanying consolidated balance sheet.  These totals include a fair value of $1.5 million and $2 million of the Company’s common stock, for each of the respective years, with the balance in various publicly traded equities and bonds.  Within these accounts, the following officers and non-employee directors are the beneficiaries of the following number of PICO common shares:

	December 31, 2014	December 31, 2013
Mr. John Hart	53,996	53,996
Mr. Maxim Webb	1,375	1,375
Mr. Raymond Webb	20,000	30,000
Mr. Carlos Campbell	2,644	2,644

The trustee for the accounts is U.S. Bank.  The accounts are subject to the claims of outside creditors, and the cost of the shares of PICO common stock held in the accounts are reported as treasury stock in the consolidated financial statements.

Certain officers of Vidler are eligible to receive an annual incentive award based on the combined net income, after certain adjustments, of Vidler.  No compensation was earned under this plan during the three years ended December 31, 2014.

Certain officers of UCP are eligible to receive an annual incentive compensation award which is paid in cash. No compensation was earned under this plan for the year ended December 31, 2014. For the years ended December 31, 2013 and 2012, compensation of $919,000 and $223,000 was earned, respectively.

Certain officers of Northstar are eligible to receive an annual incentive award based on the net income of Northstar, after certain adjustments. No compensation was earned under this plan during the three years ended December 31, 2014.

The Company has an investment in preferred stock and an outstanding line of credit with Synthonics, a company co-founded by Mr. Slepicka, a director of the Company, who is currently the Chairman, Chief Executive Officer and acting Chief Financial Officer of Synthonics. As of December 31, 2014, the Company had invested $2.2 million for 19.6% of the voting interest in Synthonics. In addition, the Company extended a $400,000 line of credit to Synthonics during 2014, which bears interest at 15% per annum, and then later in the year increased the line to $450,000. As of December 31, 2014, $280,000 was outstanding on the line of credit.