DONEGAL GROUP INC 8-K

What Happened
Donegal Group Inc. (DGICA) announced on December 18, 2025 that its Board unanimously approved two new Executive Incentive Plans — an Annual Executive Incentive Plan for fiscal 2026 and a Long‑Term Executive Incentive Plan covering fiscal years 2026–2028. The plans apply to the Company’s named executive officers including the President & CEO and tie bonuses to Donegal Insurance Group performance (Donegal Mutual Insurance Company and its insurance subsidiaries). Annual metrics include commercial lines premium growth, statutory combined ratio goals and a target operating return on equity for 2026. The long‑term plan pays bonuses based on the average statutory combined ratio for 2026–2028 and reduces payouts by 25% if an executive fails to qualify for any annual bonus in the three‑year period.

Key Details

• Date approved: December 18, 2025; plans were previously approved by the Compensation Committee.
• Performance metrics: commercial lines premium growth, statutory combined ratio, and operating ROE (2026); long‑term payout tied to average statutory combined ratio (2026–2028).
• Adjustments and caps: statutory combined ratios exclude executive incentive payments/accruals and equity incentive expense; largest catastrophe impact limited to $15.0 million per year.
• Discretionary authority: the Joint Compensation Committees (Company and Donegal Mutual) may pay discretionary bonuses or adjust any bonus amounts regardless of objective results.
• Disclosure: further details on salaries, annual awards and equity grants will appear in the Company’s 2026 proxy statement.

Why It Matters
These plans formalize how senior executives will be rewarded for meeting specific business and underwriting targets, linking pay to premium growth, underwriting profitability and return on equity. For investors, the plans signal management’s focus on underwriting performance and growth, and they may affect future compensation expense and reported results (the filing describes certain adjustments to combined ratios). Because the Joint Compensation Committees retain discretionary adjustment authority, actual payouts may differ from formulaic outcomes; watch the 2026 proxy for exact award amounts and potential equity grants.