SEC rules require certain adjustments to the summary compensation totals that appear in this proxy statement under the caption “Executive Compensation Discussion and Analysis - Summary Compensation Table” in order to determine “compensation actually paid” as those rules define that term. The following table summarizes the compensation actually paid to our president and chief executive officer, who is our principal executive officer (“PEO”), and the average compensation actually paid to our other named executive officers (“Non-PEO NEOs”) for fiscal years 2021 through 2025:
| Value of Initial Fixed $100 Investment Based On: |
|---|
| Year | Summary Compensation Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (3) | Average Compensation Actually Paid to Non-PEO NEOs ($) (4) | Class A Common Stock Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) | Net Income (Loss) ($) | Combined Ratio (%) |
|---|
| 2025 | 1,742,994 | 1,914,349 | 1,195,956 | 1,334,751 | 177.72 | 163.65 | 79,340,740 | 95.4 |
| 2024 | 1,456,810 | 1,464,535 | 995,416 | 1,003,072 | 130.65 | 136.71 | 50,862,252 | 98.6 |
| 2023 | 914,440 | 897,995 | 579,336 | 566,573 | 112.65 | 104.50 | 4,425,504 | 104.4 |
| 2022 | 1,180,431 | 1,256,456 | 751,940 | 805,762 | 109.16 | 102.08 | (1,959,405) | 103.3 |
| 2021 | 1,017,560 | 1,044,160 | 677,148 | 695,284 | 104.91 | 105.60 | 25,254,174 | 101.0 |
| (1) | Kevin Burke was our PEO for each of fiscal years 2021 through 2025. |
| (2) | We calculated the compensation actually paid to our PEO for each fiscal year as shown in the following table: |
| Year | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|
| PEO |
|---|
| Summary compensation total | $1,742,994 | $1,456,810 | $914,440 | $1,180,431 | $1,017,560 |
|---|
| Less: Equity award values reported in summary compensation total | (7,735) | (43,235) | (43,340) | (42,665) | (36,075) |
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| Add: Fair value of outstanding unvested equity awards granted in covered year | 9,990 | 40,855 | 40,355 | 51,500 | 34,985 |
|---|
| Change in fair value of outstanding unvested equity awards from prior years | 27,865 | (18,195) | (61,000) | (28,435) | (18,975) |
|---|
| Change in fair value of equity awards that vested in covered year | 141,235 | 28,300 | 47,540 | 95,625 | 46,665 |
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| Compensation actually paid | $1,914,349 | $1,464,535 | $897,995 | $1,256,456 | $1,044,160 |
|---|
| (3) | The following non-PEO NEOs are included in the average figures shown: |
| (a) | 2025: Daniel DeLamater, Jeffery Hay, Jeffrey Miller and Sanjay Pandey |
| (b) | 2024: Daniel DeLamater, Jeffery Hay, Jeffrey Miller and Sanjay Pandey |
| (c) | 2023: Jeffery Hay, Jeffrey Miller, Sanjay Pandey, Daniel Wagner |
| (d) | 2022: Jeffery Hay, Jeffrey Miller, Sanjay Pandey, Daniel Wagner |
| (e) | 2021: Jeffery Hay, Richard Kelley, Jeffrey Miller and Sanjay Pandey |
| (4) | We calculated the average compensation actually paid to our non-PEO NEOs for each fiscal year as shown in the following table: |
| Year | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|
| Non-PEO NEOs |
|---|
| Summary compensation total | $1,195,956 | $995,416 | $579,336 | $751,940 | $677,148 |
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| Less: Equity award values reported in summary compensation total | (1,934) | (30,061) | (30,088) | (29,536) | (19,001) |
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| Add: Fair value of outstanding unvested equity awards granted in covered year | 2,498 | 29,879 | 27,811 | 36,463 | 18,316 |
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| Change in fair value of outstanding unvested equity awards from prior years | 28,793 | (10,499) | (43,250) | (16,273) | (7,156) |
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| Change in fair value of equity awards that vested in covered year | 109,438 | 18,337 | 32,764 | 63,168 | 25,977 |
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| Compensation actually paid | $1,334,751 | $1,003,072 | $566,573 | $805,762 | $695,284 |
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We determined fair value of equity awards in the same manner we determine fair value for share-based payments we reflect in our financial statements.
We calculated the value of an initial fixed $100 investment at December 31, 2020 based on total shareholder return for our Class A common stock and peer group total using the same methodology that we used in preparing the performance graph that appeared in our 2025 Annual Report on Form 10-K. Our peer group consists of Cincinnati Financial Corporation, The Hanover Insurance Group, Inc., Horace Mann Educators Corporation, Kemper Corporation, Selective Insurance Group Inc. and United Fire Group, Inc.
We present below graphs showing the relationship of the compensation actually paid to our PEO and the average compensation actually paid to our Non-PEO NEOs to (1) our TSR, (2) our net income (loss) and (3) our combined ratio and our cumulative total shareholder return (“TSR”) compared to our peer group TSR for fiscal years 2021 through 2025:
We consider the following financial performance measures, as we define them in this proxy statement under the caption “Our Annual Cash Incentive Bonus Plan - Definition of Performance Measures,” as our most important financial performance measures we used to link compensation actually paid to our named executive officers to our performance for 2025:
| ● | commercial lines direct premium growth rate for the Donegal Insurance Group; |
| ● | adjusted statutory combined ratio for the Donegal Insurance Group; and |
| ● | our operating return on equity. |
