Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________ 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.    )
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Soliciting Material Pursuant to §240.14a-12
ENSTAR GROUP LIMITED
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
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Dear Fellow Shareholders:
On behalf of Enstar Group Limited's Board of Directors, I invite you to join us at our 2019 Annual General Meeting of Shareholders on Tuesday, June 11, 2019 at 9:00 a.m. Atlantic time. The meeting will be held at our headquarters, Windsor Place, 3rd Floor, 22 Queen Street, in Hamilton, Bermuda, to vote on the matters described in the notice of the Annual General Meeting and the Proxy Statement that follow. We also encourage you to read our 2018 Annual Report on Form 10-K.
STRATEGY & PERFORMANCE
Enstar's strategy is to provide long-term value by delivering market-leading insurance solutions through innovation, discipline, financial optimization, and operational excellence. Despite challenges that impacted 2018 financial results, Enstar accomplished several important strategic objectives, including the acquisition of record levels of new legacy business and the completion of several capital raising transactions. Performance in core run-off operations was offset by losses in the StarStone segment and unrealized losses on the fixed income portfolio, which resulted in the first annual consolidated net loss in Enstar's history as a publicly-traded company. Enstar and Stone Point Capital are strengthening StarStone, and Enstar's Board has overseen the addition to StarStone's management team of seasoned industry leaders, who are redefining StarStone's strategy and assessing its opportunities. Given Enstar's significant asset growth during 2018, we exited the year with over $12 billion of cash and investments. Over time, we expect our investments to provide a substantial source of earnings. However, this comes with volatility, as our 2018 results reflect, particularly in the fourth quarter.
Enstar remains a leader in the run-off space and our fundamental business is strong and well-positioned for future growth.
GOVERNANCE & COMPENSATION
In 2018, our Board remained focused on its composition and the mix of skills in the boardroom. Following the addition of several strong directors since 2015, our Nominating & Governance Committee has turned its focus to bringing additional technological and cybersecurity expertise to our Board.
Following significant changes to our compensation programs during recent years, we did not make any structural changes to executive compensation in 2018. Given Enstar's 2018 financial results, however, the threshold financial metrics underlying the annual incentive program were not achieved, and therefore the company financial performance portion of the award did not pay out under the plan formula. Furthermore, although the executives achieved many of the individual objectives underlying the operational portion of the annual incentive program, the Compensation Committee, in consultation with our CEO, decided to significantly reduce the annual incentive award payments to our CEO, President and COO, in recognition of the 2018 results.
SHAREHOLDER ENGAGEMENT
Rick Becker and I continued our shareholder engagement program this year, and we were pleased to speak to a number of our large shareholders and proxy advisory firms. This gave us the opportunity to explain our business and our governance and compensation programs while listening to shareholder views. The percentage of shareholders who accepted engagement meetings declined this year, with a number of firms indicating they already had sufficient information on our compensation and governance programs. Our Board values and regularly considers the feedback received from our shareholders during engagement meetings, and we encourage other shareholders interested in speaking with us to participate.
VOTING
Your support is important, so please vote as soon as possible using the internet, telephone, or, if you received a proxy/voting instruction card, by marking, dating, and signing it, and returning it by mail. I hope to see you at the 2019 Annual General Meeting. As always, thank you for your continued support of Enstar.
Sincerely,
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Robert J. Campbell
Chairman of the Board

Enstar Group Limited
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2019 Proxy Statement

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ENSTAR GROUP LIMITED
NOTICE OF 2019 ANNUAL GENERAL MEETING OF SHAREHOLDERS
June 11, 2019
To the shareholders of Enstar Group Limited:
Notice is hereby given that the 2019 Annual General Meeting of Shareholders of Enstar Group Limited (the "Company") will be held at the following location and for the following purposes:
When:
Tuesday, June 11, 2019 at 9:00 a.m. Atlantic time
Where:
Windsor Place, 3rd Floor
22 Queen Street
Hamilton, Bermuda HM11
Items of Business:
1.
To elect three Class I Directors nominated by our Board of Directors to hold office until 2022.
 
2.
To hold an advisory vote to approve executive compensation.
 
3.
To ratify the appointment of KPMG Audit Limited as our independent registered public accounting firm for 2019 and to authorize the Board of Directors, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm.
 
4.
To approve the amendment of our Bye-Laws to remove the voting cutback.
 
5.
To approve the amendment of our Bye-Laws to remove subsidiary voting.
 
6.
To approve the amendment of our Bye-Laws for general updates.
 
7.
To act on the election of directors for our subsidiaries.
Who Can Vote:
Only holders of record of our voting ordinary shares at the close of business on April 15, 2019 are entitled to notice of and to vote at the meeting.
You are cordially invited to attend the Annual General Meeting in person. To ensure that your vote is counted at the meeting, however, please vote as promptly as possible. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your vote by proxy is revocable at your option in the manner described in the proxy statement.
By Order of the Board of Directors,
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Audrey B. Taranto
Corporate Secretary
Hamilton, Bermuda
April 26, 2019
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 11, 2019
This notice of meeting, the proxy statement, the proxy card and the annual report to shareholders
for the year ended December 31, 2018 are available at https://investor.enstargroup.com/annual-reports.

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TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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PROXY STATEMENT SUMMARY
To assist you in reviewing our proxy statement, we have summarized several key topics below. The following description is only a summary and does not contain all of the information that you should consider before voting. For more complete information, you should carefully review the rest of our proxy statement, as well as our Annual Report to Shareholders for the year ended December 31, 2018.
Annual General Meeting of Shareholders Information
Date and Time
June 11, 2019
9:00 a.m., Atlantic time
Place
Enstar Group Limited’s Corporate Headquarters
Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, Bermuda
Record Date
April 15, 2019
Voting
Your vote is very important and we urge you to vote as soon
as possible. See Question and Answer No. 10 on
Page 3 for voting instructions.
Voting Matters
Proposal
Board of Directors’ Vote
Recommendation
Page References
1.   Election of Directors:
Robert J. Campbell
Jie Liu
Paul J. O'Shea
FOR the Director Nominees
Page 6 (Nominee Biographies)
Page 59 (Proposal No. 1)
2.   Advisory Approval of Enstar’s Executive Compensation
FOR
Page 33 (Compensation Discussion and Analysis)
Page 50 (Summary Compensation Table)
Page 60 (Proposal No. 2)
3.   Ratification of KPMG Audit Limited as the Independent Registered Public Accounting Firm for 2019
FOR
Page 61 (Proposal No. 3)
Page 61 (Audit and Non-Audit Fees Table)
4. Approval of the amendment of our Bye-Laws to remove the voting cutback
FOR
Page 63 (Proposal No. 4)
Appendix A (Bye-Law Amendments)
5. Approval of the amendment of our Bye-Laws to remove subsidiary voting
FOR
Page 63 (Proposal No. 5)
Appendix A (Bye-Law Amendments)
6. Approval of the amendment of our Bye-Laws for general updates
FOR
Page 63 (Proposal No. 6)
Appendix A (Bye-Law Amendments)
7.   Acting on Election of Directors for our Subsidiaries
FOR each Subsidiary Director Nominee
Page 64 (Proposal No. 7)
Appendix B (Subsidiary Director Nominee Biographies)
Board Composition
The following describes our current Board composition and current committee assignments of each of our directors.
Director
Age
Director Since
Primary Occupation
Independent
Board Committee Membership*
Other Current Public Boards
Robert J. Campbell
(Chairman)
70
2007
Partner, Beck Mack and Oliver
þ
AC, CC, NGC, IC, EC
1
Dominic F. Silvester
58
2001
CEO, Enstar Group Limited
 
EC
0
B. Frederick Becker
72
2015
Chairman, Clarity Group, Inc.
þ
AC, CC, NGC
0
Sandra L. Boss
52
2015
Bank of England Policy Committee Member; former McKinsey partner
þ
CC, NGC, RC, EC
1
James D. Carey
52
2013
Senior Principal, Stone Point Capital
 
IC
1
Hans-Peter Gerhardt
63
2015
Former CEO of Asia Capital Re, PARIS RE and AXA Re
þ
RC
0
Jie Liu
40
2017
Partner, Hillhouse Capital
 
IC
0
Paul J. O’Shea
61
2001
President, Enstar Group Limited
 
 
0
Hitesh R. Patel
58
2015
Former CEO, Lucida plc; former KPMG Partner
þ
AC, NGC, RC
0
Poul A. Winslow
53
2015
Managing Director, CPPIB
þ
CC, IC, EC
0
*Committee Legend: AC - Audit CC - Compensation NGC - Nominating and Governance RC - Risk IC - Investment EC - Executive

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2019 Proxy Statement

Board Statistics
●
Added 1 new director in early 2017
(Jie Liu of Hillhouse)
●
Global Perspective: 7:3 ratio of Internationally Residing vs. US Directors
●
Average Board Tenure: 7 years (Median 4 years)
●
Average and Median Board Age: 58
Corporate Governance
Enstar is committed to sound governance, and we employ a number of practices that the Board believes are in the best interests of the Company and our shareholders. Highlights of these practices are listed below.
●
An independent director serves as Chairman of the Board
●
No "over-boarding" - none of our current directors serve on the Board of more than one other publicly traded company
●
Board Diversity Policy
●
Shareholder engagement program to solicit feedback on governance and compensation programs
●
Robust Share Ownership Guidelines for executives and non-employee directors
●
Shareholder advisory vote on executive compensation held annually
●
Majority voting standard in uncontested elections of directors
●
Compensation Committee engages an independent compensation consultant
●
No super-majority voting requirements other than as required by Bermuda law
●
Clawback Policy
●
No shareholder rights plan ("poison pill")
●
Robust code of conduct that requires all employees and directors to adhere to high ethical standards
●
Annual risk assessment of compensation programs
●
Regular executive sessions of independent directors
●
No tax gross-ups on change of control
●
Anti-hedging policy (applicable to directors and all employees)
●
Majority of independent directors, entirely independent Audit, Compensation, and Nominating and Governance Committees
●
Equity incentive plan prohibits re-pricing of underwater stock options and stock appreciation rights ("SARs")
●
Annual Board and Committee performance evaluations are conducted
●
Executive officer contractual change in control payments are "double trigger"

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2019 Proxy Statement

Business Highlights
Enstar is a multi-faceted insurance group that offers innovative capital release solutions and specialty underwriting capabilities through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. Select highlights of 2018 included:
Significant growth through acquisitions: 
●
Total assets increased by approximately $3.0 billion, and we acquired $3.2 billion in gross loss reserves during 2018 through completion of eight run-off transactions.
●
Total assets as of December 31, 2018 increased 21.7% to $16.6 billion, from $13.6 billion in 2017.
●
Losses and loss adjustment expenses (loss reserves) increased by $2.0 billion due to significant acquisition activity during 2018.
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Slight decrease in book value per share:
●
Impacted by 2018 net losses, fully diluted book value per share was $155.94 as of the end of 2018, compared to $159.19 at the end of 2017.
●
Since initiating our public listing process in 2006, our fully diluted book value per share has increased by a 14.2% compound annual growth rate.
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Run-off performance offset by unrealized investment losses and StarStone losses:
●
Net losses of $162.4 million for the year were primarily the result of unrealized losses on our fixed income investments and losses in our StarStone segment.
●
Our Non-life Run-off segment achieved reserve savings of $306.1 million.
●
StarStone losses driven by large current year loss activity, prior year adverse development and net realized and unrealized losses.
 
 
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Executive Compensation
Philosophy:
We are a rapidly growing company operating in an extremely competitive and changing industry. Our compensation program is based on these core principles:
Incentivize performance consistent with clearly defined corporate objectives
Align our executives’ long-term interests with those of our shareholders
Fairly compensate our executives
Retain and attract qualified executives who are able to contribute to our long-term success
2018 Performance Versus Peers:

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*
Source: S&P Market Intelligence for peer company data. Peer group includes the companies selected as our peers by our Compensation Committee, as described in "Compensation Discussion and Analysis - Peer Group."

Key Compensation Decisions for 2018 Performance Year:
Our Compensation Committee made the key compensation decisions listed below.
•
CEO / President / COO Long-term Incentives - No new long-term equity incentive awards were granted to these executive officers following grants made to them in 2017. Reported compensation for these executives therefore does not include a long-term equity incentive component, as awards granted in 2017 were intended to cover a three-year period.
•
Annual Incentive Awards - The Company financial performance component was not achieved, and this component of the executive officer awards was not paid. Plan awards to the CEO, President and COO were further reduced. The CEO's award was 29% of his base salary, down from 115% in 2017. Awards for the President and COO were reduced to 38% and 36% of base salaries, respectively.
•
Base Salaries - Base salaries for the CEO, President and COO were not increased during 2018. The CFO received an increase to reflect his promotion from Deputy CFO the prior year, and the U.S. CEO received a 1.5% cost of living adjustment.
•
Other Long-term Incentives - Granted long-term equity incentive awards consisting of 65% performance share units ("PSUs") and 35% restricted share units ("RSUs") to the CFO and U.S. CEO (due to the timing of the grant dates, only the PSUs are reported as 2018 compensation).

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Shareholder Engagement:
Results of 2018 Say-on-Pay: At last year's annual general meeting held on June 13, 2018, our shareholders approved the compensation of our executive officers with 89% of the total votes cast in favor of the proposal. While we aim to achieve higher approval results, our Board of Directors considers the results as indicative of a reasonable level of support for our compensation decisions and a recognition of the changes made to our compensation programs in recent years.
Engagement with Large Shareholders: In 2019, we sought feedback from our large shareholders and proxy advisory firms, speaking to the holders of approximately 20% of our outstanding voting shares, as described on page 35. We also spoke to two major proxy advisory firms, and invited conversations with additional shareholders representing 9% ownership of our outstanding ordinary shares, who advised that they did not feel a need to meet with us this year. Directors whose firms represent an additional 23% of our outstanding voting ordinary shares are actively involved in our Board's oversight of compensation and governance matters, and were not included in the engagement program.

Cautionary Statement Regarding Forward-Looking Statements
This proxy statement contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 with respect to our financial condition, results of operations, business strategies, operating efficiencies, competitive positions, growth opportunities, plans and objectives of our management, as well as the markets for our securities and the insurance and reinsurance sectors in general. Statements that include words such as "estimate," "project," "plan," "intend," "expect," "anticipate," "believe," "would," "should," "could," "seek," "may" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise. Forward- looking statements may appear throughout this proxy statement, including in the Chairman's letter and Annual Incentive Plan section of Compensation Discussion & Analysis.
These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Additional important risk factors regarding Enstar can be found under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018. Furthermore, Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law.



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2019 Proxy Statement

ENSTAR GROUP LIMITED
Windsor Place, 3rd Floor
22 Queen Street
Hamilton, Bermuda

PROXY STATEMENT
2019 ANNUAL GENERAL MEETING OF SHAREHOLDERS
QUESTIONS AND ANSWERS
1.
Why am I receiving these proxy materials?
We have made these proxy materials available to you on the internet or, in some cases, have delivered printed copies of these proxy materials to you by mail in connection with the solicitation of proxies by the Board of Directors (the "Board") of Enstar Group Limited (the "Company") for use at the 2019 Annual General Meeting of Shareholders of the Company to be held on Tuesday, June 11, 2019 at 9:00 a.m. Atlantic time at our Company headquarters, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, Bermuda, and at any postponement or adjournment thereof. These proxy materials are first being sent or given to shareholders on April 26, 2019. You are invited to attend the Annual General Meeting and are requested to vote on the proposals described in this proxy statement.
2.
Why did I receive a one-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?
Pursuant to rules adopted by the Securities and Exchange Commission (the "SEC"), we have elected to provide access to our proxy materials via the internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the "Notice") to our shareholders. All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy are included in the Notice. In addition, shareholders may request proxy materials in printed form by mail or electronically by email on an ongoing basis.
We believe that providing access to our proxy materials via the internet will expedite shareholders’ receipt of materials, while lowering costs and reducing the environmental impact of our Annual General Meeting because we will print and mail fewer full sets of materials.
3.
What is included in these proxy materials?
These "proxy materials" include this proxy statement, our Annual Report to Shareholders for the year ended December 31, 2018 and, if you received printed copies of the proxy materials by mail, the proxy card. We have included the Annual Report for informational purposes and not as a means of soliciting your proxy.
4.
What matters are being voted on at the Annual General Meeting?
 Shareholders will vote on the following proposals at the Annual General Meeting:
1.
To elect three Class I Directors nominated by our Board of Directors to hold office until 2022.
2.
To hold an advisory vote to approve executive compensation.
3.
To ratify the appointment of KPMG Audit Limited ("KPMG") as our independent registered public accounting firm for 2019 and to authorize the Board of Directors, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm.
4.
To approve the amendment of our Bye-Laws to remove the voting cutback.
5.
To approve the amendment of our Bye-Laws to remove subsidiary voting.
6.
To approve the amendment of our Bye-Laws for general updates.
7.
To act on the election of directors for our subsidiaries.
8.
To transact such other business as may properly come before the meeting and any postponement or adjournment thereof. 

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5.
What are the Board’s voting recommendations?
 The Board recommends that you vote your shares:
1.
"FOR" the nominees to serve on our Board (Proposal No. 1).
2.
"FOR" advisory approval of the resolution on our executive compensation (Proposal No. 2).
3.
"FOR" the ratification of the appointment of KPMG as our independent registered public accounting firm for 2019 and the authorization of our Board, acting through the Audit Committee, to approve the fees for the independent registered public accounting firm (Proposal No. 3).
4.
"FOR" approval of the amendment of our Bye-Laws to remove the voting cutback (Proposal No. 4).
5.
"FOR" approval of the amendment of our Bye-Laws to remove subsidiary voting (Proposal No. 5).
6.
"FOR" approval of the amendment of our Bye-Laws for general updates (Proposal No. 6).
7.
"FOR" each of the subsidiary director nominees (Proposal No. 7).
6.
How can I get electronic access to the proxy materials?
 The Notice includes instructions regarding how to:
1.
View on the internet our proxy materials for the Annual General Meeting; and
2.
Instruct us to send future proxy materials to you by email.
Our proxy materials are also available on our website under "Annual General Meeting Materials" at https://investor.enstargroup.com/annual-reports.
Choosing to receive future proxy materials by email will save us the cost of printing and mailing documents
to you. If you choose to receive future proxy materials by email, you will receive an email message next year
with instructions containing a link to those materials and a link to the proxy voting website. Your election
to receive proxy materials by email will remain in effect until you terminate it.
 
7.
Who may vote at the Annual General Meeting?
Only holders of record of our voting ordinary shares as of the close of business on April 15, 2019 (the "record date") are entitled to notice of and to vote at the Annual General Meeting. Holders of our non-voting convertible common shares are welcome to attend the Annual General Meeting, but may not vote these shares at the meeting or any postponement or adjournment thereof. As used in this proxy statement, the term "ordinary shares" does not include our non-voting convertible common shares. As of the record date, there were 17,970,338 ordinary shares issued and outstanding and entitled to vote at the Annual General Meeting, which number includes 13,726 unvested restricted shares. Except as set forth in our bye-laws, each ordinary share entitles the holder thereof to one vote. In accordance with our current bye-laws, certain shareholders whose shares would otherwise represent 9.5% or more of the voting power of our ordinary shares are entitled to less than one vote for each ordinary share held by them.
8.
What is the difference between a shareholder of record and a beneficial owner of shares held in street name?
Shareholder of Record. If your shares are represented by certificates or book entries in your name so that you appear as a shareholder on the records of American Stock Transfer & Trust Company, our stock transfer agent, you are considered the shareholder of record with respect to those shares, and the Notice or, in some cases, the proxy materials, were sent directly to you. If you request printed copies of the proxy materials, you will also receive a proxy card.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar institution, then you are the beneficial owner of shares held in street name and the Notice was forwarded to you by that institution. The institution holding your account is considered the shareholder of record for purposes of voting at the Annual General Meeting. As a beneficial owner, you have the right to instruct that institution on how to vote the shares held in your account.

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9.
What do I do if I received more than one Notice or proxy card?
If you receive more than one Notice or proxy card because you have multiple accounts, you should provide voting instructions for all accounts referenced to be sure all of your shares are voted.
10.
How do I vote?
We hope that you will be able to attend the Annual General Meeting in person. Whether or not you expect to attend the Annual General Meeting in person, we urge you to vote your shares at your earliest convenience by one of the methods described below, so that your shares will be represented.
Shareholders of record can vote any one of four ways:
VIA THE INTERNET
 
You may vote by proxy via the internet by following the instructions provided in the Notice.
 
 
BY MAIL
 
If you received printed copies of the proxy materials, you may vote by proxy by filling out the proxy card and sending it back in the envelope provided.
 
 
BY TELEPHONE
 
You may vote by proxy by calling the telephone number found on the internet voting site or on the proxy card, if you received a printed copy of the proxy materials. However, if you plan to vote for subsidiary directors on an individual basis under Proposal No. 7, you can do so only via the internet, by mail, or in person.
 
 
IN PERSON
 
You, or a personal representative with an appropriate proxy, may vote by ballot at the Annual General Meeting. We will give you a ballot when you arrive. If you need directions to the Annual General Meeting, please call our offices at (441) 292-3645.
 
 
If you own shares in street name, you will receive instructions from the holder of record that you must follow in order for your shares to be voted. Internet and/or telephone voting also will be offered to shareholders owning shares through most banks and brokers. If you own shares in street name and you wish to attend the Annual General Meeting to vote in person, you must obtain a legal proxy from the institution that holds your shares and attend the Annual General Meeting, or send a personal representative with the legal proxy, to vote by ballot. You should contact your bank or brokerage account representative to learn how to obtain a legal proxy.
11.
What is the voting deadline if voting by internet or telephone?
 If you vote by internet or by telephone, you must transmit your vote by 11:59 p.m. Eastern time on June 10, 2019.
12.
How can I attend the Annual General Meeting?
You may attend the Annual General Meeting if you were an Enstar shareholder of record as of the close of business on April 15, 2019 or you hold a valid proxy for the Annual General Meeting. You should be prepared to present photo identification for admittance. If you are a shareholder of record, your name will be verified against the list of shareholders of record on the record date prior to your being admitted to the Annual General Meeting. If you are not a shareholder of record but hold shares through a broker, trustee or nominee, you should provide proof of beneficial ownership on the record date, such as a recent account statement showing your ownership, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership.
13.
What is the quorum requirement for the Annual General Meeting?
 Two or more shareholders present in person or by proxy and entitled to vote at least a majority of the shares entitled to vote at the meeting constitute a quorum for the transaction of business at the meeting. Abstentions and broker non-votes will be included in determining the presence of a quorum at the meeting. A broker non-vote occurs when a beneficial owner of shares held in street name does not provide voting instructions and, as a result, the institution

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that holds the shares is prohibited from voting those shares on certain proposals. Shares that are properly voted on the internet or by telephone or for which proxy cards are properly executed and returned, but lacking voting directions, will be counted toward the presence of a quorum.
14.
How are proxies voted?
 Shares that are properly voted on the internet or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual General Meeting in accordance with the directions given or, in the absence of directions, in accordance with the Board’s recommendations as set forth in "What are the Board’s voting recommendations?" above. If any other business is brought before the meeting, proxies will be voted, to the extent permitted by applicable law, in accordance with the judgment of the persons voting the proxies.
The manner in which your shares may be voted depends on how your shares are held. If you own shares of record, you may vote by proxy, meaning you authorize individuals named on the proxy to vote your shares. If you do not vote by proxy or in person at the Annual General Meeting, your shares will not be voted. If you own shares in street name, you may instruct the institution holding your shares on how to vote your shares. If you do not provide voting instructions, the institution may nevertheless vote your shares on your behalf with respect to the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for 2019, but not on any other matters being considered at the meeting.
15.
What are the voting requirements to approve each of the proposals?
Proposal
Voting Requirements
Effect of
Abstentions
Effect of
Broker
Non-Votes
1.
Election of Directors
Affirmative Vote of Majority of Votes Cast
No effect on outcome
No effect on outcome
2.
Advisory approval of the Company’s executive compensation
Affirmative Vote of Majority of Votes Cast (to be approved on an advisory basis)
No effect on outcome
No effect on outcome
3.
Ratification of the appointment of KPMG as our independent registered public accounting firm for 2019 and to authorize the Board, acting through the Audit Committee, to approve its fees
Affirmative Vote of Majority of Votes Cast
No effect on outcome
Not applicable
4.
Approval of the amendment of our Bye-Laws to remove the voting cutback
Affirmative Vote of Majority of Votes Cast
No effect on outcome
No effect on outcome
5.
Approval of the amendment of our Bye-Laws to remove subsidiary voting
Affirmative Vote of Majority of Votes Cast
No effect on outcome
No effect on outcome
6.
Approval of the amendment of our Bye-Laws for general updates
Affirmative Vote of Majority of Votes Cast
No effect on outcome
No effect on outcome
7.
Election of Subsidiary Directors
Board will Cause our Corporate Representative or Proxy to Vote Subsidiary Shares in the Same Proportion as Votes Received
No effect on outcome
No effect on outcome
Each of the proposals to be voted on at the meeting is adopted by a majority of votes cast (as indicated in the table above), which means that a proposal must receive more votes "for" than votes "against" to be adopted.
For the director election in Proposal 1, each nominee must receive more votes "for" than votes "against" to have a seat on the Board. For the subsidiary directors in Proposal 7, our Board will cause our corporate representative or proxy to vote the shares we hold in these subsidiaries in the same proportion as the votes received at the meeting. Where we wholly own the subsidiary, each nominee must receive more votes "for" than votes "against" to have a seat on the subsidiary board. Voting thresholds will vary where we own less than 100% of a subsidiary's shares.
Abstentions and broker non-votes are not considered votes for the purposes of any of the above listed proposals, and therefore have no effect on the election of the director nominees or the adoption of any of the other proposals.

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16.
Can I change my vote after I have voted?
 You may revoke your proxy and change your vote at any time before the final vote at the Annual General Meeting. You may vote again on a later date via the internet or by telephone (in which case only your latest internet or telephone proxy submitted prior to 11:59 p.m. Eastern time on June 10, 2019 will be counted), by filling out and returning a new proxy card bearing a later date, or by attending the Annual General Meeting and voting in person. However, your attendance at the Annual General Meeting will not automatically revoke your proxy unless you vote again at the Annual General Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation prior to the Annual General Meeting to our Corporate Secretary at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX Bermuda.
17.
Who is paying for the cost of this proxy solicitation?
 We will bear the cost of preparing and soliciting proxies, including the reasonable charges and expenses of brokerage firms or other nominees for forwarding proxy materials to the beneficial owners of our ordinary shares. In addition to solicitation by mail, certain of our directors, officers and employees may solicit proxies personally or by telephone or other electronic means without extra compensation, other than reimbursement for actual expenses incurred in connection with the solicitation.

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CORPORATE GOVERNANCE
Board of Directors
Our Board is divided into three classes designated Class I, Class II and Class III. The term of office for each of our Class I directors expires at this year’s Annual General Meeting; the term of office for each of our Class II directors expires at our annual general meeting in 2020; and the term of office for each of our Class III directors expires at our annual general meeting in 2021. At each annual general meeting, the successors of the class of directors whose term expires at that meeting will be elected to hold office for a term expiring at the annual general meeting to be held in the third year following the year of their election.
The Board believes that all of its directors have demonstrated professional integrity, ability and judgment, as well as leadership and strategic management abilities, and have each performed well in their respective time served as directors and contributed to the overall effectiveness of our Board.
Particular attributes that are significant to each individual director’s selection to serve on the Board are described below.
Nominees
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ROBERT J. CAMPBELL
Director Since: 2007 
Age: 70
Class: I
Enstar Committees:  Audit (Chair), Compensation, Investment (Chair), Nominating and Governance, Executive
US resident; US citizen 
Biographical Information: Robert Campbell was appointed as the independent Chairman of the Board in November 2011. Mr. Campbell has been a Partner with the investment advisory firm of Beck, Mack & Oliver, LLC since 1990.
Certain Other Directorships: Mr. Campbell is a director and chairman of the audit committee of AgroFresh Solutions, Inc. (formerly Boulevard Acquisition Corp.), a publicly traded global agricultural technologies company. From 2015 through 2017, he was also a director of Boulevard Acquisition Corp. II, a blank check company that completed its initial public offering in September 2015. He previously served as a director of Camden National Corporation, a publicly traded company, from 1999 to 2014.
Skills and Qualifications: Financial, accounting, and investment expertise; leadership skills
Mr. Campbell brings to the Board his extensive understanding of finance and accounting, which he obtained through over 40 years of analyzing financial services companies and which is very valuable in his role as chairman of our Audit Committee. In addition, Mr. Campbell’s investment management expertise makes him a key member of our Investment Committee, of which he serves as chairman. Mr. Campbell continues to spend considerable time and energy in his role, which is significant to the leadership and function of our Board.









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JIE LIU
Director Since: 2017
Age: 40
Class: I
Enstar Committee: Investment
Hong Kong resident; Canadian citizen

Biographical Information: Jie Liu is a Partner of Hillhouse Capital. Prior to joining Hillhouse Capital in 2015, Mr. Liu spent more than 10 years in the financial services industry in North America. From 2010 to 2015, he was Head of Credit and a Senior Portfolio Manager of Sentry Investments, a Canada-based asset manager. Before that, he served as a Fixed Income Research Analyst at RBC Capital Markets and a Credit Rating Specialist at Standard & Poor’s. Mr. Liu obtained an M.A. in Economics from the University of Toronto in 2004, and he also holds an M.Sc. in Applied Finance from the University of New Brunswick and a B.Com. in Finance from Soochow University.
Certain Other Directorships: Mr. Liu also serves as a director on the boards of various private investments and investment vehicles relating to the business activities of Hillhouse.
Skills and Qualifications: Investment management industry knowledge and relationships; financial expertise 
Mr. Liu brings to our Board his extensive knowledge of global investment markets and the investment management industry, as well as finance skills and a global perspective that we consider highly valuable to our Board’s oversight of our investment portfolios, international operations, and growth opportunities.

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PAUL J. O’SHEA
Director Since: 2001
Age: 61
Class: I
Enstar Officer Title: President
Bermuda resident; Irish citizen
Biographical Information: Paul O’Shea was appointed as President of the Company in December 2016. He previously served as Executive Vice President and Joint Chief Operating Officer of the Company since our formation in 2001, and has also been a director throughout this time. He leads our mergers and acquisitions operations, including overseeing our transaction sourcing, due diligence, and negotiations processes. In 1994, Mr. O’Shea joined Dominic Silvester in his run-off business venture in Bermuda, and he served as a director and Executive Vice President of Enstar Limited, which is now a subsidiary of the Company, from 1995 until 2001. Prior to co-founding the Company, he served as the Executive Vice President, Chief Operating Officer and a director of Belvedere Group/Caliban Group from 1985 until 1994.
Skills and Qualifications: Company leader; long track record of successful acquisitions; industry expertise
Mr. O’Shea is a qualified chartered accountant who has spent more than 30 years in the insurance and reinsurance industry, including many years in senior management roles. As a co-founder of the Company, Mr. O’Shea has intimate knowledge and expertise regarding the Company and our industry. He has been instrumental in sourcing, negotiating and completing numerous significant transactions since our formation.





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Continuing Directors
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B. FREDERICK (RICK) BECKER
Director Since: 2015
Age: 72
Class: II
Enstar Committees:  Audit, Compensation (Chair), Nominating and Governance (Chair)
US resident; US citizen
Biographical Information: Rick Becker is the Chairman of Clarity Group, Inc., a US national healthcare professional liability and risk management organization, which he co-founded over 15 years ago. Prior to co-founding Clarity Group, Inc., he served as Chairman and Chief Executive Officer of MMI Companies, Inc. from 1985 until its sale to The St. Paul Companies in 2000. Mr. Becker has previously served as President and CEO of Ideal Mutual and McDonough Caperton Employee Benefits, Inc., and also served as State Compensation Commissioner for the State of West Virginia.
Certain Other Directorships: Mr. Becker currently serves as a director of private companies West Virginia Mutual Insurance Company and Dorada Holdings Ltd. (Bermuda).
Skills and Qualifications: Compensation, governance, and risk management experience; industry knowledge
Mr. Becker has over 35 years of experience within the insurance and healthcare industries. The Board also values Mr. Becker’s corporate governance experience, which he has gained from serving on many other boards over the years. In addition, his previous work on compensation matters makes him well-suited to serve as Chairman of our Compensation Committee. He has an extensive background in risk management, which enhances our risk oversight and monitoring capabilities.

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SANDRA L. BOSS
Director Since: 2015
Age: 52
Class: III
Enstar Committees: Risk (Chair), Compensation, Nominating and Governance, Executive
UK resident; Dual US / UK citizen
Biographical Information: Sandra Boss has served since September 2014 as an external member of the Bank of England’s Prudential Regulation Committee, which is responsible for the prudential regulation of banks, insurers, building societies, credit unions and major investment firms authorized in the United Kingdom. She is also an external member and Risk Committee Chair of the Bank’s RTGS/CHAPS Board, which oversees the United Kingdom’s high value payment system. In connection with her role on the RTGS/CHAPS Board, Ms. Boss also serves as a member of RTGS Renewal Committee of the Bank of England’s Court of Directors. From 2005 to 2014, Ms. Boss was a Senior Partner with McKinsey & Company, a global management consulting firm, where she held a number of senior management positions in both the United States and the United Kingdom and served as a strategic advisor to global banks and investment banks as well as to a number of public sector institutions and industry bodies on financial services policy and financial markets structure.
Certain Other Directorships: Ms. Boss has served as a non-executive director of Elementis plc, a FTSE 250 specialty chemicals company, since February 2017.
Skills and Qualifications: Regulatory experience, financial acumen, strategic management expertise 
Ms. Boss brings to our Board her financial acumen, global experience in prudential regulation of financial institutions, and strategy development and oversight abilities gained from years of consulting at a highly respected, international firm. These skills are very useful to our Board as it sets strategy and oversees performance. Ms. Boss provides a unique perspective on our industry and regulatory environment, and also has a keen understanding of the financial markets in which we operate. As Chair of the Risk Committee, she draws on her experience and leads the committee in enhancing our oversight of enterprise risk.


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JAMES D. CAREY
Director Since: 2013
Age: 52
Class: II
Enstar Committee: Investment
US resident; US citizen
Biographical Information: James Carey is a senior principal of Stone Point Capital LLC, a private equity firm based in Greenwich, Connecticut. Stone Point Capital serves as the manager of the Trident funds, which invest exclusively in the global financial services industry. Mr. Carey has been with Stone Point Capital and its predecessor entities since 1997. He previously served as a director of the Company from its formation in 2001 until the Company became publicly traded in 2007. Mr. Carey rejoined the Board in 2013.
Certain Other Directorships: From July 2018, Mr. Carey has served as a director of Focus Financial Partners, a publicly traded company that invests in independent fiduciary wealth management firms. Mr. Carey also currently serves on certain private company boards of the portfolio companies of the Trident funds. He previously served as non-executive Chairman of PARIS RE Holdings Limited and as a director of Alterra Capital Holdings Limited (until 2013), Cunningham Lindsay Group Limited and Lockton International Holdings Limited. Mr. Carey also serves as a director of StarStone Specialty Holdings Limited and the holding companies that we and Trident established in connection with the Atrium/Arden and StarStone co-investment transactions.
Skills and Qualifications: Investment expertise; industry knowledge; significant acquisition experience 
Having worked in the private equity business for 20 years, Mr. Carey brings to our Board an extensive background and expertise in the insurance and financial services industries. His in-depth knowledge of investments and investment strategies is significant in his role on our Investment Committee. We also value his contributions as an experienced director in the insurance industry as well as his extensive knowledge of the Company.

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HANS-PETER GERHARDT
Director Since: 2015
Age: 63
Class: III
Enstar Committee: Risk
Swiss resident; German citizen
Biographical Information: Hans-Peter Gerhardt served as the Chief Executive Officer of Asia Capital Reinsurance Group from October 2015 through June 2017. He has served continuously in the reinsurance industry since 1981. He is the former Chief Executive Officer of PARIS RE Holdings Limited, serving in that position from the company’s initial formation in 2006 through the completion of its merger into Partner Re Ltd. in June 2010. He previously served as the Chief Executive Officer of AXA Re from 2003 to 2006, also serving as Chairman of AXA Liabilities Managers, the AXA Group’s run-off operation, during that time.
Certain Other Directorships: Mr. Gerhardt also serves as a non-executive director of Tokio Marine Kiln, Tokio Millennium Re and African Risk Capacity (all privately held). He previously served as a non-executive director of Asia Capital Reinsurance Group (until May 2018) and an independent director of Brit Insurance Holdings PLC until the company’s acquisition by Fairfax Financial Holdings in 2015.
Skills and Qualifications: Underwriting expertise; proven industry veteran
Mr. Gerhardt brings decades of underwriting expertise to our Board, which is important to us as we run our active underwriting businesses, Atrium and StarStone. He is a proven industry veteran, with significant leadership experience, including several successful tenures in CEO roles.






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HITESH R. PATEL
Director Since: 2015
Age: 58
Class: II
Enstar Committees: Audit, Nominating and Governance, Risk
UK resident; UK citizen
Biographical Information: Hitesh Patel served as Chief Executive Officer of Lucida, plc, a UK life insurance company, from 2012 to 2013, and prior to that as its Finance Director and Chief Investment Officer since 2007. Mr. Patel has over 30 years of experience working in the insurance industry, having served in the United Kingdom as KPMG LLP's Lead Partner on Insurance Accounting and Regulatory Services from 2000 to 2007. He originally joined KPMG in 1982 and trained as an auditor.
Certain Other Directorships: Mr. Patel serves as a non-executive director at Aviva Life Holdings UK Ltd and Aviva Insurance Limited (subsidiaries of Aviva plc) and as Chairman of its Audit Committee and member of the Risk and Investment Committees. He is the Independent Non-Executive Chairman of Capital Home Loans Limited, a privately held buy-to-let mortgage provider and also a non-executive director of Landmark Mortgages Limited. Mr. Patel chairs the Audit Committee and is a member of the Risk Committee and Nomination and Remuneration Committee for Capital Home Loans and Landmark Mortgages Limited. He has served as the Chair of the Insurance Committee of the Institute of Chartered Accountants of England and Wales since 2012.
Skills and Qualifications: Accounting expertise; regulatory and governance skills; industry experience 
Mr. Patel brings significant accounting expertise to our Board, obtained from over two decades of auditing and advising insurance companies on accounting and regulatory issues, which is highly valuable to our Audit Committee. His experience with insurance regulations and the regulatory environment is also a key attribute because our company is regulated in many jurisdictions around the world. As a former industry CEO, he also has significant knowledge of corporate governance matters and practices, which is valuable to our Board and the Nominating and Governance Committee.
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DOMINIC F. SILVESTER
 Director Since: 2001   
Age: 58
Class: III
Enstar Committee: Executive
Enstar Officer Title:  Chief Executive Officer
UK resident; UK citizen
Biographical Information: Dominic Silvester has served as a director and the Chief Executive Officer of the Company since its formation in 2001. In 1993, Mr. Silvester began a business venture in Bermuda to provide run-off services to the insurance and reinsurance industry. In 1995, the business was assumed by Enstar Limited, which is now a subsidiary of the Company, and for which Mr. Silvester has since then served as Chief Executive Officer. Prior to co-founding the Company, Mr. Silvester served as the Chief Financial Officer of Anchor Underwriting Managers Limited from 1988 until 1993.
Skills and Qualifications: Company leader; industry expertise; corporate strategy 
As a co-founder and CEO of the Company, Mr. Silvester contributes to the Board his intimate knowledge of the Company and the run-off industry. He is well known in the industry and is primarily responsible for identifying and developing our business strategies and acquisition opportunities on a worldwide basis. Mr. Silvester has served as our CEO since the Company’s inception, demonstrating his proven ability to manage and grow the business.


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POUL A. WINSLOW
Director Since: 2015
Age: 53
Class: III
Enstar Committees: Compensation, Investment, Executive
Canadian resident; Danish citizen
Biographical Information: Poul Winslow is a Senior Managing Director & Global Head of Capital Markets and Factor Investing of the Canada Pension Plan Investment Board ("CPPIB"), a role he has held since 2018. Previously Mr. Winslow served as Head of External Portfolio Management and Head of Thematic Investing for CPPIB. Prior to joining CPPIB in 2009, Mr. Winslow had several senior management and investment roles at Nordea Investment Management in Denmark, Sweden and the United States. He also served as the Chief Investment Officer of Andra AP-Fonden (AP2) in Sweden.
Certain Other Directorships: Mr. Winslow is a director for the Standards Board for Alternative Investments, an international standard-setting body for the alternative investment industry. He previously served as a director of Viking Cruises Ltd., a private company, from 2016 to 2018.
Skills and Qualifications: Investment expertise; compensation and governance experience
Mr. Winslow brings significant investment expertise to our Board gained from his years in senior investment roles, which is highly valuable to our Investment Committee as it oversees our investment strategies and portfolios. His experiences at CPPIB, including exposure to compensation and governance policies, are valuable in his role on our Compensation Committee.

Directorship Arrangements
On June 3, 2015, CPPIB purchased 1,501,211 shares of Enstar from the First Reserve partnerships ("First Reserve"). In connection with the 2015 transaction: (i) First Reserve's shareholder rights terminated and (ii) we and CPPIB entered into a new Shareholder Rights Agreement granting CPPIB contractual shareholder rights that were substantially similar to those rights previously held by First Reserve, including the right to designate one representative to our Board. CPPIB designated Poul Winslow as a director of the Company, and he was appointed in September 2015. The designation right terminates if CPPIB ceases to beneficially own at least 75% of the total number of voting and non-voting shares acquired by it from First Reserve. CPPIB has subsequently acquired additional shares, and its current direct and indirect holdings constitute an economic interest of approximately 17.9%.
Independence of Directors
Our Board currently consists of ten directors, of which eight are non-management directors, and six are independent. Nasdaq listing standards require that a majority of our directors be independent. For a director to be considered independent, the Board must determine that the director meets the definition of independence included in Nasdaq Marketplace Rule 5605(a)(2). This requires a determination that the director does not have any direct or indirect material relationship with us either directly or as a partner, owner, or executive officer of an organization that has a relationship with us. Our Board makes these determinations primarily based on a review of the responses of the directors to questions regarding employment and compensation history, family relationships and affiliations, discussions with the directors, and any other known relevant facts and circumstances.
The Board determined that the following six directors are independent as defined by Nasdaq Marketplace Rule 5605(a)(2):
•
Robert Campbell
•
Rick Becker
•
Sandra Boss
•
Hans-Peter Gerhardt
•
Hitesh Patel
•
Poul Winslow
For details about certain relationships and transactions among us and our executive officers and directors, see "Certain Relationships and Related Transactions." Our Board, in making its independence determinations, considered the relationships noted in that section with respect to CPPIB (for Mr. Winslow), which has an ownership interest in Wilton Re Ltd. ("Wilton Re"). Although Mr. Winslow is an employee of CPPIB and serves as its designated representative

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on our Board, he does not have a material direct or indirect interest in the reinsurance we have with Continental Assurance Company, where our reinsurance recoverable existed prior to Wilton Re's acquisition of this company.
In determining Ms. Boss' independence, the Board considered that Ms. Boss serves as an External Member of the Prudential Regulation Committee of the Bank of England ("PRC"), which regulates our UK insurance subsidiaries, including our Lloyd's operations. To avoid any potential conflicts, she has enacted broad recusals with the PRC so that she does not participate in non-life company matters or insurance policy matters (our only PRC-regulated companies are non-life companies). The Board reviewed these matters and is satisfied that the recusals are effective in addressing any potential issues.
Board Leadership Structure
The Company has separated the positions of Chairman of the Board and Chief Executive Officer. Robert Campbell, an independent director, has served as Chairman since 2011. The Board believes that separating the roles of Chairman and CEO and having Mr. Campbell serve as Chairman is the most effective leadership structure for us at this time.
The Board believes Mr. Campbell is well suited to assist with the execution of strategy and business plans, to play a prominent role in setting the Board’s agenda, to act as the liaison between the Board and our senior management, and to preside at Board and shareholder meetings.
The Board believes that our corporate governance structure appropriately satisfies the need for objectivity, and includes several effective oversight means, such as:
●
the roles of Chairman and CEO are separated;
●
the Chairman is an independent director;
●
a majority of our directors are independent;
●
before or after regularly scheduled Board meetings, the independent directors meet in executive session to review, among other things, the performance of our executive officers; and
●
the Audit, Compensation and Nominating and Governance committees of the Board consist solely of independent directors who perform key functions, such as:
 
-
overseeing the integrity and quality of our financial statements and internal controls;
 
-
establishing senior executive compensation;
 
-
reviewing director candidates and making recommendations for director nominations; and
 
-
overseeing our corporate governance structure and practices.
The Board recognizes, however, that no single leadership model is right for all companies at all times and that, depending on the circumstances in the future, other leadership models might be appropriate for us.
Board Committees
The Board has an Audit Committee, a Compensation Committee, a Nominating and Governance Committee, a Risk Committee, an Investment Committee and an Executive Committee. Each of our committees operates under a written charter that has been approved by the Board. Each Committee reviews its charter annually, and recommends any proposed changes to the Board. Current copies of the charters for all of our committees are available on our website at http://www.enstargroup.com/corporate-governance. In addition, any shareholder may receive copies of these documents in print, without charge, by contacting the Corporate Secretary at P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda.
Our Board of Directors met a total of six times during the year ended December 31, 2018.
The primary responsibilities of each of our committees, as well as the current composition of our committees and the number of committee meetings held during 2018, are described below.

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Audit Committee
The primary responsibilities of our Audit Committee include:
•    overseeing our accounting and financial reporting process, including our internal controls over financial reporting;
•    overseeing the quality and integrity of our financial statements;
•    reviewing the qualifications and independence of our independent auditor;
•    reviewing the performance of our internal audit function and independent auditor;
•    reviewing related party transactions;
•    overseeing our compliance with legal and regulatory requirements;
•    appointing and retaining our independent auditors;
•    pre-approving compensation, fees and services of the independent auditors and reviewing the scope and results of their audit; and
•    periodically reviewing our risk exposures and the adequacy of our controls over such exposures.
Each member of the Audit Committee is a non-management director and is independent as defined in Nasdaq Marketplace Rule 5605(a)(2) and under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our Board has determined that Messrs. Campbell, Becker, and Patel qualify as audit committee financial experts pursuant to the definition set forth in Item 407(d)(5)(ii) of Regulation S-K, as adopted by the SEC.
Committee Members:
Robert Campbell (Chair)
Rick Becker
Hitesh Patel






Number of Meetings in
2018:
7

Compensation Committee
The primary responsibilities of our Compensation Committee include:
 
•     determining the compensation of our executive officers;
 
•     establishing our compensation philosophy;
 
•     overseeing the development and implementation of our compensation programs, including our incentive plans and equity plans;
 
•     overseeing the risks associated with the design and operation of our compensation programs, policies and practices; and
 
•     periodically reviewing the compensation of our directors and making recommendations to our Board with respect thereto.

Each member of the Compensation Committee is a non-management director, is independent as defined in Nasdaq Marketplace Rule 5605(a)(2), and meets the enhanced independence standards applicable to compensation committee members in Nasdaq Marketplace Rule 5605(d)(2) and the Exchange Act. Additional information on the Compensation Committee and the role of management in setting compensation is provided below in "Executive Compensation - Compensation Discussion and Analysis."
Committee Members:
Rick Becker (Chair)
Sandra Boss Robert Campbell
Poul Winslow
Number of Meetings in
2018:
4


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Nominating and Governance Committee
The primary responsibilities of our Nominating and Governance Committee include:
•     identifying individuals qualified to become directors and reviewing any candidates proposed by directors, management or shareholders;
•     recommending committee appointments to the Board;
•     recommending the annual director nominees to the Board and the shareholders;
•     establishing director qualification criteria;
•     establishing and overseeing the group’s governance and communication frameworks and confirming the operating effectiveness of both;
•     supporting the succession planning process; and
•     advising the Board with respect to corporate governance-related matters.
Each member of the Nominating and Governance Committee is a non-management director and is independent as defined in Nasdaq Marketplace Rule 5605(a)(2).
Committee Members:
Rick Becker (Chair) Sandra Boss
Robert Campbell Hitesh Patel
Number of Meetings in
2018:
5

Risk Committee
The primary responsibilities of our Risk Committee include:
•     assisting the Board in overseeing the integrity and effectiveness of the Company's enterprise risk management framework;
•     reviewing and evaluating the risks to which we are exposed, as well as monitoring and overseeing the guidelines and policies that govern the processes by which we identify, assess, and manage our exposure to risk;
•     reviewing and monitoring our overall risk strategy and Board-approved risk appetite and overseeing any significant mitigating actions required;
•     reviewing the Company’s forward-looking risk and solvency assessment and general capital management;
• periodically reviewing and approving the level of risk assumed in underwriting, investment and operational activities; and
• reviewing and monitoring the potential impact of emerging risks.
Ms. Boss and Messrs. Gerhardt and Patel are non-management directors, and each are independent as defined in Nasdaq Marketplace Rule 5605(a)(2).
(1)Hans-Peter Gerhardt was appointed to the Risk Committee in February 2019.
(2)Walker Rainey is a non-executive director of our subsidiary StarStone Specialty Holdings Limited, and serves as chair of its Underwriting and Risk Committee.
(3)Orla Gregory is the Company's Chief Operating Officer. The Board has included Ms. Gregory on the Risk Committee because of her strategic and operational involvement with the Chief Risk Officer and as the Chair of the Company's Management Risk Committee.
Committee Members:
Sandra Boss (Chair)
Hans-Peter Gerhardt(1)
Hitesh Patel
Walker Rainey(2)
Orla Gregory(3)
Number of Meetings in
2018:
5

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Investment Committee
The primary responsibilities of our Investment Committee include:
 
•     determining our investment strategy;
 
•     developing and reviewing our investment guidelines and overseeing compliance with these guidelines and various regulatory requirements and any applicable loan covenants;
 
•     overseeing our investments, including approval of investment transactions;
 
•     overseeing the selection, retention and evaluation of outside investment managers;
•     overseeing investment-related risks, including those related to the Company’s cash and investment portfolios and investment strategies; and
 
•     reviewing and monitoring the Company’s investment performance quarterly and annually against plan and external benchmarks agreed from time to time.
 
Four members of the Investment Committee (Messrs. Campbell, Carey, Winslow, and Liu) are non-management directors, and two members (Messrs. Campbell and Winslow) are independent under Nasdaq Marketplace Rule 5605(a)(2).
*Orla Gregory is the Company's Chief Operating Officer. The Board has included Ms. Gregory on the Investment Committee because it believes her strategic and operational involvement with the Chief Investment Officer and Enstar investment team provides a significant benefit to the functioning of the committee.
Committee Members:
Robert Campbell (Chair)
James Carey
Poul Winslow
Jie Liu
Orla Gregory*
Number of Meetings in
2018:
4

Executive Committee
The primary responsibility of our Executive Committee is to exercise the power and authority of the Board when the entire Board is not available to meet, except that the Executive Committee may not authorize the following:
 
•     the issuance of equity securities of the Company;

•     the merger, amalgamation, or other change in control transaction of the Company;

•     the sale of all or substantially all of the assets of the Company;

•     the liquidation or dissolution of the Company;

•     any transaction that, in the aggregate, exceeds 10% of the Company’s total assets;

•     any action that requires approval of the entire Board by the Company’s Memorandum of Association or the Company’s Bye-laws; or

•     any action prescribed by applicable law, rule or regulation, including but not limited to those prescribed by listing rules or SEC regulations (such as those powers granted to the Compensation, Audit, and Nominating and Governance Committees and requiring independent director decisions).

* It is not unexpected for the Executive Committee to hold no meetings in a given year, as it is only used in situations where the full Board cannot reasonably be convened.
Committee Members:
Robert Campbell (Chair)
Sandra Boss
Dominic Silvester
Poul Winslow
Number of Meetings in
2018:
0*
Attendance at Meetings
We expect our directors to attend all meetings of our Board, all meetings of all committees of the Board on which they serve and each annual general meeting of shareholders, absent extraordinary circumstances.

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In 2018, during the time they were serving, all of the directors attended at least 75% of the meetings of the Board and the committees of the Board on which the director served.
All directors then serving attended the 2018 annual general meeting of shareholders. In addition, in 2018, our independent directors met each quarter in executive sessions without management.
Board Oversight of Risk Management
Risk assumption is inherent in our business, and appropriately setting risk appetite and executing our business strategies accordingly is key to our successful performance. Effective risk oversight is an important priority for the Board, which has placed strong emphasis on ensuring that we have a robust risk management framework to identify, measure, manage, monitor, and report risks that may affect the achievement of our strategic, operational and financial objectives. The overall objective of our enterprise risk management ("ERM") framework is to support good risk governance while facilitating the achievement of business objectives aligned to risk appetite. Our ERM framework contributes to an effective business strategy, capital management decision making, efficiency in operations and processes, strong financial performance, reliable financial reporting, regulatory compliance, a good reputation with key stakeholders and business continuity planning. Our Board and its committees have risk oversight responsibility and play an active role in overseeing the management of the risks we face.
Risk appetite and tolerance is set by our Board and reviewed annually. The primary objective of our risk appetite framework is to monitor and protect the Group from an unacceptable level of loss, compliance failures and adverse reputational impact. Accountability for the implementation, monitoring and oversight of risk appetite is assigned to individual corporate executives and monitored and maintained by the Risk Management function. Risk tolerance levels are monitored and deviations from pre-established levels are reported in order to facilitate responsive action.
While all of the Board's committees play a role in risk management, the Risk Committee, reporting to the full Board, oversees our enterprise risk. Our ERM governance structure is supported by a management risk committee (with regional sub-committees for our non-life run off operations) that reports to our Board's Risk Committee. Each of our active underwriting businesses (StarStone and Atrium) has a dedicated underwriting and risk committee that monitors underwriting and other risk-taking activities to assure alignment with subsidiary board-approved risk appetites (which are aligned to the Company's risk appetite). These committees also provide regular reporting to the Risk Committee. In addition, the Company's Chief Risk Officer attends Board, Risk Committee, Audit Committee, and Investment Committee meetings.
Our ERM framework consists of numerous processes and controls that have been designed by management and implemented by employees across our organization.
The Board and its committees receive information from management relating to performance against risk appetite and strategy and regularly review information regarding, among other things, acquisitions, active underwriting, loss reserves, credit, liquidity and capital, investments, operations, and information security, and the risks associated with each. Our Risk Committee assists the Board in overseeing the integrity and effectiveness of our ERM framework, reviewing and evaluating the risks to which we are exposed as well as monitoring and overseeing the guidelines and policies that govern the processes by which we identify, assess and manage our exposure to risk.
Our Risk Committee is active in continuing to drive enhancements to our ERM reporting and risk appetite framework. During 2018, the Risk Committee led the review of our capacity to absorb loss and the enhancement of a unified risk appetite framework and investment risk framework, conducted deep dive discussions on specific areas of risk including those within our active underwriting and operational risk areas and continued to consider developments to our risk governance and reporting. The Risk Committee regularly meets with members of management, including members of our management risk committee and capital management committee, to evaluate the material risks we face, including the leaders of our investments, underwriting, capital management, actuarial, tax, information technology and regulatory/compliance areas.
For more information on our ERM framework and risk profile, refer to "Item. 1 Business - Enterprise Risk Management" of our Annual Report on Form 10-K for the year ended December 31, 2018.

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 Our committees support the Board’s oversight of risk management in the following ways:
 
Committee
 
Risk Management Responsibilities
Risk Committee
Ÿ
Assists the Board in overseeing the integrity and effectiveness of the Company's ERM framework
Ÿ
Reviews and evaluates the risks to which the Company is exposed
Ÿ
Monitors the guidelines and policies that govern the process by which the Company identifies, assesses, and manages its exposure to risk
Ÿ
Reviews reinsurance programs and practices to ensure consistency with the Company's business plan and aggregate written exposures
Ÿ
Reviews information security matters and makes recommendations to the Board
Ÿ
Reviews our overall risk appetite with input from management
Audit Committee
Ÿ
Oversees the Company's internal controls over financial reporting
Ÿ
Receives direct reports on internal controls from the Company’s Internal Audit leadership, who meets with the committee on a quarterly basis and maintains an open dialogue with the Audit Committee Chairman
Compensation Committee
Ÿ
Oversees risks relating to our compensation practices by conducting an annual risk assessment of our compensation programs to ensure they are properly aligned with Company performance and do not provide incentives for employees to take inappropriate or excessive risks
Nominating and Governance Committee
Ÿ
Oversees risks relating to corporate governance matters, including with respect to reviewing Board and Committee composition and the Company’s relations with shareholders
Ÿ
Oversees and supports the Board in management succession planning
Investment Committee
Ÿ
Regularly evaluates and tests the Company's investment portfolio and investment strategies under various stress scenarios
Ÿ
Oversees compliance with investment guidelines, which assist the Company in monitoring the Company's investment-related risks
Ÿ
Monitors and evaluates the Company's internal investment management department and external investment managers

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Director Nominations, Qualifications and Recommendations
When identifying and evaluating director nominees, our Nominating and Governance Committee considers the nominees’ personal and professional integrity, judgment, ability to represent the interests of the shareholders, and knowledge regarding insurance, reinsurance and investment matters, as well as other factors discussed below. The Nominating and Governance Committee has primarily identified candidates through its periodic solicitation of recommendations from members of the Board and individuals known to the Board, use of third-party search firms retained by the Nominating and Governance Committee, and shareholders. However, in certain private placement or acquisition-related transactions, parties have obtained the right to designate a board representative.
No new directors were added in 2018. The most recent addition to the Board was Jie Liu, Partner of Hillhouse Capital, who was appointed in February 2017 to fill the vacancy created when the director representative from Goldman Sachs resigned in late 2016 in connection with the sale of substantially all of its fund's shares in Enstar.
Each year, the Board and each committee conduct performance evaluations, which include consideration of whether we have the collective skill sets necessary to effectively oversee the Company's affairs. If the Board identifies areas where additional expertise would enhance the composition of the Board, the Nominating and Governance Committee will lead our efforts to identify suitable candidates with such expertise. The Nominating and Governance Committee may use third-party search firms and consider suggestions from Board members familiar with potential candidates who may be available in the market. Once a candidate is identified, the Nominating and Governance Committee undertakes an evaluation process.
The evaluation of new director candidates involves several steps, not necessarily taken in any particular order. The Nominating and Governance Committee reviews and verifies the candidate's qualifications and background information and evaluates the candidate's attributes relative to the identified needs of the Board. If the Nominating and Governance Committee wishes to pursue a candidate further, it arranges candidate interviews with committee members and other directors. After assessing the feedback, the Nominating and Governance Committee presents each selected candidate to the Board for consideration.
For incumbent directors, the Nominating and Governance Committee reviews each director’s overall service to the Company during the director’s term, including the director’s level of participation and quality of performance. The Nominating and Governance Committee considered and nominated the candidates proposed for election as directors at the Annual General Meeting, with the Board unanimously agreeing on the nominees.
While the Board is currently satisfied with the collective skill set of the directors, the directors have noted that additional information technology experience would enhance the Board's oversight and involvement in the Company's strategic information technology initiatives and oversight of cybersecurity risk, especially in light of the recent focus on technology and data-driven changes in the insurance industry. Accordingly, the Board has been actively recruiting to find a director with this expertise within our industry and with experience relevant to our business, and seeks to add such a director in the future.
Diversity
We seek to identify candidates who represent a mix of backgrounds and experiences that will improve the Board’s ability, as a whole, to serve our needs and the interests of our shareholders. In February 2019, the Board adopted a formal diversity policy applicable to the selection of directors. The Board considers diversity to include gender, ethnicity, nationality, age, sexual orientation, geographic background, and other personal characteristics. The Board's diversity policy requires the Nominating and Governance to actively consider diversity in its regular assessments of board composition and in its efforts to identify potential director candidates, including specifically instructing any director search firm (if engaged) to include diverse candidates in its search.
Director Qualifications
Our Board has identified several categories of primary skills and/or experience that we look for in our directors. The Board reviews these categories from time to time, alongside its consideration of whether there are new areas that would benefit it in executing its oversight duties. These categories are set forth and defined below under the heading, "Board Skills Summary."
Given the complex nature of our business and the insurance and reinsurance industry,
we seek to include directors whose experiences, although varying and diverse, are also
complementary to and demonstrate a familiarity with the substantive matters necessary to lead the
Company and navigate our insurance businesses.
 

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2019 Proxy Statement

Board Skills Summary
The chart below highlights several categories of skills for our directors, and we have indicated the particular strengths of each director in the columns shown. While many of our directors have a wide range of experience covering all of these areas, we specifically designate expertise or leading experience in the following categories:
•
extensive insurance industry experience - including in executive, director, or other leadership roles at major insurance institutions
•
risk management - in terms of establishing risk appetite levels and risk management processes for our operations, acquisitions, underwriting and investment portfolios
•
finance and accounting - including developing and understanding our finance and capital management needs in line with our Company strategies, as well as financial reporting and audit-related expertise
•
investment - expertise related to assessing our investment portfolios and determining our investment strategy in line with our risk appetite
•
strategy - challenging management on setting and/or adjusting business strategies, including acquisitions, divestitures, operations, and investments
•
corporate governance - including understanding, developing, and championing governance procedures and protections that drive Board and management accountability and protection of shareholder interests
•
regulatory and government - a deep understanding of the highly regulated environment in which we operate, and the ever-changing regulations and requirements that govern our operations and shape our future strategies
•
information technology and cybersecurity - expertise related to information technology and data security and a deep current understanding of technology-driven innovation and challenges in our industry and business (our Board currently relies on engagement with IT senior management and third-party advisors, as needed, for this skill set as it seeks new director candidates with this skill)
 
Extensive Insurance Industry Experience
Risk Management
Finance and Accounting
Investment
Strategy
Corporate Governance
Regulatory and Government
Robert Campbell
 
þ
þ
þ
 
þ
 
Rick Becker
þ
þ
þ
 
þ
þ
 
Sandra Boss
 
þ
þ
 
þ
þ
þ
James Carey
þ
 
þ
þ
þ
 
 
Hans-Peter Gerhardt
þ
þ
 
 
þ
 
þ
Jie Liu
 
 
þ
þ
þ
 
 
Paul O'Shea
þ
 
þ
 
þ
 
þ
Hitesh Patel
þ
þ
þ
þ
 
þ
þ
Dominic Silvester
þ
 
þ
 
þ
 
 
Poul Winslow
 
þ
þ
þ
 
þ
 
Shareholder Recommendations
In accordance with its charter, the Nominating and Governance Committee will consider director candidates submitted by shareholders. Shareholders may recommend candidates to serve as directors by submitting a written notice to the Nominating and Governance Committee at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton, HM JX, Bermuda. Shareholder recommendations must be accompanied by sufficient information to assess the candidate’s qualifications and contain the candidate’s consent to serve as director

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if elected. Shareholder nominees will be evaluated by the Nominating and Governance Committee in the same manner as nominees it selects itself.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is or was during 2018 an employee, or is or ever has been an officer, of the Company. During the year ended December 31, 2018, no executive officer served as a member of the Compensation Committee or as a director of another entity having an executive officer serving on our Compensation Committee or as one of our directors.
Code of Conduct
We have adopted a Code of Conduct that applies to all of our directors and employees, including all senior executives and financial officers. A copy of our Code of Conduct is available on our website at http://www.enstargroup.com/corporate-governance by clicking on "Code of Conduct."
In addition, any shareholder may receive a copy of the Code of Conduct or any of our committee charters in print, without charge, by contacting Investor Relations at Enstar Group Limited, P.O. Box HM 2267, Windsor Place, 3rd Floor, 22 Queen Street, Hamilton HM JX, Bermuda. We intend to post any amendments to our Code of Conduct on our website. In addition, we intend to disclose any waiver of a provision of the Code of Conduct that applies to our senior executives and financial officers by posting such information on our website or by filing a Form 8-K with the SEC within the prescribed time period. No such waivers currently exist.
Shareholder Communications with the Board
Shareholders and other interested parties may send communications to the Board by sending written notice to:
Enstar Group Limited
Attention: Corporate Secretary
P.O. Box HM 2267
Windsor Place, 3rd Floor
22 Queen Street
Hamilton, HM JX
Bermuda
 
The notice may specify whether the communication is directed to the entire Board, to the independent directors, or to a particular Board committee or individual director.
Our Corporate Secretary will handle routine inquiries and requests for information. If our Corporate Secretary determines the communication is made for a valid purpose and is relevant to the Company and its business, our Corporate Secretary will forward the communication to the entire Board, to the independent directors, to the appropriate committee chairman or to the individual director as the notice was originally addressed. At each regular meeting of the Board, our Corporate Secretary will present a summary of all communications received since the previous meeting that were not forwarded and will make those communications available to the directors on request.
 

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DIRECTOR COMPENSATION
2018 Director Compensation Program
Our Compensation Committee is responsible for periodically reviewing non-employee director compensation and making recommendations to our Board with respect to any changes. The Compensation Committee conducts a comprehensive review no less than biennially, which may include working with our independent compensation consultant.
In 2018, our director compensation program included:
•
a retainer payable quarterly for non-employee directors, and additional retainers payable quarterly for the Chairman of the Board and certain committee chairs;
•
an equity retainer payable annually in the form of restricted ordinary shares with a one-year vesting period for non-employee directors and the Chairman of the Board; and
•
meeting fees for all Board and committee meetings attended.
Directors who are employees of the Company receive no fees for their services as directors. Pursuant to the terms of his employment with Canada Pension Plan investment Board ("CPPIB"), cash fees earned by Mr. Winslow are paid directly to CPPIB, and he has waived his equity retainer fee. In addition, pursuant to the terms of his employment with Hillhouse Capital, cash fees earned by Mr. Liu are paid directly to Hillhouse Capital.
Our director retainer and meeting fees in place as of December 31, 2018 are set forth below. Committee fees differ due to workload and composition of each committee and are periodically evaluated by the Compensation Committee.
2018 Retainer Fees
Annual
Amounts
Payable
 
2018 Meeting Fees
Amounts Payable for
Attendance
Non-Employee Directors(1)
$
150,000

 
Board Meetings (in Person)
$
3,500

Chairman of the Board(1)
$
150,000

 
Board Meetings (by Phone)
$
1,000

Audit Committee Chairman
$
10,000

 
Audit Committee Meetings
$
1,500

Compensation Committee Chairman
$
10,000

 
Compensation Committee Meetings
$
1,250

Nominating and Governance Committee Chairman
$
5,000

 
Nominating and Governance Committee Meetings
$
1,000

Investment Committee Chairman
$
5,000

 
Investment Committee Meetings
$
1,250

Risk Committee Chairman
$
10,000

 
Risk Committee Meetings
$
1,250

(1)
The non-employee director fee and the Chairman of the Board fee are each payable half in cash and half in restricted ordinary shares subject to a one-year vesting period.
Deferred Compensation Plan
The Amended and Restated Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors (the "Deferred Compensation Plan") provides each non-employee director with the opportunity to elect (i) to defer receipt of all or a portion of his or her cash or equity compensation until retirement or termination and (ii) to receive all or a portion of his or her cash compensation for services as a director in the form of our ordinary shares instead of cash.
Non-employee directors electing to defer compensation have such compensation converted into share units payable as a lump sum distribution after the director leaves the Board. The lump sum share unit distribution is made in the form of ordinary shares, with fractional shares paid in cash. Non-employee directors electing to receive compensation in the form of ordinary shares receive whole ordinary shares (with any fractional shares payable in cash) as of the date compensation would otherwise have been payable. A director's participation in the Deferred Compensation Plan does not affect the vesting schedule of the equity portion of the retainer fees described above.

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Director Compensation Table
The following table summarizes the 2018 compensation of our non-employee directors who served during the year. Messrs. Silvester and O'Shea, as employees, are not eligible to receive compensation for Board service.
Name
Fees Earned or
Paid in Cash(1)(2)
Stock Awards(2)(3)
Total  
Robert J. Campbell
$
211,500

$
150,000

$
361,500

Rick Becker
$
133,000

$
75,000

$
208,000

Sandra L. Boss
$
118,750

$
75,000

$
193,750

James D. Carey
$
94,000

$
75,000

$
169,000

Hans-Peter Gerhardt
$
92,500

$
75,000

$
167,500

Hitesh R. Patel
$
119,250

$
75,000

$
194,250

Jie Liu(4)
$
95,000

$
75,000

$
170,000

Poul A. Winslow(5)
$
106,000

$
—

$
106,000

(1)
Director fees listed in this column may be deferred by directors under the Deferred Compensation Plan.
(2)
Share units (rounded to the nearest whole share) acquired in lieu of the cash compensation portion of director retainer fees for 2018 under the Deferred Compensation Plan were as follows: (a) Mr. Campbell — 1,032 units; (b) Mr. Becker — 324 units; (c) Mr. Carey — 459 units; and (d) Mr. Patel — 367 units. Total share units under the Deferred Compensation Plan held by directors as of the record date are described in the footnotes to the Principal Shareholders and Management Ownership table.
(3)
This column lists the aggregate grant date fair value of Enstar restricted ordinary shares awarded to directors as part of their Board retainer and Chairman of the Board retainer, computed in accordance with FASB Accounting Standards Codification (ASC) Topic 718. The value of the restricted ordinary shares is determined based on the closing price of our ordinary shares on the grant date. For information on the valuation assumptions with respect to awards made, refer to Note 19 to our consolidated financial statements for the year ended December 31, 2018, as included in our Annual Report on Form 10-K for the year ended December 31, 2018. The amounts above reflect the grant date fair value for these awards, excluding the accounting effect of any estimate of future forfeitures, and do not necessarily correspond to the actual value that might be recognized by the directors.
Restricted ordinary shares are subject to a one-year vesting period and are forfeited in their entirety if a director leaves the Board prior to the vesting date. Restricted ordinary share awards listed in this column may be deferred by directors under the Deferred Compensation Plan in the form of restricted share units, subject to the same one-year vesting period ("RSUs"). The number of restricted ordinary shares or RSUs (rounded to nearest whole share) acquired by our directors during 2018 was as follows: (a) Mr. Campbell — 717 RSUs; (b) Mr. Becker — 359 RSUs; (c) Ms. Boss — 359 restricted ordinary shares; (d) Mr. Carey – 359 RSUs; (e) Mr. Gerhardt — 359 restricted ordinary shares; (f) Mr. Liu — 359 restricted ordinary shares and (g) Mr. Patel — 359 RSUs. Fractional amounts are payable in cash at the time of vesting. Total restricted ordinary shares and RSUs held by directors as of the record date are described in the footnotes to the Principal Shareholders and Management Ownership table.
(4)
Fees earned by Mr. Liu in cash are payable directly to Hillhouse Capital pursuant to the terms of his employment.
(5)
Mr. Winslow has waived his equity retainer. Fees earned by him in cash are payable directly to CPPIB pursuant to the terms of his employment.

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2019 Proxy Statement

EXECUTIVE OFFICERS
DOMINIC F. SILVESTER
 
silvesterproxy2a05.jpg
Title: Chief Executive Officer Officer Since: 2001 Age: 58
Biographical Information: Dominic Silvester has served as a director and the Chief Executive Officer of the Company since its formation in 2001. In 1993, Mr. Silvester began a business venture in Bermuda to provide run-off services to the insurance and reinsurance industry. In 1995, the business was assumed by Enstar Limited, which is now a subsidiary of the Company, and for which Mr. Silvester has since then served as Chief Executive Officer. Prior to co-founding the Company, Mr. Silvester served as the Chief Financial Officer of Anchor Underwriting Managers Limited from 1988 until 1993.
PAUL J. O’SHEA
 
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Title: President Officer Since: 2001     Age: 61
Biographical Information: Paul O’Shea was appointed as President of the Company in December 2016. He previously served as Executive Vice President and Joint Chief Operating Officer of the Company since our formation in 2001, and has also been a director throughout this time. He leads our mergers and acquisitions operations, including overseeing our transaction sourcing, due diligence, and negotiations processes. In 1994, Mr. O’Shea joined Dominic Silvester in his run-off business venture in Bermuda, and he served as a director and Executive Vice President of Enstar Limited, which is now a subsidiary of the Company, from 1995 until 2001. Prior to co-founding the Company, he served as the Executive Vice President, Chief Operating Officer and a director of Belvedere Group/Caliban Group from 1985 until 1994.
ORLA M. GREGORY
 
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Title: Chief Operating Officer Officer Since: 2015     Age: 45
Biographical Information: Orla Gregory was appointed as Chief Operating Officer during 2016. She previously served as Chief Integration Officer from February 2015; Executive Vice President of Mergers and Acquisitions of our subsidiary, Enstar Limited, from May 2014; and Senior Vice President of Mergers and Acquisitions from 2009. She has been with the Company since 2003. Ms. Gregory served as Financial Controller of Irish European Reinsurance Company Ltd. in Ireland from 2001 to 2003, and she was an Investment Accountant with Ernst & Young Bermuda 1999 to 2001. Prior to that, Ms. Gregory worked for QBE Insurance & Reinsurance (Europe) Limited in Ireland from 1993 to 1998 as a Financial Accountant.
GUY T.A. BOWKER
 
guybowkera03.jpg
Title: Chief Financial Officer Officer Since: 2017 Age: 41
Biographical Information: Guy Bowker was appointed as Chief Financial Officer on January 1, 2018. He previously served as Chief Accounting Officer since joining the Company in September 2015 and was appointed as Deputy CFO during 2017 as part of his transition to the role of CFO. From 2010 to 2015, Mr. Bowker held the role of Senior Vice President - Controller of Platinum Underwriters Holdings, Ltd. From 2007 to 2010, he was the Director of Finance for American International Group in Bermuda. He is an alumnus of Deloitte’s insurance practice and a member of Chartered Professional Accountants Bermuda and Chartered Accountants Australia and New Zealand. He is also a Chartered Insurer and Fellow of the Chartered Insurance Institute in the United Kingdom.

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2019 Proxy Statement

PAUL M.J. BROCKMAN
 
paulbrockmanproxy2a03.jpg
Title: President and Chief Executive Officer, Enstar (US), Inc Officer Since: 2017   Age: 46
Biographical Information: Paul Brockman is the President and Chief Executive Officer of Enstar (US) Inc. ("Enstar US"). He served as President and Chief Operating Officer of Enstar US since November 2014. From October 2012 to November 2014, he served as Senior Vice President, Head of Commutations for Enstar US. Before joining Enstar US, he worked as Head of Reinsurance for Resolute Management Services UK Ltd. in its London office from April 2007 to October 2012 and, from April 2001 to April 2007, he worked as Manager of Reinsurance Cash Collection and Debt Litigation within the reinsurance asset division of Equitas Management Services Ltd in London.
DAVID J. ATKINS
 
davidatkinsa04.jpg
Title: Chief Executive Officer, Enstar (EU) Limited Officer Since: 2017     Age: 44
Biographical Information: David Atkins was appointed the Chief Executive Officer of Enstar (EU) Limited ("Enstar EU") in January 2016 and continues to serve as Group Head of Claims. From October 2010 to December 2015, he served as Chief Operating Officer of Enstar EU; from April 2007 to October 2010 as Head of Claims and Commutations; and from 2003 to 2007 as Manager of Commutations. Prior to 2003, he served as Manager of Commutation Valuations for Equitas Management Services Limited in London from 2001 to 2003, and as an Analyst in the Reserving and Commutations Department from 1997 to 2001.




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2019 Proxy Statement

PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The table below sets forth information as of March 31, 2019 (unless otherwise provided herein) regarding beneficial ownership of our voting ordinary shares by each of the following, in each case based on information provided to us by these individuals:
•
each person or group known to us to be the beneficial owner of more than 5% of our ordinary shares;
•
each of our current directors and director nominees;
•
each of the individuals named in the Summary Compensation Table; and
•
all of our current directors and executive officers as a group.
The table describes the ownership of our voting ordinary shares (including restricted voting ordinary shares), which are the only shares entitled to vote at the Annual General Meeting. Percentages are based on 17,966,593 ordinary shares outstanding as of March 31, 2019. Certain shareholders listed in the table also hold non-voting ordinary shares, as described in "-Non-Voting Ordinary Shares."
Voting Ordinary Shares
Unless otherwise indicated, each person has sole voting and dispositive power with respect to all shares shown as beneficially owned by them.
 
Name of Beneficial Owner
Number of Shares
Percent  of
Class(1)
(2) 
Hillhouse Capital Management, Ltd.
1,747,840

9.7%
(3) 
Stone Point Capital LLC
1,635,986

9.1%
(4) 
Canada Pension Plan Investment Board
1,501,211

8.4%
(5) 
FMR LLC
991,801

5.5%
(6) 
The Vanguard Group
958,253

5.3%
(7) 
Akre Capital Management, LLC
902,278

5.0%
(8) 
Poul A. Winslow (as a Trustee of CPPIB Epsilon Ontario Trust)
741,735

4.1%
(9) 
Dominic F. Silvester
528,507

2.9%
(10) 
Paul J. O’Shea
198,210

1.1%
(11) 
Robert J. Campbell
179,237

1.0%
(12) 
Orla M. Gregory
18,783

*
(13) 
James D. Carey
5,215

*
(14) 
B. Frederick Becker
3,615

*
(15) 
Hitesh R. Patel
3,040

*
(16) 
Guy T.A. Bowker
2,214

*
(17) 
Paul M.J. Brockman
1,945

*
(18) 
Hans-Peter Gerhardt
1,886

*
(19) 
Sandra L. Boss
1,837

*
(20) 
Jie Liu
1,221

*
(21) 
All Current Executive Officers and Directors as a group (14 persons)
1,687,545

9.4%
*
Less than 1%
(1)
Our bye-laws would reduce the total voting power of any US shareholder or direct foreign shareholder group owning 9.5% or more of our ordinary shares to less than 9.5% of the voting power of all of our shares.
(2)
Based on a Schedule 13D filed on May 24, 2018 by Hillhouse Capital Management, Ltd ("Hillhouse"). Hillhouse has sole voting power and sole dispositive power over all of the shares reported. The principal address for Hillhouse is Cayman Corporate Centre, 3rd Floor, 18 Fort Street, George Town, Grand Cayman.
(3)
Based on information provided in a Schedule 13D/A filed jointly on May 15, 2018 by Stone Point Capital LLC (“Stone Point”), Trident V, L.P. (“Trident V”), Trident Capital V, L.P. (“Trident V GP”), Trident V Parallel Fund, L.P. (“Trident V Parallel”), Trident Capital V-PF, L.P. (“Trident V Parallel GP”), Trident V Professionals Fund, L.P. (“Trident V Professionals”) and Stone Point GP Ltd. (“Trident V Professionals GP”), together with information with respect to Trident Public Equity GP LLC ("TPE GP") and Trident Public Equity LP ("TPE LP") on a prior amendment to such Schedule 13D/A. Of the reported ordinary shares: 1,350,000 are held by TPE LP, of which TPE GP is the general partner, 163,871 are held by Trident V, of which Trident V GP is the general partner, 114,925 are held by Trident V Parallel, of which Trident V Parallel GP is the general partner and 7,190 are held by Trident V Professionals, of which Trident V Professionals GP is the general partner. Trident V, Trident V Parallel, Trident V Professionals and each of their respective general partners may be deemed to beneficially own the ordinary shares held by TPE LP. Stone Point, as the manager of Trident V, Trident V Parallel and Trident V Professionals

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may be deemed to beneficially own all the shares held by these entities, including the shares held by TPE LP. James Carey, a member of our Board, is a member and senior principal of Stone Point, an owner of one of four general partners of each of Trident V GP and Trident V Parallel GP, and a shareholder and director of Trident V Professionals GP. See footnote 13 with respect to 4,787 ordinary shares issuable to Mr. Carey pursuant to the Deferred Compensation Plan and not included in Stone Point’s total reported holdings of 1,635,986 shares. Although these share units accrue to Mr. Carey personally, he holds these share units solely for the benefit of Stone Point, which may be deemed an indirect beneficial owner. The principal address for each Stone Point entity is c/o Stone Point at its principal address, which is 20 Horseneck Lane, Greenwich, CT 06830.
(4)
Based on information provided in a Schedule 13D/A filed jointly on June 15, 2018 by (i) CPPIB, (ii) CPPIB Epsilon Ontario Limited Partnership ("CPPIB LP"), (iii) CPPIB Epsilon Ontario Trust ("CPPIB Trust"), (iv) Poul A. Winslow and (v) R. Scott Lawrence. CPPIB's reported holding of 1,501,211 ordinary shares excludes 741,735 ordinary shares held indirectly through CPPIB LP. CPPIB Trust is the general partner of CPPIB LP, and Messrs. Winslow and Lawrence are trustees of CPPIB Trust. By virtue of their roles as a trustee of CPPIB Trust, Messrs. Winslow and Lawrence have shared voting and shared dispositive power over the shares. CPPIB also owns 1,192,941 Series C non-voting ordinary shares and 404,771 Series E non-voting ordinary shares. The principal address of the above persons and entities is One Queen Street East, Suite 2500 Toronto, ON M5C 2W5 Canada.
(5)
Based on a Schedule 13G filed on February 13, 2019 by FMR LLC. FMR LLC has sole voting power over 27,489 shares and FMR LLC and Abigail P. Johnson each have sole dispositive power over 991,801 shares. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act ("Fidelity Funds") advised by Fidelity Management & Research Company ("FMR Co"), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds' Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by the Fidelity Funds' Boards of Trustees. The principal address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
(6)
Based on a Schedule 13G filed on February 11, 2019 by The Vanguard Group ("Vanguard"). Vanguard has sole voting power over 12,377 shares, shared voting power over 1,091 shares, sole dispositive power over 945,900 shares and shared dispositive power over 12,353 shares. The principal address for Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.
(7)
Based on a Schedule 13G filed jointly on February 14, 2019 by Akre Capital Management, LLC ("Akre Capital"), Akre Focus Fund, and Charles T. Akre, Jr. Akre Capital and Mr. Akre have shared voting and shared dispositive power over 891,326 shares. Akre Focus Fund has shared voting and shared dispositive power over 830,369 shares, and Mr. Akre has sole voting and sole dispositive power over 10,952 shares. The principal address of Akre Capital and Mr. Akre is P.O. Box 998, Middleburg, Virginia 20118. The principal address of Akre Focus Fund is 2020 East Financial Way, Suite 100, Glendora, California 91741.
(8)
Consists of 741,735 shares held by CPPIB LP. Mr. Winslow is a trustee of the CPPIB Trust, which is the general partner of CPPIB LP, but he has no pecuniary interest in the shares held by CPPIB LP. Mr. Winslow disclaims any beneficial ownership of the shares owned by CPPIB. See footnote 4.
(9)
Consists of (a) 40,339 ordinary shares held directly by Mr. Silvester, (b) 483,168 shares held indirectly by Rock Pigeon Limited, a Guernsey company, of which Mr. Silvester and his spouse own 58.66% and 41.34%, respectively, and (c) 5,000 RSUs scheduled to vest on May 10, 2019. Does not include 5,000 RSUs scheduled to vest on May 10, 2020. Does not include 45,000 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017.
(10)
Consists of (a) 34,754 ordinary shares held directly by Mr. O’Shea, (b) 160,331 ordinary shares held by the Elbow Trust (of which Mr. O'Shea and his immediate family are the sole beneficiaries), and (c) 3,125 RSUs scheduled to vest on May 10, 2019. Does not include 3,125 RSUs scheduled to vest on May 10, 2020. Does not include 28,125 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017. The trustee of the Elbow Trust is R&H Trust Co. (BVI) Ltd.
(11)
As of April 1, 2019. Consists of (a) 44,256 ordinary shares held directly by Mr. Campbell, (b) 42,500 ordinary shares held by a self-directed pension plan, (c) 32,300 ordinary shares owned by Mr. Campbell’s spouse, (d) 25,050 ordinary shares owned by Osprey Partners, (e) 12,400 ordinary shares owned by Mr. Campbell’s children, (f) 3,000 ordinary shares owned by the Robert J. Campbell Family Trust, (g) 2,500 ordinary shares owned by the F.W. Spellissy Trust, (h) 500 ordinary shares owned by the Amy S. Campbell Family Trust, and (i) 16,731 ordinary shares issuable pursuant to the Enstar Group Limited Deferred Compensation and Ordinary Share Plan for Non-Employee Directors. Includes 857 RSUs scheduled to vest on April 1, 2020.
(12)
Consists of (a) 16,699 ordinary shares held directly by Ms. Gregory, (b) 2,083 RSUs scheduled to vest on May 10, 2019. Does not include 2,084 RSUs scheduled to vest on May 10, 2020. Does not include 18,750 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017.
(13)
As of April 1, 2019. Includes 4,787 ordinary shares issuable pursuant to the Deferred Compensation Plan held by Mr. Carey solely for the benefit of Stone Point, of which Mr. Carey is a senior principal. Includes 428 RSUs scheduled to vest April 1, 2020. Mr. Carey disclaims beneficial ownership of these share units, except to the extent of his pecuniary interest therein, if any. Stone Point may be deemed an indirect beneficial owner of these ordinary shares. Does not include the ordinary shares held by the Trident V funds described in footnote 3. Mr. Carey is a member of the investment committee and owner of one of the four general partners of both of Trident V GP (the general partner of Trident V) and Trident Capital V-PF (the general partner of Trident V Parallel). Mr. Carey is also a member and senior principal of Stone Point and a shareholder and director of Trident V Professionals GP, which is the general partner of Trident V Professionals. Mr. Carey disclaims beneficial ownership of the shares held of record or beneficially by Stone Point, except to the extent of any pecuniary interest therein.
(14)
As of April 1, 2019. Consists of 3,187 ordinary shares issuable to Mr. Becker pursuant the Deferred Compensation Plan and 428 RSUs scheduled to vest April 1, 2020.
(15)
As of April 1, 2019. Consists of 2,612 ordinary shares issuable to Mr. Patel pursuant to the Deferred Compensation Plan and 428 RSUs scheduled to vest April 1, 2020.
(16)
Does not include 183 RSUs that vest on November 17, 2019; 593 RSUs that vest in two approximately equal annual installments beginning on November 17, 2019; 1,531 RSUs that vest in three approximately equal annual installments beginning on November 17, 2019; 549

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PSUs scheduled to vest following a three-year performance period that began on January 1, 2017; 1,871 PSUs scheduled to vest following a three-year performance period that began on January 1, 2018; and 2,844 PSUs scheduled to vest following a three-year performance period that began on January 1, 2019.
(17)
Does not include 119 RSUs that vest on November 17, 2019; 1,005 RSUs that vest in three approximately equal annual installments beginning on November 17, 2019; 1,004 PSUs scheduled to vest following a three-year performance period that began on January 1, 2017; 1,127 PSUs scheduled to vest following a three-year performance period that began on January 1, 2018; and 1,867 PSUs scheduled to vest following a three-year performance period that began on January 1, 2019.
(18)
As of April 1, 2019. Includes 428 restricted ordinary shares held directly by Mr. Gerhardt scheduled to vest April 1, 2020.
(19)
As of April 1, 2019. Includes 428 restricted ordinary shares held directly by Ms. Boss scheduled to vest April 1, 2020.
(20)
As of April 1, 2019. Includes 428 restricted ordinary shares held directly by Mr. Liu scheduled to vest April 1, 2020.
(21)
See footnotes 8 through 20.

Non-Voting Ordinary Shares
In addition to voting ordinary shares, there were a total of 3,509,682 issued and outstanding non-voting ordinary shares as of March 31, 2019. These shares are held by CPPIB and Hillhouse, as set forth in the table below. Of these shares:
Name of Beneficial Owner
Ordinary Voting Shares
Series C Non-Voting Ordinary Shares
Series E Non-Voting Ordinary Shares
Economic Interest (Excluding Warrants)
Hillhouse(1)
1,747,840

1,406,731

505,239

17.0%
CPPIB and CPPIB Trust
2,242,946

1,192,941

404,771

17.9%
(1)
Does not include warrants outstanding to acquire 175,901 Series C Non-Voting Ordinary Shares for an exercise price of $115.00 per share, subject to certain adjustments.
For additional information on our non-voting ordinary shares, refer to Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the SEC and The Nasdaq Stock Market, LLC reports on Forms 3, 4 and 5 regarding their ownership of ordinary shares and other equity securities of the Company. Under SEC rules, we must be furnished with copies of these reports.
Based solely on our review of the copies of such forms received by us and written representations from our executive officers and directors, we believe that, during the year ended December 31, 2018, all filing requirements applicable to our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities under Section 16(a) were complied with on a timely basis.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Person Transaction Procedures
From time to time, we have participated in transactions in which one or more of our directors, executive officers or large shareholders has an interest. These transactions, called related-party transactions, are described below. All related party transactions require the approval of our Audit Committee (comprised entirely of independent directors), which reviews each transaction for fairness, business purpose, and reasonableness. Each transaction involving the Company and an affiliate entered into during 2018 was approved by our Audit Committee. Investment transactions with related parties are also subject to the review and approval of our Investment Committee.
In addition, our Board has adopted a Code of Conduct, which states that our directors, officers and employees must avoid engaging in any activity that might create a conflict of interest or a perception of a conflict of interest. The Code of Conduct requires these individuals to raise any proposed or actual transaction that they believe may create a conflict of interest for Audit Committee consideration and review. In any situation where an Audit Committee member could be perceived as having a potential conflict of interest, that member is expected to recuse himself from the matter, and the non-interested members of the Audit Committee review the transaction.
On an annual basis, each director and executive officer completes a Directors’ and Officers’ Questionnaire that requires disclosure of any transactions with the Company in which he or she, or any member of his or her immediate family, has a direct or indirect material interest. A summary of responses from the questionnaires is reported to the Audit Committee.
Transactions Involving Related Persons
Transactions with Trident and its Affiliates
Through several private transactions occurring from May 2012 to July 2012 and an additional private transaction that closed in May 2018, investment funds managed by Stone Point Capital LLC ("Stone Point") have acquired an aggregate of 1,635,986 of our Voting Ordinary Shares (which constitutes approximately 9.1% of our outstanding voting ordinary shares). On November 6, 2013, we appointed James D. Carey to our Board of Directors. Mr. Carey is the sole member of an entity that is one of four general partners of the entities serving as general partners for the Trident funds, is a member of the investment committees of such general partners, and is a member and senior principal of Stone Point, the manager of the Trident funds.
Prior to Trident’s acquisition of our ordinary shares in 2012, we invested in SKY Harbor Global Funds ("SKY Harbor"), which is managed by companies in which the Trident funds have indirect ownership interests. Additional allocations to this investment were approved by our Audit and Investment Committees and made in subsequent years. As of December 31, 2018, we had made aggregate investments of $232.1 million in SKY Harbor, which had an aggregate fair value of approximately $255.7 million. The manager of SKY Harbor charges certain fees to the funds it manages. These fees are deducted within the net asset value of the fund and totaled approximately $1.2 million for the year ended December 31, 2018. We are treated no less favorably than similarly situated investors in the fund.
We have made the following commitments to invest in funds managed by Stone Point: (i) up to $20.0 million in Trident VI Parallel Fund and Trident VI Parallel AIV-I, LP made in 2014, (ii) $15.8 million in T-VI Co-Invest-A LP (collectively with Trident VI Parallel Fund and Trident VI Parallel AIV-I, LP, the "Trident VI funds") made in 2015, and (iii) up to $10.0 million in Trident VII, L.P. (the "Trident VII Fund") made in 2017.
As of December 31, 2018, we had made aggregate investments of $27.1 million in the Trident VI funds and Trident VII fund, and such investments had a fair value of $49.0 million. Stone Point charges fees to the funds it manages (other than T-VI Co-Invest-A LP), which are deducted within the net asset value of the funds and totaled approximately $1.6 million for the year ended December 31, 2018. We are treated no less favorably than similarly situated investors in the funds. The Trident VI funds and the Trident VII Fund and its affiliates collectively own an approximate 45% interest in Alliant Insurance Services, an insurance brokerage firm. Alliant Insurance Services has provided brokerage services to our StarStone companies in the ordinary course of business and receives commission fees for business produced on an arm's-length basis.
During 2014, we invested in Eagle Point Credit Fund L.P., which is managed by Eagle Point Credit Management LLC, a company indirectly owned, in part, by Trident VI Parallel Fund (the "EP Manager"). Mr. Carey is a director of the Board of Managers of the EP Manager. As of December 31, 2018, our investment totaled $36.2 million, and its fair value was $37.3 million. The EP Manager charges certain fees to the fund, which are deducted within the net asset value of the fund and totaled approximately $0.6 million for the year ended December 31, 2018. We are treated no less favorably than similarly situated investors in the fund. We also invested in shares of common stock of Eagle Point Credit Company, a registered investment company indirectly owned, in part, by Trident VI Parallel. As of December 31,

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2018, we had exited this investment. We also have separate accounts managed by the EP Manager and PRIMA Capital Advisors, LLC, a registered investment adviser, which is indirectly owned, in part, by funds managed by Stone Point. These accounts had a balance of $88.4 million and $88.3 million, respectively, as of December 31, 2018, and we incurred approximately $0.3 million and $0.2 million, respectively, for these accounts in management fees for the year ended December 31, 2018.
During 2016, we invested in Marble Point Investments LP ("Marble Point"), the general partner of which is an affiliate of the EP Manager. As of December 31, 2018, we had invested $27.7 million with a fair value of $32.3 million, in Marble Point. We incurred fees in connection with this investment of $0.1 million during the year ended December 31, 2018. We have also invested in Marble Point Fund, which is an affiliate of the EP Manager. As of December 31, 2018 our investment totaled $1.7 million, and its fair value was $3.9 million. We did not incur any fees in connection with this investment during the year ended December 31, 2018.
During 2018, we invested in Eagle Point Income Company, Inc., which is managed by the EP Manager. As of December 31, 2018, our investment totaled $75.1 million, and its fair value was $68.8 million. We incurred fees of approximately $0.1 million in connection with this investment during the year ended December 31, 2018.
During 2018, we also invested in Henderson Park Real Estate Fund, which is owned, in part, by Trident VII Parallel Fund. As of December 31, 2018, our total investment was $8.0 million, and it had an equivalent fair value.
During the fourth quarter of 2018, we invested an aggregate of $25.0 million in Mitchell TopCo Holdings, the parent company of Mitchell International and Genex Services LLC, as a co-investor alongside the Trident VII Fund. As of December 31, 2018, the value of our initial investment had not changed.
Before Mr. Carey joined our board, we invested in Sound Point Capital Floating Rate Fund, a fund managed by Sound Point Capital. Mr. Carey has an indirect minority ownership interest in, and serves as a director on the board of managers of, Sound Point Capital. As of December 31, 2018, we had exited our investment in Sound Point Capital Floating Rate Fund. During 2014, we invested $17.5 million in Sound Point Credit Opportunities Offshore Fund, Ltd., a fund managed by Sound Point Capital. This investment had a fair value of $19.5 million as of December 31, 2018. In addition, during 2018 we invested an aggregate investment of $10.0 million in SPC Opportunities Parallel Fund, L.P., a fund managed by Sound Point Capital. This investment had a fair value of $10.4 million as of December 31, 2018. Sound Point Capital charges certain fees to the funds it manages, which are deducted from the net asset value of the funds and totaled approximately $0.2 million for the year ended December 31, 2018.
We are treated no less favorably than similarly situated investors in the funds. Sound Point Capital has acted as collateral manager for certain of our direct investments in CLO equity securities. The fair value of these investments was $13.4 million as of December 31, 2018. During 2016, we opened a separate account managed by Sound Point Capital, with a fair value of $1.1 million as of December 31, 2018, with respect to which we did not incur any fees for the year.
Fees charged pursuant to investments affiliated with entities owned by a Trident fund or Sound Point Capital were on an arm's-length basis.
In addition, we have entered into certain agreements with Trident with respect to Trident’s co-investments in the Atrium, Arden, and StarStone acquisitions. These include investors’ agreements and shareholders’ agreements, which provide for, among other things: (i) our right to redeem Trident’s equity interest in the StarStone transaction in cash at fair market value within the 90 days following April 1, 2019; (ii) our right to redeem Trident’s equity interest in the Atrium/Arden and StarStone transactions in cash at fair market value at any time following September 6, 2020 and April 1, 2021, respectively; and (iii) Trident’s right to have its equity co-investment interests in the Atrium/Arden and StarStone transactions redeemed by us at fair market value (which we may satisfy in either cash or our ordinary shares) following September 6, 2020 and April 1, 2021, respectively. We did not exercise our right to redeem Trident's equity interest in Atrium/Arden during the 90 days following September 6, 2018. Pursuant to the terms of the shareholders’ agreements, Mr. Carey serves as a Trident representative on the boards of the holding companies, including North Bay Holdings Limited ("North Bay"), established in connection with the Atrium/Arden and StarStone co-investment transactions. Trident also has a second representative on these boards who is a Stone Point employee.
On December 26, 2018, the shareholders of North Bay completed a transaction to provide capital support to StarStone in the form of a contribution to its contributed surplus account and a loss portfolio transfer primarily related to discontinuing lines of business. To fund the transaction, the North Bay shareholders contributed an aggregate amount of $135.0 million to North Bay in proportion to their ownership interests. Trident’s proportionate contribution of $53.1 million was temporarily funded by North Bay and was reimbursed in the first quarter of 2019, subject to the terms and conditions of the reimbursement agreement executed by the parties.

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As of December 31, 2018, we included $439.4 million as redeemable noncontrolling interest on our balance sheet related to these Trident co-investment transactions.
In August 2017, we engaged Amherst Pierpont to provide analytic support to StarStone's U.S. mortgage risk underwriting. Funds managed by Stone Point have an approximate 35% direct and indirect interest in Amherst Pierpont, and Mr. Carey serves as a director of Amherst Pierpont. We incurred approximately $0.3 million in fees from our engagement of Amherst Pierpont during the year ended December 31, 2018.
From time to time, certain of our directors and executive officers have made personal commitments and investments in entities that are affiliates of or otherwise related to funds managed by Stone Point or Sound Point Capital, including some of the entities listed above.
Transactions with CPPIB
CPPIB owns approximately 8.4% of our voting ordinary shares and additional non-voting shares that, together with its voting ordinary shares held indirectly, represented an economic interest of approximately 17.9% as of March 31, 2019. Poul Winslow, of CPPIB, was appointed to our Board on September 29, 2015 in connection with CPPIB's shareholder rights agreement with us. Approximately 4.1% of our voting ordinary shares are held indirectly by CPPIB through CPPIB LP. CPPIB is the sole limited partner of CPPIB LP. CPPIB Trust is the general partner of CPPIB LP, and Mr. Winslow is a trustee of CPPIB Trust. By virtue of his role as a trustee of CPPIB Trust, in its capacity as general partner of CPPIB LP, Mr. Winslow has shared voting and shared dispositive power over the shares held by CPPIB LP, but has no pecuniary interest in the shares.
We have a pre-existing reinsurance recoverable carried on our balance sheet at $6.8 million as of December 31, 2018 from Continental Assurance Company, a company acquired by Wilton Re Ltd. ("Wilton Re") after the reinsurance recoverable was established. CPPIB, together with management of Wilton Re, owns 100% of the common stock of Wilton Re. No payments were made in respect of this reinsurance recoverable during the year ended December 31, 2018.
KaylaRe
On December 15, 2016, KaylaRe Holdings Ltd. ("KaylaRe") completed an initial capital raise of $620.0 million. We originally owned approximately 48.2% of KaylaRe's common shares and recorded our investment in KaylaRe using the equity method basis of accounting. On May 14, 2018, we completed a transaction to acquire all of the outstanding shares and warrants of KaylaRe, following the receipt of all required regulatory approvals. In consideration for the acquired shares and warrants of KaylaRe, we issued an aggregate of 2,007,017 ordinary shares, comprising 1,501,778 voting ordinary shares and 505,239 Series E non-voting ordinary shares to the shareholders of KaylaRe as follows: (i) 1,204,353 voting ordinary shares and 505,239 Series E Shares to a fund managed by Hillhouse Capital Management, Ltd. (together with its affiliates, “Hillhouse Capital”); (ii) 285,986 voting ordinary shares to Trident; and (iii) 11,439 voting ordinary shares to a minority shareholder. In addition, the Shareholders Agreement between Enstar and the other KaylaRe shareholders was effectively terminated. Effective May 14, 2018, we consolidated KaylaRe into our consolidated financial statements. Our investment in the common shares and warrants of KaylaRe was carried at $320.1 million as at May 14, 2018, and the shares we issued to acquire the 51.8% of KaylaRe that we did not already own were valued at $414.8 million as of such date.
Our subsidiary, Enstar Limited, acts as insurance and reinsurance manager to KaylaRe's subsidiary, KaylaRe Ltd., for which it receives fee income. Affiliates of Enstar have also entered into various reinsurance agreements with KaylaRe Ltd. We also provide administrative services to KaylaRe and KaylaRe Ltd.
Through a Quota Share Agreement dated December 15, 2016 (the "KaylaRe-StarStone QS"), several of our StarStone affiliates entered into a Quota Share Treaty with KaylaRe Ltd. pursuant to which KaylaRe Ltd. reinsures 35% of all business written by these StarStone affiliates for risks attaching from January 1, 2016, net of the StarStone affiliates’ external reinsurance programs. The reinsurance of StarStone's U.S. and U.K. affiliates was non-renewed as of January 1, 2018 and January 1, 2019, respectively.
In addition, Fitzwilliam Insurance Limited ("Fitzwilliam"), one of our non-life run-off subsidiaries, ceded $177.2 million of loss reserves to KaylaRe Ltd. in 2016, on a funds held basis. Under the terms of this reinsurance agreement, Fitzwilliam is entitled to receive a profit commission calculated with reference to reserve savings made during the term of this agreement. Our Non-life Run-off subsidiaries did not cede any new business to KaylaRe Ltd. during the year ended December 31, 2018. Our consolidated statement of earnings for the year ended December 31, 2018 included total net loss of $0.1 million related to transactions between us and KaylaRe and KaylaRe Ltd. up until May 14, 2018, the date of acquisition.

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Hillhouse Capital
Investment funds managed by Hillhouse Capital collectively own approximately 9.7% of Enstar’s voting ordinary shares. These funds also own non-voting ordinary shares and warrants to purchase additional non-voting ordinary shares, which together with their voting ordinary shares, represent an approximate 17.0% economic interest in Enstar. In February 2017, Jie Liu, a Partner of Hillhouse Capital, was appointed to our Board. In connection with Hillhouse Capital's investment in KaylaRe, Mr. Liu also served as a director of KaylaRe until resigning from that board in connection with our acquisition of KaylaRe.
As of December 31, 2018, our equity method investee, Enhanzed Reinsurance Ltd. ("Enhanzed Re") had investments in a fund managed by Hillhouse Capital with a fair value of $75.2 million. Enhanzed Re is a joint venture between us, Allianz SE and Hillhouse Capital.
KaylaRe has investments in a fund managed by Hillhouse Capital. On May 14, 2018, KaylaRe was acquired as described above, at which point KaylaRe was consolidated and KaylaRe's investment in Hillhouse InRe Fund, L.P. ("InRe Fund") was recorded within other investments on our consolidated balance sheet. 
As of December 31, 2018, we had investments in funds managed by Hillhouse Capital, including the InRe Fund, with a fair value of $845.1 million. Hillhouse Capital charges certain fees to the funds it manages. These fees are deducted within the net asset value of the respective funds and totaled approximately $8.2 million for the year ended December 31, 2018.
From time to time, certain of our directors and executive officers have made personal commitments and investments in entities that are affiliates of or otherwise related to funds managed by Hillhouse Capital.
AmTrust
In November 2018, pursuant to a Subscription Agreement with Evergreen Parent L.P. ("Evergreen"), K-Z Evergreen, LLC and Trident Pine Acquisition LP ("Trident Pine"), we purchased equity in Evergreen in the aggregate amount of $200.0 million. Evergreen is an entity formed by private equity funds managed by Stone Point and the Karfunkel-Zyskind family that acquired the approximately 45% of the issued and outstanding shares of common stock of AmTrust Financial Services, Inc. ("AmTrust") that the Karfunkel-Zyskind family and certain of its affiliates and related parties did not already own or control. The equity interest was in the form of three separate classes of equity securities issued at the same price and in the same proportion as the equity interest purchased by Trident Pine. Following the closing of the transaction, we own approximately 7.5% of the equity interest in Evergreen and Trident Pine owns approximately 21.8%. Evergreen owns all of the equity interest in AmTrust. In addition, upon the successful closing of the transaction we received a fee of $3.5 million, half of which was paid upon closing and the other half of which will be paid on the first anniversary of the closing.
On February 14, 2019, we entered into four RITC transactions with Syndicates 1206, 1861, 2526 and 5820, managed by AmTrust Syndicates Limited, an affiliate of AmTrust, under which we reinsured to close the 2016 and prior underwriting years. In these transactions, we assumed aggregate net reinsurance reserves of approximately £650.0 million (approximately $830.0 million) for cash consideration approximately equal to the net amount of reserves assumed.
Citco
In June 2018, our subsidiary made a $50.0 million indirect investment in the shares of Citco III Limited ("Citco"), a fund administrator with global operations. Pursuant to an investment agreement and in consideration for participation therein, a related party of Hillhouse Capital provided investment support to our subsidiary. As of December 31, 2018, our indirect investment in the shares of Citco, carried in equity method investments on our consolidated balance sheet, had a fair value of $50.8 million. In a private transaction that preceded our co-investment opportunity, certain Citco shareholders, including Trident, agreed to sell all or a portion of their interests in Citco. As of December 31, 2018, Trident owned an approximate 3.4% interest in Citco.
Enhanzed Re
Enhanzed Re is a joint venture between Enstar, Allianz SE and Hillhouse Capital that was capitalized in December 2018. Enhanzed Re is a Bermuda-based Class 4 and Class E reinsurer and will reinsure life, non-life run-off, and property and casualty insurance business, initially sourced from Allianz SE and Enstar. Enstar, Allianz and Hillhouse Capital affiliates have made equity investment commitments in aggregate of $470.0 million to Enhanzed Re. Enstar owns 47.4% of the entity, Allianz owns 24.9%, and an affiliate of Hillhouse Capital owns 27.7%. As of December 31, 2018, we contributed $94.8 million of our total capital commitment to Enhanzed Re and had an uncalled amount of $128.0 million.

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Our subsidiary acts as the (re)insurance manager for Enhanzed Re, Hillhouse Capital acts as primary investment manager, and an affiliate of Allianz SE also provides investment management services. Enhanzed Re intends to write business from affiliates of its operating sponsors, Allianz SE and Enstar. It will seek to underwrite business to maximize diversification by risk and geography.
Indemnification of Directors and Officers; Director Indemnity Agreements
We have Indemnification Agreements with each of our directors. Each Indemnification Agreement provides, among other things, that we will, to the extent permitted by applicable law, indemnify and hold harmless each indemnitee if, by reason of such indemnitee’s status as a director or officer of the Company, such indemnitee was, is or is threatened to be made a party or participant in any threatened, pending or completed proceeding, whether of a civil, criminal, administrative, regulatory or investigative nature, against all judgments, fines, penalties, excise taxes, interest and amounts paid in settlement and incurred by such indemnitee in connection with such proceeding. In addition, each of the Indemnification Agreements provides for the advancement of expenses incurred by the indemnitee in connection with any proceeding covered by the agreement, subject to certain exceptions. None of the Indemnification Agreements precludes any other rights to indemnification or advancement of expenses to which the indemnitee may be entitled, including but not limited to, any rights arising under our governing documents, or any other agreement, any vote of our shareholders or any applicable law.
Our executive officers’ employment agreements provide them with indemnification protection to the fullest extent permitted by applicable law in the jurisdictions in which they are employed.


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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
Company Performance
2018 was a year of many accomplishments for Enstar, mixed with several challenges. The Company posted a net loss of $162.4 million. This was the first reported annual net loss in our history, and was primarily driven by unrealized losses on our fixed income investments and equities and other investments, as well as losses in our StarStone segment. These losses caused Enstar to miss threshold levels of financial objectives achievement within the Annual Incentive Plan.
Despite the challenges faced in 2018, the fundamentals of our business remain strong. Our core non-life run-off segment had a very successful year in terms of reductions in net claims reserves, and we acquired more new run-off business in 2018 than in any prior year. The key elements of our 2018 reported results and financial position included:
•
A decrease of 2.2% in basic book value per share, compared to a peer median decrease of 3.8% (a compound annual growth rate of 14.2% since 2006, immediately prior to our public listing);
•
Net unrealized losses on fixed income investments of $211.4 million, reflected with the accounting classification we use for these securities;1
•
Net unrealized losses on equities and other investments of $173.8 million, most of which were experienced in the fourth quarter during a period of heightened market volatility;
•
Total gross reserves for losses and loss adjustment expenses increased 27.2% to $9.4 billion (an increase of 108.7% since 2014);
•
Completion of eight run-off transactions, adding $3.2 billion of gross loss reserves, and several new significant minority investments;
•
Total assets increased 21.7% to $16.6 billion (an increase of 66.6% since 2014);
•
Reserve savings of $306.1 million ("net incurred losses & LAE" on our Non-life Run-off GAAP statement of net earnings) from our Non-life Run-off segment; and
•
Completion of two public offerings of preferred shares, adding a combined $510 million in capital.
1 Many insurance companies predominantly use available-for-sale accounting, where unrealized amounts are recorded directly to shareholders’ equity and therefore do not impact earnings. Unrealized amounts would only become realizable in the event of a sale of the specific securities prior to maturity or a credit default. Because most of our investments are held as "trading" for accounting purposes, the unrealized losses we experienced in 2018 on such investments negatively impacted our reported earnings.

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The graphs below show that we have outperformed the peer median in growth in basic book value per common share (compounded annually) during the three- and one-year periods ended December 31, 2018. However, we fell below the median of our peer group for GAAP return on equity due to the losses described above. Our Board monitors our performance versus our industry peers for background information purposes only, and relative performance metrics are not built into our incentive programs because of the unique nature of our business (as described in "- Peer Group" below).
chart-8923365df1c55a91a81.jpg chart-a6b314d717d85f469e7.jpg
*
Source: S&P Market Intelligence for peer company data. Peer group includes the companies selected as our peers by our Compensation Committee, as described in "- Peer Group."

Management Team
We are a growth company operating in an extremely competitive and changing industry. We believe that the skill, talent, judgment, and dedication of our executive officers are critical factors affecting the long-term value of our company. During 2018, our principal executive officer, principal financial officer, and three most highly compensated executive officers were:
•
Dominic Silvester - Chief Executive Officer ("CEO") and co-founder;
•
Guy Bowker - Chief Financial Officer ("CFO");
•
Paul O'Shea - President and co-founder;
•
Orla Gregory - Chief Operating Officer ("COO");
•
Paul Brockman - CEO, Enstar (US), Inc. ("U.S. CEO");
Key Compensation Decisions for 2018 Performance Year
After considering our financial, operational, and strategic performance, the Compensation Committee made the following key compensation decisions:
•
CEO / President / COO Long-term Incentives - No new long-term equity incentive awards were granted to Messrs. Silvester and O'Shea and Ms. Gregory following grants made to them in 2017. Reported compensation for these executives therefore does not include a long-term equity incentive component, as awards granted in 2017 were intended to cover a three-year period.
•
Annual Incentive Awards - The Company financial performance component was not achieved, and this portion of the executive officer awards was not paid. Plan awards to Messrs. Silvester and O'Shea and Ms. Gregory were further reduced. Mr. Silvester's award was 29% of his base salary, down from 115% in 2017. Awards for Mr. O'Shea and Ms. Gregory were similarly reduced to 38% and 36% of base salaries, respectively.
•
Base Salaries - Base salaries for Messrs. Silvester and O'Shea and Ms. Gregory were not increased during 2018. Mr. Bowker received an increase to reflect his promotion from Deputy CFO the prior year, and Mr. Brockman received a 1.5% cost of living adjustment.

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•
Other Long-term Incentives - Granted long-term equity incentive awards consisting of 65% performance share units ("PSUs") and 35% restricted share units ("RSUs") to the CFO and U.S. CEO (due to the timing of the grant dates, only the PSUs are reported as 2018 compensation).
Results of Shareholder Vote on Compensation; Shareholder Engagement
At last year's annual general meeting held on June 13, 2018, our shareholders approved the compensation of our executive officers with 89% of the total votes cast in favor of the proposal. While we seek to achieve higher approval results, our Board of Directors considers the results as indicative of a reasonable level of support for our compensation decisions and a recognition of our continued progress on improving our compensation programs. The Board emphasized that meaningful shareholder engagement should continue as it helps understand the issues around our compensation and governance that are important to our shareholders.
Shareholder Engagement
The engagement program was led by two of our independent directors, Messrs. Campbell (Chairman of the Board; member of the Compensation Committee) and Becker (Chairman of the Compensation Committee and the Nominating and Governance Committee). We spoke with shareholders representing approximately 20% of our outstanding voting ordinary shares, as well as with two major proxy advisory firms, and invited conversations with additional shareholders representing 9% ownership of our outstanding ordinary shares, who advised that they did not feel a need to meet with us this year. Directors whose firms represent an additional 23% of our outstanding voting ordinary shares are actively involved in our Board's oversight of compensation and governance matters, and were not included in the engagement program. We have taken, and continue to take, the feedback we receive from our shareholders and advisory firms into account in making compensation decisions and designing future compensation programs.

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What We Heard
What We Did
Establish rigorous performance objectives tied to defined pay-out levels for Annual Incentive Plan Awards, rather than relying on full discretion
The 2018 award cycle under the new Annual Incentive Plan built upon the changes made for 2016, when, in response to shareholder feedback, the Compensation Committee moved away from our previous fully discretionary plan and adopted performance objectives based on a combination of financial and operational goals, corresponding to threshold, target, and maximum annual incentive award payments.
Use of discretion under our Annual Incentive Plan should be limited and, where used, explained thoroughly
The Compensation Committee's authority to make an adjustment on the Annual Incentive Plan payout was used in 2018 to make downward adjustments for the CEO, President and COO and to make upward adjustments for the CFO and U.S. CEO. The Compensation Committee believes this flexibility is necessary for our business, but takes into consideration shareholder perspective that it should be used in limited circumstances. We have also disclosed the rationale for such adjustments in "-Annual Incentive Compensation-Committee Adjustment Amount."
Individual performance objectives carry meaningful weight under our Annual Incentive Plan and may be challenging for shareholders to assess
We understand that our shareholders are more accustomed to a smaller allocation to individual performance objectives than the 50% that our Operational Performance Objectives comprise and have included detailed disclosure on why we use this structure, as well as on how the Compensation Committee made its 2018 assessments.
Develop long-term incentive ("LTI") awards that vest over at least a three-year period and are weighted at least two-thirds to performance-based awards
We discontinued the use of SARs, which our shareholders expressed in prior years were not sufficiently performance-based. We developed a PSU and RSU program and made executive awards in 2017 and continued that program in 2018. The PSUs "cliff vest" following a three-year performance period, subject to performance conditions, and comprise 75% of the LTI award for our CEO, President and COO. RSUs comprise 25% of the awards and vest pro-rata over three years. For our CFO and US CEO, the split between PSUs and RSUs is 65% to 35%, respectively.
Where possible, avoid using the same metric in Annual and LTI awards
We clarified that although book value per share is one of the performance metrics used in our Annual Incentive Plan award program, this is an annual measure, as distinguished from the three-year growth in book value per share metric used in our LTI awards. Nonetheless, the Compensation Committee values this input and will continue to consider it in designing future awards.
Disclose LTI metrics for in-process awards unless competitively harmful
We have disclosed the metrics for our material executive PSU awards below under "-Long-Term Compensation."
Focus on board composition, director nomination processes and diversity
In response to shareholder comments, we have enhanced our disclosure of the mix of skills on our Board. We have also included a Board skills matrix to give shareholders a view of our board composition. Those we spoke with were also pleased to hear that we adopted a Board Diversity Policy in early 2019 as discussed above in "Corporate Governance - Director Nominations, Qualifications and Recommendations."
Objectives of our Executive Compensation Program
Our Compensation Committee is responsible for establishing the philosophy and objectives of our compensation program, designing and administering the various elements of our compensation program, and assessing the performance of our executive officers and the effectiveness of our compensation program in achieving their objectives.
We are a growth company operating in an extremely competitive and changing industry. We believe that the skill, talent, judgment, and dedication of our executive officers are critical factors affecting the long-term value of our company. Therefore, our goal is to maintain an executive compensation program that will:
Incentivize performance consistent with clearly defined corporate objectives
Align our executives’ long-term interests with those of our shareholders
Fairly compensate our executives
Retain and attract qualified executives who are able to contribute to our long-term success
We have specifically identified growing our net book value per share as our primary corporate objective over the long term. We believe growth in our net book value is driven primarily by growth in our net earnings, which is in turn driven in large part by: (i) successfully completing new acquisitions; (ii) effectively managing companies and portfolios

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of business that we have acquired; (iii) executing our active underwriting strategies; and (iv) prudently managing our investments and capital.
We use additional financial metrics in our annual incentive compensation program, which included net earnings, growth in fully diluted book value per share, and return on equity. We also incorporated operational performance objectives similarly designed to drive success in these measures and to achieve long-term growth and success.
Roles of Executive Officers
The Compensation Committee makes compensation determinations for all of our executive officers. As part of the determination process, Mr. Silvester, our CEO, assesses our overall performance and the individual contribution of each member of the executive leadership team. On an annual basis, he reviews the prior year’s compensation and presents recommendations to the Compensation Committee for salary adjustments and annual incentive awards for each executive officer, taking into consideration each executive's achievement of his or her operational performance objectives. He also makes recommendations regarding the overall size of the executive/employee bonus pool for our 2016-2018 Annual Incentive Program.
The Compensation Committee discusses all recommendations with Mr. Silvester and then meets in executive session without Mr. Silvester present to evaluate his recommendations, review the performance of all of the executive officers, discuss CEO compensation, and make final compensation decisions.
Ms. Gregory, our COO, attends portions of the meetings of our Compensation Committee from time to time to provide information relating to our financial results and plans, performance assessments of our executive officers, and other personnel-related data.


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Principal Elements of Executive Compensation
Our executive compensation program currently consists of three principal elements: base salaries, annual incentive compensation and long-term incentive compensation. Executives also receive certain other benefits, including those pursuant to their employment agreements. The table below describes the elements of our executive compensation as well as the other components of our program, each of which is described in more detail later in this proxy statement.
Principal Element  
Description
Key Features
Base Salary
Provides the fixed portion of an executive’s compensation that reflects scope of skills, experience and performance
•  Provides a base component of total compensation
•  Established largely based on scope of responsibilities, market conditions, and individual and Company factors
Annual Incentive Compensation
Provides "at risk" pay that reflects annual Company performance and individual performance
•  Aligns executive and shareholder interests
•  Designed to reward performance consistent with financial and individual operational performance objectives
•  2018 was our third year using defined performance objectives, following our previous use of a fully discretionary program
Long-Term Incentive ("LTI") Compensation
Includes PSUs that "cliff vest" following a three-year performance period subject to the Company's achievement of financial performance metrics selected by the Compensation Committee. RSUs vest in three equal annual installments beginning on the one-year anniversary of the grant date
•  Aligns executive and shareholder interests
•  Drives long-term performance and promotes retention
•  Shareholder dilution issues are considered when making equity awards
•  PSUs do not vest unless performance measurements are met and can vest from 50% to 150% depending on the level of achievement
•  The top three executives received LTI awards in 2017 comprising 75% PSUs and 25% RSUs; other executives receive annual awards comprising 65% PSUs and 35% RSUs
Other Benefits and Perquisites
Reflects the Bermuda location of our corporate headquarters, as well as specific local market and competitive practices such as retirement benefits, Bermudian payroll and social insurance tax contributions
•  Provides benefits consistent with certain local market practices in our Bermuda location in order to remain competitive in the marketplace for industry talent
•  Promotes retention of executive leadership team
Employment Agreements
Provides certain protections for executives and their families in the event of death or long-term disability, termination, or change in control
Change in control contractual benefits are payable only in a "double trigger" situation where employment is terminated following a change of control
•  Provides Enstar with protections such as restrictive covenants (non-competition, non-solicitation, confidentiality, etc.)
•  Promotes retention over a multi-year term and a sense of security among the leadership team
•  Consistent with competitive conditions and legal requirements in Bermuda and the U.K.
Compensation Allocations among Elements
For 2018, consistent with historic practices, we did not have a pre-established policy or target for the allocation of the components of our program, and the Compensation Committee considers all compensation components in total when evaluating and making decisions with respect to each individual component. Although it does not mandate a specific allocation among the components of pay, the Compensation Committee believes that a meaningful portion of each executive’s total compensation should be "at risk" and performance-based.
Performance-based compensation during 2018 reported in the Summary Compensation Table constituted 22% of our CEO's total compensation because Mr. Silvester was not granted a long term incentive award during 2018 following the 2017 grant intended to cover a three-year period. Our CEO's annual incentive award was significantly lower than in previous years due to the impact of the Company's 2018 financial results; if "target" levels of performance had been achieved, his annual incentive award would have constituted 52% of total reported compensation.
For our other executive officers, the percentages of performance-based compensation during 2018 reported in the Summary Compensation Table was impacted by Mr. O'Shea and Ms. Gregory not being granted a long term incentive award during 2018 following the 2017 grant, and lower bonuses for these executives. Messrs. Bowker and Brockman's reported compensation includes PSUs granted in January 2018. The percentage of performance-based compensation for 2018 for our other executive officers was as follows: (i) Paul O'Shea - 27% (target: 60%); (ii) Orla

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Gregory - 27% (target: 59%); (iii) Guy Bowker - 61% (equivalent to target); and (iv) Paul Brockman - 57% (target, including his 2018 PSU award: 63%).
Role of Compensation Consultants
The Compensation Committee has the authority under its charter to retain compensation consultants and outside legal counsel or other advisors and, before selecting a consultant or advisor, must consider its independence. During 2018, the Compensation Committee engaged McLagan, an Aon Hewitt Company ("McLagan"), to provide analysis regarding annual incentive plan performance objectives for our executive officers in comparison to our peer group. McLagan reported directly to the Compensation Committee and has no personal or business relationship with any Committee member or member of Company management. McLagan provides no other services to the Company. McLagan's fees for its services were $19,000. McLagan is a division of Aon plc ("Aon"), the parent company of subsidiaries that provide insurance brokerage-related services to our subsidiaries and affiliates unrelated to the compensation consulting services. Fees for these Aon services were approximately $2 million for the year, and constituted a de minimis portion of Aon's 2018 revenue (less than 0.018%).
The Compensation Committee assessed the independence of McLagan in light of applicable SEC and Nasdaq rules and reviewed responses from the consultant addressing factors related to its independence. Following this review, the Compensation Committee concluded that the firm was independent and that their advisory services did not raise any conflicts of interest.
Peer Group
In making compensatory decisions with respect to the 2018 performance year, including assessing whether we were meeting our goal of providing competitive compensation, the Compensation Committee reviewed publicly available executive officer compensation information described in the periodic filings of a group of other publicly traded companies. The Compensation Committee reviews our peer group annually. During 2018, the Compensation Committee added Arch Capital Group Ltd. and Everest Re Group Ltd. to our peer group following the loss of several peers to merger activity in the industry and several other peers falling below our size criteria.
The Compensation Committee generally seeks to include in our peer group companies that fall approximately within our size guidelines and include comparable aspects of our business (e.g., acquisitive business models, active specialty underwriters, and a property and casualty insurer with run-off business). However, establishing a reliable peer group presents challenges for Enstar because our primary business is acquiring and operating companies and portfolios in run-off, whereas most in our industry focus primarily on writing new (re)insurance business. Run-off is a niche within the insurance industry, fragmented with only a handful of smaller specialist managers, and divisions within significantly larger insurance franchises. Our run-off businesses generate the substantial share of our earnings. Certain aspects of our business also resemble that of private equity firms, but funds with publicly available data are typically size mismatches for Enstar. We have not identified another company that lists Enstar as its peer.
While pay at our peer companies is generally relevant to provide a frame of reference to the Compensation Committee in determining executive compensation, the Compensation Committee reviewed the compensation paid by these companies for informational and overall comparison purposes only. We did not compensate our executives to align with a specific benchmark or target percentile or precise position within our peer group. Instead, we sought only to be generally competitive relative to our peers with the compensation we offer our executives. Given the significant differences between us and our most similar peers relating to business, operations, and executive team structure, we believe that formulaic benchmarking against our peer group or other companies to set 2018 compensation would not have provided meaningful guidance, although we will continue to evaluate our methodologies and views in future years.
The following companies were reviewed to provide an overall backdrop to the Compensation Committee’s decisions:
Ÿ
Alleghany Corporation
Ÿ
Hanover Insurance Group
Ÿ
Arch Capital Group Ltd.
Ÿ
Hiscox Ltd.
Ÿ
Argo Group International Holdings
Ÿ
RenaissanceRe Holdings Ltd.
Ÿ
Aspen Insurance Holdings
Ÿ
Third Point Re Ltd.
Ÿ
AXIS Capital Holdings
Ÿ
White Mountains Insurance Group
Ÿ
Everest Re Group Ltd.
Ÿ
W.R. Berkley

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The peer group selection process focused on three criteria, which was consistent with prior years: (i) industry; (ii) geography (with a significant preference for the use of Bermuda companies); and (iii) size, with reference to: (A) total shareholders’ equity within approximately 0.5 to 2.5 times of our total shareholders’ equity and (B) total assets within approximately 0.5 to 2.5 times of total assets.
Industry. Given the lack of companies directly comparable to Enstar, we have designed our peer group around companies primarily focused on property and casualty (re)insurance, which are the companies against which we compete for talent. Where possible, we look for aspects of other companies that reflect elements similar to operations or strategies we have.
Geography. Publicly traded Bermuda companies (or publicly traded companies domiciled elsewhere with prominent Bermuda operations) are most relevant because these are the companies against which Enstar generally competes for talent, and the Compensation Committee believes market conditions across other Bermuda-based companies are largely what drives executives’ views as to whether they are compensated fairly and competitively. In recent years, we added several companies domiciled in the United States (Alleghany Corporation, Hanover Insurance Group, and W.R. Berkley) to our peer group for diversification given our significant U.S. presence.
Size. Run-off profits are derived primarily from reserve releases rather than revenue, making peer comparison on the basis of revenue a much less relevant metric for us. The Compensation Committee designed our peer group targeting companies with approximately 0.5 to 2.5 times our shareholder equity or total assets (measured using financial data available at the time of consideration), which are metrics we find most relevant for purposes of comparison. The Compensation Committee also considers market capitalization in selecting a peer group.
Base Salaries
We set the base salaries of our CEO and our other executive officers as one element of total compensation, based on the scope of the executives’ responsibilities, taking into account the Compensation Committee's view of competitive market total compensation figures for similar executive officer positions based on publicly available information. Our goal is to provide base salary amounts at levels necessary to achieve our compensation objectives of fairly compensating our executives and retaining and attracting qualified executives who are able to contribute to our long-term success. Given the competitive market for highly qualified employees in our industry and our geographic location, we believe that below-market compensation could, in the long run, jeopardize our ability to retain our executive officers.
Any base salary adjustments are generally based on competitive conditions, market increases in salaries, individual performance, our overall financial results and performance, estimates of the cost of living and changes in job duties and responsibilities. Pursuant to the employment agreements we have with Messrs. Silvester and O'Shea and Ms. Gregory, once increased, such executive officer’s annual salary cannot be decreased without his or her written consent.
The Compensation Committee did not increase base salaries for Messrs. Silvester and O'Shea and Ms. Gregory during 2018. Pursuant to his contract, as a U.K.-based employee, Mr. Silvester is paid in British Pounds, and therefore the Summary Compensation Table indicates an increase to his base salary even though no such increase was made, as a result of the conversion of his salary into our reporting currency of U.S. Dollars.
In connection with his promotion to CFO from Deputy CFO, Mr. Bowker's base salary was increased to $575,000 effective January 1, 2018. In connection with our annual compensation review, Mr. Brockman's base salary was increased by 1.5% to $468,930 effective April 1, 2018.
Annual Incentive Compensation
Operation of 2016-2018 Annual Incentive Compensation Program
Our 2016-2018 Annual Incentive Compensation Program (the "Annual Incentive Plan") rewards performance consistent with our primary corporate objective of increasing our net book value per share over the long term through growth in our net earnings year over year. The Annual Incentive Plan provided for the grant of annual bonus compensation (a "bonus award") to all bonus-eligible employees, including our executive officers, and excluding StarStone and Atrium staff. StarStone and Atrium have different bonus programs, in which our executive officers are not eligible to participate.
Executive Officer 2018 Annual Incentive Plan Targets
In 2018, we continued the use of Company financial and operational performance objectives under our Annual Incentive Plan and established a threshold, target, and maximum annual incentive award payment structure. This change to our program followed an evaluation of the voting results from our 2015 annual general meeting and our

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engagement with shareholders. Our longstanding prior practice was to use a fully discretionary annual incentive award plan as a way of addressing our acquisitive business model, in which our executives are encouraged to pursue new transactions on an opportunistic basis. We often adapt our financial, strategic, and operational plans during the course of the year to pursue these developing opportunities, and our results during early years of integrating new business can be difficult to predict. In moving to the different approach, the Compensation Committee designed a program it believed was better aligned with the expectations of our shareholders and would incentivize our executives to achieve our strategic goals.
The 2018 program operated as follows:
 
 
 
 
 
 
 
 
 
 
 
 
Base Salary ($)
x
Company Financial Performance Objective (%)
+
Base Salary ($)
x
Operational Performance Objective (%)
+/-
Committee Adjustment Amount
=
2018 Bonus Award
Company financial objectives and individual operations performance objectives each comprise half of the executive's bonus potential.
Bonus Potential
The Compensation Committee establishes threshold, target, and maximum bonus potential levels for each executive officer, each of which is expressed as a percentage of base salary. In connection with shifting from a fully discretionary plan to the target-based program in 2016, these levels were initially set taking the historic compensation levels of our executives into consideration to ensure the new program would continue to reward strong performance, as well as motivate and retain our executives. Minor realignment adjustments were made in 2017 for Messrs. Silvester and O'Shea and Ms. Gregory, and no changes were made to the bonus potential levels in 2018.
The table below sets forth each executive's bonus potential, expressed as a percentage of base salary.
Executive
Base Salary
Threshold (% of Base Salary)
Target (% of Base Salary)
Maximum (% of Base Salary)
Dominic Silvester(1)
£
1,848,090

100%
115%
140%
Paul O’Shea
$
1,271,535

100%
150%
180%
Orla Gregory
$
1,122,000

100%
145%
175%
Guy Bowker
$
575,000

85%
100%
115%
Paul Brockman
$
468,930

100%
125%
150%
(1)
Mr. Silvester's annual incentive award was calculated with reference to his annual base salary rate denominated in and paid in British Pounds ("GBP"). The annual incentive award amount paid to Mr. Silvester in GBP was converted to U.S. Dollars for presentation in this proxy statement using the prevailing exchange rate on the date of approval.
Company Financial Objectives
To determine the Company financial objectives, the Compensation Committee reviewed the 2018 business plan with the full Board and the executive officers and put in place a challenging set of financial objectives. The Compensation Committee used three financial metrics:
•
net earnings;
•
growth in fully diluted book value per share; and
•
return on equity.
The Compensation Committee then selected a threshold, target, and maximum objective for each of these metrics based on the Company's business plan, which correspond to each executive’s bonus potential. The financial objectives were set as follows:

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Financial Metric
2017 Actual
2018 Threshold
2018 Target
2018 Maximum
2018 Actual
Weighting
Net Earnings
$311.46
$255.34
$300.40
$345.46
$(162.90)
20%
Growth in Fully Diluted Book Value Per Share
10.8%
9.2%
10.8%
12.4%
(2.0)%
15%
Return on Equity
11.1%
9.1%
10.7%
12.3%
(5.6)%
15%
 
 
 
 
 
Total
50%
In establishing financial objective levels, the Compensation Committee maintained targets relatively in line with 2017 actuals, taking into consideration the 2018 Board-approved business plan and noting that 2017 was a year of record net earnings, and moderately increased the return on equity target. The Compensation Committee also considered the Company's risk appetite and the anticipated market environment. Specifically, the selected financial objective levels reflected the persistent low interest rate environment, regulatory constraints on our capital and investments, the impact of integrating recent transactions on short-term results, as well as the very challenging active underwriting environment. The Compensation Committee established metrics that it believed would be challenging and only achievable with strong performance and precise execution, with maximum levels achievable only with extraordinary performance.
Despite our executives' achievement of many operational objectives as described below, the Company did not achieve the threshold level of performance for any of the financial objectives. The primary reasons for this as described above in the "Executive Summary" section. As a result, the Company Financial Performance Objective component of annual incentive plan awards for 2018 was not paid to any executive officers.
Operational Performance Objectives
In early 2018, the Compensation Committee asked each executive to provide a proposed set of individual operational performance goals to the CEO. The CEO reviewed and discussed these goals with each executive and provided the agreed goals to the Compensation Committee for review, deliberation and revision. The CEO submitted his proposed set of individual goals directly to the Compensation Committee.
In the third quarter of 2018, the Compensation Committee reviewed interim self-appraisals to track each executive's progress. Following year-end, each executive submitted a final self-appraisal of his or her performance versus the goals to the Compensation Committee and the CEO. The Compensation Committee discussed each appraisal with the CEO before making a determination and considered his thoughts and views on overall achievement levels. The Compensation Committee considers achievement of "threshold" level to partially meet operational performance expectations, with "target" level corresponding to meeting expectations, and "maximum" level corresponding to exceptional performance.
Dominic Silvester: Mr. Silvester's operational performance objectives included several strategic and operational objectives as follows: acquire at least the specified level of new non-life run-off loss reserves, including by fostering relationships with new and existing partners; develop and implement enhancements to the Company's investment strategy and asset deployment opportunities; evaluate, recommend and oversee several contemplated strategic transactions; oversee the implementation of a new capital management function; strengthen the leadership team; and continue the development of the Company's succession planning in identified roles.
The Compensation Committee determined that Mr. Silvester partially achieved his collective operational performance objectives, exceeding or meeting his objectives in some areas and not fully achieving them in others.  The Compensation Committee assessed that he exceeded his run-off acquisition objective and met his investment strategy objective. Under Mr. Silvester's leadership, Enstar completed run-off transactions in 2018 involving approximately $3.2 billion of gross loss reserves, our largest year to date in terms of acquired reserves, and Enhanzed Re, a joint venture launched with Allianz and Hillhouse capitalized with $470 million.  Mr. Silvester also oversaw the implementation of a new private equity mandate and the successful completion of several private company investments and other transactions, such as the acquisition of KaylaRe. While many other objectives were met or partially met, the Compensation Committee determined that additional progress was needed. The Compensation Committee also took into consideration the underperformance of StarStone, although it recognized that he significantly strengthened StarStone's leadership in the second half of 2018.
The Compensation Committee reduced Mr. Silvester's formulaic annual incentive plan award amount by 26%, resulting in a total award amount of 29% of his base salary. This determination, which Mr. Silvester recommended, reflects the Compensation Committee's view that the awards for the CEO, President, and COO should be impacted the most by the Company's $162.0 million reported net loss, given their positions as the most senior leaders in the group.

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Paul O'Shea: Mr. O’Shea's operational performance objectives were as follows: deliver the acquisition of at least the specified level of new non-life run-off loss reserves; oversee process advancements within the acquisitions function; oversee the Company's interactions with global regulators and rating agencies; further develop the long-term strategic direction of the Company and complete approved projects aimed at providing accretive returns; oversee specified leadership and strategic objectives in our StarStone segment; and improve leadership development and succession planning within specified functions.
The Compensation Committee determined that Mr. O’Shea partially achieved his collective operational performance objectives, exceeding or meeting his objectives in some areas and not fully achieving them in others. The Compensation Committee assessed that he exceeded his run-off acquisition objective, met his acquisition processes objective; met his regulatory and rating agency objective; partially achieved his strategic transaction objective; and did not sufficiently achieve his StarStone-related operational objective, although the committee recognized that progress was made in many areas. Mr. O'Shea was a primary contributor to our significant acquisitions of new run-off business. He also engaged with several of our key regulators and rating agencies during 2018, which resulted in favorable outcomes, and played a key role in the accretive purchase of KaylaRe and the launch of Enhanzed Re. The Compensation Committee also took into consideration the underperformance of StarStone in determining Mr. O'Shea's 2018 award.
The Compensation Committee reduced Mr. O'Shea's formulaic annual incentive plan award amount by 28%, resulting in a total award amount of 38% of his base salary.
Orla Gregory: Ms. Gregory's operational performance objectives were as follows: oversee enhancements to the Company's risk management function; drive specified organizational efficiency projects; re-define IT strategy under new leadership; support the CEO and President in completing strategic transactions and opportunities aimed at increasing long-term value; oversee our large-scale effort to optimize our IT infrastructure to support future growth; and implement a new capital management function.
The Compensation Committee determined that Ms. Gregory partially achieved her collective operational performance objectives, meeting several and partially achieving others. The Compensation Committee assessed that she met her risk management, organizational efficiencies and IT strategy objectives, and partially achieved her strategic transaction, IT infrastructure and capital management objectives. Ms. Gregory drove significant enhancements in the Company's risk management function, advancing our capital modeling, investment and other risk analyses and improving reporting. She managed organizational efficiency projects and successfully oversaw the implementation of a new IT strategy framework. She has been instrumental in the implementation of our transformational IT optimization project, which went live during 2018 although it experienced some delays. The Compensation Committee also took into consideration the underperformance of StarStone in determining Ms. Gregory's 2018 award.
The Compensation Committee reduced Ms. Gregory formulaic annual incentive plan award amount by 41%, resulting in a total award amount of 36% of her base salary.
Guy Bowker: Mr. Bowker's operational performance objectives were as follows: provide executive support and leadership to key functions; manage strategic rating agency and regulatory interactions; oversee the development of the finance operations function and its management reporting; oversee the finance portion of our IT infrastructure optimization project; lead the provision of capital management information and design and develop greater organizational capabilities in this area; implement specified organizational efficiency initiatives; and further develop the finance function.
The Compensation Committee determined that Mr. Bowker achieved his operational performance objectives collectively at his target level. Mr. Bowker led several significant financing and treasury initiatives that improved our capital position during 2018 and oversaw finance support for the M&A function as the Company acquired $3.2 billion of gross loss reserves in run-off transactions. He also successfully managed interactions with the Bermuda Monetary Authority (our Group Supervisor) and led rating agency interactions that resulted in improvements to our credit ratings. In addition, Mr. Bowker drove significant enhancements to our capital planning and budgeting processes, and oversaw the successful completion of the first phase of the finance portion of our IT infrastructure optimization project. He also successfully led capital management work and implemented enhanced capital modeling and capital forecasting capabilities. During the year, Mr. Bowker strengthened the finance function and improved its efficiency.
The Compensation Committee increased Mr. Bowker's formulaic annual incentive plan award amount by 102%, resulting in a total award amount approximately equal to his base salary. The Compensation Committee determined that this adjustment to Mr. Bowker's annual incentive award was appropriate in recognition of his success leading the completion of $2.2 billion of financing initiatives and capital markets transactions, notable improvements in the strength of the finance function, and additional responsibilities taken on during the year.

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Paul Brockman: Mr. Brockman's operational performance objectives were as follows: deliver on challenging U.S. technical business plan; execute our acquisition strategy in the U.S.; support U.S. operational and acquisition integration initiatives; manage U.S. regulatory interactions; oversee the U.S. claims portion of our IT infrastructure optimization project; implement specified organizational efficiency initiatives; and develop U.S. leadership team succession planning.
The Compensation Committee determined that Mr. Brockman achieved his operational performance objectives at his target level. Mr. Brockman led the U.S. business to achieve its challenging technical run-off plan, which contributed significantly to our reserve savings for the year, and which the Committee weighted heavily. He was very involved in acquisition sourcing and provided critical support to reviewing and integrating several new deals, including with respect to several loss portfolio transfers and our acquisition of Maiden Reinsurance North America. Mr. Brockman continued to strengthen our U.S. regulatory relationships, which are critical to our ability to operate effectively and grow, and was actively involved in landmark regulatory and legislative initiatives. The U.S. claims IT infrastructure optimization project was completed, and he implemented several important organizational efficiency initiatives.
The Compensation Committee increased Mr. Brockman's formulaic annual incentive plan award amount by 34%, resulting in a total award amount of 84% of his base salary. The Compensation Committee determined that this adjustment to Mr. Brockman's award was appropriate given impressive U.S. technical plan results and the overall success of the U.S. business, his vital support of acquisition sourcing and integration and his continued strong leadership as U.S. CEO.
Committee Adjustment Amount
The Committee Adjustment Amount allows for a positive or negative discretionary adjustment of up to 10% on the formulaic bonus outcome described above. Any Committee Adjustment Amount is applied based on the Compensation Committee's judgment of the executive’s overall performance, including for exceptional individual or team achievements.
The Committee Adjustment Amount set forth in the 2018 Bonus Calculations table reflect the views of the Compensation Committee summarized above. 2018 was a difficult year in which to apply a strict formula and stay within the 10% limit because the Company reported a net loss that was driven primarily by the accounting treatment for unrealized investment losses that occurred due to market forces outside of management's control and losses in the StarStone segment. The Committee determined that these factors masked strong underlying performance of our core non-life run-off business, which had a successful year in terms of claims reserve savings, and the notable acquisitions of record levels of new run-off business.
Mr. Silvester recommended, and the Committee agreed, that awards for himself, Mr. O'Shea, and Ms. Gregory should be reduced from the formula in excess of 10%, given their greater involvement in overseeing strategic initiatives and StarStone, while awards for Messrs. Bowker and Brockman should be increased. While the Committee prefers to stay within the formula of the annual incentive plan, it determined these adjustments were appropriate, noting that the aggregate negative discretion of over $700,000 significantly outweighed the aggregate positive discretion of $392,250.
2018 Bonus Calculations
Executive
Base Salary
Company Financial Objective Achieved
Corresponding % of Base Salary
Individual Operational Performance Objective Achieved
Corresponding % of Base Salary
Committee Adjustment Amount (% of formulaic bonus)
2018 Annual Incentive Plan and Bonus Award
Dominic Silvester(1)
CEO
£1,848,090
—
—%
Partial
39%
(26)%
£531,326
Paul O’Shea
President
$1,271,535
—
—%
Partial
52%
(28)%
$476,826
Orla Gregory
COO
$1,122,000
—
—%
Partial
61%
(41)%
$406,725
Guy Bowker
CFO
$575,000
—
—%
Target
50%
102%
$579,750
Paul Brockman
CEO, Enstar (US), Inc.
$468,930
—
—%
Target
63%
34%
$393,081
(1)
Mr. Silvester's annual incentive award was calculated with reference to his GBP base salary and paid in GBP. Converted to U.S. Dollars using the prevailing exchange rate on the date of approval, Mr. Silvester's annual incentive award amounted to $696,604, as reported below in the Summary Compensation Table.

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2019 Proxy Statement

Long-Term Incentive Compensation
We established the 2016 Equity Incentive Plan (the "Equity Plan") to provide our employees with long-term equity-based incentive compensation, which we believe furthers our objective of aligning the interests of management and the other plan participants with those of our shareholders. The Equity Plan was approved by a 99% vote of our shareholders at our 2016 annual general meeting and is administered by the Compensation Committee. In considering whether to make long-term equity-based compensatory awards and how to design them, the Compensation Committee takes into account shareholder dilution and burn rate issues and related concerns.
Following the adoption of the Equity Plan, the Compensation Committee worked with our independent compensation consultant to develop a long-term incentive program for senior management based on principles of equity compensation it believes are aligned with shareholder expectations and best practice. The awards included a combination of three-year cliff-vesting performance stock unit awards ("PSUs") tied to growth in fully diluted book value per share ("FDBVPS") and three-year tranche-vesting restricted stock unit awards ("RSUs"), with the ratio of PSUs to RSUs increasing with relative levels of seniority. In 2017, the Compensation Committee worked with our independent compensation consultant to make long term incentive awards to our CEO, President and COO using the using the framework of the senior management program.
Equity Plan Snapshot
What the Plan DOES
What the Plan DOES NOT DO
þ
Shareholder approval is required to issue additional shares
ý
No liberal share recycling
þ
Requires 12-month minimum vesting period for options/SARs (with 5% carve out pool)
ý
No evergreen renewal provision
þ
Applies annual award limits for employees and directors
ý
No granting of reload options
þ
Awards under plan are subject to our Clawback Policy
ý
No excise tax gross-up provision
þ
Pool was constituted solely of the shares that remained under the expired 2006 Equity Plan
ý
No liberal Change in Control definition
þ
Performance-based awards vest on a pro-rata basis at target level upon a Change in Control unless the committee determines otherwise
ý
No single-trigger acceleration of awards upon a Change in Control if acquirer assumes the award or substitutes a new award
þ
All stock options and SARs must have an exercise price or base price equal to or greater than the fair market value of the underlying shares on the grant date
ý
No repricing or cash buy-out of underwater options and SARs without shareholder approval
Equity Awards
No new equity awards were made to Messrs. Silvester and O'Shea and Ms. Gregory during 2018. In 2017, they each received long-term incentive awards consisting of 75% PSUs and 25% RSUs that are intended to cover a three-year period. The PSUs for Messrs. Silvester and O'Shea and Ms. Gregory vest according to the performance targets following the performance period from January 1, 2017 to December 31, 2019 (set forth in the table below). Due to the negative impact of our 2018 financial results, we currently carry the 3-year 2017 PSU awards granted to our CEO, President and COO at "threshold" value based on our current expectation that these awards will vest at or below the “threshold” level of achievement, which would result in either significantly diminished or zero payout upon vesting. “Threshold” represents 50% of the original number of PSUs granted.
Growth in 3-Year FDBVPS
PSU Vesting as a Percentage of Target(1)
Less than 30.3% (Below Threshold)
—%
30.3% (Threshold)
50%
35.7% (Target)
100%
41% or greater (Maximum)
150%
(1)
Actual payout levels between threshold and target and target and maximum is determined by straight-line interpolation.


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2019 Proxy Statement

Messrs. Bowker and Brockman received grants of PSUs under our senior management long-term equity incentive program in early 2018 in the amounts set forth in the Grants of Plan-Based Awards Table. These awards were intended to accompany RSUs granted in late 2017, such that the total award comprised 65% PSUs and 35% RSUs. Unlike the current treatment for Messrs. Silvester and O'Shea and Ms. Gregory, Messrs. Bowker and Brockman are considered eligible for annual long-term equity incentive awards, and the amounts of such awards are subject to the Compensation Committee's determination each year.
In addition, Messrs. Bowker and Brockman received grants of 65% PSUs and 35% RSUs under our senior management program in early 2019. The performance targets applicable to Messrs. Bowker and Brockman's outstanding PSUs relate to succeeding three-year performance periods measuring growth in three-year fully diluted book value per share from the year of grant.
Alignment of Pay and Performance
Our executive compensation program links compensation to Company and individual performance over both the short- and long-term.
What We Reward:
 
How We Link Pay to Performance:
 
How We Pay:
Long-term performance over a 3-year period in our LTI program
Strong financial and operational performance, as measured against Board-approved plan in our Annual Incentive Program
Achievement of individual strategic goals
è
Significant allocation of executive compensation is to PSU awards that vest according to level of financial results
Annual Incentive Plan payments are tied in large part to achievement of net earnings, growth in FDBVPS, and return on equity
Annual Incentive Plan drives accountability for executing individual strategic objectives
è
CEO Reported Pay

Reduced vs. 2017, primarily due to the 2017 reflection of the grant date fair value of an equity award intended to cover a 3-year period and a significantly reduced annual incentive award for 2018.

Other NEO Reported Pay

Collectively decreased vs. 2017, primarily due to the 2017 grant date fair value of equity awards granted to the President and COO intended to cover a 3-year period.
Other Benefits and Perquisites
We provide certain additional benefits in furtherance of our objective of retaining and attracting key talent and pursuant to contractual provisions. In 2018, our executive officers participated in the same group insurance and employee benefit plans, including long-term disability insurance, life insurance, and medical and dental benefits on the same basis as our other salaried employees, and Mr. Silvester received certain additional expense reimbursements for non-plan medical and dental items. We pay the employee’s share of Bermudian government payroll and social insurance taxes for all of our Bermuda employees, including our executive officers, which we believe is common practice at other Bermuda-based public companies. Our executive officers also receive payment in lieu of a retirement benefit contribution, as described below in the "Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table" under "Retirement and Other Benefits," and Mr. Brockman participates in our U.S. 401(k) plan, which has matching contributions.
Executive Employment Agreements
Employment contracts are required in most jurisdictions in which our NEOs are based. During 2017, the Compensation Committee negotiated new employment agreements with Messrs. Silvester and O'Shea and Ms. Gregory, as their respective contracts were due to expire at the end of 2017 and the Board determined it was critical to retain these executives for additional terms. The Compensation Committee also approved Mr. Bowker's employment contract, which was entered into on December 28, 2017 and took effect January 1, 2018. We entered into an employment agreement with Mr. Brockman effective January 8, 2018. See "Executive Compensation Tables - Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table - Employment Agreements with Executive Officers" below for a summary of the material terms of these employment agreements.
Post-Termination Payments
Our employment agreements with our executive officers each provide for certain benefits in the event of a change in control followed by termination of the executive’s employment for specified reasons (referred to as a "double trigger"), including a cash payment, accelerated vesting of equity awards, family medical benefits, and, in certain circumstances,

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payment of annual incentive bonus. We believe these benefits are common features in many of our peers’ compensation programs. See “Executive Compensation Tables - Narrative Disclosure to Summary Compensation Table and Grants of Plan Based Awards Table - Employment Agreements with Executive Officers" below for a summary of these employment agreements. The terms of the employment agreements reflect arm’s-length negotiations between us and each executive officer.
Separately from our employment agreements and equally applicable to any participant, our Equity Plan only provides for plan participants to receive accelerated vesting upon a change in control if the acquirer does not assume or convert the awards, or substitute new awards. In the case of performance-based awards granted under the Equity Plan, if the acquirer does not assume, convert, or substitute awards, absent a Compensation Committee determination otherwise, only a pro-rata portion of the target opportunity for the performance period would accelerate upon a change in control, based on the portion of the performance period that has been completed.
Clawback of Incentive Compensation
Our Clawback Policy (the "Clawback Policy") applies to all cash and equity incentive awards granted after its adoption. The Clawback Policy allows the Board of Directors or the Compensation Committee to recoup or "clawback" incentive compensation if an employee: (i) engages in misconduct pertaining to a financial reporting requirement under the federal securities laws that requires a restatement to correct an error; (ii) receives incentive compensation based on inaccurate financial or operating measure that when corrected causes significant harm to the Company; (iii) engages in any fraud, theft, misappropriation, embezzlement or dishonesty to the detriment of our financial results; or (iv) engages in conduct that is not in good faith and disrupts, damages, impairs, or interferes with our business, reputation, or employees.
In addition, our Annual Incentive Plan works in conjunction with our Clawback Policy in that it allows the Compensation Committee to cancel an award if the program participant has engaged in conduct or acts determined to be materially injurious, detrimental or prejudicial to the Company's interest, and allows us to recoup any amount in excess of what the participant should have received under the terms of the award for any reason, including financial restatement, mistake in calculations or other administrative error. Awards made under our Equity Plan are also subject to the Clawback Policy. In addition to the policy, our equity plan provides that the Compensation Committee has the authority to require disgorgement of any profit, gain or other benefit received in respect of restricted shares, options and stock appreciation rights for a period of up to 12 months prior to the grantee’s termination for cause.
Once final rules are adopted regarding clawback requirements under the Dodd-Frank Act, we will consider and adopt any additional responsive policies required. As a publicly traded company, the mandates of the Sarbanes-Oxley Act requiring clawback of compensation under specified circumstances also apply to us.

Other Matters
Hedging Prohibition
Under our Code of Conduct, our employees, officers, and directors are prohibited from engaging in any hedging or monetization transactions involving our securities, such as zero-cost collars and forward sale contracts, and are also prohibited from trading in derivatives in our securities, such as exchange-traded put or call options and forward transactions.
Share Ownership Guidelines
Our Share Ownership Guidelines require our executive officers and directors to achieve and maintain ownership of our ordinary shares at the levels specified in the table below within five years of becoming subject to the guidelines. An individual may not sell or otherwise dispose of Company shares (including during the five year accumulation period) until he or she has met his or her minimum ownership requirement except that shares may be withheld upon vesting to satisfy tax obligations.

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Covered Person
Ownership Requirement
CEO
6x base salary
President
3x base salary
COO
3x base salary
CFO & Other Executive Officers
1x base salary
Non-Employee Directors
3x annual cash retainer
Individuals may satisfy their ownership requirements with: (i) shares owned directly or indirectly (including any shares held in retirement account or deferred compensation plan maintained by the Company), (ii) time vested restricted stock, RSUs or phantom stock, (iii) performance shares or PSUs (counted at target), or (iv) share units held in non-employee director deferred compensation plan. Shares are valued based on the closing price of the last completed calendar year. All covered persons are currently in compliance with our Share Ownership Guidelines. The Compensation Committee elected to use a 1x multiplier for the CFO and our other executive officers because these executives were each recently appointed to their officer roles; it expects to reassess this figure in future years as the officers serve additional time in these roles.
Tax and Accounting Treatment of Compensation
Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount of compensation that we may deduct from our U.S. source income in any one year with respect to certain of our executive officers. This limitation has not historically impacted our decisions regarding executive compensation, including because nearly all of our executive officers are based outside of the U.S.
We account for equity compensation paid to our employees based on the guidance of the Share-Based Payment topic of the Financial Accounting Standards Board Accounting Standards Codification, which requires us to estimate and record an expense for each award of equity compensation over the service period of the award. Accounting rules also require us to record cash compensation as an expense at the time the obligation is accrued.
Compensation Risk Assessment
As part of our risk management practices, the Compensation Committee reviews and considers risk implications of and incentives created by our executive compensation program and our compensation policies and practices for the Company as a whole. At the Compensation Committee’s direction, representatives from our risk management and legal departments conducted a risk assessment of our compensation policies and practices for executives and all employees, which was discussed and reviewed by the Compensation Committee.
The review analyzes compensation governance processes, situations where compensation programs may have the potential to raise material risks to the Company, internal controls that mitigate the risk of incentive compensation having an adverse effect, and program elements that further mitigate these risks.
Through this review, the Compensation Committee has concluded that our compensation program does not create risks that are reasonably likely to have a material adverse effect on us.

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2019 Proxy Statement

Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with our management. Based on its review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2018.
COMPENSATION COMMITTEE
B. Frederick Becker
Sandra L. Boss
Robert J. Campbell
Poul A. Winslow
 


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2019 Proxy Statement

EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table sets forth compensation earned in 2018, 2017 and 2016 by our Chief Executive Officer, Chief Financial Officer, President, Chief Operating Officer, and Chief Executive Officer of Enstar (US), Inc. These individuals are referred to in this proxy statement as the "executive officers." The following table only includes information for the year or years in which such individuals qualified as named executive officers under SEC rules.
Name and Principal Position
Year
Salary(1)
Bonus
Stock Awards(2)
Non-Equity Plan Incentive Compensation(3)
All Other Compensation
Total
Dominic Silvester(4)
2018
$
2,470,126

$


$
—

$
696,604

$
277,858

$
3,444,588

Chief Executive Officer
2017
$
2,366,424

$


$
11,070,000

$
2,899,926

$
534,740

$
16,871,090

2016
$
2,263,450

$


$


$
2,800,000

$
882,939

$
5,946,389

 
 
 
 
 
 
 
 
Guy Bowker(5)
2018
$
575,000

$
263,500

$
373,639

$
316,250

$
261,880

$
1,790,269

Chief Financial Officer
2017
$
468,750

$


$
309,828

$
575,000

$
105,334

$
1,458,912

 
 
 
 
 
 
 
 
Paul O’Shea(6)
2018
$
1,271,535

$


$
—

$
476,826

$
295,297

$
2,043,658

President
2017
$
1,265,302

$


$
6,918,750

$
1,907,303

$
197,642

$
10,288,997

2016
$
1,240,492

$


$
—

$
2,000,000

$
169,832

$
3,410,324

 
 
 
 
 
 
 
 
Orla Gregory(7)
2018
$
1,122,000

$


$
—

$
406,725

$
290,570

$
1,819,295

Chief Operating Officer
2017
$
1,116,500

$


$
4,612,500

$
1,626,900

$
181,284

$
7,537,184

 
2016
$
1,050,000

$
199,250

$
—

$
1,300,750

$
150,783

$
2,700,783

 
 
 
 
 
 
 
 
Paul Brockman(8)
2018
$
467,198

$
70,692

$
225,062

$
322,389

$
18,500

$
1,103,841

Chief Executive Officer, Enstar (US), Inc
 
 
 
 
 
 
 
(1)
All base salary amounts are presented in United States Dollars ("USD"). The change in Mr. Silvester's salary from 2017 to 2018 was the result of exchange rate fluctuation between British Pounds ("GBP") and USD; his salary was not increased in 2018. Mr. Silvester's nominal base salary is £1,848,090. Amounts paid to Mr. Silvester in GBP have been converted to USD for presentation in this Summary Compensation Table as described below in footnote 4.
(2)
The amount shown in the Stock Awards column represents the aggregate grant date fair value of time-vested restricted shares, RSUs, and PSUs granted to our executive officers in the applicable fiscal year, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. Amounts reported in the table in respect of PSUs granted in 2018 reflect a "target" level of performance. If the maximum level of performance were to be achieved, then the number of shares that would be received in respect of such 2018 PSUs would be 150% of the number of PSUs granted, and the grant date value of such awards would have been as follows: Guy Bowker - $560,458 and Paul Brockman - $337,593. Whether the recipients of PSUs will receive any shares in respect of PSU awards depends on whether Enstar achieves certain levels of growth in fully diluted book value per share. Due to the negative impact of our 2018 financial results, we currently carry the 3-year 2017 PSU awards granted to our CEO, President and COO at "threshold" value based on our current expectation that these awards will vest at or below the “threshold” level of achievement, which would result in either significantly diminished or zero payout upon vesting. “Threshold” represents 50% of the original number of PSUs granted.
(3)
The amounts reported reflect the actual performance-based annual incentive bonuses paid to each named executive officer for the applicable fiscal year pursuant to the Annual Incentive Plan. The bonuses paid pursuant to the Annual Incentive Plan are described above in "Compensation Discussion and Analysis - Annual Incentive Compensation.”
(4)
All Other Compensation for 2018 represents: (a) perquisites valued at aggregate incremental cost to Enstar, comprising additional medical and dental expense reimbursement pursuant to employment agreement ($27,401) and accommodation expense reimbursement and (b) other compensation consisting of a payment in respect of retirement benefit contribution ($247,013). The retirement benefit contribution is a payment we provide to all of our U.K.-based employees. Pursuant to his employment agreement, we began compensating Mr. Silvester in GBP in April 2017, and amounts paid to him in GBP have been converted to USD at the then-prevailing exchange rate on the relevant payroll date or, in the case of annual incentive awards for 2018, on the date of approval by the Compensation Committee.
(5)
All Other Compensation for 2018 represents other compensation, including: (i) cash payment in respect of retirement benefit contribution ($57,500) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($204,380). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees.
(6)
All Other Compensation for 2018 represents other compensation, including: (i) cash payment in respect of retirement benefit contribution ($127,154) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($168,143). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees.
(7)
All Other Compensation for 2018 represents other compensation, including: (i) cash payment in respect of retirement benefit contribution ($112,200) and (ii) payment of the employee’s share of Bermudian payroll and social insurance tax ($178,370). Both the retirement benefit contribution and the payroll and social insurance tax payment are payments we provide to all of our Bermuda-based employees.
(8)
All Other Compensation for 2018 represents other compensation, consisting of a Company matching contribution under our 401(k) plan ($18,500). This Company matching contribution under our 401(k) plan is offered to all of our U.S.-based employees.

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Grants of Plan-Based Awards in 2018
Name
Award Type
Approval Date
Grant Date
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)
Estimated Future Payouts Under Equity Incentive Plan Awards(2)
Grant date fair value of Stock and Option Awards(3)
 
 
 
 
Threshold
Target
Maximum
Threshold
Target
Maximum
 
Dominic Silvester
AIP
n/a
n/a
$2,122,381
$2,711,932
$3,631,631















Guy Bowker
AIP
n/a
n/a
$439,875
$575,000
$727,375





PSUs
11/6/2017
1/2/2018



936
1,871
2,807
$373,639











Paul O'Shea
AIP
n/a
5/10/2017
$1,144,382
$1,907,303
$2,517,639