The Securities and Exchange Commission has settled with former Argo Group chief executive officer and president Mark Watson III over his role in the firm’s failure to disclose more than $5.3 million worth of perks and personal benefits.

The SEC said Watson has agreed to pay a fine of $450,000.

The SEC announcement on Watson comes six months after Argo itself paid the SEC $900,000 for the failures to disclose Watson’s full benefits and compensation.

In its proxy statements for 2014 through 2018, Argo did not disclose that it paid Watson more than $5.3 million in perquisites and personal benefits.

Watson, who became CEO and president in 2000, resigned in November, 2019, and agreed to reimburse Argo for certain personal expenses.

The SEC said that in disclosing executive compensation paid for 2014 through 2018, Argo reported a total of approximately $1.22 million worth of perquisites and personal benefits provided to Watson, with an annual average of approximately $244,000. These consisted of 401(k) and retirement contributions, the imputed value of insurance coverage, supplemental executive retirement plan benefits, housing and home leave allowances, medical premiums and financial planning services.

However, these same statements failed to disclose more than $5.3 million worth of additional perks provided to Watson, understating his compensation by an annual average of over $1 million, or 400%. Items that Argo paid for on Watson’s behalf but that were not disclosed include use of corporate aircraft, rent and other housing costs, use of corporate automobiles, helicopter trips, other travel costs, use of a car service by family members, club and concierge service memberships, tickets and transportation to sporting, fashion or other entertainment events, services provided by Argo employees, and watercraft-related costs.

Watson used these deficient executive compensation disclosures in soliciting proxies for his election as a director.

In February 2019, an Argo shareholder — Voce Capital Management — questioned Watson’s use of Argo assets, including undisclosed personal usage of corporate aircraft. A few months later, Argo filed a proxy statement that failed to disclose over $1 million worth of perquisites provided to Watson in 2018, including over $230,000 related to Watson’s use of corporate aircraft.

Voce Capital owns 5.8 percent of Argo shares, making it the company’s fourth-largest shareholder.

According to the SEC, from 2014 through 2018, Argo incorrectly recorded payments for the benefit of Watson as business expenses, and not compensation, based in part on Watson’s requests for expense reimbursement and approval of certain company payments to vendors. As a result, Argo’s books, records, and accounts did not, in reasonable detail, accurately and fairly reflect its disposition of assets.

In June 2019, Argo launched an internal investigation after receipt of a subpoena from the SEC. In late November 2019, when Watson resigned, he agreed to reimburse Argo for certain personal expenses.

According to the SEC, Watson violated federal securities laws requiring disclosure of the total value of all perks and other personal benefits and prohibiting the use of proxy statements containing materially false or misleading statements or omissions, as well as other securities laws.

Argo has made peace with Voce Capital Management by changing its board membership in order to beef up corporate governance. In January 2020, Argo announced it had entered into a cooperation agreement with Voce Capital Management to make changes to the composition of Argo’s board of directors, by adding three new directors.

*This story ran previously in our sister publication Insurance Journal.