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Employee Share-Based Incentive Compensation Plans | 12 Months Ended
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Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Employee Share-Based Incentive Compensation Plans | Employee Share-Based Incentive Compensation Plans White Mountains’s share-based incentive compensation plans are designed to incentivize key employees and service providers to maximize shareholder value over long periods of time. White Mountains believes that this is best pursued by utilizing a pay-for-performance program that closely aligns the financial interests of management with those of its shareholders. White Mountains accomplishes this by emphasizing highly variable long-term compensation that is contingent on performance over a number of years rather than entitlements. White Mountains expenses all its share-based compensation. As a result, White Mountains’s calculation of its owners’ returns includes the expense of all outstanding share-based compensation awards. Incentive Compensation Plans White Mountains’s Long-Term Incentive Plan (the “WTM Incentive Plan”) provides for grants of various types of share-based and non-share-based incentive awards to key employees and service providers of White Mountains. The WTM Incentive Plan was adopted by the Board, was approved by the Company’s sole shareholder in 1985 and was subsequently amended by its shareholders in 1995, 2001, 2003, 2005, 2010 and 2013. Share-based incentive awards that may be granted under the plan include performance shares, restricted shares, incentive stock options and non-qualified stock options (“Non-Qualified Options”). Performance shares are conditional grants of a specified maximum number of common shares or an equivalent amount of cash. Awards generally vest at the end of a three-year period, are subject to the attainment of pre-specified performance goals, and are valued based on the market value of common shares at the time awards are paid. Performance shares earned under the WTM Incentive Plan are typically paid in cash but may be paid in common shares. Compensation expense is recognized on a pro rata basis over the vesting period of the awards. The OneBeacon Long-Term Incentive Plan (the “OneBeacon Incentive Plan”) provides for grants to key employees of OneBeacon various types of share-based incentive awards, including performance shares, restricted shares, restricted stock units and Non-Qualified Options. White Mountains offers certain types of share-based compensation under qualified retirement plans. The defined contribution plan of OneBeacon (the “401(k) Plan”) offers its U.S.-domiciled participants the ability to invest their balances in several different investment options, including the Company’s or OneBeacon’s common shares. OneBeacon’s KSOP is an employer-funded benefit plan that provides all of its participants with an annual base contribution in common shares equal to 3% of their salary, up to the applicable Social Security wage base ($118,500 for 2015). Additionally, those participants not otherwise eligible to receive certain other OneBeacon benefits can earn a variable contribution of up to 6% of their salary, subject to the applicable IRS annual covered compensation limits ($265,000 for 2015) and contingent upon OneBeacon’s performance. Performance Shares Performance shares are designed to reward company-wide performance. The level of payout ranges from zero to two times the number of shares initially granted, depending on White Mountains’s financial performance. Performance shares become payable at the conclusion of a performance cycle (typically three years) if pre-defined financial targets are met. The principal performance measure used for determining performance share payouts is after-tax growth in White Mountains’s intrinsic business value per share. The Compensation Committee historically has considered the growth in intrinsic business value per share to be based equally on the growth of economic value per share and growth in adjusted book value per share, both inclusive of dividends. Economic value is calculated by adjusting the GAAP book value per share for differences between the GAAP carrying values of certain assets and liabilities and White Mountains’s estimate of their underlying economic values (for example, the time value discount in loss reserves). The following summarizes performance share activity for the years ended December 31, 2015, 2014 and 2013 for performance shares granted under the WTM Incentive Plan and the WTM Phantom Share Plan:
|  | Year Ended December 31,
|  | 2015 |  | 2014 |  | 2013
$ in millions |  | Target Performance Shares Outstanding |  | Accrued Expense |  | Target Performance Shares Outstanding |  | Accrued Expense |  | Target Performance Shares Outstanding |  | Accrued Expense
Beginning of period |  | 113,198 |  |  | $ | 44.4 |  |  | 108,605 |  |  | $ | 54.9 |  |  | 108,065 |  |  | $ | 26.5 |
Shares paid or expired(1) |  | (42,958 | ) |  | (30.8 | ) |  | (33,730 | ) |  | (24.5 | ) |  | (43,100 | ) |  | (10.1 | )
New grants |  | 29,828 |  |  | — |  |  | 41,580 |  |  | — |  |  | 43,660 |  |  | — |
Assumed forfeitures and cancellations(2)(3) |  | (3,857 | ) |  | (.3 | ) |  | (3,257 | ) |  | (.1 | ) |  | (20 | ) |  | (.6 | )
Expense recognized |  | — |  |  | 44.4 |  |  | — |  |  | 14.1 |  |  | — |  |  | 39.1 |
End of period (4) |  | 96,211 |  |  | $ | 57.7 |  |  | 113,198 |  |  | $ | 44.4 |  |  | 108,605 |  |  | $ | 54.9 |
(1) | WTM performance share payments in 2015 for the 2012-2014 performance cycle ranged from 91% to 145.5% of target. WTM performance shares payments in 2014 for the 2011-2013 performance cycle ranged from 88% to 131.5% of target. WTM performance shares payments in 2013 for the 2010-2012 performance cycle ranged from 33% to 98% of target.
(2) | On November 19, 2014, the Compensation Committee canceled 3,040 WTM performance shares for the 2014-2016 performance cycle and issued the same number of WTM restricted shares.
(3) | Amounts include changes in assumed forfeitures, as required under GAAP.
(4) | Outstanding performance share awards as of December 31, 2015, 2014 and 2013 exclude 7,997, 10,351 and 10,615 performance shares awards, net of assumed forfeitures, granted to employees of Sirius Group, which is accounted for as discontinued operation.
For the 2011-2013 performance cycle, the Company issued common shares for 3,570 performance shares earned and all other performance shares earned were settled in cash. For the 2012-2014 and 2010-2012 performance cycles, all performance shares earned were settled in cash. If the outstanding WTM performance shares had vested on December 31, 2015, the total additional compensation cost to be recognized would have been $22.5 million, based on accrual factors as of December 31, 2015 (common share price and payout assumptions). Performance shares granted under the WTM Incentive Plan The following table summarizes performance shares outstanding and accrued expense for performance shares awarded under the WTM Incentive Plan as of December 31, 2015 for each performance cycle:
$ in millions |  | Target WTM Performance Shares Outstanding |  | Accrued Expense
Performance cycle: |  |  |  |  |  |
2015 – 2017 |  | 29,828 |  |  | $ | 8.3 |
2014 – 2016 |  | 32,557 |  |  | 12.9 |
2013 – 2015 |  | 36,293 |  |  | 38.0 |
Sub-total |  | 98,678 |  |  | 59.2 |
Assumed forfeitures |  | (2,467 | ) |  | (1.5 | )
Total at December 31, 2015 |  | 96,211 |  |  | $ | 57.7 |
The targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan to non-investment personnel for the 2015-2017 performance cycles is an 8% growth in intrinsic business value per share. Growth of 2% or less would result in no payout and growth of 14% or more would result in a payout of 200%. The targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan to non-investment personnel for the 2014-2016 performance cycles is a 9% growth in intrinsic business value per share. Growth of 3% or less would result in no payout and growth of 15% or more would result in a payout of 200%. The targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan to non-investment personnel for the 2013-2015 performance cycles is an 8% growth in intrinsic business value per share. Growth of 2% or less would result in no payout and growth of 14% or more would result in a payout of 200%. For investment personnel, the targeted performance goal for full payment of outstanding performance shares granted under the WTM Incentive Plan is based one-third on growth in intrinsic business value per share (as described above), one-third on achieving a total return on invested assets as measured against metrics based on U.S. Treasury Note returns and one-third on achieving a total return on invested assets as measured against metrics based on the Barclays U.S. Intermediate Aggregate Index returns. Restricted Shares The following outlines the unrecognized compensation cost associated with the outstanding restricted share awards under the WTM Incentive Plan for the years ended December 31, 2015, 2014 and 2013:
|  | Year Ended December 31,
|  | 2015 |  | 2014 |  | 2013
$ in millions |  | Restricted Shares |  | Unamortized Issue Date Fair Value |  | Restricted Shares |  | Unamortized Issue Date Fair Value |  | Restricted Shares |  | Unamortized Issue Date Fair Value
Non-vested, |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period |  | 83,314 |  |  | $ | 14.3 |  |  | 94,130 |  |  | $ | 17.0 |  |  | 69,910 |  |  | $ | 16.8 |
Issued (1) |  | 23,640 |  |  | 15.7 |  |  | 23,440 |  |  | 13.1 |  |  | 25,720 |  |  | 14.4 |
Vested |  | (36,279 | ) |  | — |  |  | (33,205 | ) |  | — |  |  | (1,500 | ) |  | — |
Forfeited |  | — |  |  | — |  |  | (1,051 | ) |  | (.5 | ) |  | — |  |  | — |
Expense recognized |  | — |  |  | (14.3 | ) |  | — |  |  | (15.3 | ) |  | — |  |  | (14.2 | )
End of period (2) |  | 70,675 |  |  | $ | 15.7 |  |  | 83,314 |  |  | $ | 14.3 |  |  | 94,130 |  |  | $ | 17.0 |
(1) | On November 19, 2014, the Compensation Committee canceled 3,040 WTM performance shares for the 2014-2016 performance cycle and issued the same number of WTM restricted shares.
(2) | Outstanding restricted share awards as of December 31, 2015, 2014 and 2013 include 3,571, 3,265, and 3,789 restricted shares issued to employees of Sirius Group, which is accounted for as discontinued operations.
During 2015, White Mountains issued 23,640 restricted shares that vest on January 1, 2018. During 2014, White Mountains issued 23,440 restricted shares that vest on January 1, 2017. During 2013, White Mountains issued 25,720 restricted shares that vest on January 1, 2016. The unrecognized compensation cost as of December 31, 2015 is expected to be recognized ratably over the remaining vesting periods. Stock Options Non-Qualified Options The Company’s Chairman and CEO holds 125,000 Non-Qualified Options, which are exercisable at $742 per common share and expire on January 20, 2017. The Non-Qualified Options have been fully amortized. Share-Based Compensation Based on OneBeacon Ltd. Common Shares OneBeacon Performance Shares The following summarizes activity for the years ended December 31, 2015, 2014 and 2013 for OneBeacon performance shares granted under the OneBeacon Incentive Plan:
|  | Year Ended December 31,
|  | 2015 |  | 2014 |  | 2013
$ in millions |  | Target Performance Shares Outstanding |  | Accrued Expense |  | Target Performance Shares Outstanding |  | Accrued Expense |  | Target Performance Shares Outstanding |  | Accrued Expense
Beginning of period |  | 517,470 |  |  | $ | 3.4 |  |  | 493,421 |  |  | $ | 4.0 |  |  | 563,190 |  |  | $ | 1.2 |
Payments and deferrals(1) |  | (181,290 | ) |  | (1.5 | ) |  | (142,138 | ) |  | (1.0 | ) |  | (238,658 | ) |  | — |
New awards |  | 154,887 |  |  | — |  |  | 165,800 |  |  | — |  |  | 179,000 |  |  | — |
Forfeitures and cancellations(2) |  | (41,632 | ) |  | (.1 | ) |  | 387 |  |  | — |  |  | (10,111 | ) |  | (.1 | )
Expense recognized |  | — |  |  | (.4 | ) |  | — |  |  | .4 |  |  | — |  |  | 2.9 |
End of period |  | 449,435 |  |  | $ | 1.4 |  |  | 517,470 |  |  | $ | 3.4 |  |  | 493,421 |  |  | $ | 4.0 |
(1) | OneBeacon performance share payments in 2015 for the 2012-2014 performance cycle were at 45.7% of target. OneBeacon performance share payments in 2014 for the 2011-2013 performance cycle were at 37.1% of target. No payments were made in 2013 for the 2010-2012 OneBeacon performance cycle as the performance factor was zero.
(2) | Amounts include changes in assumed forfeitures, as required under GAAP.
The following summarizes OneBeacon performance shares outstanding awarded under the OneBeacon Incentive Plan as of December 31, 2015 for each performance cycle:
$ in millions |  | Target OneBeacon Performance Shares Outstanding |  | Accrued Expense
Performance cycle: |  |  |  |  |  |
2015 – 2017 |  | 146,659 |  |  | $ | .7 |
2014 – 2016 |  | 142,710 |  |  | .1 |
2013 – 2015 |  | 167,300 |  |  | .6 |
Sub-total |  | 456,669 |  |  | 1.4 |
Assumed forfeitures |  | (7,234 | ) |  | — |
Total at December 31, 2015 |  | 449,435 |  |  | $ | 1.4 |
If the outstanding OneBeacon performance shares had been vested on December 31, 2015, the total additional compensation cost to be recognized would have been $1.3 million, based on December 31, 2015 accrual factors (common share price, accumulated dividends and payout assumptions). The targeted performance goal for full payment of the outstanding OneBeacon performance shares granted during 2015 is growth in book value per share of 13%. At a growth in book value per share of 6% or less, no performance shares would be earned and at a growth in book value per share of 20% or more, 200% of performance shares would be earned. The targeted performance goal for full payment of the outstanding OneBeacon performance shares granted during 2014 is growth in book value per share of 14%. At a growth in book value per share of 7% or less, no performance shares would be earned and at a growth in book value per share of 21% or more, 200% of performance shares would be earned. The targeted performance goal for full payment of the outstanding OneBeacon performance shares granted during 2013 is growth in book value per share of 13%. At a growth in book value per share of 6% or less, no performance shares would be earned and at a growth in book value per share of 20% or more, 200% of performance shares would be earned. OneBeacon Restricted Shares The following table summarizes the unrecognized compensation cost associated with the outstanding OneBeacon restricted stock awards for the years ended December 31, 2015, 2014 and 2013.
|  | Year Ended December 31,
|  | 2015 |  | 2014 |  | 2013
$ in millions |  | Restricted Shares |  | Unamortized Issue Date Fair Value |  | Restricted Shares |  | Unamortized Issue Date Fair Value |  | Restricted Shares |  | Unamortized Issue Date Fair Value
Non-vested, |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period |  | 612,500 |  |  | $ | 3.5 |  |  | 915,000 |  |  | $ | 6.5 |  |  | 927,000 |  |  | $ | 9.6 |
Issued |  | 75,950 |  |  | 1.1 |  |  | — |  |  | — |  |  | — |  |  | — |
Vested |  | (296,000 | ) |  | — |  |  | (300,000 | ) |  | — |  |  | (9,000 | ) |  | — |
Forfeited |  | (9,728 | ) |  | (.1 | ) |  | (2,500 | ) |  | — |  |  | (3,000 | ) |  | — |
Expense recognized |  | — |  |  | (2.0 | ) |  | — |  |  | (3.0 | ) |  | — |  |  | (3.1 | )
End of period |  | 382,722 |  |  | $ | 2.5 |  |  | 612,500 |  |  | $ | 3.5 |  |  | 915,000 |  |  | $ | 6.5 |
On February 24, 2015, OneBeacon issued to certain employees 75,950 shares of restricted stock having a grant date fair value of $1.1 million, which are scheduled to cliff vest on January 1, 2018. On March 1, 2012, OneBeacon issued 300,000 restricted shares to key employees that vest in two equal installments on February 28, 2014 and 2015. On May 25, 2011, OneBeacon issued 630,000 restricted shares to its CEO that vest in four equal annual installments beginning on February 22, 2014, 2015, 2016 and 2017. Concurrently with the grant of the restricted shares, 35,000 OneBeacon performance shares issued to OneBeacon’s CEO for the 2011-2013 performance share cycle were forfeited and performance share awards to OneBeacon’s CEO for the subsequent 5 years have been or will also be reduced by 35,000 shares. The restricted shares contain dividend participation features, and therefore, are considered participating securities. The unrecognized compensation cost associated with outstanding restricted share awards as of December 31, 2015 is expected to be recognized ratably over the remaining vesting periods. OneBeacon Restricted Stock Units During the year ended December 31, 2015, 226,778 RSUs were issued, with 200,194 RSUs, net of forfeitures, outstanding as of December 31, 2015. The RSUs are scheduled to cliff vest on January 1, 2018, at which time the RSUs will be paid out in cash or shares at the discretion of the OneBeacon Compensation Committee. The expense associated with the RSUs, which is being amortized over the vesting period, was $0.8 million for the year ended December 31, 2015. Share-based Compensation Under Qualified Retirement Plans Contributions to the KSOP with respect to the years ended 2015, 2014 and 2013 were made with either the Company’s or OneBeacon Ltd.’s common shares, dependent on the employer. The variable contribution amounts for eligible participants of the KSOP constituted approximately 3%, 2% and 4% of salary for the years ended 2015, 2014 and 2013. White Mountains recorded $5.7 million, $4.4 million and $6.3 million in compensation expense to pay benefits and allocate common shares to participant’s accounts for the years ended 2015, 2014 and 2013. As of December 31, 2015 and 2014, the plans owned 3% or less of either of the Company’s or OneBeacon Ltd.’s total common shares outstanding. All White Mountains common shares held by the KSOP are considered outstanding for earnings (loss) per share computations.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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