WTM White Moutains Insurance Group Ltd

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Notice of 2017

Annual General Meeting

Of Members and

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White Mountains Insurance Group, Ltd. (the “Company”, “Registrant” or “WTM”) is an exempted Bermuda limited liability company whose principal businesses are conducted through its insurance subsidiaries and other affiliates.  Within this proxy statement, the term “White Mountains” is used to refer to one or more entities within the consolidated organization, as the context requires.

White Mountains’s operations principally include: (1) OneBeacon Insurance Group, Ltd. (“OB” or “OneBeacon”), a 76%-owned Bermuda-based company, which through its subsidiaries offers a wide range of specialty property and casualty insurance products in the United States primarily through independent agencies, regional and national brokers, wholesalers and managing general agencies; (2) HG Global, Ltd., a Bermuda-domiciled company, which through its subsidiaries reinsures Build America Mutual Assurance Company (“BAM”), a municipal bond insurer domiciled in New York that provides insurance on bonds issued to support essential U.S. public purposes, and provided the initial capitalization of BAM through the purchase of $503 million of BAM surplus notes; and (3) White Mountains’s Other Operations segment, which consists of the Company and its intermediate holding companies, its wholly-owned investment management subsidiary, White Mountains Advisors LLC (“WM Advisors”) and certain consolidated and unconsolidated private capital investments.  The consolidated private capital investments consist of QL Holdings LLC (“MediaAlpha”), Wobi Insurance Agency Ltd. (“Wobi”), and Removal Stars Ltd. (“Buzzmove”).  For additional information on our business segments, please refer to the Form 10-K for 2016 which can be found at www.whitemountains.com .

The 2017 Annual General Meeting will be confined to a Member vote on the proposals set forth in this Proxy Statement and on such other matters properly brought before the meeting.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

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WHITE MOUNTAINS INSURANCE GROUP, LTD.

PROXY STATEMENT

This Proxy Statement is being furnished in connection with the solicitation of proxies on behalf of the Company’s Board of Directors (the “Board”) for the 2017 Annual General Meeting of Members (the “2017 Annual Meeting”), to be held on Thursday, May 25, 2017 at Tucker’s Point Hotel, 60 Tucker’s Point Drive, Hamilton Parish, Bermuda.  The solicitation of proxies will be made primarily by mail, and the Proxy Statement and related proxy materials will be distributed to registered Members on or about April 28, 2017.

Holders of the Company’s common shares (“Members”), par value $1.00 per share, as of the close of business on Monday, April 3, 2017, the record date, are entitled to vote at the meeting.

You can ensure that your common shares are properly voted at the meeting by completing, signing, dating and returning the enclosed proxy card in the envelope provided.  Members may also vote their shares by telephone or via the internet in accordance with the instructions on your proxy card.  A Member has the right to appoint another person (who need not be a Member) to represent the Member at the meeting by completing an alternative form of proxy which can be obtained from the Corporate Secretary or by notifying the Inspectors of Election (see page 33).  Every Member entitled to vote has the right to do so either in person or by one or more persons authorized by a written proxy executed by such Member and filed with the Corporate Secretary.  Any proxy duly executed will continue in full force and effect unless revoked by the person executing it in writing or by the filing of a subsequent proxy.

Sending in a signed proxy will not affect your right to attend the meeting and vote.  If a Member attends the meeting and votes in person, his or her signed proxy is considered revoked.

IMPORTANT VOTING INFORMATION

If you hold your shares through a broker, bank or other financial institution, in order for your vote to be counted on any matter other than Proposal 9 (the ratification of the selection of PwC as the Company’s auditor for 2017), you must provide specific voting instructions to your broker, bank or financial institution by completing and returning the proxy card or following the instructions provided to you to vote your shares via telephone or the Internet.  Voting deadlines vary by institution.  Please check with your broker, bank or other financial institution for the voting cut-off date for WTM.

Your Participation in Voting the Shares You Own Is Important

Voting your shares is important to ensure that you have a say in the governance of your company.  Please review the proxy materials and follow the instructions on the proxy card to vote your shares.  We hope you will exercise your rights and fully participate in your company’s future.

More Information Is Available

If you have any questions about this rule or the proxy voting process in general, please contact the broker, bank or other financial institution where you hold your shares.  The U.S. Securities and Exchange Commission (“SEC”) has information available on the internet at: https://www.investor.gov/system/files/publications/documents/english/sec-guide-to-proxy-brochures.pdf with more information about your voting rights as a shareholder.

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Gary C. Tolman  has been a director of the Company since June 2015. Mr. Tolman served as the President and Chief Executive Officer of Esurance, the direct-to-consumer personal auto insurance company, from 2000 until his retirement in 2015.  Mr. Tolman also served as the Chairman of the Board of Directors for Answer Financial, one of the country’s largest personal lines insurance agencies.  Prior to joining Esurance in 1999, Mr. Tolman served as the President and Treasurer of Talegen Holdings, formerly the property and casualty insurance operations of Xerox Corporation.  Before Talegen Holdings, Mr. Tolman worked at Fireman’s Fund Insurance Company for 15 years, serving in a number of capacities and leaving as Senior Vice President and Chief Financial Officer of its reinsurance company.  Mr. Tolman has served on the boards of a number of insurance and insurance services companies during his more than 40-year career in the property and casualty insurance industry.  He currently serves on the Board of Directors of KellyKlee Inc. and on the Board of Governors of the International Tennis Hall of Fame.

Class II – To Be Elected to a Term Ending in 2020

Yves Brouillette has been a director of the Company since 2007.  He has been the President of Beluca Investment, Inc. since 2006.  Previously, Mr. Brouillette had been with ING since 1989, serving in many leadership positions at ING companies, including most recently as the CEO for ING Latin America operations in Mexico, Brazil, Chile and Peru (2002-2005).  Mr. Brouillette is a director of Intact Financial Corporation (formerly ING Canada), where he serves on the Audit and Risk Committees, and was the Chairman of the Board (2003-2007).  Mr. Brouillette is an actuary and has over 30 years of experience in the property and casualty insurance industry in North and South America.

G. Manning Rountree was appointed as a director and Chief Executive Officer of the Company on March 1, 2017.  Previously, Mr. Rountree served as an Executive Vice President of the Company and President of White Mountains Capital, Inc. (“WM Capital”).  He joined White Mountains in 2004 and served as President of WM Advisors from March 2009 until December 2014.  Prior to joining White Mountains, Mr. Rountree was a Senior Vice President at Putnam Investments for two years.  Prior to joining Putnam Investments, Mr. Rountree spent three years with McKinsey & Company. Mr. Rountree is a director and member of the Risk Management Committee of Admiral Group plc, a large car insurance provider based in the UK.

Class III – Term Ending in 2018

A. Michael Frinquelli has been a director of the Company since June 2005.  Mr. Frinquelli is co-founder and Manager of Renaissance Fund Advisors, Inc.  Until 2004, Mr. Frinquelli was a general partner of Renaissance Executive Partners, which he co-founded in April 1997.  Prior to that, he was a managing director at Merrill Lynch and a managing director at Salomon Brothers.  Mr. Frinquelli also served as a director for Primus Financial Products, LLC, a wholly-owned subsidiary of Primus Guaranty, Ltd., from 2004 until 2010.  Mr. Frinquelli is a Chartered Financial Analyst and has extensive insurance industry expertise, serving as an insurance industry equity analyst for over 35 years.

Edith E. Holiday has been a director of the Company since 2004.  Ms. Holiday formerly served as Operating Trustee for TWE Holdings I and II Trusts from 2002 to 2007.  Ms. Holiday was also the President, Secretary and Treasurer of Comcast TW Holdings, Inc. from 2006 to 2007.  From 1990 to 1993 Ms. Holiday served as Assistant to the President of the United States and Secretary of the Cabinet.  From 1989 to 1990 she was General Counsel to the United States Treasury Department.  Ms. Holiday also holds directorships at Canadian National Railway Company (since 2001), where she also serves on the Audit Committee, Hess Corporation (since 1993), Santander Consumer USA (since 2016), and is a director or trustee of 42 investment companies in the Franklin Templeton Group of Mutual Funds (since 1996).  Ms. Holiday also served as a Director for the H. J. Heinz Company (from 1995 until its sale in 2013) and RTI International Metals Inc. (from 1999 until its sale in 2015).  Ms. Holiday has extensive board-level experience across diverse industries and significant experience with the U.S. Federal government.

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CORPORATE GOVERNANCE

Corporate governance is the system by which companies are directed and controlled and involves the distribution of rights and responsibilities among the Board, management and the Company’s Members.  The Company has established Corporate Governance Guidelines that spell out its overall approach towards corporate governance.

The Company also has a Code of Business Conduct that applies to all directors, officers and employees in carrying out their responsibilities to, and on behalf of, the Company.  No waivers of the Code of Business Conduct were requested of, or granted by, the Board for any director or executive officer during 2016.

The Company’s Corporate Governance Guidelines and Code of Business Conduct are available at our website, www.whitemountains.com .  These documents are available in print, free of charge, to any Member upon request.

The Board

The day-to-day management of the Company, including preparation of financial statements and short-term and long-term strategic planning, is the responsibility of management.  The primary responsibility of the Board is to oversee and review management’s performance of these functions in order to advance the long-term interests of the Company and its Members.

In fulfilling this responsibility, directors must exercise common sense business judgment and act in what they reasonably believe to be in the best interests of the Company and its Members.  Directors are entitled to rely on the honesty and integrity of senior management and the Company’s outside advisors and auditors.  However, it is the Board’s responsibility to establish that they have a reasonable basis for such reliance by ensuring that they have a strong foundation for trusting the integrity, honesty and undivided loyalty of the senior management team upon whom they are relying and the independence and expertise of outside advisors and auditors.

Prior to his retirement on March 1, 2017, Raymond Barrette served as Chairman of the Board and CEO of the Company.  As CEO, Mr. Barrette was effective at overseeing the complex, decentralized operations of the Company.  By virtue of his broad knowledge of the insurance industry and his long experience and track record with the Company, the Board believed that Mr. Barrette was best suited to preside over the Board and set its agendas.  At meetings of the Board at which Mr. Barrette presided as Chairman, Mr. Davis presided over a separate session of non-management directors without Company management present.

Upon Mr. Barrette’s retirement, Mr. Davis was appointed as the Chairman of the Board and Mr. Rountree was appointed as the CEO of the Company.  The Board believes that having an independent Chairman will assist the Board in overseeing Mr. Rountree’s transition to the CEO role.  At meetings of the Board, Mr. Davis presides over a separate session of non-management directors without Company management present.  The Board is comprised of directors that, together, are knowledgeable and experienced in the Company’s business, and the Board is satisfied that the current structure provides strong oversight of the Company’s affairs.

Director Independence

The Board has determined that a majority of the Company’s current directors are independent, as defined in Section 303A of the New York Stock Exchange (“NYSE”) Listed Company Manual.  Those directors determined to be independent are Messrs. Brouillette, Davis, Frinquelli, Smith and Tolman and Ms. Holiday.  For a director to be independent, the Board must determine that the director has no relationship with the Company (other than being a director or shareholder of the Company or its subsidiaries) or has only immaterial relationships with the Company.  The Company does not apply categorical standards as a basis for determining director independence.  Accordingly, the Board considers all relevant facts and circumstances, on a case-by-case basis, in making an independence determination.

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The Board notes no current relationships (other than being directors or shareholders) with Messrs. Brouillette, Frinquelli, Tolman and Smith or Ms. Holiday.  The Board notes a relationship with Mr. Davis, as disclosed herein under “Director Compensation”, that it concluded was immaterial and did not impair his independence.  In making its independence determinations, the Board considers all such relationships in light of NYSE standards as well as the attributes it believes should be possessed by independent-minded directors.  Those attributes include the relative impact of the transactions to the director’s personal finances, the perceived degree of dependence by the director or the Company upon the relationship or transactions continuing in the future and whether the transactions were on terms that were reasonable and competitive.

Board Meetings and Committees; Annual Meeting Attendance

During 2016, the following meetings of the Board were held: five meetings of the full Board, ten meetings of the Audit Committee, six meetings of the Compensation Committee, two meetings of the Performance Compensation Subcommittee, two meetings of the Nominating and Governance Committee and four meetings of the Finance Committee.  During 2016, each director attended more than 75% of the aggregate of: (1) the total number of meetings of the Board (held during the period for which he or she has been a director); and (2) the total number of meetings held by all committees of the Board on which he or she served.  It is White Mountains practice that all directors are invited to and generally attend all Committee meetings.  In addition, each Committee Chair provides regular updates to the Board regarding Committee activities.

Directors are encouraged, but are not required, to attend annual meetings.  All of the Company’s directors were in attendance at the 2016 Annual General Meeting, which was held on May 26, 2016.

Committees of the Board

Nominating and Governance Committee

The primary purposes of the Nominating and Governance Committee are to: (1) identify individuals qualified to become Board members and recommend such individuals to the Board for nomination for election to the Board; (2) make recommendations to the Board concerning committee appointments; (3) develop, recommend and annually review corporate governance guidelines applicable to the Company and oversee corporate governance matters; and (4) oversee the evaluation of the Board and management.

The Nominating and Governance Committee is currently comprised of Ms. Holiday (as Chairwoman) and Messrs. Brouillette, Davis and Smith.  The Board has determined that each current member of the Nominating and Governance Committee satisfies applicable NYSE requirements.

The Nominating and Governance Committee Charter, which outlines the duties and responsibilities of the Nominating and Governance Committee, is available at www.whitemountains.com .  The Nominating and Governance Committee Charter is available in print, free of charge, to any Member upon request.

General Criteria and Process for Selection of Director Candidates.   In identifying and evaluating director candidates, the Nominating and Governance Committee does not set specific criteria for directors.  Under its Charter, the Committee is responsible for determining desired Board skills and evaluating attributes such as independence, integrity, expertise, breadth of experience, knowledge about the Company’s business or industry and ownership interest in the Company.  In selecting director candidates, the Company seeks a diversity of skills and experience, but does not affirmatively seek diversity based on race, gender, or national origin.  Directors must be willing to devote adequate time and effort to Board responsibilities.  As set forth in the Company’s Corporate Governance Guidelines and its Charter, the Committee is responsible for recommending director candidates to the Board.

Consideration of Director Candidates Nominated by Members.   The Company has not adopted a specific policy regarding consideration of director candidates from Members.  Members who wish to recommend candidates for consideration by the Committee may submit their nominations in writing to the Corporate Secretary at the address provided in this Proxy Statement.  The Committee may consider such Member recommendations when it evaluates and recommends candidates to the Board for submission to Members at each annual general meeting.  In addition, Members may nominate director candidates for election without consideration by the Committee by complying with the eligibility, advance notice and other provisions of our Bye-laws as described on page 8.

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Procedures for Nominating Director Candidates.   Under the Company’s Bye-laws, nominations for the election of directors may be made by the Board or by any Member entitled to vote for the election of directors (a “Qualified Member”).  A Qualified Member may nominate persons for election as directors only if written notice of such Qualified Member’s intent to make such nomination is delivered to the Secretary not later than: (1) with respect to an election to be held at an annual general meeting, 90 days prior to the anniversary date of the immediately preceding annual general meeting or not later than 10 days after notice or public disclosure of the date of the annual general meeting is given or made available to Qualified Members, whichever date is earlier, and (2) with respect to an election to be held at a special general meeting for the election of directors, the close of business on the seventh day following the date on which notice of such meeting is first given to Qualified Members.  Each such notice shall set forth: (a) the name and address of the Qualified Member who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the Qualified Member is a holder of record of common shares entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the Qualified Member and each such candidate and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the Qualified Member; (d) such other information regarding each candidate proposed by such Qualified Member as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the SEC had each such candidate been nominated, or intended to be nominated, by the Board; and (e) the consent of each such candidate to serve as a director of the Company if so elected.

Audit Committee

The primary purposes of the Audit Committee are to: (1) assist with Board oversight of: the integrity of the Company’s financial statements; the qualifications and independence of the independent auditors; the performance of the internal audit function and the independent auditors; and the Company’s compliance with legal and regulatory requirements; (2) provide an avenue of communication among the independent auditors, management, the internal auditors and the Board; (3) approve certain related or affiliated person transactions and review disclosures thereof and; (4) prepare the Audit Committee Report (which appears on page 28).  In addition, with respect to risk management, the Committee discusses with management the Company’s policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures.

The Audit Committee meets individually in private session with the Company’s Chief Financial Officer, General Counsel, General Auditor and the independent auditors at its quarterly meetings.

The Audit Committee is comprised of Messrs. Smith (as Chairman), Brouillette and Frinquelli and Ms. Holiday.  The Board has determined that, of the persons on the Audit Committee, at a minimum Mr. Smith meets the requirements of being an Audit Committee Financial Expert as defined in Item 407(d) of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The Board has also determined that each current member of the Audit Committee satisfies applicable NYSE requirements as well as the separate independence standards set forth by the SEC.

The Audit Committee Charter, which outlines the duties and responsibilities of the Audit Committee, is available at www.whitemountains.com .  The Audit Committee Charter is available in print, free of charge, to any Member upon request.

Compensation Committee

The primary purposes of the Compensation Committee are to: (1) review and make recommendations on director compensation; (2) discharge the Board’s responsibilities relating to the compensation of executives; (3) oversee the administration of the Company’s compensation plans (and, to the extent the Compensation Committee deems appropriate, the plans of the Company’s major subsidiaries), in particular the incentive compensation and equity-based plans and; (4) review and discuss the Compensation Discussion and Analysis with management and prepare the Compensation Committee Report (which appears on page 18).

The Compensation Committee is currently comprised of Messrs. Tolman (as Chairman), Frinquelli and Smith and Ms. Holiday.  The Board has determined that each current member of the Compensation Committee satisfies applicable NYSE requirements.

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The Compensation Committee Charter, which outlines the duties and responsibilities of the Compensation Committee, is available at www.whitemountains.com .  The Compensation Committee Charter is available in print, free of charge, to any Member upon request.

Performance Compensation Subcommittee

In February 2013, the Compensation Committee formed the Performance Compensation Subcommittee.  The Committee delegated to the Subcommittee review and approval of performance-based compensation in order to comply with Internal Revenue Code Section 162(m) (“Section 162(m)”).

The Performance Compensation Subcommittee is comprised of Messrs. Frinquelli and Smith and Ms. Holiday.

Interlocks and Insider Participation

No member of the Compensation Committee or the Performance Compensation Subcommittee was an employee of the Registrant during the last fiscal year or has served as an officer of the Registrant.

Finance Committee

The primary purposes of the Finance Committee are to: (1) formulate the Company’s (including OneBeacon’s) investment policy and investment guidelines; (2) review the performance and asset allocation of the Company’s (including OneBeacon’s) investment portfolio on a regular basis; and (3) monitor the capital, debt, and corporate structure of the Company (including OneBeacon) and, in coordination with the Audit Committee, review the adequacy of risk management, including with respect to new business opportunities outside of traditional property and casualty insurance and reinsurance.  The Finance Committee is currently comprised of Messrs. Frinquelli (as Chairman), Brouillette, Rountree, Smith and Tolman.

Risk Oversight

The Board, directly and through its Committees, plays an active role in the oversight of the Company’s risk management.  The subject of risk management is a recurring agenda item, for which the Board regularly receives reports from management on capital, investments, and operations, including the risks associated with each and the steps management is taking to manage those risks.  The Board also discusses with management the Company’s business strategy, risk appetite and appropriate levels of risk.

The Board’s committees are assigned oversight responsibility for particular areas of risk.  For example, the Audit Committee receives a report, at least annually, on company-wide risks which encompass operational, financial, legal, compliance and reputational risks.  The Compensation Committee oversees risk related to executive compensation plans and implementation.  The Finance Committee oversees the risks related to managing the Company’s investment portfolio.

Shareholder Communications

Members, employees and others interested in communicating directly with the Board, any of the Board’s Committees or any individual member of the Board should write to the addressee, c/o the Corporate Secretary, at the address presented under “Available Information” (which appears on page 34).

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(a)          Information as of December 31, 2016, based on Schedule 13G filed with the Securities and Exchange Commission on February 7, 2017, by and on behalf of Franklin Mutual Advisers, LLC.

(b)          Information as of December 31, 2016, based on Schedule 13G filed with the Securities and Exchange Commission on February 10, 2017, by and on behalf of The Vanguard Group.

(c)           Information as of December 31, 2016, based on Schedule 13G filed with the Securities and Exchange Commission on February 7, 2017, by and on behalf of T. Rowe Price Associates, Inc.

Security Ownership of Management

The following table sets forth, as of April 3, 2017, beneficial ownership of common shares by each director, the Named Executive Officers (as defined on page 19) and all other executive officers as a group:

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When making new grants, the Committee assesses the impact of different performance scenarios on the potential sharing percentage.  Further, in order to test our beliefs about the size of the awards we make and their variability, annually the Committee has reviewed and considered a systematic analysis prepared by management of the public disclosures about compensation made by other property and casualty insurers and reinsurers and of the amount and variability of compensation at those companies at differing levels of performance.  These analyses have supported the Committee’s view that our compensation programs are appropriately sized and more variable than most other insurers, have fewer fixed elements of compensation and perquisites, and do not lead to significant rewards for poor performance.

The Committee believes that the compensation structures that have been developed for the Company and its subsidiaries closely align the financial interests of management with those of our shareholders and encourage appropriate, but not excessive, risk taking.

Our Compensation Process

The Committee is responsible for approving our compensation practices that affect executive officers, and it specifically approves all compensation for our executive officers and for any employee with target annual compensation in excess of $1.5 million.  Our CEO annually presents the Committee with his evaluation of our executives, their individual performances, responsibilities, and the contributions they made to the Company’s accomplishments over the past year, as well as over the last long-term incentive plan cycle and his expectations for the future and succession plans.  In connection with this evaluation, the CEO presents the Committee with his recommendations for establishing the compensation for these executives for its consideration.  The Committee assesses the performance, responsibilities, and contributions of the CEO, considers CEO succession plans, and sets the compensation of the CEO.

With the exception of significant promotions and new hires, compensation matters are usually addressed at the first meeting of the Committee each year (typically late February) following the availability of financial results for the prior year and the current year’s financial plan.  This allows us to determine the results of prior period grants and to set targets for the current year and newest long-term performance cycle.  Performance cycles for long-term compensation typically run for three years beginning on January 1st of the year of grant.

Because Mr. Davis, who was the Chairman of the Committee in 2016, and Mr. Tolman do not satisfy certain requirements of Section 162(m) to be considered an “outside director” for purposes of that rule, the Committee formed the Performance Compensation Subcommittee (the “Subcommittee”) comprised of the other members of the Committee, each of whom met the requirements to be considered an outside director for purposes of Section 162(m).  The Subcommittee administers and approves all performance-based compensation awards in order to maintain favorable tax treatment of such awards.

Following the OneBeacon initial public offering (the “OB IPO”) in November 2006, the Committee determined that it would fully delegate to the OneBeacon Compensation Committee (the “OneBeacon Committee”) authority for the compensation of OneBeacon’s officers, including those who might be Named Executive Officers of the Company.  Accordingly, compensation actions for OneBeacon personnel following the date of the OB IPO (including new annual and long-term incentives and approval of payouts on existing annual and long-term incentives) have been taken by the OneBeacon Committee (which in 2016 was comprised of Lowndes Smith (Chairman), Lois Grady and Kent Urness, who are independent directors of OneBeacon, and Mr. Barrette) and, to the extent necessary to comply with applicable regulations, a subcommittee that excluded Mr. Barrette.

Compensation for 2016

Our Named Executive Officers in 2016 include Ray Barrette, our Chairman and CEO in 2016, David Foy, Manning Rountree, Robert Seelig, and Reid Campbell.  Allan Waters, who ceased to be an employee of the Company upon the consummation of the sale of Sirius Group in April 2016, also is a Named Executive Officer because he would otherwise have been included as a Named Executive Officer had he still served as an executive officer of the Company as of December 31, 2016.

The principal elements of compensation for our executives in 2016—long-term incentive compensation, base salary, and annual incentive bonuses—are discussed below.

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Long-Term Incentive Compensation

CEO .  In 2016, after reviewing Mr. Barrette’s historical compensation, his share ownership, his existing incentives, and compensation granted to CEOs at other property and casualty (re)insurance companies, as well as his delegation to Messrs. Foy and Rountree of additional day-to-day management responsibilities during 2016, the Subcommittee determined to grant him 5,000 restricted shares for the 2016-2018 performance cycle.  The grant date market value was approximately $3.8 million.

Named Executive Officers .  In the case of Messrs. Foy, Rountree, Seelig and Campbell, in determining the amount of new long-term incentive compensation grants for 2016, the Committee assessed each executive’s scope of authority and ability to impact the success of the Company.  Based on the Committee’s general experience and the recommendation of the CEO, the Committee established a grant level that it believed was appropriate to reflect each such executive’s expected contribution to the Company over the next performance cycle.

The new long-term incentive grants for these Named Executive Officers were allocated 50% as performance shares and 50% as restricted shares, which was the same allocation as in 2015.  At the time the performance share grants were made, the Committee elected not to set a specific performance target to determine the payout on a 0% to 200% scale. With the key job for the Company’s management team being to appropriately deploy the proceeds from the sales of Sirius and Symetra while remaining patient, the Committee determined that grading management’s performance would be best done using judgment at the end of the cycle taking into account all facts the Committee deemed relevant including the Company’s growth in intrinsic business value per share.  The Committee considered many other approaches, including making grants in this cycle entirely in restricted shares, but decided that the chosen approach best fit the unique circumstances of the Company.  However, as discussed below under “2017 Compensation Actions—Establishment of Performance Target for 2016-2018 Performance Share Cycle”, in February 2017 the Committee decided that the benefits of this approach were outweighed by the clarity and cohesion that a single growth in intrinsic value per share target would provide.  As a result, and taking into account the substantial undeployed capital position of the Company, the Committee established a target of 4% annual growth in intrinsic business value per share as the target for this cycle.

In total, the WTM performance share and restricted share grants made to all employees of the Company for the 2016-2018 performance cycle totaled approximately 0.8% of the then outstanding shares, within the Committee’s 1% guideline.

In addition, with respect to the 2014-2016 performance cycle which matured at the end of 2016, 9% annual growth in intrinsic business value per share (“GIBVPS”) was the performance target for a payout of 100% of the target shares.  Annual growth of 3% or less would have resulted in a payout of 0% and annual growth of 15% or more would have resulted in a payout of 200%.  At its meeting in March 2017, based on an average annual GIBVPS of 7.6%, the Committee confirmed that the payout that was earned was 76% of target.

David Foy .   Mr. Foy served as the CFO of the Company in 2016.  For the 2014-2016 cycle, Mr. Foy had been granted 3,000 target performance shares and 3,000 restricted shares.  Based on the Company’s performance over the cycle, he earned 2,280 performance shares.  The restricted shares vested on January 1, 2017.

For the performance cycle from 2016-2018, Mr. Foy originally was granted 2,400 WTM performance shares and 2,400 restricted shares.  In August 2016, he was granted an additional 500 performance shares and 500 restricted to reflect the additional day-to-day responsibilities he was delegated by Mr. Barrette.  The total grant date market value was approximately $4.5 million.  The number of performance shares that will be earned will be determined after the end of 2018 based on the Company’s performance over the cycle compared to the target described above.  The restricted shares will vest on January 1, 2019, subject to Mr. Foy’s continued employment.

G. Manning Rountree .  After returning from a sabbatical in May 2016, Mr. Rountree served as Executive Vice President of the Company and President of WM Capital until his appointment as CEO on March 1, 2017.  For the 2014-2016 cycle, Mr. Rountree had been granted 2,250 target performance shares and 2,250 restricted shares.  Based on the Company’s performance over the cycle, he earned 1,710 performance shares.  The restricted shares vested on January 1, 2017.

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For the performance cycle from 2016-2018, Mr. Rountree was granted 2,900 WTM performance shares and 2,900 restricted shares.  The grant date market value was approximately $4.8 million.  The number of performance shares that will be earned will be determined after the end of 2018 based on the Company’s performance over the cycle compared to the target described above.  The restricted shares will vest on January 1, 2019, subject to Mr. Rountree’s continued employment.  In addition, for the 2015-2017 cycle, Mr. Rountree was granted 3,000 performance shares and an additional 750 restricted shares on the same terms as applicable to other grants in that cycle.  The grant date market value for the 2015-2017 cycle awards was approximately $3.1 million.  The grants for both cycles were made in August 2016 following Mr. Rountree’s return from sabbatical and reflect his increased responsibilities.

Robert Seelig .  Mr. Seelig is a Managing Director and General Counsel of the Company.  He joined the Company in 2002. For the 2014-2016 cycle, Mr. Seelig had been granted 2,125 target performance shares and 2,125 restricted shares.  Based on the Company’s performance over the cycle, he earned 1,615 performance shares.  The restricted shares vested on January 1, 2017.

For the performance cycle from 2016-2018, Mr. Seelig was granted a total of 2,000 WTM performance shares and 2,000 restricted shares.  The total grant date market value was approximately $3.1 million.  The number of performance shares that will be earned will be determined after the end of 2018 based on the Company’s performance over the cycle compared to the target described above.  The restricted shares will vest on January 1, 2019, subject to Mr. Seelig’s continued employment.

Reid Campbell .  Mr. Campbell is a Managing Director of WM Capital and the President of WM Advisors.  For the 2014-2016 cycle, Mr. Campbell had been granted 2,250 target performance shares and 2,250 restricted shares.  Based on the Company’s performance over the cycle, he earned 1,710 performance shares.  The restricted shares vested on January 1, 2017.

For the performance cycle from 2016-2018, Mr. Campbell was granted 2,000 WTM performance shares and 2,000 restricted shares.  The grant date market value was approximately $3.1 million.  The number of performance shares that will be earned will be determined after the end of 2018 based on the Company’s performance over the cycle compared to the target described above.  The restricted shares will vest on January 1, 2019, subject to Mr. Campbell’s continued employment.

Base Salary

We pay our executive officers salaries that we believe to be below-market.  In 2008, we limited base salaries to a maximum of $500,000.  Each of our Named Executive Officers currently receives a salary of $500,000.

Annual Incentive Bonuses

We provide annual bonus opportunities to our executive officers.  Each Named Executive Officer participates in the annual bonus pool of his respective business unit.  The aggregate bonus pool size for each business unit could range from 0% to 200% of target, depending upon performance.  Individual bonuses can vary widely around the pool average based on individual performance and no cap (other than the size of the pool) applies to any single individual.  Typically, the head of a business unit receives the average bonus percentage applicable to his business unit.

For 2016, the Named Executive Officers had target annual bonuses of 75% of salary, which was unchanged from the prior year.

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For the Named Executive Officers, their annual incentive bonuses are designed to reward company-wide performance.  The Committee did not set a quantitative target in 2016 and instead established the size of the awarded pool based on a qualitative assessment of the Company’s performance during the year based on its judgment.  Based on the Company’s performance in 2016 (excluding the gain from the sale of Sirius), the Committee awarded a bonus pool of 90% of target.  Among the items considered by the Committee were the Company’s 1% growth in adjusted book value per share (excluding the gain from the sale of Sirius), 2% growth in economic value per share (excluding the gain from the sale of Sirius), the repurchase of approximately 20% of the Company’s outstanding shares at an average price per share of $802, the large amount of undeployed capital held by the Company, investment performance, results at Sirius prior to the closing of the sale and at OneBeacon, the continued progress at BAM/HG Global and the gain on the sale of Tranzact.  Messrs. Barrette, Foy, Rountree, Seelig and Campbell were awarded bonuses of $337,500, $315,000, $315,000, $315,000 and $315,000, which represented 90%, 84%, 84%, 84% and 84% of target.

Special Bonuses .  As part of a transaction bonus pool paid to key employees at Sirius Group, Mr. Waters received a special bonus of $7,096,124.  Also, to recognize his efforts for the Company in connection with the sale of Sirius Group, Mr. Seelig received a special bonus of $2,000,000.

2017 Compensation Actions

New Long-Term Incentive Grants and Annual Bonus Program

In February 2017, the Committee and the Subcommittee made new long-term incentive grants to and established annual bonus target levels for the Named Executive Officers (other than Messrs. Barrette, Foy and Waters) based on the same factors described above with respect to grants made in 2016.

The new long-term incentive grants for White Mountains executives were allocated 50% as performance shares and 50% as restricted shares, which was the same allocation as in 2016.

With approximately $1.8 billion remaining in undeployed capital, deploying capital intelligently remains the key job for the Company’s management team.  Taking account of the level of deployed and undeployed capital (and current expected runrate returns thereon) and reasonable assumptions regarding the timing and magnitude of redeployment and distributions of undeployed capital, the Committee determined that 5% annual growth in intrinsic business value per share is an appropriately challenging target for a payout of 100% of the target shares for the 2017-2019 performance cycle.  The Committee believes this target properly balances the competing incentives (i) to deploy or distribute undeployed capital aggressively and (ii) to remain patient for strong opportunities.  Annual growth of 1% or less would result in a payout of 0%, and annual growth of 9% or more would result in a payout of 200%.  To measure growth in intrinsic business value per share, the Committee looks to growth in economic value per share (weighted 50%) and growth in adjusted book value per share (weighted 50%), in each case including dividends.  The Committee expects targets for future performance share cycles to increase as the level of undeployed capital normalizes over time.

Establishment of Performance Target for 2016-2018 Performance Share Cycle

When originally granted, the Committee did not set a performance target for the 2016-2018 performance cycle.  Instead, management’s performance would be graded using judgment at the end of the cycle.  As discussed above under “Compensation for 2016—Long-Term Incentive Compensation”, at its meeting on March 1, 2017, the Committee established a performance target for the 2016-2018 performance share cycle of 4% annual growth in intrinsic business value per share with annual growth of 0% or less resulting in a payout of 0% and annual growth of 8% or more resulting in a payout of 200%.  In setting this target, the Committee considered the same factors that it considered in setting the target for the 2017-2019 performance share cycle. The Committee decided to establish a performance target as it determined that the clarity and cohesion that a single growth in intrinsic value per share target provides outweighed the benefits of using judgment at the end of the cycle to set the payout level.

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Retirement of Ray Barrette

Mr. Barrette retired as Chairman and CEO on March 1, 2017.  In connection with his retirement, as more fully described in the Company’s Current Report on Form 8-K dated March 1, 2017, the Company entered into a letter agreement (the “Agreement”) with Mr. Barrette pursuant to which it agreed to pay Mr. Barrette (i) a cash bonus for 2017 equal to $187,500 and (ii) a cash retirement payment equal to approximately $21 million.  Mr. Barrette’s unvested long term performance shares and restricted shares were canceled in connection with his retirement. The Agreement also provides that Mr. Barrette will be subject to certain restrictive covenants regarding competition, solicitation and disparagement that apply through December 31, 2018.

Clawback Policy

The Company has adopted a clawback policy applicable to bonuses and long-term incentive awards.  If the Company is required to restate any financial statement included in an SEC filing as a result of an employee’s misconduct, the Board may, without prejudice to any other remedies available to the Company, seek reimbursement of any bonus or long-term incentive award received by such person that relates in whole or in part to any period for which such financial statements were restated.  If the misconduct was fraud, then in addition to other actions the Board mandatorily will seek such reimbursement.

Other Elements of Compensation

Retirement Benefits

We have no active U.S. defined benefit pension plans.  Benefit accruals under all our U.S. qualified defined benefit pension plans and all our U.S. supplemental defined benefit pension plans were frozen for all employees in 2002.

Our Named Executive Officers who are not employees of Bermuda-domiciled entities may participate in our voluntary non-qualified deferred compensation plans whereby they may defer all or a portion of their compensation.  Investment options in these plans are those available in our 401(k) plans, including White Mountains common shares and OneBeacon common shares.  None of the investment options offered under these plans provides an above-market rate of interest.

Our employees may participate in our qualified 401(k) plans and eligible employees can participate in a qualified employee stock ownership plan.  We do not provide supplemental retirement benefits to any employees in connection with these plans.

Perquisites

We review the perquisites that our senior management receives.  The primary perquisites include housing allowances in special circumstances and personal use of corporate aircraft.

We allow our Named Executive Officers to use our corporate aircraft from time to time for personal reasons.  The aggregate incremental cost to the Company is included, for proxy reporting purposes, as compensation to the Named Executive Officer.  For tax purposes, we comply with IRS regulations.  We do not “gross-up” our Named Executive Officers for their taxes associated with perquisites, including with respect to personal use of our aircraft.

Our Named Executive Officers also participate in our other benefit plans on the same terms as our other employees.  These plans include medical and health insurance, company paid life insurance and charitable gift matching.

Certain Board Fees

Our Named Executive Officers do not receive director fees for serving on the Company’s board of directors or for serving on the boards of directors of our wholly-owned or majority-owned subsidiaries.  However, those Named Executive Officers who serve on the boards of directors of other companies in which we have a minority interest may receive director fees.  We consider those board fees when evaluating the compensation of our Named Executive Officers.

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Employment and Severance Agreements; Change in Control

We have no long-term employment agreements with our Named Executive Officers although, from time to time, we have entered into short-term arrangements with newly hired executives governing their compensation and severance during up to their first three years with the Company.  No such arrangements are in effect with our Named Executive Officers.

At our parent company, severance benefits, if any, are determined by the Committee in its sole discretion.  At our operating subsidiaries, our Named Executive Officers participate in the severance plans, if any, generally applicable at those companies.

If any of our most senior executives were to retire, in order to enable the Company to ensure a smooth transition, to receive a non-compete/non-solicit from the executive and to retain access to valuable knowledge, talents and relationships, we generally will consider entering into a one to three-year consulting agreement with the executive, which would permit the executive to earn some or all of such executive’s long-term incentive compensation then outstanding.

We have no standalone change in control agreements with our Named Executive Officers.  However, under our long-term incentive plans, if a change in control of the Company (or a business unit, as applicable) were to occur, certain events, such as involuntary or constructive employment termination or amendments to our incentive plans which are materially adverse to its participants, may cause stock options to become fully exercisable, restricted shares to become immediately vested and performance shares and performance units to become payable in full or in part.  Our plans do not provide for tax gross-ups for excess parachute payments that may result from a change in control.

Tax Considerations

As a Bermuda-domiciled company, we do not receive a tax deduction for compensation paid to employees of White Mountains Insurance Group, Ltd. and, accordingly, the limitation of Section 162(m) does not impact compensation paid to our Named Executive Officers who are employees of non-U.S. companies (Messrs. Barrette, Foy, Rountree, Seelig, Campbell and Waters).  However, in the case of Named Executive Officers who are employees of subsidiaries that are organized in the United States (Mr. Campbell), Section 162(m) limits the deductibility of their compensation to $1,000,000 per individual to the extent that such compensation is not “performance-based” as defined in Section 162(m).  The Company is cognizant of Section 162(m) and generally seeks to structure its long-term incentive programs to permit the deductibility of the bulk of such compensation paid to these Named Executive Officers.  However, the Committee may approve compensation that will not meet the Section 162(m) requirements if, in the Committee’s judgment, structuring compensation in such manner better promotes the Company’s interests (such as with a grant of restricted shares and in the case of the grant of the 2016-2018 performance share cycle).

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Summary Compensation Table

The following table presents compensation in 2016, 2015 and 2014 for the Company’s CEO, CFO, its three other most highly compensated executive officers and an additional individual for whom disclosure would have been provided had he been serving as an executive officer at the end of 2016 (collectively, the “Named Executive Officers”):

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Grants of Plan-Based Awards

The following table presents grants of plan-based awards granted, except as otherwise noted, under the White Mountains Long-Term Incentive Plan (the “WTM Incentive Plan”) to the Named Executive Officers that received such awards during 2016:

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Outstanding Equity Awards at Fiscal Year-End

The following table presents outstanding equity awards under the WTM Incentive Plan, except as otherwise noted, to the Named Executive Officers as of December 31, 2016: