- The board of First American Financial reshuffled the leadership deck at the $6 billion title insurance and settlement firm after its CEO was arrested and charged with misdemeanor assault. The CFO is stepping in to fill the CEO position, and the board chairman will dive in as a new executive chair at First American. Ousted CEO Kenneth D. DeGiorgio—whose lawyers say he will be cleared of wrongdoing—will still collect millions in severance as detailed under his contract, the company told investors this month.
The CEO of First American Financial was summarily ousted after he was arrested and charged with assault in San Juan this month. Kenneth D. DeGiorgio was traveling aboard a Virgin Voyages Caribbean cruise ship with his wife when he was accused of choking another passenger in a maritime incident that was captured on surveillance footage and viewed by security officers, according to an FBI affidavit.
Days after DeGiorgio’s arrest, First American Financial announced his employment was terminated without cause—which means DeGiorgio still stands to collect about $18.6 million, according to a revised shareholder report the company published. That payment includes $7.24 million in severance, $9.14 million in accelerated vesting of equity he was entitled to as part of his compensation package, and $2.2 million owed to him under the company’s retirement plan. Had he been terminated “for cause,” which almost never happens among CEOs in the world of U.S. publicly traded companies, the company indicated he would not have been entitled to any payments whatsoever.
Corporate governance expert and Georgetown University associate professor Jason Schloetzer told Fortune a board might terminate a CEO without cause after charges are brought to protect the company’s reputation, avoid legal disputes, and maintain operational stability—particularly when a for cause termination isn’t yet justified by the evidence.
“Terminating without cause reduces the risk of a wrongful termination lawsuit, especially when the charges haven’t yet resulted in a conviction and the board cannot prove the CEO’s involvement in the misconduct,” said Schloetzer. “The board’s decision certainly sends a message to shareholders that it is actively overseeing management and prioritizes the company’s long term interests over what may become a leadership distraction.”
Eric Hoffmann, vice president and chief data officer at compensation consulting firm Farient Advisors, told Fortune cash severance payments are typically a multiple of salary and a multiple of bonus and two times is relatively common. In First American’s case, both are 2x, which is not outside of market norms. In addition, the unvested restricted stock units DeGiorgio held at the time of termination were immediately vested on an accelerated basis. That means instead of DeGiorgio having to wait for the time period on his equity to elapse, he’ll get his shares relatively immediately, said Hoffman.
Hoffman also noted that DeGiorgio had just negotiated a new employment agreement with First American dated Feb. 18, 2025, which boosted his annual salary to $1 million. The agreement was slated to continue until Dec. 31, 2027—unless he was terminated earlier.
A spokesman for First American Financial did not comment beyond the company’s official statements.
After firing DeGiorgio, First American Financial named chief financial officer Mark Seaton, 47, as CEO and appointed him to the board. The board promoted former treasurer Matthew Wajner as CFO to replace Seaton and board chairman Dennis Gilmore will transition into executive chairman of First American, the company announced.
Following the leadership reshuffle, First American issued an amended shareholder report in connection with its annual stockholder meeting in May that reflected the new appointments and offered additional “clerical corrections” to the prior proxy statement, the company said. The revised proxy statement shows that DeGiorgio is entitled to various payments valued at $18.6 million upon being terminated without cause, whereas the proxy statement issued before his arrest and ouster showed the total as $16.4 million. The difference had been listed in the “Disability” column in the original proxy, said Hoffman.
“We are looking forward to our next chapter under the strong leadership of Mark Seaton,” said Gilmore in a press release. “No one is more ready to be our CEO than Mark, who has played a leading role in our most critical strategic initiatives, which are driving the digital transformation of our business. We want to thank Ken DeGiorgio for his many years of service to First American.”
Seaton has been CFO since 2013 and joined the company in 2006. DeGiorgio was named CEO in February 2022 and had been with the company for 25 years.
DeGiorgio’s legal team told Fortune earlier this month the former CEO responded to a bar patron on the cruise ship who “harassed” DeGiorgio’s wife, Nichol DeGiorgio, and made her feel “threatened and intimidated.”
“Although charged with a simple misdemeanor, Mr. DeGiorgio looks forward to being absolved of any wrongdoing,” his lawyer stated.
The San Juan field office of the FBI said cruise ship authorities alerted the FBI about the incident that allegedly took place on board the Virgin Voyages’ Resilient Lady in the early hours of March 31. The investigation is ongoing.
According to the affidavit, the alleged fight between DeGiorgio and a patron at the “On the Rocks” bar aboard the ship happened after Nichol DeGiorgio asked the barefoot patron, who was dancing, to put his shoes back on. The patron allegedly told DeGiorgio to “shut up,” and called her a “b–ch,” while showing her his middle finger.
The affidavit states surveillance footage showed DeGiorgio allegedly stand up, walk over to the patron, and wrap his hands around the patron’s throat. The victim told FBI agents Kenneth DeGiorgio compressed his throat with force while allegedly telling him, “I am going to f—ing kill you,” during the alleged assault. A bartender on the ship called security staff after the alleged fight.
“Violent crimes committed aboard cruise ships fall under federal jurisdiction and we take them very seriously,” said Acting Special Agent in Charge Devin J. Kowalski of the FBI’s San Juan Field Office. “If you break the law at sea, expect to face consequences on land.”
Attempts to reach DeGiorgio were unsuccessful.
This story was originally featured on Fortune.com
