NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS

WE WILL HOLD ON APRIL 20, 2023

 

To the Stockholders of

 

DONEGAL GROUP INC.:

 

We encourage you to read the accompanying proxy statement and our 2022 Annual Report to stockholders (our “2022 Annual Report”). The accompanying proxy statement, together with the enclosed form of proxy card, is first being mailed to our stockholders on or about March 17, 2023.

 

 

At our 2023 Annual Meeting, our stockholders will vote on the following items of stockholder business:

 

 

 

 

Our advance notice by-laws require that our stockholders submit to us, not later than 90 days and not earlier than 120 days prior to the first anniversary of the date on which we first mailed our proxy statement to stockholders for our most recent year’s annual meeting of stockholders, the information specified in those by-laws regarding any nomination by a stockholder of a candidate for election as a director or any proposal by a stockholder of any other item of stockholder business a stockholder wishes our stockholders to consider at our next forthcoming annual meeting of stockholders. Those dates were between November 18, 2022 and December 18, 2022 with respect to our 2023 Annual Meeting and are between November 18, 2023 and December 18, 2023 with respect to our 2024 annual meeting of stockholders. No stockholder made another nomination or other proposal for consideration by our stockholders at our 2023 Annual Meeting.

 

Our board of directors has established the close of business on March 1, 2023 as the record date for the determination of the holders of our Class A common stock and for the determination of the holders of our Class B common stock entitled to notice of, and to vote at, our 2023 Annual Meeting. We include our 2022 Annual Report with this notice of our 2023 Annual Meeting and our proxy statement relating to our 2023 Annual Meeting. You may vote at our 2023 Annual Meeting by mail, by telephone or via the Internet as we describe on the enclosed proxy card that you may use to vote by proxy at our 2023 Annual Meeting.

 

Important Notice Regarding the Availability of Our Proxy Materials for

Our April 20, 2023 Annual Meeting

 

This mailing includes our notice of our 2023 Annual Meeting, our proxy statement with respect to our 2023 Annual Meeting and our 2022 Annual Report. You may also view each of these documents on the Internet at www.proxyvote.com. No information on our website other than our notice of our 2023 Annual Meeting, this proxy statement with respect to our 2023 Annual Meeting and our 2022 Annual Report constitutes a part of our proxy solicitation materials for our 2023 Annual Meeting or part of our 2022 Annual Report.

DONEGAL GROUP INC.

 

PROXY STATEMENT

Introduction

 

This proxy statement contains information relating to our 2023 Annual Meeting. We will hold our 2023 Annual Meeting as a “virtual meeting” on Thursday, April 20, 2023 at 10:00 a.m., Eastern time. You will be able to attend our 2023 Annual Meeting, vote and submit questions during our 2023 Annual Meeting via live webcast only at www.virtualshareholdermeeting.com/DGICA2023. In order to participate, vote and submit questions in our 2023 Annual Meeting, you will need to have your 16-digit control number that is included on the proxy card we include with this notice of our 2023 Annual Meeting and our proxy statement relating to our 2023 Annual Meeting. Guests may participate in the webcast but will not have the ability to vote or ask questions during our 2023 Annual Meeting.

 

On March 17, 2023, we commenced the mailing to our stockholders of record at the close of business on March 1, 2023 of:

 

 

 

 

 

We ask our stockholders to return their completed proxy cards promptly unless a stockholder prefers to vote by telephone or via the Internet at www.proxyvote.com.

 

We will pay the costs of preparing and mailing our proxy materials for our 2023 Annual Meeting to our stockholders and making those materials available for our stockholders to view on the Internet. We will, upon request, reimburse brokers, nominees, fiduciaries, custodians and other record holders for their reasonable expenses in forwarding our proxy solicitation materials for our 2023 Annual Meeting to the beneficial owners of our Class A common stock and to the beneficial owners of our Class B common stock for whom such persons serve as record holders. We may also solicit proxies from some stockholders in person, by mail, by e-mail or by telephone through our directors, officers and regular employees whom we do not employ specifically for proxy solicitation purposes and none of whom will receive any additional compensation for performing such services.

Summary of Our 2022 Performance

 

For 2022, our total revenues increased 3.9% compared to 2021, with the increase largely related to a 6.0% increase in net premiums earned for 2022 compared to 2021. We had a net loss of $2.0 million and a net loss per Class A share of 6 cents for 2022, compared to net income of $25.3 million and net income per diluted Class A share of 83 cents for 2021. The following table depicts our total revenues, net (loss) income, net (loss) income per diluted Class A share and net (loss) income per Class B share for the three years ended December 31, 2022, 2021 and 2020. For further information, we refer you to the financial statements we include in our 2022 Annual Report.

 

 

We use the following defined terms in this proxy statement:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	Page
PROXY STATEMENT	i
Introduction	i
Summary of Our 2022 Performance	ii
OUR 2023 ANNUAL MEETING	1
OUR BUSINESS STRATEGIES	14
CERTAIN BENEFICIAL OWNERS OF OUR CLASS A COMMON STOCK AND OUR CLASS B COMMON STOCK	15
Beneficial Owners of 5% or More of Our Class A Common Stock or Our Class B Common Stock	15
The Beneficial Ownership of Our Stock by Our Directors and Executive Officers	15
Delinquent Section 16(a) Reports	17
THE RELATIONSHIP OF DONEGAL MUTUAL AND DGI	17
Introduction	17
Donegal Mutual's Controlling Interest in Our Common Stock	17
The Interrelated Operations of Donegal Mutual and Our Insurance Subsidiaries	18
Inter-Company Transactions	20
The Coordinating Committee	21
The Risk Management Committee	23
CORPORATE GOVERNANCE	24
The Composition of Our Board of Directors	25
Board Leadership Structure and the Role of Our Board of Directors in Risk Oversight	26
The Committees of Our Board of Directors	27
Compensation Committee Interlocks and Insider Participation	31
Related Person Transactions	31
Our Code of Business Conduct and Ethics; Our Internal Audit Department; Hedging	32
No Material Proceedings	32
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS	33
Executive Summary	33
2022 Performance Review	33
Our Compensation Process	34
Summary of the 2022 Compensation of Our Named Executive Officers	34
Director Compensation	38
Our Compensation Philosophy and Risk Management Considerations	43
Employment Agreements with Our Named Executive Officers	45
Potential Payments to Our Named Executive Officers upon Termination or a Change-of -Control	46
Limitations on the Deductibility of Compensation	49
Our Cash Incentive Bonus Plan	50
Our Long-Term Executive Incentive Plan	52

Other Aspects of Our Compensation Philosophy	53
Summary Compensation Table	53
Grants of Plan-Based Awards	55
Stock Incentive Plans	55
Outstanding Equity Awards at December 31, 2022	57
Option Exercises and Stock Vested	58
Pension Benefits	58
Non-Qualified Deferred Compensation	58
Limitation of Liability and Indemnification	58
Pay Ratio Disclosure	59
Pay Versus Performance	60
Joint Report of the Compensation Committees of Donegal Mutual and DGI	61
Equity Compensation Plan Information	62
PROPOSAL 1 – ELECTION OF DIRECTORS	62
PROPOSAL 2 – APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	69
PROPOSAL 3 – DETERMINATION OF THE FREQUENCY ON WHICH WE SUBMIT TO OUR STOCKHOLDERS THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	70
PROPOSAL 4 – RATIFICATION OF THE APPOINTMENT BY OUR AUDIT COMMITTEE OF KPMG LLP TO SERVE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023	72
AUDIT AND NON-AUDIT FEES	73
Report of our Audit Committee	74
STOCKHOLDER PROPOSALS FOR OUR 2024 ANNUAL MEETING OF STOCKHOLDERS	76
HOUSEHOLDING	77
DIRECTOR - STOCKHOLDER COMMUNICATIONS	79
OTHER MATTERS	79

•

the election of the following four persons our board of directors has nominated to serve as Class A directors, each for a term of three years and until the election of their respective successors and their respective successors take office:

•

the approval, on a non-binding advisory basis, of the compensation of our named executive officers;

•

the determination of the frequency of our submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers; and

•

the ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2023.

•

no stockholder may validly present a nomination of a candidate for election as a Class A director or validly propose any other item of stockholder business; and

•

we will not conduct a vote of our stockholders on any item of stockholder business other than those four items of stockholder business we describe in this proxy statement and in our accompanying notice of our 2023 Annual Meeting and procedural matters related to the conduct of our 2023 Annual Meeting.

•

the stockholder of record makes a written request to make such an examination at our principal executive offices during such ten-day period addressed to Jeffrey D. Miller, our executive vice president and chief financial officer; and

•

we determine, in our discretion, that the stockholder of record’s request to examine our stockholder list is proper and legally relevant to one of the four items of stockholder business we will conduct at our 2023 Annual Meeting.

Item of Business		Routine		Non-Routine
Election of Class A directors				X
Approval, on a non-binding advisory basis, of the compensation of our named executive officers				X
Determination of the frequency on which we submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers				X
Ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for the year ending December 31, 2023		X

Proposals for Your Vote		Voting Options		Vote Required		Effect of Abstentions		Effect of Broker Non-Votes
Election of four Class A directors		“For” or “Withhold”		Plurality of the votes cast		No effect		No effect
Approval, on a non-binding advisory basis, of the compensation of our named executive officers		“For,” “Against” or “Abstain”		Majority of votes cast		No effect		No effect
Determination of the frequency on which we submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers		“1 year,” “2 years,” “3 years” or “Abstain”		Majority of votes cast		No effect		No effect
Ratification of appointment of independent public accounting firm		“For,” “Against” or “Abstain”		Majority of votes cast		No effect		Brokers have discretion to vote

•

27,163,117 shares of our Class A common stock, each share of which entitles its holder to cast one-tenth of a vote per share with respect to each matter we submit to a vote of our stockholders at our 2023 Annual Meeting; and

•

5,576,775 shares of our Class B common stock, each share of which entitles its holder to cast one vote per share with respect to each matter we submit to a vote of our stockholders at our 2023 Annual Meeting.

•

the holders of record of all of our outstanding shares of Class A common stock have the right to cast a total of 2,716,311 votes on each matter we submit to a vote of our stockholders at our 2023 Annual Meeting;

•

the holders of record of all of our outstanding shares of Class B common stock have the right to cast a total of 5,576,775 votes on each matter we submit to a vote of our stockholders at our 2023 Annual Meeting; and

•

the holders of record of all of our outstanding shares of Class A common stock and the holders of record of all of our outstanding shares of Class B common stock voting together as a single class have the right to cast a total of 8,293,086 votes on each matter we submit to a vote of our stockholders at our 2023 Annual Meeting.

•

for the election of Kevin G. Burke, Jack L. Hess, David C. King and Annette B. Szady to serve as Class A directors, each for a term of three years and until the election of their respective successors and their respective successors take office;

•

for the approval, on a non-binding advisory basis, of the compensation of our named executive officers;

•

for the approval of our submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers once every three years; and

•

for the ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2023.

•

elect Kevin G. Burke, Jack L. Hess, David C. King and Annette B. Szady to serve as Class A directors, each for a term of three years and until the election of their respective successors and their respective successors take office;

•

approve, on a non-binding advisory basis, the compensation of our named executive officers;

•

approve our submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers once every three years; and

•

ratify the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2023.

•

the election of four Class A directors;

•

the approval, on a non-binding advisory basis, of the compensation of our named executive officers; or

•

the determination of the frequency on which we submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers.

•

For the election of Kevin G. Burke, Jack L. Hess, David C. King and Annette B. Szady to serve as Class A directors, each for a term of three years and until the election of their respective successors and their respective successors take office;

•

For the approval, on a non-binding advisory basis, of the compensation of our named executive officers;

•

For three years as the frequency of our submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers; and

•

For ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2023.

•

For the election of the four nominees for Class A directors we name in this proxy statement;

•

For the approval, on a non-binding advisory basis, of the compensation of our named executive officers;

•

For three years as the frequency of our submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers; and

•

For ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2023.

•

submitting to our corporate secretary a notice of revocation of your proxy by telephone, via the Internet or by mail at Donegal Group Inc., P.O. Box 302, Marietta, PA 17547;

•

returning a second proxy dated later than the date of your first proxy by telephone, via the Internet or by mail; or

•

voting during our 2023 Annual Meeting live webcast.

•

achieving sustained excellent financial performance by carefully selecting product lines and individual risks, utilizing data analytics and predictive modeling tools to inform risk selection and pricing decisions, managing property exposures in catastrophe-prone areas and evaluating claims history on a regular basis to analyze the adequacy of the underwriting guidelines and product pricing of our insurance subsidiaries;

•

strategically modernizing our operations and processes to transform our business through the utilization of technology, development and expansion of risk-based pricing segmentation, analytical innovation, predictive modeling solutions, formal data strategies, performance monitoring, enhanced reporting mechanisms and process excellence;

•

capitalizing on opportunities to grow profitably by expanding organically within the existing markets of our insurance subsidiaries, developing, maintaining and expanding quality independent insurance agency representation and executing state-specific strategies for growth or reduction of premiums, agency distribution and enhanced profit generation over the next several years;

•

delivering a superior experience to agents and policyholders by providing fully automated underwriting and policy issuance portals that substantially ease data entry and facilitate the quoting and issuance of policies for the independent agents of our insurance subsidiaries and providing a consistently responsive level of claims service, underwriting and customer support; and

•

exploring opportunities to acquire property and casualty insurance companies to augment the organic growth of our insurance subsidiaries and expand our business in a given region over time.

		Class A Common Stock								Class B Common Stock
Name and Address of Beneficial Owner		Shares Beneficially Owned				Percent Owned				Shares Beneficially Owned				Percent Owned
Donegal Mutual Insurance Company 1195 River Road Marietta, PA 17547			11,578,470				42.6	%			4,708,570				84.4	%
Dimensional Fund Advisors LP(1) 6300 Bee Cave Road Austin, TX 78746			1,766,769				6.5				—				—
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055			1,516,848				5.6				—				—

(1)	Dimensional Fund Advisors LP reported the ownership information shown in the above table in a Schedule 13G/A it filed with the SEC on February 10, 2023. Dimensional Fund Advisors LP disclaims beneficial ownership of these shares.

(2)	BlackRock, Inc. reported the ownership information shown in the above table in a Schedule 13G/A it filed with the SEC on February 1, 2023.

		Class A Common Stock								Class B Common Stock
Name of Individual or Identity of Group(1)		Shares Beneficially Owned				Percent Owned				Shares Beneficially Owned				Percent Owned
Directors:
Scott A. Berlucchi			41,397				—				—				—
Dennis J. Bixenman			40,655				—				—				—
Kevin G. Burke			247,747				—				—				—
Jack L. Hess			121,138				—				—				—
Barry C. Huber			29,867				—				—				—
David C. King			6,000				—				—				—
Kevin M. Kraft, Sr.			45,936				—				—				—
Jon M. Mahan			41,988				—				—				—
S. Trezevant Moore, Jr.			58,655				—				1,000				—
Annette B. Szady			6,000				—				—				—
Richard D. Wampler, II			43,102				—				—				—
Named Executive Officers:
Jeffrey D. Miller			278,655				1.0	%			584				—
Jeffery T. Hay			15,340				—				—				—
Sanjay Pandey			235,233				—				—				—
Daniel J. Wagner			292,785				1.1				166				—
All directors and executive officers as a group (23 persons)			2,168,414				7.5				1,750				—

(1)	Each director we name above holds currently exercisable stock options or options that become exercisable within 60 days after March 1, 2023 to purchase 33,500 shares of our Class A common stock with the exception of the following directors:

•

Mr. Burke holds currently exercisable stock options to purchase 236,000 shares of our Class A common stock;

•

Mr. Huber holds currently exercisable stock options to purchase 15,500 shares of our Class A common stock; and

•

Mr. King and Mrs. Szady hold currently exercisable stock options to purchase 4,500 shares of our Class A common stock.

•

our stockholders;

•

the policyholders of our insurance subsidiaries and the policyholders of Donegal Mutual;

•

Donegal Mutual’s employees who provide services to us and our insurance subsidiaries pursuant to a services agreement we describe later in this proxy statement;

•

the independent insurance agents who represent Donegal Mutual and our insurance subsidiaries; and

•

the local communities in which Donegal Mutual, we and our insurance subsidiaries maintain offices.

•

facilitating the stable management, consistent underwriting discipline, external growth and long-term profitability of the Donegal Insurance Group;

•

creating operational and expense synergies given the combined resources and operating efficiencies of the member companies of the Donegal Insurance Group;

•

providing Donegal Mutual and Atlantic States with a significantly larger underwriting capacity than either company could achieve independently because of the underwriting pool Donegal Mutual and Atlantic States maintain;

•

enhancing our opportunities to expand by acquisition because of the ability of Donegal Mutual to acquire control of other mutual insurance companies, reinsure substantially all of their insurance business and place such reinsured business in the underwriting pool; and

•

producing more uniform and stable underwriting results for the Donegal Insurance Group than any of the individual member companies could achieve without the relationships between Donegal Mutual and our insurance subsidiaries we describe in this proxy statement.

•

both of our members on the coordinating committee determine that the new agreement or the change in an existing agreement is fair and equitable to us and in the best interests of our stockholders; and

•

both of Donegal Mutual’s members on the coordinating committee determine that the new agreement or the change in an existing agreement is fair and equitable to Donegal Mutual and in the best interests of Donegal Mutual’s policyholders.

•

evaluating the effectiveness of the Donegal Insurance Group’s assessment and management of the risks that may be material to the Donegal Insurance Group;

•

developing and recommending policies and procedures relating to risk assessment, risk management and risk reporting;

•

oversight of our system of disclosure controls and system of internal controls over financial reporting;

•

complying with applicable legal and regulatory requirements;

•

assessing the Donegal Insurance Group’s risk management, legal compliance and risk-control activities and the adequacy of such activities in identifying, assessing and monitoring the risks that confront the Donegal Insurance Group;

•

reporting periodically to the respective boards of directors of Donegal Mutual and us, including providing a relative ranking of the strategic, operational, regulatory, informational and external risks that affect the business the Donegal Insurance Group transacts; and

•

analyzing annually the committee’s performance of the responsibilities assigned to it.

•

the recommendation of the appointment of an independent registered public accounting firm for our insurance company subsidiaries;

•

the review of the financial condition of our insurance company subsidiaries;

•

the review of the scope and results of the independent audit and any internal audit of our insurance company subsidiaries;

•

the nomination of candidates for election as our directors by our stockholders; and

•

the evaluation of the performance of the principal officers of each of our insurance company subsidiaries and the recommendation to their respective boards of directors as to the selection and compensation of their respective principal officers.

•

the executive committee;

•

the audit committee;

•

the nominating committee; and

•

the compensation committee.

		Our Board Committees
		Executive				Audit				Nominating				Compensation
Number of Meetings Held in 2022			12				8				1				3
Number of Meetings Attended in 2022 by Members of the Committees:
Kevin G. Burke			12				—				—				—
Jack L. Hess			12				8				1				3
Barry C. Huber			—				8				—				—
Kevin M. Kraft, Sr.			12				—				1				3
Jon M. Mahan			—				8				1				—
S. Trezevant Moore, Jr.			—				—				—				3
Richard D. Wampler, II			—				8				1				3

•

management’s development and implementation of a multi-year strategic business plan and an annual financial operating plan, and our progress in meeting those financial and strategic plans;

•

management’s identification, measurement, monitoring and control of the material risks we encounter, including operational, credit, market, liquidity, compliance, strategic and reputational risks;

•

our maintenance of high ethical standards and effective policies designed to protect our reputation, our assets and our business;

•

the on-going review of cybersecurity and information security risk in order to maintain the confidence and trust of our stockholders, the policyholders of Donegal Insurance Group, our employees and the others with whom we conduct business;

•

review of the performance of our chief executive officer and the setting of his compensation and the compensation of our other named executive officers; and

•

the conduct of our annual self-evaluation of our board of directors and its committees.

•

exercising all powers and authority of our board of directors between meetings of our board of directors to the extent consistent with the DGCL and our corporate governance guidelines;

•

consulting with and advising our management on our general business, operational, administrative and legal affairs;

•

consulting with and advising our management on the development of our policies;

•

analyzing other matters that our management may bring to the executive committee for consideration from time to time; and

•

performing such other functions as our board of directors may specifically delegate to the executive committee from time to time.

•

the annual appointment of our independent registered public accounting firm after a review of the performance, qualification and independence of our independent registered public accounting firm;

•

the on-going review of the scope and results of the audit of our financial statements by our independent registered public accounting firm and the internal audits our staff conducts;

•

the review of all of the periodic reports we file with the SEC and press releases before the filing of the SEC reports or the publication of the press releases;

•

the annual review of all related person transactions to which we are one of the parties other than those transactions between Donegal Mutual and us or one or more of our insurance subsidiaries that are subject to review by the coordinating committee; and

•

the regular review of the adequacy of our financial and operating internal controls.

•

the identification of individuals the nominating committee believes have the necessary qualifications to serve as members of our board of directors;

•

the recommendation of nominees to stand for election to our board of directors;

•

the consideration of candidates nominated by stockholders other than Donegal Mutual to stand for election to our board of directors;

•

the evaluation of the self-evaluations each of the committees of our board of directors submits to us annually; and

•

the provision to our board of directors of the nominating committee’s annual evaluation of its performance during the preceding year.

•

the annual review of the compensation of all of our salaried employees;

•

the annual review of the performance and compensation of our executive officers, including our named executive officers;

•

the recommendation to our board of directors from time to time as to grants of stock awards to our employees and directors; and

•

the oversight of the employee benefit plans Donegal Mutual and we maintain.

•

evaluate the merits and conditions of stockholder proposals;

•

evaluate the advisability of recommending to our board of directors acceptance or rejection of stockholder proposals;

•

present to our board of directors the results of the committee’s evaluation of stockholder proposals and its recommendations, including the reasons for its recommendations, with respect to such stockholder proposals; and

•

undertake such other responsibilities as our board of directors may assign from time to time to the special committee and report to our board of directors with respect to any such other matter.

		At or For the Year Ended December 31,
		2022				2021				Increase/ Decrease
Total revenues		$848.2 million				$816.5 million					3.9	%
Net (loss) income		(2.0 million)				25.3 million				NM
Class A common stock price			14.20				14.29				-0.6
Class B common stock price			16.27				13.47				20.8

•

a base salary paid bi-weekly in cash;

•

an incentive bonus paid in cash following the determination of our achievement of certain performance objectives pursuant to our annual cash incentive bonus plan for our immediately preceding completed fiscal year;

•

an incentive bonus paid in cash following the determination of our achievement of certain performance objectives pursuant to our long-term cash incentive bonus plan for the three-year period that included the calendar years of 2020, 2021 and 2022; and

•

long-term incentive compensation in the form of stock options that we granted in December.

Name of Named Executive Officer		Number of Shares Purchasable
Kevin G. Burke			24,000
Jeffrey D. Miller			21,000
Jeffery T. Hay			18,000
Sanjay Pandey			18,000
Daniel J. Wagner			18,000

Annual Compensation		Key Factors		Purpose		2022 Actions
Base Salary		Compensation committee reviews and recommends adjustments to base salary annually based on performance and prevailing salaries within our peer group		Provides fixed amount of cash on which named executive officers may rely		Cash increase for 2022 of an average of 4.2% to reflect salary increases within our peer group
Annual Incentive Plan (Cash Incentive Award)		Compensation committee determines funding level on a formula basis tied to the commercial lines growth, personal lines growth and underwriting results of the Donegal Insurance Group and our operating return on equity		Motivates named executive officers to achieve business plan objectives of the Donegal Insurance Group and operating return on equity objectives for us Reinforces pay for performance		We determined cash bonuses for 2022 under a formula based on our commercial lines growth, personal lines growth, underwriting results and operating return on equity for 2022 Cash bonuses earned for 2022 related to meeting commercial lines and personal lines growth performance objectives only
Long-Term Incentive Plan (Cash Incentive Award)		Compensation committee determines funding level on a formula basis tied to the average adjusted statutory combined ratio for the Donegal Insurance Group over a three-year period		Motivates named executive officers to achieve sustained underwriting profitability Reinforces pay for performance		We determined cash bonuses under a formula based on the average adjusted statutory combined ratio for the Donegal Insurance Group for the three-year period that included calendar years 2020, 2021 and 2022

Type of Compensation			Amount		Form of Payment
	Additional retainer amount for each audit committee meeting attended		$750		Cash
Periodic Equity Grant	When we grant options to our executive officers, we also typically grant options to our directors that are exercisable for five years at the closing market price of our Class A common stock on the day before the date of grant and that vest in three equal annual cumulative installments		Option to purchase 4,500 shares of our Class A common stock at $14.09 per share valued at $6,660 on the December 15, 2022 date of grant		Non-qualified stock options to purchase shares of our Class A common stock

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Option Awards ($)				Total ($)
Scott A. Berlucchi			98,600				7,145				6,660				112,405
Dennis J. Bixenman			101,700				7,145				6,660				115,505
Jack L. Hess			109,800				7,145				6,660				123,605
Barry C. Huber			96,500				7,145				6,660				110,305
David C. King			90,000				7,145				6,660				103,805
Kevin M. Kraft, Sr.			101,900				7,145				6,660				115,705
Jon M. Mahan			97,000				7,145				6,660				110,805
S. Trezevant Moore, Jr.			90,900				7,145				6,660				104,705
Annette B. Szady			93,500				7,145				6,660				107,305
Richard D. Wampler, II			99,600				7,145				6,660				113,405

		Option Awards													Stock Awards
		Number of Securities Underlying Unexercised Option								Option Exercise Price ($)			Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)
Name		(#) Exercisable				(#) Unexercisable
Scott A. Berlucchi			12,000				—				15.90		12/19/2023			500				7,100
			8,000				—				15.80		12/18/2024
			4,500				—				13.69		12/20/2023
			4,500				—				14.98		12/19/2024
			3,000				1,500				14.43		12/17/2025
			1,500				3,000				14.39		12/16/2026
			—				4,500				14.09		12/15/2027
Dennis J. Bixenman			12,000				—				15.90		12/19/2023			500				7,100
			8,000				—				15.80		12/18/2024
			4,500				—				13.69		12/20/2023
			4,500				—				14.98		12/19/2024
			3,000				1,500				14.43		12/17/2025
			1,500				3,000				14.39		12/16/2026
			—				4,500				14.09		12/15/2027
Jack L. Hess			12,000				—				15.90		12/19/2023			500				7,100
			8,000				—				15.80		12/18/2024
			4,500				—				13.69		12/20/2023
			4,500				—				14.98		12/19/2024
			3,000				1,500				14.43		12/17/2025
			1,500				3,000				14.39		12/16/2026
			—				4,500				14.09		12/15/2027
Barry C. Huber			4,000				—				15.90		12/19/2023			500				7,100
			2,500				—				15.80		12/18/2024
			4,500				—				14.98		12/19/2024
			3,000				1,500				14.43		12/17/2025
			1,500				3,000				14.39		12/16/2026
			—				4,500				14.09		12/15/2027
David C. King			3,000				1,500				14.43		12/17/2025			500				7,100
			1,500				3,000				14.39		12/16/2026
			—				4,500				14.09		12/15/2027

•

Attract and retain talented and dedicated executive officers who contribute to our growth, development and profitability and encourage the retention of our executive officers.

•

We believe we achieved this objective because our named executive officers we include in our summary compensation table in this proxy statement have served us for 20 years or more or have extensive insurance industry experience.

•

Motivate our executive officers to achieve our strategic business objectives and reward them upon their achievement of those objectives.

•

We believe we achieved this objective because our named executive officers executed a number of strategic initiatives, including continued growth within our commercial lines segment and growth within our personal lines segment following the successful launch of new products, during 2022.

•

Provide long-term compensation to our executive officers that rewards them for sustained financial and operating performance and leadership excellence.

•

We believe our long-term cash incentive plan and stock option grants appropriately reward our executive officers for sustained financial and operating leadership and performance.

•

The financial measures we use to determine the bonuses of our executive officers are metrics our compensation committee believes promote long-term stockholder value. These measures include our premium growth, underwriting results and operating return on equity. Our compensation committee sets limits on these bonus payments that encourage success without encouraging excessive risk-taking or short-term results.

•

We grant stock options that are exercisable for five years from the date of grant at the closing price of our Class A common stock on the day before the date of grant. Our compensation committee believes such stock options encourage our executive officers to attain sustained long-term performance.

•

We do not reduce the exercise price of stock options if the price of our Class A common stock subsequently declines below the exercise price of the stock options unless we first obtain stockholder approval. However, we do adjust the exercise price of previously granted stock options to reflect recapitalizations, stock or extraordinary dividends, stock splits, mergers, spin-offs and similar events as the applicable stock compensation plan permits.

•

The initial term of the employment agreements is three years ending September 30, 2023 for Messrs. Pandey and Wagner, three years ending December 31, 2024 for Mr. Hay and forty-two months ending March 31, 2024 for Messrs. Burke and Miller, provided that the term of each employment agreement will automatically extend for one additional year following the initial term unless the named executive officer or the respective boards of directors of Donegal Mutual or us provide not less than 60 days advance notice that the employment agreement will expire at the end of the then-current term.

•

The respective employment agreements among Donegal Mutual, us and our named executive officers include customary provisions relating to indemnification, confidentiality and non-solicitation.

•

The respective employment agreements among Donegal Mutual, us and Messrs. Burke and Miller include a non-compete provision that extends for two years following a termination of employment (regardless of the reason for termination) with regard to any insurance company, insurance holding company or other entities that offer services or products competitive with the services or products that Donegal Mutual, us or our respective subsidiaries or affiliates currently offer or offer in the future.

•

We and Donegal Mutual have agreed to pay our named executive officers an annual base salary in the amount the compensation committee of Donegal Mutual and we recommend and our board of directors and the board of directors of Donegal Mutual each respectively approve from time to time, but in no event less than the minimum amount stated in the employment agreements of our named executive officers.

•

The respective employment agreements among Donegal Mutual, us and our named executive officers grant our named executive officers the right to participate in our incentive programs, including those relating to the standards and objectives set forth in our executive incentive plans, and benefit plans.

•

The employment agreements contain customary provisions relating to vacations, disability and death.

•

The employment agreements include certain rights to terminate the employment agreements and, upon the occurrence of certain events, such as a change-of-control, the right to receive severance payments, as the respective employment agreements provide.

•

“Voluntary Termination” includes the voluntary resignation of a named executive officer.

•

“Involuntary-for-Cause Termination” includes a termination of the employment of a named executive officer for reasons such as violation of certain policies or for certain performance-related issues.

•

“Involuntary Termination” includes a termination of the employment of a named executive officer other than for cause, but not including a termination related to a Change-of-Control. Terminations due to death or disability result in substantially the same treatment as an Involuntary Termination.

•

“Change-of-Control,” as defined in the employment agreements we have entered into with each of our named executive officers, includes the occurrence of one of the types of transaction we describe below:

•

the acquisition of shares of our Class A common stock and our Class B common stock by any person or group in a transaction or series of transactions that result in such person or group directly or indirectly first owning more than 25% of the aggregate voting power of our Class A common stock and our Class B common stock taken as a single class; or

•

the consummation of a merger of Donegal Mutual or other business combination transaction involving Donegal Mutual in which Donegal Mutual is not the surviving entity; or

•

the consummation of a merger of DGI or other business combination transaction involving DGI after which the holders of our outstanding voting capital stock taken as a single class do not collectively own 60% or more of the aggregate voting power of the entity surviving such merger or other business combination transaction; or

•

the sale, lease, exchange or other transfer in a transaction or series of transactions of all or substantially all of our assets, but excluding therefrom the sale and re-investment of our consolidated investment portfolio; or

•

a change in the composition of the board of directors of Donegal Mutual or us, wherein the persons who constituted a majority of the members of the respective boards of directors of us or Donegal Mutual on October 1, 2020 and persons whose election as members of their respective boards received the approval of such members then still in office no longer constitute at least a majority of the respective boards of directors of us or Donegal Mutual.

•

the executive’s base salary accrued through the date the termination of the executive’s employment becomes effective;

•

any incentive compensation we have the obligation to pay to the executive pursuant to our employment agreement with that named executive officer;

•

any amounts payable under any of the benefit plans Donegal Mutual or we maintain in accordance with the terms of such plans;

•

severance pay in an amount equal to 36 months of the named executive officer’s annual base salary as of the effective date of termination of the employment of the named executive officer, payable in 36 equal consecutive monthly installments, commencing on Donegal Mutual's first regularly scheduled payroll date occurring after the date of the termination of the employment of that named executive officer;

•

in the case of Messrs. Burke and Miller, additional severance pay in an amount equal to six months of their respective annual base salary as of the effective date of termination of their employment, payable in six equal consecutive monthly installments, commencing after the conclusion of the initial 36-month severance payment;

•

an amount equal to the aggregate premiums that Donegal Mutual and the named executive officer would have paid to maintain in effect the same medical, health, disability and life insurance coverage Donegal Mutual provided to that named executive officer immediately prior to the date of such termination had the named executive officer remained employed for 36 months following the date of termination, assuming no increase in insurance premium rates; and

•

any amount in respect of excise taxes Donegal Mutual and we have the obligation to pay to that named executive officer under our employment agreement with such officer.

•

a Change-of-Control occurred on December 31, 2022 under the terms of various plans and agreements unrelated to the employment agreements, regardless of a termination of employment;

•

the employment of each named executive officer terminated on December 31, 2022 due to each termination event, including termination within twelve months after a Change-of-Control, as the employment agreements contemplate; and

•

values related to outstanding stock options reflect the market value of our Class A common stock of $14.20 per share, the last reported price of our Class A common stock on the NASDAQ Global Market System on December 31, 2022.

Name		Event		Severance Benefits ($)				Stock Options ($)				Other Benefits ($)				Total ($)
Kevin G. Burke		Voluntary Termination			—				22,950				—				22,950
		Involuntary-for-Cause Termination			—				22,950				—				22,950
		Involuntary Termination			2,537,500				22,950				53,331				2,613,781
		Change-in-Control			2,537,500				22,950				53,331				2,613,781
Jeffrey D. Miller		Voluntary Termination			—				20,400				—				20,400
		Involuntary-for-Cause Termination			—				20,400				—				20,400
		Involuntary Termination			2,163,000				20,400				47,004				2,230,404
		Change-in-Control			2,163,000				20,400				47,004				2,230,404
Jeffery T. Hay		Voluntary Termination			—				867				—				867
		Involuntary-for-Cause Termination			—				867				—				867
		Involuntary Termination			1,326,000				867				59,694				1,386,561
		Change-in-Control			1,326,000				867				59,694				1,386,561
Sanjay Pandey		Voluntary Termination			—				17,850				—				17,850
		Involuntary-for-Cause Termination			—				17,850				—				17,850
		Involuntary Termination			1,404,000				17,850				53,331				1,475,181
		Change-in-Control			1,404,000				17,850				53,331				1,475,181
Daniel J. Wagner		Voluntary Termination			—				17,850				—				17,850
		Involuntary-for-Cause Termination			—				17,850				—				17,850
		Involuntary Termination			1,296,000				17,850				47,076				1,360,926
		Change-in-Control			1,296,000				17,850				47,076				1,360,926

(1)

Represents an amount equal to the aggregate premiums that Donegal Mutual would have paid to maintain in effect the same medical, health, disability and life insurance coverage Donegal Mutual provided to the named executive officer immediately prior to the date of such termination had the named executive officer remained employed for 36 months following the date of termination, assuming no increase in insurance premium rates.  There are no other payments that would be owed with respect to benefits or perquisites.

•

commercial lines direct premium growth rate for the Donegal Insurance Group;

•

personal lines direct premium growth rate for the Donegal Insurance Group;

•

adjusted statutory combined ratio for the Donegal Insurance Group; and

•

our operating return on equity.

Performance Measure		Weighting				Performance Objectives																												Actual Result
						Threshold				Level 1				Level 2				Target				Level 3				Level 4				Maximum
Commercial Lines Premium Growth			15	%			0.5	%			1.5	%			2.5	%			3.5	%			4.5	%			5.5	%			6.5	%			3.8	%
Personal Lines Premium Growth			15	%			-1.5	%			-0.5	%			0.5	%			1.5	%			2.5	%			3.5	%			4.5	%			5.2	%
Adjusted Statutory Combined Ratio			50	%			100.0	%			99.0	%			98.0	%			97.0	%			96.0	%			95.0	%			94.0	%			101.1	%
Operating Return on Equity			20	%			7.5	%			8.0	%			8.5	%			9.0	%			9.5	%			10.0	%			10.5	%			1.2	%

Percentage of Base Salary
Threshold				Level 1				Level 2				Target				Level 3				Level 4				Maximum
	40.0%				50.0%				60.0%				70.0%				80.0%				90.0				100.0%

Adjusted Statutory		Performance Objectives
Combined Ratio		Under 94%					94-94.99%				95-95.99%				96-96.99%				97-97.99%				98-98.99%				99-99.99%		Over 100%
Percentage of Base Salary			85%				70%				60%				50%				40%				25%				15%		None

Name and Principal Position	Year		Salary($)				Annual Cash Bonus ($)(1)				Long- Term Cash Bonus ($)(2)				Stock Awards ($)				Option Awards ($)(3)				All Other Compen- sation ($)(4)				Total ($)
Kevin G. Burke,	2022			725,000				184,728				108,663				7,145				35,520				119,375				1,180,431
President and Chief Executive Officer	2021			695,000				173,635				—				7,035				29,040				112,850				1,017,560
	2020			665,000				485,718				—				7,410				31,050				101,100				1,290,278
Jeffrey D. Miller,	2022			618,000				157,443				92,614				7,145				31,080				108,575				1,014,857
Executive Vice President and Chief Financial Officer	2021			588,000				146,892				—				7,035				25,410				103,850				871,187
	2020			560,000				408,846				—				—				27,600				97,600				1,094,046
Jeffery T. Hay,	2022			442,000				112,627				44,167				—				26,640				13,815				639,249
Senior Vice President(5)	2021			425,000				104,942				—				—				21,780				113,125				664,847
Sanjay Pandey,	2022			468,000				119,252				70,148				—				26,640				18,075				702,115
Senior Vice President and Chief Information Officer	2021			450,000				112,404				—				—				21,780				17,350				601,534
	2020			425,000				310,173				—				—				24,150				17,100				776,423
Daniel J. Wagner	2022			432,000				110,101				64,765				—				26,640				18,034				651,540
Senior Vice President and Treasurer	2021			420,000				104,942				—				—				21,780				17,350				564,072
	2020			405,000				296,019				—				—				24,150				17,100				742,269

(1)	Our executive officers are eligible to participate in an annual cash incentive bonus plan. We refer you to “Executive Compensation – Our Cash Incentive Bonus Plan” elsewhere in this proxy statement.

(2)	Our executive officers are eligible to participate in a long-term cash incentive bonus plan. We refer you to “Executive Compensation – Our Long-Term Executive Incentive Plan” elsewhere in this proxy statement.

(3)

We show the option awards at an estimated grant date fair value, which we calculated by using an option pricing model. Further, the options are subject to a vesting schedule, and the estimated value obtained from the option pricing model does not represent actual value based upon trading prices of our Class A common stock at the grant date. See Note 13 to our Consolidated Financial Statements included in our 2022 Annual Report for information on the accounting treatment and calculation of the grant date fair value of these stock options.

(4)

In the case of Messrs. Burke and Miller, the totals shown include directors fees of $101,300 and $90,500, respectively, and a matching 401(k) plan contribution of $18,075 paid during 2022. Mr. Burke serves on the our board of directors and the board of directors of Donegal Mutual. Mr. Miller serves on the board of directors of Donegal Mutual. In the case of Messrs. Hay, Pandey and Wagner, the totals shown represent matching 401(k) plan contributions paid during 2022.

(5)	Mr. Hay became an officer upon commencement of his employment in January 2021.

Name		Grant Date		Number of Securities Underlying Options(#)				Exercise or Base Price of Option Awards($)				Grant Date Fair Value of Option Awards($)
Kevin G. Burke		12/15/2022			24,000				14.09				35,520
Jeffrey D. Miller		12/15/2022			21,000				14.09				31,080
Jeffery T. Hay		12/15/2022			18,000				14.09				26,640
Sanjay Pandey		12/15/2022			18,000				14.09				26,640
Daniel J. Wagner		12/15/2022			18,000				14.09				26,640

•

the authority to determine the persons eligible to receive an option or restricted stock grant, the number of shares subject to each option or restricted stock award, the exercise price of each option, the vesting schedule, the circumstances in which the vesting of options or restricted stock awards may accelerate and any extension of the period for exercise; and

•

the authority to determine any matter relating to options or restricted stock awards granted under our stock incentive plans.

		Option Awards													Stock Awards
Name		Number of Securities Underlying Unexercised Options								Option Exercise Price ($)			Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)				Market Value of Shares or Units of Stock That Have Not Vested ($)
		(#) Exercisable				(#) Unexercisable
Kevin G. Burke			75,000				—				15.90		12/19/2023			500				7,100
			45,000				—				15.80		12/18/2024
			45,000				—				13.69		12/20/2023
			45,000				—				14.98		12/19/2024
			18,000				9,000				14.43		12/17/2025
			8,000				16,000				14.39		12/16/2026
			—				24,000				14.09		12/15/2027
Jeffrey D. Miller			75,000				—				15.90		12/19/2023			500				7,100
			45,000				—				15.80		12/18/2024
			40,000				—				13.69		12/20/2023
			40,000				—				14.98		12/19/2024
			16,000				8,000				14.43		12/17/2025
			7,000				14,000				14.39		12/16/2026
			—				21,000				14.09		12/15/2027
Jeffery T. Hay			6,666				3,334				14.07		1/4/2026			—				—
			6,000				12,000				14.39		12/16/2026
			—				18,000				14.09		12/15/2027
Sanjay Pandey			75,000				—				15.90		12/19/2023			—				—
			40,000				—				15.80		12/18/2024
			35,000				—				13.69		12/20/2023
			35,000				—				14.98		12/19/2024
			14,000				7,000				14.43		12/17/2025
			6,000				12,000				14.39		12/16/2026
			—				18,000				14.09		12/15/2027
Daniel J. Wagner			75,000				—				15.90		12/19/2023			—				—
			40,000				—				15.80		12/18/2024
			35,000				—				13.69		12/20/2023
			35,000				—				14.98		12/19/2024
			14,000				7,000				14.43		12/17/2025
			6,000				12,000				14.39		12/16/2026
			—				18,000				14.09		12/15/2027

		Option Exercises and Stock Vested
		Option Awards								Stock Awards
Name		Number of Shares Acquired on Exercise (#)				Value Realized on Exercise ($)				Number of Shares Acquired on Vesting (#)				Value Realized on Vesting ($)(1)
Kevin G. Burke			45,000				23,850				500				7,145
Jeffrey D. Miller			45,000				40,590				500				7,145
Jeffery T. Hay			—				—				—				—
Sanjay Pandey			35,000				41,243				—				—
Daniel J. Wagner			45,000				41,049				—				—

(1)	We calculate the value our named executive officers realized on vesting of restricted stock awards based upon the closing price of our Class A common stock on NASDAQ Global Select Market on the vesting date.

•

actual receipt of an improper benefit or profit in money, property or services; or

•

active and deliberate dishonesty established by a final judgment as being material to the cause of action.

																		Value of Initial Fixed $100 Investment Based On:
Year		Summary Compensation Total for PEO ($)				Compensation Actually Paid to PEO (S)				Average Summary Compensation Table Total for Non-PEO NEOs ($)				Average Compensation Actually Paid to Non- PEO NEOs ($)				Class A Common Stock Total Shareholder Return ($)				Peer Group Total Shareholder Return ($)				Net (Loss) Income ($)				Combined Ratio (%)
2022			1,180,431				1,256,456				751,940				805,762				109.16				102.08				(1,959,405	)			103.3
2021			1,017,560				1,044,160				677,148				695,284				104.91				105.60				25,254,174				101.0
2020			1,290,278				1,281,678				847,290				840,466				98.98				90.33				52,815,252				96.0

•

We subtracted the values we reported in the Stock Awards and Option Awards columns of the Summary Compensation Table;

•

We added the year-end fair value for equity awards that we granted in the fiscal year that were outstanding and unvested at the end of the fiscal year;

•

We added the increase, or subtracted the decrease, in the fair value of equity awards that we granted in prior fiscal years that were outstanding and unvested at the end of the fiscal year by comparing the fair value at the end of the fiscal year with the fair value at the end of the prior fiscal year and

•

We added the increase, or subtracted the decrease, in the fair value of equity awards that we granted in prior years that vested in the fiscal year by comparing the fair value on the vesting date with the fair value at the end of the prior fiscal year.

March 3, 2023

Scott A. Berlucchi Michael K. Callahan Jack L. Hess Kevin M. Kraft, Sr. S. Trezevant Moore, Jr. Richard D. Wampler, II Members of the Compensation Committees of Donegal Group Inc. and Donegal Mutual Insurance Company

Plan category		Number of Class A shares to be issued upon exercise of outstanding options				Weighted-average exercise price of outstanding options				Number of Class A shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
		(a)				(b)				(c)
Equity compensation plans approved by securityholders			6,382,179			$	14.94				1,402,752
Equity compensation plans not approved by securityholders			—				—				—
Total			6,382,179			$	14.94				1,402,752

•

our board of directors shall annually appoint a nominating committee that consists of not less than two directors who are not officers or employees of Donegal Mutual or us and who do not own beneficially 10% or more of our Class A common stock or our Class B common stock; and

•

our nominating committee shall, prior to each annual meeting of stockholders, determine and nominate candidates for election by our stockholders as directors to succeed the class of directors whose terms of office will expire upon the election of directors of that class at that year’s annual meeting of stockholders and their taking of office.

•

The professional experience of a candidate for election as a director. A candidate should have a record of accomplishments and have recognized achievements in the candidate’s field of employment.

•

Whether the candidate serves as a member of Donegal Mutual’s board of directors.

•

The education, expertise and experience of the candidate, and the candidate’s ability to offer advice and guidance to our chief executive officer based on that candidate’s education, expertise and experience.

•

The candidate’s possession of high personal and professional ethics, integrity and values, as well as a demonstrated record of cooperative interaction with the board of directors and senior management of other companies for which the candidate serves as a director.

•

A candidate should be inquisitive and objective, and have the ability to exercise practical and sound business judgment and think independently.

•

The ability of the candidate to devote sufficient time to carrying out effectively his or her duties and responsibilities as one of our directors.

•

A candidate should have a history of engagement in his or her principal position of not less than five years during which the candidate has demonstrated the candidate’s ability to work effectively with others.

Class A Directors
Name		Age				Director Since				Year Term Will Expire*
Kevin G. Burke			57				2016				2026
Jack L. Hess			75				2011				2026
David C. King			59				2020				2026
Annette B. Szady			62				2020				2026

*	If elected at our 2023 Annual Meeting

Class B Directors
Name		Age				Director Since				Year Term Will Expire
Dennis J. Bixenman			76				2018				2024
Kevin M. Kraft, Sr.			70				2009				2024
Jon M. Mahan			53				2007				2024
Richard D. Wampler, II			81				2005				2024

Class C Directors
Name		Age				Director Since				Year Term Will Expire
Scott A. Berlucchi			65				2013				2025
Barry C. Huber			71				2015				2025
S. Trezevant Moore, Jr.			69				2008				2025

•

adjusting their base salaries;

•

by awarding annual cash bonuses pursuant to a formula based upon our underwriting profitability, growth in direct premiums written and return on equity;

•

by awarding long-term cash bonuses pursuant to a formula based upon our underwriting profitability; and

•

through the grant of options to purchase our Class A common stock.

•

every year;

•

every two years;

•

every three years; or

•

you may also abstain from voting on this proposal.

•

A vote every three years will permit our stockholders a more meaningful opportunity within which to compare our long-term performance with our long-term executive compensation program. A core principle of our executive compensation program is to align management’s interests with the interests of our stockholders through incentive bonuses based on our underwriting profitability, growth in direct premiums written and return on equity and to foster the long-term creation of value for our stockholders through the grant of stock options that provide for substantial rewards to our named executive officers only if there is a substantial increase in the price of our Class A common stock.

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A vote every three years allows us an appropriate opportunity to respond to any comments our stockholders make about our executive compensation program and to effect any changes we believe are appropriate responses to comments of our stockholders. Our compensation committee and our board of directors regularly review our executive compensation program to determine if any changes would be appropriate to adjust the compensation of our named executive officers for competitive reasons and to encourage the retention of our named executive officers on a long-term basis. A three-year period also allows us an adequate opportunity to evaluate stockholder proposals relating to executive compensation and then to implement any such proposed changes that our compensation committee or our board of directors may approve.

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Between the three-year vote to approve, on a non-binding advisory basis, the compensation of our named executive officers, we will maintain meaningful dialogue with our stockholders and our executive compensation consultants with respect to our compensation program applicable to our named executive officers.

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Audit-Related Fees. We did not pay KPMG LLP any audit-related fees during our fiscal year ended December 31, 2021. During our fiscal year ended December 31, 2022, we paid KPMG LLP audit-related fees of $35,000 in connection with agreed-upon procedures KPMG LLP performed in assisting us and the Michigan Catastrophic Claims Association (the “MCCA”) in evaluating the compliance of MICO with annual assessment reporting requirements for the MCCA’s fiscal years ended June 30, 2020, 2021 and 2022.

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Tax Fees. We did not pay KPMG LLP any tax fees during our fiscal years ended December 31, 2021 or 2022.

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All Other Fees. We paid KPMG LLP $30,000 for data governance assessment services during our fiscal year ended December 31, 2021. We did not pay KPMG LLP any fees for other services during our fiscal year ended December 31, 2022.

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the selection of, appointment of, determination of funding for, compensation of, retention of and oversight of the work of our independent registered public accounting firm and the review of its qualifications and independence;

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the approval, in advance, of all auditing services and all non-audit services to be performed by our independent registered public accounting firm;

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the oversight of our accounting and financial reporting processes, including the overview of our financial reports and the reports of our internal audit staff;

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the establishment of procedures for the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting controls or auditing matters; and

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the responsibility for reviewing reports and disclosures of all related person transactions. See “Related Person Transactions” elsewhere in this proxy statement.

March 3, 2023

Jack L. Hess Barry C. Huber Jon M. Mahan Richard D. Wampler, II Members of the Audit Committee of Donegal Group Inc.

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the name and address of the proposing stockholder, as the name and address appears on our stock register, or of the proponent who intends to make the nomination;

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as to each person whom the proponent nominates for election or reelection as a director, the proponent must disclose all information relating to such person that the proxy rules under the Exchange Act require to be disclosed in a solicitation by an issuer of proxies for the election of directors;

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the principal occupation or employment for the past five years of each person whose nomination the proponent intends to make;

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a description of any arrangement or understanding between each person whose nomination the proponent proposes and the proponent with respect to such person’s nomination for election as a director and actions such person proposes to take;

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the written consent of each person so nominated to serve as a director if elected as a director; and

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the number of shares of our Class A common stock and the number of shares of our Class B common stock the proponent owns beneficially within the meaning of SEC Rule 13d-3 as well as the number of shares the proponent owns of record.

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a brief description of such item of stockholder business;

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the proponent’s reasons for presenting that item of stockholder business at our 2024 annual meeting of stockholders;

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any material interest of the proponent in that item of stockholder business;

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the name and address of the proponent; and

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the number of shares of our Class A common stock and the number of shares of our Class B common stock the proponent owns beneficially within the meaning of SEC Rule 13d-3 as well as the number of shares the proponent owns of record.

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If your shares are registered in your own name, please contact our transfer agent and inform it of your request to revoke or institute householding by calling Computershare Trust Company, N.A. at (800) 317-4445 or writing to Computershare Trust Company, N.A., at P.O. Box 43006, Providence, Rhode Island 02940-3006. Computershare Trust Company, N.A. will respond to your request within 30 days.

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If a bank, broker, nominee or other holder of record holds your shares, please contact your bank, broker, nominee or other holder of record directly.

	By order of our board of directors,
	Kevin G. Burke, President and Chief Executive Officer
March 17, 2023
Marietta, Pennsylvania