United Fire Group Inc

This advisory proposal asks shareholders to approve, on a non-binding basis, the compensation paid to the Company’s named executive officers as described in the proxy statement and associated Compensation Discussion and Analysis. Management and the Compensation Committee present this vote as an important corporate governance feedback mechanism; while not binding, the Board intends to consider the outcome in future compensation decisions. The Company frames its program as pay-for-performance: a mix of base salary, an annual incentive plan tied to five corporate metrics (adjusted ROE, written premium growth, net adjusted loss ratio, underwriting expense ratio and core earnings), and long-term equity awards (50% PSUs tied to multi-year performance and 50% RSUs with time-based vesting). The proxy cites safeguards such as stock ownership guidelines, a clawback policy, independent committee oversight and independent consultant input to mitigate excessive risk-taking. Historically the Company’s say-on-pay has received strong shareholder support (approximately 97% in 2025), which management cites to validate its approach, but the vote remains an avenue for shareholders to express concerns. Key considerations for investors evaluating this proposal include the alignment of metrics with long-term shareholder value, the balance between short- and long-term incentives, the use of performance adjustments and individual modifiers, and the potential dilution and expense of equity awards. Because the vote is advisory, approval does not change compensation arrangements directly, but a significant negative vote would likely prompt heightened engagement by the Compensation Committee and potential program changes. The Board’s recommendation for a FOR vote is grounded in its view that the program fairly rewards performance and aligns executive incentives with shareholder interests while incorporating governance controls to limit undue risk.

This management proposal requests shareholder approval to (a) increase the number of shares authorized for issuance under the Non-Employee Director Stock Plan from 450,000 to 865,114 (an additional 415,114 shares) and (b) lengthen the plan’s expiration date by five years to December 31, 2034. Management seeks approval because available capacity under the Director Plan is nearly exhausted (34,886 shares remaining as of December 31, 2025) and the Board wants flexibility to continue granting RSUs, restricted stock and non-qualified options to non-employee directors as part of the director compensation program. The company frames the amendment as necessary to attract, retain and align non-employee directors with shareholder interests; it also notes administrative protections in the plan such as a per-director annual grant value limit ($300,000), anti-repricing provisions without shareholder approval, and adjustment mechanics for corporate events. From a governance perspective, the amendment will dilute existing shareholders modestly — the incremental 415,114 shares represent roughly 1.6% of the approximately 25.6 million shares outstanding as of the record date — and investors should weigh that dilution against the benefits of continued director equity ownership and alignment. The Board’s rationale emphasizes continuity and the efficient administration of director pay, and the Audit and Compensation Committees have overseen plan terms and safeguards. Potential investor concerns include refresh timing, the absolute size of the increase relative to outstanding shares, and ensuring director equity programs remain conservative; the plan’s existing limits, vesting structure and prohibition on repricing without shareholder approval mitigate some of these concerns. If approved, the amendment becomes effective upon shareholder approval and will permit additional director awards without further shareholder action for the extended term through 2034. The Board recommends a FOR vote, asserting that the amendment supports good governance by maintaining a market-competitive and alignment-focused director compensation program while incorporating procedural protections.