Argo Group International Holdings Ltd. CEO Mark Watson has stepped down, according to a statement Tuesday from the Bermuda-based insurer, which is being investigated by securities regulators over its executive compensation practices.

Kevin Rehnberg, president of Argo Group U.S. Inc., head of the Americas and chief administration officer was named interim CEO with immediate effect, Argo said in a statement.

Mr. Watson will continue to serve as a member of the board and as an advisor until December 30, to ensure “a smooth transition,” the statement said.

Announcement of Mr. Watson’s retirement comes just weeks after the insurer said it had received a subpoena from the U.S. Securities and Exchange Commission over its executive pay practices.

Prior to the subpoena, Argo had been involved in months of back-and-forth with shareholder Voce Capital Management LLC, a San Francisco-based hedge fund with a 5.6% stake in the company, on the issue of executive compensation and what Voce regards as Mr. Watson’s “excessive expenses and misuse of corporate assets.”

According to Argo’s 2019 proxy statement filed with the Securities and Exchange Commission earlier this year, Mr. Watson is 54.

Last year, Mr. Watson was paid $8.5 million, more than twice his 2017 compensation, according to the proxy. Stock awards accounted for $6 million of his 2018 compensation.

He has been president and CEO of Argo and its predecessor company since 2000.

According to the proxy, Argo, which is domiciled in Bermuda but has significant operations in the United States, previously also paid Mr. Watson housing and home leave and travel allowances but those allowances were terminated on Jan. 1, 2019.

Mr. Rehnberg’s salary has been increased from $750,000 to $975,000 with his promotion to interim president and CEO, Argo said in a Nov. 5. SEC 8K filing.

Mr. Watson will reimburse Argo for “certain of his personal expenses” that were paid for by the insurer, in an amount to be determined, the filing said.

Mr. Watson will be paid $1.75 million within 10 days of executing his separation agreement with Argo, and a further $750,000 within 10 days on or after Dec 31, Argo said in the filing.

Some 77,396 shares of restricted stock granted to Mr. Watson from March 2016 through March 2019, will fully vest when the separation agreement becomes enforceable and binding, the filing said.

However, about 35,296 of the restricted shares will be held in an escrow account, pending Mr. Watson’s reimbursement of expenses to Argo. Once the expenses have been returned, the remainder will be released to Mr. Watson, according to the Nov. 5 filing.

“The abrupt ‘retirement’ of Argo’s CEO…does not resolve our concerns about the company’s operations, strategy and corporate governance; in fact, it raises more questions than it answers,” Voce Capital Management LLC said in a statement.

The independent directors of the Argo’s board continue to conduct a review of governance and compensation matters, which began after the SEC subpoena, Argo said in Tuesday’s statement.

Argo continues to believe that “the amounts involved are not material to its financial position or results of operations,” the insurer said.

Argo is also “fully cooperating” with the SEC investigation with respect to its disclosures of certain compensation matters, it said.

Mr. Rehnberg joined Argo in 2013 and prior to that served as executive vice president for specialty lines at OneBeacon Insurance, where he oversaw specialty underwriting operations.

An Argo spokesman did not immediately return calls seeking comment.