An investigation on behalf of current long term investors of Horace Mann Educators Corporation (NYSE:HMN) over potential breaches of fiduciary duty by the Horace Mann Educators board of directors in connection with the DUI charges against the companys CEO was announced.

The investigation by a law firm focuses on whether the Horace Mann Educators Corp's board has breached its fiduciary duties to shareholders in the wake of DUI charges against the Company's CEO. On Monday, September 13, 2010, the Horace Mann Educators Mann's board announced that it learned that President and Chief Executive Officer Louis G. Lower as involved in a traffic accident in Florida over Memorial Day weekend, and was charged with misdemeanor driving under the influence (DUI) with property damage or personal injury. Louis Lower pled guilty to the charge and last Wednesday, September 8th, at the conclusion of due process, was sentenced to serve a 60-day sentence in the county jail. Mr. Lower began serving his sentence that same day.

The board of directors said it placed Mr. Lower on leave of absence and considers additional disciplinary actions. But despite the Horace Mann Educators code of ethics, posted on its website, which requires its employees to 'comply with applicable laws, regulations, Code of Ethics and Code of Conduct' as well as 'avoid the appearance of misconduct or impropriety', the board of directors decided to allow Lower to return as CEO in late October or early November once his jail term ends.
In addition, according to a media report the CEO's contract, which he signed in February 2000 when he became CEO, doesn't allow the board to fire him and doesnt even include any condition that would allow the Horace Mann directors to suspend Mr. Lowers pay. The company thought can terminate his agreement if illness incapacitates him for 90 out of 120 days. Based on a total annual compensation of Mr. Lower in 2009 at a value of $2.72million, including a salary of $640,008 for 12months, Mr. Lower receives about $453,333, including a $106,668 salary while 2 months prison.