Paresh Patel
HCI GroupAbout Paresh Patel
Paresh Patel, age 62, is HCI Group’s founder, Chairman of the Board (since May 2007) and Chief Executive Officer (since 2011). He holds bachelor’s and master’s degrees in electronic engineering from the University of Cambridge, and has deep experience in technology and finance, having developed HCI’s initial policy administration systems and continuing to oversee insurtech software development . Under his leadership, HCI delivered positive earnings in each quarter of 2024, with full-year pre-tax income of $173.4 million, and net income of $127.6 million, while navigating multiple hurricanes, which factored into his 2024 bonus determination . Pay-versus-performance disclosure shows HCI’s cumulative TSR of $289 on a $100 base (2019–2024), beating its updated core peer group’s $146 and placing relative TSR at the 100th percentile, linking realized compensation to shareholder outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| HCI Group, Inc. | Chairman of the Board | 2007–present | Founder; board leader; sets agenda and strategy; technology oversight |
| HCI Group, Inc. | Chief Executive Officer | 2011–present | Led insurtech build; operational execution; capital allocation |
| BayFirst Financial Corp. (formerly First Home Bancorp, Inc.) | Chairman of the Board | 2011–2015 | Bank governance, risk oversight |
| Oxbridge Re Holdings Limited | Chairman of the Board | 2014–2017 | Reinsurance strategy; market oversight |
| NorthStar Banking Corporation | Director | 2006–2010 | Banking oversight; community franchise development |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Exzeo Group, Inc. (formerly TypTap Insurance Group, Inc.; majority-owned subsidiary formed 2020) | Chairman & CEO | 2020–present | Drives software development (Exzeo USA) and insurance services (MGA); monetization path with price-hurdle equity |
Board Governance (Service, Committees, Dual-Role Implications)
- Patel is a non-independent director and serves as both Chairman and CEO. The Board maintains a Lead Independent Director (Gregory Politis, since 2017) to mitigate dual-role concentration; independent directors hold executive sessions, and the Board met 13 times in 2024 with strong attendance (9/10 at 100%, 1/10 at 92%) .
- Committee memberships show Patel does not sit on Audit, Compensation, Governance & Nominating, or Sustainability committees; those committees are chaired by independent directors (Audit: Wayne Burks; Compensation: Sue Watts; Governance & Nominating: Peter Politis; Sustainability: Anthony Saravanos) .
- Employee directors receive no additional director pay; non-employee directors receive $25,000 per quarter plus an annual grant of 750 restricted shares (vest May 22, 2025) .
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | Notes |
|---|---|---|---|
| 2024 | 950,000 | 261,846 | Salary split: $475k from HCI, $475k from TypTap/Exzeo |
| 2023 | 950,000 | 37,846 | |
| 2022 | 950,000 | 81,115 |
Performance Compensation
Annual Cash Incentive
| Year | Target Bonus % | Actual Bonus ($) | Metric Framework | Commentary |
|---|---|---|---|---|
| 2024 | Not disclosed | 2,400,000 (earned for 2024) | Discretionary; holistic assessment including profitability, initiatives, responsibilities, industry conditions; 2024 pre-tax income $173.4m and effective hurricane response cited | Committee added $800,000 in 2024 related to 2023, totaling $3.2m cash paid in 2024 |
| 2023 | Not disclosed | 800,000 | Discretionary | Paid in 2024 per SCT and CD&A |
| 2022 | Not disclosed | — | — | — |
- Financial performance measures the company highlights as most important for pay-versus-performance: Relative TSR, Return on Equity, EBIT, and Gross Premiums Earned .
Long-Term Equity Incentives (HCI equity unless noted)
| Grant/Instrument | Grant Date | Quantity | Vesting / Performance Conditions | Status/Value Cited |
|---|---|---|---|---|
| Restricted Stock (HCI) | 4/17/2024 | 200,000 | Vests in 4 tranches of 50,000 each on the later of trigger date or 3/15/2025, 3/15/2026, 3/15/2027, 3/15/2028; trigger: HCI stock must equal/exceed $200 for 30 consecutive trading days | Grant-date FV $15,789,000 |
| 2021 Multi‑Year Award (HCI) | 2/26/2021 | 20,000 | 10,000 vested 10/5/2022 upon sustaining $105 threshold; remaining 10,000 vest if/when $140 is sustained for 30 days, then on 1-year anniversary | 10,000 unvested; Monte Carlo FV per-share $82.80 at 12/31/2024; total $828,000 |
| Prior RS (HCI) | 1/15/2019 | 40,000 | 10,000 vest each Jan 15 following grant year | Outstanding reflected in RS balances; specific remaining shares included in totals below |
| Prior RS (HCI) | 1/16/2020 | 40,000 | 10,000 vest each Jan 16 following grant year | As above |
| Stock Options (HCI) | 1/7/2017 | 110,000 | Standard vesting; exercisable; strike $40; expire 1/7/2027 | |
| Stock Options (HCI) | 2/8/2018 | 110,000 | Exercisable; strike $40; expire 2/8/2028 | |
| Stock Options (HCI) | 1/15/2019 | 110,000 | Exercisable; strike $53; expire 1/15/2029 | |
| Stock Options (HCI) | 1/16/2020 | 110,000 | Exercisable; strike $48; expire 1/16/2030 | |
| Stock Options (HCI) | 9/15/2023 | 150,000 | Exercisable; strike $70; expire 9/15/2033 | |
| Stock Options (Exzeo/TypTap subsidiary) | 10/1/2021 | 5,000,000 | Strike $23 per TypTap share; vest over 4 years (25% at year 1, then 1/16 quarterly thereafter) | 3,750,000 exercisable; 1,250,000 unexercisable at 12/31/2024 |
| Exzeo Restricted Shares (subsidiary) | 2/26/2021 | 1,480,935 | 206,215 vest time-based in 51,553 increments annually; 642,060 vest at $15 sustained; 632,660 vest at $20 sustained (30 days, 1-year anniversary) | Unvested blocks and 51,554 time-based tranches disclosed; fair values shown in outstanding awards table |
Grants and Realized Pay Summary (SCT)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Total ($) |
|---|---|---|---|---|---|
| 2024 | 950,000 | 3,200,000 | 15,789,000 | — | 20,200,846 |
| 2023 | 950,000 | 800,000 | — | 1,875,000 | 3,662,846 |
| 2022 | 950,000 | — | — | — | 1,031,115 |
- Pay-versus-performance shows CEO Compensation Actually Paid (CAP) of $21.51m in 2024 and relative TSR at 100th percentile; the linkage emphasizes equity sensitivity to stock price .
Equity Ownership & Alignment
| Holder | Beneficial Ownership (Shares) | % Outstanding | Notable Details |
|---|---|---|---|
| Paresh Patel | 1,634,000 | 14.39% (of 10,764,836 shares outstanding as of 4/14/2025) | Includes: 727,000 joint w/ spouse; 37,500 in IRA; 590,000 options currently exercisable; 210,000 restricted shares |
| Ownership Policy | — | — | CEO must hold 3x base salary in stock; Patel is in compliance and “has never sold any of his shares” |
| Hedging/Pledging | — | — | Hedging prohibited for employees/officers/directors; no explicit pledging disclosure in proxy |
Outstanding unvested/earned equity at 12/31/2024 (abbrev):
- HCI RS with $140 threshold: 10,000 shares; Monte Carlo fair value $82.80 per share; total $828,000 .
- Exzeo time-based RS: 51,554 shares; value $154,146 .
- Exzeo performance RS: 642,060 ($15 hurdle) valued $4,366; 632,660 ($20 hurdle) valued $633 (subsidiary valuation basis) .
Employment Terms
| Term | Detail |
|---|---|
| Agreement | 5-year employment agreement effective April 17, 2024; auto-renews annually thereafter unless notice ≥60 days before expiry |
| Base Salary | $950,000; Board may adjust |
| Bonus | Discretionary, per Board/Compensation Committee resolution |
| 2024 Equity | 200,000 restricted shares with $200 sustained price trigger and four annual vesting tranches |
| Severance (no cause or non-renewal by Company) | Accrued pay; 12 months base salary; 1 year life/health/disability continuation |
| Severance (good cause resignation by Patel for enumerated reasons) | Accrued pay; 12 months base salary; 1 year benefits continuation |
| Change-in-Control | Single-trigger right to terminate upon CIC and receive accrued pay, 12 months base salary, and 1 year benefits; plan-level RS acceleration on CIC unless assumed/replaced; RS also accelerate if terminated within 12 months post-CIC |
| Restrictive Covenants | Two-year non-compete post-termination in the southeast United States |
| Clawback | Compensation Committee charter includes clawback for restated results |
Compensation Structure Analysis
- 2024 shifted heavily to market-based equity: a $15.789m grant with a stringent $200 price hurdle (30 consecutive trading days) before time-based tranches vest, increasing equity-at-risk and aligning with long-term TSR; no options were granted in 2024 to NEOs .
- Cash pay rose in 2024 via a discretionary $2.4m award tied to profitability and execution during hurricane events, plus $0.8m related to 2023, suggesting balanced recognition of near-term performance within a multi-year framework .
- Long-dated option overhang exists from prior HCI grants (strikes $40–$70, expiries 2027–2033) and significant Exzeo subsidiary options (5.0m at $23) that vest over four years, adding upside leverage tied to operational success at both parent and subsidiary levels .
Say‑on‑Pay, Peer Group, and Committee Oversight
- The Board seeks annual advisory votes on executive compensation and emphasizes pay-for-performance, with the Compensation Committee (independent members Sue Watts, Chair; Lauren Valiente) meeting six times in 2024 and using an independent consultant for the 2024 CEO package review .
- 2025 peer groups refreshed to Insurance and Software cohorts (e.g., Skyward Specialty, Palomar, Mercury General, Lemonade; Alkami, CCC, Intapp, nCino, Q2), reflecting HCI’s insurance core and internal software capabilities; HCI’s TSR since 2019 outpaced both prior and new core peer groups .
Related-Party Transactions and Risk Flags
- Oxbridge Reinsurance (chaired/led by HCI independent director Jay Madhu) participated in an RPP reinsurance contract in 2024 with collateralized trust arrangements; these are reviewed under the company’s related-party policy by disinterested directors .
- Anti-hedging policy is in place; no poison pill; Section 16(a) note indicates one Form 4 was filed one day late by Patel in 2024 (administrative compliance flag, not a pattern) .
Performance & Track Record
| Measure | Outcome |
|---|---|
| 2024 Quarterly Profitability | Positive earnings each quarter |
| 2024 Pre‑tax Income | $173.4 million |
| 2024 Net Income | $127.6 million |
| 2019–2024 TSR | HCI $289 vs. new core peers $146; relative TSR 100th percentile |
Equity Ownership & Overhang Detail (Outstanding Awards at 12/31/2024)
| Instrument | Exercisable | Unexercisable | Strike/Term | Notes | |---|---:|---:|---| | HCI Options (2017) | 110,000 | — | $40; exp 1/7/2027 | | | HCI Options (2018) | 110,000 | — | $40; exp 2/8/2028 | | | HCI Options (2019) | 110,000 | — | $53; exp 1/15/2029 | | | HCI Options (2020) | 110,000 | — | $48; exp 1/16/2030 | | | HCI Options (2023) | 150,000 | — | $70; exp 9/15/2033 | | | Exzeo/TypTap Options (subsidiary) | 3,750,000 | 1,250,000 | $23; exp 10/1/2031 | | | HCI RS (market-based, $140) | — | 10,000 | Monte Carlo FV $82.80; $828,000 value | | | HCI RS (market-based, $200; 2024 grant) | — | 200,000 | Vest in four 50k tranches after $200 trigger | | | Exzeo RS (time/perf mix) | — | See counts below | Time-based and $15/$20 hurdles | 51,554 time-based ($154,146); 642,060 $15 hurdle ($4,366); 632,660 $20 hurdle ($633) |
Employment Contracts, Severance, and CIC Economics
- Single-trigger CIC right to terminate with 1x base salary and 1 year benefits; non-CIC termination without cause or for “good cause” resignation carries the same 1x salary and benefits; two-year non-compete in the southeast U.S. mitigates post-exit competitive risk .
- Plan-level change-in-control accelerates restricted shares unless assumed/replaced, and also accelerates on termination within 12 months post-CIC, creating potential vesting acceleration in sale scenarios .
- Clawback policy applies to incentive compensation following a financial restatement .
Investment Implications
- Alignment: Very high equity linkage with stringent market-based vesting ($200 price hurdle) and sizeable personal ownership (14.39%); anti-hedging and a 3x salary ownership requirement support shareholder alignment. Patel meets guidelines and the proxy states he has never sold his shares, reducing near-term insider selling pressure from existing holdings .
- Retention: A 5-year employment term (auto-renewing), significant unvested equity across HCI and Exzeo, and a two-year non-compete reduce retention risk; severance is modest at 1x salary + benefits, balancing retention with shareholder protections .
- Pay-for-performance: 2024 compensation reflects both near-term profitability (discretionary bonus referencing $173.4m pre-tax income and storm response) and long-term value creation (equity with challenging hurdles); CAP/TSR data indicate realized pay moves with stock performance and peers .
- Overhang and dilution: Legacy HCI options plus large Exzeo grants create leverage to upside but also potential dilution upon exercise/vesting; vesting is paced and largely performance/time-contingent, especially the $200 stock hurdle, which tempers immediate dilution risk .
- Governance mitigants to dual role: Presence of a long-tenured Lead Independent Director, independent committee chairs, and frequent board/committee activity (13 board meetings; near-perfect attendance) mitigate Chairman/CEO concentration risks .
- Monitoring items: Track progress toward the $200 share-price hurdle and the $140 tranche, Exzeo monetization thresholds ($15/$20), and any Form 4 activity (note one day-late filing in 2024). Related-party reinsurance involving a non-employee director (Oxbridge) is disclosed and collateralized but merits periodic review .