Richard McCathron
About Richard McCathron
Richard “Rick” McCathron, 53, is President, CEO, and Director of Hippo Holdings Inc.; he has served as President since February 2017 and as CEO since June 2022, and is not an independent director . He holds a B.S. in Finance from Oregon State University and is both a Chartered Property and Casualty Underwriter (CPCU) and Certified Insurance Counselor (CIC) . Under his leadership, Hippo’s financial performance improved markedly in FY2024 vs. FY2023, with revenue rising from $130.6M* to $296.9M*, net loss narrowing to $40.5M [GetFinancials; S&P Global]* [GetFinancials; S&P Global]* [GetFinancials; S&P Global]* , and quarterly results in Q3’25 showing revenue up 26% YoY to $121M and net income of $98M . His compensation includes service-based RSUs and performance-based PRSUs, with 2025 CEO PRSUs tied to three-year TSR vs. a peer group (0–100% vesting) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Connect Insurance | President & CEO | Oct 2012 – Feb 2017 | Led insurtech distribution; executive oversight |
| Home Value Protection, Inc. | Chief Revenue Officer | Apr 2011 – Mar 2012 | Revenue leadership in insurance-related offering |
| Superior Access Insurance Services | President & CEO | Jun 2007 – Oct 2010 | Ran online insurance agency operations |
| Mercury Insurance Group | Regional Vice President | Apr 2004 – Jun 2007 | Regional P&C leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Spinnaker Insurance Company | Director | Not disclosed | Hippo subsidiary leadership interface |
| First Connect Insurance | Director | Not disclosed | Board service continuity |
| Various insurtech companies | Advisor | Not disclosed | Industry advisory roles |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $645,000 | $660,000 |
| Target Bonus (% of Base) | 50% | 50% |
| Actual Cash Bonus Paid ($) | $165,000 | $433,125 |
Notes:
- 2024 cash incentive structure: 50% based on continued service; 50% based on Company and individual performance, subject to Compensation Committee discretion and paid partly in-year for retention and balance in 2025 .
Performance Compensation
Annual Cash Incentive Structure (2024)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Continued Service | 50% | 50% of base | Not separately disclosed | Included in bonus | Paid partly in 2024, remainder 2025 |
| Company & Individual Performance | 50% | 50% of base | Not disclosed (Committee discretionary) | Included in bonus | Paid partly in 2024, remainder 2025 |
Equity Awards
| Award Type | Grant Date | Shares/Units | Grant-Date Fair Value | Vesting Schedule | Performance Metrics |
|---|---|---|---|---|---|
| RSU | Feb 15, 2024 | 125,000 | Included in 2024 stock awards ($1,756,250 total) | 1/8 per quarter over 2 years; fully vested by Feb 15, 2026 (service-based) | N/A (service-based) |
| PRSU (legacy) | May 15, 2022 | 29,900 unearned units outstanding at YE 2024 | Market value $800,423 at YE 2024 (FMV $26.77/share) | 4-year schedule; requires 1-year service plus performance tranches | Stock price, revenue, adjusted gross profit |
| RSU (legacy) | Feb 15, 2023 | 12,500 unvested at YE 2024 | Market value $334,625 (FMV $26.77) | 1/8 per quarter over 2 years (service-based) | N/A |
| RSU (legacy) | Feb 15, 2024 | 78,125 unvested at YE 2024 | Market value $2,091,406 (FMV $26.77) | 1/8 per quarter over 2 years (service-based) | N/A |
| PRSU (TSR-based) | 2025 (nine months ended Sept 30, 2025) | 42,244 (CEO) | WA grant-date FV $24.08; total expected expense $1M | 3-year service period; vesting 0–100% based on TSR vs peer group | Relative TSR (0–100%) |
Stock Options (Outstanding at YE 2024)
| Vesting Commencement | Exercisable | Unexercisable | Strike ($) | Expiration | Notes |
|---|---|---|---|---|---|
| May 15, 2022 | 46,534 | 27,918 | 15.88 | Jun 5, 2032 | Repriced Mar 1, 2023; temporary $31.76 exercise premium expired Mar 6, 2024; shares/vesting unchanged |
| Feb 15, 2022 | 107,364 | — | 15.88 | Apr 11, 2032 | Graded vesting (1/16 then 3/16 per quarter) |
| Sep 15, 2021 | 25,355 | — | 15.88 | Sep 10, 2031 | Graded vesting |
| Aug 27, 2020 | 27,816 | — | 15.88 | Sep 28, 2030 | Monthly vesting (1/48 per month) |
| May 13, 2019 | 15,307 | — | 8.50 | May 13, 2029 | — |
| Jan 22, 2019 | 14,489 | — | 8.50 | Jan 22, 2029 | — |
| Jan 23, 2018 | 6,543 | — | 4.00 | Jan 23, 2028 | Quarterly vesting |
Equity Ownership & Alignment
| Item | Details |
|---|---|
| Total Beneficial Ownership (as of Apr 1, 2025) | 499,257 shares; 1.98% of outstanding |
| Direct Shares | 229,764 shares |
| Options exercisable within 60 days | 252,714 shares (including 4,653 due to vest in May 2025) |
| RSUs vesting within 60 days | 16,779 (scheduled to vest in May 2025) |
| Ownership Guidelines | Non-employee directors: 5x annual retainer within 5 years; executives’ guidelines not disclosed |
| Hedging/Pledging | Anti-hedging policy prohibits hedging via derivatives/exchange funds; pledging not specifically addressed |
| 10b5-1 Plan | CEO adopted Rule 10b5-1 plan on Aug 29, 2025 to sell up to 90,000 shares; plan expires Dec 31, 2026 |
| Section 16 Filings | One late Form 4 in 2024 for RSU refresh grant due to administrative error |
Implications:
- The 10b5-1 plan may create scheduled insider selling pressure between 2025–2026 .
- Anti-hedging aligns incentives; absence of pledging disclosure mitigates a common red flag .
Employment Terms
- Clawback Policy: Adopted Oct 2, 2023 per NYSE/Exchange Act Section 10D; recoup incentive-based compensation erroneously received after Oct 2, 2023, covering the prior three fiscal years upon a restatement .
- Insider Trading Policy: Formal policy filed as Exhibit 19.1 to the 2024 Form 10-K; covers trading restrictions .
- Indemnification: Standard Delaware-law indemnification agreements for directors/officers; D&O insurance in place .
- Executive Employment Agreements: Company states employment arrangements exist but does not disclose CEO severance/change-of-control terms in 2025 proxy; director equity awards vest fully upon a Change in Control .
- Non-compete/Non-solicit/Garden Leave: Not disclosed in 2025 proxy.
Company Performance Context
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenues ($) | $130.6M* | $296.9M* |
| Net Income ($) | -$273.1M | -$40.5M |
| EBITDA ($) | -$251.1M* | -$71.7M* |
| EBIT ($) | -$257.8M* | -$78.3M |
| EBITDA Margin (%) | -119.74%* | -19.27%* |
| Net Income Margin (%) | -130.23%* | -10.88%* |
Values retrieved from S&P Global. Cells marked with * have no document citation and are sourced from SPGI.
Additional quarterly context: Q3’25 revenue $120.6M and net income $98.1M; combined ratio improved to 100% and net loss ratio to 48% .
Board Governance
- Role: CEO and Director (Class II); not independent .
- Committee Memberships: McCathron does not serve on Board committees; Compensation Committee is comprised of Feder, Landman (Chair), Nichols; Audit, Risk & Compliance chaired by Nichols; Nominating & Governance chaired by Fouché .
- Leadership Structure: Chair and CEO roles are separated; following the Annual Meeting, Sandra Wijnberg (previously Lead Independent Director) serves as Chair of the Board .
- Independence/Executive Sessions: Independent directors meet in executive session at least annually; non-management directors meet regularly .
- Attendance: Each director attended at least 75% of Board and applicable committee meetings in FY2024 .
- Director Compensation: As an employee director, McCathron does not receive Board fees; non-employee director fees and RSUs disclosed separately .
Compensation Structure Analysis
- Mix Shift: Heavy equity usage via RSUs and PRSUs; 2024 stock awards of $1.756M vs. cash bonus $433k, indicating strong equity orientation .
- Performance Linkage: 2022 PRSUs tied to stock price, revenue, and adjusted gross profit; 2025 PRSUs tied to relative TSR—aligning incentives with shareholder outcomes .
- Repricing Event: One-time option repricing (Mar 1, 2023) to $15.88 with a temporary $31.76 exercise premium that expired Mar 6, 2024; number of shares, vesting, and expirations unchanged—repricing is a governance red flag but mitigated by premium and retention objectives .
- Say-on-Pay: Not applicable—Hippo is an emerging growth company and does not hold say-on-pay votes; scaled disclosure applies .
- Peer Benchmarking: Compensation Committee used Aon/Radford data and an industry peer group; specific peers not disclosed; no consultant conflict identified .
Risk Indicators & Red Flags
- Option Repricing (2023): Potential misalignment signal if repeated; here structured with temporary exercise premium .
- Scheduled Insider Sales: 10b5-1 plan to sell up to 90,000 shares by end-2026 introduces selling overhang .
- Related Party Transactions: Ongoing commercial arrangements with Lennar affiliates; Board oversight via Audit, Risk & Compliance Committee .
- Late Section 16 Filings: One late Form 4 due to administrative error—minor compliance lapse .
- Anti-Hedging Policy: Strong alignment; prohibits hedging transactions .
Performance & Track Record
- Strategic execution: CEO commentary highlighted improved operating leverage (fixed expenses down 16% YoY while revenue grew >30%), first-time positive net income from operating activities in Q2’25, and platform scalability .
- Q3’25 achievements: Net income of $98M, net loss ratio improved by 25 pts to 48%, combined ratio improved by 28 pts to 100, and $91M gain on sale of homebuilder distribution network .
Compensation Peer Group & Shareholder Feedback
- Peer Group: Used for benchmarking by Radford; composition not disclosed .
- Target Percentile: Not disclosed.
- Say-on-Pay History: Not applicable under EGC status .
Expertise & Qualifications
- Credentials: CPCU, CIC, B.S. Finance; extensive executive experience across P&C carriers and insurtechs; financial literacy acknowledged in Board skills matrix .
Work History & Career Trajectory
- Progression from regional leadership (Mercury) to CEO roles (Superior Access, First Connect) prior to Hippo; at Hippo, President since 2017, CEO since 2022 .
Director Service and Dual-Role Implications
- Board Service: Class II Director since 2020 (service includes “Old Hippo” tenure prior to SPAC merger); not independent .
- Committees: Not a member of Audit, Compensation, or Nominating committees; independence and oversight maintained via separate Chair and independent committee leadership .
- Dual Role Implications: CEO serving on Board provides strategic continuity; separation of Chair and CEO roles mitigates concentration of power and supports independent oversight . Attendance thresholds met (≥75%) .
Investment Implications
- Alignment: Equity-heavy compensation with performance-linked PRSUs (stock price, revenue, adjusted gross profit; and TSR in 2025) aligns pay with shareholder outcomes, while a prior option repricing warrants continued monitoring .
- Momentum vs. Overhang: Material operational improvement and profitability signals in 2025 underpin confidence; however, the CEO’s 10b5-1 plan to sell up to 90,000 shares through 2026 introduces incremental selling pressure to weigh against fundamentals .
- Governance: Separation of Chair/CEO and use of independent committees are positives; anti-hedging and clawback policies strengthen discipline; related-party exposure with Lennar affiliates is monitored via committee oversight .
- Valuation Context: FY2024 losses narrowed substantially alongside revenue growth; continued execution toward underwriting profitability is key to sustaining TSR-linked payouts and reducing dilution risk from equity compensation [GetFinancials; S&P Global]*.