Matthew Ehrlichman
Porch GroupAbout Matthew Ehrlichman
Matthew Ehrlichman (age 45) is Porch Group’s Founder, Chairman, and Chief Executive Officer; he has served as CEO since founding Porch in 2011 and as a director since 2020, with prior roles as Chief Strategy Officer at Active Network and Co‑Founder/CEO of Thriva (sold in 2007 for ~$60M). He holds a B.S. in Entrepreneurial Engineering and an M.S. in Management Science & Engineering from Stanford, and is the company’s largest individual shareholder . Under his leadership, Porch delivered FY2024 Adjusted EBITDA of $7.2M, GAAP net loss improved by $101M YoY to $(32.8)M, and revenue of $437.8M; Q4 2024 posted $30M net income, and management targets $60M Adjusted EBITDA in 2025 and $100M in 2026 (Porch Shareholder Interests) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Active Network | Chief Strategy Officer | 2007–2011 | Drove growth from ~$65M revenue (2006) to ~$420M and IPO in 2011 . |
| Thriva | Co‑Founder & CEO | Through Mar 2007 (sale) | Built from dorm room; acquired by Active Network for ~$60M cash/stock in Mar 2007 . |
External Roles
- No other public company directorships for Ehrlichman are disclosed in the 2025 proxy; he serves as an inside director (Chairman) at Porch Group .
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | 642,230 | 600,000 | 618,269 (paid); annual rate increased to $625,000 effective 3/31/2024 |
| Target bonus (% of base) | — | 100% | 100% |
| Actual annual bonus ($) | — | 1,200,000 | 797,567 (129% of target earned; paid as $618,269 cash + 31,790 immediately‑vested RSUs worth $179,298) |
Notes:
- Employee directors receive no additional cash/equity for Board service; director fees apply only to non‑employee directors .
Performance Compensation
Short‑Term Incentive (2024 Bonus Plan)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Revenue (GAAP) | 50% | $422M | $461M | $500M | ~$437.8M | 58% (weighted) |
| Incentive Plan Adjusted EBITDA | 50% | $(1.7)M | $1.5M | $20M | ~$46.4M incl. $39.2M CAT adjustments | 200% (weighted) |
| Total STI payout | — | — | — | — | — | 129% of target; committee capped and split >100% into immediate‑vest RSUs |
- Committee pre‑approved adjustment policy for catastrophic weather events and other non‑operating items; 2024 EBITDA included ~$39.2M such adjustments to better align with pay‑for‑performance intent .
Long‑Term Incentive (2024 LTI Equity Program)
| Award | 2024 Target grant value | Structure | Performance metrics (weight) | Vesting |
|---|---|---|---|---|
| PRSUs | $5,062,500 | 3‑year performance program, 0–200% payout | rTSR vs S&P SmallCap 600 (33.3%); 2026 Revenue (33.3%); 2026 Incentive Plan Adj. EBITDA (33.3%) | Earned PRSUs vest on performance certification after period ends; employment at certification required |
| RSUs | $1,687,500 | Time‑based | — | 25% on 4/5/2025; remainder in equal semi‑annual installments over next 36 months |
Additional LTI context:
- 2023 PRSUs: may be earned annually across 3 metrics (stock price CAGR hurdle; 2025 revenue; 2025 Incentive Plan Adj. EBITDA) with vesting at end of 3‑year service period .
- 2022 PRSUs: 2024 (third) tranche not achieved; absolute share price goals not met across 2023 and 2024 periods (no PRSUs earned) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/31/2025) | 21,844,491 shares (21.45% of outstanding; denominator excludes 18,312,208 non‑voting shares held by Porch Reciprocal) . |
| Breakdown | 12,571,457 direct; 6,416,712 via West Equities, LLC (sole voting/investment power); 1,892,203 options; 964,119 RSUs (229,414 vest within 60 days of 3/31/2025) . |
| Stock ownership guideline | CEO 6x base salary; Ehrlichman is in compliance . |
| Hedging/pledging | Full prohibition on hedging and pledging for NEOs/directors/employees; 10b5‑1 plans allowed with strict pre‑approval and cooling‑off . |
| 2024 vesting (realized) | RSUs vested: 532,066 shares; value realized $1,576,353 (gross) . |
| Outstanding equity at 12/31/2024 | Selected items below (market value at $4.92 used in proxy): |
| Award type | Grant date | Unvested/Unearned quantity | Proxy market value ($) |
|---|---|---|---|
| RSU | 5/20/2022 | 79,181 | 389,571 |
| RSU | 4/7/2023 | 364,266 | 1,792,189 |
| RSU | 4/5/2024 | 520,672 | 2,561,706 |
| PRSU (2022 program) | 2/10/2022 (as reported) | 883,740 unearned | 4,348,001 |
| PRSU (2023 program) | 4/7/2023 | 1,748,474 unearned | 8,602,492 |
| PRSU (2024 program) | 4/5/2024 | 1,562,017 unearned | 7,685,124 |
| Options (aggregate exercisable) | 2017–2018 grants | 1,892,203; strikes $1.92–$2.73; exp. 2027–2028 | — |
Insider selling pressure implications:
- Near‑term supply can arise around semi‑annual RSU vest dates (including immediate‑vest RSUs from 2024 STI >100% payouts); trading is restricted to windows or pre‑planned 10b5‑1 programs, mitigating opportunistic sales risk .
- Pledging is prohibited, removing a common forced‑sale catalyst .
Employment Terms
| Term | Key provisions |
|---|---|
| Agreement & term | CEO employment agreement effective Feb 11, 2022; initial 36‑month term, auto‑renews for 12‑month periods; at‑will . |
| Non‑CIC termination (w/o cause or for good reason) | Cash severance equal to 12 months base salary + annual target bonus, paid over 12 months; COBRA premium support during severance period (subject to limitations); time‑based equity vests through first anniversary; PRSUs remain outstanding on original schedule; extended option exercise window (up to 12 months) . |
| Change‑in‑control (CIC) | Double‑trigger. If awards assumed: upon qualifying termination within 12 months post‑CIC, all awards fully vest on the 61st day; if not assumed, all awards vest immediately prior to CIC. PRSUs typically convert to RSUs and vest on earlier of 1‑year post‑CIC or qualifying termination within that year . |
| Restrictive covenants | Non‑compete 18 months for CEO (12 months for CFO/COO); non‑solicit; confidentiality; IP assignment; non‑disparagement . |
| Tax gross‑ups | None; Company does not provide 280G excise tax gross‑ups . |
Potential payments (estimated at 12/31/2024):
| Scenario | Payment estimate ($) |
|---|---|
| Qualifying termination (non‑CIC) | 3,226,068 |
| Qualifying termination within 12 months after CIC | 22,319,924 |
| CIC where awards not assumed (single‑trigger vesting of awards) | 22,319,924 |
Board Governance
- Roles and structure: Ehrlichman serves as both CEO and Chairman; the Board maintains a Lead Independent Director role (Alan Pickerill; elected 2023, re‑elected 2024 and 2025) with robust duties and authority to ensure independent oversight .
- Board independence and committees: Majority independent board; Audit (Chair: Maurice Tulloch), Compensation (Chair: Sean Kell), and Nominating & Corporate Governance (Chair: Rachel Lam) are fully independent; Ehrlichman does not receive committee compensation nor is he listed as a committee member .
- Meetings and attendance: 11 Board meetings in 2024; no director nominated for 2025 attended less than 75% of applicable meetings .
- Insider trading policy: Prohibits hedging and pledging; strict 10b5‑1 and blackout controls .
- Say‑on‑pay: 94% support at 2024 annual meeting .
Compensation Structure Analysis
- Mix and at‑risk pay: For 2024 targets, CEO pay was 71% performance‑based and 92% at‑risk, emphasizing equity and performance alignment .
- Metric design shifts: 2024 PRSUs shifted from absolute share price to relative TSR versus S&P SmallCap 600, plus 2026 revenue and Incentive Plan Adjusted EBITDA, improving alignment with shareholder outcomes and peer practices (0–200% scale) .
- STI adjustments: Committee applied a pre‑approved policy excluding extraordinary CAT weather impacts (~$39.2M), driving a 200% payout on the EBITDA factor; overall STI paid at 129% of target (portion paid in immediately‑vested RSUs to preserve cash) .
- Enforcement safeguards: Nasdaq‑compliant clawback policy; prohibition on hedging/pledging; no stock option repricing; no excise tax gross‑ups .
Performance & Track Record
| Metric/initiative | Result |
|---|---|
| FY2024 Revenue | $437.8M; +2% YoY |
| FY2024 Adjusted EBITDA | $7.2M; +$51.7M YoY; achieved full‑year profitability goal |
| Q4 2024 | Net Income $30M; Adjusted EBITDA $42M |
| Insurance structure transformation | Formation of Porch Reciprocal Exchange; sale of HOA to the Reciprocal (Jan 1, 2025) to simplify, scale margins, and reduce volatility |
| 2025 guide (Porch Shareholder Interests) | Revenue ~$400M; Gross Profit ~$317.5M (~80% margin); Adjusted EBITDA ~$60M; aim for positive quarterly Adjusted EBITDA and FCF in 2025 |
Equity Ownership & Director Compensation (for governance completeness)
- Director pay policy and 2024 changes (non‑employee only): Cash retainers increased; annual RSU retainer set at $150,000; Lead Independent Director retainer rebalanced to cash; committee retainers now cash; employee directors (incl. Ehrlichman) receive no Board compensation .
Related Party Transactions and Policies
- No related person transactions requiring disclosure since Jan 1, 2023; robust approval policy administered by the Audit Committee .
Risk Indicators & Red Flags
- Positive: High insider ownership and ownership guidelines met; no hedging/pledging; clawback in place; no excise tax gross‑ups; independent committees; Lead Independent Director provides oversight of CEO/Chair dual role .
- Watch items: EBITDA bonus metric allowed CAT event adjustments that materially impacted payout; investors may scrutinize consistency and transparency of adjustments over time .
- Legacy performance awards: 2022 PRSUs not earned (missed absolute share price goals), indicating outcome‑based equity with real downside; aligns with shareholder experience .
Investment Implications
- Alignment: Ehrlichman’s ~21% stake, guideline compliance (6x salary), and heavy PRSU mix (rTSR and 2026 financials) create strong long‑term alignment and retention; pledging is prohibited, reducing financing‑driven sell risk .
- Retention and overhang: Significant unvested RSUs/PRSUs and options support retention; expect periodic supply around semi‑annual RSU vest dates, governed by 10b5‑1 and window policies .
- Transaction sensitivity: CIC economics are substantial (~$22.3M modeled), and equity acceleration is double‑trigger if assumed; any credible strategic interest could be a catalyst for both governance and price reaction .
- Pay‑for‑performance: 2024 STI payout benefited from pre‑defined CAT adjustments even as 2022 PRSUs were not earned; the 2024 shift to rTSR should improve external alignment going forward .