Alexander Timm
About Alexander Timm
Alexander Timm is Co-Founder, CEO, Chairperson, and Director of Root, Inc., age 36, serving on the board since 2015 and as CEO since Root’s founding in March 2015 . He holds BS/BA degrees in Actuarial Science, Accounting, and Mathematics from Drake University and is a Fellow of the Casualty Actuarial Society; he is also a 2023 Aspen Institute Henry Crown Fellow . Under his leadership, Root reached net profitability in 2024, grew gross written premiums 66% year-over-year, increased policies-in-force by 21%, and achieved a 59.9% gross accident period loss ratio; Root also refinanced its term loan to support accelerated profitability . Pay-versus-performance disclosures show 2024 GAAP net income of $31 million, Adjusted EBITDA of $112 million, and a cumulative TSR value of 14.94 on a $100 investment measured from 12/31/2019; peer group TSR value was 124.64 over the same span .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Nationwide Mutual Insurance Company | Various management roles | 2011–2015 | Insurance operating experience used to build Root’s pricing, underwriting, and data-driven model |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| GoHealth, Inc. (Nasdaq: GOCO) | Director | Current | Health insurance marketplace exposure, potential distribution insights |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $750,000 | $750,000 | $750,000 |
| Target Bonus (% of Base) | 150% (policy unchanged) | 150% | 150% |
| Actual Annual Cash Incentive ($) | $2,250,000 | $3,206,250 | $3,375,000 |
Performance Compensation
| Plan/Grant | Metric | Weighting | Target | Actual | Payout Factor | Vesting/Timing |
|---|---|---|---|---|---|---|
| 2024 STI (annual cash) | Accident Period Gross Loss Ratio | Not disclosed | Matrix 63%–67% | 59.9% | Contributed to 192% company factor | Paid Feb 2025 within 300% cap |
| 2024 STI (annual cash) | Policy-in-Force Growth | Not disclosed | Matrix 20k–140k policies | ~73,000 policies | Contributed to 192% company factor | Paid Feb 2025 within 300% cap |
| 2024 STI (self-funding) | Adjusted EBITDA | Max 10% of Adjusted EBITDA | Not disclosed | Added 69% payout component | 69% additive | Paid Feb 2025; total capped at 300% |
| 2024 PSUs (granted 11/13/2024) | 2025 Adjusted EBITDA | Not disclosed | Not disclosed | Earnout in 2025 | Up to 200% of target | 25% vests at certification (Feb 2026), then 25% each Jan 1 until fully vested |
| 2024 PSUs (granted 11/13/2024) | 2025 New Writings | Not disclosed | Not disclosed | Earnout in 2025 | Up to 200% of target | Same as above |
| 2023 PSUs | Stock price hurdles | Not disclosed | Four price targets | First target achieved; 20,990 shares to Timm | Per plan | 2025–2027 scheduled vestings contingent on price hurdles |
2024 Equity Grants (CEO)
| Award Type | Grant Date | Target/Units | Grant Date Fair Value ($) |
|---|---|---|---|
| RSUs | 4/1/2024 | 15,344 units | $928,619 |
| PSUs | 11/13/2024 | 73,805 target units | $5,575,968 |
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Total beneficial ownership | 90,937 Class A shares; 1,067,184 Class B shares; 20.6% voting power |
| Vested vs. unvested (selected as of 12/31/2024) | Unvested restricted stock: 36,262 shares (from early option exercise) ; Unvested RSUs: 1,724 (5/5/2021), 97,239 (8/9/2023), 15,344 (4/1/2024) ; Unearned PSUs: 188,906 (8/9/2023), 36,903 (11/13/2024, threshold) |
| Market value reference | $72.59/share used for RSU/PSU market values in table |
| Pledging/hedging | Hedging prohibited; pledging generally prohibited without prior approval; no pledges by executives as of proxy date |
| Ownership guidelines | Not disclosed; compensation committee monitors pledge activity |
Outstanding Equity Schedule (CEO) and Vesting Cadence
| Instrument | Units | Next Vest Dates |
|---|---|---|
| Restricted stock (early option exercise) | 36,262 | Monthly through June 2026 |
| RSUs (8/9/2023) | 97,239 | 32,997 on 4/1/2026; 45,293 on 4/1/2027 |
| RSUs (4/1/2024) | 15,344 | 50% vested 4/1/2025; remaining 50% on 4/1/2026 |
| PSUs (8/9/2023) | 188,906 threshold; multiple tranches | 62,969 on 4/1/2026; 83,958 on 4/1/2027 (subject to price hurdles) |
| PSUs (11/13/2024) | 36,903 at threshold; up to 147,610 max | 25% at certification (Feb 2026); 25% each Jan 1 thereafter |
Note: 2024 RSU vesting involved 18,954 shares withheld for taxes, indicating routine liquidity around vest dates .
Employment Terms
- Agreement type and dates: Letter agreement effective January 2021, amended February 2022; employment at-will .
- Severance (no Change-in-Control): 12 months base salary; up to 12 months COBRA; 12 months’ forward vesting acceleration of unvested equity .
- Change-in-Control: If terminated without cause or for good reason within 12 months of a CIC, 100% of unvested equity fully vests (double-trigger acceleration) .
- Voluntary resignation: CEO eligible for 12 months base salary and up to 12 months COBRA .
- Illustrative severance values (12/31/2024): Cash severance $750,000; COBRA $28,276; equity vesting $6,859,610 (no CIC) or $29,999,995 (with CIC) .
- Clawback: SEC/Nasdaq-compliant policy, extended in 2024 to allow recovery of incentive/equity (other than base) for misconduct causing serious financial/reputational damage .
- Perquisites: Company-paid security services in 2024, plus standard benefits; no executive retirement plans; 401(k) matching applicable to all employees .
Board Governance and Director Service
- Role and independence: CEO and Chairperson; not independent due to executive role .
- Lead Independent Director: Lawrence Hilsheimer; responsibilities include agendas, executive sessions, liaison duties, and oversight .
- Committee memberships: Timm is not listed as a member of audit, compensation, or nominating committees; serves on executive committee with Hilsheimer to act between meetings per bylaws .
- Board attendance and activity: Board met 4x in 2024; each director attended ≥75% of meetings; six directors attended 2024 annual meeting webcast .
- Dual-role implications: Chair-CEO structure offset by Lead Independent Director and independent committees; executive committee participation concentrates agenda-setting between meetings—monitor for balance of oversight vs execution .
Director and Shareholder Feedback
- Say-on-Pay: 97% approval at 2024 annual meeting, indicating strong shareholder support for NEO pay program .
- Compensation peer group: Updated in 2024 to reflect increased market cap/revenue; includes fintech/insurtech/payments names (e.g., Lemonade, Goosehead, Palomar, Upstart) to guide PSU design and LTI levels .
Multi-Year Compensation Summary (CEO)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $750,000 | $750,000 | $750,000 |
| Bonus ($) | — | $2,600,000 | — |
| Stock Awards ($) | $2,117,395 | $2,121,471 | $6,504,587 |
| Non-Equity Incentive ($) | $2,250,000 | $3,206,250 | $3,375,000 |
| All Other Comp ($) | $9,335 | $10,085 | $23,533 |
| Total ($) | $5,126,730 | $8,687,806 | $10,653,120 |
Trading Signals and Vesting Pressure
- Near-term vesting: Large RSU/PSU tranches scheduled in 2026–2027 could create periodic selling or tax-withholding pressure, especially April 1 and early-year dates (Feb certification/Jan vest cycles) .
- 2024 tax withholding: 18,954 shares withheld on RSU vesting suggests liquidity needs around vest dates; routine signal, not directional by itself .
- PSU leverage: 2024 PSU grant allows up to 200% earnout on 2025 metrics—higher equity realization if 2025 Adjusted EBITDA and New Writings meet/exceed targets, increasing equity-linked exposure and potential future vesting supply .
Risk Indicators and Red Flags
- Hedging/pledging: Hedging prohibited; pledging requires approval; none pledged by executives as of proxy date—alignment positive .
- Option repricing: Company policy does not reprice options—governance positive .
- Related party transactions: Carvana investment and governance rights disclosed with standstill and voting commitments; monitor governance influence and regulatory thresholds .
- Governance structure: Dual role CEO-Chair offset by Lead Independent Director and independent committees; continue monitoring effectiveness of executive sessions and committee oversight .
Compensation Structure Analysis
- Mix shifts: 2024 introduced PSU-centric LTI with financial metrics (Adjusted EBITDA, New Writings) and additional time-vesting, increasing at-risk, performance-linked equity vs guaranteed pay .
- STI design: Matrix-based financial measures plus qualitative objectives and self-funding Adjusted EBITDA component; capped payouts at 300% despite outperformance—disciplined risk control .
- Clawback expansion: Broadened to reputational harm/misconduct alongside SEC/Nasdaq restatement triggers—shareholder-friendly .
Equity Ownership Detail (CEO)
| Class and Units | Amount | Voting/Notes |
|---|---|---|
| Class A | 90,937 shares | 1 vote per share |
| Class B | 1,067,184 shares (incl. 10,791 via Timm Descendants Trust) | 10 votes per share; 20.6% total voting power |
| Options/RSUs within 60 days | N/A for CEO committees; vesting schedules as listed above | See outstanding awards table |
Investment Implications
- Alignment: High voting stake (20.6%) and prohibition on hedging/pledging indicate strong long-term alignment; PSU-heavy LTI tied to Adjusted EBITDA and growth should reinforce performance orientation .
- Retention risk: Robust equity overhang with multi-year vesting and double-trigger CIC acceleration reduces near-term flight risk; severance is modest (12 months salary) outside CIC .
- Trading signals: Concentrated vest dates (April 1 annually, plus PSU certification/Jan cycles) imply predictable vest-related supply; 2024 RSU tax-withholding confirms typical liquidity needs around vesting .
- Governance: CEO-Chair dual role partially mitigated by Lead Independent Director and independent committees; executive committee membership centralizes agenda-setting—investors should monitor board independence and strategy oversight .
- Pay-for-performance: 2024 STI funded to 300% cap based on outperformance; PSU structure heightens sensitivity to 2025 results—positive if profitability trajectory is sustained (2024 net income $31m; Adj. EBITDA $112m) .