DEF 14A of Root, Inc., Apr 26, 2024

DEF 14A of Root, Inc.

Filed Apr 26, 2024 · FY20230001628280-24-018439

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our board of directors currently consists of eight members and is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors and each class has a three-year term. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election until the third annual meeting following the election. Our directors are divided into the three classes as follows: •Class I directors: Beth Birnbaum, Donna Dorsey and Julie Szudarek, whose terms will expire at the Annual Meeting; •Class II directors: Jerri DeVard and Nancy Kramer, whose terms will expire at the 2025 Annual Meeting; and •Class III directors: Lawrence Hilsheimer, Alexander Timm, and Douglas Ulman, whose terms will expire at the annual meeting of stockholders to be held in 2026 (the “2026 Annual Meeting”). Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Vacancies on the board of directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the board of directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of Root. Mses. Birnbaum, Dorsey and Szudarek have each been nominated for election to serve as a Class I director. Each of Mses. Birnbaum, Dorsey and Szudarek is currently a member of our board of directors, having been recommended by our nominating and governance committee and appointed by the board of directors in March 2022, October 2023 and July 2022, respectively. A third-party search firm recommended each of the nominees and our nominating and governance committee, after reviewing their qualifications, evaluating their independence and considering the needs of our board of directors, recommended to the Board that each be appointed to serve as a director of the Company. Each of these nominees has agreed to stand for election at the Annual Meeting. Our management has no reason to believe that any nominee will be unable to serve. If elected at the Annual Meeting, each of these nominees would serve until the annual meeting of stockholders to be held in 2027 and until her successor has been duly elected, or if sooner, until the director’s death, resignation or removal. Our Amended and Restated Bylaws include a majority vote standard for uncontested director elections, which requires that a nominee for director in an uncontested election receive a majority of the votes cast at a stockholder meeting in order to be elected to the board of directors. Any director nominee who does not receive a majority of the votes cast is required to submit a resignation to the nominating and governance committee, which will make a recommendation to the board of directors as to whether to accept or reject the resignation or take other action. The board of directors will, within 90 days following certification of the election results, publicly disclose its decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee may instead be voted for the election of a substitute nominee proposed by us. Our nominating and governance committee seeks to assemble a board of directors that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise, diversity and high-level management experience necessary to oversee and direct our business. To that end, the committee has identified and evaluated nominees in the broader context of the board of director’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the committee views as critical to effective functioning of the board of directors. To provide a mix of experience and perspective on the board of directors, the committee also takes into account geographic, gender and ethnic diversity. The biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills of each director nominee that led the committee to believe that that nominee should continue to serve on the board of directors. However, each of the members of the committee may have a variety of reasons why a particular person would be an appropriate nominee for the board of directors and these views may differ from the views of other members.

  2. OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

    OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH CLASS I DIRECTOR NOMINEE NAMED ABOVE.

  3. INFORMATION REGARDING DIRECTOR NOMINEES AND CURRENT DIRECTORS

    INFORMATION REGARDING DIRECTOR NOMINEES AND CURRENT DIRECTORS The following table sets forth, for the Class I nominees at the Annual Meeting, their ages, positions held and length of service as of the date of this Proxy Statement. The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experience, qualifications, attributes or skills that led the nominating and governance committee to believe that each director nominee should continue to serve on the board of directors. There are no family relationships among any of our executive officers or directors.

  4. INFORMATION REGARDING DIRECTOR NOMINEES AND CURRENT DIRECTORS

    | Nominee | Age | Term Expires | Position Held | Director Since | | Beth Birnbaum | 51 | 2024 | Director | 2022 | | Donna Dorsey | 53 | 2024 | Director | 2023 | | Julie Szudarek | 52 | 2024 | Director | 2022 |

  5. Nominees for Election at the 2024 Annual Meeting of Stockholders

    Nominees for Election at the 2024 Annual Meeting of Stockholders Beth Birnbaum. Ms. Birnbaum has served on our board of directors since March 2022. Most recently, Ms. Birnbaum served as Chief Operating Officer at PlayFab, Inc. (“PlayFab”), the backend service platform for gaming acquired by Microsoft Corporation (Nasdaq: MSFT), from 2017 to 2018. Prior to PlayFab, Ms. Birnbaum served in a variety of roles at GrubHub, Inc., from 2011 to 2016, most recently as Senior Vice President of Product. From 2003 to 2011, Ms. Birnbaum served in a variety of roles at Expedia Group, Inc. (Nasdaq: EXPE), an online travel company, most recently as Vice President of Product and Connectivity. Ms. Birnbaum currently serves on the board of directors of John Wiley & Sons, Inc. (NYSE: WLY and WLYB), a publishing company specializing in scientific, technical, and medical books and journals. She holds a Bachelor of Arts in Economics and International Studies from Yale University and a Master of Business Administration from INSEAD. Ms. Birnbaum is Diligent Climate Leadership Certified. We believe Ms. Birnbaum is qualified to serve on our board of directors due to her extensive operating experience in the technology industry, in particular in the areas of product and general management, and her experience as a director of another public company. Donna Dorsey. Ms. Dorsey has served as a member of our board of directors since October 2023. Currently, Ms. Dorsey serves as Executive Vice President, Chief People & Culture Officer for Navistar, Inc. (“Navistar”), a manufacturer of commercial transportation vehicles. In this role, she is responsible for all aspects of human resource strategy and provides strategic business and human capital leadership that has driven change and innovation at the company. Prior to this role, Ms. Dorsey led strategic human capital direction for all business operations at Navistar while overseeing Navistar’s team of human capital business partners. Since 2004, she has held roles of increasing responsibility within Navistar, including human capital leadership within Navistar’s Integrated Product Development organization. She holds a Bachelor of Arts in Political Science from Rutgers University and a Juris Doctor from Chicago Kent College of Law with a certification in labor and employment law. We believe Ms. Dorsey is qualified to serve on our board of directors due to her extensive experience in the human capital management field, with an emphasis on change and innovation. Julie Szudarek. Ms. Szudarek has served as a member of our board of directors since July 2022. Since 2023, Ms. Szudarek has served as the Chief Executive Officer of Self Financial, Inc. (“Self”), a credit building platform working to increase economic inclusion and financial resilience through products that make building credit accessible. Prior to joining Self, Ms. Szudarek served as Chief Executive Officer of Atida, one of the largest online pharmacies in Europe, from 2019 until January 2023. Before joining Atida, Ms. Szudarek held senior leadership roles at Groupon Inc. (Nasdaq: GRPN) (“Groupon”), an online commerce marketplace, in sales, operations, logistics, and administration from 2011 to 2018. Prior to Groupon, she served in a variety of roles at Orbitz Worldwide, Inc. (acquired by Expedia), an online travel company, from 2005 to 2011. Earlier in her career, Ms. Szudarek worked in management consulting at Accenture plc (formerly Andersen Consulting), a global professional services company. Ms. Szudarek holds a Bachelor of Arts in Finance from Indiana University and a Master of Business Administration from the University of Michigan. We believe Ms. Szudarek is qualified to serve on our board of directors due to her experience driving e-commerce and technology-enabled businesses, including as a Chief Executive Officer.

  6. Information About Our Continuing Directors

    Information About Our Continuing Directors The following table sets forth, for the remaining members of our board of directors whose terms continue beyond the Annual Meeting, their ages, positions held and length of service as of the date of this Proxy Statement. The principal occupation, business experience and education of each continuing director are set forth below. Unless otherwise indicated, principal occupations shown for each director have extended for five or more years.

  7. Information About Our Continuing Directors

    | Continuing Directors | Age | Term Expires | Position(s) Held | Director Since | | Jerri DeVard | 65 | 2025 | Director | 2020 | | Nancy Kramer | 68 | 2025 | Director | 2020 | | Lawrence Hilsheimer | 66 | 2026 | Director | 2020 | | Alexander Timm | 35 | 2026 | Co-Founder, CEO and Director | 2015 | | Douglas Ulman | 46 | 2026 | Director | 2016 |

  8. Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders

    Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders Jerri DeVard. Ms. DeVard has served as a member of our board of directors since October 2020. She is the Founder of the Black Executive CMO Alliance (BECA), an alliance designed to champion corporate diversity and help build the next generation of C-suite marketing executives. From January 2018 to March 2020, Ms. DeVard served as EVP, Chief Customer Officer of Office Depot, Inc. (“Office Depot”), an office supply retailing company, where she also served as EVP, Chief Marketing Officer from September 2017 to December 2017. Prior to Office Depot, Ms. DeVard served as Senior Vice President and Chief Marketing Officer of The ADT Corporation (NYSE: ADT), a home and business security company, from March 2014 through May 2016. She has also served in senior marketing roles at Nokia Corporation, Verizon Communications Inc., Citibank N.A., Revlon Inc., Harrah’s Entertainment, the Minnesota Vikings and the Pillsbury Company. Ms. DeVard is a graduate of Spelman College and Clark Atlanta University Graduate School of Business. She currently serves on the Board of Directors of Under Armour, Inc. (NYSE: UA), a sports equipment company, Cars.com (NYSE: CARS), an online automotive classified company, and Dow Inc. (NYSE: DOW), a materials-science and packaging company. From 2016 to 2018, she served as a member of the Board of Directors of ServiceMaster Global Holdings Inc., a residential and commercial services company. We believe Ms. DeVard is qualified to serve on our board of directors due to her experience in executive leadership roles, her marketing expertise and her experience serving on other public company boards of directors. Nancy Kramer. Ms. Kramer has served as a member of our board of directors since August 2020. Since August 2016, she has served as the Global Chief Evangelist of IBM iX (NYSE: IBM), a digital strategy and marketing services division of IBM. She founded Resource/Ammirati, a marketing and creative agency, in 1981 with Apple Computer as her first client, and served dozens of Fortune 500 companies, until its sale to IBM in 2016. In addition to her role on our board of directors, she has served as a director of M/I Homes, Inc. (NYSE: MHO), a home construction company, since 2015. From 2013 to 2015, Ms. Kramer served as a director of Glimcher Realty Trust, a real estate investment trust, until its sale to Washington Prime Group in 2015. She holds a Bachelor of Arts from The Ohio State University. We believe Ms. Kramer is qualified to serve on our board of directors due to her experience in executive management roles and advising venture capital companies as well as her public company director experience.

  9. Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders

    Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders Lawrence Hilsheimer. Mr. Hilsheimer has served as a member of our board of directors since October 2020. Since May 2014, Mr. Hilsheimer has served as Executive Vice President and Chief Financial Officer of Greif, Inc. (NYSE: GEF), an industrial manufacturing company. From April 2013 to April 2014, Mr. Hilsheimer served as Executive Vice President and Chief Financial Officer of The Scotts Miracle-Gro Company (NYSE: SMG), a multinational supplier of consumer gardening products. From October 2007 to March 2013, Mr. Hilsheimer served in various executive roles with Nationwide Mutual Insurance Company (“Nationwide”), beginning as EVP/CFO, then to President and Chief Operating Officer of Nationwide Direct and Customer Solutions with responsibility for its direct to consumer sales and service, Nationwide Bank and Nationwide Better Health, before taking on the role of President and Chief Operating Officer of Nationwide Retirement Plans with continuing responsibility for Nationwide Bank. Prior to Nationwide, Mr. Hilsheimer served at Deloitte & Touche LLP from 1979 through 2007, as a partner from 1988 through 2007, including as a Vice Chairman from 2005 through 2007. Mr. Hilsheimer is a director and Chairman of the Audit Committee of Installed Building Products, Inc. (NYSE: IBP), an installer of insulation products. Since 2017, Mr. Hilsheimer has served as a director of Root Insurance Company, a subsidiary of the Company, and served as Chairman of its Audit Committee until such committee was dissolved in January 2021. Mr. Hilsheimer is certified in cybersecurity oversight by the National Association of Corporate Directors. We believe Mr. Hilsheimer is qualified to serve on our board of directors due to his management experience, his experience in the insurance industry, as a chief financial officer and as an audit committee chairperson, and his existing relationship with the Company. Alexander Timm. Mr. Timm has served as our Co-Founder, CEO and a member of our board of directors since our founding in March 2015. From August 2011 to March 2015, Mr. Timm served in various management roles at Nationwide Mutual Insurance Company, an insurance and financial services company. Mr. Timm currently serves as a member of the board of directors of GoHealth, Inc. (Nasdaq: GOCO), a digital health insurance marketplace. He holds a Bachelor of Science and Bachelor of Arts in Actuarial Science, Accounting and Mathematics from Drake University. He is also a fellow of the Casualty Actuarial Society. We believe Mr. Timm is qualified to serve on our board of directors due to his perspective and experience as our Co-Founder and CEO, as well as his experience in the insurance industry. Douglas Ulman. Mr. Ulman has served as a member of our board of directors since December 2016. Since February 2024, Mr. Ulman has served as Vice Chair of Pelotonia, a nonprofit based in Columbus, Ohio that has raised more than $280 million for cancer research since 2009. Prior to this position, Mr. Ulman served as Chief Executive Officer of Pelotonia since December 2014, and as President from December 2014 until 2021. A social entrepreneur and brand and community builder, he has also served as a Hauser Fellow at Harvard University Kennedy School Center for Public Leadership. From 2008 to December 2014, he served as the President and Chief Executive Officer of The LIVESTRONG Foundation. Mr. Ulman also serves as a member of the board of several private foundations and civic organizations, including the Ulman Foundation and Signal Ohio. He holds a Bachelor of Arts from Brown University and completed the Executive Program in Leadership at Stanford University. We believe Mr. Ulman is qualified to serve on our board of directors due to his experience in executive leadership roles.

  10. Board Summary

    Board Summary

  11. Board Diversity Matrix (as of April 26, 2024)

    Board Diversity Matrix (as of April 26, 2024)

  12. Board Diversity Matrix (as of April 26, 2024)

    | Total Number of Directors | 8 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | 5 | 3 | — | — | | Part II: Demographic Background | | | | | | African American or Black | 2 | — | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | — | — | — | | Hispanic or Latinx | — | — | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 3 | 3 | — | — | | Two or More Races or Ethnicities | — | — | — | — | | LGBTQ+ | 1 | | | | | Did Not Disclose Demographic Background | — | | | |

  13. Average Tenure (from IPO): 2.7 Years

    Average Tenure (from IPO): 2.7 Years

  14. Board Skills Matrix

    Board Skills Matrix

  15. Board Skills Matrix

    | | Alexander Timm | Lawrence Hilsheimer | Douglas Ulman | Nancy Kramer | Jerri DeVard | Beth Birnbaum | Julie Szudarek | Donna Dorsey | | C-Suite Executive | • | • | • | • | • | • | • | • | | Insurance | • | • | | | | | | | | Finance/Accounting | • | • | | | • | | • | | | Technology/Cyber | • | • | | • | | • | • | | | Human Capital | | | • | • | | | | • | | Innovation | • | | • | • | • | • | • | • | | Brand Marketing | | | • | • | • | | | | | Led Business Transformation | • | • | • | • | • | • | • | • | | Gov’t/Regulatory/Legal/Public Policy | | • | • | | | | | • | | Public Company Board | • | • | | • | • | • | | |

  16. INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  17. NON-EMPLOYEE DIRECTOR COMPENSATION

    NON-EMPLOYEE DIRECTOR COMPENSATION

  18. Non-Employee Director Compensation Policy

    Non-Employee Director Compensation Policy

  19. Non-Employee Director Compensation Policy

    | In October 2023, our board of directors adopted a non-employee director compensation policy (the “2023 Policy”) that was designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. Under the 2023 Policy, each director who is not an employee of Root is eligible to receive the following annual cash retainers for their service, effective January 1, 2023: | | | | | Member ($) | Chair ($)(1) | | Board of Directors | 85,000 | 20,000(2) | | Audit, Risk and Finance Committee | 10,000 | 20,000 | | Compensation Committee | 7,500 | 15,000 | | Nominating and Governance Committee | 5,000 | 10,000 | | Strategy Committee | 5,000 | 10,000 |

  20. Non-Employee Director Compensation Policy

    (1)Amounts listed in this column are paid in addition to amounts received for board member and applicable committee member service. (2)An additional annual retainer of $20,000 is also provided to our lead independent director. The cash compensation described above is payable to our eligible non-employee directors in equal quarterly installments, prorated for any partial month of service. Non-employee directors also receive reimbursement for out-of-pocket expenses incurred in connection with attendance at meetings of the board of directors and committees. Under our policy in effect prior to the 2023 Policy, each non-employee director could elect to receive either 50% or 100% of his or her annual cash compensation in the form of our Class A common stock, granted as fully vested restricted stock units (“RSUs”). In the event of a 50% election, the director would receive RSUs equal in value to 110% of the applicable annual cash retainer; in the event of a 100% election, the director would receive RSUs equal in value to 120% of the applicable annual cash retainer. Each such election must have been made no later than prior to the calendar year to which the election applied, and each such award was granted on the date the corresponding cash retainer would have been paid to the electing director. This option was eliminated in the 2023 Policy. The 2023 Policy provides for an initial RSU grant to new directors and an annual RSU grant for then-serving directors with a value up to $175,000, with the initial RSU grant reflecting a prorated amount commensurate with a new director’s election date. The grant for 2023 was in the approximate amount of $71,375, vesting over a two-year period. The value of each RSU award granted under the 2023 Policy is based on the unweighted average closing price of a share of our Class A common stock over the 30-consecutive-trading-day period immediately preceding the date that was five trading days prior to the date of grant of such award. Each RSU held by a non-employee director who remains in service until immediately prior to a “change in control” (as defined in our 2020 Equity Incentive Plan (the “2020 Plan”)) of Root will become fully vested as of immediately prior to the closing of such change in control transaction. Prior to approval of the 2023 Policy, four newly elected members of the board of directors were each to receive an initial RSU award equal in value to $900,000, vesting quarterly over four years. The initial grant of RSUs granted to each such director had a grant date value of $858,375, resulting in a shortfall of $41,625 from the intended $900,000. On June 30, 2021, the compensation committee granted to each such director an RSU award valued at $41,625 with the same vesting schedule as the original award. In addition, each of the same four directors received a special transitional grant of an option to purchase 258 shares of our Class A common stock in light of the lost upside value of the shares presumed to be liquidated to satisfy the associated tax liability arising upon the quarterly vesting of his or her original RSU award due to the unavailability of an option to defer payout of a vested RSU award. Options were similarly awarded to the remaining affected directors on June 30, 2022 and June 30, 2023, which was the last such special grant. The aggregate value of all compensation granted or paid to any non-employee director with respect to any calendar year, including awards granted and cash fees paid by us to such non-employee director, may not exceed: (1) $650,000 in total value or (2) if such non-employee director is first appointed or elected to our board of directors during such calendar year, $900,000 in total value. Notwithstanding the 2023 Policy, our board of directors or the compensation committee may make supplemental grants to our non-employee directors in its discretion (subject to the limits described in the preceding paragraph).

  21. 2023 Non-Employee Director Compensation Table

    2023 Non-Employee Director Compensation Table The following table sets forth information regarding the compensation earned for service on the board of directors by our non-employee directors during the year ended December 31, 2023. The compensation for Mr. Timm, who served as a named executive officer and employee director, is set forth below under “—2023 Summary Compensation Table.” Mr. Rosenthal, who resigned from our Board effective February 20, 2023, did not receive compensation related to service on our Board.

  22. 2023 Non-Employee Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards(1)(2) ($) | Option Awards(1)(2) ($) | All Other Compensation ($) | Total ($) | | Douglas Ulman | 108,371 | 71,375 | — | — | 179,746 | | Jerri DeVard | 105,000 | 71,375 | 725 | — | 177,100 | | Lawrence Hilsheimer(3) | 111,000 | 147,191 | 725 | — | 258,916 | | Nancy Kramer | 112,500 | 71,375 | — | — | 183,875 | | Scott Maw(4) | 9,775 | — | — | — | 9,775 | | Beth Birnbaum | 92,500 | 71,375 | — | — | 163,875 | | Julie Szudarek | 95,000 | 71,375 | — | — | 166,375 | | Donna Dorsey(5) | 16,841 | 59,441 | — | — | 76,282 |

  23. 2023 Non-Employee Director Compensation Table

    (1)The amounts reported in these columns reflect the aggregate grant date fair value of the option awards or stock awards, as applicable, granted to our non-employee directors as computed in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC Topic 718”). See Note 12 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of the assumptions made in determining the aggregate grant date fair value of our option awards and stock awards. Note that the amounts reported in these columns reflect the accounting cost for these awards, and do not reflect the actual economic value that may be realized by the non-employee directors upon the vesting of the awards, the exercise of the awards (as applicable) or the sale of the Class A common stock underlying such awards. These awards were granted pursuant to our non-employee director compensation policy that was in effect as of January 1, 2023, and consist of RSU grants vesting over a two-year period for each of our non-employee directors. Ms. Dorsey, who joined our board of directors after the date of the 2023 Annual Meeting received a pro-rated grant from the date of her appointment of October 26, 2023. Mr. Hilsheimer’s stock awards also include the value of cash retainers he elected to receive in the form of fully vested RSUs under our prior policy. Option awards granted to Ms. DeVard and Mr. Hilsheimer are described above. (2)The following table provides information regarding the aggregate number of shares of our Class A common stock or Class B common stock that were subject to the equity awards granted to our non-employee directors that were outstanding as of December 31, 2023:

  24. 2023 Non-Employee Director Compensation Table

    | Name | Stock Awards Outstanding at Year-End (#) | Option Awards Outstanding at Year-End (#) | | Douglas Ulman | 7,792 | 39,352 | | Jerri DeVard | 8,365 | 774 | | Lawrence Hilsheimer | 8,365 | 774 | | Nancy Kramer | 7,792 | 4,166 | | Beth Birnbaum | 7,792 | — | | Julie Szudarek | 7,792 | — | | Donna Dorsey | 6,532 | — |

  25. 2023 Non-Employee Director Compensation Table

    (3)Fees earned or paid in cash includes $26,000 retainer for service on the boards of directors of our subsidiary insurance companies. (4)Mr. Maw resigned from our board of directors effective February 28, 2023. (5)Ms. Dorsey was appointed to our board of directors effective October 26, 2023.

  26. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table sets forth the compensation for the fiscal years ended December 31, 2023 and December 31, 2022, as applicable, for our CEO, and our other two named executive officers.

  27. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation(3) ($) | All Other Compensation(4) ($) | Total ($) | | Alexander Timm Chief Executive Officer | 2023 | 750,000 | 2,600,000 | 2,121,471 | — | 3,206,250 | 10,085 | 8,687,806 | | | 2022 | 750,000 | — | 2,117,395 | — | 2,250,000 | 9,335 | 5,126,730 | | Mahtiyar Bonakdarpour President and Chief Technology Officer | 2023 | 500,000 | 1,275,000 | 1,503,127 | — | 900,000 | 10,085 | 4,188,212 | | | 2022 | 500,000 | 500,000 | 8,052,893 | — | 594,000 | 9,335 | 9,656,228 | | Jonathan Allison Chief Administrative Officer | 2023 | 488,846 | 600,000 | 703,593 | — | 1,425,000 | 10,085 | 3,227,524 |

  28. 2023 Summary Compensation Table

    (1)See “Additional Cash Awards for Mr. Bonakdarpour,” “Additional Cash Award for Mr. Timm” and “2022 Long-Term Incentive Plan Cash Payments” in the narrative to the Summary Compensation Table below for more information about these cash awards. (2)Reflects the aggregate grant date fair value of time-based restricted stock unit (“RSU”) and performance-based restricted stock unit (“PSU”) awards granted to our named executive officers, which value was determined in accordance with FASB ASC Topic 718. The grant date fair value for the RSU awards is based on the grant date fair value of the underlying shares of common stock. The grant date fair value for the PSU awards is based on the probable outcome of the vesting conditions of the PSUs, determined as of the grant date using a Monte-Carlo simulation. See “2023 Long-Term Incentives” in the narrative to the 2023 Summary Compensation Table below for more information about the stock awards provided in 2023. (3)Amounts shown represent annual cash incentive award payouts earned each year by our named executive officers under our annual cash incentive award program based on achievement of Company performance measures and individual performance. See “2023 Annual Cash Incentive Award” in the narrative to the 2023 Summary Compensation Table below for more information about these incentive payouts for 2023. (4)Amounts shown for 2023 represent Company matching contributions made to the 401(k) Plan and life insurance premiums paid by Root on behalf of our named executive officers. For more detail, please see the following table:

  29. 2023 Summary Compensation Table

    | Name | 2023 401(k) Plan Contributions ($) | 2023 Life Insurance Plan Premiums ($) | Total ($) | | A. Timm | 9,900 | 185 | 10,085 | | M. Bonakdarpour | 9,900 | 185 | 10,085 | | J. Allison | 9,900 | 185 | 10,085 |

  30. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    2023 Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth certain information regarding outstanding equity awards granted to our named executive officers that were outstanding as of December 31, 2023.

  31. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($)(1) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(14) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (14) | | A. Timm | — | — | — | — | 60,437(2) | 633,380 | 209,896(6) | 2,199,710 | | | — | — | — | — | 8,623(3) | 90,369 | | | | | — | — | — | — | 15,397(4) | 161,361 | | | | | — | — | — | — | 97,239(5) | 1,019,065 | | | | M. Bonakdarpour | 12,152 | — | 43.200 | 4/17/2029 | 11,101(7) | 116,338 | 143,476(10) | 1,503,628 | | | 3,240 | — | 12.200 | 7/20/2028 | 4,339(3) | 45,473 | | | | | — | — | — | — | 21,705(4) | 227,468 | | | | | — | — | — | — | 36,801(8) | 385,674 | | | | | — | — | — | — | 72,316(9) | 757,872 | | | | J. Allison | 10,636 | — | 5.148 | 12/12/2027 | 405(11) | 4,244 | 21,473(13) | 225,037 | | | 1,388 | — | 43.200 | 7/15/2029 | 3,564(3) | 37,351 | | | | | — | — | — | — | 4,698(4) | 49,235 | | | | | — | — | — | — | 63,652(12) | 667,073 | | |

  32. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    (1) All of the option awards were granted with a per share exercise price equal to the fair market value of one share of our common stock on the date of grant, as determined in good faith by our board of directors. (2)Reflects the number of shares acquired upon the exercise of stock options that remained unvested on December 31, 2023. Stock options granted to our named executive officers under the 2015 Plan (as defined below) permitted early exercise and, if such options are or were exercised, the shares of our common stock acquired upon the exercise of such options is considered restricted and subject to a repurchase right in favor of the Company. Such repurchase rights lapse, and vesting occurs, with respect to such restricted stock on the same vesting schedule as the original stock option. Restricted stock acquired by Mr. Timm upon the early exercise of stock options vests in equal monthly installments through June 2026. (3)Remaining RSUs vest in equal quarterly installments through February 2025. (4)Remaining RSUs vested in January and April 2024. (5)RSUs are scheduled to vest as to 18,949 units on April 1, 2025, 32,997 units on April 1, 2026, and 45,293 units on April 1, 2027. (6)PSUs are scheduled to vest as to 20,990 units on April 1, 2024, 41,979 units on April 1, 2025, 62,969 units on April 1, 2026 and 83,958 units on April 1, 2027, with each such vesting subject to attainment of certain stock price thresholds. (7)Remaining RSUs vested in March 2024. (8)Remaining RSUs vest in equal quarterly installments through April 2026. (9)RSUs vest as to 16,031 units on April 1, 2025, 24,399 units on April 1, 2026, and 31,886 units on April 1, 2027. (10)PSUs vest as to 14,348 units on April 1, 2024, 28,695 units on April 1, 2025, 43,043 units on April 1, 2026, and 57,390 units on April 1, 2027, with each such vesting subject to attainment of certain stock price thresholds. (11)Remaining RSUs vest in equal monthly installments through February 2025. (12)RSUs are scheduled to vest as to 10,083 units on April 1, 2024, 17,335 units on April 1, 2025, and 18,117 units on each April 1, 2026 and April 1, 2027. (13)PSUs vest as to 2,147 units on April 1, 2024, 4,295 units on April 1, 2025, 6,442 units on April 1, 2026, and 8,589 units on April 1, 2027, with each such vesting subject to attainment of certain stock price thresholds. (14)The market value of our Class A common stock is based on the closing price per share of our Class A common stock on December 29, 2023, of $10.48 per share.

  33. Potential Payments and Benefits Upon Termination or Change in Control

    Potential Payments and Benefits Upon Termination or Change in Control Pursuant to the employment agreements mentioned above with each of our named executive officers, if we terminate a named executive officer’s employment without “cause” (which does not include termination by reason of death or disability) or if the named executive officer resigns for “good reason” (as such terms are defined in each applicable named executive officer’s employment agreement), the named executive officer would receive the following severance payments and benefits: i.12 months’ continuation of his then-current base salary; ii.in the case of Messrs. Bonakdarpour and Allison, payment equal to the portion of the annual incentive award payment, if any, to be paid for the period beginning on January 1 of the year the termination occurs through the date of the termination on a pro rata basis; iii.up to 12 months of direct payment or reimbursement of COBRA premiums for himself and his eligible dependents; iv.accelerated vesting and exercisability of the unvested portion of each of his then-outstanding equity awards that otherwise would have vested had he remained employed for 12 months following the date of such termination; and v.if such termination occurs upon or within 12 months following a change in control of the Company (as defined in the 2020 Equity Incentive Plan (the “2020 Plan)) instead of the accelerated vesting described in clause (iv) above, 100% of the unvested equity awards would fully vest and become exercisable. Each named executive officer’s receipt of the foregoing payments and benefits described is subject to his timely execution and non-revocation of a release of claims in favor of the Company.

  34. CEO Pay Ratio

    CEO Pay Ratio Mr. Timm, our CEO, received annual total compensation of $8,687,806 in 2023, as reflected in the “2023 Summary Compensation Table.” We estimate that the median of the 2023 annual total compensation for all employees of the Company as of December 31, 2023 (the “Determination Date”), excluding our CEO, was $73,608, which amount comprises all applicable elements of compensation for 2023 in accordance with Item 402(c)(2)(x) of Regulation S-K (the “Median Annual Compensation”). The ratio of Mr. Timm’s annual 2023 total compensation to the Median Annual Compensation was approximately 118 to 1. We note that due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio calculation, the disclosure may involve a degree of imprecision, and thus, the disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described below. In addition to our CEO, we employed a total of 680 employees, representing all full-time, part-time, seasonal and temporary employees of the Company, as of the Determination Date, of which 679 employees were based in the United States. We excluded one employee, who is based in the Cayman Islands, representing less than 5% of the total employee population, and this exclusion covered all of our employees outside of the United States. We evaluated 2023 Form W-2 box 1 income for these 679 employees to determine the Median Annual Compensation of all employees of the Company. In determining the Median Annual Compensation, we did not annualize compensation for employees who worked less than all of 2023.

  35. Pay Versus Performance

    Pay Versus Performance The following table provides information regarding the “compensation actually paid” to our named executive officers as determined in accordance with Item 402(v) of Regulation S-K and as described below, as well as Root’s total stockholder return and Root’s net income for the fiscal years ended December 31, 2023, December 31, 2022, and December 31, 2021.

  36. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO ($) (1)(2)(3) | Compensation Actually Paid to PEO ($) (2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) (1)(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($) (2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($) | Net Income ($) (in millions) | | 2023 | 8,687,806 | 9,481,060 | 3,970,368 | 4,538,878 | 3.71 | (147) | | 2022 | 5,126,730 | (3,084,498) | 5,231,713 | 1,612,584 | 1.59 | (298) | | 2021 | 5,784,695 | (25,109,556) | 9,760,351 | (5,961,079) | 19.73 | (521) |

  37. Pay Versus Performance

    (1)As disclosed in the 2023 Summary Compensation Table (“SCT”) above and prior years’ SCTs. (2)“Compensation actually paid” to the PEO and average “compensation actually paid” to the non-CEO named executive officers includes the amounts set forth in the “2023 Summary Compensation Table” total columns above (or in prior years’ SCTs), adjusted as set forth in the table below, as determined by Item 402(v) of Regulation S-K. Stock option grant date fair values are determined based on the Black-Scholes option pricing model as of the date of grant. Adjustments have been made using stock option fair values based on the Black-Scholes option pricing model as of the measurement dates as described in the table below. RSU grant date fair values are determined using the stock price on the date of grant. Adjustments have been made using the stock price as of the measurement dates as described in the table below. Please note that, while similar adjustment information was provided in our 2023 proxy statement for 2021 and 2022, under applicable SEC guidance, repeating such adjustment information is not required in this proxy statement because it is not material to our stockholders’ understanding of the information reported in the table above for 2023 or the relationship disclosures provided below.

  38. Pay Versus Performance

    | PEO | 2023 ($) | | -SCT “Stock Awards” Column Value | (2,121,471) | | -SCT “Option Awards” Column Value | — | | + covered year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year end | 2,259,551 | | +/-y change in fair value (from prior year end to covered year end) of equity awards granted prior to covered year that are outstanding and unvested as of the covered year end | 517,961 | | +vesting date fair value of equity awards granted and vested as of the covered year end | — | | +/- year-over-year change in fair value of equity awards granted in prior years that vested in the covered year | 137,213 | | - fair value as of prior year end of equity awards granted prior to covered year that failed to vest in the covered year | — | | +dividends or earnings paid on equity awards in the covered year | — | | Total Amount Added or Deducted from Summary Compensation Table Total | 793,254 |

  39. Pay Versus Performance

    | Average of Non-PEO Named Executive Officers | 2023 ($) | | -SCT “Stock Awards” Column Value | (1,103,360) | | -SCT “Option Awards” Column Value | — | | + covered year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year end | 1,199,897 | | +/-y change in fair value (from prior year end to covered year end) of equity awards granted prior to covered year that are outstanding and unvested as of the covered year end | 247,426 | | +vesting date fair value of equity awards granted and vested as of the covered year end | — | | +/- year-over-year change in fair value of equity awards granted in prior years that vested in the covered year | 224,547 | | - fair value as of prior year end of equity awards granted prior to covered year that failed to vest in the covered year | — | | +dividends or earnings paid on equity awards in the covered year | — | | Total Amount Added or Deducted from Summary Compensation Table Total | 568,510 |

  40. Pay Versus Performance

    (3)Our Chief Executive Officer (“PEO”) for the year ended December 31, 2021, December 31, 2022 and December 31, 2023 is Mr. Timm. The named executive officers other than our PEO for the year ended December 31, 2021 were our former named executive officers Daniel Rosenthal, Hemal Shah, Anirban Kundu, and Daniel Manges. The named executive officers other than our PEO for the year ended December 31, 2022 were our former Chief Financial Officer, Robert Bateman, and Messrs. Bonakdarpour, Rosenthal, and Shah. The named executive officers other than our PEO for the year ended December 31, 2023 are Messrs. Bonakdarpour and Allison. Total Stockholder Return (“TSR”) is intended to reflect the change in value of a $100 investment made on December 31, 2020. The chart below demonstrates the relationship between Root’s TSR and compensation actually paid (or “CAP”) to Mr. Timm and, on average, to our other applicable named executive officers. The compensation actually paid to Mr. Timm and our other applicable named executive officers generally correlated with our net loss over the period January 1, 2021 through December 31, 2023 as demonstrated in the chart below.