DEF 14A of Root, Inc.
Filed Apr 24, 2026 · FY20250001788882-26-000033
PROPOSAL 1 - ELECTION OF DIRECTORS
PROPOSAL 1 - 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 III directors: Lawrence Hilsheimer, Alexander Timm and Douglas Ulman, whose terms will expire at the Annual Meeting; •Class I directors: Beth Birnbaum, Donna Dorsey and Julie Szudarek, whose terms will expire at the 2027 Annual Meeting; and •Class II directors: Jerri DeVard and Nancy Kramer, whose terms will expire at the annual meeting of stockholders to be held in 2028. 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.
Messrs. Hilsheimer, Timm and Ulman have each been nominated for reelection to serve as a Class III
Messrs. Hilsheimer, Timm and Ulman have each been nominated for reelection to serve as a Class III director. Each of Messrs. Hilsheimer, Timm and Ulman is currently a member of our board of directors and was previously elected by the stockholders at the annual meeting of stockholders held in 2023. Each of these nominees has agreed to stand for reelection 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 2029 and until his 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 shall promptly tender 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 and high-level management experience necessary to oversee and direct our business. To that end, the nominating and governance committee has identified and evaluated nominees in the broader context of the board of directors’ 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 nominating and governance 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 nominating and governance committee also takes into account diversity (including gender identity, race, ethnicity, nationality, religion, disability, age and sexual orientation) and other factors that it deems appropriate to maintain a balance of knowledge, experience, and capability on the board of directors. 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 nominating and governance committee to believe that that nominee should continue to serve on the board of directors. However, each of the members of the nominating and governance 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.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH CLASS III DIRECTOR NOMINEE NAMED ABOVE. 10
INFORMATION REGARDING
INFORMATION REGARDING
DIRECTOR NOMINEES AND CURRENT DIRECTORS
DIRECTOR NOMINEES AND CURRENT DIRECTORS The following table sets forth, for the Class III 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.
DIRECTOR NOMINEES AND CURRENT DIRECTORS
| Nominees | Age | Term Expires | Position(s) Held | Director Since | | Lawrence Hilsheimer | 68 | 2026 | Director | 2020 | | Alexander Timm | 37 | 2026 | Co-Founder, CEO and Director | 2015 | | Douglas Ulman | 48 | 2026 | Director | 2016 |
Nominees for Election at the 2026 Annual Meeting of Stockholders
Nominees for Election at 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, beginning as EVP/CFO, then as 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 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 served as a member of the board of directors of GoHealth, Inc. (Nasdaq: GOCO), a digital health insurance marketplace, from 2020 to 2025. He is a 2023 Aspen Institute Henry Crown Fellow. 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. He currently serves as Vice Chair of the Board of Pelotonia, a nonprofit based in Columbus, Ohio that has raised more than $360 million for cancer research since 2009. From December 2014 to January 2024, Mr. Ulman served as Chief Executive Officer of Pelotonia. From 2008 to December 2014, he served as the President and Chief Executive Officer of The LIVESTRONG Foundation. A social entrepreneur and community builder, Mr. Ulman founded the Ulman Cancer Fund for Young Adults (now the Ulman Foundation) after his own cancer diagnosis. He also founded Orli, an impact investment firm and philanthropic advisory platform, in 2022. He serves as the Chair of Signal Ohio’s board and is a member of both The Columbus Partnership and Young Presidents’ Organization (YPO). He recently served as a Hauser Fellow at Harvard University Kennedy School Center for Public Leadership. 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. 11
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.
Information About Our Continuing Directors
| Continuing Directors | Age | Term Expires | Position(s) Held | Director Since | | Beth Birnbaum | 53 | 2027 | Director | 2022 | | Donna Dorsey | 55 | 2027 | Director | 2023 | | Julie Szudarek | 54 | 2027 | Director | 2022 | | Jerri DeVard | 67 | 2028 | Director | 2020 | | Nancy Kramer | 70 | 2028 | Director | 2020 |
Directors Continuing in Office Until the 2027 Annual Meeting of Stockholders
Directors Continuing in Office Until the 2027 Annual Meeting of Stockholders Beth Birnbaum. Ms. Birnbaum has served on our board of directors since March 2022. Ms. Birnbaum currently serves as Chief Operating Officer of Mudstack, Inc., a platform for version control, management and review of digital assets. Previously, 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 served 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, from 2018 to 2024. 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 former director of another public company. Donna Dorsey. Ms. Dorsey has served as a member of our board of directors since October 2023. Since June 2025, Ms. Dorsey has served as Chief Human Resources Officer of Alight Solutions, LLC, a leading cloud-based human capital and technology-enabled services provider that helps large employers administer employee benefits and manage human resources, health, wealth, well-being, and related workforce services. From 2015 to May 2025, Ms. Dorsey served as Executive Vice President and Chief People & Culture Officer for International Motors, LLC (“International Motors”), a manufacturer of commercial transportation vehicles. In this role, she was responsible for all aspects of human resource strategy and provided strategic business and human capital leadership that drove change and innovation at the company. Prior to that role, Ms. Dorsey led strategic human capital direction for all business operations at International Motors while overseeing International Motors’ team of human capital business partners. 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. From October 2023 to March 2026, Ms. Szudarek 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 Mifarma (“Atida”), one of the largest online pharmacies in Europe, from 2019 to 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 12 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 former Chief Executive Officer.
Directors Continuing in Office Until the 2028 Annual Meeting of Stockholders
Directors Continuing in Office Until the 2028 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 Inc. (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.
Board Summary
Board Summary
Board Summary
| Total Number of Directors | 8 | | | Average Tenure (from IPO) | 4.7 Years | | | Demographic Background | Female | Male | | Gender Identity | 5 | 3 | | African American or Black | 2 | — | | White | 3 | 3 | | LGBTQ+ | 1 | |
Board Summary
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Board Skills Matrix
Board Skills Matrix
Board Skills Matrix
| Skills and Experience | 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 | ✓ | ✓ | | ✓ | ✓ | ✓ | | |
Board Skills Matrix
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INFORMATION REGARDING THE BOARD OF DIRECTORS
INFORMATION REGARDING THE BOARD OF DIRECTORS
NON-EMPLOYEE DIRECTOR COMPENSATION
NON-EMPLOYEE DIRECTOR COMPENSATION
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy
| The non-employee director compensation policy (the “Director Compensation Policy”) was modified in May 2025, adjusting director retention amounts, as reflected below. These modifications are designed to enable us to attract and retain, on a long-term basis, highly qualified non-employee directors. Under the Director Compensation Policy, each director who is not an employee of Root is eligible to receive the following annual cash retainers for their service, effective May 1, 2025: | | | | | | | Eff. May 2025 Member ($) | Eff. May 2025 Chair ($)(1) | Prior Member ($) | Prior Chair ($)(2) | | Board of Directors | 85,000 | 20,000(3) | 85,000 | 20,000(3) | | Audit, Risk and Finance Committee | 10,000 | 22,500 | 10,000 | 20,000 | | Compensation Committee | 7,500 | 17,500 | 7,500 | 15,000 | | Nominating and Governance Committee | 5,000 | 12,500 | 5,000 | 10,000 | | Strategy Committee | 5,000 | 12,500 | 5,000 | 10,000 |
Non-Employee Director Compensation Policy
(1) Effective May 2025, the amounts listed in this column for committee chairs are paid in lieu of amounts received for applicable committee member service. (2) Prior to May 2025, the amounts listed in this column for committee chairs were paid in addition to amounts received for applicable committee member service. (3) An additional annual retainer of $22,500 (previously $20,000) is also provided to our lead independent director and paid in addition to the board member retainer. The cash compensation described above is payable to our eligible non-employee directors in equal quarterly installments. 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. The Director Compensation 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 2025 of 1,119 RSUs had a targeted value of $150,000, generally vesting on the date of the 2026 Annual Meeting. For 2025, the value of each RSU award granted under the Director Compensation Policy was based on the targeted value divided by the closing price of a share of our Class A common stock on the date of grant, conforming with the methodology utilized for employee RSU grants. Under the Director Compensation Policy, each director may make an election to defer delivery of shares in settlement of RSU awards until such director retires from board service, or until immediately prior to a “change in control” (as defined in our 2020 Equity Incentive Plan (the “2020 Plan”)). In addition, each RSU held by a non- employee director who remains in service until immediately prior to a change in control of Root will become fully vested as of immediately prior to the closing of such change in control transaction. 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 $650,000 in total value, or if such non-employee director is first appointed or elected to our board of directors during such calendar year, $900,000 in total value. Notwithstanding the Director Compensation Policy, our board of directors or the compensation committee may make supplemental grants to our non-employee directors in its discretion (subject to the limits described in the preceding paragraph). 27
2025 Non-Employee Director Compensation Table
2025 Non-Employee Director Compensation Table The following table sets forth information regarding the compensation earned for service on the board of directors by our non-employee directors during the year ended December 31, 2025. The compensation for Mr. Timm, who served as a named executive officer and employee director, is set forth below under “—2025 Summary Compensation Table.”
2025 Non-Employee Director Compensation Table
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) | | Douglas Ulman | 108,021 | 149,935 | 257,956 | | Jerri DeVard | 103,125 | 149,935 | 253,060 | | Lawrence Hilsheimer | 157,250(4) | 149,935 | 307,185 | | Nancy Kramer | 108,229 | 149,935 | 258,164 | | Beth Birnbaum | 92,917 | 149,935 | 242,852 | | Julie Szudarek | 123,917(4) | 149,935 | 273,852 | | Donna Dorsey | 93,333 | 149,935 | 243,268 |
2025 Non-Employee Director Compensation Table
(1)Reflects proration for changes to board and committee member retainers in May 2025 and changes to committee service during the year. (2)The amounts reported in this column reflect the aggregate grant date fair values of the stock awards granted to our non-employee directors as computed in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 718 (“ASC Topic 718”). See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of the assumptions made in determining the aggregate grant date fair value of our stock awards. Note that the amounts reported in this column 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 or the sale of the Class A common stock underlying such awards. These awards were granted to each of our non-employee directors on the date of our 2025 Annual Meeting (June 4, 2025) pursuant to the Director Compensation Policy and consist of grants of 1,119 RSUs generally vesting on the date of our 2026 Annual Meeting. (3)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, 2025:
2025 Non-Employee Director Compensation Table
| Name | Stock Awards Outstanding at Year-End (#) | Option Awards Outstanding at Year-End (#) | | Douglas Ulman | 1,119 | 33,352 | | Jerri DeVard | 1,119 | — | | Lawrence Hilsheimer | 1,119 | — | | Nancy Kramer | 1,119 | 4,166 | | Beth Birnbaum | 1,119 | — | | Julie Szudarek | 1,119 | — | | Donna Dorsey | 1,119 | — |
2025 Non-Employee Director Compensation Table
(4)Fees earned or paid in cash includes $26,000 retainer for service on the boards of directors of our subsidiary insurance companies. 28
Overview
| 2025 Program Highlights | | Named executive officer long-term incentives granted solely in the form of Performance Share Units | | Reinforces pay-for-performance philosophy | | New Performance Share Unit design with a cumulative three-year performance period | | Focuses on long-term profitable growth | | Adoption of stock ownership guidelines | | Helps align executive officer and non-employee director interests with those of stockholders | | Four consecutive “Say-on-Pay” voting results above 90% | | We continue to assess the executive compensation program to address stockholder concerns |
2025 Key Executive Compensation Results
2025 Key Executive Compensation Results Our annual incentive compensation program was directly linked to the continued profitable growth of the Company by balancing the key metrics of New Writings and Adjusted EBITDA. The compensation committee’s assessment of 2025 performance resulted in funding of 150% of target. Equity awards granted in 2025 were delivered in the form of Performance Share Units (“PSUs”) designed to align a significant part of the named executive officers’ total compensation with the Company’s financial performance. The PSUs can be earned upon the achievement of predetermined Policies In Force and Gross Accident Period Loss Ratio goals (as defined below), with the potential to earn 200% of target units over the full three-year performance period, which is divided into three overlapping sub-performance periods of one, two, and three years. Earning opportunities are backloaded to the most heavily weighted three-year performance period. The one-year sub-performance period was completed at the end of 2025, which resulted in vesting of 20% of the target shares awarded.
Executive Compensation Philosophy
Executive Compensation Philosophy Our executive compensation program reflects our overall corporate mission to provide fair, personal, and simpler programs with a goal to recruit and retain those with the ability to accomplish Root’s revolutionary work. We annually review the compensation of our executive leadership, including our named executive officers, to help ensure it is market-competitive and aligned with stockholders’ interests. We also review our executive compensation program against Root’s financial and strategic initiatives to provide incentives that help position Root to build a world class insurance company. Our program emphasizes a pay-for-performance approach to compensation by tying a majority of our named executive officers’ compensation to Root’s financial performance via short- and long-term incentives. Long-term incentives represent the largest portion of named executive officers’ target compensation and in 2025 were granted solely in the form of PSUs that can be earned upon achievement of predetermined financial metrics and reward long- term profitable growth. The focus on performance-based equity and the overall pay-for-performance approach helps align the named executive officers’ pay outcomes directly with stockholder interests. Any appreciation or depreciation in share price will also have a direct impact to the named executive officers’ equity incentives, with realizable values experiencing the same appreciation or depreciation. The pay-for-performance correlation is illustrated in the exhibit below, which displays our CEO’s target compensation and estimated realizable compensation for years 2021 through 2025 in comparison to Annual Total Stockholder Return. With a majority of our CEO’s total compensation tied to long-term incentives, compensation is closely tied to share price performance. 32 Target CEO compensation is the sum of base salary, target annual incentive, and grant date fair value of equity awards as disclosed in the Grants of Plan-Based Awards table in the applicable year. Estimated realizable CEO compensation is the sum of base salary, non-equity incentive plan compensation paid for the applicable year’s performance, the value of time-based equity granted that year as of the applicable vesting date or December 31, 2025, if outstanding, and the value of performance-based equity granted that year as of the applicable vesting date or based on estimated performance through December 31, 2025, if outstanding. Annual Total Stockholder Return reflects the share price change between the beginning and end of the applicable year.
Executive Compensation Policies and Practices
| What We Do | What We Don’t Do | | ☑ Independent Compensation Consultant Our compensation committee has engaged an independent compensation consultant, Compensia, a national compensation consulting firm, that performs no other services for Root. ☑ Independent Compensation Committee Our compensation committee is comprised solely of independent directors. ☑ Compensation Recovery (“Clawback”) Policy We have enacted a compensation recovery policy that complies with the requirements of the SEC and the applicable Nasdaq listing standards to recover certain incentive-based compensation in the event of an accounting restatement or other action deemed to cause financial or reputational harm, as further described in such policy. ☑ Annual Say-On-Pay Vote We solicit an annual non-binding stockholder advisory vote to approve our named executive officer compensation. ☑ Reward Performance Over Multiple Time Horizons Our compensation program is structured to encourage our named executive officers to deliver strong results over the short term, while making decisions that create long-term sustained value over time for our stockholders. ☑ Compensation At-Risk In order to align the interests of our named executive officers with those of our stockholders, a significant portion of the target total direct compensation for our named executive officers is equity-based and/or “at risk,” subject to Company performance. ☑ Succession Planning The compensation committee periodically reviews succession plans for key executive positions. | ☒ Perquisites and Other Benefits Unless deemed necessary to ensure business continuity, we generally do not offer perquisites or other personal benefits to our named executive officers that are not widely available to all full-time employees. ☒ Stock Option Repricing We have not repriced out-of-the-money stock options granted to our named executive officers. ☒ Hedging and Pledging of our Equity Securities We prohibit our employees, including our named executive officers and the non-employee members of our board of directors, from hedging our equity securities or purchasing our equity securities on margin or holding them in a margin account. Pledging our shares as collateral for a loan is also prohibited except by our non-employee directors and our executive officers with the prior approval of our CFO and Chief Legal Officer and Secretary. None of our executive officers or non-employee directors has pledged our equity securities as of the date of this Proxy Statement. ☒ No Separate Executive Retirement Plans We do not offer defined benefit pension plans or any non- qualified deferred compensation plans to our named executive officers other than the plans and arrangements that are available to all our other employees. Our named executive officers are eligible to participate in our Section 401(k) retirement savings plan on the same basis as our other employees. ☒ No Guaranteed Salary Increases or Bonuses Our named executive officers are not guaranteed an annual salary increase or bonus, whether discretionary or as part of the annual incentive program. |
Role of the Compensation Committee
Role of the Compensation Committee The compensation committee oversees our executive compensation program policies, plans, and practices. The compensation committee regularly meets with and without management present and has the final authority to determine compensation programs, policies, and amounts to be paid to our named executive officers. Typically, early in each year, the compensation committee will approve annual cash incentive award payouts, long-term incentive compensation awards, and any adjustments to base salary or target annual cash incentive award opportunities.
Role of the Compensation Consultant
Role of the Compensation Consultant During 2025, the compensation committee retained Compensia, Inc. (which we refer to as the “compensation consultant” in this Proxy Statement) to provide support with respect to the oversight of our executive compensation program. The consultant regularly attends compensation committee meetings, both with and without management present, and the compensation committee will occasionally request reviews of market trends for plan design and analyses of competitive market compensation information to assist with its decision-making. The compensation consultant provides information, advice, and other requested support to our compensation committee, but does not make decisions relating to the amount or design of our compensation program for our named executive officers. The compensation committee has annually assessed Compensia’s independence and, after considering and assessing all relevant factors (including those required by the SEC and Nasdaq) that could give rise to a potential conflict of interest, concluded that Compensia’s work did not raise any conflicts of interest. 34
Comparative Compensation Information
Comparative Compensation Information The compensation committee uses a compensation peer group as a reference to assess competitive market practices and to evaluate the 2025 compensation levels for our named executive officers and the non-employee director compensation policy. The compensation committee reviews the peer group each year and makes adjustments to its composition as necessary to help ensure that its members are comparable to Root. When reviewing the 2025 peer group, the compensation committee considered relevant selection criteria, including company ownership structure, headquarter country location, industry, market capitalization, revenue, and proximity to the completion of an initial public offering, among other qualitative factors. Following its annual review of our peer group with the compensation consultant in 2025, the compensation committee determined that updates to the peer group were necessary due to the increase in Root’s market capitalization and revenue, along with the continued evolution of the peer group to be a balance of traditional insurers and Fintech/Insurtech companies, which reflects the talent market we compete in and companies investors compare us against. The following tables display the prior peer group, which was used for 2025 compensation decisions, and the new peer group, which was approved in July 2025 and used for 2026 compensation decisions.
Comparative Compensation Information
| Prior Peer Group (1) | | | | | Ambac Financial Group AvidXchange Holdings The Baldwin Ins. Group EVERTEC Flywire | GoHealth Goosehead Insurance Guidewire Software HCI Group Int’l Money Express | Lemonade Lending Club Marqeta MoneyLion Palomar Holdings | Safety Ins. Group Tiptree United Fire Group Universal Ins. Holdings Upstart Holdings |
Comparative Compensation Information
| New Peer Group | | | | | AvidXchange Holdings Bread Financial Holdings The Baldwin Ins. Group EVERTEC Flywire | Guidewire Software HCI Group Lemonade Lending Club Marqeta | MoneyLion OneMain Holdings Palomar Holdings Safety Ins. Group Tiptree | Trupanion United Fire Group Universal Ins. Holdings Upstart Holdings WEX |
Comparative Compensation Information
In approving the new peer group, the compensation committee considered our reported trailing 12-month revenue, as was publicly disclosed through June 2025, and 30-day average market capitalization as of June 2025, relative to the proposed peer group, as follows: 75th Percentile ($1,453) 75th Percentile ($4,401)
Root ($2,144)
Root ($2,144) 25th Percentile ($597) 25th Percentile ($1,208) 35 To analyze the compensation practices of the companies in our compensation peer group, the compensation consultant gathered data from public filings (primarily proxy statements) of the peer group companies. This market data was then used as a reference point for the compensation committee to assess our current compensation program in the course of its deliberations on compensation forms and amounts.
Key 2025 Compensation Program Elements
Key 2025 Compensation Program Elements Our executive compensation program consists of three primary elements—base salary, an annual cash incentive award opportunity and long-term incentive compensation in the form of equity awards, as displayed in the following table:
Key 2025 Compensation Program Elements
| Element | Purpose | Design | | Base Salary | Fixed portion of the target annual total direct compensation to attract and retain named executive officers | Reviewed annually by the compensation committee to appropriately reflect each named executive officer’s scope and responsibilities in context of the external market | | Annual Cash Incentive Opportunity | Program intended to motivate achievement of the Company’s annual financial and operating goals | For 2025, based on the achievement of predetermined financial measures of New Writings and Adjusted EBITDA | | Long-Term Incentive Compensation | Performance and service-based equity compensation to reward our named executive officers for meeting or exceeding key financial objectives and to help align compensation with stockholder value | For 2025, delivered in the form of Performance Share Units and based on the achievement of predetermined financial measures of Policies In Force and Gross Accident Period Loss Ratio over a three-year performance period |
2025 Annual Cash Incentive Program
2025 Annual Cash Incentive Program Our named executive officers participate in our annual cash incentive award program, which is intended to motivate our named executive officers to contribute to the achievement of Root’s annual financial and operating goals. For 2025, as part of its annual review of our executive compensation program, the compensation committee approved the Root, Inc. 2025 Short-Term Incentive Plan (the “2025 STI Plan”). Our compensation committee selects the performance measures and sets target performance levels for the annual cash incentive award program that align with the achievement of our financial and operational goals, with above-target payouts designed for exceeding the target performance goals and below-target payouts, or no payouts, when the goals are not achieved.
Target Annual Cash Incentive Award Opportunities
Target Annual Cash Incentive Award Opportunities Each participant in the 2025 STI Plan, including each of the named executive officers, was eligible to receive a target annual cash incentive award opportunity, expressed as a percentage of his or her annual base salary. For 2025, as part of its executive compensation review prepared by its compensation consultant, the compensation committee reviewed the 2025 STI Plan targets of our named executive officers. Upon this review, the compensation committee determined that the target annual cash incentive award opportunities for each of the named executive officers were appropriate and consistent with the competitive market and thus required no change. The 2025 target annual cash incentive award opportunities of our named executive officers under the 2025 STI Plan are set forth in the following table:
Target Annual Cash Incentive Award Opportunities
| Name | 2024 Target Annual Incentive Opportunity as % of Base Salary | 2025 Target Annual Incentive Opportunity as % of Base Salary | | A. Timm | 150% | 150% | | M. Binkley | 75% | 75% | | M. Bonakdarpour | 100% | 100% | | J. Allison | 100% | 100% |
2025 Annual Cash Incentive Performance Award Measures
2025 Annual Cash Incentive Performance Award Measures The compensation committee selected a performance matrix composed of New Writings and Adjusted EBITDA as the Company-wide performance measures to be used to assess achievement of 2025 priorities and performance under the 2025 STI Plan. The matrix balanced the performance between the two measures to incentivize the 37 continuous focus on profitable growth, while allowing for agile strategy changes in the event of adverse competitive market shifts. The matrix consisted of the New Writings performance measure along one axis and Adjusted EBITDA along the other axis with each combination corresponding to a funding percentage. In setting the combination of New Writings and Adjusted EBITDA that represented the target funding, the committee considered the prior-year actual performance along with the 2025 plan. The level of New Writings performance that represented the target-level funding was set above the prior year actual, while the maximum level of New Writings performance on the matrix called for almost doubling of prior-year actual performance achievement. In light of the above target- level plan achievement in the prior year and increased competition in the insurance marketplace, the level of Adjusted EBITDA performance that represented the target-level funding was set below the prior year actual performance, while the maximum level of Adjusted EBITDA performance on the matrix called for doubling of prior year actual performance achievement. Our named executive officers had the opportunity to achieve a payout of up to 300% of their target annual cash incentive award opportunity based on our actual achievement compared to the pre- established targets for these performance measures, with payouts above 200% of target reserved for exceptional performance. For purposes of the 2025 STI Plan: •“New Writings” is defined as the count of new policies written based on the initial (term 1) policy effective date in the calendar period 2025. Rewrites from previously canceled policies are considered. This metric is the best measure of company growth, unaffected by offsets. New Writings are inclusive of direct and partnership acquisition channels, and •“Adjusted EBITDA,” a non-GAAP financial measure, is defined as net income (loss) excluding interest expense, income tax expense, depreciation and amortization, share-based compensation, loss on extinguishment of debt, warrant compensation expense, restructuring charges, legal fees and other items that do not reflect our ongoing operating performance. For 2025, also excluding incremental short-term incentive payouts above target and expense related to additional short-term incentive eligibility for employees. After these adjustments, the resulting calculation represents expenses directly attributable to our operating performance. We use Adjusted EBITDA as an internal performance measure in the management of our operations because we believe it provides management and other users of our financial information useful insight into our results of operations and underlying business performance. Adjusted EBITDA should not be viewed as a substitute for net income/ loss calculated under GAAP, and other companies may define Adjusted EBITDA differently.
Annual Cash Incentive Award Payouts
Annual Cash Incentive Award Payouts In February 2026, the compensation committee assessed the performance against the predetermined matrix of New Writings and Adjusted EBITDA in the 2025 STI Plan. The compensation committee first measured the performance of actual 2025 New Writings and Adjusted EBITDA and determined that per the plan design the matrix corresponded to 213% of target funding. After discussions with management and considering the guiding principle under the 2025 STI Plan that payouts above 200% should occur only in the case of exceptional performance, the compensation committee decided to exercise downward discretion to fund payouts at 150% of target in light of our 2025 total stockholder return and to calibrate pay outcomes with its broad assessment of Company performance for the year. Accordingly, the named executive officers received the following cash payouts under the 2025 STI Plan:
Annual Cash Incentive Award Payouts
| Name | Target Annual Incentive Opportunity $ | % of Target | Total Payout $ | | A. Timm | $1,125,000 | 150% | $1,687,500 | | M. Binkley | $375,000 | 150% | $562,500 | | M. Bonakdarpour | $550,000 | 150% | $825,000 | | J. Allison | $520,000 | 150% | $780,000 |
Annual Cash Incentive Award Payouts
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Long-Term Incentives
Long-Term Incentives We believe that a significant component of our target annual total direct compensation opportunities for our named executive officers should be target long-term incentive compensation in the form of equity awards. The compensation committee has the ability to grant, and has previously granted, equity awards to named executive officers in the form of stock options, restricted stock units (“RSUs”) and PSUs. Equity awards represent an opportunity to realize value based on long-term stock price performance, and they serve as a tool to reward and help retain our named executive officers. As a result of its 2025 compensation review, the compensation committee granted equity awards to our named executive officers in the form of PSUs (“2025 PSUs”) using a redesigned structure that measured performance over three years. The 2025 PSUs, which were granted in May 2025, may be earned depending on achievement of goals related to a Gross Accident Period Loss Ratio and Policies In Force goal matrix. The overall performance period begins on January 1, 2025 and ends on December 31, 2027 and is divided into three sub-performance periods, each beginning on January 1, 2025 and ending on December 31 of 2025, 2026, and 2027, respectively. These sub- performance periods are one, two, and three years in duration with a back-loaded, cumulative opportunity to earn up to 200% of target PSUs at the conclusion of the overall three-year performance period. 2025 PSUs may be earned and vest upon the conclusion of each sub-performance period as follows:
Long-Term Incentives
| Sub-Performance Period | PSU Earning and Vesting Opportunity | | January 1, 2025 to December 31, 2025 | Up to 20% of target PSUs | | January 1, 2025 to December 31, 2026 | Up to 55% of target PSUs minus any PSUs earned in the prior sub- performance period | | January 1, 2025 to December 31, 2027 | Up to 200% of target PSUs minus any PSUs earned in the prior sub- performance periods |
Long-Term Incentives
With the redesigned structure, we recognized an accelerated accounting expense in 2025 reflecting the three sub- performance period nature of the grant. This impact is expected to normalize over time as three concurrent in-flight grants are established, creating a more balanced and steady expense recognition pattern. See Notes 2 and 12 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional share-based compensation policies and expense details. For purposes of the 2025 PSUs: •Policies In Force is defined as the number of current and active auto insurance policyholders underwritten by the Company as of the performance period, and •Gross Accident Period Loss Ratio, expressed as a percentage, is defined as all losses and claims expected to arise from insured events that occurred during the applicable period regardless of when they are reported and finally settled divided by gross premiums earned for the same period. In determining the design of the 2025 PSUs, the compensation committee considered market-prevalent equity grant practices and Root’s approach of granting only performance-based equity in lieu of a combination of both performance-based and time-vesting equity. In determining the values of these awards, the compensation committee considered the market analysis prepared by its consultant, the outstanding equity holdings of each named executive officer, the impact of the award on Root’s dilution and the number of shares available for issuance under our 2020 Equity Incentive Plan. The target 2025 PSUs granted to our named executive officers in 2025 were as follows:
Long-Term Incentives
| Name | Target 2025 PSUs | 2025 PSUs Grant Date Fair Value | | A. Timm | 43,681 | $5,499,875 | | M. Binkley | 20,848 | $2,624,972 | | M. Bonakdarpour | 29,386 | $3,699,991 | | J. Allison | 19,061 | $2,399,971 |
Long-Term Incentives
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Vested and Outstanding PSUs
Vested and Outstanding PSUs The PSUs granted in 2023 were granted with the performance criteria consisting of four separate stock price targets to be met only (1) on or following the satisfaction of certain time-based service conditions, and (2) if the applicable pre-established stock price target is met or exceeded based on the average closing price per share of our Class A common stock over a consecutive 45-trading-day period during the performance period. As of the end of 2025, the performance criteria was satisfied as follows:
Vested and Outstanding PSUs
| Stock Price Target Tranche (1) | Stock Price | | Time-Based Service Condition Status | | | Target | Status | | | 1 | $16.76 | Condition Satisfied | Condition Satisfied | | 2 | $25.14 | Condition Satisfied | Condition Satisfied | | 3 | $33.52 | Outstanding | Outstanding | | 4 | $41.90 | Outstanding | Outstanding |
Vested and Outstanding PSUs
(1)In April 2025 the second stock price target of $25.14/share and applicable time-based service condition were met. The gross share payouts realized by each of the named executive officers were as follows: Mr. Timm, 41,979; Ms. Binkley, 3,184; Mr. Bonakdarpour, 28,695; and Mr. Allison, 4,295. The third stock price target of $33.52 and service condition were met in April 2026. The final stock price target of $41.90 and service condition may be met on or after April 1, 2027. The performance period for the 2024 PSUs and the first sub-performance period of the 2025 PSUs were completed as of the end of 2025 and the payouts were as follows:
Vested and Outstanding PSUs
| PSUs | Payout Percentage | | 2024 PSUs | 154% | | 2025 PSUs: Sub-performance period January 1, 2025 to December 31, 2025 | 20% of target PSUs |
Vested and Outstanding PSUs
The 2024 PSUs were earned after a one-year performance period, corresponding to calendar year 2025, upon the achievement of predetermined goals tied to financial measures of 2025 Adjusted EBITDA and New Writings, with the opportunity to earn 200% of target PSUs. The two financial measures were arranged in a matrix where a combination of performance resulted in a predetermined payout percentage of 154%. In order to add retentive value to the 2024 PSUs and to align the awards with long-term stockholder value, the earned PSUs are subject to an additional time-vesting requirement where 25% of the earned PSUs vested upon certification of the results in February 2026, and an additional 25% will vest on or about January 1 of each calendar year thereafter until the award is fully time-vested. The shares tied to the first sub-performance period of the 2025 PSUs were earned after a one-year performance period corresponding to calendar year 2025, upon the achievement of predetermined goals tied to measures of Gross Accident Period Loss Ratio and Policies In Force. The two financial measures were arranged in a matrix where a combination of performance resulted in a predetermined payout percentage with a maximum of 20% of the full target 2025 PSUs eligible to be earned in the first sub-performance period. Upon certification of the results in February 2026, the maximum 20% of target shares were earned. The two outstanding sub-performance periods of the 2025 PSUs are trending as follows:
Vested and Outstanding PSUs
| PSUs | Trending Performance | | 2025 PSUs: Sub-performance period January 1, 2025 to December 31, 2026 | Target | | 2025 PSUs: Sub-performance period January 1, 2025 to December 31, 2027 | Above Target |
Vested and Outstanding PSUs
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Executive Employment Agreements
Executive Employment Agreements We have entered into a letter agreement or an employment agreement with each of our named executive officers. Each of our named executive officers also has executed our standard form of proprietary information and inventions agreement. The principal terms of the letter and employment agreements are described below.
Mr. Timm
Mr. Timm In January 2021, we entered into a letter agreement with Mr. Timm, which was amended in February 2022. Mr. Timm’s employment is “at will” and may be terminated at any time, with or without cause (as such term is defined in the letter agreement). However, under the letter agreement, Mr. Timm is eligible for severance payments and benefits upon a termination of his employment with us under certain circumstances, including in connection with a change in control of the Company as described in more detail below under the subsection titled “Potential Payments and Benefits upon Termination or Change in Control.” 41
Ms. Binkley
Ms. Binkley In August 2022, we entered into an executive employment agreement with Ms. Binkley. Ms. Binkley’s employment is “at will” and may be terminated at any time, with or without cause (as such term is defined in the employment agreement). Under the agreement, Ms. Binkley is eligible for severance payments and benefits upon a termination of her employment with us under certain circumstances, including in connection with a change in control of the Company as described in more detail below under the subsection titled “Potential Payments and Benefits upon Termination or Change in Control.”
Mr. Bonakdarpour
Mr. Bonakdarpour In December 2021, we entered into an executive employment agreement with Mr. Bonakdarpour. Mr. Bonakdarpour’s employment is “at will” and may be terminated at any time, with or without cause (as such term is defined in the employment agreement). Under the agreement, Mr. Bonakdarpour is eligible for severance payments and benefits upon a termination of his employment with us under certain circumstances, including in connection with a change in control of the Company as described in more detail below under the subsection titled “Potential Payments and Benefits upon Termination or Change in Control.”
Mr. Allison
Mr. Allison In November 2021, we entered into an executive employment agreement with Mr. Allison. Mr. Allison’s employment is “at will” and may be terminated at any time, with or without cause (as such term is defined in the employment agreement). Under the agreement, Mr. Allison is eligible for severance payments and benefits upon a termination of his employment with us under certain circumstances, including in connection with a change in control of the Company as described in more detail below under the subsection titled “Potential Payments and Benefits upon Termination or Change in Control.”
2025 Summary Compensation Table
2025 Summary Compensation Table The following table sets forth the compensation for the fiscal years ended December 31, 2025, December 31, 2024, and December 31, 2023, as applicable, for our CEO, Chief Financial Officer and our other two named executive officers.
2025 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Alexander Timm Chief Executive Officer | 2025 | 750,000 | – | 5,499,875 | 1,687,500 | 225,973 | 8,163,348 | | | 2024 | 750,000 | – | 6,504,587 | 3,375,000 | 23,533 | 10,653,120 | | | 2023 | 750,000 | 2,600,000 | 2,121,471 | 3,206,250 | 10,085 | 8,687,806 | | Megan Binkley Chief Financial Officer | 2025 | 484,704 | – | 2,624,972 | 562,500 | 10,685 | 3,682,861 | | | 2024 | 449,846 | – | 2,838,942 | 1,032,750 | 10,425 | 4,331,963 | | Mahtiyar Bonakdarpour President & Chief Technology Officer | 2025 | 550,000 | – | 3,699,991 | 825,000 | 10,685 | 5,085,676 | | | 2024 | 541,346 | – | 5,001,939 | 1,650,000 | 5,757 | 7,199,042 | | | 2023 | 500,000 | 1,275,000 | 1,503,127 | 900,000 | 10,085 | 4,188,212 | | Jonathan Allison Chief Administrative Officer | 2025 | 520,000 | – | 2,399,971 | 780,000 | 10,685 | 3,710,656 | | | 2024 | 514,615 | – | 2,703,935 | 1,560,000 | 22,606 | 4,801,156 | | | 2023 | 488,846 | 600,000 | 703,593 | 1,425,000 | 36,085 | 3,253,524 |
2025 Summary Compensation Table
(1)For 2025, the aggregate grant date fair value of equity awards granted in 2025 to our named executive officers was determined in accordance with FASB ASC Topic 718. See Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of the assumptions made in determining the aggregate grant date fair value of our stock awards. The grant date fair value for 2025 PSUs is based on the grant date fair value of the underlying shares of common stock and based on the probable outcome of the performance conditions. The value of the 2025 PSUs if maximum performance were to be achieved is as follows: Mr. Timm, $10,999,749; Ms. Binkley, $5,249,943; Mr. Bonakdarpour, $7,399,983; and Mr. Allison, $4,799,941. See “Compensation Discussion and Analysis—Long-Term Incentives” above for more information about the stock awards. (2)Amounts shown for 2025 represent 2025 annual cash incentive award payouts earned by our named executive officers under our annual cash incentive award program based on achievement of Company performance measures. See “Compensation Discussion and Analysis— 2025 Annual Cash Incentive Performance Award Measures” above for more information about these incentive payouts. (3)Amounts shown for 2025 represent Company matching contributions made to the 401(k) Plan and life insurance premiums paid by the Company on behalf of our named executive officers. For Mr. Timm, amount for 2025 also includes the incremental cost of personal security services as determined by the board of directors to be in the best interest of ensuring his safety and security. For more information, please see the following table:
2025 Summary Compensation Table
| Name | 2025 401(k) Plan Contributions ($) | 2025 Life Insurance Plan Premiums ($) | 2025 Security Benefits ($) | Total ($) | | A. Timm | 10,500 | 185 | 215,288 | 225,973 | | M. Binkley | 10,500 | 185 | — | 10,685 | | M. Bonakdarpour | 10,500 | 185 | — | 10,685 | | J. Allison | 10,500 | 185 | — | 10,685 |
2025 Summary Compensation Table
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2025 Grants of Plan-Based Awards Table
2025 Grants of Plan-Based Awards Table The following table provides information on the following plan-based awards granted to our named executive officers in 2025.
2025 Grants of Plan-Based Awards Table
| Name | Award Type(1) | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (2) | | | Estimated Future Payouts under Equity Incentive Plan Awards(3) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | A. Timm | Annual Incentive | | 562,500 | 1,125,000 | 3,375,000 | | | | | | | | PSUs | 5/21/2025 | | | | 10,920 | 43,681 | 87,362 | | 5,499,875 | | M. Binkley | Annual Incentive | | 187,500 | 375,000 | 1,125,000 | | | | | | | | PSUs | 5/21/2025 | | | | 5,212 | 20,848 | 41,696 | | 2,624,972 | | M. Bonakdarpour | Annual Incentive | | 275,000 | 550,000 | 1,650,000 | | | | | | | | PSUs | 5/21/2025 | | | | 7,347 | 29,386 | 58,772 | | 3,699,991 | | J. Allison | Annual Incentive | | 260,000 | 520,000 | 1,560,000 | | | | | | | | PSUs | 5/21/2025 | | | | 4,765 | 19,061 | 38,122 | | 2,399,971 |
2025 Grants of Plan-Based Awards Table
(1)“Annual Incentive” refers to annual cash incentive award opportunities under our 2025 STI Plan that are earned based on Company performance against certain pre-established measures. See “Compensation Discussion and Analysis—2025 Annual Cash Incentive Performance Award Measures” above. Each PSU represents a contingent right to receive one share of our Class A common stock upon vesting of the award. See “Compensation Discussion and Analysis—Long-Term Incentives” above. (2)These columns represent the potential cash payouts under the annual cash incentive award program for 2025. (3)These columns represent the threshold, target, and maximum number of PSUs that could be earned based on total three-year performance, which performance depends upon the Company’s achievement against the performance measures of Policies in Force and Gross Accident Period Loss Ratio. (4)Reflects the aggregate grant date fair value of the PSU awards, determined in accordance with FASB ASC Topic 718. Grants made in 2025 are described more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement. The material terms of the named executive officers’ employment agreements are described above under “Compensation Discussion and Analysis—Executive Employment Agreements” and below under “Potential Payments and Benefits Upon Termination or Change in Control”. More information concerning the amount of salary in proportion to the total compensation of our named executive officers is provided under the section of this Proxy Statement entitled “Compensation Discussion and Analysis—Key 2025 Compensation Program Elements”. 45
Outstanding Equity Awards at 2025 Fiscal Year-End Table
Outstanding Equity Awards at 2025 Fiscal Year-End Table The following table shows certain information regarding outstanding equity awards held by our named executive officers that remained outstanding as of December 31, 2025.
Outstanding Equity Awards at 2025 Fiscal Year-End Table
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | 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 ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (2) | | A. Timm | 6/19/2018 (3) | | | | | 12,088 | 873,116 | | | | | 8/9/2023 (4) | | | | | | | 146,927 | 10,612,537 | | | 8/9/2023 (5) | | | | | 78,290 | 5,654,887 | | | | | 4/1/2024 (6) | | | | | 7,672 | 554,149 | | | | | 11/13/2024 (7) | | | | | 113,659 | 8,209,590 | | | | | 5/21/2025 (8) | | | | | 8,736 | 631,001 | | | | | 5/21/2025 (9) | | | | | | | 78,626 | 5,679,156 | | M. Binkley | 4/18/2019 | 972 | | 43.20 | 4/17/2029 | | | | | | | 8/29/2020 | 555 | | 145.62 | 8/28/2030 | | | | | | | 8/9/2023 (10) | | | | | | | 11,146 | 805,076 | | | 8/9/2023 (11) | | | | | 36,234 | 2,617,182 | | | | | 11/13/2024 (12) | | | | | 57,868 | 4,179,806 | | | | | 5/21/2025 (8) | | | | | 4,170 | 301,199 | | | | | 5/21/2025 (9) | | | | | | | 37,526 | 2,710,503 | | M. Bonakdarpour | 7/21/2018 | 3,240 | | 12.20 | 7/20/2028 | | | | | | | 4/18/2019 | 12,152 | | 43.20 | 4/17/2029 | | | | | | | 4/1/2022 (13) | | | | | 7,360 | 531,613 | | | | | 8/9/2023 (14) | | | | | | | 100,433 | 7,254,276 | | | 8/9/2023 (15) | | | | | 56,285 | 4,065,466 | | | | | 11/13/2024 (16) | | | | | 101,958 | 7,364,426 | | | | | 5/21/2025 (8) | | | | | 5,877 | 424,496 | | | | | 5/21/2025 (9) | | | | | | | 52,895 | 3,820,606 | | J. Allison | 12/13/2017 | 10,636 | | 5.15 | 12/12/2027 | | | | | | | 7/16/2019 | 1,388 | | 43.20 | 7/15/2029 | | | | | | | 8/9/2023 (17) | | | | | | | 15,031 | 1,085,689 | | | 8/9/2023 (18) | | | | | 36,234 | 2,617,182 | | | | | 11/13/2024 (19) | | | | | 55,116 | 3,981,029 | | | | | 5/21/2025 (8) | | | | | 3,812 | 275,341 | | | | | 5/21/2025 (9) | | | | | | | 34,310 | 2,478,211 |
Outstanding Equity Awards at 2025 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. (2)Market value represents the product of the closing price of a share of the Company’s Class A common stock on December 31, 2025, of $72.23 per share, multiplied by the number of RSUs or PSUs. (3)Reflects the number of shares acquired upon exercise of stock options that remained unvested on December 31, 2025. Stock options granted to our named executive officers under the 2015 Equity Incentive Plan (as described below) permitted early exercise and, if such options are or were exercised, the stock acquired upon the exercise of such options is restricted and subject to a repurchase right in favor of the Company. Such repurchase right lapses, and vesting occurs, with respect to such restricted stock on the same vesting schedule as the original stock option award. Restricted stock acquired by Mr. Timm upon the early exercise of stock options vests in equal monthly installments through June 2026. (4)62,969 PSUs were earned and vested on April 1, 2026 and the remaining 83,958 PSUs are scheduled to vest on April 1, 2027, subject to attainment of a specified stock price threshold. (5)32,997 RSUs vested on April 1, 2026 and the remaining 45,293 RSUs are scheduled to vest on April 1, 2027. (6)These RSUs vested on April 1, 2026. (7)Each of these PSUs granted for the fiscal 2025 performance period, which are deemed to be earned because the performance condition was achieved at the end of 2025, are included in this column because the stock had not yet vested as of the last day of the fiscal year. 28,414 46 PSUs vested on February 19, 2026 and the remaining PSUs are scheduled to vest as to 28,415 units on January 1, 2027, 28,414 units on January 1, 2028, and 28,416 units on January 1, 2029. (8)Represents the portion of the 2025 PSUs, which vested for the fiscal 2025 sub-performance period, which are deemed to be earned because the performance condition was achieved at the end of 2025, and are included in this column because the stock had not yet vested as of the last day of the fiscal year. These PSUs vested and settled on February 19, 2026. (9)Remaining 2025 PSUs are reported at maximum, of which a portion may be earned after the fiscal 2025 through fiscal 2026 sub- performance period and the remainder may be earned after the overall fiscal 2025 through fiscal 2027 performance period with the opportunity to earn 200% of the overall granted target PSUs subject to the achievement against a predetermined Gross Accident Period Loss Ratio and Policies In Force goal matrix. See the “Estimated Future Payouts under Equity Incentive Plan Awards” columns of the “2025 Grants of Plan-Based Awards Table” table on page 44 of this Proxy Statement for the threshold, target, and maximum numbers of PSUs that can be earned. (10)4,777 PSUs were earned and vested on April 1, 2026 and the remaining 6,369 PSUs are scheduled to vest on April 1, 2027, subject to attainment of a specified stock price threshold. (11)18,117 RSUs vested on April 1, 2026 and the remaining 18,117 RSUs are scheduled to vest on April 1, 2027. (12)Each of these PSUs granted for the fiscal 2025 performance period, which are deemed to be earned because the performance condition was achieved at the end of 2025, are included in this column because the stock had not yet vested as of the last day of the fiscal year. 14,466 PSUs vested on February 19, 2026 and the remaining PSUs are scheduled to vest as to 14,467 units on January 1, 2027, 14,467 units on January 1, 2028, and 14,468 units on January 1, 2029. (13)3,680 RSUs vested on January 2, 2026 and 3,680 RSUs vested on April 1, 2026. (14)43,043 PSUs were earned and vested on April 1, 2026 and the remaining 57,390 PSUs are scheduled to vest on April 1, 2027, subject to attainment of a specified stock price threshold. (15)24,399 RSUs vested on April 1, 2026 and the remaining 31,886 RSUs are scheduled to vest on April 1, 2027. (16)Each of these PSUs granted for the fiscal 2025 performance period, which are deemed to be earned because the performance condition was achieved at the end of 2025, are included in this column because the stock had not yet vested as of the last day of the fiscal year. 25,490 PSUs vested on February 19, 2026 and the remaining PSUs are scheduled to vest as to 25,490 units on January 1, 2027, 25,490 units on January 1, 2028, and 25,488 units on January 1, 2029. (17)6,442 PSUs were earned and vested on April 1, 2026 and the remaining 8,589 PSUs are scheduled to vest on April 1, 2027, subject to attainment of a specified stock price threshold. (18)18,117 RSUs vested on April 1, 2026 and the remaining 18,117 RSUs are scheduled to vest on April 1, 2027. (19)Each of these PSUs granted for the Fiscal 2025 performance period, which are deemed to be earned because the performance condition was achieved at the end of fiscal 2025, are included in this column because the stock had not yet vested as of the last day of the fiscal year. 13,779 PSUs vested on February 19, 2026 and the remaining PSUs are scheduled to vest as to 13,780 units on January 1, 2027, 13,780 units on January 1, 2028, and 13,777 units on January 1, 2029. 47
2025 Option Exercises and Stock Vested Table
2025 Option Exercises and Stock Vested Table The following table shows information regarding restricted stock or restricted stock units that vested during 2025.
2025 Option Exercises and Stock Vested Table
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(3) | | A. Timm | 24,174 (1) | 2,630,754 | | | 70,324 (2) | 9,005,049 | | M. Binkley | 21,299 (2) | 2,737,013 | | M. Bonakdarpour | 60,313 (2) | 7,372,327 | | J. Allison | 22,399 (2) | 2,863,427 |
2025 Option Exercises and Stock Vested Table
(1)Reflects the number of shares of restricted stock (acquired upon early exercise of stock options) that vested during the year. Stock options granted to our named executive officers under the 2015 Equity Incentive Plan permitted early exercise and, if such stock options were exercised, the shares of our common stock acquired upon the exercise of such stock options were restricted. Vesting occurs with respect to such restricted stock on the same vesting schedule as the original stock option award. (2)Reflects the gross number of shares received upon the vesting of RSUs. Based on the tax withholding payment elections, the following number of shares were withheld to cover taxes: Mr. Timm, 32,205; Ms. Binkley, 9,651; Mr. Bonakdarpour, 26,798; and Mr. Allison, 10,202. (3)Reflects the fair market value per share of the underlying shares of Class A common stock as of the vesting date, multiplied by the number of shares vested. 48
Potential Payments and Benefits Upon Termination or Change in Control
Potential Payments and Benefits Upon Termination or Change in Control Pursuant to the letter and employment agreements described above that we have entered into with each of our named executive officers, if we had terminated 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 had resigned for “good reason” (as such terms are defined in each applicable named executive officer’s letter agreement or employment agreement), the named executive officer would have been entitled to the following severance payments and benefits: •12 months’ continuation of the NEO’s then-current base salary; •in the case of Ms. Binkley and Messrs. Bonakdarpour and Allison, payment equal to the portion of the annual short-term incentive, if any, to be awarded for the period beginning on January 1 of the year the termination occurs through the date of the termination on a pro rata basis; •up to 12 months of direct payment or reimbursement of COBRA premiums for the NEO and the NEO’s eligible dependents; •accelerated vesting and exercisability of the unvested portion of each of the NEO’s then-outstanding equity awards that otherwise would have vested had the NEO remained employed for 12 months following the date of such termination; and •if such termination occurs upon or within 12 months following a change in control of the Company (as defined in the 2020 Plan) instead of the accelerated vesting described in clause (iv) above, 100% of unvested equity awards would fully vest and become exercisable. In the event of a termination of employment by reason of death or disability, Ms. Binkley and Messrs. Bonakdarpour and Allison are eligible for a payment equal to the portion of the annual short-term incentive, if any, to be awarded for the period beginning on January 1 of the year the termination occurs through the date of the termination on a pro rata basis. In the event of a voluntary resignation, Mr. Timm is eligible to receive, pursuant to his employment agreement, 12 months of his base salary and up to 12 months of direct payment or reimbursement of COBRA premiums for himself and his eligible dependents. Mr. Bonakdarpour is eligible to receive, pursuant to his employment agreement, 12 months of his base salary and payment equal to the portion of the annual short-term incentive, if any, to be awarded for the period beginning on January 1 of the year the termination occurs through the date of the termination on a pro rata basis. Each named executive officer’s receipt of the severance payments and benefits described above would have been subject to their timely execution and non-revocation of a release of claims in favor of the Company. The following table summarizes the payments and benefits that would have been payable to the named executive officers assuming a hypothetical termination occurred as of December 31, 2025. 49
Potential Payments and Benefits Upon Termination or Change in Control
| Name | Benefits and Payments | Voluntary Resignation ($) | Involuntary Termination Without Cause or Good Reason Resignation (No Change in Control) ($) | Involuntary Termination For Cause ($) | Involuntary Termination Without Cause or Good Reason Resignation (Change in Control) ($) | Death/ Disability ($) (1) | | A. Timm | Cash Severance | 750,000 | 750,000 | — | 750,000 | — | | | Short-Term Incentive | — | — | — | — | — | | | Health Benefit Payments | 27,440 | 27,440 | — | 27,440 | — | | | Equity Vesting (2) | — | 11,042,233 | — | 29,059,357 | 29,059,357 | | M. Binkley | Cash Severance | — | 500,000 | — | 500,000 | — | | | Short-Term Incentive (3) | — | 375,000 | — | 375,000 | 375,000 | | | Health Benefit Payments | — | 10,561 | — | 10,561 | — | | | Equity Vesting (2) | — | 2,999,712 | — | 9,107,914 | 9,107,914 | | M. Bonakdarpour | Cash Severance | 550,000 | 550,000 | — | 550,000 | — | | | Short-Term Incentive (3) | 550,000 | 550,000 | — | 550,000 | 550,000 | | | Health Benefit Payments | — | — | — | — | — | | | Equity Vesting (2) | — | 7,668,587 | — | 21,338,331 | 21,338,331 | | J. Allison | Cash Severance | — | 520,000 | — | 520,000 | — | | | Short-Term Incentive (3) | — | 520,000 | — | 520,000 | 520,000 | | | Health Benefit Payments | — | — | — | — | — | | | Equity Vesting (2) | — | 3,044,495 | — | 9,060,676 | 9,060,676 |
Potential Payments and Benefits Upon Termination or Change in Control
(1) Equity values reflect acceleration of unvested grants in the event of death. The compensation committee has the discretion to accelerate vesting in the event of a disability. (2) Reflects the value of equity awards that would vest upon the noted termination of employment based on the closing stock price of our Class A common stock on December 31, 2025, of $72.23 per share. (3)In the case of Short-Term Incentive payments, while the named executive officers had the rights described in the narrative above to receive pro-rated payment of the 2025 Short-Term Incentive under certain scenarios, the Company retained the discretion in each case to determine the amount of such pro-rated payment, including based on actual performance and any other criteria the Company deems relevant. For purposes of this disclosure, each of the Short-Term Incentive payments is disclosed at the named executive officer’s target level for the full year, but actual payment under non-hypothetical situations could be more or less than target, depending on the timing of the scenario and the compensation committee’s use of discretion. 50
CEO Pay Ratio
CEO Pay Ratio Mr. Timm, our CEO, received annual total compensation of $8,163,348 in 2025, as reflected in the “2025 Summary Compensation Table.” We estimate that the median of the 2025 annual total compensation for all employees of the Company as of December 31, 2025 (the “Determination Date”), excluding our CEO, was $68,634, which amount comprises all applicable elements of compensation for 2025 in accordance with Item 402(c)(2)(x) of Regulation S-K (the “Median Annual Compensation”). The ratio of Mr. Timm’s annual 2025 total compensation to the Median Annual Compensation was approximately 119 to 1. We note that due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, 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 above. In addition to our CEO, we employed a total of 1,259 employees, representing all full-time, part-time, seasonal and temporary employees of the Company, as of the Determination Date, of which all were based in the United States. We evaluated 2025 Form W-2 box 1 income for these 1,259 employees to determine the Median Employee. In determining the Median Employee, we did not annualize compensation for employees who worked less than all of 2025. 51
Pay Versus Performance
Pay Versus Performance The following table provides information regarding “Compensation Actually Paid” (“CAP”) 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, the total stockholder return of our peer group (which includes the same issuers included in the peer group depicted in our stock performance graph), Root’s GAAP net income (loss) and Root’s Adjusted EBITDA for the fiscal years ended December 31, 2025, 2024, 2023, 2022, and 2021.
Pay Versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year (1) | Summary Compensation Table Total for PEO ($)(2) | CAP to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average CAP to Non-PEO NEOs ($)(2) | Total Stockholder Return ($) | Peer Group Total Stockholder Return ($)(3) | Net Income (Loss) ($) (in millions) | Adjusted EBITDA ($)(4) (in millions) | | 2025 | 8,163,348 | 14,113,264 | 4,159,731 | 6,852,767 | 25.54 | 86.52 | 40 | 132 | | 2024 | 10,653,120 | 33,628,828 | 5,444,054 | 14,275,890 | 25.67 | 92.13 | 31 | 112 | | 2023 | 8,687,806 | 9,709,825 | 3,720,868 | 4,355,570 | 3.71 | 61.20 | (147) | (43) | | 2022 | 5,126,730 | (3,002,565) | 5,231,713 | 1,612,583 | 1.59 | 50.59 | (298) | (186) | | 2021 | 5,784,695 | (25,185,719) | 9,760,351 | (5,961,079) | 19.73 | 82.94 | (521) | (446) |
Pay Versus Performance
(1)The following table lists the PEO and non-PEO NEOs for each of fiscal years 2025, 2024, 2023, 2022, and 2021.
Pay Versus Performance
| Year | PEO | Non-PEO NEOs | | 2025 | Alexander Timm | Megan Binkley, Mahtiyar Bonakdarpour, and Jonathan Allison | | 2024 | Alexander Timm | Megan Binkley, Mahtiyar Bonakdarpour, and Jonathan Allison | | 2023 | Alexander Timm | Mahtiyar Bonakdarpour and Jonathan Allison | | 2022 | Alexander Timm | Robert Bateman, Mahtiyar Bonakdarpour, Daniel Rosenthal, and Hemal Shah | | 2021 | Alexander Timm | Daniel Rosenthal, Hemal Shah, Anirban Kundu, and Daniel Manges |
Pay Versus Performance
(2) “CAP to the PEO” and “Average CAP to Non-PEO NEOs” includes the amounts set forth in the “2025 Summary Compensation Table” total columns above (or in prior years’ Summary Compensation Tables), 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. The Black-Scholes option pricing model uses a consistent set of valuation inputs (including Root’s stock price, volatility, market risk-free rate, and the options’ strike price and term) which have been updated as of each measurement date, as applicable. RSU and PSU 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.
Pay Versus Performance
| PEO | 2025 ($) | 2024 ($) | 2023 ($) | 2022 ($) | 2021 ($) | | Summary Compensation Table Total | 8,163,348 | 10,653,120 | 8,687,806 | 5,126,730 | 5,784,695 | | -SCT “Stock Awards” Column Value | (5,499,875) | (6,504,587) | (2,121,471) | (2,117,395) | (5,066,228) | | -SCT “Option Awards” Column Value | — | — | — | — | — | | +year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year end | 3,744,306 | 6,471,326 | 2,471,966 | 276,530 | 1,539,689 | | +/-change in fair value (from prior year end to covered year end) of equity awards granted in prior years that are outstanding and unvested as of the covered year end | 2,925,933 | 20,250,158 | 505,897 | (5,137,824) | (24,692,246) | | +vesting date fair value of equity awards granted and vested in the covered year end | — | — | — | — | — | | +/- change in fair value (from prior year end to vesting date) of equity awards granted in prior years that vested in the covered year | 4,779,552 | 2,758,811 | 165,627 | (1,150,606) | (2,751,629) | | -fair value as of prior year end of equity awards granted in prior years 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 | 5,949,916 | 22,975,708 | 1,022,019 | (8,129,295) | (30,970,414) | | Compensation Actually Paid | 14,113,264 | 33,628,828 | 9,709,825 | (3,002,565) | (25,185,719) |
Pay Versus Performance
52
Pay Versus Performance
| Average of Non-PEO NEOs | 2025 ($) | 2024 ($) | 2023 ($) | 2022 ($) | 2021 ($) | | Summary Compensation Table Total | 4,159,731 | 5,444,054 | 3,720,868 | 5,231,713 | 9,760,351 | | -SCT “Stock Awards” Column Value | (2,908,311) | (3,514,939) | (1,103,360) | (2,630,288) | (8,996,668) | | -SCT “Option Awards” Column Value | — | — | — | — | — | | +year-end fair value of equity awards granted in the covered year that are outstanding and unvested as of the covered year end | 1,979,967 | 3,377,227 | 1,283,361 | 389,979 | 938,417 | | +/-change in fair value (from prior year end to covered year end) of equity awards granted in prior years that are outstanding and unvested as of the covered year end | 1,812,879 | 7,626,620 | 247,426 | (389,707) | (1,181,515) | | +vesting date fair value of equity awards granted and vested in the covered year end | — | — | — | — | — | | +/- change in fair value (from prior year end to vesting date) of equity awards granted in prior years that vested in the covered year | 1,808,501 | 1,342,928 | 207,275 | (211,992) | (419,568) | | -fair value as of prior year end of equity awards granted in prior years that failed to vest in the covered year | — | — | — | (777,122) | (6,062,096) | | +dividends or earnings paid on equity awards in the covered year | — | — | — | — | — | | Total Amount Added or Deducted from Summary Compensation Table Total | 2,693,036 | 8,831,836 | 634,702 | (3,619,130) | (15,721,430) | | Compensation Actually Paid | 6,852,767 | 14,275,890 | 4,355,570 | 1,612,583 | (5,961,079) |
Pay Versus Performance
(3) Our peer group for the purposes of this disclosure includes Trupanion Inc., Kinsale Capital Group Inc., Lemonade Inc., Goosehead Insurance Inc., Palomar Holdings Inc. and Kemper Corp, which are the issuers included in the peer group depicted in our performance graph. Total Stockholder Return for the Company and the peer group was calculated as the yearly percentage change in cumulative Total Stockholder Return based on a deemed fixed investment of $100 at market close on December 31, 2020 and in accordance with Items 201(e) and 402(v) of Regulation S-K. Because fiscal years are presented in the table in reverse chronological order (from top to bottom), the table should be read from bottom to top for purposes of understanding cumulative returns over time. (4) “Adjusted EBITDA” as defined in the “Compensation Discussion and Analysis—2025 Annual Cash Incentive Performance Award Measures” section above. The following list (the “Tabular List”) provides the performance measures that we believe represent the most important measures we used to link compensation actually paid to our named executive officers for fiscal year 2025 to our performance:
Pay Versus Performance
| Tabular List | | | Adjusted EBITDA | We use Adjusted EBITDA as an internal performance measure in the management of our operations because we believe it provides management and other users of our financial information useful insight into our results of operations and underlying business performance. | | Gross Accident Period Loss Ratio | We view gross accident period loss ratio as the best measure of the impact of pricing and underwriting actions. | | Policies In Force Growth | We view policies in force as an important metric to assess our financial performance because policy growth drives our revenue growth, expands brand awareness, deepens our market penetration, and generates additional data to continue to improve the functioning of our platform. |
Pay Versus Performance
Total Stockholder Return (“TSR”) is intended to reflect the change in value of a $100 investment made on December 31, 2020. Both cumulative TSR and the noted compensation reflect the full period between December 31, 2020 and December 31, 2025. The chart below demonstrates the relationship between Root’s TSR and Compensation Actually Paid to Mr. Timm and our Non-PEO NEOs. 53 The Compensation Actually Paid to Mr. Timm and our other Non-PEO NEOs is generally correlated with our net income or loss over the period January 1, 2021 through December 31, 2025 as demonstrated in the chart below. 54 The Compensation Actually Paid to Mr. Timm and our other Non-PEO NEOs is generally correlated with our Adjusted EBITDA over the period January 1, 2021 through December 31, 2025 as demonstrated in the chart below.