Equity Compensation
We maintain an equity incentive plan, the 2021 Incentive Award Plan, referred to below as the 2021 Plan, in order to facilitate
the grant of cash and equity incentives to directors, employees (including our NEOs), and consultants of our company and certain of its affiliates and to enable our Company and certain of its affiliates to obtain and retain services of these
individuals, which is essential to our long-term success. The 2021 Plan provides our employees (including our NEOs), consultants, non-employee directors, and other service providers and those of our affiliates
the opportunity to participate in the equity appreciation of our business through the receipt of equity-based incentive awards such as options to purchase shares of our common stock, RSUs and performance restricted stock units (PRSUs).
We believe that such stock options, RSUs and PRSUs encourage a sense of proprietorship and stimulate interest in our development and financial success.
Prior to implementing the 2021 Plan, Hippo granted stock options to its employees, including NEOs, in order to attract and
retain them, as well as to align their interest with the interests of Hippos stockholders. In order to provide a long-term incentive, these stock options generally vest over four years subject to continued service.
We did not grant any equity awards to Mr. Wand in 2022.
In April 2022, we granted each of Messrs. McCathron, Ellis and Harpaz an option to purchase 107,364 shares of the
Companys common stock, and Mr. Pinkovezky an option to purchase 62,629 shares of the Companys common stock, for an exercise price of $47.50 per share, which was the fair market value of the Companys common stock on the date of
grant, as determined by the Board. Each option vests and becomes exercisable in respect of 1/16th of the total number of shares underlying the option for each of the first four quarters following February 15, 2022, and thereafter vests and becomes
exercisable in respect of 3/16ths of the total underlying shares for the following four quarters, so that 100% of the shares subject to such option will be vested on February 15, 2024, subject to the applicable NEOs continued service with the
Company through the applicable vesting date. Also in April 2022, we granted each of Messrs. McCathron, Ellis and Harpaz 26,620 RSUs, and Mr. Pinkovezky 15,528 RSUs. Each award of RSUs vests as to 1/16th of the total number of RSUs for each of
the first four quarters following February 15, 2022, and thereafter vests as to 3/16ths of the total RSUs for the following four quarters, so that 100% of the RSUs vest on February 15, 2024, subject to the applicable NEOs continued
service with the Company through the applicable vesting date.
In June 2022, in connection with his promotion to Chief
Executive Officer of the Company, we granted Mr. McCathron (1) an option to purchase 74,452 shares of the Companys common stock for an exercise price of $34.00 per share, which was the fair market value of the Companys common
stock on the date of grant, as determined by the Board; and (2) 18,459 RSUs. The option vests and becomes exercisable as to 1/16th of the total number of shares underlying the option on each quarterly anniversary of May 15, 2022 over four
years, and 1/16th of the RSUs vest on each quarterly anniversary of May 15, 2022 over four years. Also in June 2022, we granted each of Messrs. McCathron, Ellis, Harpaz and Pinkovezky 46,000 PRSUs. Commencing on May 15, 2022, the PRSUs
vest over four years contingent on the satisfaction of both a one-year service-based requirement and performance-based requirements divided into three separate tranches of performance goals based on the
Companys stock price, revenue, and adjusted gross profit.
Other Elements of Compensation
Retirement Plans
We maintain a 401(k) retirement savings plan for our employees, including our NEOs, who satisfy certain eligibility
requirements. Our NEOs are eligible to participate in the 401(k) plan on the same terms as other full-time employees. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k)
plan adds to the overall desirability of its executive compensation package and further incentivizes our employees, including our NEOs, in accordance with our compensation policies.
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