Ten months after digital insurance company Hippo (NYSE: HIPO) was floated on the New York Stock Exchange, the company’s board of directors has decided to replace its CEO. Assaf Wand, a co-founder of the company and its CEO since 2015, is stepping down from the position, and will serve as executive chairperson. His replacement is Richard (Rick) McCathron, who has been president of the company since 2017.
According to the company’s announcement, the decision on the change was made at the end of last week, and came into force at the beginning of this week. The fact that the switch was made with almost immediate effect could be an indication that it arose from dissatisfaction or from some constraint that led the board to make changes in the company’s management.
Hippo, which focuses on home insurance in the US, was merged into a SPAC in August 2021 at a valuation of $5 billion. Its current market cap is just $773 million, and this after a 10% rise in its share price from the low it reached last month. Wand holds 6.5% of Hippo, a stake currently worth $50.3 million.
Wand (47) founded Hippo together with Eyal Navon after founding and managing another company and before that working at consultants McKinsey. McCathron (51) joined Hippo in 2017, and since then has been a director of the company and its president. In his previous roles he was a senior executive in the US insurance industry. As president, McCathron was responsible for day-to-day running of the company.
"Rick has been my partner every step of the way, from the creation of Hippo’s strategic vision, to growing our strong stable of partnerships, to driving the company forward every day," said Wand. "In this next phase of Hippo’s growth, it’s a natural progression for Rick to step into the CEO role so I can focus on longer term strategic initiatives. Rick’s extensive insurance expertise, combined with his proven ability to drive growth, set him up perfectly to lead Hippo into the future."
"I want to thank the Board for their confidence in my leadership and Assaf for his ongoing support," McCathron said. "I am honored and energized to work with our talented teams and partners to make Hippo’s proactive approach to home protection a transformational force in the insurance industry."
The changes at the top at Hippo have also led to changes in compensation. Wand’s annual basic salary, which was $600,000, will be reduced to $250,000, while McCathron’s salary will remain at its current level - the company has not specified the amount. In 2021, the cost of Wand’s compensation totaled $1.6 million, and that of McCathron’s compensation totaled $2.9 million, mostly consisting of stock-based compensation.
Another company that has recently announced management changes is fintech company Payoneer Global (Nasdaq: PAYO). About a year after its merger with a SPAC, the company announced two weeks ago that John Caplan had been appointed co-CEO and director alongside Scott Galit. Payoneer merged with a SPAC in June 2021 at a valuation of $3.3 billion. Its current market cap is $1.8 billion.
Published by Globes, Israel business news - en.globes.co.il - on June 7, 2022.
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