prch-20240424

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. )


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Check the appropriate box:
o			Preliminary Proxy Statement
o			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x			Definitive Proxy Statement
o			Definitive Additional Materials
o			Soliciting Material under § 240.14a-12

Porch Group, Inc.


(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check the appropriate box):
x			No fee required.
o			Fee paid previously with preliminary materials.
o			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.

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Table of Contents


STOCKHOLDER LETTER			1
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS			3
GENERAL INFORMATION			5
GLOSSARY OF TERMS			6
PROXY STATEMENT SUMMARY			8
OUR COMPENSATION AND GOVERNANCE HIGHLIGHTS			11
PROPOSAL 1: ELECTION OF THE DIRECTORS NAMED IN THIS PROXY STATEMENT			12
General			12
Vote Required			12
Recommendation of The Board			12
OUR BOARD NOMINEES			13
Board Nominees			13
Director Nominee Skills and Experience			17
Board Diversity			18
Board Diversity Matrix			18
CORPORATE GOVERNANCE, STRUCTURE AND RESPONSIBILITY			19
Declassified Board (fully declassified effective at the Annual Meeting)			19
Director Independence			19
Board Leadership Structure – Lead Independent Director			19
Role of the Board in Risk Oversight			20
Cybersecurity Risk Management			23
Evaluations of the Board			23
Meetings of the Board			23
Board Committees			23
Corporate Governance Guidelines			27
No Director Over-boarding			27
Plurality Plus Voting for Directors; Director Resignation Policy			27
Code of Business Conduct and Ethics			28
Stock Ownership by Directors			28
Insider Trading and Rule 10b5-1 Trading Plan Policies			28
Prohibition on Hedging and Pledging of Company Securities			28
Stockholder Engagement			29
Stockholder Communications			29
Environment, Social and Governance			29
Policy for the Recovery of Erroneously Awarded Compensation (Dodd-Frank Compliant Policy)			30
DIRECTOR COMPENSATION			32
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024			34
General			34
Vote Required			34
Recommendation of The Board and Audit Committee			34
AUDIT FEES AND AUDIT COMMITTEE REPORT			35
EXECUTIVE OFFICERS			37
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			38
PROPOSAL 3: APPROVAL OF, ON AN ADVISORY (NON-BINDING) BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS			41
General			41
Vote Required			41
Recommendation of The Board			41
COMPENSATION DISCUSSION AND ANALYSIS			42
Our NEOs			42
2023 NEO Compensation Philosophy			42
2023 NEO Compensation Program			42
2023 NEO Incentive Programs			42

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2023 Target Compensation			43
2024 NEO Incentive Compensation Programs Preview			44
2023 NEO Compensation Components			44
2023 NEO Compensation Determinations			45
Base Salary			45
2023 Short-Term Incentive – 2023 Bonus Plan			45
2023 LTI Equity Program			46
Outstanding New Hire Award (RSUs) – Mr. Tabak			48
Outstanding PRSUs During 2023			48
Employment Agreements and Arrangements			49
Other Compensation Practices and Policies			49
How Compensation is Determined			50
Stockholder Engagement and Annual Advisory Vote on NEO Compensation			50
Competitive Positioning			51
Compensation Policies and Practices Risk Assessment			51
Other Equity-Related Policies			51
Timing of Equity-Based Grants			51
Tax Matters			52
No Excise Tax Gross-Ups			52
Report of the Compensation Committee			52
NEO COMPENSATION TABLES			53
2023 Summary Compensation Table			53
2023 Grants of Plan-Based Awards			54
Outstanding Equity Awards at 2023 Fiscal Year-End			55
2023 Options Exercised and Stock Vested			56
Pension Benefits			56
Nonqualified Deferred Compensation			57
Employment Agreements			57
2020 Stock Plan			58
2012 Equity Incentive Plan			59
Potential Payments Upon Termination or Change of Contro			59
CEO PAY RATIO			60
PAY VERSUS PERFORMANCE			61
Pay versus Performance Description of Relationships			63
EQUITY COMPENSATION PLAN INFORMATION			66
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			67
WHERE YOU CAN FIND MORE INFORMATION			69
FORM 10-K			70
QUESTIONS AND ANSWERS			71
OTHER MATTERS			76
Appendix A: Use of Non-GAAP Financial Measures			77
Appendix B: Use of Key Performance Measures			79
Appendix C: Additional Information			81
Proxy Card			82

Forward-Looking Statements

Certain statements in this proxy statement, including the letter to stockholders, may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Although the Company believes that its plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including, but not limited to, risks and uncertainties discussed in Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as those discussed in subsequent reports filed with the Securities and Exchange Commission, all of which are available on the SEC’s website at www.sec.gov. Generally, statements that are not historical facts, including statements concerning the Company’s possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends,” or similar expressions. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management at the time they are made, are inherently uncertain. Nothing in the stockholder letter or proxy statement should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Unless specifically indicated otherwise, the forward-looking statements in do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed. The Company does not undertake any duty to update these forward-looking statements, whether as a result of changed circumstances, new information, future events, or otherwise, except as may be required by law.

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STOCKHOLDER LETTER




Dear Porch Group Stockholders,
	I am thrilled to take this opportunity to express my pride in the accomplishments and dedication of the Porch team over the past year. Our team demonstrated resilience, focus, and delivered strong performance, despite facing numerous market headwinds. We have made good strides in both our insurance and SaaS businesses and are well positioned to win in homeowners insurance through our differentiators.
		Matt Ehrlichman
	Chairman, Founder and Chief Executive Officer

Who We Are

At Porch, we are committed to being the partner for the home, offering a range of products and services designed to protect consumers' most valuable asset and make the move and ongoing maintenance easy. Central to this commitment is our focus on homeowners insurance.

Our strategy for capturing the large and expanding homeowners insurance market revolves around three key differentiators: 1) providing the best services for homebuyers, 2) advantaged underwriting utilizing our unique property data, and 3) protecting the whole home.

Our vertical software products play a crucial role in supporting our insurance strategy by providing us with unique early access to homebuyers and insights about properties. This data enables us to better predict and price risk for homeowners insurance.

2023 Highlights1

Throughout 2023, we executed against various initiatives with a focus on insurance profitability. This included increasing premium per policy, non-renewing higher-risk policies, and improving underwriting, including the use of property insights unique to Porch. Additionally, we had success in our warranty and software businesses, launched new partnerships, and executed cost reductions across our businesses.

We ended the year on a high note. Our financial results for the fourth quarter of 2023 were strong and exceeded expectations: Revenue grew by 79% to $115 million. Revenue less Cost of Revenue increased by 82% to $80 million, and GAAP net loss improved $33 million to $(3) million. Most notably, our Adjusted EBITDA1 profit for the fourth quarter was $12 million, a substantial increase of $25 million compared to the same period in 2022. In every aspect, it was a remarkable quarter for us that sets up an exciting 2024 and future ahead.


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For the full year 2023, we achieved Revenue of $430 million, a 56% increase over prior year and Revenue less Cost of Revenue of $210 million, a 25% increase over prior year. GAAP net loss was $(134) million in 2023, a $23 million improvement from prior year. Adjusted EBITDA1 (Loss) was $(45) million, a $5 million improvement over prior year. Most importantly, we surpassed our second-half 2023 profitability goal, achieving Adjusted EBITDA1 of $21 million. Notably, Adjusted EBITDA1 in the second half of 2023 was $45 million better than the second half of 2022. We are proud of the amount of progress we were able to make in just 12 months despite a challenging market environment, including the sharp increase in interest rates over the last couple of years, higher cost of reinsurance and claims, contraction in the real estate market, and historically challenging weather events.

Importantly, we finished a variety of system implementations during 2023 through which we addressed and remediated material weaknesses from 2022, a significant achievement driven by the expertise and leadership of our team. We also released our initial ESG report and we look forward to sharing more in the future.

2024 Outlook

Looking ahead, we are excited about 2024. Our full-year guidance reflects our commitment to sustainable growth and continued profitability improvements. We expect to achieve positive Adjusted EBITDA for the 2024 full year, underpinned by our continued focus on executing our insurance profitability actions, increasing prices in our software businesses, and prudent cost management.

As we reflect on our journey since becoming a public company in December 2020, it's clear that we made significant progress. We’ve delivered strong revenue growth at a 60% 4-year CAGR, from $72 million in 2020 to the $470 million mid-point of our 2024 guidance1. This is driven by our Insurance segment, which reflects the strength of our business model and the dedication of our team. Our 2024 mid-point of Adjusted EBITDA guidance is $5.5 million, a $50 million improvement compared to 2023. We are just getting started.

Closing

I want to express my sincere appreciation to our shareholders for your continued support and confidence in Porch. We believe that we are well-positioned for success, and are excited about the opportunities that lie ahead.

I would like to invite you to participate in our 2024 annual stockholder meeting to be held virtually on Wednesday, June 12, 2024, at 10 a.m. Pacific Time. You will be asked to vote on several items and I encourage you to read the proxy statement prior to the meeting, which includes details on how to attend and cast your votes. This year, among other items, you will be asked to vote on the election of the entire director nominees. This change in practice reflects our continuing commitment to employ best in class governance practices and accountability to our stockholders.

If you have any questions or would like to get in touch regarding anything mentioned in this letter, you may reach us at ir@porch.com.

Onward!

Matt Ehrlichman

Porch Group Chairman, Founder and Chief Executive Officer

April 24, 2024

1. See "Appendix A" of this proxy statement, entitled “Use of Non-GAAP Financial Measures,” for the reconciliation of Adjusted EBITDA (Loss) to net income (loss), which is the most directly comparable measure under GAAP, and Adjusted EBITDA (Loss) as a percentage of Revenue. Porch is not providing reconciliations of forward-looking non-GAAP guidance to the comparable GAAP measures because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of Porch’s control. In particular, the charges excluded from these non-GAAP measures are subject to high variability and complexity due to Porch’s ongoing growth.


2			2024 Proxy Statement

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NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS

To Be Held on June 12, 2024

Notice is hereby given that the 2024 annual meeting of stockholders (the “Annual Meeting”) of Porch Group, Inc., a Delaware corporation (the “Company”), will be held on June 12, 2024, at 10:00 a.m. Pacific Time as a virtual meeting held entirely over the Internet, to consider the following matters, as more fully described in the enclosed proxy statement:

■election of the eight directors named in the enclosed proxy statement, each to serve until the 2025 annual meeting of stockholders and until their successors are duly elected and qualified, subject to their earlier resignation, removal, or other termination of service;

■to ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;

■the approval of, on an advisory (non-binding) basis, the compensation of our named executive officers; and

■to consider and transact other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

Stockholders of record at the close of business on April 15, 2024, are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.

To attend the Annual Meeting, vote and submit your questions during the Annual Meeting, go to www.virtualshareholdermeeting.com/PRCH2024. A list of stockholders of record will also be available during the Annual Meeting on the meeting website. Prior to the Annual Meeting, you will be able to vote at www.proxyvote.com and by the other methods described in the enclosed proxy statement.

To be admitted to the Annual Meeting, please visit www.virtualshareholdermeeting.com/PRCH2024. You will log into the Annual Meeting by entering your unique 16-digit control number found on your proxy card or voting instructions form.


YOUR VOTE IS IMPORTANT You may cast your vote in advance of the Annual Meeting over the Internet, by telephone or by completing and mailing a proxy card. Voting in advance of the Annual Meeting does not deprive you of your right to attend the Annual Meeting and to vote your shares electronically during the Annual Meeting. Proxies forwarded by or for banks, brokers or other nominees should be returned as requested by them. We encourage you to vote promptly to ensure your vote is represented at the Annual Meeting, regardless of whether you plan to attend the Annual Meeting.


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You can find detailed information regarding voting in the section entitled “General Information” on the page immediately following the "Notice of 2024 Annual Meeting of Stockholders" of the accompanying proxy statement.

By order of the Board of Directors,

Matthew Cullen

General Counsel and Secretary

Seattle, Washington

April 24, 2024



IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 12, 2024 The notice of the Annual Meeting, proxy statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, are first being sent and made available to stockholders on or about April 24, 2024 at www.proxyvote.com. The date of this proxy statement is April 24, 2024.


4			2024 Proxy Statement

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GENERAL INFORMATION

This proxy statement is furnished to stockholders of Porch Group, Inc., a Delaware corporation (the “Company”), in connection with the solicitation of proxies by the board of directors of the Company (the “Board”) for use at our 2024 Annual Meeting of Stockholders to be held on June 12, 2024 (the “Annual Meeting”), and at any adjournment or postponement thereof. The Annual Meeting will be held at 10:00 a.m. Pacific Time as a virtual meeting held entirely over the Internet.

As permitted by the rules of the Securities and Exchange Commission (the “SEC”), we are making this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“Form 10-K”) available to our stockholders electronically via the Internet at www.proxyvote.com. We believe that internet delivery of our proxy materials allows us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual Meeting. On or about April 24, 2024, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (“Internet Notice”), containing instructions on how to access this proxy statement, Form 10-K, and vote over the Internet or by telephone. If you received an Internet Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you specifically request them pursuant to the instructions provided in the Internet Notice. The Internet Notice instructs you on how to access and review all of the important information contained in this proxy statement.

The Annual Meeting will be held entirely over the Internet via live video webcast to allow for greater participation by all of our stockholders, regardless of their geographic location. To attend the Annual Meeting, vote and submit your questions during the Annual Meeting, go to www.virtualshareholdermeeting.com/PRCH2024. Prior to the Annual Meeting, you will be able to vote at www.proxyvote.com and by the other methods described in this proxy statement. Our virtual format leverages the latest technology to provide expanded access, improved communication and cost savings for our stockholders, while providing our stockholders with the same rights and opportunities as they would have at an in-person meeting.


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GLOSSARY OF TERMS


Term			Definition
2012 Stock Plan			Porch.com, Inc. 2012 Equity Incentive Plan
2020 Stock Plan			Porch Group, Inc. 2020 Stock Incentive Plan
2023 Bonus Plan			Senior Level Performance Bonus Plan
2023 LTI Equity Program			Long-term incentive compensation awarded to NEOs in 2023 comprised of RSUs and PRSUs, with PRSUs representing 75% of the award and RSUs representing 25% of the award
Absolute Share Price			Absolute share price based upon the closing price of a share of common stock of the Company being equal to or greater than certain specified prices (calculated based upon compound annual growth rates of the VWAP Common Stock Price) over a defined period.
Achievement Period			Each year of the performance period for PRSU awards subject to two performance goals
Annual Meeting			2024 Annual Meeting of Stockholders of Porch Group, Inc.
Board			Board of Directors of Porch Group, Inc.
Business Combination			Business combination of Porch.com with PropTech Acquisition Corporation
Bylaws			Amended and Restated Bylaws of Porch Group, Inc.
CAGR			Compound Annual Growth Rate
CAP			Compensation actually paid
CEO Employment Agreement			Employment agreement with Mr. Ehrlichman
Certificate of Incorporation			The Third Amended and Restated Certificate of Incorporation dated June 9, 2022
CFO Employment Agreement			Employment agreement with Mr. Tabak
Change in Control Termination			Upon a termination of the Executive’s employment by the Company without Cause (and other than by reason of death or Disability), or the Executive’s resignation for Good Reason, in each case within 12 months following a Change in Control
CIRP			Cybersecurity Incident Response Plan
COO Employment Agreement			Employment agreement with Mr. Neagle
Code			The Porch Group, Inc. Code of Business Conduct and Ethics adopted by the Board effective December 23, 2020, amended April 9, 2024
Committees			Standing Committees (i.e., Audit, Compensation, Nominating and Corporate Governance, and Mergers and Acquisitions Committees) of the Board of Directors of Porch Group, Inc.
Company			Porch Group, Inc.
EBITDA			Earnings before interest, taxes, depreciation, and amortization
ESG			Environmental, Social and Governance
Exchange Act			Securities Exchange Act of 1934, as amended
Executive			Each of Messrs. Ehrlichman, Neagle, and Tabak, for purposes of the "Employment Agreements" section of this proxy statement
EY			Ernst & Young LLP, the Company's former independent registered public accounting firm
FASB ASC Topic 718			Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation
Form 10-K			Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC
GAAP			Generally accepted accounting principles in the United States
Grant Thornton			Grant Thornton, LLP the Company's independent registered public accounting firm
HOA			Homeowners of America Insurance Company


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Internet Notice			Notice of Internet Availability of Proxy Materials
IRS Code			Internal Revenue Code of 1986, as amended
Legacy Porch			Porch.com, Inc.
LTI			Long-term incentive
Nasdaq			The Nasdaq Stock Market
NEO			Named Executive Officer
Non-Change in Control Termination			Termination of the Executive's employment by the Company without Cause (and other than by reason of death or Disability), or his resignation for Good Reason
PCAOB			Public Company Accounting Oversight Board
PEO			Principal Executive Officer
PRSU			Performance-based Restricted Stock Unit
RSU			Restricted Stock Unit
SaaS			Software-as-a-service
SOX			Sarbanes-Oxley Act of 2002
Say on Pay			The opportunity for stockholders to vote (annually) on the Company’s NEO compensation program
SEC			U.S. Securities and Exchange Commission
Severance Period			Period of 12 months

SEC Form DEF 14A filed by Porch Group Inc.