Pet insurer Trupanion, Inc. announced today that founder and longtime CEO Darryl Rawlings would step down in August 2024 ahead of reporting its first quarter earnings.

Margaret “Margi” Tooth, who currently serves as President and began working for the company in 2013 as a mid-level marketing staffer, will take the baton from Rawlings as Chief Executive Officer in August 2024, the announcement said.

Ms. Tooth has been running day-to-day operations at Trupanion, Inc. since 2023, Trupanion’s worst year on record financially. Trupanion also announced late last year that the company was mired in an SEC audit.

The company’s stock fell by nearly 12% in after-hours trading following the announcement of Ms. Tooth’s promotion (as of 7pm EDT), the time of this reporting.

CEO and founder Darryl Rawlings did not return an email or text message seeking comment about this characterization of Ms. Tooth.

Ms. Tooth did not respond to a text message seeking comment.

Three former executives TCR spoke with for this story cited the dismissal of Tricia Plouf, Executive Vice President of Pricing (demoted from Co-President, a role she previously shared with Ms. Tooth before Ms. Tooth was promoted to President) and General Counsel Gavin Friedman as examples of the culture of fear now endemic at Trupanion.

Culture of Fear

Any person who challenges Ms. Tooth is dismissed and let go, the executives told TCR.

“Darryl was willing to have people around him who would challenge him,” one executive said in an interview this week.

“If Margi can listen [to employees], I think they’ve got hope. I just don’t know if she can do that. I think everyone’s afraid to speak up. If they can change that piece of the culture, then there’s hope.”

Tailspin

On today’s earnings call, Stifel analyst Jon Block asked Ms. Tooth to respond to shareholders’ concerns about her fitness to lead the company:

“I’ll apologize in advance,” Mr. Block said on the live earnings call this evening, “but I do think it’s important, Margi: Since taking over as sole president, the stock’s down over 70 percent, the market’s up 12. And to be fair, inflation’s taken off during that time. I get it. It’s been a big headwind…. But this has really been a painful time for shareholders. You are losing shares, as I just mentioned; the MLR is stubbornly high. New products under that 60-month plan have just taken much longer to launch…”

He then asked Ms. Tooth to summarize her top two or three priorities. Ms. Tooth answered over several minutes in a lengthy answer about growth and profit margins, concluding: “I think the ultimate priority for us, moving forward, is making sure that margin is where we need it to be and expect it to be as we continue through the rest of the year. Hopefully, that answers your question.”

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