DEF 14A of Rollins Inc, Mar 14, 2024

DEF 14A of Rollins Inc

Filed Mar 14, 2024 · FY20230000084839-24-000058

Open on EDGAR

  1. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  2. Overview of the Non-Employee Director Compensation Program

    Overview of the Non-Employee Director Compensation Program Members of the Board who are not employees (“Non-Employee Directors”) receive compensation for their service. The compensation program for our Non-Employee Directors is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our shareholders. All Non-Employee Directors are also entitled to reimbursement of expenses for all services as a director, including reasonable travel expenses incurred in connection with required in-person attendance at board and committee meetings, committee participation or special assignments. The Human Capital Management and Compensation Committee annually reviews each element of our Non-Employee Director compensation program and the total amount paid thereunder and makes recommendations to the Board. In addition, at the Human Capital Management and Compensation Committee’s direction, Mercer US LLC (“Mercer”), the Committee’s independent executive compensation advisory firm, provides a competitive analysis of director compensation levels, practices, and design features as compared to the general market as well as our compensation peer group.

  3. 2023 Annual Non-Employee Director Compensation Program

    2023 Annual Non-Employee Director Compensation Program Under the Director Compensation Program in effect in 2023, our Non-Employee Directors received an annual cash retainer in the amount of $100,000 and an annual equity award consisting of restricted stock with a fair value of $100,000, which stock is vested when issued but must be held for a period of one (1) year from the date of such grant and until such director is in compliance with their ownership requirement under the Non-Employee Director Stock Ownership Guidelines. Committee Chairs also received additional annual cash retainers. All cash retainers are payable in equal quarterly installments in arrears, and the equity awards are paid following the Annual Meeting. For each Non-Employee Director who is elected or appointed for the first time, the first quarterly installment of the annual cash retainers will be paid for the first quarter that ends on or after the date of his or her initial election or appointment, prorated based on service during the quarter. The following table sets forth the 2023 Non-Employee Director Compensation Program:

  4. 2023 Annual Non-Employee Director Compensation Program

    | Board/Committee | Annual Chair Cash Retainer ($) | Annual Equity Award ($) | Annual Non-Chair Cash Retainer ($) | | Board of Directors | — | 100,000 | 100,000 | | Audit Committee(1) | 20,000 | — | — | | Human Capital Management and Compensation Committee | 10,000 | — | — | | Nominating and Corporate Governance Committee | 6,000 | — | — |

  5. 2023 Annual Non-Employee Director Compensation Program

    (1)The Chairperson of the Audit Committee also receives an additional $2,500 for preparing to conduct each quarterly Audit Committee meeting.

  6. 2023 Director Compensation Table

    2023 Director Compensation Table The following table sets forth the compensation paid to our Non-Employee Directors for services rendered as a director for the year ended December 31, 2023. Three of our directors, Messrs. Gary W. Rollins, John F. Wilson and Jerry E. Gahlhoff, Jr. are employees of the Company, and their employee compensation information is set forth in the “Summary Compensation Table” on page 43 under the “Executive Compensation” section of this Proxy Statement. Directors that are our employees do not receive any additional compensation for services rendered as a director. There are no currently anticipated changes to the non-employee director compensation for 2024.

  7. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Annual Restricted Stock Award(1) ($) | All Other Compensation(2) ($) | Total ($) | | Susan R. Bell | 130,000 | 100,000 | — | 230,000 | | Donald P. Carson | 100,000 | 100,000 | — | 200,000 | | Patrick J. Gunning | 100,000 | 100,000 | — | 200,000 | | P. Russell Hardin | 100,000 | 100,000 | — | 200,000 | | Gregory B. Morrison | 100,000 | 100,000 | — | 200,000 | | Jerry W. Nix | 116,000 | 100,000 | — | 216,000 | | Pamela R. Rollins(2) | 100,000 | 100,000 | 27,591 | 227,591 | | Louise S. Sams | 100,000 | 100,000 | — | 200,000 |

  8. 2023 Director Compensation Table

    (1)Amounts in this column represent the grant date fair value of the equity awards granted to the non-employee directors, calculated in accordance with FASB ASC Topic 718. The amounts reported in this column represent the fair value of the total number of shares issued to each director rounded up to the nearest whole dollar. These equity grants must be held for a period of one (1) year from the date of the grant. (2)Amounts shown for Ms. Rollins in the “All Other Compensation” column reflect the incremental costs to the Company for Ms. Rollins’ personal use of the Company’s aircraft, as well as the tax gross-up of such usage. For further information, please see "Certain Relationships and Related Party Transactions" on page 63.

  9. INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS

    INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS The following table sets forth the names, ages as of March 1, 2024, and certain other information for each of the nominees for election as a director at the Annual Meeting and for each of the continuing members of our Board following the Annual Meeting. Full biographical information follows the table.

  10. INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS

    | Name | Class | Age | Independent | Director Since | Current Term Expires | | DIRECTOR NOMINEES: | | | | | | | Gary W. Rollins | II | 79 | No | 1981 | 2024 | | Pamela R. Rollins | II | 67 | No | 2015 | 2024 | | P. Russell Hardin | II | 66 | Yes | 2023 | 2024 | | Dale E. Jones | II | 64 | Yes | - | - | | CONTINUING DIRECTORS: | | | | | | | Jerry E. Gahlhoff, Jr. | I | 51 | No | 2021 | 2026 | | Patrick J. Gunning | I | 64 | Yes | 2021 | 2026 | | Gregory B. Morrison | I | 64 | Yes | 2021 | 2026 | | Susan R. Bell | III | 61 | Yes | 2021 | 2025 | | Donald P. Carson | III | 74 | Yes | 2021 | 2025 | | Louise S. Sams | III | 66 | Yes | 2022 | 2025 | | John F. Wilson | III | 66 | No | 2013 | 2025 |

  11. Key Attributes, Experience and Skills of Director Nominees and Continuing Directors

    Key Attributes, Experience and Skills of Director Nominees and Continuing Directors

  12. Director Nominees

    Director Nominees

  13. Director Nominees

    | | Gary W. Rollins Executive Chairman of the Board | | Gary W. Rollins has served as a Director of Rollins, Inc. since 1981, and as Chairman of the Board since 2020. He previously served as the Vice Chairman of the Company. Mr. Rollins is the former Chief Executive Officer of the Company, a role he held from 2001 to 2022. Mr. Rollins has extensive knowledge of the Company’s business and industry having started out as a technician with the Company and serving in various roles of increasing responsibility for over 56 years, all the way up to CEO. Under Mr. Rollins’ leadership as CEO over the past 20 years, the Company has experienced dramatic expansion that has significantly increased its value and global footprint. In 2020, Mr. Rollins was named one of Atlanta’s Most Admired CEOs by the Atlanta Business Chronicle. In 2021, he received the Crown Leadership Lifetime Achievement Award from Pest Control Technology and Syngenta for his decades of success supporting the industry. This award is determined by previous Crown Leadership Award recipients and is one of the most prestigious industry awards that is only given to those who have dedicated more than 25 years to advancing pest control. Mr. Rollins has played an active role in upholding his strong family legacy of philanthropy. Under his guidance and passion for giving, Rollins’ employees have supported the United Way of Greater Atlanta since 1985. Over the course of our 42-year history with United Way, Rollins has raised over $21 million through employee donations and company matches that went to local communities in need. Mr. Rollins has been instrumental in instilling a culture of serving our community and has established Rollins as a community leader. Mr. Rollins is currently a Director of Marine Products Corporation and RPC, Inc., roles he has held since 2001 and 1984, respectively. He previously served as the Non-Executive Chairman of both companies from 2020 to 2022. Mr. Rollins also previously served as a Director of Genuine Parts Company from 2005 to 2017. Mr. Rollins received a BS in Business Administration from the University of Tennessee. | | | | Pamela R. Rollins Community Leader | | Pam R. Rollins is the granddaughter of O. Wayne Rollins, the founder of Rollins, Inc., and is a 3rd generation member of a 5th generation family. Ms. Rollins worked as a real estate manager under her grandfather’s direction and guidance from 1979 to 1984, after which, she focused on raising her two children, Michael and Margaret. Upon returning to the workforce, Ms. Rollins was employed with the Orkin Exterminating Company in customer service for 10 years. Ms. Rollins is currently a Director the Marine Products Corporation and RPC, Inc. as well as a Director and Officer of LOR, Inc. and the Rollins Holding Company. Ms. Rollins has served as a Director of Rollins, Inc. since 2015 and has extensive knowledge of the Company’s business and industry. Ms. Rollins serves as a Trustee on the boards of the O. Wayne Rollins Foundation, the Ma-Ran Foundation, the Rollins Child Development Center and Young Harris College. Ms. Rollins holds a B.A. Degree from Stephens College with a major in Family and Community Studies. | |

  14. Director Nominees

    | | P. Russell Hardin President of the Robert W. Woodruff Foundation Member of the Nominating and Corporate Governance Committee | | P. Russell Hardin has served as a Director of Rollins, Inc. since April 2023. He currently serves as the President of the Robert W. Woodruff Foundation, Joseph B. Whitehead Foundation, Lettie Pate Evans Foundation and Lettie Pate Whitehead Foundation, roles he has held since 2006. Mr. Hardin joined the Foundations’ staff in 1988 and became President in 2006. Previously, Mr. Hardin practiced law with the Atlanta firm of King & Spalding from 1982 to 1987. Currently, Mr. Hardin has served as a trustee of Northwestern Mutual Life Insurance Company since 2011 and serves as a director of Genuine Parts Company, a role he has held since 2017. He also serves as a director on the Truist Atlanta Advisory Council and The Commerce Club in Atlanta. Mr. Hardin offers the Board extensive experience in the areas of finance, management, strategic planning, philanthropy, governance, and law. Mr. Hardin received his Bachelor of Arts degree with high distinction from the University of Virginia in 1979, and a Juris Doctorate degree with honors from Duke University School of Law in 1982. | | | | Dale E. Jones Chief Executive Officer, Magna Vista Partners | | Dale E. Jones is a new nominee for Director of Rollins, Inc. Mr. Jones has served as Chief Executive Officer of Magna Vista Partners, a global leadership consulting firm, since September 2022. He has also served as a senior advisor to Diversified Search Group, an executive search firm, since January 2022, where he previously served as President and Chief Executive Officer from January 2015 to December 2021 and as President from October 2013 to January 2015. Prior to that, Mr. Jones served as Vice Chairman and partner of the CEO and Board Practice in the Americas at Heidrick & Struggles from 2009 to 2013. From 2007 to 2009, he served as Chief Executive Officer of PlayPumps International and as Executive Vice President of Revolution LLC, a venture capital firm that funded a philanthropic initiative to provide clean drinking water to Africa. Mr. Jones held several executive leadership positions at Heidrick & Struggles from 1999 to 2007. Mr. Jones has served on the boards of directors of Chick-fil-A, Inc., a fast food restaurant chain, since January 2021, and of Outset Medical, Inc., a medical technology company, since 2022. Previously, he served on the boards of directors of Northwestern Mutual, a financial services company, from 2007 to May 2022, of Kohl’s Corporation, an omnichannel retailer, from 2008 to 2016, and of Hughes Supply from 2003 to 2006 (prior to its acquisition by The Home Depot). He also has served on the Advisory Board of Crider Foods since 2023. Mr. Jones has extensive knowledge and experience with business strategy, board issues and corporate governance, and human capital. Mr. Jones holds a B.A. from Morehouse College. | |

  15. Director Nominees

    | Continuing Directors | | | | Susan R. Bell Retired Partner, Ernst & Young LLP Chairperson of the Audit Committee | | Susan R. Bell has served as a Director of Rollins, Inc. since January 2021. Ms. Bell retired as partner from Ernst & Young LLP in 2020 after a 36-year career in public accounting. At Ernst & Young LLP, Ms. Bell served as an audit and business advisory partner, led the Southeast Risk Advisory practice and served as the Atlanta Office Managing Partner. Prior to working at Ernst & Young LLP, Ms. Bell started her career at Arthur Andersen LLP in 1984 where she served as an audit partner from 1996 to 2002. Ms. Bell has extensive experience with accounting and auditing, internal controls over financial reporting, enterprise risk management, financial IT systems implementations and testing, process improvement, strategic planning, diversity and inclusion initiatives, mergers and acquisitions, dispositions, initial public debt and equity offerings and other U.S. and international capital markets transactions. Ms. Bell currently serves as a member of the Board of Directors of RPC, Inc., Marine Products Corporation and First Advantage Corporation, roles she has held since 2021, and also serves on the audit committees of those corporations and on the compensation committee of First Advantage Corporation. She also is audit committee chair for First Advantage Corporation. Ms. Bell is the past president of IWF Georgia Inc., a non-profit affiliate of IWF Global, and serves on its board of directors. She also serves on the Adkerson School of Accountancy Advisory Board at Mississippi State University. She has served on a number of other non-profit boards in a variety of leadership roles including as past chair of the board of United Way of Greater Atlanta, audit and finance committee chair of the National Center for Civil and Human Rights and the Woodruff Arts Center, and finance committee chair of the Atlanta Historical Society. Ms. Bell graduated summa cum laude from Mississippi State University with a Bachelor of Professional Accountancy and is a Certified Public Accountant in Georgia and Tennessee. | | | | Donald P. Carson Co-founder and Managing Director, The Ansley Capital Group, LLC and Ansley Securities LLC, Member of the Nominating and Corporate Governance Committee Member of the Audit Committee | | Donald P. Carson has served as a Director of Rollins, Inc. since 2021. Mr. Carson brings extensive financial and strategic experience to our Board of Directors. Mr. Carson is the founder of Don Carson Associates, LLC, and co-founder of The Ansley Capital Group, LLC, Ansley Securities LLC, and Cardez Hospitality Group, LLC. Mr. Carson previously served as President of RFA Management Company, LLC, an Atlanta-based family office, from 2019 to 2022, and previously from 2003 to 2013. Mr. Carson worked for many years in the investment and commercial banking industry, primarily for Wachovia Bank, N.A. from 1977 to 1997. During this time, he was head of the international banking and investment banking businesses. After leaving Wachovia, Mr. Carson became a partner of Paradigm Capital where he was employed from 1998 to 1999 and later co-founded The Ansley Capital Group, LLC and Ansley Securities, LLC, where he is a Managing Director. Mr. Carson currently serves as a director of LOR, Inc. and Rollins Holding Company, Inc., roles he has held since 2003. He also currently serves as a trustee of Beloit College and serves on the board of Black Mountain College Museum + Arts Center. Mr. Carson is also a trustee of The Gary W. Rollins Foundation. He is a trustee of The Cook and Bynum Fund, a publicly traded mutual fund. Mr. Carson appears on numerous recordings for Telarc and Deutsche Grammophon with Atlanta Symphony Orchestra Chorus. Four of these recordings have earned Grammys. Mr. Carson received a Bachelor of Arts degree in Music Composition from Beloit College, and a Master of Business Administration in Finance from the University of Chicago. He also is a graduate of the Thunderbird School of Global Management of Arizona State University. | |

  16. Director Nominees

    | | Jerry E. Gahlhoff, Jr. Chief Executive Officer and President | | Jerry E. Gahlhoff Jr. has served as a Director of Rollins, Inc. since 2021. In 2022, Mr. Gahlhoff was elected by the Board of Directors to serve as Chief Executive Officer of the Company, effective January 1, 2023, in addition to his role as President, a role he has held since 2020. Mr. Gahlhoff also served as Chief Operating Officer of the Company from 2020 to 2022. Prior to that, Mr. Gahlhoff served as President of the Company’s Specialty Brands and Vice President of Human Resources from 2016 to 2020, and as a Division President from 2011 to 2016. Mr. Gahlhoff joined the Company as part of the HomeTeam acquisition in 2008. Mr. Gahlhoff has been instrumental in driving the Company’s growth initiatives and has extensive knowledge of the Company’s business and industry having served in various roles of increasing responsibility at the Company for over 22 years. Mr. Gahlhoff serves on the Board of Directors of Zoo Atlanta. Mr. Gahlhoff received a Master of Science in Entomology from the University of Florida. | | | | Patrick J. Gunning Retired Chief Financial Officer, The Woodruff Arts Center Retired Partner, Ernst & Young LLP Member of the Audit Committee | | Patrick J. Gunning has served as a Director of Rollins, Inc. since January 2021. Mr. Gunning brings extensive risk oversight and financial and strategic experience to our Board of Directors. Mr. Gunning previously served as the Chief Financial Officer of the Robert W. Woodruff Arts Center, Inc., a non-profit organization, from November 2020 to June 2022. In June 2020, Mr. Gunning retired as a partner from Ernst & Young LLP, a role he held since May 2002, after a 39‑year career in public accounting. Mr. Gunning held multiple leadership roles at Ernst & Young LLP including Southeast Region Leader of the Financial Accounting Advisory Services practice, Southeast Area Industry Leader of the Retail and Consumer Products practice, and lead audit partner for numerous publicly traded and privately owned companies. Prior to joining Ernst & Young LLP, Mr. Gunning worked at Arthur Andersen LLP from 1981 to 2002, where he served as a partner, lead audit partner for numerous publicly traded and privately owned companies, and Assurance Division Leader. Mr. Gunning currently serves on the Boards of Directors of RPC, Inc. and Marine Products, Inc. At both companies, he chairs the Audit Committees and is a member of the Nominating and Governance Committees and Human Capital and Compensation Committees, all roles he has held since 2021. Mr. Gunning also currently serves on the Board of Trustees of the Robert W. Woodruff Arts Center, serving on its Finance and Audit Committees. Mr. Gunning received a Bachelor of Business Administration degree in Accountancy from the University of Notre Dame, and he is a Certified Public Accountant in the state of Georgia. | | | | Gregory B. Morrison Retired Senior Vice President and Corporate Chief Information Officer, Cox Enterprises, Inc. Member of the Audit Committee Member of the Human Capital Management and Compensation Committee |

  17. Director Nominees

    | Gregory B. Morrison has served as a Director of Rollins, Inc. since 2021. He is the former Senior Vice President and Corporate Chief Information Officer for Cox Enterprises, Inc., a role he held from February 2002 until his retirement in January 2020. During his 18 years at Cox, Mr. Morrison was responsible for providing corporate strategic planning, policy development and management of all information technology systems and overseeing cybersecurity matters. Prior to his role at Cox, Mr. Morrison served as Executive Vice President and Chief Operating Officer of RealEstate.com in 2000 and held various information and technology leadership roles at Prudential Financial from 1989 to 2002. Mr. Morrison has extensive knowledge and expertise with cybersecurity, large-scale business transformations and the development of key technological advances that help improve manual business processes. Mr. Morrison was named among the industry’s top performing Chief Information Officers who have shown unparalleled leadership to drive innovation and transformation in businesses. Mr. Morrison has served as Chairman of the Clark Atlanta University Board of Trustees since 2004. Mr. Morrison was a commissioned officer in the US Army from 1982 to 1989. Mr. Morrison received a Bachelor of Science in Mathematics and Physics from South Carolina State University, and a Master of Science in Industrial Engineering from Northwestern University. | | | | Louise S. Sams Retired Executive Vice President and General Counsel, Turner Broadcasting System, Inc. Member of the Human Capital Management and Compensation Committee Member of the Nominating and Corporate Governance Committee | | Louise S. Sams has served as a Director of Rollins since 2022. She previously served as the Executive Vice President and General Counsel of Turner Broadcasting System, Inc. (“Turner”), a television and media conglomerate, from 2000 until September 2019. As General Counsel, Ms. Sams oversaw legal work relating to all of the business activities of Turner and its subsidiaries worldwide. Ms. Sams managed a global legal department overseeing licensing, clearance and production of content for the Turner television networks and related media services, the sale and distribution of those networks, protection of intellectual property, employment matters, litigation, and transactional work, such as acquisitions and joint ventures. Ms. Sams also served as President, Turner Broadcasting System International, Inc. from September 2003 until May 2012. Ms. Sams has extensive experience related to technology, information security, use of data and consumer privacy, as well as enterprise-wide risk management. In Ms. Sams’ role as President, Turner Broadcasting System International, Inc., Ms. Sams was responsible for production, distribution and ad sales relating to all kids and entertainment television networks and media services offered by Turner outside of the U.S. and Canada, distribution and commercial operations of CNN’s international services, and Turner’s international joint ventures. Prior to joining Turner in 1993 as a corporate attorney, Ms. Sams was an associate at White & Case, specializing in mergers and acquisitions. Ms. Sams currently serves as a member of the Board of Directors of CoStar Group and Loop Industries, positions she has held since December 2019 and April 2021, respectively. Ms. Sams serves on the Audit Committee of Costar and the Audit and Compensation and Governance Committees of Loop Industries. Ms. Sams currently serves on the following non-profit boards: Princeton University, where she is Chair of the Board of Trustees and Chair of the Executive Committee, Board Development Committee and Compensation Committee; High Museum of Art in Atlanta; Woodruff Arts Center; The Westminster Schools; and Meals on Wheels, Atlanta, where she chairs the Development Committee. Ms. Sams received a J.D. from the University of Virginia School of Law, and a B.A. from Princeton University, where she graduated magna cum laude. | |

  18. Director Nominees

    | | John F. Wilson Vice Chairman of the Board | | John F. Wilson has served as a Director of Rollins, Inc. since 2013, and as Vice Chairman of the Company since 2020. Mr. Wilson has extensive knowledge of the Company’s business and industry having served in various roles of increasing responsibility at the Company for over 26 years. He previously served as Vice President of the Company from 2011 to 2013, President and Chief Operating Officer of the Company from 2013 to 2020, and as President of Orkin, LLC from 2009 to 2013. Prior to these executive roles with the Company, Mr. Wilson held roles at the Company as sales inspector, branch manager, Central Commercial Region Manager, Atlantic Division Vice President, and President of the Southeast Division. Mr. Wilson currently serves as a member of the Board of Directors of RPC, Inc. and Marine Products Corporation, positions he has held since April 2022. | |

  19. Director Nominees

    PROPOSAL 1:

  20. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  21. General Compensation Objectives and Guidelines

    General Compensation Objectives and Guidelines The Company is engaged in a highly competitive industry. The success of the Company depends on our ability to attract and retain highly qualified and motivated executives. In order to accomplish this objective, we have endeavored to structure our executive compensation program in a fashion that gives our Human Capital Management and Compensation Committee the flexibility to take into account our operating performance and the individual performance of our executive officers. The Committee, with the assistance of its compensation consultant, used peer group benchmarking (as described under the heading titled “Peer Group Benchmarking Analysis” on page 39) to assess the comparability of the Company’s pay practices to confirm that the total compensation for the Company’s executive officers is competitive with marketplace practices. The Human Capital Management and Compensation Committee endorses the philosophy that executive compensation should reflect Company performance and the contribution of executive officers to that performance. Our compensation policy is designed to achieve three fundamental objectives: •attract and retain qualified executives; •motivate performance to achieve Company objectives; and •align the interests of our executives with the long-term interests of the Company’s shareholders. In pursuing our objectives, we strive to provide a balanced approach to compensation policies and practices which does not promote excessive risk-taking. The Human Capital Management and Compensation Committee recognizes that there are many intangibles involved in evaluating performance and in motivating performance, and that determining an appropriate compensation level is a highly subjective endeavor. Pursuant to our compensation philosophy, the total annual compensation of our executive officers is primarily made up of the following three elements: •base salary (fixed compensation), which is an important element to attract, retain and motivate our executives; •annual performance-based cash incentive compensation (variable compensation), which is valuable in recognizing and rewarding Company achievement; and •grants of equity-based awards such as restricted stock (variable compensation) and performance share units (variable compensation), which make our executives “think like owners” and, therefore, align their interests with those of our shareholders. In addition, we provide retirement compensation plans, group welfare benefits and certain perquisites. We believe that all elements of our executives’ total compensation provide highly motivational incentives that link the pay of our executives to the performance of our Company and enable us to attract and retain highly qualified and motivated executives in our very competitive market.

  22. Compensation Elements

    | Core Compensation Element | Description | | Base Salary | Fixed cash compensation based on each executive officer’s role, responsibilities, competitive market positioning, and individual performance. | | Performance-Based Cash Incentive | Performance-based incentive cash compensation with target award amounts for each executive officer. Actual bonus amounts may be lower than target based on the achievement of certain Company performance goals. | | Equity Incentive | Grants of stock-based awards in the form of time-lapsed restricted stock and performance share units. |

  23. Performance-Based Cash Incentive

    Performance-Based Cash Incentive In February 2023, the Human Capital Management and Compensation Committee approved the terms of the Rollins, Inc. 2023 Executive Bonus Plan for its named executive officers (the “Executive Bonus Plan”), which replaced the 2022 Executive Bonus Plan. Under the Executive Bonus Plan, the named executive officers have an opportunity to earn bonuses of up to a certain percent of each individual’s annual base salary upon the achievement of performance goals approved by the Human Capital Management and Compensation Committee. Such performance goals for the 2023 Executive Bonus Plan consisted of the following targeted financial measures: •revenue to plan; and •pre-tax profit plan achievement. The performance goals are pre-established by the Human Capital Management and Compensation Committee for all named executive officers and measured annually. The terms of the Executive Bonus Plan allow adjustments by the Human Capital Management and Compensation Committee to performance results to include or exclude, as appropriate, the impact from significant business or product line acquisitions or sales and/or unusual or exceptional charges or revenue. We believe that the incentive-related provisions provide performance incentives that are beneficial to the Company and its shareholders by aligning pay with Company performance. Individual key operating initiatives, which were used in 2022 for certain bonus opportunities, were not utilized in the Executive Bonus Plans for 2023, because the Human Capital Management and Compensation Committee determined that it would be most beneficial for the annual cash bonuses to be fully aligned with overall Company performance. Set forth below is the 2023 target payout opportunity with respect to each of the performance measures, expressed as a percentage of annual base salary, for each of our named executive officers:

  24. Performance-Based Cash Incentive

    | Named Executive Officer | Target Bonus Opportunity for Pre-Tax Profit Element | Target Bonus Opportunity for Revenues Element | Total Target Bonus Opportunity | | Gary W. Rollins | 80% | 45% | 125% | | Jerry E. Gahlhoff, Jr | 90% | 60% | 150% | | Kenneth D. Krause | 60% | 40% | 100% | | John F. Wilson | 50% | 25% | 75% | | Elizabeth B. Chandler | 45% | 30% | 75% |

  25. Performance-Based Cash Incentive

    For each of the two elements of the bonus, threshold performance – which requires achieving 95% of the performance goal under the Company’s plan – results in a payout equal to 75% of the target bonus opportunity. Performance that exceeds the Company’s plan targets allows the officer to receive payouts exceeding the target bonus opportunity, in an amount scaling up to 125% of the target bonus opportunity, if actual performance equals 105% or more of the performance goal under the Company’s plan. If threshold performance is not achieved for a financial performance measure, there is no payout for that measure. For further information regarding the range of bonus opportunities granted in 2023, see “Grants of Plan-Based Awards in 2023” on page 45. Revenue to Plan Performance Goal This performance goal in 2023 was a 7.8 percent year-over-year increase in revenue. The actual revenues achieved for 2023 represented a year-over-year increase in the Company’s revenue of 14 percent, which reflected a 105.7 percent of plan for 2023. Therefore, each named executive officer received 125% of the target bonus opportunity for the revenue element of the plan. Pre-Tax Profit to Plan Performance Goal For 2023, the Human Capital Management and Compensation Committee elected to use discretion to adjust pre-tax profit for the impact of unusual or exceptional charges. Company performance, following this adjustment, equaled 103.6 percent of the performance goal. Therefore, each named executive officer received 115% of the target bonus opportunity for this element of the plan. In addition to any bonuses earned under the Executive Bonus Plan, the Human Capital Management and Compensation Committee has the authority to award discretionary bonuses. No discretionary bonuses were awarded for 2023.

  26. Equity-Based Awards

    Equity-Based Awards Pursuant to the terms of the Company’s 2018 Stock Incentive Plan, the Human Capital Management and Compensation Committee may grant stock options, stock appreciation rights and any other type of award valued by reference to (or otherwise based on) shares, including, without limitation, restricted stock, restricted stock units, performance accelerated restricted stock, performance stock and performance units. Equity-based awards are generally used by the Company as a tool to encourage retention and align the interest of our executives with those of our shareholders. Awards under the 2018 Stock Incentive Plan are purely discretionary and may or may not be granted in any given fiscal year. In 2023, the equity component of compensation for named executive officers (as well as certain other employees) continued to include grants of time-lapse restricted stock ("RSAs"), as in past years. However, in 2023 the Human Capital Management and Compensation Committee adjusted the mix of equity grants to these individuals to feature performance share units (“PSUs”). The PSUs will cliff vest after three years based upon the Company’s successful achievement of certain financial performance goals and feature a TSR “Modifier,” as described in more detail below. This mix of equity is designed to continue providing alignment of our executive compensation program with the interests of our shareholders and link longer term compensation of our executives to longer term performance of the Company. The Human Capital Management and Compensation Committee granted time-lapse restricted stock awards and performance share units to our named executive officers in February 2023, as follows:

  27. Equity-Based Awards

    | Name | 2023 Grants of Time-Lapse Restricted Stock Awards | 2023 Grants of Performance Share Units(1) | Total 2023 Grants of Equity | | Gary W. Rollins | 45,000 | 22,500 | 67,500 | | Jerry E. Gahlhoff, Jr | 72,525 | 36,264 | 108,789 | | Kenneth D. Krause | 29,100 | 14,550 | 43,650 | | John F. Wilson | 8,250 | 4,125 | 12,375 | | Elizabeth B. Chandler | 8,325 | 4,164 | 12,489 |

  28. Equity-Based Awards

    (1)The number of PSUs shown in this column represents the total number of shares that would cliff vest assuming the Revenue CAGR and Adjusted EBITDA Margin goals are met at the target level, and the TSR Modifier would cliff vest at target level. The vesting conditions of the PSUs are described in more detail below under "Terms of PSUs." The amount of the aggregate stock-based awards to our named executive officers in any given year is influenced by many factors. The amount of each grant to our named executive officers is influenced in part by the Human Capital Management and Compensation Committee’s subjective assessment of each individual’s respective contributions to achievement of the Company’s long-term goals and objectives. In evaluating individual performance for these purposes, the Human Capital Management and Compensation Committee considers the overall contributions of executive management as a group and the Committee’s subjective assessment of each individual’s relative contribution to that performance rather than specific aspects of each individual’s performance over a short-term period. It is our expectation to continue yearly grants of restricted stock awards and performance share units to selected executives, although we reserve the right to modify or discontinue this or any of our other compensation practices at any time. Terms of RSAs. Prior to January 2022, all of our time-lapse restricted stock awards had the same features and the shares vest one-fifth per year beginning on the second anniversary of the grant date. For awards of time-lapse restricted stock granted in 2022, the shares vest one-fifth per year beginning on the first anniversary of the grant date. For awards of time-lapse restricted stock granted in 2023, the shares vest one-fourth per year beginning on the first anniversary of the grant date. For awards of time-lapse restricted stock granted in 2024, the shares will vest one-third per year beginning on the first anniversary of the grant date. Time-lapse restricted shares have full voting and dividend rights. However, until the shares vest, they cannot be sold, transferred or pledged. Should the executive leave our employment or move to a lesser position for any reason prior to the vesting dates (other than due to death or disability), the unvested shares will be forfeited unless the Human Capital Management and Compensation Committee decides otherwise. In the event of a “change in control” as determined by the Board, all unvested restricted shares shall vest immediately. Terms of PSUs. PSUs granted in 2023 will cliff vest and convert to shares of common stock at the end of a three-year performance period, if the performance and market targets are met and if the recipient has remained continuously employed by the Company through that date in a position of equivalent or greater responsibility. However, the Human Capital Management and Compensation Committee has retained discretion for certain determinations, and whether targets are met under the PSUs will be determined by the Human Capital Management and Compensation Committee in its discretion. The targets are difficult but achievable to obtain, and it is even more challenging to obtain the maximum level. The 2023 PSUs are composed of 3 components, as described below. 1.Revenue CAGR component. Payout of this component at the threshold, target and maximum levels requires that the Company achieve 3-year CAGR (compound annual growth rate) in its revenues within a table set forth in the award agreement. 3-year CAGR (expressed as a percentage) is calculated by first dividing revenue for fiscal year 2025 by revenue for fiscal year 2022, then raising that quotient to the power of 1/3, and then subtracting 1. 2.Adjusted EBITDA Margin component. Payout of this component at the threshold, target and maximum levels requires that the Company achieve an aggregate Adjusted EBITDA Margin for the 3 fiscal years 2023, 2024, and 2025, within the table set forth in the award agreement. Adjusted EBITDA for this purpose is as defined in the Company’s SEC filings for the relevant periods. With respect to fiscal 2023, Adjusted EBITDA was calculated by adding back to GAAP net income charges for interest, taxes, depreciation and amortization, as well as those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control, restructuring costs related to restructuring and workforce reduction plans, and gains on the sale of businesses. 3-year Aggregate Adjusted EBITDA Margin is calculated by dividing the sum of 3 fiscal years Adjusted EBITDA by the sum of the corresponding 3 fiscal years Revenues. A reconciliation of 2023 Adjusted EBITDA and Adjusted EBITDA Margin to our 2023 GAAP net income is set forth in our Form 10-K for fiscal year ended December 31, 2023. 3.TSR Modifier component. Payout of this component occurs at the threshold, target and maximum levels if the Company’s 3-year Total Shareholder Return (“TSR”) for fiscal years 2023-2025, compared to the S&P 500 (“3-year Relative TSR”), falls within the table set forth in the award agreement. TSR is calculated as the profit or loss from net share price change over the period, including reinvestment of dividends. The table below shows the number of shares that would be earned under each component for each NEO assuming target-level performance.

  29. Target Level Payouts (in Shares) of 2023 PSUs by Component

    Target Level Payouts (in Shares) of 2023 PSUs by Component

  30. Target Level Payouts (in Shares) of 2023 PSUs by Component

    | Name | Revenue CAGR | Adjusted EBITDA Margin | TSR Modifier | Total | | Gary W. Rollins | 7,500 | 7,500 | 7,500 | 22,500 | | Jerry E. Gahlhoff, Jr | 12,088 | 12,088 | 12,088 | 36,264 | | Kenneth D. Krause | 4,850 | 4,850 | 4,850 | 14,550 | | John F. Wilson | 1,375 | 1,375 | 1,375 | 4,125 | | Elizabeth B. Chandler | 1,388 | 1,388 | 1,388 | 4,164 |

  31. Target Level Payouts (in Shares) of 2023 PSUs by Component

    Termination of Employment. Except in the case of death or disability, PSUs are forfeited in their entirety if the recipient’s employment with the Company terminates for any reason prior to December 31, 2025. However, if termination of employment is due to death or disability, then the Revenue CAGR and the Adjusted EBITDA Margin components (but not the TSR Modifier) will vest and shares will be paid at target level, whether the performance goals are met or not, and without regard to the level at which such performance goals may be met. Dividend Equivalents; No Voting Rights. PSU awards also include the right to “Dividend Equivalents” with respect to the underlying shares. Dividend equivalents are accrued over the performance period, in cash, based upon target payout level, subject to a true-up at the end of the three year cycle. Accrued Dividend Equivalents will be paid out upon vesting of the PSUs, but no such Dividend Equivalents will be payable to the extent the awards fail to vest or are forfeited, or the performance goals are not met. PSUs confer no voting rights with respect to the underlying shares prior to vesting and payout.

  32. Executive Employment Arrangements

    Executive Employment Arrangements While we do not have employment agreements with any of our named executive officers, the initial terms and conditions of employment for certain of our named executive officers are set forth in written employment offer letters. Also, as part of modernization efforts, we are currently considering employment agreements for certain of our named executive officers, which would likely provide for multiples of total cash compensation, including salary and bonus, and equity vesting on a full or pro-rated basis, upon severance and/or severance in connection with a change of control.

  33. Peer Group Benchmarking Analysis

    Peer Group Benchmarking Analysis As part of its executive compensation review for 2023, the Human Capital Management and Compensation Committee asked Mercer to update the peer group that serves as a primary comparator group for assessing the competitiveness of the Company’s executive compensation. As part of this process, Mercer recommended a peer group comprised of 18 companies, with each peer having revenue between 1/3 to 2.5 times the Company’s revenue. The appropriateness of the peer group was based on the industry, size, organizational type, and comparability of business complexity. The Peer Group companies generally had a majority of operations in the environmental and facilities services industry, and variations in their revenues, assets and market capitalization versus the Company were considered when the group was selected. Where possible, each company position was compared to industry data using functional counterparts or executives with similar roles at the peer companies, as well as compensation data disclosed in proxy statements filed in 2023. The Human Capital Management and Compensation Committee considered the peer group benchmarking analysis provided by Mercer comparing the compensation components of salary, annual incentives, long-term incentives, and total compensation of the Company’s CEO and other executive officers relative to pay programs of the selected peer group. The Human Capital Management and Compensation Committee believes the Company’s executive compensation program is fair, competitive with marketplace practices and effective in enhancing shareholder value. The following companies were included in the Peer Group for 2023:

  34. Peer Group Benchmarking Analysis

    | Company Name | Industry | | ABM Industries Incorporated | Environmental and Facilities Services | | Brightview Holdings, Inc. | Environmental and Facilities Services | | The Brink's Company | Security and Alarm Services | | Casella Waste Systems, Inc. | Environmental and Facilities Services | | Clean Harbors, Inc. | Environmental and Facilities Services | | Comfort Systems USA, Inc. | Construction and Engineering | | Frontdoor, Inc. | Specialized Consumer Services | | Harsco Corporation | Environmental and Facilities Services | | Healthcare Services, Group, Inc. | Diversified Support Services | | Iron Mountain Incorporated | Other Specialized REITs | | Lennox International Inc. | Building Products | | The Scotts Miracle-Gro Company | Fertilizers and Agricultural Chemicals | | Service Corporation International | Specialized Consumer Services | | Stericycle, Inc. | Environmental and Facilities Services | | Terminix Global Holdings, Inc. | Specialized Consumer Services | | Unifirst Corporation | Diversified Support Services | | US Ecology, Inc. | Environmental and Facilities Services | | Waste Connections, Inc. | Environmental and Facilities Services |

  35. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table provides information regarding the compensation awarded to, earned by and/or paid to each of our named executive officers for the years indicated below:

  36. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Equity Awards ($)(2) | | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | | | | | RSA | PSU | | | | | Gary W. Rollins | 2023 | 1,449,000 | — | 1,628,100 | 802,915 | 2,148,142 | 545,489 | 6,573,646 | | Executive Chairman | 2022 | 1,449,000 | — | 3,564,000 | — | 2,173,500 | 573,704 | 7,760,204 | | | 2021 | 1,400,000 | — | 4,458,000 | — | 2,100,000 | 435,601 | 8,393,601 | | Jerry E. Gahlhoff, Jr. | 2023 | 1,000,000 | — | 2,623,955 | 1,294,070 | 1,785,000 | 40,864 | 6,743,889 | | President and Chief Operating Officer | 2022 | 690,000 | — | 1,188,000 | — | 759,000 | 42,836 | 2,679,836 | | | 2021 | 600,000 | — | 1,300,250 | — | 708,000 | 32,155 | 2,640,405 | | Kenneth D. Krause | 2023 | 702,000 | — | 1,052,838 | 519,206 | 835,380 | 228,470 | 3,337,894 | | Executive Vice President, Chief Financial Officer | 2022 | 212,885 | 930,000 | 2,500,034 | — | 337,500 | 465,624 | 4,446,043 | | and Treasurer | 2021 | — | — | — | — | — | — | — | | John F. Wilson | 2023 | 400,000 | — | 298,485 | 147,173 | 355,000 | 38,163 | 1,238,821 | | Vice Chairman and Assistant to the Chairman | 2022 | 983,250 | — | 1,485,000 | — | 1,229,063 | 43,390 | 3,740,703 | | | 2021 | 950,000 | — | 2,229,000 | — | 1,187,500 | 39,344 | 4,405,844 | | Elizabeth B. Chandler | 2023 | 538,200 | — | 301,199 | 148,528 | 480,344 | 36,019 | 1,504,290 | | Vice President, General Counsel and Corporate | 2022 | 517,500 | — | 356,400 | — | 388,125 | 36,913 | 1,298,938 | | Secretary | 2021 | 500,000 | — | 835,875 | — | 355,000 | 32,132 | 1,723,007 |

  37. SUMMARY COMPENSATION TABLE

    (1)The amounts reported in this column represent for Mr. Krause, a one-time cash sign-on bonus and a one-time make-whole cash bonus in the amounts of $500,000 and $430,000, respectively, paid pursuant to the terms of the Offer Letter dated July 25, 2022, between the Company and Mr. Krause. (2)The amounts reported in these columns represent the aggregate grant date fair value of restricted stock and performance share units awarded to each named executive officer under our 2018 Stock Incentive Plan during the fiscal years 2023, 2022 and 2021, as applicable, in accordance with FASB ASC Topic 718. Because these values are determined as of the date of grant and based on certain assumptions, including assumptions regarding the outcome of certain performance and market conditions, actual values received by the NEOs may be lower or higher from the numbers presented here. Please refer to Note 13 – Stockholder Equity to our consolidated financial statements contained in our 2023 Form 10-K for the period ending December 31, 2023, for a discussion of the assumptions used in these computations. When calculating the amounts shown in this table, we have disregarded all estimates of forfeitures. The fair value presented for the PSUs assumes that the 3-year CAGR and the Adjusted EBITDA Margin portions of the award will cliff vest at target levels, and fair value for these portions of the PSUs was calculated by multiplying this target number of shares by the closing price on the grant date. A Monte Carlo simulation was used to value the TSR Modifier portion of the award, since the modifier is subject to a market condition, and this requires certain assumptions to be made. Significant assumptions used in the Monte Carlo valuation included volatility rate of 32% and a risk-free interest rate of 4.38%. If the maximum level of performance is achieved, the grant date fair values of the PSUs would be $1,605,831 for Gary W. Rollins; $2,588,141 for Mr. Gahlhoff; $1,038,413 for Mr. Krause; $294,346 for Mr. Wilson; and $297,057 for Ms. Chandler. (3)The amounts reported in this column represent bonuses paid under the Company’s performance-based incentive cash compensation plan, which are accrued in the fiscal year earned and paid in the first quarter of the following fiscal year. (4)The amounts reported in this column include perquisites and other benefits of the types indicated in the following table:

  38. SUMMARY COMPENSATION TABLE

    | | Perquisites | | | | | | | | | Name | Personal Use of Aircraft(a) ($) | Auto Allowance ($) | Use of Executive Dining Room(b) ($) | Executive Physical ($) | Relocation Expenses(c) ($) | Company Contribution to 401(k) Plan ($) | Tax Gross- Ups(d) ($) | Total ($) | | Gary W. Rollins | 333,710 | 22,124 | 141,902 | 2,605 | — | 13,725 | 31,423 | 545,489 | | Jerry E. Gahlhoff, Jr. | — | 27,139 | — | — | — | 13,725 | — | 40,864 | | Kenneth D. Krause | — | 36,674 | — | — | 125,353 | 13,725 | 52,718 | 228,470 | | John F. Wilson | — | 21,877 | — | 2,561 | — | 13,725 | — | 38,163 | | Elizabeth B. Chandler | — | 19,293 | — | 3,001 | — | 13,725 | — | 36,019 |

  39. SUMMARY COMPENSATION TABLE

    (a)The amount reported in this column for Mr. Rollins represents (1) the incremental costs to the Company for Mr. Rollins’ personal use of the Company’s aircraft (calculated based on the actual variable costs to the Company of Mr. Rollins’ proportionate use of the Company aircraft) and (2) the variable costs paid by the Company for Mr. Rollins personal use of Mr. Rollins' aircraft (these variable costs include fuel, landing fees, pilot expenses, insurance, training and subscriptions). (b)The amount reported in this column represents the incremental costs to the Company for Mr. Rollins’ use of the Company’s executive dining room. (c)The amount reported in this column represents the aggregate incremental costs to the Company for Mr. Krause's relocation to Atlanta, Georgia where the Company's corporate headquarters are located. (d)The amounts reported in this column represent, for Mr. Rollins, the tax gross-up related to Mr. Rollins’ personal use of the Company aircraft, and for Mr. Krause, the tax gross-up related to Mr. Krause's relocation to Atlanta, Georgia.

  40. GRANTS OF PLAN-BASED AWARDS IN 2023

    GRANTS OF PLAN-BASED AWARDS IN 2023 The following table shows for the year ended December 31, 2023, certain information regarding grants of plan-based awards to our named executive officers.

  41. GRANTS OF PLAN-BASED AWARDS IN 2023

    | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(3) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | | | All Other Awards: Number of Shares of Stock or Units(5) (#) | Grant Date Fair Value of Stock or Units Awards(6) ($) | | Name | Award Type | Grant Date(1) | Committee Approval Date(2) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Gary W. Rollins | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 45,000 | 1,628,100 | | | PSU | 2/16/2023 | 2/14/2023 | — | — | — | 9,000 | 22,500 | 45,000 | — | 802,915 | | | Cash Incentive | — | — | 1,358,438 | 1,811,250 | 2,264,063 | — | — | — | — | — | | Jerry E. Gahlhoff, Jr. | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 72,525 | 2,623,955 | | | PSU | 2/16/2023 | 2/14/2023 | — | — | — | 14,505 | 36,264 | 72,525 | — | 1,294,070 | | | Cash Incentive | — | — | 1,125,000 | 1,500,000 | 1,875,000 | — | — | — | — | — | | Kenneth D. Krause | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 29,100 | 1,052,838 | | | PSU | 2/16/2023 | 2/14/2023 | — | — | — | 5,820 | 14,550 | 29,100 | — | 519,206 | | | Cash Incentive | — | — | 526,500 | 702,000 | 877,500 | — | — | — | — | — | | John F. Wilson | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 8,250 | 298,485 | | | PSU | 2/16/2023 | 2/14/2023 | — | — | — | 1,650 | 4,125 | 8,250 | — | 147,173 | | | Cash Incentive | — | — | 225,000 | 300,000 | 375,000 | — | — | — | — | — | | Elizabeth B. Chandler | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 8,325 | 301,199 | | | PSU | 2/16/2023 | 2/14/2023 | — | — | — | 1,665 | 4,164 | 8,325 | — | 148,528 | | | Cash Incentive | — | — | 302,738 | 403,650 | 504,563 | — | — | — | — | — |

  42. GRANTS OF PLAN-BASED AWARDS IN 2023

    (1)The dates reported in this column represent the grant date for the equity-based awards. (2)The dates reported in this column represent the date the Human Capital Management and Compensation Committee approved the equity-based awards. (3)The amounts reported in these columns represent potential payouts of non-equity incentive cash bonus awards granted under the 2023 Executive Bonus Plan for each named executive officer, determined as of the date they were granted. These are the amounts that would have been earned if the performance goals had been met at threshold, target, and maximum levels, respectively. See “Compensation Discussion and Analysis -- Performance-Based Cash Incentive” above for more information about the structure of these bonus awards. Actual payouts were based upon actual 2023 performance levels and therefore differ from what is shown here. Actual payouts for 2023 are set forth in the "Summary Compensation Table" on page 43 under “Non-Equity Incentive Plan Compensation.” (4)The amounts reported in these columns represent the number of shares that may become payable under the PSUs awarded in fiscal year 2023 to our named executive officers, assuming achievement of “threshold,” “target” and “maximum” levels of both performance goals and the Relative TSR Goal for the TSR Modifier. These goals are described in more detail under “Compensation Discussion and Analysis -- Equity-Based Awards” above. PSUs also provide entitlement to certain Dividend Equivalents as described above. (5)The amounts reported in this column represent RSAs granted under our 2018 Stock Incentive Plan in fiscal year 2023 to our named executive officers. (6)The amounts reported in this column represent the aggregate grant date fair value of restricted stock and performance share units at target level awarded to each named executive officer under our 2018 Stock Incentive Plan during fiscal year 2023, in accordance with FASB ASC Topic 718. The grant date fair value of the PSUs set forth in this column is based on the “probable outcome” (which as of grant date was target attainment) of the performance and market conditions of these awards and using the same methodology described above in Footnote 2 to the "Summary Compensation Table" on page 43. These values may not match the actual amount realized by the NEOs, which could be higher or lower than what is presented here.

  43. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The table below sets forth the total number of restricted shares of Common Stock and performance share units outstanding at December 31, 2023 and held by the Company’s named executive officers but which have not yet vested, together with the market value of these unvested shares based on the $43.67 closing price of our Common Stock on December 29, 2023 (the last trading day of the year). The Company does not have any outstanding option awards held by the named executive officers.

  44. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Restricted Stock Awards | | Performance Share Unit Awards | | | Name | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Number of Unearned Units That Have Not Vested (#) | Market Value of Unearned Units That Have Not Vested ($) | | Gary W. Rollins | 26,100(1) | 1,139,787 | 45,000(7) | 1,965,150(9) | | | 41,100(2) | 1,794,837 | | | | | 69,750(3) | 3,045,983 | | | | | 96,000(4) | 4,192,320 | | | | | 96,000(5) | 4,192,320 | | | | | 45,000(6) | 1,965,150 | | | | Jerry E. Gahlhoff, Jr. | 3,600(1) | 157,212 | 72,525(7) | 3,167,167(9) | | | 5,700(2) | 248,919 | | | | | 9,630(3) | 420,542 | | | | | 28,000(4) | 1,222,760 | | | | | 32,000(5) | 1,397,440 | | | | | 72,525(6) | 3,167,167 | | | | Kenneth D. Krause | 48,791(8) | 2,130,703 | 29,100(7) | 1,270,797(9) | | | 29,100(6) | 1,270,797 | | | | John F. Wilson | 13,500(1) | 589,545 | 8,250(7) | 360,278(9) | | | 21,240(2) | 927,551 | | | | | 36,000(3) | 1,572,120 | | | | | 48,000(4) | 2,096,160 | | | | | 40,000(5) | 1,746,800 | | | | | 8,250(6) | 360,278 | | | | Elizabeth B. Chandler | 2,700(1) | 117,909 | 8,325(7) | 363,553(9) | | | 4,800(2) | 209,616 | | | | | 13,500(3) | 589,545 | | | | | 18,000(4) | 786,060 | | | | | 9,600(5) | 419,232 | | | | | 8,325(6) | 363,553 | | |

  45. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    (1)These awards of time-lapse restricted stock were granted to the named executive officers on 1/23/2018 and became fully vested on 1/23/2024. (2)These awards of time-lapse restricted stock were granted to the named executive officers on 1/22/2019 and are scheduled to fully vest on 1/22/2025. (3)These awards of time-lapse restricted stock were granted to the named executive officers on 1/28/2020 and are scheduled to fully vest on 1/28/2026. (4)These awards of time-lapse restricted stock were granted to the named executive officers on 1/26/2021 and are scheduled to fully vest on 1/26/2027. (5)These awards of time-lapse restricted stock were granted to the named executive officers on 1/26/2022 and are scheduled to fully vest on 1/26/2027. (6)These awards of time-lapse restricted stock were granted to the named executive officers on 2/16/2023 and are scheduled to fully vest on 2/16/2027. (7)These awards of performance share units were granted to the named executive officers on 2/16/2023 and are scheduled to cliff vest on 12/31/2025, subject to performance and market criteria. (8)This award of time-lapse restricted stock was granted to Mr. Krause on 9/1/2022 and is scheduled to fully vest on 1/1/2025. (9)This market value shows the maximum payout. Actual values received by the NEOs may be lower from the numbers presented here.

  46. OPTION EXERCISES AND STOCK VESTED

    OPTION EXERCISES AND STOCK VESTED The following table sets forth the number of shares of Common Stock acquired by the named executive officers and the aggregate value realized upon the vesting of stock during the fiscal year ended December 31, 2023. None of our named executive officers owned any stock options that were exercised in 2023.

  47. OPTION EXERCISES AND STOCK VESTED

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Gary W. Rollins | 146,250 | 5,280,350 | | Jerry E. Gahlhoff, Jr. | 28,710 | 1,036,896 | | Kenneth D. Krause | 24,395 | 891,637 | | John F. Wilson | 71,620 | 2,585,498 | | Elizabeth B. Chandler | 18,390 | 662,936 |

  48. OPTION EXERCISES AND STOCK VESTED

    (1)The amounts in this column represent the market value on the vesting date of the shares that vested, without regard to any related tax obligations. Market value was determined using the closing price per share of Common Stock on the vesting date.

  49. NON-QUALIFIED DEFERRED COMPENSATION

    NON-QUALIFIED DEFERRED COMPENSATION On June 13, 2005, the Company approved the Rollins, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) that is designed to comply with the provisions of the American Jobs Creation Act of 2004 (including Section 409A of the Internal Revenue Code). The Deferred Compensation Plan provides that employees eligible to participate in the Deferred Compensation Plan include those who are both members of a group of management and/or highly compensated employees selected by the committee administering the Deferred Compensation Plan. All of the executive officers are eligible to participate in the Company’s Deferred Compensation Plan. The table below sets forth the contributions made to the Deferred Compensation Plan, the aggregate earnings in 2023 and the balances as of December 31, 2023 for each named executive officer under the Deferred Compensation Plan:

  50. NON-QUALIFIED DEFERRED COMPENSATION

    | Name | Executive contributions in last FY(1) ($) | Registrant contributions in last FY ($) | Aggregate earnings/(losses) in last FY(2) ($) | Aggregate withdrawals/ distributions | Aggregate balance at last FYE ($) | | Gary W. Rollins | - | - | (15,725) | - | 125,496 | | Jerry E. Gahlhoff, Jr. | - | - | (15,745) | - | 122,863 | | Kenneth D. Krause | - | - | - | - | - | | John F. Wilson | 350,631 | - | 202,657 | - | 3,668,192 | | Elizabeth B. Chandler | - | - | - | - | - |

  51. NON-QUALIFIED DEFERRED COMPENSATION

    (1)This column reports the actual amounts of base salary deferred by the named executive officers in 2023 under the Deferred Compensation Plan, which is included in the "Summary Compensation Table" on page 43. (2)This column reports earnings or losses on compensation that the named executive officers elected to defer under the Deferred Compensation Plan. These amounts do not represent above-market or preferential earnings and therefore are not included in the "Summary Compensation Table" on page 43. The Deferred Compensation Plan provides that participants may defer up to 50% of their base salary and up to 85% of their annual bonus with respect to any given plan year, subject to a $2,000 per plan year minimum. The Company may make discretionary contributions to participant accounts but has not done so since 2011. Under the Deferred Compensation Plan, salary and bonus deferrals are fully vested. Any discretionary contributions are subject to vesting in accordance with the matching contribution-vesting schedule set forth in the Rollins 401(k) Savings Plan in which a participant participates. Accounts are credited with hypothetical earnings, and/or debited with hypothetical losses, based on the performance of certain “Measurement Funds.” Account values are calculated as if the funds from deferrals and Company credits had been converted into shares or other ownership units of selected Measurement Funds by purchasing (or selling, where relevant) such shares or units at the current purchase price of the relevant Measurement Fund at the time of the participant’s selection. Deferred Compensation Plan benefits are unsecured general obligations of the Company to the participants, and these obligations rank in parity with the Company’s other unsecured and unsubordinated indebtedness. The Company has established a “rabbi trust,” which it uses to voluntarily set aside amounts to indirectly fund any obligations under the Deferred Compensation Plan. To the extent that the Company’s obligations under the Deferred Compensation Plan exceed assets available under the trust, the Company would be required to seek additional funding sources to fund its liability under the Deferred Compensation Plan. Generally, the Deferred Compensation Plan provides for distributions of any deferred amounts upon the earliest to occur of a participant’s death, disability, retirement or other termination of employment (a “Termination Event”). However, for any deferrals of salary and bonus (but not Company contributions), participants would be entitled to designate a distribution date which is prior to a Termination Event. Generally, the Deferred Compensation Plan allows a participant to elect to receive distributions under the Deferred Compensation Plan in installments or lump-sum payments.

  52. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table and accompanying discussion describes the potential payments and benefits under the Company’s compensation and benefit plans and arrangements to which the named executive officers would be entitled upon termination of employment. There are no other agreements, arrangements or plans that entitle executive officers to severance, perquisites, or other enhanced benefits upon termination of their employment, except as described below. Any agreement to provide additional payments or benefits to a terminating executive officer would be in the discretion of the Human Capital Management and Compensation Committee. The executive officers are not entitled to additional benefits at death or disability per the terms of the defined benefit plan. The executive officers can choose to receive the amounts accumulated in the Deferred Compensation Plan either as a lump sum or in installments at retirement, death or disability. These amounts have been disclosed under the “Non-Qualified Deferred Compensation” section on page 50. Unvested Equity Awards. Under our Time-Lapse Restricted Stock Award Agreements and our Performance Share Unit Award Agreements (the “Equity Award Agreements”), if a named executive officer’s employment with the Company terminates at any time prior to the vesting of any restricted stock or performance share units issued under the Equity Award Agreements, the named executive officer shall forfeit all unvested restricted stock or performance stock units, except where termination was due to certain circumstances specified in the agreements, such as permanent disability, death or a change in control. Treatment of unvested awards varies with the reason for the termination, the type of award, and the year in which the award was granted, as described in more detail below: •Death. Under our RSA agreements, in the event of death of a named executive officer, all unvested restricted stock shall vest immediately. Under our PSU award agreements, if employment terminates due to death before the cliff vesting occurs, the award will vest at target levels for the CAGR and Adjusted EBITDA Margin components, as if target performance had been achieved, without regard to actual performance. Nothing will vest for the TSR Modifier, regardless of actual performance. •Change in Control. In an event of a "change in control," as determined by our Board of Directors, unvested restricted stock shall vest immediately. The PSU award agreements do not contain any change in control provisions. •Disability. Our RSA agreements provide for accelerated vesting of a prorated amount of restricted stock upon permanent disability. The proration allows the NEO to receive a fraction of the award equal (in total, including any shares that have already vested under the award) to the number of months from the grant date to the date of permanent disability, divided by the number of months in the vesting period for the award. Under our PSU agreements, if employment terminates due to disability before cliff vesting occurs, the award will vest at target levels for the CAGR and Adjusted EBITDA Margin components, as if target performance had been achieved, without regard to actual performance. Nothing will vest for the TSR Modifier, regardless of actual performance. •Retirement. None of our RSA and PSU agreements provide for vesting at retirement. The Executive Bonus Plan agreements require the award recipient to remain employed through the end of the year, subject to certain exceptions only for certain transfers and promotions. No provision is made under these agreements for payouts to individuals whose employment has terminated for any reason prior to the end of the year, including due to death, disability, retirement, or change in control. The table below shows the incremental restricted shares and performance share units that would become vested under the relevant Equity Award Agreement as of December 31, 2023, at the closing market price of $43.67 per share for our Common Stock, as of that date, in the case of retirement, death, disability or change in control.

  53. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | | | Equity Awards | | | Name | | Number of shares underlying unvested stock (#) | Unrealized value of unvested stock ($) | | Gary W. Rollins | Retirement | - | - | | | Death | 388,950 | 16,985,447 | | | Disability | 212,789 | 9,292,521 | | | Change in Control | 388,950 | 16,985,447 | | Jerry E. Gahlhoff, Jr. | Retirement | - | - | | | Death | 175,630 | 7,669,762 | | | Disability | 79,669 | 3,479,156 | | | Change in Control | 175,630 | 7,669,762 | | Kenneth D. Krause | Retirement | - | - | | | Death | 87,591 | 3,825,099 | | | Disability | 36,092 | 1,576,141 | | | Change in Control | 87,591 | 3,825,099 | | John F. Wilson | Retirement | - | - | | | Death | 169,740 | 7,412,546 | | | Disability | 97,352 | 4,251,402 | | | Change in Control | 169,740 | 7,412,546 | | Elizabeth B. Chandler | Retirement | - | - | | | Death | 59,700 | 2,607,099 | | | Disability | 32,347 | 1,412,624 | | | Change in Control | 59,700 | 2,607,099 |

  54. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    Accrued Pay and Regular Retirement Benefits. The amounts shown in the table above do not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment. These include: •Accrued salary and vacation pay •Distributions of plan balances under the 401(k) plan, as described on page 51 •Non-Qualified Deferred Compensation Change in Control or Severance. The Company does not have any severance for its executive officers. However, upon the occurrence of a “Change in Control,” as determined by the Board of Directors, all unvested restricted stock shall immediately vest.

  55. PAY RATIO DISCLOSURE

    PAY RATIO DISCLOSURE As required by the SEC rules, we are providing the ratio of our median employee’s annual total compensation (the median of the total compensation of all our employees, excluding our principal executive officer) to the total annual compensation of Jerry E. Gahlhoff, Jr., who served as our principal executive officer (“PEO”) during fiscal year 2023. The purpose of the required disclosure is to provide a measure of the equitability of pay within the organization. We believe our compensation philosophy and process yield an equitable result.

  56. PAY RATIO DISCLOSURE

    | Median Employee annual total compensation for 2023 | $57,200 | | PEO annual total compensation for 2023 | $6,743,889 | | Ratio of PEO to Median Employee compensation for 2023 | 118:1 |

  57. PAY RATIO DISCLOSURE

    In determining the median employee, a listing was prepared of all employees as of December 31, 2023. As of December 31, 2023, we had approximately 19,000 employees, including approximately 2,000 international employees and approximately 17,000 employees in the United States. For purposes of identifying the median employee, we (i) used the annual base salaries and bonuses of all employees employed by the Company or its consolidated subsidiaries as of December 31, 2023 (including our employees in Canada (approximately 1,158 employees) but excluding our employees located in the United Kingdom (approximately 320), Singapore (approximately 80), and Australia (approximately 350) (approximately 750 excluded international employees)), other than Mr. Gahlhoff, resulting in approximately 18,000 employees included in the calculation; (ii) ranked the total base salary and bonus amounts of all employees in (i), except Mr. Gahlhoff, from lowest to highest; and (iii) selected the median employee based on the total amount. For simplicity, the value of the Company’s 401(k) plan and medical benefits provided were excluded. For this purpose, annual base salary plus bonus was calculated using W-2 wages, excluding any equity awards, and in the case of international employees, the local equivalent. The pay ratio disclosure presented above is a reasonable estimate. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, our pay ratio disclosure may not be comparable to the pay ratios reported by other companies.

  58. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE In accordance with the SEC’s regulations, we are providing the following information about the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and our other named executive officers (“NEOs”) and certain financial performance of the Company for the years ended December 31, 2023, 2022, 2021, and 2020. For further information concerning the Company’s compensation philosophy see section titled "Executive Compensation – Compensation Discussion and Analysis” on page 31.

  59. Pay versus Performance Table

    Pay versus Performance Table The following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2023, 2022, 2021 and 2020, and our financial performance for each such fiscal year:

  60. Pay versus Performance Table

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Total Shareholder Return ($)(3) | Peer Group Total Shareholder Return ($)(4) | Net Income ($)(5) | Pre-Tax Profit ($)(6) | | 2023 | 6,743,889 | 9,226,265 | 3,163,663 | 4,851,471 | 207 | 194 | 434,957,000 | 586,257,000 | | 2022 | 7,760,204 | 9,213,035 | 2,629,526 | 2,960,216 | 171 | 151 | 368,599,000 | 498,917,000 | | 2021 | 8,393,601 | 6,163,785 | 2,220,844 | 905,146 | 158 | 159 | 356,565,000 | 482,485,000 | | 2020 | 5,475,195 | 14,029,693 | 2,094,217 | 5,109,905 | 179 | 121 | 266,756,000 | 362,716,000 |

  61. Pay versus Performance Table

    1.The dollar amounts reported in these columns are (i) the amount of total compensation in the “Total” column of the "Summary Compensation Table" reported for (a) Jerry E. Gahlhoff for the year 2023 when he served as the Company’s Chief Executive Officer and (b) Gary W. Rollins for the years 2022, 2021, and 2020 when he served as the Company’s Chief Executive Officer, and (ii) the average of the amounts reported for the Company’s remaining NEOs as a group in the “Total” column of the "Summary Compensation Table" in each applicable year. The names of the remaining NEOs included for purposes of calculating the average amounts in each applicable year are as follows:

  62. Pay versus Performance Table

    | Year | Non-PEO NEOs | | 2023 | Gary W. Rollins, Kenneth D. Krause, John F. Wilson and Elizabeth B. Chandler | | 2022 | Jerry E. Gahlhoff, Jr., Kenneth D. Krause, Julie K. Bimmerman, John F. Wilson and Elizabeth B. Chandler | | 2021 | Jerry E. Gahlhoff, Jr., P. Edward Northen, Julie K. Bimmerman, John F. Wilson and Elizabeth B. Chandler | | 2020 | Jerry E. Gahlhoff, Jr., Randall R. Rollins, P. Edward Northen, John F. Wilson and Elizabeth B. Chandler |

  63. Pay versus Performance Table

    2.The amounts reported in these columns represent the amount of “compensation actually paid” to (a) Jerry E. Gahlhoff for the year 2023 and (b) Gary W. Rollins for the years 2022, 2021, and 2020, and on average, to all other NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Jerry E. Gahlhoff or Gary W. Rollins or to the other NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Jerry E. Gahlhoff or Gary W. Rollins’s total compensation, and to the average total compensation for the other NEOs as a group, for each year to determine the compensation actually paid:

  64. Pay versus Performance Table

    | | 2023 | | 2022 | | 2021 | | 2020 | | | | PEO ($) | Average non-PEO NEOs ($) | PEO ($) | Average non-PEO NEOs ($) | PEO ($) | Average non-PEO NEOs ($) | PEO ($) | Average non-PEO NEOs ($) | | Summary Compensation Table Total | 6,743,889 | 3,163,663 | 7,760,204 | 2,629,526 | 8,393,601 | 2,220,844 | 5,475,195 | 2,094,217 | | Subtraction of Stock Awards | (3,918,025) | (1,224,611) | (3,564,000) | (1,224,687) | (4,458,000) | (1,129,360) | (2,846,575) | (1,143,772) | | Addition of Year-End Equity Value | 5,735,845 | 1,792,816 | 4,384,800 | 1,426,419 | 4,105,200 | 834,724 | 4,541,888 | 1,004,490 | | Change in Fair Value of Stock Awards granted in Prior Year | 562,771 | 1,042,907 | 827,616 | 147,338 | (1,758,348) | (283,712) | 6,399,417 | 1,249,230 | | Addition of Fair Value Stock Awards that were granted and vested in the same FY | — | — | — | — | — | — | — | 768,180 | | Change in Fair Value of Stock Awards granted during any prior FY that met the vesting conditions as of the end of the applicable FY | (11,764) | (24,458) | (399,921) | (62,357) | (321,024) | (64,051) | 308,943 | 1,096,205 | | Subtraction of Stock Awards that failed to meet the vesting conditions | — | — | — | — | — | (708,066) | — | — | | Subtraction of Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Defined Benefit and Pension | — | — | — | — | — | — | (10,385) | (7,801) | | Application of dividends or other earnings paid during applicable FY prior to vesting date | 113,549 | 101,155 | 204,336 | 43,977 | 202,356 | 34,767 | 161,210 | 49,157 | | Compensation Actually Paid | 9,226,265 | 4,851,471 | 9,213,035 | 2,960,216 | 6,163,785 | 905,146 | 14,029,693 | 5,109,905 |

  65. Pay versus Performance Table

    3.The amounts reported in this column represents the Company’s total cumulative Total Shareholder Return (“TSR”) for the fiscal years ended December 31, 2023, 2022, 2021 and 2020. The Company’s total cumulative TSR is the total shareholder return calculated as the profit or loss from net share price change, over a given period, including reinvestment of dividends. 4.The amounts reported in this column represents the weighted Peer Group TSR (“Peer Group TSR”) for the fiscal years ended December 31, 2023, 2022, 2021 and 2020. The Peer Group TSR is weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the S&P 500 Commercial Services & Supplies Index. 5.The amounts reported in this column represent the amount of Net Income reflected in the Company’s audited financial statements for the fiscal years ended December 31, 2023, 2022, 2021 and 2020. 6.Pre-Tax Profit, which is calculated as consolidated income before taxes, represents the most important financial measure used by the Company to link compensation actually paid to its named executive officers for the fiscal years ended December 31, 2023, 2022, 2021 and 2020.

  66. Pay Versus Performance Tabular List

    Pay Versus Performance Tabular List The following table lists (in no specific order) the most important financial performance measures used by the Company to link compensation actually paid to our NEOs in 2023 to the performance of the Company.

  67. Pay Versus Performance Tabular List

    | Revenue | | Pre-Tax Profit | | Stock Price | | Adjusted EBITDA |