DEF 14A of Credit Acceptance Corp
Filed Apr 28, 2026 · FY20250000885550-26-000073
PROPOSAL #1 - ELECTION OF DIRECTORS
PROPOSAL #1 - ELECTION OF DIRECTORS
Compensation – Named Executive Officers
Compensation – Named Executive Officers The compensation for named executive officers described below primarily consists of a long-term compensation program (referred to in this Proxy Statement as the “10-year program”) that is intended to provide incentive compensation to named executive officers over a 10-year period. The 10-year program includes a base salary and equity-based incentive compensation provided pursuant to the Company’s Amended and Restated Incentive Compensation Plan (referred to in this Proxy Statement as the Incentive Plan). Compensation for named executive officers is intended to promote an ownership-driven focus by structuring the form of equity awards to align compensation with maximizing the Company’s long-term intrinsic value. The Compensation Committee believes that since our inception, the long-term share ownership of our founder, executive officers, and the Board has fostered an intense, long-term focus on maximizing intrinsic value, and that the 10-year program will solidify that focus. The restricted stock unit (“RSU”) awards granted in connection with the 10-year program are intended to provide incentive compensation for a 10-year period, and as a result, the Compensation Committee generally does not expect to grant additional equity awards during the 10‑year period. However, the Compensation Committee retains discretion to grant additional equity compensation in light of evolving circumstances, which may include, among other things, changes in performance, responsibilities, leadership roles, market or competitive conditions, retention considerations, or other factors the Compensation Committee determines to be relevant.
Incentive Compensation
Incentive Compensation 10-Year Program: RSU Awards – The equity-based compensation portion of the 10-year program for Messrs. Booth, Busk, Martin, Mohan, Smith, and Ulatowski consists of RSU awards with 10-year vesting schedules. On December 3, 2024 (or January 14, 2025, in the case of Mr. Booth, our former Chief Executive Officer), the Compensation Committee approved awards of 106,299 RSUs to Mr. Booth, 22,583 RSUs to Mr. Martin, 20,958 RSUs to Mr. Mohan, and 28,290 RSUs to Messrs. Smith and Ulatowski. On August 1, 2025, pursuant to a delegation of authority, Mr. Booth approved an award of 4,811 RSUs to Mr. Busk. Based on the terms of individual RSU grant agreements, the RSUs will vest over a period of 10 years beginning on January 31, 2026 (or August 1, 2026 in the case of Mr. Busk), and on each of the nine subsequent anniversaries of such date based on continued employment. The 10-year RSU award to Mr. Booth was subject to (1) a time-based vesting schedule for the first four vesting years and (2) a performance-based vesting schedule for the last six vesting years, which performance metrics were not established on the date of grant. In the case of the RSU award to Mr. Booth, the Compensation Committee would have established the performance measurement criteria in the future to drive performance based on the needs of the business at that time. As the future performance measurement criteria was not established during 2025, the fair value of the RSUs subject to performance-based vesting could not be determined at the time of grant and was not recognized for accounting purposes, in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. For Messrs. Busk, Martin, Mohan, Smith, and Ulatowski, upon vesting, 75% of vested RSUs will be classified as “Base RSUs,” and 25% of vested RSUs will be classified as “Retirement RSUs.” For Mr. Booth, upon vesting, 25% of vested RSUs were classified as “Base RSUs,” and 75% of vested RSUs were classified as “Retirement RSUs.” Settlement in Common Stock will occur as follows: •Vested Base RSUs: 50% will be settled in Common Stock on the annual vesting date and 50% will be settled in Common Stock on the one-year anniversary of the vesting date. By providing for this timing of settlement for vested Base RSUs, the structure of the 10-year program is similar to that of a program with year-over-year annual grants with annual ratable vesting. •Vested Retirement RSUs: 100% will be settled in Common Stock five years after termination of employment, unless age at termination of employment is 60 years or older, in which case the settlement in Common Stock will occur two years after termination of employment. Upon his retirement on January 31, 2026, Mr. Booth forfeited the 38,809 unvested RSUs that would have been eligible to vest subject to his continuous employment over the next three years, and the opportunity to earn an additional 49,195 unvested RSUs that would have been eligible to vest subject to his continuous employment and the performance measurement criteria that would have been established by Compensation Committee for the final six years of the 10-year program. Upon their respective retirements on February 1, 2026, Messrs. Smith and Ulatowski each forfeited the 23,249 unvested RSUs that would have been eligible to vest subject to their continuous employment over the next nine years. Upon his retirement on January 22, 2026, Mr. Busk forfeited the 4,811 unvested RSUs that would have been eligible to vest subject to his continuous employment over the next ten years. We do not anticipate additional equity awards to be granted to named executive officers prior the end of the 10-year program, except in circumstances including significant changes in performance, responsibility, or role, or the appointment of new executive officers. CEO Appointment Grant – On October 25, 2025, in connection with Mr. Hedge’s appointment as our Chief Executive Officer effective November 13, 2025, the Compensation Committee approved a grant of 140,000 RSUs to Mr. Hegde, consistent with the goals of the 10-year program discussed above. Based on the terms of the RSU grant agreement, the RSUs will vest over a period of 10 years beginning on November 13, 2026, and on each of the nine subsequent anniversaries of such date based on continued employment. Upon vesting, 79% of vested RSUs will be classified as “Base RSUs,” and 21% of vested RSUs will be classified as “Retirement RSUs.” To the extent vested, settlement in Common Stock with respect to the RSUs will occur as follows: •Vested Base RSUs: 50% will be settled in Common Stock on the annual vesting date and 50% will be settled in Common Stock on the earlier of (i) the tenth anniversary of the grant date or (ii) the second anniversary of the date of Mr. Hegde’s separation from service. •Vested Retirement RSUs: 100% will be settled in Common Stock on the fifth anniversary of the date of Mr. Hegde’s separation from service, unless his age upon separation is 60 years or older, in which case the settlement in Common Stock will occur two years after such separation from service. The allocation between short- and long-term incentives for the named executive officers was determined based on the discretion of the Compensation Committee. The long-term incentive program is also expected to be in lieu of annual cash incentives except in circumstances including significant changes in performance, responsibility, or role. The Compensation Committee believes that the 10-year program appropriately aligns the compensation of our named executive officers with the interests of shareholders for the following reasons: •Equity compensation is granted up front in lieu of what might have been granted annually over the course of 10 years. The up-front grant of equity compensation strengthens the culture of long-term ownership that has been so important to our historical success, while at the same time incorporating a vesting and settlement schedule for Base RSUs that is similar to the vesting and settlement schedule that would have applied under a program with annual equity grants. •The amount of compensation received from the RSU awards will be proportionate to the amount of shareholder wealth created, as measured by changes in our share price over the long-term vesting and settlement periods of the awards. •Vesting conditions for the RSU awards are long-term in nature, which will incentivize our named executive officers to take actions that will maximize shareholder value over the long term instead of being distracted by shorter term incentives and considerations. •The delayed settlement of the Retirement RSUs will result in our named executed officers having meaningful share ownership for years after their retirement, which we expect will provide additional motivation for them to take actions that ensure the long-term success of the Company. Bonuses. The Company may, at its discretion, award one-time cash bonuses to named executive officers in connection with specific circumstances or achievements. The Compensation Committee approved a one-time retention bonus of $1,000,000 for Mr. Mohan in recognition of the competitive market for executive services in his role and the needs of our business, and a one-time signing bonus of $500,000 for Mr. Hegde in connection with his appointment as Chief Executive Officer. Pursuant to a delegation of authority, Mr. Booth approved a cash bonus of $746,667 for Mr. Busk in recognition of his partial-year service as an executive officer and to address the timing of his 10-year RSU grant, which was awarded subsequent to the annual grants to other executive officers.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth information concerning the compensation awarded to, earned by, or paid to our named executive officers for the fiscal years indicated.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) (a) | Stock Awards ($) (b) | All Other Compensation ($) (c) | Total ($) | | Vinayak R. Hegde | 2025 | $147,671 | $500,000 | $61,633,600 | $286,376 | $62,567,647 | | Chief Executive Officer and | | | | | | | | President (d)(e) | | | | | | | | Kenneth S. Booth | 2025 | $1,017,808 | $— | $26,380,906 | $17,500 | $27,416,214 | | Former Chief Executive Officer and | 2024 | 1,000,000 | — | — | 18,553 | 1,018,553 | | President (d) | 2023 | 1,000,000 | — | — | 16,500 | 1,016,500 | | Douglas W. Busk | 2025 | $514,247 | $746,667 | $2,152,971 | $18,458 | $3,432,343 | | Former Chief Treasury Officer | 2024 | 640,000 | — | — | 18,388 | 658,388 | | | 2023 | 640,000 | — | — | 17,798 | 657,798 | | Jay D. Martin | 2025 | $605,137 | $— | $— | $18,321 | $623,458 | | Chief Financial Officer (d)(e) | 2024 | 515,411 | — | 11,209,392 | 18,227 | 11,743,030 | | Ravi Mohan | 2025 | $733,562 | $1,000,000 | $— | $18,321 | $1,751,883 | | Chief Technology Officer | | | | | | | | Arthur L. Smith | 2025 | $762,329 | $— | $— | $18,357 | $780,686 | | Former Chief Analytics Officer | 2024 | 700,000 | — | 13,633,234 | 18,237 | 14,351,471 | | | 2023 | 700,000 | — | — | 17,819 | 717,819 | | Daniel A. Ulatowski | 2025 | $762,329 | $— | $— | $18,543 | $780,872 | | Former Chief Sales Officer | 2024 | 700,000 | — | 13,633,234 | 18,241 | 14,351,475 | | | 2023 | 700,000 | — | — | 17,798 | 717,798 |
Summary Compensation Table
(a)The amounts reported in this column consist of the one-time cash bonuses described in the Compensation Discussion and Analysis section of this Proxy Statement. (b)The amounts reported in this column reflect the grant date fair value of stock awards determined in accordance with FASB ASC Topic 718 using the closing market price of Common Stock reported on Nasdaq as of the grant date of the applicable award. This column includes 140,000 RSUs granted to Mr. Hegde on November 13, 2025 in connection with his appointment as Chief Executive Officer; 57,104 time-based RSUs granted to Mr. Booth on January 14, 2025; 4,811 RSUs granted to Mr. Busk on August 1, 2025 in connection with his transition from Chief Treasury Officer to Vice President, Business Development; 22,583 RSUs granted to Mr. Martin on December 3, 2024; 600 promotion RSUs granted to Mr. Martin on January 23, 2024; and 28,290 RSUs granted to each of Messrs. Smith and Ulatowski on December 3, 2024. The RSUs granted to each named executive officer are intended to provide incentive compensation for a 10-year period, and as a result, the Compensation Committee generally does not expect to grant additional equity awards during the 10‑year period covered by these awards. However, the Compensation Committee retains discretion to grant additional equity compensation in light of evolving circumstances, which may include, among other things, changes in performance, responsibilities, leadership roles, market or competitive conditions, retention considerations, or other factors the Compensation Committee determines to be relevant. As discussed in the Compensation and Analysis section of this Proxy Statement, the fair value of the RSUs subject to performance-based vesting granted to Mr. Booth could not be determined during 2025 and was not recognized for accounting purposes. (c)The amounts reported in this column for fiscal year 2025 consist of the following: i.$86,685 in director fees paid to Mr. Hegde in 2025 in connection with his annual retainer for his service as a director and 410 RSUs granted to Mr. Hegde on June 4, 2025 in connection with the annual equity award for his service as a director prior to his appointment as Chief Executive Officer; ii.$17,500 for each of Messrs. Booth, Busk, Martin, Mohan, Smith, and Ulatowski in Company matching contributions under the Credit Acceptance Corporation 401(k) Profit Sharing Plan; iii.$821 for each of Messrs. Busk, Martin, Mohan, Smith, and Ulatowski under the Credit Acceptance Corporation Profit Sharing Variable Compensation Program, which is a broad-based program designed to reward team members except the Chief Executive Officer on a quarterly basis in an amount based on Company profitability; and iv.$137 for Mr. Busk, $36 for Mr. Smith, and $222 for Mr. Ulatowski in employee reimbursements during the year for the payment of taxes on service or other awards. (d)Mr. Booth served as the Company’s principal executive officer and principal financial officer in 2023. Mr. Booth ceased to serve as the Company’s principal financial officer when Mr. Martin assumed the role effective January 23, 2024. Mr. Booth ceased to serve as the Company’s principal executive officer when Mr. Hegde assumed the role effective November 13, 2025. Mr. Hegde no longer earned compensation for his service on the Board effective upon his appointment as Chief Executive Officer. (e)Mr. Hegde first became a named executive officer of the Company in 2025, and Mr. Martin first became a named executive officer of the Company in 2024.
2025 GRANTS OF PLAN-BASED AWARDS
2025 GRANTS OF PLAN-BASED AWARDS The following table sets forth information concerning each grant of a plan-based award made to our named executive officers in 2025.
2025 Grants of Plan-Based Awards
2025 Grants of Plan-Based Awards
2025 Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Equity Incentive Awards (a) | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Value of Stock Awards ($) | | Name | Grant Date | Approval Date | Target (#) | Maximum (#) | | | | Vinayak R. Hegde | 11/13/2025 | 10/25/2025 | — | — | 140,000 | $61,633,600 | | Vinayak R. Hegde (b) | 6/4/2025 | 6/4/2025 | — | — | 410 | 199,691 | | Kenneth S. Booth (c) | 1/14/2025 | 1/14/2025 | — | — | 57,104 | 26,380,906 | | Douglas W. Busk (d) | 8/1/2025 | 1/30/2025 | — | — | 4,811 | 2,152,971 |
2025 Grants of Plan-Based Awards
(a) Our named executive officers’ equity incentive awards do not have a formal threshold award. (b) Director grant of 410 RSUs made in connection with Mr. Hegde’s service on the Board and prior to Mr. Hegde’s appointment as Chief Executive Officer. Mr. Hegde no longer earned compensation for his service on the Board effective upon his appointment as Chief Executive Officer. (c) Mr. Booth forfeited 38,809 unvested RSUs upon his retirement on January 31, 2026. The remaining 18,295 RSUs that were unvested as of December 31, 2025 vested in the ordinary course in 2026 in accordance with the terms of the RSU grant agreement. (d) Mr. Busk forfeited 4,811 unvested RSUs upon his retirement on January 22, 2026.
OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR-END The following table provides information with respect to the stock options and unvested RSUs held by our named executive officers as of December 31, 2025.
2025 Outstanding Equity Awards at Fiscal Year-End
2025 Outstanding Equity Awards at Fiscal Year-End
2025 Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) (a) | Market Value of Shares or Units of Stock That Have Not Vested ($) (b) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (a) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (b) | | Vinayak R. Hegde (c) | 10,000 | $— | $394.79 | 5/3/2031 | 140,471 | $62,293,270 | — | $— | | Kenneth S. Booth (d) (e) | 110,000 | — | 390.39 | 1/31/2028 | 57,104 | 25,323,340 | — | — | | Kenneth S. Booth | 46,000 | — | 333.94 | 12/30/2026 | — | — | — | — | | Douglas W. Busk (f) | 29,700 | — | 333.94 | 12/30/2026 | 4,811 | 2,133,486 | — | — | | Jay D. Martin (f) | 19,500 | — | 333.94 | 12/30/2026 | 22,583 | 10,014,657 | — | — | | Jay D. Martin | 2,250 | — | 390.39 | 4/28/2027 | — | — | — | — | | Ravi Mohan (f) (g) | 12,000 | 4,000 | 424.12 | 10/24/2028 | 23,458 | 10,402,685 | — | — | | Arthur L. Smith (f) | 37,500 | — | 333.94 | 12/30/2026 | 28,290 | 12,545,483 | — | — | | Daniel A. Ulatowski (f) | 33,000 | — | 333.94 | 12/30/2026 | 28,290 | 12,545,483 | — | — |
2025 Outstanding Equity Awards at Fiscal Year-End
(a)Represents RSUs granted under the Incentive Plan. Mr. Booth forfeited 38,809 unvested RSUs upon his retirement on January 31, 2026. Messrs. Smith and Ulatowski both forfeited 23,249 RSUs upon their retirements on February 1, 2026. The remaining time-based RSUs that were unvested as of December 31, 2025 held by Messrs. Booth, Smith, and Ulatowski vested in the ordinary course in 2026 in accordance with their respective RSU grant agreements. Mr. Busk forfeited 4,811 unvested RSUs upon his retirement on January 22, 2026. (b)Value is equal to the closing market price reported on Nasdaq of $443.46 per share as of December 31, 2025, multiplied by the number of unvested RSUs held. (c)RSUs vest over a period of 10 years beginning on November 13, 2026, and on each of the nine subsequent anniversaries of such date, and are settled in Common Stock upon vesting, upon the earlier of (i) the tenth anniversary of the grant date or (ii) second anniversary of the separation date from service, or at some point after Mr. Hegde’s retirement from the Company, based on the terms of the RSU grant agreement. (d)The option expiration date of January 31, 2028 is two years after the date of Mr. Booth’s retirement as an officer and employee of the Company on January 31, 2026, and reflects an acceleration (shortening) of the previous expiration date pursuant to the terms of the stock option agreement in the event of a termination. (e)Includes 57,104 RSUs that vest over a period of four years beginning on January 31, 2026, and on each of the three subsequent anniversaries of such date. RSUs are settled in Common Stock upon vesting, one year after vesting, or at some point after the individual’s retirement from the Company, based on the terms of the RSU grant agreement. (f)RSUs vest over a period of 10 years beginning January 31, 2026 for Messrs. Martin, Mohan, Smith, and Ulatowski, and beginning August 1, 2026 for Mr. Busk, and on each of the nine subsequent anniversaries of such date, subject in each case to the individual’s continuous employment. RSUs are settled in Common Stock upon vesting, one year after vesting, or at some point after the individual’s retirement from the Company, based on the terms of the RSU grant agreement. In addition, a portion of Mr. Mohan’s RSUs vest and settle in Common Stock in equal annual installments over the period of four years that began October 24, 2023. (g)Stock options vest and become exercisable in four equal annual installments beginning on October 24, 2023, the first anniversary of the date on which the options were granted by the Board.
2025 OPTION EXERCISES AND STOCK VESTED
2025 OPTION EXERCISES AND STOCK VESTED The following table provides information with respect to shares acquired on option exercising or vesting by our named executive officers during 2025.
2025 Option Exercises and Stock Vested
2025 Option Exercises and Stock Vested
2025 Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (a) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (b) | | Vinayak R. Hegde (c) | — | $— | 31 | $16,143 | | Kenneth S. Booth | 4,000 | 690,600 | — | — | | Douglas W. Busk | 8,800 | 1,490,303 | — | — | | Jay D. Martin | — | — | 600 | 314,484 | | Ravi Mohan | — | — | 2,500 | 1,266,400 | | Daniel A. Ulatowski | 17,000 | 3,009,116 | — | — |
2025 Option Exercises and Stock Vested
(a) The value realized upon exercise of stock options is calculated by subtracting the stock option exercise price from the fair market value (sale price) on the exercise date, and multiplying the difference by the number of shares. (b) The amounts are calculated based on the closing price reported on Nasdaq as of the date vested, or the business day preceding the scheduled vesting date if the scheduled vesting date is a weekend or holiday. (c) Vested stock awards represent RSUs granted for service on the Board in prior years.
2025 NONQUALIFIED DEFERRED COMPENSATION
2025 NONQUALIFIED DEFERRED COMPENSATION
2025 Nonqualified Deferred Compensation
2025 Nonqualified Deferred Compensation
2025 Nonqualified Deferred Compensation
| Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) (a) | Aggregate Earnings in Last Fiscal Year ($) (b) | Aggregate Withdrawals / Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) | | Vinayak R. Hegde | $— | $37,694,100 | $— | $— | $37,694,100 | | Kenneth S. Booth | — | 22,289,187 | — | — | 22,289,187 | | Douglas W. Busk | — | 1,333,262 | — | — | 1,333,262 | | Jay D. Martin | — | — | (366,974) | — | 6,259,161 | | Ravi Mohan | — | — | (362,024) | — | 6,174,737 | | Arthur L. Smith | — | — | (459,713) | — | 7,840,927 | | Daniel A. Ulatowski | — | — | (459,713) | — | 7,840,927 |
2025 Nonqualified Deferred Compensation
(a)The amounts relate to a subset of the RSUs granted to Messrs. Hegde, Booth, and Busk under the Incentive Plan during 2025, which, under the terms of the grants, will settle in Common Stock on a date that is later than the date on which the RSUs vest (as described in the Compensation Discussion and Analysis section of this Proxy Statement). The reported amount of contributions for each individual is calculated as the number of RSUs awarded to such individual with a delayed settlement date, multiplied by the closing market price of Common Stock reported on Nasdaq of $443.46 per share as of December 31, 2025. These amounts are included in, and are not in addition to, the amounts disclosed in the “Stock Awards” column of the Summary Compensation Table and are disclosed in this table solely because of the awards’ delayed settlement dates. (b)The amounts relate to RSUs granted under the Incentive Plan prior to December 31, 2024, which RSUs, under the terms of the grants, are settled in shares on a date that is later than the date on which they vest. The reported amount of aggregate earnings for each individual is calculated as the number of RSUs held by such individual as of December 31, 2024 multiplied by the difference between the closing market price of Common Stock reported on Nasdaq of $443.46 per share as of December 31, 2025 and the closing market price of Common Stock reported on Nasdaq of $469.46 per share as of December 31, 2024.
POTENTIAL PAYMENTS ON TERMINATION/CHANGE IN CONTROL
POTENTIAL PAYMENTS ON TERMINATION/CHANGE IN CONTROL None of our named executive officers, with the exception of our Chief Executive Officer, has an individual agreement with us providing for cash severance payments or benefits continuation on any termination of employment, including a termination prior to or following a change in control. On October 27, 2025, the Company entered into an executive severance agreement (the “Agreement”) with Mr. Hegde, which became effective in connection with his appointment as Chief Executive Officer. The Agreement provides for certain severance and change in control benefits as described below. If the employment of Mr. Hegde is terminated either (i) by Mr. Hegde for “Good Reason” or (ii) by the Company without “Cause,” in each case as more specifically defined in the Agreement, Mr. Hegde will receive the following benefits assuming he complies with the terms of the Agreement, including proper and timely execution of the general release: •a lump sum payment equal to an amount equal to one times Mr. Hegde’s annual base salary (determined immediately prior to any reduction that forms the basis for Good Reason), payable 60 days following the separation date, subject to applicable tax withholdings; •a lump sum cash payment equal to twelve months of the cost of medical, dental, and vision benefit premiums for Mr. Hegde and his eligible dependents under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), based on his then-current group health insurance coverage, payable 60 days after the separation date, subject to applicable tax withholdings; and •accelerated vesting of Mr. Hegde’s then-outstanding compensatory equity awards as to the number of shares that would have vested in the ordinary course during (i) the one-year period following the separation date if the qualifying termination occurs outside of the change in control protection period or (ii) the three-year period following the separation date if the qualifying termination occurs within the change in control protection period, with such vesting as of the separation date. Estimated Payments. The following table sets forth the potential amounts payable to Mr. Hegde in the event of a termination by the Company without Cause or by Mr. Hegde for Good Reason, with respect to accelerated equity, cash severance, and benefits, as of December 31, 2025:
POTENTIAL PAYMENTS ON TERMINATION/CHANGE IN CONTROL
| | Estimated Payments | | | | | Name | Unvested Restricted Stock Units (a) | Cash Severance | Benefits | Total | | Vinayak R. Hegde | $6,208,440 | $1,100,000 | $10,589 | $7,319,029 |
POTENTIAL PAYMENTS ON TERMINATION/CHANGE IN CONTROL
(a)The amount reported is calculated based on the number of unvested RSUs that would vest over the next year, multiplied by the closing market price reported on Nasdaq of $443.46 per share as of December 31, 2025, assuming the restrictions applicable to granted RSUs lapse and all other terms and conditions are deemed to have been satisfied pursuant to the Incentive Plan and the applicable award agreement. Treatment of Equity Upon Termination of Employment. If a named executive officer other than our Chief Executive Officer terminates employment for any reason prior to the end of a vesting period for stock option or RSU awards held by that named executive officer, that named executive officer’s unvested stock options or unvested RSU awards are forfeited. The Compensation Committee may, as it deems appropriate, waive or change the remaining restrictions or add additional restrictions with respect to any stock option or RSU award that would otherwise be forfeited. Treatment of Equity Upon a Change in Control. In the event of a change in control, outstanding equity awards, including option awards that are assumed or substituted in connection with a change in control, will become vested and exercisable upon a termination without cause or resignation for good reason during the 24-month period following the change in control (i.e., “double-trigger vesting”), unless otherwise provided by the applicable award agreement. The RSU awards granted pursuant to the 10-year program provide that, if the RSUs are assumed or substituted by an acquiror or a successor in connection with a change in control, the award will vest with respect to the amount of RSUs that would have vested over the next three vesting dates provided by the award following the date of termination as if the named executive officer had remained employed or, if less, the remaining unvested number of RSUs subject to the award based on a qualifying termination of employment following a change in control. Outstanding awards that are not assumed or substituted by an acquiror or successor in connection with a change in control will become fully vested and exercisable immediately upon the occurrence of the change in control. Notwithstanding the foregoing, in the event of a change in control, the Compensation Committee may, in its discretion, provide that each option subject to an outstanding stock option award will be cancelled in exchange for the excess of the per share transaction price over the option exercise price (spread value) upon the occurrence of a change in control. Estimated Payments. The following table sets forth the potential amounts payable to our named executive officers in the event of a change in control with respect to stock option and RSU awards held by our named executive officers and, in the case of Mr. Hegde, with respect to RSU awards, cash severance, and benefits as of December 31, 2025.
POTENTIAL PAYMENTS ON TERMINATION/CHANGE IN CONTROL
| | Estimated Payments | | | | | | Name | Unvested Stock Options ($) (a) | Unvested Restricted Stock Units (b) | Cash Severance | Benefits | Total | | Vinayak R. Hegde | $— | $18,625,320 | $1,100,000 | $10,589 | $19,735,909 | | Kenneth S. Booth | — | 20,452,375 | — | — | 20,452,375 | | Douglas W. Busk | — | 937,918 | — | — | 937,918 | | Jay D. Martin | — | 4,382,715 | — | — | 4,382,715 | | Ravi Mohan | 77,360 | 2,426,613 | — | — | 2,503,973 | | Arthur L. Smith | — | 5,495,356 | — | — | 5,495,356 | | Daniel A. Ulatowski | — | 5,495,356 | — | — | 5,495,356 |
POTENTIAL PAYMENTS ON TERMINATION/CHANGE IN CONTROL
(a)The amounts reported are calculated based on the number of unvested stock options held by each named executive officer, multiplied by the difference between the closing market price reported on Nasdaq of $443.46 per share as of December 31, 2025 and the exercise price of the stock options, assuming that one of the circumstances described above resulting in accelerated vesting occurred on such date. No value is reported when the exercise price of the stock options is higher than the closing market price reported on Nasdaq of $443.46 per share as of December 31, 2025. (b)The amount reported is calculated based on the number of unvested RSUs that would vest over the next three years for the named executive officer, multiplied by the closing market price reported on Nasdaq of $443.46 per share as of December 31, 2025, assuming the restrictions applicable to the RSUs lapse and all other terms and conditions are deemed to have been satisfied pursuant to the Incentive Plan and applicable award agreement. Effective January 31, 2026, Mr. Booth forfeited 38,809 unvested RSUs upon his retirement from the Company. Effective January 22, 2026, Mr. Busk forfeited 4,811 unvested RSUs upon his retirement from the Company. Effective February 1, 2026, each of Messrs. Smith and Ulatowski forfeited 23,249 unvested RSUs upon his retirement from the Company. Advisory Agreements. Each of Mr. Smith and Mr. Ulatowski has entered into a separation and advisory agreement (each, an “Advisory Agreement”) with the Company, pursuant to which the former executive agreed to perform advisory services as an independent contractor at the request of the Company for a six-month period (commencing on February 1, 2026 and ending on July 31, 2026) following the executive’s retirement date. Pursuant to the respective Advisory Agreements, which contain a general release of claims, Mr. Smith will receive a monthly advisory fee equal to $66,758.01, and Mr. Ulatowski will receive a monthly advisory fee equal to $64,166.67.
2025 CHIEF EXECUTIVE OFFICER PAY RATIO
2025 CHIEF EXECUTIVE OFFICER PAY RATIO The following table provides information with respect to the ratio of 2025 total compensation of our Chief Executive Officer serving in 2025 to that of our median team member.
2025 CHIEF EXECUTIVE OFFICER PAY RATIO
| | 2025 Total Compensation | | Chief Executive Officer (a) | $63,519,976 | | Median Team Member (a)(b) | $99,098 | | Ratio of Chief Executive Officer to Median Team Member Annual Total Compensation | 641:1 |
2025 CHIEF EXECUTIVE OFFICER PAY RATIO
(a)Annual total compensation was calculated consistent with the disclosure requirements for annual compensation in the Summary Compensation Table with the exception of the base salary of the Chief Executive Officer, which was annualized. Pursuant to SEC rules, for purposes of this pay ratio disclosure, we calculated the annual total compensation of our Chief Executive Officer by reference to Mr. Hegde, our Chief Executive Officer serving as of December 31, 2025. Since Mr. Hegde was appointed as our Chief Executive Officer effective November 13, 2025, for purposes of this pay ratio disclosure, we calculated Mr. Hegde’s annual total compensation by adding his annualized base salary of $1,100,000 to each other non-base salary element disclosed in the Summary Compensation Table for Mr. Hegde for 2025. This calculation resulted in the assumed annual total compensation of $63,519,976 for Mr. Hegde in 2025 for purposes of this pay ratio disclosure. Annual total compensation includes $61,633,600 related to the grant date fair value of an equity award in connection with Mr. Hegde’s appointment as Chief Executive Officer that is intended to provide incentive compensation for a 10-year period, and as a result, the Compensation Committee generally does not expect to grant additional equity awards during the 10‑year period covered by this award. However, the Compensation Committee retains discretion to grant additional equity compensation in light of evolving circumstances, which may include, among other things, changes in performance, responsibilities, leadership roles, market or competitive conditions, retention considerations, or other factors the Compensation Committee determines to be relevant. Excluding this grant, the Chief Executive Officer’s 2025 annual total compensation would have been $1,886,376, and the ratio of Chief Executive Officer to median team member annual total compensation would have been 19:1. (b)We identified our median team member as of December 31, 2025 by examining 2025 W-2 gross wages for all team members, excluding our Chief Executive Officer, who were employed by us as of December 31, 2025. The population of team members examined included full-time and part-time team members, including those hired during 2025. We believe W-2 gross wages is a consistently applied compensation measure that reasonably reflects the annual total compensation of our team members. We believe that the pay ratio disclosed above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions, and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies.
2025 DIRECTOR COMPENSATION
2025 DIRECTOR COMPENSATION Our non-employee directors are eligible to receive the following: •an annual retainer of $100,000 payable quarterly in arrears; •an annual equity award with a value of $200,000 in the form of RSUs granted pursuant to the Incentive Plan; and •business-related travel expenses. In 2025, Ms. Flanagan and Messrs. Quinn, Tryforos, and Vassalluzzo received quarterly payments of the annual retainer in the amount of $25,000. Mr. Hegde received quarterly payments of the annual retainer in the amount of $25,000 for his service during the period January 1, 2025 through September 30, 2025 and a prorated retainer payment for his service during the period October 1, 2025 through October 25, 2025 following his appointment as Chief Executive Officer on October 25, 2025. In 2025, the Company both paid directly and reimbursed Ms. Flanagan and Messrs. Hegde, Quinn, Tryforos, and Vassalluzzo for certain business-related travel expenses in connection with their service on the Board. On June 4, 2025, the Compensation Committee approved awards of 410 RSUs to Ms. Flanagan and Messrs. Hegde, Quinn, Tryforos, and Vassalluzzo in connection with the annual equity award for their service as directors. The RSUs will vest and be settled in Common Stock in equal annual installments over a period of three years beginning on the first anniversary of the applicable grant date, subject to continuous service through the relevant vesting date. The following table sets forth certain information regarding the compensation earned during 2025 by each non-employee director who served on the Board in 2025. Upon his appointment as Chief Executive Officer, Mr. Hegde no longer received compensation for his services as a member of the Board. All of Mr. Hegde’s compensation in respect of 2025 is shown in the Summary Compensation Table above.
2025 Director Compensation
2025 Director Compensation
2025 Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Equity Awards ($) (a)(b) | Total ($) | | Glenda J. Flanagan | $100,000 | $199,691 | $299,691 | | Sean E. Quinn | 100,000 | 199,691 | 299,691 | | Thomas N. Tryforos | 100,000 | 199,691 | 299,691 | | Scott J. Vassalluzzo | 100,000 | 199,691 | 299,691 |
2025 Director Compensation
(a)The amounts reported in this column represent the aggregate grant fair value of any stock awards granted during the fiscal year ended December 31, 2025, as computed in accordance with FASB ASC Topic 718 using the closing market price of Common Stock reported on Nasdaq as of the grant date of the awards. The table includes 410 RSUs granted by the Compensation Committee to Ms. Flanagan and Messrs. Quinn, Tryforos, and Vassalluzzo on June 4, 2025 as incentive compensation in connection with their service as directors. (b)As of December 31, 2025, Ms. Flanagan held 1,500 vested RSUs and 736 unvested RSUs; Messrs. Tryforos and Vassalluzzo held 845 unvested RSUs; and Mr. Quinn held 815 unvested RSUs.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K (the “PVP Requirements”), we are providing the following information about the relationship between compensation reported in the summary compensation table (“SCT”) and compensation actually paid (“CAP”) as calculated under the PVP Requirements to our principal executive officer (“PEO”) and our other named executive officers (“NEOs”) and certain financial performance measures.
PAY VERSUS PERFORMANCE
| | Vinayak R. Hegde | | Kenneth S. Booth | | Brett A. Roberts | | | | Value of Initial Fixed $100 Investment Based on: (d) | | | | | Year | SCT Total for PEO ($) (a) | CAP to PEO ($) (b) | SCT Total for PEO ($) (a) | CAP to PEO ($) (b) | SCT Total for PEO ($) (a) | CAP to PEO ($) (b) | Average SCT Total for NEOs ($) (c) | CAP to NEOs ($) (b) (c) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) | GAAP Net Income ($ in millions) | Economic Profit ($ in millions) (e) | | 2025 | $62,567,647 | $62,851,930 | $27,416,214 | $26,271,243 | n/a | n/a | $1,473,848 | $901,342 | $128.05 | $197.82 | $423.9 | $173.3 | | 2024 | n/a | n/a | 1,018,553 | (2,289,737) | n/a | n/a | 13,133,539 | 11,924,232 | 106.09 | 198.91 | 247.9 | 206.8 | | 2023 | n/a | n/a | 1,016,500 | 3,552,673 | n/a | n/a | 677,825 | 1,415,826 | 120.40 | 152.34 | 286.1 | 260.5 | | 2022 | n/a | n/a | 1,015,250 | (22,614,425) | n/a | n/a | 4,418,311 | 1,709,981 | 107.24 | 125.51 | 535.8 | 476.6 | | 2021 | n/a | n/a | 30,526,345 | 59,123,384 | $359,911 | (46,514,489) | 10,101,413 | 15,536,684 | 155.47 | 148.00 | 958.3 | 574.1 |
PAY VERSUS PERFORMANCE
(a)During 2025, our PEOs were Mr. Booth (until his transition to Executive Board Member effective November 13, 2025) and Mr. Hegde (beginning on November 13, 2025). During 2024, 2023, and 2022, our PEO was Mr. Booth. During 2021, our PEOs were Mr. Roberts (until his retirement effective May 3, 2021) and Mr. Booth (beginning on May 3, 2021). (b)Compensation actually paid, as computed under SEC rules, requires starting with the “Total” column of the SCT and making certain adjustments to reflect adjusted values to equity awards based on stock prices as of year end or the relevant vesting dates and, in the case of stock option awards, various other accounting valuation assumptions. The following tables reflect the adjustments made to SCT total compensation to compute CAP for our PEO and average CAP for our non-PEO NEOs:
PAY VERSUS PERFORMANCE
| | PEOs | | | | | | | | | 2025 (Hegde) | 2025 (Booth) | 2024 | 2023 | 2022 | 2021 (Booth) | 2021 (Roberts) | | Compensation reported in the SCT | $62,567,647 | $27,416,214 | $1,018,553 | $1,016,500 | $1,015,250 | $30,526,345 | $359,911 | | Adjustments related to stock options | | | | | | | | | Deduction for amounts reported in the “Option Awards” column in the SCT | — | — | — | — | — | (29,623,631) | — | | Increase for fair value of awards granted during year that remain unvested as of year end | — | — | — | — | — | 53,755,806 | — | | Increase for fair value of awards granted during year that vested during year | — | — | — | — | — | 4,392,539 | — | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | — | — | (1,601,679) | 2,890,227 | (17,456,114) | — | — | | Deduction for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during year | (148,648) | (87,405) | (1,706,611) | (354,054) | (6,173,561) | — | — | | Adjustments related to RSUs and restricted shares | | | | | | | | | Deduction for amounts reported in the “Stock Awards” column in the SCT (1) | (61,833,291) | (26,380,906) | | — | — | — | — | | Increase for fair value of awards granted during year that remain unvested as of year end | 62,266,219 | 25,323,340 | | — | — | — | — | | Deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | (1,586) | — | — | — | — | — | — | | Increase for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during year | 1,589 | — | — | — | — | 72,325 | 1,585,200 | | Deduction of fair value of awards granted prior to year that were forfeited during year | — | — | — | — | — | — | (48,459,600) | | Compensation actually paid | $62,851,930 | $26,271,243 | $(2,289,737) | $3,552,673 | $(22,614,425) | $59,123,384 | $(46,514,489) |
PAY VERSUS PERFORMANCE
(1) The 2025 amount reported for Mr. Hegde includes 410 RSUs granted on June 4, 2025 in connection with the annual equity award for his service as a director prior to his appointment as Chief Executive Officer, which was reported in the “All Other Compensation” column in the SCT.
PAY VERSUS PERFORMANCE
| | Non-PEO NEOs | | | | | | | 2025 | 2024 | 2023 | 2022 | 2021 | | Compensation reported in the SCT | $1,473,848 | $13,133,539 | $677,825 | $4,418,311 | $10,101,413 | | Adjustments related to stock options | | | | | | | Deduction for amounts reported in the “Option Awards” column in the SCT | — | — | — | (1,885,347) | (9,403,018) | | Increase for fair value of awards granted during year that remain unvested as of year end | — | — | — | 1,630,624 | 10,463,258 | | Increase for fair value of awards granted during year that vested during year | — | — | — | — | 4,304,688 | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | (31,263) | (9,424) | 499,504 | (1,554,222) | — | | Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during year | (28,829) | (867,963) | 166,584 | (916,535) | — | | Adjustments related to RSUs | | | | | | | Deduction for amounts reported in the “Stock Awards” column in the SCT | (430,594) | (12,496,450) | — | (2,117,650) | — | | Increase for fair value of awards granted during year that remain unvested as of year end | 426,697 | 12,164,530 | — | 2,134,800 | — | | Increase/deduction for change in fair value from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | (533,629) | — | 87,495 | — | — | | Increase/deduction for change in fair value from prior year-end to vesting date of awards granted prior to year that vested during year | 25,112 | — | (15,582) | — | 70,343 | | Compensation actually paid | $901,342 | $11,924,232 | $1,415,826 | $1,709,981 | $15,536,684 |
PAY VERSUS PERFORMANCE
(c)Our non-PEO NEOs consisted of the following individuals: 2025: Messrs. Busk, Martin, Mohan, Smith, and Ulatowski 2024: Messrs. Lum, Martin, Smith, and Ulatowski 2023: Messrs. Busk, Rostami, Smith, and Ulatowski 2022: Messrs. Mohan, Rostami, and Smith and Ms. Rummler 2021: Charles A. Pearce and Messrs. Busk, Smith, and Ulatowski (d)Assumes that $100 was invested in Common Stock and in a market index representing our peer group on December 31, 2020, and assumes the reinvestment of dividends. The peer group market index used for this purpose is the Dow Jones U.S. Financial Services Index. (e)Economic profit is an important financial performance measure used by the Company to evaluate business decisions and strategies and our financial performance and is used to link certain compensation actually paid to our non-PEO NEOs to Company performance (company-selected measure). The following is a reconciliation of GAAP net income to economic profit:
PAY VERSUS PERFORMANCE
| (In millions) | For the Years Ended December 31, | | | | | | | 2025 | 2024 | 2023 | 2022 | 2021 | | GAAP net income | $423.9 | $247.9 | $286.1 | $535.8 | $958.3 | | Floating yield adjustment (after-tax) | (470.9) | (420.4) | (310.1) | (196.5) | (148.5) | | GAAP provision for credit losses (after-tax) | 465.4 | 627.3 | 566.9 | 370.7 | 6.5 | | Loss on sale of building (after-tax) | — | 18.3 | — | — | — | | Contingent loss (after-tax) (1) | 55.6 | 6.5 | — | — | — | | Senior notes adjustment (after-tax) | — | — | (4.2) | (2.1) | (2.1) | | Income tax adjustment | 3.0 | 5.8 | (3.1) | 12.2 | 12.6 | | Adjusted net income (1) | 477.0 | 485.4 | 535.6 | 720.1 | 826.8 | | Adjusted interest expense (after-tax) | 349.5 | 323.0 | 209.5 | 130.4 | 128.5 | | Adjusted net income plus interest expense (after-tax) (1) | 826.5 | 808.4 | 745.1 | 850.5 | 955.3 | | Less: cost of capital | 653.2 | 601.6 | 484.6 | 373.9 | 381.2 | | Economic profit (1) | $173.3 | $206.8 | $260.5 | $476.6 | $574.1 |
PAY VERSUS PERFORMANCE
(1) 2024 amounts have been restated to remove the effect of contingent losses recognized during the period to conform to the current presentation. Relationship between Pay and Performance. Below are graphs showing the relationship of “compensation actually paid” to our PEOs and non-PEO NEOs in 2021 through 2025 to (1) total shareholder return (TSR) of both the Company and the Dow Jones U.S. Financial Services Index, (2) the Company’s net income, and (3) the Company’s economic profit, which is our company-selected measure. Company Performance Metrics. Listed below are the financial performance measures, including our company-selected measure, which in our assessment represent the most important financial performance measures we used in 2025 to link CAP to the Company’s named executive officers to Company performance. For 2025, the Company used fewer than three financial performance metrics to link CAP to the Company’s named executive officers to Company performance.
PAY VERSUS PERFORMANCE
| Measure | Nature | Explanation | | Economic profit | Financial measure | Economic profit is a non-GAAP financial measure we use to evaluate our financial results and determine profit-sharing for team members, which is available to all team members, including named executive officers, with the exception of our Chief Executive Officer. | | Share price | Financial measure | Our RSU awards provide value proportionate to the amount of shareholder wealth created, as measured by the share price. Our stock option awards provide value only if the market price of our Common Stock increases above the exercise price of the stock options. |