DEF 14A of Kforce Inc, Mar 15, 2024

DEF 14A of Kforce Inc

Filed Mar 15, 2024 · FY20230000930420-24-000031

Open on EDGAR

  1. OUR BOARD OF DIRECTORS

    OUR BOARD OF DIRECTORS The Board currently consists of three nominees and six continuing directors. The directors are divided into three classes serving staggered three-year terms. The following table sets forth (as of the date of this filing) the names, ages and certain other information for each of our directors (including those who are nominees for election at the Annual Meeting).

  2. OUR BOARD OF DIRECTORS

    | | Name | Age | Position | Director Since | Current Term Expires | Expiration of Term for Which Nominated | Independent | Audit Comm | Comp. Comm | Nomin. Comm | Corp. Gov. Comm | | | Board of Director Nominees for Election | | | | | | | | | | | | Class III | Catherine H. Cloudman | 54 | Director | 2020 | 2024 | 2027 | ✓ | | | | | | | David L. Dunkel | 70 | Chairman | 1994 | 2024 | 2027 | | | | | | | | Mark F. Furlong | 66 | Director | 2001 | 2024 | 2027 | ✓ | | | | | | | Continuing Directors | | | | | | | | | | | | Class I | Joseph J. Liberatore | 61 | CEO Director | 2021 | 2025 | N/A | | | | | | | | Randall A. Mehl | 56 | Director | 2017 | 2025 | N/A | ✓ | | | | | | | Elaine D. Rosen | 71 | Director | 2003 | 2025 | N/A | ☑ | | | | | | Class II | Derrick D. Brooks | 50 | Director | 2021 | 2026 | N/A | ✓ | | | | | | | Ann E. Dunwoody | 71 | Director | 2016 | 2026 | N/A | ✓ | | | | | | | N. John Simmons | 68 | Director | 2014 | 2026 | N/A | ✓ | | | | |

  3. OUR BOARD OF DIRECTORS

    | Legend: | ☑ | Lead Independent Director | | Chair | | Member | | Financial Expert |

  4. OUR BOARD OF DIRECTORS

    The Class III nominees identified above have been nominated to serve as directors for a three-year term expiring at the 2027 annual meeting of shareholders. All of the nominees are currently directors of Kforce and were previously elected by our shareholders.

  5. BIOGRAPHICAL INFORMATION FOR OUR DIRECTOR NOMINEES

    BIOGRAPHICAL INFORMATION FOR OUR DIRECTOR NOMINEES The biographies for each of our director nominees are set forth below, along with a description of the experiences, qualifications, attributes or skills that caused the Nomination Committee and the Board to determine that they should serve as a director of Kforce.

  6. NOMINEES FOR ELECTION, CLASS III DIRECTORS - TERMS EXPIRE IN 2027

    NOMINEES FOR ELECTION, CLASS III DIRECTORS - TERMS EXPIRE IN 2027

  7. NOMINEES FOR ELECTION, CLASS III DIRECTORS - TERMS EXPIRE IN 2027

    | Catherine H. Cloudman | | | | | | | Ms. Cloudman is a board member and chairs the Personnel and Compensation Committees of both Hussey Seating Company, a manufacturer of telescopic and stadium seating, and Systems Engineering, an ESOP owned IT managed services provider, since 2015. Additionally, she has been a board member since 2019 of Gorham Savings Bank, a 150-year-old community bank, where she chairs the Director’s Loan Committee and the Director’s Loan Risk Committee. She is also a member of the Audit, Risk Management and Technology Committees of the bank. At the beginning of 2023, Ms. Cloudman joined the advisory board of Zachau Construction, a third-generation commercial construction firm. She also serves on the board of Waynflete School, an independent K-12 day school, where she is the President and Board Chair. Ms. Cloudman was also a board member of private equity backed Village Fertility Pharmacy until 2020. Prior to becoming a board member, she was a founder and CFO at Apothecary by Design and its successor company, Village Fertility Pharmacy, both of which are national specialty pharmacies. Ms. Cloudman is an Audit Committee financial expert. The Board believes her considerable expertise, including her experience as CFO at Apothecary by Design and its successor company, Village Fertility Pharmacy, brings unique insight to the Board concerning in-depth knowledge of various ownership structures and her entrepreneurial background, in addition to her being a CPA and management consultant, and her overall financial and strategic management expertise. | | | Director since 2020 | | Other Current Public Company Board(s): None | Kforce Board Committee(s): Audit and Corporate Governance | | Age | 54 | | | | David L. Dunkel | | | | | | | Mr. Dunkel has served as Kforce’s Chairman, CEO and director since the Firm’s incorporation in 1994 and possesses a deep and unique understanding of the Firm’s business and operations. Prior to 1994, he previously served as President and CEO of Romac-FMA, one of Kforce’s predecessors, for 14 years. Mr. Dunkel retired from his position as CEO in 2021, and entered into a part-time employment agreement to provide support, on a limited basis, to the Firm in a non-executive employee role, in addition to continuing his role as Chairman of Kforce’s Board of Directors. Due to the successful completion of the CEO transition, Mr. Dunkel’s part-time employment agreement ended effective July 31, 2023, and Mr. Dunkel has continued to serve Kforce solely as its non-executive Board Chairman. The Board believes that Mr. Dunkel’s experience, coupled with his extensive knowledge of the staffing industry, provides strong, consistent leadership. | | | Director since 1994 | | Other Current Public Company Board(s): None | | | Age | 70 | | | | Mark F. Furlong | | | | | | | Mr. Furlong has served as a director of Heska Corporation, a provider of advanced veterinary diagnostic and specialty products, from 2019 to June 2023 when it was sold, and director of Antares Capital, a provider of financing solutions for middle market, private equity-backed transactions, from 2015 to April 2023. In September 2023, he joined ALTi Global, a global wealth and asset manager specializing in alternative investments, as a Board member, member of the Human Capital and Compensation Committee and as Chair of the Audit/Risk Committee. He served as the President and CEO of BMO Harris Bank, N.A. from 2011 to 2015. Mr. Furlong also served as a director of BMO Harris Bank, N.A. and BMO Financial Corporation from 2011 to 2015. Prior to its acquisition by BMO Harris Bank, N.A. in 2011, he served as Chairman of Marshall & Ilsley Corporation from 2010, as CEO from 2007 and as President from 2004. He also served as CFO of Marshall & Ilsley Corporation from 2001 to 2004 and was formerly an audit partner with Deloitte & Touche LLP. Mr. Furlong is an Audit Committee financial expert. The Board believes his considerable expertise, including his experience as President and CEO of BMO Harris Bank, N.A., the former Chairman, President and CEO of Marshall & Ilsley Corporation and a former audit partner with Deloitte & Touche LLP, brings unique insight to the Board concerning capital allocation strategies and banking and accounting issues, in addition to his overall management and financial expertise. | | | Director since 2001 | | Other Current Public Company Board(s): None | Kforce Board Committee(s): Audit (Chair), Compensation and Corporate Governance | | Age | 66 | | |

  8. PROPOSAL 1. ELECTION OF DIRECTORS

    PROPOSAL 1. ELECTION OF DIRECTORS

  9. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

  10. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    | CLASS I DIRECTORS - TERMS EXPIRES IN 2025 | | | | Joseph J. Liberatore | | | | | | Mr. Liberatore became the Chief Executive Officer of Kforce on January 1, 2022. He joined the Board as a director in November 2021, and was elected by shareholders in April 2022. He has served as Kforce’s President since January 2013 and previously served as Corporate Secretary from February 2007 to February 2013, Chief Financial Officer from October 2004 to December 2012, Executive Vice President from July 2008 to December 2012, Senior Vice President from 2000 to July 2008, Chief Talent Officer from 2001 to 2004 and Chief Sales Officer from September 2000 to August 2001. Mr. Liberatore has served in various other roles in Kforce (and its predecessors) since he joined the Firm in 1988. The Board believes that this experience, coupled with his extensive knowledge of the staffing industry, provides strong, consistent leadership and allows him to serve as a highly effective bridge between the Board and management. In addition, in his capacity as CEO, Mr. Liberatore frequently meets with shareholders, clients and other Firm stakeholders to communicate our business and strategy and to understand their various perspectives and insights, which he is then able to relay to the Board for consideration and assessment. | | Director since 2021 | | Other Current Public Company Board(s): None | | Age | 61 | |

  11. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    | Randall A. Mehl | | | | | | | Mr. Mehl is the President and Chief Investment Officer of Stewardship Capital Advisors, LLC, which manages a family office fund focused on making investments in various technology and services sectors. In January 2024, he joined the board of KI, a furniture manufacturer. He also currently serves on the Board of Directors of two other public companies, Insperity, Inc. and ICF International, Inc., where he chairs the Human Capital Committee. Mr. Mehl previously served as Managing Director and as a partner with Baird Capital, a middle market private equity group, leading a team focused on business and technology services sectors from 2005 to 2016. From 1996 to 2005, Mr. Mehl was a senior equity research analyst with Robert W. Baird & Company, covering various areas within the technology and services universe, including staffing. Mr. Mehl has also previously served on several boards of directors of private technology and services companies, and has served on the investment committee for several private equity funds. He is an Audit Committee financial expert. Mr. Mehl brings unique insight to the Board with his domain expertise in technology services and staffing, experience in evaluating and supporting executive leadership and governance practices, and experience in evaluating, acquiring and selling services-oriented businesses. | | | Director since 2017 | | Other Current Public Company Board(s): ICF International, Inc. (NASDAQ: ICFI); Insperity, Inc. (NYSE: NSP) | Kforce Board Committee(s): Compensation (Chair), Nomination and Corporate Governance | | Age | 56 | | |

  12. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    | Elaine D. Rosen | | | | | | | Ms. Rosen has served as a director of Assurant, Inc., a provider of specialized insurance and insurance-related products and services since March 2009 and became the non-executive Chair of the Board of Directors of Assurant, Inc., in November 2010. Ms. Rosen served as the Chair of the Board of The Kresge Foundation from January 2007 up until her retirement in June 2022. Ms. Rosen serves as trustee or director of several non-profit organizations, is a past Chair of the Board of Preble Street, a homeless collaborative in Portland, Maine, and has served as a trustee of the Foundation for Maine’s Community Colleges since 2008. Ms. Rosen was a director of the Elmina B. Sewall Foundation from 2008 to 2012 and Downeast Energy Corp., a privately-held company that provides heating products and building supplies, from 2003 until its sale in April 2012. From 1975 to March 2001, Ms. Rosen held a number of positions with Unum Life Insurance Company of America, including President. Ms. Rosen has extensive experience as a senior executive in the insurance industry and as a director of several companies, including charitable organizations, particularly as the Chair of one of the largest private foundations in the country. With her background and experience as the prior Chair of the Compensation Committee of Kforce, the Board of Assurant, Inc., where she currently serves as the non-executive Chair, and as the Lead Independent Director at Kforce, she has considerable expertise in overall Board leadership, governance matters and executive compensation. | | | Director since 2003 | | Other Current Public Company Board(s): Assurant, Inc. (NYSE: AIZ) | Kforce Board Committee(s): Lead Independent Director, Corporate Governance (Chair) and Compensation | | Age | 71 | | |

  13. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    | CLASS II DIRECTORS - TERMS EXPIRES IN 2026 | | | | | Derrick D. Brooks | | | | | | | Mr. Brooks, is the Executive Vice President of Corporate and Community Development of Vinik Sports Group since 2019, and also serves as an on-field appeals officer for the National Football League. He previously served as the President of Tampa Bay Sports & Football Entertainment LLC and was the owner of the Tampa Bay Storm Arena Football Team from 2011 to 2019. Mr. Brooks served as the Managing Member of Brooks 55 Labor Enterprises, L.L.C., a full-service temporary and direct hire staffing company that provided staffing, administrative solutions and on-time labor needs, from 2006 to 2012. He also served as an NFL analyst for ESPN from 2009 to 2011. From 1995 to 2009, Mr. Brooks played for the Tampa Bay Buccaneers, was a Super Bowl Champion and a nine time All-Pro. In 2014, Mr. Brooks was inducted into the Pro Football Hall of Fame and the Capital One Academic All-America Hall of Fame and was named the 2000 Walter Payton NFL Man of the Year Award Winner. Mr. Brooks has a long history of community leadership. Among his other activities and services, Mr. Brooks is the President and Founder of the Derrick Brooks Charities, Inc. since 2003, and currently serves on the board of Brooks Debartolo Charities, Inc. since 2006. He previously served on the board of the Florida State Fair Authority from 2017 to 2022. He served as a member of the board of trustees of Florida State University from 2003 to 2011. He has also served on the boards of the Florida Department of Education Foundation from 2004 to 2010, St. Leo's University from 2007 to 2010, and the Florida Governor's Council on Physical Fitness from 2007 to 2010. | | | Director since 2021 | | Other Current Public Company Board(s): None | Kforce Board Committee(s): Nomination and Corporate Governance | | Age | 50 | | |

  14. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    | Ann E. Dunwoody | | | | | | | General (Ret.) Dunwoody was the first woman in U.S. military history to achieve the rank of four-star general. From 2008 until her retirement in 2012, she led and ran the largest global logistics command in the Army comprising 69,000 military and civilian individuals, located in all 50 states and over 140 countries with a budget of $60 billion. General (Ret.) Dunwoody served on the Board of Directors of Republic Services, Inc., L-3 Communications and was the President of First 2 Four LLC. She currently serves on the Fidelity Fixed Income Asset Allocation (FIAA) Board of Trustees, Automattic, Florida Institute of Technology and Noble Reach Foundation, a not for profit, which was formerly part of Logistics Management Institute. She authored “A Higher Standard: Leadership Strategies from the First Female Four Star General”, is a recipient of The Theodore Roosevelt NCAA award, The Ellis Island Medal of Honor, Orde National Du Merite and was West Point’s US Military Academy 2019 recipient of the Thayer Award. General (Ret.) Dunwoody brings to the Board extensive military and management experience, including managing a significant portion of the United States Army’s budget as Commanding General, U.S. Army Materiel Command. General (Ret.) Dunwoody is also certified as an NACD Governance Fellow. She has also served as a member of the Board of Directors on other publicly traded, private and not for profit companies. She is engaged in numerous charitable and civic activities, which the Board believes allows her to provide a valuable and varied perspective. | | | Director since 2016 | | Other Current Public Company Board(s): None | Kforce Board Committee(s): Nomination (Chair) and Corporate Governance | | Age | 71 | | |

  15. BIOGRAPHICAL INFORMATION FOR OUR CONTINUING DIRECTORS

    | N. John Simmons | | | | | | | Mr. Simmons is the CEO of Growth Advisors, LLC, an advisory firm for high-growth companies. He previously served as the COO and CFO of DeMert Brands, Inc., a manufacturer and distributor of haircare products. He has served on various boards of directors, including Bonds.com Group, Inc. from 2013 to 2014; Loyola University New Orleans Board of Trustees from 2009 to 2015, during which he was Chairman of the Audit Committee and an Executive Committee member; Lifestyle Family Fitness, Inc. from 2001 to 2012; Technology Research Corporation as Chairman of the Compensation Committee from 2010 to 2011 and Lead Director and Chairman of the Governance and Nominating Committee from 2009 to 2010; Medquist, Inc. as Chairman of the Audit Committee from 2005 to 2007; and SRI Surgical Express, Inc. as Lead Director, then Chairman of the Board from 2001 to 2008. Mr. Simmons’ prior experience includes service as the CEO and President of Lifestyle Family Fitness, Inc.; President of New Homes Realty, a residential real estate company; President of Quantum Capital Partners, a venture capital firm; VP and Controller of Eckerd Corporation; CFO of Checkers Drive-In Restaurants; and audit partner for KPMG Peat Marwick. Mr. Simmons is an Audit Committee financial expert. He has extensive financial, accounting, management and director experience in several different industries. As a result, the Board believes that he brings valuable insight due to his extensive and varied experiences as a chief executive officer, chief financial officer, audit partner and director. | | | Director since 2014 | | Other Current Public Company Board(s): None | Kforce Board Committee(s): Audit and Corporate Governance | | Age | 68 | | |

  16. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table shows the annual compensation components for the year ended December 31, 2023, and the aggregate outstanding stock awards as of December 31, 2023, for our directors who served on the Board during 2023, except Mr. Liberatore:

  17. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3)(4) | Total ($) | Unvested Restricted Stock (5) | Deferred Restricted Stock Units (5) | | Derrick D. Brooks | $94,250 | $140,019 | $5,346 | $239,615 | 2,538 | 4,392 | | Catherine H. Cloudman | $94,250 | $140,019 | $8,692 | $242,961 | 2,538 | 6,745 | | David L. Dunkel | $53,000 | $879,994 | $566,527 | $1,499,521 | 19,518 | 1,784 | | Ann E. Dunwoody | $109,250 | $140,019 | $6,202 | $255,471 | 2,538 | 4,392 | | Mark F. Furlong | $124,250 | $140,019 | $3,350 | $267,619 | 2,538 | — | | Randall A. Mehl | $124,250 | $140,019 | $24,256 | $288,525 | 2,538 | 17,750 | | Elaine D. Rosen | $134,250 | $140,019 | $40,317 | $314,586 | 2,538 | 28,980 | | N. John Simmons | $94,250 | $140,019 | $3,350 | $237,619 | 2,538 | — |

  18. DIRECTOR COMPENSATION

    (1)Fees earned or paid in cash consisted of: (a) annual retainer for each director of $45,000; (b) annual retainers for each committee chairperson of $15,000 and $40,000 for the Lead Independent Director; (c) quarterly fees for each quarter of board service of $5,000; and (d) quarterly fees for each quarter of committee service of $3,750. With Mr. Dunkel’s transition to sole Chairman on August 1, 2023, Mr. Dunkel received pro-rated fees related to his service on the Board of $53,000. (2)The amounts in this column represent the aggregate grant date fair value in accordance with FASB ASC 718. The amounts for all directors, except Mr. Dunkel, reflect a grant of 2,495 shares of restricted stock on May 5, 2023, with a closing stock price on that day of $56.12 and vest on April 26, 2024. Mr. Dunkel was awarded a pro-rated grant in conjunction with his transition to a sole Board Chairman role of 1,764 shares of restricted stock on August 1, 2023 with a closing stock price of $59.53, which vests on April 26, 2024. Mr. Dunkel also received a grant of 12,216 shares of restricted stock on July 31, 2023, with a closing stock price of $63.44, which was immediately vested pursuant to his part-time employment agreement. This grant was related to Mr. Dunkel’s prior service as a part-time employee and was not associated with his service as Chairman beginning August 1, 2023. (3)The amounts reported in this column for all directors, except Mr. Dunkel, represent the dollar value of dividend equivalents credited on unvested restricted stock and deferred restricted stock units in the form of additional restricted stock. (4)On July 31, 2023, Mr. Dunkel ended his part-time employment agreement with Kforce and became solely non-executive Chairman of the Board. All Other Compensation for Mr. Dunkel includes the employment compensation provided for in his part-time employment agreement through July 31, 2023, including: $204,166 in salary; $54,250 in bonus; $184,775 for deferred compensation payments and $123,336 in dividend equivalents credited on unvested restricted stock. (5)The beneficial ownership of common shares as of the Record Date for each of our directors is reported in the “Security Ownership of Certain Beneficial Owners and Management” section of this report.

  19. OUR COMPENSATION PRINCIPLES, COMPONENTS AND PRACTICES

    | What We Do | | What We Don’t Do | | | ☑ | Target Annual NEO Compensation at Market Median for Market Median Performance | ☒ | Define Market Median by Comparison to Companies Outside of our Primary Sector | | ☑ | Align Pay with Performance by Paying Higher Compensation for Above Median Performance and Lower Compensation for Below Median Performance | ☒ | Set Targets for Incentive Plans that are Easy to Attain | | ☑ | Ensure Performance-Based Compensation is the Largest Part of Total Compensation | ☒ | Provide Excessive Perquisites | | ☑ | Adhere to Minimum Levels of Financial Performance that Must be Attained to Achieve Threshold Levels Even in Adverse Economic Environments | ☒ | Allow Repricing or Cash Buyouts of Previous Equity-Based LTI Grants | | ☑ | Ensure Equity-Based LTI Compensation is a Significant Component of Performance-Based Compensation | ☒ | Allow Hedging or Pledging of Company Stock or Other Related Activities | | ☑ | Require Minimum Levels of Share Ownership | ☒ | Create New Excise Tax Gross-ups | | ☑ | Maintain a Significant Clawback Policy | ☒ | Create New or Materially Amend Executive Employment Agreements with Provisions for Severance Payouts Exceeding 1x Cash Compensation or Change in Control Severance Payouts Exceeding 2x Cash Compensation |

  20. Our Executive Compensation Philosophy and Practices

    | Ensure Equity-Based LTI Compensation is a Significant Component of Performance-Based Compensation | The Committee believes equity-based LTI compensation should be a significant component of performance-based compensation to further align our NEO’s interests with our shareholders in generating long-term shareholder returns. Equity LTIs ranged from 53% to 70% of target total performance-based compensation for our Active NEOs in 2023. We believe the opportunity to earn the designated equity LTI performance objectives motivates the achievement of higher relative TSR and drives continued improved shareholder value; it also serves to retain our executives for the long-term, given that our LTI awards have time-based vesting provisions of generally four years. |

  21. Our Executive Compensation Philosophy and Practices

    | Set Challenging Performance Objectives | We work to set difficult but attainable financial growth performance objectives for our NEOs in the context of the annual incentive plan as evidenced by the fact that threshold and target goals and objectives have not been met in every plan year. The performance objectives are structured to incentivize our NEOs to outpace market growth expectations thereby gaining market share, and improving profitability levels. In addition, threshold levels of performance for our financial measures (most namely the revenue component) require growth even in adverse economic environments where revenues may reasonably be expected to decline. This further strengthens the structure and pay for performance orientation of our NEO compensation plans. |

  22. Our Executive Compensation Philosophy and Practices

    | Elimination of Excise Tax Gross-Up | In 2009, the Committee resolved to not enter into any new employment agreements, or materially amend any existing employment agreements with its executives, that contain excise tax gross-up provisions in the event of a change-in-control event going forward. Since the Committee’s resolution, all new or amended executive employment agreements have excluded excise tax gross-up provisions. As a result, the only remaining employment agreement which continues to include excise tax gross-up provisions is for Mr. Liberatore, which was last amended in 2008. |

  23. Role of the Independent Compensation Consultant

    Role of the Independent Compensation Consultant Overall, our independent compensation consultant assists with various items, including: evaluating and providing guidance with respect to compliance with the approved compensation framework and its alignment with our performance; effectiveness of the compensation framework; benchmarking studies and analysis; and competitiveness of our executive compensation (including salary, annual incentives and long-term incentives) as compared to the market. The Committee has retained Pay Governance LLC, a national independent consulting firm (Pay Governance), to serve as the Committee’s independent compensation consultant. The Committee assessed Pay Governance’s independence based on various factors and determined Pay Governance’s engagement, and the anticipated services to be provided to the Committee, did not raise any conflicts of interest. Except for the services provided to the Committee, Pay Governance did not provide any other services to the Firm.

  24. Peer Group and Benchmarking

    Peer Group and Benchmarking The Committee uses a peer group of companies as a source for executive compensation benchmarking data and comparisons to Kforce’s executive compensation levels; insight into external compensation practices; and assistance with determining specific financial objectives for our performance-based compensation. Additionally, our peer group is used to determine annual equity LTI compensation levels based on our 3-year relative TSR performance. The Committee focuses on selecting peers that are publicly-traded professional staffing, technology solutions providers and human capital centric companies, including certain companies we consider to be our competitors. The Committee also selects peers that are similar in terms of size (as measured by revenue and market capitalization) that are in adjacent staffing markets, but may not be considered a direct business competitor. The Committee matches the median size of the peer group to Kforce by balancing a selection of both larger and smaller companies. The primary criteria for selection include customers, revenue footprint, geographical and domestic presence, talent, complexity of operating model and direct competitors. Our 2023 Peer Group consisted of the following companies:

  25. Peer Group and Benchmarking

    | ASGN Incorporated | Huron Consulting Group Inc. | Perficient Inc. | | Barrett Business Services Inc. | ICF International, Inc. | Resources Connection, Inc. | | CBIZ, Inc. | Kelly Services, Inc. | Robert Half International Inc. | | The Hackett Group, Inc. | Korn Ferry | TrueBlue, Inc. | | Heidrick & Struggles International Inc. | ManpowerGroup, Inc. | |

  26. Peer Group and Benchmarking

    For purposes of executive compensation for 2024, the Committee, with the advice of Pay Governance, recommended no change to our existing peer group. The following table shows the financial statistics for the 2023 Peer Group and includes our percentile rank among the 2023 Peer Group:

  27. Peer Group and Benchmarking

    | (in thousands) | Revenue | Market Capitalization | | 25th Percentile | $1,069 | $637 | | Median | $1,711 | $1,437 | | 75th Percentile | $3,716 | $2,524 | | Kforce Inc. | $1,711 | $1,124 | | Percentile Rank | 50 | 43 |

  28. Financial and Operational Summary

    Financial and Operational Summary There has been heightened uncertainty in the macro environment, and concerns that the U.S. economy may fall into a recession, since the Federal Reserve began aggressively raising interest rates in March 2022 to address persistently high inflation. The U.S. Treasury’s yield curve has also recently been significantly inverted, which, for more than 50 years, has been an indicator of a likely recession. There are also significant geopolitical concerns including, but not limited to, the Ukraine-Russia War, ongoing supply chain issues, U.S. political uncertainties and the Israel-Hamas War. We began to experience the impacts of the uncertainty in the economy in the second half of 2022. We believe we executed well in 2023 in an environment that proved to be more challenging than originally expected. Our results, driven by solid execution and a focused business model, also allowed us to continue allocating significant capital towards our strategic priorities (as discussed earlier in this Proxy Statement) and in our people and tools. As a result, we believe we enter 2024 well positioned to take additional market share and create significant long-term returns for our shareholders. The following presents our Revenue and Adjusted Diluted EPS performance over the last three fiscal years. *Represents non-GAAP Adjusted Diluted EPS for 2022 and 2023. The calculation of Adjusted Diluted EPS for 2023, and the reconciliation to the applicable GAAP figures, are set forth in Appendix A to this Proxy Statement. Revenue for the year ended December 31, 2023 decreased 10.5% year-over-year to $1.53 billion, and Adjusted Diluted EPS declined 17.9% year-over-year to $3.49. As a result, our financial performance in 2023 did not meet the required threshold of revenue and adjusted diluted EPS, for purposes of incentive payouts for all Active NEOs. Our historical practice for purposes of compensation payouts is, to adjust or exclude non-recurring, or unusual and infrequently occurring items (both gains and losses), such as gains on the sale of non-core businesses and assets held for sale as well as impairment and restructuring charges. GAAP EPS was adjusted upwards by $8.4 million related to organizational realignments, actions taken to reduce our structural costs, legal settlements and the related tax effects. While the Firm continues to operate efficiently, it became clear to us that we needed to adjust our structural costs to align with lower revenue levels that we are experiencing and without compromising investments in our strategic initiatives. We anticipate that these difficult actions, which were executed in July 2023, will reduce annual operating costs from current run rates by approximately $14 million. We generated a return on invested capital of approximately 40% in 2023 and continued our historical practice of returning significant cash to our shareholders. We returned approximately $95 million of capital to our shareholders in the form of open market repurchases totaling $67 million, or 1.1 million shares (over 5% of shares outstanding), and quarterly dividends totaling nearly $28 million during the year ended December 31, 2023. Since 2007, we have returned $928 million in capital to our shareholders, which represents approximately 75% of the cash our business has generated during such period. We believe our financial performance allows us to be well-positioned to continue investing in our strategic priorities even in an uncertain macro environment, which we believe will benefit our shareholders in the long term and are important drivers to our attainment of double-digit operating margins. Our three-year TSR performance (the metric upon which equity LTI payouts are based) resulted in a 5th place finish among our 2023 Peer Group. The following graph presents our three-year TSR performance amongst our 2023 Peer Group.

  29. 2023 NEO Compensation Components, Results and Determinations

    2023 NEO Compensation Components, Results and Determinations The following section discusses the compensation components and results for our Active NEOs during 2023. The compensation framework was comprised of base salary and performance-based components, including: •Annual incentive compensation, which was based on certain financial metrics (revenue and adjusted diluted EPS) and, to a lesser extent, individual NEO MBOs; and •Equity LTI compensation, which was based on Kforce’s TSR performance over a three-year measurement period relative to our 2023 Peer Group. The Committee emphasizes the use of variable performance-based compensation over fixed compensation to effectively motivate our NEOs to drive operational performance. The following charts show fixed compensation (equal to salary) and the performance-based compensation components, each as a percentage of total direct compensation (TDC) for the CEO and for the other Active NEOs in the aggregate for 2023. We define TDC as the amount of total compensation derived from salary, annual incentives and equity LTI.

  30. 2023 NEO Compensation Components, Results and Determinations

    | 2023 ACTUAL COMPENSATION PAYOUTS |

  31. Annual Incentive Compensation

    Annual Incentive Compensation Annual incentive compensation for 2023 was targeted at the median of our 2023 Peer Group. Actual payout levels of the annual incentive awards may be above or below target based on actual performance. In addition, our annual incentive awards require minimum performance thresholds for any payout to occur for specific performance measures and objectives. We believe the annual incentive effectively motivates our NEOs to drive operational performance without encouraging unreasonable risk. The Committee believes the achievement of year-over-year revenue growth (benchmarked against the market) and adjusted diluted EPS goals, when combined with other individual objectives, will result in sustainable long-term shareholder value creation. The annual incentive compensation for our NEOs consisted of the following performance-based components: 1.A financial metric incentive (the Financial Performance Incentive). The 2023 Financial Performance Incentive represented 80% of the total target incentive award and was based on pre-determined levels of revenue growth and EPS performance. Revenue and EPS incentives continue to be the metrics we believe best demonstrate our annual progression towards generating long-term shareholder value and align to our profitability objectives of achieving double digit operating margins and returning significant capital to our shareholders. 2.An objectives-based incentive (the MBO Incentive) for individual accomplishments and management business objectives. The MBO Incentive represented 20% of the total target incentive award. Each of the above components is calculated as follows: (Salary) x (Target Annual Incentive Percentage) x (Target Annual Incentive Allocation Percentage) x (Payout Percentage of Target). The Target Annual Incentive Percentage and Allocation across each component is shown below.

  32. Annual Incentive Compensation

    | | | 2023 Annual Incentive | | 2023 Target Annual Incentive Allocation | | | | Name | 2023 Salary | % | $ | Revenue (40%) | EPS (40%) | MBO (20%) | | Joseph J. Liberatore | $875,000 | 125% | $1,093,750 | $437,500 | $437,500 | $218,750 | | David M. Kelly | $540,000 | 90% | $486,000 | $194,400 | $194,400 | $97,200 | | Jeffrey B. Hackman | $400,000 | 90% | $360,000 | $144,000 | $144,000 | $72,000 | | Andrew G. Thomas | $400,000 | 90% | $360,000 | $144,000 | $144,000 | $72,000 | | Kye L. Mitchell | $540,000 | 90% | $486,000 | $194,400 | $194,400 | $97,200 |

  33. Annual Incentive Compensation

    The following table provides the potential Financial Performance Incentive payout ranges as determined by the Committee, based on Revenue and adjusted diluted EPS. The Committee determines the objectives for Revenue and adjusted diluted EPS based on a combination of average market growth rates in the staffing industry and average expectations among our peer group. Revenue and Adjusted Diluted EPS amounts and the related year-over-year changes at Threshold, Target and Maximum performance levels are provided below. The levels between Threshold, Target and Maximum are interpolated.

  34. Annual Incentive Compensation

    | | Revenue (in millions) | Revenue Year-over-Year Growth (1) | Payout % of Target | Adjusted Diluted EPS | Year-over-Year Change | Payout % of Target | | Threshold | $1,704 | 0% | 25% | $4.25 | 0% | 25% | | Target | $1,743 | 2% | 100% | $4.46 | 5% | 100% | | Maximum | $1,782 | 5% | 200% | $4.71 | 11% | 200% |

  35. Annual Incentive Compensation

    (1) Consistent with historical practice, we have taken a market-based approach to establishing financial targets. Maximum growth levels are two times target growth and threshold represent flat year-over-year growth from prior year actual. Despite the uncertainty in the macro environment that existed when the above performance levels were established, and the expectation that we could experience a year-over-year revenue decline in 2023 (and consequently a potential decline in EPS), threshold levels were established at 0% based on our historical philosophy of only compensating our NEOs for revenue growth irrespective of adverse economic climates. For 2023, we achieved revenue of $1.53 billion and adjusted diluted EPS of $3.49, which did not meet the threshold level within 2023 financial metrics, resulting in no payout for revenue and adjusted diluted EPS. For purposes of the MBO Incentive, the Committee considers each individual’s accomplishments based on pre-established management business objectives and overall operational performance. As with the Financial Performance Incentive goals, the Committee strives to establish individual goals at levels intended to effectively motivate superior operational performance and advance the strategies of the Firm without encouraging unreasonable risk. The NEOs 2023 MBO Incentive was focused on our strategic objectives to (a) advance our multi-year back-office transformation program, (b) further integrate a unified account and delivery approach across a spectrum of services from traditional staff augmentation to managed projects, and (c) accomplish the commitments established for 2023 related to our ESG program. The MBO Incentive also included various individual objectives in addition to our strategic objectives. In 2023, our NEOs made tremendous progress on these strategic initiatives while continuing to deliver solid relative financial performance and achieving 5th place TSR Performance among our 2023 Peer Group. The Committee determined the MBO Incentive should be paid at Maximum, or 200%, for its Active NEOs. The annual incentives earned in 2023 for each NEO is shown in the table below:

  36. Annual Incentive Compensation

    | | | 2023 Attainment as a % of Target | | | 2023 Incentive Payouts | | | | | Name | Target Annual Incentive | Revenue (40%) | EPS (40%) | MBO (20%) | Revenue | EPS | MBO | Total | | Joseph J. Liberatore | $1,093,750 | —% | —% | 200% | $— | $— | $437,500 | $437,500 | | David M. Kelly | $486,000 | —% | —% | 200% | $— | $— | $194,400 | $194,400 | | Jeffrey B. Hackman | $360,000 | —% | —% | 200% | $— | $— | $144,000 | $144,000 | | Andrew G. Thomas | $360,000 | —% | —% | 200% | $— | $— | $144,000 | $144,000 | | Kye L. Mitchell (1) | $486,000 | N/A | N/A | N/A | N/A | N/A | N/A | N/A |

  37. Annual Incentive Compensation

    (1) No annual incentive bonus for Ms. Mitchell was earned for 2023 prior to her last day of employment with Kforce on September 22, 2023. An important decision made by the Committee in order to further align compensation paid with our shareholders’ interests, and in recognition of the uncertainty in the macro environment, was to settle the MBO attainment (from the table above) in a grant of restricted stock with a four-year vesting period. Annual incentive compensation has historically been settled in cash.

  38. Equity Long-Term Incentive

    Equity Long-Term Incentive Equity LTI awards are 100% performance based, and our LTI performance objectives are set to align executive and shareholder interests. Actual payout levels for the equity LTI may be above or below target based on actual performance and require minimum performance thresholds for any payout to occur. Equity LTI awards for performance relative to our 2023 Peer Group are awarded by the Committee in the form of a restricted stock grant that has a four-year time-based vesting period. The equity LTI compensation was based on relative TSR performance over a three-year measurement period relative to our 2023 Peer Group. The following table shows the dollar value of the equity LTI grant for each of the NEOs at threshold, target and max based on our relative TSR rank versus our 2023 Peer Group of 14 other companies for 2023:

  39. Equity Long-Term Incentive

    | Peer Group Relative TSR Rank: | 13 | 8 | 1 | | Name | Threshold | Target | Max | | Joseph J. Liberatore | $1,250,000 | $2,500,000 | $3,750,000 | | David M. Kelly | $675,000 | $850,000 | $1,500,000 | | Jeffrey B. Hackman | $320,000 | $400,000 | $625,000 | | Andrew G. Thomas | $355,000 | $450,000 | $750,000 | | Kye L. Mitchell | $625,000 | $775,000 | $1,450,000 |

  40. Equity Long-Term Incentive

    The table below illustrates the key performance results and resulting grant information for the 2023 LTI awards.

  41. Equity Long-Term Incentive

    | Measurement Period | TSR Performance | Peer Group Relative TSR Rank | Grant Date of Restricted Stock Award | Grant Date Closing Stock Price | | 2021-2023 | 70% | 5 | 12/31/2023 | $67.56 |

  42. Equity Long-Term Incentive

    The table below illustrates the equity LTI awards, including the number of shares and the grant date fair value. Having made equity grants based upon attainment of performance criteria, the Committee believes the restricted stock awards’ additional time-based vesting requirements further align compensation with our long-term performance and our shareholders’ interests, and also act as a significant retention vehicle for these executives.

  43. Equity Long-Term Incentive

    | Name | Type of Award | # of Shares | Grant Date Fair Value | | Joseph J. Liberatore | Annual LTI | 44,923 | $3,034,998 | | David M. Kelly | Annual LTI | 16,726 | $1,130,009 | | Jeffrey B. Hackman | Annual LTI | 6,698 | $452,517 | | Andrew G. Thomas | Annual LTI | 7,697 | $520,009 | | Kye L. Mitchell (1) | Annual LTI | — | $— |

  44. Equity Long-Term Incentive

    (1) Ms. Mitchell did not receive an award for 2023 prior to her last day of employment, on September 22, 2023.

  45. 2024 NEO Compensation Changes

    2024 NEO Compensation Changes As part of the Committee’s annual benchmarking of compensation against the market median, which is conducted in collaboration with its independent compensation consultant, the following changes were made for 2024 to align to the market median: •No change in base salary or target annual incentive compensation other than an increase in Mr. Kelly’s target annual incentive to 100% of salary. •The structure of the 2024 LTI portion of compensation for the NEOs was adjusted given the desire to further align with our shareholders’ interests and minimize cash compensation increases in an uncertain environment. Target long-term incentives increased for Messrs. Liberatore, Kelly, Hackman and Thomas by $0.5 million, $0.47 million, $0.5 million and $0.25 million, respectively. These adjustments contemplated the new roles for Messrs. Kelly, Hackman and Thomas stemming from the September 2023 executive realignment.

  46. Other Compensation Practices, Policies and Information

    | Kforce Nonqualified Deferred Compensation Plan | Kforce maintains a nonqualified deferred compensation plan in which eligible management and highly compensated key employees, as defined by IRS regulations, may elect to defer all or part of their compensation to later years. Amounts deferred are indexed to investment options selected by the eligible employees, and the increase or decrease in value is based upon the performance of the selected investments. Eligible employees are permitted to change investment options and scheduled distributions annually. Kforce has insured the lives of certain participants in the deferred compensation plan to assist in the funding of the deferred compensation liability. Employer matching contributions to the nonqualified deferred compensation plan are discretionary and are funded annually, as approved by the Board. |

  47. Other Compensation Practices, Policies and Information

    | Employment, Severance and Change in Control Agreements | Kforce has employment agreements with each of its NEOs, which provide for severance payments under certain termination circumstances, including termination following a change in control, as defined in the employment agreements. The Committee has determined it is in Kforce’s and its shareholders’ best interests to recognize the contributions of and retain the NEOs. The specific amounts the NEOs would receive under the employment agreements are described in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement below. The Committee believes the employment agreements are an essential component of the executive compensation program and are helpful in attracting and retaining executive talent in a competitive market. The Committee periodically reviews the benefits provided under the employment agreements to determine if they continue to serve Kforce’s interests in providing significant retention benefits to these key executives, are consistent with market practice and are reasonable. In 2009, the Committee resolved to not enter into any new employment agreements, or materially amend any existing employment agreements with its executives, that contain excise tax gross-up provisions going forward. As of December 31, 2023, only Mr. Liberatore has excise tax gross-up provisions in his existing employment agreement (which has not been amended since 2008). In 2017, the Committee resolved to not enter into any new employment agreements, or materially amend any existing employment agreements with its executives, that contain provisions for severance payments that exceed 1x cash compensation or change in control severance payments that exceed 2x cash compensation. |

  48. SUMMARY COMPENSATION TABLE (SCT)

    SUMMARY COMPENSATION TABLE (SCT)

  49. For Fiscal Years Ended December 31, 2023, 2022 and 2021

    | Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards (2) | Non-Equity Incentive Plan Compensation (3)(4) | All Other Compensation (5) | Total | | Joseph J. Liberatore | 2023 | $875,000 | $— | $3,034,998 | $437,500 | $224,328 | $4,571,826 | | Chief Executive Officer | 2022 | $850,000 | $— | $2,800,004 | $1,722,355 | $192,554 | $5,564,913 | | | 2021 | $660,000 | $118,800 | $4,649,950 | $1,188,000 | $155,719 | $6,772,469 | | David M. Kelly | 2023 | $540,000 | $— | $1,130,009 | $194,400 | $85,339 | $1,949,748 | | Chief Operating Officer | 2022 | $540,000 | $— | $899,980 | $851,472 | $93,497 | $2,384,949 | | | 2021 | $480,000 | $86,400 | $1,435,047 | $864,000 | $95,078 | $2,960,525 | | Jeffrey B. Hackman | 2023 | $400,000 | $— | $452,517 | $144,000 | $43,654 | $1,040,171 | | Chief Financial Officer | 2022 | $400,000 | $— | $462,491 | $655,200 | $45,077 | $1,562,768 | | Andrew G. Thomas | 2023 | $400,000 | $— | $520,009 | $144,000 | $44,810 | $1,108,819 | | Chief Experience Officer | 2022 | $400,000 | $— | $540,021 | $663,120 | $46,686 | $1,649,827 | | | 2021 | $350,000 | $63,000 | $787,478 | $630,000 | $46,661 | $1,877,139 | | Kye L. Mitchell (6) | 2023 | $393,750 | $— | $— | $— | $1,700,921 | $2,094,671 | | Former Chief Operations Officer | 2022 | $540,000 | $— | $849,975 | $851,472 | $90,336 | $2,331,783 | | | 2021 | $480,000 | $86,400 | $1,387,508 | $864,000 | $91,171 | $2,909,079 |

  50. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

  51. GRANTS OF PLAN-BASED AWARDS

    GRANTS OF PLAN-BASED AWARDS

  52. GRANTS OF PLAN-BASED AWARDS

    | Name | Type of Award | Date Plan Approved | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards No. of Shares of Stock | Grant Date Fair Value | | | | | | Threshold ($) | Target ($) | Maximum ($) | | | | Joseph J. Liberatore | Annual Incentive (1) | 02/02/2023 | | $273,438 | $1,093,750 | $2,187,500 | — | $— | | | Equity LTI (2) | 02/02/2023 | 12/31/2023 | $— | $— | $— | 44,923 | $3,034,998 | | David M. Kelly | Annual Incentive (1) | 02/02/2023 | | $121,500 | $486,000 | $972,000 | — | $— | | | Equity LTI (2) | 02/02/2023 | 12/31/2023 | $— | $— | $— | 16,726 | $1,130,009 | | Jeffrey B. Hackman | Annual Incentive (1) | 02/02/2023 | | $90,000 | $360,000 | $720,000 | — | $— | | | Equity LTI (2) | 02/02/2023 | 12/31/2023 | $— | $— | $— | 6,698 | $452,517 | | Andrew G. Thomas | Annual Incentive (1) | 02/02/2023 | | $90,000 | $360,000 | $720,000 | — | $— | | | Equity LTI (2) | 02/02/2023 | 12/31/2023 | $— | $— | $— | 7,697 | $520,009 | | Kye L. Mitchell | Annual Incentive (1) | 02/02/2023 | | $121,500 | $486,000 | $972,000 | — | $— |

  53. GRANTS OF PLAN-BASED AWARDS

    (1)These amounts represent the estimated payouts under the 2023 annual incentive compensation plan. The threshold, as defined in Item 402(d) of Regulation S-K, represents the minimum amount payable upon attaining minimum performance thresholds established by the Committee each year. If the minimum performance thresholds are not attained, there would be no payout. The maximum payout is 200% of the target multiplier for all components of the 2023 annual incentive compensation plan. Actual payments for annual incentive compensation earned during 2023 are listed in the “Non-Equity Incentive Plan Compensation” column of the SCT. (2)The performance based equity LTI awards granted in the form of restricted stock under the 2023 Stock Incentive Plan on December 31, 2023 have a four-year vesting period, or 25% annually. Restricted stock awards contain the right to forfeitable dividends in the form of additional shares of restricted stock at the same rate as the cash dividend on common stock and containing the same vesting provisions as the underlying award. The fair market value of restricted stock is determined based on the closing stock price of Kforce’s common stock on the date of grant. The stock price and grant date fair value for the December 31, 2023 awards was $67.56, which was the closing stock price on December 29, 2023. The aggregate grant date fair value of the awards is included within the amounts presented in the “Stock Awards” column of the SCT.

  54. OPTION EXERCISES AND STOCK VESTED

    OPTION EXERCISES AND STOCK VESTED

  55. NONQUALIFIED DEFERRED COMPENSATION

    NONQUALIFIED DEFERRED COMPENSATION

  56. NONQUALIFIED DEFERRED COMPENSATION

    | Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(3) | | Joseph J. Liberatore | $— | $— | $— | $— | $— | | David M. Kelly | $— | $— | $— | $— | $— | | Jeffrey B. Hackman | $— | $— | $— | $— | $— | | Andrew G. Thomas | $— | $— | $221,150 | $— | $842,688 | | Kye L. Mitchell | $— | $— | $— | $— | $— |

  57. NONQUALIFIED DEFERRED COMPENSATION

    (1)None of our NEOs participated in Kforce’s nonqualified deferred compensation plan during 2023. (2)The aggregate earnings for 2023 represents appreciation or depreciation in the market value of the respective accounts’ holdings and interest and dividends generated thereon. These amounts were not reported in the “Nonqualified Deferred Compensation” column of the SCT for 2023 as there were no above-market or preferential earnings generated. (3)The aggregate balance includes amounts related to employer contributions made by Kforce that were previously reported in the SCTs for prior years.

  58. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL This section describes amounts that would have been payable to the Active NEOs for various service termination or change in control (CIC) scenarios on December 31, 2023.

  59. Potential Payments

    Potential Payments The table on the following page displays the amounts that would have been payable to the Active NEOs for various service termination or CIC scenarios on December 31, 2023. The amounts that would actually be payable to the Active NEOs, if employment termination or a CIC were to occur in the future, would be different than those set forth in the table below, which are calculated under the assumption that the event occurred on December 31, 2023 and based on the closing price of Kforce’s common stock on the last trading day of the year. We note that such payments are contingent upon various factors in place at the time of the occurrence of the assumed event, including, but not limited to: each Active NEO’s current salary rate; annual incentive awards and annual equity LTIs; the amount and type of unvested equity and other incentive awards held by the Active NEO; the trading price of Kforce’s common stock; the cost of providing employee benefits; the Active NEO’s elections of employee benefits; the Active NEO’s age and/or years of service with Kforce; the date of termination; the circumstances of the termination; and the Active NEO’s historical salary, annual cash incentives and equity LTIs.

  60. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE

  61. CEO PAY RATIO

    CEO PAY RATIO Under the applicable SEC rules, we calculated the ratio of our CEO’s total annual compensation to the median of the total annual compensation of our employees using a reasonable estimate. As of December 31, 2023, Kforce employed approximately 1,800 associates and 8,600 consultants on assignment providing staffing services and solutions to our clients. The majority of the consultants are employed directly by Kforce with the remainder consisting of independent contractors. To determine our median employee, we compiled a list of all employees from our payroll records, including all full-time, part-time, temporary and seasonal employees who were employed as of December 31, 2023, which included our consultants that were directly employed by Kforce as of that date, but did not include the independent contractors. We examined all wages as reportable on Form W-2 for 2023 for these individuals, excluding our CEO. We annualized the compensation for any full-time and part-time employees that were not employed by us for the entire 2023 fiscal year, except for our consultants as they are considered temporary per our interpretation of the SEC guidelines, therefore we did not annualize their compensation. As such, our employee population includes a significant number of individuals that do not reflect a full year of compensation due to the short-term nature of their assignments. Mr. Liberatore had $4,571,826 in total annual compensation for 2023, as reflected in the SCT included in this Proxy Statement. Our median employee had total annual compensation of $66,079 for 2023, which was calculated on the same basis as Mr. Liberatore’s compensation for the purposes of the SCT. As a result, we estimate Mr. Liberatore’s total compensation for 2023 was approximately 69 times that of our median employee. Given the different methodologies that various companies use to determine an estimate of their CEO pay ratio, and given the uniqueness of our temporary employee population, we do not believe that this estimated ratio should be used as a basis for comparison with other companies.

  62. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE This section provides information regarding the relationship between executive compensation and our financial performance for each of the last four fiscal years in accordance with Item 402(v) of Regulation S-K. The table below summarizes compensation values both previously reported in our SCT and the adjustments to derive to the Compensation Actually Paid (CAP). Note that for our NEOs other than our principal executive officer (the PEO), the compensation figures are reported as an average.

  63. PAY VERSUS PERFORMANCE

    | Pay Versus Performance Table | | | | | | | | | | Fiscal Year | SCT Total for PEO ($) (1) | Compensation Actually Paid to PEO ($) (1) (4) | Average SCT Total for non-PEO NEOs ($) (2) | Average Compensation Actually Paid to non-PEO NEOs ($) (2)(4) | Value of Initial Fixed $100 Investment Based on | | Net Income (in millions) ($) (5) | Revenue (in millions) ($) | | | | | | | TSR ($) | Peer Group TSR ($) (3) | | | | 2023 | $4,571,826 | $9,383,446 | $1,366,246 | $2,771,650 | $180 | $133 | $61 | $1,532 | | 2022 | $5,564,913 | $2,066,802 | $1,982,332 | $754,954 | $146 | $115 | $75 | $1,711 | | 2021 | $6,329,950 | $11,686,235 | $3,629,803 | $6,925,993 | $197 | $150 | $75 | $1,580 | | 2020 | $6,653,318 | $6,922,445 | $2,844,349 | $3,010,896 | $108 | $98 | $56 | $1,398 |

  64. PAY VERSUS PERFORMANCE

    (1) Mr. Liberatore, President and CEO, is reflected in the table as the PEO for 2023 and 2022. Mr. Dunkel, current Chairman of the Board, was the CEO until he retired effective December 30, 2021, and is reflected as the PEO for 2021 and 2020. (2) Reflects average compensation amounts reported in the SCT for the following non-PEO NEOs for the fiscal years noted below: •2023: Messrs. Kelly, Hackman and Thomas. •2022: Messrs. Kelly, Hackman and Thomas and Ms. Mitchell. •2021 and 2020: Messrs. Liberatore, Kelly and Thomas and Ms. Mitchell. (3) The amounts reflect the TSR for our 2023 Peer Group for all years presented. For details on the changes in our 2023 Peer Group (as compared to our 2022 Peer Group), refer to our 2023 Proxy Statement filed with the SEC on March 13, 2023. (4) For the unvested stock awards included in CAP for both the PEO and non-PEO NEOs, we used the closing stock price on the last trading day of each fiscal year, less the closing stock price on the last trading day in the immediately preceding fiscal year to obtain the incremental value of the unvested stock awards. The closing stock price of $67.56 and $54.83 was used for December 29, 2023 and December 30, 2022, respectively. For the vested awards included in CAP for both the PEO and non-PEO NEOs, we used the closing stock price on the vesting date, less the closing stock price on the last trading day in the immediately preceding fiscal year. (5) Adjusted Net Income for 2023 was $68 million, which we believe is better aligned to our operational results. Refer to Appendix A - Adjusted Financial Performance Measures for more details. The following tables reconciles the amount disclosed in our SCT to the amount disclosed for CAP for the PEO and non-PEO NEOs: PEO Reconciliation:

  65. PAY VERSUS PERFORMANCE

    | Year | SCT Total | Deductions from SCT table (1) | Additions to SCT Table (2) | CAP | | 2023 | $4,571,826 | $(3,259,326) | $8,070,927 | $9,383,446 | | 2022 | $5,564,913 | $(2,992,559) | $(505,552) | $2,066,802 | | 2021 | $6,329,950 | $(3,529,950) | $8,886,235 | $11,686,235 | | 2020 | $6,653,318 | $(4,823,041) | $5,092,168 | $6,922,445 |

  66. PAY VERSUS PERFORMANCE

    Average non-PEO NEOs Reconciliation:

  67. PAY VERSUS PERFORMANCE

    | Year | SCT Total | Deductions from SCT table (1) | Additions to SCT Table (2) | CAP | | 2023 | $1,366,246 | $(758,779) | $2,164,213 | $2,771,650 | | 2022 | $1,982,332 | $(756,924) | $(470,362) | $754,954 | | 2021 | $3,629,803 | $(2,161,178) | $5,457,368 | $6,925,993 | | 2020 | $2,844,349 | $(1,868,230) | $2,034,777 | $3,010,896 |

  68. PAY VERSUS PERFORMANCE

    (1) Represents the grant date fair value of equity-based awards granted each year, and the value of dividends on unvested equity-based awards. (2) Reflects the impact of fluctuations in Kforce’s stock price on vested and unvested equity awards pursuant to the SEC’s methodology for determining CAP for each year shown. The following table provides the equity values included in the PEO and non-PEO NEO reconciliation tables above: PEO Equity Component of CAP:

  69. PAY VERSUS PERFORMANCE

    | Year | Fair Value of Current Year Equity Awards at End of Year | Change in Fair Value of Prior Years' Awards That Remain Unvested at End of Year | Change in Fair Value of Prior Years' Awards That Vested During Year | Equity Value included in CAP | | 2023 | $3,034,998 | $1,312,870 | $3,723,059 | $8,070,927 | | 2022 | $2,800,004 | $(2,106,837) | $(1,198,719) | $(505,552) | | 2021 | $3,200,009 | $2,608,988 | $2,903,017 | $8,712,014 | | 2020 | $3,374,987 | $189,740 | $235,107 | $3,799,834 |

  70. PAY VERSUS PERFORMANCE

    Average Non-PEO NEO’s Equity Component of CAP:

  71. PAY VERSUS PERFORMANCE

    | Year | Fair Value of Current Year Equity Awards at End of Year | Change in Fair Value of Prior Years' Awards That Remain Unvested at End of Year | Change in Fair Value of Prior Years' Awards That Vested During Year | Equity Value included in CAP | | 2023 | $700,845 | $293,613 | $1,169,755 | $2,164,213 | | 2022 | $688,117 | $(630,923) | $(527,556) | $(470,362) | | 2021 | $2,064,996 | $2,002,501 | $1,389,871 | $5,457,368 | | 2020 | $1,458,111 | $154,405 | $108,323 | $1,720,839 |

  72. PAY VERSUS PERFORMANCE

    Relationships between CAP and Company Performance Measures The graphs below show the relationship of “compensation actually paid” to our CEO and non-PEO NEOs in 2023, 2022, 2021 and 2020 to (1) TSR of both Kforce Inc. and our 2023 Peer Group, (2) net income and (3) revenue (company selected measure). CAP, as required under SEC rules, reflects adjusted values to unvested and vested equity awards during the years shown in the table based on year-end stock prices and various accounting valuation assumptions, but does not reflect actual amounts paid out for those awards. Due to the sensitivity of CAP to stock price changes, the timing of the grants and the changes in stock price thereafter, significantly influence the CAP each year. In the “Compensation Discussion and Analysis” section of this Proxy Statement and in the proxy statements for 2022, 2021 and 2020 as filed with the SEC, we provide greater detail on the elements of our executive compensation program and our “pay-for-performance” compensation philosophy. We believe the Firm’s executive compensation program appropriately rewards our PEO and the non-PEO NEOs for Company and individual performance, promotes retention of our senior leadership team, and supports long-term value creation for our shareholders. The three items listed below represent the most important financial performance metrics used to determine compensation for our NEOs as further described in our 2023 NEO Compensation within the CD&A sections titled “Annual Incentive Compensation” and “Equity Long-Term Incentive”.

  73. PAY VERSUS PERFORMANCE

    | Most Important Performance Measures | | | | Revenue (and implied revenue growth) | Adjusted Diluted EPS (and implied EPS growth) | 3-Year Relative TSR |