DEF 14A of Barrett Business Services Inc, Apr 22, 2024

DEF 14A of Barrett Business Services Inc

Filed Apr 22, 2024 · FY20230000950170-24-046428

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS The director nominees will be elected at the Annual Meeting to serve until the next annual meeting of stockholders and until their successors are elected and qualify. Our Charter and Bylaws authorize the Board to set the number of positions on the Board within a range of three to nine, with the current number fixed at eight. Vacancies on the Board, including vacancies resulting from an increase in the number of positions, may be filled by the Board for a term ending with the next annual meeting of stockholders and when a successor is duly elected and qualifies. Provided that a quorum is present at the Annual Meeting, a nominee will be elected if the nominee receives the affirmative vote of a majority of the total votes cast on his or her election (that is, the number of shares voted "for" a director nominee must exceed the number of votes cast "against" that nominee). All of our director nominees are currently serving on the Board. Even if a nominee who is currently serving as a director is not re-elected, Maryland law provides that the director would continue to serve on the Board as a "holdover director." However, under our Bylaws, if stockholders do not re-elect a director, the director is required to submit his or her resignation to the Board. In that event, our Nominating and Governance Committee (the "Nominating Committee") would recommend to the Board whether to accept or reject the resignation. The Board would then consider and act on the Nominating Committee's recommendation, publicly disclosing its decision and the reasons supporting it within 90 days following the date that the resignation was submitted. A duly executed proxy will be voted FOR the election of the nominees named below, other than proxies marked to vote "against" or to "abstain" from voting on one or more nominees. Shares not represented in person or by proxy at the Annual Meeting, shares voted to "abstain," and broker non-votes, if any, will have no effect on the outcome of the election of directors. The Board recommends that stockholders vote FOR each of the nominees named below to serve as a director until the next annual meeting of stockholders and his or her successor is duly elected and qualifies. If for some unforeseen reason a nominee should become unavailable for election, the proxy may be voted for the election of such substitute nominee as may be designated by the Board. The following table sets forth information with respect to each person nominated for election as a director, including their current principal occupation or employment and age as of April 1, 2024.

  2. PROPOSAL 1: ELECTION OF DIRECTORS

    | Name | Principal Occupation | Age | Director Since | | Thomas J. Carley | Retired Chief Operating Officer of Urth Organic Corporation | 65 | 2000 | | Joseph S. Clabby | Retired Vice President at Chubb Limited | 70 | 2022 | | Thomas B. Cusick | Retired Executive Advisor of Columbia Sportswear Company | 56 | 2016 | | Gary E. Kramer | President and Chief Executive Officer of the Company | 44 | 2020 | | Anthony Meeker | Retired Managing Director of Victory Capital Management, Inc., Cleveland, Ohio | 85 | 1993 | | Carla A. Moradi | Board member of the Company and Patriot Growth Insurance Services, LLC | 59 | 2021 | | Alexandra Morehouse | Board member of the Company and Evalueserv, Inc. | 65 | 2022 | | Vincent P. Price | Advisor to the Chief Executive Officer of Cambia Health Solutions, Inc. | 60 | 2017 |

  3. PROPOSAL 1: ELECTION OF DIRECTORS

    The Nominating Committee evaluates the Board’s membership from time to time in determining whether to recommend that incumbent directors be nominated for re-election. In this regard, the Nominating Committee considers whether the professional and educational background, business experience and expertise represented on the Board as a whole enable it to satisfy its oversight responsibilities in an effective manner. The experience, qualifications, attributes, and skills of each director nominee, including his or her business experience during the past five years, are described below. Thomas J. Carley served as Chief Operating Officer of Urth Organic Corporation, a distributor of organic agricultural products, from August 2018 to June 2023. From July 2006 to June 2018, Mr. Carley acted as principal of Portal Capital, an investment management company that he co-founded, with responsibility for all of Portal Capital’s financial duties. Mr. Carley has an MBA from the University of Chicago Graduate School of Business, with an emphasis in Accounting and Finance, and an A.B. degree in Economics and Classics from Dartmouth College. He is also a director of Urth Organic Corporation and a Trustee and Treasurer of the Tracy Memorial Library in New London, NH. Mr. Carley brings financial expertise to the Company and the Board through his prior experience in the areas of public accounting and financial analysis, including experience as an accountant with Price Waterhouse & Co., now known as PricewaterhouseCoopers LLP, as well as President and Chief Financial Officer of Jensen Securities, a securities and investment banking firm in Portland, Oregon, for eight years in the 1990s. He is the chair of the Board’s Nominating Committee. Joseph S. Clabby, before retiring in 2022, spent over 20 years with ACE Limited and then Chubb Limited, a global insurance and reinsurance organization, following its merger with ACE in 2016, in a number of senior executive positions, including board roles at several affiliated companies. Prior to ACE and Chubb, Mr. Clabby held underwriting, broker and executive roles with leading insurance and reinsurance organizations including Alexander & Alexander, Willis Group and Swiss Re. Mr. Clabby earned his MBA in Finance from Pace University and his Master of Arts in Education from Montclair State University. He completed his undergraduate degree at Fordham University, majoring in Psychology. Mr. Clabby brings extensive insurance industry experience to the Board with specific expertise in underwriting, risk management, and operational and financial leadership through his experience as an executive officer of a multinational public company. Thomas B. Cusick served as Executive Advisor of Columbia Sportswear Company, an outdoor and active lifestyle apparel and footwear company listed on the Nasdaq Global Select Market, from 2021 until August 2023. He previously served as Executive Vice President and Chief Operating Officer of Columbia beginning in July 2017 and as Columbia’s Executive Vice President and Chief Financial Officer from 2015 until 2017. He joined Columbia in 2002 as Corporate Controller and was promoted to Chief Financial Officer in 2009. Prior to joining Columbia, Mr. Cusick spent seven years with Cadence Design Systems, Inc. (and OrCAD, a company acquired by Cadence in 1999), a public company that develops system design enablement solutions, and certain of its subsidiaries. Mr. Cusick currently serves as a member of the Board of Directors and Chair of the Audit Committee of Rather Outdoors Corporation, a privately held fishing equipment business. He received a B.S. degree in accounting from the University of Idaho and began his career at the public accounting firm of KPMG, LLC. Mr. Cusick brings financial and senior leadership expertise to the Board through his experience as an executive officer of a public company and his work with public company audit committees. He is the chair of the Board’s Audit and Compliance Committee. Gary E. Kramer joined the Company on August 1, 2016, as Vice President – Finance and served as the Company’s Chief Financial Officer and Principal Accounting Officer until March 5, 2020, when he was elected President and Chief Executive Officer of the Company. Mr. Kramer has more than 15 years of insurance industry expertise, joining the Company after serving 12 years with Chubb Limited—the world’s largest publicly traded property and casualty insurer. Mr. Kramer holds a Bachelor of Science degree in business administration with a specialization in finance from Rowan University and an MBA with a specialization in accounting from Drexel University. Mr. Kramer brings to the Board extensive experience in senior leadership positions as well as deep industry and financial acumen. Anthony Meeker serves as Chairman of the Board. He retired in 2003 as a Managing Director of Victory Capital Management, Inc., an investment management firm, where he was employed for 10 years. Mr. Meeker was previously a director of First Federal Savings and Loan Association of McMinnville, Oregon and Oregon Mutual Insurance. He also serves on the board of two charitable organizations, MV Advancements, which provides employment, residential, and community services to clients with disabilities, and Oregon State Capitol Foundation. From 1987 to 1993, Mr. Meeker was Treasurer of the State of Oregon. His duties as state treasurer included investing the assets of the state, including the then $26 billion state pension fund, managing the state debt, and supervising all cash management programs. Mr. Meeker also managed the workers compensation insurance reserve fund of the State Accident Insurance Fund, providing oversight to ensure adequate actuarial reserves. He received a B.A. degree from Willamette University. Mr. Meeker’s experience in the insurance industry assists the Company in managing risk with respect to workers’ compensation and overseeing its insurance subsidiaries. Mr. Meeker also brings leadership skills and a unique insight stemming from his public service as state treasurer and service on other corporate boards. Carla A. Moradi has served in several Senior Vice President roles, most recently of Global Partner & Alliances Organization, for Anaplan Inc., an enterprise SaaS company, from September 2020 until September 2023. Prior to Anaplan, Ms. Moradi was Executive Vice President of Operations and Technology for HUB International Limited, a leading North American insurance brokerage, beginning in 2015, and was previously Group Vice President and Chief Information Officer of Walgreens Boots Alliance Inc., a healthcare, pharmacy and retail company listed on the Nasdaq Global Select Market. Ms. Moradi earned her MBA in Finance from Tulane University and her Master’s in Public Health from Tulane School of Public Health and Tropical Medicine. She completed her undergraduate degree at Knox College, majoring in Biology/Sociology. She has received a CERT Certificate in Cybersecurity Oversight from the Carnegie Mellon University Software Engineering Institute through a program developed by the NACD. Ms. Moradi currently serves as a member of the Board of Directors of Patriot Growth Insurance Services, LLC, a privately held insurance services firm and most recently served on the Executive Committee of the YMCA of the USA National Board until her term ended in March 2024. Ms. Moradi brings her extensive knowledge and experience regarding information technology, data security and other risk management issues to the Board. She is the chair of the Board’s Risk Management Committee.

  4. PROPOSAL 1: ELECTION OF DIRECTORS

    Alexandra Morehouse served as Chief Marketing Officer & Chief Digital Officer of Banner Health from August 2015 until October 2023. Banner Health is a not-for-profit health system based in Phoenix, Arizona, operating 30 hospitals and several specialized facilities across 6 states. Prior to Banner Health, Ms. Morehouse served in leadership roles with American Express, Charles Schwab, California State Automobile Association, and Kaiser Permanente. Ms. Morehouse currently serves as a member of the Board of Directors of Evalueserve, Inc., a privately held leading global analytics and artificial intelligence consultancy. Ms. Morehouse is also a founding board member of Alliance for Multicultural and Inclusive Marketing, a national coalition whose purpose is to create a movement that reflects a world of acceptance by celebrating differences and highlighting human truths that unite us. She earned a bachelor’s degree at Harvard University and a Master in Business Administration degree from Harvard Business School. Ms. Morehouse is NACD Directorship Certified®. Ms. Morehouse brings to the Board her extensive knowledge and experience regarding marketing, including enterprise-wide digital transformation and branding, as well as corporate governance and diversity and inclusion issues. Vincent P. Price has served as an advisor to the Chief Executive Officer of Cambia Health Solutions, Inc. ("Cambia"), a nonprofit healthcare solutions company headquartered in Portland, Oregon, since October 2023, and prior to that served as Executive Vice President and Chief Financial Officer of Cambia. Mr. Price joined Cambia in 2009. Prior to joining Cambia, he spent 15 years as a senior finance executive with Intel Corporation, a leader in the design and manufacturing of advanced integrated digital technology platforms, followed by seven years as a consultant to start-up companies. He served on the board of trustees of BCS Financial’s Plan Investment Fund and the Oregon Health Sciences University Foundation. He was also a founding member and treasurer of the Children’s Heart Foundation, Oregon Chapter. He received his bachelor's degree in business from South Dakota State University. His Master of Business Administration is from Arizona State University. Mr. Price brings his business, financial, and risk management experience as an executive officer of a large health care organization to the Board. He is the chair of the Board’s Compensation Committee. The Board recommends that stockholders vote FOR each of the nominees named above.

  5. DIRECTOR COMPENSATION FOR 2023

    DIRECTOR COMPENSATION FOR 2023 The following table summarizes compensation paid to the Company’s outside directors for services during 2023. No outside director received perquisites or other personal benefits with a total value exceeding $10,000 during 2023.

  6. DIRECTOR COMPENSATION FOR 2023

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | Total | | Thomas J. Carley | $80,000 | $99,931 | $179,931 | | Joseph S. Clabby | $77,500 | $99,931 | $177,431 | | Thomas B. Cusick | $85,000 | $99,931 | $184,931 | | Jon L. Justesen(4) | $37,500 | $— | $37,500 | | Anthony Meeker | $146,069 | $99,931 | $246,000 | | Carla Moradi | $82,500 | $99,931 | $182,431 | | Alexandra Morehouse, NACD.DC | $77,500 | $99,931 | $177,431 | | Vincent Price | $80,000 | $99,931 | $179,931 |

  7. DIRECTOR COMPENSATION FOR 2023

    (1) Directors (other than directors who are full-time employees of the Company, who do not receive directors’ fees) are entitled to receive an annual retainer payable monthly in cash. For 2023, the annual retainer was $65,000 for each outside director other than the Chairman of the Board, whose annual retainer was $135,000. Also throughout 2023, committee chairs and committee members received annual retainers as follows: Audit Committee, $15,000 and $7,500; Compensation Committee, $10,000 and $5,000; Risk Management Committee, $10,000 and $5,000; and Nominating Committee, $10,000 and $5,000. (2) Reflects the grant date fair value of 1,146 RSUs based on the closing share price of the Common Stock as of the grant date, July 1, 2023, of $87.20 per share. All the RSUs vest on July 1, 2024, and will be settled by delivery of unrestricted shares of Common Stock on the vesting date. Each RSU represents a contingent right to receive one share of Common Stock. (3) At December 31, 2023, each of the Company’s outside directors held 1,146 RSUs. The Company’s outside directors held stock options as follows: Mr. Carley, 6,250 shares. (4) Mr. Justesen's service as a director concluded at the annual meeting held in June 2023.

  8. Compensation Discussion and Analysis

    Compensation Discussion and Analysis Compensation Philosophy and Objectives. The Compensation Committee (for purposes of this section, the "Committee") has responsibility for establishing, implementing, and continually monitoring adherence with the Company’s compensation philosophy. The goal of the Committee is to ensure that the total compensation paid to the Company’s executive officers is fair, reasonable, and competitive. The Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual and long-term strategic goals by the Company. The principles underlying our compensation policies are: • To attract, motivate, and retain high-quality executive officers; • To provide competitive compensation relative to compensation paid to similarly situated executives; and • To align the interests of executives with our overall risk profile to build long-term stockholder value. At the 2023 annual meeting of stockholders, more than 87% of the votes cast with respect to the advisory vote on executive compensation approved the compensation of the Company's named executive officers. The Committee took this information into consideration in reviewing the Company's executive compensation program. Our executive compensation program processes are consistent with those established by the Committee and are monitored by the Company’s finance functions. Peer Group and Survey Data for Comparison Purposes. For several years, the Committee has retained Mercer, a nationally recognized compensation consultant, to provide advice to the Committee regarding the structure and implementation of the Company's executive compensation program. In the third quarter of 2021, the Committee asked Mercer to prepare an updated analysis of executive compensation data for all executive officer positions. In consultation with the Committee, Mercer developed an updated peer group for purposes of comparing the Company's executive compensation with similarly sized companies in the human resources and employment services and related industries. Mercer added three companies, Cross Country Healthcare, Inc., Insperity, Inc. and TrueBlue, Inc., and three companies were removed from the group. An analysis by Mercer in 2021 of executive compensation paid by members of the revised peer group listed below was considered by the Committee in establishing executive compensation for 2023:

  9. Compensation Discussion and Analysis

    The peer group was developed in consultation with Mercer without consideration of individual company compensation practices, and no company was included or excluded from the peer group due to paying above-average or below-average compensation. 2023 Executive Compensation Components. For the fiscal year ended December 31, 2023, the principal components of compensation for executive officers were: • Base salary; • Target annual cash incentive compensation, including both performance-based compensation and discretionary bonuses; • Grants of restricted stock units ("RSUs"); and Grants of performance share awards ("PSUs") Base Salary Salary levels of executive officers are reviewed periodically by the Committee and the CEO as part of the performance review process, as well as in connection with a promotion or other change in job responsibility. In determining base salaries for executives in 2023, the Committee primarily considered: The Committee’s analyses of competitive compensation practices, including the information described above under the subheading "Peer Group and Survey Data for Comparison Purposes"; • Advice from Mercer regarding trends in executive pay in 2023, including merit increases in salary and total direct compensation levels; • The scope of responsibilities of the Company’s executive officers, including leadership, experience, skills, expertise, and knowledge; and • Individual performance and contributions to the Company’s financial and strategic objectives. In February 2023, the Committee approved 2023 executive officer base salary levels, effective April 1, 2023, as follows: Mr. Kramer, $823,000, an increase of 4%; Mr. Harris, $450,000, an increase of 13%; Mr. Blotz, $535,000, an increase of 3%; and Mr. Potts, $355,000, an increase of 4%. The increases were based on the Committee’s evaluation of performance, as well as to peg salary levels for those positions closer to the median as compared to the Company’s peer group. Annual Cash Incentive Compensation The Company has an Annual Cash Incentive Award Plan (the "Annual Incentive Plan") that provides for annual awards of cash compensation to the Company’s executive officers based on the achievement of objective corporate performance goals selected by the Committee. In addition, the Committee typically awards discretionary bonuses based on each officer’s individual performance during the year. The total bonus opportunity for 2023 was divided such that 75% related to achievement of corporate performance goals and 25% to individual performance. Following year end, the Committee determined the extent to which the corporate and individual performance goals were achieved. An executive must remain employed by the Company through the date of the Committee's determination of performance to be eligible to receive annual cash incentive payouts. In April 2023, the Committee set the target bonus amounts at 100% of base salary for Mr. Kramer and at 80% of base salary for Messrs. Harris, Blotz and Potts. The target amounts related to achievement of corporate performance goals were as follows: Mr. Kramer, $617,250; Mr. Harris, $270,000; Mr. Blotz, $321,000; and Mr. Potts, $213,000. The target bonus amounts tied to corporate financial metrics preliminarily approved by the Committee related to gross billings growth, net income, and gross margin as a percentage of gross billings, with each goal weighted equally. The cash payouts were subject to adjustment on a sliding scale based on the actual achievement of a given metric above or below the target level. Payouts for a given performance target would be 25% at the minimum achievement level and capped at 200% at the maximum achievement level. There would be no payout at an achievement level below the established minimum. The following table shows the Committee's determination of the bonus payout percentages achieved for each respective metric under the Annual Incentive Plan.

  10. Compensation Discussion and Analysis

    | Metric | Target | Actual | Minimum Achievement Level | Maximum Achievement Level | Payout Percentages | | Gross billings growth | 7.40% | 4.36% | 5.18% | 10.36% | 0% | | Net income | $43,081,575 | $50,612,451 | $36,619,339 | $51,697,890 | 187% | | Gross margin as a percentage of gross billings | 3.00% | 3.14% | 2.85% | 3.20% | 170% |

  11. Compensation Discussion and Analysis

    The actual payout amounts are shown in the Non-Equity Incentive Compensation Plan column of the Summary Compensation Table below. The target bonus amounts for individual performance approved by the Committee in April 2023 were as follows: Mr. Kramer, $205,750; Mr. Harris, $90,000; Mr. Blotz, $107,000; and Mr. Potts, $71,000. The Committee received recommendations by the CEO with regard to the three executive officers other than himself. Goals for the executive team related to the 2023 rollout of the Company’s fully insured medical benefits program, including sales training and talent development, implementation of additional internal controls, and legal compliance, including data privacy. Additional individual goals focused on building an effective management team, implementation of a data driven revenue strategy, and improved management of vendor and procurement relationships and unemployment claims. In February 2024, consistent with the CEO’s recommendations, the Committee approved full payouts of the target discretionary bonus amount for each executive officer. Long-Term Equity Incentive Compensation In 2023, the Committee continued its practice of making annual grants of RSUs to the Company's executive officers under the Company’s 2020 Stock Plan. The Committee believes that RSUs provide a near-term opportunity to receive an ownership stake in the Company, thus serving as a significant incentive aligning the long-term interests of the executive team with the interests of the Company's stockholders. Each RSU represents a contingent right to receive one share of Common Stock. The RSUs granted to executive officers typically vest in four equal annual installments. The Committee fixed the dollar value of the annual RSU awards to executive officers granted on July 1, 2023, based on the closing sale price of the Common Stock on the date of grant, rounded down to the nearest whole share, as follows: Mr. Kramer, $1,234,500; Mr. Harris, $360,000; Mr. Blotz, $454,750; and Mr. Potts, $284,000. The awards are shown in the "All Other Stock Awards" column of the Grants of Plan-Based Awards table below. The vesting of performance share awards granted in 2023 is conditioned on attaining specified target cumulative amounts of gross billings and net income before taxes for the three-year period ending December 31, 2025. The target dollar values of performance shares granted on February 28, 2023, were: Mr. Kramer, $1,234,500; Mr. Harris, $270,000; Mr. Blotz, $321,000; and Mr. Potts, $142,000, with 50% of the performance shares tied to achievement of each financial metric. Target award amounts are subject to upward or downward adjustment by 2.5% for each one percent by which the actual achievement of a given financial metric is above or below the target level, but not less than 80% of the target level or more than 140% of the target level. If achievement is below the 80% level, no part of the target award tied to that financial metric would be paid. At the 80% level, 50% of the target award for the related financial metric would be paid. The maximum payout is 200% of a target award. The awards in terms of numbers of shares are shown in the "Estimated future payouts under equity incentive plan awards" column of the Grants of Plan-Based Awards table below. In February 2024, the Committee reviewed the achievement of performance goals for PSUs granted to the executive officers in early 2021. The awards had been tied to the achievement of net income before taxes and gross billings targets for the three-year period ended December 31, 2023, with each factor weighted equally. The Committee determined that the net income before taxes goal had been achieved at the 163.5% level; the adjustment multiplier yielded a payout at the maximum of 200.0% of the target award tied to that goal. The Committee determined that the gross billings goal had been achieved at the 107.9% level, yielding a payout of 119.7% of the target award tied to gross billings following upward adjustment. The overall payout totaled approximately 159.8% of the target awards. The PSUs were settled on February 26, 2024, resulting in the issuance of shares of Common Stock as follows: Mr. Kramer, 14,048; Mr. Harris, 3,465; Mr. Blotz, 3,755; and Mr. Potts, 3,003. Deferred Compensation Plan Under the Company’s Nonqualified Deferred Compensation Plan adopted in 2017, executive officers and other participants may defer receipt for income tax purposes of up to 90% of salary, as well as up to 100% of bonuses and other compensation. Deferred amounts are credited to each participant's account and adjusted to reflect amounts of income, gain, or loss as if the amounts credited to such accounts had been invested in investment funds designated under the plan and selected by the participant. The Committee also approved the establishment of a Rabbi trust under which compensation deferred at the election of participants is deposited in trust and held separately from the Company's other assets, subject to the claims of the Company's creditors in the event of its bankruptcy or insolvency. Although the Company does not make cash matching contributions to participants’ accounts under the plan, RSUs that cliff vest five years following the grant date are awarded each January 1 and July 1, with a matching award of RSUs equal to 35% of the amount deferred into a participant's account during the preceding six months, up to a maximum value of $75,000 per year. The RSU awards during 2023 are shown in the Grants of Plan-Based Awards table below. Additional information about the deferred compensation plan is included under "Nonqualified Deferred Compensation" below. Retirement Benefits Employees, including executive officers, may participate in the Company's 401(k) defined contribution plan. The Company matches each employee's contributions at a rate of 100% on the first 3% of salary deferrals and 50% on the next 2% of salary deferrals, with a maximum Company-paid match of $13,200. All executive officers participated in the 401(k) plan in 2023. Agreements with Executive Officers The Company entered into employment agreements with Messrs. Kramer, Harris, and Blotz in April 2020, and with Mr. Potts in August 2020. The employment agreements provide for the payment of severance benefits upon termination of the executive’s employment for specified reasons. Each agreement includes the executive’s agreement not to compete with the Company for a specified period following termination. The Committee approved the agreements with the goal of providing the Company's stockholders with greater assurance of stability within senior management. The employment agreements replaced prior agreements that provided for severance benefits only in the event of termination for specified reasons following a change in control of the Company. The Company has also entered into agreements with Messrs. Kramer, Blotz, Harris, and Potts that provide, in the event of the executive's death, for the Company to make a lump sum payment to the executive’s designated beneficiary. The agreements are intended to provide a benefit to each executive’s heirs in the event of his death while employed by the Company. The Committee approved each of the foregoing agreements, which are described under "Information Regarding Agreements with Executive Officers" below.

  12. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding compensation received by each individual who served as an executive officer of the Company during 2023.

  13. Summary Compensation Table

    | Name and Principal Position | Year | Salary | Bonus(1) | Stock Awards(2) | Non-Equity Incentive Plan Compensation(3) | Nonqualified Deferred Compensation Earnings | All Other Compensation(4) | Total Compensation | | Gary E. Kramer | 2023 | $814,115 | $205,750 | $1,926,165 | $735,356 | $184,189 | $106,230 | $3,971,805 | | President and Chief | 2022 | $782,304 | $197,500 | $2,049,915 | $1,154,398 | $(163,989) | $33,287 | $4,053,415 | | Executive Officer | 2021 | $751,585 | $190,000 | $972,903 | $1,054,500 | $25,227 | $20,777 | $3,014,992 | | Anthony J. Harris | 2023 | $436,538 | $90,000 | $569,951 | $321,662 | $134,103 | $26,149 | $1,578,403 | | Chief Financial | 2022 | $393,365 | $80,000 | $564,715 | $467,604 | $(37,452) | $12,200 | $1,480,432 | | Officer | 2021 | $368,462 | $75,000 | $378,298 | $416,250 | $12,206 | $11,771 | $1,261,987 | | Gerald R. Blotz | 2023 | $530,961 | $107,000 | $615,231 | $382,421 | $7,142 | $33,800 | $1,676,555 | | Chief Operating | 2022 | $514,692 | $104,000 | $675,946 | $607,886 | $(16,081) | $12,200 | $1,898,643 | | Officer | 2021 | $500,000 | $100,000 | $568,717 | $555,000 | $8,422 | $12,459 | $1,744,598 | | James R. Potts | 2023 | $350,962 | $71,000 | $379,927 | $253,756 | $48,239 | $13,200 | $1,117,084 | | General Counsel | 2022 | $336,019 | $68,000 | $458,612 | $397,464 | $(21,869) | $12,200 | $1,250,426 | | and Secretary | 2021 | $325,000 | $65,000 | $332,823 | $360,750 | $3,348 | $4,206 | $1,091,127 |

  14. Summary Compensation Table

    (1) The amounts shown represent cash bonuses awarded based on each officer’s individual performance by the Compensation Committee. Additional information regarding the Company's annual cash bonus program appears under the subheading "Compensation Discussion and Analysis" above. (2) The amounts shown include the grant date fair value of RSUs granted to executive officers under the 2020 Stock Plan using the closing price of the Common Stock on the grant date. Both grants of RSUs, and RSUs awarded as a matching contribution under the Company’s nonqualified deferred compensation plan, are included. Assumptions regarding forfeitures are ignored. Each RSU represents a contingent right to receive one share of Common Stock. Additional details regarding the terms of the RSU awards are described below under "Incentive Compensation." Additionally, the amounts shown include the grant date fair value of awards of PSUs in 2021, 2022 and 2023 under the 2020 Stock Plan that reflect the probable outcome with respect to target levels of performance conditions as of the date of grant of 81% for the two-year 2021 awards, 0% for the three-year 2021 awards, 100% for the 2022 awards, and 50% for the 2023 awards. The value of the 2023 PSUs at the grant date, assuming the highest level of achievement, is as follows: Mr. Kramer, $2,469,000; Mr. Harris, $540,000; Mr. Blotz, $642,000; and Mr. Potts, $284,000. (3) Amounts shown represent performance-based cash bonuses earned pursuant to the Company's Annual Incentive Plan during the years shown. Additional information regarding awards under the program appears under the subheadings "Compensation Discussion and Analysis" above and "Incentive Compensation" below. (4) Amounts shown for 2023 represent the incremental cost to the Company of personal use of the corporate aircraft by Mr. Kramer and Mr. Harris and club membership dues for Mr. Kramer and Mr. Blotz, the primary purpose of which was business. Amounts also include employer contributions to the 401(k) plan of $13,200. The incremental cost to the Company of personal use of the corporate aircraft was calculated using the variable costs of operating the aircraft, such as fuel, trip-related maintenance, crew travel expenses, landing fees and other miscellaneous variable costs. The incremental cost to the Company of Mr. Kramer's personal use of the corporate aircraft was $81,844 in 2023. Mr. Potts did not receive perquisites or other personal benefits with a total value exceeding $10,000 during 2023.

  15. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing the following information about the relationship between the annual total compensation of our employees and the annual total compensation of our CEO for 2023, our last completed fiscal year: The annual total compensation of our CEO was $3,971,805. • The median of the annual total compensation of all of our employees other than our CEO (based on our median employee identified under the methodology described below) was $111,000. • The resulting ratio of our CEO's annual total compensation to the annual total compensation of our median employee is 36 to 1. The pay ratio stated above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records. The SEC's rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratios reported by other companies may not be comparable to our pay ratio stated above. We completed the following steps to identify the median of the annual total compensation of our employees and to determine the annual total compensation of our median employee and CEO: • On December 31, 2023, the date we used to determine the employees to be included in our ratio calculation, our employee population consisted of approximately 820 individuals, including full-time, part-time and temporary employees (excluding temporary staffing employees) employed on that date. • The employee number excludes the employees of our professional employer services clients, as those clients determine the compensation of their employees. Similarly, the number excludes our temporary staffing employees who work at our customers' job sites, because the compensation paid to such employees is established by our customer's order. • To find the median of the annual total compensation of the individuals (other than our CEO) in our employee population as described above, we used wages from our payroll records as reported to the Internal Revenue Service on Form W-2 for the fiscal year 2023. In making this determination, we annualized the compensation of full-time and part-time permanent employees who were employed on December 31, 2023, but who did not work for us the entire year. No full-time equivalent adjustments were made. • We identified our median employee using this compensation measure and methodology, which was consistently applied to all employees included in the calculation. • After identifying the median employee, we added together all of the elements of that employee’s compensation for calendar year 2023 in accordance with the requirements applicable to calculating annual total compensation for purposes of the Summary Compensation Table above. For the annual total compensation of our CEO, we used the amount reported for our CEO in the "Total" column for 2023 in the Summary Compensation Table above.

  16. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The following table sets forth information regarding nonqualified deferred compensation received by the persons serving as executive officers of the Company during 2023.

  17. Nonqualified Deferred Compensation

    | Name | Executive Contributions in 2023 (1) | Company Contributions in 2023 | Aggregate Earnings in 2023 | Aggregate Withdrawals/Distributions in 2023 | Aggregate Balance at 12/31/2023 | | Gary E. Kramer | $226,000 | — | $184,189 | (243,050) | $1,287,603 | | Anthony J. Harris | $301,302 | — | $134,103 | (20,258) | $790,222 | | Gerald R. Blotz | — | — | $7,142 | (11,778) | $51,036 | | James R. Potts | $64,538 | — | $48,239 | — | $275,322 |

  18. Nonqualified Deferred Compensation

    (1) Amounts are also included in the Salary, Bonus and Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table above. On July 1, 2017, the Barrett Business Services, Inc. Nonqualified Deferred Compensation Plan (the "NDCP") was established, in which upper management, including executive officers, are eligible to participate. Key features of the NDCP are as follows: Deferrals. Participants may make an advance election to defer up to 90% of their annual base salary, 100% of annual cash performance and discretionary bonuses, and 100% of other compensation as permitted in the Company’s discretion. • Vesting. Participants are immediately vested in credits for their contributions and related earnings. • Form of Payment. Participants may make elections regarding distribution of their vested account balance in accordance with the terms and conditions set forth in the NDCP. The payment may be in a lump sum on a specified date at least five years following the end of the period in which the deferred amount was earned (an "in-service distribution") or on the first business day of the seventh month following separation from service. Alternatively, for in-service distributions or distributions following retirement at or after age 60 with at least 10 years of service, the distribution may be paid in up to 10 equal annual installments. A lump-sum distribution will be made 60 days following death or disability. Distributions are also permitted in the event of an unforeseeable emergency. Subsequent deferral elections with respect to deferred amounts are also permitted. • Earnings on Account Balances. Participants may allocate the amounts deferred into their accounts under the NDCP among 30 investment fund alternatives offered by the Company. Investment instructions may be submitted on any business day. Hypothetical gains and losses are credited to participant accounts based on their investment elections. The following table shows investment fund alternatives selected by participants during 2023 and annualized returns for each investment alternative for 2023:

  19. Nonqualified Deferred Compensation

    | Fund | Performance | | American Funds American Balanced R6 Fund | 14.4% | | American Funds EuroPacific Growth R6 Fund | 16.1% | | Delaware Small Cap Value R6 Fund | 9.7% | | MFS Value R6 Fund | 8.3% | | PGIM Total Return Bond R6 Fund | 7.8% | | Vanguard 500 Index Admiral Fund | 26.2% | | Vanguard Developed Markets Index Admiral Fund | 17.7% | | Vanguard Growth Index Admiral Fund | 46.8% | | Vanguard Mid Cap Index Admiral Fund | 16.0% | | Vanguard Small Cap Growth Index Admiral Fund | 21.4% | | Vanguard Small Cap Value Index Admiral Fund | 16.0% | | Vanguard Target Retirement 2020 Inv Fund | 12.5% | | Vanguard Target Retirement 2030 Inv Fund | 16.0% | | Vanguard Target Retirement 2040 Inv Fund | 18.3% | | Vanguard Target Retirement 2050 Inv Fund | 20.2% | | Vanguard Target Retirement Income Inv Fund | 10.7% | | Vanguard Total Bond Market Index Admiral Fund | 5.7% | | Vanguard Value Index Admiral Fund | 9.2% | | Virtus Ceredex Mid-Cap Value Equity R6 Fund | 11.2% | | American Funds 2025 Target Date Retirement Fund R6 | 11.9% | | American Funds 2030 Target Date Retirement Fund R6 | 14.5% | | American Funds 2035 Target Date Retirement Fund R6 | 16.9% | | American Funds 2045 Target Date Retirement Fund R6 | 20.2% | | American Funds 2050 Target Date Retirement Fund R6 | 20.8% | | AMG Yacktman I | 15.4% | | Edgewood Growth Fund | 39.7% | | Federated Hermes Instl High Yield Bd IS | 13.1% | | Fidelity Growth Discovery K | 35.8% | | Investco Gold & Special Minerals R6 | 6.8% | | iShares S&P 500 Index K | 26.2% | | MFS New Discovery Value R6 | 11.3% | | T. Rowe Price Large-Cap Growth Fund | 46.2% | | Vanguard Mid-Cap Growth Index Admiral | 23.1% |

  20. Nonqualified Deferred Compensation

    The Company does not make cash matching contributions to participants’ accounts in the NDCP. However, as an incentive to participate in the NDCP and as a retention tool, the Committee approved the automatic award of RSUs under the 2020 Stock Plan each January 1 and July 1 to participants in the NDCP based on the fair market value of a share on the grant date, with a total dollar value equal to 35% of the amount deferred into the participant's account under the NDCP during the preceding six months. The grant date fair value of RSUs awarded to a single participant in connection with the NDCP is limited to $75,000 per year. The restriction period for RSUs awarded in connection with the NDCP will expire, and the RSUs will vest in full, on the fifth anniversary of the grant date, so long as the participant continues to be an employee of the Company on the vesting date. Vesting of the RSUs will be accelerated if the participant ceases to be an employee due to death or disability or in the event of a change in control of the Company. RSUs that do not vest on or before the expiration of the restriction period are forfeited. A total of 1,997 RSUs were granted to executive officers in connection with the NDCP during 2023. The grants are shown under "Outstanding Equity Awards at December 31, 2023" above.

  21. Pay Versus Performance

    Pay Versus Performance

  22. Pay Versus Performance

    | | Summary Compensation Table Total for the | | | | Average Summary Compensation Table Total for | Average Compensation | Value of Initial Fixed $100 Investment based on: | | | | | Year | Principal Executive Officer ("PEO") (1) | Compensation Actually Paid to the PEO (1) | Summary Compensation Table Total for the PEO ⁽²⁾ | Compensation Actually Paid to the PEO ⁽²⁾ | Non-PEO Named Executive Officers ("NEO's") (3) | Actually Paid to Non-PEO NEOs (3) | Total Shareholder Return | Peer Group Total Shareholder Return (4) | Net Income (in thousands) (5) | Gross Billings (in thousands) (6) | | 2023 | $3,971,805 | $6,334,933 | N/A | N/A | $1,457,347 | $2,088,313 | $137 | $121 | $50,612 | $7,716,152 | | 2022 | $4,053,415 | $6,968,326 | N/A | N/A | $1,543,168 | $2,418,831 | $109 | $114 | $47,268 | $7,393,808 | | 2021 | $3,014,992 | $4,080,497 | N/A | N/A | $1,365,904 | $1,639,683 | $79 | $152 | $38,079 | $6,569,986 | | 2020 | $1,951,055 | $512,462 | $1,353,477 | $(2,489,129) | $969,239 | $(63,772) | $77 | $101 | $33,765 | $5,924,539 |

  23. Pay Versus Performance

    (1) Except as otherwise provided above, Mr. Kramer was the PEO for all four years presented in the table. Mr. Elich was the PEO until he retired from the Company on March 5, 2020. A reconciliation of the Summary Compensation Table and Compensation Actually Paid totals for 2023 is as follows:

  24. Pay Versus Performance

    | Current PEO SCT Total to CAP Reconciliation | 2023 | | Total Compensation as reported in Summary Compensation Table | $3,971,805 | | Subtract grant date fair value of equity awards granted during 2023 | $(1,926,165) | | Add year-end fair value of equity awards granted in 2023 that are outstanding and unvested as of last day of 2023 | $2,536,136 | | Add/subtract change in fair value from last day of prior year to last day of 2023 of any awards granted in prior years that are outstanding and unvested as of last day of 2023 | $1,769,451 | | Add/subtract the amount of change in fair value from last day of prior year to the vesting date for awards granted in prior years that vested in 2023. | $(13,962) | | Subtract the amount of fair value at the end of the prior fiscal year for awards granted in prior years that forfeited during 2023. | $(2,332) | | Compensation Actually Paid to PEO | $6,334,933 |

  25. Pay Versus Performance

    (2) Mr. Elich was the PEO until he retired from the Company on March 5, 2020. (3) For 2021, 2022, and 2023, Mr. Harris, Mr. Blotz, and Mr. Potts were the Non-PEO NEOs. For 2020, Mr. Harris, Mr. Blotz, Mr. Potts, and Heather Gould were the Non-PEO NEOs. A reconciliation of the Summary Compensation Table and Compensation Actually Paid totals for 2023 is as follows:

  26. Pay Versus Performance

    | NEO Average SCT Total to CAP Reconciliation | 2023 | | Total Compensation as reported in Summary Compensation Table | $1,457,347 | | Subtract grant date fair value of equity awards granted during 2023 | $(521,703) | | Add year-end fair value of equity awards granted in 2023 that are outstanding and unvested as of last day of 2023 | $688,392 | | Add/subtract change in fair value from last day of prior year to last day of 2023 of any awards granted in prior years that are outstanding and unvested as of last day of 2023 | $474,872 | | Add/subtract the amount of change in fair value from last day of prior year to the vesting date for awards granted in prior years that vested in 2023. | $(9,973) | | Subtract the amount of fair value at the end of the prior fiscal year for awards granted in prior years that forfeited during 2023. | $(622) | | Compensation Actually Paid to non-PEO NEOs | $2,088,313 |

  27. Pay Versus Performance

    (4) Peer Group Total Shareholder Return is calculated based on the S&P 1500 Human Resource & Employment Services Index, a published industry index that is considered reflective of the Company's peers, for each respective year shown in the table, assuming an initial investment of $100 on December 31, 2019. (5) Reflects after-tax net income prepared in accordance with GAAP for each of the years shown. (6) Gross billings is the financial measure in the Company’s assessment that represents the most important performance measure used to link Company performance to compensation actually paid to our PEOs and other NEOs, as it is the primary metric used in understanding the volume of the Company's business and serves as an important performance metric in managing the Company's operations, including the preparation of internal operating forecasts and establishing executive compensation performance goals. We calculate gross billings by including direct payroll costs that would otherwise be excluded from professional employer organization revenue because we are not the primary obligor for wage payments to our clients' employees. Relationship between Compensation Actually Paid and Financial Performance Measures Compensation Actually Paid ("CAP") to Mr. Kramer and total shareholder return were both higher in 2023, 2022 and 2021 compared to 2020. The increase in Mr. Kramer’s compensation is primarily the result of the increase in the Company’s stock price between 2020 and 2023. The average NEO CAP was also higher in 2023, 2022 and 2021 compared to 2020, primarily due to the increase in the Company’s stock price during this time. Total Shareholder Return increased from 2020 to 2023 primarily due to the increase in the Company’s stock price during this period. Net Income and Gross Billings also increased between 2020 and 2023. Each of these metrics is directionally aligned with the increases in CAP for both Mr. Kramer and the other NEOs during the same period. While the Company's Total Shareholder Return increased each year from 2020 to 2023, Total Shareholder Return for the Company's peer group increased between 2020 and 2021 as well as 2022 and 2023, but decreased from 2021 to 2022.

  28. Pay Versus Performance

    | Most Important Measures (Unranked) | | Gross Billings | | Net Income Before Taxes | | Gross Margin as a percentage of Gross Billings | | Net Income | | Growth in Gross Billings |