DEF 14A of Insperity, Inc.
Filed Apr 14, 2026 · FY20250001000753-26-000043
TABLE OF CONTENTS
| Option Exercises and Stock Vested Table for Fiscal Year 2025 | 45 | | Securities Reserved for Issuance Under Equity Compensation Plans Table | 45 | | Potential Payments Upon Termination or Change in Control | 45 | | CEO Pay Ratio | 48 | | Pay Versus Performance | 48 | | Director Compensation | 52 | | Directors’ Compensation Table | 53 | | Report of the Finance, Risk Management and Audit Committee | 53 | | Certain Relationships and Related Transactions | 54 | | Proposal Number 2 | 55 | | Proposal Number 3 | 57 | | Proposal Number 4 | 65 | | General | 65 | | Fees of Ernst & Young | 65 | | Finance, Risk Management and Audit Committee Pre-Approval Policy for Audit and Non-Audit Services | 65 | | Required Affirmative Vote | 65 | | Additional Information | 66 | | Delivery of Proxy Statement | 66 | | Stockholder Proposals and Director Nominations for 2026 Annual Meeting of Stockholders | 66 | | Stockholder Proposals for Inclusion in Our 2027 Proxy Statement | 66 | | Stockholder Director Nominations and Proposals for 2027 Annual Meeting of Stockholders | 66 | | Financial Information | 67 | | Appendix A - Insperity, Inc. Incentive Plan | | | Appendix B - Second Amendment to the Insperity, Inc. Incentive Plan | |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
Nominees for Director
Nominees for Director The following individuals have been nominated for re-election to the Board as Class I directors with terms expiring at the 2029 Annual Meeting of Stockholders:
Nominees for Director
| Insperity | 5 | 2026 Proxy Statement |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
| | Timothy T. Clifford | •Lead Independent Director •Director since: 2016 •Age: 70 •Committees: Compensation Committee (Chair); Nominating and Corporate Governance Committee |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
Mr. Clifford joined the Board as a director in October 2016 and he currently serves as the Company’s lead independent director. From September 2019 through December 2023, Mr. Clifford served as an operating partner and consultant to Welsh, Carson, Anderson and Stowe (“WCAS”), a private equity firm focused on investments in the technology and healthcare industries. In connection with investments by WCAS, he served on the board of directors of EMS LINQ, Inc., a cloud-based financial software solution for K-12 school districts in the U.S. from December 2021 through December 2023, and of Absorb Software, an enterprise learning management software company, from May 2021 until March 2022. From June 2015 through March 2019, Mr. Clifford served as president and chief executive officer of Frontline Education, a private-equity-backed cloud software company that manages human resources functions at over 80,000 public and private schools in the U.S. He is also a co-founder of the Frontline Research and Learning Institute, as well as The Line, a publication sharing new ideas and insight while encouraging civil discourse on the most challenging problems facing K-12 educators and administrators. Prior to joining Frontline Education, from 2010 through 2013, Mr. Clifford was a corporate officer and co-president of Automatic Data Processing (NYSE: ADP) National Accounts, a $2.5 billion human capital management software and services business serving the largest U.S. companies, and was the co-founder and chief executive officer of Workscape, Inc., a pioneering cloud software provider to the human capital management industry, from 1999 until its acquisition by ADP in 2010. Prior to founding Workscape, he held chief executive officer or senior leadership positions at HealthPlan Services, Consolidated Group and Prudential Insurance Company. From 2013 to 2015, he also served as a director and audit committee member of Carbonite Inc. (Nasdaq: CARB). Mr. Clifford holds a Bachelor of Liberal Arts degree from Northeastern University in Boston. Mr. Clifford brings extensive technology, entrepreneurial and leadership experience to the Board. His substantial experience with providing HR-related services to businesses, along with his entrepreneurial background and knowledge of cloud-based software solutions for the HR services industry, provide key perspectives to the Board on matters that directly impact our business and the businesses of our customers.
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
| | Ellen H. Masterson | •Independent Director •Director since: 2017 •Age: 75 •Committees: Finance, Risk Management and Audit Committee (Chair) |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
Ms. Masterson joined the Company as a director in September 2017. Since 2014, Ms. Masterson has served as an independent director of Westwood Holdings Group (NYSE: WHG), an investment management firm with over $10 billion in assets under management, and Westwood Trust, a Texas state-chartered trust company. Ms. Masterson is the chair of the audit committee of both WHG and Westwood Trust and serves as a member of the nominating and governance committee and compensation committee of WHG. She joined the Board of Governors of The Doctors Company, a leading physician-owned medical malpractice insurer, in 2018 where she serves as the chair of the finance committee and as a member of the audit committee. Ms. Masterson retired as a partner with PricewaterhouseCoopers LLP ("PwC") in 2008, having served in this capacity since 1999 and from 1985 to 1997. At PwC, Ms. Masterson specialized in audits of companies involved in several sectors of the financial services industry and public companies with a focus on mergers and acquisitions. She held senior positions within the leadership of PwC from 2001 to 2008, including international responsibilities across the global network of PwC firms. From 1997 to 1999, Ms. Masterson served as senior vice president and chief financial officer of American General Corporation, prior to its acquisition by American International Group, Inc. Since 1982, she has served on numerous boards of non-profit and charitable organizations. Ms. Masterson brings extensive knowledge of financial reporting and accounting issues faced by companies in the business services industry, as well as experience with strategic planning and corporate governance. With her experience as a partner in an international accounting firm, as a chief financial officer for a public company, and as an audit
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
| Insperity | 6 | 2026 Proxy Statement |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
committee member of a public company board, Ms. Masterson strengthens the Board’s financial reporting and accounting acumen, and provides significant expertise from which she can draw to advise and consult with the Board and management on financial and audit-related matters.
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
| | Latha Ramchand | •Independent Director •Director since: 2019 •Age: 65 •Committees: Finance, Risk Management and Audit Committee |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
Dr. Ramchand joined the Company as a director in December 2019. Dr. Ramchand currently serves as Chancellor, and Executive Vice President, Indiana University, Indianapolis, a role she assumed in February 2024. Prior to that, she served as Executive Vice Chancellor and Provost at the University of Missouri from 2018 to 2024. Previously, Dr. Ramchand served as dean of the C.T. Bauer College of Business of the University of Houston from 2011 to 2018. In these roles she has overseen enrollment growth, expansion of research and fund raising, in addition to connecting academic programming to industry and community needs. Dr. Ramchand is also a certified financial analyst and served on the advisory board of the CFP Board of Standards from 2019 to 2022. She received her Ph.D., Finance, from the Kellogg Graduate School of Management of Northwestern University in 1993, her M.A., Economics, from the University of Bombay in 1983 and a B.A., Economics, also from the University of Bombay in 1981. Dr. Ramchand brings substantial leadership and financial experience to the Board, including extensive experience in managing large and complex organizations and ensuring fiscal responsibility in the management of academic enterprises and academic health centers. In addition, Dr. Ramchand’s experience with entrepreneurship and generational changes bolsters our Board’s insight into an important part of our client base.
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
| | W. Philip Wilmington | •Independent Director •Director since: 2024 •Age: 67 •Committees: Compensation Committee |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
Mr. Wilmington joined the Company as a director and as a member of the Compensation Committee in May 2024. Mr. Wilmington most recently served as Vice-Chairman of Workday, Inc. (Nasdaq: WDAY), a leading provider of solutions to help organizations manage their people and money, from 2018 until his retirement in May 2024. Mr. Wilmington first joined Workday in February 2015 as Executive Vice President Field Operations, and he served as its Co-President from June 2015 until his appointment to Vice-Chairman. From September 2012 to January 2015, Mr. Wilmington was the President and Chief Operating Officer of Tidemark Systems, Inc., a provider of corporate performance management software for planning, budgeting, forecasting, and analytics. Mr. Wilmington also previously served as the Chief Executive Officer of OutlookSoft, an enterprise performance management software company, from 2005 to 2007. From 1992 until 2004, Mr. Wilmington held various leadership positions at PeopleSoft, a global enterprise software company, including Executive Vice President, Americas from 2000 until October 2004 and Co-President for the remainder of 2004. In addition, from 2007 until 2019, he served as a director of a privately-held bank. Mr. Wilmington received a bachelor’s degree in marketing from Bradley University and previously served on Bradley University’s Board of Trustees. Mr. Wilmington brings substantial experience in the HR software sector, including human capital management (“HCM”) software solutions. His leadership at innovative, growth-oriented technology companies provides key perspectives and substantial insight to the Board regarding the development, operations, marketing, and sales of HCM solutions, which are integral to our business and our clients.
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
| The Board recommends that stockholders vote “For” all of the nominees listed above, and proxies executed and returned will be so voted unless contrary instructions are indicated thereon. |
Class I Directors (Term Expires at 2026 Annual Meeting of Stockholders)
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Directors Not Currently Subject to Election
Directors Not Currently Subject to Election The following directors are not subject to election at the 2026 Annual Meeting of Stockholders:
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
| | Carol R. Kaufman | •Independent Director •Director since: 2013 •Age: 76 •Committees: Nominating and Corporate Governance Committee (Chair); Compensation Committee |
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
Ms. Kaufman joined the Company as a director in November 2013. From July 2011 through April 2018, Ms. Kaufman served as the executive vice president, secretary, chief administrative officer and chief governance officer of The Cooper Companies, Inc. (NYSE: COO), a global medical device company, where she had previously served in a variety of capacities since October 1995, including as vice president of legal affairs beginning in March 1996 and senior vice president beginning in October 2004. From January 1989 through September 1995, she served as vice president, secretary and chief administrative officer of Cooper Development Company, a former affiliate of The Cooper Companies, Inc. Beginning in 1971, Ms. Kaufman held several financial positions, including deputy corporate controller, with Cooper Laboratories, Inc., the former parent of The Cooper Companies, Inc. Ms. Kaufman also served as a member of the western region advisory board for FM Global, the world’s largest property insurer. Ms. Kaufman has served on the University Advisory Board for Boston University and on the board of the University of St. Andrews American Foundation. Ms. Kaufman served as a director of Chindex, Inc. (former Nasdaq-listed company) from November 2000 until September 2014, serving on its audit and compensation committees and as chair of its governance and nominating committee, and as a member of its special transaction committee until its sale in 2014 to TPG. Ms. Kaufman earned a Bachelor of Science degree in Mathematics in 1971 from Boston University. Ms. Kaufman brings extensive financial and business experience, including in corporate governance, risk management, executive compensation and employee benefits to the Board. Her varied roles within The Cooper Companies, Inc. and prior board service provide the Board with additional expertise on governance and on evaluating and executing strategic initiatives.
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
| | John L. Lumelleau | •Independent Director •Director since: 2019 •Age: 74 •Committees: Finance, Risk Management and Audit Committee |
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
Mr. Lumelleau joined the Company as a director in December 2019. Mr. Lumelleau served as the president and chief executive officer of Lockton, Inc., the largest privately held independent insurance broker and a top 10 insurance broker globally, from 2002 until his retirement in 2017. Following his retirement, he served as an independent advisor to Lockton until 2021 and continues to serve on the board of directors of Lockton. Since November 2022, Mr. Lumelleau has served as a non-executive director of Premium Credit Limited, a privately-held specialty provider of installment financing supporting the purchase of insurance policies and other services that operates in the UK and Ireland, where he is also a member of their audit, risk and finance committee. In 2019, he also became chairman of the board of Orchid Underwriters Agency, LLC, a leading specialty underwriter of catastrophe exposed property insurance, and is a member of the management advisory board of TowerBrook Capital Partners. While he served as president and chief executive officer, Lockton’s revenues grew from $92 million to $1.4 billion and it expanded from 7 offices to 85 offices globally. Previously, he served as president of Lockton from 2000 to 2002 and as operations executive from 1997 to 1999. Prior to joining Lockton, Mr. Lumelleau held various roles at Alexander & Alexander, Inc. and its successor, AON Risk Services, from 1976 until 1997, including executive vice president of global retail sales. He currently serves on the board of trustees of Fordham University and previously served on the Board of Overseers of the St. John’s University School of Risk Management & Actuarial Sciences and the board of directors of The Council of Insurance Agents and Brokers. Mr. Lumelleau holds a Bachelor of Arts from Fordham University.
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
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Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
Mr. Lumelleau brings substantial leadership, industry and business experience to the Board, including an extensive knowledge of the insurance industry. Mr. Lumelleau’s previous experience as the long-time CEO of the world’s largest privately held insurance brokerage firm provides the Board with substantial knowledge, insight and key perspectives related to risk management and the opportunities and challenges faced by growth-oriented organizations.
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
| | Paul J. Sarvadi | •Chairman of the Board and Chief Executive Officer •Director since: 1986 •Age: 69 |
Class II Directors (Term Expires at 2027 Annual Meeting of Stockholders)
Mr. Sarvadi, co-founder of the Company and its subsidiaries, has been a director since the Company’s inception in 1986. He has also served as the Chairman of the Board and Chief Executive Officer of the Company since 1989 and as president of the Company from 1989 to August 2003. He attended Rice University and the University of Houston prior to starting and operating several small companies. Mr. Sarvadi has served as president of the National Association of Professional Employer Organizations (“NAPEO”) and was a member of its board of directors for five years. In 2001, Mr. Sarvadi was selected as the 2001 National Ernst & Young Entrepreneur of the Year ® for service industries. In 2004, he received the Conn Family Distinguished New Venture Leader Award from Mays Business School at Texas A&M University. In 2007, he was inducted into the Texas Business Hall of Fame. Mr. Sarvadi brings substantial business and operational experience to the Board, including an extensive knowledge of sales, customer relationships, and issues affecting small to medium-sized businesses. Mr. Sarvadi’s role as a co-founder of the Company and lengthy service as chief executive officer of the Company provide to the Board extensive knowledge and insight of our operations and issues affecting the Company as well as the broader Professional Employer Organization (“PEO”) industry. Mr. Sarvadi’s previous experience starting and operating several small businesses, as well as his frequent interaction with the Company’s clients, provide valuable insight to the challenges facing small to medium-sized businesses, which is a principal focus of the Company.
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
| | Eli Jones | •Independent Director •Director since: 2020 •Age: 64 •Commonality, Equality, & Cohesion Board Liaison |
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Dr. Eli Jones rejoined the Company as a Class III director in December 2020. Since June 2021, Dr. Jones has served as a marketing professor and endowed chair at Mays Business School at Texas A&M University. From July 2015 through May 2021, Dr. Jones served as the Dean of the Mays Business School. Dr. Jones has served as a member of the board of directors of First Financial Bankshares, Inc. (Nasdaq: FFIN) since January 2022. He has also served on the board of trustees of the Invesco family of funds since 2016, and served on their Governance Committee from 2016 until 2021. Dr. Jones was also a director of the Company from 2004 through June 2016. Before joining the Mays Business School, from 2012, he was the Dean of the Sam M. Walton College of Business at the University of Arkansas and holder of the Sam M. Walton Leadership Chair in Business. Prior to joining the faculty at the University of Arkansas, he was Dean of the E.J. Ourso College of Business and Ourso Distinguished Professor of Business at Louisiana State University (“LSU”) from 2008 to 2012; and Professor of Marketing and Associate Dean at the C.T. Bauer College of Business at the University of Houston from 2007 to 2008, where he also was an Associate Professor of Marketing from 2002 to 2007; and an assistant professor from 1997 until 2002. He taught at Texas A&M University for several years before joining the faculty of the University of Houston. Dr. Jones served as the executive director of the Program for Excellence in Selling and the founding director of the Sales Excellence Institute at the University of Houston from 1997 to 2007. Before becoming a professor, he worked in sales and sales management for three Fortune 100 companies: Quaker Oats, Nabisco and Frito-Lay. Dr. Jones has also published three books and approximately 50 research articles in leading peer-reviewed academic journals in sales and sales management. He received his Bachelor of Science degree in Journalism in 1982, his MBA in 1986, and his Ph.D. in 1997, all from Texas A&M University.
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
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Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Dr. Jones brings to the Board significant experience and cutting-edge knowledge and expertise. He is considered a “sales scientist” in that he conducts and publishes cutting-edge research in sales, sales management, marketing strategy, leadership and customer relationship management based on data from organizations world-wide, which are areas critical to the Company. Dr. Jones is able to draw upon his research to provide the Board knowledge with respect to the Insperity sales force. Dr. Jones’ prior service as Dean of the Mays Business School at Texas A&M University; Dean of the E.J. Ourso College of Business and Ourso Distinguished Professor of Business at LSU, Dean of the Sam M. Walton College of Business at the University of Arkansas and holder of the Sam M. Walton Leadership Chair in Business, demonstrate his leadership and broad-based business acumen.
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
| | Randall Mehl | •Independent Director •Director since: 2017 •Age: 58 •Committees: Compensation Committee |
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Mr. Mehl joined the Company as a director in December 2017. Mr. Mehl has served on the boards of ICF International, Inc. (Nasdaq: ICFI), a global consulting and technology services provider, since September 2017, and Kforce Inc. (Nasdaq: KFRC), a professional staffing firm, since January 2017. Since January 2024, he has also served on the board of Krueger International, a private company that provides contract furniture solutions. Mr. Mehl is the president of Stewardship Capital Advisors, LLC, which manages a family-office equity fund focused on making investments in business and technology services. Previously, he served as a managing director and a partner with Baird Capital, a middle market private equity group, and led a team focused on the business and technology services sector from 2005 until the end of 2016. From 1996 to 2005, Mr. Mehl was a senior equity research analyst with Robert W. Baird & Company, covering various areas within the broader business and technology services sector, including professional employer organizations. Prior to earning an MBA from The University of Chicago’s Booth School of Business in 1996, Mr. Mehl designed, developed, and used technology systems at Accenture and The Capital Group from 1990 to 1994. In addition to his public board experience, Mr. Mehl previously served on several private company boards and on the investment committee for several funds, and has expertise analyzing, acquiring, and selling businesses. Mr. Mehl brings extensive experience in the technology and business process outsourcing sectors, including PEOs, which are directly relevant to our company’s objectives. His background as an investor, adviser and board member focused on these industries provides an important investor perspective to the Board and provides key insight to the Board as it analyzes our long-term objectives. Further, due to his experience in technology and with technology companies involved in software development and cybersecurity, Mr. Mehl brings additional insights to the Board regarding these areas that are critical to our business.
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
| | John M. Morphy | •Independent Director •Director since: 2016 •Age: 78 •Committees: Finance, Risk Management and Audit Committee |
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Mr. Morphy joined the Company as a director in May 2016. Mr. Morphy previously served as senior vice president, chief financial officer, secretary and treasurer of Paychex, Inc. (Nasdaq: PAYX), a leading provider of payroll, human resource, and benefits outsourcing solutions for small to medium-sized businesses, from October 1996 until June 2011, at which time he was appointed vice president of finance at Paychex until he retired in January 2012. As chief financial officer of Paychex, Mr. Morphy reported directly to the chief executive officer and was responsible for all finance, legal, shareholder relations, purchasing, real estate and travel functions. Prior to joining Paychex in 1995, he served as the chief financial officer of Goulds Pumps, Inc., a then publicly traded global manufacturer of pumps for industrial, commercial and water supply markets, from 1985 to 1993, and as group vice president over industrial products at Goulds through 1995. From 1976 to 1985, Mr. Morphy was vice president and controller for Computer Consoles, Inc., and before that he was an accountant at Arthur Andersen & Company, an accounting firm. Mr. Morphy also previously served as a director of Inforte Corp., a then publicly traded customer and demand management consultancy, from April 2003 to August 2004. He earned his Bachelor of Science in Accounting from LeMoyne College and his Certified Public Accountant certificate in 1973. Mr. Morphy was originally appointed to the Board pursuant to a prior agreement with a former significant stockholder.
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
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Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Mr. Morphy brings extensive financial, accounting and industry experience to the Board. His more than 20 years of financial leadership experience for various public corporations and experience in many facets of finance within varied environments, including rapid growth companies, global Fortune 500 industrial companies and major accounting firms, provide substantial knowledge and insight that are valuable to the Board.
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
| | Richard G. Rawson | •Director since: 1989 •Age: 77 |
Class III Directors (Term Expires at 2028 Annual Meeting of Stockholders)
Mr. Rawson has been a director of the Company since 1989. In May 2018, Mr. Rawson retired from his position as president of the Company, a position that he had held since August 2003. Before being elected president, he served as executive vice president of administration, chief financial officer and treasurer of the Company from February 1997 until August 2003. Prior to that, he served as senior vice president, chief financial officer and treasurer of the Company since 1989. Before joining the Company in 1989, Mr. Rawson served as a senior financial officer and controller for several companies in the manufacturing and seismic data processing industries. He is the past president of the NAPEO. Mr. Rawson currently serves on the Executive Advisory Committee of the Bauer College Board of the C.T. Bauer College of Business at the University of Houston. Additionally, he is co-founder and chairman of Sciolytix, Inc., co-founder and partner of Trinity Legacy Partners, a registered investment advisory firm, and co-founder and chairman of Del Monte Capital, a private equity firm. Mr. Rawson has a Bachelor of Business Administration degree in Finance from the University of Houston and received a Doctor of Humane Letters (honorary) from the University of Houston in December 2020. Mr. Rawson brings financial and operational experience to the Board. His lengthy service as president of the Company, as well as his prior service as chief financial officer and treasurer of the Company, provide in-depth knowledge and insight of Company operations and financial matters to the Board.
Financial Highlights
Financial Highlights During 2025, the Company continued to invest significant human capital and financial resources in support of achieving phase two of our plans to jointly develop, market and sell a new full-service human resources solution for small and midsize businesses with Workday, Inc. (“Workday”), and preparing to launch this new HRScale solution. We believe that this new HRScale solution launching in early 2026 has the potential to positively impact the long-term growth and profitability of the Company. Most of the investment associated with these development efforts were reflected as expenses, resulting in adjusted EBITDA of $131 million, which is lower compared to the prior year. Despite the continued strong execution of our leadership team and employees during 2025 and improved client retention, the continuation of widespread economic uncertainty resulted in a 0.9% increase in our average number of worksite employees (“WSEEs”) paid during 2025 compared to 2024. While growth in average WSEEs paid fell short of expectations, our operating profitability allowed us to maintain our regular quarterly dividend at $0.60 per share, resulting in record regular annual dividends of $2.40 per share. Consistent with our pay-for-performance approach of tying a significant portion of NEOs compensation to corporate performance, our reduced performance resulted in below target level performance payouts under our annual incentive program, and 0% achievement of the 2025 EBITDA tranches and 2023-2025 relative total shareholder return portion of our performance awards. See “— 2025 Short-Term Incentive Program Performance Results,” “2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”),” “2024 LTIP Awards,” and “2023 LTIP Awards” later in this CD&A for additional details.
Our Pay-for-Performance Compensation Philosophy
| Compensation Objective | How we accomplish our objectives | | | Attract, retain and motivate high-performing individuals to achieve our annual and long-term business and strategic goals | • | Build a culture based upon the value of and respect for each individual, encouraging personal and professional growth, rewarding outstanding individual and corporate performance and achieving excellence through a high-energy, collegial work environment. | | | • | Maintain competitive base salaries that compensate employees based upon job responsibilities, level of experience, individual performance, comparisons to the market benchmark, internal comparisons and other relevant factors. | | | • | Provide a competitive benefits package. | | | • | Deliver the largest portion of executive compensation in the form of long-term incentive components that vest over multiple years. | | Motivate management to achieve short-term business goals and to enhance long-term stockholder value | • | Promote a performance-driven culture that encourages growth by recognizing and rewarding employees who meet and exceed our business objectives. | | | • | Motivate and reward organizational performance through variable pay programs that directly support our business objectives, encourage leadership of departmental units and encourage collaboration and teamwork across our Company. | | | • | Base a substantial portion of each NEO’s total compensation package on long-term incentive components and a variable annual compensation component (as outlined below). | | | • | Align the interests of our executive officers with the interests of our stockholders through the use of long-term equity and performance-based incentive compensation opportunities. | | | • | Align the interests of our executive officers with the interests of our stockholders through the use of stock ownership guidelines. | | Discourage excessive risk taking that could adversely impact stockholder value | • | Conduct an annual risk assessment of our executive compensation programs. | | | • | Maintain an independent Compensation Committee, which retains an independent compensation consultant. | | | • | Incorporate a variety of governance best practices and avoid governance pitfalls as outlined below. |
Insperity’s Best Practice Features
| • | Compensation program emphasizing variable and at-risk compensation with at least 75% of each NEO’s target compensation tied to annual bonus and long-term incentives | | • | Long-term incentive (“LTI”) program prioritizing performance-based LTI with 65% of the CEO’s and, on average, 48% of the other NEO’s LTI mix in performance-based LTI1 | | • | Stock ownership guidelines requiring the CEO to hold shares equal to five times base salary, other executive officers to hold shares of three times or one and one-half times base salary, depending on the executive tier level established by the Compensation Committee, and non-employee directors to hold shares equal to five times the annual cash retainer | | • | Clawback policy for incentive compensation paid to current and former executive officers, consistent with NYSE listing standards, in addition to a broad-based recoupment policy applicable to all other employees |
Insperity’s Best Practice Features
1 The performance-based LTI mix percentages do not reflect the special performance-based equity awards to Messrs. Sarvadi and Arizpe in 2025. If these special equity awards were included, then these percentages increase to 94% for the CEO and 60% for the other NEOs. Please see “— Long-Term Equity Awards Granted in 2025” later in this CD&A for an explanation of the purpose and business rationale for the special equity awards.
Insperity’s Best Practice Features
| • | Minimum vesting period of one year for grants of restricted stock, restricted stock units and phantom shares awards, stock options, stock appreciation rights, and performance awards, with limited exceptions | | • | Double trigger requirement for vesting of NEO and executive officer equity awards that provides for equity acceleration only in the event of a qualifying termination following a change in control | | • | Hedging policy prohibiting employees and directors from engaging in hedging transactions involving shares of our common stock | | • | Pledging policy prohibiting employees and directors from engaging in pledging transactions involving shares of our common stock that would be considered significant by the Board | | • | A lead independent director | | • | Compensation Committee composed entirely of outside, independent directors | | • | Independent compensation consultant hired by, and reporting directly to, the Compensation Committee | | • | A one-year post-vesting holding period for all future grants of equity awards to NEOs |
Insperity’s Best Practice Features
| • | Employment agreements with NEOs or other executive officers | | • | Executive pension or other similar retirement or supplemental benefits | | • | Single trigger change in control agreements for NEOs or other executive officers | | • | Tax gross-ups in the event of a change in control | | • | Medical coverage for retirees | | • | Excessive benefits and perquisites |
Stockholder Advisory Votes
Stockholder Advisory Votes At our 2025 Annual Meeting of Stockholders, our stockholders approved, in a non-binding advisory vote, the compensation of our NEOs, with over 97% of the votes cast in favor of such compensation. The Company’s management conducted stockholder outreach to our largest institutional stockholders prior to our 2025 Annual Meeting of Stockholders regarding our executive compensation programs and the say-on-pay advisory vote. The feedback received was provided to the Compensation Committee for consideration as part of its ongoing evaluation of our executive compensation programs. The Compensation Committee values the opinions expressed by our stockholders and believes that the level of support at our 2025 Annual Meeting of Stockholders demonstrates a strong alignment of our compensation programs with stockholders’ interests. In fall 2025, Company management in conjunction with Mr. Clifford, our Lead Independent Director and Chair of the Compensation Committee, conducted engagement outreach to our largest institutional stockholders representing approximately 36% of our outstanding shares. The purpose of the outreach was to solicit feedback on corporate governance and executive compensation matters as well as to address any other concerns. As part of this effort, the Company proactively discussed the business rationale behind the special performance-based equity awards (“PSUs”) granted in July 2025 to our CEO and our President. Please see “-— Long Term Equity Awards Granted in 2025” later in this CD&A for an explanation of the purpose and business rationale for the PSU awards. Even though efforts to obtain feedback from these stockholder discussions did not yield specific actionable items, the results of these discussions were shared with the full Board prior to the Compensation Committee making 2026 compensation decisions. Investor feedback informed the Compensation Committee’s decision to implement a post-vesting holding period requirement for our NEOs on newly issued equity awards. Please see “-— Post-Vesting Holding Period for Awards Granted to Named Executive Officers” later in this CD&A for a more detailed explanation of the post-vesting holding period policy for NEO equity grants.
Summary of Compensation Elements
| | Compensation Element | Form of Compensation | Purpose | | Fixed | Base Salary | Cash | Provides fixed level of compensation to attract and retain talent | | Variable and At-Risk | Variable Cash Compensation (Short-Term Incentive Program) | Cash | Rewards executive officers for achieving annual Company performance goals | | | Long-Term Equity Incentives | Restricted Stock Units and Performance Shares | Supports long-term focus on creating stockholder value, provides strong retention incentive with multi-year vesting and rewards achievement of long-term performance goals | | Benefits | Retirement Benefits | 401(k) Plan | Provides competitive retirement benefits as part of comprehensive pay package | | | Health & Welfare Benefits | Medical, Dental, Life and Disability Benefits | Provides competitive health and welfare benefits as part of comprehensive pay package |
Variable Short-Term Incentive Compensation
Variable Short-Term Incentive Compensation Variable short-term incentive compensation places a significant portion of executive compensation at risk, is tied to corporate performance, and is paid based upon eligible compensation earned in 2025. Variable compensation for all executive officers is paid through the Short-Term Incentive Program, a cash incentive program under the stockholder-approved Incentive Plan. The Short-Term Incentive Program embodies our pay-for-performance philosophy and helps align executive officers’ compensation to the Company’s overall performance. In 2025, the Compensation Committee established the threshold, target and maximum payout opportunity for NEOs and other executive officers under the Short-Term Incentive Program at 25%, 100% and 200%, respectively. For 2025, the Compensation Committee set the annual incentive targets as a percentage of each NEO’s base salary as follows:
Variable Short-Term Incentive Compensation
| | 2025 Target Bonus Opportunity | | Chief Executive Officer and Chairman of the Board | 150% | | Executive Vice President of Finance, Chief Financial Officer and Treasurer | 110% | | President and Chief Operating Officer | 125% | | Senior Vice President of Legal, General Counsel and Secretary | 100% |
Variable Short-Term Incentive Compensation
Annual Bonus Metrics The Compensation Committee selects corporate performance goals that align with the Company’s business strategy and objectives. The Compensation Committee sets each corporate performance goal to be challenging and rigorous, requiring the attainment of predetermined achievement levels before triggering a payout to the executives. The Compensation Committee chose to tie 70% of the NEOs’ Short-Term Incentive Program payout opportunity to growth and profitability objectives and 30% to the execution of the second phase of the strategic partnership with Workday that was announced in February 2024. For 2025, our annual bonus program was based 30% on adjusted EBITDAIC, 30% on the growth in average number of WSEEs paid, 10% on the growth in the average number of paid employees in our traditional payroll solution, and 30% on the execution of four initiatives identified as of primary importance to the second phase of the strategic partnership with Workday. Consistent with prior years, the Compensation Committee chose to exclude incentive compensation from adjusted EBITDA under the Short-Term Incentive Program because any cash payout impacts adjusted EBITDA. Please see the Annual Bonus Metric chart below for definitional details.
Variable Short-Term Incentive Compensation
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Variable Short-Term Incentive Compensation
| Annual Bonus Metric | Definition | Rationale | | Adjusted EBITDAIC | In setting our adjusted EBITDAIC performance goal, the Compensation Committee elected to exclude specified items from EBITDA (earnings before interest, taxes, depreciation, and amortization), to the extent applicable, including for example, the following: (1) non-cash impairment charges; (2) stock-based and incentive compensation; (3) changes in statutory tax rates and assessments; (4) professional advisory fees and outside costs related to stockholder matters; (5) pre-paid software as a service (“pre-paid SaaS”) product implementation expense; (6) executive severance arrangements; (7) certain pre-identified Workday implementation costs; and (8) other extraordinary, unusual or infrequent items. For 2025, adjusted EBITDAIC, the Compensation Committee only excluded the adjustments for stock-based and incentive compensation, pre-paid SaaS product implementation expense and certain pre-identified Workday implementation costs. | We have included adjusted EBITDAIC as one of our corporate performance goals because we believe it is a key indicator of our overall productivity; effective management of pricing, direct costs and operating expenses; and ability to grow the business while favorably balancing profitability. | | Growth in Average WSEEs Paid (“PWEE Growth”) | The PWEE Growth corporate component of the Short-Term Incentive Program bonuses was determined by calculating the year-over-year growth in the average number of WSEEs paid for calendar year 2025 and also year-over-year growth as of January 2026 compared to January 2025, with the final payout amount being based upon the period that produced the greatest percentage payout of the target bonus. We include the number of WSEEs paid for January 2026 in the performance period to reflect the results of our annual Fall Sales Campaign and significant year-end client renewal period. The approach outlined above is consistent with prior years. | We included PWEE Growth as a component in order to focus our NEOs on growing our business. Increasing the average number of WSEEs paid is a key metric for measuring the success of our sales operations and client retention efforts and is a significant driver in our overall growth and performance. | | Growth Percentage in Traditional Employment Employees (“HRCore Employee Growth”) | The HRCore Employee Growth component was measured based on the percentage of growth in the average number of employees paid in our HRCore solution, which is our traditional payroll solution. | We included this component to focus our organization on growing this comprehensive human capital management and payroll service solution. | | Development and Completion of Phase Two of Workday Partnership (“Workday Partnership”) | In setting phase two of the Workday Partnership goal, four primary initiatives were identified and predefined underlying objectives were established to measure achievement of the goal. The four initiatives, equally weighted at 25%, included (1) technology and systems development, (2) a go-to-market plan for marketing, (3) a go-to-market plan for sales, and (4) enablement to onboard and transition clients. The predefined objectives for each initiative were evaluated and scored on a scale of one to ten points, based on the Company’s readiness to begin marketing and sales for, and to onboard clients onto, the HRScale solution. | We included the Workday Partnership as a component to focus our NEOs on jointly executing with Workday the second phase of a new full-service HR solution for small and midsize businesses. |
2025 Short-Term Incentive Program Performance Results
2025 Short-Term Incentive Program Performance Results In 2025, we established rigorous goals under our Short-Term Incentive Program that aligned with our business plan for the year. Our performance under the Short-Term Incentive Program resulted in a payout between stretch and maximum for the Workday Partnership goal. We fell short of the targets established for the adjusted EBITDAIC, PWEE Growth and HRCore Employee Growth goals, resulting in no payout for these metrics. The table below shows the result of each component versus our 2025 bonus targets.
2025 Short-Term Incentive Program Performance Results
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2025 Short-Term Incentive Program Performance Results
| | | Metric | | | | | | | Adjusted EBITDAIC (in millions)1 | PWEE Growth | HRCore Employee Growth | Workday Partnership | | Threshold | (25% Payout) | $306 | 1.0% | 10% | 16 points | | Threshold Plus | (50% Payout) | $319 | 2.0% | 12% | 20 points | | Target | (100% Payout) | $340 | 3.5% | 15% | 24 points | | Stretch | (150% Payout) | $359 | 4.0% | 18% | 30 points | | Maximum | (200% Payout) | $379 | 4.5% | 20% | 36 points | | Actual Results | | $200 | 0.9% | 4% | 34.7 points | | Performance Modifier | | 0% | 0% | 0% | 189% |
2025 Short-Term Incentive Program Performance Results
______________________________ 1Adjusted EBITDAIC under our Short-Term Incentive Program differs from the definition of adjusted EBITDA we disclose as a Non-GAAP financial measure in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” of our annual report on Form 10-K for the year ended December 31, 2025. Under our Short-Term Incentive Program, adjusted EBITDAIC also included an adjustment for incentive compensation expense and certain pre-identified Workday implementation costs. Workday Partnership Assessment The Compensation Committee reviewed and evaluated the Company’s performance under pre-defined objectives for each of the four primary initiatives for the phase two of the Workday Partnership goal. The four primary initiatives included (1) technology and systems development, (2) go-to-market plan for marketing, (3) go-to-market plan for sales, and (4) enablement to onboard and transition clients. Utilizing a sliding ten-point scale for each initiative, the Compensation Committee assessed the Company’s progress and achievement ranging from initial design through substantial completion for each pre-defined objective. Some of the highlights of management’s significant efforts on phase two of the Workday Partnership goal include: •Successfully launched and implemented the Company’s corporate tenant transition to Workday •Collaborated with Workday on joint logo design, utilization and marketing materials •Developed implementation playbooks for tools, processes and technology resources for client onboarding •Workday certifications in human capital management, time tracking, absence, U.S. payroll, reporting, talent, compensation and integrations achieved by employees supporting HRScale •Defined support structure and trained identified collaborating pods of Workday and Company employees on the HRScale solution materials •Completed and launched internal and external HRScale awareness campaign and content •Completed demonstrations of beta tenant solution for identified existing clients and prospects After evaluating the objectives for each of the four initiatives, the Compensation Committee determined that the cumulative effort and achievement was 34.7 points, resulting in a payout between the stretch and maximum performance levels.
2025 Short-Term Incentive Program Performance Results
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2025 Short-Term Incentive Program Performance Results
2025 Short-Term Incentive Program Bonus Payouts The executives received bonus payouts in the following amounts based on the weighting for each metric and performance against each objective.
2025 Short-Term Incentive Program Performance Results
| Executive | Target Bonus ($) | Adjusted EBITDAIC Payout | PWEE Growth Payout | HRCore Employee Growth Payout | Workday Partnership Payout | Bonus Payout (% of Target) | Actual Bonus Payout ($) | | Chief Executive Officer and Chairman of the Board | $1,798,385 | $0 | $0 | $0 | $1,019,684 | 56.7% | $1,019,684 | | Executive Vice President of Finance, Chief Financial Officer and Treasurer | $632,924 | $0 | $0 | $0 | $358,868 | 56.7% | $358,868 | | President and Chief Operating Officer | $961,731 | $0 | $0 | $0 | $545,302 | 56.7% | $545,302 | | Senior Vice President of Legal, General Counsel and Secretary | $465,385 | $0 | $0 | $0 | $263,873 | 56.7% | $263,873 |
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation Long-term equity incentives align the interests of our executive officers with those of our stockholders. We believe that long-term incentives enhance retention while rewarding executive officers for achieving long-term performance goals and enhancing stockholder value. Long-term equity incentive awards are made under the stockholder-approved Incentive Plan. The objectives of the Incentive Plan are to: •provide incentives to attract and retain persons with training, experience and ability to serve as an executive officer; •promote the interests of the Company by encouraging executive officers to acquire or increase their equity interest in the Company; •incent executive officers to achieve long-term performance goals and increase stockholder value; •provide a means by which executive officers may develop a sense of proprietorship and personal involvement in the development and financial success of the Company; and •encourage executive officers to remain with, and devote their best efforts to the business of, the Company, thereby advancing the interests of the Company and our stockholders.
Long-Term Equity Awards Granted in 2025
Long-Term Equity Awards Granted in 2025 In February 2025, the CEO presented to the Compensation Committee his recommendations for long-term incentive awards for the other executive officers. His recommendations as to the amount and form of awards to be granted were based on a number of factors, including, the importance of each executive officer’s role in the Company’s future business operations, equity pay practices of competitor companies, annual expense to the Company of equity awards, and the Company’s own past practices in granting equity awards. The Compensation Committee then determined and approved
Long-Term Equity Awards Granted in 2025
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Long-Term Equity Awards Granted in 2025
the awards for our executive officers, including the CEO, based upon the above noted factors. In February, the Compensation Committee approved 2025 target LTI opportunities for the NEOs that represented a 7% increase for our CEO, while the other NEOs received increases ranging from 16% to 27%, all of which were intended to reflect strong individual performance and their organizational importance. The largest of these increases were provided to our Chief Financial Officer and Senior Vice President, General Counsel in order to progress their compensation towards the market median. Please see “— Assessing External Market Compensation Practices” later in this CD&A for additional Compensation Peer Group information. On June 30, 2025, the Compensation Committee approved special performance-based equity awards to our CEO and President which are discussed in detail later in this CD&A at “— 2025 Special Performance-Based Stock Unit Awards.” The table below outlines the LTI awards provided to our executives in February 2025.
Long-Term Equity Awards Granted in 2025
| Executive | Total LTI Grant Date Fair Value | Restricted Stock Units | | | Performance Shares under LTIP | | | | | | Weighting | Shares Granted | Grant Date Fair Value | Weighting | Shares Granted | Grant Date Fair Value | | Chief Executive Officer and Chairman of the Board | $7,798,893 | 35% | 28,845 | $2,537,495 | 65% | 53,570 | $5,261,398 | | Executive Vice President of Finance, Chief Financial Officer and Treasurer | $1,473,396 | 55% | 8,755 | $770,177 | 45% | 7,160 | $703,219 | | President and Chief Operating Officer | $2,341,060 | 45% | 11,255 | $990,102 | 55% | 13,755 | $1,350,958 | | Senior Vice President of Legal, General Counsel and Secretary | $1,052,193 | 55% | 6,250 | $549,813 | 45% | 5,115 | $502,380 |
Long-Term Equity Awards Granted in 2025
Awards granted to NEOs under the Incentive Plan include a “double trigger” requirement in the case of a “change in control” of the Company as defined under the Incentive Plan. Please see “Potential Payments Upon Termination or Change in Control,” later in this proxy for additional details. All equity grants to executive officers are approved solely by the Compensation Committee. If an award is made at a meeting of the Compensation Committee, the grant date is the meeting date or a fixed, future date specified at the time of the grant. Restricted stock unit awards (“RSUs”) and performance awards are valued in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation.
2025 Restricted Stock Units
2025 Restricted Stock Units The 2025 RSUs granted are all subject to a three-year ratable annual vesting schedule, accrue dividend equivalents payable in additional shares of our common stock at the time of vesting, and all NEO grants include a “double trigger” requirement in the case of a “change in control” of the Company. The 2025 RSUs are subject to the Company’s Qualified Retirement Policy whereby time-vested RSUs will continue vesting in accordance with an award’s original vesting schedule provided the NEO’s last date of employment is at least six (6) months after the date of grant, the NEO has attained age 62 with at least 15 years of continuous service, the NEO provides the Company with six (6) months advance notice of retirement, the NEO continues to work full-time during such six (6) month period, and the NEO signs a waiver and release of claims. In addition, in order to avoid forfeiting the unvested RSUs, a retired NEO must refrain from providing any services, including but not limited to, as an employee, director, advisor, or independent contractor, to a business engaged in providing any services offered by the Company and its subsidiaries and affiliates at the time of the NEO’s retirement, including but not limited to PEO services, payroll services, retirement services, or insurance services.
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”) In evaluating the structure of the 2025 LTIP Awards, the Compensation Committee considered information provided by FW Cook on market design trends and examined payouts under the adjusted EBITDA component of prior LTIP awards.
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
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2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
The Compensation Committee established at grant of the 2025 LTIP Awards set growth percentages for achieving threshold, target and maximum performance levels based on the actual end of the prior year adjusted EBITDA obtained in year one and two of the three-year performance cycle. The Compensation Committee believed that this structure aligned with our stockholder’s long-term interests and incentivized the NEOs and other executive officers for the duration of the LTIP award by eliminating unnecessary volatility in multi-year forecasts while still establishing challenging long-term performance goal metrics. The Compensation Committee decided to assign a weighting for the components of the 2025 LTIP Awards at 75% adjusted EBITDA and 25% relative total shareholder return (“RTSR”). The table below outlines the metrics used in our 2025 performance share awards under the LTIP, and the rationale for each metric.
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
| Performance Share Metric | Definition | Rationale | | Adjusted EBITDA (75% weighting) | EBITDA is adjusted for non-cash impairment charges, stock-based compensation expense, pre-paid SaaS product implementation expenses, professional advisory fees and outside costs related to stockholder matters, executive severance arrangements and changes in statutory tax rates and assessments. EBITDA may also be adjusted to exclude extraordinary or unusual items such as: nonrecurring gains or losses, material litigation or settlements, material changes in tax or health care reform laws and the impact of any divestitures, acquisitions, the cumulative effect of accounting changes, asset write-downs, restructuring charges or the results of discontinued operations that occur during the performance period. These adjustments are consistent with prior years. The adjusted EBITDA portion of the 2025 LTIP Awards is measured under a three-year performance period (2025-2027) consisting of three one-year performance periods, with each calendar year being equally weighted for one-third of the target opportunity. | The Compensation Committee elected to use adjusted EBITDA as a performance metric because it is a key indicator of our: (1) overall productivity; (2) effective management of pricing, direct costs and operating expenses; and (3) ability to grow the business while favorably balancing profitability. | | Relative TSR (RTSR) (25% weighting) | RTSR will be measured over the entire 2025-2027 performance period against the performance of 18 peer companies that the Compensation Committee designated as the Company’s 2025 Compensation Peer Group. | The Compensation Committee elected to use RTSR as a performance metric to further align the long-term financial interests of the executive officers and the Company’s stockholders. |
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
Recipients can earn 50% of the target number of performance shares if the threshold performance level is achieved and can earn up to 200% of the target number of performance shares if the maximum performance level is achieved. If the performance metric for a performance period falls below the threshold level, no performance shares will be credited for the performance period. If actual performance results fall between the threshold, target and maximum performance levels, the number of performance shares earned will be determined by interpolation between the applicable performance levels. For the RTSR component, the 2025 LTIP Awards are structured to cap the payout at 100% of target in the event the Company’s absolute TSR over the performance period is negative, and the payout opportunity is based on the Company’s percentile TSR ranking compared to the peer group. Please see “— 2023 LTIP Awards” later in this CD&A for additional RTSR information. Except in the case of a qualifying termination in connection with a change in control, or a termination due to retirement under the Company’s Qualified Retirement Policy, death or disability, a participant in the LTIP must be continuously employed by the Company or its subsidiaries throughout the entire three-year performance period and on the date such award is paid after the conclusion of the performance period to receive a payout of an award. The LTIP awards are payable in shares of our common stock and include dividend equivalents, payable in additional shares of our common stock, with respect to the number of performance shares actually earned pursuant to the LTIP awards if and to the extent dividends are paid on our common stock during the performance period. Under the Qualified Retirement Policy, portions of the 2025 LTIP Awards may continue to vest provided the NEO’s last
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
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2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
date of employment is at least six months after the date of grant, the NEO has attained age 62 with at least 15 years of continuous service, the NEO provides the Company with six (6) months advance notice of retirement, the NEO continues to work full-time during such six (6) month period, and the NEO signs a waiver and release of claims. In addition, in order to avoid forfeiting any outstanding LTIP Awards, a retired NEO must refrain from providing any services, including but not limited to, as an employee, director, advisor, or independent contractor, to a business engaged in providing any services offered by the Company and its subsidiaries and affiliates at the time of the NEO’s retirement, including but not limited to PEO services, payroll services, retirement services, or insurances services. Any payout under the 2025 LTIP Awards is further limited to a pro-rata amount for the portion of the performance period during which the NEO provided services and based upon actual performance results certified by the Compensation Committee. For any open performance period that begins after the NEO’s last day of employment, that portion of the LTIP award is forfeited. The performance objectives and payout percentages for the portion of the first year of the 2025 LTIP Awards subject to the achievement of the adjusted EBITDA performance metric was as follows:
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
| Performance Level | 2025 Adjusted EBITDA Performance Objective (in millions) | Payout Percentage | | Below Threshold | Less Than $240 | 0% | | Threshold | $240 | 50% | | Target | $263 | 100% | | Maximum | $285 | 200% |
2025 Performance Share Awards under the Long-Term Incentive Program (“LTIP”)
For purposes of the 2025 LTIP Awards, the Compensation Committee certified adjusted EBITDA of $131 million for the 2025 performance period. The Compensation Committee determined the LTIP performance modifier to be 0% for the first one-third tranche of the 2025 LTIP Award attributed to adjusted EBITDA.
2024 LTIP Awards
2024 LTIP Awards The performance objectives and payout percentages for the portion of the second year of the 2024 LTIP Awards subject to the achievement of the adjusted EBITDA performance metric was as follows:
2024 LTIP Awards
| Performance Level | 2025 Adjusted EBITDA Performance Objective (in millions) | Payout Percentage | | Below Threshold | Less Than $283 | 0% | | Threshold | $283 | 50% | | Target | $296 | 100% | | Maximum | $310 | 200% |
2024 LTIP Awards
For purposes of the 2024 LTIP Awards, the Compensation Committee certified adjusted EBITDA of $131 million for the 2025 performance period. The Compensation Committee determined the LTIP performance modifier to be 0% for the second one-third tranche of the 2024 LTIP Award attributed to adjusted EBITDA.
2023 LTIP Awards
2023 LTIP Awards In February 2023, the Compensation Committee granted awards under the LTIP (the “2023 LTIP Awards”) to the NEOs and certain other officers. The 2023 LTIP Awards are weighted at 75% for the adjusted EBITDA component and 25% for the RTSR component. Adjusted EBITDA is subject to a three-year performance period, 2023-2025, with each year being equally weighted for one-third of the target opportunity, while RTSR is measured over the entire 2023-2025 performance period. For the 2023 LTIP Awards, the Compensation Committee elected to use increasing levels of EBITDA, with certain pre-defined adjustments expressed as a growth percentage established at grant based on the actual end of the prior year adjusted EBITDA, as the performance metric, because it is a key indicator of our: (1) overall productivity; (2) effective management of pricing, direct costs and operating expenses; and (3) ability to grow the business while favorably balancing profitability. For the 2025 performance period, adjusted EBITDA for the 2023 LTIP Awards was subject to the same adjustments as the 2025 LTIP Awards. Adjusted EBITDA is a non-GAAP financial measure (for additional information, please see the discussion of Adjusted EBITDA under “— Long-Term Equity Incentive Compensation — Long-
2023 LTIP Awards
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2023 LTIP Awards
Term Equity Awards Granted in 2025”). For RTSR, the Compensation Committee elected to measure the Company’s performance against the performance of 15 companies the Compensation Committee designated as the 2023 compensation peer group. To mitigate the impact of one day’s trading activity, the beginning and ending stock price for each peer company is determined using a 20-day average closing stock price for the first day and last day of the performance period. If the Company’s absolute TSR over the performance period is negative, the payout percentage is capped at 100% of target performance shares granted, regardless of the Company’s RTSR positioning. The 2023 LTIP Awards are payable in shares of our common stock and include dividend equivalents, payable in additional shares of our common stock, with respect to the number of performance shares actually earned pursuant to the 2023 LTIP Awards if and to the extent dividends are paid on our common stock during the performance period. The table below outlines the adjusted EBITDA performance achieved for each of the three performance periods within the 2023 LTIP Awards:
2023 LTIP Awards
| Performance Period (in millions) | Adjusted EBITDA Goals | | | Actual Results | Vesting Percentage | | | Threshold | Target | Maximum | | | | 2023 | $353 | $381 | $409 | $354 | 51% | | 2024 | $371 | $389 | $407 | $270 | 0% | | 2025 | $283 | $296 | $310 | $131 | 0% |
2023 LTIP Awards
For the 2023 to 2025 performance period, the Company’s RTSR performance placed the Company at the 6th percentile compared to the performance of the companies included in the 2023 compensation peer group. Based upon this level of performance, the RTSR component of the 2023 LTIP Awards vested at 0%, as set forth in the table below:
2023 LTIP Awards
| 2023-2025 Performance Period | Relative Total Shareholder Return (RTSR) Goals | | | | Actual Percentile Achieved | Vesting Percentage | | | 25th Percentile or Better | 50th Percentile or Better | 75th Percentile or Better | 90th Percentile or Better | | | | Payout as a Percentage of Target | 50% | 100% | 150% | 200% | 6th percentile | 0% |
2023 LTIP Awards
Based upon the adjusted EBITDA and RTSR vesting percentages above, the executives received payouts for the 2023 LTIP as summarized below:
2023 LTIP Awards
| Executive | 2023 Target # of LTIP shares | LTIP Payout Multiplier | 2023 Earned Amounts | | Chief Executive Officer and Chairman of the Board | 32,740 | 12.75% | 4,175 | | Executive Vice President of Finance, Chief Financial Officer and Treasurer | 3,625 | 12.75% | 463 | | President and Chief Operating Officer | 7,535 | 12.75% | 961 | | Senior Vice President of Legal, General Counsel and Secretary1 | — | — | — |
2023 LTIP Awards
______________________________________ 1Mr. Callens was promoted effective January 1, 2024, and was not eligible to participate in the 2023 LTIP.
2025 Special Performance-Based Stock Unit Awards
2025 Special Performance-Based Stock Unit Awards On June 30, 2025, the Compensation Committee approved special performance-based equity awards to our CEO and President. Prior to granting the PSUs, the Compensation Committee met multiple times, over many months, with its independent compensation consultant FW Cook to discuss the factors underlying the purpose of the grant, as well as the grant’s structure and value. The PSUs are intended to incentivize and support the retention of Messrs. Sarvadi and Arizpe for at least five years given their critical roles in guiding the Company through the next phases of our plans for growth and profitability with our existing solutions and our efforts with Workday on our new HRScale solution. Some of the other factors considered by the Compensation Committee in granting the PSUs included:
2025 Special Performance-Based Stock Unit Awards
•the strong history of Mr. Sarvadi and Mr. Arizpe leading the Company through periods of transformation; •avoiding disruption to the business that likely would be caused by the departure of Mr. Sarvadi or Mr. Arizpe during the implementation of our new HRScale solution, particularly while we also continue to focus on improving our growth and profitability; •the impact on our performance attributable to the substantial investment being made in developing the new HRScale solution; •requiring the achievement of performance targets that would create substantial value for stockholders relative to the Company’s historic stock prices; and •benchmarks from comparison companies, including practices related to special long-term transformation-focused incentives. The Compensation Committee determined that the number of shares that could be attained by Mr. Sarvadi and Mr. Arizpe would be meaningful, even given their existing holdings. In addition, because attainment of the awards is based both on continued service by the executive for the five year period and the achievement of significant increases in the Company’s stock prices within that time, the Compensation Committee believed that the structure of the awards aligns with stockholder interest as well as incentivizes the CEO and President to remain with the Company during this period and to create long-term value for stockholders. The 2025 PSUs were only granted to the CEO and President, are 100% performance-based with a continued service requirement, and are payable in shares of our common stock at the time of distribution. The PSUs include a “double trigger” requirement in the case of a “change in control” of the Company. The PSUs do not have any retirement eligibility provisions and are excluded from the Company’s Qualified Retirement Policy. In addition to achieving the requisite performance level, to vest in any PSUs, the executive must generally remain continuously employed over the entire five-year performance period, with limited exceptions for death, disability or involuntary termination without cause. Under these limited circumstances, the PSUs corresponding to any performance level previously achieved or achieved within 60 days of the executive’s last day of employment will be paid at the end of the five-year performance period. The Company’s stock price appreciation within the five-year performance period must attain an average closing price of $105 over a 30-day trading period for the executive to potentially vest in 10% of the PSUs granted, which would have represented an approximately 70% increase from the grant date stock price of $62.06. For the executives to earn any of the PSUs, the 30-day average closing stock price of Insperity’s common stock must meet or exceed the applicable performance levels specified in the table below during the five-year performance period:
2025 Special Performance-Based Stock Unit Awards
If the performance level exceeds $225, the executive will vest in 100% of the PSUs granted and no additional PSUs shall be credited thereafter. The Compensation Committee will not interpolate the PSUs earned for any result achieved between performance levels, and the performance level will not be adjusted to reflect any cash dividend paid by the Company during the performance period. For additional information on the PSU awards granted to the CEO and President, please read our Form 8-K filed on July 1, 2025.
Role of the Compensation Consultants in the Compensation Process
Role of the Compensation Consultants in the Compensation Process The Compensation Committee’s charter provides that it has the sole authority to retain and terminate any compensation consultant to assist in maintaining compensation practices in alignment with our compensation goals. The Compensation Committee believes that outside consultants are an efficient way to keep current on executive compensation trends and stay abreast of competitive compensation practices. For 2025, the Compensation Committee retained FW Cook as its compensation consultant. FW Cook has not received any remuneration from the Company, directly or indirectly, other than for advisory services rendered to, or at the direction of, the Compensation Committee or the Board. The Compensation Committee has reviewed FW Cook’s independence and determined that FW Cook is an independent advisor with no conflicts of interest with us (as determined under Rule 10C-1(b)(4)(i) of the Exchange Act).
Assessing External Market Compensation Practices
Assessing External Market Compensation Practices At the direction of the Compensation Committee, we annually conduct an executive compensation study that compares each executive officer’s compensation to market data for similar positions. While the Compensation Committee does not target our executive officers’ pay to any particular level (such as a target percentile) of comparative market data contained in executive compensation studies, such data help to inform and influence pay decisions and are considered by the Compensation Committee in meeting our compensation program objectives as described above. Selecting a peer group to benchmark compensation for our executive officers presents certain challenges, including the limited number of publicly-traded PEOs and the Company’s specific business model. As one of the largest PEO service providers in the United States, our direct PEO service competitors include TriNet Group, Inc., a national PEO, and the PEO divisions of Automatic Data Processing, Inc. and Paychex, Inc., which are significantly larger business service companies. The delivery of our PEO services and our other business performance solutions requires a variety of professional services, human resources, information technology services and software. These areas represent important components of our overall service offerings, and we compete for talent with many companies offering similar services or products. Our peer group includes a number of these companies. The selection process for the Compensation Peer Group took into account multiple factors, including: industry (with an emphasis on professional and outsourced human resources services, including our PEO competitors, and information technology services), comparable revenue range, comparable market capitalization, the extent to which each company may compete with Insperity for executive talent, peer groups of our PEO peers and peers selected by certain firms who provide proxy advisory services. For setting 2025 compensation, after reviewing the peer group with FW Cook and considering the changes made in 2024, the Compensation Committee determined that no changes or additions to the peer group were necessary. For 2025, the Compensation Peer Group included the following companies:
Assessing External Market Compensation Practices
In addition to the results of the compensation study, internal factors are also an important consideration when determining each executive officer’s compensation. These factors include: •the executive officer’s performance review conducted by either the Compensation Committee (for the CEO) or the CEO (for all other executive officers); •the CEO’s recommendations regarding the other executive officers; •the executive officer’s tenure with the Company, industry experience and ability to influence stockholder value; and •the importance of the executive officer’s position to the Company in relation to the other executive officer positions within the Company. Stock Ownership Guidelines To further align the interests of our NEOs and non-employee directors with those of our stockholders, we have adopted stock ownership guidelines. The stock ownership guidelines provide that the CEO is required to own five times his annual base salary in our common stock and all non-employee directors are required to own five times their annual cash retainer in our common stock. The other executive officers are required to own three times or one and one-half times annual base salary in our common stock, depending on the executive tier level established by the Compensation Committee. Stock ownership includes direct stock ownership but does not include unvested performance awards or unexercised stock options. The Company annually monitors and calculates the stock ownership level of each individual, and each individual has five years to meet the applicable ownership requirements. The CEO, other executive officers, and each non-employee director are in compliance or are expected to be in compliance within the applicable time period. Post-Vesting Holding Period for Awards Granted to Named Executive Officers The Compensation Committee adopted a policy whereby an NEO, determined as of the grant date of the award, may not sell or otherwise transfer shares (net of shares withheld for taxes upon vesting, settlement or exercise) issued pursuant to awards (other than cash awards) granted on or after April 1, 2026, until one year after the vesting, settlement or exercise of the underlying award (“Post-Vesting Holding Period”), except in the event of termination of employment, retirement or death. During the Post-Vesting Holding Period, an NEO will be able to vote the applicable shares and receive any dividends issued and the applicable shares must remain held by the Company-designated broker until the Post-Vesting
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The table below summarizes the total compensation paid or earned by each of the NEOs for services rendered in all capacities to the Company for each year in the prior three years that such individual was a NEO. We have not entered into any employment agreements with any of our NEOs. The compensation plans under which the grants in the following tables were made are generally described in the Compensation Discussion and Analysis section, and include the Short-Term Incentive Program and the Incentive Plan, which provide for, among other things, restricted stock unit grants, performance-based stock unit grants, and LTIP performance awards.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)1 | Non-Equity Incentive Plan Compensation ($)2 | All Other Compensation ($)3 | Total ($) | | Paul J. Sarvadi, Chief Executive Officer and Chairman of the Board | 2025 | 1,206,000 | — | 14,558,893 | 1,019,684 | 28,436 | 16,813,013 | | | 2024 | 1,160,000 | — | 6,636,701 | 1,541,411 | 28,136 | 9,366,248 | | | 2023 | 1,125,000 | — | 6,544,828 | 312,947 | 27,236 | 8,010,011 | | A. Steve Arizpe, President and Chief Operating Officer | 2025 | 774,000 | — | 4,031,060 | 545,302 | 100,728 | 5,451,090 | | | 2024 | 744,000 | — | 1,873,006 | 823,592 | 129,334 | 3,569,932 | | | 2023 | 720,000 | — | 1,767,801 | 165,835 | 77,605 | 2,731,241 | | James D. Allison, Executive Vice President of Finance, Chief Financial Officer and Treasurer | 2025 | 580,000 | — | 1,473,396 | 358,868 | 90,719 | 2,502,983 | | | 2024 | 550,000 | — | 1,087,397 | 423,229 | 77,006 | 2,137,632 | | | 2023 | 446,000 | — | 1,032,134 | 81,855 | 71,241 | 1,631,230 | | Christian P. Callens, Senior Vice President of Legal, General Counsel and Secretary | 2025 | 470,000 | — | 1,052,193 | 263,873 | 52,542 | 1,838,608 | | | 2024 | 440,000 | — | 840,074 | 385,009 | 66,649 | 1,731,732 |
SUMMARY COMPENSATION TABLE
______________________________________ 1The amounts in this column represent the aggregate grant date fair value of awards granted in the year indicated and includes time-vested restricted stock units, the 2023 LTIP Awards, the 2024 LTIP Awards, the 2025 LTIP Awards, and the 2025 PSU Awards. The grant value of the 2023 LTIP Awards, the 2024 LTIP Awards, and the 2025 LTIP Awards are shown at target. The grant value of the 2025 PSU awards are shown at the derived target number of shares rounded down to the performance level achieved since PSU achievement results are not interpolated. Actual LTIP awards may range from 0% to 200% of the target number of shares if the maximum performance level is achieved. Actual PSU awards are expressed as a percentage of maximum performance, and payout may range from 0% to 100% of the award. The grant date fair value of the 2023 LTIP Awards assuming achievement at the maximum level of performance are: Mr. Sarvadi - $8,714,242; Mr. Arizpe - $2,005,571; and Mr. Allison - $964,830. The grant date fair value of the 2024 LTIP Awards assuming achievement of the maximum level of performance are: Mr. Sarvadi - $8,548,740; Mr. Arizpe - $2,036,068; Mr. Allison - $964,294; and Mr. Callens - $745,446. The grant date fair value of the 2025 LTIP Awards assuming achievement of the maximum level of performance are: Mr. Sarvadi - $10,522,796; Mr. Arizpe - $2,701,916; Mr. Allison - $1,406,438; and Mr. Callens - $1,004,760. For additional information, refer to Note 9, “Incentive Plans,” in the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. See the Grants of Plan-Based Awards Table for information on awards made in 2025. These amounts do not necessarily correspond to the actual value that will be realized by the NEO. 2Represents variable cash compensation earned and awarded by the Compensation Committee under the Short-Term Incentive Program. A description of the Short-Term Incentive Program is included in “Variable Short-Term Incentive Compensation” in the Compensation Discussion and Analysis. 3All other compensation in 2025 includes the following: Company-provided automobiles; 401(k) matching contributions; premiums for executive disability insurance; executive wellness program; and occasional Company-related travel, events and use of Company-owned property. Certain of the aforementioned items involved no incremental cost to the Company. The cost of the Chairman’s Trip and spousal travel paid by the Company on behalf of the executive during 2025 totaled $24,002 for Messrs. Arizpe and Allison. The associated federal income taxes totaled $15,573 for Messrs. Arizpe and Allison. The incremental cost of Mr. Arizpe’s use of a Company-leased vehicle was $32,717. The 401(k) matching contributions made by the Company during 2025 for the NEOs totaled $21,000 each.
SUMMARY COMPENSATION TABLE
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GRANTS OF PLAN-BASED AWARDS TABLE
GRANTS OF PLAN-BASED AWARDS TABLE The following table provides information about equity and non-equity awards granted to our NEOs in 2025:
GRANTS OF PLAN-BASED AWARDS TABLE
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards1 | | | Estimated Possible Payouts Under Equity Incentive Plan Awards2 | | | All Other Stock Awards: Number of Shares of Stock or Units (#)3 | Grant Date Fair Value of Stock and Option Awards ($)4 | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Paul J. Sarvadi | 2/28/2025 | 452,250 | 1,809,000 | 3,618,000 | — | — | — | — | — | | | 2/28/2025 | — | — | — | — | — | — | 28,845 | 2,537,495 | | | 2/28/2025 | — | — | — | 26,785 | 53,570 | 107,140 | — | 5,261,398 | | | 7/1/2025 | — | — | — | 40,000 | 80,000 | 400,000 | — | 6,760,000 | | A. Steve Arizpe | 2/28/2025 | 241,875 | 967,500 | 1,935,000 | — | — | — | — | — | | | 2/28/2025 | — | — | — | — | — | — | 11,255 | 990,102 | | | 2/28/2025 | — | — | — | 6,878 | 13,755 | 27,510 | — | 1,350,958 | | | 7/1/2025 | — | — | — | 10,000 | 20,000 | 100,000 | — | 1,690,000 | | James D. Allison | 2/28/2025 | 159,500 | 638,000 | 1,276,000 | — | — | — | — | — | | | 2/28/2025 | — | — | — | — | — | — | 8,755 | 770,177 | | | 2/28/2025 | — | — | — | 3,580 | 7,160 | 14,320 | — | 703,219 | | Christian P. Callens | 2/28/2025 | 117,500 | 470,000 | 940,000 | — | — | — | — | — | | | 2/28/2025 | — | — | — | — | — | — | 6,250 | 549,813 | | | 2/28/2025 | — | — | — | 2,558 | 5,115 | 10,230 | — | 502,380 |
GRANTS OF PLAN-BASED AWARDS TABLE
______________________________________ 1These amounts represent the threshold, target and maximum amounts payable to each executive under the Short-Term Incentive Program for 2025. If the threshold is not achieved, the payout is zero. The amounts earned by our NEOs under the Short-Term Incentive Program in 2025 are reflected in the Summary Compensation Table. 2These amounts represent the threshold, target and maximum amount of shares payable to each executive for LTIP awards and PSU awards granted under the Incentive Plan. The LTIP awards vest at the end of a three-year period and the PSU awards vest at the end of a five-year period. For PSUs, the grant date fair value of the awards was divided by the grant date stock price to derive the target number of shares rounded down to the corresponding performance level achieved since PSU achievement results are not interpolated. 3These amounts represent the number of RSUs granted to each executive under the Incentive Plan during 2025. The RSUs vest in installments over a three-year period. 4These amounts represent the aggregate grant date fair value of RSUs, LTIP Awards, and PSU awards granted to each executive during 2025. For RSUs, fair value is calculated using the closing price of our common stock on the NYSE on the date of grant. The grant value of the 2025 LTIP Awards is shown at target. Actual 2025 LTIP Awards may range from 0% to 200% of the target number of phantom shares if threshold level is not achieved or the maximum performance level is achieved. Actual 2025 PSU awards may range from 0% to 100% of the award if threshold level is not achieved or if maximum performance level is achieved. For the relevant assumptions used to determine the valuation of our stock awards, refer to Note 9, “Incentive Plans,” in the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. The terms of the RSU awards provide for the payment of dividend equivalents on all unvested shares. The terms of the LTIP Awards provide for the payment of dividend equivalents with respect to the number of shares actually earned if and to the extent dividends are paid on our common stock during the performance period. The terms of the PSU awards do not provide for the payment of dividend equivalents.
GRANTS OF PLAN-BASED AWARDS TABLE
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OUTSTANDING EQUITY AWARDS TABLE AT 2025 FISCAL YEAR END
OUTSTANDING EQUITY AWARDS TABLE AT 2025 FISCAL YEAR END
OUTSTANDING EQUITY AWARDS TABLE AT 2025 FISCAL YEAR END
| | Option Awards | | | Stock Awards | | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)1 | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)2 | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)1 | | Paul J. Sarvadi | — | — | — | 73,607 | 3 | 2,850,063 | 72,728 | 2,816,028 | | A. Steve Arizpe | — | — | — | 24,877 | 4 | 963,237 | 18,185 | 704,123 | | James D. Allison | — | — | — | 17,351 | 5 | 671,831 | 4,128 | 159,836 | | Christian P. Callens | — | — | — | 11,664 | 6 | 451,630 | 3,028 | 117,244 |
OUTSTANDING EQUITY AWARDS TABLE AT 2025 FISCAL YEAR END
1Based on the closing price of $38.72 of our common stock on the NYSE on December 31, 2025. 2Includes LTIP awards scheduled to vest in March 2027 and March 2028 (assuming threshold results for performance periods not yet complete) and related dividend equivalents for the dividends declared since the date of grant (which will continue to accrue through each vesting date). These LTIP awards will vest based on performance and provided the officer continues to either be employed by us on the applicable vesting date or has satisfied the conditions under the Qualified Retirement Policy. Also, includes PSU awards (for Mr. Sarvadi and Mr. Arizpe) scheduled to vest on July 1, 2030 (assuming threshold results for performance periods not yet complete). These PSU awards will vest based on performance and provided the officer continues to be employed by us on the applicable vesting date. 3Includes time-vested RSUs, LTIP awards for which the performance period is complete, and dividend equivalents (which will continue to accrue through each vesting date) scheduled to vest as follows provided the officer continues to be employed by us on the applicable vesting date: RSUs of 24,904 on February 28, 2026, 18,472 on February 28, 2027 and 10,048 on February 28, 2028 and LTIP awards of 4,930 in March 2026 and 15,253 in March 2027. 4Includes time-vested RSUs, LTIP awards for which the performance period is complete, and dividend equivalents (which will continue to accrue through each vesting date) scheduled to vest as follows provided the officer continues to be employed by us on the applicable vesting date: RSUs of 9,218 on February 28, 2026, 6,970 on February 28, 2027 and 3,921 on February 28, 2028 and LTIP awards of 1,135 in March 2026 and 3,633 in March 2027. 5Includes time-vested RSUs, LTIP awards for which the performance period is complete, and dividend equivalents (which will continue to accrue through each vesting date) scheduled to vest as follows provided the officer continues to be employed by us on the applicable vesting date: RSUs of 6,824 on February 28, 2026, 5,208 on February 28, 2027 and 3,051 on February 28, 2028 and LTIP awards of 547 in March 2026 and 1,721 in March 2027. 6Includes time-vested RSUs, LTIP awards for which the performance period is complete, and dividend equivalents (which will continue to accrue through each vesting date) scheduled to vest as follows provided the officer continues to be employed by us on the applicable vesting date: RSUs of 4,313 on February 28, 2026, 3,844 on February 28, 2027 and 2,178 on February 28, 2028 and LTIP awards of 1,329 in March 2027.
OUTSTANDING EQUITY AWARDS TABLE AT 2025 FISCAL YEAR END
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OPTION EXERCISES AND STOCK VESTED TABLE FOR FISCAL YEAR 2025
OPTION EXERCISES AND STOCK VESTED TABLE FOR FISCAL YEAR 2025
OPTION EXERCISES AND STOCK VESTED TABLE FOR FISCAL YEAR 2025
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)1 | | Paul J. Sarvadi | — | — | 45,833 | 4,031,284 | | A. Steve Arizpe | — | — | 13,515 | 1,188,676 | | James D. Allison | — | — | 8,237 | 724,453 | | Christian P. Callens | — | — | 2,679 | 235,590 |
OPTION EXERCISES AND STOCK VESTED TABLE FOR FISCAL YEAR 2025
1Represents the value of the shares on the vesting date based on the last reported closing price of our common stock on the NYSE immediately preceding the vesting date.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Our current and former NEOs are eligible to receive potential payments and benefits in connection with an involuntary termination without cause, qualifying retirement, termination due to death or disability, or termination under certain circumstances during the 18-month period following a change in control of the Company, or the completion of a change in control in which the continuing entity fails to assume, replace or substitute outstanding equity awards under the Incentive Plan with new awards of equivalent or greater value and on substantially equivalent or more favorable terms (“CIC Non-Assumption”). The table and discussion below describes potential payments and other benefits that would have been received or receivable by each NEO under our executive severance plan or related plans and agreements, including our Incentive Plan and Long-Term Incentive Program (including the applicable award agreements), if employment had been
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
terminated under various circumstances on December 31, 2025. The timing of the payments described below to the NEOs may also be subject to the provisions of Section 409A which may delay payment. For equity awards, we calculated the value using the closing price on the last trading day of our fiscal year ending December 31, 2025.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| | Retirement ($) | Termination Not For Cause ($) | Death or Disability ($) | Termination Not For Cause or For Good Reason After Change in Control or a CIC Non-Assumption ($) | | Paul J. Sarvadi | | | | | | Cash Severance1 | — | 2,412,000 | — | 7,537,500 | | Time-vested RSUs2 | 2,068,577 | — | 2,068,577 | 2,068,577 | | Short-Term Incentive Program3 | 1,019,684 | 1,809,000 | — | — | | Long-Term Incentive Program4 | 1,265,151 | — | 1,567,329 | 3,315,958 | | Special Performance-based Equity Award5 | — | — | — | — | | Continued Health Care Benefits6 | — | 47,689 | — | 59,612 | | Total | 4,353,412 | 4,268,689 | 3,635,906 | 12,981,647 | | A. Steve Arizpe | | | | | | Cash Severance1 | — | 1,161,000 | — | 3,483,000 | | Time-vested RSUs2 | 778,620 | — | 778,620 | 778,620 | | Short-Term Incentive Program3 | 545,302 | 967,500 | — | — | | Long-Term Incentive Program4 | 303,162 | — | 380,249 | 818,496 | | Special Performance-based Equity Award5 | — | — | — | — | | Continued Health Care Benefits6 | — | 36,733 | — | 48,977 | | Total | 1,627,084 | 2,165,233 | 1,158,869 | 5,129,093 | | James D. Allison | | | | | | Cash Severance1 | — | 870,000 | — | 2,436,000 | | Time-vested RSUs2 | — | — | 584,014 | 584,014 | | Short-Term Incentive Program3 | — | 638,000 | — | — | | Long-Term Incentive Program4 | — | — | 185,932 | 407,575 | | Continued Health Care Benefits6 | — | 52,616 | — | 70,155 | | Total | — | 1,560,616 | 769,946 | 3,497,744 | | Christian P. Callens, | | | | | | Cash Severance1 | — | 705,000 | — | 1,880,000 | | Time-vested RSUs2 | — | — | 400,171 | 400,171 | | Short-Term Incentive Program3 | — | 470,000 | — | — | | Long-Term Incentive Program4 | — | — | 123,797 | 285,980 | | Continued Health Care Benefits6 | — | 35,767 | — | 47,689 | | Total | — | 1,210,767 | 523,968 | 2,613,840 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
We have no employment agreements in place for our NEOs or other executive officers. In the event an NEO voluntarily terminates employment (other than for good reason following a change in control of the Company) or employment is terminated for cause, there are no additional payments or benefits beyond any base salary accrued through the date of termination. There are no unvested outstanding stock options and none have been granted to our executive officers. All outstanding awards granted to employees, including to our NEOs, under the Incentive Plan include a “double trigger” requirement in the event of a change in control of the Company (as defined under our Incentive Plan). As a result of the double trigger
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
requirement, awards will not vest following a change in control unless there is a qualifying termination of employment after the change in control (see “Executive Compensation — Compensation Discussion and Analysis” for additional information). There is no excise tax gross-up provision with respect to payments contingent upon a change in control under any of the Company’s plans, programs and we have no agreements with any of our executive officers. 1Cash Severance – NEOs and other executive officers are eligible to participate in our Executive Severance Plan (“Severance Plan”) approved by the Board. Participation in the Severance Plan is conditioned upon execution of a participation agreement which includes certain restrictive covenants in favor of the Company, including a non-compete, a non-solicitation of customers and a non-solicitation of employees. Our NEOs have all executed the participation agreement. Under the Severance Plan, our current NEOs, if involuntarily terminated without “cause” (as defined in the Severance Plan) other than following a change in control (as defined in our Incentive Plan (“Change in Control”)), would receive cash severance in substantially equal installments during the severance period of 24 months for the CEO and 18 months for the other NEOs at their respective base salary in effect as of the date of termination. Our current NEOs, if involuntary terminated without cause or terminate for “good reason” (as defined in our Severance Plan) during the 18-month period after a Change in Control, would receive a lump sum cash severance equal to 30 months for the CEO and 24 months for the other NEOs of their respective base salary in effect as of the date of termination and their respective target annual bonus under the Short-Term Incentive Program. Under terms of the Severance Plan, each NEO is required to enter into a general release of claims upon termination of employment, and payments remain conditioned upon the NEO’s continued adherence to non-competition, non-solicitation and non-disparagement covenants. 2Time-based RSUs – At December 31, 2025, the NEOs have time-based restricted stock units (“RSUs”) outstanding under our Incentive Plan. The treatment of these equity awards will vary depending on the circumstances of the termination. Under the Company’s Qualified Retirement Policy, RSU awards will continue to vest in accordance with an award’s vesting schedule provided the NEO’s last day of employment is at least 6 months after the grant date, the NEO has attained age 62 with 15 years of continuous service and the NEO provides the Company with 6 months advance notice of retirement and signs a general release of claims. RSUs are also credited with any dividend equivalents from the grant date. In the event an NEO is involuntarily terminated, with or without cause, all unvested RSUs are forfeited. In the event of an NEO’s death, disability, a CIC Non-Assumption, or if during the 18-month period after a Change in Control a current NEO is involuntary terminated without cause or terminates for good reason (as defined in the applicable award agreement), all unvested RSUs are immediately vested and distributed, along with any dividend equivalents accrued on the RSUs, which are distributed in the form of additional shares. 3Short-Term Incentive Program – Our Short-Term Incentive Program provides for the annual bonus award to be forfeited if employment is terminated prior to the payment date, including in the event of death or disability. Under the Company’s Qualified Retirement Policy, Short-Term Incentive Program awards will be payable pro-rata based on the number of days the NEO was employed that year, at the actual level of achievement, and when awards are normally paid, provided the NEO has attained age 62 with 15 years of continuous service, provides the Company with 6 months advance notice of retirement and signs a general release of claims. Under the Severance Plan, our current NEOs, if involuntarily terminated without cause, would receive a pro-rated lump sum payment when awards are normally paid but the amount will be based on the number of days the NEO was employed that year and assuming the target level of achievement. Our current NEOs, if involuntary terminated without cause or terminate for good reason (as defined in the Severance Plan) during the 18-month period after a Change in Control, are not entitled to any additional payment under the Short-Term Incentive Program, rather, the target annual bonus is included as part of the cash severance multiplier. 4Long-Term Incentive Program – At December 31, 2025, our NEOs have performance based LTIP awards outstanding under our Incentive Plan. The treatment of the LTIP awards will vary depending on the circumstances of the termination. Under the Company’s Qualified Retirement Policy, provided the NEO’s last day of employment is at least 6 months after the grant date, the NEO has attained age 62 with 15 years of continuous service and the NEO provides the Company with 6 months advance notice of retirement and signs a general release of claims, the LTIP awards will vest as follows: (i) any portion of the LTIP award with a performance period that ends prior to the NEO’s retirement date will be paid based on actual achievement of the performance goal(s); (ii) any portion of the LTIP award with a performance period that begins before, but then ends after, the NEO’s retirement date will be paid based on actual achievement of the performance goal(s) during the performance period(s) pro-rated by a fraction, with the numerator of the total number of days of the NEO’s employment from the first day of the performance period through the date of the NEO’s retirement, and the denominator of the total number of days encompassing the first day of the performance period and the last day of the applicable performance period; and (iii) the portion of an LTIP award with any performance period that begins on or after the NEO’s retirement date will be forfeited. Any LTIP amount determined under the Qualified Retirement Policy will be paid when the LTIP is regularly scheduled to be paid. Upon termination due to disability or death, provided the NEO has been continuously employed since the LTIP award date, outstanding awards will continue to vest based on actual achievement of the performance goal(s) during the performance period(s) pro-rated by a fraction, with the numerator of the total number of days of the NEO’s employment from the grant date through the date of the NEO’s disability or death, and the denominator of the total number of days encompassing the first day of the first performance period and the last day of the last performance period applicable to the award (if multiple performance periods). Any LTIP amount determined on account of death or disability will be paid when the LTIP is regularly scheduled to be paid. In the event an NEO is involuntarily terminated, with or without cause, other than in connection with a “change in control,” all unvested LTIP awards are forfeited. In the event of a CIC Non-Assumption or if the NEO has a “qualifying termination” (as defined in the LTIP) following a Change in Control, the NEO is eligible to receive the change in control value calculated based on the sum of (i) actual performance results for any performance period that was completed on or prior to the date of the change in control and (ii) for any incomplete performance period the greater of target performance or actual
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
performance (if measurable). For a qualifying termination, the change in control value is to be paid at the normal time, while a CIC Non-Assumption would result in a shorter period to make payment. In the event the NEO terminates due to death or disability following a change in control, the change in control value shall be prorated. LTIP awards are also credited with any dividend equivalents from the grant date. 5Special Performance-based Equity Award – Under the terms of the PSUs, which were only granted to the CEO and President, the awards are excluded from the Company’s Qualified Retirement Policy and the awards are also forfeited if the executive resigns or is terminated for cause prior to the end of the five-year performance period. In the event of death, disability or an involuntary termination without cause, an executive is eligible to receive the number of PSUs, if any, corresponding to the highest performance level previously achieved within the performance period or achieved within sixty days following the executive’s last day of employment. For a Change in Control, the PSUs will not automatically vest nor accelerate. In the event of a Change in Control or in the event of a CIC Non-Assumption, the executive is eligible to receive the number of PSUs corresponding to the actual performance level achieved, if any, corresponding to the greater of (i) the highest performance level previously achieved within the performance period, (ii) the actual closing stock price on the date of the Change in Control, (iii) the value received in exchange for each share of Company common stock, or (iv) except for a merger, sale or disposition of all or a substantial portion of the Company’s assets, or the issuance of shares of stock of the Company in connection with the acquisition of the stock or assets of another entity (as further described in the Incentive Plan) the highest performance level achieved following a Change in Control. If the executive is involuntarily terminated without cause or resigns for good reason (as defined in the PSU award agreement) following a Change in Control, the executive is eligible to receive the number of PSUs, if any, corresponding to the highest performance level achieved from the grant date through the period ending sixty days after an executive’s last day of employment, otherwise PSUs following a Change in Control will vest five years after the original grant date. For more detailed specifics regarding PSUs upon termination or following a Change in Control, please read our Form 8-K filed on July 1, 2025. 6Continued Health Care Benefits – Under the Severance Plan, our NEOs, if involuntarily terminated without “cause” or, following a “change in control,” terminates for “good reason” (as those terms are defined in the Severance Plan), would receive medical, dental and vision insurance under arrangements in which the NEO and/or the NEO’s dependents participated immediately prior to the date of termination, at no greater monthly premium cost to the NEO. These benefits shall continue for the same number of months that the cash severance benefit is determined for the NEO. The Company’s obligation to continue medical, dental and vision coverage terminates at the end of the severance period or, if earlier, when an NEO is employed by another party and is eligible for such coverage.
CEO PAY RATIO
CEO PAY RATIO Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of Regulation S-K, we are required to provide the ratio of the annual total compensation of Mr. Sarvadi, the CEO, to the annual total compensation of our median employee. As of December 31, 2025: •The annual total compensation of our median corporate employee was $101,318; and •The annual total compensation of the CEO, as reported in the Summary Compensation Table, was $16,813,013. Based on this information, the ratio for 2025 of the annual total compensation for the CEO to the total annual compensation of our median employee was 166 to 1. In order to determine this ratio, we first identified one of our employees as the median employee. We identified our median employee based on total annualized compensation paid during 2025 to all of our corporate employees, other than the CEO, who were employed by us on December 31, 2025. No cost of living adjustments were utilized in the compensation calculation. We did not include worksite employees in our calculations because our clients, who are unaffiliated third parties, determine the compensation of worksite employees. After identifying the median employee, we calculated the annual total compensation of that employee using the same methodology used to calculate the compensation of our named executive officers in the Summary Compensation Table. The ratio presented above is a reasonable estimate calculated in a manner consistent with SEC rules for identifying the median employee and determining the ratio. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions, the pay ratio presented above may not be comparable to the pay ratio reported by other companies.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The information provided below is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(v) of Regulation S-K, which require that we, among other things, report the amount of “compensation actually paid” to our NEOs for the fiscal years listed below. These amounts are calculated in accordance with applicable SEC rules, and do not reflect the actual amount of compensation earned, realized or paid to our NEOs during each applicable year.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
The guiding principles of our compensation philosophy are that pay should be linked to performance and that the interests of our executives and stockholders should be aligned. Please refer to the Compensation Discussion and Analysis section for details regarding how the Compensation Committee links the compensation paid to our NEOs to our corporate performance.
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (a) | Summary Compensation Table Total for PEO1 ($) (b) | Compensation Actually Paid to PEO2 ($) (c) | Average Summary Compensation Table Total for Non-PEO NEOs3 ($) (d) | Average Compensation Actually Paid to Non-PEO NEOs2 ($) (e) | Total Shareholder Return (TSR)4 ($) (f) | Peer Group Total Shareholder Return (TSR)5 ($) (g) | Net Income6 ($ in millions) (h) | Company Selected Measure (CSM) Adjusted EBITDA7 ($ in millions) (i) | | 2025 | 16,813,013 | 3,045,371 | 3,264,227 | 1,252,678 | 54.91 | 121.68 | (7) | 131 | | 2024 | 9,366,248 | 81,500 | 2,564,421 | 917,878 | 101.83 | 143.93 | 91 | 270 | | 2023 | 8,010,011 | 5,857,449 | 2,047,796 | 1,782,442 | 150.11 | 121.22 | 171 | 354 | | 2022 | 10,700,380 | 15,936,961 | 3,035,129 | 3,804,625 | 142.65 | 113.87 | 179 | 352 | | 2021 | 9,624,154 | 13,826,504 | 2,754,388 | 3,770,647 | 145.44 | 152.43 | 124 | 255 |
PAY VERSUS PERFORMANCE
1Mr. Sarvadi was our principal executive officer or “PEO” for each of the reported fiscal years. The dollar amounts reported in column (b) are the amounts reported for Mr. Sarvadi, for each corresponding year in the Total column of the Summary Compensation Table. 2The dollar amounts reported in column (c) and column (e) represent the amount of “compensation actually paid” to Mr. Sarvadi and to our non-PEO NEOs as a group, respectively, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the total compensation actually earned, realized or received. In accordance with these rules, the amounts reflected as Total Compensation in the Summary Compensation Table were adjusted as shown below:
PAY VERSUS PERFORMANCE
| Summary Compensation Table Total to Compensation Actually Paid Reconciliation | | | | | | | | | | Summary Compensation Total ($) | Less: Value of stock awards reported in Summary Compensation Table in the covered year ($) | Plus: Year-end fair value of outstanding and unvested equity awards granted in the year ($) | Plus (Less): Year-over-year change in fair value of outstanding and unvested equity awards granted in prior yearsa ($) | Plus (Less): Year-over-year change in fair value of equity awards granted in prior years that vested in the year ($) | Less: Value of stock awards granted in prior years that failed to meet vesting conditions in the year ($) | Compensation Actually Paid ($) | | PEO 2025 | 16,813,013 | (14,558,893) | 4,317,376 | (3,987,814) | 461,689 | — | 3,045,371 | | Non-PEO NEOs 2025 | 3,264,227 | (2,185,550) | 734,543 | (643,698) | 83,156 | — | 1,252,678 |
PAY VERSUS PERFORMANCE
a Includes value of any dividend equivalents credited in the applicable year that are otherwise not reflected in the fair value of such award. 3The names of each of the NEOs included for these purposes in each applicable year were as follows: (a) for 2025 Messrs. Allison, Arizpe, and Callens, (b) for 2024 Messrs. Allison, Arizpe, and Callens, as well as Mr. Sharp, our retired Executive Vice President of Finance, Chief Financial Officer and Treasurer; (c) for 2023 Messrs. Allison, Arizpe, and Sharp, as well as Daniel D. Herink, our retired Executive Vice President of Legal, General Counsel and Secretary; (d) for 2022, Messrs. Allison, Arizpe, Herink, and Sharp; and (e) for 2021, Messrs. Allison, Arizpe, Herink, and Sharp as well as Mr. Mincks, our retired Executive Vice President of Sales and Marketing. The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s non-PEO NEOs as a group in the Total column of the Summary Compensation Table. 4Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. For fiscal year 2025, the beginning of the measurement period is December 31, 2020. 5The Peer Group TSR used for this purpose is the S&P 1500 Composite Human Resource and Employment Services Index, which we also use in the stock performance graph required by Item 201(a) of Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. 6Net Income is a GAAP financial measure. Please read our annual report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026 and our prior Form 10-K for the year ended December 31, 2022 filed with the SEC on February 9, 2023. 7Adjusted EBITDA is a non-GAAP financial measure used by management to analyze the Company’s performance. Adjusted EBITDA represents EBITDA (earnings before interest, taxes, depreciation and amortization) plus stock-based compensation, amortization of SaaS implementation
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
costs and certain other predefined specified items. Please read Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures,” in our annual report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026 and our prior Form 10-K for the year ended December 31, 2022 filed with the SEC on February 9, 2023 for a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.
Relationship Between Compensation Actually Paid and Performance
Relationship Between Compensation Actually Paid and Performance The charts that follow depict the relationship of "compensation actually paid" (“CAP”) to our PEOs and non-PEO NEOs to (1) the TSR of the Company and its peer group (as described in footnote 4 to the table above), (2) the Company's net income, and (3) the Company's annual non-GAAP Adjusted EBITDA. Pursuant to applicable regulations, CAP reflects adjustments to the fair value of equity awards during the years presented. Changes in our stock price and the projected and actual achievement of our performance goals greatly impact the total CAP reported for each year presented. For fiscal year 2024, the decrease in CAP for our non-PEO NEOs was also a reflection of the retirement in 2023 as an executive officer of our long-time Executive Vice President of Legal, General Counsel and Secretary, Mr. Herink; the addition of a less tenured executive, Mr. Callens as an NEO in 2024; and the cessation of Mr. Herink as a reported NEO in 2024. For fiscal years 2020 to 2022, the decrease in CAP for our non-PEO NEOs was also a reflection of the retirement in 2021 of our long-time Executive Vice President of Sales and Marketing, Mr. Mincks; the addition of a less tenured executive, Mr. Allison as an NEO in 2021; and the cessation of Mr. Mincks as a reported NEO in 2022.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION We use a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Board. Our non-employee directors were compensated for 2025 as shown in the table below and are also reimbursed for reasonable expenses incurred in serving as a director. All compensation, except for reimbursement of actual expenses, can be taken in cash or our common stock, at the director’s option. Directors who are our employees receive no additional compensation for serving on the Board. In 2025, directors were entitled to the following compensation:
DIRECTOR COMPENSATION
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DIRECTOR COMPENSATION
| | Board | Compensation Committee | Finance, Risk Management and Audit Committee | Nominating and Corporate Governance Committee | Lead Independent Director | Commonality, Equality, & Cohesion Board Liaison | | Annual Retainers | $85,000 | $10,000 | $15,000 | $5,000 | $42,500 | $35,000 | | Annual Committee Chair Fees | N/A | $15,000 | $25,000 | $15,000 | N/A | N/A |
DIRECTOR COMPENSATION
On the date of each Annual Meeting of Stockholders, each non-employee director receives an annual director award of unrestricted shares of our common stock. For 2025, the aggregate fair market value of this award was $190,058, which was determined based on the closing price of our common stock on the date of grant. The awards are rounded up to the next higher whole share amount in the case of a fractional share amount. Each person who is initially appointed or elected as a director of the Company receives an initial director award comprised of a pro-rated portion of the annual director award. The Compensation Committee reviewed a report prepared by FW Cook benchmarking director compensation for the Company’s compensation peer group. After review and consideration of FW Cook’s recommendations, the Compensation Committee recommended, and in November 2025, the Board approved, an amendment to the Company’s Directors Compensation Plan for 2026 that increased the annual Board retainer to $90,000 and increased the aggregate fair market value of the annual director award of restricted shares of our common stock to $195,000. In addition, the Board further agreed that future director awards of common stock will be subject to a one-year vesting period.
DIRECTORS’ COMPENSATION TABLE
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)1 | Option Awards ($) | All Other Compensation ($) | Total ($) | | Timothy T. Clifford | 157,500 | 190,058 | — | — | 347,558 | | Eli Jones | 120,000 | 190,058 | — | — | 310,058 | | Carol R. Kaufman | 115,000 | 190,058 | — | — | 305,058 | | John L. Lumelleau | 100,000 | 190,058 | — | — | 290,058 | | Ellen H. Masterson | 125,000 | 190,058 | — | — | 315,058 | | Randall Mehl | 95,000 | 190,058 | — | — | 285,058 | | John M. Morphy | 100,000 | 190,058 | — | — | 290,058 | | Latha Ramchand | 100,000 | 190,058 | — | — | 290,058 | | Richard G. Rawson | 85,000 | 190,058 | — | — | 275,058 | | W. Philip Wilmington | 95,000 | 190,058 | — | — | 285,058 |