DEF 14A of Eplus Inc
Filed Jul 25, 2023 · FY20230001022408-23-000052
Our Board of Directors
Our Board of Directors
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS ePlus’ Board of Directors (the “Board of Directors” or “Board”) is currently composed of eight directors who are “independent,” and one director, our Chief Executive Officer, Mark Marron, who is not “independent,” within the meaning of Nasdaq’s listing standards. C. Thomas Faulders continued as our board Chairman during the fiscal year 2023. The Board’s Nominating and Corporate Governance Committee has recommended to the Board, and the Board has nominated, each of our sitting directors for election at our 2023 Annual Meeting, having found they each possess the requisite knowledge, skills, and abilities to oversee the Company’s long-term business objectives.
PROPOSAL 1 – ELECTION OF DIRECTORS
| ePlus Director Nominees for the 2023 Annual Meeting | | | | | | | | | | Board Committees | | | | | | Name | Age | Audit | Compensation | Nominating& Corporate Governance | Number of Other Public Company Boards | Independent Director | | Renée Bergeron | 60 | | ✔ | ✔ | 0 | ✔ | | Bruce M. Bowen | 71 | | | | 0 | ✔ | | John E. Callies | 69 | ✔ | Chair | | 0 | ✔ | | C. Thomas Faulders, III, Chairman | 73 | ✔ | ✔ | | 0 | ✔ | | Eric D. Hovde | 59 | | ✔ | ✔ | 0 | ✔ | | Ira A. Hunt, III | 67 | | ✔ | ✔ | 0 | ✔ | | Mark P. Marron, CEO and President | 62 | | | | 0 | | | Maureen F. Morrison | 69 | Chair | | ✔ | 1 | ✔ | | Ben Xiang | 38 | ✔ | | Chair | 0 | ✔ |
PROPOSAL 1 – ELECTION OF DIRECTORS
More information about our Board, including their biographies, is available in Proposal 1 – Election of Directors.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE DIRECTOR NOMINEES
PROPOSAL 1 – Election of Directors
PROPOSAL 1 – Election of Directors Adopting the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated each of its current directors—Mses. Bergeron and Morrison, and Messrs. Bowen, Callies, Faulders, Hovde, Hunt, Marron and Xiang—to be elected to serve until the 2024 Annual Meeting of Shareholders, or until their successors are duly elected and qualified. Biographical information as of July 21, 2023, for each nominee is provided herein. Each of the nominees has agreed to be named in this proxy statement and serve if elected, and we know of no reason why any of the nominees would be unable to serve. If, however, any nominee is unable or declines to serve as a director, or if a vacancy occurs before the election (such events are not anticipated), the proxy holders will vote for the election of such other person or persons as the Board nominates. Each of the nine nominees for director will be elected by a plurality of the shares present in person or by proxy at the 2023 Annual Meeting and entitled to vote on the election of directors, subject to the Company’s director resignation policy should any director not receive a majority of the votes cast. Withheld votes and broker non-votes will have no effect on the vote for this proposal.
2023 Nominees for Election to the Board of Directors
2023 Nominees for Election to the Board of Directors The below graphics provide information regarding members of our Board, including certain types of attributes, qualifications and expertise possessed by one or more of our directors that our Board believes are relevant to our business. The graphics do not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not mean that our Board does not possess it. In addition, the absence of a particular knowledge, skill, experience or attribute with respect to any of our directors does not mean the director in question has no relevant experience or is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill, experience, and attribute listed may vary among the members of the Board, and the knowledge, skills, experiences, and attributes listed below are not in any order of priority or preference. The following biographies describe the director nominees’ business experience, including their specific experiences and qualifications that, collectively, strengthen the Board’s qualifications, skills, and experience. The Board expects that each of the nominees will be available for election as a director and, if elected, will serve for a term expiring at the 2024 Annual Meeting of Shareholders, and until their successors have been duly elected and qualified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES FOR ELECTION AS DIRECTORS:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Renée Bergeron Independent Director Age 60 | Director of ePlus since 2022 Committees: Compensation Nominating and Corporate Governance Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Ms. Bergeron is Chief Operating Officer of AppDirect, where she provides leadership and strategic vision, and oversees customer operations, technical support, and customer success on a global basis. She joined AppDirect, one of the leading B2B commerce platforms for selling, buying, and managing recurring technology services, in March 2020. From 2010 until 2020, Ms. Bergeron held roles at Ingram Micro, a global leader in technology and supply chain services, most recently as Senior Vice President Global Cloud. Since March 2020 she has also been a board member of FLO EV Charging, a premier manufacturer and network operator of electric vehicle charging solutions. Ms. Bergeron has a Master of Business Administration from McGill University, and a Bachelor’s degree in Information Technology from Université de Sherbrooke. The Board believes that, as a proven industry leader with significant experience across many of ePlus’ strategic focus areas, such as security, cloud and services, Ms. Bergeron brings a strong knowledge base that will help ePlus be the most customer-centric, service-driven partner of choice.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Bruce M. Bowen Independent Director Age 71 | Director of ePlus since 1990 Committees: None Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Bowen founded our company in 1990 and served as our President until September 1996. Beginning in September 1996 until March 2014, Mr. Bowen served as our Executive Vice President and from September 1996 to June 1997 also served as our Chief Financial Officer. In March 2014, Mr. Bowen stepped down as Executive Vice President, and retired as an employee of the company in May 2018 though he continues to serve on the Board. Prior to founding the Company, he served as Senior Vice President of PacifiCorp Capital, Inc., which was an equipment leasing company. In the past, he has also served as Chairman of the Association for Government Leasing and Finance as well as various committees of the Equipment Leasing and Finance Association, which gave him a broad understanding of issues affecting our industry. During his leasing career, Mr. Bowen participated in equipment lease financing transactions in excess of an aggregate of $3 billion, involving many major vendors as well as government contractors. Mr. Bowen has a degree in finance from the University of Maryland as well as a Master of Business Administration in Finance from the University of Maryland. Mr. Bowen’s experience in the leasing industry brings to the Board depth and breadth of knowledge relating to finance and funding. He also has a thorough knowledge of sales and operations activities and in a multitude of industry-specific areas.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| John E. Callies Independent Director Age 69 | Director of ePlus since 2010 Committees: Audit Compensation (Chair) Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Callies has been a Senior Advisor to McKinsey and Company since 2011. Previously, he was employed by IBM in various capacities for 34 years. Mr. Callies served as General Manager of IBM Global Financing from 2004 until his retirement in June 2010. With operations in 55 countries supporting 125,000 clients, Mr. Callies led the world’s largest information technology financing and asset management organization and was responsible for business direction and management of a portfolio of nearly $35 billion in total assets. Mr. Callies has a degree in economics from Lehigh University. The Board believes that Mr. Callies’ knowledge of our business, including the leasing sector, along with his sales, operational and strategic experience bring value to the Board. He additionally has international experience and qualifies as an audit committee financial expert within the meaning of SEC regulations.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| C. Thomas Faulders, III Independent Director and Chairman Age 73 | Director of ePlus since 1998 Committees: Audit Compensation Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Faulders was the President and Chief Executive Officer of the University of Virginia Alumni Association from 2006 to 2017. Prior to that, Mr. Faulders served as the Chairman and Chief Executive Officer of LCC International, Inc. from 1999 to 2005 and as Chairman of Telesciences, Inc., an information services company, from 1998 to 1999. From 1995 to 1998, Mr. Faulders was Executive Vice President, Treasurer, and Chief Financial Officer of BDM International, Inc., a prominent systems integration company. Mr. Faulders also served as the Vice President and Chief Financial Officer of COMSAT Corporation, an international satellite communication company, from 1992 to 1995. He led mergers and acquisitions efforts in several roles, including at MCI, Inc., Comsat, BDM International Inc., and LCC International, Inc., all of which were publicly traded companies during his tenure. He has served on numerous boards in the past and has held roles as chairs of compensation, audit, and governance committees. He is a graduate of the University of Virginia and received a Master of Business Administration from the Wharton School of the University of Pennsylvania. The Board believes Mr. Faulders’ extensive executive and financial experience in the telecommunications and hightech sectors, together with his experience as Chief Executive Officer and Chief Financial Officer of a public company and his leasing and M&A experience, enables him to provide considerable financial expertise, business management and operational knowledge, insight and guidance to the Board. He additionally has international experience and qualifies as an audit committee financial expert within the meaning of SEC regulations.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Eric D. Hovde Independent Director Age 59 | Director of ePlus since 2006 Committees: Compensation Nominating and Corporate Governance Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Hovde is an entrepreneur who has established and managed numerous business enterprises. Mr. Hovde is currently the Chairman and Chief Executive Officer of H Bancorp LLC, a private bank holding company, and has served in such role since 2014. He has served as a director on numerous bank boards throughout his career and has served on the board of H Bancorp’s largest holding, Sunwest Bank, since 1998, where he is also the Chief Executive Officer and has served in such role since 2015. Additionally, Mr. Hovde serves as the Chief Executive Officer and co-owner of Hovde Properties, LLC, a real estate development company, located in Madison, Wisconsin. Mr. Hovde oversees the management of the company and all large development properties. Formerly, Mr. Hovde founded and managed Hovde Financial, an investment banking company focused on the financial services industry, and Hovde Capital, an asset management company that managed capital for institutional clients, family offices, and high net worth individuals. Throughout his career, he has also purchased numerous banks and savings banks throughout the United States and has served on the board of over a dozen banking companies. Charity is a primary principle in the Hovde family and related businesses. Mr. Hovde and his brother, Steven, created and funded The Hovde Foundation in 1998. The foundation focuses on several charitable organizations throughout the United States and worldwide. Principally, The Hovde Foundation’s focus is on assisting disadvantaged children. In this regard, Mr. Hovde founded Hovde Homes, which provides shelter, care, education, and love to vulnerable children that were abandoned on the street or trafficked. Mr. Hovde earned his degrees in Economics and International Relations at the University of Wisconsin – Madison. The Board believes that Mr. Hovde’s expertise in the financial services industry, investment management areas and business operations, as well as his experience on other company boards and with mergers and acquisitions, bring valuable insight to the Board. His deep understanding of the merger and acquisition landscape and his ability to assess synergies and growth opportunities have been instrumental in enhancing shareholder value. He has played a pivotal role in identifying potential targets, conducting due diligence, negotiating transactions, and overseeing integration efforts.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Ira A. Hunt, III Independent Director Age 67 | Director of ePlus since 2014 Committees: Compensation Nominating and Corporate Governance Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Hunt retired from the Central Intelligence Agency in 2013 as its Chief Technology Officer after a 28-year career in intelligence. Since his retirement, he has returned to private consulting practice as President and CEO of Hunt Technology, LLC, which he founded. Hunt Technology, LLC focuses on strategic IT planning, cyber and data-centric security, big data analytics, and cloud computing. From July 2016 through October 2020, he served as Managing Director and Cyber Lead for Accenture Federal Services in Arlington, Virginia, and he has also served as Chief Architect for Bridgewater Associates, the world’s largest hedge fund. He currently serves on the Board of Directors for Mission Link, a non-profit organization, and on the Board of Advisors for Vaga Ventures and LookingGlass. He holds a Bachelor degree in Engineering and Master of Engineering in Civil/Structural Engineering from Vanderbilt University. The Board believes that Mr. Hunt’s extensive knowledge of the technology industry, including strategic IT planning, cyber and data-centric security, big data analytics, cloud computing, and IT architecture and environment, bring valuable industry expertise to the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Mark P. Marron Director, CEO and President Age 62 | Director of ePlus since 2018 Committees: None Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Marron became the CEO and President of ePlus inc. on August 1, 2016, and was appointed to the Board on November 14, 2018. He oversees all corporate strategy for global operations, leading with an emphasis on our greatest asset: our people. He began his career at ePlus in 2005 as Senior Vice President of Sales and became COO in 2010. A 30+ year industry veteran, he was formerly with NetIQ where he held the position of Senior Vice President of Worldwide Sales and Services. Prior to joining NetIQ, Mr. Marron served as General Manager of Worldwide Channel Sales for Computer Associates International Inc., a provider of software and services that enables organizations to manage their IT environments. Through his time with both NetIQ and Computer Associates International Inc., Mr. Marron gained extensive international experience, throughout North America, Europe, the Middle East, and Africa and holds a Bachelor of Science degree in Computer Science from Montclair State University. The Board has determined that Mr. Marron’s role as CEO provides the Board with access to an experienced executive with a thorough understanding of our business and extensive experience in leading sales teams, international sales, and mergers and acquisitions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Maureen F. Morrison Independent Director Age 69 | Director of ePlus since 2018 Committees: Audit (Chair) Nominating and Corporate Governance Other Public Company Directorships: Asbury Automotive Group Inc. (NYSE: ABG) |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Maureen F. Morrison joined the ePlus Board of Directors in June 2018. She is a highly accomplished senior executive leader who retired in 2015 from a career as an audit partner at PricewaterhouseCoopers, LLP (“PwC”). At PwC, Ms. Morrison worked with prominent private equity backed entities and multibillion-dollar global technology corporations. She has diversified experience in software, IT-enabled solutions and consulting, hardware, and manufacturing. As a highly respected financial and accounting professional, Ms. Morrison has extensive experience in corporate boardrooms advising Audit Committees of midcap public companies, private equity-backed entities, and Fortune 500 companies. Ms. Morrison currently is a member of one other publicly traded board of directors: Asbury Automotive Group, where she is the Chair of the Audit Committee and a member of the Compensation and Human Resources Committee and Capital Allocation & Risk Management Committee. She holds a Bachelor of Arts in Business Administration with a concentration in Accounting from Rutgers University. The Board has determined that as a result of her broad experience with complex accounting, financial and risk related issues, as well as her experience on public company boards, Ms. Morrison is well-qualified to assist in the auditor oversight function as an Audit Committee member and brings value as a member of the Board. She also qualifies as an audit committee financial expert within the meaning of SEC regulations.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
| Ben Xiang Independent Director Age 38 | Director of ePlus since 2019 Committees: Audit Nominating and Corporate Governance (Chair) Other Public Company Directorships: None |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
Mr. Xiang currently serves as Senior Vice President, Corporate Development and Strategy at Veritone, an Enterprise AI company. Mr. Xiang joined Veritone in February 2021. Along with leading Veritone’s corporate development and venture activities, Mr. Xiang drives strategy and growth. Prior to that, Mr. Xiang served as interim Chief Information Officer of Sunwest Bank from August 2019 to December 2019. Beginning in 2015 and through the present, he serves in a consulting role through Crescent Group, where his contributions include advising start-ups and established companies in digital transformation and growth. From 2012 through 2019, Mr. Xiang held multiple roles with Ingram Micro, the world’s largest IT distributor, as Ingram’s global executive for the Internet of Things, Artificial Intelligence, and Mixed-Reality business as well as roles in strategy and corporate development. He has extensive experience in cross-border M&A, post-merger integrations, and business operations. Prior to joining Ingram, Mr. Xiang was Managing Director of Fortress Consulting, a management consulting firm supporting Fortune 500 companies in the US, Europe, and China. In 2009, he joined the CITIC Group as Director focusing on investments in technology and media. Prior to that, Mr. Xiang worked for Sony BMG in the areas of digital strategy and transformation. Mr. Xiang has extensive experience throughout Asia Pacific and North America and holds a degree in Finance and Management from the Wharton School at the University of Pennsylvania. Since April 2015, Mr. Xiang has also served on the board of directors of Sunwest Bank. The Board believes that Mr. Xiang’s expertise of go-to-market within the IT channel, knowledge of the technology industry, emerging technology vendors and international M&A experience bring value to the Board.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The below table sets forth the compensation for the members of the Board for the fiscal year ended March 31, 2023. Mr. Marron did not receive any additional compensation for his service as a director during our fiscal year ended March 31, 2023. Mr. Marron’s compensation is reported under “Executive Compensation” herein. The Board’s general policy is that compensation for the non-employee directors should be a mix of cash and equity-based compensation. Directors also have the ability to elect to receive their compensation entirely in equity. During our fiscal year ended March 31, 2023, each non-employee director received an annual cash retainer of $86,250 (on a pro rata basis for Ms. Bergeron based on her nomination during fiscal year 2022), reflecting four quarterly payments of $21,562.50, or, alternatively, at the director’s election, the same amount in stock in lieu of cash, rounded down to avoid a fractional share. Stock that directors receive in lieu of cash is not subject to forfeiture or a vesting period. In September 2022, each non-employee director also received $83,413.80 in restricted stock (except for Ms. Bergeron, who received $81,182 in restricted stock upon her appointment to the board on October 13, 2022, representing a pro rata amount), which is equal to the amount of cash compensation earned by directors during the prior fiscal year, as more fully set forth in our 2017 Non-Employee Director Long-Term Incentive Plan (“2017 Director LTIP”). This number of shares of restricted stock granted is rounded down to avoid a fractional share award, and vests in equal installments on the first- and second-year anniversaries of the grant. Our Board’s Chairman, Mr. Faulders, also receives an additional annual cash compensation of $50,000, which is paid quarterly in equal amounts of $12,500. Directors are also reimbursed for out-of-pocket expenses incurred to attend Board and committee meetings and the Annual Meeting.
2023 Director Compensation Table
2023 Director Compensation Table The tables below show compensation for all directors except for Mr. Marron, whose compensation is in the Summary Compensation Table.
2023 Director Compensation Table
| Name | Fees Earned or Paid in Cash (1) | Stock Awards (2)(3) | Option Awards | All Other Compensation | Total | | Renée Bergeron | $40,313 | $81,182 | $- | $- | $121,495 | | Bruce M. Bowen | $86,250 | $83,414 | $- | $- | $169,664 | | John E. Callies | $86,250 | $83,414 | $- | $- | $169,664 | | C. Thomas Faulders, III | $136,250 | $83,414 | $- | $- | $219,664 | | Eric D. Hovde | $86,250 | $83,414 | $- | $- | $169,664 | | Ira A. Hunt, III | $86,250 | $83,414 | $- | $- | $169,664 | | Maureen F. Morrison | $86,250 | $83,414 | $- | $- | $169,664 | | Ben Xiang | $86,250 | $83,414 | $- | $- | $169,664 |
2023 Director Compensation Table
| (1) The above table reflects fees earned during the fiscal year 2023. Pursuant to our 2017 Director LTIP, directors may make a stock fee election, through which they receive shares of stock in lieu of cash compensation. The stock fee elections are made on a calendar year basis, and the stock grant is made on the first business day after the end of each quarter of board service. The number of shares received is determined by dividing the cash compensation earned quarterly by directors ($21,562.50 during our fiscal year ended March 31, 2023) by the Fair Market Value of a share of common stock, as defined in the 2017 Director LTIP, and rounding down to avoid the issuance of a fractional share. |
2023 Director Compensation Table
Messrs. Bowen and Hovde each received stock instead of cash throughout the fiscal year. This stock is not subject to forfeiture or a vesting period. The amount of stock granted for each quarter to Messrs. Bowen and Hovde is shown below:
2023 Director Compensation Table
| Board Service Time | Number of Shares Granted | | April 1, 2022 - June 30, 2022 | 408 | | July 1, 2022 - September 30, 2022 | 507 | | October 1, 2022 - December 31, 2022 | 481 | | January 1, 2023 - March 31, 2023 | 431 |
2023 Director Compensation Table
| (2) The values in this column represent the aggregate grant date fair market values of the fiscal year 2023 restricted stock awards, computed in accordance with Codification Topic Compensation—Stock Compensation. |
2023 Director Compensation Table
| (3) The table below reflects the aggregate number of unvested restricted stock shares outstanding as of March 31, 2023, for each director except Mr. Marron, whose compensation is in the Summary Compensation Table. |
2023 Director Compensation Table
| Name | Unvested Restricted Shares | | Renée Bergeron | 1,874 | | Bruce M. Bowen | 2,840 | | John E. Callies | 2,840 | | C. Thomas Faulders, III | 2,840 | | Eric D. Hovde | 2,840 | | Ira A. Hunt, III | 2,840 | | Maureen F. Morrison | 2,840 | | Ben Xiang | 2,840 |
Directors and Executive Officers
Directors and Executive Officers Share ownership is shown as of our Record Date of July 21, 2023.
Directors and Executive Officers
| Name (1) | Aggregate Number of Beneficial Shares | Percent of Outstanding Shares | Additional Information (2) | | Renée Bergeron | 1,874 | * | Includes 1,874 shares of restricted stock that have not vested as of July 21, 2023. | | Bruce M. Bowen | 36,235 | * | Includes 13,200 shares of common stock held by Bowen Holdings LLC, a Virginia limited liability company, which is owned by Mr. Bowen and his three adult children, of which Mr. Bowen serves as manager. Also includes (a) 2,084 shares held by the Elizabeth Dederich Bowen Trust in which Mr. Bowen's spouse serves as trustee, (b) 17,727 shares held by the Bruce Montague Bowen Trust in which Mr. Bowen serves as trustee, and (c) 2,840 shares of restricted stock that have not vested as of July 21, 2023. | | John E. Callies | 20,448 | * | Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. | | C. Thomas Faulders, III | 44,988 | * | Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. | | Eric D. Hovde | 86,599 | * | Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. Mr. Hovde is the managing member of Hovde Capital, Ltd., the general partner to Financial Institution Partners III LP, which owns 20,396 shares. Mr. Hovde is a trustee of The Eric D. and Steven D. Hovde Foundation, which owns 10,000 shares. | | Ira A. Hunt, III | 23,908 | * | Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. | | Maureen F. Morrison | 9,940 | * | Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. | | Ben Xiang | 8,268 | * | Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. | | Mark P. Marron | 195,330 | * | Includes (a) 78,874 shares of restricted stock that have not vested as of July 21, 2023, (b) 112,227 shares held in a revocable trust in which Mr. Marron serves as trustee, and (c) 4,229 shares held in trust for Mr. Marron's dependent child. | | Elaine D. Marion | 117,781 | * | Includes (a) 69,155 shares held in a revocable trust in which Ms. Marion serves as trustee, (b) 48,202 shares of restricted stock that have not vested as of July 21, 2023, and (c) 424 shares held in an IRA. | | Darren S. Raiguel | 104,767 | * | Includes (a) 56,434 shares held in a revocable trust in which Mr. Raiguel serves as trustee, and (b) 48,202 shares of restricted stock that have not vested as of July 21, 2023. | | All directors and executive officers as a group (11 persons) | 650,138 | 2.41% | |
Directors and Executive Officers
| * Less than 1% |
Directors and Executive Officers
| (1) The business address of Mses. Bergeron, Marion and Morrison, and Messrs. Bowen, Callies, Faulders, Hovde, Hunt, Marron, Raiguel, and Xiang is ePlus inc., 13595 Dulles Technology Drive, Herndon, Virginia 20171. |
Directors and Executive Officers
| (2) Nonvested restricted shares included herein are considered beneficially owned since the owner thereof has the right to vote such shares. |
Our Executive Compensation Program
Our Executive Compensation Program The Company’s goal for its executive compensation (as well as its non-executive compensation) program is to attract, motivate, and retain a talented, entrepreneurial, ethical, and creative executive team who will provide leadership for the Company’s success in dynamic and competitive markets, while remaining attuned to the risks facing the Company. The Company seeks to accomplish this goal in a way that rewards performance, is aligned with its business strategy, and maximizes shareholders’ long-term interests. The Company’s executive compensation program is also intended to promote and maintain stability within the executive team by issuing restricted stock with multi-year vesting terms. The table below summarizes the components of our fiscal year 2023 executive compensation.
Our Executive Compensation Program
| Pay Element | | | | | | | Salary | Annual Cash Incentive | Long-Term Cash Incentive | Restricted Stock | | Who Receives | All NEOs | All NEOs | All NEOs | All NEOs | | When Granted | Annually | Annually | Annually | Annually | | Form of Delivery | Cash | Cash | Cash | Equity | | Performance Type | Short-Term Fixed | Short-Term Variable | Long-Term Variable | Long-Term Fixed | | Performance Period | 1 Year | 1 Year | 3 Years | Vesting Annually over 3 years | | How Payout Determined | Amount Set by Compensation Committee | Formula Determined by Compensation Committee | Formula Determined by Compensation Committee | Amount Determined by Compensation Committee | | Performance Measures | Individual | Consolidated Net Sales; Financing Segment Operating Income; Earnings Before Taxes; Services Gross Profit | Target Increase in Operating Income and Net Sales | Time-Based |
Our Executive Compensation Practices
| | What We Do | | What We Don’t Do | | ✔ | Annual review of our executive compensation programs | | No excessive executive perquisites | | ✔ | Annual advisory vote to approve executive compensation programs (say-on-pay) | | No excessive severance benefits | | ✔ | Periodic market comparison of executive compensation against relevant peer group information | | No supplemental executive retirement plans | | ✔ | Periodic use of an independent compensation consultant reporting directly to the Compensation Committee and providing no other services to the Company | | No acceleration of unvested stock upon retirement | | ✔ | Significant percentage of cash compensation delivered in the form of variable compensation, which is “at-risk” and tied to quantifiable performance measures | | No hedging or short sales of our securities | | ✔ | Long-term vesting of restricted stock, to align executive and shareholder interests (minimum of three-year vesting) | | No pledging of our securities, except in limited circumstances with pre-approval by the Insider Trading Compliance Officer | | ✔ | Robust executive officer stock ownership guidelines require NEOs to hold ePlus stock | | No tax gross-ups on benefits (other than as also provided to non-executive officer employees) | | ✔ | Clawback provisions to mitigate undue risk regarding executive compensation practices | | |
Long-Term Cash Incentive Compensation
Long-Term Cash Incentive Compensation Beginning with the 2020 fiscal year, the Compensation Committee revised the executive compensation program by adding a long-term cash component to further encourage executives to focus on the long-term value to shareholders. The long-term cash awards are made pursuant to the Employee Long-Term Incentive Plan in effect at the date of the award and are based on one or more three-year financial metrics. For more information on the long-term cash incentive compensation, see “Long-Term Incentive Program” below.
Annual Cash Incentive Awards
Annual Cash Incentive Awards During the 2023 fiscal year, we provided our NEOs with short-term cash incentive compensation through our annual Cash Incentive Plan. This short-term, variable cash compensation represents a significant portion of each NEO’s target total cash compensation opportunity in a given year.
Cash Incentive Plan Pay for Performance Alignment
Cash Incentive Plan Pay for Performance Alignment Our Compensation Committee annually reviews, and then sets, performance goals under a Cash Incentive Plan, which was adopted by the Compensation Committee in 2018 (“2018 CIP”). During the 2023 fiscal year, short-term performance goals and cash awards were made under our 2018 CIP. The combination of performance goals the Compensation Committee chose for fiscal year 2023 emphasizes factors that the Compensation Committee believes are important to Company strategy, future growth and enhancing shareholder value. The Compensation Committee administers the 2018 CIP and has full authority to determine which of the Company’s executive officers will participate in the 2018 CIP; the terms and amounts of each participant’s minimum, target, and maximum awards; and the period during which the performance is to be measured.
Cash Incentive Awards for Fiscal Year 2023
Cash Incentive Awards for Fiscal Year 2023 For the fiscal year ended March 31, 2023, our NEOs’ cash bonuses were earned pursuant to the 2018 CIP, based on the following financial performance goals: consolidated net sales (20%), financing segment operating income (20%), earnings before tax (30%), and services gross profit (30%). The award opportunity in fiscal year 2023 was based on a target amount, which was adjusted based on the level of attainment of financial performance as set forth in each participant’s award agreement, and payouts may range between 0% to 200% of target award amounts. For fiscal year 2023, the target award amount for each of the NEOs was 100% of their base salary amount. All three of the participating executive officers had the same financial performance goals and the same performance weights. The fiscal year 2023 financial performance weights and target amounts for each participant were as follows:
Cash Incentive Awards for Fiscal Year 2023
| | Consolidated Net Sales | | Financing Segment Operating Income | | Earnings Before Taxes | | Services Gross Profit | | | | Named Executive Officer | Percentage of Total Bonus | Target Bonus Amount | Percentage of Total Bonus | Target Bonus Amount | Percentage of Total Bonus | Target Bonus Amount | Percentage of Total Bonus | Target Bonus Amount | Total Target Bonus Amount | | Mark P. Marron | 20.0% | $185,000 | 20.0% | $185,000 | 30.0% | $277,500 | 30.0% | $277,500 | $925,000 | | Elaine D. Marion | 20.0% | $100,000 | 20.0% | $100,000 | 30.0% | $150,000 | 30.0% | $150,000 | $500,000 | | Darren S. Raiguel | 20.0% | $100,000 | 20.0% | $100,000 | 30.0% | $150,000 | 30.0% | $150,000 | $500,000 |
Cash Incentive Awards for Fiscal Year 2023
The 2018 CIP also permits the exclusion of all items of income, gain or loss determined by the Board to be extraordinary or unusual in nature and not incurred or realized in the ordinary course of business, the incentive compensation expensed by ePlus for payments under the 2018 CIP, and any revenue, gain, or loss attributable to the business operations of any entity acquired by us during the fiscal year. Possible bonus payouts ranged between 0% and 200% of the target amount, depending on the level of achievement of the performance goals for the fiscal year 2023. The financial performance goals were as follows:
Cash Incentive Awards for Fiscal Year 2023
| | Performance Goals | | | | | Performance Level (Dollars in thousands) | Consolidated Net Sales (20%) | Financing Segment Operating Income (20%) | Earnings Before Taxes (30%) | Services Gross Profit (30%) | | Maximum | n/a(1) | n/a(1) | n/a(1) | n/a(1) | | Target | $1,926,732 | $33,969 | $149,793 | $104,460 | | Threshold (75% of Performance Goal) | $1,445,049 | $25,477 | $112,345 | $78,345 | | Below Threshold | < $1,445,049 | < $25,477 | < $112,345 | < $78,345 |
Cash Incentive Awards for Fiscal Year 2023
| (1) The maximum payout of 200% of the target award can be achieved based on the results of one or more of the performance goals. The threshold and escalators for each performance goal are as follows: |
Cash Incentive Awards for Fiscal Year 2023
| Amount of Goal Achieved | Award Amount | | Less than 75% of Goal Target | No award relating to that target | | Between 75% - 100% of Goal Target | Award shall be 50% of target, plus an additional 2.0% for each percentage point over 75% of Goal Target achieved | | 100% of Goal Target | 100% of target for that Goal | | More than 100% of Goal Target | 100% of target for that Goal, plus an additional 5.0% for each percentage point over 100% of Goal Target achieved | | Total Maximum Award for all goals combined | 200% of Target |
Cash Incentive Awards for Fiscal Year 2023
At the conclusion of the fiscal year ended March 31, 2023, the Compensation Committee determined which of the financial objectives described under the 2018 CIP and in the award agreements were achieved. There were no waivers or modifications to any specified performance targets, goals, or conditions with respect to the 2018 CIP or award agreements. The achievement of the financial performance goals is set forth below.
Cash Incentive Awards for Fiscal Year 2023
| Performance Criteria (Dollars in thousands) | Goal | Achievement (1) | Amount of Goal Achieved | | Consolidated Net Sales | $1,926,732 | $2,057,882 | 106.8% | | Financing Segment Operating Income | $33,969 | $26,455 | 77.9% | | Earnings Before Taxes | $149,793 | $164,449 | 109.8% | | Services Gross Profit | $104,460 | $93,497 | 89.5% |
Cash Incentive Awards for Fiscal Year 2023
| (1) Performance Criteria achievement were adjusted to exclude the incentive compensation accrued by the Company, and income and expenses related to acquisitions, if any, and the Performance Criteria goals were adjusted to exclude incentive compensation targets. |
Cash Incentive Awards for Fiscal Year 2023
The following table details the payments earned in the fiscal year ended March 31, 2023, and 2022, respectively (but paid in the subsequent fiscal year) for each NEO:
Cash Incentive Awards for Fiscal Year 2023
| Named Executive Officer | FY 2023 Annual Incentive Cash Payment Earned | FY 2022 Annual Incentive Cash Payment Earned | % Change | | Mark P. Marron | $983,627 | $1,750,000 | (44%) | | Elaine D. Marion | $531,690 | $950,000 | (44%) | | Darren S. Raiguel | $531,690 | $950,000 | (44%) |
Long-Term Incentive Program
Long-Term Incentive Program Under our 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”), the Compensation Committee has the authority to award various forms of long-term incentive compensation grants, such as cash awards, stock options, restricted stock awards, and restricted stock units. The Compensation Committee’s objectives for the fiscal year 2023 long-term equity-based and cash incentive awards to our NEOs were to focus executives on long-term profitable growth and shareholder value creation and the Company’s long-term strategic plan, and retain the services of our executives through multi-year vesting requirements. Mr. Marron makes recommendations to the Compensation Committee for equity grants to NEOs, including to himself; however, the Compensation Committee deliberates and reaches its own decision regarding grants to all NEOs, including Mr. Marron, who does not participate in any deliberations or votes regarding his own compensation. When determining the level of the grant, the Compensation Committee considers each NEO’s functional and enterprise management responsibilities, potential contributions to the Company’s profitability and growth, the value of prior long-term incentive grants and other non-cash and cash compensation, regular analysis of how the Company performed on multiple financial metrics as compared to certain peers, information from our independent compensation consultant (if any), and each executive’s total compensation, including cash compensation. However, the Compensation Committee does not use a formula or assign a particular weight to any given factor in determining equity award grant levels. Rather, the Compensation Committee’s determination of grant levels is subjective, and the Compensation Committee grants awards that in its judgment are reasonably competitive. The Compensation Committee believes that restricted stock helps to create incentives for performance and further align the interests of executives with those of shareholders because the stock’s value increases or decreases in conjunction with the Company’s stock price. In addition, the Compensation Committee believes that granting awards with multi-year vesting periods creates a substantial retention incentive and encourages the NEOs to focus on the Company’s long-term business objectives and stock performance. All outstanding restricted shares vesting for, or granted to, executive officers and other employees during the fiscal year ended March 31, 2023, vest over a three-year period. For fiscal year 2023, the Compensation Committee used a combination of long-term incentive vehicles, including time-based restricted stock and cash performance awards. These vehicles focus NEOs on driving long-term profitable growth and shareholder value creation.
Long-Term Incentive Program
| Element of LTI | Weight (by value) | Overview of Design | | Time-Based Restricted Stock | CEO: 89% Other NEOs: 90% | • Vests in three equal increments on the first three one-year anniversaries of the grant | | Cash Performance Award | CEO: 11% Other NEOs: 10% | • Grant is tied to achievement of operating income growth • Three-year performance period • Vesting and payout occurs on third year anniversary of grant • Actual payout can range between 0% and 150% |
Long-Term Incentive Program
The table below shows the long-term incentive award values granted in fiscal year 2023 for each of the NEOs:
Long-Term Incentive Program
| Named Executive Officer | Time-Based Restricted Stock (1) | Cash Performance Award (2) | Total Value | | Mark P. Marron | $2,199,967 | $275,000 | $2,474,967 | | Elaine D. Marion | $1,349,994 | $150,000 | $1,499,994 | | Darren S. Raiguel | $1,349,994 | $150,000 | $1,499,994 |
Long-Term Incentive Program
| (1) Award amounts for Time-Based Restricted Stock were determined based on the closing price of our common stock on the date of grant on June 8, 2022. |
Long-Term Incentive Program
| (2) Amounts shown are the target amounts. The threshold and escalators for each performance goal are as follows: |
Long-Term Incentive Program
| Amount of Goal Achieved | Award Amount | | Less than 75% of Goal Target | No award relating to that target | | Between 75% - 100% of Goal Target | Award shall be 50% of target, plus an additional 2.0% for each percentage point over 75% of Goal Target achieved | | 100% of Goal Target | 100% of target for that Goal | | More than 100% of Goal Target | 100% of target for that Goal, plus an additional 5.0% for each percentage point over 100% of Goal Target achieved | | Total Maximum Award for all goals combined | 150% of Target |
Long-Term Incentive Program
Our Compensation Committee granted long-term cash performance awards in fiscal year 2021 that pay out based on a specific pre-established performance goal. Performance was measured over the three-fiscal-year performance period ending March 31, 2023. At the conclusion of the fiscal year ended March 31, 2023, the Compensation Committee determined which of the financial objectives described under the long-term cash performance award agreements for the performance period of April 1, 2020, through March 31, 2023, were achieved. There were no waivers or modifications to any specified performance targets, goals, or conditions with respect to the award agreements. The achievement of the financial performance goals is set forth below.
Long-Term Incentive Program
| Performance Criteria (Dollars in thousands) | Goal | Achievement (1) | Amount of Goal Achieved | | Increase in operating income from April 1, 2020, to March 31, 2023 | $101,711 | $159,414 | 156.7% |
Long-Term Incentive Program
| (1) Performance Criteria were adjusted to exclude income and expenses related to our July 2022 acquisition of assets of Future Com, Ltd. and our December 2020 acquisition of assets of Systems Management Planning, Inc. |
Long-Term Incentive Program
The following table details the payments earned during the three-fiscal-year period ended March 31, 2023, (but paid in the subsequent fiscal year) for each NEO:
Long-Term Incentive Program
| Named Executive Officer | Long-Term Cash Payment Earned Performance Period April 1, 2020 to March 31, 2023 | | Mark P. Marron | $300,000 | | Elaine D. Marion | $150,000 | | Darren S. Raiguel | $150,000 |
Long-Term Incentive Program
More information about the long-term incentive awards granted to each NEO in fiscal year 2023 are set forth in “Grants of Plan-Based Awards.”
Severance and Change in Control Provisions
Severance and Change in Control Provisions Severance and change in control provisions are designed to facilitate our ability to attract and retain executives as we compete for talented employees in a marketplace where such protections are frequently offered. Severance benefits are designed to provide benefits to ease an executive’s transition following an employment termination by the Company due to changes in our employment needs. Additionally, severance agreements increase the enforceability of non-competition provisions to which all of our executives are contractually bound. Change in control benefits are intended to encourage executives to remain focused on the Company’s business in the event of rumored or actual fundamental corporate changes. Both severance and change in control benefits are often an important part of an executive’s compensation package. See further details under the section entitled “Employment Agreements, Severance and Change in Control Provisions.”
Tax and Accounting Considerations
Tax and Accounting Considerations Deductibility of Executive Compensation When designing compensation plans, the Compensation Committee takes into consideration any changes to IRC Section 162(m), as applicable. The Company believes that tax deductibility of compensation is an important factor, but not the sole factor, to be considered in setting executive compensation policy, and the Compensation Committee has authorized payments that are not deductible for federal income tax purposes when it believes that such payments are appropriate to attract, retain, and incentivize executive talent. Our executive employment agreements also provide that, if a severance payment is subject to the excise tax provided in IRC Section 280G, the executive will receive a lesser payment if he or she would receive a greater after-tax benefit, which will better enable the Company to obtain a tax deduction. Accounting Considerations Accounting considerations also play a role in the design of our executive compensation programs and policies. Codification Topic Compensation—Stock Compensation requires us to expense the cost of stock-based compensation awards. We consider the relative impact of the expense, in addition to other factors such as shareholder dilution, retentive impact, motivational impact, and the overall competitiveness of compensation packages when selecting long-term equity incentive instruments.
Role of the Chief Executive Officer
Role of the Chief Executive Officer Our CEO, Mr. Marron, is responsible for the implementation and administration of our executive compensation program during the fiscal year. Mr. Marron recommended the overall structure for our executive compensation program, including base salary, metrics for the 2018 CIP award agreements for fiscal year 2023, metrics for the long-term cash awards made pursuant to our 2021 Employee LTIP, and the amount and vesting schedule of equity awards to be granted. The final decisions regarding executive compensation were, however, made by the Compensation Committee. Additionally, the CEO is not present during any deliberations or voting regarding his own compensation.
Guidance from the Compensation Committee’s Independent Compensation Consultant
Guidance from the Compensation Committee’s Independent Compensation Consultant An independent compensation consultant, Pay Governance LLC (the “Compensation Consultant”), was retained by the Compensation Committee in February 2023. The Compensation Committee reviewed the independence of the Compensation Consultant under Nasdaq and SEC rules, and concluded that the work of the Compensation Consultant has not raised any conflict of interest. The Compensation Consultant is engaged directly by the Compensation Committee. The Compensation Consultant assisted the Compensation Committee with developing a publicly traded peer group for benchmarking executive pay levels and design, reviewing incentive plan design practices and recommending changes to incentive plans, and analyzing target compensation levels for executive officers relative to peer group companies and relevant published survey sources. Prior to retaining Pay Governance LLC in February 2023, the Company had not retained a Compensation Consultant since its retention of Pearl Meyer + Partners, LLC in the spring of 2021, which relied on its 2019 market analysis. The Compensation Committee approves the compensation for the NEOs based on its own evaluation, input from our CEO, internal pay equity considerations, the tenure, role, and performance of each NEO, as well as input from the compensation consultant and market data. The CEO is not present during any deliberations or voting regarding his own compensation.
Comparison Peer Groups
Comparison Peer Groups The Compensation Committee periodically reviews the compensation practices of peer companies as part of its decision-making process so it can set total compensation levels that it believes are reasonably competitive. In March 2023, the Compensation Committee, with the assistance of the Compensation Consultant, determined a new peer group (as the prior peer group dated back to 2019). In selecting the peer group, the Compensation Committee considered potential peers’ primary industry, total review, market capitalization, gross margin, operating income margin, number of employees, and cumulative Total Shareholder Return (“TSR”) on a 1-year, 3-year and 5-year basis. The Compensation Committee also considered the pay practices of two additional companies from a design standpoint only.
Comparison Peer Groups
| Peer Group | | | | CACI International Inc. | EPAM Systems, Inc. | ASGN Incorporated | | Amdocs Limited** | ScanSource, Inc. | PC Connection, Inc. | | Pure Storage, Inc. | Unisys Corporation* | Itron, Inc. | | ICF International, Inc.* | Thoughtworks Holding, Inc. | CSG Systems Internationals, Inc.* | | Perficient, Inc.* | StarTek, Inc.* | Climb Global Solutions, Inc. |
Comparison Peer Groups
| * Only these five companies provided compensation information for the COO role. |
Comparison Peer Groups
| ** Amdocs Limited did not publicly disclose its executive compensation program, and therefore was not included in the analysis. |
Comparison Peer Groups
The Compensation Consultant also provided a secondary market reference, Mercer’s 2022 U.S. Executive Benchmark Database, which was size-adjusted using regression data to approximate ePlus’ then-current revenue of $1.8 billion. The Compensation Committee considered this broad range of data to ascertain where the compensation for our executive officers is positioned with respect to the median to properly reflect various factors, such as our Company’s performance, the unique characteristics of each executive’s position, and applicable retention considerations. The Compensation Committee does not set compensation components to meet specific benchmarks, such as targeting salaries “above the median” or equity compensation at a particular percentile.
2023 Summary Compensation Table
2023 Summary Compensation Table
2023 Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary | Stock Awards (1) | Non-Equity Incentive Plan Compensation (2) | All Other Compensation (3) | Total | | Mark P. Marron – President and Chief Executive Officer | 2023 | $916,500 | $2,199,967 | $1,283,627 | $22,131 | $4,422,225 | | | 2022 | $846,154 | $1,999,964 | $2,050,000 | $4,000 | $4,900,118 | | | 2021 | $800,000 | $1,799,979 | $1,236,267 | $3,700 | $3,839,946 | | Elaine D. Marion – Chief Financial Officer | 2023 | $495,750 | $1,349,994 | $681,690 | $51,452 | $2,578,886 | | | 2022 | $465,385 | $1,199,923 | $1,100,000 | $4,000 | $2,769,308 | | | 2021 | $450,000 | $1,049,958 | $618,133 | $3,700 | $2,121,791 | | Darren S. Raiguel – Chief Operating Officer | 2023 | $495,750 | $1,349,994 | $681,690 | $58,096 | $2,585,530 | | | 2022 | $465,385 | $1,199,923 | $1,100,000 | $4,000 | $2,769,308 | | | 2021 | $450,000 | $1,049,958 | $618,133 | $3,700 | $2,121,791 |
2023 Summary Compensation Table
| (1) The values in this column represent the aggregate grant date fair values of restricted stock awards granted in the respective fiscal year, computed in accordance with Codification Topic Compensation—Stock Compensation. Assumptions used in calculating these values may be found in Note 13 of our financial statements in our 2023 Form 10-K. Each of these amounts reflect our expected aggregate accounting expense for these awards as of the grant date and do not necessarily correspond to the actual values that will be expensed by us or realized by the NEOs. |
2023 Summary Compensation Table
| (2) These amounts reflect cash payments under our 2018 CIP, which were earned during the fiscal year identified, as disclosed in Annual Cash Incentive Awards above in the last table under the “FY 2023 Annual Incentive Cash Payment Earned” column, for the fiscal years ended March 31, 2023, and 2022. For the fiscal years ended March 31, 2023 and 2022, the amount also includes cash payments earned under our 2012 Employee LTIP, which were earned over a three-year performance period, as disclosed in Long-Term Incentive Program above in the last table under the “Long-Term Cash Payment Earned Performance Period April 1, 2020, to March 31, 2023” column. Both the annual cash award and the long-term cash award payments were received after the conclusion of the fiscal year in which they were earned. A detailed description of the fiscal year 2023 payments can be found in the CD&A. |
2023 Summary Compensation Table
| (3) The “All Other Compensation” includes imputed income relating to group life insurance, and a company match to our 401(k) plan, both of which are available to all employees on the same terms, as well as a gross-up of costs relating to their and their families’ attendance at the Company’s sales meeting for high-perfomers, which was available for all attendees at the meeting. In addition, “All Other Compensation” includes professional coaching services provided to Mr. Raiguel (with a value of $34,635) and to Ms. Marion (with a value of $34,000). All of our NEOs are entitled to an annual executive physical. For health privacy reasons, each NEO has been attributed a cost of $3,750, regardless of whether such benefit was used. |
2023 Summary Compensation Table
From time to time, Mr. Raiguel attends events hosted by our vendor business partners. On one such trip, the vendor partner paid the expenses for Mr. Raiguel’s spouse to accompany him, with no related expense to the Company, and therefore no related amount is included in “All Other Compensation.”
2023 Summary Compensation Table
| 2022 Grants of Plan-Based Awards Table |
2023 Summary Compensation Table
The following table provides information regarding the grants of plan-based awards during fiscal year 2023 under the 2018 CIP and the Company’s 2021 Employee LTIP.
2023 Summary Compensation Table
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of | All Other Option Awards: Number of Securities | Exercise or Base Price of | Grant Date Fair Value of Stock | | Name | Grant Date | Threshold | Target | Maximum | Stock or Units (#)(3) | Underlying Options (#) | Option Awards ($/Sh) | and Option Awards (4) | | Mark P. Marron | 6/8/2022 | | | | 37,587 | - | - | $2,199,967 | | (1) | 6/6/2022 | $92,500 | $925,000 | $1,850,000 | | | | | | (2) | 6/6/2022 | $68,750 | $275,000 | $412,500 | | | | | | Elaine D. Marion | 6/8/2022 | | | | 23,065 | - | - | $1,349,994 | | (1) | 6/6/2022 | $50,000 | $500,000 | $1,000,000 | | | | | | (2) | 6/6/2022 | $37,500 | $150,000 | $225,000 | | | | | | Darren S. Raiguel | 6/8/2022 | | | | 23,065 | - | - | $1,349,994 | | (1) | 6/6/2022 | $50,000 | $500,000 | $1,000,000 | | | | | | (2) | 6/6/2022 | $37,500 | $150,000 | $225,000 | | | | |
2023 Summary Compensation Table
| (1) These amounts reflect award opportunities under the 2018 CIP and are described more fully in the CD&A under the heading “Annual Cash Incentive Awards” and subheading “Cash Incentive Awards for Fiscal Year 2023.” Threshold amounts represent minimal level of achievement of the lowest weighted financial performance metric, and maximum amounts represent 200% of target values. Actual payments with respect to the awards for fiscal year 2022 (and paid in fiscal year 2023) are disclosed in the Non-Equity Incentive Plan Compensation column of the 2023 Summary Compensation Table. |
2023 Summary Compensation Table
| (2) These amounts reflect non-equity award opportunities under our 2021 Employee LTIP and are more fully described in this CD&A under the heading “Long-Term Incentive Program.” Threshold amounts represent minimal level of achievement of the lowest weighted financial performance metric, and maximum amounts represent 150% of target values. These awards are earned on the third anniversary of the grant date to the extent the Company achieves a performance goal relating to growth in operating income. |
2023 Summary Compensation Table
| (3) These amounts represent the number of shares of restricted stock granted to the NEOs under our 2021 Employee LTIP. Equity awards granted to the executive officers and reflected in the 2023 Grants of Plan-Based Awards Table vest equally over a three-year period and may be accelerated in limited circumstances as set forth in the 2021 Employee LTIP, award agreements, and/or employment agreements. |
2023 Summary Compensation Table
| (4) These amounts reflect the grant date fair value of the restricted stock granted in fiscal year 2023. This represents the aggregate amount that we expect to expense for such grants in accordance with Codification Topic Compensation—Stock Compensation over the grants’ respective service period. These amounts do not necessarily correspond to the actual values that will be expensed by us or realized by the NEOs. Assumptions used in calculating these values with respect to restricted stock awards may be found in Note 13 of our 2023 Annual Report. |
Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table provides information concerning the outstanding equity-based awards for our NEOs as of March 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year End
| | Stock Awards | | | | Number of Shares or Units of Stock That Have | Market Value of Shares or Units of Stock That Have | | Name | Not Vested (1) | Not Vested (2) | | Mark P. Marron | 83,211 | $4,080,667 | | Elaine D. Marion | 50,159 | $2,459,797 | | Darren S. Raiguel | 50,159 | $2,459,797 |
Outstanding Equity Awards at 2023 Fiscal Year End
| (1) The following table shows the dates on which the outstanding stock awards as of March 31, 2023, will vest, subject to continued employment through the vest date, or acceleration in limited circumstances as set forth in the 2021 Employee LTIP, award agreements, and/or employment agreements. |
Outstanding Equity Awards at 2023 Fiscal Year End
| Vest Date | Mark P. Marron | Elaine D. Marion | Darren S. Raiguel | | 6/8/23 | 12,529 | 7,688 | 7,688 | | 6/15/23 | 14,468 | 8,680 | 8,680 | | 6/16/23 | 16,688 | 9,734 | 9,734 | | 6/8/24 | 12,529 | 7,688 | 7,688 | | 6/15/24 | 14,468 | 8,680 | 8,680 | | 6/8/25 | 12,529 | 7,689 | 7,689 |
Outstanding Equity Awards at 2023 Fiscal Year End
| (2) We calculated market value by multiplying the closing price of our common stock ($49.04) on the last business day of our fiscal year, March 31, 2023, by the number of shares in the first column. |
Fiscal Year 2023 Options Exercised and Stock Vested
Fiscal Year 2023 Options Exercised and Stock Vested The following table sets forth information with respect to the shares of Company common stock acquired by our NEOs through vesting of restricted stock during our 2023 fiscal year. There were no stock options outstanding during fiscal year 2023.
Fiscal Year 2023 Options Exercised and Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (1) | | Mark P. Marron | 47,268 | $2,672,095 | | Elaine D. Marion | 27,622 | $1,561,113 | | Darren S. Raiguel | 27,622 | $1,561,113 |
Fiscal Year 2023 Options Exercised and Stock Vested
| (1) Market value was computed by multiplying the closing price of our common stock on the day of vesting by the number of shares acquired. Additionally, the restricted shares were net-share settled such that the Company withheld shares with value equivalent to the NEOs’ minimum statutory tax obligation for the applicable income and other employment taxes, and remitted cash to the appropriate taxing authorities. The amounts in the table represent the gross number of shares and value realized on vesting for each of the NEOs. The net number of shares acquired were as follows: Mr. Marron, 28,579; Ms. Marion, 17,825; and Mr. Raiguel, 17,825. |
Mark P. Marron
Mark P. Marron Chief Executive Officer
Mark P. Marron
| • | Mr. Marron’s currently effective agreement was amended and restated on December 12, 2017, and thereafter amended. Pursuant to such agreement (and the Compensation Committee’s and Board’s discretion to raise base salary), Mr. Marron’s current base salary is $925,000. |
Mark P. Marron
| • | Mr. Marron’s agreement had an initial termination date of January 31, 2018; however, the agreement contains automatic two-year successive renewal periods unless either party terminates the agreement 60 days prior to the end of the then-current term. As no notice of termination was provided, the expiration date of his agreement is now January 31, 2024. |
Mark P. Marron
| • | In the event of disability, termination without cause, or termination for good reason (all as defined in the agreement), Mr. Marron is entitled to eighteen months of his base salary, in addition to a pro-rated payment under our 2018 CIP, to the extent that the Performance Goals have been met, with the payment to be made after the end of the fiscal year at the time the payment would have been made had there been no termination. Additionally, the Company would also pay Mr. Marron an amount in cash equal to the cost of premiums the Company paid prior to the date of termination for Mr. Marron and his dependents’ qualified coverage under the Company’s medical, prescription, dental, and other health benefits, for eighteen months. |
Mark P. Marron
| • | In the event of termination without cause, or by Mr. Marron for good reason, he is also entitled to either, at the Company’s election, the acceleration of unvested restricted stock, or cash in an amount equal to the value of the stock on the date of termination. |
Mark P. Marron
The table below summarizes the potential payments and benefits to Mr. Marron upon the occurrence of certain triggering events. The table assumes a hypothetical effective date of termination of March 31, 2023. The table does not include accrued, unused vacation time, which is paid to all employees upon termination of employment, pursuant to ePlus’ policies.
Mark P. Marron
| Triggering Event | Cash Severance (4) | Cash Incentive | Cash Long-Term Incentive Award (5) | Equity-Based Compensation Awards (6) | Total | | Termination Without Cause, or for Good Reason (1) | $1,432,509 | $983,627 | $712,500 | $4,080,667 | $7,209,303 | | Change in Control (2) | $- | $- | $- | $4,080,667 | $4,080,667 | | Disability (3) | $1,432,509 | $983,627 | $712,500 | $4,080,667 | $7,209,303 | | Death | $- | $- | $712,500 | $4,080,667 | $4,793,167 |
Mark P. Marron
| (1) “Termination Without Cause” and termination “for Good Reason” are defined terms in Mr. Marron’s employment agreement. |
Mark P. Marron
| (2) This row assumes no termination accompanies the change in control. In the event of a termination in connection with the change in control, without Cause or for Good Reason (as defined in Mr. Marron’s employment agreement), see “Termination Without Cause, or for Good Reason” above. |
Mark P. Marron
| (3) In the event of disability, Termination without Cause or by Mr. Marron for Good Reason, all as defined in Mr. Marron’s employment agreement, Mr. Marron is entitled to a pro-rated amount of the payment under our 2018 CIP, to the extent that the Performance Goals have been met, with the payment to be made after the end of the fiscal year at the time the payment would have been made had there been no termination. The above table reflects the amount earned during the fiscal year ended March 31, 2023, and paid in the following fiscal year. |
Mark P. Marron
| (4) As provided in Mr. Marron’s employment agreement, this column includes an amount equal to the cost of premiums paid prior to the date of termination for Mr. Marron and his dependents’ qualified coverage under the Company’s medical, prescription, dental, and other health benefits for eighteen months, which amount would be paid in cash as opposed to providing continued coverage. |
Mark P. Marron
| (5) Mr. Marron has Cash Long-Term Incentive Awards with a three-year performance period, consistent with our fiscal year. The above table reflects the amount actually earned for the Incentive Award for which the performance period ended on March 31, 2023. The award agreements for the performance period ending March 31, 2024 and March 31, 2025 provide that, in the event Mr. Marron’s employment is terminated due to death or disability as defined in the applicable Employee Long-Term Incentive Plan, or termination without cause or for good reason as defined in any applicable employment agreement, the Company shall pay to Mr. Marron a pro-rated amount based on achievement of targets modified in the agreements. |
Mark P. Marron
| (6) Pursuant to the 2021 Employee LTIP, and our standard restricted stock award agreements, upon death or a change in control, as defined by the 2021 Employee LTIP, all unvested stock for all employees will vest. The value of the equity-based compensation awards for all termination tables herein is calculated using the closing price of our common stock ($49.04) on the last business day of our fiscal year, March 31, 2023. |
2023 Pay Ratio Disclosure
2023 Pay Ratio Disclosure Pursuant to Item 402(u) of Regulation S-K, the Company is required to provide annual disclosure of the ratio of the median of the total annual compensation of all employees of the Company (other than Mr. Marron, the Company’s CEO) to the total annual compensation of the principal executive officer, which for ePlus is our CEO, Mr. Marron. The purpose of the required disclosure is to provide a measure of the equitability of pay within the Company. ePlus believes its compensation philosophy and process yield an equitable result. The below table shows our median employee annual compensation and the total compensation of Mr. Marron as reflected in the Summary Compensation Table, as well as the ratio of the two pay levels. This pay ratio is a reasonable estimate, calculated in a manner consistent with the applicable SEC requirements.
2023 Pay Ratio Disclosure
| Median Employee Total Annual Compensation | Mr. Marron’s Total Annual Compensation | Pay Ratio | | $120,758 | $4,422,225 | 36.6 to 1 |
2023 Pay Ratio Disclosure
In determining our median employee, we considered the full annual compensation of all individuals who were employed throughout the entire 2022 calendar year, and annualized compensation for employees who joined ePlus during 2022, with the following adjustments. Our employee population on December 31, 2022, after taking into consideration the adjustments permitted by SEC rules and described below, consisted of approximately 1,746 individuals. We did not include our 54 non-U.S.-based employees in the calculation, which was less than 5% of our total workforce, and consists of 23 employees in the United Kingdom, 29 employees in India, and two employees in Singapore. We selected our median employee from the list of the remaining employees. To identify our median employee, we calculated compensation as the sum of (i) base salary, (ii) commissions, if any, and (iii) equity that vested during the year, if any. Mr. Marron’s compensation was calculated using the same methodology that the Company used to calculate the CEO’s annual total compensation for the 2023 Summary Compensation Table described above. Once we identified our median employee, we calculated his or her fiscal year 2023 annual total compensation under the Summary Compensation Table rules in a manner that is consistent with the calculation of our CEO’s compensation, without any adjustments or estimates. The SEC requirements for identifying our median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio we report may not be comparable to the pay ratio other companies report.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of Dodd-Frank, and Item 402(v) of Regulation S-K, we are providing the following information reflecting the relationship between executive compensation actually paid by the Company and the Company’s financial performance for each of the last three completed calendar years. In determining the compensation “actually paid” to our NEOs, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the “Compensation Discussion and Analysis” provided elsewhere in this proxy statement. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the fiscal years shown. The table below summarizes compensation values both reported in our 2023 Summary Compensation Table, as well as the adjusted values required in this section for the 2021, 2022 and 2023 fiscal years.
Pay Versus Performance
| Fiscal | Summary Compensation Table Total to | Compensation Actually Paid to | Average Summary Compensation Table Total for | Average Compensation Actually Paid to | Value of Initial Fixed $100 Investment Based On: | | Net Income | Operating Income | | Year | PEO | PEO | Non-PEO NEOs | Non-PEO NEOs | Company TSR | Peer Group TSR | ($ thousands) | ($ thousands) | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | 2023 | $4,422,225 | $3,767,495 | $2,582,208 | $2,185,745 | $156.63 | $187.37 | $119,356 | $166,162 | | 2022 | $4,900,118 | $5,466,517 | $2,769,308 | $3,119,485 | $179.05 | $197.49 | $105,600 | $147,316 | | 2021 | $3,839,946 | $5,480,397 | $2,121,791 | $3,072,398 | $159.12 | $192.68 | $74,397 | $106,335 |
Pay Versus Performance
| (a) Reflects compensation amounts reported in the “2023 Summary Compensation Table” for our President and Chief Executive Officer, Mr. Marron. |
Pay Versus Performance
| (b) Compensation actually paid to our President and Chief Executive Officer for each period presented, as computed in accordance with SEC rules, does not reflect the actual amount of compensation earned or received during the applicable fiscal year. In accordance with SEC rules, these amounts differ from the total compensation reported in the “2023 Summary Compensation Table” for each fiscal year as shown below. The fair value of equity awards was determined using methodologies and assumption developed in a manner substantively consistent with those used to determine the grant date fair value of such awards in accordance with Codification Topic Compensation – Stock Compensation. |
Pay Versus Performance
| | | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Summary Compensation Table Total | | $4,422,225 | $4,900,118 | $3,839,946 | | - | Grant Date Fair Value of Stock Awards Granted in Fiscal Year | $(2,199,967) | $(1,999,964) | $(1,799,979) | | + | Fair Value at Fiscal Year-End of Outstanding Unvested Stock Awards Granted in Fiscal Year | $1,843,266 | $2,433,116 | $2,494,089 | | ± | Change in Fair Value of Outstanding Unvested Stock Awards Granted in Prior Fiscal Years | $(320,280) | $308,818 | $815,477 | | ± | Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $- | $- | $- | | ± | Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $22,251 | $(175,571) | $130,865 | | - | Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $- | $- | $- | | + | Dividends Accrued During Fiscal Year | $- | $- | $- | | Compensation Actually Paid | | $3,767,495 | $5,466,517 | $5,480,397 |
Pay Versus Performance
| (c) Reflects the average compensation amounts reported in the “2023 Summary Compensation Table” for our NEOs (excluding the President and Chief Executive Officer), which included the Chief Financial Officer, Ms. Marion, and the Chief Operating Officer, Mr. Raiguel, in each year presented. |
Pay Versus Performance
| (d) Average compensation actually paid to our NEOs (excluding the President and Chief Executive Officer) for each period presented, as computed in accordance with SEC rules, does not reflect the actual amount of compensation earned or received during the applicable fiscal year. In accordance with SEC rules, these amounts differ from the average total compensation reported in the “2023 Summary Compensation Table” for each fiscal year as shown below. The fair value of equity awards was determined using methodologies and assumptions developed in a manner substantively consistent with those used to determine the grant date fair value of such awards in accordance with Codification Topic Compensation – Stock Compensation. |
Pay Versus Performance
| | | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Summary Compensation Table Total | | $2,582,208 | $2,769,308 | $2,121,791 | | - | Grant Date Fair Value of Stock Awards Granted in Fiscal Year | $(1,349,994) | $(1,199,923) | $(1,049,958) | | + | Fair Value at Fiscal Year-End of Outstanding Unvested Stock Awards Granted in Fiscal Year | $1,131,108 | $1,459,802 | $1,454,844 | | ± | Change in Fair Value of Outstanding Unvested Stock Awards Granted in Prior Fiscal Years | $(190,200) | $178,938 | $479,714 | | ± | Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $- | $- | $- | | ± | Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $12,624 | $(88,640) | $66,007 | | - | Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $- | $- | $- | | + | Dividends Accrued During Fiscal Year | $- | $- | $- | | Compensation Actually Paid | | $2,185,745 | $3,119,485 | $3,072,398 |
Pay Versus Performance
| (e) Reflects the total shareholder return (“TSR”) of a $100 investment in ePlus’ common stock. Cumulative TSR is calculated by dividing (a) the sum of (i) the cumulative amount of any dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s stock price at the end and the beginning of the measurement period by (b) the Company’s stock price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is April 1, 2020. Historical stock performance is not necessarily indicative of future stock performance. |
Pay Versus Performance
| (f) Reflects the TSR of a $100 investment in the S&P 600 Small Cap Information Technology Group, which is used in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the applicable fiscal year. Historical stock performance is not necessarily indicative of future stock performance. |
Pay Versus Performance
| (g) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year. |
Pay Versus Performance
| (h) The “Company-Selected Measure” (as defined in Item 402(v) of Regulation S-K) is our operating income reflected in the Company’s audited financial statements for the applicable fiscal year. |
Pay Versus Performance Relationship Descriptions
Pay Versus Performance Relationship Descriptions The charts below illustrate the relationship between the PEO and average Non-PEO Compensation Actually Paid (“CAP”) amounts and the S&P 600 Small Cap Information Technology Group (our “TSR Peer Group”)’s TSR during the periods ended March 31, 2021, 2022 and 2023. The chart below demonstrates the relationship between CAP amounts for our PEO and non-PEO executive officers and our net income. The chart below demonstrates the relationship between CAP amounts for our PEO and non-PEO executive officers and our operating income.