DEF 14A of H&R Block Inc
Filed Sep 25, 2024 · FY20240001140361-24-041890
SELECTING AND EVALUATING OUR NOMINEES
SELECTING AND EVALUATING OUR NOMINEES When evaluating potential director nominees, the G&N Committee considers each individual’s professional experience, areas of expertise, and educational and personal backgrounds. The Board determines the appropriate mix of experiences, areas of expertise, and educational backgrounds in order to maintain a Board that is strong in its collective knowledge and that has the skillsets necessary to fulfill its responsibilities, meet the future needs of the Company, and represent the interests of our shareholders. Among the most important specific skills, knowledge, and experience that the G&N Committee and Board rely upon when determining whether to nominate an individual for election are the following:
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | Operating experience as current or former executives, which gives directors specific insight into, and expertise that will foster active participation in, the development and implementation of our operating plan and business strategy; |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | Executive leadership experience, which gives directors who have served in significant leadership positions strong abilities to motivate and manage others and to identify and develop leadership qualities in others; |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | Accounting or financial expertise, which enables directors to analyze our financial statements, capital structure, and complex financial transactions, and oversee our accounting and financial reporting processes; |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | ERM experience, which contributes to oversight of management’s risk monitoring and risk management programs, and establishment of risk appetite aligned with our strategy; |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | Financial, technology, or retail industry knowledge, which are vital in understanding and reviewing our strategy, including the acquisition of businesses that offer complementary products or services; |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | Public company board and corporate governance experience, which provides directors a solid understanding of their extensive and complex oversight responsibilities and furthers our goals of greater transparency, accountability for management and the Board, and protection of our shareholders’ interests; |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | Data security experience, which is valuable in understanding data security risks and contributes to oversight of our data security programs, policies, and procedures; and |
SELECTING AND EVALUATING OUR NOMINEES
| ▪ | ESG expertise, which enables directors to analyze ESG risk and oversee our ESG strategy and initiatives. |
SELECTING AND EVALUATING OUR NOMINEES
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 6 |
SUMMARY OF DIRECTOR NOMINEES’ SKILLS AND EXPERIENCE
SUMMARY OF DIRECTOR NOMINEES’ SKILLS AND EXPERIENCE
SUMMARY OF DIRECTOR NOMINEES’ SKILLS AND EXPERIENCE
| | Cohan | Gerard | Gupta | Johnson | Jones | Mends | Reich | Winter | | Skills and Experience | | | | | | | | | | Operating experience | • | • | • | • | • | • | • | • | | Executive leadership | • | • | • | • | • | • | • | • | | Accounting/financial expertise | • | • | • | • | • | • | • | • | | ERM experience | | • | | • | • | | • | • | | Industry knowledge | | • | • | • | • | • | | • | | Public company board and corporate governance | • | • | | • | • | • | • | • | | Data security experience | | | • | • | • | | | • | | ESG expertise | • | • | | • | • | • | • | | | Demographic Information | | | | | | | | | | Tenure (years)* | 3 | 17 | 5 | 9 | 7 | 3 | 13 | 7 | | Age* | 49 | 79 | 55 | 66 | 56 | 49 | 66 | 67 | | Gender | M | M | F | M | M | F | F | M | | Race/Ethnicity | | | | | | | | | | Black/African American | • | | | | | • | | | | Asian/Other Pacific Islander | | | • | | | | | | | White/Caucasian | | • | | • | • | | • | • |
SUMMARY OF DIRECTOR NOMINEES’ SKILLS AND EXPERIENCE
| * Tenure and age calculated as of the date of this proxy statement; tenure rounded to the nearest whole number of years. |
SUMMARY OF DIRECTOR NOMINEES’ SKILLS AND EXPERIENCE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 7 |
DIRECTOR NOMINEES
DIRECTOR NOMINEES The Board believes that all the director nominees are highly qualified and have significant leadership experience, knowledge, and skills that qualify them for service on our Board, and, as a group, represent diverse views, experiences, and backgrounds. All director nominees satisfy the criteria set forth in our Corporate Governance Guidelines and possess the personal characteristics that are essential for the proper and effective functioning of the Board. Each nominee’s biography below contains additional information regarding the nominee’s experiences, qualifications, and skills. The number of shares of common stock, share units, and share equivalents beneficially owned by each nominee for director is listed under the heading “Security Ownership of Directors and Management” on page 56.
DIRECTOR NOMINEES
| Sean H. Cohan Director Since: 2021 Age: 49 Committee Memberships: Compensation; G&N | Experience: Mr. Cohan serves as President of Bell Media Inc., the mass media subsidiary of BCE Inc., a publicly traded Canadian communications company, and he is a member of the BCE Inc. leadership team. Prior to his current position, Mr. Cohan served as Chief Growth Officer and President, International of Nielsen Holdings plc, a global media measurement and data analytics company, from March 2020 to January 2023, leaving following a successful $16 billion take-private transaction. Mr. Cohan has decades of experience in global media and consumer businesses, including 15 years at A+E Networks where he served as President, International and Digital Media from 2015 to 2018. Following his tenure at A+E, Mr. Cohan was President and Chief Business Officer at Wheelhouse Group, LLC, a diversified content venture, from 2019 to early 2020. He has a Bachelor’s Degree in Economics from Harvard and a Masters from the Stanford Graduate School of Business. | | | Other Boards and Appointments: Mr. Cohan sits on the Board of Directors/Trustees for the Parrish Art Museum (acting as Co-President), the Banff World Media Festival, and is former Treasurer and current Board Member of The Opportunity Network. Mr. Cohan is also a Board Director at FxM, a private fintech media company focused on payment processes and supply sourcing. | | | Director Qualifications: Mr. Cohan brings extensive strategic, financial, operational, and growth experience to the Board, along with a track record of successfully transforming businesses, brands, teams, relationships, and culture. |
DIRECTOR NOMINEES
| Robert A. Gerard Director Since: 2007 Age: 79 Committee Memberships: Finance (Chair); G&N | Experience: Mr. Gerard is the General Partner and investment manager of GFP, L.P., a private investment partnership. From 2004 to 2011, Mr. Gerard was Chairman of the Management Committee and CEO of Royal Street Communications, LLC, a licensee, developer, and operator of telecommunications networks in Los Angeles and Central Florida. From 1977 until his retirement in 1991, Mr. Gerard held senior executive positions with investment banking firms Morgan Stanley & Co., Dillon Read & Co., and Bear Stearns. From 1974 to 1977, Mr. Gerard served in the United States Department of the Treasury, completing his service as Assistant Secretary for Capital Markets and Debt Management. Mr. Gerard is a graduate of Harvard College and holds a Masters of Arts degree and a Juris Doctor degree from Columbia University. | | | Other Boards and Appointments: Mr. Gerard served as a director of Gleacher & Company, Inc. from 2009 through May 2013, where he most recently served as Chair of the Executive Compensation Committee and was a member of the Committee on Directors and Corporate Governance. | | | Director Qualifications: Mr. Gerard brings to the Board extensive experience in the financial services industry and many years of business experience in senior management and finance, as well as experience serving on the boards of other public companies. |
DIRECTOR NOMINEES
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 8 |
DIRECTOR NOMINEES
| Anuradha (Anu) Gupta Director Since: 2019 Age: 55 Committee Memberships: Compensation; G&N (Chair) | Experience: Ms. Gupta has served as Chief Business Development and Strategy Officer of Signet Jewelers Ltd. since September 2023. Previously, she served as Chief Revenue Officer of Better Home & Finance Holding Company, a digital-first homeownership company, until September 2023. She also served as Executive Vice President, Chief Growth Officer of Bed Bath & Beyond Inc., a publicly held home products retailer, from October 2021 until January 2023, where she previously served as the Chief Strategy and Transformation Officer starting in October 2020. Bed Bath & Beyond filed a voluntary petition for bankruptcy in April 2023. Prior to her work at Bed Bath & Beyond, she served as the Chief Operating Officer of Jyve Corporation, a talent marketplace and business optimization platform, from November 2018 to October 2020. Prior to Jyve, she served as Senior Vice President, Operational Excellence at Target Corporation, a retail sales company, from 2015 to 2018. From 2013 to 2015, Ms. Gupta was the Senior Operating Executive at Hellman & Friedman LLC, a private equity firm. Prior to that, she was with The Michaels Companies Inc. for five years from 2008 to 2013, serving as Vice President, Process and Profit Improvement. Earlier in her career, she served in multiple strategic roles at Safeway Inc. and HCL Technologies Inc. Ms. Gupta received her Bachelor of Science (Honors) and MBA (Financial Management) from the University of Delhi. | | | Other Boards and Appointments: None | | | Director Qualifications: Ms. Gupta brings to the Board expertise in strategic transformations and driving operational excellence across multiple industries, including extensive experience in the retail industry. |
DIRECTOR NOMINEES
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 9 |
DIRECTOR NOMINEES
| Richard A. Johnson Director Since: 2015 Age: 66 Committee Memberships: Audit; Compensation | Experience: Mr. Johnson retired as CEO and President of Foot Locker, Inc., a leading publicly held global athletic footwear and apparel retailer, on September 1, 2022. He continued to serve as Executive Chairman of the Board of Foot Locker until January 2023. Mr. Johnson had served as CEO and President of Foot Looker since December 1, 2014, and as Chairman of the Board since May 2016. Prior to becoming CEO and President, he served in a variety of other leadership roles with Foot Locker, Inc. including Executive Vice President and Chief Operating Officer, Executive Vice President/Group President – Retail Stores, CEO and President of Foot Locker U. S./Lady Foot Locker/Kids Foot Locker/Footaction, CEO and President at Foot Locker Europe B.V., Foot Locker’s European headquarters in the Netherlands, President and CEO of Footlocker.com/Eastbay, and prior to that, held various executive positions at Eastbay, Inc. From 1990 to 1993, Mr. Johnson was a transportation economics manager at Graebel Van Lines, Inc. Earlier in his career, he worked for Electronic Data Systems, an IT services company, as a systems engineer. Mr. Johnson received a Bachelor of Arts degree in Business Administration and Accountancy from the University of Wisconsin, Eau Claire. | | | Other Boards and Appointments: Mr. Johnson served as director and member of the Executive Committee of Foot Locker, Inc. starting in 2014 and as Chairman of the Board from May 2016 until January 2023. During 2013, he served as a director of Maidenform Brands, Inc. Mr. Johnson also served as the Chairman of the board of directors of the Retail Industry Leaders Association and on the board of directors of The Footwear Distributors and Retailers of America from January 2022 to January 2023. Mr. Johnson currently serves on the Chancellor’s National Leadership Council at the University of Wisconsin, Eau Claire, and is a Save the Children Trustee representative on the Save the Children – Head Start Board. Mr. Johnson joined the Board of Graebel Companies, Inc., a private company and global leader in mobility services, in January 2024. | | | Director Qualifications: Mr. Johnson brings to the Board extensive knowledge of brick and mortar and digital/dot.com retail operations, as well as significant leadership, operations, financial management, and enterprise risk management experience. |
DIRECTOR NOMINEES
| Jeffrey J. Jones II, President and Chief Executive Officer Director Since: 2017 Age: 56 Committee Memberships: Finance | Experience: Mr. Jones has served as our President and CEO since October 2017, and, prior to serving as President and CEO, was President and CEO-Designate beginning August 2017. Before that, Mr. Jones served as President, Ride Sharing at Uber Technologies Inc., an on-demand car service company, from September 2016 until March 2017 and Executive Vice President and Chief Marketing Officer at Target Corporation, a retail sales company, from April 2012 to September 2016. Prior to his time at Target Corporation, Mr. Jones was Partner and President of McKinney Ventures LLC, an advertising agency, from March 2006 to March 2012. Mr. Jones holds a Bachelor of Arts degree in Communications from the University of Dayton. | | | Other Boards and Appointments: Mr. Jones serves on the board of directors of Advance Auto Parts, Inc. a publicly held auto parts retailer, where he chairs the Compensation Committee and is a member of the Nominating & Governance Committee. | | | Director Qualifications: Mr. Jones brings to the Board intimate knowledge of the Company’s daily operations as the Company’s President and CEO, an extensive background in marketing and the retail industry, and significant experience as a senior executive at various public companies. |
DIRECTOR NOMINEES
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 10 |
DIRECTOR NOMINEES
| Mia F. Mends Director Since: 2021 Age: 49 Committee Memberships: Audit; G&N | Experience: Ms. Mends serves as Chief Executive Officer, C&W Services at Cushman & Wakefield plc, a leading global real estate services firm. Prior to joining C&W Services, Ms. Mends spent a decade in senior leadership roles at Sodexo Inc., a global food services and facilities management company, including serving as Global Chief Diversity & Inclusion Officer and CEO, Impact Ventures from May 2021 to June 2022; Chief Administrative Officer, North America and leading SodexoMAGIC, a joint venture between Sodexo and Magic Johnson Enterprise, from July 2019 to May 2021; CEO of Benefits & Rewards Services from 2015 until 2019; and Vice President, Sales, for the Americas Region in Sao Paulo, Brazil from 2012 until 2015. Before joining Sodexo, she was General Manager of the Prepaid Debit Card Division of Noventis Inc. Ms. Mends holds a bachelor’s degree in economics from Wellesley College and an MBA from Harvard Business School. | | | Other Boards and Appointments: Ms. Mends serves on the board of EMERGE Fellows program and sits on the Business Leadership Council at Wellesley College and the Alumni Board of Harvard Business School. She also formerly served as a corporate director of SEP Acquisition Corp. and Limeade Inc. | | | Director Qualifications: Ms. Mends brings to the Board expertise in business transformation, strategy, and corporate social responsibility, as well as operational experience in the financial services space. |
DIRECTOR NOMINEES
| Victoria J. Reich Director Since: 2011 Age: 66 Committee Memberships: Audit (Chair); Finance | Experience: Ms. Reich served as the Senior Vice President and Chief Financial Officer of United Stationers Inc. (now known as Essendant, Inc.), a wholesale distributor of business products, from 2007 until 2011. Prior to that, Ms. Reich spent ten years with Brunswick Corporation, a manufacturer of recreational marine products, where she most recently was President of Brunswick European Group from 2003 until 2006. She served as Brunswick’s Senior Vice President and Chief Financial Officer from 2000 to 2003 and as Vice President and Controller from 1996 until 2000. Before joining Brunswick, Ms. Reich spent 17 years at General Electric Company where she held various financial management positions. Ms. Reich holds a Bachelor of Science degree in Applied Mathematics - Economics from Brown University. | | | Other Boards and Appointments: Ms. Reich is a director of Ecolab Inc., a publicly held provider of water, hygiene, and infection prevention solutions, where she is a member of the Audit Committee and the Governance Committee. She is also a director of Ingredion Incorporated, a publicly held ingredient provider, where she is Chairman of the Audit Committee. | | | Director Qualifications: Ms. Reich brings to the Board extensive financial management experience, operational experience, and executive leadership abilities. |
DIRECTOR NOMINEES
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 11 |
DIRECTOR NOMINEES
| Matthew E. Winter Director Since: 2017 Age: 67 Committee Memberships: Audit; Compensation (Chair) | Experience: Mr. Winter served as President, The Allstate Corporation, a publicly held personal lines insurer, from January 2015 until his retirement in February 2018. Prior to serving as President of The Allstate Corporation, he was President, Allstate Personal Lines of Allstate Insurance Company beginning in December 2013 and, prior thereto, he served The Allstate Corporation and Allstate Insurance Company in various executive capacities beginning in 2009. Before joining Allstate, Mr. Winter held numerous senior executive positions at large financial institutions and insurance providers. In addition, he spent more than 12 years on active duty with the United States Army and also practiced law for several years before joining the insurance industry. Mr. Winter earned his Bachelor of Science from the University of Michigan, his Juris Doctor degree from the Albany Law School of Union University, and a Master of Laws from the University of Virginia School of Law. He is also a graduate of Harvard Business School’s Advanced Management Program. | | | Other Board and Appointments: Mr. Winter is currently the Lead Independent Director of the board of ADT Inc., a publicly held provider of monitored security and interactive home and business automation solutions. Mr. Winter also serves on the board of The Hartford Financial Services Group, Inc., a publicly held investment and insurance company, The Winter-Lehman Family Foundation, and The Stockbridge Bowl Association. He also serves on the Board of Trustees of Volunteers in Medicine – Berkshires. Mr. Winter previously served on the boards of Feeding America, the Leukemia and Lymphoma Society, the Houston Food Bank, and both the Connecticut and Houston Opera Companies. | | | Director Qualifications: Mr. Winter brings to the Board extensive leadership experience developed throughout his career at Allstate and with other large financial institutions and insurance providers, as well as significant operations, consumer products, financial services, and enterprise risk management experience. In July 2023, Mr. Winter received the CERT Certificate in Cybersecurity Oversight from the Software Engineering Institute at Carnegie Mellon University. |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE EIGHT NOMINEES FOR DIRECTOR IN THIS PROPOSAL 1.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 12 |
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Board considers and determines non-employee director compensation each year, taking into account recommendations from the G&N Committee. The G&N Committee forms its recommendation regarding any proposed changes to non-employee director compensation based on its review of director compensation practices at a specific group of peer companies, based on publicly disclosed information (more discussion of the process for determining our peer group of companies can be found on pages 34 and 35). Management, in consultation with the Compensation Committee’s independent compensation consultant, assists the G&N Committee in its review by accumulating and summarizing market data on director compensation levels and practices at our peer group of companies and reviewing external survey sources. Compensation elements for our non-employee directors for fiscal year 2024 are as follows:
DIRECTOR COMPENSATION
| Compensation Element | | Amount (annual) | | Annual Cash Retainer(1) | | $85,000 | | Annual Equity Retainer(2) | | $190,000 (payable in DSUs) | | Non-Executive Chairman of the Board Retainer(2) | | $200,000 (payable in DSUs) | | Chair Retainer(1) | | | | ▪ | Audit Committee | $35,000 | | ▪ | Compensation Committee | $25,000 | | ▪ | G&N Committee | $20,000 | | ▪ | Finance Committee(3) | $15,000 | | Member Retainer(1) | | | | ▪ | Audit Committee | $15,000 | | ▪ | Compensation Committee | $10,000 | | ▪ | G&N Committee | $7,500 | | ▪ | Finance Committee | $5,000 | | Per Meeting Fee(4) | | $1,500 per meeting |
DIRECTOR COMPENSATION
| (1) Paid in quarterly installments. |
DIRECTOR COMPENSATION
| (2) Equity grants are generally made immediately following election of directors at the Annual Meeting. |
DIRECTOR COMPENSATION
| (3) Due to his position as non-executive Chairman of the Board, Mr. Gerard has waived the Finance Committee Chair retainer. |
DIRECTOR COMPENSATION
| (4) Payable if and only to the extent that total board meetings exceed ten meetings per fiscal year, or committee meetings exceed ten meetings per fiscal year per committee. |
DIRECTOR COMPENSATION
DSU awards are fully vested on the grant date. Vested DSUs are held in a deferred compensation account and become payable, in shares of common stock, on the six-month anniversary of termination of service as a director. However, if a non-employee director dies prior to the payment, the balance of the non-employee director’s DSU account becomes payable to the non-employee director’s beneficiary, in shares of common stock, within ninety days following the non-employee director’s death. There are no dividends paid on outstanding DSUs prior to the DSUs becoming payable, but dividend equivalents accumulate and are paid when the DSUs otherwise become payable. On November 3, 2023, DSUs approximately equal in value to $190,000 were granted to each of the Company’s incumbent non-employee directors for the period of service on the Board beginning November 3, 2023 and ending at the 2024 Annual Meeting on November 6, 2024. In addition, DSUs approximately equal in value to $200,000 were granted to Mr. Gerard for serving as the non-executive Chairman of the Board for the period of service beginning November 3, 2023 and ending at the 2024 Annual Meeting on November 6, 2024. The H&R Block, Inc. 2018 Long Term Incentive Plan (the “2018 Plan”), which was approved by our shareholders, limits the aggregate equity and cash compensation to $750,000 that can be paid to a non-employee director of the Company in a calendar year. The limit does not apply to incremental compensation paid to a director solely as non-executive Chairman of the Board, provided that such director does not participate in the decision to award that additional compensation. In setting the non-employee director compensation limit, the G&N Committee and the Board reviewed survey data provided by the Compensation Committee’s independent compensation consultant.
DIRECTOR COMPENSATION
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 15 |
DIRECTOR COMPENSATION
The Company provides to its non-employee directors free business travel insurance in connection with Company-related travel and, consistent with the benefit provided to our full-time employees, the opportunity to use our tax preparation services for no charge. In addition, the H&R Block Foundation will match gifts by our directors to any qualified not-for-profit organization on a dollar-for-dollar basis up to an annual aggregate limit of $5,000 per director per calendar year. The Board has adopted stock ownership guidelines applicable to non-employee directors. The non-employee director ownership guidelines require ownership of a level of qualifying equity securities with an aggregate value of at least five times the annual cash retainer paid to them. Until a non-employee director satisfies the applicable holding requirement, the director is required to retain any covered shares (which include shares owned directly or indirectly by such non-employee director, the after-tax value of vested stock option awards, if any, and share equivalents the non-employee director holds in the Company’s benefit plans). In addition, Board members are subject to our Insider Trading Policy which, among other things, prohibits hedging and pledging transactions related to Company securities.
DIRECTOR COMPENSATION TABLE
DIRECTOR COMPENSATION TABLE The following table sets forth total director compensation for non-employee directors for fiscal year 2024.
DIRECTOR COMPENSATION TABLE
| Current Directors | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($)(4) | All Other Compensation ($)(5) | Total ($) | | Sean H. Cohan | $102,500 | $193,767 | — | $5,000 | $301,267 | | Robert A. Gerard | $97,500 | $397,692 | — | $5,000 | $500,192 | | Anuradha (Anu) Gupta | $115,000 | $193,767 | — | — | $308,767 | | Richard A. Johnson | $110,000 | $193,767 | — | $5,000 | $308,767 | | Mia F. Mends | $107,500 | $193,767 | — | $5,000 | $306,267 | | Victoria J. Reich | $125,000 | $193,767 | — | $4,000 | $322,767 | | Matthew E. Winter | $125,000 | $193,767 | — | $5,000 | $323,767 | | Former Director | | | | | | | Yolande G. Piazza(6) | $100,000 | $193,767 | — | — | $293,767 |
DIRECTOR COMPENSATION TABLE
| (1) This column includes, as applicable, the annual cash Board retainer and committee chair and member retainers earned or paid for services as a director during fiscal year 2024. |
DIRECTOR COMPENSATION TABLE
| (2) The dollar amounts represent the grant date fair value under FASB Accounting Standards Codification Topic 718 “Stock Compensation” (“ASC 718”) for DSUs awarded during fiscal year 2024 to the non-employee director. The grant date fair value of an award is computed in accordance with ASC 718 utilizing assumptions discussed in Note 8: “Stock-Based Compensation” to the Company’s consolidated financial statements in the Form 10-K for the year ended June 30, 2024, as filed with the SEC. As of June 30, 2024, the following DSUs were outstanding: Mr. Cohan – 20,431; Mr. Gerard – 283,131; Ms. Gupta – 34,702; Mr. Johnson – 65,175; Ms. Mends – 20,431; Ms. Piazza – 28,571; Ms. Reich – 104,917; and Mr. Winter – 49,886. |
DIRECTOR COMPENSATION TABLE
| (3) The DSU award value approved by the Board of Directors for fiscal year 2024 was converted into the number of DSUs by dividing the dollar amount of the award by the average current market value per share of the Company’s common stock for the ten consecutive trading days ending on the date the DSUs were granted to the non-employee director. The current market value per share generally is the closing sales price of a share of our common stock as reported on the NYSE. However, the grant date fair value of an award computed in accordance with ASC 718 does not utilize such an average. As such, the value approved by the Board for fiscal year 2024 differs from the value reported in this column. |
DIRECTOR COMPENSATION TABLE
| (4) As of June 30, 2024, no non-employee director had any stock options outstanding. |
DIRECTOR COMPENSATION TABLE
| (5) This column represents the H&R Block Foundation matching amount on contributions to 501(c)(3) organizations. |
DIRECTOR COMPENSATION TABLE
| (6) As previously disclosed, on September 17, 2024, Ms. Piazza notified the Board of Directors of her decision to resign as a director of the Company effective immediately. As a result, Ms. Piazza ceased being a director of the Company as of that date. |
DIRECTOR COMPENSATION TABLE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 16 |
NEW PRESIDENT, GLOBAL CONSUMER TAX AND CHIEF PRODUCT OFFICER
NEW PRESIDENT, GLOBAL CONSUMER TAX AND CHIEF PRODUCT OFFICER Curtis A. Campbell joined the Company as President, Global Consumer Tax and Chief Product Officer effective May 31, 2024. Mr. Campbell received a cash hiring bonus of $200,000 and a sign-on RSU award valued at approximately $350,000. The sign-on awards represent a portion of the core target compensation for Mr. Campbell and were intended to provide appropriate incentive opportunities for the period of time before our regular equity awards were granted in August. The sign-on cash award included a clawback provision based on a minimum service requirement of two years and the RSUs include a three-year vesting schedule. The Compensation Committee believed that such sign-on awards were necessary and appropriate to attract Mr. Campbell given the competitive talent market. The Compensation Committee’s independent compensation consultant, Compensation Advisory Partners LLC (“CAP LLC”), reviewed proxy peer data and survey data to assist the Committee in determining an appropriate pay package for Mr. Campbell.
CHIEF FINANCIAL OFFICER TRANSITION
CHIEF FINANCIAL OFFICER TRANSITION On February 1, 2024, Mr. Bowen notified the Company of his intention to retire from his position as Chief Financial Officer following the Company’s fiscal year 2024. Mr. Bowen’s voluntary departure from the Company did not constitute a “retirement” under the definitions of our equity award agreements, and he therefore forfeited his fiscal year 2023 and 2024 performance share units, and any unvested restricted share units, upon his departure. Mr. Bowen left the Company on September 13, 2024, during our fiscal year 2025, at which time Tiffany L. Mason became our Chief Financial Officer.
EXECUTIVE COMPENSATION PRACTICES
| What We Do | What We Don’t Do | | ✔ Tie pay to performance. ✔ Engage in a rigorous performance goal setting process. ✔ Mitigate undue risk through substantial emphasis on long-term equity incentives, caps on potential payments, and clawback provisions and policies. ✔ Provide modest post-termination benefits and double-trigger change in control severance payment provisions. ✔ Require double-trigger vesting of equity awards in the event of a change in control. ✔ Provide only minimal perquisites that we believe have a sound benefit to the Company. ✔ Have rigorous stock ownership and retention guidelines for our executives. ✔ Impose minimum vesting periods for all executives’ equity awards. ✔ Use of an independent compensation consultant by the Compensation Committee. | ✘ No executive employment contracts except with Mr. Jones, our CEO. ✘ No excise tax gross-ups. ✘ No individual change in control agreements, except for certain double-trigger provisions in Mr. Jones’s employment agreement (the “Employment Agreement”). ✘ No dividends on any unvested equity awards; dividend equivalents accrue and are payable only upon vesting of the underlying award. ✘ Expressly prohibit hedging, pledging and the use of margin accounts related to our stock. ✘ Expressly prohibit the repricing of stock options and stock appreciation rights without shareholder approval. ✘ Do not allow cash buyouts for stock options or stock appreciation rights with zero intrinsic value. |
FISCAL YEAR 2024 EXECUTIVE COMPENSATION PROGRAM SUMMARY
| | Component | Purpose | Characteristics | | Fixed | Base Salary | Compensates for scope and level of responsibility, experience, and sustained individual performance. | Fixed component; any increases are merit-driven and based on the executive’s individual performance as well as competitive market data. | | Performance-Based | STI | Motivates and rewards achievement of pre-established annual financial, operational, and strategic performance objectives. | Performance-based cash opportunity tied directly to our business plan; actual payouts vary based on achievement of specific performance objectives. | | | PSUs | Motivates and rewards achievement of multi-year performance objectives that enhance longer-term shareholder value. | Performance-based equity opportunity; amounts realized will vary based on actual financial results and stock price over a three-year period. | | Retentive Stock Awards | RSUs | Creates a balanced long-term incentive program, helping to manage equity utilization while aligning to market practice and longer-term shareholder value. | Time-based, three-year ratable vesting provides meaningful retentive value; improved stock price performance enhances overall value of awards. | | Other | Retirement, Health and Welfare Benefits | Offers market-competitive health insurance options and income replacement upon retirement, death, or disability. | Generally the same as those available to all employees, including benefits under a group health plan, a group life insurance program, and a 401(k) plan with Company matching. | | | Perquisites | Provides modest benefits that promote health, safety, and work-life balance. | An immaterial component of our ongoing executive compensation program. |
NEO Compensation Levels
NEO Compensation Levels The Compensation Committee establishes compensation levels based on the factors described above under “Executive Compensation Determination Process” and below under “Compensation Benchmarking.” Annual increases for our NEOs, other than the CEO, are based on evaluation of performance by the CEO and the Compensation Committee, the Company’s performance and outlook for the upcoming fiscal year, and NEO compensation data from our Peer Group companies as well as survey data. For fiscal year 2024, total target direct compensation (“TTDC”) levels for our NEOs were as follows:
NEO Compensation Levels
| Officers | Annual Base Salary ($) | STI Target ($) | LTI Target ($) | TTDC ($) | TTDC % Increase from Fiscal Year 2023 | | Jeffrey J. Jones II | $995,000 | $1,492,500 | $7,000,000 | $9,487,500 | 9.2% | | Tony G. Bowen | $642,700 | $578,430 | $1,800,000 | $3,021,130 | 3.4% | | Curtis A. Campbell(1) | $625,000 | $562,500 | — | $1,187,500 | N/A | | Dara S. Redler | $520,000 | $468,000 | $1,050,000 | $2,038,000 | 5.2% | | Kellie J. Logerwell | $290,000 | $145,000 | $280,000 | $715,000 | 3.4% |
NEO Compensation Levels
| (1) Mr. Campbell started employment with the Company on May 31, 2024, and received a pro-rated fiscal year 2024 STI award ($47,644, or 8.5%) based on his start date. He received cash and LTI sign-on awards but did not receive a fiscal year 2024 annual LTI award. See page 40 below for additional information. |
Short-Term Incentive Compensation
Short-Term Incentive Compensation Overview Our executive STI compensation is designed to compensate executives primarily for achieving pre-established performance objectives that relate to our fiscal year business plan. STI compensation is provided under our shareholder-approved H&R Block Executive Performance Plan (“Executive Performance Plan”). Under the Executive Performance Plan, the Compensation Committee may exercise discretion to modify the actual amounts to be paid to each executive, if any, based on subjective determinations or performance against additional objective performance metrics. Performance criteria and objectives may also be adjusted, as necessary, to prevent reduction or enlargement of an award due to extraordinary events generally outside the executives’ control.
Short-Term Incentive Compensation
| As noted above, given the comprehensive redesign undertaken in fiscal year 2022 that better aligned our compensation programs with our Block Horizons 2025 strategy, the Compensation Committee retained a consistent structure for the STI plan for fiscal year 2024, which is illustrated in the graphic to the right. The only material plan change from fiscal year 2023 was replacing the “Fund the Future” Cost Savings metric with a U.S. New Clients metric for fiscal year 2024, as the Fund the Future strategic goal was fully achieved. The Compensation Committee believes that this approach maintains the balance between the top- and bottom-line metrics while also reinforcing an alignment with the Company’s strategy and recognizing individual accomplishments that may also contribute toward Block Horizons 2025. | |
Short-Term Incentive Compensation
Target Awards STI target opportunities for our NEOs are intended to place a significant portion of our NEOs’ annual cash compensation at risk and to provide competitive total cash compensation opportunities. STI payouts can range from 0% (or 50% if all threshold goals are achieved) to 200% of each NEO’s target STI opportunity, based on performance against pre-established metrics and payout curves. Each year, the Compensation Committee approves a target opportunity for STI compensation for each NEO that is a percentage of base salary. The target opportunity percentages are unchanged from fiscal year 2023 (with the exception of Mr. Campbell, who was not employed by the Company in fiscal year 2023). The target opportunities applicable to our NEOs for fiscal year 2024 are shown in the table below.
Short-Term Incentive Compensation
| Officers | Target Opportunity (as a % of Base Salary) | Target Opportunity ($) | | Jeffrey J. Jones II | 150% | $1,492,500 | | Tony G. Bowen | 90% | $578,430 | | Curtis A. Campbell(1) | 90% | $562,500 | | Dara S. Redler | 90% | $468,000 | | Kellie J. Logerwell | 50% | $145,000 |
Short-Term Incentive Compensation
| (1) Mr. Campbell’s target fiscal year 2024 STI award was prorated to $47,644 (8.5%) based on his May 31, 2024 start date. |
Short-Term Incentive Compensation
In August 2023, the Compensation Committee approved the fiscal year 2024 STI performance objectives applicable to our executives that are summarized in the graphic below. The Compensation Committee believes that the levels set for the performance metrics, at the time when they were set, appropriately incentivized our executives to meet the Company’s Board-approved fiscal year 2024 operating plan and execute on our enterprise strategy by providing realistically achievable goals, while ensuring that such goals were sufficiently challenging.
Short-Term Incentive Compensation
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Short-Term Incentive Compensation
Target vs. Actual STI Awards The following formula is used to calculate the payout awarded for fiscal year 2024 STI compensation: As a result of our performance in fiscal year 2024, each of our NEOs received fiscal year 2024 STI compensation of 114.1% of the NEO’s respective target opportunity. The Compensation Committee considered, but did not apply, any modifiers to any individual payouts for fiscal year 2024. The Company’s results for each performance metric were as follows: Note: The criteria, objectives, and results in this table are disclosed in the limited context of our executive compensation program and should not be deemed to apply in other contexts. Payout percentages are rounded to the nearest tenth.
Short-Term Incentive Compensation
| (1) The performance metrics were consistent with the Company’s Board-approved fiscal year 2024 operating plan, the Company’s fiscal year 2024 financial outlook, and our enterprise strategy. |
Short-Term Incentive Compensation
| (2) Pre-Tax Earnings from Continuing Operations includes consolidated net earnings for fiscal year 2024 attributable to continuing operations before the deduction of income taxes (in millions). |
Short-Term Incentive Compensation
| (3) The U.S. New Clients strategic goal is tied to increasing new clients across our U.S. business lines, including and calculated as follows: (1) Assisted – new clients who did not file an assisted return with the Company in the prior fiscal year; (2) DIY – new, paid online completed returns (excludes all free clients); (3) a Spruce user who makes a deposit for the first time within the fiscal year; (4) a bookkeeping or payroll sign-up directly through our Central Team business services operations; and (5) a new Business Entity Formation order placed during the fiscal year. |
Short-Term Incentive Compensation
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Short-Term Incentive Compensation
The table below shows each NEO’s target opportunity and actual amount earned under our fiscal year 2024 STI program.
Short-Term Incentive Compensation
| Officers | Target STI Opportunity ($) | Payout at 114.1% of Target ($) | | Jeffrey J. Jones II | $1,492,500 | $1,703,271 | | Tony G. Bowen | $578,430 | $660,116 | | Curtis A. Campbell(1) | $562,500 | $54,372 | | Dara S. Redler | $468,000 | $534,091 | | Kellie J. Logerwell | $145,000 | $165,477 |
Short-Term Incentive Compensation
| (1) Mr. Campbell’s fiscal year target 2024 STI award was prorated to $47,644 (8.5%) based on his May 31, 2024 start date. |
Long-Term Incentive Compensation
Long-Term Incentive Compensation Overview We believe that a significant portion of each NEO’s compensation should depend on the long-term value we create for our shareholders. Our LTI compensation is equity-based and is designed to support multiple objectives, including:
Long-Term Incentive Compensation
| ▪ | aligning management’s interests with those of our shareholders; |
Long-Term Incentive Compensation
| ▪ | tying compensation to the attainment of long-term financial and operating goals and strategic objectives to drive long-term value creation; |
Long-Term Incentive Compensation
| ▪ | ensuring that realized compensation reflects changes in shareholder value over the long term; and |
Long-Term Incentive Compensation
| ▪ | recruiting, retaining, and motivating highly skilled executives. |
Long-Term Incentive Compensation
Generally, the Company awards equity-based compensation on an annual basis within 90 days of the beginning of each fiscal year. From time to time, the Company also awards equity-based compensation as part of an employment offer or promotion or, in certain limited instances, as a special award. Fiscal Year 2024 Performance-Based LTI
Long-Term Incentive Compensation
| For fiscal year 2024, our NEOs received a mix of equity-based incentive awards as shown in the chart to the right, each of which is explained below. At the end of the performance period, the Compensation Committee will certify the performance results and percentage payout for PSUs, as well as the resulting final number of units earned by each executive. There are no dividends paid on outstanding LTI during the vesting period, but dividend equivalents accumulate and are paid to the extent the award ultimately vests. Unvested units do not carry voting rights. | |
Long-Term Incentive Compensation
Performance Share Units
Long-Term Incentive Compensation
| | ▪ | PSUs establish a clear connection between NEOs’ compensation and the achievement of goals that are important for long-term value creation. | | | ▪ | The PSUs granted in fiscal year 2024 give a participating NEO the opportunity to earn an initial payout, ranging from 0% (or 50% if the threshold goal is achieved) to 200% of target, based upon the Company’s performance against a pre-established performance metric. This initial payout is then modified based on the Company’s Total Shareholder Return (“TSR”) over the performance period relative to the S&P 400 index. |
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
For PSUs granted in fiscal year 2024:
Long-Term Incentive Compensation
| ▪ | Performance is measured over a three-year period beginning on July 1, 2023 and ending on June 30, 2026. |
Long-Term Incentive Compensation
| ▪ | The pre-established performance metric is three-year cumulative EBITDA from Continuing Operations (“EBITDA”). The Compensation Committee selected EBITDA as the performance metric because it believes EBITDA from Continuing Operations is a driver of sustained value creation over the longer term. |
Long-Term Incentive Compensation
| ▪ | The initial payout is then modified, within a range of plus or minus 25%, based on the Company’s TSR over the performance period relative to the S&P 400 index, as follows, with payouts capped at 200%: |
Long-Term Incentive Compensation
The specific EBITDA performance goal for PSUs is not disclosed at this time given its competitive sensitivity but will be disclosed upon completion of the performance period in future proxy statements. The following formula is used to calculate the final number of earned PSUs, subject to the overall 200% cap: Executives are required to hold at least 50% of the gross shares earned upon vesting of the PSUs for a period of one year after the vesting date. In addition, vested equity is subject to stock ownership guidelines that may extend the one-year period if the guidelines have not yet been met. Restricted Share Units
Long-Term Incentive Compensation
| | ▪ | RSUs link our NEOs’ compensation with shareholders’ interests as the RSUs’ value varies with fluctuations in our stock price. | | | ▪ | The RSUs granted in fiscal year 2024 vest ratably over three years, providing a retention incentive for NEOs. |
Long-Term Incentive Compensation
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Long-Term Incentive Compensation
Fiscal Year 2024 LTI Vesting Provisions PSUs generally vest on the third anniversary of the grant date. RSUs generally vest in one-third annual increments beginning on the first anniversary of the grant date. However, certain special grants may have a different vesting schedule. Awards may vest upon termination of employment prior to the vesting date under certain circumstances, as described below under “Termination of Employment, Severance, and Transition Arrangements.” Fiscal Year 2024 LTI Compensation Awards For fiscal year 2024, the Company awarded our NEOs PSUs and RSUs, effective August 31, 2023, in the amounts shown below. The fiscal year 2024 PSUs are performance-based and will vest on August 31, 2026, and the fiscal year 2024 RSUs vest in one-third annual increments beginning on August 31, 2024.
Long-Term Incentive Compensation
| Officers | Annual Award Value ($) | PSUs (#)(1) | RSUs (#)(1) | | Jeffrey J. Jones II | $7,000,000 | 103,269 | 61,281 | | Tony G. Bowen | $1,800,000 | 26,555 | 15,758 | | Dara S. Redler | $1,050,000 | 15,491 | 9,193 | | Kellie J. Logerwell | $280,000 | 4,131 | 2,452 |
Long-Term Incentive Compensation
| (1) Represents the value of our annual LTI compensation program awards, which are subject to rounding. These award values are converted into: (i) the number of PSUs based on the Monte Carlo valuation model as of the grant date and (ii) the number of RSUs based on the closing price of one share of common stock on the grant date. The number of PSUs or RSUs resulting from the conversion of the award value to the number of units awarded is rounded up to the nearest whole unit, such rounded numbers are reflected in the chart above. As such, the award value reported in this column may differ from the accounting grant date fair value under ASC 718. As discussed above, Mr. Campbell received LTI sign-on awards in connection with joining the Company, but he did not receive a fiscal year 2024 annual LTI award. |
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS Our executives, including our NEOs, received PSUs in fiscal year 2022 (other than Ms. Redler and Mr. Campbell who were not employed by the Company on the grant date). Performance for these PSUs was based on a three-year period beginning on July 1, 2021 and ending on June 30, 2024. Performance was certified, and the overall payout was approved by the Compensation Committee in August 2024. Under the terms of the award agreements for fiscal year 2022 PSUs, a participating executive had the opportunity to earn an initial payout based upon the Company’s performance against pre-established EBITDA performance. The Committee selected a preset level of three-year cumulative EBITDA for the performance period. This initial payout was then modified based on the Company’s TSR relative to the S&P 400 index over the performance period. The TSR modifier could increase or decrease the payout by up to 25% of the initial payout amount. However, notwithstanding the result of that calculation, the maximum earned amount was capped at 200%. Based on the Company’s results relative to the preset threshold, target, and maximum, the Compensation Committee approved the below results and applicable EBITDA performance.
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
| (1) EBITDA from Continuing Operations is defined as earnings of the Company from continuing operations excluding interest expense, taxes, depreciation and amortization. |
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
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VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
The Compensation Committee then applied a TSR modifier of 125.0% based on the Company’s TSR over the performance period relative to the S&P 400, which ranked in the 97th percentile. Based on the performance percentage and the TSR modifier, our NEOs received 187.1% of the PSUs they were initially granted at target, as well as additional shares of common stock representing dividend equivalents accrued on the number of shares that ultimately vested. The table below shows the target-level opportunity and actual award with respect to the PSUs granted to each of our NEOs in fiscal year 2022:
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
| Officers | PSUs Outstanding (#)(1) | Performance Percentage(1) | TSR Modifier(1) | | Actual Shares Received (#)(2) | | Jeffrey J. Jones II | 169,942.1x | 149.7%x | 125.0% | = | 318,031 | | Tony G. Bowen | 49,438.7 | | | | 92,520 | | Kellie J. Logerwell | 8,034.1 | | | | 15,036 |
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
| (1) The number of PSUs outstanding includes dividend equivalents accrued on the number of PSUs granted in fiscal year 2022. The PSUs outstanding, Performance Percentage, and TSR Modifier are rounded to the nearest tenth for the purposes of this illustration. |
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
| (2) The number of shares actually received by the NEOs includes additional shares of common stock equal in value to the total dividends that would have been paid on the number of shares of common stock that vested pursuant to the payout calculation and are rounded up to the next whole share. Neither Ms. Redler nor Mr. Campbell received fiscal year 2022 PSUs, as they were not employed by the Company at the time of grant. |
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 2022 PSUS
As described above, the mandatory post-vesting holding requirement requires that the executive hold at least 50% of the gross shares earned upon vesting of the PSUs for a period of one year after the vesting date.
NEO Compensation Levels
| Officers | Annual Base Salary ($) | STI Target ($) | LTI Target ($) | TTDC ($) | TTDC % Increase from Fiscal Year 2024 | | Jeffrey J. Jones II | $995,000 | $1,492,500 | $8,300,000 | $10,787,500 | 13.7% | | Tony G. Bowen(1) | $642,700 | — | — | — | — | | Curtis A. Campbell | $625,000 | $562,500 | $1,500,000 | $2,687,500 | N/A | | Dara S. Redler | $540,000 | $486,000 | $1,200,000 | $2,226,000 | 9.2% | | Kellie J. Logerwell | $298,000 | $149,000 | $290,000 | $737,000 | 3.1% |
NEO Compensation Levels
| (1) Mr. Bowen received his base salary for the portion of fiscal year 2025 that he was employed by the Company, but did not receive any STI or LTI awards for fiscal year 2025. |
COMPENSATION BENCHMARKING
COMPENSATION BENCHMARKING We benchmark our executive compensation practices relative to publicly disclosed information for a defined group of peer companies, which for fiscal year 2024 is set forth below (the “Peer Group”). We also review compensation data from multiple general industry survey sources, comparing companies of relevant total revenue size and positions of comparable duties for each of the NEOs. For fiscal year 2024, these survey sources were the Aon Radford Global Compensation Database and the Willis Towers Watson General Industry Executive Compensation Survey. The Compensation Committee reviews summary survey and Peer Group data to confirm that the market references we use are appropriate for our business and the industries in which we compete for executive talent.
COMPENSATION BENCHMARKING
| With the input of its independent compensation consultant, the Compensation Committee reviews the Peer Group annually and revises the group as circumstances warrant. We endeavor to identify companies that are comparable to or competitive with our core businesses, including tax and professional products and services, that have similar strategic plans or outlook, or that are comparable on a variety of relevant metrics. As a result of the Compensation Committee’s annual review in November of 2022, with input from its independent compensation consultant, the Compensation Committee determined that no changes were necessary from the peer group used for benchmarking fiscal year 2023 compensation. The graphic to the right shows the Peer Group utilized by the Compensation Committee in benchmarking fiscal year 2024 compensation. | |
COMPENSATION BENCHMARKING
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Fiscal Year 2025 Peer Group
Fiscal Year 2025 Peer Group The Compensation Committee conducted its annual review of Peer Group companies to be referenced in setting fiscal year 2025 compensation in November of 2023. With input from its independent compensation consultant, the Committee determined to replace Unisys Corporation with Alight, Inc. The change enables better alignment to the Company from a median review size perspective and with the Company’s strategic goals.
ROLES OF THE INDEPENDENT COMPENSATION CONSULTANT, MANAGEMENT, AND THE BOARD IN EXECUTIVE COMPENSATION
ROLES OF THE INDEPENDENT COMPENSATION CONSULTANT, MANAGEMENT, AND THE BOARD IN EXECUTIVE COMPENSATION
Grant Practices Specific to Stock Options
Grant Practices Specific to Stock Options We do not currently grant stock options as part of our equity compensation programs. If stock options were to be granted in the future, the Company would not grant such options in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock. In addition, we generally do not grant stock options (i) during trading blackout periods established under our Insider Trading Policy, or (ii) at any time during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that discloses material nonpublic information. These restrictions do not apply to RSUs, PSUs, or other types of equity awards that do not include an exercise price related to the market price of our common stock on the date of grant. During fiscal year 2024, (i) none of our NEOs were awarded stock options with an effective grant date during any period beginning four business days before the filing or furnishing of a Form 10-Q, Form 10-K, or Form 8-K that disclosed material nonpublic information, and ending one business day after the filing or furnishing of such reports, and (ii) we did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
TERMINATION OF EMPLOYMENT, SEVERANCE, AND TRANSITION ARRANGEMENTS
TERMINATION OF EMPLOYMENT, SEVERANCE, AND TRANSITION ARRANGEMENTS
Termination of Employment Provisions in LTI Award Agreements
Termination of Employment Provisions in LTI Award Agreements The award agreements for equity awards granted pursuant to the 2018 Plan provide for vesting of certain awards outstanding for more than a year in the event of a termination of employment under certain circumstances. An executive’s termination of employment prior to a vesting date will have the following impacts on unvested awards:
Termination of Employment Provisions in LTI Award Agreements
| | PSUs | RSUs | | Voluntary Termination that is not a Retirement | Forfeit | Forfeit | | Termination for Cause | Forfeit | Forfeit | | Retirement(1) | Pro-Rata Vesting(2) | Pro-Rata Vesting | | Death or Disability(1) | Full Vesting(2) | Full Vesting | | Involuntary Termination without Cause(1) | Pro-Rata Vesting(2) | Forfeit |
Termination of Employment Provisions in LTI Award Agreements
| (1) Event must occur more than one year following the grant date for pro-rata or full vesting; event within one year of the grant date results in forfeiture. |
Termination of Employment Provisions in LTI Award Agreements
| (2) For performance-based awards, final vesting is determined based on attainment of applicable performance goals. |
Termination of Employment Provisions in LTI Award Agreements
Beginning in fiscal year 2023, PSU awards also provide for pro-rata vesting in the event of a Good Reason Termination (as defined in the Executive Severance Plan) more than one year after the grant date. In addition, all award agreements provide that all unvested awards that would otherwise be subject to pro-rata or full vesting under the termination scenarios described above will be forfeited by the executive if the Compensation Committee determines that the executive engaged in activities that would have been grounds for an involuntary termination for cause while employed by the Company.
Termination of Employment Provisions in LTI Award Agreements
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Termination of Employment Provisions in LTI Award Agreements
In the event of a change in control, the Compensation Committee may use its discretion to waive the performance goals that apply to performance-based awards. If it does, the units generally will vest based on the executive’s continued employment through the third anniversary of the grant date and the executive will be entitled to receive all or a pro-rata portion of the award in the event of a termination under certain circumstances in connection with or following the change in control. For RSUs, the executive will be entitled to receive full vesting in the event of a termination under certain circumstances (as set forth in the award agreement governing the grant) in connection with a change in control.
Severance Arrangements
Severance Arrangements The Executive Severance Plan is intended to support a variety of objectives, including (i) standardization of severance policy among the senior officers, which ensures internal parity, simplifies internal administration, and mitigates negotiation at hire and termination, and (ii) the recruiting and retention of highly skilled executives by protecting them from the short-term economic consequences associated with unexpected termination of employment in the absence of cause. Based on advice from the Compensation Committee’s independent compensation consultant, we believe the benefits our NEOs would receive under various severance scenarios are aligned with the market and sufficient to support the above objectives. Mr. Campbell and Mses. Redler and Logerwell are participants in the Executive Severance Plan. Mr. Bowen participated in the Executive Severance Plan prior to his departure from the Company. Under the terms of the Employment Agreement, Mr. Jones would only participate in the Executive Severance Plan if and to the extent that the benefits related to equity awards thereunder exceeded those contained in the Employment Agreement.
Change in Control Provisions
Change in Control Provisions Change in control provisions for our NEOs are set forth in the Executive Severance Plan and the LTI award agreements. The Company provides these “change in control” benefits as a means to recruit and retain talented executives, who could have other job alternatives that may appear more attractive absent these benefits. In addition, by providing financial protection in the event that a transaction results in the loss of employment, the change in control program helps to ensure the independence and objectivity of our executives when reviewing potential transactions and that executives will remain focused during periods of uncertainty. All change in control payments under the Executive Severance Plan require both a change in control and the subsequent loss of employment by the NEO (a “double-trigger”). Change in control provisions for Mr. Jones are set forth in the Employment Agreement and change in control payments under the Employment Agreement include a double-trigger, as described above. In addition, the equity award agreements contain provisions accelerating the vesting of equity awards upon certain changes in control and include a double-trigger, as described above. The Company uses this double-trigger equity acceleration policy to protect against the loss of retention power following a change in control and to avoid windfalls, both of which could occur if vesting accelerated automatically as a result of a transaction. The Company has historically avoided the use of excise tax gross-up provisions relating to a change in control and associated “parachute payments” and has no such gross-up obligations in place with respect to any executive officers, including Mr. Jones. Consistent with the Company’s historical practice, in the future we intend to refrain from providing excise tax gross-up provisions relating to a change in control. These change in control arrangements are not provided exclusively to the NEOs. A larger group of management employees is eligible to receive many of the change in control benefits described in this section.
Change in Control Provisions
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RISK ASSESSMENT IN COMPENSATION PROGRAMS
| ▪ | Utilizing caps on potential payments of cash and equity compensation; |
RISK ASSESSMENT IN COMPENSATION PROGRAMS
| ▪ | Our LTI vehicles are based on a balanced combination of corporate financial results and stock price performance, and absolute and relative performance, which, along with the payout caps and the holding requirement related to PSUs, limit the incentive to take excessive risks that may have a significant impact on the Company; |
RISK ASSESSMENT IN COMPENSATION PROGRAMS
| ▪ | Our strong corporate governance policies, including prohibitions on hedging and pledging of Company stock, clawback polices, stock ownership guidelines, and a stand-alone post-vesting holding period of one year for 50% of gross PSUs earned; and |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table sets forth the compensation paid to or earned by the Company’s named executive officers for the fiscal year ended June 30, 2024.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Jeffrey J. Jones II, President and CEO | 2024 | 1,000,467 | — | 7,000,047 | — | 1,703,271 | 173,303 | 9,877,088 | | | 2023 | 997,734 | — | 6,200,037 | — | 1,438,186 | 178,400 | 8,814,357 | | | 2022 | 997,734 | — | 6,416,674 | — | 3,483,863 | 141,912 | 11,040,183 | | Tony G. Bowen, Chief Financial Officer(5) | 2024 | 646,232 | — | 1,800,018 | — | 660,116 | 18,674 | 3,125,040 | | | 2023 | 641,073 | — | 1,700,036 | — | 557,380 | 18,303 | 2,916,792 | | | 2022 | 618,561 | — | 1,866,715 | — | 1,298,308 | 18,333 | 3,801,917 | | Curtis A. Campbell, President, Global Consumer Tax and Chief Product Officer(6) | 2024 | 53,915 | 200,000 | 350,036 | — | 54,372 | 13,916 | 672,239 | | Dara S. Redler, Chief Legal Officer | 2024 | 522,857 | — | 1,050,070 | — | 534,091 | 18,765 | 2,125,783 | | | 2023 | 518,681 | — | 950,005 | — | 450,969 | 25,771 | 1,945,426 | | | 2022 | 229,396 | 225,000 | 475,020 | — | 406,849 | 7,912 | 1,344,177 | | Kellie J. Logerwell, Vice President and Chief Accounting Officer | 2024 | 290,355 | — | 280,043 | — | 165,477 | 18,037 | 753,912 | | | 2023 | 280,088 | — | 270,020 | — | 135,291 | 16,822 | 702,221 | | | 2022 | 270,110 | — | 303,369 | — | 315,123 | 17,678 | 906,280 |
SUMMARY COMPENSATION TABLE
| (1) The amounts shown represent base salary amounts accrued by the Company related to the applicable period, rather than amounts actually paid to the executives. In addition, any base salary changes take effect following Compensation Committee approval, which generally occurs after the start of the fiscal year. Therefore, these numbers vary somewhat from the annual base salaries disclosed in the Compensation Discussion and Analysis. Each of the NEOs contributed a portion of his or her fiscal year 2024 salary to the Company’s 401(k) savings plan, the H&R Block Retirement Savings Plan (“RSP”). |
SUMMARY COMPENSATION TABLE
| (2) This column represents the grant date fair value under ASC 718 for performance share units and restricted share units granted during fiscal year 2024, as well as equity awards in prior fiscal years (as applicable). The grant date fair value of these awards is computed in accordance with ASC 718 utilizing assumptions discussed in Note 8 “Stock-Based Compensation” to the Company’s consolidated financial statements in the Form 10-K for the year ended June 30, 2024, as filed with the SEC. These amounts reflect an accounting expense and do not correspond to the actual value that may be realized by the NEOs. |
SUMMARY COMPENSATION TABLE
| (3) This column represents amounts awarded and earned under the Company’s STI compensation program, as discussed beginning on page 28. The amount for Mr. Campbell reflects his prorated award based on his May 31, 2024 start date. |
SUMMARY COMPENSATION TABLE
| (4) In valuing personal benefits, we use the incremental cost to the Company of the benefit. The following table sets forth all other compensation for fiscal year 2024: |
SUMMARY COMPENSATION TABLE
| Name | RSP Contribution Matching ($) | Group Life Insurance ($)(a) | Personal Usage of Private Aircraft ($)(b) | Miscellaneous ($)(c) | Total ($) | | Mr. Jones | 17,250 | 1,510 | 149,543 | 5,000 | 173,303 | | Mr. Bowen | 16,500 | 2,174 | — | — | 18,674 | | Mr. Campbell | — | 125 | — | 13,791 | 13,916 | | Ms. Redler | 16,500 | 2,265 | — | — | 18,765 | | Ms. Logerwell | 16,730 | 1,307 | — | — | 18,037 |
SUMMARY COMPENSATION TABLE
| (a) Represents the economic value of the death benefit provided by the Company’s group life insurance program. The imputed income reported represents the portion of the premium paid by the Company that is attributable to term life insurance coverage for the executive officer; the program provides only an insurance benefit with no cash compensation element to the executive officer. |
SUMMARY COMPENSATION TABLE
| (b) Represents the incremental cost to the Company related to Mr. Jones’s personal use of the Company’s fractional share of a private aircraft (incremental cost includes variable costs incurred as a result of personal flight activity, such as hourly charges for each flight, fuel charges, and miscellaneous fees; it excludes non-variable costs, such as the Company’s monthly management fee and insurance fees). Mr. Jones’s family members or guests accompanied him on certain flights at no incremental cost to the Company. |
SUMMARY COMPENSATION TABLE
| (c) Represents: (i) with respect to Mr. Jones, the H&R Block Foundation matching amount on behalf of Mr. Jones with respect to his individual contributions to 501(c)(3) organizations (see “Director Compensation” above); and (ii) with respect to Mr. Campbell, the incremental cost to the Company related to Mr. Campbell’s travel and temporary housing near our corporate headquarters to facilitate Mr. Campbell’s onboarding. While we consider Mr. Campbell’s travel to serve an important business purpose, we have identified the incremental cost of this travel and housing as a perquisite for SEC reporting purposes due to SEC rules. |
SUMMARY COMPENSATION TABLE
| (5) Mr. Bowen voluntarily departed from the Company on September 13, 2024. Mr. Bowen’s voluntary departure from the Company did not constitute a “retirement” under the definitions of our equity award agreements, and he therefore forfeited his fiscal year 2023 and 2024 performance share units, and any unvested restricted share units, upon his departure. Mr. Bowen received no additional compensation in connection with his voluntary departure. |
SUMMARY COMPENSATION TABLE
| (6) Mr. Campbell was appointed President, Global Consumer Tax and Chief Product Officer of the Company effective May 31, 2024. Mr. Campbell received a cash hiring bonus of $200,000 and a sign-on RSU award valued at approximately $350,000, which are reflected in the Bonus and Stock Awards columns, respectively. |
SUMMARY COMPENSATION TABLE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 40 |
GRANTS OF PLAN-BASED AWARDS TABLE
GRANTS OF PLAN-BASED AWARDS TABLE The following table provides information about non-equity incentive plan awards, equity incentive plan awards, and stock awards granted to our NEOs during the fiscal year ended June 30, 2024.
GRANTS OF PLAN-BASED AWARDS TABLE
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | Name of Executive | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(1) | | Jones | | | | | | | | | | | | | | - STI Award(2) | — | — | 746,250 | 1,492,500 | 2,985,000 | — | — | — | — | — | — | — | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | — | — | 61,281 | — | — | 2,450,014 | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | 103,269 | 206,538 | — | — | — | 4,550,032 | | Bowen(3) | | | | | | | | | | | | | | - STI Award(2) | — | — | 289,215 | 578,430 | 1,156,860 | — | — | — | — | — | — | — | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | — | — | 15,758 | — | — | 630,005 | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | 26,555 | 53,110 | — | — | — | 1,170,013 | | Campbell(4) | | | | | | | | | | | | | | - STI Award(2) | — | — | 23,822 | 47,644 | 95,288 | — | — | — | — | — | — | — | | - LTI Award(1) | 6/3/24 | 5/30/24 | — | — | — | — | — | — | 6,977 | — | — | 350,036 | | Redler | | | | | | | | | | | | | | - STI Award(2) | — | — | 234,000 | 468,000 | 936,000 | — | — | — | — | — | — | — | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | — | — | 9,193 | — | — | 367,536 | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | 15,491 | 30,982 | — | — | — | 682,533 | | Logerwell | | | | | | | | | | | | | | - STI Award(2) | — | — | 72,500 | 145,000 | 290,000 | — | — | — | — | — | — | — | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | — | — | 2,452 | — | — | 98,031 | | - LTI Award(1) | 8/31/23 | 8/9/23 | — | — | — | — | 4,131 | 8,262 | — | — | — | 182,012 |
GRANTS OF PLAN-BASED AWARDS TABLE
| (1) Amounts represent awards made under the Company’s LTI compensation program and granted pursuant to the 2018 Plan. Dollar values represent the accounting grant date fair value of performance share units and restricted share units under ASC 718. The grant date fair value of these awards is computed in accordance with ASC 718 utilizing assumptions discussed in Note 8 “Stock-Based Compensation” to the Company’s consolidated financial statements in the Form 10-K for the year ended June 30, 2024, as filed with the SEC. The dollar values reflect an accounting expense and do not correspond to the actual value that may be realized by the NEOs. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (2) Amounts represent the potential value of the payouts under the Company’s STI compensation program. Actual fiscal year 2024 STI payout amounts are included in the Summary Compensation Table. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (3) Mr. Bowen voluntarily departed the Company on September 13, 2024, and he therefore forfeited the fiscal year 2024 PSUs and any unvested RSUs upon his departure. |
GRANTS OF PLAN-BASED AWARDS TABLE
| (4) Mr. Campbell was appointed President, Global Consumer Tax and Chief Product Officer of the Company effective May 31, 2024. He received a cash hiring bonus and a sign-on LTI, but did not receive the standard, annual LTI award in fiscal year 2024. |
GRANTS OF PLAN-BASED AWARDS TABLE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 41 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE The following table summarizes the equity awards made to our NEOs outstanding as of June 30, 2024.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | | | Option Awards | | | | | Stock Awards | | | | | Name of Executive | Grant Date | Vesting Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(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) | | Jones | 8/31/21 | 8/31/24 | — | — | — | — | — | — | — | 169,942 | 9,215,962 | | | 8/31/21 | 8/31/24 | — | — | — | — | — | 32,191 | 1,745,743 | — | — | | | 8/31/22 | 8/31/25 | — | — | — | — | — | — | — | 87,951 | 4,769,568 | | | 8/31/22 | 8/31/25(3) | — | — | — | — | — | 34,086 | 1,848,466 | — | — | | | 8/31/23 | 8/31/26 | — | — | — | — | — | — | — | 105,525 | 5,722,625 | | | 8/31/23 | 8/31/26(4) | — | — | — | — | — | 62,620 | 3,395,871 | — | — | | | 8/21/17 | — | 273,905 | — | — | $29.73 | 8/21/27 | — | — | — | — | | Bowen(7) | 8/31/21 | 8/31/24 | — | — | — | — | — | — | — | 49,439 | 2,681,061 | | | 8/31/21 | 8/31/24 | — | — | — | — | — | 9,366 | 507,926 | — | — | | | 8/31/22 | 8/31/25 | — | — | — | — | — | — | — | 24,116 | 1,307,784 | | | 8/31/22 | 8/31/25(3) | — | — | — | — | — | 9,347 | 506,882 | — | — | | | 8/31/23 | 8/31/26 | — | — | — | — | — | — | — | 27,135 | 1,471,539 | | | 8/31/23 | 8/31/26(4) | — | — | — | — | — | 16,102 | 873,226 | — | — | | Campbell | 6/3/24 | 6/3/27(5) | — | — | — | — | — | 6,977 | 378,363 | — | — | | Redler | 2/1/22 | 2/1/25(6) | — | — | — | — | — | 7,369 | 399,595 | — | — | | | 8/31/22 | 8/31/25 | — | — | — | — | — | — | — | 13,476 | 730,821 | | | 8/31/22 | 8/31/25(3) | — | — | — | — | — | 5,224 | 283,311 | — | — | | | 8/31/23 | 8/31/26 | — | — | — | — | — | — | — | 15,829 | 858,430 | | | 8/31/23 | 8/31/26(4) | — | — | — | — | — | 9,394 | 509,428 | — | — | | Logerwell | 8/31/21 | 8/31/24 | — | — | — | — | — | — | — | 8,034 | 435,688 | | | 8/31/21 | 8/31/24 | — | — | — | — | — | 1,524 | 82,658 | — | — | | | 8/31/22 | 8/31/25 | — | — | — | — | — | — | — | 3,831 | 207,730 | | | 8/31/22 | 8/31/25(3) | — | — | — | — | — | 1,486 | 80,592 | — | — | | | 8/31/23 | 8/31/26 | — | — | — | — | — | — | — | 4,221 | 228,918 | | | 8/31/23 | 8/31/26(4) | — | — | — | — | — | 2,506 | 135,877 | — | — |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (1) Market value was determined using the closing price of the Company’s common stock of $54.23, which was the closing price as reported on the NYSE on June 28, 2024 (the last trading day of fiscal year 2024). |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (2) Represents PSUs. Actual shares delivered under these awards are subject to performance conditions and therefore may vary from the target units reported here. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (3) These RSUs vest in two equal increments on 8/31/24 and 8/31/25. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (4) These RSUs vest in one-third increments on 8/31/24, 8/31/25, and 8/31/26. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (5) These RSUs vest in one-third increments on 6/3/25, 6/3/26, and 6/3/27. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (6) These RSUs vest on 2/1/25. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| (7) Mr. Bowen voluntarily departed the Company on September 13, 2024, and he forfeited his fiscal year 2023 and 2024 performance share units, and any unvested restricted share units, upon his departure. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 42 |
OPTION EXERCISES AND STOCK VESTED TABLE
OPTION EXERCISES AND STOCK VESTED TABLE The following table summarizes the value realized by the NEOs upon option award exercises and stock award vesting during the fiscal year ended June 30, 2024.
OPTION EXERCISES AND STOCK VESTED TABLE
| | Option Awards | | Stock Awards | | | Name of Executive | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($) | | Jones | — | — | 47,881 | 1,914,283 | | Bowen | — | — | 13,652 | 545,807 | | Campbell | — | — | — | — | | Redler | — | — | 9,811 | 438,791 | | Logerwell | — | — | 2,200 | 87,956 |
OPTION EXERCISES AND STOCK VESTED TABLE
| (1) Amounts in this column reflect restricted share units that vested during the fiscal year ended June 30, 2024 (including dividend equivalents accumulated as the date of vesting). |
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION The Company provides the H&R Block, Inc. Deferred Compensation Plan for Executives, a nonqualified plan (the “DC Plan”), to employees who meet certain eligibility requirements. The DC Plan is intended to pay, out of the general assets of the Company, an amount substantially equal to the deferrals and Company contributions, adjusted for any earnings or losses. The Company does not provide any matching contributions for this plan. Participants can elect to defer from 0% to 100% of eligible base salary and up to 100% of annual bonus on a pre-tax basis. The DC Plan offers various investment options (which mirror the options available under the Company’s 401(k) plan) to participants. Participant deferrals are credited to a bookkeeping account that is administered by Fidelity Investments. Earnings are credited to each participant’s account based on the investment options selected by such participant. Participants may change or reallocate their investments at any time but can only change the deferral amount once per year. Participants can elect to receive in-service payments or lump-sum or monthly payments over one to 15 years following termination from service or disability. To ensure compliance with IRC Section 409A, the DC Plan provides that the payments following termination shall not be made earlier than six months after the termination date. Amounts deferred under the DC Plan by NEOs, if any, are included in the appropriate column of the Summary Compensation Table. The following table summarizes our NEOs’ compensation under the DC Plan for Executives during fiscal year 2024.
NONQUALIFIED DEFERRED COMPENSATION
| Name of Executive | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings (Loss) in Last FY ($)(1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($)(2) | | Jones | 704,931 | 121,659 | 202,439 | — | 1,029,029 | | Bowen | — | — | — | — | — | | Campbell | — | — | — | — | — | | Redler | — | — | — | — | — | | Logerwell | — | — | — | — | — |
NONQUALIFIED DEFERRED COMPENSATION
| (1) The amounts in this column are not included in the Summary Compensation Table because they are not above-market or preferential earnings on deferred compensation. |
NONQUALIFIED DEFERRED COMPENSATION
| (2) Amounts in this column include NEO contributions previously reflected in Summary Compensation Tables included in the Company’s proxy statements for prior fiscal years and any earnings thereon. |
NONQUALIFIED DEFERRED COMPENSATION
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 43 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table summarizes the potential payments our NEOs would receive in the event of termination or a change in control of the Company. For Messrs. Jones, Bowen and Campbell and Mses. Redler and Logerwell, this table assumes the relevant triggering event occurred on June 30, 2024, and the value of the equity-based awards included below was therefore determined using the closing price of the Company’s common stock of $54.23, which was the closing price as reported on the NYSE on June 28, 2024 (the last trading day of fiscal year 2024). Accordingly, the amounts provided in this table for each of our NEOs are based on hypothetical circumstances, may materially differ from actual amounts payable upon the triggering event, and the actual amounts to be paid out can only be determined at the time of such triggering event.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
| Name of Executive | Termination without Cause ($) | Termination for Good Reason ($) | Termination without Cause or for Good Reason in Connection with a Change in Control ($) | Retirement ($) | Death or Disability ($) | | Jones(1) | | | | | | | Cash | 4,975,000 | 4,975,000 | 4,975,000 | — | — | | Restricted Share Units | — | — | 6,967,778 | 2,761,135 | 3,571,907 | | Performance Share Units | 11,546,605 | 2,896,650 | 19,621,373 | 11,546,605 | 13,898,748 | | Health and Welfare Plan Benefits | 58,664 | 58,664 | 58,664 | — | — | | Outplacement Services | — | — | — | — | — | | Total | 16,580,269 | 7,930,314 | 31,622,815 | 14,307,740 | 17,470,655 | | Bowen(2) | | | | | | | Cash | 1,831,695 | 1,831,695 | 2,442,260 | — | — | | Restricted Share Units | — | — | 1,881,736 | — | 1,008,511 | | Performance Share Units | 3,310,643 | 794,243 | 5,435,632 | — | 3,964,094 | | Health and Welfare Plan Benefits | 19,049 | 19,049 | 19,049 | — | — | | Outplacement Services | 15,000 | 15,000 | 15,000 | — | — | | Total | 5,176,387 | 2,659,987 | 9,793,677 | — | 4,972,605 | | Campbell(3) | | | | | | | Cash | 1,781,250 | 1,781,250 | 2,375,000 | — | — | | Restricted Share Units | — | — | 378,363 | — | — | | Performance Share Units | — | — | — | — | — | | Health and Welfare Plan Benefits | 19,049 | 19,049 | 19,049 | — | — | | Outplacement Services | 15,000 | 15,000 | 15,000 | — | — | | Total | 1,815,299 | 1,815,299 | 2,787,412 | — | — | | Redler(3) | | | | | | | Cash | 1,482,000 | 1,482,000 | 1,976,000 | — | — | | Restricted Share Units | — | — | 1,188,096 | — | 678,668 | | Performance Share Units | 443,841 | 443,841 | 1,584,716 | — | 726,286 | | Health and Welfare Plan Benefits | — | — | — | — | — | | Outplacement Services | 15,000 | 15,000 | 15,000 | — | — | | Total | 1,940,841 | 1,940,841 | 4,763,812 | — | 1,404,954 | | Logerwell(3) | | | | | | | Cash | 652,500 | 652,500 | 870,000 | — | — | | Restricted Share Units | — | — | 298,114 | — | 162,237 | | Performance Share Units | 535,088 | 126,158 | 868,344 | — | 639,426 | | Health and Welfare Plan Benefits | 19,049 | 19,049 | 19,049 | — | — | | Outplacement Services | 15,000 | 15,000 | 15,000 | — | — | | Total | 1,221,637 | 812,707 | 2,070,507 | — | 801,663 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
| (1) Payments to Mr. Jones would be made pursuant to the terms of the Employment Agreement and various equity award agreements described above under “Employment Agreements, Change in Control and Other Arrangements” and “Termination of Employment, Severance, and Transition Arrangements.” |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 47 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
| (2) As discussed above, Mr. Bowen voluntarily departed the Company on September 13, 2024. Mr. Bowen’s voluntary departure from the Company did not constitute a “retirement” under the definitions of our equity award agreements, and he therefore forfeited his fiscal year 2023 and 2024 performance share units, and any unvested restricted share units, upon his departure. Mr. Bowen received no additional compensation in connection with his voluntary departure. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
| (3) Payments to Mr. Campbell and Mses. Redler and Logerwell would be made pursuant to the terms of the Executive Severance Plan and various equity award agreements described above under “Employment Agreements, Change in Control and Other Arrangements” and “Termination of Employment, Severance, and Transition Arrangements.” |
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule that requires a public company to disclose the ratio of the annual total compensation of its CEO to the median annual total compensation of its employees (other than its CEO). Mr. Jones served as our President and CEO throughout fiscal year 2024. On June 30, 2024, the date which we selected to identify the median employee (the “Pay Ratio Date”), the Company and its consolidated subsidiaries had approximately 12,143 U.S. employees and 4,519 non-U.S. employees, for a total of 16,662 employees. This population consisted of full-time, part-time, seasonal, and temporary employees. To identify the median employee from the employee population of the Company and its consolidated subsidiaries, we compared the amount of salary and wages paid to employees (excluding Mr. Jones), as reflected in our payroll records for our 2024 fiscal year. We annualized compensation for employees who were hired in fiscal 2024 but did not work for us the entire year, excluding seasonal and temporary employees. No cost-of-living adjustments were made in identifying the median employee. The identified median employee was a seasonal associate whose total hours worked during the year was equivalent to approximately four months of a full-time associate’s hours worked. After the median employee was identified, we calculated such employee’s annual total compensation using the same methodology used for the Company’s named executive officers as set forth in the fiscal year 2024 Summary Compensation Table of this proxy statement. For fiscal year 2024, the annual total compensation for Mr. Jones was $9,877,088 and the annual total compensation for the median employee, excluding Mr. Jones, was $23,798, which resulted in a ratio of 415 to 1. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. We believe that our calculated ratio is a reasonable estimate calculated in a manner consistent with the pay ratio disclosure requirements. The pay ratios reported by other companies, including those within our Peer Group and industry, may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. This information is being provided for the purposes of compliance with the pay ratio disclosure requirement. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions.
PAY RATIO DISCLOSURE
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 48 |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
Pay versus Performance Table
Pay versus Performance Table As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid or “CAP” (as defined by SEC rules) and certain financial performance of the Company. The Compensation Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the Company’s performance, see “Compensation Discussion and Analysis” on page 22 above.
Pay versus Performance Table
| Fiscal Year(1) | Summary Compensation Table Total for PEO ($)(2) | Compensation Actually Paid to PEO ($)(3) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(4) | Average Compensation Actually Paid to Non-PEO NEOS ($)(5) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($, in 000s) | EBITDA from Continuing Operations ($, in 000s)(8) | | | | | | | Company Total Shareholder Return ($)(6) | Peer Group Total Shareholder Return ($)(7) | | | | 2024 | 9,877,088 | 25,146,908 | 1,669,244 | 3,254,732 | 384.69 | 235.17 | 595,317 | 963,186 | | 2023 | 8,814,357 | 4,044,522 | 2,564,099 | 1,807,408 | 219.31 | 206.20 | 553,700 | 914,691 | | 2022 | 11,040,183 | 33,126,771 | 2,460,082 | 5,665,458 | 235.61 | 171.54 | 553,674 | 889,529 | | TP | 191,218 | 1,551,299 | 90,194 | 310,262 | 150.03 | 203.31 | 89,610 | 159,613 | | 2021 | 8,908,536 | 17,552,877 | 2,219,359 | 3,628,330 | 142.24 | 208.37 | 583,791 | 932,458 |
Pay versus Performance Table
| (1) Refers to the following periods: (a) for 2024, our fiscal year ended June 30, 2024; (b) for 2023, our fiscal year ended June 30, 2023; (c) for 2022, our fiscal year ended June 30, 2022; (d) for TP or Transition Period, the two-month transition period from May 1, 2021 to June 30, 2021; and (e) for 2021, our fiscal year ended April 30, 2021. On June 9, 2021, the Board of Directors approved a change of the Company’s fiscal year end from April 30 to June 30, resulting in the two-month Transition Period. References to years in the tables below refer to each of these periods, including the Transition Period. |
Pay versus Performance Table
| (2) Reflects compensation amounts reported in the Summary Compensation Table for our President and CEO (our principal executive officer or “PEO”), Jeffrey J. Jones II, for the respective periods shown. |
Pay versus Performance Table
| (3) Represents the amount of “compensation actually paid” to Mr. Jones, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Jones during the applicable period. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Jones’s total compensation for each period to determine the compensation actually paid. The assumptions we used to calculate the values for stock awards included in the calculation of compensation actually paid for Mr. Jones did not differ materially from those used to calculate grant date fair value for such awards. We did not report a change in pension value for any of the periods reflected in the Summary Compensation Table for Mr. Jones as we do not have a pension plan. |
Pay versus Performance Table
| | 2024 | 2023 | 2022 | TP | 2021 | | SCT Total Compensation ($) | 9,877,088 | 8,814,357 | 11,040,183 | 191,218 | 8,908,536 | | Stock Award Values Reported in SCT for the Covered Year ($) | (7,000,047) | (6,200,037) | (6,416,674) | — | (5,500,021) | | Fair Value as of Year End for Stock Awards Granted in the Covered Year ($) | 10,260,211 | 3,931,767 | 14,091,016 | — | 11,672,617 | | Change in Fair Value of Outstanding Unvested Stock Awards from Prior Years ($) | 11,598,848 | (1,712,399) | 9,193,488 | 859,747 | 3,097,389 | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | 410,808 | (789,166) | 5,218,758 | 500,334 | (266,735) | | Fair Value of Stock Awards Forfeited during the Covered Year ($) | — | — | — | — | (358,909) | | Compensation Actually Paid ($) | 25,146,908 | 4,044,522 | 33,126,771 | 1,551,299 | 17,552,877 |
Pay versus Performance Table
| (4) Represents the average of the amounts reported for the Company’s NEOs as a group (excluding our CEO) in the “Total” column of the Summary Compensation Table in each applicable period. The names of the NEOs included for purposes of calculating the average amounts in each applicable period are as follows: (a) for 2024, Tony G. Bowen, Curtis A. Campbell, Dara S. Redler, and Kellie J. Logerwell; (b) for 2023, Tony G. Bowen, Karen A. Orosco, Dara S. Redler, and Kellie J. Logerwell; (c) for 2022, Tony G. Bowen, Karen A. Orosco, Dara S. Redler, Kellie J. Logerwell, and Thomas A. Gerke; (d) for the Transition Period, Tony G. Bowen, Karen A. Orosco, Kellie J. Logerwell, and Thomas A. Gerke; and (e) for 2021, Tony G. Bowen, Karen A. Orosco, Kellie J. Logerwell, and Thomas A. Gerke. |
Pay versus Performance Table
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 49 |
Pay versus Performance Table
| (5) Represents the average amount of “compensation actually paid” to the NEOs as a group (excluding the CEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable period. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the NEOs’ average total compensation for each period to determine the compensation actually paid. The assumptions we used to calculate the values for stock awards included in the calculation of compensation actually paid for the NEOs did not differ materially from those used to calculate grant date fair value for such awards. We did not report a change in pension value for any of the periods reflected in the Summary Compensation Table for the NEOs as we do not have a pension plan. |
Pay versus Performance Table
| | 2024 | 2023 | 2022 | TP | 2021 | | Average SCT Total Compensation ($) | 1,669,244 | 2,564,099 | 2,460,082 | 90,194 | 2,219,359 | | Average Stock Award Values Reported in SCT for the Covered Year ($) | (870,042) | (1,155,024) | (1,089,033) | — | (937,524) | | Average Fair Value as of Year End for Stock Awards Granted in the Covered Year ($) | 1,241,575 | 732,462 | 2,329,038 | — | 1,989,690 | | Average Change in Fair Value of Outstanding Unvested Stock Awards from Prior Years ($) | 1,146,991 | (254,615) | 1,253,681 | 144,793 | 501,537 | | Average Change in Fair Value of Stock Awards from Prior Years that Vested in the Covered Year ($) | 66,963 | (79,514) | 711,690 | 75,275 | (45,331) | | Average Fair Value of Stock Awards Forfeited during the Covered Year ($) | — | — | — | — | (99,401) | | Average Compensation Actually Paid ($) | 3,254,732 | 1,807,408 | 5,665,458 | 310,262 | 3,628,330 |
Pay versus Performance Table
| (6) Company 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 and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
Pay versus Performance Table
| (7) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of the period. The peer group used for this purpose is the S&P 400 Consumer Services Industry Group Index, which is the same group used by the Company for purposes of compliance with Item 201(e)(1)(ii) of Regulation S-K. |
Pay versus Performance Table
| (8) We determined EBITDA from Continuing Operations to be the most important financial performance measure used to link Company performance to CAP to our PEO and Non-PEO NEOs in fiscal year 2024 and 2023. EBITDA from Continuing Operations is a non-GAAP measure that is defined in the Compensation Discussion and Analysis section of this Proxy Statement. EBITDA from Continuing Operations may not have been the most important financial performance measure for fiscal years 2022 and 2021 or the Transition Period and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Analysis of the Information Presented in the Pay versus Performance Table
Analysis of the Information Presented in the Pay versus Performance Table While we utilize several performance measures to align executive compensation with performance, all of those measures are not presented in the Pay versus Performance table. The Company seeks to incentivize both short- and long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as defined by SEC rules) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following graphic descriptions of the relationships between information presented in the Pay versus Performance table.
Analysis of the Information Presented in the Pay versus Performance Table
| H&R Block, Inc. | Notice of Annual Meeting of Shareholders and 2024 Proxy Statement | 50 |
Analysis of the Information Presented in the Pay versus Performance Table
To facilitate clear disclosure and ease of comparison on year-over-year changes, we have excluded the Transition Period from the graphics below, but have summarized the relationships between compensation actually paid (as defined by SEC rules) and the required metrics for the Transition Period in footnotes to the graphics.
Analysis of the Information Presented in the Pay versus Performance Table
| * All figures in the above graphs are from the Pay versus Performance table above. To facilitate clear disclosure on year-over-year changes, we have excluded the Transition Period from the graphs. Given the short, two-month length of the Transition Period, and that no performance-based compensation was awarded during the period, Transition Period CAP is not correlated to TSR, Net Income, or EBITDA from Continuing Operations for the period. |
DO SHAREHOLDERS HAVE CUMULATIVE VOTING RIGHTS WITH RESPECT TO THE ELECTION OF DIRECTORS?
DO SHAREHOLDERS HAVE CUMULATIVE VOTING RIGHTS WITH RESPECT TO THE ELECTION OF DIRECTORS? No, shareholders do not have cumulative voting rights with respect to the election of directors.