DEF 14A of Paycom Software, Inc., Mar 28, 2024

DEF 14A of Paycom Software, Inc.

Filed Mar 28, 2024 · FY20230001193125-24-080589

Open on EDGAR

  1. Executive Compensation Highlights

    | (1) For purposes of this graphic, the legacy NEOs are Mrs. Faurot and Messrs. Boelte and Smith, who were NEOs in each of the last three years. Target compensation reflects base salary in effect at the end of the applicable fiscal year, target Annual Incentive Plan compensation, and the reported target value of annual equity awards, in each case presented as an average of such amounts for these three legacy NEOs. Realizable compensation reflects base salary paid, Annual Incentive Plan payout paid, and equity awards granted in the applicable year, in each case presented as an average of such amounts for these three legacy NEOs. Realizable value of equity awards is based on actual or tracking performance levels, as applicable (for performance-based restricted stock units (“PSUs”)), or based on the closing price of our Common Stock on the last trading day of 2023 (for restricted stock awards (“RSAs”) and time-based restricted stock units (“RSUs”)). PSUs granted in 2021 were earned at 15% of target; PSUs granted in 2022 paid out at 0% for the first tranche and are tracking at 0% for the second and final tranche; PSUs granted in 2023 paid out at 0% for Mrs. Faurot and Mr. Smith and 30% for Mr. Boelte (based on target achievement of one of three performance metrics applicable to Mr. Boelte’s award). |

  2. Director Skills, Experience and Background

    Director Skills, Experience and Background The biographies of the Director Nominees are as follows:

  3. Director Skills, Experience and Background

    | | RATIONALE FOR NOMINATION | | | Frederick C. Peters II LEAD INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR SINCE: 2014 AGE: 74 COMMITTEES: › Audit EDUCATION: › BA, Political Science, Amherst College | Mr. Peters contributes to the Board his extensive financial and accounting expertise, senior executive and public company board experience, risk management, industry and deep institutional knowledge, as well as first-hand knowledge of government relations and the regulatory landscape. | | | | KEY SKILLS AND QUALIFICATIONS | | | | › | Financial and Accounting – acquired experience over his 40+ years in the banking and financial sector, including serving in his current role as CEO of Community Financial Institutions Fund (formerly Bluestone Financial Institutions Fund) and previous senior leadership and board roles at Bryn Mawr Bank Corporation (NASDAQ: BMTC) and the Federal Reserve Bank of Philadelphia, where he supervised complex financial service offerings, banks and bank holding companies. | | | › | Risk Management – obtained expertise through his first-hand experience in founding two community banks, which required extensive, broad ranging oversight responsibilities, including evaluation of corporate risk; also has served in numerous executive and board leadership roles at various public and private companies. | | | › | Industry – developed extensive knowledge of the payments ecosystem, payment processing technologies, regulatory frameworks, banking sector and evolving market preferences over his more than four decades in banking and payments adjacent industries. | | | › | Government Relations/Regulatory – gained experience during his time chairing the Audit Committee for the Federal Reserve Bank of Philadelphia and while serving as a member of the Federal Reserve Bank’s Committee of Audit Chairs in Washington, D.C. | | | EXPERIENCE | | | | COMMUNITY FINANCIAL INSTITUTIONS FUND (formerly Bluestone Financial Institutions Fund), an asset management company | | | | › | Chairman and CEO (since 2015) | | | BRYN MAWR BANK CORPORATION, a community bank and wealth management organization | | | | › | Chairman, President and CEO (2001-2014) | | | › | Director (2001-2017) | | | FIRST MAIN LINE BANK | | | | › | Founder, Chairman and CEO (1995-2001) | | | NATIONAL BANK OF THE MAIN LINE | | | | › | Founder, Chairman and CEO (1985-1995) | | | Other experience: Held lending and executive positions at Philadelphia National Bank, Hamilton Bank and Industrial Valley Bank | | | | OTHER BOARD SERVICE | | | | THE FEDERAL RESERVE BANK OF PHILADELPHIA (2009–2014), AUDIT COMMITTEE CHAIR (2013-2014) | | | | FEDERAL RESERVE BANK’S COMMITTEE OF AUDIT CHAIRS (2013–2014) | | | | VARIOUS NON-PROFIT BOARDS OF DIRECTORS, including Foundation for Delaware County, Bryn Mawr Film Institute and Main Line Health | |

  4. Director Skills, Experience and Background

    | | RATIONALE FOR NOMINATION | | | Felicia Williams INDEPENDENT DIRECTOR SINCE: 2022 AGE: 58 COMMITTEES: › Audit (Chairperson) › Nominating and Corporate Governance EDUCATION: › BS, Accounting, Florida A&M University › Certified Public Accountant | Ms. Williams contributes to the Board her broad-based financial and accounting expertise, senior executive and public company board experience, risk management, and cybersecurity knowledge. The Board benefits from her experience as the Macy’s, Inc. Fellow for CEO Action for Racial Equity, where she advised on the development of sustainability policies and corporate best practices that address social injustice. | | | | KEY SKILLS AND QUALIFICATIONS | | | | › | Financial and Accounting – oversaw finance organization and operational execution in various leadership positions at Macy’s (NYSE: M), including as interim CFO; brings broad-based finance knowledge through her over 30 years of corporate financial leadership experience at multiple large-cap public companies with complex operations, including The Coca-Cola Company (NYSE: KO) and Bristol-Myers Squibb (NYSE: BMY), where she gained deep financial industry knowledge. | | | › | Risk Management – acquired expertise through her extensive first-hand experience serving in audit and enterprise risk management leadership roles, beginning at Arthur Andersen and continued through her roles at Macy’s, where she served as Senior Vice President, Finance, subsequent to her role as Enterprise Risk Officer, and was responsible for overseeing the company’s financial stability during the height of the pandemic. | | | › | Cybersecurity and Data Privacy – developed her knowledge of information security, privacy and data risk management of technologies and processes during her executive career, leading roles directly responsible for cybersecurity, IT security operations, enterprise business resiliency, and data protection practices. | | | › | Global Business – obtained through domestic and international assignments with The Coca-Cola Company, Coca-Cola Hellenic Bottling Company, and Bristol-Myers Squibb, where she gained first-hand experience in global business finance, treasury, tax, and internal control and audit operations. | | | EXPERIENCE | | | | MACY’S, INC., one of the largest American department store holding companies | | | | › | Senior Vice President, Finance (2020-2023) | | | › | Interim Chief Financial Officer (June 2020-November 2020) | | | › | Senior Vice President, Controller and Enterprise Risk Officer (2016-2020) | | | › | Senior Vice President, Finance and Risk Management (2011-2016) | | | › | Held leadership roles across key corporate finance functions, including treasury, investor relations, risk management, financial planning and analysis, and as the chief audit executive (2004-2011) | | | COCA-COLA HELLENIC BOTTLING COMPANY, a consumer packaged goods business and strategic bottling partner of The Coca-Cola Company | | | | › | Vice President, Internal Audit (2002-2004) | | | THE COCA-COLA COMPANY, a beverage company | | | | › | Group Controller and Treasury (1994-2002) | | | Other experience: Held various audit and financial roles at Bristol-Myers Squibb and Arthur Andersen & Company | | | | OTHER BOARD SERVICE | | | | ANYWHERE REAL ESTATE INC. (NYSE: HOUS) (since 2021), Chair of Audit Committee | | | | MERIDIAN BIOSCIENCE, INC. (formerly NASDAQ: VIVO) (2018-2023) | |

  5. Director Skills, Experience and Background

    | | RATIONALE FOR NOMINATION | | | Robert J. Levenson INDEPENDENT DIRECTOR SINCE: 2007 AGE: 82 COMMITTEES: › Audit › Compensation EDUCATION: › BA, Business Administration, Kent State University | Mr. Levenson contributes to the Board his extensive knowledge of the payroll and human capital management industry and scaling software technology and service companies, senior executive and public company board experience, financial and accounting expertise, strategic planning and risk management knowledge. | | | | KEY SKILLS AND QUALIFICATIONS | | | | › | Industry – acquired comprehensive knowledge of the software, services and technology industry, including payment processing technologies, through his career at companies such as Automatic Data Processing, Inc. (NASDAQ: ADP) and Medco Containment Services, which was further enhanced after he founded Lenox Capital, a private venture capital investment company focused primarily on investing in early-stage software and technology-based service companies. | | | › | Financial and Accounting – gained experience throughout his lengthy tenure at First Data Corporation, a financial services company, and in his current role in private venture capital investing; contributed to increased revenue, profitability and growth of various companies. | | | › | Risk Management – developed expertise through his experience in various senior leadership roles at ADP, Medco and First Data Corporation, where he oversaw operations and strategic planning considerations, which involved extensive risk management and mitigation. | | | › | Senior Leadership – obtained skills through serving in various senior leadership positions including as an executive officer, founder, and director at numerous companies across different industries, all of which were technology-based enterprises. | | | EXPERIENCE | | | | LENOX CAPITAL GROUP, LLC, a private venture capital investment company | | | | › | Founder and Managing Member (since 2000) | | | FIRST DATA CORPORATION, an electronic commerce and payment services company (fintech) | | | | › | Consultant (2000-2006) | | | › | Sr. Executive Vice President and Director (1992-2000) | | | MEDCO CONTAINMENT SERVICES, INC., a mail order pharmacy company later acquired by Merck & Co., Inc. | | | | › | Office of the President, Chief Operating Officer and Director (1990-1993) | | | AUTOMATIC DATA PROCESSING, INC. (“ADP”), a global provider of human resources management software and solutions | | | | › | Held several executive management positions including Group President—Employer Services, member of the Corporate Executive Committee and member of the Board of Directors (1981-1990) | | | OTHER BOARD SERVICE | | | | Served on several boards of directors of public and private companies as well as civic and philanthropic organizations, which included: ADP, First Data Corporation, Medco, Central Data Systems, Ceridian Corp, Comnet, Polyvision, Broadway & Seymour, Superior Telecom Inc., Vestcom International, Emisphere Technologies, and Elite Pharmaceuticals | |

  6. Director Skills, Experience and Background

    The biographies of the directors currently serving as Class I directors are as follows:

  7. Director Skills, Experience and Background

    | | Ms. Turney contributes to the Board her significant senior executive and public company board experience, industry expertise related to high growth and ecommerce companies and growing world-class brands, sales and marketing, risk management and financial reporting. KEY SKILLS AND QUALIFICATIONS › Senior Leadership – seasoned executive with extensive payment processing technology knowledge developed over her extensive career in the retail sector; multiple CEO positions at large retailers, including Gloria Jeans, Victoria’s Secret and Neiman Marcus Direct, have given her tremendous experience overseeing all aspects of corporate operations, including sales operations and marketing. › Marketing and Business Development – gained over three decades of experience launching and growing global brands; served in executive and board leadership roles at high growth retail companies, where she was responsible for strategic planning and brand development. › Public Company/Corporate Governance – acquired during her career serving on multiple publicly traded boards, including as chair of the compensation committee at Bread Financial Holdings (NYSE: BFH), and various executive leadership roles at large retailers. › Global Experience – acquired during her career serving in various executive leadership roles, where her expertise extended to the global retail scale; in addition to global experience gained during her time at Gloria Jeans, she has advised several international brands such as Mark and Spencer (London), Cosmo Lady (China) and Clovia (India). EXPERIENCE GLORIA JEANS, an international retailer of fashion apparel, footwear, and accessories › Chief Executive Officer (2018-2019) VICTORIA’S SECRET, a division of L Brands, Inc. › President and Chief Executive Officer (2006-2016) › President and Chief Executive Officer, Victoria’s Secret Direct (2000-2006) NEIMAN MARCUS GROUP, a luxury retailer (1989-2000) › President and Chief Executive Officer, Neiman Marcus Direct › Held various executive roles in merchandising, creative production, advertising and public relations OTHER BOARD SERVICE BREAD FINANCIAL HOLDINGS, INC. (NYSE: BFH) (since 2019), chair of compensation committee and member of nominating and governance committee ACADEMY SPORTS AND OUTDOORS, INC. (NASDAQ: ASO) (2021-2024), former member of compensation and nominating and governance committees HAPPY SOCKS AB (2018-2019) M/I HOMES, INC. (2011-2018) FULLBEAUTY BRANDS (2016-2018) NATIONWIDE CHILDREN’S HOSPITAL, INC. (2012-2018) JAY H. BAKER RETAILING INITIATIVE ADVISORY BOARD AT THE WHARTON SCHOOL, UNIVERSITY OF PENNSYLVANIA (since 2004) UNIVERSITY OF OKLAHOMA FOUNDATION INVESTMENT COMMITTEE (since 2000) | | | | | Sharen J. Turney INDEPENDENT DIRECTOR SINCE: 2021 AGE: 67 COMMITTEES: › Compensation › Nominating and Corporate Governance (Chairperson) EDUCATION: › BA, Business Education, University of Oklahoma | |

  8. Director Skills, Experience and Background

    | | Mr. Watts contributes to the Board his extensive first-hand knowledge of government relations and the evolving regulatory landscape, public company board experience and senior leadership experience. KEY SKILLS AND QUALIFICATIONS › Public Company/Corporate Governance – developed skills through his extensive experience serving on public company boards, including Dillard’s, CSX Corporation, ITC Holdings, Clear Channel Communications, Inc. and Terex Corporation. › Senior Leadership – experienced professional who served in various leadership roles in the United States House of Representatives; advised several public company boards and has over two decades of experience as Co-Founder and CEO of Watts Partners, a boutique corporate and government affairs consulting firm. › Marketing/Business Development – established a prominent consulting firm with a diverse client-base to which he provides strategic focus and program leadership; vast experience advising on business development and public affairs strategies. › Government Relations/Regulatory – acquired during his time as an elected official, first on the Oklahoma Corporation Commission and then during his eight years in Congress, where he served on the United States House Committees on Armed Services, Financial Services, and Transportation and Infrastructure. EXPERIENCE WATTS PARTNERS, a boutique corporate and government affairs consulting firm › Co-Founder, President and Chief Executive Officer (since 2003) THE UNITED STATES HOUSE OF REPRESENTATIVES › Representative for the State of Oklahoma (1995-2003) › Chairman of the Republican Conference (1999-2003) › Served on the United States House Committees on Armed Services, Financial Services, and Transportation and Infrastructure (1995-2003) › Sponsored and led the establishment of the Committee on Homeland Security (2002) OTHER BOARD SERVICE DILLARD’S, INC. (NYSE: DDS) (since 2009; 2003-2008), member of audit committee CSX CORPORATION (2011-2014) ITC HOLDINGS CORP. (2011-2014) CLEAR CHANNEL COMMUNICATIONS, INC. (2003-2007) TEREX CORPORATION (2003-2006) | | | | | J.C. Watts, Jr. INDEPENDENT DIRECTOR SINCE: 2016 AGE: 66 COMMITTEES: › Compensation (Chairperson) › Nominating and Corporate Governance EDUCATION: › BA, Journalism and Public Relations, University of Oklahoma | |

  9. Director Skills, Experience and Background

    The biographies of the directors currently serving as Class III directors are as follows:

  10. Director Skills, Experience and Background

    | | Mr. Duques contributes to the Board his extensive industry, senior executive and public company board experience, risk management and financial and accounting expertise. KEY SKILLS AND QUALIFICATIONS › Industry – obtained comprehensive knowledge of payment processing software and technology through his 30-year career in the financial services industry; while at First Data Corporation, helped develop and grow the company into one of the largest processors of point of sale credit card transactions at the time. › Risk Management – acquired significant expertise through his decades of leadership experience through overseeing complex organizations with global presence, including business operations, enterprise risk management and strategic planning. › Financial and Accounting – developed proficiency through his career in executive and board leadership roles at financial services companies; as CEO of First Data Corporation, oversaw its acquisition by KKR which, at $29 billion, was one of the largest contemporary leveraged buyouts of a technology company at the time. › Public Company/Corporate Governance – gained vital governance experience by serving on the board of directors of Unisys Corporation for over a decade, where he acted as Chairman for two years. EXPERIENCE FIRST DATA CORPORATION, an electronic commerce and payment services company › Chairman and Chief Executive Officer (1992-2002; 2005-2007) AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., the predecessor of First Data Corporation › President and Chief Executive Officer, Database Services Group (1987-1992) AUTOMATIC DATA PROCESSING, INC., a global provider of human resources management software and solutions › Group President Financial Services and Director (1984-1987) › Advanced through roles of increasing responsibility (1973-1984) OTHER BOARD SERVICE UNISYS CORPORATION (1998-2014), Chairman (2006-2008) SUNGARD CORP. (2003-2005) CHECKFREE CORPORATION (2000-2004) MASTERCARD (1997-1999) THE GEORGE WASHINGTON UNIVERSITY BOARD OF TRUSTEES (1998-2008) | | | | | Henry C. Duques INDEPENDENT DIRECTOR SINCE: 2016 AGE: 80 COMMITTEES: › Audit › Compensation EDUCATION: › BA, Business Administration, The George Washington University › MBA, The George Washington University | |

  11. Director Skills, Experience and Background

    | | Mr. Richison contributes to the Board his extensive industry and cybersecurity knowledge, expertise in data automation and in the SaaS sector, and senior executive and business development experience. KEY SKILLS AND QUALIFICATIONS › Senior Leadership – as the Co-Chief Executive Officer, President and Chairman of the Board of Paycom, he has garnered vast experience guiding Paycom from startup to a large publicly traded company; has overseen Paycom’s strategic vision and direction, contributing to its reputation as an innovator; leadership is marked by a focus on service excellence, technology development, and employee culture. › Industry – as the founder of Paycom, he brings a comprehensive knowledge of the software, payments and technology industry; having started his career at a national payroll and HR company and a regional payroll company, Mr. Richison recognized opportunities to enhance efficiency of payroll and talent management operations and founded Paycom, which rapidly became one the first companies to offer cloud-based payroll service with a range of complementary HCM applications. › Cybersecurity – obtained extensive knowledge of the technologies and processes resulting in the establishment of in-depth industry-leading data privacy and cybersecurity standards and technologies at Paycom needed to protect the Company and client data. › Marketing/Business Development – under his leadership, Paycom has added tens of thousands of clients through elevating the Paycom brand, quality client engagement and providing world-class service. EXPERIENCE PAYCOM › Co-Chief Executive Officer, President and Chairman (since February 2024) › Chief Executive Officer, President and Chairman (2016-2024) › Chief Executive Officer and President (1998-2016) | | | | | Chad Richison CO-CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN CHAIRMAN SINCE: 2016 DIRECTOR SINCE: 1998 AGE: 53 EDUCATION: › BA, Mass Communications—Journalism, University of Central Oklahoma | |

  12. Director Nomination Procedures

    Director Nomination Procedures

  13. Director Nomination Procedures

    | 1. Assess Need The Nominating and Corporate Governance Committee annually evaluates the composition of our Board of Directors, including the directors’ array of experiences, skills, and backgrounds, to ensure the Board can effectively manage its responsibilities. When a position is open on the Board of Directors, or the Nominating and Corporate Governance Committee determines that a director with certain skills or background would enhance our Board’s effectiveness, the Nominating and Corporate Governance Committee undertakes a process to identify and recommend qualified candidates to the Board. | | | | 2. Identify Candidates The Nominating and Corporate Governance Committee oversees the search process, which may include recommendations from, and discussions with, our other independent directors and senior members of management, suggestions from our stockholders, and recommendations from an independent search firm. As part of the search process, the Nominating and Corporate Governance Committee seeks to include candidates representing diversity in race, ethnicity, gender, age, skills and professional experiences that enhance the quality of deliberations and decisions of the Board within the context of the needs of the Board at any given point in time. | | | | 3. Evaluate Fit The Nominating and Corporate Governance Committee screens all potential candidates for their independence, skills, qualifications, and potential conflicts. Candidates are evaluated in the same manner regardless of the source of recommendation. Qualifying candidates are then interviewed by the Chairman of the Board of Directors, our Lead Independent Director, our Nominating and Corporate Governance Committee chairperson and members of the senior management team. | | | | 4. Recommend to the Board of Directors The Nominating and Corporate Governance Committee narrows candidates to a final list and interviews are scheduled with other directors as appropriate. The Nominating and Corporate Governance Committee meets to select a candidate to recommend to the full Board for nomination or appointment. | | | | Results Our Board of Directors has appointed two new directors over the past three years, Ms. Turney and Ms. Williams, both of whom have brought valuable skills, experiences, and perspectives to our Board of Directors. Ms. Turney, who joined the Board of Directors in 2021, has extensive board, executive leadership and management experience, particularly in digital/e-commerce as well as global operations. Our most recent addition, Ms. Williams, joined the Board of Directors in 2022 and brings over three decades of corporate financial leadership, audit, and enterprise risk management experience. |

  14. Director Nomination Procedures

    The Nominating and Corporate Governance Committee has adopted a formal policy regarding stockholder nominees. The Nominating and Corporate Governance Committee will consider nomination recommendations submitted by stockholders entitled to vote generally in the election of directors. The Nominating and Corporate Governance Committee has not established a minimum number of shares of Common Stock a stockholder must own or required length of ownership to recommend a director candidate, but the committee will take into account the size and duration of a recommending stockholder’s ownership interest, as well as whether the stockholder intends to maintain its ownership interest in Paycom. The Nominating and Corporate Governance Committee will consider only recommendations of nominees who satisfy its minimum candidate qualifications, including that a director must represent the interests of all stockholders and not just one particular stockholder group or other constituency. The Nominating and Corporate Governance Committee will consider only recommendations submitted in compliance with our Amended and Restated Bylaws and any other procedural requirements disclosed in this proxy statement.

  15. Director Compensation

    Director Compensation

  16. Overview and Philosophy

    Overview and Philosophy The Board of Directors believes that each director who is not employed by us (each, a “non-employee director”) should be compensated through a mix of cash and equity-based compensation, which is awarded in the form of restricted stock. The Compensation Committee, consisting entirely of independent directors, has primary responsibility for reviewing and considering any revisions to director compensation. Periodically, the Compensation Committee has reviewed director compensation with assistance from its independent compensation consultant, including conducting benchmarking against the Company’s peer group to help assess the appropriateness and competitiveness of our non-employee director compensation program. The Board of Directors reviews the Compensation Committee’s recommendations, discussing those recommendations among themselves, and determines the amount of director compensation. Historically, our philosophy is to align target total non-employee director compensation, including cash and equity, to be in a competitive range of our peer group.

  17. Director Compensation in 2023

    Director Compensation in 2023 In 2023, the compensation package for non-employee directors consisted of (i) annual compensation for service as a director and as a member or chairperson of any committee(s), payable in cash in four quarterly installments (the “Director Cash Compensation”), and (ii) an award under the Paycom Software, Inc. 2023 Long-Term Incentive Plan (the “2023 LTIP”) of restricted stock with an aggregate fair market value of $235,000 (based on the closing price of the Common Stock on the date of grant, but rounded down to the nearest whole share to avoid the issuance of fractional shares) (the “Director Equity Compensation”). All directors are also entitled to reimbursement for their reasonable out-of-pocket expenditures incurred in connection with their service. The Director Cash Compensation is summarized below.

  18. Director Compensation in 2023

    | Recipient(s) | 2023 Annual Cash Compensation ($) | | Non-employee directors | 75,000 | | Lead Independent Director | 25,000 | | Audit Committee chairperson | 30,000 | | Audit Committee members (excluding chairperson) | 15,000 | | Compensation Committee chairperson | 23,000 | | Compensation Committee members (excluding chairperson) | 13,000 | | Nominating and Corporate Governance Committee chairperson | 15,000 | | Nominating and Corporate Governance Committee members (excluding chairperson) | 10,000 |

  19. Director Compensation in 2023

    With respect to Director Equity Compensation, the shares of restricted stock were granted on the date of the 2023 annual meeting of stockholders and are scheduled to cliff-vest on the seventh (7th) day following the first (1st) anniversary of the 2023 annual meeting, provided that the non-employee director is providing services to the Company through the applicable vesting date. Any unvested Director Equity Compensation will be forfeited in the event that the non-employee director’s service to the Company terminates prior to the vesting date, unless (i) such director resigns concurrently with the annual meeting of stockholders immediately prior to the scheduled vesting date, (ii) such annual meeting is held not more than thirty (30) days prior to the scheduled vesting date and (iii) the resigning director continues to serve on the Board of Directors through the date of such annual meeting. In the event that a new non-employee director is appointed to the Board of Directors other than at an annual meeting of stockholders (a “Mid-Term Director”), such Mid-Term Director is entitled to receive (i) the Director Cash Compensation beginning on the first quarterly payment date following his or her appointment and (ii) a partial award of the Director Equity Compensation on the date of his or her appointment, with the aggregate fair market value of such award to be determined based on the timing of such Mid-Term Director’s appointment in relation to the quarterly payment dates for the Director Cash Compensation. The table below provides information regarding compensation paid to each non-employee director during 2023. Because Mr. Richison is an employee of the Company, he did not receive additional compensation for his service as a director in 2023 (including for his service as Chairman of the Board of Directors). Mr. Clark was appointed as Chief Administrative Officer effective December 4, 2023. Immediately prior to assuming his duties as Chief Administrative Officer, Mr. Clark resigned from the Board of Directors and committees on which he served. The table below reflects compensation paid to Mr. Clark for his service as a non-employee director only. See “Compensation of Executive Officers—Summary Compensation Table” for additional information regarding the compensation paid to Messrs. Richison and Clark during 2023. None of our executive officers had a role in determining or recommending the amount or form of non-employee director compensation, other than Mr. Richison in his capacity as a member of the Board of Directors and Mr. Clark in his capacity as a former member of the Board of Directors.

  20. Director Compensation in 2023

    | | Fees Earned or Paid in Cash ($) | Stock Awards(1)(2) ($) | Total ($) | | Current Non-Employee Directors | | | | | Henry C. Duques | 96,500(3) | 234,767 | 331,267 | | Robert J. Levenson | 98,000(4) | 234,767 | 332,767 | | Frederick C. Peters II | 124,000(5) | 234,767 | 358,767 | | Sharen J. Turney | 93,000(6) | 234,767 | 327,767 | | J.C. Watts, Jr. | 100,500(7) | 234,767 | 335,267 | | Felicia Williams | 97,500(8) | 234,767 | 332,267 | | Former Non-Employee Director | | | | | Jason D. Clark | 100,000(9) | 234,767 | 334,767 |

  21. Director Compensation in 2023

    | (1) Amounts shown represent the aggregate grant date fair value of Director Equity Compensation, computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. A discussion of the assumptions used in the calculation of these amounts is included in Note 11, “Stockholders’ Equity and Stock-Based Compensation” in the annual consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) filed with the SEC on February 15, 2024. For purposes of the Director Equity Compensation, we did not issue any fractional shares and, as a result, the aggregate grant date fair value of each director’s award is slightly less than $235,000. |

  22. Director Compensation in 2023

    | (2) As of December 31, 2023, each of Mses. Turney and Williams and each of Messrs. Duques, Levenson, Peters and Watts held 789 unvested shares of restricted stock. As of December 31, 2023, Mr. Clark held 40,789 unvested shares of restricted stock, including 40,000 shares issued in connection with his appointment as Chief Administrative Officer. |

  23. Director Compensation in 2023

    | (3) Represents the aggregate Director Cash Compensation paid to Mr. Duques for his service as (i) a director and member of the Audit Committee for the entire year, (ii) a member of the Nominating and Corporate Governance Committee from January 2023 to May 2023 and (iii) a member of the Compensation Committee from May 2023 through the end of the year. |

  24. Director Compensation in 2023

    | (4) Represents the aggregate Director Cash Compensation paid to Mr. Levenson for his service as a director and member of the Audit and Compensation Committees. |

  25. Director Compensation in 2023

    | (5) Represents the aggregate Director Cash Compensation paid to Mr. Peters for his service as (i) a director and Lead Independent Director for the entire year, (ii) a member of the Compensation Committee from January 2023 to April 2023, (iii) chairperson of the Audit Committee and a member of the Nominating and Corporate Governance Committee from January 2023 to May 2023 and (iv) a member of the Audit Committee from May 2023 through the end of the year. |

  26. Director Compensation in 2023

    | (6) Represents the aggregate Director Cash Compensation paid to Ms. Turney for her service a director and a member of the Compensation and Nominating and Corporate Governance Committees. |

  27. Director Compensation in 2023

    | (7) Represents the aggregate Director Cash Compensation paid to Mr. Watts for his service as (i) a director and chairperson of the Compensation Committee for the entire year and (ii) a member of the Nominating and Corporate Governance Committee from May 2023 through the end of the year. |

  28. Director Compensation in 2023

    | (8) Represents the aggregate Director Cash Compensation paid to Ms. Williams for her service as (i) a director for the entire year, (ii) a member of the Audit Committee from January 2023 to May 2023, (iii) chairperson of the Audit Committee from May 2023 through the end of the year and (iv) a member of the Nominating and Corporate Governance Committee from July 2023 through the end of the year. |

  29. Director Compensation in 2023

    | (9) Represents the aggregate Director Cash Compensation paid to Mr. Clark for his service as a director, member of the Audit Committee and chairperson of the Nominating and Corporate Governance Committee until December 4, 2023. |

  30. Vote Required

    | › | Enhanced value of 2023 equity incentives to reinforce leadership team’s accountability for performance results and create immediate further alignment with the interests of our stockholders; and |

  31. Vote Required

    | › | Allocated the majority of equity incentives to time-based equity awards to support retention, considering the limited value of outstanding equity awards that could have been easily matched by our competitors or companies in adjacent industries, balanced by a backloaded vesting schedule through the end of the four-year vesting term. |

  32. Vote Required

    *Mr. Thomas was appointed Co-Chief Executive Officer effective February 7, 2024. Since the beginning of 2023, Mr. Thomas served as Vice President of Operations (until March 2023), Senior Executive Vice President of Operations (March 2023 to September 2023) and Chief Operating Officer (September 2023 to February 2024). For purposes of this Compensation Discussion and Analysis, references to the “Committee” mean the Compensation Committee.

  33. Executive Summary

    | › | 2021 PSUs were earned at 15% of target, which, based on the closing price of our Common Stock on December 29, 2023, represents less than 8% of the initial target grant value, due to the change in market value of our Common Stock over the performance period. The payout was driven by zero payout under the second tranche of the 2021 PSUs (75% weighting, tied to three-year relative TSR performance), and a 60% payout on the first tranche (25% weighting, tied to two-year relative TSR performance). |

  34. Executive Summary

    | › | The first tranche of the 2022 PSUs (25% weighting, tied to two-year relative TSR performance) was earned at 0% of target. Based on our relative TSR performance since the beginning of 2022, the current expected payout for the second tranche of the 2022 PSUs is 0% (75% weighting, tied to three-year relative TSR performance). |

  35. Executive Summary

    | (1) For purposes of this graphic, the legacy NEOs are Mrs. Faurot and Messrs. Boelte and Smith, who were named executive officers in each of the last three years. Target compensation reflects base salary in effect at the end of the applicable fiscal year, target Annual Incentive Plan compensation, and the reported target value of annual equity awards, in each case presented as an average of such amounts for these three legacy NEOs. Realizable compensation reflects base salary paid, Annual Incentive Plan payout paid, and equity awards granted in the applicable year, in each case presented as an average of such amounts for these three legacy NEOs. Realizable value of equity awards is based on actual or tracking performance levels, as applicable (for PSUs), or based on the closing price of our Common Stock on the last trading day of 2023 (for RSAs and RSUs). 2021 PSUs were earned at 15% of target; 2022 PSUs paid out at 0% for the first tranche and are tracking at 0% for the second and final tranche; 2023 PSUs paid out at 0% for Mrs. Faurot and Mr. Smith and 30% for Mr. Boelte (based on target achievement of one of three performance metrics applicable to Mr. Boelte’s award). |

  36. Executive Summary

    Our 2023 incentive program was designed to support continuity of our leadership team, further align interests with our stockholders and incentivize performance. The incentive opportunities and structure of the compensation program approved for 2023 were intended to promote leadership continuity and incentivize and retain NEOs who are essential to our success and the execution of our strategy. Among several one-time changes, 2023 equity incentives were granted predominantly in the form of time-based awards with vesting backloaded toward the fourth year of the vesting period. In most cases, PSUs granted in 2023 (“2023 PSUs”) were forfeited in full based on actual performance results that were below the target performance level, underscoring the rigor of our performance targets. These awards were intended to promote the continuity of our leadership team, increase the retentive value of outstanding awards, foster alignment with our stockholders and focus executives on driving success on a number of strategic initiatives that are instrumental to our ability to create long-term stockholder value. Equity incentive opportunities and structure evolved in 2024. The Committee approved 2024 target equity incentive opportunities for our NEOs (excluding Mr. Richison) with an equal split of performance- and time-based equity awards. The 2024 equity incentive program structure is intended to more closely align with peer group practices and preferences of our stockholders. The table below sets forth the components of 2024 total target compensation for each NEO.

  37. Executive Summary

    | Name | Current Base Salary(1) ($) | Annual Incentive | | PSUs ($, at target) | RSUs ($) | Total Target Compensation ($) | | | | Target (%) | Target ($) | | | | | Chad Richison | 800,000 | 100% | 800,000 | — | — | 1,600,000 | | Chris G. Thomas | 800,000 | 100% | 800,000 | 1,333,333 | 1,333,333 | 4,266,666 | | Craig E. Boelte | 524,097 | 100% | 524,097 | 1,333,333 | 1,333,333 | 3,714,860 | | Holly Faurot | 497,190 | 100% | 497,190 | 833,333 | 833,333 | 2,661,046 | | Bradley S. Smith | 511,228 | 100% | 511,228 | 833,333 | 833,333 | 2,689,122 | | Jason D. Clark | 575,000 | 100% | 575,000 | 500,000 | 500,000 | 2,150,000 |

  38. 2023 Compensation Program Overview

    | Long-Term Incentive Program Design Element | Rationale for Change | | Transitioned PSU performance metrics to Company financial performance measures | In response to certain stockholders’ preference for the equity incentive program to be based on financial performance measures, the Committee reviewed a range of potential metrics for the 2023 incentive program and determined that revenue, adjusted EBITDA, annual revenue retention rate and stock price (measured based on a trailing weighted average price, which we refer to as “VWAP value”) were the key financial performance measures most closely correlated with our ability to deliver sustained stockholder value creation. Also, these metrics are widely used by our investors to measure our performance. The performance metric selection for each NEO was tailored to his or her area of responsibility and ability to directly influence our financial performance outcomes. The Committee determined it was appropriate to use similar Company financial performance metrics in the cash and equity incentive programs to emphasize the importance of maintaining our revenue growth rate and profitability in 2023. Due to significant challenges in setting reliable long-term financial goals in light of the highly volatile macroeconomic environment, the Committee approved a one-year performance period for the 2023 PSUs to maintain the rigor and effectiveness of our program and encourage “stretch” performance in 2023, eliminating the possibility of overperformance in one year offsetting underperformance in another year during a longer-term performance cycle. The Committee will continue to review market conditions and evaluate whether longer performance periods for future equity awards would be appropriate. Payouts for the 2023 PSUs were capped at target to reflect the rigor of our compensation program and to avoid outsized compensation delivery. Despite our strong financial performance in 2023, we did not achieve any of the 2023 PSU performance targets, with the exception of the adjusted EBITDA target applicable to a portion (30%) of Mr. Boelte’s award. As a result, the 2023 PSUs granted to Mrs. Faurot and Messrs. Smith and Thomas vested at 0% and the 2023 PSUs granted to Mr. Boelte vested at 30% of total target value. | | Allocated majority of equity incentive opportunities to RSAs with extended four-year vesting period and back- loaded vesting schedule | Providing the majority of 2023 equity incentives in the form of time-based awards fosters an immediate alignment of executives with our stockholders and incentivizes sustained long-term stockholder value creation. In making this determination, the Committee was particularly aware of the highly competitive talent market for experienced and accomplished executives in the SaaS industry. A majority of the 2023 equity incentive opportunities were delivered in the form of RSAs (69-78% of total 2023 equity incentive opportunities, depending on the NEO role) with 45-48% of RSAs vesting in the fourth year of the vesting period, subject to continued service with the Company through the vesting date. | | Approved increased grant values for 2023 awards | Award values for 2023 were calibrated to incentivize sustained stockholder value creation and to support retention. The Committee considers each of our NEOs to be critical to our success and execution of our growth strategy. The 2023 equity incentives were designed to stabilize the executive leadership team, considering robust financial performance results delivered consistently over the last three fiscal years, and to motivate achievement of our long-term strategic priorities that are at the core of our stockholder value creation. Mr. Richison was not eligible and did not receive any equity incentives in 2023. |

  39. 2023 Compensation Program Overview

    The Committee approved 2024 target equity incentive opportunities for our NEOs (other than Mr. Richison) with an equal split of performance-and time-based equity awards. The 2024 equity incentive program structure is intended to more closely align with peer group practices and preferences of our stockholders. The Committee will continue to evaluate the appropriate compensation program design for future years, with stockholder input being one of the critical elements in the Committee’s deliberations, to ensure the compensation program is aligned with our stockholders’ preferences, reflects market benchmarks and maintains our ability to attract, retain and incentivize the top industry talent to support our long-term growth strategy.

  40. 2023 Stockholder Outreach

    | Stockholder Feedback | Committee’s Responsiveness Actions | | We heard a range of diverse perspectives and gained valuable insights from our stockholders, which were conveyed to the full Board of Directors and relevant committees for further discussion and consideration. The majority of stockholders who engaged with us were generally supportive of our executive compensation approach. Those stockholders who voted against the 2023 say-on-pay proposal, while being generally complimentary of our approach to the annual compensation program, continued to emphasize ongoing concerns related to the magnitude of the 2020 CEO Performance Award, despite the low likelihood of the award vesting. Several stockholders also expressed a preference for diversified Company financial performance metrics in the equity incentive program to avoid overreliance on the relative TSR metric. | As described in more detail above, the Committee adopted a diversified set of Company financial performance metrics for the 2023 PSU program to incentivize continued growth in revenue, annual revenue retention rate, adjusted EBITDA and stock price. The Committee believes inclusion of these metrics will reinforce the executive team’s focus on executing on near-term financial goals critical to our long-term success and stockholder value creation. Related Developments In February 2024, the change in Mr. Richison’s position from Chief Executive Officer to Co-Chief Executive Officer triggered the forfeiture of the 2020 CEO Performance Award in accordance with its terms. The Committee believes forfeiture of the 2020 CEO Performance Award is in alignment with stockholder feedback. |

  41. Role of Compensation Consultant

    Role of Compensation Consultant In 2023, the Committee continued its engagement of Meridian Compensation Partners, LLC (“Meridian”) to provide input, analysis, and advice about our compensation programs for executives and non-employee directors, including compensation philosophy and design, peer group data, competitive positioning and equity compensation practices. The Committee selected Meridian as its compensation consultant based on, among other things, Meridian’s reputation and substantial insight and experience with executive compensation programs in our industry. Meridian reports directly to the Committee and did not perform work for Paycom in 2023 except as directed by the Committee. After reviewing and considering the factors set out by the applicable rules and regulations of the SEC and NYSE regarding the independence of compensation advisors, the Committee determined that Meridian is independent and its work in 2023 did not raise any conflicts of interest.

  42. Compensation Mix

    Compensation Mix We do not have a formal policy or target for the allocation between cash and non-cash compensation or for the allocation between short-term and long-term incentive compensation for our NEOs. Rather, the Committee relies on each Committee member’s experience and peer group and industry benchmarks provided by the Committee’s independent compensation consultant, to determine the appropriate level and mix of compensation. Ultimately, our objective is to provide our NEOs with reasonable, competitive base salaries, time-based equity incentives to support retention, and the opportunity to earn additional compensation through performance-based incentives, which are designed to encourage achievement of pre-established performance target levels.

  43. Timing

    Timing At least annually, the Committee reviews and evaluates each NEO’s base salary. Based on historical practices and our performance review cycle for all employees, salary increases, if any, are typically effective as of July 1st of a given year. With respect to cash bonuses, the Annual Incentive Plan requires that the Committee set performance goals within the first 90 days of a performance period. Following the end of a performance period and our receipt of the independent auditor’s report with respect to financial statements for the applicable fiscal year, the Committee must certify the extent to which the performance goals were achieved as well as the calculation and determination of the incentive compensation to be paid to each participant under the Annual Incentive Plan. With respect to equity compensation, the Committee determines whether and when to grant awards to NEOs based on its evaluation of the various factors discussed under “—Equity Incentive Compensation—Overview” below.

  44. Peer Group Data

    Peer Group Data The Committee uses peer group data as a point of reference for designing our compensation programs and setting compensation levels. In October 2022, the Committee reviewed comparative executive compensation data from a group of companies identified based on the selection criteria described below. The Committee does not use peer group data as a determinative factor, but rather an external check to verify our executive compensation programs are reasonable and competitive. In developing the primary peer group, the Committee sought to include U.S.-headquartered companies that, in the Committee’s view, are similar to the Company in terms of size, industry focus and level of operational and organizational complexity. In particular, the Committee targeted application software companies with comparable SaaS business models and business software applications. The peer group companies were also identified based on revenue and market capitalization. Potential peer group companies were evaluated based on the most recent data available as of July 2022. Companies that did not satisfy all of the selection criteria were nonetheless eligible to be included in the peer group based on near alignment across all factors. With the assistance of its independent compensation consultant, the Committee ultimately identified the primary peer group set forth below. The primary peer group includes 19 software companies with median revenues of $1.4 billion and median market capitalization of $11.4 billion. For the 2023 peer group, Datadog was added as a software company of similar size and complexity to our other peers, and no companies were removed from the group.

  45. Peer Group Data

    | Peer Companies Considered For 2023 Compensation | | | ANSYS, Inc. | Guidewire Software, Inc. | | Aspen Technology, Inc. | HubSpot, Inc. | | Blackbaud, Inc. | Okta, Inc. | | Ceridian HCM Holding Inc. | Paylocity Holding Corporation | | CoStar Group, Inc. | RingCentral, Inc. | | Coupa Software Incorporated(1) | Splunk Inc. | | Datadog, Inc. (New) | The Trade Desk, Inc. | | DocuSign, Inc. | Tyler Technologies, Inc. | | Ebix, Inc. | Zendesk, Inc.(2) | | Fair Isaac Corporation | | | (1) Coupa Software was acquired and became a private company in February 2023. (2) Zendesk was acquired and became a private company in November 2022. | |

  46. Peer Group Data

    We have a limited number of direct, public company business peers with a similar growth trajectory. As we continue to grow, the Committee remains focused on providing market-competitive and stockholder-aligned compensation programs that are appropriate for the size and strategy of the business. To assist with this goal, the Committee also reviewed data from larger companies in our industry, both in terms of market capitalization and revenue, to help the Committee understand how pay design and structure, as well as quantum of pay opportunity, may change as we continue to grow. The Committee reviewed trends in compensation structure and formulation among members of these reference groups as part of its overall executive compensation evaluation.

  47. Annual Incentive Plan

    Annual Incentive Plan

  48. Overview

    | › providing certain employees, including the NEOs, with incentive compensation that is tied to the achievement of pre-established, objective performance goals; › identifying and rewarding superior performance and providing competitive compensation to attract, motivate and retain employees who have outstanding skills and abilities; and › fostering accountability and teamwork throughout Paycom. |

  49. Overview

    The Annual Incentive Plan is administered by the Committee. For each performance period, the Committee must approve the participants eligible to receive annual incentive awards and select the performance metrics, goals, and corresponding payout levels for each participant. Payouts under the Annual Incentive Plan are made based upon achievement of performance goals (consisting of individual performance goals, business unit performance goals, and/or company performance goals) relating to one or more “performance criteria,” such as revenues, adjusted EBITDA or annual revenue retention rate.

  50. 2023 Annual Incentive Targets

    2023 Annual Incentive Targets For 2023, the Committee determined that each eligible NEO would have a target annual incentive opportunity equal to 100% of his or her base salary. Target annual incentive opportunities for 2023 are set forth in the table below:

  51. 2023 Annual Incentive Targets

    | Name(1) | Target Annual Incentive (% of Base Salary) | Target Annual Incentive ($) | | Chad Richison | 100% | 800,184 | | Chris G. Thomas | 100% | 400,000 | | Craig E. Boelte | 100% | 503,939 | | Holly Faurot | 100% | 478,067 | | Bradley S. Smith | 100% | 491,566 |

  52. 2023 Annual Incentive Targets

    | (1) Jason D. Clark joined the executive team in December 2023 and thus was not eligible to participate in the Annual Incentive Plan for 2023. Mr. Clark will be eligible to participate beginning in 2024, with a target bonus equal to 100% of his base salary. |

  53. 2023 Performance Criteria

    2023 Performance Criteria As in prior years, the Committee determined that customizing a mix of performance metrics for each of the participating NEOs based on his or her responsibilities and areas of direct impact was the most effective way to incentivize outperformance. The metrics, performance targets, and achievement levels for each participating NEO are set forth below. Richison, Boelte, and Faurot. For the 2023 performance period, the Annual Incentive Plan awards granted to Messrs. Richison and Boelte and Mrs. Faurot were based on our achievement of revenue targets, but subject to downward adjustment if our adjusted EBITDA fell below a specified target. The Committee selected these metrics because it believes top line growth and profitability are critical short-term measures of our success and key to long-term stockholder value creation. The table below sets forth (i) the revenue amounts and growth rates that were established as the threshold, target and maximum achievement levels for the 2023 performance period and (ii) the payout percentage (as a percent of target) at each achievement level. Generally, a straight-line interpolation would be applied on the change in performance between threshold and target achievement or between target and maximum achievement. Additionally, as in prior years, the revenue payout percentage was subject to downward adjustment by five percentage points for every $2.0 million (whole) that our adjusted EBITDA for the year fell below $701 million, provided that the revenue payout percentage could not be reduced by more than 75.0%.

  54. 2023 Performance Criteria

    | Achievement Level | Performance Goal ($MM) | Growth (2023 vs. 2022) | Payout Percentage (% of Target) | | Revenue Performance (100%) | | | | | Threshold | 1,530.9 | 11.3% | 0% | | Target | 1,701.0 | 23.7% | 100% | | Maximum | 1,717.0 | 24.9% | 200% | | Adjusted EBITDA(1) Performance (Modifier) | | | | | Target | 701.0 | 20.9% | N/A | | Potential Deduction: | -5.0% payout for every $2.0MM below target performance, up to -75% | | |

  55. 2023 Performance Criteria

    The established financial performance goals were rigorous and, even at target achievement level, required significant growth from actual performance in the prior year. In establishing Annual Incentive Plan performance goals for Mrs. Faurot and Messrs. Richison and Boelte for the 2023 performance period, the Committee set the goals for threshold achievement above 2022 actual results, requiring greater than 11.3% revenue growth in order to achieve any payouts. The revenue and adjusted EBITDA performance targets represented significant “stretch” goals, requiring 23.7% revenue growth and 20.9% adjusted EBITDA growth to achieve target payouts. The goals established for the target achievement level were informed by our annual budgeting process, among other factors. In establishing the total revenue goal and revenue payout percentage for the maximum achievement level, the Committee took into consideration a significant “stretch” level of performance already required to achieve the target as well as the difficulty in achieving results above the “stretch” target level. Smith and Thomas. For the 2023 performance period, the Annual Incentive Plan awards granted to Messrs. Smith and Thomas were based on our achievement of annual revenue retention rate targets, which measure our success at retaining clients, a key determinant of our long-term success. The Committee determined that annual revenue retention rate continued to be an appropriate metric for Messrs. Smith and Thomas because (i) as Chief Information Officer, Mr. Smith helps drive our product and technological innovation, supporting client satisfaction as measured by our annual revenue retention rate, and (ii) in his previous role as our Chief Operating Officer, Mr. Thomas was directly responsible for all aspects of our client experience, which drives our annual revenue retention rate. For Messrs. Smith and Thomas, the table below sets forth (i) annual revenue retention rates that were established as the threshold, target and maximum achievement levels for the 2023 performance period and (ii) the payout percentage (as a percent of target) at each achievement level. The payout percentage would increase 25% for each 1% (whole) increase in the annual revenue retention rate above target, up to 200% at the maximum achievement level. There was no increase in the payout percentage for increases in the annual revenue retention rate in increments of less than 1%.

  56. 2023 Performance Criteria

    | Achievement Level | Annual Revenue Retention Rate Performance Goal | Payout Percentage (% of Target) | | Threshold | 92% | 0% | | Target | 93% | 100% | | Maximum | 97% | 200% |

  57. 2023 Annual Incentive Plan Payouts

    2023 Annual Incentive Plan Payouts The tables below set forth our actual achievement of Company financial performance metrics for the 2023 performance period and the resulting bonus payouts for our NEOs. We paid cash bonuses under the Annual Incentive Plan for the 2023 performance period in the first quarter of 2024.

  58. 2023 Annual Incentive Plan Payouts

    | Performance Metric | Target | Actual Achievement | Actual Achievement (% of Target) | Payout Percentage | | Revenue | $1,701.0 MM | $1,693.7 MM | 99.6% | 95.7% | | Adjusted EBITDA | $701.0 MM | $719.3 MM | 102.6% | N/A(1) | | Annual Revenue Retention Rate | 93% | 90% | — | 0% |

  59. 2023 Annual Incentive Plan Payouts

    | (1) Adjusted EBITDA exceeded the target and, as a result, there was no downward adjustment to the payout percentage. |

  60. 2023 Annual Incentive Plan Payouts

    | Name(1) | Threshold ($) | Target ($) | Maximum ($) | Actual Amount Paid ($) | Amount Paid as % of Target | | Chad Richison | — | 800,184 | 1,600,368 | 765,700 | 95.7% | | Craig E. Boelte | — | 503,939 | 1,007,878 | 482,222 | 95.7% | | Holly Faurot | — | 478,067 | 956,134 | 457,465 | 95.7% | | Bradley S. Smith | — | 491,566 | 983,132 | — | — | | Chris G. Thomas | — | 400,000 | 800,000 | — | — |

  61. 2023 Annual Incentive Plan Payouts

    | (1) Mr. Clark did not participate in the Annual Incentive Plan for 2023 as he was not a member of the executive team until December 2023. |

  62. Equity Incentive Compensation

    Equity Incentive Compensation

  63. Overview

    Overview We believe that equity awards provide our NEOs with a strong link to our performance, create an incentive to achieve performance goals and objectives, and more closely align the interests of our NEOs with those of our stockholders. The 2023 LTIP allows us to grant an array of equity-based incentive awards to our NEOs, other employees, outside directors and contractors. The purpose of the 2023 LTIP is to align award recipients with Paycom’s stockholders and long-term success and to help us attract and retain top-tier talent. Historically, we have granted equity incentive awards to our NEOs consisting of restricted stock and, more recently, RSUs and PSUs. The Committee, in consultation with its independent compensation consultant, annually determines the type, magnitude and vesting conditions of awards to NEOs based on its evaluation of the following factors, among others:

  64. Overview

    | › recent vesting events; › value of equity awards that have previously vested; › value of and vesting conditions for unvested equity awards that remain outstanding; › general market and economic conditions; › our need to motivate and/or re-incentivize NEOs in light of changes in the competitive environment; and › trends among our competitors and peers with respect to equity compensation practices. |

  65. 2023 Equity Awards

    2023 Equity Awards

  66. Overview

    Overview Our 2023 executive equity grants consisted of performance- and time-based incentives allocated among PSUs, RSUs and RSAs. As was the case in 2021 and 2022, Mr. Richison did not receive any equity incentive awards in 2023, consistent with the terms of the 2020 CEO Performance Award. As discussed below under the heading “—Update on 2020 CEO Performance Award,” the 2020 CEO Performance Award was forfeited in full in February 2024 in connection with Mr. Richison’s transition from Chief Executive Officer to Co-Chief Executive Officer. Our long-term equity incentive program in 2021 and 2022 consisted exclusively of PSUs with vesting tied to rigorous relative TSR goals as compared to the S&P 500 Software & Services Index. As further described above under the heading “Overview—2023 Compensation Program Overview,” for 2023, the Committee determined to allocate a significant portion of equity incentive opportunities to RSAs and RSUs and, for PSUs, to include Company financial performance metrics in alignment with our strategic priorities, rather than relative TSR, as performance conditions for vesting. On May 2, 2023, the Committee approved equity incentive award grants to Mrs. Faurot and Messrs. Boelte, Smith and Thomas pursuant to the 2023 LTIP. The 2023 equity incentives were granted to executives following stockholder approval of the 2023 LTIP at the 2023 annual meeting. In prior years, executive equity incentive awards were granted earlier in the year. This deviation from historical practice was due to limited share capacity remaining available under the Paycom Software, Inc. 2014 Long-Term Incentive Plan (the “2014 LTIP”). In approving the 2023 annual equity incentives, the Committee considered, among several factors, the market and peer data for NEO annual equity incentive opportunities based on each role and associated scope of responsibilities, the fair value of outstanding equity awards and the highly competitive market for executive talent in our industry. Specifically, the Committee considered the fair market value of the outstanding incentives for our executives at the end of 2022, which, based on tracking performance levels, were significantly below market benchmarks and could have been easily matched by competing job opportunities. The Committee also considered the realized value of the NEOs’ compensation opportunities in recent years compared to the robust financial performance results achieved by the leadership team, including a compound annual revenue growth rate of 23% from January 1, 2020 to December 31, 2023 and strong annual revenue retention rate at or above 90% in each of the last three fiscal years. The grant values as approved by the Committee and presented below are intended to incentivize alignment with our long-term stockholder interests, incentivize progress on our key strategic initiatives and foster sustained stockholder value creation, which is reinforced through an extended four-year vesting term for the RSAs with 44% of the RSAs on average vesting at the end of the four-year vesting period, subject to each executive’s continued service with the Company.

  67. Overview

    | Name(1) | Target Total Grant Value ($) | Target PSU Value ($) (% of Total) | Target RSU Value ($) (% of Total) | Target RSA Value ($) (% of Total) | | Craig E. Boelte | 16,811,025 | 4,304,396 (26%) | 956,629 (6%) | 11,550,000 (69%) | | Holly Faurot | 14,837,996 | 2,690,284 (18%) | 597,713 (4%) | 11,550,000 (78%) | | Bradley S. Smith | 14,837,996 | 2,690,284 (18%) | 597,713 (4%) | 11,550,000 (78%) | | Chris G. Thomas | 8,325,240(2) | 1,614,113 (19%) | 358,628 (4%) | 6,352,500 (76%) |

  68. Overview

    | (1) Consistent with the terms of the 2020 CEO Performance Award, Mr. Richison was not eligible to receive any long-term equity incentive awards in 2023. The 2023 executive equity incentive awards were granted prior to Mr. Clark’s appointment as Chief Administrative Officer. For a discussion of the equity incentive awards granted to Mr. Clark in connection with his appointment, see “—Jason Clark Equity Awards” below. Percentages in this table may not sum to 100% due to rounding. |

  69. Overview

    | (2) The amount presented excludes equity incentives granted to Mr. Thomas in early 2023, prior to his appointment as an executive officer. The aggregate value of equity incentives granted to Mr. Thomas during 2023 is reported in the “Stock Awards” column of the Summary Compensation Table. |

  70. 2023 PSU Awards

    2023 PSU Awards In 2023, we granted to certain NEOs PSUs tied to key financial targets, with metrics and weightings differentiated across executives to emphasize executive control in performance measures, as presented in the table below. The 2023 PSUs were eligible to vest based on performance over a one-year performance period. The Committee used similar Company financial performance metrics as those used for our Annual Incentive Plan bonus program to emphasize the importance of maintaining our revenue growth rate and profitability, which required our executive leadership team to deliver “above-and-beyond” efforts in the highly volatile macroeconomic environment. Due to significant challenges in setting reliable long-term financial goals, the Committee approved a one-year performance period for the 2023 PSUs to maintain the rigor and effectiveness of our program and encourage “stretch” performance in 2023, eliminating the possibility of overperformance in one year offsetting underperformance in another year during a longer-term performance cycle. The Committee will continue to review market conditions and evaluate whether longer performance periods for future equity awards would be appropriate.

  71. 2023 PSU Awards

    | Name(1) | How Metrics Support Paycom’s Strategy | | Craig E. Boelte › Revenue (50%) › Adjusted EBITDA (30%) › VWAP Value (20%) | Top-line revenue growth and enhanced profitability are the two fundamental metrics of our success, and as Chief Financial Officer, Mr. Boelte is responsible for our financial strategy. Inclusion of our VWAP value provides additional incentive to drive our stock price performance. | | Holly Faurot › Revenue (100%) | Our Chief Sales Officer has direct responsibility for our total annual sales, a fundamental metric of our success. | | Bradley S. Smith › Annual Revenue Retention Rate (100%) | Our Chief Information Officer helps drive our product and technological innovation, supporting client satisfaction as measured by our annual revenue retention rate. | | Chris G. Thomas › Annual Revenue Retention Rate (100%) | Our Chief Operating Officer(2) is directly responsible for all aspects of our client experience, which drives our annual revenue retention rate. | | (1) Mr. Richison was not eligible to receive any long-term equity incentive awards in 2023. The 2023 PSUs were granted prior to Mr. Clark’s appointment as Chief Administrative Officer. For a discussion of the equity incentive awards granted to Mr. Clark in connection with his appointment, see “—Jason Clark Equity Awards” below. (2) Mr. Thomas served as Senior Executive Vice President of Operations from March 2023 to September 2023 and as Chief Operating Officer from September 2023 to February 2024. | |

  72. 2023 PSU Awards

    The 2023 PSUs also featured updated payout schedules, with no additional payouts for above-target performance to reflect the rigor of the target goals and avoid outsized payouts. The Committee set the 2023 targets to align with our annual operating plan and believed the goals to be rigorous targets that required “stretch” performance levels.

  73. 2023 PSU Awards

    | Metric | Performance Level | Payout Percentage | | Boelte | | | | Revenue | < $1,713.0 MM | 0% | | | ≥ $1,713.0 MM | 100% | | Adjusted EBITDA | < $717.0 MM | 0% | | | ≥ $717.0 MM | 100% | | VWAP Value(1) | < $404.00 | 0% | | | ≥ $404.00 / < $425.00 | 50% | | | ≥ $425.00 / < $445.00 | 75% | | | ≥ $445.00 | 100% | | Faurot | | | | Revenue | < $1,713.0 MM | 0% | | | ≥ $1,713.0 MM / < $1,721.0 MM | 50% | | | ≥ $1,721.0 MM / < $1,730.0 MM | 75% | | | ≥ $1,730.0 MM | 100% | | Smith / Thomas | | | | Annual Revenue Retention Rate | < 93% | 0% | | | ≥ 93% | 100% | | (1) “VWAP Value” means, as of the last day of the performance period, the arithmetic average of the daily volume weighted average price of a share of our Common Stock on each of the twenty (20) consecutive trading days immediately preceding such date. | | |

  74. Jason Clark Equity Awards

    Jason Clark Equity Awards On November 17, 2023, the Board of Directors approved the appointment of Jason D. Clark as Chief Administrative Officer of the Company, effective December 4, 2023. In connection with this appointment, the Committee approved two equity awards to Mr. Clark, consisting of a sign-on award and a time-based RSA with the same vesting schedule as that of the RSAs included in the 2023 annual equity incentive awards granted to certain other NEOs earlier in the year. The sign-on award was a grant of immediately vested shares of Common Stock with a target aggregate value of $2,500,000, with the number of shares determined based on the closing price of our Common Stock on the trading day immediately prior to Mr. Clark’s start date. In determining this amount, the Committee considered the value of outstanding incentive awards at Mr. Clark’s prior employer and the competitive talent market for executive roles in our industry, providing him with a grant intended to make him whole for an incentive he had to forfeit to join our management team. Mr. Clark’s time-based RSA consisted of 40,000 shares of restricted stock, with an aggregate grant date fair value of $7,448,000. The shares underlying the RSA vested or will vest as follows, subject to continued service through the applicable vesting date: (i) 7,000 shares on each of February 5, 2024, 2025 and 2026; and (ii) 19,000 shares on February 5, 2027. The RSA was intended to provide immediate alignment of Mr. Clark’s incentives with those of our stockholders and to provide strong incentive and retentive value.

  75. Vesting of 2021 PSUs

    Vesting of 2021 PSUs In February 2024, the Committee reviewed and certified our TSR performance relative to the S&P 500 Software & Services Index for the second performance period applicable to the 2021 PSUs. Up to 25% of the target 2021 PSUs were eligible to vest based on our two-year relative TSR during the measurement period ended December 31, 2022, and up to 75% of the target 2021 PSUs were eligible to vest based on our three-year relative TSR during the measurement period ended December 31, 2023. The first tranche of the 2021 PSUs paid out at 60% of target based on our TSR rank at the 36th percentile. The second tranche of 2021 PSUs paid out at 0% based on our relative TSR rank at the 6th percentile. Unearned 2021 PSUs were forfeited and there are no additional opportunities to earn these PSUs. Based on the closing stock price on December 29, 2023, the shares actually earned from the 2021 PSUs had an aggregate value equal to 7.7% of the award’s initial target value.

  76. Vesting of 2021 PSUs

    | Performance Period | Weighting | Relative TSR Performance Level and Payout | Actual Relative TSR | Payout % of Target | | January 1, 2021 to December 31, 2022 | 25% | Threshold: 30th percentile g 50% of Target Units Target: 60th percentile g 100% of Target Units Maximum: 90th percentile g 250% of Target Units | 36th percentile rank | 60% | | January 1, 2021 to December 31, 2023 | 75% | | 6th percentile rank | 0% | | Total Payout (% of Target): 15% | | | | |

  77. Vesting of 2022 PSUs

    Vesting of 2022 PSUs In February 2024, the Committee reviewed and certified our TSR performance relative to the S&P 500 Software & Services Index for the first performance period applicable to the 2022 PSUs. Similar to the 2021 PSUs, the 2022 PSUs provided for vesting based on the Company’s achieved results over two performance periods, with the first tranche allowing executives to earn up to 25% of the target 2022 PSUs based on our two-year relative TSR performance compared to the S&P 500 Software and Services Index during the measurement period ended December 31, 2023, and the second tranche allowing executives to earn up to 75% of the target 2022 PSUs based on our three-year relative TSR performance against the same peer group during the measurement period ending December 31, 2024. For the initial two-year performance period, our relative TSR rank was at the 9th percentile, resulting in a payout of 0% of target opportunity for the first tranche. Unearned 2022 PSUs allocated to the two-year performance period were forfeited and there are no additional opportunities to earn these PSUs.

  78. Vesting of 2022 PSUs

    | Performance Period | Weighting | Relative TSR Performance Level and Payout | Actual Relative TSR | Payout % of Target | | January 1, 2022 to December 31, 2023 | 25% | Threshold: 30th percentile g 50% of Target Units Target: 60th percentile g 100% of Target Units Maximum: 90th percentile g 250% of Target Units | 9th percentile rank | 0% | | January 1, 2022 to December 31, 2024 | 75% | | Performance period in progress | |

  79. Change in Control Arrangements

    Change in Control Arrangements

  80. Employment Agreements (Richison and Boelte)

    Employment Agreements (Richison and Boelte) As disclosed under “Compensation of Executive Officers— Employment Agreements and Arrangements,” the employment agreement with Mr. Boelte provides for payments upon the occurrence of a change in control that is followed by a termination of employment due to a change in his status, reporting, duties or position that represents a demotion or diminution from his prior status, which is also known as a “double-trigger” provision. Mr. Richison’s employment agreement does not provide for any payments upon a change in control. The change in control provisions in Mr. Boelte’s employment agreement are designed to reward him for remaining employed with us during a time when his prospects for employment following a change in control may be uncertain. We choose to provide change in control protections to incentivize executives to remain focused on stockholders’ and clients’ interests during the period leading up to, and through, the change in control, and to maintain a stable executive team during the transition process. We believe such provisions are also helpful in retaining executives who may consider opportunities with other companies and may be helpful in the future for purposes of hiring executives from well-compensated positions in other companies.

  81. Equity Awards

    Equity Awards

  82. Restricted Stock and Time-Based RSUs

    Restricted Stock and Time-Based RSUs The restricted stock award agreements and RSU award agreements with each NEO under the 2014 LTIP and the 2023 LTIP (other than the 2020 CEO Performance Award, which was forfeited in February 2024) provide that upon a change in control (as defined in the 2014 LTIP or 2023 LTIP, as applicable), 100% of the shares of restricted stock or RSUs not previously vested will vest if the award is not assumed by the surviving entity. The awards will continue in accordance with their terms if they are assumed by the surviving entity (or if the Company is the surviving entity).

  83. PSUs

    PSUs The award agreements governing the 2022 PSUs provide that unvested PSUs will remain outstanding in connection with a change in control, absent a subsequent termination of service. If the NEO is terminated without cause (as defined in the applicable award agreement) or the NEO terminates his or her employment for good reason (as defined in the applicable award agreement) in connection with or during the 12-month period following a change in control but prior to the applicable vesting date, the 2022 PSUs will vest based on the greater of (i) the target performance level for Relative TSR (as defined therein) or (ii) the actual Relative TSR of the Company against the peer group through the date of the change in control. Notwithstanding the foregoing, under the 2014 LTIP, the Committee may, in its sole discretion, accelerate the vesting the 2022 PSUs in connection with a change in control. The award agreements governing the 2023 PSUs provide that unvested 2023 PSUs will remain outstanding in connection with a change in control, absent a subsequent termination of service. If the NEO is terminated without cause (as defined in the applicable award agreement) or the NEO terminates his or her employment for good reason (as defined in the applicable award agreement) in connection with or during the 12-month period following the consummation of a change in control but prior to the applicable vesting date, the unvested 2023 PSUs will become fully vested as of the date of such termination of service. Pursuant to the 2023 LTIP, if the 2023 PSUs are not assumed in connection with a change in control, all outstanding 2023 PSUs will vest in connection with such change in control, as follows: (i) if the payout level has been determined (or is determinable) as of such change in control, such award shall be payable in full in accordance with the payout schedule set forth in the award agreement; and (ii) if the payout level is undeterminable, the award shall be pro-rated based on the time elapsed in the applicable performance period between the date of grant and the change in control and paid at the target payout level in accordance with the payout schedule set forth in the award agreement.

  84. Dividends and Dividend Equivalents

    Dividends and Dividend Equivalents Pursuant to the 2023 LTIP, participants receiving restricted stock have all of the rights of a stockholder of the Company, including the right to receive any dividends thereon, provided that, (i) any cash dividends and stock dividends with respect to the restricted stock must be withheld by the Company for the participant’s account, and (ii) such withheld dividends attributable to any particular share of restricted stock shall be distributed to such participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a fair market value equal to the amount of such withheld dividends, if applicable, upon the release of restrictions on such share (i.e., upon vesting) and, if such share is forfeited, the participant will forfeit and have no right to such withheld dividends. Similarly, RSUs may permit the participant to receive dividend equivalents, provided that, (i) any dividend equivalents (based on cash or stock dividends) with respect to the RSUs shall be withheld by the Company for the participant’s account, and (ii) such withheld dividend equivalents attributable to any particular RSU shall be distributed to such participant in cash or, at the sole discretion of the Committee, in shares of Common Stock having a fair market value equal to the amount of such dividend equivalents, if applicable, upon the release of restrictions on such RSUs (i.e., upon vesting) and, if such RSU is forfeited, the participant shall forfeit and have no right to such dividend equivalents. All NEOs’ unvested equity incentive awards currently outstanding are entitled to receive dividends or dividend equivalents, as applicable, provided that such dividends or dividend equivalents are withheld by the Company and subject to the same vesting and forfeiture provisions as the awarded shares or awarded units to which they relate. As a result, dividends are paid to the applicable NEO only upon vesting of the award. In 2023, no dividends were paid to NEOs upon the vesting of equity awards.

  85. Summary Compensation Table

    Summary Compensation Table The following table contains information regarding the compensation of our NEOs for the fiscal years ended December 31, 2023, 2022 and 2021.

  86. Summary Compensation Table

    | | Year | Salary ($) | Stock Awards(1) ($) | Non-Equity Incentive Plan Compensation(2) ($) | All Other Compensation ($) | Total ($) | | Chad Richison(3) Co-Chief Executive Officer and President | 2023 | 817,068 | — | 765,700 | 1,535,838(4) | 3,118,606 | | | 2022 | 785,953 | — | 1,538,816 | 813,649 | 3,138,418 | | | 2021 | 753,701 | — | 1,479,630 | 725,079 | 2,958,410 | | Chris G. Thomas(5) Co-Chief Executive Officer and Former Chief Operating Officer | 2023 | 401,733 | 8,783,723(6) | — | 4,027(7) | 9,189,483 | | Craig E. Boelte Chief Financial Officer | 2023 | 516,911 | 16,116,690(8) | 482,222 | 39,577(9) | 17,155,400 | | | 2022 | 496,797 | 7,832,696 | 969,114 | 38,697 | 9,337,303 | | | 2021 | 474,665 | 12,043,630 | 931,840 | 38,161 | 13,488,296 | | Holly Faurot Chief Sales Officer | 2023 | 499,065 | 14,837,996(8) | 457,465 | 15,577(10) | 15,810,103 | | | 2022 | 480,576 | 2,470,988 | 919,360 | 14,697 | 3,885,620 | | | 2021 | 406,735 | 3,153,980 | 663,000 | 13,846 | 4,237,561 | | Bradley S. Smith Chief Information Officer | 2023 | 501,884 | 14,837,996(8) | — | 15,577(10) | 15,355,457 | | | 2022 | 483,142 | 2,470,988 | 472,659 | 14,697 | 3,441,485 | | | 2021 | 463,010 | 3,154,297 | 499,928 | 14,161 | 4,131,396 | | Jason D. Clark(11) Chief Administrative Officer | 2023 | 22,392 | 9,954,066(12) | — | 335,103(13) | 10,311,560 |

  87. Summary Compensation Table

    | (1) The amounts presented in this column do not reflect compensation actually received by the NEOs. Rather, the amounts represent the aggregate grant date fair value of restricted stock granted to the NEO in 2021, 2022 and 2023, as applicable, RSUs granted to the NEO in 2023 and PSUs granted to the NEO in 2021, 2022 and 2023, as applicable, in each case computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. A discussion of the assumptions used in the calculation of these amounts is included in Note 12, “Stock-Based Compensation” in the annual consolidated financial statements included in the Form 10-K filed with the SEC on February 15, 2024. |

  88. Summary Compensation Table

    | (2) The amounts presented in this column represent bonuses earned by Mrs. Faurot and each of Messrs. Richison and Boelte based on the achievement of performance goals tied to revenue growth and adjusted EBITDA. Bonuses were determined in accordance with the terms of the Annual Incentive Plan. Messrs. Thomas and Smith received no payout under the Annual Incentive Plan for the 2023 performance period. See “Compensation Discussion and Analysis—Cash Compensation” for additional information. Mr. Clark joined the executive team in December 2023 and thus was not eligible to participate in the annual incentive program for 2023. |

  89. Summary Compensation Table

    | (3) During 2023, Mr. Richison’s title was President and Chief Executive Officer. Effective February 7, 2024, Mr. Richison’s title is Co-Chief Executive Officer and President. Mr. Richison also serves as Chairman of the Board of Directors. All amounts shown reflect compensation paid to Mr. Richison for his service as an executive officer. Mr. Richison did not receive additional compensation for his service as a director or Chairman of the Board of Directors. |

  90. Summary Compensation Table

    | (4) This amount consists of (i) $633,485 for Mr. Richison’s non-Company use of a corporate aircraft, in accordance with the terms of his employment agreement, (ii) $715,563 for Mr. Richison’s HSR Act filing fee and related tax gross-up, (iii) $149,903 for Mr. Richison’s personal security detail, in accordance with the terms of his employment agreement, (iv) $12,311 (in lieu of lease payments) attributable to depreciation of a vehicle purchased by the Company, recognized over the vehicle’s remaining useful life, (v) $9,000 in country club dues, (vi) $11,550 in Company contributions to a 401(k) plan for the benefit of Mr. Richison and (vii) a retainer for a supplemental medical plan. The incremental cost for personal use of corporate aircraft was calculated based on the total personal travel flight hours multiplied by the estimated hourly aircraft operating costs (including variable fuel charges and a pro-rated portion of a monthly management fee). When using the corporate aircraft for business travel, if space allows, we permit Mr. Richison to bring family members or guests along on the trip. Because we pay for such use of the corporate aircraft based on the flight hours regardless of the passenger load, the aggregate incremental cost to us for the additional passengers is de minimis. See “Compensation Discussion and Analysis—Other Compensation Components and Considerations—Perquisites and Other Personal Benefits” and “—Employment Agreements and Arrangements.” |

  91. Summary Compensation Table

    | (5) Mr. Thomas was appointed Senior Executive Vice President of Operations in March 2023 and was promoted to the position of Chief Operating Officer in September 2023. Effective February 7, 2024, Mr. Thomas was appointed as Co-Chief Executive Officer, to serve alongside Mr. Richison. |

  92. Summary Compensation Table

    | (6) This amount represents the aggregate grant date fair value of (i) shares of restricted stock granted to Mr. Thomas on February 4, 2023, prior to his appointment as an executive officer, and (ii) 2023 RSAs, 2023 RSUs and 2023 PSUs granted to Mr. Thomas on May 2, 2023. The amount reported includes the value of the 2023 PSUs assuming achievement of performance conditions at the highest level. |

  93. Summary Compensation Table

    | (7) This amount represents a retainer for a supplemental medical plan for the benefit of Mr. Thomas. |

  94. Summary Compensation Table

    | (8) This amount represents the aggregate grant date fair value of 2023 RSAs, 2023 RSUs and 2023 PSUs granted to the NEO on May 2, 2023. The amount reported includes the value of the applicable NEO’s 2023 PSUs assuming achievement of performance conditions at the highest level. |

  95. Summary Compensation Table

    | (9) This amount consists of (i) $24,000 in automobile lease payments, (ii) $11,550 in Company contributions to a 401(k) plan and (iii) a retainer for a supplemental medical plan for the benefit of Mr. Boelte. |

  96. Summary Compensation Table

    | (10) This amount consists of (i) $11,550 in Company contributions to a 401(k) plan and (ii) a retainer for a supplemental medical plan for the benefit of the NEO. |

  97. Summary Compensation Table

    | (11) Mr. Clark was appointed Chief Administrative Officer effective December 4, 2023. |

  98. Summary Compensation Table

    | (12) This amount represents the aggregate grant date fair value of 13,459 shares of Common Stock and 40,000 shares of restricted stock granted to Mr. Clark on December 4, 2023. |

  99. Summary Compensation Table

    | (13) This amount consists of (i) $100,000 of cash compensation for service on the Board of Directors and certain committees until December 4, 2023, (ii) $234,767 of restricted stock granted as Director Equity Compensation and (iii) a retainer for a supplemental medical plan for the benefit of Mr. Clark. See “Directors and Corporate Governance—Director Compensation.” |

  100. 2023 Grants of Plan-Based Awards Table

    2023 Grants of Plan-Based Awards Table The following table presents information regarding plan-based awards granted to our NEOs during the year ended December 31, 2023, consisting of (i) equity awards granted under the 2014 LTIP (for awards granted prior to May 1, 2023) and the 2023 LTIP (for awards granted on or after May 1, 2023) and (ii) cash incentive awards under the Annual Incentive Plan.

  101. 2023 Grants of Plan-Based Awards Table

    | Name | Grant Date | Award Type(1) | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(2) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Chad Richison | n/a(3) | AIP | — | 800,184 | 1,600,368 | | | | | | | | n/a(3) | AIP | — | 400,000 | 800,000 | | | | | | | | 2/4/2023(4) | RSA | | | | | | | 969 | 326,979 | | | 2/4/2023(5) | PSA | | | | | 208 | | | 67,144 | | Chris G. Thomas | 2/4/2023(6) | PSA | | | | | 208 | | | 64,359 | | | 5/2/2023(7) | RSA | | | | | | | 22,000 | 6,352,500 | | | 5/2/2023(8) | RSU | | | | | | | 1,242 | 358,628 | | | 5/2/2023(9) | PSU | | | | | 5,590 | | | 1,614,113 | | | n/a(3) | AIP | — | 503,939 | 1,007,878 | | | | | | | | 5/2/2023(10) | RSA | | | | | | | 40,000 | 11,550,000 | | Craig E. Boelte | 5/2/2023(8) | RSU | | | | | | | 3,313 | 956,629 | | | 5/2/2023(11) | PSU | | | | | 7,454 | | | 2,152,343 | | | 5/2/2023(12) | PSU | | | | | 4,472 | | | 1,291,290 | | | 5/2/2023(13) | PSU | | | | 1,491 | 2,981 | | | 166,429 | | | n/a(3) | AIP | — | 478,067 | 956,134 | | | | | | | Holly Faurot | 5/2/2023(10) | RSA | | | | | | | 40,000 | 11,550,000 | | | 5/2/2023(8) | RSU | | | | | | | 2,070 | 597,713 | | | 5/2/2023(11) | PSU | | | | 4,659 | 9,317 | | | 2,690,284 | | | n/a(3) | AIP | — | 491,566 | 983,132 | | | | | | | Bradley S. Smith | 5/2/2023(10) | RSA | | | | | | | 40,000 | 11,550,000 | | | 5/2/2023(8) | RSU | | | | | | | 2,070 | 597,713 | | | 5/2/2023(9) | PSU | | | | | 9,317 | | | 2,690,284 | | Jason D. Clark(14) | 12/4/2023(15) | Stock | | | | | | | 13,459 | 2,506,066 | | | 12/4/2023(16) | RSA | | | | | | | 40,000 | 7,448,000 |

  102. 2023 Grants of Plan-Based Awards Table

    | (1) Award Type: |

  103. 2023 Grants of Plan-Based Awards Table

    AIP: Annual Incentive Plan PSU: Performance-based restricted stock unit award RSA: Time-based restricted stock award PSA: Market-based restricted stock award Stock: Stock award

  104. 2023 Grants of Plan-Based Awards Table

    | (2) The amounts presented in this column represent the aggregate grant date fair value of RSA, RSU, PSU and stock awards, as applicable, in each case computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. A discussion of the assumptions used in the calculation of these amounts is included in Note 12, “Stock-Based Compensation” in the annual consolidated financial statements included in the Form 10-K filed with the SEC on February 15, 2024. |

  105. 2023 Grants of Plan-Based Awards Table

    | (3) The amounts presented in this row represent possible payout amounts under the Annual Incentive Plan based on the achievement of the performance goals described above in “Compensation Discussion and Analysis—Cash Compensation—Annual Incentive Plan.” See the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table for actual amounts paid to Mrs. Faurot and to each of Messrs. Richison and Boelte under the Annual Incentive Plan for the 2023 performance period. Messrs. Thomas and Smith received no payout under the Annual Incentive Plan for the 2023 performance period. Mr. Clark joined the executive team in December 2023 and thus was not eligible to participate in the annual incentive program for 2023. |

  106. 2023 Grants of Plan-Based Awards Table

    | (4) The amounts presented in this row relate to an award of time-based restricted stock granted to Mr. Thomas prior to his appointment as an executive officer, with 208 shares vesting on May 10, 2024, 208 shares vesting on May 10, 2025, 242 shares vesting on May 10, 2026 and 311 shares vesting on May 10, 2027, in each case subject to Mr. Thomas’s continued service through the applicable vesting date. |

  107. 2023 Grants of Plan-Based Awards Table

    | (5) The amounts presented in this row relate to an award of market-based restricted stock granted to Mr. Thomas prior to his appointment as an executive officer, which shares will vest if, within eight years of the date of grant, the Company’s VWAP Value equals or exceeds $404 per share, subject to Mr. Thomas’s continued service through the vesting date. |

  108. 2023 Grants of Plan-Based Awards Table

    | (6) The amounts presented in this row relate to an award of market-based restricted stock granted to Mr. Thomas prior to his appointment as an executive officer, which shares will vest if, within eight years of the date of grant, the Company’s VWAP Value equals or exceeds $466 per share, subject to Mr. Thomas’s continued service through the vesting date. |

  109. 2023 Grants of Plan-Based Awards Table

    | (7) The amounts presented in this row relate to an award of time-based restricted stock, with 4,000 shares vesting on February 5, 2024, 4,000 shares vesting on February 5, 2025, 4,000 shares vesting on February 5, 2026 and 10,000 shares vesting on February 5, 2027, in each case subject to Mr. Thomas’s continued service through the applicable vesting date. |

  110. 2023 Grants of Plan-Based Awards Table

    | (8) The amounts presented in this row relate to an award of time-based RSUs that vest in three substantially equal tranches on February 5, 2024, February 5, 2025, and February 5, 2026, in each case subject to the NEO’s continued service through the applicable vesting date. |

  111. 2023 Grants of Plan-Based Awards Table

    | (9) The amounts presented in this row relate to PSUs that were eligible to vest based on our achievement of an annual revenue retention rate target for the one-year performance period ended December 31, 2023. See “Compensation Discussion and Analysis—Equity Incentive Compensation—2023 Equity Awards—2023 PSU Awards.” |

  112. 2023 Grants of Plan-Based Awards Table

    | (10) The amounts presented in this row relate to an award of time-based restricted stock, with 7,000 shares vesting on February 5, 2024, 7,000 shares vesting on February 5, 2025, 7,000 shares vesting on February 5, 2026 and 19,000 shares vesting on February 5, 2027, in each case subject to the NEO’s continued service through the applicable vesting date. |

  113. 2023 Grants of Plan-Based Awards Table

    | (11) The amounts presented in this row relate to PSUs that were eligible to vest based on our achievement of a total revenue target for the one-year performance period ended December 31, 2023. See “Compensation Discussion and Analysis—Equity Incentive Compensation—2023 Equity Awards—2023 PSU Awards.” |

  114. 2023 Grants of Plan-Based Awards Table

    | (12) The amounts presented in this row relate to PSUs that were eligible to vest based on our achievement of an adjusted EBITDA target for the one-year performance period ended December 31, 2023. See “Compensation Discussion and Analysis—Equity Incentive Compensation—2023 Equity Awards—2023 PSU Awards.” |

  115. 2023 Grants of Plan-Based Awards Table

    | (13) The amounts presented in this row relate to PSUs that were eligible to vest based on our achievement of VWAP value targets for the one-year performance period ended December 31, 2023. See “Compensation Discussion and Analysis—Equity Incentive Compensation—2023 Equity Awards—2023 PSU Awards.” |

  116. 2023 Grants of Plan-Based Awards Table

    | (14) The amounts presented for Mr. Clark do not include shares of restricted stock comprising the 2023 Director Equity Compensation, which shares were granted under the 2023 LTIP on May 1, 2023. See “Directors and Corporate Governance—Director Compensation.” |

  117. 2023 Grants of Plan-Based Awards Table

    | (15) The amounts presented in this row relate to a sign-on award of immediately vested shares of Common Stock with a target value of $2,500,000, with the number of shares determined based on the closing price of our Common Stock on the trading day immediately prior to Mr. Clark’s start date. See “Compensation Discussion and Analysis—Equity Incentive Compensation—2023 Equity Awards—Jason Clark Equity Awards.” |

  118. 2023 Grants of Plan-Based Awards Table

    | (16) The amounts presented in this row relate to an award of time-based restricted stock approved by the Committee on November 17, 2023, with 7,000 shares vesting on February 5, 2024, 7,000 shares vesting on February 5, 2025, 7,000 shares vesting on February 5, 2026 and 19,000 shares vesting on February 5, 2027, in each case subject to the Mr. Clark’s continued service through the applicable vesting date. |

  119. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    2023 Outstanding Equity Awards At Fiscal Year-End Table The following table lists all of the outstanding equity awards held by each of the NEOs on December 31, 2023 and provides the value of such equity awards based on the fair market value of our Common Stock as of December 29, 2023.

  120. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | | Stock Awards | | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | Vesting Terms | | Chad Richison | | | 1,610,000 | 332,819,200 | (2) | | | | | 855 | 176,746 | (3) | | Chris G. Thomas | 24,057 | 4,973,063 | | | (4) | | | 1,242 | 256,746 | | | (5) | | | | | 9,921 | 2,050,869 | (6) | | Craig E. Boelte | 40,000 | 8,268,800 | | | (7) | | | 3,313 | 684,863 | | | (5) | | | | | 3,130 | 647,034 | (6) | | Holly Faurot | 40,370 | 8,345,286 | | | (8) | | | 2,070 | 427,910 | | | (5) | | | | | 3,130 | 647,034 | (6) | | Bradley S. Smith | 40,000 | 8,268,800 | | | (7) | | | 2,070 | 427,910 | | | (5) | | Jason D. Clark | 40,789 | 8,431,902 | | | (9) |

  121. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (1) The amounts shown in this column reflect the value of restricted stock, RSUs or PSUs calculated by multiplying (i) the number of unvested shares of restricted stock or shares deliverable upon vesting and conversion of RSUs or PSUs (at the threshold level of achievement) by (ii) the closing price of our Common Stock on the NYSE on December 29, 2023, which was $206.72 per share. |

  122. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (2) The amounts presented in this row relate to shares of market-based restricted stock comprising the 2020 CEO Performance Award, 50% of which would have vested if, within six years of the date of grant, the Company’s VWAP Value equaled or exceeded $1,000 per share and 50% of which would have vested if, within ten years of the date of grant, the Company’s VWAP Value equaled or exceeded $1,750 per share. Effective February 7, 2024, in connection with the implementation of the Co-Chief Executive Officer leadership structure, the change in Mr. Richison’s position from Chief Executive Officer to Co-Chief Executive Officer triggered the forfeiture of the 2020 CEO Performance Award in accordance with its terms. |

  123. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (3) The amounts presented in this row relate to shares of market-based restricted stock that will vest if, within eight years of the date of grant, the Company’s VWAP Value equals or exceeds the amounts set forth below, in each case subject to Mr. Thomas’s continued service through the applicable vesting date: |

  124. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | Grant Date | Number of Shares | VWAP Value | | 2/5/2021 | 139 | $600 | | 2/2/2022 | 150 | $484 | | 2/2/2022 | 150 | $559 | | 2/4/2023 | 208 | $404 | | 2/4/2023 | 208 | $466 |

  125. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (4) The amounts presented in this row relate to shares of time-based restricted stock that vested or will vest as follows, in each case subject to Mr. Thomas’s continued service through the applicable vesting date: (i) 4,000 shares on February 5, 2024; (ii) 685 shares on May 10, 2024; (iii) 4,000 shares on February 5, 2025; (iv) 594 shares on May 10, 2025; (v) 4,000 shares on February 5, 2026; (vi) 467 shares on May 10, 2026, (vii) 10,000 shares on February 5, 2027; and (viii) 311 shares on May 10, 2027. |

  126. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (5) The amounts presented in this row relate to time-based RSUs that vest in three substantially equal tranches on February 5, 2024, February 5, 2025, and February 5, 2026, in each case subject to the NEO’s continued service through the applicable vesting date. |

  127. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (6) The amounts presented in this row relate to the second tranche of the 2022 PSUs, which will vest no later than March 1, 2025, depending upon the Company’s relative TSR for the three-year performance period beginning January 1, 2022 and ending December 31, 2024, compared to a pre-established peer group. The number of PSUs shown reflects the threshold level of achievement. The amounts presented in this row do not include amounts attributable to the second tranche of the 2021 PSUs (vesting tied to relative TSR performance for the three-year performance period ended December 31, 2023) and do not include amounts attributable to the first tranche of the 2022 PSUs (vesting tied to relative TSR performance for the two-year performance period ended December 31, 2023). |

  128. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (7) The amounts presented in this row relate to shares of time-based restricted stock that vested or will vest as follows, in each case subject to the NEO’s continued service through the applicable vesting date: (i) 7,000 shares on February 5, 2024; (ii) 7,000 shares on February 5, 2025; (iii) 7,000 shares on February 5, 2026; and (iv) 19,000 shares on February 5, 2027. |

  129. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (8) The amounts presented in this row relate to shares of time-based restricted stock that vested or will vest as follows, in each case subject to the NEO’s continued service through the applicable vesting date: (i) 7,000 shares on February 5, 2024; (ii) 370 shares on May 10, 2024; (iii) 7,000 shares on February 5, 2025; (iv) 7,000 shares on February 5, 2026; and (v) 19,000 shares on February 5, 2027. |

  130. 2023 Outstanding Equity Awards At Fiscal Year-End Table

    | (9) The amounts presented in this row relate to shares of time-based restricted stock that vested or will vest as follows, in each case subject to the NEO’s continued service through the applicable vesting date: (i) 7,000 shares on February 5, 2024; (ii) 789 shares on May 8, 2024; (iii) 7,000 shares on February 5, 2025; (iv) 7,000 shares on February 5, 2026; and (v) 19,000 shares on February 5, 2027. |

  131. 2023 Option Exercises and Stock Vested Table

    2023 Option Exercises and Stock Vested Table The following table sets forth a summary of the shares of restricted stock that vested during the year ended December 31, 2023 for each of the NEOs.

  132. 2023 Option Exercises and Stock Vested Table

    | | Stock Awards(1) | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Chad Richison | — | — | | Chris G. Thomas | 453 | 123,751(2) | | Craig E. Boelte | 4,472 | 924,452(3) | | Holly Faurot | 370 | 101,077(2) | | Bradley S. Smith | — | — | | Jason D. Clark | 13,459 | 2,506,066(2) |

  133. 2023 Option Exercises and Stock Vested Table

    | (1) The amounts presented represent the gross number of shares acquired and value received upon the vesting of shares of restricted stock and PSUs, without reduction for the number of shares withheld to pay applicable withholding taxes. |

  134. 2023 Option Exercises and Stock Vested Table

    | (2) This amount reflects the value of restricted stock calculated by multiplying the number of shares that vested by the closing price of our Common Stock on the NYSE on the date of vesting. |

  135. 2023 Option Exercises and Stock Vested Table

    | (3) This amount reflects the value of shares delivered upon vesting and settlement of the adjusted EBITDA-based portion (30%) of Mr. Boelte’s 2023 PSUs, calculated by multiplying the number of shares earned by the closing price of our Common Stock on the NYSE on December 29, 2023. See “Compensation Discussion and Analysis—Equity Incentive Compensation—2023 Equity Awards—2023 PSU Awards”. |

  136. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control The table below presents the estimated value of payments and benefits that each NEO would have been entitled to receive if the specified triggering event had occurred on December 31, 2023. Amounts presented for the vesting of equity awards are calculated based on the closing price of our Common Stock on the NYSE on December 29, 2023, which was $206.72 per share.

  137. Potential Payments upon Termination or Change in Control

    | Name | Benefit | Death/Disability ($) | Change in Control ($) | Termination Without Cause or by NEO for Good Reason ($) | | Chad Richison | Salary continuation | — | — | 832,191(1) | | | Annual Incentive Plan bonus | 765,700(2) | 765,700(3) | 765,700(4) | | | Continuation of benefits | — | — | 312,857(5) | | | Vesting of RSAs | —(6) | —(7) | —(6) | | | Total | 765,700 | 765,700 | 1,910,748 | | Chris G. Thomas | Vesting of non-executive equity awards | 601,969(8) | —(9) | —(10) | | | Vesting of 2023 PSUs | 1,155,565(11) | —(12) | —(13) | | | Vesting of 2023 RSAs | 4,547,840(8) | —(9) | —(10) | | | Vesting of 2023 RSUs | 256,746(8) | —(9) | —(10) | | | Total | 6,562,120 | — | — | | Craig E. Boelte | Salary continuation | — | — | 524,097(1) | | | Annual Incentive Plan bonus | 482,222(2) | 482,222(3) | 482,222(4) | | | Continuation of benefits | — | — | 8,909(14) | | | Vesting of 2021 PSUs | 3,223,178(11) | —(12) | —(13) | | | Vesting of 2022 PSUs | 5,468,984(11) | —(12) | 2,592,149(13) | | | Vesting of 2023 PSUs | 3,081,575(11) | —(12) | 924,452(13) | | | Vesting of 2023 RSAs | 8,268,800(8) | —(9) | —(10) | | | Vesting of 2023 RSUs | 684,863(8) | —(9) | —(10) | | | Total | 21,209,622 | 482,222 | 4,531,829 | | Holly Faurot | Annual Incentive Plan bonus | 457,465(2) | 457,465(3) | 457,465(4) | | | Vesting of non-executive equity awards | 76,486(8) | —(9) | —(10) | | | Vesting of 2021 PSUs | 844,244(11) | —(12) | —(13) | | | Vesting of 2022 PSUs | 1,725,285(11) | —(12) | 817,803(13) | | | Vesting of 2023 PSUs | 1,926,010(11) | —(12) | —(13) | | | Vesting of 2023 RSAs | 8,268,800(8) | —(9) | —(10) | | | Vesting of 2023 RSUs | 427,910(8) | —(9) | —(10) | | | Total | 13,726,200 | 457,465 | 1,275,268 | | Bradley S. Smith | Vesting of 2021 PSUs | 844,244(11) | —(12) | —(13) | | | Vesting of 2022 PSUs | 1,725,285(11) | —(12) | 817,803(13) | | | Vesting of 2023 PSUs | 1,926,010(11) | —(12) | —(13) | | | Vesting of 2023 RSAs | 8,268,800(8) | —(9) | —(10) | | | Vesting of 2023 RSUs | 427,910(8) | —(9) | —(10) | | | Total | 13,192,249 | — | 817,803 | | Jason D. Clark | Vesting of Director Equity Compensation | 163,102(8) | —(9) | — | | | Vesting of 2023 RSAs | 8,268,800(8) | —(9) | —(10) | | | Total | 8,431,902 | — | — |

  138. Potential Payments upon Termination or Change in Control

    | (1) The amount presented represents the aggregate amount payable for continuation of base salary for 12 months following the date of termination of employment, per the terms of the NEO’s employment agreement. |

  139. Potential Payments upon Termination or Change in Control

    | (2) The Annual Incentive Plan provides that upon death or disability during a performance period, the Compensation Committee may, in its sole discretion, pay the participant a pro-rated amount of the incentive compensation that would have been payable to such participant if he or she had remained employed, based on the number of days worked during the performance period. The amount presented reflects the assumption that (i) the termination of service due to death or disability occurred on December 31, 2023 and, as such, the payment would not be subject to such Compensation Committee discretion, and (ii) the participant would have been entitled to the amount of incentive compensation payable based on actual results for the 2023 performance period. See “Compensation Discussion and Analysis—Cash Compensation—Annual Incentive Plan.” |

  140. Potential Payments upon Termination or Change in Control

    | (3) The Annual Incentive Plan provides that in the event of a change in control (as defined in the Annual Incentive Plan), we must make a lump-sum cash payment to each participant equal to a pro-rated amount of the incentive compensation payable to such participant, calculated by multiplying the amount payable for target achievement by the percentage of the performance period completed prior to the change in control. The amount presented reflects the assumption that (i) the change in control occurred on December 31, 2023 and, as such, the payment would not be subject to such pro-ration, and (ii) the participant would have been entitled to the amount of incentive compensation payable based on actual results for the 2023 performance period. See “Compensation Discussion and Analysis—Cash Compensation—Annual Incentive Plan.” |

  141. Potential Payments upon Termination or Change in Control

    | (4) The Annual Incentive Plan provides that if a participant’s employment is terminated during a performance period for any reason other than death or disability, the participant will immediately forfeit any right to receive any incentive compensation for such performance period. If the termination of employment occurs after the performance period has ended but prior to the date of actual payment, the participant will be entitled to payment of an amount not to exceed the amount set forth according to the terms of his or her award. The amount presented reflects the assumption that the triggering event occurred on December 31, 2023, which is the end of the performance period, and, as such, the participant would have been entitled to the amount of incentive compensation payable based on actual results for the 2023 performance period. See “Compensation Discussion and Analysis—Cash Compensation—Annual Incentive Plan.” |

  142. Potential Payments upon Termination or Change in Control

    | (5) The amount presented represents (i) the aggregate amount payable for continuation of health insurance benefits for 12 months following the date of termination of employment ($13,051), plus (ii) the aggregate amount payable for Mr. Richison’s personal security for a period of two years following his termination ($299,806, based on amounts paid in 2023), per the terms of Mr. Richison’s employment agreement. |

  143. Potential Payments upon Termination or Change in Control

    | (6) The restricted stock award agreement for the 2020 CEO Performance Award provided that upon termination of Mr. Richison’s employment as Chief Executive Officer due to his death or total and permanent disability, termination by the Company without cause, or termination as a result of Mr. Richison’s resignation for good reason, any unvested shares would remain eligible for vesting for a period of one year (but no later than the sixth anniversary of the date of grant in the case of the awarded shares subject to the $1,000 VWAP Value milestone and the tenth anniversary of the date of grant in the case of the awarded shares subject to the $1,750 VWAP Value milestone), provided, that such unvested shares would not have vested if Mr. Richison was in material breach of the non-competition restrictions in his employment agreement. The amount presented assumes that the VWAP Value milestones would not be met before December 31, 2024 and, as a result, the unvested shares underlying the 2020 CEO Performance Award would be forfeited. |

  144. Potential Payments upon Termination or Change in Control

    | (7) The amount presented is calculated based on the assumption that the VWAP Value milestones would not be met in connection with the change in control and, as a result, the unvested shares underlying the 2020 CEO Performance Award would be forfeited. |

  145. Potential Payments upon Termination or Change in Control

    | (8) The applicable award agreements provide that unvested shares of restricted stock or unvested RSUs, as applicable, vest 100% upon the participant’s death or termination of service as a result of total and permanent disability (as defined in the applicable award agreement). The restricted stock award agreements governing the terms of awards granted to Mr. Thomas and Mrs. Faurot prior to their respective appointments as executive officers provide that if at any time during the period beginning on the date of termination and ending on the 60th day following the third anniversary of the termination, the Company determines that the participant breached certain non-solicitation, non-competition, non-disparagement and confidentiality restrictions in the agreement, all awarded shares of restricted stock (whether or not vested and whether then held by the participant) shall be subject to certain forfeiture and clawback provisions. |

  146. Potential Payments upon Termination or Change in Control

    | (9) Upon a change in control (as defined in the 2014 LTIP or 2023 LTIP, as applicable), (i) the awards will continue in accordance with their terms if they are assumed by the surviving entity (or if the Company is the surviving entity) and (ii) 100% of the shares of restricted stock or RSUs not previously vested will vest if the award is not assumed by the surviving entity. For purposes of this table, we have assumed that the surviving entity will assume the obligations under the equity award and, as a result, the award will remain outstanding and subject to vesting in accordance with its terms. |

  147. Potential Payments upon Termination or Change in Control

    | (10) All unvested shares of restricted stock or unvested RSUs, as applicable, would be forfeited on the date of a termination of service without cause or by the NEO for good reason. |

  148. Potential Payments upon Termination or Change in Control

    | (11) The PSU award agreements provide that the vesting of the PSUs will accelerate at target performance upon the NEO’s death or total and permanent disability (as defined in the 2014 LTIP or 2023 LTIP, as applicable). |

  149. Potential Payments upon Termination or Change in Control

    | (12) The PSU award agreements provide that unvested PSUs will remain outstanding in connection with a change in control, absent a subsequent termination of service. If the NEO is terminated without cause (as defined in the applicable award agreement) or the NEO terminates his or her employment for good reason (as defined in the applicable award agreement) in connection with or during the 12-month period following the consummation of a change in control but prior to the applicable vesting date, (i) the 2021 PSUs and the 2022 PSUs will vest based on the greater of: (x) the target performance level for Relative TSR (i.e., 100% of the target units), or (y) the actual Relative TSR of the Company against the peer group through the date of the change in control, and (ii) the 2023 PSUs will become fully vested as of the date of such termination of service. Pursuant to the 2023 LTIP, if the 2023 PSUs are not assumed in connection with a change in control, all outstanding 2023 PSUs will vest in connection with such change in control, as follows: (i) if the payout level has been determined (or is determinable) as of such change in control, such award shall be payable in full in accordance with the payout schedule set forth in the award agreement; and (ii) if the payout level is undeterminable, the award shall be pro-rated based on the time elapsed in the applicable performance period between the date of grant and the change in control and paid at the target payout level in accordance with the payout schedule set forth in the award agreement. |

  150. Potential Payments upon Termination or Change in Control

    | (13) The PSU award agreements provide that if the NEO is terminated without cause (as defined in the applicable award agreement) or the NEO terminates his or her employment for good reason (as defined in the applicable award agreement), the PSUs shall remain outstanding and eligible for vesting based on the actual achievement of the applicable performance goals, and pro-rated based on a fraction, determined by the number of completed days of service from the date of grant through the date of the NEO’s termination of service over the total number of days in the performance period. Given the assumption that the triggering event occurred on December 31, 2023, the amount presented reflects (i) the value of shares delivered upon vesting of the second tranche of the 2021 PSUs based on actual achievement for the three-year performance period ended December 31, 2023 (0% payout), (ii) the value of shares delivered upon vesting of first tranche of the 2022 PSUs based on actual achievement for the two-year performance period ended December 31, 2023 (0% payout), (iii) with respect to the second tranche of the 2022 PSUs, assumed achievement at the target level for the three-year performance period ending December 31, 2023, pro-rated as described in the preceding sentence, and (iv) with respect to 2023 PSUs, the value of shares delivered, if any, based on actual achievement for the performance period ended December 31, 2023. |

  151. Potential Payments upon Termination or Change in Control

    | (14) The amount presented represents the aggregate amount payable for continuation of health insurance benefits for 12 months following the date of termination of employment, per the terms of Mr. Boelte’s employment agreement. |

  152. Pay Versus Performance

    Pay Versus Performance The following table provides information regarding the compensation paid to our NEOs for the fiscal years en ded December 31, 2023, 2022, 2021 and 2020 and certain measures of Company performance for such periods.

  153. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO (1) ($) | Compensation Actually Paid to PEO (2) ($) | Average Summary Compensation Table Total for Non-PEO NEOs (3) ($) | Average Compensation Actually Paid to Non-PEO NEOs (2)(3) ($) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($) | Adjusted EBITDA (6) ($) | Revenue ($) | | | | | | | Company TSR (4) ($) | Peer Group TSR (5) ($) | | | | | 2023 | 3,118,606 | (110,909,644) | 13,564,401 | 5,935,253 | 78.45 | 191.27 | 340,787,923 | 719,302,774 | 1,693,673,771 | | 2022 | 3,138,418 | (149,491,892) | 4,755,734 | 2,468,497 | 117.20 | 126.96 | 281,389,330 | 579,711,116 | 1,375,217,646 | | 2021 | 2,958,410 | 62,994,260 | 7,891,945 | 3,323,073 | 156.82 | 172.32 | 195,960,264 | 419,286,728 | 1,055,523,820 | | 2020 | 211,131,206 | 352,618,181 | 6,724,389 | 15,808,463 | 170.82 | 135.28 | 143,453,418 | 330,816,302 | 841,434,039 |

  154. Pay Versus Performance

    | (1) For each year presented, the PEO was Mr. Richison. The amounts reported in this column correspond to the amounts reported in the “Total” column of the Summary Compensation Table. |

  155. Pay Versus Performance

    | (2) The amounts reported in this column represent “ compensation actually paid” to Mr. Richison and the other NEOs (on average), as calculated in accordance with Item 402(v) of Regulation S-K. To determine the “compensation actually paid”, the amounts reported in the “Total” column of the Summary Compensation Table for the applicable year were adjusted as follows: |

  156. Pay Versus Performance

    | | 2023 | | 2022 | | 2021 | | 2020 | | | | PEO | Non-PEO NEOs (average) | PEO | Non-PEO NEOs (average) | PEO | Non-PEO NEOs (average) | PEO | Non-PEO NEOs (average) | | Summary Compensation Table Total ($) | 3,118,606 | 13,564,401 | 3,138,418 | 4,755,734 | 2,958,410 | 7,891,945 | 211,131,206 | 6,724,389 | | Adjustments | | | | | | | | | | Stock/Unit Awards ($) | - | (12,906,094) | - | (3,110,847) | - | (6,709,967) | (209,564,040) | (5,979,510) | | Fair Value of Equity Awards ($) | | | | | | | | | | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Covered Year ($) | - | 8,122,494 | - | 2,732,756 | - | 2,704,622 | 304,999,205 | 6,035,045 | | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in the Prior Year ($) | (114,028,250) | (3,359,072) | (149,874,900) | (1,397,473) | 60,715,690 | (203,452) | 11,811,870 | 2,786,664 | | Change in Fair Value of Prior Year Equity Awards Vested in the Covered Year ($) | - | (12,311) | (2,755,410) | (511,673) | (679,840) | (360,076) | (51,450) | 65,165 | | Fair Value on Vesting Date of Equity Awards Granted and Vested in the Covered Year ($) | - | 501,213 | - | - | - | - | 34,291,390 | 6,176,710 | | Total Adjustments for Fair Value of Equity Awards ($) | (114,028,250) | 5,276,947 | (152,630,310) | 823,610 | 60,035,850 | 2,141,095 | 351,051,015 | 15,063,584 | | Compensation Actually Paid ($) | (110,909,644) | 5,935,253 | (149,491,892) | 2,468,497 | 62,994,260 | 3,323,073 | 352,618,181 | 15,808,463 |

  157. Pay Versus Performance

    Equity awards granted to our PEO and other NEOs during the applicable periods included (i) shares of restricted stock subject to time-based vesting conditions, (ii) shares of restricted stock subject to market-based vesting conditions, tied to the achievement of a specified total enterprise value or specified stock price (“Market-Based RSAs”), and (iii) the 2021 PSUs, 2022 PSUs and the 2023 PSUs. To estimate the fair value of the Market-Based RSAs and PSUs with vesting conditions tied to market performance, we considered the historical performance for the Company and the peer group as applicable for each award over the realized performance period, and then simulated the enterprise value or stock prices for the Company (and the peer group, as applicable) ove r the remaining performance period. We considered the risk-free rates as of the measurement dates and the equity volatilities for each company and correlations between the companies (as applicable) as of the measurement dates using an approach consistent with the grant date fair value analysis. With respect to valuations as of December 31, 2021 and December 31, 2022, we considered the Company’s historical volatility for awards with remaining terms shorter than the Company’s trading history, and a weighted average historical equity volatility of the Company and that of the guideline public companies for awards with remaining terms longer than the Company’s trading history.

  158. Pay Versus Performance

    | (3) For the fiscal year ended December 31, 2023, the non-PEO NEOs were Mrs. Faurot and Messrs. Thomas, Boelte, Smith and Clark. For the fiscal year ended December 31, 2022, the non-PEO NEOs were Mrs. Faurot and Messrs. Boelte, Smith, Evans and Long. For the fiscal year ended December 31, 2021, the non-PEO NEOs were Mrs. Faurot and Messrs. Boelte, Smith, Evans and York. For the fiscal year ended December 31, 2020, the non-PEO NEOs were Messrs. Boelte, Smith, Evans and York. The amounts reported in this column represent the average of the amounts reported in the “Total” column of the Summary Compensation Table for the non-PEO NEOs in the applicable year. |

  159. Pay Versus Performance

    | (4) The amounts reported in this column reflect the Company’s cumulative TSR as of December 31 of each year presented, assuming an initial fixed $100 investment on December 31, 2019. |

  160. Pay Versus Performance

    | (5) The amounts reported in this column reflect the cumulative TSR of the S&P 500 Software & Services Index as of December 31 of each year presented, assuming an initial fixed $100 investment on December 31, 2019. |

  161. Pay Versus Performance

    | (6) We define adjusted EBITDA as net income plus interest expense, taxes, depreciation and amortization, non-cash stock-based compensation expense, certain transaction expenses that are not core to our operations (if any), the change in fair value of our interest rate swap (if any) and loss on the extinguishment of debt (if any). |

  162. Pay Versus Performance

    The following chart shows, for the years ended December 31, 2020, 2021, 2022 and 2023, the relationship between (i) the compensation actually paid to our PEO and the compensation actually paid, on average, to our other NEOs, and (ii) each of (x) our cumulative TSR and (y) the cumulative TSR of the peer group: The following chart shows, for the years ended December 31, 2020, 2021, 2022 and 2023, the relationship between (i) the compensation actually paid to our PEO and the compensation actually paid, on average, to our other NEOs, and (ii) each of (x) our net income, (y) our adjusted EBITDA and (z) our revenue: The following table contains the most important financial measures used to link executive compensation actually paid, for the year ended December 31, 2023, to the Company’s performance.

  163. Pay Versus Performance

    | Most Important Financial Performance Measures | | Revenue | | Adjusted EBITDA | | Annual Revenue Retention Rate | | VWAP Value |

  164. 2023 Pay Ratio Disclosure

    2023 Pay Ratio Disclosure

  165. CEO Pay Ratio

    CEO Pay Ratio As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of our Chief Executive Officer during 2023, Mr. Richison. The pay ratio is a reasonable estimate calculated in accordance with applicable SEC disclosure rules. Because of the estimates and adjustments that may be included in each company’s methodology, pay ratio disclosures may involve a degree of imprecision, and the pay ratios reported by other companies are unlikely to be relevant or meaningful for purposes of comparison to our pay ratio disclosure. Using the methodology described below, we determined that the median employee was a full-time, salaried employee. We identified and calculated the elements of the median employee’s compensation using the same methodology reflected in the “Summary Compensation Table” included elsewhere in this proxy statement. The median employee’s annual total compensation was $79,173 in 2023. The annual total compensation of Mr. Richison was $3,118,606 in 2023. Based on this information, the 2023 ratio of annual total compensation of Mr. Richison to the median annual total compensation of all employees was 39 to 1.

  166. How many votes are required to elect the Class II directors (Proposal 1)?

    How many votes are required to elect the Class II directors (Proposal 1)? Pursuant to our Amended and Restated Bylaws, directors are elected by a majority of the votes cast at any meeting for the election of directors at which a quorum is present, which means that the number of shares voted “for” a nominee’s election exceeds the number of shares voted “against” such nominee’s election. Abstentions and broker non-votes are not counted as votes cast either “for” or “against” a nominee’s election. Any incumbent director who fails to receive a majority of the votes cast in an uncontested election must tender his or her resignation to the Board of Directors. The Nominating and Corporate Governance Committee would then make a recommendation to the Board of Directors about whether to accept the resignation. The Board of Directors would consider and act on the tendered resignation, taking into account the Nominating and Corporate Governance Committee’s recommendation, within 90 days following certification of the stockholder vote, and thereafter would promptly disclose its decision whether to accept the director’s tendered resignation (and, if applicable, the reasons for rejecting the resignation) in a press release.