DEF 14A of HireQuest, Inc., Apr 30, 2026

DEF 14A of HireQuest, Inc.

Filed Apr 30, 2026 · FY20250001437749-26-014187

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. (Proposal #1)

    (Proposal #1) In evaluating the suitability of director nominations, the Nominating and Corporate Governance Committee takes into account factors such as a general understanding of various business disciplines, understanding of the Company’s business environment, backgrounds, perspectives, skills, character, judgment, diversity of experience, and ability to act on behalf of all stockholders. We do not have a formal diversity policy, however, the Nominating and Corporate Governance Committee endeavors to have a Board representing diverse viewpoints as well as diverse expertise at policy-making levels in many areas, including business, accounting and finance, marketing and sales, business development, human capital management, public company governance, growth through mergers and acquisitions, risk management and in other areas that are relevant to our activities.

  3. Nominees For Election

    Nominees For Election Richard F. Hermanns, R. Rimmy Malhotra, Lawrence F. Hagenbuch, Kathleen Shanahan, Edward Jackson, and Jack Olmstead have been nominated to serve on the Board until our next annual meeting of stockholders and until their respective successors are duly elected and qualify. Each of the nominees has consented to being named in this proxy statement and has agreed to serve as a director if elected. As of the date of this proxy statement, our Board of Directors is not aware of any nominee who is unable or will decline to serve as a director. The Board of Directors recommends that the stockholders elect the nominees named below. The Nominees: The biographical descriptions below set forth certain information with respect to each nominee for election as a Director at the Annual Meeting. The Board has identified specific attributes of each nominee that the Board has determined qualify that person for service on the Board. Richard F. Hermanns - Richard F. Hermanns, age 62, was elected as a director in July of 2019 and currently serves as President and Chief Executive Officer (sometimes referred to as "CEO") of HireQuest, Inc. Mr. Hermanns beneficially owns more than 5% of the Company's voting stock. Mr. Hermanns has over thirty five years of experience in the temporary staffing industry. He has served as Chief Executive Officer of Hire Quest, L.L.C. since its founding in 2002. He served in the same capacity for predecessor entities since July 1991. Together with Edward Jackson, Mr. Hermanns owns a majority stake in Bass Underwriters, Inc. (sometimes referred to as "Bass"), a large managing general insurance agent. Prior to founding Hire Quest and its related entities, Mr. Hermanns served as Chief Financial Officer of Outsource International, and as an Assistant Vice President for NCNB National Bank (now Bank of America). Mr. Hermanns obtained his Bachelor of Science degree in Economics and Finance from Barry University, and his Masters of Business Administration in Finance from the University of Southern California. Mr. Hermanns is also active in the charitable realm. Among his charitable pursuits, he founded the Higher Quest Foundation, a non-profit organization dedicated to fighting global hunger in a more sustainable way. The particular experience, qualifications, attributes or skills that led our Board to conclude that Mr. Hermanns should continue to serve as a director include his continued tenure leading the Company, his business acumen, and his experience in the temporary staffing and permanent placement industry. In addition, his significant ownership stake in HireQuest provides our board with a unique perspective regarding the long-term strategy of the company. R. Rimmy Malhotra - R. Rimmy Malhotra, age 50, was elected as a director on April 6, 2016. Since 2013, Mr. Malhotra has served as the Managing Member and Portfolio Manager for Nicoya Fund LP, a private investment partnership. From 2008 to 2013 he served as portfolio manager of the Gratio Values Fund, a mutual fund registered under the Investment Act of 1940. Prior to this, he was an Investment Analyst at a New York based hedge fund. Since November 2019, Mr. Malhotra has been a member of the Board of Directors of Optex Systems Holdings, Inc. (NASDAQ:OPXS), is the Chair of its Nominating and Corporate Governance Committee, and sits on its Audit and Compensation Committees. Since November 2024, Mr. Malhotra has been a member of the Board of Directors of FRMO Corp. (OTC Pink:FRMO). Since January 2025, he has served as a member of the Board of Directors of Genasys Inc. (NASDAQ:GNSS). Beginning in January 2021 and through its acquisition in 2024, he served on the Board of Directors and was Chair of the Audit Committee for Scott’s Liquid Gold-Inc. (OTCBB:SLGD). He earned an MBA in Finance from The Wharton School of the University of Pennsylvania and a Master’s degree in International Relations from the University of Pennsylvania where he was a Lauder Fellow. Mr. Malhotra holds undergraduate degrees in Computer Science and Economics from Johns Hopkins University. The particular experience, qualifications, attributes or skills that led our Board to conclude that Mr. Malhotra should continue to serve as a director of our Company include his experience with public equity, including his service on the boards of directors of multiple public companies, and his qualifications as a financial matters expert. Lawrence F. Hagenbuch - Lawrence F. Hagenbuch, age 59, was elected as a director in 2018. Mr. Hagenbuch chairs our Audit Committee. He brings extensive operations and board experience to the Company, along with expertise in the creation of innovative marketing and planning strategies. Mr. Hagenbuch has, since July 2022, been serving as an Operating Partner at Crossplane Capital, a private equity firm focused on control-oriented investments in middle-market companies. Prior to joining Crossplane Capital, he was a Managing Director with Huron Consulting from August 2018 through May 2022, where he led turnaround and interim management engagements, frequently serving in senior financial and operational leadership roles. In March 2026, Mr. Hagenbuch was appointed to the Board of Directors of Genasys Inc. (NASDAQ: GNSS), where he currently serves as the chair of the Audit Committee. Mr. Hagenbuch served on the Board of Directors of Optex Systems Holdings, Inc. (NASDAQ:OPXS) from November 2019 until February 2023, where he was chair of the Audit Committee and served on the Compensation and Nominating and Corporate Governance Committees. Mr. Hagenbuch served on the Board of Directors and the Audit and Compensation Committees of Remy International, Inc. (NASDAQ:REMY) from 2008 until the sale of the company in 2015. He also served on the Board of Directors of Arotech Corporation (NASDAQ:ARTX). Mr. Hagenbuch has served in senior management positions at J. Hilburn, Alix Partners, GE / GE capital, and American National Can. Mr. Hagenbuch began his professional career in the United States Navy. He earned an undergraduate degree in engineering from Vanderbilt University on a full Navy ROTC scholarship. He later earned an MBA from the Wharton School of the University of Pennsylvania. The particular experience, qualifications, attributes or skills that led our Board to conclude that Mr. Hagenbuch should continue to serve as a director of our Company include his years of operating experience at both large and growth-oriented companies, in addition to his experience as a director of other public companies.

  4. Nominees For Election

    Kathleen Shanahan - Kathleen Shanahan, age 66, was elected to the Board of Directors in July of 2019. Ms. Shanahan presently serves as Senior Advisor to Turtle & Hughes, Inc. where she served as Chief Executive Officer from 2018 until January 1, 2024. Established in 1923, Turtle & Hughes ranks among the nation’s top twenty electrical distribution companies serving the industrial, construction, commercial, electrical contracting, export, and utility industries. Turtle & Hughes operates in the United States, Canada, Mexico, and Puerto Rico and is a certified women-owned business. She currently serves on the board of directors of Mosaic Co. (NYSE:MOS) and Turning Point Brands (NYSE TPB). Ms. Shanahan was previously Chair and Chief Executive Officer, of Ground Works Solutions, formerly URETEK Holdings, Inc., a corporation focused on soil stabilization and densification. She served as a member of the Board of Directors of Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) from 2018 through April 1, 2026, of the Board of Directors and Audit Committee of TRC Companies, Inc. (NYSE:TRR) from 2015 through 2017, and as a member of the Board of Directors and Chair of the Executive Compensation Committee of WCI Communities, Inc. (NYSE:WCI) from 2004 through 2007. Ms. Shanahan has also been the CEO and Chairperson of WRSCompass, an environmental engineering and contracting company with a national footprint. She served as Chief of Staff for Florida Governor Jeb Bush, Chief of Staff for Vice President-elect Dick Cheney, Deputy Secretary of the California Trade and Commerce Agency for Governor Wilson, Special Assistant to then Vice President George H. W. Bush, and Staff Assistant to President Ronald Reagan’s National Security Council. She received her undergraduate degree in Nutrition and Biochemistry from the University of California, San Diego, Revelle College, and her MBA from New York University. The experience, qualifications, attributes, or skills that led our Board to conclude that Ms. Shanahan should continue to serve as a director of our Company include her proven leadership skills, her various business and political relationships, and her service as both executive and director of multiple organizations. Edward Jackson - Edward Jackson, age 60, was elected to the Board of Directors in July of 2019. Mr. Jackson beneficially owns more than 5% of the Company's voting stock. Mr. Jackson has more than 35 years of experience in the insurance industry. He is currently the president of Bass Underwriters, Inc., in which he and Mr. Hermanns own a majority stake. In his capacity as president of Bass he oversees all management operations, marketing strategies, underwriting reviews, and claims procedures. He also has diverse business holdings in industries other than insurance. He was previously a member of and consultant to one of the Company's predecessors and its affiliates. He owns and is president of one of the largest Haagen Dazs franchise stores in North America, and he founded a company that provides inspection services for insurance carriers nationwide. He holds a Bachelor of Science degree in Risk Management and Insurance from Florida State University. He holds insurance licenses in General Lines (Property & Casualty), and Surplus Lines, Health, and Life. The particular experience, qualifications, attributes or skills that led our Board to conclude that Mr. Jackson should continue to serve as a director include his business acumen, his experience leading a large managing general agent, his franchising experience, and his experience in the insurance industry. Jack Olmstead – Jack Olmstead, age 72, was appointed to our Board of Directors in June 2020. He has served as President of Tri-City Electrical Contractors, Inc., one of Florida’s leading electrical contractors, since 2001, and has over 38 years of operations and management experience in electrical construction. Mr. Olmstead has served previously as President of the Gulf Coast Chapter of the Associated Builders and Contractors, Inc. He currently serves on the boards of the CEO Council of Tampa and Build Tampa Bay. He has served on the Board of Directors for the Central Florida Chapter of the Children’s Home Society of Florida and is a dedicated supporter for Lifepath Hospice and PACE Center for Girls in Hillsborough County. The particular experience, qualifications, attributes and skills that led our Board to conclude that Mr. Olmstead should serve as a director of our Company include his many years of operational experience in an industry we serve, his participation in strategic planning and growth of a company in a related industry, and his many business connections.

  5. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following individuals served as Directors of HireQuest, Inc. during all of 2025: Richard F. Hermanns, R. Rimmy Malhotra, Edward Jackson, Lawrence Hagenbuch, Kathleen Shanahan, and Jack Olmstead. The following table summarizes the compensation we paid to non-employee directors during 2025. Compensation paid to Mr. Hermanns is disclosed under “Compensation of Named Executive Officers – Summary Compensation Table” below.

  6. DIRECTOR COMPENSATION

    | Name | Fees earned or paid in cash | Stock awards (1) | Option awards | Total | | Edward Jackson | $- | $83,681 | $- | $83,681 | | Jack Olmstead | - | 94,472 | - | 94,472 | | Kathleen Shanahan | 37,875 | 55,632 | - | 93,507 | | Lawrence F. Hagenbuch | - | 93,883 | - | 93,883 | | R. Rimmy Malhotra(2) | - | 109,473 | - | 109,473 | | Total | $37,875 | $437,141 | $- | $475,016 |

  7. DIRECTOR COMPENSATION

    | 1. | This column represents the grant date fair value of shares awarded to each non-employee director (and earned in 2025) in accordance with U.S. GAAP. The amounts were calculated using the closing price of our stock on the grant date. These amounts include all vested and unvested shares. All amounts in this column represent the value of stock elected in-lieu of cash retainers. | | 2. | At the end of the fiscal year, Mr. Malhotra had options to purchase 8,750 shares of common stock with an average strike price of $5.50 per share. 100% of these options have vested. |

  8. The Director Compensation Plan

    The Director Compensation Plan On September 23, 2019, the Board of Directors adopted and approved the 2019 HireQuest, Inc. Non-Employee Director Compensation Plan (the “Director Compensation Plan”). On September 25, 2019, the Board adopted and approved certain revisions to the plan. All subsequent references in this proxy statement to “Director Compensation Plan” include such revisions. The Director Compensation Plan remained in effect in 2025.

  9. Summary Compensation Table

    Summary Compensation Table The following table summarizes the compensation earned by our NEOs during 2025 and 2024:

  10. Summary Compensation Table

    | Name and Principal Position | Year | Salary | Bonus | Stock awards(1) | Option awards | Non-Equity Incentive Plan Compensation | All other compensation | Total | | Richard F. Hermanns | 2025 | $408,077 | $- | $- | $- | $36,122(2) | $12,067(3) | $456,266 | | President, Chief Executive Officer, and Chairman | 2024 | 400,465 | - | - | - | 48,651(4) | - | 449,116 | | John McAnnar | 2025 | 245,384 | - | - | - | 36,400(5) | 9,530(6) | 291,314 | | Secretary, Chief Legal Officer, Vice President | 2024 | 240,056 | 25,000(7) | - | - | 21,600(8) | - | 286,656 | | C. David R. Hartley* | 2025 | 220,664 | - | - | - | 36,400(9) | 7,092(10) | 264,156 | | Chief Financial Officer | 2024 | 184,976 | - | 101,250 | - | - | - | 286,226 |

  11. Summary Compensation Table

    * Appointed Chief Financial Officer May 31, 2025, however, 2024 and 2025 numbers include amounts paid by the Company prior to and after appointment as Chief Financial Officer.

  12. Summary Compensation Table

    | 1. | This column represents the grant date fair value of shares awarded in accordance with U.S. GAAP. The amounts were calculated using the closing price of our stock on the grant date. | | 2. | Includes 2025 Pre-Tax Income Bonus and Sales Increase Bonus as defined in Mr. Hermanns' employment agreement as well as matched funds contributed by the Company to deferred compensation plans. | | 3. | Includes matching contributions made by the Company for contributions made by the executive to the Company's nonqualified deferred compensation plan. | | 4. | Includes 2024 Pre-Tax Income Bonus and Sales Increase Bonus as defined in Mr. Hermanns' employment agreement. | | 5. | Includes 2025 Performance Bonus as defined in Mr. McAnnar's employment agreement. | | 6. | Includes matching contributions made by the Company for contributions made by the executive to the Company's nonqualified deferred compensation plan. | | 7. | Discretionary bonus. | | 8. | Includes 2024 Performance Bonus as defined in Mr. McAnnar's employment agreement. | | 9. | Includes 2025 Performance Bonus as defined in Mr. Hartley's employment agreement. | | 10. | Includes matching contributions made by the Company for contributions made by the executive to the Company's nonqualified deferred compensation plan. |

  13. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table shows our outstanding equity awards held by Named Executive Officers as of December 31, 2025:

  14. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | Stock Awards | | | Name | Number of shares underlying vested options | Number of shares underlying non-vested options | Option exercise price | Option expiration date | Number of shares of stock that have not vested (1) | Market value of shares of stock that have not vested (2) | | Richard F. Hermanns | - | - | - | - | 29,890 | $314,144 | | John McAnnar | - | - | - | - | 13,125 | 137,944 | | C. David R. Hartley | - | - | - | - | 18,750 | 197,063 |

  15. Outstanding Equity Awards at Fiscal Year End

    | 1. | These shares vest between June 30, 2026 and March 31, 2030. |

  16. Outstanding Equity Awards at Fiscal Year End

    | 2. | The market value is based on our closing stock price of $10.51 on December 31, 2025. |

  17. Pay Versus Performance

    Pay Versus Performance The Company is providing the following disclosure in response to Item 402(v) of Regulation S-K. The information set forth below was not used by the Compensation Committee in setting compensation for our named executive officers as set forth in the Summary Compensation Table. The disclosure in this section is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

  18. Pay Versus Performance Table

    Pay Versus Performance Table

  19. Pay Versus Performance Table

    | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (3) | Net Income | | 2025 | $456,266 | $425,138 | $222,080(4) | $206,866(5) | $70 | $6,330,000 | | 2024 | 449,116 | 389,536 | 274,128 | 261,440 | 92 | 3,672,000 | | 2023 | 1,348,385 | 1,527,565 | 310,435(6) | 318,101(7) | 98 | 6,135,000 |

  20. Pay Versus Performance Table

    | 1. | Reflects, in column (b), total compensation reported in the Summary Compensation Table (SCT) for our chief executive officer, Richard F. Hermanns, and, in column (d), average total compensation reported in the SCT for our non-PEO named executive officers, in each case for the years 2025, 2024, and 2023. The non-PEO named executive officers for all or a portion of 2025 are Steve G. Crane, C. David R. Hartley, and John D. McAnnar. The non-PEO named executive officers for all or a portion of 2024 are Steve G. Crane and John D. McAnnar. The non-PEO named executive officers for all or a portion of 2023 are David Burnett, Steve G. Crane and John D. McAnnar. | | 2. | Reflects, in column (c), compensation actually paid to our PEO and, in column (e), average compensation actually paid to our non-PEO named executive officers, in each case for the years 2025, 2024, and 2023, consisting of the respective amounts set forth in columns (b) and (d) of the table, adjusted as set forth in the applicable table below, as determined in accordance with SEC rules. | | 3. | Represents the cumulative total shareholder return (TSR) of the Company for the measurement periods ending on December 31 of each of 2025, 2024, and 2023, respectively assuming an investment of $100 on December 31, 2022. The TSR reflected in this column for each applicable fiscal year is calculated based on a fixed investment of $100 at the applicable measurement point on the same cumulative basis as is used in Item 201(e) of Regulation S-K and assumes reinvestment of all dividends. | | 4. | Because Steve Crane served as CFO until May 31, 2025 when C. David R. Hartley replaced him, and because the two did not overlap, the value in this item may appear to be lower than it would have been in a year without a change in principal financial officer. If the compensation paid to the two during their respective tenures as CFO had been aggregated and treated as one for purposes of this calculation, the average would have been higher. | | 5. | See note 4, above. | | 6. | Because David Burnett served as CFO until November 13, 2023 when Steve G. Crane replaced him, and because the two did not overlap, the value in this item may appear to be lower than it would have been in a year without a change in principal financial officer. If the two had been aggregated and treated as one for purposes of this calculation, the average would have been $465,653. | | 7. | See note 6, above. |

  21. Pay Versus Performance Table

    The following table sets forth the adjustments made during each year represented in the Pay Versus Performance Table to arrive at compensation "actually paid" to our PEO during each of the years in question:

  22. Pay Versus Performance Table

    | Adjustments to Determine Compensation "Actually Paid" for PEO | 2025 | 2024 | 2023 | | Deduction for amounts reported under the "Stock awards" column and stock portion of "Non-Equity Plan Incentive Compensation" column in the SCT | $- | $- | $- | | Deduction for amounts reported under the "Option awards" columns in the SCT | - | - | - | | Increase for Fair Value* as of year-end of awards granted during year that remain outstanding and unvested as of year end | - | - | - | | Increase for Fair Value* as of the vesting date of awards granted during year that vested during year | - | - | - | | Increase/deduction for Change in Fair Value* from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | 29,255 | (30,946) | (5,885) | | Increase/deduction for Change in Fair Value* from prior year-end to vesting date of awards granted prior to year that vested during year | (60,489) | (39,542) | 170,822 | | Deduction of Fair Value* as of prior year-end of awards granted prior to year that were forfeited during year | - | - | - | | Increase based upon Incremental Fair Value*, if any, of awards modified during year | - | - | - | | Increase based upon dividends or other earnings paid during year prior to vesting date of award that are not otherwise included in total compensation | 106 | 10,908 | 14,242 | | Total Adjustments | (31,128) | (59,580) | 179,180 |

  23. Pay Versus Performance Table

    *Awards include those in the "Stock awards" column and the stock portion of the "Non-Equity Incentive Plan Compensation" column. The Fair Value or Change in Fair Value, as applicable, of the equity award adjustments was computed in accordance with FASB ASC Topic 718. The valuation assumptions used to calculate such Fair Values, such as assumed volatility and risk-free rate differ from those used at the time of grant due to the fluctuation in the stock price and the corresponding Monte Carlo Value simulations valued as of the corresponding dates in accordance with Item 402(v) of Regulation S-K. The following table sets forth the adjustments made during each year represented in the Pay Versus Performance Table to arrive at average compensation "actually paid" to our Non-PEO named executive officers during each of the years in question:

  24. Pay Versus Performance Table

    | Adjustments to Determine Average Compensation "Actually Paid" for Non-PEO Named Executive Officers | 2025 | 2024 | 2023 | | Deduction for amounts reported under the "Stock awards" column and stock portion of "Non-Equity Plan Incentive Compensation" column in the SCT | $- | $- | $105,600 | | Deduction for amounts reported under the "Option awards" column in the SCT | - | - | - | | Increase for Fair Value* as of year-end of awards granted during year that remain outstanding and unvested as of year-end | - | - | 102,333 | | Increase for Fair Value* as of the vesting date of awards granted during year that vested during year | - | - | - | | Increase/deduction for Change in Fair Value* from prior year-end to current year-end of awards granted prior to year that were outstanding and unvested as of year-end | 14,829 | (12,644) | (1,288) | | Increase/deduction for Change in Fair Value* from prior year-end to vesting date of awards granted prior to year that vested during year | (30,558) | (2,763) | 10,124 | | Deduction of Fair Value* as of prior year-end of awards granted prior to year that were forfeited during year | - | - | - | | Increase based upon Incremental Fair Value*, if any, of awards modified during year | - | - | - | | Increase based upon dividends or other earnings paid during year prior to vesting date of award that are not otherwise included in total compensation | 516 | 2,719 | 2,097 | | Total Adjustments | (15,214) | (12,688) | 7,666 |

  25. Pay Versus Performance Table

    *Awards include those in the "Stock awards" column and the stock portion of the "Non-Equity Incentive Plan Compensation" column. The Fair Value or Change in Fair Value, as applicable, of the equity award adjustments was computed in accordance with FASB ASC Topic 718. The valuation assumptions used to calculate such Fair Values, such as assumed volatility and risk-free rate differ from those used at the time of grant due to the fluctuation in the stock price and the corresponding Monte Carlo Value simulations valued as of the corresponding dates in accordance with Item 402(v) of Regulation S-K.

  26. Pay Versus Performance Comparative Disclosure

    Pay Versus Performance Comparative Disclosure Compensation Actually Paid and Total Shareholder Return The Company believes that the amount of "compensation actually paid" to our PEO and "average compensation actually paid" to our other NEOs is appropriately aligned with the Company's total shareholder return set forth in the above table. This alignment is due, in large part, to the fact that a significant portion of the compensation paid to our NEOs is comprised of equity awards, including contractual bonuses which our executives may elect to receive fully or partially in Company stock. While the summary compensation table does not reflect stock compensation in 2025, which would have been aligned to historical cycles, due to executive employment agreement negotiations, the shares which would have been granted in 2025 were actually granted in early 2026. Going forward, the Company expects to resume its cycle of stock grants every other year. For example, in 2023, approximately 34.0% of the value of total compensation awarded to our non-PEO NEOs was comprised of equity awards of restricted shares of company common stock. Given the renewal cycle of our PEO's contract his 2023 total compensation did not include equity. In 2022, approximately 36.6% of the value of total compensation awarded to our NEOs, including our PEO, was comprised of equity awards of restricted shares of Company common stock inclusive of stock elections in lieu of cash bonus payments. We expect the percentage of total compensation for stock issuances to be similar in 2026. Because our NEOs are awarded restricted shares of common stock upon renewal of their employment agreements which occurs every two years, the amounts listed in the "Stock Awards" column of the SCT appear to vary significantly. While TSR was negative in 2025 compared to 2024, we believe our industry faced significant headwinds in 2025 and that TSR has been impacted as a result. Compensation Actually Paid and Net Income The Company believes that the amount of "compensation actually paid" to our PEO and "average compensation actually paid" to our other NEOs is appropriately aligned with the Company's net income as set forth in the above table. This alignment is due, in large part, to the bonus structure the Compensation Committee has in place for our NEOs. Historically, the bonus has been a significant driver of total compensation, particularly, with respect to our PEO. The bonus, with respect to our PEO, has historically largely been tied to an increase in system-wide sales, which, in turn, contributes directly to our revenue. Beginning in 2026 and moving forward, the Compensation Committee has replaced the emphasis on system-wide sales growth with an emphasis on Adjusted EBITDA growth which they believe will further align PEO pay with net income. For our Non-PEO NEOs, bonuses are determined based on a formula with inputs regarding six key profitability drivers: same store system-wide sales increase, new store system-wide sale increase, sales from acquisitions, maintenance of permanent payroll within historical norms, improvement on accounts receivable turns, and improvements in our workers' compensation loss ratio. Average compensation for our Non-PEO NEOs remained relatively stable in 2025 compared to 2024 which corresponded to relatively similar net income provided that our net income in 2024 was adjusted for a one-time non-cash write off of intangible assets as more fully described in our Annual Report on Form 10-K for 2024.