DEF 14A of Vertex, Inc.
Filed Apr 28, 2025 · FY20240001558370-25-005687
Proposal 1: Election of Directors
Proposal 1: Election of Directors Our Board, after consultation with the Nominating and Governance Committee, has nominated Philip Saunders, J. Richard Stamm, and Mark J. Mendola as Class II Director nominees to be elected to hold office until the annual meeting of stockholders to be held in 2028 and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the three nominees receiving the highest number of affirmative “FOR” votes will be elected as Class II Directors. Votes withheld and broker non-votes will have no effect on the outcome of the vote on this proposal. Our Board currently consists of seven members, which includes one employee director, our President and Chief Executive Officer, David DeStefano. Our Amended and Restated Certificate of Incorporation (“Charter”) and Second Amended and Restated Bylaws (“Bylaws”) provide that the authorized number of directors shall be fixed from time to time by a resolution of the majority of our Board. Our current non-employee directors are:
Proposal 1: Election of Directors
| Name | Age | | Eric Andersen | 63 | | Philip Saunders | 59 | | Amanda Westphal Radcliffe | 57 | | J. Richard Stamm | 69 | | Stefanie Westphal Thompson | 62 | | Bradley Gayton | 62 |
Proposal 1: Election of Directors
Our Board is divided into three staggered classes of directors of the same or nearly the same number. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the directors of the same class whose terms are then expiring. The terms of the directors will expire upon the election and qualification of successor directors at the annual meeting of stockholders to be held during the years 2025 for the Class II Directors, 2026 for the Class III Directors and 2027 for the Class I Directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class shall consist of one-third of the directors. The division of our Board into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control. If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of Common Stock represented by the proxy for the election as Class II Directors the persons whose names and biographies appear below. All of the persons whose names and biographies appear below are currently serving as our directors, with the exception of Mark J. Mendola, who is standing for election as a new director nominee. In the event any of the nominees should become unable to serve or for good cause will not serve as a director, it is intended that votes will be cast for a substitute nominee designated by the Board or the Board may elect to reduce its size. The Board has no reason to believe the nominees named below will be unable to serve if elected. Each of the nominees has consented to being named in this Proxy Statement and to serve if elected.
Nominees for Class II Directors (terms to expire at the 2028 Annual Meeting)
Nominees for Class II Directors (terms to expire at the 2028 Annual Meeting) The nominees for Class II Directors are as follows:
Nominees for Class II Directors (terms to expire at the 2028 Annual Meeting)
| Name | Age | Served as a Director Since | Positions with Vertex | | Philip Saunders | 59 | 2022 | Director | | J. Richard Stamm | 69 | 2019 | Director | | Mark J. Mendola | 61 | 2025 | Director |
Nominees for Class II Directors (terms to expire at the 2028 Annual Meeting)
The following sets forth the names and biographical summaries as of the Records Date of the individuals who are our nominees for election as directors of the Company, all of whom are current directors of the Company with the exception of Mark J. Mendola, who is standing for election as a new director nominee. A third-party search firm was hired to assist with the new director search process. Philip Saunders joined our Board in June 2022. Mr. Saunders is the Chief Executive Officer of Relativity since December 2022. He was recently the Chief Executive Officer and member of the board of directors of Cornerstone OnDemand, a market leading talent management Software as a Service (SaaS) company. Mr. Saunders successfully implemented a company transformation initiative resulting in a return to growth, expansion of profitability, and increased customer retention. Mr. Saunders ultimately executed a successful sales process of the company via a public-to-private transaction in October 2021 with the acquisition by Clearlake Capital. This followed Cornerstone’s acquisition in April 2020 of Saba Software, Inc., where Mr. Saunders was a member of Saba’s board of directors, and served as Chief Executive Officer, where he was responsible for leading the transformation of the business, executed on multiple acquisitions, and accelerated growth and EBITDA expansion. Prior to joining Saba in 2015, Mr. Saunders was President and a member of the board of directors of SafeNet, Inc. (acquired by Gemalto N.V.). Mr. Saunders is a member of the National Association of Corporate Directors (“NACD”). Mr. Saunders holds an MBA with an International Finance concentration from Seton Hall University’s W. Paul Stillman School of Business. Mr. Saunders has been recognized by Comparably as one of the top 100 Best CEO’s in 2021. We believe that Mr. Saunders is qualified to serve on our Board because of his intimate knowledge of the global Software and SaaS markets by virtue of his multiple roles as Chief Executive Officer of various software companies, operational expertise, and industry knowledge and experience. J. Richard Stamm joined our Board in January 2019. Prior to joining our Board, Mr. Stamm was a partner with PricewaterhouseCoopers LLP (“PwC’) for 30 years, during which time he served a long list of domestic and international clients and held numerous leadership positions. Over the final 12 years of his career with PwC, Mr. Stamm was the firm’s Vice Chairman and U.S. Tax Leader, and then progressed to PwC’s Vice Chairman of Global Tax. Mr. Stamm is Vice President and Chief Financial Officer of Stamm Development Group LLC, a Philadelphia and South Florida area real-estate developer. Mr. Stamm is a member of the Advisory Board of Siegfried Advisory, LLC, member emeritus of the Board of Advisors for the Leventhal School of Accounting at the University of Southern California, and was formerly a member of the Boards of Germantown Academy and Lycoming College. Mr. Stamm received a BA in Accounting from Lycoming College. We believe that Mr. Stamm is qualified to serve on our Board because of his significant industry and corporate finance experience. Mark J. Mendola is a nominee for director to join our Board at the Annual Meeting. Mr. Mendola was previously the US Vice Chair and Managing Partner, US Leadership Team, at PwC from 2016 until 2024. During his tenure he grew revenue significantly and drove profitability and share value to record levels through the transformation to digital and global delivery. Mr. Mendola led PwC’s businesses, developed and executed firmwide growth strategies, and led PwC’s efforts to transform business models and service offerings through technology and had overall responsibility for the firm’s people and digital transformation strategies. Mr. Mendola also held the position of PwC US Tax Leader, US Leadership Team, Global Tax Leadership Team from 2011 – 2016, PwC US Tax Managing Partner from 2009 – 2011, PwC Leader, Canadian Tax Practice from 2007 – 2009, and PwC Office Managing Partner, Detroit, US Automotive Sector Leader and Global Tax Automotive Sector Leader from 2003 – 2007. Mr. Mendola is a member of the Detroit Economic Club Board of Directors and Oakland University, School of Business Administration Board of Visitors (Emeritus). Mr. Mendola received an MBA from the University of Notre Dame, and a BA in Accounting from Oakland University. We believe that Mr. Mendola is qualified to serve on our Board because of his extensive industry and corporate finance experience. A VOTE IS REQUIRED FOR THIS PROPOSAL. This proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the three nominees receiving the highest number of affirmative “FOR” votes will be elected as directors. Votes withheld and broker non-votes will have no effect on the outcome of the vote on this proposal. RECOMMENDATION OF THE BOARD: The Board unanimously recommends a vote FOR the election of Philip Saunders J. Richard Stamm, and Mark J. Mendola.
Continuing Members of the Board
Continuing Members of the Board
Class III Directors (terms to expire at the 2026 Annual Meeting)
Class III Directors (terms to expire at the 2026 Annual Meeting) The current members of the Board who are Class III Directors are as follows:
Class III Directors (terms to expire at the 2026 Annual Meeting)
| | | Served as a | | | Name | Age | Director Since | Positions with Vertex | | Eric Andersen | 63 | 2008 | Director | | David DeStefano | 62 | 2016 | Chief Executive Officer, President, Chairperson |
Class III Directors (terms to expire at the 2026 Annual Meeting)
The principal occupations and business experience, for at least the past five years, of each Class III Director are as follows: Eric Andersen joined our Board in January 2008 and currently serves as lead independent director. He has over 25 years of consulting and management experience at IBM, PwC, and PwC Consulting. His last 15 years have been spent in private equity. He is currently a part-time operating partner at PeakEquity (“Peak”), a Philadelphia-based private equity firm focused on lower middle market enterprise software. In addition, he is serving as an Adjunct Professor at the Villanova School of Business. Prior to joining Peak, Mr. Andersen was a partner at Milestone Partners, a Philadelphia-based private equity firm and he was a managing director at Silver Lake Partners, a technology-focused private equity firm based in New York. During his tenures with PwC, PwC Consulting, and IBM, Mr. Andersen was a senior partner and senior executive leading several businesses in the United States and Asia as well as globally. Mr. Andersen is currently a director of American Public Education Inc., a publicly traded online higher education company where he is also a member of the management development and compensation committee and was Chairman from May 2020 until March 2025. Mr. Andersen is also a member of NACD. Mr. Andersen holds an MBA from the Wharton School at the University of Pennsylvania and a BS from Bucknell University. We believe that Mr. Andersen is qualified to serve on our Board because of his extensive experience in building and leading companies, as well as his public company experience and significant operational and strategic expertise. David DeStefano became our President and Chief Executive Officer in November 2016, joined our Board in 2016 and was appointed Chairperson of our Board in 2020. Between 2015 and 2016 he was an Executive Vice President and a member of the Company’s Executive Council, which monitored our long-term strategic and financial viability, corporate brand, and culture. Mr. DeStefano previously served as our Vice President, Chief Financial Officer and Executive Vice President. Prior to joining the Company, Mr. DeStefano was Principal and Vice President at The Mid Atlantic Companies Ltd. Mr. DeStefano is also on the Advisory Board for Corporate & Foundation at the Satell Institute, is on the Board of Trustees of the Joseph Fund in Camden, New Jersey, and is a member of NACD. Mr. DeStefano received a BS in Finance from Lehigh University. We believe that Mr. DeStefano is qualified to serve on our Board because of the perspective and experience he brings as our Chief Executive Officer and his knowledge of our Company and our business.
Class I Directors (terms to expire at the 2027 Annual Meeting)
Class I Directors (terms to expire at the 2027 Annual Meeting) The current members of the Board who are Class I Directors are as follows:
Class I Directors (terms to expire at the 2027 Annual Meeting)
| | | Served as a | | | Name | Age | Director Since | Positions with Vertex | | Amanda Westphal Radcliffe | 57 | 1993 | Director | | Stefanie Westphal Thompson | 62 | 1991 | Director | | Bradley Gayton | 62 | 2021 | Director |
Class I Directors (terms to expire at the 2027 Annual Meeting)
The principal occupations and business experience, for at least the past five years, of each Class I Director are as follows: Amanda Westphal Radcliffe has served on our Board since 1993. Prior to joining our Board, Ms. Radcliffe served in a variety of roles at the Company, from technical software instructor, to finance, production, and middle market product teams. Prior to joining the Company, she was a Managing Director at Rosenbluth International, since acquired by American Express. Ms. Radcliffe is Founding Member Emeritus of the Neurodiversity Employment Network of Philadelphia and serves on the St. Joe’s University Kinney Center for Autism Education and Support Advisory Board. Ms. Radcliffe is Chair Emeritus of the Children’s Hospital of Philadelphia Foundation Board of Advisors, Chair Emeritus of the Drexel University, A.J. Drexel Autism Institute Board, and Chair Emeritus of Breastcancer.org. Ms. Radcliffe is also a member of the Philadelphia Chapter of Women Corporate Directors and NACD. Ms. Radcliffe holds a BA from Moravian University. We believe that Ms. Radcliffe is qualified to serve on our Board because of her extensive knowledge of our Company and our business derived from her longtime service with the Company. Stefanie Westphal Thompson has served on our Board since 1993. She joined the Company in 1991 and has served in a variety of roles, including Treasurer. Prior to joining the Company, Ms. Thompson was a Vice President at Chemical Bank (now part of Chase), where she specialized in managing the banking relationship for middle market companies. Ms. Thompson sat on Bryn Mawr Hospital’s Foundation Board for eight years, serving as Head of their Trustee Committee and as Vice-Chair and is a member of NACD. Ms. Thompson also served on the Board of the Agnes Irwin School in Rosemont, Pennsylvania, for ten years, heading its Trustees Committee. Ms. Thompson earned an MBA in Finance from Fordham University and has a dual BA in Engineering and Economics from Lafayette College. We believe that Ms. Thompson is qualified to serve on our Board because of her corporate finance experience as well as her knowledge of our Company and our business derived from her longtime service with the Company. Bradley Gayton joined our Board in 2021. Mr. Gayton previously served as the Senior Vice President, General Counsel of the Coca-Cola Company. Prior to joining The Coca-Cola Company, Mr. Gayton spent 29 years in various leadership positions at Ford Motor Company and most recently as Group Vice President, Chief Administrative Officer and General Counsel. Mr. Gayton has deep experience in law, governance, tax and technology. He brings a global perspective in terms of the tax obligations for multinational enterprises and has experience in developing solutions through organizational innovation. While at Ford, he led explorations to see how artificial intelligence could be used for different business applications and collaborated with Vertex on the company’s tax compliance solutions worldwide. Mr. Gayton is a member of NACD. Mr. Gayton has a BS in Business Administration from the State University of New York at Buffalo, School of Management in 1986 and a JD from the State University of New York at Buffalo, Law School. We believe Mr. Gayton is qualified to serve on our Board because of his expertise in the legal field and his significant public company experience. Ms. Radcliffe and Ms. Thompson are siblings. In connection with the initial public offering (“IPO”) of our Class A Common Stock in July 2020, we entered into a Stockholders’ Agreement with Amanda Westphal Radcliffe, Stefanie Westphal Thompson and Jeffrey Westphal, with Ms. Radcliffe and Ms. Thompson serving as members of our Board, and their affiliated trust entities and family members (the “Stockholders’ Agreement”). Under the Stockholders’ Agreement, Mr. Westphal nominated Bradley Gayton and Ms. Radcliffe and Ms. Thompson nominated themselves, and were elected to our Board as Class I Directors at the Vertex 2021 Annual Meeting. There are no other family relationships among any of our other executive officers or directors.
Board of Directors
Board of Directors Our Board sets high standards for Vertex’s employees, officers, and directors. Implicit in this philosophy is the importance of sound corporate governance. It is the duty of the Board to serve as a prudent fiduciary for stockholders and oversees material business matters, such as strategy, risk, and ethical behavior.
Executive Compensation Philosophy and Objectives
| ● | Providing competitive compensation packages that are designed to reward executives for excellence in leadership, driving company performance and facilitate executive retention; and |
Executive Compensation Philosophy and Objectives
| ● | Effectively aligning our executives’ interests with those of our stockholders through short-term and long-term performance goals that directly correlate to successful implementation of our business strategy. |
Executive Compensation Philosophy and Objectives
| ✓ | Engaged an independent compensation consultant to advise our Human Capital Committee and perform a risk assessment on executive compensation arrangements.X | Reprice our stock option awards and our equity incentive plan expressly forbids exchanging underwater options for cash without stockholder approval. | | ✓ | Maintain an anti-hedging/anti-pledging/Insider Trading Compliance Policy governing all employees and directors. | |
Determination of Compensation
Determination of Compensation Role of Board /Human Capital Committee/Executive Officers During fiscal 2024, our Board, with respect to our CEO, and our Human Capital Committee, with respect to each other named executive officer was responsible for designing and administering executive compensation programs with respect to our named executive officers. In each case the Human Capital Committee took into account recommendations from AON, and the compensation arrangements were also influenced by a variety of factors, including the relevant experience of the individual, competitive standards of pay, business conditions and performance. Our CEO made recommendations to the Board and the Human Capital Committee to assist in determining fiscal 2024 compensation levels (except with respect to his compensation). While the Board and the Human Capital Committee utilized this information, the ultimate decisions regarding fiscal 2024 executive compensation were made by the Board and the Human Capital Committee in its own independent judgment. Role of Compensation Consultant When making compensation decisions in fiscal 2024, our Human Capital Committee considered advice and data provided by AON for guidance regarding our executive compensation program and how our compensation practices compare to the compensation practices of other peer companies. The Human Capital Committee analyzed a comparative framework of external market data comprised of both specific peers in the software and services industry with similar business and financial profiles as us, as well as size-appropriate comparisons in the software product services and tech industry. The Human Capital Committee analyzed the public company market data for executive compensation as a general indicator of relevant market conditions and pay practices, focusing on revenue, market capitalization, industry and talent competitors. In particular, the Human Capital Committee reviewed compensation data from the following peer group as a reference source, developed in consultation with AON:
Determination of Compensation
This peer group was adjusted from the peer group used for fiscal 2023 compensation decisions to remove Anaplan, Avalara, Bottomline Technologies, Coupa Software, Momentive Global, and NewRelic due to each being acquired as well as Fair Issac based on their market capitalization compared to Vertex. Alkami Technology Inc., Clearwater Analytics Holdings Inc. and MeridianLink Inc. were added based on industry, business focus, and financial criteria including market capitalization and revenue. The Human Capital Committee reviewed our named executive officer compensation against this peer group to ensure that our named executive officer compensation is competitive and sufficient to recruit and retain our named executive officers. The Board has evaluated AON’s independence pursuant to the requirements of Nasdaq and SEC rules and has determined that AON does not have any conflicts of interest in advising the Board. Our Human Capital Committee expects to periodically review and update this peer group and to utilize AON for benchmarking certain levels of executive compensation, obtaining a general understanding of current compensation practices, and peer group analysis in determining and developing compensation packages for our named executive officers.
Elements of Our Executive Compensation Program
| Compensation Element | Compensation Objectives Designed to be Achieved and Key Features | | Base Salary | Attract and retain key talent by providing base cash compensation at competitive levels | | Cash-Based Incentive Compensation | Provides short-term incentives based on annual performance and achievement of specified strategic goals | | Equity-Based Compensation | Provides long-term incentives to drive financial and operational performance and stockholder value creation | | Other Employee Benefits | Attract and retain key talent by providing a competitive benefits package | | Severance and Other Benefits Potentially Payable upon Termination of Employment | We have entered into employment agreements with each of our named executive officers that provide for severance payments and benefits under certain circumstances |
Base Salaries
Base Salaries The base salaries of our named executive officers are an important part of their total compensation package, and are intended to reflect their respective positions, duties and responsibilities. Base salary is a visible and stable fixed component of our compensation program. Base salaries for our named executive officers were initially established through a general review of compensation market data and are reflective of individual performance, time in role, scope of responsibility, leadership skills and experience at the time an executive was hired. Our Human Capital Committee reviews the annual base salaries of each of our named executive officers periodically, referring generally to the 50th percentile of similar positions at our peer group of companies. If no similar positions are included in our peer group of companies, general market surveys are used when adjusting annual base salaries. The surveys provide general market data that is used as one of many reference points in determining the annual base salaries but are not used to benchmark annual base salaries for our named executive officers. In early 2024, the Human Capital Committee approved base salary increases for our NEOs ranging from 3% to 5%, including 3.4% for our CEO, as set forth in the table below. In addition, Mr. Rowland received an increase to his base salary in May 2024, to position his compensation closer to the 50th percentile of similar positions at our peer companies. We intend to continue to evaluate the mix of base salary, short-term incentive compensation and long-term incentive compensation to appropriately align the interests of our named executive officers with those of our stockholders.
Cash-Based Incentive Compensation
Cash-Based Incentive Compensation We maintain an annual bonus plan (the “Organizational Bonus Plan”), which is designed to motivate and reward employees, for achievements relative to financial, non-financial and individual performance goals. Under the Organizational Bonus Plan, our named executive officers are eligible to earn cash bonuses based on the executive’s bonus target and the achievement of pre-established company goals and for Mr. Rowland only, individual performance goals. Our named executive officers’ 2024 target annual bonuses, expressed as a percentage of base salary, are set forth below.
Cash-Based Incentive Compensation
For 2024, corporate performance was comprised of two sets of measures – financial performance and non-financial performance. Financial performance accounted for 90% of the corporate performance bonus opportunity and was based on achievements relative to our three most important financial metrics (revenue, pre-tax net income and adjusted cash from operations) against the annual budgeted amounts for the year. Achievement against certain non-financial targets accounted for the remaining 10% of the corporate performance bonus opportunity for each of our named executive officers and generally related to the achievement of key strategic objectives, as described below. Financial performance metrics were set early in 2024 at threshold, target and high levels and results are interpolated between these levels. The percentage of target earned for each performance level is as follows: threshold (25%), target (100%), and maximum (200%). There is no bonus earned for a particular metric if performance is below threshold, and budgeted pre-tax net income must be achieved at a minimum of 85% before any payment is available under the Organizational Bonus Plan. If this minimum performance threshold is not achieved, there will be no bonus payment from the Organizational Bonus Plan, irrespective of individual performance achievement or other financial objective achievement. Bonuses are capped at the maximum level. The chart below shows corporate performance metrics for 2024 at the threshold, target, and maximum levels (with respect to the financial metrics) as well as the Company’s actual results for 2024, which were determined by the Human Capital Committee in February 2025.
Cash-Based Incentive Compensation
| (1) For purposes of the Organizational Bonus Plan, “pre-tax net income” is calculated by adding back to net income the income tax benefit or expense, stock-based compensation expense and bonus expense and “adjusted cash from operations” is calculated by deducting from net cash from operations the costs of capital software additions and purchases of property and equipment. Based on the recommendation of management, the Human Capital Committee used its discretion to further adjust results for these metrics to exclude certain acquisition costs as well as the impact of other material one-off transactions that were not considered when setting the 2024 budget targets. |
Cash-Based Incentive Compensation
The non-financial performance metrics were weighted at 5% each and related to our E-Invoicing Solution and our Talent Quotient. The E-Invoicing Solution metric measured our progress toward launching a new product offering by assessing organizational readiness, deployment, and initial customer adoption. The Talent Quotient metric measured the company’s ability to build, retain, and develop a strong and engaged workforce to support long-term business success. With respect to these non-financial goals, the Human Capital Committee agreed with management’s assessment that (i) the E-invoicing Solution goal was achieved; and (ii) 4 of the 5 metrics for the Talent Quotient goal were met or exceeded, with the 5th metric missed by just one percentage point. Individual performance also factors into the calculation of the bonus payment for Mr. Rowland. The individual performance rating is determined based on the achievement of individual performance goals. The individual goals are aligned to our strategic and non-financial goals. Based on the individual rating, the amount that is otherwise earned based on the achievement of company financial and non-financial metrics discussed above may be increased to 130% or decreased to 0%. The “Far Exceeds Expectations” rating results in 130% of the earned bonus amount being paid, the “Exceeds Expectations” rating results in 115% of the earned bonus amount being paid, and the “Fully Meets Expectations” rating results in no adjustment such that 100% of the earned bonus amount is paid. An individual rating of “Mostly Meets Expectations” results in a reduced earned bonus amount with a discretionary adjustment of between 0% and 85%. An individual receiving an “Improvement Required” rating is ineligible to receive a bonus payment. Notwithstanding the foregoing, annual bonuses are capped at 200% of the target bonus opportunity. The 2024 individual goals for Mr. Rowland were aligned with the Company’s goals to accelerate growth, scale and operate with excellence, deliver differentiated value to our customers, and power our culture and talent for growth. Mr. Rowland provided strategic legal oversight and guidance, ensuring the company navigated regulatory, compliance, and governance matters effectively. Accomplishments include playing a key role in managing all aspects of legal risks, supporting major business initiatives, including critical acquisition activity, strengthening our corporate governance framework, mitigating litigation exposure, and protecting the company’s long-term interests. Mr. Rowland received an individual rating of “Fully Meets Expectations” for 2024. In February 2025, our Human Capital Committee assessed achievement against the financial and non-financial metrics described above and the Board approved funding the bonus pool at 122% of the targeted Organizational Bonus Plan opportunity for 2024. This resulted in payout amounts equal to 122% of each named executive officer’s target award opportunity. The actual annual cash bonuses awarded to each named executive officer for 2024 performance are set forth in the Summary Compensation Table on page 27 in the column entitled "Non-Equity Incentive Plan Compensation."
Equity-Based Compensation
Equity-Based Compensation We view equity-based compensation as a critical component of our balanced total compensation program. Equity-based compensation creates an ownership culture among our employees that provides an incentive to contribute to the continued growth and development of our business and aligns interest of executives with those of our stockholders. Consistent with our compensation strategy, we provide our named executive officers with long-term incentive compensation to support a long-term focus that aligns the interests of our executives and stockholders. On the effective date of our IPO, we adopted the 2020 Incentive Award Plan (the “2020 Plan”), which provides for the award of stock appreciation rights (“SARs”) stock options (“options”), restricted stock awards (“RSAs”), and restricted stock units (“RSUs”). Each equity award is granted upon Board approval and is governed by the 2020 Plan and an award agreement, which specifies the vesting provisions and other rights and obligations applicable to each specific grant. AON and our Human Capital Committee periodically review our equity plan design with respect to the mix of equity awards granted and the vesting provisions. During 2024, we awarded RSUs to our named executive officers as the long-term incentive component of our compensation program. Messrs. DeStefano, Schwab and Rowland were awarded the following RSUs on February 22, 2024:
Equity-Based Compensation
| Name | RSUs | | David DeStefano | 278,109 | | John Schwab | 95,551 | | Bryan Rowland | 16,531 |
Employment and Severance Arrangements
Employment and Severance Arrangements In connection with our IPO we entered into amended and restated employment agreements with each of our named executive officers. The material terms and conditions of each such agreement is set forth below.
Salary; Bonus
Salary; Bonus The employment agreements entitle the executives to annual base salaries and eligibility to earn discretionary bonuses under our annual cash bonus plans. See “2024 Salaries” and “Cash-Based Incentive Compensation” above for additional information regarding the base salaries and bonus opportunities of our named executive officers for 2024.
Severance
Severance If we terminate a named executive officer without cause, or the executive resigns for good reason, subject to the executive timely executing a release of claims, the executive is entitled to receive (i) base salary continuation for 12 months (or 24 months for Mr. DeStefano) and (ii) direct payment of, or additional cash payments equal to, the premiums for continued health coverage for up to 18 months. Mr. DeStefano is also entitled to an additional lump sum payment equal to 12 months of health coverage premiums in the event he has not become eligible for health insurance coverage from a subsequent employer by the date that is 15 months following such termination of employment. The receipt of severance payments and benefits for the named executive officers is also subject to the executive’s continued compliance with certain restrictive covenants and confidentiality obligations, as described below under “Restrictive Covenants.” In the event of a material breach of such covenants, subject to certain cure rights, the executive’s right to receive any of the severance payments or benefits described above will cease, and the executive will be obligated to repay to the Company any such payments or benefits previously paid. Each of our named executive officers is entitled to 30 days’ notice, or pay in lieu of notice, in the event we terminate the executive for any reason other than cause. For purposes of the employment agreements, “cause” generally means, subject to certain notice and cure rights, the executive’s (i) material breach of the employment agreement; (ii) repeated failure to perform duties to the Company or any subsidiary; (iii) willful misconduct that is materially injurious to the Company or any subsidiary (or for Mr. Schwab or Mr. Rowland, willful misconduct or gross negligence with regard to the Company, any subsidiary or their business, assets or employees); (iv) dishonesty, unethical, fraudulent or similar misconduct in connection with the executive’s employment or service; (v) use of non-prescription controlled substances, misuse of prescription drugs, or habitual intoxication during work hours; (vi) indictment for any felony that has or is reasonably likely to cause material adverse consequences to the Company, its businesses or prospects; (vii) conviction, guilty plea or plea of nolo contendere to a felony or any crime involving fraud, dishonesty or moral turpitude; (viii) material violation of any Company policy; or (ix) refusal to follow any reasonable and lawful direction of the Board or any person to whom the executive reports, if applicable. For purposes of the employment agreement, “good reason” is generally defined to mean, subject to certain notice and cure rights, (i) the Company’s material breach of the employment agreement, (ii) the material diminution of the executive’s duties, (iii) a material decrease in the executive’s annual base salary, or (iv) any relocation of the executive’s principal office by more than fifty (50) miles.
Restrictive Covenants
Restrictive Covenants Pursuant to their employment agreements, the executives have agreed to refrain from competing with us or soliciting our employees, customers, clients or prospects, in each case, while employed and following termination of employment for a period of 24 months for Mr. DeStefano or 12 months for Mr. Rowland and Mr. Schwab. During the applicable restricted period, the executives are also obligated to disclose to us certain business opportunities that relate to the business of the Company, its subsidiaries or affiliates. The executives are also bound by certain confidentiality and assignment of inventions obligations. See “—Potential Payments Upon Termination or Change in Control” for information regarding severance payments and benefits under the employment agreements.
2024 Summary Compensation Table
2024 Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 2024, 2023, and 2022.
2024 Summary Compensation Table
| | | | | | Non-Equity | | | | | | | | Stock | Incentive Plan | All Other | | | | Principal | | Salary | Awards | Compensation | Compensation | | | Name | Position | Year | ($) | ($)(1) | ($)(2) | ($)(3) | Total ($) | | David DeStefano | President and Chief Executive Officer | 2024 | 609,615 | 7,000,004 | 744,200 | 49,687 | 8,403,506 | | | | 2023 | 589,654 | 6,250,003 | 644,274 | 47,660 | 7,531,591 | | | | 2022 | 572,018 | 5,749,999 | 635,736 | 44,415 | 7,002,168 | | John Schwab | Chief Financial Officer | 2024 | 480,731 | 2,405,019 | 352,092 | 58,485 | 3,296,327 | | | | 2023 | 466,746 | 1,868,000 | 305,988 | 55,805 | 2,696,539 | | | | 2022 | 453,358 | 1,315,707 | 332,701 | 51,388 | 2,153,154 | | Bryan Rowland | Senior Vice President and General Counsel | 2024 | 342,440 | 416,085 | 167,462 | 55,727 | 981,714 | | | | 2023 | 316,770 | 396,253 | 138,445 | 52,541 | 904,009 | | | | 2022 | 300,527 | 224,022 | 152,270 | 48,550 | 725,369 |
2024 Summary Compensation Table
| (1) Amounts reflect the full grant-date fair value of stock awards granted during fiscal 2024 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock awards made to executive officers in Note 13 to the consolidated financial statements included in our 2024 Annual Report on Form 10-K. |
2024 Summary Compensation Table
| (2) Amounts in this column represent cash incentive compensation earned during the year based on the attainment of pre-established performance objectives under our annual Organizational Bonus Plan. For additional information, see “Cash-Based Incentive Compensation” above. |
2024 Summary Compensation Table
| (3) Amounts in this column represent the 2024 additional perquisites and supplemental benefits provided to our named executive officers that are not reported in the other columns of this table. For Mr. DeStefano, the amount shown includes premium payments for long-term disability and life insurance in the amount of $11,902, 401(k) plan matching contributions in the amount of $20,700, and healthcare plan cost in the amount of $17,085. For Mr. Schwab, the amount shown includes premium payments for long-term disability and life insurance in the amount of $11,086, 401(k) plan matching contributions in the amount of $20,700, and healthcare plan cost in the amount of $26,699. For Mr. Rowland, the amount shown includes premium payments for long-term disability and life insurance in the amount of $8,219, 401(k) plan matching contributions in the amount of $20,700, and healthcare plan cost in the amount of $26,808. For additional information about the amounts set forth in this column, see “—Other Benefits” above. |
Grants of Plan-Based Awards in Fiscal 2024
Grants of Plan-Based Awards in Fiscal 2024 The following table provides supplemental information relating to grants of plan-based awards made during fiscal 2024 to help explain information provided above in our Summary Compensation Table. This table presents information regarding all grants of plan-based awards occurring during fiscal 2024.
Grants of Plan-Based Awards in Fiscal 2024
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair value of Stock and Option Awards ($)(3) | | | | Threshold ($) | Target ($) | Maximum ($) | | | | David DeStefano | 2/22/2024 | | | | 278,109 | 7,000,004 | | | | 152,500 | 610,000 | 1,220,000 | | | | John Schwab | 2/22/2024 | | | | 95,551 | 2,405,019 | | | | 72,150 | 288,600 | 577,200 | | | | Bryan Rowland | 2/22/2024 | | | | 16,531 | 416,085 | | | | 34,316 | 137,264 | 274,528 | | |
Grants of Plan-Based Awards in Fiscal 2024
(1)Amounts reflect potential payouts under the Organizational Bonus Plan for the 2024 performance year. For additional information, see “Cash-Based Incentive Compensation” in the CD&A above. (2)The RSUs vest in substantially equal installments on each of the first four anniversaries of the grant date. (3)Amounts reflect the full grant-date fair value of stock awards granted during fiscal 2024 computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide information regarding the assumptions used to calculate the value of all stock awards made to executive officers in Note 13 to the consolidated financial statements included in our 2024 Annual Report on Form 10-K.
Outstanding Equity Awards at Fiscal Year-End Table
Outstanding Equity Awards at Fiscal Year-End Table The following table summarizes the number of shares of Common Stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2024.
Outstanding Equity Awards at Fiscal Year-End Table
| | | Option Awards | | | | Stock Awards | | | | | Number of | Number of | | | | | | | | Securities | Securities | | | Number of | Market Value | | | | Underlying | Underlying | | | Shares of | of Shares of | | | | Unexercised | Unexercised | Option | Option | Stock that | Stock that | | | Grant | Options (#) | Options (#) | Exercise | Expiration | have not | have not | | Name | Date (1) | Exercisable | Unexercisable | Price ($) | Date | Vested (#) | Vested ($)(2) | | David DeStefano | 10/31/2016 | 428,396 | | 2.50 | 10/31/2026 | | | | | 12/27/2019 | 186,591 | | 3.73 | 12/20/2029 | | | | | 03/01/2021 | | | | | 28,568(2) | 1,524,103 | | | 03/01/2021 | 99,599 | 33,200(3) | 32.16 | 03/01/2031 | | | | | 02/24/2022 | | | | | 218,465(4) | 11,655,108 | | | 02/23/2023 | | | | | 304,186(4) | 16,228,323 | | | 02/22/2024 | | | | | 278,109(4) | 14,837,115 | | John Schwab | 02/05/2020 | 113,235 | 248,238(5) | 4.70 | 02/05/2030 | | | | | 03/01/2021 | | | | | 1,721(2) | 91,815 | | | 03/01/2021 | 5,999 | 2,000(3) | 32.16 | 03/01/2031 | | | | | 02/10/2022 | | | | | 48,019(4) | 2,561,814 | | | 02/23/2023 | | | | | 90,915(4) | 4,850,315 | | | 02/22/2024 | | | | | 95,551(4) | 5,097,646 | | Bryan | 12/20/2019 | 31,098 | | 3.73 | 12/20/2029 | | | | Rowland | 03/01/2021 | | | | | 867(2) | 46,254 | | | 03/01/2021 | | 1,007(3) | 32.16 | 03/01/2031 | | | | | 02/10/2022 | | | | | 8,176(4) | 436,190 | | | 02/23/2023 | | | | | 19,286(4) | 1,028,908 | | | 02/22/2024 | | | | | 16,531(4) | 881,929 |
Outstanding Equity Awards at Fiscal Year-End Table
| (1) Amount shown is based on the closing price of our Class A Common Stock of $53.35 per share on December 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End Table
| (2) The RSUs vest as to 50% of the shares on the second anniversary of the grant date and as to 25% of the shares on each of the third and fourth anniversaries of the grant date, subject to the holder’s continuous service to the Company through each applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (3) The option vests with respect to 25% of the award on each of the first four anniversaries of the grant date, subject to the holder’s continuous service to the Company through each applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (4) The RSUs vest as to 25% of the shares on each of the first four anniversaries of the grant date, subject to the holder’s continuous service to the Company through each applicable vesting date. |
Outstanding Equity Awards at Fiscal Year-End Table
| (5) The option vests with respect to 50% of the award on the second anniversary of the applicable grant date and as to 50% of the award on the fifth anniversary of the applicable grant date, subject to the holder’s continuous service to the Company through each applicable vesting date. |
Option Exercises and Stock Vested in Fiscal 2024
Option Exercises and Stock Vested in Fiscal 2024
Option Exercises and Stock Vested in Fiscal 2024
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1)($) | Number of Shares Acquired on Vesting | Value Realized on Vesting (1)($) | | David DeStefano | 1,174,993 | 51,636,508 | 239,196 | 6,163,074 | | John Schwab | 55,000 | 1,997,582 | 56,035 | 1,144,735 | | Bryan Rowland. | 65,216 | 1,862,687 | 11,382 | 296,549 |
Option Exercises and Stock Vested in Fiscal 2024
(1) For option awards, the value realized on exercise is calculated by multiplying (i) the number of shares exercised by (ii) the difference between the closing price of the Company’s Common Stock on the date of exercise and the exercise price of the option. For RSUs, the value realized on vesting is determined by multiplying the shares vested by the closing prices of the Company’s Common Stock on the applicable dates of vesting.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control In this section, we describe payments that may be made to our named executive officers upon several events of termination, assuming the termination event occurred on the last day of fiscal 2024. We have entered into employment agreements with each named executive officer that provide for potential payments upon a qualifying termination of employment. See “Employment and Severance Arrangements” above for additional information. The following table summarizes the payments that would be made to our named executive officers upon the occurrence of certain qualifying terminations of employment, in any case, occurring on the last day of fiscal 2024. Amounts shown do not include (i) accrued but unpaid base salary through the date of termination, or (ii) other benefits earned or accrued by the named executive officer during his employment that are available to all salaried employees, such as accrued vacation, and assume that any successor company in a change in control assumed or substituted awards for any outstanding awards under the existing equity plan. Our named executive officers are not entitled to any additional or enhanced compensation or benefits in connection with a change in control or qualifying termination of employment that occurs in connection with a change in control.
Potential Payments Upon Termination or Change in Control
| Name | Benefit | Termination Without Cause or for Good Reason($) | Retirement (4) ($) | | David DeStefano | Cash (1) | 1,270,833 | 0 | | | Equity Acceleration (2) | 0 | 38,569,863 | | | COBRA Reimbursement (3) | 55,166 | 0 | | | Total | 1,326,000 | 38,569,863 | | John Schwab | Cash (1) | 521,083 | 0 | | | Equity Acceleration | 0 | 0 | | | COBRA Reimbursement (3) | 51,721 | 0 | | | Total | 572,805 | 0 | | Bryan Rowland | Cash (1) | 379,167 | 0 | | | Equity Acceleration | 0 | 0 | | | COBRA Reimbursement (3) | 51,314 | 0 | | | Total | 430,481 | 0 |
Potential Payments Upon Termination or Change in Control
(1)Amounts shown represent cash severance payments payable upon the named executive officer’s termination without cause or resignation for good reason and also include 30 days of pay in lieu of notice. (2)Amount shown is based on the closing price of our Class A Common Stock of $53.35 per share on December 31, 2024. (3)Amounts shown represent premiums for continued health coverage for up to 18 months (or 30 months for Mr. DeStefano). (4)Pursuant to each named executive officer’s equity award agreements, upon the executive’s termination due to retirement, the executive’s outstanding and unvested options will vest in full and a pro-rated portion of the executive’s RSUs will vest. For purposes of the equity award agreements, “Retirement” means a participant’s voluntary termination of service on or after the date on which the participant attains age 55 and has completed a minimum of 15 years of service with the Company. Only Mr. DeStefano was retirement eligible as of December 31, 2024.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure Under SEC rules, we are required to calculate and disclose the median of the annual total compensation of all of our employees other than our CEO, the annual total compensation of our CEO and the ratio of the median of the annual total compensation of all our employees as compared to the annual total compensation of our CEO (“CEO Pay Ratio”). During 2024, there have not been changes in our employee population or employee compensation arrangements that we believe would result in a significant change to our pay ratio disclosure. Therefore, as permitted by Item 402(u) of Regulation S-K, we elected to use the same median employee as determined on December 31, 2023. During 2024, we acquired Systax Sistemas Fiscais LTDA (“Systax”) and ecosio GmbH (“ecosio”). As permitted by Item 402(u) of Regulation S-K, the employees of Systax and ecosio consisting of approximately 170 and 130 employees, respectively, were excluded on the basis that such acquisitions became effective during 2024. We consider the pay ratio specified herein to be a reasonable estimate calculated in a manner intended to be consistent with Item 402(u) of Regulation S-K.
CEO Pay Ratio Disclosure
| ● | For 2024, the median annual total compensation of all our employees (other than our CEO) was $179,778, and the annual total compensation of our CEO was $8,403,506, as reported in the “2024 Summary Compensation Table” on page 27. |
CEO Pay Ratio Disclosure
| ● | Based on this information, for 2024, the ratio of the annual total compensation of our CEO to the median annual total compensation of all other employees was estimated to be 47 to 1. |
CEO Pay Ratio Disclosure
We calculated the median employee’s annual total compensation for 2024 in the same manner as the named executive officers in the “2024 Summary Compensation Table” on page 27.
Pay versus Performance
Pay versus Performance In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and non-PEO named executive officers (“Non-PEO NEO”) and Company performance for the fiscal years listed below. The Human Capital Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
Pay versus Performance
| Year | Summary Compensation Table Total for PEO¹ ($) | Compensation Actually Paid to PEO¹˒²˒³ ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($ Millions) | Total Revenue⁵ ($ Millions) | | | | | | | TSR ($) | Peer Group TSR ($) | | | | 2024 | 8,403,506 | 36,014,118 | 2,139,021 | 9,540,330 | 153.08 | 164.52 | (52.7) | 666.8 | | 2023 | 7,531,591 | 20,194,525 | 1,800,274 | 5,249,186 | 77.30 | 139.45 | (13.1) | 572.4 | | 2022 | 7,002,168 | 6,690,549 | 1,439,261 | 947,639 | 41.64 | 87.67 | (12.3) | 491.6 | | 2021 | 6,870,858 | (14,932,287) | 942,943 | (3,745,456) | 45.54 | 130.86 | (1.5) | 425.5 |
Pay versus Performance
(1) David DeStefano was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below.
Pay versus Performance
| 2021 | 2022- 2024 | | John Schwab | John Schwab | | Lisa Butler | Bryan Rowland |
Pay versus Performance
(2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s named executive officers. These amounts reflect the 2024 Summary Compensation Table Total with certain adjustments as described in footnote 3 below. (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the 2024 Summary Compensation Table.
Pay versus Performance
| Year | Summary Compensation Table Total for PEO ($) | Exclusion of Stock Awards and Option Awards for PEO ($) | Inclusion of Equity Values for PEO ($) | Compensation Actually Paid to PEO ($) | | 2024 | 8,403,506 | (7,000,004) | 34,610,616 | 36,014,118 |
Pay versus Performance
| Year | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs ($) | Average Inclusion of Equity Values for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2024 | 2,139,021 | (1,410,552) | 8,811,861 | 9,540,330 |
Pay versus Performance
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Pay versus Performance
| Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO ($) | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for PEO ($) | Total - Inclusion of Equity Values for PEO ($) | | 2024 | 14,837,115 | 15,159,697 | - | 4,613,804 | - | - | 34,610,616 |
Pay versus Performance
| Year | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs ($) | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2024 | 2,989,788 | 5,500,803 | - | 321,270 | - | - | 8,811,861 |
Pay versus Performance
(4)The Peer Group TSR set forth in this table utilizes the Nasdaq U.S. Benchmark Software TR Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2024. The comparison assumes $100 was invested for the period starting December 31, 2020, through the end of the listed year in the Company and in the Nasdaq U.S. Benchmark Software TR Index respectively. Historical stock performance is not necessarily indicative of future stock performance. (5) We determined Total Revenue to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2024. Relationship Between PEO and Average Non-PEO NEO Compensation Actually Paid and Company Total Stockholder Return (“TSR”) and Peer Group TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, the Company’s cumulative TSR over the four most recently completed fiscal years, and the TSR of the Nasdaq U.S. Benchmark Software TR Index over the same period. Relationship Between PEO and Average Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the four most recently completed fiscal years. Relationship Between PEO and Average Non-PEO NEO Compensation Actually Paid and Total Revenue The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average Compensation Actually Paid to our Non-PEO NEOs, and Total Revenue during the four most recently completed fiscal years. Tabular List of Most Important Financial Performance Measures The following table presents the financial performance measures that the Company considers having been the most important in linking Compensation Actually Paid to our PEO and Non-PEO NEOs for 2024 to Company performance. The measures in this table are not ranked.
Pay versus Performance
| Total Revenue Pre-Tax Net Income Adjusted Cash from Operations |
Pay versus Performance
Pre-tax net income and adjusted cash from operations are non-GAAP measures. For a description of how these measures are calculated from the nearest GAAP counterpart in the Company’s audited financial statements, see “Cash-Based Incentive Compensation” in the CD&A above.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Compensation of our Directors
Compensation of our Directors Non-Employee Director Compensation Program We maintain a compensation program for our non-employee directors. Under this program our non-employee directors receive the following amounts for their services on our Board during 2024: ●If a director (i) is initially elected or appointed to our Board at an annual meeting of stockholders or (ii) has served on our Board as of the date of an annual meeting of stockholders and will continue to serve as a director immediately following such meeting, a number of restricted stock awards on the date of the annual meeting determined by dividing $200,000 by the closing price of our Common Stock on the date of the annual meeting (with any partial shares that result rounded up to the nearest whole share); ●An annual director fee of $42,000 ●If the director serves as lead independent director or chair or on a committee of our Board, an additional annual fee as follows: oChair of the Board or lead independent director: $20,000; oChair of the Audit Committee: $20,000; oAudit Committee member other than the chair $10,000; oChair of the Human Capital Committee, $15,000; oHuman Capital Committee member other than the chair, $7,500; oChair of the Nominating and Governance Committee, $12,000; and oNominating and Governance Committee member other than the chair, $6,000. Director fees under the program are earned and paid monthly. Restricted stock awards represent the right to receive one share (or an equal amount in cash) following vesting of the award. Restricted stock awards granted to our non-employee directors under the program will vest in a single installment on the earlier of the day before the next annual meeting of stockholders occurring after the date of grant or the first anniversary of the date of grant, subject to continued service as a non-employee member of our Board through the applicable vesting date and accelerated vesting upon a change in control of the Company. The following table sets forth information concerning the compensation of our non-employee directors for their service on our Board for the year ended December 31, 2024.
Compensation of our Directors
| | Fees Earned | | | | | or Paid in Cash | Stock Awards | Total | | Name | ($)(1) | ($)(2) | ($) | | Eric Andersen | 78,854 | 200,017 | 278,871 | | Kevin Robert (3) | 28,622 | - | 28,622 | | J. Richard Stamm | 67,625 | 200,017 | 267,642 | | Bradley Gayton | 65,505 | 200,017 | 265,522 | | Amanda Westphal Radcliffe | 48,000 | 200,017 | 248,017 | | Stefanie Westphal Thompson | 46,146 | 200,017 | 246,163 | | Philip Saunders | 63,646 | 200,017 | 263,663 |
Compensation of our Directors
| (1) Includes annual fees for service on the Board and committees of the Board. |
Compensation of our Directors
| (2) Amounts shown reflect the grant date fair value of restricted stock awards granted during 2024 as calculated in accordance with ASC Topic 718. See Note 13 to the consolidated financial statements included in our 2024 Annual Report on Form 10-K for information regarding the assumptions used in calculating these amounts. |
Compensation of our Directors
| (3) Mr. Robert retired from the Board effective June 12, 2024. |
Compensation of our Directors
The table below shows the aggregate numbers of options (exercisable and unexercisable) and restricted stock awards held as of December 31, 2024 by each non-employee director who was serving as of December 31, 2024.
Compensation of our Directors
| | | Restricted | | | Options | Stock Awards | | | Outstanding | Outstanding | | | at Fiscal | at Fiscal | | Name | Year-End (#)(1) | Year-End (#) | | Eric Andersen | 100,558 | 5,705 | | Philip Saunders | _ | 5,705 | | J. Richard Stamm | 18,623 | 5,705 | | Bradley Gayton | _ | 5,705 | | Amanda Westphal Radcliffe | _ | 5,705 | | Stefanie Westphal Thompson | _ | 5,705 |
Compensation of our Directors
| (1) All of the Stock Appreciation Rights (“SARs”) and options to purchase Class B Common Stock granted to certain non-employee directors prior to the IPO became options to purchase shares of our Class A Common Stock in connection with the IPO. |
Compensation of our Directors
In the event of a change in control, all restricted stock awards held by any non-employee director, will vest immediately prior to such change in control.