DEF 14A of Priority Technology Holdings, Inc.
Filed Apr 9, 2024 · FY20230001653558-24-000053
Non-Employee Directors
Non-Employee Directors Marc Crisafulli is an experienced executive and has over 30 years in legal, compliance and regulatory governance roles with various companies and was appointed as a director of Priority in 2022. Mr. Crisafulli is currently Counsel at Nixon Peabody and serves as chair of Bally Corporation's Rhode Island Board, director for Pavillion Payments and chair of Rhode Island's I-195 Redevelopment District Commission. Prior to that, Mr. Crisafulli served as Executive Vice President, Government Relations, Legal and Regulatory at Bally’s Corporation. Mr. Crisafulli has also held senior leadership roles with Brightstar Corporation and Suffolk Construction Company and was managing partner at Hinkley Allen & Snyder. Marietta Davis has served as a director of Priority since January 2021. Ms. Davis works for IBM where she is the worldwide Vice President and Managing Director for the Accenture relationship where she leads a global team focusing on growing IBM’s Cloud and Cognitive Application portfolio. Prior to joining IBM, Ms. Davis spent 16 years at Microsoft Corporation in a variety of leadership roles. Ms. Davis also serves in an advisory board role for The Posse Foundation, a non-profit organization that identifies, trains and mentors young, diverse leaders as they navigate college and enter the workforce. Christina Favilla has served as a director of Priority since October 2019. Ms. Favilla served as Chief Operating Officer of Sterling National Bank from July 2017 until December 2018. She previously served as Chief Operating Officer of GE Capital's lending and leasing business from February 2012 until June 2017. Prior to 2012, she served as President of Discover Bank for six years. She also currently serves as a board member of a privately held fintech company. Ms. Favilla is a seasoned banking and financial services professional with a track record of growing business platforms in volatile regulatory environments. Her core skills include people leadership, risk management, P&L, and IT governance. Ms. Favilla holds an MBA in Information Systems from the Fordham Gabelli School of Business. Michael Passilla has served as a director of Priority since June 2019. Mr. Passilla served as Vice Chairman for JP Morgan Chase & Company from July 2016 until his retirement in June 2018, after serving as Chief Executive Officer of Chase Merchant Services from May 2013 to June 2016. He previously served as Chief Executive Officer of Elavon - US Bank, Inc. from August 2010 to April 2013, after serving as EVP of Global Business Development since August 2007. Mr. Passilla received a Bachelor of Business Administration from the University of Notre Dame in 1989 and an MBA from Northwestern University in 1995. John Priore is the co-founder of Priority and has served as Vice-Chairman of Priority from December 2018 through March 2021. Prior to that, John Priore served as Chief Executive Officer of Priority since August 2005. He has over twenty-five years of experience in the payments industry. Prior to founding Priority, John Priore was the Executive Vice President of Financial Systems at Ingenico, and also served in a variety of positions at other firms, including NOVA, First Data and American Express. Mr. Priore is a member of the Technology Association of Georgia (TAG), a legacy member of the Alpharetta Technology Commission and currently serves on the board of directors for the Electronic Transactions Association. John Priore's commitment to the industry has helped propel Priority to be a leader in payments technology. John Priore is the brother of Thomas Priore, Priority's President, Chief Executive Officer and Chairman.
Guidelines for Selecting Director Nominees
Guidelines for Selecting Director Nominees The Nominating and Governance Committee considers persons identified by its members, management, stockholders, investment bankers and others. The guidelines for selecting nominees, which the Nominating and Governance Committee will take into consideration, include, but are not limited to, providing those persons to be nominated: •should have demonstrated notable or significant achievements in business, education or public service; •should possess the requisite intelligence, education and experience to make a significant contribution to the Board and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and •should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interest of stockholders. The Nominating and Governance Committee considers a number of qualifications relating to management and leadership experience, background, diversity of viewpoints, professional experience, education and skills, and integrity and professionalism in evaluating a person's candidacy for membership on the Board. The Nominating and Governance Committee may require certain skills or attributes, such as financial or accounting experience, to meet specific Board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board members. Any shareholder wishing to recommend a candidate for consideration as a possible director nominee for election at an upcoming meeting of shareholders must provide timely, written notice to Bradley Miller, the Company's General Counsel, Chief Risk Officer, and Corporate Secretary, at the Company's address set forth in the 2024 Notice of Annual Meeting. The Nominating and Governance Committee does not distinguish among nominees recommended by stockholders and other persons.
Summary Compensation Table
Summary Compensation Table The following Summary Compensation Table, ("SCT") presents summary information regarding the total compensation for Priority's years ended December 31, 2023 and 2022 for the Named Executive Officers:
Summary Compensation Table
| Name and Principal Position | Year | Salary $ | Bonus $ | Stock Awards $ | Option Awards $ | Non-Equity Incentive Compensation $3 | All Other 2 $ | Total $ | | Thomas Priore President, Chief Executive Officer, and Chairman | 2023 | $1,200,000 | $1,380,265 | $299,039 | $— | $327,439 | $27,790 | $3,234,533 | | | 2022 | $975,000 | $1,140,000 | $— | $— | $— | $23,305 | $2,138,305 | | Timothy O'Leary1 Chief Financial Officer | 2023 | $400,000 | $260,000 | $600,000 | $— | $— | $13,200 | $1,273,200 | | | 2022 | $107,693 | $69,701 | $611,941 | $— | $— | $— | $789,335 | | Bradley Miller General Counsel and Chief Risk Officer | 2023 | $375,000 | $187,500 | $— | $— | $— | $13,200 | $575,700 | | | 2022 | $359,615 | $178,125 | $1,072,000 | $— | $— | $12,200 | $1,621,940 |
Summary Compensation Table
(1)Mr. O'Leary joined the Company on September 19, 2022, with an annual salary of $400,000 per year and an annual target bonus of 65% of his base salary. The stock award for 2022 reflects an initial award of 149,254 shares which shall vest equally on each anniversary date over a three-year period. (2)Reflects medical insurance premiums paid by the Company on behalf of Mr. Priore, and 401(k) matching contributions for Mr. Miller and Mr. O'Leary. (3)Non-equity incentive compensation represents the earned cash portion of the long-term incentive granted on March 22, 2023, vesting over two years.
Pay Versus Performance Table
Pay Versus Performance Table The following Pay Versus Performance ("PVP") tables set forth compensation information for our PEO and non-PEO NEOs in accordance with SEC guidance for the years ended December 31, 2023, 2022 and 2021.
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO ($)(b) | Compensation Actually Paid to PEO ($)(c) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(d) | Average Compensation Actually Paid to Non-PEO NEOs ($)(e) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return ($)(f) | Net Income (loss) ($ in thousands)(g) | | 2023 | $3,234,533 | $3,145,262 | $924,450 | $376,895 | $51 | $(1,311) | | 2022 | $2,138,305 | $1,959,569 | $953,909 | $(352,720) | $75 | $(2,150) | | 2021 | $2,920,885 | $2,924,987 | $1,784,026 | $1,577,968 | $101 | $1,389 |
Pay Versus Performance Table
(b)Represents the compensation from the Summary Compensation Table for the Company's PEO, Thomas Priore for 2021, 2022 and 2023. (c)Represents the compensation actually paid to the Company's PEO, as adjusted in the table below.
Pay Versus Performance Table
| | 2023 | 2022 | 2021 | | Summary Compensation Table Total | $3,234,533 | $2,138,305 | $2,920,885 | | Adjustments to Determine Compensation "Actually Paid" for PEO | | | | | Deductions for amounts reported under the "Stock Awards" column in the SCT | (299,039) | — | — | | Fair value of awards granted during the year that remain outstanding at year end | 277,958 | — | — | | Change in fair value of awards granted in prior years that remain outstanding at year end | — | (93,113) | 4,102 | | Change in fair value from the end of the prior year to the vesting date for awards granted in prior years and vested in the current year | (68,190) | (85,623) | — | | Total compensation actually paid for PEO | $3,145,262 | $1,959,569 | $2,924,987 |
Pay Versus Performance Table
(d)Represents the average summary compensation for all NEOs from the Summary Compensation Table for the named executive officers. For 2023, NEOs were Timothy O'Leary and Bradley Miller. For 2022, NEOs were Timothy O'Leary, Bradley Miller and Michael Vollkommer, who retired from the Company in September 2022. For 2021, NEOs were Michael Vollkommer and Ranjana Ram. (e)Represents the compensation actually paid to the Company's NEOs, as adjusted the table below.
Pay Versus Performance Table
| | 2023 | 2022 | 2021 | | Summary Compensation Table Total | $924,450 | $953,909 | $1,784,026 | | Adjustments to Determine Compensation "Actually Paid" for Non-PEO NEOs | | | | | Deductions for amounts reported under the "Stock Awards" column in the SCT | (600,000) | (1,683,941) | (2,496,197) | | Fair value of awards granted during the year that remain outstanding at year end | 659,259 | 1,837,076 | 2,246,633 | | Change in fair value of awards granted in prior years that remain outstanding at year end | (395,818) | (95,186) | 2,814 | | Change in fair value from the end of the prior year to the vesting date for awards granted in prior years and vested in the current year | (210,996) | (57,008) | 40,692 | | Deduction for fair value at the end of the prior year for awards granted in prior years that forfeited during the year (h) | — | (1,307,570) | — | | Total compensation actually paid for Non-PEO NEOs | $376,895 | $(352,720) | $1,577,968 |
Pay Versus Performance Table
(f)Assumes $100 investment on December 31, 2020 in our common stock (g)Represents the Company's net income on the consolidated statements of income reported in the Company's 2023 Annual Report on Form 10K. (h)The forfeitures represent Mr. Vollkommer's outstanding awards at the time of his retirement in September 2022.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS The following table presents summary information regarding the total compensation for Priority's year ended December 31, 2023 for our non-employee directors:
COMPENSATION OF DIRECTORS
| Name of Director | Fees Earned or Paid in Cash $ | Stock Awards $ | Option Awards $ | Non-Equity Incentive Plan Compensation $ | All Other Compensation $ | Total $ | | Marc Crisafulli | 65,000 | 100,000 | — | — | — | 165,000 | | Marietta Davis | 60,000 | 100,000 | — | — | — | 160,000 | | Christina Favilla | 65,000 | 100,000 | — | — | — | 165,000 | | Michael Passilla | 70,000 | 100,000 | — | — | — | 170,000 | | John Priore | 60,000 | 100,000 | — | — | — | 160,000 | | Stephen Hipp1 | 43,333 | 100,000 | — | — | — | 143,333 |
COMPENSATION OF DIRECTORS
(1)Stephen Hipp formerly served as Director and chairman of the Compensation Committee until passing away on June, 22, 2023.
Narrative Disclosure to Director Compensation Table
Narrative Disclosure to Director Compensation Table Independent Director Compensation The independent directors have each entered an agreement to which each receives cash compensation of $65,000 per year, payable in monthly installments and a grant of restricted stock with a grant date fair value $100,000 which vests over four quarters. The chair of the Audit Committee received $10,000 in 2023 in addition to their director cash compensation. The chair of the Nominating and Corporate Governance Committee and the chair of the Compensation Committee both received $5,000 in 2023 in addition to their director cash compensation. Payment of each installment of the annual fee is subject to applicable restrictions under the debt and equity financing agreements of the Company and its subsidiaries. In the event any such restrictions prohibit payment of an installment of the annual fee such amount will accrue interest at a rate of 6% per annum until such amount is permitted to be paid. The independent directors are reimbursed for reasonable and documented out-of-pocket expenses incurred by him or her in the performance of their duties.
OUTSTANDING EQUITY AWARDS AT 2023 YEAR END
OUTSTANDING EQUITY AWARDS AT 2023 YEAR END The following table provides information regarding unexercised stock options, stock that has not yet vested, and equity incentive plan awards for each NEO outstanding as of the end of 2023. Each outstanding award is represented by a separate row that indicates the number of securities underlying the award.
OUTSTANDING EQUITY AWARDS AT 2023 YEAR END
| | Option Awards | | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (Exercisable) (#) | Number of Securities Underlying Unexercised Options (Unexercisable) (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares of Stock, Units, or Other Rights That Have Not Yet Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares of Stock, Units or Other Rights That Have Not Yet Vested ($) | | Thomas Priore | — | — | — | — | — | 78,078(a) | $277,958 | | Timothy O'Leary | — | — | — | — | — | 284,687(b) | $1,013,486 | | Bradley Miller | — | — | — | — | — | 133,332(c) | $474,662 |
OUTSTANDING EQUITY AWARDS AT 2023 YEAR END
(a)The March 2023 grant to Mr. Priore vests over two years. The shares vest on March 22, 2024 and March 22, 2025. (b)The Awards outstanding for Mr. O'Leary are 99,502 shares granted on September 19, 2022 and 185,185 shares granted on in September 19, 2023. Mr. O'Leary's awards vest equally over three years. (c)The awards outstanding for Mr. Miller are 133,332 shares granted on April 15, 2022.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
General
General Our certificate of incorporation and bylaws currently provide that the number of directors constituting the Board shall be determined solely and exclusively by resolution duly adopted from time to time by the Board. There are six directors presently serving on our Board, and the number of directors to be elected at this Annual Meeting is six. The Board proposes that the following six director nominees be elected to the Board to serve until the next annual meeting in 2024, or until his or her earlier resignation, death, or removal.
Nominees for Directors
Nominees for Directors Each nominee is listed below, along with their age as of the date of this Proxy Statement.
Nominees for Directors
| Name | Age | | Thomas Priore | 55 | | John Priore | 60 | | Marc Crisafulli | 55 | | Marietta Davis | 64 | | Christina Favilla | 56 | | Michael Passilla | 57 |
Nominees for Directors
Certain biographical information about the nominees as of the date of this Proxy Statement can be found above under "Executive Officers and Board of Directors."