DEF 14A of PROG Holdings, Inc.
Filed Mar 27, 2025 · FY20240001808834-25-000046
Table of Contents
| Employee Stock Purchase Plan | 52 | | Outstanding Equity Awards at 2024 Fiscal Year-End | 53 | | Options Exercised and Stock Vested in Fiscal Year 2024 | 54 | | Pension Benefits | 54 | | Nonqualified Deferred Compensation as of December 31, 2024 | 54 | | Potential Payments Upon Termination or Change-in-Control | 55 | | Securities Authorized for Issuance Under Equity Compensation Plans | 58 | | CEO Pay Ratio Disclosure | 58 | | Pay versus Performance | 59 | | Audit Committee Report | 62 | | Audit Matters | 65 | | Fees Billed in the Last Two Fiscal Years | 65 | | Approval of Auditor Services | 65 | | Beneficial Ownership of Common Stock | 66 | | Certain Relationships and Related Transactions | 68 | | Policies and Procedures Dealing with the Review, Approval and Ratification of Related Party Transactions | 68 | | Related Party and Other Transactions | 68 | | Additional Information | 73 | | Shareholder Proposals for 2026 Annual Meeting of Shareholders | 73 | | Householding of Annual Meeting Materials | 74 | | Communicating with the Board of Directors and Corporate Governance Documents | 74 | | Other Action at the Meeting | 75 | | Appendix A – Use of Non-GAAP Financial Information | 76 |
Proposal 1: Election of Directors
Proposal 1: Election of Directors Kathy Betty will be retiring from our Board of Directors at the conclusion of her term at the Annual Meeting. We would like to take this opportunity to thank Ms. Betty for her many contributions and outstanding service on behalf of the Company, our Board of Directors and our shareholders. In connection with Ms. Betty's retirement, the size of our Board of Directors will be reduced from eleven directors to ten directors, immediately following the Annual Meeting. Our Board of Directors recommends the election of the nominees listed below, each of whom will have a term of office expiring at our 2026 Annual Meeting of Shareholders. Each nominee elected to serve as a director will hold office until the expiration of his or her term and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office or death. If, at the time of the Annual Meeting, any of such nominees should be unable to serve, the persons named in the proxy will vote for such substitutes as our Board of Directors recommends. In no event will the proxy be voted for more than ten nominees. Our management has no reason to believe that any nominee for election at the Annual Meeting will be unable to serve if elected. The following table provides summary information about each nominee, all of whom currently serve on our Board of Directors. All of the nominees listed below have consented to serve as directors if elected. We invite you to read the more fulsome description of our director nominees under "Governance - Board of Directors".
Proposal 1: Election of Directors
| Nominee | Age | Occupation | Independent | Joined Our Board | | Douglas C. Curling | 70 | Former President, Chief Operating Officer and Chief Financial Officer ChoicePoint, Inc. | Yes | January 2016 | | Cynthia N. Day | 59 | President and Chief Executive Officer Citizens Bancshares Corporation and Citizens Trust Bank | Yes | October 2011 | | Curtis L. Doman | 52 | Special Advisor to the President and Chief Executive Officer PROG Holdings, Inc. | No | August 2015 | | Robert K. Julian | 62 | Former Chief Financial Officer TheRealReal, Inc. | Yes | November 2024 | | Ray M. Martinez | 51 | Co-Founder and President of Financial Services EVERFI, Inc. | Yes | September 2021 | | Steven A. Michaels | 53 | President and Chief Executive Officer PROG Holdings, Inc. | No | November 2020 | | Daniela Mielke | 59 | Managing Partner Commerce Technology Advisors, LLC | Yes | November 2024 | | Ray M. Robinson | 77 | Former President for the Southern Region AT&T | Yes | November 2002 | | Caroline S. Sheu | 51 | Retired Global Director, Digital and Direct-to-Consumer Marketing Google | Yes | September 2021 | | James P. Smith | 58 | Former Executive Vice President, Head of Digital & Direct Virtual Channels Wells Fargo & Company | Yes | May 2021 |
Proposal 1: Election of Directors
Assuming a quorum is present, a nominee will be elected upon the affirmative vote of a majority of the total votes cast at the Annual Meeting, which means that the number of votes cast in favor of a nominee’s election exceeds the number of votes cast against that nominee’s election. If an incumbent director fails to receive a majority of the votes cast, the incumbent director will promptly tender his or her resignation to our Board of Directors. Our Board of Directors can then choose to accept the resignation, reject it or take such other action that our Board of Directors deems appropriate.
Proposal 1: Election of Directors
| Our Board of Directors recommends that you vote "FOR" the election of each of the nominees above. |
Proposal 1: Election of Directors
| 8 | PROG Holdings, Inc. 2025 Proxy Statement |
Proposal 1: Election of Directors
Proposal 2:
Governance
Governance Nominees to Serve as Directors
Governance
| | Biographical Information: Mr. Curling has been the managing principal of New Kent Capital LLC, a family-run investment business, since March 2009. In addition, he was the managing principal of New Kent Consulting LLC, a privacy and mergers and acquisitions consulting business, from March 2009 to December 2024. From 1997 until September 2008, Mr. Curling held various executive positions at ChoicePoint Inc., a provider of identification and credential verification services that was sold to Reed Elsevier in 2008, including serving as President from April 2002 to September 2008, as Chief Operating Officer from 1999 to September 2008 and as Executive Vice President, Chief Financial Officer and Treasurer from 1997 to May 1999. Mr. Curling also served as a director of ChoicePoint Inc. from May 2000 to September 2008. Mr. Curling served on the Board of Directors of CoreLogic, a New York Stock Exchange listed company providing global property information, analytics and data-enabled services to financial services organizations and real estate professionals, until June 2021, when it became a private company. Qualifications: Among other qualifications, Mr. Curling brings substantial experience in managing and operating businesses with privacy, data analytics and other data-enabled matters to our Board of Directors. His prior service as a Chief Financial Officer provides him with valuable accounting and financial expertise, and his consulting experience provides him with significant mergers and acquisitions expertise, all of which is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors. | | Douglas C. Curling | | | Age: 70 Director Since: January 2016 Committees: Audit; Compensation & Human Capital (Chair) | |
Governance
| | Biographical Information: Ms. Day has been the President and Chief Executive Officer of Citizens Bancshares Corporation and Citizens Trust Bank since February 2012. Citizens Bancshares Corporation was a publicly held corporation until January 2017. She served as Chief Operating Officer and Senior Executive Vice President of Citizens Trust Bank from February 2003 to January 2012. She previously served as the Executive Vice President and Chief Operating Officer and in other capacities at Citizens Federal Savings Bank of Birmingham from 1993 until its acquisition by Citizens Trust Bank in 2003. Before joining Citizens Trust Bank, Ms. Day served as an audit manager for KPMG. Ms. Day also serves on the board of directors of Primerica, Inc., the Federal Reserve Bank of Atlanta, the National Banker’s Association, the Metro Atlanta Chamber of Commerce, and the Atlanta Area Council of Boy Scouts of America. She is also a member of the Rotary Club of Atlanta, the Georgia Society of CPAs, and the AICPA. Qualifications: Among other qualifications, Ms. Day brings significant management and financial experience to our Board of Directors. Her experience in multiple senior executive leadership positions and service on other boards, provide her with accounting and financial expertise, which are utilized by our Board of Directors. In addition, the customer base served by Citizens Bancshares Corporation is very similar to that served by the Company, giving her a great understanding of their buying habits, the products they purchase and effective marketing and communication methods. These skills and experiences qualify her to serve on our Board of Directors. | | Cynthia N. Day | | | Age: 59 Director Since: October 2011 Committees: Audit (Chair); Compensation & Human Capital | |
Governance
| PROG Holdings, Inc. 2025 Proxy Statement | 11 |
Governance
| | Biographical Information: Mr. Doman currently serves as a Special Advisor to our President and Chief Executive Officer, and is a co-founder of Progressive Leasing. Previously he served as Chief Technology Officer of Progressive Leasing from 1999 until December 2017, Chief Product Officer from January 2018 until December 2019, and Chief Innovation Officer from December 2019 to February 2024. He was also President of IDS, Inc. from September 1993 until October 2015. Qualifications: Among other qualifications, Mr. Doman brings significant experience in technology and data analytics matters to our Board of Directors. Mr. Doman’s intimate knowledge of our Progressive Leasing segment, including as the creator of the dynamic decision engine used by that business in evaluating decisioning criteria for our lease products, is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors. | | Curtis L. Doman | | | Age: 52 Director Since: August 2015 Committees: N/A | |
Governance
| | Biographical Information: Prior to his retirement in January 2024, Mr. Julian served as the Chief Financial Officer of TheRealReal, Inc., the world’s largest online marketplace for authenticated, consigned luxury goods, where he was responsible for developing and shaping company strategy and driving profitable growth. Prior to TheRealReal, Mr. Julian was Executive Vice President and Chief Financial Officer at Sportsman’s Warehouse, from 2019 to 2021, and Executive Vice President and Chief Financial Officer and Treasurer, at Deluxe Entertainment Services Group, from 2017 to 2018. Previously in his career, Mr. Julian held senior financial roles for Callaway Golf Company, Lydall Inc., Rockwell International, Honeywell, Cisco Systems, Fisher Scientific and Legrand S.A. Mr. Julian also serves on the board of directors of Shoals Technologies Group, Inc., a leading provider of electrical balance of systems (EBOS) solutions for the energy transition market, as well as Rayton Solar Inc., a privately-held producer of engineered wafers that can serve as the basis for next-generation electronics. Qualifications: Among other qualifications, Mr. Julian brings significant senior management experience to our Board of Directors. His prior service as Chief Financial Officer of several publicly traded companies provides him with valuable accounting and financial expertise. He also brings substantial experience in managing businesses with direct-to-consumer e-commerce platforms and in the retail industry. These skills and experiences qualify Mr. Julian to serve on, and are utilized by, our Board of Directors. | | Robert K. Julian | | | Age: 62 Director Since: November 2024 Committees: Audit | |
Governance
| 12 | PROG Holdings, Inc. 2025 Proxy Statement |
Governance
| | Biographical Information: Mr. Martinez is the Co-Founder and President of Financial Services for EVERFI, Inc., an international technology company driving social change on the most challenging issues affecting society through online education, which was founded in 2008. EVERFI’s courses are implemented in K-12 schools, the workplace, and communities nationwide, reaching more than seven million learners each year. As a leader in digital learning, Mr. Martinez oversees the development of a variety of educational programs related to financial wellness, healthcare literacy, data science, and mental health, among other subjects. Mr. Martinez is a thought leader and frequent speaker and author on topics related to systemic inequality. He also serves on the board of the JumpStart Coalition for Personal Financial Literacy in Washington, D.C. Qualifications: Among other qualifications, Mr. Martinez brings consumer financial services regulatory experience to our Board, having worked closely with the Consumer Financial Protection Bureau and multiple states’ Attorneys General on financial literacy and other matters. He also has expertise leading large-scale strategic partnerships with global financial services companies, and utilizing digital technologies and data to deliver content and messaging to a wide range of businesses and consumers. Our Board of Directors utilizes these skills and experiences, and they qualify Mr. Martinez to serve on our Board of Directors. | | Ray M. Martinez | | | Age: 51 Director Since: September 2021 Committees: Audit; Nominating, Governance & Corporate Responsibility | |
Governance
| | Biographical Information: Mr. Michaels has served as our Chief Executive Officer since November 30, 2020. He was also named President of the Company as of April 1, 2021. From July 31, 2020 through November 2020, Mr. Michaels served as the Chief Executive Officer of the Company’s Progressive Leasing operating segment. Mr. Michaels previously served as the Company’s Chief Financial Officer and President of Strategic Operations from February 2016 until July 31, 2020, President of the Company from April 2014 until February 2016, Vice President, Strategic Planning & Business Development from 2013 until April 2014, Vice President, Finance from 2012 until April 2014 and Vice President, Finance, Aaron’s Sales & Lease Ownership Division from 2008 until 2011. Qualifications: Among other qualifications, Mr. Michaels brings significant operational and financial experience to our Board of Directors. His considerable experience in senior management, and his leadership and intimate knowledge of our business provide him with strategic and operational expertise generally and for the Company specifically, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors. | | Steven A. Michaels | | | Age: 53 Director Since: November 2020 Committees: N/A | |
Governance
| PROG Holdings, Inc. 2025 Proxy Statement | 13 |
Governance
| | Biographical Information: Ms. Mielke is the Managing Partner of Commerce Technology Advisors, LLC, a privately held firm she founded in April 2016, which provides consulting services to technology, financial services, and private equity companies regarding organic and inorganic growth strategies including building payment businesses and using artificial intelligence. Prior to founding Commerce Technology Advisors, Ms. Mielke served as the North American CEO of RS2 Inc., a leading provider of payment processing services in Europe and Asia Pacific, from 2018 to 2020. Previously in her career, Ms. Mielke held senior strategic roles for Vantiv, Inc., PayPal Holdings, Inc. and Visa International. Ms. Mielke also serves on the board of directors of WisdomTree, Inc., an exchange-traded fund and product sponsor and asset manager. She served on the boards of directors of Nuvei, a global payment technology provider, from 2020 until November 2024, when Nuvei became a private company and Bancorp, Inc., a provider of banking solutions for non-bank financial companies, from 2019 until November 2024. Qualifications: Among other qualifications, Ms. Mielke brings over 25 years of leadership experience working with digital payments, fintech, and e-commerce businesses, areas of expertise that are especially relevant to the Company. In addition, Ms. Mielke has served on several public company boards of directors, which provides her with valuable insights regarding how such boards perform their oversight roles. These skills and experiences qualify Ms. Mielke to serve on our Board of Directors. | | Daniela Mielke | | | Age: 59 Director Since: November 2024 Committees: Audit | |
Governance
| | Biographical Information: Mr. Robinson has served as our Chairman since April 2014. From November 2012 until his appointment as Chairman, Mr. Robinson was the Company’s independent lead director. Mr. Robinson started his career at AT&T in 1968, and prior to his retirement in 2003, he held several executive positions, including President of the Southern Region, its largest region, President and Chief Executive Officer of AT&T Tridom, Vice President of Operations for AT&T Business Customer Care, Vice President of AT&T Outbound Services, and Vice President of AT&T Public Relations. Mr. Robinson is also a director of FTAI Aviation Ltd., a global supplier of aircraft engines, modules and other materials associated with aircraft engine maintenance and removal, and FTAI Infrastructure, Inc., an owner and operator of assets in the energy, intermodal transport and rail market sectors in North America, all of which are public companies. Since 2003, Mr. Robinson has also served as a director and non-executive Chairman of Citizens Bancshares Corporation and its subsidiary, Citizens Trust Bank, the largest African American-owned bank in the Southeastern United States and the nation’s second largest. As of January 2017, Citizens Bancshares Corporation's stock is traded only on over-the-counter markets. Its subsidiary, Citizens Trust Bank, is not a publicly traded company. Mr. Robinson previously served as a director of RailAmerica, Inc. from 2010 to 2012, Avnet, Inc. from 2000 to 2018, Acuity Brands, Inc. from 2001 to 2023 and American Airlines Group, Inc. from 2005 to 2023. Mr. Robinson has also been Vice Chairman of the East Lake Community Foundation in Atlanta, Georgia since November 2003. Qualifications: Among other qualifications, Mr. Robinson brings experience in senior management and board service for numerous public companies to our Board of Directors. His service on the boards of a number of organizations of varying sizes provides him with extensive operational skills and governance expertise, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors. | | Ray M. Robinson | | | Age: 77 Director Since: November 2002 Committees: Compensation & Human Capital; Nominating, Governance & Corporate Responsibility | |
Governance
| 14 | PROG Holdings, Inc. 2025 Proxy Statement |
Governance
| | Biographical Information: Ms. Sheu served as the Global Director, Digital and Direct-to-Consumer Marketing for Google, where she led digital marketing for Google Store and drove Google's direct-to-consumer marketing vision and agenda for Google Devices & Services, from September 2020 to December 2024. Prior to that, she served as the Senior Vice President of North America Marketing at Ancestry, Inc. from 2017 to 2020. Ms. Sheu has also served as Vice President, Global Digital & Customer Marketing for GAP, Inc., where she led the central marketing organization and managed digital and mobile transformation initiatives across the company's omnichannel brands (Gap, Old Navy, Banana Republic, Athleta, and Intermix). Ms. Sheu has also served as Senior Vice President and Chief Marketing Officer for Care.com, the leading online marketplace for care services. Before joining Care.com, Ms. Sheu spent ten years in management positions in the digital gaming and entertainment industry, heading marketing at Disney Interactive, Sony Network Entertainment, and EA Online. Ms. Sheu also served on the Board of Directors of Lulus from March 2023 until September 2024. Qualifications: Among other qualifications, Ms. Sheu has nearly twenty years of experience transforming marketing focused organizations to adapt to rapidly changing consumer and technology trends. She has significant expertise in the areas of data analytics and digital marketing, as well as optimizing marketing spending across multiple channels and platforms. She also has a proven record of driving brand engagement and loyalty. Our Board of Directors utilizes these skills and experiences, and they qualify Ms. Sheu to serve on our Board of Directors. | | Caroline Sheu | | | Age: 51 Director Since: September 2021 Committees: Audit; Nominating, Governance & Corporate Responsibility | |
Governance
| | Biographical Information: Mr. Smith served in a variety of senior management positions at Wells Fargo & Company, most recently serving as Executive Vice President, Head of Digital & Direct Virtual Channels from June 2014 to September 2020, where he was responsible for enterprise digital strategy, capabilities and channels along with enterprise responsibility for retail contact centers (phone, email, chat) and served on the Wells Fargo & Company Management Committee. Mr. Smith has also served as a founding member of the board of directors of Akoya LLC, a privately-held financial data access network that allows aggregators and fintech companies to directly connect with financial institutions to securely obtain consumer-permissioned financial data. Mr. Smith is also an external advisor to Bain & Company, a management consulting firm. Mr. Smith previously served as a member of the board of directors of clearXchange from 2011 to 2015. Mr. Smith is also a mentor for the Miller Center for Social Entrepreneurship at Santa Clara University. Qualifications: Among other qualifications, Mr. Smith brings significant fintech expertise to our Board of Directors, particularly as a leader and pioneer with over 30 years’ experience leveraging emerging technologies and data in the financial services industry, including assisting with the development of the first ever Internet Banking offering in 1995 and development of many other industry firsts including mobile banking, ApplePay, and Zelle, a digital payments network started by a consortium of U.S. banks, including Bank of America, JPMorgan Chase and Wells Fargo. His experience in senior executive leadership positions, as well as his consulting experience, driving digital strategy, transformation and product development with respect to consumer financial service offerings are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors. | | James P. Smith | | | Age: 58 Director Since: May 2021 Committees: Audit; Nominating, Governance & Corporate Responsibility | |
Governance
| PROG Holdings, Inc. 2025 Proxy Statement | 15 |
Governance
Executive Officers Who Are Not Directors Set forth below are the names and ages of each current executive officer of the Company who is not a director. All positions and offices with the Company held by each such person are also indicated.
Governance
| Name (Age) | Position with the Company and Principal Occupation During the Past Five Years | | Brian J. Garner (45) | Chief Financial Officer since December 2020. Previously, Mr. Garner served in the Company’s Progressive Leasing operating segment as Senior Vice President of Finance and Accounting from January 2019 through November 2020, Vice President of Finance and Accounting from March 2015 through December 2018, and Controller from 2012 to February 2015. | | Todd King (56) | Chief Legal and Compliance Officer since May 2023. Previously, Mr. King served as the Company's Chief Corporate Governance, Securities Law and M&A Counsel from January 2017 through April 2023. Prior to joining the Company, Mr. King served as Deputy General Counsel, Corporate Secretary, and Chief Compliance Officer of Axiall Corporation (formerly known as Georgia Gulf Corporation). | | Matt Sewell (50) | Vice President, Financial Reporting and Principal Accounting Officer since December 2020. Previously, Mr. Sewell served as Director of Financial Reporting of the Company from October 2016 through November 2020. Prior to joining the Company, Mr. Sewell served as Director of Financial Reporting of Novelis Inc. from June 2014 to October 2016. |
Governance
Composition, Meetings and Committees of the Board of Directors Our Board of Directors is currently comprised of eleven directors having terms expiring at the Annual Meeting. Each of our directors will continue to hold office until the expiration of his or her term and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office or death. In connection with her retirement, Ms. Betty will not be standing for re-election to our Board of Directors at the Annual Meeting and, thus, her service on our Board of Directors will end at the conclusion of the Annual Meeting. Our Corporate Governance Guidelines include categorical standards adopted by our Board of Directors to determine director independence that meet the listing standards of the New York Stock Exchange, or “NYSE.” Our Corporate Governance Guidelines also require that at least a majority of our Board of Directors be “independent,” a requirement that aligns with the NYSE listing requirement that a majority of the Board of Directors be independent, as determined under the rules of the NYSE. Our Board of Directors has affirmatively determined that all of our directors are “independent” in accordance with NYSE listing requirements and the requirements of our Corporate Governance Guidelines, other than Mr. Michaels, our President and Chief Executive Officer, and Mr. Doman, a Special Advisor to our President and Chief Executive Officer. Our Board of Directors currently has three standing committees consisting of an Audit Committee, Compensation & Human Capital Committee, and Nominating, Governance & Corporate Responsibility Committee. From time to time, our Board of Directors may establish ad hoc committees at its discretion. Our Board of Directors has adopted a charter for each of its standing committees, copies of which are available on the Investor Relations section of our website located at investor.progholdings.com.
Governance
| 16 | PROG Holdings, Inc. 2025 Proxy Statement |
Governance
The current members of each committee are identified in the table below:
Governance
| Director | Audit Committee* | Compensation & Human Capital Committee | Nominating, Governance & Corporate Responsibility Committee | | Kathy T. Betty | | | | | | | | | | Douglas C. Curling | | | | | | | | | | Cynthia N. Day | | | | | | | | | | Robert K. Julian | | | | | | | | | | Ray M. Martinez | | | | | | | | | | Daniela Mielke | | | | | | | | | | Ray M. Robinson | | | | | | | | | | Caroline S. Sheu | | | | | | | | | | James P. Smith | | | | | | | | | | Number of Meetings in Fiscal Year 2024 | 8 | 5 | 4 | | Member Chair | | | |
Governance
| * Each of Ms. Day and Messrs. Curling and Julian have been designated as an “audit committee financial expert” as defined by Securities and Exchange Commission, or "SEC", regulations. As discussed on page 8, Ms. Betty will be retiring from the Board of Directors at the conclusion of her term at the Annual Meeting. In connection with Ms. Betty's retirement, the Board of Directors intends to appoint a new Chair of the Nominating, Governance & Corporate Responsibility Committee, as well as review the current membership of its committees for possible updates, immediately following the Annual Meeting. |
Meetings
Meetings Our Board of Directors held seven meetings during 2024. The number of meetings held by each of our committees in 2024 is shown in the table above. Each of our directors attended 75% or more of the total of all meetings of our Board of Directors and the committees on which he or she served during 2024 that occurred during the time when he or she served as a director. In addition to regularly scheduled meetings of our Board of Directors, individual directors each made themselves available for consultation with management on an ad hoc basis with respect to various matters throughout the year. It is our policy that directors are expected to attend the annual meeting of shareholders in the absence of a scheduling conflict or other valid reason. All of the individuals serving on our Board of Directors on the date of the 2024 Annual Meeting of Shareholders, May 15, 2024, attended the meeting. The non-management and independent members of our Board of Directors meet frequently in executive session, without management present. Mr. Robinson, the Chairman of our Board of Directors, chairs these meetings.
Meetings
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Committees
Committees
Committees
| Audit Committee | Responsibilities: The function of the Audit Committee is to assist our Board of Directors in fulfilling its oversight responsibility relating to: ▪the integrity of the Company’s consolidated financial statements; ▪the financial reporting process and the systems of internal accounting and financial controls; ▪the performance of the Company’s internal audit function and independent auditors; ▪the independent auditors’ qualifications and independence; ▪the Company’s compliance with ethics policies (including oversight and approval of related party transactions and reviewing and discussing certain calls to the Company’s ethics hotline and the Company’s investigation of and response to such calls) and legal and regulatory requirements; ▪the adequacy of the Company’s policies and procedures to assess, monitor and manage business risks including financial, regulatory and cybersecurity risks and its corporate compliance programs, including receiving quarterly reports related to such risks and programs; and ▪the adequacy of the Company's information security and privacy program and cybersecurity initiatives. The Audit Committee is directly responsible for the appointment, compensation, retention, and termination of our independent auditors, who report directly to the Audit Committee, and for recommending to our Board of Directors that the Board recommend to our shareholders that the shareholders ratify the retention of our independent auditors. In connection with its performance of these responsibilities, the Audit Committee regularly receives reports from and holds discussions with Company management, the independent auditors, and leaders from the Company’s audit services, compliance, information security, legal and enterprise risk management departments and functional areas. Many of those discussions are held in executive session with the Audit Committee. | | Members: Ms. Day (Chair) Mr. Curling Mr. Julian Mr. Martinez Ms. Mielke Ms. Sheu Mr. Smith Number of Meetings: 8 Each member of the Audit Committee satisfies the independence requirements of the NYSE and SEC rules applicable to audit committee members, and each is financially literate. Our Board of Directors has designated each of Ms. Day and Messrs. Curling and Julian as an “audit committee financial expert” as defined by SEC regulations. | |
Committees
| Compensation & Human Capital Committee | Responsibilities: The purpose of the Compensation & Human Capital Committee is to assist our Board of Directors in fulfilling its oversight responsibilities relating to: ▪executive and director compensation; ▪equity compensation plans and other compensation and benefit plans; and ▪human capital management strategies, programs and practices. The Compensation & Human Capital Committee has the authority to: ▪review and approve performance goals and objectives for the named executive officers in connection with the Company’s compensation programs; ▪evaluate the performance of the named executive officers, in light of such performance goals and objectives and other matters, for compensation purposes; ▪determine the compensation of the named executive officers, including our President and Chief Executive Officer, based on such evaluations and other matters; ▪approve grants of equity incentives; and ▪consider from time to time, and recommend to our Board of Directors, changes to director compensation. Compensation & Human Capital Committee Interlocks and Insider Participation For the year ended December 31, 2024, the Compensation & Human Capital Committee consisted of Mses. Betty and Day and Messrs. Curling and Robinson, each of whom our Board of Directors determined was independent in accordance with NYSE listing requirements. No member of the Compensation & Human Capital Committee during 2024 is or was formerly an officer or employee of the Company or any of its subsidiaries or was a related person in a related person transaction with the Company required to be disclosed under applicable SEC rules. | | Members: Mr. Curling (Chair) Ms. Betty Ms. Day Mr. Robinson Number of Meetings: 5 Each member of the Compensation & Human Capital Committee satisfies the independence requirements of the NYSE applicable to compensation committee members and is a non-employee director under Rule 16b-3 of the Securities Exchange Act of 1934, or the “Exchange Act.” | |
Committees
| 18 | PROG Holdings, Inc. 2025 Proxy Statement |
Committees
| Nominating, Governance & Corporate Responsibility Committee | Responsibilities: The purpose of the Nominating, Governance & Corporate Responsibility Committee is to assist our Board of Directors in fulfilling its responsibilities relating to: ▪board and committee membership, organization, and function; ▪director qualifications and performance; ▪management succession; ▪corporate governance principles and policies; and ▪the Company's overall approach to environmental, social and governance, or "ESG" and corporate responsibility matters. The duties of the Nominating, Governance & Corporate Responsibility Committee include: ▪from time to time, identifying and recommending to our Board of Directors individuals to be nominated for election as directors; ▪developing and recommending to our Board of Directors for adoption corporate governance principles applicable to the Company; ▪reviewing the Company's Environmental, Social and Governance, or "ESG" programs and disclosures, and monitoring and discussing ESG developments and trends; ▪discussing the self-evaluation process for the Board of Directors and its committees; ▪receiving updates about the Company's directors' and officers' insurance coverage; ▪reviewing the Company's Code of Conduct and recommending any changes to the Code to the Board of Directors; ▪discussing the Company's governmental and regulatory affairs programs and initiatives; and ▪receiving updates about the Company's director orientation and continuing education offerings. | | Members: Ms. Betty (Chair) Mr. Martinez Mr. Robinson Ms. Sheu Mr. Smith Number of Meetings: 4 Each member of the Nominating, Governance & Corporate Responsibility Committee satisfies the independence requirements of the NYSE. | |
Committees
Assessment of Director Candidates and Required Qualifications The Nominating, Governance & Corporate Responsibility Committee is responsible for considering and recommending to our Board of Directors nominees for election as director at our annual meeting of shareholders and nominees to fill any vacancy on our Board of Directors. Our Board of Directors, after taking into account the assessment provided by the Nominating, Governance & Corporate Responsibility Committee, is responsible for considering and recommending to our shareholders nominees for election as director at our annual meeting of shareholders. In accordance with our Corporate Governance Guidelines, both the Nominating, Governance & Corporate Responsibility Committee and our Board of Directors, in evaluating director candidates, consider the experience, talents, skills and other characteristics of each candidate and our Board of Directors as a whole in assessing potential nominees to serve as director. We believe that, at a minimum, a director should have the highest personal and professional ethics, moral character and integrity, demonstrated accomplishment in his or her field and the ability to devote sufficient time to carry out the duties of a director. To help ensure the ability to devote sufficient time to board matters, no director may serve on the board of more than four other public companies while continuing to serve on our Board of Directors, and no director that serves as chief executive officer of another company may serve on the board of more than two other public companies while continuing to serve on our Board of Directors, unless our board determines in its business judgment that such simultaneous service will not impair the director's ability to serve on our Board of Directors, and that such simultaneous service is otherwise in the best interests of the shareholders.
Committees
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Committees
In addition to these minimum qualifications, our Board of Directors may consider all information relevant in their business judgment to the decision of whether to nominate a particular candidate for a particular board seat. These factors may include a candidate’s professional and educational background, reputation, industry knowledge and business experience and the relevance of those characteristics to us and our Board of Directors. In addition, candidates will be evaluated on their ability to complement or contribute to the mix of talents, skills and other characteristics needed to maintain the effectiveness of our Board of Directors and their ability to fulfill the responsibilities of a director and of a member of one or more of the standing committees of our Board of Directors. We also believe that new ideas and fresh perspectives are critical to a forward-looking and strategic Board of Directors, as is the institutional knowledge and deep understanding of the Company’s business and industries that longer-tenured directors offer. Our Corporate Governance Guidelines therefore do not contain established term limits for directors, but do provide for a general policy that no person may be nominated for election to our Board of Directors or appointed to fill a vacancy on the Board of Directors if he or she will be age 75 or older upon his or her election or appointment. The Board of Directors believes that it is important to monitor its composition, skills and needs in the context of the Company’s long-term strategic goals, and, therefore, upon the recommendation of our Nominating, Governance & Corporate Responsibility Committee, may exercise its judgment and elect to waive this policy in individual cases when it deems appropriate. The Board of Directors believes it is important to balance refreshment of the Board of Directors with the need to retain directors who have developed, over time, significant insight into the Company and its operations and who continue to make valuable contributions to the Company that benefit our shareholders. In 2024, the Nominating, Governance & Corporate Responsibility Committee recommended to the Board of Directors that it grant a waiver to its retirement policy for our Chairman, Ray M. Robinson, currently age 77, to allow Mr. Robinson to be nominated for re-election to the Board of Directors at the Annual Meeting. Among others, the Board of Directors and Nominating, Governance & Corporate Responsibility Committee considered the following factors regarding a waiver of the retirement policy for Mr. Robinson at that time: ▪his extensive knowledge of the Company and the industries in which it operates; ▪his effective and professional leadership as our Chairman of the Board of Directors; ▪his diversity of background, knowledge and perspective; and ▪his desire and ability to continue to guide and serve the Company. In connection with its annual review and recommendation of candidates to serve as nominees to our Board of Directors this year, the Nominating, Governance & Corporate Responsibility Committee once again considered these and other factors in recommending to the Board of Directors that it grant a waiver to its retirement policy to allow Mr. Robinson to be nominated for re-election at the Annual Meeting. In making this recommendation, the Nominating, Governance & Corporate Responsibility Committee also again recognized the success of the Board of Directors' recent refreshment efforts, noting that five new independent directors have been added to the Board of Directors since 2020, including Mr. Julian and Ms. Mielke, who were appointed to the Board of Directors in November 2024. The Nominating, Governance & Corporate Responsibility Committee also noted that six of the Board of Directors' directors have served on the Board for less than six years and eight of the Board of Directors' directors have served on the Board of Directors less than ten years. The Board of Directors and Nominating, Governance & Corporate Responsibility Committee therefore reaffirmed its view that this has continued to result in a balanced range of tenures, ensuring both continuity and fresh perspectives among our director nominees. After considering these facts and circumstances, the Board of Directors determined that it is in the best interests of the Company and its shareholders to waive the retirement policy for Mr. Robinson to allow for his nomination for election at the Annual Meeting.
Committees
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Non-Management Director Compensation in 2024
Non-Management Director Compensation in 2024 The compensation program for our non-employee directors is designed to fairly compensate them for the effort and responsibility required to serve on the board of a company of our size and scope, as well as to align our directors’ interests with those of our shareholders more generally. For 2024, our non-employee directors received an annual cash retainer of $100,000 and an annual award of restricted stock units having a value of $150,000, which generally vests one year following the grant date. Our Chairman, Mr. Robinson, in recognition of the additional duties he performs by serving as our Chairman, also receives a cash retainer of $125,000. Non-employee directors serving as the chairpersons of our Audit, Compensation & Human Capital and Nominating, Governance & Corporate Responsibility Committees also received an additional annual cash retainer of $30,000, $25,000 and $20,000, respectively, for their additional service and related time commitments. Our non-employee directors may also elect to participate in our Deferred Compensation Plan. Directors who are employees of the Company receive no compensation for their service on our Board of Directors. The following table shows compensation earned by non-employee directors during 2024:
Non-Management Director Compensation in 2024
| Name | Fees Earned or Paid in Cash1 ($) | Stock Awards2 ($) | Total ($) | | Kathy T. Betty3 | 120,000 | 150,000 | 270,000 | | Douglas C. Curling3 | 125,000 | 150,000 | 275,000 | | Cynthia N. Day3 | 130,000 | 150,000 | 280,000 | | Robert K. Julian4 | 13,333 | 150,000 | 163,333 | | Ray Martinez3 | 100,000 | 150,000 | 250,000 | | Daniela Mielke4 | 13,333 | 150,000 | 163,333 | | Ray M. Robinson3 | 225,000 | 150,000 | 375,000 | | Caroline Sheu3, 5 | 100,000 | 150,000 | 250,000 | | James P. Smith3 | 100,000 | 150,000 | 250,000 |
Non-Management Director Compensation in 2024
1.Includes fees earned for services in the fourth quarter of 2024 which were paid in 2025. 2.Represents the grant date fair value of stock awards pursuant to Financial Accounting Standards Board Codification Topic 718. 3.As of December 31, 2024, each of these non-executive directors held 4,151 units of restricted stock subject to vesting, which was the number of units of restricted stock granted to them in May 2024. 4.As of December 31, 2024, each of these non-executive directors held 3,109 units of restricted stock subject to vesting, which was the number of units of restricted stock granted to them in November 2024. 5.Ms. Sheu elected to defer receipt of all of her cash retainer pursuant to the Company's Deferred Compensation Plan for 2024. The Company does not provide matching contributions under that plan with respect to non-employee directors. Stock Ownership Guidelines Under our current stock ownership guidelines, each director is expected to own or acquire shares of our common stock and common stock equivalents (including restricted stock and restricted stock units) having a value of at least $400,000 prior to the later of January 31, 2021 or four years from when the director first joined our Board of Directors. As of December 31, 2024, each of our directors is currently in compliance with the requirements established in these guidelines.
Non-Management Director Compensation in 2024
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Compensation Discussion and Analysis
1.We define reactivated customers as previous customers that last funded a lease more than 24 months ago. The Compensation Committee is committed to implementing executive compensation plan designs, metrics and strategies, that are intended to incent and motivate our leadership team to reach the goals set by the Compensation Committee, as discussed in further detail in this CD&A. The Compensation Committee-approved compensation programs are further designed to create a strong linkage between executive pay and the Company's financial and operational performance. As part of the Compensation Committee’s annual review of the Company’s executive compensation programs, in early 2024, the Compensation Committee approved changes to the Company’s Long-Term Incentive Program (“LTIP”) to better reflect market practice, ensure a greater weighting on performance awards and create even greater alignment with shareholders. The Compensation Committee moved away from the use of stock options and, instead, utilized performance shares tied to the Company’s relative total shareholder return measured at the end of a three-year performance period. We believe these changes further evidence the Compensation Committee’s commitment to ensuring that the Company’s executive compensation incentivizes and motivates our leadership team, while further linking executive pay to the Company’s financial and operational performance and creating long-term shareholder value. For 2024, those pay-linked performance results included: ▪With respect to the Company's Annual Short-Term Incentive Program ("STIP"), the Company meaningfully exceeded the target level of performance for Adjusted EBITDA and for Progressive Leasing GMV. The Company exceeded the maximum level of performance for GMV generated from Progressive Leasing's direct-to-consumer offering, PROG Marketplace, for GMV generated by Progressive Leasing through cross-marketing efforts with the Company's other businesses, and for achieving the Company's strategic and compliance goals. As a result, Messrs. Michaels, Garner and King earned an STIP payment equal to 150.4% of their targeted compensation. ▪With respect to the Company's LTIP, the Company exceeded the target level of performance for Adjusted Revenue and Adjusted Pretax Income. As a result, Messrs. Michaels, Garner and King earned an LTIP payout of 152.4% of the performance shares tied to those two metrics that were granted to them in 2024.(1) During 2024, the Committee also granted those NEOs performance shares that may be earned based on the relative total shareholder return of the Company's stock during a three-year performance period. Any of those shares that are earned would cliff-vest at the end of the three-year performance period, following the Committee's certification of the level of performance achieved. (1) We define Adjusted Revenue as the consolidated GAAP revenues of PROG Holdings, Inc., reduced for the amount of credit loss provision expense at Vive, Four and the Company's other strategic operations. Adjusted Pretax Income is consolidated GAAP earnings before income tax expense, adjusted to exclude restructuring expenses and costs related to the cybersecurity incident, net of insurance recoveries.
Our Strong Compensation Governance Practices
| | ▪Independent Compensation Committee assisted by an independent consultant ▪We annually assess the Company's compensation policies to ensure that the features of our program do not encourage undue risk ▪All executives are "at will" employees ▪Pay mix that emphasizes performance-based compensation over fixed compensation ▪Align pay and performance by providing a greater portion of total pay in long-term, equity-based compensation ▪Incentive plans that utilize multiple measures, including growth, profitability, and returns ▪Capped incentive plan payouts, with robust performance targets and ranges ▪Double-trigger equity vesting acceleration upon a change of control ▪Meaningful stock ownership requirements | | | | | What We Do | | | | ▪No repricing or cash buyouts of stock options without shareholder approval ▪No excise or other tax gross-ups on change-in-control payments ▪No hedging or pledging of Company stock ▪No excessive perquisites or other benefits ▪No single-trigger severance benefits upon a change-in-control ▪No payment of dividends on unearned or unvested shares ▪No guaranteed incentive payments ▪No employment agreements with our NEOs | | | | | What We Don’t Do | |
Our Strong Compensation Governance Practices
2024 Compensation Process and Actions Role of the Compensation Committee. The Compensation Committee is comprised solely of directors that our Board of Directors has determined to be independent under applicable standards of both the SEC and NYSE. Its role is to oversee executive and outside director compensation, benefit plans and policies, including equity compensation plans and other forms of compensation, and other significant human capital matters. More specifically, the Compensation Committee reviews and discusses proposed compensation for NEOs, evaluates their performance, and sets their compensation. In addition, the Compensation Committee approves all equity awards for NEOs and other executive officers. Role of Management. The Compensation Committee considered the input and recommendations of Mr. Steve Michaels with respect to our executive compensation programs and decisions that impact other NEOs. Mr. Garner also provided input with respect to financial goals and recommendations as relevant to the overall executive compensation program design. Although management and other invitees at Compensation Committee meetings may participate in discussions and provide input, all votes and final decision-making on NEO compensation are solely the responsibility of the Compensation Committee, and those final deliberations and votes are conducted in executive sessions in which no executive officer participates. Role of Independent Compensation Consultant. The Compensation Committee has the authority to retain independent consultants and other advisors. During 2024, the Compensation Committee retained the services of Exequity LLP ("Exequity") which reported directly to the Compensation Committee but worked with management at the direction of the Compensation Committee. The Compensation Committee assessed the independence of the advisors, including the potential for conflicts of interest as required by the SEC and NYSE listing standards, and concluded that Exequity was appropriately independent and free from potential conflicts of interest. Although the specific services of the independent consultant vary from year to year, the following are the services generally provided by the independent consultant: ▪providing information on trends and related legislative, regulatory, and governance developments; ▪reviewing and recommending any changes to the benchmarking peer group for the consideration and approval of the Compensation Committee; ▪conducting competitive assessments of executive compensation levels and incentive program designs; ▪consulting on compensation for outside directors; ▪conducting a review of our compensation programs from a risk assessment perspective; ▪assisting with review and disclosures regarding the executive compensation programs; and ▪reviewing the Compensation Committee’s annual calendar and related governance matters. Representatives from Exequity attended meetings of the Compensation Committee pertaining to 2024 executive compensation decisions, and also participated in executive sessions as requested by the Compensation Committee. Role of Benchmarking. The Compensation Committee uses compensation market data as a reference for understanding the competitive positioning of each element of our compensation program and of total compensation. The Compensation Committee annually reviews market data provided by its independent consultant to better understand market movement and to assess how our executives' compensation compares. Market data was reviewed at the end of 2023 to help inform 2024 target pay levels for our NEOs.
Our Strong Compensation Governance Practices
In referencing this market data, the Compensation Committee does not manage total compensation for our NEOs within a prescribed competitive position or percentile of the compensation market. Rather, the Compensation Committee reviews compensation for each NEO relative to market data and considers other internal and external factors when exercising its business judgment as to compensation decisions. Other factors material to the Compensation Committee’s deliberations include objective measurements of business performance, accomplishment of compliance, strategic, and financial objectives, the development and retention of management talent, enhancement of shareholder value, and other matters the Compensation Committee deems relevant to our short-term and long-term success. With respect to 2024 compensation decisions, the Compensation Committee referenced a market study that was conducted by Exequity at the end of 2023, which utilized both peer group and survey data. The peer group used in the study is annually reviewed and approved by the Compensation Committee to ensure its continued applicability to the Company in terms of operating characteristics, size (revenue and market capitalization) and industry appropriateness. The peer group serves as the primary reference group for reviewing NEO pay. No changes to the peer group were made in 2023 for 2024 pay considerations. In addition to peer group data, the Compensation Committee also reviews general industry survey data as a secondary reference. Survey data was sourced from Willis Towers Watson's 2023 General Industry Executive Compensation Survey.
Our Strong Compensation Governance Practices
| Peer Group | | | | Ally Financial Inc. | Euronet Worldwide, Inc. | OneMain Holdings, Inc. | | Black Knight, Inc. | FirstCash Holdings, Inc. | PRA Group, Inc. | | Credit Acceptance Corporation | Genpact Limited | SLM Corporation | | Discover Financial Services | Green Dot Corporation | Synchrony Financial | | Encore Capital Group, Inc. | Jack Henry & Associates, Inc. | WEX Inc. | | Enova International, Inc. | LendingTree, Inc. | | | ePlus inc. | Navient Corporation | |
Compensation Outcomes and Pay Mix for 2024
Annual Cash Incentive Awards Annual cash incentive awards made through our 2024 STIP provide the opportunity to earn cash awards based on the achievement of performance targets determined by the Compensation Committee at the beginning of the year. The amount earned will vary based on the degree to which the performance target is achieved, subject to the Compensation Committee’s review. The target awards for 2024 set forth below applied to our NEOs as of December 31, 2024:
Compensation Outcomes and Pay Mix for 2024
Performance Measures and Weights. During the first quarter of 2024, the Compensation Committee established the performance metrics that would be used in the 2024 STIP, the weighting for each of those metrics, as well as threshold, target and maximum levels of performance for each of the metrics, that corresponded to a threshold, target, and maximum incentive payout level. The following were the performance measures and weights for the 2024 STIP for each NEO:
Compensation Outcomes and Pay Mix for 2024
because our Board and management team believe that finding ways to grow Progressive Leasing's GMV, despite the macroeconomic environment presenting challenges to its customers and POS partners, is essential to continuing to create long-term value for the Company's shareholders. To that end, PROG Marketplace GMV and Progressive Leasing GMV from Cross-Marketing were selected as additional STIP Growth Metrics to help drive an increase in overall GMV for Progressive Leasing. More specifically, PROG Marketplace GMV was selected for the 2024 STIP because our Board and management team believe direct-to-consumer offerings are an increasingly important source of growth for our GMV, revenues and earnings. Our Board and management team also believe that a focus on direct-to-consumer offerings will enable us to drive additional customers and revenue to our valued POS partners, while also providing customers with the flexibility to shop for leasable items, and pay for those items using Progressive Leasing, wherever and whenever they choose to do so. Progressive Leasing GMV from Cross-Marketing was selected as an STIP Growth Metric for 2024 because our Board and management team believe that one of the primary benefits of maintaining a consumer payment ecosystem with multiple types of payment offerings is the ability of each of those businesses to drive additional customers and revenue to other businesses within that ecosystem through cross-marketing initiatives, thereby allowing customers to select the payment option that best meets their need at any given time. The Compensation Committee weighted the remaining portion of the 2024 STIP toward the Company’s key compliance and strategic initiatives. The Compensation Committee believes this metric emphasizes the importance of recognizing progress in areas beyond financial results that support the Company’s business strategy and values and is critical to creating sustained shareholder value in the future. For these reasons, the Compensation Committee assigned the compliance and strategic initiatives metric a weighting of 15%. Performance Goals and Results. The Compensation Committee established goals for each of the performance measures in the 2024 STIP during the first quarter of 2024, including a threshold, target, and maximum performance goal that corresponded to a threshold, target, and maximum incentive payout level. As discussed further above in our Executive Summary, the performance measures were set by the Compensation Committee to appropriately incentivize management to achieve rigorous, yet attainable, results in a very challenging macroeconomic operating environment, while at the same time, driving a strong outcome for the Company's shareholders. For the Adjusted EBITDA metric and the Growth Metrics, the payout range was from 0% to 200% of target and, for the Compliance and Strategic Initiatives measure, the payout range was from 0% to 150% of target (based on the number of compliance/strategic-related goals achieved). The following tables summarize the performance goals, performance results, and related 2024 STIP payout levels as a percentage of target for each NEO:
Compensation Outcomes and Pay Mix for 2024
| | | Weight | Plan Performance Range | | | Actual Performance and Payout1 | | | | | Metric ($ in millions) | | Threshold | Target | Maximum | 12/31/2024 | % Achieved | Payout Calculation | | | Consolidated Adjusted EBITDA | 60% | $201.4 | $251.7 | $302.0 | $274.0 | 144.3% | 86.6% | | | Progressive Leasing GMV | 15% | $1,665 | $1,850 | $2,035 | $1,972.2 | 141.7% | 21.3% | | | PROG Marketplace GMV | 5% | $20 | $25 | $30 | $41.5 | 200% | 10.0% | | | Progressive Leasing GMV from Cross-Marketing | 5% | $12 | $15 | $18 | $22.7 | 200% | 10.0% | | | Compliance and Strategic Initiatives | 15% | 4 Projects | 5 Projects | 6 Projects | 6 Projects | 150%2 | 22.5% | | | Total Payout | | | | | | | 150.4% | | 1.Actual performance was adjusted to exclude the impact of: (i) stock-based compensation; (ii) restructuring expenses; and (iii) costs related to the cybersecurity incident experienced by Progressive Leasing in September 2023, net of insurance recoveries. 2.Compliance and Strategic goals are capped at 150% of target. | | | | | | | | |
Compensation Outcomes and Pay Mix for 2024
| Named Executive Officer | 2024 Target Annual Incentive ($) | Award Earned Under Annual Short-Term Incentive Plan Based on 2024 Performance ($) | | Steven A. Michaels | 1,500,000 | 2,256,000 | | Brian J. Garner | 605,000 | 909,920 | | Todd King | 337,500 | 507,600 |
Compensation Outcomes and Pay Mix for 2024
Long-Term Equity Incentive Awards PROG Holdings' long-term equity incentive ("LTI") awards are intended to: ▪reward the achievement of business objectives that the Compensation Committee believes will benefit our shareholders; ▪align the interests of our senior management with those of our shareholders; and ▪assist with retaining our senior management to ensure continuity of leadership. Beyond these objectives, the Compensation Committee also considers market design practices, equity dilution, accounting expense, and other internal considerations when deciding on the structure and size of equity awards. Several enhancements were made to LTI awards for 2024, including incorporating a three-year relative total shareholder return (rTSR) performance metric for a portion of the performance share units granted. Award Type and Mix. Each year the Compensation Committee grants equity awards to our NEOs; however, the award type and mix may change from time to time. In order to balance performance and retention incentives, the 2024 equity awards were made in the form of performance share units and time-based restricted stock awards. The graphic below depicts our 2024 equity share award mix for Messrs. Michaels, Garner and King, excluding the Transitional Restricted Stock Award granted to each of our NEOs that was made in connection with the transition to the rTSR performance metric, which is further discussed below.
Compensation Outcomes and Pay Mix for 2024
| 2024 Equity Awards | Objective | Key Features | | Performance Shares | ▪Align our executives with shareholders through performance-contingent awards that are paid in stock and measure both internal and external performance, and that consider absolute performance to pre-established goals as well as relative performance against similarly sized public companies. ▪40% of the LTI awards measure annual adjusted revenue and adjusted pretax income, equally weighted. ▪30% of the LTI awards measure relative TSR over a cumulative three-year performance period. | ▪Performance shares based on internal financial metrics (revenue and profit) are measured on one-year Company performance to enhance accuracy in goal setting. Any earned awards pursuant to the internal performance shares are subject to additional time-based vesting, with the vesting occurring in three equal increments following the first, second, and third anniversaries of the grant, which facilitates our retention objectives and achievement of internal financial metrics. ▪Relative TSR performance shares are measured against the S&P 600 Small Cap Index over three years and may vest at the end of the performance period depending on relative performance. | | Restricted Stock | ▪The final 30% of the total LTI awards address competitive concerns with a focus on retaining our key executives needed to realize our long-term performance objectives. | ▪Pro rata annual three-year vesting, with vesting occurring in three equal increments following the first, second, and third anniversaries of the grant. | | Transitional Restricted Stock | ▪In 2024, the Company transitioned to relative TSR performance shares (as described above) that may vest at the end of a three-year performance period. This program replaced stock options that vested on an annual basis. This transition resulted in a temporary liquidity gap which was offset by a one-time transitional award of RSUs intended to replicate the foregone vesting opportunity caused by the move to the new LTI design. | ▪One-time transitional RSUs vest one-third on the first anniversary of the grant and two-thirds on the second anniversary of the grant, facilitating our retention objectives. |
Compensation Outcomes and Pay Mix for 2024
| | Restricted Stock1 | | Performance Shares | | 2024 Target LTI Value | | Named Executive Officer | (#) | ($) | (#) | ($) | ($) | | Steven A. Michaels | 126,532 | 3,720,000 | 147,620 | 5,025,200 | 8,745,200 | | Brian J. Garner | 36,480 | 1,072,500 | 42,560 | 1,448,800 | 2,521,300 | | Todd King | 13,776 | 405,000 | 16,072 | 547,100 | 952,100 |
Compensation Outcomes and Pay Mix for 2024
1.50% of the restricted stock awards granted in 2024 were Transitional Restricted Stock Awards, further discussed below. LTI awards for 2024 generally were converted to a target number of performance shares and time-based restricted stock by dividing the allocable portion of the grant date award value by the Company's closing stock price on the date of grant. The number of rTSR performance shares granted was determined based on the allocable portion of the grant date award divided by the closing price of the Company's common stock on the date of grant. However, the estimated fair value of the rTSR performance shares on the grant date, represented in the table above, was determined using a Monte Carlo simulation model that resulted in an estimated fair value of 136.8% of the closing price of the Company's common stock on the date of the grant.
Performance Shares Performance Measures and Weights
Performance Shares Performance Measures and Weights The following were the performance measures and weights for the performance shares granted in 2024:
Performance Shares Performance Measures and Weights
| Performance Measures | Percentage of LTI1 | | Relative TSR | 30% | | Consolidated Adjusted Revenue | 20% | | Consolidated Adjusted Pretax Income | 20% |
Performance Shares Performance Measures and Weights
1.The remaining LTI grant was provided through restricted stock awards. Relative TSR measures the Company's stock price at the beginning and end of the three-year performance period relative to the S&P 600 Small Cap Index. Consolidated Adjusted Revenue is the consolidated GAAP revenues of the Company, reduced for the amount of credit loss provision expense at Vive, Four and the Company's other strategic operations. Consolidated Adjusted Pretax Income is consolidated GAAP earnings before income tax expense, adjusted to exclude restructuring expenses and costs related to the cybersecurity incident Progressive Leasing experienced in September 2023, net of insurance recoveries. The Compensation Committee selected these measures to focus participants on the financial performance of our business, including sustaining and improving the quality of our earnings, as well as ensuring that our internal performance is aligned with our stock price and shareholder returns.
Transitional Restricted Stock Awards
Transitional Restricted Stock Awards As discussed above, we modified the structure of our performance shares to include a three-year rTSR performance metric for a portion of the performance shares granted. In connection with this design change, which more closely aligns with market norms and more accurately measures multi-year performance, plan participants realized a liquidity reduction during the transition period. In recognition of this, and in order to incentivize our key executives, the Compensation Committee approved a special, one-time restricted stock award to our NEOs to offset the value loss in the initial two years of the new performance share awards. These special restricted stock awards vest one-third on the first anniversary of the grant date and two-thirds on the second anniversary of the grant date. Executive Compensation Policies Stock Ownership Guidelines. The Compensation Committee has adopted stock ownership guidelines to further align the interests of senior executives with our shareholders. The table below summarizes the current guidelines that apply to our NEOs. As of December 31, 2024, our executive officers either meet or are on track to meet guidelines within the five-year timeframe specified by these guidelines.
Transitional Restricted Stock Awards
| Feature | Provision | | Required levels | 5x base salary: Chief Executive Officer 3x base salary: Chief Financial Officer and Chief Legal and Compliance Officer | | Shares counted toward guidelines | Stock owned outright Shares held in retirement accounts Unvested time-based restricted stock units and restricted stock awards Earned but unvested performance shares “In the money” value of vested but unexercised stock options |
Transitional Restricted Stock Awards
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Transitional Restricted Stock Awards
Clawback Policy. In November 2023, the Compensation Committee adopted an updated clawback policy to comply with applicable laws and NYSE listing standards, which provides that all or a portion of any incentive-based compensation awarded to our executive officers must be recouped if we restate our consolidated financial statements. Under this policy, covered employees, including our NEOs, would be required to repay to the Company the difference between the amount of incentive-based compensation received and the amount that would have been payable under the restated financial statements, on a pre-tax basis. Securities Trading Policy. As part of our Insider Trading Policy, all of our officers and directors are prohibited from trading any interest or position relating to the future price of our securities. These prohibited transactions include trading in puts, calls, short sales, or hedging transactions, but do not generally prohibit other purchases and sales of our common stock made in compliance with the limitations contained in our Insider Trading Policy. Pledging of Company securities is prohibited under our Insider Trading Policy. The Company recently amended its Insider Trading Policy in response to the SEC's recent amendments to the rules governing Rule 10b5-1 trading plans. Tally Sheets. The Compensation Committee reviews tally sheets for select executives. These tally sheets provide a comprehensive view of target, actual, and contingent executive compensation payouts under a variety of termination and performance scenarios. The tally sheets allow the Compensation Committee to understand the cumulative effect of prior pay decisions and stock performance, as well as the retentive ability of existing LTIs, severance, and change-in-control arrangements. The tally sheets are intended to facilitate the Compensation Committee’s understanding of the nature and amounts of total compensation under our executive compensation program and to assist the Compensation Committee in its overall evaluation of our program. Executive Benefits and Perquisites Our executive compensation program also provides certain benefits and perquisites to our NEOs. The value of these benefits and perquisites represents a small portion of an NEO’s overall total compensation opportunity and does not materially influence the Compensation Committee’s decisions with respect to the salary and incentive elements of the compensation of our NEOs. The Compensation Committee periodically reviews the perquisites and other personal benefits that we provide to senior management to ensure they remain in the best interests of the Company and its shareholders. Healthcare Benefits. Our NEOs receive a full range of standard benefits, including the medical, dental, vision, life and voluntary disability coverage available to our employees generally. Retirement Plans. Our NEOs participate on the same basis as other employees in our 401(k) Retirement Savings Plan, which we refer to as our 401(k) Plan, for all full-time employees. Employees with at least 90 days of service who meet certain eligibility requirements are eligible for a Company match. Our 401(k) Plan uses a safe harbor formula that allows employees to contribute up to 75% of their annual compensation with 100% matching by the Company on the first 3% of compensation and an additional 50% match on the next 2% of compensation. All matching by the Company is immediately vested. Under the Company’s Nonqualified Deferred Compensation Plan, which we refer to as the Deferred Compensation Plan, a select group of management or highly compensated employees are eligible to elect to defer up to 75% of their base salary and up to 75% of their annual bonus on a pre-tax basis. Should they so elect, the Company will make discretionary matching contributions under the same formula that applies for our 401(k) Plan, with the benefit not exceeding the 401(k) Plan statutory limit. Severance Arrangements. It has been our practice to utilize an executive severance plan and other severance and change-in-control arrangements for select executives to provide these senior leaders certain benefits in the event their employment is terminated by us without cause or after a change in control of the Company. We believe these arrangements assist us in hiring executives and in retaining key leaders who are critical to the ongoing stability of our business. We further believe they foster objectivity should they be asked to evaluate proposals that may result in the loss of their employment. We believe our severance and change-in-control arrangements with our executives are reflective of current market practices. See “Executive Compensation – Potential Payments Upon Termination or Change-in-Control.”
Transitional Restricted Stock Awards
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Transitional Restricted Stock Awards
Tax Considerations Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to public companies for annual compensation over $1 million (per individual) paid to certain executive officers. As a result, most of the compensation payable to any of our NEOs in excess of $1 million annually will not be fully deductible. When setting executive compensation, we consider many factors, such as attracting and retaining executives and providing appropriate performance incentives. We also consider the after-tax cost to the Company in establishing our executive compensation programs, both individually and in the aggregate, but tax deductibility is not our sole consideration, and, in general, it has not been a material factor in our considerations when determining the amounts of compensation to be paid to our NEOs. Furthermore, the Compensation Committee expects in the future to authorize compensation in excess of $1 million to our executives that will not be fully deductible when it believes doing so is in the best interests of the Company and its shareholders.
Transitional Restricted Stock Awards
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Executive Compensation
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards1 ($) | Option Awards2 ($) | Non-Equity Incentive Plan Compensation3($) | All Other Compensation4 ($) | | Total ($) | | Steven A. Michaels Chief Executive Officer | 2024 | 1,000,000 | — | 10,044,764 | — | 2,256,000 | 27,600 | 6 | 13,328,364 | | | 2023 | 975,000 | — | 4,675,007 | 1,250,010 | 2,251,895 | 40,319 | | 9,192,231 | | | 2022 | 950,000 | — | 1,150,012 | 1,150,507 | 266,000 | 12,200 | | 3,528,719 | | Brian J. Garner Chief Financial Officer | 2024 | 550,000 | — | 2,895,979 | — | 909,920 | 13,800 | 7 | 4,369,699 | | | 2023 | 550,000 | — | 1,285,625 | 343,748 | 902,793 | 15,732 | | 3,097,898 | | | 2022 | 500,000 | — | 262,527 | 262,634 | 100,000 | 13,584 | | 1,138,745 | | Todd King5 Chief Legal and Compliance Officer | 2024 | 450,000 | — | 1,093,613 | — | 507,600 | 13,800 | 7 | 2,065,013 | | | 2023 | 366,875 | — | 547,579 | — | 391,093 | 137,711 | | 1,443,258 |
2024 Equity Award Agreements
| | Summary Compensation Table Total for CEO | | Compensation Actually Paid to CEO3 | | | Average Compensation Actually Paid for other NEOs3, 4 ($) | Value of Initial Fixed $100 Investment Based on: | | | | | Year | CEO1 ($) | CEO Prior to the Spin-Off2 ($) | CEO1 ($) | CEO Prior to the Spin-Off2 ($) | Average Summary Compensation Table Total for other NEOs4 ($) | | TSR5 ($) | Peer Group TSR5 ($) | Net Income6 (in thousands) ($) | Adjusted EBITDA7 (in thousands) ($) | | 2024 | 13,328,364 | N/A | 20,591,232 | N/A | 3,217,356 | 4,617,452 | 86.73 | 260.04 | 197,249 | 274,029 | | 2023 | 9,192,231 | N/A | 12,618,615 | N/A | 1,837,817 | 2,503,033 | 62.66 | 191.10 | 138,838 | 297,421 | | 2022 | 3,528,719 | N/A | (1,221,268) | N/A | 1,257,055 | (209,876) | 34.24 | 118.60 | 98,709 | 256,169 | | 2021 | 7,458,031 | N/A | 6,469,146 | N/A | 2,245,127 | 1,814,939 | 91.45 | 183.48 | 243,557 | 390,705 | | 2020 | 3,725,993 | 7,504,429 | 4,834,262 | 9,061,514 | 2,209,483 | 2,114,172 | 109.20 | 145.15 | (61,465) | 354,937 |
Relationship between Compensation Actually Paid and Financial Performance Measures
Relationship between Compensation Actually Paid and Financial Performance Measures The graphs below set forth information regarding the relationship between CAP for our NEOs and the Company’s TSR, Net Income and Adjusted EBITDA. See Appendix A for the reconciliation of Adjusted EBITDA used in our compensation plan to Adjusted EBITDA reported in our earnings press releases, and to Net Earnings, the most directly comparable GAAP financial measure.
Relationship between Compensation Actually Paid and Financial Performance Measures
| 60 | PROG Holdings, Inc. 2025 Proxy Statement |
Relationship between Compensation Actually Paid and Financial Performance Measures
| 1The Net Loss shown in the graph above for 2020 includes $295.1 million of Loss from Discontinued Operations, net of income tax, which reflects the operating results of the Aaron's Business segment that was spun-off from the Company on November 30, 2020. Net Earnings from Continuing Operations for 2020 was $233.6 million. |
Relationship between Compensation Actually Paid and Financial Performance Measures
| PROG Holdings, Inc. 2025 Proxy Statement | 61 |