UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.    )
Filed by the Registrant  x                            Filed by a Party other than the Registrant  o
Check the appropriate box:
 
o Preliminary Proxy Statement
   
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
   
x Definitive Proxy Statement
   
o Definitive Additional Materials
   
o Soliciting Material under Rule 14a-12
 
INSPERITY, INC.
(Name of registrant as specified in its charter)
 
(Name of person(s) filing proxy statement, if other than the registrant)
 
Payment of Filing Fee (Check the appropriate box):
  
x No fee required.
   
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
  (1) Title of each class of securities to which transaction applies:
  (2) Aggregate number of securities to which transaction applies:
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
  (4) Proposed maximum aggregate value of transaction:
  (5) Total fee paid:
     
o Fee paid previously with preliminary materials.
   
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1) Amount Previously Paid:
  (2) Form, Schedule or Registration Statement No.:
  (3) Filing Party:
  (4) Date Filed:
 







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Paul J. Sarvadi
Chairman of the Board
and Chief Executive Officer

April 11, 2014May 27, 2016
Dear Stockholder:
On behalf of your Board of Directors and management, you are cordially invited to attend the Annual Meeting of Stockholders to be held at Insperity’s Corporate Headquarters, Centre I in the Auditorium, located at 22900 Hwy. 59 N. (Eastex Freeway),19001 Crescent Springs Drive, Kingwood, Texas 77339, on May 13, 2014June 30, 2016, at 3:10:00 p.m. Centrala.m. Houston, Texas time.
It is important that your shares are represented at the meeting. Whether or not you plan to attend the meeting, please complete and return the enclosed proxy card in the accompanying envelope or vote using the telephone or Internet procedures that may be provided to you. Please note that voting using any of these methods to vote will not prevent you from attending the meeting and voting in person.
You will find information regarding the matters to be voted on at the meeting in the following pages. Our annual report on Form 10-K for the year endingended December 31, 20132015 is also enclosed with these materials.
Your interest in Insperity is appreciated, and we look forward to seeing you on May 13th.at the meeting.
Sincerely,
/s/ Paul J. Sarvadi
Paul J. Sarvadi
Chairman of the Board and Chief Executive Officer






Table of Contents
INSPERITY, INC.
A Delaware Corporation
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To beBe Held May 13, 2014June 30, 2016
Kingwood, Texas
The Annual Meeting of Stockholders of Insperity, Inc., a Delaware corporation (the “Company”), will be held at the Company’s Corporate Headquarters in Centre I in the Auditorium, located at 22900 Hwy. 59 N. (Eastex Freeway),19001 Crescent Springs Drive, Kingwood, Texas 77339, on May 13, 2014June 30, 2016, at 3:10:00 p.m. (Central Daylight Time)a.m. (Houston, Texas time), for the following purposes:

1.To elect three Class I directorsnominees to serve until the 2017 Annual MeetingBoard of Stockholders or until their successors have been elected and qualified;Directors;
2.To cast an advisory vote to approve the Company’s executive compensation (“say-on-pay” vote); and
3.
To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2014.
2016.
 
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held onMay 13, 2014 : Materials: A full set of all proxy materials for the Annual Meeting of Stockholders to be held on June 30, 2016 is enclosed with this Notice. Additionally, the Company’s Proxy Statement,proxy statement, most recent annual report on Form 10-K, and other proxy materials are available at www.insperity.com/AnnualMeeting.annualmeeting.
Only stockholders of record at the close of business on March 14, 2014May 9, 2016 are entitled to notice of, and to vote at, the meeting.
 
It is important that your shares be represented at the Annual Meeting of Stockholders regardless of whether you plan to attend. Therefore, please mark, sign, date and return the enclosed proxy. If you are present at the meeting, and wish to do so, you may revoke the proxy and vote in person.




By Order of the Board of Directors
/s/ Daniel D. Herink
Daniel D. Herink
Senior Vice President of Legal,
General Counsel and Secretary
April 11, 2014May 27, 2016
Kingwood, Texas


Table of Contents
TABLE OF CONTENTS
SOLICITATIONSolicitation
1
VOTING INFORMATIONVoting Information
1
SECURITY OWNERSHIPSecurity Ownership
3
PROPOSAL NUMBERProposal Number 1
54
General
4
GENERALAgreements with Starboard
5
NOMINEES — CLASS I DIRECTORSVoting; Approval Requirements
57
DIRECTORS REMAINING IN OFFICENominees for Director
67
CORPORATE GOVERNANCE
8
CORPORATE GOVERNANCE GUIDELINESDirectors Not Currently Subject to Election
8
DETERMINATIONS OF DIRECTOR INDEPENDENCE
8
SELECTION OF NOMINEES FOR THE BOARD OF DIRECTORS
9
BOARD OF DIRECTORS LEADERSHIP
10
BOARD OF DIRECTORS’ ROLE IN RISK OVERSIGHT
10
PROHIBITION ON HEDGING AND PLEDGING OF COMPANY COMMON STOCKSummary of Committee Memberships
11
CODE OF BUSINESS CONDUCT AND ETHICSCorporate Governance
11
STOCKHOLDER COMMUNICATIONS
11
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
11
THE BOARD OF DIRECTORSCorporate Governance Guidelines
11
EXECUTIVE SESSIONS OF THE BOARD OF DIRECTORS AND THE LEAD INDEPENDENT OR PRESIDING DIRECTORDirector Independence
11
Selection of Nominees for the Board of Directors
12
COMMITTEES OF THE BOARD OF DIRECTORS
12
EXECUTIVE COMPENSATIONBoard of Directors Leadership
13
Board of Director’s Role in Risk Oversight
13
COMPENSATION COMMITTEE REPORTProhibition on Hedging and Pledging of Company Common Stock
2314
Code of Business Conduct and Ethics
14
SUMMARY COMPENSATION TABLEStockholder Communications
2414
Meetings and Committees of the Board of Directors
15
GRANTS OF PLAN-BASED AWARDS TABLEThe Board of Directors
2515
Executive Sessions of the Board of Directors and the Lead Independent or Presiding Director
15
NEO’S OUTSTANDING EQUITY AWARDS TABLE AT 2013 FISCAL YEAR ENDCommittees of the Board of Directors
2615
Executive Compensation
16
NEO OPTION EXERCISES AND STOCK VESTED TABLE FOR FISCAL YEAR 2013Compensation Discussion and Analysis
2716
SECURITIES RESERVED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS TABLE
28
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
28
DIRECTOR COMPENSATION
29
DIRECTORS’ COMPENSATION TABLE
30
REPORT OF THE FINANCE, RISK MANAGEMENT AND AUDIT COMMITTEE
30
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
31
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
31
PROPOSAL NUMBER 2
32
PROPOSAL NUMBER 3Compensation Committee Report
34
Compensation Committee Interlocks and Insider Participation
35
ADDITIONAL INFORMATION
36
DELIVERY OF PROXY STATEMENTSummary Compensation Table
36
STOCKHOLDER PROPOSALS FOR 2014 ANNUAL MEETING
36
STOCKHOLDER PROPOSALS FOR 2015 PROXY STATEMENT
36
ADVANCE NOTICE REQUIRED FOR STOCKHOLDER NOMINATIONS AND PROPOSALS
36
FINANCIAL INFORMATIONGrants of Plan-Based Awards Table
37
Outstanding Equity Awards Table at 2015 Fiscal-Year End
38
Option Exercises and Stock Vested Table for Fiscal Year 2015
39
Securities Reserved for Issuance Under Equity Compensation Plans Table
40
Potential Payments Upon Termination or Change in Control
40
Director Compensation
41
Directors’ Compensation Table
42
Report of the Finance, Risk Management and Audit Committee
43
Section 16(a) Beneficial Ownership Reporting Compliance
44
Certain Relationships and Related Transactions
44
Proposal Number 2
45
Proposal Number 3
47
General
47
Fees of Ernst & Young
47
Finance, Risk Management and Audit Committee Pre-Approval Policy for Audit and Non-Audit Services
47
Required Affirmative Vote
48
Additional Information
48
Delivery of Proxy Statement
48
Stockholder Proposals and Director Nominations for 2016 Annual Meeting of Stockholders
48
Stockholder Proposals for 2017 Annual Meeting of Stockholders
48
Stockholder Director Nominations for 2017 Annual Meeting of Stockholders
49
Financial Information
49

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INSPERITY, INC.
A Delaware Corporation
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS OF
INSPERITY, INC.
TO BE HELD ON TUESDAY, MAY 13, 2014THURSDAY, JUNE 30, 2016
Solicitation
The accompanying proxy is solicited by the Board of Directors (“the Board”) of Insperity, Inc., a Delaware corporation (the “Company” or “Insperity”), for use at the 20142016 Annual Meeting of Stockholders to be held on May 13, 2014June 30, 2016, and at any reconvened meeting after an adjournment thereof. The 2016 Annual Meeting of Stockholders will be held at 3:10:00 p.m. (Central Daylight Time)a.m. (Houston, Texas time), at the Company’s Corporate Headquarters, Centre I in the Auditorium located at 22900 Hwy. 59 N. (Eastex Freeway),19001 Crescent Springs Drive, Kingwood, Texas 77339.

Voting Information
You may vote in one of four ways:
 • by attending the meeting and voting in person;   
 • by signing, dating and returning your proxy in the envelope provided;  
 • by submitting your proxy via the Internet at the address listed on your proxy card; or 
 • by submitting your proxy using the toll-free telephone number listed on your proxy card.
For stockholders of record, if your shares are held in an account at a brokerage firm or bank, you may submit your voting instructions by signing and timely returning the enclosed voting instruction form, by Internet at the address shown on your voting instruction form, by telephone using the toll-free number shown on that form, or by providing other proper voting instructions to the registered owner of your shares. If shares are held in street name through a broker and the broker is not given direction on how to vote, the broker will not have discretion to vote such shares on non-routine matters, including the election of directors.
For stockholders of record, if you either return your signed proxy or submit your proxy using the Internet or telephone procedures that may be available to you, your shares will be voted as you direct. If the accompanying proxy is properly executed and returned, but no voting directions are indicated thereon, the shares represented thereby will be voted FOR the election as directors of the nominees listed herein, and FOR proposalsProposals 2 and 3. In addition, the proxy confers discretionary authority to the persons named in the proxy authorizing those persons to vote, in their discretion, on any other matters properly presented at the 2016 Annual Meeting of Stockholders. The Board is not currently aware of any such other matters. Any stockholder of record giving a proxy has the power to revoke it at any time before it is voted by: (i) submitting written notice of revocation to the Secretary of the Company at the address listed above; (ii) submitting another proxy that is properly signed and later dated; (iii) submitting a proxy again on the Internet or by telephone; or (iv) voting in person at the 2016 Annual Meeting.Meeting of Stockholders. Stockholders who hold their shares through a nominee or broker are invited to attend the meeting but must obtain a signed proxy from their nominee or broker in order to vote in person.
The Company pays the expense of preparing, printing and mailing proxy materials to our stockholders. Proxies may be solicited personally orWe have retained Innisfree M&A Incorporated (”Innisfree”), a proxy solicitation firm, to assist us in soliciting proxies for the proposals described in this proxy statement. We will pay Innisfree a fee for such service, which is not expected to exceed $15,000 plus expenses. In addition to solicitation by telephone bymail, certain of our officers or employees of the Company, none(none of whom will receive additional compensation.compensation), and certain officers or employees of Innisfree, may solicit the return of proxies by telephone, email or personal interview. We will also reimburse brokerage houses and other nominees for their reasonable expenses in forwarding proxy materials to beneficial owners of our Common Stock.common stock.
The approximate date on which this proxy statement and the accompanying proxy card will first be sent to stockholders is April 11, 2014.June 2, 2016.


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At the close of business on March 14, 2014,May 9, 2016, the record date for the determination of stockholders of the Company entitled to receive notice of, and to vote at, the 20142016 Annual Meeting of Stockholders or any reconvened meeting after an adjournment thereof, 25,551,243 21,384,413

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shares of the Company’s Common Stock,common stock, par value $0.01 per share (the “Common Stock”), were outstanding. Each share of Common Stock is entitled to one vote upon each of the matters to be voted on at the meeting. The presence, in person or by proxy, of a majority of the outstanding shares of Common Stock is required for a quorum. If a quorum is present at the meeting, under the Company’s Bylaws, action on a matter or to elect director nominees shall be approved if the votes cast in favor of the matter or nominee exceed the votes cast opposing the matter or such nominee, as applicable.

In determining the number of votes cast, shares abstaining from voting or not voted on a matter will not be treated as votes cast. Accordingly, although proxies containing broker non-votes (which result when a broker holding shares for a beneficial owner has not received timely voting instructions on certain matters from such beneficial owner and when the broker does not otherwise have discretionary power to vote on a particular matter) are considered “shares present” in determining whether there is a quorum present at the 2016 Annual Meeting of Stockholders, they are not treated as votes cast with respect to the election of directors, and thus will not affect the outcome of the voting on the election of directors or any of the other proposals on non-routine matters to be voted on at the 2016 Annual Meeting.Meeting of Stockholders. However, a broker holding shares for a beneficial owner will have the discretion to vote such shares for a beneficial owner with respect to routine matters, includingsuch as the ratification of the appointment of the Company’s independent registered public accounting firm.


2
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SECURITY OWNERSHIP
The table below sets forth, as of March 14, 2014May 9, 2016, certain information with respect to the shares of Common Stock beneficially owned by: (i) each person known by the Company to beneficially own 5% or more of the Company’s Common Stock; (ii) each director and director nominee of the Company; (iii) each of the executive officers of the Company identified in the Summary Compensation Table on page 24;Table; and (iv) all directors, director nominees and executive officers of the Company as a group. 
Name of Beneficial Owner 
Amount and
Nature of
Beneficial
Ownership1
 Percent of Class  
Amount and
Nature of
Beneficial
Ownership1
 Percent of Class
Michael W. Brown 32,294
 *
  36,846
 *
 
Jack M. Fields, Jr. 1,249
 *
 
Peter A. Feld 3,338,886
2 
 15.61% 
Eli Jones 30,841
 *
  —
 *
 
Carol R. Kaufman 2,193
 *
  10,627
 *
 
Paul S. Lattanzio 48,089
 *
 
Gregory E. Petsch 14,841
 *
 
Michelle McKenna-Doyle 1,447
 *
 
John M. Morphy —
 *
 
Richard G. Rawson 706,666
2 
 2.77%  625,382
3 
 2.92% 
Paul J. Sarvadi 1,699,759
3 
 6.65%  1,611,797
4 
 7.54% 
Norman R. Sorensen 2,646
 *
 
Austin P. Young 36,490
 *
  31,042
 *
 
A. Steve Arizpe 134,699
4 
 *
  110,408
5 
 *
 
Jay E. Mincks 57,810
 *
  47,508
 *
 
Douglas S. Sharp 42,233
 *
  25,252
 *
 
BlackRock, Inc. 2,027,223
5 
 7.93% 
Columbia Wanger Asset Management 1,564,000
6 
 6.12% 
Stadium Capital Management, LLC 2,315,925
7 
 9.06% 
The Vanguard Group 1,383,140
8 
 5.41% 
Vulcan Value Partners, LLC 1,597,554
9 
 6.25% 
Executive Officers and Directors as a Group (13 Persons) 2,858,998
 11.19% 
Starboard Value LP 3,335,976
6 
 15.60% 
BlackRock Fund Advisors 2,008,678
7 
 9.39% 
The Vanguard Group, Inc. 1,564,844
8 
 7.32% 
Executive Officers and Directors as a Group (14 Persons) 5,874,084
 27.47% 
_________________________
____________________

*    Represents less than 1%.

1
Except as otherwise indicated, each of the stockholders has sole voting and investment power with respect to the securities shown to be owned by such stockholder. The address for each officer and director is in care of Insperity, Inc., 19001 Crescent Springs Drive, Kingwood, Texas 77339-3802.

The number of shares of Common Stock beneficially owned by each person includes options exercisable on March 14, 2014,May 9, 2016, or within 60 days after March 14, 2014,May 9, 2016, and excludes options not exercisable within 60 days after March 14, 2014May 9, 2016 (currently there are no unvested stock options). The number of shares of Common Stock beneficially owned by each person also includes unvested shares of restricted stock as of March 14, 2014.May 9, 2016 and excludes LTIP shares that are not available within 60 days after May 9, 2016. Each owner of restricted stock has the right to vote his or her shares but may not transfer them until they have vested.

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  Options  
Name of Beneficial Owner Exercisable Not Exercisable Unvested Restricted Stock
       
Michael W. Brown 20,513
 —
 —
Jack M. Fields, Jr. —
 —
 —
Eli Jones 14,867
 —
 —
Carol R. Kaufman —
 —
 1,940
Paul S. Lattanzio —
 —
 —
Gregory E. Petsch 5,000
 —
 —
Austin P. Young 7,813
 —
 —
Richard G. Rawson —
 —
 47,500
Paul J. Sarvadi —
 —
 78,401
A. Steve Arizpe 5,000
 —
 47,500
Jay E. Mincks —
 —
 47,500
Douglas S. Sharp —
 —
 27,334
Options
Name of Beneficial OwnerExercisableNot ExercisableUnvested Restricted Stock
Michael W. Brown20,513
—
—
Peter A. Feld—
—
1,447
Eli Jones—
—
—
Carol R. Kaufman—
—
647
Michelle McKenna-Doyle—
—
1,447
John M. Morphy—
—
—
Norman R. Sorensen—
—
1,447
Austin P. Young7,813
—
—
A. Steve Arizpe—
—
25,254
Jay E. Mincks—
—
25,254
Richard G. Rawson—
—
25,254
Paul J. Sarvadi—
—
42,509
Douglas S. Sharp—
—
16,581

2 
Based on a Schedule 13D/A filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. Mr. Feld reported shared voting and dispositive power with respect to 3,335,976 shares and 2,910 shares held directly. See footnote 6 below for further information.

3
Includes 288,676263,676 shares owned by the RDKB Rawson LP, 254,512229,512 shares owned by the R&D Rawson LP, and 350 shares owned by Dawn M. Rawson (spouse). Mr. Rawson shares voting and investment power over all such shares with his wife, except for 350 shares owned by his wife.

34 
Includes 955,206917,396 shares owned by Our Ship Limited Partnership, Ltd., 471,973453,069 shares owned by the Sarvadi Children’s Limited Partnership, 16,651 shares owned by Paul J. Sarvadi and Vicki D. Sarvadi (spouse), JT WROS and 19,644 shares owned by six education trusts established for the benefit of the children of Paul J. Sarvadi. Mr. Sarvadi shares voting and investment power over all such shares with his wife, Vicki D. Sarvadi.spouse. Also includes 290,000220,000 shares pledged to banks as collateral for loans. The Board determined the amount of shares pledged by Mr. Sarvadi was insignificant under the Company’s pledging policy (see page 11 in the Corporate“Corporate Governance Section.— Prohibition on Hedging and Pledging of Company Common Stock”).

45 
Includes 3,139 shares owned by A. Steve Arizpe and Charissa Arizpe (spouse). Mr. Arizpe shares voting and investment power over all such shares with his wife.

56
Based on a Schedule 13D/A filed with the SEC on March 15, 2016, pursuant to which (a) each of Starboard Value LP, Starboard Value GP LLC, Starboard Principal Co LP and Starboard Principal Co GP LLC reported sole voting and dispositive power with respect to 3,335,976 shares; (b) Starboard Value and Opportunity Master Fund Ltd reported sole voting and dispositive power with respect to 1,986,958 shares; (c) Starboard Value and Opportunity S LLC reported sole voting and dispositive power with respect to 444,820 shares; (d) each of Starboard Value and Opportunity C LP, Starboard Value R LP and Starboard Value R GP LLC reported sole voting and dispositive power with respect to 241,324 shares; (e) each of Jeffrey C. Smith and Mark R. Mitchell reported shared voting and dispositive power with respect to 3,335,976 shares and (f) Peter A. Feld reported sole voting and dispositive power with respect to 1,120 shares and shared voting and dispositive power with respect to 3,335,976 shares. The address of the reporting persons is 777 Third Avenue, 18th Floor, New York, NY 10017.

7 
Based on a Schedule 13G/A filed with the Securities and Exchange CommissionSEC on January 29, 2014.26, 2016. BlackRock, Inc. reported sole voting power with respect to 1,944,8641,944,675 shares and sole dispositive power with respect to 2,027,2232,008,678 shares. The address of BlackRock, Inc. is 40 East 52nd Street, New York, NY 10022.
6

Based on a Schedule 13G/A filed with the Securities and Exchange Commission on February 6, 2014. Columbia Wanger Asset Management, LLC reported sole voting power with respect to 1,416,000 shares and sole dispositive power with respect to 1,564,000 shares and Columbia Acorn Fund reported sole voting and dispositive power with respect to 1,400,000 shares. The address of Columbia Wanger Asset Management, LLC and Columbia Acorn Fund is 227 West Monroe Street, Suite 3000, Chicago, IL 60606.
7
Based on a Schedule 13D filed with the Securities and Exchange Commission on March 27, 2014. Stadium Capital Management, LLC reported shared voting and dispositive power with respect to 2,315,925 shares with Stadium Capital Management GP, L.P., Alexander M. Seaver and Bradley R. Kent, shared voting and dispositive power with respect to 2,144,917 shares with Stadium Capital Partners, L.P., and shared voting and dispositive power with respect to 171,008 shares with Stadium Capital Qualified Partners, L.P. The address of Stadium Capital Management, LLC is 199 Elm Street, New Canaan, CT 06840.
8 
Based on a Schedule 13G/A filed with the Securities and Exchange CommissionSEC on February 11,2014.10, 2016. The Vanguard Group reported sole voting power with respect to 34,26643,000 shares; sole dispositive power with respect to 1,350,074 shares;1,522,844 shares and shared dispositive power with respect to 33,06642,000 shares with Vanguard Fiduciary Trust Company. The address of the Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
9
Based on a Schedule 13G filed with the Securities and Exchange Commission on February 10, 2014. Vulcan Value Partners, LLC reported sole voting power with respect to 1,493,625 shares and sole dispositive power with respect to 1,597,554 shares. The address of Vulcan Value Partners, LLC is 3500 Blue Lake Drive, Suite 400, Birmingham, AL 35243.


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PROPOSAL NUMBER 11:
ELECTION OF DIRECTORS
General
The Company’s Certificate of Incorporation and Bylaws provide that the number of directors on the Board of Directors (the “Board”) shall be fixed from time to time by the Board but shall not be less than three nor more than 15 persons. The number of members constituting the Board is currently fixed at nine.ten.
In accordance with the Certificate of Incorporation of the Company, the members of the Board are divided into three classes and are elected for a term of office expiring at the third succeeding annual stockholders’ meeting following their election to office, or until a successor is duly elected and qualified.classes. The Certificate of Incorporation also provides that such classes shall be as nearly equal in number as possible. The terms of office of the Class I, Class II and Class III directors expire at the Annual Meeting of Stockholders in 2014, 20152017, 2018 and 2016, respectively.
The term of office of each of Michael Brown, Eli Jones, John Morphy and Richard Rawson, who comprise the current Class IIII directors, expires at

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the time of the 20142016 Annual Meeting of Stockholders, or as soon thereafter as their successors are elected and qualified. Mr. Brown,As previously announced, Dr. Jones has decided not to stand for re-election to the Board and Mr. Petschto retire from the Board at the 2016 Annual Meeting of Stockholders. Messrs. Brown, Morphy and Rawson have been nominated for re-election to serve additional three-year termsthe Board as Class I directors.described below. All nominees have consented to be named in this proxy statement and to serve as a director if elected.
It is
Agreements with Starboard
2015 Agreement
On March 21, 2015, the intentionCompany entered into an Agreement (the “2015 Agreement”) with Starboard Value LP and certain of its affiliates named therein (collectively, “Starboard”). Pursuant to the 2015 Agreement, the Company appointed (a) Peter A. Feld and Michelle McKenna-Doyle as Class I directors; and (b) Norman R. Sorensen as a Class II director. In addition, pursuant to the 2015 Agreement, the Company nominated for election at the 2015 Annual Meeting of Stockholders (a) Carol Kaufman, Paul Sarvadi and Norman R. Sorensen for election to the Board as Class II directors with terms expiring at the 2018 Annual Meeting of Stockholders; and (b) Austin Young as a Class I director with a term expiring at the 2017 Annual Meeting of Stockholders. In addition, Starboard agreed to vote its shares of the person or persons named in the accompanying proxy card to voteCompany’s Common Stock for the election of each of Ms. Kaufman and Messrs. Sarvadi, Sorensen and Young at the 2015 Annual Meeting of Stockholders. Substantially concurrently with the adjournment of the 2015 Annual Meeting of Stockholders, Dr. Jones and Mr. Brown resigned as Class I directors with terms expiring at the 2017 Annual Meeting of Stockholders and were immediately reappointed by the Board as Class III directors with terms expiring at the 2016 Annual Meeting of Stockholders.
2016 Agreement
On May 18, 2016, the Company entered into an Agreement (the “2016 Agreement”) with Starboard, which supersedes and replaces the 2015 Agreement. The following is a summary of the material terms of the 2016 Agreement. The following summary does not purport to be complete and is qualified in its entirety by reference to the 2016 Agreement, a copy of which is attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2016 and is incorporated herein by reference.
Pursuant to the 2016 Agreement, immediately following the execution of the 2016 Agreement, the Company (i) appointed John Morphy as a Class III director with a term expiring at the 2016 Annual Meeting of Stockholders and (ii) set the size of the Board at ten directors.

The Company agreed that, promptly following the execution of the 2016 Agreement, the Nominating and Corporate Governance Committee will take all necessary actions to (i) commence a search for one new independent director (the “New Independent Director”) and (ii) retain a nationally-recognized director search firm to assist with such search. The New Independent Director shall (a) meet the independence requirements of the New York Stock Exchange (“NYSE”), (b) meet the requirements of the Company’s guidelines and policies with respect to service on the Board, (c) be independent of Starboard and (d) other than with respect to the Company, have not been nominated by Starboard to serve on any other board of directors and not serve on another board of directors with any other director of the Company. Subject to the selection procedures described in the 2016 Agreement, the Company will appoint the New Independent Director as a Class II director with a term expiring at the 2018 Annual Meeting of Stockholders. After the appointment of the New Independent Director and during the Standstill Period (as defined below), the Company agreed not to (x) increase the size of the Board to more than ten directors or (y) seek to change the classes on which the Board members serve, in each case without the prior consent of Starboard.

Starboard agreed, on behalf of itself and its affiliates, to irrevocably withdraw, concurrently with the execution of the 2016 Agreement, its notice of stockholder nomination of individuals for election as directors at the 2016 Annual Meeting of Stockholders previously submitted to the Company.

The Company also agreed that the Board shall take all action necessary to nominate Michael W. Brown, Richard G. Rawson and John Morphy for re-election to the Board at the 2016 Annual Meeting of Stockholders as Class III directors. In addition, Carol R. Kaufman executed and delivered to the Company an irrevocable letter pursuant to which she agreed to reduce her term of service as a director on the Board, to end at the conclusion of the 2017 Annual Meeting of Stockholders; provided that such reduction shall be revocable by Ms. Kaufman if, at any time prior to the conclusion of the 2017 Annual Meeting of Stockholders, either (i) Starboard’s aggregate beneficial ownership of Common Stock decreases to less than the Minimum Ownership Threshold (as defined below) or (ii) the Board resolves that such reduction may be revoked.

The 2016 Agreement further provides that Starboard will vote all shares of Common Stock beneficially owned by Starboard as of May 9, 2016, the record date for the 2016 Annual Meeting of Stockholders, (i) for the election of each of the nominees for director at the 2016 Annual Meeting of Stockholders and (ii) in favor of Proposal 2 and Proposal 3.


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Starboard agreed that it will not nominate or recommend for nomination any person for election at the 2016 Annual Meeting of Stockholders, submit proposals for consideration or otherwise bring any business before the 2016 Annual Meeting of Stockholders, nor will it engage in certain activities related to “withhold” or similar campaigns with respect to the 2016 Annual Meeting of Stockholders.

Under the terms of the 2016 Agreement, until the earlier of (i) 15 business days prior to the deadline for the submission of stockholder nominations for the 2017 Annual Meeting of Stockholders pursuant to the Bylaws of the Company and (ii) the date that is 100 days prior to the first anniversary of the 2016 Annual Meeting of Stockholders (the “Standstill Period”), Starboard agreed to not to, among other things, solicit proxies regarding any matter to come before any annual or special meeting of stockholders, including for the election of directors, or enter into a voting agreement or any group with shareholders other than Starboard affiliates and current group members. In addition, among other standstill provisions, Starboard agreed that, during the Standstill Period, it (i) will not make any offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving Starboard and the Company, (ii) unless authorized by the Board, will not affirmatively solicit any third party, on an unsolicited basis, in making, any offer or proposal with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving the Company or encourage, initiate or support any third party in making such an offer or proposal, (iii) will not publicly comment on any third party proposal regarding any merger, acquisition, recapitalization, restructuring, disposition, or other business combination with respect to the Company by such third party prior to such proposal becoming public and (iv) will not seek, or encourage any person, to submit nominees in furtherance of a contested solicitation for the election or removal of directors.

If Peter A. Feld or Michelle McKenna-Doyle (or any replacement director therefor) is unable or unwilling to serve, resigns or is removed as a director prior to the 2017 Annual Meeting of Stockholders or if Norman R. Sorensen (or any replacement director therefor) is unable or unwilling to serve, resigns or is removed as a director prior to the 2018 Annual Meeting of Stockholders, and at such time Starboard beneficially owns in the aggregate at least the lesser of (i) 3.0% of the Company’s then outstanding shares of Common Stock and (ii) 641,581 shares of Common Stock (the “Minimum Ownership Threshold”), Starboard has the ability to recommend a replacement director in accordance with the terms of the 2016 Agreement.

If Mr. Morphy (or any replacement director therefor) is unable or unwilling to serve, resigns or is removed as a director prior to the 2019 Annual Meeting of Stockholders or if the New Independent Director (or any replacement director therefor) is unable or unwilling to serve, resigns or is removed as a director prior to the 2018 Annual Meeting of Stockholders, and at such time Starboard beneficially owns in the aggregate at least the Minimum Ownership Threshold, a substitute director shall be appointed in accordance with the terms of the 2016 Agreement.

Pursuant to the 2015 Agreement, Mr. Feld previously executed and delivered to the Company an irrevocable resignation letter pursuant to which he shall resign from the Board if, at any time, Starboard’s aggregate beneficial ownership of Common Stock decreases to less than the Minimum Ownership Threshold. Pursuant to the 2016 Agreement, such resignation letter will continue in full force in all respects. Additionally, Starboard agreed to obtain a similar irrevocable resignation letter from any replacement director for Mr. Feld who is an employee of Starboard or otherwise not independent of Starboard.

The Company also agreed to reimburse Starboard for its reasonable, documented out-of-pocket fees and expenses, including legal expenses, in connection with matters related to the 2016 Annual Meeting of Stockholders and the negotiation and execution of the 2016 Agreement, up to a maximum of $100,000.

Each of the parties to the 2016 Agreement also agreed to mutual non-disparagement obligations. In addition, the parties agreed that the confidentiality agreement entered into by Mr. Feld, Starboard and the Company pursuant to the 2015 Agreement will continue in full force in all respects.

Under the terms of the 2016 Agreement, the Board agreed to take all actions necessary to ensure that during the Standstill Period, each committee of the Board includes at least one of Mr. Morphy, Ms. McKenna-Doyle, Mr. Sorensen and Mr. Feld (or a replacement director therefor). In connection with his appointment to the Board, the Board determined that Mr. Morphy qualified as an independent director under the listing standards of the NYSE and applicable SEC rules. Additionally, in connection with the 2016 Agreement, the Board approved certain changes to the composition of the committees of the Board, including (i) effective as of the conclusion of the 2016 Annual Meeting of Stockholders, the appointment of Mr. Morphy to the Finance, Risk Management and Audit Committee of the Board, (ii) effective as of the conclusion of the 2016 Annual Meeting of Stockholders, the appointment of Ms. McKenna-Doyle to, and Mr. Brown as chairperson of, the Compensation Committee of the Board, and (iii) effective upon the execution of the 2016 Agreement, the appointment of Ms. McKenna-Doyle to and as chairperson of the Nominating and Corporate Governance Committee of the Board. See “—Summary of Committee Memberships” for a further description of the composition of these committees as a result of the 2016 Agreement.


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As of the date of the appointment, Mr. Morphy has not entered into or proposed to enter into any transactions required to be reported under Item 404(a) of Regulation S-K. Mr. Morphy will be entitled to receive the Initial Director Award (as defined in the Company’s Directors Compensation Plan) effective as of the date of the 2016 Annual Meeting of Stockholders and to receive retainer fees from the date of the 2016 Agreement as contemplated by the Company’s Director Compensation Plan. Mr. Morphy will not be entitled to an Annual Director Award (as defined in the Company’s Director Compensation Plan) on the date of the 2016 Annual Meeting of Stockholders.

Voting; Approval Requirements
All proxies will be voted in favor of the nominees named below unless a stockholder has voted against such nominee.indicated otherwise. The affirmative vote of a majority of the votes cast by holders of the Common Stock present in person or by proxy at the 20142016 Annual Meeting of Stockholders is required for election of the nominees. Abstentions and broker non-votes will be deemed votes not cast. Under our Bylaws and in accordance with Delaware law, a director’s term extends until his or her successor is duly elected and qualified, or until he or she resigns or is removed from office. Thus, an incumbent director who fails to receive the required vote for re-election at our annual meetingAnnual Meeting of stockholdersStockholders would continue serving as a director (sometimes referred to as a “holdover director”), generally until the next annual meetingAnnual Meeting of stockholders.Stockholders. However, as a condition to being nominated to continue to serve as a director, the incumbent director nominees have submitted an irrevocable letter of resignation that is effective upon and only in the event that (i) such nominee fails to receive the required vote; and (ii) the Board accepts such resignation. In such an event, the Nominating and Corporate Governance Committee is required to make a recommendation to the Board as to whether the Board should accept the resignation, and the Board is required to decide whether to accept the resignation and to disclose its decision-making process within 90 days from the certification of the election results. In addition, if Mr. Feld, Ms. McKenna-Doyle, or Mr. Sorensen is not re-elected, then, pursuant to the 2016 Agreement, Starboard may have the right to nominate a replacement director as described above.
If, at the time of or prior to the 20142016 Annual Meeting of Stockholders, any of the nominees should be unable or decline to serve, the discretionary authority provided in the proxy may be used to vote for a substitute or substitutes designated by the Board. The Board has no reason to believe that any substitute nominee or nominees will be required. No proxy will be voted for a greater number of persons than the number of nominees named herein.
Nominees —for Director

The following individuals have been nominated for re-election to the Board as Class I Directors (For Terms ExpiringIII directors with terms expiring at the 20172019 Annual Meeting)Meeting of Stockholders:

Michael W. Brown.  Mr. Brown, age 68,70, joined the Company as a Class I director in November 1997. He is a member of the Company’s Finance, Risk Management and Audit Committee and the Nominating and Corporate Governance Committee. Mr. Brown is the past chairman of the NASDAQ Stock Market Board of Directors and a past governor of the National Association of Securities Dealers. Mr. Brown joined Microsoft Corporation in 1989 as its treasurer and became its chief financial officer in 1993, in which capacity he served until his retirement in July 1997. Prior to joining Microsoft, Mr. Brown spent 18 years with Deloitte & Touche LLP. Mr. Brown is also a director of EMC Corporation (NYSE: EMC), Stifel Financial Corporation (NYSE: SF) and VMware, Inc. and(NYSE: VMW). He serves on the audit and finance committees of EMC CorporationCorporation; audit and compensation committees of VMware, Inc.; and risk management/corporate governance committee of Stifel Financial Corporation. Mr. Brown also serves or has served as a director, trustee or advisor of several private businesses, civic orand charitable organizations. Mr. Brown holds a Bachelor of Science degree in Economics from the University of Washington in Seattle.
Mr. Brown brings to the Board substantial financial expertise that includes an extensive knowledge of the complex financial and operational issues affecting large companies, and a deep understanding of accounting principles and financial reporting rules and regulations. His prior experience in public accounting and as a chief financial officer of a global technology company brings an important perspective to the Board. Mr. Brown also serves on the boards, as well as the audit committees and auditcompensation committees, of multiple publicly traded companies in both the technology and financial services sectors, which provides us with valuable insight on technological and strategic issues affecting the Company. Mr. Brown’s prior service as chairman of the NASDAQNasdaq Stock Market Board of Directors and as a past governor of the National Association of Securities Dealers provides experience with issues affecting a publicly traded company as well as demonstrating Mr. Brown’s leadership and business acumen.

John M. Morphy.  Mr. Morphy, age 68, joined the Company as a Class III director in May 2016 pursuant to the 2016 Agreement. Mr. Morphy previously served as Senior Vice President, Chief Financial Officer, Secretary and Treasurer of Paychex, Inc. (NASDAQ:PAYX), a leading provider of payroll, human resource, and benefits outsourcing solutions for small to medium-sized businesses ("Paychex"), from October 1996 until June 2011, at which time he was appointed vice president of finance at Paychex until he retired in January 2012. As chief financial officer of Paychex, Mr. Morphy reported directly to the chief executive officer and was responsible for all finance, legal, shareholder relations, purchasing, real estate and travel functions. Prior to joining Paychex in 1995, he served as the chief financial officer of Goulds Pumps, Inc. ("Goulds"), a then publicly traded global manufacturer of pumps for industrial, commercial

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and water supply markets, from 1985 to 1993, and as group Vice President over industrial products at Goulds through 1995. From 1976 to 1985, Mr. Morphy was vice president and controller for Computer Consoles, Inc., and before that he was an accountant at Arthur Andersen & Company, an accounting firm. Mr. Morphy also previously served as a director of Inforte Corp., a then publicly traded customer and demand management consultancy, from April 2003 to August 2004. He earned his Bachelor of Science in Accounting from LeMoyne College and his Certified Public Accountant certificate in 1973.

Mr. Morphy's more than 20 years of financial leadership experience for various public corporations and experience in many facets of finance within varied environments, including rapid growth companies, global Fortune 500 industrial companies and major accounting firms, would make him a valuable member of the Board.

Richard G. Rawson.  Mr. Rawson, age 67, President of the Company and the majority of its subsidiaries, has been a director of the Company since 1989. He has been President of the Company since August 2003. Before being elected president, he served as executive vice president of administration, chief financial officer and treasurer of the Company from February 1997 until August 2003. Prior to that, he served as senior vice president, chief financial officer and treasurer of the Company since 1989. Prior to joining the Company in 1989, Mr. Rawson served as a senior financial officer and controller for several companies in the manufacturing and seismic data processing industries. He has served NAPEO as president, first vice president, second vice president and treasurer, as well as chairman of the Accounting Practices Committee. Mr. Rawson has a Bachelor of Business Administration degree in Finance from the University of Houston and currently serves as a member of the board for the C.T. Bauer College of Business.

Mr. Rawson brings financial and operational experience to the Board. His lengthy service as president of the Company, as well as his prior service as chief financial officer and treasurer of the Company, provide in-depth knowledge and insight of Company operations and financial matters to the Board. 

The Board recommends that stockholders vote “For” all of the nominees listed above, and proxies executed and returned will be so voted unless contrary instructions are indicated thereon.
Directors Not Currently Subject to Election

The following directors are not subject to election at the 2016 Annual Meeting of Stockholders:

Class III Director

Eli Jones.  Dr. Jones, age 52,54, joined the Company as a Class I director in April 2004. He is chairmanDr. Jones has announced that he will not stand for re-election to the Board and will retire from the Board when his term expires at the 2016 Annual Meeting of Stockholders. Since July 2015, Dr. Jones has served as the Dean of the Company’s Compensation Committee and a member of the Nominating and Corporate Governance Committee. Dr. Jones isMays Business School at Texas A&M University. Prior to his current position, from 2012, he was the Dean of the Sam M. Walton College of Business at the University of Arkansas and holder of the Sam M. Walton Leadership Chair in Business. Prior to joining the faculty at the University of Arkansas, he was Dean of the E. J. Ourso College of Business and Ourso Distinguished Professor of Business at Louisiana State University (“LSU”) from 2008 to 2012; Professor of Marketing and Associate Dean at the C.T. Bauer College of Business at the University of Houston from 2007 to 2008; an Associate Professor of Marketing from 2002 to 2007; and an assistant professor from 1997 until 2002. He taught at Texas A&M University for several years before joining the faculty of the University of Houston. Dr. Jones served as the executive director of the Program for Excellence in Selling and the founding director of the Sales Excellence Institute at the University of Houston from 1997 to 2007. Before becoming a professor, he worked in sales and sales management for three Fortune 100 companies: Quaker Oats, Nabisco and Frito-Lay. Dr. Jones is also a director at Arvest Bank. He received his Bachelor of Science degree in Journalism in 1982, his MBA in 1986, and his Ph.D. in 1997, all from Texas A&M University.
Dr. Jones brings to the Board significant experience and cutting-edge knowledge and expertise. He is considered a “sales scientist” in that he conducts and publishes cutting-edge research in sales, sales management, marketing strategy, leadership and customer relationship management based on data from organizations world-wide, which are areas critical to the Company. Dr. Jones is able to draw upon his research to provide the Board knowledge with respect to the Insperity sales force. Dr. Jones’ prior service as Dean of the E. J. Ourso College of Business and Ourso Distinguished Professor of Business at LSU and his current position as Dean of the Sam M. Walton College of Business at the University of Arkansas and holder of the Sam M. Walton Leadership Chair in Business, as well as his new role as Dean of the Mays Business School at Texas A&M University, demonstrate his leadership and broad-based business acumen.

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Class I Directors
Gregory E. PetschPeter A. Feld.. Mr. Petsch,Feld, age 63,37, joined the Company as a Class I director in March 2015 following his nomination by Starboard pursuant to the 2015 Agreement. Mr. Feld is a Managing Member and Head of Research of Starboard Value LP, a New York-based investment adviser with a focused and fundamental approach to investing in publicly traded U.S. companies, a position he has held since April 2011. From November 2008 to April 2011, Mr. Feld served as a Managing Director of Ramius LLC and a Portfolio Manager of Ramius Value and Opportunity Master Fund Ltd. From February 2007 to November 2008, Mr. Feld served as a Director at Ramius LLC. Since January 2016, he has served as a member of the board of directors of The Brink’s Company, a global leader in security-related services. Mr. Feld previously served as a member of the boards of directors of Darden Restaurants, Inc. (NYSE: DRI), a full service restaurant company from October 2002.2014 to September 2015; Tessera Technologies, Inc. (Nasdaq: TSRA), which develops, invests in, licenses and delivers innovative miniaturization technologies and products for next-generation electronic devices, from June 2013 to April 2014; Integrated Device Technology, Inc. (Nasdaq: IDTI), a company which designs, develops, manufactures and markets a range of semiconductor solutions for the advanced communications, computing and consumer industries, from June 2012 to February 2014; Unwired Planet, Inc. (Nasdaq: UPIP) f/k/a Openwave Systems, Inc., a company with a portfolio of patents many of which are considered foundational to mobile communications, and span smart devices, cloud technologies and unified messaging, from July 2011 to March 2014 and as chairman from September 2011 to July 2013; and SeaChange International, Inc. (Nasdaq: SEAC), a leading global multi-screen video software company, from December 2010 to January 2013. Mr. Feld has also served as a member of the audit, compensation and nominating and corporate governance committees of several of the boards of directors on which he has served. Mr. Feld received a BA in economics from Tufts University.
Mr. Feld’s extensive knowledge of the capital markets and corporate governance practices as a result of his investment and private equity background makes him a valuable asset to the Board.
Michelle McKenna-Doyle. Ms. McKenna-Doyle, age 51, joined the Company as a director in April 2015 following her nomination by Starboard pursuant to the 2015 Agreement. Since October 2012, Ms. McKenna-Doyle has served as the Senior Vice President (“SVP”) and Chief Information Officer (“CIO”) of the NFL, a professional American football league. Prior to joining the NFL, from May 2011 to October 2012, she served as CIO at Constellation Energy Group, Inc., an energy supplier, where she implemented major technology strategic initiatives and led the company’s integration with Exelon in connection with the merger of the two companies. Ms. McKenna-Doyle served as the President of Vision Interactive Media Group, a global digital interactive media solutions nonprofit company, from September 2010 to June 2011. From May 2007 to May 2010, she served as SVP and CIO at Universal Orlando Resort, a theme park resort owned by NBCUniversal, and from April 2006 to May 2007 she served as CIO of Centex Destination Properties, a division of Centex Corporation, a home builder. She previously spent more than 13 years at the Walt Disney World Company, an American diversified multinational mass media corporation, where she held senior leadership positions in finance, marketing and information technology. In March 2015, Ms. McKenna-Doyle was appointed to the board of directors of RingCentral, Inc. (NYSE: RNG), where she serves on the audit and compensation committees. Ms. McKenna-Doyle received a Bachelor of Science degree in Accounting from Auburn University and an MBA from the Crummer Graduate School of Business, Rollins College. She was formerly licensed as a certified public accountant in the State of Georgia. She has extensive experience in the media and entertainment industry.

Ms. McKenna-Doyle brings to the Board extensive experience with technology management and senior leadership, including at service-related businesses, as well as financial and accounting acumen. Her background with information technology and data security further provides the Board with a key perspective on such matters that are increasingly important to the Company.

Austin P. Young.  Mr. Young, age 75, joined the Company as a director in January 2003. He is chairmanthe Company’s Lead Independent Director, chair of the Company’s Finance, Risk Management and Audit Committee and a member of the Company’s Nominating and Corporate Governance Committee andCommittee. He was also a member of the CompensationCompany’s Independent Advisory Committee. Mr. Petsch retired from Compaq Computer Corporation in 1999 where he had held various positions since 1983, most recentlyYoung served as senior vice president, chief financial officer and treasurer of CellStar Corporation from 1999 to December 2001, when he retired. From 1996 to 1999, he served as executive vice president - finance and administration of Metamor Worldwide, ManufacturingInc. Mr. Young also held the position of senior vice president and Quality beginningchief financial officer of American General Corporation for over eight years and was a partner in 1991. Prior tothe Houston and New York offices of KPMG before joining Compaq, he worked for 10 years for Texas Instruments.American General. Mr. Petsch serves orYoung has served as a director trustee or advisor of several private business, civic or charitable organizations. In 1992, Mr. Petsch was voted Manufacturing ExecutiveAmerisafe, Inc. (Nasdaq: AMSF) since November 2005, where he is also chairman of the Year by Upside Magazine, and from 1993 to 1995, he was nominated Who’s Who of Global Business Leaders.audit committee. He is founder and president of Petsch Foundation, Inc. He earned a Bachelor of Business Technology degree from the University of Houston in 1978.
Mr. Petsch brings to the Board extensive operational expertise and business experience. His prior experienceserved as a senior vice presidentdirector and chairman of Worldwide Manufacturingthe audit committees of Tower Group International, Ltd. (former Nasdaq-listed company) and Quality, as well as his other positions with Compaq and Texas Instruments, provides the Board with additional insight into technology and business issues affecting the Company.
The Board recommends that stockholders vote “For” all of the nominees listed above, and proxies executed and returned will be so voted unless contrary instructions are indicated thereon.

Directors Remaining in Office
Jack M. Fields, Jr.  Mr. Fields, age 62, joined the Company as a Class III director in January 1997 following his retirementits predecessor company from the United States House of Representatives, where he served for 16 years. Mr. Fields2004 until September 2014. He is a member of the Company’s Compensation CommitteeHouston and State Chapters of the Texas Society of CPAs, the American Institute of CPAs, and the Nominating and Corporate Governance Committee. During 1995 and 1996, Mr. Fields served as chairmanFinancial Executives International. He holds an accounting degree from The University of the House Telecommunications and Finance Subcommittee, which has jurisdiction and oversight over the Federal Communications Commission and the Securities and Exchange Commission (the “SEC”). Mr. Fields has been chief executive officer of the Twenty-First Century Group in Washington, D.C. since January 1997. He serves on the Board of Directors for Invesco Mutual Funds (formerly AIM Mutual Funds), and also serves or has served as a director, trustee or advisor of several private business, civic or charitable organizations. Mr. Fields earned a Bachelor of Arts degree in 1974 from Baylor University and graduated from Baylor Law School in 1977.Texas.

Mr. FieldsYoung brings extensive governmental affairsfinancial and regulatoryaccounting experience and expertise to the Board. His prior experience as a partner in the United States Housean international accounting firm, as a senior financial officer of Representatives, including his role as chairman of the committee that had oversight over the SEC,large companies, and his service as chief executive officeron the audit committees of publicly traded companies provide Mr. Young with a Washington, D.C. based political consulting firm bring important governmental affairsthorough understanding of generally accepted accounting principles and regulatory perspectives to the Board.financial statements. Additionally, Mr. Fields’Young’s prior experience provides a solid background for him to advise and accomplishments demonstrate his leadership,consult with the Board on financial and audit-related matters as chairperson of the Finance, Risk Management and Audit Committee, and to serve as the designated audit committee financial

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expert of the Finance, Risk Management and Audit Committee. Mr. Young’s service on other boards and his service as a directorextensive knowledge of the Invesco Mutual Funds providesCompany and its business provide us with additional valuable perspective on issues affecting the Company.
Class II Directors

Carol R. Kaufman. Ms. Kaufman, age 64,66, joined the Company as a Class II director in November 2013. She is a member of the Company’s Finance, Risk Management and Audit Committee and the Nominating and Corporate Governance Committee. Ms. Kaufman is the executive vice president, secretary, chief administrative officer and chief governance officer of The Cooper Companies, Inc., a global medical device company, where she has served since October 1995, including as vice president of legal affairs beginning in March 1996, senior vice president beginning in October 2004 and her current position beginning in July 2011. From January 1989

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through September 1995, she served as vice president, secretary and chief administrative officer of Cooper Development Company, a former affiliate of The Cooper Companies, Inc. Beginning in 1971, Ms. Kaufman held several financial positions, including deputy corporate controller, with Cooper Laboratories, Inc., the former parent of The Cooper Companies, Inc. Ms. Kaufman is alsoserved as a director of Chindex, Inc. and serves(former Nasdaq-listed company) from November 2000 until September 2014, serving on its audit and compensation committees and is theas chair of its governance and nominating committee. Ms. Kaufman earned a Bachelor of Science degree in Mathematics in 1971 from Boston University.

Ms. Kaufman brings extensive financial, accounting and business experience, including in corporate governance, to the Board. Her varied roles within The Cooper Companies, Inc. provide the Board with additional expertise on accounting and controls, and on evaluating and executing strategic initiatives.
Paul S. Lattanzio.  Mr. Lattanzio, age 50, has been a Class III director of the Company since 1995. He is a member of the Company’s Finance, Risk Management and Audit Committee and the Nominating and Corporate Governance Committee. Mr. Lattanzio has been president of Star Avenue Capital, LLC since May 2010. Prior to that, he most recently served as a senior managing director and head of Bear Growth Capital Partners, a private equity group, from July 2003 to January 2009. He served as a managing director for TD Capital Communications Partners (f/k/a Toronto Dominion Capital), a venture capital investment firm, from July 1999 until July 2002. From February 1998 to March 1999, he was a co-founder and senior managing director of NMS Capital Management, LLC, a $600 million private equity fund affiliated with NationsBanc Montgomery Securities. Prior to NMS Capital, Mr. Lattanzio served in several positions with various affiliates of Bankers Trust New York Corporation for over 13 years, most recently as a managing director of BT Capital Partners, Inc. Mr. Lattanzio has experience in a variety of investment banking disciplines, including mergers and acquisitions, private placements and restructuring. Mr. Lattanzio received his Bachelor of Science degree in Economics with honors from the University of Pennsylvania’s Wharton School of Business in 1984.
Mr. Lattanzio brings extensive financial and investment banking experience and business acumen to the Board. His broad experience with several investment firms and private equity groups, including his current experience as the president of Star Avenue Capital, LLC, brings an important perspective to the Board on issues concerning the Company’s strategic initiatives.
Richard G. Rawson.  Mr. Rawson, age 65, president of the Company and the majority of its subsidiaries, is a Class III director and has been a director of the Company since 1989. He has been president of the Company since August 2003. Before being elected president, he served as executive vice president of administration, chief financial officer and treasurer of the Company from February 1997 until August 2003. Prior to that, he served as senior vice president, chief financial officer and treasurer of the Company since 1989. Prior to joining the Company in 1989, Mr. Rawson served as a senior financial officer and controller for several companies in the manufacturing and seismic data processing industries. He has served the National Association of Professional Employer Organizations (“NAPEO”) as president, first vice president, second vice president and treasurer, as well as chairman of the Accounting Practices Committee. Mr. Rawson has a Bachelor of Business Administration degree in Finance from the University of Houston and currently serves as a member of the board for the C.T. Bauer College of Business.
Mr. Rawson brings financial and operational experience to the Board. His lengthy service as president of the Company, as well as his prior service as chief financial officer and treasurer of the Company, provide in-depth knowledge and insight of Company operations and financial matters to the Board. 
Paul J. Sarvadi.  Mr. Sarvadi, age 57,59, Chairman of the Board and Chief Executive Officer and co-founder of the Company and its subsidiaries, is a Class II director and has been a director since the Company’s inception in 1986. He has also served as the Chairman of the Board and Chief Executive Officer of the Company since 1989 and as president of the Company from 1989 untilto August 2003. He attended Rice University and the University of Houston prior to starting and operating several small companies. Mr. Sarvadi has served as president of NAPEOthe National Association of Professional Employer Organizations (“NAPEO”) and was a member of its Board of Directors for five years. In 2001, Mr. Sarvadi was selected as the 2001 National Ernst & Young Entrepreneur of the Year ® for service industries. In 2004, he received the Conn Family Distinguished New Venture Leader Award from Mays Business School at Texas A&M University. In 2007, he was inducted into the Texas Business Hall of Fame.

Mr. Sarvadi brings substantial business and operational experience to the Board, including an extensive knowledge of sales, customer relationships, and issues affecting small to medium-sized businesses. Mr. Sarvadi’s role as a co-founder of the Company and lengthy service as chief executive officer of the Company provide to the Board extensive knowledge and insight of our operations and issues affecting the Company as well as the broader professional employer organization (“PEO”) industry. Mr. Sarvadi’s previous experience starting and operating several small businesses, as well as his frequent interaction with the Company’s clients, provide valuable insight to the challenges facing small to medium-sized businesses, which is a principal focus of the Company.

Austin P. Young.Norman R. Sorensen. Mr. Young,Sorensen, age 73,70, joined the Company as a Class II director in January 2003. He is chairmanMarch 2015 following his nomination by Starboard pursuant to the 2015 Agreement. Mr. Sorensen formerly served as Chairman of the Company’s Finance, RiskInternational Insurance Society, Inc., a professional organization for the insurance industry, from January 2010 to June 2013. Mr. Sorensen has served as a director of the International Insurance Society, Inc. since January 2005. Previously, from November 2011 until December 2012, he was Chairman of the International Advisory Council of Principal Financial Group, Inc., a global financial investment management company. He was Chairman of Principal International, Inc., from June 2011 to October 2012, and President and CEO of International Asset Management and Audit CommitteeAccumulation of Principal International, Inc., from January 2001 to June 2011. Mr. Sorensen has served as a director of Encore Capital Group, Inc. (Nasdaq: ECPG), a consumer banking company, since November 2011. Mr. Sorensen also served as a director of Sara Lee Corporation (former NYSE-listed company), an American consumer-goods company, from January 2007 to November 2011. He has served as Executive Vice President of both Principal Financial Group, Inc. and Principal Life Insurance Company, a memberlife insurance company, since January 2007, and held a number of other senior management positions since 1998. Mr. Sorensen also served as Chairman of the Nominating and Corporate Governance Committee.U.S. Coalition of Service Industries, a leading forum for the services sector, from January 2003 to March 2005. Mr. YoungSorensen served as a senior vice president,executive of American International Group, Inc., an insurance services company, from 1989 to December 1998. He also formerly served as Chairman and director of DE Master Blenders 1753, a Dutch NYSE/Euronext-listed consumer goods company, from December 2011 until September 2013.

Mr. Sorensen’s qualifications include his experience as an executive officer of an international financial services and asset management company, with responsibility over international operations and oversight over asset management and financial services functions and multiple divisional chief financial officer and treasurer of CellStar Corporation from 1999 to December 2001, when he retired. From 1996 to 1999, heofficers. He has also served as an executive vice president - finance and administration of Metamor Worldwide, Inc. Mr. Young also held the position of senior vice president and chief financial officer of American General Corporation for over eight years and was a partnerseveral publicly traded companies.


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Summary of Committee Memberships
The following table summarizes the committees to which each director will belong both before and after the 2016 Annual Meeting of Stockholders, including after giving effect to the covenants set forth in the Houston2016 Agreement and New York offices of KPMG before joining American General. Mr. Young currently serves as a director and chairmanassuming that each of the Audit Committeesnominees for director at the 2016 Annual Meeting of Tower Group International, Ltd. and Amerisafe, Inc. He is a member of the Houston and State Chapters of the Texas Society of CPAs, the American Institute of CPAs, and the Financial Executives International. He holds an accounting degree from The University of Texas.Stockholders are elected:
Mr. Young brings extensive financial and accounting experience to the Board. His prior experience as a partner in an international accounting firm, as a senior financial officer of large companies, and his service on the audit committees of publicly traded companies provide Mr. Young with a thorough understanding of generally accepted accounting principles and financial statements. Additionally, Mr. Young’s prior experience provides a solid background for him to advise and consult with the Board on financial and audit-related matters as chairman of the Finance, Risk Management and Audit Committee, and to serve as the designated audit committee financial expert of the Finance, Risk Management and Audit Committee. Mr. Young’s service on other boards and his extensive knowledge of the Company and its business provide us with additional valuable perspective on issues affecting the Company.
Current
After 2016 Annual Meeting
of Stockholders
Compensation Committee
Jones (Chair)
Brown
Feld
Brown (Chair)
Feld
McKenna-Doyle
New Director1
Finance, Risk Management and Audit Committee
Young (Chair)
Kaufman
McKenna-Doyle
Sorensen
Young (Chair)
Kaufman
Morphy
Sorensen
Nominating and Corporate Governance Committee2
McKenna-Doyle (Chair)
Brown
Feld
Young
McKenna-Doyle (Chair)
Brown
Feld
Young
_________________________

1
Refers to the new independent director to be appointed by the Board pursuant to the 2016 Agreement. See “— General —Agreements with Starboard — 2016 Agreement.”

2
Immediately prior to the effectiveness of the 2016 Agreement, the Nominating and Corporate Governance Committee was comprised as follows: Ms. Kaufman (Chair), and Messrs. Brown, Feld, Jones and Young.
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Insperity has adopted Corporate Governance Guidelines, which include guidelines for, among other things, director responsibilities, qualifications and independence. The Board continuallyregularly monitors developments in corporate governance practices and regulatory changes and periodically assesses the adequacy of and modifies its Corporate Governance Guidelines and committee charters as warranted in light of such developments. You can access the Company’s Corporate Governance Guidelines in their entirety on the Company’s website at www.insperity.com in the Corporate Governance section under the Investor Relations tab. The information on our website is not, and shall not be deemed to be, a part of this proxy statement.
On an annual basis, each director and named executive officer is obligated to complete a questionnaire that requires disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, has a direct or indirect material interest, and must promptly advise us of any changes to the information previously provided.
Determinations of Director Independence
Under rules of the New York Stock Exchange (the “NYSE”),NYSE, the Company must have a majority of independent directors. No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company). In evaluating each director’s independence, the Board considered all relevant facts and circumstances, and relationships and transactions between each director, her or his family members or any business, charity or other entity in which the director has an interest on the one hand, and the Company, its affiliates, or the Company’s senior management on the other. As a result of this review, at its meeting held on February 17,19, 20142016, the Board affirmatively determined that all of the Company’s directors are independent from the Company and its management, with the exception of Messrs. Sarvadi and Rawson, both of whom are members of the senior management of the Company.
The Board has considered what types of disclosure should be made relating to the process of determining director independence. To assist the Board in making disclosures regarding its determinations of independence, in 2004, the Board has adopted categorical standards as contemplated under the listing standards of the NYSE then in effect. Under the rules then in effect, relationships that were within the categorical standards were not required to be disclosed in the proxy statement and their impact on independence was not required to be separately discussed, although the categorical standards, by themselves, did not determine the independence of a particular director. The Board considers all

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relevant facts and circumstances in determining whether a director is independent. A relationship satisfies the categorical standards adopted by the Board if it:
 • is not a relationship that would preclude a determination of independence under Section 303A.02(b) of the NYSE Listed Company Manual;
 • consists of charitable contributions made by Insperity to an organization where a director is an executive officer and does not exceed the greater of $1 million or 2% of the organization’s gross revenue in any of the last three years; and
 • is not required to be, and it is not otherwise, disclosed in Insperity’s annual proxy statement.herein.
In the course of the Board’s determination regarding the independence of directors other than Messrs. Sarvadi and Rawson, it considered all transactions, relationships and arrangements in which such directors and Insperity were participants. The Board also considered any transactions amongst the directors, even if they did not involve Insperity. In particular, with respect to each of the most recent three fiscal years, the Board evaluated, with respect to Mr. Fields, Insperity’s provision of PEO-related services to companies owned by Mr. Fields and, with respect to Dr. Jones, its long-time employment of an individual who became Dr. Jones’ son-in-law. The Board has determined that these relationships arethis relationship is not material. In making this determination with respect to Mr.

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Fields, the Board considered the fact that his companies pay Insperity comprehensive service fees on the same basis as all other clients, and payments net of payroll costs made by his companies were less than 0.1% of Insperity’s revenues in each of the last three fiscal years. In making this determination with respect to Dr. Jones, the Board considered that Dr. Jones’ son-in-law was employed as a manager of lead generation, held such position for a fewseveral years prior to becoming a member of Dr. Jones’ family, did not have management responsibilities, and his salary was between the 25th and 75th percentile for the position.
Selection of Nominees for the Board of Directors
Identifying Candidates
The Nominating and Corporate Governance Committee solicits ideas for potential candidates for membership on the Board from a number of sources including members of the Board, executive officers of the Company, individuals personally known to the members of the Board, and research. The Nominating and Corporate Governance Committee also has sole authority to select and compensate a third-party executive search firm to help identify candidates, if it deems advisable. In addition, the Nominating and Corporate Governance Committee will consider candidates for the Board submitted by stockholders. Any such submissions should include the candidate’s name and qualifications for Board membership and should be directed to the Corporate Secretary of Insperity at 19001 Crescent Springs Drive, Kingwood, Texas 77339. Although the Nominating and Corporate Governance Committee does not require the stockholder to submit any particular information regarding the qualifications of the stockholder’s candidate, the level of consideration that the Nominating and Corporate Governance Committee will give to the stockholder’s candidate will be commensurate with the quality and quantity of information about the candidate that the stockholder makes available to the Committee. The Nominating and Corporate Governance Committee will consider all candidates identified through the processes described above, and will evaluate each of them on the same basis.
In addition, the Bylaws of the Company permit stockholders to nominate directors for election at an annual stockholders meeting whether or not such nominee is submitted to and evaluated by the Nominating and Corporate Governance Committee. To nominate a director using this process, the stockholder must follow the procedures described under “Additional Information – Advance Notice Required— Stockholder Director Nominations for Stockholder Nominations2017 Annual Meeting of Stockholders.”
Further, pursuant to the 2016 Agreement, the Company agreed to appoint Mr. Morphy to the Board and Proposals” on page 36.to nominate Messrs. Brown, Morphy and Rawson for re-election as Class III directors at the 2016 Annual Meeting of Stockholders.
Evaluating Candidates
Each candidate must meet certain minimum qualifications, including:
 • the ability to represent the interests of all stockholders of the Company and not just one particular constituency;
 • independence of thought and judgment;
 • the ability to dedicate sufficient time, energy and attention to the performance of her or his duties, taking into consideration the prospective nominee’s service on other public company boards; and
 • skills and expertise that are complementary to the existing Board members’ skills; in this regard, the Board will consider the Board’s need for operational, sales, management, financial, governmental or other relevant expertise.
In addition, the Nominating and Corporate Governance Committee considers other qualities that it may deem to be desirable from time to time, such as the extent to which the prospective nominee contributes to the diversity of the Board — with diversity being construed broadly to include a variety of perspectives, opinions, experiences and backgrounds. However, diversity is just one factor that the Nominating and Corporate Governance Committee may consider, and the Board does not have any particular policy with regard to

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diversity. The Nominating and Corporate Governance Committee may also consider the ability of the prospective nominee to work within the then-existing interpersonal dynamics of the Board and her or his ability to contribute to the collaborative culture among Board members.
BasedGenerally, based on this initial evaluation, the chairmanchairperson of the Nominating and Corporate Governance Committee will determine whether to interview the nominee, and if warranted, will recommend that one or more members of the Nominating and Corporate Governance Committee, other members of the Board and senior management, as appropriate, interview the nominee in person or by telephone. After completing this evaluation and interview process, the Committee makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation of the Nominating and Corporate Governance Committee.


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Board of Directors Leadership
The Company does not have a policy with respect to whether the positions of Chairman of the Board and chief executive officer (“CEO”) should be held by the same person or two separate individuals, and believes that it is in the best interest of the Company to consider that question from time to time in the context of succession planning. At this time, the Board believes that it is in the best interest of the Company and an appropriate leadership structure to have the CEO also serve as Chairman of the Board. Combining the CEO and Chairman of the Board roles provides an efficient and effective leadership model that promotes unambiguous accountability and alignment on corporate strategy. Mr. Sarvadi co-founded the Company in 1986 and has served as Chairman of the Board and CEO since 1989. The Board believes that Mr. Sarvadi’s intimate knowledge of the daily operations of and familiarity with the Company and industry put him in the best position to provide leadership to the Board on setting the agenda, emerging issues facing the Company and the PEO industry, and strategic opportunities. Additionally, Mr. Sarvadi’s substantial financial stake in the Company creates a strong alignment of interests with other stockholders. Mr. Sarvadi’s combined roles also ensure that a unified message is conveyed to stockholders, employees and clients.
The Company’s Corporate Governance Guidelines established the position of lead independent director in 2012. Mr. Petsch, as chairman of the Nominating and Corporate Governance Committee,Young is currently the lead independent director. The Board reevaluates the lead independent director position annually. The lead independent director has the following responsibilities in addition to the regular duties of a director:
• Prepareprepare and set the agenda for and chair executive sessions of the outside directors;
• Callcall or convene executive sessions of the outside directors;
• Authorityauthority to set the agenda for meetings of the Board;
• Presidepreside at all meetings of the Board where the Chairman of the Board is not present or has a potential conflict of interest;
• Serveserve as liaison and facilitate communications between the independent directors and the Chairman of the Board and CEO;
• Consultconsult with the Chairman of the Board and CEO on matters relating to corporate governance and performance of the Board; and
• Collaboratecollaborate with the rest of the Nominating and Corporate Governance Committee on possible director conflicts of interest or breaches of the Corporate Governance Guidelines.

Board of Directors’ Role in Risk Oversight
The Board is responsible for overseeing the Company’s overall risk profile and assisting management in addressing specific risks. The Company’s Enterprise Risk Management Steering Committee (the “ERM Steering Committee”) is responsible for formally identifying and evaluating risks that may affect the Company’s ability to execute its corporate strategy and fulfill its business objectives. The ERM Steering Committee employs a disciplined approach to identifying, documenting, evaluating, communicating, and monitoring enterprise risk management within the Company. The ERM Steering Committee is chaired by the Company’s chief financial officer and includes the Company’s general counsel, internal audit director and other members of management. The ERM Steering Committee reports to the Board and the CEO. During 20132015, the ERM Steering Committee completed a comprehensive review and update of the Company’s risks, including strategic, operational, financial, legal, regulatory and reputational risks. The ERM Steering Committee further reviewed and updated the mitigating factors associated with such risks, and prioritized the identified risks based upon the subjectively determined likelihood of the occurrence and the estimated resulting impact on the Company if the risk occurred. The ERM Steering Committee is charged with periodically reviewing the Company’s overall risk profile, as well as any significant identified risks, with both the Finance, Risk Management and Audit Committee and the entire Board.

The Board executes its risk oversight function both directly and through its standing committees, each of which assists the Board in overseeing a part of the Company’s overall risk management. Throughout the year, the Board and each such committee spend a portion

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of their time reviewing and discussing specific risk factors, and risk assessments are part of all major decision making. The Board is kept informed of each committee’s risk oversight and related activities through regular reports from such committees. The Finance, Risk Management and Audit Committee is assigned primary responsibility for oversight of risk assessment with financial implications. In its periodic meetings with management, internal auditors and independent auditors, the Finance, Risk Management and Audit Committee reviews and monitors many factors relating to enterprise risk, including:

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• the financial affairs of the Company;
• the integrity of the Company’s financial statements and internal controls;
• the Company’s compliance with legal and regulatory requirements;
• the independent auditor’s qualifications, independence and performance;
• the performance of the personnel responsible for the Company’s internal audit function and independent auditors; and
• the Company’s policies and procedures with respect to risk management.

The Compensation Committee has the primary responsibility to consider material risk factors relating to the Company’s compensation policies and practices. The Nominating and Corporate Governance Committee monitors governance and succession risks. As part of its review and approval of the Company’s capital budget, major acquisitions, material contracts, compensation and other similar matters, the Board retains ultimate authority over assessing the risks and their impacts on the Company’s business.
Prohibition on Hedging and Pledging of Company Common Stock
The Company has established strict standards regarding the speculative trading of Company Common Stock. In February 2013, the Company amended its internal policies to prohibit employees from engaging in hedging transactions involving Company Common Stock. The Board also adopted a formal policy prohibiting employees and directors from engaging in the significant pledging of shares of Company Common Stock. All pledging requests will be reviewed by the Board, which will consider the facts and circumstances and other information the Board deems relevant.
As of May 9, 2016, Mr. Sarvadi had 220,000 shares of Common Stock pledged. After a thorough review, the Board previously determined that the shares pledged by the CEO were not significant. In making this determination, the Board considered that the CEO reduced the number of pledged shares from last year, and the pledged shares only represent approximately 17%14% of the CEO’s total share ownershipshares beneficially owned by the CEO and approximately 1% of the Company’s total shares outstanding and market capitalization. The Board also considered the CEO’s significant number of founder’s shares that were not earned as compensation from the Company, and his compliance with the Company’s stock ownership guidelines, disregarding the pledged shares.
Code of Business Conduct and Ethics
The Board has adopted a Code of Business Conduct and Ethics (the “Code”), governing the conduct of the Company’s directors, officers and employees. The Code, which meets the requirements of Rule 303A.10 of the NYSE Listed Company Manual and Item 406 of Regulation S-K, is intended to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure in the Company’s public filings, compliance with laws and the prompt internal reporting of violations of the Code. You can access the Code on the Company’s website at www.insperity.com in the Corporate Governance section under the Investor Relations tab. Changes in and waivers to the Code for the Company’s directors, executive officers and certain senior financial officers will be posted on the Company’s Internet website within four business days of being approved and maintained for at least 12 months. If you wish to raise a question or concern or report a violation to the Finance, Risk Management and Audit Committee, you should visit www.ethicspoint.com or call the Ethicspoint toll-free hotline at 1-866-384-4277.
Stockholder Communications
Stockholders and other interested parties may communicate directly with the entire Board or the non-management directors as a group by sending an email to directors@insperity.com. Alternatively, you may mail your correspondence to the Board or non-management directors in care of the Corporate Secretary, 19001 Crescent Springs Drive, Kingwood, Texas 77339. In the subject line of the email or on the envelope, please specify whether the communication is addressed to the entire Board or to the non-management directors.
Unless any director directs otherwise, communications received (via U.S. mail or email) will be reviewed by the Corporate Secretary who will exercise his discretion not to forward to the Board correspondence that is inappropriate such as business solicitations, frivolous communications and advertising, routine business matters (i.e. business inquiries, complaints, or suggestions), and personal grievances.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors
Directors are expected to attend all or substantially all Board meetings and meetings of the Committees of the Board on which they serve. Directors are also expected to spend the necessary time to discharge their responsibilities appropriately (including advance

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review of meeting materials) and to ensure that other existing or future commitments do not materially interfere with their responsibilities as members of the Board. The Board met five13 times in 20132015. All of the members of the Board participated in more than 75% of the meetings of the Board and Committees of which they were members during the fiscal year ended December 31, 20132015. The Board encourages its members to attend the Annual Meeting of Stockholders. Last year, sevenfive of the Company’s eight directors attended the Annual Meeting of Stockholders.
Executive Sessions of the Board of Directors and the Lead Independent or Presiding Director
The Company’s non-management directors, all of whom are also independent, hold executive sessions at which the Company’s management is not in attendance at regularly scheduled Board meetings. The lead independent director, currently Mr. Petsch,Young, establishes the agenda and serves as presiding director at the executive sessions. In the absence of a lead independent director, the chairmanchairperson of the Nominating and Corporate Governance Committee or an independent director designated by the outside directors shall preside at meetings of non-management directors.
Committees of the Board of Directors
The Board has appointed three standing committees: the Finance, Risk Management and Audit Committee; the Compensation Committee; and the Nominating and Corporate Governance Committee. The charters for each of the three standing committees, which have been adopted by the Board, contain a detailed description of the respective standing committee’s duties and responsibilities and are available on the Company’s website at www.insperity.com in the Corporate Governance section under the Investor Relations tab. The Board also created a new, temporary Independent Advisory Committee pursuant to the 2015 Agreement. The Board has reviewed the applicable legal and NYSE standards for independence for members of each of Finance, Risk Management and Audit Committee; the Compensation Committee; and the Nominating and Corporate Governance Committee member independence as well as the Company's independence standards for such Committees and has determined that the members of each memberof those Committees of the Board's committeesBoard is “independent” under such requirements.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee met five times in 20132015. The members of the Nominating and Corporate Governance Committee are all of the non-management directors: Mr. Petsch,currently are: Ms. McKenna-Doyle, who serves as chairman,chairperson, and Messrs. Brown, Fields, LattanzioFeld and Young, Dr. Jones and Ms. Kaufman.Young. The composition of this Committee was revised in connection with the 2016 Agreement. See “Proposal Number 1: Election of Directors —General — Agreements with Starboard — 2016 Agreement.” The Nominating and Corporate Governance Committee: (i) identifies individuals qualified to become Board members, consistent with the criteria for selection approved by the Board; (ii) recommends to the Board a slate of director nominees to be elected by the stockholders at the next annual meetingAnnual Meeting of stockholdersStockholders and, when appropriate, director appointees to take office between annual meetings;Annual Meetings of Stockholders; (iii) develops and recommends to the Board a set of corporate governance guidelines for the Company; and (iv) oversees the evaluation of the Board.
Finance, Risk Management and Audit Committee
The Finance, Risk Management and Audit Committee met eight times in 20132015. The members of this Committee currently are Mr. Young, who serves as chairman, Messrs. Lattanziochairperson, Ms. Kaufman, Ms. McKenna-Doyle and Brown,Mr. Sorensen. Pursuant to the 2016 Agreement, immediately following the 2016 Annual Meeting of Stockholders and assuming all director nominees are re-elected, the members of this Committee will be Mr. Young, who will continue to serve as chairperson, Ms. Kaufman.Kaufman, Mr. Morphy and Mr. Sorensen. The Board has determined that Mr. Young is an “audit committee financial expert” as such term is defined in Item 401(h) of Regulation S-K promulgated by the SEC. The Finance, Risk Management and Audit Committee assists the Board in fulfilling its responsibility to oversee the financial affairs, risk management, accounting and financial reporting processes, and audits of financial statements of the Company by reviewing and monitoring: (i) the financial affairs of the Company; (ii) the integrity of the Company’s financial statements and internal controls; (iii) the Company’s compliance with legal and regulatory requirements; (iv) the independent auditor’s qualifications, independence and performance; (v) the performance of the personnel responsible for the Company’s internal audit function and the independent auditors; and (vi) the Company’s policies and procedures with respect to risk management, as well as other matters that may come before it as directed by the Board.

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Compensation Committee
The Compensation Committee met fivesix times in 2013.2015. The members of the Compensation Committee currently are Dr. Jones, who serves as chairman,chairperson, and Messrs. FieldsBrown and Petsch.Feld. Pursuant to the 2016 Agreement, immediately following the 2016 Annual Meeting of Stockholders and assuming all director nominees are re-elected, the members of this Committee will be Mr. Brown, who will serve as chairperson, Mr. Feld and Ms. McKenna-Doyle. In addition, the new independent director to be added to the Board pursuant to the 2016 Agreement would also become a member of this Committee. The Compensation Committee: (i) oversees and administers the Company’s compensation policies, plans and practices; (ii) reviews and discusses with management the Compensation Discussion and Analysis required by SEC Regulation S-K, Item 402; and (iii) prepares the annual report required by the rules of the SEC on executive compensation for inclusion in the Company’s annual report on Form 10-K or proxy statement for the annual meetingAnnual Meeting of stockholders.Stockholders. To carry out these purposes, the Compensation Committee: (i) evaluates the performance of and determines the compensation for senior management, taking into consideration recommendations made by the CEO; (ii) administers the Company’s compensation programs; and (iii) performs such other duties as may from time to time be directed by the Board.
Pursuant to the terms of the Insperity, Inc. 2001 Incentive Plan, as amended (the “2001 Incentive Plan”), and the Insperity, Inc. 2012 Incentive Plan (the “2012 Incentive Plan” and, together with the 2001 Incentive Plan, the “Incentive Plans”), the Board or the Compensation Committee may delegate authority under the Incentive Plans to the Chairman of the Board or a committee of one or more Board members, respectively, pursuant to such conditions and limitations as each may establish, except that neither may delegate to any

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person the authority to make awards, or take other action, under the Incentive Plans with respect to participants who may be subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Independent Advisory Committee
The Independent Advisory Committee, which was formed in 2015 pursuant to the 2015 Agreement,reviewed the Company’s business and made recommendations to the Board regarding capital allocation, expenses and targeted ranges for Adjusted EBITDA margins, while taking into consideration the Company’s risk profile and the potential impact of any recommendations on the Company’s business model and strategic plan. Pursuant to the terms of its charter, the Independent Advisory Committee was dissolved in February 2016. The members of the Independent Advisory Committee were Mr. Feld, who served as chairperson, and Messrs. Brown, Sorensen and Young.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Summary
In this section we describeThis Compensation Discussion and Analysis (“CD&A”) explains our compensation philosophy, objectives and strategies and the underlying elements of our compensation programs. Insperity has had a long-standing objective of linking executive compensation to performance and our 2013 compensation packagesprograms for executives continued in this spirit, reflecting changes in economic conditions both within and outside of the Company. We continually review our executive compensation practices for alignment with Company values, long-term stockholder interests and continued growth of the Company.
Stockholder Advisory Votes
At our 2011 Annual Meeting, the stockholders, on an advisory basis, voted in favor of an annual advisory vote on the frequency of holding future votes to approve the compensation of the Company’s named executive officers (“NEOs”). In accordance withThis CD&A also summarizes decisions the stockholders’ preference, the Company’s Board has determined that the Company will hold an advisory vote on executive compensation every year. Proposal No. 2 in this proxy statement contains the resolution and supporting materials with respect to this year’s advisory vote on executive compensation.
At our 2013 Annual Meeting, the stockholders approved, in a non-binding advisory vote, the compensation of the Company’s NEOs, with over 92% of the votes cast in favor of such compensation. The Compensation Committee valuesof our Board of Directors (“Compensation Committee”) made regarding these programs and the opinions expressed byfactors considered in making those decisions. The following individuals comprised our stockholders in their vote and considered the vote outcome when it made compensation decisionsNEOs for the executive officers for fiscal year 2014 and in considering recommending changes to the Board regarding the Company’s compensation policies, as discussed below.
Recent Actions and Changes
During 2013, the Company implemented the following changes to our compensation and corporate governance policies:2015:
•Name implemented a “double trigger” requirement for early vesting of NEOs’ stock awards on a change in control;Title
•Paul J. Sarvadi adopted a policy prohibiting employeesChief Executive Officer and directors from engaging in hedging transactions involving sharesChairman of the Company’s Common Stock (see page 11 in the Corporate Governance Section); andBoard
•Douglas S. Sharp adopted a policy prohibiting employeesChief Financial Officer, SVP of Finance and directors from pledging transactions involving sharesTreasurer
Richard G. RawsonPresident
A. Steve ArizpeChief Operating Officer and EVP of the Company’s Common Stock that would be considered significant by the Board (see page 11 in the Corporate Governance Section).Client Services
Jay E. MincksEVP of Sales and Marketing
In 2014,Performance Highlights
The Company’s financial performance in 2015 was strong and in furtherance ofcontinued to reflect our compensation objectives and commitment to best practices,unit growth in the Compensation Committeenumber of paid worksite employees (“WSEE”), effectively managing our pricing and Board adopteddirect costs, controlling operating expenses and enhancing total return for our stockholders.

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For 2015, we continued to execute on our strategy to accelerate unit growth in WSEE, achieving double-digit growth of 11.6% on a “clawback policy”year-over-year basis. We believe that WSEE is a key metric for incentive compensationmeasuring our sales success and client retention efforts.

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Note: Adjusted EBITDA is a non-GAAP financial measure used by management to analyze the Company’s performance. Please read Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures” in our annual report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 12, 2016 for a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.
For 2015, our adjusted EBITDA was $110.0 million, representing a 30.8% increase compared to 2014. Adjusted EBITDA represents EBITDA (earnings before interest, taxes, depreciation and amortization) plus non-cash impairments, stockholder advisory expenses and stock-based compensation. We believe that this overall increase in adjusted EBITDA demonstrates our ability to execute on our plan to grow sales, retain existing clients, effectively manage our pricing and direct costs and control operating costs.


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* Excludes a special dividend of $2.00 per share paid in the fourth quarter of 2014.
On May 29, 2015, the Company announced a 16% increase to executive officersits quarterly cash dividend from $0.19 per share ($0.76 annualized) to $0.22 per share ($0.88 annualized), reflecting our continued confidence in our strategy and other employees (see page 23).the significant free cash flow generated by our business. This is the second increase to our quarterly dividend since 2013, in addition to the $2.00 per share special dividend that we paid in December 2014.
Our Pay-for-Performance Compensation Philosophy
Insperity’s overall compensation philosophy is one of pay-for-performance. The objectives of our compensation plans are to attract, retain and motivate high performing individuals to achieve the Company’s annual and long-term business and strategic goals. A substantial portion of each executive officer’s total compensation package consists of a long-term incentive componentcomponents and a variable annual compensation component, with acomponent. The goal of aligningthese compensation components is to align the interests of the executive officers with those of the stockholders by tying a meaningful portion of executive compensation to our financial performance and stock price. In order to remain competitive withfor talent within the market, total compensation also includes a stablefixed base salary, as well as an element of supplemental benefits and perquisites. We also design our compensation plans to motivate executives to maximize stockholder value over time, without encouraging excessive risk-taking that could adversely impact stockholder value.
The Compensation Committee has historically established a variety of annual performance goals designed to create a strong alignment between executive and stockholder interests. The Compensation Committee selects corporate performance goals that they believe thishave a direct influence on achieving the Company’s business objectives, contribute to the overall success of the Company and favorably impact stockholder value. Each corporate performance goal is intended to have a challenging achievement level that must be reached before triggering a payout for employees.

Based upon stockholder feedback and following input from our outside compensation consultants on corporate compensation trends and institutional investor preferences for performance-based long-term compensation, the Compensation Committee implemented a performance-based long-term equity incentive program beginning in 2015, as further described under “Elements of

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Compensation — Long-Term Equity Incentive Compensation.” The Compensation Committee believes that the corporate performance goals that must be achieved for the performance-based awards to vest will align the value that executives could receive from these awards with the value that is created for stockholders. The implementation of a performance-based long-term equity incentive program, in combination ofwith our other compensation elements, supports our pay-for-performance philosophy.

Compensation Objectives

We are committed to attracting, motivating, retaining and encouraging long-term employment of individuals with a demonstrated commitment to integrity and exemplary personal standards of performance. Our culture is based upon the value of and respect for each individual, encouraging personal and professional growth, rewarding outstanding individual and corporate performance and achieving excellence through a high-energy, collegial work environment. We are convinced these elements contribute

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to our vision of being an “employer of choice,” which increases our value to clients, employees, stockholders, and the communities where we live and work.

Our compensation objectives for executivesour NEOs are based on the same principles that we employ in establishing all of our compensation programs. For executives,our executive officers, our compensation programs are designed to:
 • attract and retain key executive officers responsible for our success; and
 • motivate management both to achieve short-term business goals and to enhance long-term stockholder value through our “pay-for-performance” philosophy.value.

Compensation Strategies

To accomplish our compensation objectives, we adhere to the following compensation strategies:
 • We have established and strive to maintainPromote a performance-driven culture that encourages growth by recognizing and rewarding employees who reachmeet and exceed the Company’s business objectives.
 • As part of ourMaintain competitive compensation program, our base salary system compensatessalaries that compensate employees based upon job responsibilities, level of experience, individual performance, comparisons to the market, internal comparisons and other relevant factors.
 • We provide incentive compensation to recognizeMotivate and reward individual, departmental and corporate performance through a variable pay component that is equitable to both employees and stockholders,programs. These programs directly support our business objectives, encourages leadership of departmental units and directly supports our business objectives.encourages collaboration and teamwork across the Company. As employees progress to higher levels in the Company, an increasing proportion of their compensation is linked to Company-wide and departmental performance.
 • We have created a strong alignmentAlignment of interests among executive officers, employees and stockholders through the use of long-term equity and performance-based incentive compensation opportunities.
 • We provideProvide a competitive benefits package that recognizes and encourages work-life balance and fosters a long-term commitment to the Company.
Risk Assessment
The Company conducted an assessmentInsperity’s Best Practice Features

We have embedded in our overall compensation programs features aligned with the objectives of our business and designed to strengthen the link between the interests of our executive officers and those of our stockholders. Following is a summary of practices related to compensation that we have adopted and pay practices that we avoid:


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What Insperity Has
üStock ownership guidelines, for the CEO, three times base salary and for non-employee directors, three times the annual cash retainer
üClawback policy for incentive compensation paid to any employee, including NEOs and other executive officers
üMinimum vesting period of three years for grants of restricted stock, stock options and phantom shares
üDouble trigger requirement for early vesting of NEO equity awards in the event of a change in control
üHedging policy prohibits employees and directors from engaging in hedging transactions involving shares of Common Stock
üPledging policy prohibits employees and directors from engaging in pledging transactions involving shares of Common Stock that would be considered significant by the Board
üEstablished a lead independent director position
üCompensation Committee composed entirely of outside, independent directors
üIndependent compensation consultant hired by and reporting directly to the Compensation Committee
What Insperity Does Not Have
ûEmployment agreements with NEOs or other executive officers
ûExecutive pension or other similar retirement or supplemental benefits
ûSingle trigger change in control agreements for NEOs
ûTax gross-ups in the event of a change in control
ûMedical coverage for retirees
ûExcessive benefits and perquisites

Summary of Compensation Elements

As previously described, one of the important values and objectives of our compensation programs is to provide our executive officers with a mixture of pay linked to Company and practices for its employees and determined that there are no risks arising from such compensation programs and practices that are reasonably likely to have a material adverse effect on the Company.
Elementsindividual performance. The major elements of Compensation
Theour 2015 annual compensation package for executive officers consists of:are summarized in the following chart.
Compensation ElementForm of CompensationPurpose
FixedBase SalaryCashProvides fixed level of compensation to attract and retain talent
Variable and at RiskVariable Cash Compensation (Insperity Annual Incentive Program)CashRewards executive officers for achieving annual Company, departmental and individual performance goals
Long-Term Equity IncentivesRestricted Stock and Performance SharesSupports long-term focus on creating stockholder value and provides strong retention incentive with multi-year vesting
BenefitsRetirement Benefits401(k) PlanProvides competitive retirement benefits as part of comprehensive pay package
Health & Welfare BenefitsMedical, Dental, Life and Disability BenefitsProvides competitive health and welfare benefits as part of comprehensive pay package


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Elements of Compensation
Base Salary
Base salary is intended to provide fixed annual compensation to attract and retain talented executive officers. Annual adjustments to base salary are based upon the annual performance evaluation, market data and other relevant considerations. Annual performance appraisals are completed through our talent management system, which evaluates the executive officer’s annual performance based on pre-established competencies and the achievement of specific individual performance goals. Competencies for executive officers include business ethics, continuous learning, integrity, managing customer focus, strategic thinking and visionary leadership.
Variable Cash Compensation
Variable cash compensation places a significant portion of executive compensation at risk and tied to corporate, departmental and individual performance. Variable compensation for all executive officers is paid through the Insperity Annual Incentive Program (“IAIP”), a non-equity incentive program under the stockholder-approved 2012 Incentive Plan. The IAIP embodies our pay-for-performance philosophy and helps align executive officers’ compensation to the Company’s overall performance, as well as to their respective individual performance and the performance of the departments under their respective supervision.
Long-Term Equity Incentive Compensation
Long-term equity incentives align the interests of the executive officers with those of the stockholders. We believe that long-term incentives enhance retention while rewarding executive officers for their service. Long-term equity incentive awards are made under the stockholder-approved 2012 Incentive Plan. The objectives of the 2012 Incentive Plan are to:
 • an annual base salary payable in cash;provide incentives to attract and retain persons with training, experience and ability to serve as our employees;
 • variable cash compensation, which is targeted as a percentagepromote the interests of base pay;the Company by encouraging employees to acquire or increase their equity interest in the Company;
 • long-term equity incentive compensation;provide a means by which employees may develop a sense of proprietorship and personal involvement in the development and financial success of the Company; and
 • supplementalencourage employees to remain with, and special benefits, including management perquisites.devote their best efforts to the business of, the Company, thereby advancing the interests of the Company and its stockholders.
Each
Awards granted under the 2012 Incentive Plan may be in the form of restricted stock, restricted stock units, stock options, phantom shares, performance shares or units, bonus stock or other incentive awards. In recent years, including 2015, incentive awards have been made in the form of restricted stock or performance shares rather than stock options, as we believe the current accounting treatment of these award types more closely reflects the economic value of the award to the employees.

Following an executive compensation study by the Compensation Committee’s independent compensation consultant and based upon stockholder feedback and market compensation trends, including institutional investor preferences for performance-based long-term compensation, the Compensation Committee in March 2015 implemented a performance-based long-term equity incentive program, or LTIP, under the 2012 Incentive Plan. In deciding to add a performance-based long-term component to our compensation elements, the Compensation Committee determined that the LTIP further aligns the Company’s compensation structure with stockholder interests, provides an opportunity to subject a greater percentage of a recipient’s compensation to the achievement of long-term Company growth, creation of shareholder value and aids retention efforts. LTIP awards are tied to achieving increased levels of adjusted EBITDA and, in 2016, a portion is described below.also tied to relative total shareholder return. Awards granted under the LTIP have a three-year performance period with any payout occurring after the conclusion of the performance period in the form of Common Stock. Under terms of the LTIP, the Compensation Committee determines each calendar year whether to make LTIP awards, which executives will participate, the performance goals and the payout opportunities.
Except in the case of a qualifying termination in connection with a change in control, or a termination due to death or disability, a participant in the LTIP must be continuously employed by the Company or its subsidiaries throughout the performance period and on the date such award is paid after the conclusion of the performance period to receive a payout of an award. Awards are granted in the form of phantom shares and will be paid in shares of Common Stock, and may include the right to dividend equivalents.

The 2012 Incentive Plan provides that awards granted to NEOs include a “double trigger” requirement in the case of a “change in control” of the Company as defined under the 2012 Incentive Plan. The imposition of a double trigger means that awards granted to NEOs do not immediately vest following a change in control. Under the double trigger, the conditions and/or restrictions that must be met with respect to vesting or exercisability of future awards granted to NEOs will lapse only after a “qualifying

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termination” within a prescribed number of months following a change in control. All outstanding equity awards held by NEOs include the double trigger requirement.

In February 2015, the Company amended the 2012 Incentive Plan to require a minimum vesting period of three years for all grants of restricted stock and stock options that are time-vested awards. The Compensation Committee may grant awards with a shorter vesting schedule as an inducement to recruit a new employee, for an award granted in lieu of salary or bonus, or by reason of death, disability or change in control. Under the three year minimum vesting schedule, pro rata vesting is permissible. We anticipate continuing to utilize restricted stock awards with a three-year vesting schedule with no additional holding period required beyond the vesting date.

All equity grants to executive officers are approved solely by the Compensation Committee or the independent directors at regularly scheduled meetings, or in limited cases involving key recruits or promotions, by a special committee, special meeting, or unanimous written consent. If an award is made at a meeting, the grant date is the meeting date or a fixed, future date specified at the time of the grant, such as the first business day of a subsequent calendar month or the date that the grant recipient commences employment. If an award is approved by unanimous written consent, the grant date is a fixed, future date on or after the date the consent is effective under applicable corporate law (or, if later, the date the grant recipient starts employment). Restricted stock and performance awards are valued in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation. For stock options, the exercise price cannot be less than the closing price of Common Stock on the grant date and stock options may not be re-priced or exchanged for a cash buy-out or settlement with a lower exercise price, without prior stockholder approval.

Retirement Benefits
We do not provide pension arrangements or nonqualified defined contribution or other deferred compensation plans for our executive officers. Our executive officers are eligible to participate in the Company’s corporate 401(k) plan. Each payroll period, we contribute on behalf of each participant a matching contribution equal to 50% of the first 6% of compensation contributed to the 401(k) plan by the participant (subject to applicable limitations under the Internal Revenue Code). Effective January 1, 2016, the matching contribution increased to 100% of the first 6% of compensation contributed for all participating employees.

Supplemental Benefits, Including Management Perquisites

Executive compensation also includes supplemental benefits and a limited number of perquisites that enhance our ability to attract and retain talented executive officers. We believe that perquisites assist in the operation of business, allowing executive officers more time to focus on business objectives. Supplemental benefits and perquisites include the following:

Automobile

We provide automobiles to executive officers for both business and personal use. The executive officers are taxed for their personal use of the automobiles.

Supplemental Executive Disability Income Program
We maintain a supplemental executive disability income program for executive officers. The supplemental executive disability income program targets replacement of 75% of total cash compensation up to $20,000 per month. The program recognizes the significant variable pay at the senior levels in the Company and the benefit limitations of our basic long-term disability plan, which provides replacement of 60% of base salary only up to $10,000 per month.
Executive Wellness Program
We offer an Executive Wellness Program to the executive officers to assist them in maintaining their health. The program pays for wellness services, which allow the executive officers an opportunity to have a clear understanding of their current physical condition, risk factors, and ways to improve their health.
Chairman’s Trip
An annual Chairman’s Trip is held for employees recognized during the year for their outstanding service, and for sales representatives meeting a certain sales target and the spouses of those employees and representatives. We believe that executive officers should be part of the trip to recognize these outstanding employees of the Company. We strongly encourage executive officers to bring their spouses to further our vision of being an employer of choice and to build relationships that contribute to retention. We pay the associated income taxes related to the trip on behalf of the employees and the executive officers.

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Club Membership
During 2015, the Company determined to discontinue paying country club memberships for executive officers, effective January 1, 2016. For 2015, the executive officers are taxed on membership dues.
Aircraft

During the first quarter of 2015, we entered into a plan to sell our aircraft and completed the sale in July 2015. In connection with the sale, perquisites relating to personal use of the aircraft and commuting on the aircraft were discontinued. Prior to the sale, the aircraft were used primarily for business purposes and for third party chartering, which helped to offset costs, and we provided access to the CEO, the president, the chief operating officer, and the executive vice president of sales and marketing for personal use. These individuals were required to reimburse the Company for the incremental cost associated with their personal use. The incremental cost was calculated by multiplying the number of hours of personal use by the average incremental cost per hour. Additionally, the CEO was not required to reimburse the Company for commuting between his primary residence in the greater Dallas area and a second residence in Arkansas and the Company’s headquarters in Houston, Texas and travel to Georgia where the Company has conference facilities. The cost of the CEO’s use of the aircraft for commuting has been included in his total compensation and was considered by the Compensation Committee when determining his compensation. Further, the CEO and other executives have responsibility for paying any income taxes associated with their personal use of the formerly owned aircraft.

Stockholder Advisory Votes

At our 2011 Annual Meeting of Stockholders, the stockholders, on an advisory basis, voted in favor of an annual advisory vote on the frequency of holding future votes to approve the compensation of the Company’s NEOs. In accordance with the stockholders’ preference, the Board has determined that the Company will hold an advisory vote on executive compensation every year. Proposal Number 2 in this proxy statement contains the resolution and supporting materials with respect to this year’s advisory vote on executive compensation.

At our 2015 Annual Meeting of Stockholders, the stockholders approved, in a non-binding advisory vote, the compensation of the Company’s NEOs, with over 88% of the votes cast in favor of such compensation. The Compensation Committee values the opinions expressed by our stockholders and considered input from stockholders, including the vote outcome, when it made compensation decisions for the executive officers for fiscal year 2016.

Role of Executive Officers and Outside ConsultantsManagement in Setting Compensation Decisions
The recommendations of the CEO play a significant role in the compensation-setting process.Compensation Committee’s determination of compensation matters related to the executive officers reporting directly to the CEO. On an annual basis, ourthe CEO makes recommendations to the Compensation Committee regarding such components as salary adjustments, target annual incentive opportunities and the value of long-term incentive awards. In making his recommendations, the CEO reviews the performance of each of our other executive officers based upon the core competencies of business ethics, continuous learning, integrity, managing customer focus, strategic thinking and visionary leadership, market data for similar positions and other factors deemed relevant in reviewing each executive’s performance, and presents to the Compensation Committee his recommendations for each executive’s compensation, including salary adjustments, incentive awards and equity award amounts.executive officer’s performance. The Compensation Committee however, has discretion to modify recommended adjustments or awards to executives. Compensation Committee meetings typically have included, fortakes the CEO’s recommendation under advisement, but makes all or a portion of each meeting, not only the Compensation Committee members but also our CEO.final decisions regarding such individual’s compensation. The CEO does not make a recommendation with respect to his own compensation. TheOur CEO typically attends Compensation Committee meetings, but he is excused from any meeting when the Compensation Committee deems it advisable to meet in executive session or when the Compensation Committee meets in executive session without management present when discussingto discuss items that would impact the CEO’s compensation. Our CEO’s compensation is reviewed and determining the compensation of the CEO. In addition,discussed by the Compensation Committee evaluates the

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and his performance of the CEOis evaluated at least annually. The Compensation Committee makes all final compensation decisions for each of our executive officers, including the CEO.

Role of the Compensation Committee in Setting Compensation

The Compensation Committee is responsible for designing, implementing and administering our executive compensation programs and, in doing so, the Compensation Committee is guided by the compensation philosophy stated above. The Compensation Committee reviews and approves total compensation for our executive officers through a comprehensive process that includes:


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•selecting and engaging an external, independent consultant;
•reviewing and selecting companies to be included in our peer group;
•reviewing market data on all major elements of executive compensation;
•reviewing alignment of executive compensation and incentive goals with stockholder value; and
•reviewing performance results against corporate, departmental and individual goals.

When reviewing and setting compensation for executive officers, the Compensation Committee also reviewed tally sheets setting forth all components of compensation for each executive officer for the previous three years. Tally sheets included dollar values for the three previous years’ salary, cash incentive awards, perquisites (cash and in-kind), long-term stock-based awards, benefits and dividends paid on unvested long-term stock-based awards. Tally sheets were used to assist the Compensation Committee in determining current compensation decisions in view of executive officers’ historical and cumulative pay.

A complete listing of our Compensation Committee’s responsibilities is included in the Compensation Committee’s charter, which is available for review on our corporate website at www.insperity.com in the Corporate Governance section under the Investor Relations tab.

Role of the Compensation Consultants in the Compensation Process

The Compensation Committee’s charter provides that it has the sole authority to retain and terminate any compensation consultant to assist in maintaining compensation practices in alignment with our compensation goals. The Compensation Committee believes that outside consultants are an efficient way to keep current on executive compensation trends and stay abreast of competitive compensation practices. The Compensation Committee has periodically engaged Pearl Meyer & Partners (“PM&P”) to conduct executive compensation studies and engaged Meridian Compensation Partners LLC (“Meridian”) for the first time in August 2015 for similar purposes. Neither PM&P nor Meridian received any remuneration from the Company, directly or indirectly, other than for advisory services rendered to, or at the direction of, the Compensation Committee or the Board. The Compensation Committee has reviewed PM&P’s independence and determined that PM&P is an independent advisor with no conflicts of interest with us (as determined under Rule 10C-1(b)(4)(i) of the Exchange Act). The Compensation Committee has also reviewed Meridian’s independence and determined that Meridian is an independent advisor with no conflicts of interest with us (as determined under Rule 10C-1(b)(4)(i) of the Exchange Act).

Assessing External Market Compensation Practices

At the direction of the Compensation Committee, we periodically conduct an executive compensation study that compares each executive officer’s compensation to market data for similar positions. The Compensation Committee determines whether the study is to be performed internally by Insperity or by an outside consulting firm that is directly engaged by the Compensation Committee. The Compensation Committee’s charter provides that it has the sole authority to retain and terminate any compensation consultant to assist in maintaining compensation practices in alignment with our compensation goals. While we believe that using outside consultants is an efficient way to keep current regarding competitive compensation practices, we do not believe that we should accord undue weight to the advice of such consultants. Accordingly, the Compensation Committee does not target our executives’ pay to any particular level (such as a target percentile) of comparative market data contained in executive compensation studies. However,studies, such data help to inform and influence pay decisions and are considered by the Compensation Committee in meeting our compensation program objectives as described above.

Compensation Peer Group

Selecting a peer group to benchmark compensation for our executives presents certain challenges, including the limited number of publicly-traded PEOs and the Company’s unique business model. As one of the largest PEO service providers in the United States, our direct PEO service competitors include TriNet Group, Inc., a national PEO, and the PEO divisions of Automatic Data Processing, Inc. and Paychex, Inc., which are significantly larger business service companies. The Compensation Committee has periodically engaged Pearl Meyer & Partners (“Pearl Meyer”) to conduct executive compensation studies. Pearl Meyerdelivery of our PEO services and strategic business unit services requires a variety of professional services, information technology services and software. These areas represent important components of our overall service offerings, and we compete for talent with many companies offering similar services or products. Our peer group includes a number of these companies. Consistent with our historical position, the Company does not receive remuneration from the Company, directlyview traditional staffing companies as competitors for business or indirectly, other than for advisory services renderedtalent and has not included such companies in our compensation peer group. We do not provide leased employees or staffing employees to or at the direction of, the Compensation Committee or the Board. The Compensation Committee has reviewed Pearl Meyer’s independenceclients, and determined that Pearl Meyer is an independent advisorin 2010 incurred significant expense and undertook significant re-branding efforts to change our name to Insperity in part to avoid any confusion with no conflicts of interest with us (as determined under Rule 10C-1(b)(4)(i) of the Exchange Act).traditional staffing companies.
Determination of Compensation Amounts and Formulas
In October 2012, Pearl Meyer2014, PM&P was engaged by the Compensation Committee to conduct an executive and director compensation study (the “2012“ Study”) as part of the process of determining 20132015 compensation. In connection with the 2012 Study, Pearl MeyerPM&P identified a peer group consisting of publicly traded companies that provide human resources and other business products and services and whose average trailing 12 months of sales revenue equated to approximately $2.5$2.3 billion (the “Compensation Peer Group”). The selection process for the

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Compensation Peer Group took into account multiple factors, including: industry (with an emphasis on outsourced human resources services, including the PEO competitors of the Company), comparable revenue range, comparability in terms of complexity and business risk, and the extent to which each company may compete with Insperity for executive talent. The Compensation Peer Group included: Automatic Data Processing, Inc., CBIZ, Inc., Cognizant Technology Solutions Corporation, Concur Technologies, Inc., Convergys Corporation, Gartner, Inc., Genpact Limited, Intuit, Inc., Korn/Ferry International, Paychex, Inc., Resources Connection, Inc., salesforce.com, inc., Towers Watson & Company, The Ultimate Software Group, Inc. and Web.com Group, Inc. The Compensation Peer Group is periodically reviewed and may be modified based on these and other relevant criteria. For 2015, the Compensation Peer Group included the following companies:
Company NameCompany Ticker
Providers of PEO ServicesAutomatic Data Processing, Inc.ADP
Paychex, Inc.PAYX
TriNet Group, Inc.TNET
IT Services and Software
Concur Technologies, Inc.1
CNQR1
Cognizant Technology Solutions CorporationCTSH
Convergys CorporationCVG
Gartner, Inc.IT
Genpact LimitedG
Intuit, Inc.INTU
Paycom Software, Inc.PAYC
The Ultimate Software Group, Inc.ULTI
Web.com Group, Inc.WWWW
Professional ServicesCBIZ, Inc.CBZ
Korn/Ferry InternationalKFY
Resources Connection, Inc.RECN
Towers Watson & CompanyTW


1
Concur Technologies, Inc. was subsequently acquired by SAP SE in December 2014.

The 2012 Study examined market compensation data for executive positions based on a combination of proxy data of the Compensation Peer Group and benchmark position compensation survey data and the results of an internal evaluation and ranking process.data. Survey sources included Pearl Meyer’sPM&P’s proprietary general executive compensation databases and other independent surveys. In addition to proxy and survey data, Pearl Meyer employed an executive ranking process to align jobs based upon internal equity or the value of positions.
In addition to comparative market data,Study conducted by PM&P, internal factors are also an important consideration when determining each executive officer’s compensation. These factors include:

 • the executive officer’s performance review conducted by either the Compensation Committee (for the CEO) or the CEO (for all other executive officers);
 • the CEO’s recommendations regarding the other executive officers;
 • the executive officer’s tenure with the Company, industry experience and ability to influence stockholder value; and
 • the importance of the executive officer’s position to the Company in relation to the other executive officer positions within the Company.
Compensation History and Mix
When reviewing and setting compensation for executive officers, the Compensation Committee also reviewed tally sheets setting forth all components of compensation for each executive officer for the previous three years. The tally sheets included dollar values for the three previous years’ salary, cash incentive awards, perquisites (cash and in-kind), long-term stock-based awards, benefits and dividends paid on unvested long-term stock-based awards. Tally sheets were used to assist the Committee in determining current compensation decisions in view of executives’ historical and cumulative pay.

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2015 Executive Compensation Decisions
Base Salary1 Changes
Base salary is intended to provide stable annual compensation to attract and retain talented executive officers. Typically, changes in base salary for each executive officer are determined based upon external market comparisons in compensation studies and the internal factors described above. Annual performance appraisals are completed through our talent management system, which evaluates the executive officer’s annual performance based on pre-established competencies and the achievement of specific individual performance goals that were generally established prior to the end of the first quarter of the year. Competencies for executive officers included business ethics, continuous learning, integrity, managing customer focus, strategic thinking and visionary leadership. Annual adjustments to base salary are based upon the annual performance evaluation, market data and other relevant considerations.
Continued strongThe Company performance and improving economic conditions permitted the Company to awardawarded merit salary increases during the first quarter of 2013. Merit salary increases during 2013 for2015 to the executive officers wereNEOs as follows:
2012 2013 20132014 2015 2015
Base Salary Base Salary IncreaseBase Salary Base Salary Increase
Chief Executive Officer and Chairman of the Board$811,500 $816,300 0.6%$850,000 $850,000 —
Chief Financial Officer, SVP of Finance and Treasurer$354,000 $378,000 6.8%$396,000 $408,000 3.0%
President$440,000 $464,000 5.5%$482,000 $494,000 2.5%
Chief Operating Officer and EVP of Client Services$440,000 $464,000 5.5%$482,000 $494,000 2.5%
EVP of Sales & Marketing$418,000 $442,000 5.7%$460,000 $472,000 2.6%
The average salary increase for the above executive officersNEOs in 20132015 was 4.8%2.1%. The increases in base salary were based on the annual performance reviews, the findings of the 2012 Compensation Study conducted by Pearl Meyer and other factors deemed relevant by the Compensation Committee.
Variable Compensation2
We believe that variable cash compensation is a key element of the total compensation of each executive officer. Such compensation embodies our pay-for-performance philosophy whereby a significant portion of executive compensation is at risk and tied to corporate, departmental and individual performance. Variable compensation for all executive officers,Committee, such as well as most other employees, is paid through the Insperity Annual Incentive Plan (“IAIP”), a non-equity incentive program under the stockholder-approved 2012 Incentive Plan (see page 20). The IAIP is intended to link executive officers’ compensation to the Company’s overall performance, as well as to each of their individualCompany performance and the performance of the departments under each of their supervision. During the first quarter of 2013, the Compensation Committee established a target bonus, stated as a percentage of base salary, for each executive officer. The ultimate general economic conditions.
IAIP bonus awarded to each executive officer was based upon the formulas, factors and components discussed below.
Target Bonus Percentage
The Compensation Committee approved the target bonus percentage for each executive officer (other than the CEO) based on the CEO’s recommendations. His recommendations took into account the executive officer’s level of responsibility, market conditions and internal equity considerations. The Compensation Committee also evaluated the foregoing factors in determining the CEO’s target bonus percentage. Because executive officers are in a position to directly influence the overall performance of the Company, and in alignment with our pay-for-performance philosophy, we believe that a significant portion of their total cash compensation should be at risk. Therefore, most executive officers were granted a target bonus percentage equal to their base salary. The CEO, the individual with the greatest overall responsibility for Company performance, was granted a larger incentive opportunity in comparison to his base salary in order to weight his overall pay mix even more heavily towards performance-based compensation.compensation than the overall pay mix of the other executive officers. The Chief Financial Officer,CFO, who had less responsibility for overall Company operating performance relative to other executive officers,NEOs, was granted a smaller incentive opportunity in comparison to his base salary in order to weight his overall pay mix less heavily towards performance-based compensation.compensation than the overall pay mix of the other NEOs. For 2013,2015, the Compensation Committee set a target for variable compensation that was computedthe annual incentive targets as a percentage of each executive officer’sNEO’s base salary as follows: 
____________________
1

See “Salary” included in the Summary Compensation Table on page 24.
2

See “Non-Equity Incentive Plan Compensation” included in the Summary Compensation Table on page 24. In addition, see “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” in the Grants of Plan-Based Awards Table on page 25.

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Target Bonus
Percentage under IAIP
Chief Executive Officer and Chairman of the Board120%130%
Chief Financial Officer, SVP of Finance and Treasurer85%
President100%
Chief Operating Officer and EVP of Client Services100%
EVP of Sales & Marketing100%
Calculation and Weighting of Performance Components
For 2013,2015, the targeted variable compensation under the IAIP for the CEO was based on corporate and individual performance components and for all other executive officers was based on corporate, departmental and individual performance components. As described in further detail below, corporate performance goals for 20132015 were based on operating income per worksite employee per month (“OIPE”OI”), year-over-year growth in the number of paid worksite employees (“NPWE”PWEE Growth”) and gross profit contributionoperating expense management (“GPC”OEM”). For the CEO, variable compensation was heavily weighted toward corporate performance to align his IAIP bonus with Company-wide performance. For all executive officers, 20% was weighted toward individual performance to reflect their individual performance during the year, as determined through the annual performance appraisal process as discussed above. A departmental component was included in the IAIP bonus of each executive officer (other than the CEO) to encourage him to provide effective leadership to the departments under his supervision, as well as to align the interests of the executive with those of the employees that he supervises. Each performance component is determined separately and is not dependent on the other components, except that if an executive officer’s individual performance rating is below the threshold, then he receives no IAIP bonus, regardless of corporate and departmental performance. Each executive officer’s IAIP bonus is the sum of the result of each performance component.


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Each performance component was designated a weightingweighted for each executive officerNEO as follows:

                      
  Corporate Performance       
  OIPE  NPWE  GPC  Departmental  Individual  
Chief Executive Officer and Chairman of the Board 24%  24%  32%   0%  20%  
Chief Financial Officer, SVP of Finance and Treasurer 15%  15%  20%   30%  20%  
President 18%  18%  24%   20%  20%  
Chief Operating Officer and EVP of Client Services 18%  18%  24%   20%  20%  
EVP of Sales & Marketing 18%  18%  24%   20%  20%  
OIPE Corporate Component
  Corporate Performance    
  OI PWEE Growth OEM Departmental Individual
Chief Executive Officer and Chairman of the Board 32% 32% 16% 0%  20%
Chief Financial Officer, SVP of Finance and Treasurer 20% 20% 10% 30%  20%
President 24% 24% 12% 20%  20%
Chief Operating Officer and EVP of Client Services 24% 24% 12% 20%  20%
EVP of Sales & Marketing 24% 24% 12% 20%  20%

For the last several years, we2015 Corporate Performance Goals
OI Corporate Component

We have chosenconsistently included a measure of operating income per worksite employee as one of the metrics for measuringour corporate performance goals because we believe it is a key indicator of our overall productivity; effective management of pricing, direct costs and operating expenses; and ability to grow the business while favorably balancing profitability. We also believe that this metric reflects the combined contribution of all departments and encourages collaboration across the organization because each department within the Company can have a direct impact on corporate performance as measured according to this metric. The formula for measuring the OIPEOI corporate performance component of the IAIP bonus for each executive officerNEO was determined as follows:

Annual
Salary ($)
 X 
Target
Bonus (%)
 X 
Individual
Weighting of OIPEOI
Corporate
Component (%)
 X 
OIPEOI Corporate
Performance
Modifier
(0%-150%)
 = 
OIPE
OI Corporate
Component
Payout ($)
 

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The OIPEOI Corporate Performance Modifier was determined as follows:
Performance Level 2013 OIPE 
OIPE Corporate
Performance Modifier
Below Threshold Less than $50     0%
Threshold $50 50%
Target $53 100%
Stretch Goal $57 130%
Maximum $62 150%
Performance Level2015 OI
OI Corporate
Performance Modifier
Below ThresholdLess than $80.1 million0%
Threshold$80.1 million50%
Target$85.9 million100%
Stretch$91.0 million125%
Maximum$97.2 million150%
If 2013 OIPE2015 OI (excluding total incentive compensation expense, operating expenses related to acquisition activity in 20132015 and extraordinary, unusual or infrequent items, if applicable) was below the threshold, then the OIPEOI Corporate Performance Modifier waswould be 0%, resulting in an OIPEOI corporate component payout of $0. The OIPEOI Corporate Performance Modifier would be interpolated if actual performance fell in between the threshold, target, stretch goal or maximum performance level.
The Company’s 2013 OIPE fell below the threshold.2015 OI, plus (i) incentive compensation expense; and (ii) non-cash impairment charges of $10.5 million, was $99.7 million. Based on this performance, the Compensation Committee determined the OIPEOI Corporate Performance Modifier to be 0%150% for each executive officer. Accordingly, no executive officer received compensation for this corporate performance goal.NEO.
NPWEPWEE Growth Corporate Component
We also chose the year-over-year growth percentage in the number of paid worksite employees, as a measure of2015 corporate performance goal. We included this as a component in order to focus all of our employees on growing our business. TheIncreasing the number of paid worksite employees is a key metric for measuring the success of our sales operations and client retention efforts and is a significant driver in our overall growth and performance. This performance goal also encouraged collaboration among all employees Company wideemployees to increase the number of paid worksite employees.

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The formula for measuring the NPWEPWEE Growth corporate performance component of the IAIP bonus for each executive officerNEO was determined as follows:
Annual
Salary
($)
 X 
Target
Bonus (%)
 X 
Individual
Weighting of NPWEPWEE
Growth Corporate
Component (%)
 X 
NPWEPWEE Growth Corporate Performance
Modifier
(0%-150%)
 = 
NPWEPWEE Growth
Corporate Component
Payout ($)
 

The NPWEPWEE Growth corporate component of IAIP bonuses consisted of three different metrics with the final payout amount being based upon the metric that produced the greatest percentage payout of the target bonus.

PWEE Growth Metric 1

Performance Level
 

Q1 Year-over-Year Growth Percentage
 

Q2 Year-over-Year Growth Percentage
 

Q3 Year-over-Year Growth Percentage
 

Q4 Year-over-Year Growth Percentage
 
PWEE Growth Corporate
Performance Modifier
Threshold 8.7% 9.3% 9.5% 9.5% 50%
Target 9.7% 10.3% 10.6% 10.6% 100%
Stretch 10.7% 11.3% 11.7% 11.7% 125%
Maximum 11.6% 12.4% 12.7% 12.7% 150%

The calculation of PWEE Growth for purposes of Metric 1 was based ondetermined each calendar year quarter, by taking the three (3) month average of the number of paid worksite employees for each calendar year quarter, and calculating the year-over-year growth in the number of paid worksite employees, expressed as a percentage. Each calendar year quarter for 2015 had a 25% weighting towards the Metric 1 percentage payout of target bonus.

PWEE Growth Metric 2
Performance Level 
Calendar Year
Year-over-Year
Growth Percentage
 
PWEE Growth Corporate
Performance Modifier
Threshold 9.0% 50%
Target 10.0% 100%
Stretch 12.0% 125%
Maximum 14.0% 150%

The calculation of PWEE Growth for purposes of Metric 2 was determined by calculating the year-over-year growth in the number of paid worksite employees for calendar year 2015, expressed as a percentage.

PWEE Growth Metric 3
Performance Level 
January 31, 2016
Year-over-Year
Growth Percentage
 
PWEE Growth Corporate
Performance Modifier
Threshold 9.0% 50%
Target 10.0% 100%
Stretch 12.0% 125%
Maximum 14.0% 150%

The calculation of PWEE Growth for purposes of Metric 3 was determined by calculating the year-over-year growth in the number of paid worksite employees in January 2014, which would2016, expressed as a percentage. For PWEE Growth Metric 3, we include the number of paid worksite employees for January 2016 in the performance period to reflect the net impact of sales and client retention during 2013, including the results of our annual Fall Sales Campaign and significant year-end client renewal period.
The NPWE Corporate Performance Modifier was determined as follows:
     
Performance Level Worksite Employees Paid in January 2014 
NPWE Corporate
Performance Modifier
Below Threshold Less than 134,000   0%
Threshold 134,000 50%
Target 136,000 100%
Stretch Goal 138,000 130%
Maximum 140,000 150%
If the number of worksite employees paid in January 2014calculated as described above was below the threshold for all three metrics, then the NPWEPWEE Growth Corporate Performance Modifier waswould be 0%, resulting in a NPWEPWEE Growth corporate component payout of $0. The NPWE

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PWEE Growth Corporate Performance Modifier would be interpolated if actual performance for one of the metrics fell in between the threshold, target, stretch goal or maximum performance level.
TheDuring the performance period, the year-over-year growth percentage in the number of worksite employees paid in January 2014 fell below the threshold.was highest for PWEE Growth Metric 3 and was 14%. Based on this performance, the Compensation Committee determined the NPWEPWEE Growth Corporate Performance Modifier to be 0%150% for each executive officer. Accordingly, no executive officer received compensation for thisNEO.
OEM Corporate Component
We also included OEM as a 2015 corporate performance goal.

18
Table While OEM is a factor in the calculation of Contents


GPCoperating income (OI Corporate Component
In 2013,Component), we also included gross profit contribution asbelieved that a separate corporate performanceheightened focus on financial stewardship throughout the entire Company was warranted, and that successful achievement of this goal would require the combined focus and effort of employees across all departments and help create value for targeted variable compensation under the IAIP. Gross profit contribution is an important measure of Company performance as it is primarily determined by our ability to grow revenue and manage pricing and direct costs.stockholders.
The formula for measuring the GPCOEM corporate performance component of the IAIP bonus for each executive officerNEO was determined as follows:
                  
Annual
Salary
($)
 X 
Target
Bonus
(%)
 X 
Individual
Weighting of GPCOEM
Corporate Component
(%)
 X 
GPCOEM
Corporate Performance
Modifier
(0%-150%)
 = 
GPCOEM
Corporate
Component
Payout ($)
 
The GPCOEM Corporate Performance Modifier was determined as follows:
Performance Level Gross Profit 
GPC Corporate
Performance Modifier
Below Threshold Less than $403,350,000   0%
Threshold $403,350,000 50%
Target $408,389,000 100%
Stretch Goal $414,350,000 130%
Maximum $421,345,000 150%
Performance LevelOperating Expenses
OEM Corporate
Performance Modifier
Above ThresholdIn excess of $353.6 million  0%
Threshold$353.6 million50%
Target$352.6 million100%
Stretch$351.6 million125%
Maximum$351.1 million150%

If 2013 gross profit contribution2015 operating expenses (excluding gross profittotal incentive compensation expense, operating expenses related to acquisition activity in 20132015, and extraordinary, unusual or infrequent items, if applicable) was belowapplicable, including non-cash impairment charges, stock-based compensation expense, professional advisory fees for stockholder matters, litigation settlements and the associated legal fees, and changes in statutory tax rates and assessments) were above the threshold, the GPCOEM Corporate Performance Modifier waswould be 0%, resulting in a GPCan OEM Corporate Component payout of $0. The GPCOEM Corporate Performance Modifier would be interpolated if actual performance fell in between the threshold, target, stretch target or maximum performance levels.

The Company’s 2013 gross profit contribution fell below2015 operating expenses, excluding (i) incentive compensation expense; (ii) non-cash impairment charges of $10.5 million; and (iii) stockholder advisory expenses of $1.5 million, were $338.7 million. Because operating expenses were less than the threshold. Based on thismaximum performance threshold of $351.1 million, the Compensation Committee determined the GPCapproved an OEM Corporate Performance Modifier to be 0%of 150% for each executive officer. Accordingly, no executive officer received compensation for this corporate performance goal.NEO.

Departmental Component
The formula for measuring the departmental performance component of the IAIP bonus for each executive officer (other than the CEO who has no departmental component included in his IAIP bonus) was as follows:
                  
Annual
Salary
($)
 X 
Target
Bonus
(%)
 X 
Individual
Weighting of
Departmental
Component (%)
 X 
Departmental
Performance
Modifier
(0%-100%)
 = 
Departmental
Component
Payout ($)
 
The goals were developed by each department and were designed to encourage employees to work together to continue making business improvements and to increase efficiency, productivity and collaboration across the organization. All departmental goals were approved by the CEO. As part of our continued focus on managing operating expenses, we did not include a stretch goal

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or maximum performance level for 2013;2015; therefore, the target level also constituted the maximum level achievable for IAIP bonus purposes. The Departmental Performance Modifier for all executive officers can range from 0% to 100% based on the achievement of departmental goals. If departmental performance was below the threshold, the Departmental Performance Modifier waswould be 0%, resulting in a departmental component payout of $0. The nature of the departmental goals and objectives for each executive officerNEO was as follows: 

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  Nature of Goals and Objectives
  
Chief Financial Officer,
    SVP of Finance
    and Treasurer
 Effective management of operating expenses; implementation of Company real estate strategy including effective and efficient management of Company occupancy; timely due diligence and integration of acquisitions; successful completion of internal audit projects; quality of internal controls; and successful credit management efforts.
  
President Effective client pricing and renewal activities; effective operating expense management; successful negotiation of certain insurance policies and third party contracts; development and implementation of health care reform initiatives and strategy;initiatives; achievement of adjacentstrategic business unit financial metrics; effective process and technology enhancements; and successful implementation of certain pricing initiatives; and development of new service and package offerings for clients.initiatives.
  
Chief Operating Officer and
    EVP of Client Services
 Effective client satisfaction and retention; achievement of adjacentstrategic business unit financial metrics; development of Company training and leadership programs; effective operating expense management; successful implementation of information technology initiatives; and development, implementation and rollout of certain adjacentdata management and strategic business unit initiatives.
  
EVP of Sales & Marketing Effective marketing initiatives; successful new sales results; effective operating expense management; effective client satisfaction;expansion of sales force; successful implementation of training and sales lifecycle programprograms; and effective Company community involvement.
In light of the CEO’s assessment of the executive officers’other NEOs’ performance against the achievement of their departmental goals, the average Departmental Performance Modifier for the executive officersother NEOs in 20132015 was 94%95.5%.
Individual Component
The formula for measuring the individual performance component of the IAIP bonus for each executive officer was as follows:
Annual
Salary ($)
 X 
Target
Bonus (%)
 X 
Weighting of
Individual
Component (%)
 X 
Individual
Performance
Modifier
(0%-150%)
 = 
Individual
Component
Payout ($)
 
The Individual Performance Modifier for all executive officers can range from 0% to 150% based on the executive officer’s individual performance rating resulting from the annual performance appraisal process, as described on page 16 under “Base“— Base Salary.” Based on the executives’NEOs’ individual performance ratings, the average Individual Performance Modifier for the executive officersNEOs was 134%136%.
The Compensation Committee reserves the right to pay discretionary bonuses to executive officers outside of the IAIP. While the Compensation Committee may exercise such discretion in appropriate circumstances, no executive officer has a guaranteed right to a discretionary bonus as a substitute for a performance-based bonus under the IAIP in the event that performance targets are not met. During 2013, no discretionary bonuses werehave been awarded to executive officers.NEOs in recent years.
Long-Term Incentive Compensation
Long-term equity incentives align the interests of the executive officers with those of the stockholders. We believe that long-term incentives enhance retention while rewarding executive officers for their service. For 2013, long-term incentive compensation for executive officers was awarded under the stockholder-approved Insperity, Inc. 2012 Incentive Plan, as amended (“2012 Incentive Plan”). At the 2012 Annual Meeting, stockholders approved the 2012 Incentive Plan, which replaced the 2001 Incentive Plan and reserved additional shares for issuance. Awards previously issued under the 2001 Incentive Plan continue to be governed by the terms of that plan. The objectives of the Incentive Plans are:
•to provide incentives to attract and retain persons with training, experience and ability to serve as our employees;
•to promote the interests of the Company by encouraging employees to acquire or increase their equity interest in the Company;
•to provide a means whereby employees may develop a sense of proprietorship and personal involvement in the development and financial success of the Company; and
•to encourage employees to remain with and devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its stockholders.

20
Table of Contents2015 Equity Grants


Awards granted under the Incentive Plans have historically been made in the form of stock options or restricted stock. The Incentive Plans do not require a holding period for stock options, restricted stock or other awards, beyond the vesting date provided for in the award agreement. Pursuant to the terms of the 2012 Incentive Plan, future awards may include phantom shares, performance units, bonus stock or other incentive awards. We may periodically grant new stock options, restricted stock, or other long-term incentives to provide continuing incentive for future performance. The award size and recipients of awards arewere determined by the degree to which a particular position in the Company has the ability to influence stockholder value.
In recent years, we have awarded restricted stock rather than stock options. We believe the current accounting treatment of restricted stock more closely reflects the economic value, of the award to the employees as compared to that of stock options. We anticipate continuing to utilize restricted stock with a three-year vesting schedule with no additional holding period required beyond the vesting date. The awards are valued using the closing price of the Company’s stock on the grant date.
well as competitive information provided in benchmarking studies. In February 2013,2015, the CEO presented to the Compensation Committee his recommendations for awards of restricted stock for the other executive officers. His recommendations as to the amount of awards to be granted were based on a number of factors, including, the performance of each executive officer, the importance of each executive officer’s role in the Company’s future business operations, equity pay practices of competitor companies, annual expense to the Company of equity awards and the Company’s own past practices in granting equity awards. The Compensation Committee then determined and approved the awards for the executive officers, including the CEO, based upon the above noted factors. 1 For 2015, NEOs were granted the following restricted stock awards:
In February 2013, the Company amended the terms

31
Table of the 2012 Incentive PlanContents


Name Shares of Restricted Stock 
Grant Date Value of Restricted Stock1
Paul J. Sarvadi 20,400
 $1,051,416
Douglas S. Sharp 8,000
 $412,320
Richard G. Rawson 14,000
 $721,560
A. Steve Arizpe 14,000
 $721,560
Jay E. Mincks 14,000
 $721,560


1
The fair market value of one share of the Common Stock on the grant date was $51.54.

The restricted stock awards are all subject to provide that future awards granted to executive officers willa three-year ratable annual vesting schedule and all NEO grants include a “double trigger” requirement in the case of a “change in control” of the Company as definedCompany.

In March 2015, the Compensation Committee decided to grant awards under the Plan.LTIP (“2015 LTIP Awards”) to the NEOs and certain other officers. In granting the 2015 LTIP Awards, the Compensation Committee determined that long-term incentive compensation awards would be allocated between performance awards and time-vested restricted stock on approximately a 60% and 40% basis for the CEO, a 35% and 65% basis for the CFO, and a 45% and 55% basis for the remaining NEOs. The impositionperformance period for the 2015 LTIP Awards includes calendar years 2015-2017, with each year being equally weighted for one-third of the double trigger means that awards granted to executive officers will no longer immediately vest following a changetarget opportunity. The 2015 LTIP Awards are payable in control. Under the double trigger, the conditions and/or restrictions that must be metshares of Common Stock and include dividend equivalents, payable in additional shares of Common Stock, with respect to vesting or exercisability of future awards granted to an executive officer will lapse only after a “qualifying termination” within a prescribedthe number of months following a change in control.phantom shares actually earned pursuant to the 2015 LTIP Awards if and to the extent dividends are paid on Common Stock during the performance period.
We have no program, plan or practice to time the grant
The aggregate number of stock-based awards in coordination with the release of material non-public information. All equity grants to executive officers are approved solely2015 LTIP Awards granted by the Compensation Committee orto each NEO if all of the independent directorsannual target performance metrics are achieved was as follows:
  
Aggregate Number of
Performance Shares
(at Target)
 
Grant Date Value of
Performance Shares1
(at Target)
Chief Executive Officer and Chairman of the Board 30,350
  $1,602,480 
Chief Financial Officer, SVP of Finance and Treasurer 5,300
  $279,840 
President 11,350
  $599,280 
Chief Operating Officer and EVP of Client Services 11,350
  $599,280 
EVP of Sales & Marketing 11,350
  $599,280 


1
The 2015 LTIP Awards do not have an exercise price. The fair market value of one share of the Common Stock on the grant date was $52.80. The grant date fair value of the 2015 LTIP Awards assuming achievement of the maximum level of performance are: Mr. Sarvadi - $3,204,960; Mr . Sharp - $559,680; Mr. Rawson - $1,198,560; Mr. Arizpe - $1,198,560; and Mr. Mincks - $1,198,560.

The performance metric for the 2015 LTIP Awards is tied to achieving increased levels of EBITDA, taking into account certain pre-defined adjustments during the performance period, with vesting occurring at regularly scheduled meetings, or in limited cases involving key recruits or promotions, by a special committee, special meeting, or unanimous written consent. If an award is made at a meeting, the grant date isend of the meeting date or a fixed, future date specifiedthree-year performance period. The Company’s EBITDA performance metric will be measured annually against performance levels established at the time of grant. Recipients can earn 50% of the grant, suchtarget number of phantom shares if the threshold performance level is achieved and can earn up to 200% of the target number of phantom shares if the maximum performance level is achieved. The first year of the 2015 LTIP Awards is subject to achievement of the EBITDA performance metrics and corresponding performance level payout percentages as follows:
Performance Level 
2015 EBITDA
 Performance Objective
 (in millions)
 Payout Percentage
Below Threshold Less Than $101 0%
Threshold $101 50%
Target $103 100%
Maximum $118 200%


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If the EBITDA performance metric for a performance period falls below the threshold level, no performance shares will be credited for the performance period. If actual performance results fall between the threshold, target and maximum performance levels, the number of performance shares earned will be determined by interpolation between the applicable performance levels. For purposes of the 2015 LTIP performance metric, EBITDA was adjusted for non-cash impairment charges, stock-based compensation expense, professional advisory fees for stockholder matters, litigation settlements and the associated legal fees, and changes in statutory tax rates and assessments. EBITDA was also adjusted to exclude the impact of any divestitures, acquisitions or change in accounting pronouncement that occurs during the performance period.

For purposes of the 2015 LTIP Awards, the Compensation Committee certified adjusted EBITDA of $110.0 million for the 2015 performance period. After interpolation, the Compensation Committee determined the LTIP performance modifier to be 145% for the first business dayone-third tranche of a subsequent calendar month or the date that2015 LTIP Award. To receive the grant recipient commences employment. If an award is approved by unanimous written consent,awards, the grant date is a fixed, future date on or afterrecipients must remain continuously employed throughout the entire three-year performance period and as of the date the consent is effectiveCompensation Committee certifies the final results, with limited exceptions for death, disability or change in control.

2016 Equity Grants

In March 2016, the Compensation Committee granted awards under applicable corporate law (or, if later, the dateLTIP (“2016 LTIP Awards”) to the grant recipient starts employment),NEOs and certain other officers. In granting the 2016 LTIP Awards, the Compensation Committee further decreased the long-term incentive weighting of the time vested restricted stock and increased the weighting assigned to performance awards for the recipients of those awards. For 2016, the long-term incentive compensation awards were allocated between performance awards and time-vested restricted stock on approximately a 70% and 30% basis for the CEO, a 50% and 50% basis for the CFO, and a 60% and 40% basis for the remaining NEOs. In establishing the performance metrics for the 2016 LTIP Awards, the Compensation Committee retained a metric tied to achieving increased levels of EBITDA with certain pre-defined adjustments, but also added a relative total shareholder return metric (“RTSR”) to further align the long-term financial interests of the executive officers and the exercise price, inCompany’s shareholders. RTSR will be measured over the caseentire 2016-2018 performance period against the performance of a stock option, is21 peer companies that the closing price of Company stock on such date. UnderCompensation Committee designated as the termsCompany’s 2016 compensation peer group. The 2016 LTIP Awards are weighted at 60% for the EBITDA performance metric and 40% for the RTSR performance metric. The performance period for the EBITDA portion of the Incentive Plans,2016 LTIP Awards includes calendar years 2016-2018, with each year being equally weighted for one-third of the exercise pricetarget opportunity. The 2016 LTIP Awards are payable in shares of stock options cannot be less thanCommon Stock and include dividend equivalents, payable in additional shares of Common Stock, with respect to the closing price of Company stock on the date of grant. The Incentive Plans prohibit stock options from being re-priced or exchanged for a cash buy-out or settlement with a lower exercise price, without prior stockholder approval.
Supplemental and Special Benefits, Including Management Perquisites2
Executive compensation also includes supplemental benefits and a limited number of perquisites that enhance our abilityphantom shares actually earned pursuant to attractthe 2016 LTIP Awards if and retain talented executive officers. We believe that perquisites assist into the operationextent dividends are paid on Common Stock during the performance period.

The aggregate number of business, allowing executive officers more time2016 LTIP Awards granted by the Compensation Committee to focus on business objectives. Supplemental benefits and perquisites include the following:
401(k) Benefits
We do not provide pension arrangements, post-retirement health coverage or nonqualified defined contribution or other deferred compensation plans for our executive officers. Our executive officers are eligible to participate in Insperity’s corporate 401(k) plan. Each payroll period, we contribute on behalf of each participant a matching contribution equal to 50%NEO if all of the first 6% of compensation contributed by the participant to the plantarget performance metrics are achieved was as elective deferrals (subject to applicable limitations under the Internal Revenue Code). All of our executive officers participated in the Insperity 401(k) plan during 2013 and received matching contributions, which are included under the caption “All Other Compensation” in the Summary Compensation Table on page 24.follows:
________________
Aggregate Number of Performance Shares 1
(at Target)
Chief Executive Officer and Chairman of the Board36,345
See “Stock Awards” included in the Summary Compensation Table on page 24. In addition, see “All Other Stock Awards” included in the Grants of Plan-Based Awards Table on page 25.
2
Chief Financial Officer, SVP of Finance and Treasurer		6,580
See “All Other Compensation” included in the Summary Compensation Table on page 24.
President11,880
Chief Operating Officer and EVP of Client Services11,880
EVP of Sales & Marketing11,880


1     The 2016 LTIP Awards do not have an exercise price.

Recipients can earn 50% of the target number of phantom shares if the threshold performance level is achieved and can earn up to 200% of the target number of phantom shares if the maximum performance level is achieved. If the performance metric for a performance period falls below the threshold level, no performance shares will be credited for the performance period. If actual performance results fall between the threshold, target and maximum performance levels, the number of performance shares earned will be determined by interpolation between the applicable performance levels.


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Employee Stock Purchase Plan
The Company maintains an Employee Stock Purchase Plan (“ESPP”) which is intended to qualify for favorable tax treatment under Section 423 of the Internal Revenue Code. All employees, including executive officers (other than 5% owners of the Company), are eligible to participate in the ESPP. Under the ESPP, employees may purchase shares of Company stock through payroll deductions at a discount currently set at 5% of market value. The offering periods under the ESPP are limited to three- or six-months in duration. Employees are limited to a maximum payroll deduction of up to a specified percentage of eligible compensation and may not purchase more than $25,000 in shares each calendar year under the ESPP.
Automobile
We provide automobiles to executive officers for both business and personal use. The executive officers are taxed for their personal use of the automobile.
Supplemental Executive Disability Income Plan
We maintain a supplemental executive disability income plan for executive officers and a small group of upper management employees. The supplemental executive disability income plan targets replacement of 75% of total cash compensation up to $20,000 per month. The plan recognizes the significant variable pay at the senior levels in the Company and the benefit limitations of our basic long-term disability plan, which provides replacement of 60% of base salary only up to $10,000 per month.
Executive Wellness Plan
We offer an Executive Wellness Plan to the executive officers to assist them in maintaining their health. The plan pays for wellness services, which allow the executive officers an opportunity to have a clear understanding of their current physical condition, risk factors, and ways to improve their health.
Chairman’s Trip
An annual Chairman’s Trip is held for employees recognized during the year for their outstanding service, and for sales representatives meeting a certain sales target. We believe executive officers should be part of the trip to recognize these outstanding employees of the Company. Therefore, we provide the opportunity for all executive officers and their spouses to attend the Chairman’s Trip. We pay the associated income taxes related to the trip on behalf of the employees and the executive officers.
Club Membership
We pay country club memberships for executive officers. We believe club memberships provide an opportunity to build business and client relationships while also promoting a healthy lifestyle for each executive officer. Executive officers are taxed on membership dues.
Aircraft
We provide access to the Company-owned aircraft to the CEO, the president, the chief operating officer, and the executive vice president of sales and marketing for personal use. These individuals are required to reimburse the Company for the incremental cost associated with their personal use of the aircraft. The incremental cost is calculated by multiplying the number of hours of personal use by the average incremental cost per hour. The CEO is not required to reimburse the Company for commuting between his primary residence in the greater Dallas area and a second residence in Arkansas and the Company’s headquarters in Houston, Texas and travel to Georgia where the Company has conference facilities.1 We think that the CEO’s access to Company-owned aircraft under these circumstances greatly enhances his productivity and work-life balance given the demands of his position and outweighs the expense of such travel to the Company. The CEO and other executives are responsible for paying any income taxes associated with the personal use of the aircraft.
Other Personal Benefits
Periodically, executive officers and other employees attend Company-related activities, such as professional sporting events or out-of-town business meetings and events, for which the Company incurs travel and other event-related expenses. Such events may include the spouses of the executives. We pay the associated income taxes related to these Company-related activities on behalf of executive officers and other employees.
_________________
1

The associated incremental cost of personal travel is reflected in “All Other Compensation” included in the Summary Compensation Table on page 24.

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Table of ContentsPolicies


Other Policies
Stock Ownership Guidelines

To further align the interests of the CEO and non-employee directors with those of our stockholders, the Board has adopted stock ownership guidelines for the Company. The stock ownership guidelines provide that the CEO is required to own three times his annual base salary in Company Common Stock and all non-employee directors are required to own three times their annual cash retainer in Company Common Stock. Stock ownership includes direct stock ownership but does not include unvested stock awards or unexercised stock options. The Company annually monitors and calculates the stock ownership level of each individual, and each individual has five years to meet the applicable ownership requirements. The CEO is in compliance and theeach non-employee directors aredirector is in compliance or is expected to be in compliance within the applicable time period.

Employment Agreements, Post-Employment and Change in Control Compensation

Our executive officers are employed at will and none have an employment agreement. In 2013,2015, no executive officersNEOs departed from the Company. We do not provide the executive officers with any kind of contractual severance. Beginning in 2013, equityEquity awards granted to executive officers do not automatically accelerate upon a change in control. Rather such awards contain a “double trigger” requiring a qualifying termination within a prescribed number of months following the change in control in order to accelerate vesting. All outstanding equity awards held by NEOs are subject to the double trigger requirement.

Incentive Compensation Recoupment Policy (“Clawback Policy”)

In February 2014, the boardBoard adopted a recoupment policy for incentive compensation paid to executive officers and other employees. The policyClawback Policy authorizes the Company to recover excess incentive compensation paid to an executive officer who engaged in, or was aware of and failed to report, fraud or misconduct which results in a restatement of the Company’s financial statements. Incentive compensation paid under the IAIP and LTIP is subject to the Clawback Policy.
Risk Assessment

The Company conducted an assessment of our compensation programs and practices for its employees and determined that there are no risks arising from such compensation programs and practices that are reasonably likely to have a material adverse effect on the Company.

Deductibility of Compensation

Section 162(m) of the Internal Revenue Code imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the Company’s principal executive officer or any of the Company’s three other most highly compensated executive officers employed as of the end of the year (other than the principal executive officer or the principal financial officer). This limitation does not apply to compensation that is paid only if the executive’sexecutive officer’s performance meets pre-established objective goals based on performance criteria approved by stockholders. We strive to take action, where possible and considered appropriate, to preserve the deductibility of compensation paid to the Company’s executive officers. We have also awarded compensation that might not be fully tax deductible when such grants were nonetheless in the best interest of the Company and its stockholders. Subject to the requirements of Section 162(m), the Company generally will be entitled to take tax deductions relating to compensation that is performance-based, which may include cash incentives, stock options and other performance-based awards.


COMPENSATION COMMITTEE REPORTCompensation Committee Report
We have reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management. Based on such review, we recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement for filing with the SEC.
The foregoing report is provided by the following directors, who constituteare members of the Compensation Committee:
COMPENSATION COMMITTEE
Eli Jones, ChairmanChairperson
Jack M. Fields, Jr.Michael W. Brown
Gregory E. PetschPeter Feld


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Table of Contents


Compensation Committee Interlocks and Insider Participation

During 2015, Dr. Jones and Messrs. Brown and Feld served on the Compensation Committee. None of the members of the Compensation Committee is currently or has been at any time one of our officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of the Board or the Compensation Committee.

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Table of Contents


SUMMARY COMPENSATION TABLE
The table below summarizes the total compensation paid or earned by the Company’s CEO, chief financial officer and each of the three other most highly compensated executive officers of the Company (collectively the “NEOs”) for services rendered in all capacities to the Company during 20132015, 20122014 and 20112013. The Company has not entered into any employment agreements with any of the NEOs.
The compensation plans under which the grants in the following tables were made are generally described in the Compensation Discussion and Analysis beginning on page 13,section, and include the IAIP, a non-equity incentive plan, the 2001 Incentive Plan and the 2012 Incentive Plan, which provide for, among other things, restricted stock grants.
grants and LTIP performance awards.
Name and
Principal Position		 Year   Salary
($)		 
Stock
Awards
($) 1 
 
Non-Equity Incentive
Plan Compensation
($) 2 
 
All Other Compensation
($) 3
 Total
($)
Paul J. Sarvadi, 2013 816,300
 1,167,600
 283,815
 570,406
 2,838,121
CEO and Chairman of the Board 2012 811,500
 1,080,640
 747,220
 576,957
 3,216,317
 2011 766,000
 1,236,900
 858,824
 416,193
 3,277,917
Douglas S. Sharp, 2013 378,000
 408,660
 181,352
 79,018
 1,047,030
CFO, SVP of Finance and Treasurer 2012 354,000
 368,400
 235,547
 111,298
 1,069,245
 2011 330,000
 530,100
 255,753
 55,574
 1,171,427
Richard G. Rawson, 2013 464,000
 700,560
 220,948
 159,464
 1,544,972
President 2012 440,000
 690,750
 356,343
 316,077
 1,803,170
  2011 422,000
 795,150
 396,138
 177,685
 1,790,973
A. Steve Arizpe, 2013 464,000
 700,560
 208,059
 126,649
 1,499,268
COO and EVP of Client Services 2012 440,000
 690,750
 362,465
 180,598
 1,673,813
 2011 422,000
 795,150
 389,445
 125,920
 1,732,515
Jay E. Mincks, 2013 442,000
 700,560
 173,570
 107,908
 1,424,038
EVP of Sales & Marketing 2012 418,000
 690,750
 322,626
 163,378
 1,594,754
 2011 393,000
 795,150
 360,810
 89,867
 1,638,827
Name and Principal Position Year   Salary
($)		 
Stock
Awards
($)1
 
Non-Equity Incentive
Plan Compensation
($)2
 
All Other Compensation
($)3
 Total
($)
Paul J. Sarvadi,
    CEO and Chairman of the Board
 2015 850,000 2,653,896
 1,657,500
 240,522
 5,401,918
 2014 850,000 1,096,000
 988,637
 497,445
 3,432,082
 2013 816,300 1,167,600
 283,815
 570,406
 2,838,121
Douglas S. Sharp,
    CFO, SVP of Finance and Treasurer
 2015 408,000 692,160
 455,705
 78,204
 1,634,069
 2014 396,000 383,600
 331,572
 124,805
 1,235,977
 2013 378,000 408,660
 181,352
 79,018
 1,047,030
Richard G. Rawson,
    President
 2015 494,000 1,320,840
 678,188
 109,064
 2,602,092
 2014 482,000 657,600
 464,087
 237,696
 1,841,383
 2013 464,000 700,560
 220,948
 159,464
 1,544,972
A. Steve Arizpe,
    COO and EVP of Client Services
 2015 494,000 1,320,840
 672,282
 113,514
 2,600,636
 2014 482,000 657,600
 467,921
 224,498
 1,832,019
 2013 464,000 700,560
 208,059
 126,649
 1,499,268
Jay E. Mincks,
    EVP of Sales & Marketing
 2015 472,000 1,320,840
 615,902
 81,965
 2,490,707
 2014 460,000 657,600
 437,296
 211,367
 1,766,263
 2013 442,000 700,560
 173,570
 107,908
 1,424,038


1 
The amounts in this column represent the aggregate grant date fair value of restricted stockawards granted in the year indicated.indicated and includes time-vested restricted stock and the 2015 LTIP Awards. The grant value of the 2015 LTIP Awards is shown at target. Actual awards may range from 0% to 200% of the target number of phantom shares if the maximum performance level is achieved. The grant date fair value of the 2015 LTIP Awards assuming achievement of the maximum level of performance are: Mr. Sarvadi - $3,204,960; Mr . Sharp - $559,680; Mr. Rawson - $1,198,560; Mr. Arizpe - $1,198,560; and Mr. Mincks - $1,198,560. For additional information, refer to Note 11,10, “Incentive Plans,” in the Notes to Consolidated Financial Statements included in Insperity’sthe Company’s annual report on Form 10-K for the year ended December 31, 20132015 filed with the Securities and Exchange CommissionSEC on February 10, 2014.12, 2016. See the Grants of Plan-Based Awards Table on page 25 for information on awards made in 2013.2015. These amounts do not correspond to the actual value that will be realized by the NEO.

2 
Represents variable cash compensation earned and awarded by the Compensation Committee under the IAIP. A description of the IAIP is included in “Elements of Compensation — Variable Cash Compensation” in the Compensation Discussion and Analysis, and the determination of performance-based bonuses for fiscal year 2015 is contained in “2015 Executive Compensation Decisions — IAIP Target Bonus Percentage” of the Compensation Discussion and Analysis.

3 
All other compensation in 20132015 includes the following: Company-provided automobiles; country club memberships; 401(k) matching contributions; dividends on unvested restricted stock grants; premiums for executive disability insurance; costs associated with the Chairman’s Trip and other travel and associated federal income taxes. The federal income taxes associated with the Chairman’s Trip and other travel paid by the Company on behalf of the executives were as follows: Mr. Sarvadi - $57,379; Mr. Rawson - $22,942; Mr. Arizpe - $10,239; Mr. Mincks - $8,083; and Mr. Sharp - $5,773.during 2015 totaled $10,681 each. The 401(k) matching contributions made by the Company during 20132015 for the NEOs totaled $7,650$7,950 each. Dividends paid to Messrs. Sarvadi, Sharp, Rawson, Arizpe and Mincks on unvested restricted stock holdings totaled $52,678; $19,040; $32,640; $32,640 and $32,640, respectively. The incremental cost of Mr. Arizpe’sMessrs. Arizpe, Mincks and Sharp’s use of a Company-leased vehicle was $25,377.$38,085, $30,431 and $30,702, respectively. The incremental cost of Messrs. Sarvadi and Rawson’s country club memberships was $25,230 and $26,500, respectively. The Company owns anowned aircraft that iswere used by its executives for business and, on occasion, personal travel. In addition, Mr. Sarvadi usesused the Company’s aircraft to commute to his residences and certain other business related entertainment travel for which he iswas not required to reimburse the Company. The total incremental cost of such travel for Mr. Sarvadi, and Mr. Rawson, including lost income tax deductions, was $355,864 and $27,824, respectively.$156,947. In the instances where the aircraft isare used for personal travel, the executive iswas required to reimburse the Company for the associated incremental costs. The incremental cost for personal use of Company aircraft is calculated at an hourly rate that takes into account variable costs incurred as a result of the personal flight activity, including fuel, communications and travel expenses for the flight crew. It excludes non-variable costs, such as regularly scheduled inspections and maintenance that would have been incurred regardless of whether there was any personal use of the aircraft. During 2013,2015, Messrs. Sarvadi and Rawson reimbursed the Company $259,915$45,882 and $69,647,$33,230, respectively, for personal travel costs.


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GRANTS OF PLAN-BASED AWARDS TABLE
The following table provides information about equity and non-equity awards granted to the NEOs in 20132015.:
 
 
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards1
 
Estimated Possible Payouts Under Equity Incentive Plan Awards2
All Other Stock Awards: Number of Shares of Stock or Units
(#)3
Grant Date Fair Value of Stock and Option Awards
($)4
Name Grant Date 
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards 1
 
All Other Stock Awards: Number of Shares of Stock or Units
(#) 2
 
Grant Date Fair Value of Stock and Option Awards
($) 3
Grant
Date
Threshold
($)		Target
($)		Maximum
($)		 Threshold
(#)		Target
(#)		Maximum
(#)
 Threshold
($)		 Target
($)		 Maximum
($)		 
  
All Other Stock Awards: Number of Shares of Stock or Units
(#) 2
Paul J. SarvadiN/A552,500
1,105,000
1,657,500
 —
—
—
—
—
 N/A 489,800
 979,600
 1,469,300
 —
—
2/19/2015—
—
—
 —
—
—
20,400
1,051,416
2/19/2013 —
 —
 —
 40,000
 1,167,600
3/30/2015—
—
—
 15,175
30,350
60,700
—
1,602,480
Douglas S. Sharp N/A 160,700
 321,300
 337,400
 —
 —
N/A173,400
346,800
468,180
 —
—
—
—
—
2/19/2013 —
 —
 —
 14,000
 408,660
2/19/2015—
—
—
 —
—
—
8,000
412,320
Douglas S. Sharp3/30/2015—
—
—
 2,650
5,300
10,600
—
279,840
N/A247,000
494,000
691,600
 —
—
—
—
—
 N/A 232,000
 464,000
 556,800
 —
 —
2/19/2015—
—
—
 —
—
—
14,000
721,560
Richard G. Rawson 2/19/2013 —
 —
 —
 24,000
 700,560
3/30/2015—
—
—
 5,675
11,350
22,700
—
599,280
 N/A 232,000
 464,000
 556,800
 —
 —
N/A247,000
494,000
691,600
 —
—
—
—
—
A. Steve Arizpe 2/19/2013 —
 —
 —
 24,000
 700,560
2/19/2015—
—
—
 —
—
—
14,000
721,560
3/30/2015
 5,675
11,350
22,700
—
599,280
Jay E. Mincks N/A 221,000
 442,000
 530,400
 —
 —
N/A236,000
472,000
660,800
 —
—
—
—
—
2/19/2013 —
 —
 —
 24,000
 700,560
2/19/2015—
—
—
 —
—
—
14,000
721,560
Jay E. Mincks3/30/2015—
—
—
 5,675
11,350
22,700
—
599,280


1 
These amounts represent the threshold, target and maximum amounts payable to each executive under the IAIP for 2013.2015. If the threshold is not achieved, the payout is zero.
The amounts earned by our NEOs under the IAIP in 2015 are reflected in the Summary Compensation Table.

2 
These amounts represent the threshold, target and maximum amount of shares payable to each executive under the LTIP.

3
These amounts represent the number of shares of restricted stock and phantom stock granted to each executive under the 2012 Incentive Plan during 2013.2015.

34 
These amounts represent the fullaggregate grant date fair value of restricted stock and phantom stock granted to each executive during 2013.2015. For restricted stock, fair value is calculated using the closing price of Insperity’sthe Company’s Common Stock on the NYSE on the date of grant. The grant value of the 2015 LTIP Awards is shown at target. Actual awards may range from 0% to 200% of the target number of phantom shares if below threshold level is not achieved or the maximum performance level is achieved. The grant date fair value of the 2015 LTIP Awards assuming achievement of the maximum level of performance are: Mr. Sarvadi - $3,204,960; Mr . Sharp - $559,680; Mr. Rawson - $1,198,560; Mr. Arizpe - $1,198,560; and Mr. Mincks - $1,198,560. For the relevant assumptions used to determine the valuation of our stock awards, refer to Note 11,10, “Incentive Plans,” in the Notes to Consolidated Financial Statements included in our 2013annual report on Form 10-K for the year ended December 31, 2013,2015 filed with the Securities and Exchange CommissionSEC on February 10, 2014.12, 2016. The terms of the restricted stock awards provide for three-year vesting and the payment of dividends on all unvested shares. ExecutivesThe 2015 LTIP Awards are requiredpayable in shares of Common Stock and include dividend equivalents, payable in additional shares of Common Stock, with respect to pay the par value ($0.01)number of each share at or nearphantom shares actually earned pursuant to the date of grant.
2015 LTIP Awards if and to the extent dividends are paid on Common Stock during the performance period.

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NEO’S OUTSTANDING EQUITY AWARDS TABLE AT 20132015 FISCAL YEAR END
 
Option Awards Stock AwardsOption Awards Stock Awards
Name
Number of Securities Underlying Unexercised Options
 (#)
Exercisable
Option Exercise Price
($)
Option Expiration Date 
Number of Shares or Units of Stock That Have Not Vested
(#)
Market Value of Shares or Units of Stock That Have Not Vested
($) 1
Number of Securities Underlying Unexercised Options
 (#)
Exercisable
Option Exercise Price
($)
Option Expiration Date 
Number of Shares or Units of Stock That Have Not Vested
(#)
Market Value of Shares or Units of Stock That Have Not Vested
($)1
 
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
 (#)5
 
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Unites or Other Rights That Have Not Vested
($)1
Paul J. Sarvadi— 77,467
2 
2,798,883— 60,401
2 
2,908,308 35,413
 1,705,136
— —
—
   
Douglas S. Sharp— 28,000
3 
1,011,640— 22,001
3 
1,059,348 6,185
 297,808
— — —
   
Richard G. Rawson— 48,000
4 
1,734,240— 38,000
4 
1,829,700 13,246
 637,795
— — —
   
A. Steve Arizpe— 48,000
4 
1,734,240— 38,000
4 
1,829,700 13,246
 637,795
5,00011.7910/1/2014 — —
4,00017.174/1/2014 — —
Jay E. Mincks— 48,000
4 
1,734,240— 38,000
4 
1,829,700 13,246
 637,795
— — —
   


1
Based on the closing price of $36.13$48.15 of Insperity’sthe Company’s Common Stock on the NYSE on December 31, 2013.
2015.

2 
Includes time-vested restricted stock. Stock awards are scheduled to vest as follows provided the officer continues to be employed by Insperity on the applicable vesting date: 14,00013,333 on February 18, 2014; 13,3332016; 20,134 on February 19, 2014; 11,7332016; 13,334 on February 21, 2014; 13,33318, 2017; 6,800 on February 19, 2015; 11,734 on February 21, 20152017 and 13,3346,800 on February 19, 2016.2018.

3 
Includes time-vested restricted stock. Stock awards are scheduled to vest as follows provided the officer continues to be employed by Insperity on the applicable vesting date: 6,0004,667 on February 18, 2014; 4,666 on February 19, 2014; 4,000 on February 21, 2014;2016; 4,667 on February 19, 2015; 4,0002016; 7,333 on February 21, 2015 and 4,66718, 2017; 2,667 on February 19, 2016.2017 and 2,667 on February 19, 2018.

4 
Includes time-vested restricted stock. Stock awards are scheduled to vest as follows provided the officer continues to be employed by Insperity on the applicable vesting date: 9,0008,000 on February 18, 2014;2016; 12,666 on February 19, 2016; 8,000 on February 19, 2014; 7,500 on February 21, 2014; 8,00018, 2017; 4,667 on February 19, 2015; 7,500 on February 21, 20152017 and 8,0004,667 on February 19, 2016.2018.

5
Includes LTIP awards scheduled to vest (assuming target results for performance periods not yet complete and actual results for performance periods completed) and includes an estimate of dividend equivalents for the dividends declared since the date of grant. These awards will vest provided the officer continues to be employed by Insperity on the applicable vesting date.



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NEO OPTION EXERCISES AND STOCK VESTED TABLE FOR FISCAL YEAR 20132015
 
Option Awards Stock Awards Option Awards Stock Awards
Name
Number of
Shares Acquired
on Exercise
(#)
Value Realized
on
Exercise
($) 1
Number of
Shares
Acquired on
Vesting
(#)
Value Realized
on
Vesting
($) 2
 
Number of
Shares Acquired
on Exercise
(#)
 
Value Realized
on
Exercise
($)
 
Number of
Shares
Acquired on
Vesting
(#)
 
Value Realized
on
Vesting
($)1
Paul J. Sarvadi34,091
 443,279
 41,067
 1,172,345
  — — 38,400 1,942,225
 
Douglas S. Sharp—
 —
 19,334
 550,879
  — — 13,333 674,283
 
Richard G. Rawson—
 —
 28,167
 803,709
  — — 23,500 1,188,960
 
A. Steve Arizpe45,200
 908,622
 28,167
 803,709
  — — 23,500 1,188,960
 
Jay E. Mincks—
 —
 28,167
 803,709
  — — 23,500 1,188,960
 


1
Represents the difference between the market price of the Company’s Common Stock at the time of exercise and the exercise price of the options, multiplied by the number of options exercised.
2
Represents the value of the shares on the vesting date based on the last reported closing price of the Company’s Common Stock on the NYSE immediately preceding the vesting date.

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SECURITIES RESERVED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS TABLE
The following table sets forth information about Insperity’sthe Company’s Common Stock that was available for issuance under all of the Company’s existing equity compensation plans as of December 31, 20132015:
 Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance  Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance
Plan Category (# in thousands) ($) (# in thousands)  (# in thousands) ($) (# in thousands)
Equity compensation plans approved by security holders 1
 4
 14.36
 2,821
2 
 214
2 
29.56
3 
2,172
4 
Equity compensation plan not approved by security holders 3
 57
 24.98
 —
 
Equity compensation plan not approved by security holders —
 —
 —
 
Total 61
 24.24
 2,821
  214
 29.56
 2,172
 



1
The 2001 Incentive Plan, the 2012 Incentive Plan and the Insperity, Inc. 2008 Employee Stock Purchase Plan (the “ESPP”) have been approved by the Company’s stockholders. As more fully described on page 22, theThe ESPP is intended to qualify for favorable tax treatment under Section 423 of the Internal Revenue Code.

2
Includes 185,947 shares subject to issuance under the LTIP as of December 31, 2015 assuming maximum results for performance periods not yet complete and actual results for completed performance periods and associated dividend equivalents.

3
Weighted average exercise price does not take into account shares to be issued under the LTIP.

4
This includes 1,321,4541,260,069 shares available under the ESPP and 1,499,221912,045 shares available under the 2012 Incentive Plan. As of March 14, 2014, 1,321,454May 9, 2016, 1,252,205 shares and 1,218,193913,680 shares (assuming maximum results for performance periods not yet complete and actual results for performance periods completed) were available for issuance under the ESPP and the 2012 Incentive Plan, respectively. The securities remaining available for issuance under the 2012 Incentive Plan may be issued in the form of stock options, performance awards, stock awards (including restricted stock), phantom stock awards, stock appreciation rights, and other stock-based awards.
3
The Insperity Nonqualified Stock Option Plan was not approved by stockholders. For a description of the material features of the Nonqualified Stock Option Plan, see Note 11, “Incentive Plans,” in the Notes to Consolidated Financial Statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission on February 10, 2014. Although there are approximately 640,000 unissued shares in the Nonqualified Stock Option Plan, no new shares will be issued under the Nonqualified Stock Option Plan pursuant to an amendment to the 2001 Incentive Plan approved by stockholders in 2006.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

We have no employment agreements or severance policies in place for our executive officers. There are no unvested outstanding stock options and none have been granted to executive officers since 2005. In February 2013, the Company amended the terms of the 2012 Incentive Plan to provide that future2004. All awards granted to named executive officers will include a “double trigger” requirement in the case of a “changechange in control”control of the Company as defined under the 2012 Incentive Plan. Effective with awards granted in 2016, the Company amended the terms of award agreements to provide that future awards granted to any recipient under the 2012 Incentive Plan will include a double trigger requirement in the case of a change in control of the Company as defined under the 2012 Incentive Plan. The directors first appointed to the Board pursuant to the 2015 Agreement are not considered members of the “Incumbent Board” for the purposes of determining whether a change in control has occurred with respect to outstanding awards granted prior to 2016 under the 2012 Incentive Plan. Under the terms of an amendment to the 2012 Incentive Plan that was adopted by the Company in March 2016, however, each of those directors first appointed pursuant to the 2015 Agreement are considered members of the Incumbent Board for all awards granted after that amendment, which includes all awards granted in 2016. All other current directors are considered members of the Incumbent Board under the 2012 Incentive Plan and the new independent director to be appointed pursuant to the 2016 Agreement will also be considered a member of the Incumbent Board. The imposition of the double trigger means that awards for executive officerssubject to the double trigger requirement will no longer immediately vest following a change in control (see page 21 in the “–Compensation Discussion and Analysis Section)Analysis” for additional information). Restricted stockAll outstanding awards previously grantedto NEOs are subject to a double trigger requirement and all awards under the 2001 Incentive Plan immediately vest uponLTIP are also subject to a change in control. double trigger requirement.

Our Incentive Plans provide for immediate vesting (at least in part) of restricted stock upon termination due to disability or death, provided the holder has been in continuous employment since the award date.date, or for awards granted prior to March 2016, upon a change in control, for employees who are not NEOs. Unvested shares of restricted stock are forfeited upon termination for any reason other than disability or death. The number of shares and market value of the restricted stock that would automatically vest for each NEO upon a change in control or termination due to death or disability, or for a qualifying termination following a change in control, based on the closing price of ourthe Company’s Common Stock on December 31, 2013,2015, is set forth in the NEO’s Outstanding Equity Awards Table at 20132015 Fiscal Year End, on page 26, under the captions “Number of Shares or Units of Stock That Have Not Vested” and “Market Value of Shares or Units of Stock That Have Not Vested.”

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Table of Contents


DIRECTOR COMPENSATION
The Company uses a combination of cash and stock-based compensation to attract and retain qualified candidates to serve on the Board. Non-employee directors of the Company were compensated for 20132015 as shown in the table below and are also reimbursed for reasonable expenses incurred in serving as a director. All compensation, except for reimbursement of actual expenses, can be taken in cash or Common Stock, at the director’s option. Directors who are employees of the Company receive no additional compensation for serving on the Board.
 
 Board 
Compensation
Committee
 
Finance, Risk
Management and
Audit Committee
 
Nominating
and Corporate
Governance
Committee
 
Annual Retainers$50,000 $3,000 $5,000  None 
          
Annual Committee Chair FeesN/A $12,000 $15,000  
$15,000 1
 
          
Meeting Fees$2,000 in person 
$1,500 in person 2
 
$1,500 in person 2
  
$1,500 in person 3
 
$1,000 telephonically $750 telephonically $750 telephonically  $750 telephonically 
 Board 
Compensation
Committee
 
Finance, Risk
Management and
Audit Committee
 
Nominating
and Corporate
Governance
Committee
 Lead Independent Director
Annual Retainers$61,000 $10,000 $15,000 None  $9,000
1 
            
Annual Committee Chair FeesN/A $12,000 $21,000 $10,000
1 
 None 
_______________________
______________________________
1 
ThisEffective October 1, 2015, the Board established a $9,000 annual retainer for the Lead Independent Director and reduced the annual fee includes an additional amount paid tofor the lead independent director.
2
These fees are also paid to the Committee chairman for meetings attended with the Company’s management or auditors between regular meetings.
3
These fees are paid only for meetings not held in conjunction with a meetingchair of the Board.Nominating and Corporate Governance Committee from $15,000 to $10,000. Previously, the Lead Independent Director also served as chair of the Nominating and Corporate Governance Committee.

Each person who is initially appointed or elected as a director of the Company receives an initial director award comprised of a grant of shares of restricted Common Stock on the date of election or appointment with an aggregate fair market value, determined based on the closing price of the Common Stock on the date prior to the date of grant, of $75,000, rounded up to the next higher whole share amount in the case of a fractional share amount, and such restricted Common Stock vests as to one-third of the shares on each anniversary of its grant date. If a director terminates his or her service as a member of the Board, his or her unvested portion of such restricted stock award, if any, shall terminate immediately on such termination date, unless such termination of service is due to death or disability, in which event the unvested portion of such restricted stock award shall become 100% vested on such termination date. In 2013, Carol KaufmanPursuant to the 2015 Agreement, each of Mr. Feld, Ms. McKenna-Doyle and Mr. Sorensen received an initial grantdirector award effective as of restricted stock upon her appointmentthe date of the 2015 Annual Meeting of Stockholders. Pursuant to the Board.2016 Agreement, Mr. Morphy is entitled to receive the initial director award effective as of the date of the 2016 Annual Meeting of Stockholders.

In addition, on the date of each annual meetingAnnual Meeting of stockholders,Stockholders, each non-employee director receives an annual director award comprised of either a grant of unrestricted shares of Common Stock with an aggregate fair market value determined based on the closing price of the Common Stock on the date prior to the date of grant, of $90,000, or an immediately vested and exercisable option to purchase a number of shares of Common Stock that had an aggregate value, determined on the date prior to the date of grant, of $90,000, calculated using the valuation methodology most recently utilized by the Company for purposes of financial statement reporting. In 2013,2015, all non-employee directors elected to receive unrestricted shares of Common Stock. The awards were rounded up to the next higher whole share amount in the case of a fractional share amount. Pursuant to the 2015 Agreement, neither Mr. Feld, Ms. McKenna-Doyle nor Mr. Sorensen received an annual director award on the date of the 2015 Annual Meeting of Stockholders and pursuant to the 2016 Agreement, Mr. Morphy will not receive an annual director award on the date of the 2016 Annual Meeting of Stockholders.

After consulting with PM&P and after considering market trends, the Compensation Committee recommended, and in February 2015, the Board approved, an amendment to the Company’s Directors Compensation Plan that eliminated meeting fees and stock options as an optional form of payment for the annual director award, and that adjusted the annual Board and committee retainers accordingly based on the average of the meeting fees paid over the prior three years. These adjustments were intended to be cost neutral. For further information, please see the Company’s Current Report on Form 8-K filed with the SEC on February 25, 2015. Pursuant to the 2015 Agreement and 2016 Agreement (as applicable) and the amended Directors Compensation Plan, each of Mr. Feld, Ms. McKenna-Doyle, Mr. Morphy and Mr. Sorensen receive prorated retainer fees for the year in which they were appointed from the date of their respective appointment.


2941
Table of Contents


DIRECTORS’ COMPENSATION TABLE
The table below summarizes the compensation paid by the Company to non-employee directors during the fiscal year ended December 31, 20132015.
 Fees Earned or Paid in CashStock AwardsOption Awards All Other CompensationTotal
Name($)
($) 1
($)
($) 2
($)
Michael W. Brown     
67,00091,065—1,561159,626
Jack M. Fields, Jr.     
66,25091,065—1,561158,876
Eli Jones     
77,25091,065—1,561169,876
Carol R. Kaufman     
3,50069,103—33072,933
Paul S. Lattanzio     
70,50091,065—1,561163,126
Gregory E. Petsch     
78,25091,065—1,561170,876
Austin P. Young     
89,50091,065—1,561182,126
 Fees Earned or Paid in CashStock AwardsOption AwardsAll Other CompensationTotal
Name($)
($)2
($)
($)3
($)
Michael W. Brown66,50089,578—1,146
 157,223
Peter Feld37,64074,665—955
4 
113,260
Jack M. Fields, Jr.1
44,849———
 44,849
Eli Jones78,50089,578—1,146
 169,223
Carol Kaufman85,75089,578—2,103
4 
177,430
Paul S. Lattanzio1
47,574———
 47,574
Michelle McKenna-Doyle32,01374,665—955
4 
107,634
Norman Sorensen40,29074,665—955
4 
115,910
Austin P. Young90,25089,578—1,146
 180,973
_________________________

1 
Mr. Fields and Mr. Lattanzio resigned from the Board on June 10, 2015.

2
Represents the dollar amount recognized for financial statement reporting purposes with respect to 20132015 for the fair value of stock awards made to directors during 2013,2015, based on the closing price of Insperity’sthe Company’s Common Stock on the date of grant. In the case of annual director equity awards that do not contain vesting or other restrictions, Insperity recognizes the entire fair value for financial statement reporting purposes in the year that the grant is made. In the case of initial director equity awards that contain vesting restrictions, Insperity recognizes the fair value for financial statement reporting purposes over the vesting period.

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All Other Compensation represents dividends paid on stock awards granted in 2013.
2015.

4    Also includes dividends paid on unvested restricted stock awards of: Mr. Feld - $955; Ms. Kaufman - $957; Ms. McKenna-Doyle - $955; and Mr. Sorensen - $955.

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REPORT OF THE FINANCE, RISK MANAGEMENT AND AUDIT COMMITTEE
The Finance, Risk Management and Audit Committee has been appointed by the Board to assist the Board in fulfilling its responsibility to oversee the financial affairs, risk management, accounting and financial reporting processes, and audits of the financial statements of the Company. We operate under a written charter adopted by the Board of Directors and reviewed annually by us. We have furnished the following report for 20132015.
We have reviewed and discussed the Company’s consolidated audited financial statements as of and for the year ended December 31, 20132015, with management and the independent auditor. We discussed with the independent auditor the matters required to be discussed by the standards adopted or referenced by the Public Company Accounting Oversight Board (“PCAOB”) and SEC, Communications with Audit Committees, as currently in effect.
We received from the independent auditor the written disclosures and letter required by the PCAOB regarding the independent auditor’s communications with us concerning independence, as currently in effect, and we discussed with the independent auditor its independence. We also considered the compatibility of the provision of non-audit services with the independent auditor’s independence.
Based on our reviews and discussions referred to above, we recommended that the Board include the audited consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 20132015, for filing with the SEC.
THE FINANCE, RISK MANAGEMENT AND AUDIT COMMITTEE
Austin P. Young, Chairman
Michael W. BrownChairperson
Carol R. Kaufman
Paul S. LattanzioMichelle McKenna-Doyle
Norman Sorensen

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and officers and persons who own more than 10% of the Common Stock to file initial reports of ownership and reports of changes in ownership (Forms 3, 4, and 5) of Common Stock with the SEC and the NYSE.SEC. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all such forms that they file.

Based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, the Company believes that all Section 16(a) reports with respect to the year ended December 31, 2013,2015, applicable to its officers, directors and greater than 10% beneficial owners were timely filed.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Finance, Risk Management and Audit Committee has adopted a statement of policy and procedures with respect to related party transactions covering the review, approval or ratification of transactions involving the Company and “Related Parties” (generally, directors and executive officers and their immediate family members and 5% stockholders). The policy currently covers transactions in which the Company and any Related Party are participants and in which the Related Party has a material interest, other than transactions involving an amount equal to or less than $50,000 (individually or when aggregated with all similar transactions) and not involving non-employee directors. The policy generally requires that such transactions be approved by the Finance, Risk Management and Audit Committee in advance of the consummation or material amendment of the transaction. Under the policy, prior to entering into a related party transaction, full disclosure of all of the facts and circumstances relating to the transaction must be made to the Finance, Risk Management and Audit Committee, which will approve such transaction only if it is in, or is not inconsistent with, the best interests of the Company and its stockholders. In the event a transaction is not identified as a related party transaction in advance, it will be submitted promptly to the Finance, Risk Management and Audit Committee or the chairmanchairperson thereof, and such committee or chairman,chairperson, as the case may be, will evaluate the transaction and evaluate all options, including but not limited to ratification, amendment or termination of the transaction.

A significant component of our marketing strategy is the title sponsorship of the Insperity InvitationalTM golf tournament, a Champions PGA tour event held annually in The Woodlands, Texas, a suburb of Houston. Consistent with other PGA golf tournaments, the Insperity Invitational golf tournament benefits and is managed by a non-profit organization, Greater Houston Golf Charities (“GHGC”). In connection with the Company’s sponsorship, Mr. Jay E. Mincks, Executive Vice President of Sales and Marketing, serves as chairman of GHGC, a non-compensatory position. During 2013,2015, the Company paid GHGC $3.2$3.5 million in sponsorship and tournament related expenses, as well as an additional $1.0$0.9 million in other event sponsorships and charitable contributions.

We provide PEO-related services to certain entities that are owned by, or have board members that are, Related Parties. These Related Parties include Mr. Richard G. Rawson, Mr. Paul J. Sarvadi and Mr. Jack M. Fields, Jr. or members of their families. The PEO service fees paid by such entities are within the pricing range of other unrelated clients of ours. During 2013,2015, such client companies paid the Company the following service fees, which are presented net of the associated payroll costs:

Related Party Net Service Fees / (Payroll Costs)
    
Mr. Rawson (four client companies) $465,366
/$(1,606,924)
Mr. Sarvadi (three client companies) $191,193
/$(463,739)
Mr. Fields (two client companies) $162,790
/$(561,223)
Related Party Net Service Fees / (Payroll Costs)
    
Mr. Rawson (three client companies) $491,238
 $(1,636,797)
Mr. Sarvadi (four client companies) $334,367
 $(572,818)
Mr. Fields1 (two client companies)
 $183,907
 $(650,932)


1
Mr. Fields resigned from the Board on June 10, 2015.

We made charitable contributions to non-profit organizations for which certain Related Parties serve as members of their Boardboard of Directors.directors. These Related Parties include Messrs. Sarvadi, Rawson and Mincks. During 2013,2015, certain corporate employees were family members of certain Related Parties. Total salaries, commissions and incentive compensation paid during 20132015 to family members of Messrs. Sarvadi, Rawson and and Arizpe were $274,691 (three corporate employees) and $317,085 (four$243,849 (two corporate employees), $163,180 (one corporate employee) and $370,050 (five corporate employees), respectively.

Pursuant to the 2015 Agreement, the Company reimbursed Starboard’s legal fees of $276,765 and, pursuant to the 2016 Agreement, the Company has agreed to reimburse Starboard for up to $100,000 of its legal fees.

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PROPOSAL NUMBER 2:
Advisory Vote on Executive CompensationADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules under Section 14A of the Exchange Act, we are providing stockholders with an opportunity to make a non-binding recommendation on the compensation of our NEOs. At the 2011 Annual Meeting of Stockholders, stockholders recommended that we hold an annual advisory vote on executive compensation and in light of this result, the Board plans to hold a non-binding vote on NEO compensation annually.

This proposal, commonly referred to as “say-on-pay”, provides stockholders an opportunity to provide an overall assessment of the compensation of our NEOs rather than focus on any specific item of compensation. The advisory vote is a non-binding vote on the compensation of the NEOs, as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, set forth in this proxy statement. Although the results of the voting on this proposal are not binding on the Board, of Directors, the Board and Compensation Committee value stockholders’ opinions and will take the results into account when making a determination concerning the compensation of our NEOs. At the 20132015 Annual Meeting of Stockholders, a substantial majority of the votes, over 92%88%, were cast in favor of our NEO compensation.

As set forth in the “Compensation Discussion and Analysis” section of this proxy statement, our Compensation Committee structured the compensation of the NEOs to emphasize the Company’s pay-for-performance philosophy. Our compensation program is designed to attract and retain key executives responsible for our success and to provide motivation for both achieving short-term business goals and enhancing long-term stockholder value. Please read the “Compensation Discussion and Analysis” section beginning on page 13 for additional details.

The Compensation Committee regularly reviews best practices in corporate governance and executive compensation. In observance of those best practices, the following changes were implemented in 2013:

Eliminated automatic acceleration of new equity awards for executive officers in the event of a change in control of the Company by requiring a qualifying termination of employment for vesting;
Adopted a policy prohibiting employees and directors from hedging the Company’s Common Stock; and
Adopted a policy to prohibit significant pledging of the Company’s Common Stock by employees and directors.

Already in 2014, and in furtherance of our compensation objectives and commitment to best practices, the Compensation Committee and Board adopted the following changes in 2015:

implemented a clawback policynew performance-based long-term incentive program; and
amended the Insperity, Inc. 2012 Incentive Plan to generally require a minimum vesting period of three years for incentivegrants of restricted stock and stock options that are time-vested awards.

We have embedded in our overall compensation paidprograms features aligned with the objectives of our business and designed to strengthen the link between the interests of our executive officers based upon the achievementand those of financial results which are later the subjectour stockholders. Following is a summary of compensation practices that we have adopted and a financial restatement.list of pay practices that we avoid.

The Company also continues to observe the following best practices:What Insperity Has
üStock ownership guidelines, for the CEO, three times base salary and for non-employee directors, three times the annual cash retainer
üClawback policy for incentive compensation paid to any employee, including NEOs and other executive officers
üMinimum vesting period of three years for grants of restricted stock, stock options and phantom shares
üDouble trigger requirement for early vesting of NEO equity awards in the event of a change in control
üHedging policy prohibits employees and directors from engaging in hedging transactions involving shares of Common Stock
üPledging policy prohibits employees and directors from engaging in pledging transactions involving shares of Common Stock that would be considered significant by the Board
üEstablished a lead independent director position
üCompensation Committee composed entirely of outside, independent directors
üIndependent compensation consultant hired by and reporting directly to the Compensation Committee

Maintains a pay-for-performance philosophy;
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Does not maintain employment agreements with the NEOs;
Does not provide any supplemental executive pension benefits;
Maintains stock ownership guidelines for the CEO;
Does not provide excess parachute payments in the eventTable of a change in control;
Does not provide any tax gross-ups in the event of a change in control;
Does not provide any tax gross-ups on perquisites to executive officers, except for limited business related travel; and
Does not provide post-retiree medical coverage.Contents


What Insperity Does Not Have
ûEmployment agreements with NEOs or other executive officers
ûExecutive pension or other similar retirement or supplemental benefits
ûSingle trigger change in control agreements for NEOs
ûTax gross-ups in the event of a change in control
ûMedical coverage for retirees
ûExcessive benefits and perquisites
Stockholders are being asked to vote on the following resolution:

“RESOLVED, that the compensation paid to Insperity’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”


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The Board recommends that stockholders indicate their support by selecting “For” when voting on our executive compensation program. While the results of the advisory vote are non-binding, the Board and Compensation Committee will consider the outcome of the vote when evaluating whether any actions are necessary when considering future executive compensation decisions.

The Board unanimously recommends that you select “For” the adoption of the resolution approving the compensation of the Company’s NEOs. Properly dated and signed proxies will be so voted unless stockholders specify otherwise.



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PROPOSAL NUMBER 3:
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
The Finance, Risk Management and Audit Committee has appointed the firm of Ernst & Young LLP (“Ernst & Young”) as the Company’s independent registered public accounting firm for the year ending December 31, 2014, subject to ratification by2016. If the Company’s stockholders.stockholders do not ratify the appointment of Ernst & Young, then the Finance, Risk Management and Audit Committee will reconsider the appointment and may or may not consider the appointment of another independent registered public accounting firm for the Company for 2016 or future years. Ernst & Young has served as the Company’s independent registered public accounting firm since 1991. Representatives of Ernst & Young are expected to be present at the 2016 Annual Meeting of Stockholders and will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions from those attending the meeting.
Fees of Ernst & Young LLP
Ernst & Young’s fees for professional services totaled $1,029,400$1,154,300 in 20132015 and $1,039,100$1,096,610 in 2012.2014. During 20132015 and 2012,2014, Ernst & Young’s fees for professional services included the following:

Audit Fees — fees for audit services, which relate to the consolidated audit, internal control audit in compliance with Sarbanes-Oxley Section 404, quarterly reviews, subsidiary audits and related matters, were $815,000$930,880 in 20132015 and $827,700$875,850 in 2012.
2014.

Audit-Related Fees — fees for audit-related services, which consisted primarily of the SOC 1 Report, the retirement plan audits, and quarterly agreed-upon procedures, were $212,000$220,920 in 20132015 and $209,000$218,360 in 2012.
2014.

•Tax Fees — there were no fees for tax services in 20132015 or in 2012.2014.

All Other Fees — there were fees of $2,500 in 2015 and $2,400 in both 2013 and 2012,2014, which were annual subscription fees for Insperity’s use of Ernst and Young’s online research databases and other research tools.

The Finance, Risk Management and Audit Committee reviewed the non-audit services provided to the Company and considered whether Ernst & Young’s provision of such services was compatible with maintaining its independence.
Finance, Risk Management and Audit Committee Pre-Approval Policy for Audit and Non-Audit Services
The Finance, Risk Management and Audit Committee has established a policy that requires pre-approval of the audit and non-audit services performed by the independent auditor. Unless a service proposed to be provided by the independent auditors has been pre-approved by the Finance, Risk Management and Audit Committee under its pre-approval policies and procedures, it will require specific pre-approval of the engagement terms by the Finance, Risk Management and Audit Committee. Under the policy, pre-approved service categories are generally provided for up to 12 months and must be detailed as to the particular services provided and sufficiently specific and objective so that no judgments by management are required to determine whether a specific service falls within the scope of what has been pre-approved. In connection with any pre-approval of services, the independent auditor is required to provide detailed back-up documentation concerning the specific services to be provided.
The Finance, Risk Management and Audit Committee may delegate pre-approval authority to one or more of its members, including a subcommittee of the Finance, Risk Management and Audit Committee. The member or members to whom such authority is delegated shall report any pre-approval actions taken by them to the Finance, Risk Management and Audit Committee at its next scheduled meeting. The Finance, Risk Management and Audit Committee does not delegate to management any of its responsibilities to pre-approve services performed by the independent auditor.
None of the services related to the Audit-Related Fees or Other Fees described above was approved by the Finance, Risk Management and Audit Committee pursuant to the waiver of pre-approval provisions set forth in applicable rules of the SEC.


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Required Affirmative Vote
If the votes cast in person or by proxy at the 20142016 Annual Meeting of Stockholders in favor of this proposal exceed the votes cast opposing the proposal, the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2014,2016, will be ratified. If the appointment of Ernst & Young is not ratified, the Finance, Risk Management and Audit Committee will reconsider the appointment.

The Board and the Finance, Risk Management and Audit Committee recommend that stockholders vote “For” the ratification of appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, and proxies executed and returned will be so voted unless contrary instructions are indicated thereon.




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ADDITIONAL INFORMATION

Delivery of Proxy Statement
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements with respect to two or more security holders sharing the same address by delivering a single proxy statement addressed to those security holders. This process, which is commonly referred to as “householding,” potentially means extra convenience for security holders and cost savings for companies. This year, a number of brokers and our transfer agent with account holders who are Insperity stockholders will be householding the Company’s proxy materials. A single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholder. Once you have received notice from your broker that they will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, please notify your broker and direct your written request to Insperity, Inc., Attention: Ruth Saler, Investor Relations Administrator, 19001 Crescent Springs Drive, Kingwood, Texas 77339, or contact Ruth Salerthe Investor Relations Administrator at 1-800-237-3170.1-844-677-8332. The Company will promptly deliver a separate copy to you upon request.
Stockholder Proposals and Director Nominations for 20142016 Annual Meeting of Stockholders
In order for director nominations and stockholder proposals to have been properly submitted for presentation at the 20142016 Annual Meeting of Stockholders, notice must have been received by the Company between the dates of January 14, 2014,February 11, 2016, and February 13, 2014. TheMarch 12, 2016 in accordance with the Bylaws of the Company. On March 12, 2016, Starboard Value and Opportunity Master Fund Ltd nominated two candidates for director, which nominations were subsequently withdrawn in connection with the 2016 Agreement. Except as described above, the Company received no such notice, and no stockholder director nominations or proposals will be presented at the 2016 Annual Meeting of Stockholders.
Stockholder Proposals for 20152017 Proxy StatementAnnual Meeting of Stockholders
AnyThe Bylaws of the Company require timely advance written notice of any proposal of a stockholder intended to be considered for inclusion in the Company’s proxy statement for the 20152017 Annual Meeting of Stockholders. Notice of such proposals will be considered timely for the Annual Meeting of Stockholders mustto be held in 2017 if it is received at the Company’s principal executive offices no later than the close of business on December 8, 2014.February 2, 2017 and otherwise comply with the requirements or Rule 14a-8 under the Exchange Act and with the Bylaws of the Company. If the Company changes the date of the 2017 Annual Meeting of Stockholders by more than 30 days from the anniversary date of the 2016 meeting, stockholder proposals must be received a reasonable time before the Company begins to print and mail the proxy materials for the 2017 Annual Meeting of Stockholders.
In addition, in order for any such proposal to be included in the proxy statement, the Bylaws of the Company require that the written notice set forth as to each matter such stockholder proposes to bring before the Annual Meeting of Stockholders: (a) a brief description of the business desired to be brought before the Annual Meeting of Stockholders; (b) the reasons for conducting such business at the Annual Meeting of Stockholders; (c) the name and address, as they appear on the Company’s books, of such stockholder; (d) the class and number of shares of the Company’s stock that is beneficially owned by such stockholder; and (e) any material interest of such stockholder in such business. Stockholders are also advised to review the Bylaws of the Company regarding the requirements for submitting proposals.

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Stockholder Director Nominations for Stockholder Nominations and Proposals2017 Annual Meeting of Stockholders
The Bylaws of the Company require timely advance written notice of stockholder nominations of director candidates and. Notice of any other proposals to be presented at an annual meeting of stockholders. Noticestockholder nominations will be considered timely for the Annual Meeting of Stockholders to be held in 20152017 if it is received by the Company not later than the close of business on February 12, 2015,March 2, 2017, and not earlier than the close of business on January 13, April 1, 2017. However, if the date of the 2017 Annual Meeting of Stockholders is advanced by more than 30 days prior to or delayed by more than 30 days after the anniversary date of the 2016 Annual Meeting of Stockholders, notice by the stockholder to be timely must be delivered or received not earlier than the close of business on the 120th day nor later than the close of business on the later of (1) the 90th day prior to the date of such Annual Meeting of Stockholders or (2) if less than 100 days’ prior notice or public disclosure of the scheduled meeting date is given or made, the 10th day following the earlier of the day on which notice of such meeting was mailed to stockholders or the day on which such public disclosure was made.
2015. In addition, the Bylaws of the Company require that such written notice set forth: (a) for each person whom the stockholder proposes to nominate for election, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or as otherwise required, in each case pursuant to Regulation 14A under the Exchange Act, including, without limitation, such person’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected; and (b) as to such stockholder: (i) the name and address, as they appear on the Company’s books, of such stockholder; (ii) the class and number of shares of the Company’s capital stock that are beneficially owned by such stockholder; and (iii) a description of all agreements, arrangements or understandings between such stockholder and each such person that such stockholder proposes to nominate as a director and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by such stockholder.
In the case of other proposals by stockholders at an annual meeting, Stockholders are also advised to review the Bylaws require that such written notice set forth as to each matter such stockholder proposes to bring before the annual meeting: (a) a brief description of the business desired to be brought beforeCompany regarding the annual meeting; (b) the reasonsrequirements for conducting such business at the annual meeting; (c) the name and address, as they appear on the Company’s books, of such stockholder; (d) the class and number of shares of the Company’s stock that is beneficially owned by such stockholder; and (e) any material interest of such stockholder in such business.submitting director nominations.

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FINANCIAL INFORMATION
A copy of the Company’s annual report on Form 10-K for the Year Endedyear ended December 31, 20132015, as filed with the SEC, including any financial statements and schedules and exhibits thereto, may be obtained without charge by written request to Ruth Saler, Investor Relations Administrator, Insperity, Inc., 19001 Crescent Springs Drive, Kingwood, Texas 77339-3802.
By Order of the Board of Directors
/s/ Daniel D. Herink
Daniel D. Herink
Senior Vice President of Legal,
General Counsel and Secretary
April 11, 2014May 27, 2016
Kingwood, Texas


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