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| Preliminary Proxy Statement | ||
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
| Definitive Proxy Statement | ||
| Definitive Additional Materials | ||
| Soliciting Material §240.14a-12 | ||
KELLY SERVICES, INC.
Other Than Theother than the Registrant)¨☒ No fee required. ¨Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:¨☐ Fee paid previously with preliminary materials. ¨☐ Check box if any part of the fee is offset as providedFee computed on table in exhibit required by Item 25(b) per Exchange Act Rule 0-11(a)(2) Rules 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.
Vision
To be the top workforce
solutions provider that drives
limitless opportunities
and growth by connecting
organizations with specialty
talent.
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April 15, 2024
Dear Shareholders,
2023 marked a year of transformative action as we set out to build upon the progress we have achieved on Kelly’s specialty growth journey during the last three years. We began the year with a clear vision for the company’s future defined by significantly improved profitability, sustainable growth, and greater value creation for all stakeholders. Notwithstanding ongoing macroeconomic uncertainty, we focused on what we can control, steering the company through a challenging operating environment while executing on our vision with urgency and agility.
Amid persistent headwinds that impacted demand for staffing and recruitment process outsourcing services in Science, Engineering & Technology, Professional & Industrial, and Outsourcing & Consulting, we captured growth in more resilient markets. Kelly Education continued to be a high-performing asset within the company’s portfolio, growing 27 percent through improved fill rates, strong demand from existing customers, and new customer wins. In Professional & Industrial, revenue from higher-margin outcome-based solutions also increased as demand for value-added services remained steady.
Concurrent with our focus on driving results in the near term, we kept an eye trained on the future as well, reviewing our long-term growth and efficiency objectives to identify opportunities to accelerate progress on our specialty growth journey. As a result of the review, Kelly announced a comprehensive transformation initiative to optimize operations in a sustainable manner, unlock additional value-creating opportunities, and accelerate profitable growth. As part of the initiative, we committed to making long-term, structural improvements across the enterprise to significantly improve Kelly’s EBITDA margin. Following careful analysis, we took swift and decisive action to deliver on our commitment.
Driving Efficiency and Effectiveness
In July, we implemented strategic restructuring actions that further streamlined Kelly’s operating model. Among the
actions: simplifying Kelly’s organizational structure, renegotiating supplier agreements; and revamping the company’s performance management process. We also made the difficult decision to implement a workforce reduction plan to align our resources with new ways of working. These actions delivered a structural reduction in the company’s cost base and accordingly, a significant improvement to EBITDA margin, ending the year at 2.6 percent on an adjusted basis. We are committed to sustaining these efficiencies and have established controls to provide visibility into resources and expenses across the company.
With the efficiency measures in place, we pivoted to the second phase of our transformation: driving growth. In this phase, we undertook several strategic initiatives to increase top-line results over the long term. They include a comprehensive strategy to deliver the full suite of Kelly solutions to large enterprise customers. This approach is transforming the culture, capabilities, and technology across each segment to serve the most critical accounts more efficiently and effectively. We are now executing this strategy with an initial set of focus accounts which represent a meaningful portion of the company’s revenue base. This approach will accelerate our progress on capturing share-of-wallet, shifting Kelly’s business mix, and optimizing expenses over a large subset of the business.
In Kelly’s Professional & Industrial segment, we implemented an enhanced localized delivery model to meet commercial and light industrial talent and customers where they are. Underpinning this model is a network of physical branch locations through which Kelly can more quickly address customer and talent needs, uncover deeper insights into local market dynamics, and stimulate greater collaboration among branch team members. The model continues to generate positive momentum, benefiting further from the Kelly Now mobile app. The app is now live nationwide and actively serving up tailored job opportunities in commercial and light industrial to thousands of highly qualified candidates.
“The change we set out to create within Kelly is no longer hypothetical; our transformation is delivering results. I am confident that the collective strength and resilience of Team Kelly will continue to propel us forward on our journey in 2024, as it has over the past 77 years.”
Peter Quigley, President and CEO
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Sharpening our Focus
We also took bold steps in 2023 to optimize Kelly’s portfolio of businesses and unlock capital in support of our specialty strategy. In November, Kelly entered into an agreement to sell its European staffing business for more than $100 million. The transaction, which closed in January, sharpens our focus on higher margin, higher growth MSP and RPO solutions globally, and specialty outcome-based and staffing services in North America. Furthermore, it accelerates our transformation efforts, boosting Kelly’s EBITDA margin to 3.0 percent on an adjusted basis entering 2024 – a step change from the company’s historical EBITDA margin average of approximately 2.0 percent.
Having added significant capital to Kelly’s available liquidity, we are redoubling our efforts to identify high-margin, high-growth inorganic opportunities. We remain committed to pursuing acquisitions in our Science, Engineering & Technology and Education segments – and more opportunistically, Outsourcing & Consulting. With a strong balance sheet, a disciplined approach to evaluating opportunities, and clear inorganic priorities, Kelly is poised to pursue deals in any macroeconomic environment.
Accelerating Profitable Growth
Through the decisive action and rapid progress, the Kelly team delivered in 2023, we have laid the groundwork for 2024 to be an inflection point in the company’s 77-year history. With the efficiency measures delivering sustained results and growth initiatives in the implementation phase, Kelly is well positioned to capture increased customer demand when the macroeconomic environment improves. While there is work to be done, we are confident that 2024 is the start of a new era of profitable growth – a year in which we will begin to reap the full benefits of our transformation and create value for all of Kelly’s stakeholders.
We extend our sincere appreciation to the members of Kelly’s board of directors, each of whom brings a diverse set of experiences and skills that have proven invaluable as we have executed this transformation. We are particularly appreciative of Donald Parfet, who concluded a five-year term as chairman of the board of directors in May. Kelly has benefited immensely from his guidance and insights as we have positioned the company for the future. We thank him for his leadership, and are grateful for his continued service on Kelly’s board as an independent director.
Finally, to Kelly’s shareholders: thank you for placing your trust in us. With our Noble Purpose as our guide, we look forward to realizing our collective ambitions and rewarding you for recognizing the value-creating potential of this great company.
With appreciation,
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Terrence B. Larkin Chairman of the Board | Peter W. Quigley President and CEO |
“After serving for more than a decade as a member of Kelly’s board of directors, I have never been more optimistic about the company’s future than I am today. I am grateful for the privilege to lead this board as chairman and work together with its distinguished members to carry out our responsibility to Kelly’s shareholders as the company accelerates forward into a new era of profitable growth.”
Terrence Larkin, Chairman of the Board
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Notice of Annual Meeting of Shareholders
2024 Annual Meeting of Shareholders
| Date and Time: | Place: | Record Date: | ||
Thursday, May 9, 2024 at 12:00 p.m., Eastern Daylight Time |
kellyservices.com | |||
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Time, March 21, 2024
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2016 PROXY STATEMENT
Notice of 2016 Annual Meeting of
Stockholders and Proxy Statement
May 11, 2016
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April 11, 2016
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of Kelly Services, Inc., which will be held at 11:00 a.m., Eastern Daylight Time, on Wednesday, May 11, 2016, in the Auditorium located on the first floor of our headquarters building at 999 West Big Beaver Road, Troy, Michigan 48084-4716.
Matters scheduled for consideration at this Meeting are the election of Directors, an advisory vote on executive compensation, and the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2016.
Whether you plan to attend or not, please date, sign and return the proxy card in the accompanying envelope. Your vote is important to us. If you do attend the Meeting and desire to vote in person, you may do so even though you have previously submitted your proxy.
We look forward to seeing you at the Meeting.
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you |
Proposal 1. Election of
Proposal 2.
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Please refer to the enclosed Proxy Card and Proxy Statement for information on voting options:
Internet – Scan QR Code – Telephone – Mail
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KELLY SERVICES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the StockholdersAdvisory approval of
Kelly Services, Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of Kelly Services, Inc., a Delaware corporation (the “Company”), will be held at the offices of the Company, 999 West Big Beaver Road, Troy, Michigan 48084-4716, on Wednesday, May 11, 2016 at 11:00 a.m., Eastern Daylight Time, for the following purposes:
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Proposal 3. |
Proposal 4. Ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the |
Proposal 5. Transaction of any other business as may properly come before the Meeting |
Online - www.envisionreports.com/kelyb meetnow.global/MTZZK6S |
QR code - Scan and vote with your mobile device | ||||||
Calling -1-800-652-VOTE (8683) Within the U.S., U.S. territories & Canada on a touch tone telephone |
Mail - Return the signed proxy card | |||||||
Proxies submitted online or Beneficial owners, who own shares through a bank, brokerage firm, or If you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you may vote online, by telephone, or by mail. | ||||||||
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTEFOR EACH DIRECTOR NOMINEE AS SET FORTH IN PROPOSAL 1,FOR THE APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION AS SET FORTH IN PROPOSAL 2, ANDFOR RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS SET FORTH IN PROPOSAL 3.
Only holdersIf you were a holder of record of the Company’s Class B common stockCommon Stock at the close of business on the Record Date, March 21, 20162024, you are entitled to notice of and to vote at the Annual Meeting.
To ensure a quorum, it is importantPlease promptly submit your vote by internet, telephone, or by signing, dating, and returning the enclosed proxy card or voting instructions form in the postage-paid envelope provided so that your proxyshares will be mailed promptlyrepresented and voted at the meeting.
Thank you for your interest in Kelly.
By Order of the enclosed envelope, which requires no postage.Board of Directors
VANESSA P. WILLIAMS
Corporate Secretary
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Table of Contents
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| Executive Compensation Philosophy, Objectives, and Design | 50 |
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We provide belowProxy Summary
This summary highlights of certain information contained elsewhere in this Proxy Statement. As it is only a summary, pleasePlease refer to the complete Proxy Statement and Kelly’s 20152023 Annual Report before you vote.
North America
North America
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Proposal 1: Election of Directors
Biographical Information About Director Nominees
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Principal Occupation and ● Executive Vice President, Business Development, General Counsel and Corporate Secretary, Lear Corporation (2008 -
● Wayne State University Law School, JD cum laude ● Michigan State University, BA (High Honors), Finance
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| Specific Experience and Skills ● Executive Leadership ● Transformations ● Financial Acumen ● Risk Management ● Legal/Corporate Governance ● Mergers & Acquisitions | ||||
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Principal Occupation and ●
● ● Senior Vice President, General Counsel, Chief Administrative Officer and Assistant Secretary, Kelly Services, Inc. (2015 - 2017)
● ● University of Mr. Quigley was appointed President and Chief Executive Officer of Kelly in October 2019. He has more than 20 years of experience in a variety of roles at Kelly and has served as an officer of the Company since 2004. Prior to joining Kelly, Mr. Quigley held a variety of roles at Lucent Technologies and AT&T Corporation. Mr. Quigley also serves on the Boards of the American Staffing Association, Detroit Regional Chamber, Business Leaders for Michigan, and the Detroit Economic Club. He brings to the Board his leadership experience and extensive knowledge of the Company’s business. | ||
| Specific Experience and Skills ● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● Legal/Corporate Governance ● ESG/Sustainability ● Mergers & Acquisitions
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Proposal 1: Election of Directors
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Board Committees ● Audit ● Compensation and Talent Management ● Corporate Governance and Nominating (Chair) Principal Occupation and Directorships ● Director, NAACP Legal Defense and Education Fund (1998 - present) ● Director, Cintas Corporation (2006 - present) ● Director Abt Associates (2020 - present) ● Board Chair, Cardinal Spellman High School Board (2022 - present) ● Trustee, Cardinal Spellman High School Board (2010 - 2022) ● Senior Partner and other executive positions, Booz & Co. (1981 - 2016) Education ● Harvard Business School, MBA ● Massachusetts Institute of Technology, MS, Chemical Engineering ● Massachusetts Institute of Technology, BS, Management Science (Concentration in Organizational Psychology) ● Massachusetts Institute of Technology, BS, Chemical Engineering Mr. Adolph joined our Board in March 2018 with over 35 years of experience in growth strategy, mergers and acquisitions, and technology-driven industry changes. He also has governance experience through his past service on the board of Booz & Co. and current service on the boards of Cintas Corp., where he chairs the compensation committee, and the NAACP Legal Defense and Education Fund, where he served as co-chair from 2011 to 2021. Mr. Adolph is a founding board member of Black Economic Alliance and served as a director from 2017 to 2020. He also serves on the board of Abt Associates. His extensive business expertise, strategic perspective, and strong leadership skills make him a valued contributor to the Board. | |
| Specific Experience and Skills
● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Legal/Corporate Governance ● ESG/Sustainability ● Mergers & Acquisitions | ||
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Board Committees ● None Principal Occupation and Directorships ● President and Chief Executive Officer, Kelly Services, Inc. (2017-2019) ● Executive Vice President and Chief Operating Officer, Kelly Services, Inc. (2009 - 2017) Education ● Oakland University, MBA ● Wayne State University, BSBA Mr. Corona served as President and Chief Executive Officer of Kelly from May 2017 until his retirement in September 2019. He had more than 20 years of experience in a variety of executive roles with Kelly, including eight years as Executive Vice President and Chief Operating Officer. Prior to joining Kelly in 1994, he held management roles at Digital Equipment Professional Services Group and Burroughs Corporation. Mr. Corona also serves on the boards of several not-for-profit organizations. He brings to the Board significant knowledge of the Company and executive leadership experience. | |
| Specific Experience and Skills ● Executive Leadership ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● Mergers & Acquisitions | ||
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Proposal 1: Election of Directors
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Board Committees ● Audit ● Compensation and Talent Management (Chair) ● Corporate Governance and Nominating Principal Occupation and Directorships ● Director, Huntington Bancshares Incorporated (2017 – 2023) ● Director, First Merit Corporation (2013 – 2017) ● President and Chief Executive Officer, Meadowbrook Insurance Group, Inc. (2002 – 2016) Education ● Detroit College of Law, JD ● Wayne State University, BA, Psychology Mr. Cubbin is an attorney with 31 years of experience in insurance law. In 2016, he retired as President and Chief Executive Officer following a 30-year career with Meadowbrook Insurance Group. He previously served on the board of directors of three large publicly held companies. Mr. Cubbin is an experienced director with broad-ranging experience in legal, insurance, management, accounting, actuarial, investment, underwriting, reinsurance, and claims. The Board determined that Mr. Cubbin qualifies as an “audit committee financial expert” within the meaning of applicable SEC regulations. | |
| Specific Experience and Skills ● Executive Leadership ● Transformations ● Innovation ● Industry ● Financial Expert ● Risk Management ● Legal/Corporate Governance ● Mergers & Acquisitions | ||
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Board Committees ● Audit ● Corporate Governance and Nominating Principal Occupation and Directorships ● Executive Vice President and Chief Information Officer, United Services Automobile Association (USAA) (2022 – present) ● Senior Executive Vice President, Chief Operations and Technology Officer, Regions Financial Corporation (2017 – 2021) ● Director, Innovation Depot (2021) ● Director, Regions Bank (2019 – 2022) ● Director, Techbridge, Inc. (2016 - 2020) Education ● Columbia University, MS, Technology Management ● University of Nebraska at Omaha, MBA, International Business ● Osmania University, BS, Electronics and Communications Engineering Ms. Duggirala joined our Board in January 2022 with more than 24 years of leadership experience with global organizations. She is a renowned digital transformation and technology strategist with skills in large-scale strategic product delivery, technical innovation, and complex financial management. She brings to the Board a wealth of knowledge in integrations, strategic planning, product development, operations, engineering, data management, and cybersecurity. Ms. Duggirala has significant cybersecurity experience from working in a variety of information technology and data analytics roles, including Chief Operations and Technology Officer at Regions Bank and Chief Technology Officer at other large fintech firms. In 2022, Ms. Duggirala received the esteemed Outstanding 50 Asian Americans in Business Award. | |
| Specific Experience and Skills ● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● Legal/Corporate Governance ● ESG/Sustainability ● Mergers & Acquisitions | ||
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Proposal 1: Election of Directors
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Board Committees ● Compensation and Talent Management ● Corporate Governance and Nominating Principal Occupation and Directorships ● President and CEO, IMJ Consulting, LLC (2023 - present) ● Chief People and Diversity Officer, Zendesk, Inc. (2018 - 2022) ● Senior Vice President and Chief Human Resources Officer, Plantronics, Inc. (2015 - 2018) ● Director, Entrepreneurship for All (EforAll) (2020 – present) ● Member of CNBC’s Workforce Executive Council (2021 – present) Education ● John F. Kennedy University, MA, Organizational Development and Management ● University of California, BA, Social Sciences (Emphasis in Human Resources Management) Ms. Johnson joined our Board in January 2022 with more than 30 years of experience in strategy transformation, human capital management, and operational excellence in multiple industries. She is an accomplished human capital transformational leader championing initiatives that transform the mindsets and behaviors that shape a culture. Ms. Johnson has extensive human capital management experience | |
| Specific Experience and ● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● ESG/Sustainability ● Mergers & Acquisitions
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● Audit (Chair) ● Compensation and Talent Management
Principal Occupation and ● President and CEO, Murphy Consulting, Inc. (2008 - present) ● Certified Public Accountant ● Member of AICPA’s Governing Council ● Member of NACD Advisory ● Director, Detroit Legal News Company (2012 - present)
● University of Michigan,
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| Specific Experience and Skills ● Executive Leadership ● Transformations ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Financial Expert ● Risk Management ● Legal/Corporate Governance ● Mergers & Acquisitions
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Proposal 1: Election of Directors
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Principal Occupation and ● Managing Director, ● General Partner, ● General Partner, Apjohn Ventures Annex Fund (2010 - 2022) ● Director, Rockwell Automation, Inc. (2008 - present) ● Director, MASCO Corporation (2012 - present) ● Director,
● University of Michigan, MBA, Finance ● University of Arizona, BA, Economics
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| Specific Experience and ● Executive Leadership ● Transformations ● Innovation ● Industry ● Financial Acumen ● Legal/Corporate Governance ● Mergers & Acquisitions
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20Corporate Governance
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UnderNasdaq, where the listing standardsCompany’s common stock is listed, established exemptions from its governance requirements for “controlled companies,” defined as companies in which a single person, entity, or group holds more than 50% of the Nasdaq Global Market, we are deemedvoting power for the election of its directors. The Company is a controlled company by virtue“controlled company” because Trust K, discussed below, has the power to vote approximately 94.5% of the fact that Terence E. Adderley,Company’s outstanding shares of Class B Common Stock.
In keeping with the Executive Chairman and ChairmanCompany’s historic recognition of the Boardimportance of Directors, and certain trusts of which he acts as trustee or co-trustee, have voting power with respect to more than fifty percent of our outstanding voting stock. A controlled company is not required to have a majority of its Board of Directors comprised of independent Directors. Director nominees are not required to be selected or recommended for the Board’s consideration byhaving a majority of independent Directors or a Nominating Committee comprised solely of independent Directors, nor dodirectors, the Nasdaq Global Market listing standards require a controlled companyCompany elected to certify adoption of a formal written charter or Board resolution, as applicable, addressing the nominations process. A controlled company is also exempt from Nasdaq Global Market requirements regarding the determination of Officer compensation by a majority of independent Directors or a Compensation Committee comprised solely of independent Directors. A controlled company is required to have an Audit Committee composed of at least three Directors who are independent as defined under the rules of both the Securities and Exchange Commission (“SEC”) and the Nasdaq Global Market. The Nasdaq Global Market further requires that all members of the Audit Committee have the ability to read and understand fundamental financial statements and that at least one member of the Audit Committee possesses financial sophistication. The independent Directors must also meet at least twice a year in meetings at which only they are present.
The Company’s leadership is vested in the Executive Chairman and Chairman of the Board of Directors (the Company’s controlling stockholder), a Lead Independent Director, and the Chief Executive Officer, subject to the overall authority of the Board of Directors. The Executive Chairman and Chairman of the Board of Directors’ duties include establishing the schedule of Board meetings; establishing the agenda for Board meetings; presiding over meetings of the Board of Directors and stockholders; and leading the Directors in the exercise of their stewardship and oversight obligations. The Executive Chairman and Chairman of the Board of Directors is also charged with facilitating communication between the Board of Directors and management, both inside and outside of meetings of the Board. As long as the Executive Chairman and Chairman of the Board of Directors is not an independent Director, the independent Directors are required under the Board’s Corporate Governance Principles to elect one of the independent Directors as Lead Director. The Lead Director’s principal duties are to ensure the Board functions independent of management, to preside at meetings of the Board of Directors in the absence of the Executive Chairman and Chairman of the Board of Directors, to assist in the development of the agendas for meetings of the Board, to preside over meetings of the independent Directors in executive session, and to provide feedback to the Executive Chairman and Chairman of the Board of Directors and the Chief Executive Officer on those sessions. The principal responsibilities of the Chief Executive Officer are to develop and lead the Company’s management team to effectively and efficiently produce results that are in keeping with the strategic initiatives and corporate policies established by the Board of Directors.
This leadership approach is intended to serve the interests of all stockholders of this controlled Company, which has historically recognized the importance of an independent majority of its Board of Directors.
We comply voluntarily with all the Nasdaq listing standards of the Nasdaq Global Market that otherwise do not apply to controlled companies, except that ourcompanies. Thus, a majority of the Board are independent directors and all members of the three Board Committees, Audit, Compensation and Talent Management, and Corporate Governance and Nominating, Committeeare independent.
Prior to his death in October 2018, Terence E. Adderley, our former Chairman, was the trustee of Trust K. Upon his death, Trust K became irrevocable and, in accordance with the provisions of the trust, Andrew H. Curoe, David M. Hempstead, and William U. Parfet were appointed as successor trustees (the “co-trustees”). The co-trustees act by a majority vote when making investment decisions with respect to the voting shares held by Trust K. The co-trustees, acting as a majority, have sole voting and investment authority over Trust K and cannot be removed or replaced by the beneficiaries of Trust K.
William U. Parfet, a co-trustee, is not composed entirelythe brother of Donald R. Parfet, director and former Chairman of the Board. In determining that Donald R. Parfet is an independent Directors.director, the Board considered, among other things, that Donald R. Parfet and William U. Parfet are financially independent of one another, that the co-trustees are required to act by majority vote and that none of the co-trustees serves as an officer or director of the Company or has any personal financial interest in Trust K that could benefit from actions taken by the Board.
Role of the Board of Directors
The Board bears responsibility for the oversight of management on behalf of shareholders to ensure long-term value creation. The Board oversees and provides guidance for the Company’s business, property, and affairs. On an ongoing basis, the Board oversees management’s development and implementation of the Company’s strategy and business planning process, and monitors performance relative to the achievement of those plans. The Board sets the tone at the top to support a corporate culture that emphasizes ethical standards, professionalism, integrity, and compliance. The Board and its committees consider long-range strategic issues and material risks facing the Company, together with management’s actions to address and mitigate these risks; oversee corporate policies and processes to promote and maintain the integrity of the Company’s financial reporting and controls, legal and ethical compliance, and relationships with customers and suppliers; review the Company’s environmental, social and governance (“ESG”) and sustainability practices and strategies; and provide oversight relative to the compensation of senior management, leadership development, and management succession planning.
As part of its oversight of the strategic direction of the Company, senior leadership presents to the Board at the beginning of each year the annual business plans for each business unit and the consolidated annual business plan for the Company as a whole. At each subsequent meeting throughout the year, management shares quarterly performance results for each business unit and the whole Company, and the Board benchmarks these outcomes to the annual plans. Each year, the Board engages in a two-day offsite strategic planning meeting with management where it conducts a comprehensive review and discussion of the Company’s strategic direction and goals over the short-, medium-, and long-term, as well as management’s plans to achieve such goals. At least twice each year, the business unit presidents provide an in-depth review and update of their businesses to the Board, which includes a review of the strategic goals of the business and business performance relative to business strategy.
Board Leadership and Governance Structure
The Company’s Board structure affords independent Board leadership and the flexibility to ensure a diverse, independent and effective Board. At the present time, the roles of the Chairman of the Board and the Chief Executive Officer are separate, with the Chairman being an independent director, which provides independent Board leadership and allows the Chief Executive Officer to concentrate on the Company’s business. Terrence B. Larkin serves as Chairman of the Board and Peter W. Quigley serves as Chief Executive Officer.
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Corporate Governance
The Chairman of the Board’s duties include consulting with and advising our Chief Executive Officer, presiding over meetings of the Board and, together with our Chief Executive Officer, presiding over meetings of shareholders. The Chairman of the Board’s duties also include providing effective leadership to the Board including ongoing monitoring of its performance, compliance with governance requirements and best practices, serving as liaison among the Chief Executive Officer and the independent directors, establishing the annual schedule for Board meetings (in consultation with the Chief Executive Officer), developing and approving agendas for Board meetings, working with the Chief Executive Officer to ensure that information flows to the Board to facilitate understanding of, and discussion regarding, matters of interest or concern to the Board, approving the information sent to the Board for meetings, establishing the schedule and agendas for and presiding over meetings of the independent directors in executive session, providing feedback to the Chief Executive Officer on those executive sessions, authority to call and preside over special meetings of the Board, and facilitating discussions among directors on key issues outside of Board meetings.
In the event that the Chairman of the Board is not an independent director, the Company’s Corporate Governance Principles provide that the independent directors will elect one of their number to serve as Lead Director and fulfill many of the Chairman of the Board’s current responsibilities.
The Chief Executive Officer is responsible for managing the business and affairs of the Company, subject to the oversight of the Board. The Chief Executive Officer’s duties include: providing leadership to the Company’s management team; developing and presenting to the Board the Company’s strategy and long-term plans, medium-term plans and annual budgets, and within this framework, the performance of the business; complying with legal and corporate governance requirements, making recommendations on the appointment and compensation of executive officers, management development, and succession planning; representing the Company externally; consulting with the Chairman of the Board about developments in the Company; and communicating with all directors about key issues outside of Board meetings.
Committees of the Board
The Board has established three standing committees: Audit Committee, Compensation and Talent Management Committee, and Corporate Governance and Nominating Committee. Each committee functions under a written charter adopted by the Board, which is available on the Company’s website at kellyservices.com or to any shareholder who requests a copy. The members, responsibilities, and the number of meetings each of these committees held in 2023 are shown below.
Audit CommitteeAll Independent
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Compensation and Talent Management Committee All Independent |  | Corporate Governance and All Independent |
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Corporate Governance
| Audit Committee |
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Key Responsibilities: ● Oversees and reports to the Board with respect to the quality, integrity, and effectiveness of the Company’s financial statements, accounting, and financial reporting processes, and audits of the financial statements and internal controls over financial reporting ● Appoints, compensates, and evaluates the qualifications, independence, and performance of the independent auditor ● Oversees the performance of the internal audit function, including the Chief Audit Executive (“CAE”) ● Oversees the Company’s Enterprise Risk Management Program ● Reviews and discusses with management the Company’s major financial, security, and cybersecurity risk exposures, artificial intelligence and the steps management take to monitor and control such exposures ● Monitors the Company’s compliance with legal and regulatory requirements ● Oversees sustainability/ESG disclosures, controls, processes, and assurance ● Reviews and approves related party transactions ● Serves as the Company’s Qualified Legal Compliance Committee with respect to reports of potential material violations by the Company or its officers, directors, employees, or agents, of applicable U.S. federal or state law or fiduciary duty arising under such law, and of the Company’s policies including the Code of Business Conduct and Ethics ● Reviews and approves Internal Audit’s budget and resource plan ● Regularly holds separate sessions with Kelly’s management, internal audit, and its independent auditor The Board unanimously determined that each member of the Audit Committee meets Nasdaq’s “financial sophistication” requirements and that Mr. Cubbin and Ms. Murphy each has the financial education and experience to qualify as an “Audit Committee financial expert” within the meaning of SEC regulations. | ||||||||
Members: All Independent ● Leslie A. Murphy ● Gerald S. Adolph ● Robert S. Cubbin ● Amala Duggirala Meetings in 2023: 4 | ||||||||
| Compensation and Talent Management Committee | ||||||||
Key Responsibilities: ● Develops the Company’s compensation philosophy ● Designs and administers the Company’s executive compensation programs and policies aligned with business and compensation objectives ● Determines annually, for senior officers (including the CEO), corporate and business unit goals and establishes the level of performance that must be achieved for each ● Evaluates and determines the compensation of the CEO, senior officers, and Section 16 officers ● Reviews stock ownership requirements for senior officers and Board members and compliance with the requirements ● Reviews and makes recommendations to the Board concerning director compensation ● Reviews and advises the Board concerning CEO and senior officer succession planning and developmental opportunities | ||||||||
Members: All Independent ● Robert S. Cubbin ● Gerald S. Adolph ● InaMarie F. Johnson ● Leslie A. Murphy Meetings in 2023: 4 | ||||||||
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Corporate Governance
● Reviews and makes recommendations to the Company’s ESG Strategy and related risk management policies and procedures relative to human capital management ● Appoints, compensates and oversees the work performed by an independent compensation or legal advisor ● Oversees the Company’s strategies, initiatives, and programs related to human capital management and determines their effectiveness, including with respect to diversity, equity, and inclusion, workplace and culture, benefits and well-being, employee engagement, performance management, and talent recruitment, development, and retention Compensation and Talent Management Committee Interlocks and Insider Participation During 2023, none of the Company’s executive officers served on the Board of Directors of any entities whose directors or officers served on the Company’s Compensation and Talent Management Committee. No current or past executive officers of the Company or its subsidiaries serve on the Compensation and Talent Management Committee. | ||||||||
| Corporate Governance and Nominating Committee | ||||||||
Key Responsibilities: ● Develops and oversees compliance with the Company’s Corporate Governance Principles ● Reviews and makes recommendations to the Board with respect to corporate governance matters generally ● Engages in succession planning for our Board of Directors ● Makes recommendations to the Board regarding the size, composition, and leadership structure of the Board and its committees ● Identifies and assesses the independence, backgrounds, and skills required for members of the Board and Board committees ● Identifies, considers, and recommends, consistent with criteria approved by the Board, qualified candidates for election as directors, including the slate of directors to be nominated by the Board for election at the Company’s Annual Meeting ● Oversees the orientation and education of new directors ● Facilitates the annual assessment of the performance of the Board and its committees, as well as the director peer review ● Oversees and periodically reports to the Board on matters concerning the Company’s Corporate ESG Strategy including corporate responsibility and sustainability performance ● Reviews and makes recommendations to the Board regarding corporate governance trends, best practices, and regulations applicable to the corporate governance of the Company | ||||||||
Members: All Independent ● Gerald S. Adolph ● Robert S. Cubbin ● Amala Duggirala ● InaMarie F. Johnson Meetings in 2023: 4 | ||||||||
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Corporate Governance
Committees of the BoardRisk Governance and Oversight
The full text of our Board’s Corporate Governance PrinciplesRisk is inherent in business, and the charters ofwhile management is responsible for managing risk, the Board’s three standing committees, which are an Audit Committee, a Compensation Committee,oversight, assessment, and a Corporate Governance and Nominating Committee, are available on the Company’s website atkellyservices.com.The following table sets forth the Board committees and the current members of each.
Audit
| Compensation
| Governance and
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Terence E. Adderley
| ü | |||||
Carol M. Adderley
| Vice Chair
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Carl T. Camden
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Robert S. Cubbin *
| ü
| ü
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Jane E. Dutton *
| ü
| Chair
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Terrence B. Larkin *
| ü
| ü
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Conrad L. Mallett, Jr. *
| ü
| ü
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Leslie A. Murphy *
| Chair
| ü
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Donald R. Parfet * (Lead Director)
| ü
| ü
| ü
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Hirotoshi Takahashi*
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B. Joseph White *
| Chair
| ü
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Number of Meetings Held in Fiscal Year 2015
| 5
| 6
| 3
|
|
Directors are expected to attend the Annual Meeting of the Stockholders, all Board meetings, and all meetings of the committees on which they individually serve. The Board held eight meetings during 2015. All Directors attended the 2015 Annual Meeting of Stockholders on May 6, 2015,decisions regarding risks occur in conjunction with the exception of Mr. Takahashi who was named as a Director on August 1, 2015. Director attendance averaged ninety-six percent of the aggregate number of meetings of the Board of Directors and the committees on which they served during 2015. Mr. Takahashi attended two of the three Board meetings that occurred after he was named as a Director in 2015. Mr. Takahashi is not a member of any committees. The independent Directors are required to, and did, meet in meetings at which only they were present at least twice during 2015.
The Audit Committee is composed of R.S. Cubbin, T.B. Larkin, C.L. Mallett, Jr., L.A. Murphy (Chair), and D.R. Parfet, all of whom are independent Directors. The Audit Committee held five meetings in 2015. The Audit Committee’s purpose is to oversee the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company. The Audit Committee’s responsibilities are detailed in its charter, which is posted on the Company’s website atkellyservices.com, and include monitoring the integrity of the Company’s financial statements, the Company’s system of internal controls over financial reporting, the qualifications, independence, and performance of the Company’s independent registered public accounting firm, the qualifications and performance of the Company’s internal auditors, the Company’s risk assessment and risk management processes, and the Company’s compliance with legal and regulatory requirements.
The Audit Committee approves (or ratifies if approved under authority delegated to the Chief Financial Officer (“CFO”) all audit, audit related, internal control related, tax, and permitted non-audit services of the independent registered public accounting firm prior to engagement. The Audit Committee also serves as the Company’s Qualified Legal Compliance Committee.
The Board has unanimously determined that L.A. Murphy qualifies as an “Audit Committee financial expert” within the meaning of SEC regulations and as such meets the “financial sophistication” requirements under current Nasdaq Global Market listing standards. Each of the other members of the Audit Committee has the requisite understanding of financial statements to serve as a member of the Audit Committee. At least one member of the Audit Committee has financial management expertise.
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The Compensation Committee’s current members are R.S. Cubbin, J.E. Dutton, T.B. Larkin, L.A. Murphy, D.R. Parfet, and B.J. White (Chair), all of whom are independent Directors. The Compensation Committee is charged with developing the Company’s compensation philosophy and establishing and monitoring compensation programs for all employees. The Compensation Committee held six meetings in 2015.
The Compensation Committee reviews and approves all adjustments in compensation for Senior Officers (defined as Senior Vice President (“SVP”) and above levels) including the administration of base salaries, short-term incentive awards under the Company’s Short-Term Incentive Plan (“STIP”), and long-term incentive awards under the Company’s Equity Incentive Plan (“EIP”). The Senior Officer group includes our Executive Officers, from which the Named Executive Officers are derived. The authority of the Compensation Committee is detailed in its charter, which is posted on the Company’s website atkellyservices.com.
To assist the Compensation Committee in making compensation recommendations for Senior Officers, the Company’s Human Resources group provides the Compensation Committee with historical, survey, and benchmark compensation data. The Compensation Committee also relies on the CEO and the other Named Executive Officers to provide performance evaluations and compensation recommendations to assist in its decisions regarding the total compensation of Senior Officers. The Compensation Committee has delegated to the CEO the authority to approve salary recommendations and incentive awards to Officers below the level of SVP.
The Compensation Committee has the authority to retain independent consultants. Retained consultants report directly to the Compensation Committee which determines the consultants’ scope of work and fees. In 2015, the Compensation Committee retained Pay Governance LLC (the “Consultant”) to provide assistance with the review of Executive and Director compensation. The Compensation Committee conducted an assessment of the Consultant’s independence using factors established by the SEC and Nasdaq, and affirmed the independence of Pay Governance, LLC.
During 2015, none of the Company’s Executive Officers served on the Board of Directors of any entities whose Directors or Officers served on the Company’s Compensation Committee. No current or past Executive Officers of the Company or its subsidiaries serve on the Compensation Committee.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee, whose current members are C.M. Adderley (Vice Chair), T.E. Adderley, J.E. Dutton (Chair), C.L. Mallett, Jr., D.R. Parfet, and B.J. White, held three meetings during 2015. The Corporate Governance and Nominating Committee’s responsibilities include: assisting the Board of Directors in identifying individuals qualified to become Directors; recommending to the Board the nominees for the next Annual Meeting of Stockholders or to otherwise fill vacancies and newly created directorships; overseeing the composition, organization, and governanceactivities of the Board and its committees; monitoringcommittees.
Risk Governance and evaluating Board and committee effectiveness; and developing and overseeing complianceOversight Responsibilities
Board of Directors | ||
Oversees mission critical risks to the Company, including strategic issues and risks, as well as management’s actions to address and mitigate those risks. The Board receives reports at regular Board meetings from the committee chairs regarding committees’ risk oversight activities. These reports and Board attention focus on risk management strategy and risks of greatest significance and seek to ensure that risks assumed by the Company are consistent with the Company’s risk tolerance and risk appetite. Risk oversight is also addressed as part of the full Board’s regular oversight of strategic planning. | ||
Audit Committee | Compensation and Talent Management | Corporate Governance and Nominating | ||
● Provides oversight of risks, and management’s mitigations of same, that could have a financial impact, such as financial reporting and disclosure, accounting practices, internal controls, conflicts of interest, compliance with legal and regulatory requirements, and cybersecurity ● Oversees the Company’s overall risk management governance structure, risk assessment, and enterprise risk management processes ● Oversees risks associated with information technology security, cybersecurity, artificial intelligence, and data privacy, and breach preparedness and response plans ● Reviews all quarterly and annual reports, including any disclosure of risk factors affecting the business ● Oversees the performance of the Company’s Internal Audit function including Chief Audit Executive (“CAE”) ● Reviews and approves Internal Audit’s budget and resource plan ● Monitors the qualifications, performance, and independence of the Company’s independent auditors | ● Oversees our compensation plans, policies, and practices to ensure alignment with our Executive Compensation Risk Assessment Framework and reports to the Board any compensation program that is reasonably likely to have a material adverse effect on the Company ● Together with the Committee’s independent consultant, provides input to management regarding their annual assessment of potential risks created by our compensation plans, policies, and practices ● Sets performance goals under our annual and long-term incentive plans that provide an appropriate balance between the achievement of short- and long-term performance objectives, with emphasis on managing the sustainability of the business and mitigation of risk ● Manages risk associated with CEO and senior officer succession planning ● Oversees management of risks related to the Company’s human capital ● Oversees the Company’s Clawback Policy | ● Manages risk associated with governance issues, such as the independence, skills, experience and diversity of the Board and its committees, Board and committee effectiveness and organization, corporate governance, and director succession planning ● Maintains Corporate Governance Principles and procedures designed to assure compliance with all applicable legal and regulatory requirements and governance standards and the Company’s Code of Business Conduct and Ethics and Insider Trading Policy ● Annually reviews the Company’s ESG Strategy, initiatives, and policies and monitors associated risk (including reputational) ● Oversees emergency succession planning for the CEO and Chairman ● Oversees the orientation and education of directors to ensure clear understanding of their Board responsibilities and recommends continuing education programs, as appropriate. |
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Corporate Governance Principles.
| Management | ||
Management assesses and manages critical risks, including the execution of the Company’s Enterprise Risk Management (“ERM”) program. The Company’s risk-related departments and functions, in collaboration with the Vice President and Chief Risk, Compliance, and Privacy Officer (“Chief Risk Officer”), are responsible for risk assessment and mitigation. The Chief Risk Officer reports directly to the Company’s Senior Vice President, General Counsel and Corporate Secretary (“General Counsel”). For ESG-related risk, the Company maintains the ESG Advisory Committee to oversee goals and progress toward the achievement of goals as established by the ESG team. The ESG Advisory Committee meets monthly and includes the following members from cross-functional areas of the organization: the Company’s General Counsel, Chief Financial Officer, Chief People Officer, Chief Risk Officer, Chief Diversity Officer, Chief Accounting Officer, Chief Audit Executive, Corporate Sustainability Specialist, and representatives from the Company’s business units. The General Counsel reports results of the ESG Advisory Committee reviews to the Corporate Governance and Nominating Committee on a quarterly basis. With respect to the risk assessment of the Company’s compensation programs, management is responsible for the framework and approach as outlined below under Risk Assessment of Employee Compensation Programs. | ||
The Board’s oversight responsibilities include consideration of strategic issues and risks to the Company as well as management’s actions to address and mitigate those risks. Through its charter, the Audit Committee is charged by the Board with overseeing the Company’s risk assessment and risk management processes. The Audit Committee and Board focus on risk management strategy and risks of greatest significance, and seeks to ensure that risks assumed by the Company are consistent with the Board’s risk tolerance and risk appetite.
While the Audit Committee has responsibility for the oversight of the risk assessment and risk management process, it is the duty of the Company’s management to assess and manage critical risks, including the execution of its Enterprise Risk Management (“ERM”) program. Program
The Company’s risk-related departments and functions are under the direction of the Senior Vice President, General Counsel, and Chief Administrative Officer.
The Company continues to support and expand upon its formal ERM program established in 2007, which is a criticalserves as the primary means of identifying and managing the Company’s key risks. Since its inception, theThe Company’s ERM team, has, among other activities, performedperforms assessments of risks to the Company, participatedparticipates in the development and execution of mitigation programs for critical risks, facilitatedfacilitates the establishment of a corporate risk appetite and tolerance statement, inclusive of an oversight and monitoring mechanism, established aoversees the privacy governance function, provides risk assessment, guidance, and assistedmitigation related to cybersecurity, and assists in the integration of risk concepts within the Company’s strategic planning process.
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process and in alignment with the functional and business risk owners.
The ERM team reports its findings to the Audit Committee on a quarterly basis.basis, providing both written reports and in-person presentations. Its current activities remain focused on mitigation and oversight of specific risk exposures, analysis of the breadth and effectiveness of existing risk management practices, and maturation of measurement and monitoring practices concerning high-priority strategic and operational risks. Current areas of particular emphasis include cybersecurity, artificial intelligence, data privacy, strategic risk , integration of risk appetite practices into the Company’s ongoing operations, wage-hour risk , third-party risk , and improvements to the Company’s compliance governance practices.
The Company’s information technology and internal audit groups provide regular quarterly updates to the Audit Committee with respect to the Company’s proactive approach to cybersecurity and other compliance controls. Controls are reviewed for operational effectiveness and to provide reasonable assurance that: business risk is managed; data, corporate information, and other assets are safeguarded; business processing infrastructure and applications are maintained; and all risks are mitigated to the extent practicable.
The Company’s ERM program provides ongoing risk identification, oversight, guidance, and mitigation in coordination with the Company’s information technology group. Teams from the Company’s information technology, data privacy, and compliance functions coordinate on cybersecurity, artificial intelligence, and privacy governance. This includes internal monitoring to proactively identify potential security threats, maintenance of access controls, asset management, response and recovery activities, and training and awareness programs. The company’s training program provides specialized training on a quarterly basis to employees and directors, including mandatory new hire cyber security.and privacy training, two focused cyber trainings per quarter, and monthly training exercises for identifying phishing attempts. Evaluation of these practices is reported to the Audit Committee on a quarterly basis.
In addition to the reports submitted quarterly by the Company’s Vice President and Chief Risk Compliance, and Privacy Officer, the Vice President of Internal Audit independently assesses the Company’s risk management process and separately reports toon the Audit Committee concerningeffectiveness of the Company’s risk identification, prioritization, and mitigation processes.processes to the Audit Committee.
The ERM team plays a key role in the Company’s response to domestic and global crises, e.g. the COVID-19 pandemic and the Russian invasion of Ukraine, providing Board updates and scenario planning regarding impacts on cybersecurity, employee health and safety, corporate operations, and global markets.
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Corporate Governance
INFORMATION SECURITY AND BUSINESS CONTINUITY | ||||||
| Emergency Management Team Global, interdepartmental group empowered to quickly make strategic decisions in response to critical events that affect our employees or facilities. |
| Third Party Risk Management We monitor critical engagements with vendors and partners for cyber risk to reduce third-party exposure. | |||
| Business Continuity Plan Testing Kelly’s Business Continuity and IT Disaster Recovery programs are tested at least annually and most recently tested in August 2023 and October 2023, respectively. These plans performed successfully in practice and real-world scenarios. |
| Training and Awareness We train employees on industry-specific cybersecurity threats and test to identify common attack vectors, including business email compromise, domain spoofing, social engineering, and other phishing techniques. | |||
| Cyber Governance Kelly uses external frameworks to assess the Company’s cybersecurity maturity as well as internal governance structures to mitigate cybersecurity risks. |
| External Assessments Kelly adopted the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) and measures our cyber maturity through an annual assessment by a third-party aligned with NIST SP 800-53 Security and Privacy Controls for Information Systems and Organizations. | |||
Risk Assessment of Employee Compensation Programs
As set forth in its charter, the Compensation Committee is charged with reviewing the Company’s compensation program risk assessment for all employee compensation programs and to report to the Board any compensation program that is reasonably likely to have a material adverse effect on the Company.
AtAnnually, at its February 2016 meeting, the Compensation and Talent Management Committee reviewedreviews management’s Compensation Program Risk Assessment Report. The report wasReport, prepared by the Company’s Human ResourcesCompensation group in collaboration withand reviewed by the Company’s Internal Audit DepartmentGeneral Counsel. The review and Risk Management group. The Company’supdate of the Executive Compensation Program Risk Assessment Framework is reviewed and updatedoccurs, as needed, including review by the independent compensation consultant, to ensure a robust and comprehensive assessment process.
The Company’s Executive Compensation Program Risk Assessment Framework takes into consideration the following factors:
The Company’s Executive Compensation Program Risk Assessment Framework takes into consideration the following guiding factors: | ||
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●A balanced compensation structure | ||
●Performance criteria and corresponding objectives include a balance of performance and the quality of such performance; include the appropriate use of | ||
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●Incentive plans | ||
●A thorough and qualitative assessment of | ||
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●Implementation of risk-mitigating features such as a | ||
●Incentive plan governance includes involvement at a variety of levels from the Compensation and Talent Management Committee to various corporate functions | ||
●Potential risk | ||
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Corporate Governance
To assess the risk of employee compensation programs below the executive level, the Company utilizedCompany’s Compensation group implemented an internal Governance Committee to review and approve plan design and address any significant issues that arise. The Governance Committee utilizes its Global Incentive Plan Design and Risk Mitigation Framework to consider linksalignment to the Company’s strategy and any risks associated with the design of each incentive plan. The risks associated with each of the following elements of the design and implementation of aneach incentive plan were considered, as well as the steps in place to mitigate risk and ensure alignment with the Company’s strategic plan:
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25
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After due consideration of management’s 20162023 Compensation Program Risk Assessment Report, the Compensation and Talent Management Committee concluded that the Company’s compensation programs do not create a reasonable likelihood of a material adverse effect on the Company.
Kelly’s Corporate Sustainability and ESG Strategy – Growing with Purpose
Kelly recognizes the critical importance of sustainability in addressing the world’s most pressing environmental and social challenges. Kelly’s approach is based on the concept of creating shared value. We aim to create economic value by addressing societal needs and going beyond traditional corporate social responsibility. Our focus on sustainable growth helps us manage risks efficiently while we continue to develop long-term business opportunities.
In 2023, our Corporate Sustainability and Environmental, Social, and Governance Strategy (“ESG Strategy”) was primarily focused on strengthening relationships and alignment between our key corporate functions and business teams, which continue to set the stage for our sustainability goals moving forward. To ensure alignment, we expanded our ESG Advisory Committee with a representative from each of our Business Units. Additionally, we integrated our sustainability and ESG efforts with Enterprise Risk Management for optimal organizational synergy. From strengthening relationships with stakeholders through community focus and an emphasis on skills-based volunteering, to eliminating barriers to accessing work opportunities with programs like Equity@Work, we consistently create shared value.
Our ESG Strategy aligns to Kelly’s Enterprise Goals and growth strategy with seven core pillars responding to stakeholder expectations and critical risks and opportunities across environmental, social, and governance issues. These core pillars are based on nine United Nations Sustainable Development Goals (“UN SDGs”) and support all programs and initiatives within our Corporate Sustainability and ESG strategy to ensure that internal resources and activities positively impact our triple bottom line.
Stakeholder engagement: We continually engage with diverse stakeholders through various ongoing initiatives and activities to better understand their concerns and deliver added value of our services.
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Corporate Governance
Stakeholder Perception Analysis (formerly referred to as Materiality): Our ESG Strategy is anchored in a formal assessment that analyzes environmental, social, and governance issues with respect to stakeholder relevance, the severity to business risk, and the impact on our business success. We conducted our latest assessment in 2021 through surveys, with participation from a group of diverse stakeholders representing suppliers, customers, Kelly employees, talent, and other stakeholders. Kelly’s most recent assessment considered a “double materiality” analysis to assess the level of risk that each ESG issue could have on the business from a financial and non-financial perspective, including our license to operate and impact on the overall value of our organization.
Board ESG Oversight: Our Board of Directors is responsible for overseeing the effective execution of our ESG strategy along with multiple Board committees that oversee various ESG topics. Our Governance and Nominating Committee provides oversight to Corporate Governance principles and ESG strategy policies, initiatives, and associated risk. Our Audit Committee plays a key role in the Board’s risk oversight process particularly with financial impact risk, and risks associated with information security. Our Compensation and Talent Management Committee provides oversight to talent attraction, retention, and compensation plans, policies, and practices. Senior management reports to the Board on key ESG topics at least bi-annually through our ESG Advisory Committee comprised of a diverse and multidisciplinary leadership team.
2023 Goals and Achievements
Beginning in 2022, our strategy shifted focus to long-term sustainability goals. These goals address the interconnected challenges of social, economic, and environmental sustainability, with the intent to balance the needs of present and future generations. In 2023, we continued to report on progress towards these objectives, and to show transparency and accountability in our actions.
Environmental:
Kelly is committed to protecting our planet for future generations. Our environmental initiatives focus on providing safe and sustainable work environments for our employees and talent while mitigating the environmental footprint of our operations.
2023 Environmental Highlights:
Green House Gas (“GHG”) emission reduction. We continue to adjust our carbon emissions and improve calculation methodologies across all scopes, while expanding the approach of Scopes 1 and 2 to include global locations within our operational control. In 2023, we updated our climate risk assessment and continued to pursue a climate strategy to mitigate, remove, and compensate for our impact, and align emission reduction targets to limit global warming to a 1.5°C ambition level by 2050. We use a climate change scenario approach to help us explore different possible outcomes and inform decision-making and planning. We communicate our progress on climate-related disclosure metrics through our annual Corporate Sustainability and ESG report, Carbon Disclosure Project (“CDP”), and external sustainability assessments that evaluate our performance.
Workplace safety solutions and performance across our specialty businesses. Since 2010, Kelly has maintained our zero-injury program, Absolute Zero. In 2023, the Company outperformed our peers in the staffing industry by 91% Total Recordable Incident Rate (“TRIR”) and 92% Days Away/Restricted and Transferred Incident Rate (“DART”) compared to 2022 Bureau of Labor Statistics (“BLS”) industry averages. Current year industry averages were not available at the time of publishing. We began developing a technology tool within our internal risk management system that will allow us to track impactful metrics and capture incidents and accidents more consistently. The Company has one Certified Safety Professional (“CSP”) and one Certified Industrial Hygienist (“CIH”) on staff to serve as a resource to our clients and talent.
Social:
Kelly’s noble purpose is to connect people to work in ways that enrich their lives. We strive to contribute to a more inclusive and equitable workforce that creates better access, opportunities, fair treatment, and advancement for all people so that they may contribute to communities where they live and work. This drives our actions and allows us to create shared value for all our stakeholders.
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Corporate Governance
2023 Social Highlights:
Equity@Work as a shared value proposition. In 2023, we helped remove barriers to employment for approximately 5,639 individuals. Partnering with 45 clients across multiple industries including automotive, manufacturing, agriculture, logistics, and pharmaceuticals, we removed barriers such as testing, unnecessary interviews, and restrictive background and drug screens, to connect qualified individuals to meaningful work. Clients implementing Equity@Work see positive outcomes, including reduced turnover and improved fill rates. We engage with entities such as the Departments of Corrections in Iowa, Pennsylvania, Kentucky, Tennessee, and Missouri, as well as impactful non-profits like the Vera Institute of Justice, Responsible Business Initiative for Justice, and the Second Chance Business Coalition. Partnering with organizations and industry allies such as the American Staffing Association (ASA) and CEO Action, we amplify initiatives like Equity@Work and the Kelly33 second chance hiring program.
Giving back in communities where we live and work. We launched a new technology platform to capture corporate volunteering and empower our employees with volunteering and giving initiatives, while increasing collaboration on social impact opportunities. In 2023, we achieved over 6,600 hours of volunteering, engaging more than 840 employees in the U.S. and Canada.
Kelly employees contributed over $26,800 towards our Kelly Relief Fund and roughly $7,200 in grants were distributed to support 6 employees in need. In addition, approximately 520 employees contributed nearly $71,000 towards charitable giving opportunities during Kelly’s annual benefits enrollment. The Company donated approximately $158,481 towards social investment programs and charitable organizations, committed to increasing education, training, and employment networking opportunities for underserved talent. By investing in local organizations aligned with our business strategy and core values, we increase our shared value and leverage our effort for providing inclusion and equality for the workforce.
Strengthened our Employer Value Proposition (EVP) and engagement. We modified our Kellyemployee engagement survey process from a large, annual survey to quarterly pulse checks with intentional focus on more real-time and actional feedback especially as 2023 was a year of significant business transformation. Our year-end engagement score remained healthy at 75%. We also incorporated elements into internal onboarding , and communications with candidates, to highlight aspects such as work-life balance, learning and development, collaboration, cohesion, and organizational culture.
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Corporate Governance
Our eight Affinity Groups bring together over 930 employees who share similar affinities, backgrounds, and life experiences, as well as their allies. They focus on providing support, enhancing professional and personal development, and networking within the workplace. They are employee-led, collaborative groups who are committed to positively impacting our DEI pillars; Workforce, Workplace, Marketplace. In 2023, the Affinity Group’s conducted over 100 events including:
Listening sessions;
Career Development events;
Leadership forums;
Meet and Greet sessions;
Health programs;
Financial programs; and
Celebrate Together – a multicultural Affinity Group celebration to share holiday traditions, cultural expressions, ethnic cuisine, and 2023 achievements.
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Corporate Governance
Our Diverse Global Supplier Network connected approximately 465 diverse and underrepresented suppliers to our Kelly network in 2023. While this number is down from 2022, Kelly was still able to increase the impact of our program with diverse spend under management with diverse suppliers growing from $1.8B in 2022 to $2.2B in 2023.
Governance:
Kelly is committed to doing the right thing, conducting ourselves in a legal, ethical, and trustworthy manner, strictly upholding our regulatory obligations in every country we operate and complying with the letter and spirit of our business policies and values. Our commitment is to hold ourselves accountable for our actions and goals.
2023 Governance Highlights:
The production of our Growing with Purpose – Corporate Sustainability and ESG report is in accordance with Global Reporting Initiative (“GRI”) standards, Sustainability Accounting Standards Board (“SASB”), United Nations Global Compact (“UNGC”), and Securities and Exchange Commission (“SEC”) disclosures. Our 2022 ESG report that was published in May 2023, can be found on the Company’s website at kellyservices.com.
We continued annual training and acknowledgment of our global policies, with 93.5% of employees acknowledging our Code of Business Conduct and Ethics and completing global policy training on business ethics and human rights topics. We expect compliance with new and updated legislation and standards in all geographies in which we operate. In 2023, we continued ongoing efforts to strengthen Kelly’s protection of personal data with updates to our Information Security policies to ensure the highest information security standards across our network, including the adoption of international standard procedures to ensure ongoing compliance with the European Union’s General Data Protection Regulation (“GDPR”), California’s Consumer Privacy Rights Act, and all other data privacy laws and regulations in the geographies where we do business.
The Company participates in external assessments, such as EcoVadis, to analyze our performance and identify opportunities for improvement, while providing a consistent and transparent measurement for the impact of our ESG Strategy. According to EcoVadis, their rating covers a broad range of non-financial management systems including Environmental, Labor & Human Rights, Ethics and Sustainable Procurement impacts. This is the sixth consecutive year the Company has participated in the annual EcoVadis assessment and our first year to achieve “Gold” status, placing us in the top 3% of companies rated in the temporary employment industry.
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Corporate Governance
Human Capital
Kelly is a talent solutions company dedicated to connecting people to work in ways that enrich their lives, and our employees are critical to achieving this noble purpose. To compete and succeed in a highly competitive and rapidly evolving market, it is crucial that the Company attracts and retains experienced internal employees, as well as the talent we put to work for our customers. As part of these efforts, we strive to offer competitive total rewards programs, promote employee development, foster an inclusive and diverse environment, and give employees the opportunity to give back to their communities and make a social impact.
The Company is committed to the health, safety, and wellness of our employees and talent. The success of our business is fundamentally connected to the well-being of our people. Accordingly, we implement policies and practices that align with applicable laws and regulations and are in the best interest of our employees and talent, and the communities in which we operate.
| As of December 31, 2023 we employed approximately 3,700 staff members in the United States and an additional 2,500 in our international locations. The Company’s retention rates for employees identified as high performing and high potential employees align with our comparable benchmark. | |||
 | In addition to our internal employees, the Company recruits talent on behalf of customers on a global basis. In 2023, we placed more than 500,000 individuals in positions with our customers. When Kelly remains the employer of record for our talent working at customer locations, we retain responsibilities for all assignments (including ensuring appropriate health and safety protocols in conjunction with our customers), wages, benefits, workers’ compensation insurance, and the employer’s share of applicable payroll taxes as well as administration and payment of the employees’ share of these taxes. We also offer our talent access to competitive health and benefit programs while they are working with us. |
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Corporate Governance
 | The Company is committed to providing employees with competitive, equitable, and fiscally responsible total rewards opportunities. We align internal employee and shareholder interests with strong pay-for-performance linkages that include a mix of base salary, short-term incentives and, in the case of our more senior employees, long-term equity awards. We believe that our programs provide fair and competitive opportunities that attract, retain, and reward talented individuals who possess the skills necessary to achieve our strategic goals and create long-term value for our shareholders. In addition to cash and equity compensation, we also offer benefits such as life and health (medical, dental and vision) insurance, paid time off, wellness benefits, and defined contribution retirement plans. We review our compensation and benefit programs regularly and respond to changes in market practice and encourage our customers to do the same with respect to the talent we recruit on their behalf. Recent internal changes enhance our U.S. benefits program including additional time off for significant life events, a financial advisor program, support programs for certain chronic health conditions, and introduction of a well-being app. Pay and benefits programs provided to our international employees are in line with competitive local practice. |
 | Since 1946, our founder fought to increase access to work for women, and we’ve long been an outspoken advocate for the value temporary and independent workers bring to the workplace. We are committed to fostering an inclusive, equitable, and diverse workforce, which we believe produces more innovative products and services and results in our customers having access to the best talent in the marketplace. A significant majority of Kelly’s U.S. workforce are women, including a majority of director and above roles. In 2023, the Company was named America’s Best Temporary Staffing Firm by Forbes and one of the World’s Best Companies by TIME Magazine. Additionally, Kelly earned the 2024 Military Friendly Spouse Employer Designation. Kelly is a workplace leader in creating an inclusive environment with diverse teams, aiding our ability to attract and retain high-performing talent. The Company fosters a culture of belonging, where everyone feels welcomed and respected and can thrive as we work together. Kelly promotes employee development and internal career mobility to enable our team to achieve their full potential and ensure we have the evolving workforce capabilities that the future demands. |
 | We consider sustainability a guiding principle in strengthening the relationship with our global workforce, suppliers, and customers. Through our programs and initiatives, we seek to improve the quality of life of our employees, their families, and the communities in which they live and serve. Designed on the concept of social investment and nurturing shared values, our approach ensures the creation of future development capacities instead of aiding on isolated occasions. We support initiatives where our employees can actively engage in the causes they believe in, that are also connected to our sustainability strategy. For more information on our diversity, equity, and inclusion and community involvement initiatives, please see our Sustainability Report – Growing with Purpose at kellyservices.com. |
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Corporate Governance
Director Selection Process
The Corporate Governance and Nominating Committee is responsible for the identification, screening, and recommending qualified candidates for nomination by the full Board. The Board of Directors, together with Corporate Governance and Nominating Committee, is committed to ensuring that: (1) the Board as a whole is composed with the right combination of knowledge, experience, continuity, reputation, and diversity that are pertinent to the Company’s operating environment and strategic direction; (2) the Board has the independence and competence to continue providing the high level of governance and oversight that the Company’s shareholders have come to expect; and (3) there is a seamless transition when a director decides to retire or step down from the Board. Among other aspects of the process, the Board of Directors: identifies the collective mix of desired skills, experience, knowledge, diversity, and independence for the Board of Directors, taken as a whole, and identifies potential opportunities for enhancement in one or more of those areas; considers each current director’s experience, skills, principal occupation, reputation, independence, age, tenure, committee membership and diversity (including geography, gender and ethnicity); and considers the results of the Board and committee self-evaluations, as well as feedback received during one-on-one interviews of each director. An independent third-party search firm is retained by the Committee, Evaluationwhich recommends candidates who satisfy the Board’s criteria. The search firm also provides research and pertinent information related to candidates as requested. Potential candidates are also suggested by several members of the Company’s Board and senior leadership team. An overview of the Board’s director selection process is provided below.
Annually,
Evaluate Board Composition | Using the Company’s Corporate Governance Principles, Board Composition Matrix, and Board self-evaluation process, the Committee (or subcommittee) evaluates the size, composition, priorities, and needs of the Board with respect to its desired experience, skills, and diversity in consideration of the Company’s current and anticipated business needs and strategies. | |
Identification of Potential Candidates | The Committee instructs the search firm to provide an initial pool of candidates that reflect gender, race, ethnic and cultural diversity, possess the core qualifications required, and includes the specific experience and skills as identified during the evaluation of current board composition. The Committee also encourages and considers candidate submissions from other directors and members of Company management. | |
Evaluation of Candidates | Through meetings with the Committee, a screening process of potential candidates is conducted with the independent external search firm that includes a thorough review of identified candidates’ qualifications, potential conflicts, independence, backgrounds, and experience to assess how each candidate fits the needs of the Company and Board. The candidate pool is narrowed for individual interviews with the Committee and full Board. Following the interviews, potential candidates are comprehensively reviewed and the subject of rigorous discussion during Committee and Board meetings. | |
Recommendation | Interview and discussion feedback are assessed, and the Committee recommends final candidate(s) to the full Board for appointment. | |
Review and Appointment by Full Board | The full Board appoints new director(s), who then stand for election by shareholders at the next Annual Meeting. | |
Director Attendance
We expect directors to attend the Annual Meeting of the Shareholders, all Board meetings, and all meetings of the committees on which they individually serve. All directors then in office attended the 2023 Annual Meeting of Shareholders. The Board held twelve meetings during 2023. Director attendance averaged 97.5% of the aggregate number of meetings of the Board and the committees on which they served during 2023. The majority of directors attended 100% of all Board and committee meetings on which they individually served in 2023. The independent directors met in executive sessions at which only they were present at least eight times during 2023.
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Corporate Governance
Size of the Board
Under the Company’s Amended and Restated Bylaws, the number of directors constituting the Board may be fixed by the Board within the range of five to eleven directors. The size of the Board should not exceed a number that, as determined by the Board, will permit it to function efficiently in discharging its duties. There are currently nine members of the Board. Election of all director nominees will result in a nine-member Board immediately following the Annual Meeting.
Director Tenure
The Board does not have term or age limits. The Board believes that the contributions and insight of tenured directors into the Company’s operations and strategy outweigh the perceived value of such limits and facilitate Board effectiveness.
Director Service on Outside Public Company Boards
While there is no specified limit on the number of other public company boards on which a director may serve, the number of board memberships is a consideration, along with any other time commitments a director or nominee may have, in determining his or her ability to serve effectively. Directors must be willing and able to devote sufficient time to carrying out their duties and responsibilities effectively and have an intention to serve an appropriate length of time in order to make a meaningful contribution to the Board and the Company. A director is expected to engage in discussion with the Chair of the Corporate Governance and Nominating Committee overseesprior to accepting an invitation to serve on an additional public company board or accepting an invitation to chair a committee of a public company board on which he or she currently serves.
Director Orientation and Continuing Education
Management, working with the Board’sCorporate Governance and Committees’ evaluation processNominating Committee, provides an orientation program for new directors to facilitate integration into their roles. The program acquaints new directors with the Company’s business, history, vision, noble purpose , strategic direction and reports results to the Board. The Board and each Committee conduct an evaluation of their respective performance, the purpose of which is to increase the effectiveness of the Board as a whole. The process includes an assessment of the Board and each Committee’s effectiveness and independence, responsiveness to shareholder concerns, and relationship with management. Some of the areas reviewed as part of the evaluation include Director obligations, roles and responsibilities, Board member qualifications, Board structure, corporate governance, organization performance, culture and ethics, and educational opportunities. Past evaluation outcomes have included defining the skills necessary for future Director candidates, extending the length of various meetings to ensure sufficient discussion time, and discussion of potential future Committee participation, establishment of Committee Vice Chairs, and Committee Chair succession.
plans, competitive landscape, core values, Code of Business Conduct and Ethics, Insider Trading Policy, other corporate governance practices, financial, accounting, and risk management matters, key policies, sustainability strategy, senior leadership, and internal and independent auditors. The program consists of, as appropriate, a comprehensive review of background materials, briefings by senior management, and visits to Company facilities. The Board also developed a mentoring program to provide additional support and resources to new directors. Based on the feedback from our directors, we believe this onboarding approach provides new directors with a strong foundation for understanding our businesses, connects directors with members of management with whom they will interact, and accelerates their effectiveness to engage fully in Board deliberations.
Directors are also encouraged to participate in continuing director education programs to help them stay current on emerging practices and issues and in carrying out their responsibilities. These programs include formal education sessions with management or third-party subject matter experts that may occur as part of regular Board or committee meetings, and participation in industry forums on business, financial, accounting, legal, and other subjects relevant to the Company’s business. The Company reimburses reasonable costs and expenses incurred by directors for continuing education that provide updates on issues and programs relevant to public companies and their directors.
Board, Committee, and Peer Evaluation
The Board hasrecognizes that a robust and constructive evaluation process is essential to good governance and enhanced effectiveness. The Corporate Governance and Nominating Committee organizes and oversees an annual evaluation by the Board and its committees of their performance. The evaluation facilitates an examination and discussion by the entire Board and each committee of its effectiveness in fulfilling its charter requirements and other responsibilities, its performance as measured against the Company’s Corporate Governance Principles, and areas for improvement. The evaluation also includes individual director assessments, typically in alternating years.
In 2023, the Corporate Governance and Nominating Committee engaged an independent external advisor to conduct Board and committee evaluations. The independent external advisor also conducted individual director assessments in 2023. The process included the completion of an online self-evaluation with rated and open-ended questions, with follow-up discussions by the advisor on certain individual responses, as needed. Each of the Board’s nine directors participated in the process.
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Corporate Governance
The typical process includes the following:
In addition to the annual formal evaluation, our Chairman, CEO, General Counsel and Corporate Secretary, and Committee Chairs routinely communicate with directors to obtain real-time feedback. The Board believes that this continuous feedback, along with the formal evaluation process, contribute to its overall strength and ongoing effectiveness.
The following actions have been taken by Kelly’s Board and its committees in response to the evaluation process over the years:
| ● | management with varying degrees of seniority present to the Board and its committees; |
| ● | director education and presentations on emerging risk areas including artificial intelligence, corporate governance, industry disruptors, and competitors; |
| ● | format of Board meetings made flexible to allow more time for formal and informal discussions among independent directors; |
| ● | increased opportunities for informal meetings between directors and key executives; |
| ● | increased time for informal director-only gatherings; and |
| ● | Board members added with expertise in areas critical to the Company’s business strategy and operations. |
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Corporate Governance
Code of Business Conduct and Ethics
The Board is committed to the highest legal and ethical standards and adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all Directors, Officers,directors, officers, and employeesemployees. Each year the Company performs a thorough assessment and benchmarking of the Code of Conduct to help themensure regulatory compliance and cultural alignment. The Code of Conduct forms the foundation for compliance with corporate policies and procedures and helps individuals recognize and deal with ethical issues, deter wrongdoing, provide mechanisms to report dishonest or unethicalany concerns, promote honest and ethical conduct, provide full, fair, and timely disclosure, comply with applicable law and regulations, and help foster a culture of honesty and accountability. The Code of Conduct addresses conflicts of interest,interest; anti-bribery/anti-corruption; trade compliance; insider trading; corporate opportunities,opportunities; confidentiality and privacy; external communications; financial reporting and record keeping; protection and proper use of assets,assets; fair dealing,dealing; contract management; acceptable behavior in the workplace,workplace; global diversity and inclusion; corporate sustainability; compliance with laws, rules and regulations,regulations; risk tolerance; anti-human trafficking and Company policies,slavery; health & safety and workplace violence; seeking advice and reporting concerns; outside activities; political contributions; public company reporting requirements,requirements; and providesother policies. The Code of Conduct includes an enforcement mechanism. Each of the Company’s Board members, officers, and employees is required to acknowledge their acceptance of the Code of Conduct.
The full text of the Code of Conduct is posted on the Company’s website atkellyservices.com.kellyservices.com. This information is also available in print to any stockholdershareholder who requests it from the Company’s Investor Relations Department.department. The Company will disclose future amendments to or waivers from, the Code of Conduct and material waivers of its provisions for its Directorsdirectors and Executive Officersexecutive officers on its website and/or by filing a current report on Form 8-K within four business days following the date of amendment or waiver, or such earlier period as may be prescribed by Nasdaq or the SEC.
Corporate Social ResponsibilityRelated Person Transactions and Certain Relationships
Pursuant to the Company’s Code of Conduct, any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company must be disclosed immediately to the Vice President of Internal Audit or the General Counsel. In addition, directors, and executive and other senior officers must complete a quarterly questionnaire that solicits information regarding any transactions or relationships between themselves or their immediate family members and the Company of the types described in Item 404(a) of SEC Regulation S-K (“Related Party Transactions”). Directors and executive and senior officers must seek a determination and obtain prior authorization or approval of any potential conflict of interest (including any Related Party Transaction) from the independent Audit Committee. The Audit Committee, pursuant to its charter, is tasked, among other things, with the responsibility to review Related Party Transactions and other potential conflicts of interest involving directors and executive and senior officers. The Company believes that corporate social responsibility (“CSR”) ismaintains a cornerstoneformal written policy addressing the reporting, review, and approval or ratification of the organization. The Company focuses its CSR efforts in four crucial areas: employees and people, ethics, engagement, and the environment. The Company’s CSR report is posted on the Company’s website atkellyservices.com.transactions with related persons.
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DIRECTOR COMPENSATIONDirector Compensation
A Director’s base retainerOur approach to director compensation is $150,000. to appropriately compensate our non-employee directors for the time, expertise, and effort required to serve as a director of a large, complex company and to align the interests of directors with those of shareholders. Compensation levels for our non-employee directors are periodically reviewed for market competitiveness. Non-employee directors receive compensation payments after election by shareholders at the Annual Meeting. Non-employee directors who begin their Board or committee chair service other than at the Annual Meeting receive a prorated amount of annual compensation based on timing of appointment.
Director Compensation Design
The LeadCompensation and Talent Management Committee reviews market benchmarking of non-employee director compensation annually. In 2023, the Compensation Committee engaged its independent compensation consultant, Pay Governance, to evaluate its non-employee Director receives an additional retainercompensation, which was last increased in 2022. At its meeting following the 2023 Annual Meeting of $20,000. TheShareholders, the Compensation and Talent Management Committee recommended to the Board of Directors that the cash and equity portion of retainers paid to the non-employee Directors, effective beginning May 17, 2023, remain unchanged. Retainers for the Non-Executive Chairman of the Board, Chair of the Audit Committee, receives an additional retainer of $12,500 and the ChairsChair of the Compensation and Talent Management Committee andwere also maintained. The compensation of our non-employee directors will next be reviewed in 2024, with the Corporate Governance and Nominating Committee each receive an additional retainerassistance of $7,500. its compensation consultant. The following table illustrates our 2023 non-employee director compensation:
| Annual Base Retainer | Board Leadership Positions - Additional Retainer (Committee Chairs) | ||||||||||||||||||||||||
| Non-Employee Directors | Chairman of the Board | Audit Committee | Compensation & Talent Management Committee | Corporate Governance & Nominating Committee | |||||||||||||||||||||
Cash | $ | 100,000 | $ | 150,000 | $ | 20,000 | $ | 15,000 | $ | 15,000 | |||||||||||||||
Equity (Kelly Class A Stock – $ Value) | $ | 125,000 | $ | 165,000 | — | — | — | ||||||||||||||||||
Total | $ | 225,000 | $ | 315,000 | $ | 20,000 | $ | 15,000 | $ | 15,000 | |||||||||||||||
Under the Non-Employee Directors StockCompany’s amended and restated Equity Incentive Plan which was approved at the May 6, 2008 Annual Meeting of Stockholders,(“EIP”), the Board of Directors is required tomust periodically determine annually the percentage of theirthe base retainer that will be usedissued to acquirenon-employee directors in shares of Class A common stock and thus meet their stock ownership requirements.Common Stock. At the meeting of the Board of Directors following the 20152023 Annual Meeting of Stockholders,Shareholders, the Board agreeddetermined that one-third$125,000 of the base retainer would be issued in shares (55.6%) and $100,000 of the base retainer would be paid in cash (44.4%). Equity portion of $165,000 and cash portion of $150,000 were maintained for the Chairman of the Board.
Stock Ownership Requirements
Non-employee directors are subject to a stock ownership requirement that is a minimum fair market value of four times the value of the cash portion of the annual base retainer (which currently equates to $400,000). Although there is not a fixed compliance period, it is expected that new directors will likely reach the ownership requirements within five years from their appointment date. All directors, except for recently appointed directors Mses. Duggirala and Johnson, are compliant with the Company’s stock ownership requirements.
Non-Employee Directors Deferred Compensation Plan
The Company established the Non-Employee Directors Deferred Compensation Plan (“DDCP”), which provides non-employee directors with the opportunity to defer all or a portion of all fees payable to them, pursuant to a valid deferral election. The DDCP is a non-qualified plan that allows for the deferral of all or a portion of annual cash payments to a notional account with investment fund choices that mirror those provided to participants in the Company’s Management Retirement Plan (“MRP”). In addition to those fund choices, the Plan also includes the option to defer annual cash payments into Company common stock units. Non-employee directors may also elect to defer all or a portion of their adjusted baseannual stock retainer into Company common stock units. Participants may elect to receive distributions from their DDCP account at the time they cease
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Director Compensation
to be applieda director of the Company or at a future date that is between one and ten years following the date they cease to be a director of the purchase of shares.
The Directors were not awarded options pursuantCompany. Non-employee directors can elect to have distributions from the 1999 Non-Employee Directors Stock Option Plan during 2015.DDCP made in either a lump sum or in annual installment payments made over a two-to-ten-year period.
The following table sets forth the compensation paid during 2023 to the Company’s non-employee directors. Mr. AdderleyQuigley received no compensation for his services as a director in his capacity2023. Mr. Quigley’s compensation as President and Chief Executive Chairman and ChairmanOfficer is disclosed in the Compensation Discussion & Analysis section of the Board of Directors and to each of the non-officer Directors.this Proxy Statement.
2023 Director Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||
T.E. Adderley | — | – | – | – | – | $1,005,916 | $1,005,916 | (2) | ||||||||||||||||||||
C.M. Adderley | $99,993 | $50,007 | – | – | – | – | $150,000 | |||||||||||||||||||||
R.S. Cubbin | $99,993 | $50,007 | – | – | – | – | $150,000 | |||||||||||||||||||||
J.E. Dutton | $107,493 | $50,007 | – | – | – | – | $157,500 | |||||||||||||||||||||
T.B. Larkin | $99,993 | $50,007 | – | – | – | – | $150,000 | |||||||||||||||||||||
C.L. Mallett, Jr. | $99,993 | $50,007 | – | – | – | – | $150,000 | |||||||||||||||||||||
L.A. Murphy | $112,493 | $50,007 | – | – | – | – | $162,500 | |||||||||||||||||||||
D.R. Parfet | $119,993 | $50,007 | – | – | – | – | $170,000 | |||||||||||||||||||||
H. Takahashi(3) | – | – | – | – | – | – | – | |||||||||||||||||||||
B.J. White | $107,493 | $50,007 | – | – | – | – | $157,500 | |||||||||||||||||||||
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Award Options | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | ||||||||||||||||||||||||||||
Gerald S. Adolph | $ | 115,000 | $ | 125,000 | — | — | $ | 196,960 | — | $ | 436,960 | ||||||||||||||||||||||||
George S. Corona | $ | 100,000 | $ | 125,000 | — | — | $ | 112,414 | — | $ | 337,414 | ||||||||||||||||||||||||
Robert S. Cubbin | $ | 115,000 | $ | 125,000 | — | — | $ | 205,314 | — | $ | 445,314 | ||||||||||||||||||||||||
Amala Duggirala | $ | 100,000 | $ | 125,000 | — | — | $ | 116,807 | — | $ | 341,807 | ||||||||||||||||||||||||
InaMarie F. Johnson | $ | 100,000 | $ | 125,000 | — | — | $ | 77,037 | — | $ | 302,037 | ||||||||||||||||||||||||
Terrence B. Larkin | $ | 150,000 | $ | 165,000 | — | — | — | — | $ | 315,000 | |||||||||||||||||||||||||
Leslie A. Murphy | $ | 120,000 | $ | 125,000 | — | — | $ | 166,964 | — | $ | 411,964 | ||||||||||||||||||||||||
Donald R. Parfet | $ | 100,000 | $ | 125,000 | — | — | — | — | $ | 225,000 | |||||||||||||||||||||||||
(1)
| (1) | Two of our directors deferred the following amounts from their 2023 cash retainer fee: Mr. Adolph – $115,000 and Ms. Duggirala – $100,000. |
| (2) | Represents the aggregate fair market value of grants awarded on May 17, 2023. Each director received a grant of 6,815 shares of the Company’s Class A Common Stock having a fair market value of $18.34 per share. Each of Mr. Adolph, Mr. Corona, Mr. Cubbin, Ms. Duggirala, Ms. Johnson, and Ms. Murphy deferred 100% of their 2023 annual stock grant into deferred common stock units. |
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Beneficial Ownership of Shares
The following table sets forth, as of March 21, 2024, (i) the aggregate fair market value of grants of 2,966 sharesbeneficial ownership of the Company’s Class A common stock having a fair market value of $16.86 per share on the award date of May 7, 2015.
(2) Mr. Adderley is eligible to participate in the Company’s benefit plans and Management Retirement Plan. Other compensation includes base salary of $958,100, employer provided life insurance in the amount of $17,304, the incremental cost to the Company for personal use of airplane totaling $28,410, and a Medicare tax gross-up on the Company’s contributions to the Management Retirement Plan in the amount of $2,102. Mr. Adderley is not eligible to participate in the Company’s Short-Term Incentive Plan or Equity Incentive Plan. The Company also furnishes administrative staff support to Mr. Adderley related to his duties as Executive Chairman and Chairman of the Board of Directors.
(3) Mr. Takahashi serves as a designated representative on the Board of Directors of the Company without compensation. He was elected to the Board effective August 1, 2015.
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SECURITIES BENEFICIALLY OWNED BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Under regulations of the Securities and Exchange Commission, persons who have power to vote or dispose of common stock of the Company, either alone or jointly with others, are deemed to be beneficial owners of the common stock.
Set forth in the following table are the beneficial holdings as of the close of business on March 21, 2016, on the basis described above, ofB Common Stock by each person known by the Company to own beneficially more than five percent5% of the Class B common stock:
| ||||||
(1) Includes 3,139,940 shares held by the Terence E. Adderley Revocable Trust K of which Mr. Adderley is sole trusteeCommon Stock, and has sole investment and voting power; 71,825 shares in an irrevocable trust, of which he is beneficiary and has no voting and investment power; 1,000 shares held by his spouse of which he has shared voting and investment power; and 500 shares held in five separate trusts of which he is a co-trustee with shared voting and investment power, in which he has no equity interest.
(2) Mr. Adderley is deemed a “control person” of the Company under applicable regulations of the SEC and the listing standards of the Nasdaq Global Market.
Set forth in the following table are(ii) the beneficial holdingsownership of the Company’s Class A and Class B common stock on March 21, 2016, on the basis described above,Common Stock by (a) each director (each of each Director and nominee, each of the Named Executive Officers as of such date, and all Directors and Executive Officers as a group as of such date.
| Class A Common Stock | Class B Common Stock | |||||||||||
| Directors and Named Executive Officers(1) | Number of Shares and Nature of Beneficial Ownership(2) | Percent of Class | Number of Shares and Nature of Beneficial Ownership | Percent of Class | ||||||||
T. E. Adderley, Executive Chairman and Chairman of the Board | 1,514,672(3) | 4.4 | 3,213,265 | (4) | 93.5 | |||||||
C. M. Adderley, Director | 1,102,999(5) | 3.2 | 1,125 | (5) | * | |||||||
C. T. Camden, Director and Executive Officer | 563,767 | 1.6 | 100 | * | ||||||||
R.S. Cubbin, Director | 6,089 | * | 100 | * | ||||||||
J. E. Dutton, Director | 31,435 | * | 100 | * | ||||||||
T. B. Larkin, Director | 17,111 | * | 100 | * | ||||||||
C. L. Mallett, Jr., Director | 13,498 | * | 100 | * | ||||||||
L. A. Murphy, Director | 24,057 | * | 100 | * | ||||||||
D. R. Parfet, Lead Director | 42,411 | * | 100 | * | ||||||||
H. Takahashi, Director | 1,576,169(6) | 4.6 | 1,475 | * | ||||||||
B. J. White, Director | 30,344 | * | 100 | * | ||||||||
T.S. Carroll, Executive Officer | 104,754 | * | – | * | ||||||||
G. S. Corona, Executive Officer | 247,387 | * | 100 | * | ||||||||
P.W. Quigley, Executive Officer | 113,589 | * | 100 | * | ||||||||
O.G. Thirot, Executive Officer | 53,445 | * | – | * | ||||||||
All Directors and Executive Officers as a Group (17 persons) | 5,563,218 | 16.1 | 3,216,865 | 93.6 | ||||||||
* Less than 1%
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(1) Each of the named Directorswhom is a nominee for election.
(2) Includes shares whichelection as a director at the individuals have a right to acquire through the exercise of stock options within 60 days. Such exercisable options include: 3,000 for J.E. Dutton; 3,000 for D.R. Parfet; and 3,000 for B.J. White.
(3) Includes 1,345,202 shares held directly; 30,000 shares in a charitable trust of which Mr. Adderley is a co-trustee with JPMorgan Chase Bank, N.A.; 100,000 shares in an irrevocable trust, of which he is a beneficiary; 38,470 shares in five separate trusts of which Mr. Adderley is a co-trustee with JPMorgan Chase Bank, N.A.; and 1,000 shares held by his spouse.
(4) Includes 3,139,940 shares held by the Terence E. Adderley Revocable Trust K of which Mr. Adderley is sole trustee and has sole investment and voting power; 71,825 shares in an irrevocable trust, of which he is beneficiary and has no voting and investment power; 1,000 shares held by his spouse of which he has shared voting and investment power; and 500 shares held in five separate trusts of which he is a co-trustee with shared voting and investment power, in which he has no equity interest.
(5) Includes 959,045 shares of Class A stock and 900 shares of Class B stock held in nine separate trusts of which Ms. Adderley is one of two individual trustees with J.P. Morgan Trust Company of Delaware as Corporate Trustee.
(6) Mr. Takahashi is the Executive Director of Temp Holdings Co.Annual Meeting), Ltd (“THD”) which entered into a strategic alliance with the Company in 2010. Mr. Takahashi is the designated representative of THD, which owns the reported shares. Mr. Takahashi disclaims beneficial ownership(b) each of the shares held by THD.named executive officers, and (c) all directors and executive officers as a group.
| Class B Common Stock | ||||||||
| Greater than Five Percent Class B Stockholders | Number of Shares and Nature of Beneficial Ownership(1) | Percent of Class | ||||||
| Terence E. Adderley Revocable Trust K | 3,139,940 | 94.5% | ||||||
| Class A Common Stock | Class B Common Stock | |||||||||||||||||||
| Directors and Named Executive Officers | Number of Shares and Nature of Beneficial Ownership | Percent of Class | Number of Shares and Nature of Beneficial Ownership | Percent of Class | ||||||||||||||||
| Directors: | ||||||||||||||||||||
Gerald S. Adolph | 47,559 | (2) | * | 100 | * | |||||||||||||||
George S. Corona | 92,886 | (2) | * | 100 | * | |||||||||||||||
Robert S. Cubbin | 54,125 | (2) | * | 100 | * | |||||||||||||||
Amala Duggirala(3) | 17,175 | (2) | * | — | * | |||||||||||||||
InaMarie F. Johnson(3) | 15,880 | (2) | * | — | * | |||||||||||||||
Terrence B. Larkin | 49,843 | * | 100 | * | ||||||||||||||||
Leslie A. Murphy | 48,292 | (2) | * | 100 | * | |||||||||||||||
Donald R. Parfet | 93,485 | * | 100 | * | ||||||||||||||||
Named Executive Officers: | ||||||||||||||||||||
Peter W. Quigley (also a director) | 341,896 | * | 100 | * | ||||||||||||||||
Olivier G. Thirot | 175,113 | * | 10 | * | ||||||||||||||||
Daniel H. Malan | 82,563 | * | — | * | ||||||||||||||||
Vanessa P. Williams | 57,602 | * | 100 | * | ||||||||||||||||
Dinette Koolhaas(4) | 46,042 | * | — | * | ||||||||||||||||
All directors and executive officers as a Group (17 persons) | 1,282,746 | 3.9 | 810 | 0.0 | ||||||||||||||||
| (1) | This information is based on the Schedule 13D (the “13D”) filed with the SEC on October 19, 2018 on behalf of the Terence E. Adderley Revocable Trust K (“Trust K”) and the three co-trustees of Trust K. Trust K was created by Terence E. Adderley, the Company’s former Chairman of the Board, during his lifetime as a revocable trust, with Mr. Adderley serving as the trustee of and retaining the right to revoke the trust during his lifetime. Mr. Adderley funded Trust K, including a gift of 3,139,940 shares of Class B Stock. Mr. Adderley died on October 9, 2018, at which time the trust became irrevocable. In accordance with the provisions of Trust K, Andrew H. Curoe, David M. Hempstead and William U. Parfet, were appointed as successor co-trustees of Trust K following Mr. Adderley’s death. They are required by the provisions of Trust K to act by majority vote to exercise voting or investment power over the Class B stock held by Trust K and have stated in the 13D that the filing is not an admission that the co-trustees are beneficial owners of such Class B stock. Mr. Curoe may be deemed the beneficial owner of an additional 42,825 shares of Class B Stock held by trusts where Mr. Curoe acts as trustee or co-trustee, including ten trusts holding 100 shares of Class B Stock each, and one trust holding 41,825 shares of Class B Stock. The business address of the Terence E. Adderley Revocable Trust K and each of Messrs. Curoe, Hempstead and Parfet is c/o Andrew H. Curoe, 6th Floor at Ford Field, 1901 St. Antoine Street, Detroit, Michigan 48226. |
| (2) | IIncludes 43,532 shares for Mr. Adolph, 24,647 shares for Mr. Corona, 43,295 shares for Mr. Cubbin, 17,175 shares for Ms. Duggirala, 15,880 shares for Ms. Johnson, and 35,597 shares for Ms. Murphy indirectly held in the Company’s Non-Employee Directors Deferred Compensation Plan. |
| (3) | Ms. Duggirala and Ms. Johnson were appointed to the Company’s Board of Directors on January 12, 2022. |
| (4) | As part of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment with the Company terminated on March 31, 2024. |
| | 43 |
Beneficial Ownership of Shares
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Under the securities lawsSection 16(a) of the United States,Exchange Act requires the Company’s Directors, Executive Officers,directors and any personcertain officers, as well as persons who beneficially ownsown more than 10% of the outstanding shares of common stock, (collectively, the “Reporting Persons”), are required to reportfile reports regarding their initial stock ownership and subsequent changes to their ownership of the common stock and any changes in that ownership towith the SEC. Specific due dates
Based solely upon a review of filings for these reports have been established and pursuant to applicable rules, the Company is required to report in its Proxy Statement any failure to file by these due dates. Based on certifications received from the Reporting Persons, and on copies of the reports that such persons have filedfiscal year 2023 with the SEC and related written representations that no other reports were required, we believe that all requiredSection 16(a) reports of Reporting Persons were filed on a timely with the SEC for 2015,basis, except for two Form 4s that were not filed timely for Ms. Natalia Shuman-Fabbri, Senior Vice President and General Manager, EMEA and APAC. Both Form 4s for Ms. Shuman-Fabbri, were for the automatic sale of shares to cover taxes for shares vesting on September 1, 2015 and October 1, 2015. The sale of these shares were reported with Ms. Shuman-Fabbri’sa Form 4 filingfor Mr. Corona due November 16, 2023, which was filed on February 11, 2016.November 17, 2023, to report his gift of 200 shares of Class A Common Stock to Oakland University on November 14, 2023.
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PROPOSALProposal 2 - ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or– Advisory Vote to Approve the Dodd-Frank Act, enables our stockholders to vote to approve, on an advisory (nonbinding) basis, the compensation of ourCompany’s Executive Officers, named in this Proxy Statement (the “Named Executive Officers”) as disclosed in accordance with the SEC’s rules.Compensation
As described in the following Compensation Discussion and Analysis, our executive compensation programs are designed to align the interests of our Executive Officersexecutive officers with those of our shareholders by tying a significant portion of the compensation they receive to Company performance, and by providing a competitive level of compensation in order to attract, retain, and reward Executive Officers,executive officers who are critical to the long-term success of our business. Under these programs, our Named Executive Officersnamed executive officers are rewarded for the Company’s financial performance, individual performance, and long-term potential, and critical retention,value creation, as well as to facilitate retention, and reflect market realities. Please read the Compensation Discussion and Analysis for additional details about our executive compensation programs, including information about the fiscal year 20152023 compensation of our Named Executive Officers.named executive officers.
We are askingAs required by Section 14A of the Exchange Act, this proposal, commonly referred to as a “say-on-pay” proposal, seeks a shareholder advisory vote on our stockholders to indicate their support for our Named Executive Officers’named executive officers’ compensation, as describeddisclosed in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholdersStatement pursuant to Item 402 of Regulation S-K and in the opportunity to express their views on our Named Executive Officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive OfficersCompensation Discussion and the philosophy, policies, and practices described in this Proxy Statement. Accordingly, we ask our stockholders to vote “FOR”Analysis, through the following resolution:
“RESOLVED, that the Company’s stockholdersshareholders approve, on an advisory basis, the compensation of the Named Executive Officers,named executive officers, as disclosed in the Company’s Proxy Statement for the 20162024 Annual Meeting of StockholdersShareholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the 20152023 Summary Compensation Table, and the other related tables and disclosure.”
The say-on-pay vote is advisory;advisory and, therefore, not binding on the Company, the Compensation Committee, or our Board of Directors.Company. Our Board of Directors and our Compensation and Talent Management Committee value the opinions of our stockholders,shareholders and toconsider the extent there is any significantresult of the advisory vote against the Named Executive Officerin designing and evaluating our executive compensation as disclosed in this Proxy Statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.programs.
The Board of Directors recommends a vote “FOR” the approval of the compensation of our Named Executive Officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.
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COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion and Analysis
The Compensation Discussion and Analysis section of thethis Proxy Statement provides an overview of our executive compensation philosophy and objectives. This section describes the objectives and material elements of our executive compensation programs, the compensation decisions the Compensation and Talent Management Committee (the “Committee”) has made under those programs, key factors considered, and provides details of the compensation paid to our Named Executive Officers.
Our Named Executive Officers for 2015, as defined by the SEC, were as follows:named executive officers.
| 2023 Named Executive Officers | ||||||||
| Our named executive officers for 2023, as defined by the SEC, were as follows: | ||||||||
 | Peter W. Quigley
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| President and Chief Executive Officer | |||||||
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Olivier G. Thirot | ||||||||
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(1) Mr. Thirot became Acting Chief Financial Officer effective March 16, 2015 and was appointed Chief Financial Officer effective January 1, 2016.
(2) Ms. Little’s employment with the Company terminated effective March 13, 2015.
We are a leader in providing workforce solutions. The Company offers a comprehensive array of outsourcing and consulting services, as well as, world-class staffing on a temporary, temporary-to-hire, and direct hire basis. Serving clients around the globe, we provide employment to more than half a million people annually.
Our long-term strategic objective is to create shareholder value by delivering a competitive profit from providing the best workforce solutions and talent in the industry. We develop workforce solutions, delivered by talented people, who help companies achieve their short- and long-term business goals. Our focus is on the following areas: maintain our core strengths in commercial staffing in key markets; grow our Professional and Technical (“PT”) solutions; enhance our position as a market-leading provider of workforce solutions in our Outsourcing and Consulting Group (“OCG”) segment, particularly as it relates to talent supply chain management; and lower our costs through deployment of efficient service delivery models.
2015 was a year of focused execution for the Company and a test of our ability to deliver on our strategy of targeted growth and continued improvement in operating efficiencies. The targeted investments in the higher-margin PT and OCG businesses and improvements in operations that we made in 2014 began to yield results in 2015. We entered 2015 with our new operating models in place and we gained traction throughout the year as we began to deliver against our investments and accelerated earnings growth.
Key performance highlights for 2015 include:
Earnings from operations for the full year 2015 totaled $66.7 million compared to $21.9 million in 2014. Included in the results from operations for 2014 are restructuring charges of $12.0 million. Excluding this item, earnings from operations were $33.9 million in 2014.
Our OCG segment earned a full-year operating profit of $28.5 million, a 76% increase compared to last year. OCG delivered good bottom-line leverage as top-line revenue growth continues to confirm the increased market demand for outsourced solutions. Growth was particularly strong in Business Process Outsourcing (“BPO”) and Contingent Workforce Outsourcing (“CWO”), which continue to be key drivers of our strategic and financial progress.
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 | Daniel H. Malan Senior Vice President and President Science, Engineering & Technology | |||||||
 | Vanessa P. Williams Senior Vice President General Counsel and Corporate Secretary | |||||||
 | Dinette Koolhaas Senior Vice President and President International1 | |||||||
| 1 | As part of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment with the Company terminated on March 31, 2024. |
The Compensation Discussion and Analysis is organized in the following sections:
CD&A Table of Contents
| 2023 Named Executive Officers | 46 | |||
| Executive Summary | 48 | |||
| Fiscal 2023 Performance | 48 | |||
| Key Executive Compensation Program Highlights for Fiscal 2023 | 48 | |||
| Annual Say on Pay Vote | 49 | |||
| Executive Compensation Philosophy, Objectives, and Design | 50 | |||
| CEO and Other Named Executive Officers Pay Mix | 50 | |||
| Elements of Compensation for Named Executive Officers | 51 | |||
| 2024 Executive Incentive Plans | 52 | |||
| Process for Determining Executive Compensation | 52 | |||
| Role of the Compensation and Talent Management Committee | 52 | |||
| Role of the Independent Compensation Consultant | 52 | |||
| Role of Management | 52 | |||
| Comparator Data | 53 | |||
| Senior Officer Performance Reviews and Succession Planning | 54 | |||
| Compensation Programs: Decisions and Actions in 2023 | 54 | |||
| Base Salary | 54 | |||
| Annual Cash Incentive | 55 | |||
| Long-Term Incentives | 57 | |||
| Retirement Benefits | 61 | |||
| Health and Welfare Benefits | 61 | |||
| Perquisites | 62 | |||
| Senior Executive Severance Plan | 62 | |||
| Governance of Executive Compensation Programs | 63 | |||
| Executive Stock Ownership and Retention Requirements | 63 | |||
| Incentive Compensation Recovery (“Clawback”) Policy | 63 | |||
| Hedging and Pledging of Shares | 63 | |||
| Tax Considerations: Deductibility of Executive Compensation | 63 | |||
| Compensation and Talent Management Committee Report | 64 | |||
| 46 | |
Overall Americas PT revenue grew 2% year-over-yearCompensation Discussion and Analysis
Name | Biographical Information | |
Peter W. Quigley President and Chief Executive Officer Age: 62 | Mr. Quigley served as Executive Vice President, President, Global Staffing, and General Manager, Global Information Technology, Global Business Services and Global Service from May 2017 through September 2019. He served as the Company’s Chief Administrative Officer and General Counsel from May 2015 to May 2017, General Counsel from January 2013 to May 2015. Mr. Quigley led the Company’s Global Client Relationships group from January 2008 to December 2012 and served in multiple roles including Sr. Director of Service, Vice President, Contract Administration, and Vice President, Associate General Counsel from the time he joined the company in November 2002 until December 2007. Prior to joining the Company, Mr. Quigley held a variety of roles at Lucent Technologies and AT&T Corporation. | |
Olivier G. Thirot Executive Vice President and Chief Financial Officer Age: 63 | Mr. Thirot served as the Company’s acting Chief Financial Officer from March 2015 to January 2016 when he was appointed Chief Financial Officer. He served as the Company’s Senior Vice President and Chief Accounting Officer from September 2014 to March 2015. Mr. Thirot was Vice President, Finance for the Company’s EMEA business beginning in 2008 when he joined the Company and assumed added responsibility for the APAC business in 2011. Prior to joining the Company, he worked at L. Raphael as Chief Financial Officer and prior to that, he spent 18 years with Bacardi, LTD in various leadership positions. | |
Daniel Hugo Malan Senior Vice President President, Kelly Science, Enginerring, Technology & Telecom Age: 54 | Mr. Malan has served as the Company’s President of Science, Engineering, and Technology since March 2020. Prior to that he worked at EmployBridge for three years, serving as President of its Commercial Business from December 2016 to July 2018 before being named Chief Operating Officer in August 2018 through November 2019. From November 2014 to November 2016, Mr. Malan was Executive Vice President and President, North America Staffing for CDI Talent and Technology Solutions, and from March 2009 to October 2014 served as Senior Vice President and President of operating units for Sears Holdings. | |
Vanessa P. Williams Senior Vice President General Counsel and Corporate Secretary Age: 52 | Ms. Williams has served as General Counsel since joining the Company in September 2020 and was recently appointed Corporate Secretary effective October 1, 2023. Previously, she worked from July 2006 to September 2020 in a variety of roles for IHS Market including Senior Vice President, Legal, Risk and Compliance; Vice President, Divisional Counsel-Transportation; Vice President, Chief Legal Counsel and Global Privacy Officer (IHS, Inc.); Vice President and Deputy General Counsel and Chief Compliance Officer; Deputy General Counsel; and Associate General Counsel (R.L. Polk & Co.). In addition, Ms. Williams has been a member of Horizon Bank’s board of directors since 2022 and Horizon Bancorp, Inc.’s board of directors since 2023. | |
Dinette Koolhaas Senior Vice President President, Kelly International Age: 55 | Ms. Koolhaas previously served as Vice President, EMEA Operations from September 2013 to February 2017, at which time she took on Managing Director responsibilities for EMEA until July 2020 when she took on her current role. Prior to that, she was Vice President and Regional Manager of Western Europe from June 2008 through August 2013. Prior to joining the Company in 2008, Ms. Koolhaas served in various roles with USG People. | |
| | 47 |
Compensation Discussion and Analysis
Executive Summary
Fiscal 2023 Performance
Kelly’s philosophy as a talent company is rooted in both reportedthe conviction that our business makes a difference daily – in the lives of our employees and constant currency,talent networks, for our customers, in the local communities we serve, and accounts serviced throughin the broader economy. As work has evolved so has our U.S. branch network delivered strong growthrange of 16%solutions, growing over the years to reflect the changing needs of our customers and the changing nature of work itself. Kelly’s simple yet powerful noble purpose, “We connect people to work in ways that enrich their lives,” continues to guide our strategy and actions. Kelly remains committed to being a leading talent solutions provider in our PT specialties. Our expanded salesforce is pursuingspecialty areas and winning new business, whilein the markets where we compete. While executing our PT recruiting centers are efficiently connecting U.S. clients with specialized talent. Westrategy, we will need to continue to accelerate PT growth, particularly within accounts serviced throughdemonstrate our centralized delivery model, to fully realize the expected benefit of our investments. The success of these investments is impacted by the shifting of some of our large account customers from single-sourced arrangements to a more competitively sourced model. While this places additional pressure on growth in these PT accounts, competitively sourced arrangements create additional opportunities in our OCG business.behaviors and actions:
Foreign currency exchange rates negatively impacted the total year-over-year change in gross profit; however, on a constant currency basis, the Company delivered strong operating leverage. For the full year, growth in constant currency earnings from operations excluding the 2014 restructuring charges represented nearly 70% of our constant currency gross profit growth.
2015 was a year of solid earnings growth for the Company. We are reshaping our business and working to rebalance our resources to align with our goals for growth. We are delivering on a plan that not only aligns with critical market trends, but continues to position the Company as a leaderThe described actions detailed below in the workforce solutions market worldwide. We are operating as a more agile organization, committed to delivering sustained, profitable growth, and continued strategic progress.
Key Executive Compensation Program Highlights for Fiscal 2015
The Board has adopted two plans that provide the framework2023 section provided fiscally responsible reward programs while also providing targeted investments needed to reward employees for all incentive compensation opportunities for our Executive Officers.
The amendedachieving important financial and restated STIP was approved by shareholders at the Company’s Annual Meeting on May 6, 2015. STIP provides for annual cash-based incentive opportunities that are based upon the achievement of one or more performance measures, as selected by the Committee.
The amendedoperational goals, and restated EIP was approved by shareholders at the Company’s Annual Meeting on May 6, 2015. The EIP provides the Committee the ability to grant long-term incentive (“LTI”) opportunities, in various award types, that focus on the longer term performance of the Company and align the interests of Executive Officers with those of shareholders.
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The Committee believes these actions support the strategic directionlonger-term retention of the Companycritical talent.
As our strategy evolves and help position it for long-term success in achieving its goals. All of these compensation decisions and actions are discussed in more detail below.
CEO and Other Named Executive Officers Pay Mix
The following charts illustratewe manage through the impact of inflation and market uncertainty, we continue to move forward with our specialization strategy. These specialties represent areas where we see the changemost robust demand, the most promising growth opportunities, and where we believe we excel in attracting and placing talent.
Kelly’s business model brings together both staffing and outcome-based solutions under a single specialty leader and aggregates assets to accelerate specialty growth and profitability. We believe this specialty structure gives us greater advantages in the market, and we expect our disciplined focus will enable us to achieve greater efficiencies and deliver profitable growth coming out of a period of elevated economic uncertainty.
Key Executive Compensation Program Highlights for Fiscal 2023
We believe compensation should align with and enhance long-term incentives, to a more performance-based design in 2015, on the pay mix of our President and CEO and the other Named Executive Officers combined (CFO compensation was excluded due to the change in incumbents during the year). The percentage of target total direct compensation (sum of salary, target STIP and LTI award opportunities) that is performance-based for our CEO in 2015 has increased to 65.6% (for STIP and Performance Shares) from 40.6% in 2014. The percentage of target total direct compensation that is performance-based for our other Named Executive Officers in 2015 has increased to 57.3% on average from 34.9% in 2014. The Company’s historically conservative approach to granting equity to Executive Officers has been modified to ensureshareholder value. Our pay-for-performance philosophy ensures that a significant portion of compensation for our senior officers is “at risk” and reflects our business performance. Kelly continued to focus on striking a balance of providing competitive compensation programs that attract, reward, and retain high performing talent while doing so in a fiscally responsible framework. Our named executive officers experienced the following outcomes for 2023 as a result of Company performance and management’s decision to focus on the Company’s transition in becoming a more profitable talent solutions company:
| ● | Performed a targeted annual base salary review process with one named executive officer receiving a salary increase in 2023; |
| 48 | |
Compensation Discussion and Analysis
| ● | With respect to our short-term incentive plan: |
funding for all participants focused 100% on total Company earnings from operations (“EFO”)
returned to setting threshold at 50% of target and straight-line interpolation between threshold and target;
continued with a maximum payout opportunity of 200% of target;
continued emphasis on individual performance for determining final payouts; and
2023 Short Term Incentive Plan (“STIP”) was funded at 94% of target levels based on total company performance.
| ● | With respect to our long-term incentive plan: |
| • | continued with three one-year annual goals for performance-based Long-Term Incentives (“LTI”) program; |
continued with 100% cliff-vesting at the end of the three-year performance period for any earned performance-based LTI;
2023 LTI target award opportunity was granted in a mix of 75% weighting in the form of Performance Shares and 25% weighting in the form of time-based vesting restricted shares for the CEO and a mix of 60% weighting in the form of Performance Shares and 40% weighting in the form of time-based vesting restricted shares for all other Executive Officers is performance-based “paynamed executive officers;
year one of the 2023-2025, year two of the 2022-2024 and year three of the 2021-2023 Performance Shares were earned in aggregate, at risk”. This change in design directly supports50% of target for the 2023 assessment period;
| • | one-third of the 2021 special equity award Key Employee Equity Plan (“KEEP”) was earned during 2023; and |
granted special long-term equity recognition award to one named executive officer.
Annual Say on Pay Vote
The frequency of the Company’s Say on Pay vote is annual and, as such, the Committee considers the shareholder advisory vote on executive compensation as disclosed in the Company’s Proxy Statement each year. In 2023, 98.57% of the shares represented at the meeting approved the Say on Pay proposal. The Committee considered this result as a factor in its decision to maintain the general design of the Company’s compensation programs.
However, we continue to evaluate our executive compensation program and make changes to further align with our
strategic transformationpriorities and to reward short- and long-term business success. We designed a more efficient, profitable, growth-focused,program that aligns with shareholder interests, incentivizes growth and performance-driven organization.operational excellence, and demonstrates a clear linkage between compensation and performance. The program continues to seek to ensure pay for performance and minimize incentives for management to take excessive risks. The Committee worked with management and its independent compensation consultant, as described later in this document, to review current compensation programs, including the incentive plans.
The Company has two plans that provide the framework for incentive compensation opportunities for our senior officers, a group that includes our named executive officers.
| ● | The Short-Term Incentive Plan (“STIP”) provides for annual cash-based incentive opportunities based upon the achievement of one or more performance measures, as established by the Committee. |
| ● | The Equity Incentive Plan (“EIP”) provides the Committee the ability to grant long-term incentive (“LTI”) opportunities, in various award types, that focus on the long-term performance of the Company and align the interests of senior officers with those of shareholders. |
| | 49 |
Compensation Discussion and Analysis
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Our executive compensation philosophy is to provide market-based pay opportunities with incentive payouts aligned with the achievement of the Company’s overall short- and long-term business strategy, performance goals, and results. The design of our executive compensation programs allocates total compensation to fixed and variable pay elements resulting in a mix of short-term and long-term pay elements. The Committee establishes and administerscontinually evaluates our executive compensation programs to ensure that the Company provides market-competitive opportunities that enable us to attract and retain highly qualified individuals to lead the organization and drive business success. Our executive compensation programs are designed to achieve the following objectives:
Pay-for-Performance Framework
Align pay
| ● | Align a significant portion of compensation with the achievement of multiple performance goals that motivate and reward executives based on Company, business unit, and individual performance results. |
| ● | Attract and retain exceptional talent with the leadership abilities and experience necessary to develop and execute business strategies, achieve outstanding results, and build long-term shareholder value. |
| ● | Support achievement of the Company’s vision and strategy. |
| ● | Create an ownership mindset that closely aligns the interests of management with those of shareholders. |
| ● | Provide appropriate balance between the achievement of both short- and long-term performance objectives, with clear emphasis on affordability, managing the sustainability of the business, and mitigation of risk. |
The Committee believes that a majority of a senior officer’s compensation should be “at risk” and based upon the achievement of corporate and business unit results, the Company’s share price performance, as well as the individual’s performance. As a result, senior officers participate in incentive programs that provide them with short-the opportunity to earn awards that are directly tied to the Company’s performance and long-term performance results that directly influence shareholder value;
Motivate executives to achieve performance goals that, over time, lead to increased anddrive sustainable long-term shareholder value;value. The Company’s compensation programs provide an incentive for senior officers to meet and exceed performance goals.
Directly linkExecutives are held accountable for results and rewarded with above target payout amounts for performance that exceeds target goals. When target goals are not met, award payouts are designed to deliver below target payouts or no payouts. We believe the combination of our annual incentive awards and long-term equity incentive awards align the interests of management to thoseour senior officers with the interests of shareholders;our shareholders.
CEO and Other Named Executive Officers Pay Mix
Attract key executives criticalWhile we believe that a majority of an executive officer’s target compensation opportunity should be performance- based, we do not have a specified formula that defines the overall weighting of each element. We believe that the higher a role is positioned within the organizational structure, the greater the emphasis on performance-based compensation should be. As such, the CEO has a greater percentage of his compensation opportunity that is performance-based through higher target opportunities for STIP and LTI, as compared to the organization’s long-term success;
Retain executives necessarycompensation opportunities of the other named executive officers. At-risk compensation consists of annual cash incentive awards and performance shares that are contingent upon the achievement of pre-established performance goals. Restricted shares, which are not classified as at-risk compensation, have value at vesting reflecting the Company’s stock price performance since date of grant, which aligns to successfully leadshareholders’ experience. The following charts illustrate the typical Target Total Direct Compensation mix for our President and manageCEO and the organization;other named executive officers combined and
Reward executives fairly includes the pay elements of base salary, STIP (at target), restricted shares, and performance shares (at target). Pay mixes shown below are based on Company, business unit, and individual performance results.target amounts under typical plan designs during fiscal year 2023.
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Compensation Discussion and Analysis
Typical Target Compensation Mix
Elements of Compensation for Named Executive Officers
The following table listsCommittee determines the elements of total direct compensation that we provide to our Executive Officers:senior officers, a group that includes the named executive officers. The elements of our executive compensation program of our named executive officers and the objectives for each are as follows:
Compensation
Element | Type | Considerations | Objectives | For More Information | ||||
| Base Salary | ||||||||
| Fixed Compensation |
• Adjusted, when appropriate based on role and scope of responsibilities, skills, experience, sustained individual |
• Attract and retain qualified • Balance risk-taking | ||||||
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| Short-Term Incentive Plan (STIP) | Variable At-Risk Performance- Based Compensation | • Annual performance period
• Performance measures selected to align with our business strategy
• Payout based on achievement of predetermined goals |
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Long Term Incentives (LTI) | Time-Based Fixed Compensation |
Restricted Stock
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• Support retention
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| Variable At-Risk Performance- Based Compensation |
Performance Shares
| Page 57 | ||||||
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• Given the continued complexity of goal setting in the current business environment, financial measures for 2023-2025 LTI awards are established and assessed independently for each of three one-year performance periods (2023, 2024, and 2025) with goals set early in each performance period | • Drive long-term value creation for shareholders
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Compensation Discussion and Analysis
2024 Executive Incentive Plans – Overview of Changes
For the 20162024 incentive plan designs, the Company continues to focus on pay-for-performance alignment by using severalmultiple financial measures and TSR to strongly drive our key business objectives and shareholder value. For 2016, the Company has decided to again use a combination of gross profit and earnings from operations measures, as well as, relative TSR. Reflecting the Company’s focus on profitable growth and reducing costs, the 2016 target performance goals are substantially higher than 2015 actual results and the number of target shares is somewhat lower than last year’s grants. For the 2016 performance share opportunities, awards will be based on goals and results over the three-year period, 2016 to 2018. DetailsAdditional details regarding the 20162024 incentive plan designs will be presented in our 2017 proxy filing.2025 Proxy Statement.
Process for Determining Executive Compensation
Role of the Compensation and Talent Management Committee
The Committee designs and administers the Company’s executive compensation programs and policies, including regularly reviewing the program and regularly reviews these programs and policies against itspolicy objectives, applicable new legal and regulatory practices, evolving best practices, and corporate governance trends. The Committee and members of the Board of Directors determine the compensation of the CEO. The CEO’s total compensation is the same design as the other named executive officers consisting of base salary, STIP, and LTI award opportunities. The CEO does not participate in recommendations or discussions related to his own compensation. As part of its responsibility for executive compensation, the Committee annually reviews and determines the compensation of each of our Senior Officers,senior officers, including the Named Executive Officersnamed executive officers listed in the Summary Compensation Table of this Proxy Statement, based on each individual’sindividual performance, including consideration of ethical behavior, achievement of planned goals, relevant market comparisons, and the recommendations of the CEO.CEO, and other factors. The Committee is responsible for reviewing and fully understandingreviews the costs and short- andshort-and long-term benefits of the compensation arrangements they considerit considers and approveapproves for Senior Officers.
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senior officers.
The Committee and members of the Board of Directors determine the compensation of the CEO. The CEO’s total compensation is comprised of the same elements as the other Named Executive Officers. The CEO does not participate in recommendations or discussions related to his own compensation.
Allresponsibilities of the Committee responsibilities are defined in its charter, which can be found on the Company’s website at kellyservices.com.kellyservices.com.
Role of the Independent Compensation Consultant
Since October 2014, the Committee has engaged Pay Governance LLC as itsis the Committee’s independent compensation consultant (the “Consultant”). The Committee considers analysis and guidance from the Consultant when making compensation decisions on plan design; the merits of various incentive plan performance measures; Executive Officersenior officer pay levels, including that of the CEO and our other executive officers, relative to peer group and other market data; composition of peer group companies; stock ownership requirements; and other pay practices. In addition, the Consultant updates the Committee on market trends and best practices in executive compensation and as requested, provides data and guidance on other items such as non-employee director compensation. The Committee uses its own independent judgment to make all final decisions related to the compensation of the Company’s Executive Officers.senior officers.
TheDuring 2023, the Consultant attendsregularly attended Committee meetings and regularly communicatescommunicated with both the Executive Chairman and Chairman of the Board and the Committee Chairman outside of Committee meetings. On occasion, asThe Committee regularly meets with the Consultant in private session (without members of management). As directed by the Compensation and Talent Management Committee, the Consultant will also meetmet with the SVPSenior Vice President and Chief Human ResourcePeople Officer (“CHRO”Chief People Officer”), Senior Vice President, General Counsel and Corporate Secretary (“Corporate Secretary”), and members of the compensationExecutive Compensation, Finance, and financeCorporate Governance teams of the Company. The Consultant reportsmaintains a direct reporting relationship to the Committee on all compensation matters.
AnThe Committee conducts an annual assessment of the Consultant’s independence, using factors established by Nasdaq Global Market and approved by the SEC is conducted to ensure independence has been maintained.Nasdaq. The Consultant provided no services to the Company in 20152023 other than services to the Compensation Committee. The Committee reviewed and affirmed the independence of the Consultant as the Compensation Consultant to the Committee and concluded the work performed by the Consultant did not raise a conflict of interest.
The Committee consults with the CEO and the Chief People Officer to obtain feedback with respect to the strategic direction of our executive compensation programs.
The CEO and Executive Vice President (“EVP”) and Chief Operating Officer (“COO”) makemakes recommendations for each of their direct reports who are Executive Officers with regard tothe executive officers about elements of their total compensation. They base theseHis recommendations are based on theirthe assessment of each Executive Officer’sexecutive officer’s performance, as well as the performance of their respective business or function.function and other factors. The Committee takes into consideration the recommendations of the CEO and COO when determining the compensation of the other Executive Officers.executive officers.
In addition, the SVP and CFO provides periodic financial updates and information to the Committee to aid in establishing incentive plan goals and determining payout amounts.
The Committee understandsconsults with the significance of its responsibilitiesCorporate Secretary and considers a substantial amount of informationthe Consultant on matters related to executive and input from both internaldirector stock ownership requirements and external resources as a reference in support of its decision making. director compensation.
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Compensation Discussion and Analysis
Comparator Data
The Committee uses third-party survey data for comparably sized general industry companies and available data from a select group of peer companies in determining the competitive positioning of our compensation programs, andprograms. Comparator data is also used as one of several inputs to establish the individual compensation opportunities of each of our Named Executive Officers.senior officers, including the named executive officers.
Each Executive Officer’ssenior officer’s performance is reviewed (see ExecutiveSenior Officer Performance Reviews and Succession Planning below) and compensation decisions are made on an annual basis (or as an Executive Officer’sa senior officer’s duties and responsibilities change). Base salaries, target STIP, and target long-term incentive opportunities are benchmarked against a group of comparable executive positions in general industry companies of similar revenue size as reflected in multiple third-party surveys. The Committee generally managesWe seek to establish target total direct compensation opportunities (defined as base salary, target STIP, and target long-term incentive opportunities)incentive) for its Named Executive Officers at levels, on average,our named executive officers that approximateare near a competitive range of the median of the competitive market data. Compensation ultimately earned from these opportunities can vary from the targeted levels based on Company, business unit, and individual performance. Various other factors are taken into consideration and in certain circumstances, we may target pay above or below the competitive median. Individual target total direct compensation may be above or below
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the median depending on Company performance, cost considerations, the role’s scope of responsibilities, individual experience and performance, and any succession, retention, or internal equity considerations. Prior to 2015, theThe Company hadhas taken a conservative approach to target long-term incentive opportunities for Senior Officers that were generally well below market median. As explained furthermedian for senior officers. This approach is in support of the Long-Term Incentive section, the 2015 LTI design brought target total direct compensation opportunities, on average,Company’s efforts to near market median levels.reduce costs in connection with its investment strategy and its goal to become more profitable.
In 2015,setting 2023 target compensation, the Committee performed a competitive executive compensation analysis, was performed which included both an analysis of third-party survey data prepared internally by the Company’s Human Resourcesexecutive compensation group, and a peer group review of CEO pay prepared by the Consultant. Third-party general industry survey data from Aon, Hewitt, Equilar, Mercer,Pearl Meyer, and Towers Watson wasWTW were used to prepare the survey analysis. Specific companies that participated in the third-party surveys were unknown and not a factor in the Committee’s deliberations. The Consultant reviewed the survey analysis was reviewed by the Consultant for the Committee.
LateThe Consultant worked with the Committee and management to develop a group of peer companies to be used for market comparison purposes in 2014,terms of CEO pay levels and executive pay practices. We do not believe many companies compete directly with us in all areas of our business or are of similar size. However, in order to have a reference group of publicly traded comparators, the Consultant helped prepare an updated peeridentified a group for the Company.of relevant companies that compare to Kelly in at least some areas of our business. The newresulting group of twelve comparator group was prepared using the following criteria: industry;companies consists solely of staffing and HR-focused companies with generally similar annual revenues; non-staffing companies considered by shareholder advisory groups as peers;revenues and recent market cap. The majority are multi-national/ global companies headquartered in U.S.; multi-national/global companies; and market capitalization. The resultingfollowing group of fifteen comparator companies includes direct peers supplemented by other people-intensive businesses withand a balanced mix of some significantly smaller and larger companies in similar margins. Thisindustries and was unchanged from last year. The peer group, of companies includes six companies used by Institutional Shareholder Services (“ISS”) in their 2015 report and an additional two companies that were used by ISS in their 2014 report for the Company. The following comparator group of fifteen companiesunchanged from 2022, was used by the Committee and management as another reference point when reviewing 2015assessing 2023 executive pay practices and CEO pay levels:
| 2023 Peer Group | ||||
● ABM Industries Incorporated | ● | ● | ||
● Adecco | ● | ● | ||
● AMN Healthcare Services, Inc. | ● | ● | ||
● | ● | ● | ||
|
|
| ||
The Committee considers peer group and general industry survey data as a point of reference, not the sole factor in determining senior officers’ compensation. The third-party survey data and peer group analysis represent “Market Data” when referenced throughout this Compensation Discussion and Analysis. The Human Resources group provides the Committee historical and prospective compensation components for each Executive Officer. The Committee considers the resultsall resources provided as part of this analysisa holistic process that also includes officer performance and the recommendations of the Company’s CEO and COO regarding total compensation for those executives reporting directlysenior officers.
In addition to eachMarket Data and for use as background information, the Executive Compensation group provides the Committee with comprehensive detail illustrating historical target and actual total compensation data and long-term incentive grant detail that includes grant date fair value as well as the intrinsic value of them.outstanding award opportunities.
ExecutiveThe Committee reviews this detail for the executive officers and believes it is useful multi-year reference information, along with other perspectives, when considering whether compensation decisions reflect the Company’s executive compensation philosophy and performance.
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Compensation Discussion and Analysis
Senior Officer Performance Reviews and Succession Planning
Annually, the Committee conducts a comprehensive Executive Officerreview of performance, review that includes identification ofleadership development initiatives, and succession planning for senior officers. Combined, these processes are used to identify, develop, and officer development opportunities. Detailedevaluate the Company’s senior officers.
The Chief People Officer, with input from the CEO, prepares detailed executive performance review information for each of the Senior Officers,senior officers, including named executive officers (other than the Named Executive Officers, is prepared by the CHRO.CEO). The performance review information for each of the Executive Officerssenior officers includes key annual initiatives, performance results, strengths, and development opportunities. The CEO reviews the performance of the other Executive Officers who report to himsenior officers and presents their individual performance assessments, development plans, and succession strategies to the Committee. Similarly, the COO presents to the Committee the individual performance assessments for his direct reports.
During the individual performance assessments, the Committee asks questions, renders advice, and makes recommendations on matters that include individual development needs, succession planning, and retention. The Company’s Executive Chairman and ChairmanSenior officers are not present during the discussion of the Board, and the Committee Chair, present the performance review for the CEO to the other Committee members. None of the Executive Officers are present when their performance is being discussed by the Committee. Each Executive’sThe Committee uses each executive’s individual performance assessment, is used by the Committee, together with the compensation analysis discussed in the previous section, and the recommendations of the CEO, and COO, to determine compensation for the Executive Officers.senior officers.
In the fourth quarter of the year the CEO presented his performance self-evaluation which included a review of performance of the organization against strategy and business plans.
Periodic sessions are held to discuss talent and development for multiple levels of the organization, increasing transparency and understanding of talent across leadership teams and business units. Development plans are crafted to prepare emerging talent for future opportunities, including stretch assignments, formal training, experiential learning opportunities and formal coaching.
The Board approves the Company’s executive succession plan is updated annually, including updates, and in connection with the performance assessments and is approved by the Board.assessments. The plan documentation includes all executives at the SVPsenior officer level, and above, as well as their potential successors from within the Company in casethe event of an unexpected disabilityemergency or departure of a Senior Officer.senior officer. Documentation includes detailed executive performance review information as discussed above, readiness assessments and at least one potential successor for each role. Any changes to the plan during the year also require the approvala review of the Board.health and diversity of succession pipelines.
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Compensation Programs: Decisions and Actions in 20152023
The Committee believes the actions detailed below supported the strategic direction of the Company and helped position it for long-term success in achieving its goals.
Base Salary
Base salaries for senior officers, including the Named Executive Officersnamed executive officers are intended to bewithin a competitive withrange of the Market Data to ensure that the Company can attract and retain the executives necessary to successfully lead and manage the organization. Base salaries generally fall within a range (+/- 15%) around the median of salaries in the Market Data, as individual base salaries will vary based upon the factors described below. Based on Market Data available at the time of the review in November 2023, we determined that the base salaries of our Named Executive Officersnamed executive officers were, on average, within this competitive range of the 2015 market medians for comparable roles. Base salary is only one component of target total direct compensation and may be affected by other components to ensure that target total direct compensation meets compensation objectives.
The Committee reviews the base salaries of Executive Officers,senior officers, including the Named Executive Officers,named executive officers, on an annual basis (or as an Executive Officer’sa senior officer’s duties and responsibilities change). Base salaries are determined by the Committee for each of the Executive Officerssenior officers based on various factors, including the scope and responsibilities of the role, an individual’s experience and performance in the role, their current level of pay compared to Market Data, internal pay equity, the recommendationrecommendations of the CEO, and COO, and consideration of the Company’s salary adjustment budget.
Olivier G. Thirot - Interim RoleThe Company’s annual total compensation review and Promotion
Followingtarget pay adjustment process for all employees, including the resignationsenior officers, typically occurs during the first quarter to coincide with the timing of our CFO in March 2015, the Committee appointed our SVP, Chief Accounting Officer and Controller, Mr. Thirot, as Acting CFO. In orderany potential incentive award payouts. The timing alignment of compensation elements is intended to recognize his new responsibilities, Mr. Thirot was provided with interim pay equal to an additional 10% of his base salary and an interim increase in his STIP target opportunity from 40% to 65% of base salary, effective March 16, 2015.
On December 2, 2015, the Committee appointed Mr. Thirot to Senior Vice President and Chief Financial Officer, effective January 1, 2016. As a result of this promotion, Mr. Thirot received an increase to his base salary, STIP target and LTI opportunity for 2016. Mr. Thirot did not benefit from these changes during 2015 and as such, details are not reported here, but will be included in the Compensation Discussion and Analysis of our 2017 Proxy disclosure.
Teresa S. Carroll and Peter W. Quigley - Promotions
In April 2015, management recommended and the Committee approved the promotion of Ms. Carroll from SVP, Global Centers of Excellence and General Manager, Global OCG to SVP and General Manager, Global Talent Solutions. In addition to her previous responsibilities, Ms. Carroll added responsibility for the Americas Strategic Accounts and Operations (“SAO”) and Global Solutions businesses. In recognition of her broader role, the Committee approved a base salary increase of 15.7% and an increase in STIP target opportunity from 65% to 70% of base salary for Ms. Carroll.
In April 2015, management recommended and the Committee approved the promotion of Mr. Quigley from SVP and General Counsel to SVP, General Counsel, and Chief Administrative Officer. With this promotion, Mr. Quigley added responsibility forreinforce the Company’s Human Resources, Information Technology, Global Services, Facilities,pay-for-performance philosophy and Corporate Communications functions.provide each employee with their “total compensation” overview. In recognition of this broader role, the Committee approved a base salary increase of 15.7% and an increase in STIP target opportunity from 65% to 70% of base salary for Mr. Quigley.
The compensation changes for Ms. Carroll and Mr. Quigley were effective April 6, 2015.
In August 2015,November 2022, the Committee conducted its annual market review of base salaries of the Senior Officers,senior officers, including Named Executive Officers, and considered the recommendation of management that the Senior Officers not receivenamed executive officers.
The Company performed a targeted compensation review which resulted with one named executive officer receiving a base salary increases at this time. The Committee supported this recommendation and did not provide the Senior Officers with salary increases during the annual total compensation review process in 2015.increase for 2023.
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Compensation Discussion and Analysis
In consideration of the factors noted above, the following base salaries for the Named Executive Officersnamed executive officers were approved by the Committee in 2015:2023:
| Named Executive Officer |
2014 Base | 2015 Base Salary | Adjustment % | 2022 Base Salary | 2023 Base Salary | Adjustment % | ||||||||||||||||
Carl T . Camden | $ | 1,000,000 | $ | 1,000,000 | 0.0% | |||||||||||||||||
George S. Corona | $ | 655,000 | $ | 655,000 | 0.0% | |||||||||||||||||
Peter W. Quigley | $ | 432,000 | $ | 500,000 | 15.7% | $ | 900,000 |
| $ | 900,000 |
|
| 0.0 | % | ||||||||
Olivier G. Thirot | $ | 445,629 | $ | 490,192 | 10.0% | $ | 667,200 |
| $ | 667,200 |
|
| 0.0 | % | ||||||||
Teresa S. Carroll | $ | 432,000 | $ | 500,000 | 15.7% | |||||||||||||||||
Daniel H. Malan | $ | 443,000 |
| $ | 443,000 |
|
| 0.0 | % | |||||||||||||
Vanessa P. Williams | $ | 414,000 |
| $ | 475,000 |
|
| 14.7 | % | |||||||||||||
Dinette Koolhaas | $ | 557,668 |
| $ | 557,668 |
|
| 0.0 | % | |||||||||||||
Note:Notes:
Mr. Thirot’s compensation has been converted from Swiss Francs (CHF) to U.S. Dollars (USD) using the Company’s budgeted currency exchange rate of 1.0869 in effect for 2015.
Amounts represent base salaries in effect on December 31 of each applicable year.year;
For Messrs.increase for Ms. Williams was effective January 1, 2023; and
amounts reported for Mr. Thirot and Quigley, and Ms. Carroll,Koolhaas are converted from Swiss Francs to U.S. Dollars at an exchange rate of 1 CHF = 1.112 USD. This is calculated using the actual salary received, as shown in the 2015 Summary Compensation tableIRS Yearly Average Currency Exchange Rate for Switzerland for 2023 of this Proxy Statement, reflects the base salary rates in effect during each of the periods of time before and after the effective date of changes made to their salaries in 2015.0.899 (1 CHF ÷ 0.899 = $1.112).
The Committee believes that the Named Executive Officersnamed executive officers should have a meaningful percentage of their total compensation earned through annual “at risk” performance-based incentives. The percentage of target total compensation at risk under the terms of the STIP increases significantly as the individual executive’s responsibilities and influence on overall corporate performance results increase. The STIP is designed to encouragedesign encourages executives to meet and exceed the Company’s short-term goals that align with overall corporate strategy and improve shareholder value.
The STIP target opportunity is established as a percentage of each individual’s actual base salary earnings and is targeted near the median Market Data, but may vary based upon individual factors, internal equity, and other considerations. STIP payments for all participants are capped atcan range from 0% to the maximum of 200% of target based on results relative to the target incentive award opportunity.goals set at the start of the year. In August 2015,November 2022, the Committee reviewed the target incentive opportunity for each of the Named Executive Officersnamed executive officers and found that all were appropriately positioned relativemade one change to better align to the Market Data.
The following table shows the 20142022 and 20152023 STIP target opportunities, as a percent of base salary, for our Named Executive Officers:named executive officers:
| Named Executive Officer | 2014 STIP Target % | 2015 STIP Target % | ||||||||
Carl T. Camden | 130% | 130% | ||||||||
George S. Corona | 90% | 90% | ||||||||
Peter W. Quigley | 65% | 70% | ||||||||
Olivier G. Thirot | 40% | 65% | ||||||||
Teresa S. Carroll | 65% | 70% | ||||||||
Notes:
Mr. Thirot’s incentive target was increased on an interim basis due to his appointment to acting CFO effective March 16, 2015.
The incentive targets for Mr. Quigley and Ms. Carroll were increased effective April 6, 2015 as a result of the additional responsibilities each took on with their promotions.
| Named Executive Officer | 2022 STIP Target % | 2023 STIP Target % | ||||||||
Peter W. Quigley | 110 | % | 120 | % | ||||||
Olivier G. Thirot | 85 | % | 85 | % | ||||||
Daniel H. Malan | 55 | % | 55 | % | ||||||
Vanessa P. Williams | 65 | % | 65 | % | ||||||
Dinette Koolhaas | 55 | % | 55 | % | ||||||
In the months leading up to year end,year-end, the Committee reviews and determines the objectives, performance measures, and other terms and conditions of the STIP for the following plan year. For 2015, and as part of the incentive plan redesign,2023, the Committee approved the use of multiple performance measures to compriseEarnings from Operations (“EFO”) as the measure for the corporate component of the
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STIP. The Committee selected multiplethis financial measures inmeasure for the STIP thatbecause it aligned to thewith business objectives and value creation, provided balance, ensured a stronger strong pay-performance linkage, and improved line of sight for Senior Officers,senior officers, including the Named Executive Officers. Measures selected were: earnings from operations in order to maximize the Company’s earnings; return on sales in order to maximize margins from earnings; and the two strategic measures: gross profit for Americas – Commercial and gross profit for Global PT, both strategic measures were selected to maximize profitability (net of the cost of services) for these key businesses. named executive officers.
Payout for threshold performance under the corporate component of STIP is set at 50% of an Executive Officer’sa named executive officer’s target payout opportunity, with zero payout earned for performance below threshold. Achievement of target performance results in target payouts for the Executive Officers. Each additional performance incrementnamed executive officers. Performance above target earns prorated incentive payouts above target and up to the maximum of 200% of target. The 2015 STIP design includes a ‘gatekeeper’ goal which must be achieved in order to earn a payout under any measure. The gatekeeper goal is earnings from operations with a required level of achievement of at least 60% of target.
Performance measures used for purposes of funding STIP are the same as defined in the Company’s GAAP financial statements, excluding at the discretion of the Committee consideration of special items such as: changes in accounting principles, gains or losses on acquisitions or divestitures, changes in budget due to acquisitions or divestitures, restructuring charges,
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Compensation Discussion and Analysis
expenses, and other unusual items, which are defined as such and quantified in the financial statements and/or footnotes to the Company’s Annual Report on Form 10-K. Adjustments would apply only to unbudgeted items.
For the two strategic measures, constant currency (using2023, additional consideration was made to certain special items related to the Company’s 2015 budgeted currency exchange rate) was used to determine values in establishing achievementtransformation initiatives and also with the sale of the incentive plan goals for 2015.EMEA staffing operations that resulted in an unfavorable impact to the Company’s financial performance.
In February 2015,2023, the Committee determined and approved management’s recommendation for threshold, target, and maximum performance goal levels for the 20152023 STIP. The threshold goal was set at a level for which the Committee believed it was appropriate to start earning incentives. At expected performance levels the target goal was set at the budgeted EFO. Target award opportunities remained unchanged.
Maximum goals were set at significant stretch levels, which the Committee believed warranted the earning of 200% of target payouts. For the 2023 STIP, funding for all named executive officers were based 100% on Corporate measures. Straight line interpolation occurs for achievement of performance between the specified EFO goals shown below. Participants also had an individual performance component which is funded (30%) from the Corporate EFO result. The individual performance payout can be adjusted upward or downward based on each leader’s performance against established Objectives, Goals, Strategies, Measures (“OGSMs”) and other financial and non-financial considerations. The goals at threshold, intermediate, target, and maximum for the 2023 STIP, as well as resulting performance for the measure of the corporate component were as follows:
| Corporate Component | 2023 Performance Goals | 2023 Performance | 2023 Payout | |||||||||
| Weighting | Threshold 50% | Target 100% | Maximum 200% | |||||||||
EFO | 100% | $52.50 | $75.00 | $97.50 | $72.30 | 94.0% | ||||||
$ in millions |
|
|
|
|
| 94.0% | ||||||
Under the terms of the STIP, the Committee retains the right in its discretion to adjust a STIP award based on Company, business unit, or individual performance. The Committee has no discretion to increase a STIP award for named executive officers, outside of the aforementioned parameters. STIP awards made in 2023 to named executive officers are subject to the Company’s Clawback Policy.
Based on these performance results, at its February 13, 2024 meeting, the Committee reviewed and approved payments to the named executive officers in accordance with the STIP provisions as follows:
Named Executive Officer | 2023 Base Salary Earnings | 2023 STIP Target as % of Salary | 2023 STIP Payout at Target | 2023 Payout as a Percentage of Target | 2023 STIP Payout | ||||||||||||||||||||
Peter W. Quigley | $ | 900,000 | 120 | % | $ | 1,080,000 | 94.0 | % | $ | 1,015,200 | |||||||||||||||
Olivier G. Thirot | $ | 667,200 | 85 | % | $ | 567,120 | 94.0 | % | $ | 533,093 | |||||||||||||||
Daniel H. Malan | $ | 443,000 | 55 | % | $ | 243,650 | 100.0 | % | $ | 244,000 | |||||||||||||||
Vanessa P. Williams | $ | 473,827 | 65 | % | $ | 307,987 | 105.5 | % | $ | 325,000 | |||||||||||||||
Dinette Koolhaas | $ | 557,668 | 55 | % | $ | 306,717 | 0.0 | % | — | ||||||||||||||||
Notes:
2023 STIP Payout amounts for Mr. Malan and Ms. Williams rounded to the nearest thousand;
Mr. Quigley’s final payout percentage of 94% was determined by the Committee based on overall assessment of the Company’s 2023 results;
for consistency, Mr. Thirot’s and Ms. Koolhaas’ amounts shown in USD using the IRS Yearly Average Currency Exchange Rate for Switzerland of 1.112. The actual exchange rate reflects the then-current rate; and
As part of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment with the Company terminated March 31, 2024. As a result, she was not entitled to a payment under the STIP, and instead received a termination payment as detailed in the “Potential Payments Upon Termination or Change in Control 2023” below.
| 56 | |
Compensation Discussion and Analysis
Long-Term Incentives
The EIP provides for long-term incentives that reward executives for achieving the Company’s long-term growth and profitability goals. Long-term incentive compensation is also intended to help the Company retain key employees, and provide those employees shared financial interests with the Company’s shareholders and positively influence their job performance and longer-term strategic focus. The EIP allows for grants of equity and non-equity awards to key employees.
The Committee believes that compensation programs for the Company’s senior officers should include strong alignment between pay and performance, with a significant portion of “at risk” pay. As a result, the Committee has provided regular long-term incentives for senior officers, including the named executive officers that heavily emphasize performance. In 2023 our CEO continued to receive a heavily performance-based LTI grant with 75% weighting in performance shares (at target) and 25% in restricted stock. All other named executive officer’s LTI awards were 60% performance shares (at target) and 40% restricted stock. The typical incentive mix emphasizes performance-contingent awards delivered through performance shares and places a lower weighting on restricted shares.
On average, target LTI awards granted to senior officers have historically been and remained below market median for 2023. The target LTI award amounts for each senior officer, including the named executive officers, are based on an established value for each officer level. The number of shares granted to each named executive officer is based on the grant value and closing stock price on the date of grant and can be found in the “Grants of Plan-Based Awards” table,
later in this document.
Performance measures used for purposes of funding LTI are the same as defined in the Company’s GAAP financial statements, excluding at the discretion of the Committee consideration of special items such as: changes in accounting, principles, gains or losses on acquisitions or divestitures, changes in budget due to acquisitions or divestitures, restructuring expenses, and other unusual items, which are defined as such and quantified in the financial statements, and/or footnotes to the Company’s Annual Report on Form 10-K. Adjustments would apply only to unbudgeted items. For 2023, additional consideration was made to certain special items related to the Company’s restructuring and EMEA divestiture.
Under the terms of the EIP, the Committee retains the right in its discretion to reduce an LTI award based on individual performance. The Committee has no discretion to increase an LTI award for named executive officers. LTI grants and any performance-based awards made under the EIP are subject to the Company’s Clawback Policy.
Performance Shares
Performance shares provide senior officers with the opportunity to earn shares, from zero to 200% of their target opportunity, based on achievement of pre-established measures and goals. For achievement of threshold performance, 50% of target performance shares would be earned; for achievement of target performance, 100% of target performance shares would be earned; and for achievement of maximum performance or higher, 200% of target performance shares would be earned under the typical long-term incentive design. Threshold goals are typically set at levels the Committee believes appropriate to start earning incentives. Target goals are set at budgeted levels, which are considered “challenging but achievable”. Maximum goals are set at significant stretch levels which the Committee believes warrant the earning of two times target payout. Straight line interpolation occurs for achievement of performance between threshold and target, and between target and maximum. Performance awards are granted in the form of Performance Share Units, which are not eligible for dividends or dividend equivalents.
For the 2023-2025 grant of performance shares, the two equally weighted financial measures, revenue growth and EBITDA margin, have one-year goals established for each of the three performance periods (2023, 2024, and 2025) that are set in the beginning of each performance period. This design provides the ability to set meaningful goals that deliver profitable growth in the continued unpredictable economic climate. In March 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for 2023. At the end of the 2023 performance period in early 2024, results for each of the two financial measures, determined the achievement and earning of shares. For the 2024 performance period, goals will be approved in early 2024 with results being reviewed in early 2025, and the 2025 performance period goals will be approved in early 2025. Any earned shares will vest 100% upon Committee approval on the third anniversary of the grant (February 2026).
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Compensation Discussion and Analysis
The following target number of performance shares were awarded for each performance measure to the named executive officers in 2023:
| Target Number of 2023-2025 Performance Shares Awarded | ||||||||||||
| Name | Financial Measures | Total Number of Performance Shares @ Target | ||||||||||
| Revenue Growth | EBITDA Margin | |||||||||||
Peter W. Quigley | 52,636 | 52,636 | 105,272 | |||||||||
Olivier G. Thirot | 17,354 | 17,354 | 34,708 | |||||||||
Daniel H. Malan | 6,218 | 6,218 | 12,436 | |||||||||
Vanessa P. Williams | 7,748 | 7,748 | 15,496 | |||||||||
Dinette Koolhaas | 6,769 | 6,769 | 13,538 | |||||||||
The 2023 threshold goals were set at levels for which the Committee believed it was appropriate to start earning incentives; the target goals werelevel was set at the expected/budgeted levels,level, which the Committee considered were “challenging but achievable”; maximum goals were set at significant stretch levels for which the Committee believed the earning of two times target payouts was warranted. The goals at threshold, target, and maximum for the 2015 STIP, as well as resulting performance for each measure of the corporate component were as follows:
$ in millions
| 2015 Performance Goals | Weighted | |||||||||||
Corporate Component Performance Measures | Weighting | Threshold | Target | Maximum | 2015 Actual Results | 2015 Payout (% of Target) | ||||||
Earnings from Operations | 33.3% | $53.136 | $66.420 | $92.988 | $70.759 (1) | 38.7% | ||||||
Return on Sales | 33.3% | 0.900% | 1.100% | 1.500% | 1.280% | 48.3% | ||||||
Gross Profit $ - Americas Staffing - Commercial | 16.7% | $366.273 | $406.970 | $488.364 | $408.543 | 17.0% | ||||||
Gross Profit $ - Global Professional & Technical (PT) | 16.7% | $205.170 | $227.966 | $273.559 | $221.660 | 14.4% | ||||||
| 100% | 118.4% | |||||||||||
|
Messrs. Camden, Corona, Quigley, and Thirot’s STIP opportunity was based 100% upon the performance measures of the corporate component, as shown above.
Ms. Carroll’s STIP opportunity was based 30% on the corporate component measures and 70% on the business unit measures for which she is accountable. Payout results for Ms. Carroll reflect lower than anticipated gross profit results, due largely to volume contraction and margin decline in the Recruitment Process Outsourcing (“RPO”) business, which was due in part to customers in the oil and gas industry who were significantly impacted by the falling price of oil. Performance results for each of Ms. Carroll’s business unit measures are as follows:
$ in millions
| 2015 Performance Goals | Weighted | |||||||||||
Corporate Component and Business Unit Performance Measures | Weighting | Threshold | Target | Maximum | 2015 Actual Results | 2015 Payout (% of Target) | ||||||
Corporate Component Performance Measures | 30.0% | see details above | 35.5% | |||||||||
Americas SAO + Global OCG Gross Profit $ | 35.0% | $327.724 | $364.138 | $455.173 | $336.200 | 7.0% | ||||||
Americas SAO + Global OCG Contribution | 35.0% | $56.494 | $70.617 | $105.926 | $67.678 | 26.3% | ||||||
| 100% | 68.8% | |||||||||||
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Under the terms of the STIP, the Committee retains the right in its discretion to reduce a STIP award based on Company, business unit, or individual performance. The Committee has no discretion to increase a STIP award for Named Executive Officers (though the Committee may approve a special bonus for Named Executives Officers on a discretionary basis to recognize exceptional performance or actions not related to objectives set forth in the STIP). Any awards made under the STIP are subject to the Company’s Incentive Compensation Recovery (“Clawback”) Policy.
Based on these performance results, at its February 17, 2016 meeting, the Committee reviewed and approved payments to the Named Executive Officers in accordance with the STIP provisions as follows:
| Named Executive Officer | 2015 Base Salary Earnings |
2015 | 2015 Payout as a Percentage of Target | 2015 STIP Payout | ||||
Carl T. Camden | $1,000,000 | 130% | 118.4% | $1,539,200 | ||||
George S. Corona | $655,000 | 90% | 118.4% | $697,968 | ||||
Peter W. Quigley | $482,227 | 65%/70% | 118.4% | $392,921 | ||||
Olivier G. Thirot | $481,034 | 40%/65% | 118.4% | $342,722 | ||||
Teresa S. Carroll | $482,227 | 65%/70% | 68.8% | $228,220 |
Notes:
Mr. Thirot’s compensation has been converted from Swiss Francs (CHF) to U.S. Dollars (USD) using the Company’s budgeted currency exchange rate of 1.0869 in effect for 2015.
The EIP provides for incentives that reward executives for achieving the Company’s long-term growth and profitability goals. Such compensation is also intended to help the Company retain key employees, and it gives those employees shared financial interests with the Company’s shareholders that are believed to positively influence their job performance and longer-term strategic focus. The EIP allows for grants of equity and non-equity awards to key employees. As described in the Executive Summary, the Committee approved a redesign of the Company’s long-term incentives for 2015 that included updated performance measures, a greater portion of performance-based compensation, and target opportunities for the Named Executive Officers that were set, on average, to near market competitive levels.
The Committee believes that compensation programs for the Company’s Senior Officers should include strong alignment between pay and performance, with a significant portion of “at risk” pay. As a result, the design of 2015 long-term incentives for Senior Officers, including the Named Executive Officers, was developed with grant levels based 75% on performance shares (at target) and 25% on restricted stock in order to create award opportunities that heavily emphasize performance. This was a significant design change from the prior long-term incentive awards that were weighted primarily on grants of restricted stock and, to a lesser extent, on a cash-based performance-based plan. The updated incentive mix emphasizes performance-contingent awards that are delivered through performance shares and places a reduced weighting on restricted shares.
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In prior years, target long-term incentive opportunities for Senior Officers were generally below market median. The overall target number of shares granted to Senior Officers under the 2015 long-term incentive awards brought target total direct compensation opportunities, on average, to near market median levels. The target number of shares granted to each Senior Officer in 2015, including the Named Executive Officers, were based on an established value for each officer level. The number of target shares granted to each Named Executive Officer can be found in the “Grants of Plan-Based Awards” table, later in this document. The actual value realized for the grant will be based upon achievement of the performance measures of the performance share awards and the price of the Company’s stock.
Performance shares provide Senior Officers with the opportunity to earn shares, from zero to 200% of their target opportunity, based on achievement of pre-established measures and goals. For 2015, the Committee selected the following equally weighted performance measures for the performance shares: return on gross profit in order to measure and drive expense efficiency; gross profit for the combined Outsourcing and Consulting Group (OCG) and PT businesses to maximize top-line profits (net of the cost of services) for these strategic focus businesses; and TSR relative to the S&P Small Cap 600 Index to drive TSR performance. The Committee believed that these performance measures were aligned with the business strategy and shareholder interests, and also provided balance with STIP measures across the strategic business objectives of the Company.
For the first grant of performance shares, the two financial measures, return on gross profit and gross profit for the OCG and PT businesses, were established with one-year performance goals for 2015. The Committee approved one-year measures for 2015 due to the challenges of establishing traditional three-year measures in an uncertain environment, with the expectation that the Company would set three-year goals in the future. Upon achievement of at least a threshold level of performance for either financial measure, shares would be contingently earned but would require an additional two years of continued employment before vesting in early 2018. The relative TSR measure of the performance shares is a three-year goal with vesting at the end of the 2015-2017 performance period, provided that a threshold level of performance for this measure is achieved. Performance awards were granted in 2015, contingent upon receiving shareholder approval of the updated EIP at the May 6, 2015 annual meeting, and such approval was received. The following table illustrates performance and vesting periods for each of the measures for the 2015 performance shares:
| Measures | 2015 | 2016 | 2017 | |||
• Return on Gross Profit • Gross Profit $: OCG + PT | One fiscal year Performance | Two additional years of vesting | ||||
• Relative TSR | Three-calendar year Performance Period | |||||
The following target number of performance shares were awarded for each performance measure to the Named Executive Officers in 2015:
| Target Number of Performance Shares Awarded | ||||||||
| Financial Measures | ||||||||
| Name | Return on | Gross Profit $: OCG + PT | Relative TSR | Total Number of Performance Shares @ Target | ||||
Carl T. Camden | 40,000 | 40,000 | 40,000 | 120,000 | ||||
George S. Corona | 17,500 | 17,500 | 17,500 | 52,500 | ||||
Peter W. Quigley | 10,000 | 10,000 | 10,000 | 30,000 | ||||
Olivier G. Thirot | 5,000 | 5,000 | 5,000 | 15,000 | ||||
Teresa S. Carroll | 10,000 | 10,000 | 10,000 | 30,000 | ||||
For achievement of threshold performance, 50% of target performance shares would be earned, for achievement of target performance, 100% of target performance shares would be earned and for achievement of maximum performance or higher, 200% of target performance shares would be earned under the 2015 long term incentive design. The threshold goals were set at levels for which the Committee believed it was appropriate to start earning incentives; target goals were set at the budgeted levels, which the Committee considered were “challenging but achievable”; maximum goals were set at significant stretch levels for which the Committee believed the earning of two times target payoutspayout was warranted. Straight line interpolation occurs for achievement of performance between threshold and target, and between target and maximum.the stated goals.
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Performance results for the two one-year financial measures of the 2015 performance shares were as follows:
| 2015 Performance Goals | ||||||||||
Financial Performance Measures | Threshold 50% | Target 100% | Maximum 200% | 2015 Actual Results | Funding Level (as % of Target) | |||||
Return on Gross Profit | 6.033% | 6.733% | 8.133% | 7.703% | 169.27% | |||||
Gross Profit $: OCG + PT | $363.799 | $404.221 | $485.066 | $372.728 | 61.04% | |||||
As a result of the above level of achievement for the two 2015 financial goals, the Committee approved the following earned shares for each Named Executive Officer, contingent upon meeting the additional two-year vesting requirement. Illustrated below are the target number of shares and the number of shares contingently earned for each of the two financial measures:
| Financial Measure: Return on Gross Profit | Financial Measure: Gross Profit $: OCG + PT | |||||||||
| Payout as % of Target: | 169.27% | Payout as % of Target: | 61.04% | Total # of Shares Earned from | ||||||
| Name | Target # of Shares | # of Shares Earned | Target # of Shares | # of Shares Earned | Financial Measures | |||||
Carl T. Camden | 40,000 | 67,709 | 40,000 | 24,418 | 92,127 | |||||
George S. Corona | 17,500 | 29,622 | 17,500 | 10,683 | 40,305 | |||||
Peter W. Quigley | 10,000 | 16,927 | 10,000 | 6,105 | 23,032 | |||||
Olivier G. Thirot | 5,000 | 8,464 | 5,000 | 3,052 | 11,516 | |||||
Teresa S. Carroll | 10,000 | 16,927 | 10,000 | 6,105 | 23,032 | |||||
Shares that are subject to the relative TSR measure have a three-year performance period, 2015 – 2017. TSR combines share price appreciation plus the value of reinvested ex-date dividends and is expressed as a percentage. For the 2015 performance shares, TSR will be calculated based on the average adjusted closing stock price for the twenty consecutive trading days immediately prior to the beginning and end of the three-year measurement period, January 1, 2015 to December 31, 2017. Shares are earned based on the Company’s TSR at the end of the three-year performance period relative to that of the S&P Small Cap 600 Index. In order to encourage appreciation of the Company’s share price, the calculated award will be reduced by 50% if at the end of the performance period the Company’s TSR is negative, indicating it has dropped over the three-year period.
Performance awards are granted in the form of Performance Share Units (“PSUs”). Performance shares are not eligible for dividends or dividend equivalents. In the event of a Senior Officer’ssenior officer’s termination of employment due to death, disability, normal retirement, or termination not for cause, theythe officer will receive a prorated award of performance shares based on actual results achieved, if any. Normal retirement is defined as age 62 with at least five years of service.service, or a combination of age plus years of service equal to 70, with a minimum age of 60. In order to be eligible for a prorated award due to termination by the Company not for cause, a Senior Officersenior officer must have been employed for at least one year after the date the grants were approved by the Committee. The prorated amount is based on the number of whole months in the performance period that were worked by the Senior Officersenior officer prior to termination divided by 36. AnyIn the case of termination not for cause in connection with a change in control, performance shares vest immediately at target amounts.
2021-2023 Long-Term Incentive Performance Results – Year 3
The 2021-2023 performance shares have two financial measures, revenue growth and EBITDA margin, which have three one-year goals set in the beginning of each performance year. In February 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for the 2023 portion of the award opportunity. During its February 13, 2024 meeting, the Committee approved the results for the 2023 performance year. Earned shares vested 100% upon Committee approval. Aggregate funding for all performance measures during the 2023 performance year was 50% of target. The final performance results for the 2023 performance year are provided in the following chart:
| Financial Performance Measures | 2023 Performance Goals | 2021 Year 3 Actual Results(1) | Payout as % of Target | |||||||||||||||||
| Weighting | Threshold 50% | Target 100% | Maximum 200% | |||||||||||||||||
Revenue Growth | 50.0% | $4,822.56 | $5,076.38 | $5,518.03 | $4,771.91 | 0.00% | ||||||||||||||
EBITDA Margin | 50.0% | 1.65% | 2.25% | 2.77% | 2.25% | 100.00% | ||||||||||||||
$ in millions |
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| Weighted Payout: | 50.00% | |||||||||
| (1) | 2023 performance amount includes adjustments for restructuring and divestiture costs and other considerations approved by the Committee. |
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Compensation Discussion and Analysis
As a result of the above level of achievement for each of the performance measures for year 3 of the 2021-2023 LTI award, the Committee approved the following number of earned under any measureperformance shares for each named executive officer.
| Financial Measure: Revenue Growth | Financial Measure: EBITDA Margin | Total # of Year 3 Performance Shares Earned | |||||||||||||||||||||||
| Payout as % of Target: 0.00% | Payout as % of Target: 100.00% | ||||||||||||||||||||||||
| Name | Year 3 Target # of Shares | Year 3 # of Shares Earned | Year 3 Target # of Shares | Year 3 # of Shares Earned | |||||||||||||||||||||
Peter W. Quigley | 9,991 | 0 | 9,991 | 9,991 | 9,991 | ||||||||||||||||||||
Olivier G. Thirot | 5,056 | 0 | 5,056 | 5,056 | 5,056 | ||||||||||||||||||||
Daniel H. Malan | 1,662 | 0 | 1,662 | 1,662 | 1,662 | ||||||||||||||||||||
Vanessa P. Williams | 2,080 | 0 | 2,080 | 2,080 | 2,080 | ||||||||||||||||||||
Dinette Koolhaas | 1,598 | 0 | 1,598 | 1,598 | 1,598 | ||||||||||||||||||||
2022-2024 Long-Term Incentive Performance Results – Year 2
The 2022-2024 performance shares have two financial measures, revenue growth and EBITDA margin, which have three one-year goals set in the beginning of each performance year. In February 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for the 2023 portion of the award opportunity. During its February 13, 2024 meeting, the Committee approved the results for the 2023 performance year. Earned shares will vest 100% upon the third anniversary of the grant (February 2025). Aggregate funding for all performance measures during the 2023 performance year was 50% of target. The final performance results for the 2023 performance year are provided in early 2018,the following approvalchart:
| Financial Performance Measures | 2023 Performance Goals | 2022 Year 2 Actual Results(1) | Payout as % of Target | |||||||||||||||||
| Weighting | Threshold 50% | Target 100% | Maximum 200% | |||||||||||||||||
Revenue Growth | 50.0% | $4,822.56 | $5,076.38 | $5,518.03 | $4,771.91 | 0.00% | ||||||||||||||
EBITDA Margin | 50.0% | 1.65% | 2.25% | 2.77% | 2.25% | 100.00% | ||||||||||||||
$ in millions |
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| Weighted Payout: | 50.00% | |||||||||
| (1) | 2023 performance amount includes adjustments for restructuring and divestiture costs and other considerations approved by the Committee. |
As a result of the above level of achievement for each of the performance measures for year 2 of the 2022-2024 LTI award, the Committee approved the following number of earned performance shares for each named executive officer.
| Financial Measure: Revenue Growth | Financial Measure: EBITDA Margin | Total # of Year 2 Performance Shares Earned | |||||||||||||||||||||||
| Payout as % of Target: 0.00% | Payout as % of Target: 100.00% | ||||||||||||||||||||||||
| Name | Year 2 Target # of Shares | Year 2 # of Shares Earned | Year 2 Target # of Shares | Year 2 # of Shares Earned | |||||||||||||||||||||
Peter W. Quigley | 10,611 | 0 | 10,611 | 10,611 | 10,611 | ||||||||||||||||||||
Olivier G. Thirot | 5,064 | 0 | 5,064 | 5,064 | 5,064 | ||||||||||||||||||||
Daniel H. Malan | 1,728 | 0 | 1,728 | 1,728 | 1,728 | ||||||||||||||||||||
Vanessa P. Williams | 2,377 | 0 | 2,377 | 2,377 | 2,377 | ||||||||||||||||||||
Dinette Koolhaas | 2,159 | 0 | 2,159 | 2,159 | 2,159 | ||||||||||||||||||||
2023-2025 Long-Term Incentive Performance Results – Year 1
As described above, the 2023-2025 performance shares have two financial measures, revenue growth and EBITDA margin, which have three one-year goals set in the beginning of each performance year. In February 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for the 2023 portion of the award opportunity. During its February 13, 2024 meeting, the Committee approved the results for the 2023 performance year.
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Compensation Discussion and Analysis
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| Financial Performance Measures | 2023 Performance Goals | 2023 Year | Payout | |||||||||||||||||
| Weighting | Threshold 50% | Target 100% | Maximum 200% | |||||||||||||||||
Revenue Growth | 50.0% | $4,822.56 | $5,076.38 | $5,518.03 | $4,771.91 | 0.00% | ||||||||||||||
EBITDA Margin | 50.0% | 1.65% | 2.25% | 2.77% | 2.25% | 100.00% | ||||||||||||||
$ in millions |
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| Weighted Payout: | 50.00% | |||||||||
| (1) | 2023 performance amount includes adjustments for restructuring and divestiture costs and other considerations approved by the Committee. |
As a result of the above level of achievement for each of the performance measures for year 1 of the 2023-2025 LTI award, the Committee approved the following number of earned performance shares for each named executive officer.
| Financial Measure: Revenue Growth | Financial Measure: EBITDA Margin | Total # of Year 1 Performance Shares Earned | |||||||||||||||||||||||
| Payout as % of Target: 0.00% | Payout as % of Target: 100.00% | ||||||||||||||||||||||||
| Name | Year 1 Target # of Shares | Year 1 # of Shares Earned | Year 1 Target # of Shares | Year 1 # of Shares Earned | |||||||||||||||||||||
Peter W. Quigley | 17,545 | 0 | 17,545 | 17,545 | 17,545 | ||||||||||||||||||||
Olivier G. Thirot | 5,784 | 0 | 5,784 | 5,784 | 5,784 | ||||||||||||||||||||
Daniel H. Malan | 2,072 | 0 | 2,072 | 2,072 | 2,072 | ||||||||||||||||||||
Vanessa P. Williams | 2,582 | 0 | 2,582 | 2,582 | 2,582 | ||||||||||||||||||||
Dinette Koolhaas | 2,256 | 0 | 2,256 | 2,256 | 2,256 | ||||||||||||||||||||
Restricted Stock
RestrictedThe Committee considers restricted stock is considered by the Committee to be an effective vehicle to support the Company’s long-term compensation objectives:
Alignment with shareholder interests;
| ● | alignment with shareholder interests; |
Facilitate retention through an extended pro-rata vesting structure; and
| ● | facilitate retention through an extended pro rata vesting structure; and |
Support meaningful stock ownership.
| ● | support meaningful stock ownership. |
At its February 11, 2015March 21, 2023 meeting, the Committee approved restricted stock grants for Senior Officers,senior officers, including the Named Executive Officers,named executive officers, which vest ratably over fourthree years, as detailed in the Summary Compensation Table and the Grants of Plan Based Awards Table. This grant of restricted shares represents 25% of each Senior Officer’sfor the CEO and 40% for all other senior officers’ target long-term incentive grant. The Company believes that restricted stock awards areis an important component of total compensation for our Named Executive Officersnamed executive officers and the four-year, pro-ratathree-year, pro rata vesting feature supports the Company’s retention objective. RestrictedAny remaining unvested portion of restricted stock awards areis forfeited upon voluntary termination, normal retirement, and involuntary termination withoutfor cause and vestingor not for cause, unless termination not for cause is not accelerated in the case ofconnection with a change in control. In the case of termination not for cause in connection with a change in control, all restricted stock shares or units vest immediately. Restricted stock awards areis prorated in the event of termination due to death or disability.
On an exception basis,Special Awards
In December 2021, the Committee has the authority to grant aapproved performance contingent restricted stock grants (KEEP Awards) for senior officers, including the named executive officers, and certain other senior leaders. These grants of restricted stock units had three financial measure hurdles that had to be achieved in order for shares to become earned and eligible for vesting. In January 2023, the Committee approved an adjustment in the vesting for the Company gross profit portion of this award withto 50% upon certification and the remaining 50% six months after certification; there was no change to the goal. In 2022 the gross profit goal was achieved and shares vested during 2023. In 2023 the specialty gross profit goal was achieved and as a result during its August 9, 2023 meeting, the Committee approved an adjustment in the vesting periodfor the specialty gross profit
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Compensation Discussion and Analysis
portion of this award to 50% upon certification and the remaining 50% six months after certification; there was no less than twelve months. Nochange to this goal. The third goal, conversion rate, continues to have the potential to be earned during the first half of 2024.
| Financial Measure: Conversion Rate | |||||
| Name | Target # of Shares | ||||
Peter W. Quigley | 21,857 | ||||
Olivier G. Thirot | 17,971 | ||||
Daniel H. Malan | 7,286 | ||||
Vanessa P. Williams | 5,343 | ||||
Dinette Koolhaas | 4,856 | ||||
In 2023, there was a special grants, outsiderecognition grant made to Mr. Malan. The Committee approved a grant of restricted stock valued at approximately $250,000 for Mr. Malan as noted in the Grants of Plan-Based Awards Table. These shares will cliff vest on the second anniversary date of the long-term incentive awards granted to all Senior Officers, weregrant, which was made to any of the Named Executive Officers during 2015.on February 14, 2023.
Long-Term Incentive for 2013-2015 and 2014-2016
The long-term incentive design that was used to grant awards in 2012, 2013, and 2014, was a performance-based long-term cash incentive plan for Senior Officers, including the Named Executive Officers, except for Mr. Thirot who was not a Senior Officer at the time these grants were made. The design provided for grants of cash-based performance awards that vested based upon achievement of specific Company performance measures over a three-year period. Specific performance goals for each grant were established by the Committee for each three-year performance period. During 2015, there were still two outstanding grants under this LTI design, the performance period covering fiscal years 2013 through 2015 and the performance period covering fiscal years 2014 through 2016. The measures for both performance periods included a balance of performance as measured by Cumulative After-Tax Earnings and Return on Sales (ROS) in the final year of the performance period, each weighted equally at 50%. A threshold level of performance must be attained on at least one measure in order to earn a payout under the plan. Award amounts earned are based on the level of achievement for each of the performance measures, as indicated in the following chart:
Results as % of Target | Opportunity Per Participant by Performance Level (Cash Value) | |||||||||||||
Cumulative | Return on (weighted | Payout as % of Target | CEO | COO | EVP | SVP | ||||||||
Threshold | 60% | 50% | $112,500 | $87,500 | $62,500 | $37,500 | ||||||||
Target | 100% | 100% | $225,000 | $175,000 | $125,000 | $75,000 | ||||||||
Maximum | 120% | 150% | $337,500 | $262,500 | $187,500 | $112,500 | ||||||||
Under the terms of the EIP, the Committee retains the right in its discretion to reduce an LTI award based on individual performance. The Committee has no discretion to increase an LTI award for Named Executive Officers. LTI grants are designed to comply with the requirements of Section 162(m) of the Internal Revenue Code (the “Code”) and any performance-based awards made under the EIP are subject to the Company’s Clawback Policy.
After consideration of Company performance for 2015, the final fiscal year of the three-year 2013-2015 LTI performance period, and consistent with our pay for performance philosophy, the Committee determined that there would be no payout for this performance period as threshold performance was not achieved for either measure. Based on Company performance for the first two fiscal years of the three-year 2014-2016 LTI performance period, it is possible that a threshold level of performance could be achieved if the Company performs well on the LTI measures in 2016.
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Highly compensated employees in the U.S. are not eligible to participate in the Company’s qualified 401(k) plan. In order to provide a competitive total compensation package, the Company has established the Management Retirement Plan (the “MRP”), a nonqualified retirement plan. The Named Executive Officers based in the U.S., other than those who are here on an international assignment, are eligible to participate in the MRP.. The MRP is a U.S. nonqualified defined contribution/deferred compensation plan available to all highly compensated employees, including the named executive officers, as outlined by Section 414(q)(1)(B)(i) of the Code. Employees who are working in the U.S. while on an international assignment are not eligible to participate in the MRP. All participants in the MRP can elect to defer from 2% to 25% of their annual base earnings and 2% to 50% of their annual cash incentive earnings. Matching contributions by the Company equal 50% of the first 10% of base salary and annual cash incentives deferred by a participant. Other than the MRP, there are no other retirement income plans available to the Company’s highly compensated employees in the U.S. The MRP provides all participants, including the Named Executive Officers,named executive officers, with a tax gross-up of Medicare taxes incurred on contributions to the plan. The Medicare tax gross-up provides for parity with other employees who are eligible to participate in the Company’s tax-qualified 401(k) plan and therefore do not pay Medicare tax on Company contributions.
Mr. Thirot’s Retirement Benefits
As a resident of Switzerland, Mr. Thirot participates in the Swiss Social Insurance System (“Swiss System”) that provides retirement, disability, and death benefits. His Swiss retirement benefit includes contributions that he makes to the fund, as well as companyCompany contributions that are made to the fund on his behalf. Mr. Thirot participated in the MRP during the period 2017-2021 while he was a resident of the U.S. and retains a benefit from both his contributions and contributions the Company made on his behalf to that plan.
Ms. Koolhaas’ Retirement Benefits
As a resident of Switzerland, Ms. Koolhaas also participates in the Swiss System that provides retirement, disability, and death benefits. Her retirement benefit includes contributions that she makes to the fund, as well as Company contributions that are made to the fund on her behalf. Ms. Koolhaas does not participate in any U.S.-basedU.S.- based retirement plans.
The health and welfare plans, including Company-provided life insurance, provided to the U.S. Named Executive Officers are the same plans available to all regular staff employees.
Mr. Thirot’s Health and Welfare Benefits
Mr. Thirot is required by Swiss law to carry health care coverage. However, the Company’s Swiss entity does not provide health care coverage to its employees, nor do we provide Mr. Thirot with a health care allowance. Under the Swiss System, Mr. Thirot’s spouse is eligible to receive benefits in the event of his death from sickness or accident. He no longer participates in any U.S. health and welfare benefit programs.
Ms. Koolhaas’ Health and Welfare Benefits
Ms. Koolhaas receives a health care allowance as part of hisher Swiss compensation that is intended to help defray the cost of obtaining health care coverage for himselfherself and hisher family in Switzerland. Residents in Switzerland are required to carry health care coverage, however it is not common for Swiss companies to provide this benefit to their employees. The Company’s
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Compensation Discussion and Analysis
Swiss entity does not provide health care coverage to its employees. While on assignment in the U.S., Mr. Thirot pays employee premiums for health care coverage for himself and his dependents under an international plan established for employees who are on international assignments. Under the Swiss System, Mr. Thirot’sMs. Koolhaas’ spouse is eligible to receive benefits in the event of hisher death from sickness or accident. HeShe is not a participant in theany U.S. life insurance program.health and welfare benefit programs.
A modest level of perquisites is available to Named Executive Officers:named executive officers:
Perquisite | Benefit | Usage in | ||||
Executive Physical | To ensure | Two | ||||
Vacation Facility | ||||||
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The aggregate amount of perquisites provided in 20152023 for each of the Named Executive Officers, with the exception ofnamed executive officers, except for Mr. Thirot and Ms. Koolhaas, was less than $10,000.
$10,000 and therefore only the perquisites for Mr. Thirot is provided with certain benefits as a result of his international assignment. These amountsand Ms. Koolhaas are includedreported in the “All Other Compensation” column of the Summary Compensation Table of this Proxy Statement and are explained in detail in the footnotes of that table.Table.
Senior Executive Severance Plan
In order to provide a mechanism to ensureTo encourage the retention of the Named Executive Officers, the Board of Directors, upon the recommendationcertain key executives of the Committee, adopted anCompany and thereby promote the stability and continuity of management, the Senior Executive Severance Plan (the “Severance(“Severance Plan”) in April 2006 for a limited number of Executive Officers. Of this original group of Executive Officers, only Mr. Camdenwas established by the Company and Mr. Corona remain as participantsapproved by the Committee effective March 31, 2017. During its March 23, 2021 meeting, the Committee approved expanding the Severance Plan to include other senior officers. For 2023, the named executive officers participating in the Severance Plan.Plan were, Messrs. Quigley and Malan and Ms. Williams. The Severance Plan provides severance benefits in the event a participant’s employment is terminated under certain circumstances as explained and illustrated in the section Potential Payments Upon Termination.Termination or Change in Control (below). The CompanyPlan does not provide other special benefitsexcise tax gross-ups to participants under Section 280G of the Code.
The Company’s EIP provides for the immediate vesting of restricted stock and performance awards upon a qualified termination in connection with a change in control (e.g., “double trigger”), which is also explained in Potential Payments Upon Termination or upon termination following a changeChange in control.Control.
Under the terms of the Severance Plan covering the two eligible Named Executive Officers,named executive officers, each would be entitled to severance payments and benefits in the event that he or she experiences a “qualifying termination” (i.e., any termination without causeof the participant by the Company other than for cause, disability, or death, or for good reason by the Named Executive Officer, eacha participant in connection with a change in control as is defined in the Severance Plan). A change in control will not automatically entitle an eligible named executive officer to severance benefits or equity acceleration; instead, the executive must also lose his or her job, or suffer a significant adverse change to employment terms or conditions in order to be eligible for benefits under the Severance Plan. In the event of a termination for any reason, eligible Named Executive Officersnamed executive officers would be entitled to any earned compensation owed but not yet paid as of the date of termination. The eligible Named Executive OfficerEligible named executive officers would also be entitled to payment of vested benefits, if any. Details of the Severance Plan are provided in the Potential Payments Upon Termination or Change in Control section of this Proxy Statement.
Mr. Thirot’s Severance Benefit
Under the terms of Mr. Thirot’s Swiss employment agreement if he is eligible for similar severance benefits to a Tier 2 participant of the Severance Plan.
Ms. Koolhaas’ Severance Benefit
Under the terms of Ms. Koolhaas’ Swiss employment agreement she is eligible for similar severance benefits to a Tier 3 participant of the Severance Plan.
As a consequence of the completion of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment terminated byMarch 31, 2024. The termination payments to be made to Ms. Koolhaas are described in the Company, other than for willful misconduct, he will be provided with either three months’ notice“Potential Payments Upon Termination or three monthsChange in Control” section below.
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Compensation Discussion and Analysis
Governance of salary in lieu of notice, at the Company’s discretion.
Executive Compensation GovernancePrograms
Executive Stock Ownership and Retention Requirements
The Committee seeksimplemented minimum stock ownership and retention requirements to encourage meaningful stock ownership by the Company’s executives so as to alignthat aligns their interests more closely with shareholders’ interests. In 2005, theThe Committee approvedperiodically reviews the Executive Stock Ownership Requirements Plan (the “Stock Ownership Plan”) for Senior Officers. “Stock Ownership”to ensure the design is defined to include stock ownedconsistent with current market practice and those of our peers, as determined by research performed by the Senior OfficerConsultant. The requirements are expressed as a multiple of base salary for each level of senior officer, as shown in the table below.
| 2023 Minimum Stock Ownership Requirements | ||||
| Multiple of Base Salary | ||||
CEO | EVP | Other Senior Officers | ||
6x | 3x | 1x-1.5x | ||
During 2023, the Committee reviewed the executive stock ownership requirements to be in line with market practice and immediatecontinue to focus on the retention of senior officers. Under the ownership requirements, senior officers are required to hold (50%) of the after-tax shares acquired upon equity award vesting until compliance with the stock ownership requirements is achieved.
Shares counted toward achievement of ownership requirements include: directly owned shares, shares held by family members directly, the “net value”or trusts, and 100% of anyunvested restricted stock awards, not vested, and shares held in trust. Net value is defined as 60% of the restricted stock award.units, and earned unvested performance shares. Although there is not a fixed compliance period, it is likely that new senior officers will reach the requirements within five years from their start date. The minimumCommittee reviews each executive’s progress towards and compliance with the share ownership requirement for Senior Officers by titlerequirements on an annual basis. If the required level of ownership is as follows:
| 2015 Minimum Stock Ownership Requirements | ||||||
| Number of Shares | ||||||
| CEO | COO | EVP | SVP | |||
| 70,000 | 50,000 | 30,000 | 10,000 | |||
The Stock Ownership Plan allows six years for Senior Officers to meet their stock ownership requirements. Upon achievementnot achieved within a reasonable period of time or an executive falls out of compliance with the minimum share ownership requirement, all executives are required to retain ownershiprequirements, the Committee can eliminate or adjust the amount of 50% of the net value of all restricted stock awards granted in theany future in order to build stock ownership over time.equity awards. Stock ownership levels must be maintained as long as the executive is employed by the Company as a senior officer and is a participant insubject to the terms of the Executive Stock Ownership Plan. The Committee reviews each executive’s progress towards and compliance with the share ownership
46
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requirements on an annual basis. If the required level of ownership is not achieved within the specified time period, the Committee can eliminate or adjust the amount of any future equity awards. The Committee periodically reviews the Stock Ownership Plan requirements to ensure design is consistent with market practice.Requirements.
As of January 3, 2016,February 13, 2024, all Named Executive Officersnamed executive officers have met their stock ownership requirement under the current requirements.requirement.
In consideration of the Company’s new LTI design that provides Senior Officers with the opportunity to earn a greater number of shares through the addition of performance share awards and to ensure guidelines are in line with current market practice and those of our peers, the Committee approved new executive stock ownership and retention requirements at its February 17, 2016 meeting. The new requirements are expressed as a multiple of base salary for each level of Senior Officer and more closely reflect current market practices, as determined by research performed by the Consultant.
Under the 2016 ownership requirements, Senior Officers will be required to hold all (100%) of the after-tax shares acquired upon equity award vesting until compliance with the requirements is achieved. Shares counted toward achievement of ownership requirements include: directly owned shares (including in retirement plans), shares held by family or trusts, 60% of unvested restricted stock, restricted stock units, and earned unvested performance shares, and earned and vested performance shares. Compliance with guidelines will continue to be assessed annually at the Committee’s February meeting. Although there is not a fixed compliance period, it is anticipated that new Senior Officers will likely reach the guidelines within five years from their start date.
Incentive Compensation Recovery (“Clawback”) Policy
To support theThe Company’s focus on compensation program governance, the Committee approved implementation of a Clawback Policy at its February 17, 2011 meeting. This policy applies to awards granted under the STIP and EIP on or after January 1, 2011 to officers of the Company who are subject to Section 16(b)16 of the Securities Exchange Act of 1934. In early 2019, the application of the Clawback Policy was broadened to include all senior officers. These officers are required to repay or forfeit, to the fullest extent permitted by law and as directed by the Committee, any performance-based annual or long-term incentive compensation, based on the achievement of financial results that were subsequently restated due to the Company’s material non-compliance with the financial disclosure requirements of the federal securities laws, provided the amount of incentive compensation that would have been received or earned would have been lower had the financial results been properly reported. If necessary, we plan to modify ourIn 2023, the Company modified its policy to comply with the provisions of the Dodd-Frank Wall Street Reformnew SEC and Consumer Protection Act (“Dodd-Frank”), when the SEC or Nasdaq implements rules and regulations. The Clawback Policy is included as part of the Company’s updated Insider Trading Policy and Section 16 Compliance Procedures.
Hedging and Pledging of Shares
The Company’s Insider Trading Policy and Section 16 Compliance Procedures as updated in July 2013,strictly prohibit the Company’s directors and reaffirmed in August 2015, provide that no Director or Officer ofall employees, including the Company shall engagenamed executive officers, from engaging in hedging, monetization or other derivative or speculative transactions in securities of the Company without prior approval of the Corporate Secretary.Company. This includes short sales, failing to deliver Company securities sold, put or call options, equity swaps, collars, forward sale contracts, exchange funds, holding Company securities in a margin account, or pledging Company securities as collateral for a loan. The EIP does not allow the pledging, sale, assignment, or transfer of shares in any manner, except if the Committee determines that a transfer will not violate any requirements of the SEC or IRS. The Committee may permit an inter vivos transfer by gift to, or for the benefit of, a family member of the grantee.
Tax and Accounting Implications
Considerations: Deductibility of Executive Compensation
Section 162(m) of the Code places a limit of $1 million on the amount of nonperformance-based compensation that can be deducted for tax purposes for the CEO, CFO, and the other three highest paid executives (excluding the CFO) listed in the Summary Compensation Table. However, tax deductibility is only one factor consideredTable, or were listed in the Summary Compensation Table in any decision regardingpreceding year after 2016. Prior to 2018, the Company’s incentive compensation programs were generally designed to qualify for the performance-based exception to this limit. Beginning in 2018, effective
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Compensation Discussion and Analysis
47
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with the Tax Cuts and Jobs Act that was enacted in December 2017, the corporate tax deduction previously available for performance-based compensation above $1 million for current or former named executive compensation. In orderofficers was eliminated. This means that pay to best serveeach current or former named executive officer in excess of $1 million is no longer tax deductible. Now that the performance-based exception is no longer available, the Company will no longer include reference to Section 162(m) related limitations or provisions or shareholder approval for this purpose. However, management and the interestsCommittee currently intend to retain as good governance, certain practices that had been in place previously for Section 162(m) purposes. These practices include: specification of its shareholders,guidelines for the Company may determine that paymentadjustment of non-deductible compensation is necessaryspecial items, establishing performance goals within the first ninety days of a performance period, and appropriaterequiring the Committee’s certification of results prior to provide rewards consistent with the overall philosophypayout of any award.
Compensation and objectives of the compensation program.
CompensationTalent Management Committee Report
Prior to and at itsthe Special Board of Directors meeting held on March 22, 2016,19, 2024, the Compensation and Talent Management Committee members reviewed and discussed the Compensation Discussion and Analysis presented in this Proxy Statement. Based on its review and subsequent discussions with management, the Committee approved the Compensation Discussion and Analysis and directed management to include it in this Proxy Statement.
This report is submitted by the Compensation and Talent Management Committee of the Board of Directors.
THE COMPENSATION AND TALENT MANAGEMENT
COMMITTEE
ROBERT S. CUBBIN, CHAIR
GERALD S. ADOLPH
INAMARIE F. JOHNSON
LESLIE A. MURPHY
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2023 Executive Compensation Tables
Summary Compensation Table 2023
| Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2),(3) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Earnings ($) | All Other Compensation(4)(5)(6) ($) | Total ($) | |||||||||
Peter W. Quigley | 2023 | 900,000 | — | 2,160,522 | — | 1,015,200 | — | 87,702 | 4,163,424 | |||||||||
President and Chief | 2022 | 884,077 | — | 1,811,085 | — | 777,988 | — | 62,131 | 3,535,281 | |||||||||
Executive Officer | 2021 | 840,000 | — | 2,734,149 | — | 320,628 | — | 43,831 | 3,938,608 | |||||||||
Olivier G. Thirot | 2023 | 667,200 | — | 897,770 | — | 533,093 | — | 88,086 | 2,186,148 | |||||||||
Executive Vice President | 2022 | 620,583 | — | 864,388 | — | 443,300 | — | 76,181 | 2,004,451 | |||||||||
and Chief Financial Officer | 2021 | 588,000 | — | 1,732,281 | — | 180,000 | — | 45,225 | 2,545,506 | |||||||||
Daniel H. Malan | 2023 | 443,000 | — | 571,681 | — | 244,000 | — | — | 1,258,681 | |||||||||
Senior Vice President and | 2022 | — | — | — | — | — | — | — | — | |||||||||
President Science, | 2021 | — | — | — | — | — | — | — | — | |||||||||
Engineering, & Technology | ||||||||||||||||||
Vanessa P. Williams | 2023 | 473,827 | — | 400,835 | — | 325,000 | — | 26,122 | 1,225,784 | |||||||||
Senior Vice President and | 2022 | 413,115 | — | 405,706 | — | 225,600 | — | 20,666 | 1,065,088 | |||||||||
General Counsel | 2021 | — | — | — | — | — | — | — | — | |||||||||
Dinette Koolhaas | 2023 | 557,668 | — | 350,178 | — | — | — | 50,020 | 957,866 | |||||||||
Senior Vice President and | 2022 | 521,865 | — | 368,498 | — | 318,900 | — | 32,859 | 1,242,122 | |||||||||
President International | 2021 | 535,240 | — | 505,786 | — | 198,000 | — | 34,138 | 1,273,163 | |||||||||
| (1) |
|
48
| (2) | The grant date fair values reported for 2023 are determined by multiplying the number of shares granted by the Market Value (“MV”) on the grant date. MV for Restricted Stock is determined by the closing price on the date of grant. MV for Performance Shares is determined by the closing stock price on the date of grant, discounted because these shares are not eligible for dividends. The MV for the Restricted Stock granted to Mr. Malan on February 14, 2023 is $17.93 and to all named officers on March 21, 2023 is $16.03. The MV for Performance Shares granted to all named officers on March 21, 2023 is $15.18. |
| (3) | The maximum number of shares and award value for Performance Share awards for the 2023-2025 performance period is 200% of target shares granted. The table below shows the maximum number of shares and value for Performance Share awards based on achievement of financial measures using the values of $15.18 for shares granted March 21, 2023. |
| Name | Maximum Number of Performance Shares | Maximum Value of Performance Shares | ||||||
Peter W. Quigley | 210,544 | 3,196,058 | ||||||
Olivier G. Thirot | 69,416 | 1,053,735 | ||||||
Daniel H. Malan | 24,872 | 377,557 | ||||||
Vanessa P. Williams | 30,992 | 470,459 | ||||||
Dinette Koolhaas | 27,076 | 411,014 | ||||||
| (4) | Amounts for named executive officers include company matching contributions to the Management Retirement Plan (“MRP”), and Medicare tax gross-ups on those MRP contributions. (See table below.) The total value of perquisites provided to each named executive officer (other than Mr. Thirot and further below, Ms. Koolhaas) in 2023 was less than $10,000 and, in accordance with reporting regulations, were not required to be included in this table. |
Name | Company Matching MRP Contributions | MRP Medicare Gross-ups | Total All Other Compensation | |||||||||
Peter W Quigley | 83,899 | 3,803 | 87,702 | |||||||||
Daniel H. Malan | — | — | – | |||||||||
Vanessa P. Williams | 23,691 | 2,431 | 26,122 | |||||||||
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2023 Executive Compensation Tables
Summary Compensation Table 2015
As discussed previously, the “Stock Awards” amounts for 2015 reflect primarily performance-contingent award opportunities that are only earned if specific financial and relative TSR goals are achieved, whereas, the 2013 and 2014, “Stock Awards” were only subject to continued employment.
| (5) | The amount reported for Mr. Thirot includes carryover costs associated with his international assignment from Switzerland to the U.S.: fee’s related to U.S. tax preparation of $6,415, fee’s related to Switzerland tax preparation of $19,884, and additional administrative expenses of $1,315, car allowance, and supplemental contribution to the government-mandated occupational pension benefit program paid through Swiss payroll. The amount reported for Ms. Koolhaas includes her representation allowance, supplemental health care allowance, and supplemental contribution to the government-mandated occupational pension benefit program paid through Swiss payroll. |
| Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in ($) | All Other ($) | Total ($) | |||||||||||||||||||||||||||
| Carl T. Camden | 2015 | 1,000,000 | - | 2,651,200 | - | 1,539,200 | - | 139,237 | 5,329,637 | |||||||||||||||||||||||||||
| President and Chief | 2014 | 1,000,000 | - | 1,229,600 | - | 1,404,000 | - | 120,732 | 3,754,332 | |||||||||||||||||||||||||||
| Executive Officer | 2013 | 1,000,000 | - | 1,594,400 | - | 1,274,000 | - | 163,079 | 4,031,479 | |||||||||||||||||||||||||||
| George S. Corona | 2015 | 655,000 | - | 1,159,900 | - | 697,968 | - | 80,072 | 2,592,940 | |||||||||||||||||||||||||||
| Executive Vice President | 2014 | 655,000 | - | 768,500 | - | 636,700 | - | 75,782 | 2,135,982 | |||||||||||||||||||||||||||
| and Chief Operating Officer | 2013 | 640,000 | - | 996,500 | - | 564,500 | - | 80,642 | 2,281,642 | |||||||||||||||||||||||||||
| Peter W. Quigley | 2015 | 482,227 | - | 662,800 | - | 392,921 | - | 51,297 | 1,589,245 | |||||||||||||||||||||||||||
| Senior Vice President, General | 2014 | 419,250 | - | 308,700 | - | 294,300 | - | 38,006 | 1,060,256 | |||||||||||||||||||||||||||
Counsel, and Chief Administrative Officer | 2013 | 403,750 | - | 378,600 | - | 257,200 | - | 39,500 | 1,079,050 | |||||||||||||||||||||||||||
| Olivier G. Thirot (7) | 2015 | 481,032 | - | 331,400 | - | 342,722 | - | 295,811 | 1,450,965 | |||||||||||||||||||||||||||
Senior Vice President and Chief Financial Officer | ||||||||||||||||||||||||||||||||||||
| Teresa S. Carroll | 2015 | 482,227 | - | 662,800 | - | 228,220 | - | 43,799 | 1,417,046 | |||||||||||||||||||||||||||
Senior Vice President and General Manager, Global Talent Solutions | - | |||||||||||||||||||||||||||||||||||
| Patricia A. Little | 2015 | 120,625 | - | 828,500 | - | - | 30,297 | 979,422 | ||||||||||||||||||||||||||||
| Former Executive Vice President | 2014 | 570,000 | - | 384,250 | - | 461,700 | - | 56,376 | 1,472,326 | |||||||||||||||||||||||||||
| and Chief Financial Officer | 2013 | 554,250 | - | 498,250 | - | 407,400 | - | 63,132 | 1,523,032 | |||||||||||||||||||||||||||
(1) Represents 2013, 2014 and 2015 actual base salary earnings.
(2) Grant date fair value is determined by multiplying the number of shares granted by the Market Value (“MV”) on the grant date. MV is determined by the closing price on the date of grant. The MV for the Restricted Stock awards granted on February 11, 2015 is $17.65. The target Performance Share awards that are based on financial measures were valued using the closing stock price on the date of grant, May 6, 2015, discounted because these shares are not eligible for dividends, resulting in a value of $16.31. The target Performance Share awards that are based on the relative TSR measure were valued at $16.01 using a Monte Carlo valuation method, effective the date of grant, May 6, 2015. Please reference the Company’s 2015 10-K filing for details of the assumptions used in the Monte Carlo valuation. The MV for the Restricted Stock Awards granted to all named officers on October 1, 2014 is $15.37. The MV for the September 15, 2014 grant to Mr. Thirot is $17.03 and the grant to Mr. Quigley on November 10, 2014 is $15.63. The MV for the Restricted Stock Awards granted on January 4, 2013 to Mr. Quigley is $15.93 and to all Named Executive Officers on October 1, 2013 is $19.93.
Name | International Assignment Carryover Cost | Car Allowance | Supplemental Pension Contributions | Total All Other Compensation | ||||||||||||
Olivier G. Thirot | 27,614 | 22,685 | 37,787 | 88,086 | ||||||||||||
Name | Representation Allowance | Supplemental Health Care | Supplemental Pension Contributions | Total All Other Compensation | ||||||||||||
Dinette Koolhaas | 20,016 | 6,305 | 23,699 | 50,020 | ||||||||||||
49
| (6) | ||
| Amounts reported for Mr. Thirot and Ms. Koolhaas are converted from Swiss Francs to U.S. Dollars at an exchange rate of 1 CHF = 1.112 USD. This is calculated using the IRS Yearly Average Currency Exchange Rate for Switzerland for 2023 of 0.899 (1 CHF ÷ 0.899 = $1.112). |
(3) The maximum number of shares and award value for Performance Share awards for the 2015-2017 performance period is 200% of target shares granted. The table below shows the maximum number of shares and value based on the values of $16.31 for Performance Share awards based on financial measures, and $16.01 for Performance Share awards based on the relative TSR measure, as explained in the previous footnote.
| Name | Maximum Number of Performance Shares | Maximum Value of Performance Shares | ||
Carl T. Camden | 240,000 | $3,890,400 | ||
George S. Corona | 105,000 | $1,702,050 | ||
Peter W. Quigley | 60,000 | $972,600 | ||
Olivier G. Thirot | 30,000 | $486,300 | ||
Teresa S. Carroll | 60,000 | $972,600 | ||
Patricia A. Little | 75,000 | $1,215,750 |
(4) 2015 Stock Awards granted to Ms. Little include the market values of both restricted shares and performance shares. Ms. Little forfeited these shares upon her termination.
(5) Amounts for Named Executive Officers (other than Mr. Thirot) include premiums paid for life insurance, dividends on unvested restricted shares, company matching contributions to the MRP, and Medicare tax gross-ups on those MRP contributions. (See table below.) No highly compensated employees as outlined by Section 414(q)(1)(B)(i) of the Internal Revenue Code, including the Named Executive Officers, are eligible to participate in the Company’s tax-qualified retirement plan. Company contributions to the MRP include the Company match on participant deferrals as explained in the Retirement Benefits section of this document. The total value of perquisites provided to each Named Executive Officer (other than Mr. Thirot) in 2015 was less than $10,000 and, in accordance with reporting regulations, were not required to be included here.
| Name | Group Term Premiums | Dividends on Restricted Shares | Company Matching | MRP Medicare Gross-ups | Total All Other Compensation | |||||
Carl T. Camden | $1,980 | $41,125 | $92,120 | $4,012 | $139,237 | |||||
George S. Corona | $1,729 | $24,375 | $51,668 | $2,300 | $80,072 | |||||
Peter W. Quigley | $1,140 | $9,625 | $38,826 | $1,706 | $51,297 | |||||
Teresa S. Carroll | $1,140 | $8,625 | $32,607 | $1,427 | $43,799 | |||||
Patricia A. Little | $382 | $3,919 | $24,945 | $1,051 | $30,297 |
(6) The amount reported for Mr. Thirot includes a representation allowance, a supplemental health care allowance, a supplemental contribution to the government-mandated occupational pension benefit program paid through Swiss payroll, dividend equivalents paid to Mr. Thirot during 2015, the incremental cost of his personal use of the Company-owned vacation property in 2015, the cost of his executive physical, and the following costs associated with his international assignment from Switzerland to the U.S.: housing allowance of $25,200, utilities allowance of $2,400, relocation counseling expense of $7,500, tax preparation fee of $500, tax gross-ups of $214,746, and home leave expense for Mr. Thirot and his family of $4,018.
| Name | Represen- tation Allowance | Supplemental Health Care | Supplemental Pension Contributions | Dividend Equivalents on Restricted | Use of Vacation Property | Executive Physical | International Assignment Costs | Total All Other | ||||||||
Olivier G. Thirot | $19,564 | $7,826 | $7,670 | $4,456 | $456 | $1,475 | $254,364 | $295,811 |
(7) Amounts reported for Mr.Thirot are converted from Swiss francs to U.S. dollars at an exchange rate of 1 CHF = 1.0869 USD. This is the rate used by the Company for budgeting purposes in 2015.
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Grants of Plan-Based Awards 20152023(1)
| Name | Grant Date (2) | Approval Date | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(3) | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | All Other (#) | Grant Date Fair ($) | ||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||
Carl T. Camden | STIP | 650,000 | 1,300,000 | 2,600,000 | ||||||||||||||||
| 5/6/2015 | 2/11/2015 | 60,000 | 120,000 | 240,000 | 1,945,200 | |||||||||||||||
| 2/11/2015 | 2/11/2015 | 40,000 | 706,000 | |||||||||||||||||
George S. Corona | STIP | 294,750 | 589,500 | 1,179,000 | ||||||||||||||||
| 5/6/2015 | 2/11/2015 | 26,250 | 52,500 | 105,000 | 851,025 | |||||||||||||||
| 2/11/2015 | 2/11/2015 | 17,500 | 308,875 | |||||||||||||||||
Peter W. Quigley | STIP | 165,929 | 331,859 | 663,718 | ||||||||||||||||
| 5/6/2015 | 2/11/2015 | 15,000 | 30,000 | 60,000 | 486,300 | |||||||||||||||
| 2/11/2015 | 2/11/2015 | 10,000 | 176,500 | |||||||||||||||||
Olivier G. Thirot | STIP | 144,731 | 289,462 | 578,924 | ||||||||||||||||
| 5/6/2015 | 2/11/2015 | 7,500 | 15,000 | 30,000 | 243,150 | |||||||||||||||
| 2/11/2015 | 2/11/2015 | 5,000 | 88,250 | |||||||||||||||||
Teresa S. Carroll | STIP | 96,239 | 331,859 | 663,718 | ||||||||||||||||
| 5/6/2015 | 2/11/2015 | 15,000 | 30,000 | 60,000 | 486,300 | |||||||||||||||
| 2/11/2015 | 2/11/2015 | 10,000 | 176,500 | |||||||||||||||||
Patricia A. Little(7) | STIP | 217,125 | 434,250 | 868,500 | ||||||||||||||||
| 5/6/2015 | 2/11/2015 | 18,750 | 37,500 | 75,000 | 607,875 | |||||||||||||||
| 2/11/2015 | 2/11/2015 | 12,500 | 220,625 | |||||||||||||||||
|
| Grant | Approval | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(3) | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | All Other Stock Awards: Number of Shares of Stock or Units(5) (#) | Grant Date Fair Value of Stock and Option Awards(6) ($) | ||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||
Peter W. Quigley | STIP | 540,000 | 1,080,000 | 2,160,000 | ||||||||||||||||
| 3/21/2023 | 52,636 | 105,272 | 210,544 | 1,598,029 | ||||||||||||||||
| 3/21/2023 | 35,090 | 562,493 | ||||||||||||||||||
Olivier G. Thirot | STIP | 283,560 | 567,120 | 1,134,240 | ||||||||||||||||
| 3/21/2023 | 17,354 | 34,708 | 69,416 | 526,867 | ||||||||||||||||
| 3/21/2023 | 23,138 | 370,902 | ||||||||||||||||||
Daniel H. Malan | STIP | 121,825 | 243,650 | 487,300 | ||||||||||||||||
| 2/14/2023 | 13,943 | 249,998 | ||||||||||||||||||
| 3/21/2023 | 6,218 | 12,436 | 24,872 | 188,778 | ||||||||||||||||
| 3/21/2023 | 8,291 | 132,905 | ||||||||||||||||||
Vanessa P. Williams | STIP | 153,994 | 307,987 | 615,975 | ||||||||||||||||
| 3/21/2023 | 7,748 | 15,496 | 30,992 | 235,229 | ||||||||||||||||
| 3/21/2023 | 10,331 | 165,606 | ||||||||||||||||||
Dinette Koolhaas | STIP | 158,000 | 316,000 | 632,000 | ||||||||||||||||
| 3/21/2023 | 6,769 | 13,538 | 27,076 | 205,507 | ||||||||||||||||
| 3/21/2023 | 9,025 | 144,671 | ||||||||||||||||||
(1) The Company did not grant stock options during the 2015 fiscal year. Accordingly, this column has been eliminated from the table.
| (1) | The Company has not granted stock options since 2004, including 2023. Accordingly, this column has been eliminated from the table. |
(2) Long-Term incentive grants to Named
| (2) | Long-term incentive grants to named executive officers, consisting of Restricted Stock Awards/Units and Performance Shares, were approved by the Committee at its February 14, 2023, meeting for Mr. Malan and its March 21, 2023, meeting for all named officers. |
| (3) | Shown are the Threshold, Target, and Maximum payouts for which each executive was eligible under our STIP with respect to fiscal 2023 performance. Amounts actually earned with respect to these awards are included in the Summary Compensation Table as Non-Equity Incentive Plan compensation. Further detail regarding actual 2023 STIP awards appear in the Compensation Discussion & Analysis. |
| (4) | Performance Shares granted in 2023 are earned based upon achievement of two financial measures. These two measures are equally weighted. Achievement of a threshold level of performance on either measure results in 50% of the target shares for that measure being earned. Achievement of the target level of performance on either measure results in 100% of the target shares for that measure being earned. Achievement of the maximum level performance on either measure results in 200% of the target shares for that measure being earned by the named executive officer. Achievement between these levels for each measure is interpolated on a straight-line basis. |
| (5) | Restricted Stock Awards/Units granted on March 21, 2023 vest ratably on each of the first three anniversaries of the date of grant (33.3% per year). Restricted Stock Awards granted to Mr. Malan on February 14, 2023 will cliff vest on the second anniversary of the date of grant. |
| (6) | The grant date fair values reported for 2023 are determined by multiplying the number of shares granted by the Market Value (“MV”) on the grant date. MV for Restricted Stock is determined by the closing price on the date of grant. MV for Performance Shares is determined by the closing stock price on the date of grant, discounted because these shares are not eligible for dividends. The MV for the Restricted Stock granted to Mr. Malan on February 14, 2023 is $17.93 and to all named officers on March 21, 2023 is $16.03. The MV for Performance Shares granted to all named officers on March 21, 2023 is $15.18. |
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2023 Executive Officers, consisting of Restricted Shares and Performance Shares, were approved by the Committee at its February 11, 2015 meeting. The Performance Share awards were approved by the Committee, subject to shareholder approval of the EIP. Such approval was obtained at the Company’s Annual Meeting on May 6, 2015.
(3) Payout for threshold performance under the STIP is 50% of target opportunity for Messrs. Camden, Corona, Quigley, and Thirot. 2015 STIP payouts for each of these Named Executive Officers were based 100% on corporate measures and goals. Additional business unit measures are included in the 2015 STIP goals for Ms. Carroll, that have payouts for threshold performance equal to 20% of her target opportunity. Therefore, the weighted average payout for all measures at a threshold level of performance is equal to 29% of her target opportunity. For the corporate measures, each additional increment above the threshold earns prorated incentive payments up to the maximum as discussed in the Compensation Discussion and Analysis in the Annual Cash Incentive section. For Ms. Carroll’s business unit measures, there is no prorating between payout levels of the payout schedule. STIP maximum payout for all Named Executive Officers is 200% of target opportunity with an individual maximum payout of no more than $3,000,000 as required under the terms of the amended and restated STIP, effective February 12, 2015.
(4) Performance Shares granted in 2015 are earned based upon achievement of two financial measures and a relative TSR measure. These three measures are equally weighted. Achievement of a threshold level of performance on any measure results in 50% of the target shares being earned. Achievement of the maximum level of performance on any measure results in 200% of the target shares being earned by the Named Executive Officer.
(5) Restricted Stock Awards granted February 11, 2015 vest ratably on each of the first four anniversaries of the date of grant (25% per year).
(6) Grant date fair value is determined by multiplying the number of shares granted by the MV on the grant date. MV is determined by the closing price on the date of grant. The MV for the Restricted Stock awards granted on February 11, 2015 is $17.65. The target Performance Share awards that are based on financial measures were valued using the closing stock price on the date of grant, May 6, 2015, discounted because these shares are not eligible for dividends, resulting in a value of $16.31. The target Performance Share awards that are based on the relative TSR measure were valued at $16.01 using a Monte Carlo valuation method, effective the date of grant, May 6, 2015.
(7) Upon her termination of employment, Ms. Little forfeited all outstanding, unvested equity, including the grants of Restricted Shares and Performance shares made to her in 2015. In addition, no STIP payout was made to her for 2015, also due to her resignation.Tables
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Outstanding Equity Awards at Fiscal Year End 20152023(1)
| Stock Awards | ||||||||||||||||||||
| Name | Grant Year | Number of (#) | Market Value of Shares or Units of Stock That Have Not Vested(4) ($) | Equity Incentive Plan (#) | Equity Incentive Plan Payout Value of Unearned Shares, Units ($) | Grant Year | Stock Awards | |||||||||||||
Carl T . Camden | 2015 | 132,127 | 2,133,851 | 20,000 | 323,000 | |||||||||||||||
Name | Grant Year | Number of (#) | Market Value of ($) | Equity Incentive Plan (#) | Equity Incentive Plan ($) | |||||||||||||||
| 2014 | 60,000 | 969,000 | ||||||||||||||||||
| 2013 | 40,000 | 646,000 | ||||||||||||||||||
| 2012 | 18,750 | 302,813 | ||||||||||||||||||
George S. Corona | 2015 | 57,805 | 933,551 | 8,750 | 141,313 | |||||||||||||||
| 2014 | 37,500 | 605,625 | ||||||||||||||||||
| 2013 | 25,000 | 403,750 | ||||||||||||||||||
| 2012 | 12,500 | 201,875 | ||||||||||||||||||
Peter W. Quigley | ||||||||||||||||||||
Peter W. Quigley | 2023 | 52,635 | 1,137,969 | 70,182 | 1,517,335 | |||||||||||||||
| 2022 | 41,776 | 903,197 | 21,222 | 458,820 | ||||||||||||||||
| 2015 | 33,032 | 533,467 | 5,000 | 80,750 | 2021 | 41,054 | 887,587 | 21,857 | 472,548 | |||||||||||
| 2014 | 11,250 | 181,688 | 2020 | 18,592 | 401,959 | — | — | |||||||||||||
| 2013 | 10,000 | 161,500 | ||||||||||||||||||
| 2012 | 3,750 | 60,563 | ||||||||||||||||||
Olivier G. Thirot | ||||||||||||||||||||
Olivier G. Thirot | 2023 | 28,922 | 625,294 | 23,140 | 500,287 | |||||||||||||||
| 2022 | 19,938 | 431,060 | 10,130 | 219,011 | ||||||||||||||||
| 2015 | 16,516 | 266,733 | 2,500 | 40,375 | 2021 | 24,229 | 523,831 | 17,971 | 388,533 | |||||||||||
| 2014 | 12,750 | 205,913 | 2020 | 9,406 | 203,358 | — | — | |||||||||||||
| 2013 | 650 | 10,498 | ||||||||||||||||||
Daniel H. Malan | ||||||||||||||||||||
Daniel H. Malan | 2023 | 24,306 | 525,496 | 8,292 | 179,273 | |||||||||||||||
| 2022 | 6,804 | 147,102 | 3,458 | 74,762 | ||||||||||||||||
| 2021 | 8,654 | 187,099 | 7,286 | 157,523 | ||||||||||||||||
| 2012 | 800 | 12,920 | 2020 | 13,907 | 300,669 | — | — | |||||||||||||
Teresa S. Carroll | 2015 | 33,032 | 533,467 | 5,000 | 80,750 | |||||||||||||||
Vanessa P. Williams | ||||||||||||||||||||
Vanessa P. Williams | 2023 | 12,913 | 279,179 | 10,332 | 223,378 | |||||||||||||||
| 2022 | 9,359 | 202,342 | 4,754 | 102,781 | ||||||||||||||||
| 2021 | 8,948 | 193,456 | 5,343 | 115,516 | ||||||||||||||||
| 2014 | 11,250 | 181,688 | 2020 | 5,042 | 109,008 | — | — | |||||||||||||
| 2013 | 7,500 | 121,125 | ||||||||||||||||||
Dinette Koolhaas | ||||||||||||||||||||
Dinette Koolhaas | 2023 | 11,281 | 243,895 | 9,026 | 195,142 | |||||||||||||||
| 2022 | 8,500 | 183,770 | 4,318 | 93,355 | ||||||||||||||||
| 2021 | 7,243 | 156,594 | 4,856 | 104,987 | ||||||||||||||||
| 2012 | 5,000 | 80,750 | 2020 | 2,972 | 64,255 | — | — | |||||||||||||
(1) The Company did not grant stock options during the 2015 fiscal year. All previously outstanding granted stock options for the Named
| (1) | The Company did not grant stock options during the 2023 fiscal year. All previously outstanding granted stock options for the named executive officers expired during the 2014 fiscal year. As a result, there are no outstanding options to report and, accordingly, these columns have been eliminated from the table. |
| (2) | All outstanding Restricted Stock Awards/Units granted before 2023 vest ratably over four years. Restricted Stock Awards/Units granted in 2023 and after vest ratably over three years, with the exception of Mr. Malan’s February 14, 2023 award which has a two-year cliff vest. 2021 total includes 50% of the Specialty GP mix portion of the KEEP award. The number of outstanding shares has been determined as of December 31, 2023, the last day of the Company’s fiscal year 2023. |
| (3) | Performance results for the first, second and third year of the 2021-2023 LTI are reflected in these totals, which is detailed above in the “2021-2023 Long-Term Incentive Performance Results” section. Performance results for the first and second year of the 2022-2024 LTI are reflected in these totals, which is detailed above in the “2022-2024 Long-Term Incentive Performance Results” section. Performance results for the first year of the 2023-2025 LTI are reflected in these totals, which is detailed above in the “2023-2025 Long-Term Incentive Performance Results” section. |
| (4) | The market value is determined based on the closing market price of our common shares on the last trading day of the 2023 fiscal year, December 29, 2023 ($21.62). |
| (5) | Performance Shares granted in 2021, 2022 and 2023 are earned based upon achievement of selected financial measures over three one-year periods. If the minimum or threshold performance is not attained, the performance shares will be forfeited. The table includes the 2022 Performance Shares year three and the 2023 Performance Shares years two and three, at target. |
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2023 Executive Officers expired during the 2014 fiscal year. As a result, there are no outstanding options to report and, accordingly, these columns have been eliminated from the table.
(2) All outstanding restricted stock grants vest ratably over 4 years. The number of outstanding shares has been determined as of December 31, 2015.
(3) 2015 total includes performance shares earned based upon the level of achievement for both financial measures for 2015 as explained in the Long-Term Incentives section of this document.
(4) The market value is determined based on the closing market price of our common shares on the last trading day of the 2015 fiscal year, December 31, 2015 ($16.15).
(5) 2015 performance shares that are based upon achievement of the relative TSR measure, whose performance will not be known until early 2018 as explained in the Long-Term Incentives section of this Proxy Statement. Threshold levels are shown here.Compensation Tables
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Option Exercises and Stock Vested 20152023
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||
| Name | Number of (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value on Vesting(1) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | ||||||||
Carl T . Camden | - | - | 73,750 | 1,096,588 | ||||||||||||
George S. Corona | - | - | 46,250 | 687,813 | ||||||||||||
Peter W. Quigley | - | - | 21,250 | 329,725 | ||||||||||||
Peter W. Quigley | — | — | 62,249 | 1,110,746 | ||||||||||||
Olivier G. Thirot | - | - | 5,650 | 82,667 | ||||||||||||
Teresa S. Carroll | - | - | 16,250 | 244,875 | ||||||||||||
Olivier G. Thirot | — | — | 42,447 | 757,156 | ||||||||||||
Daniel H. Malan | ||||||||||||||||
Daniel H. Malan | — | — | 26,199 | 444,538 | ||||||||||||
Vanessa P. Williams | ||||||||||||||||
Vanessa P. Williams | — | — | 14,860 | 268,693 | ||||||||||||
Dinette Koolhaas | ||||||||||||||||
Dinette Koolhaas | — | — | 12,572 | 224,469 | ||||||||||||
(1) Value Realized on Vesting is calculated by multiplying the shares vested times the stock closing price on the day of vesting.
| (1) | Value Realized on Vesting is calculated by multiplying the shares vested times the stock closing price on the day of vesting. |
Nonqualified Deferred Compensation 20152023
| Name | Executive ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate ($) | Aggregate Withdrawals/ Distributions(4) ($) | Aggregate Balance at Last Fiscal Year End(5) ($) | |||||
Carl T. Camden | 184,240 | 92,120 | (63,958) | 0 | 4,129,957 | |||||
George S. Corona | 103,336 | 51,668 | 26,072 | 0 | 1,584,392 | |||||
Peter W. Quigley | 77,653 | 38,826 | (1,823) | 0 | 834,872 | |||||
Teresa S. Carroll | 65,215 | 32,607 | (3,831) | 18,570 | 1,180,579 | |||||
Patricia A. Little | 49,889 | 24,945 | (22,054) | 837,720 | 0 |
(1) Executives may defer a percentage of their base salary (up to 25%) and annual incentive earnings (up to 50%) for retirement. These amounts, as applicable, are reported as a part of the salary or incentive earnings found in the Summary Compensation Table.
(2) Registrant Contributions in Last Fiscal Year above represent Company matching contributions (50% of the first 10% of salary and annual incentive deferrals), and they are also reported as All Other Compensation in the Summary Compensation Table.
(3) Represents actual earnings from the investment of the prior year aggregate balance plus the earnings on current year executive and Company contributions. The aggregate earnings are based on investment options that are also offered to employees who participate in the Company’s tax-qualified 401(k) plan and are not “above market”; therefore, they are not included in the Summary Compensation Table.
(4) Participants may elect to receive distributions after separation from service, the later of a specified age and separation of service or a scheduled in-service distribution. Amounts may be paid as a lump sum, monthly installments for up to 20 years, or a combination of the two as elected by the participant. Ms. Little received a lump sum distribution of her account balance following her separation of employment. Ms. Carroll received a scheduled in-service distribution from her account in 2015.
(5) Amounts reported in this column include the following amounts that have been reported in the Summary Compensation Table for fiscal years 2006-2015: Carl T. Camden ($2,140,867), George S. Corona ($929,481); named in the proxies for fiscal years 2013 - 2015: Peter W. Quigley ($298,280); reported for fiscal year 2015 only: Teresa S. Carroll ($97,822); named in the proxies for fiscal years 2008-2015, beginning with her hire in 2008: Patricia A. Little ($644,042).
| Name | Executive Contributions in Last Fiscal Year(1) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year(3) ($) | Aggregate Withdrawals/ Distributions(4) ($) | Aggregate Balance at Last Fiscal Year End(5) ($) | |||||
Peter W. Quigley | 167,799 | 83,899 | 546,287 | (164,178) | 3,133,956 | |||||
Olivier G. Thirot | — | — | 25,464 | — | 1,020,411 | |||||
Daniel H. Malan | — | — | — | — | — | |||||
Vanessa P. Williams | 47,383 | 23,691 | 43,460 | — | 231,791 | |||||
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| (1) | ||
| Executives may defer a percentage of their base salary (up to 25%) and incentive earnings (up to 50%) for retirement. These amounts, as applicable, are reported as a part of the salary or incentive earnings found in the Summary Compensation Table. |
| (2) | Registrant Contributions in Last Fiscal Year above represent Company matching contributions (50% of the first 10% of salary and annual incentive deferrals), and they are also reported as All Other Compensation in the Summary Compensation Table. |
| (3) | Represents actual earnings (or loss) from the investment of the prior year aggregate balance plus the earnings on current year executive and Company contributions. The aggregate earnings are based on investment options that are also offered to employees who participate in the Company’s tax-qualified 401(k) plan. As these earnings are not “above market” interest payments or preferential earnings, they are not included in the Summary Compensation Table. |
| (4) | Participants may elect to receive distributions after separation from service, the later of a specified age and separation of service or a scheduled in-service distribution. Amounts may be paid as a lump sum, monthly installments for up to 20 years, or a combination of the two as elected by the participant. |
| (5) | Amounts reported in this column include the following amounts that have been reported in the Summary Compensation Table for fiscal years 2013-2023: Peter W. Quigley ($1,085,878); Named in the proxies for fiscal years 2015-2023: Olivier G. Thirot ($791,800); Named in the proxies for fiscal years 2022-2023: Vanessa P. Williams ($44,347). |
Potential Payments Upon Termination 2015or Change in Control 2023
Ms. Little terminatedSummary of Potential Payments
This section describes the potential additional payments and benefits under our compensation and benefit plans and arrangements to which the named executive officers would be entitled upon termination of employment during the year and was notunder certain circumstances. Named executive officers would also be entitled to any additionalvested benefits fromand generally available benefits under our various plans and arrangements, as discussed after the Company.Potential Payments Upon Termination or Change in Control table. The Company does not maintain employment agreements with our named executive officers, other than where it is customary outside of the U.S., as in the case of Mr. Thirot and Ms. Koolhaas. The table following the narrative discussion summarizes the amounts payable upon termination under certain circumstances to our named executive officers, assuming that the executive’s employment terminated on December 31, 2023, the last day of our fiscal year.
Senior Executive Severance Plan
The following two tables includeCompany implemented the eligible Named Executive Officers covered by theSenior Executive Severance Plan Messrs. Camden(“Severance Plan”) for a limited number of executive officers in March 2017. During its March 23, 2021 meeting, the Committee approved expanding the Severance Plan to include
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2023 Executive Compensation Tables
other senior officers. Described below and Corona. The tables reflectillustrated in the table, Potential Payments Upon Termination or Change in Control, are the different elements payable under the Severance Plan and their value if a Named Executive Officer,named executive officer who iswas a party to the Severance Plan would experience a qualifying termination on January 3, 2016, the last day of our fiscal year.termination. All continuation amounts would be paid over the salary continuation period in compliance with Section 409A.409A of the Code. Messrs. Quigley and Malan and Ms. Williams were covered in the Severance Plan for 2023. Mr. Thirot and Ms. CarrollKoolhaas are not participants in the Executive Severance Plan. Severance benefits for Mr. Quigley and Ms. Carroll, if any, would be determined at the discretion of the Compensation Committee based upon the individual facts and circumstances at the time of their separation from the Company. Separation benefits for Mr. Thirot are defined incovered by the terms of his Swisstheir employment agreement.agreements as summarized below.
If one of the eligible Named Executive Officer experiencesnamed executive officers were to have experienced a qualifying termination under the Severance Plan in 2023, the Named Executive Officernamed executive officer would behave been entitled to a payment that isseverance benefits based on the target incentive amount established undertype of qualified termination and whether they were a Tier 1, Tier 2, or Tier 3 participant. Mr. Quigley was the Company’sonly Tier 1 participant in the Severance Plan. Ms. Williams was the only Tier 2 participant in the Severance Plan. Mr. Thirot’s employment agreement provides him with similar Tier 2 severance benefits. Mr. Malan was a Tier 3 participant in the Severance Plan. Ms. Koolhaas’ employment agreement provides her with similar Tier 3 severance benefits. A “qualified termination” is any termination of a participant’s employment: by the Company other than for cause, disability, or death; or for “good reason” by a participant in connection with a change in control.
For a qualified termination that occurs not in connection with a change in control, a Tier 1 participant would receive severance payments in the form of base salary continuation for a period of 24 months, a Tier 2 participant would receive severance payments in the form of base salary continuation for a period of 18 months, and a Tier 3 participant would receive severance payments in the form of base salary continuation for a period of 12 months. In addition, Tier 1, Tier 2, and Tier 3 participants would receive a prorated portion of their annual incentive plancompensation for the fiscal year in which the Named Executive Officer’s termination occurs. This payment wouldoccurred, based on the actual performance results for the year. The pro rata annual incentive payout will be adjusteddetermined based on a pro-rata basis according to the number of calendar days in the fiscal year the eligible Named Executive Officernamed executive officer was actually employed during such plan year. The Named Executive Officer would not be eligibleyear divided by 365. Prorated annual incentive awards are paid at the same time that incentive compensation for the same year is paid to receive a payment under the termsother senior officers of the STIP forCompany, following certification by the year in which his/her termination occurs, or for a recently completedCommittee that applicable performance year if termination occurs before incentive payments are made, since a participant must be employed on the date the STIP award is paid following the completion of the performance period.
The eligible Named Executive Officer would receive salarygoals have been attained. Salary continuation payments in an amount equal to such multiple as may be identified in the Severance Plan times the Named Executive Officer’s base salary. The table below indicates the applicable multiple for each Named Executive Officer. As identified in the table, certain Named Executive Officers would be eligible to receive incentive continuation payments. The combination of salary continuation (and incentive continuation if applicable) amounts would be paid by the Company in installments over the severance period and in accordance with the Company’s standard payroll practice, subject to the requirements of Section 409A. The
For a qualified termination that occurs in connection with a change in control, a Tier 1 participant would receive a single lump sum severance payment equal to two times the sum of the participant’s annual base salary and target annual incentive compensation. A Tier 2 participant would receive a single lump sum severance payment equal to one and one-half times the sum of the participant’s annual base salary and target annual incentive compensation. A Tier 3 participant would receive a single lump sum severance payment equal to one time the sum of the participant’s annual base salary and target annual incentive compensation. In addition, Tier 1, Tier 2, and Tier 3 participants would receive a prorated portion of their annual incentive compensation. If the qualifying termination occurred in the same year as the change in control, a prorated portion of the participant’s annual incentive compensation is paid based on achievement of a target level of performance. If the qualifying termination occurred in the two years following a change in control, a prorated portion of the participant’s annual incentive compensation is paid based on the actual performance results achieved for the year. Any pro rata annual incentive payout will be determined based on the number of days in the fiscal year the eligible named executive officer was actually employed during such plan year divided by 365. Prorated annual incentive awards are paid in a lump sum at the same time that incentive compensation for the same year is paid to the other senior officers of the Company, following certification by the Committee that applicable performance goals have been attained. Participants are subject to a best-net cutback for 280G excise tax calculations with no excise tax gross-ups provided under the Severance Plan.
Subject to the participant’s timely election of continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company would provide comparable medical (including prescription drug), dental, vision, and hospitalization benefits to the eligible Named Executive Officernamed executive officer and his or her eligible dependents for the severance period, provided the Named Executive Officernamed executive officer continues to pay the applicable employee rate for such coverage and the named executive officer remains eligible for COBRA coverage. The severance period for a Tier 1 participant is 24 months, for a Tier 2 participant is 18 months, and for Tier 3 participant is 12 months.
The eligible Named Executive Officernamed executive officer will be entitled to receive reimbursement for professional outplacement services actually incurred during the initial 12-month period following termination, not to exceed $10,000.
The eligible Named Executive Officers,named executive officers, as a condition to receiving payments under the Severance Plan, are required to sign a general release of claims relating to their employment. In addition, they are required to agree not to directly or indirectly, individually or in any capacity or relationship, engage in any business or employment, or aid or endeavor to assist any business or legal entity, that is in direct competition with the business of the Company for the 12 months following termination.
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2023 Executive Compensation Tables
During this period,the 12 months following termination, the eligible Named Executive Officersnamed executive officers must also agree to not induce any employee of the Company to terminate employment with the Company, nor knowingly offer employment to any person who is or who was employed by the Company unless such person has ceased to be employed by the Company for a period of at least six months.
Named Executive Officersexecutive officers covered under the Severance Plan may not disparage, slander, or injure the business reputation or goodwill of the Company.
Named executive officers must maintain as secret and confidential all protected information such as trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including but not limited to customer lists, sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services which may be developed from time to time by the Company and its agents or employees, including the named executive officer.
Noncompliance with any of the above may result in the loss of severance benefits.
As stated previously, other thanTreatment of Long-Term Incentive Awards
Each equity-based award is conditioned upon the Severance Plan, the Company does not provide special protections or benefits upon a change in control or upon a termination following a change in control.
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Executive Severance Plan Elements and Values
| ||||||||||||
| ||||||||||||
|
| Name | Value of Pro-rata Target Incentive with Respect to Year | Value of Salary Continuation(2) ($) | Value of Incentive Continuation(3) ($) | Value of ($) | Allowed ($) | Total Company ($) | ||||||
Carl T. Camden | 1,300,000 | 2,000,000 | 2,600,000 | 23,411 | 10,000 | 5,933,411 | ||||||
George S. Corona | 589,500 | 655,000 | 0 | 11,148 | 10,000 | 1,265,648 |
(1) The Value of Pro-rata Target Incentive with Respect to Year of Termination represents the calculated target incentive for the Named Executive Officers if they had terminated on January 3, 2016. If the termination date is other than the last day of the Company’s fiscal year, incentive earned would equal the target incentive prorated for the number of days worked in the year.
(2) The Value of Salary Continuation is calculated by taking the annual salary times the relevant severance plan multiple according to the Severance Plan.
(3) The Value of Incentive Continuation is calculated by taking the annual target incentive times the relevant severance plan multiple according to the Severance Plan, for the Named Executive Officers to whom this element applies.
(4) The Value of Medical Plan Provided is calculated as the Company-paid portion of the Medical Plan cost, times the number of months eligible according to the Severance Plan. Costs include medical, dental and vision (assumes no change in Health Plan or coverage type) and assumes a 10% health care coverage cost increase in second year (as applicable). Executive continues to make normal employee contributions during the severance period.
(5) Total Company Severance Expense is the sum of the Value of Pro-rata Target Incentive with Respect to Year of Termination, Salary Continuation, Incentive Continuation, Medical Plan Provided, and Allowed Reimbursement of Outplacement Services.
Mr. Thirot’s Severance Benefit
Under the terms of Mr. Thirot’s Swiss employmentthe EIP and the grant agreement, if he is terminated bywhich includes restrictive covenants such as post-employment conditions not to solicit the Company’s employees or customers and not to compete against the Company other than for willful misconduct, he will be provided with either three months’ notice or threetwelve months of salary in lieu of notice, at the Company’s discretion. The table below shows the severance benefit if the Company elects to provide three months of salary in lieu of notice:
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In the event of a U.S. Named Executive Officer’s death while employed, the Named Executive Officer’s beneficiary would receive a group-term life insurance benefit equal to the lesser of two times current base salary or $1.5 million. The amounts shown in the following table would have been payable under the Company-paid group term life plan if the named individuals had died on the last business day of the fiscal year. Mr. Thirot’s beneficiary is eligible to receive death benefits under the Swiss System, similar to other Swiss employees.
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Treatment of Unvested Restricted Stock in the Event of Death or Disability
In the event of a Named Executive Officer’sany termination of employment, dueand indefinite covenants covering non-disparagement and confidentiality terms. Each of our named executive officer’s performance-based equity awards is subject to disability or death, the Named Executive Officer (orCompany’s Clawback Policy. Provisions for the Named Executive Officer’s beneficiary) would receive a pro-rata settlementtreatment of unvested restricted stock outstanding at the time of termination. For each grant of restricted stock, the number of restricted shares settled would equal the total number of restricted shares originally granted times the ratio of days employed since the grant date divided by total number of days in the vesting period less the number of restricted shares already settled on the anniversary dates of the grant. The value of this pro-rata settlement (assuming the December 31, 2015 stock value of $16.15) is shownlong-term incentive awards upon various termination scenarios are outlined in the table below.
| ||||
| (Time Vesting) | Performance Shares (Performance and Time Vesting) | ||
| Immediate Vesting at Target | |||
| Prorated based on actual results (as determined at the end of the cycle), subject to employment for at least one year after the date grant was approved | |||
| Immediate Vesting at Target | |||
| Forfeit | |||
Voluntarily Quit | Forfeit | Forfeit | ||
Retirement | Forfeit | Prorated based on actual results (as determined at the end of the cycle) for “Normal Retirement” defined as age 62 with 5 years of service or as a combination of age plus years of service equal to 70, with a minimum age of 60 | ||
Death or Disability | Prorated | Prorated based on actual results | ||
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2023 Executive Compensation Tables
TreatmentBased on the terms of the severance plans and treatment of LTI Equity-Based Performance Awards in the Event of Death, Disability, Normal Retirement, or Termination Without Cause
In the event of a Named Executive Officer’sawards for each upon termination of employment due to disability, death, normal retirement (defined as age 62 with five years of service), or termination byoutlined above, the Company without Cause, attable below illustrates the endamounts that each named executive officer would receive in each of the potential termination scenarios.
Event and Amounts | Peter W. Quigley ($) | Olivier G. Thirot ($) | Daniel H. Malan ($) | Vanessa P. Williams ($) | ||||||||||||
Involuntary Termination (For Cause) | ||||||||||||||||
No other payments due | ||||||||||||||||
Voluntary Termination | ||||||||||||||||
No other payments due | ||||||||||||||||
Death or Disability | ||||||||||||||||
Performance Shares (Equity-Based)(1) | 1,373,713 | 612,149 | 208,244 | 271,742 | ||||||||||||
Restricted Shares(2) | 763,856 | 473,932 | 487,357 | 185,369 | ||||||||||||
Total | 2,137,569 | 1,086,081 | 695,601 | 457,111 | ||||||||||||
Normal Retirement | ||||||||||||||||
Performance Shares (Equity-Based)(1) | 1,373,713 | 612,149 | — | — | ||||||||||||
Involuntary Termination (Not For Cause) | ||||||||||||||||
Cash Severance(3) | 1,800,000 | 1,000,800 | 557,668 | 712,500 | ||||||||||||
Pro-Rated Annual Incentive(4) | 1,015,200 | 533,093 | 244,000 | 325,000 | ||||||||||||
Performance Shares (Equity-Based)(1) | 994,390 | 487,099 | 163,447 | 215,919 | ||||||||||||
Restricted Shares(2) | — | — | — | — | ||||||||||||
Benefits Continuation(5) | 20,497 | 56,681 | 6,666 | 20,659 | ||||||||||||
Outplacement Services(6) | 10,000 | 10,000 | 10,000 | 10,000 | ||||||||||||
Total | 3,840,088 | 2,087,672 | 981,781 | 1,284,078 | ||||||||||||
Termination in Connection with a Change In Control | ||||||||||||||||
Cash Severance(3) | 3,960,000 | 1,851,480 | 686,650 | 1,175,625 | ||||||||||||
Pro-Rated Annual Incentive(4) | 1,080,000 | 567,120 | 243,650 | 308,750 | ||||||||||||
Performance Shares (Equity-Based)(1) | 3,349,868 | 1,331,446 | 462,279 | 597,901 | ||||||||||||
Restricted Shares(2) | 2,429,548 | 1,559,926 | 1,109,646 | 627,759 | ||||||||||||
Benefits Continuation(5) | 20,497 | 56,681 | 6,666 | 20,659 | ||||||||||||
Outplacement Services(6) | 10,000 | 10,000 | 10,000 | 10,000 | ||||||||||||
Total | 10,849,913 | 5,376,653 | 2,518,891 | 2,740,694 | ||||||||||||
| (1) | In the event of a named executive officer’s termination of employment due to disability, death, normal retirement (defined as age 62 with five years of service or any combination of age + service = 70 with a minimum age of 60), or termination by the Company without Cause, at the end of the performance period and following approval by the Compensation and Talent Management Committee, the named executive officer (or the named executive officer’s beneficiary) would receive a pro rata portion of the equity-based Performance Award that would have otherwise vested if employment had continued until the end of the performance period, based on the portion of the performance period that the officer was employed and based on the performance level achieved. Amounts shown for termination due to death or disability, reflect actual shares earned for the 2021 Year 1, Year 2 and Year 3, 2022 Year 1 and Year 2, and 2023 Year 1 PSU grants. For termination by the Company without Cause, the named executive officer must have been employed for at least one year following the date of each grant in order to be eligible to receive prorated performance shares. Upon a Change in Control, if awards are not assumed, converted, or replaced by the resulting entity, all vesting restrictions on outstanding Performance Awards shall lapse, with any applicable performance goals deemed to be satisfied as if “target” performance had been achieved and all such Awards become fully vested and exercisable, effective as of the date of such Change in Control. The value under the pro rata settlement or Change in Control settlement (assuming the December 29, 2023 stock value of $21.62) is shown in the table. |
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2023 Executive Compensation Committee, the Named Executive Officer (or the Named Executive Officer’s beneficiary) would receive a pro rata portion of the Performance Award that would have otherwise vested if employment had continued until the end of the performance period, based on the portion of the performance period that the officer was employed and based on the performance level achieved. Amounts shown below are prorated for 2015 performance shares based on financial measures that were earned but not yet vested and a target level of performance shares that are based on the relative TSR measure, (assuming the December 31, 2015 stock value of $16.15).Tables
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Treatment of LTI Cash-Based Performance Awards
| (3) | Per the Severance Plan, for involuntary termination by the Company without cause, the value of cash severance includes base salary continuation for Mr. Quigley for 24 months, Ms. Williams for 18 months, and Mr. Malan for 12 months. For payments under Change in Control, with qualifying termination, Mr. Quigley would receive a lump sum payment equal to 2 times the sum of his annual base salary and target annual incentive; Ms. Williams would receive a lump sum payment equal to 1.5 times the sum of base salary and target annual incentive; and Mr. Malan would receive a lumpsum payment equal to one time the sum of base salary and target annual incentive. Per Mr. Thirot’s Swiss employment agreement, for involuntary termination by the Company without cause, the value of cash severance includes base salary continuation for Mr. Thirot for 18 months. For payments under Change in Control, with qualifying termination, Mr. Thirot would receive a lump sum payment equal to 1.5 times the sum of base salary and target annual incentive |
| (4) | In the event of an involuntary termination by the Company without cause and not in connection with a change in control, Messrs. Quigley and Malan, and Ms. Williams were eligible to receive a pro rata portion of their annual Incentive Compensation for such fiscal year, based on the actual performance results for such year. In the event of an involuntary termination by the Company without cause or termination by the named executive officer for good reason, either occurring in connection with a change in control, Messrs. Quigley, Thirot, and Malan and Ms. Williams were eligible to receive a pro rata portion of their annual Incentive Compensation for such fiscal year, paid at the target level. The value of pro rata target incentive with respect to year of termination represents the calculated target incentive for the named executive officers if they had terminated on December 31, 2024. |
| (5) | The value of the health care benefit provided is calculated as the Company-paid portion of the medical plan cost, times the number of months eligible according to the applicable severance plan. Coverage can include medical, dental, and vision (assumes no change in Health Plan or coverage type) and assumes a 10% health care coverage cost increase in second year (as applicable). Named executive officers participating in the Senior Executive Severance Plan continue to pay the employee rate for COBRA coverage during the severance period. For Mr. Thirot, amounts in this column include continuation of pension contributions. |
| (6) | Represents the maximum allowed benefit for reimbursement of outplacement services for participants in the applicable Severance Plan. Mr. Thirot are eligible for outplacement services under the terms of their employment agreements and the amount shown represents the maximum allowed benefit. |
The named executive officers would also be entitled to the vested benefits included in the Event of Death, Disability, or Termination Without Cause
Outstanding Equity Awards at Fiscal Year-End table and the Nonqualified Deferred Compensation table. In addition, the event ofamounts shown in the table above do not include payments and benefits to the extent they are provided on a Named Executive Officer’snon-discriminatory basis to salaried employees generally upon termination of employment due to disability, death, or certain types of termination by the Company without Cause, at the endof employment. These include accrued salary and vacation pay, and life insurance benefits.
As part of the performance period the Named Executive Officer (or the Named Executive Officer’s beneficiary) would receive a pro rata portioncompletion of the Performance Award that would have otherwise vested ifsale of our EMEA staffing operations, Ms. Koolhaas entered into a Termination Agreement, terminating her employment had continued untilcontract with Kelly Services OCG (the “Termination Agreement” filed January 8, 2024) as of March 31, 2024. Under the endterms of the performance period, based onTermination Agreement, Ms. Koolhaas was entitled to a severance benefit equal to 12 months of base compensation, 100% of annual incentive compensation at target and certain other benefits. In addition, in exchange for Ms. Koolhaas’ assistance in supporting the portionpreparation for and completion of the performance period that the officer was employed and based on the performance level achieved. Based on Company performance for the three-year 2013-2015 LTI performance period, a threshold level of performance was not achieved for either measure. Based on the first two fiscal yearssale transaction, she received payment equal to 1% of the three-year 2014-2016 LTI performance period,Purchase Price as defined in the Company believes thereTransaction Agreement.
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CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Act, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our CEO. The pay ratio included in this information is a possibilityreasonable estimate calculated in a manner that a threshold payout couldis intended to be earned.consistent with Item 402(u) of Regulation S-K.
For fiscal 2023, our last completed fiscal year, our methodology and finding details are as follows:
Methodology
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| as of October 31, 2023, our employee population totaled 103,850 and consisted of all active regular and temporary employees; |
| • | about 94% are temporary employees who work anywhere from one week to fifty-two weeks in a calendar year, with approximately 26% located outside of the U.S and Canada; |
for 2023, we did utilize the De Minimis 5% Exemption and excluded the employees from Luxemburg;
| ● | employee compensation outside the U.S. was converted to U.S. dollars using the Company’s 2023 budgeted exchange rates. |
Findings
| ● | The median of the annual total compensation of all employees of our company (other than our CEO), was $12,673; |
| ● | the annualized total compensation of our CEO, was $4,163,424; and |
| ● | based on this information, the ratio of the annual total compensation for our CEO to the median of the annual total compensation of all employees is 329 to 1; |
| ● | our median employee was a temporary employee located in the U.S. and worked approximately twenty-three weeks during 2023. |
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Year (a) | Summary Compensation Table Total to CEO (b) | Compensation Actually Paid CEO (1)(2) (c) | Average Summary Compensation Table Total for Non-CEO NEOs (d) | Average Compensation Actually Paid to Non-CEO NEOs (1)(2) (e) | Value of Initial Fixed $100 Investment Based On: | Net Earnings (Loss) in millions (i) | CSM:: Non-GAAP Adj EFO in millions (4) (j) | ||||||||||||||||||||||||||||||||||||||||||
TSR (Class A) (f) | TSR (Class B) (g) | Peer TSR (3) (h) | |||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | 4,163,424 | $ | 4,313,597 | $ | 1,407,120 | $ | 1,555,635 | $ | 99.65 | $ | 103.53 | $ | 121.22 | $36.4 | $69.1 | |||||||||||||||||||||||||||||||||
| 2022 | $ | 3,535,281 | $ | 2,762,629 | $ | 1,331,744 | $ | 1,150,597 | $ | 76.65 | $ | 81.19 | $ | 113.87 | ($62.5 | ) | $68.3 | ||||||||||||||||||||||||||||||||
| 2021 | $ | 3,938,608 | $ | 2,864,364 | $ | 1,640,264 | $ | 1,362,908 | $ | 74.94 | $ | 78.78 | $ | 152.43 | $156.1 | $52.6 | |||||||||||||||||||||||||||||||||
| 2020 | $ | 1,550,693 | $ | 1,334,735 | $ | 786,788 | $ | 827,855 | $ | 91.45 | $ | 94.29 | $ | 100.85 | ($72.0 | ) | $44.3 | ||||||||||||||||||||||||||||||||
| (1) | SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine compensation actually paid as reported in the Pay versus Performance Table. Compensation actually paid, generally, is calculated as Summary Compensation Table total compensation adjusted to include the fair market value of equity awards as of the end of the fiscal year for the applicable year or, if earlier, the vesting date (rather than the grant date). We do not offer pension plan benefits therefore, there was not a change in pension value for any of the years reflective in this table. To calculate CAP, the following amounts were deducted from and added to SCT total compensation: |
2023 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||
CEO | Non-CEO NEOs | CEO | Non-CEO NEOs | CEO | Non-CEO NEOs | CEO | Non-CEO NEOs | |||||||||||||||||||||||||
| Summary Compensation Table Total | $4,163,424 | $1,407,120 | $3,535,281 | $1,331,744 | $3,938,608 | $1,640,264 | $1,550,693 | $786,788 | ||||||||||||||||||||||||
| Summary Compensation Table Stock Awards | ($2,160,522 | ) | ($555,116 | ) | ($1,811,085 | ) | ($524,293 | ) | ($2,734,149 | ) | ($974,762 | ) | ($839,987 | ) | ($326,162 | ) | ||||||||||||||||
| FYE value of unvested awards granted during current year | $2,236,679 | $617,264 | $1,052,644 | $334,843 | $2,045,752 | $789,365 | $764,875 | $405,599 | ||||||||||||||||||||||||
| Change in value of unvested awards from prior years | $793,531 | $239,143 | $68,855 | $24,517 | ($167,781 | ) | ($41,322 | ) | ($68,333 | ) | ($20,316 | ) | ||||||||||||||||||||
| Change in value of awards vesting during current year from the prior years | $66,830 | $20,763 | $98,065 | $22,069 | $7,513 | $2,122 | ($73,595 | ) | ($18,452 | ) | ||||||||||||||||||||||
| Prior FYE value for awards not meeting performance requirements | ($812,048 | ) | ($183,487 | ) | ($191,086 | ) | ($41,686 | ) | ($227,577 | ) | ($53,637 | ) | — | — | ||||||||||||||||||
| Dividends accrued on unvested stock awards | $25,703 | $9,948 | $9,957 | $3,404 | $1,998 | $877 | $1,082 | $399 | ||||||||||||||||||||||||
| Compensation Actually Paid | $4,313,597 | $1,555,635 | $2,762,629 | $1,150,597 | $2,864,364 | $1,362,908 | $1,334,735 | $827,855 | ||||||||||||||||||||||||
| (2) | Compensation for the non-principal executive officer (“CEO”) and average compensation fornon-CEO named executive officers (“NEOs”) reflected in columns (c) and (e) represent the following individuals for the years shown: 2023 – Peter W. Quigley, Olivier G. Thirot, Daniel H. Malan, Vanessa P. Williams and Dinette Koolhaas, 2022 – Peter W. Quigley, Olivier G. Thirot, Dinette Koolhaas, Vanessa P. Williams, and Darren L. Simons, 2021 – Peter W. Quigley, Olivier G. Thirot, Dinette Koolhaas, Tammy L. Browning, and Timothy L. Dupree, 2020 – Peter W. Quigley, Olivier G. Thirot, Dinette Koolhaas, Tammy L. Browning, and Daniel H. Malan. |
| (3) | As permitted by SEC rules, the peer group referenced for purpose of the TSR comparison is the group of companies included in the S&P 1500 Human Resources and Employment Services Index, which is the industry peer group used for purposes of item 201(e) of Regulation S-K as well as used in the Company’s Annual Report on Form10-K for the year ended December 31, 2023. TSR is cumulative (assuming $100 was invested on December 31, 2019) for the measurement period ending December 31, 2019 and ending on December 31 of 2023, 2022, 2021, 2020, respectively. |
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| (4) | The following amounts are the reconciliation of the CSM, EFO (in millions): |
2023 | 2022 | 2021 | 2020 | |||||||||||||
| As Reported | $24.3 | $14.8 | $48.6 | ($93.6 | ) | |||||||||||
| Gain on sale of assets | (6.2 | ) (4) | (32.1 | ) (8) | ||||||||||||
| Loss on disposal | 18.7 | (5) | ||||||||||||||
| Goodwill impairment charge | 41.0 | (6) | 147.7 | (9) | ||||||||||||
| Asset impairment charge | 2.4 | (1) | ||||||||||||||
| Restructuring charge | 35.5 | (2) | 4.0 | (7) | 12.8 | (10) | ||||||||||
| Transaction costs | 6.9 | (3) | ||||||||||||||
| Customer dispute | 9.5 | (11) | ||||||||||||||
| Adjusted | $69.1 | $68.3 | $52.6 | $44.3 | ||||||||||||
| (1) | Asset impairment charge in 2023 represents the impairment of right-of-use |
| (2) | Restructuring charges in 2023 represents costs related to a comprehensive transformation initiative that includes actions that will further streamline the Company’s operating model to enhance organizational efficiency and effectiveness |
| (3) | Transaction costs, which includes employee termination costs, incurred in the fourth quarter of 2023 directly related to the sale of the EMEA staffing operations in the first quarter of 2024 |
| (4) | Gain on sale of assets in 2022 is related to the sale of real property in the fourth quarter, under-utilized real property in the second quarter, and other real property sold in the first quarter of 2022 |
| (5) | Loss on disposal in 2022 represents the write-off of the net assets of our Russian operations that were sold in the third quarter of 2022 |
| (6) | Goodwill impairment charge in 2022 is the result of interim impairment tests the Company performed related to RocketPower due to triggering events caused by changes in market conditions |
| (7) | Restructuring charges in 2021 represents severance costs as part of cost management actions designed to increase operational efficiencies with enterprise functions that provide centralize support to operating units |
| (8) | Gain on sale of assets primarily represents the excess of proceeds over the cost of the headquarters properties sold during the first quarter of 2020 |
| (9) | The goodwill impairment charge is a result of an interim impairment test the Company performed during the first quarter of 2020, due to a triggering event caused by a decline in the Company’s common stock price |
| (10) | Restructuring charges in 2020 represents severance and lease terminations in preparation for a new operating model adopted in the third quarter of 2020 |
| (11) | Customer dispute in 2020 represents a non-cash charge in Mexico to increase the reserve against a long-term receivable from a former customer based on an updated probability of loss assessment |
Most Important Performance Measures | ||
| Adjusted EFO | ||
| Gross Profit | ||
| EBITDA Margin | ||
| Revenue Growth | ||
| Stock Price |
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Proposal 3 – Vote for the Amendment of the Company’s Restated Certificate of Incorporation to reflect updated Delaware law provisions permitting officer exculpation.
As a general matter, the Board believes that our Restated Certificate of Incorporation should contain provisions consistent with the Delaware General Corporation Law ( the “DGCL”), as amended from time to time, and that amending our Restated Certificate to add the authorized liability protection for certain officers, which is consistent with the protection currently afforded our directors under the DGCL, is desirable in order to continue to attract and retain experienced and qualified officers.
The new provision of the DGCL, and if this proposal is approved, our Restated Certificate, would only eliminate or limit an officer’s liability in connection with those direct claims, including class actions, brought by stockholders for breach of an officer’s fiduciary duty of care. However, as is currently the case with directors under our Restated Certificate, the proposed amendment would not eliminate or limit liability of officers for breaches of their fiduciary duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Further, the proposed amendment would not eliminate or limit officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by stockholders in the name of the Company.
The rationale for limiting the scope of liability is to strike a balance between the interests of stockholders in accountability and their interests in the Company being able to attract and retain experienced and qualified officers. The Board believes it is important to provide protection from certain liabilities and expenses that may dissuade prospective or current officers from serving the Company due to the exposure to personal liability and risk of expenses they may incur without such protections.
The Board has considered the effects of the amendment to the Restated Certificate, if approved, including the narrow scope of the type and class of claims that officers of the Company would be exculpated from, the limited number of officers of the Company that would be subject to the amendment, and the benefits the Company would gain, and have determined that it is in the best interest of the Company and its stockholders to amend the Restated Certificate accordingly.
Text of Proposed Amendment
The Board requests stockholders of the Company approve the following resolution:
“RESOLVED, that the Company’s stockholders approve an amendment to the Company’s Restated Certificate of Incorporation to revise Article NINTH as follows:
NINTH: No director or officer of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty by such persondirector as a director or officer; provided, however, that this Article NINTH shall not eliminate or limit liability (i) for any breach of the director’s or officer’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) of a director under section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director or officer derived an improper personal benefit, (v) of an officer in any action by or in the right of the Corporation or (vi) of a director or officer to the extent that such elimination of liability is prohibited under the Delaware General Corporation Law. No amendment or repeal of this Article NINTH shall apply to or have any effect on the liability or alleged liability of any director or officer of the corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. All references in this paragraph to an “officer” shall mean only a person who, at the time of an act or omission as to which liability is asserted, falls within the meaning of the term “officer” as defined in Section 102-(b)(7) of the Delaware General Corporation Law.”
Effectiveness of the Amendment
Upon the approval of this proposal by our stockholders, the Company will file with the Delaware Secretary of State an Amended and Restated Certificate of Incorporation reflecting the changes contemplated by the proposed amendment. Such filing is expected to occur as soon as reasonably practicable following the Annual Meeting. If this proposal is not approved by our stockholders, the Company’s Restated Certificate will not be further amended, and no exculpation will be provided for our officers.
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Proposal 3 – Vote for the Amendment of the Company’s Restated Certificate of Incorporation to reflect updated Delaware law provisions permitting officer exculpation.
PROPOSAL 3 - RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERSRequired Vote and Board Recommendation
The affirmative vote of the holders of a majority of the outstanding shares of our Class B Common Stock entitled to vote on this proposal is required to approve this proposal. If you hold your shares in your own name and abstain from voting on this matter, your abstention will have the effect of a vote against this proposal. If you hold your shares through a bank, broker or other holder of record and you do not instruct them on how to vote on this proposal, they will not have the authority to vote your shares. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will have the same effect as a vote against this proposal.
The Board believes that the proposed amendment to our Restated Certificate is in the best interests of the Company and its stockholders for the reasons stated above.
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Proposal 4 – Ratification of the Appointment of PricewaterhouseCoopers LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2016 FISCAL YEARas the Company’s Independent Registered Public Accounting Firm for the 2024 Fiscal Year
At its February 17, 2016 meeting,On an annual basis, the Audit Committee approvedapproves and appoints the appointment ofindependent registered public accounting firm. During its February 13, 2024, meeting, PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firmwas appointed to audit the consolidated financial statements of the Company for the year ending January 1, 2017. The Board of Directors seeks ratification of the appointment.December 29, 2024. This firm has served as the Company’s independent registered public accounting firm for many yearssince 1960 and is considered to be well qualified. As in prior years,The reappointment process for the independent registered public accounting firm includes an annual assessment that takes into consideration, but is not limited to, a review of the following:
1. Quality of services and sufficiency of resources provided by the auditor |
● Knowledge and skills to meet the Company’s audit requirements ● Partner rotation (every 5 years) ● Appropriate audit engagement partner ● Engagement letter compliance ● Industry experience ● Results of consultations ● Audit cost (fee negotiations included) ● Long tenure and familiarity with the Company’s accounting policies |
2. Communication and interaction during the engagements |
● Professional and open dialog ● Accessibility ● Current accounting developments conversations |
3. Independence, objectivity, and professional skepticism |
● Assessment of audit evidence ● Internal Audit reliance |
The Board of Directors seeks ratification of the appointment of PwC. The representatives of thatthe firm are expected to be present at the Annual Meeting and will have the opportunitybe available to respond to all appropriate questions.
DutiesAudit and Non-Audit Fees
ManagementThe Audit Committee is responsible for the preparation of the Company’s financial statements in accordance with generally accepted accounting principles and for the report on the effectiveness of the Company’s internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for auditing those financial statements and expressing an opinion as to their conformity with generally accepted accounting principles and for attesting to the operating effectiveness of the Company’s internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”).
Service Fees Paid to PricewaterhouseCoopers LLP, the Company’s Independent Registered Public Accounting Firm
2015 ($) | 2014 ($) | |||||||
Audit Fees | 3,190,568 | 3,203,526 | ||||||
Audit Related Fees | 57,431 | — | ||||||
Tax Fees | 298,000 | — | ||||||
All Other Fees | 1,800 | 1,800 | ||||||
Total | 3,547,799 | 3,205,326 | ||||||
Audit Fees: Services rendered during the years ended January 3, 2016 and December 28, 2014 were for the audits and quarterly reviews of our consolidated financial statements, statutory audits, attestation of controls, issuance of consents, and assistance with review of documents filed with the SEC.
Audit Related Fees:For 2015, $57,431 represented services related to technical assistance with new accounting standards and services associated with international regulatory reporting.
Tax Fees:For 2015, $298,000 represented services related to tax and transfer pricing consulting.
All Other Fees: For 2015 and 2014, $1,800 (each year) represented services related to accounting research tools.
The Audit Committee has adopted a policy requiring pre-approval of all audit and non-audit servicescompensation (including negotiations) of the independent registered public accounting firm and requires pre-approval of all audit and non-audit services prior to their engagement by the Company. In conjunction with the pre-approval, the Audit Committee considers whether non-audit services are consistent with the rules and regulations of the SEC on auditor independence. The authority of the Audit Committee is detailed in its charter, which is posted on the Company’s website atkellyservices.com.kellyservices.com.
The table below displays the fees incurred from the audit and non-audit services provided by PwC.
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Audit Fees | 4,103,600 | 4,594,500 | ||||||
Audit Related Fees | 5,000 | 7,100 | ||||||
Tax Fees | 381,000 | 111,600 | ||||||
All Other Fees | 17,200 | 17,200 | ||||||
Total | 4,506,800 | 4,730,400 | ||||||
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Proposal 4 – Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the 2024 Fiscal Year
58Audit Fees: Audits and quarterly reviews of our consolidated financial statements, statutory audits, issuance of consent and assistance with review of documents filed with the SEC.
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Tax Fees: Tax and transfer pricing consulting.
All Other Fees: Accounting research tools and human resources research.
Report of the Audit Committee
In connection withManagement is responsible for the preparation, presentation, and integrity of Kelly’s financial statements, for its accounting and financial reporting principles, and for the fiscal year ended January 3, 2016,establishment and effectiveness of internal controls and procedures designed to ensure compliance with generally accepted accounting principles and applicable laws and regulations. The independent registered public accounting firm is responsible for performing an independent audit of Kelly’s financial statements and of its internal control over financial reporting in accordance with the Auditstandards of the Public Company Accounting Oversight Board (the “PCAOB”) and expressing an opinion as to the conformity of Kelly’s financial statements with generally accepted accounting principles and the effectiveness of its internal control over financial reporting. The independent registered public accounting firm has free access to the Committee has:to discuss any matters it deems appropriate.
(1) reviewedIn performing its oversight role, the Committee considered and discussed the audited financial statements of Kelly for the fiscal year ended December 31, 2023, with management;
(2)each of management and PwC, the independent registered public accounting firm. The Committee also discussed with PwC the matters required to be discussed by applicable requirements of the statement on PCAOB AU Section 380 Communication With Audit Committees; and
(3) hasPCAOB. The Committee received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerningauditors’ independence and has discussed with PwC its independence.
Based upon these reviewson the reports and discussions described in this Report, the Audit Committee recommended to the Board at its February 17, 2016 meeting that the Company’s audited financial statements of Kelly for 2023 be included in the 2023 Annual Report on Form 10-K for the year ended January 3, 2016 filed with the SEC. The Board approved this inclusion.10-K.
THE AUDIT COMMITTEE
LESLIELESLIE A. MURPHY, CHAIRMURPHY, CHAIR
ROBERTGERALD S. CUBBINADOLPH
TERRENCE B. LARKINROBERT S. CUBBIN
CONRAD L. MALLETT, JR.
DONALD R. PARFET
59
AMALA DUGGIRALA
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Questions and Answers About the Proxy Statement and the Annual Meeting
| Q) | WHERE ARE WE HOLDING THE ANNUAL MEETING? |
| A) | The 2024 Annual Meeting of Shareholders will be held virtually. To access the live audio webcast of the meeting, shareholders of record will need to visit kellyservices.com for instructions and use their 16-digit Control Number provided in the Notice to log in to this website. If your shares are held beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding share “in street name”), you will receive instructions from the holder of record that you must follow for your shares to be voted. Beneficial holders will need to obtain a “legal proxy” from their broker, bank, or other holder of record that holds your shares if they want to vote during the virtual meeting. Beneficial holders will need to send our transfer agent, Computershare, the legal proxy before the meeting and they will then issue via email, an authorized control number. |
| Q) | WHO IS MAKING THE SOLICITATION IN THIS PROXY STATEMENT? |
| A) | This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Kelly Services, Inc. for use at the Annual Meeting of Shareholders of the Company to be held virtually on May 9, 2024, for the purposes set forth in the Notice of Annual Meeting of Shareholders. The approximate date on which this Proxy Statement and enclosed form of proxy are first being sent to Class B shareholders of the Company is April 15, 2024. |
| Q) | WHO WILL BEAR THE COST OF THE PROXY SOLICITATION? |
| A) | The cost of soliciting proxies will be borne by the Company. The solicitation of proxies will be made primarily by mail. The Company may also make arrangements with brokerage houses, custodians, banks, nominees, and fiduciaries to forward solicitation material to beneficial owners of Class B stock held of record by them and to obtain authorization to execute proxies. The Company may reimburse such institutional holders for reasonable expenses incurred by them in connection therewith. |
A copy of the Company’s Annual Report and Annual Report on Form 10-K as of December 31, 2023, the close of the Company’s latest fiscal year, has been mailed or otherwise made available to each shareholder of record. The expense of preparing, printing, assembling, and mailing the accompanying form of proxy and the material used in the solicitation of proxies will be paid by the Company. In addition, the Company may reimburse brokers or nominees for their expenses in transmitting proxies and proxy material to principals. |
| Q) | WHO IS ENTITLED TO VOTE? |
| A) | Only shareholders of record of our Class B Common Stock, par value $1.00 per share, at the close of business on March 21, 2024, the record date for the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting. Class B Common Stock is the only class of the Company’s securities with voting rights. |
At the close of business on March 21, 2024, the number of issued and outstanding voting securities (exclusive of treasury shares) was 3,321,601 shares of the Class B Common Stock. Class B shareholders on the record date will be entitled to one vote for each share held of record. |
| Q) | HOW DO I VOTE? |
| A) | We encourage Class B shareholders to return their proxies promptly via the enclosed form of proxy in the enclosed postage prepaid envelope or vote via the Internet, QR code scan, or telephone. |
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Questions and Answers About the Proxy Statement and the Annual Meeting
| Q) | HOW IS MY VOTE COUNTED? |
| A) | If a proxy in the accompanying form is properly executed, returned to the Company and not revoked, the shares represented by the proxy will be voted in accordance with the instructions set forth thereon. If no instructions are given with respect to the matters to be acted upon, the shares represented by the proxy will be voted in accordance with the recommendation of the Company’s Board of Directors on each of the proposals set forth in the accompanying Notice of Annual Meeting of Shareholders and on any other matters that properly come before the Annual Meeting in such manner as may be determined by the individuals named as proxies. |
| Q) | CAN I REVOKE MY PROXY AFTER I HAVE SUBMITTED IT? |
| A) | If the enclosed form of proxy is executed and returned by the shareholder, it may nevertheless be revoked by the person giving it by written notice of revocation to the Corporate Secretary of the Company or by submitting a later dated proxy, provided such notice or later dated proxy is received by 11:59 p.m., Central Time, on May 8, 2024. You will also be able to vote your shares online by attending the Annual Meeting by webcast. |
| Q) | WHAT CONSTITUTES A QUORUM? |
| A) | Pursuant to the Company’s Bylaws, the holders of 60% of the issued and outstanding shares of Class B Common Stock who are entitled to vote at a shareholders’ meeting, in person or represented by proxy, will constitute a quorum. Shares that are present and entitled to vote on any of the proposals to be considered at the Annual Meeting will be considered to be present at the Annual Meeting for purposes of establishing the presence or absence of a quorum for the transaction of business. |
| Q) | WHAT IS A BROKER NON-VOTE? |
| A) | A “broker non-vote” occurs if a broker or other nominee indicates on the enclosed proxy that it does not have discretionary authority as to certain shares to vote on a particular proposal, but otherwise has authority to vote at the Annual Meeting. Abstentions and shares subject to broker non-votes will be considered as present for purposes of determining the presence or absence of a quorum at the Annual Meeting. |
| Q) | HOW IS IT DETERMINED IF A MATTER HAS BEEN APPROVED? |
| A) | Under our Bylaws, directors are elected by plurality vote and the nominees who receive the greatest number of votes at the Annual Meeting will be elected. Withheld votes and broker non-votes will not be taken into account for purposes of determining the outcome of the election of directors. |
The affirmative vote of a majority of the Class B shares present in person or by proxy at the Annual Meeting and entitled to vote on such proposal will be required to approve Proposal 2, and Proposal 4. Abstentions will have the effect of negative votes with respect to these proposals. Broker non-votes will not be taken into account for purposes of these proposals. |
The affirmative vote of the holders of a majority of the outstanding shares of our Class B Common Stock entitled to vote on Proposal 3 is required to approve the Proposal. Abstentions and broker non-votes will have the same effect as a vote against Proposal 3. |
| Q) | WHAT HAPPENS IF ADDITIONAL MATTERS (OTHER THAN THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT) ARE PRESENTED AT THE ANNUAL MEETING? |
| A) | If any other matters do properly come before the Annual Meeting, all proxies signed and returned by holders of the Class B Common Stock, if not limited to the contrary, will be voted thereon in accordance with the best judgment of the persons voting the proxies. |
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Questions and Answers About the Proxy Statement and the Annual Meeting
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HOW CAN I COMMUNICATE WITH THE BOARD? | ||||||||||
| A) | Shareholders may communicate with the Board in writing, addressed to the Board of Directors and mailed to the Corporate Secretary, Kelly Services, Inc., 999 West Big Beaver Road, Troy, Michigan 48084-4716. All written shareholder communications will be summarized and reported to the Board at its regularly scheduled meetings. |
| Q) | WHAT IS THE DEADLINE TO SUBMIT SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE COMPANY’S 2025 ANNUAL MEETING OF SHAREHOLDERS? |
| A) | If a Class B shareholder intends to present a proposal for inclusion in the proxy materials to be distributed by us in connection with the Company’s 2025 Annual Meeting of Shareholders in reliance on Rule 14a-8 under the Exchange Act, the proposal must be submitted in writing and received by the Corporate Secretary no later than December 16, 2024. The proposal must also meet the other requirements of the rules of the SEC relating to shareholder proposals. |
Our Bylaws contain an advance notice of shareholder business and nominations requirement, which generally prescribes the procedures that a shareholder of the Company must follow if the shareholder intends at an Annual Meeting of Shareholders to nominate a person for the election to the Board or to propose other business to be considered by shareholders. These procedures include, among other things, that the shareholder give timely notice to the Corporate Secretary of the nomination or other proposed business, that the notice contains specified information, and that the shareholder complies with certain other requirements. If a shareholder’s nomination or proposal is not in compliance with the procedures set forth in our Bylaws, the Company may disregard such nomination or proposal. |
Generally, in the case of an Annual Meeting of Shareholders, a shareholder’s notice must be delivered in writing to the Corporate Secretary, at the Company’s principal executive office, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the date of the proceeding year’s Annual Meeting of Shareholders. To be timely for the 2025 Annual Meeting of Shareholders, the notice must be received by the Corporate Secretary no earlier than January 9, 2025, and no later than February 7, 2025. In addition, shareholders seeking to include director nominations in the Company’s Proxy Statement for its 2025 Annual Meeting of Shareholders are required to provide notice to the Company pursuant to SEC Rule 14a-11 regarding proxy access no earlier than November 16, 2024 and no later than December 16, 2024, and to satisfy other conditions of such rule. Shareholders intending to utilize SEC Rule 14a-11 regarding universal proxies must provide notice to the Company postmarked no later than March 10, 2025. |
In each case, proposals made under Rule 14a-8 and nominations for director nominees and/or an item of business to be introduced at an Annual Meeting of Shareholders must be submitted in writing and received by the Corporate Secretary, Kelly Services, Inc., 999 West Big Beaver Road, Troy, Michigan 48084-4716. |
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q PLEASE FOLD ALONG THE PERFORATION,01—T.B. Larkin 04—G.S. Corona 07—I.F. Johnson 02—P.W. Quigley 05—R.S. Cubbin 08—L.A. Murphy 03—G.S. Adolph 06—A. Duggirala 09—D.R. Parfet For Withhold For Withhold For Withhold 1 U P X 3. Amendment of the Company’s Restated Certificate of Incorporation to Reflect Updated Delaware law provisions permitting officer exculpation. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 03YIID + + Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals A 2, 3 and 4. 2. Non-binding advisory vote on executive compensation. 1. Election of Directors: For Against Abstain Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. B Authorized Signatures — This section must be completed for your vote to be counted.—Date and Sign Below IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
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| 2. | Non-binding advisory vote on executive compensation. | ¨ | ¨ | ¨ | 3. | Ratification of PricewaterhouseCoopers LLP as independent accountants for the 2016 fiscal year. | ¨ | ¨ | ¨ | |||||||||
| 4. | Transacting any other business as may properly come before the meeting or any postponement or adjournments thereof. | |||||||||||||||||
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NOTE: Pleasesignasnameappearshereon.Jointownersshould eachsign.When signingasattorney,executor,administrator,trustee orguardian,pleasegivefulltitleassuch.
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029LFA
Important notice regarding the Internet availabilityAnnual Meeting Proxy Card 4. Ratification of proxy materialsPricewaterhouseCoopers LLP as independent accountants for the 2024 fiscal year. 5. Transacting any other business as may properly come before the Meeting or any postponement or adjustments thereof. 1234 5678 9012 345 MMMMMMMMM MMMMMMMMMMMMMMM 6 1 0 3 8 3 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND C 1234567890 J N T C123456789 MMMMMMMMMMMM M MMMMMMM 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext If no electronic voting, delete QR code and control 000001 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 ENDORSEMENT_LINE SACKPACK You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/kelyb or scan the QR code — login details are located in the shaded bar below. Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/kelyb Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Your vote matters – here’s how to vote!
Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/kelyb Notice of Annual Meeting of Stockholders.
TheShareholders Proxy Statement and the 2015 Annual Report to stockholders are available at:
www.edocumentview.com/kelyb
q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
Proxy — Kelly Services, Inc.
999 West Big Beaver Road
Solicited by Board of Directors for Annual Meeting of Stockholders -— May 11, 2016
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
9, 2024 The undersigned hereby names, constitutes and appoints George S. CoronaVanessa P. Williams as proxy and Peter W. Quigley, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-factattorney-in-fact and hereby authorizes themher to represent and vote, as provided on the other side, all the shares of Kelly Services, Inc. Class B Common Stock which the undersigned is entitled to vote, and, in theirher discretion, to vote upon such other business as may properly come before the Annual Meeting of StockholdersShareholders of the Company to be held May 11, 20169, 2024 or at any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” ALL THE PROPOSALS.
(ContinuedNOMINEES LISTED, AND “FOR” PROPOSALS 2, 3 AND 4. (Continued to be marked, dated and signed, on the other side.)
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Proxy—Kelly Services, Inc. q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
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Transacting any other business as may properly come before the meeting or any postponement or adjournments thereof. | |||||||||||||||||
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NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
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print new address below. Comments — Please print your comments below. C Non-Voting Items + + IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - A—C ON BOTH SIDES OF THIS CARD.
029LEA
CARD Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.
Shareholders. The Proxy Statement and the 2015 Annual Report to stockholders arematerial is available at:
www.envisionreports.com/kelyb
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
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Proxy — Kelly Services, Inc.
999 West Big Beaver Road
The 2024 Annual Meeting of Stockholders - May 11, 2016
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned hereby names, constitutes and appoints George S. Corona and Peter W. Quigley, and each of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the sharesShareholders of Kelly Services, Inc. Class B Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of the Company towill be held on Thursday, May 11, 2016 or9, 2024 at any adjournment or postponement thereof, with all powers which12:00 p.m. EDT, virtually via the undersigned would possess if presentinternet at www.meetnow.global/MTZZK6S To access the Meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE PROPOSALS.
(Continued to be marked, dated and signed,virtual meeting, you must have the information that is printed in the shaded bar located on the other side.)reverse side of this form.
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