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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒⌧ Filed by a Party other than the Registrant ◻
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| Preliminary Proxy Statement |
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| Definitive Proxy Statement |
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| Definitive Additional Materials |
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| Soliciting Material Pursuant to § 240.14a-12 |
RE/MAX HOLDINGS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Dear Fellow Stockholder:
RE/MAX Holdings, Inc. is holding its 2021 annual meeting of stockholders at noon mountain time on Wednesday, May 26, 2021. The meeting will be held as a virtual meeting, which stockholders can attend by visiting www.virtualshareholdermeeting.com/RMAX2021. This will be the fifth year that our annual meeting of stockholders is virtual. We have found that the virtual format makes it easier for stockholders to attend the meeting, improves communication, and reduces costs both for the Company and for stockholders who attend the meeting. We plan to give stockholders the opportunity to ask questions about the items of business for the meeting and our business generally.
5075 S. Syracuse St.
Denver, CO 80237
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 24, 2018
April 12, 2018
Dear Stockholder,
We cordially inviteencourage stockholders to vote their shares by proxy in advance of the annual meeting.
The attached notice of the 2021 annual meeting of stockholders and proxy statement provide important information about the meeting and will serve as your guide to the business to be conducted at the meeting. Your vote is very important to us. We urge you to attend our 2018 Annual Meeting of Stockholders,read the accompanying materials regarding the matters to be heldvoted on Thursday, May 24, 2018, at 8:00 am (Mountain Time) at 5075 S. Syracuse St., Denver, Colorado 80237.
We are holding the meeting forand to submit your voting instructions by proxy.
The Board of Directors recommends that you vote “FOR” each of the following purposes, which are described in more detaildirector nominees named in the proxy statement:
1. to elect three directors to our Board of Directors;statement and
2. to ratify “FOR” the appointmentratification of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018. firm.
We
You may also transact any other business as may properly come before the Annual Meeting or before any adjournment or postponement thereof. Only stockholders of record as of the close of business on March 23, 2018, will be entitled to attend or vote at the Annual Meeting.
The rules of the Securities and Exchange Commission allow us to furnish oursubmit your proxy materialseither over the internet. As a result, we are sending a Notice of Internet Availability of Proxy Materials to our stockholders, which contains instructions on how to access our proxy materials ontelephone or the internet as well as instructions on how stockholdersor you may obtain a paper copy of our proxy materials. To make it easy to vote internet and telephone voting are available. The instructions for voting are onthrough the Notice of Internet Availability of Proxy Materials or,online portal during the meeting. In addition, if you received a paper copy of the proxy materials, onyou can vote by marking, signing, dating, and returning the proxy card.card sent to you in the envelope accompanying the proxy materials.
If
Thank you holdfor your shares through a bank, broker, or other holdercontinued support.
Sincerely,
David Liniger
Chairman and RE/MAX Co-Founder
April 15, 2021
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| NOTICE OF 2021
ANNUAL MEETING
OF STOCKHOLDERS |
Meeting Information | | Items of Business | Our Board’s
Recommendation | More information |
| WHEN
Wednesday, May 26, 2021
at noon (mountain time) | | 1 | Elect four directors to our Board of Directors from the nominees named in the proxy statement | FOReach
nominee | p. 7 |
| ADMISSION
Stockholders of record as of the close of business on March 31, 2021, will be entitled to attend, vote, and ask questions at the Annual Meeting | | 2 | Ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. | FOR | p. 49 |
| WEBCAST The virtual meeting will be held online at: www.virtualshareholdermeeting.com
/RMAX2021. You will need to enter the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card | | The above actions are described in more detail in this proxy statement. We may also transact any other business as may properly come before the Annual Meeting or before any adjournment or postponement thereof. |
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Your vote is important. We encourage you to vote by proxy in advance of the meeting, whether or not you plan to attend the meeting. Please vote using one of the following advance voting methods:
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BY INTERNET | BY TELEPHONE | BY MAIL |
You may vote via the internet by visiting http://www.proxyvote.comand entering the unique control number for your shares located on the Notice of Internet Availability of Proxy Materials. | You may vote by phone by calling
(800) 690-6903. You will need the control number from your Notice of Internet Availability of Proxy Materials. | Beneficial Owners of Shares Held in Street Name:
You may vote by filling out the card you received from the organization holding your shares and returning it as instructed by that organization. | Stockholders of Record:
If you requested that Proxy Materials be mailed to you, you will receive a proxy card with your Proxy Materials and may vote by filling out and signing the proxy card and returning it in the envelope provided. |
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Please feel free to contact our investor relations department at (303) 224-5458 or investorrelations@remax.com if you have any questions about voting or attending the meeting.
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| By Order of the Board of Directors |
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| Adam Lindquist Scoville, Secretary |
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY 26, 2021
The Company’s Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2020 are also available at http://materials.proxyvote.com/75524W. |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING TO BE HELD ON MAY 24, 2018: The Company’s Proxy Statement and Annual
Report on Form 10-K for the fiscal year ended December 31, 2017 are also available
at http://materials.proxyvote.com/75524W.
PROXY SUMMARY
About RE/MAX HOLDINGS, INC.
PROXY STATEMENT
2018 ANNUAL MEETING OF STOCKHOLDERSHoldings, Inc.
TO BE HELD ON MAY 24, 2018
GENERAL INFORMATION
RE/MAX Holdings, Inc. (“RE/MAX Holdings”) is making this proxy statement available to its stockholders on or about April 12, 2018,one of the world’s leading franchisors in connection with the solicitation of proxies by the Board of Directors for the RE/MAX Holdings 2018 Annual Meeting of Stockholders (the “Annual Meeting”), which will be held on Thursday, May 24, 2018 at 8:00 am (Mountain Time) at 5075 S. Syracuse St., Denver, Colorado 80237. As a stockholder of RE/MAX Holdings, you are invited to attend the Annual Meeting and are entitled and encouraged to vote on the proposals described in this proxy statement. Further information about the meeting and how to attend is below.
RE/MAX Holdings is a holding company. Its only business is to act as the sole manager of RMCO, LLC, a Delaware limited liability company (“RMCO”). RE/MAX Holdings was formed in June 2013 and completed an initial public offering of its Class A common stock on October 7, 2013 (the “IPO”). RMCO has three primary operating subsidiaries: RE/MAX, LLC, a franchisor of real estate brokerage services;industry. We franchise real estate brokerages globally under the RE/MAX® brand (“RE/MAX”) and mortgage brokerages in the U.S. under the Motto® Mortgage brand (“Motto”). We also sell ancillary products and services, primarily technology, to our franchise networks and, in certain instances, we offer these products and services outside our franchise networks. RE/MAX, founded in 1973, has over 135,000 agents operating in over 110 countries and territories. Motto Franchising, LLC, ais the only national franchisor of mortgage brokerages in the United States. Motto is among the top 5% of fastest growing emerging franchises and has grown to over 125 open offices since it was founded in 2016. RE/MAX and Motto are 100% franchised—we do not own any of the brokerages that operate under these brands. We focus on enabling our networks’ success by providing powerful technology, quality education and training, and valuable marketing to build the strength of the RE/MAX and Motto brands.
A Leading Dual-Brand Franchisor with Compelling Growth Opportunities
E/MAX: #1 Name in Real Estate (US/Canada) and Unmatched Global Footprint. Highly Productive Network of more than 135,000 agents. Agent-centric model is different and better. Motto: Rapidly expanding network of offices with almost $2.5 billion in 2020 annual loan volume. First and only national mortgage brokerage services;franchise in U.S. Among top 5% of fastest growing emerging franchises.
1Source: MMR Strategy Group Study of unaided brand awareness
2Source: Franchise Grade*, based on an analysis of over 2,800 franchise systems during the 36-month period ended December 31, 2018
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 1 |
2020 – Performance Highlights
Strategic Acquisitions 
Developed the first cloud service for mortgage brokers, combining third-party loan processing with an all-in-one digital platform 
An industry-leading company in location intelligence data whose products have been instrumental in the success of the redesigned www.remax.com consumer website. | | | Our Growing Franchise Brands RE/MAX Agent Count as of December 31 
Total Open Motto Mortgage Offices: 
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STRONG FINANCIAL POSITION
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$266.0M
Revenue | | | $92.6M
Adjusted EBITDA1 | | | $64.7M
Free Cash Flow1 |
1. Adjusted EBITDA and Booj, LLC,free cash flow are non-GAAP measures Please see the Appendix on page 56 of this Proxy Statement for definitions of these terms and reconciliation with the most directly comparable GAAP measures.
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Our Response to COVID-19 |
Our response to COVID-19 demonstrated our commitment to all of our stakeholders. In order to preserve the health and safety of our employees, we transitioned to a remote work environment overnight. We then expanded our support services for RE/MAX and Motto affiliates, and we asked our employees to embrace a “shared sacrifice” with the goal of preserving as many jobs as possible. Additional support services including daily live trainings, free Zoom® Pro accounts, special vendor discounts and programs, new marketing resources, and recaps of vital government programs helped our networks effectively navigate the COVID-19 environment. We also extended significant financial support to RE/MAX and Motto franchisees while maintaining our dividend throughout 2020. |
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2 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
Compensation Highlights |
We believe that the compensation of our CEO and other Named Executive Officers should be tied to the long-term interests of our stockholders. We have therefore structured executive compensation to be largely variable, based on Company and individual performance. As the charts to the right show, approximately 70% of our CEO and other Named Executive Officers (“NEO”) target compensation is at-risk and performance-based. | 
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CEO: base salary 30%, bonus 18%, equity grant 51%, other 1%. Average of other NEOs: base salary 30%, bonus 10%, equity grant 59%, other 1%
Our Mission, Vision, Values, and Beliefs
The graphic below shows our mission, vision, values, and beliefs. Our values, summarized by the acronym “MORE,” are reflected in our Code of Conduct, which is discussed in greater detail below.
Mission: Deliver the best experience in everything real estate. Vision: To be the global real estate leader; the ultimate destination for professionals and consumers. Values: Deliver to the max; customer obsessed, do the right thing, together everyone wins. Beliefs: We believe in the value of full-time diverse professionals. We believe in preparation, education, and constant growth. We believe in both experience and innovation. We believe in the power of association—and that individuals thrive in positive, productive, inclusive environments.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 3 |
Our Commitment to our Stakeholders
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EVERYBODY WINS: |
Environmental
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Social
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Governance
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● LEED Certified headquarters building ● Striving for more efficient resource utilization by reducing our footprint and subleasing portions of our headquarters building. ● Many initiatives to minimize headquarters building footprint: e.g., single-stream recycling, composting, low-flow appliances, recent LED lighting retrofit, et cetera. | | | ● Providing aspiring entrepreneurs in over 110 countries and territories the opportunity to become business owners. ● Strong focus on diversity, equity, and inclusion in our networks and at headquarters: two of five executive officers and half of Board members are women or from diverse populations and nearly 60% of RE/MAX agents in the U.S. are women. ● RE/MAX brokers and agents in the U.S. and Canada have donated over $170 million to Children’s Miracle Network since 1992. ● The Motto Mortgage Mission Against Hunger organizes food drives across the country and headquarter staff volunteers at a local food pantry. | | | ● Key Board committees are fully independent ● Separate Chair & CEO Roles ● Robust Lead Independent Director Role ● Most directors attended 100% of Board and committee meetings; no director attended less than 90% of Board and committee meetings in 2020. ● Ten directors have earned fellowships with National Association of Corporate Directors (“NACD”); newest members are working toward fellowships. ● Annual self-assessments administered by inside counsel or third-party. ● Commitment to Board refreshment—two new members added in 2020. |
Diversity, Equity, and Inclusion
As a technology developerfranchisor, human capital development and opportunity are foundational elements of our business. Diversity, equity, and inclusion permeate our networks as we offer motivated entrepreneurs in over 110 countries and territories the opportunity to elevate their careers, small business owners in real estate. Moreover, we have been a leader in expanding opportunities for women within real estate since our founding almost 50 years ago. In our early days, one of the keys to our initial success was an intentional decision to invite women to join our RE/MAX network as real estate agents, which helped create professional opportunities for women in a persistently male-dominated industry at the time. Through the years, we have consistently prioritized leadership opportunities for women within our organization. For example, in the history of the Company, two of our five CEOs have been women, and today, two of our five executive officers and five of our 12 board members are female. Globally, approximately 46% of our franchise owners and 52% of our agents are women as of December 31, 2020. We remain committed to diversity, equity, and inclusion and continue to expand our efforts around this important topic. To ensure our affiliates as well as our employees are informed, educated and engaged, we infuse education on diversity, equity, and inclusion at key Company events and routinely promote available educational resources.
We are proud to support multiple groups that aim to increase diversity in the real estate industry,profession and homeownership by diverse groups. We financially support organizations such as the National Association of Hispanic Real Estate Professionals, the Asian Real Estate Association, the National Association of Gay and Lesbian Real Estate Professionals and the National Association of Real Estate Brokers. We seek to have diverse guests and presenters for events such as our annual conventions and on media directed at our networks.
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4 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
We believe in the power of education and that it is important for our headquarters employees to understand the history of racism and other forms of bias. In 2020, we launched a 10-week racial equity and habit-building challenge. This program was open to all headquarters staff and we had strong participation by our employees. Each week, participants read materials or watched videos on a variety of topics such as Women’s suffrage, voter suppression, school segregation and other issues surrounding education, policing, incarceration, and environmental justice—including the real estate industry’s history of redlining, which we acquiredpre-dates RE/MAX’s founding. Participants were encouraged to discuss the materials and the issues they raised with their co-workers.
Giving Back
Giving back to our communities is part of our culture. All around the world, RE/MAX affiliates make a difference in their communities. For the past 29 years, RE/MAX affiliates have been making miracles happen through our partnership with Children's Miracle Network Hospitals (CMN Hospitals) in the United States and Canada. During this year. Our Class A common stock trades ontime, RE/MAX Associates have donated over $170 million to CMN Hospitals. CMN Hospitals raises funds and awareness for 170 member hospitals that provide 32 million patient visits to 10 million kids each year across the New York Stock Exchange (“NYSE”) underU.S. and Canada. All donations made by RE/MAX Associates through the symbol “RMAX.”Miracle Home Program or from local fund-raising events, go to the local CMN Hospital to fund critical treatments and healthcare services, pediatric medical equipment and charitable care.
In this proxy statement, “we,” “our,” “us”2018, Motto founded The Motto Mortgage Mission Against Hunger as a way for our nationwide network to give back to the communities we serve every day. The Motto network organizes food drives across the country and the “Company” refer collectively to RE/MAX Holdings, RMCO, and RMCO’s subsidiaries.Motto Mortgage headquarters staff volunteers regularly at a food pantry in Denver, Colorado.
Below are answers to common questions stockholders may have about the Annual Meeting.
What are the Proxy Materials?
The “Proxy Materials” are this proxy statement and our annual report to stockholders for 2017. If you request printed versions of the Proxy Materials, you will also receive a proxy card.
Why did I receive a one-page notice instead of a full set of Proxy Materials?Environmental Sustainability
We are furnishing Proxy Materialscommitted to sustainability in our operations. Our headquarters building is LEED certified. We have many initiatives at headquarters to minimize our environmental footprint and create a safe and comfortable working environment, including single-stream recycling and composting throughout the building, reusable dishes and utensils in dining areas and break rooms, low-flow plumbing fixtures, a recent LED lighting retrofit with most lights on timers or photocells, a direct digital control HVAC system, and drip irrigation landscaping. We use an environmental consultant to assess design and construction and an industrial hygienist to evaluate usage of chemicals. We are currently refreshing the space in our headquarters building to strive for more efficient resource utilization both by reducing our own office footprint due to evolving workplace habits, and by increased subleasing of our stockholdersheadquarters building.
The COVID-19 pandemic created an opportunity to further improve safety in our building operations and properties. Building entry protocols have been established to maximize the health and safety of our employees, and touchless door and appliance features have been installed to promote safety for our employees and tenants and reduce the spread of disease. Workstations and offices have been either replaced or modified to improve cleaning efficiencies and protocols to keep employees safe and productive as we begin to return to the office in 2021.
Building Businesses and Supporting our People During the Pandemic
As a franchisor, our success depends on the internet, rather than mailing printed copies. If you receivedsuccess of our franchisees. The early days of the COVID-19 pandemic were disruptive to our RE/MAX and Motto franchisees, as governmental responses to the pandemic severely stalled our industries. While restrictions varied from location to location, in many areas, open houses and in-person showings were prohibited, and some of the ancillary services necessary to complete real estate and mortgage transactions, such as inspections and notaries were unavailable. According to the RE/MAX National Housing Report, home sales in April 2020 and May 2020 were down approximately 20% and 34%, respectively, from April and May 2019.
During this time, we focused on protecting and supporting our employees and serving our networks. Our headquarters staff adopted a one-page notice“shared sacrifice” mindset that helped us avoid widespread layoffs of our headquarters staff. This was crucial so that our staff could provide the services that our franchisees needed to navigate the challenging times. We drew on our nearly 50 years of experience to assist our franchisees so that they would be able to emerge stronger. We offered substantial additional services to our franchisees, including enhanced training, special vendor discounts and programs, new marketing resources, recaps of vital government materials, and more. We also extended significant financial assistance to our franchisees. The housing market rebounded strongly in the second half of 2020, and we believe our actions helped RE/MAX and Motto franchisees to be ready to help their customers through the record-setting housing and mortgage markets in the second half of 2020. The combination of these factors led to improved collections in the second half of the year, which combined with our prudent financial management, enabled us to maintain our dividend throughout 2020. The Company also opportunistically allocated capital to two tuck-in acquisitions in the third quarter of 2020 to help position the Company for long-term growth.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 5 |
Code of Conduct and Supplemental Code of Ethics
We have adopted a Code of Conduct applicable to all employees and a Supplemental Code of Ethics applicable to our principal executive, financial, and accounting officers and all persons performing similar functions. Our Code of Conduct emphasizes our core values and that our competitive advantages come by mail, you will not receive a printeddoing MORE – delivering to the max while doing the right thing.
Deliver to the Max: We stay hungry and continually push ourselves to higher levels of performance. We go above and beyond expectations, approaching everything we do with the highest levels of enthusiasm, energy, and pride. We actively learn, listen, improve and evolve; our self-improvement never stops. Customer Obsessed: We put customers first—focusing on their needs and exceeding their expectations. We know the company is built on relationships, so we’re committed to maintaining and growing them. We think big—delivering an experience that’s far beyond the norm, and far beyond what anyone expects. Do the Right Thing: We act with integrity, honesty and transparency. Every day. We hold ourselves to the highest standards in performance, ethics, and accountability. We own our actions and outcomes—taking smart risks with confidence and decisiveness. Together Everybody Wins: We collaborate and communicate—contributing to an environment in which everybody wins. We lead by example; helping others develop their talents and reach their goals. We show gratitude and respect. Everybody’s voice matters. We use resources efficiently, for everybody’s greater good.
The Compensation Committee evaluates how our executive officers live our MORE values when evaluating performance and determining annual incentive compensation, as discussed further in the Compensation Discussion and Analysis below.
A copy of the Proxy Materials unless you request one. Instead, the notice instructs you howeach code is available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com. Any amendments to access and review the Proxy Materials on the internet. If you would like a printed copyeither code, or any waivers of the Proxy Materials, please follow the instructions on the notice.
What items are scheduled to be voted on at the Annual Meeting?
There are two proposals to be voted on at the Annual Meeting:
1. the election of three directorstheir requirements, that apply to our Board of Directors anddirectors or executive officers will be disclosed on our investor relations website.
2. the ratification of the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2018.
We may also transact any other business as may properly come before the Annual Meeting or before any adjournment or postponement thereof.
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6 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
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How does the Board of Directors recommend that I vote?
The Board of Directors recommends that you vote:
FOR each of the nominees to the Board of Directors (Proposal 1); and
FOR the ratification of the appointment of KPMG as our independent registered public accounting firm (Proposal 2).
Could other matters be decided at the Annual Meeting?
We do not anticipate any other matters will come before the Annual Meeting. If any other matters come before the Annual Meeting, the proxy holders appointed by our Board of Directors will have discretion to vote on those matters.
Who may vote at the meeting?
Holders of Class A common stock and holders of Class B common stock as of the close of business on March 23, 2018 (the “Record Date”) may vote at the Annual Meeting.
How many votes do I have?
Holders of Class A common stock are entitled to one vote per share of Class A common stock held as of the Record Date. Holders of Class B common stock are entitled to two votes for each common unit in RMCO owned by such holder as of the Record Date, regardless of the number of Class B shares owned.
As of the Record Date, there were 17,733,302 shares of Class A common stock outstanding, which will each carry one vote and one share of Class B common stock outstanding, which will carry 25,119,200 votes.
What vote is required for each proposal?
For the election of directors, each director must be elected by a plurality of the votes cast. This means that the three nominees receiving the largest number of “for” votes will be elected as directors. We do not have cumulative voting.
The ratification of the Company’s independent registered public accounting firm and any other proposals that may come before the Annual Meeting will be determined by the majority of the votes cast.
How are abstentions and broker non-votes counted?
Abstentions (shares present at the meeting or by proxy that are voted “abstain”) and broker non-votes (explained below) are counted for the purpose of establishing the presence of a quorum at the Annual Meeting. Abstentions are not counted as votes cast. For more information on broker non-votes, see the question entitled “If I hold shares in street name through a broker, can the broker vote my shares for me?”
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are a stockholder of record.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are a beneficial owner of shares held in street name. The organization holding your account is considered the stockholder of record. As a beneficial owner, you have the right to direct the organization holding your account on how to vote the shares you hold in your account.
How do I vote?
There are four ways for stockholders to vote:
Via the internet. You may vote via the internet by visiting http://www.proxyvote.com and entering the unique control number for your shares located on the Notice of Internet Availability of Proxy Materials.
By telephone. You may vote by phone by calling (800) 690-6903. You will need the control number from your Notice of Internet Availability of Proxy Materials.
By mail. If you requested that Proxy Materials be mailed to you and you are a stockholder of record, you will receive a proxy card with your Proxy Materials and may vote by filling out and signing the proxy card and returning it in the envelope provided. If you are a beneficial owner of shares held in street name, you may vote by filling out the card you received from the organization holding your shares and returning it as instructed by that organization.
In Person. You may also vote your shares by attending the Annual Meeting in person and, if you are a stockholder of record, completing a ballot at the Annual Meeting. If you hold your shares in street name and wish to vote in person at the meeting, you will first need to contact the organization that holds your shares in order to obtain a legal proxy from that organization.
Can I change my vote after submitting a proxy?
Stockholders of record may revoke their proxy before the Annual Meeting by delivering to the Company’s Corporate Secretary a written notice stating that a proxy is revoked, by signing and delivering a proxy bearing a later date, by voting again via the internet or by telephone, or by voting in person during the Annual Meeting.
Street name stockholders who wish to change their votes should contact the organization that holds their shares.
If I hold shares in street name through a broker, can the broker vote my shares for me?
If you hold your shares in street name and you do not vote, the broker or other organization holding your shares can vote on certain “routine” proposals but cannot vote on other proposals. Proposal 2 (ratification of the Company’s independent registered public accounting firm) is a “routine” proposal. Proposal 1 (election of directors) is not considered a “routine” proposal. If you hold shares in street name and do not vote on Proposal 1, your shares will be counted as “broker non-votes.”
Who is paying for this proxy solicitation?
The Company is paying the costs of the solicitation of proxies. Members of our Board of Directors and officers and employees may solicit proxies by mail, telephone, fax, email, or in person. We will not pay directors, officers, or employees any extra amounts for soliciting proxies. We may, upon request, reimburse brokerage firms, banks, or similar entities representing street name holders for their expenses in forwarding Proxy Materials to their customers who are street name holders and obtaining their voting instructions.
What do I need to do if I want to attend the meeting?
You will need to provide evidence that you are a stockholder as of the Record Date. This can be a copy of your proxy card or a brokerage statement showing your shares as of the Record Date. You will also need to bring government-issued photo identification such as a driver’s license or passport. If you hold your shares in street name and wish to vote in person at the meeting, you will need to contact the organization that holds your shares in order to obtain a legal proxy from that organization.
Where can I find voting results?
Final voting results from the Annual Meeting will be filed with the Securities and Exchange Commission (“SEC”) on a Current Report on Form 8-K within four business days of the Annual Meeting.
I share an address with another stockholder. Why did we receive only one set of Proxy Materials?
Some banks, brokers, and nominees may be participating in the practice of “householding” Proxy Materials. This means that only one copy of our Proxy Materials to stockholders may have been sent to multiple stockholders in your household. If you hold your shares in street name and want to receive separate copies of the Proxy Materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact the bank, broker, or other nominee who holds your shares.
Upon written or oral request, the Company will promptly deliver a separate copy of the Proxy Materials to any stockholder at a shared address to which a single copy of any of those documents was delivered. To receive a separate copy of the Proxy Materials,
you can contact our investor relations department at (303) 224-5458, investorrelations@remax.com or 5075 S. Syracuse St., Denver, CO 80237.
Whom should I contact if I have additional questions?
You can contact our investor relations department at (303) 224-5458, investorrelations@remax.com or 5075 S. Syracuse St., Denver, CO 80237. Stockholders who hold their shares in street name should contact the organization that holds their shares for additional information on how to vote.
PROPOSAL 1: ELECTION OF DIRECTORDIRECTORSS
At the Annual Meeting, stockholders will vote to elect the three nominees named in this Proxy Statement
What am I voting on? Stockholders will elect 4 directors to serve as Class II directors, each for a three-year term. | | | At the 2021 Annual Meeting of Stockholders (the “Annual Meeting”), stockholders will vote to elect four directors to the Board of Directors as Class II directors. Each of the Class II directors elected at the Annual Meeting will hold office until the 2024 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated Adam Contos, Kathleen Cunningham, Gail Liniger, and Dr. Christine Riordan to serve as Class II directors for terms expiring at the 2024 Annual Meeting of Stockholders. In the event that any nominee for Class II director becomes unavailable or declines to serve as a director at the time of the Annual Meeting, the persons named as proxies will vote the proxies in their discretion for any nominee who is designated by the current Board of Directors to fill the vacancy. All of the nominees currently serve as directors and we do not expect that any nominee will be unavailable or will decline to serve. |
What is the required vote? Each director must be elected by a plurality of the votes cast. This means that the four nominees receiving the largest number of “for” votes will be elected as directors. We do not have cumulative voting. | | | |
Recommendation of the Class II directors elected at the Annual Meeting will hold office until the 2021 Annual Meeting of Stockholders and until her successor has been duly elected and qualified. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated Gail Liniger, Kathleen Cunningham, and Christine Riordan to serve as Class II directors for terms expiring at the 2021 Annual Meeting of Stockholders.
The persons named as proxies will vote to elect Mmes. Liniger, Cunningham, and Riordan unless a stockholder indicates that his or her shares should be withheld with respect to one or more of such nominees.
In the event that any nominee for Class II director becomes unavailable or declines to serve as a director at the time of the Annual Meeting, the persons named as proxies will vote the proxies in their discretion for any nominee who is designated by the current Board of Directors to fill the vacancy. All of the nominees currently serve as directors and we do not expect that any of them will be unavailable or will decline to serve.
RECOMMENDATION OF THE BOARD:Board: The Board of Directors recommends that you vote FOR each of the nominees for the Board of Directors in this Proposal 1.
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Class II Directors nominated for re-election at this year’s annual meeting. |
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Adam M. Contos | Kathleen J. Cunningham | Gail Liniger | Dr. Christine M. Riordan |
In addition to his outstanding leadership skills, Adam brings to our board a deep knowledge of the Company and expertise in the real estate and franchising industries. | In addition to her background in finance, Kathleen brings capital structure expertise and board governance knowledge to her role as an independent director of our board. | Gail has served in many roles since co-founding RE/MAX in 1973. She brings deep Company-specific knowledge to the board in addition to her expertise in the real estate and franchising industries. | Christine brings both hands on experience and academic expertise in business leadership and strategy expertise to the board having served as a business school professor and senior executive. |
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 7 |
5
CORPORATE GOVERNANCE
Board OverviewExecutive Officers
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Gender and Racial Diversity | | | RE/MAX Holdings Tenure |
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Age | | | Independence |
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Gender and Racial Diversity: 50% diverse. RE/MAX Holdings Tenure: Average tenure 5.6 years. Less than 3 years: 25%, 3 to 5 years, 17%, greater that 5 years, 58%. Age: Average age: 67 years. Less than 50, 8%, 50-59, 8%, 60-69, 34%, 70-79, 42%, over 79, 8%. Independence: 67% independent.
Adam M. Contos, age 46, is our Chief Executive Officer (“CEO”) and principal executive officer (“PEO”). Mr. Contos was named as Co-Chief Executive Officer (“Co-CEO”) on May 30, 2017. From then until his appointment as sole CEO on February 14, 2018, Mr. Contos and David Liniger, our Chair and Co-Founder, served as Co-CEOs. During this time, as part
Corporate Governance Factsheet |
✓ 12 Members of the Board of Directors ✓ All Members of Key Committees are Independent* ✓ Lead Independent Director ✓ Corporate Governance Guidelines ✓ Independent Directors Meet Without Management or Other Directors ✓ Board and Committee Self-Evaluations | ✓ Annual Review of Director Independence ✓ Policy for Auditor Independence ✓ Independent Compensation Consultant ✓ Anti-Hedging and Anti-Pledging Policy ✓ Management Succession Plan ✓ Board Onboarding Process ✓ Annual Compliance Training for Directors and Employees ✓ Demonstrated Commitment to Director Education |
* All members of the BoardAudit, Compensation, and Nominating and Corporate Governance committees are independent.
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8 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
Table of Directors’ planned succession process, Mr. Liniger gradually transitioned the duties of CEO to Mr. Contos. During his 14-year career at RE/MAX, Mr. Contos has held a variety of leadership positions. He served as Chief Operating Officer from January 2016 to May 2017, as Senior Vice President, Marketing from February 2015 through January 2016, as Vice President, Business Development, from February 2014 until February 2015, as Vice President, Region Development, from August 2013 through February 2014 and as Regional Vice President from 2005 through August 2013.Contents
Karri R. Callahan, age 40, is our Chief Financial Officer, a position she has held since March 31, 2016. From January 15, 2016 to March 31, 2016 she served as Co-Chief Financial Officer. Ms. Callahan joined RE/MAX in April 2013 as Senior Manager of SEC Reporting and was promoted to Vice President, Corporate Controller in June 2014. She served as the Company’s Acting Chief Accounting Officer from November 6, 2014 to January 26, 2015 and as Acting Chief Financial Officer from December 31, 2014 through January 26, 2015. Prior to joining RE/MAX, Ms. Callahan worked at Ernst & Young, LLP, most recently as Senior Manager, since 2008.
Serene Smith, age 39, has served as our Chief Operating Officer since May 2017. Prior to becoming Chief Operating Officer, Ms. Smith served as Senior Vice President, Financial Planning and Business Analytics from January 2016 to May 2017. From April 2014 to December 2015, Ms. Smith served as Vice President, Financial Planning and Analysis and was Vice President, Operational Controller, from April 2010 to April 2014. She has served in various other capacities since joining RE/MAX in 2006.
Our Board of Directors
Our Board of Directors currently consists of tentwelve members. OurThe Board of Directors is divided into three classes of four members each with staggered three-year terms. At each annual general meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. The following table summarizes information about each director nominee and continuing directors.
Director and
Principal Occupation | Age | RMAX Director Since | Independent | COMMITTEES |
| | | | Audit | Compensation | Finance and
Investment | Nominating and Corporate Governance |
CLASS II―DIRECTOR NOMINEES (FOR TERMS EXPIRING 2024) |
Adam M. Contos
CEO and Director, RE/MAX Holdings, Inc. | | | | | | | |
Kathleen J. Cunningham
Former CFO of Novatix Corporation | | | | | | | |
Gail A. Liniger
Vice Chair, and Co-Founder of RE/MAX | | | | | | | |
Christine M. Riordan
President, Adelphi University | | | | | | | |
CLASS III―CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2022) |
David L. Liniger Non-Executive Chair and Co-Founder of RE/MAX | | | | | | | |
Stephen P. Joyce
Former CEO and board member of Dine Brands Global, Inc. (NYSE: DIN) | | | | | | | |
Daniel J. Predovich
President of Predovich & Company | | | | | | | |
Teresa S. Van De Bogart
Former Vice President—Global IT Solution Delivery for Molson Coors Brewing Company | | | | | | | |
CLASS I―CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2023) |
Joseph A. DeSplinter
Former partner with Ernst & Young | | | | | | | |
Roger J. Dow
President and CEO of the U.S. Travel Association | | | | | | | |
Ronald E. Harrison
Former Senior Vice President, PepsiCo, Inc. | | | | | | | |
Laura G. Kelly
Former executive with CoreLogic, Dun & Bradstreet, American Express | | | | | | | |
Number of Meetings in 2020: | | | | |
Nominees for Director with Terms That Will Expire in 2021 (Class II Directors):
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2021Gail A. Liniger
Vice Chairand Co-Founder
Age: 72 Proxy Statement | 
| Background
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Gail A. Liniger is our Vice Chair and Co-Founder. She has been a director of RE/MAX Holdings, since July 2013 and, before that, of RE/MAX, LLC or its parent companies, since 1974. Mrs. Liniger is no longer an officer of the Company; however she has held many officer positions with the Company since its founding in 1973, including President from 1979-1991, and Chief Executive Officer from 1991 through 2002. Mrs. Liniger is a Governance Fellow of the NACD. Mrs. Liniger is married to David Liniger, our Chair and Co-Founder. The Board recommends that you vote to elect Mrs. Liniger because of her role in founding our Company with Mr. Liniger and her intimate knowledge of the Company and the real estate industryInc.
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Key Skills
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Company Co-Founder
Deep Company-specific knowledge
Real estate industry expertise
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Committee Membership
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None9
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Diversity of Skills, Qualifications, and Experience
Your Board members possess a diverse range of skills and experience including in the areas below. The table shows the number of members with substantial experience in each area.
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| | Finance Board members with strong financial backgrounds assist the Board in its oversight of the Company’s accounting and financial reporting. Two members are “audit committee financial experts.” | | 6 |
| | Global RE/MAX, with a presence in over 110 countries and territories, continues to grow quickly in international markets. Board members with experience in global businesses can help as the Company seeks to expand global revenue opportunities. | | 7 |
| | Public Company Board Experience (other than RMAX) Experience on other public company boards gives members a broad perspective on the issues that public companies face. | | 3 |
| | Real Estate Expertise
As a holding company that addresses many aspects of home buying and home selling, having Board members with broad experience in the real estate industry is crucial. | | 5 |
| | Franchise Expertise
The Company is primarily a franchisor. Board members with franchise experience can help the Company navigate the unique challenges of the franchise business model. | | 6 |
| | Technology Expertise
Technology continues to grow in importance in the real estate and mortgage industries. The Company has completed four technology-related acquisitions since 2018. Board members with strong technology backgrounds can help guide the Company as it improves its technology and pursues other technology-related opportunities. | | 2 |
| | In-Depth Company Knowledge
RE/MAX was founded in 1973 by Dave and Gail Liniger. These real estate visionaries have led RE/MAX through many economic cycles and massive changes in the industry. Mr. Contos has been an officer of RE/MAX for over fifteen years. The wisdom these leaders have gained over their careers continues to be invaluable to the Board as RE/MAX Holdings continues to grow and expand its business. | | 3 |
| | Cyber Security
As the industries the Company operates in become more technology centered, the risks increase. Board members with information technology security background are valuable in this important area of Board oversight. | | 2 |
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10 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
Nominees for Election at the Annual Meeting (For Terms that will Expire in 2024) (Class II)
Adam M. Contos Age:Kathleen J. Cunningham
49 RMAX Director Since: Independent Director
2018 Committee Membership: Age: 71None | 
| Background
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Adam M. Contos, our Chief Executive Officer, was appointed to the Board of Directors of RE/MAX Holdings in December 2018. More information about Mr. Contos can be found below under “Executive Officers.” The Board recommends you vote for Mr. Contos due to his extensive knowledge of the real estate and franchising industries and his history of strong leadership at RE/MAX. | Key Skills |
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Real Estate Industry Expertise 
Strong Leadership Experience 
In-Depth Company Knowledge |
| Kathleen J. Cunningham Age: 74 RMAX Director Since: 2013 Committee Membership: Audit (Chair), Finance and Investment |
Key Skills | Kathleen J. Cunningham was appointed to the Board of Directors of RE/MAX Holdings in July 2013, re-elected in May 2015 and 2018, and serves as Chair of the Audit Committee. She was a member of RMCO’sthe Board of Managers of RMCO, LLC (“RMCO”) from February 2013 until our IPO in October 2013, at which time RMCO ceasedshe transitioned to have a Board of Managers.the RE/MAX Holdings Board. Ms. Cunningham has been retired since 2009. From October 2005 to May 2009, she was Chief Financial Officer of Novatix Corporation. She was previously Chief Financial Officer at Webroot Software and US WEST Information Systems. She has been a board member of Q Advisors, LLC since 2003. Previously, she served on the boards of Chileno Bay LLC from December 2011 to October 2013, The Assist Group from June 2011 to March 2013 and Novatix Corporation from 2005 to 2009. Ms. Cunningham has served on a total of four public company boards and their audit committees. Ms. Cunningham is a Board Leadership Fellow of the NACD and is a co-founder and past President of its Colorado Chapter. The Board recommends that you vote to electfor Ms. Cunningham because of her particular knowledge of and experience in finance, capital structure, and board governance practices of other major organizations. |
Key Skills
Financial Expertise 
Global Business Experience
Technology Expertise 
Public Company Board Experience | |
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 11 |
Gail A. Liniger Age: 75 RMAX Director Since: 2013 Committee Membership: None | 
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Gail A. Liniger is our Vice Chair and Co-Founder. She has been a director of RE/MAX Holdings since July 2013 and, before that, of RE/MAX, LLC or its parent companies, since 1974. Mrs. Liniger held many officer positions with the Company since its founding in 1973, including President from 1979-1991, and Chief Executive Officer from 1991 through 2002. Mrs. Liniger is a Governance Fellow of the NACD. Mrs. Liniger is married to Dave Liniger, our Chair and Co-Founder. Mr. and Mrs. Liniger were to the International Franchise Association’s Hall of Fame in 2005. The Board recommends you vote for Ms. Liniger because of her role in founding RE/MAX, and her intimate knowledge of the Company and the real estate industry. | Key Skills |
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Real Estate Experience 
Franchise Industry Expertise 
Company Specific Knowledge – RE/MAX Co-Founder |
| Christine M. Riordan Age:Finance experience 56 RMAX Director Since: 2015 Committee Memberships: Capital structure experience
Board governance knowledgeNominating and Corporate Governance (Chair), Compensation
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Committee Membership
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Audit (Chair)
Nominating & Corporate Governance
Finance and Investment
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Christine M. Riordan, Ph.D.
Independent Director
Age: 53Key Skills
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| Background
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Christine M. Riordan, Ph.D. was appointed to the Board of Directors of RE/MAX Holdings in January 2015, elected for a full term in May 2015 and again in 2018. She is Chair of the Nominating and Corporate Governance Committee. Dr. Riordan is President of Adelphi University in New York, a nationally ranked doctoral research university. Dr. Riordan is an internationally recognized expert in leadership, strategy, team performance, and diversity and inclusion. She consults regularly with corporations and is a frequent speaker on leadership and overcoming challenges, including her TEDx talk, “Dare to Be Extraordinary”. She has been interviewed and written articles for media such as: Financial Times, Harvard Business Review, Forbes, USA Today, U.S. News & World Report, The New York Times, International Herald Tribune, Huffington Post, MSNBC, CNN, CNBC, Wall Street Journal MarketWatch, CareerBuilder, and Psychology Today. For her leadership in New York, Dr. Riordan has been recognized by the Long Island Business News as a Top CEO, and by Family and Children's Association as a 2015 Woman of Distinction, by the Long Island Press as Long Island’s Best College President and she has been named to the Long Island Press 2016 Power List. She also currently serves on the board of directors of the Long Island Association (LIA), a leading business organization on Long Island and the Long Island Regional Advisory Council on Higher Education (LIRACHE). Dr. Riordan is a Board Leadership Fellow of the NACD. The Board recommends that you vote to electfor Dr. Riordan because of her deep experience as a senior executive and chief executive officer, broad business background, experience with board experienced, and expertise in leadership and strategy. |
Key Skills
Strong Leadership Experience 
Broad Business Experience | |
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Senior executive and CEO experience
Broad business background
Board experience
Leadership and strategy expertise12
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Committee MembershipRE/MAX Holdings, Inc.
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2021 Proxy StatementNominating & Corporate Governance (Chair) Compensation
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Directors Whose Terms Will Expire in 20192023 (Class IIII Directors):
Joseph A. DeSplinter Age:David L. Liniger
67 RMAX Director Since: Non-Executive Chair
2016 Committee Membership: Age: 72Finance and Investment (Chair), Audit | 
| Background
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David L. Liniger is the non-executive Chair of our Board of Directors and our Co-Founder. He has been Chair of the Board of Directors of RE/MAX Holdings since July 2013, and, before that, of RE/MAX, LLC or its parent companies, since it was established in August 1974. Although Mr. Liniger is no longer a Company officer, he has served in a variety of leadership roles within the RE/MAX organization over the past 45 years, including Co-CEO and PEO from May 30, 2017 through February 14, 2018 and CEO from December 31, 2014 until May 30, 2017. Mr. Liniger completed the transition of his CEO responsibilities to Mr. Contos on February 14, 2018. Mr. Liniger is a Board Leadership Fellow of the NACD. Mr. Liniger was selected for our Board because of his role in founding our Company and his intimate knowledge of our Company and his long history as a visionary in the real estate industry.
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Key Skills
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Company Co-Founder
Deep Company-specific knowledge
Real estate industry leader
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Committee Membership
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None
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Richard O. Covey
Lead Independent Director
Age: 71
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| Background
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Richard O. Covey is our Lead Independent Director. He has been our Lead Independent Director since 2014. HeJoseph A. DeSplinter was appointed to the Board of Directors of RE/MAX Holdings in July 2013February 2016, elected for a full term in 2017 and re-elected in 2020. He serves as Chair of the Finance and Investment Committee. Mr. DeSplinter was a partner with Ernst & Young for nearly 30 years prior to his retirement in 2014. In that role, he served clients in many industries, particularly real estate, financial services, banking, and technology. Mr. DeSplinter served as the office managing partner for the Phoenix and Denver offices for ten years, which included fulfilling a number of regional roles, such as market strategy development. Mr. DeSplinter led the firm’s U.S. private equity professional practice group for five years, which also entailed serving on its U.S. professional practice committee. He also led the firm’s Americas’ Assurance implementation and enablement group for three years, focused on the rollout of the latest technological changes to the assurance group. As a result of these various roles, he has worked in a number of countries and has significant international experience. Mr. DeSplinter has served on the Company’s Board of Directors orand member of the audit committee of the Catholic Foundation of Northern Colorado since September 2015 and was a member of the Board of Managers since 2005. Mr. Covey is a retired U.S. Air Force officerDirectors and former NASA astronaut, a veteran of four Space Shuttle missions. Between 1994 and 2010, he was an aerospace industry executive and served as President, Boeing Service Company, as well as President and Chief Executive Officer of United Space Alliance, LLC. He retired from United Space Alliance in 2010. He has been a directorChairman of the Astronaut Scholarship Foundation since May 2013 and served on its ExecutiveAudit Committee until 2016.of Adolfson & Peterson Construction Company from June 2015 through June 2019. Mr. CoveyDeSplinter is a Board Leadership Fellow of the NACD. Mr. CoveyDeSplinter was selected for our Board because of his corporate leadershipstrong financial background and executive management expertise.vast experience advising public companies.
| Key Skills |
Key Skills
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Corporate leadership experience
Executive management experience
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Committee MembershipFinancial Expertise
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Compensation
Global Business Experience 
Real Estate Industry Experience 
Technology Expertise |
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2021Daniel J. Predovich
Director
Age: 70 Proxy Statement | 
| Background
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Daniel J. Predovich was appointed to the Board of Directors of RE/MAX Holdings, in July 2013 and has served as a member of the Company’s Board of Directors or Board of Managers since 2005. Mr. Predovich is a Certified Public Accountant, a Certified Fraud Examiner, Certified in Financial Forensics, and a Certified Information Technology Professional. Since 1986, he has been the President of Predovich & Company. He previously served as president and as a member of the Board of Governors, Colorado chapter of the Association of Certified Fraud Examiners. Mr. Predovich is a Board Leadership Fellow of the NACD. Mr. Predovich was selected to our Board because of his extensive experience and knowledge in accounting and financial matters.Inc.
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Key Skills
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Finance and accounting knowledge
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Committee Membership
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None13
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Teresa S. Van De Bogart
Independent Director
Age: 62
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| Background
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Teresa S. Van De Bogart was elected to the Board of Directors in May 2016. Ms. Van De Bogart currently serves as Vice President – Global IT Solution Delivery for Molson Coors Brewing Company, a position she has held for over four years. She has been an IT vice president for over ten years in other IT roles. She previously served in various other roles at Coors Brewing Company including procurement, finance and accounting. Ms. Van De Bogart is a Board Leadership Fellow of the NACD. Ms. Van De Bogart was selected to our Board because of her information technology background, including security trends and risk assessment matrix, and her experience as a senior leader in a public company.
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Key Skills
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Information technology and security expertise
Public company leadership experience
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Committee Membership
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Audit
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Directors Whose Terms Will Expire in 2020 (Class I Directors):
| Roger J. Dow
Age:Independent Director
Age: 71 74 | RMAX Director Since:  | BackgroundCommittee Membership: Compensation (Chair)
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Key Skills | Roger J. Dow was appointed to the Board of Directors of RE/MAX Holdings in July 2013 and serves as Lead Independent Director and as Chair of the Compensation Committee. He has served as a member of the Company’s Board of Directors or Board of Managers since 2005. Since January 1, 2005, he has been the President and Chief Executive Officer of the U.S. Travel Association. He previously served in various roles at Marriott International, including as Senior Vice President, Global Sales. He is currently a director of Forbes Travel Guide. Mr. Dow is a Governance Fellow of the NACD. Mr. Dow was selected tofor our Board of Directors because of his particular knowledge of and experience in strategic planning and leadership of complex organizations and his franchising experience. |
Key Skills
Strategic Planning Experience
Strong Leadership Experience 
Franchise Industry Experience | |
Ronald E. Harrison Age: 85 RMAX Director Since: 2013 Committee Memberships: Compensation, Nominating and Corporate Governance | 
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Strategic planning knowledge
Experience leading complex organizations
Franchise industry experience
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Committee Membership
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Compensation (Chair)
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Ronald E. Harrison
Independent Director
Age: 82 | 
| Background
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Ronald E. Harrison was appointed to the Board of Directors of RE/MAX Holdings in July 2013 and has served on the Company’s Board of Directors or Board of Managers since 2005. Since 2004, Mr. Harrison has been Chief Executive Officer and Managing Director of Harrison & Associates LLC. Prior to that, he served in various roles over his 40 years with PepsiCo, Inc., including as Senior Vice President, External Relations, and Special Assistant to the Chairman until April 2004. Mr. Harrison is the Chair Emeritus of the Diversity Institute of the International Franchise Association’s Education Foundation. He served as the International Franchise Association’s Chairman in 1999. He has also served on the Board of Trustees of the College of New Rochelle and on the Advisory Board of the University of New Hampshire’s Rosenberg Center for International Franchising. Mr. Harrison is a Governance Fellow of the NACD. HeMr. Harrison was selected tofor our Board of Directors because of his vast experience in leadership roles of complex organizations and knowledge in strategic planning.
| Key Skills |
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Financial Experience 
Strong Leadership Experience
Franchise Industry Expertise |
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14 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
| Laura G. Kelly Age: 64 RMAX Director Since: 2020 Committee Memberships: Audit, Compensation |
Key Skills |
Laura G. KellyStrategic planning knowledge Experience was elected to the Board of Directors of RE/MAX Holdings in 2020. Ms. Kelly, who is currently President of The Columbia Institute for CoreLogic also served as its Managing Director of Valuation Solutions, a hybrid technology and operating subsidiary with revenues of nearly $500 million. Before joining CoreLogic, Ms. Kelly had significant executive and financial responsibilities at Dun & Bradstreet, American Express and MasterCard. Ms. Kelly is also a member of the Board of Directors for Jack Henry (NASDAQ: JKHY), a financial technology company, and USAA’s Saving’s Bank Board. Ms. Kelly’s early career included service to her country as an active duty and reserve officer for the United States Air Force. Ms. Kelly was selected for our Board because of her experience in leading complex organizations
Franchise industry experienceglobal change and innovation and extensive background in financial services and data solutions.
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Global Business Experience 
Public Company Board Experience | |
Directors Whose Terms Expire in 2022 (Class III Directors):
David L. Liniger Age: 75 RMAX Director Since: 2013 Committee MembershipMembership: None | 
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David L. Liniger is the non-executive Chair of our Board of Directors and our Co-Founder. He has been Chair of the Board of Directors of RE/MAX Holdings since July 2013, and, before that, of RE/MAX, LLC or its parent companies, since it was established in August 1974. Mr. Liniger served in a variety of leadership roles within the RE/MAX organization over the past 45 years, including Co-CEO and Principal Executive Officer from May 2017 through February 2018 and CEO from December 2014 until May 2017. Mr. Liniger is a Board Leadership Fellow of the NACD. Mr. Liniger is married to Gail Liniger, our Vice Chair and Co-Founder. Mr. and Mrs. Liniger were named to the International Franchise Association’s Hall of Fame in 2005. Mr. Liniger was selected to serve on our Board because of his role in co-founding RE/MAX and launching Motto Mortgage, his intimate knowledge of our Company, and his long history as a visionary in the real estate industry. | Key Skills |
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Real Estate Industry Expertise 
Franchise Industry Expertise 
Global Business Experience 
Deep Company Specific Knowledge—RE/MAX Co-Founder |
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2021Audit Proxy Statement | RE/MAX Holdings, Inc. | 15 |
| Stephen P. Joyce Age: 61 RMAX Director Since: 2020 Committee Membership: Compensation, Nominating &and Corporate Governance |
Joseph A. DeSplinter
Independent Director
Age: 64Key Skills
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| Background
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Joseph A. DeSplinterStephen P. Joyce was appointed to the Board of Directors of RE/MAX Holdings in February 2016.April 2020. Mr. DeSplinterJoyce is the former Chief Executive Officer and a member of the Board of Directors of Dine Brands Global, Inc. (NYSE: DIN), the franchisor of Applebee’s Grill + Bar and IHOP. Prior to that he served as President, Chief Executive Officer, and Director of Choice Hotels International, Inc. Prior to that he spent over 25 years at Marriott International, Inc., in several roles, including Executive Vice President Global Development, Owner and Franchise Services. Mr. Joyce has held many leadership roles with the International Franchise Association, including Chairman. He also serves on the boards of a variety of community organizations. Mr. Joyce was a partner with Ernst & Youngselected for nearly 30 years priorour Board due to his retirementleadership in 2014. In that role, he served clients in many industries, particularly real estate, financial services, banking,franchise brands, both as a Board member and technology. Mr. DeSplinter served as the office managing partner for the Phoenixexecutive.
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Public Company Board Experience
Franchise Industry Experience 
Technology Experience
Global Business Experience | |
Daniel J. Predovich Age: 73 RMAX Director Since: 2013 Committee Membership: Finance and Denver offices for ten years, which included fulfilling a number of regional roles, such as market strategy development. Mr. DeSplinter led the firm’s U.S. private equity professional practice group for five years, which also entailed serving on its U.S. professional practice committee. He also led the firm’s America’s assurance implementation and enablement group for three years, focused on the rollout of the latest technological changesInvestment | 
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Daniel J. Predovich was appointed to the assurance group. As a resultBoard of these various roles, he has workedDirectors of RE/MAX Holdings in a number of countriesJuly 2013 and has significant international experience. Mr. DeSplinter has served as a member of the Company’s Board of Directors or Board of Managers since 2005. Mr. Predovich is a Certified Public Accountant, a Certified Fraud Examiner, Certified in Financial Forensics, and Chairmana Certified Information Technology Professional. Since 1986, he has been the President of the Audit CommitteePredovich & Company. He previously served as president and as a member of Adolfson & Peterson Construction Company since June 2015, and the Board of Directors and memberGovernors, Colorado chapter of the audit committeeAssociation of the Catholic Foundation of Northern Colorado since September 2015.Certified Fraud Examiners. Mr. DeSplinterPredovich is a Board Leadership Fellow of the NACD. Mr. DeSplinterPredovich was selected to serve on our Board because of his strongextensive experience and knowledge in accounting and financial background and vast experience advising public companies.matters. | Key Skills |
| Key Skills
Finance and Accounting Experience 
Technology Expertise 
Cybersecurity Experience |
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Finance knowledge
Public company advisory experience16
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Committee MembershipRE/MAX Holdings, Inc.
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2021Audit Finance and Investment Proxy Statement
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| Teresa S. Van De Bogart Age: 65 RMAX Director Since: 2016 Committee Membership: Audit, Nominating and Corporate Governance |
Key Skills | Teresa S. Van De Bogart was elected to the Board of Directors in May 2016. Ms. Van De Bogart retired in 2019 as Vice President—Global IT Solution Delivery for Molson Coors Brewing Company, a position she held since 2012. She had been an IT vice president of Molson Coors (and its predecessors) since 2005 establishing a global project management office and leading large-scale global project implementations. She previously served in various other leadership roles at the company including procurement, finance and accounting. Ms. Van De Bogart is a Board Leadership Fellow of NACD. She additionally serves on the Board of Sunflower Bank where she serves as chair of the risk committee and as a member of the compensation committee as well as Craig Hospital Foundation Board where she serves as chair of the nominating and governance committee. She previously served as the board chair for the Colorado Women’s Chamber of Commerce as well as the Women’s Leadership Foundation. Ms. Van De Bogart was selected to serve on our Board because of her information technology and financial background including security trends and risk assessment, and her experience as a senior leader in a global public company. |
Public Company Leadership
Technology Experience
Cybersecurity Knowledge | |
Controlled Company StatusBoard Diversity and its Pending SunsetRefreshment
Currently, RIHI, Inc. (“RIHI”) controlsDave and Gail Liniger founded RE/MAX with the view that anyone can be an entrepreneur, regardless of race, gender, or background. RE/MAX has grown to over 135,000 agents from virtually every walk of life who share a majoritycommitment to helping people realize the dream of the voting power of our outstanding common stock. As a result, we are a “controlled company” under the corporate governance standards of the NYSE. As a controlled company, we are exempt from the NYSE requirements that
a majority ofhomeownership. That commitment to diversity continues today and is reflected in our Board and management team.
The Board aims to have directors with diverse backgrounds, viewpoints, and experiences. To that end, the Board pays special attention to the diversity of Directors consistits members and potential nominees, and the Board believes its oversight capabilities are bolstered by its diverse composition.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 17 |
Gender and Racial Diversity |
| Half of our Board members are women or from racially diverse populations: our Board has five female directors and one Black director. Half of the new members since our initial public offering in 2013 (the “IPO”) are women. Women serve as the Chairs of both our Audit and Nominating and Corporate Governance Committees. The Nominating and Corporate Governance Committee does not have a formal policy regarding diversity, but continually looks for opportunities to maintain and increase the diversity of the Board. |
The Board aims to have diverse mix of tenure on the rules ofBoard, so that the NYSE, and that
we have Nominating and Corporate Governance and Compensation Committees that are composed entirely of independent directors.
DespiteBoard has members with substantial experience with the availability of such exemptions, we have elected to comply with requirements applicable to non-controlled companies. A majority of directors on our Board of Directors and all of the directors on our Nominating and Corporate Governance Compensation Committees are independent under applicable SEC and NYSE standards,Company as well as newer members who bring fresh perspectives to the Company’s corporate governance guidelines. These exemptions do not modify the independence requirements for our Audit Committee and all of our Audit Committee members are independent in accordance with the applicable requirementsBoard. Six of the SEC and NYSE. current members of the Board have joined since our IPO in 2013, including two new members in 2020.
Pending Sunset of Controlled Company Status: We expect RIHI to lose its controlling vote of RE/MAX Holdings, Inc. no later than October 7, 2018, as discussed in our 2017 Annual Report on Form 10-K (the “2017 Annual Report”) under Corporate Structure and Ownership. This termination of RIHI’s controlling status was established at the time of our IPO.
Director Independence
TheOur Board of Directors annually reviewsperiodically assesses the independence of eachits members. For a director and considers whetherto be considered independent, our Board must affirmatively determine that the director does not have any director has adirect or indirect material relationship with us, other than as a director, that could compromise his or her ability towould interfere with their exercise of independent judgment in carrying out histheir responsibilities as a director of the Company. When assessing the materiality of a director’s relationship with us, our Board will consider the question not merely from the standpoint of the director, but also from the standpoint of persons or her responsibilities. organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, social, and familial relationships, among others.
The Board of Directors has determined that Richard Covey, Kathleen Cunningham, Joseph DeSplinter, Roger Dow, Ronald Harrison, Stephen Joyce, Laura Kelly, Christine Riordan, and Teresa Van De Bogart are each an “independent director” under applicable NYSENew York Stock Exchange (“NYSE”) standards and the Company’s corporate governance guidelines, and that none of these directors have any relationships with the Company that would interfere with their exercise of independent judgment in carrying out their responsibilities as a director of the Company.
Dave and Gail Liniger have a close, personal relationship with our CEO, Adam Contos, and his family, which the Linigers and Mr. Contos describe as like immediate family. The Linigers have not, since our IPO, been considered independent directors, due also to their service as officers of the Company. As a result, Mr. and Mrs. Liniger have represented that they intend to recuse themselves from any matters relating to Mr. Contos and his performance, including evaluations of his performance, compensation, and continued employment. In addition, as befitting such relationships, the Linigers and Contoses occasionally give gifts to each other, such as the cost of vacations they spend together, or the Linigers’ contributions to the Contos children’s college funds. These gifts are made from the Linigers’ personal funds and the Board is satisfied that they are intended as gifts in good faith. Because of this, and because there is no incremental cost to the Company, those amounts are not considered income to Mr. Contos or compensation from the Company and are not included in the Compensation Discussion and Analysis, below.
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18 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
Board of Directors Leadership Structure; Separate Board Chair and Chief Executive Officer; Formalized Enhanced Lead Independent Director Role
The Board annually elects a Chair of the Board. Currently the roles of Chair and CEO are split between Mr. Contos, our Chief Executive Officer, and Mr. Liniger, the Chair of the Board, who serves in a non-executive capacity. The Board believes it is important to retain the flexibility to determine whether it is in the best interest of the Company and its stockholders to have the same person serve as both CEO and Chair or whether the roles should be separated based on the circumstances at any given time. Currently, as determined by the Board’s recently-completed, comprehensive succession plan, the roles are split between Mr. Liniger who serveswas most recently re-elected as non-executive Chair of the Board and Mr. Contos, who serves as CEO. This structure positions Mr. Liniger in a non-executive role without significant involvement in the oversight of day-to-day operations or management of the Company while continuing to allow him to provide leadership as a memberFebruary 2021. The independent members of the Board and aselect a founder. The Company expects Mr. Liniger’s role to focus on considerations of long-term strategy for the business.
Mr. Contos has been appointed as sole CEO and PEO effective February 14, 2018. In such role he is the principal management representative of the Company and is responsible for all aspects of oversight of the management team and day-to-day operations of the Company.
The Board initially appointed Richard Covey to serve as Lead Independent Director in 2014. Effective February 22, 2018, the Board enhanced theannually. The role of the Lead Independent Director by amendingis defined in the Company’s bylawsBylaws and by adopting a Lead Independent Director charter, which isare both available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.comwww.remax.com. The purpose of the enhanced authority of Mr. Covey as Lead Independent Director is to coordinate the activities of the independent members of the Board, provide guidance and assistance to the CEO, and to perform such other duties as the Board may determine from time to time.
| Chief Executive Officer | | Lead Independent
Director | | Chair of the Board | |
Enhanced
| Mr. Contos has been CEO and Principal Executive Officer since early 2018. In this role, Mr. Contos is the principal management representative of the Company and is responsible for all aspects of oversight of the management team and day-to-day operations. | | Roger Dow was first elected Lead Independent Director in May 2019 and was most recently reelected in February 2021. The role is described below. | | Mr. Liniger’s role as Chair of the Board allows him to provide leadership as a RE/MAX co-founder and real estate industry veteran and to focus on considerations of long-term strategy for the business. | |
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Lead Independent Director Role |
● Presides over meetings of the independent directors Acts as the primary interface between the Board and the CEO
● Serves as the primary liaison between Company management and the independent members of the Board
● Meets in private sessions with management
| ● Leads, in conjunction with the Compensation Committee, the independent directors’ evaluation of the CEO
● Calls meetings of the Board or of the independent directors Retains such
● Has authority to retain advisors and consultants as he deems appropriate
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Enterprise Risk Management and Board of Directors Role in Risk Oversight
Risk management is primarily the responsibility of the Company’s management. However,management and the Board believes that oversightof Directors oversees an enterprise-wide approach to risk management designed to support the achievement of corporate objectives, including strategic objectives, to improve long-term Company performance and enhance stockholder value. A fundamental part of risk management is oneto understand the specific risks the Company faces and what mitigating steps are being taken, while balancing an appropriate level of its fundamental responsibilities.risk for the Company. The Company’s enterprise risk management (“ERM”) program provides an effective tool for managing risks. As part thereof, annually, management evaluates a comprehensive list of enterprise risks, identifies those that are most significant and ensures that, where possible, adequate risk mitigation strategies are deployed. At least annually, management provides the Audit Committee with a comprehensive review of the Company’s ERM processes, as well as updates on key risks that have been identified and assessed during the year and the accompanying mitigation strategies. Additional risk assessments are performed, as required, for material events such the integration of acquired businesses, and those results are also shared with the Audit Committee. On an annual basis, the Board discusses enterprise risk activities including risk assessment and risk management.
In addition to the Company’s ERM process, the oversight of additional specific risks is performed by committees of the Board. The Audit Committee is primarily responsible for overseeing the quality and integrity of the Company’s financial reporting process, internal controls over financial reporting, and the Company’s compliance programs. programs, and the risks related to each of these areas. Oversight of the Company’s management of cybersecurity risks is also primarily the responsibility of the Audit Committee. The Audit Committee discusses cybersecurity risks with the Chief Compliance Officer and Vice President of Information Technology (who serves as the Company’s Information Security Officer) regularly and receive regular updates on cybersecurity, including results of testing and training, initiatives to continuously improve cybersecurity measures and policies, and implementation of new technologies. The ERM process discussed above includes evaluation
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 19 |
of information technology risks. The Company engages an independent third party to perform various security assessments and information security is part of the Company’s annual training for all employees. The Company has technical, administrative, and physical safeguards in place to help protect against unauthorized access to, use of, or disclosure of data we collect and store.
The Compensation Committee is responsible for reviewingoversees compensation-related risks. The Nominating and Corporate Governance Committee is responsible for overseeingoversees the Company’s corporate governance programs, including the codeCode of ethicsConduct. The Nominating and business conduct.Corporate Governance Committee also oversees management of social and environmental matters. The Finance and Investment Committee oversees risks such as those relating to capital structure and allocation, investment of cash, interest rates, currency, and other financial arrangements. Management regularly reports to the Board and its committees on the risks that the Company may face and the steps that management is taking to mitigate those risks.
Board of Directors Role in Succession Planning
Succession planning is a crucial role of the Board in ensuring the long-term performance of the Company. The Board maintains, and regularlyat least annually evaluates and updates, succession plans for executive officers, other key management positions as well as for the Chair of the Board and Lead Independent Director roles. These plans cover both planned and emergency succession scenarios. The Board, workingExecutive management regularly discusses succession planning with Mr. Liniger, developed and oversaw a plan with respect to the transition of the CEO role from Mr. Liniger to Mr. Contos. As part of that process, Messrs. Liniger and Contos served as Co-CEOs from May 2017 through February 2018, at which time Mr. Contos became the CEO and Mr. Liniger retained the role of non-executive Chair of the Board. In February 2018, the Board, also formalized an enhanced Lead Independent Director roleincluding reviewing development plans for our Lead Independent Director, Mr. Covey. For more details on this enhanced role, see the Section entitled “Board of Directors Leadership Structure; Formalized Enhanced Lead Independent Director Role.” The Board anticipates an ongoing and active role by the independent members of the Board to assist in a smooth transition of the CEO and PEO roles from Mr. Liniger to Mr. Contos.senior non-executive employees who may be candidates for future executive positions.
Our Board’s Commitment to Director Training and Education
Our Board of Directors is committed to continuing director education. As highlighted in their biographical information, above, all ten membersbut two of our Board of Directors have been named as Fellows by NACD. The two newest members are working towards fellowships. For the National Association of Corporate Directors (“NACD”). Earlier in 2018,past several years, the Board has engaged NACD for annual customized training sessions for all members attended amembers. During 2020, the customized training session by NACD that focused on strategic growth by and successful integration of acquisitions. Previous sessions have covered topics such as building the board as a strategic asset, company culture, shareholderstockholder engagement, communication, mergers and acquisitions, and transitioning from a controlled company. During 2016 allAll then-current members attended a custom NACD Advanced Director Professionalism training session. For more details on our anticipated October 2018 transition from being a controlled company, seeeach of these sessions the Section entitled “Controlled Company Status and its Pending Sunset”.past two years.
Board of Directors Evaluation Process
The Board, under the direction of the Nominating and Corporate Governance Committee, conducts an annual assessment of the Board, its committees, and its members. The timing of the assessment may vary from year to year, but occurs approximately once per year. Each director is asked to evaluate the performance of the Board and the committees on which he or she serves. In order to encourage directors to speak candidly, the results of the evaluationsresponses to evaluation questions are submitted tocollected by the Company’s counsel or an outside consultant, who provides aggregated responses that protect the anonymity of individual ratings and comments. Each Committeecommittee discusses its own assessment results and the Nominating and Corporate Governance Committee reviews all results and reports the results to the Board. The Nominating and Corporate Governance Committee also oversees an evaluation of the skills, background, and experience of each Board member to ensure an appropriate mix of expertise on the Board.
Our Classified Board
Our Board is divided into three classes, with each member serving a three-year term. Our Board believes that this structure continues to be appropriate. Our Board believes that a classified Board promotes stability, continuity, and Committee Meetings; Annual Meeting Attendance
During 2017, our Board held ten meetings, anda focus on the independent directors held an additional ten meetings. The Board’s Audit Committee held nine meetings, the Compensation Committee held five, and the Nominating and Corporate Governance Committee, four. In addition, a special committee was formed, as discussed under “Ad Hoc Committees” below. The special committee held 14 meetings during 2017. All directors attended at least 75%long-term interests of the total number of meetings of theCompany and its stockholders and that three-year terms enhance Board and committees on which theyindependence.
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20 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
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serve, including independent director meetings, in the case of those directors. When the Board meets from time to time in executive sessions of independent directors, Mr. Covey, the Lead Independent Director, presides over such meetings.
We encourage all directors to attend our annual meetings of stockholders. All of our directors attended the 2017 annual meeting of stockholders. However, we have no formal policy with respect to director attendance at annual meetings of stockholders.
Board Committees and Meetings
During 20172020, our Board of Directors had the following standing committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Our Board of Directors has adopted written charters for each of these committees, which are available on our investor relations website, accessible through our principal corporate website at www.remax.com. The content of our website is not incorporated in this proxy statement. In February 2018 the Board of Directors established aCommittee, and Finance and Investment Committee. From time to time, the Board may also establish committees for special limited purposes.
Audit Committee
The Audit Committee is responsible for, among other matters: (i) appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; (ii) discussing with our independent registered public accounting firm its independence from our management; (iii) reviewing with our independent registered public accounting firm the scope and results of their audit; (iv) approving all audit and permissible non-audit services toBoard met 12 times in 2020. The tables below summarize some information about each committee. More information about each committee can be performed by our independent registered public accounting firm; (v) overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; (vi) reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; (vii) establishing procedures for the confidential and/or anonymous submission and review of concerns regarding questionable accounting, internal controls, auditing matters, or anything else that appears to involve financial or other wrongdoing; and (viii) reviewing and approving related party transactions. Since 2017, the Audit Committee has alsofound in each committee’s charter, which have been responsible for reviewing and approving our quarterly reports for the first, second, and third quarters; the full Board of Directors approves our annual report following the fourth quarter. The Board has delegated authority to the Audit Committee to approve regular quarterly dividends, within parameters establishedadopted by the Board.
Our Audit Committee currently consists of Kathleen Cunningham (Chair), Joseph DeSplinter, Ronald Harrison,Board and Teresa Van De Bogart. Our Board of Directors has affirmatively determined that each of the Audit Committee members meets the definition of an “independent director” for purposes of servingare reviewed annually. The charters are available on an Audit Committee under Rule 10A-3 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) and NYSE rules.
Our Board of Directors has determined that Kathleen Cunningham and Joseph DeSplinter each qualify as an “Audit Committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
Compensation Committee
our investor relations website, accessible through our principal corporate website at www.remaxholdings.com. The Compensation Committee is responsible for, among other matters: (i) reviewing key employee compensation goals, policies, plans, and programs; (ii) reviewing and approving the compensationcontent of our directors and executive officers; (iii) oversight of compensation of other officers; (iv) administering the Company’s equity compensation program; (v) reviewing and approving employment agreements and other similar arrangements between us and our officers; and (vi) appointing and overseeing any compensation consultants.
The Compensation Committee currently consists of Roger Dow (Chair), Richard Covey, and Christine Riordan. The Board has affirmatively determined that each of the Compensation Committee members meets the definition of an independent director for purposes of serving on the Compensation Committee under Rule 10C-1 of the Exchange Act and NYSE rules.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committeewebsite is responsible for, among other matters: (i) identifying and evaluating potential candidates for Board membership and making recommendations to the Board regarding qualified individuals to become members of our Board of Directors; (ii) overseeing the organization of our Board of Directors to discharge the Board’s duties and responsibilities properly and efficiently; (iii) developing and recommending to our Board of Directors a set of corporate governance guidelines and principles; (iv) assisting the Boardnot incorporated in developing, evaluating, and updating succession plans for key leadership roles, both in Company management and at the Board level; and (v) overseeing the Board’s annual self-evaluation.this proxy statement.
| AUDIT COMMITTEE | | Our Audit Committee is fully independent under applicable NYSE standards and Rule 10A-3 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”). Our Board of Directors has determined that Kathleen Cunningham and Joseph DeSplinter each qualify as an “Audit Committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. |
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| Meetings: 8 | | |
| | Chair: Kathleen Cunningham | | |
| | Other Members: | | |
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| Key Responsibilities: | | |
| ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; |
| ● discussing with our independent registered public accounting firm its independence from our management; |
| ● reviewing with our independent registered public accounting firm the scope and results of their audit; |
| ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
| ● overseeing the financial reporting process and discussing the interim and annual financial statements that we file with the Securities Exchange Commission (“SEC”) with management and our independent registered public accounting firm; |
| ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; |
| ● monitoring the implementation and impact of new accounting policies; |
| ● establishing procedures for the confidential and/or anonymous submission and review of concerns regarding questionable accounting, internal controls, auditing matters, or anything else that appears to involve financial or other wrongdoing; |
| ● reviewing and approving related party transactions; and |
| ● overseeing the Company's efforts to mitigate cybersecurity risks. |
| The Audit Committee reviews our annual reports and makes recommendations to the full Board about its approval. Since 2017, the Audit Committee has reviewed and approved our quarterly reports and earnings releases for the first, second, and third quarters. After approving the first dividend each year and determining the anticipated dividend for the remainder of the year, the Board generally delegates authority to the Audit Committee to approve the subsequent quarterly dividend for that year, within parameters established by the Board. |
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 21 |
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| COMPENSATION COMMITTEE | Our Compensation Committee is fully independent under applicable Exchange Act rules and NYSE standards. |
| 
| Meetings: 4 | |
| | Chair: Roger Dow | |
| | Other Members: | |
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| Key Responsibilities: |
| ● reviewing and approving the compensation of our directors and executive officers; |
| ● overseeing compensation of other officers; |
| ● reviewing key employee compensation goals, policies, plans, and programs; |
| ● administering the RE/MAX Holdings, Inc. Omnibus Incentive Plan; |
| ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers; |
| ● reviewing the Compensation Discussion and Analysis and Compensation Committee Report contained in this proxy statement; and |
| ● engaging any compensation consultants. |
| The Compensation Committee’s role is discussed further below in the Compensation Discussion and Analysis. |
| NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | Our Nominating & Corporate Governance Committee is fully independent under applicable Exchange Act rules and NYSE standards. |
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| Meetings: 5 | |
| | Chair: Christine Riordan | |
| | Other Members: | |
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| Key Responsibilities: |
| ● identifying and evaluating potential candidates for the slate of Directors nominated for election by stockholders at annual meetings and vacancies occurring on the Board from time to time and making recommendations to the Board regarding qualified individuals to be members of our Board of Directors; |
| ● overseeing the organization of our Board of Directors to discharge the Board’s duties and responsibilities properly and efficiently; |
| ● developing and recommending to our Board of Directors a set of corporate governance guidelines and principles and reviewing portions of our code of conduct related to corporate governance; |
| ● assisting the Board in developing, evaluating, and updating succession plans for key leadership roles, both in Company management and at the Board level; |
| ● overseeing the Company’s management of environmental, social, and governance (ESG) issues; and |
| ● overseeing the Board’s annual self-evaluation. |
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22 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
| FINANCE AND INVESTMENT COMMITTEE | |
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| Meetings: 4 | |
| | Chair: Joseph DeSplinter | |
| | Other Members: | |
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| Key Responsibilities |
| ● assisting the Board with oversight, approval, and recommendations regarding capital structure and capital strategy, investment of cash, management of financial risks such as interest rate and currency risks and |
| ● overseeing management of tax issues, including tax receivable agreements. |
The Nominating and Corporate Governance Committee currently consists of Christine Riordan (Chair), Kathleen Cunningham, and Ronald Harrison. The Nominating and Corporate Governance Committee has been fully independent since May 2016.
Finance and Investment CommitteeAnnual Meeting Attendance
The Board established the Finance and Investment Committee in February 2018. The Finance and Investment Committee members are Joseph DeSplinter (Chair) and Kathy Cunningham. The primary purposesIn 2020, most directors attended 100% of the committee are to assist the Board with oversight, approval, and recommendations regarding the Company’s capital structure and capital strategy, investment of cash, interest rate and currency risk management, tax planning (including tax receivable agreements), and other financial arrangements.
Ad Hoc Committees
Pursuant to the Company’s bylaws and Corporate Governance Guidelines, the Board may from time to time establish ad hoc committeesmeetings of the Board.
In October 2017, the Board formed an independent special committee (the “Special Committee”), aided by external counsel, to conduct a complete and independent internal investigation into certain matters including previously undisclosed transactions between Mr. Liniger and Mr. Contos. The transactions included a loan of personal funds from Mr. Liniger to Mr. Contos to fund the purchase of a personal residence and a number of other matters. The Special Committee investigation delayed the publication of certain of the Company’s periodic filings of financial information until the conclusion of the investigation in February 2018. Subsequent thereto, the Company concluded it did not have an effective risk assessment process to identify and assess the financial reporting risks related to benefits provided by Mr. and Mrs. Liniger, including those described above and consequently did not have effective controls and training of personnel over the identification and communication of related party transactions to financial reporting personnel, management and the Board, as appropriate, to identify and evaluate recognition, measurement and disclosure of such transactions. This resulted in a material weakness in internal control over financial reporting. The Board and the Company’s senior leadership team are incommittees on which they serve and no directors attended less than 90% of the processtotal number of implementing measures to remediate this material weakness. See the Company’s 2017 Annual Report, filed with the SEC on March 15, 2018 for more details regarding the Special Committee and the Company’s plan to remediate the material weakness in internal control over financial reporting.
Director Nomination Process
The Nominating and Corporate Governance Committee is responsible for evaluating potential candidates and making recommendations tomeetings of the Board and committees on which they serve.
We encourage all directors to attend our annual meetings of Directors with respect to candidates to be nominated to serve as directors. The Nominating and Corporate Governance Committee ensures that candidates meet qualifications necessary under SEC rules or NYSE standards. Among the qualifications the Nominating and Corporate Governance Committee may consider are personal and professional integrity; exceptional ability and judgment; broad experience in business, finance, or administration; familiarity with the real estate or franchising industries; ability to serve the long-term intereststockholders. All of our stockholders; sufficient time to devote todirectors and nominees attended the 2020 annual meeting of stockholders. The Annual Meeting will coincide with a regularly scheduled meeting of the Board duties; and, ability to provide continuing service and promote stability.
The Role of Diversity in Director Nominations
The Board believesbecause the Annual Meeting will be completely virtual, we expect that it is important that the Board be comprised of directors with diverse backgrounds, viewpoints, and experiences. To that end, the Board pays special attention to the diversity of itsall members and nominees will attend the Board believes its oversight capabilities are bolstered by its diverse composition. Four of our ten directors are female and women serve as the Chairs of both our Audit and Nominating and Corporate Governance Committees. The Nominating and Corporate Governance Committee doesmeeting virtually. We do not have a formal policy regarding diversity, but continually looks for opportunitieswith respect to maintain and increase the diversitydirector attendance at annual meetings of the Board.stockholders.
Director Nomination Process
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Nominating and Corporate Governance Committee Responsibilities: The Nominating and Corporate Governance Committee is responsible for evaluating potential candidates and making recommendations to the Board of Directors with respect to candidates to be nominated to serve as directors. The Nominating and Corporate Governance Committee ensures that candidates meet qualifications necessary under SEC rules or NYSE standards. | Factors Considered by the Committee: Among the qualifications the Nominating and Corporate Governance Committee may consider are: ● personal and professional integrity; ● exceptional ability and judgment; ● broad experience in business, finance, or administration; ● familiarity with the real estate, mortgage, or franchising industries; ● executive leadership experience; ● service on other boards; ● ability to serve the long-term interest of our stockholders; and ● sufficient time to devote to the Board duties. |
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 23 |
Director Recommendations and Nominations by Stockholders
The Nominating and Corporate Governance Committee welcomes the Company’s stockholders to nominate candidates for Board membership. The committeeCommittee will consider any such nominee in the same manner in which it evaluates other potential nominees, so long as the recommendation is submitted in accordance with the Company’s bylawsBylaws and the committee’sCommittee’s charter. A summary of thesethe requirements is set forth below.
The nomination should contain the following information:
the candidate’s name, age, business address, and home address;
the candidate’s biographical information, including educational information, principal occupation or employment, past work experience (including all positions held within the past five years), personal references, and service on boards of directors or other positions the candidate currently holds or has held during the past three years;
the class and number of shares of the Company the candidate beneficially owns;
any potential conflicts of interest that may prevent or otherwise limit the candidate from serving as an effective Board member; and
any other pertinent information about the candidate and his or her qualifications.
the name and record address of the stockholder making the recommendation; and
the class and number of shares of the Company beneficially owned by the stockholder making the recommendation and the period of time the shares have been held.
Stockholder nominations should be submitted to the Company’s Corporate Secretary at the Company’s headquarters. Stockholder nominations may be made at any time. However, in order for a candidate to be included in the slate of director nominees for approval by stockholders in connection with a meeting of stockholders and for information about the candidate to be included in the Company’s proxy materials for such a meeting, the stockholder must submit the information set forth above and other information reasonably requested by the Company within the timeframe set forthnominating candidates is below under “Information Regarding Stockholder Proposals.”
Stockholder Engagement
We value the opportunity to engage with our stockholders and gain insight into their perspectives on our business strategy, governance, and compensation practices. Executives and management from the RE/MAX Holdings investor relations team meet regularly with stockholders on a variety of topics. In late 2018, a cross-functional group from our finance, legal, and investor relations teams initiated an expanded investor outreach to gather feedback on key strategic initiatives, corporate governance matters, executive compensation, and other topics of interest to our stockholders. We have continued these conversations with investors, including in advance of the 2020 annual meeting of stockholders. We also regularly engage with proxy advisory firms. Feedback received during these conversations was communicated to and discussed by the full Board and will help to inform our ongoing decision-making on our governance, compensation, and other practices.
Communication with the Board of Directors
We believe communication between the Board and our stockholders is an important aspect of corporate governance. Any stockholder or other interested party who would like to communicate with the Board of Directors, the Chair, the Lead Independent Director, the independent directors as a group, or any specific member or members of the Board of Directors should send such communications to the attention of our Corporate Secretary at 5075 S. Syracuse St., Denver, CO 80237.80237 or legal@remax.com. Communications should contain instructions regarding the Directors for whom the communication is intended. In general, such communication will be, depending on the nature of the communication, either forwarded or periodically presented to the intended recipients. However, we may, in the Corporate Secretary may, in hisSecretary’s discretion, decline to forward any communications that are abusive, threatening, or otherwise inappropriate.inappropriate, or may summarize communications as appropriate.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves or in the past year has served as a member of the Board of Directors or Compensation Committee of any other entity that has one or more executive officers serving on our Board of Directors.
Code of Business Conduct and Code of Ethics
We have adopted a code of ethics and business conduct applicable to all employees and a supplemental code of ethics applicable to our principal executive, financial, and accounting officers and all persons performing similar functions. A copy of each code is available on our investor relations website, accessible through our principal corporate website at www.remax.com. Any amendments to either code, or any waivers of their requirements, that apply to our directors or executive officers will be disclosed on our investor relations website.
Corporate Governance Guidelines
We have adopted corporate governance guidelines that provide a framework for corporate governance. The corporate governance guidelines address, among other matters, selection of directors, director independence, director responsibility, director access to management, director compensation, information about the Board and its committees, director orientation and continuing education, management succession, and evaluation of the Board. The corporate governance guidelines are available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.comwww.remax.com.
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24 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
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COMPENSATION DISCUSSION AND ANALYSIS
Named Executive OfficersCompensation Roadmap
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1 | | | Our Named Executive Officers | |
| | | Our five Named Executive Officers for 2020 | 26 |
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2 | | | Overview and Philosophy of our Executive Compensation Program | 27 |
| | | Compensation philosophy and an overview of decisions on compensation practices | |
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3 | | | Compensation Best Practices | 28 |
| | | Examples of practices we follow and some that we avoid | |
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4 | | | Performance Highlights | 28 |
| | | Our key business achievements in 2020 | |
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5 | | | Elements of Executive Compensation | 29 |
| | | Explanation of our primary components of executive compensation | |
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6 | | | Peer Groups | 32 |
| | | List of Peer companies used in 2020 and new group to be used in 2021 | |
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7 | | | Other Compensation Policies | 33 |
| | | Overview of stock ownership guidelines and other compensation policies | |
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8 | | | 2020 Say-on-Pay Vote and Stockholder Outreach | 34 |
| | | Discussion of last year’s say-on-pay vote | |
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 25 |
1 | Our Named Executive Officers |
In this Compensation Discussion and Analysis, we provide information on how we compensate our Named Executive Officers. During 2017,2020, five individuals were designated by our Board of Directors as executive officers and they are referred to as our “Named Executive Officers” for 2017:2020:
| Named Executive Officers | Biography: |
| 
| Adam M. Contos is our Chief Executive Officer (“CEO”) and principal executive officer, a position he has held since February 2018. Prior to serving as CEO, Mr. Contos served as Co-Chief Executive Officer alongside Dave Liniger beginning in May 2017. During his more than 15 years at RE/MAX, Mr. Contos has held a variety of leadership positions. He served as Chief Operating Officer from January 2016 to May 2017, as Senior Vice President, Marketing, from February 2015 through January 2016, as Vice President, Business Development, from February 2014 until February 2015, as Vice President, Region Development, from August 2013 through February 2014, and as Regional Vice President from 2005 through August 2013. Mr. Contos is a Board Leadership Fellow of NACD and serves on the Board of the International Franchise Association. |
| Adam M. Contos Age: 49 Position: Chief Executive Officer and principal executive officer | |
| 
| Nicholas R. Bailey is the RE/MAX Chief Customer Officer, a position he has held since he joined the Company in September 2019. Mr. Bailey has over 23 years of real estate experience. He previously worked for RE/MAX from 2001 to 2012 leading growth and development for several RE/MAX regions. He left RE/MAX for approximately seven years, first becoming Senior Vice President of Strategic Partnerships at Market Leader from 2012 through its acquisition by Trulia in 2013. Following the acquisition, he served as a Vice President of Trulia and, following Zillow’s acquisition of Trulia in 2015, as a Vice President of Zillow. Then, Mr. Bailey served as President and CEO of Century 21 Real Estate, LLC from August 2017 to March 2019. |
| Nicholas R. Bailey Age: 46 Position: Chief Customer Officer | |
| 
| Karri R. Callahan is our Chief Financial Officer, a position she has held since March 2016. From January 2016 to March 2016 she served as Co-Chief Financial Officer. Ms. Callahan joined RE/MAX Holdings in April 2013 as Senior Manager of SEC Reporting and was promoted to Vice President, Corporate Controller in June 2014. She served as the Company’s Acting Chief Accounting Officer from November 2014 to January 2015 and as Acting Chief Financial Officer from December 2014 through January 2015. Prior to joining the Company, Ms. Callahan worked at Ernst & Young, LLP. |
| Karri R. Callahan Age: 43 Position: Chief Financial Officer | |
| 
| Serene M. Smith has served as Chief of Staff and Chief Operating Officer since January 2019. She served as Chief Operating Officer since May 2017. Prior to becoming Chief Operating Officer, Ms. Smith served as Senior Vice President, Financial Planning and Business Analytics from January 2016 to May 2017. From April 2014 to December 2015, Ms. Smith served as Vice President, Financial Planning and Analysis and was Vice President, Operational Controller, from April 2010 to April 2014. She has served in various other capacities since joining RE/MAX in 2006. |
| Serene M. Smith Age: 42 Position: Chief of Staff and Chief Operating Officer | |
| 
| Ward M. Morrison has served as President of Motto Franchising, since Motto was launched in the fall of 2016. Prior to leading Motto Franchising, Mr. Morrison served the Company as Vice President, Region Operations from 2013 to 2016, as Region Vice President from 2011 to 2013, and in various other roles since joining the Company in 2005. Due to the continued growth of Motto Mortgage and its increasing importance to the overall results of the Company, the Board designated Mr. Morrison as an executive officer in February 2020. |
| Ward M. Morrison Age: 53 Position: President of Motto Franchising | |
Adam Contos, Co-CEO and, before that, Chief Operating Officer, during 2017
David L. Liniger, Chair, Co-Founder and Co-CEO during 2017
Karri R. Callahan, Chief Financial Officer
Serene M. Smith, Chief Operating Officer
Geoffrey D. Lewis, Former President
Overview of our Executive Compensation Program
The philosophy of our executive compensation program is that executive compensation should aim to align the goals of management with the interests of the Company and its stockholders, balance rewards for both short-term performance and longer-term value creation, incentivize and reward high performance without encouraging imprudent risk taking, and attract and retain talented leaders. This philosophy drives all aspects of officer (including Named Executive Officer) compensation, including our base pay guidelines, bonus structure, and grants of long-term equity-based compensation awards.
Role of the Compensation Committee
The Compensation Committee determines the compensation of the CEO and other executive officers and oversees the compensation of other officers and employees. The Compensation Committee also administers the Company’s equity compensation program.
Role of the CEOs
Mr. Liniger served as our CEO through May 2017, and for the remainder of 2017, Mr. Liniger and Mr. Contos served as Co-CEOs. The majority of actions taken with respect to 2017 Named Executive Officer compensation were taken during the time that Mr. Liniger was the sole CEO. Our CEO, using information from the Human Resources department and the compensation consultants discussed below, recommends to the Compensation Committee the amount and form of compensation for executive officers other than himself. His recommendation for each officer is based on his evaluation of Company performance and individual performance, relative to goals that the Board and Company management have set.
Mr. Liniger Did Not Receive Compensation
Since our IPO in October 2013, Mr. Liniger, our Chair and Co-Founder, who served as CEO through May 2017 and as Co-CEO for the remainder of the year, has not received compensation for his service to the Company either as an officer or director, other than benefits that are similar to those offered to other officers and employees.
Role of Compensation Consultants
The Compensation Committee, pursuant to its charter, has the authority to engage advisers to assist the committee in carrying out its duties. The Compensation Committee currently engages Dynol Consulting (“Dynol”) as compensation consultants. The Committee has previously engaged Compensia, Inc. (“Compensia”), and Haigh & Company (prior to the primary individual engaged by the committee leaving Haigh & Company to join Dynol). All compensation consultants are independent under NYSE standards. They provide compensation data on other companies and recommendations on executive compensation, including bonuses and equity grants. Compensia, Dynol, and Haigh & Company have also provided data and recommendations regarding director compensation.
In 2016, the Company, working with Haigh & Company, developed a peer group which the Company has used for compensation starting with in fiscal year 2017. Dynol and Haigh & Company have also provided information from proprietary surveys of salary data and other sources. From 2014 through 2016, Company management, with input from Compensia and under the direction of the Compensation Committee, used a different peer group.
The 2014 peer group was used for reviewing compensation data and assisting in determining compensation for executive officers and other Company officers through the year ended December 31, 2016. Since then, 2014 peer group data has been supplemented with the 2016 peer group data to be used for compensation decisions beginning with the current fiscal year. The compensation consultants provided information about the peer companies, which Haigh & Company supplemented with proprietary
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26 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
15
salary survey data for the 2016 peer group. The Compensation Committee used such information in determining all elements of executive officer compensation. The Company, however, did not target specific positioning relative to these peers.
2 | Overview and Philosophy of our Executive Compensation Program |
2016 Peer GroupOur philosophy is that executive compensation should aim to align the goals of management with the interests of the Company and its stockholders and attract and retain talented executives with the skills to help the Company achieve its goals. Toward these ends, we seek to provide a competitive level of compensation that balances rewards for both short-term performance and long-term value creation, promotes accountability, incentivizes and rewards both corporate and individual performance without encouraging imprudent risk taking, and attracts and retains talented leaders. This philosophy drives all aspects of officer (including Named Executive Officer) compensation, including our base pay guidelines, annual incentive, and grants of long-term equity-based compensation awards. A substantial portion of each of our executive officer’s compensation is at risk.
| 2014 Peer Group
|
Realogy Holding Corp.
| Dunkin’ Brands Group, Inc.Role of the
Compensation
Committee
| Domino’s Pizza Inc.
| Yum! Brands Inc.Role of
the CEO
| Choice Hotels International Inc.
|
Marriott International Inc.The Compensation Committee is responsible for all aspects of compensation of executive officers and Board members and oversees the compensation of other officers and employees. This includes setting appropriate corporate and individual goals for the CEO and other executive officers and reviewing their performance, setting their base salaries, short- and long-term incentive compensation, and approving any other compensation or benefits, reviewing and approving compensation policies and programs generally. In determining the amount and mix of compensation, the Committee reviews the compensation levels of the executive officers relative to a group of peers. As part of this review the Compensation Committee considers the financial and operational performance of the Company.
| | CBRE Group Inc.Mr. Contos, working with our Human Resources department and using information from the compensation consultant discussed below, recommends to the Compensation Committee the amount and form of compensation for officers other than himself. His recommendation for each officer is based on his evaluation of Company performance and individual performance, relative to goals that the Board and Company management have set.
|
Jones Lang LaSalle
| Stockholder
Engagement | | Role of
Compensation
Consultants | 
|
We value the opportunity to engage with our stockholders and gain insight into their perspectives on our compensation program and other elements of our business strategy and governance practices. We hold an advisory vote on executive compensation (“say-on-pay”) every three years in accordance with the vote of our stockholders at our “say on frequency” vote in 2017. The Company values input from stockholders on executive compensation and other matters at any time. As discussed above, we meet regularly with stockholders on a variety of topics, including executive compensation. | | The Compensation Committee, pursuant to its charter, has the authority to engage advisers to assist the Committee. The Compensation Committee previously engaged Dynol Consulting (“Dynol”) as compensation consultant. In September 2020, the Compensation Committee ended the Dynol engagement and engaged Meridian Compensation Partners, LLC (“Meridian”). Both Dynol and Meridian are independent under NYSE standards. The consultants report directly to the Compensation Committee. The role of the consultants is to provide advice and data to the Compensation Committee and assist in designing and administering executive compensation programs. The consultants also advise the Compensation Committee on director compensation. |
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2021 Proxy Statement | RE/MAX Holdings, Inc. | Carrols Restaurant Group, Inc.
Einstein Noah Restaurant Group, Inc.
G&K Services Inc.
Heidrick & Struggles International Inc.
Intrawest Resorts Holdings, Inc.
Kforce Inc.
Krispy Kreme Doughnuts, Inc.
Morgans Hotel Group Co.
Natural Grocers by Vitamin Cottage, Inc.
Noodles & Company
Popeyes Louisiana Kitchen, Inc.
Potbelly Corporation
Red Robin Gourmet Burgers, Inc.
Regis Corporation
Ruth’s Hospitality Group, Inc.
Sykes Enterprises, Inc.
Town Sports International Holdings, Inc.27
|
The 2016 peer group is comprised
3 | Compensation Best Practices |
We have adopted common best practices that are consistent with our compensation philosophy and serve the long-term interests of franchisors and real-estate related companies. In addition toour stockholders. These include the 2016 peer group, Haigh & Company has provided information fromfollowing:
| | | | |
| What we do: | | 
| What we don’t do |
● Our short-term incentive award goals are objective and tied to key Company financial and strategic performance metrics. ● Most executive compensation is “at-risk” and performance driven. ● The majority of long-term incentive awards for executive officers have performance-based vesting. ● Payout of long-term incentive (“LTI”) awards based on total shareholder return (“TSR”) is capped at the target level if TSR is negative. ● Multi-year targets for LTI performance. ● We compare executive compensation targets against a Relevant Peer Group to ensure market competitiveness. ● We have stock ownership guidelines. ● Our LTI program encourages retention of key personnel through long-term vesting. ● We consider our Company’s “MORE” values when rewarding annual incentives. | | ● No excessive perquisites. ● We do not have employment agreements with any executive officers. ● We do not have single-trigger change of control provisions in equity awards. ● Our Insider Trading Policy prohibits hedging or pledging Company stock without Board or Chief Compliance Officer approval. ● We do not pay accumulated dividends on restricted stock units until vesting. |
Despite a proprietary database of companies with revenue similar to ours. In selecting the 2014 peer group,challenging global economic environment, the Company performed well in 2020.
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$266.0M Revenue | | | $92.6M Adjusted EBITDA1 | | | $64.7M Free Cash Flow1 |
RE/MAX Holdings continues to focus on growing its RE/MAX and Compensia sought public companiesMotto Mortgage brands, thereby increasing revenue and ultimately the Company’s profitability and cash flow.
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Revenue ($ in millions) | Adjusted EBITDA1 ($ in millions) | Free Cash Flow1
($ in millions) |
| 
| 
|
1. Adjusted EBITDA and free cash flow are non-GAAP measures Please see the Appendix on page 56 of this Proxy Statement for definitions of these terms and reconciliation with similar revenue or market capitalization, manythe most directly comparable GAAP measures.
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Elements of Executive Compensation
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5 | Elements of Executive Compensation |
The compensation of our Named Executive Officers consists primarily of base salary, cash bonus,short-term incentive, and long-term equity incentive compensation. Mr. Liniger did not receive
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Compensation Element | Key Features | Primary Objectives |
Base Salary
(Fixed) | Factors considered in determining Base Salary: ● the recommendation of the CEO, ● market data provided by the Company’s compensation consultants on base salary paid to similar officers at other companies, and ● each officer’s experience and performance. | Attract & Retain quality officers who will drive the Company’s success |
Short-Term Incentive
(At-Risk) | Each executive officer’s short-term incentive target level is based on a percentage of base salary and the actual payout is based on Company and individual performance. | Motivate & Reward officers for meeting and exceeding personal and corporate objectives. |
Long-Term Equity Incentive Compensation
(At-Risk) | Long-term incentive grants for executive officers are restricted stock units, 60% of which have performance-based vesting conditions and 40% of which are time-based. | Incentivize long-term value creation by aligning each officer’s interests with those of stockholders. Reward Company performance. Retain key personnel through long-term vesting. |
Perquisites and Other Benefits (Fixed) | The Company offers a comprehensive benefit package to all full-time employees designed to attract and retain talented employees at all levels. | Attract & Retain talented employees at all levels. |
Pay Mix
CEO: base salary 30%, bonus 18%, equity grant 51%, other 1%. Average of other NEOs: base salary 30%, bonus 10%, equity grant 59%, other 1%
The tables above show the pay mix for his rolethe CEO and the Named Executive Officers as an officer or directora group for 2020 based on the actual bonus paid and this compensation program did not apply to him.grant date fair value of equity grants (as reflected in the Summary Compensation Table below).
Base Salary
BaseEach Named Executive Officer receives a base salary, provideswhich is a fixed amountcomponent of cashtheir compensation. The Company aims to payPaying a competitive base salary that will attractis a crucial aspect of attracting and retain quality officersretaining qualified leaders who will drive the Company’s success. The Company’s philosophy isCompany aims to pay experienced, seasoned officers near the midpoint of the established base salary range for that position, based on data from its compensation consultants. Base salary for each of the executive officers other than Mr. Liniger who elected not to receive salary, bonus, or equity compensation, is determined by the Compensation Committee taking into account the recommendation of the CEO (for executive officers
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 29 |
other than the CEO), market data provided by the Company’s compensation consultants on base salary paid to similar officers at other companies, and each officer’s performance, in order to determine a base salary level that is competitive and commensurate with the performance, duties, and experience of each executive officer. The CEO and Compensation Committee generally evaluate base salary for executive officers annually.annually taking into account such as changes in the executive’s role or responsibilities, the executive’s experience and job performance, market performance, and other factors deemed appropriate by the Compensation Committee. In 2020, Mr. Contos’s base salary was increased from $650,000 to $700,000, effective January 1, 2020. Mr. Bailey’s and Ms. Callahan’s base salaries were increased from $350,000 to $360,000 and Ms. Smith’s was increased from $330,000 to $340,000, all effective as of March 1, 2020. Mr. Morrison was named an executive officer by the Board in February 2020 and his base salary was increased to $275,000 effective March 1, 2020.
CashBonusAnnual Incentive
We use annual cash bonusesincentives to motivate and reward executive officers for meeting and exceeding personal and corporateCompany objectives. For Named Executive Officers, the annual incentive paid with respect to 2020 was one-half cash and one-half Class A common stock of the Company that was fully vested upon grant.
We design our cash bonusesthe annual incentive so that, at the target bonus level, approximately one third of each executive officer’s total cashshort-term compensation for the year (i.e., such individual’s base salary plus cash bonus) would be comprised of a cash bonus thatannual incentive) comprises the annual incentive, which depends on individual and Company performance over the prior year. In 2017,Each year, the Compensation Committee adopts an annual short-term plan (each such plan, an “Annual Plan”) pursuant to the 2017 RE/MAX Performance Evaluation andOmnibus Incentive Plan. Pursuant to the Annual Plan for 2020 (the “2017 Bonus“2020 Annual Incentive Plan”), each of our Named Executive Officers other than Mr. Liniger, was eligible for a bonusan annual incentive based on a percentage of such officer’s base salary.
Cash bonus awardAward amounts for executive officers under the 2017 Bonus2020 Annual Incentive Plan are based on both Company and individual performance. For Mr. Contos, Ms. Callahan, and Ms. Smith,executive officers, the calculation is a two-step process. First, each officer’s maximum bonus pursuant to the 2017 Bonus Plana level is calculated for each officer based on Company performance. ThatThe Compensation Committee then adjusts that amount is then multiplied by anup or down based on factors such as individual performance, score, expressed as a percentage, to determine the final bonus figure. A portionattainment of Mr. Lewis’s bonus is a corporate
bonus based ongoals, and living our “MORE” values discussed above. If Company performance andis below a portionthreshold level set by the Compensation Committee, no annual incentive is a “kicker” bonus that is tied to agent count and RE/MAX and Motto franchise sales.paid.
For Company performance, the Compensation Committee established a measurement called Bonus Adjusted EBITDA1, which is the Company’s budgeted Adjusted EBITDA, excluding bonus expense, and including such other adjustments that the Compensation Committee deems appropriate.1 We believe Adjusted EBITDA reflects the performance of our business and facilitates a meaningful evaluation of operating results on a comparable basis with historical results. The Compensation Committee sets levels for the threshold, bonus, target, bonus, and maximum bonusstretch annual incentive for each executive officer based on Bonus Adjusted EBITDA amounts. For Mr. Contos, Ms. Callahan and Ms. Smith, the Compensation Committee set threshold bonus under the 2017 Bonus Plan at 25%as a percentage of base salary, target bonus at 50% of base salary, and maximum bonus at 75% of base salary. For Mr. Lewis’s corporate bonus, the Compensation Committeeas set threshold at 10% of base salary, target at 20% of base salary and maximum bonus at 30% of base salary. This amount determined by Company performance is then multiplied by the individual performance percentage score to determine the total bonus amount. For Mr. Lewis’s kicker bonus, threshold bonus is 17.5% of base salary, target bonus is 35% of base salary, and maximum bonus is 52.5% of base salary.forth below.
A | | | |
Annual Incentive Levels (as Percentage of Base Salary) |
| Threshold | Target | Stretch |
CEO | 50% | 100% | 150% |
Other NEOs | 25% | 50% | 75% |
For individual performance, the CEO, working with our Human Resources department, prepares an incentive plan for each executive officer.officer (other than himself). The Compensation Committee then reviews and revises these plans as it deems appropriate, before approving them. Following the end of the year, the Compensation Committee evaluates the officer’s performance against such incentive plan to determine the individual performance score used in making the bonusannual incentive determination. Individual performance measures and results for each Named Executive Officer are discussed below.
In addition to the plan-based bonus,annual incentive, the Compensation Committee has discretion to pay out additional bonuses to Named Executive Officers based on special projects or other exceptional circumstances. Plan-based cash bonuses are paid annually, based oncircumstances and has authorized the prior year’s performance, andCEO to make project-based bonuses may be paidto other Company officers or personnel at any time.
Early in the COVID-19 pandemic, the Company’s primary focus was on an irregular basis,its people. The Company substantially reduced its expenses, while avoiding widespread staff layoffs or furloughs, which allowed the Company to continue to provide a high
1See the Appendix on page 56 of this Proxy Statement for the definition of Adjusted EBITDA and reconciliation of Adjusted EBITDA to a reconciliation of net income (the most directly comparable GAAP financial measure).
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30 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
level of service to its networks both as the Compensation Committee deems appropriatepandemic unfolded and as the housing and mortgage markets rebounded in the second half of the year. The Company offered its franchisees free or heavily-discounted productivity tools, enhanced training and modified marketing collateral responsive to the circumstances. FollowingCOVID-19 environment. In addition, RE/MAX and Motto Mortgage both offered temporary fee waivers and deferrals to their franchisees in order to assist franchisees during times that their businesses were severely impacted by stay-at-home orders and other governmental actions aimed at containing the endspread of COVID-19. This resulted in substantially reduced revenue and profit in the second quarter. As a franchisor, we are a business that builds businesses and we believe that our actions early in the pandemic helped maintain the goodwill of our franchisees, which is crucial to our long-term success. These actions helped increase collections in the second half of the year, which contributed to strong cash flow. This enabled us to maintain our quarterly dividend through 2020 and opportunistically allocate capital to two tuck-in acquisitions in the third quarter of 2020.
Also during the second quarter, we implemented a cost mitigation plan that included the elimination of the 2020 corporate bonus plan. However, due to the exceptional leadership of the executive team in guiding the Company and its franchisees through the pandemic and the Company’s strong performance in the second half of the year, the CEO and Compensation Committee review each executive officer’s performanceapproved a discretionary bonus in the fourth quarter, albeit at a lower level than our initially established bonus targets prior to determine the pandemic and the actual 2019 attainment level.
The amount of suchthe discretionary bonus if any, to be paid.was 62.5% of the original target amount under the 2020 Annual Incentive Plan.
Long-Term Equity Incentive Compensation
The Compensation Committee also grants executive officers and other Company officers equity awards to incentivize long-term value creation by aligning each officer’s interests with those of stockholders, to reward strong performers, and to retain key personnel through long-term vesting.
The Board of Directors, as part of the annual budget process, determines the aggregate budget for all long-term equity awards. The CEO, working with Company management, recommends an individual award for each recipient, including Named Executive Officers.Officers (other than himself). The Compensation Committee reviews this recommendation and grants equity awards.awards for executive officers and, for other recipients, either grants the awards or delegates authority to grant individual awards to the CEO. Generally, the Compensation Committee grants equity awards annually. However, on occasion the Compensation Committee may grant additional awards, for example, in connection with promotions.promotions or new executive hires.
Until 2017, long-term equity awards were generally time-based restricted stock units that vested equally over a three-year period. Beginning in 2017, theThe Compensation Committee shifted the focus ofbelieves the long-term incentive program in order to furthershould incentivize performance and further to align the interests of the executive officers with stockholders. In order to accomplish this, theToward that end, restricted stock unit grants approvedto officers since 2017 have been a mix of performance-based grants and time-based grants. The Compensation Committee believes that this mix of grants aligns with the Company’s compensation philosophy and goals. Performance-based grants incentivize executive officers to drive stockholder value. The time-based awards, which vest in March 2017 included performance-based vesting criteria in addition to time-based vesting criteria. three annual installments, provide more predictable compensation, promote retention, and align executive officers’ interests with stockholders’ through meaningful stock ownership.
For the Named Executive Officers, 60 percent of the award has performance-based vesting and 40 percent of the award has time-based vesting. The number of restricted stock units that vest for each executive officer areis based on: (a) revenue, and (b) total stockholder return relative to the Standard & Poor’s SmallCap 600® index. 600® index (“rTSR”), both over a three-year performance period. The Compensation Committee chose these metrics because they align with the Company’s pay-for-performance philosophy, incentivize executive officers to drive stockholder value, and diversify the performance criteria by using different metrics than those used for other incentive programs.
Each executive officerNamed Executive Officer was granted a target number of performance-based restricted stock units. IfThe Compensation Committee sets threshold, levels aretarget, and stretch goals for revenue and rTSR. For each metric (revenue and rTSR), if the threshold level is not met, none of the performance-based restricted stock units willaward based on that metric does not vest. If the thresholds arethreshold is met, the number of restricted stock units that vest will be between 50% and 150% of the target amount.amount (based on linear interpolation between the levels).
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 31 |
The table below shows the rTSR performance levels that have been used each year since we began granting rTSR-based awards in 2017.
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| If rTSR Percentile is: | Vesting (% of Target) |
Below Threshold | less than 35th percentile | 0% |
Threshold | 35th percentile | 50% |
Target | 55th percentile | 100% |
Stretch | equal to or greater than 75th percentile | 150% |
Regardless of rTSR, if absolute total shareholder return is negative over a performance period, vesting of the rTSR-based award is capped at the target level.
Since we began issuing performance-based equity awards in 2017, two performance periods have been completed (January 1, 2017 through December 31, 2019 for the 2017 grants and January 1, 2018 through December 31, 2020 for the 2018 grants). As noted above the threshold for the rTSR portion of the awards was 35th percentile. The threshold aggregate revenue for the 2017 awards was $630 million and the threshold aggregate revenue for the 2018 awards was $660 million. The Company’s performance was below both of these thresholds for both the 2017 and the 2018 awards and therefore none of the performance-based restricted stock units from these awards vested. (We do not disclose three-year revenue targets prospectively for competitive reasons.)
Perquisites and Other Benefits
The Company offers a comprehensive benefit package to all full-time employees designed to attract and retain talented employees at all levels. The Company paid for certain educational benefits for Mr. Contos in 2016 and 2017, as described below. Otherwise,Generally, the Company’s benefits for its executive officers are substantially the same as those provided to other officers and employees.
1 See
The Compensation Committee used the 2017 Annual Reportpeer group listed in the left side of the table below in 2019 to inform compensation decisions for our NEOs in 2020. In late 2020, working with Meridian, the Compensation Committee substantially modified the peer group and the Compensation Committee intends to use the new group listed on the right side of the table beginning in 2021. The Compensation Committee removed some larger peer companies and added some smaller companies. In selecting peers, the Compensation Committee took a holistic approach, considering revenue and other factors. The peer group includes companies that share some traits with RE/MAX Holdings, such as franchisors, companies in the real estate industry, and companies with a technology focus. As the Company is based in Denver, Colorado and mainly competes for talent in that market, the revised peer group includes several Denver-based companies.
In selecting companies for the definitionnew peer group, one goal was to include more companies with comparable revenue as the Company. However, the Compensation Committee believes that it is appropriate to have companies with higher revenue because, as a worldwide franchisor, the responsibilities of Adjusted EBITDA. A table presenting a reconciliationmanagement extend beyond the operations and revenue of net income (the most directly comparable GAAP financial measure) to Adjusted EBITDAthe Company. The Company’s franchisees operate in over 110 countries and territories. While each franchised office is includedindependently owned and operated, Company management is responsible for matters such as managing franchise relationships, including assisting franchisees in their growth; marketing, expanding, and protecting the Company’s 2017 Annual Report. brands; customer satisfaction; and overall operation of the entire franchised systems. Therefore, the demands on Company management may be greater than those on management of non-franchise companies with similar revenue.
These peer groups are one resource for data on executive pay. This data may be supplemented by Meridian’s proprietary surveys of salary data and other sources. The Company believes the use of this peer group will allow the Committee to effectively make pay decisions.
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32 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
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Peer Group for 2020 Compensation | | Peer Group as Modified in 2020 |
Century Communities, Inc.
Choice Hotels International Inc.
CoreLogic, Inc.
Domino's Pizza Inc.
Dunkin Brands Group, Inc.
eXp World Holdings, Inc.
FirstService Corporation
Jones Lang LaSalle Inc.
M/I Homes, Inc.
MGIC Investment Corp.
Planet Fitness, Inc.
Realogy Holdings Corp.
Redfin Corporation
Ruth's Hospitality Group, Inc.
Stewart Information Services Corp.
Zillow Group, Inc. | | CarGurus, Inc. Cars.com, LLC Concrete Pumping Holdings, Inc. CSG Systems International, Inc. Dine Brands Global, Inc. Enova International, Inc. eXp World holdings, Inc. LendingClub Corporation Marcus & Millichap, Inc. NewAge, Inc. Noodles & Company Ping Identity Holding Corp. Planet Fitness, Inc. Quotient Technology Inc. Realogy Holdings Corp. Redfin Corporation ServiceSource International, Inc. The ONE Group Hospitality, Inc. TrueCar, Inc. Wingstop Inc. Zillow Group, Inc. |
As part
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7 | Other Compensation Policies |
Policies for Hedging and Other Transactions Involving Company Stock
Our insider trading policy prohibits all officers, employees, and directors from engaging in any of the Company’s benefit package, Davidfollowing activities without the prior written consent of the Board of Directors or the Chief Compliance Officer: pledging Company stock, entering into hedging transactions involving Company stock, short sales of Company stock, and Gail Liniger have made a golf course they own available for use bytrading in derivative securities related to Company stock. No officers, and employees at no cost to employees, or directors have been granted consent to the Company. This benefit is considered taxable compensation to officers and employees and,engage in 2017, the Company paid a tax gross up with respect to tax years 2014, 2015, 2016, and 2017 to all officers and employees who used the golf course duringany such years. David and Gail Liniger provided certain other benefits to Adam Contos as described further below.transactions.
David L. Liniger, Chair and Co-Founder
Since our IPO in October 2013, David Liniger, our Chair and Co-Founder, who served as CEO through May 2017 and as Co-CEO for the remainder of the year, has not received compensation for his service to the Company either as an officer or director. Through 2017, Mr. Liniger continued to receive substantially the same benefits, including health insurance, as other Company employees. Although Mr. Liniger is not compensated for his services, the Board reviewed Mr. Liniger’s performance as an officer regularly. Therefore, the Compensation Committee set annual performance goals for Mr. Liniger and evaluated his performance in much the same way as for other executive officers.
Adam M. Contos, CEO
2017 CEO Pay Mix
Base Salary
Mr. Contos began 2017 as our Chief Operating Officer and served as Co-CEO from since May 30, 2017 until his appointment as sole CEO on February 14, 2018. His annual base salary was $320,000 from January 1, 2017 through February 28, 2017; $380,000 from March 1, 2017 through May 29, 2017; and $400,000 from May 30, 2017 through December 31, 2017.
Cash Bonus
Pursuant to the 2017 Bonus Plan, an amount calculated based on Company performance was multiplied by an individual performance score to determine Mr. Contos’s final bonus of $70,000.
The individual score was determined based on a qualitative evaluation of performance drivers (weighted 50%) and individual goals (weighted 50%). Performance drivers include technical expertise, customer focus, decision quality, communication, overall work quality, and strategy development and execution. Mr. Contos’s individual goals included assuming new responsibilities in his role as Co-CEO, developing a mentoring program, leading a strategic acquisition, leading a talent review, and graduating from the MBA program at the Daniels College of Business at the University of Denver. In determining Mr. Contos’s cash bonus for 2017, the Compensation Committee also took into account Mr. Contos’s failure to disclose the loan he received from David Liniger, which was a subject of the Special Committee’s investigation. For more details regarding the Special Committee’s findings, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Special Committee Investigation” in the Company’s 2017 Annual Report, filed with the SEC on March 15, 2018.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 33 |
18
Equity Grants
In March 2017, the Compensation Committee granted Mr. Contos 6,854 restricted stock units, with a grant date fair value of $390,046. Sixty percent of the grant could vest in 2020 based on Company performance during 2017, 2018, and 2019, as discussed above under “Long-Term Equity Incentive Compensation.” The remaining 40 percent of the grant is scheduled to vest in equal installments on March 1, 2018, 2019, and 2020, subject to Mr. Contos’s continued service through each vesting date.
Education Benefits
The Company paid tuition and other related expenses in 2016 and 2017 for Mr. Contos to obtain a Masters of Business Administration degree from the Daniels College of Business at the University of Denver. Mr. Contos graduated from the program in 2017.
Other
In addition to the education benefits provided to Mr. Contos as described above, other compensation for Mr. Contos also includes our standard 401(k) match, dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, and a tax gross-up payment in 2017 related to the use of the golf course, similar to that granted to other officers and employees.
Other compensation for Mr. Contos for 2016 also includes: (i) $84,000 in relation to gifts for the benefit of Mr. Contos provided by David and Gail Liniger, (ii) $28,519 in respect of travel involving hotel and air provided by the Linigers on a complimentary basis for the benefit of Contos, and (iii) $7,917 in deemed interest amounts related to the benefit of below-market terms including an annual interest rate of 1% with respect to a loan to Mr. Contos from Mr. Liniger in the principal amount of $2.375 million. Other compensation in 2017 also includes (i) $42,012 in respect of travel involving hotel and air provided by the Linigers on a complimentary basis for the benefit of Contos, and (ii) $7,272 in deemed interest amounts related to the benefit of below-market terms, including an annual interest rate of 1%, with respect to a loan to Mr. Contos from Mr. Liniger in the principal amount of $2.375 million.
The items listed in the preceding paragraph did not involve the use of Company funds and were not reviewed by the Compensation Committee of the Board. Instead, David Liniger and Gail Liniger made arrangements for these elements of other compensation in favor of Mr. Contos and in a number of instances the remaining members of the Board and the Compensation Committee were largely unaware of the facts and circumstances of these other compensation arrangements prior to a comprehensive review of these matters by the Special Committee during an investigation that was performed in late 2017 and early 2018.
Mr. Contos has assured the Board of Directors that his failure to disclose these arrangements was unintentional and has assured the Board of his intention to repay the outstanding loan from Mr. Liniger as promptly as practicable.
Karri R. Callahan, Chief Financial Officer
2017 Chief Financial Officer Pay Mix
Base Salary
Ms. Callahan is our Chief Financial Officer, a position she has held since March 2016. Her annual base salary at the beginning of 2017 was $300,000. On March 1, 2017 her base salary was increased to $320,000.
Cash Bonus
Pursuant to the 2017 Bonus Plan, an amount calculated based on Company performance was multiplied by an individual performance score to determine Ms. Callahan’s final bonus of $64,000.
The individual score was determined based on a qualitative evaluation of performance drivers (weighted 50%) and individual goals (weighted 50%). Performance drivers include technical expertise, customer focus, decision quality, communication, overall work quality, and strategy development and execution. Ms. Callahan’s individual goals included further developing her technical and functional expertise, improving her customer focus and employee engagement, and continuing to develop talent in the finance department. In determining Ms. Callahan’s cash bonus for 2017, the Compensation Committee also took into account the immaterial corrections to the Company’s prior period financial statements and the identified material weakness in internal control over financial reporting associated with certain related party transactions with the Company’s controlling stockholder, the largest being the complimentary use by Company personnel of a golf facility owned by David and Gail Liniger. See additional information in Item 8: Financial Statements and Supplementary Data Note 18 (Immaterial Corrections to Prior Period Financial Statements) to the consolidated financial statements and Item 9A: Controls and Procedures in our 2017 Annual Report.
The Compensation Committee awarded Ms. Callahan an additional discretionary bonus of $12,500 based on her leadership during the acquisition of the Northern Illinois region.
Equity Grants
In March 2017, the Compensation Committee granted Ms. Callahan 5,772 restricted stock units, with a grant date fair value of $328,472. Sixty percent of the grant would vest in 2020 based on Company performance during 2017, 2018, and 2019, as discussed above under “Long-Term Equity Incentive Compensation.” The remaining 40 percent of the grant is scheduled to vest in equal installments on March 1, 2018, 2019, and 2020, subject to Ms. Callahan’s continued service through each vesting date.
Other
Other compensation for Ms. Callahan consisted of our standard 401(k) match, dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, and a tax gross-up related to the use of
the golf course. The complimentary use of the golf course and related tax gross-up were similar to those granted to other officers and employees.
Serene M. Smith, Chief Operating Officer
2017 Chief Operating Officer Pay Mix
Base Salary
Ms. Smith is our Chief Operating Officer, a position she has held since May 2017. Her annual base salary while serving as Chief Operating Officer during 2017 was $300,000.
Cash Bonus
Pursuant to the 2017 Bonus Plan, an amount calculated based on Company performance was multiplied by an individual performance score to determine Ms. Smith’s final bonus pursuant to the 2017 Bonus Plan of $75,000.
The individual score was determined based on a qualitative evaluation of performance drivers (weighted 50%) and individual goals (weighted 50%). Performance drivers include technical expertise, customer focus, decision quality, communication, overall work quality, and strategy development and execution. Ms. Smith’s individual goals included expanding and improving the Company’s analytics capabilities, automating certain aspects of the Company’s modeling and forecasts, building an enterprise project management office, establishing a steering committee for change management, and developing the staff in the departments she oversees.
Equity Grants
In March 2017, the Compensation Committee granted Ms. Smith 3,608 restricted stock units, with a grant date fair value of $205,325. Sixty percent of the grant will vest in 2020 based on Company performance during 2017, 2018, and 2019, as discussed above under “Long-Term Equity Incentive Compensation.” The remaining 40 percent of the grant is scheduled to vest in equal installments on March 1, 2018, 2019, and 2020, subject to Ms. Smith’s continued service through each vesting date.
Other
Other compensation for Ms. Smith consisted of our standard 401(k) match, dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, and a tax gross-up related to the use of the golf course. The complimentary use of the golf course and related tax gross-up were similar to those granted to other officers and employees.
Geoffrey D. Lewis, Former President
2017 President Pay Mix
Base Salary
Mr. Lewis served as our President from May 2015 until February 8, 2018, when he agreed to step down from that role and to transition to retirement from the Company. Mr. Lewis will remain with the Company as a Senior Advisor through June 30, 2018, the date of his retirement. On February 8, 2018, the Company entered into a Separation Agreement, Waiver, and Release with Mr. Lewis (the “Separation Agreement”), which is discussed further below under “Employment Agreements and Separation Agreements.” His annual base salary since he became President through the end of 2017 was $500,000.
Cash Bonus
Mr. Lewis’s cash bonus under the 2017 Bonus Plan was paid by agreement pursuant to the terms of the Separation Agreement in the amount of $65,378.
Equity Grants
In March 2017, the Compensation Committee granted Mr. Lewis 4,510 restricted stock units, with a grant date fair value of $256,655. Sixty percent of the grant could have vested in 2020 based on Company performance during 2017, 2018, and 2019, as discussed above under “Long-Term Equity Incentive Compensation.” The remaining 40 percent of the grant was scheduled to vest in equal installments on March 1, 2018, 2019, and 2020. Both of these grants were subject to Mr. Lewis’s continued service through each vesting date. Pursuant to the Separation Agreement, Mr. Lewis’s employment with the Company will end on June 30, 2018 and the unvested portion of all outstanding equity awards, including the 2017 equity awards, will be forfeited at that time.
Other
Other compensation for Mr. Lewis consisted of our standard 401(k) match, dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, similar to that granted to other officers and employees, and a tax gross-up related to the use of the golf course similar to that granted to other officers and employees.
Other Compensation Policies
Stock Ownership Guidelines
Ownership of RE/MAX Holdings stock helps align the interests of our directors and executive officers with those of stockholders. To encourage stock ownership, our Board of Directors has adopted stock ownership guidelines applicable to directors, all Named Executive Officers and certain other members of senior management. The stock ownership guidelines provide a minimum share ownership level for directors and certain officers based on a multiple of base salary or cash retainer. Unvested time-based restricted stock units count toward the threshold. The multiples are as follows: CEO: five times base salary; President, Chief Financial
Officer, and Chief Operating Officer: two times base salary; other
| | | | | |
Chief Executive Officer: |
| | | | | 5x base salary |
Chief Customer Officer, President of Motto Mortgage, Chief Financial Officer, and Chief Operating Officer: |
| | 2x base salary |
Other officers subject to the guidelines: |
| 1x base salary |
Non-employee directors: |
| | | 3x base cash retainer |
The guidelines do not mandate a time period to reach the guidelines: one times base salary; non-employee directors: three times base cash retainer. Ifapplicable ownership level. Rather, if an officer or director is below the guidelines’ applicable threshold, he or she may not sell more than one half of the after-tax portion of equity awards without approval of the Compensation Committee (other than those that were vested at the time of our IPO)IPO or those that are issued as part of the short-term incentive compensation). All shares beneficially owned by the officer or director, as well as unvested time-based restricted stock units count toward the threshold. Unvested performance-based restricted stock units do not count towards the threshold.
Transactions Involving Company Stock
| |
8 | 2020 Say-on-Pay Vote and Stockholder Outreach |
Our insider trading policy prohibits all officers, employees,2020 say-on-pay vote received approximately 83% support from our stockholders (ignoring abstentions and directors from engaging in anybroker non-votes). While this represents a substantial majority of our stockholders, we aim to have even higher support. Prior to the following activities without the prior written consent2020 Annual Meeting of the BoardStockholders, our Senior Vice President of Directors or theInvestor Relations and Chief Compliance Officer: pledging Company stock, entering into hedging transactions involving Company stock, short salesFinancial Officer contacted holders of Companyapproximately twenty percent of our Class A common stock, and tradingthis outreach continued after the meeting, including to two proxy advisory firms. The purpose of these calls was to understand any concerns our stockholders may have and to give them an opportunity to ask any questions. We intend to continue to communicate regularly with stockholders, including about compensation matters and management has in derivative securities relatedthe past and will continue to Company stock.report these conversations to the Compensation Committee so they can consider stockholder feedback in compensation decisions.
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34 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion and Analysis above. Based on this review and these discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for 20172020 for filing with the SEC.
Compensation Committee
Roger J. Dow, Chair
Richard O. CoveyRonald E. Harrison
Stephen P. Joyce
Laura G. Kelly
Christine M. Riordan
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 35 |
23
COMPENSATION TABLES
Summary Compensation TableTable
The following table presents information regarding compensation earned by or awards to our Named Executive Officers during fiscal years 2017, 2016,2020, 2019, and 2015.
2018.
| | | | | | | | | | | | | | | |
| | | | | | | | | | Non-Equity | | | | | |
| | | | | | | | Stock | | Incentive Plan | | All Other | | | |
| | | | Salary | | Bonus | | Awards | | Compensation | | Compensation | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | Non-Equity | | | | |
| | | | | | | | | Stock | | Incentive Plan | | All Other | | |
| | | | | Salary | | Bonus | | Awards | | Compensation | | Compensation | | |
Name and Principal Position | | Fiscal Year | | ($) | | ($)(1) | | ($) | | ($) | | ($)(2) | | Total ($) | | Fiscal Year | | ($) | | ($)(1) | | ($)(2) | | ($)(3) | | ($) | | Total ($) |
Adam M. Contos, CEO | | 2017 | | 381,821 | | — | | 390,046 | (3) | 70,000 | (4) | 73,422 | (5) | 915,289 | | 2020 | | 700,000 | | 440,000 | | 1,245,072 | | — | | 9,097 | (4) | 2,394,169 |
| | 2016 | | 317,666 | | — | | 250,011 | | 168,962 | | 224,824 | (6) | 961,463 | |
David L. Liniger, Chair, Co-Founder, and Former Co-CEO (7) | | 2017 | | — | | — | | — | | — | | — | | — | |
| | 2016 | | — | | — | | — | | — | | — | | — | |
| | 2015 | | — | | — | | — | | — | | — | | — | |
| | | 2019 | | 650,000 | | — | | 1,006,824 | | 378,000 | | 27,388 | | 2,062,212 |
| | | 2018 | | 620,673 | | 48,750 | | 1,489,410 | | 234,000 | | 12,232 | | 2,405,065 |
Nicholas R. Bailey, Chief Customer Officer | | | 2020 | | 358,333 | | 115,000 | | 731,787 | | — | | 3,888 | (4) | 1,209,008 |
| | | 2019 | | 114,198 | | — | | 100,010 | | 170,000 | | — | | 384,208 |
Karri R. Callahan, Chief Financial Officer | | 2017 | | 316,667 | | 12,500 | | 328,472 | (3) | 64,000 | (4) | 25,410 | (8) | 747,049 | | 2020 | | 358,333 | | 115,000 | | 731,787 | | — | | 14,607 | (4) | 1,219,727 |
| | 2016 | | 295,519 | | 70,000 | | 200,009 | | 158,402 | | 33,996 | (8) | 757,926 | |
Serene M. Smith, Chief Operating Officer | | 2017 | | 279,551 | | — | | 205,325 | (3) | 75,000 | (4) | 44,090 | (9) | 603,966 | |
Geoffrey D. Lewis, Former President | | 2017 | | 500,000 | | — | | 256,655 | (3) | 65,378 | (10) | 52,125 | (11) | 874,158 | |
| | 2016 | | 500,000 | | — | | 250,011 | | 184,803 | | 23,999 | | 958,813 | |
| | 2015 | | 489,083 | | — | | 350,051 | | 319,700 | | 17,114 | | 1,175,948 | |
| | | 2019 | | 342,500 | | — | | 542,146 | | 170,000 | | 15,304 | | 1,069,950 |
| | | 2018 | | 320,000 | | 74,000 | | 415,543 | | 96,000 | | 16,074 | | 921,617 |
Ward M. Morrison, President, Motto Mortgage | | | 2020 | | 270,833 | | 88,438 | | 559,029 | | — | | 16,074 | (4) | 934,374 |
Serene M. Smith, Chief of Staff and Chief Operating Officer | | | 2020 | | 338,333 | | 108,750 | | 691,165 | | — | | 9,960 | (4) | 1,148,208 |
| | | 2019 | | 327,500 | | — | | 511,152 | | 160,000 | | 14,800 | | 1,013,452 |
| | | 2018 | | 316,667 | | 39,000 | | 412,793 | | 96,000 | | 15,644 | | 880,104 |
(1) Represents discretionary cash bonuses in the year in which they were earned. Cash bonusesBonuses paid pursuant to the RE/MAX Performance EvaluationAnnual Plans and Incentive Plan are reported in the “Non-Equity Incentive Plan Compensation” column. Each Named Executive Officer’s bonus was paid approximately half in cash and half in equity (except for a $2,500 bonus to each Named Executive Officer that was paid entirely in cash). For additional details, see “Compensation Discussion and Analysis” above.
(2) The figure for 2017 forReflects the grant date fair value of restricted stock units granted during 2020 to each Named Executive Officer, other thancomputed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2020 Annual Report. The value of the restricted stock unit awards granted in 2020, assuming achievement of the maximum performance level for performance-based awards, would have been: Mr. Liniger, includes a tax gross up paid in 2017 related toContos: $1,622,602; Mr. Bailey: $953,679; Ms. Callahan: $953,679; Mr. Morrison: $728,531; and Ms. Smith: $900,738.
(3) Reflects the use of a golf course owned by David and Gail Liniger. The gross up relates to use in 2014, 2015, 2016, and 2017 and is similar to the gross up paid to other officers and employees. Except where otherwise noted, the figure in each year for eachawards that our Named Executive Officer, other than Mr. Liniger, reflectsOfficers received under each year’s Annual Plan. The awards for 2019 were paid half in cash and half in Class A common stock of the Company. Further details of Annual Plans are above in the Compensation Discussion and Analysis.
(4) Reflects matching contributions made under our 401(k) plan and dividend equivalents paid in cash upon vesting of restricted stock units.
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36 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
Grants of Plan-Based Awards
The following table provides information regarding equity grants to our Named Executive during 2020.
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | All other | | |
| | | | | | | | | | | | | | | | stock | | |
| | | | | | | | | | | | | | | | awards | | Grant date |
| | | | | | | | | | | | | | | | Number of | | fair value |
| | | | Estimated future payouts under | | Estimated future payouts under | | shares of | | of |
| | | | non-equity incentive plan awards (1) | | equity incentive plan awards (2) | | stock or | | stock |
| | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | units | | award |
Name | | date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#) (3) | | ($) (5) |
Adam M. Contos | | — | | 210,000 | | 700,000 | | 1,050,000 | | — | | — | | — | | — | | — |
| | 3/1/2020 | | — | | — | | — | | 12,608 | | 25,215 | | 37,823 | | — | | 755,061 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 16,810 | (3) | 490,011 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 6,484 | (4) | 189,009 |
Nicholas R. Bailey | | — | | 90,000 | | 180,000 | | 270,000 | | — | | — | | — | | — | | — |
| | 3/1/2020 | | — | | — | | — | | 7,410 | | 14,820 | | 22,230 | | — | | 443,785 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 9,880 | (3) | 288,002 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 2,916 | (4) | 85,001 |
Karri R. Callahan | | — | | 90,000 | | 180,000 | | 270,000 | | — | | — | | — | | — | | — |
| | 3/1/2020 | | — | | — | | — | | 7,410 | | 14,820 | | 22,230 | | — | | 443,785 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 9,880 | (3) | 288,002 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 2,916 | (4) | 85,001 |
Ward M. Morrison | | — | | 68,750 | | 137,500 | | 206,250 | | — | | — | | — | | — | | — |
| | 3/1/2020 | | — | | — | | — | | 5,661 | | 11,321 | | 16,982 | | — | | 339,005 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 7,548 | (3) | 220,024 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 2,076 | (4) | 60,515 |
Serene M. Smith | | — | | 85,000 | | 170,000 | | 255,000 | | — | | — | | — | | — | | — |
| | 3/1/2020 | | — | | — | | — | | 6,999 | | 13,997 | | 20,996 | | — | | 419,137 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 9,332 | (3) | 272,028 |
| | 3/1/2020 | | — | | — | | — | | — | | — | | — | | 2,745 | (4) | 80,017 |
(1) Represents potential payouts under the 2020 Bonus Plan. Actual amounts paid are reflected above in the Summary Compensation Table.
(2) Represents performance-based restricted stock units that are subject to vesting based on Company performance during 2020, 2021, and 2022.
(3) 2017 numbers reflectRepresents (i) time-based restricted stock units that are scheduled to vest on March 1, 2021, 2022, and 2023.
(4) Represents vested shares of RE/MAX Holdings Class A stock issue for the portion of the bonus with respect to 2019 performance that was paid in stock.
(5) Reflects the grant date fair value of stock and restricted stock units granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 1213 to our audited consolidated financial statements in our 20172020 Annual Report. The grant date fair value for the performance-based restricted stock unit awards is reported based upon probable outcome of the performance conditions on the grant date in accordance with SEC rules. The value of the restricted stock unit awards granted in 2017 assuming achievement of the maximum performance level for performance-based awards would have been: Mr. Contos: $509,048; Ms. Callahan: $428,692; Ms. Smith: $267,980; and Mr. Lewis: $334,967.
(4) Reflects the cash awards that our Named Executive Officers received under the 2017 Bonus Plan for fiscal 2017 performance. The 2017 Bonus Plan was a cash based incentive compensation program adopted pursuant to the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan. Further details of the 2017 Bonus Plan are discussed above in the Compensation Discussion and Analysis.
(5) The amount for Mr. Contos’s “All Other Compensation” in 2017 is comprised of (i) dividend equivalents paid in cash upon vesting of restricted stock units, (ii) $14,770 in respect of tuition and other education related expenses, (iii) complimentary use of a golf course owned by David and Gail Liniger similar to that granted to other officers and employees, (iv) $42,012 in respect of travel involving hotel and air provided by the Linigers on a complimentary basis for the benefit of Contos, (v) $7,272 in deemed interest amounts related to the benefit of below-market terms, including an annual interest rate of 1%, with respect to a loan to Mr. Contos from Mr. Liniger in the principal amount of $2.375 million, and (vi) a tax gross up of $1,693 related to the use of the golf course, similar to that granted to other officers and employees. The Company is still evaluating details of the tax treatment of some of the perquisites and benefits described above that were provided by the Linigers on a complimentary basis.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 37 |
24
(6) The amount for Mr. Contos’s “All Other Compensation” in 2016 was revised from the number reported in our Definitive Proxy Statement filed with the SEC on April 12, 2017 (the “2017 Proxy Statement”). The additional amount is comprised of (i) $84,000 in relation to gifts for the benefit of Contos provided by David and Gail Liniger, (ii) $28,519 in respect of travel involving hotel and air provided by the Linigers on a complimentary basis for the benefit of Contos, (iii) $7,917 in deemed interest amounts related to the benefit of below-market terms, including an annual interest rate of 1%, with respect to a loan to Mr. Contos from Mr. Liniger in the principal amount of $2.375 million, and (iv) $1,200 related to complimentary use of a golf course owned by the Linigers, similar to that granted to other officers and employees. The total compensation for Mr. Contos for 2016 was also revised from the number in the 2017 Proxy Statement to reflect the increase in “All Other Compensation.” The Company is still evaluating details of the tax treatment of some of the perquisites and benefits described above that were provided by the Linigers on a complimentary basis. The $103,188 previously reported for Mr. Contos’s “All Other Compensations” in 2016 consisted of (i) matching contributions made under our 401(k) plan, (ii) dividend equivalents paid in cash upon settlement of restricted stock units, (iii) $59,470 in respect of tuition and other education related expenses, and (iv) $31,999 paid in respect of a one-time payment for accrued paid time off paid upon Mr. Contos’s promotion to Chief Operating Officer, a position that does not accrue paid time off.
(7) We discontinued paying compensation to Mr. Liniger at the time of our IPO in October 2013. Through 2017, Mr. Liniger continued to receive substantially the same benefits, including health insurance, as other Company employees.
(8) Reflects matching contributions made under our 401(k) plan, dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, similar to that granted to other officers and employees, a tax gross up of $3,950 related to the use of the golf course, similar to that granted to other officers and employees and, with respect to 2016, $22,788 paid in respect of a one-time payment for accrued paid time off paid upon Ms. Callahan’s promotion to Chief Financial Officer in 2016, a position that does not accrue paid time off.
(9) Reflects matching contributions made under our 401(k) plan, dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, similar to that granted to other officers and employees, and a tax gross up related to the use of the golf course, similar to that granted to other officers and employees. The amount of the tax gross up payment in 2017 was $12,116 in respect of golf course use for the period from 2014 through 2017.
(10) Reflects the bonus paid to Mr. Lewis under the 2017 Bonus Plan, as agreed in his Separation Agreement.
(11) Reflects $12,000 in matching contributions made under our 401(k) plan, as well as dividend equivalents paid in cash upon vesting of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger, similar to that granted to other officers and employees, and a tax gross up related to the use of the golf course, similar to that granted to other officers and employees. The amount of the tax gross up payment in 2017 was $12,280 in respect of golf course use for the period from 2014 through 2017.
Grants of Plan-Based Awards
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | All other | | |
| | | | | | | | | | | | | | | | stock | | |
| | | | | | | | | | | | | | | | awards | | Grant date |
| | | | | | | | | | | | | | | | Number of | | fair value |
| | | | Estimated future payouts under | | Estimated future payouts under | | shares of | | of |
| | | | non-equity incentive plan awards (1) | | equity incentive plan awards (2) | | stock or | | stock |
| | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | units | | award |
Name | | date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#) (3) | | ($) (4) |
Adam M. Contos | | — | | 100,000 | | 200,000 | | 300,000 | | — | | — | | — | | — | | — |
| | 3/6/2017 | | — | | — | | — | | 2,056 | | 4,112 | | 6,168 | | — | | 238,002 |
| | 3/6/2017 | | — | | — | | — | | — | | — | | — | | 2,742 | | 152,044 |
David L. Liniger | | — | | — | | — | | — | | — | | — | | — | | — | | — |
Karri R. Callahan | | — | | 80,000 | | 160,000 | | 240,000 | | — | | — | | — | | — | | — |
| | 3/6/2017 | | — | | — | | — | | 1,732 | | 3,463 | | 5,195 | | — | | 200,438 |
| | 3/6/2017 | | — | | — | | — | | — | | — | | — | | 2,309 | | 128,034 |
Serene M. Smith | | — | | 75,000 | | 150,000 | | 225,000 | | — | | — | | — | | — | | — |
| | 3/6/2017 | | — | | — | | — | | 1,083 | | 2,165 | | 3,248 | | — | | 125,311 |
| | 3/6/2017 | | — | | — | | — | | — | | — | | — | | 1,443 | | 80,014 |
Geoffrey D. Lewis | | — | | 137,500 | | 275,000 | | 412,500 | | — | | — | | — | | — | | — |
| | 3/6/2017 | | — | | — | | — | | 1,353 | | 2,706 | | 4,059 | | — | | 156,623 |
| | 3/6/2017 | | — | | — | | — | | — | | — | | — | | 1,804 | | 100,032 |
(1) Represents potential payouts of cash incentives under the 2017 Bonus Plan. Actual amounts paid are reflected above in the Summary Compensation Table.
(2) Represents performance-based restricted stock units that are scheduled to vest in 2020 based on Company performance during 2017, 2018, and 2019.
(3) Represents time-based restricted stock units that are scheduled to vest in equal installments on March 1, 2018, 2019, and 2020.
(4) Reflects the grant date fair value of restricted stock units granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 12 to our audited consolidated financial statements in our 2017 Annual Report.
Outstanding Equity Awards at Fiscal Year EndEnd
The following table provides information regarding outstanding equity awards held by our Named Executive Officers as of the end of fiscal year 2017.2020.
| | | | | | | | | | |
| | | Stock Awards |
| | | | | | | | | Equity | |
| | | | | | | Equity | | Incentive Plan | |
| | | | | | | Incentive Plan | | Awards: | |
| | | | | | | Awards: | | Market or | |
| | | Number of | | Market Value | | Number of | | Payout value of | |
| | | Shares or | | of Shares or | | unearned shares, | | unearned shares, | |
| | | Units of Stock | | Units of Stock | | units, or other | | units, or other | |
| | | That Have Not | | That Have Not | | rights that have | | rights that have | |
Name | | | Vested (#) | | Vested ($) (1) | | not vested (#) | | not vested ($) (1) | |
Adam M. Contos | | | 8,692 | (2) | 421,562 | | 2,056 | (3) | 99,716 | |
David L. Liniger | | | — | | — | | — | | — | |
Karri R. Callahan | | | 7,356 | (4) | 356,766 | | 1,732 | (3) | 84,002 | |
Serene M. Smith | | | 6,388 | (5) | 309,818 | | 1,083 | (3) | 52,526 | |
Geoffrey D. Lewis | | | 9,397 | (6) | 455,755 | | 1,353 | (3) | 65,621 | |
| | | | | | | | | | |
| | | | Stock Awards |
| | | | | | | | Equity Incentive | | Equity Incentive |
| | | | | | | | Plan Awards: | | Plan Awards: |
| | | | Number of | | Market Value | | Number of | | Market or Payout |
| | | | Shares or | | of Shares or | | unearned shares, | | value of unearned |
| | | | Units of Stock | | Units of Stock | | units, or other | | shares, units, or |
| | | | That Have Not | | That Have Not | | rights that have | | other rights that have |
Name | | Grant Date | | Vested (#) | | Vested ($) (1) | | not vested (#) | | not vested ($) (1) |
Adam M. Contos | | 3/21/2018 | | 13,713 | (2) | 498,193 | | | | |
| | 6/1/2018 | | 1,664 | (2) | 60,453 | | | | |
| | 3/1/2019 | | 6,626 | (3) | 240,723 | | | | |
| | 3/1/2020 | | 16,810 | (4) | 610,707 | | | | |
| | 6/1/2018 | | | | | | 3,743 | (5) | 135,983 |
| | 3/1/2019 | | | | | | 14,909 | (6) | 541,644 |
| | 3/1/2020 | | | | | | 25,215 | (7) | 916,061 |
Nicholas R. Bailey | | 3/1/2020 | | 9,880 | (4) | 358,940 | | — | | — |
| | 3/1/2020 | | | | | | 14,820 | (7) | 538,411 |
Karri R. Callahan | | 6/1/2018 | | 935 | (2) | 33,969 | | | | |
| | 9/11/2018 | | 369 | (2) | 13,406 | | | | |
| | 3/1/2019 | | 3,568 | (3) | 129,625 | | | | |
| | 3/1/2020 | | 9,880 | (4) | 358,940 | | | | |
| | 6/1/2018 | | | | | | 2,102 | (5) | 76,366 |
| | 3/1/2019 | | | | | | 8,028 | (6) | 291,657 |
| | 3/1/2020 | | | | | | 14,820 | (7) | 538,411 |
Ward M. Morrison | | 6/1/2018 | | 321 | (2) | 11,662 | | | | |
| | 9/11/2018 | | 474 | (2) | 17,220 | | | | |
| | 3/1/2019 | | 1,700 | (3) | 61,761 | | | | |
| | 3/1/2020 | | 7,548 | (4) | 274,219 | | | | |
| | 6/1/2018 | | | | | | 720 | (5) | 26,158 |
| | 3/1/2019 | | | | | | 3,823 | (6) | 138,890 |
| | 3/1/2020 | | | | | | 11,321 | (7) | 411,292 |
Serene M. Smith | | 6/1/2018 | | 769 | (2) | 27,938 | | | | |
| | 9/11/2018 | | 1,053 | (2) | 38,255 | | | | |
| | 3/1/2019 | | 3,364 | (3) | 122,214 | | | | |
| | 3/1/2020 | | 9,332 | (4) | 339,032 | | | | |
| | 6/1/2018 | | | | | | 1,728 | (5) | 62,778 |
| | 3/1/2019 | | | | | | 7,569 | (6) | 274,982 |
| | 3/1/2020 | | | | | | 13,997 | (7) | 508,511 |
(1) Value is calculated by multiplying the number of unvested restricted stock units by $48.50,$36.33, which was the closing market price of our Class A common stock on December 29, 2017,31, 2020.
(2) Represents time-based restricted stock units (“RSUs”) that vested on March 1, 2021.
(3) Represents time-based RSUs, half of which vested on March 1, 2021, and half of which are scheduled to vest on March 1, 2022.
(4) Represents time-based RSUs, one third of which vested on March 1, 2021, and the last trading dayremainder of which are scheduled to vest on March 1, 2022 and 2023.
(5) Represents performance-based RSUs which were subject to vesting based on Company performance during 2018, 2019, and 2020. The numbers set forth above represent the fiscal year.threshold number of restricted stock units.
(6) Represents performance-based RSUs which are subject to vesting based on Company performance during 2019, 2020, and 2021. The numbers set forth above represent the target number of restricted stock units.
(7) Represents performance-based RSUs which are subject to vesting based on Company performance during 2020, 2021, and 2022. The numbers set forth above represent the target number of restricted stock units.
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38 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
26
(2) Represents time-based unvested restricted stock units as of December 31, 2017 that were scheduled to vest as follows: (i) 926 vest on April 1, 2018, (ii) 5,024 vest in equal installments on March 1, 2018 and 2019 and (ii) 2,742 vest in equal installments on March 1, 2018, 2019, and 2020.
(3) Represents unvested restricted stock units that will vest in 2020 based on Company performance during 2017, 2018, and 2019. The number set forth above represents the threshold number of RSUs.
(4) Represents time-based unvested restricted stock units as of December 31, 2017 that were scheduled to vest as follows: (i) 1,028 vest on April 1, 2018, (ii) 4,019 vest in equal installments on March 1, 2018 and 2019 and (ii) 2,309 vest in equal installments on March 1, 2018, 2019, and 2020.
(5)Represents time-based unvested restricted stock units as of December 31, 2017 that were scheduled to vest as follows: (i) 926 vest on April 1, 2018, (ii) 4,019 vest in equal installments on March 1, 2018 and 2019 and (ii) 1,443 vest in equal installments on March 1, 2018, 2019, and 2020.
(6) Represents time-based unvested restricted stock units as of December 31, 2017 that were scheduled to vest as follows: (i) 2,569 vest on April 1, 2018, (ii) 5,024 vest in equal installments on March 1, 2018 and 2019 and (ii) 1,804 vest in equal installments on March 1, 2018, 2019, and 2020. Pursuant to the Separation Agreement, Mr. Lewis’s employment will end June 30, 2018, and all units not vested as of that date will be forfeited.
Option Exercises and Stock Vested for Fiscal Year 20172020
The following table shows stock awards that vested during fiscal year 2020.
| | | | |
| | Stock awards |
| | Number of shares | | Value realized |
| | acquired on vesting | | on vesting |
Name | | (#) | | ($)(1) |
Adam M. Contos | | 3,435 | | 199,314 |
David L. Liniger | | — | | — |
Karri R. Callahan | | 3,036 | | 176,573 |
Serene M. Smith | | 2,933 | | 170,449 |
Geoffrey D. Lewis | | 5,079 | | 297,050 |
| | | | |
| | Stock awards |
| | Number of shares | | Value realized |
| | acquired on vesting | | on vesting |
Name | | (#)(1) | | ($)(2) |
Adam M. Contos | | 12,375 | | 360,731 |
Nicholas R. Bailey | | 2,916 | | 85,001 |
Karri R. Callahan | | 6,772 | | 197,404 |
Ward M. Morrison | | 9,552 | | 278,441 |
Serene M. Smith | | 6,729 | | 196,150 |
(1) Includes shares from LTI awards that vested in 2020 and the portion of the bonus with respect to 2019 performance which was paid in vested shares of RE/MAX Holdings Class A stock in 2020
(2) Represents the amounts realized based on the fair market value of our stock upon vesting or delivery, which is the closing price the day before the applicable vesting or delivery date.
Employment Agreements
No executive officer currently has an employment agreement and Separation Agreements
Since our IPO, we have not entered into any employment agreements with any executive officer. Geoffrey Lewis,officer since our President during 2017, is the only executive officer who had an employment agreement in 2017. Currently no executive officers have employment agreements.
Geoffrey D. Lewis
We entered into an employment agreement with Mr. Lewis on July 1, 2010. Concurrently with the announcement of Mr. Lewis’s retirement, on February 8, 2018,IPO.. Our Named Executive Officers may be entitled to certain benefits upon separation from the Company entered into the Separation Agreement with Mr. Lewis. The Separation Agreement provides that Mr. Lewis’s employment agreement was terminated and replaced with the Separation Agreement.or a change in control, as described below under “Potential Payments on Termination/Change in Control.”
Mr. Lewis’s employment agreement provided for an initial term through July 1, 2011, but automatically renewed for one year periods on each anniversary date of the agreement until it was terminated and superseded by the Separation Agreement. Pursuant to his employment agreement, Mr. Lewis was entitled to an annual base salary, which was reviewed annually, and he was eligible to receive an annual performance-based bonus. Mr. Lewis’s base salary in 2017 was $500,000. Mr. Lewis’s agreement provided for certain benefits in the event he was terminated by us other than for cause (as defined in the agreement) or by Mr. Lewis for good reason (as defined in the agreement).
The Separation Agreement provides that Mr. Lewis retired as President as of February 8, 2018. Mr. Lewis will continue to serve as Senior Advisor to the Company through June 30, 2018 (the “Retirement Date”), during which time he will be eligible to receive his base salary of $500,000 per year. Mr. Lewis’s cash bonus pursuant to the 2017 Bonus Plan was paid by agreement pursuant to the Separation Agreement in the amount of $65,378.
Potential Payments on Termination/Change of Control
We do not currently have any employment agreements with our executive officers. Some of theIn 2018, we adopted a Severance Pay Benefit Plan (the “Severance Plan”) that is applicable to all employees, including Named Executive Officers, who meet certain eligibility requirements. The restricted stock unit agreements with our executive officersemployees, including Named Executive Officers, provide for accelerated vesting of awards in the event that therethe executive’s employment is terminated within two years following a change in control or if outstanding equity awards are not converted into equivalent awards by the acquiring or successor entity following a change in control.
The Severance Plan sets forth benefits eligible employees will receive if they are involuntarily terminated due to position elimination or reduction in force or in other circumstances that the Company determines should result in the payment of severance benefits.
Involuntary Termination for Cause or Voluntary Resignation Without Good Reason
None of our Named Executive Officers serving as of December 31, 2020 were entitled to any severance payments or other payments following involuntary termination for cause or voluntary resignation without good reason.
Voluntary Resignation with Good Reason or Involuntary Termination Without Cause
Our employees, including Named Executive Officers, are entitled to certain benefits under the Severance Plan if they are terminated involuntarily without cause or they voluntarily resign with good reason. Good reason means that, following a change in control, the employee is not offered a position with the acquiring or successor entity that has substantially the same level of responsibility and compensation and is at a location that would not increase such employee’s one-way commute by more than twenty miles. Payment of benefits under the awardSeverance Plan is conditioned upon the employee signing an agreement and release in a form provided by the Company that (i) provides a comprehensive release of claims against the Company and (ii) contains non-solicitation and non-disparagement provisions.
The table below sets forth the estimated amount each Named Executive Officer serving as of December 31, 2020, would have received based upon a hypothetical voluntary resignation with good reason or involuntary termination without cause on such date. The benefits under the Severance Plan for our Named Executive Officers comprise one year’s salary,
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 39 |
outplacement assistance, continuation of health benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), and a pro-rated bonus.
| | | | | | | |
| Cash | | Cash | | Other | | |
| Severance | | Bonus | | Benefits | | Total |
Name | ($) | | ($) | | ($) | | ($) |
Adam M. Contos | 700,000 | | 437,500 | | 21,900 | | 1,159,400 |
Nicholas R. Bailey | 300,000 | | 112,500 | | 19,500 | | 432,000 |
Karri R. Callahan | 360,000 | | 112,500 | | 21,900 | | 494,400 |
Ward M. Morrison | 275,000 | | 85,938 | | 21,900 | | 382,838 |
Serene M. Smith | 330,000 | | 103,125 | | 21,900 | | 455,025 |
Change in Control
The table below sets forth the estimated value of accelerated vesting of restricted stock units for each Named Executive Officer serving as of December 31, 2020, based on a hypothetical change in control on such date, in connection with which the restricted stock units were not converted into an equivalent award by the acquiring or successor entity.
For Named Executive Officers serving as of December 31, 2017 (Vesting would not be accelerated if the following table sets forth potential termination payments under various circumstances, as though the termination had occurred on December 31, 2017.
| | | | | | | | |
| | | | | | Restricted | | |
| | Cash | | Continued | | Stock | | |
| | Severance | | Benefits | | Vesting | | Total |
Name | Scenario | ($) | | ($) | | ($) (1) | | ($) |
Adam M. Contos | Voluntary Resignation without Good Reason | — | | — | | — | | — |
| Voluntary Resignation with Good Reason | — | | — | | — | | — |
| Involuntary Termination not for Cause | — | | — | | — | | — |
| Involuntary Termination for Cause | — | | — | | — | | — |
| Change in Control | — | | — | | 376,651 | | 376,651 |
| Change in Control and NEO Remains Employed for 12 Months Thereafter | — | | — | | 376,651 | | 376,651 |
David L. Liniger | Voluntary Resignation without Good Reason | — | | — | | — | | — |
| Voluntary Resignation with Good Reason | — | | — | | — | | — |
| Involuntary Termination not for Cause | — | | — | | — | | — |
| Involuntary Termination for Cause | — | | — | | — | | — |
| Change in Control | — | | — | | — | | — |
| Change in Control and NEO Remains Employed for 12 Months Thereafter | — | | — | | — | | — |
Karri R. Callahan | Voluntary Resignation without Good Reason | — | | — | | — | | — |
| Voluntary Resignation with Good Reason | — | | — | | — | | — |
| Involuntary Termination not for Cause | — | | — | | — | | — |
| Involuntary Termination for Cause | — | | — | | — | | — |
| Change in Control | — | | — | | 306,908 | | 306,908 |
| Change in Control and NEO Remains Employed for 12 Months Thereafter | — | | — | | 306,908 | | 306,908 |
Serene M. Smith | Voluntary Resignation without Good Reason | — | | — | | — | | — |
| Voluntary Resignation with Good Reason | — | | — | | — | | — |
| Involuntary Termination not for Cause | — | | — | | — | | — |
| Involuntary Termination for Cause | — | | — | | — | | — |
| Change in Control | — | | — | | 69,986 | | 69,986 |
| Change in Control and NEO Remains Employed for 12 Months Thereafter | — | | — | | 69,986 | | 69,986 |
Geoffrey D. Lewis (2) | Voluntary Resignation without Good Reason | — | | — | | — | | — |
| Voluntary Resignation with Good Reason | 500,000 | | 35,487 | | — | | 535,487 |
| Involuntary Termination not for Cause | 500,000 | | 35,487 | | — | | 535,487 |
| Involuntary Termination for Cause | — | | — | | — | | — |
| Change in Control | — | | — | | 455,755 | | 455,755 |
| Change in Control and NEO Remains Employed for 12 Months Thereafter | 125,000 | | — | | 455,755 | | 580,755 |
(1) Reflects accelerated vesting of restricted stock unitsawards were converted.) See “Voluntary Resignation with Good Reason” above for additional benefits that may be available in the event of a change in control in connectionwhere the Named Executive Officer is not offered a comparable position with which the restricted stock units are not converted into an equivalent award by the acquiring or successor entity.
| |
| Restricted |
| Stock |
| Vesting |
Name | ($) |
Adam M. Contos | 1,900,342 |
Nicholas R. Bailey | 507,003 |
Karri R. Callahan | 812,324 |
Ward M. Morrison | 539,081 |
Serene M. Smith | 788,297 |
(2)Information for Mr. Lewis is as of December 31, 2017, based on his restricted stock award agreements and the employment agreement that was in effect at that time. On February 8, 2018, the Company entered into the Separation Agreement with Mr. Lewis, which is described in more detail above under “Employment Agreements and Separation Agreements.”
Principal Executive Officer Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of David Liniger,Adam Contos, who has served as our principal executive officer for all of 2017.since February 2018.
We are using the same median employee that we used with respect to 2019 and 2020 compensation. We identified the median employee by examining the compensation (including annual base salary, bonuses, commissions, incentives, and overtime) of all of our employees, other than Mr. Liniger,Contos, as of November 15, 2017. We annualized2018. The employee we identified as the median employee for 2018 is in a substantially similar role and that person’s compensation of all employees and selectedhas not changed materially since being identified as the median employee.
The total compensation for 2020 of the employee identified as the median employee at our Company was $92,777.$87,789. This includes base salary of $68,300;$75,702, a bonus $7,097 (which was paid approximately half in cash and half in stock), an additional cash bonus of $11,650;$1,300, and 401(k) match of $9,000; $2,400 related to complimentary use of a golf course owned by David and Gail Liniger; and a tax gross-up of $1,427 related to the use of the golf course. For all employees, the compensation charge for the golf course use was taken and the gross-up$3,687. The median employee’s bonus was paid in 2017 but bothapproximately half cash and half stock.
The total 2020 compensation for Mr. Contos, our CEO, as reported in the charge and the gross up related to use of the golf course in 2014, 2015, 2016, and 2017. The amount for the cash bonus also includes a tax gross-up of $119 for a special $200 bonus thatSummary Compensation Table above was paid in cash.
Mr. Liniger has not received compensation, other than standard employee benefits, since our IPO in 2013. His compensation in 2017 was $0.$2,394,169. The ratio of Mr. Liniger’sour CEO’s compensation to that of the median employee for 2020 was zero. approximately 27 to 1.
Employee Benefit and Stock Plans
The 2013 Omnibus Incentive Plan
Prior to our IPO, our Board of Directors adopted the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “Omnibus Plan”) and our stockholders voted in 2017 to reapprove the Omnibus Plan. The Omnibus Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to our employees and any parent and subsidiary employees, and for the grant shares of our Class A common stock, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to our employees, directors, and consultants and to employees, directors, and consultantsthose of any affiliated entity, including RMCO and its subsidiaries. This
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40 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
is a summary of the principal features of the 2013 Omnibus Incentive Plan. This summary, however, doesPlan, not purport to be a complete description, of all of the provisions of the 2013 Omnibus Incentive Plan and is qualified in its entirety by reference to the full text of the 2013 Omnibus Incentive Plan. As of the Record Date, approximately 4044 officers, 415580 other employees, and eightnine non-employee directors were eligible to participate in the 2013 Omnibus Incentive Plan. The administrator of the Omnibus Plan also has discretion to grant awards to consultants. Weconsultants, although we have not historically granted awards to consultantsdone so and, as of the Record Date, there are no consultants the administrator would likely consider for the grant of awards. Such persons are eligible to participateParticipation in the Omnibus Plan on the basis that such participation provides eligible persons an incentive, through ownership of the Company’s common stock, to continue in service to the Company and related entities, and to helphelps the Company compete effectively with other enterprises for the services of qualified persons.
Share Reserve
The Omnibus Plan provides for annual increases in the number of shares available for issuance thereunder on the first business day of each fiscal year, beginning with our fiscal year following the year of our IPO, equal to one percent of the number of shares of our common stock outstanding on the last day of our immediately preceding fiscal year, on a fully diluted basis; or a lower number of shares determined by the plan’s administrators. After giving effect to all outstanding awards (assuming maximum achievement of performance goals for performance-based awards), there were 2,379,3331,142,468 shares available for future awards under the 2013 Omnibus Incentive Plan, as of the Record Date.
Administration
The Compensation Committee of the Board of Directors administers the Omnibus Plan and is referred to as the “administrator.” The administrator has the power to determine and interpret the terms and conditions of the awards, including the employees, directors, and consultants who will receive awards, the exercise price, the number of shares subject to each such award, the vesting schedule and exercisability of the awards, the restrictions on transferability of awards, and the form of consideration payable upon exercise. The administrator also has the authority to reduce the exercise prices of outstanding stock options and the base appreciation amount of any stock appreciation right if the exercise price or base appreciation amount exceeds the fair market value of the underlying shares, and to cancel such options and stock appreciation rights in exchange for new awards, in each case without stockholder approval.
401(k) Plan
RE/MAX, LLC maintains a tax-qualified 401(k) retirement savings plan for participants who satisfy certain eligibility requirements, including a minimum hours of service requirement. The 401(k) plan participants, including certain of our Named Executive Officers, may elect to defer up to 60% of their eligible regular compensation and bonuses, subject to applicable annual limits set pursuant to the Internal Revenue Code of 1986, as amended (the “Code”).Code. The Company may makegenerally makes discretionary matching and profit sharing contributions on behalfcontributions. Beginning in the second quarter of plan participants. Every year since 20132020, the Company has made discretionarytemporarily suspended matching contributions as part of its expense reduction measures in connection with the amountCOVID-19 pandemic. The Company is providing a match of 50%25% of contributions by plan participants.participants in 2021. Plan participants may elect to invest their contributions in various established funds. All amounts contributed to the plan and earnings on theseCompany contributions are fully vested at all times.33% for the first three years of an employee’s service, then vested 100% thereafter.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 41 |
30
DIRECTOR COMPENSATIODIRECTOR COMPENSATIONN
Our Compensation Committee is responsible for determining executive compensation. The table below illustrates the annual compensation structure for non-employee directors in 2017.2020. Directors who are also employees receive no additional compensation for their services as directors. Mr. Contos’s compensation is included with that of our other Named Executive Officers above under “Executive Compensation.”
| | | |
| | Annual | |
| | Amount | |
Element | | ($) | |
Retainer (cash) | | 80,000 | (1) |
Equity Grant (restricted stock units that vest after approximately one year) | | 100,000 | |
Additional Retainer for Lead Independent Director (cash) | | 20,000 | |
Additional Retainer for Audit Committee Chair (cash) | | 25,000 | |
Additional Retainer for Audit Committee Member (cash) | | 12,500 | |
Additional Retainer for Compensation Committee Chair (cash) | | 15,000 | |
Additional Retainer for Compensation Committee Member (cash) | | 5,000 | |
Additional Retainer for Nominating and Corporate Governance Committee Chair (cash) | | 10,000 | |
Additional Retainer for Nominating and Corporate Governance Committee Member (cash) | | 5,000 | |
(1) This amount was increased from $60,000 on February 22, 2017.
| | |
|
| Annual |
| | Amount |
Element | | ($) |
Retainer (cash) | | 80,000 |
Equity Grant (restricted stock units that vest after approximately one year) | | 100,000 |
Additional Retainer for Lead Independent Director (cash) | | 30,000 |
Additional Retainer for Audit Committee Chair (cash) | | 25,000 |
Additional Retainer for Audit Committee Member (cash) | | 12,500 |
Additional Retainer for Compensation Committee Chair (cash) | | 15,000 |
Additional Retainer for Compensation Committee Member (cash) | | 5,000 |
Additional Retainer for Nominating and Corporate Governance Committee Chair (cash) | | 10,000 |
Additional Retainer for Nominating and Corporate Governance Committee Member (cash) | | 5,000 |
Additional Retainer for Finance and Investment Committee Chair (cash) | | 10,000 |
Additional Retainer for Finance and Investment Committee Member (cash) | | 5,000 |
The following table shows director compensation for fiscal year 2017.2020.
| | | | | | | | |
| | Fees Earned or | | Stock | | All Other | | |
| | Paid in Cash | | Awards | | Compensation | | |
Name | | ($) | | ($)(1) | | ($) | | Total ($) |
Richard O. Covey | | 100,000 | | 100,032 | | 69,875 | (2) | 269,907 |
Kathleen J. Cunningham | | 105,000 | | 100,032 | | 69,875 | (2) | 274,907 |
Joseph A. DeSplinter | | 87,500 | | 100,032 | | 1,085 | (3) | 188,617 |
Roger J. Dow | | 90,000 | | 100,032 | | 1,085 | (3) | 191,117 |
Ronald E. Harrison | | 92,500 | | 100,032 | | 1,085 | (3) | 193,617 |
David L. Liniger (4) | | — | | — | | — | | — |
Gail A. Liniger (4) | | — | | — | | — | | — |
Daniel J. Predovich | | 75,000 | | 100,032 | | 61,810 | (5) | 236,842 |
Christine M. Riordan | | 90,000 | | 100,032 | | 1,085 | (3) | 191,117 |
Teresa S. Van De Bogart | | 87,500 | | 100,032 | | 34,104 | (6) | 221,636 |
| | | | | | | | |
| | Fees Earned or | | Stock | | All Other | | |
| | Paid in Cash | | Awards | | Compensation | | |
Name | | ($) | | ($)(1) | | ($)(2) | | Total ($) |
Kathleen J. Cunningham | | 110,000 | | 100,014 | | 2,141 | | 212,155 |
Joseph A. DeSplinter | | 102,500 | | 100,014 | | 2,141 | | 204,655 |
Roger J. Dow | | 125,000 | | 100,014 | | 2,702 | | 227,716 |
Ronald E. Harrison | | 90,000 | | 100,014 | | 2,141 | | 192,155 |
Stephen P. Joyce | | 65,000 | | — | | — | | 65,000 |
Laura G. Kelly | | 68,750 | | — | | — | | 68,750 |
David L. Liniger (3) | | — | | — | | — | | — |
Gail A. Liniger (3) | | — | | — | | — | | — |
Daniel J. Predovich | | 85,000 | | 100,014 | | 2,141 | | 187,155 |
Christine M. Riordan | | 95,000 | | 100,014 | | 2,141 | | 197,155 |
Teresa S. Van De Bogart | | 97,500 | | 100,014 | | 2,141 | | 199,655 |
(1) Reflects the grant date fair value of restricted stock units granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 1213 to our audited consolidated financial statements in our 20172020 Annual Report. As of December 31, 2017,2020, each director named in the table above, other than Mr. and Mrs. Liniger, Mr. Joyce, and Ms. Kelly had 1,8043,431 unvested restricted stock units, which were scheduled to vestvested on AprilMarch 1, 2018. 2021.
(2) Reflects dividend equivalents paid in cash upon settlement of restricted stock units, complimentary use of a golf course owned by the Linigers during 2014, 2015, 2016, and 2017 ($32,400), and a tax gross up for the use of the golf course during the same time period ($36,390), on a basis similar to that granted to officers and employees.units.
(3) Reflects dividend equivalents paid in cash upon settlement of restricted stock units.
(4) Since our IPO in 2013, Mr. and Ms. Liniger have not received compensation for their service as directors or officers (other than benefits similar to otherour employees) for their service as officers or directors.
(5) Reflects dividend equivalents paid in cash upon settlement of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger during 2014, 2015, 2016, and 2017 ($25,200), travel involving hotel and air provided by David and Gail
Liniger on a complimentary basis for Mr. Predovich’s benefit, and a tax gross up for the use of the golf course during the same time period ($28,303), on a basis similar to that granted to officers and employees.
(6) Reflects dividend equivalents paid in cash upon settlement of restricted stock units, complimentary use of a golf course owned by David and Gail Liniger during 2016 and 2017 ($15,600) and a tax gross up for the use of the golf course during the same time period ($17,521), on a basis similar to that granted to officers and employees..
In addition to the amounts in the table above, all directors receive reimbursement for reasonable out-of-pocket expenses incurred in connection with meetings of our Board of Directors.
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42 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
32
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTMANAGEMENT
The following table sets forth information regarding the beneficial ownership of our Class A common stock and Class B common stock by (i) each of our directors, (ii) each of our Named Executive Officers, (iii) our directors and executive officers as a group, and (iv) each person known to us to beneficially own more than 5% of our voting securities. For our directors and executive officers, the information is as of the Record Date, unless otherwise noted.date of this Proxy Statement. For stockholders who own more than 5% of our Class A common stock, the information is as of the most recent form 13G filed by each such stockholder with the SEC. Unless otherwise noted, the address of each stockholder is c/o RE/MAX Holdings, Inc. 5075 S. Syracuse St., Denver, CO 80237.
We have determined beneficial ownership in accordance with SEC rules. The information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of common stock deemed outstanding includes shares issuable upon exercise of options or conversion rights held by the respective person or group that may be exercised or converted within 60 days after March 31, 2021, which is the Recordrecord date for the Annual Meeting (the “Record Date.”)
Pursuant to RMCO’s Fourth Amended and Restated Operating Agreement, common units in RMCO are redeemable at the unitholders’ election for, at our option, shares of Class A common stock of RE/MAX Holdings on a one-for-one basis (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions and adjustments for stock splits, stock dividends and reclassifications) or a cash payment equal to the market price of one share of our Class A common stock for each common unit redeemed. Beneficial ownership of common units reflected in the following table is not reflected as beneficial ownership of shares of our Class A common stock for which such units may be redeemed.
| | | | | | | | | | | | | | |
| | Class A | | RMCO Common Units | | Class B (1) | | Combined Voting Power of Class A and Class B |
Directors and Named Executive Officers | | Number | | Percentage | | Number | | Percentage | | Number | | Percentage | | Percentage |
David L. Liniger (2) | | — | | * | | 12,559,600 | | 41.46% | | 1 | | 100.00% | | 58.62% |
Gail A. Liniger (2) | | — | | * | | 12,559,600 | | 41.46% | | 1 | | 100.00% | | 58.62% |
Karri R. Callahan | | 6,017 | | * | | — | | * | | — | | * | | * |
Adam M. Contos | | 6,995 | | * | | — | | * | | — | | * | | * |
Richard O. Covey (3) | | 8,927 | | * | | — | | * | | — | | * | | * |
Kathleen J. Cunningham | | 10,627 | | * | | — | | * | | — | | * | | * |
Joseph A. DeSplinter | | 3,613 | | * | | — | | * | | — | | * | | * |
Roger J. Dow | | 12,427 | | * | | — | | * | | — | | * | | * |
Ronald E. Harrison | | 12,427 | | * | | — | | * | | — | | * | | * |
Dan J. Predovich | | 3,633 | | * | | — | | * | | — | | * | | * |
Christine M. Riordan | | 5,154 | | * | | — | | * | | — | | * | | * |
Serene M. Smith | | 3,317 | | * | | | | | | | | | | |
Teresa S. Van De Bogart | | 3,443 | | * | | — | | * | | — | | * | | * |
Geoffrey D. Lewis | | 10,815 | | * | | — | | * | | — | | * | | * |
Directors and executive officers as a group (13 persons) (4) | | 76,580 | | * | | 12,559,600 | | 41.46% | | 1 | | 100.00% | | 58.79% |
5% Stockholders | | | | | | | | | | | | | | |
RIHI (5) | | — | | * | | 12,559,600 | | 41.46% | | 1 | | 100.00% | | 58.62% |
T. Rowe Price Associates, Inc. (6) | | 2,164,273 | | 12.20% | | — | | * | | — | | * | | 5.05% |
BlackRock, Inc. (7) | | 2,272,813 | | 12.82% | | — | | * | | — | | * | | 5.30% |
Kayne Anderson Rudnick Investment Management LLC (8) | | 1,691,112 | | 9.54% | | — | | * | | — | | * | | 3.95% |
Burgundy Asset Management Ltd. (9) | | 1,518,391 | | 8.56% | | — | | * | | — | | * | | 3.54% |
Van Berkom & Associates Inc. (10) | | 1,218,158 | | 6.87% | | — | | * | | — | | * | | 2.84% |
Waddell & Reed Financial Inc. (11) | | 971,930 | | 5.48% | | — | | * | | — | | * | | 2.27% |
The Vanguard Group (12) | | 927,184 | | 5.23% | | — | | * | | — | | * | | 2.16% |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Combined |
| | | | | | | | | | | | | | Voting Power |
| | | | | | | | | | | | | | of Class A |
| | | | | | | | | | | | | | and |
| | Class A | | RMCO Common Units | | Class B (1) | | Class B |
Directors and Named Executive Officers | | Number | | Percentage | | Number | | Percentage | | Number | | Percentage | | Percentage |
David L. Liniger (2) | | 353,711 | | 1.87% | | 12,559,600 | | 39.93% | | 1 | | 100.00% | | 41.06% |
Gail A. Liniger (2) (3) | | 353,711 | | 1.87% | | 12,559,600 | | 39.93% | | 1 | | 100.00% | | 41.06% |
Nicholas R. Bailey | | 7,751 | | * | | — | | * | | — | | * | | * |
Karri R. Callahan | | 18,498 | | * | | — | | * | | — | | * | | * |
Adam M. Contos | | 32,770 | | * | | — | | * | | — | | * | | * |
Kathleen J. Cunningham | | 18,527 | | * | | — | | * | | — | | * | | * |
Joseph A. DeSplinter | | 11,863 | | * | | — | | * | | — | | * | | * |
Roger J. Dow | | 29,427 | | * | | — | | * | | — | | * | | * |
Ronald E. Harrison | | 20,327 | | * | | — | | * | | — | | * | | * |
Stephen P. Joyce | | — | | * | | — | | * | | — | | * | | * |
Laura G. Kelly | | — | | * | | — | | * | | — | | * | | * |
Ward M. Morrison | | 7,305 | | * | | — | | * | | — | | * | | * |
Dan J. Predovich | | 6,940 | | * | | — | | * | | — | | * | | * |
Christine M. Riordan | | 13,054 | | * | | — | | * | | — | | * | | * |
Serene M. Smith | | 11,581 | | * | | — | | * | | — | | * | | * |
Teresa S. Van De Bogart | | 11,343 | | * | | — | | * | | — | | * | | * |
Directors and executive officers as a group (16 persons) | | 546,902 | | 2.87% | | 12,559,600 | | 39.93% | | 1 | | 100.00% | | 41.67% |
5% Stockholders | | | | | | | | | | | | | | |
RIHI (4) | | — | | * | | 12,559,600 | | 39.93% | | 1 | | 100.00% | | 39.93% |
BlackRock, Inc. (5) | | 3,480,799 | | 18.43% | | — | | * | | — | | * | | 11.07% |
The Vanguard Group (6) | | 2,064,437 | | 10.93% | | — | | * | | — | | * | | 6.56% |
Burgundy Asset Management Ltd. (7) | | 1,811,906 | | 9.59% | | — | | * | | — | | * | | 5.76% |
Renaissance Technologies LLC (8) | | 1,243,800 | | 6.58% | | — | | * | | — | | * | | 3.95% |
Dimensional Fund Advisors LP (9) | | 974,762 | | 5.16% | | — | | * | | — | | * | | 3.10% |
* Less than 1%
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 43 |
(1) RIHI, Inc. (“RIHI”), as holder of Class B common stock, is entitled to, without regard to the number of shares of Class B common stock held, a number of votes on matters presented to stockholders of RE/MAX Holdings that is equal to two times the aggregate number of common units of RMCO that such stockholder holds. TheseRIHI is majority owned and controlled by Dave Liniger, our Chair, and Co-Founder and Gail Liniger, our Vice Chair and Co-Founder. As such, Mr. and Mrs. Liniger have dispositive, voting, rights will be reduced to equaland investment control over the aggregate number of
RMCO common units held after any ofby RIHI. For more information concerning RIHI, see Certain Relationships and Related Party Transactions > Relationships Arising from Our Historical Ownership and Relationships with the following occur: (i) October 7, 2018; (ii) the death of the Company’s ChairLinigers and Co-Founder, David Liniger; or (iii) RIHI’s ownership of RMCO common units falls below 5,320,380 common units.Liniger-Related Entities.
(2) Includes common units in RMCO held by RIHI which may be redeemed at RIHI’s election for, at our option, shares of Class A common stock of RE/MAX Holdings on a one-for-one basis (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions, and adjustments for stock splits, stock dividends and reclassifications) or cash. Mr. and Mrs. Liniger have dispositive, voting, and investment control over such common units in RMCO.
(3) Shares areThe Class A common stock listed is owned by the Richard O. Covey living trust. Dave Liniger, Gail Liniger’s husband.
(4) Does not include shares held by Mr. Lewis because he is no longer an executive officer.
(5) Includes common units in RMCO which may be redeemed at RIHI’s election for, at our option, shares of Class A common stock of RE/MAX Holdings on a one-for-one basis (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions, and adjustments for stock splits, stock dividends, and reclassifications) or cash. RIHI is majority owned and controlled by David Liniger, our Chair, and Co-Founder and Gail Liniger, our Vice Chair and Co-Founder. As such, Mr. and Mrs. Liniger have dispositive, voting, and investment control over the common units held by RIHI.
(6) Based solely on a Schedule 13G/A jointly filed on February 12, 2018 by T. Rowe Price Associates, Inc. (“TRP”) and T. Rowe Price New Horizons Fund, Inc. (“NHF”). TRP reported sole voting power with respect to 414,412 shares and sole dispositive power with respect to 2,164,273 shares. NHF reported sole voting power with respect to 900,067. TRP denies beneficial ownership of the securities reported on the Schedule 13G/A. In such filing, the address for TRP and NHF is 100 E. Pratt Street, Baltimore, MD 21202.
(7)(5) Based solely on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) on January 19, 2018.25, 2021. BlackRock reported sole voting power with respect to 2,227,7863,342,587 shares and sole dispositive power with respect to 2,272,8133,480,799 shares. In such filing, BlackRock lists its address as 55 East 52nd Street, New York, NY 10055.
(8)(6) Based solely on a Schedule 13G filed by Kayne Anderson Rudnick Investment Management LLCThe Vanguard Group (“Kayne Anderson”Vanguard”) on February 13, 2018. Kayne Anderson10, 2021. Vanguard reported soleshared voting power andwith respect to 18,102 shares, sole dispositive power with respect to 1,289,4922,030,512 shares, shared voting power and shared dispositive power with respect to 401,620.33,925 shares. In such filing, Kayne AndersonVanguard lists its address as 1800 Avenue of the Stars, 2nd Floor, Los Angeles, CA 90067.100 Vanguard Blvd., Malvern PA 19355.
(9)(7) Based solely on a Schedule 13G/A filed on February 12, 2018 by Burgundy Asset Management Ltd. (“Burgundy”). on February 12, 2021. Burgundy reported sole voting power with respect to 1,132,9671,283,119 shares and sole dispositive power with respect to 1,518,3911,811,906 shares. In such filing, Burgundy lists its address as 181 Bay St., Suite 4510, Toronto, Ontario M5J 2T3, Canada.
(10) (8) Based solely on a Schedule 13G filed by Van Berkom & Associates Inc.Renaissance Technologies, LLC (“VB”Renaissance”) on February 13, 2018. VB11, 2021. Renaissance reported sole voting power and sole dispositive power with respect to all shares reported.1,243,800 shares. In such filing, VBRenaissance lists its address as 1130 Sherbrooke Street West, Suite 1005, Montreal, Quebec H3A 2M8, Canada. VB disclaims beneficial ownership of the shares reported, except to the extent of its pecuniary interest therein.800 Third Avenue, New York, NY 10022.
(11) Based solely on a Schedule 13G jointly filed on February 14, 2018 by Ivy Investment Management Company (“IICO”); Waddell & Reed Investment Management Company (“WRIMCO”); Waddell & Reed, Inc. (“WRI”); Waddell & Reed Financial Services, Inc. (“WRFSI”); and Waddell & Reed Financial, Inc. (“WDR”), According to such filing, IICO is an investment advisory subsidiary of WDR or WRIMCO, an investment advisory subsidiary of WRI; WRI is a broker-dealer and underwriting subsidiary of WRFSI, a subsidiary of WDR. The filing shows the following sole voting and sole dispositive power: IICO: 540,170 (direct); WRIMCO: 431,760 (direct); WRI: 431,760 (indirect); WRFSI: 431,760 (indirect); and WDR: 971,930 (indirect). In the filing, the address for each of for each of Ivy, WRI, WRFSI, WRFI, and WRI is listed as 6300 Lamar Avenue, Overland Park, KS.
(12)(9) Based solely on a Schedule 13G filed by The Vanguard GroupDimensional Fund Advisors LP (“Vanguard”Dimensional”) on February 9, 2018. Vanguard12, 2021. Dimensional reported sole voting power with respect to 19,714974,762 shares shared voting power with respect to 1,411 shares,and sole dispositive power with respect to 907,648 shares, and shared dispositive power with respect to 19,536906,634 shares. In such filing, VanguardDimensional lists its address as 100 Vanguard Blvd., Malvern PA 19355.Building One, Bee Cave Road, Austin, TX 78746.
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44 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
34
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers, and persons who beneficially own more than 10% of the Company’s common stock, to file reports of beneficial ownership and reports of changes in beneficial ownership with the SEC. Such persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports that they file. We assist our directors and officers with their Section 16(a) filings. Based solely on a review of reports filed with the SEC and written representations from directors and executive officers, we believe that all required reports under Section 16(a) were timely filed during 2017.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONSTRANSACTIONS
The RE/MAX Holdings Code of Conduct notes that a conflict of interest arises any time the personal interests of Company personnel (including Directors) interfere with, or could appear to interfere with, their ability to act in the best interests of RE/MAX Holdings. Company personnel must disclose any potential conflicts of interest – including those involving an immediate family member – to the Chief Compliance Officer. Conflicts of interest involving any member of the RE/MAX Holdings Board of Directors are addressed by the Board of Directors or an applicable committee. Our Code of Conduct is supplemented by our Related Party Transactions Policy.
We describe below certain relationships between us and our executives and our historical owners, and the transactions described below include, in particular, any transactions and series of similar transactions, during 2017,2020, to which we were a participant or will be a participant, in which:
● the amounts involved exceeded or will exceed $120,000;$120,000 and
● any of our directors, executive officers, holders of more than 5% of our capital stock (which we refer to as 5% stockholders), or any member of their immediate family had or will have a direct or indirect material interest, other thanexcept that, for compensation arrangements with directors and executive officers, which are described where required in the Compensationagreements with our executive officers containing compensation and termination provisions, and separation agreements, please see “Compensation Disclosure and Analysis,” the compensation tables“Compensation Tables,” “Employment Agreements and Separation Agreements,” and “Director Compensation” above.
Relationships Arising from Our Historical Ownership and Relationships with the Linigers and Liniger-Related Entities
The first RE/MAX company, our predecessor, was founded in 1973 by Dave and Gail Liniger, who still serve as our Chair and Vice Chair, respectively. At the time of our 2013 IPO, RMCO was owned by RIHI. RIHI is (and was at the time of our IPO) majority owned and controlled by the Linigers. As such, the Linigers have dispositive, voting, and investment control over the common units held by RIHI. RIHI remains a significant stockholder of the Company, and through its ownership of all of our Class B common stock, holds approximately 40% of the voting power of the Company’s common stock. (Dave Liniger also owns individually slightly less than 2% of our Class A common stock.)
As discussed above, the Linigers have a very close, family-like relationship with our CEO, Adam Contos, and underhis family. As a result, Mr. Contos has represented that he intends to recuse himself from any matters relating to the section titled “Director Compensation.”Company’s relationship with RIHI or the Linigers.
At the time of our IPO, we entered into several ongoing agreements with RIHI, and the Company has certain other relationships with Liniger entities, Sanctuary, Inc. and EDR Travel, Inc. (“EDR”), as discussed below.
Registration Rights Agreement
We entered into a registration rights agreement with RIHI in connection with our IPO. The registration rights agreement provides RIHI certain registration rights whereby at any time following our IPO and the expiration of any related lock-up period, it can require us to register, under the Securities Act of 1933, shares owned by it and not sold in our IPO.it. The registration rights agreement also provides for piggyback registration rights for all stockholders that are parties to the agreement.
Tax Receivable Agreements
In connection withAs discussed in our Annual Report on Form 10-K (see “Holdings Ownership of RMCO and Tax Receivable Agreements”), RE/MAX Holdings has twice acquired common units in RMCO from RIHI, a corporation that is majority owned and controlled by Dave and Gail Liniger. The first was at the time of our IPO we entered into certain transactions whichin October 2013 and the second was in November and December 2015. These acquisitions are expected to have the effect of reducingreduce the amounts that we would otherwise pay in the future to various tax authoritiestaxes as a result of increasing our share ofa step-up in tax basis on the underlying assets held by RMCO. The assets are amortizable and result in RMCO’s tangibledeductions on our tax returns for many years. If RE/MAX Holdings acquires additional common units of RMCO from RIHI, the percentage of RE/MAX Holdings’ ownership of RMCO will increase, and intangible assets.additional tax assets will be created as additional tax basis step-ups occur. In connection with the first of these transactions,acquisitions, we entered into a separate tax receivable agreement with each ofRIHI and a substantially similar agreement with RMCO’s two historical owners, including RIHI.other pre-IPO owner. These agreements provide for the payment byrequire us to pay the counterparties to the agreements of 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that we actually realize, or in some circumstances are deemed to realize, as a result of an expected increasethe step-up in our share of tax basis inon RMCO’s tangible and intangible assets, including increases attributable to payments made under the tax receivable agreements, and deductions attributable to imputed and actual interest that accrues in respectassets.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 45 |
For purposes of the tax receivable agreements, cashtax savings in income and franchise tax are computed by comparing our actual income and franchise tax liability to the amount of such taxes that we would have been required to pay had there been no increasepaid without the step-up in our share of tax basis in RMCO’s tangible and intangible assets and had the tax receivable agreements not been entered into. The tax receivable agreements generally apply to each of our taxable years and began with the first taxable year ending after the consummation of the IPO.assets. There is no maximum term for the tax receivable agreements; however, we may terminate the tax receivable agreements may be terminated by us pursuant to an early termination procedure that requires us to paypaying the counterparties an agreed upon amount equal to the estimated present value of the remaining payments to be made under the agreement.agreements.
The actual timing and amount of any payments that may be made under the tax receivable agreements will vary depending upon a number ofbased on facts and circumstances that are beyond our control (including the timing and amount of any redemption of common units by RIHI, the trading price of our shares of Class A common stock at the time of any such redemptions, and the impact of foreign taxes, amount and timing of our taxable income (if any), and the applicable tax rate). However, the payments that we may be required to make to the counterparties could be substantial. Any payments made by us to the counterparties to the tax receivable agreements will generally reduce the amount of overall cash flow that might have otherwise been available to us or to RMCO and, to the extent thatIf we are unable todo not make payments under the tax receivable agreements for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us.paid.
The tax receivable agreements provide that if certain mergers, asset sales, other forms of business combination or other changes of control were to occur, or that if at any time, we elect an early termination of the tax receivable agreements, then our obligations or our successor’s obligations, under the tax receivable agreements would be based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the tax receivable agreements.
As a result, (i) we could be required to make cash payments to the counterparties that are greater than the specified percentage of the actual benefits we ultimately realize, and (ii) if we elect to terminate the tax receivable agreements early, we would be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the tax receivable agreements, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits.
The tax receivable agreements provide that we may, at our option, make one or more estimated payments to the counterparties in respect of any anticipated payments required under the tax receivable agreements. Any estimated payments made under the terms of the tax receivable agreements are subject to adjustment pending a final determination of the actual payments required under the tax receivable agreements.realize.
We will also not be reimbursed for any cash payments previously made to the counterparties to the tax receivable agreements if any tax benefits initially claimed by us are subsequently challengeddisallowed by a taxing authority and are ultimately disallowed.authority. Instead, any excess cash payments made by us to a counterparty willwould be netted against any future cash payments that we might otherwise be required to make under the terms of the tax receivable agreements. However, we might not determine that we have effectively made an excess cash payment to the counterparties for a number of years following the initial time of such payment. As a result,Therefore, it is possible that we could make cash payments under the tax receivable agreements that are substantially greater thanexceed our actual cash tax savings. Although we are not currently aware of any reason why any tax basis increases or other tax benefits would be challenged by a taxing authority, if we determine that any tax basis increases or other tax benefits may be subjected to a reasonable challenge or are being challenged by a taxing authority, we may withhold some or all of the payments otherwise due to the counterparties under the tax receivable agreements in an interest-bearing escrow account until such a challenge is no longer possible or is otherwise resolved.
We will have full responsibility for, and sole discretion over, all RE/MAX Holdings tax matters, including the filing and amendment of all tax returns and claims for refund and defense of all tax contests, subject to certain participation rights held by the counterparties.
Payments are generally due under the tax receivable agreements within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 100 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the tax receivable agreements will continue to accrue interest at LIBOR plus 300 basis points until such payments are made, including any late payments that we may subsequently make because we did not have enough available cash to satisfy our payment obligations at the time at which they originally arose.
We entered into the tax receivable agreements on October 7, 2013. During 2017,2020, we made payments under the tax receivable agreement with RIHI of approximately $5.6 million, of which $1.9 million relates to tax year 2015 and $3.7 million relates to tax year 2016.$2.1 million.
RMCO Operating Agreement
In connection with our IPO, RE/MAX Holdings, RIHI and RMCO entered into RMCO’s fourth amended and restated limited liability company agreement (the “RMCO Agreement”).
Appointment as Manager. Under the restated RMCO Agreement, we are a member and the sole manager of RMCO. As the sole manager, we, through our officers and directors, control all of the day-to-day business affairs and decision-making of RMCO without the approval of any other member. As such, we, through our officers and directors, are responsible for all operational and administrative decisions of RMCO and the day-to-day management of RMCO’s business. Pursuant to the terms of the RMCO Agreement, we also cannot, under any circumstances, be removed as the sole manager of RMCO. Except as necessary to avoid being classified as an investment company or with the approval of RIHI, as long as we are the sole manager of RMCO, our business is limited to owning and dealing with our common units of RMCO, managing the business of RMCO, and fulfilling our obligations under the Exchange Act, and activities incidental to the foregoing.
Compensation. We are not entitled to compensation for our services as manager except as provided in the management services agreement described below under “Management Services Agreement,” or as otherwise approved by a vote of the members holding a majority of the outstanding common units. We are entitled to reimbursement by RMCO pursuant to the management services agreement for our reasonable out-of-pocket expenses incurred on its behalf.
Distributions. The RMCO Agreement requires “tax distributions” to be made by RMCO to its members, as that term is defined in the agreement. Tax distributions will be made pro rata on a quarterly basis to each member of RMCO, including us, such
that each member will receive a tax distribution that is proportionate to its percentage interest in RMCO (based on the number of common units in RMCO that it holds relative to the total number of outstanding common units of RMCO) and that is sufficient to satisfy its tax liability based on such member’s allocable share of the taxable income of RMCO and an assumed tax rate that will be determined by us. For this purpose, the taxable income of RMCO, and RE/MAX Holdings’ allocable share of such taxable income, shall be determined without regard to any current or future amortization deductions attributable to (i) tax basis adjustments that RE/MAX Holdings may receive under Section 743(b) of the Code and (ii) RE/MAX Holdings’ proportionate share of RMCO’s existing tax basis in previously acquired assets that result, in each case, from RE/MAX Holdings’ deemed or actual purchase of an equity interest in RMCO from our historical owners (as described above under “Tax Receivable Agreements”). The assumed tax rate that we expect to use for purposes of determining tax distributions from RMCO to its members will approximate our reasonable estimate of the highest combined federal, state (based on the highest individual tax rate in the state of Colorado), and local tax rate that may potentially apply to any one of RMCO’s members, regardless of the actual final tax liability of any such member. Tax distributions will also be made only to the extent all distributions from RMCO for the relevant period were otherwise insufficient to enable each member to cover its tax liabilities as calculated in the manner described above.liabilities. The RMCO Agreement also allows for distributions to be made by RMCO to its members out of “distributable cash,” as that term is defined in the agreement. We expect that distributions out of distributable cash will be made pro rata on a quarterly basis to the extent necessary to enable RE/MAX Holdings to cover its operating expenses and other obligations, including any obligations that RE/MAX Holdings may have under the tax receivable agreements that it entered into with RMCO’s historicalpre-IPO owners (as described above under “Tax Receivable Agreements”), and to make anticipated dividend payments to the holders of its Class A common stock.
Transfer Restrictions. The RMCO Agreement generally restricts transfers of common units of RMCO, subject to limited exceptions. Any transferee of common units must assume, by operation of law or written agreement, all of the obligations
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46 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
of a transferring member with respect to the transferred units, even if the transferee is not admitted as a member of RMCO. Additionally, in the event that any common units of RMCO are validly transferred in accordance with the terms of the RMCO Agreement, the voting rights of the corresponding shares of Class B common stock to be transferred shall be reduced to one times the aggregate number of RMCO common units held by such transferee, unless the transferee is David Liniger.
Common Unit Redemption Right. The RMCO Agreement provides a redemption right to RIHI which entitles RIHI to have its common units of RMCO redeemed for our shares of Class A common stock on a one-for-one basis, (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions, and adjustments for stock splits, stock dividends, and reclassifications), or at our option, a cash payment equal to the market price of one share of our common stock. If we decide to make a cash payment, RIHI has the option to rescind its redemption request within a specified time period. If we decide to make a cash payment and RIHI has not rescinded, we are obligated to sell to a third party a number of shares of our Class A common stock equal to the number of redeemed common units, so as to ensure that the number of common units in RMCO that we own will equal the number of our outstanding shares of Class A common stock. Upon the exercise of its redemption right, RIHI will surrender common units to RMCO for cancellation. Pursuant to our amended and restated certificate of incorporation, we will then contribute cash or shares of our Class A common stock to RMCO in exchange for an amount of newly issued common units in RMCO equal to the number of common units redeemed by RIHI. RMCO will then distribute the cash or shares of our Class A common stock to RIHI to complete the redemption. In connection with RIHI’s exercise of its redemption right, RE/MAX Holdings may also, in its sole discretion,instead elect to acquire RIHI’s common units in RMCO from RIHI. In the event of such an election, and as an alternative to RIHI, engaging in a redemption transaction with RMCO,which case RE/MAX Holdings would instead directly acquire RIHI’s common units in RMCO on the same terms as if RIHI had engaged in a redemption transaction with RMCO as previously described above.
Issuance of RMCO Common Units Upon Exercise of Options or Issuance of Other Equity Compensation. Upon the exercise of options we have issued or the issuance of other types of equity compensation (such as the issuance of restricted or non-restricted stock, payment of bonuses in stock or settlement of stock appreciation rights in stock), we have the right to acquire from RMCO a number of common units equal to the number of our shares of Class A common stock being issued in connection with the exercise of options or issuance of other types of equity compensation.as a result. We will contribute to RMCO the amount of any consideration we receive for the exercise of options or for shares issued pursuant to other types ofthat equity compensation.
Dissolution. The RMCO Agreement provides that the unanimous consent of all members holding common units will be required to voluntarily dissolve RMCO. In addition to a voluntary dissolution, RMCO will be dissolved upon the entry of a decree of judicial dissolution in accordance with Delaware law. Upon a dissolution event, the proceeds of a liquidation will be distributed in the following order: (i) first, to pay the expenses of winding up RMCO; (ii) second, to pay debts and liabilities owed to creditors of RMCO; and (iii) third, to the members pro rata in accordance with their respective percentage ownership interests in RMCO (as determined based on the number of common units held by a member relative to the aggregate number of all outstanding common units).RMCO.
Confidentiality. Each member agrees to maintain the confidentiality of RMCO’s intellectual property and other confidential information.
Indemnification. The RMCO Agreement provides for indemnification of the manager, members and officers of RMCO and their respective subsidiaries or affiliates.
SSB Consulting Group LLCSanctuary Golf Course
SSB Consulting Group, LLC (“SSB”)Sanctuary, Inc. is an information technology vendora company owned by Dave and Gail Liniger that the Company retainedowns and manages Sanctuary, a private golf course located near Denver, Colorado. We pay Sanctuary, Inc. for various projects including discovery on information technology architecture, due diligencecorporate meetings and other services in connection with the acquisition of Booj, LLC by RE/MAX, LLC,events held at Sanctuary and assistance with vendor selection for an enterprise-wide data management platform. The husband and brother-in-law of Serene Smith, our Chief Operating Officer, were part-owners of SSB until February 28, 2018. The Company originally retained SSB in 2016, but the Company’s engagement of SSBcatering services. Sanctuary was not a transaction with aopen during 2020 and therefore Company amounts paid to Sanctuary in 2020 were de minimis.
Other Related Party until Ms. Smith’s promotion to Chief Operating Officer in May 2017. During 2017 we paid SSB approximately $260,000. Following Ms. Smith’s promotion, in September 2017, the Audit Committee ratified the engagement of SSB for the completed and then in-progress projects described above. Furthermore, in response to the Related Party relationship, the Audit Committee required that the Company not engage SSB for any other work without obtaining approval by the Audit Committee. Transactions
Management Services Agreement
In connection with our IPO, we entered into a management services agreement with RMCO pursuant to which we provide certain management services to RMCO. In exchange for the services we provide, RMCO reimburses us for compensation and other expenses of our officers and employees and for certain out-of-pocket costs. RMCO also provides administrative and support services to us, such as office facilities, equipment, supplies, payroll, and accounting and financial reporting. The management services agreement also provides that our employees may participate in RMCO’s benefit plans, and that RMCO employees may participate in our 2013 Omnibus Incentive Plan. RMCO will indemnify us for any losses arising from our performance under the management services agreement, except that we will indemnify RMCO for any losses caused by our willful misconduct or gross negligence.
Director and Officer Indemnification and Insurance
We have entered into indemnification agreements with certain of our directors and executive officers, and purchased directors’ and officers’ liability insurance. The indemnification agreements and our Amended and Restated Certificate of Incorporation and Bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.
Executive Compensation, Employment Arrangements, Retirement Agreement, and Separation AgreementAgreements
Please see “Compensation Disclosure and Analysis,” “Compensation Tables,” and “Employment Agreements and Separation Agreements” for information on compensation arrangements with our executive officers, agreements with our executive officers containing compensation and termination provisions, among others, and the Separation Agreement with our former President. provisions.
Director and Officer Indemnification and Insurance
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 47 |
We have entered into indemnification agreements with certain
Policies and Procedures Regarding Related Party Transactions
We have adopted a written policy with respect to related party transactions. Under this policy, a “Related Party Transaction” is any financial transaction, arrangement or relationship (or series of similar transactions, arrangements, or relationships) in which we are or any of our subsidiaries is a participant and in which a Related Party has or will have a direct or indirect interest, other than any transactions, arrangements or relationships in which the aggregate amount involved will not or may not be expected to exceed $120,000 in any calendar year, subject to certain exceptions. A “Related Party” is any of our executive officers, directors or director nominees, any stockholder directly or indirectly beneficially owning in excess of 5% of our stock or securities exchangeable for our stock, or any immediate family member of any of the foregoing persons.
Pursuant to our related party transaction policies and procedures, any Related Party Transaction must be reviewed by the Audit Committee. In connection with its review of a Related Party Transaction, the Audit Committee may take into account, among other factors it deems appropriate, whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the Related Party Transaction.
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39
PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITOR
Our Audit Committee has appointed KPMG as our independent auditor for the fiscal year ending December 31, 2018. Although stockholder ratification of the appointment of KPMG is not required by law, we are submitting the appointment to our stockholders for ratification as a matter of good corporate governance. The ratification of the appointment of KPMG requires the affirmative vote of a majority of the votes cast at the Annual Meeting. If stockholders do not ratify the appointment of KPMG, the Audit Committee will reconsider the appointment. Even if stockholders ratify the appointment of KPMG, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change would be in the best interests of the Company and its stockholders.
Representatives of KPMG are expected to attend the Annual Meeting and will have an opportunity to make a statement if they desire to do so.
RECOMMENDATION OF THE BOARD: The Board of Directors recommends that you vote FOR the ratification of KPMG as our independent auditor for the fiscal year ending December 31, 2018.
KPMG FeesREGISTERED PUBLIC ACCOUNTING FIRM
What am I voting on? Stockholders are asked to ratify the Audit Committee’s appointment of KPMG as the independent registered public accounting firm for 2020. | | | Our Audit Committee has appointed KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2021. Although stockholder ratification of the appointment of KPMG is not required by law, we are submitting the appointment to our stockholders for ratification as a matter of good corporate governance. The ratification of the appointment of KPMG requires the affirmative vote of a majority of the votes cast at the Annual Meeting. If stockholders do not ratify the appointment of KPMG, the Audit Committee will reconsider the appointment. Even if stockholders ratify the appointment of KPMG, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change would be in the best interests of the Company and its stockholders. Representatives of KPMG are expected to attend the Annual Meeting and will have an opportunity to make a statement if they desire to do so. RECOMMENDATION OF THE BOARD: The Board of Directors recommends that you vote FOR the ratification of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2021. KPMG Fees |
What is the Board’s voting recommendation? The Board recommends voting FOR the ratification of KPMG. | | | |
What is the required vote? This item requires the vote of a majority of shares voted. | | | |
The following table presents aggregate fees billed to the Company for services rendered by KPMG during the fiscal years ended December 31, 20172020 and 2016.2019.
| | | | | | |
| | 2017 | | 2016 |
Audit fees (1) | | $ | 1,600,924 | | $ | 1,476,077 |
Audit-related fees (2) | | | 126,033 | | | 125,000 |
Tax fees (3) | | | 861,914 | | | 885,757 |
Total | | $ | 2,588,871 | | $ | 2,486,834 |
| | | | | | |
| | 2020 | | 2019 |
Audit fees (1) | | $ | 844,001 | | $ | 1,277,932 |
Audit-related fees (2) | | | 58,171 | | | 41,668 |
Tax fees (3) | | | — | | | 548,580 |
Total | | $ | 902,172 | | $ | 1,868,180 |
(1)(1) Audit fees include fees for the audit of our 2017 and 2016 consolidated financial statements (including the audits required of internal control over financial reporting), fees of $308,937 in relation to review of the work of the Special Committee,. This includes subsidiary company audits and issuance of consents required by statute or regulation and similar matters.
(2) Audit-related fees include fees billed for audit-related services related to professional consultations with respect to complex accounting issues, the Company’s 2017matters and 2016 acquisitions and 2016 debt refinancing.acquisitions.
(3) TaxThe Company transitioned tax services to a different firm in late 2019. With respect to 2019, tax fees include fees billed in the respective periods for tax compliance servicesservices. Including for our tax receivable agreements and consultations regarding the tax implications of certain transactions, as shown in the table below.transactions. Tax fees related to the tax receivable agreements consist of fees incurred due to ongoing maintenance requirements of the Company’s tax receivable agreements, which include preparing an advisory firm letter, reviewing the related tax basis and tax benefit schedules and the facts, assumptions, and methodologies used in calculating the payments due pursuant to the tax receivable agreements. Otheragreements, an update to the dilution forecast for the tax fees in 2017 includereceivable agreements as well as consulting related to the tax fees incurred in connection with the Special Investigation ($27,776) and the acquisition of Booj ($25,000). Other tax fees in 2016 consist of tax fees incurred in connection with the Company’s secondary offering in 2015.
| | | | | | |
| | 2017 | | 2016 |
Tax compliance fees | | $ | 483,115 | | $ | 550,377 |
Tax consulting fees | | | 65,005 | | | 40,389 |
Tax fees related to the tax receivable agreements | | | 258,554 | | | 192,594 |
Other tax fees | | | 55,240 | | | 102,397 |
Total | | $ | 861,914 | | $ | 885,757 |
receivable agreements.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 49 |
40
AUDIT COMMITTEE REPORT
The following is the report of the Audit Committee with respect to the Company’s audited financial statements as of and for the year ended December 31, 2017.2020. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference in such filing.
The Audit Committee makes the following report to the Board of Directors:
The Audit Committee consists of the following members of the Board: Kathleen Cunningham (Chair), Joseph DeSplinter, Ronald Harrison, and Teresa Van De Bogart.Bogart and Laura Kelly. Each of the members is independent and financially literate as defined under the applicable NYSE rules. Ms. Cunningham and Mr. DeSplinter have been designated as audit committee financial experts under Item 407(d)(5) of Regulation S-K.
The Audit Committee is responsible primarily for assisting the Board in fulfilling itscertain oversight responsibility ofresponsibilities, including reviewing the financial information that will be provided to stockholders and others,others; appointing the independent registered public accounting firm,firm; reviewing the services performed by the Company’s independent registered public accounting firm andfirm; directly overseeing the internal audit department,department; evaluating the Company’s accounting policies,policies; reviewing the integrity of the Company’s financial reporting process and the Company’s internal control structure that management and the Board have established,established; reviewing significant financial transactions, earnings press releases and earnings guidance provided to analystsguidance; investigating reports of wrongdoing made through the Company’s Ethics Helpline or otherwise and rating agencies.ensuring implementation of corrective actions; and overseeing and reviewing the Company’s management of cybersecurity risks. Management of the Company is responsible for the preparation and presentation of the Company’s financial statements, the effectiveness of internal control over financial reporting, and procedures that are reasonably designed to assure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, KPMG, is responsible for performing an independent audit of the consolidated financial statements and the effectiveness of the Company’s internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”). The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements or disclosures.
Meeting agendas are established by the Audit Committee Chair and the Vice President of Internal Audit. During 2020 the Audit Committee cybersecurity oversight consisted of the Audit Committee receiving regular updates from the Vice President of Information Technology, in areas such as security implications resulting from the pandemic, rapidly evolving cybersecurity threats, cybersecurity technologies and solutions deployed internally, and major cybersecurity risks areas and procedures to addresses those risks. The Audit Committee also discussed, in separate private sessions with each of the Company’s Chief Financial Officer, Chief Accounting Officer, General Counsel, the independent registered public accounting firm, and the Vice President of Internal Audit, matters that the Committee believes should be discussed privately. The Audit Committee reviewed with management significant risks and exposures, including reports regarding the Enterprise Risk program and the overall adequacy and effectiveness of the Company’s legal, regulatory and ethical compliance programs, including the Company’s Code of Conduct and Supplemental Code of Ethics for Chief Executive Officer and Senior Officers.
In fulfilling its responsibility of appointment, compensation, and oversight of the services performed by the Company’s independent registered public accounting firm, the Audit Committee regularly meets separately with the independent auditorsregistered public accounting firm and carefully reviews the responsibilities and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, overall audit strategy and timing, the significant risks identified by the independent registered public accounting firm, any issues encountered during the audit, audit fees, auditor independence matters, and the extent to which the independent registered public accounting firm is retained to perform non-audit related services.
KPMG has served as the Company’s independent registered public accounting firm since 2003. To ensure that the appointment of the independent registered public accounting firm is in the best interests of the Company and its stockholders, the Audit Committee annually reviews the engagement of KPMG and considers several factors, including the independent auditor’s qualifications, independence, andaudit approach, work quality, fees, and significant legal or regulatory proceedings related to the firm, along with the impact of changing auditors. In 2016,addition to the annual review, in 2019, the Audit Committee solicited proposals from other independent registered public accounting firms and evaluated the proposals using the factors assessed in the annual review. The Committee determined it was in the best interest of the stockholders to reappoint KPMG as the independent registered public accounting firm after thoroughly evaluating those factors. The lead engagement partner rotates no less frequently than every five years. The Company’s independent
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Table of Contents
PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITOR |
AUDIT COMMITTEE REPORT |
registered public accounting firm, in consultation with the Audit Committee, has selected a new lead audit engagement partner.partner for the 2021 audit.
The Audit Committee has established an auditor independence policy and reviews and approves this policy on an annual basis. This policy mandates that the Audit Committee approve the audit and non-audit services and related budget in advance, unless pre-approval is waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X. This policy also mandates that the Company may not enter into auditor engagements for non-audit services without the Audit Committee’s express approval. Pursuant to this policy, the Audit Committee has delegated authority to pre-approve services with fees up to $100,000 to the Audit Committee Chair, with such pre-approval subject to ratification by the Audit Committee at its next regularly scheduled meeting. In accordance with this policy, all services performed by KPMG have beenwere pre-approved by the Audit Committee in 20172020 and 2016.2019. Starting in 2020, the value of non-audit services performed by KPMG decreased significantly, because the Company retained another firm to perform tax compliance services for the Company, as well as services related to compliance with the Company’s Tax Receivable Agreements.
The Audit Committee has reviewed and discussed the audited financial statements as of and for the year ended December 31, 20172020 with the Company’s management and KPMG. The Audit Committee has also discussed with KPMG the matters required to be discussed by Auditing Standard No. 16,1301, as amended “Communications“Communications with Audit Committees,” as adopted by the PCAOB.
The Audit Committee also has received and reviewed the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence from the Company. The Audit Committee has also considered whether KPMG’s performance of non-audit services is compatible with maintaining KPMG’s independence and believes that the services provided by KPMG for the fiscal years 20172020 and 20162019 were compatible with, and did not impair, KPMG’s independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the financial statements referred to above be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2017.2020.
Audit CommitteeCommittee:
Kathleen J. Cunningham, (Chair)Chair
Joseph A. DeSplinter
Ronald E. HarrisonLaura G. Kelly
Teresa S. Van De Bogart
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 51 |
42
INFORMATION REGARDING STOCKHOLDER PROPOSALSPROPOSALS
Stockholder proposals intended to be presented at the 20192022 Annual Meeting of Stockholders (the “2019“2022 Meeting”), pursuant to Exchange Act Rule 14a-8 must be delivered to the Corporate Secretary at our principal executive offices no later than December 13, 201817, 2021 in order to be included in our proxy materials for that meeting. Such proposals must also comply with all applicable provisions of Exchange Act Rule 14a-8.
Stockholder proposals submitted for consideration at the 20192022 Meeting but not submitted for inclusion in our proxy materials pursuant to Exchange Act Rule 14a-8, including nominations for candidates for election as directors, must be delivered to the Corporate Secretary at our principal executive offices not less than 90 days or more than 120 days before the first anniversary of the date on which we first mailed these Proxy Materials. However, if the 20192022 Meeting occurs more than 30 days before or after May 24, 2019,26, 2022, then, to be timely, proposals must be delivered by the later to occur of (i) the 90th day prior to the 20192022 Meeting or (ii) the 10th day following the first public announcement of the date of the 20192022 Meeting. Assuming the 20192022 Meeting is held within 30 days before or after May 24, 2019,26, 2022, then stockholder proposals must be received no earlier than December 13, 201817, 2021 and no later than January 12, 2019.13, 2022. Stockholder proposals must include the specified information concerning the stockholder and the proposal or nominee as set forth in our bylaws.Bylaws.
Nominations for candidates for Board membership should contain the following information:
● the candidate’s name, age, business address, and home address;
● the candidate’s biographical information, including educational information, principal occupation or employment, past work experience (including all positions held within the past five years), personal references, and service on boards of directors or other positions the candidate currently holds or has held during the past three years;
● the class and number of shares of the Company the candidate beneficially owns;
● any potential conflicts of interest that may prevent or otherwise limit the candidate from serving as an effective Board member;
● any other pertinent information about the candidate and his or her qualifications;
● the name and record address of the stockholder making the recommendation; and
● the class and number of shares of the Company beneficially owned by the stockholder making the recommendation and the period of time the shares have been held.
Stockholder nominations should be submitted to the Company’s Corporate Secretary at the Company’s headquarters. Stockholder nominations may be made at any time. However, in order for a candidate to be included in the slate of director nominees for approval by stockholders in connection with a meeting of stockholders and for information about the candidate to be included in the Company’s proxy materials for such a meeting, the stockholder must submit the information set forth above and other information reasonably requested by the Company within the timeframe set forth above.
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GENERAL INFORMATION ANDFREQUENTLY ASKED QUESTIONS
RE/MAX Holdings is making this proxy statement available to its stockholders on or about April 15, 2021, in connection with the solicitation of proxies by the Board of Directors for the RE/MAX Holdings 2021 Annual Meeting of Stockholders. The Annual Meeting will be held on Wednesday, May 26, 2021, at noon (mountain time) as a virtual meeting, which you may join by visiting www.virtualshareholdermeeting.com/RMAX2021. As a stockholder of RE/MAX Holdings, you are invited to attend the Annual Meeting and are entitled and encouraged to vote on the proposals described in this proxy statement. Further information about the meeting and how to attend is below.
RE/MAX Holdings is one of the world’s leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX brand and mortgage brokerages within the United States under the Motto Mortgage brand. RE/MAX and Motto are 100% franchised—we do not own any of the brokerages that operate under these brands. RE/MAX Holdings is a holding company. Its only business is to act as the sole manager of RMCO, LLC, a Delaware limited liability company. RE/MAX Holdings was formed in June 2013 and completed an initial public offering of its Class A common stock in October 2013. RMCO’s direct and indirect subsidiaries include our two franchise brands: RE/MAX, LLC and Motto Franchising, LLC as well as companies involved in providing technology and data services to the real estate industry: Booj, LLC; First Leads, LLC; wemlo, LLC; The Gadberry Group, LLC; and Seventy3, LLC. The Company also has subsidiary marketing funds that collect funds from franchisees and are contractually obligated to spend such funds for marketing and technology purposes. Our Class A common stock trades on the New York Stock Exchange under the symbol “RMAX.”
In this proxy statement, “we,” “our,” “us” and the “Company” refer collectively to RE/MAX Holdings, RMCO, and RMCO’s subsidiaries.
Below are answers to common questions stockholders may have about the Annual Meeting.
What are the Proxy Materials?
The “Proxy Materials” are this proxy statement and our annual report to stockholders for the fiscal year ended December 31, 2020. If you request printed versions of the Proxy Materials, you will also receive a proxy card.
How can I get a full set of printed Proxy Materials?
We furnish Proxy Materials to many of our stockholders on the internet, rather than mailing printed copies. If you received a one-page notice by mail, you will not receive a printed copy of the Proxy Materials unless you request one. Instead, the notice instructs you how to access and review the Proxy Materials on the internet. If you would like a printed copy of the Proxy Materials, please follow the instructions on the notice.
What items are scheduled to be voted on at the Annual Meeting?
There are two proposals to be voted on at the Annual Meeting:
1. electing four directors to our Board of Directors; and
2. ratifying the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2021.
We may also transact any other business as may properly come before the Annual Meeting or before any adjournment or postponement thereof.
How do I attend the Annual Meeting?
This year’s meeting is completely virtual. You may participate in the meeting by visiting the following website: www.virtualshareholdermeeting.com/RMAX2021.
In order to attend, you will need to enter the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card. You will be able to vote your shares electronically during the Annual Meeting. Even if you plan to attend, we encourage you to vote by proxy in advance of the Annual Meeting in case you are unable to attend.
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2021 | RE/MAX Holdings, Inc. | 53 |
How does the Board of Directors recommend that I vote?
The Board of Directors recommends that you vote:
FOR each of the nominees to the Board of Directors (Proposal 1); and
FOR the ratification of the appointment of KPMG as our independent registered public accounting firm (Proposal 2).
Could other matters be decided at the Annual Meeting?
We do not anticipate any other matters will come before the Annual Meeting. If any other matters come before the Annual Meeting, the proxy holders appointed by our Board of Directors will have discretion to vote on those matters.
Who may vote at the meeting?
Holders of Class A common stock and holders of Class B common stock as of the close of business on March 31, 2021 (the “Record Date”) may vote at the Annual Meeting.
How many votes do I have?
Holders of Class A common stock are entitled to one vote per share of Class A common stock held as of the Record Date. Holders of Class B common stock are entitled to one vote for each common unit in RMCO owned by such holder as of the Record Date, regardless of the number of Class B shares owned.
As of the Record Date, there were 18,890,602 shares of Class A common stock outstanding, which will each carry one vote and one share of Class B common stock outstanding, which will carry 12,559,600 votes.
What vote is required for each proposal?
For the election of directors, each director must be elected by a plurality of the votes cast. This means that the four nominees receiving the largest number of “for” votes will be elected as directors. We do not have cumulative voting.
The ratification of the Company’s independent registered public accounting firm and any other proposals that may come before the Annual Meeting will be determined by the majority of the votes cast.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are a stockholder of record.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are a beneficial owner of shares held in street name. The organization holding your account is considered the stockholder of record. As a beneficial owner, you have the right to direct the organization holding your account on how to vote the shares you hold in your account.
How do I vote?
There are four ways for stockholders to vote:
●Via the internet. You may vote via the internet by visiting http://www.proxyvote.com and entering the unique control number for your shares located on the Notice of Internet Availability of Proxy Materials.
●By telephone. You may vote by phone by calling (800) 690-6903. You will need the control number from your Notice of Internet Availability of Proxy Materials.
●By mail. If you requested that Proxy Materials be mailed to you and you are a stockholder of record, you will receive a proxy card with your Proxy Materials and may vote by filling out and signing the proxy card and returning it in the envelope provided. If you are a beneficial owner of shares held in street name, you may vote by filling out the card you received from the organization holding your shares and returning it as instructed by that organization.
●By electronically voting during the Annual Meeting. You may also vote your shares by attending the Annual Meeting (see “How do I attend the Annual Meeting?” above) and voting during the meeting.
Can I change my vote after submitting a proxy?
Street name stockholders who wish to change their votes should contact the organization that holds their shares.
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54 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
Stockholders of record may revoke their proxy before the Annual Meeting by delivering to the Company’s Corporate Secretary a written notice stating that a proxy is revoked, by signing and delivering a proxy bearing a later date, by voting again via the internet or by telephone, or by voting electronically during the Annual Meeting.
What happens if I abstain or don’t vote?
Abstentions (shares present at the meeting or by proxy that are voted “abstain”) and broker non-votes (explained in the next question below) are counted only for the purpose of establishing the presence of a quorum at the Annual Meeting. Abstentions are not counted as votes cast.
If I hold shares in street name through a broker, can the broker vote my shares for me?
If you hold your shares in street name and you do not vote, the broker or other organization holding your shares can vote on certain “routine” proposals but cannot vote on other proposals. Proposal 2 (ratification of the Company’s independent registered public accounting firm) is a “routine” proposal. Proposal 1 (election of directors) is not a not “routine” proposal. If you hold shares in street name and do not vote on Proposal 1, your shares will be counted as “broker non-votes.”
Who is paying for this proxy solicitation?
The Company is paying the costs of solicitating proxies. Members of our Board of Directors and officers and employees may solicit proxies by mail, telephone, email, or in person. We will not pay directors, officers, or employees any extra amounts for soliciting proxies. We may, upon request, reimburse brokerage firms, banks, or similar entities representing street name holders for their expenses in forwarding Proxy Materials to their customers who are street name holders and obtaining their voting instructions.
Why are you holding a virtual meeting instead of an in-person meeting?
We believe that holding a virtual meeting expands stockholder access to the meeting, improves communication, and reduces costs both for the Company and for stockholders who attend the meeting.
Will I be able to participate in the virtual meeting?
Yes, as noted above, stockholders can vote during the meeting. Further, we plan to give stockholders an opportunity to ask questions about each matter voted on during the meeting and, following the official business portion of the meeting, stockholders may ask questions about the business generally.
Where can I find voting results?
Final voting results from the Annual Meeting will be filed with the SEC on a Current Report on Form 8-K within four business days of the Annual Meeting.
I share an address with another stockholder. Why did we receive only one set of Proxy Materials?
Some banks, brokers, and nominees may “household” Proxy Materials. This means that only one copy of the Proxy Materials or the Notice of Availability of Proxy Materials may have been sent to multiple stockholders who share an address. If you hold your shares in street name and want to receive separate copies of the Proxy Materials or the Notice of Availability of Proxy Materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact the bank, broker, or other nominee who holds your shares.
Upon request, the Company will promptly deliver a separate copy of the Proxy Materials or the Notice of Internet Availability of Proxy Materials to any stockholder at a shared address to which a single copy was delivered. To receive a separate copy, you can contact our investor relations department. The department’s contact information is below.
Whom should I contact if I have additional questions?
You can contact our investor relations department at (303) 224-5458, investorrelations@remax.com or 5075 S. Syracuse St., Denver, CO 80237. Stockholders who hold their shares in street name should contact the organization that holds their shares for additional information on how to vote.
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2021 Proxy Statement | RE/MAX Holdings, Inc. | 55 |
APPENDIX: Reconciliation of Non-GAAP Measures
The Company defines Adjusted EBITDA as EBITDA (consolidated net income before depreciation and amortization, interest expense, interest income and the provision for income taxes, each of which is presented in the unaudited consolidated financial statements included earlier in this press release), adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: loss or gain on sale or disposition of assets and sublease, non-cash impairment charges, equity-based compensation expense, acquisition-related expense, gain on reduction in tax receivable agreement liability, expense or income related to changes in the estimated fair value measurement of contingent consideration, and other non-recurring items.
A reconciliation of Adjusted EBITDA to net income is set forth in the following table (in thousands):
| | Year Ended December 31, |
| | 2020 | | 2019 | | 2018 |
Net income | | $ | 20,020 | | $ | 46,856 | | $ | 49,822 |
Depreciation and amortization | | | 26,691 | | | 22,323 | | | 20,678 |
Interest expense | | | 9,223 | | | 12,229 | | | 12,051 |
Interest income | | | (340) | | | (1,446) | | | (676) |
Provision for income taxes | | | 9,103 | | | 10,909 | | | 16,342 |
EBITDA | | | 64,697 | | | 90,871 | | | 98,217 |
(Gain) loss on sale or disposition of assets | | | 503 | | | 342 | | | (139) |
Impairment charge - leased assets (1) | | | 7,902 | | | — | | | — |
Equity-based compensation expense | | | 16,267 | | | 10,934 | | | 9,176 |
Acquisition-related expense (2) | | | 2,375 | | | 1,127 | | | 1,634 |
Gain on reduction in tax receivable agreement liability (3) | | | — | | | — | | | (6,145) |
Special Committee investigation and remediation expense (4) | | | — | | | — | | | 2,862 |
Fair value adjustments to contingent consideration (5) | | | 814 | | | 241 | | | (1,289) |
Adjusted EBITDA | | $ | 92,558 | | $ | 103,515 | | $ | 104,316 |
(1) Represents the impairment recognized on a portion of our corporate headquarters office building. See Note 3, Leases to our audited consolidated financial statements in the 2020 Annual Report for additional information. Lease costs are lower by $0.1 million for the year ended December 31, 2020 as a result of the impairment.
(2) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the acquisition and integration of acquired companies.
(3) Gain on reduction in tax receivable agreement liability is a result of the Tax Cuts and Jobs Act enacted in December 2017 and further clarified in 2018. See Note 12, Income Taxes to our audited consolidated financial statements in our 2020 Annual Report for additional information.
(4) Special Committee investigation and remediation expense relates to costs incurred in relation to the previously disclosed investigation by the special committee of independent directors of actions of certain members of our senior management and the implementation of the remediation plan.
(5) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 11, Fair Value Measurements, to our audited consolidated financial statements in the 2020 Annual Report for additional information
Free cash flow is calculated as cash flows from operations less capital expenditures and any changes in restricted cash of the Marketing Funds, all as reported under GAAP, and quantifies how much cash a company has to pursue opportunities that enhance shareholder value. A reconciliation of Free Cash Flow to Cash flow from operation is set forth in the following table (in thousands).
| | Year Ended |
| | December 31, |
| | 2020 | | 2019 | | 2018 |
Cash flow from operations | | $ | 70,847 | | $ | 78,975 | | $ | 76,064 |
Less: Purchases of property, equipment and capitalization of software | | | (6,903) | | | (13,226) | | | (7,787) |
(Increases) decreases in restricted cash of the Marketing Funds (1) | | | 728 | | | 7,895 | | | - |
Free cash flow | | $ | 64,672 | | $ | 73,644 | | $ | 68,277 |
| (1) | In January 2019, the Company acquired all of the regional and pan-regional advertising fund entities previously owned by its founder and Chairman of the Board of Directors, David Liniger, collectively, the “Marketing Funds”. Beginning January 1, 2019, all assets and liabilities of the Marketing Funds are reflected in the consolidated financial statements of the Company, including approximately $28.5 million of restricted cash. This line reflects any subsequent changes in the restricted cash balance since the initial acquisition date (which under GAAP reflects as either (a) a decrease in cash flow from operations or (b) an incremental amount of purchases of property and equipment and capitalization of developed software) so as to remove the impact of changes in restricted cash in determining free cash flow. |
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56 | RE/MAX Holdings, Inc. | 2021 Proxy Statement |
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| VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. RE/MAX HOLDINGS, INCINC. C/O BROADRIDGE POP.O. BOX 1342 BRENTWOOD, NY 11717 During The Meeting - Go to www.virtualshareholdermeeting.com/RMAX2021 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D47631-P52552 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. RE/MAX HOLDINGS, INC. For Withhold For All ExceptAllAllExcept To withhold authority to vote for any individual nominee(s), mark “For"For All Except”Except" and write the number(s) of the All Allnominee(s) on the line below. The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0 1. Election1.Election of Directors Nominees 01Nominees: ! ! ! 01) 02) 03) 04) Adam Contos Kathleen Cunningham Gail Liniger 02 Kathleen Cunningham 03 Christine Riordan For Against Abstain The Board of Directors recommends you vote FOR the following proposal: 2Ratification! ! ! 2.Ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31,2018. NOTE: In their discretion, the proxies are authorized to vote on such other business as may properly come before the meeting or any adjournment thereof. For Against Abstain 0 0 031, 2021. Please sign your name exactly as your name(s) appear(s)it appears hereon. When signing as attorney, executor, administrator, trustee or other fiduciary,guardian, please give fulladd your title as such. Joint owners should each sign personally. All holdersWhen signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, or partnership, please sign in full corporate or partnership name by duly authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000370557_1 R1.0.1.17 |
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| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice &and Proxy Statement and Annual Report andon Form 10-K are available at www.proxyvote.comwww.proxyvote.com. D47632-P52552 RE/MAX HOLDINGS, INC. Annual Meeting of Stockholders May 24, 2018 8:00 AM26, 2021 Noon This proxy is solicited by the Board of Directors This proxy is solicited by the Board of Directors for the Annual Meeting of Stockholders to be held on May 24, 2018.26, 2021. The undersigned, revoking all prior proxies, hereby appoints Adam Contos, Karri Callahan and Adam Scoville, and any of them, each with full power of substitution, as proxies to represent the undersigned and vote all shares of Class A or Class B Common Stock of RE/MAX Holdings, Inc. (the "Company") which the undersigned would be entitled to vote if personally present at the Company's Annual Meeting of Stockholders to be held online at www.virtualshareholdermeeting.com/RMAX2021 on May 24, 201826, 2021 at the Company's Headquarters located at 5075 South Syracuse Street, Denver, Colorado, 80237 at 8:00 a.m.Noon (Mountain time)Time) and at any adjournments or postponements thereof. When properly executed, this proxy will be voted as directed. If no direction is indicated, this proxy will be voted "FOR" each director nominee in Proposal 1 and "FOR" Proposal 2. In their discretion, the proxies are authorized to vote on such other business as may properly come before the meeting. Continued and to be signed on reverse side 0000370557_2 R1.0.1.17 |
