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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 ◻
Check the appropriate box:
◻ | Preliminary Proxy Statement |
◻ | Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
⌧ | Definitive Proxy Statement |
◻ | Definitive Additional Materials |
◻ | Soliciting Material 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)
Payment of Filing Fee (Check all boxes that apply):
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| No fee required. | ||
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| Fee paid previously with preliminary materials. | ||
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| Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | ||
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Dear Fellow Stockholder:
RE/MAX Holdings, Inc. is holding its 20232024 annual meeting of stockholders at 1:11:30 p.m.a.m. mountain time on Wednesday,Thursday, May 24,23, 2024.
The first order of business will be voting on three nominees to the Board of Directors. The Board of Directors comprises a group of seasoned professionals who bring a diverse set of skills and experiences to RE/MAX Holdings. The Board of Directors welcomed two new members in 2023. Norman Jenkins was elected to the Board of Directors at our 2023 annual meeting of stockholders. The Board of Directors appointed Erik Carlson as Chief Executive Officer and as a member of the Board of Directors in November 2023.
The Board is deeply saddened to have lost one of our valuable members earlier this year. Laura Kelly, who was elected to the Board at the 2020 annual meeting of stockholders, passed away in March 2024. Laura was instrumental in supporting the launch and continued execution of our ongoing strategic initiatives. Laura successfully leveraged her broad business and personal experiences to foster strategic conversations at the Board level. She was also a valuable role model and mentor to many across the organization. Laura will be greatly missed.
Three members of the Board of Directors have been nominated for re-election this year: Erik Carlson, Kathleen Cunningham, and Dr. Christine Riordan.
The Board of Directors recommends that you vote “FOR” each of the Director nominees named in the proxy statement. On the other orders of business, the Board recommends that you vote “FOR” the advisory vote on compensation of our named executive officers, and “FOR” the ratification of Ernst & Young LLP as our independent registered public accounting firm.
The meeting will be held as a virtual meeting, which stockholders can attend by visiting www.virtualshareholdermeeting.com/RMAX2023.RMAX2024. This will be the seventheighth 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.
We encourage stockholders to vote their shares by proxy in advance of the annual meeting.
The attached notice of the 20232024 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.important. We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy. The enclosed proxy statement and proxy card are first being sent to our stockholders on approximately April 13, 2023.
The Board of Directors recommends that you vote “FOR” each of the Director nominees named in the proxy statement, “FOR” approval of the RE/MAX Holdings, Inc. 2023 Omnibus Incentive Plan, “FOR” the advisory vote on compensation of our named executive officers, “Every Year” for the vote on the frequency of future advisory votes on compensation of executive officers, and “FOR” the ratification of Ernst & Young LLP as our independent registered public accounting firm.11, 2024.
You may submit your proxy either over the telephone or the internet or you may vote through the online portal during the meeting. In addition, if you received a paper copy of the proxy materials, you can vote by marking, signing, dating, and returning the proxy card sent to you in the envelope accompanying the proxy materials.
Thank you for your continued support.
Sincerely,
David Liniger
Chairman and RE/MAX Co-Founder
April 13, 2023
11, 2024
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Meeting Information | | Items of Business | Our Board’s | More | ||
WHEN | | 1 | To elect | FOR each | p. 7 | |
ADMISSION | | 2 | To conduct an advisory vote on our executive compensation | FOR | p. | |
WEBCAST The virtual meeting will be held online at: www.virtualshareholdermeeting.com | | 3 | To |
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| | | 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. |
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.com and 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 | Beneficial Owners of Shares Held in Street Name: | Stockholders of Record: |
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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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| Susie Winders, Secretary |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON MAY |
TABLE OF CONTENTS
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Enterprise Risk Management and Board of Directors Role in Risk Oversight |
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Other Compensation Policies and Compensation Risk Assessment |
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Option Exercises and Stock Vested for Fiscal |
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Analysis of the Information Presented in the Pay versus Performance Table | 47 |
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PROXY SUMMARY
About RE/MAX Holdings, Inc.
RE/MAX Holdings, Inc. (“RE/MAX Holdings”Holdings,” the “Company,” “we,” or “us”) is one of the world’s leading franchisors in the real estate 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 to our franchise networks, including loan processing services primarily to our Motto network through our wemlo brand. The RE/MAX network, which celebrated the fiftieth anniversary of its founding thislast year, has a presence in over 110 countries and territories and more than 140,000 agents in over 9,000 offices. Motto is the first-and-only national franchisor of mortgage brokerages in the United States. Motto is among the fastest growing franchises and has grown to over 225 open offices across more than 40 states 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 valuable marketing to build the strength of the RE/MAX and Motto brands.
A Leading Dual-Brand Franchisor with Compelling Growth Opportunities
RE/MAX: #1 Name in Real Estate1 (US/Canada) and Unmatched Global Footprint2.Footprint 2. Highly Productive Network of More Than 140,000 Agents. Agent-centric Model is DifferentMost-Trusted Agents in the U.S. and Better.Canada 3 4. MOTTO MORTGAGE: Rapidly Expanding Network of offices with Almost $2.8 Billion in 20222023 Annual Loan Volume. First-and-Only National Mortgage Brokerage Franchise in U.S. Among Top Recession-Proof and Best of the Best Franchises3.Franchises5.
1Source: MMR Strategy Group Study of unaided brand awareness
2RE/MAX has a presence in more than 110 countries and territories.
3Voted most trusted Real Estate Agency brand by American shoppers based on the BrandSpark® American Trust Study, years 2022-2024 and 2019.
4 Voted most trusted Real Estate Agency brand by Canadian shoppers based on the BrandSpark® Canadian Trust Study, years 2021-2024, 2019 and 2017.
5 For more information on Motto awards please see www.mottomortgage.com/awards-disclaimers.
20222023 – Performance Highlights
Strategic Initiatives and Leadership Changes In The Board of RE/MAX Holdings appointed Erik Carlson as CEO and Director in November 2023. | | | Our Growing Franchise Brands RE/MAX Agent Count as of December 31 Total Open Motto Mortgage Offices: |
STRONG FINANCIAL POSITION
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1 Adjusted EBITDA is a non-GAAP measure. Please see Appendix 1 on page 7866 of this Proxy Statement for a definition of this term and reconciliation with the most directly comparable GAAP measure.
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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.
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CEO: base salary 18%, bonus 32%, equity grant 49%, other 1%. Average of other NEOs: base salary 25%, bonus 23%, equity grant 51%, other 1%
Our Vision, Mission, Vision,and Values and Beliefs
The graphic below shows our vision, mission, vision, values, and beliefs.values. Our values, summarized by the acronym “MORE,” are reflected in our Code of Conduct for our employees, which is discussed in greater detail below.
RE/MAX HOLDINGS INC.
VISION: TO BE THE GLOBAL REAL ESTATE LEADER—THE ULTIMATE DESTINATION FOR PROFESSIONALS AND CONSUMERS. MISSION: DELIVER THE BEST EXPERIENCE IN EVERYTHING REAL ESTATE. VISION: TO BE THE GLOBAL REAL ESTATE LEADER; THE ULTIMATE DESTINATION FOR PROFESSIONALS AND CONSUMERS.ESTATE.. VALUES: DELIVER TO THE MAX;MAX EFFORT, ‘ WITH CUSTOMER OBSESSED, DO THEEXPERIENCE, RIGHT THING, TOGETHER EVERYBODY 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.WINS
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Our Commitment to our Stakeholders
EVERYBODY WINS: | ||||||
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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, LED lighting retrofit, among others.
| ● Providing aspiring entrepreneurs in over 110 countries and territories the opportunity to become small business owners. ● Strong focus on diversity ● RE/MAX brokers and agents in the U.S. and Canada have donated ● 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 ● Three Directors are Board Leadership Fellows with the National Association of Corporate Directors (“NACD”) and one has earned the NACD Directorship Certification. ● Annual self-assessments administered by inside counsel or third-party. ● Commitment to Board refreshment—two new members added in |
Diversity, Equity, and InclusionPromoting Opportunities for our Diverse Networks
As a franchisor, human capital development and opportunity are foundational elements of our business. With a presence in more than 110 countries and territories, we offer motivated small-business owners of virtually all ethnicities, genders, races, orientations, and religions the opportunity to elevate their careers. Moreover, we have been a leader in expanding opportunities for women within real estate since our founding over 50 years ago. In our early days, one of the keys to our initial success was an intentional decision to invite women to join the 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 sixseven CEOs have been women, and today, twofive of our sixeight Executive Officers and sevenfive of our eleventen Board members are women, three of whom chair Board committees. Globally, approximately 48% of RE/MAX franchises have at least one female owner and 52%53% of our agents are women as of December 31, 2022.2023. We remain committed to diversity, equity, and inclusioncreating opportunities for people from all backgrounds 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 industry groups that aim to increase diversity in the real estate profession and homeownership by diverse groups. We financially support organizations such as the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America (AREAA), the LGBTQ+ Real Estate Alliance, the Women’s Council of REALTORS®, National Association of Black Real Estate Professionals,and the Freddie MAC (AffordableAffordable Housing
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Program), and the National Association of REALTORS®. Program. We seek to have diverse guests and presenters for events such as our annual conventions and in media directed at our networks. In 2022, Motto Mortgage was named a Top Franchise for Black Entrepreneurs by BLACK ENTERPRISE in partnership with
4 | RE/MAX Holdings, Inc. | 2024 Proxy Statement |
Franchise Business Review. The list of the Top 25 Franchises for Black Entrepreneurs highlights franchisors with the highest owner satisfaction scores among Black franchise owners.
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 over 30 years, RE/MAX affiliates have been making miracles happen through our partnership with Children'sChildren’s Miracle Network Hospitals (CMN Hospitals) in the United States and Canada. During this time, RE/MAX Associates have donated almostover $200 million to CMN Hospitals. CMN Hospitals raisesraise funds and awareness for 170 member children’s hospitals, which provide 3238 million patient visits to 1012 million kids each year across the U.S. and Canada. All donations made by RE/MAX Associates through the Miracle Home® program and Miracle Property Program or from local fund-raising events, go to the local member children’s hospital to fund critical treatments and healthcare services, pediatric medical equipment, and charitable care.
In 2018, Motto founded The Motto Mortgage Mission Against Hunger as a way for our nationwide network to give back to local communities. The goal is simple: minimize food waste while supporting those who are food insecure. Throughout the year, the Motto network organizes food drives across the country. The office that goes above and beyond is recognized with the Mission Against Hunger Community Champion Award. Motto Mortgage headquarters staff also donates to and volunteers regularly at a Denver area food pantry. In 2022,2023, Motto’s Mission Against Hunger made a nationwide impact of 43,462404,100 meals provided to families in need.
Environmental Sustainability
We are committed 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 recentefficient LED lighting retrofit with most lights on timers or photocells, a direct digital control HVAC system, and drip irrigation landscaping. We useroutinely consult with an environmental consultant to assess design and construction andengineering firm including an industrial hygienist to evaluate usage of chemicals.ensure that we are environmentally conscious with everything from construction projects to chemicals that are being used for cleaning. We offer most employees the option of working from home and have many employees who are fully remote, which reduces emissions associated with employees commuting to the office. We recently refreshed 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 headquarters building.
Employee Growth and Development
A major focus for Company management is ensuring that our employees have resources to grow and develop in their career paths. Toward this end, we have established our 2023 Growth and Development Strategy which includes enhancements to established efforts as well as additional resources that promote upskilling our talent. We recently formalized and expanded ourhave an employee mentorship program, which provides an opportunity for employees to gain exposure to and learn from leaders across the Company. We provide a generous annual budget to each department for training and development which covers anything from advanced certifications and training programs to seminars and workshops. We also offer reimbursement for continued education through our Education Assistance Program. Leadership coaching is provided to certain members of senior leadership on a case-by-case basis through an established coaching program. We also provide internal trainings and programs to support growth and development. As part of the 2023 Growth and Development Strategy, we’ve recentlywe have partnered with a leading online educational provider to provide all of our employees unlimited access to over 18,000 courses and certifications that target a breadth of information on hard, technical, and soft skills relevant to all areas of our business and beyond. We’ve also recently encouragedWe encourage our managers to allocate dedicated time for their employees to spend on growth and development initiatives. This has been well received by our managers who understand the priority and want to ensure their employees are able to dedicate time to their continued development.
| 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 doing MORE – delivering to the max while doing the right thing.
DELIVER TO THE MAX: We stayMAX EFFORT: Stay hungry and continually push ourselves to higher levels ofenergetic. Expect high performance. We go above and beyond expectations, approaching everything we do with the highest levels of enthusiasm, energy and pride. We activelyActively listen, learn, listen, improve and evolve; our self-improvement never stops.evolve.
OBSESSED WITH CUSTOMER OBSESSED: We putEXPERIENCE: 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 thinkfirst. Build strong relationships. Think big—delivering an experience that’s far beyond the norm, and fardeliver beyond what anyone expects. DO THE
RIGHT THING: We actAct with integrity, honesty and transparency. Every day. We holdHold ourselves to the highest standards in performance, ethics and accountability. We ownstandard. Own our actions and outcomes—taking smart risks with confidence and decisiveness. TOGETHER outcomes.
EVERYBODY WINS: We collaborateCollaborate, communicate and communicate—contributing to an environment in which everybody wins. We leadcontribute. Lead by example; helping others develop their talents and reach their goals. Weexample, show gratitude and respect. Everybody’s voice matters. We usegratitude. Use resources efficiently, for everybody’s greater good.effectively.
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.compensation.
A copy of each code is available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com.www.remaxholdings.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.
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PROPOSAL 1: ELECTION OF DIRECTORS
What am I voting on? Stockholders will elect | | | At the If any Class Ms. Cunningham has expressed a desire to retire from the Board in the near future. Ms. Cunningham has agreed to continue to serve on the Board as a result of the recent passing of fellow Audit Committee member Laura Kelly. The Board expects to appoint a new director to fill the vacancy created by Ms. Kelly’s passing later in 2024. Ms. Cunningham has indicated that she anticipates retiring from the Board in connection with the appointment of Ms. Kelly’s replacement. |
What is the required vote? Each Director must be elected by a plurality of the votes cast. This means that the |
Recommendation of the Board: The Board recommends you vote FOR each of the nominees in this Proposal 1.
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CORPORATE GOVERNANCE
Board Overview
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Gender Diversity | | | RE/MAX Holdings Tenure |
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Racial Diversity | | | Independence |
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Gender Diversity: 55% women. RE/MAX Holdings Tenure: Average tenure 6.7 years. Less than 3 years: 20%, greater than 5 years, 80%. Racial diversity: 18% diverse. Independence: 72% independent.
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Corporate Governance Factsheet | |
✓ ✓ ✓ All Members of Key Committees are Independent ✓ Lead Independent Director ✓ Separate Chair and CEO ✓ Corporate Governance Guidelines ✓ Independent Directors Meet Without Management or Non-Independent Directors ✓ Board and Committee Self-Evaluations ✓ Annual Review of Director Independence ✓ Commitment to Regular Board Refreshment | ✓ Policy for Auditor Independence ✓ Independent Compensation Consultant ✓ Anti-Hedging and Anti-Pledging Policy ✓ Clawback Policy for Executive Compensation ✓ Board Succession Plan ✓ Management Succession Plan ✓ Committee Charters ✓ Board Onboarding Process ✓ Annual Compliance Training ✓ Demonstrated Commitment to Director Education |
1 Includes new nominee (Norman Jenkins); does not include retiring member (Ron Harrison).
2 Based on current members of Board (excluding new nominee), as of December 31, 2022.
3All members of the Audit, Compensation, and Nominating and Corporate Governance Committees are independent.
Our Board of Directors
Our Board of Directors currently consists of eleventen members. Ronald Harrison, who has been on our Board since our IPO, will be retiring when his current term ends at the Annual Meeting. We have nominated Norman Jenkins to fill the seat being vacated by Mr. Harrison, so the size of the Board will remain at eleven following the Annual Meeting. The Board is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to Directors whose terms expire will be elected to serve until the third annual meeting following election. The following table summarizes information about each Director nominee and continuing Directors.Director.
Director and | Age | RMAX Director Since | Independent | COMMITTEES | |||
Audit | Compensation | Finance and | Nominating and Corporate Governance | ||||
CLASS I―DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2026) | |||||||
Roger J. Dow | 76 | 2013 | ✓ | | C | | |
Norman K. Jenkins President, Capstone Development | 60 | n/a | ✓ | (Committee assignments to be determined) | |||
Laura G. Kelly | 66 | 2020 | ✓ | M | M | | |
Katherine L. Scherping | 63 | 2022 | ✓ | M | | C | |
CLASS II―CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2024) | |||||||
Kathleen J. Cunningham | 76 | 2013 | ✓ | C | | M | |
Gail A. Liniger | 77 | 2013 | | | | | |
Christine M. Riordan | 58 | 2015 | ✓ | | M | | C |
CLASS III = CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2025) | |||||||
Stephen P. Joyce Former CEO and board member of Dine Brands Global, Inc. (NYSE: DIN) | 63 | 2020 | | | | M | |
David L. Liniger Non-Executive Chair and Co-Founder of RE/MAX, former CEO | 77 | 2013 | | | | | |
Annita M. Menogan Former General Counsel, Secretary, and Compliance Officer at Atkins Nutritionals / The Simply Good Food Company | 68 | 2022 | ✓ | | M | | M |
Teresa S. Van De Bogart | 67 | 2016 | ✓ | M | | | M |
Number of Meetings in 2022: | | | | 9 | 4 | 4 | 7 |
Director and | Age | RMAX Director Since | Independent | COMMITTEES | |||
Audit | Compensation | Finance and | Nominating and Corporate Governance | ||||
CLASS II― DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2027) | |||||||
Erik Carlson | 54 | 2023 | | | | | |
Kathleen J. Cunningham Former CFO, Novatix Corporation | 77 | 2013 | ✓ | C | | M | |
Christine M. Riordan | 59 | 2015 | ✓ | | M | | C |
CLASS III = CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2025) | |||||||
Stephen P. Joyce Former CEO of RE/MAX Holdings | 64 | 2020 | | | | M | |
David L. Liniger Non-Executive Chair and Co-Founder of RE/MAX, former CEO | 78 | 2013 | | | | | |
Annita M. Menogan Former General Counsel, Secretary, and Compliance Officer at Atkins Nutritionals / The Simply Good Food Company | 69 | 2022 | ✓ | | M | | M |
Teresa S. Van De Bogart | 68 | 2016 | ✓ | M | | | M |
CLASS I―CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2026) | |||||||
Roger J. Dow | 77 | 2013 | ✓ | | C | | |
Norman K. Jenkins President, Capstone Development | 61 | 2023 | ✓ | | M | | M |
Katherine L. Scherping | 64 | 2022 | ✓ | M | | C | |
Number of Meetings in 2023: | | | | 8 | 6 | 5 | 4 |
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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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| Cyber Security | | 1 | |
| 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 | |
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| 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. | |
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| In-Depth Company Knowledge | | 2 | |
| 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. | |
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| Real Estate Expertise | |
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Nominees for Election at the Annual Meeting (For Terms that will Expire in 2026)
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Age: RMAX Director Since: Committee Membership: | |
Key Skills |
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Strong Leadership Experience
Public Company Leadership and Board Experience |
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Directors Whose Terms Expire in 2024 (Class II Directors):
Kathleen J. Cunningham Age: RMAX Director Since: 2013 Committee Membership: Audit (Chair), Finance and Investment | ||
| Kathleen J. Cunningham was first appointed to the Board of Directors in July 2013 and serves as Chair of the Audit Committee. She was a member the Board of Managers of RMCO, LLC (“RMCO”) from February 2013 until she transitioned to 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 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. Ms. Cunningham was selected for our Board because of her knowledge of and experience in finance, capital structure, and public company board governance. |
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Financial Expertise Global Business Experience Public Company Board Experience |
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Christine M. Riordan Age: RMAX Director Since: 2015 Committee | |
Key Skills | Christine M. Riordan, Ph.D. was first appointed to the Board of Directors in January 2015. She is Chair of the Nominating and Corporate Governance Committee. Dr. Riordan is President of Adelphi University in New York, a top-150 ranked comprehensive university. Dr. Riordan is an internationally recognized expert in leadership, talent development and career success, strategy, team performance, and diversity and inclusion. For more than twenty-five years, she has designed leadership and diversity and inclusion programs, and served as an executive coach for senior-level executives within various industries. She has experience in the financial services, insurance, real estate, mortgage, franchised businesses, human resources/talent development, consulting, non-profit, and higher education industries. She also currently serves on the board of directors of the Commission for Independent Colleges and Universities and as a Trustee for Adelphi University. Dr. Riordan is a Board Leadership Fellow of the NACD. The Board recommends you vote for Dr. Riordan |
Strong Leadership Experience Broad Business Experience |
Directors Whose Terms Expire in 2025
David L. Liniger Age: RMAX Director Since: 2013 Committee Membership: None | |
David L. Liniger is the non-executive Chair of the Board of Directors and Co-Founder of RE/MAX. 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 and predecessor companies since the first RE/MAX company was founded in January 1973. Mr. Liniger served in a variety of leadership roles within the RE/MAX organization over the past 50 years, including Co-CEO from May 2017 through February 2018 and CEO from December 2014 until May 2017. Mr. Liniger is married to Gail Liniger, | Key Skills |
Real Estate Industry Expertise Franchise Industry Expertise Global Business Experience Deep Company Specific Knowledge—RE/MAX Co-Founder |
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Stephen P. Joyce Age: RMAX Director Since: 2020 Committee Membership: Finance and Investment | |
Key Skills | Stephen P. Joyce was appointed to the Board of Directors in April 2020. Mr. Joyce |
Public Company Board Experience Franchise Industry Experience
Global Business Experience |
Annita M. Menogan Age: RMAX Director Since: 2022 Committee Membership: Compensation, Nominating and Corporate Governance
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Annita M. Menogan was elected to the Board of Directors in 2022. Ms. Menogan has nearly four decades of experience as a business and corporate attorney, including 20 years as chief legal and governance executive with publicly held companies. She served as General Counsel, Corporate Secretary, and Compliance Officer of Atkins Nutritionals, Inc. / The Simply Good Foods Company (NASDAQ: SMPL) from 2015 through 2018 and, prior to that was Senior Vice President, Chief Legal Officer, and Corporate Secretary for Red Robin Gourmet Burgers, Inc. (NASDAQ: RRGB) from 2006 through 2013. Prior to that she was Vice President, Corporate Secretary, and Deputy General Counsel at Adolph Coors Company and Molson Coors Beverage Company (NYSE: TAP). She has also worked in private law practice. She has served on the Board of Children’s Hospital Colorado since 2014, | Key Skills |
Franchise Industry Experience Legal Expertise Public Company Leadership |
| RE/MAX Holdings, Inc. |
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65 : 2016 : Audit, Nominating and Corporate Governance | |
Teresa S. Van De Bogart Age: RMAX Director Since: 2016 Committee Membership: Audit, Nominating and Corporate Governance | |
Key Skills Public Company Leadership Technology Experience Cybersecurity Knowledge | Teresa S. Van De Bogart was first 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 Beverage Company (NYSE: TAP), 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 Molson Coors including procurement, finance and accounting. Ms. Van De Bogart is a Board Leadership Fellow of NACD and has earned the NACD Directorship Certification®. 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 |
Directors Whose Terms that Expire in 2026
Roger J. Dow Age: 77 RMAX Director Since: 2013 Committee Membership: Compensation (Chair) | |
Roger J. Dow was first appointed to the Board of Directors 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. He currently serves as Co-Founder of Future WRX Solutions and as CEO of Dow International LLC. From January 2005 through his retirement in July 2022, he was 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. The Board was selected for our Board because of his 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 |
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65 : 2016 : Audit, Nominating and Corporate Governance | |
Norman K. Jenkins Age: 61 RMAX Director Since: 2023 Committee Memberships: Compensation, Nominating and Corporate Governance | |
Key Skills Real Estate Experience Franchise Industry Expertise Public Company Board Experience | Norman K. Jenkins was first appointed to the Board of Directors in May 2023. Mr. Jenkins has served as President and Chief Executive Officer of Capstone Development since the Company’s founding in 2009. Capstone develops and acquires hotels, multi-family and other classes of commercial real estate. Prior to launching Capstone, Mr. Jenkins served in a variety of senior leadership roles during his 16-year career at Marriott International, Inc. Prior to joining Marriott, Mr. Jenkins held positions in finance and operations at McDonalds Corporation. Mr. Jenkins currently serves on the boards of AutoNation (NYSE: AN) and Urban Edge Properties (NYSE: UE). He also served on the board of Duke Realty (NYSE: DRE) from February 2017 until its acquisition by Prologis, Inc. in October 2022 and on the board of New Senior Investment Group, Inc. (NYSE: SNR) from November 2020 through its acquisition by Ventas, Inc. in September 2021. He is a member of the Washington DC Developer Roundtable and a former member of the Suburban Hospital Board of Trustees and the Howard University Board of Trustees. Mr. Jenkins was selected for our Board due to his extensive experience in real estate and franchising as well as his experience on other public company boards. |
Katherine L. Scherping Age: 64 RMAX Director Since: 2022 Committee Membership: Finance and Investment (Chair), Audit | |
Katherine L. Scherping was appointed to the Board of Directors in December 2022 and serves as Chair of the Finance and Investment Committee. She served for nearly 20 years as the CFO of private and public companies, including Quiznos and Red Robin Gourmet Burgers Inc. (NASDAQ: RRGB), before retiring in March 2020 as the CFO of National CineMedia, Inc. (NASDAQ: NCMI), a movie theater advertising business, a position she held since 2016. Ms. Scherping currently serves on the board and nominating and governance committee and is chair of the audit committee of Turtle Beach Corporation (NYSE: HEAR), one of the world’s leading providers of gaming accessories. She previously was a board member, nominating and governance committee member, and audit committee chair for Papa Murphy’s. Ms. Scherping was selected for our Board due to her extensive leadership experience at publicly-traded franchise organizations and financial expertise. | Key Skills |
Financial Expertise Franchise Industry Experience Public Company Board Experience |
2024 Proxy Statement | RE/MAX Holdings, Inc. | 15 |
Board Diversity and Refreshment
David and Gail Liniger founded RE/MAX with the view that anyone can be an entrepreneur, regardless of race, gender, or background. The RE/MAX network has grown to over 9,000 offices with over 140,000 agents from virtually every walk of life who share a commitment to helping people realize the dream of homeownership. That commitment to diversity, which is shared by its sister brand, Motto, 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 its members and potential nominees, and the Board believes its oversight capabilities are bolstered by its diverse composition.
Gender and Racial Diversity | |
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The Board aims to have a diverse mix of tenure on the Board, so that the Board has members with substantial experience with the Company as well as newer members who bring fresh perspectives. SixSeven of the current members of the Board have joined since our IPO in 2013, including two new members in 2022 and one new member nominated for election at the Annual Meeting.2023.
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Director Independence
The Board periodically assesses the independence of its members. For a Director to be considered independent, the Board must affirmatively determine that the Director does not have any direct or indirect material relationship with us, other than as a Director, that would interfere with their exercise of independent judgment in carrying out their 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 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 each of Kathleen Cunningham, Roger Dow, Ronald Harrison, Laura Kelly,Norman Jenkins, Annita Menogan, Christine Riordan, Katherine Scherping, and Teresa Van De Bogart are eachis an “independent Director” under applicable New 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. The Board has also determined that Norman Jenkins, who has been nominated for election to the Board, will be independent under these same standards.
Mr. Joyce was previously considered independent; however, he currently servesserved as our Chief Executive Officer on an interim basis for approximately 20 months and, due to that role, the Board has determined that he is not independent at this time. Once Mr. Joyce’s interim service ends, theThe Board willmay reassess whether he qualifies as an independent Director depending on the length of his service as Chief Executive Officer and other factors.
David and Gail Liniger have not, since our IPO, been considered independent Directors, due to their recent service as officers of the Company. The Linigers haveat a close, personal relationship with our former CEO, Adam Contos, and his family, which the Linigers and Mr. Contos describe as like immediate family. As a result, Mr. and Mrs. Liniger represented that they recused 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 or Compensation Tables, below.future date.
16 | RE/MAX Holdings, Inc. | 2024 Proxy Statement |
Board of Directors Leadership Structure; Separate Board Chair and Chief Executive Officer; Formal Lead Independent Director Role
The Board annually elects a Chair of the Board. Currently the roles of Chair and CEO are split between Mr. Joyce,Carlson, 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. Mr. Liniger was most recently re-elected as Chair of the Board in February 2023.2024. The independent members of the Board elect a Lead Independent Director annually. The role of the Lead Independent Director is defined in the Company’s Bylaws and Lead Independent Director charter, which are both available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com.
| Chief Executive Officer | | Lead Independent | | Chair of the Board | |
| Mr. | |
| | 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 ● 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 ● Has authority to retain advisors and consultants |
Enterprise Risk Management and Board of Directors Role in Risk Oversight
Risk management is primarily the responsibility of the Company’s management, and the Board of 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 to understand the specific risks the Company faces and what mitigating steps are being taken, while balancing an appropriate level of 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 as 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, the Company’s compliance 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. To effectively address the cybersecurity threats present in today’s environment, the Company has a dedicated Information Security team responsible for leading enterprise-wide information security strategy, policy, standards, architecture, processes, and processes.education. The Company’s comprehensive information security program includes, among other aspects, threat management, vulnerability management, incident response management, access management, and monitoring. The Company performs third-party security assessments to evaluate overall security posture associated with logical network security controls. The Vice President of Information Security and Risk (who serves
2024 Proxy Statement | RE/MAX Holdings, Inc. | 17 |
as the Company’s Information Security Officer), along with the Chief Information Officer and Chief Compliance Officer, lead regular reviews and discussions with the Audit Committee and full Board, 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 of information technology risks. The Company has an Incident Response Policy and Plan in place which provides a framework for handling security incidents and facilitates coordination across the Company. Company management collaborates with vendors and other third parties on threat intelligence, vulnerability management, and response. The Board and several key members of management participated in a customized in-boardroom training session on cybersecurity presented by NACD in late 2022. All employees receive annual cybersecurity awareness training, and additional information about cybersecurity throughout the year. The Company also provides educational resources and information to its franchisees about cybersecurity.
The Compensation Committee oversees compensation-related risks and oversees an annual compensation risk assessment. The Nominating and Corporate Governance Committee oversees the Company’s corporate governance programs, including the Code of Conduct. The Nominating and 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, compliance with debt covenants, 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 at 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. Executive management regularly discusses succession planning with the Board. The Board executed its succession plan in connection with Mr. Contos’sthe departure of our former CEO in 2022 by appointing Mr. Joyce to serve as Chief Executive Officer on an interim basis untilwhile the Board completes its selectionconducted a process for selecting a permanent replacement. The selection process, for the Company’s next Chief Executive Officer includeswhich included both internal and external candidates.candidates, concluded in 2023 with the appointment of Erik Carlson.
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, three of our Board of Directors have been named as Fellows by NACD and one has earned an NACD Directorship Certification. For the past several years, the Board has engaged NACD for annual customized training sessions for all members. During 2022,2023, the customized training session focused on cybersecurity.artificial intelligence. Previous sessions have covered topics such as cybersecurity, environmental, social, and governance (“ESG”) matters, investor relations, mergers and acquisitions, building the board as a strategic asset, company culture, stockholder engagement, communication, and transitioning from a controlled company.
Board of Directors Evaluation Process
The Board, under the direction of the Nominating and Corporate Governance Committee, conducts an 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, responses to evaluation questions are collected by the Company’s counsel or an outside consultant, who provides aggregated responses that protect the anonymity of individual ratings and comments. Each committee 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.appropriate for our Company. Our Board believes that a classified Board promotes stability, continuity, and a focus on the long-term interests of the Company and its stockholders and that three-year terms enhance Board independence.
Board Committees and Meetings
During 2022,2023, our Board of Directors had the following standing committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Finance and Investment Committee. From time to time, the Board may also establish committees for special limited purposes.
The Board met 911 times in 2022.2023. The tables below show the number of times each committee met in 2022.2023. In 2022,2023, most Directors attended 100% of the meetings of the Board and the committees on which they serve, and no Directorsserve. No incumbent Director attended lessfewer than 75% of the total number of meetings of the Board and committees on which they serve.serve in 2023.
The tables below summarize some information about each standing committee. More information about each committee can be found in the committees’ charters, which have been adopted by the Board and are reviewed annually. The charters are available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com. The content of our website is not incorporated in 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 Katherine Scherping each qualifies as an “Audit Committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. | ||
| Meetings: | | |||
| Chair: Kathleen Cunningham | ||||
| Other Members: | | |||
| ● Katherine Scherping ● Teresa Van De Bogart | | |||
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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 and 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 risk management, including the ERM program discussed above and efforts to mitigate cybersecurity risks. | ||||
| The Audit Committee reviews our annual report and makes recommendations to the full Board about its approval. The Audit Committee reviews and approves our quarterly reports and earnings releases for the first, second, and third quarters. |
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| COMPENSATION COMMITTEE | Our Compensation Committee is fully independent under applicable Exchange Act rules and NYSE standards. | |
| Meetings: | ||
| Chair: Roger Dow | ||
| Other Members: | ||
| ● ● Christine Riordan ● Annita Menogan | ||
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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 | ||
| ● 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 and Corporate Governance Committee is fully independent under applicable Exchange Act rules and NYSE standards. | |
| Meetings: | ||
| Chair: Christine Riordan | ||
| Other Members: | ||
| ● ● Annita Menogan ● Teresa Van De Bogart | ||
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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; | ||
| ● overseeing succession for the CEO, other | ||
| ● overseeing the Company’s management of ESG matters and initiatives, including updates on ESG matters from management at least twice a year; and | ||
| ● overseeing the Board’s annual self-evaluation. |
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| FINANCE AND INVESTMENT COMMITTEE | ||
| Meetings: | ||
| Chair: Katherine Scherping | ||
| Other Members: | ||
| ● Kathleen Cunningham ● Stephen Joyce | ||
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| Key Responsibilities | ||
| ● assisting the Board with oversight, approval, and recommendations regarding capital structure and capital allocation including return of capital to shareholders, investment of cash, management of financial risks such as interest rate and currency risks and debt covenant compliance; and | ||
| ● overseeing management of tax issues, including tax receivable agreements. |
Annual Meeting Attendance
We encourage all Directors to attend our annual meetings of stockholders. NineAll of our then-current Directors and nomineesthe nominee attended the 20222023 annual meeting of stockholders.stockholders, other than the one Director whose term ended at the 2023 annual meeting and who was not nominated for another term. The Annual Meeting will coincide with a regularly scheduled meeting of the Board, and we expect that all members and nominees will attend the meeting. We do not have a formal policy with respect to Director attendance at annual meetings of 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, legal, and/or administration; ● familiarity with the real estate, mortgage, and/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 |
Director Recommendations and Nominations by Stockholders
The Nominating and Corporate Governance Committee welcomes the Company’s stockholders to nominate candidates for Board membership. The Committee 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 Bylaws and the Committee’s charter. A summary of the requirements for nominating candidates is below under “Information Regarding Stockholder Proposals.”
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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. Annually, a cross-functional group from our Finance, Legal, and Investor Relations teams conducts an investor outreach to gather feedback on key strategic initiatives, corporate governance matters, executive compensation, and other topics of interest to our stockholders. We also regularly engage with proxy advisory firms. During our most recent outreach cycle, we contacted stockholders representing almost 60%approximately 40% of our outstanding Class A shares as of December 31, 2022,2023, and we met with stockholders whichwho held almost 30%25% of our outstanding shares. Feedback received during these conversations is communicated to and discussed by the full Board and relevant committees and helps to inform 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 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’s discretion, decline to forward any communications that are abusive, threatening, or otherwise 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.
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.com.
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DIRECTOR COMPENSATION
Our Compensation Committee is responsible for determining Director compensation. The table below illustrates the annual compensation structure for non-employee Directors in 20222023 (which is pro-rated for Directors who serve less than a full calendar year). Directors who are also employees, as well as our Chair and Co-Founder, receive no additional compensation for their services as Directors. The compensation Mr. Joyce received for Board service prior to becoming an employeewas not compensated as a Director in 2023, but is includedreceiving standard Director compensation in this section.2024. Mr. Joyce’s and Mr. Carlson’s compensation as an employee and Mr. Contos’s compensationemployees is included with that of our other Named Executive Officers below under “Executive Compensation.”
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Element | | ($) |
Retainer (cash) (1) |
| 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) |
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Additional Retainer for Nominating and Corporate Governance Committee Chair (cash) |
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Additional Retainer for Nominating and Corporate Governance Committee Member (cash) |
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Additional Retainer for Finance and Investment Committee Chair (cash) | | 10,000 |
Additional Retainer for Finance and Investment Committee Member (cash) | | 5,000 |
(1) | The amount in the table is the standard annual amount. In 2023 the Board held a two-day in person meeting in Denver related to the CEO search. Members who attended that meeting received an additional $20,000 in cash. |
The following table shows Director compensation for fiscal year 2022.
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| | Fees Earned or | | Stock | | All Other | | |
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| Paid in Cash |
| Awards |
| Compensation |
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Name | | ($) | | ($)(1) | | ($)(2) | | Total ($) |
Kathleen J. Cunningham |
| 131,250 | | 100,005 | | 2,205 | | 233,460 |
Joseph A. DeSplinter (3) |
| 120,000 | | 100,005 | | 2,205 | | 222,210 |
Roger J. Dow |
| 145,000 | | 100,005 | | 2,205 | | 247,210 |
Ronald E. Harrison |
| 110,000 | | 100,005 | | 2,205 | | 212,210 |
Stephen P. Joyce | | 21,250 | | — | | 2,205 | | 23,455 |
Laura G. Kelly | | 117,500 | | 150,021 | | 2,205 | | 269,726 |
David L. Liniger (4) |
| — | | — | | — |
| — |
Gail A. Liniger (4) |
| — | | — | | — |
| — |
Annita M. Menogan |
| 67,500 | | 50,015 | | — | | 117,515 |
Christine M. Riordan |
| 115,000 | | 100,005 | | 2,205 | | 217,210 |
Katherine L. Scherping | | 24,375 | | 25,008 | | — | | 49,383 |
Teresa S. Van De Bogart |
| 117,500 | | 100,005 | | 2,205 | | 219,710 |
(1) Reflects the grant date fair value of restricted stock units (“RSUs”) granted to each Director, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2022 Annual Report. As of December 31, 2022, each of Ms. Cunningham, Mr. DeSplinter, Mr. Dow, Mr. Harrison, Dr. Riordan, and Ms. Van De Bogart each had 3,374 unvested RSU, Ms. Kelly had 5,850 RSUs, Ms. Menogan had 2,476 unvested RSUs, and Ms. Scherping had 1,238 unvested RSUs, all of which vested on March 1, 2023.
(2) Reflects dividend equivalents paid in cash upon settlement of RSUs that vested in 2022.
(3) Mr. DeSplinter retired from our Board on December 8, 2022.
(4) Since our IPO in 2013, Mr. and Ms. Liniger have not received compensation for their service as Directors or officers (other than medical benefits similar to our employees).
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| | Fees Earned or | | Stock | | All Other | | |
| | Paid in Cash | | Awards | | Compensation | | |
Name |
| ($) |
| ($)(1) | | ($)(2) |
| Total ($) |
Erik Carlson | | — | | — | | — | | — |
Kathleen J. Cunningham |
| 131,250 | | 104,231 | | 3,104 | | 238,586 |
Roger J. Dow |
| 145,000 | | 104,231 | | 3,104 | | 252,336 |
Ronald E. Harrison (3) |
| 23,000 | | 52,125 | | 3,104 | | 78,229 |
Norman K. Jenkins (3) | | 86,000 | | 78,178 | | — | | 164,178 |
Stephen P. Joyce | | — | | — | | — | | — |
Laura G. Kelly (4) | | 98,500 | | 104,231 | | 3,104 | | 205,836 |
David L. Liniger (5) |
| — | | — | | — |
| — |
Gail A. Liniger (5)(6) |
| — | | — | | — |
| — |
Annita M. Menogan |
| 112,000 | | 104,231 | | — | | 216,231 |
Christine M. Riordan |
| 121,000 | | 104,231 | | 3,104 | | 228,336 |
Katherine L. Scherping | | 121,250 | | 104,231 | | — | | 225,481 |
Teresa S. Van De Bogart |
| 118,500 | | 104,231 | | 3,104 | | 225,836 |
(1) | Reflects the grant date fair value of restricted stock units (“RSUs”) granted to each Director, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2023 Annual Report. As of December 31, 2023, each of Ms. Cunningham, Mr. Dow, Ms. Kelly, Ms. Menogan, Dr. Riordan, Ms. Scherping, and Ms. Van De Bogart each had 5,409 unvested RSUs, all of which vested on March 1, 2024. As of December 31, 2023, Mr. Jenkins had 4,057 unvested RSUs which vested on March 1, 2024. |
(2) | Reflects dividend equivalents paid in cash upon settlement of RSUs that vested in 2023. |
(3) | Mr. Harrison retired from, and Mr. Jenkins was elected to, our Board on May 24, 2023. |
(4) | Ms. Kelly passed away in March 2024. |
(5) | Ms. Liniger was named Vice Chair Emerita of the Board on May 25, 2023, and, as of such date, is no longer a member of the Board. |
(6) | Since our IPO in 2013, Mr. and Ms. Liniger have not received compensation for their service as Directors or officers (other than medical benefits similar to our 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 and other Company events.
INFORMATION ABOUT EXECUTIVE OFFICERS
| Executive Officers | Biography: |
| Erik Carlson joined RE/MAX Holdings, Inc. as Chief Executive Officer in November 2023. He drives the strategy of RE/MAX Holdings, overseeing all operations for the Company and providing direction for its brands. Mr. Carlson is an accomplished public company executive, who for six years served as President and CEO of DISH Network Corporation (NASDAQ: DISH). Prior to joining RE/MAX Holdings in 2023, Mr. Carlson had a successful 28-year career at DISH Network Corporation, which he joined as an Account Executive in 1995. There, Mr. Carlson served in the following roles throughout the course of his tenure: Senior Vice President of Sales and Retail Services, Executive Vice President of Operations, President and Chief Operating Officer, and President and Chief Executive Officer. | |
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| 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: Position: Chief Financial Officer | |
| Abby C. Lee is our Executive Vice President, Marketing, Communications, and Events, a position she has held since February 2024. She previously served as Senior Vice President of Marketing and Communication since August 2018. Prior to that role, she served as Vice President, Brand Marketing and Sponsorship. She has served in other roles in her over 25-year career with RE/MAX. | |
| Abby C. Lee Age: 53 Position: Executive Vice President, Marketing, Communications, and Events | |
| Amy M. Lessinger is the President of RE/MAX, LLC. In that role, she leads all aspects of the RE/MAX network and business globally, driving growth worldwide, overseeing the development and delivery of RE/MAX, LLC support services to franchisees and agents, and setting the vision for the brand. She previously served as Senior Vice President, Region Development starting in January 2023 and as Vice President of Region Development since August 2020. Prior to beginning employment with RE/MAX, Amy had a successful career as a RE/MAX broker and agent for 22 years. | |
| Amy M. Lessinger Age: 51 Position: President, RE/MAX, LLC | |
| W. Grady Ligon joined RE/MAX Holdings as its Chief Information Officer in September 2022. He previously served as Chief Information Officer of Fathom Holdings from July 2020 through August 2022, as owner of Safis Digital from February 2021 through July 2022 and as Chief Information Officer of HSF Affiliates (which operates and manages the real estate brokerage and franchise networks Berkshire Hathaway Homes Services and Real Living Real Estate) from 2013 through February 2019. | |
| W. Grady Ligon Age: Position: Chief Information Officer | |
| Ward M. Morrison is the President and Chief Executive Officer of Motto Mortgage and wemlo. He previously served as President of Motto since Motto was launched in the fall of 2016. Prior to leading Motto Mortgage, 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. Prior to joining the Company, Mr. Morrison worked in various capacities in the real estate and mortgage industries, including as a mortgage broker and CFO of one of the largest RE/MAX brokerages. | |
| Ward M. Morrison Age: Position: President and Chief Executive Officer of Motto Mortgage and wemlo | |
| 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: Position: Chief of Staff and Chief Operating Officer | |
| Susie L. Winders has served as Executive Vice President, General Counsel, Chief Compliance Officer, and Secretary since February 2024. She previously served as Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary since March 2023, and as Vice President, General Counsel, Chief Compliance Officer, and Secretary since July 2022. Prior to that role, she was Senior Litigation Counsel since joining RE/MAX in 2009. | |
| Susie L. Winders Age: 53 Position: Executive Vice President, General Counsel, Chief Compliance Officer, and Secretary | |
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| RE/MAX Holdings, Inc. |
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PROPOSAL 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
What am I voting on? Stockholders will vote, on an advisory basis, whether to approve the compensation of Named Executive Officers. | | | We are asking stockholders to approve, on a nonbinding, advisory basis, the compensation paid to our Named Executive Officers (as defined below) as described in this proxy statement. This vote is commonly referred to as a “say on pay” vote. We encourage stockholders to read the Compensation Discussion and Analysis section below, which describes the philosophy, structure, and goals of our executive compensation program. We also encourage stockholders to review the information in the Compensation Tables section, which sets forth detailed information about Named Executive Officer compensation. In accordance with Section 14A of the Exchange Act, we are asking stockholders to vote on the following resolution at the Annual Meeting: RESOLVED, that the Stockholders of RE/MAX Holdings, Inc. (the “Company”) approve, on an advisory, nonbinding basis, the compensation of the Company’s Named Executive Officers disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table, and the related compensation tables, notes, and narratives in the Proxy Statement for the Company’s The advisory say-on-pay resolution is nonbinding on the Board. Although nonbinding, the Board and Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our Named Executive Officers, as described in this proxy statement in accordance with the rules of the SEC.
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What is the required vote? The resolution will be approved if a majority of shares voted vote FOR the resolution. |
Recommendation of the Board: The Board recommends you vote FOR the approval of the advisory resolution on executive compensation.
| RE/MAX Holdings, Inc. |
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COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Roadmap
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1 | | | Our Named Executive Officers | | | | Our Named Executive Officers | | ||
| | Our Named Executive Officers for 2022 | 30 | | | Our Named Executive Officers for 2023 | 28 | |||
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2 | | | Overview and Philosophy of our Executive Compensation Program | 30 | | | ||||
| | | Compensation philosophy and an overview of decisions on compensation practices | | ||||||
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3 | | | Compensation Best Practices | 31 | | | ||||
| | | Examples of practices we follow and some that we avoid | | ||||||
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4 | | | Performance Highlights | 31 | | | ||||
| | | Our key business achievements in 2023 | | ||||||
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5 | | | Elements of Executive Compensation | 32 | | | ||||
| | | Explanation of our primary components of executive compensation | | ||||||
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6 | | | Peer Group | 36 | | | ||||
| List of Peer companies used in 2022 | | | | | 35 | | | List of Peer companies used in 2023 | |
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7 | | | Other Compensation Policies and Risk Assessment | 37 | | | ||||
| | | Overview of other compensation policies and practices, including stock ownership guidelines, clawback policy, and compensation risk assessment | |
1 | Our Named Executive Officers |
In this Compensation Discussion and Analysis, we provide information on how we compensate our Named Executive Officers. Our Named Executive Officers for 20222023 were:
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● | Karri Callahan, Chief Financial Officer; |
● | Ward Morrison, President and Chief Executive Officer of Motto Mortgage and wemlo; |
● | Serene Smith, Chief Operating Officer and Chief of Staff; and |
2 | Overview and Philosophy of our Executive Compensation Program | ||||
Our 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 majority of each of our Executive Officer’s compensation is at risk. | |||||
Role of the | Role of | ||||
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, approving any other compensation or benefits, and 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. | The Chief Executive Officer, working with our Human Resources department and leveraging information from the Compensation Committee’s independent compensation consultant discussed below, recommends to the Compensation Committee the amount and form of compensation for officers other than the CEO. The CEO’s 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. | ||||
Role of | Stockholder | ||||
The Compensation Committee, pursuant to its charter, has the authority to engage advisers to assist the Committee. The Compensation Committee has engaged Meridian Compensation Partners, LLC (“Meridian”) since September 2020. Meridian is independent under NYSE standards. Meridian reports directly to the Compensation Committee. Meridian’s role is to provide advice and data to the Compensation Committee and assist in designing and administering executive compensation programs. Meridian also advises the Compensation Committee on Director compensation. | 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 |
3 | Compensation Best Practices |
We have adopted common best practices that are consistent with our compensation philosophy and serve the long-term interests of our stockholders. These include the following:
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What we do: | | What we don’t do | ||
● Our short-term incentive award goals are 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. ● We have multi-year targets for LTI performance. ● We compare executive compensation targets against a relevant ● We engage with stockholders on executive compensation matters. ● We have stock ownership guidelines. ● We have a clawback policy. ● We conduct a compensation risk assessment. ● 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 single-trigger change in control provisions for cash severance or in equity awards. ● We do not provide excise tax gross-ups for change in control severance benefits. ● Our Insider Trading Policy prohibits hedging or pledging Company stock without Board approval. ● We do not pay accumulated dividends on restricted stock units until vesting. |
4 | Performance Highlights |
Despite a challenging macro-economic environment for the real estate industry, the Company continued to execute on its growth initiatives and grow revenue and Adjusted EBITDA1its franchise brands in 2022.2023.
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$ Revenue | $ Adjusted EBITDA1 |
Amidst a historically challenging housing market, RE/MAX Holdings continues to focus on growing its RE/MAX and Motto Mortgage brands, thereby increasing revenue and ultimately the Company’s profitability and cash flow.
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Total RE/MAX agent count grew in 2023 by 0.6% to 144,835 agents.
Total open Motto Mortgage franchises increased 6.5% to 246 offices.
1 Adjusted EBITDA is a non-GAAP measure. Please see Appendix 1 on page 7866 of this Proxy Statement for a definition of this term and reconciliation with the most directly comparable GAAP measure.
5 | Elements of Executive Compensation |
The compensation of our Named Executive Officers consists primarily of base salary, short-term incentive, and long-term incentive compensation.
Compensation Element | Key Features | Primary Objectives |
Base Salary | Factors considered in determining Base Salary: ● the recommendation of the CEO (for officers other than the CEO), ● market data provided by the Company’s compensation consultant 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 | Mr. Joyce | Motivate & Reward officers for meeting and exceeding personal and corporate |
Long-Term Equity Incentive Compensation | Mr. Carlson’s long-term incentive compensation in 2023 consisted of inducement grants with a mix of time-based vesting and performance-based vesting based on share price targets. Mr. Joyce’s long-term incentive compensation in 2023 consisted of a grant of stock options in March 2023, which vested
Long-term incentive grants for other Named 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 Motivate & Reward Company Retain key personnel through long-term |
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 |
30 | RE/MAX Holdings, Inc. | 2024 Proxy Statement |
Pay Mix
Base salary 18%, bonus 32%, equity grant 49%, other 1%. Average of other NEOs: base salary 25%, bonus 23%, equity grant 51%, other 1%
The tables above show the pay mix for theMr. Joyce, our CEO for most of 2023, and the other Named Executive Officers as a group for 20222023 based on the actual bonus paid and grant date fair value of equity grants (as reflected in the Summary Compensation Table below).
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Base Salary
Each Named Executive Officer receives a base salary, which is a fixed component of their compensation. Paying a competitive base salary is a crucial aspect of attracting and retaining qualified leaders who will drive the Company’s success. The Company aims to pay experienced, seasoned officers near the midpoint of the established base salary range for that position, based on data from its compensation consultant. Base salary for each of the Executive Officers is determined by the Compensation Committee, taking into account the recommendation of the CEO (for Executive Officersofficers other than the CEO), market data provided by the Company’s compensation consultant 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, taking into account factors 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. Mr. Joyce’s annual base salary for 2023 was $1,200,000 and Mr. Carlson’s annual base Salary for 2023 was $825,000. The table below shows the base salary increases for each of the Named Executive Officers, other than Mr. Joyce and Mr. ContosCarlson (neither of whom received an increase to base salary in 2022)2023). Each of the below Executive Officers received a base salary increase was effective on March 1, 2022.2023 and certain of them received an increase effective on September 16, 2023.
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| After Increase ($) | Beginning of 2023 ($) | March 1, 2023 ($) | September 16, 2023 ($) |
Nicholas R. Bailey | | 390,000 | | 403,650 | |||
Karri R. Callahan | | 385,000 | | 398,475 | 398,475 | 475,000 | |
Ward M. Morrison | | 350,000 | | 362,250 | 362,250 | 380,363 | 430,363 |
Serene M. Smith | | 360,000 | | 372,600 | 372,600 | 391,230 | |
Nicholas R. Bailey | 403,650 | 423,833 | 478,931 |
Short-Term Incentive
General Description
We use annual incentives to motivate and reward Executive Officers for meeting and exceeding personal and Company objectives. Mr. Joyce doesdid not participate in the short-term incentive program. Other than a $100,000 signing bonus he received when he entered into his employment agreement in January 2022, he did not receive any short-term incentive. For other Namedincentive related to his tenure as Chief Executive Officers, theOfficer. Mr. Carlson’s short-term incentive compensation for 2023 consisted of a bonus which amount was guaranteed pursuant to his employment agreement. This guaranteed bonus applied only to 2023. The annual incentive paid with respect to 20222023 performance for other Named Executive Officers was one-half cash and one-half Class A common stock of the Company that was fully vested upon grant.
2024 Proxy Statement | RE/MAX Holdings, Inc. | 31 |
The annual incentive depends on individual and Company performance during the prior year. Each year, the Compensation Committee adopts an annual short-term incentive plan pursuant to the Omnibus Incentive Plan. Pursuant to the incentive plan for 2022,2023, each of our Named Executive Officers (other than Mr. Joyce and Mr. Carlson) was eligible for an annual incentive based on a percentage of such officer’s base salary.
Award amounts for Executive Officers under the 20222023 annual incentive plan are based on both Company and individual performance. For Executive Officers, half70% of the annual incentive is based on Company-wide financial and operational goals and half30% is based on individual strategic goalsinitiatives that are tied to profitable growth.
For Company performance, the Compensation Committee establisheduses a measurement called Bonus Adjusted EBITDA1, which is the Company’s Adjusted EBITDA, excluding bonus expense, and including such other adjustments that the Compensation Committee deems appropriate. We believe Bonus Adjusted EBITDA reflects the performance of our business, facilitates a meaningful evaluation of operating results on a comparable basis with historical results and helps align executive compensation with stockholders’ interests.
For individual performance, the CEO, working with our Human Resources department, prepares strategic goals for each Executive Officer (other than the CEO). The Compensation Committee then reviews and revises these goals as it deems appropriate, before approving them. Following the end of the year, the Compensation Committee evaluates the officer’s performance against such goals to establish the individual performance used in determining the annual incentive. The Compensation Committee also evaluates how each Executive Officer lives up to RE/MAX Holdings MORE values in determining the individual component of the short-term incentive.
For both Company financial performance and individual strategic goals, the Compensation Committee sets levels for threshold, target, and stretch performance.
2023 Goals and Results
The Compensation Committee set the 2023 Bonus Adjusted EBITDA goals as follows:
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Bonus Adjusted EBITDA (in millions) | |||
Threshold | Target | Maximum | |
(50% Payout) | (100% Payout) | (200% Payout) | Actual |
$95.0 | $103.0 | $116.9 | $100.0 (81% of Target) |
In addition to Bonus Adjusted EBITDA, the other corporate performance goals for the Named Executive Officers were RE/MAX Agent Count, RE/MAX Franchise Sales, Motto Franchise Sales, and wemlo loans processed. Each Named Executive Officer’s short-term incentive was based in part on these metrics, with individual weighting for each Named Executive Officer.
In 2023, the Company, under the leadership of Mr. Joyce and Mr. Carlson, continued to execute on several strategic initiatives centered on reinvigorating U.S. agent count growth and accelerating the expansion of its growing mortgage business. Individual performance goals for 2023 were largely related to these initiatives and included:
● | Rolling out kvCORE, the next step in the evolution of RE/MAX technology and continuing the transition from certain in-house technology to the kvCORE platform; |
● | Launching the MAX/Recruit program, which combines proven principals and tactics such as education, coaching and accountability for RE/MAX Broker/Owners, recruiters and team leaders to help grow their operations; |
● | Improving the RE/MAX and Motto customer experience; |
● | Opening new Motto offices; |
● | Rolling out the wemlo loan brokering system; |
● | Managing ongoing industry litigation; and |
● | Improving employee success and engagement. |
1 Adjusted EBITDA and Bonus Adjusted EBITDA are non-GAAP measures. See Appendix 1 on page 7868 of this Proxy Statement for the definition these terms and reconciliation to the most directly comparable GAAP financial measures.
| RE/MAX Holdings, Inc. | 2024 |
2022 Goals and Results
The Compensation Committee set the 2022 Bonus Adjusted goals as follows
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Bonus Adjusted EBITDA (in millions) | ||||
Threshold |
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$131.7 | | $139.9 | | $154.4 |
Actual 2022 Bonus Adjusted EBITDA was $127.7. As this amount was below threshold, no Named Executive Officer received any payment with respect to the financial component of the short-term incentive program for 2022.
Following the CEO change in the first quarter of 2022, the Company, under the new leadership of Mr. Joyce, embarked on several strategic initiatives centered on reinvigorating U.S. agent count growth and accelerating the expansion of its growing mortgage business. Individual performance goals for 2022 were largely related to these initiatives and included:
After evaluating each Named Executive Officer’s (other than Mr. JoyceCarlson and Mr. Contos) 2022Joyce) 2023 performance related to their corporate and individual performance goals, the Compensation Committee awarded each Named Executive Officer (other than Mr. JoyceCarlson and Mr. Contos)Joyce) a bonus at the target level for the individual strategic objectives component of the 2022 annual incentive plan.
As no Named Executive Officer received any annual incentive related to the Company financial performance and each Named Executive Officer (other than Mr. Joyce and Mr. Contos) received a target level achievement on the individual strategic objectives component, each Named Executive Officer (other than Mr. Joyce or Mr. Contos) received an annual incentive of 50% of target.as shown below.
The table below shows the target bonus as a percentage of base salary, the target as a dollar amount, and the actual bonus paid to each Named Executive Officer (other than Mr. Joyce and Mr. Contos)Carlson). Mr. Joyce is not included because he did not participate in the short-term incentive program and Mr. ContosCarlson is not included because his bonus was paid pursuant to his separationemployment agreement. (The guaranteed bonus for Mr. Carlson applies only to 2023. His bonus for future years will be performance-based.)
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| | Target Bonus | | Target Bonus | | Bonus Achievement | | Bonus Payout | Target Bonus | Bonus Payout | Bonus Achievement | |
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Nicholas R. Bailey | | 50% | | 201,825 | | 50% | | 100,913 | ||||
Karri R. Callahan | | 50% | | 199,238 | | 50% | | 99,619 | 70% | 332,500 | 255,070 | 77% |
Ward M. Morrison | | 50% | | 181,125 | | 50% | | 90,563 | 70% | 301,254 | 156,336 | 52% |
Serene M. Smith | | 50% | | 186,300 | | 50% | | 93,150 | 70% | 273,861 | 173,115 | 63% |
Nicholas R. Bailey | 70% | 335,252 | 266,685 | 80% |
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In addition to the annual incentive, the Compensation Committee has discretion to pay additional bonuses to Named Executive Officers based on special projects or other exceptional circumstances and has authorized the CEO to grant project-based bonuses to other Company non-executive officers or personnel at any time.
In January of 2022, each of the Named Executive Officers, other than Mr. Joyce and Mr. Contos, received a discretionary bonus pursuant to Reward and Retention Bonus Agreements approved by the Compensation Committee. The Compensation Committee adopted the Reward and Retention Agreements primarily to encourage retention of the Company’s management team given the transition of the Company’s Chief Executive Officer (following the announcement of Mr. Contos’s departure) and amidst the highly competitive market for talent, both within the real estate and mortgage industries and, more generally, for seasoned top leadership with the specific expertise possessed by these Named Executive Officers.
The table below shows the amount paid to each Named Executive Officer pursuant to the Reward and Retention Agreements, other than Mr. Joyce and Mr. Contos, neither of whom entered into a Reward and Retention Agreement.
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The bonus paid to Mr. Contos was pursuant to his separation agreement and was based on the target level bonus under the 2022 annual incentive plan, pro-rated for the portion of the year that he served as Chief Executive Officer or Co-Chief Executive Officer.
Long-Term Equity Incentive Compensation
The Compensation Committee also grants Executive Officers and other Company officers and certain employees 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 (other than the CEO). The Compensation Committee reviews this recommendation and grants equity awards for Executive Officers and, for other recipients, either grants the awards or delegates authority to grant individual awards to the CEO.
The Compensation Committee believes theLong Term Equity Incentive Grants to Mr. Joyce and Mr. Carlson
Mr. Carlson’s long-term incentive program should incentivize performancecompensation consisted of a mix of approximately 49% performance-based awards and align the interests of the officers with stockholders.approximately 51% time-based awards, while Mr. Joyce’s long-term incentive compensation consisted entirelyof a mix of options, which vested monthly, and time-based awards due to the temporary nature of his role as Interim Chief Executive Officer.
Mr. Carlson’s long-term incentive grants in 2023 comprised time-based RSU grants and a performance-based RSU grant. The time-based grants are (i) RSUs that are scheduled to vest monthly.on the first anniversary of his start date and (ii) RSUs that are scheduled to vest on March 1, 2025, March 1, 2026, and March 1, 2027. The Compensation Committee believesperformance-based grant is RSUs that these option grants incentivizevest based on the price of the Company’s class A common stock during a performance that runs through December 31, 2027. The actual number of performance-based RSUs that will vest for Mr. JoyceCarlson’s performance awards range from 0% to grow shareholder value.200% of the target award, depending on the Company’s volume-weighted average stock price measured over a rolling 60 calendar day period. The table below shows the required volume weighted average price for the respective percentage of target to vest.
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Stock Price | % of | Target |
Threshold | Target | That Has |
Levels | Vests | Vested |
$20.0 | 25% | 25% |
$25.0 | 25% | 50% |
$30.0 | 25% | 75% |
$35.0 | 25% | 100% |
$40.0 | 25% | 125% |
$45.0 | 25% | 150% |
$50.0 | 25% | 175% |
$55.0 | 25% | 200% |
2024 Proxy Statement | RE/MAX Holdings, Inc. | 33 |
Long-Term Incentive Grants to Other Named Executive Officers
Other Named Executive Officers receive restricted stock unit grants, which are generally a mix of 60% performance-based grants and 40% 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 officers to drive stockholder value.
For the Named Executive Officers (other than Mr. Joyce and Mr. Contos) in 2022, 60 percent of the awards that were granted had performance-based vesting and 40 percent of the awards that were granted had time-based vesting. The time-based awards, which generally vest in three equal annual installments, provide more predictable compensation, promote retention, and align Executive Officers’ interests with stockholders’those of stockholders through meaningful stock ownership.
Each Named Executive Officer (other than Mr. JoyceCarlson, and Mr. Contos)Joyce) was granted a target number of performance-based restricted stock units, which vest based on Company revenue. The Compensation Committee chose this metric because it aligns withsupports the Company’s pay-for-performance philosophy,growth strategy, incentivizes Executive Officers to increase revenue in order to drive stockholder value, and diversifies the performance criteria by using different metrics than those used for other incentive programs. The award is based on revenue for three one-year performance periods, with no restricted stock units vesting until the full three-year performance period is complete. The Compensation Committee sets threshold, target, and stretch goals for revenue for each year of the three-year performance period early in each year. If, in any year, the threshold level is not met, the portion of the award based on that year does not vest. If the threshold is met, the number of restricted stock units that vest is 50% of the target at the threshold level, 100% at target, and 200% of the target amount at the stretch level (with actual payout based on linear interpolation between the levels).
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The table below shows the threshold, target, and stretch performance levels, as well as actual results and percentage payout for completed years. (We do not disclose revenue targets prospectively for competitive reasons.)
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Revenue-based awards (Revenue in millions) | ||||||||||
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| | (50% Payout) | | (100% Payout) | | (200% Payout) | | Actual | | Percentage |
2021 | | $289.3 | | $304.5 | | $335.0 | | $329.7 | | 183% |
2022 | | $337.4 | | $351.5 | | $379.6 | | $347.8 | | 87% |
2023 | | $313.7 | | $330.2 | | $363.2 | | $325.7 | | 86% |
Retention Bonuses in Connection with New CEO
In November of 2023, each of the Named Executive Officers, other than Mr. Carlson and Mr. Joyce, entered into a Retention Agreement approved by the Compensation Committee.
| | | | | | | | | | |
| ||||||||||
Revenue-based awards (2021 and 2022) (Revenue in millions) | ||||||||||
|
| Threshold |
| Target |
| Stretch |
| Actual |
| Payout Percentage |
2021 | | $289.3 | | $304.5 | | $335.0 | | $329.7 | | 183% |
2022 | | $337.4 | | $351.5 | | $379.6 | | $347.8 | | 87% |
The Compensation Committee adopted the Retention Agreements primarily to encourage retention of the Company’s management team given the transition of the Company’s Chief Executive Officer and amidst the highly competitive market for talent, both within the real estate and mortgage industries and, more generally, for seasoned top leadership with the specific expertise possessed by these Named Executive Officers.
Prior to 2021, the performance-based awards were based on revenue and relative total shareholder return (“rTSR”) over the three-year performance period. The table below shows the goals foramount certain each Named Executive Officer are eligible to receive pursuant to the threshold, target,Retention Agreements, other than Mr. Carlson and stretch levels,Mr. Joyce, neither of whom entered into a Retention Agreement. These cash retention awards are payable on the first anniversary of Mr. Carlson’s start date (which was November 13, 2023), other than Ms. Callahan’s award, which is payable on February 28, 2025, subject in each case to the grantee’s employment through the applicable date. The Retention Awards may be paid earlier than such date in the event a Named Executive Officer’s employment is terminated without cause or the Named Executive Officer terminates his or her employment with good reason, or due to death or disability, as well assuch terms are defined in the actual resultsRetention Agreements. Mr. Bailey’s employment was terminated by the Company without cause (as such term is defined in the Retention Agreement), and payout for the 2020 long-term incentive awards.
| | | | | | | | | | |
| ||||||||||
2020 Performance-Based RSUs (Revenue in millions) | ||||||||||
|
| Threshold |
| Target |
| Stretch |
| Actual |
| Payout Percentage |
rTSR | | 35% | | 55% | | 75% | | Below threshold | | 0% |
Revenue | | $635.7 | | $664.2 | | $682.8 | | $702.0 | | 150% |
therefore Mr. Bailey’s Retention award was paid on March 27, 2024.
Payout is 0% if below threshold, 25% at threshold for the revenue portion and 50% at threshold for the rTSR portion, 100% at target for both revenue and rTSR and 150% at stretch for both revenue and rTSR. Payout is based on linear interpolation between the levels. The Company’s performance exceeded the stretch level for the revenue portion of the equity awards and was below the threshold for the rTSR portion. We no longer use rTSR for LTI awards, but all past rTSR awards had a cap where the payout could not exceed the target level if rTSR were negative for the performance period.
| |
| |
| Retention Agreement |
Name | Payout ($) |
Karri R. Callahan | 712,500 |
Ward M. Morrison | 430,363 |
Serene M. Smith | 391,230 |
Nicholas R. Bailey | 478,931 |
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. Generally, the Company’s benefits for its Executive Officers are substantially the same as those provided to other officers and employees.
34 | RE/MAX Holdings, Inc. | 2024 Proxy Statement |
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6 | Peer Group |
In late 2020, working with Meridian, the Compensation Committee chose a new peer group for executive compensation. In selecting peers, the Compensation Committee took a holistic approach, considering revenue and other relevant factors. The peer group includes companies that share similar traits with RE/MAX Holdings, such as franchisors and companies in the real estate industry, lenders, technology companies, and companies based in Colorado. The Company and Meridian regularly review the peer group and the Company has continued to refine the peer group.
In selecting companies for the peer group, one goal was to include 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 management extend beyond the operations and revenue of the Company. The Company operates two franchised brands with franchisees who operate in over 110 countries and territories. While each franchised office is independently owned and operated, Company management is responsible for matters such as managing franchise relationships, including encouraging and supporting franchisees in their growth; marketing, expanding, and protecting the Company’s 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.
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The peer group is one resource for data on executive pay. This data may be supplemented by proprietary surveys of compensation market data and other sources. The Company believes the use of this peer group will allow the Committee to effectively make informed pay decisions.
Peer Group for 2023 Compensation |
Anywhere Real Estate, Inc. CarGurus, Inc. Cars.com, LLC Concrete Pumping Holdings, Inc. CSG Systems International, Inc. Dine Brands Global, Inc. Emerald Holding, Inc. Enova International, Inc. eXp World Holdings, Inc. LendingClub Corporation Marcus & Millichap, Inc.
Noodles & Company
Planet Fitness, Inc. Quotient Redfin Corporation
The ONE Group Hospitality,
Wingstop Inc. Zillow Group, Inc. |
7 | Other Compensation Policies and Compensation Risk Assessment |
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 following activities without the prior written consent of the Board of Directors: pledging Company stock, entering into hedging transactions involving Company stock, short sales of Company stock, and trading in derivative securities related to Company stock. No officers, employees, or Directors have been granted consent to engage in any such transactions.
2024 Proxy Statement | RE/MAX Holdings, Inc. | 35 |
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 other officers who are Senior Vice President or higher. The stock
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ownership guidelines provide a minimum share ownership level for Directors and certain officers based on a multiple of base salary or cash retainer. The multiples are as follows:
| | | | | |
Chief Executive Officer of RE/MAX Holdings | |||||
| | | | | 5x base salary |
Other Executive Officers | |||||
| | 2x base salary | |||
Other officers subject to the guidelines (SVP and higher): | |||||
| 1x base salary | ||||
Non-employee Directors: | |||||
| | | 3x base cash retainer |
The guidelines do not mandate a time period to reach the applicable 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 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.
Clawback Policy
The Board has adopted an Incentive Compensation Recoupment Policy pursuant to which the Board may recover incentive compensation in certain circumstances. The policy was amended and restated in 2023. The policy applies to each officer whom the Board has designated as a Section 16 officer (as defined in Section 16 of the Securities Exchange Act of 1934) of the Company (referred to as “Covered Officers”). Pursuant to the policy, in the event of misconduct by a Covered Officer that causes or contributes to a restatement of the Company’s financial statements, the Board may, in its discretion andshall to the extent permitted by applicable law, seek to recover incentive compensation paid to such Covered Officer during the three years preceding the restatement to the extent such incentive compensation exceeded the incentive compensation that would have been paid to such Covered Officer based on the restated results. All compensation, whether paid in cash or in stock, that is based wholly or in part upon the attainment of any measure based on financial reporting measures is subject to the Amended and Restated Incentive Compensation Recoupment Policy.
Compensation Risk Assessment
In 2022,2023, the Compensation Committee, working with its Compensation Consultant, conducted a risk assessment of the Company’s compensation practices. In conducting the assessment, the Committee evaluated the inherent risks of the Company’s business and how the Company’s compensation program mitigates the risk of excessive risk taking. As a result of the risk assessment, the Committee determined that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
| RE/MAX Holdings, Inc. |
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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 20222023 for filing with the SEC.
Compensation Committee:
Roger J. Dow, Chair
Ronald E. Harrison
Laura G. KellyNorman K. Jenkins
Annita M. Menogan
Dr. Christine M. Riordan
COMPENSATION TABLES
Summary Compensation Table
The following table presents information regarding compensation earned by or awards to our Named Executive Officers during fiscal years 2023, 2022, 2021, and 2020.2021.
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | Non-Equity | | | | |
| | | | | | | | Stock | | Incentive Plan | | All Other | | |
| | | | Salary | | Bonus | | Awards | | Compensation | | Compensation | | |
Name and Principal Position |
| Fiscal Year |
| ($) |
| ($)(1) |
| ($)(2) |
| ($)(3) |
| ($) |
| Total ($) |
Stephen P. Joyce, CEO | | 2022 | | 1,000,000 | | 100,000 | | 1,537,536 | | — | | — | | 2,637,536 |
Nicholas R. Bailey, President and CEO of RE/MAX, LLC | | 2022 | | 401,375 | | 312,000 | | 807,300 | | 100,913 | | 18,448 | (4) | 1,640,036 |
| | 2021 | | 377,288 | | — | | 762,493 | | 356,400 | | 7,773 | | 1,503,954 |
| | 2020 | | 358,333 | | 115,000 | | 731,787 | | — | | 3,888 | | 1,209,008 |
Karri R. Callahan, Chief Financial Officer | | 2022 | | 396,229 | | 333,000 | | 796,950 | | 99,619 | | 35,345 | (4) | 1,661,143 |
| | 2021 | | 380,833 | | — | | 770,026 | | 351,900 | | 13,532 | | 1,516,291 |
|
| 2020 | | 358,333 | | 115,000 | | 731,787 | | — | | 14,607 | | 1,219,727 |
Ward M. Morrison, President and CEO, Motto Mortgage and wemlo | | 2022 | | 360,208 | | 280,000 | | 724,500 | | 90,563 | | 28,196 | (4) | 1,483,467 |
| | 2021 | | 337,500 | | — | | 700,020 | | 319,900 | | 11,767 | | 1,369,187 |
| | 2020 |
| 270,833 | | 88,438 | | 559,029 | | — | | 16,074 | | 934,374 |
Serene M. Smith, Chief of Staff and Chief Operating Officer | | 2022 | | 370,500 | | 288,000 | | 745,200 | | 93,150 | | 33,909 | (4) | 1,530,759 |
|
| 2021 | | 356,667 | | — | | 720,004 | | 329,000 | | 14,157 | | 1,419,828 |
| | 2020 | | 338,333 | | 108,750 | | 691,165 | | — | | 9,960 | | 1,148,208 |
Adam M. Contos, Former CEO | | 2022 | | 187,500 | | 187,500 | | 872,418 | | — | | 695,792 | (5) | 1,943,210 |
| | 2021 | | 741,667 | | — | | 2,275,033 | | 1,370,800 | | 52,471 | | 4,439,971 |
|
| 2020 | | 700,000 | | 440,000 | | 1,245,072 | | — | | 9,097 | | 2,394,169 |
(1) Represents discretionary cash bonuses in the year in which they were earned. Bonuses paid pursuant to incentive plans are reported in the “Non-Equity Incentive Plan Compensation” column. Each Named Executive Officer’s bonus in 2020 was paid approximately half in cash and half in equity (except for a $2,500 bonus to each Named Executive Officer in 2020 that was paid entirely in cash). For additional details, see “Compensation Discussion and Analysis” above.
(2) Reflects the grant date fair value of options granted to Mr. Joyce and RSUs granted to other Named Executive Officers, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2022 Annual Report. A portion of the awards to Mr. Bailey, Ms. Callahan, Mr. Morrison, and Ms. Smith was performance-based RSUs. The value of the performance-based RSU awards granted in 2022, assuming achievement of the maximum performance level for performance-based awards, would have been. :Mr. Bailey: $968,813; Ms. Callahan: $956,364; Mr. Morrison: $869,400; and Ms. Smith: $894,298. The amount for Mr. Contos in 2022 represents the value of RSUs the vesting of which was accelerated pursuant to his separation agreement.
(3) Reflects the awards that our Named Executive Officers received under each year’s incentive plan. The awards in this column were paid half in cash and half in Class A common stock of the Company. Further details of incentive plans are above in the Compensation Discussion and Analysis.
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| | | | | | | | | | Non-Equity | | | | |
| | | | | | | | Stock | | Incentive Plan | | All Other | | |
| | Fiscal | | Salary | | Bonus | | Awards | | Compensation | | Compensation | | |
Name and Principal Position |
| Year |
| ($) |
| ($)(1) |
| ($)(2) |
| ($)(3) |
| ($) |
| Total ($) |
Erik Carlson, CEO | | 2023 | | 112,644 | | 108,493 | | 4,315,215 | (4) | — | | — | | 4,536,352 |
Stephen P. Joyce, Former CEO | | 2023 | | 1,136,922 | | — | | 1,237,318 | | — | | — | | 2,374,240 |
| | 2022 | | 1,000,000 | | 100,000 | | 1,537,536 | | — | | — | | 2,637,536 |
Karri R. Callahan, Chief Financial Officer | | 2023 | | 462,246 | | — | | 1,093,919 | | 255,070 | | 58,269 | (5) | 1,869,504 |
| | 2022 | | 396,229 | | 333,000 | | 796,950 | | 99,619 | | 35,345 | | 1,661,143 |
| | 2021 | | 380,833 | | — | | 770,026 | | 351,900 | | 13,532 | | 1,516,291 |
Ward M. Morrison, President and CEO, Motto Mortgage and wemlo | | 2023 | | 391,928 | | — | | 887,229 | | 156,336 | | 52,051 | (5) | 1,487,544 |
| | 2022 | | 360,208 | | 280,000 | | 724,500 | | 90,563 | | 28,196 | | 1,483,467 |
| | 2021 | | 337,500 | | — | | 700,020 | | 319,900 | | 11,767 | | 1,369,187 |
Serene M. Smith, Chief of Staff and Chief Operating Officer | | 2023 | | 388,125 | | — | | 912,569 | | 173,115 | | 55,581 | (5) | 1,529,390 |
| | 2022 | | 370,500 | | 288,000 | | 745,200 | | 93,150 | | 33,909 | | 1,530,759 |
|
| 2021 | | 356,667 | | — | | 720,004 | | 329,000 | | 14,157 | | 1,419,828 |
Nicholas R. Bailey, Former President and CEO of RE/MAX, LLC | | 2023 | | 436,539 | | — | | 988,609 | | 266,685 | | 58,225 | (5) | 1,750,058 |
| | 2022 | | 401,375 | | 312,000 | | 807,300 | | 100,913 | | 18,448 | | 1,640,036 |
| | 2021 | | 377,288 | | — | | 762,493 | | 356,400 | | 7,773 | | 1,503,954 |
(1) | Represents discretionary cash bonuses in the year in which they were earned. Bonuses paid pursuant to incentive plans are reported in the “Non-Equity Incentive Plan Compensation” column. For Mr. Carlson, the amount represents the guaranteed bonus for 2023 that he received pursuant to his employment agreement. |
(2) | Reflects the grant date fair value of options and RSUs granted to Mr. Joyce and RSUs granted to other Named Executive Officers, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2023 Annual Report. A portion of the awards to Mr. Carlson, Mr. Bailey, Ms. Callahan, Mr. Morrison, and Ms. Smith were performance-based RSUs. The value of the performance-based RSU awards granted in 2023 (excluding Mr. Carlson), assuming achievement of the maximum performance level for performance-based awards, would have been: Mr. Bailey: $1,060,120; Ms. Callahan: $1,188,111; Mr. Morrison: $951,398; and Ms. Smith: $978,569. |
(3) | Reflects the awards that our Named Executive Officers received under each year’s incentive plan. The awards in this column were paid half in cash and half in Class A common stock of the Company. Further details of incentive plans are above in the Compensation Discussion and Analysis. |
(4) | Assumes achievement of the maximum performance-level for Mr. Carlson’s performance-based awards. The actual number of restricted stock units that vest will range from 0% to 200% of the target award, depending on the Company’s stock price over the performance period. |
(4) Reflects matching contributions made under our 401(k) plan ($10,250 for each of Mr. Bailey, Ms. Callahan, and Ms. Smith and $13,500 for Mr. Morrison), dividend equivalents paid in cash upon vesting of RSUs (Mr. Bailey: $8,086 , Ms. Callahan: $24,982, Mr. Morrison: $14,583, Ms. Smith: $23,546) and a tax gross-up of approximately $115 for a holiday gift to each of Mr. Bailey, Ms. Callahan, Mr. Morrison, and Ms. Smith.
(5) Reflects salary continuation of $562,500 and health insurance benefits with an estimated cost of $15,438 paid to Mr. Contos in 2022 pursuant to his separation agreement. Payment of these benefits is contingent upon Mr. Contos’s continued compliance with his separation agreement, therefore only amounts paid in 2022 are included. Further information about Mr. Contos’s separation agreement is below under “Potential Payments on Termination/Change in Control.” Also includes matching contribution under our 401(k) plan ($13,500) and dividend equivalents paid in cash upon vesting of RSUs ($94,061).
(5) | Reflects matching contributions made under our 401(k) plan ($11,250 for each of Ms. Callahan, Ms. Smith, and Mr. Bailey and $15,000 for Mr. Morrison), dividend equivalents paid in cash upon vesting of RSUs (Ms. Callahan: $47,019, Mr. Morrison: $37,051, Ms. Smith: $44,331, and Mr. Bailey: $46,975). |
Grants of Plan-Based Awards
The following table provides information regarding equity grants to our Named Executive during 2022.2023.
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| | | | | | | | | | | | | | | | All other | | | | | | |
| | | | | | | | | | | | | | | | stock | | | | | | Grant date |
| | | | | | | | | | | | | | | | awards | | All other | | | | fair value |
| | | | | | | | | | | | | | | | Number of | | option | | | | of |
| | | | Estimated future payouts under | | Estimated future payouts under | | shares of | | awards: | | Exercise | | stock and | ||||||||
| | | | non-equity incentive plan awards (1) | | equity incentive plan awards | | stock or | | Number of | | or base | | option | ||||||||
| | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | units | | Securities | | price | | awards |
Name |
| date |
| ($) |
| ($) |
| ($) |
| (#) |
| (#) |
| (#) |
| (#) |
| (#) | | ($) | | ($) (5) |
Stephen P. Joyce |
| 1/10/2022 | | — | | — | | — | | — | | — | | — | | — | | 91,827 | | 29.91 | | 999,996 |
| | 9/7/2022 | | — | | — | | — | | — | | — | | — | | — | | 62,000 | | 21.85 | | 537,540 |
Nicholas R. Bailey | | — | | 100,913 | | 201,825 | | 302,738 | | — | | — | | — | | — | | | | | | — |
| | 3/1/2022 | | — | | — | | — | | 8,172 | | 16,343 | | 32,686 | (2) | — | | | | | | 484,407 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 10,895 | (3) | | | | | 322,928 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 6,013 | (4) | | | | | 178,225 |
Karri R. Callahan |
| — |
| 99,619 | | 199,238 | | 298,856 | | — | | — | | — | | — | | | | | | — |
| | 3/1/2022 | | — | | — | | — | | 8,067 | | 16,133 | | 32,266 | (2) | — | | | | | | 478,182 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 10,756 | (3) | | | | | 318,808 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 5,937 | (4) | | | | | 175,973 |
Ward M. Morrison | | — | | 90,563 | | 181,125 | | 271,688 | | — | | — | | — | | — | | | | | | — |
| | 3/1/2022 | | — | | — | | — | | 7,333 | | 14,666 | | 29,332 | (2) | — | | | | | | 434,700 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 9,778 | (3) | | | | | 289,820 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 5,397 | (4) | | | | | 159,967 |
Serene M. Smith | | — |
| 93,150 | | 186,300 | | 279,450 | | — | | — | | — | | — | | | | | | — |
| | 3/1/2022 | | — | | — | | — | | 7,543 | | 15,086 | | 30,172 | (2) | — | | | | | | 447,149 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 10,057 | (3) | | | | | 298,089 |
| | 3/1/2022 | | — | | — | | — | | — | | — | | — | | 5,550 | (4) | | | | | 164,502 |
(1) Represents potential payouts under the 2022 Bonus Plan. Actual amounts paid are reflected above in the Summary Compensation Table.
(2) Represents performance-based RSUs that are subject to vesting based on Company performance during 2022, 2023, and 2024.
(3) Represents (i) time-based RSUs that are scheduled to vest on March 1, 2023, 2024, and 2025.
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| | | | | | | | | | | | | | | | All other | | | | | | |
| | | | | | | | | | | | | | | | stock | | | | | | Grant date |
| | | | | | | | | | | | | | | | awards | | All other | | | | fair value |
| | | | | | | | | | | | | | | | Number of | | option | | | | of |
| | | | Estimated future payouts under | | Estimated future payouts under | | shares of | | awards: | | Exercise | | stock and | ||||||||
| | | | non-equity incentive plan awards (1) | | equity incentive plan awards | | stock or | | Number of | | or base | | option | ||||||||
| | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | units | | Securities | | price | | awards |
Name |
| date |
| ($) |
| ($) |
| ($) |
| (#) |
| (#) |
| (#) |
| (#) |
| (#) | | ($) | | ($) (9) |
Erik Carlson | | 11/13/2023 | | | | | | | | — | | 290,324 | | 580,648 | (2) | | | | | | | 1,734,686 |
| | 11/13/2023 | | | | | | | | — | | — | | — | | 287,364 | (4) | | | | | 2,580,529 |
Stephen P. Joyce |
| 3/1/2023 | | — | | — | | — | | — | | — | | — | | — | | 157,003 | (8) | 18.58 | | 937,308 |
| | 9/7/2023 | | — | | — | | — | | — | | — | | — | | 6,789 | (5) | | | | | 100,002 |
| | 10/1/2023 | | — | | — | | — | | — | | — | | — | | 7,728 | (5) | | | | | 100,000 |
| | 11/1/2023 | | — | | — | | — | | — | | — | | — | | 8,819 | (5) | | | | | 100,007 |
Karri R. Callahan |
| — |
| 166,250 | | 332,500 | | 665,000 | | — | | — | | — | | — | | | | | | — |
| | 5/24/2023 | | — | | — | | — | | 15,414 | | 30,828 | | 61,656 | (3) | — | | | | | | 594,056 |
| | 5/24/2023 | | — | | — | | — | | — | | — | | — | | 25,940 | (6) | | | | | 499,864 |
| | 2/22/2023 | | — | | — | | — | | — | | — | | — | | 2,663 | (7) | | | | | 49,798 |
Ward M. Morrison | | — | | 150,627 | | 301,254 | | 602,508 | | — | | — | | — | | — | | | | | | — |
| | 5/24/2023 | | — | | — | | — | | 12,343 | | 24,686 | | 49,372 | (3) | — | | | | | | 475,699 |
| | 5/24/2023 | | — | | — | | — | | — | | — | | — | | 21,356 | (6) | | | | | 411,530 |
| | 2/22/2023 | | — | | — | | — | | — | | — | | — | | 2,421 | (7) | | | | | 45,273 |
Serene M. Smith | | — |
| 136,931 | | 273,861 | | 547,722 | | — | | — | | — | | — | | | | | | — |
| | 5/24/2023 | | — | | — | | — | | 12,696 | | 25,391 | | 50,782 | (3) | — | | | | | | 489,285 |
| | 5/24/2023 | | — | | — | | — | | — | | — | | — | | 21,966 | (6) | | | | | 423,285 |
| | 2/22/2023 | | — | | — | | — | | — | | — | | — | | 2,490 | (7) | | | | | 46,563 |
Nicholas R. Bailey | | — | | 167,626 | | 335,252 | | 670,503 | | — | | — | | — | | — | | | | | | — |
| | 5/24/2023 | | — | | — | | — | | 13,754 | | 27,507 | | 55,014 | (3) | — | | | | | | 530,060 |
| | 5/24/2023 | | — | | — | | — | | — | | — | | — | | 23,796 | (6) | | | | | 458,549 |
| | 2/22/2023 | | — | | — | | — | | — | | — | | — | | 2,698 | (7) | | | | | 50,453 |
| Represents potential payouts under the 2023 bonus plan. Actual amounts paid are reflected above in the Summary Compensation Table. |
(2) | These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Plan (as defined below). The actual number of performance-based restricted stock units that will vest for Mr. Carlson’s performance awards range from 0% to 200% of the target award, dependent on the Company’s volume-weighted average stock price measured over a rolling 60 calendar day period from the grant date through December 31, 2027. |
(3) | Represents performance-based RSUs that are subject to vesting based on Company performance during 2023, 2024, and 2025. |
(4) | These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Plan. Represents (i) time-based RSUs issued to Mr. Carlson that are scheduled to vest on March 1, 2025, 2026, and 2027, and (ii) time-based RSUs issued to Mr. Carlson that are scheduled to vest in full on November 13, 2024. |
(5) | Represents retention time-based RSUs issued to Mr. Joyce, all of which vested on November 13, 2023. |
(6) | Represents (i) time-based RSUs, one-third of which vested on March 1, 2024, and the remainder of which are scheduled to vest on March 1, 2025, and 2026, and (ii) retention time-based RSUs, all of which vested on March 1, 2024. |
(7) | Represents vested shares of RE/MAX Holdings Class A stock |
(5) Reflects the grant date fair value of stock and RSUs granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2022 Annual Report.
(8) | Represents stock options granted to Mr. Joyce that vested in six equal monthly installments beginning on March 31, 2023. |
(9) | Reflects the grant date fair value of stock options and RSUs granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2023 Annual Report. |
Outstanding Equity Awards at Fiscal Year End
The following table provides information regarding outstanding equity awards held by our Named Executive Officers as of the end of fiscal year 2022.
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | Stock Awards | | Option Awards | ||||||||||||
| | | | | | | | | | | | | | Equity Incentive | | | | |
| | | | | | | | | | Equity Incentive | | | | Plan Awards: | | | | |
| | | | | | |
| Equity Incentive | | Plan Awards: | | Number of | | Number of | | | | |
| | | | | | |
| Plan Awards: | | Market or Payout | | Securities | | Securities | | | | |
| | | | Number of | | Market Value |
| Number of | | value of unearned | | Underlying | | Underlying | | | | |
| | | | Shares or | | of Shares or | | unearned shares, | | shares, units, or | | Unexercised | | Unexercised | | | | |
| | | | Units of Stock | | Units of Stock | | units, or other | | other rights | | Options | | Unearned | | Option | | |
| | | | That Have Not | | That Have Not | | rights that have | | that have | | Exercisable | | Options | | Exercise Price | | Option |
Name |
| Grant Date |
| Vested (#) |
| Vested ($) (1) |
| not vested (#) |
| not vested ($) (1) |
| (#) |
| (#) |
| ($) |
| Expiration Date |
Stephen P. Joyce |
| 1/10/2022 | | | | | | | | | | 91,827 | | | | 29.91 | | 1/10/2032 |
| | 9/7/2022 | | | | | | | | | | 27,556 | | 34,444 | | 21.85 | | 9/7/2032 |
Nicholas R. Bailey | | 3/1/2020 | | 3,294 | (2) | 61,400 | | | | | |
| | | | | | |
| | 3/1/2021 | | 4,603 | (3) | 85,800 | | | | | | | | | | | | |
| | 9/27/2021 | | 361 | (3) | 6,729 | | | | | | | | | | | | |
| | 3/1/2022 | | 10,895 | (4) | 203,083 | | | | | | | | | | | | |
| | 3/1/2020 | | | | | | 14,820 | (5) | 276,245 | | | | | | | | |
| | 3/1/2021 | | | | | | 10,354 | (5) | 192,999 | | | | | | | | |
| | 9/27/2021 | | | | | | 810 | (5) | 15,098 | | | | | | | | |
| | 3/1/2022 | | | | | | 16,343 | (5) | 304,634 | | | | | | | | |
Karri R. Callahan | | 3/1/2020 | | 3,294 | (2) | 61,400 | | | | | |
| | | | | | |
| | 3/1/2021 | | 4,922 | (3) | 91,746 | | | | | | | | | | | | |
| | 3/1/2022 | | 10,756 | (4) | 200,492 | | | | | | | | | | | | |
| | 3/1/2020 | | | | | | 14,820 | (5) | 276,245 | | | | | | | | |
| | 3/1/2021 | | | | | | 11,074 | (5) | 206,419 | | | | | | | | |
| | 3/1/2022 | | | | | | 16,133 | (5) | 300,719 | | | | | | | | |
Ward M. Morrison | | 3/1/2020 | | 2,516 | (2) | 46,898 | | | | | | | | | | | | |
| | 3/1/2021 | | 4,475 | (3) | 83,414 | | | | | | | | | | | | |
| | 3/1/2022 | | 9,778 | (4) | 182,262 | | | | | | | | | | | | |
| | 3/1/2020 | | | | | | 11,321 | (5) | 211,023 | | | | | | | | |
| | 3/1/2021 | | | | | | 10,067 | (5) | 187,649 | | | | | | | | |
| | 3/1/2022 | | | | | | 14,666 | (5) | 273,374 | | | | | | | | |
Serene M. Smith | | 3/1/2020 | | 3,111 | (2) | 57,989 | | | | | | | | | | | | |
| | 3/1/2021 | | 4,603 | (3) | 85,800 | | | | | | | | | | | | |
| | 3/1/2022 | | 10,057 | (4) | 187,462 | | | | | | | | | | | | |
| | 3/1/2020 | | | | | | 13,997 | (5) | 260,904 | | | | | | | | |
| | 3/1/2021 | | | | | | 10,354 | (5) | 192,999 | | | | | | | | |
| | 3/1/2022 | | | | | | 15,086 | (5) | 281,203 | | | | | | | | |
(1) Value is calculated by multiplying the number of unvested RSUs by $18.64, which was the closing market price of our Class A common stock on December 31, 2022.
(2) Represents time-based RSUs that vested on March 1, 2023.
(3) Represents time-based RSUs, half of which vested on March 1, 2023, and half of which are scheduled to vest on March 1, 2024.
(4) Represents time-based RSUs, one third of which vested on March 1, 2023, and the remainder of which are scheduled to vest on March 1, 2024 and 2025.
(5) Represents performance-based RSUs which were subject to vesting based on Company performance during the three-year performance period beginning on January 1 of the year in which they were granted. The numbers set forth above represent the target number of RSUs.
| | | | | | | | | | | | | | | | | | |
| | | | | | | ||||||||||||
| | | | Stock Awards | | Option Awards | ||||||||||||
| | | | | | | | | | | | | | Equity Incentive | | | | |
| | | | | | | | Equity Incentive | | Equity Incentive | | | | Plan Awards: | | | | |
| | | | | | |
| Plan Awards: | | Plan Awards: | | Number of | | Number of | | | | |
| | | | | | |
| Number of | | Market or Payout | | Securities | | Securities | | | | |
| | | | Number of | | Market Value |
| unearned | | value of unearned | | Underlying | | Underlying | | | | |
| | | | Shares or | | of Shares or | | shares, | | shares, units, or | | Unexercised | | Unexercised | | Option | | |
| | | | Units of Stock | | Units of Stock | | units, or other | | other rights | | Options | | Unearned | | Exercise | | Option |
| | | | That Have Not | | That Have Not | | rights that have | | that have | | Exercisable | | Options | | Price | | Expiration |
Name |
| Grant Date |
| Vested (#) |
| Vested ($) (1) |
| not vested (#) |
| not vested ($) (1) | | (#) | | (#) | | ($) | | Date |
Erik Carlson | | 11/13/2023 | | 93,815 | (6) | 1,250,554 | | | | | | | | | | | | |
| | 11/13/2023 | | 193,549 | (7) | 2,580,008 | | | | | | | | | | | | |
| | 11/13/2023 | | | | | | 580,648 | (8) | 7,740,038 | | | | | | | | |
Stephen P. Joyce | | 1/10/2022 | | | | | | | | | | 91,827 | | | | 29.91 | | 1/10/2032 |
| | 9/7/2022 | | | | | | | | | | 62,000 | | | | 21.85 | | 9/6/2032 |
| | 3/1/2023 | | | | | | | | | | 157,003 | | | | 18.58 | | 3/1/2033 |
Karri R. Callahan | | 3/1/2021 | | 2,461 | (2) | 32,805 | | | | | |
| | | | | | |
| | 3/1/2022 | | 7,171 | (3) | 95,589 | | | | | | | | | | | | |
| | 5/24/2023 | | 20,552 | (4) | 273,958 | | | | | | | | | | | | |
| | 5/24/2023 | | 5,388 | (2) | 71,822 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | 11,074 | (5) | 147,616 | | | | | | | | |
| | 3/1/2022 | | | | | | 16,133 | (5) | 215,053 | | | | | | | | |
| | 5/24/2023 | | | | | | 30,828 | (5) | 410,937 | | | | | | | | |
Ward M. Morrison | | 3/1/2021 | | 2,238 | (2) | 29,833 | | | | | | | | | | | | |
| | 3/1/2022 | | 6,519 | (3) | 86,898 | | | | | | | | | | | | |
| | 5/24/2023 | | 16,458 | (4) | 219,385 | | | | | | | | | | | | |
| | 5/24/2023 | | 4,898 | (2) | 65,290 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | 10,067 | (5) | 134,193 | | | | | | | | |
| | 3/1/2022 | | | | | | 14,666 | (5) | 195,498 | | | | | | | | |
| | 5/24/2023 | | | | | | 24,686 | (5) | 329,064 | | | | | | | | |
Serene M. Smith | | 3/1/2021 | | 2,302 | (2) | 30,686 | | | | | | | | | | | | |
| | 3/1/2022 | | 6,705 | (3) | 89,378 | | | | | | | | | | | | |
| | 5/24/2023 | | 16,928 | (4) | 225,650 | | | | | | | | | | | | |
| | 5/24/2023 | | 5,038 | (2) | 67,157 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | 10,354 | (5) | 138,019 | | | | | | | | |
| | 3/1/2022 | | | | | | 15,086 | (5) | 201,096 | | | | | | | | |
| | 5/24/2023 | | | | | | 25,391 | (5) | 338,462 | | | | | | | | |
Nicholas R. Bailey | | 3/1/2021 | | 2,302 | (2) | 30,686 | | | | | |
| | | | | | |
| | 9/27/2021 | | 181 | (2) | 2,413 | | | | | | | | | | | | |
| | 3/1/2022 | | 7,263 | (3) | 96,816 | | | | | | | | | | | | |
| | 5/24/2023 | | 18,338 | (4) | 244,446 | | | | | | | | | | | | |
| | 5/24/2023 | | 5,458 | (2) | 72,755 | | | | | | | | | | | | |
| | 3/1/2021 | | | | | | 11,164 | (5) | 148,816 | | | | | | | | |
| | 3/1/2022 | | | | | | 16,343 | (5) | 217,852 | | | | | | | | |
| | 5/24/2023 | | | | | | 27,507 | (5) | 366,668 | | | | | | | | |
(1) | Value is calculated by multiplying the number of unvested RSUs by $13.33, which was the closing market price of our Class A common stock on December 31, 2023. |
(2) | Represents time-based RSUs that vested on March 1, 2024. |
(3) | Represents time-based RSUs, half of which vested on March 1, 2024, and half of which are scheduled to vest on March 1, 2025. |
(4) | Represents time-based RSUs, one third of which vested on March 1, 2024, and the remainder of which are scheduled to vest on March 1, 2025 and 2026. |
(5) | Represents performance-based RSUs which were subject to vesting based on Company performance during the three-year performance period beginning on January 1 of the year in which they were granted. The numbers set forth above represent the target number of RSUs. |
(6) | Represents time-based RSUs scheduled to vest on November 13, 2024. These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Plan. |
(7) | Represents time-based RSUs, one third of which are scheduled to vest on March 1, 2025, and the remainder of which are scheduled to vest on March 1, 2026, and 2027. These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Plan. |
(8) | These equity awards were made pursuant to the inducement award exception under the New York Stock Exchange Rule 303A.08 and were not granted from the 2023 Plan. The actual number of performance-based restricted stock units that will vest for Mr. Carlson’s performance awards range from 0% to 200% of the target award, dependent on the Company’s volume-weighted average stock price measured over a rolling 60 calendar day period from the grant date through December 31, 2027. |
Option Exercises and Stock Vested for Fiscal Year 20222023
The following table shows stock awards that vested during fiscal year 2022.2023.
| | | | |
| | | ||
| | Stock awards | ||
| | Number of shares | | Value realized |
| | acquired on vesting | | on vesting |
Name | | (#)(1) | | ($)(2) |
Stephen P. Joyce | | — | | — |
Nicholas R. Bailey |
| 11,787 |
| 349,367 |
Karri R. Callahan |
| 18,051 |
| 537,594 |
Ward M. Morrison |
| 13,179 |
| 391,846 |
Serene M. Smith | | 16,958 | | 505,051 |
Adam M. Contos | | 81,463 |
| 2,371,424 |
(1) Includes shares from LTI awards that vested in 2022 and the portion of the bonus with respect to 2021 performance which was paid in vested shares of RE/MAX Holdings Class A stock in 2022
(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.
| | | | |
| | | ||
| | Stock awards | ||
| | Number of shares | | Value realized |
| | acquired on vesting | | on vesting |
Name | | (#)(1) | | ($)(2) |
Erik Carlson | | — | | — |
Stephen P. Joyce | | 23,336 | | 209,557 |
Karri R. Callahan |
| 23,118 |
| 428,011 |
Ward M. Morrison |
| 18,923 |
| 350,395 |
Serene M. Smith | | 21,751 | | 402,699 |
Nicholas R. Bailey |
| 23,220 |
| 429,904 |
(1) | Includes shares from LTI awards that vested in 2023, the portion of the bonus with respect to 2022 performance which was paid in vested shares of RE/MAX Holdings Class A stock in 2023, as well as performance-based shares from LTI awards that vested in 2022 but were not outstanding and issued until 2023. |
(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. |
OTHER COMPENSATION INFORMATION
Employment Agreements
We have generally not entered into employment agreements with our Executive Officers other than Chief Executive Officers. We currently have an employment agreement with Mr. Carlson, our Chief Executive Officer. Mr. Joyce, who is servingserved as Chief Executive Officer on an interim basis. Additionally,basis, had an employment agreement during his time in January 2022,that role.
Mr. Carlson’s employment agreement provides that, if the Company terminates Mr. Carlson’s employment without cause or Mr. Carlson resigns for good reason, Mr. Carlson would be entitled to (i) if he is employed by the Company for less than two years, a pro-rated bonus for the year of termination based on actual performance, base salary continuation for 12 months and payment or reimbursement of employer portion of the COBRA premiums for 12 months or (ii) if he is employed for two years or more, a pro-rated bonus for the year of termination based on actual performance, base salary continuation for 18 months and payment or reimbursement of COBRA premiums for 18 months. If Mr. Carlson’s employment is terminated without cause or if Mr. Carlson resigns for good reason within two years following a Change in Control, Mr. Carlson would be entitled to a lump sum payment equal to 2.5 times the sum of his then current base salary and target annual bonus, and payment or reimbursement of COBRA premiums for 30 months.
Mr. Joyce’s employment agreement provided that, if his employment were to be terminated by the Company without cause, he would be entitled to one month of base salary.
Retention Agreements
In November 2023, in connection with Mr. Carlson’s appointment as CEO, we entered into Reward and Retention Agreements with each of Mr. Bailey, Ms. Callahan, Ms. Smith, Mr. Morrison, and Mr. Morrison.Bailey. The agreements providedRetention Agreements provide for certain payments of the applicable retention bonus in the event the Named Executive Officer’s employment is terminated by the Company without cause, by the Named Executive Officer were terminated without Causefor good reason or terminated their employment with Good Reasondue to death or disability (as such terms are defined in the agreements) prior to September 30, 2022. (The RewardFebruary 28, 2025 (or for Ms. Callahan, November 13, 2024). See “Compensation Discussion and Retention Agreements were not renewed or extended after their expiration dates.) Analysis – Short Term Incentive” for further details.
Additionally, our Named Executive Officers may be entitled to certain benefits upon separation from the Company or a change in control, as described below under “Potential Payments on Termination/Change in Control.”below.
Potential Payments on Termination/Change in Control
In 2018, we adoptedWe maintain a Severance Pay Benefitand Retirement 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 employees, including Named Executive Officers, provide for accelerated vesting in the event the 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.benefits and retirement benefits if they meet retirement requirements.
Involuntary TerminationWe also maintain a Change in Control Severance Plan (the “Change in Control Plan”) for Cause or Voluntary Resignation Without Good Reason
None of our Named Executive Officers serving as of December 31, 2022 was entitled to any severance payments or other payments following involuntary termination for cause or voluntary resignation without good reason.
Our former CEO, Adam Contos, reached an understanding with the Board regarding his decision to leave the Company and entered into a separation agreement on January 10, 2022. Mr. Contos’s service as an officer of the Company ceased on March 31, 2022. Pursuant to his separation agreement, and contingent upon Mr. Contos’s compliance with the agreement, Mr. Contos is entitled to 24 months of his annual base salary (for a total of $1,500,000), paid in the form of salary continuation beginning in April 2022, 24 months of continued employee benefits from the Company (with an estimated total value of $25,730), a 2021 performance bonus based on the Company’s achievement of financial metrics and strategic goals in accordance with the Company’s short-term incentive plan for executive officers (which amount is reflected in the Summary Compensation Table as part of his 2021 compensation), and a pro-rated 2022 bonus at the target level ($187,500). In addition, 30,893small group of his unvested performance RSUs vested on March 31, 2022.other employees in critical functions necessary to execute a successful transaction. The value of the RSUs, as of the date of the acceleration of their vesting, is reportedChange in the Stock Awards column of the Summary Compensation Table.
Voluntary Resignation with Good Reason or Involuntary Termination Without Cause
As noted above, Mr. Joyce is our only employee with an employment agreement. The agreementControl Plan provides certainfor payments and benefits to eligible employees in the event hetheir employment is terminated without cause.
Our other employees, including Named Executive Officers, are entitled to certainby the Company, or they terminate their employment for good reason within two years following a Change in Control. Payments and benefits under the Change in Control Plan are in lieu of, and not in addition to, those 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. Plan.
Payment of benefits under the Severance Plan isand the Change in Control Plan are 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 showsPayments and benefits to Mr. Carlson in the amount Mr. Joyce would have received underevent his employment is terminated without cause or he resigns for good reason are covered by his employment agreement basedand therefore he is not eligible for payments or benefits under the Severance Plan or the Change in Control Plan.
Mr. Joyce service as CEO ended on hypothetical involuntary termination without cause on December 31, 2022 for reason other thanNovember 13, 2023, in connection with Mr. Carlson’s appointment as CEO. Pursuant to the amended and restated interim executive agreement between the Company hiring a replacement Chief Executive Officer. The table below also sets forthand Mr. Joyce, Mr. Joyce continued to be employed as an advisor for 30 days following Mr. Carlson’s appointment, during which time he received the estimated amount each othersame compensation and benefits that he received as CEO.
Involuntary Termination for Cause or Voluntary Resignation Without Good Reason
None of our Named Executive OfficerOfficers serving as of December 31, 2022,2023 was entitled to any severance payments or other payments following involuntary termination for cause or voluntary resignation without good reason as of such date (other than for retirement, as discussed below).
Retirement
Under the Severance Plan, employees who meet the conditions for retirement are entitled to (i) if the retirement occurs after June 30, a prorated bonus based on actual performance for the year of termination, (ii) full vesting of time-based RSUs and (iii) continued vesting of performance-based RSUs, based on actual performance during the performance periods. Employees who are at least age 50 and have provided at least of 10 years of service, and the sum of whose age and years of service equals or exceeds 70 are eligible for such retirement benefits if they provide the Company at least six months’ notice.
As of December 31, 2023, Ward Morrison was the only Named Executive Officer who was retirement eligible under the Severance Plan had he given the Company at least six months’ notice.
Death or Disability
Under the Retention Agreements, had the employment of Ms. Callahan, Ms. Smith, Mr. Morrison or Mr. Bailey terminated due to death or disability on December 31, 2023, they would be entitled to payment of their retention bonuses. See “Compensation Discussion and Analysis – Short Term Incentive” for further details.
Further, our time-based RSU agreements provide that time-based RSUs vest upon termination due to death or disability. For performance-based RSUs, RSUs relating to any completed performance periods and the then-current performance period would vest based on actual performance and RSUs related to performance periods that have received based upon a hypothetical voluntary resignationnot yet commenced would be forfeited.
Voluntary Resignation with Good Reason or Involuntary Termination Without Cause (Outside of Change in Control Protection Period)
As noted above, Mr. Carlson is our only employee with an employment agreement. The agreement provides certain benefits in the event he is terminated without cause or he terminates his employment with good reason, or involuntary terminationas such terms are defined in the agreement.
Our other employees, including Named Executive Officers, are entitled to certain benefits under the Severance Plan if they are terminated involuntarily without cause. Further, certain Named Executive Officers entered into retention agreements in late 2023 (in connection with Mr. Carlson’s appointment as CEO) that provide payment if the Named Executive Officer is involuntarily terminated without cause on such date. or resigns with good reason.
The benefits under the Severance Plan for our Named Executive Officers (other than Mr. Carlson) comprise one year’s salary, outplacement assistance, continuation of health benefits, and a pro-rated bonus. Certain amounts in the tables below, including the amounts for outplacement assistance and continuation of health benefits shown in the “Other Benefits” columns, are estimates.
Change in Control
Named Executive Officers are entitled to accelerated vesting of RSUs in the event of a change in control only if the RSUs are not converted into an equivalent award by the acquiring or successor entity.
2024 | RE/MAX Holdings, Inc. |
|
Executive Officers comprise one year’s salary, outplacement assistance, continuation of health benefits, andVoluntary Resignation with Good Reason or Involuntary Termination Without Cause Following a pro-rated bonus.
| | | | | | | | |
| | | | | | | | |
| | Cash | | Cash | | Other | | |
| | Severance | | Bonus | | Benefits | | Total |
Name |
| ($) |
| ($) |
| ($) |
| ($) |
Stephen P. Joyce | | 800,000 | | — | | — | | 800,000 |
Nicholas R. Bailey | | 403,650 | | 100,913 | | 14,700 | | 519,263 |
Karri R. Callahan | | 398,475 | | 99,619 | | 14,700 | | 512,794 |
Ward M. Morrison | | 362,250 | | 90,563 | | 14,700 | | 467,513 |
Serene M. Smith | | 372,600 | | 93,150 | | 14,700 | | 480,450 |
Change in Control
Named Executive Officers are entitled to certain payments and benefits in the event that, following a change in control, their employment is involuntarily terminated without cause or they voluntarily resign with good reason. For Mr. Carlson, these payments and benefits are pursuant to his employment agreement and equity award agreements. For other Named Executive Officers, these payments and benefits are pursuant to the Change in Control Plan, equity award agreements, and 2023 retention agreements. Mr. Carlson would be entitled to a lump sum payment equal to 2.5 times the sum of his base salary and target annual bonus, and costs of the employer portion of the COBRA premiums for 30 months under his employment agreement. Other Named Executive Officers would be entitled to a lump sum cash payment equal to 2.0x of the Named Executive Officer’s base salary and target annual incentive award under the Change in Control Plan, 24 months of continued benefits, and outplacement assistance. (The same payments and benefits are available to Named Executive Officers if they voluntarily resign with good reason following a change in control. However, in a hypothetical change in control on December 31, 2023, such resignation could not have occurred on the same day due to the notice requirements and cure periods set forth in the applicable agreements and policies.)
The table below sets forth the estimated value of accelerated vesting of options for Mr. Joyce and RSUs foramounts that each other Named Executive Officer serving aswould receive in each of December 31, 2022,the termination scenarios, based on a hypothetical change in controltermination on such date, in connection with which the restricted stock units were not converted into an equivalent award by the acquiring or successor entity. (Vesting would not be accelerated if the awards were converted.) See “Voluntary Resignation with Good Reason” above for additional benefits that may be available in the event of a change in control where the Named Executive Officer is not offered a comparable position with the acquiring or successor entity.December 31, 2023.
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | Termination | | | | |
| | | | | | | | | Without Cause or | | | | |
| | | | | | | | | With Good | | | | |
| | | | | | | | | Reason | | Termination | | |
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| | | Termination | | With Good | | Change in | | Change in | | Death or | | |
| | | Without Cause | | Reason | | Control | | Control | | Disability | | Retirement |
Name | Element | | ($) | | ($) | | ($)(1) | | ($) | | ($) | | ($)(2) |
Erik Carlson | Salary | | 825,000 | | 825,000 | | — | | 4,640,625 | | — | | — |
| Bonus | | 108,493 | | 108,493 | | — | | 108,493 | | — | | — |
| Retention Bonus | | — | | — | | — | | — | | — | | — |
| Equity | | — | | — | | 3,830,562 | | 3,830,562 | | 3,830,562 | | — |
| Other Benefits | | 7,200 | | 7,200 | | — | | 18,000 | | — | | — |
| Total | | 940,693 | | 940,693 | | 940,693 | | 8,597,680 | | 3,830,562 | | — |
Karri R. Callahan | Salary | | 475,000 | | — | | — | | 1,615,000 | | — | | — |
| Bonus | | 255,070 | | — | | — | | 332,500 | | — | | — |
| Retention Bonus | | 712,500 | | 712,500 | | — | | 712,500 | | 712,500 | | — |
| Equity | | — | | — | | 1,236,799 | | 1,236,799 | | 891,165 | | — |
| Other Benefits | | 14,700 | | — | | — | | 21,900 | | — | | — |
| Total | | 1,457,270 | | 712,500 | | 1,236,799 | | 3,918,699 | | 1,603,665 | | — |
Ward M. Morrison | Salary | | 430,363 | | — | | — | | 1,463,234 | | — | | — |
| Bonus | | 156,336 | | — | | — | | 301,254 | | — | | 156,336 |
| Retention Bonus | | 430,363 | | 430,363 | | — | | 430,363 | | 430,363 | | — |
| Equity | | — | | — | | 1,052,262 | | 1,052,262 | | 767,733 | | 1,052,262 |
| Other Benefits | | 14,700 | | — | | — | | 21,900 | | — | | — |
| Total | | 1,031,762 | | 430,363 | | 1,052,262 | | 3,269,014 | | 1,198,096 | | 1,208,598 |
Serene M. Smith | Salary | | 391,230 | | — | | — | | 1,330,182 | | — | | — |
| Bonus | | 173,115 | | — | | — | | 273,861 | | — | | — |
| Retention Bonus | | 391,230 | | 391,230 | | — | | 391,230 | | 391,230 | | — |
| Equity | | — | | — | | 1,082,311 | | 1,082,311 | | 789,651 | | — |
| Other Benefits | | 14,700 | | — | | — | | 21,900 | | — | | — |
| Total | | 970,275 | | 391,230 | | 1,082,311 | | 3,099,484 | | 1,180,881 | | — |
Nicholas R. Bailey | Salary | | 478,931 | | — | | — | | 1,628,365 | | — | | — |
| Bonus | | 266,685 | | — | | — | | 335,252 | | — | | — |
| Retention Bonus | | 478,931 | | 478,931 | | — | | 478,931 | | 478,931 | | — |
| Equity | | — | | — | | 1,171,507 | | 1,171,507 | | 854,453 | | — |
| Other Benefits | | 14,700 | | — | | — | | 21,900 | | — | | — |
| Total | | 1,239,247 | | 478,931 | | 1,171,507 | | 3,635,955 | | 1,333,384 | | — |
(1) | Represents estimated value of accelerated vesting of RSUs for each Named Executive Officer serving as of December 31, 2023, based on a hypothetical change in control on such date. (Vesting would not be accelerated if the awards were converted, unless the Named Executive Officer resigns with good reason or is terminated without cause.) |
(2) | Represents estimated value of payments and benefits under our Severance Plan based on a hypothetical retirement on December 31, 2023. Mr. Morrison is the only Named Executive Officer who met the eligibility requirements under the plan on such date. |
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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 Stephen Joyce,Erik Carlson, who served aswas our Principal Executive Officer beginning in March 2022.as of November 15, 2023, the date we used for selecting our median employee.
We are using the same median employee that we used with respect to 2022 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. Joyce (our CEO at the time), as of November 15, 2022. The employee we identified as the median employee for 2021 is in a substantially similar role and that person’s compensation has not changed materially since being identified as the median employee.
The total compensation for 20222023 of the employee identified as the median employee was $101,792.$99,986. This includes a base salary of $85,284,$89,548, a bonus of $6,396$6,989 (which was paid approximately half in cash and half in stock), and a 401(k) match of $6,396.$3,449.
The total 20222023 compensation for Mr. Joyce,Carlson, our CEO since March 1, 2022,November 13, 2023, as reported in the Summary Compensation Table above was $2,637,536.$4,536,352. (The majority of Mr. Carlson’s compensation was an inducement award of restricted stock units. For the performance-based portion of the award, the value of the award is calculated based on achievement of the maximum performance level (200% of target). The actual number of restricted stock units that vest will range from 0% to 200% of the target award, depending on the Company’s stock price over the performance period.) The ratio of our CEO’s compensation to that of the median employee for 20222023 was approximately 2745 to 1. Excluding Mr. Carlson’s inducement award of $1,000,000 of time-based RSUs that vest after one year, which we do not expect to be recurring, the ratio would be 36 to 1.
Pay Versus Performance
As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s pay-for-performance philosophy and how the Company’s executive compensation aligns with the Company’s performance, refer to “Compensation Discussion and Analysis.” The Compensation Committee did not
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consider the Compensation Actually Paid measure below in making its compensation decisions for any of the years shown below given the timing of the new required disclosure.
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| | | | | | | | Average | | | | | | | | | | | |
| | | | | | Average | | Compensation | | | | | | | | | | | |
| | Summary | | Compensation | | SCT | | Actually | | Value of Initial Fixed $100 | | | | | | | |||
| | Compensation | | Actually | | Total for | | Paid to | | Investment Based On: | | Net | | | | Adjusted | |||
| | Table (SCT) | | Paid to | | Non-PEO | | to Non-PEO | | | | Peer Group | Peer Group | | Income (loss) | | Revenue | | EBITDA |
Fiscal Year |
| Total for PEO1 | | PEO 2 | | NEOs | | NEOs 3 | | TSR | | TSR (Russell)4 | TSR (S&P)4 | | ($ thousands) | | ($ thousands) | | ($ thousands) |
2023 (Carlson) | | $4,536,352 | | $ 11,737,489 | | $ 1,659,124 | | $ 1,009,774 | | $ 39.49 | | $ 128.14 | $ 137.42 | | ($ 98,486) | | $ 325,671 | | $ 96,288 |
2023 (Joyce) | | $ 2,374,240 | | $ 2,257,548 | | | | | | | | | | | | | | | |
2022 (Joyce) | | $ 2,637,536 | | $ 2,220,880 | | $ 1,578,851 | | $ 801,784 | | $ 53.19 | | $ 109.59 | $ 118.41 | | $ 10,757 | | $ 353,386 | | $ 121,632 |
2022 (Contos) | | $ 1,943,210 | | $ 80,775 | | | | | | | | | | | | | | | |
2021 | | $ 4,439,971 | | $ 3,179,434 | | $ 1,452,315 | | $ 1,096,371 | | $ 83.76 | | $ 137.74 | $ 141.13 | | ($ 24,620) | | $ 329,701 | | $ 119,583 |
2020 | | $ 2,394,169 | | $ 2,359,574 | | $ 1,127,829 | | $ 1,235,646 | | $ 97.26 | | $ 119.96 | $ 111.29 | | $ 20,546 | | $ 266,001 | | $ 92,558 |
(1) | During the year 2023, Erik Carlson became Chief Executive Officer, replacing Steve Joyce, effective November 13, 2023. During the year 2022, Adam Contos stepped down as Chief Executive Officer, effective March 31, 2022.During March 2022, Mr. Contos and Mr. Joyce served as Co-CEOs and Mr. Joyce became CEO, on an interim basis, upon Mr. Contos’s departure. For the years 2021 and 2020, Mr. Contos served as CEO for the full year. |
2024 Proxy Statement | RE/MAX Holdings, Inc. | 45 |
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| | | | | | Average | | Average | | | | | | | | | | |
| | Summary | | | | SCT | | Compensation | | Value of Initial Fixed $100 | | | | | | | ||
| | Compensation | | Compensation | | Total for | | Actually Paid to | | Investment Based On: | | | | | | Adjusted | ||
| | Table (SCT) | | Actually Paid to | | Non-PEO | | to Non-PEO | | | | Peer Group | | Net Income | | Revenue | | EBITDA |
Fiscal Year |
| Total for PEO1 |
| PEO 2 |
| NEOs |
| NEOs 3 |
| TSR |
| TSR |
| ($ thousands) |
| ($ thousands) |
| ($ thousands) |
2022 (Joyce) | | $ 2,637,536 | | $ 2,220,880 | | $ 1,578,851 | | $ 801,784 | | $ 53.19 | | $ 118.41 | | $ 10,757 | | $ 353,386 | | $ 121,632 |
2022 (Contos) | | $ 1,943,210 | | $ 80,775 | | | | | | | | | | | | | | |
2021 | | $ 4,439,971 | | $ 3,179,434 | | $ 1,452,315 | | $ 1,096,371 | | $ 83.76 | | $ 141.13 | | ($ 24,620) | | $ 329,701 | | $ 119,583 |
2020 | | $ 2,394,169 | | $ 2,359,574 | | $ 1,127,829 | | $ 1,235,646 | | $ 97.26 | | $ 111.29 | | $ 20,546 | | $ 266,001 | | $ 92,558 |
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(2) | The following table sets forth the adjustments made to the Summary Compensation Table (“SCT”) Total for Principal Executive Officer during each year presented to determine compensation actually paid (“CAP”) to PEO, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period: |
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| | 2023 | | | 2023 |
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| | Former CEO (Joyce) | | | Former CEO (Contos) | ||||||||||||||
SCT Total for PEO | | $ | 4,536,352 | | | $ | 2,374,240 | | | $ | 2,637,536 | | | $ | 1,943,210 | | | $ | 4,439,971 | | | $ | 2,394,169 |
Deduct amounts reported under “Stock Awards” Column of the SCT | | | (4,369,463) | | | | (300,010) | | | | - | | | | (966,175) | | | | (2,960,458) | | | | (1,420,087) |
Deduct amounts reported under “Option Awards” Column of the SCT | | | - | | | | (937,308) | | | | (1,537,536) | | | | - | | | | - | | | | - |
Add the fair value of awards granted and vested during the fiscal year | | | - | | | | 1,137,069 | | | | 884,929 | | | | 779,182 | | | | 175,016 | | | | 189,009 |
Add the fair value of awards granted in the fiscal year that remain outstanding and unvested as of fiscal year-end | | | 11,570,600 | | | | - | | | | 235,951 | | | | - | | | | 1,789,507 | | | | 1,600,050 |
Add (Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the fiscal year-end a | | | - | | | | - | | | | - | | | | - | | | | (113,141) | | | | (60,409) |
Add (Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the fiscal year b | | | - | | | | (16,443) | | | | - | | | | (96,975) | | | | 78,848 | | | | (55,022) |
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the fiscal year c | | | - | | | | - | | | | - | | | | (1,578,467) | | | | (230,309) | | | | (288,136) |
Add dividends on unvested awards paid during the fiscal year | | | - | | | | - | | | | - | | | | - | | | | - | | | | - |
Add incremental fair value of awards modified during the fiscal year | | | - | | | | - | | | | - | | | | - | | | | - | | | | - |
Compensation Actually Paid | | $ | 11,737,489 | | | $ | 2,257,548 | | | $ | 2,220,880 | | | $ | 80,775 | | | $ | 3,179,434 | | | $ | 2,359,574 |
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| | 2022 | | | 2022 | | | 2021 | | | 2020 | ||||
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| Current CEO |
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| Former CEO | ||||||||||
SCT Total for PEO | | $ | 2,637,536 |
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| $ | 4,439,971 |
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| $ | 2,394,169 |
Deduct amounts reported under “Stock Awards” Column of the SCT | | | - | | | | (966,175) | | | | (2,960,458) | | | | (1,420,087) |
Deduct amounts reported under “Option Awards” Column of the SCT | | | (1,537,536) | | | | - | | | | - | | | | - |
Add the fair value of awards granted and vested during the fiscal year | | | 884,929 | | | | 779,182 | | | | 175,015 | | | | 189,009 |
Add the fair value of awards granted in the fiscal year that remain outstanding and unvested as of fiscal year-end | | | 235,951 | | | | - | | | | 1,789,507 | | | | 1,600,050 |
Add (Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the fiscal year-end a | | | - | | | | - | | | | (113,141) | | | | (60,409) |
Add (Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the fiscal year b | | | - | | | | (96,975) | | | | 78,848 | | | | (55,022) |
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the fiscal year c | | | - | | | | (1,578,467) | | | | (230,309) | | | | (288,136) |
Add dividends on unvested awards paid during the fiscal year | | | - | | | | - | | | | - | | | | - |
Add incremental fair value of awards modified during the fiscal year | | | - | | | | - | | | | - | | | | - |
Compensation Actually Paid | | $ | 2,220,880 | | | $ | 80,775 | | | $ | 3,179,434 | | | $ | 2,359,574 |
(a) | Includes the fair value of the current year RSU awards and all tranches of PSU awards, without respect to the award performance period. Per U.S. GAAP, if a PSU award does not have an established metric, there is no grant date and therefore would not be included for financial reporting purposes until the performance metrics are established. The values do not necessarily correspond to the actual value that will be received by the Executive Officers upon vesting. |
(b) | Includes the change in fair value of RSU awards that were issued in a prior year, relative to the respective fiscal year. In addition, as discussed above, all tranches of PSU awards issued in a prior year, relative to the respective fiscal year, are included without respect to the award performance period. Per U.S. GAAP, if a PSU award does not have an established metric, there is no grant date and therefore would not be included for financial reporting purposes until the performance metrics are established. The values do not necessarily correspond to the actual value that will be received by the Executive Officers upon vesting. |
(c) | The value in this row includes the aggregate fair value of awards forfeited by Mr. Contos when he left the Company on March 31, 2022. |
46 | RE/MAX Holdings, Inc. | 2024 Proxy Statement |
(3) The following table sets forth the adjustments made to the SCT during each year presented to determine the average CAP to the Non-PEO NEOs, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period:
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| | Fiscal Year | |||||||||||||
| | 2023 | | | 2022 | | | 2021 | | | 2020 | ||||
Average SCT Total for non-PEO NEOs | | $ | 1,659,124 | | | $ | 1,578,851 | | | $ | 1,452,315 | | | $ | 1,127,829 |
Deduct amounts reported under “Stock Awards” Column of the SCT | | | (1,076,988) | | | | (816,509) | | | | (907,803) | | | | (720,172) |
Deduct amounts reported under “Option Awards” Column of the SCT | | | - | | | | - | | | | - | | | | - |
Add the fair value of awards granted and vested during the fiscal year | | | 48,022 | | | | 169,667 | | | | 41,730 | | | | 77,634 |
Add the fair value of awards granted in the fiscal year that remain outstanding and unvested as of fiscal year-end | | | 671,398 | | | | 483,308 | | | | 631,943 | | | | 871,869 |
Add (Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the fiscal year-end a | | | (126,322) | | | | (253,708) | | | | (57,410) | | | | (10,973) |
Add (Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the fiscal year b | | | (127,632) | | | | (129,178) | | | | 10,591 | | | | (22,986) |
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the fiscal year | | | (37,828) | | | | (230,647) | | | | (74,995) | | | | (87,555) |
Add dividends on unvested awards paid during the fiscal year | | | - | | | | - | | | | - | | | | - |
Add incremental fair value of awards modified during the fiscal year | | | - | | | | - | | | | - | | | | - |
Compensation Actually Paid | | $ | 1,009,774 | | | $ | 801,784 | | | $ | 1,096,371 | | | $ | 1,235,646 |
(a) Includes the fair value of the current year RSU awards and all tranches of PSU awards, without respect to the award performance period. Per U.S. GAAP, if a PSU award does not have an established metric, there is no grant date and therefore would not be included for financial reporting purposes until the performance metrics are established. The values do not necessarily correspond to the actual value that will be received by the executive officersExecutive Officers upon vesting.
(b) Includes the change in fair value of RSU awards that were issued in a prior year, relative to the respective fiscal year. In addition, as discussed above, all tranches of PSU awards issued in a prior year, relative to the respective fiscal year, are included without respect to the award performance period. Per U.S. GAAP, if a PSU award does not have an established metric, there is no grant date and therefore would not be included for financial reporting purposes until the performance metrics are established. The values do not necessarily correspond to the actual value that will be received by the executive officersExecutive Officers upon vesting.
(c) The value in this row includes the aggregate fair value of awards forfeited by Mr. Contos when he left the Company on March 31, 2022.
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(3) The following table sets forth the adjustments made to the SCT during each year presented to determine the average CAP to the Non-PEO NEOs, with “fair value” calculated in accordance with ASC Topic 718 as of the end of the specified period:
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| 2022 |
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| 2021 |
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| 2020 | |||
Average SCT Total for non-PEO NEOs | | $ | 1,578,851 | | | $ | 1,452,315 | | | $ | 1,127,829 |
Deduct amounts reported under “Stock Awards” Column of the SCT | | | (816,509) | | | | (907,803) | | | | (720,172) |
Deduct amounts reported under “Option Awards” Column of the SCT | | | - | | | | - | | | | - |
Add the fair value of awards granted and vested during the fiscal year | | | 169,667 | | | | 41,730 | | | | 77,634 |
Add the fair value of awards granted in the fiscal year that remain outstanding and unvested as of fiscal year-end | | | 483,307 | | | | 631,942 | | | | 871,870 |
Add (Subtract) change in fair value of awards granted in any prior year that remain outstanding and unvested as of the fiscal year-end a | | | (253,708) | | | | (57,410) | | | | (10,973) |
Add (Subtract) change in fair value from prior year-end to vesting date of awards granted in any prior year that vested during the fiscal year b | | | (129,178) | | | | 10,591 | | | | (22,986) |
Subtract fair value of awards granted in any prior year that were forfeited or failed to vest during the fiscal year | | | (230,647) | | | | (74,995) | | | | (87,555) |
Add dividends on unvested awards paid during the fiscal year | | | - | | | | - | | | | - |
Add incremental fair value of awards modified during the fiscal year | | | - | | | | - | | | | - |
Compensation Actually Paid | | $ | 801,784 | | | $ | 1,096,371 | | | $ | 1,235,646 |
(a) Includes(4) Peer group TSR includes the fair value ofRussell 2000 Index (Russell) and the current year RSU awards and all tranches of PSU awards, without respect to the award performance period. Per U.S. GAAP, if a PSU award does not have an established metric, there is no grant date and therefore would not be included for financial reporting purposes until the performance metrics are established. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting.S&P SmallCap 600 Index (S&P).
(b) Includes the change in fair value of RSU awards that were issued in a prior year, relative to the respective fiscal year. In addition, as discussed above, all tranches of PSU awards issued in a prior year, relative to the respective fiscal year, are included without respect to the award performance period. Per U.S. GAAP, if a PSU award does not have an established metric, there is no grant date and therefore would not be included for financial reporting purposes until the performance metrics are established. The values do not necessarily correspond to the actual value that will be received by the executive officers upon vesting.
Tabular List of Financial Performance Measures
As described in greater detail in “Executive Compensation – Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The performance measures that the Company uses for both our long-term and short-term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our stockholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
● | Adjusted EBITDA |
● | Revenue |
● | RMAX rTSR Percentile |
Analysis of the Information Presented in the Pay versus Performance Table
As described in more detail in the section “Executive Compensation – Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable “pay-for-performance” philosophy. The Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance Table.
| RE/MAX Holdings, Inc. | 47 |
Compensation Actually Paid and Company TSR
Peer Group is Russell 2000 Index; previous peer group is S&P SmallCap 600 Index; Value of Initial Fixed Investment assumes that the value of the investment in our common stock and in the peer group (including reinvestment of dividends) was $100 at market close on December 31, 2019 (the last trading day of 2019), and tracks such investment through market close on the last trading day of each applicable yearyear.
Compensation Actually Paid and Net Income*
* Net income in 2021 was adversely impacted by a $40.9 million loss recorded on our contractual relationship with INTEGRA which was settled with the acquisition of INTEGRA. The loss represents the fair value of the difference between the historical contractual rates paid by INTEGRA and the current market rate. The loss is recorded in “Settlement and impairment charges” in the accompanying Consolidated Statements of Income (Loss). See Note 6, Acquisitions in the Annual Report on Form 10-K for the year ended December 31, 2021, for additional information about this acquisition.
48 | RE/MAX Holdings, Inc. |
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Compensation Actually Paid and Adjusted EBITDA1
1Adjusted EBITDA is a non-GAAP measure. Please see Appendix 1 on page 7866 of this Proxy Statement for a definition of this term and reconciliation with the most directly comparable GAAP measure.
Compensation Actually Paid and Revenue
| RE/MAX Holdings, Inc. | 49 |
Peer Group TSR and Company TSR
Equity Compensation Plan Information
The following table provides information as of December 31, 2022 with respect to shares of our Class A common stock issuable under our equity compensation plan:
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| | | | Weighted- | | remaining available |
| | Number of shares | | average | | for future issuance |
| | to be issued upon | | exercise | | under equity |
| | vesting of | | price of | | compensation |
| | outstanding | | outstanding | | plans (excluding |
| | options, warrants, | | options, warrants | | securities reflected |
Plan Category | | and rights (1) | | and rights | | in column (a)) (2) |
Equity compensation plans approved by stockholders |
| 729,383 | | |
| 1,067,053 |
Equity compensation plans not approved by stockholders |
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| — |
| — |
Total |
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Employee Benefit and Stock Plans
Omnibus Incentive Plans
The RE/MAX Holdings, Inc. 2023 Omnibus Incentive Plan
In 2023, our Board of Directors adopted, and our stockholders approved, the RE/MAX Holdings Inc. 2013 Omnibus Incentive Plan are described under Proposal 4 below.
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 Code. The Company generally makes discretionary matching contributions. of 50% of contributions by plan participants. Plan participants may elect to invest their contributions in various established funds. Company contributions vest 33% each year for the first three years of an employee’s service, then vest 100% thereafter.
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PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION
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Recommendation of the Board: The Board recommends you vote to hold an advisory vote on executive compensation EVERY YEAR.
PROPOSAL 4: RE/MAX HOLDINGS, INC. 2023 OMNIBUS INCENTIVE PLAN
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Recommendation of the Board: The Board recommends you vote FOR the approval of the 2023 Omnibus Incentive Plan.
Overview
We are asking stockholders to approve the RE/MAX Holdings, Inc. 2023 Omnibus Incentive Plan (the “2023 Plan”).
We have previously awarded equity compensation under the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “2013 Plan”), which will expire on September 30, 2023. The last day on which grants could be made under the 2013 Plan is September 30, 2023. On April 7, 2023, our Board of Directors, at the recommendation of the Compensation Committee, approved the 2023 Plan, subject to approval by our stockholders at the Annual Meeting. If stockholders approve the 2023 Plan, it will become effective on the date of the Annual Meeting (the “Effective Date”). Outstanding awards under the 2013 Plan will remain outstanding and subject to the terms of the 2013 Plan and the respective award agreements, until the vesting, expiration or lapse of such awards in accordance with their terms. No further awards will be made under the 2013 Plan as of the Effective Date, and the grant of any subsequent awards will be subject to the terms of the 2023 Plan.
Approval of the 2023 Plan is intended to enable us to continue granting stock-based incentive awards, which our Board of Directors believes is a critical element of our compensation program and vital to our continued ability to attract and retain skilled people in our competitive industry. We use stock-based awards to align the financial interests of award recipients with those of the Company’s stockholders. We believe that providing an equity stake in the future success of our business encourages and motivates award recipients to strive to achieve our business goals and to increase stockholder value.
Given that the 2013 Plan will expire on September 30, 2023, if the Proposal is not approved by our stockholders, we generally will not be able to continue to issue stock-based incentive compensation to our Directors or employees, subject to certain exceptional circumstances such as inducement awards for new hires. As a result, we would lose an important compensation tool that enables us to compete for, incentivize and retain employees, Directors, consultants, and other service providers. If the Proposal is not approved by our stockholders, we believe our ability to attract and retain key talent in the competitive market for human capital would be significantly and negatively impacted, and this could affect our long-term success. In assessing the Proposal, we encourage you to consider these factors and the potential negative impact on the Company if the 2023 Plan is not approved.
Accordingly, we believe approving the 2023 Plan is in the best interest of our stockholders and the Board unanimously recommends approval of the 2023 Plan.
Background
Equity is an important element of compensation. We operate in a highly competitive market for talent. Our corporate
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headquarters is located in Denver, Colorado, and we compete for executive talent with many other companies that offer equity incentives as a key element of their compensation programs. Because the 2013 Plan will expire on September 30, 2023, absent approval of the 2023 Plan, we will be extremely limited in our ability to utilize equity awards as part of our compensation and business strategies and may need to utilize cash awards or other forms of incentive compensation that are relatively unfriendly to our stockholders in order to attract and retain employees. Such alternatives can cause volatility in quarterly results, reduce alignment of interests between employees and stockholders, and reduce cash available for growth opportunities and potential future stock repurchases.
As a result, we believe that having a sufficient number of shares available for grant to our employees as part of our equity compensation is a critical element of our overall compensation approach.
We have determined the size of the 2023 Plan taking into account a range of factors including our historical equity grant practices as well as anticipated future needs of our business. We have sized the 2023 Plan in terms of share availability with the objective that it be sufficient for our needs for the next three years of equity awards. The exact rate at which we use shares under the 2023 Plan may be more or less than our anticipated future usage and will depend upon various unknown factors, such as our future stock price, participation levels, long-term incentive award mix and vehicles, and forfeiture rates.
Information Regarding the 2023 Plan Share Reserve and Outstanding Awards under the 2013 Plan
The 2,811,051 shares authorized under the 2023 Plan take into account that upon expiration of the 2013 Plan there were approximately 311,051 shares that will lapse under the 2013 Plan. Accordingly, we carried over such unused share balance into the 2023 Plan together with approximately 2,500,000 incremental shares resulting in a 2023 Plan size of 2,811,051 authorized shares.
The 2023 Plan provides for the issuancegrant of upincentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to 2,811,051our employees and any parent and subsidiary employees, and for the grant shares of our Class A common stock, pursuant to awards granted under the 2023 Plan, plus shares covered by awards granted under the 2013 Plan if the award (or a portion of such award) is forfeited, is canceled, or expires without the issuance of shares or, except with respect tonon-qualified stock options, and stock appreciation rights, (“SARs”), if the shares underlying such award are surrendered or withheld in satisfaction of tax withholding obligations after the Effective Date of the 2023 Plan. The maximum theoretical number of shares that could be issued under the 2023 Plan if all shares covered by outstanding awards granted under the 2013 plan were forfeited, canceled, surrendered, withheld, or canceled, is 4,693,816 shares.
The information included in this Proxy Statement and our 2022 Annual Report is updated by the following information regarding all existing equity compensation plans as of March 31, 2023 (unless otherwise noted):
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As of March 31, 2023, the closing price of RE/MAX shares as reported on NYSE was $18.76 per share.
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Dilution, Burn Rate, and Equity Overhang
The Compensation Committee reviews our burn rate and equity overhang activity to thoughtfully manage our long-term stockholder dilution. The following table provides detailed information regarding our burn rate and equity overhang activity for the last three fiscal years.
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| 2020 |
Gross Burn Rate (1) | | 4.3% | | 1.7% | | 5.3% |
Net Burn Rate (2) | | 2.2% | | 1.3% | | 4.9% |
Equity Overhang (3) | | 9.1% | | 10.4% | | 12.8% |
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Best Practices
We recognize the dilutive impact of stock-based incentive awards on our stockholders. We strive to balance the impact of dilution with our need to attract and retain talent. As such, we have incorporated a number of investor friendly practices into the 2023 Plan, including the following:
No Evergreen Provision; Stockholder Approval Required for Additional Shares. Unlike the 2013 Plan, the 2023 Plan does not contain an annual “evergreen” provision that provides for automatic increases of shares of our Class A commonrestricted stock, authorized for issuance under the plan. The 2023 Plan authorizes a fixed share reserve. Therefore, we would have to obtain stockholder approval to increase the 2023 Plan’s share reserve.
No Repricing of Stock Options or Stock Appreciation Rights Without Stockholder Approval. Unlike the 2013 Plan, the 2023 Plan prohibits, without stockholder approval, actions to reprice, replace, or repurchase options or SARs when the exercise price per share of an option or SAR exceeds the fair market value of the underlying shares.
Limits on Non-Employee Director Compensation. The 2023 Plan includes a limit of $750,000 on the combined value of equity awards and cash compensation provided to any non-employee Director in any fiscal year.
No Discount Stock Options or Stock Appreciation Rights. Allrestricted stock options and SARs will be granted with an exercise price equal to or greater than the fair market value of our Class A common stock on the date the stock option or SAR is granted.
No Liberal Share Recycling for Options or SARs. Shares retained by or delivered to the Company to pay the exercise price of a stock option, shares delivered to or withheld by the Company to pay withholding taxes related to a stock option or SAR, and unissued shares resulting from the settlement of SARs in stock will all count against the 2023 Plan’s share reserve. Additionally, shares purchased by the Company in the open market using the proceeds of option exercises do not become available for issuance as future stock options or SARs under the 2023 Plan.
No Dividends on Unearned Awards. The 2023 Plan prohibits the payment of dividends orunits, dividend equivalent rights, on unearned full valuecash-based awards (whether performance or time-based)(including annual cash incentives and long-term cash incentives), and it does not permit dividend equivalents with respectany combination thereof to stock optionsour employees, Directors, and SARs, whether vested or unvested.
Disclosure of Change of Control Vesting Treatment. The 2023 Plan discloses the specific vesting treatment for both performanceconsultants and time-based stock awards in connection with a change of control.
No Transferability. Awards generally may not be transferred, except by will or the laws of descent and distribution, unless approved by the Compensation Committee.
No Automatic Grants. The 2023 Plan does not provide for “reload” or other automatic grants to participants.
No Tax Gross-ups. The 2023 Plan does not provide for any tax gross-ups.
Shares Subject to the 2023 Plan
The number of shares authorized for issuance under the 2023 Plan shall be 2,811,051, plus shares covered by awards granted under the 2013 Plan if the award (or a portion of such award) is forfeited, is canceled or expires without the issuance of shares or, except with respect to options and SARs, if the shares underlying such award are surrendered or withheld in satisfaction of tax withholding obligations after the Effective Date of the 2023 Plan. All share amounts authorized under the 2023 Plan will be subject to adjustment for stock splits and other changes in the Company’s capitalization. The shares issued pursuant to awards granted under the 2023 Plan may be shares that are authorized and unissued or issued shares that were reacquired by the Company. Subject to adjustments for stock splits and other changes in the Company’s capitalization, the aggregate number of shares that may be issued pursuant to the exercise of incentive stock options (“ISOs”) granted under the 2023 Plan is 2,811,051.
In the case of a stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding shares as a class without the Company’s receipt of consideration, we will adjust (a) the maximum number and kind of shares reserved for issuance under the 2023 Plan, (b) the number and kind of shares covered by, and with respect to options and SARs, the exercise or base price per share of, outstanding awards, and (c) the maximum aggregate ISO limit. Any such adjustments shall be made in order to prevent dilution or enlargement of the benefits or potential benefits intended to be provided under the 2023 Plan.
The plan administrator may issue awards in settlement or assumption of, or in substitution for, outstanding awards in connection with the Company or its subsidiary acquiring another entity, an interest in another entity or an additional interest in connection with a merger, stock purchase, asset purchase or other form of transaction, and the shares underlying such awards will not be counted against the share limit. Additionally, available shares under a stockholder approved plan of an acquired company, as appropriately adjusted to reflect such acquisition, may be used for awards under the 2023 Plan and will not be counted against the share limit, except as required by the rulesthose of any applicable stock exchange.
For purposes of determining the share limits described in the paragraphs above, the aggregate number of shares issued under the 2023 Plan at any time will equal only the number of shares actually issued upon exercise or settlement of an award. Shares subject to awards that have been canceled, expired, forfeited, settled in cash, or otherwise not issued under an award, will not count as shares issued under the 2023 Plan. The 2023 Plan provides that shares delivered to, or withheld by, the Company to pay withholding taxes related to an award other than an option or SAR will be returned to the 2023 Plan’s share reserve, but shares delivered to, or withheld by, the Company to pay the exercise price of an option or to pay withholding taxes related to optionsaffiliated entity, including RMCO and SARs, unissued shares resulting from the settlement of SARs in stock, and shares purchased by us in the open market using the proceeds of option exercises will not be returned to the 2023 Plan’s share reserve.
Certain Plan Terms and Conditions
Theits subsidiaries. This is a summary of the 2023 Plan, provided herein sets forth the principal features of the 2023 Plan. This summary does not purport to be a complete description, of all of the provisions of the 2023 Plan. Itand is qualified in its entirety by reference to the full text of the 2023 Plan, a copy of which is attached as Appendix 2 to this proxy statement.
General. The 2023 Plan permits the Company to issue stock options (non-qualified options and ISOs), SARs, restricted stock, restricted stock units, dividend equivalent rights and other equity and cash awards.
Eligibility. Employees, non-employee Directors and consultants of the Company and its subsidiaries would be eligible to receive awards under the 2023 Plan. As of the April 1, 2024 (the” Record Date, 2023, we hadDate”), approximately 60045 officers, 500 other employees, and approximately 10ten non-employee Directors who could bewere eligible receive awards underto participate in the 2023 Plan. The administrator of the 2023 Plan also has discretion to grant awards to consultants; however, the administrator hasconsultants, although we have not historically done so underand, as of the 2013 Plan andRecord Date, there are currently no consultants the administrator iswould likely to make grants to underconsider for the 2023 plan. Such persons are eligible to participategrant of awards. Participation in the 2023 Plan on the basis that such participation provides eligible persons an incentive, through ownership of our Class Athe Company’s common stock, to continue in service to usthe Company and any parentrelated entities, and subsidiary corporations, and to help ushelps the Company compete effectively with other enterprises for the services of qualified persons.
Limit on Awards toThe Compensation Committee of the Board of Directors. The 2023 Plan includes a limit of $750,000 on the combined value of equity awards and cash compensation provided to any non-employee Director in any fiscal year.
Share Reserve. The maximum number of shares of Class A common stock that may be issued pursuant to administers the 2023 Plan and is described above underreferred to as the heading “Shares Subject to 2023 Plan.“administrator.”
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Administration. Our Board of Directors, or a committee of our Board of Directors, will administer the 2023 Plan. The administrator mayhas 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.
Except in connection with equity restructurings and other situations in which share adjustments are specifically authorized, the 2023 Plan will prohibitprohibits repricing of any outstanding stock option or SAR awards without the prior approval of our stockholders. Specifically, without prior affirmative approval of Company’s stockholders, the Company may not (a) reduce the per share exercise price of an option or base amount of a SAR, (b) cancel, surrender, replace or otherwise exchange any outstanding option or SAR where the fair market value of a share of our Class A common stock underlying such option or SAR is less than its per share exercise price or base amount for a new stock option or SAR, another award, cash, shares or other securities or (c) take any other action that is considered a “repricing” for purposes of the stockholder approval rules of the applicable securities exchange or inter-dealer quotation system on which the our shares of Class A common stock are listed or quoted.
Stock Options. The 2023 Plan will allow for the grant of non-qualified options and ISOs. ISOs may be granted only to employees. Non-qualified stock options may be granted to employees, Directors, and consultants. The exercise price of all options granted under the 2023 Plan must at least be equal to the fair market value of our Class A common stock on the date of grant, and the term of an option granted under the 2023 Plan may not exceed ten years, except that with respect to any employee who owns more than 10% of the voting power of all classes of our outstanding stock or any parent or subsidiary corporation as of the grant date, the term of an ISO must not exceed five years, and the exercise price must equal at least 110% of the fair market value on the grant date. After the service of an employee, Director, or consultant terminates, the option may be exercised, to the extent vested, for the period of time specified in the option agreement. However, an option may not be exercised later than the expiration of its term.
Stock Appreciation Rights (SARs). The 2023 Plan will allow for the grant of SARs. SARs allow the recipient to receive the appreciation in the fair market value of our Class A common stock between the date of grant and the exercise date. The administrator will determine the terms of SARs, including when such rights become exercisable and whether to pay the increased appreciation in cash or with shares of our Class A common stock, or a combination thereof, except that the base appreciation amount for the cash or shares to be issued pursuant to the exercise of a SAR will be no less than 100% of the fair market value per share on the date of grant and a SAR will not have a term of more than 10 years. After the continuous service of an employee, Director or consultant terminates, the SAR may be exercised, to the extent vested, for the period of time specified in the SAR agreement. However, a SAR may not be exercised later than the expiration of its term.
Restricted Stock Awards. The 2023 Plan will allow for the grant of restricted stock. Restricted stock awards are shares of our Class A common stock that vest in accordance with terms and conditions established by the administrator. The administrator will determine the number of shares of restricted stock granted to any employee, Director or consultant. The administrator may impose whatever conditions on vesting it determines to be appropriate. For example, the administrator may set restrictions based on the achievement of specific performance goals. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.
Restricted Stock Units. The 2023 Plan will allow for the grant of restricted stock units. Restricted stock units are awards that will result in payment to a recipient at the end of a specified period only if the vesting criteria established by the administrator are achieved or the award otherwise vests. The administrator may impose whatever conditions to vesting, or restrictions and conditions to payment that it determines to be appropriate. The administrator may set restrictions based on the achievement of specific performance goals or on the continuation of service or employment. Payments of earned restricted stock units may be made, in the administrator’s discretion, in cash, with shares of our Class A common stock or other securities, or a combination thereof.
Dividends and Dividend Equivalents. Dividends may be credited with respect to restricted stock awards and dividend equivalents may be credited with respect to other awards (other than stock options and SARs).However, participants are not entitled to receive any such credited dividends or dividend equivalents unless and until the award upon which the dividend or dividend equivalent is based vests.
Other Awards. The 2023 Plan also provides for the issuance of other awards relating to the Company’s shares (including vested shares issued in respect of bonus or other awards) and cash-based awards.
Terms of Awards. Subject to the terms of the 2023 Plan, the administrator will determine the provisions, terms, and conditions of each award including, but not limited to, the award vesting schedule, forfeiture provisions, form of paymentquoted
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(cash, shares, or other consideration) upon settlement of the award, payment contingencies, and satisfaction of any performance criteria. SubjectThe 2013 Omnibus Incentive Plan
Prior to compliance with applicable tax and other laws, awards under the 2023 Plan may be deferred pursuant to any deferred compensation plan or program that we may adopt.
Performance Goals. The 2023 Plan allows for vesting, payment, settlement, and other entitlements with respect to awards to be subject to items or events that contain vesting or other terms that relate to performance-based conditions. Such performance-based conditions may be based on (by way of example and not as an exhaustive list) one of, or combination of the following: net earnings or net income (before or after taxes); agent count; franchise sales; earnings per share; revenues or sales (including net sales or revenue growth); net operating income; return measures (including return on assets, net assets, capital, invested capital, equity, sales, or revenue); cash flow (including operating cash flow, free cash flow, adjusted free cash flow, cash flow return on equity, and cash flow return on investment); earnings before or after taxes, interest, depreciation, and/or amortization (“EBITDA”); EBITDA adjusted for non-cash and non-recurring items as determined by the Board of Directors or a committee of the Board of Directors; gross or operating margins; productivity ratios; share price (including growth measures and total stockholder return); expense targets; margins; operating efficiency; market share; working capital targets and change in working capital; or economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital).
The performance goals may be applicable to the Company, affiliated entities and/or any individual business units of the Company or any affiliated entities and may be measured annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the administrator. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the award agreement. The performance goals will generally be calculated in accordance with generally accepted accounting principles, but excluding, unless otherwise specified by the administrator, the effect (whether positive or negative) of any change in accounting standards and any extraordinary, unusual, or nonrecurring item occurring after the establishment of the performance criteria.
Clawback. Generally, all awards, and any related payments made under the 2023 Plan will be subject to the requirements of any applicable clawback, repayment or recapture policy implemented by the Company, to the extent set forth in such policy and/or in an award or other agreement with the participant.
Transferability of Awards. Incentive stock options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the award recipient, only by the award recipient. Awards other than incentive stock options will be allowed to be transferred (i) by will or by the laws of descent and distribution, (ii) during the lifetime of the award recipient, to the extent and in the manner authorized by the administrator, but only to the extent such transfers are made in accordance with applicable laws to family members, to family trusts, to family controlled entities, to charitable organizations, and pursuant to domestic relations orders or agreements, in all cases without payment for such transfers to the award recipient and (iii) as otherwise expressly permitted by the administrator and in accordance with applicable laws.
Certain Adjustments. Subject to any required action by the Company’s stockholders, applicable laws and the change in control provisions as discussed below, (i) the number and kind of shares or other securities or property covered by any outstanding award, (ii) the number and kind of shares that have been authorized for issuance under the 2023 Plan, (iii) the exercise price, base amount or purchase price of any outstanding award and (iv) any other terms that the administrator determines require adjustment, will be proportionately adjusted for: (A) any increase or decrease in the number of issued shares of our Class A common stock resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification, or similar transaction affecting the shares; (B) any other increase or decrease in the number of issued shares of our Class A common stock effected without receipt of consideration by the Company; or (C) any other transaction with respect to the shares of our Class A common stock, including any distribution of cash, securities or other property to stockholders (other than a normal cash dividend), a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete), a “corporate transaction” as defined in Section 424 of the Internal Revenue Code of 1986 (the “Code”) or any similar transaction. Such adjustments to outstanding awards will be effected in a manner that is intended to preclude the enlargement or diminution of rights and benefits under such awards. Except as the administrator determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, will affect, and no adjustment will be made with respect to, the number or price of shares of our Class A common stock subject to an award.
Changes in Control. In the event of a change in control, if the Company is the surviving entity or if the surviving or acquiring corporation assumes outstanding awards or substitutes similar awards (the “Continued, Assumed or Substituted Awards”), such awards will remain governed by their respective terms; provided, that (a) if, as of the change in control, the
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awards are subject to vesting conditions relating to items or events other than continuous service (for example performance-based vesting conditions), such vesting conditions shall be deemed to have been satisfied at the “target” performance level (or, if the applicable performance period has been completed as of the date of the change in control, at the performance level achieved based on actual performance) and the Continued, Assumed or Substituted Awards shall remain subject to any vesting conditions based on continuous service, without proration, and (b) if on, or within 24 months following, the date of the change in control, the participant’s continuous service is terminated by the Company or a related entity without cause, the Continued, Assumed or Substituted Awards held by the participant that were not then vested (and, with respect to Options and SARs, exercisable) shall immediately become fully vested and, if applicable, exercisable.
In the event of a change in control, if the Company is not the surviving entity and the surviving entity (or a parent entity thereof) does not assume or substitute awards, the holders of such awards shall be entitled to the benefits provided for Continued, Assumed or Substituted Awards as of the date of the change in control, to the same extent as if the holder’s continuous service had been terminated by the Company without cause as of the date of the change in control. The Committee may provide that each award that is vested (or vests) as of the change in control will be canceled in exchange for a payment in an amount equal to (a) the fair market value per share subject to the award immediately prior to the change in control over the exercise or base price (if any) per share subject to the award multiplied by (b) the number of shares granted under the award. If the fair market value per share subject to an option or SAR immediately before the change in control is less than the exercise or base price per share of such award, such awards will be cancelled for no consideration.
A change in control means, generally, (a) the acquisition by any person of 50% or more of the voting power of all classes of stock entitled to vote, (b) the current members of our Board, or their approved successors, cease to be a majority of the Board, or (c) a reorganization, merger, consolidation or sale or disposition of all or substantially all of our assets, unless our stockholders hold 50% or more of the voting power of the resulting company, no person owns 50% or more of the voting power of all classes of stock entitled to vote (except to the extent such ownership existed prior to the corporate transaction and at least a majority of the current members of our Board remain members of the Board following the corporate transaction.
Plan Amendments and Termination. The 2023 Plan will have a term of ten years following the date it becomes effective unless we terminate it sooner. In addition,IPO, our Board of Directors hasadopted the authorityRE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “2013 Plan”) and our stockholders voted in 2017 to amend, suspend or terminatereapprove the 2023 Plan, subject to stockholder approval in the event such approval is required by law. Upon expiration of the term, no further awards may be grantedOmnibus Plan. The Company made certain equity grants under the plan. No amendment, suspension, or termination2013 Plan prior to the effective date of the 2023 Plan or any award shall materially adversely affect(which was May 24, 2023, the rightsday our stockholders approved the 2023 Plan).
Outstanding awards under anythe 2013 Plan will remain outstanding award withoutand subject to the holder’s written consent. However, an amendment that may cause an incentive stock option to become a non-qualified stock option or the administrator considers necessary or advisable to comply with applicable laws will not be treated as materially adversely affecting the rights under any outstanding award.
Certain Interests of Directors and Officers. In considering the recommendationterms of the Board2013 Plan and the respective award agreements, until the vesting, expiration or lapse of Directorssuch awards in accordance with respect totheir terms. No further awards have been made under the approval2013 Plan since the effective date of the 2023 Plan.
401(k) Plan stockholders should be aware that, as discussed above, Directors
We maintain 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 officers are eligiblebonuses, subject to receive awards under the 2023 Plan. The Board of Directors recognizes that approval of this proposal may benefit our Directors and their successors.
Certain U.S. Federal Tax Consequences
The following is a summary of U.S. federal taxes applicable to awards that may be provided under the 2023 Plan and the disposition of shares acquiredannual limits set pursuant to the exercise or settlementCode. The Company generally makes a 50% discretionary matching contribution quarterly. Plan participants may elect to invest their contributions in various established funds. Company contributions vest 33% each year for the first three years of such awards, based on provisions ofan employee’s service, then vest 100% thereafter.
Nonqualified Deferred Compensation Plan
In 2023, we adopted the Code and the regulations thereunder in effect on the date of this proxy statement. This summary is not intended to be a complete statement of applicable law, nor does it address foreign, state, local, and payroll tax considerations. This summary assumes that all awards described in the summary are exempt from, or comply with, the requirements of Section 409A of the Code. Moreover, the U.S. federal income tax consequences to any particular participant may differ from those described herein by reason of, among other things, the particular circumstances of such participant.
Non-Qualified Stock Options. The grant of a non-qualified stock option under the 2023 Plan generally will not result in any U.S. Federal income tax consequencesRE/MAX Holdings, Inc. Deferred Compensation Plan. Pursuant to the award recipient orDeferred Compensation Plan, Directors and certain highly compensated employees can elect to the Company. Upon exercisedefer up to 100% of a non-qualified stock option, the award recipient is generally subject to income taxes at the rate applicable to ordinary compensation income on the difference between the option exercise price and the fair market valueequity grants instead of the shares on the date of exercise. This income is generally subject to withholding for U.S. Federal income and employment tax purposes. The Company (or a subsidiary) generally is entitled to an income tax deduction in the amount of the income recognized by the award recipient, subject to possible limitations imposed by Section 162(m) or Section 280G of the Code. Any gain or loss on the
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award recipient’s subsequent disposition of the shares of our Class A common stock will receive long or short-term capital gain or loss treatment, depending on whether the shares are held for more than one year following exercise. The Company does not receive a tax deduction for any such gain.
Incentive Stock Options. The grant of an incentive stock option under the 2023 Plan will not result in any U.S. Federal income tax consequences to the award recipient or to the Company. An award recipient recognizes no U.S. Federalreceiving these amounts as payments taxable income upon exercising an incentive stock option (subject to the alternative minimum tax rules discussed below), and the Company receives no deduction at the time of exercise. In the event of a disposition of stock acquired upon exercise of an incentive stock option, the tax consequences depend upon how long the award recipient has held the shares of our Class A common stock. If the award recipient does not dispose of the shares within two years after the incentive stock option was granted, nor within one year after the incentive stock option was exercised, the award recipient will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price. The Company is not entitled to any deduction under these circumstances.
If the award recipient fails to satisfy either of the foregoing holding periods, the award recipient must recognize ordinary income in the year of receipt.
The unfunded, nonqualified plan structure of the disposition, whichDeferred Compensation Plan is referredrequired in order to aspreserve the beneficial tax deferral treatment for the participants. Amounts in a “disqualifying disposition.” The amount of such ordinary income generally isparticipant’s deferral account represent unsecured claims against the lesser of (i) the difference between the amount realizedCorporation’s assets. Deferred amounts together with any credited investment returns are paid out to participants in accordance with their advance written election, either in a lump sum or in annual installment payments commencing on the disposition and the exercise price or (ii) the difference between the fair market value of the stock on the exerciseapplicable benefit distribution date and the exercise price. Any gain in excess of the amount taxed as ordinary income will be treated as a long or short-term capital gain, depending on whether the stock was held for more than one year. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary income recognizedselected by the award recipient, subject to possible limitations imposed by Section 162(m) and Section 280G of the Code.participant.
The “spread” under an incentive stock option—i.e., the difference between the fair market value of the shares at exercise and the exercise price—is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If an award recipient’s alternative minimum tax liability exceeds such award recipient’s regular income tax liability, the award recipient will owe the larger amount of taxes. In order to avoid the application of alternative minimum tax with respect to incentive stock options, the award recipient must sell the shares within the same calendar year in which the incentive stock options are exercised. However, such a sale of shares within the same year of exercise will constitute a disqualifying disposition, as described above.
Stock Appreciation Rights. Recipients of SARs generally should not recognize income until such rights are exercised, assuming there is no ceiling on the value of the right and Section 409A of the Code does not apply. Upon exercise, the award recipient will normally recognize taxable ordinary income for U.S. Federal income tax purposes equal to the amount of cash and fair market value the shares, ifNo Directors or Named Executive Officers deferred any received upon such exercise. The Company (or a subsidiary) generally is entitled to an income tax deduction in the amount of the income recognized by the award recipient, subject to possible limitations imposed by Section 162(m) or Section 280G of the Code. Award recipients who are employees will be subject to withholding for U.S. Federal income and employment tax purposes with respect to income recognized upon exercise of a SAR. Award recipients will recognize gain upon the disposition of any shares received on exercise of a SAR equal to the excess of (i) the amount realized on such disposition over (ii) the ordinary income recognized with respect to such sharescompensation under the principles set forth above. That gain will be taxableDeferred Compensation Plan in 2023 or had account balances as long or short-term capital gain depending on whether the shares were held for more than one year.
Restricted Stock. The grant of restricted stock will generally subject the recipient to ordinary compensation income on the difference between the amount paid for such stock and the fair market value of the shares on the date that the restrictions lapse. This income is generally subject to withholding for U.S. Federal income and employment tax purposes. The Company (or a subsidiary) generally is entitled to an income tax deduction in the amount of the ordinary income recognized by the recipient, subject to possible limitations imposed by Section 162(m) and Section 280G of the Code. Any gain or loss on the recipient’s subsequent disposition of the shares will receive long or short-term capital gain or loss treatment depending on how long the stock has been held since the restrictions lapsed. The Company does not receive a tax deduction for any such gain.December 31, 2023.
Recipients of restricted stock may make an election under Section 83(b) of the Code (a “Section 83(b) Election”) to recognize as ordinary compensation income in the year that such restricted stock is granted, the amount equal to the spread between the amount paid for such stock (if any) and the fair market value on the date of the issuance of the stock. If such an election is made, the recipient recognizes no further amounts of compensation income upon the lapse of any restrictions and any gain or loss on subsequent disposition will be long or short-term capital gain to the recipient. The Section 83(b) Election must be made within thirty days from the time the restricted stock is issued.
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The Company (or a subsidiary) generally will be entitled to a tax deduction to the extent and in the year that ordinary income is recognized by the award recipient, subject to possible limitations imposed by Section 162(m) and Section 280G of the Code.
Restricted Stock Units. Recipients of restricted stock units generally should not recognize income until such units are converted into cash or shares of stock unless Section 409A of the Code applies. Upon conversion, the award recipient will normally recognize taxable ordinary income for federal income tax purposes equal to the amount of cash and fair market value the shares, if any, received upon such conversion. Award recipients who are employees will be subject to withholding for federal income and employment tax purposes with respect to income recognized upon conversion of the restricted stock units. The Company (or a subsidiary) generally is entitled to an income tax deduction in the amount of the income recognized by the award recipient, subject to possible limitations imposed by Section 162(m) or Section 280G of the Code. Award recipients will recognize gain upon the disposition of any shares received upon conversion of the restricted stock units equal to the excess of (i) the amount realized on such disposition over (ii) the ordinary income recognized with respect to such shares under the principles set forth above. That gain will be taxable as long or short-term capital gain depending on whether the shares were held for more than one year.
Other Stock-Based and Cash-Based Awards. Upon receipt of share-based awards, generally the value of shares and amount of cash received will be taxable as ordinary income to the participant. Upon receipt of cash in settlement of a cash-based award, a participant generally will recognize ordinary income equal to the cash received, and the Company (or a subsidiary) generally will be allowed a corresponding federal income tax deduction at that time, subject to potential deduction limitations under Sections 162(m) and 280G of the Code.
Dividends and Dividend Equivalents. Recipients of stock-based awards that earn dividends or dividend equivalents will recognize taxable ordinary income on any dividend and dividend equivalent payments received with respect to such awards, which income is subject to withholding for U.S. federal income and employment tax purposes. The Company (or a subsidiary) generally is entitled to an income tax deduction in the amount of the income recognized by a participant, subject to possible limitations imposed by Sections 162(m) or 280G of the Code and so long as the Company withholds the appropriate taxes with respect to such income, if required, and the individual’s total compensation is deemed reasonable in amount.
Compliance with Section 409A of the Code. To the extent applicable, it is intended that the 2023 Plan and any grants made under the 2023 Plan will comply with or be exempt from the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the participants. The 2023 Plan and any grants made under the 2023 Plan will be administered and interpreted in a manner consistent with this intent.
The foregoing is only a summary of the U.S. Federal income tax consequences of 2023 Plan transactions and is based upon U.S. Federal income tax laws in effect on the date of this proxy statement. Reference should be made to the applicable provisions of the Code. This summary does not purport to be complete and does not discuss the tax consequences of an award recipient’s death or the tax laws of any municipality, state or foreign country to which the award recipient may be subject.
New Plan Benefits
Except for the awards reflected in the table below, which have been granted under the 2023 Plan, subject to stockholder approval of the 2023 Plan (the “Contingent Awards”), awards under the 2023 Plan, if approved by stockholders, would be discretionary and no specific determination has been made as to the grant or allocation of awards under the 2023 Plan. Therefore, other than the Contingent Awards, at this time the benefits that may be received by the Company’s employees, Directors, consultants or other service providers under the 2023 Plan are not presently determinable.
The following table provides information concerning the Contingent Awards that have been granted to the following persons and groups under the 2023 Plan; each Named Executive Officer, all current executive officers as a group; all current Directors who are not executive officers as a group; each nominee for election as a Director, and all current employees, including current officers who are not executive officers, as a group. If stockholders do not approve the 2023 Plan, the Contingent Awards will automatically be forfeited.
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| RE/MAX Holdings, Inc. |
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PROPOSAL 5:3: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
What am I voting on? Stockholders are asked to ratify the Audit Committee’s appointment of EY as the independent registered public accounting firm for | | | Our Audit Committee has appointed Ernst & Young LLP (“EY”) as our independent registered public accounting firm for the fiscal year ending December 31, Representatives of EY are expected to attend the Annual Meeting and will be available to respond to stockholder questions 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 EY as our independent registered public accounting firm for the fiscal year ending December 31, |
What is the Board’s voting recommendation? The Board recommends voting FOR the ratification of EY. | |||
What is the required vote? This item requires the vote of a majority of shares voted. |
Change of AuditorsAuditor in 2023
The Audit Committee, with the assistance of Company management, conducted a competitive process to select the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. The Committee invited multiple firms to participate in this process including KPMG LLP (“KPMG”), which has served as the Company’s independent registered public accounting firm since 2003.2003 through 2022.
As a result of this process, following the review and evaluation of proposals from participating firms, on March 7, 2023, the Committee approved the engagement of EY as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023, and approved the dismissal of KPMG as the Company’s independent registered public accounting firm.
KPMG’s audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2021, and December 31, 2022, did not contain any adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
During the Company’s two most recent fiscal years ended December 31, 2021 and December 31, 2022, and in the subsequent interim period through March 7, 2023: (i) there were no disagreements with KPMG (within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions) on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference in connection with their opinion to the subject matter of the disagreement; and (ii) there were no reportable events (as described in Item 304(a)(1)(v) of Regulation S-K).
During the Company’s two most recent fiscal years ended December 31, 2021 and December 31, 2022, and during the subsequent interim period preceding EY’s engagement, neither the Company, nor anyone on its behalf, has consulted EY with respect to: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral
| RE/MAX Holdings, Inc. |
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report nor oral advice was provided to the Company that EY concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing, or financial reporting issue or (ii) any matter that was either the subject of a disagreement (within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
On March 13, 2023, the Company filed a Current Report on Form 8-K disclosing the appointment of EY and the dismissal of KPMG.
Auditor Fees
The following table presents aggregate fees billed to the Company for services rendered by EY, our independent registered public accounting firm for the fiscal year ended December 31, 2023, and for services rendered by KPMG, our independent registered public accounting firm for the fiscal yearsyear ended December 31, 2022, and 2021.2022.
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| 2022 | | 2021 | 2023 |
| 2022 | ||||
Audit fees (1) | | $ | 1,051,850 | | $ | 1,702,599 | $ | 1,401,123 | | $ | 1,051,850 |
Audit-related fees | | | — | ��� | | 20,719 | | — | | | — |
Tax fees | | | — | | | — | | — | | | — |
All other fees | | | 5,000 | | | 5,000 | | — | | | 5,000 |
Total | | $ | 1,056,850 | | $ | 1,728,318 | $ | 1,401,123 | | $ | 1,056,850 |
(1) | Audit fees include fees for the audit of our consolidated financial statements (including the audits required of internal control over financial reporting). This includes subsidiary company audits. |
(2) |
All other fees are fees for access to certain training materials. |
| RE/MAX Holdings, Inc. |
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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, 2022.2023. 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), Teresa Van De Bogart, Laura Kelly, and Katherine Scherping. Each of the members is independent and financially literate as defined under the applicable NYSE rules. Ms. Cunningham and Ms. Scherping 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 certain oversight responsibilities, including reviewing the financial information that will be provided to stockholders and others; appointing the independent registered public accounting firm; reviewing the services performed by the Company’s independent registered public accounting firm; directly overseeing the Internal Audit department; evaluating the Company’s accounting policies; reviewing the integrity of the financial reporting process and the internal control structure that management and the Board have established; reviewing significant financial transactions, earnings press releases and earnings guidance; and investigating reports of wrongdoing made through the Company’s Ethics Helpline or otherwise and ensuring implementation of corrective actions. Management of cybersecurity is the responsibility of the Company’s management, and the Audit Committee oversees the Company’s management of cybersecurity risks. Management of the Company is responsible for preparation and presentation of the Company’s consolidated 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 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 Senior Vice President of Internal Audit and circulated to each Committee member in advance of the meeting. During 20222023 the Audit Committee cybersecurity oversight included the Audit Committee receiving regular updates from the Chief Information Officer and Vice President of Technology,Information Security and Risk, in areas such as rapidly evolving cybersecurity threats, cybersecurity technologies and solutions deployed internally, cybersecurity disclosure, and major cybersecurity risk areas and efforts to mitigate 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 Senior 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. 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 Senior Vice President of Internal Audit, matters that the Committee believes should be discussed privately.
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 with the independent registered 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, 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.
KPMGErnst & Young LLP (“KPMG”EY”) servedwas selected as a result of a competitive selection process which included several firms and began to serve as the Company’s independent registered public accounting firm since 2003.in 2023. 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 withannually reviews the assistance of management, conducted a competitive process to selectengagement and considers several factors, including the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. The Committee invited multiple firms to participate in this process including KPMG. The process considered several factors, including the firms’firm’s qualifications, independence, audit approach, work quality, appropriateness of fees, and significant legal or regulatory proceedings related to the firms,firm, along with the impact of changing auditors. The Committee has determined it is in the best interest of the stockholders to reappoint EY as the independent registered public accounting firm after thoroughly evaluating these factors.
| RE/MAX Holdings, Inc. |
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stockholders to appoint Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2023,after thoroughly evaluating these factors.
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 engagements with its independent registered public accounting firm 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 KPMGthe Company’s independent registered public accounting firm were pre-approved by the Audit Committee in 20222023 and 2021.2022.
The Audit Committee has reviewed and discussed the audited financial statements as of and for the year ended December 31, 2022,2023, with the Company’s management and KPMG.EY. The Audit Committee has also discussed with KPMGEY the matters required to be discussed by Auditing Standard No. 1301, as amended “Communications with Audit Committees,” as adopted by the PCAOB. The Audit Committee also has received and reviewed the written disclosures and the letter from KPMGEY required by applicable requirements of the PCAOB regarding KPMG’sEY’s communications with the Audit Committee concerning independence and has discussed with KPMGEY its independence from the Company.
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, 2022.2023.
Audit Committee:
Kathleen J. Cunningham, Chair
Laura G. Kelly
Katherine L. Scherping
Teresa S. Van De Bogart
| RE/MAX Holdings, Inc. |
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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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 and nominees, (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 date of this Proxy Statement, unless otherwise noted. 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 30, 2023,April 1, 2024, which is the record dateRecord Date for the Annual Meeting (the “Record Date.”)Meeting.
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.
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| | | | | | | | | | | | | | Voting Power |
| | | | | | | | | | | | | | of Class A |
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| 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 | | 1.88% | | 12,559,600 | | 39.59% | | 1 | | 100.00% | | 41.11% |
Nicholas R. Bailey (3) | | 52,631 | | * | | — | | * | | — | | * | | * |
Erik Carlson | | — | | * | | — | | * | | — | | * | | * |
Karri R. Callahan | | 78,301 | | * | | — | | * | | — | | * | | * |
Kathleen J. Cunningham | | 26,707 | | * | | — | | * | | — | | * | | * |
Roger J. Dow | | 40,607 | | * | | — | | * | | — | | * | | * |
Norman K. Jenkins | | 4,057 | | * | | — | | * | | — | | * | | * |
Stephen P. Joyce | | 330,882 | | 1.73% | | — | | * | | — | | * | | 1.04% |
Annita M. Menogan | | 7,885 | | * | | — | | * | | — | | * | | * |
Ward M. Morrison | | 54,531 | | * | | — | | * | | — | | * | | * |
Christine M. Riordan | | 24,234 | | * | | — | | * | | — | | * | | * |
Katherine L. Scherping | | 6,647 | | * | | — | | * | | — | | * | | * |
Serene M. Smith | | 63,984 | | * | | — | | * | | — | | * | | * |
Teresa S. Van De Bogart | | 22,523 | | * | | — | | * | | — | | * | | * |
Directors and Executive Officers as a group (17 persons) (4) | | 1,128,518 | | 5.35% | | 12,559,600 | | 39.59% | | 1 | | 100.00% | | 43.58% |
5% Stockholders | | | | | | | | | | | | | | |
RIHI (5) | | — | | * | | 12,559,600 | | 39.59% | | 1 | | 100.00% | | 39.98% |
Magnolia Capital Fund L.P. (6) | | 2,983,843 | | 15.83% | | — | | * | | — | | * | | 9.50% |
BlackRock, Inc. (7) | | 1,592,336 | | 8.45% | | — | | * | | — | | * | | 5.07% |
RPD Fund Management LLC (8) | | 1,102,241 | | 5.85% | | — | | * | | — | | * | | 3.51% |
Hotchkis and Wiley Capital Management, LLC (9) | | 1,057,780 | | 5.61% | | — | | * | | — | | * | | 3.37% |
Dimensional Fund Advisors LP (10) | | 1,048,674 | | 5.56% | | — | | * | | — | | * | | 3.34% |
The Vanguard Group (11) | | 1,027,031 | | 5.45% | | — | | * | | — | | * | | 3.27% |
* | Less than 1% |
| RE/MAX Holdings, Inc. |
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| | | | | | | | | | | | | | Voting Power |
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| 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 | | 1.95% | | 12,559,600 | | 40.67% | | 1 | | 100.00% | | 42.09% |
Gail A. Liniger (2) (3) | | 353,711 | | 1.95% | | 12,559,600 | | 40.67% | | 1 | | 100.00% | | 42.09% |
Nicholas R. Bailey | | 32,554 | | * | | — | | * | | — | | * | | * |
Karri R. Callahan | | 47,685 | | * | | — | | * | | — | | * | | * |
Adam M. Contos (4) | | 80,184 | | * | | — | | * | | — | | * | | * |
Kathleen J. Cunningham | | 24,298 | | * | | — | | * | | — | | * | | * |
Roger J. Dow | | 35,198 | | * | | — | | * | | — | | * | | * |
Ronald E. Harrison | | 20,098 | | * | | — | | * | | — | | * | | * |
Norman K. Jenkins | | - | | * | | — | | * | | — | | * | | * |
Stephen P. Joyce | | 201,669 | | 1.10% | | — | | * | | — | | * | | * |
Laura G. Kelly | | 8,247 | | * | | — | | * | | — | | * | | * |
Annita M. Menogan | | 2,476 | | * | | — | | * | | — | | * | | * |
Ward M. Morrison | | 30,026 | | * | | — | | * | | — | | * | | * |
Christine M. Riordan | | 18,825 | | * | | — | | * | | — | | * | | * |
Katherine L. Scherping | | 1,238 | | * | | — | | * | | 1 | | * | | * |
Serene M. Smith | | 39,010 | | * | | — | | * | | — | | * | | * |
Teresa S. Van De Bogart | | 17,114 | | * | | — | | * | | — | | * | | * |
Directors and Executive Officers as a group (17 persons) (5) | | 834,733 | | 5.02% | | 12,559,600 | | 40.67% | | 1 | | 100.00% | | 43.66% |
5% Stockholders | | | | | | | | | | | | | | |
RIHI (6) | | — | | * | | 12,559,600 | | 40.67% | | 1 | | 100.00% | | 40.94% |
BlackRock, Inc. (7) | | 3,130,183 | | 17.27% | | — | | * | | — | | * | | 10.20% |
Magnolia Capital Fund L.P. (8) | | 2,371,051 | | 13.08% | | — | | * | | — | | * | | 7.73% |
The Vanguard Group (9) | | 2,139,396 | | 11.81% | | — | | * | | — | | * | | 6.97% |
Dimensional Fund Advisors LP (11) | | 1,389,361 | | 7.67% | | — | | * | | — | | * | | 4.53% |
RPD Fund Management LLC (10) | | 1,145,768 | | 6.32% | | — | | * | | — | | * | | 3.73% |
Renaissance Technologies LLC (12) | | 957,526 | | 5.28% | | — | | * | | — | | * | | 3.12% |
* Less than 1%
(1)