| | HOW TO CAST YOUR VOTE
Your vote is important. Please cast your vote as early as possible.2024 Annual Meeting of Shareholders Details
Stockholders of record, who hold shares registered in their names, can vote by:
| | | | | | | | | | | | | | | | | |  | | | |  | | | |  | | Date and Time | | | | Place | | | | Record Date | Thursday, May 9, 2024 at 12:00 p.m., Eastern Daylight Time | | | | Virtual Meeting: kellyservices.com | | | | Close of Business, Eastern Daylight Time, March 21, 2024 | | | | |  | |  | |  | | 
Voting Class B Shareholders as of the Record Date are entitled to vote. Each share of Class B Common Stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. Admission All holders of the Company’s Class A and Class B Common Stock are invited to attend the Annual Meeting of Shareholders. Proxy Voting Roadmap | | | | | | | | | | | | | | | | Internet at
www.envisionreports.com/kelybProposal
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Return the signed
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| | | | |
Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Central Daylight Time, on May 8, 2018. If you vote by mail, your proxy card must be received before the Annual Meeting.
Beneficial owners, who own shares through a bank, brokerage firm, or other financial institution, can vote by returning the voting instruction form, or by following the instructions for voting via telephone or the Internet, provided by the bank, broker, or other organization. If you own shares in different accounts or in more than one name, you may receive different voting instructions for each type of ownership. Please vote all your shares.
If you are astockholder of record or a beneficial owner who has alegal proxy to vote the shares, you may choose to vote in person at the Annual Meeting.Even if you plan to attend our Annual Meeting in person, please cast your vote as soon as possible.
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Proxy Summary
| | | | | | | MEETING AGENDA AND VOTING RECOMMENDATIONS
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| | | | | | | Voting Matters
| | Board’sProposal 1: Election of nine directors
| | FOR Recommendationeach nominee
| | 14 | | | | |
| | Page Reference
(for more detail)
| Proposal 1. | | Election of ten Directors | | ✓ FOR Each
Nominee
| | 13 | Proposal 2.
| | 2: Advisory vote to approve the Company’s Executive Compensation | | ✓ FOR | | 30 | Proposal 3.executive compensation
| | FOR | | 45 | | | | |
| | Proposal 3: Vote to approve Amendment and restatement of the Company’s Restated Certificate of Incorporation to eliminate certain obsoletereflect updated Delaware law provisions to eliminate a “stakeholder provision” that could conflict with Delaware Law, and to make additional revisions in the interest of modernization | | ✓ FOR | | 63 | Proposal 4.permitting officer exculpation
| | An Amendment to the Company’s amended and restated Bylaws to designate the Delaware Chancery Court as the exclusive forum for certain legal actionsFOR | | ✓ FOR | | 6477 | | | | | Proposal 5.
| | Proposal 4:Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 20182024 fiscal year | | ✓FOR | | 6579 |
| | | | | | | |  | | 8 | 5 | | |
Proxy Summary DIRECTOR NOMINEESDirector Nominees
The following table provides summary information about each Directordirector nominee. Each Directordirector is elected annually by a plurality vote. | | | | | | | | | | | | | | | | | | Name | | Age | | | Director
Since | | Principal Occupation | | Independent | | Committee
Memberships | | Other
Public
Company
Boards | | Terence E. Adderley | | | 84 | | | 1962 | | Chairman of the Board of Directors, Kelly Services, Inc. (1998 – present). | | No | | Governance | | | - | | Carol M. Adderley | | | 58 | | | 2010 | | Writer and Researcher in the Humanities. | | No | | Governance (Vice Chair) | | | - | | Gerald S. Adolph | | | 64 | | | 2018 | | Director, NAACP Legal Defense and Education Fund (1998 – present); Director, Cintas Corporation (2006 – present); Director, Cardinal Spellman High School Board (2010 – present); Senior Partner and other executive positions, Booz & Co. (1981 – 2016). | | Yes | | - | | | 1 | | George S. Corona | | | 59 | | | 2017 | | President and Chief Executive Officer, Kelly Services, Inc. (2017 – present); Executive Vice President and Chief Operating Officer, Kelly Services, Inc. (2009 – 2017). | | No | | - | | | - | | Robert S. Cubbin | | | 60 | | | 2014 | | Director, Huntington Bancshares Incorporated (2017 – present); Director, First Merit Corporation (2013 – 2017); President and Chief Executive Officer, Meadowbrook Insurance Group, Inc. (2002 – 2016). | | Yes | | Audit; Compensation (Chair); Governance | | | 1 | | Jane E. Dutton | | | 65 | | | 2004 | | Robert L. Kahn Distinguished University Professor Emeritus of Business Administration and Psychology, The University of Michigan Business School (2017 – present); Robert L. Kahn Distinguished University Professor of Business Administration and Psychology, The University of Michigan Business School (2007 – 2017). | | Yes | | Compensation; Governance (Chair) | | | - | | Terrence B. Larkin | | | 63 | | | 2010 | | Executive Vice President, Business Development, General Counsel and Corporate Secretary, Lear Corporation (2008 – present). | | Yes | | Audit (Vice Chair); Compensation | | | - | | Leslie A. Murphy | | | 66 | | | 2008 | | President and CEO, Murphy Consulting, Inc. (2008 – present); Certified Public Accountant; Member of AICPA’s Governing Council (2008 – present); Member of NACD Advisory Councils on Audit Committee Issues and Risk Oversight (2012 – present); Director, Detroit Legal News Company (2012 – present); Director, Loop Industries, Inc. (2017 – present). | | Yes | | Audit (Chair); Compensation (Vice Chair) | | | 2 | | Donald R. Parfet | | | 65 | | | 2004 | | Managing Director, Apjohn Group, LLC (2001 – present); General Partner, Apjohn Ventures Fund (2003 – present); Director, Rockwell Automation, Inc. (2008 – present); Director, MASCO Corporation (2012 – present); Director, Sierra Oncology, Inc. (2015 – present). | | Yes | | (Lead Director since 2012); Audit; Compensation; Governance | | | 3 | | Hirotoshi Takahashi | | | 48 | | | 2015 | | Director, Deputy Vice President and COO, Persol Holdings Co., LTD. (2013 – present); Representative Member, Godo Kaisha Yamashiroya, (2010 – present); Vice President, Japan Association of HR Services Industry (2012 – 2016) | | No | | - | | | 1 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Name | | Age | | Director
Since | | Independent | | Committees | | | | | | | 
| | Terrence B. Larkin Non-Executive Chairman of the Board | | 69 | | 2010 | | ● | | N/A | | | | | | | 
| | Peter W. Quigley President and Chief Executive Officer (“CEO”) | | 62 | | 2019 | | | | N/A | | | | | | | 
| | Gerald S. Adolph Director | | 70 | | 2018 | | ● | | Audit, Compensation and Talent Management, Corporate Governance and Nominating (Chair) | | | | | | | 
| | George S. Corona Director | | 65 | | 2017 | | ● | | N/A | | | | | | | 
| | Robert S. Cubbin Director | | 66 | | 2014 | | ● | | Audit, Compensation and Talent Management (Chair), Corporate Governance and Nominating | | | | | | | 
| | Amala Duggirala Director | | 49 | | 2022 | | ● | | Audit, Corporate Governance and Nominating | | | | | | | 
| | InaMarie F. Johnson Director | | 59 | | 2022 | | ● | | Compensation and Talent Management, Corporate Governance and Nominating | | | | | | | 
| | Leslie A. Murphy Director | | 72 | | 2008 | | ● | | Audit (Chair), Compensation and Talent Management | | | | | | | 
| | Donald R. Parfet Director | | 71 | | 2004 | | ● | | N/A |
| | | | | | | | | 6 | | 9 | | |
Proxy Summary CORPORATE GOVERNANCE HIGHLIGHTSCorporate Governance Highlights
The CompanyKelly is committed to goodsound corporate governance which we believe is important to the successas a means of enhancing long-term shareholder value. The following table summarizes certain of our business and in advancing stockholder interests. Our corporate governance practices are described in greater detail in the Corporate Governance section. Highlights include:and processes.
| | | | | Independence | | Accountability | | Best Practices | | | | ● Majority independent Board (89%), including independent Chairman of the Board | | annual● Annual election of all Directorsdirectors, including Chairman of the Board
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| ● | | expansion of● Robust director selection process resulting in diverse Board relative to add an additional independent Director in 2018gender, race, ethnicity, experience, and skills
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| | | ● 100% Independent Board Committees | | 6 out● Strong oversight of 10strategic planning, objectives, and financial performance including dedicated annual Board members are independentmeeting focused on strategic planning
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| ● | | independent Lead Director● Board attendance of 97.5% during 2023
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| | | ● Diverse and highly skilled Board that provides a range of viewpoints | | experienced, diverse Board membership● Annual evaluation of CEO (including compensation) by independent directors
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| ● | | ● Strong oversight of the integrity of the Company’s financial statements, as well as cybersecurity and Enterprise Risk Management (“ERM”) by the Board and Audit Committee | | | | ● Frequent executive sessions ofwhere independent Directors held in connection with every regular Board meetingdirectors meet without management and non-independent directors |
| ● | | average● Annual Board attendance of 92% during 2017and Committee self-evaluations and bi-annual peer review
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| ● | | independent Audit● CEO and executive leadership succession planning and annual talent review of key and rising talent by the Board and Compensation Committees, and a majority-independentTalent Management Committee
| | | | ● Director access to internal and external experts and advisors | | ● Annual review of corporate governance documents to align with best practices | | ● Policies prohibiting short-sales, hedging, pledging, and margin accounts | | | | ● No related-party transactions between the Company and members of the Board or senior management | | ● A longstanding Clawback Policy that applies to short-term and long-term incentive compensation plans for senior management | | ● Strong oversight of Environmental, Social and Governance (“ESG”) standards by the Board and Corporate Governance and Nominating Committee |
| | | | | ● Stock ownership requirements for directors and senior management | | strong● Comprehensive orientation program for new directors and robust continuing education programs for Board and Audit Committee leadership in the oversight of enterprise risk management
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| | | | | ● | | annual review of committee charters, Corporate Governance Principles, and● Robust Code of Business Conduct and Ethics to maintain effective oversight and governance practices
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| ● | | annual Board and Committee self-evaluations
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| ● | | oversight of the development and assessment of Executive Officers and key senior management
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| ● | | CEO and Executive Officer succession plans overseen byfor the Board, senior management, and Compensation Committee
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| ● | | long-standing commitment to sustainability and corporate social responsibility
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| ● | | policy prohibiting short sales, hedging, pledging, and margin accounts
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| ● | | Committees may engage independent advisors at their sole discretionall employees that includes an annual certification requirement
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CONNECTING PEOPLE TO WORK IN WAYS THAT ENRICH THEIR LIVESProxy Summary
| | | | | | | 10 | | |
Proxy Summary
We’re building on 77 years of industry leadership. FINANCIAL AND OPERATING HIGHLIGHTS
2017 wasA Year in Review
2023 marked a good year for Kelly that featured strategic focusof macroeconomic headwinds and acceleration. The company createdchallenging staffing market dynamics as employers in most sectors maintained a guarded approach to hiring and carried solid momentum throughout all four quarters that resultedfocused on retaining their current workforce amid ongoing economic uncertainty. In more resilient pockets of the economy, where employers need talent, the supply of candidates to fill open roles remains constrained. These dynamics put pressure on our business as the year progressed, and while we captured available growth opportunities, the macroeconomic effects became more noticeable in an improved gross profit rate, year over year growth in earnings from operations, and an improved conversion rate*. Kelly’s solid performance throughout 2017 demonstrates its commitment to focus and growth in the solutions that can make the biggest difference now and in the future. 2017 TOTAL COMPANY
2017 OPERATING EARNINGS BY SEGMENT
Effective January 2, 2017, Kelly realigned its business into three segments to reflect customer buying behavior and the Company’s operational structure.certain parts of our portfolio.
| ● | | Our Education segment continued to report significant year-over-year growth driven by improved fill rates, strong demand from existing customers, and net new customer wins. |
| ● | | Our higher margin outcome-based solutions in our Professional & Industrial (“P&I”) segment delivered revenue growth as demand for these value-added solutions continues. |
| ● | | We continued to experience a deceleration in demand for temporary and permanent placement services as well as talent solutions, which impacted results in our P&I, Science, Engineering & Technology (“SET”) and Outsourcing & Consulting Group (“OCG”) segments. |
| ● | | We maintained a disciplined approach to managing expenses, including our transformation initiatives, while ensuring Kelly is well positioned to capture demand on the other side of the current economic cycle. |
We remain focused on the future and are taking aggressive action on our transformation journey to improve Kelly’s profitability and accelerate growth over the long term. Since announcing the transformation in May, our business unit and enterprise function teams, together with the Transformation Management Office, made substantial progress on multiple initiatives to drive organizational efficiency and effectiveness. The actions taken to date include restructuring our full-time and in-house temporary employee headcount, and renegotiation of supplier agreements and real estate contracts to deliver structural cost savings. We also committed to finding new avenues of growth, including a refreshed go-to-market strategy to deliver more Kelly solutions to our large enterprise customers to enhance our customer value as we move into 2024. Notwithstanding our focus on these enterprise customers, we remain committed to delivering the highest quality of service to customers regardless of spend or size. For example, we enhanced our local delivery model and rolled out our Kelly Now mobile application across the U.S to meet the needs of clients and talent. | | | | | | 8 | | | |
Proxy Summary We completed the sale of our European staffing operations on January 2, 2024 and moved forward with a further streamlined operating model focused on North American staffing and solutions and global Managed Service Provider (“MSP”) and Recruitment Process Outsourcing (“RPO”) solutions. Together these changes represent structural shifts in Kelly’s operations, delivering meaningful improvement to the Company’s EBITDA margin which we expect to continue into 2024 and beyond. 2023 Financial Highlights Full Year 2023 Financial Summary | | | | | | | | | | | | Change Increase/(Decrease) | | | | Actual Results | | As Reported | | As Adjusted(2) | | | | | Revenue | | $4.8B | | (2.6%) | | (2.6%) | | | | | (3.2%) CC(1) | | (3.2%) CC(1) | | | | | Gross Profit Rate | | 19.9% | | (50) bps | | (50) bps | | | | | Earnings from Operations | | $24.3M | | 65.0% | | 1.2% | | | | | 73.8% CC(1) | | 2.8% CC(1) | | | | | Adjusted EBITDA | | $109.4M | | | | 3.6% | | | | | Adjusted EBITDA Margin | | 2.3% | | | | 20 bps |
| (1) | Constant Currency (“CC”) represents year-over-year changes resulting from translating 2023 financial data into USD using 2022 exchange rates |
| (2) | See reconciliation of Non-GAAP Measures included in Form 8-K dated February 15, 2024 |
Portfolio Progress Our M&A activities are shifting our portfolio. 
| | | | | | | | | 9 | |
Proxy Summary Our Operating Model Aligns to these Specialties (As Reported, by Business Unit) Our priorities for each segment are clear. | | | | | | | | 
Optimize Operations and Drive Efficiencies
| |
| | Americas Staffing is local/branch-delivered staffing business in the U.S., Puerto Rico, Canada, Mexico,
Accelerate Organic and Brazil.Inorganic Growth
Global Talent Solutions (GTS) includes Kelly’s global Outsourcing and Consulting Group (OCG) business, and centralized staffing operations in the U.S., Canada, and Puerto Rico.
International Staffing includes Kelly’s EMEA staffing business.
|
FINANCIAL MEASURES
The constant currency (“CC”) change amounts refer to the year-over-year percentage changes resulting from translating 2017 financial data into U.S. dollars using the same foreign currency exchange rates used to translate financial data for 2016. We believe that CC measurements are a useful measure, indicating the actual trends of our operations without distortion due to currency fluctuations. We use CC results when analyzing the performance of our segments and measuring our results against those of our competitors. Additionally, substantially all of our foreign subsidiaries derive revenues and incur cost of services and selling, general and administrative expenses within a single country and currency which, as a result, provides a natural hedge against currency risks in connection with their normal business operations.
CC measures arenon-GAAP (Generally Accepted Accounting Principles) measures and are used to supplement measures in accordance with GAAP. Ournon-GAAP measures may be calculated differently from those provided by other companies, limiting their usefulness for comparison purposes.Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Return on sales (earnings from operations divided by revenue from services) and conversion rate (earnings from operations divided by gross profit) are ratios used to measure the Company’s operating efficiency.
* | Conversion rate represents earnings from operations as a percentage of gross profit, or return on gross profit
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| ** | Excluding Q2 2016 and Q1 2017 restructuring charges
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| | ◆ | | | | | | | Comparisons represented in constant currencyKelly
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| † | Excluding 2016after-tax gain from the transfer of APAC staffing operations to the Persol Kelly Asia Pacific joint venture, the operational results of the business contributed to the Persol Kelly Asia Pacific joint venture in the third quarter of 2016, and thenon-cash impact in 2017 of U.S. tax law changes© 2018 Kelly Services, Inc. R1/31Professional
& Industrial Specialties ● Industrial ● Contact Center ● Office Clerical | |
| | | | | | | 11$1.5B Revenue(1) | | |
Proxy Summary
EXECUTIVE COMPENSATION HIGHLIGHTS
| | | | | | | 12 | | |
Proposal 1: Election of Directors
PROPOSAL 1 - ELECTION OF DIRECTORS
Under our Restated Certificate of Incorporation, the Board of Directors is to consist of no fewer than five and no more than eleven members, the exact number of Directors to be determined from time to time by the Board. As of the date of the mailing of this Proxy Statement, the number of Directors constituting the whole Board has been fixed at ten. Directors are elected annually forone-year terms. Each of the current Directors is a nominee for election at the Annual Meeting.
Director Independence and Tenure
Our Board of Directors is responsible for overseeing the management of the business of the Company.
On March 7, 2018, our Board affirmatively determined that Directors G.S. Adolph, R.S. Cubbin, J.E. Dutton, T.B. Larkin, L.A. Murphy, and D.R. Parfet, representing a majority of the Board, are independent pursuant to the Nasdaq Global Market listing standards, and that none of them had a material relationship with the Company.
The following table illustrates the tenure of our Director nominees. Director tenure is distributed fairly evenly, resulting in a Board that provides us with both new perspectives and long-standing experience with the Company.
Director Qualifications, Background, and Diversity
The Corporate Governance and Nominating Committee makes recommendations to the Board of Directors regarding the Board’s size and composition. The Committee annually reviews with the Board the composition of the Board as a whole and proposes nominees for election to the Board, with a view towards achieving a Board that has a range of relevant qualifications, skills and experience, outstanding personal attributes and diversity of thought. Recommendations made by the Committee of candidates for consideration as director nominees are based upon specific criteria as well as other considerations that the Committee may from time to time deem appropriate, including the Company’s strategic objectives and Board composition factors such as the balance of independent andnon-independent directors or the need for financial experts on the Audit Committee. The Committee may engage third parties to assist in the search for director candidates or to assist in gathering information regarding a candidate’s background and experience.
Director candidates should possess the following competencies and attributes: the highest personal and professional ethics, integrity and values; a reputation, both personal and professional, for maturity, strength of character, and sound judgment; the ability to comply with the Company’s Code of Business Conduct and Ethics; a high level of accomplishment in his or her respective field; an understanding of the complexities of business organizations and demonstrated leadership skills; and flexibility and independence of thought, with the ability to offer independent opinions in a constructive manner. Director candidates should be leaders with relevant expertise and experience with complex organizations of similar size and global scope –- in the past, the Board has sought active and former chief executive officers, chief operating officers, or substantially equivalent level executive officers of a complex organization such as a corporation, university, or major unit of government, or a professional who regularly advises such organizations. In recognition of the nature of the Company’s business, the Board has also sought to have some directors with experience in the business services industry or human resources and workforce solutions field.
Director candidates must also have financial acumen and the ability to read and understand fundamental financial statements; a willingness to devote sufficient time to become knowledgeable about the Company’s business and to carry out the duties and responsibilities of the office; and an intention to serve a sufficient period of time to make a meaningful contribution to the Board and the Company. Independent director candidates must meet the independence requirements established by Nasdaq and the SEC, and all director candidates must review with the Corporate Governance and Nominating Committee any relationships that might be construed as a conflict of interest. The resulting Board is a diverse body in terms of gender, age, race, ethnic background, and professional experience; and in light of the Company’s status as a controlled company, the Board has given consideration to the representation of the controlling shareholder.
| | | | | | | 13 | | |
Proposal 1: Election of Directors
In 2017, the Corporate Governance and Nominating Committee of the Board initiated a search for an additional independent Director. This search, which was conducted with the assistance of an independent search firm, resulted in the Board’s selection and appointment of Mr. Gerald S. Adolph to the Company’s Board of Directors, effective March 7, 2018.
| | | | | | | Of our 10 Director Nominees:17.8%
GP Rate(1) | | | | | | | | | | | | |  North America
| | | | | | | | |
| | | | | | | | | Kelly International(3) Specialties ● Life Sciences ● IT ● Finance ● Other Local
Professional Niches | | | | 60% are independent
$0.9B Revenue(1) | | 50% are current or
former CEOs | | 15.1% GP Rate(1) | | | | | | | | | | | | EMEA and Mexico | | | | | | | | |
(1) Kelly size and margin profiles are based on 2023 full year results (2) Managed Service Provider (“MSP”); Recruitment Process Outsourcing (“RPO”); Payroll Process Outsourcing (“PPO”) (3) On January 2, 2024, Kelly announced that it completed the sale of its European staffing business within its International operating segment. Following the sale, the remaining business in the International segment was absorbed by the P&I, SET, and OCG segments, and the International segment no longer exists as a reportable segment. | | | | | | | | | Kelly Science, Engineering, Technology & Telecom Specialties ● Engineering ● Science & Clinical ● Technology ● Telecom | | | | $1.2B Revenue(1) | | 50% are women or
ethnically diverse | | 22.8% GP Rate(1) | | | | | | | | | | | |  North America
| | | | | | | | |
| | | | | | | | | Kelly Education Specialties ● K-12 ● Special Ed/Needs ● Tutoring ● Therapy Services ● Higher Education ● Executive Search | | | | $0.8B Revenue(1) | | | | 15.3% GP Rate(1) | | | | | | | | | | | | U.S | | | | | | | | |
| | | | | | | | | Kelly OCG Specialties ● MSP(2) ● RPO(2) ● PPO(2) | | | | $0.5B Revenue(1) | | | | 36.0% GP Rate(1) | | | | | | | | | | | | Global | | | | | | | | |
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Proxy Summary Select Awards and Recognitions We’re the best company for business and talent to work with. We’ve been recognized around the world and across the spectrum for what we do. | | | | | | | | 
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| | 
| | | | Kelly Earns 2024 Military Friendly® Spouse Employer Designation This marks the eighth year of recognition of the workforce solutions provider for its commitment to connecting veterans and their spouses to work in ways that enrich their lives. | | Director ages range
Kelly Receives Excellence in Supplier Diversity Award from 48 to 84
Median age: 63Great Lakes Women’s Business Council
The award honors corporate members that have successfully integrated supplier diversity and have meaningful results in certified Women Business Enterprise (WBE) spend. | | Kelly Named a Top 100 Company for Hybrid Jobs by FlexJobs Based on an analysis of approximately 58,000 companies and their hybrid job posting histories in the FlexJobs database between September 1, 2022, and August 31, 2023. | | | | | 
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| | | | | Kelly Named One of the World’s Best Companies by TIME Magazine TIME and Statista named the 750 companies changing the world, based on a formula of revenue growth, employee-satisfaction surveys, and ESG data, and Kelly is on the list. | | Kelly Named a 2023 MMSDC ACE Award Recipient for Professional Services & Staffing The Michigan Minority Supplier Diversity Council’s ACE awards recognize the best of the minority business community as well as the corporations that advocate and contract with them. | | KellyOCG Named to HRO Today’s EMEA RPO Baker’s Dozen List 2023 KellyOCG named to HRO Today’s EMEA RPO Baker’s Dozen list for the third year in a row. The Customer Satisfaction Ratings are based solely on feedback from buyers of the rated services. | | | | 
| |  | | 
| | | | KellyOCG Named to HRO Today’s APAC RPO Baker’s Dozen List 2023 KellyOCG named to HRO Today’s EMEA RPO Baker’s Dozen list for the third year in a row. The Customer Satisfaction Ratings are based solely on feedback from buyers of the rated services. | | KellyOCG Named to HRO Today Enterprise RPO Baker’s Dozen List 2023 HRO Today is the premier global HR network and content community. The Baker’s Dozen Customer Satisfaction Ratings are based solely on feedback from buyers of the rated services. | | Kelly Named a Global Champion for Supplier Diversity & Inclusion Kelly received the highest level of recognition – platinum – for its commitment to inclusive supplier spending, policies, and procedures for the fifth consecutive year. |
The Corporate Governance
| | | | | | | | | 11 | |
Proxy Summary | | | | | | | | 
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| | | | Kelly Professional & Industrial Named a Contingent Staffing Leader by Everest Group Among the business & professional staffing providers, Kelly earned the highest marks for vision and capability, which measure its ability to deliver services to clients successfully. | | Kelly Engineering Named a Contingent Staffing Leader by Everest Group Among the engineering staffing providers assessed, Kelly earned the highest marks for vision and capability, which measure its ability to deliver services to clients. | | Kelly Technology Named US IT Contingent Staffing Services Major Contender by Everest Group Kelly Technology’s strong capabilities in sourcing IT skills, combined with a diverse industry portfolio, helped to solidify its position as a Major Contender. | | | | 
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| | | | KellyOCG Named a Star Performer, Major Contender on Everest Group’s 2023 RPO PEAK Matrix® KellyOCG’s timely investments in improving its regional coverage, technology capabilities and value-added strategic offerings creates a comprehensive service offering. | | KellyOCG Named Services Procurement Leader, Star Performer on Everest Group’s 2023 PEAK Matrix® KellyOCG’s services procurement portfolio sustained its growth momentum on the back of its consistent efforts to build capabilities across the entire value chain. | | KellyOCG Named Contingent Workforce Management Leader on Everest Group’s 2023 PEAK Matrix® KellyOCG continues to drive value for its clients building on its strong global presence and expertise in catering to diverse client needs across geographies, job categories, and industries. | | | | 
| |  | | 
| | | | Kelly Wins Global Impact Sourcing Award Given by IAOP The prestigious award recognizes organizations that made a significant impact through the practice of intentional employment of people from socio-economically disadvantaged backgrounds. | | Kelly Named to 2023 IAOP Global Outsourcing 100 List The International Association of Outsourcing Professionals (IAOP is the global standard-setting association and advocate for outsourcing professionals and the organizations they support. | | Kelly One of the Largest Staffing Firms Globally Kelly is one of the largest staffing firms globally, according to the 2023 ranking by Staffing Industry Analysts (SIA). |
A complete list of the Company’s awards and Nominating Committee worksrecognitions is available on kellyservices.com. | | | | | | 12 | | | |
Proxy Summary Executive Compensation Highlights 
| ● | | Align pay with performance using balanced performance measures that are linked to strategic business objectives in short- and long-term incentives |
| ● | | Align executive compensation with shareholder returns through performance-based equity incentive awards |
| ● | | Annual review of performance measures and goals for our short- and long-term incentive plans by the independent Compensation and Talent Management Committee to ensure we use diversified measures with challenging, but attainable targets |
| ● | | Require the achievement of a minimum acceptable level of financial performance for any payment to be made pursuant to the Short-Term Incentive Plan (“STIP”) and include caps on payouts |
| ● | | Require stock ownership and retention of a portion of equity-based awards by senior officers |
| ● | | Hold an annual “say-on-pay” shareholder advisory vote on executive compensation |
| ● | | Retain an independent executive compensation consultant to the Compensation and Talent Management Committee |
| ● | | Regular review of executive compensation governance market practices, particularly when considering the adoption of new practices or changes in existing programs or policies |
| ● | | Conduct annual assessments of any potential risks in our incentive compensation programs and policies and related internal controls |
| ● | | Annually review with the Compensation and Talent Management Committee share utilization resulting from our compensation practices |
| ● | | Provide for the forfeiture of equity awards upon certain restrictive covenant breaches and other actions constituting cause for termination |
| ● | | Maintain an insider trading policy that requires directors, senior officers, and other designated officers of the Company to contact our General Counsel and Corporate Secretary prior to sales or purchases of common stock |
| ● | | Maintain a double trigger for the accelerated vesting provisions under the Equity Incentive Plan (“EIP”) and the Senior Executive Severance Plan |
| ● | | Condition severance benefits for senior officers on compliance with restrictive covenants |
| ● | | Provide employment agreements for senior officers (except where standard local practice) |
| ● | | Guarantee bonus arrangements with our senior officers |
| ● | | Allow directors or senior officers to engage in hedging or pledging of Company securities |
| ● | | Allow the repricing or backdating of equity awards |
| ● | | Pay dividend equivalents on restricted stock units before achievement of performance hurdle and completion of vesting period |
| ● | | Pay dividends on performance share awards |
| ● | | Provide tax reimbursements for perquisites or tax gross-ups for excise taxes incurred upon change-in-control |
| ● | | Grant incentive awards to senior officers that are not subject to the Company’s Incentive Compensation Recovery (“Clawback”) Policy |
| ● | | Accrue additional retirement benefits under any supplemental executive retirement plans (“SERPs”) |
| ● | | Provide excessive perquisites |
| | | | | | | | | 13 | |
Proposal 1 – Election of Directors The Board of Directors to determine the appropriate mix of experience, qualifications, skills, and attributes that enable a Director to make significant contributions to the Company. We do not have a formal policy with regard to diversity. However, the Board values diversity highly and takes it into consideration, including diversity in gender, ethnicity, race, and age, as we strive to maintain a Board that is strong collectively in its backgrounds, knowledge, and experience. The following table highlights the breadth of experience that is represented on the Board. A particular Director may possess other skills, knowledge, or experience that is in addition to those noted below. 
Recommended Director Nominees
Listed on the following pages are the names of the persons nominated nine individuals for election as Directorsdirectors at the Annual Meeting, each to serve for one year and until his or her successor is elected and qualified. Each of the Company, all of whom areour director nominees currently Directors of the Company, their ages, principal occupations, other public companies at which they are Directors, occupations held during the past five years (unless otherwise stated, the occupations listed have been held during the entire past five years), and the year in which they first became a Director of the Company.
If a nominee is unavailable for election for any reasonserves on the dateBoard and was elected to a one-year term at the 2023 Annual Meeting of the election of the Director (which event is not anticipated), the persons named in the enclosed form of proxy may vote for the election of a person designated by the Board of Directors or the Board may reduce the number of Directors constituting the whole Board.Shareholders.
Directors will be elected by a plurality of the votes cast by holders of Class B common stockCommon Stock who are present in person, or represented by proxy, and entitled to vote at the Annual Meeting. Withheld votesOur controlling shareholder, the Terrence E. Adderley Revocable Trust K (“Trust K”), has indicated its support and brokernon-votesintention to vote for each of the director nominees. We do not contemplate that any of the nominees will not count towardsbe unavailable to serve at the time of the Annual Meeting. In that event, however, the persons named in the enclosed form of proxy may vote for the election of a nominees’ achievementsubstitute selected by the Board or the Board may reduce its size. Director Independence The Board’s Corporate Governance Principles include guidelines for director independence that conform to the listing standards of plurality.the Nasdaq Global Market (“Nasdaq”) on which the Company’s common stock is listed and provide that a majority of the Board be comprised of independent directors. Annually, Kelly’s Corporate Governance and Nominating Committee evaluates and makes recommendations to the Board concerning the independence of each director and director nominee, evaluating any relationship with the Company or its competitors, suppliers, customers, service providers, or others that might be construed as an actual or potential conflict of interest. On February 14, 2024, our Board affirmatively determined that directors Gerald S. Adolph, George S. Corona, Robert S. Cubbin, Amala Duggirala, InaMarie F. Johnson, Terrence B. Larkin, Leslie A. Murphy, and Donald R. Parfet, representing a majority of the Board, are independent. Board Nominees Each of our director nominees has been recommended for election by our Corporate Governance and Nominating Committee and nominated by our Board. They are seasoned leaders with an array of diverse leadership experience in public and private companies, nonprofit organizations, and other businesses. They represent diverse backgrounds, experiences, skills, personal attributes, and viewpoints. The Board believes that this diversity strengthens the Board’s ability to carry out its oversight role on behalf of Directorsshareholders and is responsible for approving Director nominees basedproud of the Company’s long history of having at least three directors who are women on the recommendationBoard for the past 15 years. While we do not have a formal diversity policy, the Board will continue to build upon its diversity in connection with future Board membership. For each of the nine director nominees standing for election, the following pages set forth certain biographical information, including a description of their principal occupation, business experience, and the primary qualifications, experience, skills, and attributes that the Corporate Governance and Nominating Committee.Committee considered in recommending them as director nominees, as well as the Board committees on which each director nominee will serve as of the 2024 Annual Meeting. The charts on diversity, independence, age, tenure, skills, experience, and attributes assume that all director nominees are elected as directors at the Annual Meeting. Age and tenure for each director nominee is effective as of April 15, 2024. Board Composition The Corporate Governance and Nominating Committee is responsible for identifying and recommending to the Board qualified candidates for Board membership as well as assessing the experience and skills of the Company’s current directors. The Committee regularly reviews the mix of individual qualifications, experience, skills, and attributes of incumbent directors to assess overall Board composition and define Board succession goals. This includes identifying areas of opportunity, specifically concerning the need to refresh the Board with new members with expertise and experience that would enhance the overall strength of the current Board and the ability of the Company to execute its long-term strategic plan. Ongoing strategic Board succession planning ensures that the Board continues to maintain an appropriate mix of objectivity, skills, and experiences to provide fresh perspectives and effective oversight and guidance to management while leveraging the institutional knowledge and historical perspective of our longer-tenured directors. The Committee’s goal is to build an | | | | | | | | | 14 | | 14 | | |
Proposal 1: Election of Directors effective and well-functioning Board with diverse perspectives and viewpoints that is responsive to the current and anticipated needs of the Company and the long-term interests of shareholders. The Committee considers the following core qualifications for Board composition that are critical to the success of our business: | ● | | demonstrated leadership skills and understanding of the complexities of business organizations; |
| ● | | the highest personal and professional ethics, integrity, and values; |
| ● | | objectivity and independence of thought and leadership; |
| ● | | strength of character and sound judgment; |
| ● | | strong interpersonal and communication skills; and |
| ● | | highly accomplished in his or her respective field. |
Director candidates must also have a willingness to devote sufficient time to discharge their duties, taking into consideration principal occupation, memberships on other boards, attendance at Board and committee meetings, and other responsibilities. In addition, director candidates must have an intention to serve an appropriate length of time to make a meaningful contribution to the Company and the Board. Each of our director nominees demonstrates the core qualifications listed here. The Committee also considers specific criteria as provided below, that varies from time to time based on the Company’s current and future priorities and needs, and the balance of the candidate’s experiences, skills, and attributes with those of other members of the Board, as illustrated in our Board Composition Matrix on the next page. As the Company continues to drive profitable growth in its areas of specialization, the Committee considers the following experiences and skills: | ● | | Executive Leadership, experience as a Chairman of the Board, Chief Executive Officer, Chief Operating Officer, or substantially equivalent level executive officer of a complex organization such as a corporation, university, or major unit of government or a professional who regularly advises such organizations. |
| ● | | Transformation, successful leadership of large-scale transformations, including cultural evolutions, restructuring, and enhancing organizational design to improve effectiveness, and drive profitable growth. |
| ● | | Innovation, proven experience turning new ideas and technologies into assets that transform businesses. |
| ● | | Industry, including experience in the staffing or business services industry, the Company’s specialty businesses, or experience in human capital management including talent/workforce solutions; diversity, equity, and inclusion; organizational behavior; and compensation and benefits. |
| ● | | Technology, Digitization, and Cybersecurity, experience in the high-level planning and execution of business initiatives through the use of technology and digitization to build business efficiencies and competitive advantage. |
| ● | | Financial Acumen, the ability to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement. |
| ● | | Financial Expert, including financial and/or accounting expertise, generally, and as necessary to fulfill the financial requirements of NASDAQ and the Securities and Exchange Commission (education and experience as CFO, finance/accounting executive, public accountant or auditor, or person performing similar functions). |
| ● | | Risk Management, experience identifying, evaluating, and managing corporate risk, ability to address and mitigate material risks. |
| ● | | Legal or Corporate Governance, experience with legal issues impacting large organizations and governance and fiduciary matters that impact boards, such as service on public boards and board committees, or as legal or governance executives of other large public companies. |
| ● | | ESG and Sustainability, experience with the development and oversight of an effective corporate responsibility strategy, initiatives, and practices that include social, climate and environmental initiatives. |
| ● | | Mergers & Acquisitions, experience implementing organic and inorganic strategies to promote growth, identifying acquisition and business combination targets, analyzing cultural and strategic fit, and oversight of successful integration. |
In determining whether to recommend a director for re-nomination, the Committee also considers the director’s recent contributions and potential for continuing contributions to the work of the Board. | | | | | | | | | 15 | |
Proposal 1: Election of Directors The Board has not adopted a policy whereby stockholders may recommend nominees to the Board becauseComposition Matrix (2024)
| | | | | | | | | | | | | | | | | | | | | | Director Nominees | | | | | | | | | | | Specific Experience and Skills (May vary
based on current and future Company
priorities/needs) | | Larkin COB | | Quigley CEO | | Adolph Gov Chair | | Corona Dir | | Cubbin Comp Chair | | Duggirala Dir | | Johnson Dir | | Murphy Audit Chair | | Parfet Dir | | | | | | | | | | | Executive Leadership | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | | | | | | | | | | Transformations | | ● | | ● | | ● | | | | ● | | ● | | ● | | ● | | ● | | | | | | | | | | | Innovation | | | | ● | | ● | | ● | | ● | | ● | | ● | | | | ● | | | | | | | | | | | Industry | | | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | | | | | | | | | | Technology, Digitization, and Cybersecurity | | | | ● | | ● | | ● | | | | ● | | ● | | ● | | | | | | | | | | | | | Financial Acumen | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | | | | | | | | | | Financial Expert | | | | | | | | | | ● | | | | | | ● | | | | | | | | | | | | | Risk Management | | ● | | ● | | | | ● | | ● | | ● | | ● | | ● | | | | | | | | | | | | | Legal or Corporate Governance | | ● | | ● | | ● | | | | ● | | ● | | | | ● | | ● | | | | | | | | | | | ESG & Sustainability | | | | ● | | ● | | | | | | ● | | ● | | | | | | | | | | | | | | | Mergers & Acquisitions | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | | | | | | | | Other Public Board Experience (other than Kelly) | | | | | | | | | | | | | | | | | | | | | | | | | Audit Committee | | | | | | ● | | | | ● | | ● | | | | ● | | ● | | | | | | | | | | | Compensation Committee | | | | | | ● | | | | ● | | | | | | ● | | ● | | | | | | | | | | | Governance & Nominating Committee | | | | | | ● | | | | | | | | | | ● | | ● | | | | | | | | | Tenure and Independence | | | | | | | | | | | | | | | | | | | | | | | | | Board Tenure (years) | | 13 | | 4 | | 6 | | 6 | | 9 | | 2 | | 2 | | 16 | | 19 | | | | | | | | | | | Independence | | ● | | | | ● | | ● | | ● | | ● | | ● | | ● | | ● | | | | | | | | | | | Demographics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Age | | 69 | | 62 | | 70 | | 65 | | 66 | | 49 | | 59 | | 72 | | 71 | | | | | | | | | | | Gender Identity | | M | | M | | M | | M | | M | | F | | F | | F | | M | | | | | | | | | | | African American or Black | | | | | | ● | | | | | | | | ● | | | | | | | | | | | | | | | Alaskan Native or American Indian | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Asian | | | | | | | | | | | | ● | | | | | | | | | | | | | | | | | Hispanic or Latinx | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | | | | | | | | | | | | | | | | White | | ● | | ● | | | | ● | | ● | | | | | | ● | | ● | | | | | | | | | | | Two or More Races or Ethnicities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | LGBTQ+ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Did Not Disclose Demographic Background | | | | | | | | | | | | | | | | | | |
| | | | | | 16 | | | |
Proposal 1: Election of the Company’s status as a controlled company. Director Nominees’ BiosDirectors
After a reviewDirector Qualifications and Experience
Out of the individual qualifications and experience of each of our Director nominees and their contributions to our Board, the Board of9 Directors unanimously recommends that stockholders vote “FOR” the election of all Director nominees to serve for theone-year term ending at the Annual Meeting of Stockholders held after the close of the fiscal year ending December 30, 2018. Set forth below are the nominees for election at the 2018 Annual Meeting of Stockholders.
| | | | | | | | | | 9 
| | | | Terence E. AdderleyExecutive Leadership
| | | | Age: 848
Director since: 1962
| | | | Transformations | | | | 7 | | | | Innovation | | | | 8 | | | | Industry | | | | 6 | | | | Technology, Digitization, and Cybersecurity | | | | 9 | | | | Financial Acumen | | | | 2 | | | | Financial Expert | | | | 7 | | | | Risk Management | | | | 7 | | | | Legal or Corporate Governance | | | | 4 | | | | ESG & Sustainability | | | | 9 | | | | Mergers & Acquisitions |
Board Diversity 
| | | | | | | | | 17 | |
Proposal 1: Election of Directors Biographical Information About Director Nominees | | |  | | 
Board Committees:Committees ● None Principal Occupation and Directorships ● Executive Vice President, Business Development, General Counsel and Corporate Secretary, Lear Corporation (2008 - 2020) Education ● Wayne State University Law School, JD cum laude ● Michigan State University, BA (High Honors), Finance Mr. Larkin is an attorney with 28 years of experience in a business law practice. In 2022 he served as chair of the Governance and Nominating Principal Occupation Committee and Directorships:
●in May 2023 he was appointed to serve as Chairman of the Board of Directors, Kelly Services, Inc.
(1998 - present)
Education:
● University of Michigan, MA, Business Administration
● University of Michigan, BA, Business Administration
|
| | | | | Terence E. Adderley has had a distinguished sixty year careerBoard. He retired in the staffing industry with extensive executive management experience including service as the Company’s Chief Executive Officer. He has servedJanuary 2020 as a Directormember of large publicly held companiesthe senior management team of a global manufacturing company with responsibility for legal affairs, internal audit, and numerous civicglobal business development for mergers, acquisitions, and community organizations.joint ventures. Mr. AdderleyLarkin currently serves on the board of three not-for-profit organizations and one for-profit private corporation. He brings to the Board a keen sensevaluable combination of complex problem-solving skills, legal and governance expertise, and global experience.
| | Specific Experience and Skills
● Executive Leadership ● Transformations ● Financial Acumen ● Risk Management ● Legal/Corporate Governance ● Mergers & Acquisitions | | | |
| | |  | | 
Board Committees ● None Principal Occupation and Directorships ● President and Chief Executive Officer, Kelly Services, Inc. (2019 - present) ● Executive Vice President, President of Global Staffing and General Manager of IT, Global Service, and Global Business Services, Kelly Services, Inc. (2017 - 2019) ● Senior Vice President, General Counsel, Chief Administrative Officer and Assistant Secretary, Kelly Services, Inc. (2015 - 2017) Education ● National Law Center at George Washington University, JD ● University of Michigan, BA Mr. Quigley was appointed President and Chief Executive Officer of Kelly in October 2019. He has more than 20 years of experience in a variety of roles at Kelly and has served as an officer of the staffing industry, economicCompany since 2004. Prior to joining Kelly, Mr. Quigley held a variety of roles at Lucent Technologies and labor trends,AT&T Corporation. Mr. Quigley also serves on the Boards of the American Staffing Association, Detroit Regional Chamber, Business Leaders for Michigan, and fiscal conservatism.the Detroit Economic Club. He is a memberbrings to the Board his leadership experience and extensive knowledge of the Company’s founding familybusiness. | | Specific Experience and represents its interests as the controlling stockholder.Skills
● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● Legal/Corporate Governance ● ESG/Sustainability ● Mergers & Acquisitions | | | |
| | | | | 
| | | | | | | | Carol M. Adderley
Age: 58
Director since: 2010
| | Board Committees:
● Governance and Nominating (Vice Chair)
Principal Occupation and Directorships:
● Writer and Researcher in the Humanities
Education:
● University of Iowa, MA, English Literature
● University of Chicago, AM, General Studies in
Humanities, Literature and Social Change
● University of Western Ontario, BA (Honors), English
and Philosophy
|
| | | | | Carol M. Adderley is the daughter of Terence E. Adderley, the controlling stockholder, and the granddaughter of W. R. Kelly, the Company’s founder. It is the opinion of the Board of Directors that it is in the best interests of the Company to have a representative of the next generation of the Adderley family serve as a Director of the Company. Ms. Adderley holds advanced degrees in the humanities and is a published author.
18 | | |
| | | | | | | 15 | | |
Proposal 1: Election of Directors | | | | | | 
 | | 
Gerald S. AdolphBoard Committees
Age: 64● Audit
Director since: 2018
| | ● Compensation and Talent Management Board Committees:
● None Corporate Governance and Nominating (Chair) Principal Occupation and Directorships:Directorships ● Director, andCo-Chair, NAACP Legal Defense and Education Fund (1998 - present) ● Director, Cintas Corporation (2006 - present) ● Director Abt Associates (2020 - present) ● Board Chair, Cardinal Spellman High School Board (2022 - present) ● Trustee, Cardinal Spellman High School Board (2010 - present)2022) ● Senior Partner and other executive positions, Booz & Co. (1981 - 2016) Education:Education
● Harvard Business School, MBA ● Massachusetts Institute of Technology, MS, Chemical Engineering ● Massachusetts Institute of Technology, BS, Management Science (Concentration in Organizational Psychology) ● Massachusetts Institute of Technology, BS, Chemical Engineering |
| | | | | Gerald S.Mr. Adolph was appointed to Kelly’sjoined our Board of Directors onin March 7, 2018. He brings2018 with him over 35 years of experience in growth strategy, mergers and acquisitions, and technology-driven industry changes. He also has governance experience through his past service on the board of Booz & Co. and current service on the boards of Cintas Corp., where he is chair ofchairs the compensation committee, and the NAACP Legal Defense and Education Fund, whichwhere heco-chairs. served as co-chair from 2011 to 2021. Mr. Adolph is a founding board member of Black Economic Alliance and served as a director from 2017 to 2020. He also serves on the board of Abt Associates. His extensive business expertise, strategic perspective, and strong leadership skills make him a valued contributor to the Board.
| | Specific Experience and Skills
● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Legal/Corporate Governance ● ESG/Sustainability ● Mergers & Acquisitions | | | | | | | | | | |
| | | | | | 
 | | 
George S. CoronaBoard Committees
Age: 59
Director since: 2017
| | Board Committees:
● None Principal Occupation and Directorships:Directorships ● President and Chief Executive Officer, Kelly Services, Inc. (2017 - present)(2017-2019) ● Executive Vice President and Chief Operating Officer, Kelly Services, Inc. (2009 - 2017) Education:Education
● Oakland University, MBA ● Wayne State University, BSBA |
| | | | | George S.Mr. Corona was named presidentserved as President and chief executive officerChief Executive Officer of Kelly Services infrom May 2017 afteruntil his retirement in September 2019. He had more than 20 years of experience in a variety of executive roles with Kelly, including eight years as Executive Vice President and Chief Operating Officer. Prior to joining Kelly in 1994, Mr. Coronahe held management roles at Digital Equipment Professional Services Group and Burroughs Corporation. Mr. Corona also serves on the boards of several not-for-profit organizations. He brings to the Board significant knowledge of the Company and executive leadership experience.
| | Specific Experience and Skills
● Executive Leadership ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● Mergers & Acquisitions | | | |
| | | | | | | | | | 16 | 19 | | |
Proposal 1: Election of Directors | | | | | | 
 | | 
Robert S. CubbinBoard Committees
Age 60● Audit
Director since: 2014
| | ● Compensation and Talent Management (Chair) Board Committees:
● Audit ● Compensation (Chair)
● Corporate Governance and Nominating
Principal Occupation and Directorships:Directorships ● Director, Huntington Bancshares Incorporated (2017 - present)– 2023) ● Director, First Merit Corporation (2013 -– 2017) ● President and Chief Executive Officer, Meadowbrook Insurance Group, Inc. (2002 -– 2016) Education:Education
● Detroit College of Law, JD ● Wayne State University, BA, Psychology |
| | | | | Robert S.Mr. Cubbin is an attorney withthirty-one 31 years of experience in insurance law. In 2016, he retired as President and Chief Executive Officer following a 30-year career with Meadowbrook Insurance Group. He previously served on the board of an insurance company. He serves as a Directordirectors of one otherthree large publicly held company. His extensive expertisecompanies. Mr. Cubbin is an experienced director with broad-ranging experience in legal, insurance, management, accounting, actuarial, investment, underwriting, reinsurance, and claimsclaims. The Board determined that Mr. Cubbin qualifies as an “audit committee financial expert” within the meaning of applicable SEC regulations.
| | Specific Experience and Skills
● Executive Leadership ● Transformations ● Innovation ● Industry ● Financial Expert ● Risk Management ● Legal/Corporate Governance ● Mergers & Acquisitions | | |
| | |  | | 
Board Committees ● Audit ● Corporate Governance and Nominating Principal Occupation and Directorships ● Executive Vice President and Chief Information Officer, United Services Automobile Association (USAA) (2022 – present) ● Senior Executive Vice President, Chief Operations and Technology Officer, Regions Financial Corporation (2017 – 2021) ● Director, Innovation Depot (2021) ● Director, Regions Bank (2019 – 2022) ● Director, Techbridge, Inc. (2016 - 2020) Education ● Columbia University, MS, Technology Management ● University of Nebraska at Omaha, MBA, International Business ● Osmania University, BS, Electronics and Communications Engineering Ms. Duggirala joined our Board in January 2022 with more than 24 years of leadership experience are an assetwith global organizations. She is a renowned digital transformation and technology strategist with skills in large-scale strategic product delivery, technical innovation, and complex financial management. She brings to the Company’s Board.Board a wealth of knowledge in integrations, strategic planning, product development, operations, engineering, data management, and cybersecurity. Ms. Duggirala has significant cybersecurity experience from working in a variety of information technology and data analytics roles, including Chief Operations and Technology Officer at Regions Bank and Chief Technology Officer at other large fintech firms. In 2022, Ms. Duggirala received the esteemed Outstanding 50 Asian Americans in Business Award. | | Specific Experience and Skills
● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● Legal/Corporate Governance ● ESG/Sustainability ● Mergers & Acquisitions | | | | | |
| | | | | | 20 | | | |
Proposal 1: Election of Directors | | | | | | 
 | | 
Jane E. DuttonBoard Committees
Age: 65● Compensation and Talent Management
Director since: 2004
| | Board Committees:
● Compensation ● Corporate Governance and Nominating (Chair)
Principal Occupation and Directorships:Directorships ● Robert L. Kahn Distinguished President and CEO, IMJ Consulting, LLC (2023 - present) ● Chief People and Diversity Officer, Zendesk, Inc. (2018 - 2022) ● Senior Vice President and Chief Human Resources Officer, Plantronics, Inc. (2015 - 2018) ● Director, Entrepreneurship for All (EforAll) (2020 – present) ● Member of CNBC’s Workforce Executive Council (2021 – present) Education ● John F. Kennedy University, Professor Emeritus of Business AdministrationMA, Organizational Development and Psychology, TheManagement ● University of Michigan Business School (2017 - present) ● Robert L. Kahn Distinguished University Professor of Business Administration and Psychology, The University of Michigan Business School (2007 - 2017)California, BA, Social Sciences (Emphasis in Human Resources Management)
Education:
● Northwestern University, Ph.D.Ms. Johnson joined our Board in January 2022 with more than 30 years of experience in strategy transformation, human capital management, and MA, Organizational Behavior
● Colby College, BA Sociology
|
| | | | | Jane E. Duttonoperational excellence in multiple industries. She is an expertaccomplished human capital transformational leader championing initiatives that transform the mindsets and behaviors that shape a culture. Ms. Johnson has extensive human capital management experience acquired from her previous HR leadership roles with several large organizations. Her expertise in the field of organizational behaviordevelopment and has researched and published numerous works on best practices related to engagement, commitment, and productivity of employees. Her understanding of factors contributing to organizational excellencemanagement provides the Board with a vital perspectivefundamental view on the Company’s mission to be the world’s best workforce solutions company.employee experience, talent acquisition, development, and diversity, equity, and inclusion. Ms. Johnson was recognized by The California Diversity Council as one of California’s Most Powerful & Influential Women.
| | Specific Experience and Skills
● Executive Leadership ● Transformations ● Innovation ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Risk Management ● ESG/Sustainability ● Mergers & Acquisitions | | | | | | | | |
| | | | | | | | 17 | | |
Proposal 1: Election of Directors
| | | | | 
 | | 
Terrence B. LarkinBoard Committees
Age: 63● Audit (Chair)
Director since: 2010
| | Board Committees:
● Audit (Vice Chair) ● Compensation and Talent Management
Principal Occupation and Directorships:Directorships ● Executive Vice President, Business Development, General Counsel and Corporate Secretary, Lear Corporation (2008 - present) Education:
● Wayne State University Law School, JD cum laude
● Michigan State University, BA (High Honors), Finance
|
| | | | | Terrence B. Larkin is an attorney with twenty-eight years of experience in a business law practice. He is currently a member of the senior management team of a global manufacturing company with responsibility for legal affairs, internal audit, and global business development for mergers, acquisitions, and joint ventures. He brings to the Board a valuable combination of complex problem solving skills and global experience.
| | |
| | | | | 
| | Leslie A. Murphy
Age: 66
Director since: 2008
| | Board Committees:
● Audit (Chair)
● Compensation (Vice Chair)
Principal Occupation and Directorships:
● President and CEO, Murphy Consulting, Inc. (2008 - present)
● Certified Public Accountant ● Member of AICPA’s Governing Council (2008(2000 - present) ● Member of NACD Advisory Councils on Audit Committee Issues and Risk Oversight (2012 - present) ● Director, Detroit Legal News Company (2012 - present) ● Director, Loop Industries, Inc. (2017 - present)
Education:Education
● University of Michigan, BA,BBA, Accounting |
| | | | | Leslie A.Ms. Murphy is a certified public accountant, former chair of the American Institute of Certified Public Accountants, and former Group Managing Partner of Plante & Moran, LLP, a major independent registered publicnational accounting firm. The Board has determined that Ms. Murphy qualifies as an “audit committee financial expert” within the meaning of applicable SEC regulations and has the leadership skills to chair the Audit Committee. She brings to the Board analytical capability, understanding of the economics and strategic elements of business, and expertise in enterprise risk management.management and cyber security. In honor of her dedication to the highest standards of director education and ongoing learning, Ms. Murphy has received both the NACD Directorship Certification and the American Institute of Certified Public Accountants’ (AICPA) Cybersecurity Fundamentals for Finance and Accounting Professionals certification.
| | Specific Experience and Skills
● Executive Leadership ● Transformations ● Industry ● Technology/Digitization/ Cybersecurity ● Financial Acumen ● Financial Expert ● Risk Management ● Legal/Corporate Governance ● Mergers & Acquisitions | | | | |
| | | | | | | | | | 18 | 21 | | |
Proposal 1: Election of Directors | | | | | | 
 | | 
Donald R. ParfetBoard Committees
Age: 65
Director since: 2004
| | Board Committees:
● Lead Director ● Audit
● Compensation
● Governance and Nominating None
Principal Occupation and Directorships:Directorships ● Managing Director, Apjohn Group, LLC (2001 - present) ● General Partner, Apjohn Ventures Fund (2003 - present) ● General Partner, Apjohn Ventures Annex Fund (2010 - 2022) ● Director, Rockwell Automation, Inc. (2008 - present) ● Director, MASCO Corporation (2012 - present) ● Director, Sierra Oncology Inc. (2015 - present)2019) Education:Education
● University of Michigan, MBA, Finance ● University of Arizona, BA, Economics |
| | | | | Donald R.Mr. Parfet ourserved as Chairman of the Board from 2018 – 2023 and served as the Board’s Lead Director sincefrom 2012 has extensive financial and operating experiences as an executive with responsibilities for numerous global businesses.– 2018. He nowcurrently leads a business development company and a venture capital firmsfirm focused on the development of emerging medicines. He also serves as a Directordirector of two large publicly held companies and as the Chairmanis a director and Trustee of the Board of a small publicly held company. Heseveral charitable and civic organizations. Mr. Parfet brings to the Board globalextensive financial and operating experience strong financial background,as an executive with responsibilities for numerous global businesses.
| | Specific Experience and proven leadership capabilities.Skills
● Executive Leadership ● Transformations ● Innovation ● Industry ● Financial Acumen ● Legal/Corporate Governance ● Mergers & Acquisitions | | | | |
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| | | | | 
| | Hirotoshi Takahashi
Age: 48
Director since: 2015
| | Board Committees:
● None
Principal Occupation and Directorships:
● Director, Deputy Vice President and COO, Persol Holdings Co., LTD. (2013 - present)
● Representative Member, Godo Kaisha Yamashiroya, (2010 - present)
● Vice President, Japan Association of HR Services Industry (2012 - 2016)
Education:
● Waseda University, BA, Department of Literature, Oriental History
|
| | | | | Hirotoshi Takahashi serves as Deputy Vice President and Chief Operating Officer of Persol Holdings Co., LTD., which is listed on the Tokyo Stock Exchange. Persol Holdings Co., LTD. and the Company entered into a strategic alliance in 2010. Mr. Takahashi has been designated to serve as Persol Holdings Co., LTD.’s representative on the Company’s Board of Directors pursuant to that alliance. Mr. Takahashi has deep knowledge of the staffing industry and Asia Pacific markets.
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Corporate Governance Compliance with Nasdaq Independence Standards for Non-Controlled Companies CORPORATE GOVERNANCE
UnderNasdaq, where the listing standardsCompany’s common stock is listed, established exemptions from its governance requirements for “controlled companies,” defined as companies in which a single person, entity, or group holds more than 50% of the Nasdaq Global Market, we are deemedvoting power for the election of its directors. The Company is a “controlled company” because Trust K, discussed below, has the power to vote approximately 94.5% of the Company’s outstanding shares of Class B Common Stock.
In keeping with the Company’s historic recognition of the importance of having a majority of independent directors, the Company elected to comply voluntarily with all the Nasdaq listing standards that otherwise do not apply to controlled companies. Thus, a majority of the Board are independent directors and all members of the three Board Committees, Audit, Compensation and Talent Management, and Corporate Governance and Nominating, are independent. Prior to his death in October 2018, Terence E. Adderley, our former Chairman, was the trustee of Trust K. Upon his death, Trust K became irrevocable and, in accordance with the provisions of the trust, Andrew H. Curoe, David M. Hempstead, and William U. Parfet were appointed as successor trustees (the “co-trustees”). The co-trustees act by a majority vote when making investment decisions with respect to the voting shares held by Trust K. The co-trustees, acting as a majority, have sole voting and investment authority over Trust K and cannot be removed or replaced by the beneficiaries of Trust K. William U. Parfet, a co-trustee, is the brother of Donald R. Parfet, director and former Chairman of the Board. In determining that Donald R. Parfet is an independent director, the Board considered, among other things, that Donald R. Parfet and William U. Parfet are financially independent of one another, that the co-trustees are required to act by majority vote and that none of the co-trustees serves as an officer or director of the Company or has any personal financial interest in Trust K that could benefit from actions taken by the Board. Role of the Board of Directors The Board bears responsibility for the oversight of management on behalf of shareholders to ensure long-term value creation. The Board oversees and provides guidance for the Company’s business, property, and affairs. On an ongoing basis, the Board oversees management’s development and implementation of the Company’s strategy and business planning process, and monitors performance relative to the achievement of those plans. The Board sets the tone at the top to support a corporate culture that emphasizes ethical standards, professionalism, integrity, and compliance. The Board and its committees consider long-range strategic issues and material risks facing the Company, together with management’s actions to address and mitigate these risks; oversee corporate policies and processes to promote and maintain the integrity of the Company’s financial reporting and controls, legal and ethical compliance, and relationships with customers and suppliers; review the Company’s environmental, social and governance (“ESG”) and sustainability practices and strategies; and provide oversight relative to the compensation of senior management, leadership development, and management succession planning. As part of its oversight of the strategic direction of the Company, senior leadership presents to the Board at the beginning of each year the annual business plans for each business unit and the consolidated annual business plan for the Company as a whole. At each subsequent meeting throughout the year, management shares quarterly performance results for each business unit and the whole Company, and the Board benchmarks these outcomes to the annual plans. Each year, the Board engages in a two-day offsite strategic planning meeting with management where it conducts a comprehensive review and discussion of the Company’s strategic direction and goals over the short-, medium-, and long-term, as well as management’s plans to achieve such goals. At least twice each year, the business unit presidents provide an in-depth review and update of their businesses to the Board, which includes a review of the strategic goals of the business and business performance relative to business strategy. Board Leadership and Governance Structure The Company’s Board structure affords independent Board leadership and the flexibility to ensure a diverse, independent and effective Board. At the present time, the roles of the Chairman of the Board of Directors, and certain trusts of which he acts as trustee orco-trustee, have voting power with respect to more than fifty percent of our outstanding voting stock. As such, the Company may avail itself of exemptions relating to the independence of the Board, the Compensation Committee, and the nominating process. Although we are a controlled company, the Company’s approach to leadership is intended to serve the interests of all stockholders, and the Company has historically recognized the importance of having a Board composed of a majority of independent Directors. Despite the availability of controlled company exemptions, a majority of our Board is independent and we maintain an independent Audit Committee and Compensation Committee. In addition, our Corporate Governance and Nominating Committee is majority independent.
Recent Governance Review
In the fall of 2017, the Board formed a special committee consisting of the independent Directors to review and make recommendations to the Board about governance matters, including the responsibilities of the independent Directors, Board leadership, and governance best practices. In March 2018, upon recommendation of the special committee, and with the support of Mr. Adderley, the Board adopted amendments to the Company’s Corporate Governance Principles to, among other things, reallocate certain leadership responsibilities from the Executive Chairman and Chairman of the Board (a position held by Mr. Adderley, the Company’s controlling stockholder) to the Lead Director and the Chief Executive Officer. Commensurate changes were made to the title and compensation of that position. Upon recommendation of the special committee, the Board also adopted Amended and Restated Bylaws effective March 7, 2018 (as disclosed in the Company’s Current Report on Form8-K filed with the SEC on March 9, 2018), and, subject to stockholder approval, an Amended and Restated Certificate of Incorporation (Proposal 3) and a further amendment to the Bylaws to designate the Delaware Chancery Court as the exclusive forum for certain legal actions involving the Company in the event they were to arise (Proposal 4).
Board Leadership and Governance Structure
The Company’s leadership is now vested in a Chairman of the Board of Directors (a position held by Mr. Adderley, the Company’s controlling stockholder), a Lead Director to provide independent leadership, and the Chief Executive Officer subjectare separate, with the Chairman being an independent director, which provides independent Board leadership and allows the Chief Executive Officer to the overall authority of the Board.
Our Chairman of the Board is a member ofconcentrate on the Company’s founding family and has given, to date, 60 years of dedicated service to the Company, including many years as its Chief Executive Officer. In his rolebusiness. Terrence B. Larkin serves as Chairman of the Board Mr. Adderley contributes his deep knowledge of the Company and the staffing industry, and champions the values that have been integral to the Company’s culture since its founding: a commitment to the people of the Company – both our employees and the workers we place throughout the world; ethical business practices; and strong corporate governance.Peter W. Quigley serves as Chief Executive Officer.
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Corporate Governance The Chairman of the Board’s duties include consulting with and advising our Chief Executive Officer, reviewing the agendas for Board meetings, presiding over meetings of the Board and, together with our Chief Executive Officer, presiding over meetings of stockholders. As longshareholders. The Chairman of the Board’s duties also include providing effective leadership to the Board including ongoing monitoring of its performance, compliance with governance requirements and best practices, serving as liaison among the Chief Executive Officer and the independent directors, establishing the annual schedule for Board meetings (in consultation with the Chief Executive Officer), developing and approving agendas for Board meetings, working with the Chief Executive Officer to ensure that information flows to the Board to facilitate understanding of, and discussion regarding, matters of interest or concern to the Board, approving the information sent to the Board for meetings, establishing the schedule and agendas for and presiding over meetings of the independent directors in executive session, providing feedback to the Chief Executive Officer on those executive sessions, authority to call and preside over special meetings of the Board, and facilitating discussions among directors on key issues outside of Board meetings. In the event that the Chairman of the Board is not an independent Director, as is currentlydirector, the case, the independent Directors are required under ourCompany’s Corporate Governance Principles toprovide that the independent directors will elect one of the independent Directors as Lead Director. The Lead Director’s principal duties are to ensure the Board functions independent of management,their number to serve as liaison among the Chairman of the Board, the Chief Executive OfficerLead Director and the independent Directors, to establish the schedule for Board meetings (in consultation with our Chairman of the Board and Chief Executive Officer), to assist in the development of and to approve the agendas for Board meetings, to approve the information sent to the Board for meetings, to preside at meetings of the Board of Directors in the absencefulfill many of the Chairman of the Board, to establish the schedule and agendas for and to preside over meetings of the independent Directors in executive session and to provide feedback to the Chairman of the Board and the Chief Executive Officer on those executive sessions, to facilitate discussions among independent Directors on key issues outside Board meetings, and to be available for consultation with the Chairman of the Board and Chief Executive Officer.Board’s current responsibilities.
The Chief Executive Officer is responsible for managing the business and affairs of the Company, subject to the oversight of the Board. The Chief Executive Officer’s duties include leadinginclude: providing leadership to the Company’s management team,team; developing and presenting to the Board the Company’s strategy and long-term plans, medium-term plans and annual budgets, and within this framework, the performance of the business; complying with legal and corporate governance requirements, making recommendations on the appointment and compensation of executive officers, management development, and succession planning; representing the Company externally,externally; consulting with the Chairman of the Board about developments in the Company,Company; and communicating with all Directorsdirectors about key issues outside of Board meetings. Committees of the Board | | | | | | | 20 | | |
The Board has established three standing committees: Audit Committee, Compensation and Talent Management Committee, and Corporate Governance and Nominating Committee. Each committee functions under a written charter adopted by the Board, which is available on the Company’s website at kellyservices.com or to any shareholder who requests a copy. The members, responsibilities, and the number of meetings each of these committees held in 2023 are shown below. | | | | | | | | | | | Board of Directors
Majority IndependentChairman of the Board: Terence E. Adderley
Lead Director: Donald R. Parfet
 | | Audit Committee All Independent | |  | | Compensation and Talent Management Committee
All Independent | |  | | Corporate Governance and
Nominating Committee
Majority All Independent |
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Corporate Governance Committees of the Board
The full text of our Board’s Corporate Governance Principles and the charters of the Board’s three standing committees, which are the Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee, are available on the Company’s website atkellyservices.com.The following table sets forth the Board committees and the current members of each.
| | | | | | | | | | | | | | | | | | | Audit | | Compensation | | Governance and
Nominating | Terence E. Adderley | | | | | | ✓ | Carol M. Adderley | | | | | | Vice Chair | Gerald S. Adolph * | | | | | | | George S. Corona | | | | | | | Robert S. Cubbin * | | ✓ | | Chair | | ✓ | Jane E. Dutton * | | | | ✓ | | Chair | Terrence B. Larkin * | | Vice Chair | | ✓ | | | Leslie A. Murphy * | | Chair | | Vice Chair | | | Donald R. Parfet * (Lead Director) | | ✓ | | ✓ | | ✓ | Hirotoshi Takahashi | | | | | | | Number of Meetings Held in Fiscal Year 2017 | | 5 | | 6 | | 6 |
| | | | | | | | | Key Responsibilities: ● Oversees and reports to the Board with respect to the quality, integrity, and effectiveness of the Company’s financial statements, accounting, and financial reporting processes, and audits of the financial statements and internal controls over financial reporting ● Appoints, compensates, and evaluates the qualifications, independence, and performance of the independent auditor ● Oversees the performance of the internal audit function, including the Chief Audit Executive (“CAE”) ● Oversees the Company’s Enterprise Risk Management Program ● Reviews and discusses with management the Company’s major financial, security, and cybersecurity risk exposures, artificial intelligence and the steps management take to monitor and control such exposures ● Monitors the Company’s compliance with legal and regulatory requirements ● Oversees sustainability/ESG disclosures, controls, processes, and assurance ● Reviews and approves related party transactions ● Serves as the Company’s Qualified Legal Compliance Committee with respect to reports of potential material violations by the Company or its officers, directors, employees, or agents, of applicable U.S. federal or state law or fiduciary duty arising under such law, and of the Company’s policies including the Code of Business Conduct and Ethics ● Reviews and approves Internal Audit’s budget and resource plan ● Regularly holds separate sessions with Kelly’s management, internal audit, and its independent auditor The Board unanimously determined that each member of the Audit Committee meets Nasdaq’s “financial sophistication” requirements and that Mr. Cubbin and Ms. Murphy each has the financial education and experience to qualify as an “Audit Committee financial expert” within the meaning of SEC regulations. | | | | | | | | | | | * | | | | Members: All Independent Director ● Leslie A. Murphy
(Chair) ● Gerald S. Adolph ● Robert S. Cubbin ● Amala Duggirala Meetings in 2023: 4 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Compensation and Talent Management Committee | | | | | | | | | | | | | | | | | | Key Responsibilities: ● Develops the Company’s compensation philosophy ● Designs and administers the Company’s executive compensation programs and policies aligned with business and compensation objectives ● Determines annually, for senior officers (including the CEO), corporate and business unit goals and establishes the level of performance that must be achieved for each ● Evaluates and determines the compensation of the CEO, senior officers, and Section 16 officers ● Reviews stock ownership requirements for senior officers and Board members and compliance with the requirements ● Reviews and makes recommendations to the Board concerning director compensation ● Reviews and advises the Board concerning CEO and senior officer succession planning and developmental opportunities | | | | | | | | | | | | | | Members: All Independent ● Robert S. Cubbin
(Chair) ● Gerald S. Adolph ● InaMarie F. Johnson ● Leslie A. Murphy Meetings in 2023: 4 | | | | | | | | | | | | | | | | | | |
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Directors are expected to attend the Annual Meeting of the Stockholders, all Board meetings, and all meetings of the committees on which they individually serve. The Board held nine meetings during 2017. Seven of the nine Directors then in office attended the 2017 Annual Meeting of Stockholders. Director attendance averagedninety-two percent of the aggregate number of meetings of the Board of Directors and the committees on which they served during 2017. Only Mr. Takahashi, who resides in Japan, attended fewer than seventy-five percent of the aggregate number of meetings of the Board of Directors. He does not serve on any committee. The independent Directors met in executive sessions at which only they were present at least eight times during 2017 as well as met as part of the Special Committee at least four times during 2017.
Audit Committee
The Audit Committee is composed of R.S. Cubbin, T.B. Larkin (Vice Chair), L.A. Murphy (Chair), and D.R. Parfet, all of whom are independent Directors. The Audit Committee held five meetings in 2017. The Audit Committee’s purpose is to oversee the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company. The Audit Committee’s responsibilities are detailed in its charter and include: monitoring the integrity of the Company’s financial statements, accounting and financial reporting processes, and financial statement audits; the qualifications, independence, and performance of the Company’s independent registered public accounting firm; the qualifications and performance of the Company’s Internal Audit group; the Company’s compliance with legal and regulatory requirements; and the Company’s Enterprise Risk Management program that includes systems of disclosure controls and procedures, internal controls over financial reporting, and compliance with ethical standards adopted by the Company.Corporate Governance
| | | | | | | | | ● Reviews and makes recommendations to the Company’s ESG Strategy and related risk management policies and procedures relative to human capital management ● Appoints, compensates and oversees the work performed by an independent compensation or legal advisor ● Oversees the Company’s strategies, initiatives, and programs related to human capital management and determines their effectiveness, including with respect to diversity, equity, and inclusion, workplace and culture, benefits and well-being, employee engagement, performance management, and talent recruitment, development, and retention Compensation and Talent Management Committee Interlocks and Insider Participation During 2023, none of the Company’s executive officers served on the Board of Directors of any entities whose directors or officers served on the Company’s Compensation and Talent Management Committee. No current or past executive officers of the Company or its subsidiaries serve on the Compensation and Talent Management Committee. | | | 21 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Corporate Governance and Nominating Committee | | | | | | | | | | | | | | | | | | Key Responsibilities: ● Develops and oversees compliance with the Company’s Corporate Governance Principles ● Reviews and makes recommendations to the Board with respect to corporate governance matters generally ● Engages in succession planning for our Board of Directors ● Makes recommendations to the Board regarding the size, composition, and leadership structure of the Board and its committees ● Identifies and assesses the independence, backgrounds, and skills required for members of the Board and Board committees ● Identifies, considers, and recommends, consistent with criteria approved by the Board, qualified candidates for election as directors, including the slate of directors to be nominated by the Board for election at the Company’s Annual Meeting ● Oversees the orientation and education of new directors ● Facilitates the annual assessment of the performance of the Board and its committees, as well as the director peer review ● Oversees and periodically reports to the Board on matters concerning the Company’s Corporate ESG Strategy including corporate responsibility and sustainability performance ● Reviews and makes recommendations to the Board regarding corporate governance trends, best practices, and regulations applicable to the corporate governance of the Company | | | | | | | | | | | | | | Members: All Independent ● Gerald S. Adolph
(Chair) ● Robert S. Cubbin ● Amala Duggirala ● InaMarie F. Johnson Meetings in 2023: 4 | | | | | | | | | | | | | | | | | | |
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Corporate Governance The Audit Committee approves (or ratifies fee adjustments onpre-approved services approved under authority delegated to the Chief Financial Officer (“CFO”)) all audit, audit related, internal control related, tax,Risk Governance and permittednon-audit services of the independent registered public accounting firm prior to engagement. The Audit Committee also serves as the Company’s Qualified Legal Compliance Committee.Oversight
The Board has unanimously determined that R.S. Cubbin, T.B. Larkin, L.A. MurphyRisk is inherent in business, and D.R. Parfet each have the financial education and experience to qualify as an “Audit Committee financial expert” within the meaning of SEC regulations and as such meet the “financial sophistication” requirements under current Nasdaq Global Market listing standards.
Compensation Committee
The Compensation Committee’s current members are R.S. Cubbin (Chair), J.E. Dutton, T.B. Larkin, L.A. Murphy (Vice Chair), and D.R. Parfet, all of whom are independent Directors. The Compensation Committee is charged with developing the Company’s compensation philosophy and establishing and monitoring compensation programs for all employees. The Compensation Committee held six meetings in 2017.
The Compensation Committee determines the compensation of the CEO and, taking into account the CEO’s recommendations, determines the compensation for all Senior Officers, which includes all officers as defined inSection 16a-1(f) of the Securities Exchange Act of 1934 (the “Exchange Act”).. The Compensation Committeewhile management is responsible for managing risk, the administration of base salaries, short-term incentive awards under the Company’s Short-Term Incentive Plan (“STIP”),Board’s oversight, assessment, and long-term incentive awards under the Company’s Equity Incentive Plan (“EIP”) for Senior Officers. Our thirteen current Senior Officers are listed under Kelly Leadership on the Company’s website atkellyservices.com. The authority of the Compensation Committee is detaileddecisions regarding risks occur in its charter.
To assist the Compensation Committee in making compensation recommendations for Senior Officers, the Company’s Executive Compensation group provides the Compensation Committeeconjunction with historical, survey, and benchmark compensation data. The Compensation Committee also relies on the CEO and the other Named Executive Officers to provide performance evaluations and compensation recommendations to assist in its decisions regarding the total compensation of Senior Officers. The Compensation Committee has delegated to the CEO the authority to approve salary recommendations and incentive awards to the Company’s Officers below the Senior Officer group who are not subject to Section 16 of the Exchange Act.
The Compensation Committee has the authority to retain independent consultants. Retained consultants report directly to the Compensation Committee, which determines the consultants’ scope of work and fees. In 2017, the Compensation Committee retained Pay Governance LLC (“Pay Governance”) to provide assistance with the review of Executive and Director compensation. The Compensation Committee conducted an assessment of Pay Governance’s independence using factors established by the SEC and Nasdaq Global Market, and affirmed the independence of Pay Governance.
Compensation Committee Interlocks and Insider Participation
During 2017, none of the Company’s Executive Officers served on the Board of Directors of any entities whose Directors or Officers served on the Company’s Compensation Committee. No current or past Executive Officers of the Company or its subsidiaries serve on the Compensation Committee.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee, whose current members are C.M. Adderley (Vice Chair), T.E. Adderley, R.S. Cubbin, J.E. Dutton (Chair), and D.R. Parfet, held six meetings during 2017. The Corporate Governance and Nominating Committee’s responsibilities include: assisting the Board of Directors in identifying individuals qualified to become Directors; recommending to the Board the nominees for the next Annual Meeting of Stockholders or to otherwise fill vacancies and newly created directorships; overseeing the composition, organization, and governanceactivities of the Board and its committees; overseeing an annual evaluation of Board and committee effectiveness; developing and overseeing compliance with the Board’s Corporate Governance Principles; and advising and making recommendations to the Board with respect to corporate governance matters.committees.
Risk Governance and Oversight The Board’s oversight responsibilities include consideration of strategic issues and risks to the Company as well as management’s actions to address and mitigate those risks. Through its charter, the Audit Committee is charged by the Board with overseeing the Company’s risk assessment and enterprise risk management processes. The Audit Committee and Board focus on risk management strategy and risks of greatest significance, and seek to ensure that risks assumed by the Company are consistent with the Company’s risk tolerance and risk appetite. Responsibilities
| | | | | Board of Directors | | | Oversees mission critical risks to the Company, including strategic issues and risks, as well as management’s actions to address and mitigate those risks. The Board receives reports at regular Board meetings from the committee chairs regarding committees’ risk oversight activities. These reports and Board attention focus on risk management strategy and risks of greatest significance and seek to ensure that risks assumed by the Company are consistent with the Company’s risk tolerance and risk appetite. Risk oversight is also addressed as part of the full Board’s regular oversight of strategic planning. |
| | | | | Audit Committee | | 22Compensation and Talent Management
Committee | | Corporate Governance and Nominating
Committee | ● Provides oversight of risks, and management’s mitigations of same, that could have a financial impact, such as financial reporting and disclosure, accounting practices, internal controls, conflicts of interest, compliance with legal and regulatory requirements, and cybersecurity ● Oversees the Company’s overall risk management governance structure, risk assessment, and enterprise risk management processes ● Oversees risks associated with information technology security, cybersecurity, artificial intelligence, and data privacy, and breach preparedness and response plans ● Reviews all quarterly and annual reports, including any disclosure of risk factors affecting the business ● Oversees the performance of the Company’s Internal Audit function including Chief Audit Executive (“CAE”) ● Reviews and approves Internal Audit’s budget and resource plan ● Monitors the qualifications, performance, and independence of the Company’s independent auditors | | ● Oversees our compensation plans, policies, and practices to ensure alignment with our Executive Compensation Risk Assessment Framework and reports to the Board any compensation program that is reasonably likely to have a material adverse effect on the Company ● Together with the Committee’s independent consultant, provides input to management regarding their annual assessment of potential risks created by our compensation plans, policies, and practices ● Sets performance goals under our annual and long-term incentive plans that provide an appropriate balance between the achievement of short- and long-term performance objectives, with emphasis on managing the sustainability of the business and mitigation of risk ● Manages risk associated with CEO and senior officer succession planning ● Oversees management of risks related to the Company’s human capital ● Oversees the Company’s Clawback Policy | | ● Manages risk associated with governance issues, such as the independence, skills, experience and diversity of the Board and its committees, Board and committee effectiveness and organization, corporate governance, and director succession planning ● Maintains Corporate Governance Principles and procedures designed to assure compliance with all applicable legal and regulatory requirements and governance standards and the Company’s Code of Business Conduct and Ethics and Insider Trading Policy ● Annually reviews the Company’s ESG Strategy, initiatives, and policies and monitors associated risk (including reputational) ● Oversees emergency succession planning for the CEO and Chairman ● Oversees the orientation and education of directors to ensure clear understanding of their Board responsibilities and recommends continuing education programs, as appropriate. |
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Corporate Governance | | | | | Management | | | Management assesses and manages critical risks, including the execution of the Company’s Enterprise Risk Management (“ERM”) program. The Company’s risk-related departments and functions, in collaboration with the Vice President and Chief Risk, Compliance, and Privacy Officer (“Chief Risk Officer”), are responsible for risk assessment and mitigation. The Chief Risk Officer reports directly to the Company’s Senior Vice President, General Counsel and Corporate Secretary (“General Counsel”). For ESG-related risk, the Company maintains the ESG Advisory Committee to oversee goals and progress toward the achievement of goals as established by the ESG team. The ESG Advisory Committee meets monthly and includes the following members from cross-functional areas of the organization: the Company’s General Counsel, Chief Financial Officer, Chief People Officer, Chief Risk Officer, Chief Diversity Officer, Chief Accounting Officer, Chief Audit Executive, Corporate Sustainability Specialist, and representatives from the Company’s business units. The General Counsel reports results of the ESG Advisory Committee reviews to the Corporate Governance and Nominating Committee on a quarterly basis. With respect to the risk assessment of the Company’s compensation programs, management is responsible for the framework and approach as outlined below under Risk Assessment of Employee Compensation Programs. |
While the Audit Committee has responsibility for the oversight of the Company’s risk assessment and risk management processes, it is the duty of the Company’s management to assess and manage critical risks, including the execution of its Enterprise Risk Management program. The Company’s risk-related departments and functions are under the direction of the Vice President and Chief Risk, Compliance, and Privacy Officer (“Chief Risk Officer”) who reports directly to the CEO.Program
The Company’s ERM program serves as the primary means of identifying and managing the Company’s key risks. The Company’s ERM team, has, among other activities, performedperforms assessments of risks to the Company, participatedparticipates in the development and execution of mitigation programs for critical risks, facilitatedfacilitates the establishment of a corporate risk appetite and tolerance statement, inclusive of an oversight and monitoring mechanism, established aoversees the privacy governance function, provides risk assessment, guidance, and assistedmitigation related to cybersecurity, and assists in the integration of risk concepts within the Company’s strategic planning process.process and in alignment with the functional and business risk owners. The ERM team reports its findings to the Audit Committee on a quarterly basis, providing both written reports and periodicin-person presentations. Its current activities remain focused on mitigation and oversight of specific risk exposures, analysis of the breadth and effectiveness of existing risk management practices, and maturation of measurement and monitoring practices concerning high-priority strategic and operational risks. Current areas of particular emphasis include cyber security,cybersecurity, artificial intelligence, data privacy, strategic risk , integration of risk appetite practices into the Company’s ongoing operations, wage-hour risk management,, third-party risk , and improvements to the Company’s compliance governance practices. The Company’s Information Technologyinformation technology and Internal Auditinternal audit groups provide regular quarterly updates to the Audit Committee with respect to the Company’s proactive approach to cyber security.cybersecurity and other compliance controls. Controls are reviewed for operational effectiveness and to provide reasonable assurance that: business risk is managedmanaged; data, corporate information, and other assets are safeguarded; security of information,business processing infrastructure and applications are maintained; and all risks are mitigated to the extent practicable. The Company’s ERM program provides ongoing risk identification, oversight, guidance, and mitigation in coordination with the Company’s information technology group. Teams from the Company’s information technology, data privacy, and compliance functions coordinate on cybersecurity, artificial intelligence, and privacy governance. This includes internal monitoring to proactively identify potential security threats, maintenance of access controls, asset management, response and recovery activities, and training and awareness programs. The company’s training program provides specialized training on a quarterly basis to employees and directors, including mandatory new hire cyber and privacy training, two focused cyber trainings per quarter, and monthly training exercises for identifying phishing attempts. Evaluation of these practices is reported to the Audit Committee on a quarterly basis. In addition to the reports submitted quarterly by the Company’s Chief Risk Officer, the Vice President of Internal Audit independently assesses the Company’s risk management process and separately reports to the Audit Committeeon the effectiveness of the Company’s risk identification, prioritization, and mitigation processes.processes to the Audit Committee. The ERM team plays a key role in the Company’s response to domestic and global crises, e.g. the COVID-19 pandemic and the Russian invasion of Ukraine, providing Board updates and scenario planning regarding impacts on cybersecurity, employee health and safety, corporate operations, and global markets. | | | | | | 28 | | | |
Corporate Governance | | | | | | | INFORMATION SECURITY AND BUSINESS CONTINUITY |  | | Emergency Management Team Global, interdepartmental group empowered to quickly make strategic decisions in response to critical events that affect our employees or facilities. | | 
| | Third Party Risk Management We monitor critical engagements with vendors and partners for cyber risk to reduce third-party exposure. |  | | Business Continuity Plan Testing Kelly’s Business Continuity and IT Disaster Recovery programs are tested at least annually and most recently tested in August 2023 and October 2023, respectively. These plans performed successfully in practice and real-world scenarios. | | 
| | Training and Awareness We train employees on industry-specific cybersecurity threats and test to identify common attack vectors, including business email compromise, domain spoofing, social engineering, and other phishing techniques. |  | | Cyber Governance Kelly uses external frameworks to assess the Company’s cybersecurity maturity as well as internal governance structures to mitigate cybersecurity risks. | | 
| | External Assessments Kelly adopted the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) and measures our cyber maturity through an annual assessment by a third-party aligned with NIST SP 800-53 Security and Privacy Controls for Information Systems and Organizations. |
Risk Assessment of Employee Compensation Programs As set forth in its charter, the Compensation Committee is charged with reviewing the Company’s compensation program risk assessment for all employee compensation programs and reporting to the Board any compensation program that is reasonably likely to have a material adverse effect on the Company.
AtAnnually, at its February 2018 meeting, the Compensation and Talent Management Committee reviewedreviews management’s Compensation Program Risk Assessment Report. The report wasReport, prepared by the Company’s Executive Compensation group and Human Resources groups in collaboration withreviewed by the Company’s Internal Audit Department.General Counsel. The Company’sreview and update of the Executive Compensation Program Risk Assessment Framework is reviewed and updatedoccurs, as needed, including review by the independent compensation consultant, to ensure a robust and comprehensive assessment process. In addition, the Consultant reviewed the assessment prepared for the executive compensation section of the report.
| | | The Company’s Executive Compensation Program Risk Assessment
Framework takes into consideration the following guiding factors: | | | | | ● Short- and long-term incentive performance measures and equity award types do not encourage excessive risk-taking behavior | | | | | ● A balanced compensation structure with a mix of compensation that includes an appropriate mix of fixed and variable cash and equity; and, for variable compensation,with a balance of short- and long-term incentive opportunities | | | | | ● Performance criteria and corresponding objectives include a balance of performance and the quality of such performance; include the appropriate use oftop-line top line vs. bottom-line metrics; and use annual and long-term measures that complement each other | | | | | ● Plans are well-designed and Well-designed plans that do not include steep payout curves, uncapped incentive payouts, andor misaligned payout timing | | | | | ● Incentive plans are tested for multiple scenarios under realistic assumptions to ensure that potential payouts are reasonable relative to results | | | | | ● A thorough and qualitative assessment of how results were achieved and the achievement, quality, and sustainability of the results is conducted | | | | | ● Validation of the relationship between performance and Benchmarked incentive plan payouts relative to performance, to ensure it falls within the range of competitive practices determined byin comparison with a representative peer group and general industry | | | | | ● Implementation of risk-mitigating features such as a clawback policy that applies in certain circumstances involving the restatement of financial resultsClawback Policy and a policy that requires a portionestablishes expected share ownership for executives and directors of the shares received from incentive award payouts to be retained by the participants through ownership/retention approaches | | | | | ● Incentive plan governance includes involvement at a variety of levels from the Compensation and Talent Management Committee to various corporate functions including Corporate Governance, Executive Compensation, Finance, HR, Legal, and Pay Governancethe Committee’s outside compensation consultant | | | | | ● Potential risk is discussed with the Compensation and Talent Management Committee, recorded in Committee minutes, and discussed in the Compensation Discussion and Analysis section of the Company’s annualAnnual Proxy Statement |
| | | | | | | | | | 23 | 29 | | |
Corporate Governance To assess the risk of employee compensation programs below the executive level, the Company’s Human ResourcesCompensation group implemented an internal Governance Committee to review and approve plan design and address any significant issues that arise. The Governance Committee utilizes its Global Incentive Plan Design and Risk Mitigation Framework to consider linksalignment to the Company’s strategy and any risks associated with the design of each incentive plan. The risks associated with each of the following elements of the design and implementation of aneach incentive plan are considered, as well as the steps in place to mitigate risk and ensure alignment with the Company’s strategic plan: | ● | | Linkagelinkage of incentive measures with business objectives, analysis of total compensation market data, determination of design elements/payout threshold levels, potential range of payouts, and timely and accurate tracking of performance data;
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| ● | | Modeling,modeling, approval, and communication of incentive plans;
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| ● | | Calculation,calculation, audit, approval, and communication of incentive payments; and
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| ● | | Annualannual plan reviews to ensure planned design updates align with business goals and budgets, and do not present a material risk to the Company.
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After due consideration of management’s 20182023 Compensation Program Risk Assessment Report, the Compensation and Talent Management Committee concluded that the Company’s compensation programs do not create a reasonable likelihood of a material adverse effect on the Company. Kelly’s Corporate Sustainability and ESG Strategy – Growing with Purpose Kelly recognizes the critical importance of sustainability in addressing the world’s most pressing environmental and social challenges. Kelly’s approach is based on the concept of creating shared value. We aim to create economic value by addressing societal needs and going beyond traditional corporate social responsibility. Our focus on sustainable growth helps us manage risks efficiently while we continue to develop long-term business opportunities. In 2023, our Corporate Sustainability and Environmental, Social, and Governance Strategy (“ESG Strategy”) was primarily focused on strengthening relationships and alignment between our key corporate functions and business teams, which continue to set the stage for our sustainability goals moving forward. To ensure alignment, we expanded our ESG Advisory Committee with a representative from each of our Business Units. Additionally, we integrated our sustainability and ESG efforts with Enterprise Risk Management for optimal organizational synergy. From strengthening relationships with stakeholders through community focus and an emphasis on skills-based volunteering, to eliminating barriers to accessing work opportunities with programs like Equity@Work, we consistently create shared value. Our ESG Strategy aligns to Kelly’s Enterprise Goals and growth strategy with seven core pillars responding to stakeholder expectations and critical risks and opportunities across environmental, social, and governance issues. These core pillars are based on nine United Nations Sustainable Development Goals (“UN SDGs”) and support all programs and initiatives within our Corporate Sustainability and ESG strategy to ensure that internal resources and activities positively impact our triple bottom line. 
Stakeholder engagement: We continually engage with diverse stakeholders through various ongoing initiatives and activities to better understand their concerns and deliver added value of our services. | | | | | | 30 | | | |
Corporate Governance Stakeholder Perception Analysis (formerly referred to as Materiality): Our ESG Strategy is anchored in a formal assessment that analyzes environmental, social, and governance issues with respect to stakeholder relevance, the severity to business risk, and the impact on our business success. We conducted our latest assessment in 2021 through surveys, with participation from a group of diverse stakeholders representing suppliers, customers, Kelly employees, talent, and other stakeholders. Kelly’s most recent assessment considered a “double materiality” analysis to assess the level of risk that each ESG issue could have on the business from a financial and non-financial perspective, including our license to operate and impact on the overall value of our organization. Board ESG Oversight: Our Board of Directors is responsible for overseeing the effective execution of our ESG strategy along with multiple Board committees that oversee various ESG topics. Our Governance and Nominating Committee provides oversight to Corporate Governance principles and ESG strategy policies, initiatives, and associated risk. Our Audit Committee plays a key role in the Board’s risk oversight process particularly with financial impact risk, and risks associated with information security. Our Compensation and Talent Management Committee provides oversight to talent attraction, retention, and compensation plans, policies, and practices. Senior management reports to the Board on key ESG topics at least bi-annually through our ESG Advisory Committee comprised of a diverse and multidisciplinary leadership team. 2023 Goals and Achievements Beginning in 2022, our strategy shifted focus to long-term sustainability goals. These goals address the interconnected challenges of social, economic, and environmental sustainability, with the intent to balance the needs of present and future generations. In 2023, we continued to report on progress towards these objectives, and to show transparency and accountability in our actions. Environmental: Kelly is committed to protecting our planet for future generations. Our environmental initiatives focus on providing safe and sustainable work environments for our employees and talent while mitigating the environmental footprint of our operations. 2023 Environmental Highlights: Green House Gas (“GHG”) emission reduction. We continue to adjust our carbon emissions and improve calculation methodologies across all scopes, while expanding the approach of Scopes 1 and 2 to include global locations within our operational control. In 2023, we updated our climate risk assessment and continued to pursue a climate strategy to mitigate, remove, and compensate for our impact, and align emission reduction targets to limit global warming to a 1.5°C ambition level by 2050. We use a climate change scenario approach to help us explore different possible outcomes and inform decision-making and planning. We communicate our progress on climate-related disclosure metrics through our annual Corporate Sustainability and ESG report, Carbon Disclosure Project (“CDP”), and external sustainability assessments that evaluate our performance. Workplace safety solutions and performance across our specialty businesses. Since 2010, Kelly has maintained our zero-injury program, Absolute Zero. In 2023, the Company outperformed our peers in the staffing industry by 91% Total Recordable Incident Rate (“TRIR”) and 92% Days Away/Restricted and Transferred Incident Rate (“DART”) compared to 2022 Bureau of Labor Statistics (“BLS”) industry averages. Current year industry averages were not available at the time of publishing. We began developing a technology tool within our internal risk management system that will allow us to track impactful metrics and capture incidents and accidents more consistently. The Company has one Certified Safety Professional (“CSP”) and one Certified Industrial Hygienist (“CIH”) on staff to serve as a resource to our clients and talent. Social: Kelly’s noble purpose is to connect people to work in ways that enrich their lives. We strive to contribute to a more inclusive and equitable workforce that creates better access, opportunities, fair treatment, and advancement for all people so that they may contribute to communities where they live and work. This drives our actions and allows us to create shared value for all our stakeholders. | | | | | | | | | 31 | |
Corporate Governance 2023 Social Highlights: Equity@Work as a shared value proposition. In 2023, we helped remove barriers to employment for approximately 5,639 individuals. Partnering with 45 clients across multiple industries including automotive, manufacturing, agriculture, logistics, and pharmaceuticals, we removed barriers such as testing, unnecessary interviews, and restrictive background and drug screens, to connect qualified individuals to meaningful work. Clients implementing Equity@Work see positive outcomes, including reduced turnover and improved fill rates. We engage with entities such as the Departments of Corrections in Iowa, Pennsylvania, Kentucky, Tennessee, and Missouri, as well as impactful non-profits like the Vera Institute of Justice, Responsible Business Initiative for Justice, and the Second Chance Business Coalition. Partnering with organizations and industry allies such as the American Staffing Association (ASA) and CEO Action, we amplify initiatives like Equity@Work and the Kelly33 second chance hiring program. Giving back in communities where we live and work. We launched a new technology platform to capture corporate volunteering and empower our employees with volunteering and giving initiatives, while increasing collaboration on social impact opportunities. In 2023, we achieved over 6,600 hours of volunteering, engaging more than 840 employees in the U.S. and Canada. Kelly employees contributed over $26,800 towards our Kelly Relief Fund and roughly $7,200 in grants were distributed to support 6 employees in need. In addition, approximately 520 employees contributed nearly $71,000 towards charitable giving opportunities during Kelly’s annual benefits enrollment. The Company donated approximately $158,481 towards social investment programs and charitable organizations, committed to increasing education, training, and employment networking opportunities for underserved talent. By investing in local organizations aligned with our business strategy and core values, we increase our shared value and leverage our effort for providing inclusion and equality for the workforce. Strengthened our Employer Value Proposition (EVP) and engagement. We modified our Kellyemployee engagement survey process from a large, annual survey to quarterly pulse checks with intentional focus on more real-time and actional feedback especially as 2023 was a year of significant business transformation. Our year-end engagement score remained healthy at 75%. We also incorporated elements into internal onboarding , and communications with candidates, to highlight aspects such as work-life balance, learning and development, collaboration, cohesion, and organizational culture. | | | | | | 32 | | | |
Corporate Governance 
Our eight Affinity Groups bring together over 930 employees who share similar affinities, backgrounds, and life experiences, as well as their allies. They focus on providing support, enhancing professional and personal development, and networking within the workplace. They are employee-led, collaborative groups who are committed to positively impacting our DEI pillars; Workforce, Workplace, Marketplace. In 2023, the Affinity Group’s conducted over 100 events including: Career Development events; Celebrate Together – a multicultural Affinity Group celebration to share holiday traditions, cultural expressions, ethnic cuisine, and 2023 achievements. 
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Corporate Governance Our Diverse Global Supplier Network connected approximately 465 diverse and underrepresented suppliers to our Kelly network in 2023. While this number is down from 2022, Kelly was still able to increase the impact of our program with diverse spend under management with diverse suppliers growing from $1.8B in 2022 to $2.2B in 2023. Governance: Kelly is committed to doing the right thing, conducting ourselves in a legal, ethical, and trustworthy manner, strictly upholding our regulatory obligations in every country we operate and complying with the letter and spirit of our business policies and values. Our commitment is to hold ourselves accountable for our actions and goals. 2023 Governance Highlights: The production of our Growing with Purpose – Corporate Sustainability and ESG report is in accordance with Global Reporting Initiative (“GRI”) standards, Sustainability Accounting Standards Board (“SASB”), United Nations Global Compact (“UNGC”), and Securities and Exchange Commission (“SEC”) disclosures. Our 2022 ESG report that was published in May 2023, can be found on the Company’s website at kellyservices.com. We continued annual training and acknowledgment of our global policies, with 93.5% of employees acknowledging our Code of Business Conduct and Ethics and completing global policy training on business ethics and human rights topics. We expect compliance with new and updated legislation and standards in all geographies in which we operate. In 2023, we continued ongoing efforts to strengthen Kelly’s protection of personal data with updates to our Information Security policies to ensure the highest information security standards across our network, including the adoption of international standard procedures to ensure ongoing compliance with the European Union’s General Data Protection Regulation (“GDPR”), California’s Consumer Privacy Rights Act, and all other data privacy laws and regulations in the geographies where we do business. The Company participates in external assessments, such as EcoVadis, to analyze our performance and identify opportunities for improvement, while providing a consistent and transparent measurement for the impact of our ESG Strategy. According to EcoVadis, their rating covers a broad range of non-financial management systems including Environmental, Labor & Human Rights, Ethics and Sustainable Procurement impacts. This is the sixth consecutive year the Company has participated in the annual EcoVadis assessment and our first year to achieve “Gold” status, placing us in the top 3% of companies rated in the temporary employment industry. | | | | | | 34 | | | |
Corporate Governance Human Capital Kelly is a talent solutions company dedicated to connecting people to work in ways that enrich their lives, and our employees are critical to achieving this noble purpose. To compete and succeed in a highly competitive and rapidly evolving market, it is crucial that the Company attracts and retains experienced internal employees, as well as the talent we put to work for our customers. As part of these efforts, we strive to offer competitive total rewards programs, promote employee development, foster an inclusive and diverse environment, and give employees the opportunity to give back to their communities and make a social impact. The Company is committed to the health, safety, and wellness of our employees and talent. The success of our business is fundamentally connected to the well-being of our people. Accordingly, we implement policies and practices that align with applicable laws and regulations and are in the best interest of our employees and talent, and the communities in which we operate. | | | | | | 
| | | | As of December 31, 2023 we employed approximately 3,700 staff members in the United States and an additional 2,500 in our international locations. The Company’s retention rates for employees identified as high performing and high potential employees align with our comparable benchmark. |
| | | | |  | | | | In addition to our internal employees, the Company recruits talent on behalf of customers on a global basis. In 2023, we placed more than 500,000 individuals in positions with our customers. When Kelly remains the employer of record for our talent working at customer locations, we retain responsibilities for all assignments (including ensuring appropriate health and safety protocols in conjunction with our customers), wages, benefits, workers’ compensation insurance, and the employer’s share of applicable payroll taxes as well as administration and payment of the employees’ share of these taxes. We also offer our talent access to competitive health and benefit programs while they are working with us. |
| | | | | | | | | 35 | |
Corporate Governance | | | | |  | | | | The Company is committed to providing employees with competitive, equitable, and fiscally responsible total rewards opportunities. We align internal employee and shareholder interests with strong pay-for-performance linkages that include a mix of base salary, short-term incentives and, in the case of our more senior employees, long-term equity awards. We believe that our programs provide fair and competitive opportunities that attract, retain, and reward talented individuals who possess the skills necessary to achieve our strategic goals and create long-term value for our shareholders. In addition to cash and equity compensation, we also offer benefits such as life and health (medical, dental and vision) insurance, paid time off, wellness benefits, and defined contribution retirement plans. We review our compensation and benefit programs regularly and respond to changes in market practice and encourage our customers to do the same with respect to the talent we recruit on their behalf. Recent internal changes enhance our U.S. benefits program including additional time off for significant life events, a financial advisor program, support programs for certain chronic health conditions, and introduction of a well-being app. Pay and benefits programs provided to our international employees are in line with competitive local practice. |
| | | | |  | | | | Since 1946, our founder fought to increase access to work for women, and we’ve long been an outspoken advocate for the value temporary and independent workers bring to the workplace. We are committed to fostering an inclusive, equitable, and diverse workforce, which we believe produces more innovative products and services and results in our customers having access to the best talent in the marketplace. A significant majority of Kelly’s U.S. workforce are women, including a majority of director and above roles. In 2023, the Company was named America’s Best Temporary Staffing Firm by Forbes and one of the World’s Best Companies by TIME Magazine. Additionally, Kelly earned the 2024 Military Friendly Spouse Employer Designation. Kelly is a workplace leader in creating an inclusive environment with diverse teams, aiding our ability to attract and retain high-performing talent. The Company fosters a culture of belonging, where everyone feels welcomed and respected and can thrive as we work together. Kelly promotes employee development and internal career mobility to enable our team to achieve their full potential and ensure we have the evolving workforce capabilities that the future demands. |
| | | | |  | | | | We consider sustainability a guiding principle in strengthening the relationship with our global workforce, suppliers, and customers. Through our programs and initiatives, we seek to improve the quality of life of our employees, their families, and the communities in which they live and serve. Designed on the concept of social investment and nurturing shared values, our approach ensures the creation of future development capacities instead of aiding on isolated occasions. We support initiatives where our employees can actively engage in the causes they believe in, that are also connected to our sustainability strategy. For more information on our diversity, equity, and inclusion and community involvement initiatives, please see our Sustainability Report – Growing with Purpose at kellyservices.com. |
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Corporate Governance Director Selection Process The Corporate Governance and Nominating Committee is responsible for the identification, screening, and recommending qualified candidates for nomination by the full Board. The Board of Directors, together with Corporate Governance and Nominating Committee, is committed to ensuring that: (1) the Board as a whole is composed with the right combination of knowledge, experience, continuity, reputation, and diversity that are pertinent to the Company’s operating environment and strategic direction; (2) the Board has the independence and competence to continue providing the high level of governance and oversight that the Company’s shareholders have come to expect; and (3) there is a seamless transition when a director decides to retire or step down from the Board. Among other aspects of the process, the Board of Directors: identifies the collective mix of desired skills, experience, knowledge, diversity, and independence for the Board of Directors, taken as a whole, and identifies potential opportunities for enhancement in one or more of those areas; considers each current director’s experience, skills, principal occupation, reputation, independence, age, tenure, committee membership and diversity (including geography, gender and ethnicity); and considers the results of the Board and committee self-evaluations, as well as feedback received during one-on-one interviews of each director. An independent third-party search firm is retained by the Committee, Evaluationwhich recommends candidates who satisfy the Board’s criteria. The search firm also provides research and pertinent information related to candidates as requested. Potential candidates are also suggested by several members of the Company’s Board and senior leadership team. An overview of the Board’s director selection process is provided below. Annually,
| | | | | Evaluate Board Composition | | Using the Company’s Corporate Governance Principles, Board Composition Matrix, and Board self-evaluation process, the Committee (or subcommittee) evaluates the size, composition, priorities, and needs of the Board with respect to its desired experience, skills, and diversity in consideration of the Company’s current and anticipated business needs and strategies. | | | Identification of Potential Candidates | | The Committee instructs the search firm to provide an initial pool of candidates that reflect gender, race, ethnic and cultural diversity, possess the core qualifications required, and includes the specific experience and skills as identified during the evaluation of current board composition. The Committee also encourages and considers candidate submissions from other directors and members of Company management. | | | Evaluation of Candidates | | Through meetings with the Committee, a screening process of potential candidates is conducted with the independent external search firm that includes a thorough review of identified candidates’ qualifications, potential conflicts, independence, backgrounds, and experience to assess how each candidate fits the needs of the Company and Board. The candidate pool is narrowed for individual interviews with the Committee and full Board. Following the interviews, potential candidates are comprehensively reviewed and the subject of rigorous discussion during Committee and Board meetings. | | | Recommendation | | Interview and discussion feedback are assessed, and the Committee recommends final candidate(s) to the full Board for appointment. | | | Review and Appointment by Full Board | | The full Board appoints new director(s), who then stand for election by shareholders at the next Annual Meeting. |
Director Attendance We expect directors to attend the Annual Meeting of the Shareholders, all Board meetings, and all meetings of the committees on which they individually serve. All directors then in office attended the 2023 Annual Meeting of Shareholders. The Board held twelve meetings during 2023. Director attendance averaged 97.5% of the aggregate number of meetings of the Board and the committees on which they served during 2023. The majority of directors attended 100% of all Board and committee meetings on which they individually served in 2023. The independent directors met in executive sessions at which only they were present at least eight times during 2023. | | | | | | | | | 37 | |
Corporate Governance Size of the Board Under the Company’s Amended and Restated Bylaws, the number of directors constituting the Board may be fixed by the Board within the range of five to eleven directors. The size of the Board should not exceed a number that, as determined by the Board, will permit it to function efficiently in discharging its duties. There are currently nine members of the Board. Election of all director nominees will result in a nine-member Board immediately following the Annual Meeting. Director Tenure The Board does not have term or age limits. The Board believes that the contributions and insight of tenured directors into the Company’s operations and strategy outweigh the perceived value of such limits and facilitate Board effectiveness. Director Service on Outside Public Company Boards While there is no specified limit on the number of other public company boards on which a director may serve, the number of board memberships is a consideration, along with any other time commitments a director or nominee may have, in determining his or her ability to serve effectively. Directors must be willing and able to devote sufficient time to carrying out their duties and responsibilities effectively and have an intention to serve an appropriate length of time in order to make a meaningful contribution to the Board and the Company. A director is expected to engage in discussion with the Chair of the Corporate Governance and Nominating Committee overseesprior to accepting an invitation to serve on an additional public company board or accepting an invitation to chair a committee of a public company board on which he or she currently serves. Director Orientation and Continuing Education Management, working with the Board’sCorporate Governance and Committees’ evaluation processesNominating Committee, provides an orientation program for new directors to facilitate integration into their roles. The program acquaints new directors with the Company’s business, history, vision, noble purpose , strategic direction and reports resultsplans, competitive landscape, core values, Code of Business Conduct and Ethics, Insider Trading Policy, other corporate governance practices, financial, accounting, and risk management matters, key policies, sustainability strategy, senior leadership, and internal and independent auditors. The program consists of, as appropriate, a comprehensive review of background materials, briefings by senior management, and visits to Company facilities. The Board also developed a mentoring program to provide additional support and resources to new directors. Based on the feedback from our directors, we believe this onboarding approach provides new directors with a strong foundation for understanding our businesses, connects directors with members of management with whom they will interact, and accelerates their effectiveness to engage fully in Board deliberations. Directors are also encouraged to participate in continuing director education programs to help them stay current on emerging practices and issues and in carrying out their responsibilities. These programs include formal education sessions with management or third-party subject matter experts that may occur as part of regular Board or committee meetings, and participation in industry forums on business, financial, accounting, legal, and other subjects relevant to the Board. Company’s business. The Company reimburses reasonable costs and expenses incurred by directors for continuing education that provide updates on issues and programs relevant to public companies and their directors. Board, Committee, and Peer Evaluation The Board recognizes that a robust and eachconstructive evaluation process is essential to good governance and enhanced effectiveness. The Corporate Governance and Nominating Committee conductorganizes and oversees an annual evaluation of their respective performance, the purpose of which is to increase the effectiveness of the committees and the Board as a whole. The process includes an assessment ofby the Board and each Committee’s effectiveness and independence, access to and reviewits committees of information from management, responsiveness to stockholder concerns, maintenance of standards of business conduct and ethics, and relationship with management.their performance. The evaluation is intended to facilitatefacilitates an examination and discussion by the entire Board and each Committeecommittee of its effectiveness as a group in fulfilling its charter requirements and other responsibilities. Someresponsibilities, its performance as measured against the Company’s Corporate Governance Principles, and areas for improvement. The evaluation also includes individual director assessments, typically in alternating years. In 2023, the Corporate Governance and Nominating Committee engaged an independent external advisor to conduct Board and committee evaluations. The independent external advisor also conducted individual director assessments in 2023. The process included the completion of an online self-evaluation with rated and open-ended questions, with follow-up discussions by the advisor on certain individual responses, as needed. Each of the areas reviewed as part ofBoard’s nine directors participated in the process. | | | | | | 38 | | | |
Corporate Governance The typical process includes the following: 
In addition to the annual formal evaluation, our Chairman, CEO, General Counsel and Corporate Secretary, and Committee Chairs routinely communicate with directors to obtain real-time feedback. The Board believes that this continuous feedback, along with the formal evaluation process, contribute to its overall strength and ongoing effectiveness. The following actions have been taken by Kelly’s Board and its committees in response to the evaluation include: Director obligations, roles and responsibilities, Board member qualifications, Committee member qualifications, Board structure, Committee structure, corporate governance, organization performance, culture and ethics, and educational opportunities. Past evaluations have resulted inprocess over the Committee revising its criteria for Director candidates, extending the length of various meetings to ensure sufficient discussion time, discussion of potential future Committee participation, establishment of the roles of Committee Vice Chairs, and Committee Chair succession.years:
| ● | | management with varying degrees of seniority present to the Board and its committees; |
| ● | | director education and presentations on emerging risk areas including artificial intelligence, corporate governance, industry disruptors, and competitors; |
| ● | | format of Board meetings made flexible to allow more time for formal and informal discussions among independent directors; |
| ● | | increased opportunities for informal meetings between directors and key executives; |
| ● | | increased time for informal director-only gatherings; and |
| ● | | Board members added with expertise in areas critical to the Company’s business strategy and operations. |
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Corporate Governance Code of Business Conduct and Ethics The Board hasis committed to the highest legal and ethical standards and adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all Directors, Officers,directors, officers, and employeesemployees. Each year the Company performs a thorough assessment and benchmarking of the Code of Conduct to help themensure regulatory compliance and cultural alignment. The Code of Conduct forms the foundation for compliance with corporate policies and procedures and helps individuals recognize and deal with ethical issues, deter wrongdoing, provide mechanisms to report dishonest or unethicalany concerns, promote honest and ethical conduct, provide full, fair, and timely disclosure, comply with applicable law and regulations, and help foster a culture of honesty and accountability. The Code of Conduct was updated in 2017 and addresses conflicts of interest,interest; anti-bribery/anti-corruption,anti-corruption; trade compliance; insider trading,trading; corporate opportunities,opportunities; confidentiality and privacy,privacy; external communications; financial reporting and record keeping; protection and proper use of assets,assets; fair dealing,dealing; contract management; acceptable behavior in the workplace,workplace; global diversity and inclusion; corporate sustainability; compliance with laws, rules and regulations, Company policies,regulations; risk tolerance,tolerance; anti-human trafficking and slavery; health & safety and workplace violence; seeking advice and reporting dishonest or unethical behavior andconcerns; outside activities; political contributions; public company reporting requirements.requirements; and other policies. The Code of Conduct includes an enforcement mechanism. Each of the Company’s Board members, officers, and employees is required to acknowledge their acceptance of the Code of Conduct. The full text of the Code of Conduct is posted on the Company’s website atkellyservices.com.kellyservices.com. This information is also available in print to any stockholdershareholder who requests it from the Company’s Investor Relations Department.department. The Company will disclose future amendments to the Code of Conduct and material waivers of its provisions for its Directorsdirectors and Executive Officersexecutive officers on its website and/or by filing a current report on Form8-K within four business days following the date of amendment or waiver, or such earlier period as may be prescribed by Nasdaq or the SEC. Related Person Transactions and Certain Relationships Pursuant to the Company’s Code of Conduct, any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company must be disclosed immediately to the Vice President of Internal Audit or to the General Counsel. In addition, Directorsdirectors, and Executive Officers are required toexecutive and other senior officers must complete an annuala quarterly questionnaire that solicits information regarding any transactions or relationships between themselves or their immediate family members and the Company of the types described in Item 404(a) of SEC RegulationS-K (“Related Party Transactions”). Directors and Executive Officersexecutive and senior officers must seek a determination and obtain prior authorization or approval of any potential conflict of interest (including any Related Party Transaction) from the independent Audit Committee. The Audit Committee, pursuant to its charter, is tasked, among other things, with the responsibility to review Related Party Transactions and other potential conflicts of interest involving Directorsdirectors and Executive Officers.executive and senior officers. The Company does not havemaintains a formal written policy regarding such reviews.addressing the reporting, review, and approval or ratification of transactions with related persons. | | | | | | | | | 40 | | 24 | | |
Corporate Governance
Mr. Adderley, the Chairman of the Board and our controlling stockholder, receives compensation from the Company, as described below under “Director Compensation,” which is approved by the independent Compensation Committee. Mr. Takahashi, a Director of the Company, serves as the designated representative of Persol Holdings Co., Ltd., which owns 4.5% of the Company’s Class A Common Stock, and with which the Company has a strategic alliance, as described in the Company’s Annual Report on Form10-K for the period ended December 31, 2017. Mr. Takahashi receives no compensation for his service as a Director.
Corporate Social Responsibility
The Company believes that corporate social responsibility (“CSR”) is a cornerstone of the organization. The Company focuses its CSR efforts in four crucial areas: employees and people, ethics, engagement, and the environment. The Company’s CSR report is posted on the Company’s website atkellyservices.com.
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Director Compensation Our approach to director compensation is to appropriately compensate our non-employee directors for the time, expertise, and effort required to serve as a director of a large, complex company and to align the interests of directors with those of shareholders. Compensation levels for our non-employee directors are periodically reviewed for market competitiveness. Non-employee directors receive compensation payments after election by shareholders at the Annual Meeting. Non-employee directors who begin their Board or committee chair service other than at the Annual Meeting receive a prorated amount of annual compensation based on timing of appointment. Director Compensation Design DIRECTOR COMPENSATION
The Compensation and Talent Management Committee reviews market benchmarking of non-employee director compensation annually. In 2017,2023, the Compensation Committee engaged its independent compensation consultant, Pay Governance, to evaluate itsnon-employee Director compensation, which was last increased in 2009.2022. At its meeting following the 20172023 Annual Meeting of Stockholders,Shareholders, the Compensation and Talent Management Committee approved increases inrecommended to the Board of Directors that the cash and equity portion of retainers paid to thenon-employee Directors, effective beginning May 11, 2017. The base retainer fornon-employee Directors (other than Mr. Takahashi, who receives no compensation for his service as a Director) was increased from $150,000 to $180,000. The additional retainers associated with Board leadership positions were also increased:17, 2023, remain unchanged. Retainers for the Lead Director, from $20,000 to $40,000; forNon-Executive Chairman of the Board, Chair of the Audit Committee, from $12,500 to $20,000; for theand Chair of the Compensation and Talent Management Committee from $7,500 to $15,000; and forwere also maintained. The compensation of our non-employee directors will next be reviewed in 2024, with the Chairassistance of the Corporate Governance and Nominating Committee, from $7,500 to $10,000.its compensation consultant. The following table illustrates our 2023 non-employee director compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Base Retainer | | Board Leadership Positions -
Additional Retainer (Committee Chairs) | | | | | | | | | | Non-Employee
Directors | | Chairman of
the Board | | Audit
Committee | | Compensation &
Talent
Management
Committee | | Corporate
Governance &
Nominating
Committee | | | | | | | Cash | | | $ | 100,000 | | | | $ | 150,000 | | | | $ | 20,000 | | | | $ | 15,000 | | | | $ | 15,000 | | | | | | | | Equity (Kelly Class A Stock – $ Value) | | | $ | 125,000 | | | | $ | 165,000 | | | | | — | | | | | — | | | | | — | | | | | | | | Total | | | $ | 225,000 | | | | $ | 315,000 | | | | $ | 20,000 | | | | $ | 15,000 | | | | $ | 15,000 | |
Under the Company’s amended and restated Equity Incentive Plan (“EIP”), which was approved at the 2017 Annual Meeting of Stockholders, the Board of Directors is required tomust periodically determine from time to time the percentage of the base retainer that will be issued tonon-employee Directors directors in shares of Class A common stock.Common Stock. At the meeting of the Board following the 20172023 Annual Meeting of Stockholders,Shareholders, the Board determined that $80,000$125,000 of the base retainer would be issued in shares. Directorsshares (55.6%) and $100,000 of the base retainer would be paid in cash (44.4%). Equity portion of $165,000 and cash portion of $150,000 were maintained for the Chairman of the Board. Stock Ownership Requirements Non-employee directors are subject to a stock ownership requirement that is a minimum fair market value of twofour times the value of the cash portion of the annual base retainer (which currently equates to $360,000)$400,000). The Chairman of Although there is not a fixed compliance period, it is expected that new directors will likely reach the Board is anon-officer employee position. In 2018, in connectionownership requirements within five years from their appointment date. All directors, except for recently appointed directors Mses. Duggirala and Johnson, are compliant with the review of governance matters described above, and with the advice of Pay Governance LLC, the special committee of independentCompany’s stock ownership requirements.
Non-Employee Directors recommended, and the Board approved, effective May 1, 2018, annual compensation for the redesigned role of Chairman of the Board equal to 150% of the annual base retainer payable tonon-employee directors, inclusive of the cost ofbenefits-in-kind disclosed in footnote (3) below, with the remaining amount payable in cash. The Company will continue to furnish administrative staff support to Mr. Adderley related to his duties as Chairman of the Board.Deferred Compensation Plan During 2017, theThe Company established theNon-Employee Directors Deferred Compensation Plan (“DDCP”), which providesnon-employee Directors directors with the opportunity to defer all or a portion of all fees payable to them, pursuant to a valid deferral election. The DDCP is anon-qualified plan that allows for the deferral of all or a portion of annual cash payments to a notional account with investment fund choices that mirror those provided to participants in the Company’s Management Retirement Plan (“MRP”); in. In addition to those fund choices, the Plan also includes the option to defer annual cash payments into Company common stock units.Non-employee Directors directors may also elect to defer all or a portion of their annual stock retainer into Company common stock units. Participants may elect to receive distributions from their DDCP account at the time they cease
| | | | | | | | | 41 | |
Director Compensation to be a Directordirector of the Company or at a future date that is between one and ten years following the date they cease to be a Directordirector of the Company.Non-employee Directors directors can elect to have distributions from the DDCP made in either a lump sum or in annual installment payments made over a two to ten yeartwo-to-ten-year period. The following table sets forth the compensation paid during 20172023 to the Directors other thanCompany’s non-employee directors. Mr. Corona, ourQuigley received no compensation for his services as a director in 2023. Mr. Quigley’s compensation as President and Chief Executive Officer whose compensation is disclosed in the Compensation Discussion & Analysis section of this Proxy Statement. 2023 Director Compensation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Fees Earned
or Paid in
Cash(1) | | | Stock
Awards(2) | | | Option
Awards | | | Non-Equity
Incentive Plan
Compensation | | | Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings | | | All Other
Compensation | | | Total | | T.E. Adderley | | | – | | | | – | | | | – | | | | – | | | | – | | | | 1,007,544 | | | | $1,007,544 | (3) | C.M. Adderley | | | $100,010 | | | | $79,990 | | | | – | | | | – | | | | – | | | | – | | | | $180,000 | | G.S. Adolph | | | $16,667 | | | | $13,333 | | | | – | | | | – | | | | – | | | | – | | | | $30,000 | | R.S. Cubbin | | | $115,010 | | | | $79,990 | | | | – | | | | – | | | | $15,752 | | | | – | | | | $210,752 | | J.E. Dutton | | | $110,010 | | | | $79,990 | | | | – | | | | – | | | | $30,354 | | | | – | | | | $220,354 | | T.B. Larkin | | | $100,010 | | | | $79,990 | | | | – | | | | – | | | | – | | | | – | | | | $180,000 | | L.A. Murphy | | | $120,010 | | | | $79,990 | | | | – | | | | – | | | | – | | | | – | | | | $200,000 | | D.R. Parfet | | | $140,010 | | | | $79,990 | | | | – | | | | – | | | | – | | | | – | | | | $220,000 | | H. Takahashi(4) | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | | | | – | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Fees Earned
or Paid in
Cash(1) | | Stock
Awards(2) | | Award
Options | | Non-Equity
Incentive Plan
Compensation | | Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings | | All Other
Compensation | | Total | | | | | | | | | Gerald S. Adolph | | | $ | 115,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | $ | 196,960 | | | | | — | | | | $ | 436,960 | | | | | | | | | | George S. Corona | | | $ | 100,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | $ | 112,414 | | | | | — | | | | $ | 337,414 | | | | | | | | | | Robert S. Cubbin | | | $ | 115,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | $ | 205,314 | | | | | — | | | | $ | 445,314 | | | | | | | | | | Amala Duggirala | | | $ | 100,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | $ | 116,807 | | | | | — | | | | $ | 341,807 | | | | | | | | | | InaMarie F. Johnson | | | $ | 100,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | $ | 77,037 | | | | | — | | | | $ | 302,037 | | | | | | | | | | Terrence B. Larkin | | | $ | 150,000 | | | | $ | 165,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | $ | 315,000 | | | | | | | | | | Leslie A. Murphy | | | $ | 120,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | $ | 166,964 | | | | | — | | | | $ | 411,964 | | | | | | | | | | Donald R. Parfet | | | $ | 100,000 | | | | $ | 125,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | $ | 225,000 | |
| (1) | Two of our directors deferred the following amounts from their 2023 cash retainer fee: Mr. Adolph – $115,000 and Ms. Duggirala – $100,000. |
| (2) | Represents the aggregate fair market value of grants awarded on May 17, 2023. Each director received a grant of 6,815 shares of the Company’s Class A Common Stock having a fair market value of $18.34 per share. Each of Mr. Adolph, Mr. Corona, Mr. Cubbin, Ms. Duggirala, Ms. Johnson, and Ms. Murphy deferred 100% of their 2023 annual stock grant into deferred common stock units. |
| | | | | | 42 | | 26 | | |
Director Compensation
(1) TwoBeneficial Ownership of our directors deferredShares
The following table sets forth, as of March 21, 2024, (i) the following amounts from their 2017 cash retainer fee: Mr. Cubbin – $46,004; and Ms. Dutton – $110,010. Mr. Adolph was appointed as a Director effective March 7, 2018 and received a pro rata amount of the annual cash retainer fee fornon-employee Directors. (2) Represents the aggregate fair market value of grants awarded on May 11, 2017. Each Director received a grant of 3,493 sharesbeneficial ownership of the Company’s Class A common stock having a fair market value of $22.90 per share. Mr. Cubbin deferred 40% of his 2017 annual stock grant into deferred common stock units; and Ms. Dutton deferred 100% of her 2017 annual stock grant into deferred common stock units. Mr. Adolph received a pro rata grant of 450 sharesB Common Stock by each person known by the Company to own beneficially more than 5% of the Company’s Class A common stock having a fair market value of $29.63 per share on the award date of March 7, 2018.
(3) As an employee, Mr. Adderley is eligible to participate in the Company’s benefit plansB Common Stock, and Management Retirement Plan. Other compensation includes base salary of $958,100, employer provided life insurance in the amount of $17,304, the incremental cost to the Company for personal use of airplane totaling $29,902, and a Medicare taxgross-up on the Company’s contributions to the Management Retirement Plan in the amount of $2,238. Mr. Adderley is not eligible to participate in the Company’s Short- Term Incentive Plan or Equity Incentive Plan. As discussed above, Mr. Adderley’s annual compensation for services as Chairman of the Board has been revised effective May 1, 2018.
(4) Mr. Takahashi serves on the Board as the designated representative of our joint venture partner, PERSOL HOLDINGS CO. LTD., and receives no compensation for his service as Director.
| | | | | | | 27 | | |
Beneficial Ownership of Shares
BENEFICIAL OWNERSHIP OF SHARES
Under regulations of the Securities and Exchange Commission, persons who have power to vote or dispose of common stock of the Company, either alone or jointly with others, are deemed to be beneficial owners of the common stock.
Set forth in the following table is(ii) the beneficial ownership of the Company’s Class A and Class B common stock on March 19, 2018 of (i)Common Stock by (a) each person known by the Company to own beneficially more than five percent of the Class B Common stock, (ii) each Directordirector (each of whom is a nominee for election as a Directordirector at the Annual Meeting of Stockholders)Meeting), (iii)(b) each of the Named Executive Officers,named executive officers, and (iv)(c) all Directorsdirectors and Executive Officersexecutive officers as a group.
| | | | | | | | | | | | | | | | | | | | Class A Common Stock | | Class B Common Stock | | Directors and Named Executive Officers(1) | | Number of Shares
and Nature of
Beneficial Ownership | | | Percent
of Class | | Number of Shares
and Nature of
Beneficial Ownership | | | Percent of
Class | T. E. Adderley, Chairman of the Board | | | 1,514,686 | (2) | | 4.2 | | | 3,213,265 | (3) | | 94.0 | C. M. Adderley, Director | | | 340,398 | (4) | | 1.0 | | | 425 | (4) | | * | G.S. Adolph, Director(5) | | | 450 | | | * | | | — | | | * | C. T. Camden, Former Director and Executive Officer | | | 252,751 | | | * | | | 100 | | | * | G. S. Corona, Director and Executive Officer | | | 211,767 | | | * | | | 100 | | | * | R.S. Cubbin, Director | | | 14,276 | (6) | | * | | | 100 | | | * | J. E. Dutton, Director | | | 27,714 | (6) | | * | | | 100 | | | * | T. B. Larkin, Director | | | 23,249 | | | * | | | 100 | | | * | L. A. Murphy, Director | | | 22,695 | | | * | | | 100 | | | * | D. R. Parfet, Lead Director | | | 23,520 | | | * | | | 100 | | | * | H. Takahashi, Director | | | 1,576,169 | (7) | | 4.0 | | | 1,475 | | | * | S.S. Armstrong, Executive Officer | | | 40,900 | | | * | | | — | | | * | T.S. Carroll, Executive Officer | | | 102,957 | | | * | | | 100 | | | * | P.W. Quigley, Executive Officer | | | 100,577 | | | * | | | 100 | | | * | O.G. Thirot, Executive Officer | | | 61,569 | | | * | | | 10 | | | * | All Directors and Executive Officers as a Group (17 persons) | | | 4,147,446 | | | 12.0 | | | 3,216,075 | | | 94.0 |
| | | | | | | | | | | | Class B Common Stock | | Greater than Five Percent Class B Stockholders | | Number of Shares and Nature of Beneficial
Ownership(1) | | Percent of Class | | | | Terence E. Adderley Revocable Trust K | | 3,139,940 | | 94.5% |
* Less than 1%
(1) Mr. Camden retired as President and CEO of the Company effective May 10, 2017.
(2) Includes 1,345,202 shares held directly; 30,000 shares in a charitable trust of which Mr. Adderley is aco-trustee with Comerica Bank & Trust, N.A.; 100,000 shares in an irrevocable trust, of which he is a beneficiary; 38,484 shares in five separate trusts of which Mr. Adderley is aco-trustee with Comerica Bank & Trust, N.A.; and 1,000 shares held by his spouse.
(3) Includes 3,139,940 shares held by the Terence E. Adderley Revocable Trust K of which Mr. Adderley is sole trustee and has sole investment and voting power; 71,825 shares in an irrevocable trust, of which he is beneficiary and has no voting and investment power; 1,000 shares held by his spouse of which he has shared voting and investment power; and 500 shares held in five separate trusts of which he is aco-trustee with shared voting and investment power, in which he has no equity interest.
(4) Includes 190,306 shares of Class A stock and 200 shares of Class B stock held in two separate trusts of which Ms. Adderley is one of two individual trustees with Comerica Bank & Trust, N.A. as Corporate Trustee.
(5) Mr. Adolph was appointed to the Company’s Board of Directors on March 7, 2018.
(6) Includes 3,446 shares for Mr. Cubbin and 3,534 shares for Ms. Dutton indirectly held in the Company’sNon-Employee Directors Deferred Compensation Plan.
(7) Mr. Takahashi is the Director, Deputy Vice President and COO, PERSOL HOLDINGS CO., LTD (formerly Temp Holdings Co., Ltd.) which entered into a strategic alliance with the Company in 2010. Mr. Takahashi is the designated representative of PERSOL HOLDINGS CO., LTD, which owns the reported shares. Mr. Takahashi disclaims beneficial ownership of the shares held by PERSOL HOLDINGS CO., LTD.
| | | | | | | | | | | | | | | | | | | | | | | | Class A Common Stock | | Class B Common Stock | | Directors and Named Executive Officers | | Number of Shares and
Nature of Beneficial
Ownership | | Percent of
Class | | Number of Shares and
Nature of Beneficial
Ownership | | Percent of
Class | | | | | | Directors: | | | | | | | | | | | | | | | | | | | | | | | | | | Gerald S. Adolph | | | | 47,559 | (2) | | | | * | | | | | 100 | | | | | * | | | | | | | George S. Corona | | | | 92,886 | (2) | | | | * | | | | | 100 | | | | | * | | | | | | | Robert S. Cubbin | | | | 54,125 | (2) | | | | * | | | | | 100 | | | | | * | | | | | | | Amala Duggirala(3) | | | | 17,175 | (2) | | | | * | | | | | — | | | | | * | | | | | | | InaMarie F. Johnson(3) | | | | 15,880 | (2) | | | | * | | | | | — | | | | | * | | | | | | | Terrence B. Larkin | | | | 49,843 | | | | | * | | | | | 100 | | | | | * | | | | | | | Leslie A. Murphy | | | | 48,292 | (2) | | | | * | | | | | 100 | | | | | * | | | | | | | Donald R. Parfet | | | | 93,485 | | | | | * | | | | | 100 | | | | | * | | | | | | | Named Executive Officers: | | | | | | | | | | | | | | | | | | | | | | | | | | Peter W. Quigley (also a director) | | | | 346,996 | | | | | * | | | | | 100 | | | | | * | | | | | | | Olivier G. Thirot | | | | 175,113 | | | | | * | | | | | 10 | | | | | * | | | | | | | Daniel H. Malan | | | | 83,373 | | | | | * | | | | | — | | | | | * | | | | | | | Vanessa P. Williams | | | | 58,587 | | | | | * | | | | | 100 | | | | | * | | | | | | | Dinette Koolhaas(4) | | | | 46,042 | | | | | * | | | | | — | | | | | * | | | | | | | All directors and executive officers as a Group (17 persons) | | | | 1,292,312 | | | | | 3.9 | | | | | 810 | | | | | 0.0 | |
| (1) | This information is based on the Schedule 13D (the “13D”) filed with the SEC on October 19, 2018 on behalf of the Terence E. Adderley Revocable Trust K (“Trust K”) and the three co-trustees of Trust K. Trust K was created by Terence E. Adderley, the Company’s former Chairman of the Board, during his lifetime as a revocable trust, with Mr. Adderley serving as the trustee of and retaining the right to revoke the trust during his lifetime. Mr. Adderley funded Trust K, including a gift of 3,139,940 shares of Class B Stock. Mr. Adderley died on October 9, 2018, at which time the trust became irrevocable. In accordance with the provisions of Trust K, Andrew H. Curoe, David M. Hempstead and William U. Parfet, were appointed as successor co-trustees of Trust K following Mr. Adderley’s death. They are required by the provisions of Trust K to act by majority vote to exercise voting or investment power over the Class B stock held by Trust K and have stated in the 13D that the filing is not an admission that the co-trustees are beneficial owners of such Class B stock. Mr. Curoe may be deemed the beneficial owner of an additional 42,825 shares of Class B Stock held by trusts where Mr. Curoe acts as trustee or co-trustee, including ten trusts holding 100 shares of Class B Stock each, and one trust holding 41,825 shares of Class B Stock. The business address of the Terence E. Adderley Revocable Trust K and each of Messrs. Curoe, Hempstead and Parfet is c/o Andrew H. Curoe, 6th Floor at Ford Field, 1901 St. Antoine Street, Detroit, Michigan 48226. |
| (2) | IIncludes 43,532 shares for Mr. Adolph, 24,647 shares for Mr. Corona, 43,295 shares for Mr. Cubbin, 17,175 shares for Ms. Duggirala, 15,880 shares for Ms. Johnson, and 35,597 shares for Ms. Murphy indirectly held in the Company’s Non-Employee Directors Deferred Compensation Plan. |
| (3) | Ms. Duggirala and Ms. Johnson were appointed to the Company’s Board of Directors on January 12, 2022. |
| (4) | As part of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment with the Company terminated on March 31, 2024. |
| | | | | | | 28 | 43 | | |
Beneficial Ownership of Shares Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports Under the securities lawsSection 16(a) of the United States,Exchange Act requires the Company’s Directors, Executive Officers,directors and any personcertain officers, as well as persons who beneficially ownsown more than 10% of the outstanding shares of common stock, (collectively, the “Reporting Persons”), are required to reportfile reports regarding their initial stock ownership and subsequent changes to their ownership of the common stock and any changes in that ownership towith the SEC. Specific due dates
Based solely upon a review of filings for these reports have been established and pursuant to applicable rules, the Company is required to report in its Proxy Statement any failure to file by these due dates. Based on certifications received from the Reporting Persons, and on copies of the reports that such persons have filedfiscal year 2023 with the SEC and related written representations that no other reports were required, we believe that all requiredSection 16(a) reports of Reporting Persons were filed on a timely with the SECbasis, except a Form 4 for 2017.Mr. Corona due November 16, 2023, which was filed on November 17, 2023, to report his gift of 200 shares of Class A Common Stock to Oakland University on November 14, 2023. | | | | | | | | | 44 | | 29 | | |
Proposal 2:2 – Advisory Vote to Approve the Company’s Executive Compensation PROPOSAL 2 - ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION
As described in the following Compensation Discussion and Analysis, our executive compensation programs are designed to align the interests of our Executive Officersexecutive officers with those of our shareholders by tying a significant portion of the compensation they receive to Company performance, and by providing a competitive level of compensation in order to attract, retain, and reward Executive Officers,executive officers who are critical to the long-term success of our business. Under these programs, our Named Executive Officersnamed executive officers are rewarded for the Company’s financial performance, individual performance, and long-term potential,value creation, as well as to facilitate retention, and reflect market realities. Please read the Compensation Discussion and Analysis for additional details about our executive compensation programs, including information about the fiscal year 20172023 compensation of our Named Executive Officers.named executive officers. As required by Section 14A of the Exchange Act, this proposal, commonly referred to as a “say on pay”“say-on-pay” proposal, seeks a stockholdershareholder advisory vote on our Named Executive Officers’named executive officers’ compensation, as disclosed in this Proxy Statement pursuant to Item 402 of RegulationS-K and in the Compensation Discussion and Analysis, through the following resolution: “RESOLVED, that the Company’s stockholdersshareholders approve, on an advisory basis, the compensation of the Named Executive Officers,named executive officers, as disclosed in the Company’s Proxy Statement for the 20182024 Annual Meeting of StockholdersShareholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the 20172023 Summary Compensation Table, and the other related tables and disclosure.” Thesay-on-pay vote is advisory;advisory and, therefore, not binding on the Company. Our Board of Directors and our Compensation and Talent Management Committee value the opinions of our stockholdersshareholders and considersconsider the result of the advisory vote in designing and evaluating our executive compensation programs. The Board of Directors recommends a vote “FOR” the approval of the compensation of our Named Executive Officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.
| | | | | | | | | | 30 | 45 | | |
Compensation Discussion and Analysis COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Discussion and Analysis section of this Proxy Statement provides an overview of our executive compensation philosophy and objectives, andobjectives. This section describes the material elements of our executive compensation programs, the compensation decisions the Compensation and Talent Management Committee (the “Committee”) has made under those programs, key factors that were considered, and provides details of the compensation paid to our Named Executive Officers.named executive officers. | | | | | | | | | | | | | | 2023 Named Executive Officers | | | | | | | | Our named executive officers for 2023, as defined by the SEC, were as follows: | | | | | | | | | | | | | | | | | | |  | | | | Peter W. Quigley President and Chief Executive Officer | | | | | | | | | | | | | | | | | | |  | | | | Olivier G. Thirot Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | |  | | | | Daniel H. Malan Senior Vice President and President Science, Engineering & Technology | | | | | | | | | | | | | | | | | | |  | | | | Vanessa P. Williams Senior Vice President, General Counsel and Corporate Secretary | | | | | | | | | | | | | | | | | | |  | | | | Dinette Koolhaas Senior Vice President and President International1 | | | | | | | | | | | |
| 1 | As part of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment with the Company terminated on March 31, 2024. |
The Compensation Discussion and Analysis is organized in the following sections: CD&A Table of Contents | | | | | | | 7.46 | Tax and Accounting Considerations
| | |
2017 Named Executive Officers
Our Named Executive Officers for 2017, as defined by the SEC, were as follows:Compensation Discussion and Analysis
| | | Name | | Title
Biographical Information | | George S. Corona(1)
| President and Chief Executive Officer | Olivier G. Thirot(2)
| | Senior Vice President and Chief Financial Officer | Teresa S. Carroll
| | Executive Vice President, President, Global Talent Solutions and General Manager, Sales, Marketing and Human Resources | Peter W. Quigley President and Chief Executive Officer Age: 62 | | Mr. Quigley served as Executive Vice President, President, Global Staffing, and General Manager, Global Information Technology, Global Business Services and Global Service from May 2017 through September 2019. He served as the Company’s Chief Administrative Officer and General Counsel from May 2015 to May 2017, General Counsel from January 2013 to May 2015. Mr. Quigley led the Company’s Global Client Relationships group from January 2008 to December 2012 and served in multiple roles including Sr. Director of Service, Vice President, Contract Administration, and Vice President, Associate General Counsel from the time he joined the company in November 2002 until December 2007. Prior to joining the Company, Mr. Quigley held a variety of roles at Lucent Technologies and AT&T Corporation. | | | Steven S. ArmstrongOlivier G. Thirot
Executive Vice President and Chief Financial Officer Age: 63 | | Mr. Thirot served as the Company’s acting Chief Financial Officer from March 2015 to January 2016 when he was appointed Chief Financial Officer. He served as the Company’s Senior Vice President and General Manager, U.S. OperationsChief Accounting Officer from September 2014 to March 2015. Mr. Thirot was Vice President, Finance for the Company’s EMEA business beginning in 2008 when he joined the Company and assumed added responsibility for the APAC business in 2011. Prior to joining the Company, he worked at L. Raphael as Chief Financial Officer and prior to that, he spent 18 years with Bacardi, LTD in various leadership positions. | | | Carl T. Camden(3)Daniel Hugo Malan
Senior Vice President President, Kelly Science, Enginerring, Technology & Telecom Age: 54 | | FormerMr. Malan has served as the Company’s President of Science, Engineering, and Technology since March 2020. Prior to that he worked at EmployBridge for three years, serving as President of its Commercial Business from December 2016 to July 2018 before being named Chief Operating Officer in August 2018 through November 2019. From November 2014 to November 2016, Mr. Malan was Executive Vice President and President, North America Staffing for CDI Talent and Technology Solutions, and from March 2009 to October 2014 served as Senior Vice President and President of operating units for Sears Holdings. | | | Vanessa P. Williams Senior Vice President General Counsel and Corporate Secretary Age: 52 | | Ms. Williams has served as General Counsel since joining the Company in September 2020 and was recently appointed Corporate Secretary effective October 1, 2023. Previously, she worked from July 2006 to September 2020 in a variety of roles for IHS Market including Senior Vice President, Legal, Risk and Compliance; Vice President, Divisional Counsel-Transportation; Vice President, Chief ExecutiveLegal Counsel and Global Privacy Officer (IHS, Inc.); Vice President and Deputy General Counsel and Chief Compliance Officer; Deputy General Counsel; and Associate General Counsel (R.L. Polk & Co.). In addition, Ms. Williams has been a member of Horizon Bank’s board of directors since 2022 and Horizon Bancorp, Inc.’s board of directors since 2023. | | | Dinette Koolhaas Senior Vice President President, Kelly International Age: 55 | | Ms. Koolhaas previously served as Vice President, EMEA Operations from September 2013 to February 2017, at which time she took on Managing Director responsibilities for EMEA until July 2020 when she took on her current role. Prior to that, she was Vice President and Regional Manager of Western Europe from June 2008 through August 2013. Prior to joining the Company in 2008, Ms. Koolhaas served in various roles with USG People. |
(1) Mr. Corona was appointed President
| | | | | | | | | 47 | |
Compensation Discussion and Chief Executive Officer effective May 10, 2017.Analysis (2) Mr. Thirot was appointed Executive Vice President and Chief Financial Officer effective March 1, 2018.
(3) Mr. Camden retired from the Company effective May 10, 2017.
Executive Summary Fiscal 20172023 Performance We areKelly’s philosophy as a leadertalent company is rooted in providing workforce solutions. We connect people with workthe conviction that our business makes a difference daily – in ways that enrich theirthe lives of our employees and enable companies to access skilled talent that can move their businesses forward.networks, for our customers, in the local communities we serve, and in the broader economy. As work has evolved so has our range of solutions, growing over the years to reflect the changing needs of our customers and the changing nature of work itself. As workforce management has become more complex, we have developedKelly’s simple yet powerful noble purpose, “We connect people to work in ways that enrich their lives,” continues to guide our strategy and actions. Kelly remains committed to being a leading talent supply chain management approach to help many of the world’s largest companies plan for and manage their workforces. Innovative solutions supporting this approach span outsourcing, consulting, recruitment, talent advisory, career transition and vendor management services.
In early 2017, we restructured components of our previous Americas Commercial, Americas PT, and OCG segments under a single delivery organization, triggering a changeprovider in our operating structure. We now provide staffing through our branch networksspecialty areas and in our Americas and International operations, with commercial and specialized professional/technical staffing businesses in the Americas and Europe, respectively. In July 2016, we moved our APAC staffing operations into our expanded joint venture with PERSOL HOLDINGS (formerly Temp Holdings), PERSOL KELLY Asia Pacific (the “JV”), enabling us to more efficiently provide staffing solutions to customers throughout the APAC region via the JV. We also provide a suite of innovative talent fulfillment and outcome-based solutions through our Global Talent Solutions (“GTS”) segment, which delivers integrated talent management solutions to meet customer needs across the entire spectrum of talent categories. Using talent supply chain strategies, GTS helps customers plan for, manage and execute their acquisition of contingent labor, full-time labor and free agents, and gain access to service providers and quality talent at competitive rates with minimized risk.
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Compensation Discussion and Analysis
Our long-term strategic objective is to create stockholder value by delivering a competitive profit from the best workforce solutions and talent in the industry. To achieve this, we are focused on the following areas:
Continue to build our core strengths in branch-delivered staffing in key markets where we have scale or specialization;compete. While executing our strategy, we will continue to demonstrate our expected behaviors and actions:
Maintain our position as a market-leading provider of talent management solutions in our GTS segment; and
Lower our costs through deployment of efficient service delivery models.
2017 was a year of strategic and operational progress that demonstrated our commitment to profitable growth. We delivered solidtop-line growth and increased earnings, even as we invested in our future. EarlyThe described actions detailed below in the year, we reorganized our operating segments and restructured to create a more efficient and focused delivery organization. We invested in our Americas Staffing and International Staffing operations by adding additional sales and recruiting talent. In GTS, we are exercising price discipline and are continuing to invest in higher margin outcome-based and outsourcing solutions that align with market demands. In September 2017, we completed our acquisition of Teachers On Call, which exemplifies our commitment to focus and grow in solutions where we see outsized market potential. And finally, we are accelerating investment in initiatives to enhance technology and process automation.
Key performance highlights for 2017 include:
| | | | | Earnings from operations for the full year 2017totaled $83.3 million, compared to $63.2 million in2016 | | | | We delivered gross profit growth of more than 5%,or nearly 9% when excluding our APAC staffingoperation from the first half of 2016, and our grossprofit rate increased 60 basis points to 17.8%
| | | | | | Conversion rate, or return on gross profit, continuesto be a key metric to measure our drive for profitablegrowth. Our 2017 conversion rate was 8.7%compared to 7.0% in 2016
| | | | Cash from operating activities and free cash flow generation increased year over year |
Kelly continues to focus on accelerating the execution of our strategy and making the necessary investments and adjustments to advance that strategy. We have set our sights on becoming an even more competitive, consultative and profitable company, and we are reshaping our business to make that vision a reality. We will measure our progress against both revenue and gross profit growth, as well as earnings and conversion rate. The goals we have established are based on the current economic and business environment, and may change as conditions warrant.
Key Executive Compensation Program Highlights for Fiscal 20172023 section provided fiscally responsible reward programs while also providing targeted investments needed to reward employees for achieving important financial and operational goals, and to support the longer-term retention of critical talent. As our strategy evolves and we manage through the impact of inflation and market uncertainty, we continue to move forward with our specialization strategy. These specialties represent areas where we see the most robust demand, the most promising growth opportunities, and where we believe we excel in attracting and placing talent. Kelly’s business model brings together both staffing and outcome-based solutions under a single specialty leader and aggregates assets to accelerate specialty growth and profitability. We believe this specialty structure gives us greater advantages in the market, and we expect our disciplined focus will enable us to achieve greater efficiencies and deliver profitable growth coming out of a period of elevated economic uncertainty. Key Executive Compensation Program Highlights for Fiscal 2023 We believe compensation should align with and enhance long-term shareholder value. Our pay-for-performance philosophy ensures that a significant portion of compensation for our senior officers is “at risk” and reflects our business performance. Kelly continued to focus on striking a balance of providing competitive compensation programs that attract, reward, and retain high performing talent while doing so in a fiscally responsible framework. Our named executive officers experienced the following outcomes for 2023 as a result of Company performance and management’s decision to focus on the Company’s transition in becoming a more profitable talent solutions company: | ● | | Performed a targeted annual base salary review process with one named executive officer receiving a salary increase in 2023; |
| | | | | | 48 | | | |
Compensation Discussion and Analysis | ● | | With respect to our short-term incentive plan: |
funding for all participants focused 100% on total Company earnings from operations (“EFO”) returned to setting threshold at 50% of target and straight-line interpolation between threshold and target; continued with a maximum payout opportunity of 200% of target; continued emphasis on individual performance for determining final payouts; and 2023 Short Term Incentive Plan (“STIP”) was funded at 94% of target levels based on total company performance. | ● | | With respect to our long-term incentive plan: |
| • | | continued with three one-year annual goals for performance-based Long-Term Incentives (“LTI”) program; |
continued with 100% cliff-vesting at the end of the three-year performance period for any earned performance-based LTI; 2023 LTI target award opportunity was granted in a mix of 75% weighting in the form of Performance Shares and 25% weighting in the form of time-based vesting restricted shares for the CEO and a mix of 60% weighting in the form of Performance Shares and 40% weighting in the form of time-based vesting restricted shares for all other named executive officers; year one of the 2023-2025, year two of the 2022-2024 and year three of the 2021-2023 Performance Shares were earned in aggregate, at 50% of target for the 2023 assessment period; | • | | one-third of the 2021 special equity award Key Employee Equity Plan (“KEEP”) was earned during 2023; and |
granted special long-term equity recognition award to one named executive officer. Annual Say on Pay Vote The frequency of the Company’s Say on Pay vote is annual and, as such, the Committee considers the shareholder advisory vote on executive compensation as disclosed in the Company’s Proxy Statement each year. In 2023, 98.57% of the shares represented at the meeting approved the Say on Pay proposal. The Committee considered this result as a factor in its decision to maintain the general design of the Company’s compensation programs. However, we continue to evaluate our executive compensation program and make changes to further align it with our strategic priorities and to reward both shortshort- and long-term business success. We believe we have designed a program that aligns with stockholdershareholder interests, incentivizes growth and operational excellence, and demonstrates a clear linkage between compensation and performance. The program continues to seek to ensure pay for performance and minimize incentives for management to take excessive risks. The Committee worked with management and its independent compensation consultant, as described later in this document, to review current compensation programs, including the incentive plans, and made the decisions described below in 2017.plans. Reflecting the Company’s commitment to driving a high-performance culture our executive compensation program emphasizesat-risk incentive awards that can be earned over one and three-year periods. As our business evolves and we strive for performance that is better than the prior year, the design of our incentive plans has changed to ensure continued alignment to our business strategy for driving long-term stockholder value. The executive compensation program, particularly the annual and long-term incentive plans, are designed to directly support the Company’s strategic transformation to a more efficient, profitable, growth-focused, and performance-driven organization. Incentive payouts earned for performance cycles ending in 2017 are commensurate with the earnings, gross profit, expense management and total stockholder return results that were achieved. Annual incentive awards for corporate performance were earned at approximately target, commensurate with our performance on earnings, gross profit and expense goals. Long-term incentive
| | | | | | | 32 | | |
Compensation Discussion and Analysis
awards for the performance share periods ending in 2017 were earned at 115% of target for gross profit results and 200% of target for our total shareholder return relative to the market. The 2018 incentive designs, which are briefly summarized below and will be discussed in further detail in next year’s proxy filing, are similar to the 2017 incentive designs discussed below, with the requirement for performance set meaningfully above 2017 actual results to earn the target award.
The BoardCompany has adopted two plans that provide the framework for incentive compensation opportunities for our Executive Officers.senior officers, a group that includes our named executive officers. The Short Term
| ● | | The Short-Term Incentive Plan (“STIP”) provides for annual cash-based incentive opportunities that are based upon the achievement of one or more performance measures, as established by the Committee. The Equity Incentive Plan (“EIP”) provides the Committee the ability to grant long-term incentive (“LTI”) opportunities, in various award types, that focus on the long-term performance of the Company and align the interests of Executive Officers with those of stockholders. The Committee amended the EIP at their meeting on February 15, 2017 approving the following key changes to the EIP, which was approved by stockholders at the Company’s 2017 Annual Meeting:
| – | Provide for a share reserve that is a fixed number of shares instead of an “evergreen”, which refreshes each year; and
|
| – | Add a definition ofchange-in-control (“CIC”) and provide for the treatment of long-term incentives upon a “double trigger”: a CIC and qualifying termination of employment.
|
2017 STIP Design and Results
Approved multiple, balanced performance measures for the corporate component of the 2017 STIP. 2017 target goals for each measure were set at budgeted numbers, which were substantially higher than 2016 actual results:
| – | Earnings from Operations (weighted 50%);
|
| – | Return on Gross Profit (Conversion Rate) (weighted 25%); and
|
| – | Total Gross Profit (weighted 25%). “Total Gross Profit” focuses all business units toward contributing to the success and overall Company performance that supports our business strategy.
|
Maintained “gatekeeper” goal that must be achieved in order to earn a payout under any STIP measure
(Earnings from Operations measure must achieve at least 60% of target).
Executive Officers who are responsible for providing direct leadership to a business unit have at least 50% of their STIP award opportunity based on the achievement of specific business unit measures and the remainder of their award based on the corporate component.
Based upon 2017 results for the three performance measures of the corporate component of the STIP, the Committee approved payouts on the 2017 STIP corporate component equal to 99.98% of target.
2017-2019 LTI Design
Maintained LTI grant mix for Executive Officers that heavily emphasizesat-risk performance-based pay opportunities through the following equity vehicles:
| ● | | – | Performance Share Units – 75%The Equity Incentive Plan (“EIP”) provides the Committee the ability to grant long-term incentive (“LTI”) opportunities, in various award types, that focus on the long-term performance of LTI mix;the Company and
|
| – | Restricted Stock Awards/Units (“RSAs/RSUs”) – 25% align the interests of LTI mix.senior officers with those of shareholders.
|
Approved three LTI performance measures for the 2017-2019 Performance Share Awards, moving from four measures used in the 2016 grants for a simplified design. 2017 target financial goals for each measure were set at budgeted numbers, which were substantially higher than 2016 actual results. Awards earned, if any, are based on performance assessed over the three-year period.
| | –Return on Sales (weighted 33.3%);
| | | |
| | – | Earnings Before Taxes plus Joint Venture (JV) Income (weighted 33.3%); and
|
| – | Relative Total Shareholder Return (“TSR”) (weighted 33.4%).
|
NOTE: The “Earnings Before Taxes plus Joint Venture (JV) Income” measure includes a“bottom-line” earnings measure to capture Joint Venture earnings and in support of our business strategy.
Maintained LTI grants that were approximately the same value as the 2016 LTI grants, which were reduced in value from the 2015 LTI grant to Senior Officers in support of the Company’s investment strategy and efforts to reduce costs.
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Compensation Discussion and Analysis Added a performance hurdle of “Positive Net Income” to the restricted stock units awarded to Executive Officers in 2017 that qualify awards for tax deductibility under 162(m).
Implemented practice of not paying dividends or dividend equivalents to Executive Officers on unearned and unvested restricted stock units granted during 2017.
2015-2017 LTI Results
Based on the Company’s strong stock price performance over the three-year period 2015-2017 as compared to the stock price performance of the S&P SmallCap 600 Index for the same period, the Committee approved the funding of the Relative TSR measure for the 2015-2017 LTI awards at 200% of target and shares vested on February 14, 2018.
Performance share awards previously approved by the Committee that were earned based uponone-year 2015 financial measures, “Return on Gross Profit” and “Gross Profit: OCG and PT” and achieved an average funding level of approximately 115% of target, were subject to an additional two years of vesting, 2016 and 2017. With the time-based requirement satisfied, these shares also became vested to participants, including the Executive Officers on February 14, 2018.
2017 Base Salary Decisions
Messrs. Corona and Quigley, and Ms. Carroll received base salary increases as a result of their promotions effective May 10, 2017. In addition, as a result of Mr. Thirot’s move from Swiss payroll and benefits to U.S. payroll and benefits effective January 1, 2017, a portion of his Swiss allowances were added to his U.S. salary. Senior Officers, including the Named Executive Officers, did not receive regular base salary increases in 2017 as part of the total compensation review process. This was in light of management’s and the Board’s views that corporate financial results for 2016 were not at desired levels and reflected a continued conservative approach in support of the Company’s investment strategy. Further explanation can be found under “Base Salary.”
The Committee believes these actions support the strategic direction of the Company and help position it for long-term success in achieving its goals. These compensation decisions and actions are discussed in more detail below.
Executive Compensation Philosophy, Objectives, and Design Our executive compensation philosophy is to provide market-based pay opportunities with incentive payouts aligned with the achievement of the Company’s overall shortshort- and long-term business strategies.strategy, performance goals, and results. The design of our executive compensation programs allocates total compensation to fixed and variable pay elements resulting in a mix of short-term and long-term pay elements. The Committee continually evaluates our executive compensation programs to ensure that the Company provides market-competitive opportunities that enable us to attract and retain highly qualified individuals to lead the organization and drive business success in the competitive and ever-changing business environment in which we operate.success. Our executive compensation programs are designed to achieve the following objectives: Pay-for-Performance Framework | | •● | | Align a significant portion of compensation with the achievement of multiple performance goals that motivate and reward executives based on Company, business unit, and individual performance results;results. | |
| | •● | | Attract and retain world-classexceptional talent with the leadership abilities and experience necessary to develop and execute business strategies, achieve outstanding results, and build long-term stockholder value;shareholder value. | |
| | •● | | Support the achievement of the Company’s vision and strategy;strategy. | |
| | •● | | Create an ownership mindset that closely aligns the interests of management with those of stockholders; andshareholders. | |
| | •● | | Provide an appropriate balance between the achievement of both short- and long-term performance objectives, with clear emphasis on affordability, managing the sustainability of the business, and mitigation of risk. | |
Pay for Performance Framework
The Committee believes that a majority of an Executive Officer’sa senior officer’s compensation should be “at risk” and based upon the achievement of corporate and business unit results, the Company’s share price performance, as well as individualthe individual’s performance. As a result, Executive Officerssenior officers participate in incentive programs that provide them with the opportunity to earn awards that are directly tied to the Company’s performance and that drive sustainable long-term stockholdershareholder value. The Company’s compensation programs provide an incentive for Executive Officerssenior officers to meet and exceed performance goals. Executives are held accountable for results and rewarded with above target payout amounts for performance that exceeds target goals. When target goals are not met, award payouts are designed to deliver below target payouts or no payouts. We believe the combination of our annual short-term incentive awards and long-term equity incentive awards align the interests of our Executive Officerssenior officers with the interests of our stockholders.shareholders. | | | | | | | 34 | | |
Compensation Discussion and Analysis
CEO and Other Named Executive Officers Pay Mix While we believe that a majority of an Executive Officer’sexecutive officer’s target compensation opportunity should be performance-based,performance- based, we do not have a specified formula that defines the overall weighting of each element. We believe that the higher a role is positioned within the organizational structure, the greater the emphasis on performance-based compensation should be. As such, the CEO has a greater percentage of his compensation opportunity that is performance-based through higher target opportunities for STIP and LTI, as compared to the compensation opportunities of the other Named Executive Officers. At risknamed executive officers. At-risk compensation consists of annual cash incentive awards and long-term equity awards (restrictedperformance shares and performance shares) that are contingent upon the achievement ofpre-established performance goals. Restricted shares, which are not classified as at-risk compensation, have value at vesting reflecting the Company’s stock price performance since date of grant, which aligns to shareholders’ experience. The following charts illustrate the 2017typical Target Total Direct Compensation mix for our President and CEO and the other Named Executive Officersnamed executive officers combined and includes the pay elements of base salary, STIP (at target), restricted shares, and performance shares (at target): 
| | | | | | | | | 50 | | 35 | | |
Compensation Discussion and Analysis Typical Target Compensation Mix 
Elements of Compensation for Named Executive Officers The Committee determines the elements of total direct compensation that we provide to our Executive Officers.senior officers, a group that includes the named executive officers. The elements of our fiscal 2017 executive compensation program of our named executive officers and the objectives for each are as follows: | | | | | | | | | COMPENSATION
ELEMENT Compensation Element | | TYPEType | | FORMConsiderations | | CONSIDERATIONSObjectives | | OBJECTIVESFor More
Information | | | | | | Base Salary | | Fixed Compensation | | Cash | | ●• Reviewed annually and adjusted
• Adjusted, when appropriate ● Determined based on role and scope of responsibilities, skills, experience, sustained individual contribution, and comparison to market-comparablemarket- comparable jobs
| | ●• Provide competitive compensation forday-to-day responsibilities
●• Attract and retain qualified Executive Officers and balancesenior officers
• Balance risk-taking | Short Term
Incentive Plan
(STIP)
| | VariableAt-Risk Performance-Based CompensationPage 54
| | Short-Term Incentive Plan (STIP) | | Variable At-Risk Performance- Based Compensation | | ●• Annual performance period
●• Target payout opportunity established as percentage of earnings for each Executive Officersenior officer based on role
●• Performance measures selected to align with our business strategy
●• Multiple performance measures that reflect key operational and financial measures of success
●• Payout based on achievement of predetermined goals
● “Gatekeeper” goal must be achieved for any award to be earned
| | ●• Motivate and reward Executive Officerssenior officers for achievement of critical near-term performance goals that support the Company’s strategic business objectives
| Long Term
Incentives
(LTI)
| | Page 61 | | | | | Long Term Incentives (LTI) | | Time-Based Fixed Compensation | | Restricted Stock | | Page 60 | | | Variable At-
Risk
Compensation
| | Stock- Settled | | ●• Accounts for 25% for CEO and 40% for other named executive officers of total LTI award opportunity
●• Shares vest ratably over fourthree years
● Performance hurdle as measured over the first year of the grant must be achieved for shares to be earned
| | ●• Align interests of Executive Officerssenior officers and stockholdersshareholders
●• Support retention
●• Support meaningful stock ownership
| | | | Variable At-Risk Performance- Based Compensation | | Performance Shares | | Page 57 | | | VariableAt-Risk Performance- Based Compensation | | | Performance Shares | | | | ●• Accounts for 75% for CEO and 60% for other named executive officers of total LTI award opportunity
●• Provides opportunity to earn shares based on achievement of multiple specific performance goals
● Relative TSR measure is• Given the continued complexity of goal setting in the current business environment, financial measures for a three-year period
● Financial measures2023-2025 LTI awards are based on three years of performance (payouts, if any, are based on the aggregationestablished and assessed independently for each of threeone-year performance goals)periods (2023, 2024, and 2025) with goals set early in each performance period
| | ●• Drive long-term value creation for stockholdersshareholders
●• Motivate and reward Executive Officerssenior officers for achievement of strategic business objectives over a three-year period
●• Align the interests of Executive Officerssenior officers with the long-term interests of the Company and stockholdersshareholders
| | |
| | | | | | | | | | 36 | 51 | | |
Compensation Discussion and Analysis 20182024 Executive Incentive Plans – Overview
For the 20182024 incentive plan designs, the Company continues to focus onpay-for-performance alignment by using multiple financial measures and Relative TSR to strongly drive our key business objectives and stockholdershareholder value. In support of this strategy, the Committee has approved the following: A combination of gross profit and earnings from operations measures, as well as Relative TSR, for the 2018-2020 incentive plan performance measures;
Continuation of a performance hurdle for the 2018 grant of RSUs for Executive Officers that must be achieved before shares become earned. Dividends on these shares will only be paid upon achievement of the performance hurdle and time vesting requirements; and
Voluntarily maintain many of the practices previously required for performance-based compensation under the former requirements of Section 162(m) of the Internal Revenue Code (the “Code”) as good governance of our performance-based plans.
DetailsAdditional details regarding the 20182024 incentive plan designs will be presented in our 2019 proxy filing.2025 Proxy Statement.
Process for Determining Executive Compensation Role of the Compensation and Talent Management Committee The Committee designs and administers the Company’s executive compensation programs and policies, including regularly reviewing the program and regularly reviews these programs and policies relative to itspolicy objectives, applicable new legal and regulatory practices, evolving best practices, and corporate governance trends. The Committee and members of the Board of Directors determine the compensation of the CEO. The CEO’s total compensation is comprisedthe same design as the other named executive officers consisting of base salary, STIP, and LTI award opportunities, and is the same design as the other Named Executive Officers.opportunities. The CEO does not participate in recommendations or discussions related to his own compensation. As part of its responsibility for executive compensation, the Committee annually reviews and determines the compensation of each of our Senior Officers,senior officers, including the Named Executive Officersnamed executive officers listed in the Summary Compensation Table of this Proxy Statement, based on each individual’sindividual performance, including consideration of ethical behavior, achievement of planned goals, relevant market comparisons, and the recommendations of the CEO.CEO, and other factors. The Committee reviews the costs and short- andshort-and long-term benefits of the compensation arrangements it considers and approves for Senior Officers.senior officers. AllThe responsibilities of the Committee responsibilities are defined in its charter, which can be found on the Company’s website atkellyservices.com.
Role of the Independent Compensation Consultant Since October 2014, the Committee has engaged Pay Governance LLC as itsis the Committee’s independent compensation consultant (the “Consultant”). The Committee considers analysis and guidance from the Consultant when making compensation decisions on plan design; the merits of various incentive plan performance measures; Executive Officersenior officer pay levels, including that of the CEO and our other executive officers, relative to peer group and other market data; composition of peer group companies; stock ownership requirements; and other pay practices. In addition, the Consultant updates the Committee on market trends and best practices in executive compensation and as requested, provides data and guidance on other items such as Directordirector compensation. The Committee uses its own independent judgment to make all decisions related to the compensation of the Company’s Executive Officers.senior officers.
During 2017,2023, the Consultant regularly attended Committee meetings and communicated with the Chairman of the Board the Committee Chairman, and the Committee Vice Chairman outside of Committee meetings. The Committee regularly meets with the Consultant in private session (without members of management). As directed by the Compensation and Talent Management Committee, the Consultant also met with the Corporate SecretarySenior Vice President and Chief Investor Relations, Executive CompensationPeople Officer (“Chief People Officer”), Senior Vice President, General Counsel and Communications OfficerCorporate Secretary (“Corporate Secretary”), and members of the Executive Compensation, Finance, and Corporate Governance teams of the Company. The Consultant maintains a direct reporting relationship to the Committee on all compensation matters. The Committee conducts an annual assessment of the Consultant’s independence, using factors established by Nasdaq Global Market.Nasdaq. The Consultant provided no services to the Company in 20172023 other than services to the Committee. The Committee reviewed and affirmed the independence of the Consultant as the Compensation Consultant to the Committee and concluded the work performed by the Consultant did not raise a conflict of interest. | | | | | | | 37 | | |
Compensation Discussion and Analysis
Role of Management The Committee consults with the CEO and Corporate Secretarythe Chief People Officer to obtain feedback with respect to the strategic direction of our executive compensation programs. The CEO makes recommendations for each of the Executive Officers with regard toexecutive officers about elements of their total compensation. He bases hisHis recommendations are based on the assessment of each Executive Officer’sexecutive officer’s performance, as well as the performance of their respective business or function.function and other factors. The Committee takes into consideration the recommendations of the CEO when determining the compensation of the other Executive Officers.executive officers. In addition, the CFO provides periodic financial updates and information to the Committee to aid in establishing incentive plan goals and determining payout amounts. The Committee consults with the Corporate Secretary and the Consultant on matters related to executive and director stock ownership requirements and director compensation. | | | | | | 52 | | | |
Compensation Discussion and Analysis Comparator Data The Committee uses third-party survey data for comparably sized general industry companies and available data from a select group of peer companies in determining the competitive positioning of our compensation programs, andprograms. Comparator data is also used as one of several inputs to establish the individual compensation opportunities of each of our Named Executive Officers.senior officers, including the named executive officers. Each Executive Officer’ssenior officer’s performance is reviewed (see ExecutiveSenior Officer Performance Reviews and Succession Planning below) and compensation decisions are made on an annual basis (or as an Executive Officer’sa senior officer’s duties and responsibilities change). Base salaries, target STIP, and target long-term incentive opportunities are benchmarked against a group of comparable executive positions in general industry companies of similar revenue size as reflected in multiple third-party surveys. We seek to establish target total direct compensation opportunities (defined as base salary, target STIP, and target long-term incentive) for our Named Executive Officersnamed executive officers that are withinnear a competitive range of the median of the competitive market data. Compensation ultimately earned from these opportunities can vary from the mediantargeted levels based on the company,Company, business unit, and individual performance. Various other factors are taken into consideration and in certain circumstances, we may target pay above or below the competitive median. Individual target total direct compensation may be above or below the median depending on Company performance, cost considerations, the role’s scope of responsibilities, individual experience and performance, and any succession, retention, or internal equity considerations. Prior to 2015, theThe Company hadhas taken a conservative approach to target long-term incentive opportunities for Senior Officers that were generally well below market median. The 2015 LTI design brought target total direct compensation opportunities, on average, closer to market median levels for our Senior Officers. Insenior officers. This approach is in support of the Company’s efforts to reduce costs in connection with its investment strategy management voluntarily requested and its goal to become more profitable. In setting 2023 target compensation, the Committee agreed, that the 2016 and 2017 LTI levels for Senior Officers would be reduced from the 2015 levels, as explained further in the Long-Term Incentive section of this Proxy Statement. In 2017,performed a competitive executive compensation analysis, was performed which included both an analysis of third-party survey data prepared internally by the Company’s Executive Compensationexecutive compensation group, and a peer group review of CEO pay prepared by the Consultant. Third-party general industry survey data from Aon, Hewitt, Mercer,Pearl Meyer, and Towers Watson wasWTW were used to prepare the survey analysis. Specific companies that participated in the third-party surveys were unknown and not a factor in the Committee’s deliberations. The Consultant reviewed the survey analysis was reviewed by the Consultant for the Committee.
The Company considersConsultant worked with the officerCommittee and management to develop a group of peer companies to be used for market comparison purposes in terms of CEO pay practiceslevels and executive pay practices. We do not believe many companies compete directly with us in all areas of our business or are of similar size. However, in order to have a comparator peerreference group prepared byof publicly traded comparators, the Consultant which was selected using the following criteria: industry,identified a group of relevant companies that compare to Kelly in at least some areas of our business. The resulting group of twelve comparator companies consists solely of staffing and HR-focused companies with generally similar annual revenues andnon-staffing companies considered by shareholder advisory groups as peers. recent market cap. The majority are multi-national/global companies headquartered in U.S. The resultingfollowing group of fifteen comparator companies includes direct peers supplemented by other people-intensive businesses with similar margins. This groupand a balanced mix of companies includes nine companies used by Institutional Shareholder Services (“ISS”) in their 2017 report, which means 60% ofsome significantly smaller and larger companies in our peer group are shared with ISS. The Company’s 2016 revenue of $5.28 billion was on par with the median peer group revenue of $5.25 billion for the same period. The following comparator group of fifteen companiessimilar industries and was unchanged from last year andyear. The peer group, unchanged from 2022, was used by the Committee and management as another reference point when reviewing 2017 officerassessing 2023 executive pay practices and CEO pay levels: | | | | | | 2023 Peer Group | 2017 Peer Group
| ● ABM Industries Incorporated | | ● Leidos Holdings, Barrett Business Services, Inc. | | ● ManpowerGroup Inc. | | | | ● Adecco Group AG | | ● Heidrick & Struggles International, Inc. | | ● Randstad NV | | | | ● AMN Healthcare Services, Inc. | | ● Insperity, Inc. | | ● Robert Half International Inc. | | | | ● Adecco SA ASGN Inc. | | ● ManpowerGroup Kforce Inc. | | ● R.R. Donnelley & Sons Company | ● AMN Healthcare Services, Inc.
| | ● On Assignment, Inc.
| | ● The Brink’s Company
| ● Essendant Inc.
| | ● Quad/Graphics, Inc.
| | ● TrueBlue, Inc.
| ● Insperity, Inc.
| | ● Randstad Holding NV
| | ● WESCO International, Inc.
|
The Committee considers peer group and general industry survey data as a point of reference, not the sole factor in determining executivesenior officers’ compensation. The third-party survey data and peer group analysis represent “Market Data” when referenced throughout this Compensation Discussion and Analysis. The Committee considers all of the resources provided as part of a holistic process that also includes officer performance and the recommendations of the Company’s CEO regarding total compensation for Senior Officers. | | | | | | | 38 | | |
Compensation Discussion and Analysis
Tally Sheetssenior officers.
In addition to Market Data and for use as background information, the Executive Compensation group provides the Committee with comprehensive tally sheets for each Executive Officer, summarizing up to four years ofdetail illustrating historical target and actual total compensation data and long-term incentive grant detail that includes grant date fair value as well as the intrinsic value of outstanding shares. award opportunities. The Committee reviews tally sheetsthis detail for all of the Executive Officersexecutive officers and believes they are ait is useful multi-year reference toolinformation, along with other perspectives, when considering whether compensation decisions reflect the Company’s executive compensation philosophy and performance. Tally sheets are not a determining factor for the Committee when making compensation decisions. Executive
| | | | | | | | | 53 | |
Compensation Discussion and Analysis Senior Officer Performance Reviews and Succession Planning Annually, the Committee conducts a comprehensive Executive Officerreview of performance, review that includesleadership development initiatives, and succession planning for senior officers. Combined, these processes are used to identify, develop, and identification of officer developmental opportunities. Detailedevaluate the Company’s senior officers. The Chief People Officer, with input from the CEO, prepares detailed executive performance review information for each of the Senior Officers,senior officers, including named executive officers (other than the Named Executive Officers, is prepared by the Chief Human Resources Officer (“CHRO”)CEO). The performance review information for each of the Executive Officerssenior officers includes key annual initiatives, performance results, strengths, and development opportunities. The CEO reviews the performance of the other Executive Officerssenior officers and presents their individual performance assessments, development plans, and succession strategies to the Committee. During the individual performance assessments, the Committee asks questions, renders advice, and makes recommendations on matters that include individual development needs, succession planning, and retention. The Company’s ChairmanSenior officers are not present during the discussion of the Board and the Committee Chair present the performance review for the CEO to the other Committee members. None of the Executive Officers are present when their performance is being discussed by the Committee. Each Executive’sThe Committee uses each executive’s individual performance assessment, is used by the Committee, together with the compensation analysis discussed in the previous section, and the recommendations of the CEO, to determine compensation for the Executive Officers.senior officers. In the fourth quarter of the year the CEO presented his performance self-evaluation which included a review of performance of the organization against strategy and business plans. Periodic sessions are held to discuss talent and development for multiple levels of the organization, increasing transparency and understanding of talent across leadership teams and business units. Development plans are crafted to prepare emerging talent for future opportunities, including stretch assignments, formal training, experiential learning opportunities and formal coaching. The Board approves the Company’s executive succession plan is updated annually, including updates, and in connection with the performance assessments and is approved by the Board.assessments. The plan documentation includes all executives at the Senior Officersenior officer level, as well as their potential successors from within the Company in casethe event of an unexpected disabilityemergency or departure of a Senior Officer.senior officer. Documentation includes detailed executive performance review information as discussed above, readiness assessments and at least one potential successor for each role. Any changes to the plan during the year also require the approvala review of the Board. The CHRO is leading the implementationhealth and diversity of a new succession planning approach and process for 2018, details of which will be disclosed in the Company’s 2019 Proxy Statement.pipelines. Compensation Programs: Decisions and Actions in 20172023 George S. Corona – Promotion
Following notification by Mr. Camden in April 2017 of his intent to retire as an Executive Officer and DirectorThe Committee believes the actions detailed below supported the strategic direction of the Company effective with the annual meetingand helped position it for long-term success in May, the Company’s Board of Directors, at a meeting held on April 13, 2017, appointed Mr. Corona to the role of President and Chief Executive Officer, effective May 10, 2017. As a result of this promotion, Mr. Corona received an increase to his base salary, and prorated STIP target and LTI opportunity for 2017, pursuant to the terms of the STIP and EIP as they pertain to Named Executive Officers. These changes were in recognition of his appointment and took into account market competitive compensation opportunities for the role as summarized below:achieving its goals.
Base salary increase of 52.7%, resulting in a new base salary of $1,000,000;
STIP target opportunity was increased from 90% to 130% of base salary;
Value of LTI target opportunity was increased;
Participation in the Senior Executive Severance Plan was changed from a Tier 2 participant to a Tier 1 participant;
No formal employment contract was entered into with Mr. Corona in connection with his promotion to CEO; and
Elected to the Company’s Board of Directors at the Annual Meeting on May 10, 2017.
Teresa S. Carroll and Peter W. Quigley – Promotions
On May 10, 2017, and upon the recommendation of the Committee, the Company’s Board of Directors elected Teresa Carroll to the role of Executive Vice President and President, Global Talent Solutions and General Manager, Sales, Marketing and Human Resources, and Peter Quigley to the role of Executive Vice President and President, Global Staffing
| | | | | | | 39 | | |
Compensation Discussion and Analysis
and General Manager, Global Information Technology, Global Business Services and Global Services. As a result of their promotions, Ms. Carroll and Mr. Quigley each received base salary increases, and prorated STIP targets and LTI opportunities for 2017 pursuant to the terms of the STIP and EIP as they pertain to Named Executive Officers. These changes were in recognition of their appointments and to more closely reflect market competitive compensation opportunities for their new roles as summarized below:
Base salary increases of 15%, resulting in new base salaries of $575,000 for each;
STIP target opportunities were increased from 70% to 85% of their base salaries; and
Value of their LTI target opportunities were increased.
Base Salary Base salaries for senior officers, including the Named Executive Officersnamed executive officers are intended to bewithin a competitive withrange of the Market Data to ensure that the Company can attract and retain the executives necessary to successfully lead and manage the organization. Base salaries generally fall within a range (+/- 15%) around the median of salaries in the Market Data, as individual base salaries will vary based upon the factors described below. Based on Market Data available at the time of the review in December 2016,November 2023, we determined that the base salaries of our Named Executive Officersnamed executive officers were, on average, within this competitive range of the 2017 market medians for comparable roles. Base salary is only one component of target total direct compensation and may be affected by other components to ensure that target total direct compensation meets compensation objectives. The Committee reviews the base salaries of Executive Officers,senior officers, including the Named Executive Officers,named executive officers, on an annual basis (or as an Executive Officer’sa senior officer’s duties and responsibilities change). Base salaries are determined by the Committee for each of the Executive Officerssenior officers based on various factors, including the scope and responsibilities of the role, an individual’s experience and performance in the role, their current level of pay compared to Market Data, internal pay equity, the recommendations of the CEO, and consideration of the Company’s salary adjustment budget. Management elected to move the timing of theThe Company’s annual total compensation review and target pay adjustment process for all employees, including the Executive Officers, from October 2016 to March 2017 in ordersenior officers, typically occurs during the first quarter to coincide with the timing of any potential incentive award payouts. The timing alignment of compensation elements wasis intended to reinforce the Company’s pay for performancepay-for-performance philosophy and provide each employee with their “total compensation” overview. In December 2016,November 2022, the Committee conducted its annual market review of base salaries of the Senior Officers,senior officers, including Named Executive Officers, and considered the recommendation of management that the Senior Officers not receive regularnamed executive officers.
The Company performed a targeted compensation review which resulted with one named executive officer receiving a base salary increases in March 2017. The Committee supported this recommendationincrease for 2023. | | | | | | 54 | | | |
Compensation Discussion and did not provide the Senior Officers with salary increases during the annual total compensation review process in early 2017. This decision reflected a conservative approach that both management and the Committee believed was in support of the Company’s investment strategy.Analysis In consideration of the factors noted above, the following base salaries for the Named Executive Officersnamed executive officers were approved by the Committee in 2017:2023: | | | | | | | | | | | | | | | | | Named Executive Officer | | 2016 Base
Salary | | 2017 Base
Salary | | Adjustment % | George S. Corona | | | $ | 655,000 | | | | $ | 1,000,000 | | | 52.7% | Olivier G. Thirot | | | $ | 515,000 | | | | $ | 533,500 | | | 3.6% | Teresa S. Carroll | | | $ | 500,000 | | | | $ | 575,000 | | | 15.0% | Peter W. Quigley | | | $ | 500,000 | | | | $ | 575,000 | | | 15.0% | Steven S. Armstrong | | | $ | 332,000 | | | | $ | 332,000 | | | 0.0% |
| | | | | | | | | | | | | | Named Executive Officer | | 2022 Base
Salary | | | 2023 Base
Salary | | | Adjustment % | | Peter W. Quigley | | $ | 900,000 | | | $ | 900,000 | | | | 0.0 | % | Olivier G. Thirot | | $ | 667,200 | | | $ | 667,200 | | | | 0.0 | % | Daniel H. Malan | | $ | 443,000 | | | $ | 443,000 | | | | 0.0 | % | Vanessa P. Williams | | $ | 414,000 | | | $ | 475,000 | | | | 14.7 | % | Dinette Koolhaas | | $ | 557,668 | | | $ | 557,668 | | | | 0.0 | % |
Notes: Effective January 1, 2017 Mr. Thirot moved from Swiss payroll and benefits to U.S. payroll and benefits. The allowances he had been receiving in Switzerland were discontinued at that time and a portion of the amount was added to his U.S. base salary.
Messrs. Corona and Quigley and Ms. Carroll’s base salaries were increased effective with their promotions in May 2017.
Amounts represent base salaries in effect on December 31 of each applicable year.year;
increase for Ms. Williams was effective January 1, 2023; and amounts reported for Mr. Thirot and Ms. Koolhaas are converted from Swiss Francs to U.S. Dollars at an exchange rate of 1 CHF = 1.112 USD. This is calculated using the IRS Yearly Average Currency Exchange Rate for Switzerland for 2023 of 0.899 (1 CHF ÷ 0.899 = $1.112). Annual Cash Incentive The Committee believes that the Named Executive Officersnamed executive officers should have a meaningful percentage of their total compensation earned through annual “at risk” performance-based incentives. The percentage of target total compensation at risk under the terms of the STIP increases significantly as the individual executive’s responsibilities and influence on | | | | | | | 40 | | |
Compensation Discussion and Analysis
overall corporate performance results increase. The STIP is designed to encouragedesign encourages executives to meet and exceed the Company’s short-term goals that align with overall corporate strategy and improve stockholdershareholder value. The STIP target opportunity is established as a percentage of each individual’s actual base salary earnings and is targeted near the median Market Data, but may vary based upon individual factors, internal equity, and other considerations. STIP payments for all participants are capped atcan range from 0% to the maximum of 200% of target based on results relative to the target incentive award opportunity.goals set at the start of the year. In December 2016,November 2022, the Committee reviewed the target incentive opportunity for each of the Named Executive Officersnamed executive officers and found that all were appropriately positioned relativemade one change to better align to the Market Data. The following table shows the 20162022 and 20172023 STIP target opportunities, as a percent of base salary, for our Named Executive Officers:named executive officers: | | Named Executive Officer | | 2016 STIP
Target % | | 2017 STIP
Target % | | 2022 STIP
Target % | | 2023 STIP
Target % | George S. Corona | | 90% | | 130% | | Peter W. Quigley | | Peter W. Quigley | | Peter W. Quigley | | Peter W. Quigley | | Peter W. Quigley | | | | | 110 | % | | | 120 | % | | Olivier G. Thirot | | 75% | | 75% | Teresa S. Carroll | | 70% | | 85% | Peter W. Quigley | | 70% | | 85% | Steven S. Armstrong | | 60% | | 60% | Olivier G. Thirot | | Olivier G. Thirot | | Olivier G. Thirot | | Olivier G. Thirot | | | | | 85 | % | | | 85 | % | | Daniel H. Malan | | Daniel H. Malan | | Daniel H. Malan | | Daniel H. Malan | | Daniel H. Malan | | | | | 55 | % | | | 55 | % | | Vanessa P. Williams | | Vanessa P. Williams | | Vanessa P. Williams | | Vanessa P. Williams | | Vanessa P. Williams | | | | | 65 | % | | | 65 | % | | Dinette Koolhaas | | Dinette Koolhaas | | Dinette Koolhaas | | Dinette Koolhaas | | Dinette Koolhaas | | | | | 55 | % | | | 55 | % |
Note:
Messrs. Corona and Quigley and Ms. Carroll’s incentive targets were increased effective with their promotions in May 2017.
In the months leading up to year end,year-end, the Committee reviews and determines the objectives, performance measures, and other terms and conditions of the STIP for the following plan year. For 2017, similar to the prior year’s incentive plan redesign,2023, the Committee approved the use of multiple performance measures to compriseEarnings from Operations (“EFO”) as the measure for the corporate component of the STIP. The Committee selected multiplethis financial measures inmeasure for the STIP thatbecause it aligned to thewith business objectives and value creation, provided balance, ensured a strongpay-performance linkage, and improved line of sight for Senior Officers,senior officers, including the Named Executive Officers. Measures selected for 2017 STIP were:named executive officers. Earnings from Operations, in order to maximize the Company’s earnings;
Return on Gross Profit (also referred to as “conversion rate”), in order to focus on expense control; and
Total Gross Profit, selected to maximize growth for all of our businesses.
Payout for threshold performance under the corporate component of STIP is 25%set at 50% of an Executive Officer’sa named executive officer’s target payout opportunity, with zero payout earned for performance below threshold. An intermediate performance level that is halfway between threshold and target performance levels was added in 2017. Achievement of intermediate level of performance results in payouts that are 75% of target. Achievement of target performance results in target payouts for the Executive Officers. Each additional performance incrementnamed executive officers. Performance above target earns prorated incentive payouts above target and up to the maximum of 200% of target. As in prior years, the 2017 STIP design includes a ‘gatekeeper’ goal which must be achieved in order to earn a payout under any measure. The gatekeeper goal is earnings from operations with a required level of achievement of at least 60% of target. Performance measures used for purposes of funding STIP are the same as defined in the Company’s GAAP financial statements, excluding at the discretion of the Committee consideration of special items such as: changes in accounting principles, gains or losses on acquisitions or divestitures, changes in budget due to acquisitions or divestitures, restructuring | | | | | | | | | 55 | |
Compensation Discussion and Analysis expenses, and other unusual items, which are defined as such and quantified in the financial statements and/or footnotes to the Company’s Annual Report on Form 10-K. Adjustments would apply only to unbudgeted items. For 2023, additional consideration was made to certain special items related to the Company’s transformation initiatives and also with the sale of the EMEA staffing operations that resulted in an unfavorable impact to the Company’s financial performance. In February 2023, the Committee determined and approved threshold, target, and maximum performance goal levels for the 2023 STIP. The threshold goal was set at a level for which the Committee believed it was appropriate to start earning incentives. At expected performance levels the target goal was set at the budgeted EFO. Target award opportunities remained unchanged. Maximum goals were set at significant stretch levels, which the Committee believed warranted the earning of 200% of target payouts. For the 2023 STIP, funding for all named executive officers were based 100% on Corporate measures. Straight line interpolation occurs for achievement of performance between the specified EFO goals shown below. Participants also had an individual performance component which is funded (30%) from the Corporate EFO result. The individual performance payout can be adjusted upward or downward based on each leader’s performance against established Objectives, Goals, Strategies, Measures (“OGSMs”) and other financial and non-financial considerations. The goals at threshold, intermediate, target, and maximum for the 2023 STIP, as well as resulting performance for the measure of the corporate component were as follows: | | | | | | | | | | | | | | Corporate Component | | | | 2023 Performance Goals | | 2023
Performance | | 2023
Payout | | | Weighting | | Threshold
50% | | Target
100% | | Maximum
200% | | | | | | | | EFO | | 100% | | $52.50 | | $75.00 | | $97.50 | | $72.30 | | 94.0% | | | | | | | | $ in millions | | | | | | | | | | | | 94.0% |
Under the terms of the STIP, the Committee retains the right in its discretion to adjust a STIP award based on Company, business unit, or individual performance. The Committee has no discretion to increase a STIP award for named executive officers, outside of the aforementioned parameters. STIP awards made in 2023 to named executive officers are subject to the Company’s Clawback Policy. Based on these performance results, at its February 13, 2024 meeting, the Committee reviewed and approved payments to the named executive officers in accordance with the STIP provisions as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | Named Executive Officer | | 2023 Base
Salary
Earnings | | 2023 STIP
Target as
% of
Salary | | 2023 STIP
Payout at
Target | | 2023 Payout
as a
Percentage
of Target | | 2023 STIP
Payout | | | | | | | Peter W. Quigley | | | $ | 900,000 | | | | | 120 | % | | | $ | 1,080,000 | | | | | 94.0 | % | | | $ | 1,015,200 | | | | | | | | Olivier G. Thirot | | | $ | 667,200 | | | | | 85 | % | | | $ | 567,120 | | | | | 94.0 | % | | | $ | 533,093 | | | | | | | | Daniel H. Malan | | | $ | 443,000 | | | | | 55 | % | | | $ | 243,650 | | | | | 100.0 | % | | | $ | 244,000 | | | | | | | | Vanessa P. Williams | | | $ | 473,827 | | | | | 65 | % | | | $ | 307,987 | | | | | 105.5 | % | | | $ | 325,000 | | | | | | | | Dinette Koolhaas | | | $ | 557,668 | | | | | 55 | % | | | $ | 306,717 | | | | | 0.0 | % | | | | — | |
Notes: 2023 STIP Payout amounts for Mr. Malan and Ms. Williams rounded to the nearest thousand; Mr. Quigley’s final payout percentage of 94% was determined by the Committee based on overall assessment of the Company’s 2023 results; for consistency, Mr. Thirot’s and Ms. Koolhaas’ amounts shown in USD using the IRS Yearly Average Currency Exchange Rate for Switzerland of 1.112. The actual exchange rate reflects the then-current rate; and As part of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment with the Company terminated March 31, 2024. As a result, she was not entitled to a payment under the STIP, and instead received a termination payment as detailed in the “Potential Payments Upon Termination or Change in Control 2023” below. | | | | | | 56 | | | |
Compensation Discussion and Analysis Long-Term Incentives The EIP provides for long-term incentives that reward executives for achieving the Company’s long-term growth and profitability goals. Long-term incentive compensation is also intended to help the Company retain key employees, and provide those employees shared financial interests with the Company’s shareholders and positively influence their job performance and longer-term strategic focus. The EIP allows for grants of equity and non-equity awards to key employees. The Committee believes that compensation programs for the Company’s senior officers should include strong alignment between pay and performance, with a significant portion of “at risk” pay. As a result, the Committee has provided regular long-term incentives for senior officers, including the named executive officers that heavily emphasize performance. In 2023 our CEO continued to receive a heavily performance-based LTI grant with 75% weighting in performance shares (at target) and 25% in restricted stock. All other named executive officer’s LTI awards were 60% performance shares (at target) and 40% restricted stock. The typical incentive mix emphasizes performance-contingent awards delivered through performance shares and places a lower weighting on restricted shares. On average, target LTI awards granted to senior officers have historically been and remained below market median for 2023. The target LTI award amounts for each senior officer, including the named executive officers, are based on an established value for each officer level. The number of shares granted to each named executive officer is based on the grant value and closing stock price on the date of grant and can be found in the “Grants of Plan-Based Awards” table, later in this document. Performance measures used for purposes of funding LTI are the same as defined in the Company’s GAAP financial statements, excluding at the discretion of the Committee consideration of special items such as: changes in accounting, principles, gains or losses on acquisitions or divestitures, changes in budget due to acquisitions or divestitures, restructuring expenses, and other unusual items, which are defined as such and quantified in the financial statements, and/or footnotes to the Company’s Annual Report on Form10-K. Adjustments would apply only to unbudgeted items. For the total gross profit measure, constant currency (using the Company’s 2017 budgeted currency exchange rate)2023, additional consideration was used to determine values in establishing achievement of the incentive plan goals for 2017. In February 2017, the Committee determined and approved threshold, intermediate, target, and maximum performance goal levels for the 2017 STIP. The threshold goals were set at levels for which the Committee believed it was appropriate to start earning incentives; intermediate goals were set halfway between threshold and target amounts; target goals were set at the budgeted levels, which the Committee considered were “challenging but achievable”; maximum goals were set at significant stretch levels for which the Committee believed the earning of two times target payouts was warranted. Straight line interpolation occurs for achievement of performance between threshold and intermediate, intermediate and target, and between target and maximum. The goals at threshold, target, intermediate and maximum for the 2017 STIP, as well as resulting performance for each measure of the corporate component were as follows:
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Compensation Discussion and Analysis
| | | | | | | | | | | | | | | | | | | | 2017 Performance Goals | | | | Weighted | Corporate Component Performance Measures | | Weighting | | Threshold | | Intermediate | | Target | | Maximum | | 2017 Actual
Results | | 2017 Payout
(% of Target) | Earnings from Operations | | 50.0% | | $68.800 | | $77.400 | | $86.000 | | $111.800 | | $85.529 | | 49.32% | Return on Gross Profit | | 25.0% | | 7.100% | | 8.107% | | 9.114% | | 10.614% | | 8.994% | | 24.25% | Total Gross Profit | | 25.0% | | $876.000 | | $909.800 | | $943.600 | | $1,037.960 | | $948.945 | | 26.42% | | | | 100% | | | | | | | | | | | | 99.98% |
$ in millions
Messrs. Corona and Thirot’s STIP opportunities were based 100% upon the performance measures of the corporate component, as shown above.
Ms. Carroll’s STIP opportunity was based 30% on the corporate component measures and 70% on the business unit measures for which she is accountable for the first four months of the year prior to her promotion in May 2017. At that time, the Committee determined to increase the weighting of the corporate measure to 50% to better reflect her new responsibilities for several functional areas of the organization: Sales, Marketing and Human Resources. Her STIP business unit measures were changed to be weighted 50%. Payout results for the business unit measures for Ms. Carroll were positively impacted by revenue and Gross Profit growth in the Contingent Workforce Outsourcing (“CWO”), KellyConnect and Business Process Outsourcing (“BPO”) businesses, and were negatively impacted by shifting customer demands in the centrally delivered staffing and payroll business, as well as increased SG&A expenses due to the costs associated with the headcount added for new and expanding programs. The measure, “Contribution” that appears below for Ms. Carroll and Messrs. Quigley and Armstrong is defined as income from operations.
Performance results for each of Ms. Carroll’s business unit measures are as follows:
Teresa Carroll: In effect January 1, 2017 - April 30, 2017
| | | | | | | | | | | | | | | | | | 2017 Performance Goals | | | | Weighted | Corporate Component and Business Unit Performance Measures | | Weighting | | Threshold | | Target | | Maximum | | 2017 Actual
Results | | 2017 Payout
(% of Target) | Corporate Component Performance Measures | | 30.0% | | | | see details above | | | | 29.99% | Americas SAO Gross Profit | | 17.5% | | $144.419 | | $160.465 | | $200.581 | | $163.702 | | 17.50% | Global OCG Gross Profit | | 17.5% | | $197.628 | | $219.587 | | $263.504 | | $210.055 | | 13.13% | Global Talent Solutions (GTS) Contribution | | 35.0% | | $58.463 | | $73.079 | | $109.619 | | $79.910 | | 38.50% | | | | 100% | | | | | | | | | | 99.12% |
$ in millions
Teresa Carroll: In effect May 1, 2017 - December 31, 2017
| | | | | | | | | | | | | | | | | | 2017 Performance Goals | | | | Weighted | Corporate Component and Business Unit Performance Measures | | Weighting | | Threshold | | Target | | Maximum | | 2017 Actual
Results | | 2017 Payout
(% of Target) | Corporate Component Performance Measures | | 50.0% | | | | see details above | | | | 49.99% | Americas SAO Gross Profit | | 12.5% | | $144.419 | | $160.465 | | $200.581 | | $163.702 | | 12.50% | Global OCG Gross Profit | | 12.5% | | $197.628 | | $219.587 | | $263.504 | | $210.055 | | 9.38% | Global Talent Solutions (GTS) Contribution | | 25.0% | | $58.463 | | $73.079 | | $109.619 | | $79.910 | | 27.50% | | | | 100% | | | | | | | | | | 99.37% |
$ in millions
Mr. Quigley’s STIP opportunity was based 100% on corporate measures for the first four months of the year until his promotion in May 2017 at which time his STIP opportunity was changed to be based 50% on the corporate component measures and 50% on the Global Staffing business unit measures for which he became accountable. Payout results for the business unit measures for Mr. Quigley were positively impacted by the reduction of worker’s compensation expenses in 2017 and increased hours volume in the EMEA region, and were negatively impacted by increased SG&A expenses linked to additional employee investments in the EMEA branch network and the sales and recruiting resources in the Americas that were added in the last half of the year to capture growing demand.
Performance results for each of Mr. Quigley’s business unit measures are as follows:
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Compensation Discussion and Analysis
Peter Quigley: In effect May 1, 2017 – December 31, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | 2017 Performance Goals | | | | | | Weighted | Corporate Component and Business Unit Performance Measures | | Weighting | | Threshold | | | Target | | | Maximum | | | 2017 Actual
Results | | | 2017 Payout
(% of Target) | Corporate Component Performance Measures | | 50.0% | | | see details above | | | 49.99% | Americas Staffing Gross Profit | | 20.0% | | | $377.782 | | | | $419.758 | | | | $524.697 | | | | $425.985 | | | 20.00% | Americas Staffing Contribution | | 20.0% | | | $69.518 | | | | $86.897 | | | | $130.346 | | | | $81.706 | | | 10.00% | EMEA Staffing Gross Profit | | 5.0% | | | $132.712 | | | | $147.458 | | | | $184.322 | | | | $151.379 | | | 5.50% | EMEA Staffiing Contribution | | 5.0% | | | $14.324 | | | | $17.906 | | | | $26.858 | | | | $21.538 | | | 7.00% | | | | 100% | | | | | | | | | | | | | | | | | | 92.49% |
$ in millions
Mr. Armstrong’s STIP opportunity was based 30% on the corporate component measures and 70% on the business unit measures for which he is accountable. Although the result for U.S. Operations PT Gross Profit measure was above threshold, the design requires achievement of threshold level of performance for the U.S. Operations PT Contribution measure before payout can be earned on the corresponding Gross Profit measure. Threshold performance was not achieved for the U.S. Operations PT Contribution measure, so no payout was earned for the U.S. Operations PT Gross Profit measure. Payout results for the business unit measures for Mr. Armstrong were positively impacted by the reduction of worker’s compensation expenses in 2017 and were negatively impacted by the increased SG&A expenses linked to higher performance based compensation and additional sales and recruiting resources added to capture growing demand in the last half of the year.
Performance results for each of Mr. Armstrong’s business unit measures are as follows:
Steven Armstrong: In effect January 1, 2017 – December 31, 2017
| | | | | | | | | | | | | | | | | | 2017 Performance Goals | | | | Weighted | Corporate Component and Business Unit Performance Measures | | Weighting | | Threshold | | Target | | Maximum | | 2017 Actual Results | | 2017 Payout
(% of Target) | Corporate Component Performance Measures | | 30.0% | | see details above | | 29.99% | US Operations Gross Profit | | 17.5% | | $282.205 | | $313.561 | | $391.951 | | $320.225 | | 17.50% | US Operations PT Gross Profit | | 17.5% | | $64.855 | | $72.061 | | $86.473 | | $70.068 | | 0.00% | US Operations Contribution | | 35.0% | | $65.429 | | $81.786 | | $122.679 | | $75.546 | | 17.50% | | | | 100% | | | | | | | | | | 64.99% |
$ in millions
Under the terms of the STIP, the Committee retains the right in its discretion to reduce a STIP award based on Company, business unit, or individual performance. The Committee has no discretion to increase a STIP award for Named Executive Officers (though the Committee may approve a special bonus for Named Executives Officers on a discretionary basis to recognize exceptional performance or actions not related to objectives set forth in the STIP; in 2017, no discretionary bonus awards were made to Named Executive Officers). STIP awards made in 2017 were designed to comply with the requirements of Section 162(m) of the Code and any awards made under the STIP are subjectcertain special items related to the Company’s Clawback Policy.
Based on these performance results, at its February 14, 2018 meeting, the Committee reviewedrestructuring and approved payments to the Named Executive Officers in accordance with the STIP provisions as follows:
| | | | | | | 43 | | |
Compensation Discussion and Analysis
| | | | | | | | | | | | | | | | | | | | | | | | | | | Named Executive Officer | | 2017
Base
Salary
Earnings | | 2017 STIP
Target as
% of
Salary | | 2017 STIP
Payout at
Target | | 2017 Payout
as a
Percentage
of Target | | 2017 STIP Payout | George S. Corona(1/1 - 04/30) | | | | $218,333 | | | 90% | | | | $196,500 | | | 99.98% | | | | $196,461 | | George S. Corona(5/1 - 12/31) | | | | $657,519 | | | 130% | | | | $854,775 | | | 99.98% | | | | $854,604 | | | | | | | | | | | | | | $1,051,275 | | | | | | | $1,051,064 | | Olivier G. Thirot | | | | $533,500 | | | 75% | | | | $400,125 | | | 99.98% | | | | $400,045 | | Teresa S. Carroll(1/1 - 04/30) | | | | $166,667 | | | 70% | | | | $116,667 | | | 99.12% | | | | $115,639 | | Teresa S. Carroll(5/1 - 12/31) | | | | $381,345 | | | 85% | | | | $324,143 | | | 99.37% | | | | $322,085 | | | | | | | | | | | | | | $440,810 | | | | | | | $437,723 | | Peter W. Quigley(1/1 - 04/30) | | | | $166,667 | | | 70% | | | | $116,667 | | | 99.98% | | | | $116,643 | | Peter W. Quigley(5/1 - 12/31) | | | | $381,345 | | | 85% | | | | $324,143 | | | 92.49% | | | | $299,800 | | | | | | | | | | | | | | $440,810 | | | | | | | $416,443 | | Steven S. Armstrong | | | | $332,000 | | | 60% | | | | $199,200 | | | 64.99% | | | | $129,468 | |
Long-Term Incentives
The EIP provides for long-term incentives that reward executives for achieving the Company’s long-term growth and profitability goals. Long-term incentive compensation is also intended to help the Company retain key employees, and provide those employees shared financial interests with the Company’s stockholders and positively influence their job performance and longer-term strategic focus. The EIP allows for grants of equity andnon-equity awards to key employees. The Committee approved a redesign of the Company’s long-term incentives in 2015 that included updated performance measures, a greater portion of variableat-risk performance-based compensation, and target opportunities for the Named Executive Officers that were set, on average, to be near market competitive levels.
The Committee believes that compensation programs for the Company’s Senior Officers should include strong alignment between pay and performance, with a significant portion of “at risk” pay. As a result, the design of the 2017 long-term incentives for Senior Officers, including the Named Executive Officers, mirrored the 2016 grants, with grant levels based 75% on performance shares (at target) and 25% on restricted stock in order to create award opportunities that heavily emphasize performance. The current incentive mix emphasizes performance-contingent awards that are delivered through performance shares and places a reduced weighting on restricted shares.
In 2015 we implemented a significant design change from the Company’spre-2015 long-term incentive awards. Prior to 2015, target long-term incentive opportunities for Senior Officers were generally below market median and provided primarily in time vesting restricted stock. The overall target number of shares granted to Senior Officers under the 2015 long-term incentive awards brought target total direct compensation opportunities, on average, to be near market median levels. The target number of shares granted to each Senior Officer in 2015, including the Named Executive Officers, were based on an established value for each officer level. Target LTI grant levels, in terms of the number of shares, for nearly all Senior Officers were reduced for the 2016 grant by approximately 15% from the 2015 target share grant levels. This change was made at the request of management and with the approval of the Committee, as both believed it was an approach that supported the Company’s investment strategy and efforts to reduce cost. This reduced grant value was maintained for the 2017 LTI grants, with grant values approximately the same in 2017 as they were in 2016 (for those executives in the same position each year). The number of target shares granted to each Named Executive Officer can be found in the “Grants of
| | | | | | | 44 | | |
Compensation Discussion and Analysis
Plan-Based Awards” table, later in this document. The actual value realized for the grant will be based upon achievement of the performance measures of the performance share awards and the price of the Company’s stock.EMEA divestiture.
Under the terms of the EIP, the Committee retains the right in its discretion to reduce an LTI award based on individual performance. The Committee has no discretion to increase an LTI award for Named Executive Officers.named executive officers. LTI grants made in 2017 and prior years were designed to comply with the requirements of Section 162(m) of the Code and any performance-based awards made under the EIP are subject to the Company’s Clawback Policy. Performance Shares Performance shares provide Senior Officerssenior officers with the opportunity to earn shares, from zero to 200% of their target opportunity, based on achievement ofpre-established measures and goals. For 2017, the Committee selected the following equally weighted performance measures for the performance shares: return on sales, in order to maximize margins from revenues; earnings before taxes plus joint venture (JV) Income, to include an operating earnings measure that also captures JV earnings; and TSR relative to the S&P SmallCap 600 Index, to reward relative TSR performance. The Committee believed that these performance measures were aligned with the business strategy and stockholder interests, and also provided balance with STIP measures across the strategic business objectives of the Company. For the 2017 grant of performance shares, the two financial measures, return on sales and earnings before taxes plus JV Income, were established to have three-year goals, which would be developed by aggregatingone-year performance goals for each of the years in the performance period 2017—2019. This design was selected due to the desire to have multi-year accountability for performance results, while recognizing the challenges, at this time, of establishing traditional three-year goals in an uncertain environment. In February 2017, the Committee approved goals at threshold, intermediate, target, and maximum levels of performance for each of the measures for 2017. Goals for the measures in subsequent years of the performance period will be established within the first ninety days of each of the years, 2018 and 2019. At the end of the performance period 2017-2019 (i.e., in early 2020), goals and results will be aggregated and/or averaged as appropriate, for each of the two financial measures, to determine achievement and earning, if any, of shares. The Relative TSR measure of the performance shares is a three-year goal with vesting at the end of the 2017-2019 performance period, provided that a threshold level of performance for this measure is achieved. The following table illustrates performance periods for each of the measures for the 2017-2019 performance shares:
| | | | | | | | Measures | | 2017 | | 2018 | | 2019 | • Return on Sales (ROS) • Earnings Before Taxes plus Joint Venture (JV) Income | | Three-year performance is assessed based on the average (for the ROS measure) or sum (for the earnings measure) of the annual goals set at the start of each year, relative to three years’ of results | • Relative TSR | | Three-calendar year Performance Period |
The following target number of performance shares were awarded for each performance measure to the Named Executive Officers in 2017:
| | | | | | | | | | Target Number of 2017-2019 Performance Shares Awarded | | | | Financial Measures | | | | | | Name | | Return on
Sales | | Earnings
Before Taxes
plus JV
Income | | Relative
TSR
Measure | | Total Number of
Performance
Shares @ Target | George S. Corona | | 23,297 | | 23,297 | | 23,297 | | 69,891 | Olivier G. Thirot | | 8,325 | | 8,325 | | 8,325 | | 24,975 | Teresa S. Carroll | | 9,317 | | 9,317 | | 9,316 | | 27,950 | Peter W. Quigley | | 9,317 | | 9,317 | | 9,316 | | 27,950 | Steven S. Armstrong | | 3,100 | | 3,100 | | 3,100 | | 9,300 |
For achievement of threshold performance, 25% of target performance shares would be earned; for achievement of intermediate performance, 75%50% of target performance shares would be earned; for achievement of target performance, 100% of target performance shares would be earned; and for achievement of maximum performance or higher, 200% of target performance shares would be earned under the 2017typical long-term incentive design. Threshold goals are typically set at levels the Committee believes appropriate to start earning incentives. Target goals are set at budgeted levels, which are considered “challenging but achievable”. Maximum goals are set at significant stretch levels which the Committee believes warrant the earning of two times target payout. Straight line interpolation occurs for achievement of performance between threshold and target, and between target and maximum. Performance awards are granted in the form of Performance Share Units, which are not eligible for dividends or dividend equivalents. For the 2023-2025 grant of performance shares, the two equally weighted financial measures, revenue growth and EBITDA margin, have one-year goals established for each of the three performance periods (2023, 2024, and 2025) that are set in the beginning of each performance period. This design provides the ability to set meaningful goals that deliver profitable growth in the continued unpredictable economic climate. In March 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for 2023. At the end of the 2023 performance period in early 2024, results for each of the two financial measures, determined the achievement and earning of shares. For the 2024 performance period, goals will be approved in early 2024 with results being reviewed in early 2025, and the 2025 performance period goals will be approved in early 2025. Any earned shares will vest 100% upon Committee approval on the third anniversary of the grant (February 2026). | | | | | | | | | 57 | |
Compensation Discussion and Analysis The following target number of performance shares were awarded for each performance measure to the named executive officers in 2023: | | | | | | | | | | | | | | Target Number of 2023-2025 Performance Shares Awarded | | | Name | | Financial Measures | | | Total Number of
Performance
Shares
@ Target | | | | Revenue
Growth | | | EBITDA
Margin | | | | | | Peter W. Quigley | | | 52,636 | | | | 52,636 | | | | 105,272 | | | | | | Olivier G. Thirot | | | 17,354 | | | | 17,354 | | | | 34,708 | | | | | | Daniel H. Malan | | | 6,218 | | | | 6,218 | | | | 12,436 | | | | | | Vanessa P. Williams | | | 7,748 | | | | 7,748 | | | | 15,496 | | | | | | Dinette Koolhaas | | | 6,769 | | | | 6,769 | | | | 13,538 | |
The 2023 threshold goals were set at levels for which the Committee believed it was appropriate to start earning incentives; Intermediate goals were set halfway between threshold andthe target levels of performance; target goals werelevel was set at the expected/budgeted levels,level, which the Committee considered were “challenging but achievable”; maximum goals were set at significant stretch levels for which the Committee | | | | | | | 45 | | |
Compensation Discussion and Analysis
believed the earning of two times target payout was warranted. Straight line interpolation occurs for achievement of performance between threshold and intermediate, intermediate and target, and between target and maximum. Shares that are subject to the Relative TSR measure have a three-year performance period, 2017–2019. TSR combines share price appreciation plus the value of reinvestedex-date dividends and is expressed as a percentage. For the 2017 performance shares, TSR will be calculated based on the average adjusted closing stock price for the twenty consecutive trading days immediately prior to the beginning and end of the three-year measurement period, January 1, 2017 to December 31, 2019. Shares are earned based on the Company’s TSR at the end of the three-year performance period relative to that of the S&P SmallCap 600 Index. In order to encourage appreciation of the Company’s share price, the calculated award will be reduced by 50% if at the end of the performance period the Company’s TSR is negative, indicating it has declined over the three-year period.
Performance awards are granted in the form of Performance Share Units. Performance shares are not eligible for dividends or dividend equivalents. Any performance shares earned under any measure will vest in early 2020, following approval by the Committee.stated goals.
In the event of a Senior Officer’ssenior officer’s termination of employment due to death, disability, normal retirement, or termination not for cause, theythe officer will receive a prorated award of performance shares based on actual results achieved, if any. Normal retirement is defined as age 62 with at least five years of service.service, or a combination of age plus years of service equal to 70, with a minimum age of 60. In order to be eligible for a prorated award due to termination by the Company not for cause, a Senior Officersenior officer must have been employed for at least one year after the date the grants were approved by the Committee. The prorated amount is based on the number of whole months in the performance period that were worked by the Senior Officersenior officer prior to termination divided by 36. In the case of termination not for cause in connection with a change in control, performance shares vest immediately at target amounts. 2021-2023 Long-Term Incentive Performance Results – Year 3 The 2021-2023 performance shares have two financial measures, revenue growth and EBITDA margin, which have three one-year goals set in the beginning of each performance year. In February 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for the 2023 portion of the award opportunity. During its February 13, 2024 meeting, the Committee approved the results for the 2023 performance year. Earned shares vested 100% upon Committee approval. Aggregate funding for all performance measures during the 2023 performance year was 50% of target. The final performance results for the 2023 performance year are provided in the following chart: | | | | | | | | | | | | | | | | | | | | | | Financial Performance Measures | | | | | 2023 Performance Goals | | 2021 Year
3 Actual
Results(1) | | Payout
as % of
Target | | | | Weighting | | | Threshold
50% | | | Target
100% | | | Maximum
200% | | | | | | | | Revenue Growth | | | 50.0% | | | | $4,822.56 | | | | $5,076.38 | | | $5,518.03 | | $4,771.91 | | | 0.00% | | | | | | | | | EBITDA Margin | | | 50.0% | | | | 1.65% | | | | 2.25% | | | 2.77% | | 2.25% | | | 100.00% | | | | | | | | $ in millions | | | | | | | | | | | | | | Weighted Payout: | | | 50.00% | |
| (1) | 2023 performance amount includes adjustments for restructuring and divestiture costs and other considerations approved by the Committee. |
| | | | | | 58 | | | |
Compensation Discussion and Analysis As a result of the above level of achievement for each of the performance measures for year 3 of the 2021-2023 LTI award, the Committee approved the following number of earned performance shares for each named executive officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Measure:
Revenue Growth | | Financial Measure:
EBITDA Margin | | Total # of
Year 3
Performance
Shares Earned | | | | Payout as % of Target: 0.00% | | Payout as % of Target: 100.00% | | Name | | Year 3 Target #
of Shares | | Year 3 # of
Shares Earned | | Year 3 Target #
of Shares | | Year 3 # of
Shares Earned | | | | | | | Peter W. Quigley | | | | 9,991 | | | | | 0 | | | | | 9,991 | | | | | 9,991 | | | | | 9,991 | | | | | | | | Olivier G. Thirot | | | | 5,056 | | | | | 0 | | | | | 5,056 | | | | | 5,056 | | | | | 5,056 | | | | | | | | Daniel H. Malan | | | | 1,662 | | | | | 0 | | | | | 1,662 | | | | | 1,662 | | | | | 1,662 | | | | | | | | Vanessa P. Williams | | | | 2,080 | | | | | 0 | | | | | 2,080 | | | | | 2,080 | | | | | 2,080 | | | | | | | | Dinette Koolhaas | | | | 1,598 | | | | | 0 | | | | | 1,598 | | | | | 1,598 | | | | | 1,598 | |
2022-2024 Long-Term Incentive Performance Results – Year 2 The 2022-2024 performance shares have two financial measures, revenue growth and EBITDA margin, which have three one-year goals set in the beginning of each performance year. In February 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for the 2023 portion of the award opportunity. During its February 13, 2024 meeting, the Committee approved the results for the 2023 performance year. Earned shares will vest 100% upon the third anniversary of the grant (February 2025). Aggregate funding for all performance measures during the 2023 performance year was 50% of target. The final performance results for the 2023 performance year are provided in the following chart: | | | | | | | | | | | | | | | | | | | | | | Financial Performance Measures | | | | | 2023 Performance Goals | | 2022 Year
2 Actual
Results(1) | | Payout
as % of
Target | | | | Weighting | | | Threshold
50% | | | Target
100% | | | Maximum
200% | | | | | | | | Revenue Growth | | | 50.0% | | | | $4,822.56 | | | | $5,076.38 | | | $5,518.03 | | $4,771.91 | | | 0.00% | | | | | | | | | EBITDA Margin | | | 50.0% | | | | 1.65% | | | | 2.25% | | | 2.77% | | 2.25% | | | 100.00% | | | | | | | | $ in millions | | | | | | | | | | | | | | Weighted Payout: | | | 50.00% | |
| (1) | 2023 performance amount includes adjustments for restructuring and divestiture costs and other considerations approved by the Committee. |
As a result of the above level of achievement for each of the performance measures for year 2 of the 2022-2024 LTI award, the Committee approved the following number of earned performance shares for each named executive officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Measure:
Revenue Growth | | Financial Measure:
EBITDA Margin | | Total # of
Year 2
Performance
Shares Earned | | | | Payout as % of Target: 0.00% | | Payout as % of Target: 100.00% | | Name | | Year 2 Target #
of Shares | | Year 2 # of
Shares Earned | | Year 2 Target #
of Shares | | Year 2 # of
Shares Earned | | | | | | | Peter W. Quigley | | | | 10,611 | | | | | 0 | | | | | 10,611 | | | | | 10,611 | | | | | 10,611 | | | | | | | | Olivier G. Thirot | | | | 5,064 | | | | | 0 | | | | | 5,064 | | | | | 5,064 | | | | | 5,064 | | | | | | | | Daniel H. Malan | | | | 1,728 | | | | | 0 | | | | | 1,728 | | | | | 1,728 | | | | | 1,728 | | | | | | | | Vanessa P. Williams | | | | 2,377 | | | | | 0 | | | | | 2,377 | | | | | 2,377 | | | | | 2,377 | | | | | | | | Dinette Koolhaas | | | | 2,159 | | | | | 0 | | | | | 2,159 | | | | | 2,159 | | | | | 2,159 | |
2023-2025 Long-Term Incentive Performance Results – Year 1 As described above, the 2023-2025 performance shares have two financial measures, revenue growth and EBITDA margin, which have three one-year goals set in the beginning of each performance year. In February 2023, the Committee approved goals at threshold, target, and maximum levels of performance for each of the measures for the 2023 portion of the award opportunity. During its February 13, 2024 meeting, the Committee approved the results for the 2023 performance year. | | | | | | | | | 59 | |
Compensation Discussion and Analysis Earned shares will vest 100% upon the third anniversary of the grant (February 2026). Aggregate funding for all performance measures during the 2023 performance year was 50% of target. The final performance results for the 2023 performance year are provided in the following chart: | | | | | | | | | | | | | | | | | | | | | | Financial Performance Measures | | | | | 2023 Performance Goals | | 2023 Year
1 Actual
Results(1) | | Payout
as % of
Target | | | | Weighting | | | Threshold
50% | | | Target
100% | | | Maximum
200% | | | | | | | | Revenue Growth | | | 50.0% | | | | $4,822.56 | | | | $5,076.38 | | | $5,518.03 | | $4,771.91 | | | 0.00% | | | | | | | | | EBITDA Margin | | | 50.0% | | | | 1.65% | | | | 2.25% | | | 2.77% | | 2.25% | | | 100.00% | | | | | | | | $ in millions | | | | | | | | | | | | | | Weighted Payout: | | | 50.00% | |
| (1) | 2023 performance amount includes adjustments for restructuring and divestiture costs and other considerations approved by the Committee. |
As a result of the above level of achievement for each of the performance measures for year 1 of the 2023-2025 LTI award, the Committee approved the following number of earned performance shares for each named executive officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Measure:
Revenue Growth | | Financial Measure:
EBITDA Margin | | Total # of
Year 1
Performance
Shares Earned | | | | Payout as % of Target: 0.00% | | Payout as % of Target: 100.00% | | Name | | Year 1 Target #
of Shares | | Year 1 # of
Shares Earned | | Year 1 Target #
of Shares | | Year 1 # of
Shares Earned | | | | | | | Peter W. Quigley | | | | 17,545 | | | | | 0 | | | | | 17,545 | | | | | 17,545 | | | | | 17,545 | | | | | | | | Olivier G. Thirot | | | | 5,784 | | | | | 0 | | | | | 5,784 | | | | | 5,784 | | | | | 5,784 | | | | | | | | Daniel H. Malan | | | | 2,072 | | | | | 0 | | | | | 2,072 | | | | | 2,072 | | | | | 2,072 | | | | | | | | Vanessa P. Williams | | | | 2,582 | | | | | 0 | | | | | 2,582 | | | | | 2,582 | | | | | 2,582 | | | | | | | | Dinette Koolhaas | | | | 2,256 | | | | | 0 | | | | | 2,256 | | | | | 2,256 | | | | | 2,256 | |
Restricted Stock RestrictedThe Committee considers restricted stock is considered by the Committee to be an effective vehicle to support the Company’s long-term compensation objectives:
Alignment with stockholder interests;
| ● | | alignment with shareholder interests; |
Facilitate retention through an extended pro rata vesting structure; and
| ● | | facilitate retention through an extended pro rata vesting structure; and |
Support meaningful stock ownership.
| ● | | support meaningful stock ownership. |
At its February 15, 2017March 21, 2023 meeting, the Committee approved restricted stock grants for Senior Officers,senior officers, including the Named Executive Officers,named executive officers, which vest ratably over fourthree years, as detailed in the Summary Compensation Table and the Grants of Plan Based Awards Table. This grant of restricted shares represents 25% of each Senior Officer’sfor the CEO and 40% for all other senior officers’ target long-term incentive grant. The Company believes that restricted stock is an important component of total compensation for our Named Executive Officersnamed executive officers and the four-year,three-year, pro rata vesting feature supports the Company’s retention objective. RestrictedAny remaining unvested portion of restricted stock awards areis forfeited upon voluntary termination, normal retirement, and involuntary termination for cause or not for cause, unless termination not for cause is in connection with a change in control. In the case of termination not for cause in connection with a change in control, all restricted stock shares or units vest immediately. Restricted stock is prorated in the event of termination due to death or disability. All ofSpecial Awards
In December 2021, the Senior Officers’ 2017 long-term incentive awards were granted in a mix of 75%Committee approved performance shares and 25%contingent restricted stock grants (KEEP Awards) for senior officers, including the named executive officers, and there were nocertain other special grants. Long-Term Incentivesenior leaders. These grants of restricted stock units had three financial measure hurdles that had to be achieved in order for 2015-2017 Performance Results
The first grant of performance shares underto become earned and eligible for vesting. In January 2023, the redesigned long-term incentives was awarded in 2015. As outlinedCommittee approved an adjustment in the Company’s 2016 Proxy Statement, performance shares become earned based on two financial measuresvesting for the Company gross profit portion of this award to 50% upon certification and a Relative TSR measure. As part of the transitionremaining 50% six months after certification; there was no change to the new plan design, the two financial performance measures for the 2015 award, return on gross profit and gross profit for the OCG and PT businesses, were established withone-year performance goals for 2015. Upon achievement of at least a threshold level of performance for either measure, shares would be contingently earned but would require an additional two years of continued employment before vesting in early 2018. Performance results achieved for the awards that were based on 2015 financial measures were 169.27% of target for the return on gross profit measure and 61.04% of target forgoal. In 2022 the gross profit forgoal was achieved and shares vested during 2023. In 2023 the OCGspecialty gross profit goal was achieved and PT businesses. The additional two years ofas a result during its August 9, 2023 meeting, the Committee approved an adjustment in the vesting for the performance awards that were earned based on the two 2015 financial measures have now been satisfied. For performance awards based on the Relative TSR performance measure for the period 2015-2017, results were based on the Company’s stock price appreciation and dividend reinvestment over the three-year period as compared to the performance of the S&P SmallCap 600 Index for the same period. The beginning stock price was the average dividend-adjusted closing stock price for the twenty consecutive trading days ending December 31, 2014. The ending stock price was the average dividend-adjusted closing stock price for the twenty consecutive trading days ending December 29, 2017. The Company’sspecialty gross profit
| | | | | | | | | 60 | | 46 | | |
Compensation Discussion and Analysis portion of this award to 50% upon certification and the remaining 50% six months after certification; there was no change to this goal. The third goal, conversion rate, continues to have the potential to be earned during the first half of 2024. | | | | | | | | Financial Measure:
Conversion Rate | | Name | | Target # of Shares | | | Peter W. Quigley | | | | 21,857 | | | | Olivier G. Thirot | | | | 17,971 | | | | Daniel H. Malan | | | | 7,286 | | | | Vanessa P. Williams | | | | 5,343 | | | | Dinette Koolhaas | | | | 4,856 | |
2015-2017 TSRIn 2023, there was a special recognition grant made to Mr. Malan. The Committee approved a grant of 79% is 36.4% higher thanrestricted stock valued at approximately $250,000 for Mr. Malan as noted in the 2015-2017 TSR forGrants of Plan-Based Awards Table. These shares will cliff vest on the S&P SmallCap 600 Index,second anniversary date of the grant, which was 42.6%, resulting in a payout of 200% of target. Award amounts earned are basedmade on the level of achievement for each of the performance measures. These levels and final performance results for the 2015-2017 performance period are provided in the following chart:February 14, 2023.
| | | | | | | | | | | | | | Performance Goals | Financial Performance
Measures | | Threshold 50% | | Target 100% | | Maximum 200% | | Actual Results | | Payout as % of Target | Return on Gross Profit | | 6.033% | | 6.733% | | 8.133% | | 7.703% | | 169.27% | Gross Profit $: OCG + PT | | $363.799 | | $404.221 | | $485.066 | | $372.728 | | 61.04% | Relative TSR | | -15% | | 0% | | +30% | | +36.4% | | 200.00% |
$ in millions
As a result of the above level of achievement for each of the performance measures of the 2015-2017 LTI, the Committee approved the vesting of the following number of earned performance shares for each Named Executive Officer:
| | | | | | | | | | | | | | | | | | Financial Measure:
Return on Gross Profit | | Financial Measure:
Gross Profit $: OCG+PT | | Relative TSR | | | | | | Payout as
% of Target: | | 169.27% | | Payout as
% of Target: | | 61.04% | | Payout as
% of Target | | 200.00% | | | | Name | | Target # of
Shares | | # of Shares
Earned | | Target # of
Shares | | # of Shares
Earned | | Target # of
Shares | | # of Shares
Earned | | Total # of
Shares
Earned | George Corona | | 17,500 | | 29,622 | | 17,500 | | 10,683 | | 17,500 | | 35,000 | | 75,305 | Olivier Thirot | | 5,000 | | 8,464 | | 5,000 | | 3,052 | | 5,000 | | 10,000 | | 21,516 | Teresa Carroll | | 10,000 | | 16,927 | | 10,000 | | 6,105 | | 10,000 | | 20,000 | | 43,032 | Peter Quigley | | 10,000 | | 16,927 | | 10,000 | | 6,105 | | 10,000 | | 20,000 | | 43,032 | Steven Armstrong | | 5,000 | | 8,464 | | 5,000 | | 3,052 | | 5,000 | | 10,000 | | 21,516 | Carl Camden | | 32,222 | | 54,543 | | 32,222 | | 19,670 | | 32,222 | | 64,444 | | 138,657 |
Note:
Mr. Camden’s performance shares have been prorated based on being normal retirement eligible at the time he left the Company in 2017
Retirement Benefits Highly compensated employees in the U.S. are not eligible to participate in the Company’s qualified 401(k) plan. In order to provide a competitive total compensation package, the Company has established the Management Retirement Plan (the “MRP”). The MRP is a U.S. nonqualified defined contribution/deferred compensation plan available to all highly compensated employees, including the Named Executive Officers,named executive officers, as outlined by Section 414(q)(1)(B)(i) of the Code. Employees who are working in the U.S. while on an international assignment are not eligible to participate in the MRP. All participants in the MRP can elect to defer from 2% to 25% of their annual base earnings and 2% to 50% of their annual cash incentive earnings. Matching contributions by the Company equal 50% of the first 10% of base salary and annual cash incentives deferred by a participant. Other than the MRP, there are no other retirement income plans available to the Company’s highly compensated employees in the U.S. The MRP provides all participants, including the Named Executive Officers,named executive officers, with a taxgross-up of Medicare taxes incurred on contributions to the plan. The Medicare taxgross-up provides for parity with other employees who are eligible to participate in the Company’stax-qualified 401(k) plan and therefore do not pay Medicare tax on Company contributions. Mr. Thirot’s Retirement Benefits As a resultresident of his move from Swiss payroll and benefits to U.S. payroll and benefits effective January 1, 2017,Switzerland, Mr. Thirot is now a participantparticipates in the MRP. He retains aSwiss Social Insurance System (“Swiss System”) that provides retirement, disability, and death benefits. His Swiss retirement benefit from his employment in Switzerland that includes contributions that he mademakes to the fund, as well as companyCompany contributions that wereare made to the fund on his behalf. Mr. Thirot participated in the MRP during the period 2017-2021 while he was a resident of the U.S. and retains a benefit from both his contributions and contributions the Company made on his behalf to that plan. Ms. Koolhaas’ Retirement Benefits As a resident of Switzerland, Ms. Koolhaas also participates in the Swiss System that provides retirement, disability, and death benefits. Her retirement benefit includes contributions that she makes to the fund, as well as Company contributions to Mr. Thirot’s Swiss retirement account stopped at the end of 2016 and no company contributions werethat are made to his Swissthe fund on her behalf. Ms. Koolhaas does not participate in any U.S.- based retirement account in 2017.plans. | | | | | | | 47 | | |
Compensation Discussion and Analysis
Health and Welfare Benefits
The health and welfare plans, including Company-provided life insurance, provided to the Named Executive Officers are the same plans available to all regular staff employees.
Mr. Thirot’s Health and Welfare Benefits Mr. Thirot pays employee premiums foris required by Swiss law to carry health care coverage. However, the Company’s Swiss entity does not provide health care coverage to its employees, nor do we provide Mr. Thirot with a health care allowance. Under the Swiss System, Mr. Thirot’s spouse is eligible to receive benefits in the event of his death from sickness or accident. He no longer participates in any U.S. health and welfare benefit programs. Ms. Koolhaas’ Health and Welfare Benefits Ms. Koolhaas receives a health care allowance as part of her Swiss compensation that is intended to help defray the cost of obtaining health care coverage for himselfherself and his dependents under an international plan establishedher family in Switzerland. Residents in Switzerland are required to carry health care coverage, however it is not common for employees who are onSwiss companies to provide this benefit to their employees. The Company’s | | | | | | | | | 61 | |
Compensation Discussion and Analysis Swiss entity does not provide health care coverage to its employees. Under the Swiss System, Ms. Koolhaas’ spouse is eligible to receive benefits in the event of her death from sickness or have recently been on international assignments. Mr. Thirot and his dependents are no longer eligible for Swissaccident. She is not a participant in any U.S. health and welfare benefits. He became a participant in the U.S. life insurance program for 2017.benefit programs. Perquisites A modest level of perquisites is available to Named Executive Officers:named executive officers: | | | | | Perquisite | | Benefit | | Usage in 2017 2023 | | Company Aircraft
| | To facilitate conducting the Company’s business and provide a competitive advantage, a private aircraft service is available. Senior Officers may utilize the aircraft service for business purposes. On rare occasions, an executive may use the aircraft service for personalnon-business purposes. | No personal use of private aircraft by Named Executive Officers in 2017. | Executive Physical | | To ensure Senior Officerssenior officers monitor their health and general well-being, an annual physical examination is provided at the Company’s expense. Senior Officersofficers may also have the ability to use their own physician to perform the required tests and evaluations, in lieu of using the selected facilities. For those Senior Officers,senior officers, expenses were processed through their employee health care coverage and not through the executive physical program. | | No Named Executive OfficersTwo named executive officers utilized the formal executive physical program in 2017.2023. | | | | Vacation Facility | | Two Company-owned condominiums arecondominium is available on a limited basis to employees at the Vice President level and above. | | Two Named Executive OfficersOne named executive officer used the vacation facility in 2017.2023. |
The aggregate amount of perquisites provided in 20172023 for each of the Named Executive Officers, with the exception ofnamed executive officers, except for Mr. Thirot and Ms. Koolhaas, was less than $10,000 and therefore only the perquisites for Mr. Thirot’s usage isThirot and Ms. Koolhaas are reported in the Summary Compensation Table. Mr. Thirot’s International Assignment
In light of his transition to being a U.S.-based employee, the initial international assignment benefits provided to Mr. Thirot were reduced for 2016, and then were eliminated when he moved to U.S. payroll and benefits at the beginning of 2017. The Company continues to provide tax support to Mr. Thirot as it relates to carryover costs related to his assignment and these amounts are included in the “All Other Compensation” column of the Summary Compensation Table and are explained in detail in the footnotes of that table.
Senior Executive Severance Plan To encourage the retention of certain key executives of the Company and thereby promote the stability and continuity of management, the Senior Executive Severance Plan (“Severance Plan”) was established by the Company and approved by the Committee effective March 31, 2017. ParticipationDuring its March 23, 2021 meeting, the Committee approved expanding the Severance Plan to include other senior officers. For 2023, the named executive officers participating in the plan is limited to certain Executive Officers, namelySeverance Plan were, Messrs. Corona, Thirot and Quigley and Malan and Ms. Carroll.Williams. The Severance Plan provides severance benefits in the event a participant’s employment is terminated under certain circumstances as explained and illustrated in Potential Payments Upon Termination. Termination or Change in Control (below). The Plan does not provide excise tax gross-ups to participants under Section 280G of the Code. The Company’s EIP provides for the immediate vesting of restricted stock and performance awards upon a qualified termination in connection with a change in control and(e.g., “double trigger”), which is also explained in Potential Payments Upon Termination.Termination or Change in Control. Under the terms of the Severance Plan covering the eligible Named Executive Officers,named executive officers, each would be entitled to severance payments and benefits in the event that he or she experiences a “qualifying termination” (i.e., any termination of the participant by the Company other than for cause, disability, or death:death, or for good reason by a participant in connection with a change in control as is defined in the Severance Plan). A change in control will not automatically entitle an eligible Named Executive Officernamed executive officer to severance benefits or equity acceleration; instead, the executive must also lose his or her job, or suffer a significant adverse change to employment terms or conditions in order to be eligible for benefits under the Severance Plan. In the event of a termination for any reason, eligible Named Executive Officersnamed executive officers would be entitled to any | | | | | | | 48 | | |
Compensation Discussion and Analysis
earned compensation owed but not yet paid as of the date of termination. Eligible Named Executive Officersnamed executive officers would also be entitled to payment of vested benefits, if any. Details of the Severance Plan are provided in the Potential Payments Upon Termination or Change in Control section of this Proxy Statement. GeneralMr. Thirot’s Severance PlanBenefit
The General Severance Plan was amended and restated effective March 27, 2017 to includeUnder the Senior Officers not covered by the Senior Executive Severance Plan. The General Severance Planterms of Mr. Thirot’s Swiss employment agreement he is designed to provideeligible for similar severance benefits to a Tier 2 participant of the Severance Plan.
Ms. Koolhaas’ Severance Benefit Under the terms of Ms. Koolhaas’ Swiss employment agreement she is eligible for similar severance benefits to a Tier 3 participant of the Severance Plan. As a consequence of the completion of the sale of our EMEA staffing operations, Ms. Koolhaas’ employment terminated March 31, 2024. The termination payments to be made to Ms. Koolhaas are described in the event of an involuntary termination of employment as a result of general separation of employment or general reduction in force, as provided for under the plan. Mr. Armstrong is covered by the General Severance Plan and benefits under this plan are explained and illustrated in Potential“Potential Payments Upon Termination.Termination or Change in Control” section below.
| | | | | | 62 | | | |
Compensation Discussion and Analysis Governance of Executive Compensation Programs Annual Say on Pay Vote
The frequency of the Company’s Say on Pay vote is annual and, as such, the Committee considers the shareholder advisory vote on executive compensation as disclosed in the Company’s proxy statement each year. In 2017, 98.7% of the shares represented at the meeting approved the Say on Pay proposal. The Committee considered this result as a factor in its decision to maintain the general design of the Company’s compensation programs.
Executive Stock Ownership and Retention Requirements The Committee seeksimplemented minimum stock ownership and retention requirements to encourage meaningful stock ownership by the Company’s executives so as to alignthat aligns their interests more closely with stockholders’shareholders’ interests. The Committee periodically reviews the Executive Stock Ownership Requirements to ensure the design is consistent with market practice. In consideration of the Company’s LTI design that provides Senior Officers with the opportunity to earn a greater number of shares through the addition of performance share awards and to ensure guidelines are in line with current market practice and those of our peers, as determined by research performed by the Committee approved the current executive stock ownership and retention requirements.Consultant. The requirements are expressed as a multiple of base salary for each level of Senior Officer and more closely reflect current market practices,senior officer, as determined by research performed byshown in the Consultant.table below. | | | | | 20172023 Minimum Stock Ownership Requirements
| | Multiple of Base Salary | CEO | | CFO and EVP | | Other Senior Officers | 6x | | 3x | | 1.5x1x-1.5x |
During 2023, the Committee reviewed the executive stock ownership requirements to be in line with market practice and continue to focus on the retention of senior officers. Under the ownership requirements, Senior Officerssenior officers are required to hold all (100%(50%) of theafter-tax shares acquired upon equity award vesting until compliance with the stock ownership requirements is achieved. Shares counted toward achievement of ownership requirements include: directly owned shares, (including those held in retirement plans), shares held by family or trusts, and 60%100% of unvested restricted stock awards, restricted stock units, and earned unvested performance shares. Although there is not a fixed compliance period, it is expectedlikely that new Senior Officerssenior officers will likely reach the guidelinesrequirements within five years from their start date. The Committee reviews each executive’s progress towards and compliance with the share ownership requirements on an annual basis. If the required level of ownership is not achieved within a reasonable period of time or an executive falls out of compliance with the requirements, the Committee can eliminate or adjust the amount of any future equity awards. Stock ownership levels must be maintained as long as the executive is employed by the Company as a Senior Officersenior officer and is subject to the terms of the Executive Stock Ownership Requirements. As of March 19, 2018,February 13, 2024, all Named Executive Officers were in compliance withnamed executive officers have met their stock ownership requirement, other than two who had been in compliance until their requirements substantially increased as a result of being promoted during 2017.requirement. Incentive Compensation Recovery (“Clawback”) Policy The Company’s Clawback policyPolicy applies to awards granted under the STIP and EIP on or after January 1, 2011 to officers of the Company who are subject to Section 16 of the Securities Exchange Act of 1934. In early 2019, the application of the Clawback Policy was broadened to include all senior officers. These officers are required to repay or forfeit, to the fullest extent permitted by law and as directed by the Committee, any performance-based annual or long-term incentive compensation, based on the achievement of financial results that were subsequently restated due to the Company’s materialnon-compliance with the financial disclosure requirements of the federal securities laws, provided the amount of incentive compensation that would have been received or earned would have been lower had the financial results been properly reported. If necessary, we plan to modify ourIn 2023, the Company modified its policy to comply with the provisions of the Dodd-Frank Wall Street Reformnew SEC and Consumer Protection Act, when the SEC or Nasdaq implements rules and regulations. The Clawback policy wasPolicy is included as part of the Company’s updated Insider Trading Policy and Section 16 Compliance Procedures in 2017.Procedures. | | | | | | | 49 | | |
Compensation Discussion and Analysis
Hedging and Pledging of Shares The Company’s Insider Trading Policy and Section 16 Compliance Procedures strictly prohibit the Company’s Directors directors and all employees, including the Executive Officers,named executive officers, from engaging in hedging, monetization or other derivativesderivative or speculative transactions in securities of the Company. This includes short sales, failing to deliver Company securities sold, put or call options, equity swaps, collars, forward sale contracts, exchange funds, holding Company securities in a margin account, or pledging Company securities as collateral for a loan. The EIP does not allow the pledging, sale, assignment, or transfer of shares in any manner, except if the Committee determines that a transfer will not violate any requirements of the SEC or IRS. The Committee may permit an inter vivos transfer by gift to, or for the benefit of, a family member of the grantee.
Tax and Accounting Considerations Considerations: Deductibility of Executive Compensation Prior to 2018, Section 162(m) of the Code placedplaces a limit of $1 million on the amount of nonperformance-based compensation that couldcan be deducted for tax purposes for the CEO, CFO, and the other three highest paid executives (excluding the CFO) listed in the Summary Compensation Table. TheTable, or were listed in the Summary Compensation Table in any preceding year after 2016. Prior to 2018, the Company’s incentive compensation programs were generally designed to qualify for the performance-based exception to this limit. Beginning in 2018, effective
| | | | | | | | | 63 | |
Compensation Discussion and Analysis with the Tax Cuts and Jobs Act (‘the Act”) that was enacted in December 2017, the corporate tax deduction previously available for performance-based compensation above $1 million for Named Executive Officers has beencurrent or former named executive officers was eliminated. This means that pay to each Named Executive Officercurrent or former named executive officer in excess of $1 million willis no longer be tax deductible. Transitional relief is available under the new tax rules where a written, binding contract was in effect on November 2, 2017 and is not materially modified after that date. We will continue to comply with the requirements of Section 162(m) to the extent to which our outstanding LTI awards are determined to be tax deductible under the transitional relief. Now that the performance-based exception is no longer available, the Company will no longer include reference to Section 162(m) related limitations or provisions or stockholdershareholder approval for this purpose. However, management and the Committee have decidedcurrently intend to retain as good governance, certain practices that had been in place previously for Section 162(m) purposes. These practices include: specification of guidelines for the adjustment of special items, establishing performance goals within the first ninety days of a performance period, and requiring the Committee’s certification of results prior to the payout of any award. Compensation and Talent Management Committee Report Prior to and at the Special Board of Directors meeting held on March 20, 2018,19, 2024, the Compensation and Talent Management Committee members reviewed and discussed the Compensation Discussion and Analysis presented in this Proxy Statement. Based on its review and subsequent discussions with management, the Committee and Board approved the Compensation Discussion and Analysis and directed management to include it in this Proxy Statement. This report is submitted by the Compensation and Talent Management Committee of the Board of Directors. THE COMPENSATION AND TALENT MANAGEMENT COMMITTEE ROBERT S. CUBBIN, CHAIR GERALD S. ADOLPH INAMARIE F. JOHNSON LESLIE A. MURPHY | | | | | | | | | | | 64 | | | |
2023 Executive Compensation Tables Summary Compensation Table 2023 | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary(1)
($) | | Bonus
($) | | Stock
Awards(2),(3)
($) | | Option
Awards
($) | | Non-Equity
Incentive Plan
Compensation
($) | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation Earnings ($) | | All Other
Compensation(4)(5)(6)
($) | | Total ($) | | | | | | | | | | | Peter W. Quigley | | 2023 | | 900,000 | | — | | 2,160,522 | | — | | 1,015,200 | | — | | 87,702 | | 4,163,424 | | | | | | | | | | | President and Chief | | 2022 | | 884,077 | | — | | 1,811,085 | | — | | 777,988 | | — | | 62,131 | | 3,535,281 | | | | | | | | | | | Executive Officer | | 2021 | | 840,000 | | — | | 2,734,149 | | — | | 320,628 | | — | | 43,831 | | 3,938,608 | | | | | | | | | | | Olivier G. Thirot | | 2023 | | 667,200 | | — | | 897,770 | | — | | 533,093 | | — | | 88,086 | | 2,186,148 | | | | | | | | | | | Executive Vice President | | 2022 | | 620,583 | | — | | 864,388 | | — | | 443,300 | | — | | 76,181 | | 2,004,451 | | | | | | | | | | | and Chief Financial Officer | | 2021 | | 588,000 | | — | | 1,732,281 | | — | | 180,000 | | — | | 45,225 | | 2,545,506 | | | | | | | | | | | Daniel H. Malan | | 2023 | | 443,000 | | — | | 571,681 | | — | | 244,000 | | — | | — | | 1,258,681 | | | | | | | | | | | Senior Vice President and | | 2022 | | — | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | President Science, | | 2021 | | — | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | Engineering, & Technology | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vanessa P. Williams | | 2023 | | 473,827 | | — | | 400,835 | | — | | 325,000 | | — | | 26,122 | | 1,225,784 | | | | | | | | | | | Senior Vice President and | | 2022 | | 413,115 | | — | | 405,706 | | — | | 225,600 | | — | | 20,666 | | 1,065,088 | | | | | | | | | | | General Counsel | | 2021 | | — | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | Dinette Koolhaas | | 2023 | | 557,668 | | — | | 350,178 | | — | | — | | — | | 50,020 | | 957,866 | | | | | | | | | | | Senior Vice President and | | 2022 | | 521,865 | | — | | 368,498 | | — | | 318,900 | | — | | 32,859 | | 1,242,122 | | | | | | | | | | | President International | | 2021 | | 535,240 | | — | | 505,786 | | — | | 198,000 | | — | | 34,138 | | 1,273,163 |
| (1) | ROBERT S. CUBBIN, CHAIRRepresents 2023, 2022, and 2021 actual base salary earnings. Ms. Williams was not a named executive officer in 2021 and Mr. Malan was not a named executive officer in 2022 or 2021.
JANE E. DUTTON
TERRENCE B. LARKIN
LESLIE A. MURPHY, VICE CHAIR
DONALD R. PARFET
| | |
| (2) | The grant date fair values reported for 2023 are determined by multiplying the number of shares granted by the Market Value (“MV”) on the grant date. MV for Restricted Stock is determined by the closing price on the date of grant. MV for Performance Shares is determined by the closing stock price on the date of grant, discounted because these shares are not eligible for dividends. The MV for the Restricted Stock granted to Mr. Malan on February 14, 2023 is $17.93 and to all named officers on March 21, 2023 is $16.03. The MV for Performance Shares granted to all named officers on March 21, 2023 is $15.18. |
| (3) | The maximum number of shares and award value for Performance Share awards for the 2023-2025 performance period is 200% of target shares granted. The table below shows the maximum number of shares and value for Performance Share awards based on achievement of financial measures using the values of $15.18 for shares granted March 21, 2023. |
| | | | | | | | | | Name | | Maximum Number of
Performance Shares | | | Maximum Value of
Performance Shares | | | | | Peter W. Quigley | | | 210,544 | | | | 3,196,058 | | | | | Olivier G. Thirot | | | 69,416 | | | | 1,053,735 | | | | | Daniel H. Malan | | | 24,872 | | | | 377,557 | | | | | Vanessa P. Williams | | | 30,992 | | | | 470,459 | | | | | Dinette Koolhaas | | | 27,076 | | | | 411,014 | |
| (4) | Amounts for named executive officers include company matching contributions to the Management Retirement Plan (“MRP”), and Medicare tax gross-ups on those MRP contributions. (See table below.) The total value of perquisites provided to each named executive officer (other than Mr. Thirot and further below, Ms. Koolhaas) in 2023 was less than $10,000 and, in accordance with reporting regulations, were not required to be included in this table. |
| | | | | | | | | | | | | Name | | Company
Matching MRP
Contributions | | | MRP
Medicare
Gross-ups | | | Total All
Other
Compensation | | | | | | Peter W Quigley | | | 83,899 | | | | 3,803 | | | | 87,702 | | | | | | Daniel H. Malan | | | — | | | | — | | | | – | | | | | | Vanessa P. Williams | | | 23,691 | | | | 2,431 | | | | 26,122 | |
| | | | | | | 50 | 65 | | |
20172023 Executive Compensation Tables
Summary Compensation Table 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary(1) ($) | | | Bonus
($) | | | Stock
Awards
(2)(3)(4) ($) | | | Option
Awards
($) | | | Non-Equity
Incentive Plan
Compensation
($) | | | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($) | | | All Other
Compensation
(5) ($) | | | Total ($) | | | George S. Corona | | | 2017 | | | | 875,852 | | | | - | | | | 1,893,664 | | | | - | | | | 1,051,064 | | | | - | | | | 38,438 | | | | 3,859,019 | | | President and Chief Executive Officer | | | 2016 | | | | 655,000 | | | | - | | | | 995,138 | | | | - | | | | - | | | | - | | | | 58,260 | | | | 1,708,397 | | | | | | 2015 | | | | 655,000 | | | | - | | | | 1,159,900 | | | | - | | | | 697,968 | | | | - | | | | 55,697 | | | | 2,568,565 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Olivier G. Thirot | | | 2017 | | | | 533,500 | | | | | | | | 701,381 | | | | | | | | 400,045 | | | | | | | | 45,867 | | | | 1,680,793 | | | Senior Vice President | | | 2016 | | | | 515,000 | | | | - | | | | 568,650 | | | | - | | | | - | | | | - | | | | 729,947 | | | | 1,813,597 | | | and Chief Financial Officer | | | 2015 | | | | 481,032 | | | | - | | | | 331,400 | | | | - | | | | 342,722 | | | | - | | | | 291,355 | | | | 1,446,509 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Teresa S. Carroll | | | 2017 | | | | 548,011 | | | | | | | | 784,666 | | | | | | | | 437,723 | | | | | | | | 35,542 | | | | 1,805,942 | | | EVP and President of Global Talent | | | 2016 | | | | 500,000 | | | | - | | | | 568,650 | | | | - | | | | 104,125 | | | | - | | | | 39,439 | | | | 1,212,214 | | | Solutions and GM - Global Solutions, Marketing, and HR | | | 2015 | | | | 482,227 | | | | - | | | | 662,800 | | | | - | | | | 228,220 | | | | - | | | | 35,174 | | | | 1,408,421 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - | | | Peter W. Quigley | | | 2017 | | | | 548,011 | | | | | | | | 784,666 | | | | | | | �� | 416,443 | | | | | | | | 30,077 | | | | 1,779,197 | | | EVP and President of Global Staffing | | | 2016 | | | | 500,000 | | | | - | | | | 568,650 | | | | - | | | | - | | | | - | | | | 48,032 | | | | 1,116,682 | | | and General Manager - Global IT, | | | 2015 | | | | 482,227 | | | | - | | | | 662,800 | | | | - | | | | 392,921 | | | | - | | | | 41,672 | | | | 1,579,621 | | | Global Service, and Global Business | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Solutions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Steven S. Armstrong | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Senior Vice President and General | | | 2017 | | | | 332,000 | | | | - | | | | 261,175 | | | | | | | | 129,468 | | | | - | | | | 18,309 | | | | 740,952 | | | Manager - US Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Carl T. Camden | | | 2017 | | | | 398,252 | | | | - | | | | 2,093,613 | | | | - | | | | - | | | | - | | | | 22,949 | | | | 2,514,813 | | | Former President and Chief | | | 2016 | | | | 1,000,000 | | | | - | | | | 2,274,600 | | | | - | | | | - | | | | - | | | | 102,614 | | | | 3,377,214 | | | Executive Officer | | | 2015 | | | | 1,000,000 | | | | - | | | | 2,651,200 | | | | - | | | | 1,539,200 | | | | - | | | | 98,112 | | | | 5,288,512 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Represents 2015, 2016, and 2017 actual base salary earnings. 2017 amount for Mr. Camden also includes a lump sum payout for all unused vacation upon his termination from the company.
(2) Grant date fair value is determined by multiplying the number of shares granted by the Market Value (MV) on the grant date. MV is determined by the closing price on the date of grant. The MV for the Restricted Stock Units granted to all named officers on February 15, 2017 is $21.95, on February 17, 2016 is $16.44, and on February 11, 2015 is $17.65. The target Performance Share awards that are based on financial measures are valued using the closing stock price on the date of grant, discounted because these shares are not eligible for dividends. The resulting value for the 2017 grant on February 12, 2017 is $21.07, the 2016 grant on February 17, 2016 is $15.85, and the 2015 grant on May 6, 2015 is $16.31. The target Performance Share awards that are based on the Relative TSR measure are valued using a Monte Carlo valuation method, based on the MV at the date of grant. The value for the 2017 grant on February 15, 2017 is $20.16, the 2016 grant on February 17, 2016 is $19.73, and the 2015 grant on May 6, 2015 is $16.01. The MV for the May 10, 2017 grants of Restricted Stock Units to Messrs. Corona and Quigley, as well as Ms. Carroll, is $21.93. The MV for the Performance Shares granted on May 10, 2017 to Messrs. Corona and Quigley, as well as Ms. Carroll, is $21.05 for shares based on financial measures, and $20.14 for the shares based on the Relative TSR measure. Please reference the Company’s 201710-K filing for details of the assumptions used in the Monte Carlo valuation.
(3) The maximum number of shares and award value for Performance Share awards for the 2017-2019 performance period is 200% of target shares granted. The table below shows the maximum number of shares and value for Performance Share awards based on achievement of financial measures using the values of $21.07 for shares granted February 15, 2017 and $21.05 for shares granted May 10, 2017, and for Performance Share awards based on achievement of the Relative TSR measure using the values of $20.16 for shares granted February 15, 2017 and $20.14 for shares granted May 10, 2017, as explained in the previous footnote.
| (5) | | | | | | | 51 | | The amount reported for Mr. Thirot includes carryover costs associated with his international assignment from Switzerland to the U.S.: fee’s related to U.S. tax preparation of $6,415, fee’s related to Switzerland tax preparation of $19,884, and additional administrative expenses of $1,315, car allowance, and supplemental contribution to the government-mandated occupational pension benefit program paid through Swiss payroll. The amount reported for Ms. Koolhaas includes her representation allowance, supplemental health care allowance, and supplemental contribution to the government-mandated occupational pension benefit program paid through Swiss payroll. |
2017 Executive Compensation Tables
| | | | | | | | | | | | | | | | | Name | | International
Assignment
Carryover Cost | | | Car Allowance | | | Supplemental
Pension
Contributions | | | Total All Other
Compensation | | | | | | | Olivier G. Thirot | | | 27,614 | | | | 22,685 | | | | 37,787 | | | | 88,086 | |
| | | | | | Name | | Maximum
Number of
Performance
Shares | | Maximum
Value of
Performance
Shares | George S. Corona | | 139,782 | | $2,901,316 | Olivier G. Thirot | | 49,950 | | $1,037,295 | Teresa S. Carroll | | 55,900 | | $1,160,484 | Peter W. Quigley | | 55,900 | | $1,160,484 | Steven S. Armstrong | | 18,600 | | $386,260 | Carl T. Camden | | 149,100 | | $3,096,310 |
(4) Stock Awards granted to Mr. Camden include the market values of both restricted shares and performance shares. Mr. Camden forfeited all unvested restricted shares upon his retirement, however, he is eligible to receive prorated performance shares, if they become earned, as he was “Normal Retirement eligible” under the terms of the EIP for the outstanding 2015, 2016 and 2017 grants.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Group Term
Life
Premiums | | Company
Matching
MRP
Contributions | | MRP
Medicare
Gross-ups | | Use of
Vacation
Property | | International
Assignment
Carryover
Cost | | Total All Other
Compensation | George S. Corona | | | | $1,808 | | | | | $35,034 | | | | | $1,596 | | | | | - | | | | | - | | | | | $38,438 | | Olivier G. Thirot | | | | $1,472 | | | | | $26,675 | | | | | $1,259 | | | | | $506 | | | | | $15,955 | | | | | $45,867 | | Teresa S. Carroll | | | | $1,380 | | | | | $32,607 | | | | | $1,555 | | | | | - | | | | | - | | | | | $35,542 | | Peter W. Quigley | | | | $1,380 | | | | | $27,401 | | | | | $1,296 | | | | | - | | | | | - | | | | | $30,077 | | Steven S. Armstrong | | | | $916 | | | | | $16,600 | | | | | $793 | | | | | - | | | | | - | | | | | $18,309 | | Carl T. Camden | | | | $2,070 | | | | | $19,913 | | | | | $966 | | | | | - | | | | | - | | | | | $22,949 | |
(5) Amounts for named executive officers include premiums paid for life insurance, company matching contributions to the Management Retirement Plan (MRP), and Medicare taxgross-ups on those MRP contributions. (See table above.) The MRP is anon-qualified defined contribution deferred compensation plan available to all highly compensated employees, including the named executive officers. No highly compensated employees as outlined by Section 414(q)(1)(B)(i) of the Internal Revenue Code, including the Named Executive Officers, are eligible to participate in the Company’stax-qualified retirement plan. Company contributions to the MRP include the Company match on participant deferrals as explained in the Retirement Plan section of this document. The amount reported for Mr. Thirot includes the following 2017 carryover costs associated with his international assignment from Switzerland to the U.S. during 2014 to 2016: tax preparation fee of $14,501, professional services of $15,042, visa support expense of $6,216, tax recoveries (for 2016) of U.S. federal and Michigan state taxes made by the Company on Mr. Thirot’s behalf under the Company’s tax equalization policy totaling $19,804. The total value of perquisites provided to each Named Executive Officer (other than Mr. Thirot) in 2017 was less than $10,000 and, in accordance with reporting regulations, were not required to be included in this table. Amounts reported in this column for 2016 and 2015 have been restated to remove dividends and dividend equivalents earned on outstanding RSA and RSU awards, as dividends are included in the grant date fair value of the award.
| | | | | | | | | | | | | | | | | Name | | Representation
Allowance | | | Supplemental
Health Care | | | Supplemental
Pension
Contributions | | | Total All Other
Compensation | | | | | | | Dinette Koolhaas | | | 20,016 | | | | 6,305 | | | | 23,699 | | | | 50,020 | |
| (6) | | | | | | | 52 | | Amounts reported for Mr. Thirot and Ms. Koolhaas are converted from Swiss Francs to U.S. Dollars at an exchange rate of 1 CHF = 1.112 USD. This is calculated using the IRS Yearly Average Currency Exchange Rate for Switzerland for 2023 of 0.899 (1 CHF ÷ 0.899 = $1.112). |
2017 Executive Compensation Tables
Grants of Plan-Based Awards 20172023(1) | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(3) | | Estimated Future Payouts Under Equity Incentive Plan
Awards(4) | | All Other
Stock
Awards:
Number
of Shares
of Stock
or Units (5)
(#) | | Grant Date Fair
Value of
Stock and Option
Awards (6)
($) | | Name | | Grant
Date (2) | | Threshold
($) | | Target ($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | George S. Corona | | STIP | | 262,819 | | 1,051,275 | | 2,102,549 | | | | | | | | | | | | | | 2/15/2017 | | | | | | | | 8,156 | | 32,625 | | 65,250 | | | | 677,513 | | | | 2/15/2017 | | | | | | | | | | 10,875 | | | | | | 238,706 | | | | 5/10/2017 | | | | | | | | 9,317 | | 37,266 | | 74,532 | | | | 773,145 | | | | 5/10/2017 | | | | | | | | | | 9,316 | | | | | | 204,300 | Olivier G. Thirot | | STIP | | 100,031 | | 400,125 | | 800,250 | | | | | | | | | | | | | | 2/15/2017 | | | | | | | | 6,244 | | 24,975 | | 49,950 | | | | 518,648 | | | | 2/15/2017 | | | | | | | | | | 8,325 | | | | | | 182,734 | Teresa S. Carroll | | STIP | | 116,296 | | 440,810 | | 881,619 | | | | | | | | | | | | | | 2/15/2017 | | | | | | | | 4,650 | | 18,600 | | 37,200 | | | | 386,260 | | | | 2/15/2017 | | | | | | | | | | 6,200 | | | | | | 136,090 | | | | 5/10/2017 | | | | | | | | 2,338 | | 9,350 | | 18,700 | | | | 193,982 | | | | 5/10/2017 | | | | | | | | | | 3,116 | | | | | | 68,334 | Peter W. Quigley | | STIP | | 102,099 | | 440,810 | | 881,619 | | | | | | | | | | | | | | 2/15/2017 | | | | | | | | 4,650 | | 18,600 | | 37,200 | | | | 386,260 | | | | 2/15/2017 | | | | | | | | | | 6,200 | | | | | | 136,090 | | | | 5/10/2017 | | | | | | | | 2,338 | | 9,350 | | 18,700 | | | | 193,982 | | | | 5/10/2017 | | | | | | | | | | 3,116 | | | | | | 68,334 | Steven S. Armstrong | | STIP | | 42,828 | | 199,200 | | 398,400 | | | | | | | | | | | | | | 2/15/2017 | | | | | | | | 2,325 | | 9,300 | | 18,600 | | | | 193,130 | | | | 2/15/2017 | | | | | | | | | | 3,100 | | | | | | 68,045 | Carl T . Camden | | STIP | | 325,000 | | 1,300,000 | | 2,600,000 | | | | | | | | | | | | | | 2/15/2017 | | | | | | | | 18,638 | | 74,550 | | 149,100 | | | | 1,548,155 | | | | 2/15/2017 | | | | | | | | | | 24,850 | | | | | | 545,458 |
(1) The Company has not granted stock options since 2004, including 2017. Accordingly, this column has been eliminated from the table.
(2) Long-term incentive grants to named executive officers, consisting of Restricted Share Units and Performance Shares, were approved by the Committee at its February 15, 2017 meeting. Additional grants were provided to Messrs. Corona and Quigley and Ms. Carroll effective with their promotions on May 10, 2017.
(3) Payout for threshold performance under the STIP for Messrs. Corona and Thirot was 25% of each named executive officer’s target payout amount, as payouts were based 100% on corporate measures and goals. In addition to corporate measures, business unit measures are included in the STIP goals for Ms. Carroll and Messrs. Quigley and Armstrong, which have payouts for threshold performance ranging from 20% to 50% of each named executive officer’s target payout amount. The weighted average payout for all performance measures at a threshold level of performance is equal to approximately 26.4% of the target payout amount for Ms. Carroll, 23.2% of the target payout amount for Mr. Quigley, and 21.5% of the target payout amount for Mr. Armstrong. For the corporate measures, achievement between threshold and intermediate, intermediate and target, and target and maximum levels is interpolated on a straight-line basis. For Ms. Carroll’s and Messrs. Quigley and Armstrong’s business unit measures, there is no straight-line interpolation between payout levels of the payout schedule. The required level of performance for each payout level must be achieved in order to earn the corresponding payout amount. STIP maximum payout is 200% of target with an individual maximum payout of no more than $3,000,000 as required under the terms of the amended and restated STIP, effective February 12, 2015.
(4) Performance Shares granted in 2017 are earned based upon achievement of two financial measures and a Relative TSR measure. These three measures are equally weighted. Achievement of a threshold level of performance on any measure results in 25% of the target shares being earned. Achievement of an intermediate level of performance (halfway between threshold and target) results in 75% of the target shares being earned. Achievement of the maximum level of performance on any measure results in 200% of the target shares being earned by the named executive officer. Achievement between these levels is interpolated on a straight-line basis. Restricted Share Units, with aone-year performance hurdle, were granted to each of the Named Executive Officers in 2017. Achievement of theone-year performance hurdle will trigger the awards to vest ratably on each of the first four anniversaries of the date of grant (25% per year). If theone-year performance hurdle is not achieved, all shares will be forfeited. The performance hurdle was achieved for 2017.
(5) There were no Restricted Share awards granted to the Named Executive Officers during the 2017 plan year.
| | | | | | | | | | | | | | | | | | | | | | | | Grant
Date(2) | | Approval
Date | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(3) | | Estimated Future Payouts
Under Equity Incentive Plan
Awards(4) | | All Other
Stock Awards:
Number of
Shares of
Stock or
Units(5)
(#) | | Grant
Date Fair
Value of
Stock and
Option
Awards(6)
($) | | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | | | | | | | | | | Peter W. Quigley | | STIP | | | | 540,000 | | 1,080,000 | | 2,160,000 | | | | | | | | | | | | | 3/21/2023 | | | | | | | | | | 52,636 | | 105,272 | | 210,544 | | | | 1,598,029 | | | 3/21/2023 | | | | | | | | | | | | | | | | 35,090 | | 562,493 | | | | | | | | | | | | Olivier G. Thirot | | STIP | | | | 283,560 | | 567,120 | | 1,134,240 | | | | | | | | | | | | | 3/21/2023 | | | | | | | | | | 17,354 | | 34,708 | | 69,416 | | | | 526,867 | | | 3/21/2023 | | | | | | | | | | | | | | | | 23,138 | | 370,902 | | | | | | | | | | | | Daniel H. Malan | | STIP | | | | 121,825 | | 243,650 | | 487,300 | | | | | | | | | | | | | 2/14/2023 | | | | | | | | | | | | | | | | 13,943 | | 249,998 | | | 3/21/2023 | | | | | | | | | | 6,218 | | 12,436 | | 24,872 | | | | 188,778 | | | 3/21/2023 | | | | | | | | | | | | | | | | 8,291 | | 132,905 | | | | | | | | | | | | Vanessa P. Williams | | STIP | | | | 153,994 | | 307,987 | | 615,975 | | | | | | | | | | | | | 3/21/2023 | | | | | | | | | | 7,748 | | 15,496 | | 30,992 | | | | 235,229 | | | 3/21/2023 | | | | | | | | | | | | | | | | 10,331 | | 165,606 | | | | | | | | | | | | Dinette Koolhaas | | STIP | | | | 158,000 | | 316,000 | | 632,000 | | | | | | | | | | | | | 3/21/2023 | | | | | | | | | | 6,769 | | 13,538 | | 27,076 | | | | 205,507 | | | 3/21/2023 | | | | | | | | | | | | | | | | 9,025 | | 144,671 |
| (1) | The Company has not granted stock options since 2004, including 2023. Accordingly, this column has been eliminated from the table. |
| (2) | Long-term incentive grants to named executive officers, consisting of Restricted Stock Awards/Units and Performance Shares, were approved by the Committee at its February 14, 2023, meeting for Mr. Malan and its March 21, 2023, meeting for all named officers. |
| (3) | Shown are the Threshold, Target, and Maximum payouts for which each executive was eligible under our STIP with respect to fiscal 2023 performance. Amounts actually earned with respect to these awards are included in the Summary Compensation Table as Non-Equity Incentive Plan compensation. Further detail regarding actual 2023 STIP awards appear in the Compensation Discussion & Analysis. |
| (4) | Performance Shares granted in 2023 are earned based upon achievement of two financial measures. These two measures are equally weighted. Achievement of a threshold level of performance on either measure results in 50% of the target shares for that measure being earned. Achievement of the target level of performance on either measure results in 100% of the target shares for that measure being earned. Achievement of the maximum level performance on either measure results in 200% of the target shares for that measure being earned by the named executive officer. Achievement between these levels for each measure is interpolated on a straight-line basis. |
| (5) | Restricted Stock Awards/Units granted on March 21, 2023 vest ratably on each of the first three anniversaries of the date of grant (33.3% per year). Restricted Stock Awards granted to Mr. Malan on February 14, 2023 will cliff vest on the second anniversary of the date of grant. |
| (6) | The grant date fair values reported for 2023 are determined by multiplying the number of shares granted by the Market Value (“MV”) on the grant date. MV for Restricted Stock is determined by the closing price on the date of grant. MV for Performance Shares is determined by the closing stock price on the date of grant, discounted because these shares are not eligible for dividends. The MV for the Restricted Stock granted to Mr. Malan on February 14, 2023 is $17.93 and to all named officers on March 21, 2023 is $16.03. The MV for Performance Shares granted to all named officers on March 21, 2023 is $15.18. |
| | | | | | 66 | | 53 | | |
20172023 Executive Compensation Tables
(6) Grant date fair value is determined by multiplying the target number of shares granted by the MV on the grant date. MV is determined by the closing price on the date of grant. The MV for the Restricted Share Units granted to all named officers on February 15, 2017 is $21.95. The target Performance Share awards that are based on financial measures are valued using the closing stock price on the date of grant, discounted because these shares are not eligible for dividends. The resulting value for the 2017 grant on February 12, 2017 is $21.07. The target Performance Share awards that are based on the Relative TSR measure are valued using a Monte Carlo valuation method, effective the date of grant. The value for the 2017 grant of Performance Shares based on the Relative TSR measure on February 15, 2017 is $20.16. The MV for the Restricted Share Units granted on May 10, 2017 to Messrs. Corona and Quigley, as well as Ms. Carroll, is $21.93. The MV for the Performance Shares granted on May 10, 2017 to Messrs. Corona and Quigley, as well as Ms. Carroll, is $21.05 for shares based on financial measures, and $20.14 for the shares based on the Relative TSR measure.
Outstanding Equity Awards at Fiscal Year End 20172023(1) | | | | | | | | | | | | | | | | Stock Awards | | Name | | Grant Year | | Number of
Shares or
Units of
Stock That
Have Not
Vested (2)(3)
(#) | | Market Value
of Shares or
Units of Stock
That Have Not
Vested (4) ($) | | Equity Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested (5) (#) | | Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares, Units
or Other Rights That
Have Not Vested (4) ($) | George S. Corona | | 2017 | | 20,191 | | 550,609 | | 116,485 | | 3,176,546 | | | | 2016 | | 11,157 | | 304,251 | | 61,360 | | 1,673,287 | | | | 2015 | | 84,055 | | 2,292,180 | | | | | | | | 2014 | | 12,500 | | 340,875 | | | | | | | | | | | | | | | | | Olivier G. Thirot | | 2017 | | 8,325 | | 227,023 | | 41,625 | | 1,135,114 | | | | 2016 | | 6,375 | | 173,846 | | 35,063 | | 956,168 | | | | 2015 | | 24,016 | | 654,916 | | | | | | | | 2014 | | 4,250 | | 115,898 | | | | | | | | | | | | | | | | | Teresa S. Carroll | | 2017 | | 9,316 | | 254,047 | | 46,583 | | 1,270,318 | | | | 2016 | | 6,375 | | 173,846 | | 35,063 | | 956,168 | | | | 2015 | | 48,032 | | 1,309,833 | | | | | | | | 2014 | | 3,750 | | 102,263 | | | | | | | | | | | | | | | | | Peter W. Quigley | | 2017 | | 9,316 | | 254,047 | | 46,583 | | 1,270,318 | | | | 2016 | | 6,375 | | 173,846 | | 35,063 | | 956,168 | | | | 2015 | | 48,032 | | 1,309,833 | | | | | | | | 2014 | | 3,750 | | 102,263 | | | | | | | | | | | | | | | | | Steven S. Armtrong | | 2017 | | 3,100 | | 84,537 | | 15,500 | | 422,685 | | | | 2016 | | 3,188 | | 86,937 | | 17,532 | | 478,098 | | | | 2015 | | 24,016 | | 654,916 | | | | | | | | 2014 | | 3,000 | | 81,810 | | | | | | | | | | | | | | | | | Carl T . Camden | | 2017 | | - | | - | | 17,255 | | 470,544 | | | | 2016 | | - | | - | | 66,226 | | 1,805,983 | | | | 2015 | | 138,657 | | 3,781,176 | | | | | | | | 2014 | | - | | - | | | | | | | | | | | | | | | | |
(1) The Company did not grant stock options during the 2017 fiscal year. All previously outstanding granted stock options for the Named Executive Officers expired during the 2014 fiscal year. As a result, there are no outstanding options to report and, accordingly, these columns have been eliminated from the table.
(2) All outstanding restricted stock awards/unit grants vest ratably over 4 years. The number of outstanding shares has been determined as of December 31, 2017.
| | | | | | | | | | | Name | | Grant Year | | Stock Awards | | | Number of
Shares or Units
of Stock That
Have Not
Vested(2)(3) (#) | | Market Value of
Shares or Units
of Stock That
Have Not
Vested(4) ($) | | Equity Incentive Plan
Awards: Number of
Unearned Shares, Units or
Other Rights That Have
Not Vested(5) (#) | | Equity Incentive Plan
Awards: Market or Payout
Value of Unearned Shares,
Units or Other Rights That
Have Not Vested(4) ($) | | | | | | | Peter W. Quigley | | 2023 | | 52,635 | | 1,137,969 | | 70,182 | | 1,517,335 | | | 2022 | | 41,776 | | 903,197 | | 21,222 | | 458,820 | | | 2021 | | 41,054 | | 887,587 | | 21,857 | | 472,548 | | | 2020 | | 18,592 | | 401,959 | | — | | — | | | | | | | Olivier G. Thirot | | 2023 | | 28,922 | | 625,294 | | 23,140 | | 500,287 | | | 2022 | | 19,938 | | 431,060 | | 10,130 | | 219,011 | | | 2021 | | 24,229 | | 523,831 | | 17,971 | | 388,533 | | | 2020 | | 9,406 | | 203,358 | | — | | — | | | | | | | Daniel H. Malan | | 2023 | | 24,306 | | 525,496 | | 8,292 | | 179,273 | | | 2022 | | 6,804 | | 147,102 | | 3,458 | | 74,762 | | | 2021 | | 8,654 | | 187,099 | | 7,286 | | 157,523 | | | 2020 | | 13,907 | | 300,669 | | — | | — | | | | | | | Vanessa P. Williams | | 2023 | | 12,913 | | 279,179 | | 10,332 | | 223,378 | | | 2022 | | 9,359 | | 202,342 | | 4,754 | | 102,781 | | | 2021 | | 8,948 | | 193,456 | | 5,343 | | 115,516 | | | 2020 | | 5,042 | | 109,008 | | — | | — | | | | | | | Dinette Koolhaas | | 2023 | | 11,281 | | 243,895 | | 9,026 | | 195,142 | | | 2022 | | 8,500 | | 183,770 | | 4,318 | | 93,355 | | | 2021 | | 7,243 | | 156,594 | | 4,856 | | 104,987 | | | 2020 | | 2,972 | | 64,255 | | — | | — |
| (1) | The Company did not grant stock options during the 2023 fiscal year. All previously outstanding granted stock options for the named executive officers expired during the 2014 fiscal year. As a result, there are no outstanding options to report and, accordingly, these columns have been eliminated from the table. |
| (2) | All outstanding Restricted Stock Awards/Units granted before 2023 vest ratably over four years. Restricted Stock Awards/Units granted in 2023 and after vest ratably over three years, with the exception of Mr. Malan’s February 14, 2023 award which has a two-year cliff vest. 2021 total includes 50% of the Specialty GP mix portion of the KEEP award. The number of outstanding shares has been determined as of December 31, 2023, the last day of the Company’s fiscal year 2023. |
| (3) | Performance results for the first, second and third year of the 2021-2023 LTI are reflected in these totals, which is detailed above in the “2021-2023 Long-Term Incentive Performance Results” section. Performance results for the first and second year of the 2022-2024 LTI are reflected in these totals, which is detailed above in the “2022-2024 Long-Term Incentive Performance Results” section. Performance results for the first year of the 2023-2025 LTI are reflected in these totals, which is detailed above in the “2023-2025 Long-Term Incentive Performance Results” section. |
| (4) | The market value is determined based on the closing market price of our common shares on the last trading day of the 2023 fiscal year, December 29, 2023 ($21.62). |
| (5) | Performance Shares granted in 2021, 2022 and 2023 are earned based upon achievement of selected financial measures over three one-year periods. If the minimum or threshold performance is not attained, the performance shares will be forfeited. The table includes the 2022 Performance Shares year three and the 2023 Performance Shares years two and three, at target. |
| | | | | | | 54 | 67 | | |
20172023 Executive Compensation Tables
(3) 2015 total includes performance shares earned based upon the 2015 level of achievement for both financial measures, and performance shares earned based upon the 2015-2017 level of achievement for the Relative TSR measure. 2017 total includes restricted stock units granted with a performance hurdle for 2017 that was achieved.
(4) The market value is determined based on the closing market price of our common shares on the last trading day of the 2017 fiscal year, December 29, 2017 ($27.27).
(5) Performance shares granted in 2016 and 2017 are earned based upon achievement of selected financial measures and a Relative TSR measure over a three-year period. If the minimum or threshold performance is not attained, the performance shares will be forfeited. In accordance with SEC reporting requirements, the total shares shown in this table for the 2016 grant reflect threshold performance for one of the four measures that were selected for that grant, target performance for one of the four measures and maximum performance for two of the four measures. The total shares shown for the 2017 grant reflect target performance for one measure and maximum performance for two measures. Performance will not be known until early 2019 for the 2016 grant, and early 2020 for the 2017 grant. If the Company does not attain the cumulative results assumed for this disclosure over the three-year period, the number of shares received by the Named Executive Officers upon settlement will be reduced.
Option Exercises and Stock Vested 20172023 | | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Number of
Shares Acquired
on Exercise (#) | | Value Realized
on Exercise
($) | | Number of
Shares
Acquired
on Vesting
(#) | | Value
Realized
on
Vesting (1)
($) | George S. Corona | | - | | - | | 33,093 | | 804,034 | Olivier G. Thirot | | - | | - | | 7,950 | | 185,166 | Teresa S. Carroll | | - | | - | | 12,125 | | 289,204 | Peter W. Quigley | | - | | - | | 13,375 | | 318,454 | Steven S. Armstrong | | - | | - | | 8,312 | | 201,043 | Carl T . Camden | | - | | - | | 18,500 | | 404,115 |
| | | | | | | | | | | | Option Awards | | Stock Awards | | Name | | Number of
Shares
Acquired on
Exercise
(#) | | Value
Realized on
Exercise
($) | | Number of
Shares
Acquired on
Vesting
(#) | | Value
Realized on
Vesting(1)
($) | | | | | | Peter W. Quigley | | — | | — | | 62,249 | | 1,110,746 | | | | | | Olivier G. Thirot | | — | | — | | 42,447 | | 757,156 | | | | | | Daniel H. Malan | | — | | — | | 26,199 | | 444,538 | | | | | | Vanessa P. Williams | | — | | — | | 14,860 | | 268,693 | | | | | | Dinette Koolhaas | | — | | — | | 12,572 | | 224,469 |
(1) Value Realized on Vesting is calculated by multiplying the shares vested times the stock closing price on the day of vesting.
| (1) | Value Realized on Vesting is calculated by multiplying the shares vested times the stock closing price on the day of vesting. |
Nonqualified Deferred Compensation 20172023 | | | | | | | | | | | | Name | | Executive
Contributions in
Last Fiscal
Year (1) ($) | | Registrant
Contributions in
Last Fiscal
Year (2) ($) | | Aggregate
Earnings in Last
Fiscal Year (3) ($) | | Aggregate
Withdrawals/
Distributions (4)
($) | | Aggregate
Balance at
Last Fiscal
Year End (5)
($) | George S. Corona | | 70,068 | | 35,034 | | 31,266 | | - | | 1,910,972 | Olivier G. Thirot | | 53,350 | | 26,675 | | 5,124 | | - | | 85,089 | Teresa S. Carroll | | 65,213 | | 32,607 | | 225,678 | | (20,673) | | 1,685,411 | Peter W. Quigley | | 54,801 | | 27,401 | | 167,487 | | - | | 1,288,107 | Steven S. Armstrong | | 36,520 | | 16,600 | | 367,349 | | - | | 2,306,242 | Carl T . Camden | | 39,825 | | 19,913 | | 387,233 | | (5,158,289) | | - |
(1) Executives may defer a percentage of their base salary (up to 25%) and annual incentive earnings (up to 50%) for retirement. These amounts, as applicable, are reported as a part of the salary or incentive earnings found in the Summary Compensation Table.
(2) Registrant Contributions in Last Fiscal Year above represent Company matching contributions (50% of the first 10% of salary and annual incentive deferrals), and they are also reported as All Other Compensation in the Summary Compensation Table. All Named Executive Officers have met the three-year vesting requirement for the Company match.
(3) Represents actual earnings from the investment of the prior year aggregate balance plus the earnings on current year executive and Company contributions. The aggregate earnings are based on investment options that are also offered to employees who
| | | | | | | | | | | | Name | | Executive
Contributions in
Last Fiscal
Year(1)
($) | | Registrant
Contributions in
Last Fiscal
Year(2)
($) | | Aggregate
Earnings in Last
Fiscal Year(3)
($) | | Aggregate
Withdrawals/
Distributions(4)
($) | | Aggregate
Balance at
Last Fiscal
Year End(5)
($) | | | | | | | Peter W. Quigley | | 167,799 | | 83,899 | | 546,287 | | (164,178) | | 3,133,956 | | | | | | | Olivier G. Thirot | | — | | — | | 25,464 | | — | | 1,020,411 | | | | | | | Daniel H. Malan | | — | | — | | — | | — | | — | | | | | | | Vanessa P. Williams | | 47,383 | | 23,691 | | 43,460 | | — | | 231,791 |
| (1) | | | | | | | 55 | | Executives may defer a percentage of their base salary (up to 25%) and incentive earnings (up to 50%) for retirement. These amounts, as applicable, are reported as a part of the salary or incentive earnings found in the Summary Compensation Table. |
2017 Executive Compensation Tables
| (2) | Registrant Contributions in Last Fiscal Year above represent Company matching contributions (50% of the first 10% of salary and annual incentive deferrals), and they are also reported as All Other Compensation in the Summary Compensation Table. |
| (3) | Represents actual earnings (or loss) from the investment of the prior year aggregate balance plus the earnings on current year executive and Company contributions. The aggregate earnings are based on investment options that are also offered to employees who participate in the Company’s tax-qualified 401(k) plan. As these earnings are not “above market” interest payments or preferential earnings, they are not included in the Summary Compensation Table. |
participate in the Company’stax-qualified 401(k) plan. As these earnings are not “above market” interest payments or preferential earnings, they are not included in the Summary Compensation Table.
| (4) | Participants may elect to receive distributions after separation from service, the later of a specified age and separation of service or a scheduled in-service distribution. Amounts may be paid as a lump sum, monthly installments for up to 20 years, or a combination of the two as elected by the participant. |
(4) Participants may elect to receive distributions after separation from service, the later of a specified age and separation of service or a scheduledin-service distribution. Amounts may be paid as a lump sum, monthly installments for up to 20 years, or a combination of the two as elected by the participant. Ms. Carroll received a scheduledin-service distribution from her account in 2017. Mr. Camden received a lump sum distribution of his account balance following his separation from employment.
| (5) | Amounts reported in this column include the following amounts that have been reported in the Summary Compensation Table for fiscal years 2013-2023: Peter W. Quigley ($1,085,878); Named in the proxies for fiscal years 2015-2023: Olivier G. Thirot ($791,800); Named in the proxies for fiscal years 2022-2023: Vanessa P. Williams ($44,347). |
(5) Amounts reported in this column include the following amounts that have been reported in the Summary Compensation Table for fiscal years 2006-2017: George S. Corona ($1,196,939); Named in the proxies for fiscal years 2013-2017: Peter W. Quigley ($514,419); Named in the proxies for fiscal years 2015-2017: Olivier G. Thirot ($80,025) and Teresa S. Carroll ($470,531); Named in the proxy for fiscal year 2017: Steven S. Armstrong ($53,120).
Potential Payments Upon Termination 2017or Change in Control 2023 Summary of Potential Payments This section describes the potential additional payments and benefits under our compensation and benefit plans and arrangements to which the Named Executive Officersnamed executive officers would be entitled upon termination of employment under certain circumstances. Named Executive Officersexecutive officers would also be entitled to vested benefits and generally available benefits under our various plans and arrangements, as discussed after the Potential Payments Upon Termination or Change in Control table. The Company does not maintain employment agreements with our Named Executive Officers.named executive officers, other than where it is customary outside of the U.S., as in the case of Mr. Thirot and Ms. Koolhaas. The table following the narrative discussion summarizes the amounts payable upon termination under certain circumstances to our Named Executive Officers,named executive officers, assuming that the executive’s employment terminated on December 31, 2017,2023, the last day of our fiscal year. Senior Executive Severance Plan The Company implemented the Senior Executive Severance Plan (“Severance Plan”) for a limited number of Executive Officersexecutive officers in March 2017. Messrs. Corona, Thirot and Quigley, and Ms. Carroll areDuring its March 23, 2021 meeting, the only participants inCommittee approved expanding the plan.Severance Plan to include | | | | | | 68 | | | |
2023 Executive Compensation Tables other senior officers. Described below and illustrated in the table, Potential PayoutsPayments Upon Termination or Change in Control, are the different elements payable under the Severance Plan if a Named Executive Officernamed executive officer who iswas a party to the Severance Plan would experience a qualifying termination. All continuation amounts would be paid over the salary continuation period in compliance with Section 409A of the Code. Mr. Armstrong participatesMessrs. Quigley and Malan and Ms. Williams were covered in the General Severance Plan for 2023. Mr. Thirot and Ms. Koolhaas are covered by the terms of their employment agreements as outlined in the next section.summarized below. If one of the eligible Named Executive Officersnamed executive officers were to have experienced a qualifying termination under the Severance Plan in 2017,2023, the Named Executive Officernamed executive officer would have been entitled to severance benefits based on the type of qualified termination and whether they were a Tier 1, or a Tier 2, or Tier 3 participant. Mr. Corona isQuigley was the only Tier 1 participant in the Severance Plan. Messrs. Thirot and Quigley, and Ms. Carroll areWilliams was the only Tier 2 participantsparticipant in the Severance Plan. Mr. Thirot’s employment agreement provides him with similar Tier 2 severance benefits. Mr. Malan was a Tier 3 participant in the Severance Plan. Ms. Koolhaas’ employment agreement provides her with similar Tier 3 severance benefits. A “qualified termination” is any termination of a participant’s employment: by the Company other than for cause, disability, or death; or for “good reason” by a participant in connection with a change in control. For a qualified termination that occurs not in connection with a change in control, a Tier 1 participant would receive severance payments in the form of base salary continuation for a period of twenty-four24 months, and a Tier 2 participant would receive severance payments in the form of base salary continuation for a period of eighteen18 months, and a Tier 3 participant would receive severance payments in the form of base salary continuation for a period of 12 months. In addition, Tier 1, Tier 2, and Tier 23 participants would receive a prorated portion of their annual incentive compensation for the fiscal year in which the termination occurred, based on the actual performance results for the year. The pro rata annual incentive payout will be determined based on the number of calendar days in the fiscal year the eligible Named Executive Officernamed executive officer was actually employed during such plan year.year divided by 365. Prorated annual incentive awards are paid at the same time that incentive compensation for the same year areis paid to the other Senior Officerssenior officers of the Company, following certification by the Committee that applicable performance goals have been attained. Salary continuation amounts would be paid by the Company in installments over the severance period and in accordance with the Company’s standard payroll practice, subject to the requirements of Section 409A. For a qualified termination that occurs in connection with a change in control, a Tier 1 participant would receive a single lump sum severance payment equal to two (2) times the sum of the participant’s annual base salary and target annual incentive compensation. A Tier 2 participant would receive a single lump sum severance payment equal to one andone-half (1.5) times the sum of the participant’s annual base salary and target annual incentive compensation. A Tier 3 participant would receive a single lump sum severance payment equal to one time the sum of the participant’s annual base salary and target annual incentive compensation. In addition, Tier 1, Tier 2, and Tier 23 participants would receive a prorated portion of their annual incentive compensation. If the qualifying termination occurred in the same year as the change in control, a prorated portion of the participant’s annual incentive compensation is paid based on achievement of a target level of performance. If the qualifying termination occurred in the two years following a change in control, a prorated portion of the participant’s annual incentive compensation is paid based on the actual performance results achieved for the year. Any pro rata annual incentive payout will be determined based on the number of calendar days in the fiscal year the eligible Named Executive Officernamed executive officer was actually employed during such plan year.year divided by 365. Prorated annual incentive awards are paid in a lump sum at the same time that incentive compensation for the same year areis paid to the other Senior Officerssenior officers of the Company, following certification by the Committee that applicable performance goals have been attained. | | | | | | | 56 | | |
2017 Executive Compensation Tables
Participants are subject to a best-net cutback for 280G excise tax calculations with no excise tax gross-ups provided under the Severance Plan. Subject to the participant’s timely election of continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company would provide comparable medical (including prescription drug), dental, vision, and hospitalization benefits to the eligible Named Executive Officernamed executive officer and his or her eligible dependents for the severance period, provided the Named Executive Officernamed executive officer continues to pay the applicable employee rate for such coverage and the Named Executive Officernamed executive officer remains eligible for COBRA coverage. The severance period for a Tier 1 participant is 24 months, and for a Tier 2 participant is 18 months, and for Tier 3 participant is 12 months. The eligible Named Executive Officernamed executive officer will be entitled to receive reimbursement for professional outplacement services actually incurred during the initial12-month period following termination, not to exceed $10,000. The eligible Named Executive Officers,named executive officers, as a condition to receiving payments under the Severance Plan, are required to sign a general release of claims relating to their employment. In addition, they are required to agree not to directly or indirectly, individually or in any capacity or relationship, engage in any business or employment, or aid or endeavor to assist any business or legal entity, that is in direct competition with the business of the Company for the 12 months following termination. | | | | | | | | | 69 | |
2023 Executive Compensation Tables During the 12 months following termination, the eligible Named Executive Officersnamed executive officers must also agree to not induce any employee of the Company to terminate employment with the Company, nor knowingly offer employment to any person who is or who was employed by the Company unless such person has ceased to be employed by the Company for a period of at least six months. Named Executive Officersexecutive officers covered under the Severance Plan may not disparage, slander, or injure the business reputation or goodwill of the Company. Named Executive Officersexecutive officers must maintain as secret and confidential all protected information such as trade secrets, confidential and proprietary business information of the Company, and any other information of the Company, including but not limited to customer lists, sources of supply, processes, plans, materials, pricing information, internal memoranda, marketing plans, internal policies, and products and services which may be developed from time to time by the Company and its agents or employees, including the Named Executive Officer.named executive officer. Noncompliance with any of the above may result in the loss of severance benefits. General Severance Plan
The General Severance Plan was amended and restated effective March 27, 2017 to include the Senior Officers who are not covered by the Senior Executive Severance Plan. Mr. Armstrong is the only Named Executive Officer in 2017 who participates in this plan. Described below and illustrated in the table, Potential Payouts Upon Termination, are the different elements payable under the General Severance Plan if Mr. Armstrong would experience an involuntary termination of employment. All continuation amounts would be paid over the salary continuation period in compliance with Section 409A.
If Mr. Armstrong were to have experienced an “involuntary termination of employment” under the General Severance Plan in 2017, he would have been entitled to severance benefits. “Involuntary termination of employment” is defined in the General Severance Plan as the termination of employment of an eligible employee by the employer, other than: for cause; as a result of his or her failure to accept such additional or revised responsibilities as communicated by the employer; by reason of the sale of his employer or any portion of the employer’s assets (whether by asset or stock sale), provided he or she continues employment with the purchaser thereof; or a voluntary termination of employment of any kind.
For an involuntary termination, an eligible employee would receive severance payments in the form of base salary continuation for a period of weeks that is determined based on his or her job title/level and years of service. Mr. Armstrong would have been eligible for 48 weeks of severance as of December 31, 2017. Salary continuation amounts would be paid by the Company in installments and in accordance with the Company’s standard payroll practice, subject to the requirements of Section 409A.
Subject to the eligible employee’s timely election of continued coverage under COBRA and the Company’s receipt of the signed severance agreement, the Company would provide comparable medical (including prescription drug), dental, vision, and hospitalization benefits to the eligible Named Executive Officer and his or her eligible dependents for a period of time that is determined based on the number of weeks of severance that the employee is eligible for. The Company pays the full cost of COBRA during the severance period. Following completion of the severance period, the employee is responsible for the full cost of maintaining COBRA benefits. Based on the number of weeks of severance that Mr. Armstrong would have been eligible for, he would have received 12 months of company-paid COBRA premiums.
The eligible Named Executive Officer will be entitled to receive reimbursement for professional outplacement services actually incurred during the initial6-month period following termination, not to exceed $7,500.
| | | | | | | 57 | | |
2017 Executive Compensation Tables
Severance benefits under the General Severance Plan are conditioned upon the terms of the severance agreement that include:non-competition;non-solicitation of employees or customers; maintaining confidentiality of information and trade secrets of the Company and all affiliates; andnon-disparagement of the Company and all officers and employees.
Treatment of Long-Term Incentive Awards Each equity-based award is conditioned upon the grantee’s acceptance of the terms of the EIP and the grant agreement, which includes restrictive covenants such as post-employment conditions not to solicit the Company’s employees or customers and not to compete against the Company for twelve months following any termination of employment, and indefinite covenants coveringnon-disparagement and confidentiality terms. Each of our Named Executive Officer’snamed executive officer’s performance-based equity awards is subject to the Company’s Clawback Policy, which was described earlier in this document.Policy. Provisions for the treatment of long-term incentive awards upon various termination scenarios are outlined in the table below. | | | | | | Termination | | Restricted Stock/
Units (Time
(Time Vesting) | | Performance Shares
(Performance and Time Vesting) | | | | Termination not for Cause in connection with aChange-in-Control Change In Control | | Immediate Vesting | | Immediate Vesting at Target | | | | Other Termination not for Cause | | Forfeit | | Prorated based on actual results (as determined at the end of the cycle), subject to employment for at least one year after the date grant was approved | | | | Termination for Good Reason in connection with aChange-in-Control Change in Control | | Immediate Vesting | | Immediate Vesting at Target | | | | Termination for Cause | | Forfeit | | Forfeit | | | | Termination for CauseVoluntarily Quit
| | Forfeit | | Forfeit | | | | Voluntarily QuitRetirement
| | Forfeit | | Forfeit | Retirement
| | Forfeit | | Prorated based on actual results (as determined at the end of the cycle) for “Normal Retirement” defined as age 62 with 5 years of service or as a combination of age plus years of service equal to 70, with a minimum age of 60 | | | | Death or Disability | | Prorated | | Prorated based on actual results |
| | | | | | 70 | | | |
2023 Executive Compensation Tables Based on the terms of the severance plans and treatment of LTI awards for each upon termination of employment as outlined above, the table below illustrates the amounts that each Named Executive Officernamed executive officer would receive in each of the potential termination scenarios. | | | | | | | | | | | | | | | | | Event and Amounts | | Peter W.
Quigley
($) | | | Olivier G.
Thirot
($) | | | Daniel H.
Malan
($) | | | Vanessa P.
Williams
($) | | | | | | | Involuntary Termination (For Cause) | | | | | | | | | | | | | | | | | | | | | | No other payments due | | | | | | | | | | | | | | | | | | | | | | Voluntary Termination | | | | | | | | | | | | | | | | | | | | | | No other payments due | | | | | | | | | | | | | | | | | | | | | | Death or Disability | | | | | | | | | | | | | | | | | | | | | | Performance Shares (Equity-Based)(1) | | | 1,373,713 | | | | 612,149 | | | | 208,244 | | | | 271,742 | | | | | | | Restricted Shares(2) | | | 763,856 | | | | 473,932 | | | | 487,357 | | | | 185,369 | | | | | | | Total | | | 2,137,569 | | | | 1,086,081 | | | | 695,601 | | | | 457,111 | | | | | | | Normal Retirement
(Age 62 and 5 Years of Service or any Combination of Age + Service > 70 with Minimum Age of 60) | | | | | | | | | | | | | | | | | | | | | | Performance Shares (Equity-Based)(1) | | | 1,373,713 | | | | 612,149 | | | | — | | | | — | | | | | | | Involuntary Termination (Not For Cause) | | | | | | | | | | | | | | | | | | | | | | Cash Severance(3) | | | 1,800,000 | | | | 1,000,800 | | | | 557,668 | | | | 712,500 | | | | | | | Pro-Rated Annual Incentive(4) | | | 1,015,200 | | | | 533,093 | | | | 244,000 | | | | 325,000 | | | | | | | Performance Shares (Equity-Based)(1) | | | 994,390 | | | | 487,099 | | | | 163,447 | | | | 215,919 | | | | | | | Restricted Shares(2) | | | — | | | | — | | | | — | | | | — | | | | | | | Benefits Continuation(5) | | | 20,497 | | | | 56,681 | | | | 6,666 | | | | 20,659 | | | | | | | Outplacement Services(6) | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | | | | Total | | | 3,840,088 | | | | 2,087,672 | | | | 981,781 | | | | 1,284,078 | | | | | | | Termination in Connection with a Change In Control
(For Good Reason or Not For Cause) | | | | | | | | | | | | | | | | | | | | | | Cash Severance(3) | | | 3,960,000 | | | | 1,851,480 | | | | 686,650 | | | | 1,175,625 | | | | | | | Pro-Rated Annual Incentive(4) | | | 1,080,000 | | | | 567,120 | | | | 243,650 | | | | 308,750 | | | | | | | Performance Shares (Equity-Based)(1) | | | 3,349,868 | | | | 1,331,446 | | | | 462,279 | | | | 597,901 | | | | | | | Restricted Shares(2) | | | 2,429,548 | | | | 1,559,926 | | | | 1,109,646 | | | | 627,759 | | | | | | | Benefits Continuation(5) | | | 20,497 | | | | 56,681 | | | | 6,666 | | | | 20,659 | | | | | | | Outplacement Services(6) | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | | | | Total | | | 10,849,913 | | | | 5,376,653 | | | | 2,518,891 | | | | 2,740,694 | |
| (1) | In the event of a named executive officer’s termination of employment due to disability, death, normal retirement (defined as age 62 with five years of service or any combination of age + service = 70 with a minimum age of 60), or termination by the Company without Cause, at the end of the performance period and following approval by the Compensation and Talent Management Committee, the named executive officer (or the named executive officer’s beneficiary) would receive a pro rata portion of the equity-based Performance Award that would have otherwise vested if employment had continued until the end of the performance period, based on the portion of the performance period that the officer was employed and based on the performance level achieved. Amounts shown for termination due to death or disability, reflect actual shares earned for the 2021 Year 1, Year 2 and Year 3, 2022 Year 1 and Year 2, and 2023 Year 1 PSU grants. For termination by the Company without Cause, the named executive officer must have been employed for at least one year following the date of each grant in order to be eligible to receive prorated performance shares. Upon a Change in Control, if awards are not assumed, converted, or replaced by the resulting entity, all vesting restrictions on outstanding Performance Awards shall lapse, with any applicable performance goals deemed to be satisfied as if “target” performance had been achieved and all such Awards become fully vested and exercisable, effective as of the date of such Change in Control. The value under the pro rata settlement or Change in Control settlement (assuming the December 29, 2023 stock value of $21.62) is shown in the table. |
| | | | | | | | 58 | 71 | | |
20172023 Executive Compensation Tables
| | | | | | | | | | | | | | | | | | | | | | Event and Amounts | | George S.
Corona ($) | | | Olivier G.
Thirot ($) | | | Teresa S.
Carroll
($) | | | Peter W.
Quigley
($) | | | Steven S.
Armstrong
($) | | Involuntary Termination (For Cause ) | | | | | | | | | | | | | | | | | | | | | No other payments due | | | | | | | | | | | | | | | | | | | | | Voluntary Termination | | | | | | | | | | | | | | | | | | | | | No other payments due | | | | | | | | | | | | | | | | | | | | | Death or Disability | | | | | | | | | | | | | | | | | | | | | Performance Shares (Equity-Based) (1) | | | 3,500,171 | | | | 1,277,350 | | | | 1,891,129 | | | | 1,891,129 | | | | 903,069 | | Restricted Shares(2) | | | 380,880 | | | | 159,148 | | | | 185,326 | | | | 185,326 | | | | 93,400 | | Total | | | 3,881,051 | | | | 1,436,498 | | | | 2,076,455 | | | | 2,076,455 | | | | 996,469 | | Normal Retirement (Age 62 and 5 Years of Service)(3) | | | | | | | | | | | | | | | | | | | | | No other payments due | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | Involuntary Termination (Not For Cause) | | | | | | | | | | | | | | | | | | | | | Cash Severance(4) | | | 2,000,000 | | | | 800,250 | | | | 862,500 | | | | 862,500 | | | | 306,462 | | Pro-Rated Annual Incentive(5) | | | 1,051,064 | | | | 400,045 | | | | 437,723 | | | | 416,443 | | | | - | | Performance Shares (Equity-Based) (1) | | | 2,864,862 | | | | 1,050,327 | | | | 1,637,064 | | | | 1,637,064 | | | | 818,532 | | Restricted Shares(2) | | | - | | | | - | | | | - | | | | - | | | | - | | Benefits Continuation(6) | | | 24,772 | | | | 21,743 | | | | 21,539 | | | | 18,284 | | | | 23,244 | | Outplacement Services(7) | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 7,500 | | Total | | | 5,950,698 | | | | 2,282,365 | | | | 2,968,826 | | | | 2,944,291 | | | | 1,155,737 | | Termination in Connection with aChange-in-Control - For Good Reason | | | | | | | | | | | | | | | | | | | | | Cash Severance(4) | | | 4,600,000 | | | | 1,400,438 | | | | 1,595,625 | | | | 1,595,625 | | | | - | | Pro-Rated Annual Incentive(5) | | | 1,300,000 | | | | 400,125 | | | | 488,750 | | | | 488,750 | | | | - | | Performance Shares (Equity-Based) (1) | | | - | | | | - | | | | - | | | | - | | | | - | | Restricted Shares(2) | | | - | | | | - | | | | - | | | | - | | | | - | | Benefits Continuation(6) | | | 24,772 | | | | 21,743 | | | | 21,539 | | | | 18,284 | | | | - | | Outplacement Services(7) | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | - | | Total | | | 5,934,772 | | | | 1,832,306 | | | | 2,115,914 | | | | 2,112,659 | | | | - | | Termination in Connection with aChange-in-Control - Not For Cause | | | | | | | | | | | | | | | | | | | | | Cash Severance(4) | | | 4,600,000 | | | | 1,400,438 | | | | 1,595,625 | | | | 1,595,625 | | | | 306,462 | | Pro-Rated Annual Incentive(5) | | | 1,300,000 | | | | 400,125 | | | | 488,750 | | | | 488,750 | | | | - | | Performance Shares (Equity-Based)(1) | | | 5,176,430 | | | | 1,963,190 | | | | 2,631,055 | | | | 2,631,055 | | | | 1,188,040 | | Restricted Shares(2) | | | 1,434,347 | | | | 584,942 | | | | 666,506 | | | | 666,506 | | | | 321,459 | | Benefits Continuation(6) | | | 24,772 | | | | 21,743 | | | | 21,539 | | | | 18,284 | | | | 23,244 | | Outplacement Services(7) | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 10,000 | | | | 7,500 | | Total | | | 12,545,549 | | | | 4,380,438 | | | | 5,413,475 | | | | 5,410,220 | | | | 1,846,705 | |
(1) In the event of a Named Executive Officer’s termination of employment due to disability, death, normal retirement (defined as age 62 with five years of service), or termination by the Company without Cause, at the end of the performance period and following approval by the Compensation Committee, the Named Executive Officer (or the Named Executive Officer’s beneficiary) would receive a pro rata portion of the equity-based Performance Award that would have otherwise vested if employment had continued until the end of the performance period, based on the portion of the performance period that the officer was employed and based on the performance level achieved. For termination by the Company without Cause, the Named Executive Officer must have been employed for at least one year following the date of each grant in order to be eligible to receive prorated
| (2) | | | | | | | 59 | | In the event of a named executive officer’s termination of employment due to disability or death, the named executive officer (or the named executive officer’s beneficiary) would receive a pro rata settlement of unvested restricted shares outstanding at the time of termination. For each grant of restricted stock awards/units, the number of shares settled would equal the total number of restricted shares originally granted times the ratio of days employed since the grant date divided by total number of days in the vesting period less the number of restricted shares already settled on the anniversary dates of the grant. Upon a Change in Control, if awards are not assumed, converted, or replaced by the resulting entity, all vesting restrictions on outstanding Restricted Share awards/units shall lapse, and all such Awards become fully vested and exercisable, effective as of the date of such Change in Control. The value under the prorated settlement or Change in Control settlement (assuming the December 29, 2023 stock value of $21.62) is shown in the table. |
2017 Executive Compensation Tables
| (3) | Per the Severance Plan, for involuntary termination by the Company without cause, the value of cash severance includes base salary continuation for Mr. Quigley for 24 months, Ms. Williams for 18 months, and Mr. Malan for 12 months. For payments under Change in Control, with qualifying termination, Mr. Quigley would receive a lump sum payment equal to 2 times the sum of his annual base salary and target annual incentive; Ms. Williams would receive a lump sum payment equal to 1.5 times the sum of base salary and target annual incentive; and Mr. Malan would receive a lumpsum payment equal to one time the sum of base salary and target annual incentive. Per Mr. Thirot’s Swiss employment agreement, for involuntary termination by the Company without cause, the value of cash severance includes base salary continuation for Mr. Thirot for 18 months. For payments under Change in Control, with qualifying termination, Mr. Thirot would receive a lump sum payment equal to 1.5 times the sum of base salary and target annual incentive |
| (4) | In the event of an involuntary termination by the Company without cause and not in connection with a change in control, Messrs. Quigley and Malan, and Ms. Williams were eligible to receive a pro rata portion of their annual Incentive Compensation for such fiscal year, based on the actual performance results for such year. In the event of an involuntary termination by the Company without cause or termination by the named executive officer for good reason, either occurring in connection with a change in control, Messrs. Quigley, Thirot, and Malan and Ms. Williams were eligible to receive a pro rata portion of their annual Incentive Compensation for such fiscal year, paid at the target level. The value of pro rata target incentive with respect to year of termination represents the calculated target incentive for the named executive officers if they had terminated on December 31, 2024. |
performance shares. As such, the values of the 2017 performance shares are not included in the totals for this termination event. Amounts shown in the table above include 2015 performance shares based on financial measures and the Relative TSR measure that were earned but not yet vested with certification by the Committee to occur in early 2018, and for the 2016 and 2017 performance shares a prorated target level of performance for all measures as performance is not yet known and will be determined at the end of the performance period in early 2019 and early 2020 respectively. Upon the event of a Change in Control, if awards are not assumed, converted, or replaced by the resulting entity, all vesting restrictions on outstanding Performance Awards shall lapse, with any applicable performance goals deemed to be satisfied as if “target” performance had been achieved and all such Awards become fully vested and exercisable, effective as of the date of such Change in Control.
| (5) | The value of the health care benefit provided is calculated as the Company-paid portion of the medical plan cost, times the number of months eligible according to the applicable severance plan. Coverage can include medical, dental, and vision (assumes no change in Health Plan or coverage type) and assumes a 10% health care coverage cost increase in second year (as applicable). Named executive officers participating in the Senior Executive Severance Plan continue to pay the employee rate for COBRA coverage during the severance period. For Mr. Thirot, amounts in this column include continuation of pension contributions. |
| (6) | Represents the maximum allowed benefit for reimbursement of outplacement services for participants in the applicable Severance Plan. Mr. Thirot are eligible for outplacement services under the terms of their employment agreements and the amount shown represents the maximum allowed benefit. |
The value under the pro rata settlement, or Change in Control settlement (assuming the December 29, 2017 stock value of $27.27) is shown in the table.
(2) In the event of a Named Executive Officer’s termination of employment due to disability or death, the Named Executive Officer (or the Named Executive Officer’s beneficiary) would receive a pro rata settlement of unvested restricted shares outstanding at the time of termination. For each grant of restricted stock awards/units, the number of shares settled would equal the total number of restricted shares originally granted times the ratio of days employed since the grant date divided by total number of days in the vesting period less the number of restricted shares already settled on the anniversary dates of the grant. Upon the event of a Change in Control, if awards are not assumed, converted, or replaced by the resulting entity, all vesting restrictions on outstanding Restricted Share awards/units shall lapse, and all such Awards become fully vested and exercisable, effective as of the date of such Change in Control. The value under the prorated settlement, or Change in Control settlement (assuming the December 29, 2017 stock value of $27.27) is shown in the table.
(3) Mr. Camden retired from the Company in May 2017. Compensation received by Mr. Camden included amounts in the “Salary” and “All Other Compensation” columns of the Summary Compensation Table. He is also eligible for prorated performance shares as shown in the Outstanding Equity Awards at Fiscal Year End Table because he was Normal Retirement eligible under the terms of the EIP. Mr. Camden forfeited all unvested restricted stock at the time of his termination. Company-provided medical and dental benefits for Mr. Camden terminated at the end of the month in which he retired pursuant to the terms of the Summary Plan Description as applied to all employees.
(4) Per the Kelly Services Inc. Senior Executive Severance Plan, for involuntary termination without cause and for termination for good reason, the value of cash severance includes base salary continuation for Mr. Corona for 24 months, and Messrs. Quigley, Thirot and Ms. Carroll for 18 months. For payments under Change in Control, with qualifying termination, Mr. Corona would receive a lump sum payment equal to 2 times the sum of his annual base salary and target annual incentive; and Messrs. Quigley, Thirot and Ms. Carroll would receive a lump sum payment equal to 1.5 times the sum of base salary and target annual incentive. Mr. Armstrong is covered under the Kelly Services Inc. General Severance plan and is eligible to receive base salary continuation for 48 weeks, only for involuntary termination by the company without cause, with or without a change in control.
(5) In the event of an involuntary termination by the Company without cause, or termination by the Named Executive Officer for good reason in connection with a change in control, Messrs. Corona, Quigley, Thirot and Ms. Carroll are eligible to receive a pro rata portion of their annual Incentive Compensation for such fiscal year that would otherwise be paid if his or her employment or service had continued until the end of such performance period based on the actual results for such year. The value of pro rata target incentive with respect to year of termination represents the calculated target incentive for the Named Executive Officers if they had terminated on December 31, 2017. The severance plan covering Mr. Armstrong does not provide payment for annual Incentive compensation, regardless of termination reason.
(6) The value of the health care benefit provided is calculated as the Company-paid portion of the medical plan cost, times the number of months eligible according to the applicable severance plan. Coverage can include medical, dental, and vision (assumes no change in Health Plan or coverage type) and assumes a 10% health care coverage cost increase in second year (as applicable). Named Executive Officers participating in the Senior Executive Severance Plan continue to pay the employee rate for COBRA coverage during the severance period. Named Executive Officers participating in the General Severance Plan are not required to pay the employee portion of COBRA during the severance period as the Company covers the full COBRA cost.
(7) Represents the maximum allowed benefit for reimbursement of outplacement services for participants in the applicable Severance Plan. The severance plan that covers Mr. Armstrong does not provide outplacement benefits in any termination scenario outside of involuntary termination by the Company without cause.
The Named Executive Officersnamed executive officers would also be entitled to the vested benefits included in the Outstanding Equity Awards at FiscalYear-End table and the Nonqualified Deferred Compensation table. In addition, the amounts shown in the table above do not include payments and benefits to the extent they are provided on anon-discriminatory basis to salaried employees generally upon termination of employment or certain types of termination of employment. These include accrued salary and vacation pay, and life insurance benefits.
As part of the completion of the sale of our EMEA staffing operations, Ms. Koolhaas entered into a Termination Agreement, terminating her employment contract with Kelly Services OCG (the “Termination Agreement” filed January 8, 2024) as of March 31, 2024. Under the terms of the Termination Agreement, Ms. Koolhaas was entitled to a severance benefit equal to 12 months of base compensation, 100% of annual incentive compensation at target and certain other benefits. In addition, in exchange for Ms. Koolhaas’ assistance in supporting the preparation for and completion of the sale transaction, she received payment equal to 1% of the Purchase Price as defined in the Transaction Agreement. | | | | | | | | | 72 | | 60 | | |
CEO Pay Ratio CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank and Item 402(u) of RegulationS-K,Act, we are providing the requiredfollowing information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Corona, our President and Chief Executive Officer (the “CEO”), as follows: For fiscal 2017, our last completed fiscal year:
The median of the annual total compensation of all employees of our company (other than Mr. Corona, our President and CEO), was $7,198;
The annual total compensation of Mr. Corona, our President and CEO, was $4,436,760; and
Based on this information, the ratio of the annual total compensation for our President and CEO to the median of the annual total compensation of all employees is 616 to 1.
CEO. The pay ratio included in this information is a reasonable estimate calculated in a manner that is intended to be consistent with SEC rules based onItem 402(u) of Regulation S-K. For fiscal 2023, our payrolllast completed fiscal year, our methodology and employment records and the methodology described below. The SEC rules for determining the employee population and identifying the median employee provide companies with flexibility surrounding the elements of compensation to be included and various methodologies for gathering the employee population for inclusion in the analysis. The pay ratio reported by other companies may not be comparable to the pay ratio reported above,finding details are as other companies may have different employment and compensation practices, and may utilize different methodologies, exclusions, estimates, samplings and assumptions in calculating their own pay ratios.follows: To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee, the methodology that we used and the material assumptions and adjustments that we used to identify the median and determine annual total compensation are outlined below:Methodology
Our workforce consists of regular employees (employees who provide services to the Company) and those employees for whom we find employment as temporary workers. While services may be provided inside the facilities of our customers, we remain the employer of record for our temporary employees. We retain responsibility for employee assignments, the employer’s share of all applicable payroll taxes and the administration of the employee’s share of these taxes. In most cases, we determine the compensation for our temporary employees.
| ● | | We selected October 31, 2023, as the date we would use to identify our median employee; |
We selected December 31, 2017, which is a date within the last three months of fiscal 2017, as the date we would use to both gather compensation for the year and identify our median employee. We did this to ensure we had a full year of earnings for our temporary employees as we are not able to estimate what earnings for that group would be under a partial year scenario.
As of December 31, 2017, our employee population totaled 141,481 and consisted of all regular and temporary employees that were actively on assignment and being paid as of that date.
| | | | | | | | | | | | | | Category | | U.S. | | | Non U.S. | | | Total | | Regular | | | 4,722 | | | | 3,006 | | | | 7,728 | | Temporary | | | 74,294 | | | | 59,459 | | | | 133,753 | | | | | | 79,016 | | | | 62,465 | | | | 141,481 | |
| ● | | as of October 31, 2023, our employee population totaled 103,850 and consisted of all active regular and temporary employees; |
| | o• | | The vast majority of our employees, about 95%,94% are temporary employees who work anywhere from one week tofifty-two weeks in a calendar year.
|
| o | Approximately 44% of our employee population areyear, with approximately 26% located in 23 countries outside of the U.S.U.S and Canada;
|
To identifyfor 2023, we did utilize the “median employee” we collected actual base salary earningsDe Minimis 5% Exemption and overtime paid forexcluded the 12 month period ending December 31, 2017. We used actual base salary earnings and overtime paid as our consistently applied compensation measure. Based on our demographics and the likelihood that our median employee would comeemployees from our temporary workforce, we believe this to be the appropriate compensation measure most effectively applied to our employee population.Luxemburg;
| o | In making this determination, the compensation for all regular employees hired after January 1, 2017 was annualized.
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CEO Pay Ratio
| o | Compensation for temporary workers, pursuant to SEC rules, was not annualized, but all earnings for the 12 month period were collected, and included all assignments that a temporary employee would have been paid for throughout the year.
|
| o | We did not utilize either the Data Privacy Exemption or the De Minimis Exemption.
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| o | We excluded employees from our Teachers On Call (“TOC”) acquisition that was completed in September 2017 in our calculation. TOC employs fifty-nine regular employees and an estimated ten thousand temporary employees.
|
| o | We did not make anycost-of-living adjustments in identifying the median employee.
|
| o | For purposes of making the determination, employee compensation from locations outside the U.S. was converted to U.S. dollars using the Company’s 2023 budgeted exchange rates in effect on January 1, 2018, consistent withrates.
|
Findings | ● | | The median of the annual total compensation of all employees of our current financial reporting.company (other than our CEO), was $12,673; |
Using this methodology, we determined that our median employee was a temporary employee located in the U.S. with base salary and overtime earnings in the amount of $7,198. This temporary employee worked approximately thirteen andone-half weeks during 2017. Our median employee did not receive any other compensation or benefits required under Item 402(u) to be included in the employee’s annual total compensation.
| ● | | the annualized total compensation of our CEO, was $4,163,424; and |
| ● | | based on this information, the ratio of the annual total compensation for our CEO to the median of the annual total compensation of all employees is 329 to 1; |
| ● | | our median employee was a temporary employee located in the U.S. and worked approximately twenty-three weeks during 2023. |
| | | | | | | | | 73 | |
Pay vs. Performance The Company had two individuals that served in the role of CEO during the 12 month period ending December 31, 2017. Pursuant to the instructions under Item 402(u), we have elected to usefollowing table sets forth the compensation of Mr. Corona for our analysis, as he wasChief Executive Officer (“CEO”) and the active CEO as of the determination date, and in the roleaverage compensation for over 50% of the full 12 month period. Mr. Corona became CEO in May 2017. In determining Mr. Corona’s compensation to be included in the analysis, we adjusted his compensationour othernon-CEO named executive officers (“NEOs”), both as reported in the Summary Compensation Table (“SCT”) and with certain adjustments to reflect histhe compensation actually paid (“CAP”) to such individuals, as if he were CEOdefined under SEC rules, for the full calendar year, by increasing his base salaryyears 2023, 2022, 2021, and STIP award amount as if he were CEO effective January 1, 2017. His base salary was annualized at2020. The table also provides information on our cumulative total shareholder return (“TSR”) for both our Class A and Class B Common Stock; the full year CEO salarycumulative TSR of $1,000,000. The STIP award amount was adjusted based on the annualized base salaryour peer group; Net Earnings; and the higher CEO incentive target of 130% of base salary, resultingCompany-Selected Measure (“CSM”),Non-GAAP Adjusted Earnings from Operations (“EFO”), over such years in a STIP award of $1,299,740. Additionally, the value of the long-term incentive award granted in 2017 has been adjusted to $2,093,616 and reflects the award amount he would have received had he been CEO for the full year. All other compensation, as included in the Summary Compensationaccordance with SEC rules.Pay vs. Performance Table was adjusted, where appropriate, to reflect annualized amounts. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary
Compensation
Table Total to
CEO
(b) | | Compensation Actually Paid CEO (1)(2) (c) | | Average Summary Compensation Table Total for Non-CEO NEOs (d) | | Average Compensation Actually Paid to Non-CEO NEOs (1)(2) (e) | | Value of Initial Fixed $100
Investment Based On: | | Net
Earnings
(Loss) in
millions | | CSM:: Non-GAAP Adj EFO in millions (4) (j) | | | | | | | | | | | | | | | | | | | 2023 | | | $ | 4,163,424 | | | | $ | 4,313,597 | | | | $ | 1,407,120 | | | | $ | 1,555,635 | | | | $ | 99.65 | | | | $ | 103.53 | | | | $ | 121.22 | | | | | $36.4 | | | $69.1 | | | | | | | | | | | | | 2022 | | | $ | 3,535,281 | | | | $ | 2,762,629 | | | | $ | 1,331,744 | | | | $ | 1,150,597 | | | | $ | 76.65 | | | | $ | 81.19 | | | | $ | 113.87 | | | | | ($62.5 | ) | | $68.3 | | | | | | | | | | | | | 2021 | | | $ | 3,938,608 | | | | $ | 2,864,364 | | | | $ | 1,640,264 | | | | $ | 1,362,908 | | | | $ | 74.94 | | | | $ | 78.78 | | | | $ | 152.43 | | | | | $156.1 | | | $52.6 | | | | | | | | | | | | | 2020 | | | $ | 1,550,693 | | | | $ | 1,334,735 | | | | $ | 786,788 | | | | $ | 827,855 | | | | $ | 91.45 | | | | $ | 94.29 | | | | $ | 100.85 | | | | | ($72.0 | ) | | $44.3 | |
| (1) | SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine compensation actually paid as reported in the Pay versus Performance Table. Compensation actually paid, generally, is calculated as Summary Compensation Table total compensation adjusted to include the fair market value of equity awards as of the end of the fiscal year for the applicable year or, if earlier, the vesting date (rather than the grant date). We do not offer pension plan benefits therefore, there was not a change in pension value for any of the years reflective in this table. To calculate CAP, the following amounts were deducted from and added to SCT total compensation: |
CEO andNon-CEO NEOs SCT Total for CAP Reconciliation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table Total | | | $4,163,424 | | | | $1,407,120 | | | | $3,535,281 | | | | $1,331,744 | | | | $3,938,608 | | | | $1,640,264 | | | | $1,550,693 | | | | $786,788 | | | | | | | | | | | | Summary Compensation Table Stock Awards | | | ($2,160,522 | ) | | | ($555,116 | ) | | | ($1,811,085 | ) | | | ($524,293 | ) | | | ($2,734,149 | ) | | | ($974,762 | ) | | | ($839,987 | ) | | | ($326,162 | ) | | | | | | | | | | | FYE value of unvested awards granted during current year | | | $2,236,679 | | | | $617,264 | | | | $1,052,644 | | | | $334,843 | | | | $2,045,752 | | | | $789,365 | | | | $764,875 | | | | $405,599 | | | | | | | | | | | | Change in value of unvested awards from prior years | | | $793,531 | | | | $239,143 | | | | $68,855 | | | | $24,517 | | | | ($167,781 | ) | | | ($41,322 | ) | | | ($68,333 | ) | | | ($20,316 | ) | | | | | | | | | | | Change in value of awards vesting during current year from the prior years | | | $66,830 | | | | $20,763 | | | | $98,065 | | | | $22,069 | | | | $7,513 | | | | $2,122 | | | | ($73,595 | ) | | | ($18,452 | ) | | | | | | | | | | | Prior FYE value for awards not meeting performance requirements | | | ($812,048 | ) | | | ($183,487 | ) | | | ($191,086 | ) | | | ($41,686 | ) | | | ($227,577 | ) | | | ($53,637 | ) | | | — | | | | — | | | | | | | | | | | | Dividends accrued on unvested stock awards | | | $25,703 | | | | $9,948 | | | | $9,957 | | | | $3,404 | | | | $1,998 | | | | $877 | | | | $1,082 | | | | $399 | | | | | | | | | | | | Compensation Actually Paid | | | $4,313,597 | | | | $1,555,635 | | | | $2,762,629 | | | | $1,150,597 | | | | $2,864,364 | | | | $1,362,908 | | | | $1,334,735 | | | | $827,855 | |
| (2) | Compensation for thenon-principal executive officer (“CEO”) and average compensation fornon-CEO named executive officers (“NEOs”) reflected in columns (c) and (e) represent the following individuals for the years shown: 2023 – Peter W. Quigley, Olivier G. Thirot, Daniel H. Malan, Vanessa P. Williams and Dinette Koolhaas, 2022 – Peter W. Quigley, Olivier G. Thirot, Dinette Koolhaas, Vanessa P. Williams, and Darren L. Simons, 2021 – Peter W. Quigley, Olivier G. Thirot, Dinette Koolhaas, Tammy L. Browning, and Timothy L. Dupree, 2020 – Peter W. Quigley, Olivier G. Thirot, Dinette Koolhaas, Tammy L. Browning, and Daniel H. Malan. |
| (3) | As permitted by SEC rules, the peer group referenced for purpose of the TSR comparison is the group of companies included in the S&P 1500 Human Resources and Employment Services Index, which is the industry peer group used for purposes of item 201(e) of RegulationS-K as well as used in the Company’s Annual Report on Form10-K for the year ended December 31, 2023. TSR is cumulative (assuming $100 was invested on December 31, 2019) for the measurement period ending December 31, 2019 and ending on December 31 of 2023, 2022, 2021, 2020, respectively. |
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Proposal 3: Amendment and Restatement
Pay vs. Performance | (4) | The following amounts are the reconciliation of the CSM, EFO (in millions): |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As Reported | | | $24.3 | | | | $14.8 | | | | $48.6 | | | | ($93.6 | ) | | | | | | | Gain on sale of assets | | | | | | | (6.2 | ) (4) | | | | | | | (32.1 | ) (8) | | | | | | | Loss on disposal | | | | | | | 18.7 | (5) | | | | | | | | | | | | | | | Goodwill impairment charge | | | | | | | 41.0 | (6) | | | | | | | 147.7 | (9) | | | | | | | Asset impairment charge | | | 2.4 | (1) | | | | | | | | | | | | | | | | | | | Restructuring charge | | | 35.5 | (2) | | | | | | | 4.0 | (7) | | | 12.8 | (10) | | | | | | | Transaction costs | | | 6.9 | (3) | | | | | | | | | | | | | | | | | | | Customer dispute | | | | | | | | | | | | | | | 9.5 | (11) | | | | | | | Adjusted | | | $69.1 | | | | $68.3 | | | | $52.6 | | | | $44.3 | |
| (1) | Asset impairment charge in 2023 represents the impairment ofassets related to an unoccupied existing office space lease |
| (2) | Restructuring charges in 2023 represents costs related to a comprehensive transformation initiative that includes actions that will further streamline the Company’s operating model to enhance organizational efficiency and effectiveness |
| (3) | Transaction costs, which includes employee termination costs, incurred in the fourth quarter of 2023 directly related to the sale of the EMEA staffing operations in the first quarter of 2024 |
| (4) | Gain on sale of assets in 2022 is related to the sale of real property in the fourth quarter, under-utilized real property in the second quarter, and other real property sold in the first quarter of 2022 |
| (5) | Loss on disposal in 2022 represents thewrite-off of the net assets of our Russian operations that were sold in the third quarter of 2022 |
| (6) | Goodwill impairment charge in 2022 is the result of interim impairment tests the Company performed related to RocketPower due to triggering events caused by changes in market conditions |
| (7) | Restructuring charges in 2021 represents severance costs as part of cost management actions designed to increase operational efficiencies with enterprise functions that provide centralize support to operating units |
| (8) | Gain on sale of assets primarily represents the excess of proceeds over the cost of the headquarters properties sold during the first quarter of 2020 |
| (9) | The goodwill impairment charge is a result of an interim impairment test the Company performed during the first quarter of 2020, due to a triggering event caused by a decline in the Company’s common stock price |
| (10) | Restructuring charges in 2020 represents severance and lease terminations in preparation for a new operating model adopted in the third quarter of 2020 |
| (11) | Customer dispute in 2020 represents anon-cash charge in Mexico to increase the reserve against a long-term receivable from a former customer based on an updated probability of loss assessment |
As describeddiscussed in the “Corporate Governance”CD&A section of this Proxy Statement, the Board recently formed a special committee consistingfive items listed below represent the most important financial measures we used to determine CAP for FY 2023. | | | Most Important Performance Measures | | | | Adjusted EFO | | Gross Profit | | EBITDA Margin | | Revenue Growth | | Stock Price |
The charts below show, for the past four years, the relationship of the independent Directors to review and make recommendationsCompany’s TSR relative to the Board about governance matters. Upon recommendationS&P 1500 Human Resources and Employment Services index, which reflects the Company’s industry sector, as well as the relationship between the CEO andnon-CEO CAP and the Company’s TSR; the Company’s net earnings; and the Company’snon-GAAP adjusted EFO. Compensation in 2020 was impacted by the global pandemic. As a result, no annual cash payout was awarded to NEOs, and equity incentive awards were reduced by 50%. | | | | | | | | | 75 | |
Pay vs. Performance Pay vs. Performance | | | | | | 76 | | | |
Proposal 3 – Vote for the Amendment of the special committee,Company’s Restated Certificate of Incorporation to reflect updated Delaware law provisions permitting officer exculpation. As a general matter, the Board believes that our Restated Certificate of Incorporation should contain provisions consistent with the Delaware General Corporation Law ( the “DGCL”), as amended from time to time, and that amending our Restated Certificate to add the authorized liability protection for certain officers, which is consistent with the protection currently afforded our directors under the DGCL, is desirable in order to continue to attract and retain experienced and qualified officers. The new provision of the DGCL, and if this proposal is approved, our Restated Certificate, would only eliminate or limit an officer’s liability in connection with those direct claims, including class actions, brought by stockholders for breach of an officer’s fiduciary duty of care. However, as is currently the case with directors under our Restated Certificate, the proposed amendment would not eliminate or limit liability of officers for breaches of their fiduciary duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Further, the proposed amendment would not eliminate or limit officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by stockholders in the name of the Company. The rationale for limiting the scope of liability is to strike a balance between the interests of stockholders in accountability and adopted,their interests in the Company being able to attract and recommends for stockholder approval, amendmentsretain experienced and qualified officers. The Board believes it is important to provide protection from certain liabilities and expenses that may dissuade prospective or current officers from serving the Company due to the exposure to personal liability and risk of expenses they may incur without such protections. The Board has considered the effects of the amendment to the Restated Certificate, if approved, including the narrow scope of the type and class of claims that officers of the Company would be exculpated from, the limited number of officers of the Company that would be subject to the amendment, and the benefits the Company would gain, and have determined that it is in the best interest of the Company and its stockholders to amend the Restated Certificate accordingly. Text of Proposed Amendment The Board requests stockholders of the Company approve the following resolution: “RESOLVED, that the Company’s stockholders approve an amendment to the Company’s Restated Certificate of Incorporation. These amendmentsIncorporation to revise Article NINTH as follows: NINTH: No director or officer of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty by such persondirector as a director or officer; provided, however, that this Article NINTH shall not eliminate certain obsolete provisions, eliminateor limit liability (i) for any breach of the director’s or officer’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a “stakeholder provision” that could conflict withknowing violation of law, (iii) of a director under section 174 of the Delaware law, and make additional revisionsGeneral Corporation Law, or (iv) for any transaction from which the director or officer derived an improper personal benefit, (v) of an officer in any action by or in the interestsright of modernization. The amendments arethe Corporation or (vi) of a director or officer to the extent that such elimination of liability is prohibited under the Delaware General Corporation Law. No amendment or repeal of this Article NINTH shall apply to or have any effect on the liability or alleged liability of any director or officer of the corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. All references in this paragraph to an “officer” shall mean only a person who, at the time of an act or omission as follows:to which liability is asserted, falls within the meaning of the term “officer” as defined in Section 102-(b)(7) of the Delaware General Corporation Law.” Effectiveness of the Amendment Amending Article THIRD to provide thatUpon the approval of this proposal by our stockholders, the Company may engage in any lawful act or activity for which corporations may be organized underwill file with the General Corporation LawDelaware Secretary of the State of Delaware, and eliminating the specific purposes currently listed;
Eliminating obsolete references from Article FIFTH regarding thede-classification of the Board, which the Company carried out in 2010;
Eliminating Article SIXTH, which lists the original incorporators of the Company;
Adding a new Article SIXTH, which provides that the election of directors need not be carried out by written ballot;
Eliminating Article EIGHTH, which describes powers that are granted to the Board under Delaware law and therefore need not be included in the Certificate of Incorporation;
Eliminating Article NINTH, which has been rendered obsolete by federal bankruptcy law;
Eliminating Article TENTH, which could conflict with Delaware law, as described below; and
Making certain othernon-substantive and administrative changes.
Article TENTH currently requires that the Board, when evaluating any offer of another party to make a tender or exchange offer for any equity security of the Company, to merge or consolidate the Company with another corporation or to acquire all or substantially all of the properties and assets of the Company, give “due consideration to such factors as the Board of Directors determines to be relevant, including without limitation, the social, legal and economic effects of the proposed transaction upon employees, customers, suppliers, and other affected persons, firms and corporations and on the communities in which this corporation and its subsidiaries operate or are located.” Article TENTH addresses circumstances in which the Board’s obligation under Delaware law is to act, in the exercise of its business judgment, in the best interests of the Company and its stockholders. The Board is proposing the elimination of Article TENTH because, in mandating consideration of certain effects upon constituencies other than stockholders, Article TENTH purports to require the Board to consider interests that may conflict with or detract from the best interests of the Company and its stockholders.
The full text of thean Amended and Restated Certificate of Incorporation reflecting the changes contemplated by the proposed amendment. Such filing is expected to occur as proposed is set forth in Annex A, with additions indicated by underlining and deletions indicated by strikeout.
Implementation of Amendments
soon as reasonably practicable following the Annual Meeting. If this proposal is not approved by our stockholders, the CompanyCompany’s Restated Certificate will filenot be further amended, and no exculpation will be provided for our officers. | | | | | | | | | 77 | |
Proposal 3 – Vote for the Amended andAmendment of the Company’s Restated Certificate of Incorporation with theto reflect updated Delaware Secretary of State promptly after the Annual Meeting of Stockholders. The Amendedlaw provisions permitting officer exculpation. Required Vote and Restated Certificate of Incorporation will take effect upon filing.Board Recommendation Required Vote
This proposal must be approved by theThe affirmative vote of the holders of a majority of the voting poweroutstanding shares of the Company’s outstandingour Class B Common Stock. For purposes ofStock entitled to vote on this stockholder vote, abstentionsproposal is required to approve this proposal. If you hold your shares in your own name and brokernon-votesabstain from voting on this matter, your abstention will have the effect of votesa vote against thethis proposal.
| | | | | | | 63 | | |
Proposal 4: Amendment If you hold your shares through a bank, broker or other holder of record and you do not instruct them on how to the Company’s Amended and Restated Bylaws
PROPOSAL 4 - AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED BYLAWS TO DESIGNATE THE DELAWARE CHANCERY COURT AS THE EXCLUSIVE FORUM FOR CERTAIN LEGAL ACTIONS
As described in the “Corporate Governance” section of this Proxy Statement, the Board recently formed a special committee consisting of the independent Directors to review and make recommendations to the Board about governance matters. Upon recommendation of the special committee, the Board approved and adopted Amended and Restated Bylaws effective March 7, 2018 (as disclosed in the Company’s Current Reportvote on Form8-K filed with the SEC on March 9, 2018). Also upon recommendation of the special committee, the Board approved and adopted, and recommends for stockholder approval, an amendment to the Company’s Amended and Restated Bylaws (the “Bylaw Amendment”) that, if adopted, would result in the Delaware Court of Chancery serving as the exclusive forum for certain legal actions involving the Company. Specifically, if this proposal, is approved by our stockholders,they will not have the Company’s Amendedauthority to vote your shares. Abstentions and Restated Bylawsbroker non-votes will each be amended to insert a new Article XIcounted as follows:
Unlesspresent for purposes of determining the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the corporation, (2) any action asserting a claim of breachpresence of a fiduciary duty owed by any current or former director, officer, other employee or stockholder ofquorum but will have the corporation to the corporation or the corporation’s stockholders, (3) any action assertingsame effect as a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Company’s certificate of incorporation or the Bylaws or as to which the General Corporation Law of the State of Delaware confers jurisdiction on the Court of Chancery of the State of Delaware, or (4) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions ofvote against this Article XI.proposal.
The Board believes that the Bylaw Amendmentproposed amendment to our Restated Certificate is in the best interests of the Company and its stockholders for the following reasons:reasons stated above. The Bylaw Amendment provides that all intra-corporate disputes will be litigated in Delaware, the state in which we are incorporated and whose law governs such disputes;
The Delaware Chancery Court has developed considerable expertise in dealing with corporate law issues, as well as a substantial and influential body of case law construing Delaware’s corporate law and long-standing precedent regarding corporate governance;
The Bylaw Amendment will help us avoid multiple lawsuits in multiple jurisdictions relating to such disputes, thus saving the significant costs and effort in addressing cases brought in multiple jurisdictions;
The Bylaw Amendment will reduce the risk that the outcome of cases in multiple jurisdictions could be inconsistent, even though each jurisdiction purports to follow Delaware law;
The Bylaw Amendment will only regulate the forum where our stockholders may file claims relating to the specified intra-corporate disputes; it does not restrict the ability of our stockholders to bring such claims, nor does it affect the remedies available if such claims are ultimately successful; and
We will retain the ability to consent to an alternative forum in appropriate circumstances where we determine that our interests and those of our stockholders are best served by permitting a particular dispute to proceed in a forum other than Delaware.
The Bylaw Amendment is not being proposed by our Board in anticipation of or in reaction to any specific litigation or transaction; rather, it is being proposed to prevent potential harm to the Company and its stockholders. Because this provision prescribes the forum in which stockholders may commence certain types of litigation, in keeping with the views of certain proxy advisors, the Board is seeking the approval of stockholders prior to adopting the Bylaw Amendment. If the proposal is not approved, the Board will reconsider whether the Bylaw Amendment is in the best interests of the Company.
Implementation of Amendment
If this proposal is approved, the Bylaw Amendment will become effective immediately.
Required Vote
This proposal must be approved by the affirmative vote of holders of a majority of the voting power the Company’s outstanding Class B Common Stock. For purposes of this stockholder vote, abstentions and brokernon-votes will have the effect of votes against the proposal.
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Proposal 5:4 – Ratification of the Appointment of PricewaterhouseCoopers LLP PROPOSAL 5 - RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2018 FISCAL YEAR as the Company’s Independent Registered Public Accounting Firm for the 2024 Fiscal Year
On an annual basis, the Audit Committee approves and appoints the independent registered public accounting firm. During its February 14, 201813, 2024, meeting, PricewaterhouseCoopers LLP (“PwC”) was appointed to audit the consolidated financial statements of the Company for the year ending December 30, 2018.29, 2024. This firm has served as the Company’s independent registered public accounting firm for many yearssince 1960 and is considered to be well qualified. The reappointment process for the independent registered public accounting firm includes an annual assessment that takes into consideration, but is not limited to, a review of the following: | | 1. Quality of services and sufficiency of resources provided by the auditor | | ● Knowledge and skills to meet the Company’s audit requirements | ● Partner rotation (every 5 years) | ● Appropriate audit engagement partner | ● Engagement letter compliance | ● Industry experience | ● Results of consultations | ● Audit cost (fee negotiations included) | ● Long tenure and familiarity with the Company’s auditaccounting policies | | | | | | | | | 2. Communication and interaction during the engagements | | ● Professional and open dialog | ● Accessibility | ● Current accounting developments conversations | | | | 3. Independence, objectivity, and professional skepticism | | ● Assessment of audit evidence | ● Internal Audit reliance | |
The Board of Directors seeks ratification of the appointment of PwC. The representatives of the firm are expected to be present at the Annual Meeting and will be available to respond to all appropriate questions. Audit andNon-Audit Fees The Audit Committee is responsible for the compensation (including negotiations) of the independent registered public accounting firm and requirespre-approval of all audit andnon-audit services prior to engagement by the Company. In conjunction with thepre-approval, the Committee considers whethernon-audit services are consistent with the rules and regulations of the SEC on auditor independence. The authority of the Audit Committee is detailed in its charter, which is posted on the Company’s website atkellyservices.com. The table below displays the fees incurred from the audit andnon-audit services provided by PwC. | | | | | | | 2022 ($) | | | 2023 ($) | | | | | 2016 ($) | | | 2017 ($) | | Audit Fees | | | 3,904,889 | | | | 4,118,778 | | Audit Fees | | Audit Fees | | Audit Fees | | | | 4,103,600 | | | | 4,594,500 | | | Audit Related Fees | | | 29,147 | | | | 56,800 | | Audit Related Fees | | Audit Related Fees | | Audit Related Fees | | | | 5,000 | | | | 7,100 | | | Tax Fees | | | 140,200 | | | | 101,300 | | Tax Fees | | Tax Fees | | Tax Fees | | | | 381,000 | | | | 111,600 | | | All Other Fees | | | 1,800 | | | | 1,800 | | All Other Fees | | All Other Fees | | All Other Fees | | | | 17,200 | | | | 17,200 | | | Total | | | 4,076,036 | | | | 4,278,678 | | Total | | Total | | Total | | | | 4,506,800 | | | | 4,730,400 | |
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Proposal 4 – Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the 2024 Fiscal Year Audit Fees: Audits and quarterly reviews of our consolidated financial statements, statutory audits, attestation of controls, issuance of consent and assistance with review of documents filed with the SEC. Audit Related Fees:Technical assistance with new accounting standards and services Services associated with international regulatory reporting. Tax Fees:Tax and transfer pricing consulting. All Other Fees: Accounting research tools and human resources research. | | | | | | | 65 | | |
Proposal 5: Ratification of the Appointment of PricewaterhouseCoopers LLP
Report of the Audit Committee Management is responsible for the preparation, presentation, and integrity of Kelly’s financial statements, for its accounting and financial reporting principles, and for the establishment and effectiveness of internal controls and procedures designed to ensure compliance with generally accepted accounting principles and applicable laws and regulations. The independent registered public accounting firm is responsible for performing an independent audit of Kelly’s financial statements and of its internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”) and expressing an opinion as to the conformity of Kelly’s financial statements with generally accepted accounting principles and the effectiveness of its internal control over financial reporting. The independent registered public accounting firm has free access to the Committee to discuss any matters it deems appropriate. In connection withperforming its oversight role, the Committee considered and discussed the audited financial statements of Kelly for the fiscal year ended December 31, 2017,2023, with each of management and PwC, the Auditindependent registered public accounting firm. The Committee has: (1) reviewed and discussed the audited financial statements with management;
(2)also discussed with PwC the matters required to be discussed by applicable requirements of the statement on Public Company Accounting Oversight Board AU Section 380 Communication With Audit Committees; and
(3)PCAOB. The Committee received the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding PwC’s communications with the Audit Committee concerningauditors’ independence and has discussed with PwC its independence.
Based upon these reviewson the reports and discussions described in this Report, the Audit Committee recommended to the Board at its February 14, 2018 meeting that the Company’s audited financial statements of Kelly for 2023 be included in the 2023 Annual Report on Form10-K for the year ended December 31, 2017 filed with the SEC. The Board approved this inclusion.10-K. THE AUDIT COMMITTEETHE AUDIT COMMITTEE
LESLIELESLIE A. MURPHY, CHAIRMURPHY, CHAIR
ROBERTGERALD S. CUBBINADOLPH
TERRENCE B. LARKIN, VICE CHAIRROBERT S. CUBBIN
DONALD R. PARFETAMALA DUGGIRALA
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Questions and Answers About the Proxy Statement and the Annual Meeting | Q) | WHERE ARE WE HOLDING THE ANNUAL MEETING? |
KELLY SERVICES, INC.
| A) | The 2024 Annual Meeting of Shareholders will be held virtually. To access the live audio webcast of the meeting, shareholders of record will need to visit kellyservices.com for instructions and use their 16-digit Control Number provided in the Notice to log in to this website. If your shares are held beneficially in the name of a bank, broker, or other holder of record (sometimes referred to as holding share “in street name”), you will receive instructions from the holder of record that you must follow for your shares to be voted. Beneficial holders will need to obtain a “legal proxy” from their broker, bank, or other holder of record that holds your shares if they want to vote during the virtual meeting. Beneficial holders will need to send our transfer agent, Computershare, the legal proxy before the meeting and they will then issue via email, an authorized control number. |
999 West Big Beaver Road
| Q) | Troy, Michigan 48084-4716
April 9, 2018
QUESTIONS AND ANSWERS ABOUT THE PROXY STATEMENT AND THE ANNUAL MEETING
Q) WHO IS MAKING THE SOLICITATION IN THIS PROXY STATEMENT?
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| A) | This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors (the “Board”) of Kelly Services, Inc. (the “Company”) for use at the Annual Meeting of StockholdersShareholders of the Company to be held at its corporate offices in Troy, Michiganvirtually on May 9, 20182024, for the purposes set forth in the Notice of Annual Meeting of Stockholders.Shareholders. The approximate date on which this Proxy Statement and enclosed form of proxy are first being sent to stockholdersClass B shareholders of the Company is April 9, 2018.15, 2024. |
| Q) | WHO WILL BEAR THE COST OF THE PROXY SOLICITATION? |
| A) | The cost of soliciting proxies will be borne by the Company. The solicitation of proxies will be made primarily by mail. The Company may also make arrangements with brokerage houses, custodians, banks, nominees, and fiduciaries to forward solicitation material to beneficial owners of Class B stock held of record by them and to obtain authorization to execute proxies. The Company may reimburse such institutional holders for reasonable expenses incurred by them in connection therewith. |
A copy of the Company’s Annual Report and Annual Report on Form10-K as of December 31, 2017, the close of the Company’s latest fiscal year, has been mailed or otherwise made available to each stockholder of record. The expense of preparing, printing, assembling, and mailing the accompanying form of proxy and the material used in the solicitation of proxies will be paid by the Company. In addition, the Company may reimburse brokers or nominees for their expenses in transmitting proxies and proxy material to principals.
| A copy of the Company’s Annual Report and Annual Report on Form 10-K as of December 31, 2023, the close of the Company’s latest fiscal year, has been mailed or otherwise made available to each shareholder of record. The expense of preparing, printing, assembling, and mailing the accompanying form of proxy and the material used in the solicitation of proxies will be paid by the Company. In addition, the Company may reimburse brokers or nominees for their expenses in transmitting proxies and proxy material to principals. |
| Q) | WHO IS ENTITLED TO VOTE? |
| A) | Only stockholdersshareholders of record of our Class B common stock,Common Stock, par value $1.00 per share, at the close of business on March 19, 2018,21, 2024, the record date for the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting. Class B common stockCommon Stock is the only class of the Company’s securities with voting rights. |
At the close of business on March 19, 2018, the number of issued and outstanding voting securities (exclusive of treasury shares) was 3,431,972 shares of the Class B common stock. Class B stockholders
| At the close of business on March 21, 2024, the number of issued and outstanding voting securities (exclusive of treasury shares) was 3,321,601 shares of the Class B Common Stock. Class B shareholders on the record date will be entitled to one vote for each share held of record. |
| A) | We encourage stockholdersClass B shareholders to return their proxies promptly via the enclosed form of proxy in the enclosed postage prepaid envelope or vote via the internet,Internet, QR code scan, or telephone. |
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Questions and Answers About the Proxy Statement and the Annual Meeting | Q) | HOW IS MY VOTE COUNTED? |
| A) | If a proxy in the accompanying form is properly executed, returned to the Company and not revoked, the shares represented by the proxy will be voted in accordance with the instructions set forth thereon. If no instructions are given with respect to the matters to be acted upon, the shares represented by the proxy will be voted in accordance with the recommendation of the Company’s Board of Directors on each of the proposals set forth in the accompanying Notice of Annual Meeting of StockholdersShareholders and on any other matters that properly come before the Annual Meeting in such manner as may be determined by the individuals named as proxies. |
| Q) | CAN I REVOKE MY PROXY AFTER I HAVE SUBMITTED IT? |
| A) | If the enclosed form of proxy is executed and returned by the stockholder,shareholder, it may nevertheless be revoked by the person giving it by written notice of revocation to the Corporate Secretary of the Company or by submitting a later dated proxy, provided such notice or later dated proxy is received by 11:59 p.m., Central Time, on May 8, 2018, or2024. You will also be able to vote your shares online by appearing in person atattending the Annual Meeting.Meeting by webcast. |
| Q) | WHAT CONSTITUTES A QUORUM? |
| A) | Pursuant to the Company’sBy-laws, Bylaws, the holders of 60% of the issued and outstanding shares of Class B common stockCommon Stock who are entitled to vote at a stockholders’shareholders’ meeting, in person or represented by proxy, will constitute a quorum. Shares that are present and entitled to vote on any of the proposals to be considered at the Annual Meeting will be considered to be present at the Annual Meeting for purposes of establishing the presence or absence of a quorum for the transaction of business. |
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Questions and Answers About the Proxy Statement and the Annual Meeting
that are present and entitled to vote on any of the proposals to be considered at the Annual Meeting will be considered to be present at the Annual Meeting for purposes of establishing the presence or absence of a quorum for the transaction of business.
| Q) | WHAT IS A BROKERNON-VOTE? |
| A) | A “brokernon-vote” occurs if a broker or other nominee indicates on the enclosed proxy that it does not have discretionary authority as to certain shares to vote on a particular proposal, but otherwise has authority to vote at the Annual Meeting. Abstentions and shares subject to brokernon-votes will be considered as present for purposes of determining the presence or absence of a quorum at the Annual Meeting. For the purposes of Proposals 3 and 4, a brokernon-vote will have the effect of a vote against the proposal. |
| Q) | HOW IS IT DETERMINED IF A MATTER HAS BEEN APPROVED? |
| A) | Under the Company’s Restated Certificate of Incorporation, Directorsour Bylaws, directors are elected by plurality vote and the nominees who receive the greatest number of votes at the Annual Meeting will be elected. Withheld votes and broker non-votes will not be taken into account for purposes of determining the outcome of the election of Directors.directors. |
For Proposal 2 and Proposal 5, the affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on such proposal will be required to approve each of the other proposals to be considered at the Annual Meeting. Abstentions will have the effect of negative votes with respect to these proposals. Brokernon-votes will not be taken into account for purposes of these proposals.
For Proposal 3 and Proposal 4, the affirmative vote of the outstanding shares entitled to vote on such proposal will be required to approve each of the other proposals to be considered at the Annual Meeting. Abstentions and broker non-votes will have the effect of votes against these proposals.
| The affirmative vote of a majority of the Class B shares present in person or by proxy at the Annual Meeting and entitled to vote on such proposal will be required to approve Proposal 2, and Proposal 4. Abstentions will have the effect of negative votes with respect to these proposals. Broker non-votes will not be taken into account for purposes of these proposals. |
| The affirmative vote of the holders of a majority of the outstanding shares of our Class B Common Stock entitled to vote on Proposal 3 is required to approve the Proposal. Abstentions and broker non-votes will have the same effect as a vote against Proposal 3. |
| Q) | WHAT HAPPENS IF ADDITIONAL MATTERS (OTHER THAN THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT) ARE PRESENTED AT THE ANNUAL MEETING? |
| A) | If any other matters do properly come before the Annual Meeting, all proxies signed and returned by holders of the Class B common stock,Common Stock, if not limited to the contrary, will be voted thereon in accordance with the best judgment of the persons voting the proxies. |
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Questions and Answers About the Proxy Statement and the Annual Meeting | Q) | HOW CAN I COMMUNICATE WITH THE BOARD? |
| A) | StockholdersShareholders may communicate with the Board in writing, addressed to the Board of Directors and mailed to the Corporate Secretary, Kelly Services, Inc., 999 West Big Beaver Road, Troy, Michigan 48084-4716. All written stockholdershareholder communications will be summarized and reported to the Board at its regularly scheduled meetings.
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| Q) | WHAT IS THE DEADLINE TO SUBMIT STOCKHOLDERSHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONSFORNOMINATIONS FOR THE COMPANY’S 20192025 ANNUAL MEETING OF STOCKHOLDERS?SHAREHOLDERS? |
| A) | If a stockholderClass B shareholder intends to present a proposal for actioninclusion in the proxy materials to be distributed by us in connection with the Company’s 2025 Annual Meeting of Shareholders in reliance on Rule 14a-8 under the Exchange Act, the proposal must be submitted in writing and received by the Corporate Secretary no later than December 16, 2024. The proposal must also meet the other requirements of the rules of the SEC relating to shareholder proposals. |
| Our Bylaws contain an advance notice of shareholder business and nominations requirement, which generally prescribes the procedures that a shareholder of the Company must follow if the shareholder intends at an Annual Meeting of Shareholders to nominate a person for the election to the Board or to propose other business to be considered by shareholders. These procedures include, among other things, that the shareholder give timely notice to the Corporate Secretary of the nomination or other proposed business, that the notice contains specified information, and that the shareholder complies with certain other requirements. If a shareholder’s nomination or proposal is not in compliance with the procedures set forth in our Bylaws, the Company may disregard such nomination or proposal. |
| Generally, in the case of an Annual Meeting of Shareholders, a shareholder’s notice must be delivered in writing to the Corporate Secretary, at the Company’s 2019principal executive office, not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the date of the proceeding year’s Annual Meeting of StockholdersShareholders. To be timely for the 2025 Annual Meeting of Shareholders, the notice must be received by the Corporate Secretary no earlier than January 9, 2025, and wishesno later than February 7, 2025. In addition, shareholders seeking to have such proposal considered for inclusioninclude director nominations in the Company’s Proxy Statement in reliance onfor its 2025 Annual Meeting of Shareholders are required to provide notice to the Company pursuant to SEC Rule14a-814a-11 regarding proxy access no earlier than November 16, 2024 and no later than December 16, 2024, and to satisfy other conditions of such rule. Shareholders intending to utilize SEC Rule 14a-11 regarding universal proxies must provide notice to the Company postmarked no later than March 10, 2025. |
| In each case, proposals made under the Exchange Act, the proposalRule 14a-8 and nominations for director nominees and/or an item of business to be introduced at an Annual Meeting of Shareholders must be submitted in writing and received by the Corporate Secretary, Kelly Services, Inc., 999 West Big Beaver Road, Troy, Michigan48084-4716, no later than December 10, 2018. |
The Company’s Amended and Restated Bylaws provide advance notice procedures with regard to certain matters, including stockholder proposals and nominations of individuals for election to the Board of Directors, outside the process of Rule14a-8, beginning in connection with the 2019 Annual Meeting of Stockholders. In general, notice of a stockholder proposal or director nomination must be received by the Company not less than 90 nor more than 120 days prior to the first anniversary of the previous year’s annual meeting, and must contain specified information to conform to the requirements set forth in the bylaws. To be timely for the 2019 Annual Meeting of Stockholders, the notice must be received by the Company no earlier than January 9, 2019 and no later than February 8, 2019. If the chair of the meeting of stockholders determines that a stockholder proposal or director nomination was not made in accordance with the bylaws, the Company may disregard such proposal or nomination. In addition, if a stockholder submits a proposal outside of Rule14a-8 for the 2019 Annual Meeting of Stockholders and the proposal fails to comply with the advance notice procedures under the Amended and Restated Bylaws, then the Company’s proxy may confer discretionary authority on the persons being appointed as proxies on behalf of the Board to vote on the proposal.
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Annex A
ANNEX A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
KELLY SERVICES, INC.
* * * * *
Kelly Services, Inc., a corporation organized and existing under the laws of Delaware, certifies as follows:
1. The name of the Corporation is KELLY SERVICES, INC.
2. The original certificate of incorporation was filed with the Secretary of State of Delaware on August 27, 1952 under the name of PERSONNEL SERVICE, INC.
3. ThisAmended and Restated Certificate of Incorporation amendsand, restatesand integrates the certificate of incorporation of the corporation heretofore in effect. ThisAmended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware by the directors and stockholders of the corporation.
4. TheAmended andRestated Certificate of Incorporation so adopted reads in full as follows:
FIRST: The name of this corporation is Kelly Services, Inc.
SECOND:Its principalThe address of the corporation’s registered office in the State of Delaware islocated at 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801. The name of its resident agent at such address is The Corporation Trust Company.
THIRD: Thenature of the business, or objects or purposes to be transacted, promoted or carried on are:purpose of the corporation is to engage in any lawful act or activity for which corporations may be organizedunder the General Corporation Law of the State of Delaware.
To furnish office, clerical, supervisory and consultant services.
To manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description.
To acquire, and pay for in cash, stock or bonds of this corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trade-marks and trade names, relating to or useful in connection with any business of this corporation.
To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, choses in action and evidences of indebtedness or interest issued or created by any corporations, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof.
To enter into, make and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government or colony or dependency thereof.
To borrow or raise moneys for any of the purposes of the corporation and, from time to time, without limit as to amount to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable ornon-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes.
To loan to any person, firm or corporation any of its surplus funds, either with or without security.
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Annex A
To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.
To operate a private trade school and business school in the State of Michigan after obtaining the necessary license for such operation for the instruction of students in various office skills, including, but not by way of limitation, instruction in the use of various office equipment and machines.
To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount to purchase or otherwise acquire, hold, own, mortgage, sell, convey, or otherwise dispose of real and personal property of every class and description in any of the States, Districts, Territories or Colonies of the United States, and in any and all foreign countries, subject to the laws of such State, District, Territory, Colony or Country.
In general, to carry on any other business in connection with the foregoing, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formedunder the General Corporation Law of the State of Delaware, and to do any or all of the things hereinbefore set forth to the same extent as natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this certificate of incorporation, but the objects and purposes specified in each of the foregoing clauses of this article shall be regarded as independent objects and purposes.
FOURTH:
Division A
The total number of shares of stock which the corporation shall have authority to issue is 110,000,000 shares, the par value of each of the shares is $1.00,amounting in the aggregate to $110,000,000, and the shares are divided into two classes consisting of 100,000,000 shares of Class A Common Stock and 10,000,000 shares of Class B Common Stock.
Division B
The designations, preferences and relative, participating, optional or other special rights and the qualifications, limitations or restrictions in respect of the shares of each class are as follows:
(a)Dividends. Holders of the Class A Common Stock and the Class B Common Stock shall be entitled to receive dividends, out of funds legally available therefor, when and as declared by the Board of Directors, subject only to the limitations that (1) no cash dividend payable on the shares of the Class B Common Stock shall be declared unless the Board of Directors shall concurrently declare a cash dividend on the shares of the Class A Common Stock at a rate which is not less than the rate of the cash dividend payable on the shares of the Class B Common Stock (but a cash dividend may be declared on the Class A Common Stock without declaring a cash dividend on the Class B Common Stock), and (2) no dividend payable in shares of the Class B Common Stock shall be declared on the Class A Common Stock (but a dividend payable in shares of Class A Common Stock may be declared on the Class A Common Stock or the Class B Common Stock and a dividend payable in shares of Class B Common Stock may be declared on the Class B Common Stock).
(b)Voting Rights. Except on matters where their vote is required by Delaware law, the holders of the Class A Common Stock shall not be entitled to vote on any matter coming before any meeting of stockholders. The holders of the Class B Common Stock shall be entitled to one vote per share upon each matter coming before any meeting of stockholders.
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Annex A
(c)Conversion of Class B Common Stock.
1. Shares of Class B Common Stock shall be convertible, at the option of the respective holders thereof, at any time, into fully paid andnon-assessable shares of Class A Common Stock on the basis of one share of Class A Common Stock for each share of Class B Common Stock.
2. No payment or adjustment with respect to dividends on shares of the Class A Common Stock or on the Class B Common Stock shall be made in connection with any conversion of shares of Class B Common Stock into shares of Class A Common Stock.
3. The holders of a certificate or certificates for Class B Common Stock, in order to effect the conversion of shares represented thereby, shall surrender the certificate or certificates to the corporation or to the Transfer Agent for the shares of the Class B Common Stock, with request for conversion. If the shares of the Class A Common Stock issuable upon conversion are to be issued in a name other than that in which the shares of the Class B Common Stock to be converted are registered, the certificate or certificates shall be duly endorsed for transfer or accompanied by a duly executed stock transfer power, and shall also be accompanied by the necessary stock transfer stamps or equivalent funds.
Upon surrender of the certificate or certificates, the corporation shall issue and deliver or cause to be issued and delivered to the person entitled thereto a certificate or certificates for the number of full shares of the Class A Common Stock issuable upon conversion. The corporation shall pay all original issue taxes, if any, payable upon the issue of shares of the Class A Common Stock issued upon any conversion.
The conversion shall be deemed to have been effected on the date of the surrender of the certificate or certificates of shares of the Class B Common Stock, and the person in whose name the certificate or certificates of the shares of the Class A Common Stock issuable upon conversion are to be issued shall be deemed to be the holder of record of the shares as of that date.
4. If there should be any capital reorganization or any reclassification of the Class A Common Stock, the shares of the Class B Common Stock shall thereafter have the right to be converted into the number of shares of stock or other securities or property of the corporation to which outstanding shares of the Class A Common Stock would have been entitled upon the effective date of the reorganization or reclassification. The Board of Directors shall make an appropriate adjustment in the application of the provisions of this paragraph (c) with respect to the conversion rights of the holders of the shares of the Class B Common Stock after the reorganization or reclassification, to the end that the provisions shall be applicable, as nearly as reasonably may be, in respect to any shares or other securities or property thereafter issuable or deliverable upon the conversion of shares of the Class B Common Stock. The provisions of thissub-paragraph shall not apply to a reorganization or reclassification involving merely a subdivision or combination of outstanding shares of the Class A Common Stock.
5. In case the corporation shall be consolidated with or merged into any other corporation or shall sell or transfer its property and business as or substantially as an entirety, then the stock or other securities or other property, including cash, issuable or deliverable in connection with such consolidation, merger or sale in respect of each share of the Class A Common Stock then outstanding, shall thereafter, for the purposes of the conversion rights of the Class B Common Stock, be deemed the equivalent of one share of Class A Common Stock. Upon the exercise of conversion rights, holders of Class B Common Stock shall be entitled to receive on an equivalent basis and at the same rate and on the other terms and conditions set forth in this paragraph (c), the stock or other securities or property, including cash, deemed to be the equivalent of Class A Common Stock. Lawful provisions to this effect shall be made a part of and condition to the consolidation, merger or sale.
6. In case the corporation shall propose (i) to effect any reclassification of the Class A Common Stock or any capital reorganization involving a change in the Class A Common Stock, other than a reclassification or reorganization involving merely a subdivision or combination of outstanding shares of the Class A Common Stock, or (ii) to consolidate with or merge into another corporation, or to sell or transfer its property and business as or substantially as an entirety, then, in each such case, the corporation shall file with each Transfer Agent for the shares of the Class B Common Stock and shall mail to the holders of record of the shares at their respective addresses then appearing on the records of the corporation a statement, signed by an officer of the corporation, with respect to the proposed action, the statement to be so filed and mailed at least 30 days prior to the record date for holders of the Class A Common Stock for the purposes thereof. The statement shall set forth such facts with respect to the proposed action as shall be reasonably necessary to inform each Transfer Agent for the shares of the Class B Common Stock and the holders of those shares as to the effect of the action upon the conversion rights of the holders.
7. The corporation shall at all times have authorized but unissued, or in its treasury, a number of shares of the Class A Common Stock sufficient for the conversion of all shares of the Class B Common Stock from time to time outstanding.
8. In case the shares of the Class A Common Stock or the Class B Common Stock at any time outstanding shall, by reclassification or otherwise, be subdivided into a greater number of shares or combined into a lesser number of shares, the shares of Class B Common
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Annex A
Stock or Class A Common Stock, respectively, then outstanding shall, at the same time, be subdivided or combined, as the case may be, on the same basis.
(d)Preemptive Rights. Holders of the Class A Common Stock shall have no preemptive right to subscribe to any securities issued by the corporation. Holders of the Class B Common Stock shall have the preemptive right to subscribe to additional shares of Class B Common Stock, or any other voting stock or any security convertible into Class B Common Stock or other voting stock, hereafter issued by the corporation.
(e)Liquidation Preferences.
1. In the event of dissolution, liquidation or winding up of the corporation, whether voluntary or involuntary, holders of the Class A Common Stock and of the Class B Common Stock shall be entitled to payment out of the assets of the corporation ratably in accordance with the number of shares held by them respectively.
2. Neither a consolidation nor a merger of the corporation with or into any other corporation, nor a merger of any other corporation into the corporation, nor the purchase or other acquisition by the corporation of all or a part of the outstanding shares of any class or classes of its stock, nor the sale or transfer of the property and business of the corporation, as or substantially as an entirety, shall be considered a dissolution, liquidation or winding up of the corporation within the meaning of the foregoing provisions.
FIFTH: The business, property and affairs of this corporation shall be managed by a Board of Directors consisting of no fewer than five (5) and no more than eleven (11) members, the exact number to be determined from time to time by resolution of the Board of Directors.Effective atAt each annual meeting of the stockholders of the corporationfrom and after the annual meeting to be held in 2010, all director nominees shall stand for election to terms expiring at the next succeeding annual meeting, with each director to hold office until his successor is duly elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Theterm of each director serving as of and immediately prior to the annual meeting of the stockholders of the corporation to be held in 2010 shall expire as of the date of such annual meeting, notwithstanding that such director may have been elected for a term that extended beyond the date of such annual meeting. The Board of Directors may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by theCcertificate ofIincorporation or by the by-lawsof the corporation (the “Bylaws”) directed or required to be exercised or done by the stockholders.
Newly created directorships resulting from any increase in the authorized number of directors and vacancies in the Board of Directors from death, resignation, retirement, disqualification, removal from office or othercause, shallreason, may only be filled by a majority vote of the directors then in office, and directors so chosen shall hold office for a term expiring at the next annual meeting of the stockholders of the corporation and until their successors are duly elected and qualified, subject, however, to prior death, resignation, retirement, disqualification or removal from office. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.
Any director, or the entire Board of Directors, may be removed at any time, with or without cause. The affirmative vote of the holders of a majority of the voting power of all of the stock of this corporation entitled to vote in elections of directors shall be required to remove a director from office. The stockholders of the corporation are expressly prohibited from cumulating their votes in any election of directors of the corporation.
SIXTH: The names and places of residence of the incorporators were as follows:
SIXTH: Unless and except to the extent that the Bylaws shall so require, the election of directors of the corporation need not be by written ballot.
| | | Names | | Residences | L. E. Gray
| | Wilmington, Delaware
| S. M. Brown
| | Wilmington, Delaware
| A. D. Atwell
| | Townsend, Delaware
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Annex A
SEVENTH: By-laws of the corporation may be adopted, amended or repealed by the affirmative vote of a majority of the total number of directors or by the affirmative vote of the holders of a majority of the voting power of all of the stock of this corporation entitled to vote in elections of directors. Theby-lawsBylaws may contain any provision for the regulation and management of the affairs of the corporation and the rights or powers of its stockholders, directors, officers, or employees not inconsistent with the laws of the State of Delawareor this certificate of incorporation.
EIGHTH:
In furtherance, and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
To fix the amount to be reserved as working capital over and above its capital stock paid in, to authorize and cause to be executed mortgages and liens upon the real and personal property of this corporation.
From time to time to determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of this corporation (other than the stock ledger), or any of them, shall be open to inspection of stockholders; and no stockholder shall have any right of inspecting any account, book or document of this corporation except as conferred by statute, unless authorized by a resolution of the stockholders or directors.
By resolution or resolutions, passed by a majority of the whole board to designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in said resolution or resolutions, or in theby-laws of this corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of this corporation, and may have power to authorize the seal of this corporation to be affixed to all papers which may require it. The committee or committees shall have the name or names as may be stated in theby-laws of this corporation or as may be determined from time to time by resolution adopted by the Board of Directors.
This corporation may in itsby-laws confer powers upon its directors in addition to the foregoing, and in addition to the powers and authorities expressly conferred upon them by the statute.
Both stockholders and directors shall have power, if theby-laws so provide, to hold their meetings, and to have one or more offices within or without the State of Delaware, and to keep the books of this corporation (subject to the provisions of the statutes), outside of the State of Delaware at such places as may be from time to time designated by the Board of Directors.
NINTH: Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this corporation under Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said Court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation, as the case may be, and also on this corporation.
TENTH: The Board of Directors of this corporation, when evaluating any offer of another party to (a) make a tender or exchange offer for any equity security of this corporation; (b) merge or consolidate this corporation with another corporation; or (c) purchase or otherwise acquire all or substantially all of the properties and assets of this corporation, shall, in connection with the exercise of its judgment in determining what is in the best interest of this corporation and its stockholders, give due consideration to such factors as the Board of Directors determines to be relevant, including without limitation, the social, legal and economic effects of the proposed transaction upon employees, customers, suppliers, and other affected persons, firms and corporations and on the communities in which this corporation and its subsidiaries operate or are located.
ELEVENTHEIGHTH: No action required or permitted to be taken at any annual or special meeting of the stockholders of this corporation may be taken without a meeting and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.
TWELFTHNINTH: No director of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty by such director as a director; provided, however, that this ArticleTWELFTHNINTH shall not eliminate or limit liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. No amendment or repeal of this ArticleTWELFTHNINTH shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.
THIRTEENTHTENTH: Special meetings of the stockholders of this corporation for any purpose or purposes may be called at any time by the Board of Directors or by a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as provided in a resolution of the Board of Directors or in theby-laws of this corporationBylaws, include the power to call such meetings, but such special meetings may not be called by any other person or persons.
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Annex A
FOURTEENTHELEVENTH: This corporation reserves the right to amend, alter, change or repeal any provision contained in thisCcertificate ofIincorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
[Signature Page Follows]
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Annex A
IN WITNESS WHEREOF, Kelly Services, Inc. has caused thisAmended and Restated Certificate of Incorporation to be signed byDaniel T. Lis, its Senior Vice President and Corporate Secretary this 5th___________, its ____________________ this ___ day of May,20092018.
| | | KELLY SERVICES, INC.
| | | By | | /S/ DANIEL T. LIS | | | Daniel T. LisJames M. Polehna
Senior Vice President andCorporate Secretary
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| | | | | | | | | | Electronic Voting Instructions
Available 24 hours a day, 7 days a week.
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
| | | | | | VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
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| | | | | | | | |  | | Vote by Internet
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q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,MMMMMMMMMMMMMM C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE______________ SACKPACK_____________ 000000000.000000 ext 000000000.000000 ext MR A SAMPLE DESIGNATION (IF ANY) ADD 1 000001 ADD 2 Your vote matters – here’s how to vote! ADD 3 You may vote online or by phone instead of mailing this card. ADD 4 MMMMMMMMM ADD 5 Online ADD 6 Go to www.envisionreports.com/kelyb or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Using a black ink pen, mark your votes with an X as shown in this example. Sign up for electronic delivery at Please do not write outside the designated areas. www.envisionreports.com/kelyb Annual Meeting Proxy Card 1234 5678 9012 345 qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | A | | Proposals – The Board of Directors recommends A Proposals — The Board of Directors recommend a vote FOR all the nominees listed and FOR Proposals 2, 3 and 4. 1. Election of Directors: + For Withhold For Withhold For Withhold 01 - T.B. Larkin 02 - P.W. Quigley 03 - G.S. Adolph 04 - G.S. Corona 05 - R.S. Cubbin 06 - A. Duggirala 07 - I.F. Johnson 08 - L.A. Murphy 09 - D.R. Parfet For Against Abstain 2. Non-binding advisory vote on executive compensation. 3. Amendment of the Company’s Restated Certificate of Incorporation to Reflect Updated Delaware law provisions permitting officer exculpation. 4. Ratification of PricewaterhouseCoopers LLP as independent 5. Transacting any other business as may properly come before accountants for the 2024 fiscal year. the Meeting or any postponement or adjustments thereof. B Authorized Signatures — This section must be completed for your vote to be counted. - 5. | | | | | | |
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| | Election of directors of the Company, to serve for one-year terms expiring 2019, and until their respective successors shall be elected and shall qualify.
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| | | | | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold | | | | | | | | | | | | 01 - T.E. Adderley | | ☐ | | ☐ | | 02 - C.M. Adderley | | ☐ | | ☐ | | 03 - G.S. Adolph | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | 04 - G.S. Corona | | ☐ | | ☐ | | 05 - R.S. Cubbin | | ☐ | | ☐ | | 06 - J.E. Dutton | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | 07 - T.B. Larkin | | ☐ | | ☐ | | 08 - L.A. Murphy | | ☐ | | ☐ | | 09 - D.R. Parfet | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10 - H. Takahashi | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain | | 2. | | Non-binding advisory vote on executive compensation. | | ☐ | | ☐ | | ☐ | | 4. | | Amending the Company’s Amended and Restated Bylaws to designate the Delaware Chancery Court as the exclusive forum for certain legal actions. | | ☐ | | ☐ | | ☐ | | 3. | | Amendment and restatement of the Company’s Restated Certificate of Incorporation to eliminate certain obsolete provisions, to eliminate a “Stakeholder provision” that could conflict with Delaware law, and to make additional revisions in the interest of modernization. | | | | ☐ | | ☐ | | ☐ | | 5. | | Ratification of PricewaterhouseCoopers LLP as independent accountants for the 2018 fiscal year. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | 6. | | Transacting any other business as may properly come before the Meeting or any postponement or adjournments thereof. | | |
| | | | | | | | | | | | | | | B | | Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below | | | | |
NOTE: Please sign exactly as namename(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or guardian,custodian, please give full title as such.title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MMMMMM 1UPX 610383 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 03YIIC
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IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
The 2024 Annual Meeting of Shareholders of Kelly Services, Inc. will be held on Thursday, May 9, 2024 at 12:00 p.m. EDT, virtually via the internet at www.meetnow.global/MTZZK6S To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders. Shareholders. The Proxy Statement and the 2017 Annual Report to stockholders arematerial is available at: www.envisionreports.com/kelyb q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/kelyb qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
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Proxy —- Kelly Services, Inc. 999 West Big Beaver Road
+ Notice of Annual Meeting of Stockholders -Shareholders Proxy Solicited by Board of Directors for Annual Meeting — May 9, 2018 THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
2024 The undersigned hereby names, constitutes and appoints Vanessa P. Williams and Peter W. Quigley, and Olivier G. Thirot, and each of them, with power to act without the other and with power of substitution, as proxies andattorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Kelly Services, Inc. Class B Common Stock which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of StockholdersShareholders of the Company to be held May 9, 20182024 or at any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Meeting. THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” ALL THE PROPOSALS. (ContinuedNOMINEES LISTED, AND “FOR” PROPOSALS 2, 3 AND 4. (Continued to be marked, dated and signed, on the other side.) C Non-Voting Items Change of Address — Please print new address below. Comments — Please print your comments below. IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD +
| | | | | Change of Address— Please print new address below.
| | Comments— Please print your comments below.
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| | | | | ∎ | | IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. | | + |
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