Paycor HCM, Inc.
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DEF 14A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
Filed by the Registrant 
Filed by a Party other than the Registrant 
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant to
§240.14a-12
PAYCOR HCM, INC.
(Name of registrant as specified in its charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
 
No fee required.
 
Fee paid previously with preliminary materials
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 
 


LOGO

September 26, 2024

Dear Fellow Stockholders,

We are pleased to invite you to attend the 2024 Annual Meeting of Stockholders of Paycor HCM, Inc. to be held on Wednesday, October 23, 2024, at 10:00 a.m. (ET). The Annual Meeting will be conducted virtually, via live audio webcast. In keeping with Paycor’s virtual-first working environment, and in order to provide our stockholders who would otherwise not be able to attend the meeting the opportunity to do so, we believe a virtual only meeting is advisable. You will be able to attend the meeting online by visiting www.virtualshareholdermeeting.com/PYCR2024 and entering the 16-digit control number included on your proxy card or the voting instruction form you received from your bank or broker. Once you have logged in to the virtual meeting, you will be able to submit questions and vote your shares electronically during the meeting.

Further details regarding how to attend the virtual Annual Meeting and the business to be conducted at the meeting are described in the attached Notice of Annual Meeting and Proxy Statement.

Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares as soon as possible. Please refer to your proxy card or the voting instruction form you received for more information about how to vote your shares. Voting by proxy will ensure your representation at the Annual Meeting, regardless of whether you attend the meeting.

Sincerely,

 

LOGO

Jason Wright

Chair of the Board


LOGO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON OCTOBER 23, 2024

 

 

September 26, 2024

The 2024 Annual Meeting of Stockholders of Paycor HCM, Inc. (“Paycor”) will be conducted virtually, via live audio webcast at www.virtualshareholdermeeting.com/PYCR2024 on Wednesday, October 23, 2024, at 10:00 a.m. (ET) for the following purposes:

 

  1.

to elect two nominees identified in the accompanying proxy statement to serve as Class III directors, as recommended by the Nominating and Governance Committee of the Board;

 

  2.

to approve, on an advisory and non-binding basis, the compensation of Paycor’s named executive officers, as disclosed in the accompanying proxy statement;

 

  3.

to ratify the appointment of Ernst & Young LLP as Paycor’s independent registered public accounting firm for the fiscal year ending June 30, 2025; and

 

  4.

to transact other business as may properly come before the meeting or any adjournment of the meeting.

A list of stockholders entitled to vote at the meeting will be available for examination by any stockholder for any purpose relevant to the meeting during ordinary business hours for at least ten (10) days prior to Wednesday, October 23, 2024, at 4811 Montgomery Road, Cincinnati, Ohio, 45212, and during the virtual meeting, on the virtual meeting platform at www.virtualshareholdermeeting.com/PYCR2024. To examine the list at our principal executive offices you must be a stockholder as of the record date for the meeting and will be required to provide a copy of your proxy card or voting instruction form bearing your unique 16-digit control number and a copy of a valid picture identification, such as a driver’s license or passport. To examine the list of stockholders, the name on the identification must match the name on the proxy card or voting instruction form.

By Order of the Board of Directors,

 

LOGO

Alice Geene

Chief Legal Officer and Secretary

 

              
     

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 23, 2024:

 

This Notice of Annual Meeting, the accompanying proxy statement and our Annual Report on
Form 10-K for the Fiscal Year Ended June 30, 2024 are available at
www.virtualshareholdermeeting.com/PYCR2024.

      
            
        

 


PROXY STATEMENT FOR THE

2024 ANNUAL MEETING OF STOCKHOLDERS OF

PAYCOR HCM, INC.

 

 

The Board of Directors (the “Board”) of Paycor HCM, Inc. (“Paycor,” the “Company,” “we,” “us” or “our”) is soliciting your proxy to vote at the 2024 annual meeting of stockholders to be held on Wednesday, October 23, 2024 at 10:00 a.m. (ET) via live audio webcast at www.virtualshareholdermeeting.com/PYCR2024, and any adjournments, postponements or continuations thereof (the “Annual Meeting”). This proxy statement (this “Proxy Statement”) is dated as of September 26, 2024 and is first being sent to our stockholders of record on or about September 26, 2024.


TABLE OF CONTENTS

 

 

 

    Page  

CORPORATE GOVERNANCE

    1  

PROPOSAL 1 – ELECTION OF DIRECTORS

    5  

ENVIRONMENTAL, SOCIAL AND GOVERNANCE FRAMEWORK

    15  

EXECUTIVE OFFICERS

    18  

COMPENSATION DISCUSSION AND ANALYSIS

    20  

EXECUTIVE COMPENSATION

    30  

DIRECTOR COMPENSATION

    38  

CEO PAY RATIO

    39  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    44  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    46  

AUDIT COMMITTEE REPORT

    48  

PROPOSAL 2 – ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

    49  

PROPOSAL 3 – RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    50  

COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

    51  

OTHER MATTERS

    55  

WHERE TO FIND ADDITIONAL INFORMATION

    55  

COST OF PROXY SOLICITATION

    55  

HOUSEHOLDING OF PROXY MATERIALS

    55  

APPENDIX – NON-GAAP FINANCIAL MEASURES

    56  

 

 

i 2024 Proxy Statement   LOGO  


CORPORATE GOVERNANCE

 

 

Board Composition

Our business and affairs are managed by or under the direction of the Board. The size of the Board is currently fixed at eight directors.

The Company’s Second Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) provides that the number of directors constituting the Board may be changed only by resolution of the Board. Additionally, so long as the Apax Funds have nomination rights under the Director Nomination Agreement (each as defined and discussed below under “—Director Nomination Agreement”), the Company may not increase or decrease the number of directors constituting the Board without the prior written consent of the Apax Funds.

Our Certificate of Incorporation also provides that the Board will be divided into three classes of directors, with the classes as nearly equal in number as possible. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the class whose term is then expiring. Subject to the terms of the Director Nomination Agreement and any earlier death, resignation or removal in accordance with the terms of our Certificate of Incorporation, the term of office of our Class III directors will expire at this Annual Meeting, the term of office of our Class I directors will expire at our 2025 annual meeting of stockholders, and the term of office of our Class II directors will expire at our 2026 annual meeting of stockholders.

In addition, our Certificate of Incorporation provides that directors may be removed with or without cause upon the affirmative vote of stockholders representing at least a majority of the voting power of our then outstanding shares of stock entitled to vote thereon (“Voting Stock”), voting together as a single class for so long as the Apax Funds beneficially own in the aggregate (directly or indirectly) at least 40% or more of the voting power of our then outstanding shares of Voting Stock. If the Apax Funds no longer beneficially own in the aggregate (directly or indirectly) 40% or more of the voting power of our then outstanding shares of Voting Stock, then our directors may only be removed for cause and only upon the affirmative vote of stockholders representing at least 66 2/3% of the voting power of our then outstanding shares of Voting Stock.

The following table sets forth the name, class, age (as of September 16, 2024) and term for each of our current directors:

 

Name

   Class    Age    Position    Director
Since
   Current
Term
Expires

Whitney Bouck

   I    58    Director    2020    2025

Scott Miller

   I    63    Director    2006    2025

Jason Wright

   I    52    Chair of the Board    2018    2025

Kathleen Burke

   II    43    Director    2020    2026

Steven Collins

   II    59    Director    2019    2026

Jeremy Rishel

   II    51    Director    2022    2026

Jonathan Corr

   III    57    Director    2021    2024

Raul Villar, Jr.(1)

   III    56    Chief Executive Officer and Director    2021    2024

 

(1)

Mr. Villar, Jr. is standing for re-election at the Annual Meeting.

Director Qualifications & Nominating Process

We believe that in order for the Board to effectively guide us to long-term sustainable, dependable performance, it should be comprised of individuals with sophistication and experience in the many disciplines that impact our business. In order to best serve our stockholders, we seek to have a Board, as a whole, that is competent in key corporate disciplines, including accounting and finance, business judgment, cybersecurity, crisis management, governance, leadership, people management, risk management, social responsibility and reputational issues, strategy and strategic planning. Additionally, we desire that the Board have specific knowledge related to our industry, such as expertise in software and technology.

Director Qualifications. The Nominating and Governance Committee believes that all directors must, at a minimum, meet the criteria set forth in our Corporate Governance Guidelines, which specify, among other things, that the Nominating and Governance Committee will consider criteria such as independence, diversity, age, skills, and experience,

 

  LOGO   2024 Proxy Statement 1


in the context of the needs of the Board. The Nominating and Governance Committee also will consider a combination of factors for each director, including those nominated by its stockholders, including (a) the nominee’s ability to represent all stockholders without a conflict of interest, (b) the nominee’s ability to work in and promote a productive environment, (c) whether the nominee has sufficient time and willingness to fulfill the substantial duties and responsibilities of a director, (d) whether the nominee has demonstrated the high level of character, ethics and integrity expected by the Company, (e) whether the nominee possesses the broad professional and leadership experience and skills necessary to effectively respond to the complex issues encountered by a publicly-traded company, (f) the nominee’s ability to apply sound and independent business judgment and (g) the diverse attributes of the nominee, such as differences in background, qualifications and personal characteristics.

The Nominating and Governance Committee has determined that all of our director nominees meet the criteria and qualifications set forth in our Corporate Governance Guidelines and the criteria set forth above for director nominees.

In the event of one or more vacancies on the Board, the Nominating and Governance Committee will identify the desired skills and experience of the new director(s) and nominate individual(s) who it believes would strengthen the Board’s capabilities and further diversify the collective experience represented by the then-current Board. The Nominating and Governance Committee may engage third parties to assist in the search process and to provide recommendations for candidates for director. Also, incumbent directors may be asked to recommend candidates for director. Any candidates for director would then be evaluated based on the process outlined in our Corporate Governance Guidelines, subject to the rights of the Apax Funds under the Director Nomination Agreement. The same process will be used to evaluate all candidates for director, including any candidates recommended by our stockholders. See “—Stockholder Recommendation of Director Candidates” below.

Age Limits. As it relates to age, our Corporate Governance Guidelines require that no director that has attained age 74 or older may be nominated to a new term, unless he or she is also the chief executive officer of the Company. We believe that this policy will promote director refreshment and strikes an appropriate balance between depth of experience and understanding of the Company and its operations and the need for new and fresh perspectives that younger generations will contribute to the Board.

Board Diversity. While we do not have a formal policy on diversity when considering the selection of nominees for director, we consider a combination of factors for each director, including the diverse attributes of the nominee – such as differences in background, qualifications and personal characteristics, and strive to achieve a diverse set of perspectives and experiences aligned with our company-wide diversity, equity and inclusion (“DE&I”) strategy. (See the section entitled “Social – Diversity, Equity & Inclusion” under “Environmental, Social and Governance Framework,” below, for further detail about the steps the Company has taken over the past fiscal year to advance its commitment to DE&I.)

The following table provides summary information about the current members of the Board who self-identify in the gender and demographic categories shown:

 

Board Diversity Matrix as of August 31, 2024

 

Board Size:

 

Total Number of Directors

     8  
   
  

 

   Female      Male      Non-Binary      Did Not
Disclose
Gender
 
   

Part 1: Gender Identity

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

   

Directors

     2          6          0          0    
   

Part 2: Demographic Background

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

    

 

 

 

 

 

   

African American or Black

     0          0          0          0    
   

Alaskan Native or Native American

     0          0          0          0    
   

Asian

     0          0          0          0    
   

Hispanic or Latinx

     0          1          0          0    
   

Native Hawaiian or Pacific Islander

     0          0          0          0    
   

White

     2          5          0          0    
   

Two or More Races or Ethnicities

     0          0          0          0    
 

LGBTQ+

     0  
 

Did Not Disclose Demographic Background

     0  

 

2 2024 Proxy Statement   LOGO  


Background and Experience of our Director Nominees and Continuing Directors

Each of our director nominees and continuing directors possesses the following critical personal qualities and attributes that we believe are essential for the proper functioning of the Board to allow it to fulfill its duties for our stockholders: accountability, ethical leadership, governance, integrity, risk management, and sound business judgment. In addition, our director nominees and continuing directors have the confidence to assess and challenge the way things are done and recommend alternative solutions, a keen awareness of our business and social realities of the environment in which we operate, the independence and high-performance standards necessary to fulfill the Board’s oversight function, and the humility, professional maturity, and style to interface openly and constructively with other directors and management.

The table below and the director biographies under the section entitled “Proposal 1 – Election of Directors” highlight the key skills and experiences that our director nominees and continuing directors have developed through education, direct experience and oversight responsibilities. We believe these collective qualities, skills, experiences and attributes are essential to the Board’s ability to exercise its oversight function for Paycor and its stockholders and to guide us to long-term sustainable, dependable performance. If an individual is not listed as having a particular attribute, it does not signify an individual’s lack of ability to contribute in that specific area. Rather, it is intended to depict notable areas of focus.

 

                 
Director/Director Nominee    LOGO       LOGO       LOGO      

 

LOGO   

   LOGO       LOGO       LOGO       LOGO   
         

Public Company Governance

    

 

   X      X      X      X      X      X      X  
         

Software Industry

   X      X      X      X      X      X      X      X  
         

Executive Management

   X      X      X      X      X      X      X      X  
         

International

    

 

   X      X       

 

    

 

    

 

    

 

   X  
         

Human Capital Management

   X       

 

   X       

 

   X       

 

   X       

 

         

Executive Compensation

   X       

 

   X      X      X       

 

    

 

   X  
         

Accounting/Finance

   X      X       

 

   X      X       

 

    

 

   X  
         

Marketing & Sales

   X      X      X       

 

   X       

 

   X       

 

         

Environmental/Sustainability

    

 

    

 

   X       

 

    

 

    

 

    

 

   X  
         

Technology/Cybersecurity

   X      X      X       

 

   X      X      X      X  
         

Mergers and Acquisitions

   X      X       

 

   X       

 

   X      X      X  

Director Nomination Agreement

In connection with our initial public offering (“IPO”), we entered into a director nomination agreement (the “Director Nomination Agreement”) with Pride Aggregator, L.P., our principal stockholder (“Pride Aggregator”). The Director Nomination Agreement provides certain funds advised by Apax Partners LLP (the “Apax Funds”), through their control of Pride Aggregator, the right to designate nominees for election to the Board for so long as Pride Aggregator beneficially owns at least 5% of the total number of shares of our common stock that it beneficially owned upon completion of the IPO, as adjusted for any reorganization, recapitalization, stock dividend, stock split, reverse stock split or similar changes in the Company’s capitalization (such amount of shares, as adjusted, the “Original Amount”). Specifically, the Director Nomination Agreement provides the Apax Funds the right to designate: (i) all of the nominees for election to the Board for so long as Pride Aggregator beneficially owns at least 40% of the Original Amount; (ii) a number of directors (rounded up to the nearest whole number) equal to 40% of the total directors for so long as Pride Aggregator beneficially owns less than 40% but at least 30% of the Original Amount; (iii) a number of directors (rounded up to the nearest whole number) equal to 30% of the total directors for so long as Pride Aggregator beneficially owns less than 30% but at least 20% of the Original Amount; (iv) a number of directors (rounded up to the nearest whole number) equal to 20% of the total directors for so long as Pride Aggregator beneficially owns less than 20% but at least 10% of the Original Amount; and (v) one director for so long as Pride Aggregator beneficially owns less than 10% but at least 5% of the Original Amount. In addition, the Apax Funds are entitled to designate a successor for any of their designees whose service on the Board terminates prior to the end of any such designee’s term for any reason, regardless of Pride Aggregator’s beneficial ownership at the time of the vacancy. The Apax Funds also have the right to designate one member of each committee of the Board, subject to compliance with applicable law or listing rules, including any applicable independence requirements. Finally, the Director Nomination Agreement

 

  LOGO   2024 Proxy Statement 3


prohibits us from increasing or decreasing the size of the Board without the prior written consent of the Apax Funds. If Pride Aggregator is dissolved, then the rights of Pride Aggregator under the Director Nomination Agreement may be assigned by the Apax Funds to one or more associated investment funds.

Stockholder Recommendation of Director Candidates

Subject to the rights of the Apax Funds under the Director Nomination Agreement, the Nominating and Governance Committee will evaluate candidates for director recommended by our stockholders using the same criteria and process outlined in our Corporate Governance Guidelines. Stockholders who wish to identify director candidates for consideration by the Nominating and Governance Committee may write to Paycor HCM, Inc., 4811 Montgomery Road, Cincinnati, Ohio 45212, Attn: Corporate Secretary, and any candidates so identified will then be forwarded to the Chair of the Nominating and Governance Committee for consideration. Stockholders may also nominate directors for election to the Board. In order to nominate a candidate for director at our 2025 annual meeting of stockholders, nominations must be submitted in writing to our Corporate Secretary at our principal executive offices, and must be received no later than the close of business on July 25, 2025 and not earlier than the close of business on June 25, 2025. All stockholder nominations must also satisfy certain other procedural requirements as specified in our Amended and Restated Bylaws (“Bylaws”).

In addition to satisfying the requirements under our Bylaws, in order to comply with Rule 14a-19 (the universal proxy rules) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), stockholders who intend to solicit proxies in support of director nominees, other than the Company’s nominees, must provide written notice that sets forth all of the information required by Rule 14a-19(b) under the Exchange Act, which notice must be postmarked or transmitted electronically to the Company Secretary at our principal executive offices no later than August 25, 2025. However, if the date of our 2025 annual meeting of stockholders is changed by more than 30 days from October 23, 2025, then written notice must be provided by the later of the 60th day prior to the date of our 2025 annual meeting of stockholders and the 10th day following the day on which public announcement of the date of our 2025 annual meeting of stockholders is first made by us.

 

 

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PROPOSAL 1 – ELECTION OF DIRECTORS

 

 

Based upon the recommendation of the Nominating and Governance Committee, the Board has nominated Raul Villar, Jr. and Dru Armstrong for election at the Annual Meeting. Certain biographical information for each of the nominees is set forth in the following section. Also set forth therein is a description of the specific experience, qualifications, attributes and skills of each nominee that were considered by the Nominating and Governance Committee, in the context of the needs of the Board as a whole, in determining that these individuals were qualified to serve on the Board. Each of the two nominees has been included in the slate of nominees recommended for election by the Board pursuant to the terms of the Director Nomination Agreement. Mr. Corr has not been nominated for re-election at the Annual Meeting. The Company and the Board thank him for his past service to the Company and wish him well in his future endeavors.

If elected at the Annual Meeting, the director nominees will serve for three-year terms, expiring at our 2027 annual meeting of stockholders and until their respective successors are duly elected and qualified, or until his or her earlier death, resignation or removal.

Proxies solicited on behalf of the Board will be voted “for” the election of each of the two director nominees, unless your proxy card is marked otherwise (if you are a registered stockholder) or you have provided a different instruction to your bank or broker (if you are a beneficial or “street name” stockholder).

Vote Required

Under our Bylaws, the election of the two director nominees at the Annual Meeting requires a plurality of the votes cast by holders of our common stock present in person or represented by proxy and entitled to vote on the election of directors. In an uncontested election of directors, this means that each director nominee will be elected if he or she receives at least one “FOR” vote. Failure to vote by proxy or to vote electronically at the virtual Annual Meeting and “WITHHOLD” votes will result in a respective nominee having fewer votes but will have no effect on the outcome of the election because a plurality of the votes cast is required for the election of the director nominee. Cumulative voting is not permitted in the election of directors.

Each nominee for director has consented to stand for election and has agreed to serve if elected. We currently have no reason to believe that any of the nominees would be unable or unwilling to serve if elected. However, if before the Annual Meeting, any nominee becomes unable to serve, or chooses not to serve, the Board may nominate another individual as a substitute. If that happens, the persons named as proxies in the proxy card will vote for the substitute. Alternatively, the Board may either let the vacancy stay unfilled until an appropriate candidate is identified or reduce the size of the Board to eliminate the vacancy.

The Board unanimously recommends that you vote “FOR” each of the director nominees below.

Director Nominees To Serve For Three-Year Terms Expiring at the 2027 Annual Meeting

 

   

Raul Villar, Jr.

    

 

             
               
   
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Age 56

 

Director since 2021

 

Committees:

  None

 

         Mr. Villar has served as our Chief Executive Officer since July 2019 and as a member of the Board since January 2021. From September 2015 to July 2019, Mr. Villar served as the Chief Executive Officer of AdvancedMD, a medical software and services company, and prior to that, he held numerous leadership roles at Automatic Data Processing Inc. (“ADP”), including President, ADP AdvancedMD, Senior Vice President, Sales – Major Accounts, and Senior Vice President, Sales – Small Business. Mr. Villar earned a Bachelor of Science from Bryant University and a Master of Business Administration from the University of Connecticut.
              

 

Skills and Qualifications:

  Mr. Villar contributes his industry expertise to the Board and offers strategic and operational insights into our business as our Chief Executive Officer.

 

  

 

Public Company Directorships:

  None

 

             

 

 

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Drury (“Dru”) Armstrong

    

 

             
               
   
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Age 43

 

INDEPENDENT

 

Committees:

  None

 

        

Ms. Armstrong has served as Chief Executive Officer of AffiniPay, LLC, a leading financial technology software provider for professionals, since July 2021, where she has implemented and executed a new strategic direction for the business, including its transformative acquisition of MyCase. Prior to joining AffiniPay, Ms. Armstrong served as Chief Executive Officer of Grace Hill, LLC, a real estate technology and software provider, from June 2016 to July 2021, and as Chief Product Officer from September 2015 to May 2016.

 

Ms. Armstrong received a Master of Business Administration from the University of Chicago Booth School of Business, a Juris Doctorate from the University of Chicago Law School, and a Bachelor of Arts in Economics from Columbia University.

              

 

Skills and Qualifications:

  Ms. Armstrong brings extensive experience scaling technology companies, as well as executive and strategic leadership experience, to the Board.

 

  

 

Public Company Directorships:

  None

 

             

Continuing Directors Whose Terms Expire in 2025

 

   

Whitney (“Whit”) Bouck

    

 

             
               
   
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Age 58

 

Director since 2020

 

INDEPENDENT

 

Committees:

  Audit

  Nominating and

 Governance

         Ms. Bouck has served as a Managing Director for Insight Partners, a global private equity and venture capital firm, since January 2022. Ms. Bouck served as Chief Operating Officer of HelloSign, an e-signature and document workflow platform (acquired by Dropbox, Inc. in February 2019) from February 2016 to January 2022. Prior to joining HelloSign, Ms. Bouck held various senior leadership roles at Box, Inc., EMC, Sybase Inc. and Oracle Corporation. Ms. Bouck also serves on the boards of directors of Writer, Inc., Trengo B.V. and BlueOcean AI, Inc. She previously served on the boards of directors of Ekata (a Mastercard company) and the Association for Information and Image Management. Ms. Bouck earned a Bachelor of Arts from Claremont McKenna College.
              

 

Skills and Qualifications:

  Ms. Bouck has extensive technology experience.

 

  

 

Public Company Directorships:

  None

 

             

 

 

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Scott Miller

    

 

             
               
   
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Age 63

 

Director since 2006

 

INDEPENDENT

 

Committees:

  Compensation

 and Benefits

        

Mr. Miller co-founded Scott’s Add-ins in October 2018 and currently serves as its CEO.

 

Mr. Miller was the founder and Chief Executive Officer of the Treadstone Group, an enterprise resource planning product maker, before it was acquired by Exact Software in May 2004. He currently chairs the board of directors of NaviStone, Inc., a SaaS marketing technology company, is chairman of Runn.io, a resource management SaaS company, and serves on the board of La Soupe, Inc., a non-profit organization that transforms perishable foods for the food insecure. Mr. Miller received a Bachelor of Science in Accountancy from Miami University.

              

 

Skills and Qualifications:

  Mr. Miller is a director and investor in the technology industry, with emphasis in SaaS, and is an original investor in the Company.

  Mr. Miller brings extensive technology experience to the Board and previously led the Board’s oversight of our Information Security Council.

 

  

 

Public Company Directorships:

  None

 

             
             
   

Jason Wright

    

 

             
               
   
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Age 52

 

Director since 2018

 

Committees:

  None

         Mr. Wright is an Equity Partner in the Tech team at Apax Partners, where he focuses primarily on investments in enterprise software and technology-enabled services. Prior to joining Apax Partners in 2000, Mr. Wright served in a variety of roles at GE Capital, including principal investing on behalf of GE Ventures. He previously worked at Accenture, designing and implementing systems for the financial services and pharmaceutical industries. Mr. Wright serves on the boards of directors of several privately-held technology companies, including Bonterra, ECi Software Solutions, Inc., IBS Software, TIVIT, and EcoOnline. He is a member of the Wharton Graduate Executive Board, a Trustee of the Apax Foundation and Chairman Emeritus and a current board member of the Opportunity Network, an education-focused charity in New York City. Mr. Wright received a Bachelor of Arts in Economics from Tufts University and a Master of Business Administration in Finance from the Wharton School of the University of Pennsylvania.
              

 

Skills and Qualifications:

  Mr. Wright started his career as an early-stage venture capitalist and brings extensive technology and finance industry experience to the Board.

  

 

Current Public Company Directorships:

  Verint Systems Inc. (Nasdaq: VRNT)

 

Past Public Company Directorships:

  RealPage, Inc.

  Duck Creek Technologies, Inc.
(Nasdaq: DCT)

             

 

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Continuing Directors Whose Terms Expire in 2026

 

   

Kathleen (“Katie”) Burke

    

 

             
               
   
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Age 43

 

Director since 2020

 

INDEPENDENT

 

Committees:

  Compensation

 and Benefits (Chair)

  Nominating

 and Governance

 

        

Ms. Burke served as the Chief People Officer at HubSpot, Inc., a customer relationship management company recognized globally for its culture, from January 2017 until April 2024. Under her leadership, HubSpot was named the #1 Best Place to Work by Glassdoor and has been recognized globally as an innovator in culture and employee engagement. Ms. Burke joined HubSpot in December 2012 and held several positions before serving as Chief People Officer, including Vice President of Culture and Experience and Director for Talent and Culture.

 

Ms. Burke received a Bachelor of Arts in American Studies from Bates College and a Master of Business Administration from the Massachusetts Institute of Technology Sloan School of Management.

              

 

Skills and Qualifications:

  Ms. Burke brings extensive experience in human capital management (“HCM”), as well as B2B and SaaS industry experience, to the Board.

 

  

 

Public Company Directorships:

  None

 

             

 

   

Steven (“Steve”) Collins

    

 

             
               
   
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Age 59

 

Director since 2019

 

INDEPENDENT

 

Committees:

  Audit (Chair)

  Compensation

 and Benefits

 

         Mr. Collins retired as Executive Vice President and Chief Financial Officer of ExactTarget, Inc., a provider of digital marketing automation and analytics software and services (acquired by Salesforce in 2013), a position which he held from July 2011 to February 2014. Prior to that, from 2003 through 2011, Mr. Collins held various senior management positions at NAVTEQ Corporation, a digital mapping company, including as its Senior Vice President and Chief Financial Officer, Senior Vice President of Finance & Accounting, and Vice President of Finance. Mr. Collins earned a Bachelor of Science from Iowa State University and a Master of Business Administration from the Wharton School of the University of Pennsylvania
              

 

Skills and Qualifications:

  Mr. Collins brings extensive technology and finance experience at both private and public companies to the Board.

 

  

 

Current Public Company Directorships:

  nCino, Inc. (Nasdaq: NCNO)

  Sprout Social, Inc. (Nasdaq: SPT)

 

Past Public Company Directorships:

  Instructure Holdings, Inc. (NYSE: INST)

  MuleSoft, Inc. (NYSE: MULE)

  Shopify, Inc. (NYSE: SHOP)

             
             

 

8 2024 Proxy Statement   LOGO  


   

Jeremy Rishel

    

 

             
               
   
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Age 51

 

Director since 2022

 

INDEPENDENT

 

Committees:

  Audit

 

         Mr. Rishel has served as the Chief Technology Officer at SoFi Technologies, Inc. (Nasdaq: SOFI), a digital personal finance company, since June 2022, where he also serves as the Head of Engineering, Product and Design, overseeing SoFi’s technology strategy and architecture. From April 2019 to June 2022, Mr. Rishel served as the Special Vice President of Engineering and in various other roles at Splunk, a provider of cybersecurity and digital observability solutions. Prior to joining Splunk, he was the Vice President of Engineering at DoorDash, an online food ordering and delivery platform, from October 2017 to April 2018. He also served as Vice President of Engineering at Twitter, a social media company, from February 2013 to June 2017. Mr. Rishel received a Bachelor of Arts in computer science and philosophy from the Massachusetts Institute of Technology and a Master of Business Administration from MIT’s Sloan School of Management.
              

 

Skills and Qualifications:

  Mr. Rishel has extensive experience in the fintech and software-as-a-service industries.

  Mr. Rishel has technical expertise in cybersecurity.

 

  

 

Public Company Directorships:

  None

 

             

Independent Status

The listing rules of the Nasdaq Global Market (“NASDAQ”) require that, subject to specified exceptions, such as those described below under “—Controlled Company Status,” each member of a listed company’s audit committee, compensation committee and nominations committee be independent and that audit committee members also satisfy the heightened independence criteria set forth in Rule 10A-3 under the Exchange Act.

The Board has determined that neither Ms. Armstrong, nor any of the following directors (nor any of his or her family members) has a relationship with the Company which, in its opinion, would interfere with her or his exercise of independent judgment in carrying out the responsibilities of a director of the Company, and therefore, determined that Ms. Armstrong and each of the following directors qualifies as an independent director in accordance with NASDAQ’s listing rules: Whit Bouck, Katie Burke, Steve Collins, Jonathan Corr, Scott Miller and Jeremy Rishel. In addition, the Board has determined that each of Ms. Bouck and Messrs. Collins, Corr and Rishel met the heightened independence requirements for audit committee membership as set forth in Rule 10A-3 under the Exchange Act and the applicable listing rules of NASDAQ. In making these determinations, the Board considered the relationships (if any) that each director (and any of his or her family members) has with the Company and such other facts and circumstances that the Board deemed relevant in making a determination of independence, including beneficial ownership of our common stock.

Controlled Company Status

The Apax Funds, through their control of Pride Aggregator, own a majority of our outstanding common stock. (See “Security Ownership of Certain Beneficial Owners and Management” below.) As a result, we are a “controlled company.” Under NASDAQ listing rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with any of the following NASDAQ corporate governance rules required of newly public companies within one year of the date of listing:

 

   

to have a board that is composed of a majority of “independent directors”, as defined under the listing rules of the NASDAQ;

 

   

to have a compensation committee that is composed entirely of independent directors; and

 

   

to have a nominations committee that is composed entirely of independent directors.

From time to time, we may rely on certain of these exemptions. Although a majority of the Board is currently composed of independent directors, neither the Compensation and Benefits Committee, nor the Nominating and Governance Committee, consists entirely of independent directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the NASDAQ corporate governance requirements.

 

 

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Board Meetings and Committees

For our fiscal year ended June 30, 2024 (“fiscal year 2024”), the Board held six meetings. The Board currently has three standing committees: the Audit Committee, the Compensation and Benefits Committee and the Nominating and Governance Committee. During fiscal year 2024, the Audit Committee met four times, the Compensation and Benefits Committee met four times and the Nominating and Governance Committee met three times. Directors are expected to attend the annual meetings of our stockholders and all or substantially all of the Board meetings and meetings of committees on which they serve. Each director attended at least 75% of the meetings of the Board and the Board committees on which she or he served during fiscal year 2024. Three directors attended the 2023 annual meeting of our stockholders.

The current composition, duties and responsibilities of the Audit, Compensation and Benefits, and Nominating and Governance Committees are as set forth below. In the future, the Board may establish other committees, as it deems appropriate, to assist it with its responsibilities.

 

Board Member

   Audit
Committee
   Compensation
and Benefits
Committee
   Nominating
and
Governance
Committee

Whit Bouck

   X     

 

   X

Katie Burke

    

 

   X (Chair)    X

Steve Collins

   X (Chair)    X     

 

Jonathan Corr

   X     

 

   X (Chair)

Scott Miller

    

 

   X     

 

Jeremy Rishel

   X     

 

    

 

Raul Villar, Jr.

    

 

    

 

    

 

Jason Wright

    

 

    

 

    

 

Audit Committee

The Audit Committee’s responsibilities include:

 

   

appointing, approving the compensation of, and assessing the qualifications, performance and independence of our independent registered public accounting firm;

 

   

pre-approving audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;

 

   

reviewing our policies on risk assessment and risk management;

 

   

reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;

 

   

reviewing the adequacy of our internal control over financial reporting;

 

   

establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;

 

   

recommending, based upon the Audit Committee’s review and discussions with management and the independent registered public accounting firm, whether our audited financial statements should be included in our Annual Report on Form 10-K;

 

   

monitoring our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;

 

   

preparing the Audit Committee report required by the rules of the Securities and Exchange Commission (“SEC”) to be included in our annual proxy statement;

 

   

reviewing all related party transactions for potential conflict of interest situations and approving all such transactions; and

 

   

reviewing and discussing with management and our independent registered public accounting firm our earnings releases and scripts.

 

 

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The Board has affirmatively determined that each of Ms. Bouck and Messrs. Collins, Corr and Rishel meets the definition of “independent director” for purposes of serving on an audit committee under Rule 10A-3 of the Exchange Act and the applicable NASDAQ listing rules. In addition, the Board has determined that each of Messrs. Collins and Corr qualifies as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K. The written charter of the Audit Committee may be found by visiting the “Governance—Documents and Charters” section of our investor relations website at https://investors.paycor.com.

Compensation and Benefits Committee

The Compensation and Benefits Committee’s responsibilities include:

 

   

reviewing and approving the corporate goals and objectives relevant to the compensation of our Chief Executive Officer;

 

   

evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives, and determining and approving the compensation of our Chief Executive Officer;

 

   

reviewing and approving the compensation of our other executive officers;

 

   

administering our incentive compensation plans and any other compensation plans to which the Board has delegated authority to the Compensation and Benefits Committee;

 

   

reviewing and approving our overall executive compensation philosophy and objectives;

 

   

annually reviewing, in conjunction with the Board, succession plans for our Chief Executive Officer, other executive officers and other positions deemed critical to the Company’s performance;

 

   

reviewing our company-wide compensation and benefit practices, policies and programs to ensure they do not encourage unnecessary or excessive risk taking, and annually assessing whether any risks arising from such practices, policies and programs are reasonably likely to have a material adverse effect on the Company;

 

   

administering our compensation recovery (“clawback”) policy;

 

   

monitoring compliance with stock ownership guidelines applicable to our executive officers and directors;

 

   

reviewing and discussing with management the Compensation Discussion & Analysis and related executive compensation disclosures included in our annual proxy statement;

 

   

annually reviewing and reassessing the adequacy of the Compensation and Benefits Committee’s charter;

 

   

appointing, compensating and overseeing the work of any compensation consultant, legal counsel or other advisor retained by the Compensation and Benefits Committee; and

 

   

assessing the independence of any compensation consultant, legal counsel or other advisor retained by the Compensation and Benefits Committee or management in accordance with the requirements of the NASDAQ listing rules.

The Board has adopted a written charter for the Compensation and Benefits Committee, which may be found by visiting the “Governance—Documents and Charters” section of our investor relations website at https://investors.paycor.com.

Nominating and Governance Committee

The Nominating and Governance Committee’s responsibilities include (subject, in each case as applicable, to the rights of the Apax Funds under the Director Nomination Agreement as described under “—Director Nomination Agreement” above):

 

   

developing, and recommending to the Board for its approval, criteria to be considered in selecting nominees for director;

 

   

identifying and recommending individuals qualified to become members of the Board;

 

   

developing and recommending to the Board approval standards for determining whether a director is independent;

 

   

reviewing the size of the Board and ensuring that qualified director candidates with a diversity of gender, ethnicity and tenure are included in each pool of candidates from which nominees for director are chosen;

 

 

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reviewing the Company’s policies, programs and initiatives with respect to its Environmental, Social and Governance (“ESG”) and sustainability matters, including the Company’s Diversity, Equity & Inclusion Policy, and providing guidance to the Board on such matters;

 

   

considering candidates for director recommended by the Company’s stockholders;

 

   

reviewing any stockholder proposals and recommending Board responses pursuant to Rule 14a-8 of the Exchange Act;

 

   

overseeing engagement with stockholders and proxy advisory firms and reviewing proxy advisory firm policies and voting recommendations;

 

   

reviewing the Board’s leadership structure and recommending changes to the Board as appropriate;

 

   

reviewing and recommending to the Board the sizes, structure and compositions of the committees of the Board;

 

   

renewing, proposing changes to the Board or developing, as needed, corporate governance policies;

 

   

reviewing and discussing with management disclosure of the Company’s corporate governance practices proposed to be included in the Company’s annual proxy statement;

 

   

reviewing emerging corporate governance trends and practices and recommending changes to the Company’s corporate governance practices to the Board;

 

   

developing and recommending to the Board a succession plan for the chief executive officer; and

 

   

developing, subject to approval by the Board, a process for an annual evaluation of the Board and its committees and overseeing the conduct of this annual evaluation.

The Board has adopted a written charter for the Nominating and Governance Committee, which may be found by visiting the “Governance—Documents and Charters” section of our investor website at https://investors.paycor.com.

Board Leadership Structure

The Board believes that the mix of experienced independent directors, as well as the director affiliated with our controlling stockholder and our Chief Executive Officer, that currently comprise the Board, together with the structure and composition of the committees of the Board, provides strong overall oversight and strategic direction for the Company.

Chair of the Board

Our Corporate Governance Guidelines provide that the offices of Chair of the Board and Chief Executive Officer may be at times combined and at times separated, giving the Board discretion in light of prevailing circumstances. Currently, the positions of Chair of the Board and Chief Executive Officer are held by separate persons. The Board believes this current leadership structure is appropriate for the Company and its stockholders as it allows our Chief Executive Officer to devote more attention to the day-to-day leadership and performance of the Company, with the Chair’s responsibility to, among other things, provide strategic guidance to our Chief Executive Officer.

The combination or separation of these offices is a matter that is considered periodically by the Board as part of the Company’s succession planning process, based on all of the then-relevant facts and circumstances. Accordingly, the Board may make changes to our leadership structure in the future as it deems appropriate and in the best interests of the Company and its stockholders.

Our Bylaws provide that for so long as the Apax Funds beneficially own in the aggregate (directly or indirectly) at least 30% or more of our Voting Stock, the majority of the directors nominated or designated for nomination by the Apax Funds have the right to designate the Chair of the Board. Accordingly, based on the percentage of our Voting Stock beneficially owned by Pride Aggregator (see “Security Ownership of Certain Beneficial Owners and Management” below), which is controlled by the Apax Funds, the Apax Funds have the effective right to designate the Chair of the Board under our Bylaws.

Mr. Wright has served as Chair of the Board since July 2021.

Risk Oversight

The Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, improve long-term organizational performance and enhance stockholder value. A fundamental part of risk management is not only understanding the most significant risks a company faces and what steps

 

 

12 2024 Proxy Statement   LOGO  


management is taking to manage those risks, but also understanding what level of risk is appropriate for a given company. The involvement of the full Board in reviewing our business is an integral aspect of the Board’s assessment of our risk profile and its determination of what constitutes an appropriate or acceptable level of risk.
The Board has overall responsibility for risk oversight, and management provides the Board periodic reports on our compliance programs, including data privacy. While the full Board is committed to the prevention, timely detection, and mitigation of the effects of cybersecurity threats or incidents to the Company, it has delegated oversight of certain risks to its committees. The Audit Committee monitors our major financial and security risk exposures, and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. The Compensation and Benefits Committee oversees the design and implementation of our compensation policies and programs and monitors the incentives created by these policies and programs to ensure they do not encourage unnecessary or excessive risk taking by our executive officers and other employees. In addition, the Nominating and Governance Committee oversees our major corporate governance risks. We are committed to ensuring the Board and its committees are consistently updated on threats to our business and receive consistent updates on risk mitigation processes.
In connection with its reviews of the operations of our business and through ongoing strategic planning with management, the full Board addresses the primary risks associated with our business. The Board appreciates the evolving nature of our business and industry and is actively involved with monitoring new threats and risks as they emerge. For example, during the
COVID-19
pandemic, the Board closely monitored the evolution of the
COVID-19
pandemic, including its impacts on our customers and our operations, and the long-term effects the pandemic may have on general macroeconomic conditions.
At periodic meetings of the Board and its committees, management reports to and seeks guidance from the Board and its committees with respect to the most significant risks that could affect our business, such as risks associated with our operations, technology and competition, cybersecurity and privacy risks, and legal, financial, tax and audit related risks.
Code of Ethics
We have adopted a Code of Ethics that applies to all our directors, officers and employees, including those officers responsible for financial reporting. Our Code of Ethics is posted under the “Governance—Documents and Charters” section of our Investor Relations website at
https://investors.paycor.com
. We intend to disclose any amendments to the Code of Ethics, or any waivers by the Board of its requirements for any of our directors or executive officers, on our website to the extent required by SEC and/or NASDAQ listing rules.
Anti-Hedging and Anti-Pledging Policy
Pursuant to our Insider Trading Policy, we prohibit our directors, executive officers and other employees from engaging in hedging or monetization transactions, including the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Additionally, our directors, officers and other employees are prohibited from holding our securities in a margin account or otherwise pledging our securities as collateral for a loan.
 
 
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2024 Proxy Statement 
13


Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation and Benefits Committee who served during fiscal year 2024 is or was an officer or employee of Paycor, nor did any such member have any relationship with Paycor pursuant to which disclosure would be required under applicable SEC rules pertaining to the disclosure of transactions with related persons.

No interlocking relationships exist between the members of the Board or the Compensation and Benefits Committee and the board or compensation committee of any other company.

Communications by Stockholders with the Board

Stockholders may contact an individual director, the Board as a group, or a specified Board committee or group, including the independent directors as a group, by sending regular mail to:

Paycor HCM, Inc.

4811 Montgomery Road

Cincinnati, OH 45212

Attn: Board of Directors

c/o Chief Legal Officer and Secretary

Each communication should specify which director or directors the communication is addressed to, as well as the general topic of the communication. Paycor will receive the communications and process them before forwarding them to the addressee. Paycor may also refer communications to other departments within Paycor. Paycor generally will not forward to the directors a communication that is primarily commercial in nature, relates to an improper or irrelevant topic, or requests general information regarding Paycor.

 

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ENVIRONMENTAL, SOCIAL AND GOVERNANCE FRAMEWORK

 

 

Since our founding over 30 years ago, corporate social responsibility has been a key business tenet. We recognize the importance of ESG issues and remain committed to extending the consideration of ESG factors in connection with our business operations and investment practices.

Governance

Paycor has an ESG Committee that consists of a cross-functional group of leaders and employees from departments including information technology, finance, investor relations, human resources, legal and facilities. This committee assists the Board and executive management team in developing our ESG strategy, identifying ESG risks and opportunities, including regulatory changes and compliance, setting initiatives and tracking our performance. The Audit Committee assists the Board with ESG oversight from a reporting and procedural perspective, and the Nominating and Governance Committee assists the Board with ESG oversight with respect to strategy, communication and stockholder engagement.

Ethics & Compliance

Paycor has a culture of integrity, honesty and ethical behavior. Paycor maintains a Code of Ethics that applies to all of its employees, officers, and directors, with an additional policy for senior officers responsible for financial reporting.

Every Paycor associate completes comprehensive training when hired and annually thereafter. Our training includes our Code of Ethics, anti-bribery, discrimination harassment prevention, privacy, security, fraud, and related internal controls.

As required by our Whistleblower Policy, employees can confidentially and anonymously submit concerns to our third-party Associate Voice Line without fear of reprisal for any matters reported in good faith. Our third-party Associate Voice Line is managed by our internal audit department, which reports to the Audit Committee.

Our Supplier Conduct Guidelines are designed to help ensure that our partners adhere to the same high standards of integrity and ethics. In addition, many of our solutions are designed to assist clients with their compliance to certain U.S. federal, state and local laws and regulations that apply to them.

Our Related Party Transactions Policy requires the Audit Committee to review and approve all related party transactions. Pursuant to this policy, the Audit Committee may approve only those transactions that the Audit Committee, in its business judgment, determined are in, or are not inconsistent with, our best interests and those of our stockholders. In addition, under our Code of Ethics, our employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.

Data Governance

Paycor is dedicated to protecting the privacy and security of our clients’ information and has implemented mechanisms necessary to do so across our organization. We align to internationally recognized frameworks that demonstrate this commitment, including the AICPA’s SOC 1 Type 2, SOC 2 Type 2, the EU General Data Protection Regulation (GDPR), and the Financial Crimes Enforcement Network (FinCEN).

Our platform is designed with security as a top consideration and employs a defense-in-depth strategy through administrative, physical, and technical safeguards to ensure the protection, confidentiality, and integrity of our customers’ data. Paycor is certified by a voluntary accreditation program from the National Automated Clearing House Association, which governs the United States’ automated clearing house network and payment system. Paycor undergoes regular assessments of our processes and controls as part of our annual SSAE 18 audit for SOC 1 and SOC 2 by an independent public accounting firm. We continuously monitor our network and endpoint-based security threats along with antivirus software to guard against trojans, worms, viruses, and other malware.

Paycor has a robust Business Continuity Policy and Plan in place with dedicated staff focused on inventorying critical processes, technologies and people. Business Impact Analyses are performed on an ongoing basis to understand the process criticality, helping drive restoration prioritization as well as identifying key areas where workarounds during a continuity event may be required. We also have an Incident Response Plan aligned to the National Institute of Standards and Technology (NIST) guidelines. We have tested disaster recovery processes and technologies and regularly conduct tabletop business continuity exercises.

 

 

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Social

People are at the heart of everything we do. As we grow, our company culture is anchored in the guiding principles that led us here. We’re an inclusive and flexible organization that empowers associates to live their lives and be who they are at work. We have fun and give back. We support associates with personally meaningful career paths and open, honest communication. We’re a fast-paced company with an insatiable appetite to outperform and overdeliver. For four consecutive years, Energage has named Paycor a Top Workplace USA based solely on feedback from our associates. Paycor also received the 2023 Top Workplaces Culture Excellence award for DE&I Practices for the third consecutive year and was named in the Top Ten for DE&I Practices in the U.S. by Top Workplaces. (As of the date of this Proxy Statement, the results of the Energage Top Workplaces for Diversity, Equity and Inclusion Practices survey have not yet been announced for 2024.)

Talent Acquisition and Development

Paycor strives to provide exceptional benefits, performance rewards, and career development opportunities to attract and retain top talent. We have intentionally expanded our leave support programs, associate wellbeing opportunities, and voluntary benefit offerings to align with our core values, diversity, equity and inclusion commitments, and the interests of our employees. For example, we recently expanded our Employee Assistance Program to include our global workforce and added a pet insurance benefit. Additionally, we provide a one-time, new hire equity grant that vests over time, an opportunity to participate in our Employee Stock Purchase Program, and a highly competitive 401(k) program. These initiatives aim to invest in our associates’ financial future, enhance associate engagement, and align our associates’ interests with our stockholders’ objectives.

Paycor has a dedicated Enterprise Learning and Development team and Employee Experience team focused on delivering skilling opportunities for all associates through an ecosystem of classes, live events, workshops, and leadership program cohorts throughout the year. Associates have ready access to technical, leadership, professional, and health/wellness learning and development opportunities. Tuition, certification obtainment and renewals, and conference reimbursement are available pursuant to our enterprise strategy for delivering a comprehensive ecosystem where associates develop their skills, personal and professional wellness, and industry expertise during their associate experience at Paycor. Support for specific demographics is enhanced through programs designed to offer resources and allyship for women, veterans, people within minority or protected status, and people actively transitioning into new careers.

Diversity, Equity & Inclusion

DE&I is a priority at Paycor, and we strive to create a culture of inclusion and belonging for all. For us, that means committing to strategic education, transparency, equity and equality, and purpose for the work. Paycor established a formal Diversity, Equity & Inclusion Policy in August 2021, which was updated and expanded in September 2022 and September 2023. Paycor has received the Top Workplaces Culture Excellence award for DE&I Practices for each of 2021, 2022, and 2023, and was named in the Top Ten for DE&I Practices in the United States by Top Workplaces. Results for 2024 have not yet been announced. We employ a dedicated leader of DE&I who works to create and execute our DE&I strategy and is responsible for enforcement of our Diversity, Equity & Inclusion Policy across our operations. Our Chief Executive Officer has also signed the CEO Action Pledge for Diversity & Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

Our DE&I strategy is guided by four pillars that outline the foundation of our action steps as they relate to the goals of the entire organization.

 

   

Strategic Education and Awareness

 

   

Transparency in our Data

 

   

Equity of Pay, Hiring and Treatment of Targeted Populations

 

   

Purpose and Perspective

We established enterprise-wide goals to increase the inclusion and belonging of and the number of associates and leaders from underrepresented groups and plan to continue to evolve these goals over time to improve diversity of thought across the organization. As of June 30, 2024, we had approximately 2,900 associates, with women representing 53% of our associates and 47% of our leaders (manager and above) and Black, Indigenous and People of Color representing 28% of our associates and 17% of our leaders (managers and above).

 

 

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We work to create a culture that supports and embraces the rich mosaic of diversity in our associates, customers and partners. We are passionate about encouraging individuality and trust in one another for a positive work environment. We regularly review our workforce’s compensation to help ensure everyone is paid equally for equal work and address any unexplained gaps. We incorporate our DE&I strategy and learning into associate onboarding and leader training, which also includes introducing anti-biased practices and education into our hiring manager compliance training, as our associates play a key role in fostering a culture of inclusion.

Additionally, our commitment to DE&I is reflected through our seven Employee Resource Groups (“ERGs”). We believe our ERGs create a community of inclusion and belonging and create a safe space for learning and dialogue around the celebrations and challenges that diverse communities face. Our ERGs are a vital part of our associate and business success. Each ERG has an executive sponsor and is supported by our DE&I team and senior leaders across the Company. This fiscal year, our DE&I team enhanced structural supports for our ERGs with succession planning of leadership and added a requirement that at least one of their objectives for the fiscal year align to Paycor’s strategic goals to ensure ERGs not only support our associates, but also the business.

Community Giving

Giving back to the communities in which we live and work is in our DNA. We empower our associates to make a difference in a way that we believe is meaningful to them. Paycor’s Community Partners program is a grassroots organization funded by associates who choose to give their own time and resources to serve non-profit organizations across the country. Additionally, our Culture Champions spearhead Paycor It Forward events, which provide associates the opportunity to put the power of the Paycor Community Impact Fund behind a cause they believe in while building team connection. The Paycor Community Impact Fund is a 501(c)(3) charitable investment account that provides project grants to philanthropic organizations associates care about nationwide.

Environment

Paycor is committed to responsible use of natural resources and reducing our consumption where feasible. We encourage our associates to work remotely, which limits our office footprint and associate commuting. Fiscal year 2023 Scope 1 and 2 emissions dropped 37% year-over-year primarily due to consolidation of our facilities as well as decreased energy usage at our facilities. We also have several company-wide green initiatives to reduce consumption of energy, water and waste and to recycle. As part of our supplier code of conduct, we seek to engage partners who share our sustainability goals.

 

 

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EXECUTIVE OFFICERS

 

 

Below is a list of the names, ages, positions, and a brief account of the business experience of the individuals who served as executive officers of Paycor as of June 30, 2024:

 

Name

  

Age

   Position

Raul Villar, Jr.

   56    Chief Executive Officer and Director

Adam Ante

   43    Chief Financial Officer

Ryan Bergstrom

   45    Chief Product & Technology Officer

Alice Geene

   52    Chief Legal Officer and Secretary

Charles (“Chuck”) Mueller

   54    Chief Revenue Officer

 

            
                
   
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Raul Villar, Jr. has served as our Chief Executive Officer since July 2019 and as member of the Board since January 2021. His biography can be found above under “Corporate Governance – Director Nominees To Serve For Three-Year Terms Expiring at the 2027 Annual Meeting”

                
               

 

            
                
   
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Adam Ante has served as our Chief Financial Officer since September 2019, previously serving as the Deputy Chief Financial Officer from February 2019 to September 2019, and the Senior Vice President of Financial Planning and Analysis and Corporate Development from April 2017 to February 2019. Prior to joining Paycor, Mr. Ante held various finance related senior leadership roles from October 2009 to March 2017 at Vantiv, a payment processor, previously a line of business within Fifth Third Bank, and now a division of FIS, Inc. Mr. Ante earned a Bachelor of Business Administration in Finance and International Business from the University of Cincinnati and a Master of Business Administration from Xavier University.

                
               

 

            
                
   
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Ryan Bergstrom has been with Paycor since February 2018. He currently serves as our Chief Product & Technology Officer, leading Paycor’s product and platform strategy for its HCM product suite, a role he has held since January 2024, and prior to that, served as our Chief Product Officer since joining the Company. Previously, Mr. Bergstrom served as Vice President, Product Management at Ultimate Software, a global HCM company, from August 2016 to January 2018. He has also held product development and leadership roles at Epicor, a business software company, and SPECTRUM, a leading internet provider. Mr. Bergstrom earned a Bachelor of Science with special attainments in commerce, business administration from Washington & Lee University.

                
               

 

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Alice Geene has served as our Chief Legal Officer and Secretary since October 2020. Ms. Geene was previously Chief Legal and People Officer at Rewards Network, a fintech company serving small and medium-sized businesses, from April 2018 to September 2020 and served as Senior Vice President of Corporate Affairs, General Counsel and Secretary from April 2014 to April 2018. She was General Counsel of Trustwave Holdings, Inc., a cybersecurity solutions company, from September 2012 to January 2014, and she held senior in-house legal roles at Orbitz Worldwide, Inc., a publicly traded online travel company, from February 2005 to August 2012. Ms. Geene earned a Bachelor of Arts from Harvard College, a Juris Doctor from Harvard Law School, and has over 20 years of technology industry experience.

                
               

 

            
                
   
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Charles (“Chuck”) Mueller has served as our Chief Revenue Officer, leading our Sales and Marketing teams, since February 2020. Mr. Mueller has thirty years of experience in the HCM industry. Previously, Mr. Mueller served as the Executive Vice President, Sales at Fleetcor, an S&P 500 company focused on digital payment solutions, from January 2019 to January 2020. Mr. Mueller also served in various senior sales roles at ADP, an S&P 500 HCM company, including General Manager for the Northeast Region, from June 1992 to January 2019. Mr. Mueller earned a Bachelor of Science from Georgia Southern University.

                
               

 

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

 

The purpose of this Compensation Discussion and Analysis is to provide information about the material elements of compensation that are paid, awarded to, or earned by, our named executive officers (who we collectively refer to as our “NEOs”), who consist of our principal executive officer, our principal financial officer, and our three other most highly compensated executive officers (other than our principal executive officer and principal financial officer) who were serving as executive officers at the end of fiscal year 2024. For fiscal year 2024, our NEOs and their positions were as follows:

 

Named Executive Officer

   Position

Raul Villar, Jr.

   Chief Executive Officer (“CEO”)

Adam Ante

   Chief Financial Officer

Ryan Bergstrom

   Chief Product & Technology Officer

Alice Geene

   Chief Legal Officer and Secretary

Charles (“Chuck”) Mueller

   Chief Revenue Officer

Executive Summary

Highlights of Fiscal Year 2024 Financial Performance and Strategic Accomplishments

Paycor celebrated many achievements in fiscal year 2024, including the following financial performance highlights:

 

   

Delivered total revenues of $655 million, increasing 19% year-over-year in spite of macroeconomic headwinds.

 

   

Increased adjusted operating income** 36% to $112 million, while simultaneously differentiating our service and solution.

 

   

Generated $40 million dollars of adjusted free cash flow** at 6% margins, an improvement of 430 basis points.

In addition, Paycor celebrated several strategic and operational milestones during fiscal year 2024, including:

 

   

Continued expansion of our modern HCM suite, increasing list PEPM (the amount Paycor charges per-employee-per-month) by $5 and achieving the high end of our $3-5 annual target.

 

   

Launched differentiated technology that powers people and performance, such as a generative AI Analytics Digital Assistant to deliver people-focused analytics in a conversational chat interface, Pay Benchmarking to provide market salary insights for competitive compensation strategies, and Labor Forecasting to empower leaders to right-size their labor costs to their operations.

 

   

Introduced and gained momentum in the Embedded HCM solution, tripling our indirect channel partners.

 

   

Earned Top Workplace USA award for the fourth consecutive year by Energage, reaffirming our dedication to fostering cultural best practices that not only enhance employee engagement, but also deliver tangible business results.

 

**

Adjusted operating income and adjusted free cash flow are financial measures. See the Appendix to this Proxy Statement for additional information and a reconciliation of (a) income (loss) from operations to adjusted operating income and (b) net cash provided by operating activities to adjusted free cash flow.

Highlights of Fiscal Year 2024 Compensation Decisions

Our Compensation and Benefits Committee took the following key actions with respect to our NEOs during fiscal year 2024:

 

   

Base Salary: Increased the base salary of each of our NEOs following our Compensation and Benefits Committee’s annual review, based on personal performance and the result of our peer group and market analyses, including an incremental mid-year increase for Mr. Bergstrom upon his promotion to Chief Product & Technology Officer (as further described under the section entitled “—Base Salary” below).

 

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Annual Cash Incentive Compensation: Consistent with fiscal year 2023, approved two financial performance metrics (i.e., total revenues and adjusted operating income margin) for the Company’s fiscal year 2024 annual cash incentive compensation program, as well as determined to maintain the annual target performance-based cash incentive compensation opportunities for our NEOs at their fiscal year 2023 levels (as further described under the section entitled “—Annual Cash Incentive Compensation” below).

 

   

Long-Term Equity-Based Incentive Compensation: Approved long-term equity-based incentive compensation for our NEOs, granted 25% in the form of time-based stock options (“Options”) and 75% in the form of time-based restricted stock units (“RSUs”) (as further described under the section entitled “—Long-Term Equity-Based Incentive Compensation” below).

Executive Compensation Practices

 

What We Do

   What We Do Not Do

  Engage an independent compensation consultant

 

  Maintain a clawback policy that is compliant with the applicable SEC and Nasdaq listing rules, which policy provides for the recoupment of excess incentive-based compensation received by our executive officers in the event of certain accounting restatements of our financial statements

 

  Align pay with performance and our stockholders’ long-term interests

 

  Include “double trigger” change-in-control vesting provisions for equity awards granted to our executive officers

 

  Maintain stock ownership guidelines for our executive officers

  

  Allow for the hedging or pledging of our equity securities

 

  Permit the repricing of stock options without approval by our stockholders

 

  Provide our executive officers with any excessive perquisites or excise tax gross-ups

 

  Utilize any compensation practices that involve excessive or unnecessary risk-taking

Compensation Philosophy and Objectives

We have strived to create an executive compensation program that balances short-term versus long-term payments and awards, cash payments versus equity awards and fixed versus variable payments and awards in ways that we believe are most appropriate to motivate our executive officers, including our NEOs. Our executive compensation program is designed to:

 

   

Attract and retain highly qualified executive officers critical to our success;

 

   

Encourage prudent risk taking and decision making, reinforcing heightened ethical standards;

 

   

Provide rewards for overall company performance, business unit performance and individual performance; and

 

   

Align financial rewards for our executive officers with the long-term results for our key stakeholders.

Principal Components of 2024 Executive Compensation Program

Our current executive compensation program, which is established by our Compensation and Benefits Committee, consists of the following components:

 

   

base salary;

 

   

annual cash incentive compensation linked to our overall performance;

 

   

grants of long-term equity-based incentive compensation, such as Options and RSUs;

 

   

other executive benefits and perquisites; and

 

   

specified post-employment compensation payments and benefits contained in employment agreements with certain of our NEOs, an executive severance plan and an executive change in control severance plan (as further described under the section entitled “—Potential Payments Upon Termination or Change in Control” below).

 

 

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We combine these components in order to formulate compensation packages that provide competitive pay, reward the achievement of financial, operational and strategic objectives and align the interests of our NEOs with those of our stockholders. Further detail on each of these components is provided in the table below.

 

Compensation Elements

   Form    Objectives and Basis
Base Salary    Cash   

  Designed to provide our NEOs with steady cash flow during the course of the applicable fiscal year that is not contingent on short-term variations in our corporate performance.

 

  Considerations include, but are not limited to, each NEO’s position, experience, skills, duties and responsibilities.

 

  Our Compensation and Benefits Committee determines market level compensation for base salaries based on each NEO’s experience in the industry with reference to the base salaries of similarly situated executives in other companies of similar size and stage of development operating in our industry.

Annual Cash Incentive Compensation    Cash   

  Encourage the NEOs to focus on short-term performance goals that serve as the basis for long-term performance and stockholder value creation.

 

  Based upon the achievement of performance metrics approved at the beginning of the fiscal year by the Compensation and Benefits Committee.

 

  Bonus amounts are determined by our Compensation and Benefits Committee based upon its assessment of individual performance and the Company’s actual performance against such pre-established performance metrics.

 

  Actual payout is based on a target percentage of base salary.

Long-term Equity-Based Incentive Compensation    Equity   

  Aligns the incentives of our NEOs with the interests of our stockholders and with our long-term corporate success.

 

  Enables us to attract, motivate, retain and adequately compensate executive talent.

 

  Provide our NEOs with a significant long-term interest in our success by rewarding the creation of stockholder value over time.

 

  Consists of a mix of Options and RSUs, which generally vest based on continued employment over three years.

Compensation Mix in Fiscal Year 2024

We utilize the particular elements of compensation described above because we believe that they provide a well-proportioned mix of secure compensation, retention value and at-risk compensation, which produces short-term and long-term performance incentives and rewards. By following this approach, we provide our NEOs with a measure of security in the minimum expected level of compensation, while motivating them to focus on achieving business metrics that will produce a high level of short-term and long-term performance for the Company and long-term value creation for our NEOs and stockholders, as well as reducing the risk of recruitment of top executive talent by competitors. The mix of metrics used for our annual performance-based cash incentive compensation and long-term equity-based incentive compensation programs likewise provide an appropriate balance between short-term financial performance and long-term financial and stock performance.

For our NEOs, the mix of compensation is weighted toward at-risk/variable pay (annual cash incentive compensation and long-term equity-based incentive compensation). Maintaining this pay mix results fundamentally in a “pay-for-performance” orientation for our NEOs, which is aligned with our stated compensation philosophy of providing compensation commensurate with performance.

 

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The following charts reflect the target total direct compensation pay mix for our CEO and, the average for our other NEOs for fiscal year 2024.

 

 

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Fiscal Year 2024 Compensation Determinations—What We Paid and Why

Base Salary

Each of our NEOs is paid a base salary commensurate with his or her position, experience, skills, duties and responsibilities. Base salary is also designed to provide our NEOs with steady cash flow during the course of the fiscal year that is not contingent on short-term variations in our corporate performance. Our Compensation and Benefits Committee determines market level compensation for base salaries based on our NEOs’ experience in the industry with reference to the base salaries of similarly situated executives in other companies of similar size and stage of development operating in our industry.

With these principles in mind, base salaries are reviewed on an annual basis in the first quarter of the applicable fiscal year by our Compensation and Benefits Committee, and may be adjusted from time to time based on the results of this review. For fiscal year 2024, our Compensation and Benefits Committee determined to increase the base salary for each of our NEOs. These base salary increases were awarded based on an evaluation of each NEO’s individual performance and an assessment of the base salary levels of the executives holding comparable positions at the companies inf our compensation peer group, as well as a broad competitive market analysis. Further, in the case of Mr. Bergstrom, his mid-year base salary increase was based on his assumption of additional duties as our Chief Product & Technology Officer.

The annualized base salaries paid to our NEOs in fiscal year 2023 and fiscal year 2024 are set forth in the chart below.

 

Named Executive Officer

   Fiscal Year 2023
Base Salary
($)
   Fiscal Year 2024
Base Salary
($)
   Percent
Increase
(%)

Raul Villar, Jr.

   585,000    610,000    4.3

Adam Ante

   400,000    430,000    7.5

Ryan Bergstrom(1)

   370,000    400,000    8.1

Alice Geene

   370,000    385,000    4.1

Chuck Mueller

   400,000    410,000    2.5

 

(1)

As of January 1, 2024, and up until the effective date of Mr. Bergstrom’s promotion to Chief Product & Technology Officer on January 22, 2024, Mr. Bergstrom’s annual base salary was $385,000. Effective as of January 22, 2024, Mr. Bergstrom’s annual base salary was increased to $400,000.

Annual Cash Incentive Compensation

Each of our NEOs is eligible to receive performance-based annual cash incentive compensation pursuant to the Company’s annual cash incentive compensation program for the applicable fiscal year, based upon the achievement of performance metrics approved at the beginning of the applicable fiscal year by our Compensation and Benefits Committee. Consistent with fiscal year 2023, the Company’s annual cash incentive compensation program for fiscal year 2024 consisted of performance metrics related to total revenues and adjusted operating income margin. Such annual cash bonuses encourage the NEOs to focus on our short-term performance goals that serve as the basis for long-term performance and sustainable stockholder value creation, and are intended to reward achievement of those goals.

 

 

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When determining the payout of the NEOs’ annual cash bonuses, performance against each performance objective is weighted, with total revenues weighted at 75% and adjusted operating income margin weighted at 25%. If attainment of a performance objective did not meet the threshold level for that objective, no payment would be earned for that objective. Achievement of an objective at the threshold level resulted in a payout at 50% of target for that objective, and achievement at the maximum level resulted in a payout at 200% of the target for that objective. Performance between levels was extrapolated on a straight-line basis. In order to achieve the maximum level in adjusted operating income margin, the total revenues threshold level must first be met.

 

 

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For fiscal year 2024, our NEOs’ annual cash bonuses were determined by our Compensation and Benefits Committee based on its assessment of the Company’s actual performance against the pre-established performance objectives described above and the individual performance of each of our NEOs. The actual payout of the NEOs’ annual cash bonuses was based on a target percentage of the applicable NEO’s base salary. The target bonus percentages for Messrs. Villar, Ante and Mueller are fixed and set forth in their applicable employment agreement. While our Compensation and Benefits Committee may determine, in its sole discretion, to adjust the payout of an NEO’s annual bonus upwards or downwards based on such NEO’s individual performance during the applicable fiscal year, the Compensation and Benefits Committee did not exercise such discretion in fiscal year 2024.

The performance objectives established by our Compensation and Benefits Committee for fiscal year 2024 and our corresponding actual performance with respect to each objective are set forth in the following table:

 

Performance Goal

   Weighting   Minimum
Threshold
  Target
Performance
  Maximum   Actual
Result
  Payout
Percentage

Total Revenues

       75 %     $ 640MM     $ 674MM     $ 708MM     $ 655MM       54 %

Adjusted Operating Income Margin

       25 %       15.5 %       16.3 %       17.1 %       17.1 %       48 %
 

 

      

 

 

 

 

 

     

 

 

 

 

 

     

 

 

 

 

 

      Total Payout Percentage       102 %

In August 2023, our Compensation and Benefits Committee established the target percentage amounts for the annual cash bonuses for fiscal year 2024 for each of our NEOs (taking into account their employment agreement, if applicable), as set forth in the following chart. This chart also sets forth the actual payouts for the NEOs’ annual cash bonuses for fiscal year 2024 based on our Compensation and Benefits Committee’s determination of the achievement of the applicable performance objectives.

 

      Fiscal Year 2024
Annual Base
Salary
($)
  

Fiscal Year 2024
Annual Bonus Target
Percentage

(%)

   Fiscal Year 2024
Target Annual
Bonus Amount
($)
   Fiscal Year 2024
Payout
Percentage
(%)
   Fiscal Year 2024
Actual Bonus
Payout
($)

Raul Villar, Jr.

       610,000        100        610,000        102        622,200

Adam Ante

       430,000        80        344,000        102        350,880

Ryan Bergstrom

       400,000        60        240,000        102        244,800

Alice Geene

       385,000        60        231,000        102        235,620

Chuck Mueller

       410,000        100        410,000        102        418,200

Long-Term Equity-Based Incentive Compensation

We believe that long-term equity-based incentive compensation is an important component of our executive compensation program and that providing a significant portion of our NEOs’ total compensation package in equity-based compensation aligns the incentives of our NEOs with the interests of our stockholders and with our long-term corporate success. Additionally, we believe that long-term equity-based incentive compensation awards enable us to attract, motivate, retain and adequately compensate executive talent. We believe equity awards provide our NEOs with a significant long-term interest in our success by rewarding the creation of sustainable stockholder value over time.

The Company adopted the Paycor HCM, Inc. 2021 Omnibus Incentive Plan, as it may be amended from time to time (the “2021 Plan”), to enhance the profitability and value of the Company for the benefit of our stockholders by enabling the

 

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Company to offer employees, advisors, consultants and non-employee directors of the Company and its affiliates (including the NEOs) cash and stock-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and our stockholders. Under the 2021 Plan, the Company may award Options, stock appreciation rights, restricted stock awards, performance awards, other stock-based awards (which includes RSUs), or other cash-based awards.

For fiscal year 2024, we granted each of our NEOs an annual award of Options and RSUs under the 2021 Plan in October 2023. The Options generally vest 33% on the first anniversary of the applicable grant date, with the remainder vesting in 24 monthly installments thereafter (fully vesting on the third anniversary of the applicable grant date), subject to continued employment through the applicable vesting date. The RSUs generally vest 33% on the first anniversary of the applicable grant date, with the remainder vesting in eight quarterly installments thereafter (fully vesting on the third anniversary of the applicable grant date), subject to continued employment through the applicable vesting date. Also, Mr. Bergstrom received an additional award of both Options and RSUs in April 2024 in connection with his promotion to Chief Product & Technology Officer, with such awards having the same vesting terms as his applicable annual award.

The table below sets forth the number and the target dollar value of the Options and RSUs granted to the NEOs during fiscal year 2024. The values of such Options and RSUs granted were based on personal performance and the results of our peer group and market analyses. Such analyses also assisted the Compensation and Benefits Committee in determining the mix between these two equity vehicles for each NEO.

 

Named Executive Officer

   Number of Options
(#)
   Number of RSUs
(#)
  

Total
($)(1)

Raul Villar, Jr.

       218,937        312,090        9,500,000 

Adam Ante

       92,184        131,407        4,000,000 

Ryan Bergstrom(2)

       76,850        109,136        3,200,000 

Alice Geene

       46,092        65,704        2,000,000 

Chuck Mueller

       92,184        131,407        4,000,000 

 

(1)

The values in this column reflect the Option and RSU target amounts approved by the Compensation and Benefits Committee. Amounts reported in the “Summary Compensation Table” below reflect the aggregate grant date fair value of such awards, as computed in accordance with ASC 718 (as defined below).

 

(2)

Mr. Bergstrom received an annual award of 57,615 Options and 82,129 RSUs in October 2023. In addition, Mr. Bergstrom received a promotional award of 19,235 Options and 27,007 RSUs in April 2024, in connection with his promotion to Chief Product & Technology Officer.

Fiscal Year 2025 – Performance-Based Restricted Stock Units (PSUs)

In August 2024, our Compensation and Benefits Committee determined it was appropriate and in the best interests of the Company that, commencing with fiscal year 2025, the annual equity awards to be granted to each of our NEOs will be granted as follows: (i) for our CEO, 50% in the form of RSUs and 50% in the form of performance-based restricted stock units (“PSUs”) and (ii) for all of our other NEOs, 75% in the form of RSUs and 25% in the form of PSUs.

The PSUs to be granted to our NEOs in fiscal year 2025 will be subject to both time-based and performance-based vesting. The PSUs will be eligible to performance-vest between 50% to 200% of the target number of PSUs granted, based on the achievement of performance goals, each as measured over a one-year performance period commencing on the applicable date of grant, based on the Company’s revenue and net retention performance. One-third of the PSUs that performance-vest at the end of such one-year performance period will be deemed fully vested, subject to continued employment through such date, and the remaining performance-vested PSUs will be subject to continued time-vesting, with such performance-vested PSUs time-vesting quarterly over the two-year period following the performance period, subject to continued employment through each such time-vesting date.

Severance and Change in Control Arrangements

We have entered into employment agreements with Messrs. Villar, Jr., Ante and Mueller, each of which provide for specified severance payments and benefits in the event of a qualifying termination of employment. Those NEOs who have not entered into an employment agreement with us (Ms. Geene and Mr. Bergstrom) participate in the Company’s Executive Severance Plan (the “Executive Severance Plan”), which provides for certain severance payments and benefits in the event of a qualifying termination of employment.

In addition, we believe that a strong, experienced management team is essential to the best interests of the Company and our stockholders. We recognize that the possibility of a change in control of the Company could arise and that such a possibility could result in the departure or distraction of members of the management team to the detriment of the

 

 

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Company and our stockholders. As such, we maintain the Executive Change in Control Severance Plan (the “Executive CiC Severance Plan”), which each of our NEOs participate in, and which provides for certain increased severance payments and benefits in the event of a qualifying termination of employment within a specified period following a “change in control” of the Company (as defined in the 2021 Plan).

The Executive Severance Plan, the Executive CiC Severance Plan and the severance payments and benefits provided under certain of the NEOs’ employment agreements are further described under the section entitled “—Potential Payments Upon Termination or Change in Control” below.

Additionally, we do not provide for excise tax gross-ups to our executive officers and do not expect to do so in the future.

Retirement and Other Benefits

We provide the following benefits to our NEOs on the same basis as other eligible employees: health insurance, vacation, personal holidays and sick days, life insurance and supplemental life insurance, short-term and long-term disability; and a 401(k) plan with matching contributions. We also provide communication allowances to certain of our NEOs. In addition, the Company covers all costs (or provides reimbursements) for travel and accommodations incurred by our NEOs in connection with their attendance at Company-sponsored employee incentive trips, which amounts are disclosed in the “Summary Compensation Table” below.

We believe these benefits are generally consistent with those offered by other companies and specifically with those companies with which we compete for employees.

Setting Our Executives’ Compensation

Role of Compensation and Benefits Committee

The Compensation and Benefits Committee determines and approves the compensation of our NEOs. Annually, the Compensation and Benefits Committee evaluates the performance of our CEO based on the corporate and/or individual goals relevant to the CEO’s compensation that it establishes at the start of the respective fiscal year. Our CEO does not participate in, nor is the CEO present during, the CEO’s own performance evaluation undertaken by the Compensation and Benefits Committee, and does not recommend the CEO’s own compensation (other than completing a self-assessment of performance achievements against the goals previously established by the Compensation and Benefits Committee). For our NEOs other than our CEO, the Compensation and Benefits Committee receives annual performance assessments and compensation recommendations from our CEO. None of the other NEOs plays any role in decisions affecting their own compensation, except for discussing their annual, individual performance goals (and their self-assessment of their respective achievement of those goals) with our CEO.

Role of Compensation Consultant

The Compensation and Benefits Committee’s charter gives it the authority to retain and approve fees and other terms of engagement for compensation consultants and other advisors to assist it in performing its duties. In fiscal year 2023, the Compensation and Benefits Committee continued to retain Compensia, Inc. (“Compensia”), a national compensation consulting firm, as its compensation consultant. Compensia’s work for the Compensation and Benefits Committee included a review and update of our compensation peer group, a subsequent executive compensation market analysis based on an assessment of the compensation practices of the companies in our compensation peer group, a review and analysis of the compensation of the non-employee members of our Board and a review and report on the risk profile of our executive compensation program. Compensia also provides the Compensation and Benefits Committee with assessments of the Company’s executive compensation practices and makes recommendations based on best practices. In addition, Compensia meets on a frequent basis with our management team and the Chair of the Compensation and Benefits Committee to discuss a variety of compensation matters, including, but not limited to, compensation strategy, trends and to review the policies and viewpoints of the major proxy advisory firms. Compensia reports directly to the Compensation and Benefits Committee, which will annually review its performance, independence and fees. In fiscal year 2024, the Compensation and Benefits Committee assessed Compensia’s independence and concluded that Compensia’s work for the Compensation and Benefits Committee did not raise any conflict of interest.

Use of Peer Group Data

The Compensation and Benefits Committee, assisted by Compensia, underwent a rigorous annual evaluation of our compensation peer group in the spring of 2023 to assist with compensation decisions for fiscal year 2024. The companies in our compensation peer group were selected based on the following criteria:

 

   

Companies operating in the software and human capital management industries;

 

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Companies with comparable annual revenue and market capitalization;

 

   

Companies with high revenue growth; and

 

   

Companies against which we compete for executive talent

Based on these criteria and the informed judgment of the Compensation and Benefits Committee, the Compensation and Benefits Committee approved the following compensation peer group for the Company, effective for fiscal year 2024 compensation decision-making:

 

Appfolio

   EngageSmart    PagerDuty

Asana

   Five9    Paylocity Holdings

Bill Holdings

   Freshworks    Qualys

Blackline

   Guidewire Software    Smartsheet

Braze

   nCino    Sprout Social

Dynatrace

      Workiva

At the beginning of fiscal year 2024, Compensia used this peer group to prepare an analysis for the Compensation and Benefits Committee that compared the compensation levels of our executive officers to comparable executive positions at the companies in our compensation peer group. The Compensation and Benefits Committee used data drawn from the companies in our compensation peer group to evaluate the competitive market when reviewing and adjusting the target total direct compensation packages for our CEO and our other NEOs, including annual base salary, target annual bonus opportunities and long-term equity-based incentive compensation opportunities, for fiscal year 2024. In certain cases, this peer group data was supplemented by broader market analyses.

The Compensation and Benefits Committee reviews our compensation peer group regularly and makes adjustments to its composition annually, taking into account changes in both our business and the businesses of the companies in the peer group.

Other Matters Relating to Executive Compensation

Stockholder Say-on-Pay and Say-on-Frequency Advisory Votes

At the Company’s 2023 annual meeting of stockholders, the Company’s stockholders approved on an advisory and non-binding basis, pursuant to the “say-on-frequency” vote, to hold future “say-on-pay” advisory votes on the Company’s executive compensation annually. Consistent with the results of such advisory vote, the Compensation and Benefits Committee has determined to hold an advisory “say-on-pay” vote on the compensation of our NEOs each year.

In addition, also at the Company’s 2023 annual meeting of stockholders, approximately 87% of the advisory votes cast voted to approve the compensation of our NEOs pursuant to the “say-on-pay” advisory vote. The Compensation and Benefits Committee reviewed and considered the results of this advisory vote when setting the compensation of our NEOs for fiscal year 2024.

The Compensation and Benefits Committee will continue to consider the outcome of the “say-on-pay” advisory vote when making future compensation decisions regarding our NEOs.

Clawback Policy

We believe that it is in the best interests of the Company and our stockholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s “pay-for-performance” compensation philosophy. In January 2023, the Compensation and Benefits Committee adopted a clawback policy that provides for the recoupment of incentive-based compensation in the event that the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the federal securities laws. The clawback policy is designed to comply with Section 10D of the Exchange Act, the rules promulgated thereunder, and applicable NASDAQ listing rules.

 

 

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0001839439
Stock Ownership Guidelines
In fiscal year 2023, the Compensation and Benefits Committee adopted stock ownership guidelines for our executive officers and the
non-employee
directors of the Company. The guidelines require our CEO each executive officer reporting directly to our CEO and each
non-employee
director who receives compensation for his or her service on the Board to acquire and hold a number of shares of our common stock equal in value to at least the following applicable ownership thresholds:
 
 
 
CEO – four times the amount of his or her annual base salary
 
 
 
Other executive officers – one and a half times the amount of his or her annual base salary
 
 
 
Non-employee
directors – five times the amount of his or her annual cash retainer, exclusive of committee chair retainer fees.
All individuals covered by the Stock Ownership Guidelines are expected to achieve his or her applicable ownership threshold within five years of becoming subject to the guidelines. Until the applicable ownership guideline is achieved, such covered individuals are required to retain 50% of all net shares resulting from equity awards granted to them under the Company’s equity compensation program. Each individual covered by the Stock Ownership Guidelines has met his or her applicable ownership threshold or currently is on track to achieve compliance with the guidelines by the end of such five-year period.
Equity Award Granting Practices
We maintain the following equity award granting practices:
 
 
 
our Compensation and Benefits Committee reviewed and approved the annual compensation for our NEOs in the first quarter of fiscal year 2024, and granted our NEOs annual equity awards early in the second quarter of fiscal year 2024. We intend to continue to follow this equity award grant timing for future fiscal years. Mr. Bergstrom received an additional equity award in April 2024 in connection with his promotion to Chief Product & Technology Officer, with such award having the same vesting terms as his applicable annual award;
 
 
 
we do not take material non-public information (“MNPI”) into account when determining the timing and terms of equity awards, and we have never had a practice of doing so;
 
 
 
we have never timed, and do not plan to time, the release of MNPI for the purpose of affecting the value of executive compensation; and
 
 
 
our equity award accounting complies with U.S. GAAP and is transparently disclosed in our applicable SEC filings. Please see the section below titled “
Accounting for Stock-Based Compensation
” for further information.
Compensation Risk Assessment
In reviewing our compensation programs, the Compensation and Benefits Committee considers whether the programs encourage unnecessary or excessive risk taking. During fiscal year 2024, Compensia, at the request of the Compensation and Benefits Committee, performed a risk assessment of the Company’s compensation programs, which included a review of the design and features of the programs and also took into consideration compensation philosophy, performance management and program governance. The Compensation and Benefits Committee does not believe that the Company’s compensation programs create risks that are reasonably likely to have a material adverse effect on the Company.
Section 280G of the Internal Revenue Code
Section 280G of the Internal Revenue Code of 1986 (the “Code”) disallows a tax deduction with respect to “excess parachute payments” to certain executive officers of companies that undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax penalty on the individual receiving the “excess parachute payment.” Parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits and payments and acceleration of vesting from long-term incentive plans or programs and other equity-based compensation. “Excess parachute payments” are parachute payments that exceed a threshold determined under Section 280G of the Code based on an executive officer’s prior compensation. In approving compensation arrangements for our NEOs, the Board considers all elements of the cost to us of providing such compensation, including the potential impact of Section 280G of the Code. However, the Board may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility of Section 280G of the Code and the imposition of excise taxes under Section 4999 of the Code when it believes that such arrangements are appropriate to attract and retain executive talent.
 
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 2024 Proxy Statement
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Section 162(m) Compliance

Section 162(m) of the Code limits us to a deduction for federal income tax purposes of no more than $1 million of compensation paid to certain executive officers in a taxable year. The Compensation and Benefits Committee considers the impact of Section 162(m) when making compensation decisions and will make compensation decisions without regard to the deductibility limit if it determines amounts payable are in best interests of Company and stockholders.

Section 409A Considerations

Another section of the Code, Section 409A, affects the manner by which deferred compensation opportunities are offered to our employees because Section 409A requires, among other things, that “non-qualified deferred compensation” be structured in a manner that limits employees’ abilities to accelerate or further defer certain kinds of deferred compensation. We intend to operate our existing compensation arrangements that are covered by Section 409A in accordance with the applicable rules thereunder, and we will continue to review and amend our compensation arrangements where necessary to comply with Section 409A. To the extent applicable, our compensation arrangements are structured and interpreted to comply with, or be exempt from, Section 409A and the regulations and other interpretive guidance that may be issued under Section 409A.

Accounting for Stock-Based Compensation

We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC 718, to account for our equity-based compensation awards. ASC 718 requires companies to calculate the grant date “fair value” of their equity-based awards using a variety of assumptions. ASC 718 also requires companies to recognize the compensation cost of their equity-based awards in their income statements over the period that an award recipient is required to render service in exchange for the award. Future grants of stock options, restricted stock, restricted stock units and other equity-based awards under our equity incentive award plans will be accounted for under ASC 718. The Compensation and Benefits Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

Compensation Committee Report

The Compensation and Benefits Committee has reviewed and discussed with management the compensation discussion and analysis required by Item 402(b) of Regulation S-K. Based on the review and discussions, the Compensation and Benefits Committee recommended to the Board that the compensation discussion and analysis be included in this Proxy Statement.

Members of the Compensation and Benefits Committee during fiscal year 2024 were:

 

   

Katie Burke;

 

   

Steve Collins; and

 

   

Scott Miller.

 

 

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EXECUTIVE COMPENSATION

 

 

Fiscal Year 2024 Summary Compensation Table

The following table presents summary information regarding the total compensation awarded to, earned by, and paid to our NEOs for fiscal years 2024, 2023 and 2022.

 

Name and

Principal Position

   Year
($)
   Salary
($)
  

Stock
Awards(1)
($)

  

Option
Awards(2)
($)

  

Non-equity
Incentive Plan
Compensation(3)
($)

  

All Other
Compensation(4)
($)

   Total
($)

Raul Villar, Jr.
Chief Executive Officer

       2024        605,192        7,125,015        2,375,007        622,200        23,886        10,751,300
       2023        578,269        4,500,007        4,500,005        590,850        20,668        10,189,799
       2022        550,000        4,035,312        3,437,497        720,500        29,393        8,772,702

Adam Ante,
Chief Financial Officer

       2024        424,231        3,000,022        1,000,003        350,880        15,546        4,790,682
       2023        400,000        1,500,022        1,500,006        323,200        25,542        3,748,770
       2022        400,000        1,907,604        1,624,999        419,200        41,659        4,393,462

Ryan Bergstrom,
Chief Product & Technology Officer

       2024        388,173        2,400,021        800,009        244,800        29,758        3,862,761
       2023        370,000        1,000,015        1,000,014        224,220        18,834        2,613,083
       2022                                          

Alice Geene,
Chief Legal Officer and Corporate Secretary

       2024        382,115        1,500,022        500,001        235,620        22,232        2,639,990
       2023        364,231        1,000,015        1,000,014        224,220        26,248        2,614,728
       2022                                          

Chuck Mueller,
Chief Revenue Officer

       2024        408,007        3,000,022        1,000,003        418,200        26,034        4,852,266
       2023        400,000        2,000,030        2,000,013        404,000        26,195        4,830,238
       2022        400,000        1,467,369        1,250,000        524,000        47,834        3,689,203

 

(1)

The amounts reported in this column represent the aggregate grant date fair value of RSUs granted to our NEOs under the 2021 Plan for the applicable fiscal year, computed in accordance with ASC 718. See Note 14, “Equity Compensation Plans” to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for a discussion of the relevant assumptions used in calculating the aggregate grant date fair value of these awards. For further details on these grants, see the “2024 Fiscal Year Grants of Plan-Based Awards” and “Outstanding Equity Awards at 2024 Fiscal Year End” tables below.

 

(2)

The amounts reported in this column represent the aggregate grant date fair value of Options granted to our NEOs under the 2021 Plan for the applicable fiscal year, computed in accordance with ASC 718. See Note 14, “Equity Compensation Plans” to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for a discussion of the relevant assumptions used in calculating the aggregate grant date fair value of these awards. For further details on these grants, see the “2024 Fiscal Year Grants of Plan-Based Awards” and “Outstanding Equity Awards at 2024 Fiscal Year End” tables below.

 

(3)

The amounts reported in this column represent performance-based annual cash bonuses earned by our NEOs in the applicable fiscal year and paid in the subsequent fiscal year. For further details on the annual cash bonuses earned by our NEOs in respect of fiscal year 2024, see the section above titled “2024 Compensation Determinations—What We Paid and Why—Annual Cash Incentive Compensation” and the “2024 Fiscal Year Grants of Plan-Based Awards” table below.

 

(4)

The amounts reported in this column for fiscal year 2024 are as follows: (i) for Mr. Villar, $11,131 in 401(k) employer contributions, $9,428 for expenses associated with Company-sponsored employee incentive trips, $2,227 for mobile communication-related expenses, $1,000 in HSA employer contributions, and $100 for gift cards; (ii) for Mr. Ante, $10,785 in 401(k) employer contributions, $1,578 for expenses associated with Company-sponsored employee incentive trips, $2,023 for mobile communication-related expenses, $1,000 in HSA employer contributions, and $160 for gift cards; (iii) for Mr. Bergstrom, $12,002 in 401(k) employer contributions, $17,531 for expenses associated with Company-sponsored employee incentive trips, $100 for gift cards and $125 for Thrive Pass benefits; (iv) for Ms. Geene, $10,300 in 401(k) employer contributions, $10,342 for expenses associated with Company-sponsored employee incentive trips, $1,440 for mobile communication-related expenses, and $150 in gift cards; and (v) for Mr. Mueller, $11,683 in 401(k) employer contributions, $12,811 for expenses associated with Company-sponsored employee incentive trips, $1,440 for mobile communication-related expenses, and $100 for gift cards. As previously discussed, the Company covers all costs (or provides reimbursements) for travel and accommodations incurred by our NEOs in connection with their attendance at Company-sponsored employee incentive trips, which such amounts are disclosed in the foregoing sentence.

 

 

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2024 Grants of Plan-Based Awards Table

The following table sets forth certain information with respect to grants of plan-based awards for fiscal year 2024 with respect to our NEOs.

 

     

 

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)

All

Other
Stock
Awards:
Number
of Shares
of Stock
of Units(2)
(#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options(3)

(#)

Exercise
or Base
Price of
Option
Awards
($/Sh)

Grant
Date Fair
Value of
Stock and
Option
Awards(4)
($)

Name

Grant
Date
Approval
Date
Threshold
($)
Target
($)
Maximum
($)

Raul Villar, Jr.

      305,000   610,000   1,220,000        

 

  October 1, 2023   September 28, 2023           218,937   22.83   2,375,007

 

  October 1, 2023   September 28, 2023         312,090       7,125,015

Adam Ante

  October 1, 2023   September 28, 2023   172,000   344,000   688,000        

 

  October 1, 2023   September 28, 2023           92,184   22.83   1,000,003

 

            131,407       3,000,022

Ryan Bergstrom

      120,000   240,000   480,000        

 

  April 1, 2024   January 17, 2024           19,235   19.44   175,008

 

  April 1, 2024   January 17, 2024         27,007       525,016

 

  October 1, 2023   September 28, 2023           57,615   22.83   625,001

 

  October 1, 2023   September 28, 2023         82,129       1,875,005

Alice Geene

      115,500   231,000   462,000        

 

  October 1, 2023   September 28, 2023           46,092   22.83   500,001

 

  October 1, 2023   September 28, 2023         65,704       1,500,022

Chuck Mueller

      205,000   410,000   820,000        

 

  October 1, 2023   September 28, 2023           92,184   22.83   1,000,003

 

  October 1, 2023   September 28, 2023         131,407       3,000,022

 

(1)

Amounts in this column represent performance-based annual cash bonuses granted to our NEOs in respect of fiscal year 2024. For further details on these bonuses, see the section above titled “2024 Compensation Determinations—What We Paid and Why—Annual Cash Incentive Compensation”.

 

(2)

Amounts in this column represent awards of RSUs granted to our NEOs under the 2021 Plan in fiscal year 2024. For further details on these grants, see the “Outstanding Equity Awards at 2024 Fiscal Year End” table below.

 

(3)

Amounts in this column represent awards of Options granted to our NEOs under the 2021 Plan in fiscal year 2024. For further details on these grants, see the “Outstanding Equity Awards at 2024 Fiscal Year End” table below.

 

(4)

Amounts in this column represent the grant date fair value of applicable awards of Options and RSUs, computed in accordance with ASC 718.

Narrative Disclosure to 2024 Summary Compensation Table and 2024 Grants of Plan-Based Awards Table

Employment Agreements

We have entered into employment agreements with Messrs. Villar, Ante and Mueller. The material terms of such employment agreements are summarized below. We are not party to an employment agreement with either Mr. Bergstrom or Ms. Geene.

Villar Employment Agreement

The Company’s employment agreement with Mr. Villar, which was entered into effective as of July 20, 2021 (the “Villar Agreement”), provides for an initial three-year term, subject to successive one-year extensions thereafter, unless either party elects not to permit such automatic non-renewal with at least 90 days’ prior written notice. Under the Villar Agreement, Mr. Villar is entitled to receive an initial annual base salary of $550,000 (increased to $610,000 effective for fiscal year 2024) and is eligible to receive an annual bonus, with the target being equal to 100% of his annual base salary, based upon the achievement of predetermined performance parameters.

The Villar Agreement also provides for customary restrictive covenants including confidentiality, assignment of inventions, non-competition during the employment term and for 18 months thereafter, and non-solicitation of customers, employees and independent contractors during the employment term and for 18 months thereafter.

 

 

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In addition, Mr. Villar is eligible to receive certain severance benefits under the Villar Agreement in the event of a qualifying termination of his employment as further described under the section entitled “—Potential Payments Upon Termination or Change in Control” below.

Ante Employment Agreement

The Company’s employment agreement with Mr. Ante, which was entered into effective as of July 20, 2021 (the “Ante Agreement”), provides for an initial three-year term, subject to successive one-year extensions thereafter, unless either party elects not to permit such automatic non-renewal with at least 90 days’ prior written notice. Under the Ante Agreement, Mr. Ante is entitled to receive an initial annual base salary of $400,000 (increased to $430,000 effective for fiscal year 2024) and is eligible to receive an annual bonus, with the target being equal to 80% of his annual base salary, based upon the achievement of predetermined performance parameters.

The Ante Agreement also provides for customary restrictive covenants including confidentiality, assignment of inventions, non-competition during the employment term and for 18 months thereafter, and non-solicitation of customers, employees and independent contractors during the employment term and for 18 months thereafter.

In addition, Mr. Ante is eligible to receive certain severance benefits under the Ante Agreement in the event of a qualifying termination of his employment as further described under the section entitled “—Potential Payments Upon Termination or Change in Control” below.

Mueller Employment Agreement

The Company’s employment agreement with Mr. Mueller, which was entered into effective as of July 20, 2021 (the “Mueller Agreement”), provides for an initial three-year term, subject to successive one-year extensions thereafter, unless either party elects not to permit such automatic non-renewal with at least 90 days’ prior written notice. Under the Mueller Agreement, Mr. Mueller is entitled to receive an initial annual base salary of $400,000 (increased to $410,000 effective for fiscal year 2024) and is eligible to receive an annual bonus, with the target being equal to 100% of his annual base salary, based upon the achievement of predetermined performance parameters.

The Mueller Agreement also provides for customary restrictive covenants including confidentiality, assignment of inventions, non-competition during the employment term and for 18 months thereafter, and non-solicitation of customers, employees and independent contractors during the employment term and for 18 months thereafter.

In addition, Mr. Mueller is eligible to receive certain severance benefits under the Mueller Agreement in the event of a qualifying termination of his employment as further described under the section entitled “—Potential Payments Upon Termination or Change in Control” below.

 

32 2024 Proxy Statement   LOGO  


Outstanding Equity Awards at Fiscal 2024 Year-End

The following table sets forth, for each of our NEOs, certain information with respect to outstanding equity awards of our NEOs as of June 30, 2024.

 

     Option Awards        Stock Awards

Name

   Grant Date    Vesting
Commencement
Date
  

Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable

   Number of
Securities
Underlying
Unexercised
Options (#)
Unexcercisable
   Option
Exercise
Price ($)
  Option
Expiration
Date
    

 

   Number of
Shares or
Units of
Stock that
have not
Vested (#)
  

Market
Value of
Shares or
Units of
Stock that
have not
Vested ($)(1)

Raul Villar, Jr.

  

8/22/2019(2)

       7/1/2019        12,500            

 

N/A

(3)

 
   

 

N/A

(3)

 
           —         —   
  

7/20/2021(4)

              357,004        10,250        23.00       7/20/2031            —         — 
  

7/23/2021(5)

                                             12,517         158,966 
  

10/1/2022(6)

              174,433        140,806        29.56       10/1/2032            —         — 
  

10/1/2022(7)

                                             76,498         971,525 
  

10/1/2023(8)

                     218,937        22.83       10/1/2033            —         — 
  

10/1/2023(9)

                                             312,090         3,963,543 

Adam Ante

  

4/1/2019(2)

       11/2/2018        490            

 

N/A

(3)

 
   

 

N/A

(3)

 
           —         — 
  

11/20/2019(2)

       10/1/2019        3,510            

 

N/A

(3)

 
   

 

N/A

(3)

 
           —         — 
  

7/20/2021(4)

              168,765        4,846        23.00       7/20/2031            —         — 
  

7/23/2021(5)

                                             5,918         75,159 
  

10/1/2022(6)

              58,144        46,936        29.56       10/1/2032            —         — 
  

10/1/2022(7)

                                             25,500         323,850 
  

10/1/2023(8)

                     92,184        22.83       10/1/2033            —         — 
  

10/1/2023(9)

                                             131,407         1,668,869 

Ryan Bergstrom

  

4/1/2019(2)

       4/1/2019        2,475            

 

N/A

(3)

 
   

 

N/A

(3)

 
           —         — 
  

7/20/2021(4)

              82,364        2,796        23.00       7/20/2031            —         — 
  

7/23/2021(5)

                                             3,414         43,358 
  

10/1/2022(6)

              38,763        31,291        29.56       10/1/2032            —         — 
  

10/1/2022(7)

                                             17,000         215,900 
  

10/1/2023(8)

                     57,615        22.83       10/1/2033            —         — 
  

10/1/2023(9)

                                             82,129         1,043,038 
  

4/1/2024(10)

                     19,235        19.44       4/1/2034            —         — 
  

4/1/2024(11)

                                             27,007         342,989 

Alice Geene

  

1/20/2021(2)

       10/1/2020        1,876        124     

 

N/A

(3)

 
   

 

N/A

(3)

 
           —         — 
  

7/20/2021(4)

              64,909        1,864        23.00       7/20/2031            —         — 
  

7/23/2021(5)

                                             2,276         28,905 
  

10/1/2022(6)

              38,763        31,291        29.56       10/1/2032            —         — 
  

10/1/2022(7)

                                             17,000         215,900 
  

10/1/2023(8)

                     46,092        22.83       10/1/2033
           —         — 
  

10/1/2023(9)

                                             65,704         834,441 

Chuck Mueller

  

2/20/2020(2)

       1/1/2020        6,000            

 

N/A

(3)

 
   

 

N/A

(3)

 
           —         — 
  

7/20/2021(4)

              129,819        3,728        23.00       7/20/2031            —         — 
  

7/23/2021(5)

                                             4,552         57,810 
  

10/1/2022(6)

              77,526        62,581        29.56       10/1/2032            —         — 
  

10/1/2022(7)

                                             34,000         431,800 
  

10/1/2023(8)

                     92,184        22.83       10/1/2033            —         — 
    

10/1/2023(9)

                                                   131,407         1,668,869 

 

(1)

The aggregate market values reported in this column are calculated by multiplying the unvested shares by $12.70, the closing price of a share of our common stock on June 28, 2024 as reported on NASDAQ.

 

(2)

These amounts represent Class B Units granted to our NEOs pursuant to the 2019 Paycor Equity Incentive Plan (the “2019 Plan”, and such units, the “Class B Units”). The Class B Units are intended to be profits interests for federal income tax purposes and represent the right to receive

 

 

  LOGO   2024 Proxy Statement 33


  distributions from Pride Aggregator after the members of Pride Aggregator have received their contributed capital and earned a specified return of their contributed capital. Despite the fact that the Class B Units do not require the payment of an exercise price by the holder, they are most similar economically to stock options. Accordingly, they are classified as “options” under the definition provided in the Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature.” See Note 14, “Equity Compensation Plans” to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 for additional details regarding these awards. At the time of grant, 50% of the Class B Units were subject to time-based vesting, and 50% of the Class B Units were subject to the satisfaction of certain performance-based vesting conditions. In connection with the IPO, the performance-based Class B Units were converted to time-based Class B Units, with 25% of the Class B Units having vested on each of the six and 12 month anniversaries of the IPO, and the balance of the Class B Units vesting in equal installments on the 18 and 24-month anniversaries of the IPO, subject to the respective NEO’s continuous service with us through the applicable vesting date (with a three-month vesting tail period if the respective NEO were to be terminated by the Company other than for “cause”, due to death or “disability”, or due to his resignation for “good reason”, each as defined under the 2019 Plan).

 

(3)

The Class B Units are not traditional options and do not require the payment of an exercise price by the holder or have an expiration date. Instead, the holders of the Class B Units participate in distributions attributable to the appreciation in the fair market value of Pride Aggregator, or profits of Pride Aggregator, after their respective dates of grant.

 

(4)

These amounts represent Options granted to each of our NEOs on July 20, 2021. One-third of the Options vested on the first anniversary of the grant date, and the remainder vests in 24 equal monthly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to the NEO’s continued employment with the Company through the applicable vesting date.

 

(5)

These amounts represent RSUs granted to each of our NEOs on July 23, 2021. One-third of the RSUs vested on the first anniversary of the grant date, and the remainder vests in 8 equal quarterly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to the NEO’s continued employment with the Company through the applicable vesting date.

 

(6)

These amounts represent Options granted to each of our NEOs on October 1, 2022. One-third of the Options vested on the first anniversary of the grant date, and the remainder vests in 24 equal monthly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to the NEO’s continued employment with the Company through the applicable vesting date.

 

(7)

These amounts represent RSUs granted to each of our NEOs on October 1, 2022. One-third of the RSUs vested on the first anniversary of the grant date, and the remainder vests in 8 equal quarterly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to the NEO’s continued employment with the Company through the applicable vesting date.

 

(8)

These amounts represent Options granted to each of our NEOs on October 1, 2023. One-third of the Options vested on the first anniversary of the grant date, and the remainder vests in 24 equal monthly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to the NEO’s continued employment with the Company through the applicable vesting date.

 

(9)

These amounts represent RSUs granted to each of our NEOs on October 1, 2023. One-third of the RSUs vested on the first anniversary of the grant date, and the remainder vests in 8 equal quarterly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to the NEO’s continued employment with the Company through the applicable vesting date.

 

(10)

These amounts represent Options granted to Mr. Bergstrom on April 1, 2024. One-third of the Options vested on the first anniversary of the grant date, and the remainder vests in 24 equal monthly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to Mr. Bergstrom’s continued employment with the Company through the applicable vesting date.

 

(11)

These amounts represent RSUs granted to Mr. Bergstrom on April 1, 2024. One-third of the RSUs vested on the first anniversary of the grant date, and the remainder vests in 8 equal quarterly installments thereafter (with full vesting to occur on the third anniversary of the grant date), subject to Mr. Bergstrom’s continued employment with the Company through the applicable vesting date.

Option Exercises and Stock Vested in the 2024 Fiscal Year

The following table sets forth certain information with respect to the vesting of stock awards and the exercise of stock options (excluding the NEOs’ Class B Units, if applicable) during fiscal year 2024 with respect to our NEOs. No stock options were exercised by any of our NEOs during fiscal year 2024.

 

Name

  

Number of
Shares
Acquired on
Vesting
(#)(1)

  

Value
Realized on
Vesting
($)(2)

Raul Villar, Jr.

       125,803        2,732,380

Adam Ante

       57,509        1,282,115

Ryan Bergstrom

       30,485        662,070

Alice Geene

       25,933        563,289

Chuck Mueller

       51,866        1,126,581

 

(1)

Amounts in this column represent RSUs granted under the 2021 Plan that vested in fiscal year 2024, without reduction for any shares of common stock withheld to satisfy applicable tax obligations.

 

(2)

Amounts in this column represent the aggregate dollar amounts realized upon vesting, calculated by multiplying the number of shares of our common stock underlying the award by the closing market value of our common stock on the date of distribution of shares.

 

34 2024 Proxy Statement   LOGO  


Potential Payments upon Termination or Change in Control

Severance Benefits under Employment Agreements

Each of the Villar Agreement, the Ante Agreement and the Mueller Agreement (collectively, the “Employment Agreements”) provide that if the applicable NEO’s employment is terminated by the Company other than for “cause” (and other than due to the NEO’s death or “disability”), or the NEO resigns for “good reason,” each as defined in the respective Employment Agreement, subject to their execution and non-revocation of a fully effective release of claims in favor of the Company and continued compliance with applicable restrictive covenants, the respective NEO is eligible to receive (i) continuation of the NEO’s then-current base salary for a period of 12 months, (ii) 50% of the NEO’s then-target annual bonus (payable when bonuses are otherwise paid to other senior executives of the Company), and (iii) 12 months (or such earlier date that the respective NEO becomes eligible to receive health benefits as a result of subsequent employment or service) of continued premium payments under the Company’s group health plans pursuant to U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), at the same cost applicable to active employees of the Company.

Executive Severance Plan

The Company maintains the Executive Severance Plan, under which executives of the Company reporting directly to the CEO who are at the M7 Executive Career Level (other than executives who are party to an individual employment agreement) are eligible to receive severance benefits in the event of a qualifying termination. In addition to the material terms summarized below, the Executive Severance Plan subjects each NEO to customary restrictive covenants including confidentiality and non-disparagement. Mr. Bergstrom and Ms. Geene are the only NEOs who participate in the Executive Severance Plan.

The Executive Severance Plan provides that, if the NEO undergoes a “termination of employment” other than a “termination for cause” or due to “disability”, each as defined under the Executive Severance Plan, and subject to the NEO’s execution and non-revocation of a fully effective release of claims in favor of the Company and continued compliance with the applicable restrictive covenants as described above, the NEO is eligible to receive, in lieu of any severance entitlements under any other plan or agreement: (i) an amount in cash equal to the sum of (a) the NEO’s then-current base salary times a multiple of 1.0, and (b) the NEO’s then-current target annual bonus times a multiple of 0.5, payable in substantially equal installments over the six-month period following such termination; and (ii) reimbursement for the cost of health insurance continuation coverage under COBRA of continued premium payments under the Company’s group health plans pursuant to COBRA, at the same cost applicable to active employees of the Company for twelve months, or, if earlier, the date that the respective NEO becomes eligible to receive health benefits as a result of subsequent employment or service.

Executive Change in Control Severance Plan

The Company maintains the Executive CiC Severance Plan, under which executives of the Company reporting directly to the CEO who are at the M7 Executive Career Level (including each of the NEOs) are eligible to receive increased severance benefits in the event of a qualifying termination of his employment within the three months prior to or 12 months following a “change in control” of the Company, as defined under the 2021 Plan. In addition to the material terms summarized below, the Executive CiC Severance Plan subjects each NEO to customary restrictive covenants including confidentiality, non-disparagement, non-competition during the employment term and for 12 months thereafter, and non-solicitation of employees, representatives, officers or directors or customers or potential customers during the employment term and for 12 months thereafter.

The Executive CiC Severance Plan provides that, if within three months prior to or 12 months following a change in control, the NEO undergoes a “termination for good reason” or a “termination of employment” other than a “termination for cause” or due to “disability”, each as defined under the Executive CiC Severance Plan, and subject to the NEO’s execution and non-revocation of a fully effective release of claims in favor of the Company and continued compliance with the applicable restrictive covenants as described above, the respective NEO is eligible to receive, in lieu of any severance entitlements under the NEO’s employment agreement or any other plan or agreement, (i) the cash payments described below, payable in substantially equal installments over the applicable severance period; (ii) reimbursement for the cost of health insurance continuation coverage under COBRA of continued premium payments under the Company’s group health plans pursuant to COBRA, at the same cost applicable to active employees of the Company for the applicable severance period or, if earlier, the date that the respective NEO becomes eligible to receive health benefits as a result of subsequent employment or service; and (iii) to the extent the respective NEO holds unvested equity awards granted under the 2021 Plan that vest solely based on continued employment with the Company and its affiliates, any such unvested awards will accelerate and vest as of such termination date.

 

 

  LOGO   2024 Proxy Statement 35


The Executive CiC Severance Plan provides for the following:

 

   

For Mr. Villar Jr.: an amount in cash equal to the sum of (a) his then-current base salary times a multiple of 1.5, and (b) his then-current target annual bonus times a multiple of 1.0, payable in substantially equal installments over the 18-month severance period following such termination.

 

   

For all other NEOs: an amount in cash equal to the sum of (a) his or her then-current base salary times a multiple of 1.0, and (b) his or her then-current target annual bonus times a multiple of 1.0, payable in substantially equal installments over the 12-month severance period following such termination.

Long-Term Equity-Based Incentive Compensation

Pursuant to the applicable award agreements, the Options and RSUs granted to each NEO under the 2021 Plan accelerate and fully vest in the event of the respective NEO’s termination other than for “cause” (and not due to death or “disability”) on or following a “change in control,” each as defined in the 2021 Plan.

In the event of an NEO’s termination due to death or disability, any unvested RSUs are automatically and immediately forfeited for no consideration, and any vested Options held by the respective NEO will remain exercisable until the earlier of one year from the termination date and the Options’ expiration date. In the event of an NEO’s termination by the Company without cause, any vested Options held by the respective NEO will remain exercisable until the earlier of 90 days from the termination date and the Options’ expiration date. In the event of a voluntary resignation by an NEO, any vested Options held by the respective NEO will remain exercisable until the earlier of 30 days from the termination date and the Options’ expiration date. In the event of an NEO’s termination by the Company for cause, any Options held by the respective NEO will expire, whether or not vested.

With respect to an NEO’s Class B Units, to the extent applicable, in the event such NEO’s employment is terminated by the Company other than for “cause” (not due to death or “disability”) or by such NEO for “good reason” (each as defined in the 2019 Plan), any outstanding and unvested Class B Units held by such NEO shall remain eligible to vest for three months following such termination.

The following table provides information regarding potential payments to certain of our NEOs as of June 30, 2024 in connection with certain termination or change in control events.

 

Benefits and Payments Upon Termination(1)

  

Termination without
Cause (other than
due to Disability)(2)
($)

  

Termination without
Cause (other than
due to Disability)
or for Good Reason(3)
Within 3 Months
Prior to or 12 Months
Following a Change
in Control(2)
($)

Raul Villar, Jr.

    

 

 

 

    

 

 

 

Cash Severance Payments(4)

       915,000        1,525,000

Accelerated Vesting of Equity Awards(5)

              5,094,034

COBRA Payments(6)

       17,520        26,279

Adam Ante

    

 

 

 

    

 

 

 

Cash Severance Payments(4)

       602,000        774,000

Accelerated Vesting of Equity Awards(5)

              2,067,878

COBRA Payments(6)

       17,520        17,520

Ryan Bergstrom

    

 

 

 

    

 

 

 

Cash Severance Payments(4)

       520,000        640,000

Accelerated Vesting of Equity Awards(5)

              1,645,285

COBRA Payments(6)

       16,282        16,282

Alice Geene

    

 

 

 

    

 

 

 

Cash Severance Payments(4)

       500,500        616,000

Accelerated Vesting of Equity Awards(5)

              1,079,246

COBRA Payments(6)

             

 

36 2024 Proxy Statement   LOGO  


Benefits and Payments Upon Termination(1)

  

Termination without
Cause (other than
due to Disability)(2)
($)

  

Termination without
Cause (other than
due to Disability)
or for Good Reason(3)
Within 3 Months
Prior to or 12 Months
Following a Change
in Control(2)
($)

Chuck Mueller

    

 

 

 

    

 

 

 

Cash Severance Payments(4)

       615,000        820,000

Accelerated Vesting of Equity Awards(5)

              2,158,479

COBRA Payments(6)

       16,282        16,282

 

(1)

Information in this table assumes a termination date of June 30, 2024 and a price per share of our common stock of $12.70 (the closing price of a share of our common stock on June 28, 2024 as reported on NASDAQ).

 

(2)

As described above in “—Potential Payments Upon Termination or Change in Control”, each of the NEOs also receive the accelerated equity award payments reported in this column in the event of the respective NEO’s termination other than for “cause” (and not due to death or “disability”) on or following a “change in control” (each as defined in the 2021 Plan).

 

(3)

As described above in “—Potential Payments Upon Termination or Change in Control”, Messrs. Villar, Ante and Mueller also receive the cash severance and COBRA payments reported in this column in the event that the appliable NEO resigns for “good reason” (as defined in the respective Employment Agreement).

 

(4)

Represents the aggregate cash payments payable to the applicable NEO (calculated based on the base salary and target annual bonus in effect as of June 30, 2024) in accordance with the terms of the applicable Employment Agreement, the Executive Severance Plan or the Executive CiC Severance Plan, as applicable.

 

(5)

Represents the aggregate value of the applicable NEO’s accelerated equity awards payable to the NEO (excluding such NEO’s Class B Units, if applicable) in accordance with the terms of the Executive CiC Severance Plan or the applicable award agreement, as applicable.

 

(6)

Represents the aggregate COBRA payments payable to the applicable NEO in accordance with the terms of the applicable Employment Agreement, the Executive Severance Plan or the Executive CiC Severance Plan, as applicable.

 

  LOGO   2024 Proxy Statement 37


DIRECTOR COMPENSATION

 

 

Our non-employee director compensation policy consists of: (i) a board retainer of $50,000 (plus an additional $50,000 for the Non-Executive Board Chair); (ii) a committee member retainer ($10,000 for the Audit Committee, $7,500 for the Compensation and Benefits Committee and $5,000 for the Nominating and Governance Committee); (iii) a committee chair retainer ($20,000 for the Audit Committee, $15,000 for the Compensation and Benefits Committee and $10,000 for the Nominating and Governance Committee); and (iv) an annual equity grant in the form of $170,000 in RSUs with a one-year vesting term, which are granted in October of each year. The retainers are paid monthly and prorated for any partial year of service on the Board.

Fiscal Year 2024 Director Compensation Table

The following table presents the total compensation for each person who served as a non-employee member of the Board during fiscal year 2024 (each director whose name appears in the table below is hereinafter referred to as a “compensation-eligible director”). Mr. Villar, Jr., our CEO, and Mr. Wright, as a representative of the Apax Funds, receive no compensation for their service as directors. The compensation received by Mr. Villar, Jr. as an employee of the Company is presented in “Executive Compensation—Summary Compensation Table” above.

 

Name

  

Fees earned or
paid in cash ($)

  

Stock
Awards(1)

  

Total

Whit Bouck

       $65,000      $ 170,015      $ 235,015

Katie Burke

       $70,000      $ 170,015      $ 240,015

Steve Collins

       $77,500      $ 170,015      $ 247,515

Jonathan Corr

       $70,000      $ 170,015      $ 240,015  

Scott Miller

       $57,500      $ 170,015      $ 227,515

Jeremy Rishel

       $60,000      $ 170,015      $ 230,015

 

(1)

The amounts reported in this column represent the aggregate grant date fair value of the RSUs granted to each compensation-eligible director under the 2021 Plan, computed in accordance with ASC 718. 7,447 RSUs were granted to each of Mmes. Bouck and Burke and Messrs. Collins, Corr, Miller and Rishel on October 1, 2023, with such RSUs fully vesting on the one-year anniversary of the grant date, subject to continued service. As of June 30, 2024, each of the compensation-eligible directors held (as of such date) outstanding RSUs in the following amounts: Mmes. Bouck and Burke and Messrs. Collins, Rishel and Miller—7,447 and Mr. Corr—13,480.

 

38 2024 Proxy Statement   LOGO  


CEO PAY RATIO

 

 

As required by Item 402(u) of Regulation S-K, we are disclosing the pay ratio comparing the median of the annual total compensation of all of our employees (other than our CEO) and the annual total compensation of our CEO.

For fiscal year 2024:

 

   

The annual total compensation of the median employee identified at the median of all or our employees (other than our CEO) was $100,469.

 

   

The annual total compensation of our CEO was $10,751,300.

 

   

The estimated ratio of the annual total compensation of our CEO to the median annual total compensation of all of our other employees for fiscal 2024 was approximately 107 to 1.

To identify the median employee, we examined the compensation of all our full-time, part-time, seasonal, and temporary employees (other than our CEO) as of June 30, 2024, the last day of fiscal year 2024, located in the United States. As of such date, our global employee population consisted of 2,896 employees, with 2,757 employees located in the United States and 139 employees located outside of the United States. For purposes of applying the de minimis exemption under Item 402(u) of Regulation S-K in identifying the median employee, we excluded all 139 employees located outside of the United States in the following jurisdictions: Serbia (116 employees), Israel (16) employees, and Canada (7 employees), which collectively represent in the aggregate less than 5% of our global employee population. We did not include any contractors or other non-employee workers in our employee population. No cost of living adjustments were made.

To identify our median employee, we used a consistently applied compensation measure consisting of annual base salary, target annual bonus or commissions, and the grant date fair value of equity awards granted for the 12-month period from July 1, 2023 through June 30, 2024. For simplicity and consistency across our organization, we used annual base salary rate. Equity awards granted during the fiscal year were included using the same methodology we use for reporting the grant date fair value of the equity awards granted to our NEOs and reported in the “Summary Compensation Table” above. Using this approach, we identified the individual at the median of our employee population. The individual is a full-time employee based in the United States.

We calculated this individual’s fiscal year 2024 annual total compensation using the same methodology that we use to calculate the annual total compensation for our NEOs reported in the “Summary Compensation Table” above. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of the “Summary Compensation Table” above.

We believe that this pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described above. The rules adopted by the SEC for identifying the median employee allow companies to adopt different methodologies, apply certain exclusions, and make reasonable estimates and assumptions that best reflect their compensation practices. The pay ratios reported by other companies may not be comparable to our CEO pay ratio, as other companies may have used different methodologies, exclusions, estimates, and assumptions in calculating their pay ratios.

 

  LOGO   2024 Proxy Statement 39


PAY VERSUS PERFORMANCE
 
 
 
Pay versus Performance Table
 
The following table sets forth certain information with respect to the Company’s financial performance and the compensation paid to our NEOs for fiscal years 2024, 2023 and 2022.
 
Year
  
Summary
Compensation
Table Total for
PEO
(1
)
  
Compensation
Actually Paid
to PEO
(2
)
  
Average
Summary
Compensation
Table Total for
Non-PEO NEOs
(3
)
  
Average
Compensation
Actually Paid
to
Non-PEO

NEOs
(4
)
  
Value of Initial Fixed $100
Investment Based On:
  
Net Income
(Loss)
Attributable
to Paycor
HCM, Inc.
(7
)
(in 000s)
 
Total
Revenues
(8)

(in 000s)
  
Total
Shareholder
Return
(5
)
  
Peer Group
Total
Shareholder
Return
(6
)
2024
     $ 10,751,300       $ 3,001,241      $ 4,036,425      $ 1,481,207      $ 49      $ 113      ($ 58,942 )     $ 654,948
2023
     $ 10,189,799       $ 7,426,192      $ 3,451,705      $ 2,591,404      $ 91      $ 91      ($ 93,215 )     $ 552,692
2022
     $ 8,772,702       $ 9,764,470      $ 4,041,333      $ 5,010,089      $ 100      $ 70      ($ 119,638 )     $ 429,387
 
(1)
The dollar amounts reported in this column represent the amount of total compensation reported for Raul Villar, Jr. (our “PEO”) in the “Total” column of the Summary Compensation Table for each applicable fiscal year.
 
(2)
The dollar amounts reported in this column represent the amount of “compensation actually paid” to our PEO, as computed in accordance with Item 402(v) of Regulation
S-K
for each applicable fiscal year (excluding our PEO’s Class B Units). These “compensation actually paid” amounts do not reflect the actual amount of compensation earned by or paid to our PEO during the applicable fiscal year, but rather reflect our PEO’s total compensation for each applicable fiscal year after certain equity award adjustments were made in accordance with the requirements of Item 402(v) of Regulation
S-K,
as further described below.
 
Year
  
Reported
Summary
Compensation
Table Total for
PEO
  
Reported
Grant Date
Fair Value of
Equity Awards
in Summary
Compensation
Table
(a)
  
Equity
Award
Adjustments
(b)
  
Compensation
Actually Paid
to PEO
2024
     $ 10,751,300      $ 9,500,022       $ 1,749,963       $ 3,001,241
2023
     $ 10,189,799      $ 9,000,012       $ 6,236,405       $ 7,426,192
2022
     $ 8,772,702      $