Paycom Software, Inc DEF 14A, filed Mar 28, 2024

About this DEF 14A

Paycom Software, Inc. (PAYC)

DEF 14A 2024-03-28 For: 2024-04-29

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Added on June 12, 2026

Adjournments and Postponements

In person

Online

By telephone

By mail

To vote in person, you must attend the Annual Meeting and obtain and submit a ballot. The ballot will be provided at the Annual Meeting.

You may vote by proxy online by following the instructions found on the proxy card.

You may vote by proxy by calling the toll-free number found on the proxy card.

You may vote by proxy by completing, signing, dating and promptly returning the enclosed proxy card in the postage-paid envelope.

Any action on the items of business described above may be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.

Stockholder List

A complete list of stockholders entitled to vote at the Annual Meeting will be available for inspection at the principal executive offices of the Company during regular business hours for a period of 10 calendar days ending on the day before the Annual Meeting.

Paycom Software, Inc filed this DEF 14A on March 28, 2024.

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☐		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material Pursuant to §240.14a-12


☒		No fee required.

☐		Fee paid previously with preliminary materials.

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11.



		CHAD RICHISON				CHRIS G. THOMAS
		Co-Chief Executive Officer, President and Chairman of the Board of Directors				Co-Chief Executive Officer



ITEMS OF BUSINESS
Proposal		Board of Directors Recommendation	See Page
1	To elect three Class II directors, each to serve until the date of the 2027 annual meeting of stockholders and until his or her successor has been duly elected and qualified, or his or her earlier death, resignation or removal;	FOR each director nominee	28

2	To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2024; and	FOR	31

3	To approve, on an advisory basis, the compensation of our named executive officers.	FOR	73

Stockholders will also transact such other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.


By Order of the Board of Directors,

Chad Richison		Chris G. Thomas
Co-Chief Executive Officer, President and		Co-Chief Executive Officer
Chairman of the Board of Directors		Oklahoma City, Oklahoma
Oklahoma City, Oklahoma		March 28, 2024
March 28, 2024


Voting Roadmap			1

2023 Highlights			2

Directors and Corporate Governance			6

Director Skills, Experience and Background			7

Board of Directors Independence			15

Board Leadership Structure			15

Board of Directors Meetings			15

Executive Sessions of Independent Directors			16

Committees			16

Risk Oversight			19

Board Oversight of Cybersecurity Risks			19

Director Nomination Procedures			20

Director Qualifications			21

Annual Board and Director Self-Assessment Process			21

Communications with the Board of Directors			22

Code of Ethics and Business Conduct			22

Hedging Policy			22

Director Compensation			23

Stockholder Engagement			25

Commitment to Social Responsibility and Environmental Sustainability			26

Proposal 1: Election of Directors			28

Vote Required			28

Recommendation of the Board of Directors			28

Audit Committee Matters			29

Audit Committee Report			29

Fees to Independent Registered Public Accounting Firm			29

Policy on Audit Committee Pre-approval of Audit and Non-audit Services Performed by Independent Registered Public Accounting Firm			30

Proposal 2: Ratification of the Appointment of Our Independent Registered Public Accounting Firm			31

Vote Required			31

Recommendation of the Board of Directors			31

Management			32

A Message from Our Compensation Committee			34

Compensation Discussion and Analysis			35

Executive Summary			36



Overview			38

Say-On-Pay and Stockholder Engagement			41

Compensation Philosophy			42

Compensation Review and Determination			43

Cash Compensation			45

Equity Incentive Compensation			49

Other Compensation Components and Considerations			53

Compensation Committee Report			56

Compensation of Executive Officers			57

Summary Compensation Table			57

2023 Grants of Plan-Based Awards Table			59

2023 Outstanding Equity Awards At Fiscal Year-End Table			61

2023 Option Exercises and Stock Vested Table			63

Employment Agreements and Arrangements			63

Potential Payments upon Termination or Change in Control			66

Compensation Risk Assessment			68

Pay Versus Performance			69

2023 Pay Ratio Disclosure			72

Equity Compensation Plan Table			72

Proposal 3: Advisory Vote to Approve Executive Compensation			73

Vote Required			73

Recommendation of the Board of Directors			73

Certain Relationships and Related Party Transactions			74

Review and Approval or Ratification of Transactions with Related Parties			74

Transactions with Related Parties			74

Security Ownership of Certain Beneficial Owners and Management			75

Other Matters			77

Submission of Stockholder Proposals and Nominations			77

Other Business			77

Financial Statements			77

Additional Information			78

Appendix A – Non-GAAP Reconciliations			A-1

Appendix B – Questions and Answers			B-1


		Proposal		Election of Directors
		1		The Board of Directors recommends that you vote “FOR” each director nominee.
		1		Upon the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated Robert J. Levenson, Frederick C. Peters II and Felicia Williams for election as Class II directors. The Board of Directors believes that each director nominee possesses the necessary skills, experiences, qualifications and perspectives to, collectively with the other incumbent directors, provide quality advice and counsel to the Company’s management, effectively oversee the business and serve the long-term interests of the Company’s stockholders. See pages 7-9 for more information about each director nominee.

		Proposal		Ratification of Appointment of Independent Registered Public Accounting Firm
		2		The Board of Directors recommends that you vote “FOR” the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024.
		2		The Audit Committee has appointed Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s appointment of Grant Thornton LLP. See page 31 for more information.

		Proposal		Advisory Vote to Approve Executive Compensation
		3		The Board of Directors recommends that you vote “FOR” the advisory approval of the compensation of the Company’s named executive officers.
		3		The Company seeks a non-binding advisory vote to approve the compensation of its named executive officers as described in the Compensation Discussion and Analysis beginning on page 35 and the compensation tables and related narrative discussion beginning on page 57.


INDEPENDENT BOARD	All directors except Mr. Richison (our Co-Chief Executive Officer, President and Chairman of the Board) are independent, and all committees are composed entirely of independent directors. Mr. Peters serves as Lead Independent Director.
ENGAGED DIRECTORS	All directors attended more than 90% of Board and applicable committee meetings in 2023.
REGULAR BOARD SELF- ASSESSMENT	All directors assess the performance of the Board and each committee every year.
ROBUST BOARD OVERSIGHT		Risk: Our Board and Audit Committee receive regular updates from management on our enterprise risk management program.
		Sustainability: Our Nominating and Corporate Governance Committee maintains oversight of social responsibility and environmental sustainability.
		Cybersecurity: Our Chief Information Officer and Executive Vice President of Information Technology and Information Security present quarterly reports to the Audit Committee on our cybersecurity risks and program.
		Succession Planning: Our full Board is engaged in managing long-term executive succession planning.
STRONG CODE OF ETHICS	We are committed to operating with the highest level of integrity, and maintain a Code of Ethics and Business Conduct that applies to all directors, officers and other employees.
ACCOUNTABLE TO STOCKHOLDERS	In 2023, we adopted a majority vote standard for uncontested director elections, with a plurality carve-out for contested elections. We hold an annual say-on-pay vote.
ROBUST STOCKHOLDER ENGAGEMENT	We engage with our top stockholders throughout the year and solicit their feedback on our compensation, governance and sustainability programs.
ROBUST STOCK OWNERSHIP GUIDELINES	We maintain robust stock ownership guidelines equivalent to 6x salary for our Co-Chief Executive Officers, 3x salary for other executive officers and 5x cash compensation for non-employee directors.
INDEPENDENT COMPENSATION CONSULTANT	The Compensation Committee directly retains an independent compensation consultant that performs no services for the Company other than those for the Compensation Committee.


1. Need to promote leadership continuity to support our strategic growth priorities designed to drive stockholder value creation		2. Limited retentive value of equity incentives outstanding at the end of 2022 in light of tracking performance levels, posing retention concerns in the highly competitive SaaS talent market		3. Focus on fostering alignment with the interests of our stockholders to drive absolute long-term stockholder value creation and successful execution of strategic growth initiatives


		(1)		For purposes of this graphic, the legacy NEOs are Mrs. Faurot and Messrs. Boelte and Smith, who were NEOs in each of the last three years. Target compensation reflects base salary in effect at the end of the applicable fiscal year, target Annual Incentive Plan compensation, and the reported target value of annual equity awards, in each case presented as an average of such amounts for these three legacy NEOs. Realizable compensation reflects base salary paid, Annual Incentive Plan payout paid, and equity awards granted in the applicable year, in each case presented as an average of such amounts for these three legacy NEOs. Realizable value of equity awards is based on actual or tracking performance levels, as applicable (for performance-based restricted stock units (“PSUs”)), or based on the closing price of our Common Stock on the last trading day of 2023 (for restricted stock awards (“RSAs”) and time-based restricted stock units (“RSUs”)). PSUs granted in 2021 were earned at 15% of target; PSUs granted in 2022 paid out at 0% for the first tranche and are tracking at 0% for the second and final tranche; PSUs granted in 2023 paid out at 0% for Mrs. Faurot and Mr. Smith and 30% for Mr. Boelte (based on target achievement of one of three performance metrics applicable to Mr. Boelte’s award).


	RATIONALE FOR NOMINATION

Frederick C. Peters II LEAD INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR SINCE: 2014 AGE: 74 COMMITTEES: › Audit EDUCATION: › BA, Political Science, Amherst College	Mr. Peters contributes to the Board his extensive financial and accounting expertise, senior executive and public company board experience, risk management, industry and deep institutional knowledge, as well as first-hand knowledge of government relations and the regulatory landscape.
	KEY SKILLS AND QUALIFICATIONS
	›	Financial and Accounting – acquired experience over his 40+ years in the banking and financial sector, including serving in his current role as CEO of Community Financial Institutions Fund (formerly Bluestone Financial Institutions Fund) and previous senior leadership and board roles at Bryn Mawr Bank Corporation (NASDAQ: BMTC) and the Federal Reserve Bank of Philadelphia, where he supervised complex financial service offerings, banks and bank holding companies.
	›	Risk Management – obtained expertise through his first-hand experience in founding two community banks, which required extensive, broad ranging oversight responsibilities, including evaluation of corporate risk; also has served in numerous executive and board leadership roles at various public and private companies.
	›	Industry – developed extensive knowledge of the payments ecosystem, payment processing technologies, regulatory frameworks, banking sector and evolving market preferences over his more than four decades in banking and payments adjacent industries.
	›	Government Relations/Regulatory – gained experience during his time chairing the Audit Committee for the Federal Reserve Bank of Philadelphia and while serving as a member of the Federal Reserve Bank’s Committee of Audit Chairs in Washington, D.C.
	EXPERIENCE
	COMMUNITY FINANCIAL INSTITUTIONS FUND (formerly Bluestone Financial Institutions Fund), an asset management company
	›	Chairman and CEO (since 2015)

	BRYN MAWR BANK CORPORATION, a community bank and wealth management organization

	›	Chairman, President and CEO (2001-2014)

	›	Director (2001-2017)

	FIRST MAIN LINE BANK

	›	Founder, Chairman and CEO (1995-2001)

	NATIONAL BANK OF THE MAIN LINE

	›	Founder, Chairman and CEO (1985-1995)

	Other experience: Held lending and executive positions at Philadelphia National Bank, Hamilton Bank and Industrial Valley Bank
	OTHER BOARD SERVICE
	THE FEDERAL RESERVE BANK OF PHILADELPHIA (2009–2014), AUDIT COMMITTEE CHAIR (2013-2014)
	FEDERAL RESERVE BANK’S COMMITTEE OF AUDIT CHAIRS (2013–2014)
	VARIOUS NON-PROFIT BOARDS OF DIRECTORS, including Foundation for Delaware County, Bryn Mawr Film Institute and Main Line Health


	RATIONALE FOR NOMINATION

Felicia Williams INDEPENDENT DIRECTOR SINCE: 2022 AGE: 58 COMMITTEES: › Audit (Chairperson) › Nominating and Corporate Governance EDUCATION: › BS, Accounting, Florida A&M University › Certified Public Accountant	Ms. Williams contributes to the Board her broad-based financial and accounting expertise, senior executive and public company board experience, risk management, and cybersecurity knowledge. The Board benefits from her experience as the Macy’s, Inc. Fellow for CEO Action for Racial Equity, where she advised on the development of sustainability policies and corporate best practices that address social injustice.
	KEY SKILLS AND QUALIFICATIONS
	›	Financial and Accounting – oversaw finance organization and operational execution in various leadership positions at Macy’s (NYSE: M), including as interim CFO; brings broad-based finance knowledge through her over 30 years of corporate financial leadership experience at multiple large-cap public companies with complex operations, including The Coca-Cola Company (NYSE: KO) and Bristol-Myers Squibb (NYSE: BMY), where she gained deep financial industry knowledge.
	›	Risk Management – acquired expertise through her extensive first-hand experience serving in audit and enterprise risk management leadership roles, beginning at Arthur Andersen and continued through her roles at Macy’s, where she served as Senior Vice President, Finance, subsequent to her role as Enterprise Risk Officer, and was responsible for overseeing the company’s financial stability during the height of the pandemic.
	›	Cybersecurity and Data Privacy – developed her knowledge of information security, privacy and data risk management of technologies and processes during her executive career, leading roles directly responsible for cybersecurity, IT security operations, enterprise business resiliency, and data protection practices.
	›	Global Business – obtained through domestic and international assignments with The Coca-Cola Company, Coca-Cola Hellenic Bottling Company, and Bristol-Myers Squibb, where she gained first-hand experience in global business finance, treasury, tax, and internal control and audit operations.
	EXPERIENCE
	MACY’S, INC., one of the largest American department store holding companies
	›	Senior Vice President, Finance (2020-2023)
	›	Interim Chief Financial Officer (June 2020-November 2020)
	›	Senior Vice President, Controller and Enterprise Risk Officer (2016-2020)

	›	Senior Vice President, Finance and Risk Management (2011-2016)

	›	Held leadership roles across key corporate finance functions, including treasury, investor relations, risk management, financial planning and analysis, and as the chief audit executive (2004-2011)

	COCA-COLA HELLENIC BOTTLING COMPANY, a consumer packaged goods business and strategic bottling partner of The Coca-Cola Company

	›	Vice President, Internal Audit (2002-2004)

	THE COCA-COLA COMPANY, a beverage company

	›	Group Controller and Treasury (1994-2002)

	Other experience: Held various audit and financial roles at Bristol-Myers Squibb and Arthur Andersen & Company

	OTHER BOARD SERVICE

	ANYWHERE REAL ESTATE INC. (NYSE: HOUS) (since 2021), Chair of Audit Committee
	MERIDIAN BIOSCIENCE, INC. (formerly NASDAQ: VIVO) (2018-2023)


	RATIONALE FOR NOMINATION

Robert J. Levenson INDEPENDENT DIRECTOR SINCE: 2007 AGE: 82 COMMITTEES: › Audit › Compensation EDUCATION: › BA, Business Administration, Kent State University	Mr. Levenson contributes to the Board his extensive knowledge of the payroll and human capital management industry and scaling software technology and service companies, senior executive and public company board experience, financial and accounting expertise, strategic planning and risk management knowledge.
	KEY SKILLS AND QUALIFICATIONS
	›	Industry – acquired comprehensive knowledge of the software, services and technology industry, including payment processing technologies, through his career at companies such as Automatic Data Processing, Inc. (NASDAQ: ADP) and Medco Containment Services, which was further enhanced after he founded Lenox Capital, a private venture capital investment company focused primarily on investing in early-stage software and technology-based service companies.
	›	Financial and Accounting – gained experience throughout his lengthy tenure at First Data Corporation, a financial services company, and in his current role in private venture capital investing; contributed to increased revenue, profitability and growth of various companies.
	›	Risk Management – developed expertise through his experience in various senior leadership roles at ADP, Medco and First Data Corporation, where he oversaw operations and strategic planning considerations, which involved extensive risk management and mitigation.
	›	Senior Leadership – obtained skills through serving in various senior leadership positions including as an executive officer, founder, and director at numerous companies across different industries, all of which were technology-based enterprises.
	EXPERIENCE
	LENOX CAPITAL GROUP, LLC, a private venture capital investment company
	›	Founder and Managing Member (since 2000)
	FIRST DATA CORPORATION, an electronic commerce and payment services company (fintech)
	›	Consultant (2000-2006)
	›	Sr. Executive Vice President and Director (1992-2000)

	MEDCO CONTAINMENT SERVICES, INC., a mail order pharmacy company later acquired by Merck & Co., Inc.
	›	Office of the President, Chief Operating Officer and Director (1990-1993)
	AUTOMATIC DATA PROCESSING, INC. (“ADP”), a global provider of human resources management software and solutions
	›	Held several executive management positions including Group President—Employer Services, member of the Corporate Executive Committee and member of the Board of Directors (1981-1990)

	OTHER BOARD SERVICE

	Served on several boards of directors of public and private companies as well as civic and philanthropic organizations, which included: ADP, First Data Corporation, Medco, Central Data Systems, Ceridian Corp, Comnet, Polyvision, Broadway & Seymour, Superior Telecom Inc., Vestcom International, Emisphere Technologies, and Elite Pharmaceuticals


				Ms. Turney contributes to the Board her significant senior executive and public company board experience, industry expertise related to high growth and ecommerce companies and growing world-class brands, sales and marketing, risk management and financial reporting. KEY SKILLS AND QUALIFICATIONS › Senior Leadership – seasoned executive with extensive payment processing technology knowledge developed over her extensive career in the retail sector; multiple CEO positions at large retailers, including Gloria Jeans, Victoria’s Secret and Neiman Marcus Direct, have given her tremendous experience overseeing all aspects of corporate operations, including sales operations and marketing. › Marketing and Business Development – gained over three decades of experience launching and growing global brands; served in executive and board leadership roles at high growth retail companies, where she was responsible for strategic planning and brand development. › Public Company/Corporate Governance – acquired during her career serving on multiple publicly traded boards, including as chair of the compensation committee at Bread Financial Holdings (NYSE: BFH), and various executive leadership roles at large retailers. › Global Experience – acquired during her career serving in various executive leadership roles, where her expertise extended to the global retail scale; in addition to global experience gained during her time at Gloria Jeans, she has advised several international brands such as Mark and Spencer (London), Cosmo Lady (China) and Clovia (India). EXPERIENCE GLORIA JEANS, an international retailer of fashion apparel, footwear, and accessories › Chief Executive Officer (2018-2019) VICTORIA’S SECRET, a division of L Brands, Inc. › President and Chief Executive Officer (2006-2016) › President and Chief Executive Officer, Victoria’s Secret Direct (2000-2006) NEIMAN MARCUS GROUP, a luxury retailer (1989-2000) › President and Chief Executive Officer, Neiman Marcus Direct › Held various executive roles in merchandising, creative production, advertising and public relations OTHER BOARD SERVICE BREAD FINANCIAL HOLDINGS, INC. (NYSE: BFH) (since 2019), chair of compensation committee and member of nominating and governance committee ACADEMY SPORTS AND OUTDOORS, INC. (NASDAQ: ASO) (2021-2024), former member of compensation and nominating and governance committees HAPPY SOCKS AB (2018-2019) M/I HOMES, INC. (2011-2018) FULLBEAUTY BRANDS (2016-2018) NATIONWIDE CHILDREN’S HOSPITAL, INC. (2012-2018) JAY H. BAKER RETAILING INITIATIVE ADVISORY BOARD AT THE WHARTON SCHOOL, UNIVERSITY OF PENNSYLVANIA (since 2004) UNIVERSITY OF OKLAHOMA FOUNDATION INVESTMENT COMMITTEE (since 2000)

Sharen J. Turney INDEPENDENT DIRECTOR SINCE: 2021 AGE: 67 COMMITTEES: › Compensation › Nominating and Corporate Governance (Chairperson) EDUCATION: › BA, Business Education, University of Oklahoma


				Mr. Watts contributes to the Board his extensive first-hand knowledge of government relations and the evolving regulatory landscape, public company board experience and senior leadership experience. KEY SKILLS AND QUALIFICATIONS › Public Company/Corporate Governance – developed skills through his extensive experience serving on public company boards, including Dillard’s, CSX Corporation, ITC Holdings, Clear Channel Communications, Inc. and Terex Corporation. › Senior Leadership – experienced professional who served in various leadership roles in the United States House of Representatives; advised several public company boards and has over two decades of experience as Co-Founder and CEO of Watts Partners, a boutique corporate and government affairs consulting firm. › Marketing/Business Development – established a prominent consulting firm with a diverse client-base to which he provides strategic focus and program leadership; vast experience advising on business development and public affairs strategies. › Government Relations/Regulatory – acquired during his time as an elected official, first on the Oklahoma Corporation Commission and then during his eight years in Congress, where he served on the United States House Committees on Armed Services, Financial Services, and Transportation and Infrastructure. EXPERIENCE WATTS PARTNERS, a boutique corporate and government affairs consulting firm › Co-Founder, President and Chief Executive Officer (since 2003) THE UNITED STATES HOUSE OF REPRESENTATIVES › Representative for the State of Oklahoma (1995-2003) › Chairman of the Republican Conference (1999-2003) › Served on the United States House Committees on Armed Services, Financial Services, and Transportation and Infrastructure (1995-2003) › Sponsored and led the establishment of the Committee on Homeland Security (2002) OTHER BOARD SERVICE DILLARD’S, INC. (NYSE: DDS) (since 2009; 2003-2008), member of audit committee CSX CORPORATION (2011-2014) ITC HOLDINGS CORP. (2011-2014) CLEAR CHANNEL COMMUNICATIONS, INC. (2003-2007) TEREX CORPORATION (2003-2006)

J.C. Watts, Jr. INDEPENDENT DIRECTOR SINCE: 2016 AGE: 66 COMMITTEES: › Compensation (Chairperson) › Nominating and Corporate Governance EDUCATION: › BA, Journalism and Public Relations, University of Oklahoma


				Mr. Duques contributes to the Board his extensive industry, senior executive and public company board experience, risk management and financial and accounting expertise. KEY SKILLS AND QUALIFICATIONS › Industry – obtained comprehensive knowledge of payment processing software and technology through his 30-year career in the financial services industry; while at First Data Corporation, helped develop and grow the company into one of the largest processors of point of sale credit card transactions at the time. › Risk Management – acquired significant expertise through his decades of leadership experience through overseeing complex organizations with global presence, including business operations, enterprise risk management and strategic planning. › Financial and Accounting – developed proficiency through his career in executive and board leadership roles at financial services companies; as CEO of First Data Corporation, oversaw its acquisition by KKR which, at $29 billion, was one of the largest contemporary leveraged buyouts of a technology company at the time. › Public Company/Corporate Governance – gained vital governance experience by serving on the board of directors of Unisys Corporation for over a decade, where he acted as Chairman for two years. EXPERIENCE FIRST DATA CORPORATION, an electronic commerce and payment services company › Chairman and Chief Executive Officer (1992-2002; 2005-2007) AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., the predecessor of First Data Corporation › President and Chief Executive Officer, Database Services Group (1987-1992) AUTOMATIC DATA PROCESSING, INC., a global provider of human resources management software and solutions › Group President Financial Services and Director (1984-1987) › Advanced through roles of increasing responsibility (1973-1984) OTHER BOARD SERVICE UNISYS CORPORATION (1998-2014), Chairman (2006-2008) SUNGARD CORP. (2003-2005) CHECKFREE CORPORATION (2000-2004) MASTERCARD (1997-1999) THE GEORGE WASHINGTON UNIVERSITY BOARD OF TRUSTEES (1998-2008)

Henry C. Duques INDEPENDENT DIRECTOR SINCE: 2016 AGE: 80 COMMITTEES: › Audit › Compensation EDUCATION: › BA, Business Administration, The George Washington University › MBA, The George Washington University


				Mr. Richison contributes to the Board his extensive industry and cybersecurity knowledge, expertise in data automation and in the SaaS sector, and senior executive and business development experience. KEY SKILLS AND QUALIFICATIONS › Senior Leadership – as the Co-Chief Executive Officer, President and Chairman of the Board of Paycom, he has garnered vast experience guiding Paycom from startup to a large publicly traded company; has overseen Paycom’s strategic vision and direction, contributing to its reputation as an innovator; leadership is marked by a focus on service excellence, technology development, and employee culture. › Industry – as the founder of Paycom, he brings a comprehensive knowledge of the software, payments and technology industry; having started his career at a national payroll and HR company and a regional payroll company, Mr. Richison recognized opportunities to enhance efficiency of payroll and talent management operations and founded Paycom, which rapidly became one the first companies to offer cloud-based payroll service with a range of complementary HCM applications. › Cybersecurity – obtained extensive knowledge of the technologies and processes resulting in the establishment of in-depth industry-leading data privacy and cybersecurity standards and technologies at Paycom needed to protect the Company and client data. › Marketing/Business Development – under his leadership, Paycom has added tens of thousands of clients through elevating the Paycom brand, quality client engagement and providing world-class service. EXPERIENCE PAYCOM › Co-Chief Executive Officer, President and Chairman (since February 2024) › Chief Executive Officer, President and Chairman (2016-2024) › Chief Executive Officer and President (1998-2016)

Chad Richison CO-CHIEF EXECUTIVE OFFICER, PRESIDENT AND CHAIRMAN CHAIRMAN SINCE: 2016 DIRECTOR SINCE: 1998 AGE: 53 EDUCATION: › BA, Mass Communications—Journalism, University of Central Oklahoma


Our Corporate Governance Guidelines provide that both independent and management directors are eligible for appointment as Chairman of the Board of Directors. We believe it is important that the Board of Directors retain flexibility to determine whether these roles should be separate or combined based upon all relevant facts and circumstances at a given point in time. Our Corporate Governance Guidelines provide that if the Chairman is not an independent director, the non-management directors are required to appoint a Lead Independent Director to represent and coordinate the activities of the non-management and independent directors and to help ensure the independence of the Board. A copy of the Corporate Governance Guidelines is available on our website at investors.paycom.com/corporate-governance.
Chairman of the Board of Directors		Lead Independent Director

Our Co-Chief Executive Officer and President, Chad Richison, also serves as Chairman of the Board. The Board of Directors believes that, as founder of Paycom, Mr. Richison’s experience and in-depth knowledge make him best suited to effectively assess the opportunities and challenges facing the Company and our business. At this time, the Board believes that this leadership structure promotes decisive leadership, fosters clear accountability and enhances our ability to communicate our strategy clearly and consistently to our stockholders, employees and clients.		Mr. Peters currently serves as Lead Independent Director. In this role, his responsibilities are to (i) preside over regularly scheduled executive sessions of non-management and independent directors, (ii) facilitate communication among the non-management and independent directors, (iii) act as a liaison between the non-management and independent directors and the Co-Chief Executive Officers and (iv) perform such other roles and responsibilities as may be assigned to him by the Board of Directors.



Audit Committee
Current Membership
Henry C. Duques • Robert J. Levenson • Frederick C. Peters II • Felicia Williams (Chairperson)
Independence	Qualifications	6 meetings in 2023
Each member is independent for purposes of serving on the Audit Committee, per applicable Securities and Exchange Commission (“SEC”) rules and regulations and the NYSE Listed Company Manual.	Each member is financially literate. Each of Ms. Williams and Mr. Peters is an “audit committee financial expert” and has accounting or related financial management expertise as required under the NYSE Listed Company Manual.
Role and Responsibilities
Our Audit Committee oversees our accounting and financial reporting processes and the audit of our financial statements. In that regard, our Audit Committee assists board oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence and the performance of our internal audit function and independent auditors. Among other matters, the Audit Committee is responsible for the appointment, compensation, retention, oversight and pre-approval of our independent auditors, including oversight of firm and partner rotation; evaluating the qualifications, performance and independence of our independent auditors; reviewing our annual and interim financial statements; discussing press releases, financial information and earnings guidance provided to analysts and rating agencies; discussing policies with respect to risk assessment and risk management; reviewing and ensuring the adequacy of our internal control systems; reviewing the compliance and effectiveness of our Code of Ethics and Business Conduct; reviewing and approving related party transactions; and annually reviewing the Audit Committee charter and the Audit Committee’s performance.
Committee Charter
The Audit Committee operates under a written charter that satisfies the applicable SEC rules and regulations and the requirements of the NYSE Listed Company Manual. A copy of the Audit Committee charter is available on our website at investors.paycom.com/corporate-governance.



Nominating and Corporate Governance Committee
Current Membership
Sharen J. Turney (Chairperson) • J.C. Watts, Jr. • Felicia Williams
Independence				6 meetings in 2023
Each member is independent for purposes of serving on the Nominating and Corporate Governance Committee, per applicable SEC rules and regulations and the NYSE Listed Company Manual.
Role and Responsibilities
Our Nominating and Corporate Governance Committee is responsible for, among other matters, identifying, evaluating and recommending candidates for membership on our Board of Directors, including nominees recommended by stockholders; reviewing and recommending the composition of our committees; overseeing our Code of Ethics and Business Conduct and Corporate Governance Guidelines; reporting and making recommendations to our Board of Directors concerning governance matters; overseeing our policies and programs on issues of social responsibility and environmental sustainability; and overseeing the preparation and publication of the Company’s Corporate Social Responsibility Report. The Nominating and Corporate Governance Committee also annually reviews the Nominating and Corporate Governance Committee charter, the performance of the Board of Directors and management, and its own performance.
Committee Charter
The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable SEC rules and regulations and the requirements of the NYSE Listed Company Manual. A copy of the Nominating and Corporate Governance Committee charter is available on our website at investors.paycom.com/corporate-governance.


Audit Committee Retains primary responsibility for overseeing enterprise risk management, including strategic, operating, compliance, and cybersecurity risk management. Regularly discusses areas of significant financial risk with management, including the Chief Financial Officer, as well as the programs and actions to limit, monitor or control such exposures.	Compensation Committee Oversees risks related to our compensation program and practices. In conjunction with management, reviews the potential risks arising from compensation design, including incentivizing excessive or unnecessary risk-taking behavior, and is responsible for ensuring resulting programs appropriately balance risk and reward.	Nominating and Corporate Governance Committee Oversees risks related to corporate governance, the composition of our Board of Directors and its committees, and risks related to our social responsibility and environmental sustainability. Annually reviews the composition of our Board of Directors and its committees to ensure appropriate skills and independence.

Senior Management Team Our senior management team is responsible for assessing, implementing and managing our risk management processes on a day-to-day basis, and for reporting to the Board on significant risks and risk management programs. Our senior management team, along with risk management leaders and our internal audit function, meet regularly to assess risk and ensure proper risk governance.



		1. Assess Need The Nominating and Corporate Governance Committee annually evaluates the composition of our Board of Directors, including the directors’ array of experiences, skills, and backgrounds, to ensure the Board can effectively manage its responsibilities. When a position is open on the Board of Directors, or the Nominating and Corporate Governance Committee determines that a director with certain skills or background would enhance our Board’s effectiveness, the Nominating and Corporate Governance Committee undertakes a process to identify and recommend qualified candidates to the Board.

		2. Identify Candidates The Nominating and Corporate Governance Committee oversees the search process, which may include recommendations from, and discussions with, our other independent directors and senior members of management, suggestions from our stockholders, and recommendations from an independent search firm. As part of the search process, the Nominating and Corporate Governance Committee seeks to include candidates representing diversity in race, ethnicity, gender, age, skills and professional experiences that enhance the quality of deliberations and decisions of the Board within the context of the needs of the Board at any given point in time.

		3. Evaluate Fit The Nominating and Corporate Governance Committee screens all potential candidates for their independence, skills, qualifications, and potential conflicts. Candidates are evaluated in the same manner regardless of the source of recommendation. Qualifying candidates are then interviewed by the Chairman of the Board of Directors, our Lead Independent Director, our Nominating and Corporate Governance Committee chairperson and members of the senior management team.

		4. Recommend to the Board of Directors The Nominating and Corporate Governance Committee narrows candidates to a final list and interviews are scheduled with other directors as appropriate. The Nominating and Corporate Governance Committee meets to select a candidate to recommend to the full Board for nomination or appointment.


		Results Our Board of Directors has appointed two new directors over the past three years, Ms. Turney and Ms. Williams, both of whom have brought valuable skills, experiences, and perspectives to our Board of Directors. Ms. Turney, who joined the Board of Directors in 2021, has extensive board, executive leadership and management experience, particularly in digital/e-commerce as well as global operations. Our most recent addition, Ms. Williams, joined the Board of Directors in 2022 and brings over three decades of corporate financial leadership, audit, and enterprise risk management experience.


Recipient(s)	2023 Annual Cash Compensation ($)

Non-employee directors		75,000

Lead Independent Director		25,000

Audit Committee chairperson		30,000

Audit Committee members (excluding chairperson)		15,000

Compensation Committee chairperson		23,000

Compensation Committee members (excluding chairperson)		13,000

Nominating and Corporate Governance Committee chairperson		15,000

Nominating and Corporate Governance Committee members (excluding chairperson)		10,000



	Fees Earned or Paid in Cash ($)			Stock Awards⁽¹⁾⁽²⁾ ($)		Total ($)

Current Non-Employee Directors

Henry C. Duques		96,500	⁽³⁾		234,767		331,267

Robert J. Levenson		98,000	⁽⁴⁾		234,767		332,767

Frederick C. Peters II		124,000	⁽⁵⁾		234,767		358,767

Sharen J. Turney		93,000	⁽⁶⁾		234,767		327,767

J.C. Watts, Jr.		100,500	⁽⁷⁾		234,767		335,267

Felicia Williams		97,500	⁽⁸⁾		234,767		332,267

Former Non-Employee Director

Jason D. Clark		100,000	⁽⁹⁾		234,767		334,767


Our People		› More than 20% of Paycom team members have joined one or more of our employee resource groups. › We launched a mandatory DEI training for all employees to provide a foundation of DEI awareness. › We included “nonbinary” and “chose to not disclose” when reporting our gender and ethnicity data to increase our transparency and more accurately represent our workforce demographic data.
Our Culture		› We revamped our recruiting with the help of our Talent Acquisition Campus Recruitment and DEI Strategy Team which attended nearly 50 DEI recruitment events. › We deployed a new, extensive employee orientation which offers robust training on all matters needed to succeed at Paycom. › We donated more than $2.3 million to more than 350 organizations across 37 states and the District of Columbia.
Our World		› We continued to power our two corporate campuses in Oklahoma City and Grapevine with 100% wind energy through the purchase of renewable energy credits. › Our recycling partner processed 129,442 lbs. of electronic assets for reuse and/or material recovery. As a result, Paycom: ○ reduced greenhouse gas emissions in the amount of an estimated 180,427 lbs.; ○ diverted 3,721 lbs. of toxic metals; and ○ had 43,715 lbs. of recovered metals.



	2023			2022

Audit Fees⁽¹⁾		$	1,006		$	921

Audit-Related Fees⁽²⁾			—			—

Tax Fees⁽³⁾			99			101

All Other Fees⁽⁴⁾			—			—

Total Fees		$	1,105		$	1,022


Name	Current Base Salary⁽¹⁾ ($)	Annual Incentive		PSUs ($, at target)	RSUs ($)	Total Target Compensation ($)
Name	Current Base Salary⁽¹⁾ ($)	Target (%)	Target ($)	PSUs ($, at target)	RSUs ($)	Total Target Compensation ($)
Chad Richison	800,000	100%	800,000	—	—	1,600,000
Chris G. Thomas	800,000	100%	800,000	1,333,333	1,333,333	4,266,666
Craig E. Boelte	524,097	100%	524,097	1,333,333	1,333,333	3,714,860
Holly Faurot	497,190	100%	497,190	833,333	833,333	2,661,046
Bradley S. Smith	511,228	100%	511,228	833,333	833,333	2,689,122
Jason D. Clark	575,000	100%	575,000	500,000	500,000	2,150,000


Long-Term Incentive Program Design Element		Rationale for Change
Transitioned PSU performance metrics to Company financial performance measures		In response to certain stockholders’ preference for the equity incentive program to be based on financial performance measures, the Committee reviewed a range of potential metrics for the 2023 incentive program and determined that revenue, adjusted EBITDA, annual revenue retention rate and stock price (measured based on a trailing weighted average price, which we refer to as “VWAP value”) were the key financial performance measures most closely correlated with our ability to deliver sustained stockholder value creation. Also, these metrics are widely used by our investors to measure our performance. The performance metric selection for each NEO was tailored to his or her area of responsibility and ability to directly influence our financial performance outcomes. The Committee determined it was appropriate to use similar Company financial performance metrics in the cash and equity incentive programs to emphasize the importance of maintaining our revenue growth rate and profitability in 2023. Due to significant challenges in setting reliable long-term financial goals in light of the highly volatile macroeconomic environment, the Committee approved a one-year performance period for the 2023 PSUs to maintain the rigor and effectiveness of our program and encourage “stretch” performance in 2023, eliminating the possibility of overperformance in one year offsetting underperformance in another year during a longer-term performance cycle. The Committee will continue to review market conditions and evaluate whether longer performance periods for future equity awards would be appropriate. Payouts for the 2023 PSUs were capped at target to reflect the rigor of our compensation program and to avoid outsized compensation delivery. Despite our strong financial performance in 2023, we did not achieve any of the 2023 PSU performance targets, with the exception of the adjusted EBITDA target applicable to a portion (30%) of Mr. Boelte’s award. As a result, the 2023 PSUs granted to Mrs. Faurot and Messrs. Smith and Thomas vested at 0% and the 2023 PSUs granted to Mr. Boelte vested at 30% of total target value.
Allocated majority of equity incentive opportunities to RSAs with extended four-year vesting period and back- loaded vesting schedule		Providing the majority of 2023 equity incentives in the form of time-based awards fosters an immediate alignment of executives with our stockholders and incentivizes sustained long-term stockholder value creation. In making this determination, the Committee was particularly aware of the highly competitive talent market for experienced and accomplished executives in the SaaS industry. A majority of the 2023 equity incentive opportunities were delivered in the form of RSAs (69-78% of total 2023 equity incentive opportunities, depending on the NEO role) with 45-48% of RSAs vesting in the fourth year of the vesting period, subject to continued service with the Company through the vesting date.
Approved increased grant values for 2023 awards		Award values for 2023 were calibrated to incentivize sustained stockholder value creation and to support retention. The Committee considers each of our NEOs to be critical to our success and execution of our growth strategy. The 2023 equity incentives were designed to stabilize the executive leadership team, considering robust financial performance results delivered consistently over the last three fiscal years, and to motivate achievement of our long-term strategic priorities that are at the core of our stockholder value creation. Mr. Richison was not eligible and did not receive any equity incentives in 2023.


Name	Prior Base Salary ($)		2023 Base Salary ($)⁽¹⁾	% Change

Chad Richison⁽²⁾		800,184	832,191	4%

Chris G. Thomas⁽³⁾		—	400,000	—

Craig E. Boelte		503,939	524,097	4%

Holly Faurot		478,067	497,190	4%

Bradley S. Smith		491,566	511,228	4%

Jason D. Clark⁽⁴⁾		—	575,000	—
(1) The amounts presented represent base salaries in effect as of July 1, 2023, except with respect to Mr. Clark. (2) Effective as of the February 7, 2024 transition to Co-Chief Executive Officer, Mr. Richison’s salary is $800,000. (3) Mr. Thomas was not an NEO in 2022. In connection with his appointment as Co-Chief Executive Officer on February 7, 2024, Mr. Thomas’s annual base salary was increased to $800,000. (4) Mr. Clark was not an NEO in 2022. The amount presented reflects the base salary set forth in his agreement with the Company, effective as of December 4, 2023.


Name⁽¹⁾	Target Annual Incentive (% of Base Salary)	Target Annual Incentive ($)

Chad Richison	100%	800,184

Chris G. Thomas	100%	400,000

Craig E. Boelte	100%	503,939

Holly Faurot	100%	478,067

Bradley S. Smith	100%	491,566


(1) Jason D. Clark joined the executive team in December 2023 and thus was not eligible to participate in the Annual Incentive Plan for 2023. Mr. Clark will be eligible to participate beginning in 2024, with a target bonus equal to 100% of his base salary.


Achievement Level	Performance Goal ($MM)	Growth (2023 vs. 2022)	Payout Percentage (% of Target)

Revenue Performance (100%)

Threshold	1,530.9	11.3%	0%

Target	1,701.0	23.7%	100%

Maximum	1,717.0	24.9%	200%

Adjusted EBITDA⁽¹⁾ Performance (Modifier)

Target	701.0	20.9%	N/A

Potential Deduction:	-5.0% payout for every $2.0MM below target performance, up to -75%