pcty-20231019
0001591698DEF 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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the RegistrantFiled 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 Under Rule 14a-12

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Paylocity Holding Corporation

(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



Table of Contents
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Table of Contents
Letter to
Stockholders
October 20, 2023
Dear Stockholder:
You are cordially invited to attend this year’s Annual Meeting of Stockholders of Paylocity Holding Corporation on November 30, 2023, at 8:30 a.m. Central Time. The Annual Meeting of Stockholders will be conducted virtually via a live webcast. You will be able to listen to the Annual Meeting of Stockholders, submit your questions, and vote during the live webcast of the meeting by visiting http://www.virtualshareholdermeeting.com/PCTY2023 and entering the 16-digit control number included in our Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions that accompanied your proxy materials.
We are pleased to take advantage of the U.S. Securities and Exchange Commission rule that allows companies to furnish proxy materials primarily over the Internet. On or about October 20, 2023, we mailed to our stockholders a Notice Regarding the Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including our Proxy Statement and Annual Report to Stockholders for the fiscal year ended June 30, 2023, over the Internet. The Notice also provides instructions on how to vote online or by telephone and includes instructions on how you can receive a paper copy of the proxy materials by mail. If you receive your annual meeting materials by mail, the Notice of Annual Meeting of Stockholders, Proxy Statement, 2023 Annual Report and proxy card will be enclosed. If you receive your proxy materials via e-mail, the e-mail will contain voting instructions and links to the Annual Report and Proxy Statement on the Internet, both of which are available at www.proxyvote.com.
Details regarding admission to the Annual Meeting and the business to be conducted at the Annual Meeting are described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. Whether or not you plan to attend the meeting, your vote is very important, and we encourage you to vote promptly. You may vote by either marking, signing and returning the enclosed proxy card or using telephone or internet voting. For specific instructions on voting, please refer to the instructions on your enclosed proxy card. If you attend the virtual meeting, you will have the right to revoke the proxy and vote your shares during the meeting. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from your brokerage firm, bank or other nominee to vote your shares.
We look forward to seeing you at the annual meeting.
Sincerely yours,
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Steven R. Beauchamp
Co-Chief Executive Officer
Toby J. Williams
President and Co-Chief Executive Officer
Paylocity 2024 Proxy Statement     1

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Table of Contents

Notice of 2024 Annual
Meeting of Stockholders
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Date
Thursday, November 30, 2023 at 8:30 a.m. Central Time
 
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Place
Virtually at
www.virtualshareholdermeeting.com/PCTY2023
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Record Date
You can vote if you were a stockholder of record at the close of business on October 3, 2023. Attendance at the meeting is limited to stockholders or their proxy holders and Company guests. Only stockholders or their valid proxy holders may address the meeting.
 
Important notice regarding the internet availability of proxy materials for the Annual Meeting of Stockholders to be held on November 30, 2023.
A complete set of proxy materials relating to our annual meeting, consisting of the Notice of Annual Meeting, Proxy Statement, Proxy Card and Annual Report, is available on the Internet and may be viewed at www.proxyvote.com.
Purposes
Proposal No. 1
To elect Steven R. Beauchamp, Linda M. Breard, Virginia G. Breen, Jeffrey T. Diehl, Robin L. Pederson, Andres D. Reiner, Kenneth B. Robinson, Steven I. Sarowitz, Ronald V. Waters III and Toby J. Williams as directors to hold office until the 2025 annual meeting of stockholders and until their respective successors are elected and qualified.
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Proposal No. 2
To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2024.
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Proposal No. 3
To vote on a non-binding basis to approve the compensation of our named executive officers.
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Proposal No. 4
To approve the 2023 Equity Incentive Plan.
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Proposal No. 5
To approve an amendment to Article VI of our Second Amended and Restated Certificate of Incorporation to allow for the removal of directors with or without cause.
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Proposal No. 6
To transact such other business as may properly be brought before the meeting or any adjournment or postponement thereof.
Voting
IMPORTANT: Please vote your shares by submitting a proxy by Internet, by telephone, or by completing, signing, dating and returning the enclosed proxy card. The proxy card describes your voting options in more detail. If you attend the meeting, you may choose to vote online at the meeting even if you have previously voted your shares. If for any reason you desire to revoke your proxy, you can do so at any time before it is voted.
Mailing
On or about October 20, 2023, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement and 2023 Annual Report to Stockholders and how to vote.
For ten days prior to the meeting, a complete list of stockholders entitled to vote at the meeting will be available for examination by any stockholder, for any purpose relating to the meeting, during ordinary business hours at our principal offices.
Attending the Meeting
The meeting will be held virtually at www.virtualshareholdermeeting.com/PCTY2023.
Meeting starts at 8:30 a.m. Central Time.
Please have your 16-digit control number to join the Annual Meeting.
The use of recording devices is not allowed.
Questions
For Questions Regarding:Contact:
Annual meeting
Paylocity Investor Relations Investors@paylocity.com
Stock ownership for registered holders
Equiniti Shareowner Services (800) 468-9716 (within the U.S. and Canada) or 651-450-4064 (worldwide) or www.shareowneronline.com
Stock ownership for beneficial holders
Please contact your broker, bank or other nominee
Voting for registered holders
Paylocity Investor Relations Investors@paylocity.com
Voting for beneficial holdersPlease contact your broker, bank or other nominee
2     Paylocity 2024 Proxy Statement

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Table of Contents





Paylocity Holding Corporation
Table of Contents
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A-1
B-1
C-1
Paylocity 2024 Proxy Statement     3


Table of Contents
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Proxy Statement for Annual Meeting of Stockholders to be Held November 30, 2023
The board of directors of Paylocity Holding Corporation is soliciting your proxy for the 2024 Annual Meeting of Stockholders to be held on November 30, 2023, or any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement and related materials are first being made available to stockholders on or about October 20, 2023. References in this Proxy Statement to the “Company,” “we,” “our,” “us” and “Paylocity” are to Paylocity Holding Corporation and its consolidated subsidiaries, and references to the “annual meeting” are to the 2024 Annual Meeting of Stockholders. When we refer to the Company’s fiscal year, we mean the annual period ended on June 30, 2023. This proxy statement covers our 2023 fiscal year, which was from July 1, 2022 through June 30, 2023 (“fiscal 2023”).
Solicitation and Voting
Record Date
Only stockholders of record at the close of business on October 3, 2023 will be entitled to notice of and to vote at the meeting and any adjournment thereof. At the close of business on this record date, a total of 56,174,813 shares of our common stock were outstanding and entitled to vote. Each share of common stock has one vote.
Quorum
A majority of the shares of common stock issued and outstanding as of the record date must be present at the meeting or represented by proxy to constitute a quorum for the transaction of business at the meeting. Your shares will be counted towards the quorum if you submit a valid proxy (or one is submitted on your behalf by your broker or bank) or if you vote at the virtual meeting. Abstentions and “broker non-votes” (shares held by a broker or nominee that does not have the authority, either express or discretionary, to vote on a particular matter) will each be counted as present for purposes of determining the presence of a quorum.
Vote Required to Adopt Proposals
Each share of our common stock outstanding on the record date is entitled to one vote on each of the ten director nominees. Each share of our common stock outstanding on the record date is entitled to one vote on each other matter. For the election of the directors, the nominees to serve as directors will be elected by a plurality of the votes cast by the stockholders entitled to vote at the election. You may vote “For” or “Withhold” with respect to the director nominees. 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. With respect to the ratification of the appointment of our independent registered audit firm, the advisory vote to approve the compensation of our named executive officers and approval of the 2023 Equity Incentive Plan, approval of the proposals requires the affirmative vote of a majority in voting power of the shares present at the meeting or represented by proxy and entitled to vote on the matters. Because the vote on compensation of named executive officers is advisory, it will not be binding upon our board of directors. Lastly, the approval of the amendment to Article VI to our Second Amended and Restated Certificate of Incorporation to allow for the removal of directors with or without cause requires the affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of the outstanding shares entitled to vote on the matter.
4     Paylocity 2024 Proxy Statement

 
Table of Contents
Solicitation and Voting

Effect of Abstentions and Broker Non-Votes
Broker non-votes, if any, and shares voted “Withhold” will have no effect on the election of the directors. For each of the other proposals, broker non-votes, if any, will not be counted in determining the number of votes cast and will have no effect on the approval of these proposals, but abstentions will have the same effect as negative votes. Proposal No. 2 is a routine matter, and no broker non-votes are expected to exist in connection with Proposal No. 2. If your shares are held in an account at a bank or brokerage firm, that bank or brokerage firm may vote your shares of common stock on Proposal No. 2 regarding ratification of our independent auditors but will not be permitted to vote your shares of common stock with respect to Proposal Nos. 1, 3, 4 and 5, unless you provide instructions as to how your shares should be voted. If an executed proxy card is returned by a bank or broker holding shares, which indicates that the bank or broker has not received voting instructions and does not have discretionary authority to vote on the proposals, the shares will not be considered to have been voted in favor of the proposals. Your bank or broker will vote your shares on Proposal Nos. 1, 3, 4 and 5 only if you provide instructions on how to vote by following the instructions they provide to you. Accordingly, we encourage you to vote promptly, even if you plan to attend the virtual annual meeting. In tabulating the voting results for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal.
Voting Instructions
If you complete and submit your proxy card or voting instructions, the persons named as proxies will follow your voting instructions. If no choice is indicated on a signed and dated proxy card, the shares will be voted as the board recommends on each proposal as follows: “FOR” the election of each of the nominees named herein, “FOR” the ratification of the appointment of our independent auditors, "FOR" the advisory approval of our named executive officers, "FOR" the approval of 2023 Equity Incentive Plan and "FOR" the approval of the amendment to Article VI of our Second Amended and Restated Certificate of Incorporation. Many banks and brokerage firms have a process for their beneficial owners to provide instructions via telephone or the Internet. The voting instruction form that you receive from your bank or broker will contain instructions for voting.
Depending on how you hold your shares, you may vote in one of the following ways:
Stockholders of Record: You may vote by either marking, signing and returning the enclosed proxy card or via the instructions included in your Notice or using telephone or Internet voting. You may also vote online during the virtual annual meeting.
Beneficial Stockholders: Your bank, broker or other holder of record will provide you with a voting instruction form for you to use to instruct them on how to vote your shares. Check the instructions provided by your bank, broker or other holder of record to see which voting options are available to you. However, since you are not the stockholder of record, you may not vote your shares at the virtual annual meeting unless you request and obtain a valid, “legal” proxy from your bank, broker or other agent.
Votes submitted by telephone or via the Internet must be received by 11:59 p.m. Eastern Time on November 29, 2023. Submitting your proxy by mail or telephone or via the Internet will not affect your right to vote online should you decide to attend the virtual annual meeting.
If you are a stockholder of record, you may revoke your proxy and change your vote at any time before the polls close by returning a later-dated proxy card, by voting again by Internet or telephone as more fully detailed in your Notice or proxy card or by delivering written instructions to the Corporate Secretary before the annual meeting. Attendance at the virtual annual meeting will not in and of itself cause your previously voted proxy to be revoked unless you specifically so request or vote again at the annual meeting. If your shares are held in an account at a bank, brokerage firm or other agent, you may change your vote by submitting new voting instructions to your bank, brokerage firm or other agent, or, if you have obtained a “legal” proxy from your bank, brokerage firm or other agent giving you the right to vote your shares, by attending the virtual annual meeting and voting online.
Paylocity 2024 Proxy Statement     5

 
Table of Contents
Solicitation and Voting
Solicitation of Proxies
We will bear the cost of soliciting proxies. In addition to soliciting stockholders by mail, we will request banks, brokers and other intermediaries holding shares of our common stock beneficially owned by others to obtain proxies from the beneficial owners and will reimburse them for their reasonable, out-of-pocket costs for forwarding proxy and solicitation material to the beneficial owners of common stock. We may use the services of our officers, directors and employees to solicit proxies, personally or by telephone, without additional compensation.
Voting Results
We will announce preliminary voting results at the virtual annual meeting. We will report final results in a Current Report on Form 8-K filed with the SEC within four business days of the annual meeting.

6     Paylocity 2024 Proxy Statement

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Table of Contents



Proposal No. 1
Election of Directors
Our second amended and restated certificate of incorporation and bylaws provide for the election of directors for one-year terms. The terms of our existing directors will expire on the date of the 2024 annual meeting. Accordingly, ten persons are to be elected to serve as directors of the board of directors at the meeting. The board’s nominees for election by the stockholders to those ten positions are the ten current members of the board of directors: Steven R. Beauchamp, Linda M. Breard, Virginia G. Breen, Jeffrey T. Diehl, Robin L. Pederson, Andres D. Reiner, Kenneth B. Robinson, Steven I. Sarowitz, Ronald V. Waters III and Toby J. Williams. If elected, the nominees will serve as directors until our 2025 annual meeting of stockholders. If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as we may designate. The proxies cannot vote for more than ten persons.
The ten nominees for director receiving the highest number of votes of shares of common stock will be elected as directors. A “Withhold” vote will have no effect on the vote.
We believe that each of our directors has demonstrated business acumen, ethical integrity and an ability to exercise sound judgment as well as a commitment of service to us and our board of directors.
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The Board of Directors unanimously recommends that you vote “FOR” the election of Steven R. Beauchamp, Linda M. Breard, Virginia G. Breen, Jeffrey T. Diehl, Robin L. Pederson, Andres D. Reiner, Kenneth B. Robinson, Steven I. Sarowitz, Ronald V. Waters III and Toby J. Williams as directors to hold office until the 2025 annual meeting. Proxies will be so voted unless stockholders specify otherwise in their proxies.
The nominees for directors to be elected at this meeting, and certain information about them as of October 20, 2023, is set forth below. Also set forth below are the specific experience, qualifications, attributes or skills that led our nominating and corporate governance committee to conclude that each person should serve as a director.
NamePositionAgeDirector Since
Steven R. BeauchampCo-Chief Executive Officer and Director512007
Linda M. BreardDirector542023
Virginia G. BreenDirector592018
Jeffrey T. DiehlDirector532008
Robin L. PedersonDirector642020
Andres D. ReinerDirector522014
Kenneth B. RobinsonDirector682020
Steven I. SarowitzChairman571997
Ronald V. Waters IIIDirector712013
Toby J. WilliamsPresident, Co-Chief Executive Officer and Director502022
Paylocity 2024 Proxy Statement     7

 
Table of Contents
Proposal No. 1 Election of Directors
Nominees for Election to a One-Year Term Expiring at the 2025 Annual Meeting of Stockholders
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Steven R. Beauchamp
Co-Chief Executive Officer
and Director
Age: 51
Director Since:
2007
Committees:
None
Biography
Steven R. Beauchamp is our Co-Chief Executive Officer and a director. Prior to joining Paylocity in 2007, Mr. Beauchamp was employed by Paychex, Inc., from September 2002 to August 2007 and served as VP of Product Management and as a Corporate Officer. Mr. Beauchamp also served as Vice President of Payroll Operations for Advantage Payroll Services, Inc. from August 2001 to September 2002 after Advantage Payroll acquired Payroll Central where he served as President from May 1999 to August 2001. Mr. Beauchamp also spent three years in operations management with ADP Canada from May 1995 to April 1998. Mr. Beauchamp holds a B.B.A. from Wilfrid Laurier University and a M.B.A. from Queen’s University. Mr. Beauchamp brings to our board of directors over 20 years of experience in management positions in payroll services companies, and his experience and familiarity with our business as our Co-Chief Executive Officer.
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Linda M. Breard
Independent
Age: 54
Director Since: 2023
Committees: Audit
Other Current Public
Company Boards:
Insight Enterprises, Inc.,
PotlatchDeltic Corporation
Biography
Linda M. Breard has served as a director since October 2023. Ms. Breard currently serves as a director of Insight Enterprises, Inc., a publicly traded Fortune 500 global technology company since February 2018, where she is chair of the audit committee and serves on the compensation committee. Ms. Breard also serves as a director for PotlatchDeltic Corporation, a publicly traded forest products company, since October 2015, where she is chair of the audit committee and a member of the compensation committee. Ms. Breard had been a consultant with Impinj, a publicly traded technology company, from March 2018 through December 2020. She served as CFO Consultant/Interim CFO of Impinj until a CFO was hired in 2020, after which she transitioned to a new role as Strategic Consultant to the CEO, where she had continued responsibility for human resources, IT and facilities and worldwide operations through the end of 2020. From February 2017 to July 2017, she served as the Executive Vice President and Chief Financial Officer of Kaiser Foundation Health Plan of Washington, which provides health insurance and medical care. Prior to that, from February 2016 to January 2017, Ms. Breard was the Executive Vice President and Chief Financial Officer of Group Health Cooperative, a health maintenance organization until it was acquired by Kaiser Permanente in February 2017. From 2006 to January 2016, she held various positions including Senior Vice President and Chief Financial Officer of Quantum Corporation, a leading data storage company. Prior to that, from 1998 to 2006, she served in a variety of roles for Advanced Digital Information Corporation, a publicly traded technology company, last serving as Vice President, Global Accounting and Finance before being acquired by Quantum Corporation in 2006. Ms. Breard also worked six years in public accounting and is a certified public accountant. Ms. Breard brings to our board of directors international, financial and information technology expertise derived primarily from her service on various public company boards and in various roles at several large public companies.
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Table of Contents
Proposal No. 1 Election of Directors
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Virginia G. Breen
Independent
Age: 59
Director Since: 2018
Committees: Audit
& Nominating and
Corporate Governance
Biography
Virginia G. Breen has served as a director since September 2018. Ms. Breen has been an institutional investor and board member in private and public equity for more than 30 years. Ms. Breen has served as a trustee of NB Crossroads Private Market Fund VII Holdings, LLC since April 2021, NB Crossroads Private Markets Access Fund LLC since October 2020 and NB Crossroads Private Markets Fund VI Holdings, LLC since February 2020. Ms. Breen has served as a trustee, and, since April 2017, as a director of NB Crossroads Private Markets Fund V Holdings LLC. Additionally, she has served as a director of NB Crossroads Private Markets Fund IV Holdings LLC since November 2015. Since July 2015, Ms. Breen has served as a director of Excelsior Private Markets Fund II, LLC and Excelsior Private Markets Fund III, LLC. Ms. Breen has also served as a director of UST Global Private Markets Fund, LLC since its inception in July 2008 until its sale in January 2021. Ms. Breen previously served as a director of Excelsior Buyout Investors, LLC since its inception in May 2003 until its sale in December 2013. Since 2008, Ms. Breen has served on the board of managers of the UBS A&Q Fund Complex, consisting of three portfolios, each of which is or was registered under the Investment Company Act of 1940, as amended. Since July 2023, Ms. Breen has served on the board of the UBS NY Fund Cluster consisting of four separate registered investment companies overseen by boards of trustees, with 38 separate series/funds. Since 2015, Ms. Breen has served as a trustee for the Calamos Fund Complex consisting of 29 portfolios. Ms. Breen has also served as a director of Tech and Energy Transition Corp. from 2021 to 2023, and as a trustee of Jones Lang LaSalle Income Property Trust, a public, non-traded, daily-priced REIT from 2004 to 2023. Ms. Breen holds an M.B.A. from Columbia University and an A.B. in Computer Science from Harvard College. Ms. Breen's experience working with technology-driven and high-growth companies provides our board of directors with a unique perspective on our long-term strategy.
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Jeffrey T. Diehl
Independent
Age: 53
Director Since: 2008
Committees:
Nominating and
Corporate Governance
(Chair)

Other Current Public
Company Boards:
Q2 Holdings, Inc.
Biography
Jeffrey T. Diehl has served as a director since May 2008. Mr. Diehl is currently the Managing Partner & Head of Investments at Adams Street Partners, LLC, a global private equity investment management firm. Prior to joining Adams Street Partners in 2000, Mr. Diehl worked at Brinson Partners/UBS Global Asset Management and The Parthenon Group. Mr. Diehl serves as a director of various private companies and has served as a director of Q2 Holdings, Inc., a publicly traded virtual banking solutions company, since 2007. Mr. Diehl holds a B.S. from Cornell University and a M.B.A. from Harvard University. Mr. Diehl brings to our board of directors years of experience as an advisor to a wide range of technology companies, including companies in the software, IT-enabled business services and consumer Internet/media sectors. Mr. Diehl’s experience with the growth and development of technology companies provides our board of directors with a unique perspective on our long-term strategy.
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Table of Contents
Proposal No. 1 Election of Directors
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Robin L. Pederson
Independent
Age: 64
Director Since:
2020
Committees:
Compensation (Chair)
Biography
Robin L. Pederson has served as a director since March 2020. Mr. Pederson currently serves as Executive Chairman of Sauce Labs, a web and mobile application testing company. He also serves as an independent director of Affinitiv, a provider of automotive marketing solutions and Aircall, a cloud-based call center software company. From August 2017 to September 2023, Mr. Pederson served as Executive Chairman of Alula, a smart security and automation system company, and he served as Executive Chairman of Power Reviews, a technology provider of ratings and reviews for leading brands and retailers from April 2018 to August 2023. From 2013 to 2017, he served as an Operating Executive at Marlin Equity Partners (“Marlin”), a global investment firm with over $6.7 billion of capital under management. During that time, he successfully led the acquisitions of five platforms and served as Executive Chairman of technology companies, including Arcserve, Changepoint, Fidelis Cybersecurity, Lochbridge, Uniface, Openwave Messaging and Openwave Mobility. Prior to his time at Marlin, Mr. Pederson served as the COO of Infor Global Solutions, one of the largest privately held software companies in the world. Mr. Pederson holds a B.S.B.A from the University of North Dakota. Mr. Pederson brings extensive industry experience to our board of directors as a result of his executive management experience in the technology industry.
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Andres D. Reiner
Independent
Age: 52
Director Since:
2014
Committees:
Compensation &
Nominating and
Corporate Governance

Other Current Public
Company Boards:
PROS Holdings, Inc.
Biography
Andres D. Reiner has served as a director since September 2014. Since 2010, Mr. Reiner has served as the President and Chief Executive Officer and a director of PROS Holdings, Inc. (“PROS”), an enterprise software company. Since 1999, and prior to his appointment as President and Chief Executive Officer, Mr. Reiner held a series of positions with PROS, including Senior Vice President of Product Development and Executive Vice President of Product and Marketing. Prior to joining PROS, Mr. Reiner held various technical and management positions in technology companies including Platinum Technology, ADAC Healthcare Information Systems, and Kinesix. Mr. Reiner holds a B.S. in Computer Science with a minor in Mathematics from the University of Houston. Mr. Reiner brings to our board of directors leadership experience through his role as President and Chief Executive Officer of PROS, as well as knowledge and experience with product development and innovation at technology companies.
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Table of Contents
Proposal No. 1 Election of Directors
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Kenneth B. Robinson
Independent
Age: 68
Director Since:
2020
Committees:
Audit
Other Current Public
Company Boards:
Abercrombie & Fitch Co.,
Occidental Petroleum
Company
Biography
Kenneth B. Robinson has served as a director since March 2020. Mr. Robinson was the Senior Vice President of Audit Services at Exelon Corporation, an integrated power and utility company, from 2016 to 2020. Prior to Exelon, Mr. Robinson spent almost 40 years at The Procter & Gamble Company in a variety of senior finance leadership roles, including Chief Financial Officer – Global Personal Beauty Care and Global Chief Audit Executive. Mr. Robinson served from 2016 to 2020 as a Trustee of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board and the Governmental Accounting Standards Board. Mr. Robinson currently serves as a director of Abercrombie & Fitch Co., Occidental Petroleum Company and as Trustee of the International Financial Reporting Standards Board. Mr. Robinson holds a B.S. from Mississippi State University and a M.B.A. from the University of Memphis. Mr. Robinson brings executive management experience, including significant experience in the areas of financial and accounting expertise, to our board of directors.
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Steven I. Sarowitz
Chairman of the Board
Age: 57
Director Since: 1997
Committees: None
Biography
Steven I. Sarowitz founded Paylocity in 1997 and is our Chairman. Mr. Sarowitz was the Chief Executive Officer of Blue Marble Payroll, an international payroll aggregator, prior to its acquisition by Paylocity in August 2021. In addition, Mr. Sarowitz is a Director of Payescape, a UK payroll provider, and a partner in Wayfarer Studios, Wayfarer Entertainment, Wayfarer Theaters, and 4S Bay Partners. He also serves on the boards of Julian Grace Foundation, Wayfarer Foundation, Raising Haiti, Chicago Center for Arts & Technology, and Indiana University Women's Philanthropy Institute. Prior to founding Paylocity, Mr. Sarowitz worked at Robert F. White, a Chicago-based independent payroll service firm. He later was an executive at three privately-held payroll companies. Mr. Sarowitz formerly served as President of the Independent Payroll Providers Association. Mr. Sarowitz holds a B.A. in Economics from the University of Illinois at Urbana. Mr. Sarowitz brings to our board of directors extensive executive leadership and operational experience in payroll services companies, and his experience and familiarity with our business as the founder and Chairman.
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Table of Contents
Proposal No. 1 Election of Directors
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Ronald V. Waters III
Lead Independent
Age: 71
Director Since:
2013
Committees:
Audit
(Chair), Compensation
& Nominating and
Corporate Governance
Other Current Public
Company Boards:

Fortune Brands

Innovations, Inc.
Biography
Ronald V. Waters III has served as a director since November 2013 and also serves as the Lead Independent Director. Mr. Waters has been an independent business consultant since May 2010. From 2009 to May 2010, he was a Director and the President and Chief Executive Officer of LoJack Corporation ("LoJack"), a worldwide marketer of wireless tracking and recovery systems for valuable mobile assets, and from 2007 to 2008, he was a Director and the President and Chief Operating Officer of LoJack. He is a director of Fortune Brands Innovations, Inc., formerly known as Fortune Brands Home & Security, Inc., a home and security products company. From 2002 to May 2022, Mr. Waters served as a director of HNI Corp., a manufacturer of office furniture and a manufacturer and marketer of gas- and wood-burning fireplaces. From 2012 to 2015, Mr. Waters served as a director of Chiquita Brands International, Inc., an international marketer and distributor of food products. From 2006 to 2007, Mr. Waters served as a director of Sabre Holdings Corporation. Mr. Waters brings to our board of directors leadership experience through his former role as Chief Executive Officer of LoJack and significant finance expertise derived primarily from his current service on the audit committees of one other public company and previous roles as a director and Chief Operating Officer at a public company, Chief Financial Officer at Wm. Wrigley Jr. Company, Controller at The Gillette Company and partner at KPMG LLP. Mr. Waters also brings to our board of directors international, legal and information technology expertise derived primarily from his service in various roles at several large public companies.
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Toby J. Williams
President, Co-Chief Executive Officer and Director
Age: 50
Director Since: 2022
Committees:
None
Biography
Toby J. Williams is our President and Co-Chief Executive Officer and has served as a director since March 2022. Prior to joining Paylocity as our Chief Financial Officer in September 2017, from February 2011 until August 2017, Mr. Williams held several positions at Ellucian, Inc., a provider of higher education software and services, most recently as Chief Product and Strategy Officer. Prior to joining Ellucian, Mr. Williams was the Director of Corporate Development of Paychex, Inc., a provider of human capital management solutions, from March 2006 to January 2011. Before joining Paychex, Mr. Williams was a senior associate in the investment banking division of Citigroup Global Markets Inc., an investment banking firm, from September 2004 to January 2006. From 1999 to 2004, Mr. Williams was an associate in private law practice, most recently with Holland & Knight LLP from 2002 until 2004. Mr. Williams holds a B.A. in Business Administration and Political Science from Houghton College and a M.B.A. and J.D. from The Ohio State University. Mr. Williams brings to our board of directors experience in management positions at technology and payroll services companies, and his experience and familiarity with our business as Chief Financial Officer and as President and Co-Chief Executive Officer.
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Table of Contents
Corporate
Governance
Director Independence
Our board of directors has determined that each of Mses. Breard and Breen and Messrs. Diehl, Pederson, Reiner, Robinson and Waters is an “independent director” for purposes of the Nasdaq Listing Rules and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as the term relates to membership on the board of directors.
The definition of independence under the rules of the Nasdaq Global Select Market (the “Nasdaq Listing Rules”) includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his or her family members, has engaged in various types of business dealings with us. In addition, as further required by the Nasdaq Listing Rules, our board has made a subjective determination as to each independent director that no material relationships exist that, in the opinion of our board, would interfere with his or her exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our board reviewed and discussed information provided by the directors in questionnaires with questions tailored to the Nasdaq Listing Rules with regard to each director’s business and personal activities as they may relate to us and our management.
Board of Directors Leadership Structure
The board of directors has adopted corporate governance guidelines to promote the functioning of the board and its committees. These guidelines address board composition, board functions and responsibilities, qualifications, leadership structure, committees and meetings.
Our Corporate Governance Guidelines do not contain a policy mandating the separation of the offices of the Chairman of the Board and the Co-Chief Executive Officers, and the board is given the flexibility to select its Chairman and our Co-Chief Executive Officers in the manner that it believes is in the best interests of our stockholders. Accordingly, the Chairman and the Chief Executive Officer or Co-Chief Executive Officers may be filled by one, two or three individuals. The board has chosen to separate the positions of Chairman of the Board and Co-Chief Executive Officers. We believe this structure is optimal for us because it avoids any duplication of effort between the Chairman and the Co-Chief Executive Officers and permits our Co-Chief Executive Officers to focus their efforts on the day-to-day management of the Company. This separation provides strong leadership for the board and the Company through the Chairman, while also positioning our Co-Chief Executive Officers as our leaders in the eyes of our employees and other stakeholders. The board may reconsider the best board leadership structure for us from time to time.
Risk Management
Our risk management function is overseen by our board of directors. Through our management reports and company policies, such as our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and our board committees' review of the Company's major financial, operational, data privacy, cyber and data security, legal and regulatory, and other risks, we keep our board of directors apprised of material risks and provide our directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect us and how our management addresses those risks. Mr. Beauchamp and Mr. Williams, as our Co-Chief Executive Officers, work with our independent directors and with management when material risks are identified by the board of directors or management to address such risk. If the identified risk poses an actual or potential conflict with management, our independent directors would conduct an assessment by themselves.
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Table of Contents
Corporate Governance
Corporate Social Responsibility
Paylocity is committed to advancing our efforts around social and environmental responsibility, and corporate governance. We continually invest in programs that help us grow in the essential areas of diversity, equity, inclusion, and accessibility, as well as environmental sustainability and awareness. During the past year, we created our Environmental, Social, and Governance (ESG) Council to guide us on our journey. This council provides the ESG-related reporting and metrics that help inform our decision-making and also helps guide the important work happening across the organization to enhance our ongoing ESG efforts. For additional information regarding our corporate social responsibility initiatives, please visit our Corporate Social Responsibility website at https://www.paylocity.com/who-we-are/about-us/corporate-responsibility.
Culture & Engagement
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We strive to be an organization where every employee has a voice, feels welcomed and is empowered to do their best work. Our core values drive our culture – we believe in earning it every day, that growth fuels opportunity, thinking next generation, living the reputation, and being unbeatable together. Our core values serve as the foundation from which we create an engaging culture for our employees, how we train and develop our teams and how we identify the right talent for our organization. Our approach to drive a strong culture and employee engagement has been validated externally as Paylocity has been named Forbes 2023 Best Employers for Diversity, Forbes 2023 Best Employers for Women, and was also certified Great Place To Work on multiple occasions.
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We support a number of employee resource groups including PCTY Equality, which focuses on fostering a positive work environment and providing support for employees and allies of the LGBTQIA+ community, our PCTY OneWorld group, which fosters an inclusive work environment and provides support for our employees of diverse ethnic backgrounds, PCTY Sheroes, which supports and celebrates women, PCTY Sustainability, whereby our employees support initiatives to operate our business and facilities to conserve energy, water and raw materials, and PCTY Mental Health, which promotes a psychologically safe and healthy workplace where employees bring their whole selves to work and their mental well-being is supported. Each of these groups is organized to give employees the chance to build community and connections, voice their ideas and perspectives, personally develop and grow, and shape our culture to make a difference at work and in our local communities.
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We also give back to our local communities through our PCTY Gives programs. Through PCTY Gives, we mobilize our technology, people and resources across the country through in-kind donations, our Elevate Your Passions (“EYP”) Grant Program, Volunteers in Action paid time-off, signature program funding, corporate sponsored volunteerism and many other initiatives. To support our employees and their communities, each quarter we donate to qualified 501(c)(3) charities nominated by our employees through the EYP program. In addition to local charities, Paylocity partners with national organizations such as Big Brothers Big Sisters of America, American Red Cross, National Alliance on Mental Illness and Feeding America. To support the children of Paylocity employees, the Peter J. McGrail Scholarship program, named after our late CFO, provides higher education tuition assistance for selected participants.
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Table of Contents
Corporate Governance
Diversity & Inclusion
Our ongoing dedication to diversity, equity, inclusion and accessibility ("DEIA") is foundational to our culture. We remain committed to increasing the representation of minority groups within our organization, including in leadership roles, and we directly focus on these goals within our talent acquisition and employee development efforts. Our focus includes attracting diverse candidates to our organization while also investing in professional development and mentorship programs focused on underrepresented employee groups. We provide full transparency to our DEIA-related data and our metrics are available on our website. We are also proud of the ongoing efforts of our Diversity Leadership Council ("DLC"), led by our Chief Diversity Officer. The DLC consists of cross-functional leaders at the VP and director level who represent and reflect our diversity. They collaborate to provide strategic management and direction around inclusion, diversity, and accessibility, and partner with our DEIA Team and employees resource groups to work toward our goals as an organization.
To support our DEIA efforts, we offer a curriculum known as "BRIDGE” (Belonging, Respect, Inclusion, Diversity, Generosity, and Equity), that delivers training content related to topics such as unconscious bias, inclusive leadership and building diverse teams. Our curriculum is designed with the needs of both our employees and clients in mind, with content widely available via our Learning tools. We also strive to cultivate the most inclusive workplace culture possible. Our employee self-identification functionality allows employees to self-identify in areas such as disability, race, ethnicity, gender, gender identity, veteran status, sexual orientation, and personal pronouns. This data provides an accurate view of our diverse workforce so we can better customize, fund, and initiate specialized programming, accommodations and strategies.
Sustainability
The PCTY Sustainability employee resource group is a group of employees from across the business whose mission is to foster sustainable practices throughout our business and the lives of our employees. We also have a Sustainability Task Force that has a goal of boosting sustainability in all Paylocity business activities. Led by the Sustainability employee resource group and task force, we continually strive to conserve energy, water and raw materials at all of our offices. We carefully examine all aspects of our business for new ways to go green. These actions add up for a big impact that supports the sustainability of our communities and planet. We have harnessed the creativity and input of our employees to identify new sustainability initiatives, both large and small, across our business to drive positive impacts. We are focused on operating our business and our facilities in ways that conserve energy, water, and raw materials.
Governance
We also believe in responsible corporate governance, which is driven by both our executive management team and our board of directors. Our executive team and our board of directors play a critical role in driving our core values from the top down and has established corporate governance policies and procedures that guide our decisions and strategy. Our board and our executive team are committed to creating long-term value for our company and stockholders while promoting transparency and adhering to the highest ethical values.
The board, along with our executive management team, is also focused on risk management across our business, including the protection of our clients’ sensitive data. Data and cyber security are at the forefront of our risk management efforts, led by our Chief Compliance & Risk Officer and a dedicated information security team, led by our Chief Information Security Officer. We hold an ISO 27001 certification, undergo annual SSAE 18 audits for SOC1 and SOC2, and we are continuously investing in our information security efforts, including advanced monitoring technologies on all levels of our applications and infrastructure.
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Table of Contents
Corporate Governance
Executive Sessions and Lead Independent Director
Non-management directors generally meet in executive session each time the board of directors holds a regularly scheduled meeting. The board’s policy is to hold executive sessions without the presence of management as a part of all regular board meetings, and, in any event, at least twice during each calendar year. The Company’s Corporate Governance Guidelines provide that a non-management independent director shall be chosen to preside at each executive session.
The board of directors has elected a non-management director to serve in a lead capacity (“Lead Independent Director”) to coordinate the activities of the other non-management directors, and to perform any other duties and responsibilities that the board of directors may determine. While the board annually elects a Lead Independent Director, it is generally expected that he or she will serve for more than one year. Our current Lead Independent Director is Ronald V. Waters III.
The role of the Lead Independent Director includes:
presiding at non-management executive sessions, with the authority to call meetings of the independent directors;
presiding at executive sessions;
functioning as principal liaison on board-wide issues between the independent directors and the Chairman; and
if requested by stockholders, ensuring that he/she is available, when appropriate, for consultation and direct communication.
Meetings of the Board of Directors and Committees
The board of directors held four meetings during the fiscal year ended June 30, 2023. The board of directors has three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Directors are expected to attend at least 75% of the total number of meetings of the board and the committees of the board they serve upon during a given period. Each director attended at least 75% of the total number of meetings of the Board and of any Board committees of which he or she was a member during fiscal 2023, other than Ms. Breard, who joined the Board in fiscal 2024.
The following table sets forth the standing committees of the board of directors, the members of each committee and the Lead Independent Director as of the date that this Proxy Statement was first made available to our stockholders:
Name of DirectorAuditCompensationNominating and
Corporate Governance
Lead Independent
Director
Steven R. Beauchamp
Linda M. Breard
Virginia G. Breen
Jeffrey T. Diehl
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Robin L. Pederson
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Andres D. Reiner
Kenneth B. Robinson
Steven I. Sarowitz
Ronald V. Waters III
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Toby J. Williams
MemberChair
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Ellen Carnahan served on the board of directors, audit committee and compensation committee until her resignation on August 31, 2023. Robin Pederson was appointed as Chair of the compensation committee on September 15, 2023. Linda M. Breard was appointed as a director and member of the audit committee on October 4, 2023.
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Table of Contents
Corporate Governance
Audit Committee
Members
Ronald V. Waters III
Independent
(Chair)
Linda M. Breard
Independent
Virginia G. Breen
Independent
Kenneth B. Robinson
Independent
Meetings during the fiscal year ended June 30, 2023: 4
Report of the Audit Committee: Page 27
Committee Independence and Expertise
Our board of directors has determined that each member of the audit committee is independent for purposes of the Nasdaq Listing Rules and SEC rules and regulations as they apply to audit committee members. Our board of directors has determined that each of Mses. Breard and Breen and Messrs. Robinson and Waters meet the requirements for financial literacy and sophistication, and that Mr. Waters qualifies as an “audit committee financial expert,” under the applicable requirements of the Nasdaq Listing Rules and SEC rules and regulations. The composition of our audit committee complies with all applicable requirements in the Nasdaq Listing Rules and SEC rules and regulations.
Principal Responsibilities
The functions of the audit committee include the following:
selecting a firm to serve as the independent registered public accounting firm to audit our financial statements;
ensuring the independence of the independent registered public accounting firm;
discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and that firm, our interim and year-end operating results;
overseeing the overall enterprise risk management framework, reviewing our financial, operational, data privacy, cybersecurity, legal and regulatory risks and other company-wide risk exposures, and processes to manage those risks.
establishing procedures for employees to submit anonymously concerns about questionable accounting or audit matters;
considering the adequacy of our internal controls;
reviewing material related party transactions or those that require disclosure; and
approving or, as permitted, pre-approving all audit and non-audit services to be performed by the independent registered public accounting firm.
The audit committee’s specific responsibilities are set forth in its charter, which the audit committee reviews at least annually. The audit committee has the responsibility and authority to oversee the accounting and financial reporting processes of the Company, the integrity of the financial reports and other financial information and the audits of the Company’s financial statements. The audit committee also reviews the qualifications, independence and performance, and approves the terms of engagement of the Company’s independent auditor. The audit committee also reviews the performance of the Company’s internal audit function and prepares any reports required of the audit committee under SEC rules and regulations.
Additional information regarding the audit committee is set forth in the Report of the Audit Committee immediately following Proposal No. 2.
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Table of Contents
Corporate Governance
Compensation Committee
Members
Robin L. Pederson
Independent
(Chair)
Andres D. Reiner
Independent
Ronald V. Waters III
Independent
Meetings during the fiscal year ended June 30, 2023: 5
Report of the Compensation Committee: Page 44
Committee Independence
Our board of directors has determined that each member of the compensation committee is independent for purposes of the Nasdaq Listing Rules, is a non-employee director, as defined by Rule 16b-3 promulgated under the Exchange Act, and is an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code, as amended.
Principal Responsibilities
The functions of the compensation committee include the following:
reviewing and approving, or recommending that our board of directors approve, the compensation of our executive officers;
reviewing and recommending to our board of directors the compensation of our directors;
reviewing and recommending to our board of directors the terms of any compensatory agreements with our executive officers;
administering our stock and equity incentive plans;
reviewing and approving, or making recommendations to our board of directors with respect to, incentive compensation and equity plans; and
reviewing our overall compensation philosophy.
The compensation committee and board of directors believe that attracting, retaining and motivating our employees, and particularly the Company’s senior management team and key operating personnel, are essential to Paylocity’s performance and enhancing stockholder value. The compensation committee will continue to administer and develop our compensation programs in a manner designed to achieve these objectives.
The compensation committee’s specific responsibilities are set forth in its charter, which the compensation committee reviews at least annually. The compensation committee reviews and recommends policies relating to compensation and benefits of our officers and employees. The compensation committee reviews and approves corporate goals and objectives relevant to compensation of our Co-Chief Executive Officers and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and recommends the compensation of these officers based on such evaluations. The compensation committee also administers the issuance of stock options and other awards under our equity compensation plans.
Ellen Carnahan served as the Chair of the compensation committee until her resignation from our board of directors on August 31, 2023. Robin L. Pederson was appointed as the Chair of the compensation committee on September 15, 2023.
Independent Consultant
The compensation committee engages Compensia, Inc. (“Compensia”) to provide independent compensation consulting support. Compensia has provided market information on compensation trends and practices and makes compensation recommendations based on competitive data of a peer group of companies. Compensia is also available to perform special projects at the compensation committee’s request. Compensia provides analyses and recommendations that inform the compensation committee’s decisions but does not decide or approve any compensation actions. As needed, the compensation committee also consults with Compensia on other compensation-related matters, which for fiscal 2023 included a review of total cash and all stock-based compensation for Paylocity’s executive officers and board of directors. Compensia also provided guidance on executive and board of director stock ownership guidelines. The engagement of any compensation consultant rests exclusively with the compensation committee, which has sole authority to retain and terminate any compensation consultant or other advisor that it uses.
The compensation committee has assessed the independence of Compensia and concluded that no conflicts of interest exist that would prevent Compensia from providing independent and objective advice to the compensation committee.
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Table of Contents
Corporate Governance
Nominating and Corporate Governance Committee
Members
Jeffrey T. Diehl
Independent
(Chair)
Virginia G. Breen
Independent
     
Andres D. Reiner
Independent
Ronald V. Waters III
Independent
Meetings during the fiscal year ended June 30, 2023: 4
Committee Independence
Our board of directors has determined that each member of the nominating and corporate governance committee is independent for purposes of the Nasdaq Listing Rules and under applicable SEC rules and regulations.
Principal Responsibilities
The functions of the nominating and corporate governance committee include the following:
identifying and recommending candidates for membership on our board of directors;
reviewing and recommending our corporate governance guidelines and policies;
reviewing proposed waivers of the code of conduct for directors and executive officers;
overseeing the process of evaluating the performance of our board of directors;
overseeing and reviewing programs and initiatives relating to environmental, social and governance matters; and
assisting our board of directors on corporate governance matters.
The nominating and corporate governance committee’s specific responsibilities are set forth in its charter, which the nominating and corporate governance committee reviews at least annually. The nominating and corporate governance committee has the responsibility and authority to identify, select or recommend candidates for membership on the board of directors, consider committee member qualifications, appointment and removal, recommend corporate governance principles and oversee the evaluation of the board of directors and each committee.
Director Nominations
Our nominating and corporate governance committee is responsible for, among other things, assisting our board of directors in identifying qualified director nominees and recommending nominees for each annual meeting of stockholders. The nominating and corporate governance committee’s goal is to assemble a board that brings to Paylocity a diversity of experience in areas that are relevant to our business and that complies with the Nasdaq Listing Rules and applicable SEC rules and regulations. While we do not have a formal diversity policy for board membership, the nominating and corporate governance committee generally considers the diversity of nominees in terms of knowledge, experience, background, skills, expertise, gender, race, ethnicity and other demographic factors. When considering nominees for election as directors, the nominating and corporate governance committee reviews the needs of the board for various skills, background, experience and expected contributions and the qualification standards established from time to time by the nominating and corporate governance committee. The nominating and corporate governance committee believes that directors must also have an inquisitive and objective outlook and mature judgment. Director candidates must have sufficient time available in the judgment of the nominating and corporate governance committee to perform all board and committee responsibilities. Members of the board of directors are expected to rigorously prepare for, attend and participate in all meetings of the board and applicable committee meetings.
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Corporate Governance
Other than the foregoing and the applicable rules regarding director qualification, there are no stated minimum criteria for director nominees. Under the Nasdaq Listing Rules, at least a majority of the members of the board must meet the definition of “independence” and at least one director must be a “financial expert” under the Exchange Act and the Nasdaq Listing Rules and applicable SEC rules and regulations. The nominating and corporate governance committee also believes it appropriate for our Co-Chief Executive Officers to participate as members of the board of directors.
The nominating and corporate governance committee evaluates annually the current members of the board whose terms are expiring and who are willing to continue in service against the criteria set forth above in determining whether to recommend these directors for election. The nominating and corporate governance committee will assess regularly the optimum size of the board and its committees and the needs of the board for various skills, background and business experience in determining if the board requires additional candidates for nomination.
Candidates for director nominations come to our attention from time to time through incumbent directors, management, stockholders or third parties. These candidates may be considered at meetings of the nominating and corporate governance committee at any point during the year. Such candidates are to be evaluated against the criteria set forth above. If the nominating and corporate governance committee believes at any time that it is desirable that the board consider additional candidates for nomination, the committee may poll directors and management for suggestions or conduct research to identify possible candidates and may engage, if the nominating and corporate governance committee believes it is appropriate, a third-party search firm to assist in identifying qualified candidates.
Our bylaws permit stockholders to nominate directors for consideration at an annual meeting. The nominating and corporate governance committee will consider director candidates validly recommended by stockholders. For more information regarding the requirements for stockholders to validly submit a nomination for director, see “Stockholder Proposals or Nominations to Be Presented at Next Annual Meeting” elsewhere in this Proxy Statement.
Board Diversity
We believe it is important that our Board is composed of individuals reflecting the diversity represented by our employees, our clients, and our communities. We provide below enhanced disclosure regarding the diversity of our board members as of October 20, 2023, utilizing the template included in the final Nasdaq Rule 5606. To see our board diversity information as of October 20, 2022, please see our proxy statement filed with the SEC on October 20, 2022.
Gender: Female Male Non-Binary Gender
Undisclosed
Number of directors based on gender identity— — 
Number of directors who identify in any of the categories below:
African American or Black— — — 
Alaskan Native or American Indian— — — — 
Asian— — — — 
Hispanic or Latinx— — — 
Native Hawaiian or Pacific Islander— — — — 
White— — 
Two or More Races or Ethnicities— — — — 
LGBTQ+— — — — 
Undisclosed Demographic Background— — — — 
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Corporate Governance
Board Skills
In addition to the qualifications described above and the information regarding each director’s service as a director, business experience and other director positions held currently or during the last five years contained in the biography of each director, we seek to maintain a diverse set of skills on our Board. The table below illustrates how the board is well positioned to provide direction and oversight with respect to our overall performance, strategic direction and significant corporate policies.
Skills and/or Experience
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https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-name_Jeffrey-01.jpg
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https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-name_Andres-01.jpg
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-name_Kenneth-01.jpg
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-name_Steven_sarowitz-01.jpg
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-name_Ronald-01.jpg
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-name_toby-01.jpg
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Public Company Board Experience
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Executive Leadership and Business Operations
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Human Capital Management Industry Experience
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Software as a Service Industry Experience
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Cloud Technology Experience
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Enterprise Risk and Cybersecurity Management
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Accounting and Financial Expertise
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Strategic Planning and Mergers and Acquisitions
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Legal, Regulatory and Environmental, Social and Governance
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Corporate Governance
Compensation of Directors
Our directors are eligible to receive equity awards and cash retainers as compensation for service on our board of directors and committees of our board of directors. Under our director compensation package for fiscal 2023, our directors were entitled to receive a $35,000 annual retainer fee. The audit committee chairperson received an annual fee of $20,000, and members of the audit committee received an annual fee of $10,000. The compensation committee chairperson received an annual fee of $15,000, and members of the compensation committee received an annual fee of $7,500. The nominating and corporate governance committee chairperson received an annual fee of $10,000, and the members of the nominating and corporate governance committee received an annual fee of $5,000. The Lead Independent Director received an annual fee of $20,000.
We also grant members of our board of directors stock awards in addition to the cash compensation described above. In August 2022, the compensation committee of our board of directors approved a restricted stock unit grant entitling each director to receive that number of shares of our common stock equal to approximately $200,000 divided by the then 30 calendar day average closing price of our common stock on the applicable date of grant, which was August 15, 2022. These grants vested 25% quarterly, such that the grant vested in full on the first anniversary of the grant, provided that the director continued to serve as a director through such vesting dates.
The following table sets forth information concerning the compensation earned by each non-employee director who served during the last fiscal year. Our Co-Chief Executive Officers did not receive additional compensation for their service as directors and, consequently, no additional compensation is included in the table. The compensation received by our Co-Chief Executive Officers as employees is presented under “Compensation of Named Executive Officers—Summary Compensation Table.”
NameFees Earned
or Paid in Cash
($)
Stock
Awards
($)(1)
Total
($)
Virginia G. Breen$50,000 (2)$257,539 (10)$307,539 
Ellen Carnahan$60,000 (3)$257,539 (10)$317,539 
Jeffrey T. Diehl$45,000 (4)$257,539 (10)$302,539 
Robin L. Pederson$42,500 (5)$257,539 (10)$300,039 
Andres D. Reiner$47,500 (6)$257,539 (10)$305,039 
Kenneth B. Robinson$45,000 (7)$257,539 (10)$302,539 
Steven I. Sarowitz$35,000 (8)$257,539 (10)$292,539 
Ronald V. Waters III$87,500 (9)$257,539 (10)$345,039 
(1)Amounts represent the aggregate grant date fair value of restricted stock units granted during the year computed in accordance with ASC Topic 718. Assumptions used in calculating the amounts reported in this column are set forth in Note 16 “Benefit Plans” of the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Note that the amounts reported in this column reflect the accounting cost for these awards and do not correspond to the actual economic value that our directors may receive from the awards.
(2)Consists of $35,000 annual retainer fee for service on the board of directors, $10,000 annual fee for service on the audit committee and $5,000 annual fee for service on the nominating and corporate governance committee.
(3)Consists of $35,000 annual retainer fee for service on the board of directors, $10,000 annual fee for service on the audit committee and $15,000 annual fee for service as the chairwoman of the compensation committee. Ms. Carnahan resigned from her position on the board of directors, audit committee and compensation committee on August 31, 2023.
(4)Consists of $35,000 annual retainer fee for service on the board of directors and $10,000 annual fee for service as the chairman of the nominating and corporate governance committee.
(5)Consists of $35,000 annual retainer fee for service on the board of directors and $7,500 annual fee for service on the compensation committee. Mr. Pederson was appointed as Chair of the compensation committee on September 15, 2023.
(6)Consists of $35,000 annual retainer fee for service on the board of directors, $7,500 annual fee for service on the compensation committee and $5,000 annual fee for service on the nominating and corporate governance committee.
(7)Consists of $35,000 annual retainer fee for service on the board of directors and $10,000 annual fee for service on the audit committee.
(8)Consists of $35,000 annual retainer fee for service on the board of directors.
(9)Consists of $35,000 annual retainer fee for service on the board of directors, $20,000 annual fee for service as Lead Independent Director, $20,000 annual fee for service as the chairman of audit committee, $7,500 annual fee for service on the compensation committee and $5,000 annual fee for service on the nominating and corporate governance committee.
(10)Consists of 946 restricted stock units, all of which vested by August 15, 2023.
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Corporate Governance
Communications with Directors
Stockholders and other interested parties may communicate with the board of directors by mail addressed as follows:
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Board of Directors of Paylocity Holding Corporation
c/o Corporate Secretary
1400 American Lane
Schaumburg, Illinois 60173
Please indicate on the envelope that the correspondence contains a stockholder communication. All directors have access to this correspondence. In accordance with instructions from the board, the Corporate Secretary logs and reviews all correspondence and transmits such communications to the full board or individual directors, as appropriate. Certain communications, such as business solicitations, job inquiries, junk mail, patently offensive material or communications that present security concerns may not be transmitted, as determined by the Corporate Secretary.
Director Attendance at Annual Meetings
We attempt to schedule our annual meeting of stockholders at a time and date to accommodate attendance by our board of directors considering the directors’ schedules. All directors are encouraged to attend our annual meeting of stockholders. The board of directors, however, does not have a policy requiring director attendance at our annual meetings of stockholders. All of the directors attended our 2023 Annual Meeting of Stockholders.
Committee Charters and Other Corporate
Governance Materials
We have adopted a Code of Business Conduct and Ethics (the “Code”), that applies to all of our employees, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) and directors. The Code is available on the investor relations section of our website at http://investors.paylocity.com. Any substantive amendment to or waiver of any provision of the Code may be made only by the board of directors and will be disclosed on our website as well as via any other means then required by Nasdaq Listing Rules or applicable law.
Our board of directors has also adopted a written charter for each of the audit committee, the compensation committee and the nominating and corporate governance committee. Each charter is available on the investor relations section of our website at http://investors.paylocity.com.
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Table of Contents
Corporate Governance
Corporate Governance Guidelines
We have adopted Corporate Governance Guidelines (the “Guidelines”) that address the composition of the board, criteria for board membership and other board governance matters. These Guidelines are available on the investor relations section of our website at http://investors.paylocity.com.
Compensation Committee Interlocks and Insider Participation
None of the members of the compensation committee are or have been an officer or employee of Paylocity. During the fiscal year ended June 30, 2023, none of the Company’s executive officers served on the compensation committee (or its equivalent) or board of directors of another entity any of whose executive officers served on our compensation committee or board of directors.
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Table of Contents
Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm
The audit committee of our board of directors has selected KPMG LLP (“KPMG”) to serve as our independent registered public accounting firm to audit the consolidated financial statements of Paylocity Holding Corporation for the fiscal year ending June 30, 2023. KPMG has served as our auditor since May 2013. A representative of KPMG is expected to be present at the annual meeting to respond to appropriate questions and make a statement if he or she so desires.
The following table sets forth the aggregate fees billed by KPMG for the fiscal years ended June 30, 2023 and 2022:
20232022
Audit fees(1)
$1,172,100 $1,382,000 
Audit-related fees(2)
— — 
Tax fees(3)
135,000 85,000 
All other fees(4)
60,000 — 
Total fees$1,367,100 $1,467,000 
(1)Audit fees consist of fees billed for professional services rendered for the audit of our consolidated financial statements, the review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by the independent auditor in connection with statutory or regulatory filings.
(2)Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” 
(3)Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning.
(4)All other fees consist of fees for services other than the services reported above. These fees, for the years presented, include amounts billed for impact assessment services related to financial system implementations.
Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services Performed by Independent Registered Public Accounting Firm
The audit committee has determined that all services performed by KPMG are compatible with maintaining the independence of KPMG. The audit committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Unless the specific service has been pre-approved with respect to that year, the audit committee must approve the permitted service before the independent registered public accounting firm is engaged to perform it. The independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval process.
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Table of Contents
Proposal No. 2 Ratification of Appointment of Independent Registered Public Accounting Firm
Vote Required and Board of Directors Recommendation
The affirmative vote of a majority of the voting power of the shares present at the meeting or represented by proxy and entitled to vote on the matter at the annual meeting is required for approval of this proposal. Abstentions will have the effect of a vote “against” the ratification of KPMG LLP as our independent registered public accountants. Your bank or broker will have discretion to vote any uninstructed shares on this proposal. If the stockholders do not approve the ratification of KPMG as our independent registered public accounting firm, the audit committee will reconsider its selection.
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The Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm for the fiscal year ending June 30, 2024. Proxies will be so voted unless stockholders specify otherwise in their proxies.
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Table of Contents
Report of the
Audit Committee
The audit committee currently consists of four directors. Messrs. Robinson and Waters and Mses. Breard and Breen are each, in the judgment of the board of directors, an independent director. The audit committee acts pursuant to a written charter that has been adopted by the board of directors. A copy of the charter is available on the investor relations section of Paylocity’s website at http://investors.paylocity.com.
The audit committee oversees Paylocity’s financial reporting process on behalf of the board of directors. The audit committee is responsible for retaining Paylocity’s independent registered public accounting firm, evaluating its independence, qualifications and performance, and approving in advance the engagement of the independent registered public accounting firm for all audit and non-audit services. The audit committee’s specific responsibilities are set forth in its charter. The audit committee reviews its charter at least annually.
Management has the primary responsibility for the financial statements and the financial reporting process, including internal control systems, and procedures designed to ensure compliance with applicable laws and regulations. Paylocity’s independent registered public accounting firm, KPMG LLP, is responsible for expressing an opinion as to the conformity of our audited financial statements with generally accepted accounting principles.
The audit committee has reviewed and discussed with management the Company’s audited financial statements. The audit committee has also discussed with KPMG LLP all matters that the independent registered public accounting firm was required to communicate and discuss with the audit committee, including the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301, Communications with Audit Committees, as such standard may be further modified, supplemented or amended from time to time (or such successor standard that may be promulgated). In addition, the audit committee has met with the independent registered public accounting firm, with and without management present, to discuss the overall scope of the independent registered public accounting firm’s audit, the results of its examinations, its evaluations of the Company’s internal controls and the overall quality of Paylocity’s financial reporting.
The audit committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the audit committee concerning independence and has discussed with the independent registered public accounting firm its independence.
Based on the review and discussions referred to above, the audit committee recommended to Paylocity’s board of directors that the Company’s audited financial statements be included in Paylocity’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023.
AUDIT COMMITTEE
Ronald V. Waters III, Chair
Virginia G. Breen
Kenneth B. Robinson
The foregoing Report of the Audit Committee shall not be deemed to be incorporated by reference into any filing of Paylocity under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except to the extent that Paylocity specifically incorporates such information by reference in such filing and shall not otherwise be deemed “filed” under either the Securities Act or the Exchange Act or considered to be “soliciting material.”
Ms. Breard was appointed to the audit committee in October 2023, after the filing of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2023, and therefore did not participate in the review and recommendation described in the Report of the Audit Committee.
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Table of Contents
Executive
Officers
The following table sets forth information regarding our executive officers as of October 20, 2023.
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Steven R. Beauchamp
Co-Chief Executive Officer
and Director
Age: 51
Steven R. Beauchamp is our Co-Chief Executive Officer and a director. Prior to joining Paylocity in 2007, Mr. Beauchamp was employed by Paychex, Inc., from September 2002 to August 2007 and served as VP of Product Management and as a Corporate Officer. Mr. Beauchamp also served as Vice President of Payroll Operations for Advantage Payroll Services, Inc. from August 2001 to September 2002 after Advantage Payroll acquired Payroll Central where he served as President from May 1999 to August 2001. Mr. Beauchamp also spent three years in operations management with ADP Canada from May 1995 to April 1998. Mr. Beauchamp holds a B.B.A. from Wilfrid Laurier University and a M.B.A. from Queen’s University.
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Toby J. Williams
President and Co-Chief Executive Officer and Director
Age: 50
Toby J. Williams is our President and Co-Chief Executive Officer and has served as a director since March 2022. Prior to joining Paylocity as our Chief Financial Officer in September 2017, from February 2011 until August 2017, Mr. Williams held several positions at Ellucian, Inc., a provider of higher education software and services, most recently as Chief Product and Strategy Officer. Prior to joining Ellucian, Mr. Williams was the Director of Corporate Development of Paychex, Inc., a provider of human capital management solutions, from March 2006 to January 2011. Before joining Paychex, Mr. Williams was a senior associate in the investment banking division of Citigroup Global Markets Inc., an investment banking firm, from September 2004 to January 2006. From 1999 to 2004, Mr. Williams was an associate in private law practice, most recently with Holland & Knight LLP from 2002 until 2004. Mr. Williams holds a B.A. in Business Administration and Political Science from Houghton College and a M.B.A. and J.D. from The Ohio State University.
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Executive Officers
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Ryan Glenn
Chief Financial Officer and Treasurer
Age: 41
Ryan Glenn is our Chief Financial Officer and Treasurer. Prior to March 2022, he served as Senior Vice President of Finance of the Company since August 2021. From June 2018 to August 2021, Mr. Glenn served as the Company's Vice President, Financial Planning & Analysis and Investor Relations, and, from October 2013 to June 2018, Mr. Glenn held various financial leadership positions in the Company's Financial Planning & Analysis and Investor Relations department. Prior to joining Paylocity in October 2013, Mr. Glenn held various roles at PricewaterhouseCoopers LLP, a registered public accounting firm from 2010 to 2013, last serving as a Manager in the Capital Markets & Accounting Advisory Practice. Mr. Glenn earned a B.S. Summa Cum Laude from the University at Buffalo and a M.B.A from The Johnson School at Cornell University.
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Rachit Lohani
Chief Technology Officer
Age: 36
Rachit Lohani is our Chief Technology Officer. Prior to joining Paylocity in September 2021, Mr. Lohani served as the VP of Engineering from 2020 to 2021 at Atlassian. Prior to joining Atlassian, he served as Director of Engineering at Intuit from 2014 to 2020. Before joining Intuit, Mr. Lohani served in engineering leadership positions at Netflix from 2012 to 2014 and Videology Inc from 2009 to 2012. Mr. Lohani brings over 15 years of management experience building products and leading technological transformations. Mr. Lohani holds a M.S. in Computer Science and Engineering from the University at Buffalo and a M.S. in Mathematics and Computer Science from New York University.
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Joshua Scutt
Senior Vice President of Sales
Age: 52
Joshua Scutt has served as Senior Vice President of Sales at Paylocity since August 2021. From October 2018 to August 2021, he served as Vice President, Sales of the Company. Prior to joining Paylocity, Mr. Scutt served as Vice President of Enterprise Sales at NCR from February 2017 to October 2018. From 1997 to 2016, he served in various positions at ADP, including most recently as Senior Vice President of Small Business Sales. Mr. Scutt holds a B.A. degree in Education from Northern Michigan University.
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Executive Officers
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Katherine Ross
Senior Vice President of Operations
Age: 53
Katherine Ross is our Senior Vice President of Operations and joined the Company in December 2022. Prior to joining Paylocity, Ms. Ross served as the Divisional Vice President of Global Toxicology at Abbott from April to December 2022 and Divisional Vice President, North American Workplace Solutions from February 2020 to May 2022. From 1994 to 2020, Ms. Ross held increasing roles of responsibility at ADP, including most recently as Senior Vice President from September 2016 to February 2020. Ms. Ross holds a B.S. degree from Cornell University and an MBA for Northwestern University's Kellogg School of Management.
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Nicholas Rost
Vice President and
Chief Accounting Officer
Age: 43
Nicholas Rost has served as Vice President and Chief Accounting Officer of the Company since September 2021. From May 2019 to September 2021, he served as Corporate Controller of the Company. From May 2017 through May 2019, Mr. Rost held various financial leadership roles at Joyson Safety Systems, including Chief Accounting Officer and Executive Director of Financial Planning and Analysis. From 2003 to 2017, Mr. Rost worked in a variety of roles at PricewaterhouseCoopers LLP, a registered public accounting firm, serving most recently as a Senior Manager in the Assurance Practice. Mr. Rost earned his B.S.B.A. degree in Accounting Information Systems from Central Michigan University. He is also a Certified Public Accountant.
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Table of Contents
Compensation Discussion and Analysis
The following discussion and analysis of compensation arrangements of our named executive officers should be read together with the compensation tables and related disclosures set forth below. This discussion contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. The actual amount and form of compensation and the compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.
This section discusses the philosophy underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. It provides qualitative information regarding the manner and context in which compensation was awarded to and earned in fiscal 2023 by the following executive officers, which we refer to as our "named executive officers" in this Proxy statement, and places in perspective the data presented in the tables and narrative that follow:
Steven R. Beauchamp, our Co-Chief Executive Officer (“Co-CEO”);
Toby J. Williams, our President and Co-CEO;
Ryan Glenn, our Chief Financial Officer and Treasurer ("CFO");
Rachit Lohani, our Chief Technology Officer;
Joshua Scutt, our Senior Vice President of Sales; and
Katherine Ross, our Senior Vice President of Operations(1);
(1)Ms. Ross joined us as our Senior Vice President of Operations on December 1, 2022.
We refer to our compensation committee in this Compensation Discussion and Analysis and the related compensation tables as the “Committee.” The members of the Committee in fiscal 2023 were Ellen Carnahan, Robin L. Pederson, Andres D. Reiner and Ronald V. Waters III. As disclosed elsewhere in this proxy statement, Ms. Carnahan resigned from our board of directors in August 2023.
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Compensation Discussion and Analysis
Fiscal 2023 Financial and Business Highlights
During fiscal 2023, we achieved strong revenue growth with total revenue of $1.17B, representing 38% year-over-year growth, as our focus on providing the most complete platform for the modern workforce continues to resonate with our clients and prospects. Beyond driving strong revenue growth, we also increased our profitability in fiscal 2023 with net income of $140.8 million, adjusted EBITDA of $375.2 million or 31.9% margin and, net cash provided by operating activities of $282.7 million and free cash flow $215.8 million or 18.4% margin.* Our named executive officers and other members of our executive management team led the organization to achieve certain operational and financial milestones that position us for continued short- and long-term success, including the following achievements:
Year-over-year total revenue growth
38%
Revenue retention
92%+
Adjusted EBITDA margin*
31.9%
New business revenue from referral channelsOver 25%
*    Adjusted EBITDA, Adjusted EBITDA margin, Free cash flow and Free cash flow margin are non-GAAP financial measures. For information on these measures, including the reconciliation of these non-GAAP financial measures to their most direct comparable GAAP financial measures, please see "Appendix A: Non-GAAP Financial Measures."
We continued to enhance products like Community, Surveys, Video, and Learning, as well as our Mobile App, to ensure our clients can meet the needs of their employees. These products have seen increasing attach and utilization rates, while use of data and analytics on our platform grew exponentially in fiscal 2023—especially our Modern Workforce Index, which analyzes, scores, and tracks a company’s progress in delivering a more engaging experience to their employees. We also launched the HR industry's first integration of generative AI into Community, our social collaboration hub. We continue to embed generative AI across the platform to streamline processes and better engage employees. We also launched Market Pay, which delivers comprehensive pay data to help organizations pay their employees fairly, attract and retain top talent, and maintain compliance. New advanced scheduling functionality improves workforce management by providing more schedule flexibility for employees and access to real-time insights for managers to reduce labor costs and minimize risks.
Our product development investments continue to be recognized by third parties. NelsonHall, a leading industry analyst firm, ranked Paylocity a Leader in its Next-Generation HCM Technology NEAT report for the mid-market and enterprise segments. G2 Crowd, an independent product review site, named us an overall leader for all 12 HRIS product categories for the 19th straight quarter and the #1 HR software solution.
From an operational perspective, we remain focused on delivering world-class service to our 36,200 clients. We are proud of the efforts of our operations teams who create a true partnership with our clients. This combination of strong operational execution and industry-leading products allowed us to deliver revenue retention of greater than 92% once again for fiscal 2023.
We were also able to maintain a strong culture for our more than 6,100 employees as we were named Forbes' Best Employers for Diversity and Best Employers for Women, Built In's Best Places to Work 2023, Great Places to Work Certified 2023 and the 2023 Best and Brightest Companies to Work for in the Nation. We demonstrated our commitment to being a leader in social and environmental responsibility and corporate governance, which we have showcased on the Corporate Responsibility section of our website and in our annual Corporate Social Responsibility report.
Fiscal 2023 Executive Compensation Highlights
The following key compensation actions were taken with respect to the named executive officers for fiscal 2023:
Base Salaries: We adjusted the base salaries of certain of our named executive officers in order to appropriately compensate them given the level of performance and the competitive market.
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Annual Cash Bonuses: The target bonus opportunities as a percentage of base salaries remained the same for our named executive officers as compared to the prior year. We paid annual cash bonuses to our named executive officers in order to encourage them to focus on the achievement of key short-term business objectives and reflect their achievement of the corporate performance objectives under our annual cash bonus incentive plan.
Long-Term Equity Incentive Compensation: We granted time-based restricted stock unit and market share unit awards for shares of our common stock in order to reward increases in stockholder value and achievement of corporate objectives.
Share Ownership Guidelines: We have adopted stock ownership guidelines for our named executive officers in order to promote the alignment of long-term interests of our named executive officers with our stockholders.
Stockholder Feedback: We hold annual non-binding advisory stockholder votes on the compensation program for our named executive officers commonly referred to as a “say on pay” vote. We received 93.4% of votes in favor of our say on pay proposal at the 2023 Annual Meeting of Stockholders. The Committee has considered and will continue to consider the outcome of our say on pay votes and our stockholders’ views when making compensation decisions for our named executive officers, including the outcomes of “Proposal No. 3 Advisory Vote to Approve the Compensation of our Named Executive Officers” at this Annual Meeting.
Compensation Philosophy and Objectives
Paylocity’s commitment to attracting, retaining and aligning talent with our business objectives is reflected in the total compensation program for our named executive officers. We provide a talent value proposition that motivates our named executive officers to contribute to the creativity, growth, profitability and performance of the Company.
 
Our objective is to:
attract and retain the talent needed to grow the Company’s business;
provide a strong incentive for executives and key employees to work toward the achievement of the Company’s goals, including long-term revenue growth and sustained value creation; and
ensure that the interests of management and the Company’s stockholders are aligned.
We seek to achieve these objectives by providing compensation that is competitive with the practices of other peer group technology companies and linking rewards to Company performance. Our incentives are designed to motivate our named executive officers to increase long-term stockholder value in alignment with stockholders’ interests.
Within this framework, we observe the following principles:
1.Attract, motivate and retain top-caliber talent: Named executive officers should have market-competitive base salaries and employee benefits that permit us to hire and retain high-caliber individuals at all levels as we compete for talent nationally;
2.Pay for performance: A significant portion of the annual compensation of our named executive officers should vary with annual business performance and each individual’s contribution to that performance;
3.Reward long-term growth and sustained value creation: Named executive officers should be rewarded for achieving long-term results, and such rewards should be aligned with the interests of our stockholders;
4.Align compensation with stockholder interests: The interests of our named executive officers should be linked with those of our stockholders through the risks and rewards of the ownership of our common stock; and
5.Promote accountability; discourage excessive or inappropriate risk-taking: Our compensation program discourages excessive risk-taking. The Company enforces this principle through the share-ownership requirements, as well as hedging and trading restrictions. Our 2014 Equity Incentive Plan has contained a clawback provision, applicable to our Co-CEOs and CFO, since its adoption, and in October 2023, the board of directors adopted an executive compensation clawback policy that complies with Nasdaq Listing Rules and Rule 10D-1 under the Exchange Act. See “Compensation Discussion and Analysis – Other Compensation Policies – Compensation Recovery Policy” for additional information about our clawback policy.
These principles are the foundation for a compensation framework that focuses management’s best efforts on achieving the Company’s goals and generating sustainable stockholder value.
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https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_0.jpg
What We Do
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_34.jpg
What We Don’t Do
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_35.jpg  Pay for Performance – a significant portion of our executive compensation program is not guaranteed and is dependent upon stock price appreciation and other variable, at-risk pay components that are disclosed to our stockholders
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_36.jpg  Review Peer Compensation Data – prior to making executive compensation decisions we review peer company compensation data
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_37.jpg  Annual Stockholder “Say on Pay – we seek an annual non-binding advisory vote from stockholders to approve the executive compensation disclosed in our “Compensation Discussion and Analysis,” tabular disclosures and related narrative of this proxy statement
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_38.jpg  Post-Employment Covenants – our executive employment agreements contain non-compete and non-solicit language in order to protect the business
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_39.jpg  Modest Perquisites – providing only those that have a sound value to our business
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_40.jpg  Caps on Incentive Payouts – we ensure that short-term incentives and our performance-based restricted stock unit awards cap payouts
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_41.jpg  Mitigate Undue Risk – we have maintained a clawback policy applicable to our Co-CEOs and CFO since 2014 and recently adopted an executive compensation clawback policy that complies with Nasdaq Listing Rules and Rule 10D-1 under the Exchange Act, set multiple performance measures and targets and maintain robust Board and management processes to identify risks
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_42.jpg  Robust Stock Ownership Guidelines – we ensure management acts and thinks like stockholders through stock ownership
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_43.jpg  Independent Compensation Consultant – we seek third party executive compensation advice for the Committee from an independent consulting firm that does not perform any other services for our Company

https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_44.jpg  No Excise Tax Gross-Ups upon Change in Control – we do not provide tax gross-ups related to change in control
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_45.jpg  No Pledging Shares of Company Stock Received as Compensation – named executive officers may not directly or indirectly pledge Paylocity common stock as collateral for any obligation
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_46.jpg  No Hedging Shares of Company Stock Received as Compensation, named executive officers may not directly or indirectly engage in transactions intended to hedge or offset the market value of Paylocity common stock owned by them
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_47.jpg  No Guaranteed Incentive Payouts – we do not provide guaranteed minimum bonuses

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The Role of the Committee and its Consultants and Advisors
The Committee’s primary duties are to regularly meet, review and advise our board of directors on the Company’s overall compensation philosophy, policies and plans, including a review of both regional and industry compensation practices and trends. The Committee is responsible for taking action with respect to compensation that will attract and retain the highest quality executives that will clearly articulate the relationship of corporate performance to executive compensation and that will reward executives for the Company’s progress. For a more complete description of the duties and responsibilities of the Committee, see the charter for the Committee posted on our website at: http://investors.paylocity.com.
The Committee has engaged Compensia, an outside independent executive compensation consultant, to assist the Committee with executive compensation matters by providing market research and advisory support for base salary, bonus and equity compensation matters and to assist the Committee with assessing the Company’s peer group. Compensia annually develops a peer group study and an executive and non-employee director compensation review that is specific to the Company. Compensia does not provide other services to the Company. The Committee also uses the services of the Company’s human resources department and the Company’s outside counsel in making compensation-related decisions involving our named executive officers.
Role of Named Executive Officers in Compensation Decisions
The compensation of our named executive officers is determined by the Committee. Our Co-CEOs and CFO typically provide an agenda and recommendations to the Committee. Our Co-CEOs attend the Committee meetings and discuss with the Committee the compensation and performance of all named executive officers, other than themselves. Our Co-CEOs base their recommendations in part upon their review of the performance of our named executive officers. The Committee may exercise its discretion in modifying any recommended compensation adjustments or awards to such named executive officers.
Components of Executive Compensation
We offer our named executive officers compensation in the following forms:
Base salaries to reward individual contributions and compensate for their day-to-day responsibilities;
Variable compensation in the form of performance-based bonuses that are directed to drive targeted corporate business goals and annual objectives; and
Equity compensation in the form of time-based restricted stock units and market share units in order to foster focus by our named executive officers on long-term objectives.
Our equity compensation program is structured to align the long-term pay of our named executive officers with stockholder interests. We believe that equity awards are a significant compensation-related motivator in attracting and retaining executive-level employees, and our executive compensation program aims to appropriately balance the goals of motivating and rewarding our named executive officers, thereby promoting stability in our leadership.
To promote alignment of our named executive officers’ interests with those of our stockholders and to focus our executives on achievement of certain annual performance-based metrics that the Committee considers critical to the Company’s future success, we also have an annual cash bonus program that varies above or below target levels commensurate with our performance. In addition, we have executive employment agreements with each of our named executive officers in order to secure their positions with the Company and to increase the executives’ focus with the Company notwithstanding the high demand for services that may exist within the executives’ locality and the Company’s competitors in the technology sector.
Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Therefore, we generally do not provide perquisites or other personal benefits to our named executive officers except in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our named executive officers more efficient and effective, and for recruitment and
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retention purposes. During fiscal 2023, other than the perquisites or other benefits detailed under "Compensation of Named Executive Officers—Summary Compensation Table", none of the named executive officers received perquisites or other personal benefits that were, in the aggregate, $10,000 or more for each individual. In addition, we do not provide our named executive officers retirement plan benefits or health and welfare plan benefits, other than executive health and wellness screenings, that deviate from what is generally offered to employees of the Company.
We view these components of compensation as related, but the Committee does not review total compensation for the named executive officers in making a decision with regard to a component of compensation because the Committee does not believe that significant compensation derived from one component of compensation should negate or reduce compensation from other components. The Committee instead believes that each component of compensation is intended to reward different goals, as well as skills, responsibilities and duties of the executive. As a result, the appropriate level for each compensation component is based in part, but not exclusively, on peer group survey data and our recruiting and retention goals, our view of internal equity and consistency and other considerations we deem relevant, such as rewarding extraordinary performance, for such component of compensation.
In determining named executive officer compensation, the Company considers the following factors:
 
the Company’s performance in the previous fiscal year;
the Company’s growth from the previous fiscal year;
long-term retention value;
the Company’s outlook and operating plan for the upcoming fiscal year;
assistance from the Committee’s advisors and consultants, as described under “The Role of the Committee and its Consultants and Advisors”, including the compensation analysis prepared by Compensia;
the named executive officer’s role;
an evaluation of the named executive officer’s individual performance and overall impact on the Company;
the size of the aggregate equity pool available for awards for the year and the relative allocation of such pool among the named executive officers and other participants;
overall equity burn rates as well as equity overhang levels;
the value of, and expense associated with, proposed and previously awarded equity grants, including the long-term retention value of past awards; and
compensation trends and competitive factors in the market for talent in which the Company competes.
The Committee performs an annual strategic review of compensation for our named executive officers and the Company’s peer group to determine whether we provide adequate incentives and motivation to our named executive officers. To this end, the Committee reviews survey data and compensation data of peer companies annually when it reviews named executive officer compensation.
For fiscal 2023, the Committee, based on an analysis put together by Compensia, developed the Company’s peer group for purposes of advising the Committee on its assessment of base salary, equity compensation and variable cash bonus opportunities for our named executive officers. After comments from Company management, the Committee reviewed the peer group assessment criteria, including peer group company location, industry, direct peers, revenue ranges, market capitalization, increases in market capitalization and revenue growth rate. The peer group was selected from companies that provide systems software or internet software and services, or enterprise software applications that are headquartered in the United States. Additionally, we focused on peers that generally have revenue growth of 10% or more, that are approximately 0.5 to 2.0 times our trailing 12-month revenue and/or have a market capitalization rate of 0.3 to 3.0 times that of our own 30 trading day average market capitalization. None of the criteria are fixed and the Committee retains the discretion to determine the Company’s peer group for compensation purposes.
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For fiscal 2023, our peer group as determined by the Committee consisted of the following:
 
AlteryxCoupa SoftwareOktaSplunk
AvalaraDynatracePaycom SoftwareThe Trade Desk
Bill HoldingsElastic N.V.Q2 HoldingsZendesk
BlackLineGuidewire SoftwareRingCentralZscaler
Ceridian HCM HoldingsHubSpotSmartsheet
 
Notwithstanding the use of a peer group analysis to assess named executive officer compensation, the Committee does not benchmark individual components of compensation or the total compensation paid to our named executive officers. The Committee also does not consider realized or realizable pay in making compensation decisions. The Committee makes decisions on named executive officer compensation for each component thereof based on a variety of factors described above.
Base Compensation
The Committee reviews and reassesses the base salaries of our named executive officers following the completion of each fiscal year. We do not choose to consider other elements of pay in setting base salaries for our named executive officers because of our philosophy that base salary should be measured by market practices and individual performance. Our Committee may periodically conduct a review of our named executive officers’ base salaries and determine adjustments as warranted, if any.
In fiscal 2023, as compared to fiscal 2022, we adjusted the base salaries of certain of our named executive officers in order to appropriately compensate them given the level of performance and the competitive market conditions.
In fiscal years 2023 and 2022, the annual base compensation for our named executive officers was as follows:
Named Executive OfficerFiscal 2023
Base Salary
Fiscal 2022
Base Salary
Steven R. Beauchamp$638,400 $560,000 
Toby J. Williams(1)
$638,400 $465,732 
Ryan Glenn(2)
$374,500 $315,342 
Rachit Lohani$445,200 $420,000 
Joshua Scutt(3)
$420,000 $— 
Katherine Ross(3)
$400,000 $— 
(1)For fiscal 2022, reflects the proration of Mr. William's annualized base salary of $560,000 based on his appointment as President and Co-CEO in March 2022. Mr. Williams' annualized base salary as Chief Financial Officer for fiscal 2022 prior to his promotion was $424,000.
(2)For fiscal 2022, reflects the proration of Mr. Glenn's annualized base salary of $350,000 based on his appointment as Chief Financial Officer and Treasurer in March 2022. Mr. Glenn's annualized base salary as Senior Vice President Finance for fiscal 2022 prior to his promotion was $300,000.
(3)Fiscal 2022 base salary information is not disclosed for Mr. Scutt or Ms. Ross as fiscal 2023 was the first year in which they served as named executive officers.
Variable Compensation Under Our Annual Bonus Plan
We maintain a variable compensation plan in the form of an annual cash bonus plan to reward the performance of our named executive officers in achieving our corporate goals and to primarily align this element of pay for our named executive officers with corporate performance. Based on the Committee’s review of survey data from peer group analysis, we maintained the target bonus opportunity under our annual cash bonus plan for each of our named executive officers at competitive levels.
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For fiscal 2023, our Committee established the following corporate performance measures based 60% upon Recurring and other revenue and 40% upon Adjusted EBITDA targets to assess the cash bonus opportunity for each named executive officer:
Achievement LevelRecurring and
Other Revenue
Adjusted EBITDACorresponding Payout as %
of Target (for each metric)
Maximum$1,087,000,000 $329,000,000 150%
Target$1,072,000,000 $321,000,000 100%
Threshold$1,057,000,000 $313,000,000 50%
We focused on these factors in our annual cash bonus plan for fiscal 2023 because they are important indicators of our ability to monetize our products and services. At the time the corporate performance measures were set, the Committee believed that these corporate performance measures provided a more accurate gauge of our success and that the achievement of the corporate performance measures at the target levels would require extraordinary efforts, excellent leadership, effective leveraging of our competencies and a focus on driving results.
Based on actual performance for fiscal 2023, the Company achieved $1,098,036,000 in Recurring and other revenue and $375,183,000 in Adjusted EBITDA and therefore exceeded the maximum performance targets. Accordingly, the Committee determined that our named executive officers had earned and would be paid the following cash bonuses under our annual cash bonus plan for fiscal 2023, which were paid in fiscal 2024:
Named Executive OfficerFiscal 2023 Target
Cash Bonus
Opportunity (as
a percentage of
Base Salary)
Fiscal 2023
Target
Cash Bonus
Opportunity
Fiscal 2023 Bonus
Payment Paid in
Fiscal 2024 (as
a percentage of
Base Salary)
Fiscal 2023
Bonus Payment
Paid in
Fiscal 2024
Fiscal 2023
Bonus Payment
(as a percentage
of target)
Steven R. Beauchamp100 %$638,400 150 %$957,600 150 %
Toby J. Williams100 %$638,400 150 %$957,600 150 %
Ryan Glenn75 %$280,875 113 %$421,313 150 %
Rachit Lohani55 %$244,860 83 %$367,290 150 %
Joshua Scutt75 %$315,000 113 %$472,500 150 %
Katherine Ross(1)
55 %$127,781 82 %$191,671 150 %
(1)The bonus opportunity and payment for Ms. Ross for fiscal 2023 paid in fiscal 2024 was prorated based on the amount of time served in her role during the fiscal year. Ms. Ross joined us as our Senior Vice President of Operations on December 1, 2022.
Equity Compensation
Currently, the equity compensation issued to each of our named executive officers consists of restricted stock units (“RSUs”) and market share units (“MSUs”). The amount and type of equity awards granted to our named executive officers reflects the Committee’s desire to remain competitive with the Company’s peer group while taking into consideration overall retention goals and achievement of corporate executives. For fiscal 2023, we remained competitive for positioning the equity awards granted to our named executive officers due to corporate performance and a strong desire to retain our named executive officers during an upcoming period that we feel will be critical to the Company’s growth and our long-term strategic planning. Accordingly, certain equity awards granted to our named executive officers in fiscal 2023 include retention attributes that are weighted to the beginning of fiscal 2026.
Because RSUs representing the right to receive shares of our common stock upon settlement have value even in the absence of stock price appreciation, the Committee believes we are able to incent and retain our named executive officers using fewer shares of our common stock, thereby reducing the dilutive impact of our long-term equity awards and allowing us to use our equity compensation resources more efficiently. Since their value increases with any increase in the value of the underlying shares, RSUs serve as an incentive which aligns with the long-term interests of our named executive officers and stockholders. In addition, the multi-year vesting requirement serves our retention objectives since our named executive officers must remain continuously employed by us through the applicable vesting dates to fully earn these awards.
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For fiscal 2023, the Committee granted MSUs that are tied to our stock price performance, further aligning the interests of our named executive officers with those of our stockholders. The performance conditions for the awards granted in fiscal 2023 will be based on long-term stockholder value creation relative to comparable companies, with vesting of the MSU awards based on total stockholder return (“TSR”) as compared to the Russell 3000 Index for the three-year performance period from August 31, 2022 through August 31, 2025. The Company’s named executive officers will have the opportunity to earn the minimum shares by achieving a threshold level of performance and an opportunity to earn up to 200% of the target shares for superior performance. The Committee believes that these TSR performance conditions will further align the interests of our named executive officers with the interests of our stockholders and provide incentives that will encourage behaviors that will maximize stockholder value.
If our relative TSR percentile over the performance measurement period of three years equals or exceeds the 60th percentile, then the target number of units will be earned. The Company’s relative TSR percentile is determined by ranking the group of benchmark companies (other than the Company) from the highest to the lowest according to their respective TSR for the performance period, then calculating the TSR percentile ranking of the Company relative to other companies in the group of benchmark companies. If our relative TSR percentile is less than the 25th percentile, no payout is earned. If our relative TSR percentile is greater than the 25th percentile, award payouts may range from 25% up to 200% of target scaled to the relative TSR percentile, as shown in the TSR Percentile Payout Table below:
Relative TSR PercentilePayout % of Target MSUs(1)
80th Percentile or Above200%
60th Percentile100%
35th Percentile50%
25th Percentile25%
Below 25th Percentile0%
(1)To the extent relative TSR falls between two discrete points in the chart above, linear interpolation shall be used to determine the Payout % of Target MSUs corresponding to the Relative TSR Percentile as set forth in the award agreement.
Fiscal 2023 RSU and MSU Awards
On August 15, 2022, the Committee approved grants of RSU and MSU awards to our named executive officers as an effective retention tool that rewards continued service with us. The number of equity awards granted was determined by dividing the target grant value by the average price of our common stock for the 30 calendar days preceding the grant date. The target grant values and number of awards granted are summarized below:
RSU AwardsMSU Awards
Named Executive OfficerTarget Grant
Value
Number of Shares
Subject to
Equity Awards
(1)
Target Grant
Value
Number of Shares
Subject to
Equity Awards
(2)
Steven R. Beauchamp$6,363,000 30,079 $6,363,000 30,079 
Toby J. Williams$6,363,000 30,079 $6,363,000 30,079 
Ryan Glenn$2,525,000 11,937 $1,075,000 5,083 
Rachit Lohani$2,325,000 10,992 $1,000,000 4,728 
Joshua Scutt$2,300,000 10,874 $1,000,000 4,728 
(1)Vests 6.25% on each three-month anniversary of the date of grant subject to continued service through each applicable vesting date.
(2)Vests based on certain TSR percentile rank performance targets achieved during a three-year performance period ending on August 31, 2025.
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The Committee granted certain RSU and MSU awards to Ms. Ross upon her appointment as Senior Vice President, Operations on December 1, 2022. The number of shares subject to these equity awards granted were determined by dividing the target grant values by the closing stock price on the date of grant.
RSU AwardsMSU Awards
Named Executive OfficerTarget Grant
Value
Number of Shares
Subject to
Equity Awards
(1)
Target Grant
Value
Number of Shares
Subject to
Equity Awards
(2)
Katherine Ross$2,800,000 12,537 $700,000 3,134 
(1)Vests 6.25% on each three-month anniversary of the date of grant subject to continued service through each applicable vesting date.
(2)Vests based on certain TSR percentile rank performance targets achieved during a three-year performance period ending on August 31, 2025.
Employment Agreement with Katherine Ross
In December 2022, we hired Ms. Ross as our Senior Vice President of Operations and entered into an employment agreement with her as further described under "Compensation of Named Executive Officers—Employment Agreements and Arrangements". Ms. Ross's onboarding compensation package included:
Base salary of $400,000
Target annual cash bonus of 55% of base salary
Sign-on cash bonus of $310,066
12,537 RSUs
3,134 MSUs
The Committee determined that these base salary and annual bonus target levels were appropriate in order to induce Ms. Ross's commencement of employment and in order to establish her base salary and annual cash incentive compensation levels in line with those of the rest of our executive officers. The Committee determined that the sign-on cash bonus described above were appropriate in order to induce Ms. Ross’s commencement of employment. The Committee also determined that the RSU and MSU grants to Ms. Ross were appropriate in order to give Ms. Ross an equity stake in our business and thereby align her interests with those of our stockholders.
Severance and Change of Control Payments
In connection with the hiring of certain named executive officers, we have provided, often through the process of negotiation, for certain severance and change of control benefits under specified circumstances in their employment agreement. We believe these severance and change in control benefits are consistent with those provided by our peer group and are an essential element of our overall executive compensation package due to the competitive market for executive talent in our industry. The Compensation Committee believes that the severance and change in control benefits are an important element of the named executive officers’ retention and motivation and that the benefits of such agreements, including generally requiring a release of claims against us and entering into a non-competition agreement as a condition to receiving any severance benefits, are in our best interests. Equity vesting acceleration benefits are provided in connection with a change in control are intended to eliminate, or at least reduce, the reluctance of our executive officers to diligently consider and pursue potential change in control transactions that may be in the best interests of our stockholders.
For quantification of any additional information regarding the severance and change of control benefits, please see the discussion under “Compensation of Named Executive Officers—Employment Agreements and Arrangements” and “Compensation of Named Executive Officers Potential Payments Upon Termination or Change in Control.”
Retirement, Welfare and Other Benefits
We have established a tax-qualified employee savings and retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to age and length of service. Our named executive officers are eligible to participate in our 401(k) plan. Under our 401(k) plan, employees may elect to reduce their current
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compensation by up to the statutory limit, $20,500 in 2022 and $22,500 in 2023, and have us contribute the amount of this reduction to the 401(k) plan. During fiscal 2023, we matched up to 50% of employee contributions, but not exceeding 8% of eligible pay. Our contributions for the year ended June 30, 2023 were $15,083,000. We intend for the 401(k) plan to qualify under Section 401(a) of the Internal Revenue Code so that contributions by employees or by us to the 401(k) plan and income earned on plan contributions should not be taxable to employees until distributed from the 401(k) plan.
In addition, we provide welfare benefits to our named executive officers on the same basis as all of our full-time employees. These benefits include medical, dental, and vision benefits, medical and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance and basic life insurance coverage.
We believe that we provide affordable and competitive employee benefits programs in relation to the market based on our understanding of the markets in which we compete for talent. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.
Other than the perquisites detailed under "Compensation of Named Executive Officers—Summary Compensation Table", we do not provide additional perquisites to our named executive officers. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as when we believe it is appropriate to assist an individual named executive officer in the performance of his or her duties, to make our named executive officers more efficient and effective, or for recruitment, motivation, security or retention purposes. All future practices with respect to perquisites or other personal benefits will be subject to required approval and review by the Committee.
Other Compensation Policies
Stock Ownership or Holding Guidelines
On August 12, 2016, we adopted stock ownership guidelines for our non-employee directors, co-chief executive officers and other named executive officers. Our non-employee directors, co-chief executive officers and other named executive officers are required to own shares of our common stock with a value equal to at least the following:
PositionOwnership Requirement
Non-Employee Directors
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_48.jpg
4xannual cash retainer*
Co-Chief Executive Officers
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_49.jpg
4xbase salary
Other Named Executive Officers
https://cdn.kscope.io/497ba44240fa3d1dd4bf9798787db906-Image_50.jpg
2xbase salary
*    Annual cash retainer excludes any fees for serving as Lead Independent Director, chairing a committee or serving on a committee.
Each individual has five years from the later of the date of adoption of these guidelines or the date of appointment of the individual as a director or a named executive officer of Paylocity to achieve the required ownership levels. We believe that these guidelines promote the alignment of the long-term interests of our named executive officers and members of our board of directors with our stockholders. Under our stock ownership guidelines, only shares owned outright count toward the satisfaction of the ownership guidelines. Subject to the phase in periods, the non-employee directors, co-chief executive officers and other named executive officers are currently compliant with the stock ownership guidelines.
Compensation Recovery Policy
Our 2014 Equity Incentive Plan provides that if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct of our Co-CEOs or CFO who knowingly or through gross negligence engaged in the misconduct, the Co-CEOs or CFO must reimburse the Company for any payment in settlement of an equity award received during the twelve-month period following the filing of the financial document and any profits realized from the sale of securities during such twelve-month period.
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Compensation Discussion and Analysis
In October 2023, we adopted a separate executive compensation clawback policy that complies with the Nasdaq Listing Rules and Rule 10D-1 under the Exchange act. The policy provides for the mandatory recoupment of erroneously awarded cash and equity-based incentive compensation received by current or former executive officers in the event we are required to prepare an accounting restatement due to material non-compliance with financial reporting requirements under the federal securities laws. Additionally, the 2023 Equity Incentive Plan, the approval of which is being proposed at this meeting, provides that all awards granted under such plan will be subject to recoupment in accordance with any policies required by the listing standards of any national securities exchange on which our securities are issued, as otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), or any policy we may otherwise adopt, in each case to the extent applicable and permissible under applicable law.
Policy on Hedging and Pledging
Our insider trading policy provides certain types of transactions are prohibited by any person subject to the policy, which includes, but is not limited to. our directors, officers (including named executive officers), employees and consultants. Specifically, short sales, puts, calls or other derivative transactions involving our securities, hedging or monetization transactions involving our securities, and pledges of our securities as collateral for a loan, or holding our securities in a margin account are prohibited under the policy.
Policy Regarding the Pricing and Timing of Equity Awards
While we have not yet adopted a formal policy regarding the timing of equity awards, it has been our practice as a public company, which we expect to continue, that the timing of equity award grants to our named executive officers aligns with the timing of equity awards granted to our eligible general employee base. This timing is not scheduled in a manner that intentionally benefits our named executive officers or employees. Additionally, stock options have an exercise price not less than the fair value of the underlying stock on the date of grant.
All outstanding equity awards to our named executive officers have been granted and reflected in our consolidated financial statements, based upon the applicable accounting guidance.
Risk Considerations
The Committee has assessed whether the compensation paid to our named executive officers encourages risk-taking behavior, and the Committee does not believe that the compensation programs for our named executive officers are likely to lead to taking on more risks than are appropriate from a sound business judgment perspective. The Committee’s approach to compensation beyond base salary focuses heavily on company-wide and long-term performance. For instance, for fiscal 2023, incentives underlying annual cash bonuses were tied to Company performance measures. Since this metric has a Company-wide focus, the Committee does not believe that it generally incentivizes high-risk behavior by our named executive officers compared to annual bonuses based upon narrowly focused individual performance. The Company’s equity awards may consist of stock options, restricted stock units and market share units. The performance of both compensation elements generally reflects the overall market performance of the Company’s stock over a long period of time. The Committee does not believe that this structure of equity awards incentivizes high-risk behavior. Our compensation schemes are designed to be in place over several years, and the Committee believes they are designed to reward sustained long-term profitable growth of the Company.
Tax Considerations
Deductibility of Executive Compensation
Internal Revenue Code Section 162(m) (as amended by the Tax Cuts and Jobs Act (“the Act”)) generally disallows publicly-held corporations from taking a tax deduction for federal income tax purposes for remuneration paid in excess of $1 million in any taxable year to named executive officers that qualify as covered employees under section 162(m). The Committee may, in its judgment, authorize compensation payments that may be in excess of the limits set forth in Internal Revenue Code Section 162(m) and do not comply with exemptions, if any, from the deductibility limit when it believes that such payments are appropriate to attract and retain executive talent.
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Compensation Discussion and Analysis
No Reimbursement for “Golden Parachute” Taxes
Internal Revenue Code Sections 280G and 4999 provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the Company that exceed certain prescribed limits and that the Company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed and are not otherwise obligated to provide any named executive officer with a reimbursement or “gross-up” payment for any tax liability that the executive might owe as a result of the application of Internal Revenue Code Section 4999.
Response to the 2023 Advisory Vote on Executive Compensation and Future Advisory Vote
At the 2023 annual meeting, the stockholders of the Company had the opportunity, pursuant to SEC regulations, to have an advisory vote to approve the compensation paid to the named executive officers. The results of the vote were as follows:
47,749,965
votes were “For” the compensation paid to our named executive officers;
3,362,306
votes were “Against” the compensation paid to our named executive officers; and
15,565
votes abstained.
approximately
93.4%
of votes cast at the 2023 annual meeting supported the compensation paid to our named executive officers
Based on the above results, approximately 93.4% of votes cast at the 2023 annual meeting supported the compensation paid to our named executive officers. Our Committee considered these results in light of the Company’s corporate structure and determined that no significant changes were required to the Company’s compensation program as a result of the vote.
In addition, approximately 95.1% of the votes cast at the 2023 annual meeting on the non-binding advisory “say on pay frequency” proposal were voted in favor of holding the non-binding advisory “say on pay” vote every one year. The board of directors of the Company reviewed and considered the results of the advisory vote as well as general market practices and determined that the Company will continue to conduct future stockholder non-binding advisory votes regarding the compensation to be paid by the Company to its named executive officers every one year. This policy will remain in effect until the occurrence of the next advisory vote on the frequency of the say-on-pay vote or until the board of directors determines that a different frequency for such advisory vote is in the best interest of the Company’s stockholders.
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Table of Contents
Report of the Compensation Committee
The Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with our management. Based on its review and discussions, the Committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by the compensation committee of the Board of Directors,
Robin L. Pederson, Chair
Andres D. Reiner
Ronald V. Waters III
The information contained in the foregoing report of Paylocity’s compensation committee is not considered to be “soliciting material,” “filed” or incorporated by reference in any past or future filing by Paylocity under the Exchange Act or the Securities Act unless and only to the extent that Paylocity specifically incorporates it by reference.
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Table of Contents
Compensation of Named Executive Officers
Summary Compensation Table
The following table presents compensation information for the fiscal years ended June 30, 2023, 2022 and 2021 paid to, or earned by, our principal executive officers, principal financial officer and our three other most highly compensated executive officers as of June 30, 2023. We refer to these executive officers as our “named executive officers” in this Proxy Statement. For the fiscal year ended June 30, 2023, our named executive officers were Steven R. Beauchamp, Toby J. Williams, Ryan Glenn, Rachit Lohani, Joshua Scott and Katherine Ross. No disclosure is provided for persons for years in which the executive officer was not a named executive officer.
Name and Principal PositionFiscal
Year
Salary(1)
Bonus(2)
Stock-based
Awards
(3)
Non-Equity Incentive Plan Compensation(5)
All Other
Compensation
(6)
Total
Steven R. Beauchamp
Co-Chief Executive
Officer
2023$625,333 $— $19,975,163 $957,600 $25,269 $21,583,365 
2022$560,000 $— $13,853,776 $840,000 $38,949 $15,292,725 
2021$560,000 $— $13,555,625 
(4)
$840,000 $25,164 $14,980,789 
Toby J. Williams(7)
President and
Co-Chief Executive
Officer
2023$625,333 $— $19,975,163 $957,600 $114,476 $21,672,572 
2022$459,667 $— $7,301,187 $588,386 $73,230 $8,422,470 
2021$400,000 $— $4,787,452 
(4)
$450,000 $29,875 $5,667,327 
Ryan Glenn(8)
Chief Financial
Officer and Treasurer
2023$370,417 $— $5,241,502 $421,313 $16,745 $6,049,977 
2022$302,383 $— $2,325,596 $276,781 $27,520 $2,932,280 
Rachit Lohani(9)
Chief Technology
Officer
2023$441,000 $— $4,845,129 $367,290 $9,183 $5,662,602 
2022$315,000 $150,000 $9,853,584 $346,500 $15,103 $10,680,187 
Joshua Scutt
Senior Vice President
of Sales
2023$408,333 $— $4,813,005 $472,500 $92,219 $5,786,057 
Katherine Ross(10)
Senior Vice President
of Operations
2023$233,333 $310,066 $3,734,134 $191,671 $15,922 $4,485,126 
(1)Amounts represent salary earned during each fiscal year presented based on any changes approved by the Committee. Annual changes in salary are effective as of September 1 for each of the fiscal years presented and changes due to the promotions of Mr. Williams to President and Co-Chief Executive Officer and Mr. Glenn to Chief Financial Officer and Treasurer during fiscal 2022 were effective on March 11, 2022. The salary presented for Mr. Lohani for fiscal 2022 is the prorated earned amount based on the start of his employment on September 27, 2021, and the salary presented for Ms. Ross for fiscal 2023 is the prorated earned amount based on the start of her employment on December 1, 2022.
(2)Mr. Lohani received a one-time $150,000 sign-on bonus paid upon the start of his employment in fiscal 2022. Ms. Ross received a one-time $310,066 sign-on bonus related to her employment in fiscal 2023.
(3)Amounts represent the aggregate grant date fair value of stock awards granted during the year computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”). Assumptions used in calculating these stock awards in this column are set forth in Note 16 “Benefit Plans” of the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, disregarding estimates of forfeitures relating to service-based vesting conditions. The fair value of our MSU awards is estimated at the date of grant using a Monte-Carlo simulation. The Monte Carlo simulation used to calculate the fair value of the MSUs simulates the present value of the potential outcomes of future stock prices of the Company and the Russell 3000 Index over the requisite service period. The projection of stock prices is based on the risk-free rate of return, the volatility of the stock price of the Company and the Russell 3000 Index, and the correlation of the stock price of the Company with the Index. The table below presents the aggregate grant date fair value of the MSU awards granted in fiscal 2023 assuming achievement at the maximum level of achievement:
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Compensation of Named Executive Officers
NameMaximum
Grant Date
Fair Value of
MSU Awards
Steven R. Beauchamp$23,572,912 
Toby J. Williams$23,572,912 
Ryan Glenn$3,983,547 
Rachit Lohani$3,705,334 
Joshua Scutt$3,705,334 
Katherine Ross$1,867,488 
(4)The PRSUs granted to the named executive officers on August 15, 2019 were modified on August 10, 2020. These amounts for fiscal 2021 do not reflect the grant of new awards, but instead represent the accounting cost of the modification of the performance targets reflected in outstanding awards to reflect the operating and financial impacts of COVID-19. Although the incremental fair value of these modifications is required to be reported in this table for fiscal 2021, the modification of these awards does not reflect any incremental grants to the named executive officers. The table below sets forth the initial grant date fair value and the incremental fair value of the modified awards:
NameInitial Grant Date
Fair Value
Incremental Grant
Date Fair Value
Steven R. Beauchamp$3,240,654 $4,339,353 
Toby J. Williams$954,846 $1,278,574 
We are presenting the table below to show how the Committee viewed the named executive officers' annual compensation for fiscal 2021. This table presents the amounts reported in the Total column by subtracting the amounts reported for the modification of outstanding fiscal 2021 PRSU awards to show how year-over-year compensation changes without including adjustments to previously outstanding awards. This table provides supplemental disclosure and should not be used as a substitute for the amounts reported in the Total column.
NameFiscal 2020 Total
Compensation
Fiscal 2021 Total Compensation
(excluding PRSU modification)
Fiscal 2021 Total Compensation
(including PRSU modification)
Steven R. Beauchamp$9,104,808 $10,641,436 $14,980,789 
Toby J. Williams$3,850,990 $4,388,753 $5,667,327 
(5)Represents amounts paid under our cash bonus plan for fiscal 2023 based on the achievement of performance criteria. See "Compensation Discussion and Analysis - Variable Compensation Under Our Annual Bonus Plan" for additional information.
(6)Amounts shown in this column are detailed in the table below:
NameCompany Funded 401(k) Matching ContributionsCommuting ExpensesOther*
Steven R. Beauchamp$10,972 $— $14,297 
Toby J. Williams$13,581 $77,710 $23,185 
Ryan Glenn$10,575 $— $6,170 
Rachit Lohani$8,344 $— $839 
Joshua Scutt$14,138 $40,945 $37,136 
Katherine Ross$10,202 $— $5,720 
*    Includes amounts paid for executive health and wellness screening, spousal travel benefits provided to Mr. Beauchamp, Mr. Scutt and Mr. Williams for a company-sponsored incentive trip, Mr. Scutt's annual car allowance and Mr. Scutt's tax gross-up of $17,464.
(7)Mr. Williams was promoted from Chief Financial Officer to President and Co-Chief Executive Officer on March 11, 2022.
(8)Mr. Glenn was promoted from Senior Vice President Finance to Chief Financial Officer and Treasurer on March 11, 2022.
(9)Mr. Lohani was hired as our Chief Technology Officer on September 27, 2021.
(10)Ms. Ross was hired as our Senior Vice President of Operations on December 1, 2022.
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Compensation of Named Executive Officers
Grants of Plan-Based Awards in Fiscal 2023
The following table sets forth information regarding grants of plan-based cash and equity awards made to our named executive officers during fiscal 2023.
Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards(1)
Estimated Future
Payouts Under
Equity Incentive
Plan Awards
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)(2)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Grant Date
Fair Value
of Stock
and Option
Awards(3)
NameGrant DateThresholdTargetMaximumThresholdTargetMaximum
Steven R.
Beauchamp
n/a$319,200 $638,400 $957,600 — 
8/15/2022— — — — — — 30,079 — $8,188,707 
8/15/2022— — — 7,520 30,079 60,158 — — $11,786,456 
Toby J.
Williams
n/a$319,200 $638,400 $957,600 — — — — — 
8/15/2022— — — — — — 30,079 — $8,188,707 
8/15/2022— — — 7,520 30,079 60,158 — — $11,786,456 
Ryan Glennn/a$140,438 $280,875 $421,313 — — — — — — 
8/15/2022— — — — — — 11,937 — $3,249,729 
8/15/2022— — — 1,271 5,083 10,166 — $1,991,773 
Rachit Lohanin/a$122,430 $244,860 $367,290 — — — — — — 
8/15/2022— — — — — — 10,992 — $2,992,462 
8/15/2022— — — 1,182 4,728 9,456 — — $1,852,667 
Joshua Scuttn/a$157,500 $315,000 $472,500 — — — — — — 
8/15/2022— — — — — — 10,874 — $2,960,338 
8/15/2022— — — 1,182 4,728 9,456 — — $1,852,667 
Katherine
Ross
n/a$63,891 $127,781 $191,672 — — — — — — 
12/1/2022— — — — — — 12,537 — $2,800,390 
12/1/2022— — — 784 3,134 6,268 — — $933,744 
(1)The amounts reported in this column represent amounts payable under our cash bonus plan for fiscal 2023. Actual bonuses received under the cash bonus plan by the named executive officers are reported in the Summary Compensation Table under the column entitled “Non-Equity Incentive Plan Compensation.”
(2)Represents RSUs.
(3)Amounts represent the grant date fair values of RSUs and MSUs granted during the fiscal year computed in accordance with ASC Topic 718, excluding the impact of estimated forfeitures. Assumptions used in calculating the amounts reported in this column are set forth in Note 15 “Benefit Plans” of the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.
Employment Agreements and Arrangements
We have entered into employment agreements with each of our named executive officers. The following is a summary of the employment agreements with our named executive officers, which include certain severance and change of control benefits.
Steven R. Beauchamp is party to an amended and restated employment agreement with us effective February 7, 2014, which has no specific term and constitutes at-will employment. Mr. Beauchamp’s annual base salary for fiscal 2023 was $638,400. Mr. Beauchamp is also eligible to receive benefits that are substantially similar to those of our other employees. His employment agreement provides for an annual bonus, which was targeted at 100% of Mr. Beauchamp’s base salary for fiscal 2023. Payment of any bonus to Mr. Beauchamp is subject to approval by the Committee. In the event Mr. Beauchamp is terminated for any reason other than for cause (as such term is defined in the employment agreement), and other than as a result of his death or his inability to perform the essential functions of his position with or without reasonable accommodation, we will be obligated to pay him 100% of his then current monthly base salary for 12 months; provided that Mr. Beauchamp timely executes and does not revoke a full general release of claims agreement in favor of the Company. In the event of a change in control (as such
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term is defined in the employment agreement) of the Company, all unvested shares subject to outstanding equity awards with time-based vesting will vest in full immediately prior to, and contingent upon, the change in control, subject to continuous employment with the Company through the date of the change in control.
Additionally, pursuant to the terms of the applicable equity award agreements, in the event of Mr. Beauchamp’s death or disability, all unvested shares with time-based vesting will vest in full and all unvested shares with performance-based vesting shall remain outstanding, and vest based on actual achievement of the underlying performance goals, with Mr. Beauchamp receiving a pro-rated portion of the performance-based awards based on the number of calendar days he was employed over the total number of calendar days in the performance period. The terms of the MSU award agreement also provide that in the event of a change-in-control, the MSUs will immediately vest based on the applicable performance levels attained through the date of the change in control, subject to continued services through that date.
Toby J. Williams is party to an amended and restated employment agreement with us effective March 11, 2022, which has no specific term and constitutes at-will employment. Mr. Williams’s annual base salary for fiscal 2023 upon his promotion to President and Co-CEO was $638,400. Mr. Williams is also eligible to receive benefits that are substantially similar to those of our other employees. His employment agreement provides for an annual bonus, which was targeted at 100% of Mr. Williams’s base salary for fiscal 2023. Payment of any bonus to Mr. Williams is subject to approval by the Committee. In the event Mr. Williams is terminated for any reason other than for cause (as such term is defined in the employment agreement), and other than as a result of his death or his inability to perform the essential functions of his position with or without reasonable accommodation, we will be obligated to pay him 100% of his then current monthly base salary for 12 months; provided that Mr. Williams timely executes and does not revoke a full general release of claims agreement in favor of the Company. In the event of a change in control (as such term is defined in the employment agreement) of the Company, all unvested shares subject to outstanding equity awards with time-based vesting will vest in full immediately prior to, and contingent upon, the change in control, subject to continued services through the date of the change in control.
Additionally, pursuant to the terms of the applicable equity award agreements, in the event of Mr. Williams’s death or disability, all unvested shares with time-based vesting will vest in full and all unvested shares with performance-based vesting shall remain outstanding, and vest based on actual achievement of the underlying performance goals, with Mr. Williams receiving a pro-rated portion of the performance-based awards based on the number of calendar days he was employed over the total number of calendar days in the performance period. The terms of the MSU award agreement also provide that in the event of a change-in-control, the MSUs will immediately vest based on the applicable performance levels attained through the date of the change in control, subject to continued services through that date.
Ryan Glenn is party to an amended and restated employment agreement with us effective March 11, 2022, which has no specific term and constitutes at-will employment. Mr. Glenn’s annual base salary for fiscal 2023 was $374,500. Mr. Glenn is also eligible to receive benefits that are substantially similar to those of our other employees. His employment agreement provides for an annual bonus, which was targeted at 75% of Mr. Glenn’s base salary for fiscal 2023. Payment of any bonus to Mr. Glenn is subject to approval by the Committee. In the event Mr. Glenn is terminated for any reason other than for cause (as such term is defined in the employment agreement), and other than as a result of his death or his inability to perform the essential functions of his position with or without reasonable accommodation, we will be obligated to pay him 100% of his then current monthly base salary for 12 months; provided that Mr. Glenn timely executes and does not revoke a full general release of claims agreement in favor of the Company. In the event of a change in control (as such term is defined in the employment agreement) of the Company, all unvested shares subject to outstanding equity awards with time-based vesting will vest in full immediately prior to, and contingent upon, the change in control, subject to continuous employment with the Company through the date of the change in control.
Additionally, pursuant to the terms of each of Mr. Glenn's employment agreement and the applicable equity award agreements, in the event of Mr. Glenn’s death or disability, all unvested shares with time-based vesting will vest in full and all unvested shares with performance-based vesting shall remain outstanding, and vest based on actual achievement of the underlying performance goals, with Mr. Glenn receiving a pro-rated portion of the performance-based awards based on the number of calendar days he was employed over the total number of calendar days in the performance period. The terms of the MSU award agreement also provide that in the event of a change-in-control, the MSUs will immediately vest based on the applicable performance levels attained through the date of the change in control, subject to continued services through that date.
Rachit Lohani is party to an employment agreement with us effective September 27, 2021, which has no specific term and constitutes at-will employment. Mr. Lohani’s annual base salary for fiscal 2023 was $445,200. Mr. Lohani is also eligible to receive benefits that are substantially similar to those of our other employees. His employment agreement provides for an annual bonus, which was targeted at 55% of Mr. Lohani’s base salary for fiscal 2023. Payment of any
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bonus to Mr. Lohani is subject to approval by the Committee. In the event Mr. Lohani is terminated for any reason other than for cause (as such term is defined in the employment agreement), and other than as a result of his death or his inability to perform the essential functions of his position with or without reasonable accommodation, we will be obligated to pay him 100% of his then current monthly base salary for 12 months; provided that Mr. Lohani timely executes and does not revoke a full general release of claims agreement in favor of the Company. In the event of a change in control (as such term is defined in the employment agreement) of the Company, all unvested shares subject to outstanding equity awards with time-based vesting will vest in full immediately prior to, and contingent upon, the change in control, subject to continuous employment with the Company through the date of the change in control.
Additionally, pursuant to the terms of each of Mr. Lohani's employment agreement and the applicable equity award agreements, in the event of Mr. Lohani’s death or disability, all unvested shares with time-based vesting will vest in full and all unvested shares with performance-based vesting shall remain outstanding, and vest based on actual achievement of the underlying performance goals, with Mr. Lohani receiving a pro-rated portion of the performance-based awards based on the number of calendar days he was employed over the total number of calendar days in the performance period. The terms of the MSU award agreement also provide that in the event of a change-in-control, the MSUs will immediately vest based on the applicable performance levels attained through the date of the change in control, subject to continued services through that date.
Joshua Scutt is party to an employment agreement with us effective August 16, 2021 which has no specific term and constitutes at-will employment. Mr. Scutt’s annual base salary for fiscal 2023 was $420,000. Mr. Scutt is also eligible to receive benefits that are substantially similar to those of our other employees. His employment agreement provides for an annual bonus, which was targeted at 75% of Mr. Scutt’s base salary for fiscal 2023. Payment of any bonus to Mr. Scutt is subject to approval by the Committee. In the event Mr. Scutt is terminated for any reason other than for cause (as such term is defined in the employment agreement), and other than as a result of his death or his inability to perform the essential functions of his position with or without reasonable accommodation, we will be obligated to pay him 100% of his then current monthly base salary for 12 months; provided that Mr. Scutt timely executes and does not revoke a full general release of claims agreement in favor of the Company. In the event of a change in control (as such term is defined in the employment agreement) of the Company, all unvested shares subject to outstanding equity awards with time-based vesting will vest in full immediately prior to, and contingent upon, the change in control, subject to continuous employment with the Company through the date of the change in control.
Additionally, pursuant to the terms of each of Mr. Scutt's employment agreement and the applicable equity award agreements, in the event of Mr. Scutt’s death or disability, all unvested shares with time-based vesting will vest in full and all unvested shares with performance-based vesting shall remain outstanding, and vest based on actual achievement of the underlying performance goals, with Mr. Scutt receiving a pro-rated portion of the performance-based awards based on the number of calendar days he was employed over the total number of calendar days in the performance period. The terms of the MSU award agreement also provide that in the event of a change-in-control, the MSUs will immediately vest based on the applicable performance levels attained through the date of the change in control, subject to continued services through that date.
Katherine Ross is party to an employment agreement with us effective December 1, 2022, which has no specific term and constitutes at-will employment. Ms. Ross’s annual base salary for fiscal 2023 was $400,000. Ms. Ross is also eligible to receive benefits that are substantially similar to those of our other employees. Her employment agreement provides for an annual bonus, which was targeted at 55% of Ms. Ross’s base salary for fiscal 2023. Payment of any bonus to Ms. Ross is subject to approval by the Committee. In the event Ms. Ross is terminated for any reason other than for cause (as such term is defined in the employment agreement), and other than as a result of her death or her inability to perform the essential functions of her position with or without reasonable accommodation, we will be obligated to pay her 100% of her then current monthly base salary for 12 months; provided that Ms. Ross timely executes and does not revoke a full general release of claims agreement in favor of the Company. In the event of a change in control (as such term is defined in the employment agreement) of the Company, all unvested shares subject to outstanding equity awards with time-based vesting will vest in full immediately prior to, and contingent upon, the change in control, subject to continuous employment with the Company through the date of the change in control.
Additionally, pursuant to the terms of each of Ms. Ross's employment agreement and the applicable equity award agreements, in the event of Ms. Ross’s death or disability, all unvested shares with time-based vesting will vest in full and all unvested shares with performance-based vesting shall remain outstanding, and vest based on actual achievement of the underlying performance goals, with Ms. Ross receiving a pro-rated portion of the performance-based awards based on the number of calendar days she was employed over the total number of calendar days in the performance period. The terms of the MSU award agreement also provide that in the event of a change-in-control, the MSUs will immediately vest based on the applicable performance levels attained through the date of the change in control, subject to continued services through that date.
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Compensation of Named Executive Officers
Outstanding Equity Awards at June 30, 2023
The following table sets forth information regarding outstanding equity awards held by our named executive officers at June 30, 2023.
Option AwardsStock Awards
Name
Number of
securities
underlying
unexercised
options
exercisable
(1)
Number of
securities
underlying
unexercised
options
unexercisable
(1)
Option
exercise
price
Option
expiration
date
Number
of shares
or units of
stock that
have not
yet vested
Market
value of
shares or
units of
stock that
have not yet
vested
Equity
incentive
plan awards:
number of
unearned
shares, units
or other rights
that have not
yet vested
Equity
incentive
plan awards:
market or
payout value
of unearned
shares, units or
other rights that
have not vested
Steven R.
Beauchamp
14,716 — $17.00 3/18/202412,229 (2)$2,256,617 29,453 (10)$5,434,962 
107,400 — $24.80 8/18/202418,408 (3)$3,396,828 18,927 (11)$3,492,599 
53,000 — $35.28 8/17/202521,292 (4)$3,929,013 30,079 (12)$5,550,478 
— — — — 24,440 (5)$4,509,913 — — 
Toby J. Williams— — — — 5,605 (2)$1,034,291 8,679 (10)$1,601,536 
— — — — 8,437 (3)$1,556,880 5,633 (11)$1,039,457 
— — — — 9,858 (4)$1,819,097 30,079 (12)$5,550,478 
— — — — 7,914 (6)$1,460,370 — — 
— — — — 24,440 (5)$4,509,913 — — 
Ryan Glenn— — — — 1,043 (2)$192,465 2,192 (10)$404,490 
— — — — 1,570 (3)$289,712 1,409 (11)$260,003 
— — — — 2,464 (4)$454,682 5,083 (12)$937,966 
— — — — 3,957 (6)$730,185 — — 
— — — — 9,699 (5)$1,789,756 — — 
Rachit Lohani— — — — 21,973 (7)$4,054,678 3,509 (13)$647,516 
— — — — 8,931 (5)$1,648,037 4,728 (12)$872,458 
Joshua Scutt— — — — 728 (2)$134,338 2,192 (10)$404,490 
— — — — 1,461 (3)$269,598 1,690 (11)$311,856 
— — — — 2,957 (4)$545,655