Business Context and Reporting Period
This Form 8-K was filed by Paycom Software, Inc. on February 10, 2021. The report details the adoption of a new Performance-Based Restricted Stock Unit (PSU) Award Agreement and the authorization of PSU grants to certain executive officers under the company's 2014 Long-Term Incentive Plan (LTIP).
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation arrangements.
Material Changes and Executive Compensation
On February 10, 2021, the Compensation Committee authorized PSU awards to four executive officers. The target grant values and unit allocations are as follows:
| Executive Officer | Target Grant Value | Target Units | Maximum Awarded Units |
|---|---|---|---|
| Craig E. Boelte | $8,400,000 | 20,790 | 51,975 |
| Jeffrey D. York | $8,400,000 | 20,790 | 51,975 |
| Bradley Scott Smith | $2,200,000 | 5,445 | 13,613 |
| Jon D. Evans | $2,200,000 | 5,445 | 13,613 |
The awards vest based on the company's Relative Total Stockholder Return (TSR) compared to a peer group of 34 publicly traded companies. Vesting occurs over two performance periods: a two-year period ending December 31, 2022, and a three-year period ending December 31, 2023.
Performance Metrics and Vesting Conditions
The number of PSUs that vest ranges from 0% to 250% of the Target Units based on the company's percentile ranking against its peer group:
- Below Threshold (<30th Percentile): 0% payout.
- Threshold (30th Percentile): 50% payout.
- Target (60th Percentile): 100% payout.
- Maximum (≥90th Percentile): 250% payout.
Vesting accelerates at target performance in the event of death, total and permanent disability, or a Change in Control. Pro-rated vesting applies in cases of retirement or termination without cause.
Investor Verification Checklist
- Verify the specific composition of the 34-company peer group used for Relative TSR calculations.
- Review the full text of the Restricted Stock Unit Award Agreement (Exhibit 10.1) for detailed definitions of "Cause," "Good Reason," and "Change in Control."
- Monitor future filings for actual vesting outcomes based on the 2021-2022 and 2021-2023 performance periods.
- Confirm the impact of these awards on the company's total share count and potential dilution upon settlement.