KORN FERRY KFY

Removed from 2024

• * Mr. Mulrooney stepped down as Chief Executive Officer, RPO and Digital, effective July 19, 2023, and terminated employment effective August 1, 2023.
• Our fiscal year 2024 performance reflects the relevance of our strategy, the top-line synergies created by our end-to-end talent and leadership solutions, and the increasing reach and relevance of the Korn Ferry brand.
• Thanks to the passion and performance of our colleagues, we have concluded the year with strong results, in what was a very challenging macroeconomic environment.
• OTHER HIGHLIGHTS** 83% 106% 930K Quarterly Dividend Increase in FY’24 (to $0.33 per Share) Quarterly Dividend Increase (Including FY’25 YTD Increase to $0.37 per Share) Shares Repurchased
• ** The Company increased its quarterly dividend from $0.18 to $0.33 per share in December 2023 and from $0.33 per share to $0.37 per share commencing in June 2024.
• RECENT BUSINESS AWARDS AND RECOGNITIONS America’s #1 Best Executive Recruiting Firm I Forbes Magazine (7 of 8 Years Running) #1 Executive Search Firm in the Americas I Hunt Scanlon (4th Year Running) A Leader in Recruitment Process Outsourcing (RPO) I Everest Group’s RPO Services Peak Matrix Assessment (7th Year Running) #1 EMEA RPO Provider I HRO Today One of America’s Best Management Consulting Firms I Forbes Magazine (3rd Year Running) EMEA’s #1 Best HR Consulting Firm I Statista One of America’s Best Professional Recruiting Firms I Forbes Magazine (7th Year Running) A 2024 Top Sales Training & Enablement Company I Training Industries (2nd Year Running) RECENT ESG AWARDS AND RECOGNITIONS 100 BEST COMPANIES FOR PARENTS GOLD HIRE VETS MEDALLION 2023 U.S. DEPARTMENT OF LABOR TOP COMPANIES FOR EXECUTIVE WOMEN EQUALITY 100 AWARD LEADER IN LGBTQ+ WORKPLACE INCLUSION HUMAN RIGHTS CAMPAIGN (PERFECT SCORE) LEADERSHIPLEVEL CDP RATING(TOP LEVEL) SILVER ECOVADIS SUSTAINABILITY RATING (TOP 15%) AMERICA’S CLIMATELEADERS 2023 USA TODAY PLATINUM MARCOM AWARDS 2021 & 2022 ESG REPORTS PLATINUM HERMES CREATIVE AWARDS 2021, 2022 & 2023 ESG REPORTS RECENT ESG ACCOMPLISHMENTS PUBLISHED 2023 ESG Report 2023 SASB Report TCFD Report $2.6M+ Donated Financially or Through In-Kind Services in CY’23 ISO Certified Global Privacy & Security Programs
• Governance Insights Selecting Performance Goals for Incentive Plans Q&A with Jerry Leamon, Compensation and Personnel Committee Chair Question: What factors does the Committee consider in selecting appropriate performance targets under the Company’s incentive plans?
• The Committee aims to incentivize executives over both the short- and long-term.
• As described in more detail below, the Company interacts with investors each year on a number of topics, including the financial metrics that investors view as most important.
• The Committee selects and sets performance metrics and associated targets with respect to the annual cash incentive plan using input from investors, the Company’s Strategic Plan and Annual Operating Plan (“AOP”), and the Committee’s independent compensation consultant.
• The fiscal 2024 AOP was premised on the assumption that there would be an economic downturn in the first half of the year, with a plateau beginning in the second half of the year, and the start of a modest recovery toward the end of the year.
• Also, in line with the Company’s diversification strategy to create more durable and resilient fee revenues, the Committee gives consideration to the cyclicality of each line of business as they behave differently through the various stages of an economic cycle.
• At the start of the fiscal year, the Committee evaluates each line of business along with the consolidated projected performance, and sets goals based on those projections, with the aim of establishing rigorous goals that balance between being challenging and achievable so as to keep management properly motivated.
• Based on the Committee’s view of the economic environment as well as its assumptions and projections, some of the threshold and target performance goals, and in one case, the maximum goal, were set below the prior fiscal year’s actual results.
• For Adjusted Fee Revenue, as an example, the Committee believed that the impact of the forecasted economic downturn would be different for each line of business and set the targets accordingly: • As Talent Acquisition represents the offering that is the most impacted by an economic downturn, the threshold and target Adjusted Fee Revenue goals for overall Company and RPO performance were set below prior year performance.
• • For Consulting, which is more durable and resilient through an economic cycle, only the threshold goal was set below prior year’s actual results, while the target and upside goals were both set above the prior year’s actual results.
• • For Professional Search and Interim, the Committee gave consideration to the fact that the prior year Adjusted Fee Revenue included a partial year for some recent acquisitions, while fiscal year 2024 Adjusted Fee Revenue included the full year.
• As such, the threshold, target, and upside Adjusted Fee Revenue goals for this line of business were all set above the prior year’s actual results.
• With respect to long-term equity incentives, the Committee believes that such awards should align the NEOs’ interests with those of stockholders and encourage the achievement of the long-term strategic goals of the Company.
• The Committee has chosen relative total stockholder return (TSR) as an appropriate performance metric for the performance-based long-term incentive awards because it aligns NEO and stockholder interests.
• Sixty percent of each NEO’s long-term equity award is a performance award subject to achievement of the relative TSR goal.
• As evidenced by the strong say-on-pay support, stockholders overwhelmingly support the Company’s incentive plan designs.
• Question: What specific factors led the Company to project downward performance with respect to some of the annual incentive plan performance metrics?
• The Company was projecting downward performance in certain areas as follows: 1.
• When establishing the AOP and selecting the annual incentive plan performance goals, there were a number of factors impacting the global business environment such as elevated levels of inflation, tight labor markets, and geo-political tensions, including international wars and supply chain disruptions, to name a few.
• Further, central banks tried to control inflation by raising near-term interest rates, which had a negative impact on the global business environment.
• For Adjusted Fee Revenue, the Company projected a continuation of the trends that started mid-way through fiscal year 2023, with Talent Acquisition continuing to decelerate, partially offset by Consulting and Digital reflecting low growth/stabilization.
• As described last year, the slope of the pandemic recovery curve was steep requiring the Company to find and attract incremental resources in a very tight labor market.
• For this reason, during much of fiscal year 2022 and the first half of fiscal year 2023, the Company’s Adjusted EBITDA Margin was at an elevated level which was not sustainable.
• With new business and projected Adjusted Fee Revenue expected to continue the moderation/contraction that occurred in the second half of fiscal year 2023 and the higher labor costs resulting from an extremely tight labor market for an extended period of time, the Committee considered the downward pressure on earnings and profitability, leading to reduced targets for Adjusted EBITDA Margin, Adjusted EPS, and Adjusted ROIC.
• Although a number of the metrics under the annual cash incentive plan were set below fiscal year 2023 actual results, in light of the business environment that existed at that time and which was expected to continue for a large portion of fiscal year 2024, the Committee deemed such goals to be rigorous and achievement not certain at the time that they were set.
• The Company is a global organizational consulting firm.
• The Company helps its clients design their organization—the structure, the roles, and the responsibilities, as well as how they compensate, develop, and motivate their people.
• As importantly, the Company helps organizations select and hire the talent they need to execute their strategy.
• For purposes of this graph, “Other” includes the value of Ms. MacDonald’s one-time promotion cash bonus.
• This peer group remained consistent with the peer group used for fiscal year 2023.
• I Revenues***
• *For avoidance of doubt, excludes CoStar Group, Inc., TriNet Group, Inc., and Verisk Analytics, Inc., as such companies were added to the peer group in December 2023 and were not used when making fiscal year 2024 compensation decisions.
• Arian and Distefano.
• •The Company’s ability to generate revenue growth in excess of its competitors’ revenue growth and market expectations;
• •The Company’s ability to allocate and deploy capital effectively so that its return on invested capital exceeds the Company’s cost of capital.
• When setting fiscal year 2024 targets, and determining fiscal year 2024 actual results, adjustments were made to eliminate the effect of currency fluctuations, including by translating actual results at a foreign currency rate comparable to the rate used in the Company’s 2024 AOP.
• For fiscal year 2024, as described in more detail above in “Governance Insights: Selecting Performance Goals for Incentive Plans,” when establishing the AOP and selecting the annual incentive plan performance goals, the Company was projecting downward performance in certain areas as compared to fiscal year 2023 as a result of the following:
• Further, central banks tried to control inflation by raising near-term interest rates, which had a negative impact on the global business environment.
• In response to the existing business environment, many of the Company’s clients were curtailing investment spending on growth initiatives, particularly for talent acquisition.
• We projected that in the near-term, the global demand for certain of our core solutions, products, and services would be lower in fiscal year 2024 compared to the prior year, even with
• the projected start of a modest recovery toward the end of the fiscal year.
• 2.For Adjusted Fee Revenue, the Company projected a continuation of the trends that started mid-way through fiscal year 2023, with Talent Acquisition continuing to decelerate, partially offset by Consulting and Digital reflecting low growth/stabilization.
• 3.As described last year, the slope of the pandemic recovery curve was steep requiring the Company to find and attract incremental resources in a very tight labor market.
• For this reason, during much of fiscal year 2022 and the first half of fiscal year 2023, the Company’s Adjusted EBITDA Margin was at an elevated level which was not sustainable.
• With new business and projected Adjusted Fee Revenue expected to continue the moderation/contraction that occurred in the second half of fiscal year 2023 and the higher labor costs resulting from an extremely tight labor market for an extended period of time, the Committee considered the downward pressure on earnings and profitability, leading to reduced targets for Adjusted EBITDA Margin, Adjusted EPS, and Adjusted ROIC.
• The Committee took the previously described factors into consideration when setting the fiscal year 2024 performance goals.
• Even the full achievement of the threshold goals for fiscal year 2024 would only result in payout of 50% of the target opportunity for such goal.
• Financial Metric / KPI FY’23 Actual* FY’24 Threshold FY’24 Target FY’24 Maximum FY’24 Actual** Adjusted Fee Revenue ($) (M) $2,835 $2,600 $2,700 $2,850 $2,788 Adjusted EBITDA Margin 16.1% 11.5% 13.0% 16.5% 15.4% Adjusted Diluted EPS ($) $4.94 $2.38 $3.38 $5.00 $4.35 Adjusted ROIC 13.1% 5.7% 8.2% 13.5% 10.8% Marquee & Regional Account Revenue ($) (M) $1,007 $1,000 $1,050 $1,100 $1,041 Top Rated Performers Retention 101.1 of Target% *** 97.9 of Target% *** *** 102.3 of Target% Consulting Adjusted Fee Revenue ($) (M) $677 $655 $680 $730 $703 Digital Adjusted Fee Revenue ($) (M) $355 $340 $355 $385 $374 Consulting Adjusted EBITDA Margin 16.0% 14.0% 15.0% 18.0% 17.1% Marquee & Regional Accounts Consulting Adjusted Fee Revenue ($) (M) $271 $270 $300 $350 $309 Pro Search & Interim Adjusted Fee Revenue ($) (M) $503 $550 $580 $630 $542 Pro Search & Interim Adjusted EBITDA Margin 22.0% 17.0% 18.0% 21.0% 19.0% Marquee & Regional Accounts Pro Search & Interim Adjusted Fee Revenue ($) (M) $80 $80 $92.5 $125 $105 RPO Adjusted Fee Revenue ($) (M) $425 $350 $395 $435 $357 RPO Adjusted EBITDA Margin 12.4% 10.0% 11.0% 12.5% 12.7% Marquee & Regional Accounts RPO Adjusted Fee Revenue ($) (M) $351 $303 $323 $363 $322
• Weighting Target Actual* Burnison/ Rozek Arian Distefano MacDonald Adjusted Fee Revenue ($) (M) $2,700 $2,788 30% ** ** ** Adjusted EBITDA Margin 13.0% 15.4% 15% ** ** ** Adjusted Diluted EPS ($) $3.38 $4.35 15% — — — Adjusted ROIC 8.2% 10.8% 15% — — — Marquee & Regional Account Revenue ($) (M) $1,050 $1,041 20% ** ** ** Top Rated Performers Retention *** 102.3 of Target% 5% — — — Consulting Adjusted Fee Revenue ($) (M) $680 $703 — 25% — — Digital Adjusted Fee Revenue ($) (M) $355 $374 — 15% — — Consulting Adjusted EBITDA Margin 15.0% 17.1% — 10% — — Marquee & Regional Accounts Consulting Adjusted Fee Revenue ($) (M) $300 $309 — 30% — — Pro Search & Interim Adjusted Fee Revenue ($) (M) $580 $542 — — 25% — Pro Search & Interim Adjusted EBITDA Margin 18.0% 19.0% — — 10% — Marquee & Regional Accounts Pro Search & Interim Adjusted Fee Revenue ($) (M) $92.5 $105 — — 35% — RPO Adjusted Fee Revenue ($) (M) $395 $357 — — — 25% RPO Adjusted EBITDA Margin 11.0% 12.7% — — — 10% Marquee & Regional Accounts RPO Adjusted Fee Revenue ($) (M) $323 $322 — — — 35%
• **Twenty percent (20%) of the goals applicable to Mr. Arian and thirty percent (30%) of the goals applicable to Mr. Distefano and Ms. MacDonald were based on the weighted average payout of Company-wide Adjusted Fee Revenue, Adjusted EBITDA Margin, and Marquee & Regional Account Revenue.
• However, when the goals were established, they were considered challenging to achieve given the continuing uncertain economic environment.
• Burnison’s and Rozek’s target bonuses for the year, 141.8% of Mr. Arian’s target bonus for the year, 104.0% of Mr. Distefano’s target bonus for the year, and 111.1% of Ms. MacDonald’s target bonus for the year).
• Because Mr. Mulrooney resigned his employment with the Company during the fiscal year, he was not eligible for and did not receive an annual cash incentive award.
• Burnison and Rozek), except for Ms. MacDonald, who was not an executive officer at the time of grant and thus did not receive any regular annual equity awards in fiscal year 2024, but has moved to the 60%/40% split beginning with fiscal year 2025.
• In connection with Ms. MacDonald’s appointment as Chief Executive Officer, RPO and in recognition of her increased responsibilities, in September 2024, she was awarded a promotion equity award with a target grant date value of $200,000, consisting of 3,980 time-based restricted shares.
• Burnison, Rozek, Arian, Distefano, and Mulrooney and Ms. MacDonald.
• Beginning with fiscal year 2025, Ms. MacDonald has moved to the standard NEO 60%/40% split.
• As described above, Ms. MacDonald received a promotion equity award upon her appointment as Chief Executive Officer, RPO.
• Mr. Mulrooney forfeited his fiscal year 2024 equity awards upon his resignation from the Company.
• Relative TSR Units were also granted to Mr. Rozek, with a target amount of 41,450 units (maximum of 82,900 units and minimum of zero); Mr. Arian, with a target amount of 30,200 units (maximum of 60,400 units and minimum of zero); Mr. Distefano, with a target amount of 23,690 units (maximum of 47,380 units and minimum of zero); and Mr. Mulrooney, with a target amount of 29,020 units (maximum of 58,040 units and minimum of zero).
• As noted previously, Mr. Mulrooney forfeited such award upon his termination of employment.
• Mr. Burnison received 67,110 restricted stock units, Mr. Rozek received 27,640 restricted stock units, Mr. Arian received 20,130 shares, Mr. Distefano received 15,790 shares, and Mr. Mulrooney received 19,340 shares, which were subsequently forfeited upon his termination of employment.
• In connection with her appointment as an executive officer, Ms. MacDonald received a promotion equity award consisting of 3,980 shares that vest in four equal annual installments beginning on September 5, 2024.
• April 30, 2024 marked the end of the three-year performance cycle for the performance-based restricted stock units granted to Messrs.
• This sixth place ranking translates into 91.3% of the award (i.e., 35,720, 14,880, 10,720, and 2,650 shares, respectively) vesting.
• Mr. Mulrooney forfeited his fiscal year 2022 performance-based restricted stock units upon his termination of employment and Ms. MacDonald did not receive a grant of fiscal year 2022 performance-based restricted stock units.
• In fiscal year 2024, Ms. MacDonald received 20 Unit Awards and no other NEOs received Unit Awards.
• Mr. Mulrooney did not become entitled to any severance benefits upon his voluntary resignation.
• Rozek, Executive Vice President, Chief Financial Officer and Chief Corporate Officer 2024 625,000 — 3,620,719 1,106,250 — 70,687 (5) 5,422,656 2023 625,000 — 3,295,355 543,739 — 71,434 4,535,528 2022 616,667 — 2,105,429 1,725,000 — 45,771 4,492,867 Mark Arian, Chief Executive Officer, Consulting 2024 550,000 — 2,637,600 779,900 — 82,209 (6) 4,055,709 2023 550,000 — 2,526,648 385,000 — 92,187 3,553,835 2022 533,333 — 1,515,800 1,158,108 — 56,808 3,264,049 Michael Distefano, Chief Executive Officer, Professional Search and Interim 2024 550,000 — 2,068,994 572,000 — (3) 393,328 (7) 3,584,322 2023 550,000 — 649,619 332,292 — (3) 66,568 1,598,479 Jeanne MacDonald, Chief Executive Officer, RPO 2024 517,617 200,000 (8) 199,796 611,050 — 586,880 (9) 2,115,343 Byrne Mulrooney, Former Chief Executive Officer, RPO and Digital 2024 139,584 — 2,534,365 — — 25,596 (10) 2,699,545 2023 550,000 — 2,526,648 275,856 — 93,063 3,445,567 2022 533,333 — 1,515,800 1,170,125 — 54,848 3,274,106
• In the case of Mr. Mulrooney, this value was forfeited upon the termination of employment from the Company.
• (7) Represents 401(k) company contribution of $2,934, executive medical insurance premium of $48,765, executive long-term disability insurance premium and/or imputed income of $620, executive term life insurance premium and/or imputed income of $4,158, and, in connection with a foreign assignment prior to becoming an executive officer, a tax preparation fee of $7,734 and a 2022 tax equalization settlement of $329,117.
• (10) Represents 401(k) company contribution of $707, an auto allowance of $1,350, executive medical insurance premium of $20,772, executive long-term disability insurance premium and/or imputed income of $163, and executive term life insurance premium and/or imputed income of $2,604.
• Burnison 7/11/2023 — — — — — — 67,110 3,399,793 7/11/2023 — — — 25,168 100,670 201,340 — 5,392,892 — — 1,500,000 3,000,000 — — — — — Robert P.
• Rozek 7/11/2023 — — — — — — 27,640 1,400,242 7/11/2023 — — — 10,363 41,450 82,900 — 2,220,477 — — 750,000 1,500,000 — — — — — Mark Arian 7/11/2023 — — — — — — 20,130 1,019,786 7/11/2023 — — — 7,550 30,200 60,400 — 1,617,814 — — 550,000 1,100,000 — — — — — Michael Distefano 7/11/2023 — — — — — — 15,790 799,921 7/11/2023 — — — 5,923 23,690 47,380 — 1,269,073 — — 550,000 1,100,000 — — — — — Jeanne MacDonald 9/5/2023 — — — — — — 3,980 199,796 — — 550,000 1,100,000 — — — — — Byrne Mulrooney 7/11/2023 — — — — — — 19,340 979,764 7/11/2023 — — — 7,255 29,020 58,040 — 1,554,601 — — 550,000 1,100,000 — — — — —