Paycom Software, Inc. PAYC

28% shingled-prose overlap between the two filings.

2025: 60,576 chars · 2026: 55,169 chars

• Committee Report:93% overlap (544 → 540 chars)
• Pay Ratio (Item 402(u)):41% overlap (2,705 → 2,391 chars)
• Say-on-Pay proposal:96% overlap (2,648 → 2,648 chars)

• changedThis Compensation Discussion and Analysis describes our executive compensation philosophy, policies and practices and details the compensation paid to the following executive officers, collectively referred to as our NEOs: namedexecutiveofficers(“NEOs”):
• new2025 NEOs Title Chad Richison(1) Chief Executive Officer Shane Hadlock(2) President and Chief Client Officer Robert D.
• newFoster(3) Chief Financial Officer Randy Peck Chief Operating Officer Bradley S.
• newSmith(4) Former Chief Information Officer Craig E.
• newBoelte(5) Former Chief Financial Officer Amy Vickroy Walker(6) Former Chief Sales Officer
• new(1) During 2025, Mr. Richison served as Chief Executive Officer and President.
• newOn February 18, 2026, in connection with the promotion of Mr. Hadlock, Mr. Richison tendered his resignation from the position of President.
• new(2) Mr. Hadlock was appointed to serve as Chief Client Officer and Chief Technology Officer, effective August 18, 2025.
• newOn February 18, 2026, Mr. Hadlock was appointed to serve as President.
• newAs of the date of this proxy statement, his title is President and Chief Client Officer.
• new(3) Mr. Foster was appointed to serve as Chief Financial Officer, effective February 21, 2025.
• new(4) Mr. Smith resigned from his role as Chief Information Officer, effective October 31, 2025, and transitioned to the role of Senior Technical Strategist for the Company’s wholly owned subsidiary, Paycom Payroll, LLC (“Paycom Payroll”).
• changed(5) (1)Mr. Boelte retired from the Company effective February 21, 2025.
• new(6) Ms. Walker was promoted to serve as Chief Sales Officer, effective April 2, 2025.
• newMs. Walker transitioned to a non-employee consulting role in January 2026.
• changedOur solution requires virtually no customization and is based on a core system of record maintained in a single database for all HCM functions, including payroll, talent acquisition, talent management, managementandHR management and time and labor management applications.
• newWe are committed to delivering innovative solutions to our clients through our award-winning products and solutions, including IWant, our latest command-driven AI engine built on our single database, providing clients with employee data instantly and accurately, and Beti® and GONE, which significantly reduce payroll and PTO processing labor and errors for our clients.
• new35
• changed2025 2024Financial Performance Highlights
• newPaycom’s financial results for 2025 underscore the strength of our market differentiating and award-winning innovations and success of our full-solution automation strategy, which continues to deliver strong client ROI.
• newAs we prioritize AI developments, including our most recently launched command-driven AI product, IWant, and expanded data center capabilities, we are focused on realizing strong organic growth and operational efficiency.
• newIn 2025, Paycom delivered strong financial performance, exceeding initial expectations across key metrics.
• newTotal revenue reached $2.05 billion, with recurring and other revenue growing 10% year over year to $1.94 billion, surpassing our initial outlook of approximately 9% growth.
• newRevenue growth was broad-based across client sizes, with continued success in the upmarket segment, as revenue from clients with more than 1,000 employees grew faster than overall revenue.
• newOur 2025 performance was driven by strong operating leverage, automation, and disciplined cost management.
• newAdjusted EBITDA reached $882 million, representing a 43% adjusted EBITDA margin.
• newThese results reflect continued progress in scaling our platform efficiently while investing in innovation and service.
• newClient engagement and retention also strengthened during the year.
• newPaycom’s annual revenue retention rate increased to 91% in 2025, up from 90% in 2024, reflecting the value delivered through our automation initiatives and world-class client service.
• newWhile Paycom delivered solid financial performance in 2025, our stock price performance largely reflected broader market dynamics affecting the SaaS sector.
• newThroughout the year, SaaS and other high-growth technology companies experienced continued volatility driven by macroeconomic uncertainty and evolving investor sentiment regarding the perceived threat of emerging AI technologies on the software industry and broader market pressures affecting our clients.
• newIn 2025, Paycom made significant investments in AI and advanced data center infrastructure to support its full-solution automation strategy.
• changedWe remain committed to a pay-for-performance compensation program that is competitive to attract and retain best-in-industry talent, motivates executives to deliver stretch performance results and rewards individual contributions that drive our ability to deliver sustained stockholder value.
• newNormalized 2025 CEO compensation structure.
• newFollowing the full forfeiture of Mr. Richison’s 2020 CEO Performance Award in 2024, and with his annual compensation limited to base salary, payouts under the Annual Incentive Plan and perquisites in 2021 through 2024, the Committee undertook a comprehensive reassessment of the CEO compensation program.
• newIn consultation with its independent compensation consultant, the Committee approved a normalized 2025 CEO compensation framework designed to restore market alignment, address stockholder feedback and reinforce rigorous pay-for-performance principles, while appropriately incentivizing Mr. Richison’s continued leadership and contributions.
• new36
• newMr. Richison’s new compensation opportunities approved for 2025 were calibrated to align with relevant market benchmarks and designed to maintain a strong link between compensation outcomes, Company performance, and stockholder experience, with over 95% of total target compensation allocated to at-risk variable incentives.
• changedName 2025 Base Salary ($) Annual Incentive PSUs ($, at target) RSUs ($)StockAwards(1)($) Total Target Compensation ($) Target (%) Target ($) Chad Richison 865,280 100% 865,280 9,000,000 9,000,000 —19,730,560 RobertD.
• newMaintained a consistent compensation structure for other NEOs to support market competitiveness.
• newApproved in February 2025, target compensation opportunities for other continuing NEOs reflected the Company’s robust financial performance results achieved in 2024, while preserving a disciplined, performance-oriented incentive design.
• newConsistent with this approach, 50% of target equity compensation was delivered in the form of PSUs.
• newCompensation adjustments generally reflected expanded roles and increased scope of responsibilities.
• newThe Committee believes this structure appropriately balances performance accountability, executive retention, and competitive positioning within the executive talent market, while addressing stockholder feedback for a more consistent year-over-year compensation approach.
• newRevenue-based incentive design instills accountability in a volatile market environment.
• newThe Committee selected revenue as the core performance metric for both the annual cash incentive and equity incentive plans because it is the primary measure used by management and investors to assess the Company’s operating performance, growth trajectory and competitive positioning.
• newRevenue directly reflects execution against Paycom’s strategic priorities, including client acquisition, product adoption, retention, and expansion, and is the most meaningful driver of long-term stockholder value creation.
• newFor 2025, the Committee continued to maintain a one-year performance cycle for PSUs to preserve the rigor of the incentive plan in a volatile market environment.
• newIncentive plan payouts aligned with 2025 financial performance.
• newThe Committee determined that, on balance, incentive plan outcomes were appropriate and reflected strong operating execution and financial performance in a challenging environment.
• new› The annual incentive plan achieved a maximum payout based on 9% revenue growth compared to prior year.
• newThis outcome recognizes the leadership team’s direct influence on the Company’s most meaningful strategic progress during the year, including continued product innovation, expansion of the sales pipeline and strong client retention.
• new› Full-year revenue results supported a target-level payout for the 2025 PSUs, which did not provide for above-target payout opportunities.
• newAs of the vesting date, the value of shares delivered represented 61% of the initial target grant value on the vest day after considering the change in market value of our Common Stock since the grant date and accounting for the dividend equivalents associated with earned PSUs.
• changed2025 Say-On-Pay and Stockholder Engagement
• newPaycom maintains an annual advisory say-on-pay vote to provide our stockholders with the opportunity to express their views on our executive compensation program.
• newApproximately 91.4% of the stockholder votes present or represented at the 2025 annual meeting supported our say-on-pay proposal.
• newThe Committee considers the vote outcome an important input in future compensation decisions, as it reflects stockholder confidence in the Committee’s effectiveness in attracting, retaining and incentivizing key executive talent.
• newThe Board of Directors and the Committee prioritize regular and ongoing engagement with stockholders as a core component of effective governance oversight.
• newThese engagements provide meaningful insight into stockholder perspectives on our executive compensation program, governance practices, performance alignment and long-term strategic priorities.
• newIn 2025, independent members of the Board, with the support of management, continued their practice of proactively engaging with our largest stockholders to solicit feedback.
• newDuring our off-season stewardship-focused outreach, we contacted 12 of our top stockholders, representing approximately 49% of our outstanding shares held by non-affiliates and held meetings with eight stockholders who accepted our invitation, representing approximately 36% of our outstanding shares held by non-affiliates (based on ownership information as of June 30, 2025).
• newEach meeting was attended by at least one independent director, underscoring the Board’s commitment to direct engagement and accountability.
• newThroughout these discussions, stockholders expressed appreciation for enhancements made to our executive compensation program in response to prior engagement and feedback.
• newKey compensation-related themes raised in 2025 included:
• new› the Board and Committee’s priorities around executive retention;
• new› oversight of succession planning for the broader leadership team;
• new› preference for consistent year-over-year executive compensation approach; and
• new› compensation program design and alignment with strategic priorities.
• changedCompensation Component Objectives Base salary To compensate executive officers for services rendered during the fiscal year and to recognize their experience, skills, knowledge and responsibilities Annual Incentive Plan To provide performance-based performance-based,short-termcash compensation to reward executive officers for the achievement of pre-established, near-term pre-establishedperformance objectives that support our ability to drive long-term value creation Equity incentives To support retention and reward executive officers for long-term corporate performance to align their interests with those of our stockholders Benefits and perquisites To maintain competitiveness of our executive compensation program and to attract and retain executives; executives participate in broad-based benefits programs that are generally available to all employees, employeesand any supplemental benefits or perquisites are considered on a case-by-case basis
• newCompany Performance and Outlook › Company performance in the prior year and year-over-year growth, based on both financial and non-financial metrics › Our outlook and operating plan for the upcoming year › Market compensation trends and competitive dynamics in the markets in which we compete for talent Executive Role and Performance › Each executive officer’s role, responsibilities, skills and internal pay equity › Individual performance assessments, including the CEO’s evaluation of each executive officer’s individual performance (see “—Role of Chief Executive Officer”) › Prior year compensation and relevant terms of any applicable employment agreements, if any › Executive retention considerations Compensation Structure and Equity Usage Considerations › Compensation analysis and benchmarking provided by the Committee’s compensation consultant › The size of equity pool available and relative allocation among executive officers and the other equity plan participants › Overall equity dilution, burn rates and equity overhang levels › The value, accounting expense and ongoing retentive impact of proposed and previously granted equity awards
• newThe Committee reviews and approves the compensation of our executive officers and, with respect to our Chief Executive Officer, recommends compensation actions for approval by the Board of Directors.
• changedIn fulfilling these responsibilities, Amongothermatters,the Committee reviews and approves corporate goals and objectives related relevantto thecompensationofourexecutive compensation, officers,evaluates executive theperformance against oftheseofficersinlightofthose goals, goalsandobjectives,and approves all equity awards granted to ourexecutive officers.
• changedIn 2025, 2024,the Committee continued to engage Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant to provide input, analysis analysis,and advice about our compensation programs for executives and non-employee directors, including compensation philosophy and design, peer group data, competitive positioning and equity compensation practices.
• changedMeridian reports directly to the Committee and did not perform work for the Company Paycomin 2025 2024except as directed by the Committee.
• changedAfter reviewing and considering the factors set out by the applicable rules and regulations of the SEC and NYSE regarding the independence of compensation advisors, the Committee determined that Meridian is independent and its work in 2025 2024did not raise any conflicts of interest.
• changedIn 2025, 2024,Mr. Richison evaluated each executive officer other than himself, with input from other leaders within the Company.
• changedThis process led to a recommendation from Mr. Richison to the Committee with respect to the cash and equity compensation opportunities of each executive officer (other than himself). himself)aswellaswhetherequityincentiveawardsshouldbegranted.
• changedUltimately, our objective is to provide our executive officers with reasonable, competitive base salaries, time-based equity incentives to support retention retention,and the opportunity to earn additional compensation through performance-based incentives, which are designed to encourage achievement of pre-established performance target levels.
• changedBeginning in 2025, inordertobetteraligntheimplementationofsalarychangeswithotherannualexecutivecompensationdeterminations,the Committee transitioned intendsto reviewing, approving review,approveand implementing any implementannual executive officer salary changes changes,ifany,in the first quarter of each year to better align salary actions with the timing of other executive compensation determinations. year.

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