Note:
| Note: The criteria, objectives, and results in this table are disclosed in the limited context of our executive compensation program and should not be deemed to apply in other contexts. Payout percentages are rounded to the nearest tenth. (1)
| The performance metrics were consistent with the Company’s Board-approved fiscal year 2023 operating plan, the Company’s original fiscal year 2023 financial outlook, and our enterprise strategy. |
(1) (2)
| Pre-Tax Earnings from Continuing Operations includes consolidated net earnings for fiscal year 20212023 attributable to continuing operations before the deduction of income taxes (in millions). Unlike in fiscal year 2020, because the tax season was extended only to May 17, 2021 (as compared to July 15, 2020), the Company and the Compensation Committee had sufficient time following the completion of the extended tax season to calculate the Pre-Tax Earnings from Continuing Operations results. |
(2) (3)
| Market shareThe Fund the Future Savings strategic goal is a cost savings metric tied to the Company’s Block Horizons “Fund the Future” enabler, which is set based on an evaluation of current cost structures and identified potential opportunities within the Company. Cost savings is calculated based on cost savings as H&Rcompared to fiscal year 2022 in specific identified areas tied to Block U.S. returns e-filed inHorizons, including compensation savings, footprint optimization savings, interest expense savings, and other miscellaneous cost savings and efficiency efforts. The Fund the respective tax season (January through the relevant deadline), divided by the number of total number of e-filed returns reported by the Internal Revenue Service for that period.Future Savings strategic goal has now been fully achieved. |
The table below shows each NEO’s target opportunity and actual amount earned under our fiscal year 20212023 STI program:program. | Jeffrey J. Jones II | | | 125% | | | $1,243,750 | | | $2,304,669 | | | Tony G. Bowen | | | 90% | | | $540,000 | | | $1,000,620 | | | Thomas A. Gerke | | | 80% | | | $480,000 | | | $889,440 | | | Karen A. Orosco | | | 90% | | | $495,000 | | | $917,235 | | | Kellie J. Logerwell | | | 50% | | | $130,000 | | | $240,890 | |
| Jeffrey J. Jones II | | | $1,492,500 | | | $1,438,186 | | | Tony G. Bowen | | | $578,430 | | | $557,380 | | | Karen A. Orosco | | | $561,600 | | | $541,163 | | | Dara S. Redler | | | $468,000 | | | $450,969 | | | Kellie J. Logerwell | | | $140,400 | | | $135,291 | |
| H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 26 |
TABLE OF CONTENTS Long-Term Incentive Compensation Overview We believe that a significant portion of each NEO’s compensation should depend on the amount of long-term value we create for our shareholders. Our LTI compensation is equity-based and is designed to support multiple objectives, including: ▪ | aligning management’s interests with those of our shareholders,shareholders; |
▪ | tying compensation to the attainment of long-term financial and operating goals and strategic objectives to drive long-term value creation,creation; |
▪ | ensuring that realized compensation reflects changes in shareholder value over the long term,term; and |
▪ | recruiting, retaining, and motivating highly skilled executives. |
| Compensation Discussion and Analysis | Fiscal Year 2021 Compensation Program | H&R Block 2021 Proxy Statement 31
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Generally, the Company awards equity-based compensation on an annual basis within ninety days of the beginning of each fiscal year. From time to time, the Company also awards equity-based compensation as part of an employment offer or promotion or, in certain limited instances, as a special award. Fiscal Year 20212023 Performance-Based LTI For fiscal year 2021,2023, our NEOs received a mix of equity-based incentive awards as shown in the chart to the right, each of which is explained below.
At the end of the performance period, the Compensation Committee will certify the performance results and percentage payout for PSUs, and MSUs, as well as the resulting final number of units earned by each executive. There are no dividends paid on outstanding LTI during the vesting period, but dividend equivalents accumulate and are paid to the extent the award ultimately vests. Unvested units do not carry voting rights. | | | | |
Performance Share Units | | | | ▪ | | | PSUs establish a clear connection between NEOs’ compensation and the achievement of goals that are important for long-term value creation. | | | ▪ | | | The PSUs granted in fiscal year 20212023 give a participating NEO the opportunity to earn an initial payout, ranging from 0% (or 50% if the threshold goal is achieved) to 200% of target, based upon the Company’s performance against a pre-established performance metric. This initial payout is then modified based on the Company’s TSRTotal Shareholder Return (“TSR”) over the performance period relative to the S&P 500400 index. | |
For PSUs granted in fiscal year 2021:2023: ▪ | Performance is measured over a three-year period beginning on MayJuly 1, 20202022 and ending on AprilJune 30, 2023.2025. |
▪ | The pre-established performance metric is set levels of year-over-year growth inthree-year cumulative EBITDA from continuing operationsContinuing Operations (“Annual EBITDA Growth”EBITDA”) for each of the three years of the performance period. |
○ | The calculated payout percentages for each of the three individual years are averaged to determine the number of PSUs that ultimately vest. |
○ | . The Compensation Committee selected EBITDA Growth as the performance metric because it believes EBITDA from continuing operations is a driver of sustained value creation over the longer term. |
| H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 27 |
TABLE OF CONTENTS ▪ | The initial payout is then modified based on the Company’s TSR over the performance period relative to the S&P 500400 index, as follows, butwith payouts capped at 200%: |
The specific performance goals for PSUs are not disclosed at this time given their competitive sensitivity but will be disclosed upon completion of the performance period in future proxy statements. | Compensation Discussion and Analysis | Fiscal Year 2021 Compensation Program | H&R Block 2021 Proxy Statement 32
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The following formula is used to calculate the final number of earned PSUs, subject to the overall 200% cap:
Executives are required to hold at least 50% of the gross shares earned upon vesting of the PSUs for a period of one year after the vesting date. In addition, vested equity is subject to stock ownership guidelines that may extend the one-year period if the guidelines have not yet been met. Market StockRestricted Share Units
| | | | ▪
| | | MSUs tie the compensation of our NEOs directly to changes in stock price.
| | | ▪
| | | If certain pre-established performance thresholds are met, the MSUs granted in fiscal year 2021 give an NEO the opportunity to earn a payout between 50% and 200% of target, based upon the change in the Company’s stock price.
| |
For MSUs granted in fiscal year 2021:
▪ | Performance is measured over a three-year performance period beginning on May 1, 2020 and ending on April 30, 2023, with the cumulative results for that period determining vesting. |
▪ | The vesting of MSUs is subject to two thresholds, both of which must be satisfied for any payout to occur: |
○ | First, the Ending Date Price must be greater than or equal to 50% of the Grant Date Price
|
▪ | “Ending Date Price” is the average of the Company’s stock price for the five consecutive trading days beginning on the date the Company’s Annual Report on Form 10-K is filed with the SEC for the last fiscal year within the performance period |
▪ | “Grant Date Price” is the Company’s stock price for the five consecutive trading days ending on the grant date |
○ | Second, the Company’s average return on invested capital (“ROIC”) must be greater than or equal to 14%
|
▪ | “ROIC,” as defined in the award agreement, is calculated over the three-year performance period |
▪ | The Compensation Committee selected ROIC as it believes the investment community considers this metric to be an effective measure of capital efficiency |
▪ | Failure to attain either of these thresholds results in forfeiture of the entire MSU award. |
▪ | If the performance thresholds are met, the number of MSUs earned is calculated based on the ratio of the average of the Grant Date Price and the Ending Date Price. |
| Compensation Discussion and Analysis | Fiscal Year 2021 Compensation Program | H&R Block 2021 Proxy Statement 33
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The following formula is used to calculate the final number of earned MSUs, assuming the initial thresholds are met:
Restricted Share Units
| | | | ▪ | | | RSUs link our NEOs’ compensation with shareholders’ interests as their value fluctuatesvaries with fluctuations in our stock price. | | | ▪ | | | The RSUs granted in fiscal year 20212023 vest ratably over three years, providing a retention incentive for NEOs. | |
Fiscal Year 20212023 LTI Vesting Provisions PSUs and MSUs generally vest on the third anniversary of the grant date. RSUs generally vest in one-third annual increments beginning on the first anniversary of the grant date. However, certain special grants may have a different vesting schedule. Awards may vest upon termination of employment prior to the vesting date under certain circumstances, as described below under “Termination of Employment, Severance, and Transition Arrangements.” | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 28 |
TABLE OF CONTENTS Fiscal Year 20212023 LTI Compensation Awards For fiscal year 2021,2023, the Company awarded our NEOs PSUs MSUs, and RSUs in the amounts shown below. The fiscal year 20212023 PSUs and MSUs are performance-based and will vest on June 30, 2023August 31, 2025 and the fiscal year 20212023 RSUs vest in one-third annual increments beginning on June 30, 2021. All NEO LTI target opportunities remained unchanged from fiscal year 2020.August 31, 2023. | Officers | | Award Value ($)(1) | | PSUs (#)(1) | | MSUs (#)(1) | | RSUs (#)(1) | | Officers | | Annual Award
Value ($) | | PSUs (#)(1) | | RSUs (#)(1) | | | Jeffrey J. Jones II | | $5,500,000 | | 189,264 | | 98,215 | | 77,031 | | Jeffrey J. Jones II | | $6,200,000 | | 82,956 | | 48,223 | | | Tony G. Bowen | | $1,300,000 | | 44,736 | | 23,215 | | 18,208 | | Tony G. Bowen | | $1,700,000 | | 22,746 | | 13,223 | | | Thomas A. Gerke | | $1,100,000 | | 37,853 | | 19,643 | | 15,407 | | Karen A. Orosco(2) | | $1,700,000 | | 22,746 | | 13,223 | | | Karen A. Orosco | | $1,100,000 | | 37,853 | | 19,643 | | 15,407 | | Dara S. Redler | | $950,000 | | 12,711 | | 7,389 | | | Kellie J. Logerwell | | $250,000 | | 8,603 | | 4,465 | | 3,502 | | Kellie J. Logerwell | | $270,000 | | 3,613 | | 2,100 | |
(1)
| Represents the value of our annual LTI compensation program awards, which are subject to rounding. These award values are converted into: (i) the number of PSUs and MSUs based on the Monte Carlo valuation model as of the grant date and (ii) the number of RSUs based on the closing price of one share of common stock on the grant date. The number of PSUs MSUs, or RSUs resulting from the conversion of the award value to the number of units awarded is rounded up to the nearest whole unit, such rounded numbers are reflected in the chart above. As such, the award value reported in this column may differ from the accounting grant date fair value under ASC 718. |
(2)
| Includes the one-time special $400,000 award for Ms. Orosco described above. All of Ms. Orosco’s fiscal year 2023 equity awards were forfeited upon her departure from the Company, consistent with the terms of our equity award agreements. See page 44 below for additional information. |
VESTING AND PERFORMANCE-BASED PAYOUTS OF FISCAL YEAR 20192021 PSUS AND MSUS Our executives, including our NEOs (other than Ms. Redler who was not employed by the Company at the time), received PSUs and MSUs in fiscal year 2019.2021. Performance for these PSUs and MSUs was based on a three-year period beginning on May 1, 20182020 and ending on April 30, 2021.2023. Performance was certified, and the overall payout was approved by the Compensation Committee in July 2021.2023. Measurement of performance for the outstanding PSUs and MSUs awarded prior to fiscal year 2022 continues to be based on our prior fiscal year in effect at that time (May 1 to April 30), pursuant to the terms of the applicable award agreements and as determined by the Compensation Committee. Fiscal Year 20192021 PSUs Under the terms of the award agreements for fiscal year 20192021 PSUs, a participating executive had the opportunity to earn an initial payout based upon the Company’s performance against pre-established EBITDA performance. The Committee selected a setpreset level of EBITDA from continuing operationsgrowth for fiscaleach year 2019, withof the target set at the level provided in the fiscal year 2019 operational plan approved by the Board, followed by two years of EBITDA growth. A 150% cap was placed on fiscal year 2019 performance with a 200% cap for performance in fiscal years 2020 and 2021.period. | Compensation Discussion and Analysis | Vesting and Performance-Based Payouts of Fiscal Year 2019 PSUs and MSUs | H&R Block 2021 Proxy Statement 34
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The result for each year was averaged over the three-year period to determine the initial payout (the “EBITDA Percentage”). This initial payout was then modified based on the Company’s TSR relative to the S&P 500 index over the performance period. The TSR modifier could increase or decrease the payout by up to 25% of the initial payout amount. However, notwithstanding the result of that calculation, the maximum earned amount was capped at 200%. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 29 |
TABLE OF CONTENTS Based on the Company’s results relative to the preset thresholds, targets, and maximums, the Compensation Committee approved the followingbelow results and applicable EBITDA performance:performance. No adjustments were made to account for the impacts of the COVID-19 pandemic or extended tax filing deadlines. (1)
| 150% cap was placed on fiscal year 2019 performance.“Fiscal Year” for PSU purposes refers to the applicable May 1 to April 30 period. |
(2)
| EBITDA from Continuing Operations is defined as earnings of the Company from continuing operations excluding interest expense, taxes, depreciation and amortization. |
(3)
| EBITDA Annual Growth means the year-over-year percentage change in EBITDA from Continuing Operations from one fiscal year to the immediately subsequent fiscal year in the Performance Period. |
The Compensation Committee then applied a TSR modifier of 84.9%125% based on the Company’s TSR over the performance period.period relative to the S&P 500, which ranked in the 93rd percentile. Based on the performance percentage and the TSR modifier, our NEOs received 86.1%166.67% of the PSUs they were initially granted, as well as additional shares of common stock representing dividend equivalents accrued on the number of shares that ultimately vested. The table below shows the target-level opportunity and actual award with respect to the PSUs granted to each of our NEOs in fiscal year 2019:2021: | Officers | | PSUs Outstanding
(#)(1) | | | | EBITDA
Percentage | | | | TSR
Modifier | | | | Actual Shares
Received (#)(2) | | Officers | | PSUs
Outstanding
(#)(1) | | | | EBITDA Percentage(1) | | | | TSR Modifier(1) | | | | Actual
Shares
Received
(#)(2) | | | Jeffrey J. Jones II | | 139,352.1 | | x | | 101.4% | | x | | 84.9% | | = | | 119,983 | | Jeffrey J. Jones II | | 214,341.5 | | | x | | 133.3% | | x | | 125.0% | | = | | | 357,236 | | | Tony G. Bowen | | 25,337.8 | | x | | 101.4% | | x | | 84.9% | | = | | 21,816 | | Tony G. Bowen | | 50,663.5 | | 84,440 | | | Thomas A. Gerke | | 27,871.4 | | x | | 101.4% | | x | | 84.9% | | = | | 23,998 | | Karen A. Orosco | | 42,868.5 | | 71,448 | | | Karen A. Orosco | | 22,803.1 | | x | | 101.4% | | x | | 84.9% | | = | | 19,634 | | Kellie J. Logerwell | | 9,742.9 | | 16,239 | | | Kellie J. Logerwell | | 6,335.0 | | x | | 101.4% | | x | | 84.9% | | = | | 5,455 | | |
(1)
| The number of PSUs outstanding includes dividend equivalents accrued on the number of PSUs granted in fiscal year 2019.2021. The PSUs outstanding, EBITDA Percentage, and TSR Modifier are rounded to the nearest tenth.tenth for the purposes of this illustration. |
(2)
| The amountnumber of shares actually received by the NEOs includes additional shares of common stock equal in value to the total dividends that would have been paid on the number of shares of common stock that vested pursuant to the payout calculation and are rounded up to the next whole share. |
As described above, the mandatory post-vesting holding requirement requires that the executive hold at least 50% of the gross shares earned upon vesting of the PSUs for a period of one year after the vesting date. | Compensation Discussion and Analysis | Vesting and Performance-Based Payouts of Fiscal Year 2019 PSUs and MSUs | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 35
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TABLE OF CONTENTS Fiscal Year 20192021 MSUs Under the terms of the award agreements for MSUs granted in fiscal year 2019,2021, if certain performance thresholds described below were met, a participating executive had the opportunity to earn a payout between 50% and 200% of the executive’s target number of MSUs based on the difference between the Grant Date Price and the Ending Date Price. The grant date for the fiscal year 20192021 MSUs was June 30, 2018.2020 and the performance period was May 1, 2020 to April 30, 2023. The vesting of MSUs was subject to two thresholds, both of which must have been satisfied for any payout to occur.occur: ▪ | First, the 2019 MSU Ending Date Price must have beenbe greater than or equal to 50% of the 2019 MSU Grant Date Price.Price |
○ | “Ending Date Price” is the average of the Company’s stock price for the five consecutive trading days beginning on the date the Company’s Annual Report on Form 10-K is filed with the SEC for the last fiscal year within the performance period. Given the Company’s fiscal year end change, the Compensation Committee determined to use June 16, 2023 (the average historical date for Form 10-K filings) as the beginning date for this calculation, so as to best capture the original intent of the award design |
○ | “Grant Date Price” is the Company’s stock price for the five consecutive trading days ending on the grant date |
▪ | Second, the Company’s average return on invested capital (“ROIC”) must be greater than or equal to 14% |
○ | “ROIC, during the three-year performance period,” as defined in the award agreement, must have been greater than or equalis calculated over the three-year performance period |
○ | The Compensation Committee selected ROIC as it believes the investment community considers this metric to 14%.be an effective measure of capital efficiency |
If the performance thresholds are met, the number of MSUs earned is calculated by dividing the Ending Date Price by the Grant Date Price. The Company’s Ending Date Price was greater than 50% of the Grant Date Price and ROIC was 34.8% over the relevant period for the 2021 MSUs. Based on the Company’s results, the Compensation Committee certified that both thresholds were achieved and approved a performance percentage of 105.3%200.0%, representing the maximum payout for an MSU Ending Date Price of $23.97$33.02 divided by the MSU Grant Date Price of $22.77. As a result, our NEOs received 105.3% of the MSUs they were initially granted, plus dividend equivalents accrued on the number of shares that ultimately vested.$14.19. The table below shows the target-leveltarget opportunities and actual awards under our fiscal year 20192021 MSU program for our NEOs: | Officers | | MSUs
Outstanding (#)(1) | | | | Performance
Percentage | | | | Actual
Shares Received (#) | | Officers | | MSUs
Outstanding (#)(1) | | | | Performance
Percentage(1) | | | | Actual
Shares Received (#)(2) | | | Jeffrey J. Jones II | | 72,360.0 | | x | | 105.3% | | = | | 76,174 | | Jeffrey J. Jones II | | 111,228.5 | | | x | | 200.0% | | = | | | 222,458 | | | Tony G. Bowen | | 13,157.1 | | x | | 105.3% | | = | | 13,851 | | Tony G. Bowen | | 26,291.0 | | 52,582 | | | Thomas A. Gerke | | 14,472.5 | | x | | 105.3% | | = | | 15,236 | | Karen A. Orosco | | 22,245.7 | | 44,492 | | | Karen A. Orosco | | 11,841.7 | | x | | 105.3% | | = | | 12,466 | | Kellie J. Logerwell | | 5,056.6 | | 10,114 | | | Kellie J. Logerwell | | 3,290.1 | | x | | 105.3% | | = | | 3,464 | | |
(1)
| The number of MSUs outstanding includes dividend equivalents accrued on the number of MSUs granted in fiscal year 2019.2021. The MSUs outstanding and Performance Percentage are rounded to the nearest tenth. |
(2)
| The number of shares actually received by the NEOs includes additional shares of common stock equal in value to the total dividends that would have been paid on the number of shares of common stock that vested pursuant to the payout calculation and are rounded up to the next whole share. |
FISCAL YEAR 20222024 COMPENSATION PROGRAM NEO Compensation RedesignLevels During fiscal year 2021, the Compensation Committee, with the assistance of CAP, its new independent compensation consultant, undertook a comprehensive redesign of our executive compensation program, in order to better align our compensation practices with our new Block Horizons 2025 strategy. As a result of that review, which included CAP conducting interviews of Compensation Committee members and members of management and considering market analyses,In August 2023, the Compensation Committee approved the fiscal year 2022 executive compensation program described below.
NEO Compensation Levels and Impact of Change in Fiscal Year
In June 2021, the Compensation Committee approved the total target direct compensation (“TTDC”)TTDC for fiscal year 20222024 shown in the table below.
| Jeffrey J. Jones II | | | $995,000 | | | $1,243,750 | | | $5,500,000 | | | $7,738,750 | | | 0.0% | | | Tony G. Bowen | | | $618,000 | | | $556,200 | | | $1,600,000 | | | $2,474,200 | | | 13.7% | | | Thomas A. Gerke | | | $600,000 | | | $480,000 | | | $1,100,000 | | | $2,180,000 | | | 0.0% | | | Karen A. Orosco | | | $600,000 | | | $540,000 | | | $1,300,000 | | | $2,440,000 | | | 13.8% | | | Kellie J. Logerwell | | | $270,000 | | | $135,000 | | | $260,000 | | | $665,000 | | | 3.9% | |
| Jeffrey J. Jones II | | | $995,000 | | | $1,492,500 | | | $7,000,000 | | | $9,487,500 | | | 9.2% | | | Tony G. Bowen | | | $642,700 | | | $578,430 | | | $1,800,000 | | | $3,021,130 | | | 3.4% | | | Dara S. Redler | | | $520,000 | | | $468,000 | | | $1,050,000 | | | $2,038,000 | | | 5.2% | | | Kellie J. Logerwell | | | $290,000 | | | $145,000 | | | $280,000 | | | $715,000 | | | 3.4% | |
| Compensation Discussion and Analysis | Fiscal Year 2022 Compensation Program | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 36
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TABLE OF CONTENTS The TTDC increase for Mr. Bowen is intended to recognize his contributions to the Company’s performance in fiscal year 2021 and the critical role he plays in the Company’s Block Horizons 2025 strategy. The TTDC increase for Ms. Orosco is intended to recognize her promotion in June 2021 to President, Global Consumer Tax and Service Delivery, which resulted in a substantial increase in scope and responsibility, as well as her leadership through two challenging tax seasons, contributing to the Company’s fiscal year 2021 performance. The increases for Mr. Bowen and Ms. Orosco also take into account market data for comparable positions within our Peer Group. The TTDC increase for Ms. Logerwell is intended to recognize her performance during fiscal year 2021, including her leadership in implementing the Company’s fiscal year end change. To account forCompensation Committee approved the fiscal year end change and to compensate our NEOs for the two-month transition period (May and June 2021), the Compensation Committee applied a 14/12 proration to the executives’ individual fiscal year 20222024 STI and LTI target award opportunities. This proration will be applied for fiscal year 2022 only,plans in August 2023, which were substantially consistent with target amounts reverting to the standard valuesplans used in fiscal year 2023. Therefore, finalThe only material plan change was the replacement of the Fund the Future Savings metric in the STI andplan with a New U.S. Clients metric as the Fund the Future strategic goal has been fully achieved. No material changes were made to the LTI target amounts for our NEOs is as follows:
| Jeffrey J. Jones II | | | 1,451,042 | | | 6,416,667 | | | Tony G. Bowen | | | 648,900 | | | 1,866,667 | | | Thomas A. Gerke | | | 560,000 | | | 1,283,333 | | | Karen A. Orosco | | | 630,000 | | | 1,516,667 | | | Kellie J. Logerwell | | | 157,500 | | | 303,333 | |
Performance for theplan or equity mix used in fiscal year 2022 STI plan will be based on results for our new2023. The fiscal year the period from July 1, 2021 to June 30, 2022, and the performance period for fiscal year 2022 PSUs will be based on the three-year period from July 1, 2021 to June 30, 2024. Measurement of performance for the outstanding PSUs and MSUs awarded in prior fiscal years will continue to be based on our prior fiscal year period (May 1 to April 30).
STI Plan Design
As a part of the compensation redesign discussed above, in June 2021 the Compensation Committee approved the following STI plan design for fiscal year 2022:
| | | | ▪
| | | Retains Revenue from Continuing Operations and Pre-Tax Earnings from Continuing Operations metrics used in prior years.
| | | ▪
| | | Replaces prior Market Share metric with a pre-established cost savings metric tied to our new Block Horizons 2025 strategy.
| | | ▪
| | | Incorporates an individual modifier that can adjust the funded payout +/- 25% in order to motivate strong individual performance and tie each executive’s pay to individual execution on the Block Horizons strategy.
| | | ▪
| | | Maintains our fiscal year 2021 approach to threshold and maximum performance; total payout cannot exceed 200% of target.
| |
This approach maintains the balance between the top- and bottom-line metrics while also reinforcing an alignment2024 award agreements are materially consistent with the forms filed as exhibits to the Company’s new strategy and recognizing individual accomplishments that may also contribute to Block Horizons 2025 success.Current Report on Form 8-K filed with the SEC on August 17, 2022. The specific goals for each metric are not disclosed at this time given their competitive sensitivity but will be disclosed upon completion of the performance period in the Compensation Discussion and Analysis section of next year’sthe applicable proxy statement.
| Compensation Discussion and Analysis | Fiscal Year 2022 Compensation Program | H&R Block 2021 Proxy Statement 37
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LTI Plan Design
As a part of the Compensation redesign, the Compensation Committee also approved the following key design elements for fiscal year 2022 awards:
The fiscal year 2022 award agreements are filedLTI target increase for Mr. Jones was intended to retain, motivate, and fairly compensate Mr. Jones given his strong performance since joining the Company in 2017. The TTDC increases for our other NEOs were based on a competitive review of peer proxy and market survey data as exhibits to the Company’s Current Report on Form 8-K filedwell as individual performance. The LTI target increases for Mr. Bowen and Ms. Redler were modest and Ms. Logerwell’s TTDC increase was generally aligned with the SEC on June 30, 2021. The grant date for these fiscal year 2022 awards, and annual LTI awards going forward, will be August 31, to align with the Company’s new fiscal year. The specific levels of EBITDA from Continuing Operations are not disclosed at this time given their competitive sensitivity, but will be disclosed upon completion of the performance period. Mr. Gerke’s fiscal year 2022 equity-based compensation awards contain the same modified vesting provisions as his fiscal year 2021 equity-based awards, as described below under “Termination of Employment Provisions in LTI Award Agreements.”merit increases received by our broader employee population.
The Company provides certain benefits to all full-time employees, including employer matching contributions to our qualified retirement plan, an employee stock purchase plan that permits purchases of our common stock at a discount, life insurance, health and welfare benefit programs, and the opportunity to use our tax preparation services for no charge. Benefits for executives generally are the same as benefits for all other full-time employees, except that NEOs and certain key employees may participate in our executive group life insurance program and our deferred compensation plan and are entitled to certain relocation benefits as described below. Mr. Jones is also permitted certain minimal personal use of the Company’s fractional share of a private aircraft as described below. We have structured our executive benefit program to be consistent with our philosophy of emphasizing performance-based elements in our executive compensation program. Perquisites represent an immaterial element of our ongoing executive compensation program. The Company offers a group life insurance program to executives that provides death benefits up to three times the participating executive’s annual base salary. The death benefits are payable to beneficiaries designated by the participating executive. Our deferred compensation plan is designed to assist our executives in building retirement savings by offering participants the opportunity to defer their receipt of base salary and STI compensation. | Compensation Discussion and Analysis | Other Benefits | H&R Block 2021 Proxy Statement 38
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The Company also provides relocation benefits to eligible employees under our Executive Homeowner Relocation Policy. These relocation benefits generally cover certain common relocation expenses and are subject to a clawback requirement. Corporate JetAircraft Usage
The Company leases a fractional share of a private aircraft to allow employeesexecutives to safely and efficiently travel for business purposes given our large, distributed retail footprint and franchise operations in many locations not accessible by commercial airlines. The corporate aircraft allows our executives to be far more productive than commercial flights given that the corporate aircraft provides a confidential, safe, and productive environment in which to conduct business. Beginning in fiscal year 2021, the Compensation Committee approved Mr. Jones’s usage of the private aircraft for personal travel up to a specified maximum per fiscal year. For fiscal year 2021,2023, the Committee approved a maximum of 30 hours for personal travel. The Committee approved this usage taking into consideration health concerns due to the ongoing COVID-19 pandemic, concerns over Mr. Jones’s personalfor security and safety and efficiency,purposes and to increase Mr. Jones’s efficiency and time available for business purposes. Nobusiness. This benefit is taxable to Mr. Jones, and no tax gross-up is provided to Mr. Jones on this benefit.by the Company. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 32 |
TABLE OF CONTENTS COMPENSATION BENCHMARKING We benchmark our executive compensation practices relative to publicly-disclosedpublicly disclosed information for a defined group of peer companies, which for fiscal year 20212023 is set forth below (the “Peer Group”). We also review compensation data from multiple general industry survey sources, reflective of general industry pay levels forcomparing companies of relevant size based on total revenue as compared tosize and positions of comparable duties for each of the NEOs. For fiscal year 2021,2023, these survey sources were the Aon Hewitt TotalRadford Global Compensation Measurement Executive SurveyDatabase and the Willis Towers Watson CDB General Industry Executive Compensation Survey. The Compensation Committee reviews summary survey and Peer Group data to confirm that the market references we use are appropriate for our business and the industries in which we compete for executive talent. With the input of its independent compensation consultant, the Compensation Committee reviews the Peer Group annually and revises the group as circumstances warrant. We endeavor to identify companies that are comparable to or competitive with our core businesses, including tax and professional products and services, that have similar strategic plans or outlook, or that are comparable on a variety of relevant metrics. As a result of the Compensation Committee’s annual review in November of 2021, with input from its independent compensation consultant, the Compensation Committee removed Broadridge Financial Solutions, Inc., CoreLogic, Inc., and Robert Half International Inc., and added ACI Worldwide Inc., TriNet Group, Inc., and Workday, Inc. to the peer group used for benchmarking fiscal year 2023 compensation. These changes enable better alignment to the Company from a median revenue size perspective and with the Company’s strategic goals. The graphic to the right shows the Peer Group utilized by the Compensation Committee in benchmarking fiscal year 2023 compensation. | | | |
Fiscal Year 2024 Peer Group annually and revises it as circumstances warrant. We endeavor to identify companies that are comparable to or competitive with our core businesses, including tax and professional products and services, that have similar strategic plans or outlook, or that are comparable on a variety of relevant metrics. As a result of the Compensation Committee’s annual review in March of 2020, with input from its independent compensation consultant, the Compensation Committee made adjustments to the Peer Group companies used for benchmarking fiscal year 2021 pay determinations to better align from a size perspective and with the Company’s strategic goals of high growth and a technology focus. The following shows these changes, and the Peer Group considered by the Compensation Committee in benchmarking fiscal year 2021 compensation: The Compensation Committee conducted its annual review of Peer Group companies to be referenced in setting fiscal year 20222024 compensation in MarchNovember of 2021.2022. With input from its independent compensation consultant, the Committee determined that no changes were necessary for fiscal year 2022.2024. | Compensation Discussion and Analysis | Compensation Benchmarking | H&R Block 2021 Proxy Statement 39
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ROLES OF THE INDEPENDENT COMPENSATION CONSULTANT, MANAGEMENT, AND THE BOARD IN EXECUTIVE COMPENSATION Use of External Consultant The Compensation Committee previously retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its external, independent compensation consultant for a portion of fiscal year 2021 and prior. In September 2020, the Compensation Committee retained CAPCompensation Advisory Partners LLC (“CAP”) as its external, independent compensation consultant and CAP has served in that capacity since that time.
The Compensation Committee’s independent compensation consultant reports directly to the Committee and the Committee may replace the consultant or hire additional consultants at any time. The independent compensation consultant advises the Compensation Committee on issues pertaining to executive compensation, including the assessment of market-based compensation levels, the selection of our Peer Group, our pay positioning relative to the market, the mix of pay, incentive plan design, and other executive employment matters, andmatters. The independent consultant provides its advice based in part on prevailing and emerging market practices, as well as our specific business context. The Compensation Committee retains sole authority to hire its compensation consultants, approve fees, determine the nature and scope of services, evaluate performance, and terminate engagement. The Compensation Committee believes that external compensation consultants for the Compensation Committee should be independent and serve the Compensation Committee exclusively and should not perform any other services for the Company at any time. Neither FW Cook nor CAP performs anyno other services for the Company. In accordance with the requirements of applicable SEC rules and NYSE listing standards, the Compensation Committee reviewed theCAP’s independence of both FW Cook and CAP and determined that eachit meets the independence criteria established under such rules and listing standards. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 33 |
TABLE OF CONTENTS Executive Evaluation Process The Compensation Committee generally reviews our CEO’s performance each year against pre-established financial, operational, strategic, and individual objectives. Our CEO is responsible for sharing with the Compensation Committee his current year accomplishments in light of current year objectives, as well as proposed objectives for the following year. The Committee keeps the independent members of the Board apprised of its activities related to the review and approval of CEO performance and compensation matters and, from time to time, consults with such independent members on matters concerning CEO performance and compensation. Based on its evaluation, the Compensation Committee determines the CEO’s compensation. Following such determination, theThe Chairman of the Board then discusses the Compensation Committee’s evaluation and determinations with the CEO. Our CEO does not play a role in determining his own compensation, other than discussing his annual performance review with the Chairman of the Board and sharing his accomplishments and proposed objectives with the Compensation Committee. The Compensation Committee consults with the CEO concerning the performance of other NEOs and approves the compensation of such officers, taking into account recommendations of the CEO and input from the Board. Our CEO and Chief People and Culture Officer assist the Compensation Committee in reaching compensation decisions regarding executives other than themselves. In addition, the CEO (with input from other senior executives) develops recommendations for the Committee’s approval regarding performance goals under our STI and LTI compensation programs. Executives do not play a role in determining their own compensation, other than discussing their annual performance reviews with their supervisors and, in the case of the CEO, making recommendations for the Committee’s approval regarding performance goals under our STI and LTI programs. TheIn its sole discretion, the Committee reviews the recommendations and approves any changes as it determines in its sole discretion to be in the best interests of the Company and our shareholders. OTHER EXECUTIVE COMPENSATION PRACTICES AND POLICIES Compensation “Clawback” Policy and Restrictive Covenants Our Board has adopted a “clawback” policy set forth in our Governance Guidelines which provides that the Board has the authority to seek reimbursement of performance-based or incentive compensation paid, vested, or awarded to the extent that payout was greater than the amount that would have been paid if calculated based on restated financial results. Mr. Jones’s employment agreement with the Company dated August 21, 2017 (the “Jones Agreement”),The Employment Agreement, the Executive Performance Plan, equity award agreements under the 2018 Plan, and the H&R Block Executive Severance Plan (“Executive Severance Plan”) each include a clawback provision consistent with the terms of the Board’s clawback policy. In addition, | Compensation Discussion and Analysis | Other Executive Compensation Practices and Policies | H&R Block 2021 Proxy Statement 40
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beginning in fiscal year 2020, award agreements provide that all unvested awards that would otherwise be subject to pro-rata or full vesting in the event of a termination will be forfeited by the executive if the Compensation Committee determines that the executive engaged in activities that would have been grounds for an involuntary termination for cause. Our award agreements contain restrictive covenants, including non-competition and non-solicitation provisions, which, if violated, authorize the Company to cancel or rescind the award or seek reimbursement of value received by the individual, consistent with applicable law. In addition, the Executive Severance Plan provides that the Board may recover or require reimbursement of all severance, equity compensation awards (including profits from the sale of Company stock acquired pursuant to such awards), and other payments made to a participant under the Executive Severance Plan if the participant violates the provisions of any confidentiality, non-competition, non-solicitation, or similar agreement or policy. Stock Ownership Guidelines We believe that our executives should have a significant financial stake in the Company, and the Company has adopted stock ownership guidelines that define ownership expectations for certain executives covered under the guidelines. Covered executives are expected to attain and retain a level of qualifying shares equal to a multiple of their annual base salaries. In determining whether a covered executive has met the applicable ownership requirement, we include shares owned by such executive directly or indirectly, the after-tax value of vested stock option awards, and share equivalents the executive holds in the Company’s benefit plans, and 50% of any unvested RSUs awarded under the Company’s long-term incentive plans (collectively, “Covered Shares”). Unvested equityperformance awards are not included for purposes of determining compliance with the executive’s ownership requirement. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 34 |
TABLE OF CONTENTS Our stock ownership guidelines provide that, until a covered executive satisfies the applicable holding requirement, the executive is required to retain a specified percentage of any Covered Shares owned as of the date on which the executive becomes subject to the guidelines or acquired thereafter. The covered executives, required ownership levels, and retention percentages under our stock ownership guidelines are as follows: | CEO | | | 6x Base Salary | | | 100% | | | Senior ExecutiveLeadership Team as designated by the CEO(1) | | | 3x Base Salary | | | 50% | | | Senior Vice Presidents | | | 2x Base Salary | | | 50% | | | Vice Presidents | | | 1x Base Salary | | | N/A(1) | |
(1)
| Includes Messrs. Bowen and Gerke and Ms. Orosco.Vice Presidents do not have a specified required retention percentage but are expected to retain shares to achieve their ownership requirement on the required timeline. |
Before a covered executive satisfies the applicable ownership requirement, the executive is subject to the retention requirements described above. AfterOnce the covered executive satisfies the applicable ownership requirement, the executive is no longer subject to the retention requirements, so long as such executive’s ownership of Covered Shares continues to exceed the applicable ownership requirement. Mr. Gerke has met his 3x Base Salary ownership requirement. His ownership calculated pursuant to the guidelines includes the value attributed to unexercised options. However, unexercised options represent only 3% of Mr. Gerke’s shares with the remainder of his ownership stake in wholly owned shares, and he would continue to meet his ownership requirement if the unexercised options were excluded. The other covered executives are progressing toward attaining their applicable ownership requirements. Mr. Bowen and Mses. Orosco and Logerwell have no unexercised stock options. Mr. Jones has unexercised options, but they currently have no after-tax value so are not currently included in his stock ownership calculations.
The Compensation Committee annually reviews each covered executive’s progress toward meeting the stock ownership guidelines. Each covered executive has five years from the first annual ownership assessment after becoming subject to the guidelines to achieve the respective ownership requirement. All covered executives have either attained or are progressing toward attaining their applicable ownership requirements. Prohibition on Derivatives Trading and Hedging and Pledging of Our Securities Our Insider Trading Policy prohibits all directors and employees, including the NEOs, from trading in any puts, calls, covered calls, or other derivative products involving any Company securities. Additionally, our policy prohibits these individuals from engaging in any hedging transactions with respect to any Company securities, which includes the purchase of certain instruments (including “cashless collars,” forward sales contracts, equity swaps or any other similar instruments) designed to hedge, monetize, or offset any decrease in the market value of such securities. The policy also prohibits our employees and directors from pledging, or using as collateral, Company securities in order to secure personal loans or obligations, which includes a prohibition against holding shares of Company stock in a margin account. As amended by the Tax Cuts and Jobs Act of 2017, for tax years beginning after December 31, 2017, Section 162(m) of the Internal Revenue Code denies us from taking a federal income tax deduction for annual individual compensation over $1 million paid to our CEO, Chief Financial Officer, and certain other current and former executive officers. Notwithstanding
| Compensation Discussion and Analysis | Other Executive Compensation Practices and Policies | H&R Block 2021 Proxy Statement 41
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the elimination of the performance-based compensation exception under Section 162(m), the Compensation Committee believes that the primary objective of our compensation programs is to recruit, retain, and motivate highly talented executives and that a significant portion of our NEOs’ compensation should continue to be tied to the Company’s performance. Therefore, the changes to Section 162(m) have not significantly impacted the design of our compensation program to date.
TERMINATION OF EMPLOYMENT, SEVERANCE, AND TRANSITION ARRANGEMENTS Termination of Employment Provisions in LTI Award Agreements The award agreements for equity awards granted pursuant to the 2018 Plan provide for vesting of certain awards outstanding for more than a year in the event of a termination of employment under certain circumstances. An executive’s termination of employment prior to a vesting date will have the following impacts on unvested awards: | Voluntary Termination that is not a Retirement | | | Forfeit | | | Forfeit | | | Forfeit | | | Termination for Cause | | | Forfeit | | | Forfeit | | | Forfeit | | | Retirement(1) | | | Pro-Rata Vesting(2) | | | Pro-Rata Vesting(3) | | | Pro-Rata Vesting(3)(2)
| | | Pro-Rata Vesting | | | Death or Disability(1) | | | Full Vesting(3)(2) | | | Full Vesting(3)(2) | | | Full Vesting | | | Involuntary Termination without Cause(1) | | | Pro-Rata Vesting(3)(2) | | | Pro-Rata Vesting(3)(2) | | | Forfeit | |
(1)
| Event must occur more than one year following the grant date for pro-rata or full vesting; event within one year of the grant date results in forfeiture. |
(2)
| Mr. Gerke’s equity-based compensation awards provide that, upon his voluntary retirement at least one year after the grant date the entire equity awards will continue to vest on the stated vesting dates set forth in the applicable award agreement and with performance adjustments (if any) made under such agreement as if he remained employed through such stated vesting dates. |
(3)
| For performance-based awards, final vesting is determined based on attainment of applicable performance goals. |
Beginning in fiscal year 2023, PSU awards also provide for pro-rata vesting in the event of a Good Reason Termination (as defined in the Executive Severance Plan) more than one year after the grant date. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 35 |
TABLE OF CONTENTS In addition, all award agreements provide that all unvested awards that would otherwise be subject to pro-rata or full vesting under the termination scenarios described above will be forfeited by the executive if the Compensation Committee determines that the executive engaged in activities that would have been grounds for an involuntary termination for cause while employed by the Company. In the event of a change in control, the Compensation Committee may use its discretion to waive the performance goals that apply to performance-based awards. If it does, the units generally will vest based on the executive’s continued employment through the third anniversary of the grant date and the executive will be entitled to receive all or a pro-rata portion of the award in the event of a termination under certain circumstances in connection with or following the change in control. For RSUs, the executive will be entitled to receive full vesting in the event of a termination under certain circumstances (as set forth in the award agreement governing the grant) in connection with a change in control. Severance Arrangements The Executive Severance Plan is intended to support a variety of objectives, including (i) standardization of severance policy among the senior officers, which ensures internal parity, simplifies internal administration, and mitigates negotiation at hire and termination, and (ii) the recruiting and retention of highly skilled executives by protecting them from the short-term economic consequences associated with unexpected termination of employment in the absence of cause. Based on advice from the Compensation Committee’s independent compensation consultant, we believe the benefits our NEOs would receive under various severance scenarios are modest relative toaligned with the market butand sufficient to support the above objectives. Messrs.Mr. Bowen and Gerke and Mses. OroscoRedler and Logerwell are participants in the Executive Severance Plan. Ms. Orosco participated in the Executive Severance Plan prior to her departure from the Company and received payments under the Executive Severance Plan pursuant to her Severance and Release Agreement (the “Severance Agreement”), which is described in more detail beginning on page 44. Under the terms of the JonesEmployment Agreement, Mr. Jones would only participate in the Executive Severance Plan if and to the extent that the benefits related to equity awards thereunder exceeded those contained in the JonesEmployment Agreement. Change in Control Provisions Change in control provisions for our NEOs are set forth in the Executive Severance Plan and the LTI award agreements. The Company provides these “change in control” benefits as a means to recruit and retain talented executives, who could have other job alternatives that may appear more attractive absent these benefits. In addition, by providing financial protection in the event that a transaction results in the loss of employment, the change in control program helps to ensure the independence and objectivity of our executives when reviewing potential transactions and that executives will remain | Compensation Discussion and Analysis | Termination of Employment, Severance, and Transition Arrangements | H&R Block 2021 Proxy Statement 42
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focused during periods of uncertainty. All change in control payments under the Executive Severance Plan require both a change in control and the subsequent loss of employment by the NEO (a “double-trigger”). Change in control provisions for Mr. Jones are set forth in the JonesEmployment Agreement and change in control payments under the JonesEmployment Agreement include a double-trigger, as described above. In addition, the equity award agreements contain provisions accelerating the vesting of equity awards upon certain changes in control and include a double-trigger, as described above. The Company uses this double-trigger equity acceleration policy to protect against the loss of retention power following a change in control and to avoid windfalls, both of which could occur if vesting accelerated automatically as a result of a transaction. The Company has historically avoided the use of excise tax gross-up provisions relating to a change in control and associated “parachute payments” and has no such gross-up obligations in place with respect to any executive officers, including Mr. Jones. Consistent with the Company’s historical practice, in the future we intend to refrain from providing excise tax gross-up provisions relating to a change in control. These change in control arrangements are not provided exclusively to the NEOs. A larger group of management employees is eligible to receive many of the change in control benefits described in this section. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 36 |
TABLE OF CONTENTS COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis. Based on its review and discussion with management, the Committee approved the Compensation Discussion and Analysis and recommended to the Board of Directors that it be included in the Company’s 20212023 Proxy Statement and the Company’s Annual Report on Form 10-K. COMPENSATION COMMITTEE
Matthew E. Winter, Chair
Sean H. Cohan
Anuradha (Anu) Gupta
Richard A. Johnson
Yolande G. Piazza
Bruce C. Rohde
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The following non-employee directors, each of whom is independent, served on the Compensation Committee of the Board of Directors during the fiscal year ended AprilJune 30, 2021:2023: Matthew E. Winter (Chair), Sean H. Cohan, (beginning April 1, 2021), Anuradha (Anu) Gupta, Richard A. Johnson, David Baker Lewis (until March 31, 2021),and Yolande G. Piazza (beginning September 10, 2020), and Bruce C. Rohde.Piazza. No director serving on the Compensation Committee during fiscal year 20212023 (i) was or was formerly an officer or employee of the Company or any of its subsidiaries or (ii) had any relationships requiring disclosure in this proxy statement. None of our executive officers has served as a director or member of the Compensation Committee (or other committee serving an equivalent function) of any other entity whose executive officers served as a director or member of the Compensation Committee. | Compensation Committee Interlocks and Insider Participation | H&R Block 2021 Proxy Statement 43
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RISK ASSESSMENT IN COMPENSATION PROGRAMS With the assistance of its independent compensation consultant, the Compensation Committee has assessed its broad-based and executive compensation programs to determine if the programs’ provisions and operations create undesired or unintentional risk of a material nature. The Committee identified and assessed the risk profile of each performance-based compensation plan. As a part of this assessment, the Committee considered several features we have adopted to mitigate potential risks related to our compensation practices, including: ▪ | Utilizing caps on potential payments of cash and equity compensation; |
▪ | Our LTI vehicles are based on a balanced combination of corporate financial results and absolute and relative stock price performance, which, along with the payout caps and the holding requirement related to PSUs, limit the incentive to take excessive risks that may have a significant impact on the company;Company; |
▪ | Our strong corporate governance policies, including prohibitions on hedging and pledging of Company stock, clawback polices, stock ownership guidelines, and a stand-alone post-vesting holding period of one year for 50% of gross PSUs earned; and |
▪ | The overall design of our compensation programs, including our focus on at-risk compensation that is directly tied to the Company’s performance and utilization of a balanced mix of performance measures which avoid placing excessive weight on a single performance measure. |
As a result of our analysis, the Compensation Committee believes, and its independent compensation consultant concurs, that our compensation policies and practices do not create inappropriate or unintended material risks to the Company as a whole, and that, consequently, our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. | Risk Assessment in Compensation Programs | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 44
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TABLE OF CONTENTS SUMMARY COMPENSATION TABLE The following table sets forth for the fiscal year ended April 30, 2021 the compensation paid to or earned by the Company’s named executive officers.officers for the fiscal year ended June 30, 2023. | Name and
Principal Position | | Fiscal
Year | | Salary
($)(1) | | Bonus
($) | | Stock
Awards
($)(2) | | Option
Awards
($) | | Non-Equity
Incentive Plan
Compensation
($)(3) | | All Other
Compensation
($)(4) | | Total
($) | | Name and
Principal Position | | Fiscal
Year(1) | | Salary
($)(2) | | Bonus
($) | | Stock
Awards
($)(3) | | Option
Awards
($) | | Non-Equity
Incentive Plan
Compensation
($)(4) | | All Other
Compensation
($)(5) | | Total
($) | | | Jeffrey J. Jones II,
President and CEO | | | 2021 | | 997,734 | | — | | 5,500,021 | | — | | 2,304,669 | | 106,112 | | 8,908,536 | | Jeffrey J. Jones II,
President and CEO | | | 2023 | | 997,734 | | — | | 6,200,037 | | — | | 1,438,186 | | 178,400 | | 8,814,357 | | | 2020 | | 1,000,467 | | — | | 5,500,063 | | — | | 401,731 | | 18,938 | | 6,921,199 | | | 2022 | | 997,734 | | — | | 6,416,674 | | — | | 3,483,863 | | 141,912 | | 11,040,183 | | | 2019 | | 997,734 | | — | | 5,500,027 | | — | | 1,317,131 | | 689,128 | | 8,504,020 | | | TP | | 166,745 | | — | | — | | — | | — | | 24,473 | | 191,218 | | | Tony G. Bowen,
Chief Financial Officer | | | 2021 | | 601,649 | | — | | 1,300,036 | | — | | 1,000,620 | | 16,896 | | 2,919,201 | | | 2021 | | 997,734 | | — | | 5,500,021 | | — | | 2,304,669 | | 106,112 | | 8,908,536 | | | 2020 | | 595,192 | | — | | 1,300,068 | | — | | 174,420 | | 20,748 | | 2,090,428 | | Tony G. Bowen,
Chief Financial Officer | | | 2023 | | 641,073 | | — | | 1,700,036 | | — | | 557,380 | | 18,303 | | 2,916,792 | | | 2019 | | 539,973 | | — | | 1,000,051 | | — | | 465,960 | | 14,489 | | 2,020,473 | | | 2022 | | 618,561 | | — | | 1,866,715 | | — | | 1,298,308 | | 18,333 | | 3,801,917 | | | Thomas A. Gerke, General Counsel and Chief Administrative Officer | | | 2021 | | 601,649 | | — | | 1,100,018 | | — | | 889,440 | | 14,467 | | 2,605,574 | | | TP | | 100,549 | | — | | — | | — | | — | | 4,504 | | 105,053 | | | 2020 | | 603,297 | | — | | 1,100,038 | | — | | 155,040 | | 19,311 | | 1,877,686 | | | 2021 | | 601,649 | | — | | 1,300,036 | | — | | 1,000,620 | | 16,896 | | 2,919,201 | | | 2019 | | 601,648 | | — | | 1,100,043 | | — | | 508,320 | | 14,689 | | 2,224,700 | | Karen A. Orosco,
Former President, Global Consumer Tax and Service Delivery(6) | | | 2023 | | 622,418 | | — | | 1,700,036 | | — | | 541,163 | | 1,828,340 | | 4,691,957 | | | Karen A. Orosco,
Senior Vice President, U.S. Retail | | | 2021 | | 551,511 | | — | | 1,100,018 | | — | | 917,235 | | 16,416 | | 2,585,180 | | | 2022 | | 601,649 | | — | | 1,516,688 | | — | | 1,260,493 | | 18,231 | | 3,397,061 | | | 2020 | | 540,865 | | — | | 1,100,038 | | — | | 159,885 | | 20,344 | | 1,821,132 | | | TP | | 100,357 | | — | | — | | — | | — | | 4,918 | | 105,275 | | | 2019 | | 461,470 | | — | | 900,035 | | — | | 402,420 | | 14,304 | | 1,778,229 | | | 2021 | | 551,511 | | — | | 1,100,018 | | — | | 917,235 | | 16,416 | | 2,585,180 | | | Kellie J. Logerwell,
Vice President and Chief Accounting Officer | | | 2021 | | 260,714 | | — | | 250,022 | | — | | 240,890 | | 15,856 | | 767,482 | | Dara S. Redler,
Chief Legal Officer | | | 2023 | | 518,681 | | — | | 950,005 | | — | | 450,969 | | 25,771 | | 1,945,426 | | | 2020 | | 259,808 | | — | | 250,069 | | — | | 41,990 | | 16,136 | | 568,003 | | | 2022 | | 229,396 | | 225,000 | | 475,020 | | — | | 406,849 | | 7,912 | | 1,344,177 | | | 2019 | | 249,038 | | — | | 250,044 | | — | | 132,375 | | 12,531 | | 643,988 | | | TP | | — | | — | | — | | — | | — | | — | | — | | | | Kellie J. Logerwell,
Vice President and Chief Accounting Officer | | | 2023 | | 280,088 | | — | | 270,020 | | — | | 135,291 | | 16,822 | | 702,221 | | | | 2022 | | 270,110 | | — | | 303,369 | | — | | 315,123 | | 17,678 | | 906,280 | | | | TP | | 43,571 | | — | | — | | — | | — | | 2,211 | | 45,782 | | | | 2021 | | 260,714 | | — | | 250,022 | | — | | 240,890 | | 15,856 | | 767,482 | |
(1)
| “TP” represents the Transition Period for the two months ended June 30, 2021, which resulted from the Company changing its fiscal year end from April 30 to June 30 in 2021. |
(2)
| The amounts shown represent base salary amounts accrued by the Company related to the applicable fiscal year,period, rather than amounts actually paid to the executives. In addition, any base salary changes take effect following Compensation Committee approval, which generally occurs after the start of the fiscal year. Therefore, these numbers vary somewhat from the annual base salaries disclosed in the Compensation Discussion and Analysis. Each of the NEOs contributed a portion of his or her fiscal year 20212023 salary to the Company’s 401(k) savings plan, the H&R Block Retirement Savings Plan (“RSP”). |
(2) (3)
| This column represents the grant date fair value under ASC 718 for performance share units market stock units, and restricted share units granted during fiscal year 2021,2023, as well as equity awards in prior fiscal years (as applicable). Grants were made pursuant to the 2018 Plan. The grant date fair value of these awards is computed in accordance with ASC 718 utilizing assumptions discussed in Note 8 “Stock-Based Compensation” to the Company’s consolidated financial statements in the Form 10-K for the year ended AprilJune 30, 2021,2023, as filed with the SEC. These amounts reflect an accounting expense and do not correspond to the actual value that may be realized by the NEOs. |
(3) (4)
| This column represents amounts awarded and earned under the Company’s STI compensation program, as discussed beginning on page 2924. |
(4) (5)
| In valuing personal benefits, we use the incremental cost to the Company of the benefit. ForThe following table sets forth all other compensation for fiscal year 2021, these figures include the following:2023: |
| Mr. Jones | | | 14,500 | | | 1,688 | | | 79,924 | | | 10,000 | | | — | | | 106,112 | | | Mr. Bowen | | | 14,250 | | | 2,430 | | | — | | | — | | | 216 | | | 16,896 | | | Mr. Gerke | | | 14,250 | | | — | | | — | | | — | | | 217 | | | 14,467 | | | Ms. Orosco | | | 14,250 | | | 1,949 | | | — | | | — | | | 217 | | | 16,416 | | | Ms. Logerwell | | | 14,250 | | | 1,316 | | | — | | | — | | | 290 | | | 15,856 | |
| Mr. Jones | | | 16,500 | | | 1,553 | | | 155,347 | | | 5,000 | | | — | | | 178,400 | | | Mr. Bowen | | | 16,068 | | | 2,236 | | | — | | | — | | | — | | | 18,303 | | | Ms. Orosco | | | 15,850 | | | 1,793 | | | — | | | — | | | 1,810,697 | | | 1,828,340 | | | Ms. Redler | | | 23,442 | | | 2,329 | | | — | | | — | | | — | | | 25,771 | | | Ms. Logerwell | | | 15,520 | | | 1,302 | | | — | | | — | | | — | | | 16,822 | |
(a)
| Represents the economic value of the death benefit provided by the Company’s group life insurance program. The imputed income reported represents the portion of the premium paid by the Company that is attributable to term life insurance coverage for the executive officer; the program provides only an insurance benefit with no cash compensation element to the executive officer. |
(b)
| Represents the incremental cost to the Company related to Mr. Jones’s personal use of the Company’s fractional share of a private aircraft (incremental cost includes variable costs incurred as a result of personal flight activity, such as hourly charges for each flight, fuel charges, and miscellaneous fees; it excludes non-variable costs, such as the Company’s monthly management fee and insurance fees). Mr. Jones’s family members or guests accompanied him on certain flights at no incremental cost to the Company. |
(c)
| Represents the H&R Block Foundation matching amount on behalf of Mr. Jones with respect to his individual contributions to 501(c)(3) organizations. See “Director Compensation” above. The amount includes matching contributions that occurred in the 2020 calendar year and in the 2021 calendar year (all of which were paid within fiscal year 2021); therefore, the amount reported exceeds $5,000. |
(d)
| Represents de minimis holiday giftsseverance benefits under the Executive Severance Plan, including a severance payment in the amount of $1,778,400, a COBRA subsidy in the amount of $17,297, and $15,000 for reasonable outplacement services in connection with Ms. Orosco’s departure from the Company. Additional information regarding Ms. Orosco’s Severance Agreement can be found on page 44. |
(6)
| Ms. Orosco ceased serving as President, Global Consumer Tax and Service Delivery of the Company effective May 11, 2023 and departed the Company on July 1, 2023. Pursuant to the terms of her award agreements and Severance Agreement, Ms. Orosco forfeited all of her fiscal year 2023 equity awards upon her termination of employment. |
| Executive Compensation | Summary Compensation Table | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 45
| 38 |
TABLE OF CONTENTS GRANTS OF PLAN-BASED AWARDS TABLE The following table provides information about non-equity incentive plan awards, equity incentive plan awards, and stock awards granted to our NEOs during the fiscal year ended AprilJune 30, 2021.2023. | | | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards | | Estimated Future Payouts
Under Equity Incentive Plan
Awards | | | | | | | | | | | | | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards | | | Estimated Future Payouts
Under Equity Incentive Plan
Awards | | | | | | | | | | | | Name of Executive | | Grant
Date | | Approval
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options (#) | | Exercise
or Base
Price of
Option
Awards ($/Sh) | | Grant Date
Fair Value of
Stock and
Option
Awards($)(1) | | Name of Executive | | Grant
Date | | Approval
Date | | | Threshold
($) | | Target
($) | | Maximum
($) | | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | Grant Date
Fair Value of
Stock and
Option
Awards
($)(1) | | | Jones | | | | | | | | | | | | | | | | | | | | | | | | | | Jones | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - STI Award(2) | | — | | — | | 621,875 | | 1,243,750 | | 2,487,500 | | — | | — | | — | | — | | — | | — | | — | | - STI Award(2) | | — | | — | | | 746,250 | | 1,492,500 | | 2,985,000 | | | — | | — | | — | | | — | | — | | — | | — | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 98,215 | | 196,430 | | 77,031 | | — | | — | | 2,750,015 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | — | | — | | | 48,223 | | — | | — | | 2,170,035 | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 189,264 | | 378,528 | | — | | — | | — | | 2,750,006 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | 82,956 | | 165,912 | | | — | | — | | — | | 4,030,002 | | | Bowen | | | | | | | | | | | | | | | | | | | | | | | | | | Bowen | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - STI Award(2) | | — | | — | | 270,000 | | 540,000 | | 1,080,000 | | — | | — | | — | | — | | — | | — | | — | | - STI Award(2) | | — | | — | | | 289,215 | | 578,430 | | 1,156,860 | | | — | | — | | — | | | — | | — | | — | | — | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 23,215 | | 46,430 | | 18,208 | | — | | — | | 650,022 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | — | | — | | | 13,223 | | — | | — | | 595,035 | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 44,736 | | 89,472 | | — | | — | | — | | 650,014 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | 22,746 | | 45,492 | | | — | | — | | — | | 1,105,001 | | | Gerke | | | | | | | | | | | | | | | | | | | | | | | | | | Orosco(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - STI Award(2) | | — | | — | | 240,000 | | 480,000 | | 960,000 | | — | | — | | — | | — | | — | | — | | — | | - STI Award(2) | | — | | — | | | 280,800 | | 561,600 | | 1,123,200 | | | — | | — | | — | | | — | | — | | — | | — | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 19,643 | | 39,286 | | 15,407 | | — | | — | | 550,014 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | — | | — | | | 13,223 | | — | | — | | 595,035 | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 37,853 | | 75,706 | | — | | — | | — | | 550,004 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | 22,746 | | 45,492 | | | — | | — | | — | | 1,105,001 | | | Orosco | | | | | | | | | | | | | | | | | | | | | | | | | | Redler | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - STI Award(2) | | — | | — | | 247,500 | | 495,000 | | 990,000 | | — | | — | | — | | — | | — | | — | | — | | - STI Award(2) | | — | | — | | | 234,000 | | 468,000 | | 936,000 | | | — | | — | | — | | | — | | — | | — | | — | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 19,643 | | 39,286 | | 15,407 | | — | | — | | 550,014 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | — | | — | | | 7,389 | | — | | — | | 332,505 | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 37,853 | | 75,706 | | — | | — | | — | | 550,004 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | 12,711 | | 25,422 | | | — | | — | | — | | 617,500 | | | Logerwell | | | | | | | | | | | | | | | | | | | | | | | | | | Logerwell | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - STI Award(2) | | — | | — | | 65,000 | | 130,000 | | 260,000 | | — | | — | | — | | — | | — | | — | | — | | - STI Award(2) | | — | | — | | | 70,200 | | 140,400 | | 280,800 | | | — | | — | | — | | | — | | — | | — | | — | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 4,465 | | 8,930 | | 3,502 | | — | | — | | 125,021 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | | | | | | 2,100 | | — | | — | | 94,500 | | | - LTI Award(1) | | 6/30/20 | | 6/23/20 | | — | | — | | — | | — | | 8,603 | | 17,206 | | — | | — | | — | | 125,002 | | - LTI Award(1) | | 8/31/22 | | 8/11/22 | | | — | | — | | — | | | — | | 3,613 | | 7,226 | | | — | | — | | — | | 175,520 | |
(1)
| Amounts represent awards made under the Company’s LTI compensation program and granted pursuant to the 2018 Plan. Dollar values represent the accounting grant date fair value of performance share units, market stock units and restricted share units under ASC 718. The grant date fair value of these awards is computed in accordance with ASC 718 utilizing assumptions discussed in Note 8 “Stock-Based Compensation” to the Company’s consolidated financial statements in the Form 10-K for the year ended AprilJune 30, 2021,2023, as filed with the SEC. The dollar values reflect an accounting expense and do not correspond to the actual value that may be realized by the NEOs. |
(2)
| Amounts represent the potential value of the payouts under the Company’s STI compensation program. Actual fiscal year 20212023 STI payout amounts are included in the Summary Compensation Table. |
(3)
| Ms. Orosco forfeited all of her fiscal year 2023 LTI awards included in this table in connection with her departure from the Company. |
| Executive Compensation | Grants of Plan-Based Awards Table | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 46
| 39 |
TABLE OF CONTENTS OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE The following table summarizes the equity awards made to our NEOs outstanding as of AprilJune 30, 2021.2023. | | | | | | | Option Awards | | Stock Awards | | | | | | | | Option Awards | | Stock Awards | | | Name of Executive | | Grant
Date | | Vesting
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) | | Option
Exercise
Price ($) | | Option
Expiration
Date | | Number of
Shares or Units
of Stock That
Have Not
Vested (#) | | Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)(1) | | Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested (#)(2) | | Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested ($)(1) | | Name of
Executive | | | Grant
Date | | | Vesting
Date | | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | | Number of
Shares or Units
of Stock That
Have Not
Vested
(#) | | Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)(1) | | Equity
Incentive Plan
Awards:
Number of
Unearned Shares,
Units or Other
Rights That
Have Not
Vested
(#)(2) | | Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have
Not Vested
($)(1) | | | Jones | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | — | | — | | 209,396 | | 4,661,176 | | Jones | | | 8/31/21 | | | 8/31/24 | | | — | | — | | — | | — | | — | | | — | | — | | 163,746 | | 5,218,587 | | | | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | 18,419 | | 410,005 | | — | | — | | | | | 8/31/21 | | | 8/31/24(3) | | | — | | — | | — | | — | | — | | | 62,036 | | 1,977,080 | | — | | — | | | | | | 6/30/19 | | 6/30/22 | | — | | — | | — | | — | | — | | — | | — | | 152,647 | | 3,397,924 | | | | | 8/31/22 | | | 8/31/25 | | | — | | — | | — | | — | | — | | | — | | — | | 84,744 | | 2,700,793 | | | | | | 6/30/19 | | 6/30/22(3) | | — | | — | | — | | — | | — | | 28,959 | | 644,627 | | — | | — | | | | | 8/31/22 | | | 8/31/25(4) | | | — | | — | | — | | — | | — | | | 49,262 | | 1,569,993 | | — | | — | | | | | | 6/30/20 | | 6/30/23 | | — | | — | | — | | — | | — | | — | | — | | 300,188 | | 6,682,164 | | | | | 8/21/17 | | | — | | | 273,905 | | — | | — | | $29.73 | | 8/21/27 | | | — | | — | | — | | — | | | | | | 6/30/20 | | 6/30/23(4) | | — | | — | | — | | — | | — | | 80,436 | | 1,790,509 | | — | | — | | Bowen | | | 8/31/21 | | | 8/31/24 | | | — | | — | | — | | — | | — | | | — | | — | | 47,636 | | 1,518,164 | | | | | 8/21/17 | | — | | 273,905 | | — | | — | | $29.73 | | 8/21/27 | | — | | — | | — | | — | | | | | 8/31/21 | | | 8/31/24(3) | | | — | | — | | — | | — | | — | | | 18,048 | | 575,199 | | — | | — | | | Bowen | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | — | | — | | 38,074 | | 847,526 | | | | | 8/31/22 | | | 8/31/25 | | | — | | — | | — | | — | | — | | | — | | — | | 23,236 | | 740,540 | | | | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | 3,350 | | 74,576 | | — | | — | | | | | 8/31/22 | | | 8/31/25(4) | | | — | | — | | — | | — | | — | | | 13,508 | | 430,500 | | — | | — | | | | | | 6/30/19 | | 6/30/22 | | — | | — | | — | | — | | — | | — | | — | | 36,082 | | 803,182 | | Orosco(6) | | | 8/31/21 | | | 8/31/24 | | | — | | — | | — | | — | | — | | | — | | — | | 38,704 | | 1,233,485 | | | | | | 6/30/19 | | 6/30/22(3) | | — | | — | | — | | — | | — | | 7,010 | | 156,046 | | — | | — | | | | | 8/31/21 | | | 8/31/24(3) | | | — | | — | | — | | — | | — | | | 14,664 | | 467,349 | | — | | — | | | | | | 6/30/20 | | 6/30/23 | | — | | — | | — | | — | | — | | — | | — | | 70,955 | | 1,579,453 | | | | | 8/31/22 | | | 8/31/25 | | | — | | — | | — | | — | | — | | | — | | — | | 23,236 | | 740,540 | | | | | 6/30/20 | | 6/30/23(4) | | — | | — | | — | | — | | — | | 19,013 | | 423,227 | | — | | — | | | | | 8/31/22 | | | 8/31/25(4) | | | — | | — | | — | | — | | — | | | 13,508 | | 430,500 | | — | | — | | | Gerke | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | — | | — | | 41,880 | | 932,265 | | Redler | | | 2/1/22 | | | 2/1/25(5) | | | — | | — | | — | | — | | — | | | 14,198 | | 452,500 | | — | | — | | | | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | 3,686 | | 82,045 | | — | | — | | | | | 8/31/22 | | | 8/31/25 | | | — | | — | | — | | — | | — | | | — | | — | | 12,985 | | 413,831 | | | | | | 6/30/19 | | 6/30/22 | | — | | — | | — | | — | | — | | — | | — | | 30,530 | | 679,596 | | | | | 8/31/22 | | | 8/31/25(4) | | | — | | — | | — | | — | | — | | | 7,548 | | 240,563 | | — | | — | | | | | | 6/30/19 | | 6/30/22(3) | | — | | — | | — | | — | | — | | 6,053 | | 134,735 | | — | | — | | Logerwell | | | 8/31/21 | | | 8/31/24 | | | — | | — | | — | | — | | — | | | — | | — | | 7,741 | | 246,711 | | | | | | 6/30/20 | | 6/30/23 | | — | | — | | — | | — | | — | | — | | — | | 60,038 | | 1,336,437 | | | | | 8/31/21 | | | 8/31/24(3) | | | — | | — | | — | | — | | — | | | 2,935 | | 93,536 | | — | | — | | | | | | 6/30/20 | | 6/30/23(4) | | — | | — | | — | | — | | — | | 16,088 | | 358,120 | | — | | — | | | | | 8/31/22 | | | 8/31/25 | | | — | | — | | — | | — | | — | | | — | | — | | 3,691 | | 117,628 | | | | | 2/1/12 | | — | | 104,734 | | — | | — | | $17.00 | | 2/1/22 | | — | | — | | — | | — | | | | | 8/31/22 | | | 8/31/25(4) | | | — | | — | | — | | — | | — | | | 2,145 | | 68,370 | | — | | — | | | Orosco | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | — | | — | | 34,266 | | 762,760 | | | | | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | 3,016 | | 67,131 | | — | | — | | | | | | | 6/30/19 | | 6/30/22 | | — | | — | | — | | — | | — | | — | | — | | 30,530 | | 679,595 | | | | | | | 6/30/19 | | 6/30/22(3) | | — | | — | | — | | — | | — | | 5,941 | | 132,246 | | — | | — | | | | | | | 6/30/20 | | 6/30/23 | | — | | — | | — | | — | | — | | — | | — | | 60,038 | | 1,336,437 | | | | | | 6/30/20 | | 6/30/23(4) | | — | | — | | — | | — | | — | | 16,088 | | 358,120 | | — | | — | | | | Logerwell | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | — | | — | | 9,520 | | 211,913 | | | | | | | 6/30/18 | | 6/30/21 | | — | | — | | — | | — | | — | | 839 | | 18,675 | | — | | — | | | | | | | 6/30/19 | | 6/30/22 | | — | | — | | — | | — | | — | | — | | — | | 6,940 | | 154,490 | | | | | | | 6/30/19 | | 6/30/22(3) | | — | | — | | — | | — | | — | | 1,395 | | 31,055 | | — | | — | | | | | | | 6/30/20 | | 6/30/23 | | — | | — | | — | | — | | — | | — | | — | | 13,646 | | 303,753 | | | | | | 6/30/20 | | 6/30/23(4) | | — | | — | | — | | — | | — | | 3,657 | | 81,401 | | — | | — | | |
(1)
| Market value was determined using the closing price of the Company’s common stock of $22.26,$31.87, which was the closing price as reported on the NYSE on AprilJune 30, 2021.2023. |
(2)
| Includes PSUs and MSUs.Represents PSUs. Actual shares delivered under these awards are subject to performance conditions and therefore may vary from the target units reported here. |
(3)
| These RSUs vest in two equal increments on 6/30/218/31/23 and 6/30/22.8/31/24. |
(4)
| These RSUs vest in one-third increments on 6/30/21, 6/30/22,8/31/23, 8/31/24, and 6/30/23.8/31/25. |
(5)
| These RSUs vest in two equal increments on 2/1/24 and 2/1/25. |
(6)
| Pursuant to the terms of her award agreements and Severance Agreement, Ms. Orosco forfeited all of her fiscal year 2023 equity awards and all of her outstanding unvested RSUs upon her termination of employment on July 1, 2023. In addition, upon her departure on July 1, 2023, her fiscal year 2022 PSUs vested on a pro-rata basis based on her number of whole months of service divided by 36, as provided by the terms of the applicable award agreement. |
| Executive Compensation | Outstanding Equity Awards at Fiscal Year-End Table | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 47
| 40 |
TABLE OF CONTENTS OPTION EXERCISES AND STOCK VESTED TABLE The following table summarizes the value realized by the NEOs upon option award exercises and stock award vesting during the fiscal year ended AprilJune 30, 2021.2023. | | | Option Awards | | Stock Awards | | | | Option Awards | | Stock Awards | | | Name of Executive | | Number of Shares
Acquired on Exercise (#) | | Value Realized on
Exercise ($) | | Number of Shares
Acquired on Vesting
(#)(1) | | Value Realized on Vesting
($) | | Name of Executive | | Number of Shares
Acquired on Exercise
(#) | | Value Realized
on Exercise
($) | | Number of Shares
Acquired on Vesting
(#)(1) | | Value Realized
on Vesting
($) | | | Jones | | — | | — | | 57,457 | | 903,377 | | Jones | | — | | — | | 639,147 | | 20,768,060 | | | Bowen | | — | | — | | 12,681 | | 200,218 | | Bowen | | — | | — | | 152,731 | | 4,983,451 | | | Gerke | | — | | — | | 22,087 | | 353,240 | | Orosco | | — | | — | | 128,935 | | 4,203,338 | | | Orosco | | — | | — | | 10,602 | | 167,210 | | Redler | | — | | — | | 7,041 | | 277,838 | | | Logerwell | | — | | — | | 3,015 | | 47,728 | | Logerwell | | — | | — | | 29,112 | | 946,617 | |
(1)
| Amounts in this column reflect restricted share units that vested during the fiscal year ended AprilJune 30, 20212023 (including dividend equivalents accumulated as the date of vesting) and fiscal year 20182021 PSUs and MSUs that vested as of June 30, 20202023 and were distributed in July 20202023 (including dividend equivalents accumulated as of the date of vesting). These amounts do not include shares acquired pursuant to the vesting of the fiscal year 2019 PSUs and MSUs on June 30, 2021, which were distributed in July 2021 following Compensation Committee certification of the performance and approval of the payouts. |
NONQUALIFIED DEFERRED COMPENSATION The Company provides the H&R Block, Inc. Deferred Compensation Plan for Executives, a nonqualified plan (the “DC Plan”), to employees who meet certain eligibility requirements. The DC Plan is intended to pay, out of the general assets of the Company, an amount substantially equal to the deferrals and Company contributions, adjusted for any earnings or losses. The Company does not provide any matching contributions for this plan. Participants can elect to defer from 0% to 100% of eligible base salary and eligible commissions and up to 100% of annual bonus on a pre-tax basis. The DC Plan offers various investment options (which mirror the options available under the Company’s 401(k) plan) to participants. Participant deferrals are credited to a bookkeeping account that is administered by Fidelity Investments. Earnings are credited to each participant’s account based on the investment options selected by such participant. Participants may change or reallocate their investments at any time. Participants can elect to receive in-service payments or lump-sum or monthly payments over one to 15 years following termination from service or disability. To ensure compliance with IRC Section 409A, the DC Plan provides that the payments following termination shall not be made earlier than six months after the termination date. Amounts deferred under the DC Plan by NEOs, if any, are included in the appropriate column of the Summary Compensation Table. The following table summarizes our NEOs’ compensation under the DC Plan for Executives during fiscal year 2021.2023. | Jones | | | 255,018 | | | 15,308 | | | 138,385 | | | — | | | 408,711 | | | Bowen | | | — | | | — | | | — | | | — | | | — | | | Gerke | | | — | | | — | | | — | | | — | | | — | | | Orosco | | | — | | | — | | | — | | | — | | | — | | | Logerwell | | | — | | | — | | | — | | | — | | | — | |
| Jones | | | 395,256 | | | 225,857 | | | 83,818 | | | — | | | 704,931 | | | Bowen | | | — | | | — | | | — | | | — | | | — | | | Orosco | | | — | | | — | | | — | | | — | | | — | | | Redler | | | — | | | — | | | — | | | — | | | — | | | Logerwell | | | — | | | — | | | — | | | — | | | — | |
(1)
| The amounts in this column are not included in the Summary Compensation Table because they are not above-market or preferential earnings on deferred compensation. |
(2)
| Amounts in this column include NEO contributions previously reflected in Summary Compensation Tables included in the Company’s proxy statements for prior fiscal years and any earnings thereon. |
| Executive Compensation | Option Exercises and Stock Vested Table | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 48
| 41 |
TABLE OF CONTENTS EMPLOYMENT AGREEMENTS, CHANGE IN CONTROL AND OTHER ARRANGEMENTS Jeffrey J. Jones II Employment Agreement The Company and Mr. Jones entered into the JonesEmployment Agreement in November 2021, which replaced Mr. Jones’s prior employment agreement entered into in August 2017, which provides the following terms:2017. Compensation. The JonesEmployment Agreement provides for: an initiala base salary of $995,000, and a target STI award equal to 125%150% of base salary beginning in fiscal year 2022, and provided for certain sign-on awards that are now fully vested.a target LTI award equal to $6.2 million beginning in fiscal year 2023, each of which may be increased from time-to-time by the Compensation Committee. Term. Unless earlier terminated, the JonesEmployment Agreement expires on August 21, 2022.November 4, 2026. Restrictive Covenants. The JonesEmployment Agreement imposes restrictive covenants on Mr. Jones, which include:include non-hire, non-solicitation, non-competition, and non-disparagement during the term and for two years following his last day of employment, and non-disclosure of proprietary information during the term and thereafter in perpetuity. Severance Benefits. Under the Jones Agreement, inIn the event of a termination by the Company other than for Cause or by Mr. Jones for Good Reason, subject to his execution of a release, Mr. Jones is entitled to a lump-sum payment equal to two times his base salary and his target bonus; an amount equal to the COBRA premium for 1824 months following termination; and a pro-rata bonus for the year of termination based on actual Company and individual performance for the applicable fiscal year. If Mr. Jones’s employment is terminated within 24 months following a Change in Control or within 120 days prior to a transaction that constitutes a “change in control” under IRC Section 409A by the Company other than for Cause or by Mr. Jones for Good Reason, Mr. Jones is entitled to a lump-sum payment equal to two times his base salary and his target bonus; an amount equal to the COBRA premium for 1824 months following termination; an additional lump sum payment equal to his base salary plus six times the monthly COBRA premium; and a pro-rata bonus for the year of termination based on target performance. Death or Disability. Under the Jones Agreement, inIn the event of Mr. Jones’s death or disability, he or his representatives are entitled to a pro-rata bonus for the year of termination based on actual Company and individual performance for the applicable fiscal year. If Mr. Jones’s death or disability occurs within 24 months following a Change in Control or within 120 days prior to a transaction that constitutes a “change in control” under IRC Section 409A, Mr. Jones is entitled to a pro-rata bonus for the year of termination based on target performance. Definitions. For purposes of the JonesEmployment Agreement, the following terms are defined to mean: “Cause”: any one or more of the following grounds: (i)
| Mr. Jones’s commission of an act materially and demonstrably detrimental to the Company or any affiliate, which act constitutes gross negligence or willful misconduct by Mr. Jones in the performance of his material duties to the Company or any affiliate; |
(ii)
| Mr. Jones’s commission of any material act of dishonesty or breach of trust resulting or intending to result in material personal gain or material enrichment of Mr. Jones at the expense of the Company or any affiliate; |
(iii)
| Mr. Jones’s violation of certain covenants related to confidentiality, non-hiring of employees, and non-solicitation of customers, and non-competition; or |
(iv)
| The inability of the Company or any affiliate to participate in any activity subject to government regulation and material to the Company’s or any affiliate’s business solely as a result of any willful action or inaction by Mr. Jones. |
“Change in Control”: defined in the H&R Block, Inc. 2013 Long Term Incentive Plan (the “2013 Plan”), which is filed as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the period ending April 30, 2021.2018 Plan. “Good Reason”: any one or more of the following grounds unless cured within thirty days of receipt of notice thereof: (i)
| A material diminution in Mr. Jones’s base salary or target bonus opportunity; |
(ii)
| Relocation of Mr. Jones’s location of employment outside of the Kansas City, Missouri metropolitan area; |
(iii)
| A material diminution in Mr. Jones’s responsibilities, duties or authority, authority as President and CEO of the Company, or a requirement to report to anyone other than the Company’s Board of Directors; or |
(iv)
| Any other action or inaction that constitutes a material breach by the Company of the JonesEmployment Agreement. |
| Executive Compensation | Employment Agreements, Change in Control and Other Arrangements | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 49
| 42 |
TABLE OF CONTENTS H&R Block Executive Severance Plan Messrs. Gerke andMr. Bowen and Mses. OroscoRedler and Logerwell participate in the Executive Severance Plan. Pursuant to the Jones Agreement, Mr. Jones participatesPlan, and Ms. Orosco participated in the Executive Severance Plan prior to her departure from the Company. Pursuant to the Employment Agreement, Mr. Jones participates only if and to the extent that the benefits related to equity awards thereunder exceed those contained in the JonesEmployment Agreement.
Eligibility. An associate ofThe Compensation Committee determines the Company whose participationassociates who participate in the Executive Severance Plan is approved by the Compensation Committee is eligible.Plan. Severance Benefits. Under the terms of the Executive Severance Plan, ifIf a participant incurs a Qualifying Termination, a Good Reason Termination, or a Change in Control Termination (which includes a participant’s Good Reason Termination within 75 days immediately preceding or within 18 months immediately following a Change in Control, as defined in the Executive Severance Plan), subject to the execution of a release, he or she is entitled to receive a lump sum severance amount equal to: (i)
| The participant’s monthly compensation multiplied byIn the case of a Change in Control Termination, two times the participant’s yearsannual base salary and STI target amount, and in the case of service, subject to a minimum payout equal to 12 months of serviceQualifying Termination that is not a Change in Control Termination, one and a maximum payout equal to 18 months of service;one-half times annual base salary and STI target amount; and |
(ii)
| The percentage of the participant’s monthly compensation approved under the Company’s STI plan, as determined by the Compensation Committee, multiplied by the participant’s years of service, subject to a minimum payout equal to 12 months of service and a maximum payout equal to 18 months of service; and |
(iii)
| An amount equal to the participant’s COBRA subsidy multiplied by 12, if the participant was enrolled in the Company’s applicable health, dental, and vision benefits on the termination date. |
The Company will also provide reasonable outplacement assistance for a period not to exceed 15 months. The participant is entitled to a pro-rata award of any amounts payable under the Company’s STI compensation plan, based upon the participant’s actual performance and the attainment of goals established as determined by the Board in its sole discretion. Definitions. For purposes of the Executive Severance Plan, the following terms are defined to mean: “Cause”: any of the following unless, if capable of cure, such events are fully corrected in all material respects by the participant within 10 days after the Company provides notice of the occurrence of such event: (i)
| Misconduct that materially interferes with or materially prejudices the proper conduct of the business of the Company; |
(ii)
| Commission of an act materially and demonstrably detrimental to the good will of the Company; |
(iii)
| Commission of any act of dishonesty or breach of trust resulting or intending to result in material personal gain or enrichment of the participant at the expense of the Company; |
(iv)
| Violation of any non-competition, non-solicitation, confidentiality or similar restrictive covenant under any employment-related agreement, plan, or policy with respect to which the participant is a party or is bound; or |
(v)
| Conviction of, or plea of guilty or nolo contendere to, a misdemeanor involving an act of moral turpitude or a felony. |
“Good Reason Termination”: a separation from service within 75 days immediately preceding or 18 months immediately following a Change in Control which is initiated by the participant, subject to certain notice requirements, on account of one or more of the following conditions occurring within that same time frame without the consent of the participant that is not substantially remedied by the Company: (i)
| A material diminution in the participant’s base compensation; |
(ii)
| A material diminution in the participant’s authority, duties, or responsibilities; |
(iii)
| A materialThe Company’s change by more than 50 miles in the primary geographic location at which the participant must perform the services; or |
(iv)
| Any other action or interaction that constitutes a material breach by the Company of any written employment-related agreement between the participant and the Company. |
“Qualifying Termination”: the involuntary separation from service by the Company under circumstances not constituting Cause but does not include the elimination of the participant’s position where the participant was offered a comparable position with the Company or with a party that acquires any assets from the Company, the redefinition of participant’s position to a lower compensation rate or grade, or the participant’s death or disability. | Executive Compensation | Employment Agreements, Change in Control and Other Arrangements | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 50
| 43 |
TABLE OF CONTENTS In connection with equity awards our executives enter into equity award agreements that provide for acceleration of vesting or acceleration of forfeiture of the awards upon certain events. See “Termination of Employment Provisions in LTI Award Agreements” in the Compensation Discussion and Analysis above. Applicable definitions are as follows: Retirement. Our standard equity award agreements define “Retirement” as voluntary termination at or after (i) reaching age 55 with at least five years of service with the Company or (ii) reaching age 60. The alternate forms of award agreements used for Mr. Gerke define “Retirement” as voluntary termination at or after reaching age 60. Severance Benefits; Death or Disability. “Qualifying Termination” and “Good Reason Termination” are defined as described above under “H&R Block Executive Severance Plan.” “Disability” means (i) for participants covered by a group long-term disability program, the participant is receiving income replacement benefits for at least three months under the program because of any physical or mental impairment expected to result in death or last for a continuous period of at least 12 months (a “qualifying impairment”"qualifying impairment"); or (ii) in all other cases, the participant is unable to engage in any substantial gainful activity for a period of at least nine months because of a qualifying impairment. In the event of a Change in Control Termination (as defined in the applicable award agreement), the participant becomes vested in all outstanding restricted share unit awards. After a change in control, the Compensation Committee may, in its discretion, equitably adjust the performance goals or payment formula that apply to performance share units, or market stock units, as determined necessary due to the change in control. Following a change in control, PSUs or MSUs generally will vest as a result of the executive’s continued employment through the third anniversary of the grant date and the Company’s level of performance during the performance period. However, if an executive’s employment terminates before such third anniversary due to certain qualifying terminations that occur in connection with the change in control, or disability, death or retirement, the executive may be entitled to receive all or a pro-rata portion of the award. The terms of the fiscal year 20212024 LTI awards are described in more detail above under the headings “Actions Pertaining“Fiscal Year 2024 Compensation Program.” Severance and Release Agreement with Ms. Orosco The circumstances of Ms. Orosco’s departure qualified as a Qualifying Termination under the terms of the Executive Severance Plan, and in connection with her departure, the Company and Ms. Orosco entered into the Severance Agreement. Under the terms of the Severance Agreement and the Executive Severance Plan, in consideration for Ms. Orosco agreeing to Fiscal Year 2021 LTI Compensation.”two-year non-competition and non-solicitation covenants and to a general release of claims, Ms. Orosco received a lump sum cash severance payment in the amount of $1,778,400, plus a COBRA subsidy in the amount of $17,297. Additionally, pursuant to the terms of the Executive Severance Plan, Ms. Orosco was entitled to receive payment of her STI plan award for the Company’s 2023 fiscal year based upon performance under the STI plan as determined by the Compensation Committee. See page 26 for additional information regarding Ms. Orosco’s 2023 STI award. Under the terms of her equity award agreements, Ms. Orosco was also entitled to pro-rata vesting of PSU awards that had been outstanding for at least one year, in each case based upon the achievement of performance goals during the applicable performance period. Ms. Orosco is also entitled to receive reasonable outplacement assistance for up to 15 months up to an amount not to exceed $15,000. Indemnification Agreements We have entered into indemnification agreements with each of our directors and certain of our officers, including each of our named executive officers, on a form previously approved by our Board. These agreements are intended to supplement our officer and director liability insurance and to provide the officers and directors with specific contractual assurance that the protection provided by our Bylaws will continue to be available regardless of, among other things, an amendment to the Bylaws or a change in management or control of the Company. In general, the indemnification agreement provides that, subject to the provisions set forth therein, the Company will indemnify and hold harmless the director or officer (each, an “Indemnitee”) against all direct and indirect costs and liabilities incurred by an Indemnitee, to the fullest extent permitted by applicable law, in connection with any actions, claims, suits or other proceedings brought against such Indemnitee by reason of (i) the fact that the Indemnitee is or was a director, officer or other fiduciary of the Company or, at the request of the Company, a director, officer or other fiduciary of a subsidiary of the Company, or (ii) any action taken, or failure to act, by such Indemnitee in such capacity. The indemnification agreement provides contractual assurances regarding the scope of the indemnification as permitted by the Missouri General and Business Corporation Law and the Bylaws. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 44 |
TABLE OF CONTENTS Under the Indemnification Agreement, an Indemnitee will have the right to advancement by the Company of expenses as they are actually and reasonably paid or incurred in connection with defending a claim covered by the Indemnification Agreement prior to the final disposition of such claim. The Indemnitee is required to repay any expenses advanced to the Indemnitee if such Indemnitee is determined not to be entitled to indemnification by the Company. The above description of the terms of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Indemnification Agreement, a copy of which is filed with the SEC as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended January 31, 2012. | Executive Compensation | Employment Agreements, Change in Control and Other Arrangements | H&R Block 2021 Proxy Statement 51
|
TABLE OF CONTENTS
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table summarizes the potential payments our NEOs would receive in the event of termination or a change in control of the Company. ThisCompany, except for Ms. Orosco. For Ms. Orosco, who ceased serving as an executive officer during the fiscal year and subsequently departed the Company on July 1, 2023, the table includes amounts received under the circumstances of her actual departure. For Messrs. Jones and Bowen and Mses. Redler and Logerwell, this table assumes the relevant triggering event occurred on AprilJune 30, 2021,2023, and the value of the equity-based awards included below was therefore determined using the closing price of the Company’s common stock of $22.26,$31.87, which was the closing price as reported on the NYSE on AprilJune 30, 2021.2023. Accordingly, the amounts provided in this table for each of our NEOs (except Ms. Orosco) are based on hypothetical circumstances, may materially differ from actual amounts payable upon the triggering event, and the actual amounts to be paid out can only be determined at the time of such triggering event. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE | Jones(1) | | | | | | | | | | | | | | | Cash | | | 2,238,750 | | | 3,233,750 | | | — | | | — | | | Restricted Share Units | | | 30,756 | | | 2,845,140 | | | — | | | 1,054,631 | | | Market Stock Units | | | 2,221,243 | | | 5,048,698 | | | — | | | 2,765,788 | | | Performance Share Units | | | 4,257,488 | | | 9,692,566 | | | — | | | 5,293,313 | | | Health and Welfare Plan Benefits | | | 35,852 | | | 47,803 | | | — | | | — | | | Outplacement Services | | | — | | | — | | | — | | | — | | | Total | | | 8,784,089 | | | 20,867,957 | | | — | | | 9,113,732 | | | Bowen(2) | | | | | | | | | | | | | | | Cash | | | 1,623,258 | | | 1,623,258 | | | — | | | — | | | Restricted Share Units | | | 10,900 | | | 653,849 | | | — | | | 230,622 | | | Market Stock Units | | | 442,978 | | | 1,106,478 | | | — | | | 566,869 | | | Performance Share Units | | | 848,297 | | | 2,123,683 | | | — | | | 1,083,839 | | | Health and Welfare Plan Benefits | | | 15,864 | | | 15,864 | | | — | | | — | | | Outplacement Services | | | 4,500 | | | 4,500 | | | — | | | — | | | Total | | | 2,945,796 | | | 5,527,632 | | | — | | | 1,881,330 | | | Gerke(2)(3) | | | | | | | | | | | | | | | Cash | | | 1,080,000 | | | 1,080,000 | | | — | | | — | | | Restricted Share Units | | | 11,909 | | | 574,900 | | | 216,779 | | | 216,779 | | | Market Stock Units | | | 444,264 | | | 1,009,759 | | | 553,177 | | | 553,177 | | | Performance Share Units | | | 851,517 | | | 1,938,538 | | | 1,058,683 | | | 1,058,683 | | | Health and Welfare Plan Benefits | | | 15,864 | | | 15,864 | | | — | | | — | | | Outplacement Services | | | 4,500 | | | 4,500 | | | — | | | — | | | Total | | | 2,408,054 | | | 4,623,562 | | | 1,828,640 | | | 1,828,640 | | | Orosco(2) | | | | | | | | | | | | | | | Cash | | | 1,567,500 | | | 1,567,500 | | | — | | | — | | | Restricted Share Units | | | 9,420 | | | 557,497 | | | — | | | 199,377 | | | Market Stock Units | | | 389,562 | | | 951,840 | | | — | | | 495,258 | | | Performance Share Units | | | 746,130 | | | 1,826,953 | | | — | | | 947,097 | | | Health and Welfare Plan Benefits | | | 15,864 | | | 15,864 | | | — | | | — | | | Outplacement Services | | | 4,500 | | | 4,500 | | | — | | | — | | | Total | | | 2,732,976 | | | 4,924,154 | | | — | | | 1,641,732 | |
| Jones(1) | | | | | | | | | | | | | | | | | | Cash | | | 4,975,000 | | | 4,975,000 | | | 4,975,000 | | | — | | | — | | | Restricted Share Units | | | — | | | — | | | 3,547,073 | | | 1,208,216 | | | 1,977,080 | | | Performance Share Units | | | 3,189,136 | | | — | | | 7,919,379 | | | 3,189,136 | | | 5,218,587 | | | Health and Welfare Plan Benefits | | | 54,087 | | | 54,087 | | | 54,087 | | | — | | | — | | | Outplacement Services | | | — | | | — | | | — | | | — | | | — | | | Total | | | 8,218,223 | | | 5,029,087 | | | 16,495,539 | | | 4,397,352 | | | 7,195,667 | | | Bowen(2) | | | | | | | | | | | | | | | | | | Cash | | | 1,831,695 | | | 1,831,695 | | | 2,442,260 | | | — | | | — | | | Restricted Share Units | | | — | | | — | | | 1,005,700 | | | — | | | 575,199 | | | Performance Share Units | | | 927,767 | | | — | | | 2,258,704 | | | — | | | 1,518,164 | | | Health and Welfare Plan Benefits | | | 17,321 | | | 17,321 | | | 17,321 | | | — | | | — | | | Outplacement Services | | | 15,000 | | | 15,000 | | | 15,000 | | | — | | | — | | | Total | | | 2,791,783 | | | 1,864,016 | | | 5,738,985 | | | — | | | 2,093,364 | | | Orosco(3) | | | | | | | | | | | | | | | | | | Cash | | | 1,778,400 | | | — | | | — | | | — | | | — | | | Restricted Share Units | | | — | | | — | | | — | | | — | | | — | | | Performance Share Units | | | 753,797 | | | — | | | — | | | — | | | — | | | Health and Welfare Plan Benefits | | | 17,297 | | | — | | | — | | | — | | | — | | | Outplacement Services | | | 15,000 | | | — | | | — | | | — | | | — | | | Total | | | 2,564,494 | | | — | | | — | | | — | | | — | | | Redler(2) | | | | | | | | | | | | | | | | | | Cash | | | 1,482,000 | | | 1,482,000 | | | 1,976,000 | | | — | | | — | | | Restricted Share Units | | | — | | | — | | | 693,064 | | | — | | | 452,501 | | | Performance Share Units | | | — | | | — | | | 413,831 | | | — | | | — | | | Health and Welfare Plan Benefits | | | — | | | — | | | — | | | — | | | — | | | Outplacement Services | | | 15,000 | | | 15,000 | | | 15,000 | | | — | | | — | | | Total | | | 1,497,000 | | | 1,497,000 | | | 3,097,895 | | | — | | | 452,501 | |
| Executive Compensation | Potential Payments Upon Termination or Change in Control Table | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 52
| 45 |
TABLE OF CONTENTS | Name of Executive | | Termination without
Cause or for Good
Reason ($) | | Termination without
Cause or for Good
Reason in
Connection with a
Change in Control ($) | | Retirement ($) | | Death or Disability ($) | | Name of Executive | | Termination
without Cause
($) | | Termination for
Good Reason
($) | | Termination
without Cause or
for Good Reason
in Connection with
a Change in Control
($) | | Retirement
($) | | Death or
Disability
($) | | | Logerwell(2) | | | | | | | | | | Logerwell(2) | | | | | | | | | | | | | Cash | | 585,000 | | 585,000 | | — | | — | | Cash | | 631,800 | | 631,800 | | 842,400 | | — | | — | | | Restricted Share Units | | 3,112 | | 131,131 | | — | | 49,730 | | Restricted Share Units | | — | | — | | 161,906 | | — | | 93,536 | | | Market Stock Units | | 100,998 | | 229,542 | | — | | 125,757 | | Performance Share Units | | 150,768 | | — | | 364,339 | | — | | 246,711 | | | Performance Share Units | | 193,553 | | 440,614 | | — | | 240,646 | | Health and Welfare Plan Benefits | | 17,297 | | 17,297 | | 17,297 | | — | | — | | | Health and Welfare Plan Benefits | | 15,864 | | 15,864 | | — | | — | | Outplacement Services | | 15,000 | | 15,000 | | 15,000 | | — | | — | | | Outplacement Services | | 4,500 | | 4,500 | | — | | — | | Total | | 814,865 | | 664,097 | | 1,400,941 | | — | | 340,247 | | | Total | | 903,027 | | 1,406,651 | | — | | 416,134 | | |
(1)
| Payments to Mr. Jones would be made pursuant to the terms of the JonesEmployment Agreement and various equity award agreements described above under “Employment Agreements, Change in Control and Other Arrangements” and “Termination of Employment, Severance, and Transition Arrangements.” |
(2)
| Payments to Messrs.Mr. Bowen and Gerke and Mses. OroscoRedler and Logerwell would be made pursuant to the terms of the Executive Severance Plan and various equity award agreements described above under “Employment Agreements, Change in Control and Other Arrangements” and “Termination of Employment, Severance, and Transition Arrangements.” |
(3)
| As discussed above, Ms. Orosco ceased serving as President, Global Consumer Tax and Service Delivery of April 30, 2021, Mr. Gerkethe Company effective May 11, 2023 and departed the Company on July 1, 2023. In connection with her departure, Ms. Orosco received the payments and other benefits disclosed under the “Termination without Cause” column pursuant to the terms of the Executive Severance Plan, the Severance Agreement, and various equity award agreements described under “Employment Agreements, Change in Control and Other Arrangements” and “Long-Term Incentive Compensation.” Following her departure, she was no longer eligible to receive payments in the only named executive officer who had satisfied the requirements to be eligible forevent of termination after a change in control or death, disability, or retirement. |
Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule that requires a public company to disclose the ratio of the annual total compensation of its CEO to the median annual total compensation of its employees (other than its CEO). Mr. Jones served as our President and CEO throughout our fiscal year 2021.2023. On AprilJune 30, 2021,2023, the date which we selected to identify the median employee (the “Pay Ratio Date”), the Company had approximately 26,75612,690 U.S. employees and 7,9943,975 non-U.S. employees, for a total of 34,75016,665 employees. This population consisted of the Company’s full-time, part-time, seasonal, and temporary employees. In determining the median employee, the Company excluded from its employee population all of its employees located in Ireland (27 employees) and India (739 employees) pursuant to a de minimis exemption permitted under the SEC rules. To identify the median employee from the Company’s employee population, we compared the amount of salary and wages paid to employees (excluding Mr. Jones), as reflected in our payroll records for the 2020 calendar year as reported to the Internal Revenue Service on Form W-2 for U.S. employees and the Form W-2 equivalent for non-U.S. employees, who were employed on the Pay Ratio Date, excluding Mr. Jones.our 2023 fiscal year. We annualized compensation for employees who were hired in 2020fiscal 2023 but did not work for us the entire calendar year, excluding seasonal and temporary employees.No cost-of-living adjustments were made in identifying the median employee. The identified median employee was a seasonal associate whose total hours worked during the year was equivalent to approximately 5nine months of a full-time associate’s hours worked. After the median employee was identified, we calculated such employee’s annual total compensation using the same methodology used for the Company’s named executive officers as set forth in the fiscal year 20212023 Summary Compensation Table of this proxy statement. For fiscal year 2021,2023, the annual total compensation for Mr. Jones was $8,908,536$8,814,357 and the annual total compensation for the median employee, excluding Mr. Jones, was $14,856$23,831, which resulted in a ratio of 600370 to 1. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. We believe that our calculated ratio is a reasonable estimate calculated in a manner consistent with the pay ratio disclosure requirements. The pay ratios reported by other companies, including those within our Peer Group and industry, may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. This information is being provided for the purposes of compliance with the pay ratio disclosure requirement. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions. | Executive Compensation | Pay Ratio Disclosure | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 53
| 46 |
TABLE OF CONTENTS PAY VERSUS PERFORMANCE Pay versus Performance Table
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid or “CAP” (as defined by SEC rules) and certain financial performance of the Company. The Compensation Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the Company’s performance, see “Compensation Discussion and Analysis” on page 20 above.
| 2023 | | | 8,814,357 | | | 4,044,522 | | | 2,564,099 | | | 1,807,408 | | | 219.31 | | | 206.20 | | | 553,700 | | | 914,691 | | | 2022 | | | 11,040,183 | | | 33,126,771 | | | 2,460,082 | | | 5,665,458 | | | 235.61 | | | 171.54 | | | 553,674 | | | 889,529 | | | TP | | | 191,218 | | | 1,551,299 | | | 90,194 | | | 310,262 | | | 150.03 | | | 203.31 | | | 89,610 | | | 159,613 | | | 2021 | | | 8,908,536 | | | 17,552,877 | | | 2,219,359 | | | 3,628,330 | | | 142.24 | | | 208.37 | | | 583,791 | | | 932,458 | |
(1)
| Refers to the following periods: (a) for 2023, our fiscal year ended June 30, 2023; (b) for 2022, our fiscal year ended June 30, 2022; (c) for TP or Transition Period, the two-month transition period from May 1, 2021 to June 30, 2021; and (d) for 2021, our fiscal year ended April 30, 2021. On June 9, 2021, the Board of Directors approved a change of the Company’s fiscal year end from April 30 to June 30, resulting in the two-month Transition Period. References to years in the tables below refer to each of these periods, including the Transition Period. |
(2)
| Reflects compensation amounts reported in the Summary Compensation Table for our President and CEO (our principal executive officer or “PEO”), Jeffrey J. Jones II, for the respective periods shown. |
(3)
| Represents the amount of “compensation actually paid” to Mr. Jones, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Jones during the applicable period. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Jones’s total compensation for each period to determine the compensation actually paid. The assumptions we used to calculate the values for stock awards included in the calculation of compensation actually paid for Mr. Jones did not differ materially from those used to calculate grant date fair value for such awards. We did not report a change in pension value for any of the periods reflected in the Summary Compensation Table for Mr. Jones as we do not have a pension plan. |
| SCT Total Compensation ($) | | | 8,814,357 | | | 11,040,183 | | | 191,218 | | | 8,908,536 | | | Stock Award Values Reported in SCT for the Covered Year ($) | | | (6,200,037) | | | (6,416,674) | | | — | | | (5,500,021) | | | Fair Value as of Year End for Stock Awards Granted in the Covered Year ($) | | | 3,931,767 | | | 14,091,016 | | | — | | | 11,672,617 | | | Change in Fair Value of Outstanding Unvested Stock Awards from Prior Years ($) | | | (1,712,399) | | | 9,193,488 | | | 859,747 | | | 3,097,389 | | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | | | (789,166) | | | 5,218,758 | | | 500,334 | | | (266,735) | | | Fair Value of Stock Awards Forfeited during the Covered Year ($) | | | — | | | — | | | — | | | (358,909) | | | Compensation Actually Paid ($) | | | 4,044,522 | | | 33,126,771 | | | 1,551,299 | | | 17,552,877 | |
(4)
| Represents the average of the amounts reported for the Company’s NEOs as a group (excluding our CEO) in the “Total” column of the Summary Compensation Table in each applicable period. The names of the NEOs included for purposes of calculating the average amounts in each applicable period are as follows: (a) for 2023, Tony G. Bowen, Karen A. Orosco, Dara S. Redler, and Kellie J. Logerwell; (b) for 2022, Tony G. Bowen, Karen A. Orosco, Dara S. Redler, Kellie J. Logerwell, and Thomas A. Gerke; (c) for the Transition Period, Tony G. Bowen, Karen A. Orosco, Kellie J. Logerwell, and Thomas A. Gerke; and (d) for 2021, Tony G. Bowen, Karen A. Orosco, Kellie J. Logerwell, and Thomas A. Gerke. |
| H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 47 |
TABLE OF CONTENTS (5)
| Represents the average amount of “compensation actually paid” to the NEOs as a group (excluding the CEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group during the applicable period. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the NEOs’ average total compensation for each period to determine the compensation actually paid. The assumptions we used to calculate the values for stock awards included in the calculation of compensation actually paid for the NEOs did not differ materially from those used to calculate grant date fair value for such awards. We did not report a change in pension value for any of the periods reflected in the Summary Compensation Table for the NEOs as we do not have a pension plan. |
| Average SCT Total Compensation ($) | | | 2,564,099 | | | 2,460,082 | | | 90,194 | | | 2,219,359 | | | Average Stock Award Values Reported in SCT for the Covered Year ($) | | | (1,155,024) | | | (1,089,033) | | | — | | | (937,524) | | | Average Fair Value as of Year End for Stock Awards Granted in the Covered
Year ($) | | | 732,462 | | | 2,329,038 | | | — | | | 1,989,690 | | | Average Change in Fair Value of Outstanding Unvested Stock Awards from Prior Years ($) | | | (254,615) | | | 1,253,681 | | | 144,793 | | | 501,537 | | | Average Change in Fair Value of Stock Awards from Prior Years that Vested in the Covered Year ($) | | | (79,514) | | | 711,690 | | | 75,275 | | | (45,331) | | | Average Fair Value of Stock Awards Forfeited during the Covered Year ($) | | | — | | | — | | | — | | | (99,401) | | | Average Compensation Actually Paid ($) | | | 1,807,408 | | | 5,665,458 | | | 310,262 | | | 3,628,330 | |
(6)
| Company TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
(7)
| Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of the period. The peer group used for this purpose is the S&P400 Consumer Services Industry Group Index, which is the same group used by the Company for purposes of compliance with Item 201(e)(1)(ii) of Regulation S-K. |
(8)
| We determined EBITDA from Continuing Operations to be the most important financial performance measure used to link Company performance to CAP to our PEO and Non-PEO NEOs in fiscal year 2023. EBITDA from Continuing Operations is a non-GAAP measure that is defined in the Compensation Discussion and Analysis section of this Proxy Statement. EBITDA from Continuing Operations may not have been the most important financial performance measure for fiscal years 2022 and 2021 or the Transition Period and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Financial Performance Measures
As described in greater detail in Compensation Discussion and Analysis beginning on page 20, our approach to executive compensation is designed to recruit, retain, and motivate talented executives, directly link pay to performance over both short-term and multi-year periods, and align management and shareholder interests. The most important financial measures used by the Company to link compensation actually paid (as defined by SEC rules) to the Company’s NEOs for the most recently completed fiscal year to the Company’s performance are: ▪ | EBITDA from Continuing Operations; |
▪ | Revenue from Continuing Operations; |
▪ | Pre-Tax Earnings from Continuing Operations; and |
Analysis of the Information Presented in the Pay versus Performance Table
While we utilize several performance measures to align executive compensation with performance, all of those measures are not presented in the Pay versus Performance table. The Company seeks to incentivize both short- and long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as defined by SEC rules) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following graphic descriptions of the relationships between information presented in the Pay versus Performance table. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 48 |
TABLE OF CONTENTS
To facilitate clear disclosure and ease of comparison on year-over-year changes, we have excluded the Transition Period from the graphics below, but have summarized the relationships between compensation actually paid (as defined by SEC rules) and the required metrics for the Transition Period in footnotes to the graphics.
*
| All figures in the above graphs are from the Pay versus Performance table above. To facilitate clear disclosure on year-over-year changes, we have excluded the Transition Period from the graphs. Given the short, two-month length of the Transition Period, and that no performance-based compensation was awarded during the period, Transition Period CAP is not correlated to TSR, Net Income, or EBITDA from Continuing Operations for the period. |
EQUITY COMPENSATION PLANS The following table provides information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of AprilJune 30, 2021.2023. As of AprilJune 30, 2021,2023, the Company had two active stock-based compensation plans: the 2018 Plan and the H&R Block, Inc. 2000 Employee Stock Purchase Plan (as amended and restated effective January 1, 2020). Our shareholders have approved all of the Company’s current stock-based compensation plans. | Plan Category | | Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
(A) (# 000) | | Weighted-average
exercise price of
outstanding options,
warrants, and rights
(B) ($) | | Number of securities remaining
available for future issuance under
equity compensation plans excluding
securities reflected in column (A)
(C) (# 000) | | Plan Category | | Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
(A) (# 000) | | Weighted-average
exercise price of
outstanding options,
warrants, and rights
(B) ($) | | Number of securities remaining
available for future issuance under
equity compensation plans excluding
securities reflected in column (A)
(C) (# 000) | | | Equity compensation plans approved by security holders | | 719 | | $22.23 | | 11,200 | | Equity compensation plans approved by security holders | | 574 | | $23.34 | | 9,277 | | | Equity compensation plans not approved by security holders | | — | | — | | — | | Equity compensation plans not approved by security holders | | | — | | — | | — | | | Total | | 719 | | $22.23 | | 11,200 | | Total | | 574 | | $23.34 | | 9,277 | |
| Equity Compensation Plans | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 54
| 49 |
The Company’s management is responsible for preparing financial statements in accordance with GAAP and the financial reporting process, including the Company’s disclosure controls and procedures and internal control over financial reporting. The Company’s independent registered public accounting firm is responsible for (i) auditing the Company’s financial statements and expressing an opinion as to their conformity to GAAP and (ii) auditing the effectiveness of the Company’s internal control over financial reporting and expressing an opinion as to its effectiveness. The Audit Committee of the Board of Directors, composed solely of independent directors, meets periodically with management, including the Vice President, Internal Audit Services (the employee with primary responsibility for the Company’s internal audit functions) and others in the Company, and the Company’s independent registered public accounting firm to review and oversee matters relating to the Company’s financial statements, audit services (internal audit) activities, disclosure controls and procedures, and internal control over financial reporting and non-audit services provided by the independent accountants. In addition, the Audit Committee pre-approved all audit and non-audit fees paid to such firm. The Audit Committee has reviewed and discussed with management and Deloitte, the Company’s independent registered public accounting firm, the Company’s audited financial statements for the fiscal year ended AprilJune 30, 2021.2023. The Audit Committee has also discussed with Deloitte the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee received from Deloitte the written disclosures and the letter required by applicable requirements of the PCAOB regarding Deloitte’s communications with the Audit Committee concerning independence, discussed with Deloitte its independence from the Company and the Company’s management, and considered whether Deloitte’s provision of non-audit services to the Company is compatible with maintaining the auditor’s independence. The Audit Committee conducted its own self-evaluation and evaluation of the services provided by Deloitte during the fiscal year ended AprilJune 30, 2021.2023. Based on its evaluation of Deloitte, the Audit Committee reappointed Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2022.2024. Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors of the Company that the Company’s audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended AprilJune 30, 2021,2023, for filing with the SEC. AUDIT COMMITTEE
Victoria J. Reich, Chair
Richard A. Johnson
Mia F. Mends
Matthew E. Winter
Christianna Wood
| Audit Committee Report | Audit Committee | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 55
| 50 |
TABLE OF CONTENTS The following table presents fees for professional services rendered by Deloitte for the audit of the Company’s annual financial statements for the years ended AprilJune 30, 20212023 and 2020,June 30, 2022, and fees billed for other services rendered by Deloitte for such years. Fees disclosed below include fees actually billed and expected to be billed for services relating to the applicable fiscal year. | Fiscal Year | | 2021 | | 2020 | | | | Fiscal Year
2023 | | Fiscal Year
2022 | | | Audit Fees | | $2,964,150 | | $3,143,600 | | Audit Fees | | $2,801,775 | | $2,673,775 | | | Audit-Related Fees | | $105,970 | | $164,375 | | Audit-Related Fees | | $114,895 | | $105,790 | | | Tax Fees | | $161,539 | | $5,872 | | Tax Fees | | $104,968 | | $148,030 | | | All Other Fees | | — | | — | | All Other Fees | | | — | | — | | | Total Fees | | $3,231,659 | | $3,313,847 | | Total Fees | | $3,021,638 | | $2,927,595 | |
Audit Fees consist of fees for professional services rendered for the audit of the Company’s financial statements and review of financial statements included in the Company’s quarterly reports and services normally provided by the independent auditor in connection with statutory and regulatory filings or engagements. Audit-Related Fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. Amounts included consist of fees incurred relating to support of business acquisition and divestiture activities, independent assessments of internal controls, audits of employee benefits plan financial statements, and other audit-related services. Tax Fees consist of fees for the preparation or review of original and amended tax returns, claims for refunds and tax payment-planning services for tax compliance, tax planning, tax consultation, and tax advice. Amounts included above consist of fees incurred relating to transfer pricing studies, technical consultation related to international tax matters, and other tax advisory services. All Other Fees are fees billed for professional services that were not the result of an audit, review, or tax-related services, and consisthave historically consisted primarily of subscriptions to human resources publications and related items. The Audit Committee has adopted policies and procedures for pre-approving audit and non-audit services performed by the independent auditor so that the provision of such services does not impair the auditor’s independence. All fees reported above were approved pursuant to the policy. Under the Audit Committee’s pre-approval policy, the terms and fees of the annual audit engagement require specific Audit Committee approval. Other types of services are eligible for general pre-approval. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific Audit Committee pre-approval. In addition, any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee. General pre-approval granted under the Audit Committee’s pre-approval policy extends to the next fiscal year following the date of pre-approval. The Audit Committee reviews and pre-approves services that the independent auditor may provide without obtaining specific Audit Committee pre-approval on an annual basis and revises the list of general pre-approved services from time to time. In determining whether to pre-approve audit or non-audit services (regardless of whether such approval is general or specific pre-approval), the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence. The Audit Committee will also consider whether the independent auditor is best positioned to provide the most effective and efficient service and whether the service might enhance the Company’s ability to manage or control risk or improve audit quality. All such factors will be considered as a whole and no one factor is necessarily determinative. The Audit Committee will also consider the relationship between fees for audit and non-audit services in deciding whether to pre-approve any such services. The Audit Committee may determine for each fiscal year the appropriate ratio between fees for Audit ServicesFees and fees for Audit-Related Services,Fees, Tax Services,Fees, and All Other Services.Fees. The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee has concluded that the provision of non-audit services provided to the Company by Deloitte during the 20212023 fiscal year was compatible with maintaining its independence. | Audit Fees | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 56
| 51 |
TABLE OF CONTENTS | | | The Board unanimously recommends a vote FOR Proposal 2 | | | PROPOSAL 2 – RATIFICATION OF APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | The Board’s Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending June 30, 2022.2024. As a matter of good corporate governance, the Audit Committee submits its selection of Deloitte to our | to our shareholders for ratification and will consider the vote of our shareholders when appointing our independent registered public accounting firm in the future. A representative of Deloitte is expected to attend the Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement, if desired. For additional information regarding the Company’s relationship with Deloitte, please refer to the “Audit Committee Report” and “Audit Fees” sections above.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” PROPOSAL 2. | Proposal 2 − Ratification of Appointment of the Independent Registered Public Accounting Firm | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 57
| 52 |
TABLE OF CONTENTS | | | The Board
unanimously recommends a vote FOR Proposal 3 | | | PROPOSAL 3 – ADVISORY APPROVAL OF THE COMPANY’S
NAMED EXECUTIVE OFFICER COMPENSATION | | The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act require that we permit our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named | executive officers as disclosed in the “Compensation Discussion and Analysis” section, the Summary Compensation Table and accompanying executive compensation tables, and the related narrative disclosure beginning on page 2220. At our 2017 annual meeting, our shareholders approved, on an advisory basis, that an advisory vote on executive compensation should be held annually. Based on such result, our Board determined that the advisory vote on executive compensation will be held every year until the next advisory vote on the frequency of future advisory votes on executive compensation. As discussed in Proposal 4, we are seeking advisory shareholder approval to continue conducting a say-on-pay vote on an annual basis. |
We believe that our compensation programs and policies reflect an overall pay-for-performance culture that is strongly aligned with the interests of our shareholders. We are committed to utilizing a mix of incentive compensation programs that will reward success in achieving the Company’s financial objectives and growing value for shareholders, and continuingwe will continue to refine these incentives to maximize Company performance. The Compensation Committee of the Board has overseen the development of a compensation program designed to achieve pay-for-performance and alignment with shareholder interests, as described more fully in the “Compensation Discussion and Analysis” section beginning on page 2220. The compensation program was designed in a manner that we believe is reasonable, competitive, and appropriately balances the goals of attracting, motivating, rewarding, and retaining our executives. The Company and the Board regularly evaluate our compensation policies and practices to ensure they are meeting our objectives and are consistent with corporate governance best practices. As part of that process, the Compensation Committee and the Board consider the results of our shareholder advisory vote on executive compensation. At our 20202022 annual meeting of shareholders held on September 10, 2020,November 4, 2022, our shareholders approved our fiscal year 20202022 compensation awarded to our NEOs with approximately 92%97% of the votes cast in favor of the proposal. The Compensation Committee will continue to routinely evaluate and enhance or modify our compensation program, as appropriate, after considering the views of our shareholders. For the reasons discussed above and in the “Compensation Discussion and Analysis” section beginning on page 2220, the Board recommends that shareholders vote in favor of the following “say-on-pay” resolution: | “Resolved, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables, narrative discussion and any related material disclosed in this proxy statement, is hereby approved.” | |
Because your vote is advisory, it will not be binding upon the Company, the Board, or the Compensation Committee. However, because we value the views of our shareholders, and the Compensation Committee will continue to consider the outcome of the vote when considering future executive compensation arrangements. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” PROPOSAL 3. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 53 |
TABLE OF CONTENTS | | | The Board unanimously recommends
a vote for ONE YEAR for Proposal 4 | | | PROPOSAL 34 – Advisory ApprovalADVISORY APPROVAL OF THE FREQUENCY OF HOLDING FUTURE ADVISORY VOTES ON THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION | | Pursuant to the Dodd-Frank Act and Section 14A of the Company's Named Executive Officer Compensation | Exchange Act, we are asking our shareholders to vote to approve, on an advisory (non-binding) basis, the frequency of future shareholder advisory votes on the compensation of our named executive officers. | This proposal gives you the opportunity to advise the Board on whether such advisory votes should occur every one year, every two years, or every three years. Our say-on-pay votes currently take place on an annual basis. |
The Board believes that submitting the advisory vote on the compensation of our named executive officers on an annual basis is appropriate for the Company and our shareholders. We view the advisory vote on the compensation of our named executive officers as an additional opportunity for our shareholders to communicate with us regarding their views. Additionally, an annual advisory vote is consistent with our objective of engaging in regular dialogue with our shareholders on corporate governance and executive compensation matters. Further, the Company’s Bylaws state that it is the Company’s practice to provide the shareholders with this opportunity on an annual basis. Accordingly, the Board recommends that shareholders approve holding the advisory vote to approve the compensation of our named executive officers every “ONE YEAR.” You have four choices for voting on this item. You can choose whether the say-on-pay vote should be conducted every ONE YEAR, TWO YEARS or THREE YEARS. You may also abstain from voting on this item, which will not be counted as a vote for any option. You are not voting to approve or disapprove the Board’s recommendation on this item. Although the advisory vote is non-binding, the Board will consider the outcome of the vote when making future decisions about the frequency of holding an advisory vote on executive compensation. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR CONDUCTING FUTURE ADVISORY VOTES ON THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION EVERY “ONE YEAR.” | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 58 | 54 |
TABLE OF CONTENTS INFORMATION REGARDING SECURITY HOLDERS SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT The following table shows the number of shares of common stock beneficially owned by each director and nominee for election as director, by each of the named executive officers, and by all directors and executive officers as a group as of July 19, 2021.September 12, 2023. The number of shares beneficially owned is determined under rules of the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual has either sole or shared voting power or investment power and also any shares that the individual has the right to acquire within sixty days through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes, each person has sole voting and investment power with respect to shares set forth in the following table. | Tony G. Bowen | | | 77,169 | | | — | | | 77,169 | | | * | | | Paul J. Brown | | | 5,700 | | | 80,230 | | | 85,930 | | | * | | | Sean H. Cohan | | | — | | | 3,188 | | | 3,188 | | | * | | | Robert A. Gerard | | | 26,000 | | | 224,553 | | | 250,553 | | | * | | | Thomas A. Gerke | | | 224,631 | | | — | | | 224,631 | | | * | | | Anuradha (Anu) Gupta | | | — | | | 16,207 | | | 16,207 | | | * | | | Richard A. Johnson | | | — | | | 44,007 | | | 44,007 | | | * | | | Jeffrey J. Jones II | | | 485,215 | | | 159,300 | | | 644,515 | | | * | | | Kellie J. Logerwell | | | 13,126 | | | — | | | 13,126 | | | * | | | Mia F. Mends | | | — | | | 3,188 | | | 3,188 | | | * | | | Karen A. Orosco | | | 73,710 | | | — | | | 73,710 | | | * | | | Yolande G. Piazza | | | — | | | 10,613 | | | 10,613 | | | * | | | Victoria J. Reich | | | 4,484 | | | 80,230 | | | 84,714 | | | * | | | Bruce C. Rohde | | | 10,000 | | | 96,376 | | | 106,376 | | | * | | | Matthew E. Winter | | | — | | | 30,059 | | | 30,059 | | | * | | | Christianna Wood | | | 12,580 | | | 110,323 | | | 122,903 | | | * | | | All directors and executive officers as a group (16 persons) | | | 932,615(3) | | | 858,274 | | | 1,790,889 | | | * | |
| Tony G. Bowen | | | 138,250 | | | — | | | 138,250 | | | * | | | Sean H. Cohan | | | — | | | 15,491 | | | 15,491 | | | * | | | Robert A. Gerard | | | 32,000 | | | 267,885 | | | 299,885 | | | * | | | Anuradha (Anu) Gupta | | | — | | | 29,456 | | | 29,456 | | | * | | | Richard A. Johnson | | | 10,000 | | | 59,278 | | | 69,278 | | | * | | | Jeffrey J. Jones II | | | 829,023 | | | 170,880 | | | 999,903 | | | * | | | Kellie J. Logerwell | | | 22,340 | | | — | | | 22,340 | | | * | | | Mia F. Mends | | | — | | | 15,491 | | | 15,491 | | | * | | | Karen A. Orosco(3) | | | 89,733 | | | — | | | 89,733 | | | * | | | Yolande G. Piazza | | | — | | | 23,457 | | | 23,457 | | | * | | | Dara S. Redler | | | 5,110 | | | — | | | 5,110 | | | * | | | Victoria J. Reich | | | 4,484 | | | 98,184 | | | 102,668 | | | * | | | Matthew E. Winter | | | — | | | 44,316 | | | 44,316 | | | * | | | All directors and executive officers as a group (12 persons) | | | 1,036,207 | | | 724,438 | | | 1,765,645 | | | 1.2% | |
*
| Does not exceed 1% based on shares of our common stock outstanding as of July 19, 2021,September 12, 2023, adjusted as required by the rules promulgated by the SEC. |
(1)
| Includes shares that on July 19, 2021September 12, 2023 the specified person had the right to purchase as of September 19, 2021November 11, 2023 pursuant to options granted in connection with the H&R Block, Inc. 2003 Long-Term Executive Compensation Plan (the “2003 Plan”) or the 2013 Plan, as follows: Mr. Gerke, 104,734 shares and Mr. Jones – 273,905 shares. |
(2)
| These amounts reflect share unit balances in the Company’s Deferred Compensation Plan for Directors, the Company’s Deferred Compensation Plan for Executives, the DSU Plan, the 2013 Plan and/or the 2018 Plan. The value of the share units mirrors the value of the Company’s common stock. The share units do not have voting rights. |
(3)
| IncludesMs. Orosco departed the Company on July 1, 2023. The information reported is based on information available to the Company and may not reflect her current beneficial ownership. The shares held by certain family members of such directors and officers or in trusts or custodianships for such members (directly or through nominees) in addition to 378,639 shares which such directors and officersMs. Orosco have been excluded from the right to purchasetotal ownership because she no longer serves as of September 19, 2021 pursuant to options granted in connection with the 2003 Plan and the 2013 Plan.an executive officer. |
| Information Regarding Security Holders | Security Ownership of Directors and Management | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 59
| 55 |
TABLE OF CONTENTS PRINCIPAL SECURITY HOLDERS The following table sets forth the name, address and share ownership of each person or organization known to the Company to be the beneficial owner of more than 5% of the outstanding common stock of the Company. | BlackRock, Inc.
55 East 52nd Street
New York, New York 10055 | | | 20,080,435(2) | | | 13.75% | | | FMR LLC
245 Summer Street
Boston, Massachusetts 02210 | | | 19,158,313(3) | | | 13.12% | | | The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, Pennsylvania 19355 | | | 25,648,933(2)
| | | 14.1%
| | | BlackRock, Inc.
55 East 52nd Street
New York, New York 10022
| | | 21,947,874(3)
| | | 12.1%
| | | Jupiter Asset Management Ltd
The Zig Zag Building
70 Victoria Street
London SW1E 6SQ, United Kingdom
| | | 13,829,55216,900,959(4)
| | | 7.6%11.57%
| | | StateWellington Management Group LLP
280 Congress Street Corporation
State Street Financial Center
One Lincoln Street
Boston, MA 02111Massachusetts 02210 | | | 6,839,2858,436,857(5)
| | | 3.8%5.78%
| |
(1)
| Applicable percentages based on shares of our common stock outstanding as of July 19, 2021.September 12, 2023. |
(2)
| Information as to the number of shares is furnished in reliance on the Schedule 13G/A of BlackRock, Inc. filed on January 26, 2023. The Schedule 13G/A indicates that the number of shares beneficially owned includes 19,226,862 shares with sole voting power and 20,080,435 shares with sole dispositive power. |
(3)
| Information as to the number of shares furnished in reliance on the Schedule 13G/A of FMR LLC filed on February 9, 2023. The Schedule 13G/A indicates that the number of shares beneficially owned includes 19,158,313 shares with sole dispositive power. |
(4)
| Information as to the number of shares is furnished in reliance on the Schedule 13G/A of The Vanguard Group, Inc. filed on February 10, 2021.9, 2023. The Schedule 13G/A indicates that the number of shares beneficially owned includes 151,36371,047 shares with shared voting power, 25,341,82916,674,657 shares with sole dispositive power, and 307,104226,302 shares with shared dispositive power. |
(3)
| Information as to the number of shares is furnished in reliance on the Schedule 13G/A of BlackRock, Inc. filed on January 27, 2021. The Schedule 13G/A indicates that the number of shares beneficially owned includes 19,881,491 shares with sole voting power and 21,947,874 shares with sole dispositive power. |
(4) (5)
| Information as to the number of shares furnished in reliance on the Schedule 13G/A of Jupiter AssetWellington Management LtdGroup LLP filed on February 2, 2021.6, 2023. The Schedule 13G/A indicates that the number of shares beneficially owned includes 13,829,552 shares with shared voting and dispositive power. |
(5)
| Information as to the number of shares furnished in reliance on the Schedule 13G of State Street Corporation filed on February 12, 2021. The Schedule 13G indicates that the number of shares beneficially owned includes 4,741,4807,418,233 shares with shared voting power and 6,839,2858,436,857 shares with shared dispositive power. |
REVIEW OF RELATED PERSON TRANSACTIONS The Board has adopted a Related Party Transaction Approval Policy (the “Policy”), which is administered by the Company’s management and the Governance and NominatingG&N Committee. Under the Policy, the Company’s management will determine whether a transaction meets the requirements of a Related Party Transaction as defined in the Policy. The Governance and NominatingG&N Committee will then review the material facts of the Related Party Transaction and either approve or ratify the transaction (subject to certain exceptions which are deemed pre-approved) taking into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than those generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the transaction. If advance approval of a Related Party Transaction is not feasible, the Governance and NominatingG&N Committee must either ratify the transaction at its next regularly scheduled meeting or the transaction must be rescinded. No director who is a Related Party with respect to a Related Party Transaction may participate in any discussion or approval of such transaction, except that the director must provide all material information concerning the transaction to the Governance and NominatingG&N Committee. A “Related Party Transaction” is any transaction, arrangement or relationship, or any series of transactions, arrangements or relationships in which the Company or any of its subsidiaries is a participant, the amount involved will or may be expected to exceed $120,000 in any fiscal year, and a Related Party has or will have a direct or indirect interest. A “Related Party” under the Policy is any (i) executive officer as designated under Section 16 of the Exchange Act, director, or nominee for election as a director, (ii) greater than 5% beneficial owner of the Company’s common stock, or (iii) immediate family member of any of the foregoing. The Company didhas not participateparticipated in any Related Party Transactions duringsince the beginning of fiscal year 2021,2023, other than those transactions described in the “Compensation Discussion and Analysis” section of this proxy statement.
| Review of Related Person Transactions | H&R Block, 2021Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement 60
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TABLE OF CONTENTS SHAREHOLDER PROPOSALS AND NOMINATIONS We currently intend to hold our 20222024 annual shareholder meeting in early November 2022.2024. For a shareholder proposal to be considered for inclusion in the Company’s proxy statement for the 20222024 annual meeting pursuant to SEC Rule 14a-8, the Company must receive notice at our offices at One H&R Block Way, Kansas City, Missouri 64105, Attention: Corporate Secretary, on or before May 30, 2022.24, 2024. SEC rules and regulations govern the submission of shareholder proposals and our consideration of them for inclusion in next year’s proxy statement and form of proxy. Pursuant to the Company’s Bylaws, for any business not included in the proxy statement for the 20222024 annual meeting to be brought before the meeting by a shareholder, the shareholder must give timely written notice of that business to the Corporate Secretary. To be timely, the notice must be received between May 12, 2022July 6, 2024 and June 11, 2022August 5, 2024 (between 90 and 120 days before the one-year anniversary of the date of the prior year’s annual meeting of shareholders). The notice must contain the information required by the Company’s Bylaws. Similarly, a shareholder wishing to submit a director nomination directly at an annual meeting of shareholders must deliver written notice of the nomination within the time period described in this paragraph and comply with the information and other requirements in our Bylaws relating to shareholder nominations. Our Bylaws permit a group of shareholders (up to 20) who have owned a significant amount of the Company's common stock (at least 3%) for a significant amount of time (at least three years) the ability to submit director nominees (up to 20% of the Board rounded down to the nearest whole director) for inclusion in the Company's proxy materials if the shareholder(s) provides timely written notice of such nomination(s) and the shareholder(s) and the nominee(s) satisfy the requirements specified in the Company's Bylaws. To be timely for inclusion in the Company's proxy materials for the 20212024 annual meeting, the notice must be received between May 12, 2022July 6, 2024 and June 11, 2022August 5, 2024 (between 90 and 120 days before the one-year anniversary of the date of the prior year’s annual meeting of shareholders). The notice must contain the information required by the Company’s Bylaws, and the shareholder(s) and nominee(s) must comply with the information and other requirements in our Bylaws relating to the inclusion of shareholder nominees in the Company's proxy materials. In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to our Corporate Secretary at the address set forth below that sets forth the information required by Rule 14a-19 under the Exchange Act no later than September 4, 2024 unless the required information has been provided in a preliminary or definitive proxy statement previously filed by the shareholder. If the date of the 2024 annual meeting is changed by more than 30 calendar days from November 3, 2024, then such notice must be provided by the later of 60 calendar days prior to the date of the 2024 annual meeting or the 10th calendar day following the day on which the Company publicly announces the date of the 2024 annual meeting. In order to comply with Rule 14a-19, the notice must be postmarked or transmitted electronically on or before the applicable deadline. The notice requirements under Rule 14a-19 are in addition to the applicable advance notice requirements under the Company's Bylaws as described above. A proxy may confer discretionary authority to vote on any matter at a meeting if we do not receive notice of the matter within the time frames described above. A copy of the Company’s Bylaws is available on our website at https://investors.hrblock.com/corporate-governance, or upon request to: H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105, Attention: Corporate Secretary. The Chair of the meeting may exclude matters that are not properly presented in accordance with the foregoing requirements. | Shareholder Proposals and Nominations | H&R Block 2021 Proxy Statement 61
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING WHY DID I RECEIVE A NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PRINTED PROXY MATERIALS? Pursuant to rules adopted by the SEC, we are making this proxy statement and our 20212023 Annual Report available to shareholders electronically. Unless you have already requested to receive a printed set of proxy materials, you will receive an “Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on September 9, 2021”November 3, 2023” (the “Notice”), which contains instructions on how to access proxy materials and vote your shares via the internet or, if you prefer, to request a printed set of proxy materials at no cost to you. On or about July 29, 2021,September 21, 2023, we mailed the | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 57 |
TABLE OF CONTENTS Notice or, for shareholders who have already requested to receive a printed set of proxy materials, this proxy statement, an accompanying proxy card, and our 20212023 Annual Report, to our shareholders of record. All shareholders will be able to access this proxy statement and our 20212023 Annual Report on the website referred to in the Notice or request to receive printed copies of the proxy materials. HOW CAN I ELECTRONICALLY ACCESS THE PROXY MATERIALS? The Notice provides you with instructions on how to view our proxy materials for the Annual Meeting electronically. The website on which you will be able to view our proxy materials will also allow you to choose to receive future proxy materials electronically, which will save us the cost of printing and mailing documents to you. If you choose to receive future proxy materials electronically, you will receive an email next year with instructions containing a link to the proxy voting site. Your election to receive proxy materials electronically will remain in effect until you terminate it. HOW CAN I OBTAIN A FULL SET OF PRINTED PROXY MATERIALS? The Notice will provide you with instructions on how to request to receive printed copies of the proxy materials. You may request printed copies up until one year after the date of the meeting. HOW DO I VOTE? In order to vote, you will need the Control Number included on your proxy card, voting instruction card, or Notice you received. Each shareholder has a unique Control Number so we can ensure that all voting instructions are genuine and prevent duplicate voting. Depending on the number of accounts in which you hold the Company’s common stock, you may receive and need to vote more than one Control Number. If you submit your proxy by internet or telephone, you do not need to return a proxy card. You can vote by any of the methods below prior to the meeting and still attend the virtual Annual Meeting. Whether or not you expect to attend the Annual Meeting virtually, please vote in advance of the meeting by one of the following methods. If you are a registered shareholder, there are four different ways you can vote: ▪ | By Internet – You can vote via the internet at www.proxyvote.com by following the instructions provided (you will need the Control Number); |
▪ | By Telephone – You can vote by telephone by calling the toll-free telephone number indicated on your proxy card or voting instruction card (you will need the Control Number); |
▪ | By Mail – If you received your proxy materials by mail, you can vote by signing, dating and returning the accompanying proxy card; or |
▪ | At the Virtual Meeting – You can also vote during the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/HRB2021HRB2023 and following the instructions (you will need the Control Number). A vote at the Annual Meeting will revoke any prior votes. |
When your proxy is properly submitted, your shares will be voted as you indicate. If you do not indicate your voting preferences, the appointed proxies (Thomas A. Gerke(Dara S. Redler and Scott W. Andreasen)Katharine M. Haynes) will vote your shares FOR each of the director nominees included in Proposal 1, and FOR Proposals 2 and 3.3, and for ONE YEAR for Proposal 4. If your shares are owned in joint names, all joint owners must vote by the same method, and if joint owners vote by mail, all of the joint owners must sign the proxy card. The deadline for voting by telephone or via the internet, except with respect to shares held through the H&R Block Retirement Savings Plan as described below, is 11:59 p.m. Eastern Time on September 8, 2021.November 2, 2023. | Questions and Answers About the Annual Meeting and Voting | H&R Block 2021 Proxy Statement 62
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If you are a beneficial owner of shares held in street name, you may vote by following the voting instructions provided by your broker, bank, or other nominee, and your broker, bank, or other nominee should vote your shares as you have directed. If your shares are held through the H&R Block Retirement Savings Plan, you may also vote as set forth above, except that Plan participants may not vote their Plan shares at the Annual Meeting. If you provide voting instructions via the internet, by telephone or by written proxy card, Fidelity Management Trust Company, the Plan’s Trustee, will vote your shares as you have directed. If you do not provide specific voting instructions, the Trustee will vote your shares in the same proportion as shares for which the Trustee has received instructions. Due to the structure of the virtual meeting site, Plan participants will technically have the ability to submit votes for Plan shares during the Annual Meeting, but votes submitted | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 58 |
TABLE OF CONTENTS by Plan participants during the Annual Meeting will not be counted or revoke their prior instructions. Please note that you must submit voting instructions to the Trustee no later than September 6, 2021October 31, 2023 at 11:59 p.m. Eastern Time in order for your shares to be voted by the Trustee at the Annual Meeting. Your voting instructions will be kept confidential by the Trustee. HOW DO I ATTEND THE ANNUAL MEETING? We will be hosting the Annual Meeting online only. A summary of the information you need to attend online is provided below. ▪ | Any holder of record as of the close of business on July 9, 2021,September 11, 2023, may attend and vote at the Annual Meeting by visiting www.virtualshareholdermeeting.com/HRB2021HRB2023. If you want to vote during the Annual Meeting any shares you hold in street name, you must obtain instructions from your broker, bank, or other nominee. |
▪ | The live audio webcast of the Annual Meeting will begin promptly at 8:00 a.m. (CDT). Online access to the audio webcast will open 15 minutes prior to the start of the Annual Meeting to allow time for you to log-in and test your device's audio system. We encourage you to access the meeting in advance of the designated start time. |
▪ | You are entitled to attend and participate in the Annual Meeting online only if you were a registered shareholder as of July 9, 2021,September 11, 2023, the record date, or if you hold a valid proxy for the Annual Meeting. |
▪ | Please have the Control Number we have provided to you to join the Annual Meeting. |
▪ | Instructions on how to attend and participate in the Annual Meeting, including how to demonstrate proof of stock ownership, are available at www.virtualshareholdermeeting.com/HRB2021HRB2023. |
WHY IS THE ANNUAL MEETING BEING HELD VIRTUALLY? We are pleased this year to again conduct the Annual Meeting solely online via the Internet through a live audio webcast and online shareholder tools. We continue to use the virtual annual meeting format to facilitate shareholder attendance and participation by leveraging technology to communicate more effectively and efficiently with our shareholders. This format empowers shareholders to participate from any location around the world at no cost. We have designed the virtual format to enhance shareholder access and participation and protect shareholder rights. For example: ▪ | We Encourage Questions. Our shareholders have multiple opportunities to submit questions for the meeting. Shareholders may submit a question online prior to or during the meeting by following the instructions at www.virtualshareholdermeeting.com/HRB2021HRB2023. During the meeting, we will answer as many shareholder-submitted questions that are submitted in accordance with the meeting rules of conduct as time permits. |
▪ | We Believe in Transparency. Although the live webcast is available only to shareholders, following completion of the Annual Meeting answers to questions submitted in accordance with the meeting rules of conduct will be posted to our Investor Relations website at https://investors.hrblock.com and remain for at least sixty days. |
▪ | We Proactively Take Steps to Facilitate Your Engagement. We offer separate engagement opportunities with shareholders on appropriate matters of governance or other relevant topics as outlined under the Communications with the Board section of this proxy statement. In addition, we offer live technical support for all shareholders attending the meeting. |
WHAT IF I HAVE TECHNICAL DIFFICULTIES OR TROUBLE ACCESSING THE VIRTUAL MEETING WEBSITE? We will have support available to assist shareholders with any technical difficulties they may have accessing or hearing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log-in page. | Questions and Answers About the Annual Meeting and Voting | H&R Block 2021 Proxy Statement 63
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WHAT AM I VOTING ON? You are voting on threefour items of business at the Annual Meeting: ▪ | Election of the tennine nominees for director named in this proxy statement (Proposal 1); |
▪ | Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 20222024 (Proposal 2); and |
▪ | Advisory approval of the Company’s named executive officer compensation (Proposal 3); and |
▪ | Advisory approval of the frequency of holding future advisory votes on the Company’s named executive officer compensation (Proposal 4). |
| H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 59 |
TABLE OF CONTENTS WHO IS ENTITLED TO VOTE? Shareholders of record as of the close of business on July 9, 2021September 11, 2023, are entitled to vote at the Annual Meeting. Each share of H&R Block common stock is entitled to one vote. WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND AS A BENEFICIAL OWNER? If your shares are registered directly in your name with the Company’s transfer agent, EQ Shareowner Services (“EQ”), you are considered a “registered shareholder” and are considered, with respect to those shares, the “shareholder of record.” If you are a shareholder of record, the Notice or proxy materials were sent to you directly by the Company, and you may vote by any of the methods described above under “How Do I Vote?”. If your shares are registered in the name of a stock brokerage account or by a broker, bank, or other nominee on your behalf (referred to as being held in “street name”) or if you hold shares through the H&R Block Retirement Savings Plan, you are considered a “beneficial owner” of shares held in street name, and the broker, bank, or other nominee forwarded the Notice or proxy materials to you. As the beneficial owner, you have the right to direct your broker, bank, or other nominee holding your shares how to vote and you are also invited to attend the Annual Meeting virtually. However, since you are not a shareholder of record, you may not vote these shares at the Annual Meeting and you must instead instruct the broker, bank, or other nominee how to vote your shares using the voting instruction form provided by such broker, bank or other nominee. WHAT ARE THE VOTING RECOMMENDATIONS OF THE BOARD OF DIRECTORS AND THE VOTING REQUIREMENTS? Our Board of Directors recommends that you vote your shares as follows: | 1. Election of Directors. | | | FOR each
Nominee | | | | | | No | | | The affirmative vote of a majority of shares present in person or represented by proxy, and entitled to vote on the matter, is necessary for election or for approval of each of the proposals. | | | Abstentions have the same effect as votes AGAINST the relevant proposal. For Proposal 4, an abstention will not be counted as a vote for any option.
Broker non-votes have no impact on the outcome of the vote for any of the proposals. | | | 2. Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2022.2024. | | | FOR | | | | | | Yes | | | 3. Advisory approval of the Company’s named executive officer compensation. | | | FOR | | | | | | No | | | 4. Advisory approval of the frequency of holding future advisory votes on the Company's named executive officer compensation. | | | ONE YEAR | | | | | | No | |
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Broker Discretionary Voting Brokers holding shares on behalf of beneficial owners are prohibited from exercising discretionary voting authority for beneficial owners who have not provided voting instructions on “non-routine” proposals, resulting in so-called “broker non-votes.” Brokers may vote without instruction only on “routine” proposals. Proposal 2, the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm, is the only routine proposal on the ballot for the Annual Meeting and the only proposal on the ballot for which broker discretionary voting is permitted. All other proposals are non-routine. If you hold your shares with a broker, your shares will not be voted on non-routine proposals unless you give voting instructions to such broker. | H&R Block, Inc.| Notice of Annual Meeting of Shareholders and 2023 Proxy Statement | 60 |
TABLE OF CONTENTS Voting Requirements and Effect of Abstentions and Broker Non-Votes For each matter to be voted upon at the Annual Meeting, shareholders may vote “for,” “against,” or “abstain,” except for Proposal 4, for which shareholders may vote “one year,” “two years,” “three years,” or “abstain.” For each of the proposals, the affirmative vote of a majority of shares present in person or represented by proxy, and entitled to vote on the matter, is necessary for election or approval. For Proposal 4, the option of one year, two years, or three years that receives the affirmative vote of a majority of shares present in person or represented by proxy, and entitled to vote thereon, will be the frequency for the advisory vote that has been recommended by the shareholders. In the event that no option receives such majority vote, the Company will consider the option that receives the most votes to be the option selected by shareholders. The votevotes on ProposalProposals 3 and 4, the approval of the Company’s named executive officer compensation is aand the approval of the frequency of future advisory votes on the Company's named executive officer compensation, are non-binding advisory votevotes only. Shares represented in person or by a proxy that directs that the shares abstain from voting on a matter are deemed to be represented at the meeting as to that particular matter and have the same effect as a vote against that proposal.proposal, except for Proposal 4, for which an abstention will not be counted as a vote for any option. Broker non-votes have no impact on the proposals. If a submitted proxy does not specify how to vote, the shares represented by that proxy will be considered to be voted FOR each of the director nominees included in Proposal 1, and FOR Proposals 2 and 3.3, and for ONE YEAR for Proposal 4. MAY I CHANGE MY VOTE? After your initial vote, you may revoke your proxy and change your vote (i) any time prior to the voting deadline via the internet or by telephone (only your latest internet or telephone proxy submitted prior to the voting deadline for the Annual Meeting will be counted), (ii) by signing and returning a new proxy card with a later date prior to the Annual Meeting, or (iii) by attending the Annual Meeting and voting at www.virtualshareholdermeeting.com/HRB2021HRB2023. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the Annual Meeting or specifically request in writing that your prior proxy be revoked. If your shares are held in street name by a broker, bank, or other nominee, you must contact that nominee to change your vote. DO SHAREHOLDERS HAVE CUMULATIVE VOTING RIGHTS WITH RESPECT TO THE ELECTION OF DIRECTORS? No, shareholders do not have cumulative voting rights with respect to the election of directors. WHAT CONSTITUTES A QUORUM? As of the record date 181,843,234146,195,523 shares of the Company’s common stock were issued and outstanding. A majority of the outstanding shares entitled to vote at the Annual Meeting, represented in person or by proxy, will constitute a quorum. Abstentions and broker non-votes will be counted as present and entitled to vote for purposes of determining a quorum. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE “IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON SEPTEMBER 9, 2021”NOVEMBER 3, 2023”? It means your shares are held in more than one account. You should vote all of your shares. WHAT IS HOUSEHOLDING? As permitted by the SEC, we are delivering only one copy of this proxy statement to shareholders residing at the same address, unless the shareholders have notified us of their desire to receive multiple copies of the proxy statement. This practice is known as householding. The Company will promptly deliver, upon request, a separate copy of the proxy statement to any shareholder residing at an address to which only one copy was mailed. Requests for additional copies for the current year or future years should be directed to the Corporate Secretary, H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105, or by telephone at (816) 854-4288. Shareholders of record residing at the same address and currently receiving multiple copies of the proxy statement may contact our registrar and transfer agent, EQ, to request that only a single copy of the proxy statement be mailed in the future. You can contact EQ by phone at (888) 213-0968 or (651) 450-4064, or by mail at 1110 Centre Point Curve, Suite 101, Mendota Heights, Minnesota 55120-4100. | Questions and Answers About theH&R Block, Inc.| Notice of Annual Meeting of Shareholders and Voting | H&R Block 20212023 Proxy Statement 65
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TABLE OF CONTENTS WHO WILL BEAR THE COST OF THIS SOLICITATION AND HOW WILL PROXIES BE SOLICITED? The Company is making this solicitation on behalf of the Company’s Board of Directors and will pay the entire cost of this proxy solicitation, including the expense of preparing the proxy solicitation materials for the Annual Meeting and mailing the Notice and, as applicable, the proxy solicitation materials for such meeting. Following the mailing of these materials, directors, officers, and employees of the Company may solicit proxies by telephone, email, or other personal contact; such individuals will not receive compensation or reimbursement for these activities. Additionally, the Company has retained Okapi Partners LLC to assist in the solicitation of proxies on behalf of the Board for a fee of $25,000$35,000 plus reimbursement of reasonable expenses. Further, brokers and other custodians, nominees, and fiduciaries will be requested to forward the Notice and printed proxy materials to their principals, and the Company will reimburse them for the expense of doing so. HOW CAN I EXAMINE A LIST OF SHAREHOLDERS? Shareholders at the close of business on the record date may examine a list of all shareholders as of the record date for ten days preceding the meeting, at our offices at One H&R Block Way, Kansas City, Missouri 64105, and electronically during the meeting at www.virtualshareholdermeeting.com/HRB2021HRB2023 when you enter the Control Number included on your proxy card, voting instruction card or Notice you received. WHO SHOULD I CONTACT IF I HAVE QUESTIONS? If you have questions about the Annual Meeting or voting (other than technical questions, which should be directed as noted above under the question “What if I have technical difficulties or trouble accessing the virtual meeting website?”), please contact our Corporate Secretary at (816) 854-4288 or by email to corporatesecretary@hrblock.com. WHAT IS THE COMPANY’S INTERNET ADDRESS? The Company’s internet address is www.hrblock.com. The Company’s filings with the SEC are available free of charge on the Company'sCompany’s Investor Relations page at https://investors.hrblock.com/financial-information/sec-filings, and may also be found at the SEC’s website, www.sec.gov. The Board of Directors knows of no other matters which will be presented at the meeting, but if other matters do properly come before the meeting, it is intended that the persons named in the proxy will vote according to their best judgment. | | | | By Order of the Board of Directors, | | | | | | | | | | | | SCOTT W. ANDREASENKATHARINE M. HAYNES
| | | | | | Vice President and Corporate Secretary | |
| Questions and Answers About theH&R Block, Inc.| Notice of Annual Meeting of Shareholders and Voting | H&R Block 20212023 Proxy Statement 66
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