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We have a majority of independent directors serving on our Board, and each of the committees of our Board are comprised solely of independent directors. Our Board has affirmatively determined that Messrs. Bickett, Clarke, Hagerty, Rao, and Throop, and Mses. Farrington, Mantia, and Rosen are independent directors under the applicable rules of the NYSE after considering, among other things, their interests, as applicable, in any related party transactions described below under “Certain Relationships and Related Party Transactions” on page 63. |
| INDEPENDENT DIRECTORS |
| 89% |
| of Directors are Independent |
Board Leadership Structure
Under our Board’s current leadership structure, we have an executive Chair and an independent Lead Director.
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| David D. Ossip CEO and Chair | 
| Gerald C. Throop Lead Director |
•Mr. Ossip, our CEO, serves as Chair of our Board. •He presides over meetings of our Board and holds such other powers and carries out such other duties as are customarily carried out by the chair of a board of directors. •Our Board believes that the current Board leadership structure, which includes a Lead Director, provides effective independent oversight of management while allowing our Board and management to benefit from Mr. Ossip’s leadership and years of managerial and strategic experience. •We believe Mr. Ossip is best positioned to identify strategic priorities, lead critical discussions, and execute our strategy and business plans, and that he possesses detailed in-depth knowledge of the issues, opportunities, and challenges facing Dayforce. •Our Board believes that Mr. Ossip’s combined role enables strong leadership, creates clear accountability, facilitates information flow between management and our Board, and enhances our ability to communicate our message and strategy clearly and consistently to our stockholders. | •Mr. Throop was elected by the independent directors to serve as our independent Lead Director. •He is empowered with and exercises robust, well-defined duties as set forth in our Corporate Governance Guidelines, a copy of which is available on our website under "Governance Documents" on the Corporate Governance section of our Investor Relations page at www.dayforce.com. •Mr. Throop advises the Chair concerning matters for the Board to consider and information to be provided to the Board, including through the retention of advisors and consultants who report directly to the Board, and collaborates with the Chair concerning meeting agendas and schedules. •He presides at meetings of the Board in the absence of, or upon the request of, the Chair and calls and presides over all executive sessions of independent directors. •He also serves as a liaison and supplemental channel of communication between independent directors and the Chair, and as the principal liaison for consultation and communication between stockholders and independent directors. |
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2024 PROXY STATEMENT |
Oversight Responsibilities
APPROVAL OF CERIDIAN HCM HOLDING INC. GLOBAL EMPLOYEE STOCK PURCHASE PLANOur Board meets at least quarterly, and works closely with management to provide oversight and counsel related to long-term strategy, significant business risks and opportunities, and operational performance. It also engages directly with stockholders to gather feedback, oversees CEO succession planning, and maintains compliance with our robust corporate governance practices.
AtMeetings of the Board of Directors and Stockholders
Our Board held five meetings in Fiscal Year 2023. Each director attended at least 90% of all meetings of the Board and the committees on which they served that were held during Fiscal Year 2023.
All directors are encouraged to attend our annual meeting of stockholders. Our 2023 Annual Meeting was held virtually and nine of the ten directors serving at that time were in attendance.
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BOARD MEETINGS | | COMMITTEE MEETINGS | | ATTENDANCE |
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5 | | 26 | | 90% |
Board meetings in Fiscal Year 2023 | | Meetings of all Board committees in Fiscal Year 2023 | | of all meetings of the Board and committees on which they served |
Committees of the Board of Directors
Our Board has established an Acquisition and Finance Committee, Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee. Each committee operates under a charter that has been approved by our Board and has the composition and responsibilities described below. Members serve on these committees until their resignations or until otherwise determined by our Board. The charter of each committee is available on our website under "Governance Documents" on the Corporate Governance section of our Investor Relations page at www.dayforce.com.
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AUDIT COMMITTEE
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Meetings held in 2023: 15
Purpose: The primary purpose of our Audit Committee is to assist the Board’s oversight of, among other things: •Audits of our financial statements; •The quality and integrity of our financial statements and related disclosure; •Our policies and practices with respect to risk assessment and risk management (except with respect to those risks for which oversight is assigned to another Board committee); •The conduct and systems of internal control over financial reporting and disclosure controls and procedures; •The qualifications, engagement, compensation, independence, and performance of our independent auditor; •The performance of our internal audit function; and •The Company’s policies and practices with respect to risk assessment and risk management, in conjunction with the management team.
Composition: The Audit Committee is currently composed of Mses. Farrington, Mantia, and Rosen and Mr. Throop. Mr. Throop serves as chair of the Audit Committee, and each of Mses. Farrington, Mantia, and Rosen and Mr. Throop qualify as an “audit committee financial expert” as such term has been defined by the Securities and Exchange Commission ("SEC") in Item 407(d) of Regulation S-K. Our Board has affirmatively determined that each of Mses. Farrington, Mantia, and Rosen and Mr. Throop qualify as audit committee financial experts and meet the definition of an “independent director” for the purposes of serving on the Audit Committee under applicable NYSE rules and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (“Exchange Act”). The Audit Committee is governed by a charter that complies with the rules of the NYSE.
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2024 PROXY STATEMENT |
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COMPENSATION COMMITTEE
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Meetings held in 2023: 5
Purpose: The primary purpose of our Compensation Committee is to assist the Board in overseeing our management compensation policies and practices, including, among other things: •Determining and approving the compensation of our executive officers; •Reviewing and approving incentive compensation awards to executive officers; •Making recommendations to the Board with respect to compensation of our directors; •Reviewing and approving selection of peer companies used for compensation analysis; and •Making recommendations to the Board with respect to all equity-based compensation plans.
The Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the committee. In particular, the Compensation Committee may delegate the approval of certain decisions relating to equity compensation to a subcommittee consisting solely of members of the Compensation Committee who are “Non-Employee Directors” for the purposes of Rule 16b-3 under the Exchange Act.
Composition: Our Compensation Committee is composed of Messrs. Bickett, Clarke, and Hagerty, and Ms. Rosen. Mr. Bickett serves as chair of the Compensation Committee. All members of the Compensation Committee meet the required independence standards under applicable NYSE and SEC rules. The Compensation Committee is governed by a charter that complies with the rules of the NYSE.
Compensation Committee Interlocks and Insider Participation No member of our Compensation Committee has ever been one of our executive officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.
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CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
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Meetings held in 2023: 4
Purpose: The primary purposes of our Corporate Governance and Nominating Committee are to, among other things: •Make recommendations to the Board regarding nomination of individuals as members of the Board and its committees; •Assist the Board with identifying individuals qualified to become Board members; •Take responsibility for management succession planning for non-CEO senior management; •Provide oversight of policies and programs on issues of social responsibility and environmental sustainability; and •Determine corporate governance practices and related matters.
Composition: Our Corporate Governance and Nominating Committee is comprised of Mses. Farrington and Mantia and Messrs. Bickett and Rao. Ms. Farrington serves as chair of the Corporate Governance and Nominating Committee. Our Board has affirmatively determined that each of Mses. Farrington and Mantia and Messrs. Bickett and Rao meet the definition of an “independent director” for purposes of serving on the Corporate Governance and Nominating Committee under applicable NYSE rules. The Corporate Governance and Nominating Committee is governed by a charter that complies with the rules of the NYSE.
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ACQUISITION AND FINANCE COMMITTEE |
Meetings held in 2023: 2
Purpose: The primary purpose of our Acquisition and Finance Committee is to assist the Board’s oversight of, among other things, reviewing and providing direction regarding matters involving capital expenditures, investments, acquisitions, dispositions, financing activities, and other related matters. The Acquisition and Finance Committee meets on an as-needed basis to fulfill the responsibilities set out in its charter.
Composition: The Acquisition and Finance Committee is composed of Messrs. Bickett, Hagerty, and Rao and Ms. Farrington. Mr. Hagerty serves as chair.
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2024 PROXY STATEMENT |
Board’s Role in Risk Oversight
Our Board works directly with management to review Dayforce’s major areas of risk, assess management’s strategies for adequately managing risk, and determine the levels of risk appropriate for Dayforce.
The committees of the Board support the Board in exercising its risk oversight duties by overseeing the risks within the purview of their respective substantive areas. While the Audit Committee has responsibility to review corporate practices and policies with regard to risk management, the chairs of the Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee report on any committee-level risk-related discussions to the Board at each regular meeting of the Board, and the Acquisition and Finance Committee reports regularlyto the Board summarizing the committee’s actions and any significant issues considered by the committee. This reporting process enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.
A breakdown of the type of risks and risk management activities overseen by each committee is provided here:
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Audit Committee |
| Compensation Committee |
•Design and operation of the Enterprise Risk Management process •Design and operation of the Company's internal controls over financial reporting •Ongoing assessment, monitoring, and mitigation of enterprise risks, with a focus on mission-critical risks including in the areas of cybersecurity, information technology, operational resilience, and privacy •Operation of a risk-based internal audit function
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| •Compensation policies and practices impacting recruitment and retention of executive talent, including reviewing and approving the annual compensation risk assessment conducted by management |
Corporate Governance and Nominating Committee |
| Acquisition and Finance Committee |
•Corporate governance and related matters, including Board composition and refreshment, succession planning for non-CEO senior management, and ESG related items |
| •Capital expenditures, investments, acquisitions, dispositions, financing activities, and other related matters not addressed by the entire Board |
Additional information regarding the responsibilities of each committee is available in the “Committees of the Board of Directors” section on page 17 of this Proxy Statement, and in the charters of each of the Board committees.
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2024 PROXY STATEMENT |
Code of Conduct
We have a Code of Conduct that applies to all employees, contractors, officers, and directors of Dayforce, Inc. and its majority-owned subsidiaries and controlled affiliates. A copy of the Code of Conduct is available on our website under "Governance Documents" on the Corporate Governance section of our Investor Relations page at www.dayforce.com. Any amendments to or waivers from our Code of Conduct granted to directors or executive officers will be disclosed on our website.
Corporate Governance Guidelines
Our Board has adopted corporate governance guidelines in accordance with the corporate governance rules of the NYSE and the TSX, which serve as a flexible framework within which our Board and its committees operate. These guidelines cover several areas, including Board composition, roles of the Chair and Lead Director, director nominations and Board membership criteria, Board meetings and executive sessions, Board committees, management succession, Board compensation, expectations of directors, Board performance evaluations, and access to management and outside advisors. A copy of our Corporate Governance Guidelines is posted on our website under "Governance Documents" on the Corporate Governance section of our Investor Relations page at www.dayforce.com.
Director Service on Other Public Company Boards
We value the experience our directors bring from the other boards on which they serve, but also recognize that those boards may present demands on a director’s time and availability and may present conflicts or legal issues. Accordingly, under our Corporate Governance Guidelines, a director is required to receive approval from the chair of the Corporate Governance and Nominating Committee and the Corporate Secretary prior to joining a new board of directors or undertaking other significant commitments involving affiliation with other businesses or governmental agencies. The guidelines state that no director may sit on more than five public company boards (including the Company’s), and no director who is a CEO of a public company may sit on the board of more than two public companies besides the public company for which they are CEO. As of the time of mailing of this Proxy Statement, all directors satisfy the “overboarding” guidelines.
No-Hedging and No-Pledging Policy
Our Insider Trading and Tipping Policy prohibits the hedging or pledging of Dayforce stock by our directors or executive officers unless an exception is granted by the Board. No exceptions to the policy were granted in 2023.
Director Evaluations
Our Board and Board committees conduct annual self-assessments of the effectiveness of the Board, Board committees, and our directors. The evaluation process was developed by and is administered under the direction of the Corporate Governance and Nominating Committee. The assessment is facilitated through a questionnaire process and is designed to elicit feedback with respect to areas such as Board and committee composition, governance, communication, culture, risk, and strategy. Responses are discussed with each of the Board committees and the full Board. Recommendations are discussed with the Board and within the appropriate Board committees, and then considered and implemented as appropriate.
Management Development and Succession Planning
One of the primary responsibilities of the Board is to ensure that Dayforce has a high performing leadership team. To meet that goal, the Board, the Corporate Governance and Nominating Committee, and management share responsibility for management development and succession planning.
The Board is responsible for management succession planning for the CEO. Our Lead Director and each Board committee chair, in consultation with the CEO, periodically discuss CEO succession planning, including the policies and principles for evaluating performance and selecting a successor, and policies regarding succession in the event of an emergency or the retirement of the CEO. The Corporate Governance and Nominating Committee is
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2024 PROXY STATEMENT |
responsible for non-CEO succession planning, which includes periodic discussions with our Chief Human Resources Officer and CEO related to succession plans for certain members of Dayforce's senior management team who serve on an internal committee to guide operations of the organization (the "Executive Operating Committee"). The Chief Human Resources Officer and senior human resources leaders work with functional leaders across the Dayforce organization to develop and implement programs to attract, assess, and develop talented individuals for potential future senior leadership positions, including those on the Executive Operating Committee level.
Indemnification of Directors and Officers
Our restated certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law (“DGCL”).
We have entered into indemnification agreements with each of our directors. These indemnification agreements provide the directors with contractual rights to indemnification and expense advancement and reimbursement to the fullest extent permitted under the DGCL, subject to certain exceptions contained in those agreements.
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2024 PROXY STATEMENT |
Our Board believes that compensation for directors should be competitive, aligned with stockholders, and reflect the highest standards of corporate governance. Our compensation program for directors is reviewed periodically by our Compensation Committee to ensure that the program remains competitive.
Current Director Compensation Program
The current director compensation program for non-employee directors consists of:
•An annual cash retainer of $50,000;
•Annual equity award grants of $250,000;
•Annual cash committee chair fees (Audit Committee, $20,000; Compensation Committee, $12,500; Corporate Governance and Nominating Committee, $7,500; Acquisition and Finance Committee, $7,500);
•Annual cash Lead Director fee of $50,000; and
•One-time time-based restricted stock unit (“RSU”) grant with a value of $200,000 made to non-employee directors upon appointment to the Board.
The annual cash retainer and annual cash committee chair and Lead Director fees are paid pro-rata quarterly. Directors are given the flexibility to elect to receive any portion of their annual cash retainer or annual cash committee chair and Lead Director fees in the form of RSUs. Annual equity award grants vest pro-rata quarterly over one year following the date of grant. The one-time RSU award granted upon appointment to the Board vests pro-rata annually over a three-year period following the date of grant. In Fiscal Year 2023, directors who were Canadian taxpayers had the ability to defer issuance of the Common Stock underlying their vested RSUs pursuant to the terms of our Dayforce, Inc. 2018 Equity Incentive Plan (the "2018 EIP") and the underlying RSU award agreement.
Our directors may be reimbursed for approved director education courses and out-of-pocket travel expenses incurred in connection with attendance at Board and Board committee meetings and other Board-related activities.
Director Stock Ownership Principles
Stock ownership and stockholder alignment are key principles of our director compensation program and are reinforced from a director’s appointment to the Board until their service concludes. Therefore, we provide for annual elections where directors may receive any portion of their annual cash fees in the form of RSU awards and provide a one-time RSU award upon a non-employee director’s appointment to the Board.
Stock Ownership Guidelines
The Compensation Committee has established Stock Ownership Guidelines to encourage equity ownership by our executive officers and non-employee directors to reinforce the link between their financial interests and those of our stockholders. A person covered by the Stock Ownership Guidelines will have five years from the later of February 27, 2020, or the date the individual becomes a covered person to satisfy the stock ownership requirements.
We set the Stock Ownership Guidelines for our non-employee directors based on a multiple of their annual base cash retainer as of December 31 of each year. Qualifying shares under the Stock Ownership Guidelines consist of:
•shares of Common Stock or Exchangeable Shares held directly or beneficially owned by the non-employee director; and
•vested time-based vesting RSUs held directly by the non-employee director and granted to the non-employee director under a Dayforce equity plan.
Under our Stock Ownership Guidelines, each non-employee director is expected to own an amount of our stock equal in value to five times their annual base cash retainer. As of December 31, 2023, each of our non-employee directors complied with the requirements of the Stock Ownership Guidelines.
Discussion of the Stock Ownership Guidelines as they apply to the NEOs is contained in the CD&A on page 39 of this Proxy Statement.
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2024 PROXY STATEMENT |
Director Compensation for Fiscal Year 2023
The following table presents the total annual compensation for each person who served as a member of our Board during 2023, other than Mr. Ossip and Leagh E. Turner, former Co-Chief Executive Officer and a former member of the Board, who received no additional compensation for their service as members of our Board during 2023.
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Name | | Fees
Earned in Cash ($)(1)(2) | Stock Awards
($)(2)(3)(4) | | Total ($) |
Brent B. Bickett | | | $ | 62,500 | | | | $ | 250,000 | | | | $ | 312,500 | | |
Ronald F. Clarke | | | $ | 50,000 | | | | $ | 250,000 | | | | $ | 300,000 | | |
Deborah A. Farrington | | | $ | 57,500 | | | | $ | 250,000 | | | | $ | 307,500 | | |
Thomas M. Hagerty | | | $ | 57,500 | | | | $ | 250,000 | | | | $ | 307,500 | | |
Linda P. Mantia | | | $ | 50,000 | | | | $ | 250,000 | | | | $ | 300,000 | | |
Ganesh B. Rao | | | $ | 50,000 | | | | $ | 250,000 | | | | $ | 300,000 | | |
Andrea S. Rosen | | | $ | 50,000 | | | | $ | 250,000 | | | | $ | 300,000 | | |
Gerald C. Throop | | | $ | 120,000 | | | | $ | 250,000 | | | | $ | 370,000 | | |
(1)Represents cash fees earned in Fiscal Year 2023. Our directors are paid their cash fees in installments in arrears quarterly.
(2)In May 2023, Mr. Bickett elected to receive all $300,000 of his 2023 annual cash and equity compensation and his $12,500 Compensation Committee Chair fee in the form of RSUs for a total of 5,234 RSUs.
In May 2023, Mr. Clarke elected to receive $250,000 of his 2023 annual equity compensation in the form of RSUs, for a total of 4,187 RSUs. He also elected to have $50,000 of his 2023 annual cash compensation paid in the form of cash.
In May 2023, Ms. Farrington elected to receive $250,000 of her 2023 annual equity compensation in the form of RSUs for a total of 4,187 RSUs, and all $50,000 of her annual cash compensation and all $7,500 of her Corporate Governance and Nominating Chair fee in the form of cash.
In May 2023, Mr. Hagerty elected to receive all $300,000 of his 2023 annual cash and equity compensation and his $7,500 Acquisition and Finance Committee Chair fee in the form of RSUs, for a total of 5,150 RSUs.
In May 2023, Ms. Mantia elected to receive all $300,000 of her 2023 annual cash and equity compensation in the form of RSUs, for a total of 5,025 RSUs.
In May 2023, Mr. Rao elected to receive all $300,000 of his 2023 annual cash and equity compensation in the form of RSUs, for a total of 5,025 RSUs.
In May 2023, Ms. Rosen elected to receive $250,000 of her 2023 annual equity compensation in the form of RSUs, for a total of 4,187 RSUs. She also elected to have $50,000 of her 2023 annual cash compensation paid in the form of cash.
In May 2023, Mr. Throop elected to receive $250,000 of his 2023 annual equity compensation in the form of RSUs, for a total of 4,187 RSUs. He also elected to have all $50,000 of his annual cash compensation, $20,000 of his annual Audit Committee Chair fee, and all $50,000 of his Lead Director fee paid in the form of cash.
(3)Represents the aggregate grant date fair value of the RSU awards granted in 2023, computed in accordance with Financial Accounting Standards Board Account Standards Codification (“FASB ASC”) Topic 718. These values have been determined based on the assumptions set forth in Note 2 to our consolidated financial statements included in the 2023 Annual Report. For each director, the number of units granted was determined by dividing the grant date value of the award by $59.70, the closing price of the Company's stock on the grant date of May 15, 2023.
(4)Unvested equity as of December 31, 2023, vesting in two quarterly installments on February 15, 2024, and May 15, 2024 is as follows:
(a)Mr. Bickett holds 2,616 RSUs;
(b)Mr. Clarke holds 2,093 RSUs;
(c)Ms. Farrington holds 2,093 RSUs;
(d)Mr. Hagerty holds 2,574 RSUs;
(e)Ms. Mantia holds 2,512 RSUs;
(f)Mr. Rao holds 2,512 RSUs;
(g)Ms. Rosen holds 2,093 RSUs; and
(h)Mr. Throop holds 2,093 RSUs.
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2024 PROXY STATEMENT |
DoneCEIare
Compensation Committee Report
Our Compensation Committee has reviewed and discussed the “CD&A” with Dayforce’s management. Based on this review and discussion, our Compensation Committee recommended to the Board that the CD&A be included in the 2023 Annual Report and this Proxy Statement.
Members of our Compensation Committee
Brent B. Bickett, Chair
Ronald F. Clarke
Thomas M. Hagerty
Andrea S. Rosen
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COMPENSATION DISCUSSION & ANALYSIS |
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CD&A Table of Contents |
Executive Summary | 25 |
Executive Compensation Program Goals and Considerations | 28 |
2023 Compensation Elements and Analysis | 30 |
Compensation Governance | 37 |
Executive Compensation Tables | 40 |
Agreements with our NEOs | 49 |
CEO Pay Ratio | 50 |
Pay Versus Performance | 51 |
This CD&A focuses on how our NEOs were compensated for Fiscal Year 2023, and how their Fiscal Year 2023 compensation aligned with our pay for performance philosophy.
For Fiscal Year 2023, Dayforce’s NEOs were as follows:
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Name and Position | David D. Ossip | Chair and Chief Executive Officer |
Samer Alkharrat(1) | Executive Vice President, Chief Revenue Officer |
Christopher R. Armstrong | Executive Vice President, Chief Operating Officer |
Stephen H. Holdridge(2) | President, Customer and Revenue Operations |
Leagh E. Turner(3) | Former Co-Chief Executive Officer |
Noémie C. Heuland(4) | Former Executive Vice President, Chief Financial Officer |
(1) Mr. Alkharrat was appointed Executive Vice President, Chief Revenue Officer on June 8, 2023.
(2) Mr. Holdridge was appointed Executive Vice President, Chief Customer Officer on February 23, 2022, and served in that role until he was appointed President, Customer and Revenue Operations on February 7, 2023.
(3) Ms. Turner resigned as Co-Chief Executive Officer and a member of the Board effective as of November 10, 2023, on which date Mr. Ossip became our sole Chief Executive Officer.
(4) Ms. Heuland resigned as Executive Vice President, Chief Financial Officer effective as of December 31, 2023.
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2024 PROXY STATEMENT |
Executive Summary
Our Compensation Committee reviews the efficacy of our programs on an annual basis, taking into consideration our compensation philosophy, business performance, stockholder feedback, our peer group, and company-wide objectives. The compensation program for our NEOs in Fiscal Year 2023 was the result of a multi-year effort to align our executive compensation with our core company goals. The Compensation Committee believes that our compensation program was essential in incentivizing our strong performance during the year and in orienting our executive team toward sustainable stockholder value creation.
Fiscal Year 2023 Company Performance
Our executive team continued to drive strong company performance in Fiscal Year 2023. We were pleased with our continued growth against metrics we believe measure the sustainable efficient growth path we are on as a company, which include the following results:
See Appendix A included in this Proxy Statement starting on page 71 for information regarding non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.
Competitive Market Impacts on our Talent and Pay Philosophy
The market we operate in is highly competitive and subject to changing technology and shifting client needs. Our competitors include firms that provide both integrated and point solutions for HCM, as well as local providers in each jurisdiction that we operate. We compete with legacy payroll service providers, as well as Cloud-enabled client-server HCM providers. We also face competition from modern HCM providers, whose solutions have been specifically built as single application platforms in the Cloud. In addition, we also compete with large, long-established enterprise application software vendors. As a result, our compensation program is designed to reflect the realities of operating in a competitive and highly variable market and ensuring that we are able to attract and retain critical talent to support our continued growth and success across all aspects of our business.
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2024 PROXY STATEMENT |
Leadership Changes
Our Board continuously evaluates our executive team's makeup and performance to ensure it is optimally designed and constructed to maximize long-term stockholder value. Further, as a successful high-growth technology company, we offer broad development and growth opportunities to our executives. The continued evolution of Dayforce's executive structure across our organization reflects our ability to both develop and attract world-class talent in a competitive environment. The Board feels confident in the Company's ability to continue developing exceptional talent internally and attracting highly talented executives from outside the Company.
In 2023 and early 2024, there were several changes to the makeup of the NEO positions:
Promotion of Stephen H. Holdridge to President, Customer and Revenue Operations
In February 2023, Mr. Holdridge was promoted to President, Customer and Revenue Operations of Dayforce. In that capacity, Mr. Holdridge continues to bring together the revenue and customer functions globally into one organization focused on driving revenue growth and a best-in-class customer experience with quantifiable value at every touchpoint.
Appointment of Samer Alkharrat as Executive Vice President, Chief Revenue Officer
In June 2023, we appointed Mr. Alkharrat as Executive Vice President, Chief Revenue Officer. In that capacity, Mr. Alkharrat has responsibility for fostering existing and prospective customer relationships globally in addition to ensuring the efficiency and alignment of revenue-generating operations.
Departure of Leagh E. Turner as Co-Chief Executive Officer
Ms. Turner resigned from her role as Co-Chief Executive Officer, effective as of November 10, 2023. On November 10, 2023, Mr. Ossip became sole Chief Executive Officer of the Company.
Departure of Noémie C. Heuland as Executive Vice President, Chief Financial Officer
Ms. Heuland resigned from her role as Executive Vice President, Chief Financial Officer, effective as of December 31, 2023.
Appointment of Jeremy R. Johnson as Executive Vice President, Chief Financial Officer
We appointed Mr. Johnson as Executive Vice President, Chief Financial Officer, effective as of January 1, 2024. In that capacity, Mr. Johnson is responsible for leading our global finance and investor relations functions.
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2024 PROXY STATEMENT |
Stockholder Feedback
Holders of approximately 96.7% of Dayforce’s outstanding stock represented and voting at Dayforce's 2023 Annual Meeting voted in favor of our Say on Pay proposal, an improvement of approximately 27.2% from the results of the 2022 Annual Meeting. We believe that open dialogue with our stockholders and incorporation of their feedback into our executive compensation program helped drive this improvement, and such conversations remain a cornerstone of our program. Specifically, our 2023 compensation program incorporated the following feedback from our stockholders obtained during our 2022 engagement program:
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2023 Compensation |
What We Heard | Board Response |
Desire for relative comparison performance metrics in long-term incentive program.
| The Board introduced a relative TSR ("rTSR") component into the 2023 Long-Term Incentive ("LTI") program for NEOs. |
Concern over the use of similar metrics under both the short-term and long-term incentive plans. | The Board implemented a Short-Term Incentive ("STI") program (referred to as the “MIP”) and an LTI plan in 2023 with two out of three performance metrics differentiated.
The Board also introduced individual performance goals for certain executive officers based on the execution of key activities of the Company's business.
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Desire to include true long-term performance aspects into annual long-term incentive program. | The Board added an rTSR component that is measured over a three-year performance period with cliff vesting in the 2023 LTI.
Additionally, starting in 2023, the Board expanded the financial performance period for the financial performance stock units ("PSU") in our LTI plan. The financial PSUs now have three separate one-year performance periods with targets set at the beginning of each respective calendar year. This change is designed to ensure continued performance throughout the entire performance period of the award.
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In late 2023 and early 2024, Gerald C. Throop, our Lead Director and Chair of our Audit Committee, and Deborah A. Farrington, the Chair of our Corporate Governance and Nominating Committee, together with senior management, continued our robust stockholder engagement program. We heard the following compensation-related comments during those conversations, which we incorporated into our 2024 compensation program:
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2024 Compensation |
What We Heard | Board Response |
Support for continued exclusion of ESG performance metrics from the executive compensation program. | The Board has not included any ESG performance metrics in executive compensation packages. The Board continues to discuss this topic with stockholders. |
Questions about future large equity grants to Mr. Ossip as a possible consequence of the dissolution of the Co-CEO structure.
| The Board believes the 2024 LTI grant provided to Mr. Ossip is sufficiently retentive and appropriate based on competitive market data. |
Some desire for multi-year measurement periods with metrics that are resilient under different market conditions. | As a high-growth company, the Board believes the consecutive one-year performance period in the fPSU (as defined below) portion of the LTI combined with the three-year performance period in the mPSU (as defined below) portion of the LTI is the appropriate mix to motivate and reward our NEOs.
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Executive Compensation Program Goals and Considerations
Our executive compensation program is designed to motivate, attract, and retain the best talent who will help the business continue to grow profitably and deliver increased stockholder value. In shaping the compensation program for 2023, the Compensation Committee considered and responded to feedback from our stockholders who have requested continued adjustments in the compensation program through the inclusion of more targeted performance based awards, including the short-term and long-term incentives described below. In addition, the Compensation Committee responded to stockholder requests to differentiate the performance metrics in the short and long-term incentive programs as further described below.
The Compensation Committee believes the short-term incentives rewarded strong 2023 performance and helped to attract and retain a strong core of the executive team, while the long-term performance grants maintain the executive team's focus on building sustainably towards our medium term performance goals of $2.0 billion in total revenue, 80% adjusted Cloud recurring revenue gross margin, and 30% adjusted EBITDA margin by the end of 2025. With the above context in mind, the following section details the key considerations of our Compensation Committee in setting 2023 total direct compensation ("TDC").
Compensation Philosophy and Pay for Performance Alignment
Our executive compensation philosophy is based on creating a strong pay-for-performance connection through our compensation programs and aligning executive performance with our business goals. As a result of this philosophy, our Compensation Committee believes that our executive compensation program should directly reflect our organization’s performance with substantial emphasis on the creation of long-term value for our stockholders. We achieve this by providing a mix of base salary, short-term incentives, and long-term incentives with a variety of time horizons to balance our near-term and long-term strategic goals.
In 2023, 88% of our Co-CEO TDC, and 76% of our other NEO TDC was provided through long-term equity awards. By having a significant percentage of our Co-CEO and other NEOs' 2023 TDC payable in long-term equity, their 2023 TDC was subject to higher risk and longer vesting than cash compensation, further incentivizing our executive officers to focus on value creation that will benefit our stockholders in the long-term. As depicted below, we define TDC as base compensation, STI, and LTI, with the exclusion of any one-time awards as discussed in the "2023 Compensation Elements and Analysis" section on page 30 of this Proxy Statement.
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Peer Group
In reviewing compensation for the executive officers, including the NEOs, our Compensation Committee considers several factors, including practices and policies within a relevant market for talent. Our definition of market comparisons includes companies that, like us, are high-growth, cloud-based technology and software companies. Our Compensation Committee, in consultation with its independent compensation consultant Willis Towers Watson ("WTW"), developed a customized peer group by considering market competitive data from both a peer group, as well as a broader framework from survey data sources (Radford Global Compensation Database and WTW). The combination of the customized peer group and the various survey sources provide a holistic summary of market competitive practices that reasonably compare to our size and scale, growth profile, specific industry, and broad labor market where we compete for talent. Due to a range of factors, including the scope of NEO positions, tenure in role, and company-specific concerns, there is an imperfect comparability of NEO positions between companies. As such, market position served as a reference point in setting the 2023 compensation for our NEOs, rather than a formula-driven outcome.
The Compensation Committee used the peer group described below to set NEO compensation through March 2023:
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Peer Group Used in Determining TDC October 2022 - March 2023 |
Atlassian Corporation Plc | HubSpot, Inc. | Splunk, Inc. |
Avalara, Inc. | Palantir Technologies Inc. | Tyler Technologies, Inc. |
Coupa Software Incorporated | Paycom Software, Inc. | Unity Software Inc. |
Datadog, Inc. | Pegasystems Inc. | Workday, Inc. |
DocuSign, Inc. | ServiceNow, Inc. | Zendesk, Inc. |
Subsequently, in April 2023, with the assistance of WTW, the Compensation Committee reviewed and updated our peer group to reflect our evolving business and to account for acquisitions or privatization of former peer companies.
The Compensation Committee used the updated peer group described below to set NEO compensation beginning in April 2023:
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Peer Group Used in Determining TDC April 2023 - Present |
Atlassian Corporation Plc | Paychex, Inc.* | Splunk, Inc. |
BILL Holdings, Inc.* | Paylocity Holding Corporation* | Tyler Technologies, Inc. |
Datadog, Inc. | Pegasystems Inc. | Unity Software Inc. |
Five9, Inc.* | PTC, Inc.* | Workday, Inc. |
HubSpot, Inc | RingCentral, Inc.* | Workiva, Inc.* |
Paycom Software, Inc. | Smartsheet, Inc.* |
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*New peers not included in the peer group used in determining TDC October 2022 - March 2023.
In collaboration with WTW, our Compensation Committee reviews our peer group annually, to ensure that our executive compensation remains in line with industry practices.
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2023 Compensation Elements and Analysis
Dayforce’s executive compensation program contains a mix of different compensation vehicles to motivate retention, reward for Company performance, and drive stockholder value. Significant elements of the 2023 compensation program include:
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Element | Key Characteristics | Rationale | Process |
Base Salary | Provides market competitive fixed compensation for performing duties and responsibilities of the position | Attracts and retains exceptional talent capable of performing in a dynamic, high-growth environment |
Reviewed annually, considering each individual’s leadership role, scope, complexity, individual performance, and competitive market trends
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Cash Bonus | One-time cash bonus awarded at inception of employment |
From time to time, we offer qualified executives a one-time cash bonus to incentivize them to join the Company
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Reviewed with the Compensation Committee and our independent compensation consultant to ensure consistency with market and peer practices
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STI – Management Incentive Plan ("MIP") | Variable compensation in the form of 50% cash and 50% PSUs to align compensation with annual financial performance goals/objectives | Motivates an individual to meet and achieve company-wide goals against pre-defined criteria in areas of strategic importance to Dayforce | Reviewed annually, considering each individual’s leadership role, scope, complexity, individual performance, and competitive market trends |
STI – Sales Incentive Plan ("SIP")(1) | Variable compensation in the form of 100% cash to align compensation with annual sales related goals | Motivates executive officer to meet and achieve Company sales goals | Reviewed annually, considering each executive’s leadership role, scope, complexity, individual performance, and competitive market trends |
LTI – Time-based RSU | Full value grants that vest ratably over three years and support our stock ownership guidelines and long-term retention | Aligns the interests of the individual and the stockholders via equity while encouraging retention and the continuity of our strategic plan |
Grant award levels based on individual contributions to business outcomes, potential future contributions, historical grant amounts, retention considerations, and market trends
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LTI – Financial Performance-based Restricted Stock Units ("fPSU") | Grants that vest ratably over three years if the achievement of each separate annual financial performance goals are met, and support our stock ownership guidelines and long-term retention | Aligns the interests of the individual and the stockholders via equity while encouraging retention, financial performance, and the continuity of our strategic plan |
Grant award levels based on individual contributions to business outcomes, potential future contributions, historical grant amounts, retention considerations, and market trends
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LTI – Market Performance-based Restricted Stock Units ("mPSU") |
Grants that cliff vest after three years based off the Company's TSR relative to theTSR of the respective index
| Aligns the interests of executive officers and stockholders via equity while encouraging retention, market-performance, and the continuity of our strategic plan | Grant award levels based on individual contributions to business outcomes, potential future contributions, historical grant amounts, retention considerations, and market trends |
(1) Mr. Alkharrat is the only NEO eligible for the SIP.
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Base Salary
We provide base salary as a means to deliver a stable amount of fixed cash compensation to our executive officers, including our NEOs, for performance of their day-to-day responsibilities. The base salary of each of our executive officers, including our NEOs, is reviewed annually to determine if an adjustment is warranted or required and may be reviewed intra-year as well – such as in connection with a promotion or material change in job scope.
We did not raise the base salary of any of our NEOs in 2023. Details on the base salary of each NEO is provided in our Summary Compensation Table on page 40 of this Proxy Statement.
Cash Bonus
From time to time, we offer our qualifying executives a one-time signing bonus in varying cash amounts, which is paid out at the same time as the first regular payment of the executive's base salary. These one-time bonuses are generally subject to a clawback provision that, subject to certain exceptions detailed in the relevant employment agreement, permits the Company to recoup the signing bonus if the executive leaves the Company within two years. This one-time bonus is intended to encourage high quality talent to join the Company and encourage their short-term retention. Our Compensation Committee reviews and approves the amount of all one-time signing bonuses in consultation with our independent compensation consultant.
In 2023, we awarded Mr. Alkharrat a $250,000 cash bonus when he joined the Company.
Short-Term Incentives
Our STI programs are performance-based and designed to focus and reward NEOs for performance on key annual measures that drive stockholder value. In 2023, our STI programs consisted of a MIP that each of our NEOs participated in, and a SIP in which Mr. Alkharrat was the only NEO to participate.
Each NEO has an individual STI payout target. Our Compensation Committee considers several factors when setting the individual STI payout targets and establishing the performance components, including each NEO’s role and responsibilities, expected contribution to Dayforce, potential impact of each NEO’s performance on Dayforce’s performance metrics, and competitive market trends.
Details on the STI payout amounts for each NEO are available in the Summary Compensation Table on page 40 of this Proxy Statement.
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Management Incentive Plan
The MIP is designed to incentivize senior employee performance against critical performance metrics that drive stockholder value. In 2023, 100% of Messrs. Ossip, Armstrong, and Holdridge and Mses. Turner and Heuland, and 25% of Mr. Alkharrat's STI target was fulfilled by the MIP.
In 2023, the MIP payouts were measured against the delivery of three key organizational performance metrics: Cloud Revenue, Adjusted EBITDA, and sales per employee per month annual contract value ("Sales PEPM ACV"). The 2023 MIP also introduced individual performance goals for certain NEOs designed to focus those NEOs on performance of specific areas of the business deemed critical to driving our long-term growth initiatives.
In order to provide targeted incentives to each NEO, the metrics under the 2023 MIP were weighted differently among the NEOs as follows:
For Messrs. Ossip and Alkharrat and Ms. Turner, equal weighting across Cloud Revenue, Adjusted EBITDA, and Sales PEPM ACV provided for balanced alignment across the overall business.
For Messrs. Armstrong and Holdridge, equal weighting across Cloud Revenue, Adjusted EBITDA, and individual performance goals provided for balanced alignment across the overall business and each NEO's specific functional areas. The heavier weighting of Sales PEPM ACV focused these NEOs on driving Dayforce's global revenue operations.
For Ms. Heuland, equal weighting across the three organizational performance metrics and individual performance goals provided for balanced alignment across the overall business and Ms. Heuland's specific functional area.
In February 2023, the Compensation Committee approved (i) an increase in the individual short-term incentive target of Mr. Holdridge, from 60% to 80% of his base salary, in connection with his promotion to President, Customer and Revenue Operations; and (ii) an increase in the individual STI target of Mr. Armstrong, from 60% to 80% of his base salary, in recognition of his level of responsibility. Both STI target increases were deemed appropriate by our Compensation Committee, based on competitive market data applicable for Fiscal Year 2023.
We continued to include a Sales PEPM ACV metric to our 2023 performance criteria for both our STI and LTI programs, in order to place additional emphasis on sustainable revenue growth.
Program Performance
Our Compensation Committee set aggressive targets for our 2023 MIP, and our performance against those targets varied for each performance metric. Specifically, in 2023 we met our Cloud Revenue goals, we exceeded our Adjusted EBITDA goals, and we fell short of our aggressive Sales PEPM ACV goals. In the interest of maintaining rigor and discipline in our pay-for-performance philosophy, the Compensation Committee did not exercise its discretion to deem the threshold level of Sales PEPM ACV achieved for the MIP. Based on the achievement level against each respective target and differentiated MIP weighting, payouts for NEOs ranged from 68.74% to 88.25%.
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The following table shows the payouts earned under the 2023 MIP for our NEOs based on achievement against their targets.
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Metric(1) | | Why it Matters | Threshold | Goal | Maximum Achievement | Metric Achieved | Payout Earned (%) | |
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Cloud Revenue | | Indicator of growth in our SaaS products, solutions, and geographies as well as emerging markets | | | $1,377.2 M | | | $1,412.5 M | | | $1,447.8 M | | | | $1,408.3 M | | | | |
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Adjusted EBITDA(2) |
| Indicator of our profitability, operating efficiencies, and the scalability of our growth | | | $364.1 M | | | $383.3 M | | | $402.5 M | | | | $405.9 M | | | |
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Sales PEPM ACV | | Motivates alignment behind top-line growth | | | (3) | | | (3) | | | (3) | | | | (3) | | | | |
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Individual Performance Goals(4) | | Focuses NEOs on performance of specific areas of the business deemed critical | | | (3) | | | | | (3) | | | | | (3) | | | | (3) | | | | |
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Total Payout | | | | | | | | | | | | | | | | | | | | | | 68.74% - 88.25%(5) | |
(1)Both Cloud Revenue and Adjusted EBITDA include float revenue and were calculated based on our operating results, adjusted from our financial results reported in our Annual Report on Form 10-K for the period ended December 31, 2023, to reflect expected interest rate impacts to float revenue and foreign exchange rate impacts to all revenue items.
(2)See Appendix A included in this Proxy Statement starting on page 71 for information regarding non-GAAP financial measures, including a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable GAAP financial measure. Adjusted EBITDA has been further adjusted from our financial results reported in our Annual Report on Form 10-K for the period ended December 31, 2023, as described in footnote (1).
(3)We are not disclosing the target, threshold, maximum, or actual level of payout for this performance criteria, as we believe such disclosure would cause substantial competitive harm without adding to a meaningful understanding of our business – we do not provide guidance on this metric throughout the year.
(4)The Individual Performance Goals were calculated based on the achievement of certain organizational efficiencies and incremental growth plans and vary by executive.
(5)Payouts for NEOs pursuant to MIP achievement ranged from 68.74% to 88.25%. See "MIP Achievement and Payout" below for additional discussion of individual payouts.
MIP Achievement and Payout
Following the conclusion of Fiscal Year 2023, the Compensation Committee reviewed the level of achievement of each performance goal against the pre-established targets and certified the following payouts for our NEOs:
•Messrs. Ossip and Alkharrat's MIP resulted in an overall payout of 84.33%.
•Mr. Armstrong's MIP resulted in an overall payout of 70.88%.
•Mr. Holdridge's MIP resulted in an overall payout of 68.74%.
•Ms. Heuland's MIP resulted in an overall payout of 88.25%.
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2023 Sales Incentive Plan
Mr. Alkharrat was the only NEO to participate in the 2023 SIP, which was designed to focus him on year-over-year growth of Sales PEPM ACV. Mr. Alkharrat’s 2023 SIP provided an opportunity for Mr. Alkharrat to earn a short-term cash incentive for achievement of sales-related goals for the period commencing on July 1, 2023, through December 31, 2023. Under the terms of the SIP, Mr. Alkharrat had the opportunity to receive a payout based on his sales-related goals, with any overachievement based on a set of payout accelerators for incremental achievement above target, and underachievement resulting in below target payouts. There was no earnings cap or incentive ceiling in the 2023 SIP to maximize the incentive to meet and exceed the sales targets. The financial targets pertaining to Mr. Alkharrat’s 2023 SIP are not being disclosed because we believe such disclosure would cause substantial competitive harm without adding to a meaningful understanding of our business. Pursuant to Mr. Alkharrat’s 2023 SIP, he received a payout at 73% of target level.
Long-Term Incentives
Our LTI programs are performance based and designed to ensure retention of our executives. In 2023, the Compensation Committee focused on infusing additional performance elements into the LTI grants made to NEOs, which included:
1.Three-year, time-based vesting RSUs.
2.fPSUs with three one-year performance periods during the full vesting period.
3.mPSUs with three-year cliff vesting performance period.
New elements of the 2023 LTI grants include:
1.New financial performance metrics for the fPSU measuring Cloud Recurring Revenue, Adjusted Cloud Recurring Gross Margin, and Sales PEPM ACV, resulting in two out of three performance metrics that are independent from MIP metrics. The revised financial goals provide greater alignment with the long-term goals of the business.
2.Revised vesting schedules for the fPSU that include three one-year performance periods, rather than a one-year performance period with three-year ratable vesting. The goal of this transition is to ensure continued performance throughout the duration of the vesting period.
3.A new mPSU measured on an rTSR component, which rewards executive officers for enterprise value growth relative to the S&P 1500 Application Software Index.
4.A greater emphasis on performance-based LTI awards for NEOs.
5.An RSU grant valued at $5.0 million with a three-year ratable vesting component to Mr. Alkharrat to incentivize him to join the Company and provide long-term retention incentive.
In 2023, the Compensation Committee placed a greater emphasis on at-risk compensation for the NEOs, with approximately 58.4% of LTI based on performance for Mr. Ossip and Ms. Turner, and approximately 56.5% of LTI based on performance for our non-CEO NEOs, up from 50% in 2022 for all NEOs. Our Compensation Committee believed this mix of equity grants struck the right balance between strengthening the performance-based aspects of the LTI, while also remaining attractive and retentive to the executives participating in the LTI program. In 2023, the performance metrics of the PSU component of the LTI grants focused on recurring revenue, recurring gross margin, and sales growth. It is our Compensation Committee’s belief that our executives should be incentivized to drive the metrics that are most important to Dayforce’s continued growth and profitability.
When grant type and quantum decisions were made in February 2023, our Compensation Committee considered the historic development and execution of Dayforce’s strategic growth plan which drove strong financial performance in the prior fiscal periods. Our Compensation Committee also considered the criticality of the current period to Dayforce’s long-term growth and the “war for talent” that was spurring intense competition for leaders in our space.
Mr. Ossip's and Ms. Turner's LTI in 2023 was positioned around the 50th percentile of the peer group, which our Compensation Committee believed appropriately rewarded our Co-CEOs for their unique contributions to our high-performing business and which the Compensation Committee believed to be sufficiently retentive to keep them in
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their roles during this critical time of our growth. When our Compensation Committee considered LTI grants for our Co-CEOs, it reviewed the grants of the CEOs of our peer group.
LTIP Achievement and Payout
fPSUs
The following table shows the payouts earned under the fPSU component of the 2023 LTI for our NEOs based on achievement against their targets. Similar to our MIP payout, our Compensation Committee set aggressive targets for the 2023 LTI, and our performance against those targets varied for each performance metric. Specifically, in 2023 we exceeded our Cloud Recurring Revenue and Adjusted Cloud Recurring Gross Margin goals, and we fell short of our aggressive Sales PEPM ACV goals. Our Compensation Committee did not exercise its discretion to deem the threshold level of Sales PEPM ACV achieved for the LTIP.
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Metric(1) | | Why it Matters | Threshold | Goal | Maximum Achievement | Metric Achieved | Payout Earned (%) |
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Cloud Recurring Revenue | | Emphasizes growth in recurring revenue generated in our SaaS products, solutions, and geographies as well as emerging markets | | | $1,164.2 M | | | $1,194.0 M | | | $1,223.9 M | | | | $1,206.0 M | | | |
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Adjusted Cloud Recurring Gross Margin(2) |
| Emphasizes control of business operation costs while continuing to focus on revenue generation | | | 75.5% | | | 77.4% | | | 79.3% | | | | 78.3% | | | |
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Sales PEPM ACV | | Motivates alignment behind top-line growth | | | (3) | | | (3) | | | (3) | | | | (3) | | | |
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Total Payout | | | | | | | | | | | | | | | | | | 81.26% |
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(1)Cloud Recurring Revenue includes float revenue and was calculated based on our operating results, adjusted from our financial results reported in our Annual Report on Form 10-K for the period ended December 31, 2023, to reflect expected interest rate impacts to float revenue and foreign exchange rate impacts to all revenue items.
(2)See Appendix A included in this Proxy Statement starting on page 71 for information regarding non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.
(3)We are not disclosing the target, threshold, maximum, or actual level of payout for this performance criteria, as we believe such disclosure would cause substantial competitive harm without adding to a meaningful understanding of our business – we do not provide guidance on this metric throughout the year.
Our Compensation Committee certified the results of 81.26% total payout earned in 2023 under the fPSU metrics. Details on the payout amounts for each NEO is available in the Summary Compensation Table on page 40 of this Proxy Statement.
mPSUs
The mPSU component of the 2023 LTI for our NEOs was first introduced in 2023. The metrics used to determine vesting of the mPSUs are based on TSR performance relative to the S&P 1500 Application Software Index for the three-year performance period from January 1, 2023, through December 31, 2025. The Compensation Committee
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selected the comparison group of the S&P 1500 Application Software Index for its stability and because it consists of companies closest to our industry with a certain caliber of performance required to remain in the index.
The mPSUs fully vest on the third anniversary of the grant date, contingent upon achievement of the mPSU goal. The mPSU has a potential threshold payout of 50% for achieving the 25th percentile rTSR; a target payout of 100% for achieving the 50th percentile rTSR; an above target payout of 150% for achieving the 75th percentile rTSR; and a maximum payout of 200% for achieving the 90th percentile of the TSR peer group. Actual achievement will be askedcertified by the Compensation Committee or the Board in 2026 after completion of the three-year performance period.
One-Time PSU
A one-time PSU (the "Holdridge PSU") was granted to considerMr. Holdridge in connection with his promotion to President, Customer and act uponRevenue Operations in February 2023. The award was based on the Company's achievement of Sales PEPM ACV in 2023, with potential payouts between 50% and 200% of target for threshold to maximum levels of achievement. Upon the Compensation Committee or the Board certifying that the Company had achieved at least the threshold level, one-third of the PSUs would vest annually on each of the first three anniversaries of the grant date.
We are not disclosing the target, threshold, or maximum level of payout for his performance criteria, as we believe such disclosure would cause substantial competitive harm without adding to a proposalmeaningful understanding of our business. We do not provide guidance on this metric throughout the year. Similar to approveour MIP and fPSU payout, our Compensation Committee set an aggressive target for the Ceridian HCM HoldingHoldridge PSU. The Holdridge PSU achieved less than the threshold level of performance, which resulted in an achievement of 0% and zero PSUs vesting.
Other Elements
We offer healthcare, insurance, retirement benefits, and paid time off for every employee at Dayforce, including our NEOs, to invest in our employees’ health and future. Benefits are substantially the same for all employees, including NEOs, based on country location. In addition, we offer select perquisites to some of our executives, including Mr. Ossip and Ms. Turner in 2023.
Additional information on the employee benefits and other compensation provided to our NEOs is available in the Summary Compensation Table on page 40 of this Proxy Statement.
Global Employee Stock Purchase Plan
The Dayforce, Inc. Global Employee Stock Purchase Plan (the “GESPP”("GESPP"). The provides an opportunity for eligible employees to become Dayforce stockholders and drives employee engagement. This plan provides a 15% discount on the stock purchase price with a lookback feature. All employees in the U.S., Canada, UK, Germany, Mauritius, Australia, and New Zealand were eligible for participation in the GESPP was approved unanimously and adoptedas of December 31, 2023, including our NEOs, unless otherwise prohibited by the rules of the Internal Revenue Service.
Executive Severance
Within the employment agreements of the NEOs, we provide for severance payments and benefits in the event of a qualifying termination of employment, which may include varying severance payments based on the length of service to Dayforce. The Compensation Committee believes that these arrangements are competitively reasonable and necessary to recruit and retain key executives. The material terms of these severance payments to our NEOs are described in “Potential Payments upon Termination or Change in Control” on page 47 of this Proxy Statement.
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Compensation Governance
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What we do | What we do not do |
✓Pay for performance – A significant percentage of the 2023 TDC featured performance-based metrics, including 56% of our annual LTI. ✓Independent compensation consultant – The Compensation Committee retains an independent compensation consultant to advise on our executive compensation program and practices. ✓Robust Stock Ownership Guidelines – We have Stock Ownership Guidelines for executive officers of 6x annual base salary for our CEO and 3x annual base salary for our other executive officers. ✓Annual compensation risk assessment – A risk assessment of our compensation programs is performed on an annual basis to ensure that our compensation programs and policies do not incentivize excessive risk-taking behavior. ✓Peer group analysis – The Compensation Committee reviews external market data when making compensation decisions and annually reviews our peer group with its independent compensation consultant. ✓Independent Compensation Committee – Our Compensation Committee is 100% comprised of independent members of our Board. ✓Clawback policy – In the event that the Board determines that a material accounting restatement of our financial statements has occurred, Dayforce may recoup all or a portion of the excess incentive compensation received by our executive officers in the three completed fiscal years immediately preceding the date of the material accounting restatement pursuant to our Compensation Recovery Policy. Our Compensation Recovery Policy is compliant with NYSE rules, and has been publicly filed as an exhibit to our Annual Report on Form 10-K. ✓Annual stockholder “Say on Pay” vote – We value our stockholders’ input on our executive compensation programs. Our Board seeks an annual non-binding advisory vote from stockholders to approve the executive compensation disclosed in our CD&A, tabular disclosures, and related narrative of the proxy statement. ✓Stockholder engagement –We routinely engage with our stockholders to seek their input on our compensation policies and practices.
In addition, the 2018 EIP contains a recovery provision whereby Dayforce may recoup (i) gain on awards granted under the 2018 EIP in the event of a termination for cause; and (ii) excess on awards granted under the 2018 EIP in the event of an accounting restatement. | X | No change in control single trigger acceleration – We grant equity awards that require both a change in control and an involuntary termination without cause or voluntary termination with good reason before vesting. |
X | No hedging of company stock – Executive officers and members of the Board may not directly or indirectly engage in transactions intended to hedge or offset the market value of Dayforce’s Common Stock owned by them. Please see discussion of Dayforce’s anti-hedging policy described on page 20 of the Proxy Statement. |
X | No pledging of company stock – Executive officers and members of the Board may not directly or indirectly pledge Dayforce’s Common Stock as collateral for any obligation. Please see discussion of Dayforce’s anti-pledging policy described on page 20 of the Proxy Statement. |
X | No repricing or exchange of underwater stock options – Our equity incentive plan does not permit repricing or exchange of underwater stock options without stockholder approval. |
X | No tax gross-ups – We do not provide tax gross-ups to our executive officers. |
X | No excessive perquisites – We do not provide excessive perquisites for executive officers. |
X | No guaranteed bonuses –We do not provide guaranteed annual bonus payouts. |
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Compensation Committee Oversight
The Compensation Committee, comprised entirely of independent directors, reviews and approves the compensation of Dayforce’s NEOs and other executive and senior officers. The Compensation Committee also administers and makes recommendations related to equity-based compensation plans to the Board. Details of the Compensation Committee’s duties are summarized in the Board of Directors overview of this Proxy Statement (beginning on page 16) and are fully set out in the Compensation Committee’s charter which can be found on our website under “Governance Documents” on the Corporate Governance section of our Investor Relations page at www.dayforce.com.
Use of an Independent Compensation Consultant
As permitted under its meetingcharter, in 2023, the Compensation Committee retained WTW as its independent compensation consultant. WTW reports directly to the Compensation Committee and takes direction from the Chair of the Compensation Committee. The Compensation Committee assessed the independence of WTW in light of SEC rules and NYSE listing standards and concluded that WTW is independent and its work in 2023 did not raise any conflicts of interest.
During the year, WTW assisted in designing and reviewing our management and director compensation programs, including developing compensation market comparisons, providing competitive program and policies information, attending Compensation Committee meetings, and providing general advice. The Compensation Committee considers the analysis and advice from WTW as well as support and insight from management when making compensation-related decisions.
In 2023, WTW was compensated approximately $445,821 for services to the Compensation Committee. WTW also provides certain other services to Dayforce, including health and welfare benefits consulting and corporate risk and brokerage services. WTW received approximately $1,316,141 for these additional services in 2023. The Compensation Committee is aware of the other services provided by WTW to Dayforce but did not review or approve the provision of these services because they are of the type directly procured by management in the ordinary course of business.
Role of Management
Compensation Committee meetings are typically attended by the CEO, the Executive Vice President, Chief Human Resources Officer, the Senior Vice President, Global Total Rewards, and the Executive Vice President, General Counsel and Corporate Secretary. Our CEO typically provides recommendations on November 9, 2018, atcompensation for all other executive officer roles. Neither of the then-serving Co-CEOs were present when our Compensation Committee discussed the compensation of either Co-CEO in 2023.
Managing Compensation-Related Risk
In connection with their oversight of compensation-related risks, our Compensation Committee and WTW, as our Compensation Committee’s independent compensation consultant, reviewed Dayforce’s compensation policies and practices to ensure that compensation programs do not encourage risk-taking that is reasonably likely to have a material adverse effect on us. Our Compensation Committee and WTW reviewed all compensation plans and identified those plans that are most likely to pose material risks and balanced these against our existing processes and compensation program safeguards. The review process considered mitigating features contained within our compensation plan design, which time it became effective, subjectincludes elements such as mix of pay, timing of payouts relative to approval byperformance periods and metrics, and goal diversification. We believe, and the results of the risk analysis concluded, that our stockholders. We commenced the first offering period under the GESPPcompensation programs do not encourage risk-taking that is reasonably likely to result in a material adverse effect on January 1, 2019, with the actual purchase ofDayforce.
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2024 PROXY STATEMENT |
Stock Ownership Guidelines
Our CEO is required to own and hold shares of our Commonstock with a value that is at least equal to six-times his annual base salary. Our other executive officers are required to own and hold shares of our stock with a value that is at least three-times each of their annual base salaries.
Each of our executive officers has five years following the later of their commencement of service with Dayforce as an executive officer subject to the Stock Ownership Guidelines (which includes the date of promotion to a position subject to the Stock Ownership Guidelines or to a new multiple level within the Stock Ownership Guidelines) or the adoption of Stock Ownership Guidelines to satisfy the stock ownership requirement. If an executive officer does not achieve the Stock Ownership Guidelines requirements as of December 31 of the year following the fifth anniversary of being subject to the Stock Ownership Guidelines, then the executive officer must retain at least 75% of after-tax shares received in connection with equity awards until the Stock Ownership Guidelines requirements are met.
Qualifying shares under the GESPP contingent upon approval by our stockholders.
If this proposal is approved by the holders of a majority of the votes represented by our Voting Stock and voting on the matter, the maximum aggregate number ofOwnership Guidelines consist of: (i) shares of Common Stock that may be issued underor Exchangeable Shares held directly or beneficially owned by the GESPP will be 2,500,000, which will be used to satisfy the purchase ofexecutive officer, including any shares of Common Stock under either the Code Section 423 Componentheld in a brokerage account or theNon-Code Section 423 Component of the GESPP. We do not maintain any other employee stock purchase plans. However, we do maintain the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan, which allows us to grant various forms of equity compensation awards to our employees, officers andnon-employee directors and to those of our subsidiaries.
If this proposal is approved by our stockholders as described above, the first offering period will conclude and the first purchase of401(k) account; (ii) shares of Common Stock underor Exchangeable Shares held indirectly by the GESPP will occur on June 28, 2019. In the event that our stockholders as described above do not approve this proposal, all contributions made under the GESPP for the applicable offering period will be refunded to participants, without interest, as soon as reasonably practicable and noexecutive officer if such shares of Common Stock will be issued under the GESPP.
The following description of the GESPP is a summary and is qualified in its entirety by reference to the plan document for the GESPP, a copy of which is attached asAnnex A to this Proxy Statement.
Purpose
The purpose of the GESPP is to provide an incentive to eligible employees by giving them an opportunity to become owners of Ceridian and play a role in our future.
Plan Administration
The GESPP will be administeredor Exchangeable Shares are “beneficially owned” by the compensation committee of the Board. The compensation committee will have broad administrative authority over the GESPP. All questions regarding (a) the interpretation of the GESPP, any form of agreement or other document employed by us in the administration of the GESPP, (b) any purchase rights granted under the GESPP, and (c) the correction of any errors arising under the GESPP will be determined by the compensation committee andexecutive officer, including such determinations will be final and binding upon all persons having an interest in the GESPP or the purchase rights. The compensation committee also will determine all relevant terms and conditions of the purchase rights granted to employees, provided that all employees have the same rights and privileges within the meaning of Section 423(b) of the United States Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder (the “Code”), for purposes of the Code Section 423 Component of the GESPP. Any of the compensation committee’s administrative tasks may be assigned to an individual designated by us to receive enrollment agreements, withdrawal notices and other communications from eligible employees (the “Administrator”).
Available Shares
Subject to adjustment for certain changes in recapitalization or reorganization, in which we are a party, the maximum aggregate number of shares of Common Stock that may be issued underor Exchangeable Shares held by an affiliated entity, a spouse and/or immediate family member of the GESPP will be
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