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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ⌧ Filed by a Party other than the Registrant ◻
Check the appropriate box:
◻ | Preliminary Proxy Statement |
◻ | Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)) |
⌧ | Definitive Proxy Statement |
◻ | Definitive Additional Materials |
◻ | Soliciting Material Pursuant to § 240.14a-12 |
RE/MAX HOLDINGS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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| No fee required. | ||
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| Fee paid previously with preliminary materials. | ||
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| Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | ||
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Dear Fellow Stockholder:
RE/MAX Holdings, Inc. is holding its 2022 annual meeting of stockholders at noon mountain time on Wednesday, June 1, 2022. The meeting will be held as a virtual meeting, which stockholders can attend by visiting www.virtualshareholdermeeting.com/RMAX2022. This will be the sixth year that our annual meeting of stockholders is virtual. We have found that the virtual format makes it easier for stockholders to attend the meeting, improves communication, and reduces costs both for the Company and for stockholders who attend the meeting. We plan to give stockholders the opportunity to ask questions about the items of business for the meeting and our business generally.
We encourage stockholders to vote their shares by proxy in advance of the annual meeting.
The attached notice of the 2022 annual meeting of stockholders and proxy statement provide important information about the meeting and will serve as your guide to the business to be conducted at the meeting. Your vote is very important to us. We urge you to read the accompanying materials regarding the matters to be voted on at the meeting and to submit your voting instructions by proxy. The enclosed proxy statement and proxy card are first being sent to our stockholders on approximately April 21, 2022.
The Board of Directors recommends that you vote “FOR” each of the director nominees named in the proxy statement and “FOR” the ratification of KPMG LLP as our independent registered public accounting firm.
You may submit your proxy either over the telephone or the internet or you may vote through the online portal during the meeting. In addition, if you received a paper copy of the proxy materials, you can vote by marking, signing, dating, and returning the proxy card sent to you in the envelope accompanying the proxy materials.
Thank you for your continued support.
Sincerely,
David Liniger
Chairman and RE/MAX Co-Founder
April 21, 2022
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| NOTICE OF 2022 |
Meeting Information | | Items of Business | Our Board’s | More information | ||
| WHEN | | 1 | Elect four directors to our Board of Directors from the nominees named in the proxy statement | FOR each | p. 7 |
| ADMISSION | | 2 | Ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. | FOR | p. 49 |
| WEBCAST The virtual meeting will be held online at: www.virtualshareholdermeeting.com | | The above actions are described in more detail in this proxy statement. We may also transact any other business as may properly come before the Annual Meeting or before any adjournment or postponement thereof. | |||
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Your vote is important. We encourage you to vote by proxy in advance of the meeting, whether or not you plan to attend the meeting. Please vote using one of the following advance voting methods:
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BY INTERNET | BY TELEPHONE | BY MAIL | |
You may vote via the internet by visiting http://www.proxyvote.com and entering the unique control number for your shares located on the Notice of Internet Availability of Proxy Materials. | You may vote by phone by calling | Beneficial Owners of Shares Held in Street Name: | Stockholders of Record: |
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Please feel free to contact our investor relations department at (303) 224-5458 or investorrelations@remax.com if you have any questions about voting or attending the meeting.
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| By Order of the Board of Directors |
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| Adam Lindquist Scoville, Secretary |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 1, 2022. The Company’s Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2021 are also available at http://materials.proxyvote.com/75524W. |
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Board of Directors Leadership Structure; Formal Lead Independent Director Role | 18 |
Enterprise Risk Management and Board of Directors Role in Risk Oversight | 19 |
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PROPOSAL 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 49 |
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RE/MAX Holdings, Inc. (“RE/MAX Holdings”) is one of the world’s leading franchisors in the real estate industry. We franchise real estate brokerages globally under the RE/MAX® brand (“RE/MAX”) and mortgage brokerages in the U.S. under the Motto® Mortgage brand (“Motto”). We also sell ancillary products and services, primarily technology, to our franchise networks and, in certain instances, we offer these products and services outside our franchise networks. The RE/MAX network, founded in 1973, has a presence in over 110 countries and territories and more than 140,000 agents in nearly 9,000 offices. Motto is the first and only national franchisor of mortgage brokerages in the United States. Motto is among the fastest growing franchises and has grown to over 175 open offices since it was founded in 2016. RE/MAX and Motto are 100% franchised—we do not own any of the brokerages that operate under these brands. We focus on enabling our networks’ success by providing powerful technology, quality education and training, and valuable marketing to build the strength of the RE/MAX and Motto brands.
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A Leading Dual-Brand Franchisor with Compelling Growth Opportunities
MAX: #1 Name in Real Estate (US/Canada) and Unmatched Global Footprint. Highly Productive Network of more than 135,000 agents. Agent-centric model is different and better. Motto: Rapidly expanding network of offices with almost $3.5 billion in 2021 annual loan volume. First and only national mortgage brokerage franchise in U.S. Among top fastest growing franchises and a top new franchise brand.
1 Source: MMR Strategy Group Study of unaided brand awareness
2 The RE/MAX network has a presence in more than 110 countries and territories
3 Source: Entrepreneur Magazine based on the net number of franchise units added worldwide between July 2019 to July 2020 as reflected in a its review of unit lists and Franchise Disclosure Documents of 1,116 participating franchises across all industries
4 Source: Entrepreneur Magazine based on its analysis of data, including costs, fees, size, growth and brand and financial strength, from franchise disclosure and related documents dated August 2019 to July 2020 of 262 participating franchise systems that began franchising in the last 5 years (in 2016 or later)
2022 Proxy Statement | RE/MAX Holdings, Inc. | 1 |
Strategic Acquisitions
Acquired the North American operations of RE/MAX INTEGRA, the subfranchisor of the RE/MAX brand in nine U.S. states and five Canadian provinces (shown above). This acquisition brought over 19,000 RE/MAX agents into Company-Owned regions. | | | Our Growing Franchise Brands RE/MAX Agent Count as of December 31
Total Open Motto Mortgage Offices:
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STRONG FINANCIAL POSITION
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$329.7M | | | $119.7M | |||
1. Adjusted EBITDA is a non-GAAP measure. Please see the Appendix on page 56 of this Proxy Statement for a definition of this term and reconciliation with the most directly comparable GAAP measure.
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2 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
We believe that the compensation of our CEO and other Named Executive Officers should be tied to the long-term interests of our stockholders. We have therefore structured executive compensation to be largely variable, based on Company and individual performance. As the charts to the right show, approximately 80% of our CEO and 75% other Named Executive Officers (“NEO”) target compensation in 2021 was at-risk or performance-based. |
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CEO: base salary 18%, bonus 32%, equity grant 49%, other 1%. Average of other NEOs: base salary 25%, bonus 23%, equity grant 51%, other 1%
Our Mission, Vision, Values, and Beliefs
The graphic below shows our mission, vision, values, and beliefs. Our values, summarized by the acronym “MORE,” are reflected in our Code of Conduct, which is discussed in greater detail below.
Mission: Deliver the best experience in everything real estate. Vision: To be the global real estate leader; the ultimate destination for professionals and consumers. Values: Deliver to the max; customer obsessed, do the right thing, together everyone wins. Beliefs: We believe in the value of full-time diverse professionals. We believe in preparation, education, and constant growth. We believe in both experience and innovation. We believe in the power of association—and that individuals thrive in positive, productive, inclusive environments.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 3 |
Our Commitment to our Stakeholders
EVERYBODY WINS: | ||||||
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● LEED Certified headquarters building ● Striving for more efficient resource utilization by reducing our footprint and subleasing portions of our headquarters building. Received a 91 out of 100 on the Energy Star® Energy Performance Scorecard. ● Many initiatives to minimize headquarters building footprint: e.g., single-stream recycling, composting, low-flow appliances, recent LED lighting retrofit, et cetera. | ● Providing aspiring entrepreneurs in over 110 countries and territories the opportunity to become business owners. ● Strong focus on diversity, equity, and inclusion in our networks and at headquarters: two of five Executive Officers and more than half of Board members are women or from diverse populations and nearly 60% of RE/MAX agents in the U.S. are women. ● RE/MAX brokers and agents in the U.S. and Canada have donated over $185 million to Children’s Miracle Network since 1992. ● The Motto Mortgage Mission Against Hunger organizes food drives across the country and headquarter staff volunteers at a local food pantry. | ● Key Board committees are fully independent ● Separate Chair & CEO Roles ● Robust Lead Independent Director Role ● Most Directors attended 100% of Board and committee meetings; no Director attended less than 90% of Board and committee meetings in 2021. ● Four Directors are Leadership Fellows with the National Association of Corporate Directors (“NACD”). ● Annual self-assessments administered by inside counsel or third-party. ● Commitment to Board refreshment—two new members added in 2020 and one new nominee in 2022. | ||||
Diversity, Equity, and Inclusion
As a franchisor, human capital development and opportunity are foundational elements of our business. Diversity, equity, and inclusion permeate our networks as we offer motivated entrepreneurs in over 110 countries and territories the opportunity to elevate their careers as small business owners in real estate. Moreover, we have been a leader in expanding opportunities for women within real estate since our founding almost 50 years ago. In our early days, one of the keys to our initial success was an intentional decision to invite women to join our RE/MAX network as real estate agents, which helped create professional opportunities for women in a persistently male-dominated industry at the time. Through the years, we have consistently prioritized leadership opportunities for women within our organization. For example, in the history of the Company, two of our six CEOs have been women, and today, two of our five Executive Officers and five of our ten board members, as well as this year’s new nominee, are female. Globally, approximately 47% of RE/MAX franchises have at least one female owner and 52% of our agents are women as of December 31, 2021. We remain committed to diversity, equity, and inclusion and continue to expand our efforts around this important topic. To ensure our affiliates as well as our employees are informed, educated, and engaged, we infuse education on diversity, equity, and inclusion at key Company events and routinely promote available educational resources.
We are proud to support multiple industry groups that aim to increase diversity in the real estate profession and homeownership by diverse groups. We financially support organizations such as the National Association of Hispanic Real Estate Professionals, the Asian Real Estate Association of America, the LGBTQ+ Real Estate Alliance, the Women’s Council of REALTORS®, Freddie MAC (Affordable Housing Program) and the National Association of REALTORS®. We
4 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
seek to have diverse guests and presenters for events such as our annual conventions and on media directed at our networks.
Giving Back
Giving back to our communities is part of our culture. All around the world, RE/MAX affiliates make a difference in their communities. For the past 30 years, RE/MAX affiliates have been making miracles happen through our partnership with Children's Miracle Network Hospitals (CMN Hospitals) in the United States and Canada. During this time, RE/MAX Associates have donated over $185 million to CMN Hospitals. CMN Hospitals raises funds and awareness for 170 member children’s hospitals, which provide 32 million patient visits to 10 million kids each year across the U.S. and Canada. All donations made by RE/MAX Associates through the Miracle Home® program and Miracle Property Program or from local fund-raising events, go to the local member children’s hospital to fund critical treatments and healthcare services, pediatric medical equipment, and charitable care.
In 2018, Motto founded The Motto Mortgage Mission Against Hunger as a way for our nationwide network to give back to the communities we serve every day. The Motto network organizes food drives across the country and Motto Mortgage headquarters staff volunteers regularly at a food pantry in Denver, Colorado.
Environmental Sustainability and Employee Safety
We are committed to sustainability in our operations. Our headquarters building is LEED certified. We have many initiatives at headquarters to minimize our environmental footprint and create a safe and comfortable working environment, including single-stream recycling and composting throughout the building, reusable dishes and utensils in dining areas and break rooms, low-flow plumbing fixtures, a recent LED lighting retrofit with most lights on timers or photocells, a direct digital control HVAC system, and drip irrigation landscaping. We use an environmental consultant to assess design and construction and an industrial hygienist to evaluate usage of chemicals. The COVID-19 pandemic created an opportunity to further improve safety in our building operations and properties. For example, workstations and offices have been either replaced or modified to improve cleaning efficiencies and protocols and touchless door and appliance features have been installed to promote safety for our employees and tenants. We offer most employees the option of working from home and have many employees who are fully remote, which reduces emissions associated with employees commuting to the office. We recently refreshed the space in our headquarters building to strive for more efficient resource utilization both by reducing our own office footprint due to evolving workplace habits, and by increased subleasing of our headquarters building.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 5 |
Code of Conduct and Supplemental Code of Ethics
We have adopted a Code of Conduct applicable to all employees and a Supplemental Code of Ethics applicable to our principal executive, financial, and accounting officers and all persons performing similar functions. Our Code of Conduct emphasizes our core values and that our competitive advantages come by doing MORE – delivering to the max while doing the right thing.
Deliver to the Max: We stay hungry and continually push ourselves to higher levels of performance. We go above and beyond expectations, approaching everything we do with the highest levels of enthusiasm, energy, and pride. We actively learn, listen, improve and evolve; our self-improvement never stops. Customer Obsessed: We put customers first—focusing on their needs and exceeding their expectations. We know the company is built on relationships, so we’re committed to maintaining and growing them. We think big—delivering an experience that’s far beyond the norm, and far beyond what anyone expects. Do the Right Thing: We act with integrity, honesty and transparency. Every day. We hold ourselves to the highest standards in performance, ethics, and accountability. We own our actions and outcomes—taking smart risks with confidence and decisiveness. Together Everybody Wins: We collaborate and communicate—contributing to an environment in which everybody wins. We lead by example; helping others develop their talents and reach their goals. We show gratitude and respect. Everybody’s voice matters. We use resources efficiently, for everybody’s greater good.
The Compensation Committee evaluates how our Executive Officers live our MORE values when evaluating performance and determining annual incentive compensation, as discussed further in the Compensation Discussion and Analysis below.
A copy of each code is available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com. Any amendments to either code, or any waivers of their requirements, that apply to our Directors or Executive Officers will be disclosed on our investor relations website.
6 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
PROPOSAL 1: ELECTION OF DIRECTORS
What am I voting on? Stockholders will elect 4 directors to serve as Class III directors, each for a three-year term. | | | At the 2022 Annual Meeting of Stockholders (the “Annual Meeting”), stockholders will vote to elect four directors to the Board of Directors as Class III directors. Each of the Class III directors elected at the Annual Meeting will hold office until the 2025 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated Stephen Joyce, David Liniger, Annita Menogan, and Teresa Van De Bogart to serve as Class III directors for terms expiring at the 2025 Annual Meeting of Stockholders. In the event that any nominee for Class III director becomes unavailable or declines to serve as a director at the time of the Annual Meeting, the persons named as proxies will vote the proxies in their discretion for any nominee who is designated by the current Board of Directors to fill the vacancy. Three of the nominees currently serve as Directors and we do not expect that any nominee will be unavailable or will decline to serve. |
What is the required vote? Each director must be elected by a plurality of the votes cast. This means that the four nominees receiving the largest number of “for” votes will be elected as directors. We do not have cumulative voting. |
Recommendation of the Board: The Board recommends you vote FOR each of the nominees in this Proposal 1.
Class III Directors nominated for election or re-election at this year’s annual meeting. | |||
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Stephen P. Joyce | David L. Liniger | Annita M. Menogan | Teresa S. Van De Bogart |
Stephen brings extensive franchising and public company leadership to his role as Director and as CEO, a position he currently holds on an interim basis. | As RE/MAX co-founder, David brings nearly five decades of leadership experience at the Company and a deep expertise in real estate and franchising. | Annita will bring significant legal and corporate governance expertise and experience leading companies through transitions. | Teresa brings substantial expertise in technology and information security as well as finance and management. |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 7 |
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Gender Diversity1 | | | RE/MAX Holdings Tenure |
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Racial Diversity1 | | | Independence1 |
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Gender Diversity: 55% women. RE/MAX Holdings Tenure: Average tenure 6.7 years. Less than 3 years: 20%, greater than 5 years, 80%. Racial diversity: 18% diverse. Independence: 72% independent.
1 Includes new nominee (Annita Menogan)
✓ 11 Members of the Board of Directors (including nominee) ✓ 8 Independent Directors (including nominee) ✓ Lead Independent Director ✓ Separate Chair and CEO ✓ Corporate Governance Guidelines ✓ Independent Directors Meet Without Management or Other Directors ✓ Board and Committee Self-Evaluations ✓ Annual Review of Director Independence | ✓ Policy for Auditor Independence ✓ Independent Compensation Consultant ✓ Anti-Hedging and Anti-Pledging Policy ✓ Clawback Policy for Executive Compensation ✓ Board Succession Plan ✓ Management Succession Plan ✓ Committee Charters ✓ Board Onboarding Process ✓ Annual Compliance Training for Directors and Employees ✓ Demonstrated Commitment to Director Education |
* All members of the Audit, Compensation, and Nominating and Corporate Governance committees are independent.
8 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
Our Board of Directors currently consists of ten members and will have eleven members after a new member is elected at the Annual Meeting. The Board is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to Directors whose terms expire will be elected to serve until the third annual meeting following election. The following table summarizes information about each Director nominee and continuing Directors.
Director and | Age | RMAX Director Since | Independent | COMMITTEES | |||||||||||
Audit | Compensation | Finance and | Nominating and Corporate Governance | ||||||||||||
CLASS III―DIRECTOR NOMINEES (FOR TERMS EXPIRING IN 2025) | |||||||||||||||
Stephen P. Joyce | 62 | 2020 | | | | M | | ||||||||
David L. Liniger Non-Executive Chair and Co-Founder of RE/MAX, former CEO | 76 | 2013 | | | | | | ||||||||
Annita M. Menogan Former General Counsel, Secretary, and Compliance Officer at Atkins Nutritionals / The Simply Good Food Company | 67 | n/a | ✓ | (Committee assignments to be determined) | |||||||||||
Teresa S. Van De Bogart | 66 | 2016 | ✓ | M | | | M | ||||||||
CLASS I―CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2023) | |||||||||||||||
Joseph A. DeSplinter | 68 | 2016 | ✓ | M | | C | | ||||||||
Roger J. Dow | 75 | 2013 | ✓ | | C | | | ||||||||
Ronald E. Harrison | 86 | 2013 | ✓ | | M | | M | ||||||||
Laura G. Kelly | 65 | 2020 | ✓ | M | M | | | ||||||||
CLASS II―CONTINUING DIRECTORS (WITH TERMS EXPIRING IN 2024) | |||||||||||||||
Kathleen J. Cunningham | 75 | 2013 | ✓ | C | | M | | ||||||||
Gail A. Liniger | 76 | 2013 | | | | | | ||||||||
Christine M. Riordan | 57 | 2015 | ✓ | | M | | C | ||||||||
Number of Meetings in 2021: | 13 | 5 | 3 | 4 | |||||||||||
2022 Proxy Statement | RE/MAX Holdings, Inc. | 9 |
Diversity of Skills, Qualifications, and Experience
Your Board members possess a diverse range of skills and experience including in the areas below. The table shows the number of members with substantial experience in each area.
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| | Cyber Security | | 1 |
| | Finance Board members with strong financial backgrounds assist the Board in its oversight of the Company’s accounting and financial reporting. Two members are “audit committee financial experts.” | | 6 |
| | Franchise Expertise | | 7 |
| | Global RE/MAX, with a presence in over 110 countries and territories, continues to grow quickly in international markets. Board members with experience in global businesses can help as the Company seeks to expand global revenue opportunities. | | 9 |
| | In-Depth Company Knowledge | | 2 |
| | Public Company Board Experience (other than RMAX) Experience on other public company boards gives members a broad perspective on the issues that public companies face. | | 3 |
| | Real Estate Expertise | | 5 |
| | Technology Expertise | | 4 |
10 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
Nominees for Election at the Annual Meeting (For Terms that will Expire in 2025) (Class III)
David L. Liniger Age: 76 RMAX Director Since: 2013 Committee Membership: None |
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David L. Liniger is the non-executive Chair of our Board of Directors and our Co-Founder. He has been Chair of the Board of Directors of RE/MAX Holdings since July 2013, and, before that, of RE/MAX, LLC or its parent and predecessor companies since the first RE/MAX company was founded in January 1973. Mr. Liniger served in a variety of leadership roles within the RE/MAX organization over the past 45 years, including Co-CEO and Principal Executive Officer from May 2017 through February 2018 and CEO from December 2014 until May 2017. Mr. Liniger is married to Gail Liniger, our Vice Chair and Co-Founder. Mr. and Mrs. Liniger were named to the International Franchise Association’s Hall of Fame in 2005. The Board recommends you vote for Mr. Liniger because of his role in co-founding RE/MAX and launching Motto Mortgage, his intimate knowledge of our Company, and his long history as a visionary in the real estate industry. | Key Skills |
Real Estate Industry Expertise
Franchise Industry Expertise
Global Business Experience
Deep Company Specific Knowledge—RE/MAX Co-Founder |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 11 |
| Stephen P. Joyce Age: 62 RMAX Director Since: 2020 Committee Membership: Finance and Investment |
Key Skills | Stephen P. Joyce was appointed to the Board of Directors of RE/MAX Holdings in April 2020. Mr. Joyce began serving as Chief Executive Officer on March 1, 2022, serving as co-CEO alongside our outgoing CEO, Adam Contos, for the month of March 2022. Mr. Joyce is serving as Chief Executive Officer on an interim basis until the Company appoints a new Chief Executive Officer. Further information about Mr. Joyce can be found under “Executive Officers.” The Board recommends you vote for Mr. Joyce due to his leadership of franchise brands, both as a board member and as an executive. |
Public Company Board Experience
Franchise Industry Experience
Technology Experience
Global Business Experience |
Annita M. Menogan Age: 67 Nominee for Election Committee Membership: To be determined |
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Annita M. Menogan has been nominated for election to the Board. Ms. Menogan has nearly four decades of experience as a business and corporate attorney, including 20 years as chief legal and governance executive with publicly held companies. She served as General Counsel, Corporate Secretary, and Compliance Officer of Atkins Nutritionals, Inc. / The Simply Good Foods Company from 2015 through 2018 and, prior to that was Senior Vice President, Chief Legal Officer, and Corporate Secretary for Red Robin Gourmet Burgers, Inc. from 2006 through 2013. Prior to that she was Vice President, Corporate Secretary, and Deputy General Counsel at Adolph Coors Company and Molson Coors Brewing Company. She has worked in private law practice. She has served on the Board of Children’s Hospital Colorado since 2014, and on the Board of the National Association of Corporate Directors, Colorado Chapter since 2018. Previously she has served on the Boards of Denver Kids, Inc. and the University of Denver, Sturm College of Law Institute for the Advancement of the American Legal System. Additionally, she has served on the boards of several other non-profits. The Board recommends you vote for Ms. Menogan due to her deep expertise in legal and governance matters and extensive experience as a public company executive, including at a publicly held franchisor. | Key Skills |
Franchise Industry Experience
Legal Expertise
Public Company Leadership |
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65 : 2016 : Audit, Nominating and Corporate Governance | |
| Teresa S. Van De Bogart Age: 66 RMAX Director Since: 2016 Committee Membership: Audit, Nominating and Corporate Governance |
Key Skills
Public Company Leadership
Technology Experience
Cybersecurity Knowledge | Teresa S. Van De Bogart was first elected to the Board of Directors in May 2016. Ms. Van De Bogart retired in 2019 as Vice President—Global IT Solution Delivery for Molson Coors Beverage Company, a position she held since 2012. She had been an IT vice president of Molson Coors (and its predecessors) since 2005 establishing a global project management office and leading large-scale global project implementations. She previously served in various other leadership roles at the company including procurement, finance and accounting. Ms. Van De Bogart is a Board Leadership Fellow of NACD and has earned the NACD Directorship Certification®. She additionally serves on the Board of Sunflower Bank where she serves as chair of the risk committee and as a member of the compensation committee as well as Craig Hospital Foundation Board where she serves as chair of the nominating and governance committee. She previously served as the board chair for the Colorado Women’s Chamber of Commerce as well as the Women’s Leadership Foundation. The Board recommends you vote for Ms. Van De Bogart because of her information technology and financial background including security trends and risk assessment, and her experience as a senior leader in a global public company. |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 13 |
Directors Whose Terms Expire in 2024 (Class II Directors):
| Kathleen J. Cunningham Age: 75 RMAX Director Since: 2013 Committee Membership: Audit (Chair), Finance and Investment |
Key Skills | Kathleen J. Cunningham was first appointed to the Board of Directors of RE/MAX Holdings in July 2013 and serves as Chair of the Audit Committee. She was a member the Board of Managers of RMCO, LLC (“RMCO”) from February 2013 until she transitioned to the RE/MAX Holdings Board. Ms. Cunningham has been retired since 2009. From October 2005 to May 2009, she was Chief Financial Officer of Novatix Corporation. She was previously Chief Financial Officer at Webroot Software and US WEST Information Systems. She has been a board member of Q Advisors, LLC since 2003. Previously, she served on the boards of Chileno Bay LLC from December 2011 to October 2013, The Assist Group from June 2011 to March 2013 and Novatix Corporation from 2005 to 2009. Ms. Cunningham has served on a total of four public company boards and their audit committees. Ms. Cunningham is a Board Leadership Fellow of the NACD and is a co-founder and past President of its Colorado Chapter. Ms. Cunningham was selected for our Board because of her particular knowledge of and experience in finance, capital structure, and board governance practices of other major organizations. |
Financial Expertise
Global Business Experience
Technology Expertise
Public Company Board Experience |
Gail A. Liniger Age: 76 RMAX Director Since: 2013 Committee Membership: None |
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Gail A. Liniger is our Vice Chair and Co-Founder. She has been a Director of RE/MAX Holdings since July 2013 and, before that, of RE/MAX, LLC or its parent companies, since 1974. Mrs. Liniger held many officer positions with the Company since its founding in 1973, including President from 1979-1991, and Chief Executive Officer from 1991 through 2002. Mrs. Liniger is married to David Liniger, our Chair and Co-Founder. Mr. and Mrs. Liniger were to the International Franchise Association’s Hall of Fame in 2005. Ms. Liniger was selected for our Board because of her role in founding RE/MAX, and her intimate knowledge of the Company and the real estate industry. | Key Skills |
Real Estate Experience
Franchise Industry Expertise
Company Specific Knowledge – RE/MAX Co-Founder |
14 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
| Christine M. Riordan Age: 57 RMAX Director Since: 2015 Committee Memberships: Nominating and Corporate Governance (Chair), Compensation |
Key Skills | Christine M. Riordan, Ph.D. was first appointed to the Board of Directors of RE/MAX Holdings in January 2015. She is Chair of the Nominating and Corporate Governance Committee. Dr. Riordan is President of Adelphi University in New York, a top-150 ranked comprehensive university. Dr. Riordan is an internationally recognized expert in leadership, talent development and career success, strategy, team performance, and diversity and inclusion. For more than twenty-five years, she has designed leadership and diversity and inclusion programs, and served as an executive coach for senior-level executives within various industries. She has experience in the financial services, insurance, real estate, mortgage, franchised businesses, human resources/talent development, consulting, non-profit, and higher education industries. She also currently serves on the board of directors of the Commission for Independent Colleges and Universities and as a Trustee for Adelphi University. Dr. Riordan is a Board Leadership Fellow of the NACD. Dr. Riordan was selected for our Board because of her deep experience as a senior executive and chief executive officer, broad business background, board experienced, and expertise in leadership and strategy. |
Strong Leadership Experience
Broad Business Experience |
Directors Whose Terms Expire in 2023 (Class I Directors):
Joseph A. DeSplinter Age: 68 RMAX Director Since: 2016 Committee Membership: Finance and Investment (Chair), Audit |
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Joseph A. DeSplinter was first appointed to the Board of Directors of RE/MAX Holdings in February 2016. He serves as Chair of the Finance and Investment Committee. Mr. DeSplinter was a partner with Ernst & Young for nearly 30 years prior to his retirement in 2014. In that role, he served clients in many industries, particularly real estate, financial services, banking, and technology. Mr. DeSplinter served as the office managing partner for the Phoenix and Denver offices for ten years, which included fulfilling a number of regional roles, such as market strategy development. Mr. DeSplinter led the firm’s U.S. private equity professional practice group for five years, which also entailed serving on its U.S. professional practice committee. He also led the firm’s Americas’ Assurance implementation and enablement group for three years, focused on the rollout of the latest technological changes to the assurance group. As a result of these various roles, he has worked in a number of countries and has significant international experience. Mr. DeSplinter previously served on the Board of Directors and member of the audit committee of the Catholic Foundation of Northern Colorado from September 2015 through June 2021 and was a member of the Board of Directors and Chairman of the Audit Committee of Adolfson & Peterson Construction Company from June 2015 through June 2019. Mr. DeSplinter is a Board Leadership Fellow of the NACD. Mr. DeSplinter was selected for our Board because of his strong financial background and vast experience advising public companies. | Key Skills |
Financial Expertise
Global Business Experience
Real Estate Industry Experience
Technology Expertise |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 15 |
| Roger J. Dow Age: 75 RMAX Director Since: 2013 Committee Membership: Compensation (Chair) |
Key Skills | Roger J. Dow was first appointed to the Board of Directors of RE/MAX Holdings in July 2013 and serves as Lead Independent Director and as Chair of the Compensation Committee. He has served as a member of the Company’s Board of Directors or Board of Managers since 2005. Since January 1, 2005, he has been the President and Chief Executive Officer of the U.S. Travel Association. He previously served in various roles at Marriott International, including as Senior Vice President, Global Sales. He is currently a director of Forbes Travel Guide. Mr. Dow was selected for our Board because of his particular knowledge of and experience in strategic planning and leadership of complex organizations and his franchising experience. |
Strategic Planning Experience
Strong Leadership Experience
Franchise Industry Experience |
Ronald E. Harrison Age: 86 RMAX Director Since: 2013 Committee Memberships: Compensation, Nominating and Corporate Governance |
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Ronald E. Harrison was first appointed to the Board of Directors of RE/MAX Holdings in July 2013 and has served on the Company’s Board of Directors or Board of Managers since 2005. Since 2004, Mr. Harrison has been Chief Executive Officer and Managing Director of Harrison & Associates LLC. Prior to that, he served in various roles over his 40 years with PepsiCo, Inc., including as Senior Vice President, External Relations, and Special Assistant to the Chairman until April 2004. Mr. Harrison is the Chair Emeritus of the Diversity Institute of the International Franchise Association’s Education Foundation. He served as the International Franchise Association’s Chairman in 1999. He has also served on the Board of Trustees of the College of New Rochelle and on the Advisory Board of the University of New Hampshire’s Rosenberg Center for International Franchising. Mr. Harrison was selected for our Board because of his vast experience in leadership roles of complex organizations and knowledge in strategic planning. | Key Skills |
Financial Experience
Strong Leadership Experience
Franchise Industry Expertise |
16 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
| Laura G. Kelly Age: 65 RMAX Director Since: 2020 Committee Memberships: Audit, Compensation |
Key Skills | Laura G. Kelly was elected to the Board of Directors of RE/MAX Holdings in 2020. Ms. Kelly previously served as President of The Columbia Institute for CoreLogic also served as its Managing Director of Valuation Solutions, a hybrid technology and operating subsidiary with revenues of nearly $500 million. Before joining CoreLogic, Ms. Kelly had significant executive and financial responsibilities at Dun & Bradstreet, American Express and MasterCard. Ms. Kelly is also a member of the Board of Directors for Jack Henry (NASDAQ: JKHY), a financial technology company, and USAA’s Saving’s Bank Board. Ms. Kelly’s early career included service to her country as an active duty and reserve officer for the United States Air Force. Ms. Kelly was selected for our Board because of her experience in leading global change and innovation and extensive background in financial services and data solutions. |
Global Business Experience
Public Company Board Experience |
Board Diversity and Refreshment
David and Gail Liniger founded RE/MAX with the view that anyone can be an entrepreneur, regardless of race, gender, or background. The RE/MAX network has grown to nearly 9,000 offices with over 140,000 agents from virtually every walk of life who share a commitment to helping people realize the dream of homeownership. That commitment to diversity, which is shared by its start-up sister brand, Motto, continues today and is reflected in our Board and management team.
The Board aims to have directors with diverse backgrounds, viewpoints, and experiences. To that end, the Board pays special attention to the diversity of its members and potential nominees, and the Board believes its oversight capabilities are bolstered by its diverse composition.
Gender and Racial Diversity | |
(Includes new nominee) | More than half of our Board members are women or from racially diverse populations: our Board currently has five female Directors and one Black Director and this year’s new nominee is a Black woman. Most of the new members since our initial public offering in 2013 (the “IPO”) are women. Women serve as the Chairs of both our Audit and Nominating and Corporate Governance Committees. The Nominating and Corporate Governance Committee does not have a formal policy regarding diversity, but continually looks for opportunities to maintain and increase the diversity of the Board. |
The Board aims to have diverse mix of tenure on the Board, so that the Board has members with substantial experience with the Company as well as newer members who bring fresh perspectives to the Board. Five of the current members of the Board have joined since our IPO in 2013, including two new members in 2020 and we are adding one new member at the Annual Meeting.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 17 |
Our Board periodically assesses the independence of its members. For a Director to be considered independent, our Board must affirmatively determine that the Director does not have any direct or indirect material relationship with us, other than as a Director, that would interfere with their exercise of independent judgment in carrying out their responsibilities as a Director of the Company. When assessing the materiality of a Director’s relationship with us, our Board will consider the question not merely from the standpoint of the Director, but also from the standpoint of persons or organizations with which the Director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, social, and familial relationships, among others.
The Board of Directors has determined that Kathleen Cunningham, Joseph DeSplinter, Roger Dow, Ronald Harrison, Laura Kelly, Christine Riordan, and Teresa Van De Bogart are each an “independent Director” under applicable New York Stock Exchange (“NYSE”) standards and the Company’s corporate governance guidelines, and that none of these Directors have any relationships with the Company that would interfere with their exercise of independent judgment in carrying out their responsibilities as a Director of the Company. The Board has also determined that Annita Menogan, who has been nominated for election to the Board, will be independent under these same standards.
Mr. Joyce was previously considered independent; however, he currently serves as our Chief Executive Officer on an interim basis and, due to that role, the Board has determined that he is not independent at this time. Once Mr. Joyce’s interim service ends, the Board will reassess whether he qualifies as an independent Director depending on the length of his service as Chief Executive Officer and other factors.
David and Gail Liniger have not, since our IPO, been considered independent Directors, due to their service as officers of the Company. The Linigers have a close, personal relationship with our former CEO, Adam Contos, and his family, which the Linigers and Mr. Contos describe as like immediate family. As a result, Mr. and Mrs. Liniger represented that they recused themselves from any matters relating to Mr. Contos and his performance, including evaluations of his performance, compensation, and continued employment. In addition, as befitting such relationships, the Linigers and Contoses occasionally give gifts to each other, such as the cost of vacations they spend together, or the Linigers’ contributions to the Contos children’s college funds. These gifts are made from the Linigers’ personal funds and the Board is satisfied that they are intended as gifts in good faith. Because of this, and because there is no incremental cost to the Company, those amounts are not considered income to Mr. Contos or compensation from the Company and are not included in the Compensation Discussion and Analysis, below.
Board of Directors Leadership Structure; Separate Board Chair and Chief Executive Officer; Formal Lead Independent Director Role
The Board annually elects a Chair of the Board. Currently the roles of Chair and CEO are split between Mr. Joyce, our Chief Executive Officer, and Mr. Liniger, the Chair of the Board, who serves in a non-executive capacity. The Board believes it is important to retain the flexibility to determine whether it is in the best interest of the Company and its stockholders to have the same person serve as both CEO and Chair or whether the roles should be separated based on the circumstances at any given time. Mr. Liniger was most recently re-elected as Chair of the Board in February 2022. The independent members of the Board elect a Lead Independent Director annually. The role of the Lead Independent Director is defined in the Company’s Bylaws and Lead Independent Director charter, which are both available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com.
| Chief Executive Officer | | Lead Independent | | Chair of the Board | |
| Mr. Joyce has been CEO since March 2022. Mr. Joyce is serving in this capacity on an interim basis while the Company searches for a new Chief Executive Officer. Mr. Joyce is the principal management representative of the Company and is responsible for all aspects of oversight of the management team and day-to-day operations. | | Roger Dow was first elected Lead Independent Director in May 2019 and was most recently reelected in February 2022. The role is described below. | | Mr. Liniger’s role as Chair of the Board allows him to provide leadership as a RE/MAX co-founder and real estate industry veteran and to focus on considerations of long-term strategy for the business. | |
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18 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
Enterprise Risk Management and Board of Directors Role in Risk Oversight
Risk management is primarily the responsibility of the Company’s management, and the Board of Directors oversees an enterprise-wide approach to risk management designed to support the achievement of corporate objectives, including strategic objectives, to improve long-term Company performance and enhance stockholder value. A fundamental part of risk management is to understand the specific risks the Company faces and what mitigating steps are being taken, while balancing an appropriate level of risk for the Company. The Company’s enterprise risk management (“ERM”) program provides an effective tool for managing risks. As part thereof, annually, management evaluates a comprehensive list of enterprise risks, identifies those that are most significant and ensures that, where possible, adequate risk mitigation strategies are deployed. At least annually, management provides the Audit Committee with a comprehensive review of the Company’s ERM processes, as well as updates on key risks that have been identified and assessed during the year and the accompanying mitigation strategies. Additional risk assessments are performed, as required, for material events such as the integration of acquired businesses, and those results are also shared with the Audit Committee. On an annual basis, the Board discusses enterprise risk activities including risk assessment and risk management.
In addition to the Company’s ERM process, the oversight of additional specific risks is performed by committees of the Board. The Audit Committee is primarily responsible for overseeing the quality and integrity of the Company’s financial reporting process, internal controls over financial reporting, the Company’s compliance programs, and the risks related to each of these areas. Oversight of the Company’s management of cybersecurity risks is also primarily the responsibility of the Audit Committee. To effectively address the cybersecurity threats present in today’s environment, RE/MAX has a dedicated Information Security team responsible for leading enterprise-wide information security strategy, policy, standards, architecture, and processes. Our comprehensive information security program includes, among other aspects, threat management, vulnerability management, incident response management, access management, and monitoring. The Vice President of Information Technology (who serves as the Company’s Information Security Officer), along with the Chief Compliance Officer, lead regular reviews and discussions with the Audit Committee, including results of testing and training, initiatives to continuously improve cybersecurity measures and policies, and implementation of new technologies. The ERM process discussed above includes evaluation of information technology risks. We have an Incident Response Policy and Plan in place which provides a framework for handling security incidents and facilitates coordination across the Company. We collaborate with vendors and other third parties on threat intelligence, vulnerability management, and response. All employees receive annual cybersecurity awareness training, and we provide information to employees throughout the year. We also provide educational resources and information to our franchisees about cybersecurity.
The Compensation Committee oversees compensation-related risks and oversees an annual compensation risk assessment. The Nominating and Corporate Governance Committee oversees the Company’s corporate governance programs, including the Code of Conduct. The Nominating and Corporate Governance Committee also oversees management of social and environmental matters. The Finance and Investment Committee oversees risks such as those relating to capital structure and allocation, investment of cash, interest rates, currency, and other financial arrangements. Management regularly reports to the Board and its committees on the risks that the Company may face and the steps that management is taking to mitigate those risks.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 19 |
Board of Directors Role in Succession Planning
Succession planning is a crucial role of the Board in ensuring the long-term performance of the Company. The Board maintains, and at least annually evaluates and updates, succession plans for Executive Officers, other key management positions as well as for the Chair of the Board and Lead Independent Director roles. These plans cover both planned and emergency succession scenarios. Executive management regularly discusses succession planning with the Board, including reviewing development plans for senior non-executive employees who may be candidates for future executive positions. The Board executed its succession plan in connection with Mr. Contos’s departure, by appointing Mr. Joyce to serve as Chief Executive Officer on an interim basis until the Board completes its search for a permanent replacement.
Our Board’s Commitment to Director Training and Education
Our Board of Directors is committed to continuing director education. As highlighted in their biographical information above, many of our Board of Directors have been named as Fellows by NACD and one has earned a Directorship Certification. For the past several years, the Board has engaged NACD for annual customized training sessions for all members. During 2021, the customized training session focused on environmental, social, and governance (ESG) matters and investor relations. Previous sessions have covered topics such as mergers and acquisitions, building the board as a strategic asset, company culture, stockholder engagement, communication, and transitioning from a controlled company. All then-current members attended each of these sessions.
Board of Directors Evaluation Process
The Board, under the direction of the Nominating and Corporate Governance Committee, conducts an assessment of the Board, its committees, and its members. The timing of the assessment may vary from year to year but occurs approximately once per year. Each Director is asked to evaluate the performance of the Board and the committees on which he or she serves. In order to encourage Directors to speak candidly, responses to evaluation questions are collected by the Company’s counsel or an outside consultant, who provides aggregated responses that protect the anonymity of individual ratings and comments. Each committee discusses its own assessment results, and the Nominating and Corporate Governance Committee reviews all results and reports the results to the Board. The Nominating and Corporate Governance Committee also oversees an evaluation of the skills, background, and experience of each Board member to ensure an appropriate mix of expertise on the Board.
Our Board is divided into three classes, with each member serving a three-year term. Our Board believes that this structure continues to be appropriate. Our Board believes that a classified Board promotes stability, continuity, and a focus on the long-term interests of the Company and its stockholders and that three-year terms enhance Board independence.
20 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
During 2021, our Board of Directors had the following standing committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Finance and Investment Committee. From time to time, the Board may also establish committees for special limited purposes.
The Board met 11 times in 2021. The tables below show the number of times each committee met in 2021. In 2021, most Directors attended 100% of the meetings of the Board and the committees on which they serve, and no Directors attended less than 90% of the total number of meetings of the Board and committees on which they serve.
The tables below summarize some information about each committee. More information about each committee can be found in the committees’ charters, which have been adopted by the Board and are reviewed annually. The charters are available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com. The content of our website is not incorporated in this proxy statement.
| AUDIT COMMITTEE | | Our Audit Committee is fully independent under applicable NYSE standards and Rule 10A-3 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”). Our Board of Directors has determined that Kathleen Cunningham and Joseph DeSplinter each qualifies as an “Audit Committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. | |
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| Meetings: 13 | | |
| Chair: Kathleen Cunningham | |||
| Other Members: | | ||
| ● Joseph DeSplinter ● Teresa Van De Bogart ● Laura Kelly | | ||
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| Key Responsibilities: | | | |
| ● appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; | |||
| ● discussing with our independent registered public accounting firm its independence from our management; | |||
| ● reviewing with our independent registered public accounting firm the scope and results of their audit; | |||
| ● approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; | |||
| ● overseeing the financial reporting process and discussing the interim and annual financial statements that we file with the Securities and Exchange Commission (“SEC”) with management and our independent registered public accounting firm; | |||
| ● reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; | |||
| ● monitoring the implementation and impact of new accounting policies; | |||
| ● establishing procedures for the confidential and/or anonymous submission and review of concerns regarding questionable accounting, internal controls, auditing matters, or anything else that appears to involve financial or other wrongdoing; | |||
| ● reviewing and approving related party transactions; and | |||
| ● overseeing the Company's efforts to mitigate cybersecurity risks. | |||
| The Audit Committee reviews our annual reports and makes recommendations to the full Board about its approval. The Audit Committee reviews and approves our quarterly reports and earnings releases for the first, second, and third quarters. After approving the first dividend each year and determining the anticipated dividend for the remainder of the year, the Board generally delegates authority to the Audit Committee to approve the subsequent quarterly dividend for that year, within parameters established by the Board. | |||
2022 Proxy Statement | RE/MAX Holdings, Inc. | 21 |
| COMPENSATION COMMITTEE | Our Compensation Committee is fully independent under applicable Exchange Act rules and NYSE standards. | |
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| Meetings: 5 | |
| Chair: Roger Dow | ||
| Other Members: | ||
| ● Ronald Harrison ● Christine Riordan ● Laura Kelly | ||
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| Key Responsibilities: | ||
| ● reviewing and approving the compensation of our Directors and Executive Officers; | ||
| ● overseeing compensation of other officers; | ||
| ● reviewing key employee compensation goals, policies, plans, and programs; | ||
| ● administering the RE/MAX Holdings, Inc. Omnibus Incentive Plan; | ||
| ● reviewing and approving employment agreements and other similar arrangements between us and our Executive Officers; | ||
| ● reviewing the Compensation Discussion and Analysis and Compensation Committee Report contained in this proxy statement; and | ||
| ● engaging any compensation consultants. | ||
| The Compensation Committee’s role is discussed further below in the Compensation Discussion and Analysis. | ||
| NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | Our Nominating and Corporate Governance Committee is fully independent under applicable Exchange Act rules and NYSE standards. | |
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| Meetings: 4 | |
| Chair: Christine Riordan | ||
| Other Members: | ||
| ● Ronald Harrison ● Teresa Van De Bogart ● | ||
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| Key Responsibilities: | ||
| ● identifying and evaluating potential candidates for the slate of Directors nominated for election by stockholders at annual meetings and vacancies occurring on the Board from time to time and making recommendations to the Board regarding qualified individuals to be members of our Board of Directors; | ||
| ● overseeing the organization of our Board of Directors to discharge the Board’s duties and responsibilities properly and efficiently; | ||
| ● developing and recommending to our Board of Directors a set of corporate governance guidelines and principles and reviewing portions of our code of conduct related to corporate governance; | ||
| ● assisting the Board in developing, evaluating, and updating succession plans for key leadership roles, both in Company management and at the Board level; | ||
| ● overseeing the Company’s management of environmental, social, and governance (ESG) matters and initiatives; and | ||
| ● overseeing the Board’s annual self-evaluation. | ||
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| FINANCE AND INVESTMENT COMMITTEE | ||
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| Meetings: 4 | |
| Chair: Joseph DeSplinter | ||
| Other Members: | ||
| ● Kathy Cunningham ● Stephen Joyce | ||
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| Key Responsibilities | ||
| ● assisting the Board with oversight, approval, and recommendations regarding capital structure and capital strategy, return of capital to shareholders, investment of cash, management of financial risks such as interest rate and currency risks and | ||
| ● overseeing management of tax issues, including tax receivable agreements. | ||
We encourage all Directors to attend our annual meetings of stockholders. All of our Directors and nominees attended the 2021 annual meeting of stockholders. The Annual Meeting will coincide with a regularly scheduled meeting of the Board and, because the Annual Meeting will be completely virtual, we expect that all members and nominees will attend the meeting virtually. We do not have a formal policy with respect to Director attendance at annual meetings of stockholders.
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Nominating and Corporate Governance Committee Responsibilities: The Nominating and Corporate Governance Committee is responsible for evaluating potential candidates and making recommendations to the Board of Directors with respect to candidates to be nominated to serve as Directors. The Nominating and Corporate Governance Committee ensures that candidates meet qualifications necessary under SEC rules or NYSE standards. | Factors Considered by the Committee: Among the qualifications the Nominating and Corporate Governance Committee may consider are: ● personal and professional integrity; ● exceptional ability and judgment; ● broad experience in business, finance, legal, and/or administration; ● familiarity with the real estate, mortgage, and/or franchising industries; ● executive leadership experience; ● service on other boards; ● ability to serve the long-term interest of our stockholders; and ● sufficient time to devote to the Board duties. |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 23 |
Director Recommendations and Nominations by Stockholders
The Nominating and Corporate Governance Committee welcomes the Company’s stockholders to nominate candidates for Board membership. The Committee will consider any such nominee in the same manner in which it evaluates other potential nominees, so long as the recommendation is submitted in accordance with the Company’s Bylaws and the Committee’s charter. A summary of the requirements for nominating candidates is below under “Information Regarding Stockholder Proposals.”
We value the opportunity to engage with our stockholders and gain insight into their perspectives on our business strategy, governance, and compensation practices. Executives and management from the RE/MAX Holdings investor relations team meet regularly with stockholders on a variety of topics. Annually, a cross-functional group from our finance, legal, and investor relations teams conducts an investor outreach to gather feedback on key strategic initiatives, corporate governance matters, executive compensation, and other topics of interest to our stockholders. We also regularly engage with proxy advisory firms. Feedback received during these conversations is communicated to and discussed by the full Board and helps to inform our ongoing decision-making on our governance, compensation, and other practices.
Communication with the Board of Directors
We believe communication between the Board and our stockholders is an important aspect of corporate governance. Any stockholder or other interested party who would like to communicate with the Board of Directors, the Chair, the Lead Independent Director, the independent Directors as a group, or any specific member or members of the Board of Directors should send such communications to the attention of our Corporate Secretary at 5075 S. Syracuse St., Denver, CO 80237 or legal@remax.com. Communications should contain instructions regarding the Directors for whom the communication is intended. In general, such communication will be, depending on the nature of the communication, either forwarded or periodically presented to the intended recipients. However, we may, in the Corporate Secretary’s discretion, decline to forward any communications that are abusive, threatening, or otherwise inappropriate, or may summarize communications as appropriate.
Compensation Committee Interlocks and Insider Participation
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 other entity that has one or more executive officers serving on our Board of Directors.
Corporate Governance Guidelines
We have adopted corporate governance guidelines that provide a framework for corporate governance. The corporate governance guidelines address, among other matters, selection of directors, director independence, director responsibility, director access to management, director compensation, information about the Board and its committees, director orientation and continuing education, management succession, and evaluation of the Board. The corporate governance guidelines are available on our investor relations website, accessible through our principal corporate website at www.remaxholdings.com.
24 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Roadmap
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1 | | | Our Named Executive Officers | |
| | Our five Named Executive Officers for 2021 | 26 | |
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2 | | | Overview and Philosophy of our Executive Compensation Program | 28 |
Compensation philosophy and an overview of decisions on compensation practices | | |||
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3 | | | Compensation Best Practices | 29 |
Examples of practices we follow and some that we avoid | | |||
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4 | | | Performance Highlights | 29 |
Our key business achievements in 2021 | | |||
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5 | | | Elements of Executive Compensation | 30 |
Explanation of our primary components of executive compensation | | |||
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6 | | | Peer Groups | 32 |
| | | List of Peer companies used in 2021 | |
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7 | | | Other Compensation Policies and Risk Assessment | 33 |
Overview of other compensation policies and practices, including stock ownership guidelines, clawback policy, and compensation risk assessment | | |||
2022 Proxy Statement | RE/MAX Holdings, Inc. | 25 |
In this Compensation Discussion and Analysis, we provide information on how we compensate our Named Executive Officers. During 2021, five individuals were designated by our Board of Directors as Executive Officers and they are referred to as our “Named Executive Officers” for 2021. Stephen Joyce, who is our current Chief Executive Officer, and Principal Executive Officer, started in that role in March 2022 and therefore is not a Named Executive Officer with respect to 2021.
| Executive Officers | Biography: |
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Stephen P. Joyce Age: 62 Position: Chief Executive Officer | Stephen P. Joyce began serving as Chief Executive Officer on March 1, 2022, serving as co-CEO alongside our outgoing CEO, Adam Contos, for the month of March 2022. Mr. Joyce is serving as Chief Executive Officer on an interim basis until the Company completes its search for a new Chief Executive Officer. Mr. Joyce is the former Chief Executive Officer and served on the Board of Directors of Dine Brands Global, Inc. (NYSE: DIN), the franchisor of Applebee’s Grill + Bar and IHOP. Prior to that he served as President, Chief Executive Officer, and Director of Choice Hotels International, Inc. Prior to that he spent over 25 years at Marriott International, Inc., in several roles, including Executive Vice President Global Development, Owner and Franchise Services. Mr. Joyce has served on the Board of the Hospitality Investors Trust, serving on their Compensation and Special Litigation Committees. Mr. Joyce has held many leadership roles with the International Franchise Association, including Chairman. He also serves on the boards of a variety of community organizations. Mr. Joyce was selected for our Board due to his leadership in franchise brands, both as a Board member and executive. Mr. Joyce was not an executive officer of the Company during 2021 and therefore is not covered in this Compensation Discussion and Analysis. Information about compensation Mr. Joyce received in 2021 as a member of our Board of Directors is under “Director Compensation.” |
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Adam M. Contos Age: 50 Position: Former Chief Executive Officer | Adam M. Contos was our Chief Executive Officer (“CEO”) and principal executive officer throughout all of 2021, a position he held beginning in February 2018. Mr. Contos’s employment with the Company ended in March 2022. Prior to serving as CEO, Mr. Contos served as Co-Chief Executive Officer alongside David Liniger beginning in May 2017. During his more than 15 years at RE/MAX, Mr. Contos has held a variety of leadership positions. He served as Chief Operating Officer from January 2016 to May 2017, as Senior Vice President, Marketing, from February 2015 through January 2016, as Vice President, Business Development, from February 2014 until February 2015, as Vice President, Region Development, from August 2013 through February 2014, and as Regional Vice President from 2005 through August 2013. Mr. Contos is a Board Leadership Fellow of NACD and serves on the Board of the International Franchise Association. |
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| Nicholas R. Bailey is the President and Chief Executive Officer of RE/MAX, LLC. He previously served as President of RE/MAX, LLC since June 2021 and as Chief Customer Officer beginning in September 2019. Mr. Bailey has over 24 years of real estate experience. He previously worked for RE/MAX from 2001 to 2012 leading growth and development for several RE/MAX regions. He left RE/MAX for approximately seven years, first becoming Senior Vice President of Strategic Partnerships at Market Leader from 2012 through its acquisition by Trulia in 2013. Following Zillow’s acquisition of Trulia in 2015, he served as a Vice President of Zillow. Then, Mr. Bailey served as President and CEO of Century 21 Real Estate, LLC from August 2017 to March 2019. |
| Nicholas R. Bailey Age: 47 Position: President and Chief Executive Officer, RE/MAX, LLC |
26 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
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| Karri R. Callahan is our Chief Financial Officer, a position she has held since March 2016. From January 2016 to March 2016 she served as Co-Chief Financial Officer. Ms. Callahan joined RE/MAX Holdings in April 2013 as Senior Manager of SEC Reporting and was promoted to Vice President, Corporate Controller in June 2014. She served as the Company’s Acting Chief Accounting Officer from November 2014 to January 2015 and as Acting Chief Financial Officer from December 2014 through January 2015. Prior to joining the Company, Ms. Callahan worked at Ernst & Young, LLP. |
| Karri R. Callahan Age: 44 Position: Chief Financial Officer | |
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| Serene M. Smith has served as Chief of Staff and Chief Operating Officer since January 2019. She served as Chief Operating Officer since May 2017. Prior to becoming Chief Operating Officer, Ms. Smith served as Senior Vice President, Financial Planning and Business Analytics from January 2016 to May 2017. From April 2014 to December 2015, Ms. Smith served as Vice President, Financial Planning and Analysis and was Vice President, Operational Controller, from April 2010 to April 2014. She has served in various other capacities since joining RE/MAX in 2006. |
| Serene M. Smith Age: 43 Position: Chief of Staff and Chief Operating Officer | |
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| Ward M. Morrison is the President and Chief Executive Officer of Motto Mortgage and wemlo. He previously served as President of Motto since Motto was launched in the fall of 2016. Prior to leading Motto Mortgage, Mr. Morrison served the Company as Vice President, Region Operations from 2013 to 2016, as Region Vice President from 2011 to 2013, and in various other roles since joining the Company in 2005. Due to the continued growth of our mortgage business and its increasing importance to the overall results of the Company, the Board designated Mr. Morrison as an Executive Officer in February 2020. |
| Ward M. Morrison Age: 54 Position: President and Chief Executive Officer of Motto Mortgage and wemlo |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 27 |
28 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
We have adopted common best practices that are consistent with our compensation philosophy and serve the long-term interests of our stockholders. These include the following:
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| What we do: | |
| What we don’t do |
● Our short-term incentive award goals are tied to key Company financial and strategic performance metrics. ● Most executive compensation is “at-risk” and performance driven. ● The majority of long-term incentive awards for Executive Officers have performance-based vesting. ● Payout of long-term incentive (“LTI”) awards based on total shareholder return (“TSR”) is capped at the target level if TSR is negative. ● We have multi-year targets for LTI performance. ● We compare executive compensation targets against a relevant Peer Group to ensure market competitiveness. ● We have stock ownership guidelines. ● We have a clawback policy. ● We conduct a compensation risk assessment. ● Our LTI program encourages retention of key personnel through long-term vesting. ● We consider our Company’s “MORE” values when rewarding annual incentives. | | ● No guaranteed bonuses. ● No excessive perquisites. ● We do not have single-trigger change in control provisions in equity awards. ● Our Insider Trading Policy prohibits hedging or pledging Company stock without Board or Chief Compliance Officer approval. ● We do not pay accumulated dividends on restricted stock units until vesting. | ||
Despite a challenging global economic environment, the Company performed well in 2021.
| | | | | | | |
$329.7M Revenue | $119.7M Adjusted EBITDA1 | ||||||
RE/MAX Holdings continues to focus on growing its RE/MAX and Motto Mortgage brands, thereby increasing revenue and ultimately the Company’s profitability and cash flow.
| | ||
Revenue ($ in millions) | Adjusted EBITDA1 ($ in millions) | ||
|
| ||
1 Adjusted EBITDA is a non-GAAP measure Please see the Appendix on page 56 of this Proxy Statement for a definition of this term and reconciliation with the most directly comparable GAAP measure.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 29 |
The compensation of our Named Executive Officers consists primarily of base salary, short-term incentive, and long-term incentive compensation.
Compensation Element | Key Features | Primary Objectives |
Base Salary | Factors considered in determining Base Salary: ● the recommendation of the CEO, ● market data provided by the Company’s compensation consultant on base salary paid to similar officers at other companies, and ● each officer’s experience and performance. | Attract & Retain quality officers who will drive the Company’s success |
Short-Term Incentive | Each Executive Officer’s short-term incentive target level is based on a percentage of base salary and the actual payout is based on Company and individual performance. | Motivate & Reward officers for meeting and exceeding personal and corporate objectives. |
Long-Term Equity Incentive Compensation | Long-term incentive grants for Executive Officers are restricted stock units, 60% of which have performance-based vesting conditions and 40% of which are time-based. | Incentivize long-term value creation by aligning each officer’s interests with those of stockholders. Reward Company performance. Retain key personnel through long-term vesting. |
Perquisites and Other Benefits (Fixed) | The Company offers a comprehensive benefit package to all full-time employees designed to attract and retain talented employees at all levels. | Attract & Retain talented employees at all levels. |
Pay Mix
|
|
Base salary 18%, bonus 32%, equity grant 49%, other 1%. Average of other NEOs: base salary 25%, bonus 23%, equity grant 51%, other 1%
The tables above show the pay mix for the CEO and the Named Executive Officers as a group for 2021 based on the actual bonus paid and grant date fair value of equity grants (as reflected in the Summary Compensation Table below).
Base Salary
Each Named Executive Officer receives a base salary, which is a fixed component of their compensation. Paying a competitive base salary is a crucial aspect of attracting and retaining qualified leaders who will drive the Company’s success. The Company aims to pay experienced, seasoned officers near the midpoint of the established base salary range for that position, based on data from its compensation consultant. Base salary for each of the Executive Officers is determined by the Compensation Committee, taking into account the recommendation of the CEO (for Executive Officers other than the CEO), market data provided by the Company’s compensation consultant on base salary paid to similar
30 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
officers at other companies, and each officer’s performance, in order to determine a base salary level that is competitive and commensurate with the performance, duties, and experience of each Executive Officer. The CEO and Compensation Committee generally evaluate base salary for Executive Officers annually, taking into account such as changes in the executive’s role or responsibilities, the executive’s experience and job performance, market performance, and other factors deemed appropriate by the Compensation Committee. In 2021, Mr. Contos’s base salary was increased from $700,000 to $750,000; Mr. Bailey’s base salary was increased from $360,000 to $390,000; Mr. Morrison’s base salary was increased from $275,000 to $350,000; Ms. Callahan’s base salary was increased from $360,000 to $385,000 and Ms. Smith’s base salary was increased from $340,000 to $360,000. The salary increases were effective March 1, 2021, except for Mr. Bailey’s, which was effective June 3, 2021.
Annual Incentive
We use annual incentives to motivate and reward Executive Officers for meeting and exceeding personal and Company objectives. For Named Executive Officers, the annual incentive paid with respect to 2021 was one-half cash and one-half Class A common stock of the Company that was fully vested upon grant.
We design the annual incentive so that, at the target level, approximately one third of the CEO’s and one quarter of each other Executive Officer’s total short-term compensation for the year (i.e., such individual’s base salary plus annual incentive) comprises the annual incentive, which depends on individual and Company performance over the prior year. Each year, the Compensation Committee adopts an annual short-term plan (each such plan, an “Annual Plan”) pursuant to the Omnibus Incentive Plan. Pursuant to the Annual Plan for 2021 (the “2021 Annual Incentive Plan”), each of our Named Executive Officers was eligible for an annual incentive based on a percentage of such officer’s base salary.
Award amounts for Executive Officers under the 2021 Annual Incentive Plan are based on both Company and individual performance. For Executive Officers, 60% of the annual incentive is based on Company-wide financial goals and 40% is based on individual strategic goals that are tied to profitable growth.
For Company performance, the Compensation Committee established a measurement called Bonus Adjusted EBITDA1, which is the Company’s Adjusted EBITDA, excluding bonus expense, and including such other adjustments that the Compensation Committee deems appropriate. We believe Adjusted EBITDA reflects the performance of our business and facilitates a meaningful evaluation of operating results on a comparable basis with historical results.
For individual performance, the CEO, working with our Human Resources department, prepares strategic goals for each Executive Officer (other than the CEO). The Compensation Committee then reviews and revises these goals as it deems appropriate, before approving them. Following the end of the year, the Compensation Committee evaluates the officer’s performance against such goals to determine the individual performance used in making the annual incentive determination. The Compensation Committee also evaluates how each Executive Officer lives up to RE/MAX Holdings MORE values in determining the individual component of the short-term incentive.
For both Company financial performance and individual strategic goals, the Compensation Committee has set levels for threshold, target, and stretch performance.
In addition to the plan-based annual incentive, the Compensation Committee has discretion to pay additional bonuses to Named Executive Officers based on special projects or other exceptional circumstances and has authorized the CEO to grant project-based bonuses to other Company non-executive officers or personnel at any time.
Long-Term Equity Incentive Compensation
The Compensation Committee also grants Executive Officers and other Company officers and certain employees equity awards to incentivize long-term value creation by aligning each officer’s interests with those of stockholders, to reward strong performers, and to retain key personnel through long-term vesting.
The Board of Directors, as part of the annual budget process, determines the aggregate budget for all long-term equity awards. The CEO, working with Company management, recommends an individual award for each recipient, including Named Executive Officers (other than the CEO). The Compensation Committee reviews this recommendation and grants equity awards for Executive Officers and, for other recipients, either grants the awards or delegates authority to grant individual awards to the CEO. Generally, the Compensation Committee grants equity awards annually. However, on
1 See the Appendix on page 56 of this Proxy Statement for the definition of Adjusted EBITDA and reconciliation of Adjusted EBITDA to a reconciliation of net income (the most directly comparable GAAP financial measure).
2022 Proxy Statement | RE/MAX Holdings, Inc. | 31 |
occasion the Compensation Committee may grant additional awards, for example, in connection with promotions or new executive hires.
The Compensation Committee believes the long-term incentive program should incentivize performance and align the interests of the officers with stockholders. Toward that end, restricted stock unit grants to officers are generally a mix of performance-based grants and time-based grants. The Compensation Committee believes that this mix of grants aligns with the Company’s compensation philosophy and goals. Performance-based grants incentivize officers to drive stockholder value.
For the Named Executive Officers in 2021, 60 percent of the award had performance-based vesting and 40 percent of the award had time-based vesting. The time-based awards, which generally vest in three annual installments, provide more predictable compensation, promote retention, and align Executive Officers’ interests with stockholders’ through meaningful stock ownership.
Each Named Executive Officer was granted a target number of performance-based restricted stock units, which vest based on Company revenue. The Compensation Committee chose this metric because it aligns with the Company’s pay-for-performance philosophy, incentivizes Executive Officers to increase revenue in order to drive stockholder value, and diversifies the performance criteria by using different metrics than those used for other incentive programs. The award is based on revenue for three one-year performance periods, with no restricted stock units vesting until the full three-year performance period is complete. The Compensation Committee sets threshold, target, and stretch goals for revenue for each year of the three-year performance period early in each year. If, in any year, the threshold level is not met, the portion of the award based on that year does not vest. If the threshold is met, the number of restricted stock units that vest will be between 50% and 200% of the target amount (based on linear interpolation between the levels).
Prior to 2021, the performance-based awards were based on revenue and relative total shareholder return (“rTSR”). Since we began issuing performance-based equity awards in 2017, three performance periods have been completed (January 1, 2017 through December 31, 2019 for the 2017 grants and January 1, 2018 through December 31, 2020 for the 2018 grants and January 1, 2019 through December 31, 2021 for 2019 grants). The threshold aggregate revenue for the 2019 awards was $655 million. As noted above the threshold for the rTSR portion of the awards was 35th percentile. The Company’s performance was between the threshold and target level for the revenue portion of the equity awards and below the threshold for the rTSR portion. (We do not disclose three-year revenue targets prospectively for competitive reasons.)
Perquisites and Other Benefits
The Company offers a comprehensive benefit package to all full-time employees designed to attract and retain talented employees at all levels. Generally, the Company’s benefits for its Executive Officers are substantially the same as those provided to other officers and employees.
In late 2020, working with Meridian, the Compensation Committee chose a new peer group for executive compensation. In selecting peers, the Compensation Committee took a holistic approach, considering revenue and other factors. The peer group includes companies that share some traits with RE/MAX Holdings, such as franchisors, companies in the real estate industry, and companies with a technology focus. As the Company is based in Denver, Colorado and mainly competes for talent in that market, the revised peer group includes several Denver-based companies.
In selecting companies for the peer group, one goal was to include companies with comparable revenue as the Company. However, the Compensation Committee believes that it is appropriate to have companies with higher revenue because, as a worldwide franchisor, the responsibilities of management extend beyond the operations and revenue of the Company. The Company’s franchisees operate in over 110 countries and territories. While each franchised office is independently owned and operated, Company management is responsible for matters such as managing franchise relationships, including encouraging franchisees in their growth; marketing, expanding, and protecting the Company’s brands; customer satisfaction; and overall operation of the entire franchised systems. Therefore, the demands on Company management may be greater than those on management of non-franchise companies with similar revenue.
32 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
The peer group is one resource for data on executive pay. This data may be supplemented by Meridian’s proprietary surveys of salary data and other sources. The Company believes the use of this peer group will allow the Committee to effectively make pay decisions.
Peer Group |
CarGurus, Inc. Cars.com, LLC Concrete Pumping Holdings, Inc. CSG Systems International, Inc. Dine Brands Global, Inc. Enova International, Inc. eXp World Holdings, Inc. LendingClub Corporation Marcus & Millichap, Inc. NewAge, Inc. Noodles & Company Ping Identity Holding Corp. Planet Fitness, Inc. Quotient Technology Inc. Realogy Holdings Corp. Redfin Corporation ServiceSource International, Inc. The ONE Group Hospitality, Inc. TrueCar, Inc. Wingstop Inc. Zillow Group, Inc. |
Policies for Hedging and Other Transactions Involving Company Stock
Our insider trading policy prohibits all officers, employees, and Directors from engaging in any of the following activities without the prior written consent of the Board of Directors: pledging Company stock, entering into hedging transactions involving Company stock, short sales of Company stock, and trading in derivative securities related to Company stock. No officers, employees, or Directors have been granted consent to engage in any such transactions.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 33 |
Ownership of RE/MAX Holdings stock helps align the interests of our Directors and Executive Officers with those of stockholders. To encourage stock ownership, our Board of Directors has adopted stock ownership guidelines applicable to Directors, all Named Executive Officers and certain other members of senior management. The stock ownership guidelines provide a minimum share ownership level for Directors and certain officers based on a multiple of base salary or cash retainer. Unvested time-based restricted stock units count toward the threshold. The multiples are as follows:
| | | | | |
Chief Executive Officer of RE/MAX Holdings | |||||
| | | | | 5x base salary |
Other Executive Officers | |||||
| | 2x base salary | |||
Other officers subject to the guidelines: | |||||
| 1x base salary | ||||
Non-employee Directors: | |||||
| | | 3x base cash retainer | ||
The guidelines do not mandate a time period to reach the applicable ownership level. Rather, if an officer or Director is below the guidelines’ applicable threshold, he or she may not sell more than one half of the after-tax portion of equity awards without approval of the Compensation Committee (other than those that were vested at the time of our IPO or those that are issued as part of the short-term incentive compensation). All shares beneficially owned by the officer or Director, as well as unvested time-based restricted stock units, count toward the threshold. Unvested performance-based restricted stock units do not count towards the threshold.
Clawback Policy
The Board has adopted an Incentive Compensation Recoupment Policy pursuant to which the Board may recover incentive compensation in certain circumstances. The policy applies to each officer whom the Board has designated as a Section 16 officer (as defined in Section 16 of the Securities Exchange Act of 1934) of the Company (referred to as “Covered Officers”). Pursuant to the policy, in the event of misconduct by a Covered Officer that causes or contributes to a restatement of the Company’s financial statements, the Board may, in its discretion and to the extent permitted by applicable law, seek to recover incentive compensation paid to such Covered Officer during the three years preceding the restatement to the extent such incentive compensation exceeded the incentive compensation that would have been paid to such Covered Officer based on the restated results. All compensation, whether paid in cash or in stock, that is based wholly or in part upon the attainment of any measure based on financial reporting measures is subject to the Incentive Compensation Recoupment Policy.
Compensation Risk Assessment
In 2021, the Compensation Committee, working with its Compensation Consultant, conducted a risk assessment of the Company’s compensation practices. In conducting the assessment, the Committee evaluated the inherent risks of the Company’s business and how the Company’s compensation program mitigates the risk of excessive risk taking. As a result of the risk assessment, the Committee determined that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
34 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
The Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion and Analysis above. Based on this review and these discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for 2021 for filing with the SEC.
Compensation Committee
Roger J. Dow, Chair
Ronald E. Harrison
Laura G. Kelly
Christine M. Riordan
2022 Proxy Statement | RE/MAX Holdings, Inc. | 35 |
The following table presents information regarding compensation earned by or awards to our Named Executive Officers during fiscal years 2021, 2020, and 2019.
| | | | | | | | | | | | | | |
| | | | | | | | | | Non-Equity | | | | |
| | | | | | | | Stock | | Incentive Plan | | All Other | | |
| | | | Salary | | Bonus | | Awards | | Compensation | | Compensation | | |
Name and Principal Position |
| Fiscal Year |
| ($) |
| ($)(1) |
| ($)(2) |
| ($)(3) |
| ($) |
| Total ($) |
Adam M. Contos, CEO | | 2021 | | 741,667 | | | | 2,275,033 | | 1,370,800 | | 52,471 | (4) | 4,439,971 |
|
| 2020 | | 700,000 | | 440,000 | | 1,245,072 | | — | | 9,097 | | 2,394,169 |
|
| 2019 | | 650,000 | | — | | 1,006,824 | | 378,000 | | 27,388 | | 2,062,212 |
Nicholas R. Bailey, President and CEO of RE/MAX, LLC | | 2021 | | 377,288 | | | | 762,493 | | 356,400 | | 7,773 | (4) | 1,503,954 |
| | 2020 | | 358,333 | | 115,000 | | 731,787 | | — | | 3,888 | | 1,209,008 |
| | 2019 | | 114,198 | | — | | 100,010 | | 170,000 | | — | | 384,208 |
Karri R. Callahan, Chief Financial Officer | | 2021 | | 380,833 | | | | 770,026 | | 351,900 | | 13,532 | (4) | 1,516,291 |
|
| 2020 | | 358,333 | | 115,000 | | 731,787 | | — | | 14,607 | | 1,219,727 |
| | 2019 | | 342,500 | | — | | 542,146 | | 170,000 | | 15,304 | | 1,069,950 |
Ward M. Morrison, President and CEO, Motto Mortgage and wemlo | | 2021 | | 337,500 | | — | | 700,020 | | 319,900 | | 11,767 | (4) | 1,369,187 |
| | 2020 |
| 270,833 | | 88,438 | | 559,029 | | — | | 16,074 | | 934,374 |
Serene M. Smith, Chief of Staff and Chief Operating Officer |
| 2021 | | 356,667 | | | | 720,004 | | 329,000 | | 14,157 | (4) | 1,419,828 |
| | 2020 | | 338,333 | | 108,750 | | 691,165 | | — | | 9,960 | | 1,148,208 |
| | 2019 | | 327,500 | | — | | 511,152 | | 160,000 | | 14,800 | | 1,013,452 |
(1) Represents discretionary cash bonuses in the year in which they were earned. Bonuses paid pursuant to Annual Plans and Incentive Plan are reported in the “Non-Equity Incentive Plan Compensation” column. Each Named Executive Officer’s bonus was paid approximately half in cash and half in equity (except for a $2,500 bonus to each Named Executive Officer in 2020 that was paid entirely in cash). For additional details, see “Compensation Discussion and Analysis” above.
(2) Reflects the grant date fair value of restricted stock units granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2021 Annual Report. The value of the restricted stock unit awards granted in 2021, assuming achievement of the maximum performance level for performance-based awards, would have been: Mr. Contos: $3,360,004; Mr. Bailey: $1,202,923; Ms. Callahan: $1,232,033; Mr. Morrison: $1,120,015; and Ms. Smith: $1,151,973.
(3) Reflects the awards that our Named Executive Officers received under each year’s Annual Plan. The awards in this column were paid half in cash and half in Class A common stock of the Company. Further details of Annual Plans are above in the Compensation Discussion and Analysis.
(4) Reflects matching contributions made under our 401(k) plan and dividend equivalents paid in cash upon vesting of restricted stock units.
36 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
The following table provides information regarding equity grants to our Named Executive during 2021.
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | All other | | |
| | | | | | | | | | | | | | | | stock | | |
| | | | | | | | | | | | | | | | awards | | Grant date |
| | | | | | | | | | | | | | | | Number of | | fair value |
| | | | Estimated future payouts under | | Estimated future payouts under | | shares of | | of | ||||||||
| | | | non-equity incentive plan awards (1) | | equity incentive plan awards | | stock or | | stock | ||||||||
| | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | units | | award |
Name |
| date |
| ($) |
| ($) |
| ($) |
| (#) |
| (#) |
| (#) |
| (#) |
| ($) (7) |
Adam M. Contos |
| — |
| 375,000 | | 750,000 | | 1,500,000 | | — | | — | | — | | — | | — |
| | 3/1/2021 | | — | | — | | — | | 15,101 | | 30,201 | | 60,402 | (2) | — | | 1,259,986 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 20,135 | (4) | 840,032 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 4,195 | (5) | 175,015 |
Nicholas R. Bailey | | — | | 97,500 | | 195,000 | | 390,000 | | — | | — | | — | | — | | — |
| | 3/1/2021 | | — | | — | | — | | 5,177 | | 10,354 | | 20,708 | (3) | — | | 431,969 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 6,904 | (6) | 288,035 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 1,079 | (5) | 45,016 |
| | 9/27/2021 | | | | | | | | 405 | | 810 | | 1,620 | (3) | | | 25,475 |
| | 9/27/2021 | | | | | | | | | | | | | | 541 | (6) | 17,014 |
Karri R. Callahan |
| — |
| 96,250 | | 192,500 | | 385,000 | | — | | — | | — | | — | | — |
| | 3/1/2021 | | — | | — | | — | | 5,537 | | 11,074 | | 22,148 | (3) | — | | 462,007 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 7,383 | (6) | 308,019 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 1,079 | (5) | 45,016 |
Ward M. Morrison | | — | | 87,500 | | 175,000 | | 350,000 | | — | | — | | — | | — | | — |
| | 3/1/2021 | | — | | — | | — | | 5,034 | | 10,067 | | 20,134 | (3) | — | | 419,995 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 6,712 | (6) | 280,025 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 824 | (5) | 34,377 |
Serene M. Smith | | — |
| 90,000 | | 180,000 | | 360,000 | | — | | — | | — | | — | | — |
| | 3/1/2021 | | — | | — | | — | | 5,177 | | 10,354 | | 20,708 | (3) | — | | 431,969 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 6,904 | (6) | 288,035 |
| | 3/1/2021 | | — | | — | | — | | — | | — | | — | | 1,019 | (5) | 42,513 |
(1) Represents potential payouts under the 2021 Bonus Plan. Actual amounts paid are reflected above in the Summary Compensation Table.
(2) Represents performance-based restricted stock units that were subject to vesting based on Company performance during 2021, 2022, and 2023. Pursuant to the terms of the Separation Agreement between the Company and Mr. Contos dated January 10, 2022 (the “Contos Separation Agreement”), a portion of this award vested as of March 31, 2022, and the remainder was forfeited.
(3) Represents performance-based restricted stock units that are subject to vesting based on Company performance during 2021, 2022, and 2023.
(4) Represents (i) time-based restricted stock units that were scheduled to vest on March 1, 2022, 2023, and 2024. Pursuant to the Contos Separation Agreement, the portion of the grant scheduled to vest on March 1, 2022, vested as scheduled and the remainder was forfeited as of March 31, 2022.
(5) Represents vested shares of RE/MAX Holdings Class A stock issue for the portion of the bonus with respect to 2020 performance that was paid in stock.
(6) | Represents (i) time-based restricted stock units that are scheduled to vest on March 1, 2022, 2023, and 2024. |
(7) Reflects the grant date fair value of stock and restricted stock units granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2021 Annual Report.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 37 |
Outstanding Equity Awards at Fiscal Year End
The following table provides information regarding outstanding equity awards held by our Named Executive Officers as of the end of fiscal year 2021.
| | | | | | | | | | |
| | | | Stock Awards | ||||||
| | | | | | |
| Equity Incentive | | Equity Incentive |
| | | | | | |
| Plan Awards: | | Plan Awards: |
| | | | Number of | | Market Value |
| Number of | | Market or Payout |
| | | | Shares or | | of Shares or | | unearned shares, | | value of unearned |
| | | | Units of Stock | | Units of Stock | | units, or other | | shares, units, or |
| | | | That Have Not | | That Have Not | | rights that have | | other rights that have |
Name |
| Grant Date |
| Vested (#) |
| Vested ($) (1) |
| not vested (#) |
| not vested ($) (1) |
Adam M. Contos |
| 3/1/2019 | | 3,313 | (2) | 101,013 | | | | |
| | 3/1/2020 | | 11,207 | (3) | 341,701 | | | | |
| | 3/1/2021 | | 20,135 | (4) | 613,916 | | | | |
| | 3/1/2019 | | | | | | 14,909 | (5) | 454,575 |
| | 3/1/2020 | | | | | | 25,215 | (5) | 768,805 |
| | 3/1/2021 | | | | | | 30,201 | (5) | 920,828 |
Nicholas R. Bailey | | 3/1/2020 | | 6,587 | (3) | 200,838 | | | | |
| | 3/1/2021 | | 6,904 | (4) | 210,503 | | | | |
| | 9/27/2021 | | 541 | (4) | 16,495 | | | | |
| | 3/1/2020 | | | | | | 14,820 | (5) | 451,862 |
| | 3/1/2021 | | | | | | 10,354 | (5) | 315,693 |
| | 9/27/2021 | | | | | | 810 | (5) | 24,697 |
Karri R. Callahan | | 3/1/2019 | | 1,784 | (2) | 54,394 | | | | |
| | 3/1/2020 | | 6,587 | (3) | 200,838 | | | | |
| | 3/1/2021 | | 7,383 | (4) | 225,108 | | | | |
| | 3/1/2019 | | | | | | 8,028 | (5) | 244,774 |
| | 3/1/2020 | | | | | | 14,820 | (5) | 451,862 |
| | 3/1/2021 | | | | | | 11,074 | (5) | 337,646 |
Ward M. Morrison | | 3/1/2019 | | 850 | (2) | 25,917 | | | | |
| | 3/1/2020 | | 5,032 | (3) | 153,426 | | | | |
| | 3/1/2021 | | 6,712 | (4) | 204,649 | | | | |
| | 3/1/2019 | | | | | | 3,823 | (5) | 116,563 |
| | 3/1/2020 | | | | | | 11,321 | (5) | 345,177 |
| | 3/1/2021 | | | | | | 10,067 | (5) | 306,943 |
Serene M. Smith | | 3/1/2019 | | 1,682 | (2) | 51,284 | | | | |
| | 3/1/2020 | | 6,222 | (3) | 189,709 | | | | |
| | 3/1/2021 | | 6,904 | (4) | 210,503 | | | | |
| | 3/1/2019 | | | | | | 7,569 | (5) | 230,779 |
| | 3/1/2020 | | | | | | 13,997 | (5) | 426,769 |
| | 3/1/2021 | | | | | | 10,354 | (5) | 315,693 |
| | | | | | | | | | |
(1) Value is calculated by multiplying the number of unvested restricted stock units by $30.49, which was the closing market price of our Class A common stock on December 31, 2021.
(2) Represents time-based restricted stock units (“RSUs”) that vested on March 1, 2022.
(3) Represents time-based RSUs, half of which vested on March 1, 2022, and half of which are scheduled to vest on March 1, 2023. (Mr. Contos’s unvested time-based RSUs were forfeited as of his separation on March 31, 2022).
(4) Represents time-based RSUs, one third of which vested on March 1, 2022, and the remainder of which are scheduled to vest on March 1, 2023 and 2024. (Mr. Contos’s unvested time-based RSUs were forfeited as of his separation on March 31, 2022).
(5) Represents performance-based RSUs which were subject to vesting based on Company performance during the three year performance period beginning on January 1 of the year in which they were granted. The numbers set forth above represent the target number of RSUs. (A portion of Mr. Contos’s performance-based RSUs vested in connection with his separation on March 31, 2022 and the remainder were forfeited.)
38 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
Option Exercises and Stock Vested for Fiscal Year 2021
The following table shows stock awards that vested during fiscal year 2021.
| | | | |
| | Stock awards | ||
| | Number of shares | | Value realized |
| | acquired on vesting | | on vesting |
Name | | (#)(1) | | ($)(2) |
Adam M. Contos | | 28,488 |
| 1,188,519 |
Nicholas R. Bailey |
| 4,372 |
| 182,400 |
Karri R. Callahan |
| 7,460 |
| 311,231 |
Ward M. Morrison |
| 4,985 |
| 207,974 |
Serene M. Smith | | 7,633 | | 318,449 |
(1) Includes shares from LTI awards that vested in 2021 and the portion of the bonus with respect to 2020 performance which was paid in vested shares of RE/MAX Holdings Class A stock in 2020
(2) Represents the amounts realized based on the fair market value of our stock upon vesting or delivery, which is the closing price the day before the applicable vesting or delivery date.
We have generally not entered into employment agreements with our Executive Officers. We currently have an employment agreement with Mr. Joyce, who is serving as Chief Executive Officer on an interim basis. Additionally, in January 2022, we entered into a Reward and Retention Agreements with each of Mr. Bailey, Ms. Callahan, Ms. Smith and Mr. Morrison. The agreements provide for certain payments in the event the Executive Officer is terminated without Cause or terminates their employment with Good Reason (as such terms are defined in the agreements) prior to September 30, 2022. Additionally, our Named Executive Officers may be entitled to certain benefits upon separation from the Company or a change in control, as described below under “Potential Payments on Termination/Change in Control.”
Potential Payments on Termination/Change in Control
In 2018, we adopted a Severance Pay Benefit Plan (the “Severance Plan”) that is applicable to all employees, including Named Executive Officers, who meet certain eligibility requirements. The restricted stock unit agreements with our employees, including Named Executive Officers, provide for accelerated vesting in the event the executive’s employment is terminated within two years following a change in control or if outstanding equity awards are not converted into equivalent awards by the acquiring or successor entity following a change in control.
The Severance Plan sets forth benefits eligible employees will receive if they are involuntarily terminated due to position elimination or reduction in force or in other circumstances that the Company determines should result in the payment of severance benefits.
Involuntary Termination for Cause or Voluntary Resignation Without Good Reason
None of our Named Executive Officers serving as of December 31, 2021 were entitled to any severance payments or other payments following involuntary termination for cause or voluntary resignation without good reason.
Voluntary Resignation with Good Reason or Involuntary Termination Without Cause
Our employees, including Named Executive Officers, are entitled to certain benefits under the Severance Plan if they are terminated involuntarily without cause or they voluntarily resign with good reason. Good reason means that, following a change in control, the employee is not offered a position with the acquiring or successor entity that has substantially the same level of responsibility and compensation and is at a location that would not increase such employee’s one-way commute by more than twenty miles. Payment of benefits under the Severance Plan is conditioned upon the employee signing an agreement and release in a form provided by the Company that (i) provides a comprehensive release of claims against the Company and (ii) contains non-solicitation and non-disparagement provisions.
The table below sets forth the estimated amount each Named Executive Officer serving as of December 31, 2021, would have received based upon a hypothetical voluntary resignation with good reason or involuntary termination without cause on such date. The benefits under the Severance Plan for our Named Executive Officers comprise one year’s salary,
2022 Proxy Statement | RE/MAX Holdings, Inc. | 39 |
outplacement assistance, continuation of health benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), and a pro-rated bonus.
| | | | | | | |
| Cash | | Cash | | Other | | |
| Severance | | Bonus | | Benefits | | Total |
Name | ($) |
| ($) |
| ($) |
| ($) |
Adam M. Contos | 750,000 | | 1,370,800 | | 14,820 | | 2,135,620 |
Nicholas R. Bailey | 390,000 | | 356,400 | | 14,820 | | 761,220 |
Karri R. Callahan | 385,000 | | 351,900 | | 14,820 | | 751,720 |
Ward M. Morrison | 350,000 | | 319,900 | | 14,820 | | 684,720 |
Serene M. Smith | 360,000 | | 329,000 | | 14,820 | | 703,820 |
Change in Control
The table below sets forth the estimated value of accelerated vesting of restricted stock units for each Named Executive Officer serving as of December 31, 2021, based on a hypothetical change in control on such date, in connection with which the restricted stock units were not converted into an equivalent award by the acquiring or successor entity. (Vesting would not be accelerated if the awards were converted.) See “Voluntary Resignation with Good Reason” above for additional benefits that may be available in the event of a change in control where the Named Executive Officer is not offered a comparable position with the acquiring or successor entity.
| |
| Restricted |
| Stock |
| Unit |
| Vesting |
Name | ($) |
Adam M. Contos | 3,213,069 |
Nicholas R. Bailey | 1,239,503 |
Karri R. Callahan | 1,382,906 |
Ward M. Morrison | 1,131,675 |
Serene M. Smith | 1,298,181 |
Principal Executive Officer Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Adam Contos, who served as our Principal Executive Officer for all of 2021.
We identified the median employee by examining the compensation (including annual base salary, bonuses, commissions, incentives, and overtime) of all of our employees, other than Mr. Contos, as of November 15, 2021.
The total compensation for 2021 of the employee identified as the median employee was $101,792. This includes base salary of $81,056, a bonus $19,453 (which was paid approximately half in cash and half in stock), and 401(k) match of $1,282.
The total 2021 compensation for Mr. Contos, our CEO, as reported in the Summary Compensation Table above was $4,439,971. The ratio of our CEO’s compensation to that of the median employee for 2021 was approximately 44 to 1.
Employee Benefit and Stock Plans
The 2013 Omnibus Incentive Plan
Prior to our IPO, our Board of Directors adopted the RE/MAX Holdings, Inc. 2013 Omnibus Incentive Plan (the “Omnibus Plan”) and our stockholders voted in 2017 to reapprove the Omnibus Plan. The Omnibus Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to our employees and any parent and subsidiary employees, and for the grant shares of our Class A common stock, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to our employees, Directors, and consultants and those of any affiliated entity, including RMCO and its subsidiaries. This is a summary of the Omnibus Plan, not a complete description, and is qualified in its entirety by reference to the full text of the Omnibus Plan. As of the Record Date, approximately 50 officers, 650 other employees, and nine non-employee Directors were eligible to participate in the Omnibus Plan. The administrator of the Omnibus Plan also has discretion to
40 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
grant awards to consultants, although we have not historically done so and, as of the Record Date, there are no consultants the administrator would likely consider for the grant of awards. Participation in the Omnibus Plan provides eligible persons an incentive, through ownership of the Company’s common stock, to continue in service to the Company and related entities, and helps the Company compete effectively for the services of qualified persons.
Share Reserve
The Omnibus Plan provides for annual increases in the number of shares available for issuance thereunder on the first business day of each fiscal year, beginning with our fiscal year following the year of our IPO, equal to one percent of the number of shares of our common stock outstanding on the last day of our immediately preceding fiscal year, on a fully diluted basis; or a lower number of shares determined by the plan’s administrators. After giving effect to all outstanding awards (assuming maximum achievement of performance goals for performance-based awards), there were 821,589 shares available for future awards under the Omnibus Plan, as of the Record Date.
Administration
The Compensation Committee of the Board of Directors administers the Omnibus Plan and is referred to as the “administrator.” The administrator has the power to determine and interpret the terms and conditions of the awards, including the employees, Directors, and consultants who will receive awards, the exercise price, the number of shares subject to each such award, the vesting schedule and exercisability of the awards, the restrictions on transferability of awards, and the form of consideration payable upon exercise. The administrator also has the authority to reduce the exercise prices of outstanding stock options and the base appreciation amount of any stock appreciation right if the exercise price or base appreciation amount exceeds the fair market value of the underlying shares, and to cancel such options and stock appreciation rights in exchange for new awards, in each case without stockholder approval.
401(k) Plan
RE/MAX, LLC maintains a tax-qualified 401(k) retirement savings plan for participants who satisfy certain eligibility requirements, including a minimum hours of service requirement. The 401(k) plan participants, including certain of our Named Executive Officers, may elect to defer up to 60% of their eligible regular compensation and bonuses, subject to applicable annual limits set pursuant to the Code. The Company generally makes discretionary matching contributions. Beginning in the second quarter of 2020, the Company temporarily suspended matching contributions as part of its expense reduction measures in connection with the COVID-19 pandemic. As the business recovered in 2021, the Company provided a match of 25% of contributions by plan participants. Due to the strength of its business, the Company restored the match to its historical level of 50% of contributions by plan participants in 2022. Plan participants may elect to invest their contributions in various established funds. Company contributions vest 33% each year for the first three years of an employee’s service, then vested 100% thereafter.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 41 |
Our Compensation Committee is responsible for determining executive compensation. The table below illustrates the annual compensation structure for non-employee Directors in 2021. Directors who are also employees receive no additional compensation for their services as Directors. Mr. Contos’s compensation is included with that of our other Named Executive Officers above under “Executive Compensation.”
| | |
|
| Annual |
| | Amount |
Element | | ($) |
Retainer (cash) |
| 80,000 |
Equity Grant (restricted stock units that vest after approximately one year) |
| 100,000 |
Additional Retainer for Lead Independent Director (cash) |
| 30,000 |
Additional Retainer for Audit Committee Chair (cash) |
| 25,000 |
Additional Retainer for Audit Committee Member (cash) |
| 12,500 |
Additional Retainer for Compensation Committee Chair (cash) |
| 15,000 |
Additional Retainer for Compensation Committee Member (cash) |
| 5,000 |
Additional Retainer for Nominating and Corporate Governance Committee Chair (cash) |
| 10,000 |
Additional Retainer for Nominating and Corporate Governance Committee Member (cash) |
| 5,000 |
Additional Retainer for Finance and Investment Committee Chair (cash) | | 10,000 |
Additional Retainer for Finance and Investment Committee Member (cash) | | 5,000 |
The following table shows Director compensation for fiscal year 2021.
| | | | | | | | |
| | Fees Earned or | | Stock | | All Other | | |
| | Paid in Cash | | Awards | | Compensation | | |
Name |
| ($) |
| ($)(1) | | ($)(2) |
| Total ($) |
Kathleen J. Cunningham |
| 110,000 | | 100,003 | | 3,432 | | 213,435 |
Joseph A. DeSplinter |
| 102,500 | | 100,003 | | 3,432 | | 205,935 |
Roger J. Dow |
| 125,000 | | 100,003 | | 3,432 | | 228,435 |
Ronald E. Harrison |
| 90,000 | | 100,003 | | 3,432 | | 193,435 |
Stephen P. Joyce | | 90,000 | | 100,003 | | — | | 190,003 |
Laura G. Kelly | | 97,500 | | 100,003 | | — | | 197,503 |
David L. Liniger (3) |
| — | | — | | — |
| — |
Gail A. Liniger (3) |
| — | | — | | — |
| — |
Daniel J. Predovich (4) |
| 63,750 | | 100,003 | | 3,432 | | 167,185 |
Christine M. Riordan |
| 97,500 | | 100,003 | | 3,432 | | 200,935 |
Teresa S. Van De Bogart |
| 95,000 | | 100,003 | | 3,432 | | 198,435 |
(1) Reflects the grant date fair value of restricted stock units granted to each Named Executive Officer, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. See Note 13 to our audited consolidated financial statements in our 2021 Annual Report. As of December 31, 2021, each Director named in the table above, other than Mr. and Mrs. Liniger had 2,397 unvested restricted stock units, which vested on March 1, 2022.
(2) Reflects dividend equivalents paid in cash upon settlement of restricted stock units.
(3) Since our IPO in 2013, Mr. and Ms. Liniger have not received compensation for their service as Directors or officers (other than benefits similar to our employees).
(4) Mr. Predovich retired from our Board on September 6, 2021.
In addition to the amounts in the table above, all Directors receive reimbursement for reasonable out-of-pocket expenses incurred in connection with meetings of our Board of Directors.
42 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of our Class A common stock and Class B common stock by (i) each of our Directors and nominees, (ii) each of our Named Executive Officers, (iii) our Directors and Executive Officers as a group, and (iv) each person known to us to beneficially own more than 5% of our voting securities. For our Directors and Executive Officers, the information is as of the date of this Proxy Statement. For stockholders who own more than 5% of our Class A common stock, the information is as of the most recent form 13G filed by each such stockholder with the SEC. Unless otherwise noted, the address of each stockholder is c/o RE/MAX Holdings, Inc. 5075 S. Syracuse St., Denver, CO 80237.
We have determined beneficial ownership in accordance with SEC rules. The information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of common stock deemed outstanding includes shares issuable upon exercise of options or conversion rights held by the respective person or group that may be exercised or converted within 60 days after April 8, 2022, which is the record date for the Annual Meeting (the “Record Date.”)
Pursuant to RMCO’s Fourth Amended and Restated Operating Agreement, common units in RMCO are redeemable at the unitholders’ election for, at our option, shares of Class A common stock of RE/MAX Holdings on a one-for-one basis (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions and adjustments for stock splits, stock dividends and reclassifications) or a cash payment equal to the market price of one share of our Class A common stock for each common unit redeemed. Beneficial ownership of common units reflected in the following table is not reflected as beneficial ownership of shares of our Class A common stock for which such units may be redeemed.
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Combined |
| | | | | | | | | | | | | | Voting Power |
| | | | | | | | | | | | | | of Class A |
| | | | | | | | | | | | | | and |
|
| Class A | | RMCO Common Units | | Class B (1) | | Class B | ||||||
Directors and Named Executive Officers |
| Number |
| Percentage |
| Number |
| Percentage |
| Number |
| Percentage |
| Percentage |
David L. Liniger (2) | | 353,711 | | 1.84% | | 12,559,600 | | 39.44% | | 1 | | 100.00% | | 40.59% |
Gail A. Liniger (2) (3) | | 353,711 | | 1.84% | | 12,559,600 | | 39.44% | | 1 | | 100.00% | | 40.59% |
Nicholas R. Bailey | | 16,134 | | * | | — | | * | | — | | * | | * |
Karri R. Callahan | | 31,335 | | * | | — | | * | | — | | * | | * |
Adam M. Contos | | 80,184 | | * | | — | | * | | — | | * | | * |
Kathleen J. Cunningham | | 20,924 | | * | | — | | * | | — | | * | | * |
Joseph A. DeSplinter | | 14,260 | | * | | — | | * | | — | | * | | * |
Roger J. Dow | | 31,824 | | * | | — | | * | | — | | * | | * |
Ronald E. Harrison | | 22,724 | | * | | — | | * | | — | | * | | * |
Stephen P. Joyce | | 29,946 | | * | | — | | * | | — | | * | | * |
Laura G. Kelly | | 2,397 | | * | | — | | * | | — | | * | | * |
Annita M. Menogan | | — | | * | | — | | * | | — | | * | | * |
Ward M. Morrison | | 7,305 | | * | | — | | * | | — | | * | | * |
Christine M. Riordan | | 15,451 | | * | | — | | * | | — | | * | | * |
Serene M. Smith | | 11,581 | | * | | — | | * | | — | | * | | * |
Teresa S. Van De Bogart | | 11,343 | | * | | — | | * | | — | | * | | * |
Directors and Executive Officers as a group (16 persons) | | 649,119 | | 3.37% | | 12,559,600 | | 39.44% | | 1 | | 100.00% | | 41.51% |
5% Stockholders | | | | | | | | | | | | | | |
RIHI (4) | | — | | * | | 12,559,600 | | 39.44% | | 1 | | 100.00% | | 39.47% |
BlackRock, Inc. (5) | | 3,679,385 | | 19.11% | | — | | * | | — | | * | | 11.56% |
The Vanguard Group (6) | | 2,311,822 | | 12.00% | | — | | * | | — | | * | | 7.27% |
RPD Fund Management LLC (7) | | 1,122,580 | | 5.83% | | — | | * | | — | | * | | 3.53% |
Renaissance Technologies LLC (8) | | 1,034,500 | | 5.37% | | — | | * | | — | | * | | 3.25% |
* Less than 1%
2022 Proxy Statement | RE/MAX Holdings, Inc. | 43 |
(1) RIHI, Inc. (“RIHI”), as holder of Class B common stock, is entitled to, without regard to the number of shares of Class B common stock held, a number of votes on matters presented to stockholders of RE/MAX Holdings that is equal to the aggregate number of common units of RMCO that such stockholder holds. RIHI is majority owned and controlled by David Liniger, our Chair, and Co-Founder and Gail Liniger, our Vice Chair and Co-Founder. As such, Mr. and Mrs. Liniger have dispositive, voting, and investment control over the common units held by RIHI. For more information concerning RIHI, see Certain Relationships and Related Party Transactions > Relationships Arising from Our Historical Ownership and Relationships with the Linigers and Liniger-Related Entities.
(2) Includes common units in RMCO held by RIHI which may be redeemed at RIHI’s election for, at our option, shares of Class A common stock of RE/MAX Holdings on a one-for-one basis (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions, and adjustments for stock splits, stock dividends, and reclassifications) or cash.
(3) The Class A common stock listed is owned by David Liniger, Gail Liniger’s husband.
(4) Includes common units in RMCO which may be redeemed at RIHI’s election for, at our option, shares of Class A common stock of RE/MAX Holdings on a one-for-one basis (subject to customary adjustments, including conversion rate adjustments, underwriting discounts, commissions, and adjustments for stock splits, stock dividends, and reclassifications) or cash.
(5) Based solely on a Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) on January 27, 2022. BlackRock reported sole voting power with respect to 3,531,899 shares and sole dispositive power with respect to 3,679,385 shares. In such filing, BlackRock lists its address as 55 East 52nd Street, New York, NY 10055.
(6) Based solely on a Schedule 13G filed by The Vanguard Group (“Vanguard”) on February 9, 2022. Vanguard reported shared voting power with respect to 21,687 shares, sole dispositive power with respect to 2,276,971 shares, and shared dispositive power with respect to 34,851 shares. In such filing, Vanguard lists its address as 100 Vanguard Blvd., Malvern PA 19355.
(7) Based solely on a Schedule 13G/A filed by RPD Opportunity Fund LP (“RPDOF”), RPD Fund Management LLC. (“RPDFM”), RPD Opportunity LLC (“RPDO”) and Ahmet Okumus on February 11, 2022. Each of RPDOF, RPDFM, RPDO and Mr. Okumus reports shared voting power and shared dispositive power with respect to 1,122,580 shares. Each of RPDFM, RPDO, and Mr. Okumus disclaims beneficial ownership in such shares, except to the extent of its or his pecuniary interest therein. In such filing, each of RPDOF, RPDFM, RPDO, and Mr. Okumus lists its or his address as 767 Third Avenue, 35th Floor, New York, NY 10017.
(8) Based solely on a Schedule 13G filed by Renaissance Technologies, LLC (“RTC”) and Renaissance Technologies Holdings Corporation (“RTHC”) on February 11, 2022. RTC reported sole voting power and sole dispositive power with respect to 1,033,133 and RTHC also reported sole voting power and sole dispositive power with respect to 1,033,133 shares because of RTHC’s majority ownership of RTC. In such filing, RTC and RHTC lists their address as 800 Third Avenue, New York, NY 10022.
44 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The RE/MAX Holdings Code of Conduct notes that a conflict of interest arises any time the personal interests of Company personnel (including Directors) interfere with, or could appear to interfere with, their ability to act in the best interests of RE/MAX Holdings. Company personnel must disclose any potential conflicts of interest – including those involving an immediate family member – to the Chief Compliance Officer. Conflicts of interest involving any member of the RE/MAX Holdings Board of Directors are addressed by the Board of Directors or an applicable committee. Our Code of Conduct is supplemented by our Related Party Transactions Policy.
We describe below certain relationships between us and our executives and our historical owners, and the transactions described below include, in particular, any transactions and series of similar transactions, during 2021, to which we were a participant or will be a participant, in which:
● the amounts involved exceeded or will exceed $120,000 and
● any of our Directors, Executive Officers, holders of more than 5% of our capital stock, or any member of their immediate family had or will have a direct or indirect material interest, except that, for compensation arrangements with Directors and Executive Officers, agreements with our Executive Officers containing compensation and termination provisions, and separation agreements, please see “Compensation Disclosure and Analysis,” the “Compensation Tables,” “Employment Agreements and Separation Agreements,” and “Director Compensation” above.
Relationships Arising from Our Historical Ownership and Relationships with the Linigers and Liniger-Related Entities
The first RE/MAX company, our predecessor, was founded in 1973 by David and Gail Liniger, who still serve as our Chair and Vice Chair, respectively. At the time of our 2013 IPO, RMCO was owned by RIHI. RIHI is (and was at the time of our IPO) majority owned and controlled by the Linigers. As such, the Linigers have dispositive, voting, and investment control over the common units held by RIHI. RIHI remains a significant stockholder of the Company, and through its ownership of all of our Class B common stock, holds approximately 40% of the voting power of the Company’s common stock. (David Liniger also individually owns individually slightly less than 2% of our Class A common stock.)
As discussed above, the Linigers have a very close, family-like relationship with our former CEO, Adam Contos, and his family. As a result, Mr. Contos recused himself from any matters relating to the Company’s relationship with RIHI or the Linigers.
At the time of our IPO, we entered into several ongoing agreements with RIHI, and the Company has certain other relationships with Liniger entities, Sanctuary, Inc., and EDR Travel, Inc. (��EDR”), as discussed below.
Registration Rights Agreement
We entered into a registration rights agreement with RIHI in connection with our IPO. The registration rights agreement provides RIHI certain registration rights whereby it can require us to register, under the Securities Act of 1933, shares owned by it. The registration rights agreement also provides for piggyback registration rights for all stockholders that are parties to the agreement.
Tax Receivable Agreements
As discussed in our Annual Report on Form 10-K (see “Holdings Ownership of RMCO and Tax Receivable Agreements”), RE/MAX Holdings has twice acquired common units in RMCO from RIHI, a corporation that is majority owned and controlled by David and Gail Liniger. The first was at the time of our IPO in October 2013 and the second was in November and December 2015. These acquisitions are expected to reduce the amounts that we pay in taxes as a result of a step-up in tax basis on the underlying assets held by RMCO. The assets are amortizable and result in deductions on our tax returns for many years. If RE/MAX Holdings acquires additional common units of RMCO from RIHI, the percentage of RE/MAX Holdings’ ownership of RMCO will increase, and additional tax assets will be created as additional tax basis step-ups occur. In connection with the first of these acquisitions, we entered into a tax receivable agreement with RIHI and a substantially similar agreement with RMCO’s other pre-IPO owner. These agreements require us to pay the counterparties 85% of the amount of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that we actually realize, or in some circumstances are deemed to realize, as a result of the step-up in tax basis on RMCO’s assets.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 45 |
For purposes of the tax receivable agreements, tax savings are computed by comparing our actual liability to the amount of taxes that we would have paid without the step-up in basis in RMCO’s assets. There is no maximum term for the tax receivable agreements; however, we may terminate the tax receivable agreements by paying the counterparties an agreed upon amount equal to the estimated present value of the remaining payments under the agreements.
The timing and amount of payments under the tax receivable agreements will vary based on facts and circumstances that are beyond our control (including the timing and amount of any redemption of common units by RIHI, the price of our shares of Class A common stock at the time of any such redemptions, the impact of foreign taxes, amount and timing of our taxable income (if any), and the applicable tax rate). However, the payments to the counterparties could be substantial. If we do not make payments under the tax receivable agreements for any reason, the unpaid amounts will be deferred and will accrue interest until paid.
The tax receivable agreements provide that if certain forms of business combination or changes of control occur, or that if we elect an early termination of the agreements, then our obligations would be based on certain assumptions, including that we would have sufficient taxable income to utilize all potential future tax benefits that are subject to the tax receivable agreements. As a result, we could be required to make cash payments to the counterparties that are greater than the specified percentage of the benefits we ultimately realize.
We will also not be reimbursed for any cash payments previously made to the counterparties to the tax receivable agreements if any tax benefits initially claimed by us are subsequently disallowed by a taxing authority. Instead, any excess cash payments made by us to a counterparty would be netted against any future cash payments that we might make under the terms of the tax receivable agreements. Therefore, it is possible that we could make cash payments under the tax receivable agreements that substantially exceed our actual cash tax savings.
We entered into the tax receivable agreements on October 7, 2013. During 2021, we made payments under the tax receivable agreement with RIHI of approximately $2.0 million.
RMCO Operating Agreement
In connection with our IPO, RE/MAX Holdings, RIHI and RMCO entered into RMCO’s fourth amended and restated limited liability company agreement (the “RMCO Agreement”).
Appointment as Manager. Under the restated RMCO Agreement, we are a member and the sole manager of RMCO. As the sole manager, we, through our officers and Directors, control all of the day-to-day business affairs and decision-making of RMCO without the approval of any other member. Pursuant to the terms of the RMCO Agreement, we also cannot, under any circumstances, be removed as the sole manager of RMCO. Except as necessary to avoid being classified as an investment company or with the approval of RIHI, as long as we are the sole manager of RMCO, our business is limited to owning and dealing with our common units of RMCO, managing the business of RMCO, and fulfilling our obligations under the Exchange Act, and activities incidental to the foregoing.
Compensation. We are not entitled to compensation for our services as manager except as provided in the management services agreement described below under “Management Services Agreement,” or as otherwise approved by a vote of the members holding a majority of the outstanding common units. We are entitled to reimbursement by RMCO pursuant to the management services agreement for our reasonable out-of-pocket expenses incurred on its behalf.
Distributions. The RMCO Agreement requires “tax distributions” to be made by RMCO to its members, as that term is defined in the agreement. Tax distributions will be made pro rata on a quarterly basis to each member of RMCO, including us, such that each member will receive a tax distribution that is proportionate to its percentage interest in RMCO (based on the number of common units in RMCO that it holds relative to the total number of outstanding common units of RMCO) and that is sufficient to satisfy its tax liability based on such member’s allocable share of the taxable income of RMCO and an assumed tax rate that will be determined by us. Tax distributions will also be made only to the extent all distributions from RMCO for the relevant period were otherwise insufficient to enable each member to cover its tax liabilities. The RMCO Agreement also allows for distributions to be made by RMCO to its members out of “distributable cash,” as that term is defined in the agreement. We expect that distributions out of distributable cash will be made pro rata on a quarterly basis to the extent necessary to enable RE/MAX Holdings to cover its operating expenses and other obligations, including any obligations that RE/MAX Holdings may have under the tax receivable agreements that it entered into with RMCO’s pre-IPO owners (as described above under “Tax Receivable Agreements”), and to make anticipated dividend payments to the holders of its Class A common stock.
Transfer Restrictions. The RMCO Agreement generally restricts transfers of common units of RMCO, subject to limited exceptions. Any transferee of common units must assume, by operation of law or written agreement, all of the obligations
46 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
of a transferring member with respect to the transferred units, even if the transferee is not admitted as a member of RMCO.
Common Unit Redemption Right. The RMCO Agreement provides a redemption right to RIHI which entitles RIHI to have its common units of RMCO redeemed for our shares of Class A common stock on a one-for-one basis, or at our option, a cash payment equal to the market price of one share of our common stock. In connection with RIHI’s exercise of its redemption right, RE/MAX Holdings may instead elect to acquire RIHI’s common units in RMCO from RIHI, in which case RE/MAX Holdings would directly acquire RIHI’s common units in RMCO on the same terms as if RIHI had engaged in a redemption transaction with RMCO as previously described above.
Issuance of RMCO Common Units Upon Issuance of Equity Compensation. Upon the exercise of options we have issued or the issuance of other types of equity compensation (such as the issuance of restricted or non-restricted stock, payment of bonuses in stock or settlement of restricted stock units or stock appreciation rights in stock), we have the right to acquire from RMCO a number of common units equal to the number of our shares of Class A common stock being issued as a result. We will contribute to RMCO the amount of any consideration we receive for that equity compensation.
Dissolution. The RMCO Agreement provides that the unanimous consent of all members holding common units will be required to voluntarily dissolve RMCO. In addition to a voluntary dissolution, RMCO will be dissolved upon the entry of a decree of judicial dissolution in accordance with Delaware law. Upon a dissolution event, the proceeds of a liquidation will be distributed in the following order: (i) first, to pay the expenses of winding up RMCO; (ii) second, to pay debts and liabilities owed to creditors of RMCO; and (iii) third, to the members pro rata in accordance with their respective percentage ownership interests in common units of RMCO.
Confidentiality. Each member agrees to maintain the confidentiality of RMCO’s intellectual property and other confidential information.
Indemnification. The RMCO Agreement provides for indemnification of the manager, members and officers of RMCO and their respective subsidiaries or affiliates.
Sanctuary Golf Course
Sanctuary, Inc. is a company owned by David and Gail Liniger that owns and manages Sanctuary, a private golf course located near Denver, Colorado. We pay Sanctuary, Inc. for corporate meetings and events held at Sanctuary and for catering services. Transactions between the Company and Sanctuary were below $120,000 in 2021.
Other Related Party Transactions
Management Services Agreement
In connection with our IPO, we entered into a management services agreement with RMCO pursuant to which we provide certain management services to RMCO. In exchange for the services we provide, RMCO reimburses us for compensation and other expenses of our officers and employees and for certain out-of-pocket costs. RMCO also provides administrative and support services to us, such as office facilities, equipment, supplies, payroll, and accounting and financial reporting. The management services agreement also provides that our employees may participate in RMCO’s benefit plans, and that RMCO employees may participate in our Omnibus Plan. RMCO will indemnify us for any losses arising from our performance under the management services agreement, except that we will indemnify RMCO for any losses caused by our willful misconduct or gross negligence.
Director and Officer Indemnification and Insurance
We have entered into indemnification agreements with certain of our Directors and Executive Officers and purchased directors’ and officers’ liability insurance. The indemnification agreements and our Amended and Restated Certificate of Incorporation and Bylaws require us to indemnify our Directors and officers to the fullest extent permitted by Delaware law.
Executive Compensation, Employment Arrangements, and Separation Agreements
Please see “Compensation Disclosure and Analysis,” “Compensation Tables,” and “Employment Agreements and Separation Agreements” for information on compensation arrangements with our Executive Officers and agreements with our Executive Officers containing compensation and termination provisions.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 47 |
Policies and Procedures Regarding Related Party Transactions
We have adopted a written policy with respect to related party transactions. Under this policy, a “Related Party Transaction” is any financial transaction, arrangement or relationship (or series of similar transactions, arrangements, or relationships) in which we are or any of our subsidiaries is a participant and in which a Related Party has or will have a direct or indirect interest, other than any transactions, arrangements or relationships in which the aggregate amount involved will not or may not be expected to exceed $120,000 in any calendar year, subject to certain exceptions. A “Related Party” is any of our Executive Officers, Directors or director nominees, any stockholder directly or indirectly beneficially owning in excess of 5% of our stock or securities exchangeable for our stock, or any immediate family member of any of the foregoing persons.
Pursuant to our related party transaction policies and procedures, any Related Party Transaction must be reviewed by the Audit Committee. In connection with its review of a Related Party Transaction, the Audit Committee may take into account, among other factors it deems appropriate, whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the Related Party Transaction.
48 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
PROPOSAL 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
What am I voting on? Stockholders are asked to ratify the Audit Committee’s appointment of KPMG as the independent registered public accounting firm for 2022. | | | Our Audit Committee has appointed KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2022. Although stockholder ratification of the appointment of KPMG is not required by law, we are submitting the appointment to our stockholders for ratification as a matter of good corporate governance. The ratification of the appointment of KPMG requires the affirmative vote of a majority of the votes cast at the Annual Meeting. If stockholders do not ratify the appointment of KPMG, the Audit Committee will reconsider the appointment. Even if stockholders ratify the appointment of KPMG, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change would be in the best interests of the Company and its stockholders. Representatives of KPMG are expected to attend the Annual Meeting and will be available to respond to stockholder questions and will have an opportunity to make a statement if they desire to do so. RECOMMENDATION OF THE BOARD: The Board of Directors recommends that you vote FOR the ratification of KPMG as our independent registered public accounting firm for the fiscal year ending December 31, 2022. |
What is the Board’s voting recommendation? The Board recommends voting FOR the ratification of KPMG. | |||
What is the required vote? This item requires the vote of a majority of shares voted. |
The following table presents aggregate fees billed to the Company for services rendered by KPMG during the fiscal years ended December 31, 2021 and 2020.
| | | | | | |
|
| 2021 | | 2020 | ||
Audit fees (1) | | $ | 1,702,599 | | $ | 844,001 |
Audit-related fees (2) | | | 20,719 | | | 58,171 |
Tax fees | | | — | | | — |
All other fees (3) | | | 5,000 | | | — |
Total | | $ | 1,728,318 | | $ | 902,172 |
(1) Audit fees include fees for the audit of our consolidated financial statements (including the audits required of internal control over financial reporting). This includes subsidiary company audits and issuance of consents required by statute or regulation and similar matters. The increase in 2021 reflects incremental audit work of $0.5 million arising from the acquisition of the North American regions of RE/MAX INTEGRA and $0.3 million for reviewing corrections to purchase accounting for historical acquisitions of independent regions and $0.1 million related to additional consents due to the INTEGRA acquisition.
(2) Audit-related fees include fees for professional consultations with respect to complex accounting matters.
(3) | All other fees are fees for access to certain training materials. |
2022 Proxy Statement | RE/MAX Holdings, Inc. | 49 |
The following is the report of the Audit Committee with respect to the Company’s audited financial statements as of and for the year ended December 31, 2021. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference in such filing.
The Audit Committee makes the following report to the Board of Directors:
The Audit Committee consists of the following members of the Board: Kathleen Cunningham (Chair), Joseph DeSplinter, Teresa Van De Bogart, and Laura Kelly. Each of the members is independent and financially literate as defined under the applicable NYSE rules. Ms. Cunningham and Mr. DeSplinter have been designated as audit committee financial experts under Item 407(d)(5) of Regulation S-K.
The Audit Committee is responsible primarily for assisting the Board in fulfilling certain oversight responsibilities, including reviewing the financial information that will be provided to stockholders and others; appointing the independent registered public accounting firm; reviewing the services performed by the Company’s independent registered public accounting firm; directly overseeing the internal audit department; evaluating the Company’s accounting policies; reviewing the integrity of the financial reporting process and the internal control structure that management and the Board have established; reviewing significant financial transactions, earnings press releases and earnings guidance; investigating reports of wrongdoing made through the Company’s Ethics Helpline or otherwise and ensuring implementation of corrective actions; and overseeing and reviewing the Company’s management of cybersecurity risks. Management of the Company is responsible for preparation and presentation of the Company’s consolidated financial statements, the effectiveness of internal control over financial reporting, and procedures that are reasonably designed to assure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, KPMG LLP (“KPMG”), is responsible for performing an independent audit of the consolidated financial statements and the effectiveness of the Company’s internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”). The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements or disclosures.
Meeting agendas are established by the Audit Committee Chair and the Vice President of Internal Audit. During 2021 the Audit Committee cybersecurity oversight consisted of the Audit Committee receiving regular updates from the Vice President of Information Technology, in areas such as security implications resulting from the pandemic, rapidly evolving cybersecurity threats, cybersecurity technologies and solutions deployed internally, and major cybersecurity risk areas and procedures to address those risks. The Audit Committee also discussed, in separate private sessions with each of the Company’s Chief Financial Officer, Chief Accounting Officer, General Counsel, the independent registered public accounting firm, and the Vice President of Internal Audit, matters that the Committee believes should be discussed privately. The Audit Committee reviewed with management significant risks and exposures, including reports regarding the Enterprise Risk program and the overall adequacy and effectiveness of the Company’s legal, regulatory and ethical compliance programs, including the Company’s Code of Conduct and Supplemental Code of Ethics for Chief Executive Officer and Senior Officers.
In fulfilling its responsibility of appointment, compensation, and oversight of the services performed by the Company’s independent registered public accounting firm, the Audit Committee regularly meets with the independent registered public accounting firm and carefully reviews the responsibilities and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, overall audit strategy and timing, significant risks identified by the independent registered public accounting firm, any issues encountered during the audit, audit fees, auditor independence matters, and the extent to which the independent registered public accounting firm is retained to perform non-audit related services.
KPMG has served as the Company’s independent registered public accounting firm since 2003. To ensure that the appointment of the independent registered public accounting firm is in the best interests of the Company and its stockholders, the Audit Committee annually reviews the engagement of KPMG and considers several factors, including the independent registered public accounting firm’s qualifications, independence, audit approach, work quality, fees, and significant legal or regulatory proceedings related to the firm, along with the impact of changing auditors The Committee has determined it is in the best interest of the stockholders to reappoint KPMG as the independent registered public accounting firm after thoroughly evaluating these factors. The lead engagement partner rotates no less frequently than every five years.
50 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
The Audit Committee has established an auditor independence policy and reviews and approves this policy on an annual basis. This policy mandates that the Audit Committee approve the audit and non-audit services and related budget in advance, unless pre-approval is waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X. This policy also mandates that the Company may not enter into engagements with KPMG for non-audit services without the Audit Committee’s express approval. Pursuant to this policy, the Audit Committee has delegated authority to pre-approve services with fees up to $100,000 to the Audit Committee Chair, with such pre-approval subject to ratification by the Audit Committee at its next regularly scheduled meeting. In accordance with this policy, all services performed by KPMG were pre-approved by the Audit Committee in 2021 and 2020.
The Audit Committee has reviewed and discussed the audited financial statements as of and for the year ended December 31, 2021 with the Company’s management and KPMG. The Audit Committee has also discussed with KPMG the matters required to be discussed by Auditing Standard No. 1301, as amended “Communications with Audit Committees,” as adopted by the PCAOB. The Audit Committee also has received and reviewed the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence from the Company.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the financial statements referred to above be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Audit Committee:
Kathleen J. Cunningham, Chair
Joseph A. DeSplinter
Laura G. Kelly
Teresa S. Van De Bogart
2022 Proxy Statement | RE/MAX Holdings, Inc. | 51 |
INFORMATION REGARDING STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2023 Annual Meeting of Stockholders (the “2023 Meeting”), pursuant to Exchange Act Rule 14a-8 must be delivered to the Corporate Secretary at our principal executive offices no later than December 23, 2022 in order to be included in our proxy materials for that meeting. Such proposals must also comply with all applicable provisions of Exchange Act Rule 14a-8.
Stockholder proposals submitted for consideration at the 2023 Meeting but not submitted for inclusion in our proxy materials pursuant to Exchange Act Rule 14a-8, including nominations for candidates for election as directors, must be delivered to the Corporate Secretary at our principal executive offices not less than 90 days or more than 120 days before the first anniversary of the date on which we first mailed these Proxy Materials. However, if the 2023 Meeting occurs more than 30 days before or after June 1, 2023, then, to be timely, proposals must be delivered by the later to occur of (i) the 90th day prior to the 2023 Meeting or (ii) the 10th day following the first public announcement of the date of the 2023 Meeting. Assuming the 2023 Meeting is held within 30 days before or after June 1, 2023, then stockholder proposals must be received no earlier than December 23, 2022 and no later than January 22, 2023. Stockholder proposals must include the specified information concerning the stockholder and the proposal or nominee as set forth in our Bylaws.
Nominations for candidates for Board membership should contain the following information:
● the candidate’s name, age, business address, and home address;
● the candidate’s biographical information, including educational information, principal occupation or employment, past work experience (including all positions held within the past five years), personal references, and service on boards of directors or other positions the candidate currently holds or has held during the past three years;
● the class and number of shares of the Company the candidate beneficially owns;
● any potential conflicts of interest that may prevent or otherwise limit the candidate from serving as an effective Board member;
● any other pertinent information about the candidate and his or her qualifications;
● the name and record address of the stockholder making the recommendation; and
● the class and number of shares of the Company beneficially owned by the stockholder making the recommendation and the period of time the shares have been held.
Stockholder nominations should be submitted to the Company’s Corporate Secretary at the Company’s headquarters. Stockholder nominations may be made at any time. However, in order for a candidate to be included in the slate of director nominees for approval by stockholders in connection with a meeting of stockholders and for information about the candidate to be included in the Company’s proxy materials for such a meeting, the stockholder must submit the information set forth above and other information reasonably requested by the Company within the timeframe set forth above.
52 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
GENERAL INFORMATION AND FREQUENTLY ASKED QUESTIONS
RE/MAX Holdings is making this proxy statement available to its stockholders on or about April 21, 2022, in connection with the solicitation of proxies by the Board of Directors for the RE/MAX Holdings 2022 Annual Meeting of Stockholders. The Annual Meeting will be held on Wednesday, June 1, 2022, at (mountain time) as a virtual meeting, which you may join by visiting www.virtualshareholdermeeting.com/RMAX2022. As a stockholder of RE/MAX Holdings, you are invited to attend the Annual Meeting and are entitled and encouraged to vote on the proposals described in this proxy statement. Further information about the meeting and how to attend is below.
RE/MAX Holdings is one of the world’s leading franchisors in the real estate industry, franchising real estate brokerages globally under the RE/MAX brand and mortgage brokerages within the United States under the Motto Mortgage brand. RE/MAX and Motto are 100% franchised—we do not own any of the brokerages that operate under these brands. RE/MAX Holdings is a holding company. Its only business is to act as the sole manager of RMCO, LLC, a Delaware limited liability company (“RMCO”). RE/MAX Holdings was formed in June 2013 and completed an initial public offering of its Class A common stock in October 2013. RMCO’s direct and indirect subsidiaries include our two franchise brands: RE/MAX, LLC and Motto Franchising, LLC as well as other companies involved in providing technology and data services to the real estate and mortgage industries. The Company also has subsidiary marketing funds that collect funds from franchisees and are contractually obligated to spend such funds for marketing and technology purposes. Our Class A common stock trades on the New York Stock Exchange under the symbol “RMAX.”
In this proxy statement, “we,” “our,” “us” and the “Company” refer collectively to RE/MAX Holdings, RMCO, and RMCO’s subsidiaries.
Below are answers to common questions stockholders may have about the Annual Meeting.
What are the Proxy Materials?
The “Proxy Materials” are this proxy statement and our annual report to stockholders for the fiscal year ended December 31, 2021. If you request printed versions of the Proxy Materials, you will also receive a proxy card.
How can I get a full set of printed Proxy Materials?
We furnish Proxy Materials to many of our stockholders on the internet, rather than mailing printed copies. If you received a one-page notice by mail, you will not receive a printed copy of the Proxy Materials unless you request one. Instead, the notice instructs you how to access and review the Proxy Materials on the internet. If you would like a printed copy of the Proxy Materials, please follow the instructions on the notice.
What items are scheduled to be voted on at the Annual Meeting?
There are two proposals to be voted on at the Annual Meeting:
1. electing four directors to our Board of Directors; and
2. ratifying the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2022.
We may also transact any other business as may properly come before the Annual Meeting or before any adjournment or postponement thereof.
How do I attend the Annual Meeting?
This year’s meeting is completely virtual. You may participate in the meeting by visiting the following website: www.virtualshareholdermeeting.com/RMAX2022.
In order to attend, you will need to enter the control number included on your Notice of Internet Availability of Proxy Materials or on your proxy card. You will be able to vote your shares electronically during the Annual Meeting. Even if you plan to attend, we encourage you to vote by proxy in advance of the Annual Meeting in case you are unable to attend.
How does the Board of Directors recommend that I vote?
The Board of Directors recommends that you vote:
FOR each of the nominees to the Board of Directors (Proposal 1); and
2022 Proxy Statement | RE/MAX Holdings, Inc. | 53 |
FOR the ratification of the appointment of KPMG as our independent registered public accounting firm (Proposal 2).
Could other matters be decided at the Annual Meeting?
We do not anticipate any other matters will come before the Annual Meeting. If any other matters come before the Annual Meeting, the proxy holders appointed by our Board of Directors will have discretion to vote on those matters.
Who may vote at the meeting?
Holders of Class A common stock and holders of Class B common stock as of the close of business on April 8, 2022 (the “Record Date”) may vote at the Annual Meeting.
How many votes do I have?
Holders of Class A common stock are entitled to one vote per share of Class A common stock held as of the Record Date. Holders of Class B common stock are entitled to one vote for each common unit in RMCO owned by such holder as of the Record Date, regardless of the number of Class B shares owned.
As of the Record Date, there were 19,258,221 shares of Class A common stock outstanding, which will each carry one vote and one share of Class B common stock outstanding, which will carry 12,559,600 votes. (The Class B share’s voting power corresponds to the Class B shareholder’s ownership interest in RMCO. RMCO is owned by RE/MAX Holdings and RIHI, Inc. and is the parent company of all of our operating subsidiaries. For more information on our ownership structure, please see page 25 of our Annual Report.)
What vote is required for each proposal?
For the election of directors, each director must be elected by a plurality of the votes cast. This means that the four nominees receiving the largest number of “for” votes will be elected as directors. We do not have cumulative voting.
The ratification of the Company’s independent registered public accounting firm and any other proposals that may come before the Annual Meeting will be determined by the majority of the votes cast.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are a stockholder of record.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are a beneficial owner of shares held in street name. The organization holding your account is considered the stockholder of record. As a beneficial owner, you have the right to direct the organization holding your account on how to vote the shares you hold in your account.
How do I vote?
There are four ways for stockholders to vote:
● Via the internet. You may vote via the internet by visiting http://www.proxyvote.com and entering the unique control number for your shares located on the Notice of Internet Availability of Proxy Materials.
● By telephone. You may vote by phone by calling (800) 690-6903. You will need the control number from your Notice of Internet Availability of Proxy Materials.
● By mail. If you requested that Proxy Materials be mailed to you and you are a stockholder of record, you will receive a proxy card with your Proxy Materials and may vote by filling out and signing the proxy card and returning it in the envelope provided. If you are a beneficial owner of shares held in street name, you may vote by filling out the card you received from the organization holding your shares and returning it as instructed by that organization.
● By electronically voting during the Annual Meeting. You may also vote your shares by attending the Annual Meeting (see “How do I attend the Annual Meeting?” above) and voting during the meeting.
Can I change my vote after submitting a proxy?
Street name stockholders who wish to change their votes should contact the organization that holds their shares.
54 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
Stockholders of record may revoke their proxy before the Annual Meeting by delivering to the Company’s Corporate Secretary a written notice stating that a proxy is revoked, by signing and delivering a proxy bearing a later date, by voting again via the internet or by telephone, or by voting electronically during the Annual Meeting.
What happens if I abstain or don’t vote?
Abstentions (shares present at the meeting or by proxy that are voted “abstain”) and broker non-votes (explained in the next question below) are counted only for the purpose of establishing the presence of a quorum at the Annual Meeting. Abstentions are not counted as votes cast.
If I hold shares in street name through a broker, can the broker vote my shares for me?
If you hold your shares in street name and you do not vote, the broker or other organization holding your shares can vote on certain “routine” proposals but cannot vote on other proposals. Proposal 2 (ratification of the Company’s independent registered public accounting firm) is a “routine” proposal. Proposal 1 (election of directors) is not a “routine” proposal. If you hold shares in street name and do not vote on Proposal 1, your shares will be counted as “broker non-votes.”
Who is paying for this proxy solicitation?
The Company is paying the costs of solicitating proxies. Members of our Board of Directors and officers and employees may solicit proxies by mail, telephone, email, or in person. We will not pay Directors, officers, or employees any extra amounts for soliciting proxies. We may, upon request, reimburse brokerage firms, banks, or similar entities representing street name holders for their expenses in forwarding Proxy Materials to their customers who are street name holders and obtaining their voting instructions.
Why are you holding a virtual meeting instead of an in-person meeting?
We believe that holding a virtual meeting expands stockholder access to the meeting, improves communication, and reduces costs both for the Company and for stockholders who attend the meeting.
Will I be able to participate in the virtual meeting?
Yes, as noted above, stockholders can vote during the meeting. Further, we plan to give stockholders an opportunity to ask questions about each matter voted on during the meeting and, following the official business portion of the meeting, stockholders may ask questions about the business generally.
Where can I find voting results?
Final voting results from the Annual Meeting will be filed with the SEC on a Current Report on Form 8-K within four business days of the Annual Meeting.
I share an address with another stockholder. Why did we receive only one set of Proxy Materials?
Some banks, brokers, and nominees may “household” Proxy Materials. This means that only one copy of the Proxy Materials or the Notice of Availability of Proxy Materials may have been sent to multiple stockholders who share an address. If you hold your shares in street name and want to receive separate copies of the Proxy Materials or the Notice of Availability of Proxy Materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact the bank, broker, or other nominee who holds your shares.
Upon request, the Company will promptly deliver a separate copy of the Proxy Materials or the Notice of Internet Availability of Proxy Materials to any stockholder at a shared address to which a single copy was delivered. To receive a separate copy, you can contact our investor relations department. The department’s contact information is below.
Whom should I contact if I have additional questions?
You can contact our investor relations department at (303) 224-5458, investorrelations@remax.com or 5075 S. Syracuse St., Denver, CO 80237. Stockholders who hold their shares in street name should contact the organization that holds their shares for additional information on how to vote.
2022 Proxy Statement | RE/MAX Holdings, Inc. | 55 |
APPENDIX: Reconciliation of Non-GAAP Measures
The Company defines Adjusted EBITDA as EBITDA (consolidated net income before depreciation and amortization, interest expense, interest income and the provision for income taxes, each of which is presented in the unaudited consolidated financial statements included earlier in this press release), adjusted for the impact of the following items that are either non-cash or that the Company does not consider representative of its ongoing operating performance: loss or gain on sale or disposition of assets and sublease, settlement and impairment charges, equity-based compensation expense, acquisition-related expense, gain on reduction in tax receivable agreement liability, expense or income related to changes in the estimated fair value measurement of contingent consideration, and other non-recurring items.
A reconciliation of Adjusted EBITDA to net income is set forth in the following table (in thousands):
Year Ended December 31 | |||||||||
|
| 2021 |
| 2020 |
| 2019 | |||
Net income (loss) | $ | (24,620) | $ | 20,546 | $ | 47,314 | |||
Depreciation and amortization | 31,333 | 26,106 | 21,792 | ||||||
Interest expense | 11,344 | 9,223 | 12,229 | ||||||
Interest income | (217) | (340) | (1,446) | ||||||
Provision for income taxes |
|
| 2,459 |
|
| 9,162 |
|
| 10,982 |
EBITDA | 20,299 | 64,697 | 90,871 | ||||||
5 | 600 | 342 | |||||||
40,900 | — | — | |||||||
Loss on extinguishment of debt (2) | 264 | — | — | ||||||
Impairment charge - leased assets (3) | — | 7,902 | — | ||||||
Impairment charge - goodwill (4) | 5,123 | — | — | ||||||
Equity-based compensation expense | 34,298 | 16,267 | 10,934 | ||||||
Acquisition-related expense (5) | 17,422 | 2,375 | 1,127 | ||||||
Fair value adjustments to contingent consideration (6) | 309 | 814 | 241 | ||||||
Other |
|
| 1,057 |
|
| (97) |
|
| — |
Adjusted EBITDA |
| $ |
| $ |
| $ | |||
(1) Represents the effective settlement of the pre-existing master franchise agreements with INTEGRA that was recognized with the acquisition. See Note 6, Acquisitions to our audited consolidated financial statements in the 2021 Annual Report for additional information.
(2) The loss was recognized in connection with the amended restated Senior Secured Credit Facility. See Note 10, Debt to our audited consolidated financial statements in our 2021 Annual Report for additional information.
(3) Represents the impairment recognized on a portion of our corporate headquarters office building in the prior year. See Note 3, Leases to our audited consolidated financial statements in our 2021 Annual Report for additional information.
(4) Lower-than-expected adoption rates of the First technology, resulted in downward revisions to long-term forecasts, resulting in an impairment charge to the First reporting unit goodwill. See Note 8, Intangible Assets and Goodwill to our audited consolidated financial statements in our 2021 Annual Report for additional information.
(5) Acquisition-related expense includes personnel, legal, accounting, advisory and consulting fees incurred in connection with the evaluation, due diligence, execution and integration of acquisitions.
(6) Fair value adjustments to contingent consideration include amounts recognized for changes in the estimated fair value of the contingent consideration liabilities. See Note 11, Fair Value Measurements to our audited consolidated financial statements in the 2021 Annual Report for additional information.
56 | RE/MAX Holdings, Inc. | 2022 Proxy Statement |
| VIEW MATERIALS & VOTE w SCAN TO RE/MAX HOLDINGS, INC. C/O BROADRIDGE P.O. BOX 1342 BRENTWOOD, NY 11717 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/RMAX2022 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D81357-P73284 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. RE/MAX HOLDINGS, INC. The Board of Directors recommends you vote FOR the following: 1.Election of Directors Nominees: For Withhold For All AllAllExcept To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. ! ! ! 01) 02) 03) 04) Stephen Joyce David Liniger Annita Menogan Teresa Van De Bogart The Board of Directors recommends you vote FOR the following proposal: For Against Abstain ! ! ! 2.Ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2022. Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com. D81358-P73284 RE/MAX HOLDINGS, INC. Annual Meeting of Stockholders June 1, 2022 Noon This proxy is solicited by the Board of Directors This proxy is solicited by the Board of Directors for the Annual Meeting of Stockholders to be held on June 1, 2022. The undersigned, revoking all prior proxies, hereby appoints Stephen Joyce, Karri Callahan and Adam Scoville, and any of them, each with full power of substitution, as proxies to represent the undersigned and vote all shares of Class A or Class B Common Stock of RE/MAX Holdings, Inc. (the "Company") which the undersigned would be entitled to vote if personally present at the Company's Annual Meeting of Stockholders to be held online at www.virtualshareholdermeeting.com/RMAX2022 on June 1, 2022 at Noon (Mountain Time) and at any adjournments or postponements thereof. When properly executed, this proxy will be voted as directed. If no direction is indicated, this proxy will be voted "FOR" each director nominee in Proposal 1 and "FOR" Proposal 2. In their discretion, the proxies are authorized to vote on such other business as may properly come before the meeting. Continued and to be signed on reverse side |
