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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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MAXIMUS Inc.
(Name of Registrant as Specified in Its Charter)
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Making a Difference When it
Matters Most

Who is Maximus?
Maximus helps millions of people access the government services they need. We make complex programs more accessible and easier to use and understand — including for some of the most vulnerable and at-risk communities.
Maximus appreciates that every interaction with a government service in which we are involved reflects on our design process — whether citizens are using digital channels for information about a health and human services public program offering, calling a contact center with questions about COVID-19 testing, using an app to enroll in Medicaid, or visiting an agency office for employment services.
We understand how challenging public programs can be. This is because it is our sole focus. We proudly design, develop, and deliver innovative and impactful health and human services programs to ensure these challenges do not create barriers to access of these life and community-changing services.

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Highlights for fiscal year 2020 include:

Our revenue increase was driven primarily by the Census contract in the U.S. Federal Services Segment and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic.
Our revenue growth was offset by reductions in volumes and revenue resulting from temporary program changes instituted by our government clients in response to the global pandemic.
8.3%
Full year operating profit margin

$3.39
Diluted earnings per share

Our full year operating profit margin and diluted earnings per share reflect the negative volume impacts as well as a greater mix of cost plus revenue driven by the Census contract.
~$245M
Cash flow from operations

~$204M
Free cash flow*

Our cash flows in fiscal year 2020 were tempered by the unfavorable impacts of the global pandemic.
$0.28
Quarterly dividend per share
$0.25 (fiscal year 2019)

We increased our quarterly dividend per share of Maximus common stock compared to the prior fiscal year.

~$72M
Cash and cash equivalents held

We had no outstanding borrowings on our corporate credit facility at September 30, 2020.
*
“Organic revenue growth” and “free cash flow” are non-GAAP terms. A description of how we calculate this information and a summary of our use of non-GAAP numbers may be found in Item 7 of our Annual Report on Form 10-K for the year ended September 30, 2020, filed with the SEC on November 19, 2020.

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Letter From the Board of Directors
January 27, 2021
Dear Fellow Shareholders,
The health and human services programs that we help people access were never more important than they were in 2020, while our ability to deliver them safely was never more challenging. However, our dedicated teams united for a common purpose of supporting people who rely on our services. We remain financially stable and well positioned for new opportunities in 2021 and beyond as the need for our services has never been more vital.
Some of this stability and positioning of the business is owed to our strong independent leadership by our diverse Board of Directors, good corporate governance structures, and robust culture. We listened to you, our shareholders, and subsequently sought and obtained shareholder support to amend our charter to enable annual director elections. That change complements our other strong governance features, including our independent board chair, majority voting for the election of directors, and our not having either a dual class capitalization structure or a ‘poison pill.’ In addition, our board remains small and is steadily refreshed, not over-boarded, and 33% diverse by gender.
Additionally, while most shareholders agreed with management and voted against the 2020 shareholder proposal on political expenditures, the Board of Directors took immediate action to ensure those who voted in favor were engaged. As a result of conversations with many shareholders, direct oversight of political and government relations expenditures has been formally assigned to the Nominating and Governance Committee as reflected in the updated committee charter. Additionally, we have disclosed additional insight into our oversight efforts on our website at maximus.com/government-relations.
In fiscal year 2021, we look forward to continuing to implement our long-term growth strategy. We encourage you to read more about us in the pages that follow, ask for your voting support on the items we have put forward, and invite you to contact us via the means described in this proxy at any time. We thank you for your continuing interest in Maximus.
Sincerely,

Peter B. Pond
Chairman of the Board
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Letter From the Chief Executive Officer
January 27, 2021


Dear Maximus Shareholders,
Our mission of Helping Government Serve the People® has guided our business for more than 45 years. This mission has never been more important as we help individuals and families connect to critical government programs, many of which were designated as “essential” services during the pandemic.
Supporting our people through a global health pandemic.
When faced with the COVID-19 global pandemic, we knew that in order to protect the people we serve, we had to protect our own people first.
We took quick and decisive steps to safeguard the wellbeing of our people. We rapidly implemented new policies that emphasized paid sick leave and social distancing, and significantly enhanced cleaning regimens. We developed our COVID-19 emergency income-continuity plan which covered scenarios such as quarantine, childcare, government-mandated restrictions, office closures, and employees who are in high risk categories in the early months of the pandemic, while protecting their health insurance. To further support our team members, we launched topical videos from our Chief Medical Officer, mental health seminars, virtual development training classes, as well as wellness mobile apps.
One of the most important and challenging things we did involved the systematic transition of employees to a work from home model. This was a heroic effort in procuring new equipment, increasing network capacity and security, and deploying new services all while keeping operations running to meet program needs. Many government programs were never designed to be carried out in a remote environment, presenting high hurdles to immediately enable a remote workforce. Our ability to deploy HIPAA-compliant work from home capabilities enables us to maintain operational continuity and assist program participants remotely for more complex services, including clinical and social assessments required to access important government benefits and services.
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At peak, we successfully transitioned 63% of our U.S. workforce to work from home, while 32% remained in an office setting and the remainder were on leave. Outside of the U.S., 76% of our employees shifted to a work from home model at peak.
While both tragic and challenging, the pandemic provides us the opportunity to test new ways to serve citizens who need access to vital services. We are also gaining new data related to citizen engagement, channel preferences, and agent performance which enables us to optimize this model. This also allows us to evaluate the optimal environment for each individual employee over the longer term.
Opportunities and challenges for the business as a result of COVID-19.
While the pandemic created new demands, such as contact tracing and unemployment insurance claims, it reduced volumes for other core programs where our government clients instituted temporary changes to ensure continuity of access to vital programs and to slow the spread of the pandemic. Currently, we are working in partnership with our clients to carefully plan the resumption of prior operational levels. Meanwhile, we continue to manage our costs prudently and invest in new capabilities, while at the same time, new demands have enabled us to hire thousands of employees with work from home flexibility, creating opportunities for many in the face of historic unemployment levels.
Diversity, equity, and inclusion at Maximus.
Diversity, equity, and inclusion (“DE&I”) are central to our company identity, and we are proud to contribute to and positively impact our communities.
We are all shocked and saddened by the needless deaths of black Americans and other people of color as the result of racial prejudice and injustice. Such tragic events should never be tolerated or forgotten. We owe our employees, our clients, our citizens, and the communities we serve the assurance that these issues will not be brushed aside. So, we are taking action. We are holding listening sessions in which difficult discussions on racism and injustice can constructively and safely occur. We are seeking to provide resources for our employees who want to be part of constructive change in their communities. These actions are consistent with the human rights principles we adopted in 2020 that reflect the principles in the UN Global Compact and the UN Guiding Principles of Business and Human Rights.
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Continuing to implement our long-term strategy.
We hope to advance three key elements of our strategy in 2021:
Digital Transformation: We are building on 2020 by implementing the next stage of our digital transformation as we look to use more language processing, artificial intelligence, and cognitive computing.
Clinical Evolution: Through our newly formed Maximus Public Health, we are supporting efforts to contain COVID-19. We believe this is just the beginning of an increase in governmental demand for public health support and the modernization of public health infrastructure. We have hired leading public health experts as we expand into this emerging market.
Market Expansion: We continue to bring core capabilities to new programs and clients, add new capabilities to access adjacent markets, and expand geographically. In 2020 this included an expansion into the unemployment insurance market and an acquisition in South Korea to deliver employment services.
We look to 2021 to be a year of progressive stability as we continue to work with our government clients to effectively respond to the extraordinary needs of their citizens in the wake of the pandemic.
We welcome the opportunity that our annual meeting gives us to receive your feedback. We ask for your voting support and encourage you to provide us input anytime throughout the year.
Sincerely,

Bruce L. Caswell
Chief Executive Officer and President
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Notice of Annual Meeting of Shareholders
To Be Held March 16, 2021
Due to the continued public health impact of the COVID-19 pandemic and advisories issued by government authorities limiting public gatherings, the 2021 Annual Meeting of Shareholders (the “Annual Meeting”) of Maximus, Inc. (“Maximus” or the “Company”) will be conducted online this year through a live webcast. This virtual setting will allow shareholders to participate safely amid the global pandemic.


virtualshareholdermeeting.com/MMS2021
Voting Matters and Board Recommendations:
Proposal
Description
Board’s Voting
Recommendation
Page
Reference
1
The election of one Class I Director to serve until the 2022 Annual Meeting of Shareholders, one Class II Director to serve until the 2023 Annual Meeting of Shareholders and three Class III Directors nominated by the Board of Directors of the Company to serve until the 2022 Annual Meeting of Shareholders.

FOR each nominee
2
The approval of our 2021 Omnibus Incentive Plan.

3
The ratification of the appointment of Ernst & Young LLP as our independent registered accounting firm for our 2021 fiscal year.

4
An advisory vote to approve the compensation of the named executive officers.

5
A shareholder proposal pertaining to the disclosure by the Company of certain lobbying expenditures and activities.

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The meeting will also include the transaction of any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
Record date
Shareholders of record at the close of business on January 15, 2021 will be entitled to vote at the Annual Meeting or at any adjournment or postponement of the Annual Meeting.
Attendance
All shareholders are invited to attend the virtual meeting. In order to attend the virtual Annual Meeting, go to virtualshareholdermeeting.com/MMS2021 and enter the control number found on your proxy card, voting instruction form, or notice you previously received. If you are not eligible to participate in the meeting, you may listen to a webcast of the meeting by visiting virtualshareholdermeeting.com/MMS2021 and logging on as guest. Guests will not be able to ask questions or vote at the meeting.
How to vote
Your vote is important. Whether or not you plan to attend, we encourage you to vote promptly. There are several ways that you can cast your ballot:

Via the Internet
 

By Mail
Go to proxyvote.com
 
Sign, date, and return your proxy card in the enclosed envelope
 
 
 
 

By Telephone
 

In Person, Virtually
(+1) 800-586-1548 (toll-free)
(+1) 303-562-9288 (international)
 
Attend the virtual Annual Meeting
Materials
The Board of Directors of Maximus (“Board of Directors” or “Board”) is making this proxy statement, our 2020 annual report on Form 10-K, and a form of proxy available to you in connection with the solicitation of proxies by the Board for use at the 2021 Annual Meeting and at any adjournments or postponements of the Annual Meeting.
Under Securities and Exchange Commission (“SEC”) rules, we have elected to furnish our proxy materials to shareholders over the internet. We believe this will allow us to provide shareholders with the information they need while at the same time conserving natural resources and lowering the cost of printing and delivery. On or about January 27, 2021, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 2021 proxy statement and 2020 annual report. The Notice also provides instructions on how to vote online and includes instructions on how to receive a paper copy of the proxy materials by mail.
By Order of the Board of Directors
 
 
 
By:

 
 
 
David R. Francis
 
General Counsel and Secretary
 
This proxy statement is dated January 27, 2021, and is first being furnished to shareholders on or about January 27, 2021.
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 Maximus at a Glance

Who is Maximus?
We are a U.S.-based global company with approximately 34,000 employees dedicated to helping governments on four continents administer their health and human services programs. We are instrumental in helping people who need governmental support get it. Health and human services support is core to peoples’ lives, and the demand for our provision of these services is driven by:
• Aging populations with complex healthcare needs;

• Rising living standards in emerging markets 
    creating new demands for our services;

• Growing complexity of programs, such as evolving
    eligibility requirements;

• The creation of new programs and initiatives such 
    as long-term services and support;

• Increased appetite for outsourcing due to flexibility,
    scalability, and accountability; and
• Our strong reputation and long-term relationships
    with clients which enable us to:

  − Win long-term contracts;

  − Achieve high renewal rates;

  − Provide additional services to supplement our
    core services;

  − Deliver strong and steady margins; and

  − Grow organically and through acquisitions.
How do we operate?
Maximus operates in a sector with relatively few environmental and social-issue risks but many opportunities, particularly ones that enable us to improve the quality of citizens’ lives and provide meaningful opportunities to our employees:
We run programs that connect people with disabilities and long-term health conditions to sustainable, long-term employment
We help people, including many of society's most vulnerable populations, access, connect to, and use government benefit programs
We provide comprehensive employee benefits to our people
We offer ongoing education and advancement opportunities via our Center for Employee Development and Maximus University
We implement recycling efforts in our operations and provide innovative solutions to support client efforts to reduce paper consumption and increase use of cloud solutioning
We are committed to protecting the rights of our employees and complying with all federal, state, and local laws
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What was new with us in 2020?
2020 was an unprecedented year for the world as a result of the Coronavirus (“COVID-19”) pandemic, and Maximus experienced both favorable and unfavorable impacts as a result.
Underscoring the importance of the services we provide, many of our U.S. contracts were designated as “essential” by government agencies in the midst of COVID-19. Continued operations of these programs ensure vulnerable individuals and families can access vital healthcare and safety-net services during these uncertain times.
Our primary objective amidst this pandemic is to protect our employees while ensuring global business continuity of our essential services to help vulnerable individuals and taking responsible action to stop the virus from spreading further. The safety and wellbeing of our employees are paramount, and we made several sweeping changes to best serve our employees.
While some of the programs we support have experienced reduced volumes due to the pandemic, we have also been successful in winning new contracts tied to public health initiatives such as contact tracing and unemployment insurance programs to help governments respond to the COVID-19 crisis. The individuals and families served under these programs are those considered some of the most vulnerable to COVID-19, and we believe our operations support programs that are essential for their safety and wellbeing.
In 2020, we continued to evolve our Board composition by adding Jan Madsen and welcoming the return of John Haley to our board of directors. We are also transitioning to a declassified board based on direct feedback from our shareholders.
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We continued executing upon our long-term growth strategy through our three-pronged approach:

Mergers and acquisitions (“M&A”) remain a priority for us. We temporarily paused significant M&A activity in March 2020 in order to preserve cash during the early stages of uncertainty resulting from the pandemic. However, we have since resumed M&A activity. In fiscal year 2020, we expanded into the unemployment insurance market and completed an acquisition in South Korea to deliver employment services. We seamlessly completed the integration of 14,000 employees from the November 2018 acquisition of the U.S. Federal citizen engagement centers business. That acquisition positioned us as a premier partner to the U.S. government for citizen benefit program implementation and management. We aim to find targets that enable us to build long-term, sustainable, organic revenue growth by continuing to build scale, enhance our clinical and digital capabilities, and extend into new areas.

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Our Board of Directors
The Maximus Board of Directors takes seriously the commitment to serve the interests of our shareholders.
To do our jobs, we balance many interests, including:
maintaining long-term customer relationships while steadily seeking new business opportunities;
recruiting and retaining best-in-class human capital, complimented with leading technology;
managing an enterprise-wide risk strategy while being willing to consider innovative opportunities;
supplementing and supporting governmental entities;
maintaining sustainable, long-term strategies while being able to pivot quickly when needed; and
supporting management, while also holding them accountable.
To balance these interests effectively, the Board composition must reflect:
newly appointed members with fresh ideas as well as members with meaningful tenure;
mid-career and later-career members;
directors with operational, financial, human resources, and governmental expertise on a global scale; and
a diverse array of backgrounds, skills, and experiences.
Our biographies, which follow, reflect our commitment to these characteristics.
More broadly, in the material that follows, we share with you important information about your Board, including information on:
Who We Are
How We Are Selected
How We Are Elected
How We Are Governed
How We Are Organized
How We Are Paid
How to Communicate with Us
Our board refreshment efforts continued in 2020. Russell A. Beliveau and Paul R. Lederer retired from the Board and John J. Haley and Jan D. Madsen were appointed to the Board effective as of the Annual Meeting. John Haley returns to the Maximus Board of Directors to provide expertise around human resources, environmental, social, governance (“ESG”), and employee compensation with a historical understanding of the unique aspects of Maximus business needs in these areas. In addition, at last year’s Annual Meeting we recommended, and our shareholders approved, a proposal to amend our Articles of Incorporation to provide for the annual election of all directors following a phase-in period. This year our Class III directors are up for election to a one-year term. In addition, Mr. Haley and Ms. Madsen will stand for election as Class I and Class II directors, respectively.
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Who We Are
The following presents biographical information about the nominees and current directors whose terms of office will continue after the Annual Meeting. As part of the information below, we have included a brief description of the experience, qualifications, attributes and skills that led to the conclusion that each director should serve on the Board. Information about the number of shares of common stock beneficially owned by each nominee and director, directly or indirectly, as of January 15, 2021, appears below under “Security Ownership — Security Ownership of Management.”
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Nominees for Class III Directors (terms expiring in 2022)

Bruce L. Caswell
Age 55
Director Since: 2018
Why he is valuable to Maximus:
Mr. Caswell provides subject matter expertise in government policy and health and human services programs together with his detailed knowledge of the Company's operations gained through his service as our Chief Executive Officer, President, and other senior leadership positions at the Company. The Board of Directors believes that it is important to have the Company’s chief executive also serve as a director.

Career Snapshot:
Mr. Caswell was appointed Chief Executive Officer of Maximus effective April 1, 2018. He was named President of Maximus in 2014, and prior to that served as the President of our Health Services Segment from 2007 through 2014. Before that he was President of Operations from 2005 to 2007 and President of our Human Services Group from 2004 to 2005. Previously, he worked at IBM Corporation for nine years, serving most recently as Vice President, State and Local Government & Education Industries for IBM Business Consulting Services.
Education:
• Masters, Public Policy,
   John F. Kennedy School
   of Government at
   Harvard University
• B.A., Economics,
   Haverford College

More:
• Board of Directors, Wolf Trap Foundation for the Performing Arts, a nonprofit organization

Richard A. Montoni
Age 69
Director Since: 2006
Vice Chairman Since: 2018
Why he is valuable to Maximus:
Mr. Montoni brings to Maximus audit and financial experience together with the detailed knowledge of the operations of the Company gained through his prior service as our Chief Executive Officer and other senior leadership positions at the Company.

Career Snapshot:
Mr. Montoni served as Senior Advisor to the Chief Executive Officer of Maximus from April 1, 2018 to September 30, 2019. He was the Company's Chief Executive Officer from 2006 to April 1, 2018. He also served as President from 2006 through 2014. Previously, Mr. Montoni served as our Chief Financial Officer and Treasurer from 2002 to 2006. Before his employment with Maximus, Mr. Montoni served as Chief Financial Officer and Executive Vice President for Managed Storage International, Inc. in Broomfield, Colorado from 2000 to 2001. From 1996 to 2000, he was Chief Financial Officer and Executive Vice President for CIBER, Inc., a New York Stock Exchange (“NYSE”)-listed company in Englewood, Colorado where he also served as a director until 2002. Before joining CIBER, he was an audit partner with KPMG LLP, where he worked for nearly 20 years.
Education:
• Masters, Accounting,
   Northeastern University
• B.S., Economics, Boston
   University

More:
• Chairman, Northern Virginia
   Technology Council, a
   membership and trade
   association
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Who We Are

Raymond B. Ruddy
Age 77
Director Since: 2004
Vice Chairman: 2005 – 2018
Chairman of the Audit
Committee Since: 2018
Prior Tenure: 1985 - 2001
Why he is valuable to Maximus:
Mr. Ruddy's qualifications and skills include, among other things, his consulting and financial experience as well as his knowledge of government programs and our business from his prior service with the Company.

Career Snapshot:
Mr. Ruddy retired from Maximus in 2001. Before his retirement Mr. Ruddy served as the Chairman of the Board of Directors from 1985 to 2001 and President of our Consulting Group from 1989 to 2000. From 1969 until he joined us, Mr. Ruddy served in various capacities with Touche Ross & Co., including Associate National Director of Consulting from 1982 to 1984 and Director of Management Consulting (Boston, Massachusetts office) from 1978 to 1983.
Education:
• MBA, Wharton School of
   Business of the University of
   Pennsylvania
• B.S., Economics, Holy Cross
   College
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Nominee for Class I Director (term expiring in 2022)

John J. Haley
Age 71
Director Since: 2020
Prior Tenure: 2002 – January 4, 2019
Why he is valuable to Maximus:
Mr. Haley’s qualifications and skills include, among other things, his experience as the Chief Executive Officer and Chairman of a large, publicly-traded consulting firm together with his knowledge of finances, human resources and compensation matters, as well as his public company directorship experience. Mr. Haley has been instrumental in listening to feedback from Maximus shareholders and embracing a forward-looking view on ESG matters. He has been a champion of the board refreshment strategy and provides human resources expertise.

Career Snapshot:
John J. Haley served as one of our directors from 2002 to January 2019 and then rejoined the Board in March 2020. Since January 2016, Mr. Haley has served as the Chief Executive Officer of Willis Towers Watson, an insurance broker and human resources and employee benefits consulting firm formed through the merger of Willis Group Holdings Public Limited Company and Towers Watson & Co. From 2010 until January 2016, Mr. Haley served as the Chief Executive Officer and Chairman of the Board of Towers Watson & Co. Previously he served as President and Chief Executive Officer of Watson Wyatt Worldwide, Inc. from 1999 until its merger with Towers Perrin, Forster & Crosby, Inc. in 2010. Mr. Haley joined Watson Wyatt in 1977. Mr. Haley is a Fellow of the Society of Actuaries and is a co-author of Fundamentals of Private Pensions (University of Pennsylvania Press).
Education:
• A.B., Rutgers University

More:
• Director, Willis Towers Watson
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Who We Are
Nominee for Class II Director (term expiring in 2023)

Jan D. Madsen
Age 57
Director Since: 2020
Why she is valuable to Maximus:
Ms. Madsen brings finance, accounting, mergers and acquisitions, and operations expertise gained through her current and prior positions in higher education and international, publicly traded technology-based business services organizations.

Career Snapshot:
Ms. Madsen is a Certified Public Accountant with over fifteen years of experience in global public company senior finance and operations roles, most recently as the Chief Financial Officer of West Corporation from 2014 - 2018. West, recently rebranded Intrado, operates in 28 countries, serving Fortune 100 and other business clients with technology-based services, focused on communications, safety and health, and wellness. Ms. Madsen was responsible for global financial operations, including internal audit, public reporting, and treasury, managing over $4 billion in debt. She was also instrumental in significant strategic initiatives, including a secondary equity offering, debt, and tax restructuring, and taking the company private in a sale to Apollo in 2017. Prior to West, Ms. Madsen held various finance and operating roles at First Data Corporation, including segment chief financial officer and senior vice president of six sigma quality, earning her certifications in six sigma process improvement methodologies. Prior to First Data, she was a manager at an international public accounting firm. Since 2018, Ms. Madsen has served as the Executive Vice President of Creighton University, overseeing operations including finance, information technology, human resources, communications and marketing, facilities, internal audit and continuous improvement.
Education:
• B.S.B.A., University of
   Nebraska - Lincoln

More:
• Certified Public Accountant
• Member National Association
   of Corporate Directors
The Board of Directors Recommends that the Shareholders Vote “FOR” the Five Nominees Set Forth Above.
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Continuing Class I Directors (terms expiring in 2022)

Anne K. Altman
Age 61
Director Since: 2016
Why she is valuable to Maximus:
Ms. Altman’s qualifications and skills include, among other things, her experience with public sector clients and the information technology industry including security, analytics, cognitive, digital, commerce, and cloud capabilities. She provides expertise around ESG and responsible stewardship.

Career Snapshot:
Ms. Altman retired from IBM in 2016 having served since 2013 as the company’s General Manager for U.S. Federal and Government Industries. Previously she served as General Manager for IBM's Global Public Sector with responsibilities for global government—national, regional, and local—as well as education, healthcare, and life sciences. Ms. Altman joined IBM in 1981 as a systems engineer and held a number of roles with increasing responsibility in areas pertaining to government and technology
Education:
• B.S., George Mason University

More:
• Director, SPX FLOW, Inc.

Peter B. Pond
Age 76
Director Since: 1997
Chairman of the Board Since: 2001
Why he is valuable to Maximus:
Mr. Pond brings to Maximus his experience in the investment and financial industry and as a public company director. The Board of Directors believes that he possesses the leadership skills that allow him to effectively lead our Board as independent, non-executive Chairman. He serves as a champion of board diversity, ESG, and DE&I.

Career Snapshot:
Mr. Pond is a founder of ALTA Equity Partners LLC, a venture capital firm, and has been a General Partner of that firm since June 2000. Prior to that, Mr. Pond was a Principal and Managing Director in the Investment Banking Department at Donaldson, Lufkin & Jenrette Securities Corporation in Chicago and was head of that company’s Midwest Investment Banking Group.
Education:
• MBA, University of Chicago
• B.S., Economics,
   Williams College
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Who We Are

Continuing Class II Directors (terms expiring in 2023)

Gayathri Rajan
Age 53
Director Since: 2016
Why she is valuable to Maximus:
Ms. Rajan brings to Maximus cutting-edge information technology expertise that has been used to build secure, scalable financial platforms and innovative consumer-centric products.

Career Snapshot:
Ms. Rajan is General Manager and Vice President of Geo-Enterprises at Google. She joined Google in 2006 and has served in roles of increasing responsibility leading product development for the Internet of Things, Commerce and Payments. From 2016 to 2018 she was Vice President of Product Management for Geo Monetization, and from 2014 to 2016 she was Vice President of Product Management for Android Things. Prior to that, Ms. Rajan held engineering and product management roles at Financial Engines, eCal Corp, and The Vanguard Group.
Education:
• MBA Stanford University
• MSc Computer Science,
   University of Pennsylvania
• B.A. and M.Eng,
   Chemical Engineering,
   Cambridge University

More:
• Commonwealth Scholar

Michael J. Warren
Age 53
Director Since: 2019
Why he is valuable to Maximus:
Mr. Warren brings familiarity with government programs and operations and investment, strategic planning and financial expertise gained through his service on other boards and his current and prior positions in government and private industry.

Career Snapshot:
Mr. Warren is the Managing Director of Albright Stonebridge Group (“ASG”). He served as ASG's Managing Principal from 2013 to 2017 and as Principal from 2009 to 2013. Prior to ASG, he served as the Chief Operating Officer and Chief Financial Officer of Stonebridge International from 2004 to 2009, where he managed operations, business development, finance, and personnel portfolios before the firm's merger with The Albright Group. Mr. Warren served in various capacities in the Obama Administration, including as Senior Advisor in the White House Presidential Personnel Office and as co-lead for the Treasury and Federal Reserve agency review teams of the Obama-Biden Presidential Transition.
Education:
• B.A., Yale University
• B.A., Balliol College,
   University of Oxford

More:
• Rhodes Scholar
• Board of Trustees, District of
   Columbia Retirement Board
• Board of Directors and
   Chairman of the Audit
   Committee, Overseas Private
   Investment Corporation
   (“OPIC”)
• Board of Trustees and of the
   Risk and Audit Committees,
   Commonfund
• Yale University Council and
   Yale School of Management
   Board of Advisors
• Director, Walker & Dunlop, Inc.
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Skills Matrix
Our Board seeks diverse representation in terms of age, length of service, expertise, gender, orientation, and race/ethnicity. The Board and the Nominating and Governance Committee assess the appropriate mix of skills, qualifications, and characteristics when looking for new directors and nominating current directors in conjunction with the needs of the Company as it continues to evolve.
In our business, such evolution requires that we closely follow the changing policy priorities of governments, how governments contract for services to address these priorities, how technology reshapes what can be done in a more efficient manner and with what risks and benefits, how demographics and other global forces change our customers’ needs and opportunities, etc. As such, our skills matrix will continue to be reviewed regularly and will evolve under the guidance of the Nominating and Governance Committee.
The information below summarizes some of the attributes, experiences, skills, background, and diversity of our Board members and nominees. This is a high-level overview and does not encompass all of the contributions offered by our directors.
Key Qualifications
Key Qualifications
Relevance to Maximus

Additional CEO/CFO, Public Board and/or NEO Experience
Experience in this environment outside of Maximus offers insight into the need for integrity and transparency, provides practical experience in risk management at the operational and enterprise level, and contributes seasoned views on issues from strategy to succession.

Innovation and Technology Expertise
Technology and innovation drive our business forward, increase our stickiness with clients, differentiate our solutions, and ensure we provide more efficient and cost-effective services.

International Expertise
With global operations, understanding of international environments, geo-political risk, and foreign government structure and operations is critical.

Financial Expertise
Our business involves complex financial and disclosure requirements; skills include financial literacy, and expertise in accounting and financial statements.

M&A Experience
M&A experience ensures a focus on shareholder value creation, provides insight to the due diligence process to ensure strategic decisions are made, and offers best practices for seamless integration.

Risk, Privacy, Data Security Management Expertise
Within our highly regulated environment, understanding the policies and procedural requirements to best manage compliance and risk is essential.

Government Services Experience
Our business is in a unique environment as a government services provider and knowledge of the regulatory and procurement environment is of utmost value, particularly as governments implement outcome-based services to drive value for money and ensure accountability.,

Human Resources
With a diverse global workforce, our Company benefits from Board level HR expertise, which guides strategic HR initiatives, enables stronger diversity, equity, and inclusion management, and provides for positive labor relations.

Independence
Independence enables directors to provide unbiased oversight with no material relationship to the Company.
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Board Member
Additional
CEO/CFO,
Public
Board
and/or
NEO
Experience
Innovation
and
Technology
Expertise
International
Expertise
Financial
Expertise
M&A
Experience
Risk,
Privacy,
Data
Security
Management
Expertise
Independence
Government
Services
Experience
Human
Resources
Anne Altman
Bruce Caswell
John Haley
Jan Madsen
Richard Montoni
Peter Pond
Gayathri Rajan
Raymond Ruddy
Michael Warren
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How We Are Selected and Comprised
As a global company whose employees, customers, and stakeholders are very diverse, as well as being a company with strong hiring programs for diverse populations including people with disabilities and veterans, we have strong cultural, financial, and reputational reasons to seek a wide range of diverse attributes and skills when looking for board members. We apply our diversity programs, as well as our Board recruiting practices inclusively to include, in addition to diversity of skills and experiences and backgrounds, all protected classes such as race/ethnicity, color, religion, sex (including pregnancy, gender and gender identity and sexual orientation), national origin, age, disability, veteran status, and genetic information. We are pleased that our efforts to embed best DE&I practices into our recruiting at all levels has resulted in a Board of Directors 44% of whom self-identify as female and/or a person of color.

*John Haley has re-joined the Board of Directors, having previously served from 2002 – January 4, 2020 and his total tenure is noted as such.
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How We Are Elected
The Board of Directors currently consists of nine directors. Before an amendment in 2020, our articles of incorporation established three classes of directors with each class elected to successive three-year terms of office. In 2020, we proposed, and our shareholders approved, an amendment to the articles of incorporation whereby all directors would be elected annually following a phase-in period. Therefore, at the Annual Meeting, three Class III Directors will be elected to hold office for a one-year term expiring at the 2022 Annual Meeting of Shareholders or until their successors are elected and qualified. The Board has nominated Bruce L. Caswell, Richard A. Montoni, and Raymond B. Ruddy as Class III Directors. Those nominees presently serve as our Class III directors. In addition, Mr. Haley and Ms. Madsen are standing for election as newly-appointed directors consistent with Virginia law. If elected, Mr. Haley will hold office until 2022 consistent with his appointment to Class I and Ms. Madsen will hold office until 2023 consistent with her appointment to Class II. By 2023, all directors will be elected annually. If you sign and return your proxy card, the persons named as proxies in the proxy card will vote to elect those five nominees unless you mark your proxy card otherwise. You may not vote for a greater number of nominees than five. Each nominee has consented to being named in this proxy statement and to serve if elected. If for any reason a nominee should become unavailable for election prior to the Annual Meeting, the proxy holders may vote for the election of a substitute. We do not presently expect that any of the nominees will be unavailable.
Vote Required for the Election of Directors
The Company’s bylaws provide for majority voting in director elections. The Board of Directors also has adopted a Director Resignation Policy. Under that policy, each director nominee has submitted a written contingent resignation which will become effective only if (i) the director fails to receive the required number of votes for re-election as set forth in the Company’s bylaws and (ii) the Board of Directors accepts the resignation. The affirmative vote of a majority of the total number of votes cast with respect to that director’s election is required to re-elect each nominee to our Board. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the outcome of this matter.
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How We Are Governed
Board’s Role in Risk Oversight
The Board of Directors as a whole oversees the risk management of the Company. Senior members of the Company’s management team regularly report to the Board on operational and financial risks relating to the Company’s projects, and our Corporate Controller regularly reports to the Board about compliance with the Company’s policies and procedures and code of ethics. The Audit Committee oversees management of market and operational risks that could have a financial impact, such as those relating to internal controls and liquidity. The Nominating and Governance Committee manages the risks associated with governance issues, such as the independence and performance of the Board, and the Compensation Committee is responsible for managing the risks relating to the Company’s executive compensation and succession plans and policies. The Technology Committee assists the Board with oversight of the Company’s information technology risks and strategic technology investments and the quality and effectiveness of the Company’s cyber-security policies and practices.
Management regularly reports to the Board or relevant committee on actions the Company is taking to manage the risks identified above. The Board and management periodically review, evaluate, and assess the risks relevant to the Company.
Corporate Governance Guidelines
The Board of Directors has adopted Guidelines for Corporate Governance that set forth the practices of the Board with respect to the function of the Board, management review and responsibility, Board composition, selection of directors, operation of the Board and meetings, committees of the Board, director responsibilities and tenure and evaluation of the Board and committees. The Guidelines are available on our Corporate Governance web page at investor.maximus.com/corporate-governance. A printed copy is available, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190. The information contained on our website is not a part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC.
Director Independence
From time to time, Maximus and its subsidiaries may provide services to, and otherwise conduct business with, companies of which certain members of the Board or members of their immediate families are or were directors or officers. Under our Guidelines for Corporate Governance and NYSE rules, a director is not independent unless the Board affirmatively determines that he or she does not have a direct or indirect material relationship with the Company or any of its subsidiaries. Our Guidelines for Corporate Governance define independence in accordance with the independence definition in the current NYSE corporate governance rules for listed companies.
Our Guidelines for Corporate Governance require the Board to review the independence of all directors at least annually. In the event a director has a relationship with the Company that is relevant to their independence and is not addressed by the objective tests set forth in the NYSE independence definition, the Board will determine, considering all relevant facts and circumstances, whether such relationship is material.
The Board of Directors in its business judgment has determined that the following directors are independent as defined by NYSE listing standards: Anne K. Altman, John J. Haley, Jan D. Madsen, Peter B. Pond, Gayathri Rajan, Raymond B. Ruddy, and Michael J. Warren.
Code of Ethics
We have adopted a code of ethics that applies to all employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. That code, our Standards of Business Conduct and Ethics, can be found posted on our Corporate Governance web page at
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investor.maximus.com/corporate-governance. A printed copy is available, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190. The Board regularly reviews our code of ethics, and any amendment or waiver of our code of ethics required to be disclosed under the Securities Exchange Act of 1934 (the “Exchange Act”) will be reflected on our Corporate Governance web page.
Director Attendance
Our Board expects that its members will prepare for, attend and participate in all Board and applicable committee meetings. Our Board of Directors held nine meetings during fiscal year 2020. During our 2020 fiscal year, all of our directors attended at least 75% of the aggregate Board and applicable committee meetings.
We encourage members of the Board of Directors to attend our annual meetings. In 2020, our annual meeting was held on March 17 just as many jurisdictions were shutting down due to the COVID-19 pandemic. Because of that, only two (2) of our directors were able to attend the 2020 annual meeting.
Executive Sessions
Executive sessions where non-management directors meet on an informal basis are scheduled either at the beginning or at the end of each regularly scheduled Board meeting. Peter B. Pond, the independent, non-executive Chairman of the Board, presides over the executive sessions.
Self-Evaluation
The Nominating and Governance Committee leads the Board in an annual self-evaluation process that assesses the performance of the Board as a whole, the committees of the Board and the individual directors.
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How We Are Organized
Independent Board Chair
Maximus has maintained separate Chief Executive Officer and Chairman of the Board positions since before the Company’s initial public offering in 1997. Peter B. Pond currently serves as our independent, non-executive Chairman of the Board. Under our Guidelines for Corporate Governance, the Board will periodically evaluate the separation of the CEO and Chairman positions in light of the Company’s governance objectives and relevant circumstances. We believe that the separation of those roles at this time is appropriate for us because it is a good corporate governance practice that promotes Board and director independence from the management team.
Committees of the Board
The standing committees of the Board of Directors are the Audit Committee, the Nominating and Governance Committee, the Compensation Committee, and the Technology Committee.
Audit Committee
The Audit Committee assists the Board of Directors in fulfilling its responsibility to oversee management’s conduct of our financial reporting processes and audits of our financial statements. The Audit Committee specifically reviews the financial reports and other financial information provided by the Company, our disclosure controls and procedures and internal accounting and financial controls, the internal audit function, the legal compliance and ethics programs, and the annual independent audit process. The Audit Committee operates under a written charter adopted by the Board. The Audit Committee’s charter, as amended and currently in effect, is available on our Corporate Governance web page at investor.maximus.com/corporate-governance. A printed copy is available, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190.
The members of the Audit Committee are Raymond B. Ruddy (Chair), Jan D. Madsen, Peter B. Pond, and Michael J. Warren, each of whom is independent as defined by applicable NYSE listing standards and SEC regulations governing the qualifications of audit committee members. The Board of Directors has determined that all of the committee members are financially literate as defined by the NYSE listing standards and that Mr. Ruddy qualifies as an audit committee financial expert as defined by regulations of the SEC.
The Audit Committee held four meetings during fiscal year 2020. For additional information regarding the Audit Committee, see “Audit Information — Report of the Audit Committee” below.
Nominating and Governance Committee
The purpose of the Nominating and Governance Committee is to identify, evaluate, and recommend candidates for membership on the Board of Directors, to establish and assure the effectiveness of the governance principles of the Board and the Company and to establish the compensation of our directors. The Nominating and Governance Committee is responsible for assessing the appropriate mix of skills, qualifications and characteristics for the effective functioning of the Board in light of the needs of the Company. The committee considers, at a minimum, the following qualifications in recommending to the Board potential new directors, or the continued service of existing directors:
personal characteristics, such as the highest personal and professional ethics, integrity and values, an inquiring and independent mind, with a respect for the views of others, ability to work well with others and practical wisdom and mature judgment;
broad, policy-making level experience in business, government, academia or science to understand business problems and evaluate and formulate solutions;
experience and expertise that is useful to the Company and complementary to the background and experience of other directors;
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willingness and ability to devote the time necessary to carry out duties and responsibilities of directors and to be an active, objective and constructive participant at meetings of the Board and its committees;
commitment to serve on the Board over a period of several years to develop knowledge about the Company’s principal operations;
willingness to represent the best interests of all shareholders and objectively evaluate management performance; and
diversity.
As described above, diversity is one of several factors that the committee considers in evaluating director nominees. The Nominating and Governance Committee defines “diversity” in this context broadly to include diversity with respect to background, experience, viewpoints, skill, education, national origin, gender, race/ethnicity, age, orientation, culture, and organizations with which the individual may be affiliated.
The Nominating and Governance Committee will consider shareholder recommendations for candidates to serve on the Board of Directors and would evaluate any such candidate in the same manner described above. A shareholder entitled to vote for the election of directors may submit candidates for consideration by the committee if such shareholder gives timely written notice, in proper form, for each such recommended director nominee. If the notice is not timely and in proper form, the nominee will not be considered by the committee. To be timely for the 2022 Annual Meeting of Shareholders, the notice must be received within the time frame set forth in “Shareholder Proposals for Our 2022 Annual Meeting of Shareholders” below. To be in proper form, the notice must include each nominee’s written consent to be named as a nominee and to serve, if elected, and such other information as required under our bylaws. These requirements are more fully described in Article I, Section 6, of our bylaws, a copy of which will be provided, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190.
Under the process we use for selecting new Board candidates, the Chief Executive Officer, the Nominating and Governance Committee, or other Board members identify the need to add a new Board member with specific qualifications or to fill a vacancy on the Board. The Chairman of the Nominating and Governance Committee will initiate a search, working with staff support and seeking input from Board members and senior management, hiring a search firm, if necessary, and considering any candidates recommended by shareholders. A determination is made as to whether Nominating and Governance Committee members or Board members have relationships with preferred candidates and can initiate contacts. The Chief Executive Officer and at least one member of the Nominating and Governance Committee interview prospective candidates. The Nominating and Governance Committee meets to conduct further interviews of prospective candidates, if necessary or appropriate, and to consider and recommend final candidates for approval by the full Board of Directors.
The Nominating and Governance Committee has oversight of the Company’s ESG initiatives. The Committee also oversees and receives reports at least quarterly on (1) compliance with U.S. laws and Company policies pertaining to political contributions, (2) political activities and contributions of the Maximus Political Action Committee, (3) significant lobbying priorities and related expenditures in the U.S. and (4) expenditures relating to the Company's principal U.S. trade associations.
The Nominating and Governance Committee is comprised of Anne K. Altman (Chair), John J. Haley, Jan D. Madsen, Peter B. Pond, and Michael J. Warren, each of whom is independent as defined by applicable NYSE listing standards. The Nominating and Governance Committee operates under a written charter adopted by the Board. The Nominating and Governance Committee’s charter, as amended and currently in effect, is available on our Corporate Governance web page at investor.maximus.com/corporate-governance. A printed copy is available, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190.
The Nominating and Governance Committee met three times during fiscal year 2020, as well as holding a virtual meeting for Board members, focused on ESG education and strategy review.
Compensation Committee
The Compensation Committee is responsible for reviewing, approving, and overseeing the administration of our compensation and benefit programs, evaluating their effectiveness in supporting our overall business objectives and ensuring an appropriate structure and process for management succession. Specifically, the committee is responsible for:
evaluating the performance and setting the compensation of the Chief Executive Officer and other members of senior management;
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reviewing the Company’s compensation policies and practices;
reviewing executive succession plans; and
reviewing our executive development programs, including the performance evaluation process and incentive compensation programs.
The Chief Executive Officer provides the Compensation Committee with the financial and strategic performance accomplishments of the executive management team and recommends raises, bonuses and long-term equity awards for those executives (excluding himself). To assist in its efforts to meet the objectives outlined above, the Compensation Committee retained an independent consulting firm to advise it on executive compensation programs.
The Compensation Committee operates under a written charter adopted by the Board. The Compensation Committee’s charter, as amended and currently in effect, is available on our Corporate Governance web page at investor.maximus.com/corporate-governance. A printed copy is available, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190.
The members of the Compensation Committee are Peter B. Pond (Chair), Anne K. Altman, John J. Haley, Raymond B. Ruddy, and Michael J. Warren, each of whom is independent as defined by applicable NYSE listing standards governing the qualifications of compensation committee members.
The Compensation Committee held six meetings during fiscal year 2020. For additional information regarding the committee, see “Compensation Committee Report” below.
Technology Committee
The Technology Committee assists the Board of Directors in fulfilling its responsibility to oversee the Company's strategic information technology investments and its risk management efforts pertaining to cybersecurity. The Technology Committee meets regularly with our Chief Information Officer and our Chief Information Security Officer.
The Technology Committee operates under a written charter adopted by the Board. The Technology Committee’s charter, as amended and currently in effect, is available on our Corporate Governance web page at investor.maximus.com/corporate-governance. A printed copy is available, without charge, to any shareholder upon written request to the Secretary of the Company, whose address is Maximus, 1891 Metro Center Drive, Reston, Virginia 20190.
The members of the Technology Committee are Anne K. Altman (Chair), John J. Haley, Richard A. Montoni, Gayathri Rajan, Raymond B. Ruddy, and Michael J. Warren. The Technology Committee met four times during fiscal year 2020.
Engaging with Shareholders
Maximus is committed to engaging directly with our shareholders to understand their views on governance matters.
Maximus, including members of our Board of Directors as appropriate, regularly meets with major shareholders on a wide range of topics including strategy, capital allocation, corporate governance, and executive compensation. In addition, the full Board receives and reviews reports on investor feedback and emerging governance issues, allowing our directors to better understand shareholder priorities and perspectives.
We actively consider shareholder feedback and, as warranted, take action. We de-classified our Board of Directors and implemented anti-hedging and anti-pledging policies in light of shareholder input on these matters. Additionally, based on shareholder feedback, we have enhanced our proxy disclosure to include the Board Skills Matrix above.
We continue to work to further integrate ESG disclosures into our publicly available material and remain aligned with a variety of frameworks important to our shareholders.
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How We Are Paid —
Director Compensation
Director Compensation Table
The table below summarizes the compensation paid to our non-employee directors in fiscal year 2020.

Director Compensation Fiscal Year 2020

Name

Fees Earned or Paid in Cash ($)

Stock Awards ($)(1)

Total ($)
Anne K. Altman(2)
160,000
149,982
309,982
Russel A. Beliveau*
0
0
0
John J. Haley(3)
0
300,013
300,013
Paul R. Lederer*
0
0
0
Jan D. Madsen(4)
20,000
279,986
299,986
Richard A. Montoni(5)
335,000
0
335,000
Peter B. Pond(6)
465,000
0
465,000
Gayathri Rajan(7)
250,000
49,994
299,994
Raymond B. Ruddy(8)
355,000
0
355,000
Michael J. Warren(9)
50,000
250,019
300,019
(1)
The amounts in this column reflect the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of RSU awards made on March 17, 2020 under our 2017 Equity Incentive Plan. For each of the RSU awards, the grant date fair value is calculated using the closing price of our common stock on the grant date as if these awards were vested and issued on the grant date. The amounts shown disregard estimated forfeitures.
(2)
As of September 30, 2020, Ms. Altman held 3,056 RSUs.
(3)
As of September 30, 2020, Mr. Haley held 6,113 RSUs.
(4)
As of September 30, 2020, Ms. Madsen held 5,705 RSUs.
(5)
As of September 30, 2020, Mr. Montoni held 39,037 RSUs.
(6)
As of September 30, 2020, Mr. Pond held 248,983 RSUs.
(7)
As of September 30, 2020, Ms. Rajan held 1,019 RSUs.
(8)
As of September 30, 2020, Mr. Ruddy held 192,022 RSUs.
(9)
As of September 30, 2020, Mr. Warren held 5,094 RSUs.
* Mr. Beliveau and Mr. Lederer did not stand for re-election at the March 2020 annual meeting and did not receive compensation as a director for fiscal year 2020.
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Fees Payable to Non-Employee Directors
The director compensation for fiscal year 2020 as shown in the chart above was comprised of the following elements. Directors who are also Maximus employees do not receive additional compensation for their services as directors.
An annual retainer of $300,000 payable in restricted stock units (“RSUs”) or cash.
Ms. Altman received an additional $10,000 retainer for her services as the Chair of the Nominating and Governance Committee.
Mr. Pond received an additional $150,000 retainer for his services as Chairman of the Board and a $15,000 retainer for his services as the Chair of the Compensation Committee.
Mr. Ruddy received a $20,000 retainer for his services as Chair of the Audit Committee and an additional $35,000 retainer, which is a continuation of the additional retainer he previously received for his services as Vice-Chairman of the Board, which reflects the continuation of his leadership role on the Board and recognizes the additional time that he continues to spend on Company matters over and above his normal director duties in his current unofficial leadership capacity.
RSU awards granted to our non-employee directors vest after one year; directors may elect to defer receipt of shares for their RSUs for a longer period up to termination of service on the Board of Directors.
We also permit our directors to participate in the health plan that we offer to our employees, although each director who elects to participate must pay the full cost of his or her own premiums in the plan. During fiscal year 2020, Mr. Pond participated in those plans, and Mr. Ruddy participated in the dental plan.
Director Equity Ownership Requirements
Directors are required to hold equity in the Company equal to at least one and a half times their annual retainer. For these purposes, “equity” consists of shares owned directly by the director, the “in-the-money” value of vested stock options and any shares that would have been distributed to the director but for the director’s election to defer receipt of the shares for tax purposes. All of our directors met the ownership requirement as of the end of fiscal year 2020 with the exception of Ms. Madsen who joined the Board in March 2020.
How To Communicate with Us
Communications with Directors
Our Board of Directors values input from a wide array of sources to inform its deliberations and decision-making. Since shareholders have a financial stake in the success of the Company and represent independent sources of information, the Board especially values shareholder questions and insights. The Board has therefore created a number of ways to obtain shareholder input including via participation at the annual meeting, use of the Company’s various reporting mechanisms including its hotline and audit functions, requests for individual director engagements, and use of the official communications mechanism described here.
Shareholders and other interested parties wishing to communicate with the Board of Directors, the non-employee directors, or any individual director (including any committee chair) may do so by sending a communication to the Board of Directors and/or a particular member of the Board of Directors, care of the Company Secretary at Maximus, 1891 Metro Center Drive, Reston, Virginia 20190. Depending upon the nature of the communication and to whom it is directed, the Company Secretary will: (a) forward the communication to the appropriate director or directors; (b) forward the communication to the relevant department within the Company; or (c) attempt to handle the matter directly (for example, a communication dealing with a share ownership matter).
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Our Company
Now that we have shared information about our Board of Directors with you, here is additional information about our Company. In this section, we provide information on:
Who We Are — Our Leadership
Who We Are — All of Us
How we value and support our human capital
Recruiting
Education and Training
Benefits and Rewards
How We Support Our Communities
How We Protect the Planet
How We Use Compliance and Control Functions to Protect our Company
How We Performed in 2020
How We are Looking Forward
Who We Are — Leadership
Our executive officers and their respective ages and positions as of the date of this proxy statement are as follows:
Name
Age
Position
Bruce L. Caswell
55
Chief Executive Officer, President and Director
Richard J. Nadeau
66
Chief Financial Officer and Treasurer
Ilene R. Baylinson
64
General Manager, U.S. Services
Thomas D. Romeo
65
General Manager, U.S. Federal Services
Michelle F. Link
46
Chief Human Resources Officer
David R. Francis
59
General Counsel and Secretary
The following information sets forth biographical information for the executive officers for the past five years. Such information with respect to Bruce L. Caswell, the Company's Chief Executive Officer and President, is set forth above in the “Proposal 1 — Election of Directors” section.
Richard J. Nadeau joined Maximus in June 2014 as Chief Financial Officer and Treasurer. From 2009 to 2014 he served as Executive Vice President and Chief Financial Officer of SRA International, Inc. Previously he served as Chief Financial Officer for Sunrise Senior Living, Inc., The Mills Corporation, and Colt Defense LLC. Before that Mr. Nadeau was a partner at KPMG LLP and at Arthur Andersen LLP.
Ilene R. Baylinson has served as the General Manager of our U.S. Services Segment since 2020. She previously served as the General Manager of the U.S. Health Segment since 2015. Ms. Baylinson joined Maximus in 1991.
Thomas D. Romeo has served as our General Manager, U.S. Federal Services Segment since 2015. He joined Maximus in 2011 as the President of Maximus Federal Services. Prior to joining Maximus, Mr. Romeo was a Senior Partner for Accenture Federal. Prior to joining Accenture, Mr. Romeo was at IBM for 25 years ending as a Vice President responsible for IBM Global Services Federal Civilian portfolio.
Michelle F. Link joined Maximus in March 2020 as Chief Human Resources Officer. From 2018 to 2020 she served as the Executive Vice President of Human Resources for ADS, Inc. Before that she served as Chief Human Resources Officer for PRA Group from 2011 to 2018. She has also held senior Human Resources roles at BlueCross Blue Shield of Tennessee, AMERIGROUP, CIGNA, and Corning.
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David R. Francis has served as our General Counsel and Secretary since 1998. He has over 30 years of legal experience having previously served in both law firm and in-house attorney positions.
In addition to the executive officers named above, Maximus is managed by a dedicated, talented, and diverse leadership team. Please visit our website at maximus.com/leadership for the biographies of the other members of our management team. Content on our website is not, and shall not be deemed to be, part of this proxy statement or incorporated herein or into any of our other filings with the SEC.
Who We Are — All of Us
While we are required to provide you detailed information about our most senior executives, we are a company of approximately 34,000 dedicated staff. We are proud of each employee’s commitment to deliver the proven technology, efficient solutions, and personalized services on which our customers depend so that we can improve the lives of individuals and families in the markets we serve. Therefore, we want to share with you information demonstrating our pledge to human resources.
Recruiting. Our recruiting teams are essential players to our mission of Helping Government Serve the People.® As a strategic partner, they support the varying project and corporate hiring needs by tapping into top diverse talent globally. We believe our culture values individual skills, experiences, and differences that allow Maximus to deliver robust and innovative approaches to solving some of our communities' most challenging needs. Our recruiting programs focus on identifying and evaluating talent through practices that welcome a diverse workforce, including people with disabilities, language barriers, and those from varying socioeconomic backgrounds.
During fiscal year 2020, we hired over 38,000 employees across the globe. In the U.S., we have successfully sourced and employed more than 2,100 persons with disabilities, and over 71% of total U.S. hires were female. We continue to refine our focus on recruiting people of color and military veterans at all levels of the organization to reflect the populations we serve.
Education and Training. We value ongoing development and continuous learning and strive to support and provide learning opportunities to all Maximus employees. The Maximus Center for Employee Development (“CED”) supports enterprise-wide professional development by offering a variety of instructor-led and self-paced learning programs ranging in audience from individual contributors to frontline supervisors and executive leadership. Additionally, our project training teams manage customized programs in support of contract requirements, customer service, local leadership development, and employee engagement.
The CED focuses on enhancing:
Core Business Acumen: Time management, professionalism, problem solving, business writing, presentations, communications, desktop technology, and Maximus systems
People Management and Leadership Development: Supervisory skills, performance management, teamwork, coaching and mentoring, and leadership
Client Management and Business Development: Customer service, client relationship management, consulting skills, sales and marketing, and proposal writing
Project Management: Scope, contracts, financials, quality, risk, and communications management
The CED leverages the following tools to engage our employees:
Maximus University: The Company’s internal development site where employees can:

Access training tools and systems

Register for upcoming courses

View past training recordings

Explore working from home resources
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Workday Learning (U.S. only): The Company’s web-based learning enablement system through which employees can:

Register and take self-paced training

View training history

Complete onboarding tasks and compliance training

Complete annual compliance training
Similar systems are available to our global employees.
Workday Performance (U.S. only): The Company’s web-based performance system where employees can set and maintain business goals
Percipio (Global): An online learning tool providing more than 13,195 online learning resources to our global exempt and professional employees
The training hours below reflect all CED/corporate programs, and virtual training content provided by corporate including CED trainings and webinars, corporately sponsored project management development, leadership development and IT programs, and curated Percipio content. Estimated on-boarding time was calculated across Maximus. The hours do not include time spent in on-the-job training, time spent with mentors, project specific development, project leadership development, and/or required project compliance.
2020 Employee Development Highlights
TRAINING HOURS
Compliance (Global)
New Hires
      
103,724
Annual Compliance Refresher:
60,819
Outside of the U.S.
19,299
Total Number of Compliance Training Hours: 183,842
New Hire Orientation (U.S. only)
New Hire Orientation:
1,036,840*
(*calculated based off average of 40 hours for new hire orientation x 25,921 new hires in FY2020)
Total Number of New Hire Orientation (U.S. only) Training Hours: 1,036,840
Ongoing Development (Global)
Self-Directed Learning:
116,773
Attendee Hours (CED attendee hours only):
12,888
Total Number of Ongoing Development Training Hours: 129,661
Total Number of Training Hours: 1,350,589
EMPLOYEES TRAINED
Compliance (Global)
New Hires:
25,921
Annual Compliance Refresher:
20,273
Outside of the U.S.
6,433
Total Number of Employees Trained (Compliance): 52,627
Ongoing Development* (Global)
*Employees engaged in elective training
Self-Directed:
14,106
Instructor-Led (CED sessions only):
8,888
Total Number of Employees Trained (Ongoing Development): 22,994
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Employee Benefits and Rewards. Maximus remains committed to the health and financial wellness of our employees. We know that our benefits program is an important part of the total compensation package that helps us attract and retain a talented group of team members. Our benefits program is focused on:
Providing core benefits that help bring employees peace of mind and financial stability should the unexpected occur, with some of those benefits covered at 100% by Maximus;
Partnering with benefit carriers that provide strong networks of physicians to provide employees and their family with the best available care;
Offering a competitive, yet affordable package that provides comprehensive coverage.
Specifically, Maximus offers:
401(k) Retirement Plan with 50% company match up to the first 6% contributed;
Account based medical coverage, either and HRA or HSA;
Prescription drug coverage, which includes free generic drugs for chronic conditions;
Dental and vision insurance;
Flexible Spending Account (“FSA”) for eligible healthcare and dependent care expenses;
Short and Long Term Disability Insurance;
Life Insurance/Accidental Death and Dismemberment Insurance;
Nationwide childcare discounts;
Legal Services;
Employee Assistance Program;
Paid time off;
Project bonuses for employee accomplishments above and beyond expectations; and
Project manager awards for employees who demonstrate an unparalleled commitment to our clients.
How We Serve As A Good Corporate Citizen
Maximus Foundation and Corporate Philanthropy
We recognize the importance of giving back to the communities in which we live and work. Funded by our employees and the Company, the Maximus Foundation is an employee-led nonprofit organization, supporting programs that promote personal growth and self-sufficiency through improved health, augmented child and family development, and community development. We provided financial support to 131 organizations across 30 states and the District of Columbia in the U.S. in 2020 through the Foundation's grant program. Prospective nonprofit organizations are nominated by an eligible Maximus employee, and our employee donors vote upon grant recipients on an annual basis. Our international arms, Maximus Foundation UK and Max Foundation, in Australia, also provided vital financial grants to community partners in their geographic location, making significant impact in many of our communities. Maximus matches contributions made to our Foundations by employees, dollar-for-dollar.
Maximus and our employees donated more than $156,000 to support social justice and equity across the U.S. in partnership with the NAACP Legal Defense Fund. We were moved by the outpouring support from employees across our Company, participating in our matching campaign and tripling the impact of every dollar they donated. We are proud to belong to a community that takes collective action and invests in its vision of inclusivity, using our privilege to empower Black and Brown voices during this era-defining moment.
The Company also showed our support in combatting the pandemic through philanthropic donations to the CDC Foundation.
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Government Relations
The Nominating and Governance Committee of the Maximus Board of Directors has formal oversight of the Company’s policies pertaining to political contributions and compliance with all U.S. laws and regulations, political activities including contributions from the employee-funded Maximus Political Action Committee, significant lobbying priorities and expenditures, and expenditures related to principal trade organizations.
Considering recent events, Maximus management, in consultation with the Nominating and Governance Committee, remains committed to our fundamental principle of our engagement in the political process which is, and will continue, to never support or fund candidates or elected officials who encourage or support violence against the government of the United States.
Supply Chain
We are also committed to treat our supply chain fairly. For instance, across our UK business, we adhere to the Prompt Payment Code, and other supply chain accreditations such as the Merlin Standard.
How We Support Diversity, Equity, and Inclusion
DE&I are an important part of who we are as a company and broadly outlines the comprehensive efforts we are taking to create a more inclusive workplace. To further this effort, in fiscal year 2020, Maximus hired Dr. Arvenita W. Cherry to lead the Company’s DE&I program, where she will proactively develop and lead the vision, mission, and strategic planning for the program.
Dr. Cherry brings an extensive background in socio-cultural and educational anthropology and expertise in DE&I related to race, gender, class, and social justice. Before joining Maximus, Dr. Cherry had an extensive consulting career and taught at the university level where she published, trained, and designed programs related to these topics. Additionally, she has designed and taught courses on race, racism, race relations, gender, the African Diaspora, and research methods.
In her role, Dr. Cherry will focus on furthering the Company’s efforts in DE&I by identifying opportunities to make improvements, which could range from hiring practices to company culture. She will also actively engage with employees and management in order to capture their sentiments about the Company’s culture, while also working with local leaders and community organizations that seek to bring attention to social justice, human rights, civil rights, equity, and inclusion. As part of this strategy, our DE&I learning resources channel provides a growing number of resources for employees to assist them in working towards contributing to a workplace that values DE&I. Additionally, we launched two DE&I standing committees. The DE&I Steering Committee, comprised of leaders at Maximus, acts as a “think tank” for what DE&I activities will occur at the Company. The DE&I Design Committee is a working group of a variety of Maximus employees that previews, gives input, and tests DE&I interventions before they are implemented at Maximus.
Maximus businesses were recognized for their efforts in supporting people with disabilities and long-term health conditions. Maximus UK entities were among the first to be awarded Disability Confident Leader status by the UK Government. We were the first employment service provider to achieve nationally recognized Disability Confident Recruiter status by the Australian Network on Disability. We were also recognized by the Virginia Department of Aging and Rehabilitation Services as a Champion of Disability Employer.
Additionally, Military Times Best for Vets: Employers 2020 ranked Maximus as a top employer nationwide in the U.S. for veterans. In particular, Maximus was cited for having especially high scores by Military Times due to its excellent retention support programs, as well as our recruitment and employment practices. Maximus UK signed the Armed Forces Covenant, pledging to support those who serve or who have served in the armed forces, and their families. The Company supports all military-connected employees regardless of whether they have served themselves, at home or abroad, are a military spouse, or have any other military connection. Highlights include:
Retention support for all military connected employees and benefits and programming designed specifically for active Guard and Reserve employees
Partnering with the Posse Foundation’s Veterans Program to provide professional development workshops and orientation support for post-9/11 veterans pursuing bachelor’s degrees at colleges and universities across the country
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Promoting the hiring of veterans through targeted sourcing strategies and outreach to veteran service organizations to increase the pool of qualified military-related applicants
Veterans recognition month every November and spotlights of our military and veteran employees
Military Spouse Employment Partnership participation in hiring events, quarterly partner meetings, and employer roundtables
How We Protect Our Planet
As a company that primarily provides business process outsourcing (“BPO”) services to local, state, federal, and international government, Maximus has a relatively small environmental footprint and limited exposure to some of the main environmental concerns with which other companies grapple. We do, however, remain committed to ensuring responsible environmental practices in each of our communities and take advantage of opportunities we have to run our operations more efficiently.
Maximus offices around the country have implemented several “green initiatives” to reduce the environmental impact on our planet. We support:
Eliminating paper waste through innovative solutions. We work hand-in-hand with our government clients to recommend ways to reduce paper consumption; this can often be a more cost-effective way to achieve business goals. For example:
Replacing traditional paper services with electronic services
Developing intranet sites to post program information and reports using electronic “fast alerts” to keep staff abreast of important information
Encouraging clients to authorize telephone and web program enrollments as opposed to using and mailing paper enrollments, resulting in a reduced reliance on printed collateral materials and paper products
Enabling community-based organizations to implement efficient business practices by providing technology and technical assistance to submit program enrollments electronically
Reducing, reusing and recycling office waste wherever possible. For example:
Installing safe and efficient water filtration systems to replace bottled water coolers
Using recycled paper for mailings and promotional materials
Conserving energy to reduce carbon emissions. For example:
Implementing staggered climate control daily start-up times and building temperature standards for summer cooling and winter heating
Installing sun film on sun-exposed windows to reduce glare and hot spots within our facility to lower electricity usage from climate control systems
Piloting our LED light installation program across 13 sites in the U.S. during fiscal year 2020 which is projected to provide more than $1 million and 5.5 million kWh in savings per year.
How We Use Compliance and Control Functions to Protect Our Company
We believe that to operate sustainably we also need compliance and corporate control provisions designed to:
ensure the integrity of our operations and financial reporting as a global business with multiple foreign operations;
prevent, manage and mitigate enterprise-wide risk;
provide for independent review and assurance of our operations with early identification of contractual or operational performance issues;
promote the safety, security and integrity of our technology and services; and
safeguard the value of the Maximus brand through the consistent delivery of quality services that lead to long-term client relationships.
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We have a comprehensive compliance and ethics program that provides:
a formal structure for overseeing compliance;
written standards and policies;
regular training and education to promote compliance;
effective, retaliation-free lines of communication for reporting suspected violations;
mandatory data and privacy security training on an annual basis supplemented by internal testing throughout the year to ensure employees understand the appropriate processes;
information security controls frameworks, such as HIPAA, NIST SP800-53, CMS MARS-E, IRS 1075, ISO27001, and more that define how we ensure confidentiality, integrity, and the availability of information that can be measured;
internal monitoring and auditing;
response and corrective action plans; and
well-publicized disciplinary guidelines.
More information can be found in our Standards for Business Conduct and Ethics available on our website.
How We Performed in Fiscal Year 2020
Despite challenges faced in light of the COVID-19 global pandemic, the Company achieved solid performance in fiscal year 2020 as measured by important financial and operational metrics, including:
Our revenue increased to $3.46 billion compared to $2.89 billion reported for fiscal year 2019, driven primarily by the Census contract in the U.S. Federal Services Segment and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic.
We reported operating profit margin of 8.3% and diluted earnings per share of $3.39.
We had cash flows from operations of approximately $245 million and free cash flow1 of approximately $204 million
We held cash and cash equivalents of approximately $72 million and had no outstanding borrowings on our corporate credit facility at September 30, 2020.
We increased our quarterly dividend to $0.28 per share of Maximus common stock compared to $0.25 per share in the prior year
We performed new services to assist government clients in the U.S. in their COVID-19 response efforts. Our revenue on these contracts, which excludes the extension of planned work related to the Census Questionnaire Assistance (“Census”) contract, was approximately $200 million and was earned in the second half of the fiscal year.
We continued our work on the Census contract in support of the U.S. decennial census. Our revenue on this contract was $515 million, compared to $185 million in the prior year.
Stock Performance Graph
The following graph compares the cumulative total shareholder return on our common stock for the five-year period from September 30, 2015, to September 30, 2020, with the cumulative total return for the NYSE Stock Market (U.S. Companies) and S&P Midcap 400 Indices. In addition, we have compared the results of a peer group to our performance. This peer group is that defined within Item 5 of our Annual Report on Form 10-K for the year ended September 30, 2020, filed with the SEC on November 19, 2020. This graph assumes the investment of $100 on September 30, 2015, in our common stock, the NYSE Stock Market (U.S. Companies) and S&P Midcap 400 Indices, and our peer group, weighted by market capitalization and assumes dividends are reinvested.
1
"Free cash flow" is a non-GAAP term. A description of how we calculate free cash flow, as well as a summary of our use of non-GAAP numbers, may be found in Item 7 of our Annual Report on Form 10-K for the year ended September 30, 2020, and filed with the SEC on November 19, 2020.
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Notes:
A.
The lines represent index levels derived from compounded daily returns that include all dividends.
B.
The indexes are reweighted daily, using the market capitalization on the previous trading day.
C.
If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D.
The index level for all series was set to $100.00 on September 30, 2015.
How We Are Looking Forward
The Maximus culture and the commitment our employees have to the mission of our customers and the lives of the citizens we serve each day will remain a critical factor in our success. As we look forward, we see the clinical evolution of our business as well as the continued digital transformation of government services driving our growth opportunities.
We continue to believe there will be long-term demand for business process services with a clinical dimension. We see this in the demand for our growing appeals and assessments business where our healthcare professionals help determine eligibility for healthcare and related services. In support of our strategic expansion into clinical BPO services delivered at scale, we formed Maximus Public Health (“MPH”) to provide meaningful support to governments as they respond to COVID-19 and other public health threats. Initially, MPH is supporting efforts to contain the spread of COVID-19 and toward the purchasing, distribution, citizen engagement, and administration of vaccines. Ultimately MPH will focus on collaborations to support preparedness and effective response to future healthcare needs and crises. These macro trends underpin demand for BPO services with more of a clinical dimension. By employing our strength in clinical assessment, case management, and consumer engagement, we are a natural partner to governments as they address issues ranging from long-term services program eligibility to disability benefit determinations to the social determinants of health outcomes. Both our skilled workforce and demonstrated ability to provide clinical services at scale become important differentiators as we pursue new opportunities that address wider demographic challenges.
Earlier in our digital transformation journey, we disrupted traditional models and developed tools to meet citizens where they are, through mobile applications, robust portals, and omnichannel communications that seamlessly integrate chat and text messaging with conventional voice channels. Internally, we have applied robotic process automation at scale to achieve additional operational and cost efficiencies. With these accomplishments as our foundation, and our customers coming to expect digital capabilities tightly integrated with our BPO solutions, now is the time for us to move to our next phase. We will
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continue maturing our digital delivery capabilities, and driving further automation into routine citizen transactions, while taking the next steps to build on the potential that our movement to the cloud has created in areas like natural language processing, augmented intelligence, and cognitive computing. Our COVID-19 digital response is an early indicator of those efforts. Our clients value our ability to leverage these types of digital capabilities that create more efficiencies and improve quality and service delivery.
We continue to see evidence that the long-term macro trends remain in our favor as governments are challenged with finding a responsive and cost-effective way to manage aging populations, individuals with more complex healthcare needs, barriers to sustainable employment, and to address population and public health imperatives as well as rising caseloads within budget constraints. Maximus has a proven track record of growth, a dedicated team of seasoned operators, and a portfolio of contracts that generates meaningful cash flow. We have earned a reputation as a trusted long-term partner delivering outcomes that matter, strengthened even further through our collaboration to best serve our clients through the COIVD-19 global pandemic. These programs will be essential as governments aim to get their economies back on track as we emerge from this global pandemic. Therefore, together with our government partners at the state, federal, and local levels, Maximus continues to work hard every day to provide cost effective services that transform the lives of people around the world, particularly during these extraordinary times. We are keenly focused on providing services that are flexible, scalable, and efficient for our government partners, but we never lose sight of the citizens we serve.
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Executive Summary of Proposal and Selected Plan Information
Introduction:
On December 15, 2020, upon recommendation of the Compensation Committee, the Board approved the Maximus, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”), subject to shareholder approval at the 2021 Annual Meeting. The 2021 Plan will supersede the Company’s 2017 Equity Incentive Plan (the “2017 Plan”), which is the only plan under which equity-based compensation may currently be awarded to our employees, non-employee directors and consultants. Equity awards are also currently outstanding under the Company’s 2011 Equity Incentive Plan (together with the 2017 Plan, the “Prior Plans”). Prior Plan awards that are currently outstanding will remain outstanding under the applicable Prior Plan in accordance with their terms.
We believe that the adoption of the 2021 Plan is necessary in order to allow the Company to continue to use equity awards, including performance awards. We believe that granting equity-based compensation to eligible officers, employees, non-employee directors and, when appropriate, consultants, is an effective means to promote the future growth and development of the Company. Equity awards, among other things, further align the interests of award recipients with Company shareholders and enable the Company to attract and retain qualified personnel.
If the 2021 Plan is approved by our shareholders, the 2021 Plan will become effective on March 16, 2021 (the “Effective Date”), and no further awards will be made under the 2017 Plan. If our shareholders do not approve the 2021 Plan, the 2017 Plan will remain in effect in its current form, subject to its expiration date. However, there will be insufficient shares available under the 2017 Plan to make annual awards and to provide grants to new hires in the coming years. In this event, the Compensation Committee would be required to revise its compensation philosophy and formulate other cash-based programs to attract, retain, and compensate eligible officers, employees, non-employee directors and consultants.
Proposed Share Reserve:
The number of shares that may be issued to participants under the 2021 Plan shall not exceed 3,100,000 shares, plus any shares that are available for grant under the 2017 Plan as of the Effective Date.
If (i) any shares subject to an award are forfeited, an award expires or otherwise does not result in the issuance of all or a portion of the shares subject to such award, or an award is settled for cash (in whole or in part), or (ii) after the Effective Date any shares subject to an award under any Prior Plan are forfeited, an award under any Prior Plan expires or otherwise does not result in the issuance of all or a portion of the shares subject to such award, or is settled for cash (in whole or in part), then in each such case the shares subject to such award shall, to the extent of such forfeiture, expiration, non-issuance or cash settlement, be added to the 2021 Plan’s reserve. In the event that withholding tax liabilities arising from a full-value award or, after the Effective Date, arising from a full-value award under any Prior Plan, are satisfied by the tendering of shares (either actually or by attestation) or by the withholding of shares by the Company, the shares so tendered or withheld shall be added to the 2021 Plan’s reserve.
Impact on Dilution and Fully-Diluted Overhang:
Our Board recognizes the impact of dilution on our shareholders and has evaluated this share request carefully in the context of the need to motivate, retain and ensure that our leadership team and key employees are focused on our strategic priorities. If the 2021 Plan had been approved on September 30, 2020, the total fully-diluted overhang as of that date, would have been 6.5%. In this context, fully-diluted overhang is calculated as the sum of grants outstanding under Prior Plans plus the proposed share reserve under the 2021 Plan (numerator) divided by the sum of the numerator and basic common shares outstanding, with all data effective as of September 30, 2020. Our Board believes that the proposed share reserve represents a reasonable amount of potential equity dilution to accommodate our long-term strategic and growth priorities.
Expected Duration of the Share Reserve:
We expect that the share reserve under the 2021 Plan, if this proposal is approved by our shareholders, will be sufficient for awards for the term of the 2021 Plan. Expectations regarding future share usage could be impacted by a number of factors such as award type mix; hiring and promotion activity at the executive level; the rate at which shares are returned to the 2021 Plan's reserve under permitted addbacks; the future performance of our stock price; the consequences of acquiring other companies; and other factors. While we believe that the assumptions we used are reasonable, future share usage may differ from current expectations.
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Executive Summary of Proposal and Selected Plan Information
Governance Highlights:
The 2021 Plan incorporates numerous governance best practices, including:
Dividends and dividend equivalent rights will be subject to the same vesting requirements as the underlying award and will only be paid at the time those vesting requirements are satisfied.
Minimum 100% fair market value exercise price for options and Stock Appreciation Rights (“SARs”).
No repricing of options or SARs and no cash buyout of underwater options and SARs without shareholder approval, except for equitable adjustments in connection with a change in control (“CIC”).
No “liberal” CIC definition or automatic “single-trigger” CIC vesting.
No “evergreen” share increases or automatic “reload” awards.
No “liberal share recycling” of options or stock appreciation rights (“SARs”).
Plan Term:
The 2021 Plan will terminate on March 16, 2031 (i.e., the tenth anniversary of the Effective Date), unless terminated earlier by the Board. Termination of the 2021 Plan shall not affect the terms or conditions of any award granted under the 2021 Plan prior to termination.
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Summary of Key Stock Plan Data
Share Usage
The following table sets forth information regarding stock-settled, time-vested equity awards granted, and performance-based equity awards earned, over each of the last three fiscal years (there were no performance-based equity awards earned during this period):
 
2020
2019
2018
3-Year
Average
Stock Options/ SARs Granted
0
0
0
Stock-Settled Full-Value Shares/Units Granted
382,795
382,706
365,071
Weighted-Average Basic Common Shares Outstanding at year end
63,062,000
64,498,000
65,501,000
Share Usage Rate
0.61%
0.59%
0.56%
0.59%
Overhang as of September 30, 2020
The following table sets forth certain information as of September 30, 2020, unless otherwise noted, with respect to the Company’s equity compensation plans:
Stock Options/SARs Outstanding
0
Weighted-Average Exercise Price of Outstanding Stock Options/SARs
N/A
Weighted-Average Remaining Term of Outstanding Stock Options/SARS
N/A
Total Stock-Settled Full-Value Awards Outstanding
642,411
Remaining shares available for grant under the 2017 Plan as of September 30, 2020*
520,364
Proposed share reserve under the 2021 Plan**
3,100,000
Basic common shares outstanding as of the record date (January 15, 2021)
61,452,520
*
For reference purposes, the remaining shares available for grant under the 2017 Plan is specified as of fiscal year end.
**
The proposed share reserve will be increased by the number of shares (if any) that remain available for grant under the 2017 Plan as of the Effective Date of the 2021 Plan. Upon shareholder approval of the 2021 Plan, no further awards will be made under the 2017 Plan.
Further information about overhang as of September 30, 2020 can be found in the Company’s Annual Report on Form 10-K.
As of January 15th, 2021, the per-share closing price of our common stock as reported on the New York Stock Exchange was $76.30.
Description of the 2021 Plan
The following summary of the material features of the 2021 Plan is qualified in its entirety by reference to the complete text of the 2021 Plan, which is appended hereto as Annex A.
Administration
The 2021 Plan will be administered by the Compensation Committee. The Compensation Committee may delegate various functions to a subcommittee or to certain officers of the Company to the extent such delegation is not inconsistent with applicable law or stock exchange rule. The Compensation Committee has the authority to select eligible persons to receive awards and determine the terms and conditions of each award. All determinations and decisions made by the Compensation Committee pursuant to the provisions of the 2021 Plan will be final, conclusive and binding on all persons, including, without limitation, the Company, its Board of Directors, its shareholders, all affiliates, employees, participants, and their estates and beneficiaries.
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Eligibility
Participants in the 2021 Plan will consist of such employees, non-employee directors and consultants, of the Company and its subsidiaries as selected by the Compensation Committee. As of January 15th, 2021, approximately 32,000 employees (including officers), 10 non-employee directors and 1,500 consultants were eligible to participate in the 2021 Plan.
Shares Available under the 2021 Plan
Subject to the equitable adjustment provisions of the Plan and the permitted addbacks described below, the maximum number of shares that may be issued or transferred to participants under the 2021 Plan shall not exceed 3,100,000 Shares, plus any shares that are available for grant under the 2017 Plan as of the Effective Date.
If (i) any shares subject to an award are forfeited, an award expires or otherwise does not result in the issuance of all or a portion of the shares subject to such award, or an award is settled for cash (in whole or in part), or (ii) after the Effective Date any shares subject to an award under any Prior Plan are forfeited, an award under any Prior Plan expires or otherwise does not result in the issuance of all or a portion of the shares subject to such award, or is settled for cash (in whole or in part), then in each such case the shares subject to such award shall, to the extent of such forfeiture, expiration, non-issuance or cash settlement, be added to the 2021 Plan’s reserve. In the event that withholding tax liabilities arising from a full-value award or, after the Effective Date, arising from a full-value award under any Prior Plan are satisfied by the tendering of shares (either actually or by attestation) or by the withholding of shares by the Company, the shares so tendered or withheld shall be added to the 2021 Plan’s reserve.
Notwithstanding anything to the contrary, the following shares will not again be available for awards under the Plan: (a) shares tendered by the participant or withheld by the Company in payment of the purchase price of an option under the 2021 Plan or a Prior Plan, (b) shares tendered to or withheld by the Company to pay the withholding taxes relating to an outstanding option or stock appreciation right under the 2021 Plan or a Prior Plan, (c) shares subject to a stock appreciation right under the 2021 Plan or a Prior Plan that are not issued in connection with its stock settlement or exercise, or (d) shares repurchased by the Company on the open market with the proceeds of the exercise of an option under the 2021 Plan or a Prior Plan.
No more than 3,100,000 shares of common stock may be issued in the aggregate in respect of incentive stock options under the Plan.
Non-Employee Director Limit
The maximum number of shares subject to awards granted during a single fiscal year to any non-employee director, taken together with any cash fees paid during the fiscal year to the non-employee director in respect of such director’s service as a member of the Board during such year (including service as a member or chair of any committees of the Board), shall not exceed $500,000 in total value (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes). The independent members of the Board may make exceptions to this limit for a non-executive chair of the Board, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.
Dividends; Dividend Equivalents
Dividends or dividend equivalents will not be paid with respect to options or stock appreciation rights under the 2021 Plan. Further, notwithstanding anything to the contrary, with respect to full-value awards, if such award provides for a right to dividends or dividend equivalents, any dividends or dividend rights will be subject to the same vesting requirements as the underlying award and will only be paid at the time those vesting requirements are satisfied.
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Types of Awards
The Compensation Committee may grant nonqualified and incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted units, RSUs, performance shares, performance units, performance awards, substitute awards, or other types of equity-based or cash-based incentives approved by the Compensation Committee.
Stock Options. Stock options enable the holder of the option to purchase shares of the Company’s common stock at a price specified by the Compensation Committee at the time the award is made. The Compensation Committee may grant incentive stock options to purchase up to 3,100,000 shares of common stock under the 2021 Plan. The Compensation Committee determines the exercise price of all stock options, which may not be less than the fair market value of a share of the Company’s common stock at the time of grant. The Compensation Committee also determines when an option may be exercised and its term, which may not exceed ten years. The exercise price of an option may be paid in cash, by tendering shares owned by the participant, or by any other means the Compensation Committee determines to be consistent with the purposes of the 2021 Plan and applicable law.
If, on the date an outstanding “in the money” option would expire due to a termination of service, the exercise of the option would violate applicable securities laws or any insider trading policy maintained by the Company from time to time, the expiration date applicable to the option will be extended to a date that is 30 calendar days after the date the exercise of the option would no longer violate applicable securities laws or any such insider trading policy or, if earlier, the original expiration date of the option.
Stock Appreciation Rights. In general, an award of SARs entitles the recipient to receive, upon exercise thereof, payment of an amount determined by multiplying the excess of the fair market value of a share of the Company’s common stock on the date of exercise over the grant price of the SAR, by the number of shares of common stock with respect to which the SAR is exercised. The payment upon exercise of a SAR may be made in cash, in shares of common stock or a combination of common stock and cash. The Compensation Committee determines the exercise price of all SARs, which may not be less than the fair market value of a share of the Company’s common stock at the time of grant. The Compensation Committee also determines when a SAR may be exercised and its term, which may not exceed ten years. Unless otherwise provided by the Compensation Committee or as otherwise directed by a participant in writing, each vested and exercisable SAR that is outstanding on the last business day of the applicable term of the SAR with a grant price per share that is less than the fair market value per share of the Company’s common stock as of such date will automatically, and without further action by the participant or the Company, be exercised on such date (unless such participant’s service with the Company has terminated on or before such date).
Restricted Stock, Restricted Units, and Restricted Stock Units (“RSUs”). Restricted stock is common stock that is forfeitable until the restrictions lapse. Restricted units are notional accounts that are credited with amounts equal to shares or an alternative measurement, conditioned upon the satisfaction of restrictions imposed by the Compensation Committee and payable in cash or shares of common stock, as provided in the applicable award agreement. RSUs are restricted units that are payable in shares. The Compensation Committee will determine the restrictions and other provisions applicable to each restricted stock, restricted unit and RSU award.
Restrictions on restricted stock, restricted units, and RSUs may include time-based restrictions or the achievement of specific performance goals. Restrictions may lapse all at once or in installments, as specified by the Compensation Committee. Participants have voting rights in restricted stock during the applicable restriction period. If the performance goals are not achieved or the restrictions do not lapse within the time period provided in the award agreement, the participant will forfeit his or her restricted stock, restricted units, and/or RSUs. The Compensation Committee may credit participants with cash dividends or dividend equivalents during the restriction period and such dividends or dividend equivalents will be subject to the same restrictions and other conditions as the underlying awards. Dividends (or equivalents) are not received until the underlying units vest.
Performance Units, Performance Shares, and Performance Awards. A performance unit is an award with an initial value established by the Compensation Committee at the time of grant that is based on the attainment of performance goals. A performance share is an award with an initial value equal to the fair market value of a share of Company common stock on the grant date, which is conditioned upon the achievement of performance goals specified by the Compensation Committee. A performance award is the right to receive cash or shares based, in whole or part, upon the achievement of the applicable performance goals specified by the Compensation Committee. Performance units, performance shares, and performance
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awards may be paid in cash, shares, or a combination of cash and shares, as specified in the applicable award agreement. The Compensation Committee will determine the number and terms of all performance units, performance shares, and performance awards, including the performance objectives that will determine the number or value (or both) of awards that will ultimately be paid out to a participant. As soon as practicable after the end of a performance period and prior to any payment in respect of a performance period, the Compensation Committee will certify in writing the number of performance shares, the number and value of performance units, or the amount of the performance award, that has been earned on the basis of performance in relation to the established performance criteria.
Performance Criteria. The performance criteria to be used for purposes of awards may include, without limitation, one or more of the following measures: earnings growth; earnings per share of common stock; net earnings; operating earnings or income; earnings before interest, taxes, depreciation and amortization (“EBITDA”); net sales growth; net income (absolute or comparative growth rates); net income applicable to common stock; cash flow, including operating cash flow, free cash flow, discounted cash flow return on investment, and cash flow in excess of cost of capital; operating earnings or income per share of common stock;revenues; shareholders’ equity; return on shareholders’ equity (absolute or peer-group comparative); stock price (absolute or peer-group comparative); absolute and/or relative return on common shareholders equity; absolute and/or relative return on capital; absolute and/or relative return on assets; economic value added (income in excess of cost of capital); operating margins; total shareholder return; customer satisfaction; quality metrics; expenses or expense reduction; debt-to-capital ratio; market share; ratio of operating expenses to operating revenues; and any other objective or subjective metric selected by the Compensation Committee.
Substitute Awards. The Compensation Committee may also grant substitute awards under the 2021 Plan. Substitute awards are awards that may be granted in replacement of stock or stock-based awards from another business held by current and former employees or non-employee directors of, or consultants to, such business that is, or whose stock is, acquired by the Company, in order to preserve the economic value of all or a portion of a substituted award on such terms and conditions (including price) as the Compensation Committee determines. Such awards shall be accompanied by an award agreement which will provide additional terms and conditions with respect to each grant. Substitute awards shall not be counted against or otherwise reduce the number of shares available for awards under the 2021 Plan.
Equitable Adjustments
If the shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of merger, consolidation, recapitalization, reclassification, split, reverse split, spin off, combination of shares, or other similar change in the corporate structure of the Company affecting the shares) or if the number of shares is increased through the payment of a stock dividend, then the Compensation Committee (subject, in the case of incentive stock options, to any limitation required under the Internal Revenue Code (“Code”)) shall equitably adjust any or all of (i) the number and kind of shares in respect of which awards may be made under the 2021 Plan, (ii) the number and kind of shares subject to outstanding awards, (iii) the award, exercise or conversion price with respect to any of the foregoing, and (iv) the performance conditions with respect to outstanding awards. If considered appropriate, the Compensation Committee may make provision for a cash payment with respect to an outstanding award, provided that the number of shares subject to any award shall always be a whole number.
Payment of Awards
Following the Compensation Committee’s determination of awards to be made to participants, such awards will be made in cash or shares of the Company’s common stock or combination thereof, as specified in the applicable award agreement. The Compensation Committee may establish and approve a program that allows participants to elect to defer the receipt of any award.
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Change in Control
Subject to the terms of the applicable award agreement, in the event of a Change in Control (as defined in the 2021 Plan), the Compensation Committee (as constituted prior to such Change in Control) may, in its discretion:
Require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be equitably substituted for some or all of the shares subject to an outstanding award;
Provide that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (B) the restriction period applicable to some or all outstanding awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the performance period applicable to some or all outstanding awards shall lapse in full or in part, and (D) the performance criteria applicable to some or all outstanding awards shall be deemed to be satisfied at the target or any other level; and/or
Require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of an option or an SAR, the aggregate number of shares then subject to the portion of such option or SAR surrendered multiplied by the excess, if any, of the Change in Control Price (as defined below), over the exercise price or grant price per share subject to such option or SAR, (2) in the case of a performance-based award denominated in shares, the aggregate number of shares then subject to the portion of such award surrendered to the extent the performance criteria applicable to such award have been satisfied or are deemed satisfied, multiplied by the Change in Control Price, and (3) in the case of a performance-based award denominated in cash, the value of the award then subject to the portion of such award surrendered to the extent the performance criteria applicable to such award have been satisfied or are deemed satisfied; (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.
“Change in Control Price” shall mean the fair market value of a share of Company common stock upon a Change in Control, and to the extent that the consideration paid in any such Change in Control transaction consists all or in part of securities or other non-cash consideration, the value of such securities or other non-cash consideration shall be determined in good faith by the Compensation Committee.
Termination of Service
Each individual award agreement under the 2021 Plan will set forth the treatment of an award in the event that the participant’s service is terminated. Such terms will be as determined by the Compensation Committee in its sole discretion.
Repricing Prohibition
Except for certain equitable adjustments or in connection with a Change in Control, the Compensation Committee will not, without the prior approval of the Company’s shareholders, (i) cancel any outstanding option or SAR for the purpose of reissuing the option or SAR at a lower exercise price or grant price, (ii) exchange any outstanding option or SAR whose exercise price or grant price is equal to or greater than the current fair market value of a share for cash or another award, (iii) reduce the exercise price or grant price of an outstanding option or SAR, or (iv) take any other action that would be a “repricing” of the option or SAR.
Compensation Recoupment Policy
All awards granted or paid under the 2021 Plan will be subject to recoupment by the Company pursuant to any “clawback” or similar compensation recoupment policy established by the Company, as amended from time to time to comply with applicable law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or to comport with good corporate governance practices.
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Under the Company's Compensation Recovery Policy, the Board of Directors may, consistent with applicable law, cancel or require reimbursement of any incentive compensation (which includes bonuses, other short-term and long-term non-equity incentive compensation and equity-based incentive compensation) received by an executive officer, if and to the extent that (i) the amount of the bonus or other incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement, (ii) the individual engaged in intentional misconduct that caused or partially caused the need for the restatement, and (iii) the amount of the bonus or other incentive compensation that would have been awarded to the individual had the financial results been properly reported would have been lower than the amount actually awarded. In such cases, the Company may recover from the executive officer the amount by which the actual incentive payment or equity award for the relevant period exceeded the amount that the executive officer would have received based on the restated results. The Compensation Recovery Policy is posted on the Company's website under “Investor Relations - Corporate Governance.”
Non-Exclusivity
Nothing contained in the 2021 Plan prevents the Board of Directors from adopting other or additional compensation arrangements that provide for equity awards or other forms of compensation for the Company’s executive officers, directors, other employees or consultants, whether or not shareholders approve the 2021 Plan. Such other arrangements may be either applicable only for specific executives, directors, employees, or consultants or may be generally applicable.
Duration and Amendment
The 2021 Plan will remain in effect, subject to the Board of Directors’ or the Compensation Committee’s ability to amend or terminate the 2021 Plan at any time, until all shares authorized for issuance thereunder have been issued or transferred according to the provisions of the 2021 Plan. In no event may an award be granted under the 2021 Plan after March 16, 2031, the tenth anniversary of the date on which shareholders approved the 2021 Plan.
The Board of Directors may, from time to time, alter, amend, suspend, or terminate the 2021 Plan as it deems advisable, subject to any requirement for shareholder approval imposed by applicable law and any requirements of the NYSE (or any other applicable exchange on which the Company’s common equity is at the time listed).
Federal Income Tax Consequences
The following is a general description of the United States federal income tax consequences to participants and the Company relating to nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted units, restricted stock units, performance shares, performance units and other awards that may be granted under the 2021 Plan. The 2021 Plan is not qualified under the Code Section 401(a). This discussion only applies to U.S. citizens and/or residents and does not purport to cover all tax consequences relating to awards granted under the 2021 Plan. This description is intended for informational use by the Company’s shareholders in determining how to vote at the Annual Meeting and not as tax advice to persons who receive awards under the 2021 Plan.
Non-qualified stock options. A participant generally will not recognize income, and the Company will not be entitled to a deduction from income, at the time of grant of a non-qualified stock option. When the option is exercised, the participant will recognize ordinary income equal to the difference, if any, between the aggregate exercise prices paid and the fair market value, as of the date the option is exercised, of the shares received. The participant’s tax basis in shares acquired upon exercise will equal the exercise price paid plus the amount recognized by the participant as ordinary income. The Company generally will be entitled to a federal income tax deduction in the tax year in which the option is exercised equal to the ordinary income recognized by the participant as described above. If the participant holds shares acquired through exercise of a non-qualified stock option for more than one year after the exercise of the option, the gain or loss realized upon the sale of those shares generally will be a long-term capital gain or loss. The participant’s holding period for shares acquired upon the exercise of an option will begin on the date of exercise.
Incentive stock options. A participant generally will not recognize income, and the Company will not be entitled to a deduction from income, at the time of grant of an incentive stock option. If the option is exercised during employment, or
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within three months thereafter (or one year in the case of a permanently and totally disabled employee), the participant generally will not recognize any income and the Company will not be entitled to a deduction. However, the excess of the fair market value of the shares on the date of exercise over the option price generally is included in computing the participant’s alternative minimum taxable income.
Generally, if the participant disposes of shares acquired by exercise of an incentive stock option within either two years after the date of grant or one year after the date of exercise, the participant will recognize ordinary income, and the Company will be entitled to a deduction equal to the excess of the fair market value of the shares on the date of exercise over the option price (limited generally to the gain on the sale). The balance of any gain or loss will be treated as a capital gain or loss to the participant. If shares are disposed of after the two year and one year periods described above expire, the Company will not be entitled to any deduction, and the entire gain or loss for the participant will be treated as a long-term capital gain or loss.
Stock appreciation rights. A participant generally will not recognize income, and the Company will not be entitled to a deduction from income, at the time of grant of a stock appreciation right. When the stock appreciation right is exercised, the participant will recognize ordinary income equal to the difference between the aggregate grant price and the fair market value, as of the date the stock appreciation right is exercised, of our common stock. The participant’s tax basis in shares acquired upon exercise of a stock-settled stock appreciation right will equal the amount recognized by the participant as ordinary income. The Company generally will be entitled to a federal income tax deduction in the year in which the stock appreciation right is exercised, equal to the ordinary income recognized by the participant as described above. If the participant holds shares acquired through exercise of a stock-settled stock appreciation right for more than one year after the exercise of the stock appreciation right, the gain or loss realized upon the sale of those shares will be a long-term capital gain or loss. The participant’s holding period for shares acquired upon the exercise of a stock-settled stock appreciation right will begin on the date of exercise.
Restricted stock. Restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value of shares over the purchase price (if any) only at the time the restrictions lapse (unless the participant elects to accelerate recognition as of the date of grant through an election under Code Section 83(b)). The Company generally will have (at the time the participant recognizes income) a corresponding deduction.
Restricted stock units. Restricted stock units generally are subject to tax at the time of payment and the Company generally will have a corresponding deduction when the participant recognizes income.
Performance shares. Performance shares generally are subject to tax at the time of payment. The Company will generally have (at the time the participant recognizes income) a corresponding deduction.
Performance units. Performance units generally are subject to tax at the time of payment. The Company will generally have (at the time the participant recognizes income) a corresponding deduction.
Cash awards. Cash awards generally are subject to tax at the time of payment. The Company generally will have (at the time the participant recognizes income) a corresponding deduction.
Compliance with Section 409A of the Internal Revenue Code. To the extent applicable, it is intended that the 2021 Plan and any grants made under the 2021 Plan either be exempt from, or, in the alternative, comply with the provisions of Section 409A, including the exceptions for stock rights and short-term deferrals. The Company intends to administer the 2021 Plan and any grants made thereunder in a manner consistent with the requirements of Section 409A.
If any provision of the 2021 Plan or an award agreement needs to be revised to satisfy the requirements of Section 409A, then such provision will be modified or restricted to the extent necessary to be in compliance with the requirements of Section 409A, while attempting to maintain the same economic results as were intended under the 2021 Plan and award agreement. Any reference to Section 409A includes any proposed temporary or final regulations, or any other guidance, promulgated with respect to such Section by the Internal Revenue Service.
Code Section 162(m) of the of the Internal Revenue Code. Code Section 162(m) denies a deduction to any publicly held corporation for compensation paid to certain “covered employees” in a taxable year to the extent that compensation to such covered employee exceeds $1,000,000. As a result of the Tax Cuts and Jobs Act, which became effective January 1, 2018, Code Section 162(m) no longer provides an exception for public companies to exceed the $1 million limit on the deduction for executive compensation paid to certain executive officers when the compensation is qualified as “performance-based
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compensation.” It is possible that compensation attributable to awards under the 2021 Plan, when combined with all other types of compensation received by a covered employee from us, may cause the $1,000,000 deduction limitation to be exceeded in any particular year.
New Plan Benefits
No awards have been granted under the 2021 Plan. Grants of awards under the 2021 Plan are subject to the discretion of the Compensation Committee, as the 2021 Plan administrator. Therefore, it is not possible to determine the benefits that will be received in the future by participants in the 2021 Plan. Certain tables below under the general heading “How We Are Paid - Executive Compensation Discussion & Analysis,” including the Summary Compensation Table, Grants of Plan-Based awards Table and Outstanding Equity awards at Fiscal Year-End Table set forth information with respect to prior awards granted to our individual named executive officers under the 2017 Plan. For information about equity awards made to our non-employee directors under the 2017 Plan, see table under “How We Are Paid -- Director Compensation”.
Vote Required
The number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal for approval of Proposal 2. If you sign and return your proxy card, the proxy holders will vote “for” Proposal 2 unless you mark your proxy card otherwise.
The Board of Directors Recommends that Shareholders Vote “FOR” Proposal 2 to Approve the Maximus, Inc. 2021 Omnibus Incentive Plan.
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The Audit Committee and the Board of Directors has appointed, and requests shareholder ratification of, the firm of Ernst & Young LLP as our independent registered accounting firm to audit our consolidated financial statements for the fiscal year ending September 30, 2021. Ernst & Young LLP audited our consolidated financial statements for the fiscal years ended September 30, 2020 and 2019.
Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement, if they desire to do so, and are expected to be available to respond to appropriate questions from shareholders.
Although our bylaws do not require shareholder ratification, as a matter of good corporate governance, the Board of Directors is requesting that shareholders ratify the selection of Ernst & Young LLP as our independent registered accounting firm for the fiscal year ending September 30, 2021.
The number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal for approval of Proposal No. 3. If you sign and return your proxy card, the proxy holders will vote “for” Proposal No. 3 unless you mark your proxy card otherwise.
The Board of Directors Recommends that the Shareholders Vote “FOR” the Ratification of the Appointment of Ernst & Young LLP as Our Independent Registered Accounting Firm for the Fiscal Year Ending September 30, 2021.
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Audit Information
Fees of Independent Registered Accounting Firm 
Set forth below is a description of the fees billed by Ernst & Young LLP, our independent registered accounting firm for the fiscal years ended September 30, 2019 and 2020.
Audit Fees
Fees billed for audit services totaled approximately $3,151,000 for the 2020 fiscal year and $3,480,000 for the 2019 fiscal year. Those fees include fees associated with the annual audit, the reviews of our quarterly reports on Form 10-Q, Sarbanes-Oxley Act Section 404 attest services and statutory audits required internationally.
Audit-Related Fees
Fees billed for audit-related services primarily included services related to non-statutory financial reporting and totaled approximately $45,000 for the 2020 fiscal year and $80,000 for the 2019 fiscal year.
Tax Fees
Fees billed for tax services, including tax advice and tax planning, totaled approximately $227,000 for the 2020 fiscal year and $138,000 for the 2019 fiscal year.
All Other Fees
Fees billed for all other services rendered to us by Ernst & Young LLP, which included a subscription to an accounting research service, totaled approximately $4,000 for the 2020 fiscal year and $112,000 for the 2019 fiscal year.
Pre-Approval Policies and Procedures 
The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax and other services performed by the independent auditor. The policy provides for pre-approval by the Audit Committee of permitted services before the independent auditor is engaged to perform them. The Audit Committee has delegated to the Chair of the Audit Committee authority to approve permitted services. All audit, audit-related, tax and other services performed by Ernst & Young LLP and described above were pre-approved in accordance with our pre-approval policy.
Report of the Audit Committee 
The Audit Committee is composed of four directors, each of whom is independent within the meaning of the listing standards of the NYSE and SEC regulations. The Audit Committee operates under a written charter adopted by the Board of Directors. The Audit Committee reviews its charter at least annually and revises it as necessary to ensure compliance with current regulatory requirements.
Management is responsible for:
establishing and maintaining our internal control over financial reporting;
assessing the effectiveness of our internal control over financial reporting as of the end of each year; and
the preparation, presentation and integrity of our consolidated financial statements.
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Our independent registered accounting firm is responsible for:
performing an independent audit of our consolidated financial statements and our internal control over financial reporting;
expressing an opinion as to the conformity of our consolidated financial statements with U.S. generally accepted accounting principles; and
expressing an opinion as to management’s assessment of the effectiveness of our internal control over financial reporting and the effectiveness of our internal control over financial reporting.
The Audit Committee is responsible for:
the appointment, compensation, retention and oversight of the work of the independent registered accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services for us; and
overseeing and reviewing our accounting and financial reporting processes.
In this context, the Audit Committee has met and held discussions with management and Ernst & Young LLP, our independent registered accounting firm. Management represented to the Audit Committee that our audited consolidated financial statements for the year ended September 30, 2020 were prepared in accordance with U.S. generally accepted accounting principles. The Audit Committee has reviewed and discussed those audited consolidated financial statements with management and Ernst & Young LLP, including the scope of the independent registered accounting firm’s responsibilities, critical accounting policies and practices used and significant financial reporting issues and judgments made in connection with the preparation of such financial statements.
The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301 (Communications with Audit Committees). The Audit Committee has also received the written disclosures and the letter from Ernst & Young LLP relating to the independence of that firm as required by PCAOB Ethics and Independence Rule 3526 (Communications with Audit Committees Concerning Independence) and has discussed with Ernst & Young LLP the firm’s independence from the Company.
In addition, the Audit Committee has discussed with management its assessment of the effectiveness of internal control over financial reporting and has discussed with Ernst & Young LLP its opinion as to the effectiveness of our internal control over financial reporting.
Based upon its discussions with management and Ernst & Young LLP and its review of the representations of management and the report of Ernst & Young LLP to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended September 30, 2020 for filing with the SEC.
Audit Committee
Raymond B. Ruddy (Chair)
Jan D. Madsen
Peter B Pond
Michael J. Warren
Notwithstanding anything to the contrary set forth in any of the Company's filings under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act that might incorporate future filings, including this proxy statement, in whole or in part, the Report of the Audit Committee shall not be deemed to be “Soliciting Material,” is not deemed “filed” with the SEC and shall not be incorporated by reference into any filings under the Securities Act or Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in such filing except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
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How We Are Paid —
Executive Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) discusses our compensation policies and determinations that apply to our named executive officers. When we refer to our named executive officers, or NEOs, we are referring to the following individuals whose fiscal 2020 compensation is set forth below in the Summary Compensation Table and subsequent compensation tables.
Name
Position
 
Bruce L. Caswell
Chief Executive Officer, President and Director
Richard J. Nadeau
Chief Financial Officer and Treasurer
Ilene R. Baylinson
General Manager, U.S. Services
Thomas D. Romeo
General Manager, U.S. Federal Services
David R. Francis
General Counsel and Secretary
While the discussion in the CD&A is focused on our NEOs, many of our executive compensation programs apply broadly across our executive ranks.
Executive Summary
Solid fiscal year 2020 performance despite significant COVID-19 global pandemic impact
Underscoring the importance of the services we provide, many of our U.S. contracts were designated as “essential” by government agencies in the midst of COVID-19
Board of Directors and management prioritized employee health & wellbeing and operational continuity during these unprecedented times
The Compensation Committee established a second half management bonus plan based on revised fiscal year 2020 guidance which remained consistent with our internal business plan
Introducing performance stock units in the 2021 compensation plan, in response to shareholder feedback
Renamed the U.S. Health & Human Services Segment to the U.S. Services Segment
Our Company
We are a leading operator of government health and human services programs worldwide. We are a responsible and reliable contracting partner to governments under our mission of Helping Government Serve the People®. Governments rely on our financial stability and proven expertise in helping people connect and use critical government programs. We use our experience, business process management expertise, innovation, and technology solutions to help government agencies run effective, efficient, and accountable programs.
Our primary portfolio of work is tied to business process services (“BPS”) in the health services and human services markets. Our growth over the last decade was driven by new work, such as that from the Affordable Care Act (“ACA”) in the U.S. and a growing footprint in clinical services including assessments, appeals, and independent medical reviews in multiple geographies. Our growth has been supplemented by strategic acquisitions.
The Company has a long-term growth strategy with three key tenets:
an aim to increase its growing clinical services;
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a digital transformation embedded in its service offerings; and
a desire to seek strategic acquisitions as a means to set the platform for organic revenue growth.
Our executive compensation program is structured to support this long-term growth strategy.
The COVID-19 Pandemic
COVID-19 impacted all of us and during this unprecedented time we found ourselves at the front line of addressing the pandemic response. We are proud to have responded swiftly and effectively to the pandemic by innovating to keep essential services open and accessible to the public, while prioritizing employee safety and wellbeing. Below are a few highlights:
We assisted the Centers for Disease Control and Prevention (“CDC”) by deploying additional agents to expand operations to 24/7 coverage. When call volumes peaked in April 2020, 500 agents were responding to more than 16,000 calls and 2,000 emails per day from healthcare providers and the public.
As one of the nation’s leading providers of contact tracing, we gathered new insights and quality measures to increase the probability of success. Since early May 2020, we hired, trained and deployed more than 1,100 agents.
In just four days, we launched an outbound call center for the Office of the Assistant Secretary for Health (“OASH”). More than 260 onsite and home-based agents provided COVID-19 testing results notification to individuals, and we provided HHS staff with real-time reports of results by area and age.
Since March 2020, we hired, trained, and deployed nearly 2,500 work from home agents to support unemployment programs in the U.S., with the majority of these programs launched in less than a week.
We worked tirelessly to ensure that we protected our employees while still serving the government and the vulnerable populations who rely on the health and human services programs we operate. The resilience of our business model has been impressive, and of our employees even more so.
Fiscal Year 2020 Business Highlights
Revenue increased to $3.46 billion in fiscal year 2020 compared to $2.89 billion reported for fiscal year 2019, driven by the Census contract in the U.S. Federal Services Segment and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic
Organic revenue growth of 15.7% in fiscal year 2020, or 4.6% excluding the Census contract
Operating margin of 8.3% and diluted earnings per share of $3.39 for fiscal year 2020 were lower compared to the prior year. Reduced volumes on core programs in the U.S. where pandemic-related program changes were instituted at the direction of our state and federal clients, a greater mix of cost-plus work in fiscal year 2020, and unfavorable pandemic-related impacts in operations outside the U.S.
Continued our quarterly cash dividend of $0.28 for each share of our common stock throughout fiscal 2020
Impact of COVID-19 on Compensation Actions
In accordance with regular practice, in December 2019 the Compensation Committee established the fiscal year 2020 metrics for funding the Company’s management bonus plan (“MBP”), which is the annual cash incentive plan applicable to approximately 900 employees, including our executive officers. The metrics were consistent with fiscal year 2019 and consisted of distributable income (70% weighting), revenue (15% weighting) and new business awards (15% weighting). The goals for each metric were established at threshold, target, and superior levels based on the Company’s projected fiscal year 2020 outlook.
In the wake of the COVID-19 pandemic, the Compensation Committee reviewed the goals to determine whether the MBP appropriately aligned compensation opportunities with the revised fiscal year 2020 guidance we communicated to investors and publicly disclosed in May 2020. As a result of the review, in June 2020, the Compensation Committee determined to revise the threshold, target, and superior goals for the distributable income metric using information including results from the first half of the year and projections for second half distributable income, in line with guidance issued publicly with our second quarter earnings. Goals for the other two metrics, revenue and new business awards, were not adjusted.
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The revised goals for this metric reflected the fact that the Company had to deploy significant resources to maintain its operations and support key customers throughout the pandemic and incentivize employees to continue their efforts to help the Company in the areas of employee and client safety, alternative work arrangements, and temporary new business awards related to assisting government clients with pandemic-related needs, including unemployment services, call centers, and contact tracing. However, to ensure that the goal adjustment would not have an excessive impact on MBP funding, the Compensation Committee also capped the maximum MBP pool amount at the amount that would have been funded had the Company achieved the target level of performance under the pre-pandemic goal levels.
The Compensation Committee believes the goal revision was necessary to incentivize and align employees and executives with the drivers of shareholder value for fiscal year 2020 given the business disruption from the pandemic. The Compensation Committee approved the revised targets in June 2020 and believes these were consistent with our internal business plan.
Key Fiscal Year 2020 Compensation Actions
In determining the compensation of our executive officers, the Compensation Committee evaluates:
Our financial and operating performance, measured by attainment of specific objectives including a variety of organizational financial and non-financial measures;
The duties, responsibilities, and performance of each executive officer, including the achievement of identified goals for the year as they pertain to the business operations for which the executive is personally responsible and accountable;
Total overall compensation levels, as well as the mix of salary, cash bonus incentives, and equity incentives;
Comparative industry market data to assess compensation competitiveness; and
Internal pay equity considerations.
The primary elements of our total direct compensation program for the NEOs and a summary of the actions taken by the Compensation Committee during fiscal year 2020 are set forth below.
Compensation
Component
 
Link to Business
and Talent Strategies
 
Fiscal Year 2020
Compensation Actions
Base Salary (Page 63)
Competitive base salaries help attract and retain executive talent.
Mr. Caswell’s salary increased 3.4%.
Salary increases of 3.0% - 5.0% for other NEOs.
Management Bonus Plan (“MBP”) Compensation (Page 65)
Focus executives on achieving annual financial and non-financial results that are key indicators of annual financial and operational performance.
Distributable Income and Revenue exceeded target performance. The Company did not achieve the threshold level of performance for New Business Awards.
MBP pool is funded based on three metrics – Distributable Income (70% weighting), Revenue (15% weighting) and New Business Awards (15% weighting).
The MBP payouts for NEOs, based on the compensation formulas and prior to discretion, were calculated at 133% of target.
Individual payouts are determined based on the Compensation Committee’s assessment of the Company’s financial performance and individual contribution.
However, given the ongoing COVID-19 impact, the Compensation Committee exercised negative discretion with respect to the NEOs – accordingly, our CEO was paid 88% of target bonus and the other NEOs were paid 90% of target bonus.
MBP funding released due to discretionary reductions re-allocated to other plan participants
Long-Term Incentive Plan Compensation (Page 66)
Fiscal year 2020 annual equity-based awards consist of restricted stock units (“RSUs”).
RSUs vest over five years, in equal annual installments.
RSUs provide focus on stock price growth and serve our talent retention objectives.
2021 Proxy Statement  59

TABLE OF CONTENTS


Shareholder Engagement and Fiscal Year 2020 Say-On-Pay Vote
Maximus interacts with its shareholders to obtain shareholder views on various topics from our Company’s strategy to capital allocation and executive compensation. Members of management and, as appropriate, members of our Board of Directors, participated in these shareholder engagement meetings over the past year. During these interactions, our shareholders expressed their viewpoints on a variety of topics generally focused on financial performance.
With respect to executive compensation, our shareholders expressed concern with our lack of performance-based long-term incentives and absence of “double trigger” vesting in the event of a change in control. As a result of this feedback, beginning in fiscal year 2021:
We will introduce performance stock units (“PSUs”), which will be weighted at 50% of the annual long-term equity grant value; and
All equity award grants will have “double trigger” change in control provisions.
At the 2020 Annual Meeting of Shareholders, approximately 91% of the votes cast were in favor of the advisory vote to approve executive compensation. The Compensation Committee will continue to regularly review, assess and, when appropriate, adjust our executive compensation program in response to stockholder feedback.
Fiscal Year 2021 Compensation Program Changes
Our compensation programs focus our leadership team on key areas that drive the business forward and align with the long-term interests of our shareholders. The Compensation Committee regularly reviews and discusses plan performance at each meeting. The Compensation Committee considers many factors when electing to make changes for future incentive plans including market trends, input from its independent compensation consultant and shareholder feedback. For fiscal year 2021, the Compensation Committee is making significant changes both to the short-term and long-term incentive programs to continue driving performance and better align our pay mix with the feedback received from our shareholders.
Fiscal Year 2021 Base Salary Changes
The Committee, due to the uncertainty around the COVID-19 pandemic, elected to keep executive officer salaries the same as 2020.
Name and Position
2021 Annual Salary
2020 Annual Salary
Percentage Change
Bruce L. Caswell
Chief Executive Officer and President
$750,000
$750,000
0.0%
Richard J. Nadeau
Chief Financial Officer
$525,000
$525,000
0.0%
Ilene R. Baylinson
GM U.S. Services
$515,000
$515,000