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Today’s rapidly changing world demands that governments have the capacity and flexibility to respond to the growing expectations of the people they serve. Maximus makes it easier for people to access public services more easily and equitably. We provide transformative technology services, digitally enabled customer experiences, and clinical health services that change lives.

From health assessments and eligibility and enrollment support to independent medical reviews and even intensive case management for substance abuse diversion programs, we help governments at all levels serve beneficiaries and providers. 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, using an app to enroll in Medicaid, or visiting an agency office for sustainable and impactful employment services.

We understand how challenging public programs can be. It is our sole focus. We proudly design, develop, and deliver innovative and impactful government services programs to ensure these challenges do not create barriers to access of these life and community-changing services.

 

January 25, 2023

It’s an exciting time for Maximus — the investments the company has made in the company’s foundation and core capabilities have us well-positioned for ongoing success. The Board is focused on overseeing the execution of the company’s refreshed business strategy. As Maximus moves into a period of greater stability, we foresee growth in the core business through new contract and rebid wins achieved through earning our customers’ confidence.

Our board’s commitment to strong corporate governance, risk management, and creating long-term shareholder value remains steadfast. This year, the latest in a series of governance shifts comes into focus: the complete transition to the annual election of directors following our 2020 charter amendment. In addition, other changes in recent years include updating the Nominating and Governance Committee Charter to include direct oversight of political and government relations expenditures and climate-related risks as part of Environmental, Social, and Governance (ESG) oversight, ensuring we successfully navigate evolving expectations.

Collectively our directors bring diverse perspectives, experiences, and critical skills to bear in service of achieving our mission, Moving People Forward, while creating long-term shareholder value. Examples of this acumen include their in-depth expertise in federal government contracting, technology modernization, government citizen services, and cyber security and data privacy.

Additionally, engaging with shareholders and being responsive to input is central to our board’s culture and commitment. In 2022 we made progress on implementing the racial equity audit voted on by shareholders at our last annual meeting. We enlisted the law firm WilmerHale to assess our operations, policies, and public engagement through a racial equity lens. WilmerHale has significant experience conducting equity audits, culture reviews, and other assessments of civil rights issues for clients in several sectors. A report on the results of the audit will be published upon completion, which is expected to be later in 2023.

As we look to the year ahead, we are confident that our strategy and resilient positioning will deliver stability and continued growth through different cycles in the economy. We thank you for your investment and support of Maximus.

Sincerely,

 

In fiscal year 2022 we introduced our refreshed three-to-five-year strategic plan, which we believe will open a new, more-stable period for our business. We are in a strong position to capitalize on organic growth opportunities in our core business. We have identified three pillars, which, taken together, significantly expand our addressable market:

Of course, our strong results, sound execution of our refreshed strategy, and ongoing success are made possible by our committed, talented and diverse team with a shared desire to do meaningful work and transform lives. We are entrusted to assist some of the most vulnerable individuals around the world each day and, in doing so, to treat each and every person we serve — and each other — with dignity and respect. We are energized for the road ahead: we see upside opportunity for the business on top of a base that is supported by a stable business model with long-term contracts that provide essential and in-demand government services. 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,

 

 

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.

Shareholders of record at the close of business on January 13, 2023, will be entitled to vote at the Annual Meeting or at any adjournment or postponement of the Annual Meeting.

All shareholders are invited to attend the virtual meeting. In order to attend the virtual Annual Meeting, go to virtualshareholdermeeting.com/MMS2023 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/MMS2023 and logging on as a guest. Guests will not be able to ask questions or vote at the meeting.

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:

The Board of Directors of Maximus (“Board of Directors” or “Board”) is making this proxy statement, our Annual Report on Form 10-K for fiscal year 2022, and a form of proxy available to you in connection with the solicitation of proxies by the Board for use at the 2023 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 25, 2023, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our 2023 proxy statement and 2022 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.

This proxy statement is dated January 25, 2023 and is first being furnished to shareholders on or about January 25, 2023.

We are a global company with approximately 39,500 employees and 12,550 contingent workers dedicated to helping governments on four continents administer their citizen-facing programs. Under our mission of Moving People Forward, we offer industry-leading expertise, including citizen engagement, eligibility and program integrity, independent clinical assessments, case management, and technology modernization services to enable citizens around the globe to successfully engage with their governments at all levels. We are instrumental in helping people who need governmental support get it.

In fiscal year 2022, we refreshed our strategy and updated the three pillars on which we will focus growth efforts for the next three to five years:

Our employees make it possible for us to support individuals and families around the globe. In support of their work, we provide meaningful opportunities for our employees as we:

In fiscal year 2022, Maximus employees around the globe came together to identify, define, and launch six Core Values, thereby uniting us to a common set of values that will guide our actions and behaviors. These six values represent current beliefs woven throughout everything we do at Maximus and our aspirations for the future.

 

Maximus shares the global community's concerns about climate change and believes corporations have a responsibility to reduce greenhouse gas emissions. We comply with all applicable laws and are guided by relevant internationally recognized principles and frameworks.

We recognize that greenhouse gas emissions represent a core of our environmental footprint, from the electricity used in our offices to our business travel needs. Therefore, our sustainability strategy includes voluntary measures to minimize greenhouse gas emissions and energy use, track environmental risks, and improve environmental data collection and visibility. Our strategy is a cross-functional effort working with Corporate Real Estate, Corporate Responsibility, Finance, and Operations. Information is regularly reported to the Board of Directors’ Nominating and Governance Committee, ensuring continued progress toward reducing environmental impact and risk exposures across the organization.

In fiscal year 2022, we:

For more detail regarding our social and environmental programs, see the “Reducing our environmental impact” site at maximus.com/green-initiatives.

Diversity, Equity, and Inclusion (DE&I) is an important part of who we are as a company, and we have taken a comprehensive approach to establish a framework that will help guide us toward becoming an even more inclusive workplace. We focus on furthering the company’s efforts in DE&I by identifying opportunities to make improvements, which could range from hiring practices to strengthening an inclusive company culture. We actively engage with employees across the business, levels, and positions 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, diversity, equity, and inclusion. 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.

In fiscal year 2022, we:

We remain optimistic about the numerous opportunities we see for transforming Maximus to make it an even better place to work, and an even better provider of services to our clients and customers. We look forward to sharing updates on our progress.

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 167 organizations across 30 states and the District of Columbia in the U.S. in fiscal year 2022 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 U.K. and Max Foundation in Australia, also provided vital financial grants to community partners in their geographic location, making a significant impact in many of our communities. Maximus matches contributions made to our Foundations by employees, dollar-for-dollar.

Maximus believes it is important to participate in bi-partisan political processes in order to better understand our government clients’ long-term goals and advance the Company’s business objectives. 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 applicable laws and regulations, political activities, including contributions from the employee-funded Maximus Political Action Committee, lobbying priorities and expenditures, and lastly expenditures related to principal trade organizations. More information is available at maximus.com/government-relations.

Maximus is building a supplier diversity program to support economic growth of diverse companies and communities. We appreciate the capabilities and fresh ideas that diverse businesses offer and are developing a robust program to deliver resources that will help them succeed. We are committed to working directly with diverse businesses and using diverse vendors throughout our supply chain.

We are committed to DE&I throughout our organization by maintaining positive diversity programs and protocols through our business strategy, workforce, and business relationships. Our policy is to support business opportunities for minorities, women, persons with disabilities, and veterans by providing opportunities throughout the supply chain that enable these businesses to prosper.

Across the Company, we have several initiatives that enable us to identify and qualify small and diverse businesses to utilize as subcontractors or service vendors on our contracts.

Our Board of Directors provides leadership and oversight with respect to ESG issues and practices. The Nominating and Governance Committee has formal oversight of ESG matters. It receives reports from management on a quarterly basis, and the full Board regularly receives reports from the Committee and management.

Members of the Maximus Board of Directors have expertise on key ESG issues, including regulatory trends, cybersecurity, community investment, talent attraction and retention, DE&I, and climate change.

 

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 2022, our Board of Directors spent a significant amount of time ensuring they are a strategic asset board – a board that has the critical skills, knowledge, and expertise to advise the company on subjects specific to our operations and proactively contribute to the company's successful execution of strategic objectives. Given the company’s refreshed strategy, the Board wanted to ensure that the CEO and members of the Executive Team would have access to a board whose skills they could draw from to help lead and guide the organization. As a result, we revisited our traditional skills matrix and assessed which skills are needed most, both for today and for the upcoming three to five years. We also developed, in conjunction with the Nominating and Corporate Governance Committee, a competency matrix with appropriate proficiency assessments for Directors to better assess their skills relative to what would most benefit the company. This activity has been important to the Board and Nominating and Corporate Governance Committee in their work to refresh the Board, identify new director candidates, and highlight opportunities for continuing board education. Many Board members have either recently completed NACD certifications or have expressed a willingness to obtain additional certifications. The development of a strategic asset board is anticipated to be a multi-year process as we carry out our strategic priorities.

For fiscal year 2022, the following skills are highlighted within the biographies of our current board members, but are not all-inclusive of the experience and knowledge on which we rely on each individual:

We believe that these skills and our Board’s representation of these skills and experiencesposition us for future success by aligning with our updated strategic direction.

More broadly, in the material that follows, we share with you important information about your Board, including information on:

 

The following presents biographical information about the eight directors nominated by the Board for election at 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 director, directly or indirectly, as of January 13, 2023, appears below under “Security Ownership - Security Ownership of Management.”

As a global company whose employees, customers, and stakeholders are 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 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, and veteran status. 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 50% of whom self-identify as a woman and/or a Person of Color.

 

The Board of Directors currently consists of eight directors. All directors are elected annually for one-year terms, and the Board has nominated the eight director nominees for election at the Annual Meeting. If you sign and return your proxy card, the persons named as proxies in the proxy card will vote to elect those eight nominees unless you mark your proxy card otherwise. You may not vote for a greater number of nominees than eight. 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.

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.

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 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 compliance matters, including receiving regular reports from the Company’s Chief Compliance Officer, and governance issues, such as the independence and performance of the Board. The Compensation and Human Resources 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.

Annually, the Company surveys key leaders of the Company to identify significant risks facing the Company. Those risks are ranked based on likelihood of occurrence as well as potential impact. Management regularly reports to the Board or relevant committee on actions the Company is taking to manage those risks. The Board and management periodically review, evaluate, and assess those risks and the mitigation efforts. This process also informs the Company’s disclosure and discussion of risks in its SEC filings.

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/governance. 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.

Under our Guidelines for Corporate Governance and New York Stock Exchange (“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 his or her 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, Richard A. Montoni, Gayathri Rajan, Raymond B. Ruddy, and Michael J. Warren.

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 investor.maximus.com/governance. 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.

Our Board expects that its members will prepare for, attend, and participate in all Board and applicable committee meetings. Our Board of Directors held 12 meetings during fiscal year 2022. During our 2022 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. All of our directors attended our annual meeting in 2022.

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. John J. Haley, the independent, non-executive Chair of the Board, presides over the executive sessions.

As part of the Board’s ongoing commitment to continuous improvement, 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. Based on results of the annual assessments, the Chair of the Board provides feedback to each respective Board member. In addition, an outside expert is engaged every five years to perform an in-depth, independent assessment. The most recent external assessment was completed in fiscal year 2022. Board members received feedback on their strengths and contributions, as well as opportunities for improvement. Feedback is also considered when designing education and certification road maps for each director.

Maximus has maintained separate Chief Executive Officer and Chair of the Board positions since before the Company’s initial public offering in 1997. John J. Haley currently serves as our independent, non-executive Chair of the Board. Under our Guidelines for Corporate Governance, the Board will periodically evaluate the separation of the CEO and Chair 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.

Mr. Haley brings experience to the Company from his prior roles as both board chair and CEO of a public company. Mr. Haley, together with Ms. Altman in her capacity as Chair of the Nominating and Governance Committee, represents the Company in meetings with shareholders and leads the Board in consideration of input from shareholders and other stakeholders. Mr. Haley and Ms. Altman have also led the most recent external evaluation of the Board.

The standing committees of the Board of Directors are the Audit Committee, the Nominating and Governance Committee, the Compensation and Human Resources Committee, and the Technology 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/governance.

The members of the Audit Committee are Raymond B. Ruddy (Chair), Jan D. Madsen, 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 six meetings during fiscal year 2022. For additional information regarding the Audit Committee, see “Audit Information - Report of the Audit Committee” below.

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:

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 2024 Annual Meeting of Shareholders, the notice must be received within the time frame set forth in “Shareholder Proposals for Our 2024 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.

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 Chair 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 applicable 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, 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/governance/governance-documents.

The Nominating and Governance Committee met four times during fiscal year 2022.

The Compensation and Human Resources Committee is responsible for reviewing, approving, and overseeing our compensation and executive 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:

The Chief Executive Officer and the Chief Human Resources Officer provide the Compensation and Human Resources Committee with the financial and strategic performance accomplishments of the executive management team and recommend 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 and Human Resources Committee also retains an independent consulting firm to advise it on executive compensation programs.

The Compensation and Human Resources Committee operates under a written charter adopted by the Board. The Compensation and Human Resources Committee’s charter, as amended and currently in effect, is available on our Corporate Governance web page at investor.maximus.com/governance/governance-documents.

The members of the Compensation and Human Resources Committee are John J. Haley (Chair), Anne K. Altman, Raymond B. Ruddy, and Michael J. Warren, each of whom is independent as defined by applicable NYSE listing standards governing the qualifications of committee members.

The Compensation and Human Resources Committee held five meetings during fiscal year 2022. For additional information regarding the committee, see “Compensation and Human Resources Committee Report” below.

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 cyber-security and the protection of data assets. 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/governance/governance-documents.

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 2022.

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. During the last year, Maximus engaged with investors regarding, among other topics: financial impact of the public health emergency, market inflation, rising interest rates, executive compensation, human capital management including diversity, equity, and inclusion, culture and values, Board refreshment and governance, and integration of prior year acquisitions.

In response to the majority supported shareholder proposal presented at the 2022 Annual Shareholder Meeting related to the third-party racial equity audit of Maximus’s impact on nonwhite stakeholders and communities of color, in September 2022, Maximus announced the engagement of the law firm Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”). As part of the audit, WilmerHale will assess the company’s operations, policies, ongoing DE&I efforts, and public engagement through a racial equity lens.

The audit process is expected to be completed by the end of calendar year 2023, upon which a report on the audit will be publicly disclosed on the Company’s website. The Nominating and Corporate Governance Committee is overseeing the audit process and is committed to continuing to build on Maximus’ DE&I efforts to foster equal opportunity and inclusion throughout the organization and the Company’s ability to positively impact communities it serves and beyond.

The table below summarizes the compensation paid to our non-employee directors in fiscal year 2022.

The director compensation for fiscal year 2022 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.

We also permit our directors to participate in the medical and dental plans 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 2022, Mr. Montoni and Mr. Ruddy participated in portions of those plans.

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 2022.

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, 1600 Tysons Boulevard, McLean, Virginia 22102. 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).

Our executive officers and their respective ages and positions as of the date of this proxy statement are as follows:

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.

David Mutryn assumed the role of Chief Financial Officer effective December 1, 2021. Mr. Mutryn joined Maximus in 2016 as Global Corporate Controller and transitioned to Senior Vice President of Finance in 2020. Prior to Maximus, Mr. Mutryn was Vice President of Finance at CSRA, Inc. and held numerous financial leadership positions at SRA International, Inc. He holds an MBA from the Wharton School of the University of Pennsylvania, a B.S. from the University of Virginia’s McIntire School of Commerce and is a certified public accountant.

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.

Teresa Weipert joined Maximus in April 2021 as U.S. Federal Services Segment General Manager. Ms. Weipert served as the Vice President and Service Delivery Leader at IBM, leading its Healthcare, Life Sciences, and SLED Public Markets. Her previous leadership experience includes executive roles at top companies such as Accenture, Sutherland Global Services, and Unisys. During her 20-plus year career, she has focused on generating significant growth with particular expertise in business process outsourcing and IT services management.

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.

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.

 

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, 2023. Ernst & Young LLP audited our consolidated financial statements for the fiscal years ended September 30, 2022, 2021, and 2020.

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, 2023.

The number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal for approval of Proposal No. 2. If you sign and return your proxy card, the proxy holders will vote “for” Proposal No. 2 unless you mark your proxy card otherwise.

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, 2022, and 2021.

Fees billed for audit services totaled approximately $3,617,856 for the 2022 fiscal year and $3,767,000 for the 2021 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.

Fees billed for audit-related services primarily included services related to non-statutory financial reporting and totaled approximately $45,000 for the 2022 fiscal year and $45,000 for the 2021 fiscal year.

Fees billed for tax services, including tax advice and tax planning, totaled approximately $121,273 for the 2022 fiscal year and approximately $290,000 for the 2021 fiscal year.

Fees billed for all other services rendered to us by Ernst & Young LLP, which included a subscription to an accounting research service, totaled approximately $6,810 for the 2022 fiscal year and $5,000 for the 2021 fiscal year.

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.

The Audit Committee is composed of three 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:

Our independent registered accounting firm is responsible for:

The Audit Committee is responsible for:

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, 2022, 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, 2022, for filing with the SEC.

Raymond B. Ruddy (Chair)

Jan D. Madsen

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.

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 2022 compensation is set forth below in the Summary Compensation Table and subsequent compensation tables.

Maximus previously disclosed the retirement of Chief Financial Officer, Richard J. Nadeau, effective November 30, 2021.

While the discussion in the CD&A is focused on our NEOs, many of our executive compensation programs apply broadly across our executive ranks.

Our executive compensation program is structured to support our long-term growth strategy.

In determining the compensation of our executive officers, the Compensation and Human Resources Committee took into account the following:

The primary elements of our total direct compensation program for the NEOs and a summary of the actions taken by the Compensation and Human Resources Committee during fiscal year 2022 are set forth below.

We maintain an ongoing dialogue with our shareholders throughout the year to obtain their 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.

At the 2022 Annual Meeting of Shareholders, approximately 97.5% of the votes cast were in favor of the advisory vote to approve executive compensation. The Compensation and Human Resources Committee will continue to regularly review, assess and, when appropriate, adjust our executive compensation program in response to stockholder feedback.

 

The Compensation and Human Resources Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent consulting firm, to advise it on executive compensation programs. The Compensation and Human Resources Committee reviewed the independence of FW Cook in light of SEC rules and NYSE listing standards and has concluded that both the consultant’s work for the Compensation and Human Resources Committee was independent and did not raise any conflict of interest.

Our executive compensation program focuses our leadership team on key areas that drive the business forward and align with the long-term interests of our shareholders. The Compensation and Human Resources Committee regularly reviews and discusses our compensation program and incentive plan performance. The Compensation and Human Resources Committee considers many factors when electing to make changes to the program and for future incentive plans including market trends, input from its independent compensation consultant and shareholder feedback. For fiscal year 2023, the Compensation and Human Resources Committee is making the following changes to the current program.

Maximus is committed to providing an executive compensation program that enables our organization to attract, develop, reward, motivate and retain top executive-level talent. Our executive team is responsible for driving our organization’s mission of Moving People Forward.

Our compensation program is designed to create commonality of interest between management and shareholders by tying a meaningful portion of realized compensation directly to changes in shareholder value. We consider the financial efficiency of the overall executive compensation program from taxation, accounting, and cash flow perspectives. We also consider corporate governance best practices and input from our shareholders whether through Say-on-Pay proxy voting or outreach initiatives.

The Compensation and Human Resources Committee reviews on an ongoing basis the Company’s executive compensation program to evaluate whether it supports the Company’s executive compensation philosophies and objectives and is aligned with stockholder interests. Our executive compensation practices include the following, each of which the Compensation and Human Resources Committee believes reinforces our executive compensation objectives:

The table below summarizes the key oversight responsibilities for executive compensation.

The Compensation and Human Resources Committee uses comparative industry data to assist it in evaluating our executive compensation program. With the assistance of the independent compensation consultant, the Compensation and Human Resources Committee reviews elements of our executive compensation program against a group of peer companies that are similar in business operations, size, scope, and complexity through the use of public filings and survey data. Maximus may vary from the median in terms of pay mix and total compensation as we view market data as a reference rather than determinative.

For purposes of fiscal year 2022 compensation, the Compensation and Human Resources Committee reviewed compensation practices for the following comparable companies based on analysis provided by FW Cook.

The Committee believes that this peer group was appropriate as it represented a comparable group of public companies with similar business models and of similar revenue and market capital.

As there is limited data on positions other than the CEO and CFO in the peer group data, the Compensation and Human Resources Committee also reviews data from national survey sources related to general industry, when it considers the market

competitiveness of NEO compensation levels and/or market practices. The Compensation and Human Resources Committee does not review the specific companies included in these surveys and the data presented to the Compensation and Human Resources Committee is general and not specific to any particular subset of companies.

The Company’s fiscal year 2022 executive compensation program can be summarized as follows:

Our base salary philosophy is to provide market competitive fixed income to our executive officers in amounts that attract and retain individuals with a broad, proven track record of performance. In general, we offer base salaries at or around the median of market practice among the peer group of comparable companies. Individual salaries can be above or below the median based on individual skills, experience, performance, tenure, and scope of responsibility of the incumbent, as well as the difficulty of replacing an incumbent and importance of the position to our Company. Salaries may exceed market medians for those whose skills are superior to typical executives with similar responsibilities, for those who hold positions that are broader in scope than their peers or who are uniquely important to the Company.

Adjustments to base salary are made based on (i) competitive practices among our peer group, as well as broader industry practices, (ii) our Company’s financial or individual performance in the prior year and expectations for the coming year, and (iii) qualitative assessments of the nature of the position, as well as the contribution, performance, and experience of the executive officer. In fiscal year 2022, the Compensation and Human Resources Committee chose to adjust the base salaries for the NEOs as they did not receive an increase in the prior year, were falling below market, and had outstanding company performance in fiscal year 2021. Mr. Caswell and Mr. Francis both had larger increases in fiscal year 2022, but both were below the median base salary for our peer group at 83% and 96%, respectively. Along with being market competitive, the Compensation and Human Resources Committee considered the NEO’s strong performance in fiscal year 2021.

Mr. Nadeau’s annual salary was $525,000 which was unchanged from fiscal year 2021.

The Compensation and Human Resources Committee attempts to set targets for the EBP (our annual cash incentive plan) within the range of the market median. As a result, annual cash compensation (base salary plus annual cash incentive) targets also generally approximate the market median.

Our short-term incentive plan is governed by the following considerations:

The Compensation and Human Resources Committee determined the fiscal year 2022 annual cash incentive awards for the NEOs using the following framework:

 

The target annual cash incentive opportunity as a percent of annual base salary for each of our NEOs in fiscal year 2022 was as follows:

Mr. Nadeau retired as of November 30, 2022 and was not eligible for the Executive Bonus Program in fiscal year 2022.

Our annual performance metrics are established with due consideration for the cyclical nature of our business and evolving government programs. This helps avoid inadvertently discouraging management from pursuing opportunities that involve start-up investments or losses that could deliver long-term financial benefits to our Company but might adversely affect near-term financial

results and potential rewards. The Company sets metric targets by building a model that aligns with the Company’s internal business plan. The metrics are designed with rigor and their achievement is not guaranteed. All performance metrics are adjusted to eliminate the effects of currency fluctuations from budget, mergers and acquisitions aside from the Navient acquisition which was included in our metric targets, and our discontinued operations and legal settlements or recoveries. For our non-financial metrics, we use both historical internal data and external benchmark data to set goals.

The participants in our Executive Bonus Plan, as recommended by the CEO and determined by the Compensation and Human Resources Committee, include our NEOs and approximately 25 other key executives. The metrics used in the EBP were Net Operating Income, New Contract Awards, Diversity, Equity, and Inclusion, and Employee Engagement. We chose the metrics for the following reasons:

For fiscal year 2022, the goals for the original metrics used to fund the bonus were as follows:

In aggregate, payout opportunities for achieving threshold, target, and outperform levels of achievement are 40%, 100%, and 220%. Each of the metrics in the EBP are subject to interpolation between points, and extrapolation for performance delivered in excess of the outperform goal. The target performance goal, actual achievement, and resulting component payout achievement for each metric, are set forth below:

The Compensation and Human Resources Committee made the decision to modify the overall EBP pool funding from the earned funding of 51.8% to 72%, subject to individual performance achievement, for fiscal year 2022. The Committee increased the pool funding recognizing that the shortfall on Net Operating Income was due largely to the National Public Health Emergency being extended beyond the date forecasted in our target goals. The Committee determined that the NOI component of the plan would have exceeded the threshold level of performance if the PHE was not extended.

Mr. Nadeau’s departure in November made him ineligible for a bonus.

Individual goals and performance were used to differentiate bonus payouts above or below the 72% overall funding. The Compensation and Human Resources Committee considered the impact each NEO had on the organization’s overall goals and their individual business lines when determining the NEOs payouts.

Long-term incentive (“LTI”) opportunities are generally established so that, when combined with salary and target annual bonus, target total direct compensation (“TDC”) falls at the approximate median of market levels. Realized LTI and TDC will then vary from the median based on actual financial and stock price performance.

Our LTI Program is forward-looking, so executives are issued consistent target awards annually. However, at times, they can also consider Company and individual performance during the prior fiscal year, as well as retention objectives for each executive. We manage our plans carefully to avoid excessive levels of shareholder value transfer in relation to peer companies. Additionally, we believe that the aggregate LTI cost must be reasonable in comparison to our peer companies, and the cost implications of such plans must be supported by our Company’s annual and longer-term operating plans.

Each NEO has an annual long-term equity incentive target grant denoted in terms of a dollar value, which was allocated between PSUs and RSUs. Details on the types of equity awards granted are provided in the table below. Mr. Nadeau received the entirety of his equity award made during fiscal year 2022 in RSUs as he had made known his intention to retire once the Company had hired a suitable replacement.

The performance measures and weightings for the fiscal year 2022 PSU awards are as follows:

During fiscal year 2022, the Compensation and Human Resources Committee approved the grant of the following annual PSUs and RSUs.

Mr. Nadeau’s fiscal year 2022 LTI value was significantly reduced from his fiscal year 2021 value. The Compensation and Human Resources Committee determined that RSUs were the most appropriate incentive given his limited ability to drive long-term results during and after his consulting period. In addition, the continued vesting of all Mr. Nadeau’s LTI awards is subject to compliance with robust post-termination covenants, including a non-competition restriction that extends for two years beyond the last vesting date.

The following table shows the performance of the second tranche of the Fiscal 2021-2023 EPS PSUs and the degree of attainment of the goals and resulting outcome. In the normal course, the earned PSUs will be subject to time-based vesting until September 30, 2023.

To the extent that actual EPS growth falls between any two of the values indicated in the table above, the number of earned EPS PSUs will be determined by the Committee based on an interpolation between the applicable values.

The target number of EPS PSUs and actual number of earned EPS PSUs for the fiscal year 2021 performance period is summarized in the table below:

The following table shows the performance of the first tranche of the Fiscal 2022-2024 EPS PSUs and the degree of attainment of the goals and resulting outcome. In the normal course, the earned PSUs will be subject to time-based vesting until September 30, 2024.

We provide additional compensation to our executive officers through various plans which are also available to some or all of our employees. Those plans include our 401(k) plan and our deferred compensation plan. We maintain the 401(k) plan for our employees, including our executives, because we wish to encourage employees to save some percentage of their cash compensation for their eventual retirement. The 401(k) plan permits employees to make such savings in a manner that is tax efficient. Maximus also maintains a non-tax-qualified deferred compensation plan that allows participants to save for the future on a tax-deferred basis. The plan is generally available to highly-compensated employees who desire to save more than permitted under the 401(k) plan. See the Supplemental Discussion of the Deferred Compensation Plan.

To promote our executives’ health and well-being, Maximus offers an annual healthcare screening for eligible executives. The Company also offers the opportunity for eligible executives’ access to paid financial planning services. In fiscal year 2022, we enhanced our disability benefit. While we still maintain a 60% of salary maximum, we increased the allowable dollar maximum for Executives up to $3,000 per week for short-term disability and up to $25,000 per month for long-term disability.

Maximus has adopted executive stock ownership guidelines to encourage the retention of our common shares and share equivalents delivered to executives through the compensation program. Retention of equity is critical to our Company’s ability to create commonality of interest between management and shareholders by tying the value of compensation already paid to future changes in shareholder value. Accumulation of equity therefore encourages a partnership-like environment where executives behave like owners rather than employees. The CEO must hold six times his base salary in fully owned shares, including vested stock awards that were elected to be deferred, and unvested RSUs, while all other NEOs must hold two times their base salary. As of September 30, 2022, all NEOs had met their shareholding requirements except Ms. Weipert who still has three years to meet the requirement.

The Company’s Insider Trading Policy prohibits directors, officers, and employees from selling short or purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Maximus securities, including the trading of those securities on margin. It also prohibits those parties from pledging Maximus securities (including incurring margin debt against those shares).

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) if the Board determines that Incentive Compensation was based on performance achievement that was calculated by the Company in a materially inaccurate manner, and (iii) the individual engaged in egregious conduct that is substantially detrimental to the Company (whether financially, reputationally or otherwise). 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, except in the case of egregious conduct where the board shall determine the amount of Incentive Compensation to recoup based on the following factors:

The Compensation Recovery Policy is posted on the Company's website under “Investor Relations - Corporate Governance.”

The Company will update its Compensation Recovery Policy to comply with the new compensation recovery requirements of the SEC and the NYSE within 60 days following the date on which the applicable NYSE rules become effective. Those rules would require the Company, in the event of an accounting restatement, to recover from current and former executives any incentive-based compensation, for the three years preceding the date the Company concludes an accounting restatement is required, that would not have been paid under the restated financial statements

The Company has severance guidelines for executive officers that apply in the event of a lay off or termination of employment for reasons other than cause (and not in connection with a change in control of the Company). The purpose of the guidelines is to have uniform standards that minimize the need for separately-negotiated arrangements and to provide for reasonable consideration in the event of an executive’s termination in exchange for a release of all claims against the Company.

The Company also maintains an income continuity program for executive officers that provides for severance payments and certain other benefits in the event of a change in control of the Company. The objective of that plan is to assure the Company that it will have the continued services and support of the executives notwithstanding the possibility, threat, or occurrence of a change in control. The income continuity program uses a “double trigger” such that cash-based payments to a participant under the plan are based on both a change in control of the Company as well as a qualifying termination of the participant’s employment. See Potential Payments upon Change in Control Involving Employment Termination below.

The Compensation and Human Resources Committee has reviewed with FW Cook the compensation and benefit programs for the Company’s executive officers and the potential effects of those programs on individual and group behavior and on the risk profile of the Company. The Compensation and Human Resources Committee has determined that those programs do not create incentives with respect to individual or group behavior that are likely to have a material adverse effect upon the Company’s risk profile or approach to risk management.

Additionally, the Company’s non-executive officer and management compensation policies and practices do not excessively incentivize or create a need for inappropriate risk-taking by its employees and therefore, it is not reasonably likely that current compensation policies and practices would have a material adverse effect on the Company.

Section 162(m) of the Code limits the deductibility of compensation paid to certain “covered employees” in excess of $1 million per year. Prior to the enactment of the Tax Cuts and Jobs Act passed by Congress in December 2017, there was an exception to this deduction limitation for compensation that qualified as “performance-based compensation.” The Tax Cuts and Jobs Act significantly changed Section 162(m) by, among other things, repealing the performance-based compensation exemption, and reducing the federal corporate income tax rate. As a result, compensation paid to certain current and former executive officers in excess of $1 million a year generally would not be deductible unless such compensation qualifies for certain transition relief.

The Compensation and Human Resources Committee takes into consideration the potential deductibility of the compensation as one of the factors to be considered when establishing our executive compensation program. However, the Compensation and Human Resources Committee believes its primary responsibility is to provide a compensation program that attracts, retains, and rewards our executive officers critical to our success. Following the Tax Cuts and Jobs Act, the Compensation and Human Resources Committee may continue to consider tax deductibility as a factor in determining executive compensation but may not structure its compensation arrangements around tax deductibility. The Committee will continue to monitor the effect of tax reform on our executive compensation program.

In the tables and discussion below, we summarize the compensation earned during fiscal years 2020, 2021 and 2022 by our Chief Executive Officer, our Chief Financial Officer, and our other most highly compensated executive officers, collectively referred to as the “named executive officers.

As described below, we have entered into an employment agreements with Mr. Caswell. We have not entered into employment agreements with any of the other named executive officers, apart from Mr. Nadeau’s post separation consulting agreement filed in a Form 8-K on July 23, 2021. All compensation that we pay to our named executive officers is determined as described above in our “Compensation Discussion and Analysis” section.

The Company and Mr. Caswell entered into a new employment agreement effective April 1, 2018, the date on which Mr. Caswell became Chief Executive Officer. The initial term of Mr. Caswell’s employment agreement was three years and automatically renews for successive one-year terms unless either party gives no less than three months’ prior notice of non-renewal. For fiscal year 2022, Mr. Caswell's annual base salary was $850,000 and he was eligible to receive a cash bonus under our EBP, with a targeted bonus of 150% of his base salary. For fiscal year 2022, his targeted equity award level was $4,600,000, and awards will continue to vest over their scheduled terms unless he is terminated for cause or resigns without good reason. If Mr. Caswell’s employment is terminated without cause, if Mr. Caswell terminates his employment for good reason, or if the Company elects not to renew the agreement, Mr. Caswell is entitled to receive a lump-sum severance payment equal to the greater of his base salary for the remainder of the initial term (or renewal term), or two times the sum of (a) his base salary, plus (b) the lesser of his target bonus or the actual bonus paid to him in the year prior to the termination. In addition, Mr. Caswell will receive continued vesting of his equity awards in accordance with their terms and continuation of health and welfare benefits coverage for the greater of 12 months or the remainder of the term. If his employment terminates in connection with a change in control of the Company, Mr. Caswell will be entitled to benefits under the Company’s Income Continuity Program in lieu of the severance under his employment agreement. Mr. Caswell is subject to confidentiality provisions and non-competition restrictions under the new agreement that will last until one year after the termination of his employment.

In accordance with Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are using the same “median employee” identified in the 2022 CEO Pay Ratio calculation, as we believe that there has been no change in our employee population or employee compensation arrangements that we believe would result in a significant change to our pay ratio disclosure for fiscal year 2022. The ratio of the annual total compensation of Mr. Caswell to the median of the annual total compensation of our median employee was computed to be 161 to 1 for fiscal year 2022, based on the methodology described below.

We then identified the earned elements of this employee’s total compensation for 2022 in accordance with the requirements of Item 402(u) of Regulation S-K resulting in annual total compensation for our median employee of $39,019. The ratio of the annual total compensation of Mr. Caswell as reported in the “Total” column of our 2022 Summary Compensation Table to the compensation of the median emloyee was then computed. We believe this is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC rules for identifying the median employee and calculating the pay ratio permit companies to use various methodologies, estimates and assumptions and, as result, the pay ratio reported by other companies may not be comparable to our pay ratio.

The following table contains information concerning potential payouts under the EBP as well as actual grants of equity awards to each of the NEOs during the fiscal year ended September 30, 2022.