Proxy Statement (definitive) (def 14a)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

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Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934


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		Soliciting Material Pursuant to ss.240.14a-12

RENT-A-CENTER, INC.

LOGO

(Name of Registrant as Specified In Its Charter)

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Notice of 2019 Annual Meeting of Stockholders

Tuesday, June 4, 2019

8:00 a.m. local time,

5501 Headquarters Drive, Plano, Texas 75024

The 2019 annual meeting of stockholders of Rent-A-Center, Inc. will be held on Tuesday, June 4, 2019, at 8:00 a.m. local time, at the Rent-A-Center, Inc. Field Support Center, which is located, along with our principal executive offices, at 5501 Headquarters Drive, Plano, Texas 75024, for the following purposes:

1.	To elect the two Class I directors nominated by the Board of Directors;

2.	To ratify the Audit & Risk Committee’s current selection of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2019;

3.	To conduct an advisory vote approving the compensation of the named executive officers for the year ended December 31, 2018, as set forth in the proxy statement; and

4.	To transact other business that properly comes before the meeting.

This notice is being sent to stockholders of record at the close of business on April 9, 2019. Each such holder is entitled to receive notice of and to vote at the 2019 annual meeting of stockholders and at any and all adjournments or postponements thereof.

Under rules approved by the Securities and Exchange Commission, we are furnishing proxy materials on the Internet in addition to mailing paper copies of the materials to each registered stockholder. Instructions on how to access and review the proxy materials on the Internet can be found on the proxy card sent to registered stockholders and on the Notice of Internet Availability of Proxy Materials (the “Notice”) sent to stockholders who hold their shares in “street name” (i.e. in the name of a broker, bank or other record holder). The Notice will also include instructions for stockholders who hold their shares in street name on how to access the proxy card to vote over the Internet.

Your vote is important, and whether or not you plan to attend the 2019 annual meeting of stockholders, please vote as promptly as possible. We encourage you to vote via the Internet, as it is the most convenient and cost-effective method of voting. You may also vote by telephone or by mail (if you received paper copies of the proxy materials). Instructions regarding all three methods of voting are included in the Notice, the proxy card and the proxy statement.

Thank you in advance for voting and for your support of Rent-A-Center.

By order of the Board of Directors,

LOGO

Dawn M. Wolverton

Vice President – Assistant General Counsel and Secretary

April 26, 2019

Plano, Texas

Table of Contents



QUESTIONS AND ANSWERS ABOUT THE 2019 ANNUAL MEETING AND VOTING PROCEDURES		3

PROPOSAL ONE:	ELECTION OF DIRECTORS	5

BOARD INFORMATION		8

DIRECTOR COMPENSATION		11

CORPORATE GOVERNANCE		13

PROPOSAL TWO:	RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	16

AUDIT COMMITTEE REPORT		17

EXECUTIVE OFFICERS		18

COMPENSATION COMMITTEE REPORT		19

COMPENSATION DISCUSSION AND ANALYSIS		19

PROPOSAL THREE:	ADVISORY VOTE ON EXECUTIVE COMPENSATION	38

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION		38

RELATED PERSON TRANSACTIONS		39

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		39

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		40

SUBMISSION OF STOCKHOLDER PROPOSALS		41

OTHER BUSINESS		41

Proxy Statement

This proxy statement is furnished in connection with the solicitation of proxies by Rent-A-Center, Inc. (the “Company”), on behalf of its Board of Directors (the “Board”), for the 2019 Annual Meeting of Stockholders of the Company (the “2019 Annual Meeting”). This proxy statement and related proxy materials are being mailed to our stockholders on or about April 26, 2019.

Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. For information regarding our 2018 performance, please review our Annual Report on Form 10-K for the year ended December 31, 2018. Page references are supplied to help you find further information in this proxy statement.

Meeting Information

Date & Time: 8:00 a.m. Central time on Tuesday, June 4, 2019

Location: Rent-A-Center, Inc. Field Support Center, 5501 Headquarters Drive, Plano, Texas 75024

Eligibility to Vote: You can vote if you were a stockholder of record at the close of business on April 9, 2019 (see page 3 for information on how to vote)

Voting matters


Proposal	Board Vote Recommendation	Page Reference (for more detail)
Election of Directors	FOR each Director Nominee	5
Ratification of Auditors	FOR	16
Advisory Vote on Executive Compensation	FOR	38

At the 2018 annual meeting, we submitted a proposal to our stockholders to declassify the Board of Directors. Stockholders owning approximately 75% of our outstanding shares of common stock voted in favor of the declassification proposal, which was less than the 80% affirmative vote required to amend our Certificate of Incorporation to declassify the Board. We intend to resubmit the declassification proposal at a future annual meeting of stockholders.

Board Nominees (page 5)

The Board has identified two new independent director nominees to be elected as Class I directors, Carol A. McFate and Harold Lewis. The following table provides summary information about each director nominee who is nominated for election at the 2019 Annual Meeting. Each director nominee will serve a three-year term expiring at the 2022 annual meeting of stockholders and until their successors are elected and qualified. Information regarding our directors whose terms continue past this year’s stockholder meeting begins on page 6.


Name	Age	Experience/Qualification	Proposed Committee Memberships	Other Public Company Boards
Carol A. McFate	66	• Corporate finance and treasury • Governance; leadership	Audit; Nominating	N/A
Harold Lewis	58	• Financial technology • Consumer finance	Audit; Compensation	N/A

Executive Compensation

Principles (page 19)

We generally target total direct compensation (base salary, annual incentive and long-term incentive compensation) at the 50 ^th -75 ^th percentile of that paid at similarly-situated public companies in the retail and consumer finance sector, with cash compensation (base salary and annual incentives) targeted at the 50 ^th percentile, and

long-term incentive compensation targeted at the 75 ^th percentile. The objectives of our executive compensation program are to:

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attract, retain and motivate senior executives with competitive compensation opportunities;


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balance short-term and long-term strategic goals;

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align our executive compensation program with the core values identified in our mission statement, which focuses on improving the quality of life for our co-workers and our customers; and

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reward achievement of our financial and non-financial goals.

The following forms of compensation are currently utilized by the Compensation Committee in compensating our named executive officers:

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base salary, which is paid in cash;

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annual incentive compensation, which is paid in cash and is focused on three metrics – profitability, cash flow and revenue;

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long-term incentive compensation, which consists of stock options which generally vest ratably over four years beginning on the first anniversary of the date of grant, restricted stock units which cliff vest after three years, and performance stock units which vest based solely on a relative total shareholder return metric over a three-year measurement period;

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double trigger severance arrangements; and

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fringe benefits, including perquisites, with no tax gross-ups.

Relative Total Shareholder Return (page 23)

Our Compensation Committee has adopted a relative total shareholder return metric over a three-year measurement period as the vesting condition for grants of performance stock units pursuant to our long-term incentive compensation program.

Stock Ownership Guidelines (pages 12 and 25)

We believe that our Board and our management should have a significant financial stake in the Company to ensure that their interests are aligned with those of our stockholders. To that end, our directors, as well as our Chief Executive Officer, are subject to equity interest guidelines as described on pages 12 and 25,

respectively. In addition, our insider trading policy prohibits our directors and executive officers from engaging in hedging or other derivative transactions involving our common stock. We also do not allow shares of our common stock owned by any of our directors or named executive officers to be pledged.

Clawback Policy (page 25)

Our Board has adopted a clawback policy applicable to our executive officers as described on page 25.

Pay for Performance (page 19)

Our executive compensation program directly links a substantial portion of executive compensation to our financial performance through annual and long-term incentives. For the 2018 annual cash incentive program, (i) the EBITDA goal was achieved at 141.9% of target (resulting in a 200% payout of the 40% of the target bonus amounts attributable to the EBITDA target), (ii) the cash flow target was achieved at 157.2% of target (resulting in a 200% payout of the 40% of the target bonus amounts attributable to the cash flow target, and (iii) the revenue goal was achieved at 102.8% of target (resulting in a 129% payout of the 20% of the target bonus amounts attributable to the revenue target). As a result, each participant in the 2018 annual cash incentive program received an amount equal to 186% of such person’s target bonus amount.

In 2016, our Compensation Committee granted to our named executive officers performance-based restricted stock units based on our relative Total Shareholder Return (“TSR”) as compared to the S&P 1500 Specialty Retail Index over a three-year measurement period. Our relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the three-year period ending December 31, 2018, ranked us 32 out of 56 companies in the S&P 1500 Specialty Retail Index, or the 44th percentile, which resulted in the vesting of 75% of the performance-based restricted stock units that were granted.


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QUESTIONS AND ANSWERS ABOUT THE 2019 ANNUAL MEETING AND VOTING PROCEDURES

Who may vote?

Stockholders of record as of the close of business on April 9, 2019, the record date for the 2019 Annual Meeting, may vote at the meeting. Each share of common stock entitles the holder to one vote per share. As of April 9, 2019, there were 54,049,974 shares of our common stock outstanding.

What constitutes a quorum?

The holders of at least a majority of our outstanding shares of common stock entitled to vote at the 2019 Annual Meeting must be represented at the 2019 Annual Meeting in person or by proxy to have a quorum. Any stockholder present at the 2019 Annual Meeting, either in person or by proxy, but who abstains from voting, will be counted for purposes of determining whether a quorum exists.

How do I vote?

You cannot vote your shares of common stock unless you are present at the meeting or you have previously given your proxy. You can vote by proxy in one of the following three convenient ways:

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by mail – if you received your proxy materials by mail, you can vote by mail by completing, signing, dating and returning the proxy card in the enclosed envelope;

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on the Internet, by visiting the website shown on the Notice or the proxy card and following the instructions; or

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by telephone, by calling the toll-free telephone number shown on the Notice or the proxy card and following the instructions.

How will the proxies be voted?

All properly executed proxies, unless revoked as described below, will be voted at the meeting in accordance with your directions on the proxy. If a properly executed proxy does not provide instructions, the shares of common stock represented by your proxy will be voted:

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“FOR” each of the Board’s nominees for Class I director;

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“FOR” the ratification of the Audit & Risk Committee’s current selection of KPMG LLP as our independent registered public accounting firm for 2019; and

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“FOR” the resolution approving the compensation of the named executive officers for the year ended December 31, 2018, as set forth in the proxy statement.

The proxy holders will use their discretion on any other matters that properly come before the meeting. Unless otherwise stated, all shares represented by your completed, returned, and signed proxy will be voted as described above. If you are voting on the Internet or by telephone, the proxies will be voted in accordance with your voting instructions. If you are voting on the Internet or

by telephone, your voting instructions must be received by 11:59

p.m., Eastern time on June 3, 2019, unless you are a participant in our 401(k) plan, in which case your voting instructions must be received by 6:00 a.m., Central time, on June 3, 2019.

You may revoke your proxy at any time before or at the 2019 Annual Meeting (in each case, before the vote at the 2019 Annual Meeting) by:

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Delivering a signed, written revocation letter, dated later than the proxy, to Dawn M. Wolverton, Vice President – Assistant General Counsel and Secretary, at 5501 Headquarters Drive, Plano, TX 75024;

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Delivering a signed proxy, dated later than the first one, to Saratoga Proxy Consulting, LLC, 528 8 ^th Avenue, 14 ^th Floor, New York, NY 10018;

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Voting at a later time on the Internet or by telephone, if you previously voted on the Internet or by telephone; or

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Attending the meeting and voting in person or by proxy. Attending the meeting alone will not revoke your proxy.


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QUESTIONS AND ANSWERS ABOUT THE 2019 ANNUAL MEETING AND VOTING PROCEDURES

How many votes must each proposal receive to be adopted?

Proposal 1: Election of Directors . Under our Bylaws, directors are elected by a majority of the votes cast in uncontested elections. Accordingly, the numbers of votes cast “for” a director nominee must exceed the number of votes cast “against” that nominee. In contested elections, the vote standard would be a plurality of votes cast. Each share may be voted for each of the nominees, but no share may be voted more than once for any particular nominee. Broker non-votes and abstentions will not affect the outcome of the vote.

Proposal 2: Ratification of the Audit & Risk Committee’s current selection of KPMG LLP as our independent registered public accounting firm for 2019 . A majority of the votes cast is required

to ratify KPMG as our independent registered public accounting firm. Broker non-votes and abstentions will not affect the outcome of the vote to ratify KPMG.

Proposal 3: Advisory vote on executive compensation. The affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the meeting is required to approve the advisory resolution on executive compensation. Broker non-votes will not affect the outcome of the vote. Because abstentions are counted as shares present and entitled to vote on the proposal, each abstention will have the same effect as a vote “against” the advisory resolution on executive compensation.

What are broker non-votes?

Broker non-votes occur when nominees, such as banks and brokers, holding shares on behalf of beneficial owners, or customers, do not receive voting instructions from the customers. Brokers holding shares of record for customers generally are not entitled to vote on certain matters unless they receive voting instructions from their customers. In the event that a broker does not receive voting instructions for these matters, a broker may notify us that it lacks voting authority to vote those shares. These broker non-votes refer to votes that could have been cast on the matter in question by brokers with respect to uninstructed shares if the brokers had received their customers’ instructions. These

broker non-votes will be included in determining whether a quorum exists.

Your bank or broker is not permitted to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote, no votes will be cast on your behalf for Proposal 1 (in the election of directors), Proposal 2 (ratification of auditors) and Proposal 3 (advisory vote on executive compensation). To be sure your shares are voted in the manner you desire, you should instruct your broker how to vote your shares.

Who is soliciting this proxy?

The Board is soliciting this proxy. In addition to the solicitation of proxies by mail, proxies may also be solicited by telephone, electronic mail or personal interview. We will reimburse banks, brokers, custodians, nominees and fiduciaries for reasonable expenses they incur in sending these proxy materials to you if you

are a beneficial holder of our shares. We have engaged Saratoga Proxy Consulting LLC, a proxy solicitation firm, to assist in the solicitation of proxies for which we will pay a fee in the amount of $10,000.


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PROPOSAL ONE:		ELECTION OF DIRECTORS

What is the organizational structure of the Board?

Our Board is divided into three classes with directors in each class generally serving for a term of three years. J.V. Lentell, currently serving as a Class III director, will retire from the Board following the 2019 Annual Meeting. Assuming the board nominees

described below are elected at the 2019 Annual Meeting, the Board will consist of six members.

How many directors are to be elected?

Two Class I directors are to be elected by our stockholders. There are no incumbent directors serving in Class I due to term expiration and prior resignations from the Board. Accordingly, our

Board has nominated two new independent director candidates to serve as Class I directors.

Who are the board nominees?

Our Board, upon recommendation of the Nominating and Corporate Governance Committee, has nominated each of Carol A. McFate and Harold Lewis to be elected as Class I directors by our stockholders.

The qualifications necessary for a board nominee and the Nominating and Corporate Governance Committee’s process for evaluating prospective board members is discussed below under “Director Nominations – Qualifications” on page 15. Specific experience and relevant considerations with respect to each nominee are set forth in each candidate’s respective biography below.

Each of Ms. McFate and Mr. Lewis has agreed to stand for election. However, should either of them become unable or unwilling to accept nomination or election, the shares of common stock voted for that nominee by proxy will be voted for the election of a substitute nominee whom the proxy holders believe will carry out our present policies. Our Board has no reason to believe that either of Ms. McFate or Mr. Lewis will be unable or unwilling to serve if elected, and, to the knowledge of the Board, each intends to serve the entire term for which election is sought.


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PROPOSAL ONE: ELECTION OF DIRECTORS

Our Board recommends that you vote “FOR” each of Ms. McFate and Mr. Lewis.

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Carol A. McFate

Independent Director Nominee

Age: 66

Ms. McFate served from 2006 until October 2017 as the Chief Investment Officer of Xerox Corporation, a multinational document provider of multifunction document management systems and services, managing retirement assets for North American and UK plans. Previously, Ms. McFate served in various finance and treasury roles for a number of prominent insurance and financial services companies, including XL Global Services, Inc., a US-based subsidiary of XL Capital Ltd., a leading Bermuda-based global insurance and reinsurance company, American International Group, Inc., an American multinational property & casualty insurance, life insurance, and financial services provider, Prudential Insurance Company of America, an American Fortune Global 500 and Fortune 500 company whose subsidiaries provide life insurance, investment management and other financial products and services to both retail and institutional customers through the US and in over 30 other countries. Ms. McFate is a Chartered Financial Analyst.

Ms. McFate brings over 40 years of global corporate finance experience and a varied viewpoint to the Board which we believe will support our strategic initiatives and enhance long-term vision, sustainable growth and shareholder value.

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Harold Lewis

Independent Director Nominee

Age: 58

Mr. Lewis brings over 30 years of experience in financial services and mortgage lending. Since August 2018, he has served as the CEO of Renovate America, Inc., a national home improvement fintech company focused on energy efficient home improvement lending. From 2016 to 2018, Mr. Lewis was a senior advisor for McKinsey & Company, a worldwide management consulting firm. From 2012 to 2015 he served as President and COO of Nationstar Mortgage, one of the largest mortgage servicers in the country. In that position, he grew Nationstar’s servicing platform from $30 billion to $400 billion and mortgage origination portfolio from $1.8 billion to $25 billion while also building and managing Nationstar’s relationship with the newly created industry regulator, the Consumer Financial Protection Bureau. Prior to Nationstar Mortgage, he held C-Suite and senior executive positions at Citi Mortgage, Fannie Mae, Resource Bancshares Mortgage Group and Nations Credit, among others.

We believe that Mr. Lewis’ significant financial technology knowledge and broad experience with a similar customer demographic provides our Board with an important resource with respect to our e-commerce and Acceptance Now businesses.

Who are the continuing members of the Board?

The terms of the following four members of our Board will continue past the 2019 Annual Meeting.

Term to Expire at the 2020 Annual Meeting:

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Jeffrey J. Brown

Independent Director; Chairman of the Board

Age: 58

Director Since: 2017

Committees Served: Audit (chair); Compensation; Nominating & Corporate Governance

Mr. Brown is the Chief Executive Officer and founding member of Brown Equity Partners, LLC, which provides capital to management teams and companies needing equity. Mr. Brown’s venture capital and private equity career spans 30 years, including

positions with Hughes Aircraft Company, Morgan Stanley & Company, Security Pacific Capital Corporation and Bank of America Corporation. Since June 2015, Mr. Brown has served as the Lead Director of Medifast, Inc., where he also serves as chairman of the Audit Committee and is a member of the Executive Committee. Mr. Brown also serves as a director and member of the Audit Committee of Cadiz, Inc. Mr. Brown previously served as a director of Outerwall Inc., Midatech Pharma PLC, and Nordion, Inc.

Mr. Brown brings to the Board extensive public and private company board experience and significant transactional expertise.


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PROPOSAL ONE: ELECTION OF DIRECTORS

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Mitchell E. Fadel

Director; Chief Executive Officer

Age: 61

Director Since: 2017

Committees Served: N/A

Mr. Fadel has served as one of our directors since June 2017 and was named Chief Executive Officer on January 2, 2018. Mr. Fadel was self-employed prior to joining the Company after most recently serving as President – U.S. Pawn for EZCORP, Inc., a leading provider of pawn loans in the United States and Mexico, from September 2015 to December 2016. Prior to that, Mr. Fadel served as President of the Company (beginning in July 2000) and Chief Operating Officer (beginning in December 2002) each until August 2015, and also as a director of the Company from December 2000 to November 2013. From 1992 until 2000, Mr. Fadel served as President and Chief Executive Officer of the Company’s subsidiary Rent-A-Center Franchising International, Inc. f/k/a ColorTyme, Inc. Mr. Fadel’s professional experience with the Company also includes previously serving as a Regional Director and a District Manager.

As our Chief Executive Officer, Mr. Fadel’s day-to-day leadership provides him with intimate knowledge of our operations that are a vital component of our Board discussions. In addition, Mr. Fadel brings 30 years of experience in and knowledge of the rent-to-own industry, including his previous tenure as our President and Chief Operating Officer, to the Board. We believe Mr. Fadel’s service as our Chief Executive Officer creates a critical link between management and our Board, enabling our Board to perform its oversight function with the benefit of management’s perspectives on our business.

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Christopher B. Hetrick

Independent Director

Age: 40

Director Since: 2017

Committees Served: Audit; Compensation (chair); Nominating & Corporate Governance Committee

Mr. Hetrick has been the Director of Research at Engaged Capital, a California based investment firm and registered advisor with the U.S. Securities and Exchange Commission focused on investing in small and mid-cap North American equities, since September 2012. Prior to joining Engaged Capital, Mr. Hetrick worked at Relational Investors LLC (“Relational”), a $6 billion activist equity fund, from January 2002 to August 2012. Mr. Hetrick began his career with Relational as an associate analyst. He eventually became the firm’s senior consumer analyst overseeing over $1 billion in consumer sector investments. Prior to his work heading up the consumer research team, Mr. Hetrick was a generalist covering major investments in the technology, financial, automotive and food sectors.

We believe that Mr. Hetrick’s extensive investment experience in a broad range of industries as well as his expertise in corporate strategy, capital allocation, executive compensation, and investor communications well qualifies him to serve on our Board.

Term to Expire at the 2021 Annual Meeting:

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Michael J. Gade

Independent Director

Age: 67

Director Since: 2005

Committees Served: Audit; Compensation; Nominating & Corporate Governance (chair)

Since 2004, Mr. Gade has been an Executive in Residence at the University of North Texas as a professor of marketing and retailing. Mr. Gade also serves as a strategic advisor to The Boston Consulting Group. A founding partner of Challance Group, LLP, Mr. Gade has over 30 years of marketing and management experience, most recently serving as senior executive for the southwest region of Home Depot, Inc. from 2003 to 2004. From 2000 to 2003, Mr. Gade served as Senior Vice President,

Merchandising, Marketing and Business Development for 7-Eleven, Inc. From 1995 to 2000, Mr. Gade was employed by Associates First Capital Corporation as Executive Vice President, Strategic Marketing and Development. Prior to 2000, Mr. Gade was a Senior Partner and Chairman of the Retail Consumer Product Practice at Coopers & Lybrand (now part of PricewaterhouseCoopers). Mr. Gade also serves on the Board of Directors of The Crane Group.

We believe that Mr. Gade’s significant retail marketing experience provides our Board with an important resource with respect to our marketing and advertising efforts. In addition, Mr. Gade provides leadership and governance experience through his other directorships, including service on the audit and compensation committees of such companies.


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BOARD INFORMATION

Skills and Qualifications of Board of Directors and Nominees

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Independent Directors

As part of the Company’s corporate governance practices, and in accordance with Nasdaq rules, the Board has established a policy requiring a majority of the members of the Board to be independent. In January 2019, each of our non-employee directors completed a questionnaire which inquired as to their (and those of their immediate family members) relationship with us and other potential conflicts of interest. Our legal department reviewed the responses of our directors to such questionnaires, as well as material provided by management related to transactions, relationships and arrangements between us and our directors or

parties related to our directors. In March 2019, our Board met to discuss the independence of our directors who are not employed by us. Following such discussions, our Board determined that the following continuing directors are “independent” as defined under Nasdaq rules: Jeffrey J. Brown, Michael J. Gade, and Christopher B. Hetrick. The table below includes a description of categories or types of transactions, relationships or arrangements considered by our Board in reaching its determination that the directors are independent.


Name	Independent	Transactions/Relationships/Arrangements
Jeffrey J. Brown	Yes	None
Michael J. Gade	Yes	None
Christopher B. Hetrick	Yes	Employee of Engaged Capital, a 9.9% stockholder in the Company

In April 2019, each of Ms. McFate and Mr. Lewis completed a questionnaire which inquired as to their (and those of their immediate family members) relationship with us and other potential conflicts of interest in connection with the nomination

process. Following a review of such questionnaires, our Board determined that each of Ms. McFate and Mr. Lewis will be “independent” as defined under Nasdaq rules.


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BOARD INFORMATION

Board Leadership Structure

Our Board separates the roles of Chairman and Chief Executive Officer. Mr. Lentell served as Chairman from December 2017 to April 24, 2019. Mr. Brown was appointed as Chairman effective as of April 24, 2019. Mr. Fadel serves as our Chief Executive Officer. The Board believes that the separation of the roles of Chairman and Chief Executive Officer at this time is appropriate in light of Mr. Fadel’s tenure as Chief Executive Officer and is in the best interests of the Company’s stockholders. Separating these positions aligns the Chairman role with our independent directors, enhances the independence of our Board from management and allows our Chief Executive Officer to focus

on developing and implementing our strategic initiatives and supervising our day-to-day business operations. Our Board believes that Mr. Brown is well situated to serve as Chairman because of his experience serving on the boards of other public companies, including as a lead director. Mr. Brown will work closely with Mr. Fadel to set the agenda for Board meetings and to coordinate information flow between the Board and management.

Our Board will review its determination to separate the roles of Chairman and Chief Executive Officer periodically or as circumstances and events may require.

Board Meetings; Executive Session

During 2018, our Board met 31 times, including regularly scheduled and special meetings. All of our directors attended more than 75% of the aggregate of the total number of meetings of the Board and the total number of meetings of the Board committees on which they serve.

Our independent directors meet in executive session at each in-person meeting of the Board. Executive sessions are generally chaired by our Chairman of the Board.

Role of the Board in Risk Oversight

Our Board takes an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board and the relevant committees receive regular reports from members of senior management on areas of material risk to the Company, including operational, financial, strategic, competitive, reputational, legal and regulatory risks. The Board also meets with senior management annually for a strategic planning session and discussion of the key risks inherent in our

short- and long-term strategies at the development stage, and also receives periodic updates on our strategic initiatives throughout the year. In addition, our Board has delegated the responsibility for oversight of certain risks to its standing committees, as discussed below. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire Board is regularly informed through committee reports concerning such risks.

Board Committees

The standing committees of the Board during 2018 included the Audit & Risk Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Each of the standing committees has the authority to retain independent advisors and consultants, with all fees and expenses to be paid by the Company.

The Audit & Risk Committee assists the Board in fulfilling its oversight responsibilities by reviewing risks relating to accounting matters, financial reporting, legal and regulatory compliance, and other enterprise-wide risks. To satisfy these oversight responsibilities, our Audit & Risk Committee reviews, among other things, (1) the financial reports and other financial information provided by us to the Securities and Exchange Commission (“SEC”) or the public, (2) our systems of controls regarding finance, accounting, legal compliance and ethics that management and the Board have established, (3) our independent

auditor’s qualifications and independence, (4) the performance of our internal audit function and our independent auditors, (5) the efficacy and efficiency of our auditing, accounting and financial reporting processes generally, and (6) our risk management practices. The Audit & Risk Committee has the direct responsibility for the appointment, compensation, retention and oversight of our independent auditors, and reviews our internal audit department’s reports, responsibilities, budget and staffing. The Audit & Risk Committee also pre-approves all audit and non-audit services provided by our independent auditors and oversees compliance with our code of ethics. In addition, the Audit & Risk Committee meets regularly with our Chief Financial Officer, the head of our internal audit department, our independent auditors, and management (including regularly scheduled executive sessions with the vice president of internal audit and our independent auditors).


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BOARD INFORMATION

The Board has adopted a charter for the Audit & Risk Committee, which can be found in the “Corporate Governance” section of the “Investor Relations” section of our website at www.rentacenter.com . The Audit & Risk Committee reviews, updates and assesses the adequacy of its charter on an annual basis, and may recommend any proposed modifications to its charter to the Board for its approval, if and when appropriate.

During 2018, the Audit & Risk Committee held nine meetings. All members of the Audit & Risk Committee are “independent” under SEC and Nasdaq rules. In addition, the Board has determined that Mr. Brown is an “audit committee financial expert” as defined by SEC rules and each of Mr. Gade and Mr. Hetrick meets the financial sophistication requirements of Nasdaq. Members: Mr. Brown (Chair), Mr. Gade and Mr. Hetrick . Following the 2019 Annual Meeting, the Audit Committee will be reconstituted to comprise Mr. Brown (Chair), Mr. Lewis and Ms. McFate.

The Compensation Committee (1) discharges the Board’s responsibilities with respect to all forms of compensation of our Chief Executive Officer, Chief Financial Officer, and each of our Executive Vice Presidents, including assessing the risks associated with our executive compensation policies and practices and employee benefits, (2) administers our equity incentive plans and (3) reviews and discusses with our management the Compensation Discussion and Analysis to be included in our annual proxy statement, annual report on Form 10-K or information statement, as applicable, and makes a recommendation to the Board as to whether the Compensation Discussion and Analysis should be included in our annual proxy statement, annual report on Form 10-K or any information statement, as applicable. The Compensation Committee is also responsible for recommending to the Board the form and amount of director compensation and conducting a review of such compensation as appropriate.

The Board has adopted a charter for the Compensation Committee, which can be found in the “Corporate Governance” section of the “Investor Relations” section of our website at www.rentacenter.com. In addition, the Compensation Committee reviews, updates and assesses the adequacy of its charter on an annual basis, and may recommend any proposed modifications to its charter to the Board for its approval, if and when appropriate.

The Compensation Committee’s processes for fulfilling its responsibilities and duties with respect to executive compensation and the role of our executive officers in the compensation process are described under “Compensation Discussion and Analysis – Compensation Process” beginning on page 21 of this proxy statement.

Pursuant to its charter, the Compensation Committee has the authority, to the extent it deems necessary or appropriate, to retain compensation consultants, independent legal counsel or other advisors and has the sole authority to approve the fees and other retention terms with respect to such advisors. From time to time, the Compensation Committee has engaged compensation consultants to advise it on certain matters. See “Compensation Discussion and Analysis – Compensation Process” beginning on page 21 of this proxy statement. In addition, the Compensation Committee also has the authority, to the extent it deems necessary or appropriate, to delegate matters to a sub-committee composed of members of the Compensation Committee.

The Compensation Committee held four meetings in 2018. All members of the Compensation Committee are non-employee directors and are “independent” under Nasdaq rules. Members: Mr. Hetrick (Chair), Mr. Brown and Mr. Gade . Following the 2019 Annual Meeting, the Compensation Committee will be reconstituted to comprise Mr. Hetrick (Chair), Mr. Gade and Mr. Lewis.

The Nominating and Corporate Governance Committe e manages risks associated with corporate governance and potential conflicts of interest and assists the Board in fulfilling its responsibilities by (1) identifying individuals believed to be qualified to become members of the Board, consistent with criteria approved by the Board, (2) recommending to the Board candidates for election or reelection as directors, including director candidates submitted by the Company’s stockholders and (3) overseeing, reviewing and making periodic recommendations to the Board concerning our corporate governance policies. In addition, the Nominating and Corporate Governance Committee directs the succession planning efforts for the Chief Executive Officer and reviews management’s succession planning process with respect to our other senior executive officers.

The Board has adopted a written charter for the Nominating and Corporate Governance Committee, which is available in the “Corporate Governance” section of the “Investor Relations” section of our website at www.rentacenter.com. In addition, the Nominating and Corporate Governance Committee reviews, updates and assesses the adequacy of its charter on an annual basis, and may recommend any proposed modifications to its charter to the Board for its approval, if and when appropriate.

During 2018, the Nominating and Corporate Governance Committee held three meetings. The Board has determined that each member of the Nominating and Corporate Governance Committee is “independent” as defined under Nasdaq rules. Members: Mr. Gade (Chair), Mr. Brown and Mr. Hetrick . Following the 2019 Annual Meeting, the Nominating and Corporate Governance Committee will be reconstituted to comprise Mr. Gade (Chair) , Mr. Hetrick and Ms. McFate.


	10			RENT-A-CENTER - 2019 Proxy Statement

DIRECTOR COMPENSATION

Cash Compensation

During 2018, each non-employee director received an annual retainer of $50,000. Additionally, each non-employee director receives $2,500 for each Board meeting attended in person and is reimbursed for his or her expenses in attending such meetings. In addition to such compensation, additional annual retainers are paid as follows:


Position	Annual Retainer
Chairman of the Board	$	80,000
Chair of the Audit & Risk Committee	$	16,000
Other members of the Audit & Risk Committee	$	9,000
Chair of the Compensation Committee	$	12,000
Other members of the Compensation Committee	$	6,000
Chair of the Nominating and Corporate Governance Committee	$	8,000
Other members of the Nominating and Corporate Governance Committee	$	6,000

All retainers were paid in cash, in four equal installments on the first day of each quarter. Mr. Fadel did not receive any cash compensation for his service as a director during 2018.

The Compensation Committee engaged Korn Ferry Hay Group, Inc. (“Hay Group”) to advise it with respect to the compensation paid to our non-employee directors as compared to similarly situated public companies. Based on such input from Hay Group, in March 2019, the Compensation Committee recommended, and the Board adopted, that the annual retainer paid to non-employee directors be increased from $50,000 to $77,500, beginning with the quarterly installment due on July 1, 2019. In addition, the Compensation Committee recommended, and the Board adopted, the following revised additional annual retainers, beginning with the quarterly installment due on July 1, 2019:


Position	Annual Retainer
Chairman of the Board	$	150,000
Chair of the Audit & Risk Committee	$	27,500
Other members of the Audit & Risk Committee	$	15,000
Chair of the Compensation Committee	$	25,000
Other members of the Compensation Committee	$	10,500
Chair of the Nominating and Corporate Governance Committee	$	20,000
Other members of the Nominating and Corporate Governance Committee	$	10,000

Beginning July 1, 2019, retainers may be paid in a combination of cash or deferred stock units (“DSUs”) at each non-employee director’s election. To encourage our directors to take a greater portion of their cash compensation in the form of Company stock to further enhance their alignment with the interests of our stockholders, deferred fees will be matched 25% by the Company and the total deferred fees and matching contributions will be converted into an equivalent value of DSUs. Deferred fees plus matching contributions are converted to DSUs based on the closing price of Rent-A-Center common stock on the trading day immediately preceding the date on which the fees are payable. Each DSU represents the right to receive one share of common stock of the Company. The DSUs are fully vested and non-forfeitable. The common stock will be issued on the date the person ceases to be a member of the Board. The DSUs do not have voting rights.

Equity Compensation

Our non-employee directors receive a deferred stock award pursuant to the Rent-A-Center, Inc. 2016 Long-Term Incentive Plan (the “2016 Plan”) on the first business day of each year. Each deferred stock award consists of the right to receive shares of our common stock and is fully vested upon issuance. The shares covered by the award will be issued upon the termination of the director’s service as a member of the Board. All of our non-employee directors serving on January 2, 2018, the first business day of 2018, were granted deferred stock units valued at $100,000 on that date.

The annual deferred stock award to our non-employee directors for 2019 was valued at $120,000. The Board adopted this change to the value of the equity compensation paid to our non-employee directors based on input from Hay Group in March 2019. In addition, the deferred stock award for 2019 was granted on April 1, 2019, following the ruling by the Court of Chancery of the State of Delaware that we validly terminated the Agreement and Plan of Merger entered into on June 17, 2018 with certain affiliates of Vintage Capital Management, LLC.


RENT-A-CENTER - 2019 Proxy Statement		11

DIRECTOR COMPENSATION

Director Equity Interest Guideline

Our Board has adopted a guideline encouraging each non-employee member of the Board to hold at least $200,000 in our common stock and/or the deferred stock units issued as compensation for Board service (based on the price per share on the date or dates of such acquisition) within 5 years of the later of (i) December 23, 2008, or (ii) the date of their original election or appointment to the Board, and to hold such equity interest for so long as such member continues as a director. Mr. Gade has met the foregoing guideline. Messrs Brown, Fadel and Hetrick were elected to the Board in June 2017.

The following table sets forth certain information regarding the compensation of our non-employee directors during 2018:

Director Compensation for 2018


Name	Fees Earned or Paid in Cash ⁽¹⁾		Deferred Stock Award ⁽²⁾		Total
Jeffrey J. Brown	$	84,500	$	158,333	$	242,833
Michael J. Gade	$	78,500	$	100,000	$	178,500
Rishi Garg ⁽³⁾	$	35,000	$	100,000	$	135,000
Christopher B. Hetrick	$	79,000	$	158,333	$	237,333
J.V. Lentell	$	155,500	$	100,000	$	255,500

(1)

Includes annual retainer, committee fees and meeting attendance fees paid to each non-employee director with respect to services rendered in 2018.

(2)

The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note M to our consolidated financial statements for the year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the SEC on March 1, 2019. On January 2, 2018, each then current non-employee director was granted 9,010 deferred stock units. Also on January 2, 2018, each of Messrs. Brown and Hetrick were granted an additional 5,255 deferred stock units valued at $58,333, representing the pro-rata portion of the 2017 award value (Messrs. Brown and Hetrick were elected to the Board at the Company’s 2017 annual meeting of stockholders). Each deferred stock unit represents the right to receive one share of our common stock. The deferred stock units are fully vested and non-forfeitable. The common stock will be issued to the director upon the termination of his service as a member of our Board.

(3)

Mr. Garg’s term ended at the Company’s 2018 annual meeting of stockholders.


	12			RENT-A-CENTER - 2019 Proxy Statement

CORPORATE GOVERNANCE

General

Our Board has established corporate governance practices designed to serve the best interests of our company and our stockholders. In this regard, our Board has, among other things, adopted:

•

a code of business conduct and ethics applicable to all of our Board members, as well as all of our employees, including our Chief Executive Officer, Chief Financial Officer, our principal accounting officer and controller;

•

procedures regarding stockholder communications with our Board and its committees;

•

separation of the Chairman and Chief Executive Officer roles;

•

a majority voting standard in non-contested elections for directors;

•

a policy for the submission of complaints or concerns relating to accounting, internal accounting controls or auditing matters;

•

provisions in our Bylaws regarding director candidate nominations and other proposals by stockholders; and

•

written charters for its Audit & Risk Committee, Compensation Committee, and Nominating and Corporate Governance Committee.

Our Board intends to monitor developing standards in the corporate governance area and, if appropriate, modify our policies and procedures with respect to such standards. In addition, our Board will continue to review and modify our policies and procedures as appropriate to comply with any new requirements of the SEC or Nasdaq.

Code of Business Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics applicable to all of the members of the Board, as well as all of our employees, including our Chief Executive Officer, Chief Financial Officer, our principal accounting officer and controller. A copy of this Code of Business Conduct and Ethics is published in the

“Corporate Governance” section of the “Investor Relations” section of our website at www.rentacenter.com. We intend to make all required disclosures concerning any amendments to, or waivers from, this Code of Business Conduct and Ethics on our website.

Stockholder Communications with the Board

Our Board has established a process by which stockholders may communicate with our Board. Stockholders may contact the Board or any committee of the Board by any one of the following methods:

LOGO

By telephone:

972-624-6210

LOGO

By mail:

Rent-A-Center, Inc.

Attn: Compliance Officer

5501 Headquarters Drive

Plano, TX 75024

LOGO

By e-mail:

RAC.Board@rentacenter.com

Procedures for Reporting Accounting Concerns

The Audit & Risk Committee has established procedures for (1) the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and (2) the submission by our employees, on a confidential and anonymous basis, of concerns regarding questionable accounting or auditing matters. These procedures are posted in the “Corporate Governance” section of the “Investor Relations” section of our website at www.rentacenter.com.


RENT-A-CENTER - 2019 Proxy Statement		13

CORPORATE GOVERNANCE

Director Nominations

Director Nominees

Under our Bylaws, only persons who are nominated in accordance with the procedures set forth in our Bylaws are eligible for election as, and to serve as, members of our Board. Under our Bylaws, nominations of persons for election to our Board may be made at a meeting of our stockholders (1) by or at the direction of our Board or (2) by any stockholder, provided they comply with the provisions of Article I, Sections 3 and 4 of our Bylaws. The Board has delegated the screening and recruitment process for Board members to the Nominating and Corporate Governance

Committee. The Nominating and Corporate Governance Committee selects individuals it believes are qualified to be members of the Board, and recommends those individuals to the Board for nomination for election or re-election as directors. From time to time, the Nominating and Corporate Governance Committee may engage a consultant to conduct a search to identify qualified candidates. The Nominating and Corporate Governance Committee then undertakes the evaluation process described below for any candidates so identified.

Qualifications

The Nominating and Corporate Governance Committee believes that the minimum requirements for a person to be qualified to be a member of the Board are that a person must be committed to equal opportunity employment, and must not be a director, consultant, or employee of or to any competitor of ours (i.e., a company in the rent-to-own business). The Nominating and Corporate Governance Committee also believes that members of the Board should possess character, judgment, skills (such as an understanding of the retail and rent-to-own industries, business management, finance, accounting, marketing, operations and strategic planning), diversity, and experience with businesses and other organizations of a comparable size and industry. In addition, the Nominating and Corporate Governance Committee considers the composition of the current Board and the Board’s needs when evaluating the experience and qualification of director candidates. The Nominating and Corporate Governance Committee evaluates whether certain individuals possess the foregoing qualities and

recommends to the Board candidates for nomination to serve as our directors. This process is the same regardless of whether the nominee is recommended by one of our stockholders.

As noted above, our Nominating and Corporate Governance Committee believes that diversity is one of many attributes to be considered when selecting candidates for nomination to serve as one of our directors. In general, our Nominating and Corporate Governance Committee’s goal in selecting directors for nomination to our Board is to create a well-balanced team that (1) combines diverse business and industry experience, skill sets and other leadership qualities, (2) represents diverse viewpoints and (3) enables us to pursue our strategic objectives. While the Nominating and Corporate Governance Committee carefully considers diversity when evaluating nominees for director, the Nominating and Corporate Governance Committee has not established a formal policy regarding diversity in identifying director nominees.

Advance Resignation Policy

As a condition to nomination by the Nominating and Corporate Governance Committee of an incumbent director, a nominee shall submit an irrevocable offer of resignation to the Board, which resignation shall become effective in the event that (a) such nominee is proposed for reelection and is not reelected at a

meeting of the stockholders in which majority voting applies and (b) the resignation is accepted by the Board by the vote of a majority of the directors, not including any director who has not been reelected.

Stockholder Nominations

In addition to nominees by or at the direction of our Board, the Nominating and Corporate Governance Committee will consider candidates for nomination proposed by a stockholder, so long as the stockholder provides notice and information on the proposed nominee to the Nominating and Corporate Governance Committee through the Secretary in accordance with the provisions of Article I, Sections 3 and 4 of our Bylaws relating to direct stockholder nominations.

For the Nominating and Corporate Governance Committee to consider candidates recommended by a stockholder, Article I, Section 3 of our Bylaws requires that the stockholder provide notice to our Secretary (1) not less than 90 nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders, or (2) with respect to an election to be held at a special meeting of stockholders for the election of directors, no earlier than 120 days prior to the date of such special meeting, nor later than the close of business on the later to occur of the 90 ^th day prior to the date of such special meeting or the


	14			RENT-A-CENTER - 2019 Proxy Statement

CORPORATE GOVERNANCE

10 ^th day following the day on which public disclosure of the date of the special meeting was made (if the first public announcement of the date of the special meeting is less than 100 days prior to the date of the special meeting). The notice to our Secretary must set forth, among other things:

•

the name & address of the stockholder and/or beneficial owner making such nomination;

•

class & number of shares of capital stock owned, directly or indirectly, beneficially or of record by such stockholder and/or beneficial owner;

•

any derivative interests held by such stockholder and/or beneficial owner;

•

proxy or voting agreements to which such stockholder and/or beneficial owner may vote any shares of any of our securities;

•

short interest position of such stockholder and/or beneficial owner, if any;

•

dividend rights to which such stockholder and/or beneficial owner are entitled, if separable;

•

proportionate interests of such stockholder and/or beneficial owner arising out of partnership arrangements;

•

performance related fees to which such stockholder and/or beneficial owner is entitled based on the increase or decrease in the value of such shares or derivative instrument;

•

with respect to each proposed stockholder nominee, information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serve as a director if elected); and

•

with respect to each proposed stockholder nominee, a description of any compensatory and other material agreements among the nominating stockholder/beneficial owner, its affiliates and associates, and the proposed nominee.

In addition, to be timely, a stockholder’s notice shall further be updated and supplemented, if necessary, so that the information provided or required to be provided in such notice shall be correct as of the record date for the meeting and as of the date that is 10 business days prior to the meeting, and such update and supplement must be delivered to our Secretary not later than 5 business days after the record date for the meeting in the case of the update and supplement required to be made as of the record date, and not later than 8 business days prior to the date for the meeting in the case of the update and supplement required to be made as of 10 business days prior to the meeting. In addition, as to each person whom the stockholder proposes to nominate for election or re-election as a director, the following information must be provided to our Secretary in accordance with the time period prescribed for the notice to our Secretary described above:

•

a questionnaire furnished by our Secretary and completed by the proposed nominee; and

•

the representation and agreement of the proposed nominee regarding no voting agreements, non-disclosed compensation arrangements, and compliance upon election with our governance policies and guidelines.

The above description of the requirements that stockholders must comply with when recommending candidates for our Board is a summary only, and stockholders interested in nominating candidates to our Board are encouraged to closely review our Bylaws.

Director Attendance at Annual Meeting of Stockholders

Our Board has adopted a policy stating that each member of the Board should attend our annual meeting of stockholders. All of our directors then serving as directors attended the Company’s 2018 annual meeting of stockholders.


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PROPOSAL TWO:		RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit & Risk Committee has currently selected KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019. Our Board has further directed that we submit the selection of our independent registered public accounting firm for ratification by our stockholders at the 2019 Annual Meeting.

The Audit & Risk Committee reviews and pre-approves both audit and all permissible non-audit services provided by our independent registered public accounting firm, and accordingly, all services and fees in 2018 and 2017 provided by KPMG were pre-approved by the Audit & Risk Committee. The Audit & Risk Committee has considered whether the provision of services, other than services rendered in connection with the audit of our annual financial statements, is compatible with maintaining KPMG’s independence. The Audit & Risk Committee has determined that the rendering of non-audit services by KPMG during the years ended December 31, 2018 and 2017, was compatible with maintaining such firm’s independence.

Stockholder ratification of the selection of KPMG as our current independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board is submitting the selection of KPMG to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit & Risk Committee will reconsider whether or

not to continue the retention of KPMG. Even if the selection is ratified, the Audit & Risk Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in our best interests and those of our stockholders.

The Audit & Risk Committee annually reviews the performance of our independent registered public accounting firm and the fees charged for their services. In addition, earlier this year, the Company initiated a request for proposal process to evaluate independent registered public accounting firms that may be able to serve as the Company’s audit firm in the future. Based upon the Audit & Risk Committee’s analysis of this information, the Audit & Risk Committee will determine which registered independent public accounting firm to engage to perform our annual audit for the fiscal year ended December 31, 2019.

Representatives of KPMG will attend the 2019 Annual Meeting, will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions from stockholders.

Our Board recommends that you vote “FOR” the proposal to ratify the current selection of KPMG LLP as our independent registered public accounting firm.

Principal Accountant Fees and Services

The aggregate fees billed by KPMG LLP for the years ended December 31, 2018 and December 31, 2017, for the professional services described below are as follows:


	2018		2017
Audit Fees ¹	$	1,978,085	$	1,890,000
Audit-Related Fees ²	$	0	$	82,200
Tax Fees ³	$	66,387	$	81,795
All Other Fees ⁴	$	4,500	$	0

(1)

Represents the aggregate fees billed by KPMG for (a) professional services rendered for the audit of our annual financial statements for the years ended December 31, 2018 and December 31, 2017, (b) the audit of management’s assessment of the effectiveness of our internal controls over financial reporting as of December 31, 2018 and December 31, 2017, and (c) reviews of the financial statements included in our Forms 10-Q filed with the SEC.

(2)

Represents the aggregate fees billed by KPMG for 2017 for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under the caption “Audit Fees.”

(3)

Represents the aggregate fees billed by KPMG for professional services rendered for tax compliance, tax advice and tax planning. These services comprise engagements related to federal research tax credits and international tax advice and planning.

(4)

Represents the aggregate fees billed by KPMG for executive leadership training program.


	16			RENT-A-CENTER - 2019 Proxy Statement

AUDIT COMMITTEE REPORT

In accordance with its written charter adopted by the Board, the Audit & Risk Committee assists the Board in fulfilling its oversight responsibilities by, among other things, reviewing the financial reports and other financial information provided by the Company to any governmental body or the public.

In discharging its oversight responsibilities, the Audit & Risk Committee obtained from the independent registered public accounting firm a formal written statement describing all relationships between the firm and the Company that might bear on the auditors’ independence consistent with the applicable requirements of the Public Company Accounting Standards Board, discussed with the independent auditors any relationships that may impact their objectivity and independence, and satisfied itself as to the auditors’ independence. The Audit & Risk Committee also discussed with management, the internal auditors and the independent auditors the integrity of the Company’s financial reporting processes, including the Company’s internal accounting systems and controls, and reviewed with management and the independent auditors the Company’s significant accounting principles and financial reporting issues, including judgments made in connection with the preparation of the Company’s financial statements. The Audit & Risk Committee also reviewed with the independent auditors their audit plans, audit scope and identification of audit risks.

The Audit & Risk Committee discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees , as adopted by the Public Company Accounting Oversight Board, and, with and without management present, discussed and reviewed the results of the independent auditors’ examination of the consolidated financial statements of the Company.

The Audit & Risk Committee reviewed and discussed the audited consolidated financial statements of the Company as of and for the year ended December 31, 2018 with management and the independent auditors. Management is responsible for the

Company’s financial reporting process, including its system of internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act), and for the preparation of the Company’s consolidated financial statements in accordance with generally accepted accounting principles. The independent auditor is responsible for auditing those financial statements, and expressing an opinion on the effectiveness of internal control over financial reporting. The Audit & Risk Committee’s responsibility is to monitor and review these processes. The members of the Audit & Risk Committee are “independent” as defined by SEC and Nasdaq rules, and our Board has determined that Mr. Jeffrey J. Brown is an “audit committee financial expert” as defined by SEC rules.

The Audit & Risk Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits, including internal control testing under Section 404 of the Sarbanes-Oxley Act. The Audit & Risk Committee periodically meets with the Company’s internal and independent auditors, with and without management present, and in private sessions with members of senior management to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. The Audit & Risk Committee also periodically meets in executive session.

In reliance on the reviews and discussions referred to above, the Audit & Risk Committee recommended to the Board (and the Board subsequently approved the recommendation) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, for filing with the SEC.

AUDIT & RISK COMMITTEE

Jeffrey J. Brown, Chairman

Michael J. Gade

Christopher B. Hetrick


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EXECUTIVE OFFICERS

The Board appoints our executive officers at the first Board meeting following our annual stockholders meeting and updates the executive officer positions as needed throughout the year. Each executive officer serves at the behest of the Board and until their successors are appointed, or until the earlier of their death, resignation or removal.

The following table sets forth certain information with respect to our executive officers as of the date of this proxy statement:


Name	Age		Position
Mitchell E. Fadel		61	Chief Executive Officer
Maureen B. Short		44	Executive Vice President — Chief Financial Officer
Ann L. Davids		50	Executive Vice President — Chief Marketing Officer
Christopher A. Korst		59	Executive Vice President — General Counsel
Catherine M. Skula		47	Executive Vice President — Franchising

Mitchell E. Fadel . Mr. Fadel has served as one of our directors since June 2017 and was named Chief Executive Officer on January 2, 2018. Mr. Fadel was self-employed prior to joining the Company after most recently serving as President — U.S. Pawn for EZCORP, Inc., a leading provider of pawn loans in the United States and Mexico, from September 2015 to December 2016. Prior to that, Mr. Fadel served as President of the Company (beginning in July 2000) and Chief Operating Officer (beginning in December 2002) each until August 2015, and also as a director of the Company from December 2000 to November 2013. From 1992 until 2000, Mr. Fadel served as President and Chief Executive Officer of the Company’s subsidiary Rent-A-Center Franchising International, Inc. f/k/a ColorTyme, Inc. Mr. Fadel’s professional experience with the Company also includes previously serving as a Regional Director and a District Manager.

Maureen B. Short . Ms. Short was named Executive Vice President — Chief Financial Officer on December 19, 2018. Ms. Short previously served as Interim Chief Financial Officer effective from December 2016 until December 2018, Senior Vice President — Finance, Investor Relations and Treasury from November 2014 until December 2016, as Senior Vice President — Finance, Analytics and Reporting from March 2013 until November 2014, and as Vice President — Finance, Analytics and Reporting from August 2010 until March 2013.

Ann L. Davids . Ms. Davids was named Executive Vice President — Chief Marketing Officer effective as of February 21, 2018.

Ms. Davids served as Senior Vice President — Chief Marketing Officer for Direct General/National General Insurance from 2013 to 2018 with responsibility for the web channel development as well as marketing strategy and execution. Prior to 2013, Ms. Davids served as our chief marketing officer for 15 years.

Christopher A. Korst . Mr. Korst has served as Executive Vice President — General Counsel since March 2019, after previously serving as Executive Vice President — Chief Administrative Officer and General Counsel from July 2014 to March 2019, and Executive Vice President — Chief Administrative Officer from January 1, 2014 to July 2014. Previously, Mr. Korst served as Executive Vice President — Domestic Operations from May 2012 to December 2013, as our Executive Vice President — Operations from January 2008 until April 2012, and as our Senior Vice President — General Counsel from May 2001 to January 2008. Mr. Korst also served as our Secretary from September 2004 until January 2008. From January 2000 until May 2001, Mr. Korst owned and operated AdvantEdge Quality Cars, which he acquired in a management buyout.

Catherine M. Skula . Ms. Skula was appointed Executive Vice President — Franchising effective as of January 1, 2018, after previously serving as Senior Vice President — Franchising since January 2012. From August 2009 to January 2012, Ms. Skula served as Division Vice President — RTO Domestic. Ms. Skula began her employment with us in 1994 as a customer account representative.


	18			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management and, based upon such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement on Schedule 14A related to the 2019 Annual Meeting of Stockholders, for filing with the SEC.

COMPENSATION COMMITTEE

Christopher B. Hetrick, Chairman

Jeffery J. Brown

Michael J. Gade

COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation Program Objectives

Decisions with respect to compensation of our executive officers, including our Chief Executive Officer and other named executive officers, are made by our Compensation Committee, which is comprised solely of independent directors. Our Compensation Committee has identified four primary objectives for our executive compensation program, which guide the decisions it makes with respect to the amount and type of compensation paid to our named executive officers. The objectives of our executive compensation program are to:

•

attract, retain and motivate senior executives with competitive compensation opportunities;

•

balance short-term and long-term strategic goals;

•

align our executive compensation program with the core values identified in our mission statement, which focuses on improving the quality of life for our co-workers and our customers; and

•

reward achievement of our financial and non-financial goals.

The compensation philosophy is generally to target total direct compensation (base salary, annual incentive and long-term incentive compensation) at the 50 ^th -75 ^th percentile of that paid at similarly-situated public companies in the retail and consumer finance sector, with cash compensation (base salary and annual incentives) targeted at the 50 ^th percentile, and long-term incentive compensation targeted at the 75 ^th percentile.

Executive Summary

We are committed to a pay-for-performance culture. The compensation program is reviewed annually in order to assure that its objectives and components are aligned with the Company’s strategic goals and culture, and also that it incentivizes short- and long-term profitability.

Pay for Performance

incentive program received an amount equal to 186% of such person’s target bonus amount.

In 2016, our Compensation Committee granted to our named executive officers performance-based restricted stock units based on our relative TSR as compared to the S&P 1500 Specialty Retail Index over a three-year measurement period. Our relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the three-year period ending December 31, 2018, ranked us 32 out of 56 companies in the S&P 1500 Specialty Retail Index, or the 44th percentile, which resulted in the vesting of 75% of the performance-based restricted stock units that were granted.


RENT-A-CENTER - 2019 Proxy Statement		19

COMPENSATION DISCUSSION AND ANALYSIS

Stockholder Advisory Vote

In June 2018, we held a stockholder advisory vote on the compensation of our named executive officers, referred to as a say-on-pay vote. Our stockholders approved the compensation of our named executive officers, with 78% of the shares of common stock present and entitled to vote at the meeting cast in favor of our proposal. This level of support was significantly less than in previous years (94.4% in 2017; 98.5% in 2016, and 98.6% in 2015) and was affected by a negative recommendation from Institutional Shareholder Services (ISS). ISS based its negative recommendation solely on a provision of the employment agreement we entered into with our new Chief Executive Officer in March 2018 (a single-trigger cash change in control payment which the Board deemed necessary given the Company’s then on-going strategic alternatives review process).

In April 2019, the employment agreement with Mr. Fadel was revised to eliminate the single-trigger cash change in control payment and adopting, instead, a double-trigger cash change in control payment structure. Compensation decisions and changes implemented during the 2018 fiscal year were made keeping in mind the support stockholders expressed for our compensation philosophy and pay-for-performance culture. As a result, our Compensation Committee kept most facets of the executive compensation program consistent, with an emphasis on short and long-term incentive compensation that rewards our executives upon value creation for our stockholders.

Compensation Process

The Compensation Committee typically begins the process of determining the amount and mix of total compensation to be paid to our senior executives, including our named executive officers, in December of each year and finalizes the amounts the following January. This enables the Compensation Committee to examine and consider our performance during the previous year in establishing the current year’s compensation.

The Compensation Committee retains a compensation consultant to assist it with compensation decisions for the upcoming fiscal year. For the 2018 fiscal year, the Compensation Committee engaged Hay Group to conduct a formal evaluation of, and advise it with respect to, the compensation arrangements for our Chief Executive Officer, as well as provide guidance with respect to the compensation of our senior executives, including our other named

executive officers. In determining whether to engage Hay Group to provide such services, the Compensation Committee considered whether such engagement would create any conflicts of interest and determined that the engagement of Hay Group by the Company to advise it with respect to compensation to be paid to our senior executive management for 2018 did not create any such conflicts. Hay Group was engaged directly by the Compensation Committee and has performed no other services to us or any of our executive officers or directors.

Based on the work performed by Hay Group, the Compensation Committee determined that the following similarly-situated public companies (the “Peer Group”) provided an appropriate comparison for the purpose of evaluating our compensation arrangements for our senior executives:



Aaron’s, Inc.	Big Lots Inc.	Brinker International Inc.	Conn’s

Fred’s, Inc.	H&R Block, Inc.	Michaels Stores, Inc.	OneMain Holdings

Pier 1 Imports, Inc.	Sally Beauty, Inc.	Sears Hometown & Outlet	Tractor Supply, Inc.

United Rental	Western Union

The following criteria were used to establish this Peer Group:

•

U.S.-based public companies with a similar business focus as ours, including both consumer finance and retail (particularly home furnishings, appliances and other retail organizations with which we compete for customers in a similar demographic);

•

Companies with revenue similar to us (generally 0.5 to 2.0 times our revenue) and annuitized revenue streams;

•

Geographic proximity; and

•

Competitors for executive talent.

After considering several companies for possible inclusion in the Peer Group, the Compensation Committee determined to make

no additions to the Peer Group. In the fall of 2017, the Compensation Committee approved the use of this Peer Group for use in connection with compensation decisions to be made for the 2018 fiscal year.

Finally, various members of the Compensation Committee have significant professional experience in the retail industry, as well as with respect to the executive compensation practices of large publicly-traded companies. This experience provides a frame of reference within which to evaluate our executive compensation program relative to general economic conditions and our progress in achieving our short-term and long-term goals.

Forms of Compensation

The following forms of compensation are currently utilized by the Compensation Committee in compensating our named executive officers:

•

base salary, which is paid in cash;

•

annual incentive compensation, which is paid in cash;


	20			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

•

long-term incentive compensation, which consists of stock options, restricted stock units, and performance stock units;

•

severance arrangements; and

•

fringe benefits, including perquisites, with no tax gross-ups.

Base Salary

The base salary for each of our named executive officers represents the guaranteed portion of their total compensation and is determined annually by the Compensation Committee. Base salary is intended to reward the performance of each named executive officer during the fiscal year relative to his position with us. In establishing the base salary for each of our named executive officers, the Compensation Committee reviews:

•

the named executive officer’s historical performance in his position with us, including the financial performance within his or her area of responsibility and other factors;

•

recommendations of the Chief Executive Officer as to the proposed base salary (other than his own);

•

our financial performance; and

•

market pay practices.

At the beginning of each year, the Compensation Committee considers whether adjustments should be made to the annual base salaries for our named executive officers. During the Compensation Committee’s review of the then-current base

salaries, the Compensation Committee primarily considers market data, input provided by our Human Resources department, input of the Chief Executive Officer (other than with respect to his own base salary), individual performance, our financial performance, the experience of the named executive officer, and each named executive officer’s compensation in relation to our other executive officers.

After considering our financial performance in 2017, the Compensation Committee made no changes to the base salaries for each of our named executive officers for 2018, except with respect to Mr. Herman whose base salary was increased in connection with his assumption of additional duties as Interim Chief Information Officer in December 2017, and his subsequent appointment as Chief Information Officer. Mr. Fadel’s base salary for 2018 was determined by the Board in connection with Mr. Fadel’s appointment as Chief Executive Officer effective as of January 2, 2018. The Compensation Committee approved the following base salaries of the named executive officers for 2017 and 2018 as set forth in the table below. The base salary adjustments for 2018 were effective March 31, 2018.

ANNUAL BASE SALARIES


Name	2016 Base Salary		2017 Base Salary		2018 Base Salary

Mitchell E. Fadel ⁽¹⁾	$	—	$	—	$	800,000

Maureen B. Short ⁽²⁾	$	259,584	$	362,000	$	362,000

Fred E. Herman ⁽³⁾	$	302,357	$	302,357	$	355,000

Christopher A. Korst	$	438,677	$	438,677	$	438,677

Catherine M. Skula ⁽⁴⁾	$	—	$	—	$	325,338

(1)

Mr. Fadel was named Chief Executive Officer effective as of January 2, 2018.

(2)

Ms. Short was named Interim Chief Financial Officer effective as of December 2, 2016, with a base salary of $362,000. Ms. Short was named Chief Financial Officer effective as of December 19, 2018.

(3)

Mr. Herman resigned as Executive Vice President – Chief Information Officer effective as of February 7, 2019.

(4)

Ms. Skula was named Executive Vice President – Franchising effective as of January 2, 2018.

Annual Cash Incentive Compensation

The Compensation Committee maintains an annual incentive compensation program for our executive officers that provides for awards in the form of a cash bonus. The Compensation Committee believes that cash bonuses are appropriate to promote our interests as well as those of our stockholders by providing our named executive officers with short-term financial rewards based upon achievement of specified short-term objectives, which the Compensation Committee believes will ultimately increase the value of our stock, as well as help us attract and retain our named executive officers by providing attractive compensation opportunities.

Our named executive officers participate in our annual cash incentive program. Under our annual cash incentive program, cash bonus eligibility is established at a pre-determined

percentage of the named executive officer’s base salary, with such percentage amount set in accordance with the eligible named executive officer’s position and responsibilities with us. The percentage allocated as well as the potential ultimate payouts pursuant to our annual cash incentive program for each year are typically approved by the Compensation Committee in February at the same time that all compensation for our named executive officers is reviewed and, if applicable, approved. This enables the Compensation Committee to examine the named executive officer’s performance during the previous year, as well as determine financial performance targets for the new fiscal year based in part upon the previous year’s performance. No changes to the eligible bonus percentages for our named executive officers were made for the 2018 annual cash incentive program.


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COMPENSATION DISCUSSION AND ANALYSIS

The annual cash incentive program for 2018 included three financial performance metrics: EBITDA, cash flow and corporate revenue. The Compensation Committee included an EBITDA target in the annual cash incentive program because it believes EBITDA generally represents an accurate indicator of our financial performance over a one-year period of time, while excluding the impact of interest and depreciation which can vary significantly. The Compensation Committee determined to include a cash flow target as one of the financial performance metrics comprising the 2018 annual cash incentive program to align with our strategy for 2018. The inclusion of the corporate revenue target in the annual cash incentive program reflects the Compensation Committee’s determination that although a substantial portion of the cash bonus opportunity should be dependent on our profitability, a portion of such cash bonus opportunity should be based on our revenue growth. Accordingly, the potential annual incentive award for each of our named executive officers for the 2018 annual cash incentive program was divided as follows: 40% EBITDA; 40% cash flow and 20% revenue.

The financial performance targets for the 2018 annual cash incentive program were established in February 2018 following a

review of our financial projections developed pursuant to our strategic plan and objectives for 2018. Based upon that review, the Compensation Committee established the following targets for the 2018 annual cash incentive program: (1) a consolidated revenue target in the amount of $2,589.05 million, (2) a cash flow target in the amount of $150.57 million, and (3) an EBITDA target in the amount of $139.83 million. In setting the financial targets under the 2018 annual cash incentive program, the Compensation Committee considered (i) the level of achievement of the targets for the 2017 annual cash incentive program and (ii) the level of the Company’s anticipated investment in its strategic initiatives for 2018. The Compensation Committee further determined that, consistent with its views as to the financial performance measures for our annual cash incentive program, each eligible executive officer may receive (1) an additional bonus amount in the event that we exceed the financial performance targets for the fiscal year, and (2) a portion of the bonus in the event that we approach, yet fail to achieve, the target levels of financial performance, as set forth below:


Revenue Target ($M) - 20% Weighting					EBITDA Target ($M) - 40% Weighting								CASH FLOW Target ($M) - 40% Weighting
% of Target Achieved	Revenue Range		% of Incentive Awarded		% of Target Achieved	EBITDA Range		% of Incentive Awarded		% Flow Through Range			% of Target Achieved	Cash Flow Range		% of Incentive Awarded

Less than 92.0000%		< - $2,381.93		0%	Less than 69.9990%		< $97.88		0%			4.1%	Less than 79.9990%		< $120.45		0%

92.0000% - 92.4998%		$2,381.93 - $2,394.87		20%	70.0000% - 71.8700%		$97.89 - $100.49		20%		4.1%	4.2%	80.0000% - 81.2490%		$120.46 - $122.33		20%

92.4999% - 92.9997%		$2,394.87 - $2,407.81		25%	71.8710% - 73.7410%		$100.50 - $103.11		25%		4.2%	4.3%	81.2500% - 82.4990%		$122.35 - $124.22		25%

92.9998% - 93.4996%		$2,407.81 - $2,420.75		30%	73.7420% - 75.6120%		$103.12 - $105.73		30%		4.3%	4.4%	82.5000% - 83.7490%		$124.23 - $126.10		30%

93.4997% - 93.9995%		$2,420.76 - $2,433.69		35%	75.6130% - 77.4830%		$105.74 - $108.35		35%		4.4%	4.5%	83.7500% - 84.9990%		$126.11 - $127.99		35%

93.9996% - 94.4994%		$2,433.70 - $2,446.64		40%	77.4840% - 79.3540%		$108.35 - $110.96		40%		4.5%	4.5%	85.0000% - 86.2490%		$127.99 - $129.87		40%

94.4995% - 94.9993%		$2,446.64 - $2,459.58		45%	79.3550% - 81.2250%		$110.97 - $113.58		45%		4.5%	4.6%	86.2500% - 87.4990%		$129.87 - $131.75		45%


94.9994% - 95.4992%		$2,459.59 - $2,472.52		50%	81.2260% - 83.0960%		$113.58 - $116.19		50%		4.6%	4.7%	87.5000% - 88.7490%		$131.76 - $133.63		50%

95.4993% - 95.9991%		$2,472.53 - $2,485.46		55%	83.0970% - 84.9670%		$116.20 - $118.81		55%		4.7%	4.8%	88.7500% - 89.9990%		$133.64 - $135.51		55%

95.9992% - 96.4990%		$2,485.47 - $2,498.41		60%	84.9680% - 86.8380%		$118.82 - $121.43		60%		4.8%	4.9%	90.0000% - 91.2490%		$135.52 - $137.40		60%

96.4991% - 96.9989%		$2,498.41 - $2,511.34		65%	86.8390% - 88.7090%		$121.43 - $124.04		65%		4.9%	4.9%	91.2500% - 92.4990%		$137.40 - $139.28		65%

96.9990% - 97.4988%		$2,511.36 - $2,524.29		70%	88.7100% - 90.5800%		$124.05 - $126.66		70%		4.9%	5.0%	92.5000% - 93.7490%		$139.29 - $141.16		70%

97.4989% - 97.9987%		$2,524.30 - $2,537.23		75%	90.5810% - 92.4510%		$126.67 - $129.27		75%		5.0%	5.1%	93.7500% - 94.9990%		$141.17 - $143.04		75%

97.9988% - 98.4986%		$2,537.24 - $2,550.18		80%	92.4520% - 94.3220%		$129.28 - $131.89		80%		5.1%	5.2%	95.0000% - 96.2490%		$143.05 - $144.92		80%

98.4987% - 98.9985%		$2,550.19 - $2,563.12		85%	94.3230% - 96.1930%		$131.90 - $134.50		85%		5.2%	5.2%	96.2500% - 97.4990%		$144.93 - $146.80		85%

98.9986% - 99.4984%		$2,563.13 - $2,576.06		90%	96.1940% - 98.0640%		$134.51 - $137.12		90%		5.2%	5.3%	97.5000% - 98.7490%		$146.81 - $148.68		90%

99.4985% - 99.9999%		$2,576.07 - $2,589.04		95%	98.0650% - 99.9990%		$137.13 - $139.83		95%		5.3%	5.4%	98.7500% - 99.9990%		$148.70 - $150.57		95%

100.0000% - 100.5711%		$2,589.05 - $2,603.84		100%	100.0000% - 102.1420%		$139.84 - $142.82		100%		5.4%	5.5%	100.0000% - 101.4280%		$150.58 - $152.72		100%

100.5712% - 101.1424%		$2,603.84 - $2,618.62		107%	102.1430% - 104.2850%		$142.83 - $145.82		107%		5.5%	5.6%	101.4290% - 102.8570%		$152.73 - $154.87		107%

101.1425% - 101.7139%		$2,618.64 - $2,633.42		114%	104.2860% - 106.4280%		$145.83 - $148.82		114%		5.6%	5.7%	102.8580% - 104.2860%		$154.88 - $157.02		114%

101.7140% - 102.2855%		$2,633.43 - $2,648.22		121%	106.4290% - 108.5710%		$148.83 - $151.81		121%		5.7%	5.7%	104.2870% - 105.7150%		$157.03 - $159.17		121%

102.2856% - 102.8570%		$2,648.22 - $2,663.01		129%	108.5720% - 110.7140%		$151.82 - $154.81		129%		5.7%	5.8%	105.7160% - 107.1440%		$159.19 - $161.33		129%

102.8571% - 103.4285%		$2,663.02 - $2,677.81		136%	110.7150% - 112.8570%		$154.82 - $157.80		136%		5.8%	5.9%	107.1450% - 108.5730%		$161.34 - $163.48		136%

103.4286% - 104.0000%		$2,677.82 - $2,692.61		143%	112.8580% - 115.0000%		$157.82 - $160.80		143%		5.9%	6.0%	108.5740% - 110.0020%		$163.49 - $165.63		143%

104.0001% - 104.5715%		$2,692.61 - $2,707.40		150%	115.0010% - 117.1430%		$160.81 - $163.80		150%		6.0%	6.1%	110.0030% - 111.4310%		$165.64 - $167.78		150%

104.5716% - 105.1430%		$2,707.42 - $2,722.20		157%	117.1440% - 119.2860%		$163.81 - $166.79		157%		6.1%	6.1%	111.4320% - 112.8600%		$167.79 - $169.93		157%

105.1431% - 105.7145%		$2,722.21 - $2,737.00		164%	119.2870% - 121.4290%		$166.81 - $169.79		164%		6.1%	6.2%	112.8610% - 114.2890%		$169.94 - $172.08		164%

105.7146% - 106.2860%		$2,737.01 - $2,751.79		171%	121.4300% - 123.5720%		$169.80 - $172.79		171%		6.2%	6.3%	114.2900% - 115.7180%		$172.10 - $174.24		171%

106.2861% - 106.8575%		$2,751.81 - $2,766.59		179%	123.5730% - 125.7150%		$172.80 - $175.78		179%		6.3%	6.4%	115.7190% - 117.1470%		$174.25 - $176.39		179%

106.8576% - 107.4290%		$2,766.60 - $2,781.39		186%	125.7160% - 127.8580%		$175.80 - $178.78		186%		6.4%	6.4%	117.1480% - 118.5760%		$176.40 - $178.54		186%

107.4291% - 107.9985%		$2,781.40 - $2,796.14		193%	127.8590% - 130.0010%		$178.79 - $181.78		193%		6.4%	6.5%	118.5770% - 120.0050%		$178.55 - $180.69		193%

108.0000% or greater		$2,796.18 - $ -		200%	130.0020% or greater		$181.79 - $ -		200%		6.5%		120.0060% - 00.0000%		$180.70 - $ -		200%

Revenue Target		$2,589.05			EBITDA Target		$139.83						Cash Flow Target		$150.57

*	*EBITDA is adjusted for the accrued bonus (FSC, DVPs) totaling $8.1M*


	22			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

In February 2019, the Compensation Committee determined the level of achievement of the revenue, cash flow and EBITDA targets as previously set by it with respect to the 2018 annual cash incentive program. The Compensation Committee reviewed the Company’s adjusted financial results for the fiscal year ended December 31, 2018, and determined that the Company’s (i) revenue for purposes of the 2018 annual cash incentive program was equal to $2,660 million, (ii) EBITDA for purposes of the 2018 annual cash incentive program was equal to $198 million and (iii) cash flow for purposes of the 2018 annual cash incentive program was equal to $237 million. Accordingly, for the 2018 annual cash incentive program, (i) the EBITDA goal was achieved at 141.9% of target (resulting in a 200% payout of the 40% of the target bonus amounts attributable to the EBITDA

target), (ii) the cash flow target was achieved at 157.2% of target (resulting in a 200% payout of the 40% of the target bonus amounts attributable to the cash flow target, and (iii) the revenue goal was achieved at 102.8% of target (resulting in a 129% payout of the 20% of the target bonus amounts attributable to the revenue target). As a result, each participant in the 2018 annual cash incentive program received an amount equal to 186% of such person’s target bonus amount.

The actual amounts awarded to our named executive officers for their annual cash incentive bonus for 2018 performance are included in the Summary Compensation Table under the column “Non-Equity Incentive Plan Compensation” on page 26 of this proxy statement.

Long-Term Incentive Compensation

Our equity incentive plans are administered by the Compensation Committee and are designed to enable the Compensation Committee to provide incentive compensation to our employees in the form of stock options, stock awards, other equity awards, and performance-based equity awards. The Compensation Committee believes that awarding our named executive officers non-cash, long-term equity incentive compensation, primarily in the form of long-term incentive awards which may increase in value in conjunction with the satisfaction by us of pre-determined performance measures and/or an increase in the value of our common stock, more effectively aligns their interests with ours. The Compensation Committee also believes that such awards will provide our named executive officers with an incentive to remain in their positions with us, since the determination as to whether a particular measure for our performance and/or an increase in the value of our common stock has been satisfied is typically made over an extended period of time. In general, the Compensation Committee considers equity awards to our named executive officers on an annual basis, normally in February of each year.

Generally, long-term incentive awards are made to our named executive officers pursuant to the Rent-A-Center, Inc. 2016 Long-Term Incentive Plan (the “2016 Plan”). Previous long-term incentive awards were made to our named executive officers pursuant to (i) the Rent-A-Center, Inc. 2006 Long-Term Incentive Plan (the “2006 Plan”) and (ii) the Rent-A-Center, Inc. 2006 Equity Incentive Plan (the “Equity Plan”). Under the terms of each of the 2016 Plan, the 2006 Plan and the Equity Plan, awards may be granted at times and upon vesting and other conditions as determined by the Compensation Committee, and may be made in the form of stock options, stock awards, other equity awards, and performance-based equity awards. Stock option awards under our equity incentive plans are granted at the fair market value per share of our common stock on the date the option is granted as determined by reference to the closing price for shares of our common stock on the Nasdaq Global Select Market on the last market trading day prior to the date the option is granted. The options granted to our named executive officers typically vest ratably over a four-year period, commencing one year from the date of grant, and expire after 10 years.

The restricted stock units granted by our Compensation Committee cliff vest either after a set period of time or upon the

achievement of specified goals for our performance over a period of time. Awards of restricted stock with time-based vesting provide our named executive officers with a minimum level of value while also providing an additional incentive for such individuals to remain in their positions with us. Awards of restricted stock with performance-based vesting provide an additional incentive for our named executive officers to remain in their positions with us in order to realize the benefit of such award and also focus them on a performance parameter which the Compensation Committee considers beneficial to increasing the value of our stock, and consequently, stockholder value.

The Compensation Committee determines the timing of the annual grants of stock options and restricted stock units to our named executive officers as well as the terms and restrictions applicable to such grants. The Compensation Committee approves generally in February of each year the annual grant to our executive officers in conjunction with its review and determination of each executive officer’s compensation for the current year. Grants may also be made in connection with commencement of employment, promotions, or tenure.

2018 Long-term Incentive Compensation Awards. No changes to the aggregate amount of the long-term incentive compensation award as a percentage of base salary were made for our named executive officers for 2018. Consistent with prior years, the long-term incentive compensation awards for 2018 were comprised of three vehicles, with greater emphasis on the portion of the long-term incentive award which is contingent on financial performance. Accordingly, the award tranches are weighted as follows: (i) 20% of the value of the award issued in stock options, (ii) 20% of the value of the award issued in time-based restricted stock units and (iii) 60% of the value of the award issued in performance-based restricted stock units.

Adoption of Relative Total Shareholder Return as Performance Measure. In prior years, long-term incentive awards of restricted stock with performance-based vesting were contingent upon our achievement of a three-year EBITDA target. Beginning in 2015, the Compensation Committee adopted a relative total shareholder return metric over a three-year measurement period as the vesting condition for grants of performance stock units under our long-term incentive compensation program. The Compensation Committee made this decision in order to tie the


RENT-A-CENTER - 2019 Proxy Statement		23

COMPENSATION DISCUSSION AND ANALYSIS

external performance of our common stock to executive compensation and because the Compensation Committee believes that a relative measure is a more appropriate basis for measuring long-term performance than an absolute measure. The Compensation Committee also took into consideration the fact that our annual cash incentive program includes an EBITDA metric. The Compensation Committee selected a three-year period over which to measure relative total shareholder return based upon the time-period utilized with respect to awards made by similarly-situated public companies in the retail industry, as well as upon its belief that a three-year measurement period was appropriate to place an emphasis on our relative total shareholder return over an extended period of time, as opposed to the single

year measure which is utilized in our annual cash incentive program.

The Compensation Committee selected the S&P 1500 Specialty Retail Index as the comparator group for measuring our relative shareholder return over the applicable measurement period. In making this selection, the Compensation Committee considered the median annual revenue of the companies in the index in the amount of $3.8 billion, the inclusion in the index of four companies included in our Peer Group, and the representation of the overall retail environment by the index to determine that this index is comprised of the companies most similar to the Company and is an appropriate comparator group. The Compensation Committee adopted the following payout ranges applicable to the awards of performance-based restricted stock units:


Payout Chart								Payout%
RCII’s TSR Percentile Rank in the S&P 1500 Specialty Retail Index				RCII’s TSR Actual Rank in the S&P 1500 Specialty Retail Index ¹
>	<=			Low		High

90%		100	%		1		7		200	%

80%		89	%		8		13		175	%

70%		79	%		14		19		150	%

60%		69	%		20		25		125	%

50%		59	%		26		31		100	%

40%		49	%		32		38		75	%

30%		39	%		39		44		50	%

25%		29	%		45		47		25	%

0%		24	%		48		63		0	%

See the Grants of Plan-Based Awards table under the column “Estimated Possible Payouts Under Equity Incentive Plan Awards” on page 28 of this proxy statement for threshold, target, and maximum amounts payable to our named executive officers under the 2018 long-term incentive performance-based awards.

Determination of Long-term Incentive Compensation Awards. In January 2019, the Compensation Committee determined the level of achievement of the minimum TSR condition with respect to the long-term incentive performance-based awards made in January 2016, with a three-year measurement period. The Compensation

Committee reviewed the Company’s relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the period January 1, 2016 through December 31, 2018, and determined that our relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the three-year period ending December 31, 2018, ranked us 32 out of 56 companies in the S&P 1500 Specialty Retail Index, or the 44th percentile, which resulted in the vesting of 75% of the performance-based restricted stock units that were granted.

Severance Arrangements

We have executive transition agreements with our named executive officers to provide certain payments and benefits upon an involuntary termination of the named executive officer’s employment or the occurrence of certain other circumstances that may affect the named executive officer. The Compensation Committee believes that such severance arrangements assist us in recruiting and retaining top-level talent. In addition, formalizing our severance practices benefits us (1) by providing us with certainty in terms of our obligations to an eligible executive in the event that our

relationship with him or her is severed and (2) by virtue of the non-competition, non-solicitation and release provisions in our loyalty agreements, which inure to our benefit in the event that an eligible executive severs employment with us.

For a more detailed description of the severance arrangements which apply to our named executive officers, please see “Termination of Employment and Change-in-Control Arrangements” beginning on page 32 of this proxy statement.


	24			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Fringe Benefits and Perquisites

Our named executive officers are eligible to participate in the benefit plans generally available to all of our employees, which include health, dental, life insurance, vision and disability plans, all of which the Compensation Committee believes are commensurate with plans of other similarly situated public companies in the retail industry. In addition, we will pay for the cost of an executive physical examination for each named executive officer each year. Our named executive officers were eligible in 2018 to participate in our 401(k) Retirement Savings Plan and in the Rent-A-Center, Inc. Deferred Compensation Plan. The Deferred Compensation Plan allows our executive officers to defer tax liability on a portion of their compensation.

The Compensation Committee has determined it is beneficial to offer the above-described fringe benefits and perquisites in order to attract and retain our named executive officers by offering compensation opportunities that are competitive with those

offered by similarly-situated public companies in the retail industry. In determining the total compensation payable to our named executive officers for a given fiscal year, the Compensation Committee will examine such fringe benefits and perquisites in the context of the total compensation which our named executive officers are eligible to receive. However, given the fact that such fringe benefits and perquisites which are available to our named executive officers represent a relatively insignificant portion of their total compensation, the availability of such items does not materially influence the decisions made by the Compensation Committee with respect to other elements of the total compensation to which our named executive officers are entitled or awarded.

For a description of the fringe benefits and perquisites received by our named executive officers in 2018, please see “– All Other Compensation ” on page 27 of this proxy statement.

Clawback Policy

Our Board has adopted a compensation recovery (“clawback”) policy which provides that, in the event of a restatement of our financial results due to our material noncompliance with any financial reporting requirement under the U.S. federal securities laws, we may seek reimbursement of any portion of incentive compensation paid, vested, or awarded during the three-year period preceding the date on which we are required to prepare such a re-statement, which is in excess of the amount that would have been paid or awarded if calculated based on the restated financial results. Restatements of financial results that are the

direct result of changes in accounting standards will not result in recovery of performance-based or incentive compensation under this policy. This policy is intended to be administered in a manner consistent with any applicable rules, regulations or listing standards adopted by the SEC or The Nasdaq Global Select Market, Inc., as contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. We intend to revise our clawback policy to the extent we deem necessary to comply with such rules, regulations or listing standards.

Executive Stock Ownership Guidelines

We believe that our Chief Executive Officer should have a meaningful financial stake in the Company to ensure that his interests are aligned with those of our stockholders. To that end, the Board adopted equity ownership guidelines to define our expectations for our Chief Executive Officer. Under these

guidelines, our Chief Executive Officer is expected to own shares of our common stock equal in value to 5 times his annual base salary within five years of the date on which he became Chief Executive Officer. Mr. Fadel was named our Chief Executive Officer effective as of January 2, 2018.

Section 162(m)

Section 162(m) of the Internal Revenue Code (the “Code”) generally prohibits a federal income tax deduction to public companies for compensation over $1,000,000 paid to a “covered employee.” A “covered employee” includes (a) the Chief Executive Officer, (b) the Chief Financial Officer, (c) the three other most highly compensated executive officers, and (d) any individual who was a covered employee for any taxable year beginning after December 31, 2016. Prior to 2018, we were permitted to receive a federal income tax deduction for qualifying “performance-

based” compensation as defined under Code Section 162(m) without regard to this $1,000,000 limitation. Recent U.S. tax legislation eliminated the performance-based exception. The new tax legislation became effective starting in 2018. The Compensation Committee may determine it is appropriate to provide compensation that may exceed deductibility limits in order to recognize performance, meet market demands, retain key executives, and take into account other appropriate considerations.


RENT-A-CENTER - 2019 Proxy Statement		25

COMPENSATION DISCUSSION AND ANALYSIS

Summary of Compensation

The following table summarizes the compensation earned by our “named executive officers” in fiscal year 2018, as well as the compensation earned by such individuals in each of fiscal year 2017 and fiscal year 2016, if serving as an executive officer during that time. For 2018, our “named executive officers” consisted of the persons serving as Chief Executive Officer during any part of 2018, our Chief Financial Officer, and our three other most highly compensated executive officers. The table specifically identifies the dollar value of compensation related to 2018, 2017 and 2016 paid to such named executive officers in the form of:

•

base salary, paid in cash;

•

stock awards, comprised of awards of restricted stock relating to the 2018, 2017 and 2016 fiscal years;

•

option awards, comprised of awards of options during the 2018, 2017 and 2016 fiscal years and identified based upon the aggregate fair value in dollars of such award;

•

non-equity plan incentive plan compensation, listing the aggregate dollar value of the awards paid to our named executive officers; and

•

all other compensation, which includes amounts paid by us to the named executive officers as matching contributions under our Deferred Compensation Plan and insurance premiums.

Our named executive officers were not entitled to receive payments which would be characterized as “Bonus” payments for purposes of the Summary Compensation Table for 2018, 2017 and 2016.

Summary Compensation Table


Name and Principal Position	Year		Salary			Stock Awards ⁽¹⁾		Option Awards ⁽¹ ⁾		Non-Equity Incentive Plan Compensation ⁽²⁾		All Other Compensation ⁽³⁾		Total
Mitchell E. Fadel ⁽⁴⁾ Chief Executive Officer		2018	$	800,000		$	2,156,237	$	388,141	$	1,488,000	$	29,632	$	4,862,010
Mitchell E. Fadel ⁽⁴⁾ Chief Executive Officer
Maureen B. Short Executive Vice President - Chief Financial Officer		2018	$	362,000		$	292,711	$	52,690	$	302,994	$	30,444	$	1,040,839
		2017	$	362,000		$	300,662	$	54,299	$	16,290	$	26,831	$	760,082
		2016	$	267,462	⁵	$	235,675	$	38,938	$	0	$	20,857	$	562,932
Fred E. Herman Executive Vice President - Chief Information Officer		2018	$	355,000		$	325,327	$	58,561	$	330,150	$	35,301	$	1,104,339
		2017	$	324,981		$	279,740	$	51,401	$	17,750	$	63,811	$	737,683
		2016	$	302,357		$	311,115	$	51,400	$	0	$	23,091	$	687,963
Christopher A. Korst Executive Vice President - General Counsel		2018	$	438,677		$	425,650	$	76,622	$	448,767	$	38,476	$	1,428,192
		2017	$	438,677		$	429,743	$	78,963	$	24,127	$	32,405	$	1,003,915
		2016	$	438,677		$	477,933	$	78,963	$	0	$	31,980	$	1,027,553
Catherine M. Skula Executive Vice President - Chief Operating Officer		2018	$	325,338		$	298,139	$	91,669	$	302,564	$	40,547	$	1,058,257

(1)

The amounts reflected in this column are the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for each award of stock options or restricted stock in 2018, 2017 and 2016 to the applicable named executive officer. Assumptions used in the calculation of these amounts are included in Note N to our audited financial statements for our fiscal year ended December 31, 2018, included in our Annual Report on Form 10-K filed with the SEC on March 1, 2019, and our Annual Reports on Form 10-K for prior years.

(2)

Represents the cash bonuses which were payable under our annual cash incentive program with respect to services for the year indicated.

(3)

For 2018, represents the compensation as described in the “All Other Compensation” table below.

(4)

Mr. Fadel was named Chief Executive Officer effective as of January 2, 2018.

(5)

In connection with being named Interim Chief Financial Officer, Ms. Short’s base salary was increased to $362,000 annually as of December 5, 2016. Ms. Short was named Chief Financial Officer effective as of December 19, 2018.


	26			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

All Other Compensation

The following table provides information regarding each component of compensation for 2018 included in the All Other Compensation column in the Summary Compensation Table above.


Name	Company Matching Contributions ⁽¹⁾		Value of Insurance Premiums ⁽²⁾		Other ⁽³⁾		Total

Mitchell E. Fadel (4)	$	8,077	$	16,982	$	4,573	$	29,632

Maureen B. Short	$	8,874	$	14,830	$	6,740	$	30,444

Fred E. Herman	$	7,650	$	25,011	$	2,640	$	35,301

Christopher A. Korst	$	7,534	$	26,377	$	4,565	$	38,476

Catherine M. Skula	$	9,362	$	21,445	$	9,740	$	40,547

(1)

Represents contributions or other allocations made by us to our 401(k) Retirement Savings Plan and/or Deferred Compensation Plan.

(2)

Represents premiums paid by the company for medical, dental, vision, dental, long-term disability and life insurance.

(3)

Represents deemed compensation related to incentive travel awards and fees paid by us for an annual executive physical examination.

(4)

Mr. Fadel was named Chief Executive Officer effective as of January 2, 2018.


RENT-A-CENTER - 2019 Proxy Statement		27

COMPENSATION DISCUSSION AND ANALYSIS

Grants of Plan-Based Awards

The table below sets forth information about plan-based awards granted to the named executive officers during 2018 under the 2018 annual cash incentive program and the 2016 Plan.

Name

Grant
Date

Date of
Compen-
sation
Committee

Estimated Future Payouts Under
Non-Equity Incentive
Plan Awards ⁽¹⁾

Estimated Future
Payouts Under
Equity Incentive Plan
Awards ⁽²⁾

All Other
Stock
Awards:
Number
of

Shares
of Stock
or
Units ⁽³⁾

All Other
Option
Awards:
Number of
Securities
Underlying
Options ⁽⁴⁾

Exercise
or Base
Price of
Option
Award ⁽⁵⁾

Closing
Price
on
Grant
Date

Grant
Date Fair
Value of
Stock and
Option
Award

Threshold

Target

Maximum

Threshold

Target

Maximum

Mitchell E. Fadel ⁽⁶⁾

Short-Term Incentive

N/A

2/16/18

160,000

800,000

1,600,000

–

Restricted Stock Units

2/23/18

2/16/18

–

48,662

–

8.09

400,001

Performance Stock Units

2/23/18

2/16/18

–

194,489

388,978

–

8.09

1,756,236

Stock Options

2/23/18

2/16/18

–

107,817

8.22

8.09

388,141

Maureen B. Short

Short-Term Incentive

N/A

2/16/18

32,580

162,900

325,800

–

Restricted Stock Units

2/23/18

2/16/18

–

6,606

–

8.09

54,301

Performance Stock Units

2/23/18

2/16/18

–

26,402

52,804

–

8.09

238,410

Stock Options

2/23/18

2/16/18

–

14,636

8.22

8.09

52,690

Fred E. Herman

Short-Term Incentive

N/A

2/16/18

35,500

177,500

355,000

–

Restricted Stock Units

2/23/18

2/16/18

–

7,342

–

8.09

60,351

Performance Stock Units

2/23/18

2/16/18

–

29,344

58,688

–

8.09

264,976

Stock Options

2/23/18

2/16/18

–

16,267

8.22

8.09

58,561

Christopher A. Korst

Short-Term Incentive

N/A

2/16/18

48,255

241,273

482,546

–

Restricted Stock Units

2/23/18

2/16/18

–

9,606

–

8.09

78,961

Performance Stock Units

2/23/18

2/16/18

–

38,393

76,786

–

8.09

346,689

Stock Options

2/23/18

2/16/18

–

21,284

8.22

8.09

76,622

Catherine M. Skula

Short-Term Incentive

N/A

2/16/18

32,534

162,669

325,338

–

Restricted Stock Units

2/23/18

2/16/18

–

6,728

–

8.09

55,304

Performance Stock Units

2/23/18

2/16/18

–

26,892

53,784

–

8.09

242,835

Stock Options

2/28/18

2/16/18

–

14,908

8.22

8.09

53,669

Stock Options

4/2/18

3/27/18

–

10,000

8.63

8.72

38,000

(1)

These columns show the potential value of the payout of the annual cash incentive bonuses for 2018 performance for each named executive officer if the threshold, target and maximum performance levels are achieved. The potential payout is performance-based and driven by company performance. The actual amount of the annual cash incentive bonuses paid for 2018 performance is shown in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column.

(2)

Represents restricted stock units which vest depending on our relative TSR performance over a three-year measurement period as compared to the S&P 1500 Specialty Retail Index and the named executive officer remains an employee through the end of such measurement period. The issuance of the stock underlying the performance-based restricted stock units granted to our named executive officers will range from a minimum of zero shares if our relative TSR performance is below the 25th percentile, to the maximum number of shares if our relative TSR performance ranks at least the 90th percentile.

(3)

Represents restricted stock units which vest upon completion of three-years of continuous employment with us from February 23, 2018.

(4)

Represents options to purchase shares of our common stock which vest ratably over a four-year period.

(5)

Calculated by reference to the closing price for shares of our common stock on the Nasdaq Global Select Market on the last trading day before the date of grant as reported on the Nasdaq Global Select Market, in accordance with the applicable plan.

(6)

Mr. Fadel was named Chief Executive Officer effective as of January 2, 2018.


	28			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Outstanding Equity Awards at Fiscal Year End

The following table provides information regarding stock options and restricted stock units held by the named executive officers that were outstanding at December 31, 2018.

OPTION AWARDS

STOCK AWARDS

Number of
Securities
Underlying
Unexercised
Options -
Exercisable

Number of
Securities
Underlying
Unexercised
Options -
Unexercisable

Option
Exercise
Price

Option
Expiration
Date

Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested

Equity Incentive
Plan Awards:
Market or Payout
Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ⁽¹⁾

Mitchell E. Fadel

107,817

⁽⁵⁾

8.22

2/23/2028

48,662

⁽⁹⁾

787,838

194,489

⁽¹²⁾

3,148,777

Maureen B. Short

1,875

22.38

10/1/2020

3,766

⁽⁷⁾

60,972

594

29.91

1/31/2021

6,526

⁽⁸⁾

105,656

1,642

37.19

1/31/2022

6,606

⁽⁹⁾

106,951

2,126

34.77

1/31/2023

14,638

⁽¹⁰⁾

236,989

5,066

25.03

1/31/2024

26,108

⁽¹¹⁾

422,689

4,566

1,522

⁽²⁾

29.31

2/6/2025

26,402

⁽¹²⁾

427,448

7,292

7,291

⁽³⁾

10.34

2/5/2026

5,452

16,355

⁽⁴⁾

8.32

2/16/2027

14,636

⁽⁵⁾

8.22

2/23/2028

Fred E. Herman

2,227

15.37

1/30/2019

4,971

⁽⁷⁾

80,480

1,529

19.70

1/29/2020

6,178

⁽⁸⁾

100,022

1,244

29.91

1/31/2021

7,342

⁽⁹⁾

118,867

1,912

37.19

1/31/2022

19,324

⁽¹⁰⁾

312,856

3,486

34.77

1/31/2023

24,712

⁽¹¹⁾

400,087

10,000

33.34

1/2/2024

29,344

⁽¹²⁾

475,079

10,026

25.03

1/31/2024

4,069

1,356

⁽²⁾

29.31

2/6/2025

9,626

9,625

⁽³⁾

10.34

2/5/2026

5,161

15,482

⁽⁴⁾

8.32

2/16/2027

16,267

⁽⁵⁾

8.22

2/23/2028

Christopher A. Korst

9,600

15.37

1/30/2019

7,637

⁽⁷⁾

123,643

6,656

19.70

1/29/2020

9,491

⁽⁸⁾

153,659

6,734

29.91

1/31/2021

9,606

⁽⁹⁾

155,521

7,411

37.19

1/31/2022

29,685

⁽¹⁰⁾

480,600

9,305

34.77

1/31/2023

37,963

⁽¹¹⁾

614,621

14,270

25.03

1/31/2024

38,393

⁽¹²⁾

621,583

5,791

1,930

⁽²⁾

29.31

2/6/2025

14,787

⁽³⁾

10.34

2/5/2026

7,928

23,784

⁽⁴⁾

8.32

2/16/2027

21,284

⁽⁵⁾

8.22

2/23/2028

Catherine M. Skula

5,000

18.88

10/1/2019

4,086

⁽⁷⁾

66,152

1,380

19.70

1/29/2020

5,332

⁽⁸⁾

86,325

2,066

29.91

1/31/2021

6,728

⁽⁹⁾

108,926

2,849

37.19

1/31/2022

15,884

⁽¹⁰⁾

257,162

3,585

34.77

1/31/2023

21,329

⁽¹¹⁾

345,317

5,498

25.03

1/31/2024

26,892

⁽¹²⁾

435,381

4,908

1,636

⁽²⁾

29.31

2/6/2025

3,956

⁽³⁾

10.34

2/5/2026

13,363

⁽⁴⁾

8.32

2/16/2027

21,284

⁽⁵⁾

8.22

2/23/2028

10,000

⁽⁶⁾

8.63

4/2/2028


RENT-A-CENTER - 2019 Proxy Statement		29

COMPENSATION DISCUSSION AND ANALYSIS

(1)

Calculated by reference to the closing price for shares of our common stock on the Nasdaq Global Select Market on December 31, 2018, which was $16.19.

(2)

These options to purchase shares of our common stock vested on February 6, 2019.

(3)

These options to purchase shares of our common stock vest in equal parts on each of February 5, 2019 and February 5, 2020.

(4)

These options to purchase shares of our common stock vest in equal parts on each of February 16, 2019, February 16, 2020 and February 16, 2021.

(5)

These options to purchase shares of our common stock vest in equal parts on each of February 23, 2019, February 23, 2020, February 23, 2021 and February 23, 2022.

(6)

These options to purchase shares of our common stock vest in equal parts on each of April 2, 2019, April 2, 2020, April 2, 2021 and April 2, 2022.

(7)

Represents the number of shares of our common stock that will vest and become issuable pursuant to the time-based restricted stock unit awards upon the named executive officer’s completion of three years of continuous employment with us from February 5, 2016. These shares vested on February 5, 2019.

(8)

(9)

(10)

Represents the number of shares of our common stock that will vest and become issuable pursuant to the performance-based restricted stock unit awards based on our relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the three-year period ending December 31, 2018, and the named executive officer remains an employee through December 31, 2018. Our relative TSR performance as compared to the S&P 1500 Specialty Retail Index for the three-year period ending December 31, 2018, ranked at the 44th percentile, which resulted in 75% of the shares vesting.

(11)

(12)

Option Exercises and Stock Vested

The following table reflects certain information with respect to options exercised by our named executive officers during the 2018 fiscal year, as well as applicable stock awards that vested, during the 2018 fiscal year:


	Option Awards				Stock Awards
	Number of Shares Acquired on Exercise		Value Realized on Exercise		Number of Shares Acquired on Vesting		Value Realized on Vesting
Mitchell E. Fadel		–		–		–		–
Maureen B. Short		–		–		1,278	$	12,039
Fred E. Herman		–		–		1,703	$	16,042
Christopher A. Korst		–		–		2,424	$	22,834
Catherine M. Skula		12,367	$	67,740		1,373	$	12,934

Nonqualified Deferred Compensation

The Rent-A-Center, Inc. Deferred Compensation Plan is an unfunded, nonqualified deferred compensation plan for a select group of our key management personnel and highly compensated employees. The Deferred Compensation Plan first became available to eligible employees in July 2007, with deferral elections taking effect as of August 3, 2007. The Deferred Compensation Plan allows participants to defer up to 50% of their base compensation and up to 100% of any bonus compensation. Participants may invest the amounts deferred in measurement funds that are the same funds offered as the investment options in our 401(k) Retirement Savings Plan. We may make discretionary

contributions to the Deferred Compensation Plan, which are subject to a three-year graded vesting schedule based on the participant’s years of service with us. For 2018, we made matching contributions in the Deferred Compensation Plan of 50% of the employee’s contribution to the plan up to an amount not to exceed 6% of such employee’s compensation, which is the same matching policy as under our 401(k) Retirement Savings Plan. We are obligated to pay the deferred compensation amounts in the future in accordance with the terms of the Deferred Compensation Plan.


	30			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The following table provides information for the named executive officers regarding contributions, earnings and balances for our Deferred Compensation Plan.


Name	Executive Contributions in FY 2018		Registrant Contributions in FY 2018 ⁽¹⁾		Aggregate Earnings in FY 2018			Aggregate Withdrawals/ Distributions		Aggregate Balance at 12-31-18 ⁽²⁾
Mitchell E. Fadel	$	0	$	0	$	0		$	0	$	0
Maureen B. Short	$	7,518	$	3,551	$	(13,005	)	$	0	$	169,185
Fred E. Herman	$	7,168	$	0	$	(9,144	)	$	0	$	185,549
Christopher A. Korst	$	37,507	$	0	$	(47,676	)	$	0	$	545,134
Catherine M. Skula	$	20,631	$	4,069	$	2,454		$	0	$	409,935

(1)

Represents matching contributions or other allocations made by us under our 401(k) Retirement Plan and/or Deferred Compensation Plan which amount was also reported as compensation in the “Summary Compensation Table” on page 26 of this proxy.

(2)

Of these amounts, the following aggregate amounts are included in the Summary Compensation Table above (as fiscal 2016, 2017 or 2018 compensation, as applicable) for each Named Executive Officer: Ms. Short – $41,154; Mr. Herman – $46,820; Mr. Korst – $115,240; and Ms. Skula – $20,631.

Termination of Employment and Change-in-Control Arrangements

Severance Arrangements

We have entered into executive transition agreements with each of our named executive officers other than Mr. Fadel. Each executive transition agreement has substantially identical terms and is intended to provide certain payments and benefits upon an involuntary termination of the named executive officer’s employment or the occurrence of certain other circumstances that may affect the named executive officer. Loyalty and Confidentiality Agreements executed in connection with our executive transition agreements provide non-competition, non-solicitation and release provisions for the benefit of the Company.

Termination Not in Conjunction with a Change in Control. If the named executive officer’s employment is terminated without “cause,” the named executive officer will be entitled to receive:

•

unpaid but earned base salary through the date of termination;

•

a pro rata bonus calculated based upon the named executive officer’s bonus amount from the previous year;

•

one and one half times the sum of the named executive officer’s highest annual rate of salary during the previous 24 months, and the named executive officer’s average annual bonus for the two preceding calendar years; and

•

continued health insurance coverage for the named executive officer and the named executive officer’s spouse and covered dependents for up to 18 months.

If the named executive officer’s employment is terminated due to disability or death, the named executive officer will be entitled to receive:

•

unpaid but earned base salary through the date of termination;

•

a pro rata bonus calculated based upon the named executive officer’s bonus amount from the previous year; and

•

continued health insurance coverage for the named executive officer and the named executive officer’s spouse and covered dependents for 12 months.

If the named executive officer’s employment is terminated for “cause” or if the named executive officer terminates his employment for any reason other than death, the named executive officer will be entitled to receive his unpaid but earned base salary through the date of termination (reduced by amounts owed by the named executive officer to us or our affiliates).

Termination in Conjunction With a Change In Control. If the named executive officer’s employment is terminated in conjunction with a change in control of us without “cause” or by the named executive officer for “good reason,” the named executive officer will be entitled to receive the same severance payments and benefits as described above (not in connection with a change in control) with respect to a termination without “cause,” except that the named executive officer will be entitled to receive two times the sum of the named executive officer’s highest annual rate of salary during the previous 24 months, and the named executive officer’s average annual bonus for the two preceding calendar years, rather than one and one half times such amount, and the named executive officer will be entitled to continued health insurance coverage for up to two years, rather than 18 months. If the named executive officer’s employment is terminated in connection with a change in control due to disability or death, or for “cause” or without “good reason,” the named executive officer will be entitled to receive the same severance payments and benefits as described above (not in connection with a change in control) with respect to a termination due to disability or death or for “cause,” respectively.

Under each of the executive transition agreements, the term “change in control” generally means the occurrence of any of the following after September 14, 2006:

•

any person becomes the beneficial owner of 40% or more of the combined voting power of our then outstanding voting securities;


RENT-A-CENTER - 2019 Proxy Statement		31

COMPENSATION DISCUSSION AND ANALYSIS

•

a consolidation, merger or reorganization of us, unless (i) our stockholders immediately prior to such transaction own at least a majority of the voting power of the outstanding voting securities of the resulting entity, (ii) the members of our Board immediately prior to the execution of the agreement providing for such a transaction constitute a majority of the board of directors of the surviving corporation or of its majority stockholder, and (iii) no person beneficially owns more than 40% of the combined voting power of the then outstanding voting securities of the surviving corporation (other than a person who is (a) us or a subsidiary of us, (b) an employee benefit plan maintained by us, the surviving corporation or any subsidiary, or (c) the beneficial owner of 40% or more of the

combined voting power of our outstanding voting securities immediately prior to such transaction;

•

individuals who, as of September 14, 2006, constitute our entire Board cease to constitute a majority of our Board, provided that anyone who later becomes a director and whose appointment or nomination for election was approved by at least two-thirds of our directors at the time shall be considered as though such individual were a member of our Board; or

•

a complete liquidation or dissolution of us, or a sale or other disposition of all or substantially all of our assets (other than to an entity described in the second bullet point above).

Fadel Employment Agreement

Pursuant to Mr. Fadel’s employment agreement, if we terminate Mr. Fadel’s employment due to his disability or death, Mr. Fadel will be entitled to receive:

•

unpaid but earned base salary through the date of termination;

•

a pro rata bonus calculated based upon Mr. Fadel’s bonus amount from the previous year; and

•

continued health insurance coverage for Mr. Fadel and Mr. Fadel’s spouse and covered dependents for 24 months.

If we terminate Mr. Fadel’s employment for “cause,” or if Mr. Fadel terminates his employment with us for any reason other than death, disability or for “good reason,” Mr. Fadel will be entitled to receive his unpaid but earned base salary through the date of termination (reduced by amounts owed by Mr. Fadel to us or our affiliates).

If Mr. Fadel’s employment is terminated by us without “cause” (as defined in the employment agreement) or by Mr. Fadel for “good reason,” Mr. Fadel will be entitled to receive:

•

unpaid but earned base salary through the date of termination;

•

a pro rata bonus calculated based upon Mr. Fadel’s bonus amount from the previous year;

•

two times the sum of Mr. Fadel’s (x) highest annual rate of salary during the previous 24 months, and (y) his target cash bonus amount for the calendar year in which the termination occurs; and

•

continued health insurance coverage for Mr. Fadel and Mr. Fadel’s spouse and covered dependents for 24 months.

If we terminate Mr. Fadel’s employment in conjunction with a change in control of us without “cause” or if Mr. Fadel terminates his employment with us for “good reason,” Mr. Fadel will be entitled to receive in a lump sum the same aggregate severance payments and benefits as described above for a termination not in connection with a change in control. The Compensation Committee or the Board may condition the payment of severance or benefits on the execution and delivery by Mr. Fadel of a general release in favor of us, our affiliates and our officers, directors, and employees, provided that no such release will be required for the payment to Mr. Fadel of accrued compensation.

Mr. Fadel is also subject to a Loyalty and Confidentiality Agreement which provides non-competition, non-solicitation and release provisions for the benefit of the Company.

Long-Term Incentive Plans

Awards Pursuant to the 2016 Plan, the 2006 Plan and the Equity Plan . Pursuant to stock option agreements under the 2016 Plan, the 2006 Plan and the Equity Plan, if the individual’s employment with us is terminated because of death or disability, any options that are vested and exercisable on the date of termination will remain exercisable for 12 months thereafter, but not beyond the term of the agreement. If the individual’s employment is terminated by us for “cause,” then the options (whether or not then vested and exercisable) will immediately terminate and cease to be exercisable. If the individual’s employment with us is terminated for any other reason, any options that are vested and exercisable as of the date of termination will remain exercisable for three months thereafter, but not beyond the term of the agreement.

Pursuant to the 2016 Plan, the 2006 Plan and the Equity Plan, each holder of an option to purchase shares of our common stock

may exercise such option immediately prior to an “exchange transaction,” regardless of whether currently vested, and any outstanding options not exercised before the exchange transaction shall terminate. However, if, as part of an exchange transaction, our stockholders receive capital stock of another corporation in exchange for our common stock, and if our Board so directs, then all outstanding options shall be converted into options to purchase shares of such stock, with the amount and price to be determined by adjusting the amount and price of the options granted under the 2016 Plan, the 2006 Plan or the Equity Plan, as applicable, on the same basis as the determination of the number of shares of exchange stock the holders of our outstanding common stock are entitled to receive in the exchange transaction. In addition, unless our Board determines otherwise, the vesting conditions with respect to the converted options shall be substantially the same as those set forth in the original option


	32			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

agreement. The Board may accelerate the vesting of stock awards and other awards, provide for cash settlement of and/or make such other adjustments to any outstanding award as it deems appropriate in the context of an exchange transaction.

Under the 2016 Plan, the 2006 Plan and the Equity Plan, the term “exchange transaction” means a merger (other than in which the holders of our common stock immediately prior thereto have the same proportionate ownership of common stock in the surviving corporation immediately thereafter), consolidation, acquisition or disposition of property or stock, separation, reorganization (other than a reincorporation or the creation of a holding company), liquidation of us or any other similar transaction or event so designated by our Board, as a result of which our stockholders receive cash, stock or other property in exchange for or in connection with their shares of our common stock.

Pursuant to stock compensation agreements under the 2016 Plan, the 2006 Plan and the Equity Plan, if the individual’s employment with us is terminated because of death or disability, or there is a change in ownership of us, then any unvested restricted stock units will vest on the date of such termination of employment or

immediately prior to the consummation of the change in ownership of us, as the case may be. However, any unvested restricted stock units do not vest by reason of a change in ownership unless the individual remains continuously employed by us until such change in ownership is complete or the individual’s employment is sooner terminated by us in connection with such change in ownership. In addition, upon the termination of the individual’s employment or other service with us for any reason other than disability or death, any unvested restricted stock units will thereupon terminate and be canceled.

Under each of the stock compensation agreements, the term “change in ownership” is defined as any transaction or series of transactions as a result of which any one person or group of persons acquires (i) ownership of our common stock that, together with the common stock previously held by such person, constitutes more than 50% of the total fair market value or total voting power of such stock, or (ii) ownership of our assets having a total gross fair market value at least equal to 80% of the total gross fair market value of all of the assets immediately prior to such transaction or series of transactions.


RENT-A-CENTER - 2019 Proxy Statement		33

COMPENSATION DISCUSSION AND ANALYSIS

Potential Payments and Benefits Upon Termination Without a Change in Control

The following table provides quantitative disclosure of the estimated payments that would be made to our named executive officers currently employed by us under their severance agreements, as well as the amounts our named executive officers would receive upon the exercise of the equity and cash awards held by them on December 31, 2018, the last business day of our fiscal 2018, assuming that:

•

each named executive officer’s employment with us was terminated on December 31, 2018, and was not in connection with an event which constituted a “change in control” or an “exchange transaction” under any agreement or plan described above;

•

the base salary earned by each named executive officer for his services to us through December 31, 2018 has been fully paid to such named executive officer;

•

to the extent not otherwise terminated in connection with the named executive officer’s termination, each of our named executive officers exercised any previously unexercised, vested options and sold the underlying shares at the closing price for shares of our common stock on the Nasdaq Global Select Market on December 31, 2018, which was $16.19; and

•

to the extent not otherwise terminated in connection with the named executive officer’s termination, each of our named executive officers sold the shares of our common stock underlying their previously unvested restricted stock units at the closing price for shares of our common stock on the Nasdaq Global Select Market on December 31, 2018.


Name	Cash Severance Payout		Continuation of Medical Benefits		Acceleration and Continuation of Outstanding Awards		Total Termination Benefits
Mitchell E. Fadel
Termination by Us without “Cause” or by Mr. Fadel for “Good Reason”	$	3,200,000		$25,824		$ 0		$3,225,824
Termination by Us for “Cause”	$	0		$ 0		$ 0		$ 0
Termination by Us due to Mr. Fadel’s Disability or death	$	1,488,000		$12,912		$3,936,615		$5,437,527
Termination by Mr. Fadel for Reason other than death or disability	$	0		$ 0		$3,936,615		$3,936,615
Maureen B. Short
Termination by Us without “Cause”	$	782,463		$16,416		$ 85,565		$ 884,444
Termination by Us for “Cause”	$	0		$ 0		$ 0		$ 0
Termination by Us due to Ms. Short’s Disability or death	$	302,994		$10,944		$1,446,270		$1,760,208
Termination by Ms. Short for Reason other than death or disability	$	0		$ 0		$ 85,565		$ 85,565
Christopher A. Korst
Termination by Us without “Cause”	$	1,012,686		$26,946		$ 179,912		$1,219,544
Termination by Us for “Cause”	$	0		$ 0		$ 0		$ 0
Termination by Us due to Mr. Korst’s Disability or death	$	448,767		$17,964		$2,306,397		$2,773,128
Termination by Mr. Korst for Reason other than death or disability	$	0		$ 0		$ 179,912		$ 179,912
Catherine M. Skula
Termination by Us without “Cause”	$	724,912		$26,946		$ 23,143		$ 775,001
Termination by Us for “Cause”	$	0		$ 0		$ 0		$ 0
Termination by Us due to Ms. Skula’s Disability or death	$	302,564		$17,964		$1,322,406		$1,642,934
Termination by Ms. Skula for Reason other than death or disability	$	0		$ 0		$ 23,143		$ 23,143


	34			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Potential Payments and Benefits Upon Termination With a Change in Control

The following table provides quantitative disclosure of the estimated payments that would be made to our named executive officers under their employment agreement or severance agreements, as well as the amounts our named executive officers would receive upon the exercise of the equity and cash awards held by them on December 31, 2018, the last business day of our fiscal 2018, assuming that:

•

each named executive officer’s employment with us was terminated on December 31, 2018, and was in connection with an event which constituted a “change in control” or an “exchange transaction” under any agreement or plan described above;

•

the base salary earned by each named executive officer for his services to us through December 31, 2018 has been fully paid to such named executive officer;

•

with respect to options awarded pursuant to the 2016 Plan, the 2006 Plan or the Equity Plan, the Board does not direct such

outstanding options to be converted into options to purchase shares of the exchange stock;

•

to the extent not otherwise terminated in connection with the named executive officer’s termination, each of our named executive officers exercised any previously unexercised options and sold the underlying shares at the closing price for shares of our common stock on the Nasdaq Global Select Market on December 31, 2018; and

•

Name

Cash
Severance
Payout

Continuation
of Medical
Benefits

Acceleration and
Continuation
of Outstanding
Awards

Total
Termination
Benefits

Mitchell E. Fadel

Termination by Us without “Cause” or by Mr. Fadel for “Good Reason”

3,200,000

$25,824

$4,881,011

$8,106,835

Termination by Us due to Mr. Fadel’s Disability or Death

1,488,000

$12,912

$4,881,011

$6,381,923

Termination by Us for “Cause” or by Mr. Fadel without “Good Reason”

$ 0

$4,881,011

Maureen B. Short

Termination by Us without “Cause” or by Ms. Short for “Good Reason”

1,043,284

$21,888

$1,734,285

$2,799,457

Termination by Us due to Ms. Short’s Disability or death

302,994

$10,944

$1,734,285

$2,048,223

Termination by Us for “Cause” or by Ms. Short without “Good Reason”

$ 0

$1,734,285

Christopher A. Korst

Termination by Us without “Cause” or by Mr. Korst for “Good Reason”

1,350,248

$35,928

$2,749,714

$4,135,890

Termination by Us due to Mr. Korst’s Disability or death

448,767

$17,964

$2,749,714

$3,216,445

Termination by Us for “Cause” or by Mr. Korst without “Good Reason”

$ 0

$2,749,714

Catherine M. Skula

Termination by Us without “Cause” or by Ms. Skula for “Good Reason”

966,549

$35,928

$1,695,949

$2,698,426

Termination by Us due to Ms. Skula’s Disability or death

302,564

$17,964

$1,695,949

$2,016,477

Termination by Us for “Cause” or by Ms. Skula without “Good Reason”

$ 0

$1,695,949


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COMPENSATION DISCUSSION AND ANALYSIS

Potential Realizable Value of Outstanding Awards Upon a Change in Control Without Termination

Under our long-term incentive plans, in the event of a “change in control” of us or an “exchange transaction” involving us, the vesting of outstanding awards may be accelerated regardless of whether the employment of the holder is terminated in connection therewith. The following table provides quantitative disclosure of the potential realizable value of outstanding awards granted to the named executive officers currently employed by us pursuant to our long-term incentive plans assuming that:

•

an event which constituted a “change in control” and an “exchange transaction” under each of the agreements and plans described above was consummated on December 31, 2018;

•

with respect to options awarded pursuant to the 2016 Plan, the 2006 Plan and the Equity Plan, the Board does not direct such outstanding options to be converted into options to purchase shares of the exchange stock;

•

each named executive officer exercised any previously unexercised options and sold the underlying shares at the closing price for shares of our common stock on the Nasdaq Global Select Market on December 31, 2018; and

•

each named executive officer sold the shares of our common stock underlying their previously unvested restricted stock units at the closing price for shares of our common stock on the Nasdaq Global Select Market on December 31, 2018.


Name	Potential Realizable Value ⁽¹⁾
Mitchell E. Fadel	$	4,881,011
Maureen B. Short	$	1,734,285
Christopher A. Korst	$	2,749,714
Catherine M. Skula	$	1,695,949

(1)

Calculated by reference to the closing price for shares of our common stock on The Nasdaq Global Select Market on December 31, 2018, the last business day of fiscal 2018, which was $16.19.

Compensation Related Risk

The Compensation Committee believes that the design of our compensation programs, including our executive compensation program, does not encourage our executives or employees to take unnecessary and excessive risks and that the risks arising from these programs are not reasonably likely to have a material adverse effect on us. The Compensation Committee considered the following factors in making that determination:

•

The allocation among the components of direct annual compensation provides an appropriate balance between annual and long-term incentives and between fixed and performance-based compensation.

•

The performance measures and the multi-year vesting features of the long-term equity incentive compensation component encourage participants to seek sustainable growth and value creation.

•

Inclusion of share-based compensation through the long-term equity incentive compensation component encourages appropriate decision-making that is aligned with the long-term interests of our stockholders.

•

Our annual cash incentive program and the awards of restricted stock with performance-based vesting contain provisions with respect to our achievement of the applicable financial target such that each participant may receive (1) an additional payout pursuant to such award in the event that we exceed the applicable financial target, and (2) a portion of the target payout pursuant to such award in the event that we approach, yet fail to achieve, the target level of financial performance.

•

We maintain a values-driven, ethics-based culture supported by a strong tone at the top.

CEO Pay Ratio

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are presenting the ratio of the annual total compensation for fiscal year 2018 of our current Chief Executive Officer to that of the median of the annual total compensation for all of our other employees. We believe this ratio represents a reasonable estimate calculated in a manner consistent with the

SEC’s disclosure requirements under Item 402(u) of Regulation S-K, which permit the use of estimates, assumptions and adjustments in connection with the identification of our median employee. Please note that due to the flexibility permitted by these rules in calculating this ratio, our ratio may not be comparable to CEO pay ratios presented by other companies.


	36			RENT-A-CENTER - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

We determined our median employee using taxable wages from our payroll records for fiscal 2018 for all full- and part-time employees as of December 31, 2018. After identifying the median employee, we calculated annual total compensation for that person using the same methodology we use for our named executive officers in the Summary Compensation Table in this Proxy Statement.

The annual total compensation of our median employee for 2018 was $36,828, and the 2018 annual total compensation for Mr. Fadel as set forth in the Summary Compensation Table above was $4,862,010. Accordingly, our estimate of the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of our other employees is approximately 132 to 1.

Equity Compensation Plan Information

The following table sets forth certain information concerning all equity compensation plans previously approved by our stockholders and all equity compensation plans not previously approved by our stockholders as of December 31, 2018.

Plan Category

Number of Securities to be
issued upon exercise of
outstanding options, warrants
and rights ⁽¹⁾

Weighted-average exercise
price of outstanding options,
warrants and rights

Number of securities remaining
available for future issuance
under equity compensation
plan ⁽²⁾

Equity compensation plans approved by security holders

4,324,762

19.37

2,065,111

Equity compensation plans not approved by security holders

–0–

Total

4,324,762

19.37

2,065,111

(1)

Includes (a) 2,468,900 shares to be issued upon exercise of outstanding stock options with a weighted-average exercise price per share of $19.37, and a weighted-average remaining term of 6.06 years, and (b) 1,855,862 shares to be issued upon vesting of outstanding restricted stock units with a weighted-average grant date fair value of $8.82.

(2)

Pursuant to the terms of the Plans, when an optionee leaves our employ, unvested options granted to that employee terminate and become available for re-issuance. Vested options not exercised within 90 days from the date the optionee leaves our employ terminate and become available for re-issuance.


RENT-A-CENTER - 2019 Proxy Statement		37


PROPOSAL THREE:		ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are seeking stockholder approval of our executive compensation program and practices as disclosed in this proxy statement. As described above in the “Compensation Discussion and Analysis” section of this proxy statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:

•

attract, retain and motivate senior executives with competitive compensation opportunities;

•

balance short-term and long-term strategic goals;

•

align our executive compensation program with the core values identified in our mission statement which focuses on improving the quality of life for our co-workers and our customers; and

•

reward achievement of our financial and non-financial goals.

We urge stockholders to read the “Compensation Discussion and Analysis” beginning on page 20 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative disclosures, appearing on pages 26 through 36, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to our recent and long-term success.

In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the 2019 Annual Meeting:

“RESOLVED, that the stockholders of Rent-A-Center, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers for the year ended December 31, 2018, as disclosed in the 2019 Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (including Item 402 of Regulation S-K), including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and narrative disclosure.”

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board. Although non-binding, the Board and the Compensation Committee will carefully take into account the outcome of the vote when considering future compensation arrangements for our named executive officers. We intend to conduct future advisory votes on executive compensation at each subsequent annual meeting.

The affirmative vote of a majority of the shares of common stock present in person or represented by proxy and entitled to be voted on the proposal at the meeting is required for approval of this advisory resolution.

Our Board recommends that you vote “FOR” approval of the advisory resolution on executive compensation.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Brown, Mr. Lentell, Mr. Gade, and Mr. Hetrick each served as members of the Compensation Committee for all or a portion of 2018. Each member is independent and no member of the Compensation Committee (1) has ever been employed by us, as an officer or otherwise, or (2) other than with respect to Mr. Lentell, as described under the heading “Related Person Transactions” below, has or had any relationship with us in 2018

requiring disclosure pursuant to SEC rules. In addition, during 2018, none of our executive officers served as a member of the compensation or similar committee or as a member of the board of directors of any other entity having an executive officer that also served on the Compensation Committee or Board of Rent-A-Center.


	38			RENT-A-CENTER - 2019 Proxy Statement

RELATED PERSON TRANSACTIONS

Policy on Review and Approval of Transactions with Related Persons

The Board has adopted a written statement of policy and procedures for the identification and review of transactions involving us and “related persons” (our directors and executive officers, stockholders owning five percent or greater of our outstanding stock, immediate family members of any of the foregoing, or any entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a five percent or greater beneficial ownership interest).

Our directors and executive officers are required to provide notice to our legal department of the facts and circumstances of any proposed transaction involving amounts greater than $50,000 involving them or their immediate family members that may be deemed to be a related person transaction. Our legal department will then assess whether the proposed related person transaction requires approval pursuant to the policy and procedures. If our

legal department determines that any proposed, ongoing or completed transaction involves an amount in excess of $100,000 and is a related person transaction, our Chief Executive Officer and the Chairman of the Nominating and Corporate Governance Committee must be notified (unless it involves our Chief Executive Officer, in which case the Chairman of the Nominating and Corporate Governance Committee must be notified), for consideration at the next regularly scheduled meeting of the Nominating and Corporate Governance Committee. In certain instances, the Chairman of the Nominating and Corporate Governance Committee may pre-approve or ratify, as applicable, any related person transaction in which the aggregate amount involved is, or is expected to be, less than $500,000. The Nominating and Corporate Governance Committee or its Chairman, as applicable, will approve or ratify, as applicable, only those related person transactions that are in, or are not inconsistent with, our best interests and those of our stockholders.

Intrust Bank Relationship

J.V. Lentell, one of our directors, served during 2018 as Vice Chairman of the Board of Directors of Intrust Bank, N.A., one of our lenders. Intrust Bank, N.A. is a $7.77 million participant (total commitment) in our senior credit facility. We also maintain operational checking and other accounts, including a $12.5 million revolving line of credit, with Intrust Bank, N.A. In addition, Intrust Bank, N.A. serves as trustee of our 401(k) and

deferred compensation plans. During 2018, we paid Intrust a total of $1.1 million in fees in connection with banking services provided by them, of which $0.6 million was for administration fees and trustee fees for our 401(k) and deferred compensation plans. The total fees paid to Intrust during 2018 constituted less than 1/2% of Intrust’s annual revenue for the year ended December 31, 2018.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on a review of reports filed by our directors, executive officers and beneficial owners of more than 10% of our shares of common stock, and upon representations from those persons, we believe that all SEC stock ownership reports required to be filed by those reporting persons during and with respect to 2018 were timely made.


RENT-A-CENTER - 2019 Proxy Statement		39

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the common stock ownership for each of our directors, each of the named executive officers who are currently employed by us, all of our directors and executive officers as a group, and each of our known 5% stockholders. Beneficial ownership is determined in accordance with SEC rules and regulations. Unless otherwise indicated and subject to community property laws where applicable, we believe that each of the stockholders named in the table below has sole voting and investment power with respect to the shares indicated as beneficially owned. Information in the table is as of April 9, 2019, unless otherwise indicated.


Name of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent
Jeffrey J. Brown		20,255	⁽¹⁾		*
Mitchell E. Fadel		32,210	⁽²⁾		*
Michael J. Gade		50,700	⁽³⁾		*
Christopher B. Hetrick		20,255	⁽⁴⁾		*
J.V. Lentell		63,300	⁽⁵⁾		*
Christopher A. Korst		138,178	⁽⁶⁾		*
Harold Lewis		0			–
Carol A. McFate		0			–
Maureen B. Short		55,553	⁽⁷⁾		*
Catherine M. Skula		55,555	⁽⁸⁾		*
BlackRock, Inc.		6,643,986	⁽⁹⁾		12.4
Engaged Capital, LLC		5,333,609	⁽¹⁰		9.9
LMR Partners LLP		3,790,000	⁽¹¹⁾		7.0
The Vanguard Group		6,085,774	⁽¹²⁾		11.4
All executive officers and directors as a group (11 total)		436,966			*

*	Less than 1%.

(1)

Represents 20,255 deferred stock units.

(2)

Represents (a) 5,256 deferred stock units, and (b) 26,954 shares issuable pursuant to currently exercisable options.

(3)

Represents (a) 2,400 shares held directly, and (b) 48,300 deferred stock units.

(4)

Represents 20,255 deferred stock units. In addition, as an affiliate of Engaged Capital, LLC, Mr. Hetrick may be deemed to be a member of a Section 13(d) group that may be deemed to collectively beneficially own the shares held by Engaged Capital as disclosed herein.

(5)

Represents (a) 15,000 shared held directly; and (b) 48,300 deferred stock units.

(6)

Represents (a) 36,196 shares held directly, (b) 94,955 shares issuable pursuant to currently exercisable options, (c) 2,027 shares held pursuant to our 401(k) Plan (as of December 31, 2018), and (d) 5,000 shares held in an IRA.

(7)

Represents (a) 12,663 shares held directly, and (b) 42,890 shares issuable pursuant to currently exercisable options.

(8)

Represents (a) 12,300 shares held directly, (b) 43,153 shares issuable pursuant to currently exercisable options, and (c) 102 shares held in deferred compensation plan.

(9)

The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York, 10022. BlackRock, Inc. exercises sole voting control over 6,495,126 of these shares and sole investment control over all 6,643,986 shares. This information is based on a Schedule 13G/A filed by BlackRock, Inc. with the Securities and Exchange Commission on January 31, 2019.

(10)

The address of Engaged Capital, LLC is 610 Newport Center Drive, Suite 250, Newport Beach, CA 92660. Engaged Capital, LLC exercises sole voting and investment control over all 5,333,609 shares. This information is based on a Schedule 13D/A filed by Engaged Capital, LLC with the Securities and Exchange Commission on March 1, 2019.

(11)

The address of LMR Partners LLP is 9th Floor, Devonshire House, 1 Mayfair Place, London, W1J 8AJ, United Kingdom. LMR Partners LLP shares voting and investment control over all 3,790,000 shares, including 3,400,000 shares of common stock issuable upon exercise of call options. This information is based on a Schedule 13G filed by LMR Master Fund Ltd. with the Securities and Exchange Commission on March 13, 2019.

(12)

The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. The Vanguard Group exercises sole voting control over 54,505 of these shares, shared voting control over 3,308 of these shares, sole investment control over 6,044,001 of these shares, and shared investment control over 41,773 of these shares. This information is based on a Schedule 13G/A filed by The Vanguard Group with the Securities and Exchange Commission on February 11, 2019.


	40			RENT-A-CENTER - 2019 Proxy Statement

SUBMISSION OF STOCKHOLDER PROPOSALS

From time to time, stockholders may seek to nominate directors or present proposals for inclusion in the proxy statement and form of proxy for consideration at an annual stockholders meeting. To be included in the proxy statement or considered at an annual or any special meeting, you must timely submit nominations of directors or proposals, in addition to meeting other legal requirements. We must receive proposals for possible inclusion in the proxy statement related to the 2020 annual stockholders meeting no

later than December 28, 2019. Proposals for possible consideration at the 2020 annual stockholders meeting must be received by us no earlier than February 5, 2020, and no later than March 6, 2020. The 2020 annual stockholders meeting is expected to take place on June 2, 2020. Direct any proposals, as well as related questions, to Corporate Secretary, Rent-A-Center, Inc., 5501 Headquarters Drive, Plano, Texas 75024.

OTHER BUSINESS

The Board does not intend to bring any business before the annual stockholders meeting other than the matters referred to in this notice and at this date has not been informed of any matters that may be presented to the annual stockholders meeting by others. If, however, any other matters properly come before the annual stockholders meeting, it is intended that the persons named in the accompanying proxy will vote pursuant to the proxy in accordance with their best judgment on such matters.

PLEASE VOTE – YOUR VOTE IS IMPORTANT


RENT-A-CENTER - 2019 Proxy Statement		41


				C/O CORPORATE ELECTION SERVICES P.O. BOX 3230 PITTSBURGH PA 15230		V OTE BY T ELEPHONE
						Have your proxy card and 11-digit control number available when you call Toll-Free 1-888-693-8683 using a touch-tone phone and follow the simple instructions to record your vote.
						V OTE BY I NTERNET
						Have your proxy card and 11-digit control number available when you access the website www.cesvote.com and follow the simple instructions to record your vote.
						V OTE BY M AIL
						Please mark, sign and date your proxy card and return it in the postage-paid envelope provided or return it to: Corporate Election Services, P.O. Box 3230, Pittsburgh, PA 15230.

Vote by Telephone

Call Toll-Free using a

touch-tone telephone:

1-888-693-8683

Vote by Internet

Access the Website and

cast your vote:

www.cesvote.com

Vote by Mail

Return your proxy

in the postage-paid

envelope provided

Telephone and Internet access is available 24 hours a day, 7 days a week

and is available until 11:59 PM the day prior to the meeting date.

If you are a 401(k) Plan participant your telephone or Internet vote must be received by

6:00 a.m. Eastern Time on June 3, 2019 in order to be counted in the final tabulation.

Please have your 11-digit control number ready when voting by Internet or Telephone.

ê Proxy card must be signed and dated below. Please fold and detach card at perforation before mailing. ê

R ENT -A-C ENTER , I NC .

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 4, 2019

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED

The undersigned, hereby revoking all prior proxies, appoints Christopher A. Korst and Dawn M. Wolverton jointly and severally, with full power to act alone, as my true and lawful attorneys-in-fact, agents and proxies, with full and several power of substitution to each, to vote all the shares of Common Stock of Rent-A-Center, Inc. which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders of Rent-A-Center, lnc. to be held on June 4, 2019, and at any adjournments and postponements thereof. The above-named proxies are hereby instructed to vote as shown on the reverse side of this card.

THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH, AND HEREBY RATIFIES ALL THAT THE SAID PROXIES MAY DO BY VIRTUE HEREOF.


Date:


Signature

Signature, if held jointly, or office or title held
Please sign exactly as the name appears hereon. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign the corporate name by the president or other authorized officer. If a partnership, please sign in the partnership name by an authorized person.

Please sign, date, and return your proxy promptly in the enclosed envelope.

Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Stockholders to be held June 4, 2019.

The Proxy Statement and our Annual Report to Stockholders are available at:

http://www.saratogaproxy.com/Rentacenter2019

Proxy card must be signed and dated on the reverse side.

ê Please fold and detach card at perforation before mailing. ê

RENT-A-CENTER, INC.

PROXY

The shares represented by this proxy, when properly executed, will be voted as specified by the undersigned stockholder(s) in items 1, 2, and 3 below. If this card contains no specific voting instructions, the shares will be voted FOR ALL NOMINEES in Proposal 1, FOR Proposal 2, and FOR Proposal 3.

The Board of Directors recommends a vote FOR the listed nominees in Proposal 1, and FOR Proposals 2 and 3.

ELECTION OF CLASS I DIRECTORS: as set forth in the accompanying proxy statement.

Nominees:

(1) Harold Lewis

❑ FOR

❑ AGAINST

❑ ABSTAIN

(2) Carol A. McFate

❑ FOR

❑ AGAINST

❑ ABSTAIN

Ratification of the Audit & Risk Committee’s current selection of KPMG LLP as our independent registered public accounting firm for

2019.

❑ FOR

❑ AGAINST

❑ ABSTAIN

Advisory vote on executive compensation.

❑ FOR

❑ AGAINST

❑ ABSTAIN

To transact other business that properly comes before the meeting.

(Continued and to be signed on the reverse side)

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