The tables below show compensation for all directors except for Mr. Marron, whose compensation is in the Summary Compensation
Table.
Messrs. Bowen and Hovde each received stock instead of cash throughout the fiscal year. This stock is not subject to forfeiture or
a vesting period. The amount of stock granted for each quarter to Messrs. Bowen and Hovde is shown below:
The Board believes that to align the interests of our non-employee directors more closely with the interests of the Company’s
other shareholders, each non-employee director should maintain a minimum level of ownership in the Company’s common stock. Our Nominating and Corporate Governance Committee regularly reviews the stock ownership guidelines, and compliance
therewith. Pursuant to the stock ownership guidelines, which are part of our Corporate Governance Guidelines, non-employee directors are expected to reach a multiple of three times their annual cash board retainer fee within four years of joining
the Board. During the fiscal year ended March 31, 2023, all directors met this requirement or were within the four-year phase-in period for meeting the ownership guidelines.
The following tables show information regarding the beneficial ownership of our common stock by:
Directors and Executive Officers
Share ownership is shown as of our Record Date of July 21, 2023.
Name (1)
|
Aggregate
Number of
Beneficial
Shares
|
Percent of
Outstanding
Shares
|
Additional Information (2)
|
Renée Bergeron
|
1,874
|
*
|
Includes 1,874 shares of restricted stock that have not vested as of July 21, 2023.
|
Bruce M. Bowen
|
36,235
|
*
|
Includes 13,200 shares of common stock held by Bowen Holdings LLC, a Virginia limited liability company, which is owned by Mr. Bowen and his three adult children, of which Mr. Bowen serves as manager. Also includes (a) 2,084 shares
held by the Elizabeth Dederich Bowen Trust in which Mr. Bowen's spouse serves as trustee, (b) 17,727 shares held by the Bruce Montague Bowen Trust in which Mr. Bowen serves as trustee, and (c) 2,840 shares of restricted stock that have
not vested as of July 21, 2023.
|
John E. Callies
|
20,448
|
*
|
Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023.
|
C. Thomas Faulders, III
|
44,988
|
*
|
Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023.
|
Eric D. Hovde
|
86,599
|
*
|
Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023. Mr. Hovde is the managing member of Hovde Capital, Ltd., the general partner to Financial Institution Partners III LP,
which owns 20,396 shares. Mr. Hovde is a trustee of The Eric D. and Steven D. Hovde Foundation, which owns 10,000 shares.
|
Ira A. Hunt, III
|
23,908
|
*
|
Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023.
|
Maureen F. Morrison
|
9,940
|
*
|
Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023.
|
Ben Xiang
|
8,268
|
*
|
Includes 2,840 shares of restricted stock that have not vested as of July 21, 2023.
|
Mark P. Marron
|
195,330
|
*
|
Includes (a) 78,874 shares of restricted stock that have not vested as of July 21, 2023, (b) 112,227 shares held in a revocable trust in which Mr. Marron serves as trustee, and (c) 4,229 shares held in
trust for Mr. Marron's dependent child.
|
Elaine D. Marion
|
117,781
|
*
|
Includes (a) 69,155 shares held in a revocable trust in which Ms. Marion serves as trustee, (b) 48,202 shares of restricted stock that have not vested as of July 21, 2023, and (c) 424 shares held in an
IRA.
|
Darren S. Raiguel
|
104,767
|
*
|
Includes (a) 56,434 shares held in a revocable trust in which Mr. Raiguel serves as trustee, and (b) 48,202 shares of restricted stock that have not vested as of July 21, 2023.
|
All directors and executive
officers as a group (11 persons)
|
650,138
|
2.41%
|
|
(1) |
The business address of Mses. Bergeron, Marion and Morrison, and Messrs. Bowen, Callies, Faulders, Hovde, Hunt, Marron, Raiguel, and Xiang is ePlus inc., 13595
Dulles Technology Drive, Herndon, Virginia 20171.
|
(2) |
Nonvested restricted shares included herein are considered beneficially owned since the owner thereof has the right to vote such shares.
|
The share ownership is shown as of the date disclosed in the Additional Information column, and percentages are calculated assuming continued
beneficial ownership at our Record Date of July 21, 2023.
Name of Beneficial Owner
|
Aggregate
Number
of Beneficial
Shares
|
Percent of
Outstanding
Shares
|
Additional Information
|
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
|
4,732,927
|
17.57%
|
BlackRock, Inc. reported that as of December 31, 2022 it had sole voting power over 4,632,230 shares and sole dispositive power over 4,732,927 shares. This information is based on a Schedule 13G/A filed
with the SEC on January 26, 2023. BlackRock indicates in its Schedule 13G/A that one entity, iShares Core S&P Small-Cap ETF, has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the
sale of, or has an interest in the common stock of, more than five percent of ePlus' total outstanding common stock.
|
The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355
|
2,111,123
|
7.84%
|
The Vanguard Group reported that as of December 30, 2022 it had shared voting power over 38,325 shares and sole and shared dispositive power over 2,049,488 and 61,635 shares, respectively. The information is based on a Schedule 13G/A
filed with the SEC on February 9, 2023.
|
River Road Asset Management, LLC
462 S. 4th Street, Suite 2000
Louisville, KY 40202
|
1,900,459
|
7.05%
|
River Road Asset Management, LLC reported that as of December 31, 2022 it had sole voting power over 1,860,523 shares and sole dispositive power over 1,900,459 shares. This information is based on a
Schedule 13G filed with the SEC on February 8, 2023.
|
Geneva Capital Management LLC
411 E Wisconsin Avenue, Suite 2320
Milwaukee, WI 53202
|
1,544,898
|
5.73%
|
Geneva Capital Management LLC reported that as of December 31, 2022 it had shared voting power over 1,521,323 shares and shared dispositive power over 1,544,898 shares. This information is based on a
Schedule 13G filed with the SEC on February 10, 2023.
|
Dimensional Fund Advisors LP
Building One
6300 Bee Cave Road
Austin, TX 78746
|
1,485,138
|
5.51%
|
Dimensional Fund Advisors LP ("DFA") reported that as of December 30, 2022 it had sole voting power over 1,462,983 shares and sole dispositive power over 1,485,138 shares. This information is based on a
Schedule 13G/A filed with the SEC on February 10, 2023. DFA is an investment adviser registered under Section 203 of the Investment Company Act of 1940, and serves as investment manager or sub-adviser to certain other commingled funds,
group trusts and separate accounts (such companies, trusts and accounts, collectively referred to as the "Funds"). In certain cases subsidiaries of DFA may act as an adviser or sub-adviser to certain Funds. In its role as investment
advisor, sub-adviser and/or manager, DFA or its subsidiaires (collectively, "Dimensional") may possess voting and/or investment power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial
owner of the shares of the Company held by the Funds. However, all securities reported in the Schedule 13G/A are owned by the Funds, and Dimensional disclaims beneficial ownership of such securities.
|
EXECUTIVE OFFICERS
The following biographies describe the business experience of each of the Company’s executive officers as of March 31, 2023, except for Mark P.
Marron, who is discussed under the heading “2023 Nominees for Election to the Board of Directors.”
Elaine D. Marion, Age 55
Chief Financial Officer
|
|
Officer of ePlus since 2008
|
Ms. Marion joined us in 1998 and became our CFO on September 1, 2008. From 2004 to 2008, Ms. Marion served as our Vice President of Accounting.
Prior to that, she was the Controller of ePlus Technology, inc., a subsidiary of ePlus, from 1998 to 2004. Before joining ePlus,
Ms. Marion was General Manager of Bristow Development Corporation. Ms. Marion is a board member of the Executive Advisory Board of the College of Business at the University of Mary Washington, and chair of the George Mason University School
of Business Dean’s Advisory Council. Ms. Marion is a graduate of George Mason University, where she earned a Bachelor of Science degree in Business Administration with a concentration in Accounting.
Darren S. Raiguel, Age 52
Chief Operating Officer
|
|
Officer of ePlus since 2018
|
Darren Raiguel joined us in 1997 and served in various sales and management roles until his promotion in April 2011 to Senior Vice President of
SLED (state, local and education) and northeast commercial sales. From November 2014 to May 2018, Mr. Raiguel served as our Executive Vice President of Technology Sales of
ePlus Technology, inc., a
subsidiary of
ePlus, and he became Chief Operating Officer of the Company and President of
ePlus Technology, inc. on
May 7, 2018.
Before joining
ePlus, Mr. Raiguel worked for Computerware, later acquired by Elcom International, from 1992 to 1997. Mr. Raiguel is a graduate of Temple University, where he earned a Bachelor of
Business Administration degree, with dual majors in Marketing and Finance. Mr. Raiguel has participated in numerous industry organizations, councils, and advisory boards throughout his career.
Each of our executive officers is chosen by the Board and holds his or her office until his or her successor shall have been duly chosen and
qualified, or until his or her death, resignation, or removal by the Board.
PROPOSAL 2 – Advisory Vote to Approve Named Executive
Officer Compensation
Shareholders may cast an advisory vote to approve NEO compensation as disclosed in this proxy statement pursuant to Section 14A of the Exchange
Act (commonly referred to as a “say-on-pay” vote). This vote is not intended to address any specific item of compensation, but rather our overall compensation policies and practices relating to our NEOs. Although the vote is non-binding, we
value feedback from our shareholders on compensation and other important matters, and we expect to hold this vote on an annual basis for the foreseeable future. The Board of Directors and the Compensation Committee will consider the voting
results when making future compensation decisions. At our 2022 Annual Meeting, approximately 98% of the votes cast by our shareholders approved the compensation in the 2022 proxy statement for our NEOs.
In deciding how to vote on this proposal, we encourage you to review the CD&A and 2023 Executive Compensation sections of this proxy
statement for a detailed description of our executive compensation program. As described in the CD&A, the Compensation Committee has designed our compensation program with the objective of rewarding achievement of specific goals that
align the interests of management with the interests of our shareholders.
We are asking our shareholders to indicate their support for our NEOs’ compensation as described in this proxy statement by voting “FOR” the
following resolution at our 2023 Annual Meeting:
“RESOLVED, that the shareholders of ePlus approve, on an advisory basis, the compensation paid to the
named executive officers, as disclosed in the Company’s proxy statement for the 2023 Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the CD&A, the Summary Compensation
Table, and the other related compensation tables and narrative disclosure.”
The affirmative vote of the holders of a majority of the shares entitled to vote on the proposal, present in person or represented by proxy at
the meeting, is required to approve Proposal 2. Abstentions will have the same effect as voting “AGAINST” this proposal, and broker non-votes will have no effect on the vote for this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL
ON AN ADVISORY BASIS OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
AS DISCLOSED IN THE CD&A, THE SUMMARY COMPENSATION TABLE,
AND OTHER RELATED DISCLOSURE AND TABLES IN THIS PROXY STATEMENT
COMPENSATION COMMITTEE REPORT
The information contained in this report shall not be deemed to be (i) soliciting material, (ii) filed with the SEC, (iii) subject to Regulations
14A or 14C of the Exchange Act, or (iv) subject to the liabilities of Section 18 of the Exchange Act. Further, this report shall not be deemed incorporated by reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation of this proxy statement by reference, except to the extent the Company specifically incorporates this report by reference
into such filing.
The Compensation Committee has reviewed the CD&A contained in this proxy statement and discussed the CD&A with management. Based on its
review and discussions with management, the Compensation Committee recommended to our Board of Directors that the CD&A, as it appears below, be included in this proxy statement and incorporated by reference into the Company’s 2023 Annual
Report.
Submitted by the Compensation Committee
John E. Callies, Chair
Renée Bergeron
C. Thomas Faulders, III
Eric D. Hovde
Ira A. Hunt, III
COMPENSATION DISCUSSION AND ANALYSIS
This CD&A provides an overview of our executive compensation program for our fiscal year 2023, and our executive compensation philosophies
and objectives. This CD&A reviews compensation for our three NEOs: our CEO, CFO, and COO.
Our NEOs for the fiscal year ended March 31, 2023, were:
|
|
Mark P. Marron
|
Chief Executive Officer and President
|
Elaine D. Marion
|
Chief Financial Officer
|
Darren S. Raiguel
|
Chief Operating Officer
|
This CD&A is divided into three sections:
Overview
|
• Fiscal Year 2023 Financial Highlights
• Our Executive Compensation Program
• Our Executive Compensation Practices
• 2022 Say-On-Pay and Say-On-Frequency Votes
• Long-Term Cash Incentive Compensation
|
What We Pay and Why
|
• Fiscal Year 2023 Executive Compensation Decisions
• Base Salary
• Annual Cash Incentive Awards
• Long-Term Incentive Program
• Other Elements of Our Fiscal Year 2023 Executive Compensation Program
|
How We Make Executive Compensation Decisions
|
• Role of the Board and Compensation Committee, and our Executive Officers
• Guidance from the Compensation Committee’s Independent Compensation Consultant
• Comparison Peer Groups
• Alignment of Senior Management Team to Drive Performance
|
Fiscal Year 2023 Highlights
|
• |
Net sales increased 13.5% from the prior year to $2,067.7 million
|
|
• |
Services revenue increased 9.9% to $264.4 million
|
|
• |
Consolidated gross profit increased 12.3% to $517.5 million
|
|
• |
Consolidated operating income increased 12.8% to $166.2 million
|
|
• |
Net earnings increased 13.0% to $119.4 million
|
|
• |
Diluted earnings per share increased 14.0% to $4.48
|
Past Five Years Highlights
Over the past five years from fiscal year 2019 to fiscal year 2023, our financial performance has been strong.
|
• |
Net sales grew at a compound annual growth rate ("CAGR") of 11%.
|
|
• |
Services revenue grew at a CAGR of 15%.
|
|
• |
Gross profit grew at a CAGR of 12%.
|
|
• |
Consolidated operating income increased at a CAGR of 20%.
|
|
• |
Net earnings grew at a CAGR of 17%.
|
|
• |
Diluted earnings per share increased at a CAGR of 18%.
|
Over the past five fiscal years, we have returned over $60 million to shareholders in the form of stock repurchases.
Our Executive Compensation Program
The Company’s goal for its executive compensation (as well as its non-executive compensation) program is to attract,
motivate, and retain a talented, entrepreneurial, ethical, and creative executive team who will provide leadership for the Company’s success in dynamic and competitive markets, while remaining attuned to the risks facing the Company. The
Company seeks to accomplish this goal in a way that rewards performance, is aligned with its business strategy, and maximizes shareholders’ long-term interests. The Company’s executive compensation program is also intended to promote and
maintain stability within the executive team by issuing restricted stock with multi-year vesting terms. The table below summarizes the components of our fiscal year 2023 executive compensation.
Pay Element
|
|
Salary
|
Annual
Cash Incentive
|
Long-Term
Cash Incentive
|
Restricted
Stock
|
Who Receives
|
All NEOs
|
All NEOs
|
All NEOs
|
All NEOs
|
When Granted
|
Annually
|
Annually
|
Annually
|
Annually
|
Form of Delivery
|
Cash
|
Cash
|
Cash
|
Equity
|
Performance Type
|
Short-Term Fixed
|
Short-Term Variable
|
Long-Term Variable
|
Long-Term Fixed
|
Performance Period
|
1 Year
|
1 Year
|
3 Years
|
Vesting Annually
over 3 years
|
How Payout Determined
|
Amount Set
by Compensation Committee
|
Formula Determined
by Compensation Committee
|
Formula Determined
by Compensation Committee
|
Amount Determined
by Compensation Committee
|
Performance Measures
|
Individual
|
Consolidated Net Sales; Financing Segment Operating Income; Earnings Before Taxes; Services Gross Profit
|
Target Increase in Operating Income and Net Sales
|
Time-Based
|
Our Executive Compensation Practices
Our Compensation Committee annually reviews the Company’s executive compensation program to evaluate whether it is aligned with shareholder
interests and supports the Company’s executive compensation philosophies and objectives. Our executive compensation practices are outlined below, each of which the Compensation Committee believes reinforces our executive compensation
objectives:
|
Our Executive Compensation Practices
|
As part of its review of the Company’s executive compensation program, the Compensation Committee considers the results of the annual,
non-binding advisory vote by the shareholders to approve named executive officer compensation (the “Say-On-Pay Vote”). Approximately 98% of the votes cast for the Company’s Say-On-Pay Vote at our 2022
Annual Meeting were to approve the Committee’s decisions regarding executive compensation. The Compensation Committee believes the results of the Say-On-Pay vote demonstrate shareholder support for the Company’s executive compensation
program. Accordingly, the Compensation Committee believes that the Company’s executive compensation philosophies and objectives continue to be appropriate, and therefore made no material changes to the Company’s executive compensation program
in response to the 2022 Say-On-Pay vote.
Additionally, at our 2022 Annual Meeting, the Company’s shareholders voted on a non-binding advisory vote regarding the frequency of future
Say-On-Pay Votes (the “Say-On-Frequency Vote”). The highest number of votes cast by the Company’s shareholders at the 2022 Annual Meeting (approximately 93% of the votes cast) for the Company’s
Say-On-Frequency Vote was in favor of holding such advisory vote every year, as recommended by the Board. Based on the outcome of the Say-On-Frequency Vote, the Board has determined that the Company will continue to hold the Say-On-Pay Vote
every year until the next required Say-On-Frequency Vote, which is required to occur no later than the Company’s 2028 Annual Meeting of Shareholders.
Long-Term Cash Incentive Compensation
Beginning with the 2020 fiscal year, the Compensation Committee revised the executive compensation program by adding a long-term cash component
to further encourage executives to focus on the long-term value to shareholders. The long-term cash awards are made pursuant to the Employee Long-Term Incentive Plan in effect at the date of the award and are based on one or more three-year
financial metrics. For more information on the long-term cash incentive compensation, see “Long-Term Incentive Program” below.
Fiscal Year 2023 Executive Compensation Decisions
Consistent with our pay philosophy and executive compensation program objectives described below, in determining the fiscal year 2023 executive
compensation levels and the mix of compensation elements for each NEO, the Compensation Committee and our CEO (in making recommendations regarding the CFO’s and COO’s compensation) considered each NEO’s scope of responsibility, prior
performance and experience, and Company performance, as more fully described below under “How We Make Executive Compensation Decisions.”
Base salary represents annual fixed cash compensation and is a standard element of compensation necessary to attract and retain talent. It is the
minimum payment for a satisfactory level of individual performance as long as the executive remains employed with the Company. Base salary is set by the Compensation Committee, and ratified by the Board, after taking into account the
competitive landscape—the compensation practices of the companies in our selected peer group and survey data from a broader index of comparable companies—as well as our business strategy and short- and long-term performance goals, and
individual factors, such as position, individual performance and contribution, length of service with the Company, experience in the position, and placement within the general base salary range offered to our NEOs.
The base salary for each of our NEOs as of March 31, 2023, and 2022 is set forth below:
|
|
Base Salary as of March 31,
|
|
Named Executive Officer
|
|
2023
|
|
|
2022
|
|
Mark P. Marron
|
|
$
|
925,000
|
|
|
$
|
875,000
|
|
Elaine D. Marion
|
|
$
|
500,000
|
|
|
$
|
475,000
|
|
Darren S. Raiguel
|
|
$
|
500,000
|
|
|
$
|
475,000
|
|
Effective April 1, 2023, Mr. Raiguel’s annual base salary was increased to $525,000.
Annual Cash Incentive Awards
During the 2023 fiscal year, we provided our NEOs with short-term cash incentive compensation through our annual Cash Incentive Plan. This
short-term, variable cash compensation represents a significant portion of each NEO’s target total cash compensation opportunity in a given year.
Cash Incentive Plan Pay for Performance Alignment
Our Compensation Committee annually reviews, and then sets, performance goals under a Cash Incentive Plan, which was adopted by the Compensation
Committee in 2018 (“2018 CIP”). During the 2023 fiscal year, short-term performance goals and cash awards were made under our 2018 CIP. The combination of performance goals the Compensation Committee
chose for fiscal year 2023 emphasizes factors that the Compensation Committee believes are important to Company strategy, future growth and enhancing shareholder value. The Compensation Committee administers the 2018 CIP and has full
authority to determine which of the Company’s executive officers will participate in the 2018 CIP; the terms and amounts of each participant’s minimum, target, and maximum awards; and the period during which the performance is to be measured.
Cash Incentive Awards for Fiscal Year 2023
For the fiscal year ended March 31, 2023, our NEOs’ cash bonuses were earned pursuant to the 2018 CIP, based on the following financial
performance goals: consolidated net sales (20%), financing segment operating income (20%), earnings before tax (30%), and services gross profit (30%).
The award opportunity in fiscal year 2023 was based on a target amount, which was adjusted based on the level of attainment of financial
performance as set forth in each participant’s award agreement, and payouts may range between 0% to 200% of target award amounts. For fiscal year 2023, the target award amount for each of the NEOs was 100% of their base salary amount. All
three of the participating executive officers had the same financial performance goals and the same performance weights. The fiscal year 2023 financial performance weights and target amounts for each participant were as follows:
|
|
Consolidated Net Sales
|
|
|
Financing Segment Operating Income
|
|
|
Earnings Before Taxes
|
|
|
Services Gross Profit
|
|
|
|
|
Named
Executive Officer
|
|
Percentage of
Total Bonus
|
|
|
Target Bonus
Amount
|
|
|
Percentage of
Total Bonus
|
|
|
Target Bonus
Amount
|
|
|
Percentage of
Total Bonus
|
|
|
Target Bonus
Amount
|
|
|
Percentage of
Total Bonus
|
|
|
Target Bonus
Amount
|
|
|
Total Target
Bonus Amount
|
|
Mark P. Marron
|
|
|
20.0
|
%
|
|
$
|
185,000
|
|
|
|
20.0
|
%
|
|
$
|
185,000
|
|
|
|
30.0
|
%
|
|
$
|
277,500
|
|
|
|
30.0
|
%
|
|
$
|
277,500
|
|
|
$
|
925,000
|
|
Elaine D. Marion
|
|
|
20.0
|
%
|
|
$
|
100,000
|
|
|
|
20.0
|
%
|
|
$
|
100,000
|
|
|
|
30.0
|
%
|
|
$
|
150,000
|
|
|
|
30.0
|
%
|
|
$
|
150,000
|
|
|
$
|
500,000
|
|
Darren S. Raiguel
|
|
|
20.0
|
%
|
|
$
|
100,000
|
|
|
|
20.0
|
%
|
|
$
|
100,000
|
|
|
|
30.0
|
%
|
|
$
|
150,000
|
|
|
|
30.0
|
%
|
|
$
|
150,000
|
|
|
$
|
500,000
|
|
The 2018 CIP also permits the exclusion of all items of income, gain or loss determined by the Board to be extraordinary or unusual in nature and not incurred or realized in the ordinary course of business, the incentive compensation expensed by ePlus for payments under the 2018 CIP, and any revenue, gain, or loss attributable to the business operations of any entity acquired by us during the fiscal year.
Possible bonus payouts ranged between 0% and 200% of the target amount, depending on the level of achievement of the performance goals for the
fiscal year 2023. The financial performance goals were as follows:
|
|
Performance Goals
|
|
Performance Level
(Dollars in thousands)
|
|
Consolidated Net
Sales
(20%)
|
|
|
Financing Segment
Operating Income
(20%)
|
|
|
Earnings Before
Taxes
(30%)
|
|
|
Services Gross
Profit
(30%)
|
|
Maximum
|
|
|
n/a(1)
|
|
|
|
n/a(1)
|
|
|
|
n/a(1)
|
|
|
|
n/a(1)
|
|
Target
|
|
$
|
1,926,732
|
|
|
$
|
33,969
|
|
|
$
|
149,793
|
|
|
$
|
104,460
|
|
Threshold (75% of Performance Goal)
|
|
$
|
1,445,049
|
|
|
$
|
25,477
|
|
|
$
|
112,345
|
|
|
$
|
78,345
|
|
Below Threshold
|
|
< $1,445,049
|
|
|
< $25,477
|
|
|
< $112,345
|
|
|
< $78,345
|
|
(1) |
The maximum payout of 200% of the target award can be achieved based on the results of one or more of the performance goals. The threshold and escalators for each performance goal are as follows:
|
Amount of Goal Achieved
|
Award Amount
|
Less than 75% of Goal Target
|
No award relating to that target
|
Between 75% - 100% of Goal Target
|
Award shall be 50% of target, plus an additional 2.0% for each percentage point over 75% of Goal Target achieved
|
100% of Goal Target
|
100% of target for that Goal
|
More than 100% of Goal Target
|
100% of target for that Goal, plus an additional 5.0% for each percentage point over 100% of Goal Target achieved
|
Total Maximum Award for all goals combined
|
200% of Target
|
At the conclusion of the fiscal year ended March 31, 2023, the Compensation Committee determined which of the financial objectives described
under the 2018 CIP and in the award agreements were achieved. There were no waivers or modifications to any specified performance targets, goals, or conditions with respect to the 2018 CIP or award agreements. The achievement of the financial
performance goals is set forth below.
Performance Criteria
(Dollars in thousands)
|
|
Goal
|
|
|
Achievement (1)
|
|
|
Amount of
Goal Achieved
|
|
Consolidated Net Sales
|
|
$
|
1,926,732
|
|
|
$
|
2,057,882
|
|
|
|
106.8
|
%
|
Financing Segment Operating Income
|
|
$
|
33,969
|
|
|
$
|
26,455
|
|
|
|
77.9
|
%
|
Earnings Before Taxes
|
|
$
|
149,793
|
|
|
$
|
164,449
|
|
|
|
109.8
|
%
|
Services Gross Profit
|
|
$
|
104,460
|
|
|
$
|
93,497
|
|
|
|
89.5
|
%
|
(1) |
Performance Criteria achievement were adjusted to exclude the incentive compensation accrued by the Company, and income and expenses related to acquisitions, if any, and the Performance Criteria goals
were adjusted to exclude incentive compensation targets.
|
The following table details the payments earned in the fiscal year ended March 31, 2023, and 2022, respectively (but paid in the subsequent
fiscal year) for each NEO:
Named Executive Officer
|
|
FY 2023 Annual Incentive
Cash Payment Earned
|
|
|
FY 2022 Annual Incentive
Cash Payment Earned
|
|
|
% Change
|
|
Mark P. Marron
|
|
$
|
983,627
|
|
|
$
|
1,750,000
|
|
|
|
(44
|
%)
|
Elaine D. Marion
|
|
$
|
531,690
|
|
|
$
|
950,000
|
|
|
|
(44
|
%)
|
Darren S. Raiguel
|
|
$
|
531,690
|
|
|
$
|
950,000
|
|
|
|
(44
|
%)
|
Long-Term Incentive Program
Under our 2021 Employee Long-Term Incentive Plan (“2021 Employee LTIP”), the Compensation Committee has
the authority to award various forms of long-term incentive compensation grants, such as cash awards, stock options, restricted stock awards, and restricted stock units. The Compensation Committee’s objectives for the fiscal year 2023
long-term equity-based and cash incentive awards to our NEOs were to focus executives on long-term profitable growth and shareholder value creation and the Company’s long-term strategic plan, and retain the services of our executives through
multi-year vesting requirements.
Mr. Marron makes recommendations to the Compensation Committee for equity grants to NEOs, including to himself; however, the Compensation
Committee deliberates and reaches its own decision regarding grants to all NEOs, including Mr. Marron, who does not participate in any deliberations or votes regarding his own compensation. When determining the level of the grant, the
Compensation Committee considers each NEO’s functional and enterprise management responsibilities, potential contributions to the Company’s profitability and growth, the value of prior long-term incentive grants and other non-cash and cash
compensation, regular analysis of how the Company performed on multiple financial metrics as compared to certain peers, information from our independent compensation consultant (if any), and each executive’s total compensation, including cash
compensation. However, the Compensation Committee does not use a formula or assign a particular weight to any given factor in determining equity award grant levels. Rather, the Compensation Committee’s determination of grant levels is
subjective, and the Compensation Committee grants awards that in its judgment are reasonably competitive.
The Compensation Committee believes that restricted stock helps to create incentives for performance and further align the interests of
executives with those of shareholders because the stock’s value increases or decreases in conjunction with the Company’s stock price. In addition, the Compensation Committee believes that granting awards with multi-year vesting periods
creates a substantial retention incentive and encourages the NEOs to focus on the Company’s long-term business objectives and stock performance. All outstanding restricted shares vesting for, or granted to, executive officers and other
employees during the fiscal year ended March 31, 2023, vest over a three-year period.
For fiscal year 2023, the Compensation Committee used a combination of long-term incentive vehicles, including time-based restricted stock and
cash performance awards. These vehicles focus NEOs on driving long-term profitable growth and shareholder value creation.
Element of LTI
|
Weight (by value)
|
Overview of Design
|
Time-Based Restricted Stock
|
CEO: 89%
Other NEOs: 90%
|
• Vests in three equal increments on the first three one-year anniversaries of the grant
|
Cash Performance Award
|
CEO: 11%
Other NEOs: 10%
|
• Grant is tied to achievement of operating income growth
• Three-year performance period
• Vesting and payout occurs on third year anniversary of grant
• Actual payout can range between 0% and 150%
|
The table below shows the long-term incentive award values granted in fiscal year 2023 for each of the NEOs:
Named Executive
Officer
|
|
Time-Based
Restricted Stock (1)
|
|
|
Cash Performance Award (2)
|
|
|
Total Value
|
|
Mark P. Marron
|
|
$
|
2,199,967
|
|
|
$
|
275,000
|
|
|
$
|
2,474,967
|
|
Elaine D. Marion
|
|
$
|
1,349,994
|
|
|
$
|
150,000
|
|
|
$
|
1,499,994
|
|
Darren S. Raiguel
|
|
$
|
1,349,994
|
|
|
$
|
150,000
|
|
|
$
|
1,499,994
|
|
(1) |
Award amounts for Time-Based Restricted Stock were determined based on the closing price of our common stock on the date of grant on June 8, 2022.
|
(2) |
Amounts shown are the target amounts. The threshold and escalators for each performance goal are as follows:
|
Amount of Goal Achieved
|
Award Amount
|
Less than 75% of Goal Target
|
No award relating to that target
|
Between 75% - 100% of Goal Target
|
Award shall be 50% of target, plus an additional 2.0% for each percentage point over 75% of Goal Target achieved
|
100% of Goal Target
|
100% of target for that Goal
|
More than 100% of Goal Target
|
100% of target for that Goal, plus an additional 5.0% for each percentage point over 100% of Goal Target achieved
|
Total Maximum Award for all goals combined
|
150% of Target
|
Our Compensation Committee granted long-term cash performance awards in fiscal year 2021 that pay out based on a specific pre-established
performance goal. Performance was measured over the three-fiscal-year performance period ending March 31, 2023. At the conclusion of the fiscal year ended March 31, 2023, the Compensation Committee determined which of the financial objectives
described under the long-term cash performance award agreements for the performance period of April 1, 2020, through March 31, 2023, were achieved. There were no waivers or modifications to any specified performance targets, goals, or
conditions with respect to the award agreements. The achievement of the financial performance goals is set forth below.
Performance Criteria
(Dollars in thousands)
|
|
Goal
|
|
|
Achievement (1)
|
|
|
Amount of
Goal Achieved
|
|
Increase in operating income from
April 1, 2020, to March 31, 2023
|
|
$
|
101,711
|
|
|
$
|
159,414
|
|
|
|
156.7
|
%
|
(1) |
Performance Criteria were adjusted to exclude income and expenses related to our July 2022 acquisition of assets of Future Com, Ltd. and our December 2020 acquisition of assets of Systems Management
Planning, Inc.
|
The following table details the payments earned during the three-fiscal-year period ended March 31, 2023, (but paid in the subsequent fiscal year)
for each NEO:
Named Executive Officer
|
|
Long-Term Cash Payment Earned
Performance Period
April 1, 2020 to March 31, 2023
|
|
Mark P. Marron
|
|
$
|
300,000
|
|
Elaine D. Marion
|
|
$
|
150,000
|
|
Darren S. Raiguel
|
|
$
|
150,000
|
|
More information about the long-term incentive awards granted to each NEO in fiscal year 2023 are set forth in “Grants of Plan-Based Awards.”
The Compensation Committee determines compensation for our CEO using generally the same criteria it uses for other executive officers.
Other Elements of Our Fiscal Year 2023 Executive Compensation Program
Severance and Change in Control Provisions
Severance and change in control provisions are designed to facilitate our ability to attract and retain executives as we compete for talented
employees in a marketplace where such protections are frequently offered. Severance benefits are designed to provide benefits to ease an executive’s transition following an employment termination by the Company due to changes in our
employment needs. Additionally, severance agreements increase the enforceability of non-competition provisions to which all of our executives are contractually bound. Change in control benefits are intended to encourage executives to remain
focused on the Company’s business in the event of rumored or actual fundamental corporate changes. Both severance and change in control benefits are often an important part of an executive’s compensation package. See further details under the
section entitled “Employment Agreements, Severance and Change in Control Provisions.”
Our executive compensation arrangements with our NEOs, including our 2018 CIP, employment agreements, and long-term cash performance awards,
provide that bonuses or other compensation are subject to recovery by the Company to the extent required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) and the
Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), and any regulations promulgated thereunder. This provision does not apply to base salary, or to time-vested restricted stock which is not awarded, granted,
or vested based on financial measures required to be reported under the securities laws.
The 2018 CIP includes a provision for an adjusted award if it is determined that an award was paid based on incorrect financial results, and
permits the Compensation Committee to lower the amount of such payment so that it reflects the amount that would have been paid based on the correct financial results and require, to the extent permitted by law, the participant to reimburse
to the Company any amount received with respect to such an award. The 2018 CIP also provides that cash payments under the plan are subject to recovery by the Company to the extent required by Dodd-Frank and Sarbanes-Oxley, and any regulations
promulgated thereunder. The SEC has recently finalized rules promulgating Dodd-Frank’s clawback provisions and NASDAQ has finalized its listing standards requiring the development and implementation of the clawback policy mandated by
Dodd-Frank, which we are in the process of preparing ahead of the compliance deadline later this year.
Stock Ownership Guidelines
Our Board has adopted stock ownership guidelines for our executive officers to further align the interests of our executive officers with the
interests of our shareholders. The guidelines are expressed as a multiple of the executives’ base salary as of each January 1st, or as of the date they are first identified as executive officers. Our non-CEO executive officers are expected to retain stock ownership valued at a multiple of two times their annual
base salary within five years of first being identified as an executive officer. Our CEO is expected to retain stock ownership valued at a multiple of five times his annual base salary within the same time frame. All executive officers are
expected to retain one-half of all equity grants until such time as the target stock ownership is reached. The guidelines may be waived at the discretion of our Compensation Committee in the event of an extraordinary expense (such as, for
example, housing or higher education needs), or if compliance would create a severe hardship or prevent an executive from complying with a court order, as in the case of a divorce or other property settlement. However, the Company expects
such instances to be rare, and has not granted any waivers. At this time, all of our executive officers meet their respective guideline ownership level.
Hedging and Short Sales Policies
Our Insider Trading Policy applies to all of our employees and directors. Under the policy, our directors, officers, and employees who are
“Insiders” (as defined in the policy) are prohibited from hedging, including using prepaid variable forward contracts, equity swaps, collars and exchange funds, and similar transactions that establish downside price protection, including
short sales, and buying or selling put options, call options, or other derivatives of Company securities.
All trades of Company stock by directors, executive officers, and other insiders require pre-approval from our Insider Trading Compliance Officer
and must be made in accordance with the Insider Trading Policy.
Tax and Accounting Considerations
Deductibility of Executive Compensation
When designing compensation plans, the Compensation Committee takes into consideration any changes to IRC Section 162(m), as applicable. The
Company believes that tax deductibility of compensation is an important factor, but not the sole factor, to be considered in setting executive compensation policy, and the Compensation Committee has authorized payments that are not deductible
for federal income tax purposes when it believes that such payments are appropriate to attract, retain, and incentivize executive talent.
Our executive employment agreements also provide that, if a severance payment is subject to the excise tax provided in IRC Section 280G, the
executive will receive a lesser payment if he or she would receive a greater after-tax benefit, which will better enable the Company to obtain a tax deduction.
Accounting Considerations
Accounting considerations also play a role in the design of our executive compensation programs and policies. Codification Topic Compensation—Stock Compensation requires us to expense the cost of stock-based compensation awards. We consider the
relative impact of the expense, in addition to other factors such as shareholder dilution, retentive impact, motivational impact, and the overall competitiveness of compensation packages when selecting long-term equity incentive instruments.
Our NEOs participate in benefit plans generally available to all of our employees, including medical, health, life insurance, and disability
plans. They also are eligible to participate in our 401(k) plan, and receive Company matching contributions, to the extent made by the Company, on the same terms as generally available to our employees. Pursuant to their employment
agreements, they also are entitled to reimbursement for annual participation in an executive health assessment program. During our fiscal year ended March 31, 2023, our CFO and COO have each completed an executive coaching program designed
to further enhance their leadership skills and potential.
Our executive officers are provided with relatively limited perquisites, which we believe is in the best interests of the Company. In some years,
certain of our executive officers have received certain Company-paid travel, meals, and entertainment costs for their families to attend the Company’s sales meeting. All attendees at the sales meeting are likewise eligible to have their
families attend the meeting. The Company pays the same costs for the executives as for all attendees at the meeting. The costs incurred with regard to the family members of our named executive officers are included in our Summary Compensation
Table in the compensaton for the year ended March 31, 2023; however, no such meetings were held during the years ended March 31, 2021, and March 31, 2022, due to the COVID-19 pandemic. Additionally, from time to time, some of our employees
attend sales meetings or other events held by our vendor partners, to which guests are invited. To the extent our executive officers’ guests attend such an event, the benefit obtained by the guest would be included as and if required in our
Summary Compensation Table.
HOW WE MAKE EXECUTIVE COMPENSATION DECISIONS
Role of the Board and Compensation Committee, and our Chief Executive Officer
Role of the Board and Compensation Committee
The Compensation Committee, which is composed entirely of independent directors, generally establishes the components of our executive officer
compensation program and may evaluate the components from time to time. The Compensation Committee is responsible for evaluating and setting the compensation for our CEO, CFO, and COO. The Compensation Committee reviews the executive
compensation program on an annual basis, with awards generally being made in June. Compensation decisions may be made at other times of the year in the case of promotions, new hires, or changes in responsibilities. In making these
determinations, the Compensation Committee may consider such factors as the Company’s performance, the individual performance of an executive officer, information from our independent compensation consultant (if any), and recommendations from
management. In some cases, our Board of Directors ratifies the Compensation Committee’s decisions. The Compensation Committee also considers any recommendations from the Board relating to the CEO’s performance.
Role of the Chief Executive Officer
Our CEO, Mr. Marron, is responsible for the implementation and administration of our executive compensation program during the fiscal year. Mr.
Marron recommended the overall structure for our executive compensation program, including base salary, metrics for the 2018 CIP award agreements for fiscal year 2023, metrics for the long-term cash awards made pursuant to our 2021 Employee
LTIP, and the amount and vesting schedule of equity awards to be granted. The final decisions regarding executive compensation were, however, made by the Compensation Committee. Additionally, the CEO is not present during any deliberations or
voting regarding his own compensation.
Guidance from the Compensation Committee’s Independent Compensation Consultant
An independent compensation consultant, Pay Governance LLC (the “Compensation Consultant”), was retained
by the Compensation Committee in February 2023. The Compensation Committee reviewed the independence of the Compensation Consultant under Nasdaq and SEC rules, and concluded that the work of the Compensation Consultant has not raised any
conflict of interest. The Compensation Consultant is engaged directly by the Compensation Committee. The Compensation Consultant assisted the Compensation Committee with developing a publicly traded peer group for benchmarking executive pay
levels and design, reviewing incentive plan design practices and recommending changes to incentive plans, and analyzing target compensation levels for executive officers relative to peer group companies and relevant published survey sources.
Prior to retaining Pay Governance LLC in February 2023, the Company had not retained a Compensation Consultant since its retention of Pearl Meyer + Partners, LLC in the spring of 2021, which relied on its 2019 market analysis.
The Compensation Committee approves the compensation for the NEOs based on its own evaluation, input from our CEO, internal pay equity
considerations, the tenure, role, and performance of each NEO, as well as input from the compensation consultant and market data. The CEO is not present during any deliberations or voting regarding his own compensation.
The Compensation Committee periodically reviews the compensation practices of peer companies as part of its decision-making process so it can set
total compensation levels that it believes are reasonably competitive. In March 2023, the Compensation Committee, with the assistance of the Compensation Consultant, determined a new peer group (as the prior peer group dated back to 2019). In
selecting the peer group, the Compensation Committee considered potential peers’ primary industry, total review, market capitalization, gross margin, operating income margin, number of employees, and cumulative Total Shareholder Return
(“TSR”) on a 1-year, 3-year and 5-year basis. The Compensation Committee also considered the pay practices of two additional companies from a design standpoint only.
Peer Group
|
CACI International Inc.
|
EPAM Systems, Inc.
|
ASGN Incorporated
|
Amdocs Limited**
|
ScanSource, Inc.
|
PC Connection, Inc.
|
Pure Storage, Inc.
|
Unisys Corporation*
|
Itron, Inc.
|
ICF International, Inc.*
|
Thoughtworks Holding, Inc.
|
CSG Systems Internationals, Inc.*
|
Perficient, Inc.*
|
StarTek, Inc.*
|
Climb Global Solutions, Inc.
|
* |
Only these five companies provided compensation information for the COO role.
|
** |
Amdocs Limited did not publicly disclose its executive compensation program, and therefore was not included in the analysis.
|
The Compensation Consultant also provided a secondary market reference, Mercer’s 2022 U.S. Executive Benchmark Database, which was size-adjusted
using regression data to approximate ePlus’ then-current revenue of $1.8 billion.
The Compensation Committee considered this broad range of data to ascertain where the compensation for our executive officers is positioned with
respect to the median to properly reflect various factors, such as our Company’s performance, the unique characteristics of each executive’s position, and applicable retention considerations. The Compensation Committee does not set
compensation components to meet specific benchmarks, such as targeting salaries “above the median” or equity compensation at a particular percentile.
Alignment of Senior Management Team to Drive Performance
Our performance goals are designed to drive shareholder value creation by aligning members of senior management with our strategy and common
performance goals. To match performance to our goals, the Company engages in extensive communications on what members of senior management, together with their teams, should strive toward to impact achievement of the Company’s goals. We believe
this understanding of the link between individual, team, and Company performance helps the Company to focus on actions that have the greatest potential to drive the Company toward more profitable growth and shareholder value.
2023 EXECUTIVE COMPENSATION
The following table includes information concerning compensation earned by our NEOs during fiscal years 2023, 2022, and 2021.
2023 Summary Compensation Table
Name and Principal Position
|
Fiscal Year
|
|
Salary
|
|
|
Stock Awards
(1)
|
|
|
Non-Equity Incentive Plan Compensation
(2)
|
|
|
All Other Compensation
(3)
|
|
|
Total
|
|
Mark P. Marron – President and Chief Executive Officer
|
2023
|
|
$
|
916,500
|
|
|
$
|
2,199,967
|
|
|
$
|
1,283,627
|
|
|
$
|
22,131
|
|
|
$
|
4,422,225
|
|
2022
|
|
$
|
846,154
|
|
|
$
|
1,999,964
|
|
|
$
|
2,050,000
|
|
|
$
|
4,000
|
|
|
$
|
4,900,118
|
|
2021
|
|
$
|
800,000
|
|
|
$
|
1,799,979
|
|
|
$
|
1,236,267
|
|
|
$
|
3,700
|
|
|
$
|
3,839,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elaine D. Marion – Chief Financial Officer
|
2023
|
|
$
|
495,750
|
|
|
$
|
1,349,994
|
|
|
$
|
681,690
|
|
|
$
|
51,452
|
|
|
$
|
2,578,886
|
|
2022
|
|
$
|
465,385
|
|
|
$
|
1,199,923
|
|
|
$
|
1,100,000
|
|
|
$
|
4,000
|
|
|
$
|
2,769,308
|
|
2021
|
|
$
|
450,000
|
|
|
$
|
1,049,958
|
|
|
$
|
618,133
|
|
|
$
|
3,700
|
|
|
$
|
2,121,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darren S. Raiguel – Chief Operating Officer
|
2023
|
|
$
|
495,750
|
|
|
$
|
1,349,994
|
|
|
$
|
681,690
|
|
|
$
|
58,096
|
|
|
$
|
2,585,530
|
|
2022
|
|
$
|
465,385
|
|
|
$
|
1,199,923
|
|
|
$
|
1,100,000
|
|
|
$
|
4,000
|
|
|
$
|
2,769,308
|
|
2021
|
|
$
|
450,000
|
|
|
$
|
1,049,958
|
|
|
$
|
618,133
|
|
|
$
|
3,700
|
|
|
$
|
2,121,791
|
|
(1) |
The values in this column represent the aggregate grant date fair values of restricted stock awards granted in the respective fiscal year, computed in accordance with Codification Topic Compensation—Stock Compensation. Assumptions used in calculating these values may be found in Note 13 of our financial statements in our 2023 Form 10-K. Each of these amounts reflect our expected
aggregate accounting expense for these awards as of the grant date and do not necessarily correspond to the actual values that will be expensed by us or realized by the NEOs.
|
(2) |
These amounts reflect cash payments under our 2018 CIP, which were earned during the fiscal year identified, as disclosed in Annual Cash Incentive Awards above in
the last table under the “FY 2023 Annual Incentive Cash Payment Earned” column, for the fiscal years ended March 31, 2023, and 2022. For the fiscal years ended March 31, 2023 and 2022, the amount also includes cash payments earned under
our 2012 Employee LTIP, which were earned over a three-year performance period, as disclosed in Long-Term Incentive Program above in the last table under the “Long-Term Cash Payment Earned
Performance Period April 1, 2020, to March 31, 2023” column. Both the annual cash award and the long-term cash award payments were received after the conclusion of the fiscal year in which they were earned. A detailed description of the
fiscal year 2023 payments can be found in the CD&A.
|
(3) |
The “All Other Compensation” includes imputed income relating to group life insurance, and a company match to our 401(k) plan, both of which are available to all employees on the same terms, as well as a
gross-up of costs relating to their and their families’ attendance at the Company’s sales meeting for high-perfomers, which was available for all attendees at the meeting. In addition, “All Other Compensation” includes professional
coaching services provided to Mr. Raiguel (with a value of $34,635) and to Ms. Marion (with a value of $34,000). All of our NEOs are entitled to an annual executive physical. For health privacy reasons, each NEO has been attributed a
cost of $3,750, regardless of whether such benefit was used.
|
From time to time, Mr. Raiguel attends events hosted by our vendor business partners. On one such trip, the
vendor partner paid the expenses for Mr. Raiguel’s spouse to accompany him, with no related expense to the Company, and therefore no related amount is included in “All Other Compensation.”
2022 Grants of Plan-Based Awards Table |
|
The following table provides information regarding the grants of plan-based awards during fiscal year 2023 under the 2018 CIP and the Company’s
2021 Employee LTIP.
|
|
|
|
Estimated
Possible Payouts
Under Non-Equity
Incentive Plan Awards
|
|
|
All Other Stock Awards: Number of Shares of
|
|
|
All Other Option Awards: Number of Securities
|
|
|
Exercise or Base Price of
|
|
|
Grant Date Fair Value of Stock
|
|
Name
|
|
Grant Date
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock or Units
(#)(3)
|
|
|
Underlying Options
(#)
|
|
|
Option Awards
($/Sh)
|
|
|
and Option Awards
(4)
|
|
Mark P. Marron
|
|
6/8/2022
|
|
|
|
|
|
|
|
|
|
|
|
37,587
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
2,199,967
|
|
|
(1
|
)
|
6/6/2022
|
|
$
|
92,500
|
|
|
$
|
925,000
|
|
|
$
|
1,850,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
6/6/2022
|
|
$
|
68,750
|
|
|
$
|
275,000
|
|
|
$
|
412,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elaine D. Marion
|
|
6/8/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,065
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1,349,994
|
|
|
(1
|
)
|
6/6/2022
|
|
$
|
50,000
|
|
|
$
|
500,000
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
6/6/2022
|
|
$
|
37,500
|
|
|
$
|
150,000
|
|
|
$
|
225,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darren S. Raiguel
|
|
6/8/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,065
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
1,349,994
|
|
|
(1
|
)
|
6/6/2022
|
|
$
|
50,000
|
|
|
$
|
500,000
|
|
|
$
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
6/6/2022
|
|
$
|
37,500
|
|
|
$
|
150,000
|
|
|
$
|
225,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
These amounts reflect award opportunities under the 2018 CIP and are described more fully in the CD&A under the heading “Annual Cash Incentive Awards” and subheading “Cash Incentive Awards for Fiscal
Year 2023.” Threshold amounts represent minimal level of achievement of the lowest weighted financial performance metric, and maximum amounts represent 200% of target values. Actual payments with respect to the awards for fiscal year
2022 (and paid in fiscal year 2023) are disclosed in the Non-Equity Incentive Plan Compensation column of the 2023 Summary Compensation Table.
|
(2) |
These amounts reflect non-equity award opportunities under our 2021 Employee LTIP and are more fully described in this CD&A under the heading “Long-Term Incentive Program.” Threshold amounts represent
minimal level of achievement of the lowest weighted financial performance metric, and maximum amounts represent 150% of target values. These awards are earned on the third anniversary of the grant date to the extent the Company achieves
a performance goal relating to growth in operating income.
|
(3) |
These amounts represent the number of shares of restricted stock granted to the NEOs under our 2021 Employee LTIP. Equity awards granted to the executive officers and reflected in the 2023 Grants of
Plan-Based Awards Table vest equally over a three-year period and may be accelerated in limited circumstances as set forth in the 2021 Employee LTIP, award agreements, and/or employment agreements.
|
(4) |
These amounts reflect the grant date fair value of the restricted stock granted in fiscal year 2023. This represents the aggregate amount that we expect to expense for such grants in accordance with
Codification Topic Compensation—Stock Compensation over the grants’ respective service period. These amounts do not necessarily correspond to the actual values that will be expensed by us or
realized by the NEOs. Assumptions used in calculating these values with respect to restricted stock awards may be found in Note 13 of our 2023 Annual Report.
|
Outstanding Equity Awards at 2023 Fiscal Year End
The following table provides information concerning the outstanding equity-based awards for our NEOs as of March 31, 2023.
|
|
Stock Awards
|
|
|
|
Number of Shares or
Units of Stock That Have
|
|
|
Market Value of Shares or
Units of Stock That Have
|
|
Name
|
|
Not Vested (1)
|
|
|
Not Vested (2)
|
|
Mark P. Marron
|
|
|
83,211
|
|
|
$
|
4,080,667
|
|
Elaine D. Marion
|
|
|
50,159
|
|
|
$
|
2,459,797
|
|
Darren S. Raiguel
|
|
|
50,159
|
|
|
$
|
2,459,797
|
|
(1) |
The following table shows the dates on which the outstanding stock awards as of March 31, 2023, will vest, subject to continued employment through the vest date, or acceleration in limited circumstances
as set forth in the 2021 Employee LTIP, award agreements, and/or employment agreements.
|
Vest Date
|
Mark P. Marron
|
Elaine D. Marion
|
Darren S. Raiguel
|
6/8/23
|
12,529
|
7,688
|
7,688
|
6/15/23
|
14,468
|
8,680
|
8,680
|
6/16/23
|
16,688
|
9,734
|
9,734
|
6/8/24
|
12,529
|
7,688
|
7,688
|
6/15/24
|
14,468
|
8,680
|
8,680
|
6/8/25
|
12,529
|
7,689
|
7,689
|
(2) |
We calculated market value by multiplying the closing price of our common stock ($49.04) on the last business day of our fiscal year, March 31, 2023, by the number of shares in the first column.
|
Fiscal Year 2023 Options Exercised and Stock Vested
The following table sets forth information with respect to the shares of Company common stock acquired by our NEOs through vesting of restricted
stock during our 2023 fiscal year. There were no stock options outstanding during fiscal year 2023.
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on Vesting (#)
|
|
|
Value
Realized on Vesting (1)
|
|
Mark P. Marron
|
|
|
47,268
|
|
|
$
|
2,672,095
|
|
Elaine D. Marion
|
|
|
27,622
|
|
|
$
|
1,561,113
|
|
Darren S. Raiguel
|
|
|
27,622
|
|
|
$
|
1,561,113
|
|
(1) |
Market value was computed by multiplying the closing price of our common stock on the day of vesting by the number of shares acquired. Additionally, the restricted shares were net-share settled such that the Company withheld shares
with value equivalent to the NEOs’ minimum statutory tax obligation for the applicable income and other employment taxes, and remitted cash to the appropriate taxing authorities. The amounts in the table represent the gross number of
shares and value realized on vesting for each of the NEOs. The net number of shares acquired were as follows: Mr. Marron, 28,579; Ms. Marion, 17,825; and Mr. Raiguel, 17,825.
|
Employment Agreements, Severance, and
Change in Control Provisions
Our incentive plans for and employment agreements with our NEOs reflect our compensation philosophy. All of our employment agreements with our
NEOs contain “clawback” provisions as required by Dodd-Frank and Sarbanes-Oxley.
In all cases, our NEOs’ receipt of severance payments is contingent upon their executing a release, and certifying that they will comply with
certain confidentiality, non-competition, and non-solicitation provisions of the employment agreement.
The Company’s employment agreements with its NEOs are intended to comply with IRC Section 409A. The material terms of the employment agreements
are described below. Also, pursuant to our 2021 Employee LTIP and standard award agreement, unvested stock issued to any employee will vest upon a “Change in Control,” as defined in the 2021 Employee LTIP.
|
• |
Mr. Marron’s currently effective agreement was amended and restated on December 12, 2017, and thereafter amended. Pursuant to such agreement (and the Compensation Committee’s and Board’s discretion to
raise base salary), Mr. Marron’s current base salary is $925,000.
|
|
• |
Mr. Marron’s agreement had an initial termination date of January 31, 2018; however, the agreement contains automatic two-year successive renewal periods unless either party terminates the agreement 60
days prior to the end of the then-current term. As no notice of termination was provided, the expiration date of his agreement is now January 31, 2024.
|
|
• |
In the event of disability, termination without cause, or termination for good reason (all as defined in the agreement), Mr. Marron is entitled to eighteen months of his base salary, in addition to a
pro-rated payment under our 2018 CIP, to the extent that the Performance Goals have been met, with the payment to be made after the end of the fiscal year at the time the payment would have been made had there been no termination.
Additionally, the Company would also pay Mr. Marron an amount in cash equal to the cost of premiums the Company paid prior to the date of termination for Mr. Marron and his dependents’ qualified coverage under the Company’s medical,
prescription, dental, and other health benefits, for eighteen months.
|
|
• |
In the event of termination without cause, or by Mr. Marron for good reason, he is also entitled to either, at the Company’s election, the acceleration of unvested restricted stock, or cash in an amount
equal to the value of the stock on the date of termination.
|
The table below summarizes the potential payments and benefits to Mr. Marron upon the occurrence of certain triggering events.
The table assumes a hypothetical effective date of termination of March 31, 2023. The table does not include accrued, unused vacation time, which is paid to all employees upon termination of employment, pursuant to ePlus’ policies.
Triggering Event
|
|
Cash Severance
(4)
|
|
|
Cash Incentive
|
|
|
Cash Long-Term
Incentive Award
(5)
|
|
|
Equity-Based
Compensation
Awards (6)
|
|
|
Total
|
|
Termination Without Cause, or
for Good Reason (1)
|
|
$
|
1,432,509
|
|
|
$
|
983,627
|
|
|
$
|
712,500
|
|
|
$
|
4,080,667
|
|
|
$
|
7,209,303
|
|
Change in Control (2)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,080,667
|
|
|
$
|
4,080,667
|
|
Disability (3)
|
|
$
|
1,432,509
|
|
|
$
|
983,627
|
|
|
$
|
712,500
|
|
|
$
|
4,080,667
|
|
|
$
|
7,209,303
|
|
Death
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
712,500
|
|
|
$
|
4,080,667
|
|
|
$
|
4,793,167
|
|
(1) |
“Termination Without Cause” and termination “for Good Reason” are defined terms in Mr. Marron’s employment agreement.
|
(2) |
This row assumes no termination accompanies the change in control. In the event of a termination in connection with the change in control, without Cause or for Good Reason (as defined in Mr. Marron’s
employment agreement), see “Termination Without Cause, or for Good Reason” above.
|
(3) |
In the event of disability, Termination without Cause or by Mr. Marron for Good Reason, all as defined in Mr. Marron’s employment agreement, Mr. Marron is entitled to a pro-rated amount of the payment
under our 2018 CIP, to the extent that the Performance Goals have been met, with the payment to be made after the end of the fiscal year at the time the payment would have been made had there been no termination. The above table
reflects the amount earned during the fiscal year ended March 31, 2023, and paid in the following fiscal year.
|
(4) |
As provided in Mr. Marron’s employment agreement, this column includes an amount equal to the cost of premiums paid prior to the date of termination for Mr. Marron and his dependents’ qualified coverage
under the Company’s medical, prescription, dental, and other health benefits for eighteen months, which amount would be paid in cash as opposed to providing continued coverage.
|
(5) |
Mr. Marron has Cash Long-Term Incentive Awards with a three-year performance period, consistent with our fiscal year. The above table reflects the amount actually earned for
the Incentive Award for which the performance period ended on March 31, 2023. The award agreements for the performance period ending March 31, 2024 and March 31, 2025 provide that, in the event Mr. Marron’s employment is terminated due
to death or disability as defined in the applicable Employee Long-Term Incentive Plan, or termination without cause or for good reason as defined in any applicable employment agreement, the Company shall pay to Mr. Marron a pro-rated
amount based on achievement of targets modified in the agreements.
|
(6) |
Pursuant to the 2021 Employee LTIP, and our standard restricted stock award agreements, upon death or a change in control, as defined by the 2021 Employee LTIP, all unvested stock for all employees will
vest. The value of the equity-based compensation awards for all termination tables herein is calculated using the closing price of our common stock ($49.04) on the last business day of our fiscal year, March 31, 2023.
|
|
• |
Ms. Marion’s employment agreement was amended and restated on December 12, 2017. Pursuant to such agreement (and the Compensation Committee’s and Board’s discretion to raise base salary), Ms. Marion’s
current base salary is $500,000.
|
|
• |
Ms. Marion’s agreement had an initial termination date of July 31, 2018; however, the agreement contains automatic one-year successive renewal periods unless either party terminates the agreement 60
days prior to the end of the then-current term. As no notice of termination was provided, the expiration date of her agreement is now July 31, 2024.
|
|
• |
In the event of disability, termination without cause, or termination for good reason (all as defined in the agreement), Ms. Marion is entitled to twelve months of her base salary, in addition to a
pro-rated amount of the payment under our 2018 CIP. Additionally, the Company would pay to Ms. Marion an amount in cash equal to the cost of premiums the Company paid prior to the date of termination for Ms. Marion and her dependents’
qualified coverage under the Company’s medical, prescription, dental, and other health benefits, for eighteen months.
|
|
• |
In the event of termination without cause or by Ms. Marion for good reason, she is also entitled to either, at the Company’s election, the acceleration of unvested restricted stock, or cash in an amount
equal to the value of the stock on the date of termination.
|
The table below summarizes the potential payments and benefits to Ms. Marion upon the occurrence of certain triggering events. The table assumes
a hypothetical effective date of termination of March 31, 2023. The table does not include accrued, unused vacation time, which is paid to all employees upon termination of employment, pursuant to ePlus’
policies.
Triggering Event
|
|
Cash Severance
(4)
|
|
|
Cash Incentive
|
|
|
Cash Long-Term
Incentive Award (5)
|
|
|
Equity-Based Compensation Awards (6)
|
|
|
Total
|
|
Termination Without Cause, or
for Good Reason (1)
|
|
$
|
542,636
|
|
|
$
|
531,690
|
|
|
$
|
375,000
|
|
|
$
|
2,459,797
|
|
|
$
|
3,909,123
|
|
Change in Control (2)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,459,797
|
|
|
$
|
2,459,797
|
|
Disability (3)
|
|
$
|
542,636
|
|
|
$
|
531,690
|
|
|
$
|
375,000
|
|
|
$
|
2,459,797
|
|
|
$
|
3,909,123
|
|
Death
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
375,000
|
|
|
$
|
2,459,797
|
|
|
$
|
2,834,797
|
|
(1) |
“Termination Without Cause” and termination “for Good Reason” are defined terms in Ms. Marion’s employment agreement.
|
(2) |
This row assumes no termination accompanies the change in control. In the event of a termination in connection with the change in control, without Cause or for Good Reason (as defined in Ms. Marion’s
employment agreement), see “Termination Without Cause, or for Good Reason”, above.
|
(3) |
In the event of disability, termination without cause or by Ms. Marion for good reason, all as defined in Ms. Marion’s employment agreement, Ms. Marion is entitled to a pro-rated amount of the payment
under our 2018 CIP, to the extent that the Performance Goals have been met, with the payment to be made after the end of the fiscal year at the time the payment would have been made had there been no termination. The above table
reflects the amount earned during the fiscal year ended March 31, 2023, and paid in the following fiscal year.
|
(4) |
As provided in Ms. Marion’s employment agreement, this column includes an amount equal to the cost of premiums paid prior to the date of termination for Ms. Marion and her dependents’ qualified coverage
under the Company’s medical, prescription, dental, and other health benefits for eighteen months, which amount would be paid in cash as opposed to providing continued coverage.
|
(5) |
Ms. Marion has Cash Long-Term Incentive Awards with a three-year performance period, consistent with our fiscal year. The above table reflects the amount actually earned for the Incentive Award for which
the performance period ended on March 31, 2023. The award agreements for the performance period ending March 31, 2024, and March 31, 2025 provide that, in the event Ms. Marion’s employment is terminated due to death or disability as
defined in the applicable Employee Long-Term Incentive Plan, or termination without cause or for good reason as defined in any applicable employment agreement, the Company shall pay to Ms. Marion a pro-rated amount based on achievement
of targets modified in the agreements.
|
(6) |
Pursuant to the 2021 Employee LTIP, and our standard restricted stock award agreements, upon death or a change in control, as defined by the 2021 Employee LTIP, all unvested stock for all employees will
vest. The value of the equity-based compensation awards for all termination tables herein is calculated using the closing price of our common stock ($49.04) on the last business day of our fiscal year, March 31, 2023.
|
|
• |
Mr. Raiguel’s employment agreement was effective as of May 7, 2018. Pursuant to such agreement (and the Compensation Committee’s and Board’s discretion to raise base salary), Mr. Raiguel’s current base
salary is $525,000 (raised from $500,000 effective April 1, 2023).
|
|
• |
Mr. Raiguel’s agreement had an initial termination date of July 31, 2019; however, the agreement contains automatic one-year successive renewal periods unless either party terminates the agreement 60
days prior to the end of the then-current term. As no notice of termination was provided, the expiration date of his agreement is now July 31, 2024.
|
|
• |
In the event of disability, termination without cause, or termination for good reason (all as defined in the agreement), Mr. Raiguel is entitled to twelve months of his base salary, in addition to a
pro-rated amount of the payment under our 2018 CIP. Additionally, the Company would pay to Mr. Raiguel an amount in cash equal to the cost of premiums the Company paid prior to the date of termination for Mr. Raiguel and his
dependents’ qualified coverage under the Company’s medical, prescription, dental, and other health benefits, for eighteen months.
|
|
• |
In the event of termination without cause or by Mr. Raiguel for good reason, he is also entitled to either, at the Company’s election, the acceleration of unvested restricted stock, or cash in an amount
equal to the value of the stock on the date of termination.
|
The table below summarizes the potential payments and benefits to Mr. Raiguel upon the occurrence of certain triggering events. The table assumes
a hypothetical effective date of termination of March 31, 2023. The table does not include accrued, unused vacation time, which is paid to all employees upon termination of employment, pursuant to ePlus’
policies.
Triggering Event
|
|
Cash Severance
(4)
|
|
|
Cash Incentive
|
|
|
Cash Long-Term
Incentive Award (5)
|
|
|
Equity-Based Compensation Awards (6)
|
|
|
Total
|
|
Termination Without Cause, or
for Good Reason (1)
|
|
$
|
545,676
|
|
|
$
|
531,690
|
|
|
$
|
375,000
|
|
|
$
|
2,459,797
|
|
|
$
|
3,912,163
|
|
Change in Control (2)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,459,797
|
|
|
$
|
2,459,797
|
|
Disability (3)
|
|
$
|
545,676
|
|
|
$
|
531,690
|
|
|
$
|
375,000
|
|
|
$
|
2,459,797
|
|
|
$
|
3,912,163
|
|
Death
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
375,000
|
|
|
$
|
2,459,797
|
|
|
$
|
2,834,797
|
|
(1) |
“Termination Without Cause” and termination “for Good Reason” are defined terms in Mr. Raiguel’s employment agreement.
|
(2) |
This row assumes no termination accompanies the change in control. In the event of a termination in connection with the change in control, without Cause or for Good Reason (as defined in Mr. Raiguel’s
employment agreement), see “Termination Without Cause, or for Good Reason,” above.
|
(3) |
In the event of disability, termination without cause or by Mr. Raiguel for good reason, all as defined in Mr. Raiguel’s employment agreement, Mr. Raiguel is entitled to a pro-rated amount of the payment
under our 2018 CIP, to the extent that the Performance Goals have been met, with the payment to be made after the end of the fiscal year at the time the payment would have been made had there been no termination. The above table
reflects the amount earned during the fiscal year ended March 31, 2023, and paid in the following fiscal year.
|
(4) |
As provided in Mr. Raiguel’s employment agreement, this column includes an amount equal to the cost of premiums paid prior to the date of termination for Mr. Raiguel and his dependents’ qualified coverage
under the Company’s medical, prescription, dental, and other health benefits for eighteen months, which amount would be paid in cash as opposed to providing continued coverage.
|
(5) |
Mr. Raiguel has Cash Long-Term Incentive Awards with a three-year performance period, consistent with our fiscal year. The above table reflects the amount actually earned for the Incentive Award whose
performance period ended on March 31, 2023. The award agreements for the performance period ending March 31, 2024, and March 31, 2025 provide that, in the event Mr. Raiguel’s employment is terminated due to death or disability as
defined in the applicable Employee Long-Term Incentive Plan, or termination without cause or for good reason as defined in any applicable employment agreement, the Company shall pay to Mr. Raiguel a pro-rated amount based on achievement
of targets modified in the agreements.
|
(6) |
Pursuant to the 2021 Employee LTIP, and our standard restricted stock award agreements, upon death or a change in control, as defined by the 2021 Employee LTIP, all unvested stock for all employees will
vest. The value of the equity-based compensation awards for all termination tables herein is calculated using the closing price of our common stock ($49.04) on the last business day of our fiscal year, March 31, 2023.
|
2023 Pay Ratio Disclosure
Pursuant to Item 402(u) of Regulation S-K, the Company is required to provide annual disclosure of the ratio of the median of the total annual
compensation of all employees of the Company (other than Mr. Marron, the Company’s CEO) to the total annual compensation of the principal executive officer, which for ePlus is our CEO, Mr. Marron. The
purpose of the required disclosure is to provide a measure of the equitability of pay within the Company. ePlus believes its compensation philosophy and process yield an equitable result. The below
table shows our median employee annual compensation and the total compensation of Mr. Marron as reflected in the Summary Compensation Table, as well as the ratio of the two pay levels. This pay ratio is a reasonable estimate, calculated in a
manner consistent with the applicable SEC requirements.
Median Employee
Total Annual Compensation
|
Mr. Marron’s
Total Annual Compensation
|
Pay Ratio
|
$120,758
|
$4,422,225
|
36.6 to 1
|
In determining our median employee, we considered the full annual compensation of all individuals who were employed throughout the entire 2022
calendar year, and annualized compensation for employees who joined ePlus during 2022, with the following adjustments. Our employee population on December 31, 2022, after taking into consideration the
adjustments permitted by SEC rules and described below, consisted of approximately 1,746 individuals. We did not include our 54 non-U.S.-based employees in the calculation, which was less than 5% of our total workforce, and consists of 23
employees in the United Kingdom, 29 employees in India, and two employees in Singapore. We selected our median employee from the list of the remaining employees. To identify our median employee, we calculated compensation as the sum of (i)
base salary, (ii) commissions, if any, and (iii) equity that vested during the year, if any. Mr. Marron’s compensation was calculated using the same methodology that the Company used to calculate the CEO’s annual total compensation for the
2023 Summary Compensation Table described above.
Once we identified our median employee, we calculated his or her fiscal year 2023 annual total compensation under the Summary Compensation Table
rules in a manner that is consistent with the calculation of our CEO’s compensation, without any adjustments or estimates. The SEC requirements for identifying our median employee and calculating the pay ratio based on that employee’s annual
total compensation allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio we report may not be
comparable to the pay ratio other companies report.
As required by Section 953(a) of Dodd-Frank, and Item 402(v) of Regulation S-K, we are providing
the following information reflecting the relationship between executive compensation actually paid by the Company and the Company’s financial performance for each of the last three completed calendar years. In determining the compensation
“actually paid” to our NEOs, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those
required in the Summary Compensation Table. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the “Compensation
Discussion and Analysis” provided elsewhere in this proxy statement. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the fiscal years shown.
The table below summarizes compensation values both reported in our 2023 Summary Compensation Table, as well as the adjusted values required in this section for the
2021, 2022 and 2023 fiscal years.
Fiscal
|
|
Summary Compensation Table Total to |
|
|
Compensation Actually Paid to |
|
|
Average Summary
Compensation
Table Total for
|
|
|
Average
Compensation
Actually Paid to
|
|
|
Value of Initial Fixed $100 Investment Based On:
|
|
|
Net Income
|
|
|
Operating
Income
|
|
Year
|
|
PEO
|
|
|
PEO
|
|
|
Non-PEO NEOs
|
|
|
Non-PEO NEOs
|
|
|
Company TSR
|
|
|
Peer Group TSR
|
|
|
($ thousands)
|
|
|
($ thousands)
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
2023
|
|
$
|
4,422,225
|
|
|
$
|
3,767,495
|
|
|
$
|
2,582,208
|
|
|
$
|
2,185,745
|
|
|
$
|
156.63
|
|
|
$
|
187.37
|
|
|
$
|
119,356
|
|
|
$
|
166,162
|
|
2022
|
|
$
|
4,900,118
|
|
|
$
|
5,466,517
|
|
|
$
|
2,769,308
|
|
|
$
|
3,119,485
|
|
|
$
|
179.05
|
|
|
$
|
197.49
|
|
|
$
|
105,600
|
|
|
$
|
147,316
|
|
2021
|
|
$
|
3,839,946
|
|
|
$
|
5,480,397
|
|
|
$
|
2,121,791
|
|
|
$
|
3,072,398
|
|
|
$
|
159.12
|
|
|
$
|
192.68
|
|
|
$
|
74,397
|
|
|
$
|
106,335
|
|
(a) |
Reflects compensation amounts reported in the “2023 Summary Compensation Table” for our President and Chief Executive Officer, Mr. Marron.
|
(b) |
Compensation actually paid to our President and Chief Executive Officer for each period presented, as computed in accordance with SEC rules, does not reflect the actual amount of compensation earned or
received during the applicable fiscal year. In accordance with SEC rules, these amounts differ from the total compensation reported in the “2023 Summary Compensation Table” for each fiscal year as shown below. The fair value of equity
awards was determined using methodologies and assumption developed in a manner substantively consistent with those used to determine the grant date fair value of such awards in accordance with Codification Topic Compensation – Stock
Compensation.
|
|
|
|
|
Fiscal 2023
|
|
|
Fiscal 2022
|
|
|
Fiscal 2021
|
|
Summary Compensation Table Total
|
|
$
|
4,422,225
|
|
|
$
|
4,900,118
|
|
|
$
|
3,839,946
|
|
|
-
|
|
Grant Date Fair Value of Stock Awards Granted in Fiscal Year
|
|
$
|
(2,199,967
|
)
|
|
$
|
(1,999,964
|
)
|
|
$
|
(1,799,979
|
)
|
|
+
|
|
Fair Value at Fiscal Year-End of Outstanding Unvested Stock Awards Granted in Fiscal Year
|
|
$
|
1,843,266
|
|
|
$
|
2,433,116
|
|
|
$
|
2,494,089
|
|
±
|
|
Change in Fair Value of Outstanding Unvested Stock Awards Granted in Prior Fiscal Years
|
|
$
|
(320,280
|
)
|
|
$
|
308,818
|
|
|
$
|
815,477
|
|
±
|
|
Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
±
|
|
Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
|
|
$
|
22,251
|
|
|
$
|
(175,571
|
)
|
|
$
|
130,865
|
|
|
-
|
|
Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
+
|
|
Dividends Accrued During Fiscal Year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Compensation Actually Paid
|
|
$
|
3,767,495
|
|
|
$
|
5,466,517
|
|
|
$
|
5,480,397
|
|
(c) |
Reflects the average compensation amounts reported in the “2023 Summary Compensation Table” for our NEOs (excluding the President and Chief Executive Officer), which included the Chief Financial Officer,
Ms. Marion, and the Chief Operating Officer, Mr. Raiguel, in each year presented.
|
(d) |
Average compensation actually paid to our NEOs (excluding the President and Chief Executive Officer) for each period presented, as computed in accordance with SEC rules, does not reflect the actual amount
of compensation earned or received during the applicable fiscal year. In accordance with SEC rules, these amounts differ from the average total compensation reported in the “2023 Summary Compensation Table” for each fiscal year as shown
below. The fair value of equity awards was determined using methodologies and assumptions developed in a manner substantively consistent with those used to determine the grant date fair value of such awards in accordance with
Codification Topic Compensation – Stock Compensation.
|
|
|
|
|
Fiscal 2023
|
|
|
Fiscal 2022
|
|
|
Fiscal 2021
|
|
Summary Compensation Table Total
|
|
$
|
2,582,208
|
|
|
$
|
2,769,308
|
|
|
$
|
2,121,791
|
|
|
-
|
|
Grant Date Fair Value of Stock Awards Granted in Fiscal Year
|
|
$
|
(1,349,994
|
)
|
|
$
|
(1,199,923
|
)
|
|
$
|
(1,049,958
|
)
|
|
+
|
|
Fair Value at Fiscal Year-End of Outstanding Unvested Stock Awards Granted in Fiscal Year
|
|
$
|
1,131,108
|
|
|
$
|
1,459,802
|
|
|
$
|
1,454,844
|
|
±
|
|
Change in Fair Value of Outstanding Unvested Stock Awards Granted in Prior Fiscal Years
|
|
$
|
(190,200
|
)
|
|
$
|
178,938
|
|
|
$
|
479,714
|
|
±
|
|
Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
±
|
|
Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year
|
|
$
|
12,624
|
|
|
$
|
(88,640
|
)
|
|
$
|
66,007
|
|
|
-
|
|
Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
+
|
|
Dividends Accrued During Fiscal Year
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Compensation Actually Paid
|
|
$
|
2,185,745
|
|
|
$
|
3,119,485
|
|
|
$
|
3,072,398
|
|
(e) |
Reflects the total shareholder return (“TSR”) of a $100 investment in ePlus’ common stock. Cumulative TSR is calculated by dividing (a) the sum of (i) the
cumulative amount of any dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s stock price at the end and the beginning of the measurement period by (b) the Company’s stock
price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is April 1, 2020. Historical stock performance is not necessarily indicative of future stock performance.
|
(f) |
Reflects the TSR of a $100 investment in the S&P 600 Small Cap Information Technology Group, which is used in the stock performance graph required by Item 201(e) of Regulation S-K included in our
Annual Report for the applicable fiscal year. Historical stock performance is not necessarily indicative of future stock performance.
|
(g) |
The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year.
|
(h) |
The “Company-Selected Measure” (as defined in Item 402(v) of Regulation S-K) is our operating income
reflected in the Company’s audited financial statements for the applicable fiscal year.
|
Pay Versus Performance Relationship Descriptions
The charts below illustrate the relationship between the PEO and average Non-PEO Compensation Actually Paid (“CAP”) amounts and the S&P 600 Small Cap
Information Technology Group (our “TSR Peer Group”)’s TSR during the periods ended March 31, 2021, 2022 and 2023.
The chart below demonstrates the relationship between CAP amounts for our PEO and non-PEO executive officers and our net income.
The chart below demonstrates the relationship between CAP amounts for our PEO and non-PEO executive officers and our operating income.
Financial Performance Measures
Below is an unranked list of the most important performance measures used to link executive compensation actually paid for the most recently completed fiscal
year, as described above, to the Company’s performance:
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of March 31, 2023, regarding the number of securities available for future issuance under our current equity
compensation plans. Currently, there are no outstanding options, warrants, or rights under our prior or current equity compensation plans pursuant to which common stock may be issued.
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants, and rights
|
Weighted average
exercise price of
outstanding
options, warrants,
and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in first column)
|
Equity compensation plans approved by security holders
|
-
|
n/a
|
3,060,672
|
(1)
|
Equity compensation plans not approved by security holders
|
-
|
n/a
|
-
|
|
Total
|
-
|
|
3,060,672
|
|
(1) |
This number includes 198,720 shares reserved for issuance under the 2017 Non-Employee Director Long-Term Incentive Plan and available for future equity awards, and 2,861,952 shares reserved for issuance
under the 2021 Employee Long Term Incentive Plan.
|
PROPOSAL 3 – Ratification of the Selection of Deloitte &
Touche LLP as our Independent Registered Public Accounting Firm for our Fiscal Year Ending March 31, 2024
The Board and the Audit Committee recommend that the shareholders ratify the selection of Deloitte as the Company’s independent registered public
accounting firm for the fiscal year ending March 31, 2024. Deloitte is currently the Company’s independent registered public accounting firm, and the Audit Committee approved the selection and retention of Deloitte for fiscal year 2024.
Neither the Company’s Charter, Bylaws or other governing documents nor the law require shareholder ratification of the selection of Deloitte as
the Company’s independent registered accounting firm. As a matter of good corporate practice, however, the Company is submitting the selection of Deloitte to the shareholders for ratification. If the shareholders fail to ratify the selection,
the Audit Committee will reconsider whether to retain Deloitte. Even if the selection is ratified, the Audit Committee retains discretion to select a different independent registered accounting firm at any time if the Audit Committee
determines that such a change would be in the best interest of the Company and its shareholders.
Representatives of Deloitte are expected to attend the 2023 Annual Meeting and will have the opportunity to make a statement and respond to
appropriate questions.
THE BOARD UNANIMOUSLY RECOMMENDS VOTING FOR RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING MARCH 31, 2024
The Audit Committee’s report regarding the Company’s audited consolidated financial statements for the fiscal year ended
March 31, 2023, is below. The information contained in this report shall not be deemed to be (i) soliciting material, (ii) filed with the SEC, (iii) subject to Regulations 14A or 14C of the Exchange Act, or (iv) subject to the liabilities of
Section 18 of the Exchange Act. Further, this report shall not to be deemed incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof
and irrespective of any general incorporation of this proxy statement by reference, except to the extent the Company specifically incorporates this report by reference into such filing.
The Audit Committee has certain duties and powers as described in its written charter
adopted by the Board, which is available on the Investors section of the Company’s website at https://www.eplus.com/investors/corporate-governance-legal/committee-charters. The Audit Committee is
responsible primarily for assisting the Board in its oversight of the Company’s accounting and financial reporting processes, including audits of the Company’s financial statements and the integrity of its financial statements, determining
the independent registered public accounting firm’s qualifications and independence, and evaluating the performance of the Company’s internal audit function and that of the independent registered public accounting firm. The Audit Committee
does not itself prepare financial statements or perform audits. All members of the Audit Committee are “independent,” as required by applicable Nasdaq Listing Rules and in accordance with SEC rules and regulations, as currently in effect,
and each such member has the ability to read and understand fundamental financial statements.
Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements; establishment and effectiveness
of internal controls over financial reporting; and maintenance of appropriate accounting and financial reporting principles, policies, and internal controls and procedures that provide for compliance with accounting standards and applicable
laws and regulations. Deloitte is responsible for planning and carrying out a proper audit of the Company’s annual financial statements in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), expressing an opinion as to the conformity of such financial statements with generally accepted accounting principles, and auditing the effectiveness of internal controls over financial
reporting.
In performing its oversight role, the Audit Committee has reviewed and discussed the audited consolidated financial statements with management
and Deloitte. The Audit Committee has discussed with Deloitte the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. The Audit Committee has received the written disclosures and the letter from Deloitte
required by the applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence, and has discussed with Deloitte its independence. Deloitte has unfettered access to the
Audit Committee to discuss any matters Deloitte deems appropriate.
Members of the Audit Committee rely without independent verification on the information provided to them and on the representations of management
and Deloitte. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles, or appropriate internal controls and
procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s
consolidated financial statements has been carried out in accordance with the auditing standards of the PCAOB, that the consolidated financial statements are presented in accordance with accounting principles generally accepted in the United
States, that Deloitte is in fact “independent,” or the effectiveness of the Company’s internal controls.
Based on the review and discussions noted above, and subject to the limitations on the role and responsibilities of the Audit Committee described
above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2023. This report is provided by the
following independent directors, who served on the Audit Committee during the 2023 fiscal year.
Submitted by the Audit Committee
Maureen F. Morrison, Chair
John E. Callies
C. Thomas Faulders, III
Independent Registered Public Accounting Firm Fees and Independence
Deloitte has served as the Company’s independent registered public accounting firm since 1990. The Audit Committee of
the Board has selected Deloitte as the Company’s independent registered accounting firm for the fiscal year ending March 31, 2024.
The following table presents the aggregate fees paid to or accrued by ePlus relating to fees due to Deloitte for the audit of the Company’s
annual consolidated financial statements, and all other professional services rendered by Deloitte, for the fiscal years ended March 31, 2023, and 2022:
|
|
Fiscal 2023
|
|
|
Fiscal 2022
|
|
Audit Fees
|
|
$
|
1,895,790
|
|
|
$
|
1,707,448
|
|
Audit‐Related Fees
|
|
|
11,500
|
|
|
|
-
|
|
Tax Fees
|
|
|
-
|
|
|
|
-
|
|
All Other Fees
|
|
|
41,305
|
|
|
|
-
|
|
TOTAL FEES
|
|
$
|
1,948,595
|
|
|
$
|
1,707,448
|
|
Audit Fees and Audit-Related Fees
Deloitte billed expenses for the fiscal year ended March 31, 2023. The Audit Committee pre-approves all auditing services (which may entail
providing comfort letters in connection with securities underwriting), and all audit-related services Deloitte provided to us, subject to a de minimis exception as set forth in the SEC’s rules.
Tax Fees
Deloitte provided no tax services, and thus billed no tax fees for the fiscal years ended March 31, 2023, and 2022.
All Other Fees
Deloitte provided other services related to other regulatory filings for the fiscal year ended March 31, 2023. Deloitte provided no other
services, and thus billed no other fees, for the fiscal year ended March 31, 2022.
The affirmative vote of the holders of a majority of the shares entitled to vote on Proposal 3, present in person or represented by proxy at the
meeting, is required to ratify Proposal 3. Abstentions will have the same effect as voting “AGAINST” this proposal. If you do not instruct your broker, bank or other nominee how to vote on this proposal, your broker may vote your shares on
Proposal 3, so there will be no broker non-votes.
PROPOSAL 4 – Amendment to the
ePlus inc. Amended and Restated Certificate of Incorporation
The Board has unanimously adopted a resolution to amend our Amended and Restated Certificate of Incorporation (our “Charter”), subject to
shareholder approval, to provide for the elimination or limitation of monetary liability of specified executive officers of the Company for breach of the duty of care. Article Seventh of our Charter currently provides for the Company to limit
the monetary liability of directors in certain circumstances pursuant to, and consistent with, Section 102(b)(7) of the Delaware General Corporation Law (“DGCL”). Effective August 1, 2022, Section 102(b)(7) was amended to permit a Delaware
corporation’s certificate of incorporation to include a provision eliminating or limiting monetary liability for certain senior corporate officers for breach of fiduciary duty, subject to certain limitations.
If our shareholders approve this proposal at the 2023 Annual Meeting, the Company intends to file a Certificate of Amendment to our Charter in the
form attached hereto as Annex A (the “Charter Amendment”) to incorporate the provisions of Section 102(b)(7). In accordance with the DGCL, however, our Board may elect to abandon the Charter Amendment without further action by the shareholders
at any time prior to the effectiveness of the filing of the Charter Amendment with the Secretary of State of the State of Delaware, notwithstanding shareholder approval of the Charter Amendment.
Purpose and Possible Effects of the Proposed Amendment
The Board desires to amend our Charter to maintain provisions consistent with the governing statutes contained in the DGCL. Previously, Delaware
law has permitted Delaware corporations to eliminate or limit directors from personal liability for monetary damages associated with breaches of the duty of care, but that protection did not extend to a Delaware corporation’s officers.
Consequently, shareholder plaintiffs have employed a tactic, which would otherwise be exculpated if brought against directors, of bringing certain claims against individual officers to avoid dismissal of such claims. Section 102(b)(7) was
adopted to address this inconsistent treatment between officers and directors and the rising litigation and insurance costs for shareholders.
As is currently the case with our directors, this provision would not exculpate officers from liability for breach of the duty of loyalty, acts or
omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. Nor would this provision exculpate such officers from liability for
claims brought by or in the right of the corporation, such as derivative claims.
The Board believes it is necessary to provide protection to officers to the fullest extent permitted by law to attract and retain top talent. This
protection has long been afforded to directors, and accordingly, the Board believes that this proposal, which would extend exculpation to officers, as specifically permitted by the Section 102(b)(7), is fair and in the best interests of the
Company and its shareholders. The Charter Amendment is not being proposed in response to any specific resignation, threat of resignation or refusal to serve by any officer nor is it being proposed in response to any litigation or threat of
litigation.
The affirmative vote of the holders of a majority of shares outstanding and entitled to vote at the Annual Meeting is required to approve Proposal
4. Abstentions and broker non-votes will have the same effect as voting “AGAINST” this proposal.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR APPROVAL OF
THE CHARTER AMENDMENT
FREQUENTLY
ASKED QUESTIONS CONCERNING THE 2023 ANNUAL MEETING OF SHAREHOLDERS
Why did I receive these proxy materials?
These proxy materials are first being distributed on or about July 31, 2023, to the Company’s shareholders in connection with our Board’s
solicitation of proxies to be voted at the 2023 Annual Meeting on September 14, 2023, at 8:30 a.m. ET, at The Westin Washington Dulles Airport, 2520 Wasser Terrace, Herndon, Virginia, 20171, and any postponement or adjournment thereof. This
proxy statement describes the matters on which you, as the Company’s shareholder, are entitled to vote. It also includes information that we are required to provide to you under SEC rules and is designed to assist you in voting your shares.
What is the purpose of the 2023 Annual Meeting?
At our 2023 Annual Meeting, shareholders will be asked to vote to (1) elect the nine director nominees named in this proxy statement
for a term expiring at the 2024 Annual Meeting of Shareholders; (2) approve, on an advisory basis, the compensation of our NEOs; (3) ratify the appointment of the Company’s independent registered public accounting firm; and (4) approve an
amendment to our Charter to limit the personal liability of certain officers of ePlus as permitted by recent amendments to the DGCL. See the sections
entitled “Proposal 1 – Election of Directors,” “Proposal 2 – Advisory Vote to Approve Named Executive Officer Compensation,” “Proposal 3 – Ratification of Independent Registered Public Accounting Firm” and (4) “Proposal 4 –Amendment to the ePlus inc. Amended and Restated Certificate of Incorporation.”
The Board does not know of any matters to be brought before the meeting other than as set forth in the Notice of 2023 Annual Meeting of
Shareholders.
Who may attend the 2023 Annual Meeting?
Only holders of our common stock as of the close of business on our Record Date, which was July 21, 2023, or their duly appointed proxies, may
attend the 2023 Annual Meeting. If you hold your shares through a broker, bank, or other nominee, you will be required to show the notice or voting instructions form you received from your broker, bank, or other nominee, or a copy of the
statement (such as a brokerage statement) from your broker, bank, or other nominee reflecting your stock ownership as of our Record Date to be admitted to the 2023 Annual Meeting.
Who may vote at the 2023 Annual Meeting?
Holders of our common stock as of the close of business on the Record Date are entitled to notice
of, and to vote at, the 2023 Annual Meeting. As of July 21, 2023, there were 26,940,564
shares of our common stock outstanding, which includes 314,519 unvested restricted shares entitled to vote at
the 2023 Annual Meeting, with each share entitled to one vote.
How do I vote at the 2023 Annual Meeting?
Eligible shareholders may vote in one of four ways:
|
• |
By telephone. Use the toll-free telephone number shown on your Notice or proxy card;
|
|
• |
Via the Internet. Visit the Internet website shown on your Notice or proxy card and follow the on-screen instructions;
|
|
• |
By mail. Date, sign, and promptly return your proxy card by mail in a postage prepaid envelope; or
|
|
• |
In person. Deliver a completed proxy card at the meeting or vote in person.
|
Voting instructions for eligible shareholders (including instructions for both telephonic and Internet voting) are provided under the heading
“Voting Information” of this proxy statement and on the proxy card. The telephone and Internet voting procedures are designed to authenticate shareholder identities, allow shareholders to give voting instructions, and confirm that the
shareholders’ instructions have been recorded properly. A control number, located on the Notice and the proxy card, will identify shareholders and allow them to submit their proxies and confirm that their voting instructions have been properly
recorded. Costs associated with telephone and electronic access, such as usage charges from telephone companies and Internet access providers, must be borne by the shareholder. If you submit your proxy by telephone or via the Internet, it will
not be necessary to return your proxy card. The deadline for voting by telephone or via the Internet is 8:30 a.m. ET on September 14, 2023.
Further, a proxy that is signed and dated, but which does not contain voting instructions, will be voted as recommended by our Board on each
proposal.
What if I do not vote or do not indicate how my shares should be voted on my proxy card?
If an eligible shareholder does not return a signed proxy card or submit a proxy by telephone or via the Internet, and does not attend the meeting
and vote in person, his or her shares will not be voted. Shares of our common stock represented by properly executed proxies received by us or proxies submitted by telephone or via the Internet, and which are not revoked, will be voted at the
meeting in accordance with the instructions contained therein.
If you submit a properly completed proxy but do not indicate how your shares should be voted on a proposal, the shares
represented by your proxy will be voted as the Board recommends on such proposal.
What if my shares of the Company’s common stock are held for me by a broker?
If you are the beneficial owner of shares held for you by a broker, your broker must vote those shares in accordance with your instructions. A
“broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or other nominee does not have discretionary voting power for that item and has not received
instructions from the beneficial owner.
|
• |
Non-Discretionary Items. The election of directors (Proposal 1), the advisory vote to approve NEO compensation (Proposal 2) and the amendment to our Charter (Proposal
4) may not be voted on by your broker if it has not received voting instructions.
|
|
• |
Discretionary Items. The ratification of Deloitte as the Company’s independent registered public accounting firm (Proposal 3) is a discretionary item. Generally,
brokers that do not receive voting instructions from beneficial owners may vote on this proposal in their discretion.
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How can I change my votes or revoke my proxy after I have voted?
Any proxy signed and returned by a shareholder or submitted by telephone or via the Internet may be revoked or changed at any time before it is
exercised at the 2023 Annual Meeting, or any adjournments or postponements thereof, by:
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Mailing written notice of revocation or change to our Corporate Secretary, at ePlus inc., 13595 Dulles Technology Drive, Herndon, Virginia, 20171;
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Delivering a later-dated proxy (either in writing, by telephone, or via the Internet); or
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Voting in person at the meeting.
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Attendance at the meeting will not, in and of itself, constitute revocation of a proxy.
Will my votes be publicly disclosed?
No. As a matter of policy, shareholder proxies, ballots, and tabulations that identify individual shareholders are not publicly disclosed and are
available only to the inspector of election and certain employees of the Company who are obligated to keep such information confidential.
Who will count the votes?
A representative of the Company’s Transfer Agent, Computershare, will serve as the inspector of election for the 2023 Annual Meeting, and will
count the votes.
What if other matters come up during the 2023 Annual Meeting?
If any other matters properly come before the meeting, including a question of adjourning or postponing the meeting, the persons named in the
proxies or their substitutes acting thereunder will have discretion to vote on such matters in accordance with their best judgment.
What constitutes a quorum at the 2023 Annual Meeting?
A quorum is required to transact business at the 2023 Annual Meeting. To constitute a quorum, there must be in attendance or represented by proxy a
majority of the voting power of the outstanding capital stock entitled to vote at the 2023 Annual Meeting. Abstentions and broker non-votes count toward the establishment of a quorum.
How many votes are required to approve each matter to be considered at the 2023 Annual Meeting?
Proposal 1: Election of directors. Each of the nine nominees for director will be elected by a plurality
of the shares present in person or by proxy at the 2023 Annual Meeting and entitled to vote on the election of directors, subject to the Company’s director resignation policy should any director not receive a majority of the votes cast. A
plurality means that the nominees with the greatest number of votes are elected as directors up to the maximum number of directors to be chosen at the 2023 Annual Meeting. In the election of directors, Proposal 1, you may vote “for” each of the
nominees, or your vote may be “withheld” with respect to one or more of the nominees. Please note, however, that the Company’s Corporate Governance Guidelines provide that, in an uncontested election (that is, an election where the number of
director nominees does not exceed the number of directors to be elected), if any nominee for director does not receive a majority of the votes cast, he or she is expected to tender his or her resignation in writing to the Chairman of the
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee shall evaluate the resignation tendered and shall make a recommendation to the Board whether to accept or reject the resignation, or whether other
actions should be taken. The Board shall act on each such resignation, taking into account the recommendation of the Nominating and Corporate Governance Committee, within 90 days following the certification of the election results. If a
director’s resignation is not accepted by the Board, then the director who tendered that resignation would continue to serve on the Board until the 2024 Annual Meeting of Shareholders and until his or her successor is elected and qualified, or
until his or her earlier death, unconditional resignation, or removal. In the event of a contested election, director nominees who receive the most votes for the number of seats up for election will be elected. Withheld votes and broker
non-votes will have no effect on the vote for this proposal.
Proposal 2: Advisory vote to approve NEO compensation. The affirmative vote of
the holders of a majority of the shares entitled to vote on the proposal, present in person or represented by proxy at the meeting, is required to approve on an advisory, non-binding basis the compensation paid to our NEOs. Abstentions will
have the same effect as voting “AGAINST” this proposal, and broker non-votes will have no effect on the vote for this proposal.
Proposal 3: Ratification of Deloitte & Touche LLP as the Company’s independent registered public accounting
firm. The affirmative vote of the holders of a majority of the shares entitled to vote on the proposal, present in person or represented by proxy at the meeting, is required to ratify Deloitte as the Company’s independent registered
public accounting firm for the fiscal year ending March 31, 2024. Abstentions will have the same effect as voting “AGAINST” this proposal. If you do not instruct your broker, bank or other nominee how to vote on this proposal, your broker may
vote your shares on the proposal, so no broker non-votes are expected.
Proposal 4: Amendment to our Charter.
The affirmative vote of the holders of a majority of shares outstanding and entitled to vote at the Annual Meeting is required to amend our
Charter. Abstentions and broker non-votes will have the same effect as voting “AGAINST” this proposal.
Who pays to prepare, mail, and solicit the proxies?
The Company will bear the costs of solicitation of proxies for the 2023 Annual Meeting, including preparation, assembly, printing, and mailing of
the Notice, this proxy statement, the Annual Report, the proxy card, and any additional information furnished to shareholders. We may reimburse persons representing beneficial owners of common stock for their costs of forwarding any
solicitation materials to such beneficial owners. Proxies may be solicited in person or by mail, telephone, or electronic transmission on our behalf by our directors, officers, or employees. However, we do not reimburse or pay additional
compensation to our own directors, officers, or other employees for soliciting proxies.
The Board knows of no other matters that will be presented for consideration at the 2023 Annual Meeting. If any other matters are properly brought
before the meeting, the persons named in the accompanying proxy will have the discretionary authority to vote such proxy on such matters in accordance with their best judgment.
Annual Report on Form 10-K
A copy of our Annual Report, which includes our 2023 Form 10-K, as filed with the SEC, will be sent to any shareholder without charge upon written
request addressed to Investor Relations, at ePlus inc., 13595 Dulles Technology Drive, Herndon, Virginia 20171.
You may also obtain our Form 10-K via the SEC’s Internet site, www.sec.gov, or our
Annual Report, which includes our 2023 Form 10-K, via our website, www.eplus.com/Investors/Pages/Annual-Reports.aspx.
Additional copies of the Annual Report, the Notice, this proxy statement, and the accompanying proxy may be obtained from our Investor Relations
department at the address above.
Company shareholders who share an address may receive only one copy of the Notice or this proxy statement and the Annual Report from their bank,
broker, or other nominee, unless contrary instructions are received. We will deliver promptly a separate copy of the Notice or this proxy statement and Annual Report to any shareholder who resides at a shared address and to which a single copy
of the documents was delivered, if the shareholder makes a request by contacting our Corporate Secretary, at ePlus inc., 13595 Dulles Technology Drive, Herndon, Virginia 20171, or by telephone at (703)
984-8400. If you wish to receive separate copies of the Notice or this proxy statement and the Annual Report in the future, or if you are receiving multiple copies and would like to receive a single copy for your household, you should contact
your broker, bank, or other nominee.
Shareholder Proposals for the 2024 Annual Meeting of Shareholders
Shareholders have the opportunity to submit proposals for the 2024 Annual Meeting of Shareholders. To be considered for inclusion in
the Company’s proxy statement and form of proxy for next year’s Annual Meeting of Shareholders, your shareholder proposal must be submitted in writing by April 2, 2024 (assuming the 2024 Annual Meeting of Shareholders is held within 30 days
of the anniversary of this 2023 Annual Meeting), to the Corporate Secretary at ePlus inc., 13595 Dulles Technology Drive, Herndon, Virginia 20171. Proposals must be received by that date and satisfy the requirements of Rule 14a-8 under the Exchange Act to be included in the proxy statement and on the proxy card
that will be used for solicitation of proxies by the Board for the 2024 Annual Meeting of Shareholders. In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other
than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act postmarked or transmitted electronically no later than July 16, 2024 (assuming the 2024 Annual Meeting of
Shareholders is held within 30 days of the anniversary of this 2023 Annual Meeting).
In accordance with our Bylaws, if you wish to submit a proposal for consideration at next year’s Annual Meeting of Shareholders that is to be
included in next year’s proxy materials, or wish to nominate a candidate for election to the Board at next year’s Annual Meeting of Shareholders, your proposal or nomination must be submitted in writing and received by the Corporate Secretary
not more than 120 days nor later than 90 days in advance of the first anniversary of this 2023 Annual Meeting if the 2024 Annual Meeting of Shareholders is held within 30 days of the anniversary of this 2023 Annual Meeting or, otherwise,
within seven days after the first public announcement of the date of the 2024 Annual Meeting of Shareholders. Assuming that our 2024 Annual Meeting of Shareholders is held on schedule, to be “timely” within the meaning of Rule 14a-4(c) under
the Exchange Act, we must receive written notice of your intention to introduce a nomination or other item of business at that Meeting not earlier than May 17, 2024, and not later than June 16, 2024. If we do not receive written notice during
that time period, or if we meet certain other requirements of the SEC rules, the persons named as proxies in the proxy materials relating to that meeting will use their discretion in voting the proxies if any such matters are raised at the
meeting.
A submission by an ePlus shareholder
must contain the specific information required in ePlus’ Bylaws. If you would like a copy of ePlus’ current Bylaws, please write to the Corporate Secretary at ePlus inc., 13595 Dulles
Technology Drive, Herndon Virginia 20171. ePlus’ current Bylaws may also be found on the Company’s website at https://www.eplus.com/investors/corporate-governance-legal/amended-and-restated-bylaws.
Results of the 2023 Annual Meeting
The preliminary voting results will be announced at the 2023 Annual Meeting. The final voting results will be tallied by the inspector of elections
and published in a Current Report on Form 8-K, which we are required to file with the SEC within four business days following the 2023 Annual Meeting.
Additional Information about the Company
Although the information contained on, or accessible through, our website is not part of this proxy statement, you will find
information about ePlus and our corporate governance practices at http://www.eplus.com/investors. Our website
contains information about our Board, its Committees, and their charters; our Bylaws; and our Code of Conduct, Charter, and Corporate Governance Guidelines. Shareholders may obtain, without charge, printed copies of the above documents by
writing to the Corporate Secretary, at ePlus inc., 13595 Dulles Technology Drive, Herndon, Virginia 20171.
The Company’s principal executive offices are located at ePlus inc., 13595 Dulles Technology Drive,
Herndon, Virginia 20171. The Company’s main telephone number is (703) 984-8400.
FORWARD-LOOKING STATEMENTS
This proxy statement contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These
statements are based on management’s current expectations and involve substantial risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include, but are
not limited to, statements made in the CD&A section of this proxy statement regarding the benefits and anticipated results of our compensation programs and the Compensation Committee’s plans and intentions relating thereto. The Company
undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by law. Forward-looking statements should be evaluated together with the
many uncertainties that affect our business, particularly those mentioned under the heading “Risk Factors” in our Annual Report, and in the periodic reports that we file with the SEC on Form 10-Q.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON SEPTEMBER 14, 2023
The proxy materials for the Company’s 2023 Annual Meeting, including our Annual Report on Form 10-K for the year ended March 31,
2023, and this proxy statement, are available online via the Company’s website at https://www.eplus.com/investors/investor-information/annual-meeting-proxy. Other information on the Company’s
website does not constitute part of the Company’s proxy materials.
It is important that your proxy be returned promptly, whether by mail, by telephone or via the Internet. The proxy may be
revoked at any time by you before it is exercised as described in this proxy statement. If you attend the meeting in person, you may withdraw any proxy (including a telephonic or Internet proxy) and vote your own shares as described in this
proxy statement.
July 31, 2023
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By Order of the Board of Directors
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Erica S. Stoecker
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Corporate Secretary, General Counsel, & Chief Compliance Officer
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TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EPLUS INC.
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
ePlus inc., a corporation organized and existing under the laws of the state of Delaware (the “Corporation”), does hereby certify that:
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Article Seventh of the Amended and Restated Certificate of Incorporation of the Corporation (the “Charter”), shall be deleted in its entirety.
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A new Article Seventh, the text of which is set forth below, shall be added to the Charter immediately after the existing Article Sixth of the Charter:
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SEVENTH
No director or officer of the Corporation shall be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable; provided, however, that the foregoing shall not eliminate or limit the liability of a director or officer (i) for any breach of the
director’s or officer’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for any transaction from which the
director or officer derived an improper personal benefit, or (iv) as applicable solely to directors, for any payment of a dividend or approval of a stock repurchase that is illegal under Section 174 of the Delaware General Corporation Law. No
amendment (including any amendment effected by operation of law, by merger, consolidation or otherwise) to or repeal of this paragraph shall apply to or have any effect on the liability or alleged liability of any director or officer of the
Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal.
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This Certificate of Amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
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This Certificate of Amendment shall become effective at [_]:[_] [a/p].m., Eastern Time, on [Month] [day], 2023.
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IN WITNESS WHEREOF, said corporation has caused this certificate to be signed this ________________ day
of ________________, 2023.
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By:
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Authorized Officer Title:
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Corporate Secretary
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Name
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Erica S. Stoecker
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A-1