🧾 What This Document Is

This is a PRE 14A, a preliminary proxy statement. Think of it as a detailed agenda and information packet sent to shareholders before a big company meeting. Its main job is to let shareholders know what will be voted on and provide the background to make informed decisions.

👉 Why it matters: This isn't a financial results report. It's about governance and shareholder power—who runs the company, how they are paid, and what rules they play by.

🏢 What The Company Does

In simple terms, Choice Hotels is a giant hotel brand "franchisor." They don't own most of the hotels you see (like Comfort Inn or Radisson). Instead, they sell the brand, the reservation system, and the loyalty program to independent hotel owners (franchisees) who then build and operate the hotels. They make money primarily through franchise fees and royalties.

• Business Model: Franchising (not owning/managing hotels directly).
• Key Assets: Brands (22 of them), technology platform, and the Choice Privileges loyalty program with over 74 million members.
• Scale: Over 7,500 hotels in more than 50 countries.

🔮 What's Next: The Annual Meeting

Shareholders are invited to a virtual Annual Meeting on May 21, 2026, at 9 a.m. ET. The link is: https://meetnow.global/MHALZH9

This is where all the voting will happen. The proxy statement is your "homework" before the meeting.

🗳️ The Four Proposals to Vote On

Here’s what shareholders need to decide:

1. Elect Eleven Directors

The Board recommends voting FOR all 11 nominees. This includes:

• The Bainum family: Stewart W. Bainum Jr. (Chairman, age 79) and his nephew Brian B. Bainum. Their family collectively owns about 43% of the company, giving them huge influence.
• The CEO: Patrick S. Pacious.
• Eight Independent Directors: Individuals with no material ties to the company, like former healthcare, banking, and tech executives.

👉 Why it matters: You're choosing who provides oversight. The significant family ownership means their votes carry tremendous weight.

2. Approve Executive Compensation ("Say-on-Pay")

This is an advisory vote on the pay for top executives, including the CEO. The document details their pay mix, emphasizing that 83% of the CEO's pay and 78% for other NEOs is "at-risk"—meaning it's tied to hitting performance goals (like operating income and strategic targets).

👉 Why it matters: It’s a chance for shareholders to signal if they think the pay packages are fair and aligned with company performance. Last year, 95% voted in favor.

3. Increase the Board Size Range

The Board proposes amending the company's rules to increase the possible number of directors from a range of 3-12 to 5-15. This doesn't add directors immediately but gives the Board more flexibility for the future.

4. Ratify the Auditor

The Board recommends voting FOR ratifying Ernst & Young LLP as the independent accounting firm for 2026. This is a standard annual approval.

💼 Executive Compensation: How Top Leaders Are Paid

The core philosophy is pay-for-performance. The 2025 program had three main parts:

• Base Salary: Fixed cash pay.
• Short-Term Bonus (MIP): Cash bonus based on annual financial (operating income) and strategic goals. Can pay 0%-200% of target.
• Long-Term Incentives (LTI): Company stock, primarily in the form of Performance-Vesting Restricted Stock Units (PVRSUs). These vest (become owned by the executive) only if the company hits multi-year targets like Earnings Per Share (EPS) and Relative Total Shareholder Return (TSR) compared to peers. The potential payout is significant, ranging from 0% to 230% (or up to 300% in rare cases) of the target value.

Key Governance Practices: They have a clawback policy (can take back pay if there's a financial restatement), robust stock ownership rules for executives/directors, and prohibit hedging and pledging of company stock by employees.

👥 Board & Governance: Who's in Charge?

The leadership structure is:

• Chairman: Stewart W. Bainum Jr. (non-executive, major shareholder).
• CEO: Patrick S. Pacious.
• Lead Independent Director: Gordon A. Smith (former JPMorgan Chase Vice Chairman). He chairs meetings of only the independent directors.

The Board uses several committees for oversight:

• Audit Committee (Chair: William L. Jews)
• Human Capital and Compensation Committee (Chair: John P. Tague)
• Corporate Governance and Nominating Committee (Chair: Ervin R. Shames)
• Diversity Committee (Chair: Liza K. Landsman)

👉 Why it matters: This separation of Chairman and CEO, along with a strong Lead Independent Director, is a governance best practice meant to balance power and provide independent oversight.

📇 Key Contacts & People

Board Nominees:

• Brian B. Bainum (41)
• Stewart W. Bainum Jr. (79), Chairman
• William L. Jews (74, Independent, Audit Chair)
• Monte J.M. Koch (62, Independent)
• Liza K. Landsman (56, Independent, Diversity Chair)
• Patrick S. Pacious (60), President & CEO
• Ervin R. Shames (85, Independent, Governance Chair)
• Gordon A. Smith (67, Independent, Lead Director)
• Maureen D. Sullivan (44, Independent)
• John P. Tague (63, Independent, Comp Chair)
• Donna F. Vieira (61, Independent)

Company Contact for Proxy/Meeting: Jeff Lobb, Senior Vice President, General Counsel & Secretary Choice Hotels International, Inc. 915 Meeting Street, Suite 600, North Bethesda, MD 20852

Investor Relations Email: [email protected]

Annual Meeting Virtual Link: https://meetnow.global/MHALZH9

🧠 The Analogy

This whole process is like the annual parent-teacher association (PTA) meeting for a large school (Choice Hotels).

• The parents (shareholders) are the ultimate owners.
• The principal (CEO) and senior teachers (executives) run the school day-to-day.
• The PTA board (Company's Board of Directors) is elected by parents to oversee the principal, approve the budget (compensation), and set big-picture policies.
• This proxy statement is the meeting agenda and candidate bios sent home before the PTA meeting, explaining what will be voted on and why the current leadership is asking for your support.

🧩 Final Takeaway

This proxy reveals a company with strong family control (43% ownership) but a formal governance structure in place. The key votes are about endorsing the current leadership and compensation philosophy, which is heavily tied to long-term performance. For a shareholder, the main takeaway is that the Bainum family's support is effectively decisive for all proposals, but the document is your guide to understanding what you're endorsing and why the board believes it's the right path.