🧾 What This Document Is

This is Paycom's 2026 Proxy Statement (a DEF 14A filing). It's a formal notice and information package sent to shareholders ahead of the company's Annual Meeting. Its main jobs are to:

Announce the meeting details.
Provide bios and information for the directors you need to vote on.
Explain the compensation for top executives.
Ask you to vote on three specific proposals.

👉 Why it matters: As a shareholder, this document gives you the power to elect board members and have a say on the company's direction and pay practices. It’s your annual chance to hold management accountable.

🏢 What The Company Does

In simple terms, Paycom is a software company that helps other businesses manage their entire workforce. They provide a cloud-based "Human Capital Management" (HCM) platform.

Think of it as a single, integrated app where companies can handle payroll, hire employees, manage time-off, track performance, and more. Their big selling point is automation – using AI and software to reduce manual HR and payroll work for their clients.

🗳️ The Annual Meeting & Your Vote

You are being asked to vote on three main items at the meeting on May 4, 2026.

Proposal	What It Is	Board's Recommendation
1. Elect Directors	Vote for two board members (Sharen J. Turney & J.C. Watts, Jr.)	FOR each
2. Ratify Auditors	Approve Grant LLP as the company's accountant for 2026	FOR
3. Approve Pay	An advisory vote on executive compensation ("Say-on-Pay")	FOR

👉 Why it matters: Your votes determine who governs the company, who checks its financial books, and whether shareholders approve of how top executives are paid.

👥 The Board & Governance

Paycom emphasizes a strong, independent board structure.

Board Composition: 83% of directors are independent. Chad Richison (CEO) is the only non-independent director and also serves as Chairman.
Lead Independent Director: To ensure balance, Frederick C. Peters II serves as a powerful Lead Independent Director, presiding over meetings of independent directors.
Classified Board: Directors serve 3-year terms. The company says this promotes long-term thinking and defends against hostile takeovers.
Committees: All key committees (Audit, Compensation, Nominating) are made up entirely of independent directors.

Why it matters: A strong, independent board is your primary defense against mismanagement. The classified board structure, however, can make it harder for shareholders to quickly change the board's direction.

💼 Executive Pay (The "Say-on-Pay" Vote)

This is a core part of the document. The Compensation Committee explains its philosophy and the 2025 pay for top executives.

Philosophy: Pay is designed to tie executive rewards directly to company performance and stockholder returns. A significant portion is "at-risk," meaning it's based on hitting goals.
2025 Highlights: After shareholder feedback, 50% of equity awards for non-CEO executives were granted as Performance-based Restricted Stock Units (PSUs), directly linking them to financial results.
CEO Pay: Chad Richison's total compensation was $10,320,672 for 2025. The vast majority of this came from stock awards, not cash salary.
Pay vs. Performance: The filing includes a table showing the relationship between executive pay and the company's financial performance (like Revenue and Net Income) over several years.

Why it matters: You are voting on whether the shareholders approve of how the board compensates its leaders. High pay is controversial if not clearly linked to strong, sustainable company performance.

🚀 Company Performance & Strategy

The CEO's letter highlights Paycom's recent results and direction.

2025 Financials: Revenue grew 9% to $2.05 billion. Recurring revenue grew 10%.
Key Innovation: Launched IWant™, an "AI-powered command engine" built into their platform.
Client Base: Served approximately 39,200 clients.
Returning Capital: Returned $85 million in dividends and repurchased over 1.7 million shares in 2025.
Strategic Focus: "Full-solution automation" – using AI and automation (like Beti® for payroll and GONE® for time-off) to make their software indispensable and improve client ROI.

⚖️ Risk Oversight

The board takes specific responsibility for overseeing major risks.

Cybersecurity & AI: The Audit Committee gets quarterly reports on cybersecurity and automation initiatives. They note obtaining an ISO/IEC 42001:2023 certification for AI management.
Compensation Risk: The Compensation Committee reviews pay practices to ensure they don't encourage excessive risk-taking.
Succession Planning: The full Board is actively engaged in planning for executive leadership transitions.

Why it matters: In today's world, cybersecurity and AI risks are huge threats. Seeing the board actively oversee these areas is a positive sign of modern governance.

📇 Key Contacts & People

Chad Richison – Chief Executive Officer & Chairman of the Board
Frederick C. Peters II – Lead Independent Director, Chair of Audit Committee
Shane Hadlock – President & Chief Client Officer
Robert D. Foster – Chief Financial Officer
Jeffrey D. York – Chief Sales Officer
Randy Peck – Chief Operating Officer
Investor Relations Contact: Not specified in excerpt. The principal executive office address is: 7501 W. Memorial Road, Oklahoma City, Oklahoma 73142.

🧠 The Analogy

Paycom is running its annual "corporate health check-up." This proxy statement is the full diagnostic report. The shareholders (the owners) are being asked to: 1) Re-approve the current "doctors" (the board), 2) Keep the same "financial auditor" (Grant Thornton), and 3) Sign off on the "bonus plan" for the "lead surgeons" (executives). The report shows the patient (the company) is in good health financially but faces modern risks like cyber "infections," which the board is actively monitoring.

🧩 Final Takeaway

This is a standard governance document for a mature, successful tech company. The key takeaways are a strong focus on automation and AI, a classified board structure favoring continuity, and executive pay heavily tied to stock performance. Your vote approves the stewards of the company and endorses its strategic direction and compensation philosophy.

Paycom Software, Inc. — DEF 14A Filing