Company: HCKT
Filing Date: 2025-03-21
Form Type: DEF 14A
Source: 0000950170-25-043233
Chunk: 28

Company: HACKETT GROUP, INC.
Filing Date: 2025-03-21
Form: DEF 14A
Chunk 28
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’s desire to pivot its capabilities to support Gen AI-related consulting services and solutions. The Company believes this transition will help it remain competitive and take advantage of the significant shareholder value creation Gen AI can provide. The Company expects this transition will require retraining or recruiting to develop Gen AI aided software delivery capabilities especially given the magnitude and speed at which this technology transition is happening. The Company has articulated its strategy and has launched its AI XPLR platform as its initial entry into the category with favorable market reaction. The Company expects that this initial effort will require great innovation and agility and strategic acquisitions, such as its recently announced acquisition, are part of that overall effort.

The Stock Price Awards are designed to further align the interests of the Company’s key executives with those of its stockholders, by incentivizing the stock performance outcomes and exposing executives more directly to the market price of the Company’s common stock, increasing executive stock ownership over time and promoting retention given their potential value. Based on the closing stock price of $25.60 and 27,651,921 shares outstanding on September 13, 2024, achieving the $50 stock price hurdle represents an approximately $675 million increase in the Company’s market capitalization.

In mid-2023, the Committee introduced a program that allowed Messrs. Fernandez and Dungan to have an opportunity to earn a performance-based equity grant in the form of restricted stock units that would vest over a three-year period based on annual contract value (“ACV”) growth. In 2024 Messrs. Fernandez and Dungan earned a three-year restricted stock unit grant with a grant date fair value of $189,443 and $99,457, respectively, under this program. The program will not be continued for 2025. (See “Executive Compensation Decisions for 2024” on page 19 of this Proxy Statement). The Committee believes that this program further aligns the performance goals and compensation opportunities for Messrs. Fernandez and Dungan with the importance the Company's shareholders place on the growth of its recurring revenue services.

Annual Compensation

Annual compensation of the Company’s named executive officers consists of base salaries, annual incentive compensation and employee benefits.

Base Salaries

The salaries payable to the Company’s named executive officers are generally recommended to the Board by the Compensation Committee during the first quarter of each fiscal year. Each of the named executive officers is a party to an employment agreement that establishes a minimum salary level for the named executive officer. The employment agreements do not provide for any guaranteed increases to base salaries. Messrs