Company: PAYC
Filing Date: 2025-04-03
Form Type: DEF 14A
Source: 0001193125-25-072358
Chunk: 37

Company: Paycom Software, Inc.
Filing Date: 2025-04-03
Form: DEF 14A
Chunk 37
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| (1) | Defined as the Company’s adjusted earnings before interest, taxes, depreciation and amortization as reported in an earnings release or other publicly disseminated report relating to the Company’s financial results for the year ended December 31, 2024. See Appendix A. |

The established financial performance goals were rigorous and, at target achievement level, required significant growth from achieved performance results in the prior year. In establishing Annual Incentive Plan performance goals for Mr. Richison, Mr. Boelte, Mr. Clark and Ms. Faurot for the 2024 performance period, the Committee set the goals for threshold achievement above 2023 actual results, requiring greater than 9.8% revenue growth in order to achieve any payouts and 10.4% revenue growth to achieve target payouts. The goals established for the target achievement level were informed by our annual budgeting process, among other factors. In establishing the total revenue goal and revenue payout percentage for the maximum achievement level, the Committee took into consideration the significant “stretch” level of performance already required to achieve the target as well as the difficulty in achieving results above the “stretch” target level. Revenue Retention Participants For the 2024 performance period,the Annual Incentive Plan awards granted to Messrs. Smith, Peck and Thomas were based on our achievement of annual revenue retention rate targets, which measure our success at retaining clients, a key determinant of our long-term success. The Committee determined that annual revenue retention rate was an appropriate metric for Messrs. Smith, Peck and Thomas because (i) as Chief Information Officer, Mr. Smith helps drive our product and technological innovation, supporting client satisfaction as measured by our annual revenue retention rate, (ii) as Chief Operating Officer, Mr. Peck is directly responsible for all aspects of our client experience, which drives our annual revenue retention rate, and (iii) as Co-ChiefExecutive Officer, Mr. Thomas was focused on operational excellence and other drivers of client satisfaction, which directly impact our annual revenue retention rate. The table below sets forth (i) annual revenue retention rates that were established as the threshold, target and maximum achievement levels for the 2024 performance period and (ii) the payout percentage (as a percent of target) 46

at each achievement level. The payout percentage would increase 17.5% for each 1% (whole) increase in the annual revenue retention rate above target, up to 170% for an annual revenue retention rate of