Company: HCKT
Filing Date: 2025-03-21
Form Type: DEF 14A
Source: 0000950170-25-043233
Chunk: 54

Company: HACKETT GROUP, INC.
Filing Date: 2025-03-21
Form: DEF 14A
Chunk 54
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 restricted stock units. This component allows the Company to distribute to participants equity in lieu of the cash compensation awards that they would receive from most of its competitors. The Board believes that this equity award component of compensation, when funded with restricted stock units under the Plan, accomplishes several key objectives. By issuing restricted stock units based on performance, the Company is able to provide its highest performing associates competitive incentive compensation for current year performance, in lieu of or in addition to cash. This acts as a significant retention tool and aligns the recipients’ interests with those of our shareholders since the awards vest over a three-year period. Additionally, the issuance of equity is essential to the compensation and retention of senior executives since the Company does not provide any retirement (pension or 401(k) match) benefits to this group.

Impact of Plan Amendment.If the Plan amendment is approved by the Company’s shareholders, total shares available for issuance under the Plan will be 2,346,079 as of the Record Date. The aggregate sublimit for restricted stock and restricted stock unit issuances including increases approved by the Company's shareholders since the inception of the Plan will be 22,880,237 shares. The total number of shares available for restricted stock and restricted stock unit issuances will be 1,907,634 shares. These shares and an additional 438,445 would be available for the issuance of stock options and SARs under the Plan as of the Record Date.

Aspects of Equity Compensation at The Hackett Group.The Company’s annual equity incentive plan for its named executive officers provides significant incentive opportunities tied to the attainment of specific financial performance goals (currently annual adjusted diluted net earnings per share growth targets), which are tied to an operating plan approved by the Board. Similar equity incentive plans exist for the senior leaders including practice leaders of the Company with significant responsibilities. The targets for these leaders are tied to the performance of the individual service lines and practices they manage. Each participant in these programs has target equity incentive opportunities expressed as a percentage of salary. The payout levels for the Company's named executive officers and senior leaders including practice leaders are based on target achievements that, when taken in the aggregate, should result

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in a certain level of operating results for the Company as a whole that warrants equity bonus payouts at these levels. As the annual level of corporate performance (measured in adjusted diluted net earnings per share for the Company's named executive officers) changes, so too will the number of potential restricted stock units that may be awarded