Company: DLX
Filing Date: 2025-03-10
Form Type: DEF 14A
Source: 0000027996-25-000107
Chunk: 30

Company: DELUXE CORP
Filing Date: 2025-03-10
Form: DEF 14A
Chunk 30
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 |     | Peer Group composition |
| Goal-setting process |     | Rationale for metric selection |     | Pay-for-performance    |

The following common themes arose during our dialogue with shareholders:

• a preference for clearer and more concise proxy disclosure overall, providing improved transparency to investors, specifically around performance metric selection, adjustments in performance measurements, and the goal-setting process;

• seeking an explanation of the rationale behind the use of the revenue metric in both our short- and long-term incentive plans;

• a request for analysis of year-over-year expectations built into targets under our AIP, including the rationale for any adjustments made;

• a preference for a PSU design that incorporates a cumulative three-year performance period; and

• appreciation for our proactive efforts and planned responsiveness to investor feedback, including steps we identified as already being taken to enhance the program.

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Our board conducted an in-depth review of shareholder feedback and, in response, took the following actions with respect to compensation practices and disclosure:

| Investor Engagement Topics                                                                                                                      |     | Company Actions and Responsiveness                                                                                                                                                                                                                            |
| PSU Grant Design                                                                                                                                
 (investors expressed a preference for traditional three-year targets)                                                                           |     | Beginning with our 2025 annual equity grants, PSU award targets are based on a cumulative three-year measurement, rather than the year-over-year fixed growth rate approach that was utilized in 2024                                                         
 Growth targets are set at the beginning of the performance period(seepage 35)                                                                                                                                                                                 
 The performance metrics and associated weightings remained the same as in 2023, based 50% on cumulative revenue and 50% on cumulative free cash flow, along with a relative TSR modifier.                                                                     |
| AIP Goal Setting                                                                                                                                
 (investors requested analysis of year-over-year expectations built into targets, including describing in detail the reason for any adjustments) |     | Our 2024 enterprise revenue, EBITDA, and EPS targets under our AIP are set in relation to our Annual Operating Plan and are equal to or above the actual results achieved for fiscal year 2023 and as reported in our Annual Report on Form 10-K (seepage 31) 
 Our shareholders have supported our historical practice of adjusting our targets in consideration of business acquisitions and divestitures but requested greater transparency of such adjustments                                                            |
| Overlapping Use of Revenue Metric                                                                                                               
 (investors requested reasoning for using revenue as a performance metric in both AIP and PSUs)                                                  |     | We considered that revenue is just