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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.   )
Filed by the Registrant                                     
Filed by a party other than the Registrant  

Check the appropriate box:
                
    Preliminary Proxy Statement
    Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
    Definitive Proxy Statement
    Definitive Additional Materials
    Soliciting Material under §240.14a-12
SPS COMMERCE, INC.
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(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
                
    No fee required
    Fee paid previously with preliminary materials
    Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11















https://cdn.kscope.io/4eebb3f8ee95fe27ba9f570894b36a93-Image_10.jpg    SPS COMMERCE, INC.


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333 South Seventh Street, Suite 1000
Minneapolis, Minnesota 55402
(612) 435-9400

April 4, 2024
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Dear Stockholders:
You are cordially invited to join us for our 2024 Annual Meeting of Stockholders, which will be held virtually on Thursday, May 16, 2024, at 8:00 a.m., Central Time. The virtual meeting can be accessed by visiting the following website and entering your control number: www.virtualshareholdermeeting.com/SPSC2024. Stockholders will have the same opportunities to participate in the virtual meeting as you would at an in-person meeting, including having the opportunity to vote and to submit a question during the meeting using the directions on the meeting website.
The notice of the 2024 Annual Meeting of Stockholders and the Proxy Statement that follow describe the business to be conducted at the meeting. Whether or not you plan to attend the virtual meeting, your vote is important and we encourage you to submit your proxy to vote your shares promptly. You may vote your shares by proxy by using a toll-free telephone number, the internet, or mail, free of charge. Instructions regarding these three methods of voting are contained in the proxy materials.
We are pleased to take advantage of SEC rules that allow companies to furnish their proxy materials over the internet. We are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of our proxy materials and our 2023 Annual Report to Stockholders (the “Annual Report”). The Notice contains instructions on how to access those documents and to cast your vote via the internet. The Notice also contains instructions on how to request a paper copy of our proxy materials and our Annual Report. All stockholders who do not receive a Notice will receive a paper copy of the proxy materials and the Annual Report by mail. This process allows us to provide our stockholders with the information they need more promptly, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials.
We look forward to having you attend the virtual meeting.
Chad Collins
Chief Executive Officer
Sincerely,
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Chad Collins
Chief Executive Officer

https://cdn.kscope.io/4eebb3f8ee95fe27ba9f570894b36a93-Image_10.jpg    SPS COMMERCE, INC.

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS
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SPS Commerce, Inc.
333 South Seventh Street
Minneapolis, Minnesota 55402

Notice of 2024 Annual Meeting of Stockholders
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8:00 a.m., Central Time
Thursday, May 16, 2024
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The 2024 Annual Meeting of Stockholders is virtual only. Join us via:
 www.virtualshareholdermeeting.com/SPSC2024

Items of Business
1.
Election of the seven directors, each for a one-year term.
2.
Ratification of the selection of KPMG LLP as independent auditor for the fiscal year ending December 31, 2024.
3.Advisory approval of the compensation of our named executive officers.
4.
Approval of an amendment to the Ninth Amended and Restated Certificate of Incorporation of SPS Commerce, Inc. to allow for exculpation of officers as permitted by Delaware Law.
5.
Any other business that may properly be considered at the meeting or any adjournment or postponement of the meeting.
Record Date – You may vote at the 2024 Annual Meeting of Stockholders if you were a stockholder of record at the close of business on March 22, 2024.
Voting by Proxy – Whether or not you plan to attend the 2024 Annual Meeting of Stockholders virtually, please vote your shares by proxy to ensure they are represented at the 2024 Annual Meeting of Stockholders. To submit your proxy vote, you may follow the instructions for voting via the internet as described in the Notice and the proxy card. If you received a paper copy of the proxy card by mail, you may sign, date, and mail the proxy card in the envelope provided, or you may vote via telephone as described in the proxy card.
By Order of the Board of Directors,
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Chad Collins
Chief Executive Officer

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 16, 2024:
The Notice of Annual Meeting, 2024 Proxy Statement, and 2023 Annual Report are available at www.proxyvote.com.




https://cdn.kscope.io/4eebb3f8ee95fe27ba9f570894b36a93-Image_10.jpg    SPS COMMERCE, INC.

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS
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How to Vote by Proxy
Whether or not you plan to attend the 2024 Annual Meeting of Stockholders virtually, please provide your proxy by either using the internet or telephone as further explained in this Proxy Statement or filling in, signing, dating, and promptly mailing a proxy card.

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BY TELEPHONE

You will need to use a control number that was provided to you by our vote tabulator, Broadridge Financial Solutions.
Call the toll-free number on your proxy card, 24 hours a day, seven days a week, through 11:59 p.m. Eastern Time (“ET”) on May 15, 2024 for shares held directly, and through 11:59 p.m. ET on May 13, 2024 for shares held in the Plan.
Please have your proxy card available and follow the additional steps when prompted.

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BY INTERNET

Go to the web site at www.proxyvote.com, 24 hours a day, seven days a week, through 11:59 p.m. ET on May 15, 2024 for shares held directly, and through 11:59 p.m. ET on May 13, 2024 for shares held in the Plan.
Please have your Notice or proxy card available and follow the instructions provided to obtain your records and to create an electronic voting instruction form.

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BY MAIL

If you received a Notice, first request a paper copy of the proxy materials as directed in the Notice on or before May 2, 2024 to facilitate timely delivery.
Mark, sign, and date your proxy card.
Return it in the postage-paid envelope provided.
If your shares are held in an account at a brokerage firm, bank, or similar organization, you will receive voting instructions from the organization holding your account and you must follow those instructions to vote your shares. You will receive a Notice that will tell you how to access our proxy materials on the internet and vote your shares over the internet. It will also tell you how to request a paper or e-mail copy of our proxy materials.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.










https://cdn.kscope.io/4eebb3f8ee95fe27ba9f570894b36a93-Image_10.jpg    SPS COMMERCE, INC.

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS
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References & Abbreviations
Unless the context otherwise requires, the words “we,” “us,” “our,” the “Company,” “SPS,” and “SPS Commerce” refer to SPS Commerce, Inc. Other abbreviations used in this Proxy Statement are as follows.
AbbreviationTermAbbreviationTerm
BoardBoard of DirectorsPSUPerformance Stock Unit
CEOChief Executive OfficerRSURestricted Stock Unit
PEOPrincipal Executive OfficerDSUDeferred Stock Unit
NEONamed Executive OfficerTSRTotal Shareholder Return
NoticeNotice of Internet Availability of Proxy MaterialsSECSecurities and Exchange Commission
Plan
SPS Commerce, Inc. 401(k) Retirement Savings Plan
Annual Report
2023 Annual Report to Stockholders
KPMGKPMG LLP

Forward-Looking Statements
This Proxy Statement contains forward-looking statements, including information about future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different than those expressed or implied in such statements. Certain of these risks, uncertainties, and other factors are included in documents the Company filed with the SEC, including but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this Proxy Statement are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company expressly disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

https://cdn.kscope.io/4eebb3f8ee95fe27ba9f570894b36a93-Image_10.jpg    SPS COMMERCE, INC.


TABLE OF CONTENTS
PROXY SUMMARY
Business Overview
Chief Executive Officer Succession and Board Leadership
Voting Matters and Voting Recommendations
QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING
Purpose of the Meeting
Meeting Voting Rights and Attendance
Information about the Notice and Proxy Materials
Voting
ITEM 1 - ELECTION OF DIRECTORS
Director Skills, Experience and Diversity
Nominees for Directors
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
Board Leadership Structure
Board Committees
Meeting Attendance
Board Involvement in Risk Oversight
Procedures for Contact the Company, including the Board
Director Independence
Procedures for Selecting and Nominating Director Candidates
Board Diversity
Director Compensation
Corporate Responsibility
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation & Talent Committee Report
2023 Summary Compensation Table
2023 Grants of Plan-Based Awards Table
Outstanding Equity Awards at Fiscal Year-End Table
2023 Options Exercised and Stock Vested Table
Pension Benefits
Non-Qualified Deferred Compensation
Employment Agreements
Potential Payments Upon Termination, Retirement, or Change in Control
CEO Pay Ratio
Pay Versus Performance
AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO OUR INDEPENDENCE AUDITOR
Audit Committee Report
Auditor Fees
Auditor Services Pre-Approval Policy
ITEM 2 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
ITEM 3 - ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS
ITEM 4 - APPROVAL OF AN AMENDMENT TO THE NINTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF SPS COMMERCE, INC. TO ALLOW FOR EXCULPATION OF OFFICERS
SECURITY OWNERSHIP
Security Ownership of Certain Beneficial Owners and Management
Equity Compensation Plan Information
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Related Persons
Policy for Approval of Related Person Transactions
OTHER INFORMATION
Delinquent Section 16(a) Reports
Stockholder Proposals for the 2025 Annual Meeting of Stockholders
Householding of Proxy Materials
Other Matters
APPENDIX A - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
APPENDIX B - PROPOSED AMENDMENT TO THE NINTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION


PROXY SUMMARY
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PROXY SUMMARY
This summary provides a business overview and highlights certain information contained elsewhere in this Proxy Statement. We encourage you to review the entire Proxy Statement. This Proxy Statement and our Annual Report are first being made available to our stockholders on or about April 4, 2024. Website addresses included throughout this Proxy Statement are for reference only. The information contained on our website is not incorporated by reference into this Proxy Statement.
Business Overview
We are a leading provider of cloud-based supply chain management services across our global retail network. Our products make it easier for retailers, grocers, distributors, suppliers, and logistics firms to communicate and collaborate by simplifying how they manage and share item, inventory, order and sales data across omnichannel retail channels. We deliver our products using a full-service model, which includes industry-leading technology and a team of experts that optimize, update, and operate the technology on customers' behalf.
Our products enable customers to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience.
CEO Succession and Board Leadership
Effective October 2, 2023, our Board appointed Chad Collins as our CEO, succeeding Archie Black, who retired as CEO after serving in that role for over 20 years. Mr. Collins was also appointed as a director on that same date. Mr. Black became Executive Chair of our Board, and Phil Soran, prior Chair of the Board, became the Lead Independent Director of the Board, also effective as of October 2, 2023.
























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Proxy Statement for the 2024 Annual Meeting of Stockholders

PROXY SUMMARY
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Voting Matters and Voting Recommendations
The following proposals are included in this Proxy Statement and are scheduled to be voted on at the 2024 Annual Meeting of Stockholders. Our Board recommends that you vote your shares as indicated below.

PROPOSALS:     
THE BOARD OF DIRECTOR’S
VOTING RECOMMENDATIONS:
RATIONALE FOR SUPPORT:FOR FURTHER
DETAILS:
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Election of the seven directors, each for a term of one year.
“FOR” each nominee to the Board
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Our nominees are distinguished leaders who bring a mix of skills, experience, and diversity to our Board and can represent the interests of all stockholders.
Page 9
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Ratification of the selection of KPMG as independent auditor of SPS Commerce, Inc. for the fiscal year ending December 31, 2024.
“FOR”
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Based on its assessment of the qualifications and performance of KPMG, the Audit Committee believes that it is in the best interests of the Company and its stockholders to retain KPMG. 
Page 56
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Advisory approval of the compensation of our NEOs.“FOR”

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We set the compensation of our NEOs based on their ability to create sustainable long-term stockholder value in a cost-effective manner. Our executive compensation philosophy is to align executive compensation decisions with our desired business direction, strategy, and performance.
Page 57
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Approval of an amendment to the Ninth Amended and Restated Certificate of Incorporation of SPS Commerce, Inc. to allow for exculpation of officers as permitted by Delaware Law.
“FOR”

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The amendment to allow for the exculpation of officers aligns the protections available to the Company officers with those currently available to the Company's directors, and helps to limit increased litigation and insurance costs.
Page 58

Other than the proposals described in this Proxy Statement, the Board is not aware of any other matters to be presented for a vote at the 2024 Annual Meeting of Stockholders. If you grant a proxy by telephone, internet, or by signing and returning your proxy card, any of the persons appointed by the Board as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the 2024 Annual Meeting of Stockholders. If any of our nominees are unavailable as a candidate for director, the named proxy holders will vote your proxy for another candidate or candidates as may be nominated by the Board.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING    
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QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING
SPS Commerce, Inc. is soliciting proxies for use at the 2024 Annual Meeting of Stockholders to be held on May 16, 2024, and at any adjournment or postponement of the 2024 Annual Meeting of Stockholders.

Purpose of the Meeting
At our 2024 Annual Meeting of Stockholders, stockholders will act upon the matters outlined in the Notice of Annual Meeting, and management will report on matters of current interest to our stockholders and respond to questions from our stockholders. The matters outlined in the Notice include the following:
1.Election of seven directors, each to a one-year term;
2.Ratification of the selection of KPMG as our independent auditor for the year ending December 31, 2024;
3.Advisory approval of the compensation of our NEOs; and
4.Approval of an amendment to the Ninth Amended and Restated Certificate of Incorporation of SPS Commerce, Inc. to allow for exculpation of officers as permitted by Delaware law.

Meeting Voting Rights and Attendance
1.Q
Who is entitled to vote at the 2024 Annual Meeting of Stockholders?
A
The Board has set March 22, 2024 as the record date for the 2024 Annual Meeting of Stockholders. If you were a stockholder of record at the close of business on March 22, 2024, you are entitled to vote at the 2024 Annual Meeting of Stockholders. As of the record date, 37,088,866 shares of common stock, representing all of our voting stock, were issued and outstanding and, therefore, eligible to vote at the 2024 Annual Meeting of Stockholders.
2.QWhat are my voting rights?
A
Holders of our common stock are entitled to one vote per share. Therefore, a total of 37,088,866 votes are entitled to be cast at the 2024 Annual Meeting of Stockholders. There is no cumulative voting.
3.Q
How many shares must be present to hold the 2024 Annual Meeting of Stockholders?
A
In accordance with our bylaws, shares equal to a majority of the voting power of the outstanding shares of common stock entitled to vote generally in the election of directors as of the record date must be present at the 2024 Annual Meeting of Stockholders in order to hold the 2024 Annual Meeting of Stockholders and conduct business. This is called a quorum. Shares are counted as present at the 2024 Annual Meeting of Stockholders if:
you are present (virtually) and vote at the 2024 Annual Meeting of Stockholders; or
you have properly and timely submitted your proxy as described below under “How do I submit my proxy?”
4.QWhat is the difference between a stockholder of record and a “street name” holder?
AIf your shares are registered directly in your name, you are considered the stockholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares, while you are considered the beneficial owner of those shares. In that case, your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, trust, or other nominee how to vote their shares using the method described below under “How do I submit my proxy?”
5.Q
How can I attend the 2024 Annual Meeting of Stockholders?
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Proxy Statement for the 2024 Annual Meeting of Stockholders

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING    
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A
All of our stockholders are invited to attend the 2024 Annual Meeting of Stockholders virtually. The 2024 Annual Meeting of Stockholders is not being held in person. We believe that hosting the 2024 Annual Meeting of Stockholders online enables increased attendance and participation from locations around the world. The 2024 Annual Meeting of Stockholders has been designed to provide the same rights to participate as you would have at an in-person 2024 Annual Meeting of Stockholders.
6.Q
What do I need to attend the 2024 Annual Meeting of Stockholders?
A
We will be hosting our 2024 Annual Meeting of Stockholders via live webcast. Stockholders can attend the 2024 Annual Meeting of Stockholders online at: www.virtualshareholdermeeting.com/SPSC2024. The webcast will begin at 8:00 a.m., Central Time. We encourage you to access the 2024 Annual Meeting of Stockholders prior to the start time. In order to participate in the 2024 Annual Meeting of Stockholders, you will need the 16-digit control number located on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. A replay of the 2024 Annual Meeting of Stockholders will be publicly available on the Investor Relations page of our website for at least 30 days after the 2024 Annual Meeting of Stockholders.
7.Q
How can I submit a question at the 2024 Annual Meeting of Stockholders?
A
If you would like to submit a question at the 2024 Annual Meeting of Stockholders, you may type your question into the dialog box provided at any point during the virtual 2024 Annual Meeting of Stockholders (until the floor is closed to questions). In order to allow us to answer questions from as many stockholders as possible, we limit each stockholder to one question. Questions and answers may be grouped by topic and substantially similar questions may be answered at once. If we do not have time to answer all the appropriate questions that have been submitted, we expect to post any additional questions and our answers on the Investor Relations page of our website promptly following the 2024 Annual Meeting of Stockholders and retain them for 30 days after the 2024 Annual Meeting of Stockholders.
8.Q
What if I have technical difficulties or trouble accessing the 2024 Annual Meeting of Stockholders?
A
If you encounter any technical difficulties with accessing the virtual 2024 Annual Meeting of Stockholders, please call the technical support number that will be posted on the 2024 Annual Meeting of Stockholders website log-in page.
Information about the Notice and Proxy Materials
1.QWhat is a proxy?
A
A proxy is a designation for another person to vote stock you own; that other person is called a proxy. If you designate someone as your proxy in a written document, that document is called a form of proxy or a proxy card. When you designate a proxy, you also may direct the proxy how to vote your shares. We refer to this as your “proxy vote.” Two executive officers, Chad Collins and Kimberly Nelson, have been designated as proxies for our 2024 Annual Meeting of Stockholders.
2.QIf I received a one-page Notice, how can I receive a full set of printed proxy materials?
A
As permitted by SEC rules, we have elected to provide access to our proxy materials over the internet to record owners and any beneficial owners of our stock who have not previously requested printed proxy materials, which reduces our costs and the environmental impact of our 2024 Annual Meeting of Stockholders. The Notice contains instructions on how to request a printed set of proxy materials, which we will provide to stockholders upon request at no cost to the requesting stockholder within three business days after receiving the request. If you would like to request a printed set of proxy materials, please make your request on or before May 2, 2024 to facilitate timely delivery.
3.QHow do I submit my proxy?
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Proxy Statement for the 2024 Annual Meeting of Stockholders

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING    
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A
If you are a stockholder of record, you can submit a proxy to be voted at the 2024 Annual Meeting of Stockholders in any of the following ways:
over the internet using www.proxyvote.com,
over the telephone by calling a toll-free number; or
signing, dating, and mailing the proxy card in the envelope provided.
To vote by telephone or the internet, you will need to use a control number that was provided to you by our vote tabulator, Broadridge Financial Solutions, and then follow the additional steps when prompted. The steps have been designed to authenticate your identity, allow you to give voting instructions, and confirm that those instructions have been recorded properly.
If you hold your shares in street name, you must vote your shares in the manner prescribed by your broker, bank, trust, or other nominee, which is similar to the voting procedures for stockholders of record. If you request the proxy materials by mail after receiving the Notice, you will receive a voting instruction form (not a proxy card) to use in directing the broker, bank, trust, or other nominee how to vote your shares.
4.QWhat does it mean if I receive more than one printed set of proxy materials?
AIf you receive more than one Notice or printed set of proxy materials, it means that you hold shares registered in more than one account. To ensure that all of your shares are voted, vote once for each control number you receive as described above under “How do I submit my proxy?”
5.QWho pays for the cost of proxy preparation and solicitation?
ASPS pays for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokerage firms, banks, trusts or other nominees for forwarding proxy materials to street name holders. In addition, our directors, officers, and regular employees may solicit proxies personally, telephonically, electronically or by other means of communication. Our directors, officers and regular employees will receive no additional compensation for their services other than their regular compensation.
Voting
1.QHow do I vote?
A
See the “How to Vote by Proxy” section earlier in this document for instructions on the different options on how to vote by proxy.
2.QHow does the Board recommend that I vote?
A
The Board recommends a vote:
FOR the election of each of the nominees for director;
FOR the ratification of the selection of KPMG as the independent auditor of SPS Commerce, Inc. for the year ending December 31, 2024;
FOR advisory approval of the compensation of our NEOs; and
FOR the approval of an amendment to the Ninth Amended and Restated Certificate of Incorporation of SPS Commerce, Inc. to allow for exculpation of officers as permitted by Delaware law.
3.QWhat if I do not specify how I want my shares voted?
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Proxy Statement for the 2024 Annual Meeting of Stockholders

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING    
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A
If you are a stockholder of record and submit a signed proxy card or submit your proxy by internet or telephone but do not specify how you want to vote your shares on a particular matter, we will vote your shares as follows:
FOR the election of each of the nominees for director;
FOR the ratification of the selection of KPMG as the independent auditor of SPS Commerce, Inc. for the year ending December 31, 2024;
FOR advisory approval of the compensation of our NEOs; and
FOR the approval of an amendment to the Ninth Amended and Restated Certificate of Incorporation of SPS Commerce, Inc. to allow for exculpation of officers as permitted by Delaware law.
Your vote is important. We urge you to vote, or to instruct your broker, bank, trust, or other nominee how to vote, on all matters before the 2024 Annual Meeting of Stockholders. If you are a street name holder and fail to instruct the stockholder of record how you want to vote your shares on a particular matter, those shares are considered to be “uninstructed.” New York Stock Exchange rules determine the circumstances under which member brokers of the New York Stock Exchange may exercise discretion to vote “uninstructed” shares held by them on behalf of their clients who are street name holders. Other than the ratification of the selection of KPMG as our independent auditor for the year ending December 31, 2024, the rules do not permit member brokers to exercise voting discretion as to the uninstructed shares on any matter included in the notice of meeting. With respect to the ratification of the selection of KPMG as our independent auditor for the year ending December 31, 2024, the rules permit member brokers to exercise voting discretion as to the uninstructed shares. For matters with respect to which the broker, bank or other nominee does not have voting discretion or has, but does not exercise, voting discretion, the uninstructed shares will be referred to as a “broker non-vote.” For more information regarding the effect of broker non-votes on the outcome of the vote, see below under “How are votes counted?”
4.QCan I change my vote after submitting my proxy?
A
Yes. You may revoke your proxy and change your vote at any time before your proxy is voted at the 2024 Annual Meeting of Stockholders, in any of the following ways:
by submitting a later-dated proxy by telephone or the internet before 11:59 p.m. ET on May 15, 2024 for shares held directly and before 11:59 p.m. ET on May 13, 2024 for shares held in the Plan;
by submitting a later-dated proxy to the Chief Financial Officer of SPS, which must be received by us before the time of the 2024 Annual Meeting of Stockholders;
by sending a written notice of revocation to the Chief Financial Officer of SPS, which must be received by us before the time of the 2024 Annual Meeting of Stockholders; or
by voting at the virtual 2024 Annual Meeting of Stockholders.
5.Q
Can I vote my shares at the 2024 Annual Meeting of Stockholders?
A
If you are a stockholder of record or beneficial owner of common stock as of the close of business on the record date, you may vote your shares during the virtual 2024 Annual Meeting of Stockholders by using the 16-digit control number on your Notice, your proxy card, or your voting instruction form, as applicable, on www.virtualshareholdermeeting.com/SPSC2024. Even if you currently plan to attend the 2024 Annual Meeting of Stockholders, we recommend that you submit your proxy as described above so your vote will be counted if you later decide not to attend the 2024 Annual Meeting of Stockholders. If you submit your vote by proxy and later decide to vote at the Meeting, the vote you submit at the 2024 Annual Meeting of Stockholders will override your proxy vote.
6.QWhat vote is required to approve each item of business included in the Notice of Meeting?
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Proxy Statement for the 2024 Annual Meeting of Stockholders

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING    
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A
A director nominee will be elected if the number of votes cast “FOR” the nominee exceeds the number of votes cast “AGAINST” the nominee. Any incumbent director who does not receive a greater number of votes “FOR” than “AGAINST” his or her reelection in an uncontested election shall tender his or her resignation to the Board, subject to acceptance. The Board will determine whether to accept or reject the offer to resign within 90 days of certification of the stockholder vote.

The affirmative vote of the holders of a majority of the outstanding shares of common stock present at the 2024 Annual Meeting of Stockholders or represented by proxy and entitled to vote at the 2024 Annual Meeting of Stockholders is required to ratify the selection of our independent auditor.

For the advisory vote to approve the executive compensation of our NEOs, there is no minimum approval necessary for the proposal since it is an advisory vote; however, the Board will consider the results of the advisory vote when considering future decisions related to such proposals.

The affirmative vote of the holders of a majority of the outstanding shares of our common stock is required to approve the amendment to our Ninth Amended and Restated Certificate of Incorporation to allow for exculpation of officers as permitted by Delaware law.
7.QHow are votes counted?
A
You may vote “FOR,” “AGAINST” OR “ABSTAIN” for each director nominee and on the other proposals. If you properly submit your proxy but abstain from voting for a director nominee or on the other proposals, your shares will be counted as present at the 2024 Annual Meeting of Stockholders for the purpose of determining a quorum and for the purpose of calculating the vote on the particular matter(s) with respect to which you abstained from voting. If you do not submit your proxy or voting instructions and also do not vote at the annual meeting, your shares will not be counted as present at the 2024 Annual Meeting of Stockholders for the purpose of determining a quorum unless you hold your shares in street name and the broker, bank, trust or other nominee has discretion to vote your shares and does so. For more information regarding discretionary voting, see the information above under “What if I do not specify how I want my shares voted?”

If you abstain from voting for one or more of the director nominees or you do not vote your shares on this matter (whether by broker non-vote or otherwise), this will have no effect on the outcome of the vote. With respect to the proposal to ratify the selection of KPMG as our independent auditor, if you abstain from voting, doing so will have the same effect as a vote against the proposal, but if you do not vote your shares (or, for shares held in street name, if you do not submit voting instructions and your broker, bank, trust or other nominee does not or may not vote your shares), this will have no effect on the outcome of the vote. Abstentions and broker non-votes will have no effect on the advisory vote to approve the compensation of our NEOs. Abstentions and broker non-votes will have the same effect as a vote against the proposal to approve the amendment to our Ninth Amended and Restated Certificate of Incorporation.








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Proxy Statement for the 2024 Annual Meeting of Stockholders

ITEM 1 – ELECTION OF DIRECTORS
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ITEM 1 – ELECTION OF DIRECTORS
The Board currently consists of eight directors. Our Amended and Restated Bylaws provide that each member of our Board is elected annually by a majority of votes cast if the election is uncontested. All of our directors, except for Mr. Collins, were elected by our stockholders at our 2023 annual meeting of stockholders. Mr. Collins was appointed as a director of the Company upon his appointment as CEO on October 2, 2023. Mr. Collins was identified by a third-party search firm.

Based upon the recommendation of the Governance & Nominating Committee, the Board has nominated seven directors for election at the 2024 Annual Meeting of Stockholders. As announced by the Company on February 29, 2024, Mr. Black will not stand for re-election as a director at the 2024 Annual Meeting of Stockholders. The Board has taken action to reduce the size of the Board to seven members effective upon the expiration of Mr. Black's term as a director at the 2024 Annual Meeting of Stockholders. Proxies cannot be voted for a greater number of persons than seven, which is the number of nominees named in this Proxy Statement.
The following are directors who currently serve on our Board and are nominated for reelection and continued service.
Name
Age(1)
PositionDirector SinceIndependent
Chad Collins48Chief Executive Officer2023No
James Ramsey51Director2014Yes
Marty Reaume58Director2018Yes
Tami Reller59Director2016Yes
Philip Soran67
Lead Independent Director(2)
2010Yes
Anne Sempowski Ward52Director2020Yes
Sven Wehrwein73Director2008Yes
(1)Age as of April 4, 2024
(2)Effective immediately after the conclusion of our 2024 Annual Meeting of Stockholders, Mr. Soran will become Chair of the Board.
All nominated Board members have agreed to serve as directors if elected. If, for any reason, any nominee becomes unable to serve before the 2024 Annual Meeting of Stockholders occurs, the persons named as proxies may vote your shares for a substitute nominee selected by our Board. The director nominees, if reelected, will serve until our 2025 annual meeting of stockholders or until their successors are elected and qualified.

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The Board recommends a vote FOR the election of each of the director nominees. Proxies will be voted FOR the election of each of the nominees unless otherwise specified.
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Set forth below is biographical information for each of the nominated directors. The following includes certain information regarding our director nominees’ collective and individual experience, qualifications, attributes, and skills that led the Board to conclude that the makeup of the Board is appropriate and each nominee should continue service.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

ITEM 1 – ELECTION OF DIRECTORS
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Director Skills, Experience and Diversity
The Board strives for well-qualified directors, with the diversity, experience, and skill to be effective and to provide strong oversight and thought leadership to management and exercise oversight responsibilities on behalf of SPS stockholders. Each director brings experience, skills, and diversity that complement those of the other directors. The Board believes that all the directors nominated for election are highly qualified, and have the skills, experience, and diversity required for service on the Board.
Core skills, experiences, and statistics for each of our director nominees are included in the summary graphics below. The lack of a skill or experience noted below does not mean the director does not possess that qualification but rather a noted skill or experience indicates a specific area of focus or expertise on which the Board relies most heavily.
Collins
RamseyReaumeRellerSoranSempowski WardWehrwein
Knowledge, Experience, and Skill
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Financial Literacy
Experience in overseeing and understanding financial statements, capital structure, and internal controls
lllll
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SaaS
Experience in the Software-as-a-Service (SaaS) business model
llllll
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Technology
Experience in managing and developing technology, including cybersecurity
llll
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Retail Market
Experience in our primary customer market, retailers
ll
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Senior Leadership / Corporate Governance
Experience in senior leadership or the direct management of corporate governance to assist in our organizational and operating structures, including risk management
lllllll
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Talent Management / Human Resources
Experience in the direct management of retaining and compensating people
lllll
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Sales / Customer Engagement
Experience in the direct management of the sales or customer success organizational functions
lllll
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Mergers & Acquisitions
Experience in the various phases of M&A work including target identification, due diligence, agreement negotiation and review, and integration
lllllll
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International Operations
Experience in the complex landscape of existing and growth into multi-national operations
lllll
Gender
Malellll
Femalelll
Race/Ethnicity
African American or Blackl
Whitellllll
549755813908910
Average Tenure*
9.7
Average Age
58
*excludes non-independent directors

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Proxy Statement for the 2024 Annual Meeting of Stockholders

ITEM 1 – ELECTION OF DIRECTORS
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Nominees for Directors

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Chad Collins
Director since 2023
Chief Executive Officer, SPS Commerce, Inc.

Professional HighlightsSkills and Experiences
o    SPS Commerce, Inc., CEO, 2023 - present
o    Körber Supply Chain, CEO - Software, 2020 - 2023
           Global provider of a wide range of end-to-end supply chain solutions
o   Highjump Software (and parent company, Accellos), various leadership roles, 2002 - 2020, including President, 2015-2017, and CEO, 2017 - 2020
            Global provider of supply chain management software and trading partner
            software
o  Cap Gemini Ernst & Young, Supply Chain Consultant, 1998 - 2002

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Financial Literacy
SaaS
Technology
Retail Market
Senior Leadership / Corporate Governance
Talent Management / Human Resources
Sales / Customer Engagement
Mergers & Acquisitions
International Operations
Primary Nominee Qualifications
Extensive management and operational experience in supply chain technology, as well as his role with our Company.
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James Ramsey
Director since 2014

Professional HighlightsSkills and Experiences
o     Director
    Informed IQ, a banking technology company
    Wisdom Labs, a workplace wellbeing technology company
    Ambra Health (formerly DicomGrid), a medical data and image management cloud software company
o     Vlocity Inc., Director, 2014 - 2020
Co-founder of the industry-specific cloud CRM application provider
o     Flipgrid, Inc., Director, 2014 - 2019
Education technology software company
o    NetSuite Inc., several executive roles including Executive Vice President of
         Worldwide Sales and Distribution, 2003 - 2013
Publicly traded provider of cloud-based business management software
o     Oracle Corporation, various sales management roles, 1995 - 2003
Publicly traded software and technology provider
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SaaS
Senior Leadership / Corporate Governance
Talent Management / Human Resources
Sales / Customer Engagement
Mergers & Acquisitions
International Operations
Primary Nominee QualificationsExperience in software sales and in rapidly scaling sales organizations.


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Proxy Statement for the 2024 Annual Meeting of Stockholders

ITEM 1 – ELECTION OF DIRECTORS
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Nominees for Directors
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Marty Reaume
Director since 2018

Professional HighlightsSkills and Experiences
o    SemperVirens Venture Capital, HR Venture Advisor, 2020 - present
Early stage venture capital fund
o    Director
Wisdom Labs, a workplace wellbeing technology company
OpenClassrooms, an online education and training platform (Advisory Board)
o    Twilio Inc., Chief People Officer, 2017 - 2019
Publicly traded developer and provider of a communication cloud-based platform
o    Fitbit, Inc., Chief People Officer, 2015 - 2017
Publicly traded health solution technology provider
o    NetSuite, Inc., Chief People Officer, 2009 - 2014; Head of Human Resources, 2006 - 2009
Publicly traded provider of cloud-based business management software
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SaaS
Senior Leadership / Corporate Governance
Talent Management / Human Resources
Mergers & Acquisitions
International Operations
Primary Nominee QualificationsStrong human resources, executive compensation, talent acquisition and development, and mergers and acquisitions expertise.

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Tami Reller
Director since 2016
Chair of the Board, 2018 - 2021

Professional HighlightsSkills and Experiences
o   Duly Health and Care, Executive Chair, 2023 - present; CEO, 2022 - 2023; President, 2021 - 2022
Multi-specialty health care group
o    UnitedHealth Group, Executive Vice President and Chief Marketing and Experience Officer of UnitedHealthcare, 2017 - 2021
Publicly traded health benefits platform
o    Optum (subsidiary of UnitedHealth Group), Chief Growth Officer, Chief Financial Officer, 2016 - 2017; Chief Marketing Officer, 2014 - 2016
Healthcare services provider
o    Microsoft Corporation, several executive roles including Executive Vice President of Marketing, Divisional Chief Financial Officer and Marketing Officer, 2001 - 2014
Publicly traded software and technology company
o    Great Plains Software, Chief Financial Officer, 1999 - 2001
Publicly traded accounting and ERP software provider
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Financial Literacy
SaaS
Technology
Senior Leadership / Corporate Governance
Sales / Customer Engagement
Mergers & Acquisitions
International Operations
Primary Nominee QualificationsExtensive experience managing software companies, financial understanding and auditing review, and general business knowledge.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

ITEM 1 – ELECTION OF DIRECTORS
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Nominees for Directors
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Philip Soran
Director since 2010
Chair of the Board: 2014 - 2017, 2022 - 2023
Lead Independent Director: 2023 - Present

Professional HighlightsSkills and Experiences
o    Director
   Piper Sandler Companies, a publicly traded investment bank and asset management firm; Lead director since 2018
   Foodsby, a food delivery service
   Origina, a technology services company
   Spineology Inc., a medical technology company
o    Flipgrid, Inc., Executive Chairman, 2015 – 2018
Education technology software company
o    Compellent Technologies, Inc., President, CEO, Director, 2002 - 2012
Co-founded publicly traded software company
o    Xiotech, President, CEO, Director, 1995 - 2001
Co-founded network storage business
o Prodea Software Corporation, Executive Vice President, 1993 - 1995
Data warehousing software company
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Financial Literacy
SaaS
Technology
Senior Leadership / Corporate Governance
Talent Management / Human Resources
Sales / Customer Engagement
Mergers & Acquisitions
International Operations
Primary Nominee QualificationsExperience as a chief executive officer of a publicly traded company, service on a variety of public and private technology-related company boards, and experience in founding and building technology companies as well as corporate vision and operational knowledge.

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Anne Sempowski Ward
Director since 2020

Professional HighlightsSkills and Experiences
o     CURiO Brands (formerly The Thymes, LLC), CEO and Chair, 2012 - present
Consumer goods provider
o     Director
   Vanda Pharmaceuticals, publicly traded biopharma company
   Spectrum Brands, publicly traded consumer goods provider (through 2021)
o  The FORWARD Group, CEO, 2010 - 2012
Co-founded business consulting group
o     Johnson Publishing Company, President & Chief Operating Officer, 2007 - 2010
Media and beauty company
o    The Coca-Cola Company, Assistant Vice President, 2006 - 2007
Publicly traded multinational consumer goods provider
o    Procter & Gamble, Associate Marketing Director, 1994 - 2006
Publicly traded multinational consumer goods provider
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Financial Literacy
Retail Market
Senior Leadership / Corporate Governance
Talent Management / Human Resources
Sales / Customer Engagement
Mergers & Acquisitions

Primary Nominee QualificationsExperience as a chief executive officer and brand builder in the high-growth consumer and retail environment, executive experience with consumer goods companies and extensive marketing, brand management, and operational leadership for companies across multiple sectors.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

ITEM 1 – ELECTION OF DIRECTORS
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Nominees for Directors
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Sven Wehrwein
Director since 2008

Professional HighlightsSkills and Experiences
o     Independent financial consultant to emerging companies, 1999 - present
o     Over 40 years in accounting and finance roles as a certified public accountant (inactive), investment banker to emerging growth companies, chief financial officer, and audit committee chair
o     Director
   Atricure, Inc., publicly traded medical device company
   Proto Labs, Inc., publicly traded internet-enabled manufacturer of custom parts
o     Served as a director of the following publicly traded companies:
   Cogentix Medical, Inc., 2006 - 2016
   Compellent Technologies, Inc., 2007 - 2011
   Image Sensing Systems, Inc., 2006 - 2012
   Synovis Life Technologies, Inc., 2004 - 2012
   Vital Images, Inc., 1997 - 2011
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Financial Literacy
SaaS
Technology
Senior Leadership / Corporate Governance
Mergers & Acquisitions
Primary Nominee QualificationsCapabilities in financial understanding, strategic planning, and auditing expertise, given his experiences in investment banking and in financial leadership positions.


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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
The Board conducts its business through meetings of established standing committees. Each of the standing committees has adopted and operates under a written charter, all of which are available within our corporate governance section of our investor relations portion of our website at www.spscommerce.com. We have adopted a code of business conduct and ethics relating to the conduct of our business by our directors, officers (including our principal executive officer and principal financial officer), and employees (our "Code of Conduct"), that can also be found in the same section on our website. We plan to post on our website at the address described above any future amendments or waivers of our Code of Conduct. Additionally, our Corporate Governance Guidelines are also available in the same section on our website.

Board Leadership Structure
One of the key responsibilities of the Board is to have a leadership structure that allows it to provide effective oversight of management and maximize the contributions of its members. The Board evaluates its leadership structure on an ongoing basis. The Board does not have a policy as to whether the position of the Chair of the Board and the position of the CEO or other executive position should be separate. Rather, the Board believes it should retain the flexibility to decide what is in the best interest of the Company at any point in time. If the position of Chair is held by a director who is not independent, the Board will appoint a Lead Independent Director from among its members using criteria the Board deems appropriate. If the Chair is an independent director, then the duties of the Lead Independent Director described below shall be part of the duties of the Chair.
The Board believes that in the absence of an independent Chair, a Lead Independent Director is an integral part of a governance structure that promotes strong, independent oversight of the Company’s management and affairs. In fulfilling his or her responsibilities, the Lead Independent Director, if any, will: preside at all meetings of the Board when the Chairperson is not present; convene and preside at meetings of the independent directors, including executive sessions; review and provide input on meeting agendas for the Board and its committees; and perform such other duties as may be requested by the Board. Currently:
Chad Collins serves as our CEO, and has done so since October 2, 2023.
Archie Black serves as Executive Chair of the Board, and has done so since October 2, 2023. He will continue as our Executive Chair until the 2024 Annual Meeting of Stockholders when his term as a director ends.
Philip Soran serves as our Lead Independent Director, and has done so since October 2, 2023. He will continue to serve in such capacity until the 2024 Annual Meeting of Stockholders at which time he will become Chair of the Board. He also served as Chair of the Board from 2022 to October 2, 2023, as well as from 2014 to 2017.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Board Committees
The Board has established an Audit Committee, a Compensation & Talent Committee, a Governance & Nominating Committee and a Finance & Strategy Committee. The following sets forth the membership of each of our committees as of March 22, 2024.
COMMITTEES
DIRECTOR1
AuditCompensation & TalentGovernance & NominatingFinance &
Strategy
James Ramsey
l
u

Marty Reaumeull
Tami Rellerl
Anne Sempowski Wardll
Philip Soranll
Sven Wehrweinuu
u Chair    l Member

1 Neither Mr. Collins nor Mr. Black currently serve on a committee.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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The primary responsibilities, members, and number of meetings in 2023 of each Board committee are discussed in turn below.
Audit Committee
Chair:
Among other matters, our Audit Committee:
assesses management's processes for ensuring the quality and integrity of the Company's financial statements through oversight of the accounting and financial reporting process and audits of the financial statements;
evaluates the qualifications, performance and independence of our independent auditor and reviews and approves both audit and non-audit services to be provided by the independent auditor;
discusses with management and our independent auditors any major issues as to the adequacy of our internal controls, any actions to be taken in light of significant or material control deficiencies and the adequacy of disclosures about changes in internal control over financial reporting;
oversees our legal and regulatory compliance process;
oversees management's processes to monitor, control, and report on significant corporate risk exposures;
establishes procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls or auditing matters, including the confidential, anonymous submission by employees of concerns regarding accounting or auditing matters;
oversees our investment and cash management policies; 
oversees, reviews and discusses with management: the Company’s cybersecurity, information technology and data security risks and threats; the potential impact of those risks and threats on the Company’s business, operations and reputation; and management’s processes, procedures and actions to identify, assess, monitor, mitigate and remediate such risks and threats; and
prepares the Audit Committee report that SEC rules require to be included in our annual Proxy Statement.
Each of the members of our Audit Committee meets the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq Global Market. Our Board has determined that Mr. Wehrwein is an Audit Committee financial expert, as defined under the applicable rules of the SEC. Each member of our Audit Committee satisfies the Nasdaq Global Market independence standards and the independence standards of Rule 10A-3(b)(1) of the Securities Exchange Act of 1934.
Sven Wehrwein
Additional Members:
Tami Reller
Anne Sempowski Ward
Number of Meetings Held in 2023:
6
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17|
Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Compensation & Talent Committee
Chair:
Among other matters, our Compensation & Talent Committee:
reviews and approves, on an annual basis, the goals, and objectives relevant to our executive officers' compensation;
assesses and approves our CEO and other executive officers’ annual compensation, including salary, bonus, incentive and equity-based compensation, based on a review of executive officer performance evaluations, a review of peer company compensation programs, and external consultations;
administers our equity compensation plans;
periodically reviews the compensation paid to our non-employee directors and recommends any adjustments in director compensation to our Board;
oversees and administers our compensation recovery policies; and
reviews and provides guidance to management with respect to our human capital management policies, programs and strategies, including but not limited to those regarding talent recruitment, development and retention, health and safety, organizational culture, diversity, equity and inclusion, and compensation and benefits.
Marty Reaume
Additional Members:
James Ramsey
Philip Soran
Number of Meetings Held in 2023:
5

Governance & Nominating Committee
Chair:
Among other matters, our Governance & Nominating Committee:
identifies and recommends individuals qualified to become members of the Board;
determines the composition of the Board and its committees;
oversees the evaluation of our Board and individual directors;
reviews and recommends any modifications to our Corporate Governance Guidelines;
recommends to the Board succession plans for our CEO and other critical, senior management positions; and
provides oversight of, and periodically discusses with management, the Company’s objectives, policies, and efforts related to ESG and other corporate responsibility matters, including with respect to sustainability, environmental, corporate citizenship, social, governance, political, and public policy matters.
James Ramsey
Additional Members:
Marty Reaume
Anne Sempowski Ward
Number of Meetings Held in 2023:
8
Finance & Strategy Committee
Chair:
Among other matters, our Finance & Strategy Committee assists the Board in matters involving certain finance and strategic matters, including:
reviewing and monitoring the management of capital;
reviewing dividend and share repurchase policies and practices: and
reviewing proposed merger, acquisition, recapitalization, financing and other similar transactions.
Sven Wehrwein
Additional Members:
Marty Reaume
James Ramsey
Number of Meetings Held in 2023:
4
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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Meeting Attendance
Our Corporate Governance Guidelines provide that our directors are expected to attend meetings of the Board and of the committees on which they serve, as well as our annual meeting of stockholders. Our Board and the committees held the following meetings during 2023.

CommitteeMeetings (#)
Audit
Compensation & Talent
Governance & Nominating
Finance & Strategy
Full Board of Directors
Each of our directors attended at least 75% of the meetings of the Board and the committees on which they served during 2023, and each of our directors at the time attended our 2023 annual meeting of stockholders.

Board Involvement in Risk Oversight
Responsibility of Management
Our management is responsible for identifying the various risks facing us, formulating risk management policies and procedures, and managing our risk exposures on a day-to-day basis.
Responsibility of the Board
The Board is responsible for monitoring our risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks; the Board is not responsible, however, for identifying or managing our various risks.
Responsibility of the Audit Committee
The Audit Committee is primarily responsible for providing oversight in the areas of financial risk, legal and regulatory compliance, and cybersecurity risk. The Board, with the assistance from the Audit Committee, is primarily responsible for monitoring management’s responsibility in all other areas of risk management for the Company.
Responsibility of the Compensation & Talent Committee
The Compensation & Talent Committee is charged with overseeing risks associated with our variable compensation policies and practices and annually reviews whether risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on SPS.

The Audit Committee and the full Board focus on the material risks facing us, including financial, operational, market, geographic, liquidity, legal and regulatory, and cybersecurity risks, to assess whether management has reasonable controls in place to address these risks. Accordingly, management regularly reported to the Audit Committee and the Board on the risks described above and related risk management during 2023. The Board believes this division of responsibilities provides an effective and efficient approach for addressing risk management.


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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Procedures for Contacting the Company, including the Board
Throughout this Proxy Statement, we identify reasons stockholders may need or wish to contact the Company. All of those communications should be directed to the title of the person indicated at the address below.
Stockholders who wish to communicate with the Board may do so by writing to the Board or a particular director in care of the Secretary of the Company. Communications should be delivered to the address below, with attention to “Secretary”.
SPS Commerce, Inc.
333 South Seventh Street, Suite 1000
Minneapolis, Minnesota 55402
All communications addressed to the Board will initially be received and processed by the Secretary of the Company, who will then refer the communication to the appropriate Board member (either the director named in the communication, the chairperson of the Board committee having authority over the matter raised in the communication, or the chairperson of the Board in all other cases). The director to whom a communication is referred will determine, in consultation with our counsel, whether a copy or summary of the communication will be provided to the other directors. The Board will respond to communications if and as appropriate.

Director Independence
As required under the Nasdaq Global Market rules and regulations, a majority of the members of a listed company’s Board must qualify as “independent,” as affirmatively determined by the Board. The Board consults with our counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the Nasdaq Global Market, as in effect from time to time.
Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and our Company, our management, and our independent registered public accounting firm, the Board has affirmatively determined that all of our Company’s directors are independent directors within the meaning of the applicable listing standards of the Nasdaq Global Market, except for Mr. Collins, our CEO, and Mr. Black, our Executive Chair.
As required under the Nasdaq Global Market rules and regulations, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. All members of each of the Audit Committee, Compensation & Talent Committee, and Governance & Nominating Committee have been determined by the Board to be independent within the meaning of the Nasdaq Global Market rules and regulations and applicable SEC rules.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Procedures for Selecting and Nominating Director Candidates
Stockholders may directly nominate a person for election to our Board by complying with the procedures set forth in Article II, Section 2.4(a)(2) of our bylaws, and with the rules and regulations of the SEC. Under our bylaws, only persons nominated in accordance with the procedures set forth in the bylaws will be eligible to serve as directors. In order to nominate an individual for service as a director, you must be a stockholder at the time you give the Board notice of your nomination, and you must be entitled to vote for the election of directors at the 2024 Annual Meeting of Stockholders at which your nominee will be considered. In accordance with our bylaws, director nominations generally must be made pursuant to notice delivered to, or mailed and received at, our principal executive offices at the address above, not later than the 90th day (February 15, 2025), nor earlier than the 120th day (January 16, 2025), prior to the first anniversary of the prior year’s annual meeting of stockholders. Your notice must set forth all information relating to the nominee that is required to be disclosed in solicitations of proxies for the election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (including the nominee’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected). Your notice also must set forth certain information as set forth in our bylaws.

A stockholder who intends to solicit proxies in support of director nominees other than the Company’s director nominees and who has delivered a notice of nomination pursuant to our bylaws shall promptly certify to the Company, and notify the Company in writing, that it has complied with or will comply with the requirements of Rule 14a-19 under the Exchange Act, and upon request of the Company, shall, not later than five business days prior to the date of the applicable meeting of stockholders, deliver to the Company reasonable evidence of such compliance.
If a stockholder desires to recommend a candidate for consideration by the Governance & Nominating Committee, instead of nominating that director for election by stockholders, the Governance & Nominating Committee will consider such director candidates recommended to it by stockholders in the same manner that it considers all director candidates. Stockholders who wish to suggest qualified candidates should write to the Company at the address listed above, to the attention of the Chair of the Governance & Nominating Committee, stating in detail the characteristics that make the candidate a suitable person to serve on our Board in light of our Corporate Governance Guidelines.
As required by our Corporate Governance Guidelines, when evaluating the appropriate characteristics of candidates for service as a director, the Governance & Nominating Committee takes into account many factors. The Board selects and recommends to stockholders qualified individuals who, if added to the Board, would provide the appropriate mix of director characteristics, experience, perspectives, and skills. Board candidates are considered based on various criteria, including breadth and depth of relevant business and Board skills and experiences, judgment and integrity, reputation in their profession, diversity of background, education, leadership ability, concern for the interests of stockholders and relevant regulatory guidelines. These considerations are made in the context of an assessment of the perceived needs of the Board at the particular point in time. We do not have a policy with respect to Board diversity, however, the Board seeks to have a Board that represents diversity as to gender, race, ethnicity, and background experiences. We are committed to inclusiveness and as such, when searching for director nominees, the Governance & Nominating Committee endeavors to include highly qualified diverse candidates (including gender, race, and ethnicity) in the pool from which nominees are chosen. Directors must be willing and able to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serving on the Board for an extended period of time.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Board Diversity
As of April 4, 2024, the diversity of our Board was as follows:

Board Diversity Matrix
Total number of directors8
Part I: Gender IdentityFemaleMale
Directors35
Part II: Demographic Background
African American or Black1
White25

Director Compensation
Our director compensation program is designed to compensate our non-employee directors fairly for work required for a company of our size and scope and to align their interests with the long-term interests of our stockholders. Director compensation reflects our desire to attract, retain, and use the expertise of highly qualified individuals serving on our Board. The Compensation & Talent Committee reviews the compensation structure and overall level of compensation arrangements for our non-employee directors every two years relative to the midpoint for non-employee directors of our Peer Group, as discussed in the Compensation Discussion & Analysis section below, and makes recommendations to our Board.

Equity Awards
Effective May 12, 2023, our director compensation program provided that each non-employee director received a total annual equity grant of $182,500. The equity-based compensation was split equally ($91,250) between stock options and the director’s election for restricted stock, DSUs or a combination thereof. The components were granted on the date of the 2023 annual meeting of stockholders, calculated as the grant date fair value of the equity awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“ASC Topic 718”). The grants vest in four equal installments on the last day of each fiscal quarter, with the first vesting date occurring on June 30, 2023, provided the recipient remains a member of the Board as of each of the vesting dates. Stock options have an exercise price equal to the fair market value of our common stock on the date of grant. DSUs must be retained until completion of the director’s service on the Board, and upon completion of such service, convert into an equal number of shares of our common stock. A director may defer receipt of the shares for up to ten years after completion of service.
The Board established a CEO Search Committee in 2023 for the purposes of leading our CEO search efforts. The non-employee directors who served on the committee received a one-time equity grant on August 3, 2023, with a value of $20,000 of restricted stock or DSUs, as elected by the director. This resulted in a grant of 118 shares to each of Messrs. Soran and Wehrwein and Ms. Reaume. The awards vest immediately prior to the 2024 Annual Meeting of Stockholders.
Additionally in connection with initial appointment to the Board, each new non-employee director receives a stock option grant to purchase $182,500 of shares of our common stock, granted following the release of earnings for the quarter in which appointment occurs. The shares vest in equal monthly installments over three years commencing on the first day of the calendar month following the initial appointment or election to the Board, provided the recipient remains a member of the Board as of each vesting date.


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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Cash Compensation
Non-employee directors receive cash fees in addition to the equity awards described above. Effective May 12, 2023, each non-employee director is eligible to receive the following cash retainers for roles served:

Membership
Chairperson
Annual Cash Fee
($)(1)
Non-Chair Member Annual Cash Fee
($)(1)
Board of Directors61,000 (2)35,000 
Audit Committee20,000 10,000 
Compensation & Talent Committee15,000 7,000 
Finance & Strategy Committee10,000 5,000 
Governance & Nominating Committee8,000 4,000 

(1)Directors receive pro-rata cash compensation for partial year membership.
(2)This amount is paid to the non-executive Chair of the Board or the Lead Independent Director, as applicable. Mr. Black's compensation for serving as Executive Chair is included in the "2023 Summary Compensation Table."
We also reimburse our non-employee directors for out-of-pocket expenses incurred in connection with attending our Board and committee meetings.

2023 Director Compensation Table
The table below sets forth the compensation paid to our non-employee directors during 2023.
Fees Earned or Paid in Cash
Stock Awards
Option Awards
Total
Name(1)
($)
($)(2)
($)(2)
($)
James Ramsey47,635 91,096 91,203 229,934 
Marty Reaume(3)
56,454 110,967 91,203 258,624 
Tami Reller42,817 91,096 91,203 225,116 
Philip Soran(3)
72,272 110,967 91,203 274,442 
Anne Sempowski Ward46,817 91,096 91,203 229,116 
Sven Wehrwein(3)
63,545 110,967 91,203 265,715 

(1)Mr. Black and Mr. Collins did not receive any separate compensation for their service as directors. Mr. Black's and Mr. Collins' compensation for 2023 are set forth under the “2023 Summary Compensation Table.”
(2)Represents the grant date fair value of the stock and option awards granted during the year determined in accordance with ASC Topic 718. For a discussion of the relevant assumptions used to determine the valuation of our equity awards for financial reporting purposes, refer to Note A and Note K to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
(3)The compensation includes the one-time equity award for service on the CEO Search Committee, as discussed above.







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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Under our stock ownership guidelines, we require our non-employee directors to own shares of our common stock having a fair market value equal to five times the directors’ annual base cash retainer ($175,000 for 2023). Non-employee directors must comply with the stock ownership guidelines within five years of their appointment to the Board. Until a non-employee director has achieved compliance with the ownership guidelines, the director must retain 50% of the net shares acquired upon exercise, vesting or settlement of any equity award. Currently, vested in-the-money options and vested RSUs count toward the ownership level, but effective January 1, 2027, unexercised stock options will not count toward the ownership level. As of March 22, 2024, all of our non-employee directors had met the stock ownership requirement or had served as a director for less than five years.
As of December 31, 2023, the non-employee directors held shares of unvested restricted stock, options, and exercisable options as follows:
Options
Unvested Restricted StockTotal OutstandingOutstanding and Exercisable
Name(#)(#)(#)
James Ramsey147 23,413 23,046 
Marty Reaume265 16,846 16,479 
Tami Reller147 29,468 29,101 
Philip Soran265 23,416 23,049 
Anne Sempowski Ward147 11,811 11,444 
Sven Wehrwein265 10,346 9,979 

Corporate Responsibility
SPS Commerce is committed to advancing our efforts around corporate responsibility and environmental, social, and governance ("ESG") practices. We continue to develop our strategies and invest in areas that help us strengthen in the essential areas of diversity, equity, and inclusion as well as environmental sustainability and awareness.

Environmental Stewardship
SPS is a pioneer in cloud computing, helping realize more sustainable resource utilization and energy efficiencies. We strive to use our global resources wisely and enable our customers to minimize their own impacts on the environment. To better understand and mitigate our environmental impacts, we conducted our inaugural greenhouse gas ("GHG") emissions inventory in 2023, assessing our company-wide energy consumption, water usage, waste generation, and associated greenhouse gas emissions. To neutralize our impact, we purchased carbon offsets and renewable energy credits and are committed to disclosing our emissions profile on a regular basis on our Company website.

Diversity, Equity and Inclusion
We value diversity, equity, and inclusion and believe our differences make us, our customers, and our communities better. We strive to create an organization where every employee feels welcomed and is empowered to do their best work. We make our commitment to diversity, equity, and inclusion a reality by incorporating it into our human resource core processes and our talent strategies. Our Employee Resource Groups ("ERGs") foster connections across the globe, provide learning, engagement, and networking opportunities for employees of similar identities and interests. Since 2008, we have invested in student programs focused on creating opportunities for high school and college students who are part of underrepresented populations including women, genderqueer and non-binary individuals, and racial minorities. Further, through our Lift program, we partner with purpose-driven retailers to equip Black-owned suppliers with the SPS technology and expertise to fuel new and future trading partnerships.



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Proxy Statement for the 2024 Annual Meeting of Stockholders

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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Giving Back
At SPS, we believe generosity and caring make a difference. We actively contribute to our communities and encourage volunteerism and philanthropy among our employees. The Team SPS Gives Back Matching Program amplifies SPS employees' charitable contributions or volunteer hours with matching donations, furthering their support to the organizations they believe in and care about.

ESG Governance
Our ESG efforts are overseen by the Governance & Nominating Committee of our Board and are driven by a cross functional ESG Committee composed of leaders and subject matter experts from across our business. This group provides ESG-related reporting and metrics to help inform our decision-making and guide the important work happening across the organization.
For more information on our ESG and other corporate responsibility efforts, please see the Corporate Responsibility section of our website.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) discusses the philosophy and objectives underlying our executive compensation policies, practices and decisions, as well as the factors considered as part of our compensation analysis and decision-making. The CD&A describes the compensation of our NEOs in fiscal year 2023.
Named Executive Officers
Our NEOs, who constitute all of our executive officers, for 2023 were the following:

Chad CollinsKimberly NelsonJames FromeArchie Black
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Chief Executive Officer(1)
Executive Vice President &
Chief Financial Officer
President &
Chief Operating Officer
Executive Chair; Former Chief Executive Officer(1)
Executive since 2023Executive since 2007Executive since 2001
Executive since 1998
Age 48(2)
Age 56(2)
Age 59(2)
Age 61(2)

(1)See 'Chief Executive Officer Transition and Compensation' section on page 27-28
(2)Age as of December 31, 2023

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Executive Summary
Financial and Business Highlights
In 2023, we demonstrated ongoing success in expanding our network as we continued to play a key role in retailers’ and suppliers’ transformation to omnichannel retail, improving supply chain efficiencies, and enabling our customers’ international expansion. We delivered profitable growth and continued to invest for the future to strengthen our competitive position across a large, addressable market. For selected financial performance highlights and stockholder return, see below.



543
92
Quarters of Consecutive Revenue Growth
18%
Compound Annual Revenue Growth (CAGR)
545
Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendix A in this Proxy Statement for a reconciliation of this non-GAAP financial measure to the corresponding GAAP measure.
731
83%
SPS Return
23%
Russell 1000 Return
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Chief Executive Officer Transition and Compensation
As previously disclosed, on October 2, 2023, Chad Collins was appointed as our CEO. At that time, Archie Black became our Executive Chair of the Board in order to support a smooth transition of the CEO role and to provide for Mr. Black’s leadership of the Board. In July 2023, we also announced the planned retirement of James Frome, President and Chief Operating Officer, effective December 31, 2024. The Board believes Mr. Frome's continued service through fiscal year 2024 also supports a smooth transition for Mr. Collins and our executive team.

Mr. Collins’ compensation was determined through negotiations with him and his representatives prior to his hire. In order to understand market compensation levels, our Compensation & Talent Committee (the "Committee") engaged its third-party compensation consultant, Compensia, Inc. ("Compensia") to provide market data from our compensation peer group as well as examples of recent new hire CEO compensation packages from similarly sized technology companies. The Committee considered this market data, Mr. Collins' prior experience, internal pay equity, and our other compensation determination factors (as described in “Factors Considered in Compensation Deliberations” on page 33) to determine the total direct compensation and other compensation elements that would attract and retain Mr. Collins as our CEO. The details of Mr. Collins' 2023 total compensation package are as follows:

Base Salary: An initial annualized base salary of $525,000, of which he received a pro-rata amount for his three months as CEO in fiscal year 2023.
Bonus/MIP: A cash bonus payment in the amount of $131,250, payable on the same date as the payouts under the Company’s Management Incentive Plan (“MIP”) for fiscal year 2023. The Committee believed this was an important component of the overall package designed to attract Mr. Collins and create alignment upon his onboarding with the executive team. Mr. Collins will participate in the MIP for the 2024 fiscal year performance period.
One-Time Supplemental Equity Award: In order to incentivize Mr. Collins to leave his prior employment and offset the value of the equity awards forfeited by Mr. Collins in connection with that departure, the Committee granted Mr. Collins a one-time supplemental equity award consisting of RSUs and PSUs.
The RSU award, with a value of approximately $6,500,000, was granted on November 2, 2023, with the number of RSUs determined by dividing the value by the closing stock price on the grant date. Of the award, RSUs with a value approximately $4,500,000 will vest as to one-fourth of the RSUs on the first anniversary of the grant date and the remaining RSUs will vest pro-rata over the following 36 consecutive months provided that Mr. Collins remains employed by the Company. The remaining approximately $2,000,000 of the RSUs subject to this award will vest as to half of the RSUs on the first anniversary of the date of grant with the remaining RSUs vesting pro-rata over the following 12 consecutive months provided that Mr. Collins remains employed by the Company.
The PSU award, with a value of approximately $2,000,000, was granted in 2024, at the same time and on the same terms as the 2024 annual PSU awards.
Finally, in connection with the initial compensation package agreed to between the Company and Mr. Collins, in early 2024, Mr. Collins received an equity award, consisting of the 2024 annual equity award and a pro-rated 2023 annual equity award, consisting of RSUs and PSUs, as further described below.

Mr. Black served as our CEO until October 2, 2023, and then transitioned to Executive Chair. In connection with this transition, he continued to receive the same level of compensation and benefits as he did as CEO for the remaining three months of 2023. In 2024, Mr. Black will continue to serve as executive chair until our 2024 Annual Meeting of Stockholders and will receive a reduced compensation package reflective of his continued services during this period. The Board believed Mr. Black’s role as Executive Chair, and his commensurate level of compensation, was crucial in providing for the smooth transition of the CEO role to Mr. Collins, and Mr. Black’s leadership to the Board.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Fiscal 2023 Executive Compensation Highlights
During the first quarter of 2023, the Committee took the following key compensation actions with respect to our NEOs:

Base Salaries: We increased the base salaries of Messrs. Black and Frome and Ms. Nelson between 3% and 6% in order to appropriately compensate them given their performance and experience, as well as to maintain market competitiveness.
Management Incentive Plan: We maintained our formula-based target incentive cash bonus opportunity. Ms. Nelson received an increase in her target percentage opportunity from 75% to 80% of her base salary, and Messrs. Black and Frome's target percentage opportunity remained consistent with the prior year. Based on our strong operating results for fiscal year 2023, the formula-based bonus was paid at 140% of target amounts.
Equity Awards: We approved RSU equity awards and performance-based PSU equity awards, each representing approximately 50% of Mr. Black's, Mr. Frome's, and Ms. Nelson's equity awards for fiscal year 2023. As in prior years, the PSUs are based on our relative TSR performance against the Russell 2000 Index measured over a three-year period. The equity awards had a target value of $3.5 million to Ms. Nelson, $3.7 million to Mr. Frome, and $8.3 million to Mr. Black, in order to ensure total direct compensation was competitive considering the significant increases in the total direct compensation of similar roles in the market data, and to continue to drive long term performance and stockholder alignment. This represented an increase of between 9% and 57% of each of these executive's total equity award opportunity over the prior fiscal year.
Successful Hiring and Transition of a new CEO: We successfully hired and transitioned to a new CEO in October 2023.

Summary of Compensation Program Elements
Our compensation program for our NEOs uses the following compensation elements:

Compensation Element
Purpose
What it Rewards
Base Salary
Attract, motivate, and retain top executive talent
Experience, skills, duties and responsibilities, and individual performance
Management Incentive Plan
Motivate our executives to achieve specific financial goals
Individual and company-wide performance
Equity Awards
Aligns long-term objectives with those of stockholders; motivates long-term financial performance; and promotes retention
Long-term financial performance
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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The below graphs1 illustrate the percentage of our NEO's average compensation2 in 2023 that we consider at-risk compensation as well as the components of compensation:
298299300
1The graphs above do not include compensation paid to Mr. Collins due to his start date.
2Equity components of compensation represent grant date fair value as determined in accordance with ASC Topic 718. For a discussion of the relevant assumptions used to determine the valuation for financial reporting purposes, refer to Note A and Note K to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Policies and Practices
To promote the objectives discussed above, we maintained the following policies and practices in 2023:

We do...
We do not...
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Complete an annual compensation risk assessment.
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Pay any tax gross-ups on payments made to our NEOs in connection with a severance or change in control event.
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Engage an independent compensation consultant, Compensia, to provide the Committee with market data and guidance on best practices.
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Allow employees, including executives and directors, to engage in transactions involving short sales, publicly traded options or other derivative securities, hedging or pledging of Company stock.
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Offer a significant portion of executive compensation that is performance-based, including equity, to align the interests of our NEOs and our stockholders.
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Provide perquisites or other personal benefits to our NEOs beyond what is provided to our other employees.
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Conduct an annual say-on-pay vote.
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Allow single-trigger vesting of our NEO's equity.
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Provide PSUs that are subject to performance-based and time-based vesting.
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Require double-trigger vesting of equity in the event of a change in control.
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Maintain robust stock ownership guidelines.
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Maintain a required incentive recoupment (i.e., clawback) policy and a supplemental clawback policy.
See "Other Compensation Policies" on pages 37-38 for more detailed information on certain of our compensation policies and practices.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Strong Say-on-Pay Support
96%
2023 Say-on-Pay Approval

Our Committee regularly considers the results of the stockholders’ advisory vote on the compensation of our NEOs. The Committee considered the results of the say-on-pay vote when evaluating our compensation practices and policies and when setting the compensation of our NEOs for 2023 and determined that our compensation program was well aligned and properly supporting stockholders. The Committee believes that the significant support for the prior year say-on-pay proposal, and historical support as shown below, demonstrates stockholders’ strong support of our compensation program, policies, and practices.

644
Compensation Objectives
We set the compensation of our NEOs based on their ability to create sustainable long-term stockholder value in a cost-effective manner. Our executive compensation philosophy is to align executive compensation decisions with our desired business direction, strategy, and performance. The primary objectives of our executive compensation program are the following:
Pay for Performance: Emphasize performance-based compensation, primarily PSUs and cash bonuses, that are tied to our financial and stock price performance in an effort to generate and reward superior individual and collective performance;

Stockholder Alignment: Link our NEO’s incentive goals with the interests of our stockholders by providing equity-based compensation and establishing stock ownership guidelines for NEOs;

Long-Term Success: Support and reward our NEOs for consistent performance over time and the achievement of our long-term strategic goals that align with the interests of our stockholders;

Attraction and Retention: Attract and retain highly qualified executives whose abilities are critical to our success and competitive advantage; and
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Promote Accountability and Discourage Excessive or Inappropriate Risk-Taking: Discourage excessive risk-taking by maintaining stock ownership guidelines, anti-hedging prohibitions, and clawback policies. The Committee also engaged Compensia to complete an executive compensation risk assessment, which has determined that our compensation programs do not create inappropriate or excessive risk that is likely to have a material adverse effect on our Company.
To achieve these objectives, we have designed an executive compensation program that is significantly weighted towards long-term compensation. This approach aids us in the retention of executive officers and assures that the interests of our executive officers and stockholders are aligned. As previously mentioned, we provide compensation to our NEOs through a combination of base salary, incentive compensation, and equity awards (RSUs and PSUs under our 2010 Equity Incentive Plan).
While we have identified particular compensation objectives that each element of executive compensation serves, our compensation program is designed to be flexible and complementary and to collectively serve all of the executive compensation objectives described above. Accordingly, we believe that as a part of our overall executive compensation approach, each individual element, to a greater or lesser extent, serves each of our objectives.
Peer Group
Our Committee determines executive compensation, in part, by reference to market data for the executives of a peer group of comparable companies. This market data from our compensation peer group is valuable to the Committee because it provides insight into competitive pay practices for each of the elements of total direct compensation as well as confirms the reasonableness of its compensation decisions. The Committee, with the assistance of Compensia, reviews and approves our compensation peer group annually to ensure it reflects industry or economic changes and our selection criteria. Our current selection criteria include U.S.-based software companies with trailing four quarters revenue between 50% and 200% of our trailing four quarters revenue and with a market capitalization between 50% and 300% of our market capitalization at the time of review.

For purposes of 2023 compensation decisions, our Committee reviewed a formal compensation study and executive compensation market assessment prepared by Compensia in 2022, which included the following peer group companies:

Alteryx
PagerDuty
AppFolio
Paylocity Holding
Appian
Q2 Holdings
Asana
Qualys
Blackline
Rapid7
Fastly
SailPoint Technologies
Health Catalyst
Smartsheet
Jamf Holding
Varonis Systems
LivePerson
Workiva
nCino
Zuora

In comparison to the prior year peers, we replaced three companies. We removed 8x8 and PROS Holdings as those companies had market capitalization values below our comparison range and we also removed Talend as the company was acquired. We added Alteryx, AppFolio, Asana, Jamf Holding, and nCino because they met our selection criteria. We generally aim to have approximately 20 peer group members to ensure a proper level of data analysis.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Factors Considered in Compensation Deliberations
The Committee does not use a single method or measure in setting or approving the target total direct compensation opportunities for each individual compensation element for our NEOs, nor is the weighting of any one factor on the determination of pay elements and levels quantifiable in comparison to the other factors. The Committee begins with a review of the market data and then considers the factors below when selecting and setting the amount of each compensation element for our NEOs, which provides a framework for its compensation decision-making:

Our executive compensation program objectives;
Our performance against the financial and operational goals and objectives established by the Committee and our Board;
Each NEO's qualifications, knowledge, skills, experience, and tenure relative to other similarly situated executives at the companies in our compensation peer group;
The scope of each NEO’s role and responsibilities compared to other similarly-situated executives at the companies in our compensation peer group;
The prior performance of each NEO, based on an assessment of their contributions to our overall performance, and ability to lead their business unit or function and drive company-wide strategy in collaboration with the entire executive team;
The potential of each NEO to contribute to our long-term financial, operational, and strategic objectives;
The CEO’s compensation relative to that of our other executive officers, and compensation parity among our executive officers;
Our financial performance relative to our peers;
The compensation practices of our compensation peer group and the positioning of each NEO’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data;
In the case of long-term incentive compensation, the value of unvested equity awards held by each of our NEOs, including the equity awards and other long-term compensation opportunities granted to each executive officer in prior years; and
The recommendations provided by our CEO regarding the compensation of our other NEOs, as described below.
These factors provide the framework for decision-making by the Committee with respect to the compensation of each of our NEOs.
Base Salary
Base salaries are used to recognize the experience, skills, knowledge, and responsibilities required of all our employees, including our NEOs. Initially at the time of their hire, base salaries for each of our NEOs were established based on arm’s-length negotiations between us and the executive and the other factors discussed below. Subsequently, our Committee reviews the base salaries of our NEOs annually at the beginning of each year. When negotiating or reviewing base salaries, the Committee considers market competitiveness based on experience, the executive’s expected future contribution to our success, the relative base salaries and responsibilities of our other executives, the executive's prior year performance, and the market data of similarly situated roles in our compensation peer group. Considering such factors, the Committee increased base salaries for Messrs. Black and Frome, and Ms. Nelson for fiscal year 2023, based on performance, experience, and market competitiveness. This represented the first base salary increase for these individuals since fiscal year 2021.

Name2023 Base Salary ($)2022 Base Salary ($)Increase
Kimberly Nelson400,000 385,000 %
James Frome425,000 400,000 %
Archie Black538,000 523,000 %

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Management Incentive Plan
Our NEOs participate in our Management Incentive Plan, which provides them with an opportunity to receive a formula-based cash bonus. The bonus is intended to motivate our executives to achieve specific financial goals that will drive the growth and success of our business.
The formula-based bonus is determined by a target bonus opportunity (relative to the NEO's base salary) for each NEO established by the Committee at the beginning of each year. The Committee establishes the target bonus opportunity at an amount it believes is necessary to:

provide competitive overall total cash compensation in light of each NEO's base salary;
motivate our executives to achieve an aggressive level of growth; and
promote our pay for performance compensation objective.

For 2023, target bonus opportunities for each of Messrs. Black and Frome remained the same as 2022. Ms. Nelson's percentage opportunity increased from 75% to 80% of base salary to remain competitive with the total cash compensation level for similar roles within the market data. The amount of the bonus, if any, actually paid to executives after the end of the year is determined by the matrix approved by the Committee. The matrix takes into account our revenues and earnings before interest, taxes, depreciation and amortization and stock-based compensation, and other adjustments (“Adjusted EBITDA”)(1).
The formula-based bonus is based in part on revenues because, given the scalability of our current core business, the Committee believes revenue growth has the most significant impact on our financial results. The Committee also believes the bonus should be based in part on Adjusted EBITDA, because Adjusted EBITDA is a useful measure of our operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets.

The matrix approved for 2023 provided that each executive would receive a percentage of their target formula-based bonus, between zero and 195%, based on our actual revenues and Adjusted EBITDA performance for the year. In line with our pay-for-performance objective, if either the minimum revenue or Adjusted EBITDA threshold was not achieved, zero bonus would have been earned.
Per the Management Incentive Plan, the Committee has the ability to adjust the established thresholds for revenues and Adjusted EBITDA in the event we completed any acquisitions during the year to reflect the Company's operating performance. The Committee exercised such discretion for 2023 and adjusted thresholds for both revenue and Adjusted EBITDA based on the financial results of the TIE Kinetix Holding B.V. acquisition.
The Committee approved the matrix with the intent that achieving 100% of an executive’s target bonus will be a difficult but achievable goal in light of the prior year’s results of operations and anticipated growth for 2023. As a result of 2023 operating results, the formula-based bonus for Messrs. Black and Frome and Ms. Nelson was determined to be earned at 140% of the target amount, paid in 2024.












(1) Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendix A in this Proxy Statement for a reconciliation of this non-GAAP financial measure to the corresponding GAAP measure.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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See below for the summary of the incentive factor thresholds, actual results, and corresponding earned incentive for 2023:

Incentive Factors
Minimum Incentive Threshold (2)
Target Incentive ThresholdMaximum Incentive ThresholdActual Results
Revenue$524,100,000$531,300,000$539,400,000$536,910,000 
Adjusted EBITDA(1)
$153,800,000$153,800,000$162,800,000$157,630,000 
Name
Minimum Incentive{B}
Target IncentiveMaximum IncentiveEarned Incentive
Kimberly Nelson$192,000 $320,000 $624,000 $448,000 
James Frome$255,000 $425,000 $828,750 $595,000 
Archie Black$322,800 $538,000 $1,049,100 $753,200 
2023 Proportion of Target60 %100 %195 %140 %

(1) Adjusted EBITDA is a non-GAAP financial measure. Refer to Appendix A in this Proxy Statement for a reconciliation of this non-GAAP financial measure to the corresponding GAAP measure.
(2) If either the minimum revenue or Adjusted EBITDA threshold was not achieved, zero bonus would have been earned.

Equity Awards
The equity awards granted to our NEOs reflect the pay levels our Committee believes are appropriate relative to the market data, each executive’s individual performance, and maintaining an overall competitive compensation package. We believe equity awards are an important element of compensation because they align our NEOs' interests with those of our shareholders. Equity awards make up a significant portion of our NEOs' total compensation package and we anticipate that equity compensation will remain a significant part of our executive compensation program in the future. Our equity awards will continue to be granted on an annual basis to ensure a continued unvested equity component remains as a long-term incentive for each of our executives. When determining the size of the equity award for our NEOs, our Committee considers the executive’s position and responsibilities, internal pay equity, competitive market data, CEO recommendations for the other NEOs, and the anticipated future contribution the executive will make to our growth and success.

The Committee increased the total value of the equity awards granted to Messrs. Black and Frome by 57% and 9%, respectively, and Ms. Nelson by 28% in 2023. The Committee believed these increases were necessary to ensure competitiveness with our compensation peer group considering significant increases in the market data. In addition, the Committee considered individual performance and continued strong financial performance of the Company when determining the equity award amounts. See below for the amount and mix of equity awards types granted to our NEOs.

RSUs Granted
Named Executive Officer2023 NEO Grant Date Value2023 NEO Grant Shares/Units (#)2023 Equity Award Package Proportion
Kimberly Nelson$1,644,942 10,911 48 %
James Frome1,780,476 11,810 48 %
Archie Black3,964,988 26,300 48 %
  Average$2,463,469 16,340 48 %

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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PSUs Granted
Named Executive Officer2023 NEO Target Grant Date Value2023 NEO Target Grant Shares/Units (#)2023 Equity Award Package Proportion
Kimberly Nelson$1,804,911 12,850 52 %
James Frome1,953,658 13,909 52 %
Archie Black4,350,608 30,974 52 %
  Average$2,703,059 19,244 52 %
RSUs
RSUs generally vest over four years and are intended to provide a strong retention component to the compensation program as they require the executives to maintain continuous employment with us in order for the awards to vest.
PSUs
PSUs are earned over a three-year performance period depending on the Company’s performance during such performance period and the award recipient’s continued employment. We believe PSUs further align our executives’ interests with those of our stockholders because the executives only earn the PSUs if certain performance goals are achieved.
The PSUs granted in 2023 will be earned contingent upon successful attainment of predetermined TSR targets, relative to Russell 2000 companies (the “Index”) over the course of the applicable performance period. PSUs vest in the quarter following the end of the performance period, upon the Committee's certification of the level of performance and number of PSUs earned. The Index was selected because it is a major, broad index of stocks of which we are a component and many members are similar in size to SPS. The three-year period was designed to provide a long-term performance period to align NEO compensation with long-term stockholder returns. The following table sets forth the TSR targets for PSUs granted to our NEOs in each of 2021, 2022, and 2023:
Company TSR as Compared to Index TSRPercentage of Target PSUs Earned
Company TSR is more than 10% less than Index TSR0%
Company TSR is 10% less than Index TSR40% (threshold)
Company TSR is equal to Index TSR80%
Company TSR is 5% greater than Index TSR100% (target)
Company TSR is 30% greater than Index TSR200% (maximum)
If the Company’s TSR is greater than the Index TSR but is negative, the percentage of PSUs earned is capped at 100%. If the comparison of the Company’s TSR against the Index TSR falls between the levels specified in the above table, the corresponding PSUs earned will be determined by a linear interpolation.
In early 2024, the Committee certified results for the 2021 – 2023 performance period for PSUs granted in 2021. Based on the Company’s TSR achieved relative to the Index TSR, the maximum performance was achieved, the maximum number of PSUs were earned, and the earned PSUs vested in 2024. See below for the calculation of the earned PSUs.
Performance Period: 2021 – 2023
Company TSR83 %
Index TSR%
Company TSR in Excess of Index TSR82 %
Percent of Target PSUs Earned(maximum) 200 %
The earned but unvested PSUs are included in the “Outstanding Equity Awards at Fiscal Year-End” Table.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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The Role of the Committee, Consultants and NEOs in Determining Compensation
Historically and in 2023, the Committee has determined all elements of compensation for our NEOs. Generally, prior to making its compensation determinations, our CEO provides his review of our other NEOs to the Committee. Our Committee engages Compensia, a national independent compensation consultant, to help evaluate our compensation philosophy and practices and to provide guidance in administering our compensation program. Our Committee has determined that Compensia is independent, knowledgeable and has access to a wealth of data to inform the Committee's decisions. The services provided by Compensia do not raise any conflict of interests.
Other Compensation Policies

Stock Ownership Guidelines
Under our stock ownership guidelines, our NEOs are required to beneficially own the following shares of common stock relative to their annual base salary:
PositionCommon Stock Ownership Requirement Relative to Base Salary
CEO3x
Other NEOs1x
A NEO has five years from the date they become subject to the ownership guidelines to achieve compliance with the guidelines. Until a NEO has achieved compliance with the ownership guidelines, the individual must retain 50% of the net shares acquired upon exercise, vesting or settlement of any equity award. The following shares will not be counted toward satisfaction of our ownership guidelines: (i) shares subject to a compensatory equity-based award of any kind that has not yet vested; and (ii) shares subject to a stock appreciation right, restricted stock unit, deferred stock unit or similar award that has not yet been exercised and is not in-the-money. Each of our NEOs was in compliance with our stock ownership guidelines as of March 22, 2024.

Insider Trading Policy - Hedging, Pledging and Other Restricted Transactions
Under our Insider Trading Policy, our officers, directors, and all other employees, are prohibited from engaging in the following transactions with respect to our securities:
Purchasing our securities on margin, or otherwise pledging our securities;
Short sales of our securities (selling securities not owned at the time of sale);
Buying or selling put or call options or other derivative securities based on our securities;
Purchasing any financial instruments (including prepaid variable forward contracts, equity swaps, zero cost collars and exchange funds) that are designed to hedge or offset any decrease in the market value of our securities; and
Engaging in limit orders or other pre-arranged transactions that execute automatically, except for “same-day” limit orders and approved 10b5-1 plans.

In addition, our Insider Trading Policy restricts the periods during which our officers, directors and certain other employees can transact in our stock and includes other provisions and requirements related to their trading in out stock.

Clawback Policy
We previously maintained a clawback policy covering recovery of certain incentive compensation received by executive officers under certain circumstances. In light of the incentive compensation recovery rules and listing standards that were finalized in 2023, effective October 2, 2023, we adopted a revised clawback policy pursuant to, and in compliance with, Rule 10D-1 of the Securities and Exchange Act of 1934 (the "Exchange Act"), as amended, SEC regulations promulgated thereunder, and applicable Nasdaq listing standards (the "Required Clawback Policy"), as well as a supplemental clawback policy consistent with our prior clawback policy (the "Supplemental Clawback Policy").
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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The Required Clawback Policy applies to all incentive-based compensation, which is any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure, received by officers of the Company, as defined under Rule 16a-1(f) of the Exchange Act (“executive officers”). The Required Clawback Policy provides that, in the event of an accounting restatement due to material noncompliance of the Company with any financial reporting requirement, the Committee will determine the amount of the erroneously awarded compensation, which is the excess of the amount of incentive-based compensation received by current and former executive officers during the three completed fiscal years immediately preceding the required restatement date over the amount of incentive-based compensation that otherwise would have been received had it been determined based on the restated amounts. The Company will provide each such executive officer with a written notice of such amount and a demand for repayment or return. If such repayment or return is not made within a reasonable time, the Recoupment Policy provides that the Company will recover the erroneously awarded compensation in a reasonable and prompt manner using any lawful method, subject to limited exceptions as permitted by Nasdaq listing standards.

The Supplemental Clawback Policy provides that if any senior vice president or above (including executive officers) of the Company is determined by the Committee to have engaged in misconduct resulting in either a violation of the law or of Company policy that has caused significant financial or reputational harm to the Company and either the individual committed the misconduct directly or failed in his or her responsibility to manage or monitor the applicable conduct or risks, then the Committee may determine to require recovery from such individual of any or all incentive compensation (which includes any annual or long-term incentive compensation, including equity-based compensation) that was awarded, vested or paid or is scheduled to be vested or paid during any fiscal year in which the misconduct occurred.
Other Compensation
Perquisites are not a material aspect of our executive compensation program. All of our full-time employees, including our NEOs, are eligible to participate in our 401(k) Plan and Employee Stock Purchase Plan ("ESPP"), subject to limitations established by law. In the 401(k) Plan, participants can contribute up to 80% of their compensation, subject to the limits established by law, and we match 50% of the participants’ contribution up to the first 6% of pre-tax annual compensation. A portion of our match is in Company stock, which is purchased in the open market by our plan provider and immediately deposited into the participants’ 401(k) account. Our ESPP allows participants to contribute up to 10% of their compensation, subject to limitation established by the law, to purchase common stock on an after-tax basis, at a price that is the lower of 85% of the fair market value of our common stock at the beginning or end of each stock purchase period.
Severance, Change in Control, and Retirement Benefits
We have entered into employment agreements with each of our NEOs that require us to provide certain payments and benefits to them in the event of specified events, including termination of employment, a change in control of the Company, and retirement, with certain conditions. Our employment agreements require double-trigger vesting of equity in the event of a change in control. We believe that these payments and benefits are necessary to attract and retain our executives to join our Company and that they are in the best interests of the Company and our stockholders as they ensure that because they help assure us that we will have the continued dedication and objectivity of our executives, notwithstanding the possibility or occurrence of a change in control or planned retirement. See further discussion on these agreements in the "Potential Payments Upon Termination, Retirement, or Change in Control" below.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Tax Implications
Under Section 162(m) of the Internal Revenue Code (the “Code”), compensation paid to our NEOs in excess of $1 million is not deductible. The Committee believes that stockholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not restricted, even though some compensation awards result in non-deductible compensation expenses to the Company. Also, our Committee takes into account whether components of our compensation program may be subject to the penalty tax associated with Section 409A of the Code and aims to structure the elements of compensation to be compliant with or exempt from Section 409A to avoid such potential adverse tax consequences.
Accounting Implications

The Committee considers the impact of accounting treatment in developing and implementing our compensation programs, including the accounting treatment of amounts awarded or paid to our NEOs. We measure and recognize compensation expense in accordance with the corresponding accounting guidance, ASC 718, for stock-based payments, which requires that compensation expense relating to stock-based payment transactions be recognized in the financial statements based on the grant date fair value of the awards issued.

Compensation & Talent Committee Report
We have reviewed and discussed the Compensation Discussion and Analysis with management. We have recommended to the Board the inclusion of the Compensation Discussion and Analysis in the Company’s definitive Proxy Statement and incorporated by reference in the Company’s 2023 Annual Report on Form 10-K.
Compensation & Talent Committee of the Board of Directors of SPS Commerce, Inc.
Marty Reaume, Chair
Philip Soran
James Ramsey

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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2023 Summary Compensation Table*
The following table provides information regarding the compensation paid to and earned by our NEOs in 2023, 2022, and 2021:

Name and Principal PositionYearSalary ($)
Bonus ($)(1)
Stock Awards ($)(2)
Non-Equity Incentive Plan Compensation ($)
All Other Compensation ($)(3)
Total ($)
Chad Collins2023121,000131,250 6,499,877— — 6,752,127
Chief Executive Officer(4)
Kimberly Nelson2023400,000— 3,449,853448,0009,9004,307,753
Executive Vice President and2022385,000— 2,588,439245,4389,1503,228,027
Chief Financial Officer2021385,000— 2,821,974508,2008,7003,723,874
James Frome2023425,000— 3,734,134595,0009,9004,764,034
President and2022400,000— 3,286,927340,0009,1504,036,077
Chief Operating Officer2021400,000— 2,821,974704,0008,7003,934,674
Archie Black2023538,000— 8,315,596753,2009,9009,616,696
Former Chief Executive Officer(4)
2022523,000— 5,089,381444,5509,1506,066,081
2021523,000— 5,241,434920,4808,5506,693,464
(1)Represents a cash bonus designed to attract Mr. Collins.
(2)Represents the grant date fair value of the stock awards granted during the year determined in accordance with ASC Topic 718. For a discussion of the relevant assumptions used to determine the valuation for our equity awards for financial reporting purposes, refer to Note A and Note K to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The grant date fair value of the stock-based awards granted in 2023 are as follows:

NameRSUs ($)
PSUs ($){A}
Total ($)
Chad Collins6,499,8776,499,877
Kimberly Nelson1,644,9421,804,9113,449,853
James Frome1,780,4761,953,6583,734,134
Archie Black3,964,9884,350,6088,315,596

{A} Represents the grant date fair value of PSUs granted in 2023 at the target level. The maximum value of PSUs granted in 2023 for each NEO, defined as maximum shares at grant date share price, is as follows:

NameMaximum PSUs ($)
Kimberly Nelson3,609,822 
James Frome3,907,316 
Archie Black8,701,216 

(3)Represents the matching contributions under our 401(k) Plan.
(4)Effective October 2, 2023, Mr. Black retired as Chief Executive Officer and Mr. Collins was appointed our Chief Executive Officer.
*    See the “Compensation Discussion and Analysis” above for a description of our executive compensation criteria and decisions necessary for an understanding of the information disclosed in this table.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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2023 Grants of Plan-Based Awards Table
The following table sets forth certain information regarding grants of plan-based awards to our NEOs in 2023.

Estimated Future Payouts Under Non-Equity Incentive Plan AwardsEstimated Future Payouts Under Equity Incentive Plan Awards
Name
Grant Date(1)
Approval Date(1)
Threshold ($)Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#)All Other Stock Award: Number of Shares of Stock or Units (#)
Grant Date Fair Value of Stock Awards ($)(2)
Chad Collins
RSU Award (3)
11/2/20237/3/202339,8356,499,877
Kimberly Nelson
Annual Cash Bonus (4)
12/1/2022192,000320,000624,000— 
PSU Award (5)
1/3/202312/1/20225,14012,85025,700— 1,804,911
RSU Award (6)
2/16/202312/1/202210,9111,644,942
James Frome
Annual Cash Bonus (4)
12/1/2022255,000425,000828,750
PSU Award (5)
1/3/202312/1/20225,56413,90927,8181,953,658
RSU Award (6)
2/16/202312/1/202211,8101,780,476
Archie Black
Annual Cash Bonus (4)
12/1/2022322,800538,0001,049,100
PSU Award (5)
1/3/202312/1/202212,39030,97461,9484,350,608
RSU Award (6)
2/16/202312/1/202226,3003,964,988

(1)Granted under our 2010 Equity Incentive Plan.
(2)The grant date fair value was determined in accordance with ASC Topic 718. For a discussion of the relevant assumptions used to determine the valuation for financial reporting purposes, refer to Note A and Note K to the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
(3)Of these RSUs, 27,578 will vest as to one-fourth of such RSUs on the first anniversary of the grant date and the remaining RSUs will vest pro-rata over the following 36 consecutive months. The remaining 12,257 RSUs in this grant will vest as to half of such RSUs on the first anniversary of the date of grant with the remaining RSUs vesting pro-rata over the following 12 consecutive months.
(4)Amounts represent the range of annual cash incentives that could have been earned in 2023 under the 2023 Management Incentive Plan based on actual revenues and Adjusted EBITDA. The actual cash incentive bonus earned in 2023 is reported in the 2023 Summary Compensation Table.
(5)Amounts represent the number of PSUs that may be earned at threshold, target, and maximum levels. The PSUs will be paid out in shares of our common stock. The number of PSUs that the executive officer will receive will be determined at the conclusion of the 2023 – 2025 performance period and will be dependent upon the Company’s achievement of relative TSR targets. The current estimated earned level for the 2023 grants, based on the TSR targets from grant date through December 31, 2023, is 200%.
(6)The RSUs vest as to one-fourth of the RSUs on the first anniversary of the grant date, with the remaining RSUs vesting in series of 36 equal monthly installments each month thereafter.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth certain information regarding the outstanding equity awards held by our NEOs as of December 31, 2023. The stock option information included in the table reflects our two-for-one stock split effective August 22, 2019.
Option AwardsStock Awards
NameGrant Date
Number of Securities Underlying Unexercised Options (#) Exercisable
Number of Securities Underlying Unexercised Options (#) Unexercisable
Option Exercise Price ($/Sh)Option Expiration DateGrant DateNumber of Shares or Units of Stock that Have Not Vested (#)
Market Value of Shares or Units of Stock that Have Not Vested (#)(1)
Equity Incentive Plan Awards: Number of Unearned Shares or Units that Have Not Vested (#)
Equity Incentive Plan Awards: Market Value of Unearned Shares or Units that Have Not Vested ($)(1)
Chad Collins11/2/2023(3)39,835 7,721,617 — — 
Kimberly Nelson2/13/20183,000 — 27.34 2/13/20252/21/2020(2)601 116,498 — — 
1/4/2021(4)— — 22,924 4,443,588 
2/19/2021(2)3,397 658,474 — — 
1/3/2022(5)— — 18,580 3,601,547 
2/16/2022(2)5,352 1,037,432 — — 
1/3/2023(5)— — 25,700 4,981,688 
2/16/2023(2)10,911 2,114,988 — — 
James Frome2/21/2020(2)601 116,498 — — 
1/4/2021(4)— — 22,924 4,443,588 
2/19/2021(2)3,397 658,474 — — 
1/3/2022(5)— — 23,594 4,573,461 
2/16/2022(2)6,796 1,317,337 — — 
1/3/2023(5)— — 27,818 5,392,241 
2/16/2023(2)11,810 2,289,250 — — 
Archie Black2/21/2020(2)1,123 217,682 — — 
1/4/2021(4)— — 42,578 8,253,320 
2/19/2021(2)6,310 1,223,130 — — 
1/3/2022(5)— — 36,532 7,081,363 
2/16/2022(2)10,523 2,039,778 — — 
1/3/2023(5)— — 61,948 12,008,000 
2/16/2023(2)26,300 5,097,992 — — 

(1)Market values are calculated using the year end closing sale price of a share of our common stock on the Nasdaq Global Market, which was $193.84.
(2)RSUs vest as to one-fourth of the RSUs on the first anniversary of the grant date, with the remaining RSUs vesting in series of 36 equal monthly installments each month thereafter.
(3)27,578 of these RSUs will vest as to one-fourth of the RSUs on the first anniversary of the grant date and the remaining portion of such RSUs will vest pro-rata over the following 36 consecutive months. The remaining 12,257 of these RSUs will vest as to half of the RSUs on the first anniversary of the date of grant with the remaining portion of these RSUs vesting pro-rata over the following 12 consecutive months.
(4)PSUs granted in 2021 are reported at the earned number of units, the maximum amount, due to the attainment of the maximum TSR target over the completed performance period of 2021 - 2023, as discussed above under “Compensation Discussion and Analysis - Equity Awards”. These earned PSUs vested in 2024.
(5)PSUs granted in 2022 and 2023 are earned in accordance with the successful attainment of predetermined TSR targets relative to the Index over a three-year performance period ending on December 31, 2024, and 2025, respectively, and vest in the year subsequent to the end of the performance period upon certification by the Compensation & Talent Committee. The PSUs granted in 2022 and 2023 are reported at the estimated earned levels based on the respective levels of TSR targets from grant date through December 31, 2023, which is 200% for both grants, as the applicable performance period has not concluded as of December 31, 2023.

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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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2023 Options Exercised and Stock Vested Table
The following table sets forth certain information regarding stock option exercises and stock awards vested by our NEOs during 2023.

Option AwardsStock Awards
Name
Number of Shares Acquired on Exercise 
(#)
Value Realized on Exercise ($)(1)
Number of Shares Acquired on Vesting 
(#)(3)
Value Realized on Vesting ($)(2)(3)
Kimberly Nelson77,2129,703,58140,3465,805,989
James Frome19,4902,216,91041,6366,011,354
Archie Black34,4824,049,469102,81814,603,984

(1)Reflects the aggregate value realized on exercise by multiplying (a) the difference between (i) the market price of our common stock on the exercise date and (ii) the per share exercise price, by (b) the number of shares of our common stock acquired on exercise.
(2)Reflects the aggregate value realized by multiplying (a) the number of shares of our common stock vested by (b) the fair market value of our common stock of a share of our common stock on the vesting date.
(3)The stock awards that vested in 2023 were as follows:

RSUs
PSUs
Name
Number of Shares (#)
Value upon Vesting ($)
Value upon Settlement ($){A}
Number of Shares (#){B}
Value upon Vesting and Settlement ($){B}
Kimberly Nelson11,5121,868,7061,731,07928,8343,937,283
James Frome12,8022,074,0711,925,51628,8343,937,283
Archie Black21,9663,563,6433,303,23480,85211,040,341

{A} Due to the Company's policy, RSUs that vest monthly throughout the year settle at a future date after vesting, equal to one share in payment and settlement of each vested unit.

{B} In 2023, the Committee certified results for the 2020 – 2022 performance period for PSUs granted in 2020. Based on Company TSR achieved relative to the Index TSR, the maximum threshold was achieved and the maximum shares vested in 2023. See below for the calculation of the earned PSUs.

Company TSR as Compared to Index TSRPercentage of Target PSUs Earned
Company TSR is more than 10% less than Index TSR0%
Company TSR is 10% less than Index TSR40% (threshold)
Company TSR is equal to Index TSR80%
Company TSR is 5% greater than Index TSR100% (target)
Company TSR is 30% greater than Index TSR200% (maximum)
Performance Period: 2020 – 2022
Company TSR
134
%
Index TSR
8
%
Company TSR in excess of Index TSR
125
%
Percent of Target PSUs Earned(maximum) 200
%%

Pension Benefits
We do not offer pension benefits to our NEOs.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Non-Qualified Deferred Compensation
We do not offer non-qualified deferred compensation to our NEOs.

Employment Agreements
We have employment agreements with our NEOs that include severance and change in control components. Additionally, we have confidentiality and non-competition agreements with each of these executive officers requiring the executive officers not to disclose our confidential information at any time. The agreements also require the executive officers not to compete with us or solicit our employees to engage in other employment during the term of their employment with us and for one year thereafter.
The employment agreements with our NEOs address various termination of employment and change in control scenarios. Payment of amounts under these circumstances is subject to certain conditions and limitations, including that the executive officer must execute a release of claims against us. The terms of potential payments under these agreements upon a termination of employment or change in control are summarized below under “Potential Payments Upon Termination, Retirement, or Change in Control.”

Potential Payments Upon Termination, Retirement, or Change in Control
We have entered into various agreements that will require us to provide certain payments and benefits to our NEOs in the event of certain specified termination of employment, including a termination of employment in connection with a change in control of the Company. In the event of change of control, each NEO's employment agreement provides for double-trigger vesting of equity. All payments and benefits noted below are conditional upon the execution of release and continued compliance with confidentiality, non-competition, and non-solicitation agreements.
For these purposes, the following terms are defined:

“Change in Control” includes (i) any person’s acquisition of beneficial ownership of 50% or more of our outstanding common stock; (ii) a failure to have a majority of our Board be people for whose election our Board solicited proxies; (iii) approval by our stockholders of a reorganization, merger or consolidation, unless our stockholders immediately prior to the transaction own more than 50% of the voting power of the corporation resulting from the transaction; or (iv) approval by our stockholders of the disposition of all or substantially all of our assets.
“Change in Control Period” means the period starting three months immediately before a Change in Control and continuing for 12 months immediately following a Change in Control.
“Cause” for termination exists upon (i) failure by the NEO to cure his or her material breach of the terms of a non-competition/non-solicitation agreement between us and the officer within 30 days of receipt of written notice of breach from us; (ii) gross negligence or willful misconduct by the officer; (iii) conviction of the officer of a crime involving moral turpitude or any felony; (iv) willful violation of instructions from our Board or Chief Executive Officer; or (v) fraud, embezzlement, theft or proven dishonesty against us.
“Good Reason” is defined to mean the occurrence of any of the following events, in each case without the NEO's consent: (i) a reduction of 10% or more in Employee’s base salary or annual bonus opportunity, (ii) a material reduction in the NEO's employment responsibilities, including a reduction in title or the Company no longer a reporting company under the Securities Exchange Act of 1934, (iii) a material reduction in the executive officer’s employment responsibilities, or (iii) a relocation of the executive officer’s primary work location by more than 30 miles.
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Proxy Statement for the 2024 Annual Meeting of Stockholders

EXECUTIVE COMPENSATION
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Termination without Cause or Resignation for Good Reason Outside of Change in Control Period
Mr. Black

The employment agreement with Mr. Black provides that if we terminate Mr. Black without Cause, or if he terminates his employment with us for Good Reason, we will pay or provide to him:
12 months of then-current base salary over a 12-month period in accordance with our regular payroll practices; and
12 months of continued payment of health insurance premiums.