PROG Holdings, Inc. - SEC Filing

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No. )

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¨						Preliminary Proxy Statement

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¨						Definitive Additional Materials

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PROG Holdings, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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						256 West Data Drive Draper, Utah 84020

April 25, 2022

To My Fellow Shareholders:

We are pleased to invite you to our 2022 Annual Meeting of Shareholders, which will be held on Tuesday, May 24, 2022, at 9:00 a.m. Mountain Time at The Little America Hotel, 500 South Main Street, Salt Lake City, Utah.

2021 was a transformational year for PROG Holdings. At the beginning of 2021, we stated that we believed our new operating profile – and the substantial capital it was expected to generate – would allow us to re-invest in our businesses, add innovative products and technologies and return capital to shareholders – all of which I am proud to report we accomplished during the year. Our many accomplishments during 2021 included the following:

▪Achieving gross merchandise volume (GMV) growth of 15.8% in our Progressive Leasing segment and more than doubling GMV growth in its E-com channel;

▪Scaling our Vive Financial segment to profitability;

▪Executing on a balanced and disciplined capital allocation plan that returns significant capital to shareholders and invests in the Company’s future growth. During 2021, we repurchased approximately 17% of our outstanding shares – equating to approximately $567 million of capital being returned to shareholders – by modestly leveraging our balance sheet, which had the added benefit of lowering our cost of capital without impacting our ability to continue investing in organic growth and attractive M&A opportunities as well as returning excess capital to shareholders;

▪Strengthening our board of directors by adding three new independent directors, each with deep digital expertise, including significant experience leveraging technology and data to drive meaningful consumer engagement and growth;

▪Investing in growth that will position the Company to deliver innovative products and technologies to our customers. For example, during 2021, we entered the Buy Now, Pay Later space by acquiring Four Technologies, which allows shoppers to purchase consumer goods through four interest-free installments. We also launched a dedicated R&D team tasked with developing and testing new products and technologies that we expect will allow us to grow our total addressable market and differentiate us in the marketplace; and

▪Onboarding a number of seasoned executives to strengthen our management team and help us achieve our compliance, operational and strategic goals.

When I look back on 2021, I feel tremendous pride in what our teams were able to accomplish during a time of unprecedented uncertainty and challenges. Their outstanding performance is a testament to their talent and grit and I believe has resulted in greater value for all of our stakeholders.

I will close by saying that we have always taken pride in being a good corporate citizen. As you will see on page 6 of the attached Proxy Statement, we have recently posted on our website our first-ever ESG Review, which addresses our ESG-related initiatives and also measures our performance against standards promulgated by the Sustainability Accounting Standards Board (SASB). This summary represents another step forward in our commitment to meaningful ESG accountability and provides a foundation to build increased transparency by directly reporting on sustainability issues, risks and opportunities we believe are critical to driving long-term success for our business and stakeholders, as well as positively impacting the communities we serve.

Thank you for your continued support as we execute our strategy. We appreciate your confidence in us.



Sincerely,

Steven A. Michaels
President and Chief Executive Officer


						256 West Data Drive Draper, Utah 84020

Notice of Annual Meeting of Shareholders

Annual Meeting
Logistics

The 2022 Annual Meeting of Shareholders of PROG Holdings, Inc. (“PROG Holdings” or the “Company”), will be held on Tuesday, May 24, 2022, at 9:00 a.m., local time, and currently is scheduled to be held at The Little America Hotel, 500 South Main Street, Salt Lake City, Utah 84101, for the purpose of considering and voting on the following items:

Date

May 24, 2022

To elect nine directors to serve for a term expiring at the 2023 Annual Meeting of Shareholders.

To vote on a non-binding, advisory resolution approving PROG Holdings’ executive compensation.

Time

To ratify the appointment of Ernst & Young LLP as PROG Holdings’ independent registered public accounting firm for 2022.

9:00 a.m., local time

To amend the PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan.

To amend the PROG Holdings, Inc. Employee Stock Purchase Plan.

Location

The Little America Hotel 500 South Main Street Salt Lake City, Utah 84101

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

Information relating to these items is provided in the accompanying Proxy Statement.

Only shareholders of record, as shown on the stock transfer books of PROG Holdings, as of the close of business on April 11, 2022, are entitled to notice of, or to vote at, the meeting. If you hold shares through a bank, broker or other nominee, more commonly known as holding shares in “street name,” you must contact the firm that holds your shares for instructions on how to vote your shares.

If you were a shareholder of record as of the close of business on April 11, 2022, you are strongly encouraged to vote in one of the following ways whether or not you plan to attend the Annual Meeting: (1) by telephone; (2) via the Internet; or (3) by completing, signing and dating a written proxy card and returning it promptly to the address indicated on the proxy card.

Record Date

April 11, 2022

BY ORDER OF THE BOARD OF DIRECTORS

Marvin A. Fentress

Draper, Utah

General Counsel and Corporate Secretary

April 25, 2022

Table of Contents



Proxy Statement Summary			1
2022 Annual Meeting of Shareholders			1
Matters to be Considered and Voting Recommendations			1
Company Overview			2
Our Strategy Going Forward			4
Our Response to the COVID-19 Pandemic			5

Matters to be Voted On			7
Proposal 1 - Election of Directors			8
Proposal 2 - Advisory Vote on Executive Compensation			9
Proposal 3 - Ratification of the Appointment of the Company's Independent Registered Public Accounting Firm			10
Proposal 4 - Amendment to the PROG Holdings, Inc. Employee Stock Purchase Plan.			11
Proposal 5 - Amendment to the PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan.			21

Governance			27
Board of Directors			27
Executive Officers Who Are Not Directors			32
Composition, Meetings and Committees of the Board of Directors			33
Assessment of Director Candidates and Required Qualifications			36
Shareholder Recommendations and Nominations for Election to the Board			37
Board Leadership Structure			38
Board of Directors Committee Evaluations			38
Board Role in Risk Oversight			38
Board Diversity			39
Environmental, Social and Governance Matters			39
ESG Oversight			39
ESG Reporting			39
Recruiting, Developing, Promoting and Retaining a Diverse Group of Highly-Motivated Employees			40
Improving Our Communities by Investing Our Money and Time in Them			46
Respecting and Supporting Our Customers			47
Understanding and Improving Our Environmental Footprint and Impacts			49

Non-Management Director Compensation in 2020			51
Stock Ownership Guidelines			51

Compensation Discussion and Analysis			52
Introduction			52
Executive Summary			52
Objectives of Executive Compensation Programs			54
Our Strong Compensation Governance Practices			55
2021 Compensation Process and Actions			55


Components of Our 2021 Executive Compensation Programs			58
Compensation Outcomes for 2021			59
Long-Term Incentive Equity Awards			63
Executive Compensation Policies			66
Executive Benefits & Perquisites			66
Policy on Compensation Tax Deductibility			67

Compensation Committee Report			67

Executive Compensation			68
Summary of Compensation Table			69
Grants of Plan-Based Awards in Fiscal Year 2021			70
2015 Equity and Incentive Plan			71
Employee Stock Purchase Plan			72
Outstanding Equity awards at 2021 Fiscal Year-End			73
Options Exercised and Stock Vested in Fiscal Year 2021			75
Pension Benefits			75
Nonqualified Deferred Compensation as of December 31, 2021			75
Potential Payments Upon Termination of Charge-in-Control			76
Securities Authorized for Issuance under Equity Compensation Plans			79
CEO Pay Ratio Disclosure			79

Audit Committee Report			79

Audit Matters			82
Fees Billed in the Last Two Fiscal Years			83
Approval of Auditor Services			82

Beneficial Ownership of Common Stock			83

Certain Relationships and Related Transactions			85
Policies and Procedures Dealing with the Review, Approval and Ratification of Related Party Transactions			86
Related Party and Other Transactions			86
Indemnification Agreements			86

Additional Information			91
Shareholder Proposals for 2023 Annual Meeting of Shareholders			92
Householding of Annual Meeting Materials			93
Communicating with the Board of Directors and Corporate Governance Documents			93
Other Action at the Meeting			94

Appendix A – Use of Non-GAAP Financial Information			94

Appendix B – PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan			98

Appendix C – PROG Holdings, Inc. Employee Stock Purchase Plan			119


			CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
			This Proxy Statement contains forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 as they relate to our go-forward strategy, performance, technology, regulatory compliance and environmental, social and governance initiatives. These forward-looking statements can be identified by words such as “will,” “would,” “may,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “strategic,” “when,” “future,” “opportunity,” “plan,” “project,” “forecast,” and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results and financial condition to differ materially from those expressed or implied in our forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in our Annual Report on Form 10-K for the year ended December 31, 2021 and our other filings with the Securities and Exchange Commission. We do not intend, and undertake no obligation except as required by law, to update any of our forward-looking statements after the date of this Proxy Statement to reflect actual results or future events or circumstances.

Proxy Summary

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board of Directors”) of PROG Holdings, Inc. (“PROG Holdings”) of proxies for use at its 2022 Annual Meeting of Shareholders, including any adjournment or postponement thereof (the “Annual Meeting”). This summary highlights certain important information relating to the Annual Meeting contained elsewhere in this Proxy Statement, but does not contain all of the information you should consider prior to casting your vote. As a result, you should read this entire Proxy Statement carefully before voting. We anticipate that this Proxy Statement, the enclosed proxy card and our Annual Report for our 2021 fiscal year will be mailed to our shareholders beginning on or about April 25, 2022.

Annual Meeting Logistics

Date

May 24, 2022

Time

9:00 a.m., local time

Place

The Little America Hotel

500 South Main Street

Salt Lake City, Utah 84101

Record Date

April 11, 2022

Voting

Shareholders as of the record date are entitled to vote at the Annual Meeting. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on at the Annual Meeting.

Admission

Attendance at the Annual Meeting will be limited to shareholders as of the record date or their authorized representatives.

Matters to be Considered and Voting Recommendations


Proposal		Board Recommendation
1	Elect nine directors to serve for a term expiring at the 2023 Annual Meeting of Shareholders	“FOR” each director nominee
2	Vote on a non-binding advisory resolution approving PROG Holdings' executive compensation	“FOR”
3	Ratify the appointment of Ernst & Young LLP as PROG Holdings' independent registered public accounting firm for 2022	“FOR”
4	Amend the PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan	“FOR”
5	Amend the PROG Holdings, Inc. Employee Stock Purchase Plan	“FOR”

See “Matters To Be Voted On” beginning on page 8 for more information.


PROG Holdings, Inc. 2022 Proxy Statement						1


						Proxy Summary

Company Overview

Who We Are and What We Offer

PROG Holdings, Inc., headquartered in Salt Lake City, Utah, is a financial technology holding company that provides leading financial solutions to empower customers and retailers. The Company owns Progressive Leasing, a leading provider of in-store, e-commerce, and app-based point-of-sale, or “POS” lease-to-own solutions; Vive Financial ("Vive"), an omnichannel provider of second-look revolving credit products; and Four Technologies, Inc. ("Four"), a provider of Buy Now, Pay Later ("BNPL") payment options.

Progressive Leasing, our largest operating segment, provides consumers with transparent and competitive lease payment options, along with flexible terms, intended to help customers achieve merchandise ownership, including through low initial payments and early buyout options, from approximately 24,000 locations and websites of leading traditional and e-commerce retailers (whom we refer to collectively as our “POS” partners). Progressive Leasing does not own or operate any stores of its own. Rather, it purchases from its POS partners the merchandise desired by customers and, in turn, leases the merchandise to the customers through a lease-to-own transaction that the customers may cancel at any time. Progressive Leasing’s technology-based, proprietary decisioning platform offers prompt lease decisioning at the point-of-sale and is integrated with both its traditional and e-commerce POS partners.

Progressive Leasing offers simplified and transparent lease application and payment processes:

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Progressive Leasing's POS partners also benefit from the incremental sales Progressive Leasing generates, which allows them to serve credit challenged consumers as customers, without taking on credit risks. Progressive Leasing, which has funded over 10 million leases since its inception in 1999, represented approximately 98% of our consolidated revenues for the year ended December 31, 2021.

How Our LTO Offering Benefits the Customer

How Our LTO Offering Benefits POS Partners

✓

Provides consumers who may not qualify for traditional credit financing with a way to obtain merchandise they desire

✓

Generates incremental sales for them

✓

Provides flexible payment terms – monthly, semi-monthly, bi-weekly or weekly – managed by phone, on-line or mobile application

✓

Allows them to serve credit challenged consumers as customers, without taking on credit risks

✓

Offers multiple ownership alternatives, including early purchase options

✓

Automates 97% of lease decisions

✓

Provides immediate decision after submission of electronic application, with a median decision time of 5.7 seconds

✓

Integrates our decisioning platforms with their systems


2						PROG Holdings, Inc. 2022 Proxy Statement


Proxy Summary

Our Vive operating segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs, with services that include revolving loans through private label and Vive-branded credit cards. Vive’s current network of over 5,000 point-of-sale partner locations and e-commerce websites includes furniture, mattresses, fitness equipment, and home improvement retailers, as well as medical and dental service providers. We believe Vive’s product offerings are complementary to those of Progressive Leasing and allow Progressive Leasing to expand into the markets and POS partners that Vive serves.

Four, which we purchased in June 2021, provides consumers of all credit backgrounds with BNPL options through four interest-free installments. Four's proprietary platform capabilities provide our base of customers and POS partners with another payment solution as part of the PROG Holdings financial technology offerings. Shoppers use Four's platform to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States.

Our 2021 Performance Highlights(1)

$2.7B

$388.7M

+18.7%

We reported record consolidated revenues of $2.7 billion in 2021, an increase of 7.8% compared to 2020, driven by increased gross merchandise volume ("GMV")(2) generated from continued growth with large national POS partners, and increased e-commerce penetration.

Adjusted EBITDA increased to $388.7 million, compared to $341.3 million in 2020, primarily due to overall revenue growth(3)

Consolidated gross merchandise volume, or "GMV", increased 18.7% to $2.35 billion in 2021, compared to $1.98 billion in 2020, largely due to an increase in the number of new leases and increased e-commerce penetration for Progressive Leasing, and an increase in new loans at existing and new POS partners for Vive.

1.Performance highlights from continuing operations do not include the revenues, Adjusted EBITDA or GMV classified as discontinued operations related to the spin-off of our former Aaron's Business operating segment.

2.For Progressive Leasing we define GMV as the retail price that Progressive Leasing pays POS partners for the merchandise that it leases to its customers. For Vive and Four we define GMV as gross loan originations.

3.Adjusted EBITDA is a measurement of our performance not calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). For reconciliation of Adjusted EBITDA to the closest GAAP measure, Net Earnings from continuing operations, refer to the reconciliation set forth in Appendix A. Our Net Earnings from continuing operations for 2021 and 2020 was $243.6 million and $233.6 million, respectively.

Our 2021 Key Accomplishments

In addition to the performance highlights described above, our key accomplishments in 2021 also included:


			Returning $567 million of capital to our shareholders by repurchasing approximately 17% of our outstanding shares of common stock
			Achieving GMV growth of 15.8% in our Progressive Leasing business, and more than doubling its e-commerce GMV production
			Scaling the operations of Vive to profitability
			Acquiring Four Technologies, an innovative Buy Now, Pay Later company that allows customers to pay for the merchandise they desire through four, interest-free installments
			Creating a research and development group to create and test new Fintech products
			Adding three new independent directors to our Board, each of whom has deep digital expertise, and experience leveraging technology and data to drive consumer engagement and growth


PROG Holdings, Inc. 2022 Proxy Statement						3


						Proxy Summary

Our Performance Highlights for the Past Two Years1


			Our revenue from continuing operations increased by 23.8% over the past two years, from $2.16 billion in 2019 to $2.68 billion in 2021.
			Our Adjusted EBITDA from continuing operations increased by 49.7% over that time period, from $259.7 million in 2019 to $388.7 million in 2021. (1)
			Our GMV from continuing operations increased by 24.0% over the past two years, from $1.90 billion in 2019 to $2.35 billion in 2021

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1.Adjusted EBITDA is a measurement of our performance not calculated in accordance with GAAP. For reconciliation of Adjusted EBITDA to the closest GAAP measure, Net Earnings (Loss) from continuing operations, refer to the reconciliation set forth in Appendix A. Our Net Earnings (Loss) from continuing operations for each fiscal years 2021, 2020, and 2019 was $243.6 million, $233.6 and $(24.6 million), respectively.

Our Strategy Going Forward

Our strategy to drive growth in our business, which we believe positions us for success over the long-term, includes the following:

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4						PROG Holdings, Inc. 2022 Proxy Statement


Proxy Summary


Grow GMV with existing and new POS partners – We plan to grow GMV through strategic collaboration and marketing efforts with our POS partners. We remain focused on converting our existing pipeline of retailers into new POS partners. Our ability to maintain and strengthen new and existing relationships, including addressing the changing needs of our POS partners, is critical to the long-term growth of our business.
Invest in technology that simplifies and improves the customer experience – We are investing in technology platforms that promote customer engagement and simplify the lease application, origination and servicing experience. We are committed to providing our customers with greater choice and flexibility in how and where they choose to shop. We are expanding and innovating our e-commerce capabilities to benefit existing and new POS partners and customers.
Leverage our large database to drive repeat business – We are leveraging our extensive database of lease agreements to offer current and previous customers products and solutions that meet their needs. We also use historical information from that database to help inform our decisioning on the applications of potential new customers.
Broaden our financial technology product ecosystem through research and development ("R&D") efforts and strategic acquisitions – We plan to expand our product solutions to create a more loyal and engaged customer base.
Employ direct-to-consumer marketing to drive shoppers in-store and online – We plan to continue expanding our direct-to-consumer marketing efforts to attract new customers and drive more GMV through our POS partners.

Our Response to the COVID-19 Pandemic

During 2021, the Company continued to adjust its business operations and employee health and safety initiatives to respond to the COVID-19 pandemic, an event unprecedented in the history of the Company, including taking the actions described below to help our customers and employees navigate the risks, challenges and uncertainty arising from the pandemic.

Actions Taken on a Case-by-Case Basis to Assist Customers Facing Financial Challenges

▪We allowed customers to defer making payments owed to us.

▪We partnered with customers to create payment schedules personalized to their unique situations.

▪We offered discounted settlement opportunities, where appropriate.

▪We waived return payment fees in our Progressive Leasing segment.

Actions to Protect the Health and Safety of Our Employees

▪We allowed employees to continue working remotely from their homes.

▪We ensured employees were provided with computers, monitors, headsets and other equipment necessary for them to successfully perform their jobs from home, at no cost to the employees.

▪We provided employees and their families with no-cost access to virtual mental health counseling services.

▪We granted paid time off for employees to receive vaccinations and boosters.

▪We monitored employee vaccination rates.

▪We developed enhanced safety and sanitation procedures for our facilities to protect employees who desired to work from our facilities or whose jobs require them to be present on-site, including providing no-cost COVID-19 tests and masks for employees entering our facilities.


PROG Holdings, Inc. 2022 Proxy Statement						5


						Proxy Summary

ESG Reporting

We are committed to being transparent and informing all of our stakeholders about our Environmental, Social and Governance ("ESG") initiatives and performance on ESG matters. In furtherance of this commitment, we recently published our inaugural ESG Review, which provides information on how we identify, address and measure our performance on ESG topics that we believe are important to the long-term success and sustainability of our business. Our inaugural ESG Review, which we intend to update annually, is available under the Governance tab on our investor relations website at investor.progholdings.com. We encourage all of our stakeholders to read our ESG Review, and the various policies referenced within that document, including our Human Rights Policy and our Vendor Code of Conduct, both of which are also available under the Governance tab on our investor relations website, investor.progholdings.com.

Social Considerations

Through our social-related initiatives, we strive to respect and value our customers; recruit, develop, promote and retain a diverse group of highly motivated and talented employees; and invest in improving the communities where our customers and employees live and work.

Respecting and Valuing Our Customers

We appreciate that our customers are the lifeblood of our business. As such, we believe it is critical that our customers have a positive and successful experience with our products, service and support from the moment they enter the stores or e-commerce websites of our POS partners. Our commitments to ethical and transparent selling practices, providing excellent customer service, working with our customers to help them achieve success with our offerings, including when they face unexpected financial hardships or other life challenges, and protecting the security of their personal information are all part of how we show our customers that we respect and value them.

Recruiting, Developing, Promoting and Retaining Our Employees

Our Board of Directors and management team believes that recruiting, hiring, developing, promoting, and retaining a diverse and highly motivated and qualified team of employees is critical to the long-term success and sustainability of our business. To further those objectives during 2021, we (i) enhanced our recruiting and on-boarding efforts, (ii) conducted quarterly employee engagement surveys and implemented other programs and initiatives to promote and increase employee engagement, (iii) increased the amount and variety of training opportunities available to our employees, (iv) expanded our diversity, equity and inclusion programs and initiatives; and (v) reviewed and enhanced our compensation and benefits packages to ensure they are competitive. In addition, we continued to focus our efforts on keeping our employees and their families safe and well, including in connection with the COVID-19 pandemic.

Investing in Our Communities

Our Board of Directors and management team believe that investing time and money to improve the communities where our employees and customers live and work is simply the right thing to do. We are committed to giving-back to, and making a positive impact in, our communities. We carry out this commitment through our PROG Holdings Foundation, which makes contributions to non-profit organizations focused on utilizing educational, developmental and technological tools to empower socioeconomic improvement and mobility for the underserved, and also through our Employee Matching Gift program, which matches employee donations to most non-profit organizations, with a maximum annual match of $1,000 per employee. In addition to investing money in our communities, we encourage and enable our employees to invest their time in improving their communities, including through our Paid Service Program, which provides each employee with up to eight hours of paid time annually to perform services for eligible non-profit organizations with whom they choose to volunteer.


6						PROG Holdings, Inc. 2022 Proxy Statement


Proxy Summary

Governance Considerations

Our Board of Directors oversees our ESG program and matters at an enterprise-wide level, including ESG strategy and risk assessment, all as reported up from management and applicable committees of the Board of Directors from time to time. While we believe our ESG efforts benefit from the engagement of the full Board of Directors, efficiently managing the breadth and diversity of ESG initiatives and matters requires delegation to appropriate committees of the Board of Directors as developments may warrant.

Environmental Considerations

Our Board of Directors and management team believe it is critical that businesses across all industries, including ours, all do their part to improve the environment, including reducing greenhouse gas (“GHG”) emissions. During 2021, we took a number of steps designed to help us understand our current environmental footprint and impacts, and to evaluate and develop a strategy around further reducing our energy, water and paper use, as well as our direct and indirect GHG emissions. Those steps included engaging an environmental consultant to calculate our Scope 1 and Scope 2 GHG emissions, our current water use, and other metrics, and to assist us in developing reduction targets for our energy consumption, GHG emissions and water and paper use, which we expect to complete by the end of 2022.


PROG Holdings, Inc. 2022 Proxy Statement						7


						Matters To Be Voted On

Proposal 1:
Election of Directors

Our Board of Directors recommends the election of the nominees listed below, each of whom will have a term of office expiring at our 2023 Annual Meeting of Shareholders. Each nominee elected to serve as a director will hold office until the expiration of his or her term and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office or death. If, at the time of the Annual Meeting, any of such nominees should be unable to serve, the persons named in the proxy will vote for such substitutes as our Board of Directors recommends. In no event will the proxy be voted for more than nine nominees. Our management has no reason to believe that any nominee for election at the Annual Meeting will be unable to serve if elected.

The following table provides summary information about each nominee, all of whom currently serve on our Board of Directors. All of the nominees listed below have consented to serve as directors if elected. We invite you to read the more fulsome description of our director nominees under "Governance - Board of Directors".

Nominee

Age

Occupation

Independent

Joined Our Board

Kathy T. Betty

Former Owner and Chief Executive Officer
Atlanta Dream (WNBA team)

Yes

August 2012

Douglas C. Curling

Managing Principal
New Kent Capital LLC and
New Kent Consulting LLC

Yes

January 2016

Cynthia N. Day

President and Chief Executive Officer
Citizens Bancshares Corporation and
Citizens Trust Bank

Yes

October 2011

Curtis L. Doman

Chief Innovation Officer of PROG Holdings, Inc.

August 2015

Ray M. Martinez

Co-Founder and President of Financial Services, EVERFI, Inc.

Yes

September 2021

Steven A. Michaels

President and Chief Executive Officer of PROG Holdings, Inc.

November 2020

Ray M. Robinson

Former President for the Southern Region AT&T

Yes

November 2002

Caroline S. Sheu

Global Director, Digital and Direct-to-Consumer Marketing, Google

Yes

September 2021

James P. Smith

Former Executive Vice President, Head of Digital & Direct Virtual Channels Wells Fargo & Company

Yes

May 2021

Assuming a quorum is present, a nominee will be elected upon the affirmative vote of a majority of the total votes cast at the Annual Meeting, which means that the number of votes cast in favor of a nominee’s election exceeds the number of votes cast against that nominee’s election. If an incumbent director fails to receive a majority of the votes cast, the incumbent director will promptly tender his or her resignation to our Board of Directors. Our Board of Directors can then choose to accept the resignation, reject it or take such other action that our Board of Directors deems appropriate.

Our Board of Directors recommends that you vote “FOR” the election of each of the nominees above.


8						PROG Holdings, Inc. 2022 Proxy Statement


Matters To Be Voted On

Proposal 2:

Advisory Vote on Executive Compensation

Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, we provide our shareholders with the annual opportunity to cast an advisory vote on the compensation of our named executive officers. The vote on this proposal represents an additional means by which we obtain feedback from our shareholders about executive compensation. Among other responsibilities, our Compensation Committee sets executive compensation for our named executive officers, which is designed to link pay with performance while enabling us to competitively attract, motivate and retain key executives. The overall objective of our executive compensation program is to encourage and reward the creation of sustainable, long-term shareholder value.

To meet this objective, the Compensation Committee's deliberations regarding how much to pay our named executive officers included, among other performance metrics:

▪objective measurements of business performance;

▪the accomplishment of financial and compliance objectives;

▪the development and retention of management talent;

▪enhancement of shareholder value; and

▪external market, competitive and benchmarking data.

Our focus on internal financial and compliance performance as measured in our annual incentive plans led to solid results for 2021, and we believe has positioned our operations well for the future. Our equity program serves to align the interests of our named executive officers with those of our shareholders.

We encourage our shareholders to read the “Compensation Discussion and Analysis” section of this Proxy Statement, which discusses how our compensation policies and programs support our compensation philosophy, as well as how our Compensation Committee addressed these matters. Our Board of Directors and the Compensation Committee believe these policies and programs are strongly aligned with the long-term interests of our shareholders.

Accordingly, we are asking our shareholders to approve the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure, is hereby APPROVED.”

This vote is advisory and therefore not binding on us, our Board of Directors or the Compensation Committee. At last year’s annual meeting of shareholders, 98% of votes cast were in support of the compensation paid to our named executive officers. Our Board of Directors and the Compensation Committee value the opinions of our shareholders, and the Compensation Committee takes seriously its role in the governance of compensation. The Compensation Committee will consider the result of this year’s vote, as well as other communications from shareholders relating to our compensation practices, and take them into account in future determinations concerning our executive compensation program.

Assuming a quorum is present, the resolution above approving our executive compensation will be approved if the votes cast by holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the resolution exceed the votes cast against the resolution.

Our Board of Directors recommends that you vote “FOR” the resolution approving our executive compensation.


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Proposal 3:

Ratification of the Appointment of the Independent Registered Public Accounting Firm

The Audit Committee of our Board of Directors has appointed Ernst & Young LLP, which we refer to as “EY,” to audit our consolidated financial statements for the year ending December 31, 2022, as well as the effectiveness of our internal controls over financial reporting as of December 31, 2022. A representative of EY will be present at the Annual Meeting, will have the opportunity to make a statement and will be available to respond to appropriate questions from shareholders.

We are asking our shareholders to ratify EY's appointment as our independent registered public accounting firm. Although ratification is not required by our bylaws or otherwise, our Board of Directors is submitting the selection of EY to our shareholders for ratification because we value our shareholders’ views on our independent registered public accounting firm and view the ratification vote as a matter of good corporate practice. In the event that our shareholders fail to ratify the appointment, it is anticipated that no change in our independent registered public accounting firm would be made for fiscal year 2022 because of the difficulty and expense of making any change during the current fiscal year. However, our Board of Directors and the Audit Committee would consider the vote results in connection with the engagement of an independent registered public accounting firm for fiscal year 2023. Even if EY's appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company and its shareholders.

Assuming a quorum is present, the proposal to ratify the appointment of our independent registered public accounting firm for 2022 will be approved if the votes cast by holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the proposal exceed the votes cast against the proposal.

Our Board of Directors recommends that you vote “FOR” the ratification of the appointment of our independent registered public accounting firm for 2022.


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Proposal 4:

Amendment to the PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan

We are seeking your vote to approve an amendment (the “EIP Amendment”) to the PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan (the “EIP”) to increase the number of shares of common stock authorized for issuance under the EIP from 8,000,000 shares to 10,980,000 shares in order to permit us to continue to offer this important incentive and retention program to our employees and directors. The EIP Amendment will also amend the EIP to (1) provide that awards granted under the EIP may not vest earlier than one year from the date of the grant, subject to certain limited exceptions and (2) prohibit the payment of dividends or dividend equivalents on awards granted under the EIP that are unvested. The Board of Directors, upon the recommendation of the Compensation Committee, approved and adopted the EIP Amendment on April 24, 2022, subject to shareholder approval.

The EIP is an important tool that we use to promote the long-term growth and profitability of the Company and its subsidiaries by providing employees, directors, consultants, advisors, and other persons who work for the Company and its subsidiaries with incentives to maximize shareholder value and otherwise contribute to the success of the Company. In addition, we believe the EIP helps us attract, retain, and reward talented individuals and align their interests with shareholders.

As of April 11, 2022, only 1,566,053 shares remained available for future grants under the EIP, and the closing price of our common stock was $27.78. To ensure that the Company has an appropriate number of shares available for grant under the EIP to properly incentivize employees, directors, consultants, advisors, and other persons who work for the Company and its subsidiaries, we are asking shareholders to approve an increase in the number of shares of common stock available for issuance under the EIP by 2,980,000 shares, from 8,000,000 shares to 10,980,000 shares. For further information regarding outstanding awards under our EIP, see Executive Compensation — Securities Authorized for Issuance under Equity Compensation Plans — Footnote 2.

If shareholders do not approve the EIP Amendment, the EIP Amendment will not become effective, the EIP will continue in full force and effect, and we may continue to grant awards under the EIP, subject to its terms, conditions and limitations, using the shares remaining available for issuance thereunder. Because our directors and executive officers are eligible to receive awards under the EIP, they may be considered to have an interest in this proposal.

Background of the EIP and EIP Amendment

The EIP was initially approved by shareholders at our 2015 Annual Meeting of Shareholders. An amendment to the EIP was approved by shareholders at our 2019 Annual Meeting of Shareholders in order to (i) increase the remaining number of shares of common stock available for issuance by 3,000,000 shares and (ii) revise the EIP in light of amendments to Internal Revenue Code Section 162(m) in the Tax Cuts and Jobs Act. The EIP was then amended again in October 2020 in connection with the Company’s holding company reorganization (the “Reorganization”) and to facilitate the spin-off of our former Aaron's Business operating segment.

Like other companies in our industry, our share price has been negatively affected by current macroeconomic impacts, including the continuing effects of COVID-19, a steep increase in inflation, the recent conflict in Ukraine, and the economic uncertainty associated with the expiration of government stimulus payments, enhanced unemployment benefits and enhanced child tax credits (all of which provided significant liquidity and other benefits to many of the customers we serve). The unanticipated, sharp decrease in our share price has resulted in a depletion of our EIP share reserve more rapidly than expected. We expect the increase in the number of shares


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reserved for future issuance under the EIP Amendment will allow us to continue to promote long-term growth and profitability of the Company, and attract, retain and reward talented individuals and align their interests with those of our shareholders.

We also recognize that equity compensation programs, such as the EIP, dilute shareholder equity and need to be used judiciously. Notably, if the EIP Amendment is approved by our shareholders, the number of shares that will be subject to the EIP as a percentage of the total equivalent common shares outstanding, as of April 11, 2022, will be 8.3%, which results in only 5.5% of additional potential dilution. In addition, and as described below, the anti-dilutive effects of the share repurchases the Company carried out in 2021 and in the first quarter of 2022 significantly offset the dilutive effects of the EIP.

For example, our Board of Directors approved increasing our share repurchase program from $300 million to $1.0 billion in November 2021. Promptly thereafter, we commenced a modified “Dutch Auction” tender offer pursuant to which we repurchased approximately $425 million of our common stock in December 2021. Beyond the shares repurchased in the tender offer, we repurchased another approximately $142 million of our common stock in 2021 and approximately $78 million of our common stock during the first quarter of 2022. As of April 11, 2022, these actions have resulted in the Company repurchasing approximately 17% of its outstanding shares, as compared to the number of shares outstanding as of December 1, 2021. We believe that the anti-dilutive impact of these actions sufficiently offset the increase in the number of shares to be authorized for issuance pursuant to the EIP Amendment.

We also believe that the EIP is designed to be consistent with competitive market practice and our historical share utilization has been prudent and mindful of shareholder interests. Key features of the EIP designed to protect shareholder interests and reflect compensation and governance best practices, none of which will be eliminated through the EIP Amendment, include:

▪Independent Committee. Awards under the EIP are administered by the Compensation Committee, which is comprised entirely of independent directors.

▪No Evergreen Feature / Shareholder Approval Required. The EIP does not provide for an annual increase to the share reserve, and provides that material amendments to the EIP require shareholder approval.

▪No Liberal Share Recycling. The EIP does not provide for liberal share recycling and limits share recycling to forfeited shares and the expiration or cancellation of an option, SAR, restricted stock, restricted stock unit, performance Share, performance unit, or other award, or settlement of any award in cash rather than shares.

▪No Discounted Stock Options or SARs. All stock option awards and all stock appreciation rights (“SARs”), under the EIP must have an exercise price that is not less than the fair market value of the underlying common stock on the date of the grant.

▪No Automatic Single-Trigger Vesting Acceleration. Unless otherwise provided in an award agreement, the EIP does not provide for automatic acceleration of the vesting of outstanding awards upon the occurrence of a change in control so long as such awards are assumed and continued in connection with such transaction. The EIP does provide for double-trigger vesting acceleration in the event of a termination of employment without cause within two years following the occurrence of a change in control.

▪Clawback Policy. All awards granted to our executive officers under the EIP are subject to our existing clawback policy, which provides that such executive officer awards may be recouped if we restate our consolidated financial statements as a result of any gross negligence leading to misstatements.

If our shareholders approve the EIP Amendment, the EIP will also add the following features to further protect shareholder interests and reflect compensation and governance best practices:

▪Minimum Vesting or Performance Period. Subject to certain limited exceptions, a minimum vesting or performance period of one year is prescribed for all awards.

▪Limitations on Dividend Payments. Dividends and dividend equivalents in respect of shares underlying an award issued pursuant to the EIP may only be paid to the extent such award vests.


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In its determination to approve the EIP Amendment, our Compensation Committee reviewed an analysis prepared by Exequity LLP, its independent compensation consultant, which included an examination of our potential dilution, burn rate, overhang and historical grant practices. Based on this analysis, as well as further consideration and discussion, the Compensation Committee currently believes that approval of the EIP Amendment should result in an adequate number of shares of common stock for future issuance for approximately three-to-four years; however, this forecast includes several assumptions and there are several factors that could impact the Company’s future common stock issuances, including, but not limited to, employee participation levels remaining consistent with historical levels, equity compensation levels offered by our peer group and the impact of macroeconomic factors, such as the ones discussed above, and other factors on the future price of our shares.

For purposes of clarity, the key provisions of the EIP, as amended by the EIP Amendment, are substantially the same as those of the EIP.

Summary of the Material Terms of the EIP

The following summary of the material terms of the EIP is qualified in its entirety by reference to the full text of the EIP, as amended by the EIP Amendment, which is attached to this Proxy Statement as Appendix B. Capitalized terms used in this summary, but not otherwise defined in this summary, shall have the respective meanings ascribed to them in the EIP, as amended by the EIP Amendment.

Shares Available for Issuance

The aggregate number of shares that will be available for issuance pursuant to awards granted under the EIP is 4,546,053 shares (the “Share Pool”), subject to adjustment as described in the EIP Amendment. The shares issued by the Company under the EIP Amendment will be authorized but unissued shares or shares currently held (or subsequently acquired) as treasury shares, including shares purchased on the open market or in private transactions. As of April 11, 2022, the aggregate number of shares of common stock available for issuance under the EIP was 1,566,053.

If shares awarded under the EIP are not issued, or are reacquired by the Company, as a result of a forfeiture of restricted stock or a restricted stock unit ("RSU"), or the termination, expiration or cancellation of non-qualified stock options ("NQSOs"), incentive stock options ("ISOs"), SARs, performance shares or performance units, or the settlement of an award in cash in lieu of shares, that number of shares will be added back to the Share Pool. If the exercise price of an option, or the purchase price and/or tax withholding obligation under any award is satisfied by the Company retaining shares or by the participant tendering shares (either by actual delivery or attestation), the number of shares so retained or tendered shall be deemed delivered for purposes of determining the Share Pool and shall not be available for further awards under the EIP. To the extent a SAR is settled in shares of common stock, the gross number of shares subject to such SAR shall be deemed delivered for purposes of determining the Share Pool and shall not be available for further awards under the EIP. Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of options shall not be added back to the Share Pool.

Administration

The Board of Directors may appoint the Compensation Committee or such other committee consisting of two or more independent Board members (in each case, the “Committee”) to administer the EIP, and the Board of Directors has currently designated the Compensation Committee to serve this function. The Committee has the right to select the persons who receive awards under the EIP, to set the terms and conditions of such awards (including the term, exercise price, vesting conditions, and the consequences of termination of employment), and to interpret and administer the EIP. Subject to the express provisions of the EIP, the Committee is authorized and empowered to do all things that the Committee in its discretion determines to be necessary or appropriate in connection with the administration and operation of the EIP.


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Eligibility

Employees of the Company or certain affiliates, non-employee members of the Board of Directors, and any other individual who provides bona fide services to the Company or certain affiliates not in connection with the offer or sale of securities in a capital raising transaction (subject to certain limitations) will be eligible for selection by the Committee for the grant of awards under the EIP. As of December 31, 2021, there were approximately five hundred employees and seven non-employee members of the Board of Directors who could be eligible to receive awards under the EIP. While technically permitted, the Company does not currently anticipate granting awards to individuals who are not employees or directors providing services to the Company or certain affiliates.

Minimum Vesting Provisions

Awards granted under the EIP will vest no earlier than one year measured from the date of grant and no award agreement may reduce or eliminate such minimum vesting requirement, provided that an award may provide that such minimum vesting restrictions may lapse or be waived upon a participant’s termination of service. In addition, up to an aggregate of 5% of the number of shares available for issuance under the EIP may be granted without regard to the one-year vesting requirement. For the purposes of awards to non-employee directors, a vesting period shall be deemed to be one year if it runs from the date of one annual meeting of the Company’s shareholders to the next annual meeting of the Company’s shareholders, so long as the period between such meetings is not less than 50 weeks.

Types of Awards

The EIP provides for the grant of NQSOs, ISOs, SARs, restricted stock, RSUs, performance shares, performance units, annual incentive awards and other stock-based awards to eligible participants. ISOs may only be granted to employees of the Company or its subsidiaries.

Individual Limits

Subject to adjustment as described in the EIP, the maximum number of options and SARs that, in the aggregate, may be granted in any one fiscal year to any participant is 1,000,000.

Adjustments

The Committee will make equitable adjustments in the number and class of securities available for issuance under the EIP (including under any awards then outstanding), the number and type of securities subject to the individual limits set forth in the EIP, and the terms of any outstanding award, as it determines are necessary and appropriate, to reflect any merger, reorganization, consolidation, recapitalization, reclassification, stock split, reverse stock split, spin-off, combination, or exchange of shares, distribution to shareholders (other than an ordinary cash dividend), or similar corporate transactions or events.

Stock Options

A stock option provides the participant with the right to buy a specified number of shares at a specified price (“exercise price”) after certain conditions have been met. The Committee may grant both NQSOs and ISOs under the EIP. The tax treatment of NQSOs is different from the tax treatment of ISOs, as explained in the section below entitled “Federal Income Tax Consequences.” The Committee will determine and specify in the award agreement whether the option is an NQSO or ISO, the number of shares subject to the option, the exercise price of the option and the period of time during which the option may be exercised (including the impact of a termination of employment). No option can be exercisable more than ten years after the date of grant and the exercise price of a stock option must be at least equal to the fair market value of a share on the date of grant of the option. However, with respect to an ISO granted to a participant who is a shareholder holding more than 10% of the Company’s total voting stock, the ISO cannot be exercisable more than five years after the date of grant and the exercise price must be at least equal to 110% of the fair market value of a share on the date of grant.


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Each option shall be counted as one share subject to an award and deducted from the Share Pool.

A participant may pay the exercise price under an option (i) in cash, by check, bank draft, money order or other cash equivalent approved by the Committee; or (ii) if approved by the Committee, by tendering previously-acquired shares having an aggregate fair market value at the time of exercise equal to the total option price (provided that the tendered shares must have been held by the participant for any period required by the Committee), pursuant to a cashless exercise procedure adopted by the Committee, by any other means which the Committee determines to be consistent with the EIP’s purpose and applicable law, including net exercise, or (iii) by a combination of these payment methods. No shares will be delivered until the full option price has been paid.

Stock Appreciation Rights

A SAR entitles the participant to receive cash, shares, or a combination thereof, in an amount equal to the excess of the fair market value of a share on the exercise date over the exercise price for the SAR, after certain conditions have been met. The Committee will determine and specify in the SAR award agreement the number of shares subject to the SAR, the SAR exercise price (which generally must be at least equal to the fair market value of a share on the date of grant of the SAR), the conditions upon which the SAR becomes vested and exercisable, and the period of time during which the SAR may be exercised (including the impact of a termination of employment). No SAR can be exercisable more than ten years after the date of grant. Each SAR that may be settled in shares of common stock shall be counted as one share subject to an award and deducted from the Share Pool. SARs that may not be settled in shares of common stock shall not result in a reduction from the Share Pool.

Restricted Stock and RSUs

The Committee will specify the terms of a restricted stock or RSU award in the award agreement, including the number of shares of restricted stock or units, the purchase price, if any, to be paid for such restricted stock/unit, any restrictions applicable to the restricted stock/unit such as continued service or achievement of performance goals, the length of the restriction period and whether any circumstances, such as death or disability, shorten or terminate the restriction period, and whether RSUs will be settled in cash, shares or a combination of both. Unless the Committee specifies otherwise, RSUs will be settled in shares of common stock.

Except as provided in the EIP or in the award agreement, a participant who receives a restricted stock award will have all of the rights of a shareholder of the Company, including the right to vote the shares and the right to receive dividends; provided, however, the Committee may require that any dividends during the restriction period be subject to the same restrictions on vesting as the underlying award. A participant receiving an RSU will not have voting rights and will accrue dividend equivalents only to the extent provided in the RSU agreement and subject to the same vesting and payment restrictions as on the underlying award. Each share of restricted stock and each RSU that may be settled in shares of common stock shall be counted as one share subject to an award and deducted from the Share Pool. RSUs that may not be settled in shares of common stock will not result in a deduction from the Share Pool.

Performance Shares and Units

A performance share will have an initial value equal to the fair market value of a share on the date of grant. A performance unit will have an initial value that is established by the Committee at the time of grant. In addition to any non-performance terms applicable to the performance share or performance unit, the Committee will set performance goals which, depending on the extent to which they are met, will determine the number or value of the performance shares or units that will be paid out to the participant. The Committee may provide for payment of earned performance shares/units in cash or in shares or in the form of other awards granted under the EIP which have a fair market value equal to the value of the earned performance shares/units at the close of the applicable performance period. Unless the Committee specifies otherwise, earned performance shares/units will be settled in the form of shares of common stock.


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Performance shares/units will not possess voting rights and will accrue dividend equivalents only to the extent provided in the agreement relating to the award and subject to the same restrictions on vesting and payment as the underlying award.

Each performance share that may be settled in shares of common stock shall be counted as one share subject to an award, based on the number of shares that would be paid under the performance share for achievement of target performance, and deducted from the Share Pool. Each performance unit that may be settled in shares of common stock shall be counted as a number of shares subject to an award, based on the number of shares that would be paid under the performance unit for achievement of target performance, and this number shall be deducted from the Share Pool. In the event that the performance shares or performance units are later settled based on above-target performance, the additional number of shares of common stock corresponding to the above-target performance shall be deducted from the Share Pool at the time of such settlement; in the event that the award is later settled based on below-target performance, the difference between the number of shares of common stock awarded based on the below-target performance and the number previously deducted from the Share Pool based on the target performance shall be added back to the Share Pool. Performance shares and performance units that may not be settled in shares of common stock will not result in a deduction from the Share Pool.

Other Awards

The Committee will have the authority to grant other forms of equity-based or equity-related awards, not otherwise described herein, that the Committee determines consistent with the purpose of the EIP and the best interests of the Company and its shareholders. These other awards may include an award of, or the right to acquire, shares of common stock that are not subject to restrictions, or provide for cash payments based in whole or in part on the value or future value of shares, for the acquisition or future acquisition of shares, or any combination thereof. Where the value of such an award is based on the difference in the value of a share at different points in time, the grant or exercise price may not be less than 100% of the fair market value of a share on the date of grant. The Committee will determine all terms and conditions of such awards, including the performance measures (as described below), the performance period, the potential amount payable, and the timing of the payment. Other awards that may be settled in shares of common stock shall be counted as a number of shares subject to an award and deducted from the Share Pool. Other awards that may not be settled in shares of common stock shall not result in a deduction from the Share Pool.

Annual Incentive Awards

The Committee may grant annual incentive awards to participants in such amounts and upon such terms as the Committee shall determine. Unless provided otherwise at the time of grant, annual incentive awards (i) shall be payable in cash, and (ii) are intended to be exempt from Section 409A as short-term deferrals, and, thus, will be payable no later than two and a half (2 1/2) months after the end of the Company’s fiscal year to which the award relates.

Performance Measures

The Committee may establish performance measures for awards granted to participants under the EIP. The performance measure or measures may include, but are not limited to, one or more of the following performance criteria: earnings, earnings before income taxes, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation and amortization (EBITDA), earnings before interest, taxes, depreciation, amortization and rent (EBITDAR), gross margin, operating margin, profit margin, market value added, market share, revenue, revenue growth, return measures (including but not limited to return on equity, return on shareholders’ equity, return on investment, return on assets, return on net assets, return on capital, return on sales, and return on invested capital), total shareholder return (either in absolute terms or relative to that of a peer group determined by the Committee), profit, economic profit, capitalized economic profit, operating profit, after-tax profit, net operating profit after tax (NOPAT), pretax profit, cash, cash flow measures (including but not limited to operating


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cash flow, free cash flow, cash flow return, cash flow per share, and free cash flow per share), earnings per share (EPS), consolidated pretax earnings, net earnings, operating earnings, segment income, economic value added, net income, net income from continuing operations available to common shareholders excluding special items, operating income, adjusted operating income, assets, sales, net sales, sales volume, sales growth, net sales growth, number of active retail and/or merchant stores at which the Company has entered into lease-to-own arrangements and/or other Company products during a specified time period, number of customers, gross merchandise volume, debt/capital ratio, return on total capital, cost, unit cost, cost control, expense targets or ratios, charge-off levels, operating efficiency, operating expenses, customer satisfaction, improvement in or attainment of expense levels, working capital, working capital targets, improvement in or attainment of working capital levels, debt, debt to equity ratio, debt reduction, capital targets, capital expenditures, price/earnings growth ratio, acquisitions, dispositions, projects or other specific events, transactions or strategic milestones, the Company’s common stock price (and stock price appreciation, either in absolute terms or in relationship to the appreciation among members of a peer group determined by the Committee), and book value per share.

All criteria may be measured on a Generally Accepted Accounting Principles (“GAAP”) basis, adjusted GAAP basis, or non-GAAP basis. Any performance measure for an award may be described in terms of Company-wide objectives or objectives that are related to a specific segment, division, subsidiary, employer, department, region, or function in which the participant is employed or as some combination of these (as alternatives or otherwise). A performance objective may be measured on an absolute basis or relative to a pre-established target, results for a previous year, the performance of other corporations, or a stock market or other index. The Committee will specify the period over which the performance goals for a particular award will be measured.

The Committee may specify such other conditions and criteria as it chooses and may exercise discretion as it determines appropriate.

The Committee will determine whether the applicable performance goals have been met with respect to a particular award. In determining whether any performance objective has been satisfied, the Committee is authorized to include or exclude the effects of extraordinary items and/or other items that are unusual or nonrecurring, changes in tax laws or regulations or accounting procedures, or any other factors as the Committee may determine.

Dividends and Dividend Equivalents

Dividends or dividend equivalents settled in cash or Company shares may be granted to an EIP participant in relation to an award with payments made either currently or credited to an account. No dividend or dividend equivalents granted in relation to the award that is subject to vesting shall be settled prior to the date such award (or applicable portion thereof) becomes vested.

Change in Control

Unless otherwise provided in an award agreement, upon a change in control of the Company, any outstanding option, SAR, restricted stock and RSU shall vest as of or immediately prior to the change in control if such award is not assumed, continued or replaced with a “replacement award.” If the participant receives a replacement award in connection with a change in control, and the participant’s employment is terminated without cause within two years following the consummation of a change in control, outstanding options, SARs, restricted stock and RSUs held by such participant shall vest on the participant’s termination date. “Replacement award” means an award (a) of the same type (e.g., option, RSU, etc.) as the award, (b) that has a value at least equal to the value of the award, (c) that relates to publicly traded equity securities of the Company or its successor or is payable solely in cash, and (d) that has other terms and conditions of which are not less favorable to the participant than the terms and conditions of the award.


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With respect to awards that are subject to performance objectives, the Committee may, in its sole discretion, provide that any such full or prorated award will be paid prior to when any or all such performance objectives are certified (or without regard to whether they are certified) or may make necessary and appropriate adjustments in the performance objectives.

Clawback and Cancellation Policies

Awards under the EIP are subject to any clawback policy adopted by the Company from time to time, including clawback policies adopted to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. For information regarding the Company’s existing clawback policy, see “Compensation Discussion and Analysis – Executive Compensation Policies – Clawback Policy.”

Transferability

Awards generally may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except in the event of a participant’s death to his beneficiary, or by will or the laws of descent and distribution, and each option or SAR may be exercisable only by the participant during his or her lifetime. However, the Committee may provide in an award agreement for a NQSO that the NQSO be transferable consistent with securities law and other applicable law. NQSOs and SARs may not be transferred for value or consideration.

Amendment and Termination

The Board of Directors or the Committee may amend or terminate the EIP in whole or in part at any time, but the amendment or termination cannot adversely affect any rights or obligations with respect to an award previously granted without the affected participant’s written consent. The Company must obtain the approval of the shareholders before amending the EIP to the extent required by Section 422 of the Code or the rules of the NYSE or other applicable law.

The Committee may amend an outstanding award agreement in a manner not inconsistent with the terms of the EIP, but the amendment will not be effective without the participant’s written consent if the amendment is materially adverse to the participant. The Committee cannot amend outstanding awards, without shareholder approval, to reduce the exercise price of outstanding awards, or cancel outstanding options or SARs in exchange for cash, another award or stock option or SAR with an option exercise price or SAR price that is less than the option exercise price or SAR price of the original stock option or SAR.

Federal Income Tax Consequences

The following is a summary of the general federal income tax consequences to our Company and to U.S. taxpayers of awards granted under the EIP. Tax consequences for any particular individual or under state or non-U.S. tax laws may be different.

Incentive Stock Options. A participant does not recognize taxable income upon the grant or upon the exercise of an ISO (although the exercise of an ISO may in some cases trigger liability for the alternative minimum tax). Upon the sale of ISO shares, the participant recognizes income in an amount equal to the excess, if any, of the fair market value of those shares on the date of sale over the exercise price of the ISO shares. The income is taxed at the long-term capital gains rate if the participant has not disposed of the stock within two years after the date of the grant of the ISO and has held the shares for at least one year after the date of exercise, and we are not entitled to a federal income tax deduction. ISO holding period requirements are waived when a participant dies. If a participant sells ISO shares before having held them for at least one year after the date of exercise and two years after the date of grant, the participant recognizes ordinary income to the extent of the lesser of: (a) the gain realized upon the sale; or (b) the excess of the fair market value of the shares on the date of exercise over the exercise price. Any additional gain is treated as long-term or short-term capital gain depending upon how long the participant has held the ISO shares prior to disposition. In the year of any such disposition, we are entitled to a federal income tax deduction in an amount equal to the ordinary income that the participant recognizes, if any, as a result of the disposition.


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Matters To Be Voted On

Nonqualified Stock Options. A participant does not recognize taxable income upon the grant of an NQSO. Upon the exercise of such a stock option, the participant recognizes ordinary income to the extent the fair market value of the shares received upon exercise of the NQSO on the date of exercise exceeds the exercise price. We are entitled to an income tax deduction in an amount equal to the ordinary income that the participant recognizes upon the exercise of the stock option.

Restricted Stock. A participant who receives an award of restricted stock does not generally recognize taxable income at the time of the award. Instead, the participant recognizes ordinary income in the first taxable year in which his or her interest in the shares becomes either: (a) freely transferable or (b) no longer subject to substantial risk of forfeiture. The amount of taxable income is equal to the fair market value of the shares less the cash, if any, paid for the shares. A participant may make an election under Internal Revenue Code Section 83(b) to recognize income at the time of grant of restricted stock in an amount equal to the fair market value of the restricted stock (less any cash paid for the shares) on the date of the award. We are entitled to a deduction in an amount equal to the ordinary income recognized by the participant in the taxable year in which restrictions lapse (or in the taxable year of the award if, at that time, the participant had filed a timely election to accelerate recognition of income).

Restricted Stock Units. A participant who receives an award of RSUs will recognize ordinary income equal to the amount of any cash received and the fair market value of any shares issued and received at the time of and as a result of vesting. We are entitled to an income tax deduction in an amount equal to the ordinary income that the participant recognizes.

SARs. A participant who exercises a SAR will recognize ordinary income upon the exercise equal to the amount of any cash received and the fair market value of any shares received as a result of the exercise. We are entitled to an income tax deduction in an amount equal to the ordinary income that the participant recognizes upon the exercise of the SAR.

Performance Units, Performance Shares and Other Awards. In the case of an award of performance unit awards, performance share awards, or other stock-based awards, the participant would generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment. In that taxable year, we would be entitled to a federal income tax deduction in an amount equal to the ordinary income that the participant has recognized.

Section 409A. Section 409A of the Internal Revenue Code provides special tax rules applicable to programs that provide for a deferral of compensation. Failure to comply with those requirements will result in accelerated recognition of income for tax purposes along with an additional tax equal to 20% of the amount included in income, and interest on deemed underpayments in certain circumstances. While certain awards under the EIP could be subject to Section 409A, the EIP has been drafted to comply with the requirements of Section 409A, where applicable.


PROG Holdings, Inc. 2022 Proxy Statement						19


						Matters To Be Voted On

Shares Awarded under the EIP

All future awards will be made at the discretion of the Compensation Committee. Therefore, we cannot determine future benefits for any other awards under the EIP at this time. The table below shows awards granted under the EIP for fiscal year 2021.


Name and Position	2021 Incentive Award Value on Grant Date		# of Options Granted	# of RSAs Granted	# of RSUs Granted	# of PSUs Granted
Steven A. Michaels	$	4,413,345	64,710	23,460	—	46,890
President and Chief Executive Officer
Curtis L. Doman	$	1,654,541	24,270	8,790	—	17,580
Chief Innovation Officer
Brian J. Garner	$	903,619	13,260	4,800	—	9,600
Chief Financial Officer
Marvin A. Fentress	$	852,720	12,510	4,530	—	9,060
General Counsel and Corporate Secretary
All current executive officers as a group (10 persons)	$	10,754,135	149,934	64,395	—	109,452
All current directors, who are not executive officers, as a group	$	889,310	—	—	18,637	—
All employees, excluding current executive officers, as a group	$	44,249,393	—	229,476	208,138	475,429

Approval by Shareholders

Assuming a quorum is present, the proposal to approve the EIP Amendment will be approved if the votes cast by holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the proposal exceed the votes cast against the proposal.

Our Board of Directors recommends that you vote “FOR” the Amendment to the PROG Holdings, Inc. Amended and Restated 2015 Equity and Incentive Plan.


20						PROG Holdings, Inc. 2022 Proxy Statement


Matters To Be Voted On

Proposal 5:
Amendment to the PROG Holdings, Inc. Employee Stock Purchase Plan

We are seeking your vote to approve an amendment (the “ESPP Amendment”) to the PROG Holdings, Inc. Employee Stock Purchase Plan, as amended and restated (the “ESPP”), which will increase the number of shares of common stock authorized for issuance under the ESPP in order to permit us to continue to offer this important incentive and retention program to our employees. The Board of Directors, upon the recommendation of the Compensation Committee, approved and adopted the ESPP Amendment on April 24, 2022, subject to shareholder approval.

The primary purpose of the ESPP is to encourage ownership of our common stock by eligible employees of the Company and certain of its subsidiaries. Specifically, the ESPP provides eligible employees an opportunity to use payroll deductions to purchase shares of our common stock on periodic purchase dates at a 15% discount to fair market value. The Compensation Committee believes that the ESPP is a valued benefit for our eligible employee base. We believe that allowing employees to purchase shares of our common stock through the ESPP motivates high levels of performance and provides an effective means of encouraging employee commitment to our success, aligning our employees’ interests with those of our shareholders, and recruiting new employees.

As of April 11, 2022, only 37,270 shares of common stock remain available for issuance under the ESPP. To ensure that the Company has an appropriate number of shares available for issuance under the ESPP for regular, anticipated issuances for offering periods beginning after June 30, 2022, we are asking shareholders to approve an increase in the number of shares of common stock available for issuance under the ESPP by 500,000 shares, from 200,000 shares to 700,000 shares.

If shareholders do not approve the ESPP Amendment, the ESPP Amendment will not become effective, the ESPP will continue in full force and effect, and we may continue to grant awards under the ESPP, subject to its terms, conditions and limitations, using the shares remaining available for issuance thereunder. Because our executive officers are eligible to participate in the ESPP, they may be considered to have an interest in this proposal.

Background of the ESPP and the ESPP Amendment

The ESPP was initially approved by our shareholders at our 2018 Annual Meeting of Shareholders. An amendment to the ESPP was then approved by our shareholders at our 2021 Annual Meeting of Shareholders to allow officers of the Company who are subject to the disclosure requirements of Section 16(a) of the Exchange Act to participate in the ESPP.

As shareholders may recall, we stated in our proxy materials related to last year’s amendment that we believed we had sufficient shares available under the ESPP for the next two-to-three year period. However, like other companies in our industry, our share price has been negatively affected by current macroeconomic impacts, including the continuing effects of COVID-19, a steep increase in inflation, the recent conflict in Ukraine and the economic uncertainty created by the expiration of government stimulus payments, enhanced unemployment benefits and enhanced child tax credits (all of which provided significant liquidity and other benefits to many of the customers who we serve). The unanticipated, sharp decrease in our share price to prices lower than the forecast used in the burn-rate analysis and modeling we conducted in connection with the ESPP amendment last year has resulted in a depletion of our ESPP share reserve more rapidly than expected. In addition, the number of employees participating in the ESPP has remained high, with 400 participating in the ESPP at the beginning of 2022. We expect the increase in the number of shares reserved for future issuance described in this proposal will allow us to continue to use the ESPP to incentivize high levels of performance, and attract and retain employees and align their interests with those of our shareholders.


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						Matters To Be Voted On

We also recognize that equity compensation programs, such as the ESPP, dilute shareholder equity and need to be used judiciously. The dilution of shareholder equity arising from the ESPP has been relatively small, due in part to the fact that the ESPP has limits on both the number of shares each participating employee may purchase in any given offering period, as well as an aggregate, annual dollar limit on the number of shares each participating employee may purchase under the ESPP. In addition, one of the benefits of our recent share repurchase programs has been to offset the dilution of our equity programs, such as the ESPP. Our Board of Directors approved increasing our share repurchase program from $300 million to $1.0 billion in November 2021. Promptly thereafter, we commenced a modified “Dutch Auction” tender offer, pursuant to which we repurchased approximately $425 million of our common stock in December 2021. Beyond the shares repurchased in the tender offer, we repurchased another approximately $142 million of our common stock in 2021 and approximately $78 million of our common stock during the first quarter of 2022. As of April 11, 2022, these actions have resulted in the Company repurchasing approximately 17% of its outstanding shares, as compared to the number of shares outstanding on December 1, 2021. We believe the anti-dilutive impact of these actions sufficiently offset the increase in the number of shares to be authorized for issuance pursuant to the ESPP Amendment. We also believe that the ESPP Amendment is designed to be consistent with competitive market practice and our historical share utilization has been prudent and mindful of shareholder interests.

In its determination to approve the proposed increase of 500,000 shares of common stock authorized for issuance under the ESPP, the Compensation Committee reviewed an analysis prepared by Exequity LLP, its independent compensation consultant, which included an examination of our potential dilution, burn rate, overhang and historical ESPP issuance practices. Based on this analysis, as well as further consideration and discussion, the Compensation Committee believes that the proposed increase of 500,000 shares of common stock authorized for issuance under the ESPP should result in an adequate number of shares of common stock for future issuance for approximately eight-to-ten years; however, this forecast includes several assumptions and there are several factors that could impact the Company’s future common stock issuances, including, but not limited to, employee participation levels remaining consistent with historical levels, equity compensation levels offered by our peer group, and the impact of macroeconomic factors such as those described above and other factors on the future price of our shares.

For purposes of clarity, the key provisions of the ESPP are not being amended in any material respect other than to reflect the proposed increase in the number of shares authorized for issuance pursuant to the ESPP Amendment.

Summary of Material Terms of the ESPP

The following summary of the ESPP is qualified in its entirety by reference to the complete text of the ESPP, as amended by the ESPP Amendment, which is attached to this Proxy Statement as Appendix C. Capitalized terms used in this summary, but not otherwise defined in this summary, shall have the respective meanings ascribed to them in the ESPP, as amended by the ESPP Amendment.

Shares Available for Issuance

The aggregate number of shares that will be available for issuance pursuant to the ESPP Amendment is 700,000 shares, of which approximately 537,270 shares will be available for issuance immediately following the approval of the ESPP Amendment by the Company's shareholders. The shares made available for sale under the ESPP may be authorized but unissued shares, treasury shares, reacquired shares reserved for issuance under the ESPP, or shares acquired on the open market. As of April 11, 2022, the aggregate number of shares of common stock available for issuance under the ESPP was 37,270.


22						PROG Holdings, Inc. 2022 Proxy Statement


Matters To Be Voted On

Administration

The ESPP is administered by the Compensation Committee, although the Compensation Committee may, where permitted by the terms of the ESPP and applicable law, delegate administrative tasks under the ESPP to the services of an agent and/or Company employees to assist with the administration of the ESPP. Subject to the provisions of the ESPP and applicable law, the Compensation Committee or its delegate has full and exclusive authority to interpret the terms of the ESPP and determine eligibility to participate in the ESPP. In all cases, the ESPP is required to be administered in such a manner so as to comply with applicable requirements of Section 423 of the Code. All determinations of the Compensation Committee are final and binding on all persons having an interest in the ESPP.

Eligibility

Employees eligible to participate in the ESPP for a given offering period generally include employees who are employed on the first day of the offering period, which is the enrollment date. Employees who have not been employed for at least six months or that customarily work 20 hours per week or less are not eligible to participate in the ESPP. As of April 11, 2022, the Company estimated it had 1,492 employees eligible to participate in the ESPP.

The Compensation Committee may, but is not required to, exclude from participation in the ESPP, certain employees who are “highly compensated employees” (within the meaning of Section 414(q) of the Code) and certain foreign employees. Finally, employees who own (or are deemed to own through attribution) 5% or more of the combined voting power or value of all our classes of stock or of one of our subsidiaries are not allowed to participate in the ESPP.

Employees may enroll in the ESPP by completing a payroll deduction form permitting the deduction of at least 1% but not more than 10% of their compensation. Eligible compensation includes base salary and wages paid to the employee, before deduction for any deferral contributions to any tax-qualified or nonqualified deferred compensation plan.

Such payroll deductions may be expressed as a whole number percentage and the accumulated deductions are applied to the purchase of shares on each semi-annual purchase date. However, a participant may not purchase more than 500 shares in each offering period and may not subscribe for more than $25,000 in fair market value of shares of our common stock (determined at the time the ability to purchase shares of our common stock is granted) during any calendar year. The Compensation Committee has the authority to change these limitations for any subsequent offering period, in compliance with the rules prescribed by the ESPP and Section 423 of the Code.

Offering Period, Purchase of Shares and Payroll Deductions

Under the ESPP, participants have the ability to purchase shares of our common stock at a discount during a series of successive offering periods, which commence and end on such dates as determined by the Compensation Committee or its delegate. Unless otherwise determined by the Compensation Committee or its delegate, each offering period will be six months in length. However, in no event may an offering period be longer than 27 months in length.

The purchase price of each share of our common stock under the ESPP is the lower of 85% of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85% of the closing trading price per share of our common stock on the purchase date, which occurs on the last trading day of each offering period.

Unless a participant has previously canceled his or her participation in the ESPP before the purchase date, the participant is deemed to have exercised his or her ability to purchase shares of our common stock in full as of each purchase date. Upon exercise, the participant purchases the number of whole shares that his or her accumulated payroll deductions will buy at the purchase price per share of our common stock, subject to the participation limitations listed above and shares available under the ESPP.


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						Matters To Be Voted On

A participant may cancel his or her payroll deduction authorization at any time prior to the end of the offering period. Upon cancellation, a participant will be paid his or her account balance in cash without interest. A participant may decrease (but not increase) his or her payroll deduction authorization once during any offering period. If a participant wants to increase or decrease the rate of payroll withholding, he or she may do so effective for the next offering period by submitting a new form before the offering period for which such change is to be effective; otherwise, a participant will automatically participate in the next offering period at the same rate of payroll withholding as in effect at the end of the prior offering period (so long as the participant remains eligible to participate in the ESPP).

Non-Transferability and Restrictions on Resale

A participant may not assign, transfer, pledge or otherwise dispose of (other than by will or the laws of descent and distribution) payroll deductions credited to a participant’s account or any rights to purchase shares of our common stock or to receive shares of our common stock under the ESPP, and during a participant’s lifetime, rights to purchase shares of our common stock in the ESPP shall be exercisable only by such participant. Any such attempt at assignment, transfer, pledge or other disposition will not be given effect.

Shares of our common stock purchased under the ESPP may not be sold, transferred or otherwise disposed of by a participant for a period of one year from the date the shares are purchased. The Compensation Committee may, in its sole discretion, place additional restrictions on the sale or transfer of our shares purchased under the ESPP by notice to the participants in advance of the offering period.

Termination of Eligibility

If an individual’s eligibility to participate in the ESPP terminates for any reason before the last day of the offering period, the termination will cause payroll deductions to cease immediately. If the eligible employee’s subscription account has a cash balance remaining when he or she terminates, this balance will be refunded to the eligible employee in cash (without interest) within 30 calendar days after the employee ceases to be eligible.

Change in Control or Occurrence of Significant Corporate Transactions

In the event of any increase or decrease in the number of issued shares of our common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the common stock, or any other increase or decrease in the number of shares of common stock effected without receipt of consideration by us, we will proportionately adjust the aggregate number of shares of our common stock offered under the ESPP, the number and price of shares which any participant has elected to purchase under the ESPP, and the maximum number of shares which a participant may elect to purchase in any single offering period. If there is a proposal to dissolve or liquidate the Company, then the ESPP will terminate immediately prior to the consummation of such proposed dissolution or liquidation, and any offering period then in progress will be shortened by setting a new purchase date to take place before the date of our dissolution or liquidation. We will notify each participant of such change in writing at least ten business days prior to the end of the new offering period. If we undergo a merger with or into another entity or a sale of all or substantially all of our assets or certain other corporate events, each outstanding right to purchase shares of our common stock will be assumed, or an equivalent right to purchase shares of common stock substituted, by the successor entity or the parent or subsidiary of the successor entity. If the successor entity refuses to assume the outstanding rights to purchase shares of our common stock or substitute equivalent rights, then any offering period then in progress will be shortened by setting a new purchase date to take place before the date of the proposed sale or merger. We will notify each participant of such change in writing at least ten business days prior to the end of the new offering period.

Qualification

The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. The ESPP is not subject to any provision of the Employee Retirement Income Security Act of 1974, as amended, nor is it qualified under Section 401(a) of the Code.


24						PROG Holdings, Inc. 2022 Proxy Statement


Matters To Be Voted On

Amendment and Termination

Our Board of Directors or the Compensation Committee may amend, suspend or terminate the ESPP at any time. However, no amendment may increase the number of shares of common stock available under the ESPP, change the employees eligible to participate, or cause the ESPP to cease to be an “employee stock purchase plan” within the meaning of Section 423 of the Code, without obtaining shareholder approval within 12 months before or after such amendment. If the ESPP is terminated before the scheduled expiration of any offering period, each participant’s account balance will be distributed to him or her in cash (without interest) as soon as administratively practicable.

Federal Income Tax Consequences

The following is a brief summary of the federal income tax consequences relating to the purchase and sale of stock under the ESPP for individuals who are both citizens and residents of the United States, under the assumption that the ESPP satisfies the requirements of Section 423 of the Code. Individual circumstances may change these results. This brief discussion is based on current U.S. federal income tax laws, regulations, and judicial and administrative interpretations. The following discussion does not set forth any tax consequences other than U.S. federal income tax consequences, including any state, local or foreign tax consequences that may apply.

Although after-tax amounts are used to purchase shares under the ESPP, a participant will not recognize taxable income upon the grant of the right to purchase shares at the start of an offering period or when he or she purchases shares under the ESPP. Generally, participants will recognize taxable income in the year in which such participant sells or otherwise disposes of the purchased shares (whether by sale, exchange or gift).

The tax consequences on a sale or disposition of shares of our common stock acquired under the ESPP depend in part on whether the disposition occurs before or after expiration of a statutory holding period, which is the period ending on the later of (i) two years after the first day of the offering period in which such shares were acquired (the “offering date”) and (ii) one year after the date such shares were acquired. If the shares are sold or otherwise disposed of after the holding period expires, or if a participant dies while owning the shares, then it is a “qualifying” disposition. If the shares are sold before the holding period expires, then it is a “disqualifying” disposition.

If a participant makes a “qualifying” disposition of stock, the participant will have ordinary income from the sale equal to the lesser of:

▪the fair market value of the shares on the offering date, less the purchase price of the shares, or

▪the fair market value of the shares on the date of the disposition (or the date of the participant’s death, if applicable), less the purchase price of the shares.

The Company reports the ordinary income that a participant incurs at the time of sale on the participant’s Form W-2. Individuals who do not receive a Form W-2 from us are still responsible for reporting all income.

If a participant makes a “qualifying” disposition of stock, the ordinary income, if any, that such participant recognized on the disposition of the shares is added to the participant’s basis in the shares, except where the disposition is due to the participant’s death. In that case, any ordinary income recognized on the disposition is not added to the participant’s basis in the shares. After increasing the basis in the shares by the ordinary income recognized, any additional gain realized on the sale or disposition is treated as a long-term capital gain. If the participant sells shares for less than the purchase price, such participant will not have ordinary income. Instead, the participant will realize a capital loss equal to the difference between the sales price and his or her purchase price.

If a participant makes a “disqualifying” disposition, the participant will have ordinary income upon the sale of the shares equal to the excess of the value of such shares on the date the shares were purchased over the purchase price of the shares (this amount must be recognized even if the value of the shares has decreased since the date


PROG Holdings, Inc. 2022 Proxy Statement						25


						Matters To Be Voted On

the shares were purchased). This amount is added to the participant’s basis in the shares. After increasing the basis by this amount, any gain realized on the disposition in excess of the basis will be treated as a capital gain or loss. Whether such capital gain or loss will be long-term or short-term will depend on how long the shares were held (e.g., long-term capital gain or loss if the shares were held for over one year).

The Company does not receive any U.S. federal income tax deduction as a result of issuing shares pursuant to the ESPP, except upon a sale or disposition of shares by a participant prior to the expiration of the statutory holding period. In that case, the Company will generally be entitled to a U.S. federal income tax deduction equal to the amount of ordinary income recognized by such participant with respect to the sale or disposition of the shares, subject to Section 162(m) of the Code.

Shares Purchased under the ESPP

The amounts of future purchases under the ESPP are not determinable because participation is voluntary, participation levels depend on each participant’s elections and the restrictions of Section 423 of the Code and the ESPP, and the per-share purchase price depends on the future value of our common stock. Only certain employees of the Company and its participating subsidiaries are eligible to participate in the ESPP. Non-employee directors are not eligible to participate in the ESPP. The following table shows the number of shares of our common stock that have been purchased by employees, including our named executive officers, since the inception of the ESPP on March 2, 2018 through December 31, 2021, the most recent ESPP purchase date to have occurred.


Name and Position									Aggregate Number of Shares Purchased (#)
Steven A. Michaels									500
President and Chief Executive Officer
Curtis L. Doman									—
Chief Innovation Officer
Brian J. Garner									1,870
Chief Financial Officer
Marvin A. Fentress									—
General Counsel and Corporate Secretary
All current executive officers as a group (10 persons)									5,174
All current directors, who are not executive officers, as a group									—
All employees, excluding current executive officers, as a group									157,556

Adoption of the ESPP Amendment

Assuming a quorum is present, the proposal to approve the ESPP Amendment will be approved if the votes cast by holders of shares of common stock present, in person or by proxy, at the Annual Meeting in favor of the proposal exceed the votes cast against the proposal.

Our Board of Directors recommends that you vote “FOR” the Amendment to the PROG Holdings, Inc. Employee Stock Purchase Plan.


26						PROG Holdings, Inc. 2022 Proxy Statement

Governance

Nominees to Serve as Directors


									Biographical Information: Ms. Betty was the owner and Chief Executive Officer of the Atlanta Dream of the WNBA from 2009 to 2011. She also founded The Tradewind Group, an incubator company, where she worked until 2007. Her other experience includes serving as Executive Vice President and Partner of ScottMadden from 1993 to 2000, where she worked on international mergers and acquisitions, and working at Ernst & Young LLP from 1989 to 1993, including serving as one of the first women admitted to the partnership. Ms. Betty has served on the Board of Directors for Scott Madden since February 2019, and also serves on the Board of Advisors for Synergy Laboratories, a private, for-profit company. Qualifications: Among other qualifications, Ms. Betty brings over 30 years of business management and consultancy experience to our Board of Directors. Her leadership positions in the Atlanta community include serving on the boards of the Chick-fil-A Foundation, the Alexander-Tharpe Fund, Georgia Institute of Technology, and the Board of Councilors of the Carter Center, as well as serving on the Board of Trustees for the Georgia Institute of Technology Athletic Association. She has also served on the boards of the Children’s Health Care of Atlanta Foundation, YMCA of Metropolitan Atlanta and Big Brothers Big Sisters of Atlanta. These positions, combined with Ms. Betty's service on the Board of Directors of Scott Madden and Board of Advisors for Synergy Laboratories have provided her with management, entrepreneurial, financial and accounting experience, which are utilized by our Board of Directors. These skills and experience qualify her to serve on our Board of Directors.

Kathy T. Betty

Age: 66 Director Since: August 2012 Committees: Compensation; Nominating & Corporate Governance (Chair)


									Biographical Information: Mr. Curling has been the managing principal of New Kent Capital LLC, a family-run investment business, and New Kent Consulting LLC, a privacy and mergers and acquisitions consulting business, since March 2009. From 1997 until September 2008, Mr. Curling held various executive positions at ChoicePoint Inc., a provider of identification and credential verification services that was sold to Reed Elsevier in 2008, including serving as President from April 2002 to September 2008, as Chief Operating Officer from 1999 to September 2008 and as Executive Vice President, Chief Financial Officer and Treasurer from 1997 to May 1999. Mr. Curling also served as a director of ChoicePoint Inc. from May 2000 to September 2008. Mr. Curling served on the Board of Directors of CoreLogic, a New York Stock Exchange listed company providing global property information, analytics and data-enabled services to financial services organizations and real estate professionals, until June 2021, when it became a private company. Qualifications: Among other qualifications, Mr. Curling brings substantial experience in managing and operating businesses with privacy, data analytics and other data-enabled matters to our Board of Directors. His prior service as a chief financial officer provides him with valuable accounting and financial expertise, and his consulting experience provides him with significant mergers and acquisitions expertise, all of which is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

Douglas C. Curling

Age: 67 Director Since: January 2016 Committees: Audit; Compensation (Chair)


PROG Holdings, Inc. 2022 Proxy Statement						27


						Governance


									Biographical Information: Ms. Day has been the President and Chief Executive Officer of Citizens Bancshares Corporation and Citizens Trust Bank since February 2012. Citizens Bancshares Corporation was a publicly held corporation until January 2017. She served as Chief Operating Officer and Senior Executive Vice President of Citizens Trust Bank from February 2003 to January 2012 and served as its acting President and Chief Executive Officer from January 2012 to February 2012. She previously served as the Executive Vice President and Chief Operating Officer and in other capacities at Citizens Federal Savings Bank of Birmingham from 1993 until its acquisition by Citizens Trust Bank in 2003. Before joining Citizens Trust Bank, Ms. Day served as an audit manager for KPMG. Ms. Day also serves on the board of directors of Primerica, Inc., the National Banker’s Association, the Metro Atlanta Chamber, and the Atlanta Area Council of Boy Scouts of America. She is also a member of the Rotary Club of Atlanta, the Georgia Society of CPAs, and the AICPA. Qualifications: Among other qualifications, Ms. Day brings significant management and financial experience to our Board of Directors. Her experience in multiple senior executive leadership positions and service on other boards, provide her with accounting and financial expertise, which are utilized by our Board of Directors. In addition, the customer base served by Citizens Bancshares Corporation is very similar to that served by the Company, giving her a great understanding of their buying habits, the products they purchase and effective marketing and communication methods. These skills and experiences qualify her to serve on our Board of Directors.

Cynthia N. Day

Age: 56 Director Since: October 2011 Committees: Audit (Chair); Compensation


									Biographical Information: Mr. Doman currently serves as our Chief Innovation Officer, and is a co-founder of Progressive Leasing. Previously, he served as Chief Technology Officer of Progressive Leasing from 1999 until December 2017 and Chief Product Officer from January 2018 until December 2019. He was also President of IDS, Inc. from September 1993 until October 2015. Qualifications: Among other qualifications, Mr. Doman brings significant experience in technology and data analytics matters to our Board of Directors. Mr. Doman’s intimate knowledge of our Progressive Leasing segment, including as the creator of the dynamic decision-making engine used by that business in evaluating decisioning criteria for our lease products, is utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

Curtis L. Doman

Age: 49 Director Since: August 2015 Committees: N/A


28						PROG Holdings, Inc. 2022 Proxy Statement


Governance


									Biographical Information: Mr. Martinez is the Co-Founder and President of Financial Services for EVERFI, Inc., an international technology company driving social change on the most challenging issues affecting society through online education, which was founded in 2008. EVERFI’s courses are implemented in K-12 schools, the workplace, and communities nationwide, reaching more than seven million learners each year. As a leader in digital learning, Mr. Martinez oversees the development of a variety of educational programs related to financial wellness, healthcare literacy, data science, and mental health, among other subjects. Mr. Martinez is a thought leader and frequent speaker and author on topics related to systemic inequality. He also serves on the board of the JumpStart Coalition for Personal Financial Literacy in Washington, D.C. Qualifications: Among other qualifications, Mr. Martinez brings consumer financial services regulatory experience to our Board, having worked closely with the Consumer Financial Protection Bureau and multiple states’ Attorneys General on financial literacy and other matters. He also has expertise leading large-scale strategic partnerships with global financial services companies, and utilizing digital technologies and data to deliver content and messaging to a wide range of businesses and consumers. Our Board of Directors utilizes these skills and experiences, and they qualify Mr. Martinez to serve on our Board of Directors.

Ray M. Martinez

Age: 48 Director Since: September 2021 Committees: Audit; Nominating & Corporate Governance


									Biographical Information: Mr. Michaels has served as our Chief Executive Officer since December 1, 2020. He was also named President of the Company as of April 1, 2021. From July 31, 2020 through November 2020, Mr. Michaels served as the Chief Executive Officer of the Company’s Progressive Leasing operating segment. Mr. Michaels previously served as the Company’s Chief Financial Officer and President of Strategic Operations from February 2016 until July 31, 2020, President of the Company from April 2014 until February 2016, Vice President, Strategic Planning & Business Development from 2013 until April 2014, Vice President, Finance from 2012 until April 2014 and Vice President, Finance, Aaron’s Sales & Lease Ownership Division from 2008 until 2011. Qualifications: Among other qualifications, Mr. Michaels brings significant operational and financial experience to our Board of Directors. His considerable experience in senior management, and his leadership and intimate knowledge of our business provide him with strategic and operational expertise generally and for the Company specifically, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

Steven A. Michaels

Age: 50 Director Since: November 2020 Committees: N/A


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						Governance


									Biographical Information: Mr. Robinson has served as our Chairman since April 2014. From November 2012 until his appointment as Chairman, Mr. Robinson was the Company’s independent lead director. Mr. Robinson started his career at AT&T in 1968, and prior to his retirement in 2003, he held several executive positions, including President of the Southern Region, its largest region, President and Chief Executive Officer of AT&T Tridom, Vice President of Operations for AT&T Business Customer Care, Vice President of AT&T Outbound Services, and Vice President of AT&T Public Relations. Mr. Robinson is also a director of Acuity Brands, Inc., a lighting solutions company, American Airlines Group Inc., a holding company operating various commercial airlines (including American Airlines and US Airways), and Fortress Transportation and Infrastructure Investors LLC, an investor in infrastructure and equipment for the transportation of goods and people, all of which are public companies. Since 2003, Mr. Robinson has also served as a director and non-executive Chairman of Citizens Bancshares Corporation and its subsidiary, Citizens Trust Bank, the largest African American-owned bank in the Southeastern United States and the nation’s second largest. As of January 2017, Citizens Bancshares Corporation's stock is traded only on over-the-counter markets. Its subsidiary, Citizens Trust Bank, is not a publicly traded company. Mr. Robinson previously served as a director of RailAmerica, Inc. from 2010 to 2012 and Avnet, Inc. from 2000 to 2018. Mr. Robinson has also been Vice Chairman of the East Lake Community Foundation in Atlanta, Georgia since November 2003. Qualifications: Among other qualifications, Mr. Robinson brings experience in senior management and board service for numerous public companies to our Board of Directors. His service on the boards of a number of organizations of varying sizes provides him with extensive operational skills and governance expertise, which are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

Ray M. Robinson

Age: 74 Director Since: November 2002 Committees: Compensation; Nominating & Corporate Governance


									Biographical Information: Ms. Sheu has served as the Global Director, Digital and Direct-to-Consumer Marketing for Google, where she leads digital marketing for Google Store and drives Google's direct-to-consumer marketing vision and agenda for Google Devices & Services, since September 2020. Prior to that, she served as the Senior Vice President of North America Marketing at Ancestry, Inc. from 2017 to 2020. Ms. Sheu has also served as Vice President, Global Digital & Customer Marketing for GAP, Inc., where she led the central marketing organization and managed digital and mobile transformation initiatives across the company's omnichannel brands (Gap, Old Navy, Banana Republic, Athleta, and Intermix). Ms. Sheu has also served as Senior Vice President and Chief Marketing Officer for Care.com, the leading online marketplace for care services. Before joining Care.com, Ms. Sheu spent ten years in management positions in the digital gaming and entertainment industry, heading marketing at Disney Interactive, Sony Network Entertainment, and EA Online. Qualifications: Among other qualifications, Ms. Sheu has nearly twenty years of experience transforming marketing focused organizations to adapt to rapidly changing consumer and technology trends. She has significant expertise in the areas of data analytics and digital marketing, as well as optimizing marketing spending across multiple channels and platforms. She also has a proven record of driving brand engagement and loyalty. Our Board of Directors utilizes these skills and experiences, and they qualify Ms. Sheu to serve on our Board of Directors.

Caroline Sheu

Age: 48 Director Since: September 2021 Committees: Audit; Nominating & Corporate Governance


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									Biographical Information: Mr. Smith served in a variety of senior management positions at Wells Fargo & Company, most recently serving as Executive Vice President, Head of Digital & Direct Virtual Channels from June 2014 to September 2020, where he was responsible for enterprise digital strategy, capabilities and channels along with enterprise responsibility for retail contact centers (phone, email, chat) and served on the Wells Fargo & Company Management Committee. Mr. Smith has also served as a founding member of the board of directors of Akoya LLC, a privately-held financial data access network that allows aggregators and fintech companies to directly connect with financial institutions to securely obtain consumer-permissioned financial data. Mr. Smith is also an external advisor to Bain & Company, a management consulting firm. Mr. Smith previously served as a member of the board of directors of clearXchange from 2011 to 2015. Mr. Smith is also a mentor for the Miller Center for Social Entrepreneurship at Santa Clara University. Qualifications: Among other qualifications, Mr. Smith brings significant fintech expertise to our Board of Directors, particularly as a leader and pioneer with over 30 years’ experience leveraging emerging technologies and data in the financial services industry, including the development of the first ever Internet Banking offering in 1995 and development of many other industry firsts including mobile banking, ApplePay, and Zelle, a digital payments network started by a consortium of U.S. banks, including Bank of America, JPMorgan Chase and Wells Fargo. His experience in senior executive leadership positions, as well as his consulting experience, driving digital strategy, transformation and product development with respect to consumer financial service offerings are utilized by our Board of Directors. These skills and experiences qualify him to serve on our Board of Directors.

James P. Smith

Age: 55 Director Since: May 2021 Committees: Audit; Nominating & Corporate Governance


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Executive Officers Who Are Not Directors

Set forth below are the names and ages of each current executive officer of the Company who is not a director. All positions and offices with the Company held by each such person are also indicated.


			Name (Age)						Position with the Company and Principal Occupation During the Past Five Years
			Marvin A. Fentress (61)						General Counsel and Corporate Secretary since December 2020. Previously, Mr. Fentress served as General Counsel and Chief Compliance Officer of the Company's Progressive Leasing operating segment from 2012 through November 2020.
			Debra Fiori (52)						Chief People Officer since April 2021. Prior to joining the Company, Ms. Fiori served as Corporate Senior Vice President and Chief People Officer of Parsons Corporation, a leading provider of innovative technology-driven solutions in the defense, intelligence and critical infrastructure markets. In this role, Ms. Fiori was responsible for leadership development, succession planning, organizational design, reward systems, talent acquisition, and human resources operations.
			Brian J. Garner (42)						Chief Financial Officer since December 2020. Previously, Mr. Garner served in the Company’s Progressive Leasing operating segment as Senior Vice President of Finance and Accounting from January 2019 through November 2020, Vice President of Finance and Accounting from March 2015 through December 2018, and Controller from 2012 to February 2015.
			Mike Giordano (49)						Chief Commercial Officer since January 2021. Prior to joining the Company, Mr. Giordano served as Vice President, U.S. Sales, of Samsung Electronics America from August 2018 to January 2021, and as Vice President of Regional Sales from March 2014 to August 2018. In these roles at Samsung Electronics America, Mr. Giordano was responsible for managing the development and implementation of marketing and sales strategies for driving in-store and e-commerce home appliance sales to both national and regional retail partners and directly to consumers.
			Ben Hawksworth (45)						Chief Product and Technology Officer since December 2020. Previously, Mr. Hawksworth served as Chief Product and Technology Officer of the Company’s Progressive Leasing operating segment from January 2018 through November 2020. Prior to joining the Company, Mr. Hawksworth served as Senior Vice President and Chief Information Officer, Global Business Solutions, of First Data Corporation from May 2016 to January 2018.
			Ryan Ray (47)						Chief Administrative Officer since December 2020. Mr. Ray also continues to serve as President of the Company’s Vive Financial operating segment, a position he was appointed to in May 2016. He served as Chief Operations Officer of the Company’s Progressive Leasing operating segment from January 2015 to April 2016.
			Matt Sewell (47)						Vice President, Financial Reporting and Principal Accounting Officer since December 2020. Previously, Mr. Sewell served as Director of Financial Reporting of the Company from October 2016 through November 2020. Prior to joining the Company, Mr. Sewell served as Director of Financial Reporting of Novelis Inc. from June 2014 to October 2016.
			Trevor Thatcher (47)						Chief Operations Officer since December 2020. Previously, Mr. Thatcher served as Vice President of Operations of the Company’s Progressive Leasing operating segment from February 2015 through November 2020.


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Composition, Meetings and Committees of the Board of Directors

Our Board of Directors is currently comprised of nine directors having terms expiring at the Annual Meeting. Each of our directors will continue to hold office until the expiration of his or her term and until his or her successor is duly elected and qualified or until his or her earlier resignation, removal from office or death.

Our Corporate Governance Guidelines include categorical standards adopted by our Board of Directors to determine director independence that meet the listing standards of the New York Stock Exchange, or “NYSE.” Our Corporate Governance Guidelines also require that at least a majority of our Board of Directors be “independent,” a requirement that is more stringent than the NYSE listing requirement that a majority of the Board of Directors be independent, as determined under the rules of the NYSE. Our Board of Directors has affirmatively determined that all of our directors are “independent” in accordance with NYSE listing requirements and the requirements of our Corporate Governance Guidelines, other than Mr. Michaels, our President and Chief Executive Officer, and Mr. Doman, our Chief Innovation Officer.

Our Board of Directors currently has three standing committees consisting of an Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. From time to time, our Board of Directors may establish ad-hoc committees at its discretion. Our Board of Directors has adopted a charter for each of its standing committees, copies of which are available on the Investor Relations section of our website located at investor.progholdings.com The current members of each committee are identified in the table below:

Director

Audit
Committee*

Compensation
Committee

Nominating and
Corporate
Governance Committee

Kathy T. Betty

Douglas C. Curling

Cynthia N. Day

Ray M. Martinez

Ray M. Robinson

Caroline S. Sheu

James P. Smith

Number of Meetings in Fiscal Year 2021

Member

Chair


			*			Each of Ms. Day and Mr. Curling has been designated as an “audit committee financial expert” as defined by Securities and Exchange Commission, or "SEC", regulations.

Meetings

Our Board of Directors held thirteen meetings during 2021. The number of meetings held by each of our committees in 2021 is shown in the table above. Each of our directors attended 75% or more of the total of all meetings of our Board of Directors and the committees on which he or she served during 2021 that occurred during the time when he or she served as a director.

In addition, our Board of Directors established a Transaction Committee during 2021 to provide oversight and facilitate additional communication with senior management in connection with the Company's commencement of its modified "Dutch Auction" tender offer to repurchase up to $425 million of our common stock and the $600 million senior notes issuance to fund such tender offer. Our Board of Directors also monitored developments regarding the tender offer and senior notes issuance between regularly scheduled meetings and, in addition to regularly scheduled meetings of our Board of Directors, individual directors each made themselves available for


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consultation with management on an ad hoc basis with respect to the tender offer and senior notes issuance, as well as other matters throughout the year. Members of our Board of Directors who served on the Transaction Committee were not provided additional compensation for such service.

It is our policy that directors are expected to attend the annual meeting of shareholders in the absence of a scheduling conflict or other valid reason. Due to the COVID-19 pandemic, all of the individuals serving on our Board of Directors on the date of the 2021 Annual Meeting of Shareholders, June 22, 2021, attended the meeting telephonically, except for Messrs. Michaels and Robinson, who attended the meeting in person.

The non-management and independent members of our Board of Directors meet frequently in executive session, without management present. Mr. Robinson, the Chairman of our Board of Directors, chairs these meetings.


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Committees


Audit Committee									Responsibilities: The function of the Audit Committee is to assist our Board of Directors in fulfilling its oversight responsibility relating to: ▪the integrity of the Company’s consolidated financial statements; ▪the financial reporting process and the systems of internal accounting and financial controls; ▪the performance of the Company’s internal audit function and independent auditors; ▪the independent auditors’ qualifications and independence; ▪the Company’s compliance with ethics policies (including oversight and approval of related party transactions and reviewing and discussing certain calls to the Company’s ethics hotline and the Company’s investigation of and response to such calls) and legal and regulatory requirements; ▪the adequacy of the Company’s policies and procedures to assess, monitor and manage business risks including financial, regulatory and cybersecurity risks and its corporate compliance programs, including receiving quarterly reports related to such risks and programs; and ▪the adequacy of the Company's information security and privacy program and cybersecurity initiatives. The Audit Committee is directly responsible for the appointment, compensation, retention, and termination of our independent auditors, who report directly to the Audit Committee, and for recommending to our Board of Directors that the Board recommend to our shareholders that the shareholders ratify the retention of our independent auditors. In connection with its performance of these responsibilities, the Audit Committee regularly receives reports from and holds discussions with Company management, the independent auditors, and leaders from the Company’s audit services, compliance, information security, legal and enterprise risk management departments and functional areas. Many of those discussions are held in executive session with the Audit Committee.

Members: Ms. Day (Chair), Mr. Curling, Mr. Martinez, Ms. Sheu and Mr. Smith Number of Meetings: 8 Each member of the Audit Committee satisfies the independence requirements of the NYSE and SEC rules applicable to audit committee members, and each is financially literate. Our Board of Directors has designated each of Ms. Day and Mr. Curling as an “audit committee financial expert” as defined by SEC regulations.


Compensation Committee									Responsibilities: The purpose of the Compensation Committee is to assist our Board of Directors in fulfilling its oversight responsibilities relating to: ▪executive and director compensation; ▪equity compensation plans and other compensation and benefit plans; and ▪other significant human resources matters. The Compensation Committee has the authority to: ▪review and approve performance goals and objectives for the named executive officers in connection with the Company’s compensation programs; ▪evaluate the performance of the named executive officers, in light of such performance goals and objectives and other matters, for compensation purposes; ▪determine the compensation of the named executive officers, including our President and Chief Executive Officer, based on such evaluations and other matters; ▪approve grants of equity incentives; and ▪consider from time to time, and recommend to our Board of Directors, changes to director compensation. Compensation Committee Interlocks and Insider Participation For the year ended December 31, 2021, the Compensation Committee consisted of Mses. Betty and Day and Messrs. Curling and Ray Robinson, each of whom our Board of Directors determined was independent in accordance with NYSE listing requirements. No member of the Compensation Committee during 2021 is or was formerly an officer or employee of the Company or any of its subsidiaries or was a related person in a related person transaction with the Company required to be disclosed under applicable SEC rules.

Members: Mr. Curling (Chair), Ms. Betty, Ms. Day, Mr. Robinson Number of Meetings: 6 Each member of the Compensation Committee satisfies the independence requirements of the NYSE applicable to compensation committee members and is a non-employee director under Rule 16b-3 of the Securities Exchange Act of 1934, or the “Exchange Act.”


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Nominating and Corporate Governance Committee									Responsibilities: The purpose of the Nominating and Corporate Governance Committee is to assist our Board of Directors in fulfilling its responsibilities relating to: ▪board and committee membership, organization, and function; ▪director qualifications and performance; ▪management succession; and ▪corporate governance. The duties of the Nominating and Corporate Governance Committee include: ▪from time to time, identifying and recommending to our Board of Directors individuals to be nominated for election as directors; ▪developing and recommending to our Board of Directors for adoption corporate governance principles applicable to the Company; ▪reviewing the Company's Environmental, Social and Governance, or "ESG" programs and disclosures, and monitoring and discussing ESG developments and trends; ▪discussing the self-evaluation process for the Board of Directors and its committees; ▪receiving updates about the Company's directors' and officers' insurance coverage; ▪reviewing the Company's Code of Conduct and recommending any changes to the Code to the Board of Directors; ▪discussing the Company's governmental and regulatory affairs programs and initiatives; and ▪receiving updates about the Company's director orientation and continuing education offerings.

Members: Ms. Betty (Chair), Mr. Martinez, Mr. Robinson, Ms. Sheu, and Mr. Smith Number of Meetings: 6 Each member of the Nominating and Corporate Governance Committee satisfies the independence requirements of the NYSE.

Assessment of Director Candidates and Required Qualifications

The Nominating and Corporate Governance Committee is responsible for considering and recommending to our Board of Directors nominees for election as director at our annual meeting of shareholders and nominees to fill any vacancy on our Board of Directors. Our Board of Directors, after taking into account the assessment provided by the Nominating and Corporate Governance Committee, is responsible for considering and recommending to our shareholders nominees for election as director at our annual meeting of shareholders. In accordance with our Corporate Governance Guidelines, both the Nominating and Corporate Governance Committee and our Board of Directors, in evaluating director candidates, consider the experience, talents, skills and other characteristics of each candidate and our Board of Directors as a whole in assessing potential nominees to serve as director.

We believe that, at a minimum, a director should have the highest personal and professional ethics, moral character and integrity, demonstrated accomplishment in his or her field and the ability to devote sufficient time to carry out the duties of a director. To help ensure the ability to devote sufficient time to board matters, no director may serve on the board of more than four other public companies while continuing to serve on our Board of Directors, and no director that serves as chief executive officer of another company may serve on the board of more than two other public companies while continuing to serve on our Board of Directors, unless our board determines in its business judgment that such simultaneous service will not impair the director's ability to serve on our Board of Directors, and that such simultaneous service is otherwise in the best interests of the shareholders.

In addition to these minimum qualifications, our Board of Directors may consider all information relevant in their business judgment to the decision of whether to nominate a particular candidate for a particular board seat. These factors may include a candidate’s professional and educational background, reputation, industry knowledge and business experience and the relevance of those characteristics to us and our Board of Directors. In addition, candidates will be evaluated on their ability to complement or contribute to the mix of talents, skills and other characteristics needed to maintain the effectiveness of our Board of Directors and their ability to fulfill the responsibilities of a director and of a member of one or more of the standing committees of our Board of Directors.


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We also believe that new ideas and fresh perspectives are critical to a forward-looking and strategic Board of Directors, as is the institutional knowledge and deep understanding of the Company’s business and industries that longer-tenured directors offer. Our Corporate Governance Guidelines therefore do not contain established term limits, but do provide for a general policy that no person may be nominated for election to our Board of Directors or appointed to fill a vacancy on the Board of Directors if he or she will be age 75 or older upon his or her election or appointment, unless a waiver is granted by our Board of Directors. As a result of our ongoing director refreshment efforts, we have added three new independent directors to our Board of Directors during the last 12 months. Six of our nine directors have served on our Board of Directors for less than seven years, with four of those directors serving less than two years. This has resulted in a balanced range of tenures, ensuring both continuity and fresh perspectives among our director nominees.


3


New independent directors added to our Board of Directors during the last 12 months

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A director is required to offer his or her resignation immediately in the event the director, or any of his or her respective affiliates or associates, takes any action (including encouraging or supporting others) to (i) nominate, propose or vote in favor of any candidate to serve on our Board of Directors (other than the nominees proposed by our Board of Directors) or oppose for election any nominee proposed by our Board of Directors or (ii) solicit proxies with respect to any of our securities within the meaning of the Exchange Act and the rules thereunder (other than any proxy solicitation in favor of a matter approved by our Board of Directors).

In determining whether to nominate an incumbent director for re-election, the Nominating and Corporate Governance Committee and our Board of Directors evaluate each incumbent’s continued service, in light of these collective requirements. When the need for a new director arises (whether because of a newly created seat or vacancy), the Nominating and Corporate Governance Committee and our Board of Directors proceed to identify a qualified candidate or candidates and to evaluate the qualifications of each candidate identified. Final candidates are generally interviewed by one or more members of the Nominating and Corporate Governance Committee or other members of our Board of Directors before a decision is made.

Shareholder Recommendations and Nominations for Election to the Board

Our Nominating and Corporate Governance Committee will consider nominees recommended by shareholders. Any shareholder wishing to nominate a candidate for director at the next annual shareholders’ meeting must submit a proposal as described under “Additional Information—Shareholder Proposals for the 2023 Annual Meeting of Shareholders” and otherwise comply with the advance notice provisions and information requirements contained in our bylaws. The shareholder submission should be sent to the President of PROG Holdings, Inc. at 256 West Data Drive, Draper, Utah 84020.

Shareholder nominees are evaluated under the same standards as other candidates for board membership described above in “Assessment of Director Candidates and Required Qualifications.” In addition, in evaluating shareholder nominees for inclusion with the board’s slate of nominees, the Nominating and Corporate Governance Committee and our Board of Directors may consider any other information they deem relevant, including (i) the factors described in “Assessment of Director Candidates and Required


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Qualifications,” (ii) whether there are or will be any vacancies on our Board of Directors, (iii) the size of the nominating shareholder’s holdings in the Company, (iv) the length of time such shareholder has owned such holdings and (v) any statements by the nominee or the shareholder regarding proposed changes in our operation.

Board Leadership Structure

We currently separate the roles of Chairman and Chief Executive Officer in recognition of the differences between the two roles. The Chairman is responsible for leading our Board of Directors in its duty to oversee the management of our business and affairs. The Chief Executive Officer is responsible for oversight of our day-to-day operations and business affairs, including directing the business conducted by our employees, managers and officers.

Our Chief Executive Officer serves on our Board of Directors, which we believe helps to serve as a bridge between management and our Board of Directors, ensuring that both groups act with a common purpose. We believe that Mr. Michaels' presence on our Board of Directors enhances his ability to provide insight and direction on important strategic initiatives to both management and the independent directors.

Our Board of Directors does not have a formal policy on whether the Chairman and Chief Executive Officer roles should be separated or combined but, instead, makes that determination from time to time employing its business judgment. Our Board of Directors, however, does believe that if the Chairman and Chief Executive Officer roles are combined, or if the Chairman is not an independent director, that our Board of Directors should appoint an independent Lead Director to serve as the leader and representative of the independent directors in interacting with the Chairman and Chief Executive Officer and, when appropriate, our shareholders and the public. Our Board of Directors has determined that Mr. Robinson, who serves as our Chairman, is independent under NYSE listing requirements. As a result, our Board of Directors has not designated a Lead Director.

Board of Directors and Committee Evaluations

Our Board of Directors and each of its committees conduct an annual evaluation, which includes a qualitative assessment by each director of the performance of our Board of Directors and the committee or committees on which the director sits. In 2021, our Board of Directors engaged a third-party legal advisor to facilitate our board self-evaluation process and board and committee reviews. The results of the evaluation and any recommendations for improvement were reported to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee oversees the evaluation process.

Board and Committee Roles in Risk Oversight

As part of its risk oversight role, our full Board of Directors periodically receives reports from management, external professional advisors and others regarding various types of risks faced by the Company and the Company’s risk mitigation efforts related to such risks. Senior management is responsible for day-to-day risk management, while our Board of Directors oversees planning for and responding to risks, as a whole, through its committees and independent directors. Although our Board of Directors has ultimate responsibility with respect to risk management oversight, primary responsibility for certain areas has been delegated, as appropriate, to its committees.

For example, the Audit Committee is charged with, among other matters, overseeing risks attendant to the integrity of our financial statements; our financial reporting process; systems of internal accounting and financial controls; and performance of our internal audit function and independent auditors. The Audit Committee considers the steps management has taken to monitor and control such risks, including our risk assessment and risk management policies. The Audit Committee also considers issues relating to our legal and regulatory compliance obligations, including consumer protection laws.

Likewise, the Compensation Committee considers risks that may be implicated by our compensation programs. During 2021, our Compensation Committee, aided by its independent third-party compensation consultant, reviewed our compensation policies and practices and determined that they do not encourage excessive or


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unnecessary risk taking, and do not otherwise create risks that are reasonably likely to have a material adverse effect on the Company.

Board Diversity

We endeavor to have a Board representing diverse experience at policymaking levels of business, government, education and technology, and in other areas that are relevant to the Company’s activities. Diversity of race, ethnicity, gender and age are also factors our Board considers when evaluating candidates for Board membership. While our Corporate Governance Guidelines do not prescribe precise diversity standards, they do include a “Rooney Rule” policy confirming our Board of Directors’ commitment to including in any pool of candidates for membership to our Board of Directors highly qualified candidates who would bring racial, ethnic, and/or gender diversity to the Board of Directors if chosen.

We believe our Board of Directors is comprised of individuals with diverse business and professional experiences, skills, talents and expertise, as well as age, gender and racial and ethnic diversity.


48-74	33%	44%


Age range of our directors	Of our Board is comprised of female directors	Of our Board is comprised of ethnically and racially diverse directors, including African-American, Latino and Asian directors

Environmental, Social and Governance Matters

ESG Oversight

Our Board of Directors oversees our ESG program and initiatives at an enterprise-wide level. While we believe our ESG efforts benefit from the engagement of the full Board of Directors, efficiently managing the breadth and diversity of ESG matters requires delegation to appropriate committees of the Board of Directors as developments may warrant. For example, our Nominating and Corporate Governance Committee is often charged with monitoring and considering investor priorities and preferences with respect to ESG issues and discussing them with the Board of Directors and management. Additionally, our Compensation Committee monitors and discusses with management the status of our human capital management programs, including our diversity, equity, and inclusion initiatives. As the demands on our ESG-related disclosures increase, our Audit Committee also will play an increasingly important role by working with our Vice President of Audit Services regarding the policies, processes and procedures relating to our ESG disclosures.

ESG Reporting

We are committed to being transparent and informing all of our stakeholders about our ESG programs and initiatives, including our performance with respect to ESG matters. We recently published our inaugural ESG Review, which we expect to update annually. The ESG Review provides information on how we identify, address and measure our performance on ESG topics that we believe are important to the long-term success and sustainability of our business. Our ESG Review represents another step forward in our commitment to increased ESG accountability and provides a foundation to build increased transparency by directly reporting on relevant sustainability issues, risks and opportunities that impact our business. We intend to continue monitoring and evaluating the rapidly evolving ESG disclosure landscape, including the nature of ESG-related disclosures sought by our stakeholders, the SEC, nationally recognized reporting standards, such as the Sustainability Accounting Standards Board (SASB), and by various organizations that provide ESG ratings. Our ESG Review for our 2021 fiscal year is available in the Governance section of our investor relations website at investor.progholdings.com. We


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encourage all of our stakeholders to read our ESG Review, and the various policies referenced within the ESG Review, including our Human Rights Policy and our Vendor Code of Conduct, both of which also are available in the Governance section of our investor relations website at investor.progholdings.com.

Recruiting, Developing, Promoting and Retaining a Diverse Group of Highly-Motivated Employees

Our Board of Directors and management team believes that recruiting, developing, mentoring, promoting, and retaining a diverse and highly motivated and qualified team of employees is critical to the long-term success and sustainability of our business. For this reason, our management team is especially focused on policies and initiatives that address our “human capital management,” and provides frequent updates to our Board of Directors regarding these efforts.

Diversity, Equity, and Inclusion

We believe in being an inclusive workplace for all of our employees and are committed to having a diverse workforce that is representative of our customers, and the communities in which we operate our businesses. A variety of perspectives enriches our culture, leads to innovative solutions for our business and enables us to better meet the needs of our diverse customer base. Our aim is to develop inclusive leaders and an inclusive culture, while also recruiting, developing, mentoring, promoting, and retaining a diverse workforce, including a diverse group of management-level employees who reflect the communities we serve.

Our Talent Acquisition Team works directly with our diversity, equity and inclusion (“DE&I”) program manager to identify ways to further improve our efforts to recruit a diverse group of employees. Those efforts have included:


1	2	3

Utilizing web-based platforms and other information and outreach tools that have a focus on sourcing diverse job candidates, and making those candidates aware of their possible opportunities with the Company;	Partnering with Howard University, a leading historically black university, to provide internship opportunities to its students, and using those internships as a pipeline for future full-time employees; and	Partnering with the Women Tech Council, a national organization that is focused on the economic impact of women in the technology sector, and that creates sustainable mentoring, networking and visibility programs at every stage of the talent pipeline, from high school to the board room.

Going forward, we plan to expand our partnerships with additional historically black colleges and universities ("HBCUs") and also increase our participation in job fairs that are specifically focused on identifying and recruiting female and diverse job candidates.

We believe that recruiting and hiring ethnically and gender diverse employees is only the first step in the DE&I lifecycle. Our DE&I-related goals also include developing, promoting and retaining those employees, and ensuring that they feel a sense of belonging with the Company and their coworkers. One of the ways we strive to achieve those goals is by providing executive, monetary and other support to our Employee Business Resource Groups (“BRGs”), all of which encourage and welcome participation from all employees in all positions and locations. Our BRGs work to ensure their members have a voice in the Company’s on-going conversations about DE&I matters. Currently, our BRGs include:


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The Black Inclusion Group, or “BIG”, whose mission is to enrich the experience of our African-American employees by providing professional and leadership development, networking, mentoring and social opportunities, while also promoting understanding of their concerns and views among all of our employees. BIG is focused on inclusion, engagement, learning and advancement initiatives intended to promote retention of African American employees.
Women In Leadership or “WIL”, an organization created to inspire female employees to develop their leadership abilities, prepare for and take advantage of career growth opportunities, and increase their knowledge of the Company for organizational and personal success, is focused on fostering the recruitment, development, advancement and retention of female employees, and helping all employees gain an appreciation of issues and topics of importance to our female employees.
Adelante!, which provides a platform for highlighting and celebrating the richness of the Hispanic and LatinX communities’ heritages by promoting cultural and issues awareness among all of our employees. This organization also facilitates professional and leadership development, networking, mentoring and social opportunities for Hispanic and LatinX employees, with the aim of fostering recruitment, development, advancement and retention of those employees.
PROGPeople Respecting Individuality, Diversity and Equality, or “PRIDE”, seeks to foster a culture of understanding, diversity, inclusion and equality with our LGBTQ+ employees and allies, and encourage individuality, respect, professional development, and awareness of the challenges faced by, and issues that are important to, the LGBTQ+ community.

In addition to providing support to our BRGs, our efforts to promote DE&I include:

▪Hosting internal and guest speakers to discuss topics relevant to DE&I matters;

▪Conducting training to educate our employees about various DE&I themes, racial justice, disability inclusion and LGBTQ+ allyship, among other themes;

▪Improving and formalizing mentorship programs targeted towards our female, minority and LGBTQ+ employees, which we expect to implement during 2022;

▪Implementing a talent review process that is designed to utilize a multi-factor approach to understanding the talents of our employees and the potential they have to be future leaders of the Company.

The following information summarizes our gender, ethnicity and race diversity metrics as of December 31, 2021, and is based on responses from employees who chose to disclose such information.

Employee EEO Classification

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Employee EEO Classification	Hispanic or Latino	White	Black or African American	Native Hawaiian or Pacific Islander	Asian	American Indian or Alaskan Native	Two or More Races

Executive/Sr Mgmt	—	97.9%	2.1%	—	—	—	—
First/Mid Managers	15.4%	68.3%	6.2%	*	5.4%	—	4.7%
All Other Employees	27.4%	53.8%	9.2%	1.0%	4.5%	1.0%	2.9%

*Less than 1%

Retaining Our Employees

We believe that recruiting and hiring employees who are positioned to help us achieve our mission and goals, and deliver long-term value to our shareholders and other stakeholders, is of limited value if we do not retain those employees. We appreciate that the competition for valuable employees, such as ours, has increased in recent years. For example, many large international technology companies have expanded their recruiting efforts to geographical areas where they do not have facilities, and thus, allow their employees in those areas to work-from-home. As such, we are especially focused on improving employee retention, including through training and development, employee engagement with a focus on a mission-based culture of giving, and competitive and fair compensation and benefits.

Training and Development

We are dedicated to providing training and other development opportunities to our employees that will not only enable them to grow professionally and personally, but also provide them with the tools they need to succeed in their careers and in life as well. As such, we have made significant investments in training programs and other development opportunities, including enhancing our onboarding and early-stage training by partnering with each department and functional area within the Company to develop additional training programs that include more immersive on-the-job learning opportunities, competency-based learning, along with more formalized mentoring programs.

Some of the training and other development opportunities we provide to our employees throughout their career development cycles include:


			Providing no-cost access to LinkedIn Learning to all employees, enabling them to take an unlimited number of courses from a library of thousands of options, which is integrated with our Learning Management System, so that employees and their managers are able to track courses the employees have taken;
			Providing our technology-focused employees with no-cost access to Pluralsight, a learning platform with a focus on technology topics relevant to their job responsibilities and overall career development;
			Reimbursing our support services employees for classes they take to further improve their skills and qualifications;
			Offering tuition assistance reimbursement of up to $5,250 per year for full time employees and $2,625 per year for part time employees, a program on which we spent more than $950,000 over the past three years;
			Offering our Accelerated Leadership Performance Series to employees to help them develop the skills and leadership qualities needed to become leaders within the Company; and
			Offering our Summit Leadership Development Program, which teaches core leadership competencies, to employees at every level of the organization.

In 2021, we hired two full-time talent development managers who are focused on developing new curricula and improving existing curricula for our leadership development programs. We believe the addition of these resources will further advance our plans and strategies to develop valuable leaders from within the Company, enabling us to promote-from-within and retain more employees.


42						PROG Holdings, Inc. 2022 Proxy Statement


Governance

Compliance related training continued to be a focus area for our management team in 2021, and completion of that training was included as a performance metric in our annual incentive plan design. In addition, supervisors and the Company’s executive officers routinely receive reports describing the percentage of their employees who have completed required compliance courses, and identifying any employees who has failed to do so. Any employees who fail to complete required compliance courses in a timely manner may face disciplinary action, and are required to complete the training that they previously failed to complete by the specified deadline.

The table below summarizes the hours of training completed by our employees during each of the past three years, our expenditures for tuition reimbursement during those years, and the number of employees promoted internally during those years, which we believe is an especially relevant example of how we are providing opportunities for career advancement and growth to our employees, and “promoting from within,” thereby increasing the likelihood of employee retention and success within the Company.


	2021	2020	2019
Total training hours	150,000	135,000	148,000
Tuition reimbursement dollars	$305,442	$283,024	$369,137
Internal promotions	246	240	287

Employee Engagement

We believe that regular, on-going engagement with our employees is an important step in our effort to retain them. In addition to utilizing formal employee engagement surveys, we have implemented a number of additional programs and initiatives to promote and increase employee engagement, as further described below.

The Company distributes engagement surveys to employees quarterly. Employee participation rates in those surveys has ranged from 85% to 78% during the past three years, which we believe reflects the importance of the surveys to our employees. The results from those engagement surveys are reviewed by management, led by our Chief People Officer, to identify areas in which we may be able to further enhance the employee experience, and implement improvements, including coaching of our managers where additional development may be needed. Managers receive the survey results for their teams through an interactive dashboard and are charged with developing action plans in response to those results to continue to improve employee engagement. For example, engagement surveys completed during 2020 indicated that employees desired a greater number of training and development opportunities, including those offered by external sources. In response to that feedback, one of our objective and key results, or “OKRs”, for 2021 focused on that request, and resulted in the implementation of an improved Learning Management System, LinkedIn Learning and other additional training and development resources for employees.


PROG Holdings, Inc. 2022 Proxy Statement						43


						Governance

In addition to formal engagement surveys, we have implemented numerous other programs and initiatives to promote and increase employee engagement, including:

A Company-wide, digital peer recognition tool that allows employees at any level of the organization to recognize other employees for notable accomplishments;

Multimedia communications, including videos, Intranet posts, digital newsletters and e-mails, that highlight departmental or employee team “wins,” community engagement activities and accomplishments, and other morale-boosting subjects;

Creative townhall “all hands on” meetings held at least twice per year to update employees on Company initiatives and performance, and recognize employee and/or departmental accomplishments;

Monthly or, in some situations, weekly manager meetings to review the status of Company and departmental initiatives and projects, and discuss employee career development and training opportunities;

Community service projects, designed to bring employees and management together for a common cause; and

Service awards given at 5 years and 10 years of service, through which employees are provided with a bonus award and Companywide recognition; and

Business units are afforded an annual budget to be used to recognize and reward employees for high performance, including exemplifying the Company’s core values.

We intend to further enhance, expand and improve our employee engagement initiatives during 2022. We believe that doing so is especially important as we strive to keep employees engaged and feeling a sense of belonging with the Company and their co-workers during this time period when remote working environments are so prevalent.

Competitive and Fair Employee Benefits and Compensation

The Company is committed to providing a comprehensive, competitive benefits package, which our employees are able to customize to meet their specific needs and goals. Those benefits include:


Multiple options for medical insurance coverage for all eligible employees, including hourly employees, for which the Company has absorbed the cost of all premium increases for the past seven years;
Medical, pharmacy, dental and vision insurance plans;
Accident, disability and life insurance, including certain threshold levels of coverage that require no contribution from employees;
Family planning benefits;
An Employee Assistance Program that provides employees and their immediate family members with professional referrals, counseling sessions (provided at no charge for the first five sessions), financial planning services, family assistance and legal assistance;
Paid maternal and paternal parental leave for up to twelve weeks for primary caregivers, and four weeks for secondary caregivers, following the birth or adoption of a child, or the placement of a foster child;
A 401(k) plan that matches employees’ contributions after 90 days of service with a 100% match on the first 3% of pay that the employee contributes , and a 50% match on the next 2% of pay that the employee contributes;
An attractive employee stock purchase program with above-market discounts for eligible employees, for which 426 employees were enrolled at the end of 2021, which we believe aligns those employees’ interests with those of our shareholders;
Health and wellness programs and perks for employees and their spouses or partners, which includes personalized health coaching, team and individual challenges, live wellness webinars and a monthly stipend for gym memberships and fitness classes.


44						PROG Holdings, Inc. 2022 Proxy Statement


Governance

All of our employees earn more than the federal minimum wage. The average wage of a full-time hourly employee of the Company as of December 31, 2021 was $17.25, with approximately 96% of those employees earning an average hourly wage of $15 or more. The average total compensation and benefits for a full-time hourly employee of the Company at December 31, 2021 was approximately $46,723, including base wages, average overtime wages, bonuses and benefits, such as paid time off.

Employee Retention Statistics for 2021

The voluntary and involuntary turnover rates in 2021 for all employees other than those who work in our Operations area, which is comprised primarily of our hourly customer contact center agents were 17.2% and 3.3% respectively. The voluntary and involuntary turnover rates for employees working in our Operations area for 2021 were 57.6% and 4.8% respectively. We, like many others in industries that utilize customer contact center employees, experienced a relatively high turnover rate with that segment of our employee base during 2021. We have implemented a number of initiatives to improve those turnover rates in 2022, including completing a market compensation analysis and adjusting compensation to make it more competitive, implementing initiatives designed to increase retention in response to feedback we have received through enhanced exit surveys and interviews with departing customer service agents, and broadening our geographic hiring footprint to new labor markets that are not as concentrated with other companies who hire similar roles.

Employee Health & Safety and Our Response to the COVID-19 Pandemic

We continued to prioritize employee health and safety as an important area of focus during 2021. Since 2020, many of our employee health and safety measures have been implemented in response to the COVID-19 pandemic, to keep our employees and their families safe and well. The steps we have taken as we strive to achieve that objective have included:


			Transitioning our employees to working remotely from their homes;
			Ensuring our employees had the computers, monitors, headsets and other equipment necessary for them to successfully perform their jobs from their homes;
			Providing employees with a $500 stipend for them to use to enhance their home office environments;
			Increasing facility hygiene and cleaning procedures and safety protocols, to provide a safe working environment for the relatively small number of employees who desired to work from our facilities or whose jobs require them to be present on-site;
			Providing our employees and their family members with no-cost access to virtual mental health counseling services;
			Granting employees paid time off to receive vaccines;
			Monitoring the percentage of our workforce who has been vaccinated, through employee attestations;
			Expanding our policies to provide employees who tested positive for COVID-19 prior to the availability of vaccines with paid sick leave;
			Continuing to monitor CDC and state and local guidelines and regulations to ensure we are compliant with the most recent advice and requirements related to the pandemic.
			Providing COVID-19 tests and masks for employees entering our offices.

With respect to general employee health and safety, we believe our policies, training, reporting and management review procedures have been effective in meaningfully limiting employee injuries, as evidenced by the table below.


Metric	2021	2020	2019
Total Recordable Incidents	5	8	13
Total Cases w/ Days Away	1	2	2


PROG Holdings, Inc. 2022 Proxy Statement						45


						Governance

Improving Our Communities by Investing Our Money and Time in Them

Our Board of Directors and management team believes investing time and money to improve the communities where our employees and customers live and work is simply the right thing to do. We are committed to giving-back to, and making a positive impact on, our communities, a commitment that we carry out through our PROG Holdings Foundation (the “Foundation”), the PROG Holdings Employee Matching Gift Program (the “Matching Gift Program”) and the PROG Holdings Paid Service Program (the “Paid Service Program”), as well as community engagement activities.

Our Foundation and Matching Gift Programs

We have a goal of contributing 1% of our annual, consolidated, pre-tax profits to improve our communities and to help our employees improve their communities, through donations made by our Foundation and our Matching Gift Program. We have recently hired a full-time employee who will be dedicated to increasing the activities, giving and reach of our Foundation and Matching Gift Program.

Our Foundation is committed to improving lives by making donations to non-profit organizations that utilize educational, developmental and technological tools to empower socio-economic improvement and mobility for the underserved. For example, through our Foundation, we have made gifts of approximately $100,000 each to Big Brothers Big Sisters, Junior Achievement and Latinos in Action, as well as many other donations.

Our Matching Gift Program matches employee donations to most non-profit organizations, with a maximum annual match of $1,000 per employee. We believe our Matching Gift Program helps ensure that a meaningful portion of our charitable giving is responsive to the local needs of the communities where our employees live and work, as determined by our employees, and thus, helps foster a sense of belonging between the Company and our employees.

Our Paid Service and Community Engagement Programs

Our management team believes that simply making charitable donations to organizations that work to improve our communities, while important, is not adequate by itself to achieve our social responsibility goals. In addition to making donations, we believe it is crucial that our managers and employees, at every level of the Company, become personally engaged in the work of improving our communities, by volunteering their time. As such, through our Paid Service Program, all of our employees are provided with eight hours of paid time to perform services for eligible non-profit organizations. In addition to enabling those individual opportunities for volunteering, the Company sponsors community engagement and improvement events, which during 2021, included:

Preparing more than 1,500 educational kits for distribution by a non-profit organization dedicated to promoting financial literacy;

Supplying child development centers with constructed development equipment for underserved children through Habitat for Humanity;

Sponsoring a blood drive through the American Red Cross;

Sponsoring a learning center for Junior Achievement in Utah; and

Sponsoring Utah Pride and Phoenix Pride.

During 2021, our management team and employees volunteered almost 900 hours to these and other events and organizations that are making a positive difference in our communities. After the COVID-19 pandemic subsides, we hope to exceed those volunteerism hours, as we work to transform the lives of underserved citizens in the communities where we and our customers live and work.

During 2022, we expect to compliment the initiatives described above by launching the PROG Development Center. Initially, we expect the Center to provide virtual technology, and other educational and personal development opportunities, and thus, socio-economic mobility, to high school students from economically


46						PROG Holdings, Inc. 2022 Proxy Statement


Governance

challenged areas in Utah. We plan to open a physical center in the second half of 2022 or early 2023. Our Foundation-funded Center expects to utilize multiple public and private partnerships to provide content and programming, as well as development and support opportunities, to the youth who participate in the Center. We anticipate that our employees will support the Center's efforts by volunteering virtually and in-person, and serving as mentors for students who participate in the Center's offerings.

Respecting and Supporting Our Customers

We strive to provide our customers with the respect and support that they deserve. To that end, we are focused on offering our products to them through ethical selling practices, which include transparent, easy-to-understand customer-facing materials and terms that not only comply with applicable laws and regulations, but often exceed those standards. We also show our appreciation and respect for our customers by striving to provide them with excellent customer service, working with them to position them for success with our offerings, and by protecting the security of their personal information.

Ethical Selling Practices

Our product offerings, including customer-facing marketing materials and transaction agreements, are reviewed on a regular basis by a cross-functional team of Company employees who are assigned the task of making sure those materials are transparent, easy-to-understand and compliant with applicable laws and regulations. This on-going effort includes participation by employees from our marketing, sales, operations, compliance, legal, information security and data privacy teams. In addition, we provide training manuals and in-person and virtual training to our POS partners to ensure that their marketing and other customer-facing materials accurately describe our offerings and comply with applicable laws and our compliance policies. We monitor our POS partners’ websites and have a team of field inspectors, which we recently doubled in size, visit POS partner locations to ensure their materials about our offerings and related practices satisfy our requirements

Striving to Offer Excellent Customer Service

We provide customers with multiple avenues for making us aware of any complaints or concerns they may have about their experiences with us. For 2021, the number of customer complaints expressed as a percentage of total active leases with Progressive Leasing averaged 0.60%. We carefully track the nature and number of customer complaints we receive from customers, and believe the quality and timeliness of the service our customers receive from us is critical to ensuring that they have an excellent experience with the Company and our offerings. For that reason, we regularly monitor the timeliness of our responses to customers who call us with complaints, and the time it takes us to resolve those matters. For example, with respect to Progressive Leasing, in 2021:


46%	82%	96%


of all customer questions, concerns or complaints were resolved on the same day the customer contacted us;	were resolved in less than ten days;	were resolved in less than thirty days.


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						Governance

In addition to monitoring how quickly we resolve customer concerns, we also monitor whether customers believe our customer service agents are friendly and knowledgeable. We do so by frequently conducting customer satisfaction surveys focused on how customers view their interactions with our support agents, at all stages of the customers’ experiences with us. Those survey results help us identify and understand specific areas for improvement within our customer service function. Those customer surveys for Progressive Leasing for 2021 include the following results:


94%						91%


of customers surveyed indicated that our customer service agents were friendly; and						indicated that those agents were knowledgeable about the matter raised by the customer.

In addition to these metrics, our Google customer satisfaction rating at the end of 2021 was 4.8 out of a possible 5 stars. While we believe these metrics indicate that our customers are pleased with our service levels, we intend to continue our efforts to further improve the quality and timeliness of our customer service in future periods, as part of our initiatives to show our customers how much we respect and value them.

Positioning Customers for Success with Our Offerings

Our Progressive Leasing business provides its customers with flexible terms designed to help them achieve merchandise ownership, including through low initial payments and early buyout options, such as our 90-day early buyout option. In addition, our proprietary decisioning processes and tools are designed and calibrated to result in customer application approval decisions and, for applicants who are approved, approval amounts, that position our customers for success with our products offerings. However, when our customers experience unexpected financial challenges and hardships due to the COVID-19 pandemic, catastrophic weather events or other natural disasters, loss of a job, medical emergencies or other financially challenging situations, we work with those customers to try to find a solution that will enable them to achieve an outcome with our offerings that is satisfactory to them. In addition, our Progressive Leasing customers have the option to cancel their agreements with us at any time without any negative consequences by returning the leased merchandise to us, or having us pick it up. Steps we took during 2021 to try to help customers facing unexpected financial hardships achieve success with our offerings included, depending on the unique facts and circumstances faced by each customer:

▪Allowing customers to defer making payments to us;

▪Suspending collections activities;

▪Creating payment schedules personalized to the customer’s unique situation;

▪Offering discounted settlement opportunities, where appropriate; and

▪Waiving return fees.

One of the ways we evaluate if our customers are achieving success with our offerings is by monitoring the percentage of Progressive Leasing’s lease-to-own (“LTO”) transactions that result in customers achieving ownership of the merchandise they obtained through LTO arrangements with Progressive Leasing. For example, for LTO agreements funded by Progressive Leasing during the 2020 calendar year, approximately 82% of those transactions resulted in customers obtaining ownership of the leased merchandise. A significant portion of Vive’s customers also are successful with Vive’s offerings, with approximately 7.1% of the loans receivable held by Vive being aged more than 60 days as of December 31, 2021. While we believe all of these metrics demonstrate that our customers are frequently achieving success with our product offerings, we expect to continue to work with our customers to try to further improve those metrics going forward.


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Governance

Protecting Our Customers' Personal Information: Cybersecurity and Data Privacy

During 2021, members of our Board of Directors received presentations from management regarding trends in cybersecurity risks and risk mitigation initiatives and plans. In addition, our Board of Directors reviewed our cybersecurity-related investments, initiatives, key benchmarks and risk mitigation plans with management.

Our senior management has developed a program designed to detect, identify, classify and mitigate cybersecurity and other data security threats, as part of our efforts to protect and maintain the confidentiality and security of customer, employee and vendor information, and non-public information about our Company. That program is based in-part on, and its maturity is measured using, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) Cybersecurity Framework. Our program classifies potential threats by risk levels and we typically prioritize our threat mitigation efforts based on those risk classifications, while focusing on maintaining the resiliency of our systems. In recent years, we have increased our investments in our ability to detect, identify, and mitigate cybersecurity and other data privacy risks within our environment. In the event we identify a potential privacy or data security issue, we have defined procedures for responding to such issues, including procedures that address when and how to engage with Company management, our Board of Directors, other stakeholders and law enforcement, when responding to such issues.

We have a dedicated team of employees overseeing our cybersecurity and data privacy initiatives, led by our Chief Information Security Officer, in consultation with internal and external attorneys and other professional advisors. We also have an Enterprise Information Security Committee comprised of a cross-functional group of senior executives and other employees that meets on a regular basis to provide oversight with respect to our cybersecurity and data privacy risk detection, classification and mitigation efforts. Going forward, our Chief Information Security Officer will continue to provide updates to our Board regarding this important topic. Some of the other steps we have taken to detect, identify and attempt to mitigate data security and privacy risks include:


Adopting and periodically reviewing and updating information security and privacy policies;
Conducting targeted audits and penetration tests throughout the year, using both internal and external resources;
Complying with the Payment Card Industry Data Security Standard;
Engaging an industry-leading, nationally-known third party to independently evaluate our information security maturity on a regular basis;
Adopting a vendor risk management program, which includes receiving the results of cybersecurity and data privacy audits conducted on those vendors, classifying vendor, service provider or business partner risk based on several factors and evaluating and monitoring related risk mitigation efforts;
Providing security and privacy training and awareness to all of our employees;
Maintaining cyber liability insurance; and
Implementing additional and enhanced security and other risk-mitigation measures specifically designed to accommodate and respond to a significant portion of our workforce moving to work-from-home environments due to the COVID-19 pandemic.

We also understand the importance of collecting, storing, using, sharing and disposing of personal information in a manner that complies with all applicable laws. To facilitate compliance with those laws, we have privacy policies in place regarding our treatment of customer data, as well as policies relating to the protection of employee and vendor data. Our policies provide explanations of the types of information we collect, how we use and share information, and generally describe the measures we take to protect the security of that information. Our policies also describe how customers may initiate inquiries and raise concerns regarding the collection, storage, sharing and use of their personal data. In addition, our employees also must complete mandatory training to understand the behaviors and technical requirements necessary to safeguard information resources at the Company.


PROG Holdings, Inc. 2022 Proxy Statement						49


						Governance

Understanding and Improving Our Environmental Footprint and Impacts

Our Board of Directors and management team believe it is critical that businesses across all industries, including ours, all do their part to improve the environment. As described in more detail in our ESG tear sheet, during 2021, we took a number of steps designed to help us understand our current environmental footprint and impacts, and to evaluate and develop a strategy around further reducing our energy, water and paper use, as well as our direct and indirect greenhouse gas ("GHG") emissions, including:


			Engaging a third-party environmental consultant to assist us with understanding our environmental footprint and developing a plan to reduce our unfavorable environmental impacts, including with respect to the matters described below;
			Calculating Scope 1 and Scope 2 GHG emissions;
			Developing thoughtful and realistic reduction targets with respect to our energy consumption and GHG emissions, as well as goals for reducing the amount of paper and water we use, which we expect to finalize by the end of 2022;
			Evaluating the GHG emissions reductions we could achieve by providing many of our employees with the flexibility to continue working from home after the COVID-19 pandemic subsides, which we intend to do;
			Continuing discussions with our landlords about steps they can take, or we can take with them, to make our largest facilities, all of which are leased, more energy and water efficient, and environmentally friendly.

Other steps we have previously taken to improve our impact on the environment include:

Locating our headquarters in a building that is LEED Silver Certified, which uses daylight harvesting lighting control systems;

Providing recycling containers at our facilities, through which we recycle aluminum, paper and plastic;

Installing speed governors on most of our fleet of trucks used for moving merchandise, to save fuel, reduce emissions and promote safe driving; and

Enforcing our restrictions on excessive vehicle idling by promptly alerting any fleet driver who has been idling for longer than the maximum time we permit.

We plan to update the status of our initiatives to reduce our energy, water and paper use and GHG emissions in our annual ESG reviews, and encourage all of our stakeholders to follow our progress.


50						PROG Holdings, Inc. 2022 Proxy Statement

Non-Management Director Compensation In 2021

The compensation program for our non-employee directors is designed to fairly compensate them for the effort and responsibility required to serve on the board of a company of our size and scope as well as to align our directors’ interests with those of our shareholders more generally. For 2021, our non-employee directors received an annual cash retainer of $75,000 and an annual award of restricted stock units having a value of $125,000, which generally vests one year following the grant date. Our Chairman, Mr. Robinson, also receives a cash retainer of $100,000, paid quarterly in $25,000 installments, in recognition of the additional duties he performs by serving as our Chairman. Non-employee directors serving as the chairperson of the Audit, Compensation, and Nominating and Corporate Governance Committees also received an additional annual retainer of $20,000, $15,000 and $10,000, respectively, for their service in these roles and the additional time commitments required.

Directors who are employees of the Company receive no compensation for their service on our Board of Directors.

The following table shows compensation earned by non-employee directors during 2021.


Name	Fees Earned or Paid in Cash ($)	Stock Awards(1) ($)	Total ($)
Kathy T. Betty(2), (4)	85,000	125,000	210,000
Douglas C. Curling(2), (5)	90,000	125,000	215,000
Cynthia N. Day(2), (6)	95,000	125,000	220,000
Ray M. Robinson(2), (7)	175,000	125,000	300,000
James P. Smith(2), (8)	47,802	139,500	187,302
Ramon Martinez(3), (8)	23,234	125,000	148,234
Caroline Sheu(3), (8)	23,234	125,000	148,234

1.Represents the grant date fair value of stock awards pursuant to Financial Accounting Standards Board Codification Topic 718.

2.As of December 31, 2021, each of these non-executive directors held 2,593 units of restricted stock subject to vesting, which was the number of units of restricted stock granted to them in June 2021.

3.As of December 31, 2021, each of these non-executive directors held 2,700 units of restricted stock subject to vesting, which was the number of units of restricted stock granted to them in September 2021.

4.Includes $21,250 in fees earned for services in the fourth quarter of 2021 which will be paid in 2022.

5.Includes $22,500 in fees earned for services in the fourth quarter of 2021 which will be paid in 2022.

6.Includes $23,750 in fees earned for services in the fourth quarter of 2021 which will be paid in 2022.

7.Includes $43,750 in fees earned for services in the fourth quarter of 2021 which will be paid in 2022.

8.Includes $18,750 in fees earned for services in the fourth quarter of 2021 which will be paid in 2022.

Stock Ownership Guidelines

Under our current stock ownership guidelines, each director is expected to own or acquire shares of our common stock and common stock equivalents (including restricted stock and restricted stock units) having a value of at least $400,000 prior to the later of January 31, 2021 or four years from when the director first joined our Board of Directors. As of December 31, 2021, each of our directors is currently in compliance with the requirements established in these guidelines.


PROG Holdings, Inc. 2022 Proxy Statement						51

Compensation Discussion and Analysis

The purpose of this Compensation Discussion & Analysis section (this “CD&A”) is to provide information regarding our executive compensation philosophy, objectives and decisions for our “named executive officers” (“NEOs”) and to explain how and why the Compensation Committee of our Board of Directors made its compensation decisions for 2021, which was our first full year as a publicly-traded, standalone fintech holding company, following the spin-off of our former Aaron’s Business operating segment to our shareholders in late 2020 (the “Spin-Off”). In connection with the Spin-Off, we built a new management team for the Company, led by the following NEOs:


Named Executive Officer			2021 Position
Steven A. Michaels			President and Chief Executive Officer
Curtis L. Doman			Founder and Chief Innovation Officer
Brian J. Garner			Chief Financial Officer
Marvin A. Fentress			General Counsel and Corporate Secretary

Executive Summary

2021 was a transformational year for the Company. We completed our first full year as a standalone, publicly-traded fintech holding company for Progressive Leasing, Vive Financial and Four Technologies. The management team navigated the on-going challenges presented by the COVID-19 pandemic, including a tight labor market for recruiting and retaining employees, employee absenteeism resulting from additional waves of COVID-19 infections, supply chain challenges that unfavorably impacted many of our retailer and e-commerce partners (whom we refer to collectively as our point-of-sale (“POS”) partners), and thus, our own financial performance. Headwinds from high levels of inflation not seen in decades also presented its own set of challenges. Nevertheless, the Company delivered solid financial performance in 2021. In addition, other notable achievements to better position the Company for long-term future success included the following:


			Repurchasing approximately 17% of our outstanding shares – equating to approximately $567 million of capital being returned to shareholders – by modestly leveraging our balance sheet, which had the added benefit of lowering our cost of capital without impacting our ability to continue investing in organic growth and attractive mergers and acquisitions opportunities, or to potentially return excess capital to shareholders in other ways in the future;
			Adding a number of seasoned executives to our management team to help us achieve our compliance, financial, operational, people and strategic goals, including our Chief People Officer, Chief Commercial Officer, Chief Compliance Officer and Chief Information Officer;
			Making significant progress in further improving the transparency and ease-of-use of our product offerings, and in enhancing our compliance programs;
			Acquiring Four Technologies, an innovative Buy Now, Pay Later company that allows shoppers to pay for merchandise through four interest-free installments, which provided us with a payment solution that further diversifies our consumer financial technology offerings; and
			Increasing the nature and number of career and personal development resources available to our employees at no charge, in response to feedback we received from our employees.


52						PROG Holdings, Inc. 2022 Proxy Statement


Compensation Discussion and Analysis

Our Board of Directors, and its Compensation Committee in particular, is committed to implementing executive compensation plan designs, metrics and strategies, that are intended to incent and motivate our executive management team to reach those goals, as discussed in further detail in this CD&A. Our compensation programs are designed to attract, motivate and retain key executives by offering market-competitive pay opportunities with an emphasis on incentive compensation to create a strong linkage between pay and performance. Those pay-linked performance results for 2021 include the following accomplishments:

▪Consolidated Adjusted EBITDA used for management incentive purposes was $390.7 million, an increase of 10.1% from 2020.(1)

▪E-commerce, a new metric for 2021, recognized our need to grow our internet and app-based business, especially as consumer demand continues to transition from in-person to digital sales.(2) Gross merchandise volume, or “GMV” generated through e-commerce platforms in 2021 for our Progressive Leasing business increased by 151% as compared to 2020, representing 15.2% of its GMV in 2021, as compared to 7.0% in 2020.

▪All of our compliance goals, established in the first quarter of 2021, which focused on positioning the Company for responsible future growth, were fully achieved.

▪Consolidated Revenues were $2.7 billion, an increase of 7.8% as compared to 2020.

▪Consolidated Adjusted Pretax Income was $341.2 million, an increase of 3.8% as compared to 2020.(3)

▪Consolidated Return on Capital of 24.3%.(4)


1.We define Consolidated Adjusted EBITDA used for management incentive purposes as Consolidated GAAP Earnings Before Income Taxes, adjusted to exclude: (i) depreciation and amortization expense; (ii) interest expense; (iii) stock-based compensation expense; (iv) transaction expenses incurred in our acquisition of Four Technologies; (v) losses incurred by Four Technologies; (vi) Vive’s change in allowance for loan losses; and (vii) losses from certain new strategic initiatives that were not included in our financial plan for 2021. For a reconciliation of Adjusted EBITDA, which is not a GAAP measurement, to the closest GAAP measurement, refer to the reconciliation set forth in Appendix A. 2.E-commerce is the GMV of leases completed and executed online, including online-only merchant partners as well as through e-commerce/website integrations with our brick-and-mortar retail partners. 3.We define Consolidated Adjusted Pretax Income as consolidated GAAP earnings before income taxes, adjusted to exclude the following items: (i) Vive’s change in allowance for loan losses; (ii) transaction costs incurred in our acquisition of Four Technologies; (iii) losses incurred by Four Technologies; (iv) interest expense incurred on the Company’s $600 million of senior unsecured notes, which were issued in November 2021; and (v) the losses from certain new strategic initiatives that were not included in our financial performance plan for 2021. 4.We define Consolidated Return on Capital as Adjusted Operating Profit After Tax divided by Average Capital. Adjusted Operating Profit After Tax is calculated as consolidated GAAP Net Earnings adjusted to exclude the following items: (i) interest expense; (ii) the transaction expense we incurred in acquiring Four Technologies; (iii) the losses incurred by Four Technologies; and (iv) the losses from certain new strategic initiatives that were not included in our financial performance plan for 2021. Average Capital is calculated as the sum of net adjusted debt (which is defined as total adjusted debt less adjusted cash and cash equivalents) and adjusted total shareholders’ equity, with the final result being the average of December 31, 2020 and December 31, 2021. Adjusted debt, adjusted cash and cash equivalents and adjusted total shareholders’ equity excludes the impacts of the following items: (i) the adjustments described above with respect to the calculation of Adjusted Operating Profit After Tax; (ii) the Company’s $600 million senior unsecured notes and related debt issuance costs; (iii) the Company’s repurchase of approximately $425 million of its common stock through the tender offer it announced in November 2021 and related direct costs; and (iv) the repayment of $50 million on the Company’s revolving credit facility. For a reconciliation of Return on Capital to the closest GAAP measurement, refer to the reconciliation set forth in Appendix A.

Shareholder feedback is an important factor in how we approach and evaluate our executive compensation programs. Last year, our shareholders cast an advisory vote on our executive compensation practices, with the result that approximately 98% of the total votes cast approved the compensation of our NEOs. We believe our executive compensation programs for 2021 continued to be aligned properly with our business goals and culture and, importantly, further strengthened the relationship between pay and performance.

More details regarding our compensation philosophy, objectives and decisions for 2021 are set forth below. We hope our shareholders will agree that our 2021 executive compensation programs established appropriate incentives and rewards for creating long-term shareholder value. We welcome the feedback of our shareholders and look forward to continuing to serve them during 2022.


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Compensation Discussion and Analysis

Objectives of Our Executive Compensation Programs

The primary objectives and priorities of our executive compensation program are to:


1	2	3	4	5

attract, motivate, and retain quality executive leadership;	align the incentive goals of our executive officers with the interests of our shareholders;	enhance the individual performance of each executive officer;	improve our overall performance; and	support achievement of our business plans and long-term goals.

To accomplish these objectives, the Compensation Committee considers a variety of factors when approving compensation programs, including:


The actual financial and business performance of the Company, as compared to our expectations;
Individual executive performance, as compared to our expectations;
Changes in our short-term and long-term business strategies;
Attracting, retaining, and motivating high-caliber executive talent to realize our objectives;
External market data to ensure we are delivering competitive compensation opportunities to our executives; and
Alignment of pay and performance to ensure shareholder interests are being met.

A more complete description of the annual process for establishing our executive compensation programs is described below.


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Compensation Discussion and Analysis

Our Strong Compensation Governance Practices

In addition to linking pay with performance and working to help ensure our executive compensation programs continue to serve the long-term interests of our shareholders, we believe we employed strong compensation and governance principles and policies during 2021, while avoiding problematic or disfavored practices, as noted below:

▪Independent Compensation Committee assisted by an independent consultant

▪We annually assess the Company's compensation policies to ensure that the features of our program do not encourage undue risk

▪All executives are "at will" employees

▪Pay mix that emphasizes performance-based compensation over fixed compensation (approximately 86% performance-based for CEO and approximately 76% for all other NEOs)

▪Pay mix that emphasizes long-term, equity-based incentives over short-term cash incentives

▪Incentive plans that utilize multiple measures, including growth, profitability, and returns

▪Reasonable incentive plan targets and ranges, with capped incentive payouts

▪Double-trigger equity vesting acceleration upon a change of control

▪Meaningful stock ownership requirements

▪Formal clawback policy to recoup performance-based compensation from our senior executives, including NEOs, under certain prescribed acts of misconduct

What
We Do

▪No repricing or cash buyouts of stock options without shareholder approval

▪No excise or other tax gross-ups on change-in-control payments

▪No hedging or pledging of Company stock

▪No excessive perquisites or other benefits

▪No single-trigger severance benefits upon a change-in-control

▪No payment of dividends on unearned or unvested shares

▪No guaranteed incentive payments

What We Don’t Do

2021 Compensation Process and Actions

Role of the Compensation Committee. The Compensation Committee is comprised solely of directors that our Board of Directors has determined to be independent under applicable standards of both the SEC and NYSE. Its role is to oversee executive and outside director compensation, benefit plans and policies, including equity compensation plans and other forms of compensation, and other significant human capital matters. More specifically, the Compensation Committee reviews and discusses proposed compensation for NEOs, evaluates their performance, and sets their compensation. In addition, the Compensation Committee approves all equity awards for NEOs and other executive officers.


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Compensation Discussion and Analysis

Role of Management. The Compensation Committee considered the input and recommendations of Mr. Steve Michaels with respect to our executive compensation programs and decisions that impact other NEOs. Mr. Garner also provided input with respect to financial goals and recommendations as relevant to the overall executive compensation program design. Although management and other invitees at Compensation Committee meetings may participate in discussions and provide input, all votes and final decision-making on NEO compensation are solely the responsibility of the Compensation Committee, and those final deliberations and votes are conducted in executive sessions in which no executive officer participates.

Role of Independent Compensation Consultant. The Compensation Committee has the authority to retain independent consultants and other advisors. During 2021, the Compensation Committee retained the services of Exequity LLP which reported directly to the Compensation Committee but worked with management at the direction of the Compensation Committee. The Compensation Committee assessed the independence of the advisors, including the potential for conflicts of interest as required by the SEC and NYSE listing standards, and concluded that Exequity was appropriately independent and free from potential conflicts of interest.

Although the specific services of the independent consultant vary from year to year, the following are the services generally provided by the independent consultant:

▪providing information on trends and related legislative, regulatory, and governance developments;

▪reviewing and recommending any changes to the benchmarking peer group for the consideration and approval of the Compensation Committee;

▪conducting competitive assessments of executive compensation levels and incentive program designs;

▪consulting on compensation for outside directors;

▪conducting a review of our compensation programs from a risk assessment perspective;

▪reviewing compensation tally sheets on our executive officers;

▪assisting with review and disclosures regarding the executive compensation programs; and

▪reviewing the Compensation Committee’s annual calendar and related governance matters.

Representatives from Exequity attended meetings of the Compensation Committee pertaining to 2021 executive compensation decisions, and also participated in executive sessions as requested by the Compensation Committee.

Role of Benchmarking. The Compensation Committee uses compensation market data as a reference for understanding the competitive positioning of each element of our compensation program and of total compensation. The Compensation Committee generally requests these market studies from its independent consultant from time to time, as the Compensation Committee deems appropriate. Market data informed compensation-related decisions as we set pay levels for our NEOs at the beginning of 2021.

In referencing this market data, the Compensation Committee does not manage total compensation for our NEOs within a prescribed competitive position or percentile of the compensation market. Rather, the Compensation Committee reviews compensation for each NEO relative to market data and considers other internal and external factors when exercising its business judgment as to compensation decisions. Other factors material to the Compensation Committee’s deliberations includes objective measurements of business performance, accomplishment of compliance, strategic, and financial objectives, the development and retention of management talent, enhancement of shareholder value, and other matters the Compensation Committee deems relevant to our short-term and long-term success.


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Compensation Discussion and Analysis

With respect to 2021 compensation decisions, the Compensation Committee referenced the market study that was conducted by Exequity at the end of 2020. The peer group used in that study was proposed by Exequity and approved by the Compensation Committee and included companies representing consumer finance and financial technology companies similar in size to the Company in terms of revenues and market capitalization. Peer group data was sourced from the most recently filed proxy statements for each peer company. In addition, the Compensation Committee also reviews general industry survey data as a secondary reference. Survey data was sourced from Aon’s 2019 Total Compensation Management (TCM) Survey: U.S. Executive and Senior Management.

Peer Group

Ally Financial Inc.

Euronet Worldwide, Inc.

OneMain Holdings, Inc.

Black Knight, Inc.

FirstCash, Inc.

PRA Group, Inc.

Credit Acceptance Corporation

Genpact Limited

Santander Consumer USA Holdings Inc.

Discover Financial Services

Green Dot Corporation

SLM Corporation

Encore Capital Group, Inc.

Jack Henry & Associates, Inc.

Synchrony Financial

Enova International, Inc.

LendingTree, Inc.

WEX Inc.

ePlus inc.

Navient Corporation


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Compensation Discussion and Analysis

Components of Our 2021 Executive Compensation Programs

Primary Components

The three primary components of each NEO’s total direct compensation for 2021 were as follows:


Component						Terms and Objectives
Base Salary						▪Fixed amount of compensation for performing day-to-day job responsibilities intended to reflect the scope of an executive’s role. ▪Reviewed annually for potential adjustment based on factors such as market levels, individual performance, and scope of responsibility.
Annual Cash Incentive Award						▪Variable performance-based award opportunity based on achievements with respect to financial and operational performance goals. ▪Motivate executives to improve financial and operational performance year-over-year. ▪Reward executive officers for delivering on financial and operational goals.
Long-Term Equity Incentive Award						▪To balance long-term performance and retention, long-term equity incentive awards for 2021 were allocated as follows: 50% performance shares, 25% stock options, and 25% time-based restricted stock awards. ▪ Aligns executive interests with shareholders. ▪ Motivate executive officers to achieve superior business results over long-term. ▪Enhance alignment between management and shareholder interests. ▪Support stock ownership requirements.

These components are designed to be competitive with employers with whom we compete for executive talent and to support our compensation program objectives. The Compensation Committee does not set a prescribed mix or allocation for each component, but rather focuses on total direct compensation when making compensation decisions for our executives. In making these decisions, the Compensation Committee also considers the following related factors: performance against corporate and individual objectives for the fiscal year, performance of general management responsibilities, the value of any unique skills and capabilities, contributions as a member of the executive management team, and competitive market considerations.

Total direct compensation for our executive officers emphasizes variable and performance-based compensation more so than for our other employees. This reflects our philosophy that performance-based compensation opportunities – linked to strategic, financial, operating and stock price performance – should increase as overall responsibility increases.


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Compensation Discussion and Analysis

Compensation Outcomes and Pay Mix for 2021

The following graphs demonstrate our pay for performance philosophy by showing the mix of target pay for 2021 for our CEO and other NEOs as a group:

https://cdn.kscope.io/04588e3f73829a811704336e792c27bf-chart-3be126e04fb640e3b82.jpg

https://cdn.kscope.io/04588e3f73829a811704336e792c27bf-chart-5dd3f4aceb3245eb89c.jpg

Base Salaries

The Compensation Committee views base salaries as fixed compensation. Typically, it reviews base salaries annually and adjusts them as necessary to ensure that salary levels remain appropriate and competitive with the market, as well as reflective of each executive’s role, responsibilities and performance. However, in rare instances the Committee may adjust them in the interim as necessary to ensure they remain appropriate, competitive and reflective of an executive’s position, including any change in responsibilities.

In November 2020, in preparation for the Spin-Off, the Compensation Committee, with the assistance of Exequity, adjusted base salaries for our NEOs in light of the changes in titles and expanded roles and responsibilities they would have following the Spin-Off, and in order to align their compensation to the competitive market. Accordingly, the Compensation Committee approved the base salaries as set forth below, which remained in effect during 2021.


Named Executive Officer	2021 Base Salary ($)
Steven A. Michaels	$	900,000
Curtis L. Doman	$	550,000
Brian J. Garner	$	475,000
Marvin A. Fentress	$	425,000


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Compensation Discussion and Analysis

Annual Cash Incentive Awards

Annual cash incentive awards made through our Annual Incentive Program (“AIP”) provide the opportunity to earn cash awards based on the achievement of performance targets determined by the Compensation Committee at the beginning of the year. The amount earned will vary based on the degree to which the performance target is achieved, subject to the Compensation Committee’s review.

In connection with the Spin-Off, the AIP target award opportunity for each NEO was also adjusted to reflect his new role and responsibilities, and to achieve market competitiveness. The target awards set forth below were determined at the end of 2020 and remained in effect for 2021.


Named Executive Officer	2021 Target % of Salary
Steven A. Michaels	133	%
Curtis L. Doman	100	%
Brian J. Garner	100	%
Marvin A. Fentress	76	%

Performance Measures and Weights. During the first quarter of 2021, the Compensation Committee established the performance metrics that would be used in the 2021 AIP, the weighting for each of those metrics, as well as threshold, target and maximum levels of performance for each of the performance metrics, that corresponded to a threshold, target, and maximum incentive payout level.

The following were the performance measures and weights for the 2021 AIP for each NEO:


Performance Measure	Weight
Consolidated Adjusted EBITDA	60	%
Progressive Leasing GMV Generated from E-commerce Platforms	20	%
Compliance and Strategic Initiatives	20	%

Consolidated Adjusted EBITDA used for management incentive purposes is Consolidated GAAP Earnings Before Income Taxes, adjusted to exclude: (i) depreciation and amortization expense; (ii) interest expense; (iii) stock-based compensation expense; (iv) transaction expenses incurred in our acquisition of Four Technologies; (v) losses incurred by Four Technologies; (vi) Vive’s change in allowance for loan losses; and (vii) losses from certain new strategic initiatives that were not included in our financial plan for 2021. Progressive Leasing GMV Generated from E-commerce Platforms is the GMV from Progressive Leasing lease-to-own transactions that are completed and executed online. The Compliance and Strategic Initiatives performance measure is based on the achievement of the five initiatives described further below.

The Compensation Committee selected Adjusted EBITDA as one of its key performance metrics for the 2021 cash incentive award program because it is a key metric used by management and investors to monitor and assess the Company’s financial performance. It is also widely used by investors for valuation purposes and for comparing the Company’s performance against the performance of others in its industry. Accordingly, the Compensation Committee assigned it a significant weighting of 60%. Furthermore, the Compensation Committee determined that Adjusted EBITDA would be calculated consistently with the way in which our publicly disclosed non-GAAP Adjusted EBITDA measures are calculated, subject to certain other adjustments.(1) For a comprehensive discussion of our GAAP financial results, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

The Compensation Committee selected Progressive Leasing GMV Generated from E-commerce Platforms as another key metric for the 2021 cash incentive award program because our management team and Board believe e-commerce platforms are an increasingly important source of growth for our GMV, revenues and earnings, and that a focus on e-commerce will enable us to win new customers who prefer shopping on e-commerce platforms, while preserving our relationships with existing customers who may decide to shop online, as opposed to in-


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Compensation Discussion and Analysis

person at brick and mortar store locations. The Committee also considered that the dollar value of merchandise obtained by consumers through e-commerce platforms has increased significantly in recent years, and is expected to continue increasing in 2022 and future years. For these reasons, the Committee assigned the e-commerce metric a weighting of 20%.

The Compensation Committee weighted the remaining portion of the annual cash incentive award toward the Company’s key compliance and strategic initiatives. The Compensation Committee believes this metric emphasizes the importance of recognizing progress in areas beyond financial results that support the Company’s business strategy and values and is critical to creating sustained shareholder value in the future. For these reasons, the Committee assigned the compliance and strategic initiatives metric a weighting of 20%.

Performance Goals and Results. The Compensation Committee established goals for each of the performance measures in the 2021 AIP during the first quarter of 2021, including a threshold, target, and maximum performance goal that corresponded to a threshold, target, and maximum incentive payout level. For both the Adjusted EBITDA and e-commerce measure, the payout range was from 0% to 200% of target and, for the Compliance and Strategic Initiatives measure, the payout range was from 0% to 125% of target (based on the number of compliance/strategic-related goals achieved).

The following tables summarize the performance goals, performance results, and related incentive payout levels as a percentage of target for each NEO:


	Weight	Plan Performance Range					Actual Performance and Payout2
Metric		Threshold	Target Zone1			Maximum	12/31/2021	% of Target	Payout Calculation
Adjusted EBITDA	60%	$341.4	$373.6	—	$385.0	$417.3	$390.7	103.0%	113.7	%
GMV Generated from E-commerce Platforms	20%	$292.6	$320.2	—	$330.0	$357.6	$326.5	100.4%	100.0	%
Compliance/Strategic	20%		4 Projects			5 Projects	5 Projects	100.0%	125.0	%
Total Payout									113.2	%

1.If actual performance falls anywhere within the dollar range, then payout is at 100% of target. 2.Actual performance was adjusted to exclude the impact of: (i) transaction costs associated with the Company’s acquisition of Four; (ii) stock-based compensation; (iii) change in Vive's allowance for loan losses; (iv) losses incurred by Four Technologies; and (v) losses incurred with other strategic new product initiatives.

Based on the 2021 AIP performance metrics and weightings described above, and the level of performance achieved for each of those metrics, our NEOs received the 2021 AIP payments described in the table below.


Named Executive Officer	2021 Target Annual Incentive ($)		Award Earned Under Annual Incentive Plan Based on 2021 Performance ($)
Steven A. Michaels	$	1,200,000	$	1,358,600
Curtis L. Doman	$	550,000	$	622,700
Brian J. Garner	$	475,000	$	537,800
Marvin A. Fentress	$	325,000	$	367,900


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Compensation Discussion and Analysis

Long-Term Equity Incentive Awards

PROG Holdings' long-term equity incentive awards are intended to:

▪reward the achievement of business objectives that the Compensation Committee believes will benefit our shareholders;

▪align the interests of our senior management with those of our shareholders; and

▪assist with retaining our senior management to ensure continuity of leadership.

Beyond these objectives, the Compensation Committee also considers market design practices, equity dilution, accounting expense, and other internal considerations when deciding on the structure and size of equity awards.

Award Type and Mix. Each year the Compensation Committee grants equity awards to our NEOs; however, the award type and mix may change from time to time. In order to balance performance and retention incentives, the 2021 equity awards were made in the form of performance share units, stock options, and time-based restricted stock awards.

The graphic below depicts our 2021 equity award mix for all executives:

https://cdn.kscope.io/04588e3f73829a811704336e792c27bf-chart-2ed01058ba3a4df68e3.jpg


2021 Equity Awards	Objective	Provisions
Performance Shares	▪Focus participants on the fundamentals of growing our business and increasing the level of our earnings over the long term. ▪One-year performance period ensures greater validity in our forecasts especially in light of the COVID-19 pandemic, high levels of inflation not seen in more than forty years, and change in status as a new standalone public Company.	▪Number of performance shares earned based on one-year Company performance. ▪Earned awards are subject to additional time-based vesting, with vesting occurring in three equal increments following the first, second, and third anniversaries of the grant.
Stock Options	▪Aligns executives with shareholders, with the value of an award realized only if the stock price appreciates following the date of grant.	▪Pro rata annual three-year vesting, with vesting occurring in three equal increments following the first, second, and third anniversaries of the grant.
Restricted Stock	▪Addresses competitive concerns with a focus on retaining our key executives needed to realize our long-term performance objectives.	▪Pro rata annual three-year vesting, with vesting occurring in three equal increments following the first, second, and third anniversaries of the grant.


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Compensation Discussion and Analysis

Target Awards. Target awards for 2021 were determined by the Compensation Committee at the end of 2020 in connection with the Spin-Off and are intended to be reflective of each NEOs role and responsibilities as part of the leadership team of a new standalone public Company. The table below reflects 2021 target award levels for our NEOs:


Named Executive Officer	2021 LTIP Target % of Salary
Steven A. Michaels	489	%
Curtis L. Doman	300	%
Brian J. Garner	189	%
Marvin A. Fentress	200	%

The LTI target awards that were granted to our executive officers at the beginning of 2021 are set forth in the tables below, expressed in terms of both share amounts and dollar value:


Named Executive Officer	Stock Options 25%			Restricted Stock 25%			Performance Shares 50%			2021 Target LTI Value1
Steven A. Michaels	64,710	$	1,100,000	23,460	$	1,100,000	46,890	$	2,200,000	$	4,400,000
Curtis L. Doman	24,270	$	412,500	8,790	$	412,500	17,580	$	825,000	$	1,650,000
Brian J. Garner	13,260	$	225,000	4,800	$	225,000	9,600	$	450,000	$	900,000
Marvin A. Fentress	12,510	$	212,500	4,530	$	212,500	9,060	$	425,000	$	850,000

1.The LTI dollar value of the target awards presented in the table above differ from the aggregate grant date fair values for our NEOs’ LTI awards as reported in the 2021 Summary Compensation Table and the Grants of Plan-Based Awards in Fiscal Year 2021 Table due to different dates used to value the awards versus the date on which the awards were granted.

Performance Shares Performance Measures and Weights

The following were the performance measures and weights for the performance shares granted in 2021:


Performance Measures	Weights
Consolidated Adjusted Revenue	60	%
Consolidated Adjusted Pretax Income	20	%
Return on Capital	20	%

Consolidated Adjusted Revenue is the consolidated revenues of PROG Holdings, Inc., reduced for the amount of credit loss provision expense at Vive, adjusted for Vive's change in credit loss allowance, less Four's revenues. Consolidated Adjusted Pretax Income is consolidated GAAP earnings before income taxes, adjusted to exclude the following items: (i) Vive’s change in allowance for loan losses; (ii) transaction costs incurred in our acquisition of Four Technologies; (iii) losses incurred by Four Technologies; (iv) interest expense incurred on the Company’s $600 million of senior unsecured notes, which were issued in November 2021; and (v) the losses from certain new strategic initiatives that were not included in our financial performance plan for 2021. Return on Capital is measured by dividing adjusted net operating profit (which we define as operating profit adjusted for certain nonrecurring items as shown in Appendix A) after tax by the sum of average net debt (which we define as debt less cash and cash equivalents) and average total shareholders equity, calculated as the average of the beginning and end of year.

The Compensation Committee selected these measures to focus participants on growing our business and on sustaining and improving the quality of our earnings.


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Compensation Discussion and Analysis

Performance Goals and Results

The Compensation Committee established goals for each of the performance measures applicable to performance shares, including a threshold, target, and maximum performance goal that corresponded to a threshold, target, and maximum number of shares that could be earned. The number of shares that could be earned ranged from 0% to 200% of target. Payouts for results between these levels are interpolated, with scales that vary by business segment. If the results are less than threshold, then no shares would be earned.

The following tables summarize the performance goals, performance results, and related earning levels as a percentage of target for each NEO:


	Weight	Plan Performance Range					Actual Performance and Payout
Metric		Threshold	Target1			Maximum	12/31/2021	% Target	Payout %
Consolidated Adjusted Revenue	60%	$2,525	$2,688	—	$2,742	$2,892	$2,659	97.9%	88.5%
Consolidated Adjusted Pretax Income	20%	$291	$318	—	$328	$355	$341	105.6%	141.3%
Return on Capital	20%	18.2%	21.0%	—	21.8%	24.6%	24.3%	113.5%	184.7%
Payout		25%	100%			200%			118.3%

1.If actual performance falls anywhere within the dollar range, then payout is at 100% of target.

The performance shares earned by the NEOs based on 2021 performance will vest in three annual increments on March 7, 2022, 2023, and 2024.

Based on the above performance results and incentive calculations, the table below shows the dollar value of the final LTI awards earned by our NEOs for 2021 performance.


Named Executive Officer	Award Earned Under Long-Term Incentive Plan ($)(1)
Steven A. Michaels	$	4,816,131
Curtis L. Doman	$	1,805,553
Brian J. Garner	$	986,084
Marvin A. Fentress	$	930,546

1.Calculated as the grant date fair value of stock options, restricted shares, and performance shares granted on March 3, 2021 for NEOs. The performance shares are based on the number of shares earned based on the payout percentages disclosed in the tables above.


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Compensation Discussion and Analysis

Executive Compensation Policies

Stock Ownership Guidelines. The Compensation Committee has adopted stock ownership guidelines to further align the interests of senior executives with our shareholders. The table below summarizes the current guidelines that apply to our NEOs. As of December 31, 2021, our executive officers either meet or are on track to meet guidelines within the five-year timeframe specified by these guidelines.


Feature						Provision
Required levels						5x base salary: Chief Executive Officer 3x base salary: Founder, Chief Innovation Officer and Chief Financial Officer 2x base salary: General Counsel and Corporate Secretary
Shares counted toward guidelines						Stock owned outright Shares held in retirement accounts Unvested time-based restricted stock units and restricted stock awards Earned but unvested performance shares “In the money” value of vested but unexercised stock options

Clawback Policy. The Compensation Committee has adopted a policy that provides that annual incentive and equity awards to our executive officers may be recouped if we restate our consolidated financial statements. Under this policy, covered employees including our NEOs may be required to repay to the Company the difference between the amount of incentives and awards received and the amount that would have been payable under the restated financial statements.

Securities Trading Policy. As part of our Insider Trading Policy, all of our officers and directors are prohibited from trading any interest or position relating to the future price of our securities. These prohibited transactions include trading in puts, calls, short sales, or hedging transactions, but do not generally prohibit other purchases and sales of our common stock made in compliance with the limitations contained in our Insider Trading Policy. Pledging of Company securities is prohibited under our Insider Trading Policy.

Tally Sheets. The Compensation Committee reviews tally sheets for select executives. These tally sheets provide a comprehensive view of target, actual, and contingent executive compensation payouts under a variety of termination and performance scenarios. The tally sheets allow the Compensation Committee to understand the cumulative effect of prior pay decisions and stock performance, as well as the retentive ability of existing LTIs, severance, and change-in-control arrangements. The tally sheets are intended to facilitate the Compensation Committee’s understanding of the nature and amounts of total compensation under our executive compensation program and to assist the Compensation Committee in its overall evaluation of our program.

Executive Benefits and Perquisites

Our executive compensation program also provides certain benefits and perquisites to our NEOs. The value of these benefits and perquisites represents a small portion of an NEO’s overall total compensation opportunity and does not materially influence the Compensation Committee’s decisions with respect to the salary and incentive elements of the compensation of our NEOs. The Compensation Committee periodically reviews the perquisites and other personal benefits that we provide to senior management to ensure they remain in the best interests of the Company and its shareholders.

After the Spin-Off, the Company no longer owns any aircraft and, therefore, the perquisite of personal use of Company aircraft by executives was discontinued. To ease the burden on Mr. Michaels and his family moving to the Company’s Salt Lake City, Utah headquarters from the Company’s prior headquarters in Atlanta, Georgia, the Compensation Committee approved up to $250,000 in relocation assistance for Mr. Michaels. In addition, the Compensation Committee agreed to reimburse Mr. Michaels for commuting expenses for himself and his family prior to their permanent relocation to the Salt Lake City area. Mr. Michaels will be provided tax relief to the extent these arrangements resulted in imputed income. The Compensation Committee believes the benefits of these arrangements with Mr. Michaels outweigh the relatively minor cost associated with them. The value of those


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Compensation Discussion and Analysis

benefits to Mr. Michaels for 2021 is reflected in the “Other” column in the Summary Compensation Table appearing on page 68 of this proxy statement.

Healthcare Benefits. Our NEOs receive a full range of standard benefits, including the medical, dental, vision, life and voluntary disability coverage available to our employees generally.

Retirement Plans. Our NEOs participate on the same basis as other employees in our 401(k) Retirement Savings Plan, which we refer to as our 401(k) Plan, for all full-time employees. Employees with at least one year of service who meet certain eligibility requirements are eligible for a Company match. Our 401(k) Plan uses a safe harbor formula that allows employees to contribute up to 75% of their annual compensation with 100% matching by the Company on the first 3% of compensation and an additional 50% match on the next 2% of compensation. All matching by the Company is immediately vested under the new plan formula and any prior contributions will continue to vest under the preceding vesting schedule.

Under the Company’s Nonqualified Deferred Compensation Plan, which we refer to as the Deferred Compensation Plan, a select group of management or highly compensated employees are eligible to elect to defer up to 75% of their base salary and up to 75% of their annual bonus on a pre-tax basis. Should they so elect, the Company will make discretionary matching contributions under the same formula that applies for our 401(k) Plan, with the benefit not exceeding the 401(k) Plan statutory limit.

Severance Arrangements. It has been our practice to utilize an executive severance plan and other severance and change-in-control arrangements for select executives to provide these senior leaders certain benefits in the event their employment is terminated by us without cause or after a change in control of the Company. We believe these arrangements assist us in hiring executives and in retaining key leaders who are critical to the ongoing stability of our business. We further believe they foster objectivity should they be asked to evaluate proposals that may result in the loss of their employment. Following the Spin-Off, we entered into new updated severance and change-in-control arrangements with our executives that will be reflective of current market practices. See “Executive Compensation – Potential Payments Upon Termination or Change-in-Control.”

Tax Considerations

Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to public companies for annual compensation over $1 million (per individual) paid to certain executive officers. As a result, most of the compensation payable to any of our NEOs in excess of $1 million annually will not be fully deductible. When setting executive compensation, we consider many factors, such as attracting and retaining executives and providing appropriate performance incentives. We also consider the after-tax cost to the Company in establishing our executive compensation programs, both individually and in the aggregate, but tax deductibility is not our sole consideration, and, in general, it has not been a material factor in our considerations when determining the amounts of compensation to be paid to our NEOs. Furthermore, the Compensation Committee expects in the future to authorize compensation in excess of $1 million to our executives that will not be fully deductible when it believes doing so is in the best interests of the Company and its shareholders.


66						PROG Holdings, Inc. 2022 Proxy Statement

Compensation
Committee Report

The Compensation Committee operates pursuant to a written charter adopted by the Board of Directors and available through the Company’s website, investor.progholdings.com. The Compensation Committee is composed of four independent members of the board as defined under the listing standards of the New York Stock Exchange and under the committee’s charter. The Compensation Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities with respect to executive and director compensation.

In keeping with its responsibilities, the Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis section included in the Proxy Statement related to the Company's 2022 Annual Meeting of Shareholders and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in the Proxy Statement and incorporated into the Annual Report on Form 10-K.

This report is respectfully submitted by the Compensation Committee of the Board of Directors.

Douglas C. Curling (Chair)

Kathy T. Betty

Cynthia N. Day

Ray M. Robinson


PROG Holdings, Inc. 2022 Proxy Statement						67

Executive Compensation

The following Summary Compensation Table summarizes the total compensation earned by, or awarded to, our named executive officers in 2021, 2020 and 2019, as applicable.

Summary Compensation Table


Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards(1) ($)	Option Awards(2) ($)	Non-Equity Incentive Plan Compensation(3)($)	All Other Compensation (4)($)		Total ($)
Steven A. Michaels(5)	2021	900,000	—	3,705,015	1,111,116	1,358,600	383,300	(6),(8)	7,458,031
Chief Executive Officer	2020	647,404	—	1,453,939	304,526	1,208,400	111,724	(7)	3,725,993
	2019	625,000	—	1,056,510	354,971	604,900	26,031		2,667,412
Curtis L. Doman(9)	2021	550,000	—	1,388,820	416,733	622,700	11,600	(6)	2,989,853
Chief Innovation Officer	2020	485,649	—	989,725	314,665	928,900	12,210		2,731,149
	2019	475,000	—	1,071,139	359,672	463,300	12,010		2,381,121
Brian J. Garner(10)	2021	475,000	—	758,400	227,683	537,800	11,600	(6)	2,010,483
Chief Financial Officer	2020	323,827	—	243,603	79,834	283,500	5,900		936,664

Marvin A. Fentress(11)	2021	425,000	—	715,740	214,805	367,900	11,600	(6)	1,735,045
General Counsel, Corporate Secretary	2020	400,196	—	618,910	201,852	540,000	13,722		1,774,680

1Represents the aggregate grant date fair value of awards of time-based RSUs, RSAs, and performance shares recognized by the Company as required by Financial Accounting Standards Board Codification Topic 718. See Note 13 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of the assumptions used in calculating these amounts. For the time-based restricted shares, the fair value is calculated using the closing stock price on the date of grant. For the performance shares, the fair value is also the closing stock price on the date of grant, multiplied by a number of shares that is based on the targeted attainment level, which represents the probable outcome of the performance condition on the date of grant. The amounts reported above for equity-related awards and, therefore, total compensation, may not represent the amounts that each executive actually realizes from the awards. Whether, and to what extent, an executive realizes value will depend on a number of factors, including stock price and, with respect to the Company's Long-Term Incentive Award Program, continued employment.

2Represents the grant date fair value of awards of stock options recognized by the Company as required by the Financial Accounting Standards Board Codification Topic 718. The Company determines the fair value of stock options on the grant date using a Black-Scholes-Merton option pricing model that incorporates expected volatility, expected option life, risk-free interest rates, and expected dividend yields. See Note 13 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of the assumptions used in calculating these amounts. The amounts reported above for equity-related awards and, therefore, total compensation, may not represent the amounts that each executive actually realizes from the awards. Whether, and to what extent, an executive realizes value will depend on a number of factors, including stock price and, with respect to the Company's Long-Term Incentive Award Program, continued employment.

3Reflects the value of the cash bonus earned under the Company's Annual Cash Incentive Award Program.

4We provide a limited number of perquisites to our NEOs and value those perquisites based on their aggregate incremental cost to the Company. Prior to the Spin-Off, our NEOs could use the Company's aircraft from time to time for non-business use. We calculated the incremental cost of Company aircraft use based on the average variable operating costs to the Company. Variable operating costs include fuel costs, maintenance fees, positioning costs, catering costs, landing/ramp fees, and the amount, if any, of disallowed tax deductions associated with the personal use of Company aircraft. The total annual variable operating costs are divided by the annual number of flight hours flown by the aircraft to derive an average variable cost per flight hour. This average variable cost per flight hour is then multiplied by the flight hours flown for personal use to derive the incremental cost to the Company. This method excludes fixed costs that do not change based on usage, such as pilots’ and other employees’ salaries and benefits and hangar expenses. Aggregate incremental cost, if any, of travel by the executive’s family or other guests when accompanying the executive is also included. After the Spin-Off, the Company no longer owned any aircraft and, therefore, this perquisite was discontinued.

5Mr. Michaels was appointed the Company's Chief Executive Officer effective as of December 1, 2020 in connection with the Spin-Off. Prior to that, Mr. Michaels served as Chief Executive Officer of the Company's Progressive Leasing operating segment since July 31, 2020. Prior to that, Mr. Michaels had served as the Company's Chief Financial Officer and President of Strategic Operations.

6Includes matching contributions in the amount of $11,600 made by the Company to Messr. Michaels’, Doman’s, Garner's and Fentress' account, as applicable, in the Company’s 401(k) plan.

7Includes matching contributions in the amount of $11,600 made by the Company to Messr. Michaels' account as part of the Nonqualified Deferred Compensation plan. This amount is also included in the Nonqualified Deferred Compensation section below.

8Included relocation expenses in the amount of $360,100 reimbursed by the Company of which $159,524 represented the reimbursement of taxes.

9Mr. Doman was appointed the Company’s Chief Innovation Officer effective as of December 1, 2020 in connection with the Spin-Off. Prior to that, Mr. Doman served as Chief Innovation Officer of the Company’s Progressive Leasing operating segment.

10Mr. Garner was appointed the Company’s Chief Financial Officer effective as of December 1, 2020 in connection with the Spin-Off. Mr. Garner was not an NEO for the fiscal year ended December 31, 2019.

11Mr. Fentress was appointed the Company’s General Counsel and Corporate Secretary effective as of December 1, 2020 in connection with the Spin-Off. Mr. Fentress was not an NEO for the fiscal year ended December 31, 2019.


68						PROG Holdings, Inc. 2022 Proxy Statement


Executive Compensation

Grants of Plan-Based Awards in Fiscal Year 2021

Our Compensation Committee granted restricted stock, stock options and performance shares to our named executive officers during 2021. Set forth below is information regarding awards granted in 2021. See “Outstanding Equity Awards at 2021 Fiscal Year End” for the number of awards outstanding on December 31, 2021.


Name	Grant Date	Potential Payouts Under Non- Equity Incentive Plan Awards(1)			Estimated Future Payouts Under Equity Incentive Plan Awards(2)			All Other Stock Awards: Number of Shares of Stock or Units(3)	All Other Option Awards: Number of Securities Underlying Options(4)	Exercise or Base Price of Option Awards ($/Sh)	Grant Date Fair Value of Stock and Option Awards(5) ($)
		Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)
Steven A. Michaels		300,000	1,200,000	2,220,000
	3/3/2021				11,723	46,890	93,780				2,201,017
	3/3/2021							23,460			1,101,212
	3/3/2021								64,710	46.94	1,111,116
Curtis L. Doman		138,000	550,000	1,018,000
	3/3/2021				4,395	17,580	35,160				825,205
	3/3/2021							8,790			412,603
	3/3/2021								24,270	46.94	416,733
Brian J. Garner		119,000	475,000	879,000
	3/3/2021				2,400	9,600	19,200				450,624
	3/3/2021							4,800			225,312
	3/3/2021								13,260	46.94	227,683
Marvin A. Fentress		81,000	325,000	601,000
	3/3/2021				2,265	9,060	18,120