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Dayforce, Inc. (NYSE:DAY), a leader in prepackaged software services with a market capitalization of $9.1 billion, disclosed its 2025 Management Incentive Plan (MIP) and equity awards for key executives in a recent SEC filing. The plan, approved on March 5, 2025, comes as the company maintains impressive gross profit margins of 50.7% and projects continued net income growth. According to InvestingPro analysis, the stock currently trades at $57.23, suggesting potential upside based on their proprietary Fair Value model.
The MIP sets out performance-based incentive compensation for eligible employees, including named executive officers (NEOs), based on achieving specific financial goals. These goals include revenue growth, free cash flow margin, and sales per employee per month annual contract value. The company has demonstrated strong execution with revenue growth of 16.3% in the last twelve months, though InvestingPro data reveals 9 analysts have recently revised their earnings expectations downward for the upcoming period. The incentive targets are a mix of cash and restricted stock units (RSUs), with payouts ranging from 0% for not meeting threshold goals to a maximum of 167% for surpassing all targets.
David D. Ossip, Chair and CEO, has an incentive target of 100% of his annual base salary, while other executives have targets ranging from 25% to 80%. Additionally, on the same day, the company granted equity awards to NEOs under the 2018 Equity Incentive Plan. This includes a significant grant of RSUs and performance stock units (PSUs) to Mr. Ossip valued at over $16 million, with other executives receiving proportional awards based on their roles.
The equity awards are subject to vesting conditions tied to the company’s financial performance over a three-year period, including free cash flow and revenue growth compound annual growth rates. The PSUs also have goals related to total shareholder return performance against the S&P 1500 Application Software (ETR:SOWGn) Index.
In conjunction with these announcements, Dayforce also reported an adjustment to Mr. Ossip’s annual base salary, increasing it from $800,000 to $1,000,000, effective immediately. This adjustment reflects ongoing evaluations of executive compensation structures by the company’s Board and Compensation Committee.
The information provided in this article is based on Dayforce, Inc.’s recent SEC filing.
In other recent news, Dayforce, Inc. has announced a restructuring plan that includes a workforce reduction of about 5%, aiming for cost savings of approximately $65 million for fiscal year 2025. The company expects to incur pre-tax restructuring charges between $18 million to $21 million in the first quarter of 2025. Additionally, Dayforce successfully amended its credit agreement, resulting in lower interest rates on its term and revolving loans, facilitated by JPMorgan Chase (NYSE:JPM) Bank. Analysts have been adjusting their outlooks on Dayforce, with BMO Capital Markets lowering its price target to $83 while maintaining an Outperform rating. Similarly, Scotiabank (TSX:BNS) reduced its target to $72 but kept a Sector Perform rating, citing concerns over Dayforce’s revenue growth. Stifel also adjusted its price target to $85, maintaining a Buy rating, following Dayforce’s fourth-quarter results that showed mixed performance. Despite these adjustments, analysts remain optimistic about Dayforce’s long-term prospects, citing strong bookings and sales momentum. These developments reflect ongoing strategic and financial adjustments as Dayforce navigates its growth trajectory.
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