SEC Form DEF 14A filed by American Public Education Inc.

The 2024 Annual Meeting of Stockholders of American Public Education, Inc. (the “Annual Meeting”) will be held on May 17, 2024 at 8:30 a.m. Eastern Daylight Time as a virtual meeting of stockholders held over the Internet. Stockholders will be able to attend the Annual Meeting, vote, and submit questions during the Annual Meeting at www.virtualshareholdermeeting.com/APEI2024. The Annual Meeting will be held for our stockholders to consider and vote on the following proposals:

In addition, any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof will be considered. Management is presently aware of no other business to come before the Annual Meeting.

Each outstanding share of American Public Education, Inc. common stock (Nasdaq: APEI) entitles the holder of record at the close of business on March 21, 2024 to receive notice of and to vote at the Annual Meeting or any adjournment or postponement of the Annual Meeting.

We are pleased to take advantage of Securities and Exchange Commission rules that allow us to post these materials on the Internet, which enables us to provide stockholders with the information that they need more quickly, while lowering our costs of printing and delivery and reducing the environmental impact of our Annual Meeting.

Whether or not you expect to attend the meeting, we urge you to vote your shares before the meeting by Internet, telephone, or by signing, dating, and returning the proxy card you will receive if you request printed materials. If you choose to attend the virtual Annual Meeting, you may still vote your shares online at the meeting, even though you have previously voted or returned your proxy by any of the methods described in this Proxy Statement. If your shares are held in a bank or brokerage account, please refer to the materials provided by your bank or broker for voting instructions.

All stockholders are extended a cordial invitation to attend the meeting.

The purpose of the Annual Meeting is for our stockholders to consider and act upon the proposals described in this Proxy Statement and any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof. In addition, management will report on the performance of the Company and respond to questions from stockholders.

At the Annual Meeting, our stockholders will be asked to consider and vote upon the following three proposals:

In addition, any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof will be considered. Management is presently not aware of any other business to come before the Annual Meeting.

The Board recommends that you vote FOR each of the nominees to the Board (Proposal No. 1), FOR approval of the compensation of our named executive officers (Proposal No. 2), and FOR ratification of the appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (Proposal No. 3).

Pursuant to the “notice and access” rules of the Securities and Exchange Commission (the “SEC”), we have elected to provide stockholders access to our proxy materials over the Internet. Accordingly, we sent a Notice of Internet Availability of Proxy Materials (the “Notice”) on or about April 4, 2024 to all of our stockholders as of the close of business on March 21, 2024 (the “Record Date”). The Notice includes instructions on how to access our proxy materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our annual meetings on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

Our Annual Report to Stockholders and this Proxy Statement are available at www.proxyvote.com.

The Annual Meeting will be a completely virtual meeting to be held over the Internet. The virtual meeting will enable expanded stockholder participation for those who might not otherwise attend in person.

Whether you are a stockholder of record or hold your shares in “street name,” you may participate in and vote online at the Annual Meeting by visiting www.virtualshareholdermeeting.com/APEI2024 and using the 16-digit control number included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials to enter the Annual Meeting.

The virtual meeting platform is fully supported across common browsers (Microsoft Edge, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software. Participants should ensure that they have a strong internet or Wi-Fi connection to participate in the Annual Meeting. Participants should also give themselves plenty of time to dial-in to the conference call or log in and ensure that they can hear audio prior to the start of the Annual Meeting. We encourage stockholders wishing to attend the Annual Meeting to visit www.virtualshareholdermeeting.com/APEI2024 in advance of the meeting to verify their internet connection.

If you have questions regarding how to attend and participate in the Annual Meeting or encounter any technical difficulties with the virtual meeting platform on the meeting day, please call 844-986-0822 (Toll Free) or 303-562-9302 (International Toll). Technical support will be available starting at 8:15 a.m. EDT on May 17, 2024.

If you wish to submit a question, you may do so in a few ways. If you want to submit a question before the meeting, then beginning May 1, 2024 and until 11:59 p.m. EDT on May 16, 2024, you may log into www.proxyvote.com and enter your 16-digit control number. Once past the login screen, click on “Question for Management,” type in your question or comment, and click “Submit.” Alternatively, if you want to submit your question or make a comment during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/APEI2024, type your question into the “Ask a Question” field, and click “Submit”. Any e-mailed questions or comments will need to include your 16-digit control number in order to be addressed at the meeting.

Questions and comments submitted via the virtual meeting platform that are pertinent to meeting matters will be addressed during the meeting. Consistent with our approach when the annual meetings were held in person, questions or comments that are not related to the proposals under discussion, are about personal concerns not shared by stockholders generally, or use blatantly offensive language may be ruled out of order. In the unlikely event that the volume of questions increases to the point that time constraints prohibit us from answering all pertinent questions, the remaining pertinent questions will be answered on our Investor Relations site.

A webcast of the Annual Meeting will be archived and accessible through May 17, 2025.

The Board is soliciting your vote at the Annual Meeting or at any later meeting should the scheduled annual meeting be adjourned or postponed for any reason. Stockholders will be entitled to vote at the Annual Meeting on the basis of each share held of record at the close of business on the Record Date.

If on the Record Date you hold shares of our common stock that are represented by stock certificates or registered directly in your name with our transfer agent, Equiniti Trust Company, LLC (“Equiniti”), you are considered the stockholder of record with respect to those shares, and Equiniti is sending these proxy materials directly to you on our behalf. As a stockholder of record, you may vote online at the meeting or by proxy via Internet, mail, or telephone. Whether or not you plan to attend the Annual Meeting online, you may vote over the Internet by following the instructions in the Notice. If you request printed copies of the proxy

materials by mail, you may also vote by submitting your vote by telephone or by signing and submitting your proxy card. Whether or not you plan to attend the Annual Meeting, we urge you to vote by way of the Internet, by telephone, or by filling out and returning the proxy card you will receive upon request of printed materials. If you submit a proxy but do not give voting instructions as to how your shares should be voted on a particular proposal at the Annual Meeting, your shares will be voted in accordance with the recommendations of the Board stated in this Proxy Statement.

Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before its use by (1) delivering a written notice of revocation addressed to American Public Education, Inc., Attn: Corporate Secretary, 303 West 3^rd Avenue, Ranson, West Virginia 25438, (2) submitting a duly executed proxy bearing a later date, (3) voting again by Internet or by telephone, or (4) attending the Annual Meeting and voting online. Your last vote or proxy will be the vote or proxy that is counted. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you vote at the Annual Meeting or specifically so request.

If on the Record Date you hold shares of our common stock in an account with a brokerage firm, bank, or other nominee, then you are a beneficial owner of the shares and hold such shares in street name, and these proxy materials will be forwarded to you by that organization or person. As a beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares held in its account, and the nominee has enclosed or provided voting instructions for you to use in directing it how to vote your shares. The nominee that holds your shares, however, is considered the stockholder of record for purposes of voting at the Annual Meeting. Because you are not the stockholder of record, you may not vote your shares online at the Annual Meeting unless you use your 16-digit control number to enter the meeting.

Whether or not you plan to attend the Annual Meeting, we urge you to vote by following the voting instructions provided to you to ensure that your vote is counted should you later decide not to attend the Annual Meeting.

If you are a beneficial owner and do not vote, and your broker, bank or other nominee does not have discretionary power to vote your shares, your unvoted shares may constitute “broker non-votes.” Unvoted shares that constitute broker non-votes will be counted for the purpose of establishing a quorum at the Annual Meeting. Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting. If you receive more than one Notice, it is because your shares are registered in more than one name or are registered in different accounts. Please follow the instructions on each Notice received to ensure that all of your shares are voted.

A list of stockholders of record as of the Record Date will be available for inspection during ordinary business hours at our offices located at 111 W. Congress Street, Charles Town, West Virginia 25414, from May 7, 2024 to the date of our Annual Meeting. Stockholders may contact our Corporate Secretary and arrangements will be made to review the records in person.

The presence at the Annual Meeting, whether online or by valid proxy, of the persons holding a majority of shares of common stock entitled to vote at the meeting will constitute a quorum, permitting us to conduct our business at the Annual Meeting. On the Record Date, there were 17,558,137 shares of common stock outstanding, held by 432 stockholders of record. Abstentions (i.e., if you or your broker mark “ABSTAIN” on a proxy) and “broker non-votes” will be considered to be shares present at the meeting for purposes of a quorum.

Broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal and generally occur because the broker (1) does not receive voting instructions from the beneficial owner and (2) lacks discretionary authority to vote the shares. Brokers and other nominees

have discretionary authority to vote on routine matters, such as the ratification of an independent public accounting firm, for clients who have not provided voting instructions. However, without voting instructions from their clients, they cannot vote on “non-routine” proposals, including the election of directors, approval of amendments to stock plans, and matters related to executive compensation.

Election of directors. Each director will be elected by the vote of the majority of the votes cast with respect to that director’s election. For purposes of electing directors, a majority of the votes cast means that the number of shares voted “FOR” a director’s election exceeds the number of the votes cast against that director’s election. Abstentions and broker non-votes are not taken into account in determining the outcome of the election of directors.

Advisory vote on executive compensation and ratification of our independent public accounting firm. Approval of the advisory vote on compensation of our named executive officers and ratification the Audit Committee’s appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2024 each requires the affirmative vote of the holders of at least a majority of the shares of common stock present or represented by proxy at the Annual Meeting and entitled to vote. Broker non-votes are not taken into account in determining the outcome of these proposals, and abstentions will have the effect of a vote against each of these proposals.

We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding common stock. We have retained Georgeson LLC to assist in the distribution of proxy materials and the solicitation of proxies from brokerage firms, fiduciaries, custodians, and other similar organizations representing beneficial owners of shares for the Annual Meeting. We have agreed to pay Georgeson a fee of approximately $12,000 plus out-of-pocket expenses. We may solicit proxies by mail, personal interview, telephone, or via the Internet through our officers, directors, and other management employees, who will receive no additional compensation for their services.

The Board has adopted Corporate Governance Guidelines (the “Guidelines”), a Code of Business Conduct and Ethics (the “Code”), a Policy for Related Person Transactions and other policies as part of our corporate governance practices and in accordance with rules of the SEC and the listing standards of The Nasdaq Stock Market (“Nasdaq”).

The Guidelines, Code, and Policy for Related Person Transactions are reviewed periodically by our Nominating and Corporate Governance Committee (the “NCG Committee”), and changes are recommended to the Board for approval as appropriate. In February 2023, the Board updated our Code to formalize our core values: be customer centric; be agile; do the right thing; be respectful and inclusive; and be accountable. In December 2023, our Board further updated the Code to memorialize our commitment to the security of our information systems and to safeguarding of personal information of our students and proprietary information of the Company.

The amended Code did not relate to or result in any waiver, explicit or implicit, of any provision of the previous version of the Code.

The Guidelines set forth a framework to assist the Board in the exercise of its responsibilities. The Guidelines cover, among other things, the composition and certain functions of the Board, director independence, stock ownership by our non-employee directors, management succession and review, Board committees, the selection of new directors, and director expectations.

The Code covers, among other things, compliance with laws, rules and regulations, conflicts of interest, corporate opportunities, confidentiality, protection and proper use of Company assets, and the reporting process for any illegal or unethical conduct. The Code is applicable to all of our officers, directors, and employees. We also have a separate code of ethics (together with the Code, the “Codes of Ethics”) that is specifically applicable to our Chief Executive Officer, Chief Financial Officer, and other Principal Officers (as defined therein).

Any waiver of either Code of Ethics for our directors, executive officers, or Principal Officers may be made only by the Board and will be promptly disclosed as may be required by law, regulation, or rule of the SEC, or Nasdaq listing standards. If we further amend either Code of Ethics or waive any provision of either Code of Ethics with respect to our Chief Executive Officer, Chief Financial Officer, or other Principal Officers, we will post the amendment or waiver on our corporate website, www.apei.com. The information on our corporate website is not incorporated by reference into this Proxy Statement.

The Guidelines and Codes of Ethics are available in the Governance section of our corporate website.

As a supplement to and extension of our Codes of Ethics, the Board has adopted a Policy for Related Person Transactions pursuant to which our Audit Committee, another independent committee of the Board consisting of independent directors, or the full Board, must give prior consent before we may enter into a related person transaction with our executive officers, directors, nominees for director and principal stockholders, including their immediate family members and affiliates. Any request for us to enter into a related person transaction with an executive officer, director, nominee for director, principal stockholder or any of such persons’ immediate family members or affiliates must first be presented to our Audit Committee for review, consideration, and approval. A related person transaction is a transaction in which the Company is or will be a participant and in which a related person has or will have a direct or indirect material interest, other than (i) a transaction involving $120,000 or less when aggregated with all related transactions,

(ii) a transaction involving compensation to an executive officer that is approved by the Board or the Management Development and Compensation Committee (the “MDC Committee”), (iii) a transaction involving compensation to a director or director nominee that is approved by the Board or the MDC Committee, and (iv) any other transaction that is not required to be reported pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All of our directors, executive officers, and employees are required to report to our Audit Committee any such related person transaction.

In approving or rejecting a proposed related person transaction, our Audit Committee considers the facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s independence. Our Audit Committee approves only those agreements that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our Audit Committee determines in the good faith exercise of its discretion. Under the policy, if we discover related person transactions that have not been approved, the Audit Committee will be notified and will determine the appropriate action, including ratification, rescission, or amendment of the transaction.

In March 2023, we amended our Policy for Related Person Transactions to transfer oversight over related person transactions to the Audit Committee and to affirmatively require every director, director nominee, and member of Company management to promptly provide notice of any transaction or arrangement that may constitute a related person transaction that has not previously been reviewed by the Committee upon the earliest of becoming aware that the transaction or arrangement has been proposed or consummated or that the transaction or arrangement may constitute a related person transaction, among other changes.

There have been no related person transactions since the beginning of 2023 and there are no currently proposed related person transactions.

To further align the interests of our executive officers and directors with the interests of our stockholders, and after evaluation of best practices and consultation by the MDC Committee with Willis Towers Watson, its independent consultant, the Board has implemented stock ownership guidelines applicable to our executive officers and directors.

Each executive officer is expected to hold shares of common stock with an aggregate value greater than or equal to a multiple of the executive officer’s base salary as set forth below:

Each of our non-employee directors is expected to hold shares of common stock with an aggregate value greater than or equal to at least three times the amount of the annual retainer paid to non-employee directors for service on the Board, excluding additional committee retainers, if any.

Under the stock ownership guidelines, common stock held directly, including shares of common stock held in a separate brokerage account or in a 401(k) account, and common stock held indirectly (e.g., by a spouse, minor dependent, or a trust for the benefit of the executive or director, or the executive’s or

director’s spouse or minor dependent), count toward satisfaction of the levels set forth in the guidelines. For purposes of the guidelines, the “value” of the common stock is based on the closing price of the common stock on the day on which a determination under the guidelines is being made, which is annually on the last business day of each year.

Each of our executive officers is expected to satisfy the requisite stock ownership level within five years of the date the person first became an executive officer, provided that if they have not achieved the applicable stock ownership level by that date, the executive officer will be required to retain 50% of the net shares of common stock acquired pursuant to equity awards until the applicable levels are achieved. “Net shares” are those shares that remain after shares are sold or withheld to pay withholding taxes and/or the exercise price of stock options, if applicable. Each of our non-employee directors is expected to achieve the stock ownership level within five years of the date such person first becomes a non-employee director. As of December 31, 2023, all of our executive officers and continuing directors were in compliance with the stock ownership guidelines, to the extent required, by satisfying the requisite stock ownership level or retaining 50% of their net shares of common stock acquired pursuant to equity awards.

We have adopted a policy prohibiting our directors, officers, and employees from engaging in short sales, transactions in derivative securities (including put and call options), or other forms of hedging and monetization transactions, such as zero-cost collars, equity swaps, exchange funds, and forward sale contracts, that allow the holder to limit or eliminate the risk of a decrease in the value of our securities. We have adopted this policy in order to align the interests and objectives of individuals subject to the policy with those of our stockholders.

We have adopted a policy prohibiting our directors and officers from holding our securities in margin accounts, pledging our securities as collateral or maintaining an automatic rebalance feature in savings plans, deferred compensation, or deferred fee plans. This prohibition is to avoid sales of our securities on behalf of an individual related to margin calls, loan defaults, and automatic rebalances, which may occur when the individual has material nonpublic information regarding the Company.

We consider stockholder engagement to be an important corporate governance practice. Regular dialogue with stockholders not only strengthens our relationship with the financial community but also helps stockholders make informed investment decisions, evaluate our long-term financial performance, and assess our business practices. Through this engagement, we receive valuable feedback that informs our decisions regarding our strategy, executive compensation practices, and corporate governance policies, which we believe are critical contributors to our success.

Our meetings with investors are attended by one or more members of our management team, including our Chief Executive Officer, Chief Financial Officer, and Chief Strategy and Corporate Development Officer. In 2023, our management team participated in numerous investor meetings through various platforms. We regularly held meetings following key company updates such as earnings releases, executive appointments, and other corporate and industry developments. We also participated in investor conferences and non-deal roadshows where we engaged with both existing and prospective investors.

The focus of our 2023 meetings with investors spanned a wide variety of topics, including our long-term strategy, recent business and operating performance, our enterprise transformation, our regulatory profile, and our capital allocation strategy.

We continue to demonstrate a strong commitment to corporate governance and our commitment to best practices:

We believe that our intrinsic value can be measured by the impact of our activities on the communities that we serve – by our ability to make a difference. We seek to create positive environmental and social impacts that bring value to our students, employees, stockholders, other stakeholders, and society. And we believe that the Board of Directors and management play a critical role in delivering in these areas. Our Board is responsible for overseeing and supporting our commitment to positive environmental and social impacts, and governance practices. Our NCG Committee is responsible for assisting the Board in overseeing this commitment, including by overseeing our strategy and activities related to corporate social responsibility, sustainability and other environmental, social, and governance (“ESG”) matters. The NCG Committee is also tasked with oversight of related risks, review and evaluation of ESG-related strategy, goals, initiatives, policies and practices, and oversight of the development and use of ESG metrics as well as ESG reporting and disclosure. We continue to leverage our management-led Environmental, Social and Governance Oversight Committee that reports to our Chief Executive Officer and supports management’s execution of our ESG efforts and development of our ESG strategy. This committee is comprised of subject matter experts across the organization and is co-chaired by three senior leaders, our Chief Financial Officer, General Counsel, and Chief Human Resources Officer, each of which lead a key area of ESG efforts. All ESG Oversight Committee members are designated by our Chief Executive Officer.

Additionally, we periodically review our policies on ESG. We continue to ensure that materials on our ESG positions and strategies are publicly disclosed and available on our website. Our policies include:

APUS is a charter signatory of the American College & University Presidents’ Climate Commitment, pursuant to which we committed to work toward carbon neutrality, inventory our emissions, integrate sustainability into our curriculum, and make related information publicly available. We invested approximately $2.4 million to construct a solar array at our headquarters that boasts 1,600 solar panels on a parking lot canopy with 15 charging stations for electric vehicles. The solar array, one of West Virginia’s largest, was designed to offset a significant portion of the energy requirements of our LEED platinum certified administrative building. We have also actively engaged a third-party environmental consultant to measure our greenhouse gas emissions and analyze our environmental impact to advance our sustainability efforts and track our progress in fulfilling climate commitments.

In addition to creating positive environmental impacts, we believe that our Company should have a positive social impact. We were built on the belief that quality education should be accessible to all, not reserved for the few. We strive for inclusiveness in our classrooms and in our offices – our goal is to build bridges. We also believe in making a difference in the communities in which we live and work. Our many volunteer and community service projects often emerge organically from the ideas and passions of our students and employees. Our subsidiary institutions are actively involved in local community efforts and host employee volunteer days each year. To help support those efforts, we continue to provide all full-time employees with paid volunteer time off, to allow our employees the time and opportunity to give back to causes that are important to them.

Our ability to deliver on our corporate mission and to continue to transform our enterprise to focus on sustainable growth is tightly aligned with our human capital strategy. Our performance largely depends on the talents, experience, and efforts of our employees, and on our ability to foster a culture and practice of high performance, innovation, cooperation, integrity, and respect. During 2023, we continued to stabilize our executive leadership teams across our subsidiary institutions and at APEI. Strong executive leadership across the enterprise is critical to our ability to deliver a quality student experience and outcomes. We believe that our strengthened executive team helps position us to accelerate our growth and transformation efforts and to move our Company into the future. Throughout 2023, our key human capital efforts focused on continuing to centralize certain components of our human capital strategy, including continued enhancements to our common talent acquisition methodology and common talent management and talent review process, as well as centralizing and improving responses to human capital inquiries. We also continue to implement a streamlined and proactive approach to employee communication to drive connectivity, engagement, and efficiencies. We also continued to work to harmonize our benefits programs across the enterprise to ensure that we have a market competitive set of offerings for all employees.

Diversity and inclusion are at the core of our values, and we believe they reflect the expectations of the students we serve. To support our diversity and inclusion efforts, in the first quarter of 2023, we launched an enterprise-wide, cross-functional Inclusion and Impact Council (the “Council”) that includes members of executive leadership as well as inclusion champions from across all of our subsidiary institutions. The Council’s primary objective is to ensure that we are leveraging best practices across the enterprise and to help our organization continue to create an increasingly inclusive culture for all employees and all students. This Council, which reports into our Chief Executive Officer, Chief Human Resources Officer, and ESG Oversight Committee, is designed to operate in partnership with the task forces and committees that exist at the subsidiary institution level. Our employee demographics are presented below.

Percent identifying female, as of December 2023:

Percent self-identifying as Black or African American, Hispanic, Asian American, Native American or more than one race, as of December 2023:

We believe a diverse and inclusive workplace results in business growth and encourages increased innovation, retention of talent, and a more engaged workforce. Consistent with our focus on diversity and inclusion, we strive to create ethical, safe, and supportive workplaces where our employees thrive.

We measure employee engagement on an ongoing basis by soliciting feedback in order to understand the views of our employees and faculty, both full-time and part-time. We conducted a comprehensive employee engagement survey in fall 2023. The results from that survey are being actively used to implement programs and processes designed to enhance employee and faculty engagement and improve the overall employee experience and, therefore, the student experience. For example, based on employee feedback, we have continued to work to enhance our paid time off policies and to ensure that all employees have access to a comprehensive continuing education benefit program.

Our strategic initiatives require our management, faculty, staff, and skilled personnel to perform at a high level and to adapt and learn new skills and capabilities. We believe that the quality of faculty is critical to the student experience and student outcomes and is therefore vital to the success of our institutions. As a result, all faculty have annual development opportunities and requirements. We continue to enhance our centralized talent and transformation team to focus on improving internal learning and development practices and succession planning to ensure that we cultivate skills needed to deliver high quality student outcomes and help grow our operations. We are also in the process of refining our core leadership developments philosophies to ensure a consistent investment in leadership capabilities across APEI.

Our management is responsible for managing risks in our business, including by developing processes to monitor and control risks. The Board views its role as one of oversight and of responsibility for setting a tone that risk management should be properly integrated with our strategy and culture. The Board focuses on understanding management’s risk management processes, the effectiveness of those processes, and the way in which management proactively manages risks. The Board regularly meets with our management, particularly our Chief Executive Officer, Chief Financial Officer, Chief Information Officer, and General Counsel, to receive updates on how management is assessing and managing risk in particular functional areas of our business, as well as monitors risks that have been delegated to its committees. The Board and its committees also request and receive regular reports from management on particular areas of risk, such as cybersecurity and threats to technology infrastructure.

The Board’s committees assist the Board in carrying out its oversight of risks, and each of the committee charters specifically address issues of risk. At the request of the full Board, from time to time the NCG Committee may discuss or examine in more depth specific risk areas and request presentations and information from management for that purpose. Pursuant to the Guidelines, the Board is expected to specifically consider risks that relate to our reputation and the general industry in which we operate, including with respect to privacy, information technology and cybersecurity, and threats to technology infrastructure. The NCG Committee considers and makes recommendations on how the Board is approaching its role of risk oversight. The NCG Committee also has responsibility for oversight of ESG-related risks. The Audit Committee reviews and assesses the qualitative aspects of financial reporting and our processes to manage financial and financial reporting risk. The Audit Committee regularly reports its findings to the Board.

While the NCG Committee and the Audit Committee have primary responsibility for assisting the Board with its risk oversight responsibilities, the MDC Committee also assists the Board with risk oversight. The MDC Committee is responsible for the oversight of our human capital policies, programs, initiatives, and strategies, including with respect to employee engagement, diversity and inclusion, culture, employee retention, training, and talent development. When establishing executive compensation and director compensation and in its role in implementing incentive compensation plans, the MDC Committee considers whether compensation practices properly take into account an appropriate risk-reward relationship or encourage unnecessary and excessive risks. The MDC Committee has concluded that our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company; this conclusion has been confirmed by the Board.

The performance, reliability, and security of the networks and technology infrastructure we use or rely on is critical to our operations, our institutions’ reputation, and our ability to attract and retain students. The Board regularly reviews our cybersecurity and other information technology risks, controls, and procedures, including plans to mitigate such risks and respond to any cyber incidents. The Board receives regular reports from our Chief Information Officer on these and related topics, including management’s approach to cybersecurity and potential investments in additional cybersecurity capabilities on a regular basis. Our Chief Information Officer reported to the Board at each of its regularly scheduled quarterly meetings in 2023. In 2023, the Board monitored and received quarterly briefings on the Company’s cybersecurity program. The team continued to grow and strengthen the cybersecurity posture through investments in staffing, third-party service providers, and a comprehensive set of processes and policies, which further strengthens and matures our cybersecurity program.

We have determined that the Board rather than any one committee alone is currently the appropriate body for the oversight of cybersecurity risk because of the criticality and centrality of information technology to our business, and because we believe the Board should specifically consider risks related to our reputation and the general industry in which we operate, including with respect to privacy, information technology, and cybersecurity and threats to technology infrastructure. However, the Board has delegated to the Audit Committee certain oversight responsibilities with respect to our cybersecurity disclosures.

The following table highlights the roles of the Board and each committee in risk oversight:

The following table details certain basic information on our current directors, the composition of the Board and its standing committees, and the number of meetings held during the year ended December 31, 2023:

The Board believes, and the Guidelines require, that a substantial majority of its members should be independent directors. In addition, the respective charters of the Audit, MDC, and NCG Committees currently require that each member of such committees be independent. Consistent with Nasdaq’s independence criteria, the Board has affirmatively determined that all of our directors are independent, with

the exception of Ms. Selden, our President and Chief Executive Officer. Nasdaq’s independence criteria include a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with us. In addition, as further required by Nasdaq rules, the Board has made a subjective determination as to each independent director that no relationship exists that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed any information provided by the directors and management with regard to each director’s business and personal activities that may relate to us and our management.

In accordance with the Guidelines, the independent members of the Board hold at least two “executive session” meetings each year. If the Chairperson of the Board were not an independent director, an independent chairperson would be selected for each executive session. These meetings serve as a forum to discuss the annual evaluation of the Chief Executive Officer’s performance, the annual review of the Chief Executive Officer’s plan for management succession, and such other topics as the independent directors deem necessary or appropriate.

The Guidelines specify that the Board shall select its Chairperson based on the Board’s determination of what is then in our best interests. Historically, we have split the positions of the Chairperson of the Board and Chief Executive Officer because we believe that this structure is appropriate at this time given the differences between the two roles in our management structure. We believe that an independent Chairperson is in our best interests and those of our stockholders and provides a strong leadership structure and sound governance foundation for working with the Board, the Company’s Chief Executive Officer, and management to establish and further our strategic objectives. Our Chief Executive Officer, among other duties, is responsible for implementing the strategic direction for the Company and for the day-to-day leadership and performance of the Company, while the Chairperson of the Board, among other responsibilities, provides guidance to the Chief Executive Officer and presides over meetings of the full Board. Currently, Ms. Selden serves as our Chief Executive Officer and Mr. Andersen serves as the Chairperson of the Board.

Each Board committee consists only of directors who are not employees of the Company and who are “independent” as defined by Nasdaq rules.

The Board and its committees meet regularly throughout the year, and also hold special meetings and act by written consent from time to time. The Board held a total of 10 meetings during the fiscal year ended December 31, 2023. During this time, all of our current directors attended at least 75% of the aggregate number of meetings held by the Board and all committees of the Board on which such director served. The Board does not have a formal policy with respect to Board member attendance at annual meetings of stockholders, but all members of the Board are encouraged to attend. Our 2023 Annual Meeting of Stockholders was attended by all our directors at the time except Mr. Braner, who had a family emergency.

The Board has three standing committees: the Audit Committee; the MDC Committee; and the NCG Committee. The charters for the Audit, MDC, and NCG Committees can be accessed electronically on the “Governance — Governance & Ethics Documents” section of our corporate website, www.apei.com.

The Board conducts, and the NCG Committee oversees, an annual evaluation of the Board’s operations and performance in order to enhance its effectiveness. Recommendations resulting from this evaluation are made by the NCG Committee to the full Board for its consideration. Each committee also conducts an annual evaluation of its own performance and charter, and makes recommendations as necessary to either management, the NCG Committee, or the full Board, as applicable, as a result of these evaluations.

The Board has established a separately designated standing Audit Committee in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is responsible, among its other duties and responsibilities, for overseeing our accounting and financial reporting processes, the audits of our financial statements, the qualifications of our independent registered public accounting firm, and the performance of our internal audit function and our independent registered public accounting firm. The Audit Committee reviews and assesses the qualitative aspects of our financial reporting, our processes to manage financial reporting risk, and our compliance with significant applicable legal, ethical, and regulatory requirements. The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm.

The current members of our Audit Committee are Ms. Halle, who serves as chair of the Committee, Ms. Blevins, Ms. Fabrega, and Dr. Kurshan. Each member of the Audit Committee is able to read and understand fundamental financial statements, including our balance sheet, and statements of income, comprehensive income, stockholders’ equity, and cash flows.

The Board has determined that each of Ms. Halle and Ms. Blevins is an “Audit Committee financial expert,” as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002. The Board has determined that each member of our Audit Committee is independent under Nasdaq’s listing standards and each member of our Audit Committee is independent pursuant to Rule 10A-3 of the Exchange Act.

Ms. Halle’s term as a director ends at the Annual Meeting, and Ms. Blevins is expected to be appointed as chair of the Audit Committee following Ms. Halle’s departure.

The MDC Committee is responsible, among its other duties and responsibilities, for establishing the compensation and benefits of our Chief Executive Officer and other executive officers, monitoring compensation arrangements applicable to our Chief Executive Officer and other executive officers in light of their performance, effectiveness, and other relevant considerations, and administering and making recommendations to the Board regarding our equity and other incentive plans. In addition, the MDC Committee is responsible for succession planning for our Chief Executive Officer and other key executive officers and for overseeing our human capital management efforts, including with respect to recruitment, development, and retention. Pursuant to our Bylaws, the MDC Committee may create one or more subcommittees, each subcommittee to consist of one or more members of the MDC Committee, and may delegate any or all of its powers and authority to those subcommittees.

The current members of our MDC Committee are Mr. Robinson, who serves as chair of the Committee, Mr. Andersen, Mr. Braner, and Dr. Kurshan. The Board has determined that each member of our MDC Committee meets Nasdaq’s independence requirements for approval of the compensation of our Chief Executive Officer and other executive officers.

The MDC Committee has the sole authority to retain and terminate any compensation consultant to assist in evaluating executive officer compensation. In 2023, the MDC Committee retained Willis Towers Watson directly as an outside compensation consultant to assist in evaluating our compensation programs, as it has since 2007. The MDC Committee assessed Willis Towers Watson’s independence, considering all relevant factors, including those set forth in Nasdaq rules. In connection with this assessment, the Committee considered Willis Towers Watson’s work and determined that it raised no conflicts of interest. Willis Towers Watson does no work for the Company other than work that is authorized by the MDC Committee or its chairperson. The Committee used information provided to it by Willis Towers Watson in connection with making 2023 compensation determinations. Willis Towers Watson also advised the MDC Committee on the use of a peer group and applicable survey data for comparative purposes. The

consultant’s role in recommending the amount or form of executive compensation paid to our named executive officers during 2023 is described in the “Compensation Discussion and Analysis — Competitive Compensation — Assessing Competitive Practice” section on page 38.

The MDC Committee considers the results of the annual advisory vote on the compensation of our named executive officers. See “Proposal No. 2” on page 77 to review this year’s proposal. In 2023, approximately 82% of the stockholder votes cast on this proposal were voted in favor of our executive compensation. The decreased percentage of stockholders voting in favor of the executive compensation proposal was primarily due to the increase in abstentions from 0.4% in 2022 to 8.8% in 2023, which have the effect of a vote-against the proposal. Excluding abstentions, 90% of stockholders voted in favor of the compensation of our named executive officers. We continued our ongoing stockholder engagement program during 2023 in order to elicit further feedback and perspectives on the issues important to our stockholders. Because the annual advisory vote occurred after our compensation was set for 2023, the results for the 2023 vote were not available to be considered prior to establishing our 2023 compensation program, but the MDC Committee considered and discussed the results prior to establishing our compensation program for 2024.

The MDC Committee works closely with our Chief Executive Officer on compensation decisions and has delegated certain aspects of the annual incentive plans for the other executive officers, including the named executive officers, to our Chief Executive Officer. For a discussion of the role of our Chief Executive Officer in determining or recommending the executive compensation paid to our named executive officers during 2023, see the “Compensation Discussion and Analysis — Other Compensation Policies and Practices — Role of Executives in Executive Compensation Decisions” section on page 53. None of our other executive officers participates in any deliberations related to the setting of executive compensation.

The NCG Committee is responsible for recommending candidates for election to the Board. The Committee is also responsible, among its other duties and responsibilities, for making recommendations to the Board or otherwise acting with respect to corporate governance policies and practices, including board size and membership qualifications, recommendations with respect to director resignations tendered in the event a director fails to achieve a majority of votes cast in favor of his or her election, new director orientation, committee structure and membership, and policies and practices regarding communications with stockholders. In addition, the NCG Committee assists the Board in understanding and overseeing management’s processes for the assessment and management of non-financial risks of the Company and the steps that management has taken to monitor and control exposure to such risks. The members of our NCG Committee are Ms. Blevins, who serves as chair of the Committee, Mr. Kenigsberg, Mr. Pianko, and Mr. Robinson. The Board has determined that each member of our NCG Committee meets Nasdaq’s independence requirements for directors that make director nominations. Mr. Kenigsberg is expected to be appointed as chair of the Committee following the Annual Meeting.

Non-employee directors may be asked to serve in a committee role that involves service as a representative of the Board on the board of one of our wholly owned subsidiaries. During 2023, Mr. Robinson served in this role for APUS, and Mr. Pianko served in this role for RU.

The NCG Committee recommends, and the Board nominates, candidates to stand for election as directors. Stockholders may also nominate persons to be elected as directors. If a stockholder wishes to nominate a person for election as director, he or she must follow the procedures contained in our Bylaws and satisfy the requirements of Regulation 14A of the Exchange Act. For a stockholder’s nomination of a person to stand for election as a director at an annual meeting of stockholders to be considered, our Corporate Secretary must receive such nominations at our principal executive offices not more than 120 days, and not less than 90 days, before the anniversary date of the prior year’s annual meeting, except that if the annual meeting is set for a date that is not within 30 days before or 60 days after such anniversary, the nomination must be received no later than the later of the 90th day prior to such annual meeting or the close of business on the tenth day following the notice or public disclosure of the date of the meeting. Each submission must include the following information:

Each director will be elected by the vote of the majority of the votes cast with respect to that director’s election, provided, however, that if, as of the tenth day preceding the date we first mail notice of the meeting for such meeting to our stockholders, the number of nominees exceeds the number of directors to be elected, which we refer to as a “Contested Election” in our Bylaws, the directors shall be elected by the vote of a plurality of the votes cast. Under plurality voting, the director nominee with the most votes for a particular seat is elected for that seat. Our Bylaws require that the Board or a committee of the Board shall not nominate any incumbent director who, as a condition to such nomination, does not submit a conditional and, in the case of an uncontested election, irrevocable letter of resignation to the Chairperson of the Board. If an incumbent nominee is not elected in an uncontested election, the NCG Committee will promptly consider such director’s conditional resignation and make a recommendation to the Board regarding the resignation. Each incumbent director nominated for election to the Board at the Annual Meeting as described under “Proposal No. 1” on page 24 has submitted the conditional letter of resignation as required by our Bylaws.

In the event an incumbent director fails to receive a majority of the votes cast in an election that is not a Contested Election, the NCG Committee, or such other committee designated by the Board pursuant to our Bylaws, shall make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board shall act on the resignation, taking into account the Committee’s recommendation, and publicly disclose (by a press release and filing an appropriate disclosure with the SEC) its decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision, within 90 days following certification of the election results. The Committee in making its recommendation and the Board in making its decision each may consider any factors and other information that it considers appropriate and relevant.

Additional information regarding requirements for stockholder nominations for next year’s annual meeting is described in this Proxy Statement in the section titled “General Matters — Stockholder Proposals and Nominations” on page 85.

Stockholders wishing to communicate with the Board may do so by writing to the Board, the Chairperson of the Board, or the non-employee members of the Board as a group, at:

Complaints or concerns relating to our accounting, internal accounting controls, or auditing matters will be referred to members of the Audit Committee. Other correspondence will be referred to the relevant individual or group. All correspondence is required to prominently display the legend “Board Communication” in order to indicate to the Corporate Secretary that it is a communication subject to our policy and will be received and processed by the Corporate Secretary’s office. Each communication received by the Corporate Secretary will be copied for our files and in most cases will be promptly forwarded to the addressee. The Board has requested that certain items unrelated to the Board’s duties and responsibilities be excluded from the communications so forwarded under the policy. In addition, the Corporate Secretary is not required to forward any communication that the Corporate Secretary, in good faith, determines to be frivolous, unduly hostile, threatening, illegal, or similarly unsuitable. However, the Corporate Secretary will maintain a list of each communication subject to this policy that is not forwarded and, on a quarterly basis, will deliver the list to the Chairperson of the Board. In addition, each communication subject to this policy that is not forwarded because it was determined by the Corporate Secretary to be frivolous shall nevertheless be retained in our files and made available at the request of any member of the Board to whom such communication was addressed.

The Board is currently comprised of 10 directors. Our nominees for the election of directors at the Annual Meeting include seven independent non-employee directors and our Chief Executive Officer. Jean C. Halle and Dr. Barbara “Bobbi” Kurshan have decided to not stand for reelection at the Annual Meeting, and the size of the Board will be reduced to eight directors. Each director is elected to serve a one-year term, with all directors subject to annual election. At the recommendation of the NCG Committee, the Board has nominated the following persons to serve as directors for the term beginning at the Annual Meeting on May 17, 2024: Eric C. Andersen; Granetta B. Blevins; Michael D. Braner, Anna M. Fabrega; James Kenigsberg; Daniel S. Pianko; William G. Robinson, Jr.; and Angela K. Selden. All of the nominees are currently serving on the Board.

Proxies received in response to this solicitation will be voted FOR the election of each nominee named in this section unless otherwise stated in the proxy or in the case of a broker non-vote with respect to the proposal. Proxies submitted for the Annual Meeting can only be voted for those nominees named in this Proxy Statement. If, however, any director nominee is unable or unwilling to serve as a nominee at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by the Board, or the Board may reduce the size of the Board. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be unwilling or unable to serve. Each director will hold office until his or her successor is duly elected and is qualified or until his or her earlier death, resignation, or removal.

The Board provides strategic direction to the Company and oversees the performance of our business and management. The NCG Committee periodically identifies and reviews with the Board desired skills and attributes of both individual Board members and the Board overall within the context of current and future needs. Among the Committee’s responsibilities is the development of general criteria, subject to approval by the full Board, for use in identifying, evaluating, and selecting qualified candidates for election or re-election to the Board. The Committee reviews the appropriate skills and characteristics required of directors in the context of the current composition of the Board, our operating requirements, and the long-term interests of our stockholders. It may use outside consultants to assist in identifying candidates. In determining whether to recommend candidates to serve on the Board, the Committee considers (i) whether candidates meet regulatory and independence requirements, (ii) the Board’s overall composition in light of current and future needs, (iii) the past performance of incumbent directors, and (iv) whether candidates have the qualities of integrity, judgment, acumen, and the time and ability to make a constructive contribution to the Board. In reviewing the composition of the Board, the Committee considers professional skills and background, experience in relevant industries, diversity, age, tenure, and geographic background, and any applicable rules and regulations regarding the composition of the Board, including those of Nasdaq and the SEC. The Committee maintains a commitment to include candidates with a diversity of backgrounds, including women and minorities, in the pool from which the Committee selects director candidates, and considers candidates submitted by directors and management, as well as candidates recommended by stockholders, which are evaluated in the same manner as other candidates identified to it. Final approval of director candidates is determined by the full Board.

As a part of our continued process of Board refreshment and succession planning, the NCG Committee and the Board regularly considers adding additional candidates to the Board.

In connection with the decision to appoint Mr. Braner to the Board in 2023, we entered into a Cooperation Agreement with 325 Capital LLC. Other than the Cooperation Agreement, which contemplated that Mr. Braner would be nominated for election to the Board at the 2023 Annual Meeting, there are no arrangements or understandings between a director and any other person pursuant to which such person was elected as director or is being nominated as a director.

The Board has determined that all of our director nominees are qualified to serve as directors of the Company. Set forth below are some of the experiences, qualifications, attributes, and skills possessed by these nominees.

The demographic makeup of our current Board, as disclosed by the Board members themselves, is as follows:

Information for each nominee for director, including names, ages as of March 21, 2024, terms of office, principal occupations, and business experience is set forth below. In addition, for each nominee, we have included additional information regarding the experiences, qualifications, attributes, or skills that caused the NCG Committee and the Board to determine that the person should serve as a director for the Company.

Pursuant to our non-employee director compensation policy, for 2023, directors received an annual retainer of $70,000. The chairs of the Audit, MDC, and NCG Committees were entitled to receive an additional annual retainer of $15,000, $10,000, and $8,000, respectively. The non-employee Chairperson of the Board was entitled to receive an additional annual retainer of $50,000. The Chairperson was not entitled to receive any additional annual retainers for also serving as chair of any of the Board’s standing committees. Members of the Board may also be asked to serve as a representative of the Board on the board of one of our wholly owned subsidiaries and received a flat additional retainer of $65,000 for service with respect to APUS or RU.

The annual retainers are payable in quarterly installments, and each director may, before the beginning of the applicable year, elect to receive his or her annual retainer in common stock having the same value as the portion of the annual retainer to be paid, calculated as of the close of business on the first business day of the year. In connection with our annual meeting of stockholders, our non-employee director compensation policy for 2023 also provided for an annual grant to each director of restricted stock having a value of $80,000 on the grant date. Consistent with past practice, the restricted stock grant vests on the earlier of the one-year anniversary of the date of grant or immediately prior to the next year’s annual meeting of stockholders.

We also reimburse all directors for travel and other necessary business expenses incurred in the performance of their services for us and extend coverage to them under the directors’ and officers’ indemnity insurance policies.

The following table sets forth information regarding compensation earned by our non-employee directors during 2023:

As of December 31, 2023, there were no exercisable or unexercisable option awards held by our 2023 non-employee directors. The aggregate number of unvested stock awards outstanding held as of that date by our 2023 non-employee directors were as follows:

In 2023, Willis Towers Watson presented to the MDC Committee information on non-employee director compensation, providing comparative information on the same peer group that the MDC Committee uses for executive compensation, as well as general industry levels. Although the comparative information indicated that the Company’s non-employee director compensation remained below the 50^th percentile of peers and survey data, the Board determined, including in consideration of the Company’s financial performance, to retain the existing non-employee director compensation policy.

Our named executive officers (“NEOs”) for 2023 are:

This Compensation Discussion and Analysis describes our executive compensation program and decisions for 2023. This section details the compensation framework applied by the Management Development & Compensation Committee (the “MDC Committee”) and, in particular, our compensation philosophy and objectives, elements of compensation, compensation decisions, and the link between executive compensation and performance. The year 2023 was a year of acceleration and rebuilding for APEI. We reported revenue of $600.5 million, marking a slight decrease compared to the previous year, but signifying further stabilization of our business. Additionally, we recorded a net loss of $2.93 per diluted share, marking a notable improvement compared to the previous year’s loss. Adjusted EPS achievement, as measured in the Annual Incentive Plan was $0.16, slightly above the threshold performance goal of $0.15. In the last two quarters of 2023, there was positive momentum across our subsidiary institutions, and we surpassed our revenue and Adjusted EBITDA expectations, which is consistent with our belief that the Company ended 2023 well positioned to move into 2024. Our commitment to educating active-duty military, veterans, nurses, and other service-minded students gives us confidence in our long-term business strategy and market position.

APUS saw full-year net course registrations increased by 5% year-over-year, demonstrating continued momentum in active-duty and veteran registrations, a testament to the strong military franchise that American Military University (AMU), a part of APUS, has built. RU’s targeted programmatic marketing efforts are driving improved enrollment by streamlining processes for identifying and attracting new students. In addition, both RU and HCN made significant improvements in pre-licensure NCLEX student outcomes in 2023 – demonstrating the effectiveness of our nursing programs.

Even with the positive momentum, particularly in the second half of the year, and the position in which the Company ended 2023, the overall financial performance for 2023 was uneven across the Company and neither the financial performance nor stock price performance met our expectations. As a result, under our annual incentive plan, which is designed to reward subsidiary institution and enterprise performance, all of our NEOs received below-target payouts in 2023, with the exception of Mr. Fernandes. Ms. Selden’s total payout under our 2023 annual incentive plan represented 56% of her target opportunity (or 53% of her base salary), less than her total opportunity of 147% of target (or 140% of her base salary). In addition, for our performance-based deferred stock units (“PSUs”) granted in 2023 were earned by NEOs at 81.2% of the target opportunity, less than the total opportunity of 200% of target.

In 2023, we continued to leverage our national platform to Power Potential and Prosperity for Those Who Serve, by providing inclusive, high-quality, and relevant education that empowers learners to achieve their ambitions, serve their communities and realize a return on their educational investment.

The charts below show the breakdown of the components of Ms. Selden’s target compensation opportunity for 2023 as well as the average target compensation for our other NEOs serving at the beginning of the year. As discussed in the overview section below, the breakdown of target compensation opportunity reflects our focus on variable compensation tied to performance, with our CEO’s fixed base salary representing 18% of her total target compensation opportunity, with annual and long-term incentives tied to financial, enrollment, individual, and stock price performance representing the remainder.

A key component of our executive compensation philosophy, as discussed in greater detail in this Compensation Discussion and Analysis and in the “CEO Target Compensation versus Realizable Pay” section on page 71, is the link between compensation and overall financial, operational, and stock performance. The CEO’s realizable 2023 pay as of December 31, 2023 was 30% lower than 2023 target compensation approved in February 2023, which compares with a stock price decline of 28% over the same period, which we believe demonstrates that our executive compensation plans appropriately link pay with performance.

Our compensation programs for our NEOs are designed to attract, incentivize, retain, and reward the talent that we need to maintain and strengthen our position in career-minded adult education and to achieve our business objectives, as well as to hold our executives accountable for our actual business performance.

Highlighted below are certain executive compensation practices that we employ in order to align executive compensation with stockholder interests. Also listed below are certain compensation practices that we do not employ because we do not believe they would serve our stockholders’ long-term interests.

For 2023, the MDC Committee continued its prior engagement of Willis Towers Watson as an independent consultant to the Committee, including to assist the Committee with a competitive assessment of base salary, annual incentives, long-term equity incentives, and total direct compensation. The MDC Committee assesses the independence of its consultant annually, considering, among other factors, the independence factors established by Nasdaq. Specifically, Willis Towers Watson provides no services to the Company or its management other than the services provided to the MDC Committee in its capacity as the MDC Committee’s independent adviser on executive compensation matters. Willis Towers Watson affirmed that no member of the consulting team has any business or personal relationship with any member of the MDC Committee. Willis Towers Watson also affirmed that neither Willis Towers Watson nor any member of the consulting team serving the MDC Committee owns any stock of the Company. In addition, the MDC Committee evaluated the work of Willis Towers Watson and determined that its work raised no conflict of interest, including under the applicable independence assessment set forth in Nasdaq rules. Considering all of these factors, the MDC Committee concluded Willis Towers Watson was independent.

For the Committee’s assessment of its compensation program, Willis Towers Watson provides comparative data that includes survey data for each of the NEOs and data from a group of publicly traded companies against which we compare compensation, which we refer to as our peer group. For those executives for whom both survey data and peer group data are available, the MDC Committee uses the survey data for its primary comparisons because we believe, consistent with the advice of Willis Towers Watson, that the survey data is more robust and provides a better comparison for the Company than the peer group data. This is in part because peer group data is more limited and typically cannot be size-adjusted to account for revenue responsibilities.

Consistent with the advice of Willis Towers Watson, when reviewing compensation for executive positions, the MDC Committee generally considers compensation to be competitive if it falls within the following ranges relative to the 50th percentile of the comparative survey data:

For 2023 compensation decisions, Willis Towers Watson provided data from the following published surveys as a primary source: the 2022 Willis Towers Watson General Industry Executive Compensation U.S. Survey Report and the 2019-2020 College and University Professionals Association for Human Resources Administrators in Higher Education Annual Survey Report. Because of the variance in size

among the companies included in the databases for the published surveys, Willis Towers Watson informed the MDC Committee that, to the extent possible, it had assessed the published survey data in the context

of APEI’s and its subsidiary institutions’ projected fiscal 2023 revenue, as revenue responsibility is typically one of the most reliable predictors of executive pay. The review of survey data for setting initial 2023 compensation included competitive analysis for Ms. Selden, Mr. Sunderland, Mr. Fernandes, Mr. MacGibbon, Mr. Beckett, and Mr. Tognola, as well as a number of other members of our management team. The review determined that the base salary and total cash compensation was generally within the competitive range, but target total direct compensation was generally below the competitive range, as was Mr. Beckett’s base salary.

While the MDC Committee uses survey data as the primary source of comparative information, we believe our peer group is still an important element of the review of the competitive market for executive talent. Prior to making compensation decisions for 2023, as in years past, the MDC Committee, with the assistance of Willis Towers Watson, updated the peer group after screening for public companies within the education services, consumer services, commercial and professional services, and software and services industry that were similar in size (revenue, net income, total assets, and number of employees), were peers of our peers, and that we had selected or proxy advisory firms had identified as our peers. As a result of this evaluation process, the MDC Committee removed GP Strategies because it was acquired and Zovio Inc. because it ceased operations in 2022 and replaced them with 2U, Inc. and Laureate Education, Inc. The 2023 peer group consisted of the following companies:

The review of our peer group for setting initial 2023 compensation resulted in comparative information for Ms. Selden and Mr. Sunderland. Comparative information was not available for the remaining NEOs due to the more limited sample size of peer group data as compared to survey data.

The compensation program for our NEOs is comprised of three core elements: base salary, annual incentive cash compensation, and long-term equity incentives.

In setting base salary, annual incentive cash compensation, and long-term equity incentives for 2023, the MDC Committee considered, among other factors, the compensation levels for our NEOs in 2022, the respective performances of each of our continuing NEOs in 2022, an enhanced focus on differentiation and pay-for-impact based on a culture of performance and accountability, internal fairness and equity consistent with role, and what the Committee believed was required based on the marketplace for executive talent, including based on the market information provided by Willis Towers Watson.

Base salary is an integral part of compensation for our NEOs and is generally set in January of each year, absent other factors, such as promotions or new hires. For 2023, the MDC Committee determined to not increase the base salaries of our NEOs, except for a 10% increase for Mr. Beckett. In determining not to provide increases for the NEOs other than Mr. Beckett, the MDC Committee considered the recommendation of Ms. Selden, who noted the relatively recent reductions in force at APEI and the importance of setting the tone at the top. Ms. Selden also noted that Mr. Fernandes, Mr. Tognola and Mr. MacGibbon had all joined the Company in 2022, and that similar to Mr. Sunderland each of them had competitive levels of compensation consistent with the MDC Committee’s philosophy. Ms. Selden noted, however, that Mr. Beckett’s salary remained below the 50th percentile of the survey data and was not yet within the competitive market range. The Committee concurred with Ms. Selden’s rationale for base salary for the other NEOs, and in its deliberations applied the same approach to their decision not to increase her base salary. This approach was also consistent with the MDC Committee’s recommendation, and the decision of the Board, to maintain non-employee director compensation at the same level for 2023, which was the third consecutive year without a change.

Overall Opportunity. We believe annual incentive cash compensation furthers our compensation philosophy and objectives by focusing our NEOs on performance goals that measure corporate strategic, financial, and operational objectives. The total opportunity for annual cash incentive compensation for our NEOs under our annual incentive plan (“AIP”) is expressed as a target percentage of base salary. We further enhance the focus on performance goals through a stretch incentive opportunity under the AIP that pays an additional amount to our NEOs for superior performance, which we refer to as the stretch portion of the AIP. The following table sets forth the target and stretch incentives under the AIP, expressed as a percentage of base salary.

The target and stretch percentages for Ms. Selden, and Mr. Sunderland reflect the minimum target and stretch percentages set forth in their employment agreements. The target and stretch percentages for Mr. Fernandes, Mr. MacGibbon, and Mr. Tognola were set in connection with their appointments to their respective positions, and Mr. Beckett’s target and stretch percentages reflect the percentages set for all executives at a similar level. After considering the survey data and the individual performance of the executives, the MDC Committee determined that the percentages for all continuing NEOs should remain the same for 2023.

We believe that the proportion of target annual incentive compensation to target total cash compensation (base salary plus target annual incentive pay) for our NEOs should be a relatively high percentage. It is also the Committee’s general intent, as discussed above, that target annual incentives should be structured so that target total cash compensation approximates the 50th percentile of the survey data for achievement of target performance goals under the AIP. We believe that positioning to be competitive with the 50th percentile is appropriate for target total cash compensation because of the high level of performance that we believe is required from our executives in order for us to achieve our performance goals. We believe the high percentage of compensation tied to incentive compensation increases the focus of our NEOs on achieving our performance goals.

Mr. Tognola’s departure on July 22, 2023, was treated as a termination by the Company without cause under the American Public Education, Inc. Executive Severance Plan (the “Executive Severance Plan”), and he was therefore eligible for a prorated annual incentive plan payout for 2023.

Performance Measures. The MDC Committee intended that performance under the NEOs’ AIP at both the target and stretch incentive levels should be measured based on our achievement of our financial performance goals and individual achievement of individual objectives and key results (“OKRs”). We view this split among goals as an important reflection of our belief that our NEOs should be focused on the overall performance of the business and also on individualized objectives that are consistent with important strategic, financial, and operational goals. We also believe this split encourages a focus on multiple performance metrics rather than focusing on one particular metric to the exclusion of others that are also important to our results.

For 2023, the Committee determined to maintain a structure with 80% of the target award based on business performance and 20% of the target award based on achievement of individual OKRs. OKRs are

enterprise- or subsidiary institution-wide annual objectives with individualized component goal results, or “key results,” that are consistent with our strategic, financial, and operational goals. The OKR structure includes quarterly targets toward each key result that can be adjusted over the course of the year and serve as milestones toward achievement and help to measure progress. OKRs are developed through collaborative goal-setting and are designed to be challenging, ambitious goals with measurable results. In setting OKRs, objectives are first defined by either Ms. Selden or the applicable subsidiary institution leadership, and key results are then established along with the quarterly milestones. OKRs for subsidiary institution leaders are approved by Ms. Selden, and Ms. Selden’s OKRs are recommended by the Chairperson of the Board, in consultation with Ms. Selden, and approved by the MDC Committee.

Business Performance Measures (80% of the AIP target opportunity). The MDC Committee determined that the portion of each NEO’s 2023 AIP award that relates to business performance would be based on achieving and surpassing specified EPS, enrollment, and revenue metrics. The Committee initially selected EPS as a performance measure because of its strong alignment with stockholder value creation and enrollment as a way to focus on the importance of growth and determined to retain EPS and enrollment as the performance metrics for 2023 for the same reasons. Given the relative size of Graduate School USA (“GSUSA”) and HCN to the consolidated enterprise, for NEOs at the APEI level, the Committee determined to combine the performance of these two businesses into one measure that was based on combined revenue. The Committee selected the revenue metric to further underscore its importance across all subsidiary institutions in addition to bottom-line results.

For those executives employed at the APEI level, the AIP opportunity related to business performance measures was allocated 25% to APEI EPS performance, 33% to each of APUS and RU enrollment, and 9% to a combination of GSUSA and HCN revenue. Mr. Fernandes’ AIP opportunity related to business performance was allocated 25% to APEI EPS and 37.5% to each of APUS EPS and enrollment performance.

In selecting consolidated and institution-specific business performance goals, the Committee’s intention was to focus executives at the APEI level both on APEI’s overall business and also the business of the Company’s subsidiary institutions, and to focus executives employed at our subsidiary institutions on both the subsidiary institution where they were employed and the larger overall context of the Company.

The following table shows the business performance goals for the APEI-level executives and for Mr. Fernandes expressed as a percentage of the portion of the AIP award at target that relates to business performance.

Earnings Per Share. The MDC Committee used the target EPS for consolidated financial performance for the APEI-level executives, and used APUS EPS performance for Mr. Fernandes, in each case as was included in our budget when approved by the Board. For 2023, the Committee also specified that 50% of the target amount would be paid if earnings per share thresholds were attained that reflected 80% achievement of the target levels, which the Committee determined was at a level of achievement that would require effort for the Company to achieve. The Committee determined that it was appropriate to provide an incentive at a threshold level because it would provide an annual incentive that reflected the positive performance of the Company and the contributions of our employees and NEOs. The Committee provided that the stretch portion of the AIP related to financial performance would be payable on earnings per share that reflected 110% achievement of the target levels. This level of achievement was viewed as representing exceptional performance for which management should be rewarded. In setting the 80% and 110% levels,

the Committee also considered analysis from Willis Towers Watson, including a review of market practice and historical achievements, which reflected that achievement at these levels was neither certain at the threshold level or likely to be achieved at the stretch level.

The tables below show the goals for consolidated APEI EPS and achievement against APEI EPS and APUS EPS goals.

APEI 2023 EPS achievement for 2023 was assessed to be above threshold, but below target, resulting in earning a payout of 63% of the APEI EPS target. Mr. Fernandes earned 100% of the target and 100% of the stretch goal for the APUS EPS metric. As a result, Mr. Fernandes earned 100% of the target portion and 100% of the stretch portion of the AIP opportunity associated with APUS performance. For 2023, the MDC Committee adjusted APEI EPS to exclude the impact of an impairment of goodwill, an equity investment loss, loss on an assets held for sale, and loss on disposals. The Committee concluded that these adjustments are consistent with its historical practice, market practices, and provided an incentive to leadership to focus on results they control.

Enrollment and Revenue. In addition to EPS, for 2023, the MDC Committee used total enrollment at each of APUS and RU as elements of the AIP in order to motivate NEOs to focus on enrollment. For Mr. Fernandes, they only used total enrollment at APUS. The MDC Committee set the target enrollment number based on the number of enrollments anticipated by our budget as approved by the Board. Additionally, for 2023, for NEOs other than Mr. Fernandes, the MDC Committee added a combined budgeted revenue metric for HCN and GSUSA that reflects the budgeted amounts for those businesses approved by the Board of Directors.

For 2023, the Committee also specified that 50% of the target amount would be paid if enrollment thresholds were attained at 95% and revenue thresholds were attained at 80% of the target levels, which the Committee believed was a level of achievement that would still require effort to achieve. As with EPS, the Committee determined that it was appropriate to provide an incentive at a threshold level because it would provide an annual incentive that reflected the positive performance of the Company and the contributions of our employees and NEOs. The Committee provided that the stretch portions of the AIP related to enrollment and revenue would be payable for achievement at 103% and 110% of the respective target levels. This level of achievement was viewed as representing exceptional performance for which management should be rewarded.

For 2023, APUS had total enrollment of 367,599 and RU had total enrollment of 57,097. As a result of APUS enrollment, our NEOs earned 100% of the target portion of the AIP associated with APUS enrollment, or approximately 26% of the total target AIP opportunity for NEOs other than Mr. Fernandes. Because the APEI EPS target was not achieved, NEOs other than Mr. Fernandes were not eligible for the APUS enrollment stretch payments. Because the APUS target EPS was achieved, Mr. Fernandes received the APUS enrollment stretch payment, and the portion of the payout of his AIP associated with APUS enrollment represented 47% of his total target AIP opportunity. Additionally, our NEOs earned 100% of the target portion of the AIP associated with GSUSA and HCN revenue, or approximately 7% of the total target AIP opportunity for NEOs other than Mr. Fernandes.

The tables below show the goals for APUS and RU enrollment and achievement against each of the enrollment goals.

Objectives and Key Results (20% of the AIP target opportunity). OKRs are annual objectives with individualized, component goals, or “key results” set for each NEO and are consistent with our strategic, financial, and operational goals. OKRs are designed to be challenging, ambitious goals with measurable results. In setting OKRs, the annual objectives are first defined, the key results within those objectives are established, and the narrower quarterly targets toward each key result are then formulated.

In 2023, the Chairperson of the Board met with Ms. Selden to discuss developing OKRs for Ms. Selden and the other executive officers to facilitate alignment between the Board and the executives on the strategic direction for the Company. The Chairperson of the Board then recommended Ms. Selden’s OKRs to the MDC Committee, which subsequently approved her OKRs. Ms. Selden approved the OKRs for the other corporate-level executives, as well as the OKRs for Mr. Fernandes. On a quarterly basis commencing after the completion of the second quarter, in addition to a self-assessment, Ms. Selden, assessed achievement for the other NEOs against the milestones and determined whether the next quarter’s previously established milestones remained relevant.

We believe that this structure encourages management to focus on not only the current year’s financial and business results, which are covered by other parts of the AIP, but also operational successes that will help prepare the Company for growth and improvement. By focusing on goals consistent with our strategic, financial, and operational plans, OKRs are intended to focus the executives on goals that will deliver long-term stockholder value. OKRs provide personal accountability and reward for Company performance because executives are directly responsible for or contribute to their achievement and are assessed on an individualized basis. In addition, the establishment of quarterly milestones encourages NEOs to work toward objectives throughout the fiscal year, allows for better tracking of progress toward those objectives, and provides us with the ability to flexibly adjust key results as conditions warrant.

The MDC Committee set overlapping objectives for all executives to reflect that executives must work together to achieve results. NEOs shared a combination of the following objectives for 2023, each with corresponding, individualized component goals and quarterly key results:

To assist in determining the extent to which OKRs were met, each NEO was required at the end of the year to self-assess their performance and Ms. Selden also provided her assessment of each NEO after reviewing their self-assessments. Each NEO, other than Ms. Selden, was awarded a percentage payout for OKRs based on Ms. Selden’s assessment.

Ms. Selden also assessed her own individual OKR achievement by considering her contributions to organizational success in 2023. Notwithstanding that she self-assessed her performance at a higher percentage, Ms. Selden made the decision to cap her self-assessment at 50% of OKR achievement, significantly below the achievement of other NEOs and her own self-assessment, in order to take accountability for the inconsistent financial performance of parts of the organization in 2023. The MDC Committee then independently assessed Ms. Selden’s OKR performance. After consideration, the MDC Committee then adopted the capped assessment recommended by Ms. Selden, which was below the actual level of achievement and resulted in Ms. Selden’s 2023 short-term incentive being 56% of her target opportunity (or 53% of her base salary), significantly less than her total opportunity of 147% of target (or 140% of her base salary) and below the payout percentages achieved by other NEOs and members of senior leadership.

The following tables show the target opportunities and payouts for each element of the AIP for each NEO, as well as total target opportunities and payouts.