DEF 14A

DEF 14A 1 d140149ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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Kelly Services, Inc.

(Name of Registrant as Specified In Its Charter)

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LOGO

2021 PROXY STATEMENT AND NOTICE OF ANNUAL MEETING OF STOCKHOLDERS WE CONNECT PEOPLE TO WORK IN WAYS THAT ENRICH THEIR LIVES. KELLY

April 19, 2021

Dear Stockholders:

2020 was a year of extraordinary change and challenge for the world at large and for Kelly, our employees, and the talent and businesses we connect. We entered the year on track to accelerate our transformation into a growth-driven specialty talent company and were quickly faced with the COVID-19 pandemic – one of the most intense and protracted global crises in modern history. Kelly’s response was swift and decisive. Our actions not only protected our people, they also positioned our business to emerge from the pandemic poised for growth. Indeed, our journey through the many unexpected turns of 2020 both challenged and strengthened Kelly’s ability to adapt, innovate, and execute on our strategic promise. We’re proud of our people and what we collectively accomplished during a year of unparalleled disruption.

A People-First Response

When the pandemic struck, our first instinct and our immediate priority was to protect the safety of our full-time and temporary employees. We activated Kelly’s Emergency Management Team to identify operational priorities, contain risks, activate pandemic policies, and communicate openly with all stakeholders. We expanded our Kelly Anywhere platform to enable more than 90% of our full-time employees to immediately transition to remote work, ensuring business continuity and the health and safety of our employees throughout the crisis. We partnered with healthcare providers to offer special medical plans and benefits to temporary workers and launched the Kelly Cares Hotline to stay connected with talent.

We also advanced our long-term commitment to talent in 2020. We appointed the industry’s first Chief Talent Officer, dedicated to the temporary employee experience, and launched Kelly’s five-point Talent Promise to confirm the safety, value, well-being, investment, and opportunity that every temporary worker deserves – not just during a crisis, but each day of every year.

Financial Resilience

Kelly entered the pandemic with a healthy balance sheet, and we acted quickly and decisively to protect it. We made difficult decisions with discernment and speed, implementing temporary measures such as employee, executive, and board compensation cuts; furloughs; hiring freezes; suspension of the quarterly dividend; and reduced capital expenditures.

Our defensive short-term actions proved successful and paved the way for positive momentum. Kelly produced positive adjusted earnings each quarter of 2020; ended the year with all five of our specialty business units showing sequential growth; and maintained ample cash and available capacity to pursue strategic opportunities. In the fourth quarter, encouraged by gradual improvements in economic and business conditions, we carefully began lifting some of our temporary expense mitigation measures. We will continue to evaluate the remaining measures as the economic recovery and demand for talent stabilize in 2021.

2021 Kelly Proxy Statement 1

Letter to our Stockholders

A Two-Pronged Approach to Growth

Even as we navigated economic and labor market turmoil, Kelly remained steadfast in executing our growth strategy. In July 2020, we implemented a new operating model designed to drive increased specialization, launching five new operating segments: Professional & Industrial; Science, Engineering & Technology; Education; Outsourcing & Consulting; and International. This approach to organizing our business leverages Kelly’s existing strengths and the significant market opportunities that lie ahead, focusing our efforts where we are best able to win. We began seeing benefits from this new structure in the third and fourth quarters, and we attribute much of the momentum we’ve brought into 2021 to our newly structured specialty focus.

At the same time, we are committed to seizing inorganic growth opportunities that align with our strategy. During 2020, we completed two strategic acquisitions in our Education segment: Insight, a K-12 education staffing company, and Greenwood/Asher & Associates, a higher education executive search firm. We continue to monitor the market for acquisition targets to bolster our aggressive inorganic growth aspirations within specialties that offer the most promise for growth.

Governance Practices

Kelly’s governance practices played an invaluable role in 2020. Our highly engaged board of directors provided keen insight from diverse viewpoints throughout the crisis, helping to guide Kelly’s successful response. Women and ethnically diverse members make up 44% of the board, which also spans a wide variety of industries, backgrounds, and tenures. Additionally, in 2020, the membership of each of the Board’s three committees—Audit, Compensation and Talent Management, and Corporate Governance and Nominating—became fully independent.

In keeping with our commitment to formally communicate our non-financial and sustainability performance to all stakeholders, we adopted an integrated Environmental, Social, and Governance (“ESG”) reporting framework and published our Sustainability Report in May 2020. The report, prepared in accordance with the Global Reporting Initiative Standards: Core option, the Communication on Progress according to the United Nations Global Compact Guidelines, formalizes and discloses Kelly’s Corporate Sustainability Strategy aligned to the ESG framework.

Inclusion, Equity, and Diversity

The widespread social unrest of 2020 shone a light on systemic injustice and the ongoing need for equity, inclusion, and diversity in all facets of modern life. We believe Kelly can play a powerful role in championing those who are not given a fair opportunity to secure meaningful work. In addition to joining the CEO Action for Diversity and Inclusion, in late 2020 we launched Equity@Work, a forward-looking initiative designed to remove systemic barriers to employment and make the labor market more equitable and accessible. We also looked within and began re-designing our own hiring practices, as well as bolstering

2 2021 Kelly Proxy Statement

Letter to our Stockholders

the voices of diverse talent by launching five new affinity groups and an internal Inclusion Council. Guided by our noble purpose of connecting people to meaningful work, we remain committed to making Kelly – and all workplaces – more inclusive and equitable.

Looking Ahead

There’s no question the COVID-19 crisis has reshaped the world of work, but Kelly is ready to lead our talent and customers into what’s next. We enter our 75^th year with gratitude and optimism. We are guided by a seasoned executive team and an engaged board of directors committed to Kelly’s success. Our noble purpose is brought to life by talented employees, temporary workers, and suppliers around the globe. We continue to make their health and safety a top priority as we actively monitor and respond to evolving COVID-19 protocols.

We are thankful to the customers who partnered with us to keep their businesses going amid the crisis. And we are grateful to you, the stockholders whose confidence enabled us to protect our resources and position Kelly for brighter days ahead.

With sincere appreciation,

LOGO

DONALD PARFET

Chairman of the Board

LOGO

PETER QUIGLEY

President & CEO

2021 Kelly Proxy Statement 3

Notice of Annual Meeting of Stockholders

2021 Annual Meeting of Stockholders



Date and Time:	Place:	Record Date:

Wednesday, May 19, 2021 at 11:00 a.m., Eastern Daylight Time	Virtual Meeting: kellyservices.com	Close of Business, Eastern Daylight Time, March 29, 2021



Voting Matters	How to Vote

At the Annual Meeting, you will be asked to consider the following proposals Proposal 1. Election of nine Board-recommended director nominees Proposal 2. Advisory approval of the Company’s executive compensation Proposal 3. Ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2021 fiscal year Proposal 4. Transaction of any other business as may properly come before the Meeting	Internet - www.envisionreports.com/kelyb	QR code - Scan and vote with your mobile device
	Calling - 1-800-652-VOTE (8683) Within the U.S., U.S. territories & Canada on a touch tone telephone	Mail - Return the signed proxy card
	Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Central Daylight Time, on May 18, 2021. If you vote by mail, your proxy card must be received before the Annual Meeting. Beneficial owners, who own shares through a bank, brokerage firm, or other financial institution, can vote by returning the voting instruction form, or by following the instructions for voting via telephone or the Internet, provided by the bank, broker, or other organization. If you own shares in different accounts or in more than one name, you may receive different voting instructions for each type of ownership. Please vote all your shares. If you are a stockholder of record or a beneficial owner who has a legal proxy to vote the shares, you may choose to vote online by attending the Annual Meeting by webcast.

If you were a holder of record of the Company’s Class B Common Stock at the close of business on the Record Date, March 29, 2021, you are entitled to vote at the Annual Meeting.

Please promptly submit your vote by internet, telephone, or by signing, dating and returning the enclosed proxy card or voting instructions form in the postage-paid envelope provided so that your shares will be represented and voted at the meeting.

Thank you for your interest in Kelly.

Order of the Board of Directors

LOGO

JAMES M. POLEHNA

Corporate Secretary

4 2021 Kelly Proxy Statement

Table of Contents



Proxy Summary			6
2021 Annual Meeting of Stockholders Details			6
Director Nominees			7
Corporate Governance Highlights			8
74 Years of Industry Leadership			8
Financial Highlights			9
Awards & Recognitions			12
Executive Compensation Highlights			13

Proposal 1: Election of Directors			14
Director Independence			14
Board Nominees			14
Board Diversity			15
Experience and Qualifications			15
Biographical Information About Director Nominees			16

Corporate Governance			21
Compliance with Nasdaq Independence Standards for Non-Controlled Companies			21
Board Leadership and Governance Structure			21
Committees of the Board			22
Risk Governance and Oversight			24
Kelly’s ESG Strategy			27
2020 Achievements			28
Human Capital			31
Director Attendance			33
Size of the Board			33
Director Tenure			33
Director Service on Outside Public Company Boards			33
Director Orientation and Continuing Education			33
Board, Committee, and Peer Evaluation			33
Code of Business Conduct and Ethics			34
Related Person Transactions and Certain Relationships			34

Director Compensation			35
Director Compensation Design			35
Stock Ownership Requirements			35
Non-Employee Directors Deferred Compensation Plan			35
2020 Director Compensation			36

Beneficial Ownership of Shares			37
Delinquent Section 16(a) Reports			38

Proposal 2: Advisory Vote to Approve the Company’s Executive Compensation			39

Compensation Discussion and Analysis			40
2020 Named Executive Officers			40
Executive Summary			40
Fiscal 2020 Performance			40
Key Executive Compensation Program Highlights for Fiscal 2020			42
Executive Compensation Philosophy, Objectives, and Design			43
Pay-for-Performance Framework			43
CEO and Other Named Executive Officers Pay Mix			44


Elements of Compensation for Named Executive Officers			45
2021 Executive Incentive Plans			46
Process for Determining Executive Compensation			46
Role of the Compensation and Talent Management Committee			46
Role of the Independent Compensation Consultant			46
Role of Management			46
Comparator Data			47
Tally Sheets			48
Senior Officer Performance Reviews and Succession Planning			48
Compensation Programs: Decisions and Actions in 2020			49
Base Salary			49
Annual Cash Incentive			50
Long-Term Incentives			51
Retirement Benefits			54
Health and Welfare Benefits			54
Perquisites			55
Senior Executive Severance Plan			55
General Severance Plan			55
Ms. Koolhaas’ Severance Benefit			56
Governance of Executive Compensation Programs			56
Annual Say on Pay Vote			56
Executive Stock Ownership and Retention Requirements			56
Incentive Compensation Recovery (“Clawback”) Policy			56
Hedging and Pledging of Shares			57
Tax Considerations: Deductibility of Executive Compensation			57
Compensation and Talent Management Committee Report			57

2020 Executive Compensation Tables			58
Summary Compensation Table 2020			58
Grants of Plan-Based Awards 2020			59
Outstanding Equity Awards at Fiscal Year End 2020			60
Option Exercises and Stock Vested 2020			61
Nonqualified Deferred Compensation 2020			61
Potential Payments Upon Termination or Change In Control 2020			61
Summary of Potential Payments			61
Senior Executive Severance Plan			62
General Severance Plan			63
Ms. Koolhaas’ Severance Benefit			64
Treatment of Long-Term Incentive Awards			64

CEO Pay Ratio			67

Proposal 3: Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the 2021 Fiscal Year			69
Audit and Non-Audit Fees			69
Report of the Audit Committee			70

Questions and Answers About the Proxy Statement and the Annual Meeting			71

2021 Kelly Proxy Statement 5

Proxy Summary

This summary highlights information contained elsewhere in this Proxy Statement. Please refer to the complete Proxy Statement and Kelly’s 2020 Annual Report before you vote.


2021 Annual Meeting of Stockholders Details
Date and Time:		Wednesday, May 19, 2021 at 11:00 a.m., Eastern Daylight Time
Place:		Virtual Meeting: kellyservices.com
Record Date:		Close of Business, Eastern Daylight Time, March 29, 2021
Voting:		Class B Stockholders as of the Record Date are entitled to vote. Each share of Class B Common Stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on.
Admission:		All holders of the Company’s Class A and Class B Common Stock are invited to attend the Annual Meeting of Stockholders.


VOTING MATTERS



Election of nine directors	Advisory vote to approve the Company’s executive compensation	Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2021 fiscal year
BOARD RECOMMENDATIONS

✓ FOR Each Nominee	✓ FOR	✓ FOR
PAGE REFERENCE FOR MORE DETAILS

14	39	69

6 2021 Kelly Proxy Statement

Proxy Summary

Director Nominees

The following table provides summary information about each director nominee. Each director is elected annually by a plurality vote.


Name	Age		Director Since		Principal Occupation	Independent	Other Public Company Boards

Donald R. Parfet		68		2004	Managing Director, Apjohn Group, LLC; General Partner, Apjohn Ventures Fund; General Partner, Apjohn Ventures Annex Fund	✓	2

Peter W. Quigley		59		2019	President and Chief Executive Officer, Kelly Services, Inc.

Carol M. Adderley		61		2010	Writer and Researcher in the Humanities

Gerald S. Adolph		67		2018	Retired Senior Partner, Booz & Co.	✓	1

George S. Corona		62		2017	Retired President and Chief Executive Officer, Kelly Services, Inc.

Robert S. Cubbin		63		2014	Retired President and Chief Executive Officer, Meadowbrook Insurance Group, Inc.	✓	1

Jane E. Dutton		68		2004	Robert L. Kahn Distinguished University Professor Emeritus of Business Administration and Psychology, The University of Michigan Business School	✓

Terrence B. Larkin		66		2010	Retired Executive Vice President, Business Development, General Counsel and Corporate Secretary, Lear Corporation	✓

Leslie A. Murphy		69		2008	President and CEO, Murphy Consulting, Inc.; Former Chair, American Institute of Certified Public Accountants	✓	1

2021 Kelly Proxy Statement 7

Proxy Summary

Corporate Governance Highlights

Kelly is committed to sound corporate governance as means of enhancing long-term stockholder value. The following table summarizes certain of our governance practices and processes.



Independence	Accountability	Best Practices

• Majority independent Board	• Annual election of all directors	• Robust director selection process resulting in diverse Board relative to gender, race, ethnicity, experience, and skills

• Independent Chairman of the Board	• Annual election of the Chairman of the Board	• Average Board attendance of 90% during 2020

• 100% Independent Board Committees	• Annual evaluation of the CEO (including compensation) by independent directors	• Strong oversight of strategy, financial performance, Enterprise Risk Management (“ERM”), and Environmental, Social, and Governance (“ESG”) standards by the Board and Audit Committee

• Regular executive sessions where independent directors meet without management and non-independent directors	• Annual Board and Committee self-evaluations, and peer review	• CEO and executive leadership succession planning by the Board and Compensation and Talent Management Committee

• Committees may hire independent advisors	• Annual review of governance documents	• Policies prohibiting short-sales, hedging, pledging and, margin accounts

	• Clawback policy that applies to short-term and long-term incentive plans for senior management

	• Stock ownership requirements for directors and senior management

74 Years of Industry Leadership

Largest

Top 5

Leading

Delivering

provider of K-12

educational

staffing in U.S.

science,

engineering, and

office talent

provider in the U.S.

managed services

provider with

$8.3 billion spend

under management.

staffing,

outsourcing and

consulting across

Americas,

EMEA, and APAC.

Supported

75%

Top 3

Recognized

by 4,600+ supplier

partners globally.

of Fortune 100

companies use our

services.

on Forbes’ 2020 list

of America’s Best

Professional

Recruiting Firms.

as National Minority Supplier Development Council Class 1 Company of the Year.

8 2021 Kelly Proxy Statement

Proxy Summary

Financial Highlights

Full Year 2020 Financial Summary

Actual Results

Change

Constant Currency
Change⁽¹⁾

Revenue

$4.5B

(15.7%)

(15.5%)

Gross Profit %

18.3%

20 bps

Earnings from Operations

($93.6M)

Earnings Per Share

($1.83)

($4.67)

•

Revenue declined in all segments from decrease in demand related to the COVID-19 pandemic. Temporary staffing declined 20%, which was partially offset by a 9% increase in outcome-based services. Permanent placement revenue also declined 34%.

•

GP rate includes 20 bps favorable impact from COVID-related wage subsidies. GP rate also impacted by lower employee-related costs and structural improvement in product mix which offset the impact of lower permanent placement revenue and unfavorable customer mix as the recovery of demand from large accounts with lower margins outpaced the recovery of small and medium-sized customers.

•

Loss from operations is a result of the effect of weakening revenues and gross profit, partially offset by reduced expenses from efforts to align costs with GP trends. 2020 results also included a $147.7 million goodwill impairment charge, $12.8 million of restructuring charges, and a $9.5 million charge related to a customer dispute in Mexico that resulted in additional uncollectible accounts receivable charges, partially offset by a $32.1 million gain on sale of assets.

•

2020 EPS reflects lower earnings and includes $3.17 goodwill impairment charge, net of tax, $0.29 non-cash loss from the investment in Persol Holdings common stock, net of tax, $0.24 of restructuring charges, net of tax, a $0.17 non-cash charge related to a customer dispute in Mexico, net of tax, partially offset by $0.61 gain on sale of assets, net of tax. 2019 EPS includes an after-tax gain of $0.63 from the investment in Persol Holdings common stock and $0.23 gain on sale of assets, net of tax, partially offset by $0.30 of asset impairment charges, net of tax, and $0.10 of restructuring charges, net of tax.

⁽¹⁾

Constant Currency represents year-over-year changes resulting from translating 2020 financial data into USD using 2019 exchange rates.

2021 Kelly Proxy Statement 9

Proxy Summary

Full Year 2020 Financial Summary

(Excluding Goodwill Impairment, Gain/Loss on Investment in Persol Holdings, Gain on Sale of Assets, Customer Dispute Charge, Restructuring and Asset Impairment Charge)

Adjusted Results⁽¹⁾

Change

Constant Currency
Change⁽⁴⁾

Revenue

$4.5B

(15.7%)

(15.5%)

Gross Profit %

18.3%

20 bps

Earnings from Operations⁽²⁾

$44.3M

(51.2%)

(49.6%)

Earnings Per Share^(2),(3)

$1.44

($0.94)

•

Adjusted earnings from operations declined as the effect of weakening revenues and gross profit was only partially offset by reduced expenses from efforts to align costs with GP trends.

•

EPS declined on lower earnings.

⁽¹⁾

Adjusted earnings from operations and adjusted earnings per share are non-GAAP measures. Non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, the Company considers these measures, along with reported results, when it reviews and evaluates the its financial performance and believes that these measures provide greater transparency to investors and provide insight into how the Company is evaluating the its financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

⁽²⁾

Change excludes:

Goodwill impairment charge of $147.7 million, $124.7 million net of tax or $3.17 per share in Q1 2020.

Gain on sale of assets of $32.1 million, $23.9 million net of tax or $0.61 per share in Q1 2020.

Customer dispute charge related to Mexico of $9.5 million, $6.7 million net of tax or $0.17 per share in Q3 2020.

Restructuring charges of $12.8 million, $9.6 million net of tax or $0.24 per share in 2020.

Gain on sale of assets of $12.3 million, $9.0 million net of tax or $0.23 per share in 2019.

Restructuring charges of $5.5 million, $4.1 million net of tax or $0.10 per share in 2019.

Asset impairment charge of $15.8 million, $11.8 million net of tax or $0.30 per share in Q4 2019.

⁽³⁾

Change excludes:

Loss on investment in Persol Holdings of $16.6 million, $11.5 million net of tax or $0.29 per share in 2020 and gain on investment in Persol Holdings of $35.8 million, $24.8 million net of tax or $0.63 per share in 2019.

⁽⁴⁾

Constant Currency represents year-over-year changes resulting from translating 2020 financial data into USD using 2019 exchange rates.

10 2021 Kelly Proxy Statement

Proxy Summary

A Model for Growth

(As Reported, by Business Unit)

We have redesigned our operating model to drive profitable growth in our chosen specialties.

➊

➋

➌

➍

➎

Professional & Industrial

(P&I)

Science, Engineering & Technology (SET)

Education

Outsourcing & Consulting (OCG)

International

Revenue

$1.9B

$1.0B

$0.3B⁽¹⁾

$0.4B

$1.0B

GP Rate

17.8%

20.5%

14.7%

33.0%

12.7%

Geographic Span

North America

U.S.

Global

EMEA & Mexico

Specialties

– Industrial

– Contact Center

– Office

– Professional

– Engineering

– Science & Clinical

– IT

– Telecom

– K-12

– Early Childhood

– Higher Ed

– Special Needs

– MSP⁽²⁾

– RPO⁽²⁾

– PPO⁽²⁾

– Consulting

– EMEA Regional Life Sciences

– Local Niches

Kelly size and margin profiles are based on 2020 full year results.

⁽¹⁾	Kelly Education revenue was $0.5B prior to COVID-19 pandemic disruption in 2019, including the results of Insight on a proforma basis.

⁽²⁾	Managed Service Provider (“MSP”); Recruitment Process Outsourcing (“RPO”); Professional Payroll Outsourcing (“PPO”)

Portfolio Progress

We are using M&A activity to increase our focus on specialization.

LOGO

2021 Kelly Proxy Statement 11

Proxy Summary

Awards and Recognitions



EcoVadis Achievements • Recognized as a Silver Supplier for third consecutive year. • Increased our score by 20 points since 2017. • Ranked top 6% and 91st percentile of companies assessed on environment, labor and human rights, ethics, and sustainable procurement. • Placed in top 8% for ethics and top 5% for sustainable procurement categories.




National Minority Supplier Development Council (NMSDC) – Class 1 honors – 2020 Corporation of the Year	Michigan Minority Supplier Diversity Council (MMSDC) – 2020 ACE Award – Corporation of the Year for Professional Services & Staffing	Kelly was awarded the 2021 Military Friendly Employer designation and 2021 Military Friendly Spouse Employer by VIQTORY	For the 10th consecutive year, Kelly was recognized as one of America’s Top Corporations for Women- Owned Businesses by WBENC



For the 4th consecutive year, Kelly received a top score on the Human Rights Corporate Equality Index 2021. Best Place to Work for LGBTQ Equality	Kelly earned Silver Supplier status in business sustainability from EcoVadis	Kelly was named to FlexJobs® Top 100 Companies for Remote Jobs in each of the eight years the award has been in existence, 2014-2021	For the second year in a row, Kelly earned No. 3 spot on the global diversity award by WEConnect International



KellyOCG outsourcing excellence by the International Association of Outsourcing Professionals (IAOP) 2020 Global Outsourcing 100 List	HR Vendor of the Year by Human Resources Online 2020 – Gold Award for Best Recruitment Process Outsourcing Partner – KellyOCG Singapore	Forbes named Kelly as one of America’s top recruiting firms for 2020	KellyOCG – Leader for Services Procurement by Everest Group

Great Place to Work – KellyOCG India		Best Use of Online Recruitment by a Recruitment Agency, OnRec

12 2021 Kelly Proxy Statement

Proxy Summary

Executive Compensation Highlights

• Align pay with performance using balanced performance measures that are linked to strategic business objectives in both short- and long-term incentives for senior officers

• Align executive compensation with stockholder returns through performance-based equity incentive awards

• In 2020, renamed Compensation Committee to “Compensation and Talent Management Committee” to reflect focus on the employee lifecycle – recruitment, retention, performance management, compensation, etc.

• Annual review of performance measures and goals for our annual and long-term incentive plans by the independent Compensation and Talent Management Committee to ensure we use diversified measures with challenging, but attainable targets

• Require the achievement of a minimum acceptable level of financial performance for any payment to be made pursuant to the Short-Term Incentive Plan (“STIP”)

• Include caps on individual incentive payouts in incentive plans

• Require stock ownership and retention of a portion of equity-based awards by senior officers

• Hold an annual “say-on-pay” stockholder advisory vote on executive compensation

• Retain an independent executive compensation consultant to the Compensation and Talent Management Committee

• Regular review of executive compensation governance market practices, particularly when considering the adoption of new practices or changes in existing programs or policies

• Conduct annual assessments of any potential risks in our incentive compensation programs and policies and related internal controls

• Annually review with the Compensation and Talent Management Committee share utilization, burn rate and dilution levels resulting from our compensation practices

• Maintain an insider trading policy that requires directors, senior officers, and other designated officers of the Company to contact our Corporate Secretary prior to sales or purchases of common stock

• Maintain a double-trigger for the accelerated vesting provisions under the Equity Incentive Plan (“EIP”) and the Senior Executive Severance Plan

• Condition severance benefits for senior officers on compliance with restrictive covenants

• Provide employment agreements for senior officers (except where standard local practice)

• Guarantee bonus arrangements with our senior officers

• Allow directors or senior officers to engage in hedging or pledging of Company securities

• Allow the repricing or backdating of equity awards

• Pay dividend equivalents on unvested restricted stock units until performance hurdle has been achieved and vesting period has been completed

• Pay dividends on performance share awards

• Provide excise tax gross-ups upon change-in-control

• Grant incentive awards to senior officers that are not subject to the Company’s Incentive Compensation Recovery (“Clawback”) Policy

• Accrue additional retirement benefits under any supplemental executive retirement plans (“SERPs”)

• Provide excessive perquisites

2021 Kelly Proxy Statement 13

Proposal 1: Election of Directors

Proposal 1 – Election of Directors

The Board has nominated nine individuals for election as directors at the Annual Meeting, each to serve for one year and until his or her successor is elected and qualified. All of these individuals are currently serving on the Board.

Directors will be elected by a plurality of the votes cast by holders of Class B Common Stock who are present in person, or represented by proxy, and entitled to vote at the Annual Meeting. Our controlling stockholder has indicated its support and intention to vote for each of the director nominees.

We do not contemplate that any of the nominees will be unavailable to serve at the time of the Annual Meeting; in that event, however, the persons named in the enclosed form of proxy may vote for the election of a substitute selected by the Board or the Board may reduce its size.

Director Independence

On February 17, 2021, our Board affirmatively determined that directors Gerald S. Adolph, Robert S. Cubbin, Jane E. Dutton, Terrence B. Larkin, Leslie A. Murphy, and Donald R. Parfet, representing a majority of the Board, are independent. The Board’s guidelines for director independence conform to the listing standards of the Nasdaq Global Market (“Nasdaq”) on which the Company’s common stock is listed.

Board Nominees

The Corporate Governance and Nominating Committee regularly reviews the mix of individual directors on the Board to assess overall Board composition and is responsible for identifying and recommending to the Board qualified candidates for Board membership. The goal is to build a Board that is effective, collegial, diverse, responsive to the current and anticipated needs of the Company, and effectively represents the long-term interests of stockholders. The Committee considers the following criteria: (i) ethics, character, and judgment; (ii) business and other experience, expertise, skills, and knowledge relevant to the Company’s business and strategy; (iii) objectivity and independence of thought; (iv) diversity of viewpoints and perspectives, personal and professional experience, background, and personal characteristics such as gender, race, ethnicity, sexual orientation, and age; and (v) the balance of the candidate’s qualities with those of other members of the Board. The Board values diversity and takes it into consideration as we strive to maintain a Board that is strong collectively in its backgrounds, knowledge, and experience. Director candidates must also have a willingness to devote sufficient time to discharge their duties, taking into consideration principal occupation, memberships on other boards, attendance at Board and committee meetings, and other responsibilities. The Committee may engage third parties to assist in the search for director candidates. In determining whether to recommend a director for re-nomination, the Committee also considers the director’s recent contributions and potential for continuing contributions to the work of the Board. The Board has not adopted a policy whereby stockholders may recommend nominees to the Board because of the Company’s status as a controlled company.

Each of our director nominees has been recommended for election by our Corporate Governance and Nominating Committee and nominated by our Board. They are seasoned leaders who have held an array of diverse leadership positions in public and private companies, academia, nonprofit organizations, and other businesses. They represent diverse backgrounds and viewpoints. Together, they bring to our Board broad diversity in terms of experience, skills, and personal attributes. The Board believes that this diversity strengthens the Board’s ability to carry out its oversight role on behalf of stockholders. While we do not have a formal diversity policy, the Board will seek to build upon its diversity in connection with future Board membership.

The following graphics highlight the personal diversity and breadth of skills, knowledge, and experience that are represented on the Board. A particular director may possess other skills, knowledge, or experience in addition to those noted below.

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Proposal 1: Election of Directors

Board Diversity

LOGO

Experience and Qualifications

LOGO

2021 Kelly Proxy Statement 15

Proposal 1: Election of Directors

Biographical Information About Director Nominees



	DONALD R. PARFET Age: 68 Director since: 2004 Chairman of the Board Independent		PETER W. QUIGLEY Age: 59 Director since: 2019 Chief Executive Officer

Board Committees: • None		Board Committees: • None

Principal Occupation and Directorships: • Managing Director, Apjohn Group, LLC (2001 - present) • General Partner, Apjohn Ventures Fund (2003 - present) • General Partner, Apjohn Ventures Annex Fund (2010 - present) • Director, Rockwell Automation, Inc. (2008 - present) • Director, MASCO Corporation (2012 - present) • Director, Sierra Oncology Inc. (2015 - 2019)		Principal Occupation and Directorships: • President and Chief Executive Officer, Kelly Services, Inc. (2019 - present) • Executive Vice President, President of Global Staffing and General Manager of IT, Global Service, and Global Business Services, Kelly Services, Inc. (2017 - 2019) • Senior Vice President, General Counsel, Chief Administrative Officer and Assistant Secretary, Kelly Services, Inc. (2015 - 2017)

Education: • University of Michigan, MBA, Finance • University of Arizona, BA, Economics		Education: • National Law Center at George Washington University, JD • University of Michigan, BA

Mr. Parfet was appointed Chairman of the Board in 2018. Prior to being appointed to the Chairman role, he had served as the Board’s Lead Director since 2012. Mr. Parfet brings extensive financial and operating experience to the Board as an executive with responsibilities for numerous global businesses. He currently leads a business development company and a venture capital firm focused on the development of emerging medicines. He also serves as a director of two large publicly held companies and is a director and Trustee of a number of charitable and civic organizations. Mr. Parfet brings to the Board global operating experience, strong financial background, and proven leadership capabilities.		Mr. Quigley was appointed President and Chief Executive Officer of Kelly in October 2019. He has 18 years of experience in a variety of roles at Kelly and has served as an officer of the Company since 2004. Prior to joining Kelly, Mr. Quigley held an array of roles at Lucent Technologies and AT&T Corporation. He earned a Juris Doctorate (J.D.) from the National Law Center at George Washington University and a bachelor’s degree from the University of Michigan. Mr. Quigley also serves on the Board of the American Staffing Association, Detroit Regional Chamber and the Detroit Economic Club.

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Proposal 1: Election of Directors



	CAROL M. ADDERLEY Age: 61 Director since: 2010		GERALD S. ADOLPH Age: 67 Director since: 2018 Independent

Board Committees: • None		Board Committees: • Audit • Compensation and Talent Management • Governance and Nominating

Principal Occupation and Directorships: • Writer and Researcher in the Humanities		Principal Occupation and Directorships: • Director and Co-Chair, NAACP Legal Defense and Education Fund (1998 - present) • Director, Cintas Corporation (2006 - present) • Trustee, Cardinal Spellman High School Board (2010 - present) • Senior Partner and other executive positions, Booz & Co. (1981 - 2016)

Education: • University of Iowa, MA, English Literature • University of Chicago, AM, General Studies in Humanities, Literature and Social Change • University of Western Ontario, BA (Honors), English and Philosophy		Education: • Harvard Business School, MBS • Massachusetts Institute of Technology, MS, Chemical Engineering • Massachusetts Institute of Technology, BS, Management Science (Concentration in Organizational Psychology) • Massachusetts Institute of Technology, BS, Chemical Engineering

Ms. Adderley is the granddaughter of William R. Kelly, the Company’s founder, and the daughter of Terence E. Adderley, who served for many years as Chief Executive Officer and as Chairman of the Board. Ms. Adderley holds advanced degrees in the humanities and is a published author.		Mr. Adolph, who joined our Board in March 2018, has over 35 years of experience in growth strategy, mergers and acquisitions, and technology-driven industry changes. Mr. Adolph also has governance experience through his past service on the board of Booz & Co. and current service on the boards of Cintas Corp., where he chairs the compensation committee, and the NAACP Legal Defense and Education Fund, which he co-chairs.

2021 Kelly Proxy Statement 17

Proposal 1: Election of Directors



	GEORGE S. CORONA Age: 62 Director since: 2017		ROBERT S. CUBBIN Age: 63 Director since: 2014 Independent

Board Committees: • None		Board Committees: • Audit • Compensation and Talent Management (Chair) • Governance and Nominating

Principal Occupation and Directorships: • President and Chief Executive Officer, Kelly Services, Inc. (2017 - 2019) • Executive Vice President and Chief Operating Officer, Kelly Services, Inc. (2009 - 2017)		Principal Occupation and Directorships: • Director, Huntington Bancshares Incorporated (2017 - present) • Director, First Merit Corporation (2013 - 2017) • President and Chief Executive Officer, Meadowbrook Insurance Group, Inc. (2002 - 2016)

Education: • Oakland University, MBA • Wayne State University, BSBA		Education: • Detroit College of Law, JD • Wayne State University, BA, Psychology

Mr. Corona served as President and Chief Executive Officer of Kelly from May 2017 until his retirement in September 2019. He had more than 20 years of experience in a variety of executive roles with Kelly, including eight years as Executive Vice President and Chief Operating Officer. Prior to joining Kelly in 1994, he held management roles at Digital Equipment Professional Services Group and Burroughs Corporation. Mr. Corona also serves on the boards of several not-for-profit organizations.		Mr. Cubbin is an attorney with 31 years of experience in insurance law. In 2016, he retired as President and Chief Executive Officer of an insurance company. Mr. Cubbin currently serves as a director of one other publicly held company. In addition to his leadership experience, he brings to the Board expertise in the areas of legal, insurance, management, accounting, actuarial, investment, underwriting, reinsurance, and claims experience.

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Proposal 1: Election of Directors



	JANE E. DUTTON Age: 68 Director since: 2004 Independent		TERRENCE B. LARKIN Age: 66 Director since: 2010 Independent

Board Committees: • Compensation and Talent Management • Governance and Nominating		Board Committees: • Audit • Governance and Nominating (Chair)

Principal Occupation and Directorships: • Robert L. Kahn Distinguished University Professor Emeritus of Business Administration and Psychology, The University of Michigan Business School (2017 - present) • Robert L. Kahn Distinguished University Professor of Business Administration and Psychology, The University of Michigan Business School (2007 - 2017)		Principal Occupation and Directorships: • Executive Vice President, Business Development, General Counsel and Corporate Secretary, Lear Corporation (2008 - 2020)

Education: • Northwestern University, Ph.D. and MS, Organizational Behavior • Colby College, BA Sociology		Education: • Wayne State University Law School, JD cum laude • Michigan State University, BA (High Honors), Finance

Ms. Dutton is an expert in the field of organizational behavior and has researched and published numerous works on best practices related to engagement, commitment, and productivity of employees. Her understanding of factors contributing to organizational excellence provides the Board with a vital perspective on the Company’s transformation into a specialty talent company.		Mr. Larkin is an attorney with 28 years of experience in a business law practice. He retired in January 2020 as a member of the senior management team of a global manufacturing company with responsibility for legal affairs, internal audit, and global business development for mergers, acquisitions, and joint ventures. Mr. Larkin currently serves on the board of one not-for-profit organization. He brings to the Board a valuable combination of complex problem-solving skills, governance expertise, and global experience.

2021 Kelly Proxy Statement 19

Proposal 1: Election of Directors



		LESLIE A. MURPHY Age: 69 Director since: 2008 Independent

Board Committees: • Audit (Chair) • Compensation and Talent Management

Principal Occupation and Directorships: • President and CEO, Murphy Consulting, Inc. (2008 - present) • Certified Public Accountant • Member of AICPA’s Governing Council (2000 - present) • Member of NACD Advisory Councils on Audit Committee Issues and Risk Oversight (2012 - present) • Director, Detroit Legal News Company (2012 - present)

Education: • University of Michigan, BBA, Accounting

Ms. Murphy is a certified public accountant, former chair of the American Institute of Certified Public Accountants, and former Group Managing Partner of Plante & Moran, LLP, a national accounting firm. The Board has determined that Ms. Murphy qualifies as an “audit committee financial expert” within the meaning of applicable SEC regulations and has the leadership skills to chair the Audit Committee. She brings to the Board analytical capability, understanding of the economics and strategic elements of business, and expertise in enterprise risk management and cyber security.

20 2021 Kelly Proxy Statement

Corporate Governance

Compliance with Nasdaq Independence Standards for Non-Controlled Companies

Nasdaq, on which the Company’s common stock is listed, has established exemptions from its governance requirements for “controlled companies,” defined as companies in which a single person, entity, or group holds more than 50% of the voting power for the election of its directors. The Company is a “controlled company” by virtue of the fact that the Terence E. Adderley Revocable Trust K (“Trust K”), discussed below, has the power to vote approximately 93.5% of the Company’s outstanding shares of Class B Common Stock.

In keeping with the Company’s historic recognition of the importance of having a majority of independent directors, the Company has elected to comply voluntarily with all the Nasdaq listing standards that otherwise do not apply to controlled companies. Thus, a majority of the Board are independent directors and all members of the three Board Committees, Compensation and Talent Management, Audit, and Corporate Governance and Nominating, are independent (which is a Nasdaq requirement for all listed companies and fully satisfies the Nasdaq independence standards for boards and board committees of non-controlled companies).

Prior to his death in October 2018, Terence E. Adderley, our former Chairman, was the trustee of Trust K. Upon his death, Trust K became irrevocable and, in accordance with the provisions of the trust, Andrew H. Curoe, David M. Hempstead, and William U. Parfet were appointed as successor trustees (the “co-trustees”). The co-trustees are required to act by a majority vote in voting and making investment decisions with respect to the Class B Common Stock held by Trust K. The co-trustees, acting as a majority, have sole voting and investment authority over Trust K and cannot be removed or replaced by the beneficiary(ies) of Trust K.

William U. Parfet, a co-trustee, is the brother of Donald R. Parfet, Chairman of the Board. In determining that Donald R. Parfet is an independent director, the Board considered, among other things, that Donald R. Parfet and William U. Parfet are financially independent of one another, that the co-trustees are required to act by majority vote and that none of the co-trustees serves as an officer or director of the Company or has any personal financial interest in Trust K that could benefit from actions taken by the Board.

Board Leadership and Governance Structure

The Board is responsible for establishing and maintaining the most effective leadership structure for the Company. At the present time, the Board has determined that the roles of the Chairman of the Board and the Chief Executive Officer should be separate, with the Chairman an independent director, because that structure affords independent Board leadership and allows the Chief Executive Officer to concentrate on the Company’s business. Donald R. Parfet serves as Chairman of the Board and Peter W. Quigley serves as Chief Executive Officer.

The Chairman of the Board’s duties include consulting with our Chief Executive Officer, presiding over meetings of the Board and, together with our Chief Executive Officer, presiding over meetings of stockholders. The Chairman of the Board’s duties also include serving as liaison among the Chief Executive Officer and the independent directors, establishing the schedule for Board meetings (in consultation with the Chief Executive Officer), developing and approving agendas for Board meetings, approving the information sent to the Board for meetings, establishing the schedule and agendas for and presiding over meetings of the independent directors in executive session, providing feedback to the Chief Executive Officer on those executive sessions, and facilitating discussions among independent directors on key issues outside of Board meetings.

In the event that the Chairman of the Board is not an independent director, the Company’s Corporate Governance Principles provide that the independent directors will elect one of their number to serve as Lead Director and fulfill many of the Chairman of the Board’s current responsibilities.

The Chief Executive Officer is responsible for managing the business and affairs of the Company, subject to the oversight of the Board. The Chief Executive Officer’s duties include leading the management team, representing the Company externally, consulting with the Chairman of the Board about developments in the Company, and communicating with all directors about key issues outside of Board meetings.

2021 Kelly Proxy Statement 21

Corporate Governance


Board of Directors Majority Independent Independent Chairman of the Board

Audit Committee	Compensation and Talent Management Committee	Governance and Nominating Committee

All Independent	All Independent	All Independent

Committees of the Board

The Board established three standing committees: Audit Committee, Compensation and Talent Management Committee, and Corporate Governance and Nominating Committee. Each committee functions under a written charter adopted by the Board, which is available on the Company’s website at kellyservices.com or to any stockholder who requests a copy. The current members, responsibilities, and the number of meetings each of these committees held in 2020 are shown below.



Audit Committee

Members: All Independent Leslie A. Murphy (Chair) Gerald S. Adolph Robert S. Cubbin Terrence B. Larkin Meetings in 2020: 6 The Board unanimously determined that each member of the Audit Committee meets Nasdaq’s “financial sophistication” requirements and that Mr. Cubbin, Mr. Larkin, and Ms. Murphy each has the financial education and experience to qualify as an “Audit Committee financial expert” within the meaning of SEC regulations.		Key Responsibilities: • Oversees and reports to the Board with respect to the quality and integrity of the Company’s financial statements, accounting, and financial reporting processes, and audits of the financial statements and internal controls over financial reporting • Appoints, approves compensation, and evaluates the qualifications, independence, and performance of the independent auditor • Oversees the performance of the internal audit function • Oversees the Company’s Enterprise Risk Management Program • Monitors the Company’s compliance with legal and regulatory requirements • Reviews and approves related party transactions • Serves as the Company’s Qualified Legal Compliance Committee



Compensation and Talent Management Committee

Members: All Independent Robert S. Cubbin (Chair) Gerald S. Adolph Jane E. Dutton Leslie A. Murphy Meetings in 2020: 7		Key Responsibilities: • Develops the Company’s compensation philosophy • Designs and administers the Company’s executive compensation programs and policies that are aligned with business and compensation objectives • Determines and approves the annual compensation of the CEO, senior officers, and Section 16 officers • Reviews stock ownership requirements for senior officers and Board members and compliance with the requirements • Reviews and makes recommendations to the Board concerning director compensation • Reviews and advises the Board concerning CEO and senior officer succession planning and developmental opportunities

22 2021 Kelly Proxy Statement

Corporate Governance

Compensation and Talent Management Committee Interlocks and Insider Participation

During 2020, none of the Company’s executive officers served on the Board of Directors of any entities whose directors or officers served on the Company’s Compensation and Talent Management Committee. No current or past executive officers of the Company or its subsidiaries serve on the Compensation and Talent Management Committee.



Corporate Governance and Nominating Committee

Members: All Independent Terrence B. Larkin (Chair) Gerald S. Adolph Robert S. Cubbin Jane E. Dutton Meetings in 2020: 4		Key Responsibilities: • Identifies and recommends to the Board, nominees to serve on the Board • Monitors the independence of directors of the Board and Board Committees • Oversees the Board and Board Committees annual evaluation process, as well as the director peer review • Develops and oversees compliance with the Company’s Corporate Governance Principles • Reviews and makes recommendations to the Board with respect to corporate governance matters generally • Oversees and reports to the Board concerning the Company’s Corporate ESG Strategy

2021 Kelly Proxy Statement 23

Corporate Governance

Risk Governance and Oversight

While management is responsible for managing risk, one of the important functions of the Board and its committees is oversight of risk management. This includes consideration of strategic issues and risks to the Company as well as management’s actions to address and mitigate those risks. Risk is inherent in business, and the Board’s oversight, assessment, and decisions regarding risks occur in conjunction with the other activities of the Board and its committees.

Risk Governance and Oversight Responsibilities

Board of Directors

Oversees consideration of strategic issues and risks to the Company as well as management’s actions to address and mitigate those risks. The Board is kept apprised of its committees’ risk oversight activities through reports from the committee chairs presented at regular Board meetings. These reports and Board attention focus on risk management strategy and risks of greatest significance, and seek to ensure that risks assumed by the Company are consistent with the Company’s risk tolerance and risk appetite. Risk oversight is also addressed as part of the full Board’s regular oversight of strategic planning.


Audit Committee	Compensation and Talent Management Committee	Corporate Governance and Nominating Committee

• Plays a key role in the Board’s risk oversight process, particularly with respect to risks that could have a financial impact, such as financial reporting and disclosure, accounting practices, internal controls, conflicts of interest, and compliance with legal and regulatory requirements • Oversees the Company’s risk assessment and enterprise risk management processes • Reviews all quarterly and annual reports, including any disclosure of risk factors affecting the business • Reviews quarterly updates on the Company’s proactive approach to cyber security from the Information Technology and Internal Audit groups • Oversees the performance of the Company’s Internal Audit function • Monitors the qualifications, performance, and independence of the Company’s independent auditors	• Oversees our compensation plans, policies, and practices to ensure alignment with our Executive Compensation Risk Assessment Framework • Reviews the Company’s compensation program risk assessment for employee compensation programs and reports to the Board any compensation program that is reasonably likely to have a material adverse effect on the Company • Together with the Committee’s independent consultant, provides input to management regarding their annual assessment of potential risks created by our compensation plans, policies, and practices • Sets performance goals under our annual and long-term incentive plans that provide an appropriate balance between the achievement of short- and long-term performance objectives, with emphasis on managing the sustainability of the business and mitigation of risk • Manages risk associated with CEO and senior officer succession planning	• Manages risk associated with governance issues, such as the independence of the Board and its Committees, Board and Committee effectiveness and organization, corporate governance, and director succession planning • Maintains Corporate Governance Principles and procedures designed to assure compliance with all applicable legal and regulatory requirements and governance standards and the Company’s Code of Conduct and Insider Trading Policy • Annually reviews the Company’s ESG Strategy • Reviews the skills and experience of the Board and its committees on a regular basis, and as needed for potential candidates to serve on the Board, to ensure the diversity and relevant experience necessary for an effective Board • Evaluates annually the independence of each director under the independence requirements of Nasdaq and applicable SEC regulations • Oversees the orientation and education of directors to ensure clear understanding of their Board responsibilities and the Corporate Governance Principles, Code of Business Conduct and Ethics, and the Insider Trading Policy

24 2021 Kelly Proxy Statement

Corporate Governance

Management

Management assesses and manages critical risks, including the execution of the Company’s Enterprise Risk Management (“ERM”) program. The Company’s risk-related departments and functions in collaboration with the Vice President and Chief Risk, Compliance, and Privacy Officer (“Chief Risk Officer”), are responsible for risk assessment and mitigation. With respect to the risk assessment of the Company’s compensation programs, management is responsible for the framework and approach as outlined below under, Risk Assessment of Employee Compensation Programs.

Enterprise Risk Management Program

The Company’s ERM program serves as the primary means of identifying and managing the Company’s key risks. The Company’s ERM team, among other activities, performs assessments of risks to the Company, participates in the development and execution of mitigation programs for critical risks, facilitated the establishment of a corporate risk appetite and tolerance statement, oversees the privacy governance function, and assists in the integration of risk concepts within the Company’s strategic planning process and in alignment with the functional and business risk owners.

The ERM team reports its findings to the Audit Committee on a quarterly basis, providing both written reports and periodic in-person presentations. Its current activities remain focused on mitigation and oversight of specific risk exposures, analysis of the breadth and effectiveness of existing risk management practices, and maturation of measurement and monitoring practices concerning high-priority strategic and operational risks. Current areas of particular emphasis include pandemic response, third-party risk management, integration of risk assessment practices into the Company’s new structure, cyber security, data privacy, wage-hour risk management, and improvements to the Company’s compliance governance practices.

The Company’s Information Technology and Internal Audit groups provide regular quarterly updates to the Audit Committee with respect to the Company’s proactive approach to cyber security and other compliance controls. Controls are reviewed for operational effectiveness and to provide reasonable assurance that: business risk is managed; data, corporate information, and other assets are safeguarded; business processing infrastructure and applications are maintained; and all risks are mitigated to the extent practicable.

In addition to the reports submitted quarterly by the Company’s Chief Risk Officer, the Vice President of Internal Audit independently assesses the Company’s risk management process and separately reports on the effectiveness of the Company’s risk identification, prioritization, and mitigation processes to the Audit Committee.

During 2020, the ERM team played a key role in the Company’s response to the COVID-19 pandemic, leading the core team charged with prioritizing the health and safety of our employees and temporary workers, conducting daily meetings to examine the impact of the pandemic on our business, suppliers and customers, and development of plans for safely continuing operations during the pandemic including remote work and other health and safety measures. The Chief Risk Officer and other senior officers stayed in constant contact with the Board, providing updates on the COVID-19 situation and its impact on the Company at special and regularly planned meetings on at least ten occasions during 2020. During these discussions, the Board provided guidance and support for the Company’s key initiatives to preserve its liquidity and financial flexibility, and mitigate the risks presented by the pandemic and its impact on global markets.

Risk Assessment of Employee Compensation Programs

Annually, at its February meeting, the Compensation and Talent Management Committee reviews management’s Compensation Program Risk Assessment Report. The report is prepared by the Company’s Executive Compensation and Human Resources groups and reviewed by the Company’s Chief Risk Officer. The review and update of the Executive Compensation Program Risk Assessment Framework occurs, as needed, to ensure a robust and comprehensive assessment process. In addition, the Board’s independent compensation consultant reviewed the assessment prepared for the executive compensation section of the report.

2021 Kelly Proxy Statement 25

Corporate Governance



The Company’s Executive Compensation Program Risk Assessment Framework takes into consideration the following guiding factors:

		• Short- and long-term incentive performance measures and equity award types do not encourage excessive risk-taking

		• A balanced compensation structure that includes an appropriate mix of fixed and variable cash and equity; with a balance of short- and long-term incentive opportunities

		• Performance criteria and corresponding objectives include a balance of performance and the quality of such performance; include the appropriate use of top-line vs. bottom-line metrics; and use annual and long-term measures that complement each other

		• Well-designed plans that do not include steep payout curves, uncapped incentive payouts, or misaligned payout timing

		• Incentive plans tested for multiple scenarios under realistic assumptions to ensure that potential payouts are reasonable relative to results

		• Conduct a thorough and qualitative assessment of the achievement, quality, and sustainability of results

		• Benchmarked incentive plan payouts relative to performance, to ensure competitive practices in comparison with a representative peer group and general industry

		• Implementation of risk-mitigating features such as a clawback policy that applies in certain circumstances (e.g., the restatement of financial results) and a policy that requires a portion of the shares received from incentive award payouts to be retained by the participants through ownership/retention requirements

		• Incentive plan governance includes involvement at a variety of levels from the Compensation and Talent Management Committee to various corporate functions including Corporate Governance, Executive Compensation, Finance, HR, Legal, and the Committee’s outside Compensation consultant

		• Potential risk discussed with the Compensation and Talent Management Committee, recorded in Committee minutes, and discussed in the Compensation Discussion and Analysis section of the Company’s Annual Proxy Statement

To assess the risk of employee compensation programs below the executive level, the Company’s Human Resources group implemented a Governance Committee to review and approve plan design and address any significant issues that arise. The Governance Committee utilizes its Global Incentive Plan Design and Risk Mitigation Framework to consider alignment to the Company’s strategy and risks associated with the following elements of the design and implementation of each incentive plan:

•

Linkage of incentive measures with business objectives, analysis of total compensation market data, determination of design elements/payout threshold levels, potential range of payouts, and timely and accurate tracking of performance data

•

Modeling, approval, and communication of incentive plans

•

Calculation, audit, approval, and communication of incentive payments

•

Annual plan reviews to ensure planned design updates align with business goals and budgets, and do not present a material risk to the Company

After due consideration of management’s 2020 Compensation Program Risk Assessment Report, the Compensation and Talent Management Committee concluded that the Company’s compensation programs do not create a reasonable likelihood of a material adverse effect on the Company.

26 2021 Kelly Proxy Statement

Corporate Governance

Kelly’s ESG Strategy

The challenges of 2020 due to the pandemic resulted in strategic alignment for many companies to remain competitive. However, Kelly’s business continuity processes and strategic sustainability approach facilitated an increase in business opportunities in such a volatile global environment. In 2018, Kelly conducted a materiality assessment that helped define the policies and guidelines used to develop our sustainability agenda. This process helped us identify the main concerns and actions needed to focus on supporting the Triple Bottom Line⁽¹⁾. Our materiality assessment analyzed an exhaustive list of sustainability issues that cover all aspects of our business, considering Environmental, Social, and Governance (“ESG”) issues related to external standards⁽²⁾. Through this process, we identified stakeholders’ expectations and prioritized the most relevant topics upon which we developed our Corporate Sustainability Strategy.

⁽¹⁾

The Triple Bottom Line (“TBL”) is a concept that includes social and environmental considerations to the business model, in addition to the financial ones. It measures a company’s degree of social responsibility, its economic value, and its environmental impact.

⁽²⁾

The Global Reporting Initiative (“GRI”), EcoVadis Assessment, CDP (formerly Carbon Disclosure Project), Sustainable Development Goals, UN Guiding Principles of Human Rights, UN Global Compact, and the World Employment Confederation.

Based on six key pillars, our Sustainability Strategy focuses on an ESG structure that is aligned with our critical business values:

•

Environmental: Occupational Health and Safety; Environment

•

Social: Employees and People; Supply Chain and Customer Relations; Engagement

•

Governance: Ethics and Business Conduct; Communication and Reporting

LOGO

As we continue developing and monitoring our Sustainability Strategy, we work closely with cross-functional areas to assess our outreach and impact, considering an interdisciplinary perspective. We also formalized the oversight of our ESG efforts through a sustainability governance committee represented by executive leaders and overseen by the Corporate Governance and Nominating Committee of the Board. Kelly’s governance team met multiple times in 2020 to drive strategy and provide decision-making guidance to the ESG team. The ESG leader represents the team in meetings with the Corporate Governance and Nominating Committee and the full Board to review the ESG framework and the Company’s progress toward achieving goals. The Corporate Governance and Nominating Committee supports and encourages Kelly’s commitment to ESG matters through discussions and recommendations for continued improvements in these important areas.

2021 Kelly Proxy Statement 27

Corporate Governance

In 2020, we continued to engage with our customers and suppliers worldwide, and formalized ESG requirements on the supplier risk assessment methodology in order to evaluate their commitment to these issues and opportunities. We conducted a third-party risk analysis gap assessment to identify supplier performances and capabilities to assess risk considering ESG. As a result of the assessment, we redesigned our responsible supply chain management approach to better align to sustainable management standards.

2020 Achievements

During 2020, we continued our focus to improve Kelly’s ESG performance. Listed below are key outcomes in each area for the year. These results may have been impacted by COVID-19.

Environmental

2020 Goal

•

Reduce carbon emissions 3% in comparison to 2017 baseline by December 2020.

–

Partially achieved: Our scope 2 and 3 emissions were reduced 3%+ in comparison to our 2017 baseline. However, scope 1 emissions have varied over the past 3 years.

•

Scope 1 direct emissions from natural gas accounted for 762 metric tons of CO2e, remaining consistent with last year’s emissions (applies to U.S. Headquarters⁽¹⁾ location).

•

Scope 2 indirect emissions from the purchase of electricity in our operations accounted for 4,149 metric tons of CO2e, reduced by 17% from emissions last year (applies to U.S. Headquarters location).

•

Scope 3 emissions from employee business travel were 682 metric tons of CO2e. This represented a 75% reduction from last year (applies to U.S., Canada, and Switzerland Headquarters locations).

⁽¹⁾

U.S. Headquarters location includes: the Headquarters, Annex, Lindsey, and Kirts buildings.

Additional achievements for 2020

•

Over the last seven years, we have reduced our corporate campus building’s carbon footprint by 26%.

•

Energy consumption in our offices has decreased 19% between 2013 to 2020.

•

We held our first virtual carbon neutral event, where we avoided an estimated 28 tons of CO2 emissions to the environment and engaged our suppliers and internal network to plant 3,200+ trees in Sydney, supporting local reforestation initiatives from Australia wildfires.

•

70.13 tons of waste was recycled in our corporate campus.

•

Our Kelly Anywhere platform allowed employees to transition to remote working rapidly and effectively, ensuring business continuity and the health and safety of our employees during the COVID-19 response.

•

We deployed our Emergency Management Team to rapidly respond to the COVID-19 pandemic.

•

Our Absolute Zero program recorded the lowest recordable incident rate in our history.

Social

2020 Goal

•

Engage: 4,000 hours of volunteer work and 20% of participation by December 2020.

–

Achieved: Exceeded our service day volunteer hours goal with 605 employees contributing over 4,700 volunteer hours in social impact.

•

Define an overall strategy and roadmap (2021-2023) on Inclusion and Diversity (“I&D”) by December 2020.

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Achieved: Kelly begins 2021 with an overall strategy for I&D.

Additional achievements for 2020

•

Kelly’s CEO, Peter Quigley signed the CEO Action for Diversity and Inclusion pledge, the largest CEO-driven business commitment to advance diversity and inclusion within the workplace, standing with almost 2,000 other CEOs.

•

We launched Equity@Work, a bold initiative aimed at breaking down barriers to access meaningful work.

•

Our new program Kelly Discover serves as an engagement platform solution for Equity@Work that strives to create a more equitable and accessible labor market from underrepresented talent. It will reduce the gap by creating opportunities for neurodiverse and opportunity talent (e.g., persons with autism and other disabilities, Veterans, formerly incarcerated individuals, and other individuals from traditionally untapped talent pools).

28 2021 Kelly Proxy Statement

Corporate Governance

•

Approximately $59,000 USD contributed to social development initiatives.

•

The Kelly Relief Fund provided financial support to 41 of our employees affected by natural or human-made disasters, contributing more than $26,000 USD through grants.

•

We formalized five Affinity Groups in 2020, and a sixth group was established in early 2021. The Affinity Groups promote a culture of inclusion by celebrating differences, creating an environment where everyone feels encouraged to be their authentic selves, and supporting the professional development of employees.

•

We established an Inclusion Council, a cross-functional group to support the development of our I&D strategy.

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Our Diverse Global Supplier Network connected approximately 450 certified small and diverse suppliers to our Kelly network in 2020.

•

COVID-19 response:

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Protecting the health and safety of employees during the COVID-19 crisis was our top priority, and in response we implemented significant operating environment changes that we determined were in the best interest of our employees and talent, as well as the communities in which we operate, and which comply with government regulations. This includes having the vast majority of our internal employees work from home, while implementing additional safety measures for employees and talent continuing critical on-site work.

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Provided immediate and frequent communications to all employees using multiple channels that included: emails, text messages, social media, periodic webcasts, and leadership messages. Developed a specific page on our web site and launched the Kelly Cares Hotlines to facilitate and stay connected through updated information and active communications.

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We partnered with health care providers to offer special medical plans and benefits to our employees during the outbreak; some benefits included: waiving COVID-19 treatment cost, provided testing at no cost, and facilitated access to medications.

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The Kelly Learning Center extended well-being training on topics such as stress, anxiety management, remote work readiness, among others.

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Created portal for employees to share stories of success and best practices with talent, customers, and suppliers to help others navigate through similar situations during pandemic conditions.

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Established and communicated detailed plans for the return of employees to the workplace, to ensure employee confidence in a safe workplace.

Governance

2020 Goal

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Actively and formally communicate our non-financial and sustainability performance to all stakeholders (employees, investors, community, authorities, customers, etc.) by December 2020.

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Achieved: In May 2020 we published our 2019 Sustainability Report, prepared in accordance with the GRI Standards: Core Option, the Communication on Progress according to the United Nations Global Compact Guidelines. The report formalizes and discloses our Corporate Sustainability Strategy aligned to ESG framework.

Additional achievements for 2020

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All committees of the Board of Directors: Audit, Compensation, and Governance and Nominating, became fully independent (which is a Nasdaq requirement for all listed companies and fully satisfies the Nasdaq independence standards for boards and board committees of non-controlled companies).

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44% of the Board’s Directors are diverse, representing women or ethnically diverse members.

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97% of employees signed the Code of Business Conduct and Ethics.

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96% of our suppliers signed the supplier Code of Business Conduct.

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We adopted an integrated ESG reporting framework to disclose our sustainability performance, in which we aligned to GRI, SASB, and UNGC standards.

External assessments

External assessments, like EcoVadis and CDP, help Kelly align its corporate sustainability initiatives to the expectations of our customers, as well as to accurately report results. Since 2018, we have adopted international sustainability standards such as GRI, UNGC, SASB to ensure consistency, accountability, and transparency on our annual goals and impact. We also participate in external assessments such as EcoVadis, CDP, Human Right Campaign Foundation’s Corporate Equality Index (“CEI”), Responsible Business Alliance (“RBA”), and the ISS Corporate Solutions (“ICS”), which measures our sustainability performance and provides recommendations on our strategy implementation.

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•

EcoVadis achievements:

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Recognized as a Silver Supplier for third consecutive year.

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Increased our score by 20 points since 2017.

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Ranked top 6% and 91st percentile of companies assessed on environment, labor and human rights, ethics, and sustainable procurement.

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Placed in top 8% for ethics and top 5% for sustainable procurement categories.

The Company’s current Sustainability Report is available for viewing in its entirety on kellyservices.com. We plan to publish our 2021 report in early May 2021.

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Corporate Governance

Human Capital

Kelly is a talent solutions company dedicated to connecting people to work in ways that enrich their lives and our employees are critical to achieving this noble purpose. In order to compete and succeed in a highly competitive and rapidly evolving market, it is crucial that the Company attracts and retains experienced internal employees, as well as talent to work for our customers. As part of these efforts, we strive to offer competitive total rewards programs, foster an equitable, inclusive, and diverse environment, and give employees the opportunity to give back to their communities and make a social impact.

First and foremost, is the Company’s commitment to the health, safety, and wellness of our employees and talent. The success of our business is fundamentally connected to the well-being of our people. Accordingly, in response to the COVID-19 pandemic, the Company implemented significant operating environment changes determined to be in the best interests of our employees and talent, as well as the communities in which we operate, and compliant with government regulations. This includes having most of the Company’s internal employees work from home, while implementing additional safety measures for employees and temporary employees continuing critical on-site work.

LOGO

As of January 3, 2021, we employed approximately 1,000 staff members at our corporate headquarters in Troy, Michigan, approximately 3,300 staff members in other locations in the United States, and an additional 2,800 in our international locations. While the Company’s retention of employees improved year-over-year, it still lags our comparable external benchmarks. Retention rates for employees identified as high performing and high potential align with our comparable external benchmark.

In addition to our internal employees, the Company recruits talent on behalf of customers on a global basis. In 2020, we placed nearly 370,000 individuals in positions with our customers. In all of these instances, Kelly remains the employer of record for all talent working at customer locations. The Company retains responsibility for all assignments, wages, benefits, workers’ compensation insurance, as well as the employers’ share of applicable payroll taxes, and the administration of the employees’ share of these taxes. We also offer our talent access to competitive health and benefit programs while working with us.

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The Company is committed to providing competitive, equitable and fiscally responsible total rewards programs to our employees. Compensation programs are designed to attract, retain, and reward talented individuals who possess the skills necessary to achieve our strategic goals and create long-term value for our stockholders. We provide employees with competitive compensation opportunities, with strong pay-for-performance linkages that include a mix of base salary, short-term incentives and, in the case of our more senior employees, long-term equity awards. We believe that our programs provide fair and competitive opportunities that align employee and stockholder interests. In addition to cash and equity compensation, we also offer employees competitive benefits such as life and health (medical, dental and vision) insurance, paid time off, wellness benefits, and defined contribution retirement plans. Pay and benefits programs provided to our international employees are in line with competitive local practice.


				Since 1947, our founder fought to increase access to work for women and advocated for the value temporary and independent workers bring to the workplace. Today, we continue a commitment to fostering an inclusive and diverse workforce. A significant majority of Kelly’s U.S. workforce are women, including a majority of director and above roles. We believe an inclusive environment with diverse teams creates a workplace that is conducive to producing more creative solutions, results in better, more innovative products and services and presents Kelly as a workplace leader, aiding our ability to attract and retain key talent. We focus on cultivating a culture of belonging, where everyone feels welcomed and respected and can thrive as we work together.


				We consider sustainability to be a guiding principle in strengthening the relationship with our global workforce, suppliers, and customers. Through our programs and initiatives, we seek to contribute to improving the quality of life of our employees, their families, as well as the communities in which they live and work. Designed on the concept of social investment, our approach ensures the creation of future development capacities instead of aiding on isolated occasions. We support initiatives where our employees can actively engage in the causes they believe in that are also connected to our sustainability strategy. Through our Equity@Work platform, we are living our commitment to ensure equitable access to work and growth for all by creating alliances with like-minded companies, policy groups and institutions to positively impact the way companies hire, advance, and help more people thrive.

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Director Attendance

We expect directors to attend the Annual Meeting of the Stockholders, all Board meetings, and all meetings of the committees on which they individually serve. The Board held ten meetings during 2020. All directors then in office attended the 2020 Annual Meeting of Stockholders. In response to COVID-19 and to ensure a safe meeting environment, the Company conducted its 2020 Annual Meeting of Stockholders as a fully virtual meeting. In addition, all remaining 2020 Board and committee meetings were held virtually. Director attendance averaged 90% of the aggregate number of meetings of the Board of Directors and the committees on which they served during 2020. The majority of directors attended 100% of all Board and committee meetings on which they individually served in 2020. Mr. Wada completed his service as a director as of the date of the 2020 Annual Meeting. The independent directors met in executive sessions at which only they were present at least six times during 2020.

Size of the Board

Under the Company’s Amended and Restated Bylaws (the “Bylaws”), the number of directors constituting the Board may be fixed by the Board within the range of five to eleven directors. The size of the Board should not exceed a number that, as determined by the Board, will permit it to function efficiently in discharging its duties. There are currently nine members of the Board. Election of all director nominees will result in a nine-member Board immediately following the Annual Meeting.

Director Tenure

The Board does not have term or age limits. The Board believes that the contributions and insight of tenured directors into the Company’s operations and strategy outweigh the perceived value of such limits and facilitate Board effectiveness.

Director Service on Outside Public Company Boards

While there is no specified limit on the number of other public company boards on which a director may serve, the number of board memberships is a consideration, along with any other time commitments a director or nominee may have, in determining his or her ability to serve effectively. Directors must be willing and able to devote sufficient time to carrying out their duties and responsibilities effectively and have an intention to serve an appropriate length of time in order to make a meaningful contribution to the Board and the Company. A director should engage in discussion with the Chair of the Corporate Governance and Nominating Committee prior to accepting an invitation to serve on an additional public company board or accepting an invitation to chair a committee of a public company board on which he or she currently serves.

Director Orientation and Continuing Education

Management, working with the Corporate Governance and Nominating Committee, provides an orientation program for new directors. The program includes a review of the Company’s business, history, vision, Noble Purpose, strategic direction, competitive landscape, core values, ethics, corporate governance practices, financial matters, key policies, and senior leadership. The program consists of, as appropriate, review of written materials, briefings by the senior management, and visits to Company facilities. Directors are also encouraged to participate in continuing director education programs that include formal education sessions with management subject matter experts and participation in industry forums on business, financial, accounting, legal, and other subjects relevant to the Company’s business. The Company reimburses reasonable costs and expenses incurred by directors for continuing education.

Board, Committee, and Peer Evaluation

The Board recognizes that a robust and constructive evaluation process is essential to good governance and effectiveness. The Corporate Governance and Nominating Committee organizes and oversees an annual evaluation by the Board and its committees of their performance. The evaluation facilitates an examination and discussion by the

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entire Board and each committee of its effectiveness in fulfilling its charter requirements and other responsibilities, its performance as measured against the Company’s Corporate Governance Principles, and areas for improvement. From time to time the evaluation may also include individual director assessments.

In 2020, the Corporate Governance and Nominating Committee engaged an independent external advisor to conduct Board and committee evaluations, and a director peer review. The process included the completion of an online self-evaluation with both rated and open-ended questions, followed by confidential individual interviews with each director to elicit views on Board and committee effectiveness. During the one-on-one interviews, the independent advisor also asked each director to provide feedback on peer contributions to the Board’s effectiveness. This process was to encourage candid feedback from directors regarding the actions of the Board and its standing committees. All of the Board’s nine directors participated in the process. Prior to being presented to the Board, the external advisor aggregated results of the evaluation and interviews, anonymizing and randomizing responses, to promote healthy Board dynamics and best practices in corporate governance. The external advisor then presented a summary to the full Board and identified themes and issues that emerged from the evaluation or individual interviews. The Board and each committee discussed evaluation outcomes in executive session to determine what actions could further enhance its operations.

Code of Business Conduct and Ethics

The Board is committed to the highest legal and ethical standards and adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all directors, officers, and employees. The Code of Conduct forms the foundation for compliance with corporate policies and procedures and helps individuals recognize and deal with ethical issues, deter wrongdoing, provide mechanisms to report any concerns, promote honest and ethical conduct, provide full, fair, and timely disclosure, comply with applicable law and regulations, and help foster a culture of honesty and accountability. The Code of Conduct addresses conflicts of interest; anti-bribery/anti-corruption; insider trading; corporate opportunities; confidentiality and privacy; external communications; protection and proper use of assets; fair dealing; contract management; acceptable behavior in the workplace; corporate sustainability; compliance with laws, rules and regulations; risk tolerance; anti-human trafficking and slavery; seeking advice and reporting concerns; outside activities; political contributions; public company reporting requirements; and other policies. The Code of Conduct includes an enforcement mechanism.

The full text of the Code of Conduct is on the Company’s website at kellyservices.com. This information is available in print to any stockholder who requests it from the Company’s Investor Relations department. The Company will disclose future amendments to the Code of Conduct for its directors and executive officers on its website or by filing a current report on Form 8-K within four business days following the date of amendment, or such earlier period as may be prescribed by Nasdaq or the SEC.

Related Person Transactions and Certain Relationships

Pursuant to the Company’s Code of Conduct, any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company must be disclosed immediately to the Vice President of Internal Audit or to the General Counsel. In addition, directors and executive officers must complete a quarterly questionnaire that solicits information regarding any transactions or relationships between themselves or their immediate family members and the Company of the types described in Item 404(a) of SEC Regulation S-K (“Related Party Transactions”). Directors and executive officers must seek a determination and obtain prior authorization or approval of any potential conflict of interest (including any Related Party Transaction) from the independent Audit Committee. The Audit Committee, pursuant to its charter, is tasked, among other things, with the responsibility to review Related Party Transactions and other potential conflicts of interest involving directors and executive and senior officers. The Company maintains a formal written policy addressing the reporting, review, and approval or ratification of transactions with related persons.

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Director Compensation

Our approach

SEC Form DEF 14A filed by Kelly Services, Inc.