kfrc-20230313

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

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¨						Preliminary Proxy Statement
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KFORCE INC.

(Name of Registrant as Specified In Its Charter)

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2023			Proxy Statement

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

You are cordially invited to attend the 2023 Annual Meeting of Kforce Inc. Shareholders (the Annual Meeting) that will be held on Thursday, April 20, 2023 at 1150 Assembly Drive, Suite 500, Tampa, Florida 33607, commencing at 8:00 a.m., eastern time.

We are holding this meeting to:

1.Elect three Class II directors to hold office for a three-year term expiring in 2026;

2.Ratify the appointment of Deloitte & Touche LLP as Kforce’s independent registered public accountants for 2023;

3.Conduct an advisory vote on executive compensation;

4.Approve the Kforce Inc. 2023 Stock Incentive Plan; and

5.Attend to other business properly presented at the meeting.

Kforce’s Board of Directors (the Board) has selected February 17, 2023 as the record date (the Record Date) for determining shareholders entitled to vote at the meeting.

The proxy statement, proxy card and Kforce’s 2022 Annual Report to Shareholders are being mailed on or about March 13, 2023. Regardless of whether or not you plan to attend the annual meeting, we encourage you to vote your shares by using the internet, phone, or by signing, dating and returning the enclosed proxy card.

If you need further assistance, please contact Kforce Investor Relations at (813) 552-5000. Thank you for your continuing support.

BY ORDER OF THE BOARD OF DIRECTORS

David M. Kelly

Corporate Secretary

Tampa, Florida

March 13, 2023


Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on April 20, 2023. This proxy statement and our 2022 Annual Report to Shareholders are available at https://investor.kforce.com/financials/annual-reports/default.aspx.

1 Kforce 2023 Proxy Statement

LETTER TO OUR SHAREHOLDERS

As a human capital solutions business, we are driven by the desire to serve others, provide meaningful work and opportunities to a diverse workforce, strengthen our communities and shape a more sustainable world. For more than 60 years, we have worked to achieve our clients’ objectives by combining a KNOWLEDGEforce®—our namesake—with flexibility and an unmatched drive for excellence.

We are grounded and united as a Firm through our refreshed core values vision, mission and brand promise, which are:

◦Vision: To Have a Meaningful Impact on All the Lives We Serve®

◦Mission: Uniting Professionals to Achieve Success Through Lasting Personal Relationships®

◦Brand Promise: Achieve Great Results Through Strategic Partnerships and Knowledge Sharing®

2022 was an extremely successful year for Kforce. We met the financial objectives we outlined at the beginning of the year, despite the softening in demand we began to experience in the second half of 2022. We organically grew revenues in our Technology business by approximately 18% after growing more than 22% in 2021 and meaningfully improved profitability levels. Strategically, we advanced our integrated sales strategy to further integrate our managed teams and project solutions capability within our Technology business. Our team made significant progress advancing the multi-year effort to transform our back office, fully transitioned to our hybrid Office OccasionalSM work environment across all of our markets, opened our new state-of-the-art headquarters in Tampa on November 1, 2022 and considerably advanced our ESG program. As we look ahead to 2023, we expect to continue to make the necessary investments in our business to further advance our integrated sales strategy and the transformation of our back office to sustain our long-term growth ambitions, and to make additional progress towards double-digit operating margins. We believe we have a solid, highly tenured leadership team in place and we expect to continue to capture additional market share. We believe we are adequately prepared for the long-term and whatever the near-term macro-economic environment may bring.

We believe the continued strength in performance reflects the continued demand environment for highly skilled talent and the criticality of these resources to our clients' strategic priorities. We believe this is strong evidence that the secular demand drivers in the technology talent solutions space are more tightly correlated to our long-term success than fluctuations in the macro-economic environment.

Our people are at the heart of our business, drive our decision making, and are a critical ingredient to delivering superior results to our shareholders. We owe a great deal of gratitude to the many Kforcers for their fortitude, creativity, tenacity, innovation, and resilience.

BOARD REFRESHMENT

We routinely assess the skills and diversity of our Board members to ensure appropriate guidance and oversight for our Firm. Over the past several years, this approach has brought greater diversity and a reduction in the average age and tenure of our Board. Our Board is now comprised of 44% diverse members with respect to gender (33%) and race (11%). Our newer Board members have contributed additional knowledge in areas such as cybersecurity, community engagement and other key topics.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) MATTERS

Our stakeholders remain acutely interested in our ESG efforts. In 2022, we partnered with industry experts to help us refine and deepen our ESG journey, and ensure we are providing the most relevant information to stakeholders in an easy-to-comprehend manner. We dedicated a specific section of this Proxy Statement to sharing our 2022 efforts to reduce our impact on the environment, affect positive social change and exercise sound corporate governance. We also provide our goals for 2023 to further build our progress and evolve our ESG strategy. We are pleased with the hard work performed by our team in this area and are proud to share our comprehensive 2022 Sustainability Report with our stakeholders, which can be found on our website.

SHAREHOLDER ENGAGEMENT

Our commitment to shareholder engagement is grounded in recurring, open, and transparent communication. The feedback and perspective we receive from our shareholders will continue to inform our internal programs, practices and strategies, some of which is covered throughout this Proxy Statement. We appreciate all of those who participated in our shareholder outreach efforts in 2022 and remain open to and invite your feedback in 2023.

We are committed to engaging with our clients, consultants and the community while driving long-term, sustainable performance, providing transparent corporate governance and regularly communicating with our shareholders. We thank you for your ownership and support of Kforce and for allowing us the privilege of serving you.



David L. Dunkel, Chairman	Elaine D. Rosen, Lead Independent Director	Joseph J. Liberatore, President and Chief Executive Officer, Director

2 Kforce 2023 Proxy Statement

TABLE OF CONTENTS


BOARD AND CORPORATE GOVERNANCE			4
Role of the Board			4
Leadership Structure			4
Committee Structure			5
Directors' Time Commitments			6
Board's Role in Risk Oversight			7
Our Board of Directors			9
Biographical Information for Our Director Nominees			10
Proposal 1. Election of Directors			11
Biographical Information for Our Continuing Directors			12
Composition and Diversity			14
Environmental, Social and Governance (ESG) Oversight and Activities			16
Related Party Transactions, Compensation Committee Interlocks and Insider Participation			21
Director Compensation			22
Executive Officers			23
Proposal 2. Ratification of Appointment of Independent Registered Public Accountants			24
EXECUTIVE COMPENSATION			26
Compensation Discussion and Analysis			26
Executive Summary			26
Our Compensation Principles, Components and Practices			27
Named Executive Officer Compensation			32
Executive Compensation Tables			38
CEO Pay Ratio			45
Pay versus Performance			46
Proposal 3. Advisory Vote on Executive Compensation			48
Proposal 4. Approval of Kforce Inc. 2023 Stock Incentive Plan			49
Securities Authorized for Issuance Under Equity Compensation Plans			54
Stock Ownership Information			54
General Information			56
Shareholder Communications, Proposals and Other Matters			57
Appendix A. Kforce Inc. 2023 Stock Incentive Plan			58
Appendix B. Adjusted Financial Performance Measures			72

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BOARD AND CORPORATE GOVERNANCE

ROLE OF THE BOARD OF DIRECTORS

The primary functions of our Board of Directors (the Board) are to:

•oversee the performance of management on behalf of our shareholders;

•advocate on behalf of the long-term interests of our shareholders;

•discuss and consider the Firm’s strategic planning and executive succession activities;

•review and approve the Firm’s long-term strategic plan developed by management;

•monitor adherence to the Firm’s established procedures, standards and policies;

•provide active oversight of risks that could affect Kforce, including cybersecurity risks;

•provide oversight of the Firm’s Environmental, Social and Governance (ESG) program;

•promote sound corporate governance policies and practices; and

•carry out other duties and responsibilities as may be required by state and federal laws, as well as the Nasdaq rules.

We believe that sound corporate governance is fundamental to the overall success of Kforce. Our key governance documents, including our Corporate Governance Guidelines, are available at http://investor.kforce.com/governance/governance-documents. In connection with our 2022 ESG efforts, several of our governance documents were reviewed and updated to incorporate a number of topics, further strengthen our policies and practices in others, and we adopted new policies in other areas.

In conjunction with management reports and dialogue with executive leadership, the Board reviews various operational, strategic, financial, capital markets and legal compliance areas, business and sector trends, as well as the Firm’s progress against established objectives and risks. At each quarterly Board meeting, our Board receives:

•an executive summary that includes, among other items, a risk factors section;

•our financial and operational performance, including progress against its objectives;

•an update on our continued innovation (both technological and process) and transformation efforts;

•management’s assessment of the current state of the capital markets and macro-economic environment;

•management’s analysis on the current state of the staffing and solutions industries and corporate development activities;

•insights on human capital trends, productivity metrics and, as part of our ESG program, specifically highlighting Diversity, Equity and Inclusion (DE&I) efforts;

•a report on the Firm’s Enterprise Risk Management (ERM) program;

•update on the Firm’s ESG program;

•a claims, litigation and ethics hotline summary;

•update on key regulatory changes and potential impact on our business

•updates on relevant matters arising from each of the committees of the Board; and

•reports on other matters that may arise from time to time, which require reporting to the Board, including a quarterly update from the Audit Committee on any significant cybersecurity related items.

On a monthly basis, our Board receives:

•a description of certain significant events and risk factors, if any, that have occurred in each period;

•a financial update from management, including operating trends against expectations; and

•any other necessary items requiring the attention of the Board.

On an annual basis, executive management and our Board discuss the Firm’s near-term and longer-term strategic objectives, management’s progress towards its objectives and any necessary changes based on our position and the evolving external landscape. Over the last several years, management has engaged in dedicated sessions with the Board related to the development and progress against the Firm’s cybersecurity program as well as our ESG program.

LEADERSHIP STRUCTURE

Our Board continues to be led by its Chairman, David L. Dunkel, who served as our Chief Executive Officer (CEO) for more than 40 years and retired effective December 30, 2021. Kforce has continued to employ Mr. Dunkel on a limited, part-time basis. Our Corporate Governance Guidelines recognize the importance of a lead independent director in the absence of an independent Chairman and sets forth specific responsibilities, including: presiding at executive sessions of the independent directors; serving as a liaison between the independent directors and CEO; and having oversight of CEO hiring, succession and performance. Our lead independent director is Elaine D. Rosen.

Our commitment to Board independence is further supported by the independent directors who chair each of the Audit, Compensation, and Nomination committees. As a result, the oversight of the critical issues within the purview of these committees is entrusted to the independent directors and serves to further uphold effective governance standards. All continuing directors are independent, with the exception of Mr. Dunkel and Mr. Liberatore.

The Board and executive management remain open to, and regularly seek, shareholder feedback with regard to governance topics such as its leadership structure and considers the feedback provided as part of its assessment process. Aspects of our shareholder engagement efforts are summarized in the “Consideration of Shareholder Feedback” section of this Proxy Statement.

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COMMITTEE STRUCTURE

Our Board has established four standing committees consisting of an Audit Committee, Compensation Committee, Nomination Committee and Corporate Governance Committee. These committees facilitate a more in-depth assessment of certain important areas than can be addressed during each quarterly Board meeting. The Board has determined that the chair and each of the committee members of its Audit, Compensation, Nomination, and Corporate Governance Committees are independent within the meaning of the Nasdaq and SEC Rules. The committee members and independent directors meet regularly in executive session without management. Each Committee has the authority to retain or obtain the advice of legal counsel, accountants, and other advisors. Written charters of each committee are available at http://investor.kforce.com/governance/governance-documents and have been recently updated primarily to reflect each committee’s responsibilities as it relates to overseeing activities under our ESG program. Additional information regarding the composition and responsibilities of each committee is described below.


Corporate Governance Committee
Members:			Roles and Responsibilities of the Committee:
Elaine D. Rosen (Chair)			The functions of the Corporate Governance Committee are to: encourage and enhance communication among independent directors; provide a forum for independent directors to meet separately from management; provide leadership and oversight related to ethical standards and governance practices (including ESG); and provide a channel for communication with the CEO. The Corporate Governance Committee also coordinates a formal, written annual evaluation of the performance of the Board, each of its committees and the CEO. Each member of the Board who is independent (as determined under the Nasdaq Rules) serves on the Corporate Governance Committee. This committee is designed to fulfill the requirements of Nasdaq Rule 5605(b)(2) (i.e., through the meetings of this committee, our independent directors meet at least once annually in executive session without any of our management present). The Firm’s Lead Independent Director serves as the Chair of the Corporate Governance Committee.
Derrick D. Brooks
Catherine H. Cloudman
Ann E. Dunwoody
Mark F. Furlong
Randall A. Mehl
N. John Simmons
Number of Meetings:
4

Audit Committee
Members:			Roles and Responsibilities of the Committee:
Mark F. Furlong (Chair)			The Audit Committee oversees the accounting and financial reporting processes of the Firm and the Firm’s ERM program. The Board also delegated responsibility for the Firm’s cybersecurity program and data privacy practices. In discharging this oversight role, the Audit Committee is empowered to investigate any matter brought to its attention, with full access to all books, records, facilities and personnel of Kforce, and the power to retain outside counsel or other experts. This committee also has the responsibility for selecting, evaluating, compensating, and monitoring the independence and performance of the Firm’s independent auditors in conducting its audits and reviews, reviewing and approving related party transactions and overseeing the Firm’s internal audit function and ERM program, including cybersecurity, data privacy and ESG disclosures. At each quarterly meeting, or more frequently as needed, the members of the Audit Committee meet in executive session and meet regularly in separate executive sessions with the Firm’s Vice President of Internal Audit, General Counsel, and Deloitte & Touche LLP, our independent registered public accountants. The Board has determined that Mr. Furlong, Ms. Cloudman and Mr. Simmons are considered audit committee financial experts, as defined by SEC Rules.
Catherine Cloudman
N. John Simmons
Number of Meetings:
5


Compensation Committee
Members:			Roles and Responsibilities of the Committee:
Randall A. Mehl (Chair)			The Compensation Committee is responsible for the development of the compensation principles that guide the design of the Firm’s named executive officer compensation program, which includes: reviewing and approving the named executive officer compensation plans; approving any new or amended employment agreements for the Firm’s named executive officers; issuing grants or awards to the Firm’s named executive officers under its long-term incentive program; and preparing an annual report on the Firm’s executive compensation policies and practices as required by SEC Rules. In the discharge of its duties, the Compensation Committee also has the authority to select and utilize an independent compensation consultant to assist in the evaluation of director and named executive officer compensation.
Mark F. Furlong
Elaine D. Rosen
Number of Meetings:
5

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Nomination Committee
Members:			Roles and Responsibilities of the Committee:
Ann E. Dunwoody (Chair)			The Nomination Committee is responsible for: identifying and recommending candidates to establish board diversity; assessing the size and composition of the Board; establishing procedures for the nomination process; and overseeing board education and training. The Nomination Committee has the authority to retain a search firm to be used to identify director candidates and to approve the search firm’s fees and other retention terms. The Nomination Committee has not established minimum qualifications for director nominees because it is the view of this committee that the establishment of rigid minimum qualifications might preclude the consideration of otherwise desirable and qualified candidates for election to the Board. The Nomination Committee will consider director candidates recommended by shareholders. Refer to the section titled “Shareholder Communications, Proposals and Other Matters” below.
Derrick D. Brooks
Randall A. Mehl
Number of Meetings:
4

During 2022, the Board held five meetings and the four committees of the Board held a total of 18 meetings. Each director attended 100% of the Board meetings, except one director who attended 80%, and all of the directors attended 100% of the committee meetings on which he or she served. Our Corporate Governance Guidelines invite, but do not require, our directors to attend our annual meeting of shareholders.

DIRECTORS’ TIME COMMITMENTS

Kforce’s Corporate Governance Guidelines limit non-employee directors to serving on no more than four public-company boards (including Kforce). In the context of reviewing our directors’ continued ability to dedicate sufficient time to our Board, Kforce assesses each director’s compliance with this policy. Each of our directors is currently compliant with this policy.

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BOARD’S ROLE IN RISK OVERSIGHT

Identifying and managing potential impacts to our business, including any ESG-related items, is critical to our long-term success and, thus, generating long-term shareholder value. The Board, as a whole and at the committee level, has an active role in overseeing the management of the Firm’s risks. The Board’s primary mechanism for assessing overall risk to the Firm as well as management’s actions to address and mitigate those risks is through a comprehensive, integrated ERM program.

Enterprise Risk Management

Our ERM program is committed to regularly assessing risks and testing plans to prepare for the possibility of a range of events occurring, including severe weather, threats to our systems and data security, financial fraud or loss, infectious disease and other hazards. All potential and actual risks are ranked and prioritized into one of the following categories:


FINANCIAL			OPERATIONAL
Traditional monetary risks covering cash and treasury management activities, risks inherent in achieving our profitability objectives, meeting regulatory reporting requirements, and susceptibility to fraudulent activities			Risks associated with general execution of the business, including key core processes and strategies for areas such as payroll and business continuity; cybersecurity and data privacy risks and an assessment of risks of evolving disruptive or enabling technologies.

CLIENT			LEGAL/HR
Risks associated with the capture, development and retention of our clients with a specific focus on contractual compliance and any concentration risks; retention risks associated with our associates who support our clients, candidates and consultants.

SEC Form DEF 14A filed by Kforce Inc.