Form DEF 14A H&R BLOCK INC For: Sep 09

These items of business are more fully described in the proxy statement accompanying this notice. The Board of Directors has fixed the close of business on July 9, 2021 as the record date for determining shareholders of the Company entitled to receive notice of and vote at the meeting and any adjournment or postponement thereof.

To be admitted to the meeting online, you must enter the Control Number found on your proxy card, voting instruction card, or notice of availability of proxy materials. A list of shareholders entitled to vote at the meeting will be made available during the meeting at the website referenced above.

As our nation begins to emerge from the COVID-19 pandemic, I am pleased to report that our company had its best overall year in more than a decade. Based on activity through May 18, to account for the extended tax season 2021, we grew market share, both overall and in the Assisted tax category; DIY revenue increased year over year; we continued to broaden and improve our digital services for both assisted and DIY customers; and Wave revenue growth returned to pre-pandemic levels.

None of these achievements would have been possible without the “above and beyond the call of duty” performance by all of our associates and franchisees. Working again under the continuing challenges of the COVID pandemic, the entire H&R Block community collaborated to ensure that our over 20 million US tax customers promptly received not only their refunds, but also—very importantly—the stimulus payments which have proven so critical to our nation’s economic recovery. I know all of you will join me in conveying our sincere thanks to our CEO Jeff Jones, his senior management team, and the rest of our outstanding organization.

Making a great tax preparation business even greater is but one leg of our Block Horizons 2025 strategy for growth. Through both Block Advisors and Wave, we are moving aggressively to leverage and expand our more than two million small businesses we serve today. As we enhance the scope of these services, certifying 25,000 of our tax professionals as small business specialists, developing our small business oriented hybrid tax preparation products, and adding bookkeeping and payroll services, we are well on our way to serving a greater share of the 32 million small businesses in America.

And just as we are growing our small business capabilities, we are also building a capability to service the more than 30 million underbanked Americans, including eight million of our own tax preparation customers. We are building a mobile banking platform we expect to launch in beta form by the end of this calendar year. In the years ahead, we expect this product to meaningfully enhance our financial product revenues.

Giving Back is the cornerstone of our compact with all stakeholders. For you, our shareholders, Giving Back means a 4% dividend increase—our fifth increase in six years, for a total increase of 35% in that time frame. It means $188 million in share buybacks during fiscal 2021, and nearly $1 billion since 2017. And finally, as of this writing (July 15^th), it means a share price increase of more than 50% since the start of 2021.

For the rest of our stakeholders, Giving Back means pursuing and enhancing the legacy of Henry and Richard Bloch, our founders, who were devoted to making our communities—and the world at large—better places for all people. Our 2021 Annual Report and our Corporate Responsibility Report detail the broad range of ways we contribute.

Finally, a few words about your Board of Directors. First, I want to acknowledge the enormous contributions of three individuals who have served as outstanding board members for, collectively, nearly four decades. David Baker Lewis stepped down last March and Paul Brown and Bruce Rohde are not candidates for re-election this year. Over the years, David, Paul and Bruce provided invaluable advice and played important leadership roles as committee chairs. It is a privilege to have worked with them and we will miss them, both professionally and personally.

At the same time, it is testimony to the vitality of our company and its leadership that we are able to attract new board members like Sean Cohan and Mia Mends, who are appearing on our slate for the first time. Sean and Mia joined the Board earlier this year and have already made substantial contributions. I trust you will agree that they are eminently qualified to serve and represent you, our shareholders.

In conclusion, thank you for your loyalty and support. All of us on the Board are proud to serve. As always, we are available for your questions or comments.

This proxy statement is provided in connection with the solicitation of proxies by the Board of H&R Block, Inc., a Missouri corporation (“H&R Block” or the “Company” or “we”), for use at the Annual Meeting to be held virtually on Thursday, September 9, 2021 at 8:00 a.m. Central Time. References to the Annual Meeting in this proxy statement include any adjournment or postponement thereof. We are holding the Annual Meeting solely by means of remote communication, as we believe that hosting a virtual meeting enables greater shareholder attendance from any location around the world, as demonstrated by the level of shareholder attendance at last year’s virtual annual meeting. We designed the format of the virtual Annual Meeting to ensure that our shareholders who attend the virtual Annual Meeting will be afforded comparable rights and opportunities to participate as they would at an in-person meeting. See below under Questions and Answers About the Annual Meeting and Voting for more information. You can attend the Annual Meeting online, vote your shares, and submit questions prior to and during the meeting by visiting www.virtualshareholdermeeting.com/HRB2021.

This proxy statement contains information about the matters to be voted on at the meeting and the voting process, as well as information about our directors and executive officers. Please refer to Questions and Answers About the Annual Meeting and Voting beginning on page 62 for the answers to certain frequently asked questions about the Annual Meeting and this proxy statement. Our proxy materials were first sent or made available to shareholders on or about July 29, 2021.

During March 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic. As a result of the COVID-19 pandemic, the Internal Revenue Service (the “IRS”) extended the federal tax filing deadline in the United States (U.S.) for individual 2019 tax returns from April 15, 2020 to July 15, 2020 and substantially all U.S. states with an April 15 individual state income tax filing requirement extended their respective deadlines. Consequently, a portion of revenues and expenses that would have normally been recognized in our fourth quarter of fiscal year 2020 shifted to the first two quarters of fiscal year 2021.

Due to the ongoing impacts of the pandemic, on March 17, 2021, the IRS extended the federal tax filing deadline for individual 2020 tax returns from April 15, 2021 to May 17, 2021. Substantially all U.S. states with an April 15 individual state income tax filing requirement extended their respective deadlines. Consequently, a portion of revenues and expenses that would have normally been recognized in our fourth quarter of fiscal year 2021 shifted to our next fiscal period.

These extensions impacted the typical seasonality of our business and the comparability of our financial results. See additional discussion of these impacts in our Annual Report on Form 10-K for the fiscal year ended April 30, 2021 filed with the SEC on June 15, 2021.

During fiscal year 2021, we introduced our Block Horizons 2025 strategy, the next phase of our strategic transformation, which builds on previous work to strengthen our foundation and position us for long-term, sustainable growth.

Since our Investor Day in December 2020 at which we laid out our Block Horizons strategy, we have been executing across our three strategic imperatives, as follows:

Considering full tax season 2021 results (January 1, 2021 through May 18, 2021), we achieved strong volume results, increasing the number of U.S. Assisted e-filed returns filed by approximately 7.3% and total U.S. e-filed returns by approximately 3.8% when compared to the full tax season 2020 (January 1, 2020 through July 15, 2020, normalized for typical mid-May through mid-July volumes). We estimate we gained approximately 0.3% of total market share when compared to last year’s completed tax season. In the Assisted category, we estimate we gained approximately 0.7% share.

On June 9, 2021, our Board of Directors approved a change of our fiscal year end from April 30 to June 30, effective immediately. In early August 2021, we plan to file a transition report on Form 10-QT for the transition period of May 1, 2021 through June 30, 2021. The Company's 2022 fiscal year began on July 1, 2021 and will end on June 30, 2022. Due to this change in fiscal year, we currently intend to hold our 2022 annual shareholder meeting in early November 2022.

The Governance and Nominating Committee works with the Board to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board takes into account many factors, as described in detail on page 6. The Board evaluates each individual in the context of the Board as a whole with the objective of retaining a group of directors with diverse and relevant experience that can best perpetuate the Company’s success and represent shareholder interests through sound judgment.

The Board desires to maintain an overall balance of experience, continuity and fresh perspectives, and thus made two additions to the Board since the 2020 annual meeting of shareholders, adding a total of four new directors over the last three years.

The Board believes that diversity in the boardroom is critical to the success of the Company and its ability to create long-term value for our shareholders. The diverse backgrounds of our individual directors improve the Board’s oversight and evaluation of management on behalf of the shareholders and produce more creative thinking and better strategic decision-making by the Board.

Although we do not have a formal policy concerning diversity of director nominees, the Board has made, and will continue to make, diversity in gender, ethnic background, geographic origin, and professional experience a priority when considering director candidates.

Our Corporate Governance Guidelines provide that our Board is responsible for oversight of the Company’s policies, programs, and strategies regarding significant environmental, social, and governance (“ESG”) matters, which include, among other things, corporate social responsibility, environmental sustainability, and human capital management. The Board receives, at least annually, an ESG update from management and reviews ESG policies, programs, strategies, risks, and trends. The Board also has regular discussions each year on other human capital management topics, including diversity, inclusion, and belonging, top talent, succession planning, and associate engagement. The Governance and Nominating Committee will review, and make recommendations regarding, ESG matters when requested by the Board.

The Audit Committee of the Board is responsible for the oversight of policies and processes pertaining to the Company’s enterprise risk management (“ERM”) program and specifically considers risks and controls relating to, among other things, data and cyber security. Management briefs the Audit Committee on information security risk matters as a part of regular ERM reports, with a deep dive focused solely on information security at least annually.

We operate as a Purpose-driven brand serving millions of clients around the globe, to provide help and inspire confidence in our clients and communities everywhere. This Purpose guides our ongoing business operations and how we seek to provide help both in our community and in our workplace. As a Purpose-driven company, we have a responsibility to empower our associates, champion diversity, inclusion, and belonging, lead our business with integrity, help create vibrant communities with thriving entrepreneurship, and reduce our environmental impact. Our performance in these areas not only guides our business strategy but helps us to identify key risks and improve our ability to attract and retain investors, clients, and associates. Our Purpose and approach to business are inextricably intertwined and we are successful when we provide valuable help to our clients that inspires their own confidence. When we accomplish this, we not only create a new H&R Block customer for life, but we also create brand advocates.

We demonstrate our Purpose through our community impact platform, Make Every Block Better; commitments to diversity, inclusion, and belonging through the Belonging@Block initiative for associates; our Racial Equity Action Plan, where we have pledged to do our part to end systemic racism; proactive and sound ethics and corporate governance; and responsible reduction of our impact on the environment.

For more information and detail on how we view corporate responsibility and how we demonstrate our Purpose, please refer to our annual Corporate Responsibility Report found at www.makeeveryblockbetter.com.

The Articles and Bylaws provide that all of the directors shall be elected annually. Under the Bylaws, each director holds office until the earlier of the election and qualification of such director’s successor or the director’s death, resignation, retirement, disqualification, disability, or removal from office. Any vacancy on the Board may be filled by a majority of the directors remaining in office. The Company’s Bylaws provide that any incumbent director who is not elected by a majority of shares entitled to vote on the election and represented in person or by proxy shall promptly tender an irrevocable resignation to the Company’s Board, subject only to the condition that the Board accept the resignation. The Board and the Governance and Nominating Committee must consider and act on the resignation, as more fully described under “Corporate Governance – Mandatory Director Resignation Policies,” on page 18. To be eligible to be a nominee as a director, whether nominated by the Board or a shareholder, a person must deliver to the Company a written agreement that such person will abide by this director resignation requirement.

The Board has nominated Sean H. Cohan, Robert A. Gerard, Anuradha (Anu) Gupta, Richard A. Johnson, Jeffrey J. Jones II, Mia F. Mends, Yolande G. Piazza, Victoria J. Reich, Matthew E. Winter, and Christianna Wood for election as directors of the Company. Unless otherwise instructed, the appointed proxies will vote the shares represented by the proxy cards received by them for each of the nominees named below. Each nominee has consented to be named in this proxy statement and to serve as director if elected. If any nominee becomes unavailable for election for any reason, the Board may provide for a lesser number of directors or designate substitute nominees, and the proxies will be voted for the remaining nominees and any substitute nominees, unless otherwise instructed by a shareholder.

The Board of Directors is responsible for nominating members for election to the Board and for filling any vacancies between annual meetings of shareholders. The Governance and Nominating Committee is responsible for identifying, screening, and recommending director candidates to the entire Board. The Governance and Nominating Committee works with the Board to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members. In evaluating the suitability of individual Board members, the Board takes into account many factors as described below. The Board evaluates each individual in the context of the Board as a whole with the objective of retaining a group of directors with diverse and relevant experience that can best perpetuate the Company’s success and represent shareholder interests through sound judgment.

The Governance and Nominating Committee may seek the input of other members of the Board or management in identifying candidates who meet the criteria outlined above. In addition, the Governance and Nominating Committee may use the services of consultants or a search firm. The Governance and Nominating Committee will consider recommendations by the Company’s shareholders of qualified director candidates for possible nomination by the Board. Shareholders may recommend qualified director candidates by writing to the Company’s Corporate Secretary at H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105. Submissions should include information regarding a candidate’s background, qualifications, experience, and willingness to serve as a director. Based on a preliminary assessment of a candidate’s qualifications, the Governance and Nominating Committee may conduct interviews with the candidate or request additional information from the candidate. The Governance and Nominating Committee uses the same process for evaluating all candidates for nomination by the Board, including those recommended by shareholders. The Bylaws permit persons to be nominated as directors directly by shareholders under certain conditions. To do so, shareholders must comply with the advance notice requirements under the Bylaws as outlined in the “Shareholder Proposals and Nominations” section of this proxy statement. The Company did not receive notice from any shareholder prior to the deadline for submitting notice of an intention to nominate any additional persons for election as directors at the Annual Meeting.

The Governance and Nominating Committee engaged a third-party search firm to conduct a comprehensive search for director candidates that would match the characteristics described in this proxy statement as being desirable for members

of our Board. The Governance and Nominating Committee considered several candidates and recommended that the Board elect Ms. Mends and Mr. Cohan to the Board. The Board believes that Ms. Mends and Mr. Cohan meet the criteria described in this proxy statement and are highly qualified candidates. Ms. Mends brings to the Board expertise in business transformation, strategy, and corporate social responsibility, as well as operational experience in the financial services space. Mr. Cohan brings extensive strategic, financial, operational, and growth experience to the Board, along with a track record of successfully transforming businesses, brands, teams, relationships, and culture. The Board elected Ms. Mends and Mr. Cohan to the Board effective April 1, 2021.

Both the Board and the Governance and Nominating Committee believe that diversity of skills, perspectives, backgrounds, and experiences among Board members improves the Board’s oversight and evaluation of management on behalf of the shareholders and produces more creative thinking and better strategic decision-making by the Board. Although we do not have a formal policy concerning diversity of director nominees, the Governance and Nominating Committee considers, though not exclusively, the distinctive skills, perspectives, backgrounds, and experiences that candidates who are diverse in gender, ethnic background, geographic origin, and professional experience have to offer.

When evaluating potential director nominees, the Governance and Nominating Committee considers each individual’s professional experience, areas of expertise, and educational and personal backgrounds. The Board determines the appropriate mix of experiences, areas of expertise, and educational backgrounds in order to maintain a Board that is strong in its collective knowledge and that has the skillsets necessary to fulfill its responsibilities, meet the future needs of the Company, and represent the interests of our shareholders.

Among the most important specific skills, knowledge, and experience that the Governance and Nominating Committee and Board rely upon when determining whether to nominate an individual for election are the following:

The Board believes that all the director nominees are highly qualified and have significant leadership experience, knowledge, and skills that qualify them for service on our Board, and, as a group, represent diverse views, experiences, and backgrounds. All director nominees satisfy the criteria set forth in our Corporate Governance Guidelines and possess the personal characteristics that are essential for the proper and effective functioning of the Board. Each nominee’s biography below contains additional information regarding the nominee’s experiences, qualifications, and skills.

The number of shares of common stock, share units, and share equivalents beneficially owned by each nominee for director is listed under the heading “Security Ownership of Directors and Management” on page 59.

The Board of Directors is responsible for overseeing and providing policy guidance on the Company’s business and affairs. During the 2021 fiscal year, the Board of Directors held six meetings. During the 2021 fiscal year, each incumbent director attended at least 75% of the aggregate total number of meetings of the Board of Directors and Board committees of which the director was a member. Our incumbent directors attended over 99% of the Board of Directors meetings and applicable Board committee meetings held during the 2021 fiscal year.

The standing committees of the Board are the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, and the Finance Committee. The Company’s Corporate Governance Guidelines, Code of Business Ethics and Conduct, the Board of Directors Independence Standards (the “Independence Standards”), and charters for each of the standing committees may be accessed on the Company’s Investor Relations website at https://investors.hrblock.com/corporate-governance. These documents are also available in print to shareholders upon written request to the Corporate Secretary, H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105.

Set forth below is a description of the primary duties of each of the standing committees of the Board and its members as of the date of this proxy statement.

The Board considers and determines non-employee director compensation each year, taking into account recommendations from the Governance and Nominating Committee. The Governance and Nominating Committee forms its recommendation based on its review of director compensation practices at a specific group of peer companies, based on publicly disclosed information (more discussion of the process for determining our peer group of companies can be found on page 39). Management, in consultation with the Compensation Committee’s independent compensation consultant, assists the Governance and Nominating Committee in its review by accumulating and summarizing market data on director compensation levels and practices at our peer group of companies and reviewing external survey sources.

Compensation elements for our non-employee directors for fiscal year 2021 are as follows:

In addition, the H&R Block, Inc. 2018 Long Term Incentive Plan (the “2018 Plan”), which was approved by our shareholders, limits the aggregate equity and cash compensation to $750,000 that can be paid to a non-employee director of the Company in a calendar year. The limit does not apply to incremental compensation paid to a director solely as non-executive Chairman of the Board, provided that such director does not participate in the decision to award that additional compensation. In setting the non-employee director compensation limit, the Governance and Nominating Committee and the Board reviewed survey data provided by the Compensation Committee’s independent compensation consultant.

In fiscal year 2021, DSUs were granted to non-employee directors under the 2018 Plan. The number of DSUs awarded is determined by dividing the dollar amount of the award by the average closing price of the Company’s common stock for the ten consecutive trading days ending on the date the DSUs are granted.

DSU awards are fully vested on the grant date. Vested DSUs are held in a deferred compensation account and become payable, in shares of common stock, on the six-month anniversary of termination of service as a director. However, if a non-employee director dies prior to the payment, the balance of the non-employee director’s DSU account becomes payable to the non-employee director’s beneficiary, in shares of common stock, within ninety days following the non-employee director’s death. There are no dividends paid on outstanding DSUs prior to the DSUs becoming payable, but dividend equivalents accumulate and are paid when the DSUs otherwise become payable.

On September 10, 2020, DSUs approximately equal in value to $150,000 were granted to each of the Company’s incumbent non-employee directors for the one-year period of service on the Board beginning September 10, 2020. In addition, DSUs approximately equal in value to $200,000 were granted to Mr. Gerard for serving as the non-executive Chairman of the Board for the one-year period beginning September 10, 2020.

The Company provides to its non-employee directors free business travel insurance in connection with Company-related travel and, consistent with the benefit provided to our full-time employees, the opportunity to use our tax preparation services for no charge. In addition, the H&R Block Foundation will match gifts by our directors to any qualified not-for-profit organization on a dollar-for-dollar basis up to an annual aggregate limit of $5,000 per director per calendar year.

The Board has adopted stock ownership guidelines applicable to non-employee directors. The non-employee director ownership guidelines require ownership of a level of qualifying equity securities with an aggregate value of at least five times the annual cash retainer paid to them. Until a non-employee director satisfies the applicable holding requirement, the director is required to retain any covered shares (which include shares owned directly or indirectly by such non-employee director, the after-tax value of vested stock option awards, if any, and share equivalents the non-employee director holds in the Company’s benefit plans). In addition, Board members are subject to our Insider Trading Policy which, among other things, prohibits hedging and pledging transactions related to Company securities.

The following table sets forth total director compensation for non-employee directors for fiscal year 2021.

Our Board of Directors operates under Corporate Governance Guidelines (the “Governance Guidelines”) to assist the Board in exercising its responsibilities. The Governance Guidelines reflect the Board’s commitment to monitoring the effectiveness of policy and decision-making both at the Board level and the management level, with a view to enhancing shareholder value over the long term. The Governance Guidelines also ensure that the Board will have the necessary authority and practices in place to review and evaluate the Company’s business operations as needed and to make decisions that are independent of the Company’s management. The Governance Guidelines are not intended to be a static statement of the Company’s policies, principles, and guidelines, and are subject to regular assessment and refinement by the Board.

Pursuant to the Governance Guidelines, the Board evaluates its performance on an annual basis through an evaluation process administered by the Governance and Nominating Committee. To protect the directors’ anonymity and the integrity of the process, the evaluations are conducted in separate interviews by an independent third party who compiles the responses into a report for the Governance and Nominating Committee. In addition to Board performance, the annual interview includes questions regarding the performance of the individual Board members and the committees of the Board. Results of all evaluations are discussed at appropriate Committee meetings and with the full Board.

The Governance Guidelines provide that directors should not serve on more than three other boards of public companies in addition to the Company’s Board. Before serving on the board of another public company, directors are required to give prior notice to the Board. The CEO of the Company is not permitted to serve on more than one other board of a public company in addition to the Company’s Board and must obtain Board approval prior to serving on the board of any public company. Currently, all director nominees are in compliance with these guidelines.

The Company’s Bylaws provide that any incumbent director who is not elected by a majority of shares entitled to vote on the election and represented in person or by proxy must promptly tender an irrevocable resignation from the Board, subject only to the condition that it is accepted by the Board. The Governance and Nominating Committee will make a recommendation, and the Board will then act on the tendered resignation, taking into account that recommendation, and publicly disclose its decision and the rationale within ninety days from the date of the certification of the election results. The Governance and Nominating Committee and the Board may consider any factors or other information considered appropriate and relevant in making their respective decisions. The director who tenders the resignation is not permitted to participate in the proceedings with respect to such resignation. If the Board accepts a director’s resignation, or if a non-incumbent nominee for director is not elected, then the Board may fill the vacant position or decrease the size of the Board in accordance with the Bylaws.

In addition, the Governance Guidelines provide that any director whose principal employment or major responsibilities materially change must tender a resignation from the Board for consideration by the Governance and Nominating Committee. The Governance and Nominating Committee will make a recommendation regarding, and the Board will then act on, the tendered resignation.

To be eligible to be a nominee for election as a director, a person must deliver to the Company a written agreement that such person will abide by these director resignation requirements.

The Company’s Articles, Bylaws, and the Governance Guidelines require that the Chairman of the Board be an independent director, not simultaneously serving as CEO or President of the Company, who has not previously served as an executive officer of the Company. As Chairman, Mr. Gerard leads all meetings of the Board, including executive sessions of the non-employee directors held at each regular meeting of the Board.

We believe that our current Board structure creates a positive balance in leadership and accountability, as the functions of CEO and Chairman are significantly different. In addition to balancing responsibilities, we believe that this structure enhances the accountability of the CEO to the Board and strengthens the Board’s independence from management. Separating the roles of Chairman and CEO also allows the CEO to focus on running our business and managing the Company in the best interests of our shareholders. At the same time, our non-executive Chairman handles the separate responsibilities of Board and committee scheduling, Board agendas, and other Board organizational tasks, as well as leading the Board in discussions concerning CEO employment and performance evaluation and speaking on behalf of the Board and the Company regarding corporate governance- and investor relations-related issues.

As further described in the Governance Guidelines, the Board believes that a substantial majority of the Board should consist of directors who are independent under NYSE listing standards. As described below, 11 of the Board’s current 12 directors are independent directors within the meaning of the NYSE listing standards and Independence Standards.

Mr. Jones is not an independent director under the NYSE listing standards or Independence Standards due to his position as our President and CEO. Assuming all ten director nominees are elected at the Annual Meeting, all of the directors, other than Mr. Jones, will be independent directors within the meaning of the NYSE listing standards and Independence Standards.

NYSE listing standards provide that a director does not qualify as independent unless the Board affirmatively determines that the director has no material relationship with the Company. The listing standards permit the Board to adopt and disclose standards to assist the Board in making determinations of independence. Accordingly, the Board has adopted the Independence Standards to assist the Board in determining whether a director has a material relationship with the Company.

In June 2021, the Board conducted an evaluation of director independence regarding the current directors and nominees for director based on the NYSE listing standards and Independence Standards. In addition, the Board also conducted an evaluation of the independence of each of the members of the Audit, Compensation, and Governance and Nominating Committees in accordance with the requirements of the NYSE listing standards. In connection with this evaluation, the Board considered the responses provided by the directors in their annual director questionnaires and reviewed any relationships between each director or immediate family member and the Company, its subsidiaries, and their employees. As a result of its evaluation, the Board affirmatively determined that Messrs. Brown, Cohan, Gerard, Johnson, Rohde, and Winter and Mses. Gupta, Mends, Piazza, Reich, and Wood are independent. In addition, the Board affirmatively determined that each member of the Audit, Compensation, and Governance and Nominating Committees is independent under all applicable standards.

All directors, officers, and employees of the Company must act ethically and in accordance with the policies set forth in the H&R Block Code of Business Ethics and Conduct (the “Code”). The Code includes guidelines relating to the ethical handling of actual or potential conflicts of interest, compliance with domestic and foreign laws, accurate financial reporting, and procedures for promoting compliance with, and reporting violations of, the Code. In support of the Code, we have established a number of channels for reporting potential ethics violations or similar concerns or for guidance on ethics matters, such as via email, telephone, or in-person communications. All individuals have the ability to report concerns or discuss ethics-related matters anonymously.

The Audit Committee has also established procedures for the receipt, retention, and treatment of reports regarding accounting, internal accounting controls, or audit matters, including reports made to the Corporate Secretary by phone at (816) 854-4288 or by email to [email protected]. The Code is overseen by the Company’s Chief Ethics Officer, who is appointed by the Audit Committee. To help ensure the Audit Committee’s effective oversight of our ethics and compliance program, the Audit Committee regularly receives reports from the Chief Ethics Officer and reviews matters related to the Company’s ethics and compliance program. The Company will post any amendments to or waivers of the Code, to the extent applicable to any of the Company’s executive officers or directors as required under applicable rules, on our website.

The Code can be accessed on the Company’s website at https://investors.hrblock.com/corporate-governance. The Code is also available in print to shareholders upon written request to the Corporate Secretary, H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105.

The Board recognizes the importance of effective executive leadership to the Company’s success. The Company’s Board is actively engaged and involved in succession planning. The Board discusses the talent pipeline for specific critical roles, and high-potential leaders are given exposure and visibility to Board members through formal presentations and informal events. More broadly, the Board is regularly updated on key talent indicators for the overall workforce, including economic environment, diversity, recruiting, and development programs.

Shareholders and other interested parties wishing to communicate with the Board, the non-employee directors, or an individual Board member concerning the Company may do so by writing to the Board, to the non-employee directors, or to the particular Board member, and mailing the correspondence to the Corporate Secretary, H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105 or by emailing the correspondence to [email protected]. In addition, our non-executive Chairman and other Board members have made and may in the future make themselves available for consultation and direct communication with significant shareholders.

Please indicate on any written correspondence whether the communication is from a shareholder or other interested party. The Board has instructed the Corporate Secretary and other relevant members of management to examine incoming communications and forward to the Board or individual directors as appropriate, any communication the Corporate Secretary deems relevant to the Board’s roles and responsibilities. The Board has requested that certain types of communications not be forwarded, and redirected if appropriate, such as: spam, business solicitations or advertisements, resumes or employment inquiries, service complaints or inquiries, surveys, or any threatening or hostile materials.

Although the Company has no specific policy regarding director attendance at the Company’s annual meeting of shareholders, all directors are encouraged to attend. All of the Company’s then current directors virtually attended last year’s annual meeting.

Our Board has oversight responsibility for managing risk, directly and through its various Committees, and management is responsible for the Company’s day-to-day enterprise risk management activities. The Company has an enterprise risk management team and a management Enterprise Risk Committee to support senior management in fulfilling its day-to-day enterprise risk management responsibilities and to support the Board in fulfilling its oversight responsibility for risk management. The Company’s Treasurer oversees the activities of the Enterprise Risk Committee, which is made up of Vice Presidents of major business and control functions and members of the enterprise risk management team. The Company’s enterprise risk management team, working in coordination with the Enterprise Risk Committee assists the Board in its oversight of enterprise risk management by creating and facilitating a process to identify, prioritize, monitor, and report on risks and mitigation strategies, overseeing regular reporting of risks to the Board and its committees, identifying additional risk mitigation strategies as appropriate, and monitoring emerging risks. The Board is responsible for oversight of risks related to ESG matters and receives regular reports from the Company’s Chief People Officer, including regarding people development, associate engagement, workforce diversity, and pay equity, to enable it to assess and manage risk related to the Company’s workforce.

In fulfilling its oversight role, the Board generally focuses on the adequacy of the Company’s risk management and mitigation processes. The Board works with the Company’s CEO, Chief Financial Officer, General Counsel, and Treasurer to determine the Company’s risk tolerance, and works to ensure that management identifies, evaluates, and properly manages the overall risk profile of the Company.

In addition to the discussion of risk at the Board of Directors level, the Board’s standing committees also focus on risk exposure as part of their ongoing responsibilities:

Each of the committee chairs regularly reports to the full Board concerning the activities of the applicable committee, the significant issues it has discussed, and the actions taken by that committee.

As discussed above in the Proxy Statement Introduction, the impacts of the COVID-19 pandemic were felt throughout fiscal year 2021. Tax season 2021 was unlike any experienced previously, given the many impacts of the COVID-19 pandemic:

In addition, the filing deadline for tax season 2020 was extended beyond our fiscal year 2020. The tax season deadline extension for tax seasons 2020 and 2021 impacted the typical seasonality of our business and the comparability of our financial results. However, even with the unique and fluid dynamics of the tax season, the Company achieved strong volume results. When comparing full tax season 2021 results (January 1, 2021 through May 18, 2021) to full tax season 2020 (January 1, 2020 through July 15, 2020, normalized to exclude typical mid-May through mid-July volumes), the number of U.S. Assisted returns e-filed by H&R Block increased approximately 7.3% and total U.S. e-filed returns increased approximately 3.8%. We estimate we gained approximately 0.3% of total market share when compared to last year’s completed tax season. In the Assisted category, we estimate we gained approximately 0.7% share. Key reported financial results were as follows:

Had we been able to include the full 2021 tax season performance in our reported fiscal year 2021 financial results, we would have significantly surpassed the high end of our previous outlook for both revenue and earnings.

As a part of expense management initiatives implemented as a result of the COVID-19 pandemic and the extended 2020 tax season, in June 2020 the Company determined there would be no merit increases for associates companywide for fiscal year 2021. Therefore all NEO base salaries and target payout opportunities under the fiscal year 2021 short-term incentive (“STI”) and long-term incentive (“LTI”) plans remained unchanged from fiscal year 2020. The Compensation Committee also decided to retain the key design components of our STI and LTI compensation program in fiscal year 2021.

As described above, the COVID-19 pandemic and related tax deadline extensions extended the 2021 tax season, shifting some of our revenue and tax returns that would normally have been received in fiscal year 2021 into the first few weeks of May. The extended deadline created challenges to the Company's historical approach to performance-based compensation, which is intended to cover a full tax season and assumes a full, completed tax season included within one fiscal year.

To address this challenge and better align pay with performance, the Compensation Committee included the results from tax season 2021 attributable to the extended tax season (but earned in May 2021) in the calculation of the Company’s performance, pursuant to the terms of the H&R Block Executive Performance Plan (“Executive Performance Plan”) and the fiscal year 2021 STI plan (“2021 STI Plan”). This approach was generally consistent with the Compensation Committee's approach for fiscal year 2020, in which the Company included results from tax season 2020 attributable to the extended tax season (but earned in the first quarter of our 2021 fiscal year) in the calculation of certain metrics under the fiscal year 2020

STI plan (“2020 STI Plan”). The metrics established for the 2021 STI Plan were set at a level that accounted for this prior year adjustment to ensure that payouts to NEOs would not benefit from the inclusion of results from tax season 2020 in two fiscal years, and were set under the assumption that the 2021 tax season would be completed during our 2021 fiscal year. The Compensation Committee believes that the approach discussed above was the best alternative in addressing these challenges, as it better aligned pay-for-performance with respect to the business conducted for each individual tax season, consistent with the Company's historical approach and the original intent of the 2021 STI Plan.

Given the strong results described above, this resulted in a total payout of 185.3% of the NEO’s respective target opportunity, reflective of the Company’s strong performance for tax season 2021.

The COVID-19 pandemic also impacted the fiscal year 2019 performance-based LTI awards vesting in 2021. However, no adjustments were made to the NEOs’ outstanding LTI awards to account for the impacts of the COVID-19 pandemic and extended tax filing deadlines. The Compensation Committee chose not to modify these awards as they are intended to reward performance over a multi-year period. Based on Company performance as compared to the pre-set EBITDA growth target and the TSR modifier, our NEOs received 86.1% of the fiscal year 2019 performance share units (“PSUs”) they were initially granted, and 105.3% of the fiscal year 2019 market stock units (“MSUs”) they were initially granted.

During fiscal year 2021, we introduced our Block Horizons 2025 strategy, the next phase of our strategic transformation, which builds on previous work to strengthen our foundation and position us for long-term, sustainable growth.

On June 9, 2021, our Board of Directors approved a change of our fiscal year end from April 30 to June 30, effective immediately. The Company's 2022 fiscal year began on July 1, 2021 and will end on June 30, 2022 (“fiscal year 2022”). This fiscal year end change allows for better alignment of completed tax seasons in comparable fiscal periods to help mitigate challenges relating to extended tax filing deadlines, such as those that occurred in fiscal years 2020 and 2021, as well as better alignment with our corporate tax quarters. To account for the fiscal year end change and to compensate our NEOs for the two-month transition period, the Compensation Committee applied a 14/12 proration to the executives’ individual fiscal year 2022 STI and LTI target award opportunities. This proration will be applied for fiscal year 2022 only, with target amounts reverting to the standard values in fiscal year 2023. Due to the fiscal year end change, annual fiscal year 2022 LTI awards will be granted on August 31, 2021.

During fiscal year 2021, the Compensation Committee, with the assistance of Compensation Advisory Partners LLC (“CAP”), its new independent compensation consultant, undertook a comprehensive redesign of our executive compensation program, in order to better align our compensation practices with our new Block Horizons 2025 strategy. As a result of that review, which included CAP conducting interviews of Compensation Committee members and members of management and considering market analyses, the Compensation Committee approved the following key changes to our fiscal year 2022 executive compensation program:

The Compensation Committee and Board believe these changes will better align pay with key indicators of performance over both the short- and long-term.

Our executive compensation decisions are influenced by a variety of factors, with the Compensation Committee following the below principles for our executive compensation program:

We believe our executive compensation program is reasonable, competitive, and appropriately balances the objectives of recruiting, retaining, and motivating our executives.

The performance-based nature of our executives’ target total direct compensation (generally, the total compensation package excluding benefits) is illustrated below:

During fiscal year 2021, our Chairman of the Board and Investor Relations team reached out to our top 25 shareholders that collectively owned about 65.9% of our shares outstanding and met with shareholders that collectively owned about 16.6% of our shares outstanding. This effort supplemented the ongoing communications between our management and shareholders through various engagement channels including direct meetings, analyst conferences and road shows. These meetings have provided the Board with valuable insights into our shareholders’ perspectives on various matters.

As is our custom, we provided an open forum to each shareholder to discuss and comment on any aspects of our corporate governance structure and executive compensation program. In these meetings, we discussed our response to the COVID-19 pandemic and provided an update to our strategy. We also discussed the history of our corporate governance and how our Board searches for diverse candidates. These shareholders did not express any concerns with our executive compensation program. After this engagement with shareholders, we agreed to keep in contact with them, as well as the other shareholders who chose not to engage with us, in order to continue to receive general feedback regarding our Company. At our 2020 annual meeting, shareholders approved our executive compensation program on an advisory basis with approximately 92% of votes cast in favor of the proposal, which we believe demonstrates strong shareholder support of our compensation program and practices.

The Board is committed to continuing its long-standing practice of soliciting feedback to incorporate shareholder perspectives into our pay program. Our proactive engagement has informed other changes to our compensation program in recent years, including the following:

In fiscal year 2020, the Compensation Committee:

In fiscal year 2019, the Compensation Committee:

Our engagement program has provided the Board with valuable insights into our shareholders’ perspectives on our executive compensation program and other matters of importance to them. We intend to continue engaging with our shareholders and reviewing our compensation and governance practices in the future.

The Compensation Committee regularly reviews best practices in executive compensation and governance and revises our policies and practices when appropriate. The table below highlights our current compensation practices, that we believe demonstrate alignment with our shareholders’ long-term interests as well as legal and regulatory developments and corporate governance trends.

The Compensation Committee holistically considers a variety of factors when making decisions regarding the recruitment, retention and motivation of our executives. These factors, as they relate to setting target executive compensation opportunities, include:

The Compensation Committee annually reviews tally sheets of all components of our compensation program for each of our NEOs. As a part of this process, the Compensation Committee also reviews the total value of each executive’s stock-denominated compensation and the potential termination costs for each of our NEOs.

Based on this information and with the input of the Committee’s independent compensation consultant, the Compensation Committee members analyze each NEO’s target total direct compensation, and set it at a level that is reasonable and competitive, and that appropriately balances the objectives of our compensation program.

Key elements of our fiscal year 2021 NEO compensation program are summarized below. Pay is based on the Company’s performance against specific pre-established annual and multi-year financial, operational, and strategic performance goals, and the Company’s total return to shareholders over time.

The Compensation Committee establishes base salaries based on the factors described above under “Executive Compensation Determination Process” and below under “Compensation Benchmarking”. Annual merit increases for our NEOs, other than the CEO, are based on evaluation of performance by the CEO and the Compensation Committee, the Company’s performance and outlook for the upcoming fiscal year, and NEO compensation data from our Peer Group companies.

For fiscal year 2021, base salaries for our NEOs were as follows:

As described above, as a part of expense management initiatives in response to the COVID-19 pandemic and the extended tax season, all NEO annual base salaries remained unchanged from fiscal year 2020.

Our executive STI compensation is designed to compensate executives primarily for achieving pre-established performance objectives that relate to our fiscal year business plan, which typically includes a completed tax season. STI compensation is provided under our shareholder-approved Executive Performance Plan. Under the Executive Performance Plan, the Compensation Committee may exercise discretion to modify the actual amounts to be paid to each executive, if any, based on subjective determinations or performance against additional objective performance metrics. Performance criteria and objectives may be adjusted, as necessary, to prevent reduction or enlargement of an award as a result of extraordinary events generally outside the executives’ control.

STI target opportunities for our NEOs are intended to place a significant portion of our NEOs’ annual cash compensation at risk and to provide competitive total cash compensation opportunities. STI payouts can range from 0% to 200% of each NEO’s target STI opportunity, based on performance against pre-established metrics and payout curves.

Each year, the Compensation Committee approves a target opportunity for STI compensation for each NEO that is a percentage of base salary. The target opportunities applicable to our NEOs for fiscal year 2021 are shown in the table below. All NEO STI target opportunities were unchanged from fiscal year 2020.

Due to the extension of the 2020 tax season until July 15, 2020, the Board delayed approval of the Company’s 2021 annual operating plan from early June 2020 until final results from the extended tax season and the first quarter of fiscal year 2021 were known. The Compensation Committee examined the threshold, target, and maximum levels for each performance metric, with the goal of establishing target levels with an appropriate level of difficulty considering the industry and competitive environment and the Company’s strategic priorities and operating plan for the fiscal year. In addition, in setting the levels for each performance metric, the Compensation Committee considered the Board’s review and approval of our fiscal year 2021 operating plan, the Company’s 2021 financial outlook, and our enterprise strategy, and assumed the completion of a full tax season within the fiscal year. The target goals for fiscal year 2021 for Revenue and Pre-Tax Earnings were set at levels that exceeded fiscal year 2020 actual performance in order to motivate strong management performance. Target goals also accounted for the prior year adjustment under the 2020 STI Plan, in which results from tax season 2020 attributable to the extended tax season (but earned in the first quarter of our 2021 fiscal year) were included in the calculation of certain metrics under the 2020 STI Plan. This was done to ensure executives were not rewarded for the same performance twice.

The Compensation Committee set the threshold amount each executive could earn on each metric at 50% of target, an increase from the 25% of target used in prior fiscal years. The Compensation Committee selected 50% as threshold because it is more consistent with standard market practice and to create better alignment in performance and payout based on the narrow performance range between threshold and target. Failure to achieve the threshold funding performance target would result in no payout with respect to the applicable metric.

In November 2020, the Compensation Committee approved the fiscal year 2021 STI performance objectives applicable to our executives (the same metrics as were employed in fiscal year 2020) that are summarized in the graphic below. The

Compensation Committee believed that the levels set for the performance metrics, at the time when they were set, appropriately incentivized our executives to meet the Company’s Board-approved fiscal year 2021 operating plan and execute on our enterprise strategy by providing realistically achievable metrics, while ensuring that such metrics were sufficiently challenging.

The following formula is used to calculate the payout awarded for fiscal year 2021 STI compensation:

As described above, as a result of the continuing impacts of the COVID-19 pandemic, the U.S. Department of the Treasury and the IRS extended the federal tax filing deadline for individual 2020 tax returns from April 15, 2021 to May 17, 2021, and substantially all U.S. states with an April 15 individual state income tax filing requirement extended their respective deadlines. This extended the 2021 tax season, shifting some of our revenue and tax returns which would normally have been received in fiscal year 2021, into May 2021. As a result, the extended deadline created challenges to the Company's historical approach to performance-based compensation, which assumed a full tax season in each fiscal year for goal setting purposes and for evaluation of the Company’s performance against those goals.

As described above, pursuant to the Executive Performance Plan and the pre-established 2021 STI Plan, performance criteria and objectives in the 2021 STI Plan are subject to adjustment due to certain extraordinary events outside of the executives’ control. Such events include, among other things, changes in applicable tax laws, and unusual, extraordinary or nonrecurring events. In addition, the Compensation Committee specifically retained authority to make adjustments due to certain specified items, including a continuance or resurgence of COVID-19 and/or extensions of tax payment or filing deadlines.

As such, consistent with the original intent of the program, the Compensation Committee calculated the Company’s fiscal year 2021 performance results by including the results from tax season 2021 attributable to the extended tax season (but earned in May 2021) in the calculation of the Company’s performance for purposes of the performance metrics under the 2021 STI Plan. May results were normalized, in order to consider the impacts of the extended tax season, but without including May results not related to the extension. However, no other adjustments were made to account for the impacts of the COVID-19 pandemic. This approach was generally consistent with the Compensation Committee's approach for fiscal year 2020, in which the Company included results from tax season 2020 attributable to the extended tax season (but earned in the first quarter of our 2021 fiscal year) in the calculation of certain metrics under the 2020 STI Plan. The Compensation Committee believed that this was the best approach in addressing the challenges associated with the extended tax season, as it better aligned pay-for-performance with respect to each individual tax season, consistent with the Company's historical approach and the original intent of the 2021 STI Plan.

As a result, each of our NEOs received fiscal year 2021 STI compensation of 185.3% of the NEO’s respective target opportunity. The Company’s results for each performance metric were as follows:

The table below shows each NEO’s target opportunity and actual amount earned under our fiscal year 2021 STI program:

We believe that a significant portion of each NEO’s compensation should depend on the amount of long-term value we create for our shareholders. Our LTI compensation is equity-based and is designed to support multiple objectives, including:

Generally, the Company awards equity-based compensation on an annual basis within ninety days of the beginning of each fiscal year. From time to time, the Company also awards equity-based compensation as part of an employment offer or promotion or, in certain limited instances, as a special award.

For PSUs granted in fiscal year 2021:

The specific performance goals for PSUs are not disclosed at this time given their competitive sensitivity, but will be disclosed upon completion of the performance period in future proxy statements.

The following formula is used to calculate the final number of earned PSUs, subject to the overall 200% cap:

Executives are required to hold at least 50% of the gross shares earned upon vesting of the PSUs for a period of one year after the vesting date. In addition, vested equity is subject to stock ownership guidelines that may extend the one-year period if the guidelines have not yet been met.

For MSUs granted in fiscal year 2021:

The following formula is used to calculate the final number of earned MSUs, assuming the initial thresholds are met:

PSUs and MSUs generally vest on the third anniversary of the grant date. RSUs generally vest in one-third annual increments beginning on the first anniversary of the grant date. However, certain special grants may have a different vesting schedule. Awards may vest upon termination of employment prior to the vesting date under certain circumstances, as described below under “Termination of Employment, Severance, and Transition Arrangements.”

For fiscal year 2021, the Company awarded our NEOs PSUs, MSUs, and RSUs in the amounts shown below. The fiscal year 2021 PSUs and MSUs are performance-based and will vest on June 30, 2023 and the fiscal year 2021 RSUs vest in one-third annual increments beginning on June 30, 2021. All NEO LTI target opportunities remained unchanged from fiscal year 2020.

Our executives, including our NEOs, received PSUs and MSUs in fiscal year 2019. Performance for these PSUs and MSUs was based on a three-year period beginning on May 1, 2018 and ending on April 30, 2021. Performance was certified, and the overall payout was approved, by the Compensation Committee in July 2021.

Under the terms of the award agreements for fiscal year 2019 PSUs, a participating executive had the opportunity to earn an initial payout based upon the Company’s performance against pre-established EBITDA performance. The Committee selected a set level of EBITDA from continuing operations for fiscal year 2019, with the target set at the level provided in the fiscal year 2019 operational plan approved by the Board, followed by two years of EBITDA growth. A 150% cap was placed on fiscal year 2019 performance, with a 200% cap for performance in fiscal years 2020 and 2021.

The result for each year was averaged over the three-year period to determine the initial payout (the “EBITDA Percentage”). This initial payout was then modified based on the Company’s TSR relative to the S&P 500 index over the performance period. The TSR modifier could increase or decrease the payout by up to 25% of the initial payout amount. However, notwithstanding the result of that calculation, the maximum earned amount was capped at 200%.

Based on the Company’s results relative to the preset thresholds, targets, and maximums, the Compensation Committee approved the following results and applicable EBITDA performance:

The Compensation Committee then applied a TSR modifier of 84.9% based on the Company’s TSR over the performance period. Based on the performance percentage and the TSR modifier, our NEOs received 86.1% of the PSUs they were initially granted, as well as additional shares of common stock representing dividend equivalents accrued on the number of shares that ultimately vested. The table below shows the target-level opportunity and actual award with respect to the PSUs granted to each of our NEOs in fiscal year 2019:

As described above, the mandatory post-vesting holding requirement requires that the executive hold at least 50% of the gross shares earned upon vesting of the PSUs for a period of one year after the vesting date.

Under the terms of the award agreements for MSUs granted in fiscal year 2019, if certain performance thresholds described below were met, a participating executive had the opportunity to earn a payout between 50% and 200% of the executive’s target number of MSUs based on the difference between the Grant Date Price and the Ending Date Price. The grant date for the fiscal year 2019 MSUs was June 30, 2018.

The vesting of MSUs was subject to two thresholds, both of which must have been satisfied for any payout to occur.

Based on the Company’s results, the Compensation Committee certified that both thresholds were achieved and approved a performance percentage of 105.3%, representing an MSU Ending Date Price of $23.97 divided by the MSU Grant Date Price of $22.77. As a result, our NEOs received 105.3% of the MSUs they were initially granted, plus dividend equivalents accrued on the number of shares that ultimately vested.

The table below shows the target-level opportunities and actual awards under our fiscal year 2019 MSU program for our NEOs:

During fiscal year 2021, the Compensation Committee, with the assistance of CAP, its new independent compensation consultant, undertook a comprehensive redesign of our executive compensation program, in order to better align our compensation practices with our new Block Horizons 2025 strategy. As a result of that review, which included CAP conducting interviews of Compensation Committee members and members of management and considering market analyses, the Compensation Committee approved the fiscal year 2022 executive compensation program described below.

In June 2021, the Compensation Committee approved the total target direct compensation (“TTDC”) for fiscal year 2022 shown in the table below.

The TTDC increase for Mr. Bowen is intended to recognize his contributions to the Company’s performance in fiscal year 2021 and the critical role he plays in the Company’s Block Horizons 2025 strategy. The TTDC increase for Ms. Orosco is intended to recognize her promotion in June 2021 to President, Global Consumer Tax and Service Delivery, which resulted in a substantial increase in scope and responsibility, as well as her leadership through two challenging tax seasons, contributing to the Company’s fiscal year 2021 performance. The increases for Mr. Bowen and Ms. Orosco also take into account market data for comparable positions within our Peer Group. The TTDC increase for Ms. Logerwell is intended to recognize her performance during fiscal year 2021, including her leadership in implementing the Company’s fiscal year end change.

To account for the fiscal year end change and to compensate our NEOs for the two-month transition period (May and June 2021), the Compensation Committee applied a 14/12 proration to the executives’ individual fiscal year 2022 STI and LTI target award opportunities. This proration will be applied for fiscal year 2022 only, with target amounts reverting to the standard values in fiscal year 2023. Therefore, final STI and LTI target amounts for our NEOs is as follows:

Performance for the fiscal year 2022 STI plan will be based on results for our new fiscal year, the period from July 1, 2021 to June 30, 2022, and the performance period for fiscal year 2022 PSUs will be based on the three-year period from July 1, 2021 to June 30, 2024. Measurement of performance for the outstanding PSUs and MSUs awarded in prior fiscal years will continue to be based on our prior fiscal year period (May 1 to April 30).

As a part of the compensation redesign discussed above, in June 2021 the Compensation Committee approved the following STI plan design for fiscal year 2022:

This approach maintains the balance between the top- and bottom-line metrics while also reinforcing an alignment with the Company’s new strategy and recognizing individual accomplishments that may also contribute to Block Horizons 2025 success. The specific goals for each metric are not disclosed at this time given their competitive sensitivity, but will be disclosed upon completion of the performance period in the Compensation Discussion and Analysis section of next year’s proxy statement.

As a part of the Compensation redesign, the Compensation Committee also approved the following key design elements for fiscal year 2022 awards:

The fiscal year 2022 award agreements are filed as exhibits to the Company’s Current Report on Form 8-K filed with the SEC on June 30, 2021. The grant date for these fiscal year 2022 awards, and annual LTI awards going forward, will be August 31, to align with the Company’s new fiscal year. The specific levels of EBITDA from Continuing Operations are not disclosed at this time given their competitive sensitivity, but will be disclosed upon completion of the performance period.

Mr. Gerke’s fiscal year 2022 equity-based compensation awards contain the same modified vesting provisions as his fiscal year 2021 equity-based awards, as described below under “Termination of Employment Provisions in LTI Award Agreements.”

The Company provides certain benefits to all full-time employees, including employer matching contributions to our qualified retirement plan, an employee stock purchase plan that permits purchases of our common stock at a discount, life insurance, health and welfare benefit programs, and the opportunity to use our tax preparation services for no charge. Benefits for executives generally are the same as benefits for all other full-time employees, except that NEOs and certain key employees may participate in our executive group life insurance program and our deferred compensation plan and are entitled to certain relocation benefits as described below. Mr. Jones is also permitted certain minimal personal use of the Company’s fractional share of a private aircraft as described below. We have structured our executive benefit program to be consistent with our philosophy of emphasizing performance-based elements in our executive compensation program. Perquisites represent an immaterial element of our ongoing executive compensation program.

The Company offers a group life insurance program to executives that provides death benefits up to three times the participating executive’s annual base salary. The death benefits are payable to beneficiaries designated by the participating executive.

Our deferred compensation plan is designed to assist our executives in building retirement savings by offering participants the opportunity to defer their receipt of base salary and STI compensation.

The Company also provides relocation benefits to eligible employees under our Executive Homeowner Relocation Policy. These relocation benefits generally cover certain common relocation expenses and are subject to a clawback requirement.

The Company leases a fractional share of a private aircraft to allow employees to safely and efficiently travel for business purposes given our large distributed retail footprint and franchise operations in many locations not accessible by commercial airlines. The corporate aircraft allows our executives to be far more productive than commercial flights given that the corporate aircraft provides a confidential, safe, and productive environment in which to conduct business. Beginning in fiscal year 2021, the Compensation Committee approved Mr. Jones’s usage of the private aircraft for personal travel up to a specified maximum per fiscal year. For fiscal year 2021, the Committee approved a maximum of 30 hours for personal travel. The Committee approved this usage taking into consideration health concerns due to the ongoing COVID-19 pandemic, concerns over Mr. Jones’s personal safety, and efficiency, and to increase Mr. Jones’s time available for business purposes. No tax gross-up is provided to Mr. Jones on this benefit.

We benchmark our executive compensation practices relative to publicly-disclosed information for a defined group of peer companies, which for fiscal year 2021 is set forth below (the “Peer Group”). We also review compensation data from multiple survey sources, reflective of general industry pay levels for companies of relevant size based on total revenue, as compared to each of the NEOs. For fiscal year 2021, these survey sources were the Aon Hewitt Total Compensation Measurement Executive Survey and the Willis Towers Watson CDB General Industry Executive Compensation Survey. The Compensation Committee reviews summary survey and Peer Group data to confirm that the market references we use are appropriate for our business and the industries in which we compete for executive talent.

With the input of its independent compensation consultant, the Compensation Committee reviews the Peer Group annually and revises it as circumstances warrant. We endeavor to identify companies that are comparable to or competitive with our core businesses, including tax and professional products and services, that have similar strategic plans or outlook, or that are comparable on a variety of relevant metrics. As a result of the Compensation Committee’s annual review in March of 2020, with input from its independent compensation consultant, the Compensation Committee made adjustments to the Peer Group companies used for benchmarking fiscal year 2021 pay determinations to better align from a size perspective and with the Company’s strategic goals of high growth and a technology focus. The following shows these changes, and the Peer Group considered by the Compensation Committee in benchmarking fiscal year 2021 compensation:

The Compensation Committee conducted its annual review of Peer Group companies to be referenced in setting fiscal year 2022 compensation in March of 2021. With input from its independent compensation consultant, the Committee determined that no changes were necessary for fiscal year 2022.

The Compensation Committee previously retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its external, independent compensation consultant for a portion of fiscal year 2021 and prior. In September 2020, the Compensation Committee retained CAP as its external, independent compensation consultant and CAP has served in that capacity since that time.

The Compensation Committee’s independent compensation consultant reports directly to the Committee and the Committee may replace the consultant or hire additional consultants at any time. The independent compensation consultant advises the Compensation Committee on issues pertaining to executive compensation, including the assessment of market-based compensation levels, the selection of our Peer Group, our pay positioning relative to the market, the mix of pay, incentive plan design, and other executive employment matters, and provides its advice based in part on prevailing and emerging market practices, as well as our specific business context. The Compensation Committee retains sole authority to hire its compensation consultants, approve fees, determine the nature and scope of services, evaluate performance, and terminate engagement. The Compensation Committee believes that external compensation consultants for the Compensation Committee should be independent and serve the Compensation Committee exclusively, and should not perform any other services for the Company at any time. Neither FW Cook nor CAP performs any other services for the Company.

In accordance with the requirements of applicable SEC rules and NYSE listing standards, the Compensation Committee reviewed the independence of both FW Cook and CAP and determined that each meets the independence criteria established under such rules and listing standards.

The Compensation Committee generally reviews our CEO’s performance each year against pre-established financial, operational, strategic, and individual objectives. Our CEO is responsible for sharing with the Compensation Committee his current year accomplishments in light of current year objectives, as well as proposed objectives for the following year. The Committee keeps the independent members of the Board apprised of its activities related to the review and approval of CEO performance and compensation matters and, from time to time, consults with such independent members on matters concerning CEO compensation. Based on its evaluation, the Compensation Committee determines the CEO’s compensation. Following such determination, the Chairman of the Board discusses the Compensation Committee’s evaluation and determinations with the CEO. Our CEO does not play a role in determining his own compensation, other than discussing his annual performance review with the Chairman of the Board and sharing his accomplishments and proposed objectives with the Compensation Committee.

The Compensation Committee consults with the CEO concerning the performance of other NEOs and approves the compensation of such officers, taking into account recommendations of the CEO and input from the Board. Our CEO and Chief People and Culture Officer assist the Compensation Committee in reaching compensation decisions regarding executives other than themselves. In addition, the CEO (with input from other senior executives) develops recommendations for the Committee’s approval regarding performance goals under our STI and LTI compensation programs. Executives do not play a role in determining their own compensation, other than discussing their annual performance reviews with their supervisors and, in the case of the CEO, making recommendations for the Committee’s approval regarding performance goals under our STI and LTI programs. The Committee reviews the recommendations and approves any changes as it determines in its sole discretion to be in the best interests of the Company and our shareholders.

Our Board has adopted a “clawback” policy set forth in our Governance Guidelines which provides that the Board has the authority to seek reimbursement of performance-based or incentive compensation paid, vested, or awarded to the extent that payout was greater than the amount that would have been paid if calculated based on restated financial results. Mr. Jones’s employment agreement with the Company dated August 21, 2017 (the “Jones Agreement”), the Executive Performance Plan, equity award agreements under the 2018 Plan, and the H&R Block Executive Severance Plan (“Executive Severance Plan”) each include a clawback provision consistent with the terms of the Board’s clawback policy. In addition,