spsc-20230330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☑

Filed by a party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☑ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material under §240.14a-12

SPS COMMERCE, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☑ No fee required

☐ Fee paid previously with preliminary materials

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

SPS COMMERCE, INC.

333 South Seventh Street, Suite 1000

Minneapolis, Minnesota 55402

(612) 435-9400

March 30, 2023


	Dear Stockholders:

	You are cordially invited to join us for our 2023 annual meeting of stockholders, which will be held virtually on Friday, May 12, 2023, at 8:00 a.m., Central Time. The virtual meeting can be accessed by visiting the following website and entering your control number: www.virtualshareholdermeeting.com/SPSC2023. Stockholders will have the same opportunities to participate in the meeting as you would at an in-person meeting, including having the opportunity to vote and to submit a question during the meeting using the directions on the meeting website. You will not be able to attend the annual meeting physically in person. The notice of annual meeting of stockholders and the Proxy Statement that follow describe the business to be conducted at the meeting. Whether or not you plan to attend the virtual meeting, your vote is important and we encourage you to submit your proxy to vote your shares promptly. You may vote your shares by proxy by using a toll-free telephone number, the internet, or mail, free of charge. Instructions regarding these three methods of voting are contained in the proxy materials. We are pleased to take advantage of SEC rules that allow companies to furnish their proxy materials over the internet. We are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of our proxy materials and our 2022 Annual Report on Form 10-K (the “Annual Report”). The Notice contains instructions on how to access those documents and to cast your vote via the internet. The Notice also contains instructions on how to request a paper copy of our proxy materials and our Annual Report. All stockholders who do not receive a Notice will receive a paper copy of the proxy materials and the Annual Report by mail. This process allows us to provide our stockholders with the information they need more promptly, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials. We look forward to having you attend the virtual annual meeting.

Archie Black Chief Executive Officer



		Sincerely,

		Archie Black
		Chief Executive Officer

SPS COMMERCE, INC.


			NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS

SPS Commerce, Inc.

333 South Seventh Street

Minneapolis, Minnesota 55402

Notice of 2023 Annual Meeting of Stockholders


Time and Date 8:00 a.m., Central Time Friday, May 12, 2023						Access The meeting is virtual only. Join us via: www.virtualshareholdermeeting.com/SPSC2023


Items of Business
1.			Election of the seven directors identified in the Proxy Statement, each for a one-year term.
2.			Ratification of the selection of KPMG LLP as independent auditor of SPS Commerce, Inc. for the fiscal year ending December 31, 2023.
3.			An advisory vote to approve the compensation of our named executive officers as disclosed in the attached Proxy Statement.
4.			Any other business that may properly be considered at the meeting or any adjournment or postponement of the meeting.

Record Date – You may vote at the meeting if you were a stockholder of record at the close of business on March 16, 2023.

Voting by Proxy – Whether or not you plan to attend the annual meeting virtually, please vote your shares by proxy to ensure they are represented at the meeting. To submit your proxy vote, you may follow the instructions for voting via the internet as described in the Notice of Internet Availability of Proxy Materials and the proxy card. If you received a paper copy of the proxy card by mail, you may sign, date, and mail the proxy card in the envelope provided, or you may vote via telephone as described in the proxy card. Our vote tabulator is Broadridge Financial Solutions, Inc., and no postage is required if the request for a paper copy of the proxy materials is mailed in the United States.

By Order of the Board of Directors,



Archie Black
Chief Executive Officer


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 12, 2023: The Notice of Annual Meeting, 2023 Proxy Statement, and 2022 Annual Report are available at www.proxyvote.com.

SPS COMMERCE, INC.


			NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS

How to Vote by Proxy

Whether or not you plan to attend the meeting virtually, please provide your proxy by either using the internet or telephone as further explained in this Proxy Statement or filling in, signing, dating, and promptly mailing a proxy card.

All references to the “Plan” are in reference to the SPS Commerce, Inc. 401(k) Retirement Savings Plan.


						BY TELEPHONE

•You will need to use a control number that was provided to you by our vote tabulator, Broadridge Financial Solutions.

•Call the toll-free number on your proxy card, 24 hours a day, seven days a week, through 11:59 p.m. Eastern Time (“ET”) on May 11, 2023 for shares held directly, and through 11:59 p.m. ET on May 9, 2023 for shares held in the Plan.

•Please have your proxy card available and follow the additional steps when prompted.


						BY INTERNET

•Go to the web site at www.proxyvote.com, 24 hours a day, seven days a week, through 11:59 p.m. ET on May 11, 2023 for shares held directly, and through 11:59 p.m. ET on May 9, 2023 for shares held in the Plan.

•Please have your Notice or proxy card available and follow the instructions provided to obtain your records and to create an electronic voting instruction form.


						BY MAIL

•If you received a Notice, first request a paper copy of the proxy materials as directed in the Notice on or before April 28, 2023 to facilitate timely delivery.

•Mark, sign, and date your proxy card.

•Return it in the postage-paid envelope provided.

If your shares are held in an account at a brokerage firm, bank, or similar organization, you will receive voting instructions from the organization holding your account and you must follow those instructions to vote your shares. You will receive a Notice Regarding the Availability of Proxy Materials that will tell you how to access our proxy materials on the internet and vote your shares over the internet. It will also tell you how to request a paper or e-mail copy of our proxy materials.

YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.

SPS COMMERCE, INC.


			NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS


References & Abbreviations

Unless the context otherwise requires, the words “we,” “us,” “our,” the “Company,” “SPS,” and “SPS Commerce” refer to SPS Commerce, Inc. Other abbreviations used in this Proxy Statement are as follows.

Abbreviation

Term

Abbreviation

Term

Board

Board of Directors

PSU

Performance Stock Unit

CEO

Chief Executive Officer

RSU

Restricted Stock Unit

PEO

Principal Executive Officer

DSU

Deferred Stock Unit

NEO

Named Executive Officer

TSR

Total Shareholder Return

Notice

Notice of Internet Availability of Proxy Materials

SEC

Securities and Exchange Commission


CEO Planned Retirement

In March 2023, we announced our CEO, Archie Black, will retire as our CEO, and transition to the newly created position of Executive Chair of the Board, effective upon his successor's appointment as CEO. The Board has approved the appointment of Philip Soran, the current Chair of the Board, to the position of lead independent director of the Board, effective as of the date Mr. Black assumes the role of Executive Chair. Our Board has commenced a search for a new CEO.

As is standard with any Director appointments between annual meetings, our Board may increase the size of the Board and fill that vacancy with a new Director, and that person will serve as a Director until the next annual meeting of stockholders where they, and all other Director nominees, will stand for election to serve for the next annual term. As such, when a new CEO is appointed, we expect the Board will appoint them as a Director, and thus our Board will increase from seven to eight members. Given the unknown timing of the appointment of Mr. Black's successor and Mr. Black's current standing as CEO, Director, and Director nominated for election for continued service, the remainder of this Proxy Statement will not refer to Mr. Black's planned retirement or other changes that may affect the Board or Company leadership. Further, there were no changes in Mr. Black’s compensation arrangements in connection with his planned retirement as CEO and transition to Executive Chair of the Board, other than certain changes to his executive severance and change in control agreement.


Forward-Looking Statements

This Proxy Statement contains forward-looking statements, including information about future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different than those expressed or implied in such statements. Certain of these risks, uncertainties, and other factors are included in documents the Company filed with the SEC, including but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as well as subsequent reports filed with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this Proxy Statement are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company expressly disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

SPS COMMERCE, INC.

TABLE OF CONTENTS


PROXY SUMMARY			3
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING			5
Purpose of the Annual Meeting			5
Annual Meeting Voting Rights and Attendance			5
Information about the Notice and Proxy Materials			6
Voting			7
ITEM 1 - ELECTION OF DIRECTORS			10
Director Skills, Experience and Diversity			11
Nominees for Directors			12
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE			16
Board Leadership Structure			16
Board Committees			16
Meeting Attendance			19
Board Involvement in Risk Oversight			19
Procedures for Contact the Company, including the Board			20
Director Independence			20
Hedging, Pledging and Other Restricted Transactions			20
Procedures for Selecting and Nominating Director Candidates			21
Board Diversity			22
Director Compensation			22
EXECUTIVE COMPENSATION			25
Compensation Discussion and Analysis			25
Compensation & Talent Committee Report			33
2022 Summary Compensation Table			34
2022 Grants of Plan-Based Awards Table			35
Outstanding Equity Awards at Fiscal Year-End Table			36
2022 Options Exercised and Stock Vested Table			36
Pension Benefits			37
Non-Qualified Deferred Compensation			37
Employment Agreements			38
Potential Payments Upon Termination, Retirement, or Change-in-Control			38
CEO Pay Ratio			42
Pay Versus Performance			43
AUDIT COMMITTEE REPORT AND PAYMENT OF FEES TO OUR INDEPENDENCE AUDITOR			46
Audit Committee Report			46
Auditor Fees			46
Auditor Services Pre-Approval Policy			47
ITEM 2 - RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR			48
ITEM 3 - ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY'S NAMED EXECUTIVE OFFICERS			49
SECURITY OWNERSHIP			50
Beneficial Ownership of Directors, Nominees, Executive Officers and Beneficial Owners of More than Five Percent of Our Common Stock			50
Equity Compensation Plan Information			49
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			52
Transactions with Related Persons			52
Policy for Approval of Related Person Transactions			52
OTHER INFORMATION			53
Delinquent Section 16(a) Reports			53
Stockholder Proposals for the 2024 Annual Meeting			53
Householding of Proxy Materials			53
Other Matters			54
APPENDIX A - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES			A-1


			PROXY SUMMARY

PROXY SUMMARY

This summary highlights our business overview, financial results, and information contained elsewhere in this Proxy Statement. We encourage you to review the entire Proxy Statement. This Proxy Statement and our Annual Report are first made available to our stockholders on or about March 30, 2023. Website addresses included throughout this Proxy Statement are for reference only. The information contained on our website is not incorporated by reference into this Proxy Statement.


Business Overview

We are a leading provider of cloud-based supply chain management services across our global retail network. Our products make it easier for retailers, grocers, distributors, suppliers, and logistics firms to communicate and collaborate by simplifying how they manage and share item, inventory, order and sales data across omnichannel retail channels. We deliver our products using a full-service model, which includes industry-leading technology and a team of experts that optimize, update, and operate the technology on customers' behalf.

Our products enable customers to increase supply chain performance, optimize inventory levels and sell-through, reduce operational costs, improve order visibility, and satisfy consumer demands for a seamless omnichannel experience.


Financial Results

2022 marked another year of strong execution and profitable growth for SPS Commerce, as retail dynamics continue to emphasize the need for fulfillment automation and supply chain efficiency. Once again, we achieved growth in recurring revenue, recurring revenue customers and wallet share while delivering strong revenue and Adjusted EBITDA increases. Additional information regarding our performance is as follows.

•Our revenues grew 17% from 2021, to $450.9 million for 2022. Recurring revenue grew 18% from 2021.

•We had sequential revenue growth for all four quarters of 2022 and now have 88 consecutive quarters of sequential revenue growth.

•Our wallet share (average recurring revenue per recurring revenue customer) increased 4% from 2021, and the number of recurring revenue customers grew 13% from December 31, 2021 to December 31, 2022.

•We delivered Adjusted EBITDA of $132.3 million, compared to $107.0 million in 2021, and non-GAAP income per diluted share of $2.35 compared to $1.82 in 2021. Adjusted EBITDA margin was 29% in 2022, compared to 28% in 2021.(1)

•Genius Central Systems, Inc. (acquired in November 2021) was successfully integrated into our business and in 2022 we executed two additional strategic acquisitions, including the July acquisition of GCommerce, Inc. ("GCommerce") and the October acquisition InterTrade Systems Inc. ("InterTrade").

•We repurchased $43.2 million of our common shares in 2022.

1 Adjusted EBITDA, Adjusted EBITDA margin, and non-GAAP income per diluted share are non-GAAP financial measures. Refer to Appendix A in this Proxy Statement for a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures.


			3\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			PROXY SUMMARY


Voting Matters and Voting Recommendations

The following proposals are included in this Proxy Statement and are scheduled to be voted on at the meeting. Our Board recommends that you vote your shares as indicated below.

PROPOSALS:

THE BOARD OF DIRECTOR’S

VOTING RECOMMENDATIONS:

RATIONALE FOR SUPPORT:

FOR FURTHER
DETAILS:

Election of the seven directors identified in this Proxy Statement, each for a term of one year.

“FOR” each nominee to the Board

Our nominees are distinguished leaders who bring a mix of skills, experience, and diversity to our Board and can represent the interests of all stockholders.

Page 10

Ratification of the selection of KPMG LLP (“KPMG“) as independent auditor of SPS Commerce, Inc. for the fiscal year ending December 31, 2023.

“FOR”

Based on its assessment of the qualifications and performance of KPMG, the Audit Committee believes that it is in the best interests of the Company and its stockholders to retain KPMG.

Page 48

An advisory vote to approve the compensation of our NEOs.

“FOR”

Our executive compensation program is designed to attract and retain talented and highly experienced executives and to motivate our executives to achieve the goals that are important to the Company’s growth and stockholder value.

Page 49

Other than the proposals described in this Proxy Statement, the Board is not aware of any other matters to be presented for a vote at the annual meeting. If you grant a proxy by telephone, internet, or by signing and returning your proxy card, any of the persons appointed by the Board as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If any of our nominees are unavailable as a candidate for director, the named proxy holders will vote your proxy for another candidate or candidates as may be nominated by the Board.


			4\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

SPS Commerce, Inc. is soliciting proxies for use at the annual meeting of stockholders to be held on May 12, 2023, and at any adjournment or postponement of the meeting.


Purpose of the Annual Meeting

At our annual meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting of Stockholders, and management will report on matters of current interest to our stockholders and respond to questions from our stockholders. The matters outlined in the notice include the following:

1.Election of directors;

2.Ratification of the selection of our independent auditor for 2023; and

3.An advisory vote to approve the compensation of our NEOs.


Annual Meeting Voting Rights and Attendance


1.	Q	Who is entitled to vote at the meeting?
	A	The Board has set March 16, 2023 as the record date for the annual meeting. If you were a stockholder of record at the close of business on March 16, 2023, you are entitled to vote at the meeting. As of the record date, 36,532,756 shares of common stock, representing all of our voting stock, were issued and outstanding and, therefore, eligible to vote at the meeting.
2.	Q	What are my voting rights?
	A	Holders of our common stock are entitled to one vote per share. Therefore, a total of 36,532,756 votes are entitled to be cast at the meeting. There is no cumulative voting.
3.	Q	How many shares must be present to hold the meeting?
	A	In accordance with our bylaws, shares equal to a majority of the voting power of the outstanding shares of common stock entitled to vote generally in the election of directors as of the record date must be present at the annual meeting in order to hold the meeting and conduct business. This is called a quorum. Shares are counted as present at the meeting if: •you are present (virtually) and vote at the meeting; or •you have properly and timely submitted your proxy as described below under “How do I submit my proxy?”
4.	Q	What is the difference between a stockholder of record and a “street name” holder?
	A	If your shares are registered directly in your name, you are considered the stockholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares, while you are considered the beneficial owner of those shares. In that case, your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, trust, or other nominee how to vote their shares using the method described below under “How do I submit my proxy?”
5.	Q	How can I attend the meeting?
	A	All of our stockholders are invited to attend the annual meeting virtually. The meeting is not being held in person. We believe that hosting the meeting online enables increased attendance and participation from locations around the world. The meeting has been designed to provide the same rights to participate as you would have at an in-person meeting.


			5\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING


6.	Q	What do I need to attend the meeting?
	A	We will be hosting our meeting via live webcast. Stockholders can attend the meeting online at: www.virtualshareholdermeeting.com/SPSC2023. The webcast will begin at 8:00 a.m., Central Time. We encourage you to access the meeting prior to the start time. In order to participate in the meeting, you will need the 16-digit control number located on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. A replay of the meeting will be publicly available on the Investor Relations page of our website for at least 30 days after the meeting.
7.	Q	How can I submit a question at the meeting?
	A	If you would like to submit a question at the meeting, you may type your question into the dialog box provided at any point during the virtual meeting (until the floor is closed to questions). In order to allow us to answer questions from as many stockholders as possible, we limit each stockholder to one question. Questions and answers may be grouped by topic and substantially similar questions may be answered at once. If we do not have time to answer all the appropriate questions that have been submitted, we expect to post any additional questions and our answers on the Investor Relations page of our website promptly following the meeting and retain them for 30 days after the meeting.
8.	Q	What if I have technical difficulties or trouble accessing the meeting?
	A	If you encounter any technical difficulties with accessing the virtual meeting, please call the technical support number that will be posted on the meeting website log-in page.


Information about the Notice and Proxy Materials


1.	Q	What is a proxy?
	A	A proxy is a designation for another person to vote stock you own; that other person is called a proxy. If you designate someone as your proxy in a written document, that document is called a form of proxy or a proxy card. When you designate a proxy, you also may direct the proxy how to vote your shares. We refer to this as your “proxy vote.” Two executive officers, Archie Black and Kimberly Nelson, have been designated as proxies for our 2023 annual meeting of stockholders.
2.	Q	If I received a one-page Notice of Internet Availability of Proxy Materials, how can I receive a full set of printed proxy materials?
	A	As permitted by SEC rules, we have elected to provide access to our proxy materials over the internet to record owners and any beneficial owners of our stock who have not previously requested printed proxy materials, which reduces our costs and the environmental impact of our annual meeting. The Notice contains instructions on how to request a printed set of proxy materials, which we will provide to stockholders upon request at no cost to the requesting stockholder within three business days after receiving the request. If you would like to request a printed set of proxy materials, please make your request on or before April 28, 2023 to facilitate timely delivery.


			6\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING


3.	Q	How do I submit my proxy?
	A	If you are a stockholder of record, you can submit a proxy to be voted at the meeting in any of the following ways: •over the internet using www.proxyvote.com, •over the telephone by calling a toll-free number; or •signing, dating, and mailing the proxy card in the envelope provided. To vote by telephone or the internet, you will need to use a control number that was provided to you by our vote tabulator, Broadridge Financial Solutions, and then follow the additional steps when prompted. The steps have been designed to authenticate your identity, allow you to give voting instructions, and confirm that those instructions have been recorded properly. If you hold your shares in street name, you must vote your shares in the manner prescribed by your broker, bank, trust, or other nominee, which is similar to the voting procedures for stockholders of record. If you request the proxy materials by mail after receiving a Notice of Internet Availability of Proxy Material, you will receive a voting instruction form (not a proxy card) to use in directing the broker, bank, trust, or other nominee how to vote your shares.
4.	Q	What does it mean if I receive more than one printed set of proxy materials?
	A	If you receive more than one Notice of Internet Availability of Proxy Materials or printed set of proxy materials, it means that you hold shares registered in more than one account. To ensure that all of your shares are voted, vote once for each control number you receive as described above under “How do I submit my proxy?”
5.	Q	Who pays for the cost of proxy preparation and solicitation?
	A	SPS pays for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokerage firms, banks, trusts or other nominees for forwarding proxy materials to street name holders. We are soliciting proxies by mail. In addition, our directors, officers, and regular employees may solicit proxies personally, telephonically, electronically or by other means of communication. Our directors, officers and regular employees will receive no additional compensation for their services other than their regular compensation.


Voting


1.	Q	How do I vote?
	A	See the “How to Vote by Proxy” section earlier in this document for instructions on the different options on how to vote by Proxy.
2.	Q	How does the Board recommend that I vote?
	A	The Board recommends a vote: •FOR the election of each of the nominees for director; •FOR the ratification of the selection of KPMG as the independent auditor of SPS Commerce, Inc. for the year ending December 31, 2023; and •FOR advisory approval of the compensation of our NEOs.


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			QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING


3.	Q	What if I do not specify how I want my shares voted?
	A	If you are a stockholder of record and submit a signed proxy card or submit your proxy by internet or telephone but do not specify how you want to vote your shares on a particular matter, we will vote your shares as follows: •FOR the election of each of the nominees for director; •FOR the ratification of the selection of KPMG as the independent auditor of SPS Commerce, Inc. for the year ending December 31, 2023; and •FOR advisory approval of the compensation of our NEOs. Your vote is important. We urge you to vote, or to instruct your broker, bank, trust, or other nominee how to vote, on all matters before the annual meeting. If you are a street name holder and fail to instruct the stockholder of record how you want to vote your shares on a particular matter, those shares are considered to be “uninstructed.” New York Stock Exchange rules determine the circumstances under which member brokers of the New York Stock Exchange may exercise discretion to vote “uninstructed” shares held by them on behalf of their clients who are street name holders. Other than the ratification of the selection of KPMG as our independent auditor for the year ending December 31, 2023, the rules do not permit member brokers to exercise voting discretion as to the uninstructed shares on any matter included in the notice of meeting. With respect to the ratification of the selection of KPMG as our independent auditor for the year ending December 31, 2023, the rules permit member brokers to exercise voting discretion as to the uninstructed shares. For matters with respect to which the broker, bank or other nominee does not have voting discretion or has, but does not exercise, voting discretion, the uninstructed shares will be referred to as a “broker non-vote.” For more information regarding the effect of broker non-votes on the outcome of the vote, see below under “How are votes counted?”
4.	Q	Can I change my vote after submitting my proxy?
	A	Yes. You may revoke your proxy and change your vote at any time before your proxy is voted at the annual meeting, in any of the following ways: •by submitting a later-dated proxy by telephone or the internet before 11:59 p.m. ET on May 11, 2023 for shares held directly and before 11:59 p.m. ET on May 9, 2023 for shares held in a Plan; •by submitting a later-dated proxy to the Chief Financial Officer of SPS, which must be received by us before the time of the annual meeting; •by sending a written notice of revocation to the Chief Financial Officer of SPS, which must be received by us before the time of the annual meeting; or •by voting at the virtual meeting.
5.	Q	Can I vote my shares at the meeting?
	A	If you are a stockholder of record or beneficial owner of common stock as of the close of business on the record date, you may vote your shares during the virtual meeting by using the 16-digit control number on your Notice, your proxy card, or your voting instruction form, as applicable, on www.virtualshareholdermeeting.com/SPSC2023. Even if you currently plan to attend the meeting, we recommend that you submit your proxy as described above so your vote will be counted if you later decide not to attend the meeting. If you submit your vote by proxy and later decide to vote at the annual meeting, the vote you submit at the meeting will override your proxy vote.


			8\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING


6.	Q	What vote is required to approve each item of business included in the notice of meeting?
	A	A director nominee will be elected if the number of votes cast “FOR” the nominee exceeds the number of votes cast “AGAINST” the nominee. Any incumbent director who does not receive a greater number of votes “FOR” than “AGAINST” his or her reelection in an uncontested election shall tender his or her resignation to the Board, subject to acceptance. The Board will determine whether to accept or reject the offer to resign within 90 days of certification of the stockholder vote. The affirmative vote of the holders of a majority of the outstanding shares of common stock present at the meeting or represented by proxy and entitled to vote at the annual meeting is required to ratify the selection of our independent auditor. For the advisory vote to approve the executive compensation of our NEOs, there is no minimum approval necessary for the proposal since it is an advisory vote; however, the Board will consider the results of the advisory vote when considering future decisions related to such proposals.
7.	Q	How are votes counted?
	A	You may vote “FOR,” “AGAINST” OR “ABSTAIN” for each director nominee and on the other proposals. If you properly submit your proxy but abstain from voting for a director nominee or on the other proposals, your shares will be counted as present at the meeting for the purpose of determining a quorum and for the purpose of calculating the vote on the particular matter(s) with respect to which you abstained from voting. If you do not submit your proxy or voting instructions and also do not vote at the annual meeting, your shares will not be counted as present at the meeting for the purpose of determining a quorum unless you hold your shares in street name and the broker, bank, trust or other nominee has discretion to vote your shares and does so. For more information regarding discretionary voting, see the information above under “What if I do not specify how I want my shares voted?” If you abstain from voting for one or more of the director nominees or you do not vote your shares on this matter (whether by broker non-vote or otherwise), this will have no effect on the outcome of the vote. With respect to the proposal to ratify the selection of KPMG as our independent auditor, if you abstain from voting, doing so will have the same effect as a vote against the proposal, but if you do not vote your shares (or, for shares held in street name, if you do not submit voting instructions and your broker, bank, trust or other nominee does not or may not vote your shares), this will have no effect on the outcome of the vote. Abstentions and broker non-votes will have no effect on the advisory vote to approve the compensation of our NEOs.


			9\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			ITEM 1 – ELECTION OF DIRECTORS


ITEM 1 – ELECTION OF DIRECTORS

The Board currently consists of seven directors and the Board has set the number of directors that will constitute the Board as of the annual meeting at seven. Our Amended and Restated Bylaws provide that each member of our Board is elected annually by a majority of votes cast if the election is uncontested. All of our directors were elected by our stockholders at our 2022 annual meeting of stockholders.

The following are directors who currently serve on our Board and are nominated for reelection and continued service upon recommendation of the Governance & Nominating Committee.

Name

Age(1)

Position

Director Since

Independent

Archie Black

Chief Executive Officer

2001

James Ramsey

Director

2014

Yes

Marty Reaume

Director

2018

Yes

Tami Reller

Director

2016

Yes

Philip Soran

Chair of the Board

2010

Yes

Anne Sempowski Ward

Director

2020

Yes

Sven Wehrwein

Director

2008

Yes

(1)Age as of March 30, 2023

All nominated Board members have agreed to serve as directors if elected. If, for any reason, any nominee becomes unable to serve before the annual meeting occurs, the persons named as proxies may vote your shares for a substitute nominee selected by our Board. The director nominees, if reelected, will serve until our 2024 annual meeting of stockholders or until their successors are elected and qualified.


			The Board recommends a vote FOR the election of each of the director nominees. Proxies will be voted FOR the election of each of the nominees unless otherwise specified.

Set forth below is biographical information for each of the nominated directors. The following includes certain information regarding our directors’ collective and individual experience, qualifications, attributes, and skills that led the Board to conclude that the makeup of the Board is appropriate and each director should continue service.


			10\|			Proxy Statement for the 2023 Annual Meeting of Stockholders


			ITEM 1 – ELECTION OF DIRECTORS


Director Skills, Experience and Diversity

The Board strives for well-qualified directors, with the diversity, experience, and skill to be effective and to provide strong oversight and thought leadership to management and exercise oversight responsibilities on behalf of SPS stockholders. Each director brings experience, skills, and diversity that complement those of the other directors. The Board believes that all the directors nominated for election are highly qualified, and have the skills, experience, and diversity required for service on the Board.

Core skills, experiences, and statistics for each of our current directors are included in the summary graphics below. The lack of a skill or experience noted below does not mean the director does not possess that qualification but rather a noted skill or experience indicates a specific area of focus or expertise on which the Board relies most heavily.

Black

Ramsey

Reaume

Reller

Soran

Sempowski Ward

Wehrwein

Knowledge, Experience, and Skill

Financial Literacy

Experience in overseeing and understanding financial statements, capital structure, and internal controls

SaaS

Experience in the Software-as-a-Service (SaaS) business model

Technology

Experience in managing and developing technology, including cybersecurity

Retail Market

Experience in our primary customer market, retailers

Senior Leadership / Corporate Governance

Experience in senior leadership or the direct management of corporate governance to assist in our organizational and operating structures, including risk management

Talent Management / Human Resources

Experience in the direct management of retaining and compensating people

Sales / Customer Engagement

Experience in the direct management of the sales or customer success organizational functions

Mergers & Acquisitions

Experience in the various phases of M&A work including target identification, due diligence, agreement negotiation and review, and integration

International Operations

Experience in the complex landscape of existing and growth into multi-national operations

Gender

SEC Form DEF 14A filed by SPS Commerce Inc.