Document

DEF 14A 1 proxy2022.htm DEF 14A Document

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			x			Filed by a party other than the Registrant			o


Check the appropriate box:
o			Preliminary Proxy Statement
o			Confidential, for Use of the Commission Only (as permitted by Rule 14(a)-6(e)(2))
x			Definitive Proxy Statement
o			Definitive Additional Materials
o			Soliciting Material Under Rule 14a-12

HERC HOLDINGS INC.

(Exact name of registrant as specified in its charter)

N/A

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


Payment of Filing Fee (Check the appropriate box):
x			No fee required

o			Fee paid previously with preliminary materials.

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

Herc Holdings Inc.
27500 Riverview Center Blvd.

Bonita Springs, Florida 34134

April 1, 2022

Dear Stockholder:

You are cordially invited to attend our annual meeting of stockholders to be held at 9:00 a.m. (local time) on May 12, 2022, at our principal executive office located at 27500 Riverview Center Blvd., Bonita Springs, Florida 34134.

As a stockholder, you play an important role in Herc Holdings and your vote is important. If you do not vote your shares, you will not have a say on the important issues to be voted on at the annual meeting. Information on how to vote is included in the enclosed proxy statement.

We are using the “Notice and Access” method of providing proxy materials to you via the Internet at www.proxyvote.com, instead of by mail. On or about April 1, 2022, we will begin mailing to our stockholders a proxy statement and related proxy materials or a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and related proxy materials and how to vote online.

Thank you for the time and attention you invest in making a thoughtful voting decision.

Sincerely,



Patrick D. Campbell			Lawrence H. Silber
Non-executive Chairman of the Board			President, Chief Executive Officer and Director

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS
OF HERC HOLDINGS INC.


Date and Time:			May 12, 2022 at 9:00 a.m. (local time).
Place:			Our principal executive office, located at 27500 Riverview Center Blvd., Bonita Springs, Florida 34134.
Proposals:			1.Election of the 10 nominees named in the accompanying proxy statement to serve as directors until the next annual meeting of stockholders; 2.Approval, by a non-binding advisory vote, of the named executive officers’ compensation; 3.Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2022; and 4.Transaction of any other business that may properly be brought before the annual meeting.
			The Board of Directors recommends a vote FOR each director nominee and FOR Proposals 2 and 3.


Record Date:			Only holders of record of Company common stock at the close of business on March 14, 2022 will be entitled to attend and vote at the meeting.
How to Vote:			You may vote online or by telephone by following the instructions set forth in the Notice of Internet Availability of Proxy Materials (“Notice”) and the proxy statement. If you requested a paper copy of our proxy materials, you may also vote by completing, signing, dating and returning the proxy card. If you attend the annual meeting, you may vote in person.
Date of Mailing:			This proxy statement and accompanying materials were filed with the Securities and Exchange Commission on April 1, 2022, and we expect to first mail the proxy statement and related proxy materials or the Notice to stockholders on or about April 1, 2022.

By Order of the Board of Directors,

S. Wade Sheek

Senior Vice President, Chief Legal Officer and Secretary

April 1, 2022

Bonita Springs, Florida

TABLE OF CONTENTS



			Page

Proxy Statement Summary			1
Proposal 1: Election of Directors			4
Corporate Governance			10
Proposal 2: Advisory Vote To Approve Executive Compensation			17
Compensation Discussion and Analysis			18
Compensation Committee Report			28
Executive Compensation			29
Director Compensation			37
Proposal 3: Ratification of the Appointment of PricewaterhouseCoopers			39
Auditor Information			40
Audit Committee Report			41
Beneficial Ownership of Common Stock			42
Certain Relationships and Related Person Transactions			44
Important Information About the Annual Meeting and Voting			46
Other Business			48
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting			48
Stockholder Proposals for 202 3 Annual Meeting			48
Annual Report for 2021			48
Appendix			A-1

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PROXY STATEMENT SUMMARY

This proxy statement was filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2022, and we expect to first send the proxy statement and related proxy materials or the Notice of Internet Availability of Proxy Materials (the “Notice”) to stockholders on or about April 1, 2022. This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

Business Performance

We are a leading equipment rental company, committed to being the supplier, employer and investment of choice in our industry. We seek to fulfill our purpose through our approximately 315 locations throughout North America. As an essential service provider, our team provides critical support for the operations of essential businesses and industries.

While the global pandemic continued in 2021, our local markets and industries began to experience an improvement in economic activity compared with the uncertainty of the prior year. The strategies we executed in 2020 to preserve capital and reduce the cost structure of our business during the pandemic positioned the Company well as the economy began to recover. Our 2021 operating performance improved substantially over the prior year as we successfully leveraged our assets and operations from a lower base.

Equipment rental revenue increased 23.8% to $1.9 billion and adjusted EBITDA increased 29.8% to $894.7 million over the prior year. The Company resumed its positive growth trend in 2021, and we reported a compound annual growth rate of 6.2% in rental revenue and 11.2% in adjusted EBITDA since 2017. Additionally, we reduced our net leverage to 2.1x in 2021 through disciplined capital management, reflecting annual improvement over the last five years. We believe we are well-positioned to continue our growth trajectory in 2022.

Adjusted EBITDA and Net Leverage are non-GAAP measures and are defined in the appendix beginning on page A-1.

Meeting Information

The Board of Directors of Herc Holdings Inc. (the “Board”) is soliciting proxies to be used at the annual meeting of stockholders to be held:


Date: May 12, 2022 Time: 9:00 a.m. (local time) Record Date: March 14, 2022			Location: 27500 Riverview Center Blvd. Bonita Springs, Florida 34134

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Items of Business

Proposal

Board Voting Recommendation

Page Reference

1. Election of 10 Director Nominees to Serve for a One Year Term

FOR each nominee

2. Advisory Vote on Executive Compensation

FOR

3. Ratification of the Company’s Auditor for 2022

FOR

Director Nominees

The following table provides summary information (as of April 1, 2022) about each director nominee:

Name

Age

Director Since

Primary or Former Occupation

Other Public Company Boards

Independent

Board Committee Membership*

Patrick D. Campbell
(Chairman)

2016

Retired Senior Vice President and Chief Financial Officer of 3M Company

Lawrence H. Silber

2016

Chief Executive Officer and President of Herc Holdings

James H. Browning

2016

Retired Partner at KPMG LLP

Shari L. Burgess

2020

Retired Vice President and Treasurer, Lear Corporation

—

Hunter C. Gary

—

Senior Managing Director of Icahn Enterprises L.P.

Jean K. Holley

2017

Retired Senior Vice President and Chief Information Officer for Brambles Limited

Michael A. Kelly

2016

Retired Executive Vice President of the Electronics and Energy Business of 3M Company

Steven D. Miller

—

Portfolio Manager of Icahn Capital LP

Rakesh Sachdev

2021

Retired Chief Executive Officer of Platform Specialty Products Corporation

Andrew J. Teno

2021

Portfolio Manager of Icahn Capital LP

* A – Audit Committee; C – Compensation Committee; G – Nominating and Governance Committee;

CC – Committee Chair; X – Committee Member

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Governance Highlights

Our Board is committed to good corporate governance and promoting the long-term interests of our stockholders by adopting structures, policies and practices that we believe strengthen the Board and promote responsible oversight of management. Highlights of our corporate governance practices include:


▪Independent Chairman ▪9 of 10 director nominees are independent ▪Annual election of directors ▪Majority voting for directors and director resignation policy in uncontested elections ▪94% Board and Committee attendance in 2021 by director nominees			•Robust stock retention guidelines for senior executives and non-employee directors •Prohibition on directors and Section 16 officers pledging Company stock and prohibition on directors and all employees hedging Company stock •The Board generally will not nominate a non-management director for election at an annual meeting if that person has reached age 75

Environmental and Social Highlights

We are committed to operating according to sound social, environmental and people-related practices as we seek to create value for customers, employees, communities and stockholders. Highlights of our social and environmental practices include:


▪Oversight of environmental and sustainability matters by the Nominating and Governance Committee ▪Oversight of social responsibility matters by the Compensation Committee ▪Awarded Bronze Medal by EcoVadis in recognition of sustainability achievements ▪Named by Newsweek as one of America's Most Responsible Companies			•Published Corporate Citizenship Report aligned with Global Reporting Initiatives standards •Established environmental goals for reduction of GHG emissions and waste by 2030 •Established goal of annual improvement of safety metrics •Adopted UN Sustainable Development Goals

How to Vote

Whether or not you plan to attend the annual meeting, please vote as promptly as possible using one of the following methods:

•Via Internet by following the instructions on www.proxyvote.com;

•Via telephone by calling 1‑800‑690-6903 and following the instructions provided by the recorded message; or

•Via mail by completing, signing and dating the proxy card (if you received printed proxy materials) and returning it to the address listed therein.

Where You Can Find Additional Information

Our website is located at http://ir.hercrentals.com. Although the information contained on or connected to our website is not part of this proxy statement, you can view additional information on our website, such as the charters of our Board committees, our Corporate Governance Guidelines, our Code of Ethics and reports that we file with the Securities and Exchange Commission. Copies of these documents may also be obtained free of charge by writing Herc Holdings Inc., 27500 Riverview Center Blvd., Bonita Springs, Florida 34134, Attention: Corporate Secretary.

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PROPOSAL 1: Election of Directors

Nominees for Election to the Board

The Board has nominated each director nominee listed below for election for a one-year term beginning at the 2022 annual meeting of stockholders to be held on May 12, 2022 (the “Annual Meeting”) and expiring at the end of the 2023 annual meeting of stockholders. Each director nominee is expected to be available for election as a director, but in the event that one or more of the nominees is not available for election due to unforeseen circumstances, the proxy will be voted for the Board’s substitute nominee or nominees.

Director Election Standards

We maintain a “majority” voting standard for uncontested elections of directors. For a nominee to be elected to our Board, the nominee must receive more “for” than “against” votes.

The Board recommends a vote FOR the following nominees for election as directors:


Patrick D. Campbell, Non-Executive Chairman of the Board
			Director Since: 2016 Age: 69 Committees: Nominating and Governance Committee (Chair) and Compensation Committee
Business Experience			•Retired Senior Vice President and Chief Financial Officer of 3M Company, a diversified global technology company, from 2002 to 2011. •Former Vice President of International and Europe of General Motors Corporation, a vehicle manufacturing company, as well as various finance functions during his 25-year tenure.
Other Public Company Directorships			Newell Brands Inc.; Stanley Black and Decker, Inc.; SPX Flow, Inc.
Former Public Company Directorships			SPX Corporation; Solera Holdings Inc.
Qualifications			Mr. Campbell’s experience as former senior vice president and chief financial officer of 3M, the current Non-Executive Chairperson of the Board of Newell Brands Inc. and the former Lead Director of Stanley Black and Decker, Inc. brings substantial expertise to our Board. His extensive experience as a leader of boards of directors and his knowledge of financial and accounting matters, company capitalization structures and the capital markets gained through his tenure and leadership in different industries provides him with insight into a variety of issues relevant to our growth as a company. In addition, he was responsible for mergers and acquisitions as well as information technology in his role at 3M and offers significant expertise in each of those areas. Further, his combination of domestic and international roles in complex global businesses provides him with an understanding of diverse political and regulatory systems.

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Lawrence H. Silber
			Director Since: 2016 Age: 65 Committees: None
Business Experience			•President and Chief Executive Officer of Herc Holdings, since 2015. •Executive Advisor at Court Square Capital Partners, LLP, a private equity firm, from 2014 to 2015. •Chief Operating Officer of Hayward Industries, one of the world’s largest swimming pool equipment manufacturers, from 2008 to 2012. •Ingersoll Rand plc, a manufacturer of industrial products and components, from 1978 to 2008.
Other Public Company Directorships			Hayward Holdings, Inc.
Former Public Company Directorships			SMTC Corporation
Qualifications			Mr. Silber has extensive expertise and a deep knowledge of our business including its operations, business development matters and financial performance. His leadership has kept us well poised to continue our strategy of being the supplier, employer and investment choice in our industry.



James H. Browning
			Director Since: 2016 Age: 72 Committees: Audit Committee (Chair)
Business Experience			KPMG LLP, an audit, tax and advisory services firm, from 1971 to 2009, including serving as Partner and Southwest Area Professional Practice Partner from 1980 to 2009; SEC Reviewing Partner; and Partner in Charge of KPMG’s New Orleans audit practice.
Other Public Company Directorships			Texas Capital Bancshares
Former Public Company Directorships			Endeavor International Corporation; RigNet, Inc.
Qualifications			Mr. Browning’s extensive financial knowledge and experience brings significant expertise to our Board. His public accounting experience with various industries during his long tenure with KPMG provides him with extensive knowledge and experience in addressing financial and accounting matters. In addition, his experience as former chairman of the board of RigNet, Inc., together with his roles on other public company boards, including audit committees, provides him with a broad understanding of the responsibilities of public company boards and audit committees.

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Shari L. Burgess
			Director of the Company Since: 2020 Age: 63 Committees: Audit Committee
Business Experience			Retired Vice President and Treasurer, Lear Corporation, a global automotive supplier of seating, electrical distribution and connections systems and electronic systems, from 2002 to 2021 and served in various financial roles at Lear beginning in 1992.
Other Public Company Directorships			None
Former Public Company Directorships			None
Qualifications			Ms. Burgess’ experience as the vice president and treasurer at Lear Corporation brings significant executive and management experience to our Board. Her deep understanding of corporate finance, corporate structure, long-term strategy objectives and transactions provides her with insight into a variety of complex issues applicable to our growth as a company. Her experience as Lear Corporation’s chief diversity officer from 2014 to 2018 and involvement in the promotion of diversity programs in the State of Michigan brings another dimension to our Board and will be beneficial to our development as a company in the areas of diversity and corporate citizenship.


Hunter C. Gary
			Director of the Company Since: Age: 47 Committees: None
Business Experience			Senior Managing Director of Icahn Enterprises L.P., a diversified holding company, since 2010.
Other Public Company Directorships			CVR Energy, Inc.; Conduent, Inc.
Former Public Company Directorships			CVR Refining, LP; CVR Partners LP; Herbalife Nutrition Ltd.; Cadus Corporation; and Tropicana Entertainment Inc.
Qualifications			Mr. Gary’s broad range of experience in operations and oversight matters for a variety of companies and service on other company boards enables him to advise our Board on a range of matters. Mr. Gary is a director nominee designated by Mr. Icahn pursuant to the Nominating and Standstill Agreement we entered into with Mr. Icahn described under “Certain Relationships and Related Person Transactions — Agreements with Carl C. Icahn.”

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Jean K. Holley
			Director of the Company Since: 2017 Age: 62 Committees: Compensation Committee and Nominating and Governance Committee
Business Experience			•Retired Global Senior Vice President and Chief Information Officer for Brambles Limited, the global leader in supply chain and logistics, from 2011 to 2017. •Former Executive Vice President and Chief Information Officer for Tellabs, Inc., a company that designs, develops, deploys and supports telecommunications around the world, from 2004 to 2011.
Other Public Company Directorships			Accord Financial Corp.; OneSpan, Inc.
Former Public Company Directorships			None
Qualifications			Ms. Holley’s experience as a former chief information officer and a senior leader of a global company brings significant expertise to our Board of Directors. Her understanding of information technology, strategy and operations benefits our Board as we seek long-term growth strategies. Her role as a member of the board of directors of an enterprise-wide security solutions company provides her with extensive knowledge and experience with respect to information technology systems, cybersecurity and systems migrations.



Michael A. Kelly
			Director of the Company Since: 2016 Age: 65 Committees: Compensation Committee (Chair) and Nominating & Governance Committee
Business Experience			Retired Executive Vice President, Electronics and Energy Business of 3M Company, a diversified global technology company, from 2012 to 2016; he also served as Executive Vice President of the Display and Graphic Business from 2006 to 2012, and in various management positions in the U.S., Singapore, Korea and Germany.
Other Public Company Directorships			Mettler-Toledo International, Inc.
Former Public Company Directorships			None
Qualifications			Mr. Kelly’s experience as a former executive vice president at 3M’s Electronic and Energy Business, with global responsibility for all operational and strategic elements of a $6 billion business, brings substantial expertise to our Board of Directors. His knowledge and experience with respect to strategic planning, restructuring and general operational matters provides him with insight into various issues of importance to our future growth as a company. In addition, his service on the board of another public company provides him with a broad understanding of the responsibilities of public company boards.

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Steven D. Miller
			Director of the Company Since: Age: 33 Committees: None
Business Experience			•Portfolio Manager of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, since 2020. •Analyst of BlueMountain Capital Management LLC, an alternative asset manager, from 2013 to 2019.
Other Public Company Directorships			Bausch Health Companies Inc.; Conduent Incorporated; Xerox Holdings Corporation
Former Public Company Directorships			None
Qualifications			Mr. Miller’s extensive financial and investment experience, knowledge of financial matters and company capitalization structures and a strong understanding of the complex business and financial issues encountered by companies in a variety of industries is beneficial to our growth as a Company. Mr. Miller is a director nominee designated by Mr. Icahn pursuant to the Nominating and Standstill Agreement we entered into with Mr. Icahn described under “Certain Relationships and Related Person Transactions — Agreements with Carl C. Icahn.”


Rakesh Sachdev
			Director of the Company Since: 2021 Age: 66 Committees: Audit Committee
Business Experience			•Retired Chief Executive Officer of Platform Specialty Products Corporation, a global specialty chemicals company, from 2016 to 2019. •Former President, Chief Executive Officer of Sigma Aldrich Corporation., a S&P 500 global life science and biotechnology company, from 2010 to 2015. •Senior Advisor to New Mountain Capital, a private equity company, since 2019.
Other Public Company Directorships			Regal Rexnard Corporation; Axalta Coating Systems Ltd.; Edgewell Personal Care Company
Former Public Company Directorships			Avantor Inc.; Element Solutions Inc.; Sigma Aldrich Corporation
Qualifications			Mr. Sachdev’s experience as former chief executive officer of Platform Specialty and Sigma Aldrich brings substantial expertise to our Board. His extensive knowledge of financial and accounting matters, company capitalization structures and the capital markets gained through his tenure in different industries provides him with insight into a variety of issues relevant to our growth as a company. In addition, his role as former board member and chairman of the Federal Reserve Bank of St. Louis provides him with a deep understanding of banking and federal regulatory systems. Further, his combination of domestic and international roles in complex global businesses provides him with an understanding of diverse political and regulatory systems.

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Andrew J. Teno
			Director of the Company Since: 2021 Age: 37 Committees: None
Business Experience			•Portfolio Manager of Icahn Capital LP, the entity through which Carl C. Icahn manages investment funds, since 2020. •Director of Fir Tree Partners, a private investment firm, from 2011 to 2020.
Other Public Company Directorships			Cheniere Energy, Inc.; FirstEnergy Corp.
Former Public Company Directorships			Eco-Stim Energy
Qualifications			Mr. Teno has extensive financial and investment experience and a strong understanding of the complex business and financial issues encountered by companies in a variety of industries. His knowledge of financial matters, company capitalization structures and the capital markets gained through his tenure with investment banking firms and an M&A advisory boutique provides him with insight into issues applicable to us. Mr. Teno is a director nominee designated by Mr. Icahn pursuant to the Nominating and Standstill Agreement we entered into with Mr. Icahn described under “Certain Relationships and Related Person Transactions –– Agreements with Carl C. Icahn.”

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CORPORATE GOVERNANCE

Corporate Governance

Our business is managed with the oversight of our Board of Directors. Our Board is committed to good corporate governance and promoting the long-term interests of our stockholders by adopting structures, policies and practices that we believe strengthen the Board and promote responsible oversight of management. Our By-Laws, Corporate Governance Guidelines and the charters of each of our Board committees provide the framework for our corporate governance. A copy of our By-Laws, Corporate Governance Guidelines, as well as the charters of each Board committee, are available under the Investor Relations section of our website at http://ir.hercrentals.com.

Our Board Leadership

The Board believes it is important to retain flexibility to allocate the responsibilities of the offices of the Chair of the Board and Chief Executive Office (“CEO”) in a manner that is in the best interests of the Company, including the flexibility to determine whether these offices should be combined or separate. The Board believes the decision as to who should serve as Chair and CEO, and whether the offices should be combined or separate, should be assessed periodically by the Board, and the Board should not be constrained by a rigid policy mandating the structure of such positions. The Board currently believes the most effective and efficient leadership structure is for an independent director to serve as the non-executive Chair of the Board (“Independent Non-Executive Chair”). Mr. Campbell serves as the Independent Non-Executive Chair of the Board.

The Board believes that the current leadership structure benefits the Company by delineating roles of management and oversight over management. Our CEO and his management team provide the overall strategy and day-to-day leadership for our Company, and the Board, along with the Independent Non-Executive Chair, provides oversight and evaluates the performance of management. The Independent Non-Executive Chair, in consultation with the CEO, has responsibility for chairing and determining the length and frequency of Board meetings as well as setting the agenda for such meetings. The Independent Non-Executive Chair also sets the agenda for and chairs the Board’s regularly-scheduled executive sessions in which management (other than Mr. Silber) does not participate. The Board also holds regular executive sessions where only our independent directors attend. The Independent Non-Executive Chair (or, in his absence, another independent director selected by the independent directors present at such executive session) presides over the executive sessions to facilitate the discussion. In addition, the Independent Non-Executive Chair also significantly assists in evaluating and in setting the compensation of our CEO by conferring with other independent members of the Board regarding our CEO’s performance.

Board Independence

Our Board has determined that each director nominee, other than Mr. Silber, our President and CEO, is “independent” under our standards for determining director independence, which are specified in Annex A to our Corporate Governance Guidelines. These standards for determining director independence are consistent with the federal securities laws and applicable New York Stock Exchange (“NYSE”) listing standards. The Board also determined that Jonathan Frates, Jacob M. Katz, Andrew N. Langham, and Mary Pat Salomone, each who served as a director since the 2021 annual meeting of stockholders, were also independent.

In recommending to the Board that each of those directors be classified as independent, the Nominating and Governance Committee considered whether there were any facts or circumstances that might impair the independence of each of those persons including, with respect to Messrs. Frates, Gary, Langham, Miller and Teno, the agreements described in “Certain Relationships and Related Person Transactions –– Agreements with Carl C. Icahn.”

Board Committees

Our Board has three standing committees – the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. In 2022, the Board dissolved the Finance Committee and assigned to the Audit Committee the responsibilities previously delegated to the Finance Committee, other than those responsibilities related to mergers and acquisitions. Each committee has a written charter. Each member of the Audit Committee, Compensation Committee and Nominating and Governance Committee meets the independence and eligibility standards necessary for service on such committee pursuant to our Corporate Governance Guidelines, the respective charter of each committee and the relevant federal securities laws and NYSE listing standards. Our Board has designated Messrs. Browning and Sachdev and Ms. Burgess as “audit committee financial experts.”

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Membership, Meetings and Roles and Responsibilities of the Board Committees

Audit Committee


Members						Roles and Responsibilities
Browning (Chair) Burgess Sachdev						•Oversees our accounting, financial and external reporting policies and practices as well as the integrity of our financial statements. •Monitors the independence, qualifications and performance of our independent registered public accounting firm. •Oversees the performance of our internal audit function and operational policies and practices that affect our internal controls. •Monitors our compliance with legal and regulatory requirements. •Reviews the annual internal audit plan and the commitment of internal audit resources, in each case as they relate to risk management. •Prepares our Audit Committee’s report included in our annual proxy statement. •Assists our Board in its oversight of the Company’s financing policies. •Reviews, approves and recommends to our Board matters pertaining to our financial structure, short and long-term financing in both the public and private markets, and other financial matters of importance. •Reviews and recommends to our Board matters pertaining to our dividend policy and share repurchases. •Periodically reviews funding, asset performance and strategies for our pension and other post-retirement benefit plans and delegation of authority policy.
Number of Meetings in 2021
17*
* Inclusive of 9 meetings of the Finance Committee in 2021

Compensation Committee


Members						Roles and Responsibilities
Kelly (Chair) Campbell Holley Langham						•Evaluates the performance of our CEO as it relates to all elements of compensation, as well as the goals and objectives of our senior executives. •Oversees compensation philosophy and compensation plans and guidelines for our most senior executives •Approves the annual incentive compensation targets and payouts and grants to our most senior executives under our long-term incentive plan. •Oversees succession planning for the Company's senior management group. •Oversees programs, policies and initiatives related to employee relations, engagement and culture, equal employment and equal opportunity, and diversity and inclusion. •Prepares a report on executive compensation required for inclusion in our annual proxy statement.
Number of Meetings in 2021
7

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Nominating and Governance Committee


Members						Roles and Responsibilities
Campbell (Chair) Holley Kelly Langham						•Assists our Board in determining the skills, qualities and eligibility of individuals recommended for membership on our Board. •Reviews the composition of our Board and its Committees to determine whether it may be appropriate to add or remove individuals. •Reviews and evaluates directors for re-nomination and re-appointment to Committees. •Reviews and assesses the adequacy of our Corporate Governance Guidelines and Directors’ Code of Business Conduct and Ethics. •Reviews and recommends to the Board the form and amount of compensation paid to directors. •Reviews our ESG and sustainability strategies, initiatives and policies and our Corporate Citizenship Report.
Number of Meetings in 2021
4

Our Board's Oversight Role

Strategic Oversight

Our Board actively oversees the development and execution of our strategies. These strategies encompass both financial and operational strategies, as well as strategies focused on capital allocation, talent development and executive succession, legal, strategic investments, and sustainability (including climate risk). Over the course of the year, management and our Board discuss the development and execution of our strategic plans as well as events that bear upon those plans. Our Board further monitors strategic execution through standing presentations at regular Board and Committee meetings and communications from management in between meetings.

Risk Oversight

The Board oversees our risk management with a focus on the most significant risks we face, including strategic, operational, financial and legal compliance risks. The Board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include an enterprise risk management program, regular internal management disclosure committee meetings, a code of conduct that applies to all employees, executives and directors, an ethics and compliance program and comprehensive internal audit processes. The Board’s risk oversight role also includes the selection and oversight of the independent auditors. The Board implements its risk oversight function both as a Board and through delegation to Board committees, which meet regularly and report back to the Board. The Board has delegated the oversight of specific risks to Board committees that align with their functional responsibilities.

Our enterprise risk management process helps us identify, prioritize and manage risks that have the potential to present the most significant obstacles to achieving business objectives. Our enterprise-wide risk management (“ERM”) committee, comprised of members of senior management, including our Chief Executive Officers, Chief Financial Officer, Chief Legal Officer, Senior Director of Internal Audit and Chief Compliance Officer, meets regularly to oversee this process and efforts undertaken to identify and manage the most significant risks we face. Our Senior Director of Internal Audit reports annually to our Board on this process.

Our Board, directly or through its Committees, also oversees management of the following risk areas:

•Accounting Risk: The Audit Committee oversees our management of financial, accounting, and internal controls through interaction at each meeting with the Chief Financial Officer, management from our financial, accounting, and auditing functions (as appropriate) and representatives from our independent registered public accounting firm.

•Financial Risk: The Audit Committee oversees our capital and liquidity risks through interaction at each meeting with the Chief Financial Officer and Treasurer.

•Environmental, Social and Governance Risk: The Nominating and Governance Committee oversees risks related to Board organization, membership and structure and other corporate governance matters. The Nominating and Governance Committee also has oversight of our ESG and sustainability strategies, initiatives and policies.

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•Talent Risk: The Compensation Committee oversees our succession planning and talent management, including reviewing our programs, policies and initiatives related to employee relations, engagement and culture, equal employment and equal opportunity and diversity and inclusion.

•Legal and Compliance Risk: Our Board, both directly and through the Audit Committee, receives regular updates on various legal and compliance matters, such as developments in litigation, enterprise risks, compliance risks and our compliance program (including allegations of non-compliance). In addition, regular updates to the Audit Committee by our Senior Director of Internal Audit provide insight into our risk assessment and risk management practices, policies and processes.

•Executive Compensation Program Risk: The Compensation Committee considers the extent to which the executive compensation program may create risk for us (see “Risk Considerations in our Compensation Program” below for a more detailed description).

•Cybersecurity Risk: The Audit Committee oversees our cybersecurity program and management of the associated risks. The Audit Committee receives regular updates from our Chief Information Security Officer on cybersecurity matters and the related risk management program.

Risk Considerations in our Compensation Program

In 2021, we conducted a review of the risk profile of our compensation policies and practices. FW Cook, as independent compensation advisor to the Compensation Committee, with the assistance of management, prepared a risk profile assessment of our compensation policies and practices and presented the findings to the Compensation Committee. Based in part on such assessment, the Compensation Committee determined that our executive compensation policies and practices, in conjunction with our existing processes and controls, are not reasonably likely to have a material adverse effect on us.

Environmental, Social and Governance

With approximately 315 branches across the United States and Canada, we are a member of a wide variety of communities, locally, nationally and globally. We seek to operate in each of our communities according to sound social, environmental and people-related practices. We approach our commitment from the framework of responsible value creation, the core tenants of which are:

•Prioritize the safety and well-being of our employees, customers and communities;

•Minimize and continuously seek to reduce environmental impacts associated with our business activities; and

•Align business practices and policies to reflect our responsibilities as a corporate citizen and to support mutually beneficial outcomes across stakeholder groups.

The Board of Directors directly and through the Nominating and Governance Committee and the Compensation Committee oversee our environmental, social and governance (“ESG”) policies, practices and initiatives. We have established the Office of Sustainability to identify our ESG-related risk and opportunities, and manage our ESG goals and initiatives, including the development and tracking of quantifiable metrics, and reporting on our progress toward our goals and initiatives.

In furtherance of our commitment to our communities, we established the following 2030 goals (utilizing 2019 as the base year of measurement):

•Reduce the impact of Scope 1 and Scope 2 GHG emissions intensity by 25%;

•Reduce our non-hazardous waste intensity to landfill by 25%; and

•Improve our safety metrics annually with the goal of 0.49 or less for the Total Reportable Incident Rate.

We understand that transparent disclosure on our ESG commitments and initiatives is important to ensure that we remain committed to our goals and provide transparency on our progress to shareholders. Our annual Corporate Citizenship Report is central to our ESG disclosure. In this Report, we share our ESG goals, disclose our progress toward achieving those goals and document our progress on other important ESG initiatives. In support of our goals and our commitment to responsible management, we align our ESG reporting with the Global Reporting Initiative, while being mindful of the guidelines of the Sustainable Accounting Standards and the Task Force on Climate-Related Financial Disclosures reporting requirements.

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Selecting Nominees to the Board

The Nominating and Governance Committee has the responsibility for identifying, evaluating and making recommendations about nominees to the Board. The Nominating and Governance Committee:

•Reviews candidates’ qualifications for membership on the Board based on the criteria approved by the Board and taking into account the candidate's ability to commit the necessary time to serving on the Board as well as the enhanced independence, financial literacy and financial expertise standards that may be required under law or NYSE rules for committee membership purposes;

•Assesses the performance and independence of current directors in evaluating current directors for re-nomination to the Board; and

•Periodically reviews the composition of the Board in light of the current challenges and needs of the Board and the Company, and determine whether it may be appropriate to add or remove individuals after considering issues of judgment, diversity, age, skills, background, experience, independence and any other factors that may be deemed appropriate by the Committee or the Board, including governance, social and economic issues.

Each director nominee standing for election at the Annual Meeting is a current director and was elected at the 2021 annual meeting of stockholders, other than Mr. Sachdev, who was elected to the Board on December 2, 2021, and Mr. Gary and Mr. Miller, who were designated by Mr. Icahn as director nominees pursuant to the Nominating and Standstill Agreement.

Implementation and Assessment of Policies Regarding Director Attributes

The Nominating and Governance Committee, when making recommendations to the Board regarding director nominations, assesses the overall performance of the Board, and when re-nominating incumbent Board members or nominating new Board members, evaluates the potential candidate’s ability to make a positive contribution to the Board’s overall function. Candidates recommended by stockholders are evaluated in the same manner as candidates identified by other means.

The Nominating and Governance Committee considers the actual performance of incumbent Board members over the previous year, as well as whether the Board has an appropriately diverse membership. The Nominating and Governance Committee also takes into consideration any written arrangements for director nominations to which we are a party, including the Nomination and Standstill Agreement we entered into with Carl C. Icahn, described under “Certain Relationships and Related Person Transactions –– Agreements with Carl C. Icahn.” The particular experience, qualifications, attributes and skills of the potential candidate are assessed by the Nominating and Governance Committee to determine whether the potential candidate possesses the professional and personal experiences and expertise necessary to enhance the Board. Based on this assessment, the Nominating and Governance Committee makes recommendations to the Board regarding director nominees. In its assessment of director nominees, the Nominating and Governance Committee does not take a formulaic approach, but rather considers each prospective nominee’s diversity in perspectives, personal and professional experiences and background and ability. In making director nominations, the Nominating and Governance Committee takes into account the overall diversity of the Board and evaluates the Board in light of, among other things, the attributes discussed in the section titled “Policy on Diversity” below.

Board and Committee Evaluation Process

The Board and the Board Committees are committed to using the evaluation process as an important tool for promoting effectiveness and continuous improvement. The Nominating and Governance Committee oversees the self-evaluation process, including the determination of whether the evaluation process will be led by the Chairman of the Board or an independent third party. In 2021, the Board and Committee evaluation process was led by an independent third party in order to bring an outside perspective.

The topics the evaluation process reviews include roles and responsibilities, structure and composition of the Board and Board Committees, corporate governance, Board culture, succession, leadership, risk management and content and qualify of materials. The results of the evaluation process are reviewed and discussed with the Board and each Committee.

Succession Planning

We believe that providing for continuity of leadership at both the Board and at the senior management level is critical to our success and we place a high priority on robust talent development. The Board regularly reviews long-term succession plans for the CEO. With the assistance of the CEO and our Senior Vice President - Chief Human Resources Officer, the Compensation Committee, at least annually, formally reviews the performance of the members of senior management and

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succession plans for those members, including reviewing the qualifications, experience, development plans and progress of internal CEO and senior management candidates. Further, we provide opportunities for the directors to engage with key talent and employees at various levels.

The Nominating and Governance Committee regularly evaluates the composition of the Board and succession plans. The Committee considers the needs of the Board and the Company in light of the overall composition of the Board with a view of achieving a balance of skills, experience and attributes that would contribute to the Board’s overall effectiveness and oversight of management. In addition, an evaluation of the Board, its effectiveness and its needs is part of the Board’s annual self-evaluation process.

Board Diversity

The Corporate Governance Guidelines and the Nominating and Governance Committee charter identify a number of factors, including diversity, that the Nominating and Governance Committee will consider when evaluating directors. The Nominating and Governance Committee interprets diversity broadly to mean a variety of opinions, perspectives, personal and professional experiences and backgrounds, such as international and multicultural experience and understanding, as well as other differentiating characteristics, including race, ethnicity and gender. We believe that our Board's current diverse mix ensures a strong, engaged set of directors who are empowered to oversee and strategically advise management.


A diverse Board with 35% of our non-employee director nominees self-identifying as women or people of color

22% Women

13% People of Color1

63 Median Age

(1) One director chose not to disclose race or ethnicity.

Policy on Simultaneous Service on Boards

We value the experience directors bring from other boards on which they serve, but recognize that those boards may also present demands on a director’s time and availability. Accordingly, our Corporate Governance Guidelines limit a director's service on other public company boards as follows:

•Our CEO may not serve on more than one other board of directors of a public company; and

•Directors may not serve on more than five boards of directors of public companies, inclusive of our Board.

Directors are required to inform the Nominating and Governance Committee when they join another board so the Committee may consider whether the director's new commitment presents a conflict, gives rise to other legal issues, or otherwise negatively affects the interests of the Company. The Chairman of the Board and the Chair of the Nominating and Governance Committee may waive this policy if it is determined that simultaneous service on such additional board of directors will not present undue demands on a director’s time and availability for service on our Board.

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Director Resignation

The Board generally will not nominate a non-management director for election at an annual meeting if that person has reached age 75.

In accordance with our By‑Laws and Corporate Governance Guidelines, each director has submitted, or upon his or her nomination will submit, a contingent resignation to the Chair of the Nominating and Governance Committee. The resignation will become effective only if the director fails to receive a sufficient number of votes for election or re-election and the Board accepts the resignation. In the event of a contested director election, a plurality voting standard will apply.

Board Meetings and Annual Meeting Attendance

Our Board met seven times in 2021. In 2021, each director nominee attended over 94% of the meetings of the Board and Committees on which he or she served during the applicable period of service. Director attendance at annual meetings of stockholders is encouraged. Each director nominee then in office attended the 2021 annual meeting of stockholders.

Director Stock Ownership Guidelines

Our independent directors are required to meet certain stock ownership guidelines. We believe this further aligns directors’ interests with those of our stockholders. Under these guidelines, the independent directors are expected to acquire and hold a number of shares of our common stock equivalent to five times their base annual cash retainer, currently $400,000. Directors must retain at least 50% of net, after tax shares received upon the vesting of their equity awards until they achieve compliance with the stock ownership guidelines.

Corporate Governance Guidelines

We have adopted Corporate Governance Guidelines that establish a common set of expectations to assist the Board and Committees in performing their duties. The Corporate Governance Guidelines includes policies regarding director independence, the retirement age of directors, simultaneous service on other boards and committees of others boards, continuing education of directors and substantial changes relating to a director’s affiliation, position of principal employment or other board membership. Among other things, the Corporate Governance Guidelines establish responsibilities for meeting preparation and participation, and the evaluation of our financial performance and strategic planning.

Code of Ethics

We have adopted a written Code of Ethics, which requires all employees, officers and directors to avoid conflicts of interests, and a written Directors’ Code of Business Conduct and Ethics (the “Directors’ Code”) applicable to the Board. Our Code of Ethics and our Directors’ Code are available under the Investor Relations section of our website at http://ir.hercrentals.com. We intend to include on our website information about any amendments to, or waivers from, a provision of the Code of Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer or controller in accordance with SEC rules.

Stockholder Communications with the Board

Stockholders and other interested parties who wish to contact any of our directors or any group of directors may send written correspondence to: Herc Holdings Inc., 27500 Riverview Center Blvd., Bonita Springs, Florida 34134, Attention: Corporate Secretary.

Communications addressed to directors that discuss business or other matters relevant to the activities of our Board will be preliminarily reviewed by the office of the Corporate Secretary. Depending upon the nature of the communication and to whom it is directed, the Corporate Secretary will: (a) forward the communication, either in summary form or a copy of the communication, to the appropriate director or directors; (b) forward the communication to the relevant department within the Company; or (c) attempt to handle the matter directly (for example, a communication dealing with a share ownership matter).

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PROPOSAL 2: Advisory Vote To Approve Executive Compensation

We are offering you a non-binding, advisory vote to approve the compensation of our named executive officers (“NEOs”).

As detailed in the Compensation Discussion and Analysis, we have designed our compensation programs, among other things, to:

•Properly incentivize our NEOs to accomplish our short- and long-term objectives;

•Be in line with similar pay practices and overall compensation levels at other, similarly-situated companies;

•Reward our NEOs for overall Company performance and their individual performance; and

•Attract and retain our NEOs.

Accordingly, you may cast an advisory vote on the following resolution at the 2022 annual meeting:

“RESOLVED, that the compensation paid to the named executive officers as disclosed in the Compensation Discussion and Analysis, Summary Compensation Table and related tabular and narrative disclosures in this proxy statement is hereby APPROVED.”

Effect of Proposal

The effect of this vote is advisory only and non-binding. The Board and Compensation Committee will consider the results of the vote in making future decisions regarding our NEOs’ compensation. The Board values the opinions of our stockholders and is committed to considering their opinions in making decisions.

The Board recommends a vote FOR approval, by a non-binding
advisory vote, of the named executive officers’ compensation.

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COMPENSATION DISCUSSION AND ANALYSIS

Introduction

The Compensation Committee believes our compensation philosophy and executive compensation program should align with our business strategy and objectives and our business purpose. We believe that our pay-for-performance driven executive compensation program links our executive officer compensation with delivering results that support our business strategy and objectives.

Our named executive officers (“NEOs”) for 2021 are:

•Lawrence H. Silber, our Chief Executive Officer (“CEO”) and President;

•Mark H. Irion, our Chief Financial Officer (“CFO”);

•Aaron D. Birnbaum, our Chief Operating Officer (“COO”);

•Tamir Peres, our Chief Information Officer; and

•Christian J. Cunningham, our Chief Human Resources Officer.

Executive Summary

Herc continued to deliver strong financial and operational results in 2021. Despite the economic uncertainty created by 2020, we began 2021 optimistic that the equipment rental market would return to a more normalized environment. Through our focus on outstanding operational execution and execution of our strategic initiatives, we were able to deliver a record year for our stockholders. In addition, in September 2021, we announced a new capital allocation plan as well as new strategic initiatives to accelerate our rate of growth in both rental revenue and in adjusted EBITDA.

In establishing the 2021 executive compensation plan, the Compensation Committee adopted goals to focus and incentivize management to recover from the challenges of 2020 and to continue to deliver growth and create stockholder value. In particular, the Compensation Committee adopted rental earnings before interest, taxes, depreciation and amortization margin (“REBITDA Margin”) as a second metric for our performance share unit awards (“PSUs”). REBITDA Margin is a key metric used by management to evaluate our core business. Our PSU metrics are now average return on invested capital (“Average ROIC”), weighted 60%, and REBITDA Margin, weighted 40%. To further incentivize management's focus on recovery and achieving profitable growth, the Compensation Committee established a maximum performance goal of 400% for REBITDA Margin for the 2021 to 2023 performance period. The Compensation Committee has reduced the maximum REBITDA Margin performance goal to 200% for future performance periods.

In 2021, we delivered record adjusted EBITDA, equipment rental revenue growth and return on revenue earning equipment as well as strong free cash flow. Based on this performance, the Compensation Committee certified achievement of 159.2% financial performance score and a total Executive Incentive Compensation Plan (“EICP”) payout of 179.2% of target.

In 2019, the Compensation Committee granted PSUs for the 2019 to 2021 performance period (the “2019 PSUs”). The 2019 PSUs were significantly impacted by the economic crisis in 2020. However, the Compensation Committee determined not to exercise discretion to reflect the impact of the economic crisis. Due to our strong performance in 2021, the Compensation Committee certified actual performance of 94% for the 2019 to 2021 performance period.

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Executive Compensation Practices

The Compensation Committee has developed our compensation philosophy and our executive compensation program to closely align with our business purpose, including our commitment to stockholder value creation, which is articulated in our Vision, Mission and Values:

We believe our compensation structure for executives demonstrates our strong commitment to linking compensation to Company performance, strategy and business purpose. The Compensation Committee reviews on an ongoing basis our executive compensation program to evaluate whether it supports our executive compensation philosophy and objectives and is aligned with our business purpose, including the creation of stockholder value. In 2021, stockholders overwhelmingly approved our advisory executive compensation proposal with approximately 96% of the votes cast in favor. In light of stockholders’ support, our 2021 executive compensation program remained largely unchanged from 2020, other than the addition of REBITDA Margin as an additional metric for our PSUs.

The Compensation Committee believes that as we continue to advance our long-term strategy, it is important to have compensation programs aligned with our strategy that can be clearly understood and fully transparent to the participants and stockholders. We believe our executive compensation program continues to align well with market practices within our compensation peer group and provides a strong link between performance achieved and compensation delivered.

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As illustrated in the charts below, the mix of total target compensation granted in 2021 to our NEOs was heavily weighted towards performance-based and long-term incentive compensation, with long-term incentive awards making up 43.9% of total target compensation for our NEOs in aggregate.

Our executive compensation practices include the following, each of which the Compensation Committee believes reinforces our executive compensation objectives:


Our Executive Compensation Practices
ü			Significant percentage of target total compensation is performance based
ü			Long-term objectives designed to be aligned with the creation of stockholder value
ü			Market comparison of executive compensation against an industry and size appropriate peer group
ü			Use of an independent compensation consultant reporting directly to the Compensation Committee
ü			Double-trigger vesting for equity awards in the event of a change in control
ü			Stock ownership guidelines
ü			Clawback policy
ü			Annual say-on-pay vote

û			We do not have tax gross-ups
û			We do not have excessive severance benefits
û			We do not pay dividends on unearned or unvested awards
û			We do not grant equity awards to take advantage of information that may enhance their value to recipients
û			We do not allow repricing of underwater stock options without stockholder approval
û			We do not allow hedging, short sales or pledging of our securities

Executive Compensation Program – Decision-Making Process

Compensation Philosophy and the Role of the Compensation Committee

The Compensation Committee reviews and establishes the executive compensation program for our senior executives, including the NEOs. The Compensation Committee is committed to creating incentives for our senior executives that reward them for the Company’s, as well as their individual, performance. The executive compensation philosophy is based on guiding principles:

•The compensation program should be aligned with our financial performance: The Compensation Committee believes that creating goals that are aligned with our financial performance will focus executives on the long-term interests of our stockholders.

•The compensation design should be simple, transparent and clearly articulated to participants and our stockholders: The Compensation Committee believes that our executive compensation program should be clear (i) to participants in order to motivate achievement of business goals that we believe support the long-term success

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of the Company and (ii) to our stockholders who can assess whether the program supports our long-term performance.

•The compensation program should provide short- and long-term components to drive performance over the long run: Long-term results are important to our stockholders and the Compensation Committee believes that a compensation program that rewards annual and multi-year results provides a framework for superior long-term performance.

•The compensation program should be competitive and market-based to attract and retain senior executives: The Compensation Committee believes our executive compensation program should provide compensation at a level and using a combination of incentives that will allow us to attract, retain and reward talented individuals at every position.

•The compensation program should responsibly balance incentives with prudent risk management: The Compensation Committee believes that responsible use of different types of incentives with appropriate goals and caps will create and foster a culture of growth that is sustainable and appropriate for us.

Role of the Compensation Consultant

In 2021, Meridian provided executive compensation consulting services to the Compensation Committee from January to August and FW Cook provided executive compensation consulting services beginning in August. The compensation consultants are retained by and report directly to the Compensation Committee. FW Cook and Meridian are prohibited from performing any services for management outside of services needed in connection with advising the Compensation Committee. The Compensation Committee assessed FW Cook's and Meridian’s independence and concluded that both of the compensation consultants' work for the Compensation Committee does not raise any conflict of interest.

Role of the CEO

Our CEO provides input to the Compensation Committee on topics related to business and executive officer performance. As part of this process, our CEO reviews and makes observations regarding performance and provides additional data and detail for the Compensation Committee to consider regarding the overall compensation program and with respect to executive compensation decisions. While our CEO provides a perspective on Company performance as well as the performance of our other senior executives, the Compensation Committee makes final determinations regarding compensation.

Competitive Market Review

A key objective of our executive compensation program is to provide competitive and market-based compensation to attract and retain executive officers. For 2021, the Compensation Committee considered market pay practices when setting executive compensation to assess the overall competitiveness and reasonableness of our executive compensation program. The Committee, however, did not target the specific compensation elements or total compensation against the market data. The Compensation Committee believes that compensation decisions are complex and require a deliberate review of a number of factors, including Company and individual performance, the executive’s experience, including number of years in the role, the scope of the role, criticality of the role to the Company, internal equity, peer compensation levels and compensation received from prior employers.

The Compensation Committee believes that our peer group should reflect the markets in which we compete for business and executive talent. Accordingly, our peer group includes equipment rental and leasing companies and distributors whose primary market is North America and whose revenue ranges from approximately $590 million to $9.2 billion. The median revenue, market capitalization and total assets of this peer group was $2.0 billion, $4.0 billion and $3.7 billion, respectively. The peer group used for evaluating 2021 compensation decisions consisted of the companies below, which is the same peer group that was used for evaluating 2020 compensation decisions.


Aggreko plc	H&E Equipment Services	Triton International Ltd.
Applied Industrial Tech Inc.	KAR Auction Services Inc.	United Rentals, Inc.
Ashtead Group plc	McGrath Rentcorp	Watsco Inc.
Beacon Roofing Supply, Inc.	NOW Inc.	WillScot Mobile Mini Holdings Corp.
Fastenal Company	Pool Corp.
GATX Corp.	Ritchie Bros Auctioneers Inc.

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Elements of Executive Compensation Program

Principal Elements of the 2021 Executive Compensation Program

Element

Type

How and Why We Pay It

Salary

Fixed Cash

•Paid throughout the year to attract and retain senior executives

•Sets the baseline for bonus and certain retirement programs

Annual Cash Bonus

Performance-Based Cash

•Paid annually in cash to reward achievement of goals

•Designed to align senior executives’ interests with our stockholders’ interests, reinforce key strategic initiatives and encourage superior individual performance

Long-Term Equity

PSUs

RSUs

•Granted annually

•Designed to align senior executives’ interests with stockholders’ interests and drive key performance goals

We place a significant emphasis on performance-based compensation (short- and long-term) so that a substantial percentage of each NEO’s total direct target compensation is contingent on the successful achievement of our strategic goals, in accordance with our compensation philosophy. In 2021, the CEO's target compensation was comprised of 78.9% at risk compensation and the average of all other NEO's target compensation was comprised of 66.4% at risk compensation.

We also based a significant portion of each NEO's target compensation on Company stock to further align our executives with stockholders. In 2021, 57.8% of the CEO's target compensation was equity based and an average of 40.4% of all other NEO's target compensation was equity based. If the share price decreases, so will the value of the equity award realized compared to the original grant value. When the stock price increases, the stockholder is rewarded, and the value of the long-term grant reflects the higher stock price.

Annual Cash Compensation

Salary

The Compensation Committee establishes NEO salaries and determines any NEO salary increases after reviewing individual performance, conducting internal compensation comparisons and reviewing competitive compensation information. It also takes into account other factors such as an individual’s experience, number of years in the role, total mix and scope of job responsibilities versus market comparables, internal equity and time elapsed since last increase. In 2021, the Compensation Committee approved salary increases for all NEOs based on their performance and comparison of market data of similar roles within the Company's peer group.


	2021 Salary	2020 Salary	Increase
Name	($)	($)	(%)
Mr. Silber	950,000	925,000	2.7
Mr. Irion	500,000	475,000	5.3
Mr. Birnbaum	475,000	450,000	5.6
Mr. Peres	440,000	430,000	2.3
Mr. Cunningham	450,000	420,000	7.1

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2021 Annual Cash Incentive Award Program

Our annual cash incentive award program is designed to motivate and reward executive officers for achieving short-term performance objectives. The EICP provides participants, including the NEOs, with annual cash incentive award opportunities for the achievement of pre-established performance goals that were designed by the Compensation Committee to support long-term stockholder value creation. Individual EICP payouts are calculated as follows:

Base Salary

Target Percentage

Company Performance Score

Individual Performance Score

EICP Award

The EICP provides target payout opportunities that are expressed as a percentage of a participant’s base salary, with potential payouts ranging from 0% to 200% of target.

Target Percentage

The Compensation Committee generally considers the experience, responsibilities, internal pay equity, competitive market data and historical performance of each NEO when determining target awards. For 2021, the Compensation Committee approved changes in bonus targets for Messrs. Irion and Birnbaum based on their performance and market data comparisons of similar roles in the peer group companies.


	Target Award as a % of 2021 Salary	Target Award
Named Executive Officer	(%)	($)
Mr. Silber	100	950,000
Mr. Irion(1)	80	400,000
Mr. Birnbaum(1)	80	380,000
Mr. Peres	75	330,000
Mr. Cunningham	75	337,500

(1) Mr. Irion and Mr. Birnbaum's 2020 target award as a percent of salary was 75%.

Company Performance Score

The Company Performance Score is a combination of financial metrics and management business objectives (“MBOs”) selected by the Compensation Committee. For 2021, the financial metrics represent 80% of the target award and the MBOs represent 20% of the target award.

Financial Metrics

The financial metrics are broadly aligned with key elements of our annual business plan. Development of our annual business plan is a robust process that is reviewed and approved by the Board of Directors. The Compensation Committee selected the financial metrics as they are viewed as core drivers of our performance and long-term stockholder value creation.

In February 2021, the Committee established the following financial metrics and weightings:


	Adjusted EBITDA(1) (in millions)			Return on Revenue Earning Equipment(1)		Equipment Rental Revenue Growth		Free Cash Flow (in millions)
Threshold(2)	$	698.2		17.7	%	4.9	%	$	180.5
Target	$	750.8		18.7	%	8.1	%	$	200.6
Maximum(3)	$	803.4		19.7	%	10.5	%	$	220.7
Weighting	50		%	30	%	10	%	10		%

(1) Adjusted EBITDA and Return on Revenue Earning Equipment are non-GAAP financial measures. Refer to Appendix A for a reconciliation to the most directly comparable GAAP measures.

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(2) Any performance results that are below the threshold receive a 0% multiplier. Linear interpolation is used to determine level of achievement for results that are between the threshold and target performance levels.

(3) Performance results that equal or exceed the maximum performance level are capped at the 200% payout.

Management Business Objectives

The MBOs are strategic objectives selected by the Compensation Committee that are aligned with our business purpose and are considered important to our long-term financial and operational performance and the health and safety of our employees. The MBOs selected by the Compensation Committee for 2021 were: (i) Safety—targets to exceed prior-year performance and industry average; (ii) Finance—efficiencies and governance; (iii) ESG—improve external reporting and establish foundation for long-term improvement; (iv) Information Technology—modernization and transformation of our information technology systems; and (v) People and Culture—reduce turnover, increase internal promotions rate, and increase engagement.

The Compensation Committee did not assign relative weights to the individual MBO factors and considers the aggregate performance in determining the level of achievement. The Compensation Committee has the discretion to remove an MBO in assessing performance. The Compensation Committee did not exercise such discretion for 2021.

Actual Company Performance vs. Target Goals

The table below shows our actual performance compared to the targets pre-established by the Compensation Committee:


($ in millions)	Target			Actual			Performance a % of Target(1)			Weighted Score
Adjusted EBITDA	$	750.8		$	894.7		200.0	%	〉	159.2%
Return on Revenue Earning Equipment	18.7		%	23.2		%	200.0	%
Equipment Rental Revenue Growth	8.1		%	23.8		%	200.0	%
Free Cash Flow	$	200.6		$	213.7		190.4	%
(1) Performance is capped at 200%
	Target						Performance as % of Target			Weighted Score
MBOs	(1) Safety; (2) Finance; (3) ESG; (4) Information Technology; and (5) People and Culture						100.0	%	〉	20.0%
Company Performance Score										179.2%

Individual Performance Score

In determining each NEO's EICP award, the Compensation Committee considers individual performance for the year. The NEO's individual performance score may range from 0-150% (the “Individual Performance Score”). In evaluating the appropriate Individual Performance Score, the Compensation Committee considered various qualitative factors, such as the NEO’s:

•performance in his or her principal area of responsibility;

•degree of success in leading the Company to meet its strategic objectives; and

•championing of the values and competencies that are important to our success.

The Compensation Committee did not assign relative weights to any individual factors. Based on its assessment of individual performance and taking into account the recommendations of the CEO for each of the other NEOs, the Compensation Committee approved Individual Performance Scores of 111% for each NEO to reflect the significant team-based efforts of each NEO to achieving record results, resulting in an overall EICP payout of 198.9%.

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Long‑Term Equity Incentives

Long-term equity incentive compensation comprises a significant portion of the total compensation paid to our senior executives and is deemed by the Compensation Committee to be critical to aligning our NEO’s compensation with our business purpose, including long-term stockholder value creation. Consistent with our compensation philosophy, our equity incentive program is more heavily weighted toward performance based awards. PSUs comprise 60% of the annual equity award and restricted stock units (“RSUs”) comprise 40% of the award.

Summary of 2021 Annual Award Structure

In February 2021, the Compensation Committee awarded long-term equity incentive compensation under the Herc Holdings Inc. 2018 Omnibus Incentive Plan (as amended to date, the “2018 Omnibus Plan”). The Compensation Committee has the flexibility to make equity awards based on our common stock, including time- and performance-based awards of RSUs, PSUs, stock options, stock appreciation rights, restricted stock and deferred stock units.

In determining the target value of the awards, the Compensation Committee considered the competitive pay practices at companies within the peer group and individual performance. For PSUs, the target vesting level was designed to be achievable with significant effort and strong Company performance, while vesting at the maximum level was designed to be difficult to achieve.

For 2021, the Comm

SEC Form DEF 14A filed by Herc Holdings Inc.