James R. Potts
About James R. Potts
Executive Vice President, General Counsel and Secretary of BBSI; age 57; joined in September 2020 after 12 years as Shareholder and Chair of Insurance, Corporate and Regulatory Practice at Cozen O’Connor (JD, Georgetown; BSBA, University of Florida) . During his tenure, BBSI’s total shareholder return rose from 77 in 2020 to 207 in 2024, while net income increased from $33.8M to $53.0M and gross billings from $5.9B to $8.3B, underscoring strong operational performance and equity-linked compensation alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cozen O’Connor | Shareholder; Chair of Insurance, Corporate & Regulatory Practice | 12 years through 2020 | Led insurance/regulatory practice; deep expertise in corporate and regulatory matters supporting BBSI’s risk and compliance posture |
External Roles
No external public company directorships disclosed for Potts .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $336,019 | $350,962 | $369,615 |
| Base salary rate (effective date) | — | — | $375,000 (effective Apr 1, 2024) |
| Target annual bonus (% of base) | — | — | 80% of base salary |
| Discretionary bonus ($) | $68,000 | $71,000 | $60,000 |
Notes:
- Committee approved 2024 executive base salaries in Feb 2024; Potts increased 6% to $375,000 effective Apr 1, 2024 .
- Target cash incentive split: 80% corporate metrics, 20% individual performance .
Performance Compensation
Annual Cash Incentive Plan – 2024 Corporate Metrics and Payouts
| Metric | Weighting | Target | Actual | Payout % |
|---|---|---|---|---|
| Gross billings growth | Equally weighted within corporate goals | 8.20% | 7.92% | 91% |
| Net income | Equally weighted within corporate goals | $41,770,868 | $52,993,307 | 200% |
| Gross margin as % of gross billings | Equally weighted within corporate goals | 2.91% | 3.04% | 167% |
| Worksite employee adds | Equally weighted within corporate goals | 20,636 | 19,435 | 71% |
| Total corporate portion weight | 80% of total bonus | — | — | — |
Potts’ 2024 performance-based cash payout (Non-Equity Incentive Plan Compensation): $317,624 . Discretionary bonus paid at full target: $60,000 .
Long-Term Equity Incentives
| Award Type | Grant Date | Metric/Terms | Target | Threshold | Max | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|---|
| PSUs (2024 cycle) | 3/13/2024 | 3-year performance ending 12/31/2026; 50% cumulative gross billings, 50% net income before taxes; 2.5% adjustment per 1% miss/beat; 80–140% band; max 200% | 5,647 shrs | 2,823 shrs | 11,293 shrs | $84,395 |
| RSUs (annual) | 7/1/2024 | 4-year ratable vesting; service-based | 9,193 shrs | — | — | $299,968 |
| RSUs (NDCP match) | 1/1/2024 | 5-year cliff vest; NDCP match 35% of deferrals; annual max $75,000 | 84 shrs | — | — | $2,432 |
| RSUs (NDCP match) | 7/1/2024 | 5-year cliff vest; NDCP match 35% of deferrals; annual max $75,000 | 633 shrs | — | — | $20,655 |
| PSU settlement (2012-style awards vested) | 2/24/2025 | Payout from 2022 grant based on 3-year goals ended 12/31/2024; overall ~122.2% of target | 11,051 shrs issued | — | — | — |
No stock options granted to Potts in 2024; Potts had no outstanding options at 12/31/2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (4/7/2025) | 44,926 shares; <1% of outstanding |
| Anti-hedging/pledging | Hedging prohibited; pledging prohibited without advance approval; no pledged shares by execs/directors as of proxy date |
| Stock ownership guidelines | Executives must hold ≥3x base salary; compliance or on-track status affirmed for all executive officers |
| Vested vs unvested (as of 12/31/2024) | See vesting schedule below; unvested RSUs/PSUs detailed in award table |
| 2024 vesting activity | 27,216 shares vested; value realized $863,453 |
Potts RSU Vesting Schedule (as of 12/31/2024)
| Shares | Vesting Type | First Vest Date | Notes |
|---|---|---|---|
| 3,544 | Full vest | 7/1/2025 | Category (3) |
| 7,396 | 2 annual installments | 7/1/2025 | Category (10) |
| 9,768 | 3 annual installments | 7/1/2025 | Category (11) |
| 9,193 | 4 annual installments | 7/1/2025 | Category (12) |
| 428 | Full vest | 7/1/2026 | Category (4) |
| 532 | Full vest | 1/1/2027 | Category (5) |
| 2,256 | Full vest | 7/1/2027 | Category (6) |
| 220 | Full vest | 1/1/2028 | Category (7) |
| 912 | Full vest | 7/1/2028 | Category (8) |
| 84 | Full vest | 1/1/2029 | Category (9) |
| 633 | Full vest | 7/1/2029 | Category (13) |
PSU Overhang (threshold amounts shown)
| Cycle | Threshold Shares | Performance Period | Notes |
|---|---|---|---|
| 2022 grant | 4,522 | 3 years ended 12/31/2024 | Threshold depiction; actual earned settled in Feb 2025 (11,051 shrs issued) |
| 2023 grant | 3,170 | 3 years ending 12/31/2025 | Threshold depiction |
| 2024 grant | 2,823 | 3 years ending 12/31/2026 | Threshold depiction |
Employment Terms
| Provision | Key Terms (Potts) |
|---|---|
| Employment Agreement | Effective Sept 16, 2020; base agreements end July 1, 2025 with automatic one-year renewals unless 90+ days nonrenewal notice |
| Non-compete / Non-solicit | 12 months post-termination (Potts) |
| Severance (no CoC) | Lump sum cash equal to base salary + target bonus; RSUs scheduled to vest within 1 year accelerate; as of 12/31/2024 estimate: $675,000 cash + $555,945 RSU acceleration = $1,230,945 total |
| Change-in-control | Window: 3 months before to 24 months after a CoC; cash severance 3x (base + target bonus); all stock options and RSUs accelerate upon CoC regardless of termination; 280G cutback (no tax gross-ups) ; Potts CoC estimate as of 12/31/2024: $2,025,000 cash + $1,518,923 equity = $3,543,923 total |
| Clawback | Nasdaq-compliant recovery of incentive comp upon accounting restatements; 3-year lookback |
| Death/Disability | Lump-sum death benefit $1,000,000; all RSUs/options vest upon death or disability |
| Insider trading | No 10b5-1 or non-10b5-1 plans entered during 2024; anti-hedging/pledging policy in effect |
Nonqualified Deferred Compensation (NDCP)
| Item | 2024 Amount |
|---|---|
| Executive contributions | $69,027 |
| Company contributions | — (none) |
| Aggregate earnings | $15,667 |
| Aggregate balance (12/31/2024) | $404,669 |
| NDCP RSU matching | RSUs awarded twice yearly equal to 35% of deferrals, up to $75,000/year; 5-year cliff vest; accelerated on CoC/death/disability |
Multi-Year Compensation Summary (Total Direct Pay)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $336,019 | $350,962 | $369,615 |
| Discretionary Bonus ($) | $68,000 | $71,000 | $60,000 |
| Stock Awards ($) | $458,612 | $379,927 | $407,464 |
| Stock Options ($) | $— | $— | $— |
| Non-Equity Incentive ($) | $397,464 | $253,756 | $317,624 |
| All Other Compensation ($) | $12,200 | $13,200 | $13,800 |
| Total Compensation ($) | $1,272,295 | $1,068,845 | $1,168,503 |
Compensation Structure Analysis
- Mix of pay emphasizes at-risk compensation: annual cash incentives driven 80% by objective corporate metrics and 20% individual goals; long-term equity via RSUs and PSUs with 3-year financial targets (gross billings and net income before taxes), creating pay-for-performance alignment .
- Ownership guidelines require executives to hold ≥3x salary; company states executives have met or are on track; coupled with anti-hedging/pledging, alignment is reinforced .
- Peer benchmarking: Mercer advises; 2024 total direct comp positioned at or slightly below median for similarly sized companies; peer group adjusted mid-2024 for 2025 decisions .
- Say-on-pay support: >93% approval in 2024 indicates shareholder endorsement of structure and metrics .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; none pledged as of proxy date .
- Clawback policy updated compliant with Nasdaq Rule 10D-1 .
- Equity acceleration upon change-in-control (single trigger for RSUs/options) may be shareholder-sensitive; cash severance requires termination (double trigger), mitigated by 280G cutback (no excise tax gross-up) .
- Section 16(a) compliance timely in 2024 except one late Form 4 by a director; no indication of Potts issues .
Equity Ownership & Vesting Pressure Signals
- Significant RSU tranches begin vesting July 1, 2025 (9,193 shrs 4-year; 7,396 shrs 2-year; 9,768 shrs 3-year; 3,544 shrs full vest) which may create tax-related sell pressure around vesting dates absent 10b5-1 plans (none entered in 2024) .
- PSU settlement in Feb 2025 delivered 11,051 shares to Potts, increasing float potential depending on tax withholding/sale practices .
Employment Terms
| Term | Summary |
|---|---|
| Contract term & renewal | Through July 1, 2025; auto-renew annually unless 90-day notice |
| Severance (no CoC) | Base + target bonus; partial RSU acceleration; $1.23M estimated at 12/31/2024 |
| Change-in-control economics | 3x cash; full equity acceleration; $3.54M estimated at 12/31/2024; cutback to avoid 280G excise |
| Non-compete/non-solicit | 12 months post-employment |
| Death benefit | $1,000,000 lump sum to beneficiary |
| Clawback & trading policies | Nasdaq-compliant clawback; anti-hedging/pledging; no trading plans in 2024 |
Investment Implications
- Strong pay-for-performance linkage with measurable corporate metrics and 3-year PSUs tied to gross billings and net income suggests alignment with shareholder outcomes; ownership guidelines and anti-hedging/pledging further reduce misalignment risk .
- Near-term selling pressure risk around RSU vesting dates (starting July 1 each year) given sizeable tranches; monitor Form 4s for tax-withholding dispositions and discretionary sales; no 10b5-1 plans entered in 2024 .
- Retention risk appears contained: severance and CoC protections plus NDCP RSU matching create retention hooks; however, single-trigger equity acceleration upon CoC could incentivize deal optionality; 280G cutback eliminates tax gross-up risk .
- Performance track record during Potts’ tenure shows TSR and earnings growth, reinforcing execution credibility; continued emphasis on gross billings, margins, and WSE adds in incentives provides clear levers to monitor for future payouts .