Barry C. McCarthy
DELUXEAbout Barry C. McCarthy
Barry C. McCarthy is President and CEO of Deluxe Corporation and the sole management member on the board, serving as a director since 2018; he is 61 and not independent. He previously led First Data’s Network and Security Solutions segment (a $1.5B publicly reported segment) as EVP from 2014–2018 and held senior executive roles there for 14 years prior, bringing deep payments, product, sales, marketing, and technology experience to Deluxe’s transformation agenda . Under his leadership, the value of an initial $100 investment in DLX was $58.0 in 2024 vs $61.2 in 2020, while adjusted EBITDA rose from $364.5M (2020) to $412.1M (2024) and net income improved from $5.3M to $52.9M over the same period . He currently serves on no other public company boards .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| First Data Corporation (now Fiserv) | EVP & Head, Network and Security Solutions | 2014–2018 | Led a $1.5B publicly reported segment; experience in corporate transformations and tech-enabled solutions . |
| First Data Corporation | Various senior executive positions | Prior 14 years | Product development, sales, payments, marketing, technology; extensive fintech leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | DLX proxy lists zero other current public company boards for McCarthy . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 918,750 | 943,750 | 950,000 |
| AIP Target (% of Base) | — | 120% | 120% |
| Non-Equity Incentive (AIP) Paid ($) | 4,573,000 | 1,228,763 | 804,840 |
| Stock Awards ($) | 4,871,517 | 5,329,797 | 5,308,392 |
| Option Awards ($) | — | — | — |
| All Other Compensation ($) | 12,218 | 34,409 | 61,826 |
| Total ($) | 10,375,485 | 7,536,719 | 7,125,058 |
- CEO pay ratio was 95.3x for 2024 (CEO total compensation $7,125,058; median employee $74,965; CEO benefits $21,811 included separately) .
Performance Compensation
Annual Incentive Plan (AIP) Design and Targets
| Metric | Weight | Threshold | Target | Maximum | Result |
|---|---|---|---|---|---|
| Enterprise Comparable Adjusted Revenue | 30% | ≥92.5% of AOP | 100% of AOP | ≥110% of AOP | 79% (vs target) |
| Enterprise Comparable Adjusted EBITDA | 30% | ≥92% of AOP | 100% of AOP | ≥110% of AOP | 80% (vs target) |
| Enterprise Comparable Adjusted Diluted EPS | 20% | ≥87% of AOP | 100% of AOP | ≥115% of AOP | 84% (vs target) |
| Strategic Initiatives (blended enterprise) | 20% | Various segment thresholds | Targets by segment | Max by segment | 77% payout (enterprise) |
| Component | Eligible Base ($) | Target % | Target ($) | Blended Calculated Payout | Committee Adjustment | Actual Payout |
|---|---|---|---|---|---|---|
| AIP (2024 – McCarthy) | 950,000 | 120% | 1,140,000 | 79.8% (enterprise mix) | (9.2)% | 70.6% = $804,840 |
- AIP metrics chosen to balance revenue growth, profitability (EBITDA), EPS, and execution against strategic initiatives; non-GAAP comparable measures are used with GAAP reconciliations in Annex A .
Long-Term Incentives (LTI) Structure and Grants
| Grant Type | Vesting | Weight | Performance Metrics | 2024 CEO Target Grants |
|---|---|---|---|---|
| PSUs | 3-year cliff | 50% | 50% three-year cumulative revenue; 50% three-year cumulative free cash flow; final payouts modified by relative TSR (+/−25%) | 68,922 PSUs total (34,461 CR + 34,461 CFCF) at target; fair value $1,279,192 each PSU type |
| RSUs | 3-year ratable (equal thirds) | 50% | Time-based retention; dividend equivalents accrue and pay on vest | 137,845 RSUs; fair value $2,750,008 |
- 2024 target LTI mix for McCarthy: $5.5M total, 50% RSUs / 50% PSUs, unchanged vs 2023 .
- 2025 PSUs return to traditional three-year dollar goals aligned to North Star, replacing annual fixed-rate growth targets used in 2024 .
- Stock vested in 2024: 99,626 RSUs ($2,029,828) and 33,518 PSUs ($670,695) for McCarthy .
Equity Ownership & Alignment
Beneficial Ownership and Breakdown (as of Feb 24, 2025)
| Category | Shares (#) | Percent of Class |
|---|---|---|
| Total beneficial ownership (McCarthy) | 1,249,784 | 2.7% |
| Included: Options exercisable or within 60 days | 667,772 | — |
| Included: RSUs | 316,164 | — |
Outstanding Equity Awards at FYE 2024 (selected CEO entries)
| Option Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 11/26/2018 | 235,018 | — | 48.92 | 11/26/2025 |
| 4/1/2019 | 128,205 | — | 44.69 | 4/1/2029 |
| 2/19/2020 | 200,382 | — | 39.11 | 2/19/2030 |
| 3/1/2021 | 78,125 | 26,042 | 41.27 | 3/1/2031 |
- As of 12/31/2024, all NEO options were out-of-the-money vs DLX closing price $22.59, so no acceleration value reported—reducing near-term exercise-driven selling pressure .
- PSUs outstanding (target) include performance periods 2022–2024, 2023–2025, 2024–2026; selected CEO entries: 27,579; 29,764; 35,166; 35,167; 34,461; 34,461 with associated market/payout values shown in proxy .
Alignment Policies
- Executive stock ownership guideline: CEO = 5x base salary; five years to attain; options excluded; unvested RSUs counted at 60%; all NEOs in compliance .
- Strict prohibitions on pledging, hypothecation, margin accounts, and hedging transactions (swaps, collars, prepaid forwards, short sales) for executives and directors .
- Updated clawback policy adopted Aug 15, 2023 to conform with Dodd-Frank requirements .
Employment Terms
| Scenario | Cash Severance | Benefits | Equity Treatment | Other |
|---|---|---|---|---|
| Without Cause / Good Reason | 12 months base salary, plus up to 12 additional months offset by other full-time employment; paid over 12 months | Up to 12 months health premium continuation | Options/next RSU tranche pro rata if >1 year; PSUs pro rata with payout at period end based on actuals; “Rule of 75” can fully accelerate RSUs upon Committee approval | Executive outplacement services; $25,000 in “Other Cash” in hypothetical calc |
| Change-in-Control termination (within 24 months) | 2x base salary + 100% AIP target, lump sum | Up to 12 months health premium continuation | If awards not assumed: full acceleration (PSUs at target); if assumed: double-trigger acceleration per award type; TSRA modifier remains applicable for PSUs | — |
Illustrative amounts as of 12/31/2024:
-
Change in control total: $16,665,134 (cash $4,180,000; RSUs $6,152,838; PSUs $6,291,518; benefits $40,778) .
-
Termination without cause total: $6,499,492 (cash $1,900,000; RSUs $1,377,334; PSUs $3,156,380; benefits $40,778; other cash $25,000) .
-
Severance conditioned on release of claims and compliance with contractual obligations; ongoing confidentiality, non-competition, non-solicitation provisions apply; competitive activity or solicitation can trigger forfeiture/repayment of equity gains; NEOs released from competitive activity and employee solicitation restrictions upon termination without cause .
Board Governance
- Board service: Director since 2018; Committees: none; Independence: not independent; sole management representative on the board .
- Independence safeguards: majority independent board; Audit & Finance, Compensation & Talent, and Corporate Governance committees composed entirely of independent directors per NYSE standards .
- Compensation & Talent Committee chair: Paul R. Garcia; led shareholder engagement following lower 2024 say-on-pay results .
Performance & Track Record
| Year | CEO SCT Total ($) | CEO Compensation Actually Paid (CAP) ($) | DLX TSR (Value of $100) | Peer TSR (Value of $100) | Net Income ($mm) | Adjusted EBITDA ($mm) |
|---|---|---|---|---|---|---|
| 2024 | 7,125,058 | 8,216,822 | 58.0 | 144.3 | 52.9 | 412.1 |
| 2023 | 7,536,719 | 8,979,508 | 52.1 | 123.6 | 26.2 | 417.1 |
| 2022 | 10,375,485 | 3,607,005 | 38.6 | 102.7 | 65.5 | 418.1 |
| 2021 | 7,822,945 | 8,028,794 | 69.3 | 143.0 | 62.8 | 407.8 |
| 2020 | 5,256,659 | (1,110,314) | 61.2 | 131.3 | 5.3 | 364.5 |
- Company notes CAP tracks TSR more closely than net income or adjusted EBITDA; adjusted EBITDA identified as the most important measure linking CAP to performance .
Say-on-Pay & Shareholder Feedback
- DLX acknowledged lower say-on-pay support in 2024 and responded with enhanced engagement and program changes, including PSU design adjustments for 2025 aligning with the long-range plan (North Star) .
- Committee philosophy emphasizes performance-based pay mix and alignment with shareholder value; CEO target compensation set around the 25th percentile of peer group as assessed by FW Cook .
Equity Plan and Grant Mechanics
- RSUs vest one-third annually over three years; PSUs vest after three-year performance periods with a relative TSR modifier; options vest ratably over four years .
- Equity plan change-in-control protections distinguish assumed vs. not assumed awards and apply double-trigger acceleration for assumed awards; PSUs pay based on actual performance when measurement concludes .
Investment Implications
- Pay-for-performance alignment: CEO AIP paid at 70.6% for 2024 on mixed financial results, with a committee downward adjustment to reinforce alignment; LTI split evenly between PSUs and RSUs with revenue, FCF, and relative TSR—metrics likely to sustain performance sensitivity over a 3-year horizon .
- Insider selling pressure: Large RSU awards vest over three years; strict ownership/retention requirements and anti-pledging/anti-hedging policies limit discretionary sell-downs; most options are out-of-the-money, reducing exercise-driven supply near-term .
- Ownership alignment: McCarthy beneficially owns ~2.7% of the company, including significant options and RSUs; CEO ownership guideline of 5x salary with compliance reported—strong skin-in-the-game posture .
- Retention and change-in-control economics: Double-trigger severance of 2x salary + target bonus and health benefits, plus equity acceleration depending on award assumption—competitive but not excessive; non-compete/non-solicit obligations and clawback enforcement help discipline outcomes .
- Governance: Dual role as CEO-director without committee seats, mitigated by majority-independent board and fully independent key committees; Compensation & Talent Committee leadership and engagement efforts post say-on-pay provide oversight stability .