Richard Hermanns
About Richard Hermanns
Richard F. Hermanns (age 61) is President, CEO, and Chairman of HireQuest, Inc. (HQI), serving on the board since 2019; he has nearly 30 years in staffing, previously CFO of Outsource International and AVP at NCNB (now Bank of America), with a BS in Economics/Finance (Barry University) and MBA in Finance (USC) . Under his leadership, HQI emphasizes franchise-driven growth and has pursued scale via M&A; Hermanns stated in June 2025 that acquiring TrueBlue could triple HQI’s size, with franchise conversion unlocking “hundreds of millions” in value . Stock performance (TSR) and profitability have been mixed amid industry headwinds: TSR on a $100 base fell from 159.04 (2022) to 156.33 (2023) and 74 (2024), while net income declined from $12.46M (2022) to $6.14M (2023) and $3.67M (2024) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| HireQuest, Inc. / Hire Quest, L.L.C. | CEO; Chairman (HQI) | CEO since 2002 (predecessors since 1991); Director since 2019 | Led franchise-model expansion across staffing; long-tenured industry operator . |
| Outsource International | Chief Financial Officer | n/a | Financial leadership at a prior staffing firm . |
| NCNB National Bank (now Bank of America) | Assistant Vice President | n/a | Banking/finance background supporting capital allocation acumen . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Hirequest Insurance Company | Chairman and President | Since 2010 | Insurance captive leadership aligned with core risk areas . |
| Hire Quest Financial, LLC | Chief Executive Officer | Since 2006 | Finance platform supporting network growth . |
| Bass Underwriters, Inc. | Majority co-owner (with Edward Jackson) | n/a | Insurance distribution scale and relationships; related-party oversight required . |
| Higher Quest Foundation | Founder | n/a | Philanthropy; no direct corporate impact . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 382,404 | 400,000 | 400,465 |
| Actual Cash Bonus (Non-Equity Incentive Plan) ($) | 1,174,341 | 948,385 | 48,651 |
| Stock Awards (Grant-date FV) ($) | 720,000 | – | – |
| Total ($) | 2,276,745 | 1,348,385 | 449,116 |
Notes:
- 2024 bonus reflects Pre-Tax Income Bonus and Sales Increase Bonus as defined in his employment agreement .
- Equity grants follow multi-year renewal cycles; 2022 included a large RS award; 2023–2024 had no new equity grants for the CEO .
Performance Compensation
| Incentive | Metric & Formula | Weighting | Target | Actual Payout FY 2023 | Actual Payout FY 2024 | Vesting |
|---|---|---|---|---|---|---|
| Pre-Tax Income Bonus | 0.5% of Company system-wide pre-tax income, adj. for extraordinary items | Formula-based | Not disclosed | Included in $948,385 total | Included in $48,651 total | Cash, annual |
| Sales Increase Bonus | 8x YoY % increase in System-Wide Sales × current base salary | Formula-based | Not disclosed | Included in $948,385 total | Included in $48,651 total | Cash, annual |
Additional features:
- Discretionary bonus possible at Compensation Committee’s discretion .
- Nasdaq-compliant clawback policy adopted December 2023 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 2,922,303 shares (20.9% of class) as of April 28, 2025 . |
| Vested vs Unvested | 2,904,913 held outright; 17,390 restricted/unvested as of 12/31/2024 . |
| Unvested Value | $246,242 at $14.16 close on 12/31/2024 . |
| Options | None outstanding (no vested or unvested options) . |
| Upcoming Vesting | Unvested RS vest between June 30, 2025 and June 30, 2027 . |
| Pledging/Hedging | Hedging, margin, and derivatives transactions prohibited; advance approval required for certain transactions . Company is unaware of any pledging by 5% holders or NEOs . |
| Exec Purchase Match | Company matches 20% of executive open-market share purchases with restricted stock (max $25k/yr value), vesting after 2 years, subject to ownership/continued employment conditions . |
Equity award grant and schedule:
- 50,000 restricted shares granted 9/1/2022; vest 50% on 9/1/2024, then 6.25% per quarter for eight quarters thereafter; accelerated vesting upon qualifying termination .
Employment Terms
| Term | Detail |
|---|---|
| Position & Term | CEO and President through August 31, 2025 (initial Term) . |
| Base Salary | $400,000 . |
| Annual Incentives | Pre-Tax Income Bonus and Sales Increase Bonus as described; discretionary bonus possible . |
| Equity | 50,000 RS (2019 Plan) with vesting schedule above . |
| Termination (w/o Cause or Good Reason) | 18 months base salary; pro-rated bonuses; reimbursement of expenses; medical benefits at executive’s expense; all equity restrictions lapse and fully vest . |
| Non-Renewal | Pro-rated bonuses; full vesting of equity . |
| Death/Disability | Pro-rated vesting; limited continuation benefits . |
| Change of Control | Agreement auto-extends 1 year upon CoC (50% threshold). If terminated during post-CoC renewal period: lump-sum 150% of base salary; full vesting of equity . |
Board Governance
- Roles: Chairman and CEO; board believes combined role is appropriate given ownership, experience, and independent oversight via an active independent Vice Chairman (R. Rimmy Malhotra) and fully independent committees .
- Independence: 5 of 6 directors independent; Hermanns is not independent .
- Committees (independent-only): Audit (Chair: Hagenbuch), Compensation (Chair: Olmstead), Nominating & Governance (Chair: Shanahan) . Hermanns serves on no board committees .
- Board/Committee attendance: Board met 6x in 2024; Audit 5x; Compensation 3x; Nominating/Gov 1x; all directors ≥75% attendance .
- Director compensation: Executive director compensation reported with NEOs; non-employee director pay plan described separately .
Board service history:
| Attribute | Value |
|---|---|
| Director since | 2019 |
| Chair | Yes |
| Committee roles | None (committees fully independent) |
| Independence | Not independent |
Dual-role implications:
- Combined Chair/CEO but mitigants include independent Vice Chairman authority (agenda review, presiding over sessions, liaison role) and independent-only committees .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total Shareholder Return (Value of $100) | 159.04 | 156.33 | 74 |
| Net Income ($) | 12,458,106 | 6,135,000 | 3,672,000 |
- Strategic initiatives: Hermanns reiterated in 2025 a continued push to acquire TrueBlue and convert to HQI’s franchise model, asserting it could triple company size and unlock incremental value .
- CFO transition: Steve Crane retiring May 31, 2025; David Hartley appointed CFO effective May 31, 2025; company described transition as planned to preserve continuity .
Say-on-Pay & Shareholder Votes (2025)
| Proposal | For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|---|
| Say-on-Pay (NEO compensation) | 10,746,313 | 8,811 | 5,853 | 2,011,326 |
- Frequency of Say-on-Pay: Stockholders supported “ONE YEAR” (10,295,333 votes) .
- Director elections: Hermanns re-elected (For: 10,701,166; Withheld: 59,811) .
Related-Party Transactions and Governance Oversight
- Worlds Franchisees (co-owned by Hermanns’ immediate family and Director Edward Jackson): Franchise royalties paid to HQI were $9.442M (2024), $9.577M (2023), $8.676M (2022). Select asset sales to Worlds Franchisees occurred in 2022 and 2024; consideration attributable to Hermanns’ family interests disclosed .
- Insurance brokerage (Jackson Insurance; Bass Underwriters co-owned by Hermanns and Jackson): Premiums/fees invoiced to HQI totaled ~$1.7M in 2024 and 2023, ~$336k in 2022; estimated commissions retained by Jackson Insurance ~$145k (2024), $189k (2023), $138k (2022). Bass retained ~$34k (2024), $23k (2023), $24k (2022); amounts accruing to Hermanns from Bass were ~$6.5k (2024), $4.4k (2023), $4.6k (2022) .
- Insurance Technologies (majority-owned by Hermanns/Jackson/trusts): Invoiced HQI ~$520k (2024), $443k (2023), $245k (2022); small portions retained for services (e.g., $8.8k in 2024); small revenue shares accrued to Hermanns ($1.7k in 2024; $2.2k in 2023; $2.683k in 2022). Remainder was pass-through to software/providers .
- Oversight: Audit Committee administers a formal related-party transaction policy and must approve such transactions, assessing ordinary course, terms vs. third parties, value, and conflicts .
Compensation Structure Analysis
- Alignment with performance: CEO cash bonus fell materially in 2024 ($48.7k vs. $948.4k in 2023) alongside lower net income and TSR, consistent with formula-driven design .
- Equity mix cadence: CEO equity grants occur on multi-year renewal cycles; the 50,000 RS grant in 2022, with substantial vest in 2024 and through 2026–2027, creates periodic rather than annual equity recognition .
- Risk mitigants: Nasdaq-compliant clawback (Dec 2023); hedging/derivatives and margin prohibitions; high insider ownership; committee independence .
- Consultant usage: No external compensation consultant used for 2024; management provides recommendations (Committee duties remain non-delegable) .
Vesting Schedules and Potential Insider Selling Pressure
- CEO unvested RS: 17,390 shares vesting June 30, 2025 through June 30, 2027; market value $246,242 at 12/31/2024 suggests periodic 2025–2027 vest events that may create trading windows, subject to plan, blackout, and 10b5-1 practices .
- Insider trading policy restricts hedging, options trading, and margin; pre-clearance required for covered persons, mitigating opportunistic selling risk .
Board Service, Committees, Independence
| Attribute | Detail |
|---|---|
| Committees | None (Audit, Compensation, Nominating/Gov are independent-only) . |
| Lead/Independent role | Independent Vice Chairman with agenda-setting and liaison authority . |
| Governance practices | Executive sessions at all board meetings; five of six directors independent . |
Director Compensation
- Executive directors (Hermanns) receive compensation as NEOs; non-employee director plan provides cash retainers (electable in stock), committee chair fees, and annual restricted stock; separate director ownership/matching rules apply to non-employee directors .
Expertise & Qualifications
- Education: BS (Barry University); MBA (USC) .
- Industry: ~30 years in staffing; prior CFO of Outsource International; banking experience at NCNB .
- Ownership: Significant beneficial holder (20.9%) and Dynasty Trust is a separate 17.3% holder; trustees control voting/disposition, each disclaiming individual beneficial ownership .
Investment Implications
- Alignment and skin-in-the-game: Hermanns’ 20.9% direct beneficial stake plus multi-year RS vesting provide strong alignment; prohibitions on hedging and the clawback policy further mitigate agency risk .
- Pay-for-performance: Formulaic bonuses tied to pre-tax income and system-wide sales enforced downside variability in 2024; equity cadence can cause “lumpy” reported pay but maintains long-term focus .
- Governance trade-offs: Combined CEO/Chair concentrated authority is tempered by an empowered independent Vice Chairman and independent-only committees; say-on-pay garnered overwhelming support in 2025 .
- Related-party complexity: Ongoing related-party transactions (franchisees, insurance brokerage, IT services) require sustained Audit Committee rigor; disclosed amounts are modest for Hermanns personally but material in aggregate, warranting continued monitoring .
- Execution outlook: Large pending RS vesting windows through 2027 and the stated pursuit of scale M&A (e.g., TrueBlue) are key catalysts; TSR and earnings trends reflect cyclical industry headwinds, with strategy reliant on accretive acquisitions and franchise conversion .