Steven Sarowitz
Paylocity HoldingAbout Steven I. Sarowitz
Founder of Paylocity (1997), age 59, director since 1997. Holds a B.A. in Economics from the University of Illinois at Urbana and previously served as CEO of Blue Marble Payroll prior to its acquisition by Paylocity in August 2021. Not designated independent by the Board; he brings extensive leadership and operational experience in payroll services and remains a significant shareholder .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Paylocity Holding Corporation | Founder; Director | Director since 1997 | Founder credibility; deep payroll ops expertise |
| Blue Marble Payroll | Chief Executive Officer (prior to acquisition) | Pre–Aug 2021 | Led international payroll aggregator acquired by PCTY |
| Robert F. White (independent payroll firm) | Employee | Not disclosed | Early payroll industry experience |
| Three privately-held payroll companies | Executive | Not disclosed | Exec leadership in payroll services |
| Independent Payroll Providers Association | President (former) | Not disclosed | Industry association leadership |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Payescape Ltd (UK payroll provider) | Director | Current | PCTY subsidiary Blue Marble purchases UK payroll services from Payescape; Sarowitz is significant stockholder (see related-party) |
| Angel Studios, Inc. | Director | Current | Other current public company board per proxy |
| Wayfarer Studios; Wayfarer Theaters; 4S Bay Partners | Partner | Current | Media/venture partnerships |
| Indy Cinema Group Ltd | Board member | Current | Private company board |
| Eved Holdings LLC | Board member | Current | Private company board |
| Julian Grace Foundation; Chicago Center for Arts & Technology; Indiana University Women's Philanthropy Institute | Board member | Current | Non-profit boards |
Board Governance
- Independence: Not independent under Nasdaq rules; independent directors are Breard, Breen, Conway, Pederson, Reiner, Robinson, Waters .
- Committee memberships: None; not a chair .
- Lead Independent Director: Ronald V. Waters III .
- Board/committee meetings: Board met 4 times in FY2025; each director attended at least 75% of Board and committee meetings .
- Board skills matrix includes public board, SaaS, cloud, cybersecurity, finance, strategic planning across nominees; Sarowitz’s biography emphasizes payroll operations and founder perspective .
- Executive sessions: Held at least twice per year; presided by Lead Independent Director .
Fixed Compensation
| Component | FY2025 Amount | Notes |
|---|---|---|
| Annual Director Retainer (cash) | $35,000 | Standard for non-employee directors (FY2025 program) |
| Committee Membership Fees | $0 | No committee assignments |
| Committee Chair Fees | $0 | Not applicable |
| Lead Independent Director Premium | $0 | Not applicable |
| Total Cash Fees Earned | $35,000 | Director compensation table |
Starting FY2026, retainers and fees increased: annual retainer $50,000; Audit Chair $25,000/members $12,500; Compensation Chair $20,000/members $10,000; Nominating Chair $12,000/members $5,000; Lead Independent Director $25,000 .
Performance Compensation
| Equity Award | Grant Date | Shares | Grant Date Fair Value | Vesting |
|---|---|---|---|---|
| RSU (annual director grant) | Aug 15, 2024 | 1,338 | $208,661 | 25% quarterly; fully vested by 1-year anniversary if service continues |
| RSU (program detail) | Aug 15, 2024 | Formula | ~$200,000 / 30-day avg price | Same as above; plan-wide description |
| RSU (FY2026 program) | To be granted (annual cycle) | Formula | ~$230,000 / 30-day avg price | Company disclosed future grant sizing |
- Director equity is time-based only; no performance metrics (PSUs/MSUs are for executives). Awards subject to clawback per plan/Nasdaq standards .
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Other public company boards | Angel Studios, Inc. |
| Private/non-profit boards | Indy Cinema Group Ltd; Eved Holdings LLC; Julian Grace Foundation; Chicago Center for Arts & Technology; IU Women’s Philanthropy Institute |
| Potential interlocks | Payescape Ltd supplies UK payroll services to PCTY subsidiary Blue Marble; Sarowitz is significant stockholder—transaction approved by Audit Committee |
Expertise & Qualifications
- Founder/operator in payroll services; former association president; prior executive roles across payroll firms—brings deep HCM/payroll domain knowledge .
- Education: B.A. Economics, University of Illinois at Urbana .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| Steven I. Sarowitz | 8,461,719 | 15.6% | Includes 316 RSUs vesting within 60 days; 251,068 shares held by Jessica P. Sarowitz Declaration of Trust (spouse) |
| Shares Outstanding (reference) | 54,376,395 | — | As of Sept 30, 2025 |
- Ownership alignment: Board increased stock ownership guidelines in July 2025—non-employee directors to 5x annual cash retainer; company states individuals are compliant subject to phase-in .
- Hedging/pledging: Insider trading policy prohibits hedging and pledging by persons subject to policy (includes directors) .
Governance Assessment
- Board effectiveness: As founder and 15.6% holder, Sarowitz provides continuity and industry knowledge; however, he is not independent, holds no committee seats, and thus governance influence is primarily via board-level deliberations rather than committee oversight .
- Alignment: Very high ownership aligns interests with long-term value creation; director equity grants are time-based and modest relative to ownership .
- Conflicts/related-party exposure: Blue Marble’s use of Payescape (£1.062M equivalent $1.062M) where Sarowitz is a significant stockholder is a potential conflict; company followed policy and Audit Committee approved as fair/in best interests, but remains a monitoring point for investors .
- Attendance/engagement: Met the ≥75% attendance threshold; board met 4 times—no concerns disclosed regarding his attendance .
- Compensation structure: Predominantly equity ($208,661 RSUs vs $35,000 cash in FY2025), consistent with market and ownership guidelines; no meeting fees; FY2026 increases align with peer input from Compensia .
RED FLAGS
- Related-party transactions: Ongoing vendor relationship (Blue Marble–Payescape) with Sarowitz ownership interest—requires continued audit oversight and transparent disclosure .
- Independence: Not independent; combined with large ownership stake, concentration risk if board balance not maintained through strong independent chairs and lead director .
Additional Notes
- Committee independence and use of independent consultant (Compensia) for compensation; no consultant conflicts reported .
- Clawback policy compliant with Nasdaq Rule 10D-1; awards subject to recovery .