Harold M. Messmer, Jr.
ROBERT HALFAbout Harold M. Messmer, Jr.
Harold M. Messmer, Jr. is Executive Chairman of Robert Half Inc., age 79, director since 1986 and Chairman since 1988; he served as CEO from 1987 until retiring from that role in 2019, bringing deep strategic and operational expertise from over three decades leading the company . Company performance context for FY2024: service revenues decreased 9% YoY, net income decreased 39% YoY, diluted EPS was $2.44 (-37% YoY), and ROIC was 17%; the company returned $2.10B to shareholders over five years via $1.16B buybacks and $942M dividends, ended 2024 with $538M cash and no debt . Governance safeguards include separated CEO/Chair roles, an independent Lead Director, 100% independent Audit/Compensation/Nominating committees, quarterly executive sessions, and 93.5% say‑on‑pay approval in 2024, supporting pay‑for‑performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Robert Half Inc. | Chairman of the Board | 1988–present | Board leadership and strategic guidance; stewarded substantial growth over tenure |
| Robert Half Inc. | Chief Executive Officer | 1987–2019 | Directed and presided over Company’s substantial growth; built culture and global expertise |
| Robert Half Inc. | President | 1986–2004 | Senior leadership through expansion of service offerings and scale |
External Roles
- No additional public company board service disclosed beyond Robert Half (Public Boards: 1, being RHI) .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 105,000 | 105,000 | 105,000 |
| Target Bonus ($) | — | — | 499,586 |
| Actual Annual Bonus Paid ($) | 842,295 | 567,751 | 379,950 |
| Total Compensation ($) | 2,295,104 | 1,990,114 | 1,715,489 |
Notes:
- Target bonus % of salary not disclosed; company sets annual targets using revenue and net income metrics with payout equal to performance ratios and no leverage .
- Messmer’s Chairman employment agreement (auto‑renewing through 12/31/2026) guarantees base salary ≥$105,000 and an annual bonus opportunity ≈20% of his 2019 CEO bonus; benefits (e.g., tax planning) have been waived each year since 2007 and in 2024 .
Performance Compensation
2024 Annual Performance Bonus Plan (APBP)
| Metric | Weighting | Target | Actual | Payout vs Target | Notes |
|---|---|---|---|---|---|
| Revenue | 20% | $6.19B | $5.80B | 93.6% | GAAP basis, adjustments for certain GAAP/tax changes |
| Net Income | 80% | $351M | $252M | 71.8% | GAAP basis, $4M threshold for adjustments |
| Combined | 100% | — | — | 76.1% | Payout equals weighted performance ratios, capped at lesser of 200% TB or $9M |
APBP outcome for Messmer (2024):
- Target Bonus: $499,586; Actual Bonus: $379,950 (76.1% of target) .
2024 Performance Share Design (Grant Date: 3/19/2024)
| Component | Metric | Target / Max | Vesting | Mechanics |
|---|---|---|---|---|
| ROIC Performance | 3‑yr cumulative ROIC vs Industry Peer Group (GICS 2020 sub‑industry) | Target at 65th percentile; award can be 0%–150% of target (forfeited below 40th percentile) | 3‑yr cliff; vest on 3/19/2027 subject to service | +/-2% per percentile vs 65th, up to +50% at ≥90th; below 40th forfeits |
| TSR Modifier | 3‑yr TSR vs same Peer Group | ±25% adjustment after ROIC result; 0% at 50th percentile | Applied after ROIC | +/-1% per percentile vs 50th, capped at ±25% |
| Time Vest | Continued employment | Cliff vest date | Time vest waived only on death/disability; performance conditions still apply |
Messmer’s 2024 grant sizing:
- Target shares: 14,658; Maximum shares: 27,483 (187.5% of target, representing 150% ROIC x 125% TSR) .
Realization example (prior cycle):
- 2022 Performance Shares earned at 112.5% of target; Messmer target 9,890 shares → earned 11,126 shares after ROIC outperformance and TSR underperformance; vested 3/23/2025 after certification .
Vesting/Cash Value Events:
| Event | Shares Vested | Value Realized |
|---|---|---|
| 2021 PSUs released 3/19/2024 (Messmer) | 27,182 | $2,135,962 (at $78.58/share) |
| 2022 PSUs vested 3/23/2025 (Messmer) | 11,126 | — (value realized not separately tabulated in proxy) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 645,086 shares; 0.6% of outstanding |
| Ownership Breakdown | 51,472 shares under company plans with restricted disposition; 593,614 shares jointly with spouse |
| Unvested/Unearned Equity at 12/31/2024 (Messmer) | 11,126 unvested (2022 result pending release as of year‑end), market value $783,938; 56,118 unearned under 2023/2024 awards at max performance, market/payout value $3,954,074 (assumes max) |
| Options Outstanding | None (company ceased granting options to execs in 2005) |
| Hedging/Pledging | Prohibited for directors/officers/employees |
| Ownership Guidelines (Execs) | Messmer minimum required shares: 3,384; all NEOs significantly exceed minima |
| Director Ownership (Board) | All directors exceed minimum 6x cash retainer ownership requirement |
Insider selling pressure signals:
- Multi‑year cliff vest PSUs create periodic share releases (e.g., March cycles), which can increase tradable supply; hedging/pledging is disallowed, mitigating leverage‑related selling risk .
Employment Terms
| Provision | Messmer (Executive Chairman) |
|---|---|
| Agreement Term | Employment agreement through 12/31/2026; auto-renews annually since 1990 |
| Pay Terms | Base ≥$105,000; annual bonus opportunity ≈20% of 2019 CEO bonus; benefits waived since 2007 and in 2024 |
| Severance (Chairman Agreement) | If involuntary (not for Cause), constructive termination, or voluntary within 1 year post‑CIC: lump sum PV of salary through term + PV of last full‑year bonus through term; continued healthcare for Messmer and spouse for life if not for Cause; one‑year non‑compete/solicit on termination |
| Company‑wide Severance Agreement | Lump sum 2x base salary (2.99x if served as director) if terminated without Cause or qualifying voluntary termination; bonus: pro‑rata or 2x prior year (2.99x if served as director) on CIC; benefits continue 2 years (2.99 years if served as director); vesting relief on time-based elements; SERP fully vests on CIC |
| Part‑Time Post‑Retirement | 4 years part‑time service; annual pay = 8% of average highest 5 years cash comp in prior 10; equity continues to vest; non‑compete and non‑solicit during part‑time period; all NEOs eligible |
| Estimated Potential Payments (as of 12/31/2024, at $70.46/sh) | Equity value $4,738,012; CIC salary lump sum $386,102; CIC bonus $2,136,459; consulting fee $1,145,219; medical benefits $245,427; life insurance $34,427 |
Policies:
- Clawback: amended in 2023 to conform with SEC Rule 10D‑1/NYSE listing rule .
- No excise tax gross‑ups; responsible severance cap ≤2.99x salary+bonus; no option repricing; minimum 1‑year vest on equity; no dividends on unearned shares .
Board Governance
- Role/Independence: Executive Chairman; Not independent; member of the Executive Committee .
- Leadership structure: Chair and CEO roles are separated; Lead Independent Director (Frederick A. Richman) oversees executive sessions and agendas .
- Committees: Audit, Compensation, and Nominating committees are 100% independent; Messmer sits on the Executive Committee only .
- Meetings/Attendance: Board met five times in 2024; directors averaged 98% attendance; independent directors hold quarterly executive sessions .
- Required director ownership: All directors in compliance with minimum ownership policy .
Performance & Track Record
- Value creation: $2.10B returned to shareholders over five years; dividend increased 10% in 2024; share count down 11% over five years and 24% over ten years .
- 2024 outcomes: revenue $5.80B, net income $252M, combined segment margin 6%, ROIC 17%, operating cash flow $410M; cash $538M, no debt .
- Pay versus performance context: TSR and CAP disclosed; 2024 CAP for PEO $3.41M alongside revenue/net income trends .
- Executive retention: All key executives retained in 2024 .
Compensation Structure Analysis
- Cash vs equity mix: For NEOs, equity awards are 100% performance‑based; CEO’s target compensation 93% performance‑based in 2024; Messmer’s equity continues as PSUs post‑CEO tenure .
- Shift away from options: No options to executive officers since 2005 (reduces repricing risk) .
- Metric rigor: APBP uses absolute revenue/net income; LTI uses relative ROIC (target 65th percentile) plus relative TSR modifier; 10‑year history shows more below‑target bonus outcomes (8 of 10) and frequent sub‑target or super‑target PSU outcomes (3 below, 7 above) .
- Governance protections: Clawback policy, severance cap ≤2.99x, no gross‑ups, anti‑hedging/pledging .
Equity Ownership & Alignment (detail table)
| Ownership Item | Amount / Status |
|---|---|
| Beneficial Shares | 645,086 |
| Ownership % of Outstanding | 0.6% |
| Shares under Company Plans | 51,472 (restricted disposition; sole voting power) |
| Shared Voting/Dispositive Power | 593,614 with spouse |
| Unvested Earned PSUs (2022 at YE2024) | 11,126 shares; released 3/23/2025 |
| Unearned PSUs (potential at max, 2023/2024 cycles) | 56,118 shares |
| Options | None outstanding |
| Hedging/Pledging | Prohibited |
| Exec Ownership Guideline (Messmer) | Minimum 3,384 shares; in compliance |
Director Compensation (context)
- Non‑employee director program: cash retainers and annual RS grants with 4‑year pro‑rata vest; Messmer is an executive director and does not receive non‑employee director compensation .
Compensation Committee Analysis
- Committee composition: Independent members (Chair: Robert J. Pace; members: Frederick A. Richman, Dirk A. Kempthorne) .
- Independent consultant: FW Cook; confirmed independent; fees <0.1% of FW Cook revenue; no conflicts .
- Say‑on‑pay support: 93.5% approval in 2024; continued stockholder engagement influences plan design (e.g., CSR factor added to CEO bonus in 2022) .
Related Party Transactions
- Committee oversight and formal policy adopted (2023); board assessed immaterial transactions involving other directors; no related‑party transactions disclosed for Messmer .
Risk Indicators & Red Flags
- No hedging or pledging (policy prohibition) .
- No excise tax gross‑ups; severance caps; no underwater option repricing; clawback aligned with SEC/NYSE rules .
- Governance structure with separation of Chair/CEO and strong Lead Director mitigates dual‑role concerns; Messmer is not independent but committees are fully independent .
Compensation Peer Group (Benchmarking)
- LTI performance peer group: ~130 companies in GICS 2020 Commercial & Professional Services (market cap >$100M); relative ROIC target at 65th percentile; relative TSR modifier around 50th percentile .
- External TSR peer group for pay‑versus‑performance disclosure: Kelly Services, Kforce, ManpowerGroup, Resources Connection .
Say‑on‑Pay & Shareholder Feedback
- 2024 vote: 93.5% approval; annual say‑on‑pay will continue; Compensation Committee engages with investors and adjusts plan design in response to feedback .
Investment Implications
- Alignment: Messmer’s sizeable equity stake (0.6%) and anti‑hedging/pledging policy support long‑term alignment; equity awards are fully performance‑based with rigorous relative ROIC and TSR hurdles .
- Vesting cadence: Cliff‑vest PSUs and recent releases (e.g., March cycles) may create episodic supply as awards settle; monitor post‑vesting trading windows for potential incremental liquidity, noting policy constraints .
- Retention/transition risk: Robust severance/part‑time post‑retirement framework, lifetime healthcare under certain conditions, and auto‑renewing Chairman agreement reduce near‑term retention risk but create defined CIC economics; model CIC scenarios using disclosed lump sums and equity values .
- Pay-for-performance: With bonuses paid at 76.1% of target during a down cycle and LTI tied to strict relative metrics, incentives remain sensitive to operational and market performance—a constructive signal for capital discipline and ROIC focus .