Encore Capital Group Inc

This non-binding advisory proposal asks stockholders to approve, on an advisory basis, the Company’s 2025 compensation of its named executive officers as disclosed in the proxy materials. Management seeks this advisory endorsement to confirm that its executive pay program — which the Compensation Committee describes as heavily ‘at-risk’ (approximately 87% of CEO target pay and about 73% for other NEOs tied to performance or equity) and designed to align pay with long-term stockholder value — has shareholder support. The CD&A explains material elements: base salary, the annual KCP cash bonus (funded based on Adjusted EBITDA and other operational metrics), time‑based RSUs, ROIC PSUs and TSR PSUs with multi‑year vesting and performance metrics. Management points to strong prior shareholder support (approximately 98% FOR in 2025) and highlights governance features such as independent compensation consultant engagement, clawback policies, equity ownership requirements, and limits on hedging and repricing. Because the vote is advisory, it does not change compensation contracts nor bind the Board, but provides a key signal that the Board and Compensation Committee consider when structuring future pay. A ‘FOR’ vote signals investor acceptance of the mix of short‑ and long‑term incentives and the Company’s rationale for the 2025 awards; a negative vote would likely trigger further engagement and potential program adjustments. The Board recommends a FOR vote and has described how performance targets and risk adjustments (including a Risk Committee multiplier) influenced actual payouts. In assessing this proposal, investors should weigh the clear link between pay and quantifiable performance metrics (Adjusted EBITDA, ROIC, TSR) against potential concerns about dilution from equity awards and the absolute magnitude of pay outcomes in a year of strong operating results.

This proposal asks stockholders to approve an amended and restated equity incentive plan that increases the share reserve by 650,000 shares, raises the number of shares available for incentive stock options by the same amount, eliminates the previous fungible share conversion ratio (moving to one-for-one counting), removes a fixed expiration date so the plan remains in effect until terminated by the Board, and implements technical updates (including removing obsolete Section 162(m) language and clarifying consultant eligibility). Management frames the request as necessary to preserve the Company’s ability to grant long-term equity awards that attract, retain and motivate employees, executives and directors and to maintain alignment between management and stockholders. The Board emphasizes controlled use of equity (citing historical burn rates, multi-year average grants, and governance safeguards) and includes limits such as no repricing without stockholder approval, dividend equivalent restrictions, award caps per participant, and clawback provisions. Approving the plan will increase the pool available for grants — the Board projects the requested shares would support awards into 2031 — which implies modest incremental dilution; management provides burn-rate data and explains monitoring practices to justify the increase. From a governance perspective, the A&R Plan includes stockholder protections (no evergreen provision, anti‑recycling provisions, annual director limits, and shareholder approval for material changes) intended to mitigate dilution and agency concerns. If approved, the Compensation Committee retains discretion over grant sizing, performance metrics and recipients; investors should therefore evaluate not just the aggregate share request but the committee’s discipline and historical grant practices. The vote is important for the Company’s long-term compensation flexibility; a rejection would constrain future equity awards and likely force management to seek alternative cash incentives or return to stockholders for a revised request. The Board recommends a FOR vote, arguing that the benefits of continued equity‑based incentives for talent and alignment outweigh the incremental dilution.

This proposal would amend the Company’s Certificate of Incorporation to expand exculpation to officers — removing or limiting officers’ personal monetary liability for breaches of the duty of care to the fullest extent permitted by Delaware’s Section 102(b)(7) while preserving exceptions (duty of loyalty, acts not in good faith, intentional misconduct or knowing violations of law, unlawful dividends or improper personal benefit). Management argues this change brings officer protections in line with those already afforded to directors, reduces personal litigation risk for executives making good‑faith business decisions, and helps the Company attract and retain qualified senior officers. The Board’s rationale emphasizes the practical burdens and deterrence effect of potential personal exposure for officers, noting that contemporaneous business decisions subject to hindsight litigation risk could disincentivize capable candidates from serving. From a governance and investor perspective, the proposal reduces one avenue for direct monetary claims against officers but leaves intact liability for egregious misconduct and loyalty breaches; derivative claims and corporate enforcement remain possible. Investors should weigh the benefits (talent attraction, aligned protections, reduced defensive legal costs) against concerns that broader exculpation could weaken accountability or make it harder to pursue officer‑level misconduct claims — however, the statutory carveouts mitigate much of that concern. The required vote is a majority of outstanding shares, so the amendment would have a higher approval threshold than ordinary proposals and, if adopted, will be filed as a Certificate of Amendment. Overall, the Board presents the change as a measured alignment with Delaware law and peer practice while preserving key exceptions that protect stockholders against serious officer misconduct.

This advisory proposal asks shareholders to indicate their preference for the frequency (one, two, or three years) of future non‑binding advisory votes on executive compensation. Management's recommendation of ONE YEAR reflects the Board and Compensation Committee’s view that annual votes provide regular, timely feedback from investors on executive pay and facilitate ongoing engagement and responsiveness to shareholder concerns. The vote is non‑binding, so the Board may consider the result but is not legally required to adopt the preferred frequency; however, the Board states it will consider the majority preference or the plurality winner if no option reaches a majority. For investors, annual frequency offers more frequent governance signals and quicker course corrections but can add administrative burden and may emphasize short‑term considerations; multi‑year frequency reduces administrative costs and emphasizes longer‑term alignment but delays investor feedback. The Company notes that shareholders previously approved annual say‑on‑pay votes in 2020 and that the Board believes current governance trends favor annual votes. In evaluating this proposal, investors should consider the tradeoff between regular accountability and potential short‑termism, as well as the Company’s existing pay design (multi‑year PSUs and other long‑term incentives) that already links pay to multi‑year performance. Given its advisory nature, the primary practical significance is signaling investor preferences to the Board and shaping future outreach and compensation program adjustments.