UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

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Barrett Business Services, Inc.

(Name of Registrant as Specified In Its Charter)

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BARRETT BUSINESS SERVICES, INC.

8100 NE Parkway Drive, Suite 200

Vancouver, Washington 98662

(360) 828-0700

April 21, 2023

Dear Stockholder:

Our annual meeting of stockholders will be held at 1:00 p.m., Pacific Time, on Monday, June 5, 2023. Our annual meeting will be held solely via remote communication, as permitted by Maryland law. You will find instructions explaining how to participate in the meeting on the first page of our proxy statement.

Matters to be presented for action at the meeting include the election of directors, an amendment and restatement of the Company's 2020 Stock Incentive Plan to increase the maximum number of shares of the Company’s common stock for which awards may be granted under the Plan, advisory votes to approve our executive compensation program and the frequency with which we will hold future advisory votes on executive compensation, and ratification of selection of our independent auditors. We will also act on such other business as may properly come before the meeting or any postponements or adjournments thereof.

Jon Justesen is not standing for re-election as a director. We wish to thank Mr. Justesen for his more than two decades of service on the BBSI Board and his tireless commitment to the success of our company.

Whether or not you plan to participate in the annual meeting, please sign, date, and return your proxy as soon as possible, or follow the instructions for telephone or Internet voting on the accompanying proxy. If you do participate in the meeting and wish to vote at that time, you may revoke your proxy and vote personally.

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BARRETT BUSINESS SERVICES, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

June 5, 2023

You are invited to attend the virtual annual meeting of stockholders (the "Annual Meeting") of Barrett Business Services, Inc., a Maryland corporation (the "Company"), to be held solely by remote communication via live webcast on Monday, June 5, 2023, at 1:00 p.m., Pacific Time. You may attend the live webcast on the internet by visiting https://web.lumiagm.com/225175011.

Only stockholders of record at the close of business on April 10, 2023, are entitled to notice of and to vote at the Annual Meeting and any postponement or adjournment thereof.

The Annual Meeting is being held to consider and vote on the following matters:

6. The transaction of any other business that may properly come before the Annual Meeting and any postponement or adjournment thereof.

Whether or not you plan to attend the virtual Annual Meeting, please sign and date the accompanying proxy and return it promptly in the enclosed postage-paid envelope, or follow the instructions on the proxy for telephone or Internet voting, to avoid the expense of further solicitation. If you attend the Annual Meeting, you may revoke your proxy and vote your shares at that time.

Vancouver, Washington

April 21, 2023

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 5, 2023:

The proxy materials for the 2023 annual meeting of stockholders and 2022 annual report to stockholders are available at https://www.astproxyportal.com/ast/23265.

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BARRETT BUSINESS SERVICES, INC.

8100 NE Parkway Drive, Suite 200

Vancouver, Washington 98662

(360) 828-0700

PROXY STATEMENT

2023 ANNUAL MEETING OF STOCKHOLDERS

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of Barrett Business Services, Inc., a Maryland corporation (the "Company"), for use in connection with voting at the annual meeting of stockholders to be held on June 5, 2023 (the "Annual Meeting"), and any postponement or adjournment thereof. The proxy statement and accompanying form of proxy are expected to be mailed to stockholders beginning on approximately April 24, 2023. Website references throughout this document are provided for convenience only, and the content on the referenced website is not incorporated by reference into this document.

VOTING, REVOCATION, AND SOLICITATION OF PROXIES

This year’s Annual Meeting will again be held as a virtual meeting of stockholders conducted online solely by remote communication via live webcast. You will be able to attend and participate in the Annual Meeting online on Monday, June 5, 2023, at 1:00 p.m. Pacific Time, and may also vote your shares electronically (by following the procedures described below) and submit any questions you may have during the meeting, by visiting: https://web.lumiagm.com/225175011. The password for the meeting is bbsi2023.

When a proxy in the accompanying form is properly executed and returned, the shares represented will be voted at the Annual Meeting in accordance with the instructions specified in the proxy. We encourage you to return your proxy promptly, or follow the instructions for telephone or Internet voting on the proxy, even if you plan to attend the Annual Meeting. If no instructions are specified, the shares will be voted FOR Items 1, 2, 3 and 5 and for "1 YEAR" with respect to Item 4 in the accompanying Notice of Annual Meeting of Stockholders.

Voting Your Shares Now or at the Annual Meeting. To vote now, follow the instructions on your proxy card or voting instruction form. Please vote promptly via the Internet (www.voteproxy.com) or phone (1-800-776-9437 in the United States or 1-718-921-8500 from foreign countries) or by completing and mailing your proxy card or voting instruction form. If you are a record holder, you may vote your shares at the Annual Meeting if you log in with your unique control number on your proxy card.

If you are a beneficial holder and do not provide specific voting instructions to your broker, the firm that holds your shares will not be authorized to vote your shares (known as a "broker non-vote") on non-routine matters under the New York Stock Exchange rules governing discretionary voting by brokers. Other than the ratification of the selection of our independent auditors, the action items being submitted to a vote at the Annual Meeting are not routine matters.

Beneficial owners are invited to attend the Annual Meeting and may ask questions during the meeting. However, as a beneficial owner is not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you follow your broker’s procedures for obtaining a legal proxy. If you request a printed copy of the proxy materials by mail, your broker or nominee will provide a voting instruction card for you to use.

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After obtaining a valid legal proxy from your broker, bank or other agent, you may register to vote at the Annual Meeting, by submitting proof of your legal proxy reflecting the number of your shares along with your name and email address to American Stock Transfer & Trust Company, LLC. Requests for registration should be directed to proxy@astfinancial.com or to facsimile number 718-765-8730. Written requests may also be mailed to:

American Stock Transfer & Trust Company LLC

Attn: Proxy Tabulation Department

6201 15th Avenue

Brooklyn, NY 11219

Requests for registration must be labeled as "Legal Proxy" and be received no later than 5:00 p.m., Eastern Time, on May 26, 2023. Any reference herein to attending the Annual Meeting, including any reference to “in person” attendance, means attending by remote communication via live webcast on the Internet.

Any proxy given pursuant to this solicitation may be revoked by the person giving the proxy at any time prior to its exercise by written notice to the Secretary of the Company of such revocation, by a later-dated proxy received by the Company, or by attending the Annual Meeting and voting at the Annual Meeting. The mailing address of the Company’s principal executive offices is 8100 NE Parkway Drive, Suite 200, Vancouver, Washington 98662. If your shares are held through a broker or other nominee, please follow their directions included with this proxy statement on how to vote your shares and, if necessary, how to change or revoke your voting instructions.

The solicitation of proxies will be made primarily by mail, but proxies may also be solicited personally or by telephone or email by our directors and officers without additional compensation for such services. The Company will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for their reasonable expenses in sending proxy materials to stockholders. All costs of solicitation of proxies will be borne by the Company.

OUTSTANDING VOTING SECURITIES

The close of business on April 10, 2023, has been fixed as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. On the record date, the Company had 6,800,669 shares of Common Stock, $.01 par value ("Common Stock"), outstanding. Each share of Common Stock is entitled to one vote at the Annual Meeting. The presence, in person or by proxy, of stockholders entitled to cast a majority of all votes entitled to be cast at the Annual Meeting is required to constitute a quorum. Abstentions and broker non-votes, if any, will be considered present for purposes of determining the presence of a quorum.

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ITEM 1 - ELECTION OF DIRECTORS

The director nominees will be elected at the Annual Meeting to serve until the next annual meeting of stockholders and until their successors are elected and qualify. Our Charter and Bylaws authorize the Board to set the number of positions on the Board within a range of three to nine, with the current number fixed at nine. Jon Justesen will be leaving the Board effective with the 2023 Annual Meeting. The Board has approved a reduction in the number of positions on the Board from nine to eight effective immediately following the Annual Meeting. Vacancies on the Board, including vacancies resulting from an increase in the number of positions, may be filled by the Board for a term ending with the next annual meeting of stockholders and when a successor is duly elected and qualifies.

Provided that a quorum is present at the Annual Meeting, a nominee will be elected if the nominee receives the affirmative vote of a majority of the total votes cast on his or her election (that is, the number of shares voted "for" a director nominee must exceed the number of votes cast "against" that nominee). All of our director nominees are currently serving on the Board. Even if a nominee who is currently serving as a director is not re-elected, Maryland law provides that the director would continue to serve on the Board as a "holdover director." However, under our Bylaws, if stockholders do not re-elect a director, the director is required to submit his or her resignation to the Board. In that event, our Nominating and Governance Committee (the "Nominating Committee") would recommend to the Board whether to accept or reject the resignation. The Board would then consider and act on the Nominating Committee's recommendation, publicly disclosing its decision and the reasons supporting it within 90 days following the date that the resignation was submitted.

A duly executed proxy will be voted FOR the election of the nominees named below, other than proxies marked to vote "against" or to "abstain" from voting on one or more nominees. Shares not represented in person or by proxy at the Annual Meeting, shares voted to "abstain," and broker non-votes, if any, will have no effect on the outcome of the election of directors.

The Board recommends that stockholders vote FOR each of the nominees named below to serve as a director until the next annual meeting of stockholders and his or her successor is duly elected and qualifies. If for some unforeseen reason a nominee should become unavailable for election, the proxy may be voted for the election of such substitute nominee as may be designated by the Board.

The following table sets forth information with respect to each person nominated for election as a director, including their current principal occupation or employment and age as of April 1, 2023.

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The Nominating Committee evaluates the Board’s membership from time to time in determining whether to recommend that incumbent directors be nominated for re-election. In this regard, the Nominating Committee considers whether the professional and educational background, business experience and expertise represented on the Board as a whole enable it to satisfy its oversight responsibilities in an effective manner.

The experience, qualifications, attributes, and skills of each director nominee, including his or her business experience during the past five years, are described below.

Thomas J. Carley has served as Chief Operating Officer and a director of Urth Organic Corporation, a privately held distributor of organic microbial fertilizers and soil amendments, since August 2018. He previously acted as the financial principal of Portal Capital, an investment management company that he co-founded, from July 2006 to June 2018. Mr. Carley served as the Company’s interim Principal Financial and Accounting Officer from March 4, 2016 until August 10, 2016, and remained an employee of the Company through August 31, 2016. Mr. Carley has an MBA from the University of Chicago Graduate School of Business, with an emphasis in Accounting and Finance, and an A.B. degree in Economics and Classics from Dartmouth College.

Mr. Carley brings financial expertise to the Company and the Board through his prior experience in the areas of public accounting and financial analysis, including experience as an accountant with Price Waterhouse & Co., now known as PricewaterhouseCoopers LLP, as well as President and Chief Financial Officer of Jensen Securities, a securities and investment banking firm in Portland, Oregon, for eight years in the 1990s. He is the chair of the Board’s Nominating Committee.

Joseph S. Clabby was elected as a director of the Company effective September 19, 2022. He recently retired from Chubb Limited (NYSE: CB) where he served as Vice President. He spent over twenty years with ACE Limited and then Chubb following its merger with ACE in a number of executive positions, including board roles at several affiliated companies. Prior to ACE and Chubb, Mr. Clabby held executive and operational roles with leading insurance and reinsurance organizations including Alexander & Alexander, Willis Group and Swiss Re. Mr. Clabby earned his MBA in Finance from Pace University and his Master of Arts in Education from Montclair State University. He completed his undergraduate degree at Fordham University, majoring in Psychology.

Mr. Clabby brings extensive insurance industry experience to the Board with specific expertise in underwriting, risk management, operational and financial leadership through his experience as an executive officer of a multinational public company.

Thomas B. Cusick has served as Executive Advisor of Columbia Sportswear Company, an outdoor and active lifestyle apparel and footwear company listed on the Nasdaq Global Select Market, since February 2021. He previously served as Executive Vice President and Chief Operating Officer of Columbia Sportswear Company beginning in July 2017 and as Columbia’s Executive Vice President and Chief Financial Officer from 2015 until 2017. He joined Columbia in 2002 as Corporate Controller and was promoted to Chief Financial Officer in 2009. Prior to joining Columbia, Mr. Cusick spent seven years with Cadence Design Systems, Inc. (and OrCAD, a company acquired by Cadence in 1999), a public company that develops system design enablement solutions, and certain of its subsidiaries. Mr. Cusick currently serves as a member of the Board of Directors and Chair of the Audit Committee of Rather Outdoors Corporation, a privately held fishing equipment business. He received a B.S. degree in accounting from the University of Idaho and began his career at the public accounting firm of KPMG, LLP.

Mr. Cusick brings financial expertise to the Board through his experience as an executive officer of a public company and his work with public company audit committees. He is the chair of the Board’s Audit and Compliance Committee.

Gary E. Kramer joined the Company on August 1, 2016, as Vice President – Finance and served as the Company’s Chief Financial Officer and Principal Accounting Officer until March 5, 2020, when he was elected President and Chief Executive Officer of the Company. Prior to joining the Company, Mr. Kramer served as Senior Vice President for Global Services at Chubb Limited (formerly ACE Limited) beginning in 2013. In this role, Mr. Kramer led the Global Services team to support the growth of multinational businesses and meet the complex underwriting and servicing needs of large multinational customers. He also oversaw the delivery of sophisticated risk management products, programs, and services through all lines of business underwritten for global programs of U.S.-based companies. Between 2004 and 2013, Mr. Kramer held a variety of positions within the ACE Group companies, including Divisional Financial Officer of ACE Financial Solutions, Inc.

Mr. Kramer brings to the Board extensive experience in senior leadership positions as well as deep industry and financial acumen.

Anthony Meeker serves as Chairman of the Board. He retired in 2003 as a Managing Director of Victory Capital Management, Inc. (formerly known as Key Asset Management, Inc.), where he was employed for 10 years. Mr. Meeker was previously a director of First Federal Savings and Loan Association of McMinnville, Oregon, and Oregon Mutual Insurance. He also serves on the boards of two charitable organizations, MV Advancements, which provides employment, residential, and community services to clients with disabilities, and Oregon State Capitol Foundation. From 1987 to 1993, Mr. Meeker was Treasurer of the State of Oregon. His duties as state treasurer included investing the assets of the state, including the then $26 billion state pension fund, managing the state debt, and supervising all cash management programs. Mr. Meeker also managed the workers’ compensation insurance reserve fund of the State Accident Insurance Fund, providing oversight to ensure adequate actuarial reserves. He received a B.A. degree from Willamette University.

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Mr. Meeker’s experience in the insurance industry assists the Company in managing risk with respect to workers’ compensation and overseeing its insurance subsidiaries. Mr. Meeker also brings leadership skills and a unique insight stemming from his public service as state treasurer and service on other corporate boards.

Carla A. Moradi has served as Senior Vice President Global Partners & Alliances, at Anaplan, Inc., since July 2021, and previously served as Anaplan’s Senior Vice President, GTM Transformation and Strategic & Executive Partnerships, from September 2020 through June 2021. Anaplan, a privately held company, formerly public, headquartered in San Francisco, California, is a cloud-native enterprise that provides SaaS services designed to empower global enterprises to orchestrate transformative business performance. Prior to joining Anaplan, Ms. Moradi served from 2015 to 2019 as Executive Vice President, Operations & Technology of Hub International, a leading North American insurance brokerage. She previously served as Group Vice President and CIO, Enterprise Shared Services, of Walgreens Boots Alliance, Inc. (or its predecessor, Walgreens Co.) from 2010 to 2015. Ms. Moradi currently serves as a member of the Board of Directors of Patriot Growth Insurance Services, a privately held insurance services firm. She received her bachelor’s degree in biology from Knox College, and received both a Master of Business Administration degree and Master of Public Health degree from Tulane University.

Ms. Moradi brings her extensive knowledge and experience regarding information technology, data security and other risk management issues to the Board. She is the chair of the Board’s Risk Management Committee.

Alexandra Morehouse was elected as a director of the Company effective June 7, 2022. She is NACD Directorship Certified® and serves as Chief Marketing Officer and Chief Digital Officer of Banner Health, a role she has held since 2015. Banner Health is a not-for-profit health system based in Phoenix, Arizona, operating 30 hospitals and several specialized facilities across 6 states. Prior to joining Banner Health, Ms. Morehouse served in marketing leadership roles with American Express, Charles Schwab, California State Automobile Association, and Kaiser Permanente. Ms. Morehouse currently serves as a member of the Boards of Directors of Evaluserve, Inc., a privately held leading global analytics partner that helps clients get the most out of their core processes. Ms. Morehouse is also a founding board member of the national coalition, Alliance for Inclusive and Multicultural Marketing, whose purpose is to create a movement that reflects a world of acceptance by celebrating differences and highlighting human truths that unite us. She earned a bachelor’s degree at Harvard University and a Master in Business Administration degree from Harvard Business School.

Ms. Morehouse brings to the Board her extensive knowledge and experience regarding marketing, including enterprise-wide digital transformation and branding.

Vincent P. Price is Executive Vice President and Chief Financial Officer of Cambia Health Solutions, Inc., a nonprofit corporation headquartered in Portland, Oregon, and dedicated to transforming health care by creating a person-focused and economically sustainable system through health insurance plans and related products and services. Mr. Price joined Cambia in 2009. Previously, he spent 15 years as a senior finance executive with Intel Corporation, a leader in the design and manufacturing of advanced integrated digital technology platforms, followed by seven years as a consultant to start-up companies. He received his bachelor's degree in business from South Dakota State University. His Master of Business Administration is from Arizona State University.

Mr. Price brings his business, financial, and risk management experience as an executive officer of a large health care organization to the Board. He is the chair of the Board’s Compensation Committee.

The Board recommends that stockholders vote FOR each of the nominees named above.

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Board Diversity Matrix

The table below provides certain highlights of the composition of our Board of Directors assuming the election of the eight nominees listed above. Each of the categories listed in the table below has the meaning set forth in Nasdaq Rule 5605(f).

Delinquent Section 16(a) Reports

Section 16 of the Exchange Act ("Section 16") requires that reports of beneficial ownership of Common Stock and changes in such ownership be filed with the SEC by Section 16 "reporting persons," including directors, executive officers, and certain holders of more than 10% of the outstanding Common Stock. To the Company's knowledge, based solely on a review of the copies of Forms 3, 4, and 5 (and amendments thereto) filed with the SEC and written representations by the Company's directors and executive officers, all Section 16 reporting persons complied with all applicable Section 16(a) filing requirements during 2022 on a timely basis, except Mr. Kramer filed one late Form 4 reporting the purchase of shares.

Meetings and Committees OF THE BOARD OF DIRECTORS

The Board held six meetings in 2022. Each director attended at least 75% of the total number of the meetings of the Board and the meetings held by each committee of the Board on which he or she served during his or her respective periods of service in 2022.

The Company does not have a policy regarding directors' attendance at the Company's annual meeting of stockholders. All directors in office as of last year's annual meeting attended the meeting.

The Board has determined that Ms. Morehouse, Ms. Moradi, and Messrs. Carley, Clabby, Cusick, Justesen, Meeker and Price are independent directors as defined in Rule 5605(a)(2) of the listing standards applicable to companies listed on The Nasdaq Stock Market (“Nasdaq”). In making that determination, the Board took into consideration certain business relationships that the Company has with entities of which directors are employees, as follows:

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Board Leadership Structure

Gary E. Kramer was appointed the Company’s Chief Executive Officer on March 5, 2020, and became a director on May 27, 2020. Anthony Meeker, a long-time outside director of the Company, serves as Chairman of the Board. Mr. Meeker is an ex officio member of each Board committee of which he is not a voting member.

Throughout 2022, each of our directors, other than Mr. Kramer, qualified as an independent director under the Nasdaq listing rules. The outside directors also meet at least two times per year in executive session without the President and Chief Executive Officer or other management being present.

The Board believes that its longstanding leadership structure reflecting the separation of the Chairman and Chief Executive Officer positions serves the best interests of the Company by giving an independent director a direct and significant role in establishing priorities and the strategic direction and oversight of the Company. The Board believes that the manner in which it oversees risk management at the Company has not affected its leadership structure.

The Board’s Role in Risk Oversight

The Company's management is responsible for identifying, assessing, and managing the material risks facing the Company. The Board has historically performed an important role in the review and oversight of risk, and generally oversees risk management practices and processes at the Company. The Board, either as a whole or through the Audit and Compliance Committee (the “Audit Committee”), the Risk Management Committee, and other Board committees, periodically discusses with management strategic and financial risks associated with the Company's operations, their potential impact on the Company, and the steps being taken to manage these risks.

While the Board is ultimately responsible for risk oversight, the Board's committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. In particular, the Audit Committee focuses on financial risk and, through discussions by the Audit Committee or its Chair with management and the Company’s independent registered public accounting firm (the “independent auditors”), oversees the Company's policies, practices, and internal controls related to the preparation of the Company's financial statements and other public disclosures. The Audit Committee also reviews the Company’s major financial risk exposures and the steps management is taking to monitor and control such risks.

The Nominating Committee oversees the functioning of the Board and its committees, issues and developments relating to the Company's corporate governance practices, succession planning for the Board and the Company's executive positions, and the Company’s ethics and compliance program other than with regard to issues assigned to the Audit Committee. The Compensation Committee monitors the Company's incentive compensation programs to assure that management is not encouraged to take actions involving excessive risk. The Risk Management Committee provides oversight of the Company's enterprise-wide risk management framework and corporate risk function, including the strategies, policies, procedures, processes, and systems established by management to identify, assess, measure, monitor, and manage the major risks facing the Company, other than risks for which responsibility has been assigned to a different Board committee.

Audit and Compliance Committee

The Audit Committee reviews and pre-approves audit and legally permitted non-audit services provided by the independent auditors, makes decisions concerning the engagement or discharge of the independent auditors, and reviews with management and the independent auditors the results of their audit, the adequacy of internal accounting controls and the Company’s internal audit function, and the quality of the Company’s financial reporting. The Audit Committee also oversees implementation of the Company's Code of Business Conduct and Code of Ethics for Senior Financial Officers, including procedures for the receipt, retention, and treatment of complaints received regarding accounting, internal accounting controls, or auditing matters. The Audit Committee reviews for potential conflicts of interest, and determines whether to approve, any transaction by the Company with a director or officer (including their family members) that would be required to be disclosed in the Company's annual proxy statement. The Audit Committee held five meetings in 2022.

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The current members of the Audit Committee are Mr. Cusick (chair), Ms. Moradi, Ms. Morehouse, Mr. Clabby and Mr. Meeker. The Board has determined that Mr. Cusick is qualified to be an "audit committee financial expert" as defined by the SEC's rules under the Securities Exchange Act of 1934 (the "Exchange Act"). The Board has also determined that each current member of the Audit Committee meets the financial literacy and independence requirements for audit committee membership specified in applicable rules of the Securities and Exchange Commission (the “SEC”) under the Exchange Act and in listing standards applicable to companies listed on Nasdaq. The Audit Committee's activities are governed by a written charter, a copy of which is available on the Company's website at www.BBSI.com in the "Investors" section under “Governance.”

Compensation Committee

The Compensation Committee reviews the compensation of executive officers of the Company and makes recommendations to the Board regarding base salaries and other forms of compensation to be paid to executive officers, including decisions to grant stock options and other stock-based awards. The current members of the Compensation Committee are Mr. Price (chair), Mr. Cusick, and Mr. Justesen, each of whom is "independent" as defined in Rule 5605(a)(2) and Rule 5605(d)(2)(A) of the listing standards for companies listed on Nasdaq. The Compensation Committee held six meetings in 2022.

The Compensation Committee's responsibilities are outlined in a written charter, a copy of which is available on the Company's website at www.BBSI.com in the "Investors" section under “Governance.” The Compensation Committee is charged with carrying out the Board's overall responsibilities relating to compensation of the Company's executive officers and non-employee directors. Its specific duties include reviewing the Company's cash incentive and equity compensation programs for executive officers and director compensation arrangements, and recommending changes to the Board as it deems appropriate. In the course of reviewing the Company's compensation policies and practices, the Compensation Committee considers whether the Company's compensation program encourages employees to take risks that are reasonably likely to have a material adverse effect on the Company. Based on its most recent review in April 2023, the Compensation Committee believes that the Company's compensation program is not likely to have that effect.

The Chief Executive Officer reviews the performance of each executive officer (other than himself) and may make recommendations to the Compensation Committee regarding salary adjustments, stock-based awards, and the selection, target amounts and satisfaction of corporate and individual performance goals for cash and stock incentive awards. The Compensation Committee is responsible for annually evaluating the CEO's performance and establishing his base salary and incentive compensation. At the invitation of the Committee chair, the Company's Chief Financial Officer may attend Compensation Committee meetings to provide information relevant to the Committee's determination of the satisfaction of corporate performance goals tied to cash and stock incentive compensation and the development of appropriate corporate performance targets for future awards of incentive compensation, as well as financial and accounting issues associated with the Company's executive compensation program. The Compensation Committee exercises its own discretion in accepting or modifying the CEO's recommendations regarding the performance and compensation of the Company's other executive officers. If present at a Compensation Committee meeting, each of the CEO and CFO is excused during discussions of his compensation.

The Compensation Committee also administers the Company's stock incentive plans. The Compensation Committee, as it deems appropriate and as permitted by applicable law, may delegate its responsibilities to a subcommittee under the Company's 2020 Stock Incentive Plan. The Compensation Committee has delegated authority, within specified limits, to the CEO (provided he is also a director) to make stock-based awards in his discretion to corporate and branch personnel who are not executive officers.

Under its charter, the Compensation Committee has the sole authority to retain the services of outside consultants to assist it in making decisions regarding executive compensation and other compensation matters for which it is responsible. For several years, the Compensation Committee has engaged Mercer, a nationally recognized compensation consultant, to assist the Committee in structuring and implementing the Company's executive compensation program. The Compensation Committee received information from Mercer regarding any potential conflicts of interest prior to each engagement and determined that no conflicts existed.

In late 2022, the Compensation Committee engaged Mercer to present its analysis of recent trends in the executive compensation arena, including the global talent market and talent shortages, the continued preference of employees for remote work and flexible work arrangements, inflationary pressures on salaries and wages, and the potential for economic recession in 2023. Mercer most recently advised the Compensation Committee on the competitiveness of its executive compensation program in late 2021, including an analysis of the composition of the Company’s peer group and market survey data to assess market levels of executive compensation.

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Nominating and Governance Committee

The Nominating Committee evaluates and recommends candidates for nomination by the Board in director elections and otherwise assists the Board in determining the composition of the Board and its committees, including evaluating matters related to diversity and the performance of the Board and its members. The Nominating Committee is also responsible for reviewing issues and developments in corporate governance and considering whether to recommend changes in the Company’s corporate governance framework, overseeing succession planning with respect to the Company's executive officers, and overseeing the Company’s ethics and compliance program (other than issues related to accounting and financial reporting or within the responsibilities assigned to the Audit Committee). The current members of the Nominating Committee are Mr. Carley (chair). Mr. Justesen, Mr. Price, and Ms. Morehouse. The Nominating Committee held three meetings in 2022.

The Board has determined that each current member of the Nominating Committee is an independent director as defined in Rule 5605(a)(2) of the listing standards applicable to companies listed on Nasdaq. The Nominating Committee is governed by a written charter, which is available on the Company's website at www.BBSI.com in the "Investors" section under “Governance.”

The Nominating Committee does not have any specific, minimum qualifications for director candidates. In evaluating potential director nominees, the Nominating Committee will consider, among other factors:

In the fall of 2022, the Nominating Committee engaged a third-party search firm to assist in identifying potential director candidates. The Nominating Committee, after considering the skills of the current Board members and the Company's needs, directed the search firm to focus on candidates within the insurance, financial services, asset management and/or professional employer services (or similar) industries, with C-level, senior leadership, divisional or board experience specifically relevant to business-to-business sales, preferably with a publicly traded company with significant U.S. operations, among other attributes. The search firm presented a number of qualified candidates to the Nominating Committee and from that group, the committee narrowed the list of potential candidates to two to be interviewed by members of the committee, one of whom withdrew from consideration. The Nominating Committee then recommended that the full Board interview the top candidate. After completion of those interviews and further deliberation, the Nominating Committee recommended to the Board that Joseph S. Clabby be elected as a director. The Board accepted that recommendation and elected Mr. Clabby on September 19, 2022. Additional information regarding Mr. Clabby’s background and experience may be found under “Item 1 - Election of Directors” above. Earlier in the year, the Nominating Committee followed a similar process for another director search, culminating in its recommendation to the Board that Ms. Morehouse be included in the slate for election as a director at the 2022 Annual Meeting.

While the Board has not adopted a formal policy with respect to the consideration of diversity in identifying director nominees, the Nominating Committee believes it is important that the Board as a whole represent a diversity of backgrounds and experience, including gender and ethnic background. Accordingly, the Nominating Committee has committed to continue its search for diverse candidates to include in the pool from which future Board members will be chosen.

The Nominating Committee relies on its periodic evaluations of the Board in determining whether to recommend nomination of current directors for re-election. The Nominating Committee may poll current directors for suggested candidates and, as it did twice in 2022, engage an executive search firm when called upon to identify new director candidates.

The Nominating Committee will also consider director candidates suggested by stockholders for nomination by the Board. Stockholders wishing to suggest a candidate to the Nominating Committee should do so by sending the candidate’s name, biographical information, and qualifications to: Nominating Committee Chair c/o Corporate Secretary, Barrett Business Services, Inc., 8100 NE Parkway Drive, Suite 200, Vancouver, Washington 98662. Candidates suggested by stockholders will be evaluated by the same criteria and process as candidates from other sources.

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Risk Management Committee

The Risk Management Committee reviews and discusses with management the development and performance of the Company’s enterprise risk management program, investment guidelines for the Company’s investment portfolios, the Company’s insurance and risk management programs, and technology risks facing the Company, including information security and cyber defense mechanisms. It also oversees the activities of the Company’s internal workers’ compensation committee with regard to the Company’s workers’ compensation claims administration and expense and its process for developing reserve estimates. The Risk Management Committee held four meetings in 2022. Its current members are Ms. Moradi (chair), Mr. Meeker, Mr. Carley, and Mr. Clabby. The Risk Management Committee is governed by a written charter, which is available on the Company's website at www.BBSI.com in the "Investors" section under “Governance.”

DIRECTOR COMPENSATION FOR 2022

The following table summarizes compensation paid to the Company’s outside directors for services during 2022. No outside director received perquisites or other personal benefits with a total value exceeding $10,000 during 2022.

(1) Directors (other than directors who are full-time employees of the Company, who do not receive directors’ fees) are entitled to receive an annual retainer payable monthly in cash. For 2022, the annual retainer was $65,000 for each outside director other than the Chairman of the Board, whose annual retainer was $135,000. Also throughout 2022, committee chairs and committee members received annual retainers as follows: Audit Committee, $15,000 and $7,500; Compensation Committee, $10,000 and $5,000; Risk Management Committee, $10,000 and $5,000; and Nominating Committee, $10,000 and $5,000.

(2) Reflects the grant date fair value of 1,359 restricted stock units ("RSUs") based on the closing share price of the Common Stock as of the grant date, July 1, 2022, of $73.54 per share. Additionally, reflects the grant date fair value of 987 RSUs based on the closing share price of the Common Stock as of the grant date, September 16, 2022, of $80.20 per share granted to Mr. Clabby. All the RSUs vest on July 1, 2023, and will be settled by delivery of unrestricted shares of Common Stock on the vesting date. Each RSU represents a contingent right to receive one share of Common Stock.

(3) At December 31, 2022, each of the Company’s outside directors except Mr. Clabby held 1,359 RSUs. Mr. Clabby held 987 RSUs. Also as of that date, the Company’s outside directors held stock options as follows: Mr. Carley, 6,250 shares.

CODE OF ETHICS

The Company has adopted a Code of Ethics for Senior Financial Officers ("Code of Ethics"), which is applicable to the Company's principal executive officer, principal financial officer, principal accounting officer, and controller. The Code of Ethics focuses on honest and ethical conduct, the adequacy of disclosure in financial reports of the Company, and compliance with applicable laws and regulations. The Code of Ethics is included as part of the Company's Code of Business Conduct, which is generally applicable to all of the Company's directors, officers, and employees. The Code of Business Conduct is available on the Company's website at www.BBSI.com in the "Investors" section under “Governance.”

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Background and Experience of Executive Officers

In addition to Mr. Kramer, whose background information is presented above under "Item 1- Election of Directors," Anthony J. Harris, Gerald R. Blotz and James R. Potts currently serve as executive officers of the Company.

Anthony J. Harris, age 39, joined BBSI in September 2016 as Controller. He was promoted to Executive Director of Accounting and Finance in March 2018. Then, in March 2020, he was promoted to Chief Financial Officer and Principal Accounting Officer. He became an Executive Vice President in May 2020. Prior to joining the Company, Mr. Harris served as Controller for Holland Partner Group from 2015 to 2016. Previously, Mr. Harris spent nine years with PricewaterhouseCoopers LLP in various roles in the United States and Australia, where he supported publicly traded and large privately held companies. Mr. Harris is a certified public accountant and received a BBA with a specialization in finance and accounting from Washington State University.

Gerald R. Blotz, age 53, joined the Company in May 2002 as Area Manager of the San Jose branch office. Mr. Blotz was promoted to Vice President, Chief Operating Officer-Field Operations in May 2014 and became an Executive Vice President in May 2020. Prior to joining the Company, Mr. Blotz was President and Chief Operating Officer of ProTrades Connection, where he was instrumental in building ProTrades to 44 offices in four states.

James R. Potts, age 55, joined the Company in September 2020, when he was appointed Executive Vice President, General Counsel and Secretary. Prior to joining the Company, Mr. Potts was Shareholder and Chair of Insurance, Corporate and Regulatory Practice, at Cozen O’Connor, a full service international law firm, for twelve years. Mr. Potts has a JD from Georgetown University Law Center and a Bachelor of Science in Business Administration from the University of Florida.

STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT

Beneficial Ownership Table

The following table sets forth information regarding the beneficial ownership of Common Stock as of April 10, 2023, by each director and director nominee, by each executive officer named in the Summary Compensation Table under the heading "Executive Compensation" below, and by all current directors and executive officers of the Company as a group. In addition, it provides information, including names and addresses, about each other person or group known to the Company to own beneficially more than 5 percent of the outstanding shares of Common Stock.

Unless otherwise indicated, all shares listed as beneficially owned are held with sole voting and dispositive power.

* Less than 1% of the outstanding shares of Common Stock.

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(1) Includes options to purchase Common Stock exercisable within 60 days following April 10, 2023, as follows: Mr. Blotz, 20,000 shares; Mr. Kramer, 10,000 shares; Mr. Carley, 6,250 shares; and all current directors and executive officers as a group, 36,250 shares.

(2) Based on information contained in the Schedule 13G amendment filed on January 31, 2023, by BlackRock, Inc., 55 East 52nd Street, New York, New York 10055, reporting sole voting power as to 488,737 shares and sole dispositive power as to 499,885 shares.

(3) Based on information contained in the Schedule 13G amendment filed on February 8, 2023, reporting sole voting power of 409,185 shares and sole dispositive power as to 417,058 shares by American Century Investment Management, Inc., a wholly owned subsidiary of American Century Companies, Inc., which is controlled by Stowers Institute for Medical Research. The address for American Century Investment Management, Inc., is 4500 Main Street, 9th Floor, Kansas City, Missouri 64111.

(4) Based on information contained in the Schedule 13G filed on February 9, 2023, by The Vanguard Group, 100 Vanguard Boulevard, Malvern, Pennsylvania 19355, reporting sole voting power as to 0 shares, shared voting power as to 11,001 shares, sole dispositive power as to 347,429 shares, and shared dispositive power as to 17,284 shares.

(5) Includes 3,002 shares owned by Mr. Carley's spouse.

(6) Includes shares pledged as collateral for margin accounts with brokerage firms as follows: Mr. Carley, 18,907 shares; and Mr. Meeker, 575 shares.

Anti-Hedging Policy

The Company has adopted an Anti-Hedging Policy, which is applicable to the Company’s directors and executive officers, and prohibits them from directly or indirectly engaging in hedging against future declines in the market value of any Company securities through the purchase of financial instruments designed to offset such risk. Executive officers and directors who fail to comply with the policy are subject to Company-imposed sanctions, which may include a demotion in position, reduced compensation, restrictions on future participation in cash or stock incentive plans, or termination of employment. The Company’s Anti-Hedging Policy is available on the Company’s website at www.BBSI.com in the "Investors" section under “Governance.”

Stock Ownership Guidelines for Non-Employee Directors and Executive Officers

The Board has adopted stock ownership guidelines such that each non-employee director is expected to own shares of Common Stock with a value equal to at least three times the regular annual cash retainer ($65,000 effective January 1, 2022), within three years of first being elected. The value of shares owned is calculated quarterly based on the higher of current market price or the average daily closing price for the preceding 12 months. Any shortfall resulting from an increase in the annual cash retainer or a decrease in the stock trading price (or both) is expected to be cured within two years following the end of the quarter in which the resulting required increase in share ownership first occurred.

The Board also adopted a policy on stock ownership for the Company's executive officers. Under the policy, executive officers will have five years from the later of July 1, 2016, and the date the executive officer is notified of his or her selection, to achieve and maintain ownership of shares of Common Stock with a value equal to at least three times the officer's annual base salary. Shares will be valued at the greater of the then current market price and the original purchase price. Until the minimum ownership level is reached, the officer is expected to retain at least 50% of the shares of Common Stock received upon exercise of an option or vesting of RSUs and performance shares, after payment of the exercise price and withholding and payroll taxes. Participants who are not in compliance will not be permitted to sell or dispose of shares, except as described in the preceding sentence, until they reach the required ownership level. The Nominating Committee may make an exception in its sole discretion in the case of financial hardship.

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ITEM 2 - APPROVAL OF THE BARRETT BUSINESS SERVICES, INC. AMENDED AND RESTATED 2020 STOCK INCENTIVE PLAN

We are asking our stockholders to approve the amendment and restatement of the Barrett Business Services, Inc. 2020 Stock Incentive Plan (the “2020 Stock Plan” and, as so amended and restated, the “Restated 2020 Stock Plan”). The 2020 Stock Plan was approved by the stockholders on May 27, 2020, and became effective on that date. Upon the recommendation of the Compensation Committee, the Board approved the Restated 2020 Stock Plan on April 11, 2023, subject to the approval of the stockholders at the 2023 Annual Meeting. The proposed amendments to the 2020 Stock Plan will take effect only if the stockholders approve the Restated 2020 Stock Plan by the required vote at the Annual Meeting. By approving the Restated 2020 Stock Plan, the stockholders will also be reapproving the other material terms of the 2020 Stock Plan. A copy of the 2020 Stock Plan as proposed to be amended and restated is attached to this proxy statement as Appendix A, and the following description of the Restated 2020 Stock Plan is qualified in its entirety by reference to Appendix A.

Purposes and Effects of the Restated 2020 Stock Plan

The primary reason for the proposed amendments is to increase the number of shares of Common Stock available for awards under the 2020 Stock Plan. Under the proposed amendments, the maximum number of shares of Common Stock authorized for issuance pursuant to all types of awards made under the 2020 Stock Plan would be increased from 375,000 to 725,000, while the maximum number of shares of Common Stock that may be granted as incentive stock options (“ISOs”) would remain at 375,000. The foregoing share increases are the only substantive changes proposed to be made in the Restated 2020 Stock Plan.

We believe that the use of stock-based compensation is essential to attract and retain the services of individuals who are likely to make significant contributions to our success and to promote exceptional service and future contributions to the Company. Stock-based awards also encourage ownership of Common Stock by our directors, executive officers, and other employees. Outstanding stock-based awards have included stock options, restricted stock units (“RSUs”) and performance share awards (“PSUs”). As of April 10, 2023, 92,826 shares of Common Stock had been issued under the 2020 Stock Plan and 239,359 shares were reserved for issuance under outstanding awards. Accordingly, only 42,815 shares were available for future grants of awards at that date. The proposed increase in shares authorized to be issued by 350,000 will give us the flexibility to continue to provide stock-based incentive compensation to our senior management, key employees, and non-employee directors at a competitive level. Additional information regarding the Company’s use of stock-based awards appears below under “Historical Awards under the 2020 Stock Incentive Plan" and “Additional Equity Compensation Plan Information".

Important Features of the 2020 Stock Plan

As described in more detail below, the 2020 Stock Plan includes several features intended to enhance long-term stockholder interests, none of which features are being changed by the Restated 2020 Stock Plan:

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Vote Required and Board Recommendation

The affirmative vote of a majority of the votes cast on Item 2 is required for approval. Abstentions and broker non-votes will have no effect on the outcome of the vote.

The Board of Directors unanimously recommends that you vote FOR approval of the Restated 2020 Stock Plan.

SUMMARY OF THE RESTATED 2020 STOCK PLAN

Administration

Except to the extent the Board determines otherwise, the Restated 2020 Stock Plan will be administered by the Compensation Committee (referred to in this section as the "Committee"). Under its charter, the Committee must consist of two or more directors of the Company, each of whom satisfies the applicable independence criteria of the stock exchange or quotation system on which the Company's common stock is listed or quoted and qualifies as a "non-employee director" as defined by Rule 16b-3 promulgated under the Exchange Act.

Eligibility. Directors, officers and other key employees, and outside consultants are eligible to receive awards under the Restated 2020 Stock Plan. Individuals who receive awards are referred to as "Participants." As of April 10, 2023, eight non-employee directors, four executive officers, and approximately 80 other employees were considered eligible to be selected by the Committee to receive awards under the 2020 Stock Plan. Compensation paid to the Company's non-employee directors in any calendar year may not exceed a total of $400,000 per director, including all cash compensation and the value of all stock-based awards granted during the year.

Shares Available for Issuance under the Restated 2020 Stock Plan. A maximum of 725,000 shares of Common Stock may be made the subject of awards granted under the Restated 2020 Stock Plan, an increase of 350,000 shares from the current limit of 375,000. The maximum amount will be adjusted in the event of certain changes in the Company's capitalization.

If an award is canceled or expires for any reason before having been fully vested or exercised, or is exchanged for another award, or is otherwise forfeited, all shares covered by such award will be added back to the number of shares available for future awards. The shares subject to awards that are payable or settled solely for cash also will not reduce the number of shares available for future awards. In no event will any of the following shares again become available for other awards: (i) shares tendered or withheld in respect of taxes; (ii) shares tendered or withheld to pay the exercise price of options; (iii) shares repurchased by the Company from a Participant with the proceeds from the exercise of options; and (iv) the total number of shares underlying exercised stock appreciation rights, not just the net number of shares issued.

The 350,000 additional shares of Common Stock that will be authorized for issuance under the Restated 2020 Stock Plan represent approximately 5.1 percent of outstanding shares as of April 10, 2023. The closing price of the Common Stock on The Nasdaq Stock Market on April 10, 2023, was $88.48. No awards have been made under the 2020 Stock Plan that are subject to stockholder approval. If the Restated 2020 Stock Plan is approved, the Committee will determine the number and types of awards that will be granted under the increase in shares authorized for issuance in its sole discretion.

Duration of the Restated 2020 Stock Plan. The Restated 2020 Stock Plan will terminate on May 27, 2030, or, if earlier, when awards have been granted covering all available shares or the plan is otherwise terminated by the Board. Termination of the Restated 2020 Stock Plan will not affect outstanding awards.

Description of Awards under the Restated 2020 Stock Plan. The Committee may make awards to eligible Participants of ISOs, non-qualified stock options ("Nonqualified Options"), stock appreciation rights ("SARs"), restricted shares ("Restricted Shares"), RSUs, and PSUs. The general terms of such awards are summarized below. Each award is evidenced by a written agreement between the Company and the Participant with such terms and conditions as are approved by the Committee in its discretion, subject to the provisions of the Restated 2020 Stock Plan.

Stock Options. Options provide Participants with the right to purchase shares at a predetermined exercise price. The Committee may grant ISOs or Nonqualified Options. Each award agreement states the option exercise price per share of common stock purchasable under each option, which may not be less than 100 percent of the fair market value of a share on the date of grant. The applicable award agreement specifies when the option becomes exercisable, which may be in full or in installments based on continuation of employment over a specified period, satisfaction of performance goals, or other criteria. No option may be exercised after the expiration of its term, which may be no longer than ten years from the date of grant. The Committee determines the terms of each ISO or Nonqualified Option at the time of grant. No options have been granted under the 2020 Stock Plan through April 10, 2023.

Special rules apply for ISOs. The terms of ISOs and the applicable award agreement must conform to the statutory and regulatory requirements of Section 422 of the Internal Revenue Code of 1986 (the "Code"). ISOs may only be granted to employees of the Company or its subsidiaries. The maximum number of shares as to which ISOs may be granted under the Restated 2020 Stock Plan is 375,000.

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SARs. A SAR is an award entitling a Participant to receive an amount equal to the excess (or, if the Committee determines at the time of grant, a portion of the excess) of the fair market value of a share of Common Stock on the date of exercise of the SAR over the base price multiplied by the number of shares as to which the SAR is being exercised. The base price may not be less than 100 percent of the fair market value of a share on the date of grant. Upon the exercise of a SAR, payment may be made in cash, shares of Common Stock, or in any combination of the foregoing as the Committee may determine. No SAR may be exercised after the expiration of its term, which may be no more than ten years from the date of grant. No SARs have been granted under the 2020 Stock Plan through April 10, 2023.

Restricted Shares. A Restricted Share is an award of shares to a Participant that is subject to such terms and conditions as the Committee deems appropriate, including, for example, completing a specified number of years of service or attaining specified performance goals. No cash or other consideration is required to be paid for shares subject to an award of Restricted Shares. Any portion of an award of Restricted Shares that is not vested because the specified conditions were not met is forfeited. No Restricted Shares have been granted under the 2020 Stock Plan through April 10, 2023.

Restricted Stock Units. RSUs are units (with each unit having a value equivalent to one share) granted to a Participant on such terms as the Committee may determine, including, for example, a requirement that the Participant forfeit such RSUs upon termination of employment or service as a non-employee director. Upon vesting of an award of RSUs, the Participant is entitled to receive a payment in an amount equal to the aggregate fair market value of the shares covered by such RSUs at the end of the applicable restriction period. Payment made be made in unrestricted shares of Common Stock equal to the number of RSUs, in installments, in cash, or in any other manner as determined by the Committee.

Performance Share Awards. A PSU represents a right of a Participant to a share unit having a value equal to one share of Common Stock. The Committee determines whether and to whom PSUs are granted, the performance goals applicable to each award, the periods during which performance is to be measured, and all other limitations and conditions applicable to the PSUs. Payment with respect to PSUs will be in cash or in shares of Common Stock as specified in the award agreement. Following the end of the performance period, a participant holding PSUs will be entitled to receive payment of an amount, not exceeding the maximum value of the PSUs, based on the achievement of the performance goals for such performance period, as determined by the Committee.

Provisions Governing All Awards. All awards under the Restated 2020 Stock Plan will be subject to the following provisions:

Minimum Vesting Period. No award may vest in whole or in part before the one-year anniversary of the grant of such award; provided that the Committee may grant awards covering up to five percent of the pool of shares authorized for issuance without regard to the foregoing restriction. Under the Restated 2020 Stock Plan, this carve-out will cover up to 36,250 shares of Common Stock. Awards covering 3,616 shares of Common Stock have been granted with less than a one-year vesting period through April 10, 2023 to new Board members serving less than one year until the applicable vesting date. The provision does not restrict the Committee's authority, in its sole discretion, to accelerate the vesting of, or waive any restrictions applicable to, any outstanding awards.

Performance Goals. If an award is intended to be performance-based, the Committee establishes performance goals for specific performance periods on the basis of such criteria as the Committee may select, such as performance criteria for the Company, an operating group or a branch, a Participant's individual performance, or a combination of both. Performance goals may be objective or subjective.

Rights as Stockholders. Participants have no rights of a stockholder with respect to shares subject to an award until such shares are issued in the name of the Participant, including the right to receive cash dividends or dividend equivalents. No cash dividends or dividend equivalents will be paid or accrued on Restricted Shares before they vest. Stock dividends issued with respect to unvested Restricted Shares will be subject to the same restrictions. Unless the award agreement for Restricted Shares provides otherwise, a Participant will have voting rights with respect to unvested Restricted Shares that have not been forfeited.

Change in Control. If a change in control of the Company occurs, the Committee has broad discretion to, among other things, accelerate the vesting of outstanding awards, convert or replace outstanding awards, or cancel outstanding awards in exchange for specified payments. Replacement and converted awards would continue to vest over the period (and at the same rate) as the awards which the replacement or converted awards replaced, unless otherwise determined by the Committee. The Committee may provide for a 30-day period prior to a change in control during which all outstanding awards will tentatively become fully vested; when the change in control occurs, all outstanding and unexercised awards will then immediately terminate. Unless the Committee specifically provides otherwise in an award agreement, awards will become vested as of a change in control date only if, or to the extent, such acceleration of vesting does not result in an "excess parachute payment" within the meaning of Section 280G(b) of the Code. The definition of change in control used in the 2020 Stock Plan is summarized below under "Information Regarding Agreements with Executive Officers."

No Repricing. No options or SARs may be repriced, replaced, regranted through cancellation, or modified without stockholder approval (except in connection with a change in the Company's capitalization or similar event), if the effect would be to reduce the exercise or base price for the shares underlying the award.

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Nontransferability of Awards. Awards are not transferable other than by will or the laws of descent and distribution and may be exercised during the Participant's lifetime only by the Participant.

Clawback of Compensation. All compensation pursuant to awards are subject to recovery under the Company's compensation recovery policy described under "Compensation Recovery “Clawback” Policy" below, as well as any future policies that may be adopted by the Company.

Termination of Employment. The terms and conditions under which an award may be exercised, if at all, after a Participant's termination of employment or service as a non-employee director is determined by the Committee and specified in the applicable award agreement.

Amendment and Termination. The Board may amend the plan at any time, but no such amendment is effective unless approved by the Company's stockholders to the extent that such approval is required to satisfy applicable law or securities exchange listing requirements, as is the case with regard to the amendment to increase the shares of Common Stock covered by the plan (and by ISOs) as reflected in the Restated 2020 Stock Plan. The Board may also terminate the Restated 2020 Stock Plan at any time, but termination will not affect outstanding awards. In addition, an amendment will not materially impair the rights of a Participant with respect to outstanding awards without the Participant's consent, unless the amendment provides for payment of the value of the vested portion of the award to the Participant.

Historical Awards under the 2020 Stock Plan

The following table sets forth information with respect to grants of RSUs and target levels of PSUs since the adoption of the 2020 Stock Plan on May 27, 2020, through April 10, 2023, to executive officers, non-employee directors, and the other specified groups set forth below.

(1) Of the amount shown, a total of 69,458 RSUs had vested and 8,847 RSUs had been forfeited as of April 10, 2023.

(2) Of the amount shown, a total of 23,368 PSUs had vested and no PSUs had been forfeited as of April 10, 2023.

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The following is a general discussion of certain U.S. federal income tax consequences relating to awards granted under the 2020 Stock Plan. This discussion is not intended to constitute tax advice, does not address all aspects of U.S. federal income taxation, does not discuss state, local, employment, and foreign tax issues, and does not discuss considerations applicable to a holder who is, with respect to the United States, a non-resident alien. This summary of federal income tax consequences does not purport to be complete and is based upon interpretations of the existing laws, regulations, and rulings, which could be altered materially with enactment of any new tax legislation. Participants should consult their own tax advisors because the summary below may not apply to a Participant's particular situation.

Under the Code, the Company will generally be entitled to a deduction for federal income tax purposes at the same time and in the same amount as the ordinary income that Participants recognize pursuant to awards. For Participants, the expected U.S. federal income tax consequences of awards are as follows:

Nonqualified Options. A Participant will not recognize income at the time a Nonqualified Option is granted. At the time a Nonqualified Option is exercised, the Participant will recognize ordinary income in an amount equal to the excess of (i) the fair market value of the shares issued to the Participant on the exercise date over (ii) the exercise price paid for the shares. At the time of sale of shares acquired pursuant to the exercise of a Nonqualified Option, the appreciation (or depreciation) in value of the shares after the date of exercise will be treated either as short-term or long-term capital gain (or loss) depending on how long the shares have been held.

ISOs. A Participant will not recognize income upon the grant of an ISO. There are generally no tax consequences to the Participant upon exercise of an ISO (except that the amount by which the fair market value of the shares at the time of exercise exceeds the option exercise price will be included in the Participant's alternative minimum taxable income). If the shares are not disposed of within the later of two years from the date the ISO was granted or one year after the ISO was exercised, any gain realized upon the subsequent disposition of the shares will be characterized as long-term capital gain and any loss will be characterized as long-term capital loss. If either of these holding period requirements are not met, then a "disqualifying disposition" occurs. Upon a disqualifying disposition, (i) the Participant recognizes ordinary income in the amount by which the fair market value of the shares at the time of exercise (or, if less, the amount realized on the disqualifying disposition) exceeded the exercise price for the ISO and (ii) any excess amount realized on the disqualifying disposition over the fair market value of the shares at the time of exercise will be characterized as capital gain. If the amount the Participant realizes from a disqualifying disposition is less than the exercise price paid and the loss sustained upon the disposition would otherwise be recognized, the Participant will not recognize any ordinary income from the disqualifying disposition and instead the Participant will recognize a capital loss.

Stock Appreciation Rights. A Participant will not recognize income at the time of grant of a SAR. Upon exercise of a SAR, the Participant will recognize ordinary income in an amount equal to the value of any cash or shares that the Participant receives. At the time of sale of any shares acquired pursuant to the settlement of a SAR, the appreciation (or depreciation) in value of the shares after the date of settlement will be treated either as short-term or long-term capital gain (or loss) depending on how long the shares have been held.

Restricted Shares. In general, a Participant will not recognize income at the time of grant of Restricted Shares unless the Participant elects with respect to the Restricted Shares to accelerate income taxation to the date of the award, as described further below. In the absence of an election to accelerate income taxation to the date of an award, upon lapse of the forfeiture conditions or transfer restrictions (the "vesting date"), a Participant will recognize ordinary income equal to the fair market value of the Restricted Shares on the vesting date (less any amount the Participant paid for such Restricted Shares). If permitted by the applicable award agreement, a Participant may, within 30 days after the date of the grant, elect to immediately recognize (as ordinary income) the fair market value of the Restricted Shares (less any amount the Participant paid for the Restricted Shares), determined as of the date of grant (without regard to the forfeiture conditions and transfer restrictions). This election is made pursuant to Section 83(b) of the Code. If a Participant making such an election later forfeits the Restricted Shares, no deduction or capital loss will be available to the Participant (even though the Participant previously recognized ordinary income with respect to such Restricted Shares).

Restricted Stock Units and Performance Share Awards. In general, a Participant will not recognize income at the time of grant of RSUs or PSUs. Upon distribution of cash or unrestricted shares that the Participant receives in settlement of RSUs or PSUs after vesting, a Participant will recognize ordinary income equal to the value of any cash or unrestricted shares that the Participant receives. At the time of sale of any shares acquired pursuant to the settlement of RSUs or PSUs, the appreciation (or depreciation) in value of the shares after the date of settlement will be treated either as short-term or long-term capital gain (or loss) depending on how long the shares have been held.

Payment of Exercise Price or Tax Withholding in Shares. The Committee may permit or require Participants to pay all or a portion of the exercise price of stock options or tax withholding obligations upon exercise or vesting of an award by tendering previously acquired shares of common stock or by relinquishing a portion of the shares otherwise issuable upon exercise or vesting. If an option is exercised and payment is made in shares the Participant already owns, there generally is no taxable gain or loss to the Participant other than any gain recognized as a result of exercise of the option, as described above. A number of new shares equal to the number

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of shares transferred to pay the exercise price will have a basis equal to the basis of the transferred shares and the same holding period as the transferred shares. (If ISO shares are used to exercise a Nonqualified Option, a number of the new shares equal to the number of ISO shares transferred to pay the exercise price of the Nonqualified Option will also be treated as ISO shares subject to the same holding periods as the original ISO shares.) The remainder of the new shares will have a new holding period and a basis equal to (i) for Nonqualified Options, the fair market value of those shares on the exercise date or (ii) for ISOs, zero.

Special Tax Provisions. A Participant will also be subject to a 3.8 percent tax on the lesser of (i) the Participant's "net investment income" for the relevant tax year and (ii) the excess of the Participant's modified adjusted gross income for the taxable year over a certain threshold. Net investment income generally includes net gains from the disposition of shares. Under certain circumstances, the accelerated vesting, cash-out or accelerated lapse of restrictions on awards in connection with a change in control of the Company may be deemed an "excess parachute payment" for purposes of the golden parachute tax provisions of Section 280G of the Code, the Participant may be subject to a 20 percent excise tax, and the Company may be denied a tax deduction.

ITEM 3 - ADVISORY VOTE TO APPROVE COMPENSATION OF OUR EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") included a provision that requires public companies to hold an advisory stockholder vote to approve or disapprove the compensation of their named executive officers. The Dodd-Frank Act also included a provision providing stockholders of a public company the opportunity to vote, on an advisory basis, on how frequently they would like the company to hold an advisory vote on the compensation of executive officers. At the 2017 annual meeting, the Company's stockholders approved the Board's recommendation that an advisory vote on executive compensation be conducted annually. Accordingly, we are conducting an advisory vote to approve the compensation of the Company's executive officers again this year. Unless the Board changes its policy, the next “say on pay” advisory vote will be held in 2024. An advisory vote on the frequency of holding say on pay votes will also be submitted to stockholders at the 2023 Annual Meeting.

The Compensation Committee believes that executive compensation should align with the stockholders' interests, without encouraging excessive or unnecessary risk. This compensation philosophy and the program structure approved by the Compensation Committee are central to the Company's ability to attract, retain, and motivate individuals who can achieve our goals and provide stability in leadership. Our philosophies and goals with respect to compensation are explained in detail below under the subheading "Executive Compensation – Compensation Discussion and Analysis – Compensation Philosophy and Objectives." A detailed description of compensation paid to our named executive officers in 2022 follows that discussion and analysis.

This advisory vote, which is not binding on the Company, the Compensation Committee, or the Board, is intended to address the overall compensation of our executive officers and the policies and practices described in this proxy statement. The Board and the Compensation Committee value the opinions of our stockholders and will take the outcome of the vote into account when considering future executive compensation arrangements.

The Board of Directors unanimously recommends that you vote, on an advisory basis, FOR the following resolution:

"RESOLVED, that the compensation paid to our named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K adopted by the SEC, including the Compensation Discussion and Analysis, executive compensation tables and accompanying footnotes and narrative discussion, is hereby approved. "

The above-referenced disclosures appear below under the heading "Executive Compensation" in this proxy statement.

The above resolution will be deemed to be approved if it receives the affirmative vote of a majority of the votes cast at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of the vote.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Compensation Philosophy and Objectives. The Compensation Committee (for purposes of this section, the "Committee") has responsibility for establishing, implementing, and continually monitoring adherence with the Company’s compensation philosophy. The goal of the Committee is to ensure that the total compensation paid to the Company’s executive officers is fair, reasonable, and competitive.

The Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual and long-term strategic goals by the Company. The principles underlying our compensation policies are:

At the 2022 annual meeting of stockholders, more than 94% of the votes cast with respect to the advisory vote on executive compensation approved the compensation of the Company's named executive officers. The Committee took this indication of support into consideration in reviewing the Company's executive compensation program. Our executive compensation program processes are consistent with those established by the Committee and are monitored by the Company’s finance functions.

Peer Group and Survey Data for Comparison Purposes. For several years, the Committee has retained Mercer, a nationally recognized compensation consultant, to provide advice to the Committee regarding the structure and implementation of the Company's executive compensation program. In the third quarter of 2021, the Committee asked Mercer to prepare an updated analysis of executive compensation data for all executive officer positions. In consultation with the Committee, Mercer developed an updated peer group for purposes of comparing the Company's executive compensation with similarly sized companies in the human resources and employment services and related industries. Mercer added three companies, Cross Country Healthcare, Inc., Insperity, Inc. and TrueBlue, Inc., and three companies were removed from the group.

An analysis by Mercer of executive compensation paid by members of the revised peer group listed below were considered by the Committee in establishing executive compensation for 2022:

The peer group was developed in consultation with Mercer without consideration of individual company compensation practices, and no company was included or excluded from the peer group due to paying above-average or below-average compensation.

2022 Executive Compensation Components. For the fiscal year ended December 31, 2022, the principal components of compensation for executive officers were:

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Base Salary

Salary levels of executive officers are reviewed periodically by the Committee and the CEO as part of the performance review process, as well as in connection with a promotion or other change in job responsibility. In determining base salaries for executives in 2022, the Committee primarily considered:

In February 2022, the Committee approved 2022 executive officer base salary levels, effective April 1, 2022, as follows: Mr. Kramer, $790,000, an increase of 4%; Mr. Harris, $400,000, an increase of 7%; Mr. Blotz, $520,000, an increase of 4%; and Mr. Potts, $340,000, an increase of 5%. The increases were based on the Committee’s evaluation of performance, as well as to peg salary levels for those positions closer to the median as compared to the Company’s peer group.

Annual Cash Incentive Compensation

The Company has an Annual Cash Incentive Award Plan (the “Annual Incentive Plan”) that provides for annual awards of cash compensation to the Company’s executive officers based on the achievement of objective corporate performance goals selected by the Committee. In addition, the Committee typically awards discretionary bonuses based on each officer’s individual performance during the year. The total bonus opportunity is typically divided such that 75% relates to achievement of corporate performance goals and 25% to individual performance. Following year end, the Committee determines the extent to which the corporate and individual performance goals were achieved. An executive must remain employed by the Company through the date of the Committee's determination of performance to be eligible to receive annual cash incentive payouts.

In April 2022, the Committee set the target bonus amounts at 100% of base salary for Mr. Kramer and at 80% of base salary for Messrs. Harris, Blotz and Potts. The target amounts related to achievement of corporate performance goals were as follows: Mr. Kramer, $592,500; Mr. Harris, $240,000; Mr. Blotz, $312,000; and Mr. Potts, $204,000. The target bonus amounts tied to corporate financial metrics preliminarily approved by the Committee were as follows: gross billings growth of 9.1% or $597.869 million; net income of $37.119 million; and gross margin as a percentage of gross billings of 3.00%, with each goal weighted equally. The cash payouts were subject to adjustment on a sliding scale based on a 2.5% increase or decrease for each percentage by which the actual achievement of a given metric was above or below the target level. Payouts for a given performance target would be 25% at the 70% achievement level and 200% at an achievement level of 140% or above, with no payout at an achievement level below 70%.

In February 2023, the Committee determined that each of the revised corporate financial metrics had been achieved above target as follows: gross billings growth of $823.876 million, resulting in a payout at 195% of target; net income of $47.268 million, resulting in a payout at the maximum of 200% of target; and gross margin as a percentage of gross billings of 3.18%, resulting in a payout at 190% of target. The actual payouts are shown in the Non-Equity Incentive Compensation Plan column of the Summary Compensation Table below.

The target bonus amounts for individual performance approved by the Committee in April 2022 were as follows: Mr. Kramer, $197,500; Mr. Harris, $80,000; Mr. Blotz, $104,000; and Mr. Potts, $68,000. The Committee received recommendations by the CEO with regard to the three executive officers other than himself. Goals for the entire executive team related to the implementation of a new Company-wide payroll processing system in 2022 and preparations for the rollout of the Company’s fully insured medical benefits program in 2023. Additional goals included: for Mr. Kramer, building an effective management team and three-year product development roadmap; for Mr. Blotz, developing and implementing a client recruitment product and client learning management system; for Mr. Harris, putting in place enhanced budget and cost tracking processes; and for Mr. Potts; developing management training on employment issues, updating the Company’s human resources policies, and refining the Company’s organizational structure to support new product offerings. In February 2023, consistent with the CEO’s recommendations, the Committee approved full payouts of the target discretionary bonus amount for each executive officer.

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Long-Term Equity Incentive Compensation

In 2022, the Committee continued its practice of making annual grants of RSUs to the Company's executive officers under the Company’s 2020 Stock Incentive Plan. The Committee believes that RSUs provide a near-term opportunity to receive an ownership stake in the Company, thus serving as a significant incentive aligning the long-term interests of the executive team with the interests of the Company's stockholders. Each RSU represents a contingent right to receive one share of Common Stock. The RSUs granted to executive officers typically vest in four equal annual installments. The Committee fixed the dollar value of the annual RSU awards to executive officers granted on July 1, 2022, based on the closing sale price of the Common Stock on the date of grant, rounded down to the nearest whole share, as follows: Mr. Kramer, $987,500; Mr. Harris, $320,000; Mr. Blotz, $507,000; and Mr. Potts, $272,000. The awards are shown in the “All Other Stock Awards” column of the Grants of Plan-Based Awards table below.

The vesting of performance share awards granted in 2022 is conditioned on attaining specified target cumulative amounts of gross billings and net income before taxes for the three-year period ending December 31, 2024. The target dollar values of performance shares granted on February 28, 2022, were: Mr. Kramer, $987,500; Mr. Harris, $160,000; Mr. Blotz, $169,000; and Mr. Potts, $136,000, with 50% of the performance shares tied to achievement of each financial metric. Target award amounts are subject to upward or downward adjustment by 2.5% for each one percent by which the actual achievement of a given financial metric is above or below the target level, but not less than 80% of the target level or more than 140% of the target level. If achievement is below the 80% level, no part of the target award tied to that financial metric would be paid. At the 80% level, 50% of the target award for the related financial metric would be paid. The maximum payout is 200% of a target award. The awards in terms of numbers of shares are shown in the “Estimated future payouts under equity incentive plan awards” column of the Grants of Plan-Based Awards table below.

In February 2023, the Committee reviewed the achievement of performance goals for PSUs granted to the executive officers in early 2021. The awards had been tied to the achievement of net income and gross billings targets for the two-year period ended December 31, 2022, with each factor weighted equally. The Committee determined that the net income before taxes goal had been achieved at the 160.0% level; the adjustment of 2.5% for each 1% above target yielded a payout at the maximum of 200.0% of the target award tied to that goal. The Committee determined that the gross billings goal had been achieved at the 107.7% level, yielding a payout of 119.3% of the target award tied to gross billings following upward adjustment.. The overall payout totaled approximately 159.7% of the target awards. The PSUs were settled on February 27, 2023, resulting in the issuance of shares of common stock as follows: Mr. Kramer, 13,388; Mr. Harris, 3,230; Mr. Blotz, 3,750; and Mr. Potts, 3,000.

Deferred Compensation Plan

Under the Company’s Nonqualified Deferred Compensation Plan adopted in 2017, executive officers and other participants may defer receipt for income tax purposes of up to 90% of salary, as well as up to 100% of bonuses and other compensation. Deferred amounts are credited to each participant's account and adjusted to reflect amounts of income, gain, or loss as if the amounts credited to such accounts had been invested in investment funds designated under the plan and selected by the participant. The Committee also approved the establishment of a Rabbi trust under which compensation deferred at the election of participants is deposited in trust and held separately from the Company's other assets, subject to the claims of the Company's creditors in the event of its bankruptcy or insolvency. Although the Company does not make cash matching contributions to participants’ accounts under the plan, RSUs that cliff vest five years following the grant date are awarded each January 1 and July 1, with a matching award of RSUs equal to 35% of the amount deferred into a participant's account during the preceding six months, up to a maximum value of $75,000 per year. The RSU awards during 2022 are shown in the Grants of Plan-Based Awards table below. Additional information about the deferred compensation plan is included under "Nonqualified Deferred Compensation" below.

Retirement Benefits

Employees, including executive officers, may participate in the Company's 401(k) defined contribution plan. The Company matches each employee's contributions at a rate of 100% on the first 3% of salary deferrals and 50% on the next 2% of salary deferrals, with a maximum Company-paid match of $12,200. All executive officers participated in the 401(k) plan in 2022.

Agreements with Executive Officers

The Company entered into employment agreements with Messrs. Kramer, Harris, and Blotz in April 2020, and with Mr. Potts in August 2020. The employment agreements provide for the payment of severance benefits upon termination of the executive’s employment for specified reasons. Each agreement includes the executive’s agreement not to compete with the Company for a specified period following termination. The Committee approved the agreements with the goal of providing the Company's stockholders with greater assurance of stability within senior management. The employment agreements replaced prior agreements that provided for severance benefits only in the event of termination for specified reasons following a change in control of the Company.

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The Company has also entered into agreements with Messrs. Kramer, Blotz, Harris, and Potts that provide, in the event of the executive's death, for the Company to make a lump sum payment to the executive’s designated beneficiary. The agreements are intended to provide a benefit to each executive’s heirs in the event of his death while employed by the Company.

The Committee approved each of the foregoing agreements, which are described under “Information Regarding Agreements with Executive Officers” below.

Compensation Recovery (“Clawback”) Policy. The Company demands that its employees, officers and directors conduct business in accordance with the highest standards of integrity and personal and professional ethics. As an adjunct to this standard of conduct, the Board has adopted a compensation recovery (“clawback”) policy that applies to its executive officers. Under this policy, the Compensation Committee may instruct the Company to seek to recover payments of incentive compensation if the performance measure upon which the award was based is subsequently restated or otherwise adjusted in a manner that would reduce the size of the award or payment. If the incentive compensation was tied to a subjective measure, the Compensation Committee will decide how much, if any, of the compensation the Company should seek to recover. The Compensation Committee may also direct the Company to seek recovery of up to the entire amount of any incentive compensation awarded for a period during which a covered executive committed a significant legal or compliance violation. A copy of the policy is available on the Company's website at www.BBSI.com in the "Investors" section under “Governance.”

Tax Deductibility of Executive Compensation. Section 162(m) of the Internal Revenue Code (the "Code") limits the amount that the Company may deduct for income tax purposes for compensation paid to our executive officers to $1,000,000 per person per tax year.

Compensation Committee Report

The Compensation Committee is charged with carrying out the Board's overall responsibilities relating to compensation of the Company's executive officers. The Compensation Committee has reviewed the section headed "Compensation Discussion and Analysis" and has discussed its contents with members of the Company's management. Based on its review and discussions, the Compensation Committee has recommended to the Board of Directors that the section headed "Compensation Discussion and Analysis" be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, and the Company's proxy statement on Schedule 14A.

Submitted by the Compensation Committee of the Board of Directors:

Summary Compensation Table

The following table sets forth information regarding compensation received by each individual who served as an executive officer of the Company during 2022.

(1) The amounts shown represent cash bonuses awarded based on each officer’s individual performance by the Compensation Committee. Additional information regarding the Company's annual cash bonus program appears under the subheading "Compensation Discussion and Analysis" above.

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(2) The amounts shown include the grant date fair value of RSUs granted to executive officers under the 2020 Stock Plan using the closing price of the Common Stock on the grant date. Both grants of RSUs, and RSUs awarded as a matching contribution under the Company’s nonqualified deferred compensation plan, are included. Assumptions regarding forfeitures are ignored. Each RSU represents a contingent right to receive one share of Common Stock. Additional details regarding the terms of the RSU awards are described below under "Incentive Compensation." Additionally, the amounts shown include the grant date fair value of awards of PSUs in 2021 and 2022 under the 2020 Stock Plan that reflect the probable outcome with respect to target levels of performance conditions as of the date of grant of 81% for the two-year 2021 awards, 0% for the three-year 2021 awards, and 100% for the 2022 awards. The value of the 2022 PSUs at the grant date, assuming the highest level of achievement, is as follows: Mr. Kramer, $1,974,965; Mr. Harris, $319,998; Mr. Blotz, $337,983; and Mr. Potts, $271,998.

(3) Amounts shown represent performance-based cash bonuses paid pursuant to the Company's Annual Incentive Plan during the years shown. Additional information regarding awards under the program appears under the subheadings "Compensation Discussion and Analysis" above and "Incentive Compensation" below.

(4) Amounts shown for 2022 primarily represent employer contributions to the 401(k) plan. For Mr. Kramer, the amount shown includes $12,200 in employer contributions to the 401(k) plan; the balance represents the aggregate incremental cost to the Company of Mr. Kramer’s personal use of company-owned property. No other executive officer received perquisites or other personal benefits with a total value exceeding $10,000 during 2022.

Incentive Compensation

The following table sets forth information regarding awards under the Cash Incentive Plan and the 2020 Stock Plan to the named executive officers during the year ended December 31, 2022.

Grants of Plan-Based Awards for the Year Ended December 31, 2022