UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. )

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ROLLINS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

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ROLLINS, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

2170 Piedmont Road, N.E., Atlanta, Georgia 30324

TO THE HOLDERS OF THE COMMON STOCK:

PLEASE TAKE NOTICE that the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of Rollins, Inc. a Delaware corporation (“Rollins” or the “Company”), will be held at the Company’s corporate office located at 2170 Piedmont Road, NE, Atlanta, Georgia, 30324, on Tuesday, April 25, 2023, at 12:30 P.M. for the following purposes, as more fully described in the proxy statement accompanying this notice:

The Proxy Statement dated March 15, 2023 is attached.

The Board of Directors has fixed the close of business on March 1, 2023 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof.

As permitted by the U.S. Securities and Exchange Commission (the “SEC”) rules, the Company is making the proxy materials relating to the Annual Meeting, including this Proxy Statement and the Company’s 2022 Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”), available to our stockholders electronically via the internet. On or about March 15, 2023, we mailed to our stockholders an Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 25, 2023 (the “Notice”) containing instructions on how to access this Proxy Statement and our Annual Report and vote online. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request a copy. The Notice instructs you on how to access and review all important information contained in the Proxy Statement and Annual Report. The Notice also instructs you on how you may submit your proxy over the internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained in the Notice.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of the Stockholders to be held on April 25, 2023: The Proxy Statement and Annual Report are available at http://www.viewproxy.com/ROL/2023.

We encourage you to take advantage of the availability of the proxy materials on the internet in order to help lower the costs of delivery and reduce the Company’s environmental impact.

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Whether or not you expect to attend the annual meeting, please sign, date and return the enclosed proxy card promptly. Alternatively, you may give a proxy by telephone or over the internet by following the instructions on your proxy card or Notice. If you decide to attend the meeting, you may, if you wish, revoke the proxy and vote your shares in person.

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Letter from our Executive Chairman of the Board

To our Stockholders,

On behalf of the Board of Directors, we are pleased to share that we will hold our 2023 Annual Meeting of Stockholders on Tuesday April 25th, 2023, at 12:30 P.M.

Thanks to our team members around the globe, we had another year of tremendous growth and solid financial results in 2022. Our operations performed well, and we had impressive growth in every business line. The strength of our brands enabled customers to select, retain and expand our services at very high levels. Living up to our brand promises is the hallmark of the longevity and sustainable business model that we have built at Rollins.

2023 Chief Executive Officer Succession

In December 2022, pursuant to the previously announced 2023 CEO Succession Plan, the Board of Directors elected Jerry E. Gahlhoff, Jr. to serve as the Chief Executive Officer of the Company, in addition to his role as President, effective January 1, 2023. This transition led to our reconsideration of separating the Board Chairman and Chief Executive Officer roles, which is described in more detail under the section titled “Board Leadership Structure” on page 7. Jerry, who was previously elected to serve as a member of our Board of Directors in 2021, is an exceptional leader, with great vision and a deep understanding of our industry and our customers.  

Updated Mission and Core Values

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The complexity of our business continues to rise as we acquire more companies and expand our global footprint. As Rollins has evolved over the years to becoming a parent company to many strong brands, we have updated our mission and approach for supporting our acquired companies so that we can drive and sustain our performance and leverage best practices within our portfolio of brands.  In 2022, we clarified our mission to enable us to optimize how we guide, govern, and support our rapidly growing company. Our new mission includes the following five core values: Continuous Improvement, Do the Right Thing, Service, Accountability and Collaboration. We believe these core values will help guide our actions as a parent company, and better position us to support our entire portfolio of brands.

Continued Commitment to Workplace Inclusion

Our Company’s greatest asset is our people. We are proud to continuously execute on our long-standing commitment to attract the best talent, provide best-in-class training, promote from within our Company, and create a nurturing and inclusive work environment for all employees. In 2022, we continued to reinforce our Workplace Inclusion efforts, an initiative that has become integral to our long-term strategy and has been incorporated into the fabric of our organization. We make it a priority to promote and create a diverse, equitable and inclusive workplace every day and with everything that we do. We strongly believe our efforts result in higher levels of satisfaction and engagement, stronger team member retention, higher productivity, and a heightened sense of belonging.

Moving Forward

I am optimistic about our future and what we can accomplish together in 2023. On behalf of our Board of Directors and our employees around the world, we want to thank you for your continued support and investment in Rollins, Inc. We are excited for the future and our ability to deliver long-term shareholder returns.

Gary W. Rollins

Executive Chairman of the Board

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PROXY STATEMENT

We are furnishing the proxy materials to stockholders on or about March 15, 2023. The Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 25, 2023, Proxy Statement and the Annual Report are available at http://www.viewproxy.com/ROL/2023.

The following information concerning the proxy and the matters to be acted upon at the Annual Meeting of Stockholders to be held on April 25, 2023, is submitted by the Company to the stockholders in connection with the solicitation of proxies on behalf of the Company’s Board of Directors.

SOLICITATION OF AND POWER TO REVOKE PROXY

A form of proxy is enclosed. Each proxy submitted will be voted as directed, but if not otherwise specified, proxies solicited by the Board of Directors of the Company will be voted in favor of the candidates for election to the Board of Directors, in favor of the advisory (non-binding) vote to approve the compensation of the Company’s named executive officers and in favor of the frequency of such advisory (non-binding) votes to be held every three years. We have designated Gary W. Rollins and John F. Wilson, the Company’s Executive Chairman and Vice-Chairman, respectively, as proxies for the 2023 Annual Meeting of Stockholders.

A stockholder executing and delivering a proxy has the power to revoke the same and the authority thereby given at any time prior to the exercise of such authority, if they so elect, by contacting either proxy holder, by timely submitting a later dated proxy changing their vote, or by attending the meeting and voting in person. However, a beneficial stockholder who holds their shares in street name must secure a proxy from their broker before they can attend the meeting and vote. All costs of solicitation have been, and will be, borne by the Company.

HOUSEHOLDING AND DELIVERY OF NOTICE OR PROXY MATERIALS

The Company has adopted the process called “householding” for any notice or proxy materials in order to reduce printing costs and postage fees. Householding means that stockholders who share the same last name and address will receive only one copy of the notice or proxy materials, unless we receive contrary instructions from any stockholder at that address.

If you prefer to receive multiple copies of the proxy material at the same address, additional copies will be provided to you promptly upon written or oral request. If you are a stockholder of record, you may contact us by writing to the Company at 2170 Piedmont Rd., NE, Atlanta, GA 30324 or by calling 404-888-2000. Eligible stockholders of record receiving multiple copies of the proxy materials can request householding by contacting the Company in the same manner.

CAPITAL STOCK

The outstanding capital stock of the Company on March 1, 2023 consisted of 492,744,242 shares of Common Stock, par value $1.00 per share. Holders of Common Stock are entitled to one vote (noncumulative) for each share of such stock registered in their respective names at the close of business on March 1, 2023, the record date for determining stockholders entitled to notice of and to vote at the meeting or any adjournment thereof.

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MATTERS TO BE VOTED ON AND VOTES NEEDED FOR APPROVAL

A majority of the outstanding shares will constitute a quorum at the Annual Meeting. Abstentions and “broker non-votes” will be counted for purposes of determining the presence or absence of a quorum for the transaction of business. If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on “routine” matters but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a “non-routine” matter, the organization that holds your shares will inform the inspector of election that it does not have the authority to vote on this matter with respect to your shares. The situation in which a broker is able to vote on some matters at a meeting but not others is generally referred to as a “broker non-vote” with respect to those matters on which the broker cannot vote. Each proposal listed below is a matter considered “non-routine” under applicable rules. Therefore, there will be no broker non-votes with respect to any proposal below. In accordance with the General Corporation Law of the state of Delaware, the following votes are needed for approval of each proposal:

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There are no rights of appraisal or similar dissenter’s rights with respect to any matter to be acted upon pursuant to this Proxy Statement. It is expected that shares held of record and beneficially by officers and directors of the Company, which in the aggregate represent approximately 4.70 percent of the outstanding shares of Common Stock as of the record date, will be voted for the director nominees, for the approval, on an advisory (non-binding) basis, of the compensation of the Company’s named executive officers, and for a frequency of every three years for future advisory (non-binding) votes on executive compensation.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Board Leadership Structure

The Rollins’ Board of Directors (the “Board”) is led by the Executive Chairman of the Board, with each of the Board committees being led by a Committee Chairperson. In January 2023, the roles of Executive Chairman of the Company’s Board and Chief Executive Officer were split during a transition of leadership. As a result, Gary W. Rollins serves as the Executive Chairman of the Board and Jerry E. Gahlhoff, Jr. serves as President and Chief Executive Officer of the Company. The current separation of the Executive Chairman and Chief Executive Officer roles allows the Chief Executive Officer to focus his time and energy on operating and managing the Company while leveraging the experience and perspectives of the Executive Chairman.

In order to continue to drive a high performing Board, the Company has continued to elect a Lead Independent Director who is responsible for identifying issues for the Board to consider and ensuring that all issues are properly addressed, with all directors being heard. Jerry W. Nix continues to serve as the Lead Independent Director of the Board.

The Board believes the current leadership structure consisting of a separate Executive Chairman, Chief Executive Officer and Lead Independent Director represents the appropriate structure for the Company at this time. The specific responsibilities of the Executive Chairman, Chief Executive Officer and Lead Independent Director are outlined in the table below:

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Role of the Board

The Company’s business affairs are managed under the direction of the Board, which is currently composed of ten members. The Board oversees the Company’s Chief Executive Officer and other senior management in the competent and ethical operation of the Company and assures that the long-term interests of the stockholders are being served. In conducting this oversight responsibility, the Board receives regular reports from the Chief Executive Officer and other members of the Company’s senior management team.

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The Board’s Role in Oversight of Risk Management

“Risk” is an extremely broad concept that extends to multiple functional areas and crosses multiple disciplines. As such, risk may be addressed, from time to time, by the full Board or by one or more of the Committees of the Board as described more below. The Company maintains an Enterprise Risk Management (“ERM”) program that identifies, monitors and mitigates the Company’s critical enterprise risks. The Company’s ERM framework is designed to help the Company’s business leaders understand and prioritize organizational risks and measure how such risks impact the Company’s performance. In conducting its risk assessment process, the Company uses the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Audit Committee reviews the prioritization of the Company’s most important risks and the Company’s mitigation actions related to those risks.

Senior management is responsible for identifying and managing material risks that the Company faces. Insurable risks and litigation risks are handled primarily by the legal and risk management departments. Liquidity risk, credit risk and risks associated with our credit facilities and cash management are handled primarily by our finance department, which regularly provides a financial report to the Audit Committee and to the full Board. Operational, business, regulatory and political risks are handled primarily by senior executive management, which regularly provides various operational reports to, among others, the Audit Committee, the Executive Committee and the full Board. Risks related to the Company’s executive compensation programs and practices, and human capital management strategy and policies, including those related to diversity, equity and inclusion, are handled by senior management, which regularly provides reports to the Human Capital Management and Compensation Committee. The Nominating and Corporate Governance Committee receives regular reports from senior management on risks related to the Board and Board committee membership and structure, governance policies and practices, related party transactions, and environmental, social and governance initiatives.

The Board’s Role in Oversight of Cybersecurity Risk Management

Cybersecurity has become a particularly acute area of risk for companies of all sizes and in all industries, including our company. While management is primarily responsible for our cybersecurity program and managing our cybersecurity risks, including our procedures and day-to-day operations, our Audit Committee has oversight responsibility of our cybersecurity risks. The Audit Committee reviews our cybersecurity risks and incidents and any other risks and incidents relevant to our information technology systems controls and security.

The Audit Committee receives regular quarterly reports from our Chief Information Security Officer and also reviews our information technology and cybersecurity risk profile. We use a variety of security products and vendors to protect our information technology infrastructure and data. Our programs continue to adapt and mature as threats continue to evolve. We maintain data encryption, monitoring, loss prevention, data storage, identity/authentication controls, including two-factor authentication tools, anti-malware and anti-virus solutions, and other solutions as appropriate. We also perform penetration tests and cyber simulations to practice our incident response procedures. Our cybersecurity plans are reviewed on an annual basis, and we prioritize new and updated programs as needed to respond to the cybersecurity risks we may face. We train employees on cybersecurity risks, conduct annual tabletop exercises and generate internal phishing campaigns to assess the effectiveness of the training. We also regularly review our privacy policies to ensure compliance with all applicable data privacy regulations.

The Board’s Role in Oversight of Environmental, Social and Governance Matters

The Nominating and Corporate Governance Committee, pursuant to its charter, is formally charged with oversight of our Environmental, Social and Governance (“ESG”) initiatives and strategy. We also have a management-level ESG Oversight Committee that is comprised of diverse representatives from multiple business functions within the organization and led by our General Counsel. The ESG Oversight Committee is responsible for setting our ESG strategy and long-term objectives and providing regular reports to the Nominating and Corporate Governance Committee. The Company has also engaged an independent third-party consultant with diverse perspectives to help us better understand our ESG-related risks and opportunities. Our goal is to prioritize our ESG efforts to drive value for stakeholders and our business. For 2022, the Company focused on prioritizing areas such as safety, workplace inclusion and greenhouse gas emissions. The Company expects to issue its 2022 Sustainability Report later this year highlighting these initiatives.

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The Board’s Role in Oversight of Human Capital Management Matters

The Human Capital Management and Compensation Committee, pursuant to its charter, is formally charged with oversight of the Company’s human capital management strategy and policies, including, but not limited to those policies and strategies regarding diversity, equity and inclusion. The Human Capital Management and Compensation Committee receives regular updates from senior management throughout the year on key talent metrics for the overall workforce, including metrics related to diversity and inclusion and also receives regular reports on the Company’s recruiting, training and education, talent acquisition and career development programs.

Director Independence and New York Stock Exchange Requirements

Controlled Company Exemption

We are a “controlled company” because a group that includes our Executive Chairman, Gary W. Rollins, Board member Pam Rollins, and certain persons acting as a group with them (the “Controlling Group”) owns more than 50% of our stock that is entitled to vote in the election of directors. This means that the Controlling Group has the ability to determine the outcome of the election of directors at our annual meetings and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of our voting power. Such a concentration of voting power could also have the effect of delaying or preventing a third party from acquiring us at a premium.

We have elected to be treated as a “controlled company” as defined by Section 303A.00 of the New York Stock Exchange (the “NYSE”) Listed Company Manual. This Section provides that a controlled company need not comply with the requirements of Sections 303A.01, 303A.04 and 303A.05 of the NYSE Listed Company Manual. Section 303A.01 requires that listed companies have a majority of independent directors. As a controlled company, this Section does not apply to us. Sections 303A.04 and 303A.05 require that listed companies have a nominating and corporate governance committee and a compensation committee, in each case composed entirely of independent directors, and that each of these committees must have a charter that addresses both the committee’s purpose and responsibilities and the need for an annual performance evaluation by the committee.

Director Independence

Under our Independence Guidelines to be considered independent, a director must be determined to have no material relationship with the Company other than as a director. Under the NYSE Listed Company Manual, no director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company.

A member of the Audit Committee is considered independent as long as he or she (i) does not accept any consulting, advisory, or compensatory fee from the Company, other than as a director or committee member; (ii) is not an affiliated person of the Company or its subsidiaries; and (iii) otherwise meets the independence requirements of the NYSE and the Company’s Independence Guidelines. The Board has affirmatively determined that all members of the Audit Committee are independent under our Independence Guidelines, the NYSE listing standards, the Exchange Act and SEC rules and regulations promulgated thereunder, the heightened standards required for Audit Committee members, and its charter.

Under the charters of our Human Capital Management and Compensation Committee and our Nominating and Corporate Governance Committee, no member of such Committees is required to meet the independence requirements of the NYSE Listing Standards during any period in which the Company is a controlled company (as previously noted above). However, our Board has affirmatively determined that each member of the Nominating and Corporate Governance Committee, the Human Capital Management and Compensation Committee, as well as Dr. Lawley (until his resignation on April 26, 2022) are, or with respect to Dr. Lawley, were “independent” under our Independence Guidelines, the NYSE listing standards, the Exchange Act and SEC rules and regulations promulgated thereunder, and the charters of such committees.

Our Independence Guidelines are posted on our website at www.rollins.com under the section titled “Governance –Governance Documents” and include categorical standards for determining independence in specified situations.

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Nonmaterial Relationships

After reviewing all of the relationships between the independent members of the Board, on the one hand, and the Company, on the other hand, the Board determined that all of the relationships fell within the categorical standards for independence set forth in the Independence Guidelines, except as follows:

As required by the Independence Guidelines, the Board unanimously concluded that the above-listed relationships would not affect the independent judgment of the independent directors based on their experience, character and independent means, and therefore do not preclude an independence determination.

Director Criteria and Qualifications

Under Delaware law, there are no statutory criteria or qualifications for directors. The Board has prescribed no criteria or qualifications at this time. The Nominating and Corporate Governance Committee does not have a formal policy with regard to the consideration of director candidates. As such, there is no formal policy relative to diversity, although as noted below, it is one of many factors that the Nominating and Corporate Governance Committee has the discretion to factor into its decision-making. This discretion would extend to how the Nominating and Corporate Governance Committee might define diversity in a particular instance – whether in terms of background, viewpoint, experience, education, race, gender, national origin or other considerations. However, our Nominating and Corporate Governance Committee acts under the guidance of our Corporate Governance Guidelines approved by the Board of Directors and posted on our website at www.rollins.com under the section titled “Governance – Governance Documents.”

Director Selection and Screening Process

The Board believes that it should preserve maximum flexibility in order to select directors with sound judgment and other desirable qualities. Under the Company’s Corporate Governance Guidelines, the Board is responsible for selecting nominees for election to the Board. The Board has delegated the screening process of director nominees for nomination to the Board and service on the committees of the Board to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for determining the appropriate skills and characteristics required of Board members in the context of the then current make-up of the Board. This determination takes into account all factors which the Nominating and Corporate Governance Committee considers appropriate, such as independence, experience, strength of character, mature judgment, technical skills, diversity, age, and the extent to which the individual would fill a present need on the Board.

Director Onboarding and Continuing Education

New directors are required to participate in an orientation program that includes background materials and meetings with senior management. All directors are encouraged to stay abreast of developing trends applicable to the Company’s business and specific to service as a director. Directors may be expected to participate in continuing educational programs relating to our Company’s business, corporate governance or other issues pertaining to their directorships in order to maintain the necessary level of expertise to perform their responsibilities as directors. The Company also provides all directors with membership in the National Association of Corporate Directors.

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Director Candidates Recommended by Stockholders

Our Amended and Restated By-Laws provide that any stockholder entitled to vote for the election of directors may make nominations for the election of directors. Nominations must comply with an advance notice procedure which generally requires, with respect to nominations of directors for election at an annual meeting, that written notice be addressed to:

Corporate Secretary

Rollins Inc.

2170 Piedmont Road, NE

Atlanta, Georgia 30324

Notices with respect to nominations of directors for election at an annual meeting must be received not less than ninety (90) days nor more than one hundred and thirty (130) days prior to the anniversary of the prior year’s annual meeting and shall set forth, among other requirements set forth in detail in the Company’s Amended and Restated By-Laws, the:

Other requirements related to the notice are contained in our Amended and Restated By-Laws, and stockholders are advised to carefully review those requirements to ensure that nominations comply with the Amended and Restated By-Laws. The Nominating and Corporate Governance Committee will consider nominations from stockholders who satisfy the above notice requirements.

Director Communications

The Company also has a process for interested parties, including stockholders, to send communications to the Board of Directors, Lead Independent Director, any of the Board committees or the non-management directors as a group. Such communications should be addressed as follows:

Mr. Jerry W. Nix, Lead Independent Director

Rollins, Inc.

c/o Corporate Secretary

2170 Piedmont Road, NE

Atlanta, Georgia 30324

The above instructions for communications with the directors are also posted on our website at www.rollins.com under the “Investor Relations – Corporate Governance” section. All communications received from interested parties are forwarded

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to the Board. Any communication addressed solely to the Lead Independent Director or the non-management directors will be forwarded directly to the appropriate addressee(s).

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines to formalize and promote better understanding of our policies and procedures. At least annually, the Board reviews these guidelines. A copy of our current Corporate Governance Guidelines may be found on our website at www.rollins.com under the section titled “Governance – Governance Documents.” As required by the rules of the NYSE, our Corporate Governance Guidelines require that our non-management directors meet in at least two regularly scheduled sessions per year without management.

Code of Business Conduct and Ethics

The Company has adopted a Code of Business Conduct and Ethics applicable to all directors, officers and employees generally, as well as a supplemental Code of Business Conduct and Ethics for Directors and Executive Officers and Related Party Transactions Policy applicable to the directors and the principal executive officer, principal financial officer, and the principal accounting officer or controller or person performing similar functions for the Company. Both codes of business conduct are available on our website at www.rollins.com under the section titled “Governance – Governance Documents.”

Committees of the Board of Directors

Our Board has an Audit Committee, Executive Committee, Human Capital Management and Compensation Committee and a Nominating and Corporate Governance Committee, each of which has the composition and the responsibilities described below. Members will serve on these committees until their resignation or until as otherwise determined by our Board. Our Board committees regularly make recommendations and report on their activities to the entire Board. Each committee may obtain advice from internal or external financial, legal, accounting, or other advisors at their discretion. In addition, we have, from time to time, formed a special committee for the purpose of evaluating and approving certain transactions in which other directors of the Company have an interest. During 2022, we had no such committee.

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The Board has adopted written charters for the Audit Committee, Human Capital Management and Compensation Committee and the Nominating and Corporate Governance Committee which are all available on our website at www.rollins.com under the section titled “Governance – Governance Documents.”

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The Audit Committee consists of Ms. Bell, and Messrs. Gunning and Morrison. The Board has concluded that (i) Mr. Gunning and Ms. Bell are qualified as “Audit Committee Financial Experts” within the meaning of the rules of the SEC and that they have accounting and related financial management expertise within the meaning of the NYSE listing standards; (ii) all members of the Audit Committee are “Financially Literate” as required under the rules of the NYSE; and (iii) Ms. Bell’s simultaneous service on the audit committees of more than three public companies does not impair her ability to effectively serve on the Company’s Audit Committee. Mr. Nix, who served on the Audit Committee until April 2022, was also considered to be “Financially Literate” and an “Audit Committee Financial Expert.”

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Human Capital Management and Compensation Committee Interlocks and Insider Participation

The Human Capital Management and Compensation Committee consists of Messrs. Nix and Morrison and Ms. Sams. Dr. Lawley served on the Human Capital Management and Compensation Committee until his retirement from the Board on April 26, 2022. None of these individuals are or were a current or former officer or employee of the Company or any of its subsidiaries. In addition, none of these individuals had a relationship with the Company since the beginning of fiscal year 2022 that required disclosure by the Company under the SEC rules on transactions with related persons. No executive officer of the Company has served as a director or member of the compensation committee or other board committee of another entity that had an executive officer who served on the Company’s Board or Human Capital Management and Compensation Committee.

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Board and Board Committee Meetings

Under our Corporate Governance Guidelines, directors are expected to attend all regular and special meetings of the Board and Board committees upon which they serve. Directors are also expected to attend the Annual Stockholders Meeting. Each incumbent director attended at least 75 percent of the aggregate of the Board meetings held in 2022 and the meetings of the committees on which they served during 2022, and all members of the Board at that time attended last year’s Annual Stockholders Meeting.

The following table shows the current membership (“M”) and chairperson (“C”) of the Board and each of the Board committees, the number of Board and Board committee meetings held in 2022 and actions taken by unanimous written consent in lieu of meetings:

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Executive Sessions

Our Corporate Governance Guidelines require that the non-management directors meet in at least two regularly scheduled executive session per year without management. Our non-management directors meet at regularly scheduled executive sessions without management. In accordance with the NYSE corporate governance listing standards, Mr. Nix, as the Lead Independent Director, presides over the executive sessions.

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DIRECTOR COMPENSATION

Overview of the Non-Employee Director Compensation Program

Members of the Board who are not employees (“Non-Employee Directors”) receive compensation for their service. As Rollins employees, Messrs. Rollins, Wilson and Gahlhoff do not receive compensation for their service as Board members. The compensation program for our Non-Employee Directors is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders. All Non-Employee Directors are also entitled to reimbursement of expenses for all services as a director, including reasonable travel expenses incurred in connection with required in-person attendance at board and committee meetings, committee participation or special assignments.

The Human Capital Management and Compensation Committee annually reviews each element of our Non-Employee Director compensation program and the total amount paid thereunder and makes recommendations to the Board. In addition, at the Human Capital Management and Compensation Committee’s direction, Mercer US LLC (“Mercer”), the Committee’s independent compensation consultant, provides a competitive analysis of director compensation levels, practices, and design features as compared to the general market as well as our compensation peer group.

2022 Annual Non-Employee Director Compensation Program

Under the Director Compensation Program in effect in 2022, our Non-Employee Directors received an annual cash retainer in the amount of $100,000, and an annual equity retainer consisting of restricted stock with a fair value of $45,000. Committee Chairs also received additional annual cash retainers. All retainers are payable in equal quarterly installments in arrears. For each Non-Employee Director who is elected or appointed for the first time, the first quarterly installment of the annual retainers will be paid for the first quarter that ends on or after the date of his or her initial election or appointment, prorated based on service during the quarter.

The following table sets forth the 2022 Non-Employee Director Compensation Program:

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2022 Director Compensation Table

The following table sets forth the compensation paid to our directors for services rendered as a director for the year ended December 31, 2022. Three of our directors, Messrs. Gary W. Rollins, John F. Wilson and Jerry E. Gahlhoff, Jr. are employees of the Company, and their employee compensation information is set forth in the “Summary Compensation Table” under the “Executive Compensation” section of this Proxy Statement. Directors that are our employees do not receive any additional compensation for services rendered as a director.

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Changes Made to the Non-Employee Director Compensation Program for 2023

Equity Compensation

In December 2022, based on the competitive analysis provided by Mercer, the Human Capital Management and Compensation Committee approved an increase to the annual equity award value granted to all non-employee directors from $45,000 to $100,000. Such annual equity award is paid in the form of restricted stock under the Company’s 2018 Stock Incentive Plan. The restricted stock will be granted on the third business day following the Annual Meeting of Stockholders and will vest immediately on the grant date.

Our Non-Employee Directors will continue to receive an annual cash retainer in the amount of $100,000 and Committee Chairs will continue to receive additional annual cash retainers as outlined above.

Non-Employee Director Stock Ownership Guidelines

Under Stock Ownership Guidelines (“Guidelines”), Non-Employee Directors are required to beneficially own, within five years from the date they become subject to the Guidelines, common stock of the Company equal to at least three times the non-employee director annual cash retainer. Non-Employee Directors are prohibited from selling Company stock granted to such director by the Company for a period of one (1) year from the date of such grant and until such director is in compliance with their ownership requirement under the Guidelines.

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INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS

The following table sets forth the names, ages as of March 1, 2023, and certain other information for each of the nominees for election as a director at the Annual Meeting and for each of the continuing members of our Board following the Annual Meeting. Full biographical information follows the table.

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Key Attributes, Experience and Skills of Director Nominees and Continuing Directors

Director Nominees

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PROPOSAL 1:

ELECTION OF DIRECTORS

Overview

Our Board of Directors is currently composed of ten members. In accordance with our Amended and Restated By-Laws, our Board is divided into three classes of directors. At the Annual Meeting, five director nominees are up for election this year. Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death or resignation. The nominees for election at the 2023 Annual Meeting are now directors of the Company, with the exception of Mr. Hardin who is standing for election for the first time. Six other individuals serve as directors but are not standing for re-election because their terms as directors extend past this Annual Meeting pursuant to provisions of the Company’s Amended and Restated By-Laws, which provide for the election of directors for staggered terms, with each director serving a three-year term.

Nominees

At the Annual Meeting, Messrs. Gahlhoff, Gunning, Morrison and Nix will be nominated to serve as Class I Directors to be elected for a three-year term expiring in 2026, and Mr. Hardin will be nominated to serve as a Class II Director to be elected for a one-year term expiring in 2024. Unless authority is withheld, the proxy holders will vote for the election of each director nominee named above. Although management does not contemplate the possibility, in the event any nominee is not a candidate or is unable to serve as director at the time of the election, unless authority is withheld, the proxies will be voted for any nominee who shall be designated by the present Board of Directors and recommended by the Nominating and Corporate Governance Committee to fill such vacancy.

Our Board of Directors recommends a vote FOR the Class I and II director nominees above.

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AUDIT MATTERS

Report of the Audit Committee

Management is responsible for the Company’s system of internal control over financial reporting, the preparation of its consolidated financial statements in accordance with accounting principles generally accepted in the United States, and the financial reporting process, including management’s assessment of internal control over financial reporting (ICFR).

The Company’s independent registered public accounting firm is responsible for performing an integrated independent audit of the Company’s consolidated financial statements and management reports on ICFR in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and for issuing reports thereon. The Audit Committee’s responsibility is generally to monitor and oversee these processes, as described in the Audit Committee Charter. It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles; that is the responsibility of management. The Audit Committee presently consists of three independent directors, all of whom are considered financially literate under NYSE rules.

In fulfilling its oversight responsibilities with respect to the year ended December 31, 2022, the Audit Committee:

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Based upon the review and discussions referred to previously, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of financial position of the Company and subsidiaries as of December 31, 2022 and 2021 and the related statements of income, comprehensive earnings, stockholders equity and cash flows for each of the three years ended December 31, 2022 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC.

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In giving its recommendation to the Board of Directors, the Audit Committee has relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America; and (ii) the reports of the Company’s independent registered public accounting firm with respect to such financial statements and related internal controls.

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Respectfully submitted by the Audit Committee of the Board of Directors

Susan R. Bell, Chairperson

Patrick J. Gunning

Gregory B. Morrison

This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

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Independent Registered Public Accounting Firm

Our Audit Committee, in accordance with its charter, routinely reviews the performance and retention of our independent auditor, and in 2023, the Audit Committee determined that it is an appropriate time to revisit its selection of our independent auditor. Therefore, we have submitted a request for proposal to several independent registered public accounting firms, including our current independent registered public accounting firm, Grant Thornton LLP. The request for proposal asks that these firms submit proposals to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2023. After receiving and reviewing these proposals, the Audit Committee will select and appoint an independent registered public accounting firm for the fiscal year ending December 31, 2023. We currently expect to complete this process prior to the Annual Meeting.

In light of this ongoing process, we are not submitting a proposal for the ratification of appointment of Grant Thornton LLP at the Annual Meeting. While not required to do so, our practice has been to submit the selection of the independent auditor for ratification in order to ascertain the views of our stockholders, and we expect to resume this practice once a decision has been made. We also expect that representatives from Grant Thornton LLP, and in the event the Audit Committee does not engage Grant Thornton LLP as the Company’s independent auditor for the fiscal year ending December 31, 2023, representatives from the independent auditing firm that has been engaged, will be present at the Annual Meeting and that they will have the opportunity to make a statement if they desire to do so and to be available to respond to appropriate questions.

Fees of the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to our company by Grant Thornton LLP for our fiscal years ended December 31, 2022 and 2021.

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Pre-approval of Services

All of the services described above were pre-approved by the Company’s Audit Committee or the Audit Committee’s Chairperson in accordance with the Company’s Audit and Non-Audit Services Preapproval Policy. The Audit Committee has determined that the payments made to its independent registered public accounting firm for these services are compatible with maintaining such auditors’ independence. All of the hours expended on the principal accountant’s engagement to audit the financial statements of the Company for the years 2022 and 2021 were attributable to work performed by full-time, permanent employees of the principal accountant. The Committee has no pre-approval policies or procedures other than as set forth below.

The Audit Committee is directly responsible for the appointment and termination, compensation, and oversight of the work of the independent registered public accounting firm, including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting. The Audit Committee, or one or more members of the Committee, as may be delegated from time to time, is responsible for pre-approving all audit and non-audit services provided by the independent public accountants and ensuring that they are not engaged to perform the specific non-audit services proscribed by law or regulation. The decisions of any Audit Committee member to whom pre-approval authority is delegated must be presented to the full Audit Committee at its next scheduled meeting.

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PROPOSAL 2:

ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), our Board of Directors is submitting a “Say on Pay” proposal for stockholder consideration. While the vote on executive compensation is nonbinding and solely advisory in nature, our Board of Directors and the Human Capital Management and Compensation Committee value the opinion of our stockholders and will review the voting results and seek to determine the causes of any significant negative voting result to better understand issues and concerns not previously presented. Stockholders who want to communicate with the Board of Directors or management should refer to “Stockholder Communications with the Board of Directors” on page 11 of this proxy statement for additional information.

Executive compensation is an important matter for our stockholders. The core of our executive compensation philosophy and practice continues to be to pay for performance. Our executive officers are compensated in a manner consistent with our strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. We believe our compensation program is strongly aligned with the long-term interests of our stockholders. Compensation of our executive officers is designed to enable us to attract and retain talented and experienced senior executives to lead us successfully in a competitive environment.

Our named executive officers are identified on page 32, and the compensation of the named executive officers is described on pages 32-52, including the Compensation Discussion and Analysis (“CD&A”) on pages 32-43. The CD&A section of this proxy statement provides additional details on our executive compensation program, including our compensation philosophy and objectives and the fiscal 2022 compensation of the named executive officers.

We are asking stockholders to vote on the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in the Company’s 2023 Proxy Statement, is hereby approved.”

As indicated above, the stockholder vote on this resolution will not be binding on us or the Board of Directors and will not be construed as overruling any decision by us or the Board. The vote will not be construed to create or imply any change to the fiduciary duties of the Board, or to create or imply any additional fiduciary duties for us or the Board.

The affirmative vote of a majority of the shares of our common stock present in person or represented by proxy and entitled to vote at the annual meeting is required for approval of this proposal. If you own shares through a bank, broker or other holder of record, you must instruct your bank, broker or other holder of record how to vote in order for them to vote your shares so that your vote can be counted on this proposal.

Currently, we hold stockholder advisory votes on executive compensation every three years, and the next such vote after this year’s vote is scheduled to occur in 2026.

Our Board of Directors unanimously recommends that you vote “FOR” the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure.

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PROPOSAL 3:

ADVISORY (NON-BINDING) VOTE ON THE FREQUENCY OF STOCKHOLDER VOTES TO APPROVE EXECUTIVE COMPENSATION

Under the Dodd-Frank Act, we are also required to seek an advisory (non-binding) stockholder vote regarding the frequency of submission to stockholders of a “Say on Pay” advisory vote such as Proposal No. 2. The Dodd-Frank Act specifies that stockholders be given the opportunity to vote on our executive compensation programs either annually, every two years or every three years. Although this vote is advisory and nonbinding, our Board of Directors will review voting results and give serious consideration to the outcome of such voting. Our Board of Directors recognizes the importance of receiving regular input from our stockholders on important issues such as our compensation programs. Our Board also believes that a well-structured compensation program should include plans that drive creation of stockholder value over the long-term, and that it should receive advisory input from our stockholders. Accordingly, as indicated below, the Board recommends that you vote in favor of a three-year advisory vote on our compensation programs.

The stockholders voted in 2017 to conduct advisory votes to approve executive compensation every three years, and consistent with that vote, we are holding a new vote to approve executive compensation at the 2023 Annual Meeting of Stockholders. The advisory vote on the frequency of voting on executive compensation is to be held not less frequently than every six years, with the next such vote to be held at the 2029 Annual Meeting of Stockholders.

Stockholders may cast their vote on their preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting when voting in response to the resolution set forth below:

“RESOLVED, that the holders of the common stock of the Company indicate, by their vote on this resolution, whether the vote on executive compensation should take place every one year, every two years or every three years.”

The option of one year, two years or three years that receives the highest number of votes cast by stockholders will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. However, as indicated above, the stockholder vote on the frequency of nonbinding stockholder votes to approve executive compensation will not be binding on us or the Board and will not be construed as overruling any decision by us or the Board. The vote will not be construed to create or imply any change to the fiduciary duties of the Board, or to create or imply any additional fiduciary duties for us or the Board.

Currently, we hold stockholder advisory votes on executive compensation every three years, and the next such vote after this year’s vote is scheduled to occur in 2026.

Our Board of Directors unanimously recommends that you vote FOR the option of “Once Every Three Years” as the frequency with which stockholders are provided an advisory (non-binding) vote on executive compensation, as disclosed pursuant to the compensation disclosure rules of the SEC.

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EXECUTIVE OFFICERS

The following narratives summarize the business experience over at least the last five years of our current executive officers, other than Messrs. Rollins, Wilson and Gahlhoff, whose business experience is described above in the section titled “Information Regarding Director Nominees and Continuing Directors” on page 20.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes our executive compensation program and provides an overview of how the Human Capital Management and Compensation Committee made compensation decisions in 2022 for each of our named executive officers, which consists of our Principal Executive Officer, each person who served as our Principal Financial Officer at any time during the fiscal year 2022, and the next three most highly-compensated executive officers (other than our Principal Executive Officer and Principal Financial Officer) who were serving in such capacity at the end of the fiscal year 2022. For a complete understanding of the executive compensation program, this disclosure should be read in conjunction with the Summary Compensation Table and other executive compensation-related disclosures included in this Proxy Statement.

In fiscal 2022, our named executive officers were:

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Executive Compensation Practices and Governance Policies

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General Compensation Objectives and Guidelines

The Company is engaged in a highly competitive industry. The success of the Company depends on our ability to attract and retain highly qualified and motivated executives. In order to accomplish this objective, we have endeavored to structure our executive compensation program in a fashion that gives our Human Capital Management and Compensation Committee the flexibility to take into account our operating performance and the individual performance of our executive officers. The Committee, with the assistance of its compensation consultant, used peer group benchmarking (as described under the heading titled “Peer Group Benchmarking Analysis” on page 41), to assess the comparability of the Company’s pay practices to ensure that the total compensation for the Company’s executive officers is competitive with marketplace practices. 

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The Human Capital Management and Compensation Committee endorses the philosophy that executive compensation should reflect Company performance and the contribution of executive officers to that performance. Our compensation policy is designed to achieve three fundamental objectives:

In pursuing our objectives, we strive to provide a balanced approach to compensation policies and practices which does not promote excessive risk-taking.

The Human Capital Management and Compensation Committee recognizes that there are many intangibles involved in evaluating performance and in motivating performance, and that determining an appropriate compensation level is a highly subjective endeavor.

Pursuant to our compensation philosophy, the total annual compensation of our executive officers is primarily made up of the following three elements:

In addition, we provide retirement compensation plans, group welfare benefits and certain perquisites.

We believe that all elements of our executives’ total compensation provide highly motivational incentives that link the pay of our executives to the performance of our Company and enable us to attract and retain highly qualified and motivated executives in our very competitive market.

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Fiscal 2022 Named Executive Officer Compensation Details

Compensation Elements

The Company provides both fixed (salary) and variable (cash and equity incentive) compensation to its named executive officers. The following table sets forth information regarding each of the three core elements of compensation for the executive officers in 2022, including a description of each element.

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The graphics below reflect the approximate general distribution of the three core elements of compensation earned for fiscal 2022 by our CEO, and on average, by our named executive officers under the Company’s 2022 Executive Bonus Plan and 2018 Stock Incentive Plan:

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Base Salary

Base salary represents the fixed element of the compensation of our executive officers and is an important element of compensation intended to attract and retain qualified executives. The Human Capital Management and Compensation Committee reviews the base salaries of our executive officers each year as part of its annual review of our executive compensation program, with input from our CEO (except with respect to his own base salary). In making its determinations, the Human Capital Management and Compensation Committee gives consideration to our operating performance for the prior fiscal year and the individual executive’s performance. Base salary increases are not automatic or guaranteed.

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2022 Base Salary Adjustments

In 2022, the Human Capital Management and Compensation Committee, adjusted the base salaries of the Company’s named executive officers as follows:

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The 15% increase in Mr. Gahlhoff’s base salary for 2022 was made due to Mr. Gahlhoff’s increased responsibilities in connection with his role as President and Chief Operating Officer. Mr. Krause did not receive a salary adjustment in 2022 as he joined the Company in September 2022. Ms. Bimmerman also did not receive a salary adjustment in 2022 as the Human Capital Management and Compensation previously adjusted Ms. Bimmerman’s base salary to reflect a 24.9% increase in July 2021 in connection with her transition into the role as Interim Chief Financial Officer and Treasurer.

Performance-Based Cash Incentive

In January 2022, the Human Capital Management and Compensation Committee approved the terms of the Rollins, Inc. 2022 Executive Bonus Plan for its named executive officers (the “Executive Bonus Plan”), which replaced the 2021 Performance-Based Incentive Cash Compensation Plan. Under the Executive Bonus Plan, the named executive officers have an opportunity to earn bonuses of up to a certain percent of each individual’s annual base salary upon the achievement of performance goals approved by the Human Capital Management and Compensation Committee. Such performance goals consist of the Company’s and individual’s achievement of specific levels of one or more of the following three targeted financial measures:

The performance goals are pre-established each year by the Human Capital Management and Compensation Committee for all named executive officers and measured annually. No bonuses are payable under the Executive Bonus Plan if the goals are not approved by the Human Capital Management and Compensation Committee within 90 days after the commencement of the performance period to which such goals relate. We believe that the incentive-related provisions provide performance incentives that are beneficial to the Company and its stockholders.

The maximum performance-based cash incentive for each of the named executive officers for fiscal 2022 is summarized in the table below. Awards earned in 2022 under the Executive Bonus Plan were accrued in 2022 and paid no later than March 15, 2023.

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Revenue to Plan Performance Goal

The Revenue to Plan performance-based cash incentive maximum payout for each of the named executive officers for fiscal 2022 is summarized in the table below:

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The minimum achievement of revenue to plan for the named executive officers to be eligible to earn a bonus under this performance goal of the Executive Bonus Plan was 95 percent. This performance goal for the plan in 2022 was an 8.2 percent increase in revenue. Because the actual increase in the Company’s revenue for 2022 was 11.2 percent, which reflected a 102.8 percent increase of plan for 2022, this resulted in each named executive officer receiving the maximum bonus target for this performance goal.

Pre-Tax Profit to Plan Performance Goal

The pre-tax profit to plan performance-based cash incentive maximum payout for each of the named executive officers for fiscal 2022 is summarized in the table below:

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The minimum growth in the Company’s pre-tax profit for 2022 to be eligible for a bonus was 90 percent and the Company’s 2022 performance resulted in an actual achievement in pre-tax profit to plan of 100 percent. This resulted in each named executive officer receiving the maximum bonus target for this performance goal.

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2022 Individual Key Operating Initiatives

In 2022, only Mr. Gahlhoff participated in the individual Key Operating Initiative (“KOI”) performance goal and was eligible to receive a bonus for achievement of such KOI as follows:

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Mr. Gahlhoff did not receive a bonus for this performance goal as the Company did not reach its planned target for 2022.

The amount of bonuses under each performance component of the Company’s Executive Bonus Plan is determined based upon straight-line interpolation of the applicable formula for each such component without the use of discretion. In addition to any bonuses earned under the Executive Bonus Plan, the Human Capital Management and Compensation Committee has the authority to award discretionary bonuses. No discretionary bonuses were awarded for 2022, with the exception of Mr. Krause, who received a one-time signing bonus in the amount of $500,000 and a one-time make-whole cash award in the amount of $430,000, to compensate him for amounts forfeited by his prior employer upon joining the Company.

Equity-Based Awards

Pursuant to the terms of the Company’s 2018 Stock Incentive Plan, the Human Capital Management and Compensation Committee may grant stock options, stock appreciation rights and any other type of award valued by reference to (or otherwise based on) shares, including, without limitation, restricted stock, restricted stock units, performance accelerated restricted stock, performance stock and performance units, not to exceed a maximum of 225,000 shares during any fiscal year for any one individual. Equity-based awards are generally used by the Company as a tool to encourage retention and align the interest of our executives with those of our stockholders. In recent years, the Company has awarded time-lapse restricted stock in lieu of granting stock options. The terms and conditions of these awards are described in more detail below. In addition, in 2023, the Human Capital Management and Compensation Committee approved the grants of performance share units (“PSUs”) to the Company’s executive officers, such PSUs will be paid out over a three-year performance period upon the Company’s successful achievement of certain financial performance goals.

Awards under the 2018 Stock Incentive Plan are purely discretionary and may or may not be granted in any given fiscal year. For the past three years, we have granted time-lapse restricted stock to various employees, including our named executive officers, in early January during our regularly scheduled meeting of the Human Capital Management and Compensation Committee during which the Committee reviews the Company’s executive compensation program. Consistent with this practice, the Human Capital Management and Compensation Committee granted time-lapse restricted stock awards to our named executive officers in January 2022, with the exception of Mr. Krause, as follows:

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The amount of the aggregate stock-based awards to our named executive officers in any given year is influenced by the Company’s overall performance. The amount of each grant to our named executive officers is influenced in part by the Human Capital Management and Compensation Committee’s subjective assessment of each individual’s respective contributions to achievement of the Company’s long-term goals and objectives. In evaluating individual performance for these purposes, the Human Capital Management and Compensation Committee considers the overall contributions of executive management as a group and the Committee’s subjective assessment of each individual’s relative contribution to that performance rather than specific aspects of each individual’s performance over a short-term period. It is our expectation to continue yearly grants of restricted stock awards to selected executives although we reserve the right to modify or discontinue this or any of our other compensation practices at any time. Grants are made under our 2018 Stock Incentive Plan and the plan is administered pursuant to Rule 16b-3 under the Exchange Act.

Prior to 2022, all of our time-lapse restricted stock awards have had the same features. For awards of time-lapse restricted stock granted prior to January 2022, the shares vest one-fifth per year beginning on the second anniversary of the grant date. For awards of time-lapse restricted stock granted in 2022, the shares will vest one-fifth per year beginning on the first anniversary of the grant date. For awards of time-lapse restricted stock granted in 2023 the shares will vest one-fourth per year beginning on the first anniversary of the grant date. Time-lapse restricted shares have full voting and dividend rights. However, until the shares vest, they cannot be sold, transferred or pledged. Should the executive leave our employment or move to a lesser position for any reason prior to the vesting dates (other than due to death or disability), the unvested shares will be forfeited unless the Human Capital Management and Compensation Committee decides otherwise. In the event of a “change in control” as determined by the Board, all unvested restricted shares shall vest immediately.

Other Compensation

Health and Retirement Plans

The named executive officers all participate in the Company’s regular employee benefit programs, including the 401(k) Plan with Company match, stock, group life insurance, group medical and dental coverage and other group benefit plans. The Company offers participation in an Employment Stock Purchase Plan that provides employee with a 10% discount on the purchase of Company stock. In 2022, all named executive officers were eligible to participate in the Company’s ESPP with the exception of Gary W. Rollins, due to Mr. Rollins’ beneficial ownership of more than 5% of Rollins’ stock. The Company also maintains a non-qualified retirement plan (the “Deferred Compensation Plan”) for our executives and highly compensated employees, and the Rollins 401(k) Savings Plan for the benefit of all of our eligible employees. The Deferred Compensation Plan provides other benefits as described below under the section titled “Non-Qualified Deferred Compensation.”

Perquisites and Other Personal Benefits

In addition to the total direct compensation and benefits described above, the Company provides its named executive officers with certain perquisites as approved by the Board and noted in the footnote to the Summary Compensation Table below under the section titled “Executive Compensation.” The specific perquisites provided to the named executive officers are as follows:

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Executive Employment Arrangements

While we do not have employment agreements with any of our named executive officers, the initial terms and conditions of employment for our named executive officers are set forth in written employment offer letters (as applicable).

Kenneth D. Krause Offer Letter

In July 2022, the Company entered into an employment offer letter with Mr. Krause setting forth the terms and conditions of his employment as Executive Vice President, Chief Financial Officer and Treasurer of the Company. Pursuant to the terms of Mr. Krause’s offer letter, Mr. Krause’s annual base salary is $675,000 and he is eligible to receive a target cash bonus opportunity equal to 100% of his annual base salary, prorated to 50% for 2022, subject to the terms and conditions of the Rollins, Inc. Executive Bonus Plan and the Human Capital Management and Compensation Committee’s approval of the performance goals. In connection with the commencement of Mr. Krause’s employment, the Company paid Mr. Krause a one-time signing bonus in the amount of $500,000 and a one-time make-whole cash award in the amount of $430,000 to compensate him for amounts forfeited by his prior employer upon joining the Company. Both cash payments were subject to normal withholdings, and subject to full repayment in the event Mr. Krause leaves the Company before twelve-months from his start date. Mr. Krause also received a one-time equity award of restricted stock units with a grant date fair market value of $2,500,000 based on the closing price of the Company’s stock on September 1, 2022, that will vest over a three-year period beginning on January 1, 2023, with one-third of the award vesting on that date and the remaining two-thirds vesting in equal portions on each subsequent anniversary of that date, subject to the terms and conditions of the Company’s 2018 Stock Incentive Plan. Mr. Krause is also eligible to receive an annual target equity opportunity of 200% of his annual base salary beginning in 2023, subject to the terms and conditions of the Company’s 2018 Stock Incentive Plan. In addition, Mr. Krause received relocation assistance in connection with his move to the Atlanta, Georgia area and is also eligible to participate in certain benefit programs available to similarly situated executives of the Company and other benefit programs available to all full-time employees of the Company following the completion of sixty (60) days of service with the Company.

The terms of Mr. Krause’s offer letter were approved by the Human Capital Management and Compensation Committee. In determining Mr. Krause’s initial compensation arrangement, the Committee took into consideration Mr. Krause’s skills and experience and the competitive market for similar positions at other comparable companies based on a review of compensation data provided by the Committee’s compensation consultant.

Compensation Setting Process

Role of the Human Capital Management and Compensation Committee

Under its charter, the Human Capital Management and Compensation Committee is responsible for, among other things:

The Human Capital Management and Compensation Committee is composed of three non-employee directors, Mr. Jerry W. Nix (Chairperson), Gregory B. Morrison and Louise S. Sams, each of whom is independent. Dr. Thomas Lawley served on the Human Capital Management and Compensation Committee until his retirement on April 26, 2022.

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The Human Capital Management and Compensation Committee has the authority, in its sole discretion, to retain or obtain the advice of any compensation consultant, legal counselor or other advisor to assist the Committee in the performance of its duties, and shall be directly responsible for the appointment, compensation and oversight of the work of any such compensation consultant, legal counsel or other advisor so retained. The Human Capital Management and Compensation Committee may also, from time to time, and in its discretion, form and delegate all or a portion of its authority with respect to the executive officers to subcommittees; provided that such subcommittees must meet the Committee’s composition requirements set forth in its charter or under any applicable federal or state laws.

Role of Management

The Human Capital Management and Compensation Committee solicits input from the Chairman, and the Chief Executive Officer and President with respect to the performance of the other executive officers and their compensation levels. The Vice President of Total Rewards also provides the Human Capital Management and Compensation Committee with input as it pertains to the compensation of all executive officers.

The Role of Stockholder Say-on-Pay Votes

We provide our stockholders with the opportunity to cast a non-binding advisory vote on executive compensation (a “say-on-pay proposal”) every three years. At our annual meeting of stockholders held in April 2020, a substantial majority of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Human Capital Management and Compensation Committee believes this affirms the stockholders’ support of our approach to executive compensation. The stockholders voted to hold a say-on-pay advisory vote on executive compensation every three years, and the Board resolved to accept the stockholders’ recommendation. As a result, stockholders are being asked to vote on the Company’s non-binding advisory vote on executive compensation at the Company 2023 Annual Meeting of Stockholders, as described under the section titled “Proposal 2: Advisory (Non-Binding) Vote on Executive Compensation” on page 29. The Human Capital Management and Compensation Committee will continue to consider the outcome of our say-on-pay votes when making future compensation decisions for our executive officers.

Role of the Human Capital Management and Compensation Committee Consultant

In October 2021, upon the recommendation of the Company’s management, the Human Capital Management and Compensation Committee approved the engagement of Mercer US LLC (“Mercer”) an independent executive compensation advisory firm, to serve as its independent compensation consultant. In doing so the Human Capital Management and Compensation Committee reviewed information regarding the independence and potential conflicts of interest of Mercer. The Human Capital Management and Compensation Committee members took into account, among other things, the factors enumerated by the SEC and NYSE for evaluating compensation advisor independence, including, without limitation, the engagements and fees described below, and concluded that Mercer is independent and that no conflict of interest exists. Mercer attended all Human Capital Management and Compensation Committee meetings in 2022 and advised the Human Capital Management and Compensation Committee with respect to 2022 executive compensation decisions. The Human Capital Management and Compensation Committee at any time has sole authority to replace its compensation consultant, or from time to time, hire additional consultants, legal counsel and such other advisors as necessary to assist with the execution of its duties and responsibilities.

During Mercer’s engagement in 2022, Mercer reviewed the Company’s director and executive officer compensation strategy and programs to ensure appropriateness and market-competitiveness. Mercer’s fees for director and executive compensation consulting services provided to the Human Capital Management and Compensation Committee in 2022 were $145,978. During 2022, management retained the services of Mercer to provide healthcare consulting services. The total fees paid for these services in 2022 were $187,232. The services provided by Mercer to management were not in the purview of the Human Capital Management and Compensation Committee and thus did not require approval by such Committee.

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Peer Group Benchmarking Analysis

As part of its executive compensation review for 2022, the Human Capital Management and Compensation Committee asked Mercer to develop a peer group that serves as a primary comparator group for assessing the competitiveness of the Company’s executive compensation. As part of this process, Mercer recommended a peer group comprised of 15 companies, with each peer having revenue between 1/3 to 2.5 times the Company’s revenue. The appropriateness of the peer group was based on the industry, size, organizational type, and comparability of business complexity The Peer Group companies generally had a majority of operations in the environmental and facilities services industry, and variations in their revenues, assets and market capitalization versus the Company were considered when the group was selected. Where possible, each company position was compared to industry data using functional counterparts or executives with similar roles at the peer companies, as well as compensation data disclosed in proxy statements filed in 2022.

The Human Capital Management and Compensation Committee considered the peer group benchmarking analysis provided by Mercer comparing the compensation components of salary, annual incentives, long-term incentives, and total compensation of the Company’s CEO and other executive officers relative to pay programs of the selected peer group. The Human Capital Management and Compensation Committee believes the Company’s executive compensation program is fair, competitive with marketplace practices and effective in enhancing shareholder value.

The following companies were included in the Peer Group for 2022:

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Policies Regarding Stock Ownership by Executive Officers

Stock Ownership Guidelines

We currently have Stock Ownership Guidelines (the “Guidelines”) for our executive officers and other key executives as designated by the Human Capital Management and Compensation Committee. The purpose of these Guidelines is to align the interests of our executives with the interests of our stockholders. The current Guidelines as determined by the Human Capital Management and Compensation Committee include:

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Participants under the Guidelines have a period of five years to adhere to the Guidelines. Participants have their individual ownership amount established based upon their annual base salary at the time they became subject to the Guidelines and the Company’s average closing common stock price for the prior 90-day period. Promotions into a different position category require recalculation of a Participant’s ownership amounts, as appropriate.

Shares counted toward this requirement are based on shares beneficially owned by such participant (as beneficial ownership is defined by Rule 16a-1(a)(2) under the Exchange Act).

Once achieved, ownership of the amount under the Guidelines should be maintained for as long as the participant is subject to the Guidelines.

In addition, the Human Capital Management and Compensation Committee has approved and adopted stock ownership guidelines applicable to our non-employee directors. Information with respect to our non-employee directors’ stock ownership guidelines is set forth in “Non-Employee Director Stock Ownership Guidelines” on page 18.

We Strongly Discourage Pledging of Common Stock

Under our insider trading policy, we strongly discourage our employees, including our named executive officers and the members of our Board of Directors, from pledging or otherwise encumbering, individually owned or granted Company securities.

Clawback Policy

Our executive bonus agreements contain a provision that provides that, among other things, if any bonus amount is paid as a result of misrepresented or inaccurate performance, the Company may require repayment of some or all of the excess bonus paid, subject to applicable laws. This recoupment policy reflects the Company’s high ethical standards and strict compliance with accounting and other regulations applicable to public companies. As all incentives and awards remain within the discretion of the Human Capital Management and Compensation Committee, the Committee also retains the ability to take any restatements or adjustments into account in subsequent years. In addition, the Sarbanes-Oxley Act requires in the case of accounting restatements that result from material non-compliance with SEC financial reporting requirements, that the Chief Executive Officer and Chief Financial Officer must disgorge bonuses and other incentive-based compensation and profits on stock sales received during the 12-months following publication of the restated financials, if the non-compliance results from misconduct.

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Tax Deductibility of Compensation

As a result of the Tax Cuts and Jobs Act, starting with compensation payable in 2018, Section 162(m) of the Internal Revenue Code limits us from deducting compensation, including performance-based compensation, in excess of $1,000,000 paid to our executive officers. The Human Capital Management and Compensation Committee will continue to retain full discretion to award compensation packages that best attract, retain and reward successful executive officers. Therefore, the Human Capital Management and Compensation Committee anticipates that it will award compensation that is not fully deductible under Section 162(m).

HUMAN CAPITAL MANAGEMENT AND COMPENSATION COMMITTEE REPORT

The Human Capital Management and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on such review and discussions, the Human Capital Management and Compensation Committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Respectfully submitted by the Human Capital Management and Compensation Committee of the Board of Directors

Jerry W. Nix, Chairperson

Gregory B. Morrison

Louise S. Sams

This report of the Human Capital Management and Compensation Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act.

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EXECUTIVE OFFICER COMPENSATION & BENEFITS

SUMMARY COMPENSATION TABLE

The following table provides information regarding the compensation awarded to, earned by and paid to each of our named executive officers for the years indicated below:

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GRANTS OF PLAN-BASED AWARDS IN 2022

The following table shows for the year ended December 31, 2022, certain information regarding grants of plan-based awards to our named executive officers.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The table below sets forth the total number of restricted shares of Common Stock outstanding at December 31, 2022 and held by the Company’s named executive officers but which have not yet vested, together with the market value of these unvested shares based on the $36.54 closing price of our Common Stock on December 31, 2022. The Company does not have any outstanding option awards held by the named executive officers.