Hello, welcome to the annual meeting of shareholders of Kelly Services, Incorporated. Please note that today's meeting is being recorded. Following the remarks, we'll have a question and answer session. You can submit questions or comments at any time by clicking on the Message Q&A tab. Now, it is my pleasure to turn today's meeting over to Chris Hunt, Chairman. The floor is yours.
Good morning, welcome to Kelly Services' 2026 annual meeting of shareholders. I am Chris Hunt, Chairman of the Board. I'm pleased to have you join this webcast, I will start by thanking Kelly's board of directors, all of whom are joining us today. Also, thank you to Kelly's leadership team and other employees and guests who have joined us. Holding our annual meeting virtually allows all shareholders, regardless of location, to participate safely and conveniently. Positive shareholder feedback supports continuing this format. 2025 was a year of transition for Kelly. We navigated a dynamic macroeconomic environment characterized by an evolving policy landscape and a mixed labor market. Against this backdrop, Kelly took decisive action to position the company for long-term growth. Critical to positioning Kelly for future growth was the appointment of Chris Layden as Chief Executive Officer in September 2025.
Chris succeeded Peter Quigley, who retired following a distinguished 23-year career with the company. Chris is a dynamic leader with extensive industry experience, and his appointment reflects Kelly's commitment to driving growth and enhancing its operational capabilities and service delivery. Kelly's board of directors also continues to evolve while remaining steadfast in its commitment to sound governance. On January 30th, 2026, Kelly entered into an agreement with Hunt Equity Opportunities, LLC, related to its purchase of the controlling stake of the company's Class B common stock previously held by the Terence E. Adderley Revocable Trust K. As part of the agreement, four new directors designated by Hunt joined the board, including myself as Chairman, and James K. Hunt, who serves as lead director, Angela Brock-Kyle, and Edward Escudero. Kelly's CEO, along with directors Robert S. Cubbin, Amala Duggirala, and Leslie A. Murphy, continued their service.
Kelly's board brings a strong combination of leadership, expertise, and vision that will contribute to effective governance and support management in maximizing value for shareholders. In connection with these changes, Terrence B. Larkin, Gerald S. Adolph, George S. Corona, InaMarie F. Johnson, and Peter W. Quigley resigned from the board. We thank each of them for their contributions and dedication to Kelly. Looking ahead, we remain focused on accelerating profitable growth and unlocking Kelly's full potential. We are confident that our path to revenue growth and margin expansion will help us deliver lasting value to you, our shareholders. Following the business portion of the meeting, CEO Chris Layden will share an update on Kelly's strategic goals. Following Chris' remarks, we will address any questions submitted from Class B shareholders. Questions may be submitted in the Q&A text box on the web portal at any time during this meeting.
A playback of this meeting will be available on our virtual shareholder meeting site within 24 hours and will remain there until the 2027 shareholders meeting. The agenda and meeting guidelines are also posted on this meeting website. I'll now call the meeting to order. Vanessa Williams, General Counsel and Corporate Secretary of Kelly and secretary for this meeting, certified that on April 13th, proper notice of this meeting, including the date, time, meeting purpose, and the web address, was provided to all shareholders of record as of March 19th, 2026. The proxy holders appointed by the board to vote on behalf of the shareholders are Vanessa Williams and Troy Anderson. I appoint Cynthia Mull from the Office of the Corporate Secretary as the Inspector of Election. Well, we have a sufficient number of voting shares of the company present by proxy to constitute a quorum.
Class B shareholders who have not voted may do so now by clicking the Vote button on your screen. The first item of business is the election of directors. The 11 director nominees, as identified in the 2026 proxy statement, are Angela Brock-Kyle, Robert S. Cubbin, Amala Duggirala, Edward Escudero, James K. Hunt, Christopher Layden, Ryan McCrory, Leslie Murphy, Michael Wartell, George Young, and myself. I will now entertain a motion for their election.
Mr. Chairman, I am Vanessa Williams, a Class B shareholder. I move the election of directors for a term expiring at the annual meeting of shareholders in the year 2027 or until the election and qualification of their successors.
Thank you, Vanessa. Is there a second to the motion?
Yes, Mr. Chairman. I am Troy Anderson, a Class B shareholder. I second the motion.
Thank you, Troy. The second business item is to consider proposal to approve by advisory vote the company's executive compensation. Is there a motion to approve this proposal?
I move the adoption of the compensation of the named executive officers, commonly known as say on pay, as disclosed in the company's 2026 proxy statement.
Thank you. Is there a second to the motion?
I second the motion.
Thank you. The third item of business is to consider the proposal to approve the amendment of the company's restated certificate of incorporation to permit stockholder action by written consent, allow the chairperson and majority Class B holders to call special meetings, and allow stockholders to fill board vacancies and new directorships. Is there a motion to approve this proposal?
I move the adoption of the amendment of the company's restated certificate of incorporation to permit stockholder action by written consent, allow the chairperson and majority Class B holders to call special meetings, and allow stockholders to fill board vacancies and new directorships, as disclosed in the company's 2026 proxy statement, be approved.
Thank you. Is there a second to the motion?
I second the motion.
The fourth and final item of business is to consider the proposal to ratify the appointment of PricewaterhouseCoopers as Kelly Services' independent registered public accounting firm for 2026. Is there a motion to approve this proposal?
I move that the proposal to ratify the appointment of PricewaterhouseCoopers as the independent registered public accounting firm for the year 2026 be approved.
Thank you. Is there a second to the motion?
I second the motion.
Thank you. Cynthia, what are the results of the election on the four proposals?
While a final tabulation will be made following today's meeting, all four proposals are approved, having received the necessary vote of the Class B shares outstanding and entitled to vote at this meeting.
Thank you, Cynthia. This concludes the business portion of the meeting. Without objection, I declare the 2026 annual meeting adjourned. I now invite Kelly CEO, Chris Layden, to provide an update on the state of the company. Chris?
Thank you, Chris, and hello everyone. It's great to be with you today. Before I begin, I'll refer you to the safe harbor statement included as part of the rules of conduct and agenda slides found on both the annual meeting website and on kellyservices.com. This applies to any forward-looking statements that I may make as part of my comments during today's webcast. As Chris noted, 2025 was a year of transition for Kelly. At each step, our team demonstrated the resilience and agility that have defined this company for nearly 80 years. Throughout the year, we concentrated on driving growth in more resilient markets and capitalized on positive trends in each of our business segments. Kelly Education once again delivered year-over-year revenue growth, driven by continued fill rate improvement and solid demand for our market-leading K-12 staffing and pediatric therapy specialties.
In the third quarter, Kelly Education achieved a portfolio-wide 90% fill rate for the first time, a testament to the operational excellence and deep customer relationships that have made this business one of the best organic growth stories in our industry. We stabilized the underlying performance of our SET and ETM businesses, even as we navigated discrete demand reductions from the federal government and three large customers. Within SET, both our telecom and engineering specialties grew over the prior full year period, with telecom achieving double-digit growth on robust demand from large carriers. Within ETM, outcome-based solutions, excluding contact center and payroll process outsourcing grew on a full year basis. While our MSP specialty gained momentum through new customer wins. Across both segments, we continued to align resources with demand and drive structural efficiencies in our operating model. Kelly's scale and capabilities continue to earn industry recognition.
Everest Group named Kelly a leader and star performer in each of its contingent talent and strategic solutions PEAK matrices, marking the first time any company has achieved that distinction. HRO Today named Kelly the number one global provider of total workforce solutions. These accolades reflect the breadth and depth of our differentiated offerings and the trust that the world's leading employers place in Kelly. We also reached a significant milestone in our technology modernization initiative, completing the cut-over of our SET acquisitions to the unified technology platform we acquired through Motion Recruitment Partners. This is the first milestone of a multi-phase strategy to replace legacy systems with a modern integrated platform. Our SET business is already benefiting from deeper data insights, AI and automation at scale, and enhanced productivity, benefits that will extend across the enterprise as we continue to execute.
We accelerated the integration of human-centric AI as well. In the fourth quarter, we launched Grace Boost, a proprietary AI platform deployed to every Kelly employee, integrating generative AI into everyday workflows. We also deployed a scalable AI recruiting solution that combines the power of people and technology to deliver faster, more cost-effective results for large employers. These practical application reflect Kelly's commitment to putting AI directly into the hands of our employees and customers to solve real business challenges. Turning to 2026, we are taking deliberate steps to position Kelly to capitalize on the growth opportunities in front of us. We have continued to evolve our leadership team through key appointments. In February, Pat McCall joined Kelly as Chief Growth Officer, bringing 30 years of sales and operations experience and a proven track record, accelerating profitable growth.
In March, Joel Leege was appointed President of SET, bringing nearly three decades of specialty staffing experience and a track record of driving above market growth. Our refreshed management team is aligned and energized to accelerate progress on our strategy. Looking ahead, we have clear organic growth drivers and a pathway to top-line growth and margin expansion in the second half of 2026. In education, our pipeline of net new K-12 opportunities remain strong. In SET, we are focusing on high growth areas, including data centers, AI, and cybersecurity. In ETM, significant new MSP and enterprise staffing wins are coming online. Our strategic initiatives focused on going to market as one Kelly enterprise, modernizing our technology, and recentering our culture around customer centricity, visibility, and accountability are designed to ensure we capitalize on these opportunities.
Later this year, we will celebrate 80 years of Kelly's leadership in workforce strategy and solutions, a testament to the endurance of our mission to connect people to work in ways that enrich their lives. We move forward with confidence in our strategy, underpinned by a strong balance sheet, healthy cash generation, and a balanced approach to capital allocation. The investments we're making in our people, portfolio, and technology are positioning Kelly to drive profitable growth and realize the company's full potential. In closing, I'd like to thank our employees for their dedication to serving Kelly, our clients, and our talent. I'd also like to thank our chairman and each of our board members for their support and commitment to Kelly. To you, our valued shareholders, we are grateful for your continued trust.
I am confident that 2026 will mark an inflection point on our journey to accelerate profitable growth and value creation, and I look forward to delivering on that commitment.
Thank you, Chris. We will now address questions received from shareholders.
Thank you, Mr. Chairman. Looking at the portal, there are no questions for us today. There being no questions, we can thank everyone for joining. If there are additional questions, you can reach out at investor relations 248-251-7264.
Thank you so much for joining us.
This concludes the meeting. You may now disconnect.