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.)

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Parsons Corporation

(Name of Registrant as Specified In Its Charter)

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

Notice of 2024

Annual Meeting

of Stockholders

and Proxy Statement

April 16, 2024

Carey Smith, Chair, President and Chief Executive Officer

To Our Shareholders

Imagine next. At Parsons, we create the future of national security and global infrastructure. We examine every element, including future customer needs, macroenvironment trends, technology evolution, and business model innovation to invent what has never been done. For 80 years, that momentum has driven Parsons forward, and we plan for it to fuel our success for the next 80 years.

Managing a transformational linear city driven by 100% renewable energy; applying artificial intelligence (AI) to determine a cyber adversary’s next move; creating innovative means to investigate and remediate emerging contaminants from surface water, groundwater, and soil; countering unmanned air systems; providing air base air defense; protecting critical infrastructure from cyber attacks; applying a commercial as-a-service business model to space command and control—80 years ago, these tasks would have astounded the world. Today, they are what Parsons is doing around the globe every day to imagine next.

Global Trends

We are in an unprecedented time. In national security, the United States is engaged in simultaneous conflicts abroad, preventing the proliferation of weapons of mass destruction, and countering cyberattacks against United States critical infrastructure, while carefully managing near-peer economic, diplomatic, and military ambitions. The US defense budget is projected to grow at a rate of 3% in the upcoming year, and there is record investment in the research, development, test, and evaluation budget.

In parallel, the demand for global infrastructure is unprecedented, with shifting priorities, including sustainability, innovative financing, new trends post-COVID, resiliency, and technology application. According to Research and Markets, the global infrastructure sector market is estimated at $2.57 trillion in 2023 and is projected to reach $3.48 trillion by 2028, for a compound annual growth rate of 6.27% from 2023 to 2028.

Parsons has the right team and the right portfolio at the right time. We are a solutions integrator that differentiates through advanced technology, including AI, cybersecurity, cloud-enabled solutions, and critical infrastructure protection. We have a unique and complementary portfolio at a time when critical infrastructure is under cyber attack and a company must both understand the domain and have the capabilities to protect it. Our dedicated global team consistently performs, and our status as a destination employer enables strong hiring and retention.

With a macroenvironment aligned to our six core markets of cyber and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation, and urban development, Parsons is able to deliver consistent results year-over-year and quarter-over-quarter for our shareholders. Our more than 18,500 employees are focused on executing our customers’ national security and infrastructure missions at a time when operationally relevant solutions are needed.

2023 Results

During our March 2023 Investor Day, we defined our strategy to move up the solutions integration value chain in our six end markets. Our strategy is working. Total revenue for fiscal year 2023 was $5.4 billion, which was a 30% increase from the prior year and was up 23% on an organic basis. Fiscal year 2023 adjusted EBITDA of $465 million increased 32% from 2022, and adjusted EBITDA margin increased 13 basis points, to 8.5%. Operating cash flow for the full year increased 72%, to $408 million dollars. Ramping up new business wins, delivering on contract growth, and continued strong hiring and retention were key drivers to achieving these outstanding results. As a result of our strong performance, we saw stock price appreciation of 35.6% during the year.

In 2023, we set records for major financial metrics, including industry-leading organic revenue growth in both our Federal Solutions and Critical Infrastructure segments, total revenue growth, adjusted EBITDA which also grew faster than revenue, and all-time highs for cash flow and contract awards. These are the best results Parsons has delivered since our initial public offering.

Significant Accomplishments

– M&A: We completed three strategic acquisitions in 2023, two in our Critical Infrastructure segment and one in our Federal Solutions segment. Each brings enhanced and complementary capabilities to Parsons with immediate synergies.

– Win Rates: Parsons had record win rates, at 66% overall. The recompete win rate was 93%, and we have now won four of our major recompetes, each valued at ~$2 billion, by securing the Federal Aviation Administration Technical Support Services Contract in 2023.

– Won 15 programs > $100 million,including the largest new business contracts we have ever won in both segments. Representative wins include the following:

– Book-to-bill: We accomplished a trailing 12-month book-to-bill of 1.1x, and our Critical Infrastructure segment had 13 consecutive quarters of > 1.0x book-to-bill. In addition to our $8.6 billion backlog, we have $14 billion in contracts that have been awarded but not yet booked.

– Recognition: We were recognized for our performance, including placing as one of Engineering News-Record’s top three companies in four categories: program management, construction management, professional services, and program/construction for fee. We received the Development Project of the Year award for the Lusail City Residential Project in Qatar. Parsons EMEA was also recognized by both Dubai Municipality and ROSHN for exemplary consultancy and design services. The Office of the Director of National Intelligence gave us the National Intelligence Collection Award. The Department of Defense recognized us with our fourth mentor-protégé Nunn-Perry Award.

– Blue Grass/Pueblo chemical weapons elimination: Parsons was part of the team that helped the United States comply with the 1997 Chemical Weapons Convention agreement by destroying our country’s last chemical weapon.

– Achieved AS9100 certification: This is a testament to our aerospace quality management system.

– Delivered first Recovery of Airbase Denied by Ordnance (RADBO) system: Parsons delivered our first RADBO system, which included the first ground-based directed energy weapon system to be approved for production, to the Air Force.

Vision And Investment Thesis

Our vision is to move up the value chain as a solutions integrator that differentiates through advanced technology and to prime and win larger, more profitable contracts. Our mission is to deliver digitally enabled solutions in an operationally relevant time for our defense, intelligence, and infrastructure customers.

So, what makes Parsons different and why are we well positioned for the future?

– We have an experienced management team that delivers on commitments.

– Our people-first culture and mission focus attracts destination employees.

– All six of our end markets are growing, enduring, and profitable, each with estimated compound annual revenue growth rates over the next three years between 5% and 12%.

– We have a distinguished national security portfolio positioned to deliver solutions that outpace near-peer threats.

– There is unprecedented global infrastructure spend, including $1.5 trillion in MEA, $1.2 trillion in the US, and $140 billion in Canada expected in the future.

– We have a favorable financial outlook and proven, effective capital deployment strategy. We have a strong balance sheet, and at the end of the year had low debt, enabling further acquisitions as we enter 2024.

Responsible Corporation

Parsons has an 80-year history of cultivating a responsible enterprise. Driven by our core values, Parsons has long been recognized for excellence in corporate citizenship. 2023 continued that legacy of recognitions and our commitment to advancing sustainability, equity, and engagement. In 2023, Parsons was named one of the World’s Most Ethical Companies by Ethisphere for the 14th consecutive year, reinforcing the critical importance of ethics and integrity in driving our culture of performance. That success is built on our active participation in the communities where we live and work, supporting organizations like the Tragedy Assistance Program for Survivors (TAPS), where we have raised $1.3 million in support of military families in the 16 years of our partnership; in 100 employees volunteering a total of 450 hours to support global technology education nonprofit Technovation in its efforts to advance women in STEM; and in a global back-to-school fundraiser where we supported 1,300 students in communities where we work with school supplies, meals, and uniforms. In total, Parsons employees logged more than 35,000 volunteer hours in 2023, a company record which illustrates our commitment to being a responsible partner.

In 2023 we announced our commitment to set near- and long-term targets for Greenhouse Gas (GHG) emissions aligned with 1.5C and net-zero through the Business Ambition for 1.5C campaign, a leading global coalition committed to taking urgent climate action.

Our initiatives have been recognized by leading organizations, including the following:

The Future

In a world of uncertainty and change, our strategy for the future remains constant and focused on continuing to move up the value chain in our six well-funded and growing core end markets. Our expertise in innovative technologies, our mission-focused ethos, and our commitment to solving our customers’ toughest challenges, as outlined in our strategy, are the foundation for our future. While no one can predict the future, we can certainly imagine next and know that digital technology, particularly AI and cyber, will play a significant role.

In closing, I want to thank the employees of Parsons Corporation for delivering results for our customers and shareholders in 2023. It is our mission plus our unique culture that engage and excite our employees to imagine next.

Carey Smith

Chair, President, and CEO

NOTICE OF PARSONS CORPORATION 2023 ANNUAL MEETING OF STOCKHOLDERS

On Behalf of the Board of Directors,

/s/ Michael R. Kolloway

Michael R. Kolloway

Chief Legal Officer and Secretary

March 3, 2024

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 16, 2024. This Notice of Annual Meeting and Proxy Statement and our 2023 Annual Report are available at www.parsons.com.

TABLE OF CONTENTS TO PROXY STATEMENT

PROXY STATEMENT SUMMARY

This summary highlights certain information contained elsewhere in this proxy statement. The summary does not contain all of the information that you should consider, and you should review our Annual Report on Form 10-K for the year ended December 31, 2023 and the entire proxy statement carefully before voting.

Unless the context otherwise requires, (i) the terms “Parsons,” “the Company,” “we,” “us” and “our” refer to Parsons Corporation and its consolidated subsidiaries, (ii) “our Board” or “the Board” means the Board of Directors of the Company; (iii) “stockholder” means holders of our common stock; and (iv) “you,” “your,” “yours,” or other words of similar import in this proxy statement refers to stockholders entitled to vote on the matters to be presented at the annual meeting.

2024 Annual Meeting of Stockholders

Voting Matters and Board Recommendations

Stockholders are being asked to vote on the following matters at the 2024 Annual Meeting of Stockholders:

How to Vote

Stockholders as of the record date may vote in person at the meeting or vote in advance by submitting a proxy by Internet, telephone, or mail as follows:

Company Performance and 2023 Highlights

We are very proud of our accomplishments in 2023:

We calculate adjusted EBITDA as net income attributable to Parsons Corporation, adjusted to include net income attributable to noncontrolling interests and to exclude interest expense (net of interest income), provision for income taxes, depreciation and amortization and certain other items that we do not consider in our evaluation of ongoing operating performance. These other items include, among other things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs, equity-based compensation, and expenses related to our corporate

restructuring initiatives. EBITDA and adjusted EBITDA are non-GAAP metrics, and we include a reconciliation of both EBITDA and adjusted EBITDA to net income for fiscal years 2023 and 2022 as Appendix A. It is an important component of our compensation programs described in this proxy statement.

Our Board of Directors

This year’s Board nominees include four current Class II Directors—Mark K. Holdsworth, Steven F. Leer, M. Christian Mitchell, and David C. Wajsgras. Each nominee is listed below along with the continuing Directors,and you can find additional information under “Proposal 1: Election of Directors” beginning on page 7.

Corporate Governance Highlights

Executive Compensation Highlights

Corporate Citizenship Highlights

Imagine Next extends to our commitment to imagining what’s next for the communities where we live and work. Driven by our core values – safety, quality, innovation, sustainability, integrity, and diversity – and underpinned by our CARE (Cultivating a Responsible Enterprise) strategy,our Parsons Gives Back program outlines our active charitable and engagement support to communities and organizations towards imagining a safer, healthier, more connected, and more secure world.

Our Parsons Gives Back efforts are employee-driven and focused on veteran/military, Educational/STEM Outreach, and Vibrant Communities causes. The CG&R Committee of the Board oversees Parsons Corporation’s ESG efforts and receives regular reports from the Chief Business Operations Officer and ESG vice president.

Recognitions and initiatives include:

Our commitment to enhancing diversity, equity and inclusion as fundamental to our corporate culture is evident through our support of active duty and veteran employees (MILVET), employees in the LGTBQ+ community (PRIDE Alliance), employees of African/American heritage (BELONG),employees of Hispanic/Latino heritage (HOLA), Parsons’Women’s Roundtable (PWR), and employees of Asian and Pacific Islander heritage (SOAR), and their allies. Parsons also launched its seventh employee resource group, the Formation of Rising Career Employees (FORCE), designed to provide a supportive community for employees who are in the early stages of their careers at Parsons.

Other notable recognitions include:

PROPOSAL 1: ELECTION OF DIRECTORS

Board Structure

Our Board of Directors currently consists of eleven members. In accordance with our certificate of incorporation, our Board of Directors are divided into three classes with staggered three-year terms. At each annual meeting of stockholders after the initial classification, the successors to the Directors whose terms will then expire will be elected to serve from the time of election and qualification until the third annual meeting following their election. Our current Directors are divided among the three classes as follows:

Any increase or decrease in the number of Directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the Directors. This classification of our Board of Directors may have the effect of delaying or preventing changes in control of our company.

Class II Election

The four nominees for election as Class II Directors are listed below. If elected, the nominees for election as Class II Directors will serve for a term of three years and until their successors are elected and qualify. Unless you instruct us on the proxy card to vote differently, we will vote signed, returned proxies FOR the election of such nominees. If for any reason any nominee cannot or will not serve as a Director, we may vote such proxies for the election of a substitute nominee designated by the Board.

Class II Nominees

To be elected in, a nominee must receive a plurality of the votes cast. The Corporate Governance and Responsibility Committee and the Board believe that each Class I Nominee brings a strong and diverse set of skills and experiences to the Company, including significant government, public company, financial, and strategic experience, that strengthen our Board’s independent leadership and effectiveness with respect to our business and long-term strategy. The Class II Nominees are as follows:

CONTINUING DIRECTORS

The seven Directors whose terms will continue after the annual meeting and will expire at the 2025 annual meeting (Class III) or the 2026 annual meeting (Class II) are listed below.

CORPORATE GOVERNANCE AND GENERAL INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES

Our Board and Leadership Structure

Our Board currently consists of eleven Directors, nine of whom are independent. There are no family relationships among our executive officers and Directors. Each incumbent member of the Board attended or participated in 90% or more of the aggregate of (i) the total number of meetings of the Board (held during the period for which such person has been a Director) and (ii) the total number of meetings held by all Committees of the Board on which such person served (during the periods that such person served).

Our Board of Directors recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure to provide effective oversight of management. Our bylaws and corporate governance guidelines provide our Board of Directors with flexibility to combine or separate the positions of Chair of the Board of Directors and Chief Executive Officer (CEO). Our Board of Directors currently believes that our existing leadership structure is effective, provides the appropriate balance of authority between independent and non-independent Directors, and achieves the optimal governance model for us and for our stockholders. The Chair/CEO has the best in depth knowledge of the company’s opportunities and challenges, develops agendas that ensure the Board’s time is focused on the most critical matters, and enhances our ability to communicate our strategy to our stockholders, customers and employees.

Ms. Smith serves as our Chair of the Board of Directors.

Our corporate governance guidelines provide that we have a lead independent Director. Our Lead Independent Director is Steven F. Leer. In that role, he has called meetings of the independent Directors and chaired such meetings, including all executive sessions of the Board of Directors, facilitated communications between our Chair and the independent Directors of the Board of Directors, and reviewed the quantity, quality and timeliness of information provided to the Board, among other duties described in our corporate governance guidelines.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines. The Board and the Corporate Governance and Responsibility Committee are responsible for reviewing and amending these guidelines as they deem necessary and appropriate. The Corporate Governance and Responsibility Committee is responsible for overseeing the system of corporate governance of the Company and the corporation’s environment, social and governance initiatives. The Corporate Governance and Responsibility Committee has reviewed and approved an updated Skills Matrix for Board members (which is included in this proxy statement) and to reflect the Committee’s oversight of climate-related initiatives and documentation. The Corporate Governance Guidelines are available without charge on the Investor Relations portion of our website, www.parsons.com.

Codes of Conduct and Ethics

We have adopted written codes of conduct and ethics that apply to our Directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and to third parties with whom we conduct business, including agents, representatives, joint venture partners, consultants and subcontractors. We have posted current copies of these codes on our website, www.parsons.com. In addition, we will post on our website all disclosures that are required by law or NYSE listing standards concerning any amendments to, or waivers from, any provision of the codes.

Board Meetings and Attendance

Directors are expected to attend each Board meeting, each meeting of the Committees on which they serve, and the Annual Meeting of Stockholders. During fiscal year 2023, the Board held seven meetings and acted by written consent. Each of our Directors who served as a Director during fiscal 2023 attended 90% or more of the aggregate total number of meetings of the Board (during the time in which they served) and the Board Committees on which he or she served that were held during the time he or she was a director in fiscal 2023.

Risk Oversight

Although management is responsible for the day-to-day management of the risks our company faces, our Board of Directors and its Committees take an active role in overseeing the management of our risks and bear the ultimate responsibility for risk management. The Board of Directors regularly reviews information regarding our operational, financial, legal, data security and strategic risks. Specifically, senior risk management personnel attend quarterly meetings of the Board, provide presentations on operations including significant risks, and are available to address any questions or concerns raised by our Board of Directors.

In addition, our Board of Directors’ Committees assist the Board of Directors in fulfilling its oversight responsibilities in certain areas of risk. The Audit and Risk Committee coordinates the Board of Directors’ oversight of our internal control over financial reporting, disclosure controls and procedures, risk, related party transactions, code of conduct, data and information security. The Compensation and Management Development Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs as well as succession planning as it relates to our Chief Executive Officer and executive leadership. The Corporate Governance and Responsibility Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization, membership and structure, succession planning for our Directors, and corporate ESG matters. When any of the Committees receives a report related to material risk, the chair of the relevant Committee will report on the discussion to the full Board of Directors.

Information and Security Risk

Our Chief Security and Risk Officer is responsible for the development, delivery and maintenance of enterprise information, security and risk management programs which safeguard Parsons’ business information, assets, and its supporting infrastructure against unauthorized use, disclosure, modification, damage or loss. Our Security Operations Centers provide continuous monitoring of information systems to prevent, detect, and respond to cyber events and to engage with our Chief Legal Officer to discuss such responses and any appropriate disclosure requirements. We also provide training to our global workforce on cyber security awareness, including online training courses, interactive discussions on information security, and a key role on the corporation’s critical response management committee. Our security control protocols map directly to multiple security compliance frameworks, including ISO 27001, Sarbanes-Oxley, DFARS (NIST 800-171), and stringent privacy regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). A full description of the Corporation’s procedures for managing and disclosing cyber-security risks and incidents can be found in Section 1C of the Corporation’s 10-K filed with the Securities and Exchange Commission on February 14, 2024.

Annual Board Performance Assessment

The Board and each of the Audit and Risk, Compensation, and Corporate Governance and Responsibility Committees perform annual assessments of their operations and effectiveness and set goals for the future.

During 2023, the Board and the Committees performed an internal self-assessment. The Corporate Governance and Responsibility Committee reviewed and evaluated the skills, industry and public company experience, independence, and diversity of the Board and provided feedback for the Board to achieve our business, governance and sustainability objectives. The Chair of the Corporate Governance and Responsibility Committee and the Lead Independent Director led a discussion of achievements during 2023 and goals and objectives with the Board.

The Skills Matrix reviewed and approved by the Corporate Governance and Responsibility Committee, and the full Board of Directors, is referenced below.

1 All Board members have public company and Executive Experience.

Board Independence

Nine of our current eleven Directors are independent under our Corporate Governance Guidelines and applicable New York Stock Exchange (“NYSE”) listing standards. The Board has determined that Messrs. Holdsworth, Leer, McDew, McMahon, Mitchell, and Wajsgras, and Mmes. Long, Lord and Vautrinot are independent under the independence criteria for directors established by the NYSE. As a result, we currently have a majority of independent Directors and satisfy the applicable rule of the NYSE.

Selection of Nominees for Election to the Board

Both the Corporate Governance and Responsibility Committee and the Board of Directors seek the talents and backgrounds that would be most helpful to Parsons in selecting nominees to the Board. In particular, the Corporate Governance and Responsibility Committee, when recommending director candidates to the full Board of Directors for nomination, may consider whether a director candidate, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience. In addition, our corporate governance guidelines provide that a director shall retire from our Board at the next annual meeting of stockholders after he or she has reached the age of 75.

Our Commitment to Board Diversity

The Board is committed to diversity and focuses on diversity in seeking new candidates to be considered for the Board. We currently have four female Directors (Ms. Long, Ms. Lord, Ms. Smith and Ms. Vautrinot) on the Board and one African American male (Mr. McDew).

Process for Stockholders to Recommend Director Nominees

Stockholders wishing to nominate a candidate for director at an annual meeting must (a) provide Timely Notice (as defined in Section 2.04(ii) of the Company’s bylaws) to the Secretary of the Corporation, (b) provide the information, agreements and questionnaires with respect to such stockholder and its candidate for nomination as required to be set forth in the Company’s Amended and Restated Bylaws, and (c) provide any updates or supplements to such notice at the times and in the forms required by the Bylaws.

Director Orientation and Continuing Education

Each new member of the Board is provided with orientation materials and is required to attend meetings with the Executive Leadership team. In these meetings, discussion points included finance, legal, talent management and corporate strategy. In 2023, the Board received presentations from internal and external sources to consider.

Communications with the Board

Any stockholder or other interested party may contact the Board, including any non-employee Director or the non-employee Directors as a group, or the Chair by writing to our corporate Secretary at 14291 Park Meadow Drive, Suite 100, Chantilly, VA 20151. In general, any stockholder communication delivered to our Corporate Secretary for forwarding to the Board, the Chair or a specified group of Board members will be forwarded in accordance with the stockholder’s instructions. However, our Corporate Secretary reserves the right not to forward to Board members any abusive, threatening or otherwise inappropriate materials.

Board Committees

Our Board had three standing Committees in 2023: an Audit and Risk Committee, a Compensation and Management Development Committee, and a Corporate Governance and Responsibility Committee. The charter of each Committee is available without charge on the Investor Relations portion of our website, www.parsons.com.

The following chart identifies the current members and chair of each standing Committee, as well as related information.

The following is a brief description of our Committees.

Audit and Risk Committee

Our Audit and Risk Committee oversees our corporate accounting and financial reporting process. Among other matters, the Audit and Risk Committee:

The current members of our Audit and Risk Committee are Mr. Mitchell (chairperson), Mr. Leer, Ms. Long, Mr. McMahon, Ms. Vautrinot and Mr. Wajsgras. All members of the Audit and Risk Committee are independent under our Corporate Governance Guidelines and applicable New York Stock Exchange (“NYSE”) listing standards.

All members of our Audit and Risk Committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the NYSE. Our Board of Directors has determined that M. Christian Mitchell, Steven F. Leer, and David C. Wajsgras are Audit and Risk Committee financial experts as defined under the applicable rules of the SEC and have the requisite financial sophistication as defined under the applicable rules and regulations of the NYSE. Under the rules of the SEC, members of the Audit and Risk Committee must also meet heightened independence standards. However, a minority of the members of the Audit and Risk Committee may be exempt from the heightened Audit and Risk Committee independence standards for one year from the date of effectiveness of the registration statement of which this prospectus forms a part. Our Board of Directors has also determined that each of the members are independent under the heightened Audit and Risk Committee independence standards of the SEC and the NYSE. The Audit and Risk Committee operates under a written charter that satisfies the applicable standards of the SEC and the NYSE.

The Audit and Risk Committee met eight times during fiscal year 2023. The Audit and Risk Committee is briefed at least quarterly on information security operations mitigation measures to address risks related to Parsons’ global employees, information, and assets.

Compensation and Management Development Committee

Our Compensation and Management Development Committee reviews and recommends policies relating to compensation and benefits of our officers and employees. Among other matters, the Compensation and Management Development Committee:

The current members of our Compensation and Management Development Committee are Mr. Leer (chairperson), Mr. Holdsworth, Ms. Lord, Mr. McDew, Mr. McMahon, and Mr. Wajsgras. All members of the Compensation and Management Development Committee are independent under our Corporate Governance Guidelines and applicable New York Stock Exchange (“NYSE”) listing standards.

Our Board of Directors has determined that each of the members of our Compensation and Management Development Committee is independent under the applicable rules and regulations of the NYSE and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The Compensation and Management Development Committee operates under a written charter that satisfies the applicable standards of the SEC and the NYSE.

The Compensation and Management Development Committee met five times during fiscal year 2023 and also acted by written consent.

Corporate Governance and Responsibility Committee

The Corporate Governance and Responsibility Committee is responsible for making recommendations to our Board of Directors regarding candidates for directorships and the size and composition of our Board of Directors. All members of the Corporate Governance and Responsibility Committee are independent under our Corporate Governance Guidelines and applicable New York Stock Exchange (“NYSE”) listing standards.

The Corporate Governance and Responsibility Committee is responsible for overseeing our corporate governance policies and reporting, making recommendations to our Board of Directors concerning environmental, social and governance (ESG) matters. The Corporate Governance and Responsibility Committee will also, at least annually, review its Committee charter and review and evaluate the performance of the Corporate Governance and Responsibility Committee and its members, including compliance by the Committee with its charter.

The current members of our Corporate Governance and Responsibility Committee are Ms. Vautrinot (chairperson), Mr. Holdsworth, Ms. Long, Ms. Lord, Mr. McDew, and Mr. Mitchell. Our Board of Directors has determined that each of the members of our Corporate Governance and Responsibility Committee is an independent director under the applicable rules and regulations of the NYSE relating to Corporate Governance and Responsibility Committee independence. The Corporate Governance and Responsibility Committee operates under a written charter that satisfies the applicable standards of the SEC and the NYSE.

The Corporate Governance and Responsibility Committee met four times during fiscal year 2023.

Director Ownership Guidelines

On January 1, 2020, our Board adopted stock ownership guidelines which provide for equity ownership guidelines for all our non-employee Directors to further align their interests to those of our stockholders. Under the policy, each of our non-employee Directors has five years from the later of (i) January 1, 2020 or (ii) the date of commencement of his/her service on the Board to achieve equity ownership with a value equivalent to five times his/her annual cash retainer. In calculating a director’s ownership, common stock held by the non-employee director or an immediate family member, common stock owned indirectly if the individual has an economic interest in the shares or is a beneficial owner under Rule 13d-3 of the Exchange Act, unvested Restricted Stock Units (RSUs) issued under the Parsons’ Incentive Plan and units held in deferral accounts by the Directors under the Share Value Retirement Plan (“SVRP”) will be considered owned by the non-employee director. Value of ownership will be measured by reference to the trailing 60 trading day weighted average of the Parsons common stock, up to and including last day of the calendar year; compliance will be evaluated annually. In the event of a significant decline in stock price, causing non-employee Directors holdings to fall below guideline levels, non-employee Directors will not be required to purchase additional stock. Determination of the impact of share price fluctuation is subject to Compensation and Management Development Committee discretion. In 2021, the Corporate Governance and Responsibility Committee adopted a resolution requiring the implementation of a Rule 10b5-1 trading plan for any director and member of the executive leadership team (reporting to the CEO) prior to being able to sell any shares of Parsons’ stock.

For a description of the guidelines applicable to executive officers, see our CD&A section of this Proxy.

Anti-Hedging and Anti-Pledging Policies

Under our Insider Trading Compliance Policy, we prohibit our employees, including our executive officers, and Board members, from hedging the risk associated with ownership of shares of our common stock and other securities, as well as from pledging any of our securities as collateral for a loan.

COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of our Compensation and Management Development Committee are Messrs. Leer, Holdsworth, McDew, McMahon, and Wajsgras and Ms. Lord. No member of our Compensation and Management Development Committee who served on such committee during 2023 served as a member of the Board or Compensation and Management Development Committee of any other entity that has one or more executive officers serving as a member of our Board or Compensation and Management Development Committee.

SECURITY OWNERSHIP INFORMATION

Security Ownership of Directors and Executive Officers

The following table indicates information as of February 20, 2024 regarding the beneficial ownership of our common stock by each of our Directors, each of the named executive officers, and all of our Directors and executive officers as a group.

The percentages shown are based on 105,829,579 shares of common stock outstanding as of February 20, 2024.

The amounts and percentages owned are reported on the basis of the SEC’s rules governing the determination of beneficial ownership of securities. The SEC’s rules generally attribute beneficial ownership of securities to each person who possesses, either solely or shared with others, the voting power or investment power, which includes the power to dispose of those securities. The rules also treat as outstanding all shares of capital stock that a person would receive upon exercise of stock options or warrants held by that person that are immediately exercisable or exercisable within 60 days. These shares are deemed to be outstanding and to be beneficially owned by the person holding those options for the purpose of computing the number of shares beneficially owned and the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Under these rules, one or more persons may be a deemed beneficial owner of the same securities and a person may be deemed a beneficial owner of securities to which such person has no economic interest. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws as of February 20, 2024.

* less than 1%.

DELINQUENT SECTION 16(A) REPORTS

Section 16(a) of the Exchange Act requires our directors, officers (as defined in Rule 16a-1 promulgated under the Exchange Act) and stockholders who beneficially own more than 10% of any class of our equity securities registered pursuant to Section 12 of the Exchange Act (collectively, the “Reporting Persons”) to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to our equity securities with the SEC. Based solely on our review of the copies of such forms received by us and upon written representations of the Reporting Persons received by us, we believe that there has been compliance with all Section 16(a) filing requirements applicable to such Reporting Persons with respect to the fiscal years ended December 31, 2019, 2020, 2021, 2022 and 2023, and for the first wo months of 2024, except for Form 4 reflecting transactions for each of the following Section 16 officers to reflect shares of Restricted Stock Units withheld upon subsequent vesting. All of such RSUs were previously reported in full at the time such RSUs were granted, and, in all cases, the subsequent withholding was for the purpose of the payment of taxes upon the vesting of RSU shares: Carey A. Smtih (fourteen withholding events ); George L. Ball (nine withholding events); Matthew M. Ofilos (four withholding events); Michael R. Kolloway (eleven withholding events); and Susan M. Balaguer (four withholding events).

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

ESOP

Contributions of treasury stock to the ESOP are made annually in amounts determined by our Board of Directors and are held in trust for the sole benefit of the ESOP participants. Contributions of 915,113 shares, 1,188,129 shares and 1,631,477 shares of our common stock were made to the ESOP in fiscal 2023, 2022 and 2021, respectively.

We engaged the ESOP Trustee to serve as independent fiduciary on behalf of the ESOP and its participants and beneficiaries. We paid the ESOP Trustee a fee of $454,675 in 2023 for those services and reimbursed the ESOP Trustee for their legal counsel, financial advisor, and other out of pocket fees and expenses incurred in connection with our initial public offering.

Unconsolidated Joint Ventures

We often provide services to our unconsolidated joint ventures and our revenues include amounts related to recovering overhead costs for these services. Our revenues included $213.8 million in fiscal year 2023, $217.4 million in fiscal year 2022, and $204.7 million in fiscal year 2021 related to services we provided to our unconsolidated joint ventures. For the years ended December 31, 2023, December 31, 2022, and December 31, 2021, we incurred approximately $153.7 million, $157.6 million, and $155.5 million, respectively, of reimbursable costs.

Registration Rights

We entered into a registration rights agreement with the ESOP Trustee, providing the ESOP with certain demand registration rights related to shares held by the ESOP in the event the ESOP Trustee determines in good faith, in exercising its fiduciary duties under ERISA, that the ESOP is required to sell its shares, which we believe is only likely to occur if our business, financial condition or results of operations have materially and adversely deteriorated.

ESOP Trustee Letter Agreement

We entered into a letter agreement with the ESOP Trustee in connection with our initial public offering, in which we agree that our management will meet with the ESOP Trustee on a quarterly basis to discuss our business and the administration and operation of the ESOP and that our Board of Directors will meet with the ESOP Trustee on an annual basis to discuss our business and the administration and operation of the ESOP. The amount of contribution in fiscal year 2023, as determined by the Parsons Corporation Board of Directors was not less than 8% of the ESOP participants’ cash compensation for the applicable year.

Indemnification Agreements and Directors’ and Officers’ Liability Insurance

We have entered into indemnification agreements with each of our Directors and executive officers. These agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, penalties fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer. We also maintain Directors’ and officers’ liability insurance.

Policies and Procedures for Related Person Transactions

Our written related person transaction policy sets forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. In reviewing and approving any such transactions, our Audit and Risk Committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with an unrelated third party and the extent of the related person’s interest in the transaction. All of the transactions described in this section occurred prior to the adoption of this policy.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”), together with the compensation tables and related disclosures, discusses the principles underlying our executive compensation policies and decisions and the most important factors relevant to an analysis of these policies and decisions. In addition, we explain how and why our Board and the Compensation and Management Development Committee of our Board arrived at specific compensation policies and decisions involving our named executive offices (NEOs) during fiscal 2023.

Our NEOs for 2023 were:

Executive Summary

Company Performance and Highlights

Key 2023 Executive Compensation Decisions

Say-on-Pay

In evaluating the Company's executive compensation program, the Compensation and Management Development Committee considers the results of the stockholder advisory vote on the "say-on-pay" proposal. At the Company's 2023 Annual Meeting, over 97% of the shares voted approved the proposal. The Compensation and Management Development Committee believes these results show significant support for our executive compensation philosophy and program. Taking into account the positive support received in 2023, the Compensation and Management Development Committee believes the Company provides a competitive, stockholder-friendly pay program that effectively retains and motivates our executives and determined to generally retain our existing approach to executive compensation for 2024.

Fiscal Year 2023 Total Target Compensation Pay

Key Executive Compensation Practices

Our executive compensation program includes the following executive compensation governance policies and practices:

Compensation Philosophy

We believe in providing a competitive total compensation package to our NEOs through a combination of base salary, performance-based annual incentive awards, long-term incentive awards and broad-based welfare and health benefit plans. Our executive compensation program is designed to achieve the following objectives:

Executive Compensation Setting Process

Role of the Compensation and Management Development Committee

Our Board has delegated to the Compensation and Management Development Committee the responsibility for overseeing, reviewing, and approving our compensation arrangements and benefit plans and policies, and certain responsibilities relating to talent management programs and policies. Our Compensation and Management Development Committee annually determines and approves ongoing compensation arrangements for our executive officers and recommends to the Board the compensation for non-employee Directors.

Role of Executive Officers

Our CEO, as a member of our Board, attends Board and portions of Compensation and Management Development Committee meetings and provides input to the Committee in determining our executive compensation philosophy, design, incentive target amounts, and incentive payouts (other than for herself). Our finance department works with our CHRO and CEO to gather financial and operational data that the CEO reviews in making her recommendations. From time to time our CFO and CLO attend meetings (or portions thereof) of the Board or the Compensation and Management Development Committee to present information and answer questions pertaining to our executive compensation structure. No executive officer, including our CEO, participates directly in the final deliberations and determinations regarding his or her own compensation. While the Compensation and Management Development Committee considers management’s recommendations in its deliberations, it exercises its own independent judgment in approving the final compensation of our NEOs.

Role of Compensation Consultant

Semler Brossy was retained by the Compensation and Management Development Committee to assist in developing our NEO compensation program for 2023. Semler Brossy provided analysis and perspectives on our compensation strategy and assisted the Compensation and Management Development Committee in modifying our compensation program for our NEOs to better achieve our objectives. As part of it's duties, Semler Brossy has performed the following projects for the Compensation and Management Development Committee in 2023:

Other than advising the Compensation and Management Development Committee as described above, Semler Brossy did not provide any services to Parsons in 2023. The Compensation and Management Development Committee has evaluated the independence of Semler Brossy pursuant to the requirements of the NYSE and the factors set forth in the SEC rules and determined that Semler Brossy are independent, and no conflict of interest has arisen as a result of the work performed by Semler Brossy during fiscal year 2023.

Assessing Compensation Competitiveness

The Compensation and Management Development Committee uses a combination of published and proprietary compensation survey data as reference sources in determining CEO and NEO compensation.

In connection with its engagement with Semler Brossy in 2022, the Compensation and Management Development Committee directed Semler Brossy to develop a compensation peer group to assist in developing a compensation program for all our NEOs for 2023. Semler Brossy screened potential comparator companies from the engineering and construction, aerospace and defense, environmental and facilities services and research and consulting services industries that Semler Brossy and the Compensation and Management Development Committee determined compete with us for talent. We also considered the revenue and market capitalization of these companies and determined that a compensation peer group consisting of companies with levels both above and below our own levels was appropriate. Our Compensation and Management Development Committee believed that including companies with higher revenue than ours was appropriate due to our historical and recent strong growth.

In July 2022, our Compensation and Management Development Committee reviewed and determined to remove Cubic Corporation from the 2023 peer group as a result of it's acquisition. No other changes were made at the time and the following companies were used as a reference source in its 2023 executive compensation deliberations:

Our Compensation and Management Development Committee also used published and proprietary compensation survey data provided by Aon Radford, Pearl Meyer, and Willis Towers Watson to analyze the compensation practices of other companies within and outside our industry as a reference source, in addition to other relevant factors, in determining our executives’ compensation. Our Compensation and Management Development Committee applies its independent judgment to make compensation decisions and does not formally benchmark our executive compensation against any particular group of companies or use a formula to set our NEOs compensation in relation to this data. Survey data for a revenue range comparable to our Company is utilized, rather than data for specific companies participating in the surveys. Our objective was to obtain data from a broad spectrum of comparable companies for compensation comparison purposes.

Following a review of the peer group by Semler Brossy in July 2023, the Compensation and Management Development Committee determined to remove ManTech International Corporation and Maxar Technologies, Inc as a result of their acquisitions, for 2024 executive compensation deliberations.

Use of Comparative Market Data and Qualitative Factors

Our Compensation and Management Development Committee reviews each component of executive compensation separately and also takes into consideration the value of each NEOs’ compensation package as a whole and its relative size in comparison to our other executive officers, with the goal to set all elements of compensation within a competitive range, using a balanced approach that does not use rigid percentiles to target pay levels, but instead makes its compensation decisions based on a variety of relevant factors.

While the Compensation and Management Development Committee believes that information regarding the compensation practices at other companies is useful in assessing the competitiveness, reasonableness and appropriateness of individual executive compensation elements and of our overall executive compensation packages, this information is only one of several factors that our Compensation and Management Development Committee considers. Other factors that are considered include:

We evaluate our pay philosophy and compensation programs as circumstances require. At a minimum, we review executive compensation annually. As part of this review process, we expect to apply our values and the objectives outlined above, while considering the compensation levels needed to ensure our executive compensation program remains competitive. We also review whether we are meeting our pay for performance, key employee retention and other executive compensation program objectives.

Fiscal Year 2023 Compensation Elements in Detail

Elements at a Glance

The compensation program for our NEOs consists of the following principal components:

Base Salaries

The Compensation and Management Development Committee generally reviews, and adjusts as necessary, base salaries for each of our NEOs annually, or at the time of a promotion or substantial change in responsibilities. In general, base salary increases for seasoned incumbents are generally consistent with the merit pool funded for our broader organization. Annual increases that are higher or lower than this range may reflect the individual's competitive positioning to market, increases or decreases in responsibility or role, and/or other considerations deemed appropriate by the Compensation and Management Development Committee. In fiscal 2023, base salaries for the NEOs were increased as shown below to maintain competitiveness of our compensation program. In the case of Ms. Smith, the larger percentage of increase for fiscal 2023 reflects the Compensation and Management Development Committee's desire to bring Ms. Smith's compensation more in line with the competitive market following her promotion to CEO in 2021 and based on Ms. Smith's strong performance in the role.

Annual Cash Incentives

We provide our NEOs with the opportunity to earn annual cash bonuses to encourage the achievement of corporate objectives and to reward those individuals who significantly impact our corporate results. The Compensation and Management Development Committee determines and approves our annual bonus decisions.

Under the fiscal 2023 Annual Incentive Plan for Management, or AIP, the annual incentive bonus of each NEO was entirely based on our performance against a mix of corporate financial goals (90% of overall target bonus opportunity) and a non-financial strategic goal (10% of overall target bonus opportunity) aligned with enhanced gender and racial/ethnic diversity.

The annual incentive bonus is equal to the product of (1) a dollar amount representing the target amount that the executive officer may be paid as an annual incentive bonus payment (or the “Target Incentive Bonus”), multiplied by (2) a percentage representing the overall achievement of the target levels and their weightings for each of the performance measures for the fiscal year (or the “Performance Goal Achievement”). The Target Incentive Bonus, the performance measures and related target levels and weighting, and the method for determining the Performance Goal Achievement for each executive officer were determined by our Compensation and Management Development Committee, as applicable, after taking into consideration the recommendations of our CEO (for NEOs other than the CEO) at the time the performance measures and related target levels and weightings were determined for the executive officer. No payout would be made for goals that failed to meet the performance threshold. The performance threshold for financial goals was 80% of target, as described below. Payouts were capped at 200% of target.

For purposes of the fiscal 2023 AIP, our Compensation and Management Development Committee selected revenue, adjusted EBITDA, awards, consolidated cash flow and a strategic qualitative goal aligned with enhanced gender and racial/ethnic diversity as the five corporate performance measures that best supported our annual operating plan, environmental, social and governance initiatives, and enhanced long-term value creation. The addition of the awards goal in fiscal 2023 further emphasizes our focus on long term growth.

The final performance goal achievement under our AIP for the 2023 fiscal year for our NEOs was the sum of the performance achievement of each of the four corporate financial goals described above and the non-financial strategic qualitative goal aligned with enhanced gender and racial/ethnic diversity.

The level of achievement of each of the three corporate financial goals was determined as follows:

For fiscal 2023, the target levels for the four corporate financial performance measures are set forth in the table below (in millions). Our Compensation and Management Development Committee believed that achieving the target levels for the four corporate financial performance measures would require a focused and consistent effort by our executive officers throughout fiscal 2023. As noted above, we achieved record levels of revenue and adjusted EBITDA in fiscal 2023, and accordingly, the financial metrics were earned at the maximum payout level.