What changed in this filing

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Item 1. Business

2022-02-25 compared with 2021-02-26 · 79 added, 76 removed, 90 unchanged (63% of the section changed)

is a leading provider of financial, insurance and advisory services tailored to help our clients and their businesses grow and succeed.

As a trusted advisor to businesses of varying size in numerous industries across the United States, our comprehensive approach enables our clients to achieve their most important goals and pursue opportunities for growth while navigating an increasingly complex business environment.

With more than 100 offices in 31 states and the District of Columbia, we are one of the largest accounting, insurance brokerage and related financial services providers in the nation.

is a leading national provider of financial, insurance and advisory services designed to help our clients and their businesses grow and succeed.

Founded on the simple idea that growing businesses of all sizes wanted and needed access to best in class professional services with a personalized, local approach, CBIZ is now one of the largest accounting, insurance brokerage, financial and advisory services providers in the country.

Over 25 years, CBIZ has grown to a team of approximately 6,000 professionals working through more than 100 offices located in 32 states and the District of Columbia.

Shares of our common stock are traded on the New York Stock Exchange (“NYSE”) under the symbol “CBZ.”

Business Strategy

Since our founding in 1996, CBIZ's vision was to provide our clients with a breadth of services and depth of expertise that is unmatched in our industries.

CBIZ pursued this vision by acquiring the most highly regarded, best in class financial, insurance, and advisory firms that demonstrated a shared commitment to exceptional client service and strong cultural fit.

We also continue to make strategic investment to support organic growth including the attraction, retention and development of high-performing producers and the implementation of systems and tools that respond to our clients' needs.

At CBIZ, we strive to be our clients’ preferred partner for their financial, insurance and advisory needs.

While many of our competitors tend to be mono-line in their offerings, we offer multi-disciplinary, holistic solutions that are comprehensive and provide higher value to our clients while eliminating the need for coordination between multiple service providers.

We are also embedded in local and regional markets and build meaningful relationships to foster deeper understanding of our clients’ business and industry.

We believe this approach enables CBIZ to “out local the nationals, and out national the locals” that ultimately creates a differentiated experience for the clients we serve.

Available Information - Our principal executive office is located at 6050 Oak Tree Boulevard, South, Suite 500, Cleveland, Ohio 44131, and our telephone number is (216) 447-9000.

Since our founding in 1996, CBIZ set out to build a company that would provide a breadth of services and depth of expertise that is unmatched in our industries to assist our clients' with their most pressing needs and greatest opportunities.

CBIZ pursued this vision by establishing a national platform of core services that our clients rely on to support their day-to-day business.

Our core services include accounting, tax, government health care consulting, employee benefits, property and casualty insurance, payroll, human capital management, retirement plan services and a host of similar services.

Over time, CBIZ strengthened this model by adding advisory services that help our clients with specialized needs they may have from time to time.

These services include financial advisory, transaction advisory, risk advisory, valuation, technical accounting, litigation support, preparation for IPO, actuarial, executive search and compensation consulting services.

This combination of the core essential services our clients rely on us to provide on a regular basis and the more specialized advisory services that our clients need from time to time are fundamental to our ability to perform well in both favorable and less favorable business climates.

Acquisitions are a key part of our growth strategy.

We pursue acquisitions to:

enter attractive geographic markets, strengthen our presence in an existing market, add services or deepen our expertise for our existing offerings, expand into higher growth industries and service niches and access top talent.

We seek to acquire the most highly regarded, best in class financial, insurance, and advisory firms that demonstrate a desire for a greater national platform and enhanced client service capabilities, possess strong leadership, cultural fit and a client base with cross-serving potential.

Available Information - Our principal executive office is located at 6801 Brecksville Road, Door N, Independence, Ohio 44131, and our telephone number is (216) 447-9000.

Our website is located at https://www.cbiz.com .

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Our corporate code of conduct and ethics and the charters of the Audit Committee, the Compensation and Human Capital Committee and the Nominating and Governance Committee of the Board of Directors are available on the investor relations page of our website, referenced above, and in print to any shareholder who requests them.

Business Services - We deliver our integrated services through the following three practice groups:

Business Services - We deliver our services through the following three practice groups:

Financial Services, Benefits and Insurance Services, and National Practices.

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Financial Services Benefits and Insurance Services National Practices

Accounting and Tax Group Health Benefits Consulting Managed Networking and Hardware Services

Government Healthcare Consulting Payroll Healthcare Consulting

Financial Advisory Property and Casualty

Valuation Retirement Plan Services

Risk & Advisory Services

Accounting and Tax Employee Benefits Consulting Information Technology Managed Networking and Hardware Services

Financial Advisory Payroll / Human Capital Management Healthcare Consulting

Valuation Property and Casualty Insurance

Risk and Advisory Services Retirement and Investment Services

Government Healthcare Consulting

Financial Services

Financial Services is comprised of core accounting service including traditional accounting, tax compliance, advisory, and specialty services, like transaction and risk advisory services, litigation support, valuation, and federal and state government health care compliance.

Financial Services reports to the President of Financial Services.

The leader of each service line reports to the President of Financial Services.

Restrictions imposed by independence requirements and state accountancy laws and regulations preclude us from rendering audit and attest services (other than internal audit services).

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At December 31, 2021, we maintained ASAs with four CPA firms.

Most of the members and/or stockholders of those CPA firms are also our employees, and we render services to the CPA firms as an independent contractor.

Most of the members and/or stockholders of those CPA firms are also our team members, and we render services to the CPA firms as an independent contractor.

One of our ASAs is with Mayer Hoffman McCann, P.C.

(“Mayer Hoffman”), an independent national CPA firm headquartered in Kansas City, Missouri.

Mayer Hoffman has 145 stockholders, the vast majority of whom are also our employees.

Mayer Hoffman has 159 stockholders.

Mayer Hoffman maintains an eight member board of directors.

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We also have an ASA with Myers and Stauffer LC (“MSLC”), an independent national governmental health care consulting firm headquartered in Kansas City, Missouri.

MSLC has eleven equity members, all of whom are also our employees.

MSLC has thirteen equity members, all of whom are also our team members.

MSLC maintains a five member executive committee, none of whom hold senior officer positions at CBIZ.

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As such, the CPA firms with which we maintain ASAs qualify as variable interest entities.

The ASAs have terms ranging up to nineteen years, are renewable upon agreement by both parties, and have certain rights of extension and termination.

The ASAs have terms ranging up to 22 years, are renewable upon agreement by both parties, and have certain rights of extension and termination.

Under these ASAs, we provide a range of services to the CPA firms, including (but not limited to):

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Benefits and Insurance Services

Benefits and Insurance Services provides brokerage and consulting for group health benefits and property and casualty in addition to retirement plan advisory services, payroll, human capital management, and other related services.

Benefits and Insurance Services provides brokerage and consulting expertise for group health benefits and property and casualty insurance in addition to retirement plan advisory services, payroll, human capital management, and other related services.

The leader for each service line reports to the President of Benefits and Insurance Services.

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Our National Practices group provides two services:

healthcare consulting and information technology.

The healthcare consulting business, with expertise in revenue management, reimbursement optimization and managed care contracting, serves hospitals and other healthcare providers.

information technology focusing on managed networking and hardware services and healthcare consulting.

The information technology business has been serving one client in the United States and Canada for more than 20 years.

The healthcare consulting business, with expertise in revenue management, reimbursement optimization and managed care contracting, serves hospitals and other healthcare providers.

Revenue by practice group for the years ended December 31, 2021, 2020 and 2019 is provided in the table below (in thousands) along with a discussion of certain external relationships and regulatory factors that currently impact those segments.

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internal organic growth, cross-serving additional services to our existing clients, and strategic acquisitions.

Each of these components is critical to our long-term growth strategy.

• We capitalize on organic growth opportunities by offering our clients a high-touch, tailored service experience that is backed by national resources.

This approach enables our clients to access a breadth and depth of services and expertise typically not available through smaller, regional professional services providers but with a better client experience than what is delivered by many national firms.

Our ability to coordinate services and offer more comprehensive solutions eliminates the need to work with multiple service providers and creates opportunities to increase both value and efficiency.

• We capitalize on organic growth opportunities by creating value for our clients to help them achieve their goals, take advantage of their greatest opportunities or address their biggest challenges.

We focus on building long-term relationships with our clients.

We do this by offering our clients a personalized service experience that is backed by national resources.

This approach enables our clients to access a breadth of services locally and depth of expertise typically not available through smaller, regional professional services providers but with a more tailored client experience than what is delivered by many national firms.

Our ability to coordinate services and offer more comprehensive solutions enables us to provide additional value to our clients.

• Cross-serving provides us with the opportunity to offer and deliver multiple services to our existing clients.

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Being our clients’ preferred partner allows us the opportunity to respond to our clients’ needs with diverse and integrated services and solutions.

• We seek to acquire businesses that strengthen our existing service offerings, enhance our expertise or introduce new specialties to better serve our clients and enter or expand in desirable geographies and growing markets.

When evaluating acquisition opportunities, we prioritize positive market reputation, shared values and alignment of culture, commitment to exceptional client service, and strong leadership.

In 2020, we completed seven business acquisitions and purchased four client lists.

• From the time of our founding, we have pursued growth through strategic acquisitions.

We seek to acquire businesses that strengthen our existing service offerings, to add new services or specialties, enhance our expertise or expand capacity to better serve our clients and enter into or expand in desirable geographies and growing markets.

Using clear criteria, we seek to identify, cultivate and pursue acquisitions that will make us a stronger company and position us for future growth.

We prioritize positive market reputation, shared values and alignment of culture, commitment to exceptional client service, and strong leadership.

In 2021, we completed six business acquisitions and purchased one client list.

From time to time, we divest, through sale or closure, business operations that do not contribute to our long-term objectives for growth or are not critical to our service offerings or markets.

For further discussion regarding acquisitions and divestitures, refer to Note 18, Business Combinations and Note 19, Divestitures, to the accompanying consolidated financial statements.

We provide multi-disciplinary and comprehensive solutions and professional services to over 82,000 clients.

In 2021, we sold one business in the Benefits and Insurance Services practice group.

For further discussion regarding acquisitions and divestitures, refer to Note 18, Business Combinations, to the accompanying consolidated financial statements.

We provide multi-disciplinary and comprehensive solutions and professional services to over 93,000 clients across 25 industries.

Our client base is made up of approximately 54,000 business clients and 39,000 individual clients.

Our business client base is geographically dispersed across the country and represents over 25 different industries.

Our clients include small, middle market, and large businesses and organizations ranging from less than 10 to more than 1,000 employees.

Our business client base is geographically dispersed across the country and includes small, middle market, and large businesses and organizations ranging from less than 10 to more than 10,000 employees.

Our largest client comprised approximately 2.6% of our consolidated revenue in 2021 and is included in the National Practices group.

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Our operations are subject to regulation by federal, state, local and professional governing bodies.

Accordingly, our business services may be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll, benefits administration and insurance services, pension plan administration and tax and accounting.

Accordingly, our business services may be impacted by legislative changes by these bodies, particularly with respect to provisions

relating to payroll, benefits administration and insurance services, pension plan administration and tax and accounting.

We remain abreast of regulatory changes affecting our business, as these changes often affect clients’ activities with respect to employment, taxation, benefits, and accounting.

For instance, changes in income, estate,

or property tax laws may require additional consultation with clients subject to these changes to assist these clients to comply with revised regulations.

We are subject to industry regulation and changes, including changes in laws, regulations, and codes of ethics governing our accounting, insurance, valuation, registered investment advisory and broker-dealer operations, as well as in other industries, the interpretation of which may impact our operations.

For instance, changes in income, estate, or property tax laws may require additional consultation with clients subject to these changes to assist these clients to comply with revised regulations.

We are subject to industry regulation and changes, including changes in laws, regulations, and codes of ethics governing our accounting, insurance, registered investment advisory and broker-dealer operations, as well as in other industries, the interpretation of which may impact our operations.

We are subject to certain privacy and information security laws and regulations, including, but not limited to those under the Health Insurance Portability and Accountability Act of 1996, Financial Modernization Act of 1999 (the Gramm-Leach-Bliley Act), the Health Information Technology for Economic and Clinical Health Act, and other provisions of federal and state laws which may restrict our operations and give rise to expenses related to compliance.

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Liability Insurance

We carry insurance policies, including those for commercial general liability, automobile liability, property, crime, professional liability, directors’ and officers’ liability, fiduciary liability, employment practices liability and workers' compensation, subject to prescribed state mandates.

Excess liability coverage is carried over the underlying limits provided by the commercial general liability, directors’ and officers’ liability, professional liability and automobile liability policies.

We carry insurance policies, including those for commercial general liability, automobile liability, property, crime, professional liability, directors’ and officers’ liability, fiduciary liability, cyber liability, employment practices liability and workers' compensation, subject to prescribed state mandates.

Excess liability coverage is carried over the underlying limits provided by the commercial general liability, directors’ and officers’ liability, professional liability, cyber liability, and automobile liability policies.

Core financial services (traditional tax and accounting services) are impacted by seasonality given the nature of tax season due to a heavier volume of activity during the first four months of the year.

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We compete with national, regional and local professional services firms including accounting and tax firms, insurance brokers, payroll advisors and consulting firms.

The majority of industry participants offers only a limited number of services.

We differentiate ourselves from competitors through the quality and diversity of our service offerings.

We are also embedded in local and regional markets and build meaningful relationships to foster deeper understanding of our clients’ business and industry.

We believe that our strong client relationships, high quality of professional services, range of service offerings, industry expertise, geographic proximity, as well as our ability to provide national expertise on a local level give us a competitive advantage.

Human Capital

At CBIZ, our value proposition to our clients is the breadth and depth of our services including our unique ability to provide multi-disciplinary, coordinated solutions that respond to the complexity and uncertainty of today’s business environment.

CBIZ brings value because of the talent, expertise and commitment of approximately 4,800 professionals that make up our team nationwide.

Throughout 2020 in our ongoing response to the COVID-19 pandemic, we prioritized the health and safety of our team members and clients.

Our efforts included the implementation of a multitude of health and safety measures to protect our work environments, a data-driven approach to remote work and rigorous protocols for ongoing reporting and contact tracing.

Our ability to maintain operations with minimal disruption to our clients over the last year is a direct reflection of the determination, resilience and commitment of our team.

We are diligent in our efforts to attract, retain and develop talent and all recruitment is managed through a national team of experts based on a process that consistently and fairly utilizes best practices and various recruiting tools to source top talent.

CBIZ recruiters build relationships through personal connections, and are full life-cycle recruiters who stay with their candidates from first contact through their first 60 days as a CBIZ associate.

These professionals are focused on building outreach networks with community agencies, websites and social media networks, as well as schools, universities and institutions with a special emphasis on those entities that attract a diverse population.

At CBIZ, our value proposition to our clients is the breadth of our services and the depth of expertise, including our unique ability to provide multi-disciplinary, coordinated solutions that respond to the complexity and uncertainty of today’s business environment.

CBIZ brings value because of the talent, expertise and commitment of the over 6,000 professionals that make up our team nationwide.

We are diligent in our efforts to attract, retain and develop talent.

Recruitment is managed through a combination of local and national teams based on a process that consistently and fairly utilizes best practices and various recruiting tools to source top talent.

CBIZ recruiters cultivate relationships to establish strong networks of candidates, and are full life-cycle recruiters who stay with their candidates from first contact through their first 60 days as a CBIZ team member.

Our recruiters source candidates through multiple channels including professional associations, career websites, community organizations and social media networks, as well as schools, universities and institutions with a special emphasis on those entities that attract a diverse population.

CBIZ is an equal opportunity employer and does not discriminate in hiring or employment in accordance with the requirements of all applicable state and federal laws, including race, religion, national origin, ancestry, age, gender identity, marital status, military status, sexual orientation, disability, or medical condition.

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We believe the protection of human rights is fundamental to conducting great business, and believe we have both the ability and responsibility to drive positive change through our culture and business practices.

CBIZ is proud of its efforts to be a learning organization that provides opportunities for education, technical training, professional development, leadership development, and coaching and awareness at every step in an associate’s career.

These opportunities are offered in both in-person and on-demand virtual programs.

Most recently, CBIZ expanded and enhanced our diversity and inclusion training and education for all associates and continues to introduce additional resources as we accelerate our own efforts in this area.

At CBIZ, our values-based culture is central in our approach to employee experience and engagement.

We measure employee engagement on an ongoing basis to gather feedback and identify opportunities to strengthen our culture and improve our work environments.

CBIZ continues to be recognized for our intentional efforts to enhance employee engagement and to position CBIZ as our team’s employer of choice.

In 2020, CBIZ was awarded 68 workplace awards including seven national awards and four national health and wellness awards.

These opportunities are offered through in-person, virtual and on-demand programs.

Most recently, CBIZ expanded and enhanced our diversity and inclusion training and education for all team members and continues to introduce additional resources as we advance our own efforts in this area.

At the foundation of our culture and approach to employee experience and engagement is our core values.

We recognize that our uncompromising commitment to our values starting with ‘we do the right thing’ is important to our people.

CBIZ views our commitment to advancing diversity and inclusion as an extension of our core values.

At CBIZ, diversity and inclusion is a business imperative as we strive to become an employer of choice for attracting, retaining and developing diverse talent.

CBIZ has been honored with numerous workplace awards based on feedback gathered directly from our team members.

In 2021, CBIZ was awarded 93 workplace awards including 17 national awards and 19 health and wellness awards.

A sample of the awards won include:

• Best Workplace in Consulting and Professional Services - We were named one of the “2020 Best Workplaces in Consulting and Professional Services” by Great Place to Work.

• Alliance for Workplace Excellence - We were recognized for three awards in 2020 by the Alliance for Workplace Excellence;

(i) Workplace Excellence Seal of Approval, (ii) Health & Wellness Seal of Approval and (iii) Certificate of Recognition – Best Practices for Supporting Works 50+.

• Best Places to Work - We were selected and honored for the sixth consecutive year as a “Best Places to Work in Insurance” by Business Insurance magazine based on our commitment to attracting, developing and retaining great talent through employee benefits and other programs.

• 2021 America’s Best Midsize Employers by Forbes – This is the fourth time we have received this award.

50,000 Americans working for businesses with at least 1,000 employees were surveyed to rate, on a scale of zero to 10, how likely they would be to recommend their employer to others.

They were also asked to nominate organizations in industries outside their own.

• Top Workplaces USA 2021 - This inaugural award celebrates nationally recognized companies that make the world a better place to work together by prioritizing a people-centered culture and giving employees a voice.

This award is based entirely on feedback from our team members.

• Top Workplaces in the Financial Services Industry 2021 – CBIZ was named a winner among other Financial Services organizations that exceeded award criteria.

• Vault Accounting 50 – CBIZ ranked in the Top 10 based on survey results and feedback from those who are CPAs in Financial Services.

• Best Places to Work in Insurance - We were selected and honored for the seventh consecutive year as a “Best Places to Work in Insurance” by Business Insurance magazine based on our commitment to attracting, developing and retaining great talent through employee benefits and other programs.

We were recognized for this award based on core focus areas such as leadership and planning, corporate culture, communications, work environment and overall engagement.

• 2020 Healthiest 100 Workplaces in America – Springbuk evaluated over 1,000 applicants across six key categories:

Culture and Leadership Commitment, Foundational Components, Strategic Planning, Marketing and Communications, Programming and Interventions, and Reporting and Analytics.

We were honored to be named one of the top 100 winners for the third time.

• 2020 Best and Brightest Companies in the Nation Top 101 - For the fifth year in a row, we were honored as a “Best and Brightest Company” by National Association of Business Resources ("NABR") based on our commitment to human resource practices and employee enrichment.

• 2020 Best and Brightness in Wellness – We were honored by NABR, for the fourth consecutive time, as an organization that promotes a culture of wellness.

At CBIZ, we believe Diversity and Inclusion is a business imperative and we are working together toward making it an essential and valued part of our culture.

We strive to create an environment that welcomes, values, respects, leverages and develops our individual differences and similarities and this commitment includes identifying and actively combating racism and discrimination in any form.

In 2020, CBIZ renewed our commitment to improving diversity and inclusion across the company and in the industries and communities where we work.

We are in the process of accelerating our efforts with a focus on actionable steps in the short-term to engage our team members and build momentum.

These short-term actions combined with CBIZ’s existing efforts and assets will form the foundation of a more comprehensive and long-term diversity and inclusion strategy.

In the last year, CBIZ joined CEO Action for Diversity and Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion within the workplace.

Jerry Grisko signed onto to the CEO Action Pledge and joined leaders from more than 1,000 of the world’s most well recognized companies and organizations representing over 85 industries.

• 2021 Best and Brightest Companies in the Nation Top 101 - For the sixth year in a row, we were honored as a “Best and Brightest Company” by National Association of Business Resources ("NABR") based on our commitment to human resource practices and employee enrichment.

• 2021 Best and Brightness in Wellness – We were honored by NABR, for the fifth consecutive time, as an organization that promotes a culture of wellness.

• Top Workplaces Culture Excellence Awards 2021 for Appreciation, Clue-in Leaders, Employee Value Proposition, Employee Wellbeing, Empowering Employees, Formal Training, Professional Development, Work-Life Flexibility – These first-time awards recognize outstanding organizations across business-relevant culture categories.

Insurance Awards Community Outreach Project of the Year – CBIZ was named a finalist by Business Insurance based on engagement with Dress for Success.

CBIZ is a key corporate partner for Dress for Success through the CBIZ Women’s Advantage program.

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What changed 10-K

Item 1. Business