Dear Fellow Stockholders:

We are pleased to invite you to the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of PRA Group, Inc. (the “Company”) to be held Thursday, June 1, 2017 at 130 Corporate Boulevard, Norfolk, Virginia 23502 at 12:00 noon Eastern Daylight Time. At the Annual Meeting, stockholders will be asked to vote on the following items:

Stockholders of record as of the close of business on April 6, 2017 are entitled to receive notice of, and to vote at, the Annual Meeting. Included in these materials are the Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which are first being made available to stockholders on or about April 19, 2017. If you received printed copies of the proxy materials, you also received a proxy card or voting instruction form.

Every vote is important and valued by the Company. Therefore, we encourage you to vote your shares through the internet, by phone or, if you received a printed copy of the proxy card, by mail, using the instructions below even if you plan to attend the Annual Meeting.

By Order of the Board of Directors,

Steven D. Fredrickson	Judith S. Scott
Chairman and Chief Executive Officer	Corporate Secretary

April 19, 2017

YOU CAN VOTE IN ONE OF FOUR WAYS:
	Visit the website listed on your notice of meeting or proxy card to vote VIA THE INTERNET			If you received printed proxy materials, sign, date and return your proxy card in the envelope provided to vote BY MAIL
	Call the telephone number on your proxy card to vote BY TELEPHONE			Attend the Annual Meeting to vote IN PERSON

This summary highlights certain information contained elsewhere in the Proxy Statement, but does not contain all information that you should consider prior to casting your vote. Therefore, you should read the entire Proxy Statement carefully before voting.

Annual Meeting

Voting Matters and Board Vote Recommendations

Corporate Governance Highlights

Director Dashboard

Our Company is led by directors whose qualifications, experience and backgrounds support the effective oversight of the Company’s business and affairs, further the strategic goals of the Company and provide valued guidance to management.

Cognitive Diversity on the Board

High Level of Financial				Leadership and Board		Financial Industry
Literacy		Risk Oversight		Experience		Experience
Government and		Experience with Complex				International/Global
Regulatory Experience		Organizations		Entrepreneurial Spirit		Experience

Continuing Director Tenure				Director Age
	< 3 years	30%
	35 years	10%
	6-9 years	10%
	> 10 years	50%

Company Performance Highlights

Compensation Highlights

At our 2016 Annual Meeting, stockholders approved, on a non-binding advisory basis the compensation of our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and three other most highly compensated executive officers (collectively, “Named Executive Officers” or “NEOs”) by 98.2% of the votes cast. In light of the favorable results of this vote, we did not make substantial changes to our executive compensation program for our NEOs. The table below summarizes the total direct compensation earned by our NEOs for 2016.

2016 Total Direct Compensation

Total direct compensation differs from total compensation shown on page 42 in the Summary Compensation Table required by the U.S. Securities and Exchange Commission (the “SEC”) in that it includes the grant date fair value of the RSUs awarded as a bonus in 2017 for performance in 2016. Under SEC rules, the grant date fair value of these awards will not appear in the Summary Compensation Table until 2018.

Consistent with our executive compensation philosophy, a significant portion of both our CEO’s and other NEOs’ total direct compensation is incentive-based and at risk, as illustrated in the following graphs:

Salary	23%		Salary	33%
Non-Equity Incentive (at risk)	13%		Non-Equity Incentive (at risk)	19%
Long-Term Incentive (at risk)	64%		Long-Term Incentive (at risk)	48%

Investor Outreach and Engagement

We value our stockholders’ perspectives on our business and communicate regularly with our investors to better understand their perspectives. Throughout the year, our Chairman and CEO, President and Chief Administrative Officer (“CAO”), Executive Vice President and CFO, and Director of Investor Relations engaged with our investors to discuss current issues and address any questions or concerns. We also communicate with investors and other stockholders through other avenues, including our filings with the SEC, news releases and our website. In addition, we hold conference calls for our quarterly earnings releases, which are attended by our investors and open to the public.

120 Corporate Boulevard
Norfolk, Virginia 23502

Annual Meeting of Stockholders
June 1, 2017

Purpose

This Proxy Statement is being made available to stockholders on or about April 19, 2017 in connection with a solicitation by the Board of PRA Group, Inc. (the “Company,” “we,” “us” or “our”) of proxies to be voted at the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) and any adjournments or postponements thereof, to be held at 12:00 noon, Eastern Daylight Time, Thursday, June 1, 2017, at the Company’s headquarters at 130 Corporate Boulevard, Building III, Second Floor, Norfolk, Virginia 23502, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. For information concerning attending the Annual Meeting, please see page 52 of this Proxy Statement.

Record Date

At the close of business on April 6, 2017, which is the record date for the Annual Meeting (the “Record Date”), there were 46,438,621 shares of our common stock outstanding and entitled to vote at the Annual Meeting.

Quorum

In order for business to be conducted at the Annual Meeting, a majority of the issued and outstanding shares of the Company’s common stock entitled to vote, represented in person or by proxy, must be present.

Vote Required

Each stockholder will have one vote for each share of the Company’s common stock held as of the Record Date. Shares of our common stock represented by properly executed proxies will be voted at the Annual Meeting in accordance with the choices indicated on the proxy. Abstentions on a specific proposal will be considered as present at the Annual Meeting and will be counted for purposes of determining whether a quorum is present, but will have no effect on the outcome of any proposal.

If you provide specific voting instructions, your shares will be voted as you instruct. If you sign and return your proxy card, but do not provide instructions, your shares will be voted as follows:

With respect to Proposal 1, the election of directors, each director nominee shall be elected by plurality vote. Proposals 2, 3 and 4 shall be approved if a majority of the shares present in person or represented by proxy and entitled to vote on the matter, vote in favor of the applicable proposal. With respect to Proposal 4, if none of the frequency options receives a majority of the votes cast, the option receiving the greatest number of votes will be considered the frequency recommended by stockholders.

Corporate Governance

The primary responsibility of the Board is to exercise its business judgment while acting in the best interests of the Company and its stockholders. The Board has responsibility for establishing broad corporate policies, setting strategic direction, and overseeing management, which is responsible for the daily operations of the Company. The Board must fulfill its responsibilities consistent with its fiduciary duties to the Company and its stockholders and in compliance with all applicable laws and regulations. To assist the Board with fulfilling its duties, the Board has established a leadership structure that supports its oversight responsibilities and has adopted policies and procedures that reflect the Board’s commitment to good corporate governance, including Corporate Governance Guidelines, a Code of Business Conduct and Ethics and a policy to approve transactions with related parties.

Board Leadership

The Board believes that whether to have the same individual occupy the offices of Chairman of the Board and CEO should be decided by the Board, from time to time, in its business judgment after considering relevant factors, including the specific needs of the Company and what is in the best interests of the Company and its stockholders.

Our current Board leadership structure includes a Chairman of the Board who is also the Company’s CEO, a Lead Independent Director, and independent chairs for each of Audit, Compensation, and Nominating and Governance Committees. Historically, the positions of Chairman of the Board and CEO have been held by the same person based upon the Board’s determination that the combined role of Chairman and CEO is in the best interests of the Company and its stockholders. As Chairman and CEO, Mr. Fredrickson has leveraged his extensive experience in the financial sector and daily operational management to effectively and efficiently guide the Board by focusing its attention on issues of greatest importance to the Company and its stockholders.

Our Corporate Governance Guidelines provide that a lead independent director shall be selected by the independent directors whenever the individual selected to serve as Chairman of the Board is also the CEO or otherwise not independent. David N. Roberts served as the Lead Independent Director for 2016 and continues to serve in this role. Mr. Roberts’ duties and responsibilities as the Lead Independent Director include presiding at all meetings of the independent directors, consulting with the Chairman and CEO concerning the agenda for Board meetings and leading the annual evaluation of the Chairman and CEO.

Effective June 1, 2017 following the Annual Meeting, the Board has appointed Kevin Stevenson as the CEO of the Company and Mr. Fredrickson as Executive Chairman of the Board. Mr. Stevenson co-founded the Company and currently serves as the Company’s President and CAO. Mr. Stevenson’s appointment as CEO and Mr. Fredrickson’s appointment as Executive Chairman are part of the Board’s long-term succession plan, which was designed to position the Company for continued success while building on the foundation and principles the Company has maintained for the past 21 years. As a result of Mr. Stevenson’s appointment, the roles of Chairman and CEO will be separate, which the Board believes is appropriate at this time since it will facilitate an orderly leadership transition for management while allowing the Company and the Board to leverage Mr. Fredrickson’s experience and knowledge. Mr. Roberts is expected to continue as Lead Independent Director. 

Code of Business Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics, which applies to our directors, officers, including our CEO, CFO and principal accounting officer, and all other employees of the Company. Our Code of Business Conduct and Ethics, which can be found on our website at www.pragroup.com, governs the work behavior and business relationships of the Company’s directors, officers, employees and independent third parties acting on behalf of the Company and sets forth the Company’s policies regarding ethics and standards of business conduct, including conflicts of interest and insider trading. We will disclose amendments to our Code of Business Conduct and Ethics, as well as any waivers of the Code, on our website as permitted by SEC rules. During 2016, there were no waivers of our Code of Business Conduct and Ethics for any of our directors, our Chairman and CEO, our CFO or any of our other executive officers.

Board’s Role in Risk Oversight

The Board recognizes that the Company faces a broad range of risks, including financial, regulatory, operational, political, reputational, governance, and legal, that may affect the Company’s ability to execute corporate strategies and fulfill business objectives. The Board is responsible for overseeing PRA’s risk profile and management’s processes for assessing and managing risk, while management is responsible for daily risk management.

The Board has assigned to its Committees responsibility for reviewing, evaluating and making recommendations to the Board concerning important risk categories that fall within their scope of responsibility, including the following:

Management’s role in assisting the Board with its risk oversight responsibility is critical. The Chief Compliance Officer attends all meetings of the Compliance Committee and regularly attends meetings of the Board of Directors, including an executive session at least quarterly with the Board. Other members of senior management routinely attend Board meetings, report on their activities and present quarterly risk management reports to the Audit Committee and the Board. These reports include risk considerations and discussions concerning actions and strategies for monitoring, managing and mitigating any risks identified. The Company’s Compliance Department documents known risks, assesses the sufficiency of risk identification, and recommends the risk management and mitigation strategies.

Policy for Approval of Related Party Transactions

Our Board has adopted a written policy for review, approval and disclosure of transactions between the Company and directors, director nominees, executive officers, beneficial owners of more than 5% of the Company’s common stock or immediate family members of any of the foregoing (each, a “related party”). Under our Related Party Transaction Policy, the Nominating and Governance Committee must approve or ratify all related party transactions involving amounts greater than $120,000 in a calendar year and in which a related party has a direct or indirect material interest. Under the Policy, certain transactions with related parties are deemed pre-approved such as transactions in which the related party’s interest arises solely from the person’s service as a director of another entity that is a party to the transaction, certain charitable contributions and transactions determined by competitive bids. In assessing a related party transaction, the Nominating and Governance Committee considers several factors including, the commercial reasonableness of the terms of the transaction, the materiality of the transaction to the Company and the impact of the transaction on the related party’s independence.

Our Board And Its Committees

Building Our Board

Our Board recognizes that the duties and responsibilities of a director require highly skilled individuals with diverse qualities, skills, attributes, and professional experience. The Board and the Nominating and Corporate Governance Committee consider the qualifications of directors and director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. The Nominating and Corporate Governance Committee reviews potential candidates for director vacancies and recommends nominees to the Board for approval and may retain, from time to time, a third-party search firm to assist in identifying potential candidates.

Our Board and Nominating and Governance Committee have determined that there are general requirements for service on the Board that all directors must possess, including the following:

While the Board does not have a specific diversity and inclusion policy, it does consider diversity of race, ethnicity, gender, age, cultural background, and professional experiences in evaluating candidates for Board membership.

Director Qualifications

In addition to the characteristics that each director must possess, the Board and the Nominating and Corporate Governance Committee have identified certain qualifications, experiences, knowledge, skills, and abilities that are important to be represented on the Board as a whole, in light of the Company’s current needs and business priorities. The table below reflects the specific qualifications and experiences of each director that led the Board to conclude that the director is qualified to serve on the Board. While we look to each director to be knowledgeable in these areas, a “ü” in the chart below indicates that the item is a specific qualification or experience that the director brings to the Board. The absence of a “ü” for a particular item does not necessarily mean that the director does not possess that qualification or experience.

Committees of the Board

The standing Committees of the Board are the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Each standing Committee operates pursuant to a written charter, which is available on the Investor Relations section of the Company’s website. All members of the standing Committees are independent as defined by NASDAQ Stock Market (“NASDAQ”) listing standards and SEC rules. In addition, each standing Committee has the ability to retain, at the Company’s expense, special legal, accounting, or other consultants or advisors it deems necessary in the performance of its duties. Additional information concerning the standing Committees is included in the chart below.

In addition to the standing Committees, the Board also has ad hoc Compliance and Strategy Committees.

Compensation Committee Interlocks and Insider Participation

During 2016, all Compensation Committee members were independent directors, no member was an employee or former employee of the Company and no member had any related party transactions that would require disclosure under SEC rules. During 2016, no NEO of the Company served on any compensation committee (or its equivalent) or board of directors of any other company whose executive officer served on our Compensation Committee or Board.

Director Independence

The Board has established guidelines, which conform to the independence requirements included in the NASDAQ listing standards and SEC rules and regulations, to assist it in determining director independence. Based on these guidelines, the Board has determined that Messrs. Atal, Fain, Nussle, Roberts, Tabakin, Voss and Weaver and Ms. Kyle are independent according to NASDAQ listing standards and SEC rules.

Director Attendance

During 2016, the Board held seven meetings. Each director attended at least 75% of the aggregate number of meetings of the Board and Committees on which the director served during 2016. All directors are encouraged, but not required, to attend our Annual Meeting of Stockholders. All directors attended the 2016 Annual Meeting of Stockholders.

Communications with the Board

Stockholders may communicate with members of the Board by transmitting their correspondence by mail or email. All such communications should be sent to the attention of the Corporate Secretary as specified below:

Corporate Secretary

PRA Group, Inc.

120 Corporate Boulevard

Norfolk, Virginia 23502

corporatesecretary@pragroup.com

The Company’s confidential toll-free fraud hotline may be used by any stockholder who prefers to raise a concern to the Board in a confidential or anonymous manner by dialing 1-855-874-2659. All communications to the Company’s confidential fraud hotline are referred to the Chair of the Audit Committee.

Communications that are addressed to one or more directors will be collected and organized by the Corporate Secretary and forwarded to the Chairman of the Board, or if addressed to an identified independent director, to that director, as soon as practicable. Communications that are abusive, in bad taste or that present safety or security concerns may be handled differently. If multiple communications are received on a similar topic, the Corporate Secretary may forward only representative correspondence or summaries. The Company’s Corporate Secretary will determine whether any communication addressed to the entire Board as a whole should be properly addressed by the entire Board or by a Committee. If a response to the communication is warranted, the content and method of the response will be coordinated with the Company’s Corporate Secretary.

Our Board currently consists of 11 members. Mr. Voss, whose term expires at the 2017 Annual Meeting, has decided not to stand for reelection. As a result, the Board has reduced the size of the Board to 10 directors effective immediately after the 2017 Annual Meeting and you will not be able to cast votes for more than two nominees.

Our Certificate of Incorporation provides that our Board shall be divided into three classes with each class consisting of approximately one-third of the total number of directors. Each director serves a three-year term or, if earlier, until the director’s resignation, death or removal, and one class of directors is eligible for election at each annual meeting of stockholders. Nominees for director that receive the affirmative votes of a plurality of shares represented and voting in person or by proxy at the Annual Meeting will be elected.

The Nominating and Corporate Governance Committee recommended to the Board that James N. Nussle and Scott M. Tabakin be nominated for election to the Board to serve until the 2020 Annual Meeting of Stockholders. Any nominee for director who receives a greater number of votes withheld than votes for his or her election shall tender his or her resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will then consider the best interests of the Company and its stockholders and will recommend to the full Board what action should be taken with respect to the tendered resignation.

Messrs. Nussle and Tabakin have each consented to serve as a director if elected. We have no reason to believe that either of the nominees will be unable or unwilling for good cause to serve. However, if either nominee should become unable or unwilling to serve, proxies may be voted for another person nominated as a substitute by the Board or the Board may reduce the number of directors. If the Board nominates a substitute, the shares represented by all valid proxies will be voted for that nominee.

The Company did not receive any recommendations of potential director candidates from stockholders for consideration at the Annual Meeting.

DIRECTOR NOMINEES – THREE-YEAR TERMS EXPIRING AT THE 2020 ANNUAL MEETING OF STOCKHOLDERS

JAMES A. NUSSLE
		President and CEO, Credit Union National Association
		Director Since 2013
		Mr. Nussle, 56, has served as President and CEO of the Credit Union National Association since September 2014. Mr. Nussle has also served on the board of trustees of Thrivent Financial Mutual Funds since 2011 and is an industry advisor to a private equity firm, Avista Capital Partners. Mr. Nussle previously served as the President of Growth Energy, a renewable energy industry association based in Washington, D.C., from 2010 to 2013. Prior to his private sector career, Mr. Nussle served extensively in government at both the local and federal levels. He served eight terms as a U.S. Representative from Iowa between 1991 and 2007, was elected by his colleagues to serve three terms as the House Budget Committee Chairman, and was selected by President George W. Bush in 2007 to serve in his Cabinet as the Director of the Office of Management and Budget. Mr. Nussle also served on a number of President Bush’s policy councils including the National Economic, Homeland Security, and National Security Councils. Mr. Nussle’s career also includes four years as an elected prosecuting attorney in Iowa and the practice of law in Iowa.
		In addition to his industry experience, Mr. Nussle’s legal background and significant experience interacting with regulators qualify him to serve on the Board.
SCOTT M. TABAKIN
		Independent Consultant and Advisor
		Director Since 2004
		Mr. Tabakin, 58, is an executive-level consultant, advising boards and management teams on strategy, capital raising, capital structures and exit strategies. He was a certified public accountant and has more than 30 years of public company experience. From December 2011 until December 2013, Mr. Tabakin was Executive Vice President and CFO of Value Options, Inc. (now Beacon Health Options, Inc.), then the nation’s largest independent, privately owned behavioral health and wellness company. Mr. Tabakin also served as Executive Vice President and CFO of Bravo Health, Inc., a privately owned managed health care company, from July 2006 until the sale of the company in November 2010. Prior to that, he was Executive Vice President and CFO of AMERIGROUP Corporation, then a publicly traded (NYSE) managed health care company. From October 1992 until May 2001, Mr. Tabakin was Executive Vice President and CFO of Beverly Enterprises, Inc. (now Golden Living Center), then the nation’s largest publicly traded (NYSE) provider of long-term health care. From June 1980 until October 1992, Mr. Tabakin worked for the accounting firm of Ernst & Young. He also serves on the boards of the University of Maryland Medical System Health Plans and Living Life Solutions.
		Mr. Tabakin’s experiences, including his tenure as the CFO of two large publicly traded companies, provide him with a comprehensive understanding of the complex financial and legal issues facing public companies and qualify him to serve on the Board.

DIRECTORS WITH THREE-YEAR TERMS EXPIRING AT THE 2018 ANNUAL MEETING OF STOCKHOLDERS

VIKRAM A. ATAL
		President, Atal Advisers, LLC
		Director Since 2015
		Mr. Atal, 61, has served as President of Atal Advisers, LLC since February 2013, when he formed the business and strategy consulting firm. Prior to forming Atal Advisers, Mr. Atal served in executive roles with increasing responsibility with Citigroup, Inc. for 27 years, including as Executive Vice President for Citigroup’s global consumer bank from 2008 to 2013, where he had responsibility for shaping Citi as an information-centric enterprise, leveraging analytics and data to drive growth, and overseeing loss mitigation efforts against Citi’s high-risk consumer portfolio through the financial crisis. From 2005 to 2008, Mr. Atal served as Chairman and CEO for Citi Cards’ branded and retail partner cards franchise in North America, which had revenues of $18 billion and more than 60 million customers. His previous roles with Citigroup included leadership of partnership programs for Citi Cards, serving as CFO of Citi’s U.S. cards franchise, and overseeing SEC, regulatory and business financial reporting for Citicorp.
		Mr. Atal’s experiences as a senior executive in the financial services industry along with his significant international experience working for complex, publicly traded organizations qualify him to serve on the Board.
STEVEN D. FREDRICKSON
		Chairman and CEO, PRA Group, Inc.
		Director Since 2002
		Mr. Fredrickson, 57, has served as the Company’s Chairman and CEO since 2002 when the Company became public. He also served as the Company’s President from 2002 to August 2015. Prior to co-founding the Company in 1996 with Mr. Stevenson, Mr. Fredrickson held various leadership roles with Household Recovery Services’ (“HRSC”) Portfolio Services and Household Commercial Financial Services groups and specialized in corporate and real estate workouts at Continental Bank of Chicago. Effective June 1, 2017, Mr. Fredrickson will become Executive Chairman of the Board. Mr. Fredrickson is a member of the board of directors for the United Way of South Hampton Roads and the St. Mary’s Home Foundation. He is also on the executive advisory council of the Strome College of Business at Old Dominion University and a Trustee of the Eastern Virginia Medical School Foundation.
		Mr. Fredrickson’s tenure as Chairman and CEO of the Company, which operates in a complex financial and highly regulated environment, and his extensive industry knowledge qualify him to serve on the Board.

DIRECTORS WITH THREE-YEAR TERMS EXPIRING AT THE 2019 ANNUAL MEETING OF STOCKHOLDERS

JOHN H. FAIN
		Retired President and CEO of Metro Information Services, Inc.
		Director Since 2010
		Mr. Fain, 68, has more than 25 years of business management experience, including service as the co-founder, President and CEO of Metro Information Services, Inc. (“Metro”). Metro was an information technology consulting services firm that went public in 1997, and subsequently merged with Keane, Inc. in 2001. Prior to co-founding Metro, Mr. Fain developed and managed his own independent data processing consulting practice, servicing clients in multiple states. Mr. Fain retired in 2002 and currently serves on the Investment Committee of the Hampton Roads Community Foundation and the Endowment Committee of the Virginia Beach Aquarium and Marine Science Center Foundation.
		Mr. Fain’s insight concerning the use of information technology strategies in large companies, his operational and financial expertise and his experience as a CEO and director of a public company qualify him to serve on the Board.
GEIR L. OLSEN
		Partner, Ubon Partners
		Director Since 2016
		Mr. Olsen, 44, was the CEO and a board member of Aktiv Kapital, AS, a leading European consumer debt purchaser, from September 2011 until its acquisition by the Company in 2014. Post-acquisition he served as the CEO of PRA Group Europe until January 2016. Under Mr. Olsen’s leadership, the two companies were integrated, and PRA Group’s European market position was significantly strengthened. Prior to Aktiv Kapital, Mr. Olsen held various leadership roles in sales, marketing and strategy with Cisco Systems and Tandberg, a Norwegian company that Cisco acquired in 2010. He also advised financial services and technology companies as a consultant at McKinsey & Company for five years prior to joining Tandberg. Currently, Mr. Olsen is a partner at Ubon Partners, an investment company focused on early stage companies in technology and financial services that he cofounded in 2013, and is Chairman of Avida Finans, a consumer and small and medium enterprises (SME) credit provider in the Nordic region. He previously served on the board of Acano Ltd, a technology company based in the U.K., prior to its acquisition by Cisco.
		Mr. Olsen’s qualifications as a director include an in-depth understanding of the European debt purchase markets and experience in using technology to transform businesses.

Non-Employee Director Compensation

Our Board of Directors, upon the recommendation of the Compensation Committee, establishes the compensation for our non-employee directors. Non-employee director compensation for 2016 included annual cash retainers for our Board, Committee members and Chairs, and our Lead Independent Director. On the date of the 2016 Annual Meeting, each non-employee director also received an equity award valued at approximately $110,000 that consisted of RSUs, which vest on the anniversary of the grant date. The vesting schedule for the RSUs, combined with the director stock ownership guidelines described below, are intended to align our non-employee directors’ economic interests with those of our stockholders.

Details concerning our non-employee director compensation for 2016 are as follows:

Our non-employee directors received the following compensation for service during 2016:

In addition to the compensation described above, each non-employee director is reimbursed for travel expenses incurred for attending Board meetings and reasonable expenses associated with participating in continuing education programs. The Company offers no retirement benefits or perquisites to directors. The Company maintains policies of directors’ and officers’ liability insurance covering all directors.

Director Stock Ownership Guidelines

Recognizing that each director should have a substantial personal investment in the Company, the Board has adopted stock ownership guidelines that apply to each non-employee director, which requires beneficial ownership by each non-employee director of shares of the Company’s common stock valued at not less than five times the director’s annual cash retainer for serving on the Board. Directors are expected to acquire and maintain this share ownership threshold within five years after joining the Board. As of March 31, 2017, all non-employee directors have met the stockholding requirement or are in the process of meeting the requirement within the five-year period.

KPMG served as the Company’s independent registered public accounting firm for the year ended December 31, 2016 and has been appointed by the Audit Committee to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2017. Although not required to do so, the Board is submitting the selection of KPMG for ratification by the Company’s stockholders as a matter of good corporate governance practice. The Audit Committee is not required to take any action based on the outcome of the vote on this Proposal 2. However, if our stockholders do not ratify the appointment of KPMG, the Audit Committee may consider whether to select a different independent registered public accounting firm. Even if the selection of KPMG is ratified by the stockholders, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. Representatives of KPMG are expected to attend the Annual Meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate stockholder questions.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUDIT COMMITTEE MATTERS

Fees Paid to KPMG

KPMG served as the Company’s independent registered public accounting firm with respect to the audits of the Company’s consolidated financial statements and the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2016.

The following table sets forth the fees billed or expected to be billed by KPMG for audit and other services for the years ended December 31, 2015 and 2016.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures that require pre-approval by the Audit Committee or the Audit Committee Chair of all permitted non-audit services provided by KPMG. Under the policy, the Audit Committee Chair has the authority to approve permitted non-audit services. If the Audit Committee Chair approves a permissible non-audit service, the Audit Committee ratifies the Chair’s approval at its next meeting. During 2016, the Audit Committee pre-approved all services provided by KPMG. The Audit Committee has considered the provisions of these services by KPMG and has determined that the services are compatible with maintaining KPMG’s independence.

The Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of the Company’s accounting, auditing, financial reporting, internal controls and management processes. KPMG, the Company’s independent registered public accounting firm, is responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the Company’s internal control over financial reporting.

The Audit Committee has reviewed and discussed with management and KPMG the Company’s audited financial statements for the year ended December 31, 2016. The Audit Committee has also discussed with the independent registered public accounting firm the matters required to be discussed by the Public Company Accounting Oversight Board Auditing Standard No. 1301 Communications with Audit Committees, and such other matters as are required to be discussed under auditing standards generally accepted in the United States of America. In addition, the Audit Committee has received the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence and has discussed with KPMG its independence. The Audit Committee has concluded that KPMG’s provision of audit and non-audit services to the Company and its affiliates is compatible with KPMG’s independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 for filing with the SEC.

This report is submitted on behalf of the following independent directors, who currently constitute the Audit Committee:

Pursuant to Section 14A of the Exchange Act, the Company’s stockholders are being asked to approve, on a non-binding advisory basis, the compensation of the Company’s NEOs as disclosed in this Proxy Statement. This vote provides stockholders with the opportunity to express their views on the compensation of our NEOs.

An objective of the Company is to retain highly qualified and talented executives and to provide appropriate incentives to encourage their high performance, which creates value for the Company’s stockholders. As described in detail in this Proxy Statement, the Company seeks to closely align the interests of its NEOs with the interests of its stockholders and appropriately reward performance while discouraging unnecessary or excessive risk-taking. A vote on Proposal 3 will not approve any specific item of compensation, but rather the overall compensation of the Company’s NEOs. Accordingly, stockholders are asked to cast their votes “FOR” Proposal 3 to indicate their support for the Company’s compensation of its NEOs as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, Summary Compensation Table and related compensation tables and narrative.

This vote is not binding on the Company, the Board or the Compensation Committee. However, it will provide information to the Company, the Board and the Compensation Committee regarding stockholder sentiment about the Company’s executive compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining executive compensation for the remainder of 2017 and beyond. The Compensation Committee values the opinions of its stockholders and will take into consideration any concerns they may raise (in the event there is any significant vote against the executive officer compensation as described in this Proxy Statement) when making future executive compensation decisions.

Section 14A of the Exchange Act provides stockholders with the opportunity to indicate how frequently they would like to vote on our Named Executive Officers’ compensation (“Say-on-Pay”). Proposal 4 provides our stockholders with the opportunity to indicate their preference for holding a Say-on-Pay vote annually, every two years or every three years (“Say-on-Frequency”). Our first Say-on-Frequency vote was held in 2011. Our stockholders approved, on a non-binding advisory basis at our 2011 Annual Meeting, annual voting for Say-on-Pay by an overwhelming majority of the votes cast on the proposal. We are required to provide you with a Say-on-Frequency vote once every six calendar years.

Our Board values and encourages constructive dialogue on our executive compensation. Our Board believes that the “Say-on-Pay” advisory vote is an important vehicle for stockholders to provide feedback, which is most useful when it is timely and received in a consistent manner. Moreover, the Board acknowledges the strong preference expressed at the 2011 Annual Meeting by our stockholders for annual Say-on-Pay voting. Therefore, the Board recommends an annual vote on our Named Executive Officers’ compensation.

You may select an annual, two-year or three-year option for the Say-on-Pay vote. The option that receives the most votes will be deemed the preference of our stockholders on the frequency of the Say-on-Pay vote. Although the vote on this Proposal 4 is not binding on the Company, our Board or the Compensation Committee, our Board will review the voting results and will consider stockholders’ views on how often Say on Pay votes should be held.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) is intended to provide you with a description of our executive compensation program, with a focus on the Compensation Committee’s decisions with respect to our NEOs. At the 2016 Annual Meeting of Stockholders, 98.2% of the votes cast approved our NEO compensation on an advisory basis. Based on this strong stockholder support of our NEOs’ 2015 compensation, the Compensation Committee concluded that no significant revisions were necessary to our compensation program for our NEOs. 

2016 Financial Results

During 2016, we had the following results:

1-YEAR NET	1-YEAR	1-YEAR	1-YEAR	1-YEAR
INCOME	EPS	REVENUE	CASH	PORTFOLIO
DECLINE	DECLINE	DECLINE	COLLECTIONS	ACQUISITIONS
			DECLINE	DECLINE

Over the last 3-year period, we had the following results:

3-YEAR NET	3-YEAR	3-YEAR	3-YEAR	3-YEAR
INCOME	EPS	REVENUE	CASH	PORTFOLIO
DECLINE	DECLINE	GROWTH	COLLECTIONS	ACQUISITIONS
			GROWTH	GROWTH

Our 2016 NEO pay was aligned with those results:

CEO Realized Pay

Ceo Realized Pay 2014-2016

Philosophy and Objectives of Our Executive Compensation Program 

Our compensation philosophy is to align our NEOs’ pay with performance, while ensuring that our executive compensation is attractive, flexible, market based and closely aligned with the interests of our stockholders. Our compensation objectives are to attract, hire, and retain the caliber of executive officers necessary to deliver sustained high performance to our stockholders and to design our compensation programs to:

Our executive compensation program is an important component in each of these compensation goals. Equally important, we view compensation practices as a means for communicating our goals and standards of conduct and performance and for motivating and rewarding employees in relation to their achievements. Within this framework, we observe the following principles:

We believe that our executive compensation program motivates future performance and is linked, directly and materially, to the Company’s overall performance and each NEO’s individual performance. The following outlines how we make compensation decisions.

Decision-Making: Role of the Compensation Committee

Our Board has delegated oversight of our executive compensation policies and program to its Compensation Committee. Among its duties, the Compensation Committee is responsible for formulating the compensation recommendations for our CEO and approving compensation for all executive officers. Although the Compensation Committee considers the CEO’s recommendations, the Compensation Committee evaluates independently the CEO’s recommendations and makes all final compensation decisions within the parameters of its compensation philosophy. This process includes the following:

The Compensation Committee is supported in its work by FW Cook, its executive compensation consultant, the CEO (where appropriate), and the Company’s Human Resources department.

Decision-Making: Role of the Chief Executive Officer

Within the framework of the executive compensation program approved by the Compensation Committee and based on a review of competitive market data completed annually, our CEO recommends the mix of base salary, annual bonus and long-term equity incentive awards that our executive officers (excluding himself) should receive as both target and actual total compensation. These recommendations are based upon his assessment of each executive officer’s performance, the performance of the individual’s respective business or function, and any employee retention concerns. The Compensation Committee reviews our CEO’s recommendations and approves any compensation changes affecting the executive officers as it determines in its sole discretion. Our CEO does not play any role with respect to any matter affecting his own compensation and is not present in Compensation Committee meetings when CEO pay is discussed. The Compensation Committee may delegate duties and responsibilities to the CEO, as the Compensation Committee deems to be in the best interests of the Company, provided such delegation is not prohibited by applicable law, rule or regulation.

Decision-Making: Role of the Compensation Consultant

The Compensation Committee has retained FW Cook as its executive compensation consultant. FW Cook reports directly to the Compensation Committee. The Compensation Committee may replace FW Cook or hire additional consultants at any time and retains sole authority to hire any compensation consultant, approve such consultant’s compensation, determine the nature and scope of its services, evaluate its performance, and terminate its engagement.

A representative of FW Cook attends meetings of the Compensation Committee and communicates with the Compensation Committee Chair between meetings, as requested. FW Cook provides various executive compensation services to the Compensation Committee, which includes advising the Compensation Committee on the principal aspects of our executive compensation program, updating the Compensation Committee on evolving industry practices and providing market information and analysis regarding the competitiveness of our program design and award values in relation to performance.

During 2016, FW Cook performed the following key services for the Compensation Committee:

FW Cook provided no other services to management or the Company during 2016. The Company has assessed the independence of FW Cook pursuant to SEC rules and has determined that no known conflict of interest exists that would prevent FW Cook from serving as an independent consultant to the Compensation Committee.

Key Features Of Our Executive Compensation program

2016 Executive Compensation Highlights

The Compensation Committee believes that our executive compensation program and performance incentives in place in 2016, as more fully described herein, are reflective of the Company’s financial and operational outcomes. The total compensation paid to the NEOs in 2016 reflects the Compensation Committee’s commitment to aligning pay with performance. With input from FW Cook, the Compensation Committee took the following 2016 executive compensation actions:

Use of Competitive Data

The Compensation Committee does not believe that it is appropriate to establish compensation levels based solely on benchmarking; however, it believes that information regarding pay practices at comparable companies is useful as a recruitment and retention tool, to maintain competitive compensation practices in the marketplace. Accordingly, the Compensation Committee engages FW Cook to assist and make recommendations in connection with the selection and periodic review of companies to be included in the “Compensation Peer Group” identified below, as well as related analyses in connection with updates made with the approval of the Compensation Committee. We believe the Compensation Peer Group represents the organizations that most closely correlate with us in terms of size and business model and, therefore, include primarily the consumer and specialty finance and data processing industries. The companies that are included in the Compensation Peer Group were included based on certain metrics comparable to those of the Company, principally, net income, market capitalization and complexity of operations. Revenue is taken into consideration but not as heavily as the other metrics listed, as not all our cash receipts are represented in our revenue numbers. A significant portion of our cash receipts is recorded as a reduction of principal on finance receivables amortization, rather than revenue.

Our NEOs’ total target compensation is intended to approximate the median of the Compensation Peer Group. Actual cash compensation may be above or below the median based on actual performance. Realized long-term equity incentives and total compensation will vary from the median based on actual financial and stock price performance.

In its review of the 2016 compensation of the Company’s NEOs, the Compensation Committee did not recommend any changes to the 2015 Peer Group. The Committee primarily reviewed the compensation practices of the Compensation Peer Group listed below:

In addition to Compensation Peer Group data, the Compensation Committee reviews, but does not place as much emphasis on, financial services and general industry compensation survey data reported by the compensation consulting firm of Willis Towers Watson. The primary focus on the Compensation Peer Group data relates to more direct matches in terms of company size and business mix. The Compensation Committee uses this data to ascertain the competitive market for our NEOs, to determine whether the Company’s compensation levels are competitive, and to make any necessary adjustments to reflect executive performance and Company performance. As a part of this process, FW Cook measures target and actual pay levels for the Company and the Compensation Peer Group within each compensation component and in the aggregate. FW Cook also reviews the mix of the Company’s compensation components with respect to fixed versus variable, short-term versus long-term and cash versus equity-based pay. This information is then presented to the Compensation Committee for its review and use.

The Compensation Committee generally compares the compensation of its NEOs to the median of the Compensation Peer Group. In addition, the Compensation Committee considers factors such as our performance relative to the Compensation Peer Group, the unique characteristics of the individual NEO’s position, and any succession and retention considerations.

Components of Our Executive Compensation Program 

The Compensation Committee measures the competitiveness of our executive compensation program by looking at the median of the Compensation Peer Group and the survey data for each compensation component. The Compensation Committee considers the recommendations of FW Cook in the process of allocating the mix of total compensation among each element of compensation, to provide the appropriate balance of fixed and variable, short- and long-term and cash and equity compensation. The compensation of executives who have the greatest ability to influence the Company’s financial performance is predominately performance-based and at risk, which is consistent with the Company’s overall compensation philosophy.

Decisions for 2016

The following section contains information on the Compensation Committee’s decisions with respect to our NEOs on the various direct compensation components for 2016 and information regarding certain performance measures and goals. These measures and goals are disclosed in the limited context of our executive compensation program. Investors should not apply these performance measures and goals to other contexts. The following tables are in addition to, and not in lieu of, the Summary Compensation Table required under SEC rules, which can be found on page 42.

2016 NEO Total Direct Compensation

Total direct compensation differs from total compensation shown in the Summary Compensation Table required by the SEC on page 42 in that it includes the grant date fair value of RSUs awarded in 2017 as a component of the NEO’s 2016 annual bonus payment. Under SEC rules, the grant date fair value of these RSUs will not appear in the Summary Compensation Table until 2018.

These decisions were based on the actual financial results, indicated in the table below and the individual performance and development listed for each NEO:

($ in millions, except for Diluted EPS)

STEVEN D. FREDRICKSON, CHAIRMAN AND CEO

Mr. Fredrickson led the Company through a challenging year that included the following developments:

PETER M. GRAHAM, EXECUTIVE VICE PRESIDENT AND CFO

Mr. Graham joined the Company in August 2016 as our Executive Vice President and CFO. He focused his time in 2016 on learning our businesses and financial information and establishing key relationships across the organization.

KEVIN P. STEVENSON, PRESIDENT AND CAO

In addition to contributing to the Company’s financial results, Mr. Stevenson helped to successfully drive the following initiatives:

MICHAEL J. PETIT, (FORMER) PRESIDENT, INSOLVENCY INVESTMENT SERVICES

Mr. Petit separated from the Company in February 2017.

CHRISTOPHER B. GRAVES, EXECUTIVE VICE PRESIDENT, AMERICAS CORE

Mr. Graves contributed to the following accomplishments in 2016:

Outstanding Performance Share Awards 

During 2016, the NEOs had three tranches (award years 2014-2016) of performance-vesting share awards outstanding. The key features of these outstanding awards are included below:

Realization of 2014-2016 LTIP

In March 2017, the NEOs received payouts with respect to the ROE and TSR performance share awards that were granted in February 2014 for the three-year performance period of 2014-2016. These awards were earned and paid based on our actual performance relative to the target goals ROE (91%), and TSR (0%). The final award payments to the NEOs were:

OTHER COMPENSATION

Tax-Qualified Plans

The Company offers a 401(k) plan for its employees, including the NEOs. The 401(k) plan is a long-term savings vehicle that enables employees to make pre-tax contributions via payroll deductions and receive tax-deferred earnings on the contributions made. Employees are eligible to make voluntary contributions to the plan of up to 100% of their compensation, subject to limitations under the Internal Revenue Code (the “Code”), after completing six months of service with the Company. The Company makes matching cash contributions of up to 4% of each participating employee’s eligible pay. Employees are able to direct their own investments, among a range of investment choices, under the plan.

We periodically compare the competitiveness of our benefits programs for all our employees, including retirement benefits, against other employers with whom we broadly compete for talent. It is our objective to provide our employees with a benefits package that is at or around the median when compared to other employers.

Nonqualified Deferred Compensation Plans and Arrangements

The Company does not offer any nonqualified deferred compensation plans or arrangements to any of its employees, including our NEOs.

Severance and Change in Control Arrangements

Pursuant to their employment agreements with the Company, our NEOs (or their beneficiaries or estates) are all eligible for severance payments and other benefits upon termination of employment for the following reasons:

In the case of a termination for cause, no severance payments will be made. We find each of these practices to be typical among our peers and we note that the receipt of severance benefits is subject to our NEOs’ compliance with non-compete/non-solicitation covenants and execution of a release of claims. In no instance will the Company provide excise tax reimbursements or gross-ups to any of our NEOs.

For detailed information on the estimated potential payments and benefits payable to the NEOs in the event of their termination of employment, including following a change in control of the Company, see the section titled “Post Employment Compensation Arrangements” (see pages 46–47) in this Proxy Statement.

Perquisites and Other Personal Benefits

We do not provide our executive officers, including the NEOs, with perquisites or other personal benefits, except for comprehensive physical examinations. The NEOs are required by policy to submit to comprehensive physical examinations every five years (if over 40 years of age) at the Company’s expense, at a cost of up to approximately $5,000 each. This perquisite is provided because we believe it serves a necessary business purpose and protects the interests of the organization and stockholders by requiring each NEO to receive high-quality preventative care, thereby increasing the likelihood of early detection for any serious illness that would prevent them from serving the Company to the best of their ability.

OTHER RELATED POLICIES

In addition to the other components of our executive compensation program, we maintain stock ownership guidelines as described below. These guidelines are consistent with corporate governance and help ensure that our executive compensation program does not encourage our NEOs to engage in risk-taking behaviors that are beyond our ability to effectively identify and manage.

Stock Ownership Guidelines

To further align the NEOs’ interests with those of the Company’s stockholders and assure that management focuses on appropriate long-term initiatives designed to increase stockholder value, the Compensation Committee has established stock ownership guidelines for certain key executives, including our NEOs. Ownership of equity by executive officers in the Company serves to align their interests with those of the Company’s stockholders and demonstrates to the investing public and to all the Company’s other employees that senior management is committed to and believes in the future success of the Company. The stock ownership guidelines establish ownership goals to be achieved and maintained within five years from the date of hire or promotion.

Once each year, the Compensation Committee is provided with a report showing the extent to which our executives have met the applicable ownership guidelines. This report includes targeted share ownership, actual share ownership, our executives’ remaining non-vested shares, and any surplus or deficiency that exists. The Compensation Committee may determine whether, based on the executive’s success in achieving the executive’s stock ownership target, the executive’s annual bonus, if any, is paid in stock, rather than in cash. The specific share requirements for each executive include shares that are beneficially owned, directly or indirectly by the executive, but do not include any shares that have been granted to the executive that have not yet vested or been earned. To permit consistent long-term planning by an executive, once established, these targets are not reset except upon the approval of the Compensation Committee in the event of a significant promotion of the executive, exceptional equity grants, or other considerations. The following chart details the stock ownership guidelines established for the NEOs and their actual share holdings as of the Record Date. Each NEO as of the Record Date had met the NEO’s stock ownership goal or is on track to achieve such goal within five years.

Pledging

The Company prohibits its directors, officers and employees from pledging, alienating, attaching or otherwise encumbering the Company’s stock and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any affiliate of the Company.

Hedging

The Company prohibits its directors, officers and employees from speculating or hedging their interests in the Company’s stock. Accordingly, directors, officers and employees may not “play the market” in Company securities by engaging in speculative transactions such as any direct or indirect hedging transaction that could reduce or limit the individual’s economic risk with respect to his or her holdings, ownership or interest in the common stock or other securities of the Company, including outstanding stock options, stock appreciation rights or other compensation awards the value of which are derived from, make reference to or are based on the value or market price of common stock or other securities of the Company. Prohibited transactions include same day purchases and sales, prepaid variable forward contracts, equity swaps, short sales, collars, puts, calls or other derivative securities that are designed to hedge or offset a decrease in market value of the equity securities of the Company.

Deductibility of Executive Compensation

One of our compensation objectives is to structure and administer our annual and LTI compensation plans for our NEOs to maximize the tax deductibility of the payments as “qualified performance-based compensation” under Section 162(m) of the Code to the extent practicable. However, while the Compensation Committee is mindful of the potential impact upon the Company of Section 162(m) of the Code, it reserves the right to adopt such compensation arrangements as may from time to time be desirable to reward, retain or attract top-quality management even if payments may not be fully or partially deductible under Section 162(m).

DECISIONS FOR 2017

In December 2016, the Compensation Committee established new 2017 base salary rates for a limited number of executives and elected to not increase the target annual bonus plan award levels for the NEOs in 2017. These decisions were made after reviewing market data and taking into consideration future individual contributions to the Company.

The following chart reflects the decisions for 2017 (other than Mr. Petit, who separated from the Company on February 6, 2017, and is not included in the table):

2017 LTIP Awards

In February 2017, upon the Compensation Committee’s recommendation and Board approval, the NEOs were granted LTIP awards based on the Compensation Committee’s assessment of their 2016 performance and the market data for each NEO’s competitive positioning relative to the 2017 Compensation Peer Group. The awards were made pursuant to the 2017 LTIP, which is consistent in design with the 2016 LTIP described starting on page 32.

The following table presents the number of equity incentive awards granted to each NEO under our 2017 LTIP (other than Mr. Petit, who separated from the Company on February 6, 2017 and is not included in the table). Awards were granted as performance-based PSUs and time-based RSUs under the program. These awards will not be reported in the Summary Compensation Table until next year.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the section of this Proxy Statement entitled “Compensation Discussion and Analysis” with management. Based on this review and discussion, the Compensation Committee has recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

SUMMARY COMPENSATION TABLE

The following table sets forth all compensation awarded to, earned by or paid to each of the Company’s NEOs for all services rendered to the Company for the years ended December 31, 2016, 2015, and 2014.

GRANTS OF PLAN BASED AWARDS

The following table presents, for each of the NEOs, information concerning awards under our Equity Plan and annual bonus plan during 2016.