NOTICE OF

ANNUAL MEETING OF STOCKHOLDERS

AND

PROXY STATEMENT

April 24, 2018

I am pleased to invite you to attend the 2018 Annual Meeting of Stockholders of Heidrick & Struggles International, Inc. Your vote is very important to us. Whether or not you plan to attend the meeting in person, we hope that your shares are represented and voted at the Annual Meeting.

I want to take this opportunity to thank Richard Beattie, our longest-serving Board member, who will not be standing for reelection this year. We acknowledge and appreciate his more than 15 years of outstanding service and contributions to Heidrick & Struggles as both Chair of our Board and Lead Director.

Thank you for your investment in and continued support of our company. We are optimistic about our future and proud to be part of an organization that has talented and dedicated people thoroughly committed to the success of our clients, our company and your investment. We look forward to welcoming you to our Annual Meeting.

Sincerely,

Krishnan Rajagopalan

President and Chief Executive Officer

HEIDRICK & STRUGGLES INTERNATIONAL, INC.

233 South Wacker Drive, Suite 4900

Chicago, Illinois 60606-6303

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

If you plan to attend the Annual Meeting, please bring proof of your ownership of Heidrick & Struggles common stock as of April 2, 2018 and valid picture identification.

Enclosed please find our Proxy Statement, Proxy Card and a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Sincerely,

Kamau Coar

Secretary

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on May 24, 2018

The Proxy Statement and the Company Annual Report are available at: http://www.heidrick.com/proxy.

YOUR VOTE IS IMPORTANT. Whether or not you attend the meeting, we encourage you to consider the matters presented in the Proxy Statement and vote as soon as possible through any of the methods referenced above.

PROXY SUMMARY

Annual Meeting of Stockholders

When: May 24, 2018, 9:00 a.m., Eastern Daylight Time

Where: Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York

You are entitled to vote at the meeting if you were a holder of record of our common stock at the close of business on April 2, 2018. Please see page 59 for instructions on how to vote your shares. If you wish to attend the meeting in person, you will be required to present valid picture identification, such as a driver’s license or passport, along with proof of stock ownership.

Voting Recommendations of the Board

Performance Highlights

Productivity, as measured by annualized Executive Search net revenue per consultant, remained high at $1.6 million in 2017, the same as in 2016.

The number of executive searches confirmed in 2017 increased 4.5% and the average revenue per executive search increased to $120,300 from $117,700 in 2016

Key Features of Our Executive Compensation Program

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CORPORATE GOVERNANCE AND BOARD MATTERS

Our Board is elected by the stockholders to oversee the business and affairs of the Company. The Board plays a critical role in planning the Company’s strategy and overseeing the long-term success of the Company. Our Board seeks to maintain an effective and sound governance structure that appropriately balances and aligns the interests of the Company’s most important stakeholders, including our stockholders, clients and employees. As a result, the Company maintains a variety of corporate governance practices that the Board believes promote sound governance and the operation of the Company in an atmosphere of candor and collaboration with its stakeholders.

Our stockholders can access our key governance documents including our Corporate Governance Guidelines, Code of Business Conduct and Ethics and charters of each committee of the Board on our website at www.heidrick.com.

Highlights of our corporate governance program and practices are noted below:

Board Structure

Stockholder Rights

The Board of Directors

The current members of the Board of Directors are:

The Board met twelve times during 2017. Each current director attended at least 75 percent of all of the meetings of the Board and Committee on which he or she served. Although the Company does not have a formal policy requiring attendance at the annual stockholders meeting, all directors generally attend the annual meeting and all of them, with the exception of Ms. Elizabeth Axelrod, did so in 2017. Ms. Axelrod had a conflict in connection with her position at Airbnb. Ms. Axelrod joined Airbnb in January 2017.

Mr. Beattie is not standing for election at the 2018 Annual Meeting. Mr. Beattie joined the Board in 2002 and served as Chairman from May 2007 through July 2017. Mr. Beattie has served as the Board’s Lead Director since July 2017.

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Board Leadership and Structure

The Board does not have a fixed policy regarding the separation of the offices of Chairman of the Board (Chairman) and Chief Executive Officer and believes that it should maintain the flexibility to select the Chairman and its Board leadership structure, from time to time, based on the criteria that it deems to be in the best interests of the Company and its stockholders. Heidrick’s Corporate Governance Principles also establish the position of Lead Director. The Lead Director is independent and elected by the independent directors of the Heidrick board, upon the recommendation of the Nominating and Board Governance Committee, with responsibilities to act when the person holding the position of Chairman of the Board is not an independent director under the applicable director independence standards. As specified in the Corporate Governance Principles, the role of the Lead Director includes presiding at executive sessions of independent directors and serving as a contact for interested parties who wish to communicate with independent directors.

At this time, the position of Chairman is held by Tracy R. Wolstencroft, who previously served as our President and Chief Executive Officer. Mr. Rajagopalan serves as our President and Chief Executive Officer. The position of Lead Director is currently held by Richard I. Beattie who previously served as Chairman. It is currently anticipated that the Lead Director will be Lyle Logan upon Mr. Beattie’s retirement from the Board at the 2018 Annual Meeting. The Board has determined that, under current circumstances, the separation of the offices of Chairman and Chief Executive Officer will enhance oversight of management and Board function. This separation is designed to allow the Chief Executive Officer the ability to focus on his responsibilities of running the Company, enhancing shareholder value and expanding and strengthening the Company’s business. Concurrently, Mr. Wolstencroft, as Chairman can focus on leadership for the Board as it provides advice to and oversight of management. The Chairman also is responsible for setting the agendas and presiding over meetings of the Board and providing feedback and counsel to the Chief Executive Officer. The Board currently believes that this leadership structure is in the best interests of the Company’s stockholders at this time.

Board Committees

The Board of Directors conducts its business through meetings of the Board and its three committees: the Audit and Finance Committee, Human Resources and Compensation Committee and Nominating and Board Governance Committee. The Board has determined that each of the members of our standing committees is independent under the provisions of our Corporate Governance Guidelines, Director Independence Standards, and the Nasdaq Stock Market listing standards (Nasdaq Rules).

The following chart shows the current membership and Chair of each of our Board committees and the number of committee meetings held during 2017:

C- Chair

The Chairman and the CEO are invited guests and are welcome to attend all committee meetings, except when the independent directors meet in executive session, such as when they conduct performance evaluations or discuss the compensation of the Chairman or the CEO, or both.

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Audit and Finance Committee

Willem Mesdag (Chair)

Elizabeth L. Axelrod

Lyle Logan

The Audit and Finance Committee met nine times during 2017. Among other things, the Audit and Finance Committee appoints an independent registered public accounting firm annually to audit the Company’s books and records; meets with and reviews the activities and the reports of the Company’s independent registered public accounting firm; and reports the results of the review to the Board. The Audit and Finance Committee also periodically reviews the adequacy of the Company’s internal controls, pre-approves all services to be provided by the Company’s independent registered public accounting firm and assesses the steps management has taken to minimize significant financial risks and expenses. These and other aspects of the Audit and Finance Committee’s authority are more particularly described in the Audit and Finance Committee Charter.

Each member of the Audit and Finance Committee is able to read and understand fundamental financial statements (as required under Nasdaq Rules) and meets the heightened standards of independence for audit committee members pursuant to the rules and regulations of the SEC (SEC Rules). Messrs. Mesdag and Logan each qualify as an “audit committee financial expert” within the meaning of the SEC Rules and are presumed to be financially sophisticated for purposes of the Nasdaq Rules.

Nominating and Board Governance Committee

The Nominating and Board Governance Committee met four times in 2017. The Nominating and Board Governance Committee makes recommendations to the Board concerning candidates for nomination to the Board, the membership on committees of the Board, compensation of the Board and other corporate governance matters. The Nominating and Board Governance Committee also reviews and approves related party transactions. All of the members of the Nominating and Board Governance Committee are independent within the meaning of the listing standards of Nasdaq and the Company’s Corporate Governance Guidelines.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee met eight times in 2017. The Human Resources and Compensation Committee reviews and approves employment and compensation matters involving the Company’s executive officers. Specifically, the Human Resources and Compensation Committee’s responsibilities include:

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Outside advisors and the Company’s Human Resources Department support the Human Resources and Compensation Committee in its duties and the Committee may delegate authority to fulfill certain administrative duties regarding the compensation programs to members of senior management as it deems appropriate. The Human Resources and Compensation Committee has authority under its charter to retain advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities.

Each member of the Human Resources and Compensation Committee meets the qualifications for compensation committee members pursuant to the Nasdaq Rules and is a “non-employee director” within the meaning of SEC Rule 16b-3, and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code.

    Compensation Committee Interlocks and Insider Participation

No member of the Human Resources and Compensation Committee was, during 2017, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K. During 2017, none of the Company’s executive officers served on the board of directors or the compensation committee of any other entity, any officers of which served either on the Company’s board of directors or its Human Resources and Compensation Committee.

The Board’s Role in Risk Oversight

Risk is inherent with every business and management is responsible for the day-to-day management of the risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes and policies designed and implemented by management are adequate and functioning as designed. The Board performs its risk oversight function primarily through its committees as well as reports directly from management.

Enterprise Risk. Our management has implemented an Enterprise Risk Management assessment process to identify, assess, prioritize and manage a broad set of risks across our business and operations. The assessment process includes a thorough survey of senior leaders and a select group of directors to identify the material risks to the Company. Specific emphasis is placed on identifying those risks that could have the highest impact to our Company and operations, and the highest likelihood of occurrence for those risks. Our survey process also takes into account input from our internal audit function that reports regularly to our Audit and Finance Committee. Our Board receives an annual report containing an overview of top risks identified by the survey, along with plans for managing and, where appropriate, mitigating them. The material elements of oversight of the risks identified by the survey are discussed with the entire Board in the ordinary course.

Compensation Risk. The Company periodically completes an inventory of its executive and non-executive compensation programs globally, with particular emphasis on incentive compensation plans and programs. Based on this inventory, the Company evaluates the primary components of its compensation plans and practices to identify whether those components, either alone or in combination, properly balance compensation opportunities and risk. Based on the Company’s periodic assessments, the Company has determined that none of its compensation policies and practices is reasonably likely to have a material adverse effect on the Company. The

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Company believes that the Company’s overall cash versus equity pay mix, variable versus fixed pay elements, balance of shorter-term versus longer-term performance focus and revenue-focused versus profit-focused performance measures, stock ownership guidelines, and use of “claw-backs” work together to provide its employees and executives with incentives to deliver outstanding performance to build long-term stockholder value, while taking only necessary and prudent risks.

Director Nomination Process

In evaluating, identifying and recommending nominees for the Board, our Nominating and Board Governance Committee considers, among other qualifications that it deems appropriate, the following:

We do not set specific, minimum qualifications that nominees must meet in order to be recommended to the Board. Each nominee is evaluated based on his or her individual merits, taking into account the needs of the Company and the composition of the Board.

The Nominating and Board Governance Committee discusses and evaluates possible candidates in detail and the Company’s consultants are sometimes employed to help identify potential candidates. When determining whether to recommend a director for re-election, the Nominating and Board Governance Committee considers the director’s past participation in and contributions to Board activities.

Board Diversity

Our Board believes that diversity is an important attribute of a well-functioning board. The Nominating and Board Governance Committee considers diversity (among other factors it deems appropriate) in light of the overall needs and composition of the Board and the best interests of the Company and its stockholders. In considering nominee diversity, the Board evaluates skills, experience, and background that would complement the existing Board.

Over time, the Board has nominated and currently consists of directors that generally reflect the diverse and expansive global footprint of the Company’s business operations, including a wide range of experiences, as well as diversity of age, gender, race and national origin. Diversity is an important factor that the Nominating and Board Governance Committee will continue to consider when evaluating candidates for nomination to the full Board.

Director Independence

Our Board determines the independence of all non-employee directors in accordance with the independence requirements of our Corporate Governance Guidelines, Director Independence Standards, and the Nasdaq Rules.

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Accordingly, each year the Board affirmatively determines whether each non-employee director has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Annually, each non-employee director is required to complete a questionnaire that provides information about relationships that might affect the determination of independence. Management then provides the Board with relevant facts and circumstances of any relationship bearing on the independence of a director or nominee that are outside the relationships prohibited by Nasdaq Rules.

Based on the review and recommendation by the Nominating and Board Governance Committee, the Board analyzed the independence of each of the Company’s directors who served at any time during fiscal 2017 and each of the Company’s current director nominees, and determined that the following directors meet the standards of independence under our Corporate Governance Guidelines and the Nasdaq Rules: John A. Fazio, Jill-Kanin Lovers, and V. Paul Unruh (Ms. Kanin-Lovers and Messrs. Fazio and Unruh did not stand for election at the 2017 Annual Meeting), Elizabeth L. Axelrod, Richard I. Beattie (who is not standing for election at the 2018 Annual Meeting), Clare M. Chapman, Gary E. Knell, Jr., Lyle Logan, Willem Mesdag, and Adam Warby. Our Board also determined that Krishnan Rajagopalan, the Company’s current President and Chief Executive Officer, and Tracy R. Wolstencroft, the Chairman, are not independent under the standards of our Corporate Governance Guidelines and Nasdaq Rules.

As highly accomplished individuals in their respective industries, fields and communities, our directors are affiliated with numerous corporations, educational institutions, and charities, as well as civic organizations and professional associations, many of which have business, charitable or other relationships with each other or our Company. The Board considered each of these relationships in light of our independence standards and determined that none of these relationships conflict with the interests of the Company, or would impair any director’s independence or judgment.

In making this determination the Board considered material relationships among the directors and the Company, including the circumstances resulting from the concurrent service during 2017 to the National Geographic Society (Society) of the Chairman of the Board, Tracy R. Wolstencroft, and Chair of the Board’s Nominating and Board Governance Committee, Gary E. Knell. Mr. Knell previously served on the board of trustees of the Society, and he served as president and CEO of the Society from January 2014 through February 2018. Mr. Wolstencroft serves as the vice-chair of the Society, but does not serve, and has not served, on the compensation committee of the Society. The Board determined that these circumstances do not present either a conflict of interest or a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director on the part of either Mr. Wolstencroft or Mr. Knell.

Executive Officers

Below is the name, age, present title, principal occupation and certain biographical information for each of our executive officers as of April 24, 2018. All of our executive officers have been appointed by and serve at the pleasure of our board of directors. There are no family relationships between any executive officer or director.

Krishnan Rajagopalan (58)    Mr. Rajagopalan has been our President and Chief Executive Officer since July 2017. He served as interim CEO from April 2017 to July 2017. Previously, he served as Executive Vice President and Managing Partner—Executive Search beginning January 2016. Previously, he served as Head of Global Practices beginning in April 2014. Mr. Rajagopalan has served in other leadership roles including Global Practice Managing Partner, Technology and Services (2010 to 2014) and Global Practice Managing Partner, Business/Professional Services (2007 to 2010). Mr. Rajagopalan joined the firm in 2001 in executive search.

Mark Harris (47)    Mr. Harris was appointed Chief Financial Officer of the Company on March 19, 2018. He had been serving as the Deputy Chief Financial Officer of the Company since February 2018. From 2015, Mr. Harris had been Chief Financial Officer at Hercules Capital, a publicly traded business development company, responsible for finance, accounting, operations, legal and investor relations. Prior to that, Mr. Harris

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worked at Avenue Capital Group for over 8 years, where he served as their Chief Financial Officer for their Asia Strategy and was their Senior Managing Director/Head of Asia, in which he led the entire Asia strategy. Prior to working at Avenue Capital Group, from 2004 to 2006 Mr. Harris served as Corporate Financial Controller and Chief Accounting Officer at Hutchinson Telecommunications, a telecommunications company based in Hong Kong.

Richard W. Greene (55)    Mr. Greene has been our Executive Vice President and Chief Human Resources Officer since January 1, 2015. Previously, Mr. Greene was the global Head of Talent Management and a global segment HR executive at Bunge, an agribusiness and food production company (2011 to 2014). Mr. Greene previously managed Heidrick & Struggles’ Leadership Consulting and Human Resources practices in the Americas (2006 to 2011).

Kamau Coar (41)    Mr. Coar was appointed General Counsel effective February 1, 2018. Previously, Mr. Coar served as VP, Associate General Counsel (2012 to 2017). Prior to that, Mr. Coar was a partner at Ungaretti & Harris LLP, which he joined in 2003.

Certain Relationships and Related Party Transactions

Various applicable Company policies and procedures and annual questionnaires completed by all Company directors and executive officers, require disclosure of transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable SEC and Nasdaq Rules. Pursuant to its charter, the Nominating and Board Governance Committee of the Board—in consultation with the Audit and Finance Committee—reviews and approves related party transactions. Although the Company’s processes vary with the particular transaction or relationship, when such a transaction or relationship is identified, the Nominating and Board Governance Committee evaluates the transaction or relationship and approves or ratifies it (without the vote of any interested person) only if it is judged to be fair and in the best interests of the Company. In addition, it is the practice of the Nominating and Board Governance Committee, although not part of a written policy, to review each transaction specifically disclosed as a potential related party transaction in connection with its review of the proxy statement for the Annual Meeting of Stockholders, to the extent any such transaction has not previously been reviewed, applying the same standard.

There were no related party transactions in 2017 that required approval under the Company’s policies and procedures or the rules and regulations of the SEC.

Code of Business Conduct

The Board has adopted a Code of Business Conduct & Ethics (Code) that applies to all of the Company’s employees, officers and directors, as well as independent contractors working on behalf of the Company. Our Code meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K, and also meets the requirements of a “code of business conduct and ethics” under Nasdaq Rules. All employees generally are required to certify that they have reviewed and are familiar with the Code annually.

Ethics Line

The Board also has established the Heidrick & Struggles EthicsLine (EthicsLine), a service that provides a mechanism for reporting to the Company alleged breaches of any legal or regulatory obligations, financial fraud, including accounting, internal controls and auditing, or any alleged violation of the Code or corporate policies. The EthicsLine is a telephonic reporting hotline (toll free in the U.S.) available to all Company employees, contractors, vendors, stockholders, clients or other interested parties. The EthicsLine is administered by a third party that is separate and independent of Heidrick and specializes in running whistleblower hotline programs for companies throughout the U.S. Calls are not recorded and callers may remain anonymous. The EthicsLine is operational 24 hours a day, seven days a week and may be reached at 1-800-735-0589 or, if calling from outside the United States, at 1-704-731-7242.

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Stockholder Communications

Communication with the Board. Stockholders may communicate directly with the Board. All communications should be directed to: Corporate Secretary, Heidrick & Struggles International, Inc., 233 South Wacker Drive, Suite 4900, Chicago, Illinois 60606-6303. Any such communication should prominently indicate on the outside of the envelope that it is intended for the Board or a particular director. All appropriate communication intended for the Board or a particular director and received by the Corporate Secretary will be forwarded to a specified party following its clearance through normal security procedures.

Stockholder Proposals – 2019 Annual Meeting

If you wish to submit a proposal for inclusion in our 2019 proxy statement, you must follow the procedures set forth in Rule 14a-8 of the Securities Exchange Act of 1934. To be eligible for inclusion, we must receive your proposal at the address below no later than Thursday, December 27, 2018.

Also, under Heidrick’s Bylaws, other proposals and director nominations by stockholders that are not included in the Proxy Statement may be eligible for presentation at the meeting only if they are received by the Company in the form of a written notice, directed to the attention of Heidrick’s Corporate Secretary at the address below, no earlier than February 25, 2019 and no later than March 26, 2019. The notice must contain the information required by the Bylaws and must otherwise comply with the requirements specified in the Bylaws.

Where to Send All Proposals and Nominations:

Corporate Secretary

Heidrick & Struggles International, Inc.

233 S. Wacker Drive, Suite 4900

Chicago, Illinois 60606-6303

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DIRECTOR COMPENSATION

We provide compensation to non-employee directors that is competitive with other similarly sized publicly traded companies in order to attract and retain qualified directors. The compensation of directors, including all restricted stock units, for fiscal 2017 is set forth in the table below.

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Directors who are also employees or officers do not receive any additional compensation for their service on the Board. The non-employee director compensation program provides for an annual equity award of restricted stock units with a value of approximately $112,500 to be awarded on the date of each annual meeting of stockholders. The number of units subject to such award is determined by dividing $112,500 by the closing price of the Company’s common stock on the date of such annual meeting of stockholders (rounded to the nearest whole share). Non-employee directors may elect to receive payment of the annual equity retainer in shares of Common Stock in lieu of the restricted stock units described above. Additionally, non-employee directors receive a cash retainer of $62,500 each year, payable quarterly in arrears. In addition, each member of the Audit and Finance Committee receives an annual cash retainer of $10,000; the Chair of the Audit and Finance Committee receives an annual cash retainer of $30,000; the Chair of the Human Resources and Compensation Committee receives an annual cash retainer of $30,000; and the Chair of the Nominating and Board Governance Committee receives an annual cash retainer of $10,000. The Lead Director receives an annual cash retainer of $40,000. The Chair of the Board receives an annual cash retainer of $75,000. Directors may elect to defer up to one hundred percent of their cash compensation per year pursuant to our Non-Employee Directors Voluntary Deferred Compensation Plan. All directors are reimbursed for their out-of-pocket expenses incurred in connection with their duties as directors.

The Company’s stock ownership guidelines for directors require each director to own three times their annual cash retainer in Company stock within three years of joining the Board. As of April 2, 2018, each of our directors has either satisfied the stock ownership guidelines or is on track to do so in compliance with the guidelines.

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COMPENSATION DISCUSSION AND ANALYSIS

Heidrick & Struggles International, Inc. is a leadership advisory firm providing executive search and leadership consulting services. We assist organizations in achieving their long-term business objectives by helping them to improve the effectiveness of their leadership teams. We provide our services to a broad range of clients through the expertise of our experienced consultants located in major cities around the world. The Human Resources and Compensation Committee (HRCC) of the Board of Directors seeks to ensure that our executive compensation programs attract, retain and reward the best talent, while at the same time maintain a strong link between pay and performance and align the interests of our executives and stockholders. Our executive compensation philosophy emphasizes and rewards Company, business unit and individual performance, which we believe promotes sustained long-term performance by rewarding not only the achievement of financial and operational goals, but also the accomplishment of individual strategic objectives that enable growth.

This Compensation Discussion and Analysis describes the philosophy and objectives of our executive compensation programs for our named executive officers. For 2017 our named executive officers were:

2017 Year in Review

2017 was an important year of strategic, operational and financial accomplishments. During 2017, we continued to deliver on our strategy to further expand our impact with clients in the boardroom and C-suite, providing deeper service as a trusted and valued advisor on executive talent, leadership and culture.

We made meaningful progress in attracting, developing and retaining exceptional talent in the industry, and ended 2017 with 346 Executive Search consultants, up from 335 at December 31, 2016, and 36 Heidrick Consulting consultants, the same at December 31, 2016. In January 2018 we launched Heidrick Consulting which combines the firm’s Leadership Consulting and Culture Shaping businesses into a single integrated line of advisory services. Also, in January 2018, we announced a restructuring plan to reduce overall costs and improve efficiencies.

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Along with our dedicated and experienced consultants and staff located in major cities around the world, our named executive officers Messrs. Wolstencroft, Rajagopalan, Pehlke, Price, Greene and Beard each led and played an important role in the achievement of the 2017 results outlined below.

Overall Compensation Philosophy

Our HRCC strives to establish compensation programs for our executives and employees that are market competitive with firms in the executive search, leadership consulting and management consulting space, both public and private, with whom we compete for executive talent. At the heart of our compensation programs is a pay-for-performance philosophy. We expect our executive officers to initiate and carry out sustainable growth strategies and create long-term value and growth for the Company and its stockholders. We link various aspects of our business strategies with our compensation program design. Company performance is a primary factor in most elements of our executive incentive compensation program design. When measuring Company performance, we may consider both qualitative and quantitative factors and achievements relating to our business strategies and objectives. In assessing the individual performance of named executive officers, our HRCC may consider, among other things, the officer’s accomplishments of objectives, contributions to the Company’s strategic initiatives and execution of leadership objectives.

Our HRCC regularly reviews our compensation programs for our executives and employees to ensure that the programs continue to meet the needs of the business and align the long-term interests of our executives with those of our stockholders. Our compensation programs may change from time to time based on the review of the HRCC.

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Principal Components of 2017 Executive Compensation

Base Salary

For each named executive officer, base salaries are reviewed against levels for positions with similar responsibilities at the peer group companies, using the comparative data prepared by our HRCC’s compensation consultant. Our HRCC then considers individual performance, internal pay equity, functional expertise, experience, and scope of responsibilities in approving any changes to the base salary.

Annual Incentives

Our Management Incentive Plan or MIP is the short-term cash incentive vehicle through which we reward our named executive officers with an annual cash bonus for achieving specific performance goals over a one-year period. Under our MIP, determination of the payout level (if any) for each named executive officer’s award is based upon the achievement of a combination of Company performance metrics (weighted at 70%) and individual performance factors (weighted at 30%). Our HRCC has discretion to modify any payouts (upwards or downwards) under the MIP as appropriate to ensure plan objectives are met, taking into consideration a variety of Company specific or environmental factors.

Payout amounts under our MIP were set for each metric based on “Minimum”, “Target” and “Maximum” performance levels and corresponding award levels based on the Company’s business plan and other operational and environmental factors. “Target” performance is the level at which a participant will earn 100% of his or her target award. Depending upon the relationship of the Company’s actual financial performance and the individual’s annual evaluation, final payouts under our MIP may be as little as zero and as high as 150% of Target.

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The HRCC sets Company and individual performance goals for the named executive officers during the first quarter. These goals consist of both quantitative and qualitative performance objectives. Our HRCC considers the reviews conducted by the Chief Executive Officer of the other named executive officers, and conducts its own review of the Chief Executive Officer’s performance against those pre-established performance objectives, as well as Company performance milestones achieved during the year. With respect to our Chief Financial Officer, our HRCC also considers input from our Audit Committee Chair.

In 2017 the MIP for Messrs. Rajagopalan (as CEO), Pehlke, and Greene included three Company performance metrics to determine the pay-out level (if any) of awards: consolidated net revenue, operating income, and EBITDA. Each of the three metrics was slightly below target, but surpassed the minimum performance levels. Consolidated net revenue also exceeded 2016 results. Minimum, Target, and Maximum Performance Levels and Adjusted Actual Performance results for 2017 were:

For Messrs. Price and Rajagopalan (as head of Search), the three performance metrics used to determine the pay-out level (if any) of awards were business unit net revenue; business unit operating income; and consolidated operating income. For Mr. Price, the applicable business unit is Leadership Consulting. For Mr. Rajagopalan it was Executive Search. The business unit net revenue and business unit operating income metrics for Messrs. Price and Rajagopalan (as head of Search) are not disclosed due to the competitive nature of the metrics.

Long-Term Incentives

Although our 2012 GlobalShare Plan allows us to issue a variety of equity based awards, our current LTI awards issued to our named executive officers consist of:

We set performance goals for our PSUs using a three-year average performance approach because:

When issuing annual LTI awards, we equally divide the value of our LTI grants among PSUs and RSUs and calculate the number of RSUs or PSUs awarded to the named executive officer by dividing the total dollar value

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of LTI compensation granted to the officer by the closing price of our Common Stock on the grant date (usually in March of the grant year). All outstanding RSUs and PSUs are credited with dividend equivalents that are payable in cash when the related units vest. The primary purpose of crediting dividend equivalents on LTI awards is to align the participant with the value of being a stockholder over the course of the vesting period, but only to the extent the award vests.

Compensation Mix – Variable vs. Fixed

Our HRCC believes that our named executive officers should be rewarded for the achievement of financial and non-financial objectives that either influence or contribute to stockholder value creation. Consistent with our “pay for performance” philosophy, our HRCC established elements of fixed and variable compensation for the named executive officers who served in fiscal 2017.

Key principles considered by our HRCC for determining the mix and level of fixed and variable pay for our named executive officers were our ability to attract, retain and motivate the most talented executives available in light of competitive market practices, our position among companies with which we compete for executive talent, alignment of interests with those of our stockholders, our goals for pay for performance, and the market level of total cash and non-cash compensation we pay to our named executive officers.

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Executive Compensation Program Principles

Our HRCC uses the following principles to implement our executive compensation philosophy:

Applying these principles results in pay packages where a significant portion of compensation is put “at risk,” in the form of performance-based annual and long-term incentives. We believe our executive pay packages support our commitment to sound corporate governance and reflect common “best practices”, including:

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Setting Executive Compensation

Role of our Human Resources and Compensation Committee.    Our HRCC engages in a rigorous process in determining the total compensation of our named executive officers. Our HRCC determines and approves the compensation of the named executive officers based on this evaluation. In evaluating named executive officer compensation, our HRCC, as discussed below, has retained the services of Pay Governance LLC and considers recommendations from the Chief Executive Officer, but our Chief Executive Officer does not provide such input as to his own compensation. Our HRCC assesses the information it receives in accordance with its business judgment.

Our HRCC is also responsible for overseeing our executive compensation programs.

Role of Executive Officers in Compensation Decisions.    The Chief Executive Officer annually reviews the performance of each of the named executive officers other than himself. Following the performance reviews, the Chief Executive Officer presents compensation recommendations to our HRCC for consideration. Our HRCC, with input from the full Board, reviews the Chief Executive Officer’s performance. Our HRCC has full discretion to approve, modify or reject any recommended compensation adjustments or awards made to the named executive officers.

Role of Independent Compensation Consultant    The HRCC has retained Pay Governance LLC as its independent compensation consultant. Pay Governance reports directly to the HRCC and does no other work for management. During 2017, Pay Governance representatives generally participated in all of the HRCC’s meetings and provided guidance to the HRCC with respect to executive compensation; comparative peer group data;

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director compensation; annual incentive compensation; and consultant pay programs. In supporting the HRCC, Pay Governance provides the HRCC with an independent assessment of management’s recommendations for compensation; reviews and confirms the peer group used by the Company to prepare market compensation data; and provides ad hoc support to the HRCC, including discussing executive compensation and related corporate governance trends.

Our HRCC determined that Pay Governance was independent and without conflicts of interest for 2017. This determination was reached after reviewing the six independence factors set out in the Nasdaq Rules: (i) whether Pay Governance provides any other services to the Company; (ii) the amount of fees paid relative to the total revenue of the firm; (iii) policies in place to prevent conflicts of interest; (iv) any personal or business relationships with members of our HRCC; (v) ownership of Company stock; and (vi) any personal or business relationships with named executive officers.

Use of a Peer Group.    Our HRCC evaluates our executive compensation programs in comparison to those of a select peer group, which in 2017 consisted of 15 similarly-sized public professional services companies. Our HRCC uses the peer group to compare total direct compensation and the mix of compensation elements for each named executive officer against positions at peer group companies with similar responsibilities. Our HRCC also uses the peer group to review executive pay programs and practices at those companies.

For 2017 the peer group consisted of the following companies:

For 2018, the Company has removed Ciber, Inc. from the peer group as it is no longer public following its acquisition in June 2017. The Company has added Volt Information Services, which provides staffing and employment services, as well as technology outsourcing and information technology infrastructure services.

In setting compensation, the HRCC considers the peer group companies with which we directly compete for executive talent and stockholder investment. Our HRCC also relies on its general knowledge of executive compensation levels and practices.

Most of the Company’s executive search and leadership advisory competitors, from which executive talent is often recruited, are privately held and therefore not included in the above list of our public peer group companies as information on their compensation practices is difficult to obtain.

We do not set a specific, relative percentile positioning for total direct compensation, or the elements of total direct compensation, as a target for named executive officer pay levels. Rather, we review the total direct compensation range for each position and the mix of elements to ensure that compensation is adequate to attract and retain key named executive officers. To ensure that compensation is linked to performance, our named executive officer compensation program is designed to deliver at least 65% of total direct compensation through variable pay. Our named executive officer compensation program is also designed to ensure that a significant proportion of the named executive officer’s compensation is delivered in equity and thus aligned with the interests of our stockholders.

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Stock Ownership Guidelines.    To enhance the alignment of named executive officers’ interests with that of stockholders, we maintain stock ownership guidelines. Each new executive officer has five years from the date he or she first becomes subject to the guidelines to achieve a stock ownership level equal to a multiple of base salary. The stock ownership guidelines for our named executive officers are as follows:

In determining compliance with these guidelines, we include both direct stock ownership and RSU grants, but do not consider PSUs. Each of the named executive officers subject to the policy either satisfied the stock ownership guidelines or is on track to do so within the requisite five-year period.

Claw-back Policy

The Company will adopt a Claw-back Policy which is in compliance the SEC’s rules regarding the recoupment of executive compensation (i.e., claw-backs) under the Dodd-Frank Wall Street Reform and Consumer Protection Act when such rules are promulgated, as well as the Sarbanes-Oxley Act of 2002 requirements. This policy will be applied to all applicable incentive compensation for our named executive officers and will enable the Company to take the steps necessary to recoup executive compensation when warranted.

Tax Deductibility of Executive Compensation

Beginning in 2018, Section 162(m) of the Internal Revenue Code limits the federal income tax deduction for annual individual compensation to $1 million for the NEOs, subject to a transition rule for written binding contracts in effect on November 2, 2017 and not materially modified after that date. In the past, Section 162(m)’s deduction limit included an exception for “performance-based” compensation. Our compensation programs were generally designed to qualify for this performance-based exception. To accomplish this, the Company previously asked stockholders to approve equity and incentive compensation plans that included limitations and provisions required to be included under Section 162(m). Now that the performance-based compensation exception is no longer available, the Company will no longer request stockholder approval of Section 162(m) related performance goals for this purpose, and may not generally attempt to meet the requirements previously included in our plans related to the exception; however, the Company intends to comply with the transition rule for November 2, 2017, for written binding contracts as long as the HRCC determines that to be in the Company’s best interest.

Stockholder Feedback and Say-on-Pay Vote Results

At our 2017 Annual Meeting of Stockholders, we held our annual non-binding stockholder advisory vote to approve executive compensation (“say-on-pay”). Our stockholders approved our fiscal 2016 executive compensation, with nearly 97 percent of voting stockholders casting their vote in favor of the say-on-pay resolution. The HRCC took this support level as an indication that stockholders were supportive of our pay design and decisions in fiscal 2016.

We had regular and active discussions with our major stockholders during 2017 on various topics throughout the year, and, during those conversations we did not hear of any specific issues relating to the design of our compensation program. We did not make any changes to our compensation programs as a result of the 2017 say-on-pay vote or our shareholder outreach efforts during 2017. Our HRCC is dedicated to continuous improvement of the executive compensation program to reflect an appropriate alignment of pay and performance, and will continue to seek and review stockholder perspectives when designing and implementing the Company’s executive compensation program.

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COMPENSATION OF EXECUTIVE OFFICERS

CEO Compensation Summary

Tracy Wolstencroft

Mr. Wolstencroft received his base salary for his tenure as President and CEO from January 1, 2017 through July 6, 2017.

Mr. Wolstencroft was eligible for a prorated MIP award based on the time he served as Heidrick’s CEO. However, Mr. Wolstencroft requested the HRCC to allow him to waive eligibility for any 2017 bonus and the HRCC approved his request. Mr. Wolstencroft’s 2014 special award of PSUs paid out at 100% in 2017. Pursuant to his Letter Agreement of September 21, 2017, Mr. Wolstencroft requested that the Board allow him to forfeit his eligibility to earn 2017 Restricted Stock and Performance Stock Units. With respect to his outstanding 2015 and 2016 RSUs and PSU grants, Mr. Wolstencroft remains eligible to earn an agreed upon pro-rata portion of the tranches scheduled to vest in 2017, 2018 and 2019, subject to his continued service as a director through the scheduled vesting dates (and with the performance goals for PSUs deemed to have been achieved at target level performance), and he requested that the Board allow him to forfeit his eligibility to any remaining portions of his 2015 and 2016 RSU and PSU awards. Subsequently, 65,598 PSUs and 68,255 RSUs were forfeited.

Krishnan Rajagopalan

The following table illustrates the three components and corresponding amounts of Mr. Rajagopalan’s total compensation for 2017.

Mr. Rajagopalan received his base salary for his role as head of Search through July 1, 2017 and his base salary, as CEO for July 1, 2017 to December 31, 2017.

Mr. Rajagopalan’s short-term cash bonus opportunity (displayed in the above table as Annual Incentive Earned) is variable, meaning the final payout amount is based solely on the achievement of specific performance goals over a one-year period pro rata formula.

Mr. Rajagopalan’s long-term equity incentive opportunity (displayed in the above table as LTI Award Granted) also is variable, meaning the number of PSUs actually paid to our CEO (if any) depends upon and is subject to the achievement of certain performance measures over a three-year vesting period, and is based on a graduated scale ranging from 0 to 200% of the initial target amount. The other half of the LTI Award consists of time-vesting RSUs that will vest in three equal installments. (See Long Term Incentives on pages 15-16).

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Mr. Rajagopalan also received a special award of Performance-Based Restricted Stock Units (“PBRSUs”), which were awarded in September 28, 2017, as per the terms of his employment agreement and transition to his role as the Company’s President and CEO. The award was valued at $1,000,000 on the date of the grant and will vest ratably over 3 years, based upon goals established and approved by the HRCC. The purpose of these PBRSUs is to adjust Mr. Rajagopalan’s 2017 LTI award prorated to an appropriate level accounting for him serving approximately six months as CEO during 2017.

The Board and the HRCC view these compensation measures as prudent investments for the Company’s future. They are consistent with market practices for executives in the business consulting industry and the companies with which we compete for clients and executive talent.

Named Executive Officer Compensation Components

Alignment with our executive compensation philosophy is achieved through the executive compensation components for our named executive officers as set forth below. Messrs. Wolstencroft, Rajagopalan, Pehlke, Price, Greene and Beard each participated in these programs in 2017. Mr. Wolstencroft retired as CEO on July 6, 2017 and became Chairman of our Board. Mr. Price stepped down from his role at the end of 2017 to return to client service. Mr. Beard left the Company at the end of January 2018. Mr. Pehlke retired from the Company on March 31, 2018.

Named Executive Officer Base Salary

Our HRCC has established base salaries for our named executive officers that, in its judgement, are competitive. Following its review process, in 2017 the Company increased the base salaries for Messrs. Beard and Greene in connection with additional responsibilities in their roles.

Named Executive Officer Annual Incentive

The 2017 bonus paid to each named executive officer under our MIP is set forth below. Of these amounts, 85% was paid in March 2018 and the remaining 15% will be paid in equal annual installments over the three years beginning in 2018.

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This does not include the additional cash bonus awarded to Mr. Price for business development and leading the integration of Heidrick Consulting discussed in further detail in Special 2017 Compensation Components on page 24. Mr. Beard was paid $391,000 in accordance with the terms of his Separation Agreement.

The table below details the HRCC determinations under the applicable MIP performance factors.

Mr. Rajagopalan achieved a score of 45% recognizing his success in leading Search in 2017 as well as taking on the role of interim CEO and then President and CEO. Mr. Pehlke achieved a score of 34.5%, with notable achievements in: sponsoring technology initiatives and achievements, improvements in consultant performance, and leadership in the restructuring that occurred in the fourth 4^th quarter of 2017. Mr. Price achieved a score of 45% due to, among other achievements, sponsoring a comprehensive training program for Leadership Consulting, leading cross-training efforts with Search in both the United States and the European Union, and publishing a book: Accelerating Performance. Mr. Greene achieved a score of 30%, with notable achievements in driving performance management, navigating human resources activities during the restructuring, and his work on executive transitions.

Named Executive Officer Long-Term Incentive

In March 2017 we issued LTI awards to Messrs. Wolstencroft, Rajagopalan, Pehlke, Price, Greene and Beard with half of their LTI awards issued as PSUs and the other half issued as RSUs. Mr. Wolstencroft’s LTI opportunity was equal to 200 percent of base salary; Messrs. Pehlke, Greene, and Beard’s LTI opportunity was equal to 100 percent of base salary; for Messrs. Rajagopalan (as head of Search) and Price it was 50 percent of base salary. See the 2017 Grants of Plan-Based Awards Table on page 27 for more details on the equity grants that our HRCC approved. The following is a summary of the LTI awards issued in 2017.

The LTI targets for all of our outstanding PSUs are discussed in more detail below, and were based on our HRCC’s review of publicly disclosed data for our 2017 peer group for each position and internal pay equity considerations, as well as the Chief Executive Officer’s recommendations and a review of individual performance and potential.

2017-2019 Performance Stock Units. Our 2017 PSUs issued to Messrs. Rajagopalan, Pehlke, Price, Greene and Beard vest over a three-year period, are subject to target goals for the Company’s average operating income over the 2017 through 2019 fiscal years, and will be paid in 2020. The Company did not achieve the operating income goals for 2017. Mr. Beard forfeited all of the unvested equity grants made to him upon his departure from the Company at the end of January 2018.

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Based on the Company’s 2018 operating plan, our HRCC established future operating income goals in the beginning of 2018. After the end of the three-year period, the target number of PSUs may be adjusted based on the average operating income (expressed as a percentage of the Company’s target operating income goals) for each annual performance period as follows:

2016-2018 Performance Stock Units.    Our 2016 PSUs issued to Messrs. Rajagopalan, Pehlke, Greene and Beard will vest over a three-year period, will be subject to the target goals for the Company’s average operating income over the 2016 through 2018 fiscal years, and will be paid in 2019. The Company’s operating income performance for 2016 and 2017 was between threshold and target. Depending on results for 2018, the award may vest at 100% or above or below target for the three-year performance period. A pro rata portion (20,093) of Mr. Wolstencroft’s 2016 PSUs will vest in 2019, reflecting the portion of the vesting period for which Mr. Wolstencroft served as the CEO. Mr. Wolstencroft requested that the Board allow him to forfeit his eligibility to the other PSUs covered by the 2016 grant. Mr. Beard forfeited his 2016 PSUs upon his departure from the Company at the end of January 2018.

2015-2017 Performance Stock Units.    In March 2015, we granted PSUs to Messrs. Wolstencroft, Rajagopalan, Pehlke and Beard, who were named executive officers at the time. 2015 PSUs were not granted to Mr. Price as he was not a named executive officer at the time of grant. The 2015 PSUs vested over a three-year period and were subject to target goals for the Company’s average operating income over the 2015 through 2017 fiscal years, and were paid in 2018 at 87.7% of the initial target amount. The Company exceeded its operating income goals for 2015, but 2016 and 2017 were between threshold and target, resulting in a three-year average performance of 93.86%. This resulted in the payout below the initial target amount for Messrs. Rajagopalan and Pehlke. A pro rata portion (29,914) of Mr. Wolstencroft’s 2015 PSUs vested, reflecting the portion of the vesting period for which Mr. Wolstencroft served as CEO. Mr. Wolstencroft requested that the Board allow him to forfeit his eligibility to the other PSUs covered by the 2015 grant. Mr. Beard forfeited his 2015 PSUs upon his departure from the Company at the end of January 2018.

Special 2017 Compensation Components – Colin Price

For 2017, Colin Price, Executive Vice President and Managing Partner, Leadership Consulting, received a discretionary cash bonus in the amount of $375,000. This award reflects the special contributions he made during the year to business development as several significant new client relationships were launched, among the largest in the firm. Further, he led the integration of Leadership Consulting and Culture Shaping businesses into Heidrick Consulting. As part of the integration, Mr. Price was instrumental in developing the overall strategy and vision for Heidrick Consulting.

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SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation paid or earned by each of the named executive officers for the last three fiscal years, and only reflects information for those years in which the officer was determined to be a “named executive” of the Company.

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2017 GRANTS OF PLAN-BASED AWARDS TABLE

The table below sets forth certain information with respect to awards that were granted during the fiscal year ended December 31, 2017 for each named executive officer.