UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant  o

Check the appropriate box:

CONTENTS

PROXY STATEMENT

DELUXE CORPORATION
3680 Victoria Street North
Shoreview, Minnesota 55126

Our Board of Directors solicits your proxy for the 2018 Annual Shareholders’ Meeting (and any postponement or adjournment of the meeting) for the matters set forth in “What am I voting on and what are the Board’s voting recommendations?” We made this proxy statement available to shareholders beginning on March 22, 2018.

2018 PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement and does not contain all the information that you should consider. We encourage you to read the entire proxy statement carefully before voting.

2017 Performance Highlights

Corporate Governance at Deluxe

Deluxe understands that corporate governance practices change and evolve over time, and we seek to adopt and use practices that we believe will be of value to our shareholders and will positively aid in the governance of the Company. Our governance practices include the following:

What am I voting on and what are the Board’s voting recommendations?

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is the purpose of the annual meeting?

At our annual meeting, the Board of Directors asks shareholders to vote on the matters disclosed in the Notice of Annual Meeting of Shareholders that preceded this Proxy Statement, which are described in more detail below.

We will also consider any other business that may be properly presented at the meeting (although we are not expecting any other matters to be presented) and management will report on Deluxe’s performance during the last fiscal year and respond to questions from shareholders.

Who is entitled to vote at the meeting?

The Board has set March 8, 2018, as the record date for the meeting. If you were a shareholder of record at the close of business on March 8, 2018, you are entitled to vote at the meeting. You have one vote for each share of common stock you held on the record date.

As of the record date, 47,822,807 shares of Deluxe common stock were outstanding. Deluxe does not have any other class of capital stock outstanding.

How many shares must be present to hold the meeting?

A quorum is necessary to hold the meeting and conduct business. The presence of shareholders who can direct the vote of at least a majority of the outstanding shares of common stock as of the record date is considered a quorum. A shareholder is counted present at the meeting if the shareholder: (1) is present and votes in person at the meeting or (2) has properly submitted a proxy or voted by telephone or the Internet.

If you vote “WITHHOLD” or “ABSTAIN,” your shares will still be counted as present at the meeting for the purposes of determining a quorum.

What is the difference between a shareholder of record and a “street name” holder?

If your shares are registered directly in your name with Deluxe’s transfer agent, EQ Shareowner Services (formerly Wells Fargo Bank, N.A.), you are considered the shareholder of record with respect to those shares.

If your shares are held in a stock brokerage account or by a bank, trustee or other nominee, you are still considered the beneficial owner of the shares, but your shares are deemed to be held in “street name.”

What am I voting on, how many votes are required to approve each item, and how does the Board recommend that I vote?

How do I vote my shares?

We are mailing the Notice of Internet Availability of Proxy Materials (Internet Notice) to shareholders of record on or about March 22, 2018. If your shares are held in street name, your broker or other agent is responsible for sending you an Internet Notice. You will not receive a printed copy of these proxy materials unless you request to receive these materials in hard copy by following the instructions provided in the Internet Notice. Instead, the Internet Notice will instruct you how to access and review all the important information contained in these proxy materials, and how to vote. If you received an Internet Notice by mail and would like to receive a printed copy of these proxy materials, you should follow the instructions for requesting such materials included in the Internet Notice.

Internet	Instructions can be found on the Internet Notice. The internet procedures are designed to (1) verify your identity, (2) provide voting instructions, and (3) confirm those voting instructions have been properly recorded.       •     Go to www.proxyvote.com       •     Vote on the proposals	•     11:59 p.m. Eastern Time on        May 1, 2018 •     Internet voting is available 24        hours a day
Telephone	The telephone procedures are designed to (1) verify your identity, (2) provide voting instructions, and (3) confirm those voting instructions have been recorded properly.       •     Call 800-690-6903 (toll-free)	•     11:59 p.m. Eastern Time on        May 1, 2018 •     Telephone voting is available        24 hours a day
Mail1	You own your shares directly:       •     Complete, sign, and date the proxy card       •     Mail it in the pre-addressed envelope that accompanies the              proxy card You own your shares in street name:       •     Request a voting instruction card according to the              instructions on the Internet Notice mailed by your broker or              other agent       •     Complete, sign, and date the voting instruction card              provided by the broker or other agent       •     Mail the voting instruction card in the pre-addressed              envelope provided	•     Directly-Held Shares: Proxy        cards must be received        before May 2, 2018 (date of        the annual meeting) in order        for the shares to be timely        voted •     Shares Held in Street Name:        Voting instruction cards must        be received before the date        specified on the voting        instruction card in order for        the shares to be timely voted
In-person2	You own your shares directly:       •     Complete a ballot at the meeting You own your shares in street name:       •     Obtain a signed proxy from your broker, trustee, bank or              other nominee giving you the right to vote on the shares       •     Provide the signed proxy (above) at the meeting       •     Complete a ballot at the meeting	•     May 2, 2018

What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials?

It means you hold shares registered in more than one account. To ensure that all of your shares are voted, if you vote by telephone or the Internet, vote once for each Internet Notice you receive. If you wish to consolidate your accounts, please contact our stock transfer agent, EQ Shareowner Services (formerly Wells Fargo Bank, N.A.), at P.O. Box 64854, St. Paul, MN 55164 or by telephone at 800-468-9716 (toll-free).

You also may receive a “voting instruction” card, which looks very similar to a proxy card. Voting instructions are prepared by brokers, trustees, banks or nominees for shareholders who hold shares in street name.

Can I vote my shares in person at the meeting?

If you are a shareholder of record, you may vote your shares at the meeting by completing a ballot at the meeting. However, even if you currently plan to attend the meeting, we recommend that you submit your proxy ahead of time so that your vote will be counted if, for whatever reason, you do not attend the meeting.

If you hold your shares in street name, you may vote your shares in person at the meeting only if you provide a signed proxy from your broker, trustee, bank or nominee giving you the right to vote such shares at the meeting.

What if I submit by proxy but do not specify how I want my shares voted?

If you vote your shares directly (as opposed to voting through a broker or other intermediary) and do not specify on your proxy card (or when giving your proxy by telephone or the Internet) how you want to vote your shares, we will vote them as the Board recommends as outlined above.

Can I change my vote?

Yes. If you are a shareholder of record, you can change your vote and revoke your proxy at any time before it is voted at the meeting in any of the following ways:

If you hold your shares in street name, you should follow the voting instructions provided to you by your broker, trustee, bank or nominee.

Who pays the cost of proxy preparation and solicitation?

Deluxe pays for the cost of proxy preparation and solicitation, including the charges and expenses of brokerage firms or other nominees for forwarding proxy materials to beneficial owners. We have retained Georgeson, Inc., a proxy solicitation firm, to assist in the solicitation of proxies for a fee of approximately $8,000 plus associated costs and expenses.

We are soliciting proxies primarily by use of the Internet. In addition, proxies may be solicited by mail, telephone or personally by directors, officers and regular employees of Deluxe. These individuals receive no additional compensation for these services.

ITEM 1: ELECTION OF DIRECTORS

Nominees for Election

There are currently ten individuals serving on the Board. Each director’s term expires as of the date of the annual meeting of shareholders. The Board has determined that the size of the Board will continue to be ten directors as of the date of the annual meeting of shareholders and recommends that the ten individuals presented on the following pages be elected to serve on the Board until the 2019 annual meeting of shareholders. All of the nominees are current directors. In addition, with the exception of Mr. Schram, who serves as Deluxe’s CEO and therefore, by definition, cannot be deemed independent, all nominees have been determined by the Board to meet the independence standards of the New York Stock Exchange (see the discussion of Director Independence in the “Board Structure and Governance” section of this Proxy Statement).

Each of the ten individuals listed below has consented to being named as a nominee in this Proxy Statement and has indicated a willingness to serve if elected. However, if any nominee becomes unable to serve before the election, the shares represented by proxies may be voted for a substitute designated by the Board, unless a contrary instruction is indicated in this Proxy Statement.

Pursuant to our Corporate Governance Guidelines (discussed in the “Corporate Governance Principles” section on page 15), the following policy applies to the election of directors:

At any shareholder meeting at which directors are subject to an uncontested election (i.e., an election where the only nominees are those recommended by the Board), any nominee for director who receives a greater number of “WITHHOLD” votes from his or her election than “FOR” votes shall submit to the Board, within five (5) business days of certification of the shareholder vote by the Inspector of Elections, a written offer to resign from the Board.

The Corporate Governance Committee shall promptly consider the resignation offer and recommend to the full Board whether to accept it. In considering whether to recommend that the Board accept or reject the resignation offer, the Corporate Governance Committee will consider all factors deemed relevant including, without limitation, (i) the perceived reasons that shareholders withheld votes from the director, (ii) the length of service and qualifications of the director, (iii) the director’s contributions to the Company, (iv) compliance with applicable listing standards, (v) the purpose and provisions of the Corporate Governance Guidelines, and (vi) the best interests of the Company and its shareholders.

To the extent that one or more director resignations are accepted by the Board, the Corporate Governance Committee will recommend to the Board whether to fill such vacancy or vacancies, or to reduce the size of the Board.

Any director who tenders his or her offer to resign from the Board pursuant to this provision shall not participate in the Corporate Governance Committee or Board deliberations regarding whether to accept the offer of resignation.

The Board will act on the Corporate Governance Committee’s recommendation within 90 days following the certification of the shareholder vote by the Inspector of Elections, which action may include, without limitation, acceptance of the offer of resignation, adoption of measures intended to address the perceived issues underlying the vote, or rejection of the resignation offer. Thereafter, the Board will disclose its decision whether to accept the director’s resignation offer and the reasons for rejecting the offer, if applicable, in a current report on Form 8-K to be filed with the United States Securities and Exchange Commission (“SEC”) within four business days after the Board’s determination.

Recommendation of the Board

The Board recommends that you vote “FOR” the election of each of the following nominees:

Ronald C. Baldwin Vice Chairman (Retired), Huntington Bancshares, Inc.     Director since: 2007 Age: 71 Independent: Yes	Background
	•	Vice Chairman of Huntington Bancshares, Inc., a regional bank holding company (2001-2006)
		○	Mr. Baldwin was responsible for overseeing Huntington’s regional banking line of business, which provided both commercial and retail financial products and services through nearly 400 regional banking offices
	Qualifications
	•	35 years in the banking and financial services industry
	•	Provides unique insight into challenges faced by financial institutions as Deluxe believes it expands the business services and solutions offered to financial institutions
	•	Adept in offering counsel on matters related to corporate finance and capital structure, all of which serve the needs of Deluxe as it seeks to maintain financial discipline while pursuing growth opportunities
	Active Committees:  Compensation; Finance (Chair)

Cheryl E. Mayberry McKissack CEO of Nia Enterprises LLC     Director since: 2000 Age: 62 Independent: Yes	Background
	•	Chief Executive Officer of Nia Enterprises LLC since 2000
		○	Nia Enterprises LLC is a Chicago-based marketing, entrepreneurial business and digital consulting firm
	•	CEO of Ebony Media Operations LLC (May 2016-March 2017), print and media company
	•	COO of Johnson Publishing Company (“JPC”) and President of its affiliate, JPC Digital (2013-2016)
	•	Provided project support to JPC under a consulting relationship between Nia Enterprises and JPC prior to her appointment as COO and President of JPC Digital. Projects included several digital and business transformational projects, including the launch of the flagship ebony.com website
	•	Served as the Worldwide Senior Vice President and General Manager for Open Port Technology and was Vice President for the Americas and a founding member of the Network Systems Division for 3Com (formerly U.S. Robotics)
	Qualifications
	•	Recently completed a 14-year tenure as director of Private Bancorp, Inc. (2003-2017), where she served as Chair and Vice Chair of the Governance and Compensation Committees
	•	Associate Adjunct Professor of Entrepreneurship at the Kellogg School of Business, Northwestern University, where she lectured for 10 years (2005-2015)
	•	As a successful entrepreneur and digital technology executive, Ms. Mayberry McKissack brings a unique perspective to the Board as Deluxe pursues its growth strategies within the Small Business Services segment
	•	Given that a key component of Deluxe's strategy for growing its Small Business Services segment involves Internet-based marketing and new media solutions, her experience in these areas is a valuable complement to the skills and experience she brings to the Board as a small business owner and former executive of several technology and new business ventures
	Active Committees:  Compensation; Finance

John L. Stauch Executive VP & CFO of Pentair plc     Director since: 2016 Age: 53 Independent: Yes	Background
	•	Executive Vice President and Chief Financial Officer of Pentair plc, a diversified manufacturing company, since 2007
	•	Chief Financial Officer of the Automation and Control Systems unit (2005-2007) of Honeywell International, Inc.
	•	Served as Chief Financial Officer and Information Technology Director of PerkinElmer Optoelectronics and various executive, investor relations and managerial finance positions within Honeywell International, Inc. and its predecessor AlliedSignal, Inc. (1994-2005)
	Qualifications
	•	As Executive Vice President and Chief Financial Officer of Pentair plc since 2007, and a long-term financial executive, Mr. Stauch is a financial expert and has extensive direct experience with many aspects of public company strategy and operations
	Active Committees:  Audit (Chair); Finance

Victoria A. Treyger Chief Revenue Officer of Kabbage, Inc.     Director since: 2017 Age: 48 Independent: Yes	Background
	•	Chief Revenue Officer of Kabbage, Inc., a financial technology company that provides funding directly to small businesses and powers automated lending for financial institutions around the globe through its technology and data platform. Ms. Treyger served as Chief Marketing Officer (2012-2015), and was promoted to Chief Revenue Officer in 2015 where she oversees sales and marketing
	•	Served as Chief Marketing Officer of RingCentral (2010-2012) and Travelocity (2005-2010)
	•	Worked at American Express and Amazon in various senior marketing, product and general management roles (1997-2004)
	Qualifications
	•	Brings a wealth of experience in building great brands and scaling revenues through innovative sales and marketing
	•	Extensive experience with positioning, scaling, and driving growth with small businesses and financial institutions through sales channel strategy, digital and brand marketing, and analytics
	•	Currently serves as advisor to several high-growth companies, including Health IQ and Betterment
	Active Committees:  Compensation; Corporate Governance

Director Skills, Experience and Background

Deluxe is a 100+ year-old company that provides a number of personalized products and services to small businesses, financial institutions and consumers.

We operate in highly competitive markets characterized by rapidly evolving technologies and exposure to business cycles. The Corporate Governance Committee is responsible for assessing with the Board the appropriate skills, experience, and background that we seek in Board members in the context of our business and the existing composition of the Board. This assessment includes numerous factors, such as:

The Board determines whether a nominee’s background, experience, personal characteristics, and skills will advance the Board’s goal of creating and sustaining a Board that can support and oversee the Company’s complex activities. Our Board is committed to actively seeking superior, diverse director candidates for consideration. As set forth in our Corporate Governance Guidelines, the Committee and the Board periodically review and assess the effectiveness of the practices used in considering potential director candidates.

Our Board is comprised of experienced leaders with a combination of the skills and business expertise necessary to provide appropriate oversight, critical viewpoints and guidance to a transforming business. The following chart represents some of the key skills that our Board has identified as particularly valuable to the effective oversight of the Company and the execution of our strategy.

Director Tenure

If all of the nominees are elected to the Board, after the 2018 annual meeting of shareholders our directors will have served an average of 11 years on the Board. This mix of tenure on the Board is intended to support the view that the Board as a whole represents a “portfolio” of new perspectives and the deep institutional knowledge of longer-tenured directors.

BOARD STRUCTURE AND GOVERNANCE

Board Oversight and Director Independence

Our businesses, property and affairs are managed under the general direction of our Board of Directors (the “Board.”) In providing this oversight, the Board adheres to a set of Corporate Governance Guidelines designed to ensure that the Board has access to relevant information, and is structured and operates in a manner allowing it to exercise independent business judgment.

A critical component of our corporate governance philosophy is that a majority of our directors, and preferably a substantial majority, meet strict standards of independence, meaning that they have no relationship with Deluxe, directly or indirectly, that could impair their ability to make objective and informed judgments regarding all matters of significance to Deluxe and its shareholders. The listing standards of the New York Stock Exchange (“NYSE”) require that a majority of our directors be independent, and that our Audit, Compensation, and Corporate Governance Committees be comprised entirely of independent directors. In order to be deemed independent, a director must be determined by the Board to have no material relationship with Deluxe other than as a director. In accordance with the NYSE listing standards, our Board has adopted formal Director Independence Standards setting forth the specific criteria by which the independence of our directors is determined, including restrictions on the nature and extent of any affiliations that directors and their immediate family members may have with Deluxe, its independent registered public accounting firm, or any commercial or not-for-profit entity with which Deluxe has a relationship, and which also require consideration of any other relationship that may impair independence. Consistent with regulations issued by the SEC and NYSE listing standards, our Director Independence Standards also prohibit Audit and Compensation Committee members from accepting, directly or indirectly, any consulting, advisory or other compensatory fee from Deluxe, other than in their capacity as Board or committee members. The complete text of our Director Independence Standards is posted on our website at www.deluxe.com under “About Us – Investor Relations – Corporate Governance – Director Independence Standards.”

Following its assessment, the Board has determined that every director and nominee, with the exception of Mr. Schram, satisfies our Director Independence Standards. The Board also has determined that every member of its Audit, Compensation, Corporate Governance, and Finance Committees is independent.

The Board has considered, including most recently in February 2018, the fact that Mr. Metviner is the Chief Marketing Officer of Output Services Group, Inc. (“OSG”), which has two distinct business relationships with us: (1) a subsidiary company of OSG purchases products and services from us in the ordinary course of business and (2) our subsidiary company sells products and services to OSG in the ordinary course of business. The aggregate amount OSG paid to us for these purchases in 2017 was $341,000 which was less than 0.1% of our gross revenues for 2017 and less than 2% of OSG’s gross revenues for 2017. Based on the customary nature of these transactions, the fact that Mr. Metviner has no material interest in the transactions, and the limited amounts involved in these transactions, our Board concluded that this relationship does not impair Mr. Metviner’s independence.

Ms. Treyger is the Chief Revenue Officer of Kabbage, Inc. (“Kabbage”). Kabbage has a relationship with us under which it pays us a fee for small business loan customer referrals. During 2017, the aggregate fees Kabbage paid to us was $4,300 which was less than 0.1% of our gross revenues for 2017 and less than 2% of Kabbage’s gross revenues for 2017. Based on the customary nature of these transactions, the fact that Ms. Treyger has no material interest in the transactions, and the limited amount involved in these transactions, our Board concluded that this relationship does not impair Ms. Treyger’s independence.

Corporate Governance Principles

As indicated above, our Board has adopted a set of Corporate Governance Guidelines to assist it in carrying out its oversight responsibilities. These Guidelines address a broad range of topics, including director qualifications, director nomination processes, director retirement policies, Board and committee structure and processes, director education, CEO evaluation, management succession planning and conflicts of interest.

Investors may find these guidelines on our website at www.deluxe.com under “About Us – Investor Relations – Corporate Governance – Corporate Governance Guidelines.”

Board Effectiveness and Evaluations

Our Board and each Board committee conduct annual self-evaluations of their performance and processes, which are overseen by the Board’s Corporate Governance Committee. These evaluations are designed to ensure that the Board and each committee is functioning effectively and to identify any issues or potential areas for improvement. In addition, every three years the Board undergoes an effectiveness evaluation conducted by an independent, third-party governance expert. The most recent third-party evaluation was conducted during late 2017.

Code of Business Ethics

All of our directors and employees, including our CEO, Chief Financial Officer (“CFO”) and other executive officers, are required to comply with our Code of Business Ethics (“Code of Ethics”) to help ensure that our business is conducted in accordance with applicable legal and ethical standards. Our Code of Ethics requires strict adherence to the letter and spirit of all laws and regulations applicable to our business, and addresses professional conduct, including customer relationships, respect for co-workers, conflicts of interest, insider trading, the integrity of our financial recordkeeping and reporting, and the protection of our intellectual property and confidential information. Employees are required to bring any violations or suspected violations of the Code of Ethics to Deluxe’s attention through management or our Law Department, or by using our confidential, third-party ethics and compliance hotline. The full text of our Code of Ethics is posted on our website at www.deluxe.com under “About Us – Investor Relations – Corporate Governance – The Deluxe Corporation Code of Business Ethics.” The Code of Ethics is available in print free of charge to any shareholder who submits a request to: Corporate Secretary, Deluxe Corporation, 3680 Victoria Street North, Shoreview, Minnesota 55126.

Political Contributions Policy

It is not our practice to make political contributions. We permit political contributions only upon written approval by our Executive Leadership Team in their capacity as the corporate Compliance Committee under our Code of Ethics. The Compliance Committee has not approved any such contributions. We are a member of various trade groups that represent the interests of specified industries. However, as a part of those memberships, we have not provided funds specifically designated for political contributions.

Related-Party Transaction Policy and Procedures

The Board maintains written procedures under which the Corporate Governance Committee is responsible for reviewing potential or actual conflicts of interest, including any proposed related-party transactions and interlocking relationships involving executive officers or Board members. The Committee determines whether any such potential or actual conflicts would require disclosure under securities laws, cause a director to be disqualified from being deemed independent, or cause a transaction being considered by the Board to be voidable if the conflict were not disclosed. The Committee also considers whether the proposed transaction would result in a violation of any law or would otherwise be inappropriate in light of the nature and magnitude of any interest of the director or executive in the entity or transaction giving rise to the potential conflict.

The Committee may take those actions it deems necessary, with the assistance of any advisers it deems appropriate, in considering potential conflicts of interest. While it is expected that in most instances the Committee can make the necessary determination, where required by law or warranted by the significance of the issue, the matter will be referred to the full Board for resolution.

Board Composition and Qualifications

Our Corporate Governance Committee oversees the process for identifying, evaluating and recommending the nomination of candidates for the Board. While not maintaining a specific policy on Board diversity requirements, we do believe that our directors should have diverse backgrounds and possess a variety of qualifications, experience and knowledge that complement the attributes of other Board members and enable them to contribute effectively to the Board’s oversight role. Deluxe also believes that a predominance of Board members should have a background in business, including experience in markets served by the Company or in which it is developing product and service offerings, and recognizes the benefit of Board members having an understanding of the methods by which other boards address issues common to publicly traded companies. We also believe the Board should include both actively employed and retired senior corporate officers, and that the Board should include directors with a mix of tenures. The Board believes that the diverse mix of skills, qualifications and experience represented by the nominees (as addressed more fully in the section of this Proxy Statement entitled “Director Skills, Experience and Background”), as well as its ongoing evaluation and continuous improvement processes (discussed above under heading “Board Effectiveness and Evaluations,”) enables the Board to perform its responsibilities effectively.

The Board of Directors has established the following specific guidelines for nominees to the Board:

Director Selection Process

All Board members are elected annually by our shareholders, subject to the Board’s right to fill vacancies in existing or new director positions on an interim basis. Based on advice from the Corporate Governance Committee, each year the Board recommends a slate of nominees to be presented for election at the annual meeting of shareholders.

The Corporate Governance Committee considers candidates recommended by members of the Board or recommended by our shareholders, and the Committee reviews such candidates in accordance with our bylaws and applicable legal and regulatory requirements. Candidates recommended by our shareholders are evaluated using the same criteria and same procedures as candidates recommended by Board members. In order for such shareholder recommendations to be considered, shareholders must provide the Corporate Governance Committee with sufficient written documentation to permit a determination by the Board as to whether a candidate meets the required and desired director selection criteria and our Corporate Governance Guidelines applicable to directors, as outlined above. Such documentation and the name of the recommended director candidate must be sent by U.S. mail to our Corporate Secretary at the address indicated on the Notice of Annual Meeting of Shareholders. Our Corporate Secretary will send properly submitted shareholder recommendations to the Chair of the Corporate Governance Committee for consideration.

Our bylaws require any shareholder wishing to formally nominate a candidate at the annual meeting of shareholders to give written notice of the nomination to our CEO or Corporate Secretary no later than 120 days prior to the first anniversary of the previous year’s annual meeting. The shareholder must attend the meeting with the candidate and propose the candidate's nomination for election to the Board at the meeting. The shareholder’s notice must set forth as to each nominee: 1) the name, age, business address and residence address of the person; 2) the principal occupation or employment of the person; 3) the number of shares of our stock owned by the person; 4) the written and acknowledged statement of the person that such person is willing to serve as a director; and 5) any other information relating to the person that would be required to be disclosed in a solicitation of proxies for election of directors pursuant to Regulation 14A under the Exchange Act if the candidate had been nominated by or on behalf of the Board. No shareholders submitted director nominations in connection with this year’s meeting. Any shareholders desiring to present a candidate at the 2019 annual meeting of shareholders must furnish the required notice no later than January 2, 2019.

When a vacancy or a new position on the Board needs to be filled, the CEO, in consultation with the Chair of the Corporate Governance Committee, drafts a profile of the candidate he or she believes would provide the most meaningful contribution to the Board as a whole. The profile is submitted to the Committee for approval. In order to properly staff its various committees and support its succession planning initiatives, the Board currently believes that a Board consisting of nine to eleven directors is the optimal size. The Committee has engaged third-party search firms to assist it in identifying suitable candidates for open director positions. The firms selected, as well as the specific terms of the engagement, are based on the specific search criteria established by the Committee. Members of the Board also are given the opportunity to submit names of potential candidates based on the profile developed. Each candidate is subject to an initial screening process after which the Committee selects the candidates that it wishes to interview. The Chair of the Board, the CEO and at least a majority of the Committee interviews each selected candidate and, concurrently with the interviews, the candidate must confirm his or her availability for regularly scheduled Board and committee meetings. The Committee also will assess each candidate’s potential conflicts of interest and the ways in which his or her qualifications, experience and knowledge complement those of the members of the Board. The Committee reviews the interviewers’ reports and recommendations, and makes the final determination as to which candidates are recommended for election to the Board. Depending on when suitable candidates are identified, the Board may decide to appoint a new director to serve on the Board until the next annual meeting of shareholders.

Meetings of the Board of Directors

There were nine meetings of the Board of Directors in 2017. Each director attended, in person or by telephone, at least 75 percent of the aggregate of all meetings of the Board and its committees on which he or she served during the year. It is our policy that directors attend our annual shareholder meetings. All of our then-current directors attended our annual shareholder meeting in person in 2017.

Board Responsibilities

Board Responsibilities. The Board oversees, counsels, and directs management in the long-term interests of the Company and our shareholders. The Board’s responsibilities include:

The Board and its committees meet throughout the year on a set schedule, hold special meetings, and act by written consent from time to time, as appropriate. At each Board meeting, time is reserved for the independent directors to meet without the CEO present. Officers and members of management regularly attend Board meetings to present information on our business and strategy. Board members are encouraged to make site visits to meet with local management.

Board Committees. The Board assigns responsibilities and delegates authority to its committees and the committees regularly report on their activities and actions to the full Board. The Board has four standing committees: Audit, Compensation, Corporate Governance, and Finance. Each committee can engage outside experts, advisors and counsel to assist the committee in its work. Each committee has a written charter approved by the Board. We post each charter on our website at www.deluxe.com under “About Us – Investor Relations – Corporate Governance – Board of Directors Committee Charters.” A copy of each charter is available in print free of charge to any shareholder who submits a request to: Corporate Secretary, Deluxe Corporation, 3680 Victoria Street North, Shoreview, Minnesota 55126.

The following table identifies the current committee members. As discussed previously, the Board has determined that each member of the Audit, Compensation, Corporate Governance, and Finance Committees is an independent director in accordance with NYSE standards.

Ronald C. Baldwin				C
Cheryl E. Mayberry McKissack
Don J. McGrath
Neil J. Metviner
Stephen P. Nachtsheim			C
Thomas J. Reddin		C
Martyn R. Redgrave
Lee J. Schram
John L. Stauch	C
Victoria A. Treyger

Committee Member

C

Committee Chair

The following tables provide a summary of each committee’s responsibilities, the number of meetings held by each committee during the last fiscal year and the names of the directors currently serving on each committee.

Communications with Directors

Any interested party having concerns about our governance or business practices, or otherwise wishing to communicate with our Board, our independent directors as a group or any individual director, may submit their concerns in writing to the Non-Executive Chairman of the Board or the designated group of directors or individual director in the care of the Corporate Secretary, Deluxe Corporation, 3680 Victoria Street North, Shoreview, Minnesota 55126.

Board Leadership Structure; Non-Executive Chairman; Executive Sessions

As stated in our Corporate Governance Guidelines, the Board does not maintain a written policy regarding separation of the offices of Chairman and CEO, believing that this issue should be addressed as part of the Board’s succession planning processes. The Board has, however, maintained a separation of the Chairman and CEO roles since November of 2005, when the Company was engaged in a search for a CEO to lead the Company’s transformation. The Board has found this structure to be effective, both in allowing the CEO to focus on execution of the Company’s strategy and assisting the CEO in managing the work of the Board. Martyn R. Redgrave has served as Non-Executive Chairman of the Board since August 1, 2012. Mr. Redgrave's duties include moderating meetings and executive sessions of the independent directors and acting as the principal liaison between the independent directors and the CEO with respect to Board governance issues.

Board Role in Risk Oversight

The Board takes an active role in risk oversight related to the Company, both as a full Board and through its committees. The independent directors of the Board regularly meet in executive session, without management present, to assess the quality of its meetings and to provide its observations to the CEO regarding the Company’s business challenges and risk mitigation strategies, among other things.

In addition, the Company conducts an annual enterprise-wide risk assessment. A formal report is delivered to the Audit Committee, the chair of which provides a synopsis to the full Board. The CEO also presents an annual enterprise-wide risk assessment update to the full Board. Updates are provided at regularly scheduled meetings of the Board and more frequently if required. The objectives for the risk assessment process include: (1) addressing the NYSE governance requirement that the Audit Committee discuss policies related to risk assessment and risk management; (2) developing a defined list of key risks to be monitored by the Audit Committee, Board and Company management; (3) determining whether any risks require additional or higher-priority mitigation efforts; (4) facilitating discussion of the risk factors to be included in the Company’s SEC reports; and (5) guiding the development of the Company’s internal audit plans.

In 2017, as in prior years, the risk-assessment process was conducted by members of our Assurance and Risk Advisory Services department working with the Executive Leadership Team and our Enterprise Risk Council, which consists of senior-level staff from the legal, finance and other shared services departments, as well as senior-level representatives from the Small Business Services and Financial Services business segments. Members of the Assurance and Risk Advisory Services department interviewed key department and functional leaders in the Company to identify and evaluate potential risks and associated mitigating factors and strategies. Identified risks were prioritized based on the potential exposure to the Company, measured as a function of likelihood of occurrence and potential severity of impact if the risk were to materialize. The process included evaluating management’s preparedness to respond to the risk. The risk profiles and current and future mitigating actions were discussed and refined during subsequent discussions with the Executive Leadership Team and Assurance and Risk Advisory Services personnel. A summary of the results of the risk assessment process and our risk mitigation activities was presented to the Audit Committee, which furnished a report regarding such assessment and activities to, and facilitated a discussion with, the full Board.

Audit Committee Expertise; Complaint Handling Procedures

In addition to meeting the independence requirements of the NYSE and the SEC, all members of the Audit Committee have been determined by the Board to meet the financial literacy requirements of the NYSE’s listing standards. The Board also has determined that at least two members of the Audit Committee, John L. Stauch, the current Audit Committee Chair, and Don J. McGrath are both “audit committee financial experts” as defined by SEC regulations.

In accordance with federal law, the Audit Committee has adopted procedures governing the receipt, retention and handling of complaints regarding accounting and auditing matters. These procedures include a means for employees to submit concerns on a confidential and anonymous basis through the Company’s ethics and compliance hotline, which is operated by a third party under contract.

Compensation Committee Processes and Procedures

The authority and responsibilities of the Compensation Committee are governed by its charter, a copy of which can be found on our website at www.deluxe.com under “About Us – Investor Relations – Corporate Governance – Compensation Committee Charter” together with applicable laws, rules, regulations and NYSE listing standards.

The Compensation Committee reviews and approves corporate goals and objectives related to the CEO’s compensation, leads the Board’s evaluation of the CEO’s performance in light of those goals and objectives, and recommends to the Board the CEO’s compensation based on the evaluation. The Committee is expected to engage the entire Board in its evaluation of the CEO’s performance and in setting an appropriate level of compensation.

The Committee also reviews and approves base salary and incentive compensation levels, stock ownership targets, employment-related agreements and any unique benefit plans or programs for the members of the Executive Leadership Team. As part of this responsibility, the Committee evaluates and makes recommendations to the Board regarding the Company’s compensation philosophy and structure, the design of incentive compensation plans in which executive officers participate, and all equity plans. It establishes incentive compensation goals and performance measurements for executive officers and determines the levels of achievement of each executive officer relative to the goals and measurements. Subject to limits imposed by the plans, applicable law and the Board, the Committee also oversees administration of equity-based plans, deferred compensation plans, benefit plans, retirement and Employee Retirement Income Security Act (“ERISA”) excess plans, and is also responsible for determining the formula used to calculate contributions to the Company’s current profit sharing plan. The Committee has delegated to management committees the responsibility to administer broad-based benefit plans and to oversee investment options and management of retirement and deferred compensation programs.

Although matters of director compensation ultimately are the responsibility of the full Board, the Compensation Committee works in conjunction with the Board’s Corporate Governance Committee and its independent compensation consultants in evaluating director compensation levels, making recommendations regarding the structure of director compensation, and developing a director pay philosophy that is aligned with the interests of the Company’s shareholders.

The Committee has the authority to engage compensation consultants to assist it in conducting the activities within its general scope of responsibility. The Committee retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent consultant commencing in 2017. The Committee has the authority to retain, terminate and approve the fees of a compensation consultant for the purpose of assisting in the evaluation of director, CEO and other executive compensation. Prior to retaining FW Cook, the Committee assessed its relationship with the prospective consultant and determined that no conflicts of interest existed and that FW Cook was independent of the Company. Among other factors supporting FW Cook’s independence, no fees other than for compensation consulting services were paid to FW Cook in 2017.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised entirely of independent directors. No member of the Compensation Committee has ever been an officer or employee of Deluxe. None of our executive officers serves as a member of the Compensation Committee of any other company that has an executive serving as a member of the Deluxe Board of Directors. None of our executive officers serves as a member of the board of directors of any other company that has an executive serving as a member of the Compensation Committee.

Non-Employee Director Compensation

The general policy of the Board is that compensation for independent directors should be a mix of cash and equity, with the majority of compensation provided in the form of equity. The Corporate Governance Committee, consisting solely of independent directors, has the primary responsibility for reviewing director compensation and considering any changes in how we compensate our independent directors. The Board reviews the committee’s recommendations and determines the amount of director compensation.

The independent compensation consultant and the Total Rewards group in the Human Resources department support the Committee in recommending director compensation and creating director compensation programs. In addition, the Committee can engage outside advisors, experts, and others to assist the Committee. The director peer group is the same as the peer group used in 2017 listed on page 34 to set executive compensation and consisted of 16 companies with some similar characteristics to the Company, as described in detail below under “Compensation Discussion and Analysis; Benchmarking Process.” The Committee generally targets cash and equity compensation at the median of the peer group.

For 2017, annual cash compensation for independent directors consisted of the following elements:

The Corporate Governance Committee reviews director compensation on an annual basis, taking into account factors such as workload and market data.

Non-employee directors also received $1,500 for each approved Company site visit and director education program attended, up to an aggregate of five per year. Directors also may receive additional compensation for the performance of duties assigned by the Board or its committees that are considered beyond the scope of the ordinary responsibilities of directors or committee members.

Deluxe maintains a Non-Employee Director Stock and Deferral Plan (the “Director Plan”), which is part of Deluxe’s shareholder-approved 2017 Long-Term Incentive Plan (the “LTIP”). The purpose of the Director Plan is to provide an opportunity for non-employee directors to increase their ownership of Deluxe’s common stock and thereby align their interests in the long-term success of Deluxe with those of other shareholders. Under the Director Plan, each non-employee director may elect to receive, in lieu of cash retainers, shares of Deluxe common stock having an equal value, based on the closing price of Deluxe’s stock on the NYSE as of the quarterly payment date. The shares of stock receivable pursuant to the Director Plan are issued as of the quarterly payment date or, at the option of the director, credited to the director in the form of deferred restricted stock units (“RSUs.”) These RSUs are converted into shares of common stock and issued to the director on the earlier of the tenth anniversary of February 1st of the year following the year in which the non-employee director ceases to serve on the Board or such other objectively determinable date as is elected by the director in his or her deferral election (for example, upon termination of service as a director). Each RSU entitles the holder to receive dividend equivalent payments equal to the dividend payment on one share of common stock. RSUs issued pursuant to the Director Plan also convert into shares of common stock and become immediately issuable in connection with certain defined changes of control of Deluxe. All shares of common stock issued pursuant to the Director Plan are issued under the LTIP.

Under the terms of the Director Plan, non-employee directors also are eligible to receive other equity-based awards to further align their interests with shareholders and to assist them in achieving and maintaining their established share ownership targets, and have been provided the opportunity to defer any equity grant awarded to them under terms similar to those described above for deferral of cash retainers and fees. Any stock options granted to non-employee directors must have an exercise price equal to the fair market value (“FMV”) of Deluxe’s common stock on the date of grant, and no more than 5,000 options may be granted to a non-employee director in any one year. Non-employee directors did not receive any option grants in 2017, but each non-employee director re-elected to the Board at last year’s annual meeting received a grant of restricted stock on May 4, 2017, with a grant date fair value of $135,028, which shares vest on May 4, 2018. Each share of restricted stock entitles the holder to the rights of a shareholder, including the right to vote the shares of restricted stock and receive dividend equivalent payments, provided that the dividend equivalent payments are held by Deluxe until the restricted stock vests, at which point they are paid to the holder. Equity grants to directors are recommended by the Compensation Committee, in consultation with the Corporate Governance Committee, and are approved by the full Board.

Mr. Nachtsheim, the only non-employee director who was elected to the Board prior to October 1997, is also eligible for certain retirement payments under the terms of a Board retirement plan that has since been replaced by the Director Plan. Under this predecessor plan, he is entitled to receive an annual payment equal to the annual Board retainer in effect on July 1, 1997 ($30,000 per year) for the number of years during which he served on the Board prior to October 31, 1997. No further benefits are accruing under this predecessor plan. In calculating a director’s eligibility for benefits under this plan, partial years of service are rounded up to the nearest whole number. Retirement payments do not extend beyond the lifetime of the retiree and are contingent upon the retiree remaining available for consultation with management and refraining from engaging in any activity in competition with Deluxe. Mr. Nachtsheim is eligible to receive payments of $30,000 for two years following his retirement from the Board under this predecessor plan.

The following table summarizes the compensation earned by each non-employee director in 2017.

NON-EMPLOYEE DIRECTOR COMPENSATION 2017

STOCK OWNERSHIP AND REPORTING

Director and Executive Officer Stock Ownership and Sale Guidelines

The Board has established stock ownership guidelines for directors and executive officers. These guidelines set ownership targets for each director and executive officer, with the expectation that the target be achieved within five years of the date the individual becomes subject to the target. The guidelines restrict a director’s or executive officer’s ability to sell shares received upon the exercise of options or vesting of other stock-based awards until they have achieved their ownership targets. The ownership target for non-employee directors is shares of the Company’s common stock having a value of at least five times the then-current amount of the annual Board Retainer. Executive officers have targets based on a multiple of their annual base salary. The ownership target for the CEO is five times his annual base salary, the target for each of the Company’s eight Senior Vice Presidents is two and one-half times their annual base salary, and the target for the Company’s Vice President who is a member of the Company’s Executive Leadership Team is one and one-half times her annual base salary. Members of the Executive Leadership Team are sometimes referred to as “executives” or “executive officers.” All of the Company’s directors and executive officers who have been in their positions for at least five years are in compliance with the applicable stock ownership guidelines.

Security Ownership of Certain Beneficial Owners and Management

The following table shows, as of March 8, 2018 (unless otherwise noted), the number of shares of common stock beneficially owned by: (1) each person or entity known by Deluxe to beneficially own more than five percent of Deluxe’s outstanding common stock; (2) each executive officer named in the Summary Compensation Table that appears in the “Executive Compensation” section of this Proxy Statement (each, a “Named Executive Officer” or “NEO;”) (3) each director and nominee for director; and (4) all of the current directors, director nominees and executive officers of Deluxe as a group. Except as otherwise indicated in the footnotes below, the shareholders listed in the table have sole voting and investment powers with respect to the common stock owned by them.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and related regulations, require Deluxe’s directors and executive officers, and any persons holding more than ten percent of Deluxe’s common stock (collectively, “Reporting Persons”), to report their initial ownership of Deluxe securities and any subsequent changes in that ownership to the SEC. Based on our review of the reports filed and written representations submitted by the Reporting Persons, we believe that all Reporting Persons timely filed all required Section 16(a) reports for the most recent fiscal year.

EXECUTIVE COMPENSATION

ITEM 2: ADVISORY VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS

We believe that it is appropriate to seek the approval of shareholders on the design and effectiveness of the compensation program for the Company’s Named Executive Officers, and therefore are providing shareholders with the opportunity to cast an advisory vote (non-binding), pursuant to Section 14A of the Exchange Act, as described below.

The Compensation Discussion and Analysis appearing below describes in greater detail the Company’s executive compensation program and decisions made by the Compensation Committee in 2017.

The Company believes the compensation program for the Named Executive Officers is instrumental in helping the Company achieve its strong financial performance and executing against its strategy, and requests the vote of shareholders on the following resolution:

As an advisory vote, the vote on Item 2 is not binding upon the Company. However, the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders and will consider the outcome of this vote when making future compensation decisions for Named Executive Officers.

The Board of Directors recommends that you vote FOR the compensation of the Company’s Named Executive Officers.

Compensation Discussion and Analysis

This CD&A discusses the compensation decisions for the NEOs listed in the Summary Compensation Table on page 43 of this Proxy Statement. The NEOs are:

*Mr. Merritt has served as VP, Treasurer for the last 5 years, and served as Interim CFO from August 2016 to March 30, 2017.

Introduction

The CD&A describes the principles of our executive compensation program, how we applied those principles in compensating our executive officers for 2017, and how we use our compensation programs to encourage effective executive performance. The following discussion should be read in conjunction with the various tables and accompanying narrative disclosure appearing in this Proxy Statement. Those tables and narrative disclosure provide more detailed information regarding the compensation paid and benefits awarded to our CEO and the other NEOs, as well as the plans in which those officers are eligible to participate.

Executive Summary

Our Business

At Deluxe we strive to be an indispensable partner to the small businesses and financial institutions we serve. Our goal is to provide our customers with products, services and advice needed to help them achieve success.

Small Businesses: From personalized printed products to customized promotional products to website creation, logo design, and search engine marketing that helps small businesses generate new customers, as well as our proprietary Deluxe eCheck electronic payment platform, we work to deliver the most innovative products and services available.

Financial Institutions: With Deluxe Financial Services, financial institutions find the programs and services needed to meet demands, drive revenue and create meaningful, long-lasting relationships with customers, from checks to treasury management solutions to data-driven marketing.

Consumers: Deluxe is one of America's best-known check brands. We continue to innovate with new check designs and new ways to make check ordering more convenient than ever.

2017 Target Pay Mix

As illustrated in the diagram below, the Company emphasizes long-term equity awards and annual performance-based cash incentives so that a substantial portion of each executive’s total compensation opportunity is linked directly to the Company’s stock price or otherwise driven by performance (65% of total direct compensation for our CEO and an average of 48% for the other NEOs).

*Percentages calculated using actual base salary, target annual incentive and the grant date value of annual long-term incentive awards.

Our Incentive Programs Tie to Our 2017 Financial Performance

The Company delivered strong financial and operating results in 2017. The financial metrics applicable to the executive compensation program were as follows:

Advisory Vote on Compensation Results in 2017

At last year’s annual meeting, our shareholders provided an advisory vote indicating their overwhelming support (over 95%) of the Company’s compensation program for our NEOs. The Compensation Committee considered the results of the advisory vote. Given that these results reflected strong support for our NEOs’ compensation, the Committee did not make any changes to executive compensation policies and decisions as a result of the 2017 advisory vote. Nevertheless, we continue to monitor current and emerging best practices with respect to the design of executive compensation programs, assess our compensation programs in light of our strategic initiatives for delivering shareholder value, regularly assess risk inherent in our compensation programs, and solicit views of analysts and institutional investors in the course of our regular interactions with them.

Our shareholders previously have supported the Board’s recommendation that such votes be held annually. As a result, Item 2 presented in this Proxy Statement again seeks our shareholders’ input on Deluxe’s executive compensation program. This CD&A, the compensation tables and the narrative disclosure that accompany the tables provide information that will assist our shareholders in deciding how to vote on Item 2.

How We Determine the Total Amount of Compensation

Role of the Compensation Committee, Management and Compensation Consultants in Determining Executive Compensation

For information on how the Compensation Committee works with management and independent compensation consultants in making executive pay decisions, see “Role of the Compensation Committee and Management in Determining Executive Compensation” on page 40 and “Compensation Consultant Services and Independence” on page 41.

2017 CEO Compensation Overview

Mr. Schram was hired in 2006, with the expectation that he would lead the Company through a transition from a check printing company to a diversified enterprise supporting small businesses and financial institutions. Over the last 12 years, the Company has consistently outperformed the S&P Mid-Cap 400 Index under Mr. Schram’s leadership and is well-positioned for sustainable, strong growth in the future.

Critical, but less visible externally, improvements in the Company’s scale and operational performance have occurred in the areas of talent development and management, process improvements, platforms for growth, product diversification, IT security and regulatory compliance.

Compensation Elements, Background and Key Features

Benchmarking Process

We consider market pay practices when setting executive compensation. The Compensation Committee uses benchmarking as one input to decision-making with respect to setting competitive executive pay levels.

CEO Benchmarking

Pay increases for Mr. Schram have historically been data-derived and targeted at the median of the Peer Group, despite the Company’s significant growth. Mr. Schram’s actual compensation payouts have varied somewhat from year to year depending on Company performance.

During Mr. Schram’s tenure, the Compensation Committee has also made his pay opportunities more long-term and performance-based:

Other NEO Benchmarking

Based on the recommendation of FW Cook, the Compensation Committee used two sources of data to benchmark compensation: (1) data from the publicly-available proxy statements of a peer group of companies and (2) market data drawn from published, broad-based, third-party surveys of general industry compensation practices. The Committee reviewed data from a peer group of companies with which the Committee believes, after consultation with FW Cook, Deluxe competes in the market for executive talent. This group of companies is referred to as the “Peer Group.”

Base salaries of our executive officers generally are set at or near the median of salaries paid to executive officers of companies of similar size and in similar positions using the data gathered from the compensation surveys and the Peer Group data referenced above, and internal pay equity. Deviations from the median can be the result of experience in the position, individual performance exceeding or falling short of expectations, or the individual’s scope of responsibilities. Base salaries are the basis for the other performance-driven programs discussed below, as well as our retirement program, in that target awards and contributions under these programs are typically set as a percentage of base salary. Base salaries in 2017 for each of the NEOs are shown in the Summary Compensation Table on page 43.

The Compensation Committee used Peer Group data to assist in determining the compensation of NEOs to the extent those NEO positions are comparable to the named executive positions at other companies within the Peer Group. As of December 31, 2017, the Peer Group was comprised of the following 16 companies:

The Compensation Committee selected this peer group, after consultation with FW Cook. In selecting companies for the Peer Group, the Committee considered various criteria, including, but not limited to, revenue size, market capitalization, industry relevance, business cycle and financial performance. Because there were no publicly held, stand-alone direct U.S. competitors

across all of our businesses at the time of the survey, we focused on similarly complex companies having similar customers, or who provide technology-based business solutions. The group was increased in size to 20 companies from 16 companies effective for 2018 by adding Endurance International, Fair Isaac, Quad/Graphics and Windstream.

Use of “Tally Sheets” and Wealth Accumulation Analysis

In 2017, the Compensation Committee’s independent compensation consultant reviewed “tally sheets” created by the Company, relating to compensation of the NEOs. The tally sheets quantified the total compensation package, the impact of stock price changes on the value of existing long-term incentives, the wealth created from prior equity grants and amounts payable upon hypothetical employment change events. The summaries allowed the Committee to assess the cumulative impact of its past compensation decisions. As a result of reviewing the tally sheets, the Committee did not deem any changes necessary to the structure of the total compensation package for the NEOs for 2017.

Other Factors Considered in Setting Pay Opportunities for NEOs other than the CEO

The Compensation Committee considers a number of factors in addition to market data in determining individual pay amounts (base salaries, payout of the individual portion of short-term incentive and yearly equity grants). Such factors include an individual’s general level of performance, demonstrated success in meeting or exceeding business objectives and creating shareholder value, job market conditions, importance to our business, succession planning considerations, salary budget guidelines and the individual’s pay in the context of others at the Company. Applying the requisite discretion based on such factors may result in pay opportunities that are different from the market-based data. The Committee has not adopted a policy with regard to the relationship of compensation among the CEO and the other NEOs or other employees and exercises its discretion in determining actual and relative compensation levels. Overall compensation opportunities reflect our executives’ positions, responsibilities and tenure and are generally similar for executives who have comparable levels of responsibility (although actual payouts may differ depending on relative performance).

The Compensation Committee seeks to design the executive compensation program in a manner that is competitive with and reflects the dynamics of the market in which the Company competes for talent. In constructing an overall compensation program, the Committee balances those components that are fixed (such as base salary and benefits) against components that are variable and require the achievement of certain levels of performance. The Committee also strives for a balance between compensation components that reward executives for the achievement of short-term goals with those that focus on the long-term growth of the Company. Each year the Committee reviews the form and value of long-term incentive grants to ensure alignment with the Company’s overall compensation philosophy and to reward attainment of Company goals.

Analysis of 2017 Compensation Decisions

2017 NEO Compensation

In February 2017, the Compensation Committee took the following actions with respect to 2017 compensation for the NEOs:

2017 Annual Cash Incentive Goals

The Annual Incentive Plan provides an incentive for achieving specified financial performance goals that the Company considers to be important contributors to shareholder value, which goals are established at or prior to the beginning of each year. NEOs and other officers and management employees selected by the Committee participate in the Annual Incentive Plan. For 2017, the target value was stated as a percent of base salary and, for the NEOs, was based on the market median of target annual incentive awards for comparable positions published in broad-based surveys and for the Peer Group. Deviations from the median can be the result of experience in the position, individual performance exceeding or falling short of expectations, or the individual’s scope of responsibilities. Bonuses earned may exceed the target amount if performance goals are exceeded, and are less than the target amount if the performance goals are not fully attained, with no bonus payouts if our financial performance is below minimum thresholds. The Committee annually reviews the proportionate share of revenue and operating income used to reward employee performance through our incentive plans.

In 2017, the Annual Incentive Plan consisted of three components. The first two components were based on the Company’s performance against specific revenue and operating income annual operating plan (“AOP”) metrics. The third component consisted of a group of factors (“Enterprise Factors”) developed to assess our progress in transforming our business, consistent with our strategic growth initiatives. Enterprise Factors included: executing key strategic enterprise opportunities; improving talent management effectiveness; and strengthening the business process in support of revenue growth and transformation. Plan participants with specific business segment responsibilities had a portion of their bonus opportunities tied to the segment’s financial results, as well as consolidated results.

Establishment of Corporate-Level Financial Goals

The Compensation Committee established the first two components which were based on the Company’s performance against specific revenue and operating income metrics. We set challenging goals that are attainable only as a result of exceptional performance in order to drive the achievement of our short- and long-term objectives. The target revenue and operating income for the Company were increased for the 2017 plan year to incent continued growth in 2017. In addition, the threshold payout levels for 2017 were set to be approximately equal to the adjusted revenue and adjusted operating income achieved by the Company for 2016. The following table illustrates the 2017 threshold and maximum performance levels compared to targets for the adjusted revenue and adjusted operating income factors, as well as the corresponding payout percentages (versus the target award opportunity) at each level of performance.

Section 162(m) of the Internal Revenue Code (“Section 162(m)”) limits the deductibility of compensation paid to certain executive officers. Prior to the passage of the Tax Cuts and Jobs Act in December 2017, compensation that qualified as performance-based compensation under Section 162(m) was exempt from this limit. In order to maximize the possibility that payments to executive officers under the Annual Incentive Plan qualified as performance-based compensation for purposes of Section 162(m), a bonus pool based on the amount of net income (if any) generated by Deluxe during 2017 was established by the Committee at the beginning of the year, along with the maximum payments that could be allocated to each executive subject to Section 162(m). Payments made to these executive officers were based on the performance criteria applicable to other participants under the Annual Incentive Plan, and all such payments were less than the maximum amounts allocated to them under the Section 162(m) bonus pool.

In addition, in order to promote stock ownership by the NEOs and other participants, and to further align their interests with those of our shareholders, participants may choose to receive up to 100 percent of their Annual Incentive Plan payout in restricted stock units, in which case the Company will provide a 50 percent match on the amounts elected to be received in restricted stock units. The restricted stock units vest on the second anniversary of the date of the grant. We believe the 50 percent match and two-year vesting period encourage employee stock ownership and employee retention. In 2017, Messrs. Schram and Mathews elected to receive a portion of their respective Annual Incentive Plan payouts in deferred restricted stock units.

Corporate and Business Unit Level Goals and Performance

Our consolidated performance in 2017 fell slightly short of the target performance levels for both adjusted operating income and adjusted revenue. As indicated above, for 2017, the Committee also established enterprise factors as a component of performance to be measured in assessing payments to be made under the Annual Incentive Plan. These factors consist of a group of quantitative and qualitative indicators intended to assess the Company’s progress on various strategic initiatives. After assessing the Company’s performance in the aggregate on the various metrics established for the Enterprise Factors, the Committee determined that participants should be awarded a payout of 100 percent of target. The actual 2017 performance on all three components is summarized in the following table.

Of the NEOs, Messrs. Filby (Financial Services “FS”) and McRoberts (Small Business Services “SBS”) had a portion of their Annual Incentive Plan opportunity tied to business segment performance as indicated above. For both segments, 30% of the annual incentive opportunity was based on segment revenue results, 20% was based on adjusted controllable operating income results, and 50% was based on the consolidated performance. The resulting blended payout percentages for 2017 are shown in the table above. The amounts earned by all NEOs under the Annual Incentive Plan for 2017 are included in the Summary Compensation Table appearing later in this Proxy Statement.

Long-Term Equity Incentive Compensation

We provide our NEOs with long-term incentives that are directly linked to the value provided to our shareholders. LTIP compensation for our executives, including NEOs, generally is set at or near the median of long-term compensation paid to executives of companies of similar size and in similar positions using the data gathered from compensation surveys. Deviations from the median can be the result of experience in the position, individual performance exceeding or falling short of expectations, or the individual’s scope of responsibilities. The LTIP consists of three components: (1) performance-based shares (45%); (2) restricted stock (30%); and (3) options (25%).

The performance share award calculation under the LTIP uses as metrics: (1) target amounts for Marketing Solutions and Other Services (“MOS”) Revenue, combined with a target Adjusted Operating Margin (referred to, collectively, as the “Performance Metrics”), and (2) Total Shareholder Return (“TSR”) compared to averages for the Peer Group. The Performance Metrics and relative TSR are weighted equally in determining the amount of any performance share awards under the LTIP, and are measured over a three-year performance period. MOS is a category of products and services considered, in the aggregate, to be higher growth than the Company’s other offerings and, therefore, we believe MOS revenue is an important indicator of the Company’s ability to achieve its long-term growth initiatives. To earn any performance share awards under the LTIP, Deluxe must make significant progress in each year of the three-year performance period.

For 2017, the performance share payout amount under the LTIP can vary from 0 percent to 200 percent of the target award value, depending upon the performance level achieved for the three-year period ending December 31, 2019. No performance share award will be paid unless minimum performance thresholds are met for the three-year period. Restricted stock awards have a three-year vesting period, with one-third vesting on each anniversary of the grant date. These awards are intended to further align the interests of the recipients with those of our shareholders, while promoting executive retention.

The stock options granted to our NEOs and other LTIP participants have a three-year vesting period, with one-third vesting on each anniversary of the grant date. The grant date for the options, restricted stock and performance shares generally coincide with the regularly scheduled February Compensation Committee meeting. The timing of the annual grants also aligns with the employee performance evaluation process and is outside of regularly scheduled stock trading blackout periods. In calculating the number of stock options required to deliver the targeted award value, the Committee uses the Black-Scholes valuation methodology based on a single-day pricing method, which is based on the closing price of the Company’s common stock on the day of the grant.

The Company believes our LTIP design properly balances and achieves several critical objectives and best practices, including:

All LTIP awards to the NEOs and other recipients are granted on the same date, except for awards made in conjunction with an individual’s promotion or hire into the Company, or as necessary to facilitate retention of key employees.

2017 Long-Term Incentive Awards

The Compensation Committee approved LTIP awards to the NEOs on February 22, 2017. The following table details the target grant value used by the Committee to determine the number of options, performance shares and restricted stock. Actual grant date values, computed in accordance with applicable accounting standards, are disclosed in the “Grants of Plan-Based Awards in 2017” table on page 45. The actual value of equity awards that may be realized by the NEOs will depend on their continued service and our future stock price performance.

FEBRUARY 2017 TARGET GRANT VALUE FOR EQUITY AWARDS

* Mr. Bush was hired effective March 31, 2017.

2015 – 2017 Performance Share Awards

In January 2018, the Compensation Committee approved performance share payouts under the LTIP in 2015 at 94.5% of the targeted award level for each participant, including the NEOs. Actual performance versus targets is illustrated in the following tables:

MOS REVENUE AND PROFITABILITY

TSR PERFORMANCE vs PEER GROUP

Equity Award Grant Practices

We have a policy on equity grants designed to formalize our equity grant practices and ensure that equity awards will be made on specified dates. The Compensation Committee reviews and approves annual equity-based awards, including those made to senior executives who are reporting officers under Section 16 of the Exchange Act, in the first calendar quarter of each year (near the time of their annual performance reviews). In accordance with our policy and shareholder-approved 2017 Annual Incentive Plan, the Committee annually approves a maximum aggregate amount or “bonus pool” for non-executive officers and other eligible employees, over which the CEO exercises his allocation discretion, in consultation with the Committee.

We generally schedule Board and Committee meetings at least a year in advance and, as noted above, make annual equity awards to our NEOs at near the same time every year. We do not time our equity awards to take advantage of the release of earnings or other major announcements by us or market conditions.

Retirement and Other Benefits

The NEOs are eligible to participate in the same qualified broad-based retirement plans that are available to most U.S. employees. The program consists of a 401(k) plan and an annual profit sharing plan (under which contributions, if any, are based on our financial performance). Deluxe’s retirement plans are regularly compared with retirement programs of companies that are in businesses similar to ours and/or are located in geographic areas from which we typically recruit talent to help ensure that the Company remains competitive in the market. The incremental value of benefits provided to the NEOs under this program is included in the All Other Compensation column of the Summary Compensation Table. We provide our NEOs with benefits available to other eligible U.S. salaried employees. These benefits include medical, dental, life and disability insurance, as well as the qualified retirement savings plan (the “401(k) Plan”) that includes a discretionary Company match of the employee’s pre-tax and after-tax contributions.

The NEOs and certain other executives are eligible to participate in Company tax-deferred compensation plans. The Deluxe Corporation Deferred Compensation Plan is intended to promote executive retention by providing a long-term savings opportunity on a tax-efficient basis. Under this plan, which complies with the requirements of Section 409A of the Internal Revenue Code (“Section 409A”), NEOs and other key employees may choose to defer up to 100 percent of their base salary (less applicable deductions) and up to 50 percent of any Annual Incentive Plan payout into multiple investment options. This plan also contains a provision that restores benefits lost under the defined contribution retirement plan and the annual profit sharing plan due to Internal Revenue Code limits. Contributions for the NEOs under this provision for 2017 are reflected in the All Other Compensation column of the Summary Compensation Table. The investment options are similar to the investment options available to employees in the Company’s broad-based retirement plans. The majority of payouts from this plan commence following termination of employment, based on elections made by the participants in accordance with, and subject to, any delays in payment that otherwise might be required by Section 409A.

Personal Choice Program

All of our permanent (not interim) executive officers, including the NEOs, with the exception of our CEO, Mr. Schram, participated in the executive officer Personal Choice Program. The Personal Choice Program provides a fixed cash payment to participating executive officers in lieu of perquisites, other than an annual executive physical. The quarterly cash payment of $7,500 for senior vice presidents and $5,000 for vice presidents who are executive officers is intended to cover personal expenses typically incurred by executives as a result of their positions (such as financial and tax planning, vehicle mileage, etc.). The quarterly payments under this program are not grossed-up for income taxes. As with the other compensation components, this program is assessed against market data regarding perquisite programs on an annual basis. The Company chose this program structure because it is more flexible for the executive officers, less administratively burdensome and less costly to the Company.

Consideration of Certain Tax Effects

Code Section 162(m), as in effect prior to the enactment of the Tax Cuts and Jobs Act in December 2017, generally disallowed a tax deduction to public companies for compensation of more than $1 million paid in any taxable year to each “covered employee,” consisting of the CEO and the three other highest paid executive officers employed at the end of the year (other than the CFO). Performance-based compensation was exempt from this deduction limitation if Deluxe met specified requirements set forth in the Code and applicable Treasury Regulations.

Recent tax reform legislation retained the $1 million deduction limit, but repealed the performance-based compensation exemption from the deduction limit and expanded the definition of “covered employees,” effective for taxable years beginning after December 31, 2017. “Covered employees” will now also include any person who served as CEO or CFO at any time during a taxable year, as well as any person who was ever identified as a covered employee in 2017 or any subsequent year. Consequently, compensation paid in 2018 and later years to our NEOs in excess of $1 million will not be deductible unless it qualifies for transitional relief applicable to certain binding, written performance-based compensation arrangements that were in place as of November 2, 2017.

The Committee generally intends to continue to comply with the requirements of Section 162(m) as it existed prior to enactment of the Tax Cuts and Jobs Act with respect to performance-based compensation in excess of $1 million payable under outstanding awards (including option awards) granted before November 2, 2017 under our Annual Incentive Plan as well as under our 2017 Long-Term Incentive Plan, in order for them to qualify the transitional relief. However, no assurance can be given that the compensation associated with these awards will qualify for the transitional relief, due to ambiguities and uncertainties as to the application and interpretation of newly revised Section 162(m) and the requirements for the transitional relief.

The Committee continues to believe that shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not restricted, even though some compensation awards were non-deductible in the past, and some are expected to be non-deductible in the future.

Compensation Design Process

Role of the Compensation Committee and Management in Determining Executive Compensation. The Compensation Committee reviews and makes decisions about executive policies and plans, including the amount of base salary, cash bonus and long-term incentive awarded to our NEOs. Our CEO and other executives may assist the Committee from time to time in its evaluation of compensation elements or program design or by providing mathematical calculations, historical information,

year-over-year comparisons and clarification regarding job duties and performance. The Compensation Committee also considers recommendations from its compensation consultant and competitive data and makes decisions, as it deems appropriate, on executive compensation based on its assessment of individual performance and achievement of goals both by the individual and the Company.

The CEO’s performance is reviewed by the Compensation Committee, with input from the other non-employee members of the Board. The CEO annually reviews the performance of each other executive officer who reports to him, including the NEOs. The conclusions reached and recommendations made based on these reviews, including with respect to salary adjustments and annual award amounts, are presented to the Compensation Committee for approval. Members of management play various additional roles in this process, as follows:

The Compensation Committee considers these recommendations and exercises discretion in modifying any recommended adjustments or awards to executives based on considerations it deems appropriate. Although members of our management team participate in the executive compensation process, the Compensation Committee also meets regularly in executive session without any members of the management team present. The Compensation Committee makes the final determination of the executive compensation package provided to each of our NEOs.

Compensation Consultant Services and Independence. The Compensation Committee has the authority to engage independent advisors to assist it in fulfilling its responsibilities. The Committee has retained FW Cook, a national executive compensation consulting firm, to provide advice with respect to compensation for our NEOs and other officers. FW Cook performs services solely on behalf of the Committee and does not provide any other services to us. Management of the Company had no role in selecting the Committee’s compensation consultant and had no separate relationship with FW Cook. The Committee has assessed the independence of FW Cook pursuant to SEC rules and concluded that no conflict of interest exists that would prevent FW Cook from independently representing the Committee.

FW Cook performed the following services for the Committee in 2017: reviewed market benchmarking data and prepared market data for the CEO position and all other NEO positions; reviewed tally sheets; assessed incentive risk and proxy disclosure; and reviewed regulatory and governance guidance and pay-for-performance updates. FW Cook assisted the Committee in determining appropriate levels of compensation for the CEO and other executive officers. The firm attended all Committee meetings upon invitation and participated in executive sessions without management present.

Management of Compensation-Related Risk

In establishing and reviewing the Company’s executive compensation program, the Compensation Committee considers whether the program encourages unnecessary or excessive risk-taking and has concluded that it does not. The Committee reviewed our material compensation programs and noted numerous ways in which risk is effectively managed or mitigated. This evaluation for 2017, which was conducted with the assistance of management and FW Cook, covered a wide range of practices and policies. All plans were deemed to have substantial risk mitigators which, in most material incentive plans, include: a balanced mix of fixed and variable pay and short- and long-term incentives; use of multiple performance measures; a portfolio of long-term equity incentives, including time-based and performance-based measures; caps, discretion in payment, oversight by non-plan participants and significant stock ownership guidelines; pre-approval requirements for executive stock transactions; and the existence of policies prohibiting Company stock hedging and pledging and requiring executive incentive compensation recoupment in specified circumstances.

The Compensation Committee has also reviewed the Company’s overall enterprise risks and how compensation programs for employees generally impacted individual behavior that could exacerbate these enterprise risks. Board and management processes are in place to oversee risk associated with compensation programs and practices including, but not limited to:

regular business reviews; alignment of compensation plan goals with our annual and long-term strategic goals and performance expectations; review of enterprise risk management by the Board as part of the annual strategy and budget reviews; and other appropriate internal controls. The Committee concluded that the Company’s compensation plans, programs and policies, considered as a whole, including applicable risk-mitigation features, are not reasonably likely to have a material adverse effect on the Company.

Stock Ownership Requirements

The Committee has established stock ownership guidelines for its executive officers and directors. The Committee annually reviews each executive officer’s and director’s progress toward attaining his or her ownership target. The 2017 target for the CEO is five times annual base salary and for all other current NEOs is two and one-half times annual base salary. The guidelines call for the targeted level of ownership to be achieved within five years of the date the individual becomes subject to the target. For purposes of calculating an executive officer’s stock ownership under these guidelines, stock options are not included. While restricted stock and restricted stock units convertible into shares are included, only 60 percent of their value is counted toward the ownership target prior to vesting, based on the rationale that approximately 40 percent of such shares or units will be withheld or surrendered by the executive upon vesting to cover taxes. In the past twelve months, executives have generally continued to increase their actual share ownership, and the Committee reviews each individual’s ownership on an annual basis. Each NEO subject to the ownership guidelines has achieved his ownership target, or is so newly subject to the guidelines that the Committee has no reason to believe that the target will not be reached by his/her deadline.

In addition to the stock ownership guidelines, executive officers and directors are subject to share retention and holding period requirements. Under this policy, individuals who have not achieved their ownership targets must retain 100 percent of their net shares (i.e., shares remaining after exercise costs and applicable taxes are covered) upon the exercise of stock options and the vesting of other equity awards, and are required to hold the shares until their individual ownership targets are met. The Company also maintains policies prohibiting directors and executive officers from pledging Company stock and from engaging in any transactions intended to hedge the economic risk of ownership in Deluxe stock. These policies prohibit executive officers and directors from directly or indirectly (i) purchasing any financial instrument or entering into any transaction that is designed to hedge or offset any decrease in the market value of the Company’s stock (including, but not limited to, prepaid forward contracts, short sales, equity swaps or collars) or (ii) pledging, hypothecating, or otherwise encumbering shares of Deluxe stock as collateral for indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account where such shares are used as collateral for a loan.

Policies on Claw Back of Incentive Compensation

For many years, Deluxe has included claw back provisions in its equity agreements, which can be triggered for a broad range of misconduct by the award recipient. The Company’s claw back policy also permits the recoupment of annual bonus payments and other incentive award payouts, including awards under the Annual Incentive Plan and the LTIP, granted to officers who are subject to Section 16 of the Exchange Act, where misconduct by the individual contributes to a restatement of the Company’s financial statements. While the Company had adopted and broadened its claw back provisions prior to the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the provisions will be amended consistent with any forthcoming regulations under the Dodd-Frank Act after they are published.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the foregoing Compensation Discussion and Analysis. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and be incorporated by reference into Deluxe Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017.

MEMBERS OF THE COMPENSATION COMMITTEE

Thomas J. Reddin, Chair
Ronald C. Baldwin
Cheryl E. Mayberry McKissack
Martyn R. Redgrave
Victoria A. Treyger

SUMMARY COMPENSATION TABLE

As described in the CD&A section of this Proxy Statement, recipients of awards under the AIP may elect to receive all or a portion of their incentive compensation in the form of RSUs. If an election is made to receive RSUs in lieu of cash, the amount of the cash foregone is increased at a match rate established by the Compensation Committee in determining the number of units awarded. The following table includes the RSUs for the NEOs:

The portion of each executive’s AIP compensation paid in cash is included in the “Non-Equity Incentive Plan Compensation” column. The estimated possible threshold, target, and maximum values for the 2017 AIP, including the 50 percent match based on the individual elections made by each NEO prior to the start of the plan period, are listed in the Grants of Plan-Based Awards in 2017 Table. For more information regarding the 2017 grants of non-qualified stock options, restricted stock, and performance share units, refer to the Grants of Plan-Based Awards in 2017 Table.

2017 ALL OTHER COMPENSATION TABLE

GRANTS OF PLAN-BASED AWARDS IN 2017 TABLE