TABLE OF CONTENTS

Each of Proposals 1, 2, 3, 4, and 5 will be approved if the proposal receives the affirmative FOR vote of a majority of the votes cast on the proposal. For purposes of the election of directors, a majority of votes cast means that the number of votes cast “for” a director’s election exceeds the number of votes cast “against” that director’s election.

Abstentions are considered votes cast on Proposals 2, 3, 4, and 5, and thus have the same effect as AGAINST votes. Abstentions are not considered votes cast on Proposal 1, the election of directors. Broker non-votes are not considered votes cast with respect to Proposals 1 and 4, and will not affect the outcome on those matters. With

respect to the election of directors, in the event a director does not receive a majority of the votes cast that director will be required to submit his or her resignation to the full Board, with a presumption that the resignation will be accepted unless the Board determines that there is a compelling reason for the director to remain on the Board.

Although the advisory vote to approve executive compensation is non-binding, as provided by law, our Board and the Compensation Committee will review the results of the vote and will consider the results in making future decisions on executive compensation.

Votes cast in person or by proxy will be tabulated by the inspector appointed for the Annual Meeting. If you provide specific instructions on your proxy card, your shares will be voted as you instruct. If you do not give instructions, your shares will be voted as recommended by the Board as follows:

We are not aware of any business to be acted upon at the Annual Meeting other than the five proposals described in this proxy statement. If you grant a proxy, the individuals named as proxy holders, Bret C. Griess and Joseph T. Ruble, and each or either of them, will have the discretion

to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason a nominee is not available as a candidate for director, the proxy holders will vote your proxy for such other candidate or candidates as the Board may nominate.

We will pay the entire cost of preparing, assembling, printing, mailing, and distributing these proxy materials and soliciting votes. If you choose to access the proxy materials or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. Our directors, executives, and regular employees, without additional remuneration, and

their appointed agents, may solicit proxies or votes in person, by telephone, or by electronic communication. We will request banks, brokers, and other fiduciaries to forward proxy materials to the owners of stock held in their names and will reimburse the reasonable out-of-pocket expenses incurred in connection with that distribution.

We intend to announce voting results on a Current Report on Form 8-K filed with the SEC no later than four business days after the Annual Meeting.

Our current directors include: David G. Barnes, Ronald H. Cooper, Marwan H. Fawaz, Bret C. Griess, John L. M.

Hughes, Janice I. Obuchowski, Donald B. Reed, Frank V. Sica, Donald V. Smith, and James A. Unruh.

The Board has determined that every Board member except Mr. Griess, our President and Chief Executive Officer (“CEO”), is an “independent director” as defined in the applicable rule of The NASDAQ Stock Market, Inc., or NASDAQ. We believe that having a Board made up

predominantly of independent, experienced directors with independent oversight by a non-executive Chairman (as further described below) benefits our Company and our stockholders.

In 2014, the Board approved a majority voting standard in the election of directors. Thus, in any “uncontested election” of directors (i.e., an election where the number of nominees does not exceed the number of directors to be elected), each nominee to the Board will be elected by the vote of a “majority of the votes cast,” meaning that the number of votes cast “for” a director’s election must exceed the number of votes cast “against” that director’s election. Abstentions and broker non-votes will not count as votes

cast for purposes of this provision. If any incumbent director does not receive a majority of votes cast in favor of his or her re-election to the Board, that director will be required to submit his or her resignation to the full Board, with a presumption that the resignation will be accepted unless the Board determines that there is a compelling reason for the director to remain on the Board. In the case of a contested election, directors will continue to be elected by a plurality vote.

We invite stockholders to send written communications to the Board or to individual Board members. Please send your letter in care of the Secretary of the Company at the address shown on the first page of this proxy statement. If a letter relates to publicly available information about the Company or our stock, the Secretary will respond to the writer directly. If a letter is primarily commercial in nature or relates to an improper or irrelevant topic, the Secretary

will make a record of it, but will not transmit the communication to the Board. Any letter that relates to accounting, internal accounting controls, or auditing matters will be forwarded to the Chairman of the Audit Committee. All other letters will be forwarded to the entire Board or to the individual Board member(s) to whom they are addressed.

Historically, very few stockholders have attended our annual meetings; almost all stockholders who vote do so by proxy. Accordingly, directors are not required to attend our annual meetings. We expect employee directors to attend if their schedules permit, and non-employee directors are welcome to attend if they wish. All of our

directors attended our 2015 Annual Meeting. The Board scheduled our 2016 Annual Meeting to coincide with a regular quarterly meeting of the Board so that all members present at the quarterly meeting of the Board can attend the Annual Meeting as well.

During 2015, the Board held six meetings. All directors attended at least 75% of the total number of meetings of the Board and of the committees on which they served. In

addition, during 2015 the Board held four executive sessions during which only independent directors were present.

Audit Committee

The Audit Committee is presently composed of Mr. Barnes (Chairman), Ms. Obuchowski, and Mr. Reed. The Audit Committee’s primary purposes are to oversee our accounting and financial reporting processes, the audits of our financial statements, and our risk and compliance management programs.

As required by the Audit Committee Charter (located at http://ir.csgi.com/documents.cfm), all members of the Audit Committee satisfy all NASDAQ requirements applicable to audit committee members and are “independent” as defined by the rules promulgated by the SEC under the Exchange Act, and by NASDAQ. The Board has determined that Messrs. Barnes and Reed are “audit committee financial experts” as defined by applicable rules. The Audit Committee held four meetings during 2015.

Risk and Compliance Oversight. To administer our risk and compliance management program, we established a Business Risk Committee comprised of our named executive officers (“NEOs”) (see the Compensation Discussion and Analysis beginning on page 21), chaired by our Chief Financial Officer (“CFO”), and coordinated by our internal audit department. The internal audit department reports directly to the Audit Committee, and prepares a quarterly report for the Audit Committee summarizing material existing and emerging business risks.

We also maintain a formal risk assessment and risk mitigation program that is administered by our CFO. NEOs, in conjunction with members of our internal audit department, review this program periodically throughout the year. This program is intended to: (1) identify those risks that are most likely to affect our business; (2) assign an executive to be responsible for monitoring and mitigating those risks; and (3) provide a formal mechanism

for the assigned executive to report back periodically on the adequacy and effect of mitigation efforts. The Audit Committee and the Board review the results of this program at each regularly scheduled meeting. In addition, our Chief Compliance Officer has a reporting relationship to the Audit Committee and provides a quarterly report to the Committee on compliance risks, issues, and activities.

Compensation Committee

The Compensation Committee presently is composed of Messrs. Cooper, Hughes, Sica (Chairman), Smith, and Unruh. The Compensation Committee’s primary purposes are to review and recommend senior management compensation and benefit policies, evaluate the performance of our executive officers, and review and recommend the compensation of our executive officers. In addition, the Compensation Committee has independent authority to administer and grant equity awards under our equity plans and our Performance Bonus Program for executive officers. The Compensation Committee also is responsible for ongoing oversight and evaluation of our compensation policies and practices for employees generally as they relate to risk management.

As required by the Compensation Committee Charter (located at http://ir.csgi.com/documents.cfm), all members of the Compensation Committee are “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986 and are “independent” as defined by the rules promulgated by the SEC under the Exchange Act, and by NASDAQ. The Compensation Committee meets at least quarterly, and held five meetings during 2015.

Determining Executive Officer Compensation and Use of Independent Compensation Consultant. To assist the Compensation Committee with its responsibilities, the Committee retains an independent compensation consultant, consults with our CEO and our head of Human Resources, and draws upon the extensive business experience of its members. The Compensation Committee directs the independent compensation consulting firm to prepare a comprehensive formal assessment of the competitiveness of our executive officer compensation program, including a comparison of the principal components of our program (base salaries, performance bonuses, and equity awards) with those of a peer group of other public companies. The Compensation Committee considers this assessment and other data provided by the consultant in arriving at its decisions or recommendations to the Board with respect to base salaries, performance bonuses, and long-term incentives for our executive officers. For additional information about our executive compensation program, see the Compensation Discussion and Analysis beginning on page 21.

The Compensation Committee periodically evaluates the qualifications of its independent compensation consultant. The Compensation Committee utilizes Pearl Meyer & Partners (“PM&P”) as its independent compensation consultant. During 2015, PM&P provided only executive compensation guidance to the Compensation Committee and did not provide any other services to the Company. During 2015, the Compensation Committee requested information from PM&P, our executives, and our Board members in order to assess the independence of PM&P as the Committee’s compensation consultant and to determine whether PM&P’s work raised any conflict of interest. Based on the information provided, the Compensation Committee determined that PM&P was independent and that the work of PM&P did not raise a conflict of interest.

Determining Non-Employee Director Equity Awards. In making equity awards to our non-employee directors, the Compensation Committee considers relevant information provided by the independent compensation consultant and the recommendations of our Nominating and Corporate Governance Committee and the Board.

Risks Related to Compensation Policies and Practices for All Employees. The Compensation Committee does not believe that risks arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company. A number of the factors considered by the Compensation Committee when it develops executive compensation recommendations have the effect of mitigating risk. Additionally, executive officers and certain members of senior management regularly review our employee compensation policies and practices, including the elements of our compensation programs, to determine whether any element or program design encourages excessive risk taking. The Board and senior management consider the following factors that reduce the likelihood of excessive risk taking:

Compensation Committee Interlocks and Insider Participation. No member of the Compensation Committee has ever been an officer or employee of the Company. In 2015, no member of the Compensation Committee had any relationship or transaction with the Company that would require disclosure as a “related person transaction” under SEC rules. During 2015, none of our executive officers served on the board of directors or compensation committee of any other entity whose executive officer(s) served as a member of our Board or Compensation Committee.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee presently is composed of Messrs. Cooper (Chairman), Fawaz, Hughes, Smith, and Ms. Obuchowski. The Nominating and Corporate Governance Committee’s primary purposes are to: (1) identify individuals qualified to become Board members; (2) recommend to the Board nominees for election as directors and directors for appointment to Board committees; (3) evaluate the Board’s performance; (4) review and recommend the compensation of our directors; and (5) develop and recommend for Board approval our Corporate Governance Guidelines and Code of Ethics and Business Conduct.

The Nominating and Corporate Governance Committee Charter (located at http://ir.csgi.com/documents.cfm) requires that a majority of the members be independent directors. The Nominating and Corporate Governance Committee held four meetings during 2015.

What We Look for in Director Nominees. In recommending nominees for election as directors, the Nominating and Corporate Governance Committee reviews the present composition of the Board to determine the qualities, skills, and areas of expertise needed to enable the Board and its committees to properly discharge their responsibilities. When there is a need, the Nominating and Corporate Governance Committee utilizes the services of executive search firms with well-established board practices to assist in the identification and recruitment of qualified director nominees. This process supports our objective of recruiting highly qualified candidates that meet our specific criteria for skills, professional and governance experience, diversity, and the personal attributes we're seeking as discussed in more detail below. The Nominating and Corporate Governance Committee considers it necessary for the Board to have at least one independent member who qualifies as an “audit committee financial expert” and takes that requirement into account when recommending nominees. When identifying and assessing a candidate’s qualifications, the Nominating and Corporate Governance Committee considers, among other things: (1) the number and type of other boards on which the candidate serves; (2) the candidate’s other business and professional commitments and potential conflicts of interest; (3) the candidate’s ability and willingness to devote the required amount of time to service as a Board member and as a member of one or more Board committees; and (4) the candidate’s age, background, reputation, independence, experience, skills, and judgment.

Our Nominating and Corporate Governance Committee considers the diversity of the Board’s membership when nominating directors. We interpret the term “diversity” in its broadest sense and believe it encompasses many attributes, including age, background, experience, skills, substantive expertise, gender, ethnicity, geography, and education. Our Board is particularly interested in maintaining a collective group of individuals with experience in operations, finance, accounting, marketing, human resources, sales, and international business, particularly in the technology and communication service provider and related industries. We also consider whether nominees are active or retired executive officers of public or private companies and whether they have ever served on the board of a public company.

Our Board members also should display the personal attributes necessary to be effective directors: integrity, sound judgment, independence, ability to operate collaboratively, and a fiduciary commitment to the Company and our stockholders. We believe the current members of our Board have a diverse set of business and

personal experiences, backgrounds and expertise, and that they all share the personal attributes described above.

Stockholder Recommended Director Candidates. The Nominating and Corporate Governance Committee will consider qualified nominees recommended by our stockholders for election as directors. A stockholder who wishes to recommend a nominee for the Board should submit the recommendation in writing to the Secretary of the Company indicating the proposed nominee’s qualifications and other relevant biographical information and providing written confirmation that the proposed nominee consents to serve as a director if nominated and

elected. See Stockholder Proposals on page 58 of this proxy statement for additional requirements and information. Our Secretary will forward qualifying recommendations from stockholders to the Chairman of the Nominating and Corporate Governance Committee for further review and consideration. Our bylaws provide that stockholder nominations for election to the Board are subject to certain advance notice and informational requirements. Stockholders may obtain a copy of the relevant bylaw provisions from our Secretary at CSG Systems International, Inc., 9555 Maroon Circle, Englewood, Colorado 80112.

Since 2005, an independent director has served as non-executive Chairman of the Board. Currently, Mr. Reed serves in that position. We believe it is beneficial to separate the roles of Board Chairman and CEO for two reasons: the responsibilities of each position can be clearly delineated, and each individual can devote more time to a single position.

Our Corporate Governance Guidelines permit the Board to modify this leadership structure. In the future, if the Board believes it would be in the best interest of the Company and our stockholders, the Board may decide that one person should serve as both CEO and Board Chairman.

Our Board has adopted a Code of Ethics and Business Conduct applicable to all directors, officers, and employees of the Company and our subsidiaries. Our Code of Ethics and Business Conduct and Corporate Governance Guidelines are available on our website under Investor Relations, Corporate Governance, located at http://ir.csgi.com/documents.cfm. Information on our website is not incorporated by reference in this proxy

statement. We will disclose on our website any amendments to our Code of Ethics and Business Conduct, or any waiver of a provision of our Code of Ethics and Business Conduct that is required to be disclosed under applicable rules of the SEC. Historically, we have had minimal substantive changes to our Code of Ethics and Business Conduct, and there have not been any waivers that are required to be disclosed.

There are no family relationships between any of our directors or executive officers. There are no arrangements between any director, nominee, or executive officer of the Company and any other person pursuant to which such director, nominee, or executive officer was selected for such position. None of our directors have been involved in any legal proceedings during the past 10 years required to be disclosed in this proxy statement.

During 2015, each non-employee director of the Company received an annual fee of $75,000, payable in quarterly installments. Additionally, each non-employee director receives an annual equity grant of restricted stock as determined by the Compensation Committee, which vests on the first anniversary of the grant. The annual Chairman retainers in 2015, also paid in quarterly installments, were as follows:

A director who is an officer or employee of the Company does not receive additional compensation for serving as a director or committee member. Mr. Griess is the only current officer or employee of the Company who serves as a director, and he does not currently serve on any Board committee.

The Board has established share ownership guidelines for our directors and executive officers. Below is a summary of the current required minimum share ownership levels:

Each executive officer is expected to attain the minimum ownership level within four years of his or her date of appointment. Directors do not have a specific timeframe to attain their share ownership requirements, but they may not sell any granted/retained shares of stock in the corporation until the requirements are met.

Ownership levels are determined based on the common stock owned by each individual, excluding any unvested shares of restricted stock. As of February 29, 2016, each of our executive officers and directors were in compliance with the applicable ownership guidelines.

As part of our insider trading policy, all employees, including our executive officers, and non-employee directors (and their designees) are prohibited from engaging in short sales of our securities, establishing

margin accounts, or otherwise pledging our securities and engaging in transactions that are designed to hedge or offset any decrease in the market value of our stock.

Section 16(a) of the Securities Exchange Act of 1934 requires our officers (as defined in the applicable regulations) and directors, and persons who beneficially own more than 10% of a class of the Company’s equity securities registered under such Act, to file certain reports of ownership and changes of ownership of the Company’s equity securities with the SEC. Officers, directors, and stockholders who own more than 10% of such shares are

required by SEC regulation to furnish to the Company copies of all Section 16(a) forms which they file.

Based solely on our review of the copies of such forms submitted to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our officers and directors were complied with for the year ended December 31, 2015.

At the end of 2015, Mr. Kalan announced his plans to retire from his role as CEO and from the Board following 19 years of service with us. Under Mr. Kalan’s leadership, we have become a leading business support solutions provider in the North American cable and satellite markets, expanded our presence internationally, invested in next generation solutions aimed at the changing video landscape, and groomed the next generation of our leaders to build upon this legacy.

Effective January 1, 2016, CSG veteran Bret Griess was named to succeed Mr. Kalan as CEO and was appointed to the Board. Mr. Griess’ CEO appointment is the result of the Board’s succession planning process and the confidence in our management team to continue to drive long-term shareholder value. Mr. Griess has established a clear strategy to prioritize and focus our go-to-market approach, expand our footprint within our clients’ businesses and within the video, carriers, and over-the-top industries, and pursue targeted opportunities for profitable growth. To meet these objectives, Mr. Griess

and the Board expanded our leadership team, redefined roles, and organized around our strategy.

Effective March 1, 2016, Brian Shepherd was named as President of our Global Broadband, Cable and Satellite Business. Mr. Shepherd is a leader and industry veteran who will help leverage our domain expertise and our proven and established teams to expand our existing customer relationships and drive new business both in the U.S. as well as in international markets. Additionally, we promoted Ken Kennedy, Chief Technology Officer and Senior Vice President of Product Management, Development and Operations, to our Executive Vice President of Product Development. He is tasked with supporting and helping lead our clients in their evolution to digital services with the continual innovation of our solutions. In addition, we appointed Marwan H. Fawaz to our Board. He has more than 25 years of experience as a leader within the North American cable industry and senior management experience with Google/Motorola Mobility and Charter Communications.

Company Overview and Business Strategy

We are one of the world's largest and most established providers of business support solutions. We primarily serve the communications industry, whose businesses have evolved from a single product offering to highly complex, highly competitive, multi-product service offerings. Our solutions help service providers streamline and scale operations, introduce and adapt products and services to meet changing consumer demands, and address the challenges and opportunities brought about by changes

to their businesses. Our approach has centered on using the best technology for the various functions required to provide world-class solutions.

Our goal is to be the most trusted provider of world-class software and services to service providers around the world who depend upon the timely and accurate processing of complex, high-volume transactions to operate their business and deliver a superior customer experience. We believe that by successfully executing on this goal we can grow our revenues and earnings, and

therefore, create long-term value, not only for our clients and our employees, but for our stockholders as well. Our strategic focus to accomplish this goal is as follows:

Our Overall 2015 Performance

We had a solid performance in 2015, delivering positive financial and operational results, executing on many of our key strategic initiatives, and continuing to expand and extend our relationships with many of our clients.

Key highlights of our 2015 performance include the following:

Enhanced Capital Allocation Strategy

Our strong operating model and financial position allow us to return capital to stockholders, and also allow us to continue to invest in the long-term growth of our business.

In 2015, we announced an increase in our capital allocation to stockholders and an improvement in our capital structure, including the following key items:

Under this enhanced capital allocation structure, we paid a total of $22 million in dividends and repurchased $57 million of our outstanding shares.

In early 2016, we reinforced our commitment to returning cash to shareholders with an additional 6% increase in the dividend and the announcement of our intent to repurchase a minimum of up to $50 million of shares in 2016.

In summary, we continue to execute in a challenging business environment by delivering on our business objectives and enhancing our capital allocation strategy.

2015 Executive Compensation Highlights

In June 2015, Mr. Griess was named as President and COO by the Board. At that time, the Board approved a salary increase and revised performance-based incentive for Mr. Griess to be commensurate with competitive market practice for the duties and responsibilities of the position. Mr. Griess later became our President and CEO on January 1, 2016.

We made some important changes to our executive compensation program in 2015, consistent with evolving governance practices for executive compensation. These changes included the following:

Additionally, after considering compensation within our peer group and consulting with PM&P, the Compensation Committee (“Committee”) independently assessed the value and competitiveness of each NEO’s compensation including various pay components. Based upon their assessment, the Board and the Committee made the following decisions regarding the framework for the 2015 executive compensation program:

Base salary. The Board increased our CEO’s base salary by 10% and the base salaries of each of our other three NEOs by 3% to align their salaries with the corresponding median levels within our peer group.

Annual incentive program. The Committee approved an increase in Mr. Griess’ target bonus percentage from 100% to 150% of base salary as part of his promotion to President and COO in June 2015. The target and maximum bonus percentages for Mr. Kalan, Mr. Wiese, and Mr. Ruble did not change from 2014. For more information, see 2015 Compensation on page 27.

Long-term incentive (“LTI”) program. For the February 2015 annual grant, the Committee maintained the LTI award program with 60% of each NEO’s award granted in the form of performance-based restricted stock. Performance-based restricted stock vests ratably over three years if we achieve predetermined financial targets, or in full if a predetermined stock price target is achieved at the end of the third year. The other 40% of each NEO’s award is in the form of time-based restricted stock that vests ratably over four years.

In addition, in November 2015, the Committee granted special one-time awards to Mr. Wiese and Mr. Ruble in the form of restricted stock that vests ratably over two years. These awards were retention awards to ensure leadership continuity following Mr. Kalan’s retirement. The Committee granted Mr. Griess a special one-time award in recognition of his forthcoming promotion to CEO that vests ratably over four years.

For more information on our executive compensation program, see 2015 Compensation beginning on page 27.

Pay-for-Performance Compensation Program

At least 55% of each NEO’s total target compensation for 2015 was based on our achievement of key financial

measures under our annual and long-term incentive plans.

We delivered upon many of our key initiatives during 2015 and achieved a number of our financial targets. As a result, our NEOs achieved payouts and performance-based stock vesting under our executive compensation program as follows:

For more information see 2015 Compensation beginning on page 27.

2015 Say-on-Pay Results

More than 94% of the votes cast (For/For + Against) on our 2015 say-on-pay proposal were in favor of our executive compensation program and policies. When making compensation decisions for our NEOs, the Committee considers the voting results of our annual say-on-pay proposal along with other factors, such as our pay-for-performance philosophy and a competitive market analysis of peer companies to determine compensation practices. The Committee considered the results of the 2015 advisory vote, and did not make changes to the program based on the voting results.

Key Compensation Governance Factors

We believe that the following governance and compensation practices reinforce our business strategy, culture, and values.

We adopted a clawback policy in 2015 that covers our executive officers. The policy authorizes us to reduce or cancel, or require the recovery of, all or a portion of an executive officer’s annual bonus or long-term incentive compensation award for intentional misconduct that leads to a material restatement of the financial statements of the Company. For additional information, see Employment Agreements on page 40.

We eliminated potential income tax gross-ups. During 2015, we entered into amended and restated employment agreements with our executives. A key feature of the new agreements is the elimination of potential income tax gross-ups for change of control benefits. For additional information regarding the agreements, see Employment Agreements on page 40.

We design performance-based compensation to reflect our business strategy and enhance stockholder value. We currently use revenue, Adjusted Operating Income, Adjusted Net Income, Adjusted Earnings Per Share (“EPS”), and Stock Price measures, as the financial performance metrics for our performance pay programs. Each measure represents a key financial metric that reflects on the execution of our long-term business strategy to enhance stockholder value. For additional information about our business strategy, see Company Overview and Business Strategy on page 21.

We emphasize the long term. A significant portion of our NEOs’ total compensation is in the form of long-term equity awards, 60% of which is performance-based restricted stock that fully vests if we achieve specific financial or stock price measures.

We align the financial interests of our executives with the interests of our stockholders through equity awards and share ownership guidelines. Each NEO must own at least the threshold level of our shares that is consistent with our share ownership guidelines. For additional information, see Share Ownership Guidelines on page 20.

We have a policy prohibiting hedging and pledging transactions involving our stock. Our NEOs and other insiders are prohibited from selling our stock short, pledging our stock as collateral, or entering into transactions in puts or calls that raise similar concerns regarding speculation in our stock. For additional information, see Hedging and Pledging Policy on page 20.

We provide only limited perquisites and other benefits. Our NEOs are generally eligible for few perquisites or

benefits that are not available to our employees. For additional information, see the 2015 Summary Compensation Table on page 33.

We rely on the advice of an independent compensation consultant. The Committee has engaged an independent compensation consultant that does not provide any services to management and that had no relationship with management prior to the engagement.

No dividends or dividend equivalents paid on unvested stock awards. We do not pay dividends or dividend equivalents on unvested stock awards. Dividends accrue on time-based and performance-based restricted stock awards and are paid only on shares that vest.

Determining Executive Compensation

Each year during its February meeting, the Committee certifies the following for the previous fiscal year: the level of performance attained, the amount payable under the Annual Performance Bonus plan, and the vesting levels for our performance-based restricted stock awards. The Committee also evaluates and recommends to the Board the base salary for each of our NEOs as well as the performance metrics and target levels for the Annual Performance Bonus plan and performance-based restricted stock awards. The target levels typically are established based upon our initial internal financial targets and adjusted for a pre-established growth factor for performance-based restricted stock awards that extend over a three-year period.

When making compensation decisions and recommendations, the Committee considers the following key factors:

As required by the Committee’s charter, the CEO may not be present when either the Committee or the Board discuss or vote on CEO compensation.

The Committee undertakes considerable analysis when determining metrics to be used in both its annual performance bonus program and performance-based equity.

The Committee’s goal is to select a combination of metrics that, if achieved in the long-term, will most likely result in positive shareholder return.  One of the more challenging aspects of this endeavor is to set goals that effectively incent management to achieve long-term results while maintaining the consistent operational excellence our customers have come to expect.  

All of our current performance-based equity awards to our executives employ a three-year time horizon, with a third of the shares in each award eligible for vesting annually upon achievement of the specified performance metrics.  Up to 100% of the eligible shares may vest each year if the minimum metric threshold is achieved. If the executives earn less than 100% vesting based on the level of achievement against the performance targets for a particular year within the three-year incentive-performance period, the executives have the opportunity to earn the remaining vesting percentage if certain performance criteria are met in the second or third year.

We are of the view that this performance-based design strikes an appropriate balance between ensuring the business is operating at its optimal level in the short-term, while incenting management to invest in the business for long-term results.

Role of the Independent Compensation Consultant and Management

The Committee has sole authority and discretion to retain and terminate compensation consultants, independent legal counsel, and other advisers to help the Committee perform its responsibilities. It has the sole authority to approve the

fees, scope, and other terms of engagement with its compensation consultant and other advisers, with full funding provided by the Company. The Committee is responsible for determining the independence of its compensation consultant and other advisers. Management is available at the Committee’s request to assist the consultant by providing historical pay data and perspective on our competitive environment for recruiting managerial talent.

For 2015, the Committee again engaged PM&P to advise it on executive compensation matters. The Committee instructed PM&P to take a broad view of the competitive compensation landscape to assist the Committee in structuring a compensation program for our NEOs. We believe this broader perspective has enabled us to attract and retain a highly talented executive team. PM&P reviewed compensation data available from peer company proxy statements and published survey sources using position matches and data analyses to identify the most appropriate comparisons among executives of similar titles and responsibilities. For additional information regarding the peer group component companies and pay of our NEOs compared to the peer group, see Role of Benchmarking in Determining Compensation and Peer Group on page 26.

Compensation Mix

The compensation program for each of our NEOs includes the following components, which together comprise Total Direct Compensation: base salary, an annual performance bonus, and two types of long-term incentive awards. The objective of each component and the form in which each is delivered if earned is outlined as follows:

Role of Benchmarking in Determining Compensation

To assist the Committee in establishing 2015 compensation for the NEOs, PM&P provided a competitive assessment using peer group compensation information and industry survey data for the primary elements of our NEO compensation packages. PM&P developed benchmarking market data by blending the peer group and industry survey data equally. The peer group composition is described in the next section. The industry survey data was comprised of technology companies, represented in the Culpepper and Radford compensation surveys, with revenues ranging from $500 million to $1 billion.

The Committee recognizes that peer group comparisons and industry survey data may not be perfectly aligned because the executive titles and responsibilities at peer

group companies may not be comparable to those of our NEOs with similar or equivalent titles.

Our compensation philosophy is intended to ensure leadership continuity as part of our succession planning and to leverage variable incentive pay tied to Company performance. The Committee generally considers Total Direct Compensation (including target bonus) for a NEO to be competitive if it is between the 65^th and 75^th percentile of the blended peer group and industry survey data.

To achieve the desired pay positioning, base salaries are generally targeted at the 50^th percentile and target annual performance bonus (assuming targeted performance levels are achieved) and total long-term incentive value are generally targeted between the 50^th and 75^th percentiles.

Peer Group Used for Benchmarking

The peer group used to determine 2015 compensation, as listed in the table below, was comprised of companies with revenues ranging in size from $249 million to $2.6 billion at year-end 2014.

        2015 Company Peer Group

The peer group used for compensation benchmarking is reviewed annually to ensure that its composition and characteristics remain consistent with our objectives. In advance of the 2016 benchmarking review, PM&P noted that four peer companies had been acquired or would be acquired. As such, a revision to the peer group for 2016 to increase the number of peer companies was initiated. PM&P reviewed companies with a comparable range of annual revenue in the data processing, outsourced services, and application software industries. In addition to

providing written materials to the Committee, PM&P discussed with the Committee its experiences and observations regarding the compensation practices and philosophies of other Companies.

Based on the considerations detailed above, the Compensation Committee approved a new 21-company peer group at their November 2015 meeting for 2016 benchmarking purposes. Companies included are in the software and data processing industries and were selected for their comparable size, product, service offerings, customers, and markets. The peer group that will be used to determine 2016 compensation is listed in the following table:

2016 Company Peer Group

2015 Annual Base Salaries

For 2015, the Committee recommended to the Board, and the Board approved, the following base salaries:

The Board approved these increases to make the salaries for our NEOs more consistent with the corresponding median levels within our peer group to be commensurate

with competitive market practice for the duties and responsibilities of these positions.

2015 Annual Performance Bonuses

Annual performance bonuses are awarded under the terms of our Performance Bonus Plan.

The annual performance bonus for each NEO is determined based on the following formula:

Base Salary. The starting point for each NEO’s bonus calculation is the NEO’s base salary.

NEO Target Bonus Percentage. The Committee provides competitive target bonus opportunities for the NEOs and sets the annual performance goals. After considering the competitive compensation information provided by PM&P, the Committee decided to keep the CEO and other NEO target bonus percentages the same from 2014 to 2015. At the time of Mr. Griess’ promotion to COO and President in June 2015, his target bonus percentage was increased from 100% to 150%.

The 2015 and 2014 target bonus percentages of base salary for each NEO are as follows:

Company Performance Percentage. The Company performance percentage, which is based on our performance against two pre-established financial performance measures, is the same for all of the NEOs. If we achieve the target levels of performance for both measures, the Company performance percentage achieved will be 100%. If CSG misses the minimum threshold performance for either measure, the Company performance percentage will be zero (0%). The following table shows CSG’s performance with respect to the 2015 targets for revenue and Adjusted Operating Income:

Revenues were slightly less than the target, yet the Company overachieved against the Adjusted Operating Income target due to strong operating margins; therefore, the Company performance percentage achieved was calculated at 122% and was certified by the Committee.

NEO Individual Performance Percentage. The final component of the annual performance bonus is a determination by the Committee of each NEO’s achievement (up to 100%, which is also the maximum) of individual performance objectives. This evaluation is based upon the common and unique objectives described below. These non-financial objectives are important to our success and are designed to enhance stockholder value over the long term.

Common objectives. Common elements of NEO objectives include operational and functional responsibilities. Specifically, each NEO has multiple objectives associated with the stewardship of the NEO’s areas of responsibility. The particular objectives vary by NEO, but typically include achieving both near- and long-

term business objectives and meeting budget expectations.

Unique objectives. The following are examples of categories of individual objectives unique to one or more of the NEOs based on area of responsibility within the Company:

The Committee met in February 2016 to consider the 2015 performance of each NEO as compared to the individual’s performance goals. Mr. Griess summarized the 2015 performance of the other NEOs and presented information to the Committee for consideration. After evaluating each NEO’s performance, the Committee assigned each NEO an individual performance percentage of 100% for 2015.

Final 2015 Bonus Calculation. The following table shows the calculation of the annual performance bonus earned by each NEO for 2015:

2015 Long-Term Incentive Awards

The Committee historically has made restricted stock awards to our NEOs in two forms: (1) performance-based awards that vest over a three-year period if specified performance-based criteria are met, and (2) time-based awards that vest in equal increments on the anniversary of the grant date over a four-year period.

Our performance-based awards are designed to highlight key financial measures over a three-year period. The program is designed to align both near-term progress and a long-term focus by establishing an opportunity during each year of the three year cycle to vest in a ratable portion of the award based on actual performance.

In determining the number of shares of restricted stock to be granted and the balance between performance-based and time-based shares, the Committee considered market data and advice from PM&P. See the 2015 Grants of Plan-Based Awards table on page 35 for additional information on 2015 grants.

The following table summarizes key terms of the NEOs’ long-term incentive awards, as well as the Company's performance compared to the financial targets for those tranches eligible to vest for 2015 related to awards granted in 2015, 2014, and 2013.