CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions Policy
Our policy on related party transactions (
Related Party Policy
) governs transactions involving us and certain
related persons that are required to be disclosed under Item 404 of SEC Regulation
S-K
(
S-K
404
). We regularly monitor our business dealings and
those of our directors and executive officers, as appropriate, to determine whether any such dealings would constitute a related party transaction under the Related Party Policy. Generally, under the policy, any transaction, arrangement or
relationship will be considered an interested transaction subject to the review or approval of the Audit Committee, if: (i) we are a participant in the transaction; (ii) the aggregate transaction amount involved will or may be expected to
exceed $120,000 in any calendar year; and (iii) a related person or party has or will have a direct or indirect material interest in the transaction. The following persons are considered
Related Parties
under the Related
Party Policy: (i) any director or executive officer of the Company; (ii) any nominee for director of the Company; (iii) any holder of more than 5% of our Common Stock; and (iv) any immediate family member of any of the above.
We have implemented a framework to help identify potential related party transactions, which may include from time to time, loan
transactions by the Company or the Bank, investment transactions, compensation arrangements, or other business transactions involving us or our subsidiaries. Under this framework, we have processes in place that are designed to identify, review and
escalate, as appropriate, proposed transactions involving a potential Related Party. Employees are also expected to escalate any transaction involving potential conflicts of interests pursuant to our Code of Conduct.
The Audit Committee has primary responsibility for reviewing these transactions for potential conflicts of interests and approving them
(or denying approval, as the case may be). Under the Related Party Policy, the Audit Committees approval may be granted in advance, ratified or based on certain standing approvals previously authorized by resolution. The Audit Committee may
delegate its approval authority under the Related Party Policy to the committee chairperson. Additionally, the Credit Committee reviews and approves certain related party loan transactions as described below, and the Governance Committee takes into
consideration related party transactions involving our directors as part of its annual director independence review.
Insider Loan Policy
We also have in place
a policy that permits the Bank to make loans (
Insider Loans
) to directors, executive officers and principal stockholders of the Bank or its affiliates and the related interests of those Insiders
(
Insiders
), pursuant to the applicable requirements of Regulation O of the Federal Reserve Act (
Regulation O
). Insider Loans qualify for an exemption from Section 402 of the Sarbanes-Oxley Act of 2002,
as they are made by the Bank and subject to Regulation O.
Pursuant to Regulation O, our Insider Loan policy authorizes the Bank to
make Insider Loans if such Insider Loans: (i) are approved in advance by a majority of the Board of Directors of the Bank, if the aggregate amount of all outstanding extensions of credit to the Insider and to all related
interests of the Insider exceeds $500,000; (ii) are extended under substantially the same terms and conditions and rates as those prevailing at the time of the Insider Loan for comparable transactions with
non-Insider
Bank clients; and (iii) do not have more than a normal risk of failure of repayment to the Bank or other unfavorable features. The Insider whose credit extension is subject to Board
approval may not participate either directly or indirectly in the voting to approve such extension of credit.
Related Party Transactions
Ordinary Course Loan Transactions
Except as described below, during 2016 the Bank made loans to Related Parties, including certain companies in which certain of our
directors or their affiliated venture funds are beneficial owners of 10% or more of the equity securities of such companies. Such loans: (i) were made in the ordinary course of business; (ii) were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons; and (iii) did not involve more than the normal risk of collectability or present other unfavorable features.
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BOARD & CORPORATE GOVERNANCE
Related Transactions
|
Employee Matters
SVB also maintains an Employee Home Ownership Program (
EHOP
), a benefit program that allows eligible
non-executive
employees of the Bank and its affiliates to receive mortgage loans at preferred rates. Generally, executive officers may not participate in the EHOP unless they have received a loan prior to their
appointment as executive officers, as was the case for Messrs. John China and Phil Cox. In March 2009, Mr. China received an EHOP mortgage loan in the amount of approximately $1.2 million, which became due as of April 1, 2016. The
loan was fully repaid on April 8, 2016. No late fees or other penalties were incurred pursuant to the terms of the loan. In September 2011, Mr. Cox received an EHOP mortgage in the amount of approximately $311,000, which matures in October
2018.
In 2016, Mr. Jon Wolter, a vice-president of SVB and the
son-in-law
of Ms. Joan Parsons, also received a mortgage loan through our EHOP in the amount of approximately $1.2 million, which matures in December 2023. In addition, Mr. Wolters total
compensation for 2016 was approximately $189,100 (including his base salary, bonuses, company contributions to his 401(k)/ESOP account, but excluding other normal benefits provided to all employees). His compensation is in accordance with our
standard employment and compensation practices applicable to employees with similar qualifications and responsibilities. Ms. Parsons does not participate in matters related to Mr. Wolters employment or compensation.
We also maintain a series of employee-funded investment funds known as Qualified Investors Funds (
QIFs
), which
invest employees own capital in certain funds, including certain SVB Capital funds. We pass on the cost of external expenses to the QIF participants and do not charge a management fee. Participating employees must meet certain eligibility
qualifications pursuant to applicable regulatory requirements. Messrs. Becker, Cadieux, China, Cox, Descheneaux, Wallace and Zuckert and Mdmes. Draper and Parsons have each made commitments to QIFs in commitment amounts ranging from $50,000 to
$250,000.
Vendor Arrangements
In
2016, we also entered into an engagement with BlackRock Financial Management, Inc. to perform certain independent compliance testing services related to the effectiveness of the Companys Volcker Rule compliance program, for a fee of
approximately $150,000. In addition, we engaged The Vanguard Group as the record-keeper and trustee of our 401(k) and Employee Stock Ownership Plan, as well as the record-keeper of our Deferred Compensation Plan. Our transition to Vanguard became
effective in January 2017, and as such, no fees were incurred in connection with these arrangements during the 2016 fiscal year. Each of BlackRock, Inc. and The Vanguard Group, together with their respective affiliates, is a greater than 5% owner of
our outstanding voting securities.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe, based on a review of Forms 3, 4 and 5 and amendments thereto filed with the SEC and other information known to us, that
during fiscal year 2016 our directors, officers (as defined in the rules under Section 16 of the Exchange Act), and any greater than 10% stockholders have complied with all Section 16(a) filing requirements in a timely manner.
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BOARD & CORPORATE GOVERNANCE
Section 16(a) Compliance
|
EXECUTIVE OFFICERS AND COMPENSATION
INFORMATION ON EXECUTIVE OFFICERS
Our executive officers perform policy-making functions for us within the meaning of applicable SEC rules. They may also serve as
officers of the Bank and/or our other subsidiaries. There are no family relationships among our directors or executive officers.
The following information outlines the name and age of each of our executive officers, as of the date of this Proxy Statement, and his
or her principal occupation with the Company, followed by biographical information of each such executive officer:
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Name
|
|
Age
|
|
|
Principal Occupation
|
Greg W. Becker
|
|
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49
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|
|
President and Chief Executive Officer
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Marc C. Cadieux
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50
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Chief Credit Officer
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John D. China
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51
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Head of Technology Banking
|
Philip C. Cox
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50
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|
Head EMEA and President of the UK Branch
|
Michael R. Descheneaux (1)
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49
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Chief Financial Officer
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Michelle A. Draper
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49
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Chief Marketing Officer
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Michael L. Dreyer
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53
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Chief Operations Officer
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Christopher D. Edmonds-Waters
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54
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Head of Human Resources
|
Laura Izurieta
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56
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Chief Risk Officer
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Roger E. Leone
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63
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Chief Information Officer
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Bruce E. Wallace
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52
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Chief Digital Officer
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Michael S. Zuckert
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58
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General Counsel
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(1)
|
In January 2017, the Company announced that Mr. Descheneaux was appointed as the President of Silicon Valley Bank,
where he will oversee the Companys global commercial bank, private bank and funds management businesses, as well as credit administration and business analytics. Mr. Descheneauxs appointment is expected to become effective upon the
appointment of a new chief financial officer, and until such time, he will continue to serve as the Companys Chief Financial Officer.
|
Greg W. Beckers
biography can be found under
Proposal No.
1Election of Directors
above.
Marc C. Cadieux
joined us in 1992 as an Assistant Vice President, and has held a variety of positions of increasing responsibility in the
areas of credit administration, business development and relationship management during his tenure with the Company. Mr. Cadieux was previously the Division Risk Manager for SVBs Eastern Division, where he was responsible for overseeing
our commercial lending activities in the United States, Canada, the United Kingdom and Israel. Mr. Cadieux was appointed as Assistant Chief Credit Officer in 2009 and was later appointed as Chief Credit Officer in 2013, where he currently
oversees our credit administration function. Prior to joining the Company, Mr. Cadieux held several credit-related positions with Pacific Western Bank and Bank of New England. Mr. Cadieux holds a Bachelors degree in Economics from
Colby College.
John D. China
joined
us in 1996 as Senior Relationship Manager and has since held a variety of positions with the Company, including Head of Venture Capital Group and Head of Private Equity Group. Mr. China was appointed as the Head of Relationship Management in
2010, and in 2014, as the Head of Relationship Banking (currently Head of Technology Banking), where he focuses on our core technology banking clients. Mr. China is a member of the advisory board of DEMO, and serves on the boards of ASTIA, a
non-profit
organization dedicated to the success of
women-led,
high-growth ventures, and the California Israel Chamber of Commerce. Mr. China holds a Bachelors
degree in Industrial Engineering from Stanford University.
24
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EXECUTIVE OFFICERS & COMPENSATION
Information on Executive Officers
|
Philip C. Cox
joined
us in 2009 as Head of UK, Europe & Israel, where he was responsible for the overall strategic direction of the Company in the UK, Europe and Israel, as well as the establishment of our UK Branch banking business. Mr. Cox was appointed
as Head of Europe, Middle East and Africa and President of the UK Branch in 2012, where he is focused on the international development of our business and is responsible for our UK branch. Prior to joining the Company, Mr. Cox was Head of
Commercial Banking at the Bank of Scotland in London, a division of Lloyds Banking Group (2008-2009) and the Chief Executive Officer of Torex Retail PLC (2005-2008). Prior to that, Mr. Cox spent approximately 23 years with NatWest/RBS Group and
held a variety of positions, including Managing Director of Transport and Infrastructure Finance, Regional Managing Director of the North of England Region and the same position for the South West and Wales business. Mr. Cox is a member of the
Chartered Institute of Bankers (UK) and the Association of Corporate Treasurers (UK).
Michael
R. Descheneaux
joined us in 2006 as Managing Director of Accounting and Financial Reporting, and was appointed as
Chief Financial Officer in 2007, where he is responsible for all our finance, treasury, accounting and legal functions, as well as our funds management business. Prior to joining the Company, Mr. Descheneaux was a managing director of Navigant
Consulting (2004-2006) and held various leadership positions with Arthur Andersen (1995-2002). Mr. Descheneaux holds a Bachelors degree in Business Administration from Texas A&M University. He is also a certified public accountant
licensed by the Texas State Board of Public Accountancy.
Michelle A. Draper
joined us in 2013 as Chief Marketing Officer, and is responsible for the strategy and execution of our global marketing initiatives. Prior to joining us, Ms. Draper held various senior-level marketing positions at Charles Schwab & Co.
from 1992-2013, including as Senior Vice President of Institutional Services Marketing, where she oversaw advertising, brand management and other key marketing strategies. Prior to that, Ms. Draper also served as a director of Investor Services
Segment Marketing and Vice President of Advisor Services Marketing Programs, developing marketing strategies for both the retail and institutional sides of the Charles Schwab business. Ms. Draper holds a Bachelors degree in Journalism
from California Polytechnic State University San Luis Obispo, as well as Series 7 General Securities Representative and Series 24 General Securities Principal licenses.
Michael L. Dreyer
joined us in 2015 as Chief Operations Officer, where he is responsible for the Companys global technology and infrastructure functions. Most recently, he served as the Chief Operations Officer and President of the Americas for Monitise, where
he was responsible for the design, build and operations of Monitises technology globally, as well as its Americas business (2014-2015). Prior to that, Mr. Dreyer was the Chief Information Officer at Visa Inc., where he was responsible for
companys systems and technology platforms (1998-2014). Mr. Dreyer has also held various senior-level positions at American Express, Prime Financial, Inc., the Federal Deposit Insurance Corporation (FDIC) and Bank of America. He has been
on the board of directors of Finisar Corporation (FNSR: NASDAQ) since 2015, and F5 Networks Inc. (FFIV: NASDAQ), since 2012. Mr. Dreyer holds a Bachelors degree in Psychology and a Masters degree in Business Administration from
Washington State University.
Christopher
D.
Edmonds-Waters
joined us in 2003 as Director of Organization Effectiveness, and in 2007, was appointed to his current role as Head of Human Resources, where he oversees our human resources function, which includes our compensation, global
mobility, recruiting and learning and development functions. Prior to joining the Company, Mr. Edmonds-Waters held various senior-level human resources positions at Charles Schwab & Co. from 1996-2003, and began his career at
Macys California where he held various merchandising as well human resources roles. Mr. Edmonds-Waters holds a Bachelors in Intercultural Communications from Arizona State University and a Masters in Human Resources and
Organization Development from the University of San Francisco.
Laura Izurieta
joined us in August 2016 as Chief Risk Officer, and is responsible for leading our enterprise-wide risk management, corporate
compliance and regulatory functions. Prior to joining the Company, Ms. Izurieta held various roles of increasing responsibility at Capital One (2000-2016). Most recently, Ms. Izurieta served as the Executive Vice President and Chief Risk
Officer, Retail and Direct Bank at Capital One. Prior to that, she held various senior-level roles at Capital One, including Senior Vice President of Enterprise Risk Management, Vice President of Corporate Reputation and Governance, Vice President
of Capital One Home Loans and Vice President of Information Technology. Prior to her tenure at Capital One, Ms. Izurieta also held positions at Freddie Mac and Bank of America. Ms. Izurieta holds a Bachelors degree in Business
Administration from Towson University and a Masters degree in Applied Behavioral Science from John Hopkins School of Business.
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EXECUTIVE OFFICERS & COMPENSATION
Information on Executive Officers
|
Roger E. Leone
joined
us in 2015 as Head of IT Infrastructure Engineering and Operations, and in September 2015, was appointed to his current role as Chief Information Officer, where he oversees our information technology functions. Prior to joining us, he served in a
range of technology positions, including as an independent consultant from (2011-2014) and Vice President, Global IT Services at Yahoo! (2010-2011). Prior to that, Mr. Leone held various senior-level IT positions at Pfizer (1996-2010),
including as Vice President of Americas Regional Shared Services, where he managed a team of over 400 IT professionals supporting over 26,000 clients in the Americas. Prior to his time at Pfizer, Mr. Leone spent approximately 20 years with Bank
of America in a variety of IT positions. Mr. Leone holds a Bachelors degree in Mathematics from Utica College of Syracuse University.
Bruce E. Wallace
joined us in 2008 as Head of Global Services, where he was responsible for our operations, product management, global
transaction banking and service delivery. He was later appointed Chief Operations Officer in 2011, where he was responsible for leading all bank and
non-bank
operations and information technology services. In
2015, Mr. Wallace was appointed to his current role as Chief Digital Officer, where he is responsible for the Companys digital banking functions and the Companys
fee-based
product businesses.
Prior to joining the Company, Mr. Wallace spent more than 20 years in a variety of management positions in banking operations with Wells Fargo & Company, most recently as Senior Vice President and Manager of Treasury Management
Operations (2005-2008). Mr. Wallace holds a Bachelors degree in Accounting from California State University, Sacramento.
Michael S. Zuckert
joined us in 2014 as General Counsel and is responsible for all our legal matters. Prior to joining us, he served in a
wide range of legal positions within the financial services industry. Most recently, he served as Deputy General Counsel of Citigroup (2009-2014), where he served as general counsel for the companys
non-core
assets business, Citi Holdings, and focused on mergers and acquisitions. Prior to his time at Citigroup, Mr. Zuckert held various senior-level positions at Morgan Stanley & Co. Inc., and
was Vice President and General Counsel at TheStreet.com, Inc., an online financial news provider. Mr. Zuckert has also been a director of the Law Foundation of Silicon Valley since 2015 and a member of the leadership counsel of Tech:NYC since
2017. He holds Bachelors degrees in History and Law and Society from Brown University and a Juris Doctor from New York University School of Law.
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EXECUTIVE OFFICERS & COMPENSATION
Information on Executive Officers
|
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (
CD&A
) discusses our 2016 executive compensation program, as it
relates to our five named executive officers listed below.
|
CD&A E
XECUTIVE
S
UMMARY
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Message from the Compensation
Committee
The Compensation Committee
of the Board of Directors has primary oversight over the design and execution of the Companys executive compensation program. While we did not make any material changes to the design of our 2016 executive compensation program consistent
with prior years, we continued to focus on:
Setting challenging performance metrics aligned with our strategic business and
growth objectives, as well as stockholder interests;
Establishing a compensation
framework that incents consistent and sustainable long-term performance, but without encouraging undue risk-taking; and
Determining compensation based on an appropriate balance of formulaic
considerations, as well as Compensation Committee judgment.
Despite a year of continued low interest rates, increasing regulatory complexities and strong competition, we believe the
compensation paid to our executives for 2016 was commensurate with the strong performance delivered on both an individual and Company basis. (
For a summary of our 2016 financial and business highlights, please see the Summary Performance
and Proxy Information section at the beginning of this Proxy Statement.
) The compensation framework we have established continues to be focused on our long-term global growth and we look forward to our continued execution against our
strategic objectives in 2017.
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NAMED
EXECUTIVE
OFFICERS
(NEOs)
Greg Becker
President and CEO
Michael Descheneaux
*
Chief Financial Officer
Marc Cadieux
Chief Credit Officer
John China
Head of Technology
Banking
Joan Parsons
**
Credit Risk Manager
|
Kate
Mitchell
(Committee Chair)
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Jeff Maggioncalda
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John Robinson
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Garen Staglin
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P
RIMARY
E
XECUTIVE
C
OMPENSATION
E
LEMENTS
FOR
2016 - S
UMMARY
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Base
Salary
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Incentive Compensation
Plan (ICP)
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Performance-Based Restricted
Stock Units (PRSUs)
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Stock
Options
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Restricted Stock
Units
(RSUs)
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Form of Compensation
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-------------------- Cash --------------------
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------------------------------- Equity-------------------------------
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---- Fixed ----
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-------------------------- Performance-Based -----------------------
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-----Fixed^-----
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Performance Timing
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--------- Short-Term Emphasis
---------
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-----------------------
Long-Term Emphasis -----------------------
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Measurement Period
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Ongoing
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1 Year
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3 Years
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4 Year Vesting
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Key Performance Metrics Applicable
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---
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ROE^^
(budgeted and relative)
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Relative TSR^^;
ROE;
Selected Fee Income
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Stock Price
Appreciation
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Determination of
Performance-Based
Payouts
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---
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Formulaic + Discretion
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Formulaic + Negative Discretion
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---
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*
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On January 26, 2017, we announced plans to appoint Mr. Descheneaux as the President of Silicon Valley Bank,
to become effective upon the hiring of a new Chief Financial Officer (a search for which is currently underway).
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**
|
As of February 6, 2017, Ms. Parsons transitioned from her former role as Head of Specialty Banking to the
non-executive
role of Credit Risk Manager, focusing on the Companys global banking activities.
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^
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Any incremental value realized above the grant value of time-based RSUs, as well as PRSUs, is based on stock price
appreciation.
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^^
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ROE Return on Average Equity; TSR Total Stockholder Return.
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EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
2016 CEO C
OMPENSATION
AND
O
THER
H
IGHLIGHTS
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CEO P
AY
A
LIGNMENT
WITH
C
OMPANY
P
ERFORMANCE
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The Compensation Committee takes
into consideration a variety of factors in determining actual CEO compensation. For illustrative purposes, the graphs above show the general comparison between our CEOs total actual compensation (as reported in our 2016 Summary Compensation
Table) and selected key financial metrics:
Diluted Earnings
per Common Share (EPS) and Net Income
both core financial metrics are generally used to evaluate overall Company performance.
¡
The metrics are also taken into consideration, in particular, for the determination of the CEOs ICP award.
¡
Net income includes fee income from our foreign exchange and credit card-based businesses. Such selected fee income is one of the
performance metrics applicable to executive PRSU awards.
Relative Return on Equity (ROE) Performance
one of the metrics used to measure performance against our relevant peer group for purposes of determining the funding of our ICP.
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E
MPHASIS
ON
P
ERFORMANCE
-B
ASED
,
L
ONG
T
ERM
CEO P
AY
(C
OMPETITIVE
WITH
P
EERS
)
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Fixed v. Performance-Based CEO Target Pay
(Compared to 2016 Peer Group)
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Short-Term v. Long-Term CEO Target Pay
(Compared to 2016 Peer Group)
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Fixed Pay:
Base Salary
RSUs
Performance-Based:
ICP
PRSUs
Stock Options
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Short-Term
Pay:
Base Salary
ICP
Long-Term Pay:
PRSUs
RSUs
Stock Options
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B
ALANCED
CEO T
ARGET
P
AY
M
IX
|
CEO Target Pay Mix
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81%
OF
CEO
T
ARGET
P
AY
IS
A
T
-R
ISK
.
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In 2016, we maintained an annual equity burn rate of 1.7% under our 2006 Equity Incentive Plan.
We continue to stay below our long-standing commitment to keep our
annual equity burn rate below 2.5% of our total number of shares outstanding as of the beginning of each fiscal year.
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EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
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E
XECUTIVE
C
OMPENSATION
AND
P
RACTICES
|
|
C
OMPENSATION
O
VERSIGHT
AND
G
OVERNANCE
|
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Independent Board oversight of CEO compensation.
The independent members of our Board of
Directors (acting as a committee) oversee and approve the compensation of our CEO, based on recommendations made by the Compensation Committee.
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Independent committee oversight of
non-CEO
executive
compensation.
Our Compensation Committee (comprised of all independent directors) oversees and approves the compensation of all
non-CEO
executive officers.
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Independent compensation consultant to the Compensation Committee
. The Compensation
Committees independent compensation consulting firm does not provide any other services to the Company.
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Active Compensation Committee engagement
. In 2016, the Compensation Committee held twelve
(12) meetings to discuss compensation matters, including an extended annual compensation strategy session.
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F
OCUS
ON
S
TOCKHOLDER
I
NTERESTS
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Say on Pay
.
We conduct a Say on Pay advisory vote on an annual basis. Our Board of Directors values the opinions of our stockholders and believes an annual advisory vote allows our stockholders to provide us with their input on our executive
compensation program.
Robust executive equity ownership guidelines.
Our executives are subject to robust equity ownership guidelines, which are regularly reviewed. In particular, our CEOs minimum requirement is equal to six (6) times his annual base salary. (No changes were made in 2016.)
Active stockholder engagement.
In addition to
our active investor outreach activities throughout the year, as part of our annual proxy statement preparation process, we routinely and proactively reach out to our key stockholders to solicit their feedback about our executive compensation
program, including our equity compensation practices.
Focus on stockholder return
. Our performance
metrics for our executives PRSUs and the funding of our ICP include our relative TSR performance and the Companys relative ROE performance, respectively, which in both cases include performance as measured against our peers.
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S
AY
ON
P
AY
F
REQUENCY
We are conducting our Say on Pay
frequency vote this year, and similar to 2011, the Board has recommended that stockholders vote in favor of an annual frequency.
(See Proposal No. 4
on page 54.)
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C
OMPENSATION
R
ISK
M
ITIGATION
AND
M
ANAGEMENT
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Compensation risk management
. The Compensation Committee, together with its compensation
consultant, conducts annual risk assessments of our compensation program, which include process, tone and culture. Based on those assessments, we do not believe that our compensation program creates risks that are reasonably likely to have a
material adverse effect on the Company. Our compensation program is also reviewed by our internal audit function, as well as discussed as part of our Risk Appetite Statement and enterprise risk management efforts. Moreover, our compensation programs
and risks are routinely discussed at the Board-level beyond the Compensation Committee. In particular, the chairperson of our Compensation Committee reports to and discusses compensation risk issues with the full Board and the Risk Committee.
Compensation matters are also reviewed with the Audit Committee, particularly as it relates to exclusions under our ICP funding.
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Our incentives are subject to certain minimums and maximum limits.
We establish minimum
thresholds for certain incentives where awards/payouts may not be earned or made unless actual performance meets or exceeds thresholds, such as our PRSUs. We also establish maximum limits for our executive PRSU awards, our annual cash incentives
funding, and our broad-based employee stock ownership plan.
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No hedging or pledging
. Pursuant to our Insider Trading Policy, our directors, executive
officers and employees are not permitted to hedge ownership by selling puts in or selling short any of our publicly-traded securities at any time. Additionally, we have not permitted any of our executive officers to pledge, or use as
collateral, our securities to secure personal loans or other obligations.
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EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
E
XECUTIVE
C
OMPENSATION
F
EATURES
|
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Competitive benchmarking against peers.
In making compensation decisions, we consider
compensation and performance data from our benchmarking reference peer group and other relevant and comparable industry sources. Additionally, we routinely review, on at least an annual basis, the composition of the companies within the peer group.
See
Competitive Benchmarking Against Peers
below.
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|
Double trigger change in control severance.
Our executive Change in Control Plan encourages
continued dedication and alignment with stockholders interests through a potential change in control event, and is subject to a double trigger feature.
|
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|
No 280G excise tax gross-ups
. Our executives are not entitled to any Section 280G excise tax
gross-up payments under our executive Change in Control Plan or otherwise.
|
|
|
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|
No employment agreements
. We do not have any individual employment agreements with any of our
named executive officers.
|
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|
|
No executive perquisite or benefit programs
. We do not have any executive perquisite
programs. Other than our executive Change in Control Plan, we do not have any special executive programs that offer benefits exclusively to our executives. Our executives receive the same retirement, health, welfare and other benefits that are
generally available to our employees, and may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Plan. From time to time and on a limited basis, we may provide individual
benefits deemed to be perquisites, which we believe serve, or are related to, a reasonable business purpose.
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|
No special executive retirement benefits
. Our executives are eligible to participate in our
401(k) plan (or other employee-funded retirement plan) that is broadly available to all employees. We do not provide any other pension, excess retirement, or supplemental executive retirement (
SERP
) plans to any
executive.
|
Our executives equity awards are made under our 2006 Equity Incentive Plan and
have the following features/practices:
General Features/Practices:
|
¡
|
|
No recycling of shares used to pay for the exercise price of stock options
|
|
¡
|
|
Annual burn rate maximum of 2.5%
|
|
¡
|
|
No single-trigger vesting upon change in control
|
|
¡
|
|
No tax gross-ups for plan awards
|
|
¡
|
|
Ability to qualify performance-based equity awards for 162(m) tax deductibility, where appropriate
|
Stock Options:
|
¡
|
|
No stock option repricing/exchange without stockholder approval
|
|
¡
|
|
No stock option reloads
|
|
¡
|
|
Minimum 100% fair market value exercise price for options
|
|
¡
|
|
Maximum 7-year term for options
|
|
¡
|
|
Minimum 1-year vesting for stock options awards
|
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|
|
Our typical practice for executives is vesting over 4 years
|
Full Value Awards:
|
¡
|
|
Each full value award share counted as two shares
|
|
¡
|
|
Minimum 3-year time-based vesting for full value awards
|
|
|
|
Our typical practice for executives is vesting over 4 years
|
|
¡
|
|
Minimum 1-year vesting for performance-based full value awards
|
|
|
|
Our typical practice for executives is vesting over 3 years
|
* * * *
30
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EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
E
XECUTIVE
C
OMPENSATION
P
HILOSOPHY
AND
O
BJECTIVES
|
The key compensation philosophy and objectives of our executive compensation program and practices
are as follows:
|
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|
Aligning the interests of our stockholders, our Company and employees;
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|
|
Tying pay to Company and individual performance through appropriate performance metrics and
consideration of market and business environment dynamics;
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|
Maintaining an appropriate pay mix, with an emphasis on performance-based pay and long-term
incentive compensation;
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Paying competitively based on external market standards, while considering internal parity;
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|
|
Recruiting and maintaining a cohesive,
top-talent
executive management team; and
|
|
|
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|
Focusing on strong governance and risk management practices.
|
|
Our compensation philosophy and program
take into consideration our business objectives (including our long-term global growth); the relative complexity our business diversity represents in an organization of our size; stockholder interests; appropriate risk management practices; emerging
trends in executive compensation (particularly for financial institutions); applicable regulatory requirements; and market practices.
|
C
OMPENSATION
G
OVERNANCE
|
Role of Compensation Committee; Committee Meetings
All members of the
Compensation Committee are independent under applicable NASDAQ rules. The Compensation Committee has primary oversight of our executive compensation program as provided in its charter, including the design and administration of executive
compensation plans in a manner consistent with the executive compensation philosophy described above. The committee: (i) reviews and recommends for independent Board approval the compensation of the CEO, and (ii) reviews and approves the
compensation of all other
non-CEO
executive officers. In carrying out its oversight responsibilities, the committee regularly reports to the Board on the actions it has taken, as well as confers with the Board
on compensation matters, as necessary. The Compensation Committee also makes recommendations for all other compensation-related matters that require full Board approval. Additionally, the committee coordinates with other Board committees, as
appropriate, including discussing: (i) compensation risk management with the Risk Committee, and (ii) financial items proposed for exclusion from the funding of our ICP with the Audit Committee. Membership of the Risk Committee includes
the chairperson of the Compensation Committee, as well as one other member of the Compensation Committee who also serves as the chairperson of the Audit Committee.
The Compensation Committee meets on a regular basis, and routinely meets in executive session without management present. During 2016,
the Compensation Committee held twelve (12) meetings, including an extended annual session where the Compensation Committee met with the Board Chair, as well as key members of executive management, including the CEO, the Chief Financial
Officer, the Head of Human Resources and the General Counsel, to discuss considerations for reviewing and enhancing compensation strategy in light of the Companys strategic objectives, as well as relevant market trends.
Role of the Independent Board Members
Subject to the recommendation of the Compensation Committee, all of the independent directors of the Board (all Board members except
the CEO, acting as a committee) review and approve the compensation for the CEO. Such review and approval are conducted during the executive sessions, where neither the CEO nor any other member of management is present.
Role of Chief Executive Officer
At the Compensation Committees request, our CEO will attend portions of the Compensation Committees meetings and executive
sessions to discuss the Companys performance and compensation-related matters. While he does not participate in any deliberations relating to his own compensation, he shares his assessment of the performance of the other executive officers
with the Compensation Committee. Based on his assessment and the Companys overall performance, our CEO makes recommendations to the Compensation Committee on any compensation decisions or changes for the other executive officers. The committee
considers the CEOs recommendations, as well as data and analyses provided by the Compensation Committees independent consultant (and to a lesser extent, management), but retains full discretion to approve, or recommend for the
independent members of the Board to approve, all executive compensation.
31
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|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
Role of Compensation Committee Consultant
The Compensation Committee has
continued to retain Pay Governance LLC, an independent executive compensation consultant, to provide advice and recommendations on all compensation matters under its oversight responsibilities as defined in the Compensation Committees charter.
The Compensation Committee in its sole discretion selects the consultant, and determines its compensation and the scope of its responsibilities.
In 2016, Pay Governance assisted the Compensation Committee with: advice and recommendations regarding the Companys compensation
philosophy and strategies; advice on executive and director compensation levels and practices, including review and recommendations on CEO and other executive compensation and evaluation of CEO pay and Company performance; advice on the
Companys 2016 Peer Group; guidance on the design of our compensation plans and executive/director stock ownership guidelines; evaluation of performance metrics and peer performance; assistance with the Compensation Committees annual
review of potential risks associated with our compensation programs; recommendations regarding our 2006 Equity Incentive Plan; and periodic reports to the Compensation Committee on market and industry compensation trends and regulatory
developments. The Compensation Committee did not engage Pay Governance for any additional services outside of executive and director compensation consulting during 2016. In addition, the Compensation Committee does not believe there were any
potential conflicts of interest that arose from any work performed by Pay Governance during 2016.
We submit an advisory vote on executive compensation, or Say on Pay, to our stockholders on an annual
basis. In 2016, over 98.5% of the votes cast approved our 2015 executive compensation program (as described in our 2016 proxy statement). In light of the strong support and other feedback we have solicited from our stockholders, the Compensation
Committee made no material changes to our compensation philosophy, policies or overall program. Nevertheless, we continue to carry out our executive compensation program based on our key philosophy and objectives as described above. The Compensation
Committee will continue to consider changes to the program on an ongoing basis, as appropriate, in light of evolving factors such as our corporate strategy, the business environment and competition for talent, as well as stockholder feedback.
32
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|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
C
OMPETITIVE
B
ENCHMARKING
A
GAINST
P
EERS
|
For 2016, the Compensation Committee benchmarked and compared our compensation and performance with our
peer companies, in a manner consistent with prior years. Our
2016
Peer Group
companies are companies that are similarly sized, have certain business model similarities and compete with us for our talent. (See below for a list of our 15
peer group companies for 2016.)
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|
|
The Compensation Committee, with its compensation consultant and management, reviews on at least an
annual basis, the composition of the peer group. In determining the composition, the Compensation Committee considers various factors and characteristics including, but not limited to, business model, complexity of the business, market
capitalization, asset size, assets under management, number of employees, and performance on financial and market-based measures.
The 2016 Peer Group reflects the removal of two companies from our 2015 Peer Group: (i) City National Corp., which was
acquired during 2015; and (ii) MB Financial, Inc., due to the lower total asset level relative to the Company. No new companies were added to the 2016 Peer Group.
It is important to note that in determining
executive compensation, the Compensation Committee does not solely rely on comparative data from the 2016 Peer Group. Such comparative data provides helpful market information about our peer companies, but the Compensation Committee does not target
any specific positioning or percentile, nor does it use a formulaic approach, in determining executive pay levels. The Compensation Committee also utilizes other resources, including published compensation surveys (from Towers Watson and McLagan)
and other proxy data. All such comparative peer data and supplemental resources are considered, along with the Companys pay for performance and internal parity objectives. All applicable information is reviewed and considered in aggregate, and
the Compensation Committee does not place any particular weighting on any one factor.
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2016 Peer Group
|
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|
Associated Banc-Corp
BOK Financial Corp
Comerica Incorporated
Commerce Bancshares, Inc.
Cullen/Frost Bankers, Inc.
East West Bancorp, Inc.
FirstMerit Corporation*
First Republic Bancorp
Huntington Bancshares
Investors Bancorp, Inc.
Prosperity Bancshares, Inc.
Signature Bank
Umpqua Holdings Corporation
Webster Financial Corp.
Zions Bancorporation
|
|
|
* Acquired during 2016; for performance benchmarking purposes, we replaced this company with the
performance average of the applicable metric of the other peer companies at the end of 2016.
|
33
|
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|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
E
LEMENTS
OF
E
XECUTIVE
C
OMPENSATION
|
|
S
UMMARY
OF
K
EY
C
OMPONENTS
|
|
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|
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|
|
|
|
|
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|
Component and Purpose
|
|
2016 Key Highlights
|
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|
|
General
|
|
NEOs
|
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|
|
|
|
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|
Base Salary
Provides ongoing fixed cash pay.
|
|
---
|
|
Annual base salary stayed at prior years level or was increased between 1.6-6.0%
|
|
|
|
|
|
Annual Cash Incentives
Provides short-term (annual) performance-based cash incentive compensation
opportunity under our ICP.
|
|
No material changes to funding methodology for 2016:
¡
2/3 of the pool based on ROE performance against our
annual target ROE; and
¡
1/3 of the pool based on relative ROE performance
against peer performance.
Based on the Companys ROE performance above its annual target
and its ranking against its peers, as well as the Companys overall performance, 135% of the 2016 total ICP pool was funded.
|
|
Annual ICP targets stayed at prior years level or was increased by 11.1 to
16.7%.
For 2016, actual ICP awarded ranged from 124% to 167% of
individual target payout.
|
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|
Performance-Based Restricted Stock Units (
PRSUs
)
Provides incentives to motivate and retain executives and to reward for our performance
relative to peers based on certain specific metrics.
|
|
PRSUs granted in 2016 vest subject to performance over a
3-year
period based on (each 50% of the award): (i) the Companys TSR performance relative to peers; and (ii) the Companys ROE and Selected Fee Income performance.
|
|
2016 allocation represented 50% of the target value of each executives total equity
compensation
|
|
|
|
|
Stock Options
Provides incentives for long-term creation of stockholder value over a 4-year period.
|
|
All stock options and RSU awards are subject to standard annual vesting over a
4-year
period
|
|
2016 allocation of stock options and RSU awards each represented 25% of the target value of each executives total equity compensation
|
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|
|
|
Restricted Stock Units (
RSUs
)
Provides incentives for retention and long-term creation of stockholder value over a 4-year period.
|
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|
|
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34
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|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
We pay base salaries in order to provide executives with a reasonable level of fixed
short-term compensation. Executive base salary levels are typically reviewed at least annually by the Compensation Committee and adjusted as appropriate. Such adjustments generally consist of merit increases, promotions or changes in
responsibilities, or market adjustments. Base salaries are determined on an individual basis. When determining any base salary increases, the Compensation Committee considers an individuals total compensation package, his or her performance,
Company performance, comparative peer and market compensation data, internal parity, and other relevant factors, including the scope of the executives responsibilities relative to peers and other executives, and retention concerns.
|
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|
NEO
|
|
|
|
Percentage
Increase
from 2015
|
|
|
|
2016 Annual
Base Salary
|
|
|
|
|
|
|
|
|
Greg Becker
|
|
|
|
|
|
1.6
|
%
|
|
|
|
|
$
|
925,000
|
|
|
|
|
|
|
|
|
Michael Descheneaux
|
|
|
|
|
|
|
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|
600,000
|
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|
Marc Cadieux
|
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|
5.9
|
|
|
|
|
|
|
450,000
|
|
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|
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|
John China
|
|
|
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|
4.2
|
|
|
|
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|
|
500,000
|
|
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|
Joan Parsons
|
|
|
|
|
|
4.2
|
|
|
|
|
|
|
500,000
|
|
|
|
In 2016, each NEO, except our Chief Financial Officer, received merit increase
adjustments to their base salaries based on individual performance, salary market positioning relative to peers, and internal parity, as appropriate.
|
A
NNUAL
C
ASH
I
NCENTIVES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
NEO
|
|
|
|
Percentage
Increase
from 2015
|
|
|
|
2016 Annual
ICP Target
(% of Annual
Base
Salary)
|
|
|
|
|
|
|
|
|
Greg Becker
|
|
|
|
|
|
11.1
|
%
|
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Michael Descheneaux
|
|
|
|
16.7
|
|
|
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
Marc Cadieux
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
John China
|
|
|
|
|
|
16.7
|
|
|
|
|
|
|
70
|
|
|
|
|
|
|
|
|
|
Joan Parsons
|
|
|
|
|
|
16.7
|
|
|
|
|
|
|
70
|
|
|
|
Our executives, including our NEOs, participate in the Companys Incentive
Compensation Plan (
ICP
), an annual cash incentive plan that rewards performance against individual and Company objectives.
Each executive participant is assigned an incentive target, stated as a percentage of the individuals annual base salary.
Based on the Compensation Committees annual compensation review, in 2016, ICP targets for NEOs, except for our Chief Credit Officer, were increased to align targets with peer and market compensation and to continue to balance overall total
target pay mix.
ICP Funding
|
|
|
|
|
Each year, the Compensation Committee establishes one or more metrics that it will use to measure Company
performance for ICP funding purposes. These metrics measure the Companys performance on an absolute basis, as well as relative to peers. Based on those metrics and overall Company performance, the Compensation Committee will also determine the
extent to which the Company will fund the incentive pool for the broad employee base, including executive officers.
For 2016, the Compensation Committee utilized the same methodology for funding the ICP as in prior years in all material respects.
The committee continued to believe that return on equity (
ROE
) is an appropriate indicator of financial performance that drives stockholder value, especially if performance is measured against the Companys target objectives,
as well as peer performance. Accordingly, the Compensation Committee continued to apply the following two performance metrics:
(See graphs below.)
|
|
|
|
Performance Metrics for ICP Funding
ROE measured against budget
ROE relative to 2016
Peer Group
|
ROE Performance Against Annual ROE Target
(Two-Thirds
(2/3) of Pool)
-
Two-thirds
(2/3) of
the total incentive pool is funded based on the Companys ROE performance relative to our Board-approved annual target ROE. The graph below illustrates the relationship in 2016 between: (i) achieved (but adjusted for the exclusions
discussed below) ROE of 10.53% as a percentage of our annual target ROE (which was budgeted for 2016 at 9.91%), and (ii) the percentage of the target incentive pool accrued. There is a funding maximum of 200% of target (for achievement of 150%
or over of our target ROE).
In addition, the Compensation Committee retains discretion to determine the extent to which the
Company met its ICP performance target, including discretion to consider adjustments for certain out of the ordinary or
non-recurring
items. Adjustments are determined by the Compensation Committee, in
coordination with the Audit Committee.
35
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
For 2016, excluded items included: (i) certain gains or losses of the Companys
investment securities (including
non-marketable
securities, warrant securities and
available-for-sale
securities), largely
because performance of such securities are subject to market performance beyond the Companys control; (ii) any impact from changes in Federal Reserve interest rates (other than any changes already included in the annual budget); and
(iii) certain expense adjustments due to refinements and enhancements to our allowance for loan and lease losses methodology as well as changes to our deferred tax balances. The net impact of these exclusions resulted in a lower adjusted ROE
metric that reduced the overall funding of the ICP pool.
ROE Performance Against 2016 Peer Group
(One-Third
(1/3) of Pool)
- For 2016, the
Compensation Committee also established ROE relative to the 2016 Peer Group as an additional ICP performance metric to fund 1/3 of the total pool. As illustrated in the graph below to the right, there is no payout if our performance falls in the
bottom four positions, and a payout maximum in the top three positions. The extent of funding earned is subject to straight-line interpolation based on ROE performance between the third and thirteenth ranked companies.
|
|
|
|
|
|
|
|
|
|
|
2016 Results:
|
Achieved 106.3% of our Annual ROE Target
|
|
|
|
Ranked in the 5th position against our 2016
Peer Group.
|
*
|
While the Compensation Committee retains discretion to fund a portion of the bonus pool if performance thresholds are
not achieved, this discretion was not exercised in 2016.
|
For 2016, the Compensation Committee determined that:
(i) 2/3 of the total ICP pool would be funded at 113% of target, based on the Companys ROE performance, as adjusted, after taking into account the adjustments as discussed above; and (ii) 1/3 of the total ICP pool would be funded at 180% of
target, based on the Companys relative ROE performance, ranking in the fifth position against the 2016 Peer Group. As a result, the Compensation Committee approved the funding of the total ICP pool at 135% of total target.
2016 NEO ICP Awards
The Compensation Committee (or in the case of the CEO, the independent members of the Board) determines actual annual cash incentive
awards for the NEOs based upon the individuals target incentive level, the Companys performance, and the NEOs individual performance. ICP awards for NEOs may be at, above, or below the target incentive. For 2016, each NEO was
awarded the ICP amounts set forth in the table to the right.
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
|
|
2016
ICP Award
|
|
|
|
Greg Becker
|
|
$
|
1,148,750
|
|
|
|
Michael Descheneaux
|
|
|
625,000
|
|
|
|
Marc Cadieux
|
|
|
375,000
|
|
|
|
John China
|
|
|
525,000
|
|
|
|
Joan Parsons
|
|
|
475,000
|
|
|
|
In determining such 2016 awards, the Board considered Mr. Beckers performance
assessment conducted by the independent members of the Board, and the Compensation Committee considered the performance assessments of each of the other NEOs as conducted by Mr. Becker, as well as input from the independent members of the
Board. (
See Corporate Governance Principles and Board Matters Oversight of CEO Annual CEO Performance Evaluation above.
)
In addition, the independent members of the Board (with respect to Mr. Becker) and the Compensation Committee (with respect to the
other NEOs) considered a variety of factors that they believed to be relevant, including: (i) the overall strong
36
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|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
performance of the Company and the respective areas of oversight of each NEO, and (ii) each NEOs contributions to our business and financial results, execution of our 2016 corporate
initiatives, corporate risk management, and broader leadership within the organization. Specifically for Mr. Becker, key factors considered included:
|
|
|
Continued 2016 profitability:
|
|
|
|
Annual EPS increase by 10%
|
|
|
|
Annual net income available to common stockholders increase by 11%
|
|
|
|
Healthy Company growth:
|
|
|
|
Total average asset growth by 8%
|
|
|
|
Total average loan balances (net of unearned income) increase by 24%
|
|
|
|
Total average client funds (deposits and total client investment funds) balance growth by 9%
|
|
|
|
Continued growth in
non-GAAP
core fee income of 19% (
see Appendix A
)
|
|
|
|
Continued stability of credit performance
|
|
|
|
Demonstrated leadership in the Companys long-term strategic planning
|
|
|
|
Continued global growth, including expansion into the European and Canadian markets
|
|
|
|
Strong client focus; growth in market share 16% increase in net client count
|
|
|
|
Corporate focus on enterprise risk management and regulatory compliance
|
|
|
|
Ongoing development of executive leadership team
|
|
L
ONG
-T
ERM
E
QUITY
I
NCENTIVES
|
|
|
|
|
|
The Company believes that equity-based awards, particularly in combination with the Companys equity
ownership guidelines as discussed below, tie each of the NEOs compensation to the Companys long-term financial performance and align the interests of the NEOs and our stockholders. The Compensation Committee typically makes equity awards
to each NEO at the time the individual is hired or promoted, and annually thereafter. The size of the awards reflects the overall number of shares available to the Company under our equity incentive plan, the Compensation Committees
determination of an appropriate annual equity burn rate (the percentage of total shares outstanding that the Company has issued during the year in the form of equity compensation), the NEOs role and performance, and the market compensation
data for the NEOs external peers.
In
2016, the Compensation Committee continued to focus on long-term, performance-based equity compensation, keeping consistent with the equity mix from the prior year. The committee determined a target equity award total value for each NEO based on
peer benchmarking comparisons, and granted a mix of 50% performance-based RSUs, and 25% each of stock options and time-based vesting RSUs.
|
|
|
|
Allocation of Total Equity Award for NEOs
|
Stock Options and Restricted Stock Units (RSUs)
Stock options and restricted stock units are subject to annual vesting over a four-year period. The stock options have a maximum term
of seven years. No performance-based criteria was established, as the increase in the value of these stock options, and the value of the RSUs, are inherently tied to the future performance of the Companys common stock. 2016 annual stock option
and RSU grants were made effective as of May 2, 2016.
Performance-based
Restricted Stock Units (PRSUs)
|
|
|
|
|
Performance-based restricted stock units are
earned based on the achievement of certain performance metrics, as determined by the Compensation Committee. These metrics typically measure the Companys performance on an absolute basis, as well as relative to peers. After the end of the
specified performance period, the Compensation Committee will determine whether (and to what extent) the NEOs earned the PRSUs, subject to a maximum total payout of 150% of target award.
For 2016 (and consistent with the prior year),
the NEOs were granted, effective as of February 16, 2016, PRSUs that were subject to performance-based vesting over a three-year period (from 2016 through 2018) and certain designated performance metrics. To the extent earned, these awards are
subject to additional time-based vesting through January 30, 2019. The PRSUs are designed to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code. 2016 represents the first year of a three-year performance
period, hence none of the PRSUs granted in 2016 have been earned.
|
|
|
|
Performance Metrics for
PRSUs
TSR relative to
2016 Peer Group
ROE (as funding threshold)
Selected Fee
Income
|
37
|
|
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|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
The performance metrics for the 2016 PRSUs are described below:
Relative TSR Against 2016 Peer
Group
(50% of Award).
Fifty percent of the PRSU award is funded at a maximum payout of 150% of target, and earned (subject to additional
time-based vesting) based on the Companys TSR
1
performance over a three-year performance period as ranked against the 2016 Peer Group
(Relative TSR)
. (The Compensation
Committee may apply negative discretion to reduce the actual award, as it deems appropriate.) The committee selected Relative TSR as a key PRSU performance metric because it correlates directly with the Companys stock price performance, which
aligns with stockholder interests. No payout is made if the Company ranks in any of the bottom four positions.
ROE Funding Threshold and Selected Fee
Income Target
(50% of Award).
|
¡
|
|
The other fifty percent of the PRSU award is funded at a maximum payout of 150% of target and earned (subject to
additional time-based vesting) based on the Companys achievement of a three-year annual average ROE performance threshold of 5% or higher. (No funding if ROE falls below 5%.) (The Compensation Committee may apply negative discretion to reduce
the actual funding, as it deems appropriate.) For 2016, the Companys actual ROE exceeded the 5% funding threshold.
|
|
¡
|
|
If the ROE performance threshold is achieved and funding has been established, the Compensation Committee will, as it
deems appropriate, determine the extent of the award earned based on the Companys performance against the three-year annual average of its budgeted annual income from foreign exchange fees and credit card fees (
Selected Fee
Income
). The budgeted income targets shall be specified in the Companys overall annual budget as approved by the Board of Directors. The Compensation Committee determined Selected Fee Income as an additional PRSU performance metric
mainly due to the desire to diversify the Companys sources of income, in particular,
non-interest
income. Our foreign exchange and credit card-based businesses are key parts of our business targeted for
growth. For 2016, the Company achieved $172.4 million in Selected Fee Income, or 98% of the budgeted total.
|
|
|
|
|
|
|
|
|
|
|
|
2016
Results-to-date
(Year 1 of
3-Year
Performance Period):
|
Ranked in the 9th position against our 2016 Peer Group.
|
|
|
|
Achieved 98% of our Budgeted Selected Fee
Income.
|
|
|
|
|
|
Previously Granted PRSU Awards for Performance Period Ended in 2016
In 2014, our NEOs were granted PRSU awards subject to a single performance metric of relative TSR performance over a three-year
performance period (2014-2016). Upon completion of the performance period, the Compensation Committee determined that the Companys relative TSR performance ranked 5
th
against the applicable
2014 peer group (of 20 companies) and consequently, that the maximum award of 150% of the target PRSU awards were earned.
The awards were subject to a brief time-based vesting requirement, and were fully vested as of January 30, 2017.
|
|
|
|
|
1
|
TSR is measured based on the average closing stock price for the last two months of the applicable performance period
and the average closing stock price for the two months immediately preceding the performance period, with dividends reinvested.
|
38
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
O
THER
C
OMPENSATION
FOR
M
ARC
C
ADIEUX
|
In 2012 (before he was appointed as an executive officer), Mr. Cadieux was awarded a special
one-time,
long-term cash retention award of $300,000 (
Special Long-Term Cash Award
), which was subject to: (i) cliff vesting on June 30, 2016; (ii) continued employment and
(iii) other minimum performance conditions. During the 2012-2016 vesting period, the award was invested under the Deferred Compensation Plan (
DCP
) in accordance with the terms of the plan. On June 30, 2016,
Mr. Cadieux earned a total of $364,972, including his earnings under the DCP.
|
E
XECUTIVE
B
ENEFITS
AND
O
THER
E
XECUTIVE
C
OMPENSATION
-R
ELATED
M
ATTERS
|
Executive Benefits
Employee Retirement Benefits
Our NEOs are
eligible to participate in our SVB Financial Group 401(k) (
401(k) Plan
) and Employee Stock Ownership Plan (
ESOP
), our combined qualified retirement and profit sharing plan that is generally available to all of
the Companys U.S. employees. Our NEOs participate in the plan on the same terms as all other eligible employees. Other than our 401(k) Plan, we do not provide any pension, excess retirement or SERPs to our NEOs.
Under our 401(k) Plan, our U.S. employees, including our NEOs, may make voluntary
pre-tax
and/or Roth
post-tax
deferrals up to the maximum provided for by IRS regulations. The Company provides
dollar-for-dollar
matching
contributions up to a maximum of 5% of cash compensation or the Internal Revenue Section 401(a) compensation limit, whichever is less. Company 401(k) matching contributions vest immediately upon deposit into the individuals 401(k)
account.
The plan also includes a profit sharing component. Under the ESOP, we may make discretionary annual contributions for
U.S. employees, as determined by the Compensation Committee. ESOP contributions may be in the form of cash, the Companys common stock or a combination of both, and are subject to certain vesting conditions. Contributions are determined based
on the Companys performance and are not adjusted to reflect individual performance.
For 2016, the Compensation Committee
established performance criteria based on the Companys adjusted ROE against budget (same as the calculation of 2/3 of the total ICP pool) to fund the ESOP contribution, and set the funding level to 1.25% (reduced by 50% from the prior year as
part of our ongoing initiatives to reduce non-interest expenses) of eligible compensation based on target ROE performance. Despite a higher allowable maximum under the ESOP, the Compensation Committee has committed to a funding maximum of 5%. Based
on the Companys 2016 above-target ROE performance, the Compensation Committee approved a contribution of 1.4% of eligible compensation in cash (50%) and the Companys common stock (50%) for all eligible participants.
Deferred Compensation
We do not provide
NEOs with any Company-funded deferred compensation benefits. However, in order to help them achieve their retirement objectives, we offer each NEO the opportunity to
tax-defer
a portion of their income, beyond
what is allowed to be deferred in the Companys qualified retirement plan. Specifically, under our DCP, each individual may defer 5% to 50% of their base pay and 5% to 100% of eligible incentive payments during each plan year. The DCP is an
unfunded plan, and participating executives bear the risk of forfeiture in the event that we cannot fund DCP liabilities. We do not match executive deferrals to the DCP, nor do we make any other contributions to the DCP. See
Compensation
for Named Executive
OfficersNon-Qualified
Deferred Compensation
below
.
39
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
We establish and maintain a bookkeeping account for each participant that reflects
compensation deferrals made by the executive along with any associated earnings, expenses, gains and losses. The amount in a participants account is adjusted for hypothetical investment earnings or losses in an amount equivalent to the gains
or losses reported by the investment options selected by the participant from among the investment options designated for this purpose by the Company. A participant may, in accordance with rules and procedures we establish, change the investments to
be used for the purpose of calculating future hypothetical investment adjustments to the participants account. The account of each participant is adjusted each business day to reflect: (a) the hypothetical investment earnings and/or
losses described above; (b) participant deferrals; and (c) distributions or withdrawals from the account. Distributions or withdrawals from the DCP shall be made in full accordance with the requirements of Internal Revenue Code
Section 409A. Except in connection with Mr. Cadieuxs Special Long-Term Cash Award (see above), no NEOs participated in the DCP in 2016. Among the NEOs, Messrs. Becker and Cadieux held balances under the plan during 2016.
Health and Welfare Benefits/Time Away From Work
Our NEOs are eligible to participate in our standard health and welfare benefits program, which provides medical, dental, life,
accident and disability coverage to all of our eligible U.S.-based employees. We do not provide executives with any health and welfare benefits that are not generally available to other Company employees. Additionally, under our time away from
work policy, U.S. exempt employees, including our NEOs, do not accrue vacation benefits. Rather, such employees are expected to manage their time away from work, subject to the demands and needs of their jobs.
Non-exempt
U.S. employees and other
non-U.S.
employees continue to accrue vacation benefits formulaically.
Executive Termination Benefits
See
Compensation for Named Executive OfficersOther Post-Employment Payments
below
.
Perquisites
We do not have any executive perquisite programs. From time to time, on a limited or exception basis, we may provide other benefits
that we believe are related to, or serve, a business purpose. We disclose those benefits as required by applicable rules.
Stock Option and Other Equity
Practices
Grant Practices for Executive Officers
The Compensation Committee approved all equity grants in 2016 made to executive officers of the Company, except that the
independent members of the Board approved equity grants made to the Chief Executive Officer. Except for certain awards that we believe qualify as performance-based compensation under Section 162(m) of the Code (as defined below), annual equity
compensation grants to executives are typically made effective during the second quarter of the year. Grants are made effective during an open trading window pursuant to our Insider Trading Policy, with limited exceptions. The exercise price for
stock option grants is equal to the closing market price on the grants effective date and time-based grants typically have an annual vesting period of four years, subject to continued employment or service. All 2016 grants to our NEOs were
made in accordance with this practice.
For newly-hired executive officers, the Compensation Committee approves an equity grant
amount prior to, or shortly after, the executives start of employment, and the effective grant date is typically set during an open trading window after they commence employment. This approach ensures that the exercise price of stock options
reflects a fair market price, since the exercise price for stock option grants is equal to the closing market price on the grants effective date.
Grant
Practices for Other Employees
The Board has delegated authority to the Equity Awards Committee to make equity grants to
non-executive
employees under our 2006 Equity Incentive Plan. The Equity Awards Committee is a committee of two, comprised of our Chief Executive Officer and the Chair of our Board. The Equity Awards Committee may
not make equity grants to executives or any
non-executive
employee that reports directly to the Chief Executive Officer. The Equity Awards Committee may make grants only within established individual employee
and aggregate share limits and in accordance with established requirements regarding the term, vesting period, exercise price and other terms and conditions for the grant. In addition, all grants of stock options, stock appreciation rights, and
restricted stock units made by the Equity Awards Committee must be made (or become effective) on the first Monday of the month following approval or, where the first Monday is a Company-observed U.S. holiday, on the first
40
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
Tuesday of such month. The Equity Awards Committee approves grants on a quarterly basis, and must approve all grants in writing on or before the date of grant, subject to the respective employee
remaining an employee as of the date of grant. Finally, management updates the Compensation Committee regarding all grants made by the Equity Awards Committee on a regular basis. Any grant that does not meet the requirements established for the
Equity Awards Committee must be made by the Board, the Compensation Committee or other authorized committee.
The Compensation
Committee typically approves annual grants to all eligible employees, as well as any other grants that the Equity Awards Committee is not authorized to approve.
Prohibitions Against Hedging
Pursuant to
our Insider Trading Policy, our directors, executive officers (including our NEOs) and employees are not permitted to hedge ownership by selling puts in or selling short any of the Companys publicly-traded securities at any time.
Additionally, we discourage, and have not permitted, any of our executive officers to pledge, or use as collateral, our securities to secure personal loans or other obligations.
Compensation Recovery Policies
Except as noted below, our Compensation Committee has not yet adopted a policy with respect to whether we will make retroactive
adjustments to any cash or equity based incentive compensation paid to our NEOs or other employees where the payment was based on the achievement of financial results that were subsequently revised. Our Compensation Committee intends to adopt a
general compensation recovery policy after the SEC adopts final rules implementing the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In 2015, our Compensation Committee approved an amendment to
our 2006 Equity Incentive Plan to provide that equity awards granted under the 2006 Equity Incentive Plan will be subject to the terms and conditions of any compensation recovery policy adopted by the Company and as may be in effect from time to
time. The committee also approved a similar amendment to the Incentive Compensation Plan as it relates to incentive awards under the plan.
Section 162(m)
Section 162(m) of the
Internal Revenue Code of 1986, as amended (the
Code
) limits our deductibility of compensation paid to our CEO and each of the next three most highly compensated executive officers (excluding the Chief Financial Officer) in excess
of $1,000,000, but excludes performance-based compensation from this limit. We believe our stock options, as well as beginning for the year 2015, our executives PRSU awards, are designed to qualify as performance-based
compensation. However, in order to maintain flexibility and promote simplicity in the Compensation Committees administration of and oversight over executive compensation arrangements, other compensation arrangements, such as time-based
restricted stock units that vest based solely on continued service and ICP payments, are not designed to qualify as performance-based compensation. This design allows the Compensation Committee to balance tax deductibility with other
business priorities that affect stockholder value.
Compensation that we intend to qualify as performance-based under
Section 162(m) is also reviewed and approved by an independent committee of the Board of Directors, comprised of Mr. Dunbar, our Board Chair, and Mr. Robinson, our Audit Committee Chair and member of the Compensation Committee (the
162(m) Committee
).
41
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
Equity Ownership Guidelines for Executive Officers
The Company maintains stock
ownership guidelines for the Companys executive officers, including the NEOs. These stock ownership guidelines reflect the Boards belief in the importance of aligning the economic interests of stockholders and management. The
Compensation Committee is responsible for setting and periodically reviewing the guidelines. Guidelines for each executive position are determined based on factors including the executive role, scope of responsibilities, base salary levels, Company
stock price performance and market data. The current equity ownership guidelines applicable to executive officers are based on the value of the Companys common stock as a percentage of annual base salary, as follows:
|
|
|
|
|
|
|
Stock Value as Percentage of Annual Base
Salary
|
600%
|
|
300%
|
|
200%
|
Chief Executive Officer
|
|
Chief Credit Officer
Chief Digital Officer
Chief Financial Officer
Chief Operations Officer
|
|
Chief Risk Officer
Head of EMEA/President UK Branch
Head of Technology
Banking
|
|
Chief Information
Officer
Chief Marketing Officer
General
Counsel
Head of Human Resources
|
All executive officers have five years from the date on which they become an executive officer to
attain the minimum level of ownership.
The Governance Committee monitors compliance with these guidelines and reviews executive
equity holdings on a quarterly basis. In evaluating whether executives are meeting the ownership guidelines, the Governance Committee considers the following as shares owned: (1) shares actually held, (2) shares owned through investment in
the Companys stock fund in the SVB Financial Group 401(k) and Employee Stock Ownership Plan, and (3) earned but unvested awards of restricted stock awards and restricted stock units (subject to either time-based or performance-based
vesting). Neither vested nor unvested stock options count towards the ownership guidelines. Exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.
As of December 31, 2016, all of our NEOs executive officers were in compliance with the applicable ownership guidelines or
otherwise expected to achieve the requisite ownership levels within the designated five year time-frame.
42
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
COMPENSATION FOR NAMED EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2016, 2015 and 2014,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($) (1)
|
|
|
Stock
Awards
($) (2)
|
|
|
Stock
Option
Awards
($) (2)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($) (3)
|
|
|
All
Other
Compensation
($)(4)
|
|
|
Total
($)
|
|
Greg Becker
|
|
|
2016
|
|
|
|
925,904
|
|
|
|
-
|
|
|
|
2,225,746
|
|
|
|
807,501
|
|
|
|
1,148,750
|
|
|
|
17,879
|
|
|
|
5,125,780
|
|
President and Chief
|
|
|
2015
|
|
|
|
912,333
|
|
|
|
-
|
|
|
|
2,092,890
|
|
|
|
670,964
|
|
|
|
1,225,000
|
|
|
|
25,947
|
|
|
|
4,927,134
|
|
Executive Officer
|
|
|
2014
|
|
|
|
869,167
|
|
|
|
-
|
|
|
|
1,175,470
|
|
|
|
1,070,211
|
|
|
|
935,000
|
|
|
|
22,924
|
|
|
|
4,072,772
|
|
|
|
|
|
|
|
|
|
|
Michael Descheneaux
|
|
|
2016
|
|
|
|
602,308
|
|
|
|
-
|
|
|
|
861,541
|
|
|
|
312,566
|
|
|
|
625,000
|
|
|
|
53,977
|
|
|
|
2,455,392
|
|
Chief Financial Officer
|
|
|
2015
|
|
|
|
592,885
|
|
|
|
-
|
|
|
|
837,104
|
|
|
|
268,394
|
|
|
|
575,000
|
|
|
|
22,508
|
|
|
|
2,295,891
|
|
|
|
|
2014
|
|
|
|
520,833
|
|
|
|
600
|
|
|
|
517,225
|
|
|
|
470,896
|
|
|
|
425,000
|
|
|
|
21,347
|
|
|
|
1,955,901
|
|
|
|
|
|
|
|
|
|
|
Marc Cadieux
|
|
|
2016
|
|
|
|
447,308
|
|
|
|
364,972
|
|
|
|
430,727
|
|
|
|
156,283
|
|
|
|
375,000
|
|
|
|
17,093
|
|
|
|
1,791,383
|
|
Chief Credit Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John China
|
|
|
2016
|
|
|
|
498,385
|
|
|
|
-
|
|
|
|
538,395
|
|
|
|
195,346
|
|
|
|
525,000
|
|
|
|
19,424
|
|
|
|
1,776,550
|
|
Head of Technology
|
|
|
2015
|
|
|
|
479,308
|
|
|
|
-
|
|
|
|
456,520
|
|
|
|
146,366
|
|
|
|
525,000
|
|
|
|
24,383
|
|
|
|
1,631,577
|
|
Banking (5)
|
|
|
2014
|
|
|
|
437,500
|
|
|
|
600
|
|
|
|
282,044
|
|
|
|
256,837
|
|
|
|
380,000
|
|
|
|
21,890
|
|
|
|
1,378,871
|
|
|
|
|
|
|
|
|
|
|
Joan Parsons
|
|
|
2016
|
|
|
|
498,385
|
|
|
|
-
|
|
|
|
466,652
|
|
|
|
169,293
|
|
|
|
475,000
|
|
|
|
19,149
|
|
|
|
1,628,479
|
|
Credit Risk Manager
|
|
|
2015
|
|
|
|
479,308
|
|
|
|
-
|
|
|
|
456,520
|
|
|
|
146,366
|
|
|
|
425,000
|
|
|
|
23,680
|
|
|
|
1,530,874
|
|
(
Former Head of Specialty Banking)
(5)
|
|
|
2014
|
|
|
|
441,667
|
|
|
|
600
|
|
|
|
282,044
|
|
|
|
256,837
|
|
|
|
380,000
|
|
|
|
24,117
|
|
|
|
1,385,265
|
|
(1)
|
For Messrs. Descheneaux and China, and Ms. Parsons, the amounts reflect the value of a cash gift card given to
each such executive in 2014. In addition, for Mr. Cadieux, the amount reflects a
one-time
deferred retention incentive of $300,000 plus accrued interest of $64,972. The award was granted to
Mr. Cadieux in 2012 and became payable in June 2016.
|
(2)
|
Values indicated for equity awards reflect the fair value of grants made during the fiscal year. Such values were
computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (
ASC 718
). The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in
the note entitled Share-based Compensation in our audited financial statements included in our Annual Report on Form
10-K
for the applicable year. The amounts disclosed under the Stock
Awards column also include the fair value of grants of certain performance-based restricted stock unit awards reported based on achievement at target level. The aggregate maximum fair value of such awards, assuming the highest level of
achievement of the performance conditions, is 150% of the target level. For details of 2016 grants, see
Grants of Plan-Based Award
s below.
|
(3)
|
Non-Equity
Incentive Plan Compensation includes ICP Payments for each
executive.
|
(4)
|
The following table provides the amounts of other compensation, including perquisites, paid to, or on behalf of, our
NEOs during 2016 included in the All Other Compensation column. Perquisites and other personal benefits are valued on the basis of the aggregate incremental cost to the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greg
Becker
|
|
|
Michael
Descheneaux
|
|
|
Marc
Cadieux
|
|
|
John
China
|
|
|
Joan
Parsons
|
|
Imputed Income Tax Reimbursement (a)
|
|
$
|
703
|
|
|
$
|
12,206
|
|
|
$
|
-
|
|
|
$
|
2,325
|
|
|
$
|
2,050
|
|
ESOP Contribution
|
|
|
3,737
|
|
|
|
3,737
|
|
|
|
3,737
|
|
|
|
3,737
|
|
|
|
3,737
|
|
401(k) Match
|
|
|
13,439
|
|
|
|
13,365
|
|
|
|
13,356
|
|
|
|
13,362
|
|
|
|
13,362
|
|
Other (b)
|
|
|
-
|
|
|
|
24,669
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
17,879
|
|
|
$
|
53,977
|
|
|
$
|
17,093
|
|
|
$
|
19,424
|
|
|
$
|
19,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts represent reimbursement payments of income taxes incurred by our NEOs on imputed income. For 2016, such
imputed income was primarily associated with spousal travel and attendance to our business events where our NEOs spouses or significant others were invited, and expected, to attend. For Mr. Descheneaux, such imputed income was also
associated with personal security expenses incurred during international travel.
|
|
(b)
|
Amounts for Mr. Descheneaux represent personal security expenses incurred during international travel in an
amount of $23,832 and the cost of guest attendance at SVB events of $837.
|
(5)
|
In February 2017, Mr. Chinas title changed from Head of Relationship Banking to Head of Technology Banking. In
addition, Ms. Parsons served as Head of Specialty Banking during 2016 and was appointed to the
non-executive
position of Credit Risk Manager for the Companys global banking activities, effective
February 2017.
|
43
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
Grants of Plan-Based Awards
The following table sets forth
all plan-based awards, including equity awards and
non-equity
incentive awards, made to our NEOs during the year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
Committee or
Board
Approval
Date
|
|
Estimated Future Payouts
Under
Non-Equity Incentive Plan Awards
(1)
|
|
Estimated Future Payouts
Under Equity Incentive
Plan
Awards (2)
|
|
All Other
Stock
Awards;
Number
of Shares
of Stock
or
Units
(3)
|
|
All Other
Option
Awards;
Number of
Securities
Underlying
Options
|
|
Exercise
or Base
Price of
Option
Awards
|
|
Grant Date
Fair Value
of Stock
and Option
Awards(4)
|
Name
|
|
Grant Date
|
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
Greg Becker
|
|
February 16, 2016
|
|
February 16, 2016
|
|
|
|
-
|
|
|
|
|
925,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Greg Becker
|
|
February 16, 2016
|
|
February 16, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
8,333
|
|
|
|
|
16,666
|
|
|
|
|
24,999
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,456,775
|
|
Greg Becker
|
|
May 2, 2016
|
|
February 16, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
7,311
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
768,971
|
|
Greg Becker
|
|
May 2, 2016
|
|
February 16, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
24,951
|
|
|
|
|
105.18
|
|
|
|
|
807,501
|
|
Michael Descheneaux
|
|
February 9, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
420,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Michael Descheneaux
|
|
February 16, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
3,225
|
|
|
|
|
6,451
|
|
|
|
|
9,676
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
563,882
|
|
Michael Descheneaux
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,830
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
297,659
|
|
Michael Descheneaux
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
9,658
|
|
|
|
|
105.18
|
|
|
|
|
312,566
|
|
Marc Cadieux
|
|
February 9, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
225,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Marc Cadieux
|
|
February 16, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,612
|
|
|
|
|
3,225
|
|
|
|
|
4,837
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
281,897
|
|
Marc Cadieux
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,415
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
148,830
|
|
Marc Cadieux
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
4,829
|
|
|
|
|
105.18
|
|
|
|
|
156,283
|
|
John China
|
|
February 9, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
350,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
John China
|
|
February 16, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,016
|
|
|
|
|
4,032
|
|
|
|
|
6,048
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
352,437
|
|
John China
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,768
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
185,958
|
|
John China
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
6,036
|
|
|
|
|
105.18
|
|
|
|
|
195,346
|
|
Joan Parsons
|
|
February 9, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
350,000
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Joan Parsons
|
|
February 16, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,747
|
|
|
|
|
3,494
|
|
|
|
|
5,241
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
305,411
|
|
Joan Parsons
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,533
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
161,241
|
|
Joan Parsons
|
|
May 2, 2016
|
|
February 9, 2016
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
5,231
|
|
|
|
|
105.18
|
|
|
|
|
169,293
|
|
(1)
|
The ICP amounts represent target levels. There are no individual thresholds or maximum amounts.
|
(2)
|
For the performance-based restricted stock unit grants to the NEOs made in 2016, the performance achievement will be
determined as of December 31, 2018 for the 2016-2018 performance period based upon the performance criteria presented under
Compensation Discussion and Analysis-Equity Incentives
above.
|
(3)
|
The stock awards reported reflect restricted stock unit awards granted to each NEO.
|
(4)
|
The fair values reported above are also reported in the
Summary Compensation Table
under the
Stock Awards and Stock Option Awards columns. Amounts shown represent the grant date fair values of stock options and stock awards granted in the fiscal year indicated, which were computed in accordance with ASC Topic 718.
The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled
Share-based Compensation
of our audited financial statements included in our Annual Report on Form
10-K
for the applicable year.
|
Option Exercises and Stock Vested
The following table sets forth
the number of securities underlying equity awards that vested (in the case of restricted stock) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2016, and the value realized upon such vesting or
exercise.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
Name
|
|
Number of
Shares
Acquired on
Exercise
|
|
|
Value Realized
on Exercise
|
|
|
Number of
Shares
Acquired on
Vesting
|
|
|
Value Realized
on Vesting
|
|
Greg Becker
|
|
|
-
|
|
|
$
|
-
|
|
|
|
5,851
|
|
|
$
|
614,501
|
|
Michael Descheneaux
|
|
|
6,500
|
|
|
|
308,366
|
|
|
|
2,981
|
|
|
|
313,142
|
|
Marc Cadieux
|
|
|
4,000
|
|
|
|
348,345
|
|
|
|
2,060
|
|
|
|
218,112
|
|
John China
|
|
|
8,572
|
|
|
|
668,015
|
|
|
|
1,610
|
|
|
|
169,122
|
|
Joan Parsons
|
|
|
-
|
|
|
|
-
|
|
|
|
1,635
|
|
|
|
171,752
|
|
44
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
Outstanding Equity Awards at Fiscal Year End
The following tables set forth
all outstanding equity awards to the NEOs as of December 31, 2016. The exercise price for each of the stock option grants reported below is equal to the closing market price on the applicable grant date. The vesting schedule for each
outstanding equity award is provided in the footnotes to the table below. Outstanding stock awards are valued based upon the closing market price of our stock as of December 30, 2016, which was $171.66 per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
(# Exercisable)
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(# Unexercisable)
|
|
|
Equity
Incentive Plan
Awards;
Number
of
Securities
Underlying
Unexercised
Unearned
Options
|
|
|
Option
Exercise
Price
(per option)
|
|
|
Option Expiration
Date
|
|
|
Number of
Shares or
Units of
Stock
That Have
Not
Vested
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
|
|
|
Equity
Incentive Plan
Awards;
Number of
Unearned
Shares, Units
or Other
Rights That
Have
Not
Vested
|
|
|
Equity
Incentive Plan
Awards;
Market or
Payout Value
of Unearned
Shares,
Units,
or Other Rights
That Have Not
Vested
|
|
Greg Becker
|
|
|
13,894
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
60.37
|
|
|
|
April 27, 2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,200
|
(1)
|
|
$
|
377,652
|
|
|
|
|
19,511
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64.37
|
|
|
|
May 1, 2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,016
|
(2)
|
|
|
346,067
|
|
|
|
|
20,928
|
|
|
|
7,900
|
(1)
|
|
|
-
|
|
|
|
71.11
|
|
|
|
April 30, 2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,028
|
(3)
|
|
|
691,446
|
|
|
|
|
12,172
|
|
|
|
12,171
|
(2)
|
|
|
-
|
|
|
|
107.98
|
|
|
|
April 29, 2021
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,311
|
(4)
|
|
|
1,255,006
|
|
|
|
|
4,060
|
|
|
|
12,177
|
(3)
|
|
|
-
|
|
|
|
129.81
|
|
|
|
May 1, 2022
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,281
|
(5)
|
|
|
1,764,836
|
|
|
|
|
-
|
|
|
|
24,951
|
(4)
|
|
|
-
|
|
|
|
105.18
|
|
|
|
May 2, 2023
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16,500
|
(6)
|
|
|
2,832,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,999
|
(7)
|
|
|
4,291,328
|
|
Michael Descheneaux
|
|
|
6,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
60.37
|
|
|
|
April 27, 2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,225
|
(1)
|
|
$
|
210,284
|
|
|
|
|
11,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64.37
|
|
|
|
May 1, 2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
886
|
(2)
|
|
|
152,091
|
|
|
|
|
10,975
|
|
|
|
4,325
|
(1)
|
|
|
-
|
|
|
|
71.11
|
|
|
|
April 30, 2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,611
|
(3)
|
|
|
276,544
|
|
|
|
|
5,356
|
|
|
|
5,355
|
(2)
|
|
|
-
|
|
|
|
107.98
|
|
|
|
April 29, 2021
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,830
|
(4)
|
|
|
485,798
|
|
|
|
|
1,624
|
|
|
|
4,871
|
(3)
|
|
|
-
|
|
|
|
129.81
|
|
|
|
May 1, 2022
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,524
|
(5)
|
|
|
776,590
|
|
|
|
|
-
|
|
|
|
9,658
|
(4)
|
|
|
-
|
|
|
|
105.18
|
|
|
|
May 2, 2023
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,600
|
(6)
|
|
|
1,132,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,676
|
(7)
|
|
|
1,660,982
|
|
Marc Cadieux
|
|
|
2,600
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
49.18
|
|
|
|
April 30, 2017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
445
|
(1)
|
|
$
|
76,389
|
|
|
|
|
2,260
|
|
|
|
-
|
|
|
|
-
|
|
|
|
60.37
|
|
|
|
April 27, 2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
755
|
(8)
|
|
|
129,603
|
|
|
|
|
3,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64.37
|
|
|
|
May 1, 2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
370
|
(2)
|
|
|
63,514
|
|
|
|
|
2,663
|
|
|
|
887
|
(1)
|
|
|
-
|
|
|
|
71.11
|
|
|
|
April 30, 2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
673
|
(3)
|
|
|
115,527
|
|
|
|
|
2,240
|
|
|
|
2,239
|
(2)
|
|
|
-
|
|
|
|
107.98
|
|
|
|
April 29, 2021
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,415
|
(4)
|
|
|
242,899
|
|
|
|
|
679
|
|
|
|
2,037
|
(3)
|
|
|
-
|
|
|
|
129.81
|
|
|
|
May 1, 2022
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,891
|
(5)
|
|
|
324,609
|
|
|
|
|
-
|
|
|
|
4,829
|
(4)
|
|
|
-
|
|
|
|
105.18
|
|
|
|
May 2, 2023
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,760
|
(6)
|
|
|
473,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,837
|
(7)
|
|
|
830,319
|
|
John China
|
|
|
152
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
54.88
|
|
|
|
January 3, 2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
775
|
(1)
|
|
$
|
133,037
|
|
|
|
|
6,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64.37
|
|
|
|
May 1, 2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
483
|
(2)
|
|
|
82,912
|
|
|
|
|
6,450
|
|
|
|
2,150
|
(1)
|
|
|
-
|
|
|
|
71.11
|
|
|
|
April 30, 2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
878
|
(3)
|
|
|
150,717
|
|
|
|
|
2,922
|
|
|
|
2,920
|
(2)
|
|
|
-
|
|
|
|
107.98
|
|
|
|
April 29, 2021
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,768
|
(4)
|
|
|
303,495
|
|
|
|
|
886
|
|
|
|
2,656
|
(3)
|
|
|
-
|
|
|
|
129.81
|
|
|
|
May 1, 2022
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,467
|
(5)
|
|
|
423,485
|
|
|
|
|
-
|
|
|
|
6,036
|
(4)
|
|
|
-
|
|
|
|
105.18
|
|
|
|
May 2, 2023
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,600
|
(6)
|
|
|
617,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,048
|
(7)
|
|
|
1,038,200
|
|
Joan Parsons
|
|
|
171
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
45.53
|
|
|
|
October 26, 2017
|
|
|
|
-
|
|
|
|
-
|
|
|
|
675
|
(1)
|
|
$
|
115,871
|
|
|
|
|
1,750
|
|
|
|
-
|
|
|
|
-
|
|
|
|
60.37
|
|
|
|
April 27, 2018
|
|
|
|
-
|
|
|
|
-
|
|
|
|
483
|
(2)
|
|
|
82,912
|
|
|
|
|
4,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
64.37
|
|
|
|
May 1, 2019
|
|
|
|
-
|
|
|
|
-
|
|
|
|
878
|
(3)
|
|
|
150,717
|
|
|
|
|
4,700
|
|
|
|
2,350
|
(1)
|
|
|
-
|
|
|
|
71.11
|
|
|
|
April 30, 2020
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,533
|
(4)
|
|
|
263,155
|
|
|
|
|
2,922
|
|
|
|
2,920
|
(2)
|
|
|
-
|
|
|
|
107.98
|
|
|
|
April 29, 2021
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,467
|
(5)
|
|
|
423,485
|
|
|
|
|
886
|
|
|
|
2,656
|
(3)
|
|
|
-
|
|
|
|
129.81
|
|
|
|
May 1, 2022
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,600
|
(6)
|
|
|
617,976
|
|
|
|
|
-
|
|
|
|
5,231
|
(4)
|
|
|
-
|
|
|
|
105.18
|
|
|
|
May 2, 2023
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,241
|
(7)
|
|
|
899,670
|
|
(1)
|
Options and restricted stock unit awards scheduled to vest on April 30, 2017.
|
(2)
|
Options and restricted stock unit awards scheduled to vest with respect to
one-half
of the underlying shares on each of April 29, 2017 and 2018, respectively.
|
(3)
|
Options and restricted stock unit awards scheduled to vest with respect to
one-third
of the underlying shares on each of May 1, 2017, 2018 and 2019, respectively.
|
(4)
|
Options and restricted stock unit awards scheduled to vest with respect to
one-fourth
of the underlying shares on each of May 2, 2017, 2018, 2019 and 2020, respectively.
|
(5)
|
Performance-based restricted stock units vested at 150% of target on January 30, 2017.
|
(6)
|
Performance-based restricted stock units scheduled to vest on January 30, 2018 and reported at 150% of target assuming
the highest level of achievement of the performance conditions.
|
(7)
|
Performance-based restricted stock units scheduled to vest on January 30, 2019 and reported at 150% of target assuming
the highest level of achievement of the performance conditions.
|
(8)
|
Restricted stock units scheduled to vest on September 3, 2017.
|
45
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
Pension Benefits
We do not maintain any defined
benefit pension plans in which any of our executive officers participate.
Non-Qualified
Deferred Compensation
The following table sets forth
information about executive contributions to, earnings from, and distributions of
non-qualified
deferred compensation under our Deferred Compensation Plan. There were no above-market or preferential earnings
on any compensation that was deferred. We do not maintain any other
non-qualified
deferred compensation program for our NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last FY
|
|
|
Registrant
Contributions
in Last FY
|
|
|
Aggregate
Earnings
in Last FY
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
Aggregate
Balance at Last
December 31,
2016
|
|
Greg Becker (1)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
14,692
|
|
|
$
|
-
|
|
|
$
|
186,582
|
|
Michael Descheneaux
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Marc Cadieux
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
John China
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Joan Parsons
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
(1)
|
Mr. Becker elected to participate in the Deferred Compensation Plan in 2005. No additional contributions were made
during 2016. The amounts in the above table are not required to be, and are not, reflected in the Summary Compensation Table above.
|
Other
Post-Employment Payments
There are certain circumstances in which our NEOs may be entitled to post-employment payments, which are discussed in further detail
below:
Change in Control Severance Plan
Our Change in Control Severance Plan (the
Change in Control Plan
), as adopted in 2006 and amended from time to time,
provides a specified severance benefit to our executive officers in the event their employment is involuntarily terminated or they resign from such employment for a good reason following a change in control of the Company. Generally
under the plan,
good reason
is defined as the occurrence of any of the following events without the covered employees written consent: (i) a material, involuntary reduction in responsibilities, authorities or functions,
except in connection with a termination of employment for death, disability, retirement, fraud, misappropriation, embezzlement and other exclusions; (ii) a material reduction in base salary; (iii) a reduction in total compensation to less
than 85% of the amount provided for the last full calendar year; or (iv) a relocation of more than 50 miles. We adopted this plan in order to ensure that our executives remain incented to consider and, if it is determined by the Board or
stockholders (as appropriate) to be in our best interests, to act diligently to promote a change in the control of the Company. The plan does not provide for any 280G excise tax
gross-up
provisions.
We did not make any amendments or changes to the Change in Control Plan in 2016.
The Change in Control Plan provides for a cash severance payment equal to 300% of base salary and target ICP incentive for the Chief
Executive Officer, 200% of base salary and target ICP incentive for the Chief Financial Officer, the Banks President and the Chief Strategy Officer, as applicable, and 100% of base salary and target ICP incentive for the other executive
officers. In addition, it provides for up to 12 months of Company-paid COBRA medical, dental and vision coverage, full vesting of Company contributions to
tax-qualified
retirement plans and certain
outplacement services.
The circumstances that constitute a change in control are set forth in the Change in Control
Plan. Generally, a change in control includes a merger or consolidation, other than a merger or consolidation in which the owners of our voting securities own 50% or more of the voting securities of the surviving entity; a liquidation or
dissolution or the closing of the sale or other disposition of all or substantially all of our assets; an acquisition by any person, directly or indirectly, of 50% or more of our voting securities; and an acquisition by any person, directly or
indirectly, of 25% or more of our voting securities and, within 12 months of the occurrence of such event, a change in the composition of the Board occurs as a result of which 60% or fewer of the directors are incumbent directors.
46
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
Our Change in Control Plan includes a number of restrictive covenants that govern the
executives rights to receive benefits under the plan. Generally, unless we provide otherwise in writing, the executive must not directly or indirectly engage in, have any ownership in or participate in the financing, operation, management or
control of any person, firm, corporation or business that competes with us or our affiliates, or any of our customers or their affiliates for a period of (i) 18 months, in the case of the Chief Executive Officer (ii) 12 months, in the case of the
Chief Financial Officer, the Banks President and Chief Strategy Officer, as applicable and (iii) six months, in the case of other covered executives. In addition, unless we provide otherwise in writing, the executive may not directly or
indirectly solicit, recruit, otherwise hire or attempt to hire any of our employees or cause any such person to leave his or her employment during the periods described in the previous sentence. Finally, the executive must execute a general release
of claims in our favor covering all claims arising out of the executives involuntary termination of employment (as defined in the Change in Control Plan) and employment with us and our affiliates.
Any benefits payable to an executive under this plan are reduced by any severance benefits we may pay to that executive under any other
policy, plan, program or arrangement, including our Group Severance Benefit Policy.
Severance Benefit Policy
Our Severance Benefit Policy provides severance pay and benefits to eligible employees who are involuntarily terminated from employment
due to staff reduction, position elimination, closure of a business unit, organization restructuring or such other circumstances, as we deem appropriate for the payment of severance benefits. The policy is intended to promote our ability to modify
our workforce and structure, while providing a reasonable level of certainty and job security to our employees. The policy covers all regular full-time and part-time employees, including the NEOs.
The Severance Benefit Policy provides for a cash severance payment based on
job-level.
For
NEOs, this benefit is equal to six weeks pay per year of service including a
pro-rata
amount for each partial year worked, with a minimum benefit of six months pay and a maximum benefit of
one years pay. In addition, under the policy, we continue to make
co-payments
for COBRA medical, dental, and vision coverage during the severance pay period and pay designated outplacement services
provided by a Company-selected external vendor. Any benefits payable to an executive under this policy are reduced by any severance benefits we pay to that executive under any other policy, plan, program, or arrangement, including our Change in
Control Plan discussed above.
2006 Equity Incentive Plan
Our 2006 Equity Incentive Plan, in which the NEOs participate, provides for full vesting of outstanding awards in the event of a change
in control (as defined in the plan) of the Company in the event that a successor corporation does not assume or substitute an equivalent option or right for the original equity awards under the plan. In addition, effective as of January 7,
2015, we amended the equity awards agreements under the plan to provide for certain vesting of outstanding awards upon the termination of a participants employment due to death or disability as follows: (i) full vesting of any outstanding
stock option awards, restricted stock unit awards subject to time-based vesting, restricted stock awards and stock appreciation rights awards; and
(ii) pro-rated
vesting for any outstanding restricted
stock unit awards subject to performance conditions based on the level of achievement of the applicable performance conditions as of the date of termination. These changes apply to all outstanding awards on a retrospective basis, as well as to any
new grants made under the applicable amended form of award agreement on a prospective basis.
47
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
Payments upon Termination of Employment
The following tables summarize
the payments that would be payable to our NEOs, as of December 31, 2016, in the event of various termination scenarios, including voluntary resignation, involuntary termination for cause, involuntary termination (not for cause), involuntary
termination for good reason or after a change in control, death and disability.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GREG BECKER, PRESIDENT AND CHIEF EXECUTIVE OFFICER
|
|
Compensation and Benefits
|
|
Voluntary
Resignation
(including
Retirement)
|
|
|
Involuntary
Termination
for Cause
|
|
|
Involuntary
Termination
(Not for
Cause)
(1)
|
|
|
Involuntary or for
Good Reason After
Change-in-Control
(2)
|
|
Death
|
|
Disability
|
Cash severance pay
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
925,000
|
|
|
$
|
5,550,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Market value of vested, exercisable stock options (3)
|
|
|
6,688,933
|
|
|
|
-
|
|
|
|
6,688,933
|
|
|
|
6,688,933
|
|
|
|
6,688,933
|
|
|
|
6,688,933
|
|
Market value of unvested stock options which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,737,744
|
|
|
|
3,737,744
|
|
|
|
3,737,744
|
|
Market value of unvested restricted stock which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,184,153
|
(5)
|
|
|
6,649,593
|
(6)
|
|
|
6,649,593
|
(6)
|
Company-paid health benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
13,258
|
|
|
|
13,502
|
|
|
|
-
|
|
|
|
-
|
|
Accelerated retirement plan vesting
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Company-paid outplacement benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
-
|
|
|
|
-
|
|
Deferred Compensation Plan balance payable (7)
|
|
|
186,582
|
|
|
|
186,582
|
|
|
|
186,582
|
|
|
|
186,582
|
|
|
|
186,582
|
|
|
|
186,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
6,875,515
|
|
|
$
|
186,582
|
|
|
$
|
7,833,773
|
|
|
$
|
25,380,914
|
|
|
$
|
17,262,852
|
|
|
$
|
17,262,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary Termination (Not for Cause) are calculated based on the terms of our U.S. Severance Benefit Policy.
|
(2)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary or for Good Reason After
Change-in-Control
are calculated based on the terms of our Change in Control Severance Plan for Executives. Consistent
with that plan, amounts reported are calculated assuming no tax adjustment. Under our 2006 Equity Incentive Plan, if outstanding equity awards are not assumed or substituted by the successor of the Company upon a
change-in-control
event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted.
|
(3)
|
The market value of vested, exercisable stock options is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(4)
|
The market value of unvested equity that would vest is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(5)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $2,670,171 and
(ii) the market value of performance-based restricted stock unit awards of $6,513,982 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
(6)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $2,670,171 and
(ii) the market value of performance-based restricted stock unit awards of $3,979,422 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
(7)
|
Deferred Compensation Plan balance for Mr. Becker reflects account balance as of December 31, 2016.
Mr. Becker is entitled to receive his account balance under each of the termination scenarios, to be paid in accordance with the plan and Mr. Beckers payment election.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MICHAEL DESCHENEAUX, CHIEF FINANCIAL OFFICER
|
|
Compensation and Benefits
|
|
Voluntary
Resignation
(including
Retirement)
|
|
|
Involuntary
Termination
for Cause
|
|
|
Involuntary
Termination
(Not for
Cause)
(1)
|
|
|
Involuntary or
for
Good Reason
After
Change-in-
Control
(2)
|
|
Death
|
|
Disability
|
Cash severance pay
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
600,000
|
|
|
$
|
2,040,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Market value of vested, exercisable stock options (3)
|
|
|
3,403,417
|
|
|
|
-
|
|
|
|
3,403,417
|
|
|
|
3,403,417
|
|
|
|
3,403,417
|
|
|
|
3,403,417
|
|
Market value of unvested stock options which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,621,800
|
|
|
|
1,621,800
|
|
|
|
1,621,800
|
|
Market value of unvested restricted stock which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,763,989
|
(5)
|
|
|
2,774,712
|
(6)
|
|
|
2,774,712
|
(6)
|
Company-paid health benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
20,628
|
|
|
|
21,007
|
|
|
|
-
|
|
|
|
-
|
|
Accelerated retirement plan vesting
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Company-paid outplacement benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
-
|
|
|
|
-
|
|
Deferred Compensation Plan balance payable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
3,403,417
|
|
|
$
|
-
|
|
|
$
|
4,031,545
|
|
|
$
|
10,857,713
|
|
|
$
|
7,799,929
|
|
|
$
|
7,799,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary Termination (Not for Cause) are calculated based on the terms of our U.S. Severance Benefit Policy.
|
(2)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary or for Good Reason After
Change-in-Control
are calculated based on the terms of our Change in Control Severance Plan for Executives. Consistent
with that plan, amounts reported are calculated assuming no tax adjustment. Under our 2006 Equity Incentive Plan, if outstanding equity awards are not assumed or substituted by the successor of the Company upon a
change-in-control
event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted.
|
(3)
|
The market value of vested, exercisable stock options is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
48
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
(4)
|
The market value of unvested equity that would vest is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(5)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $1,124,716 and
(ii) the market value of performance-based restricted stock unit awards of $2,639,273 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
(6)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $1,124,716 and
(ii) the market value of performance-based restricted stock unit awards of $1,649,996 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARC CADIEUX, CHIEF CREDIT OFFICER
|
|
Compensation and Benefits
|
|
Voluntary
Resignation
(including
Retirement)
|
|
|
Involuntary
Termination
for Cause
|
|
|
Involuntary
Termination
(Not for
Cause)
(1)
|
|
|
Involuntary or for
Good Reason
After
Change-in-
Control
(2)
|
|
Death
|
|
Disability
|
Cash severance pay
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
450,000
|
|
|
$
|
675,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Market value of vested, exercisable stock options (3)
|
|
|
1,395,031
|
|
|
|
-
|
|
|
|
1,395,031
|
|
|
|
1,395,031
|
|
|
|
1,395,031
|
|
|
|
1,395,031
|
|
Market value of unvested stock options which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
638,048
|
|
|
|
638,048
|
|
|
|
638,048
|
|
Market value of unvested restricted stock which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,821,999
|
(5)
|
|
|
1,347,874
|
(6)
|
|
|
1,347,874
|
(6)
|
Company-paid health benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
21,142
|
|
|
|
21,532
|
|
|
|
-
|
|
|
|
-
|
|
Accelerated retirement plan vesting
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Company-paid outplacement benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
-
|
|
|
|
-
|
|
Deferred Compensation Plan balance payable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
1,395,031
|
|
|
$
|
-
|
|
|
$
|
1,873,673
|
|
|
$
|
4,559,110
|
|
|
$
|
3,380,953
|
|
|
$
|
3,380,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary Termination (Not for Cause) are calculated based on the terms of our U.S. Severance Benefit Policy.
|
(2)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary or for Good Reason After
Change-in-Control
are calculated based on the terms of our Change in Control Severance Plan for Executives. Consistent
with that plan, amounts reported are calculated assuming no tax adjustment. Under our 2006 Equity Incentive Plan, if outstanding equity awards are not assumed or substituted by the successor of the Company upon a
change-in-control
event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted.
|
(3)
|
The market value of vested, exercisable stock options is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(4)
|
The market value of unvested equity that would vest is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(5)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $627,932 and
(ii) the market value of performance-based restricted stock unit awards of $1,194,067 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
(6)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $627,932 and
(ii) the market value of performance-based restricted stock unit awards of $719,942 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JOHN CHINA, HEAD OF TECHNOLOGY BANKING
|
|
Compensation and Benefits
|
|
Voluntary
Resignation
(including
Retirement)
|
|
|
Involuntary
Termination
for Cause
|
|
|
Involuntary
Termination
(Not for
Cause)
(1)
|
|
|
Involuntary or for
Good Reason
After
Change-in-
Control
(2)
|
|
Death
|
|
Disability
|
Cash severance pay
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
500,000
|
|
|
$
|
850,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Market value of vested, exercisable stock options (3)
|
|
|
1,597,564
|
|
|
|
-
|
|
|
|
1,597,564
|
|
|
|
1,597,564
|
|
|
|
1,597,564
|
|
|
|
1,597,564
|
|
Market value of unvested stock options which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
914,555
|
|
|
|
914,555
|
|
|
|
914,555
|
|
Market value of unvested restricted stock which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,197,763
|
(5)
|
|
|
1,599,357
|
(6)
|
|
|
1,599,357
|
(6)
|
Company-paid health benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
20,628
|
|
|
|
21,007
|
|
|
|
-
|
|
|
|
-
|
|
Accelerated retirement plan vesting
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Company-paid outplacement benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
-
|
|
|
|
-
|
|
Deferred Compensation Plan balance payable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
1,597,564
|
|
|
$
|
-
|
|
|
$
|
2,125,692
|
|
|
$
|
5,588,389
|
|
|
$
|
4,111,476
|
|
|
$
|
4,111,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary Termination (Not for Cause) are calculated based on the terms of our U.S. Severance Benefit Policy.
|
(2)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary or for Good Reason After
Change-in-Control
are calculated based on the terms of our Change in Control Severance Plan for Executives. Consistent
with that plan, amounts reported are calculated assuming no tax adjustment. Under our 2006 Equity Incentive Plan, if outstanding equity awards are not assumed or substituted by the successor of the Company upon a
change-in-control
event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards have not been assumed or substituted.
|
49
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
(3)
|
The market value of vested, exercisable stock options is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(4)
|
The market value of unvested equity that would vest is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(5)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $670,161 and
(ii) the market value of performance-based restricted stock unit awards of $1,527,602 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
(6)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $670,161 and
(ii) the market value of performance-based restricted stock unit awards of $929,196 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JOAN PARSONS, CREDIT RISK MANAGER (FORMER HEAD OF SPECIALTY BANKING)
|
|
Compensation and Benefits
|
|
Voluntary
Resignation
(including
Retirement)
|
|
|
Involuntary
Termination
for Cause
|
|
|
Involuntary
Termination
(Not for
Cause)
(1)
|
|
|
Involuntary or for
Good Reason
After
Change-in-
Control
(2)
|
|
Death
|
|
Disability
|
Cash severance pay
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
500,000
|
|
|
$
|
850,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Market value of vested, exercisable stock options (3)
|
|
|
1,405,939
|
|
|
|
-
|
|
|
|
1,405,939
|
|
|
|
1,405,939
|
|
|
|
1,405,939
|
|
|
|
1,405,939
|
|
Market value of unvested stock options which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
881,149
|
|
|
|
881,149
|
|
|
|
881,149
|
|
Market value of unvested restricted stock which would vest (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,047,904
|
(5)
|
|
|
1,510,952
|
(6)
|
|
|
1,510,952
|
(6)
|
Company-paid health benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
15,110
|
|
|
|
15,389
|
|
|
|
-
|
|
|
|
-
|
|
Accelerated retirement plan vesting
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Company-paid outplacement benefits
|
|
|
-
|
|
|
|
-
|
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
-
|
|
|
|
-
|
|
Deferred Compensation Plan balance payable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
1,405,939
|
|
|
$
|
-
|
|
|
$
|
1,928,549
|
|
|
$
|
5,207,881
|
|
|
$
|
3,798,040
|
|
|
$
|
3,798,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under
Involuntary Termination (Not for Cause) are calculated based on the terms of our U.S. Severance Benefit Policy.
|
(2)
|
Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under Involuntary or
for Good Reason After
Change-in-Control
are calculated based on the terms of our Change in Control Severance Plan for Executives. Consistent with that plan, amounts
reported are calculated assuming no tax adjustment. Under our 2006 Equity Incentive Plan, if outstanding equity awards are not assumed or substituted by the successor of the Company upon a
change-in-control
event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards have not been assumed or substituted.
|
(3)
|
The market value of vested, exercisable stock options is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(4)
|
The market value of unvested equity that would vest is calculated assuming a market value of $171.66 per share (the
closing stock price as of December 30, 2016).
|
(5)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $612,655 and
(ii) the market value of performance-based restricted stock unit awards of $1,435,249 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
(6)
|
The amount reported is comprised of (i) the market value of unvested restricted stock of $612,655 and
(ii) the market value of performance-based restricted stock unit awards of $898,297 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at
target level). See
Other Post-Employment Payments 2006 Equity Incentive Plan
above.
|
50
|
|
|
|
|
EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
SECURITY OWNERSHIP INFORMATION
Proposal No. 4
ADVISORY VOTE ON THE FREQUENCY OF FUTURE SAY ON PAY VOTES
The Board of Directors Recommends a Vote
FOR
the Frequency of our Say on Pay votes on an ANNUAL Basis
The Dodd-Frank Wall Street Reform and Consumer Protection Act provides stockholders with the opportunity to vote on how frequently we
should seek an advisory vote, or Say on Pay, on the compensation of our NEOs, as disclosed pursuant to applicable SEC rules. Stockholders may indicate on a
non-binding,
advisory basis whether they prefer an
advisory vote on NEO compensation on an annual (every one year), biennial (every two years) or triennial (every three years) basis.
After consideration of this proposal, our Board of Directors has determined that an annual Say on Pay advisory vote remains the most
appropriate for the stockholders of the Company. Our Board values the opinions of our stockholders and believes that an annual advisory vote will continue to allow our stockholders to provide us with their direct input on our executive compensation
program for our NEOs.
Accordingly, we ask our stockholders to indicate their preferred voting frequency by choosing the option of
an annual advisory vote (every year), a biennial advisory vote (every two years) or a triennial advisory vote (every three years) or by choosing to abstain from voting on this proposal.
Because your vote is advisory, it will not be binding upon the Board and may not be construed as overruling any decision by the Board.
However, the Board will take into account the outcome of the vote when considering how frequently to submit an advisory Say on Pay proposal for stockholder approval.
54
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|
|
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OTHER PROXY PROPOSALS
Say on Pay
Proposals
|
MEETING AND OTHER INFORMATION
INFORMATION ABOUT VOTING AND PROXY SOLICITATION
Voting
Holders of our common stock are entitled to one vote for each share held on all matters covered by this Proxy Statement, except for the
election of directors. With respect to the election of directors, each stockholder has the right to invoke cumulative voting, which entitles each stockholder to as many votes as equal the number of shares held by such stockholder, multiplied by the
number of directors to be elected. Accordingly, you may cast all of your votes for a single candidate or distribute your votes among as many of the candidates as you choose, up to a maximum of the number of directors to be elected. However, no
stockholder will be entitled to cumulate votes for a candidate unless such candidate has been properly nominated prior to the voting in accordance with Article Fifth of the Restated Certificate of Incorporation of the Company and the stockholder (or
any other stockholder) has given notice at the meeting prior to the voting of the stockholders intention to cumulate votes. If any stockholder has given such notice, all stockholders may cumulate their votes for candidates properly placed in
nomination. If cumulative voting is properly invoked, the Proxy holders (the individuals named on the Proxy Card) are given discretionary authority under the terms of the Proxy to cumulate votes represented by shares for which they are named Proxy
holders as they see fit among the nominees in order to assure the election of as many of such nominees as possible.
Whether you
hold shares in your name or through a broker, bank or other nominee, you may vote without attending the Annual Meeting. You may vote by granting a Proxy or, for shares held through a broker, bank or other nominee, by submitting voting instructions
to that nominee. Instructions for voting by telephone, by using the Internet or by mail are on your Proxy Card or
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
, as applicable. For shares
held through a broker, bank or other nominee, follow the voting instructions included with your materials. If you provide specific voting instructions, your shares will be voted as you have instructed for each proposal enumerated in this Proxy
Statement and as the Proxy Holders may determine within their discretion for any other matters that properly come before the meeting.
If you hold shares in your name and you sign and return a Proxy Card without giving specific voting instructions, your shares will be
voted as recommended by our Board on all matters set forth in this Proxy Statement and as the Proxy holders may determine in their discretion with respect to any other matters that properly come before the meeting. If you hold your shares through a
broker, bank or other nominee and you do not provide instructions on how to vote, your broker or other nominee may have authority to vote your shares on certain matters. See
Quorum; Abstentions; Broker
Non-Votes
below
.
Quorum; Abstentions; Broker
Non-Votes
The required quorum
for the transaction of business at the Annual Meeting is a majority of the shares of Common Stock issued and outstanding on the Record Date. Shares voted are treated as being present at the Annual Meeting for purposes of establishing a quorum and
are treated as shares present at the Annual Meeting with respect to such matter.
Except in the case of the election of directors
and the advisory approval on Say on Pay frequency as described above, adoption of the proposals requires the affirmative vote the holders of a majority of the Common Stock represented and entitled to vote on the matter. This means that of the shares
represented at the Annual Meeting and entitled to vote, a majority of them must be voted for the proposal for it to be approved. Abstentions will be deemed present for purposes of determining a quorum for the transaction of business and
abstentions will have the same effect as a vote against the proposal, except for the election directors and the advisory approval on Say on Pay frequency.
Broker
non-votes
occur on a matter when a broker, bank or other nominee is not permitted to
vote on that matter without instructions from the beneficial owner and the beneficial owner does not give instructions. Without such voting instructions, for example, your broker or other nominee cannot vote your shares on
non-routine
matters such as the election of directors, and the advisory votes on Say on Pay and Say on Pay Frequency. Your broker or other nominee may, however, have discretion to vote your shares on
routine matters, such as the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our 2017 fiscal year. Broker
non-votes
will be counted for purposes
of determining the presence of a quorum for the transaction of business but will not be counted for purposes of determining the number of the votes represented and entitled to vote with respect to proposals on which brokers, banks or other nominees
are prohibited from exercising their discretionary authority.
55
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|
|
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|
MEETING & OTHER INFORMATION
Voting And Proxy Solicitation
|
Voting Required
The vote required for each
proposal and the effect of uninstructed shares and abstentions on each proposal is as follows:
|
|
|
|
|
|
|
|
|
Proposal
|
|
Vote Required
|
|
Broker Non-
Votes
Allowed
|
|
Abstentions
|
|
You
May Vote
|
|
|
|
|
|
Proposal No. 1
- Election of Directors
|
|
Plurality of Votes Cast*
|
|
No
|
|
No Effect
|
|
FOR or WITHHOLD
|
|
|
|
|
|
Proposal No. 2
- Ratification of Auditors
|
|
Majority of Votes Present and Entitled to Vote
|
|
Yes
|
|
Vote Against
|
|
FOR, AGAINST or ABSTAIN
|
|
|
|
|
|
Proposal No.
3
- Advisory Vote on Say on Pay
|
|
Majority of Votes Present and Entitled to Vote
|
|
No
|
|
Vote Against
|
|
FOR, AGAINST or ABSTAIN
|
|
|
|
|
|
Proposal No.
4 -
Advisory approval on Say on Pay Frequency
|
|
Most FOR Votes Cast
|
|
No
|
|
No Effect
|
|
1, 2, or 3 YEARS or ABSTAIN
|
* See
Proposal No.
1 Election of Directors
.
Revocability of Proxies
Any person giving a Proxy in the form accompanying this Proxy Statement has the power to revoke the Proxy at any time prior to its use.
A Proxy is revocable prior to the Annual Meeting by delivering either a written instrument revoking it or a duly executed Proxy bearing a later date to our Corporate Secretary. A Proxy is also automatically revoked if the stockholder is present at
the Annual Meeting and votes in person.
Solicitation
This solicitation of Proxies
is made by, and on behalf of, our Board. We will bear the entire cost of preparing, assembling, printing, mailing and otherwise making available Proxy materials furnished by the Board to stockholders. Copies of Proxy materials will be furnished to
brokerage houses, fiduciaries and custodians to be forwarded to the beneficial owners of our Common Stock, as requested. In addition to the solicitation of Proxies by mail, some of our officers, directors and employees may (without additional
compensation) solicit Proxies by telephone or personal interview, the costs of which we will bear.
Unless otherwise instructed,
each valid returned Proxy that is not revoked will be voted:
|
|
|
FOR each of our nominees to the Board of Directors,
|
|
|
|
FOR ratification of the appointment of KPMG LLP as our independent registered public accounting firm for
our fiscal year ending December 31, 2017,
|
|
|
|
FOR approval, on an advisory basis, of our executive compensation (
Say on Pay
),
|
|
|
|
Approval, on an advisory basis, of the frequency of future Say on Pay votes to be held ANNUALLY, and
|
|
|
|
At the Proxy holders discretion on such other matters, if any, as may properly come before the Annual Meeting
(including any proposal to adjourn the Annual Meeting).
|
Delivery of Proxy Materials
In accordance with the rules
adopted by the SEC, commonly referred to as Notice and Access, we have decided to provide access to our Proxy materials over the Internet instead of mailing a printed copy of the materials to every stockholder. We believe this helps to
promote more cost-effective and efficient delivery of our Proxy materials to stockholders while reducing our environmental impact. As a result, you will not receive printed copies of the Proxy materials unless you request them. Instead, a Notice
Regarding the Availability of Proxy Materials (the
Notice
) was mailed to stockholders of record (other than stockholders
56
|
|
|
|
|
MEETING & OTHER INFORMATION
Voting And Proxy Solicitation
|
who previously requested electronic or paper delivery of proxy materials) on or about March 9, 2017. The Notice explains the process to access and review the information contained in the
Proxy materials and how to vote proxies over the Internet. In addition, the Notice will provide you the option to instruct us to send our future Proxy materials to you electronically by email. You may also access the Proxy materials on the website
referred to in the Notice or request to receive a printed set of the Proxy materials.
If you will receive printed copies of the
Proxy materials, you may receive more than one set of materials, including multiple copies of this Proxy Statement and multiple Proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may
receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one Proxy Card. Please follow the
instructions on your Proxy Card(s) and vote accordingly.
How to Obtain a Separate Set of Proxy Materials
You may request to receive
Proxy materials in printed form by mail or electronically by email on an ongoing basis. If you sign up to receive Proxy materials electronically, you will receive an email with links to the materials. If you choose to receive future Proxy materials
by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy-voting site. Your election to receive Proxy materials by email will remain in effect until you terminate it.
If you share an address with another stockholder, you may receive only one set of Proxy materials (including our 2016 Annual Report on
Form 10-K,
Proxy Statement or Notice Regarding the Availability of Proxy Materials, as applicable) unless you have provided contrary instructions. If you wish to receive a separate set of Proxy materials now or
in the future, you may write or call us to request a separate copy of these materials from:
SVB Financial Group
3003 Tasman Drive
Santa Clara, California 95054
Attention: Corporate Secretary
Telephone:
(408) 654-7400
Facsimile: (408)
969-6500
Email: bod@svb.com
Similarly, if
you share an address with another stockholder and have received multiple copies of our Proxy materials, you may write or call us at the above address and phone number to request delivery of a single copy of these materials.
57
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|
|
|
|
MEETING & OTHER INFORMATION
Voting And Proxy Solicitation
|