PRE
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☒ Preliminary Proxy
Statement ☐
Confidential,for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
☐ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to § 240.14a-12
SVB FINANCIAL GROUP
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ No fee required.
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a-6(i)(1) and 0-11.
Notice of 2023 Annual Meeting
of Stockholders
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DATE
April 27, 2023
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TIME
3:00 PM Pacific Time
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ACCESS
Virtual1
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RECORD DATE
February 28, 2023
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Dear Stockholders:
We are pleased to invite you to attend the 2023 Annual Meeting of
Stockholders of SVB Financial Group ("SVB" or the “Company”).
Similar to last year, the meeting will be held
virtually.
The items of business at this year’s meeting, as more fully
described in the Proxy Statement, are as follows:
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01 |
Elect the 12 directors named in the Proxy
Statement;
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02 |
Approve the Company's Second Amended and Restated Certificate of
Incorporation to update the exculpation provision to align with
Delaware law;
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03 |
Vote on an advisory resolution to approve our executive
compensation (“Say on Pay”);
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04 |
Vote on an advisory resolution to approve the frequency of future
Say on Pay votes ("Say on Frequency");
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05 |
Approve the Company's Amended and Restated 2006 Equity Incentive
Plan to increase the number of shares reserved for issuance
thereunder;
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06 |
Ratify the appointment of KPMG LLP as our independent registered
public accounting firm for our fiscal year 2023;
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07 |
Vote on a stockholder proposal, if properly presented at the
meeting; and
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08 |
Transact such other business as may properly come before the
meeting.
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1 The
meeting will be held solely by means of remote communications at
www.virtualshareholdermeeting.com/SIVB2023. You will need your
control number to participate, vote or ask questions during the
virtual meeting. Your control number can be found on your proxy
card, voting instruction form or other notices sent to you.
Instructions for participation, voting and asking questions will be
available on the meeting website on the meeting date. Those without
a control number may attend as guests of the meeting, but they will
not have the option to vote their shares or ask questions during
the meeting. Following the meeting, we may post appropriate
questions received during the meeting and the Company’s answers on
our website.
Your vote is very important.
To assure your representation at the meeting, we encourage you to
vote your shares as soon as possible. This Notice and the Proxy
Statement provide instructions on how you can vote your shares
online or by telephone, or if you have received a printed copy of
the proxy materials and a proxy card, by mail. You may attend the
meeting and vote remotely even if you have previously voted by
proxy.
You are entitled to vote at this year’s meeting (or any
postponement or adjournment thereof) if you are a stockholder of
record at the close of business on February 28, 2023.
Thank you for your continued support of SVB Financial
Group.
By Order of the Board of Directors,
/s/ Beverly Kay Matthews
Beverly Kay Matthews
Chair
of the Board
Santa Clara, California
March [ ], 2023
Table of Contents
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Proposal
No. 2 –
Approval
of Second Amended and Restated Certificate of
Incorporation
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2022 Performance and Proxy Statement Summary
This summary highlights our 2022 performance, as well as
information contained elsewhere in this Proxy Statement. This
summary does not contain all of the information that you should
consider, and you should review this entire Proxy Statement, as
well as our Annual Report on Form 10-K for the year ended December
31, 2022.
2022 Financials
In 2022, we delivered a healthy year of financial performance
despite market challenges. Selected highlights are set forth
below:
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Return on Equity |
Earnings Per Share |
Net Income |
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Millions |
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Period-End Assets |
Avg. Client Funds |
Average Loans |
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Billions; as of 12/31 |
Billions |
Billions |
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n
Client Investment Funds
n
Deposits
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SVB 2023 PROXY STATEMENT |
1
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
2022 Performance Highlights
We continued to execute on our strategy and vision in 2022. In
particular:
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We
maintained
healthy activity across our client base,
despite the impact of challenging market conditions on our growth.
We experienced strong loan growth across all categories, with near
record Global Funds Banking loan term sheets outstanding at
year-end.
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We
effectively leveraged our flexible liquidity strategy
to sustain overall healthy client fund levels, despite balance
sheet pressures from declining deposits, elevated client cash burn,
and overall market environment challenges.
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Due to the continuing success and growth of our UK banking
business, we
established SVB UK
as a standalone, independently-capitalized subsidiary.
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We
continued to augment our capabilities at SVB Private and SVB
Securities,
appointing new leadership* at SVB Private to oversee our
go-to-market strategy and our efforts to create a premier private
banking and wealth management platform, and continuing to expand
and deepen the expertise offered by SVB Securities through key
hires.
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We
hired key leaders,
including a new Chief Human Resources Officer to enable us to
continue growing our business and developing our workforce with an
emphasis on our values, and a new Chief Risk Officer to lead our
efforts to build and scale our risk management capabilities through
our next phase of growth.
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We
continued to reinforce and increase our ESG
commitment,
reporting and disclosures, including by expanding our Access to
Innovation platform and announcing an equity audit of
Access-related initiatives, donating approximately $20 million
through our philanthropic programs, making sustainable finance and
carbon-neutral operations commitments and releasing our first
formal ESG Report.
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We
delivered record core fee income
in 2022, reflecting 57% growth year over year.
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We
maintained solid credit quality,
with relatively low net charge-offs and non-performing loans that
were within our original guidance range.
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We
effectively implemented our client acquisition
strategy,
adding approximately 6,800 new commercial clients during
2022.
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*Pending
regulatory approval; in December 2022, we announced the appointment
of: (i) Erin Platts, our current CEO of Silicon Valley Bank UK and
Head of EMEA, to become the President of SVB Private, and (ii)
David Sabow, our current Head of Technology and Healthcare Banking,
to succeed Ms. Platts.
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2
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Annual Meeting Details and Ways to Vote
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DATE
April 27, 2023
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TIME
3:00 PM Pacific Time
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ONLINE
At proxyvote.com
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BY PHONE
At the number included on your proxy card
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ACCESS
Virtual Meeting
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RECORD DATE
February 28, 2023
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BY MAIL
By returning your proxy card
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IN MEETING
During the virtual meeting
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Recommendations for Voting
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Proposals |
Board Voting Recommendation |
Page |
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01 |
Election of 12 directors
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FOR
each nominee
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02 |
Approval of Second Amended and Restated Certificate of
Incorporation
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FOR |
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03 |
Advisory vote on executive compensation
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FOR |
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04 |
Advisory vote on frequency of future Say on Pay votes
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ANNUAL |
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05 |
Approval of Amended and Restated 2006 Equity Incentive
Plan |
FOR |
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06 |
Ratification of KPMG LLP as auditors for 2023
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FOR |
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07 |
Stockholder proposal
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AGAINST |
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SVB 2023 PROXY STATEMENT |
3
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Director Nominees (Proposal No. 1)
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The Board of Directors recommends a vote
"FOR"
all nominees.
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We are pleased to nominate the following 12 incumbent directors for
election.
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Committee Membership* |
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Name |
Age |
Year Elected by Stockholders |
Other Public Boards |
Audit |
Compensation & Human Capital |
Finance |
Governance
& Corporate Responsibility |
Risk |
Technology |
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Greg Becker,
CEO & President |
55 |
2011 |
— |
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Beverly Kay Matthews,
Board Chair |
64 |
2020 |
1 |
X |
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X |
X |
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Eric Benhamou |
67 |
2005 |
2 |
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X |
C |
X |
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Elizabeth “Busy” Burr |
61 |
2022 |
2 |
X |
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X |
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Richard Daniels |
68 |
2021 |
1 |
X |
X |
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X |
C |
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Alison Davis |
61 |
2021 |
2 |
X |
X |
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X |
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Joel Friedman |
75 |
2005 |
— |
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C |
X |
X |
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Thomas King |
62 |
— |
3 |
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X |
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Jeffrey Maggioncalda |
54 |
2012 |
1 |
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X |
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X |
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Mary Miller |
67 |
2016 |
— |
C |
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X |
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X |
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Kate Mitchell |
64 |
2010 |
1 |
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X |
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C |
X |
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Garen Staglin |
78 |
2012 |
— |
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C |
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X |
X |
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*C
denotes committee chair; all memberships are as of the date of this
Proxy Statement.
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92% |
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42% |
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8
yrs
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65
yrs
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Independent Directors |
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Women Directors |
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Average Tenure |
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Average Age |
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4
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Second Amended and Restated Certificate of Incorporation (Proposal
No. 2)
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The Board of Directors recommends a vote
"FOR"
the approval of our Second Amended and Restated Certificate of
Incorporation to update the exculpation provision to align with
Delaware law.
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Delaware recently amended the Delaware General Corporation Law to
allow Delaware corporations to exculpate senior officers for
certain fiduciary duty breaches. Our Board is proposing to update
the exculpation provision of our Amended and Restated Certificate
of Incorporation to align with this change. The Board believes that
providing exculpation to senior officers is important to attract
and retain executive talent, and to avoid costly and protracted
litigation that could distract our senior officers from important
operational and strategic matters.
Executive Compensation (Proposal No. 3)
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The Board of Directors recommends a vote
“FOR”
the approval of the compensation of our Named Executive Officers,
as disclosed in this Proxy Statement.
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Compensation Practice Highlights
•Pay
for performance with emphasis on long-term performance
•Competitive
benchmarking against peers
•Incentive
plans do not encourage excessive risk-taking
•Annual
Say on Pay advisory vote
•Independent
Board/Compensation Committee oversight
•Recoupment
(or clawback) policy
•No
hedging or pledging of Company securities
•No
excessive executive perks, special executive retirement benefits,
pension or SERP plans
Consistent with our Board’s recommendation, we submit an advisory
vote to approve our executive compensation (otherwise known as “Say
on Pay”) on an annual basis. Accordingly, we are seeking your
approval, on an advisory basis, of the compensation of our Named
Executive Officers, as further described in the “Compensation
Discussion and Analysis” (“CD&A”) section of this Proxy
Statement.
The executive compensation decisions made by the Board and
Compensation & Human Capital Committee (the "Comp/HC
Committee") for 2022 reflected a healthy year of financial
performance and business growth despite market challenges. We
maintained our core executive compensation program and continued to
be guided by our core compensation strategy and objectives,
including pay for performance, prudent risk management and talent
retention.
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SVB 2023 PROXY STATEMENT |
5
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Named Executive Officers
For 2022, our named executive officers (“NEOs”) are Mr. Greg
Becker, President and Chief Executive Officer; Mr. Dan Beck, Chief
Financial Officer; Mr. Michael Descheneaux, President, Silicon
Valley Bank; Mr. Philip Cox, Chief Operations Officer; and Mr.
Michael Zuckert, General Counsel. Our NEOs for 2022 also include
Ms. Laura Izurieta, former Chief Risk Officer, who departed the
Company in October 2022 and ceased serving in her role as Chief
Risk Officer on April 29, 2022.
For more information about executive compensation program and pay
decisions for 2022, please refer to the CD&A
section.
Annual "Say on Pay" Frequency (Proposal No. 4)
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The Board of Directors recommends an
ANNUAL
frequency of future "Say on Pay" votes.
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Consistent with 2017 (the last time our "Say on Frequency" vote was
submitted for stockholder approval), our Board is once again
recommending that a Say on Pay advisory vote occur on an annual
basis. Our Board values the opinions of our stockholders and
believes that an annual advisory vote will allow our stockholders
to provide us with their direct input on our executive compensation
program for our NEOs each year.
Amended and Restated 2006 Equity Incentive Plan (Proposal No.
5)
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The Board of Directors recommends a vote
"FOR"
the approval of our Amended and Restated 2006 Equity Incentive Plan
to increase the number of shares reserved for issuance
thereunder.
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Our Board has also proposed for stockholder approval the Company's
2006 Equity Incentive Plan, as amended and restated, to reserve an
additional 1,500,000 shares of common stock for issuance
thereunder. The plan was previously approved by stockholders in
2019, which included the plan's last increase in shares reserved
for issuance.
We believe strongly that the increase in shares issuable under the
amended plan is essential to our continued success and therefore is
in the best interests of the Company and our stockholders. Our
employees are our most valuable assets. The Comp/HC Committee
believes that grants of stock options, restricted stock units,
performance-based restricted stock units and other equity awards
under the plan help create long-term equity participation in the
Company and thereby assist us in attracting, retaining, motivating
and rewarding employees, directors and consultants. We also believe
that long-term equity compensation is essential to link executive
pay to long-term stockholder value creation.
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6
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Independent Auditor Matters (Proposal No. 6)
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The Board of Directors recommends a vote
“FOR”
the ratification of the appointment of KPMG LLP as the Company’s
independent registered public accounting firm.
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As a matter of good corporate practice, we are seeking your
ratification of KPMG LLP as our independent registered public
accounting firm for the 2023 fiscal year. If our stockholders do
not ratify the selection of KPMG LLP, the Audit Committee may
reconsider its selection.
For 2022, the total fees for services provided by KPMG LLP were
$12,520,523, of which approximately 95% represented audit and
audit-related fees. For more information, see “Independent Auditor
Matters.”
Stockholder Proposal (Proposal No. 7)
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The Board of Directors Recommends a Vote
“AGAINST”
this stockholder proposal.
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Similar to last year, we received a stockholder proposal regarding
a racial equity audit. Despite the proposal not passing last year,
we announced in September 2022 an equity audit focused on our
Access to Innovation platform, which is currently underway. The
audit is being conducted by Paul, Weiss, Rifkind, Wharton &
Garrison LLP, with results expected to be published in the third
quarter of 2023. This audit is one of our many initiatives underway
to carry out our commitment and responsibility to advance
diversity, equity and inclusion in the markets within which we
operate.
We are committed to creating a more diverse, equitable and
inclusive company and advancing racial equity in the innovation
ecosystem. Our diversity, equity and inclusion initiatives are
thoughtfully and purposefully aligned with our corporate strategy,
mission and values. Our mission is clear and our ability to stay
focused on that mission is critical for us to maintain momentum.
For more information, see the "Environmental, Social and
Governance" and "Proposal No. 7: Stockholder
Proposal—Company's
Statement of Opposition" sections.
We recommend voting against this proposal.
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SVB 2023 PROXY STATEMENT |
7
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Board and Company Information
Board of Directors Highlights
Composition and Independence
•Separate
Board Chair and CEO roles
•All
independent directors, except for CEO director
•Independent
Board Chair
•Independent
chair and members of all Board committees
•No
director “overboarding” concerns
•Board
and committee ability to hire outside advisors, independent of
management
•Representation
of diverse mix of skills, experience and backgrounds
Accountability
•Annual
election of directors
•Majority
voting standard with director resignation policy
•Annual
Board and committee evaluations
•Regular
executive sessions of non-management directors
•Robust
executive and director equity ownership guidelines
•Independent
Board evaluation of CEO performance
•Independent
Board approval of CEO compensation
•Ongoing
director nominee identification and selection process
•Limit
on director compensation under equity plan
Corporate Governance Highlights
Stockholder Interests
•Active
stockholder engagement practices
•One
single voting class
•Proxy
access under Bylaws
•Stockholders
may act by written consent
•No
cumulative voting
•No
supermajority voting requirements
•No
poison pill
Risk Management
•Board
and Risk Committee oversight of risk, supported by other
committees
•Separate
Board Risk Committee focused on enterprise wide risk
management
•Risk
management guided by Risk Appetite Statement (overseen by Risk
Committee; reviewed and approved by the Board on an annual
basis)
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8
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Company And Proxy Statement Information
SVB At a Glance
Unparalleled access, connections and insights to
increase our clients' probability of success
Leveraging the combined power of our four core businesses to help
clients navigate volatile markets
For nearly 40 years, we have helped the world's most innovative
companies, their people and investors
achieve their ambitious goals.
Our capabilities and expertise place SVB at the center of the
global innovation economy.
About SVB Financial Group
SVB Financial Group (NASDAQ: SIVB) is the financial partner of the
innovation economy, helping individuals, investors and the world's
most innovative companies achieve their ambitious goals. SVB
Financial Group’s businesses — Silicon Valley Bank, SVB Capital,
SVB Private and SVB Securities — together offer the services that
dynamic and fast-growing clients require as they grow, including
commercial banking, venture investing, wealth planning and
investment banking. Headquartered in Santa Clara, California, SVB
Financial Group operates in centers of innovation around the
world.
Our principal executive offices are located at 3003 Tasman Drive,
Santa Clara, California 95054, and our telephone number at that
location is (408) 654-7400.
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SVB 2023 PROXY STATEMENT |
9
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Who We Are
(1) As of January 20, 2023
Who We Bank
Our Corporate Values
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We start with empathy for others. |
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We take responsibility. |
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We embrace diverse perspectives.
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We speak and act with integrity.
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We keep learning and improving.
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Prioritizing Our Investments in 2023
Our 2023 investment focus will be on the following priorities to
drive our long-term growth.
*Currently
subject to Enhanced Prudential Standards' Category IV requirements
and will become subject to Category III or II upon reaching
applicable regulatory thresholds.
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10
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
General Information About Our Annual Meeting
This Proxy Statement is furnished in connection with the
solicitation of proxies by, and on behalf of, the Board of
Directors (the “Board”) of the Company to be voted at our 2023
Annual Meeting of Stockholders and any adjournments or
postponements of that meeting (the “Annual Meeting”). The Annual
Meeting will be held solely by means of remote communications on
Thursday, April 27, 2023 at 3:00 p.m., Pacific Time at
www.virtualshareholdermeeting.com/SIVB2023. All stockholders will
need their control number to participate, vote or ask questions
during the virtual meeting. The control number can be found on
proxy cards, voting instruction forms or other notices sent to
stockholders. Instructions for participation, voting and asking
questions will be available on the meeting website on the meeting
date. Those without a control number may attend as guests of the
meeting, but they will not have the option to vote their shares or
ask questions during the meeting.
All properly executed written proxies and all properly completed
proxies submitted by telephone or internet that are delivered
pursuant to this solicitation will be voted at the Annual Meeting
in accordance with the directions given in the proxy, unless the
proxy is revoked prior to completion of voting at the
meeting.
The proxy materials were first sent or made available to
stockholders on or about March [ ], 2023.
Record Date
Only stockholders of record as of the close of business on
February 28, 2023 (the “Record Date”) will be entitled to
notice of, and to vote at, the Annual Meeting or any adjournments
or postponements of the meeting. At the close of business on the
Record Date, there were 59,217,187 shares of our common stock,
$0.001 par value (“Common Stock”), outstanding.
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting
This Proxy Statement and our Annual Report on Form 10-K for the
year ended December 31, 2022 are available electronically at
www.svb.com/proxy. The contents of our website are not incorporated
herein by reference, and any reference to our website address
provided throughout this Proxy Statement is intended to be an
inactive textual reference only. See also “Information about Voting
and Proxy Solicitation—Delivery of Proxy Materials.”
This Proxy Statement includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding our business, our executive
compensation program, and our environmental, social, and governance
(“ESG”) goals, commitments, and strategies, including our
aspirational diversity and other ESG goals. These statements are
not historical facts, but instead represent only our beliefs
regarding future events, many of which, by their nature, are
inherently uncertain and outside of our control. Actual results
could differ materially from any future results expressed or
implied by the forward-looking statements for a variety of reasons,
including due to the risks, uncertainties and other important
factors that are discussed in our most recently filed Annual Report
on Form 10-K. For a discussion of some of the risks and important
factors that could affect our future results and financial
condition, see “Part I—Item IA—Risk Factors” in our Annual Report
on Form 10-K for the year ended December 31, 2022. We assume no
obligation to update any forward-looking statements or information,
which speak as of their respective dates.
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SVB 2023 PROXY STATEMENT |
11
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Board of Directors and Corporate Governance
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01 |
Proposal One | Election of Directors
The Board of Directors recommends a vote
"FOR"
all nominees.
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We are presenting 12 nominees for election as directors this year.
All nominees currently serve as directors on our Board and are
deemed independent, except for our CEO. If elected, they will serve
until our 2024 Annual Meeting, until their successor is duly
elected and qualified or until their earlier resignation or
removal. We believe our director nominees, individually and
together, possess the requisite skills, experience and other
attributes to serve the long-term interests of the Company and our
stockholders, as well as our other important stakeholders such as
employees, clients, suppliers and the communities we
serve.
2022 Appointment of New Director
Our Board welcomed one new independent director during 2022. Thomas
King was appointed to our Board and our Comp/HC Committee on
September 13, 2022. Mr. King was familiar to the Company as a
director of Leerink Holdings LLC prior to its acquisition by the
Company in 2019, and was also identified as a potential director
candidate by a third-party search firm engaged by the Governance
& Corporate Responsibility Committee. He brings to the Board
significant leadership and global financial services experience,
and we look forward to his continued contributions to the
Company.
Director Nominations
Board Composition and Director Candidate Criteria
The Governance & Corporate Responsibility Committee
("Governance/CR Committee") is responsible for identifying and
recommending director candidates to the Board for
nomination.
The Governance/CR Committee seeks candidates who will diversify and
complement the Board's existing skills and experience in areas that
are critical to the oversight of the Company's business and
strategy. These areas include the financial services, client and
other regulated industries; strategic planning; audit/financial
reporting; human capital management; risk management and controls;
technology; leadership of large, complex organizations; public
company governance; international business; mergers and
acquisitions; cybersecurity/information security; and ESG. The
Governance/CR Committee also considers key attributes such as
critical and innovative thinking; sound business judgment; high
ethical standards; collegial spirit; ability to debate and
challenge constructively; and availability and commitment to
serve.
In addition, the Governance/CR Committee seeks representation that
reflects diversity in other important categories, including gender,
age, and race/ethnicity, as well veteran status, sexual orientation
and geography.
Identification, Selection and Nomination
Identification of possible director candidates that possess the
appropriate skills, qualifications, backgrounds and the desire to
serve on a financial services public company board is a lengthy
process. As such and as an ongoing matter, the Governance/CR
Committee discusses recruiting strategies and actively considers
and evaluates potential director candidates, whether or not there
is an immediate vacancy on the Board to fill. The Governance/CR
Committee regularly reviews the composition of the
existing
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12
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Board to support the development of criteria for potential
candidates. From time to time, the Governance/CR Committee engages
reputable third-party search firms to assist with identifying and
evaluating potential candidates. The Governance/CR Committee has no
formal policy with regard to stockholder nominees and considers all
nominees on their merits. The Governance/CR Committee also
regularly reports to, and discusses its director recruitment
efforts with, the full Board. Potential nominees meet with members
of the Governance/CR Committee (including the Board Chair), other
members of the Board and the Chief Executive Officer, and then are
considered for appointment by the full Board.
Board Refreshment
The Governance/CR Committee routinely assesses the tenure of our
directors and discusses Board refreshment planning as appropriate.
It aims to achieve an appropriate balance between the institutional
knowledge of longer-serving directors and the fresh perspectives of
newer directors. Over the past five years, six directors have
stepped off the Board and five directors have joined.
Our Director Nominees
Our director nominees are seasoned leaders and professionals that
represent a diverse mix of skills, experience, knowledge,
backgrounds, attributes and perspectives relevant to the Company’s
business, strategy, growth and risk profile.
Director Nominee Highlights
Skills and Experience
While the Governance/CR Committee has not formally established any
minimum qualifications for director nominees, it considers and
assesses a broad range of skills and experience. The below graphic
reflects some of the primary areas considered, as well as the
number of director nominees with experience in those
areas.
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Financial Services Experience |
Capital Markets/Investment Banking |
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Global Commercial Banking |
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Private Bank/Wealth Management |
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1 |
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Client Industry Experience |
Tech Sector |
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Venture Capital/Private Equity |
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Fintech |
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Life Sciences/Healthcare |
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1 |
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Relevant Business Experience |
Strategic Planning |
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Audit/Financial Reporting |
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Human Capital Management |
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Risk Management & Controls |
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Technology |
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Leader of Large, Complex Organization |
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Public Company Governance |
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International Business |
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Mergers & Acquisitions |
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Regulated Industries |
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Cybersecurity/Information Security |
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ESG |
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SVB 2023 PROXY STATEMENT |
13
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Diverse Backgrounds and Perspectives
One of our Company values is that we embrace diverse perspectives.
We believe different points of view brought through diverse
representation lead to better business performance, decision making
and understanding of the needs of our diverse clients, employees,
stockholders, business partners and other stakeholders. This
applies equally to our Board. The Governance/CR Committee has a
standing commitment to being intentional about seeking and
including diverse candidates in its director recruitment efforts to
achieve the optimal balance for the Board.
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Tenure |
Gender |
Age |
Other Diversity* |
Independence |
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l |
11+ years |
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l |
Male |
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l |
70s |
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l |
Black |
l |
Independent |
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l |
6 to 10 years |
|
l |
Female |
|
l |
60s |
|
l |
Veteran |
l |
CEO |
|
l |
5 or less years |
|
|
|
|
l |
50s |
|
l |
LGBTQ+ |
|
|
*One
director is both Black and a Veteran.
|
|
|
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|
|
|
|
|
|
Board Diversity Matrix (as of March [ ], 2023)* |
|
|
|
|
|
Total
Number of Directors |
12 |
|
Part I: Gender Identity |
Female |
Male |
|
Directors |
5 |
7 |
|
Part II: Demographic Background |
|
|
|
African American or Black |
— |
1 |
|
White |
5 |
6 |
|
LGBTQ+ |
1 |
— |
|
|
*Per
Nasdaq’s board diversity requirements; inapplicable categories
omitted.
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|
|
|
|
|
|
14
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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|
MEETING & OTHER INFORMATION |
Biographies of Director Nominees
The biographies of each of our director nominees are set forth
below:
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Greg Becker
President and Chief Executive Officer of SVB Financial
Group
Age:
55
Director Since:
2011
Independent:
No
|
|
Mr. Becker
was appointed the President and Chief Executive Officer of the
Company in April 2011. He first joined the Company in 1993 as part
of the Northern California Technology Division and since then has
served in a number of executive and senior management roles,
including Division Manager of Venture Capital, Chief Banking
Officer, Chief Operating Officer and President of the Bank. Mr.
Becker has also served as a director of the Bay Area Council, as
well as on the U.S. Department of Commerce’s Digital Economy Board
of Advisors and the Board of Trustees of the Leukemia &
Lymphoma Society (Silicon Valley/Monterey Bay Area).
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Other Directorships and Positions
Current
•Executive
Council Member, Silicon Valley Leadership Group (since 2011; Chair
2015-2017)
•Chair,
TechNet Executive Council (since 2019; member since
2016)
•Class
A Director, Federal Reserve Bank of San Francisco (since
2019)
•Guiding
Council Member, One Mind at Work (since 2021)
|
Education
•Bachelor’s
degree in Business from Indiana University
Director Qualification Highlights
•Strong
leadership experience, having served as President and CEO of the
Company since 2011
•Expertise
as a champion of the innovation economy through various positions
at the Company since joining in 1993 as a banker to technology
companies
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Eric Benhamou
Founder and General Partner of Benhamou Global
Ventures
Age:
67
Director Since:
2005
Committees:
Governance & Corporate Responsibility (Chair), Finance,
Risk
Independent:
Yes
|
|
Mr. Benhamou
is Founder and General Partner of Benhamou Global Ventures, LLC, an
investment firm focused on innovative high-tech companies around
the world, which he founded in 2003. He also sits on the boards of
various public and private technology companies and various
educational and philanthropic organizations. His former roles
include CEO of 3Com Corporation and Palm, Inc.
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Other Directorships and Positions
Current
•CEO
and Director, Enterprise 4.0 Technology Acquisition Corp. (since
2021) (role expected to end in April 2023)*
•Director,
Grid Dynamics Holdings, Inc. (since 2020)*
•Director
of various private companies, including Evinced, Inc. (since 2021),
Secret Double Octopus (since 2020), 6d Bytes, Inc. (since 2017),
Virtana Instruments Corporation (since 2016), Israel Venture
Network (since 2000)
•Advisory
Board Member, Hyundai Motor Company, an automotive manufacturer
(since 2018)
|
Education
•Engineering
degree from l’École Nationale Supérieure d’Arts et Métiers in
Paris, France
•Master’s
degree in Science from the School of Engineering at Stanford
University
Director Qualification Highlights
•Strong
strategic, leadership and operational experience in global capital
markets, having served as CEO of 3Com and Palm
•Venture
capital expertise through leading Benhamou Global
Ventures
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*Indicates
current public company directorship
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|
SVB 2023 PROXY STATEMENT |
15
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PROXY SUMMARY |
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|
BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
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|
INDEPENDENT AUDITOR MATTERS |
|
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OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
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Elizabeth "Busy" Burr
Former President and Chief Commercial Officer of Carrot,
Inc.
Age:
61
Director Since:
2021
Committees:
Audit, Technology
Independent:
Yes
|
|
Ms. Burr
is the former President and Chief Commercial Officer of Carrot,
Inc. a B2B2C digital health company where she built the go-to
market strategy and team including sales, marketing,
communications, financial planning, account management, business
development and partnerships. In 2023, the Board of Rite Aid
Corporation appointed Ms. Burr as interim CEO while it conducts a
search for a permanent CEO. Ms. Burr previously served in various
executive management roles at Humana Inc., Citi Ventures, Morgan
Stanley, Credit Suisse First Boston and Gap, Inc.
|
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|
|
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|
Other Directorships and Positions
Current
•Interim
CEO and Director, Rite Aid Corporation (director since 2019;
interim CEO since 2023)*
•Director,
Mr. Cooper Group (since 2019)*
•Director,
Satellite Healthcare (since 2018)
Former
•Board
Observer, Omada Health, Aspire Health, Livongo Health
(2016-2018)
•Advisory
Council Member, Smith College (2008-2014)
•Director,
Summit Prep Public Charter School (2010-2013)
|
Education
•Bachelor’s
degree in Economics from Smith College
•Master’s
degree in Business Administration from Stanford
University
Director Qualification Highlights
•Strong
customer experience and business growth strategy expertise, having
served as Chief Innovation Officer of Humana, President of Carrot
and in various other executive management roles
•In-depth
experience in marketing, innovation and digital transformation in
the financial services industry through various executive positions
at Citigroup, Morgan Stanley and Credit Suisse
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|
Richard Daniels
Former Executive Vice President and Chief Information Officer of
Kaiser Permanente
Age:
68
Director Since:
2020
Committees:
Technology (Chair), Audit, Compensation & Human Capital,
Risk
Independent:
Yes
|
|
Mr. Daniels
retired from Kaiser Permanente, a nonprofit integrated managed care
consortium, in 2020, where he served as Executive Vice President
and Chief Information Officer. During his 12 years at Kaiser
Permanente, he held a number of leadership positions, including
Senior Vice President for both Enterprise Shared Services and
Business Information. Other previous roles include a variety of
management positions at Capital One Financial Corporation, JPMorgan
Chase & Co., NetServ, Inc. and DataPoint
Corporation.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
Fastly, Inc. (since 2021)*
•Director,
CSAA Insurance Exchange (since 2020)
•Director,
Parkland Center for Clinical Innovation (since 2017)
|
Education
•Bachelor’s
degree in business management, Texas State University-San
Marcos
Director Qualification Highlights
•Extensive
information technology (including cybersecurity) leadership
experience, having spent 12 years in various roles at Kaiser
Permanente, most recently as Chief Information Officer and prior
leadership roles in technology
•Deep
leadership experience through his roles at Kaiser Permanente,
Capital One, JPMorgan Chase and DataPoint
|
|
|
|
|
*Indicates
current public company directorship
|
|
|
|
|
|
|
16
|
SVB 2023 PROXY STATEMENT |
|
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|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
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OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
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|
|
Alison Davis
Managing Partner and Co-Founder of Blockchain
Coinvestors
Age:
61
Director Since:
2020
Committees:
Audit, Compensation & Human Capital, Technology
Independent:
Yes
|
|
Ms. Davis
is Managing Partner and Co-Founder of Blockchain Coinvestors, a
blockchain venture investor and fund of funds. Ms. Davis has held a
variety of key management positions in the finance and venture
capital industries, including at Belvedere Capital Partners, Inc.,
Barclays Global Investors, A.T. Kearney and McKinsey &
Company.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
Janus Henderson Group PLC (since 2021)*
•Director,
Fiserv (since 2014)*
•Director
of various private companies, including Pacaso (since 2021) and
Collibra (since 2019)
•Director
of various organizations, including Renaissance Entrepreneurship
Center (Chair since 2023; director since 2009), NACD Northern
California Chapter (since 2022) and Cambridge in America (since
2021)
Former
•Director,
Ooma (2014-2020)
•Director,
Royal Bank of Scotland Group plc (2011-2020)
•Director,
Unisys Corporation (2011-2018)
|
Education
•Bachelor’s
degree in Economics from Cambridge University
•Master’s
degree in Economics from Cambridge University
•Master’s
degree in Business Administration from Stanford
University
Director Qualification Highlights
•Broad
finance and management expertise, having served in a variety of key
management positions within the finance and venture capital
industries, as well as in her current role as Co-Founder of
Blockchain Coinvestors
•Abundant
experience as a director of numerous public and private companies,
including for financial services companies
|
|
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|
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|
|
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|
|
Joel Friedman
Former President (Business Process Outsourcing),
Accenture
Age:
75
Director Since:
2004
Committees:
Finance (Chair), Governance & Corporate Responsibility,
Risk
Independent:
Yes
|
|
Mr. Friedman
retired in 2005 from Accenture PLC, a public company global
management-consulting firm, where he held the position of President
of the Business Process Outsourcing organization. Over the course
of his 34-year career with Accenture, Mr. Friedman held a variety
of senior leadership roles including Managing Partner, Banking and
Capital Markets, Managing General Partner, Accenture Technology
Ventures; and Founder, Accenture strategy consulting practice. He
has also served as director on various companies and organizations,
including Neustar, Inc., FTV Capital, Endeca Technologies, EXL
Services (advisory director), Junior Achievement of Northern
California, Accenture, Seisent, Inc. and Calico Commerce,
Inc.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
Arrow/Cloudstore (since 2023)
•Director,
AbilityPath Housing (since 2021) and Advisory Director, AbilityPath
(since 2013)
•Advisory
Director, Stanford Institute for Economic Policy Research (since
2019)
•Member,
Financial Advisory Committee, Town of Hillsborough, CA (since
2018)
Former
•Advisory
Director, Currency Capital, a financial services company
(2018-2020)
|
Education
•Bachelor’s
degree in Economics from Yale University
•Master’s
degree in Business Administration from Stanford
University
Director Qualification Highlights
•Extensive
leadership experience in the banking and venture capital
industries, having served as President, Managing Partner, Managing
General Partner and Founder of Accenture's strategy consulting
practice
•Career-long
experience with corporate finance and capital markets
|
|
|
|
|
*Indicates
current public company directorship
|
|
|
|
|
|
|
SVB 2023 PROXY STATEMENT |
17
|
|
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|
|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
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|
Thomas King
Former Chief Executive Officer of Investment Banking at Barclays
PLC
Age:
62
Director Since:
2022
Committees:
Compensation & Human Capital
Independent:
Yes
|
|
Mr. King
is the former Chief Executive Officer of Investment Banking at
Barclays PLC, a financial services company, where he oversaw the
banking and markets businesses and also served as the Chair of the
Investment Banking Executive Committee and a member of the Barclays
Group Executive Committee. Mr. King previously held several senior
positions at Citigroup, including Global Head of Mergers and
Acquisitions, Head of Investment Banking for the EMEA Region and
Head of Corporate and Investment Banking for the EMEA Region. He is
currently an Operating Partner at Atlas Merchant Capital LLC, a
global investment firm.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
Clear Channel Outdoor Holdings, Inc. (since 2019)*
•Director,
Radius Global Infrastructure, Inc. (since 2020)*
•Director,
Concord Acquisition Corp III (since 2021)*
•Trustee,
King School, (since 2017; Chair since 2019)
Former
•Concord
Acquisition Corp I (2020-2023)
•Concord
Acquisition Corp II (2021-2022)
•Director,
Leerink Holdings LLC (2017-2019 (acquired by the Company in
2019))
|
Education
•Bachelor’s
degree in Economics from Bowdoin College
•Master’s
degree in Business Administration from the Wharton School,
University of Pennsylvania
Director Qualification Highlights
•Expertise
in the financial services industry, including investment banking,
markets and corporate banking, through 35 years of banking
experience
•Broad
leadership experience, including as CEO of Investment Banking at
Barclays
|
|
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|
|
|
|
|
|
Jeffrey
Maggioncalda
Chief Executive Officer of Coursera
Age:
54
Director Since:
2012
Committees:
Compensation & Human Capital, Technology
Independent:
Yes
|
|
Mr. Maggioncalda
is currently the Chief Executive Officer of Coursera, Inc., an
online education company, and also serves on Coursera’s board of
directors. He previously served as the founding Chief Executive
Officer and director of Financial Engines, Inc., a public
independent investment advisory firm. Subsequent to his tenure at
Financial Engines, Mr. Maggioncalda served as a senior advisor to
McKinsey & Company, a global management-consulting
firm.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•CEO
and Director, Coursera (since 2017)*
Former
•CEO
and Director, Financial Engines (CEO 1996-2014; director
2011-2014)
•Director,
Affinity Circles (2012)
•Senior
Advisor, McKinsey & Co. (2017)
•Summer
Associate, McKInsey & Co. (1995)
•Associate,
Cornerstone Research (1991-1994)
|
Education
•Bachelor’s
degree in Economics and English from Stanford
University
•Master’s
degree in Business Administration from Stanford
University
Director Qualification Highlights
•Strong
management and consulting experience in investment advisory and
financial services, having served as CEO and Founder of Financial
Engines as well as a Senior Advisor to McKinsey &
Co.
•Executive
leadership experience, including as CEO of Coursera and Financial
Engines
|
|
|
|
|
*Indicates
current public company directorship
|
|
|
|
|
|
|
18
|
SVB 2023 PROXY STATEMENT |
|
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|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
|
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|
Beverly Kay Matthews
Former Vice Chair of the Americas Executive Board, Ernst &
Young
Age:
64
Board Chair Since:
2022
Director Since:
2019
Committees:
Audit, Governance & Corporate Responsibility, Risk
Independent:
Yes
|
|
Ms. Matthews
is our current Board Chair, and subject to her election, she is
expected to continue to serve as our Board Chair during the
2023-2024 director term. Ms. Matthews retired from Ernst &
Young LLP (“E&Y”), a multinational professional services firm,
in 2019, where she served as Vice Chair of the Americas Executive
Board, a member of the Global Practice Group and the Managing
Partner of the West Region. During her 36 years at E&Y, she
held a variety of leadership positions, including Senior Advisory
Partner for key clients in the technology and transportation
sectors, and Member of the U.S. Partner/Principal Matters
Committee.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
Main Street Capital Corporation (since 2020)*
•Advisory
Council Member, Texas Tech University, Rawls College of Business
(since 2020)
Former
•Director,
Coherent Inc. (2019-2022)
•Member,
Global Practice Group, E&Y (2008-2019)
•Other
key positions, including Americas Assurance and Advisory Chief
Operating Officer and Managing Partner, E&Y
(1983-2008)
|
Education
•Bachelor’s
degree in Accounting from Texas Tech University
Director Qualification Highlights
•Broad
experience within the technology and venture capital/private equity
sectors, having served as a Vice Chair of E&Y and working as a
Senior Advisory Partner for key clients within the technology,
healthcare and biotech fields
•Career-long
finance, accounting and auditing experience as an independent
auditor
|
|
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|
|
Mary Miller
Former Under Secretary for Domestic Finance, U.S. Department of
Treasury
Age:
67
Director Since:
2015
Committees:
Audit (Chair), Finance, Risk
Independent:
Yes
|
|
Ms. Miller
is the former Under Secretary for Domestic Finance for the U.S.
Department of the Treasury (“U.S. Treasury”), a position that she
held following her confirmation by the U.S. Senate from March 2012
to September 2014. Ms. Miller also served as Assistant Secretary of
the Treasury for Financial Markets from February 2010 to March
2012. Prior to joining the U.S. Treasury, Ms. Miller led the Fixed
Income Division for T. Rowe Price Group, Inc., her employer of 26
years.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
The Jeffrey Company, a private investment management company (since
2016)
•Director/Trustee
of various organizations, including Johns Hopkins University (since
2022), T. Rowe Price Program for Charitable Giving (since 2021),
the Urban Institute (since 2015) and Baltimore Neighborhood Impact
Investment Fund (since 2018)
•Member,
The Bretton Woods Committee (since 2022)
Former
•Director,
ICE Benchmark Administration, a unit of the Intercontinental
Exchange (2014-2018)
|
Education
•Bachelor’s
degree in Government from Cornell University
•Master’s
degree in City and Regional Planning, University of North Carolina
at Chapel Hill
•Chartered
Financial Analyst (CFA)
Director Qualification Highlights
•Distinguished
government and finance experience, having served in key positions
within the U.S. Department of the Treasury and as a leader in the
Fixed Income Division of T. Rowe Price Group
•In-depth
experience in financial markets and the investment advisory
industry
|
|
|
|
|
*Indicates
current public company directorship
|
|
|
|
|
|
|
SVB 2023 PROXY STATEMENT |
19
|
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|
|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
|
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|
|
Kate Mitchell
Partner and Co-Founder of Scale Venture Partners
Age:
64
Director Since:
2010
Committees:
Risk (Chair), Finance, Technology
Independent:
Yes
|
|
Ms. Mitchell
is a Partner and Co-Founder of Scale Venture Partners, a venture
capital firm that invests in enterprise software companies, and has
been instrumental in building the firm’s team and strategic
direction. She has held various directorships and other senior
management positions throughout her career. Prior to founding
Scale, Ms. Mitchell spent 20 years in various leadership positions
at Bank of America in technology, finance and
operations.
|
|
|
|
|
|
|
|
Other Directorships and Positions
Current
•Director,
Fortive Corporation (since 2016)*
•Director/Member
of various organizations, including Venture Forward (since 2019),
Silicon Valley Community Foundation (Chair of Finance and IT
Committee, since 2016), GP Advisory Council of the Institutional
Limited Partners Association (since 2016), Private Equity Women
Investor Network (Vice Chair since 2010)
•Steering
Committee Member, IADEI (Institutional Allocators for Diversity
Equity & Inclusion) (since 2022; advisor
2021-2022)
|
Education
•Bachelor’s
degree in Political Science from Stanford University
•Master’s
degree in Business Administration from Golden Gate
University
Director Qualification Highlights
•Extensive
knowledge of the venture capital industry, having served as Partner
and Co-Founder of Scale Venture Partners
•Financial
industry expertise, having spent 20 years in various leadership
roles at Bank of America
|
|
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|
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Garen Staglin
Founder and Proprietor of Staglin Family Vineyard
Age:
78
Director Since:
2011
Committees:
Compensation & Human Capital (Chair), Governance &
Corporate Responsibility, Risk
Independent:
Yes
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Mr. Staglin
is the founder and proprietor of Staglin Family Vineyard, founded
in 1985 in the Rutherford region of Napa Valley. Over the past 40
years, Mr. Staglin has also held a variety of positions in the
financial services and insurance industries, as well as
directorships of various public and private companies. He was also
the Founder and President of Bring Change 2 Mind, a nonprofit
organization dedicated to addressing mental illness.
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Other Directorships and Positions
Current
•Chair
and Co-Founder, One Mind (since 1995)
•Co-Chair,
Healthy Brains Global Initiative (since 2022)
•Vice
Chair, Profit Velocity Solutions (since 2007)
•Advisory
Director, FTV Capital (since 2004)
Former
•Chair,
ExlService Holdings, Inc. (2014-2021; Director
2005-2022)
•Director
and Founder, Solera, Inc. (2005-2011)
•Director,
First Data Corporation (1992-2003)
•Director
of various other public and private companies, including,
NVoicePay, Inc. (2010-2019), Freerun Technologies (2003-2014),
Bottomline Technologies (2007-2012), QRS Corporation (1991-2001)
and CyberCash, Inc. (1996-2000)
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Education
•Bachelor’s
degree in Engineering–Electrical and Nuclear from the University of
California, Los Angeles
•Master’s
degree in Business Administration, Finance and Systems Analysis
from Stanford University
Director Qualification Highlights
•Extensive
experience in financial services, particularly transaction and
payment processing, having served on the boards of Profit Velocity
Solutions and ExlService Holdings
•Deep
experience in the premium wine industry as founder and proprietor
of Staglin Family Vineyard
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*Indicates
current public company directorship
Our Board of Directors recommends that stockholders vote “FOR” all
nominees.
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20
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Board Governance and Oversight
Board Effectiveness
The Board routinely assesses and evaluates its effectiveness
through its own evaluations or from time to time, by engaging
outside advisors to stay apprised of leading oversight and
governance practices. In 2022, the Board, in consultation with
outside advisors, conducted an extensive effectiveness review to
identify and consider potential enhancements to our Board and
corporate governance practices. In particular, as a result of the
review, the Board implemented changes to its Board committee
structure and oversight practices in alignment with the Company's
business and growth. Among other changes, the Board discontinued
its Credit Committee and added a new Technology Committee. See
"Board Committees" below.
Board Independence and Leadership
The Board has determined that, with the exception of Mr. Becker,
our President and CEO, all of our current directors are
“independent” within the meaning of the director independence
standards set by The NASDAQ Stock Market LLC (“NASDAQ”) and the
Securities Exchange Commission (the “SEC”).
Separate Chair and CEO Roles; Independent Chairs
Our Board Chair and CEO roles are separate. The Board has
determined that it is in the best interests of the Company to
continue to maintain these positions separately. We continue to
believe that having an outside, independent director serve as chair
is the most appropriate leadership structure for the Board at this
time, as it enhances the Board’s independent oversight of
management and strategic planning, reinforces the Board’s ability
to exercise its independent judgment to represent stockholder
interests and strengthens the objectivity and integrity of the
Board. Moreover, we believe an independent chair can more
effectively lead the Board in objectively evaluating the
performance of management, including the CEO, and guide the Board
through appropriate governance processes. The Board may modify the
structure as it deems appropriate given the specific circumstances
then facing the Company.
The Board has determined that Ms. Matthews, our current Chair of
the Board, is independent within the meaning of the director
independence standards described above. In addition, all chairs of
our six standing committees are independent. For more information
about our committees, see "Board Committees" below.
Board Oversight of Strategy and Risk
The Board is actively engaged in overseeing and guiding, and
challenging as needed, management in the development and execution
of the Company’s strategy plan. Each year, the Board conducts an
annual in-depth, multi-day session to advise and discuss with
management our strategic and growth plans and review our overall
business. Discussion topics may include the Company’s purpose,
vision, mission and values; line of business strategies; financial
outlook; new or expanded products, services or business activities;
client experience and satisfaction; market share; global expansion;
competition; economic and market environment and industry trends;
business transformation or strategic initiatives; human capital
management; business and strategy risk management assessment; and
regulatory environment. The Board approves the Company’s strategic
plan on at least an annual basis. On an ongoing basis throughout
the year, the Board routinely reviews management's progress against
the plan, as well as our corporate strategic priorities and
"objectives and key results" ("OKRs") goals.
The Board oversees the Company’s management of the most significant
enterprise-wide risks. Risk management is carefully considered by
the Board in its oversight of the Company's strategy and business,
including financial, reputational, regulatory, legal and compliance
implications. The Board oversees risk management directly, as well
as through its other committees, particularly the Risk
Committee.
The Risk Committee of the Board oversees the Company’s
enterprise-wide risk management, in coordination with and support
from the other committees, where appropriate. The Risk Committee
has primary oversight responsibility of the Company’s
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SVB 2023 PROXY STATEMENT |
21
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
enterprise-wide risk management framework (including the oversight
of risk management policies) and risk governance and culture, and
the monitoring of the Company’s risk profile and emerging risks.
The Company's Risk Appetite Statement, which sets forth the
tolerance levels with respect to the amount and types of key risks
underlying the Company's business, is primarily overseen by the
Risk Committee and approved on at least an annual basis by the
Board. The Risk Committee has primary oversight of the Company's
risk management across all major risk categories, including
liquidity, credit, market, operational, compliance, strategic and
reputational risk. Moreover, the Risk Committee oversees our
capital management, including our Capital Plan (in coordination
with the Board). The Chief Risk Officer of the Company reports
directly to the Risk Committee, as well as, on an administrative
basis, to the Chief Executive Officer.
The other committees of the Board also provide oversight over risk
management relating to their respective areas of responsibilities,
in coordination with the Risk Committee where appropriate. The
Audit Committee oversees risk management relating to financial
reporting, legal and compliance. The Comp/HC Committee oversees
risk management relating to human capital management and
compensation programs, which are designed to hold management
accountable and to avoid incenting imprudent risk-taking. The
Governance Committee oversees risk management relating to Board
governance, CEO succession and the Company's corporate
responsibilities, including ESG strategy. The Technology Committee
provides supporting oversight of technology-related risks to the
Risk Committee.
Risk & Controls
Under the Board and committee oversight outlined above, we are
focused on, and continually invest in, our risk management and
control environment. Our business teams, supported by our risk,
compliance, legal, finance and internal audit functions, work
together to identify and manage risks applicable to our business,
as well as to enhance our control environment. Particular areas of
focus include, among other areas, financial reporting, data
management, privacy, bank regulatory requirements, and as further
discussed below, cybersecurity.
Cybersecurity
Like other financial institutions, we are susceptible to
information security breaches and cybersecurity-related incidents.
We are committed to protecting and continually enhancing the
security of our systems, networks and general technology
environment. We have established a Security Program, which includes
appropriate security risk assessments, security monitoring,
incident response, policies, operating standards, global regulatory
compliance and employee training. All employees are required to
complete annual training on the following topics: information
security, privacy, cybersecurity best practices (e.g., social
engineering, incident reporting, managing third-party
relationships), identity and access management, physical security
and remote work best practices (e.g., mobile
security).
We continually invest in enhancing our preventive and defensive
capabilities in line with globally recognized information security
standards, maintaining appropriate information security risk
insurance policies, and implementing other measures to mitigate
potential threats and losses, where possible. For example, we have
invested in additional precautionary measures to mitigate
cybersecurity risks resulting from our remote work environment,
which we initiated in response to COVID-19. The Board is actively
engaged in oversight of our cybersecurity practices, with the Risk
Committee having primary oversight responsibility, leveraging the
expertise of the Technology Committee. The Risk Committee reviews
and approves the Security Program on an annual basis, as well as
receives management updates about information security matters on
at least a quarterly basis. These management updates cover:
external cybersecurity hot topics and notable events, current and
emerging threats, cybersecurity program achievements and progress
of key initiatives, key performance indicators, key risk indicators
and notable internal events. In addition, the Risk Committee
oversees and receives reporting on cybersecurity risk within the
broader operational risk category, with the Board and Technology
and Audit Committees receiving prompt reporting and updates on
significant cybersecurity-related incidents, as
appropriate.
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22
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Board Oversight of CEO and Executives
Annual CEO and Executive Performance Evaluations
The independent members of the Board evaluate the performance of
our CEO on at least an annual basis. Each year, the Governance/CR
Committee approves a process to solicit feedback from each
individual non-CEO director. Our Chair of the Board, together with
the Chairs of the Governance/CR and Comp/HC Committees, lead
discussions with the Board (without the CEO present) to evaluate
the CEO’s performance. Performance is evaluated generally and
against predetermined annual goals, which are developed in
coordination with, and approved by, the Board. The results of the
performance evaluation serve as the basis for determining
compensation for the CEO.
The Comp/HC Committee also reviews the performance of our other
non-CEO executives on at least an annual basis, working closely
with the Risk Committee and the Audit Committee for the Chief Risk
Officer and Chief Auditor, respectively. Similar to our CEO, our
executives are evaluated generally and against predetermined annual
goals, which are developed in coordination with, and approved by,
the Comp/HC Committee and the Risk Committee and Audit Committee
for the Chief Risk Officer and Chief Auditor, respectively. The
results of these performance evaluations are then utilized in the
determination and approval of our executives' compensation. The CEO
provides input on executive goals and compensation, as
appropriate.
CEO and Executive Succession Planning
The Board is responsible for the Company’s long-term and
contingency plans for CEO and executive succession, and as a matter
of good governance, the plan and process is routinely reviewed.
These efforts may involve seeking input from our current CEO and
our Chief Human Resources Officer, as well as external advisors, to
the extent the Board deems appropriate. Succession plans are
generally reviewed and discussed by the Board, typically on an
annual basis. The Governance/CR Committee provides oversight
support to the Board with respect to the CEO succession planning
process, and the Comp/HC Committee provides similar oversight
support with respect to succession and development planning for our
other executives.
Meeting Attendance
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Board and Committee Meetings
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Total Number of Board and Committee Meetings: 86 |
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Board |
10 |
Governance & Corporate Responsibility Committee
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11
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Audit Committee |
16 |
Risk Committee
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18
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Compensation & Human Capital Committee |
11 |
Technology Committee (formed in April 2022)
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6
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Finance Committee
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12 |
Credit Committee (discontinued in April 2022)
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2 |
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The Board and its standing committees held a total of 86 meetings
during 2022. The Board itself held 10 meetings during the year,
including a two-day annual session focused on strategic planning
and risk review. Each director attended in person or by
teleconference 75% or more of the total number of meetings of the
Board and the committees on which he or she served during
2022.
It is the Board’s policy that each director employs his or her best
efforts to attend our annual stockholder meetings. All 11 of our
incumbent Board members who were Board members at the time of our
2022 Annual Meeting of Stockholders attended
virtually.
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SVB 2023 PROXY STATEMENT |
23
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Executive/Closed Sessions
The Company's directors meet in regularly scheduled closed sessions
with members of management, including with representatives of
independent risk management and internal audit functions, as well
as with external advisors and regulators. In addition, the
Company’s independent directors meet in regularly scheduled
executive sessions without management.
Director Matters
Annual Board Evaluations
The Board assesses its performance and effectiveness on an annual
basis. The evaluation process is determined by the Governance/CR
Committee, and typically involves an outside advisor and includes a
review of how certain attributes affect Board and/or individual
director effectiveness, such as Board size, committee structure,
meeting frequency, quality and timing of information provided to
the Board, director communication, director education, director
skills and qualifications, director independence and overall
performance. In recent years, the Board has conducted an annual
evaluation process that involves both a one-on-one interview with
each director conducted by an outside advisor to solicit feedback,
as well as written surveys.
Led by the Chairs of the Board and Governance/CR Committee, the
results of the evaluation are reviewed and discussed by the Board.
The Governance/CR Committee also oversees the annual process to
evaluate the performance and effectiveness of each of the Board’s
committees. See “Board Committees—Committee Governance”
below.
Director Education and Orientation
The Board believes that director education is foundational to
effective Board oversight of large, complex organizations like the
Company that operate in dynamic business and regulatory
environments. Accordingly, the Company's Director Education
Program, which is overseen by the Governance/CR Committee, includes
new director orientation and continuing education on matters
pertinent to service on the Board.
New director orientation involves one-on-one meetings and
informational sessions with members of the Board and
executive/senior management, which cover our business, strategy,
operations, risk management and governance. New directors typically
join at least one Board committee upon joining the Board and are
also invited to participate as a guest director at the meetings of
the other Board committees. In addition, new directors receive a
fulsome package of written orientation and education materials to
help familiarize them to the Company and Board.
The Director Education Program also emphasizes the importance of
continuing education for all directors. Presentations on relevant
education topics are provided internally by management or outside
speakers in accordance with an annual plan. Topics are developed
with the aim of keeping directors apprised of the business and
regulatory environment in which the Company operates, including
regulatory requirements and expectations; the Company's business
and client industries, including new areas of business;
expectations and market practices of large financial institutions
or public company boards; emerging/trending topics; and
foundational education on the Company's core programs and
processes. Directors also participate in external education
programs, conferences and seminars and engage in independent study
and outside reading. Individual directors who are Board or
committee chairs or who have specialized areas of expertise are
strongly encouraged to participate in additional education relevant
to those roles. The Governance/CR Committee monitors, and receives
regular reporting on, director education.
In 2022, directors received training on various topics, including,
among other areas, emerging trends in various oversight areas, risk
management topics, ESG, cybersecurity, fair lending and
BSA/OFAC/financial crimes.
Outside Directorships
We encourage all directors to carefully consider the number of
other company boards of directors on which they serve, taking into
account the time required for board attendance, conflicts of
interests, participation and effectiveness on these boards.
Directors are asked to report all directorships, including advisory
positions, to the Governance/CR Committee. Directorships on another
public company board must be reviewed in advance prior to
acceptance by the Governance/CR Committee.
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24
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Board Committees
Our Board committee structure is designed to help the Board carry
out its responsibilities in an effective and efficient manner.
While the Board may form from time to time ad hoc or other special
purpose committees, there are currently six standing Board
committees: Audit, Compensation & Human Capital, Finance,
Governance & Corporate Responsibility, Risk and
Technology.
In 2022, as part of its effectiveness review, the Board made
changes to enhance its structure and oversight practices in
alignment with the Company's business and growth. Key changes
included:
•Added
a new Technology Committee
•Enhanced
and aligned enterprise risk oversight responsibilities under the
Risk Committee
•Emphasized
the Governance/CR Committee's oversight role over the Company's
corporate responsibilities, including ESG, philanthropy and
community benefits (and renamed the committee)
•Emphasized
the Comp/HC Committee's oversight role over the Company's human
capital management (and renamed the committee)
•Discontinued
the Credit Committee
In its ongoing effort to enhance its committee structure, the Board
is also planning to discontinue and sunset its Finance Committee in
April 2023.
Committee Chairs/Membership, Responsibilities and
Meetings
All chairs of our six standing committees are independent and
appointed annually by the Board of Directors. Each chair presides
over committee meetings; oversees meeting agendas; serves as
liaison between the committee members and the Board, as well as
between committee members and management; and works actively and
closely with executive and senior management on all committee
matters, as appropriate. Each committee meets regularly, at least
on a quarterly basis. The committees, typically through their
committee chairs, routinely report their actions to, and discuss
their recommendations with, the full Board. In addition, certain
committees periodically hold extended meetings dedicated to
discussing key strategic matters or other business items that are
relevant or subject to the committee’s oversight responsibilities
on a more in-depth basis.
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SVB 2023 PROXY STATEMENT |
25
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
The names of the current members (chairs’ names in bold)* and
highlights of some of the key oversight responsibilities of the
Board Committees are set forth below:
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Audit Committee
•Integrity
of our financial statements, including internal controls over
financial reporting.
•Independent
auditor of the Company.
•Internal
audit function.
•Ethical
compliance.
•Regulatory
compliance function of the Company, including financial crimes risk
management.
•Other
key areas: litigation and regulatory enforcement
matters.
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Compensation & Human Capital Committee
•Compensation
strategies, plans, policies and programs.
•Director
compensation.
•Human
capital management, including internal diversity, equity and
inclusion ("DEI"), leadership development and talent
management.
•Executive
succession planning (excluding CEO).
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Finance Committee
•Financial
and balance sheet strategies, and treasury management.
•Annual
budget of the Company, and recommendation to the Board for
approval.
•Material
corporate development matters that may result in a significant
financial impact, as delegated by the Board.
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Members:
Mary Miller,
Elizabeth "Busy" Burr, Richard Daniels, Alison Davis and Beverly
Kay Matthews
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Members:
Garen Staglin,
Richard Daniels, Alison Davis, Tom King and Jeffrey
Maggioncalda
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Members:
Joel Friedman,
Eric Benhamou, Mary Miller and Kate Mitchell
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Governance & Corporate Responsibility Committee
•Corporate
governance and Board practices.
•Nomination
of director candidates.
•Annual
performance evaluation processes of our Board and its committees
and the CEO.
•ESG
strategy and program, external DEI activities, philanthropy,
community benefits and other corporate responsibility
efforts.
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Risk Committee
•Enterprise-wide
risk management policies of the Company.
•Operation
of our enterprise-wide risk management framework.
•Risk
appetite, risk profile and risk culture
•Risk
function and leadership
•Risk
management activities across the Company
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Technology Committee
•Technology
strategy in support of the overall corporate strategy
•Significant
technology investments, initiatives and programs
•Supporting
oversight of technology-related risk management to the Risk
Committee
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Members:
Eric Benhamou,
Joel Friedman, Beverly Kay Matthews and Garen Staglin
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Members:
Kate Mitchell,
Eric Benhamou, Richard Daniels, Joel Friedman, Beverly Kay
Matthews, Mary Miller and Garen Staglin
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Members:
Richard Daniels,
Elizabeth "Busy" Burr, Alison Davis and Jeffrey Maggioncalda and
Kate Mitchell
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26
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
|
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Committee Independence and Audit Committee Financial
Experts
The Board has determined that each of the current members of the
current Board committees are “independent” within the meaning of
applicable SEC rules, NASDAQ director independence standards and
other regulatory requirements, to the extent
applicable.
In addition, the Board has determined that each of the following
current Audit Committee members are “audit committee financial
experts,” as defined under SEC rules, and possess “financial
sophistication” as defined under the rules of NASDAQ: Mses. Burr,
Davis, Matthews and Miller.
Committee Governance
Committee Charters
Each committee is governed by a charter that is approved by the
Board, which sets forth each committee’s purpose and
responsibilities. The Board reviews the committees’ charters, and
each committee reviews its own charter, on at least an annual
basis, to assess the charters’ content and sufficiency, with final
approval of any proposed changes required by the Governance/CR
Committee and the full Board. The charters of each committee are
available on our website at www.svb.com under “About Us—Investor
Relations—Governance.”
Annual Committee Evaluations
The Governance/CR Committee, in coordination with the Board,
implements and develops a process to assess committee performance
and effectiveness. The assessments are conducted on an annual basis
and include a self-assessment by each committee. The review
includes an evaluation of various areas that may include committee
size, composition, performance, coordination among committee
members and among the standing committees, and involvement with the
full Board. The results of the committee performance assessments
are reviewed by each committee, as well as by the Governance/CR
Committee, and discussed with the full Board.
Compensation Committee Interlocks and Insider
Participation
The following directors currently serve on the Comp/HC Committee:
Messrs. Staglin, Daniels, King and Maggioncalda and Ms. Davis. Ms.
Matthews and former director Mr. John Clendening also served on the
Comp/HC Committee until April 2022. No member of the Comp/HC
Committee or individual who served on the Comp/HC Committee during
2022 is or has ever been an officer or employee of the Company.
None of our executive officers serves, or in 2022 served, as a
member of the board of directors or compensation committee of any
entity that has one or more of its executive officers serving on
our Board. For information about related transactions between us
and members of the Comp/HC Committee, if any, see “Certain
Relationships and Related Transactions." For additional information
about the Comp/HC Committee, see "Board Committees—Committee
Chairs/Membership, Responsibilities and Meetings.”
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SVB 2023 PROXY STATEMENT |
27
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Compensation for Directors
Overview
Our compensation for our non-employee directors is designed to be
competitive with other financial institutions that are similar in
size, complexity and business model. In addition, our director
compensation is designed to be tied to business performance and
stockholder returns, and to align director and stockholder
interests through director ownership of the Company’s stock. The
Comp/HC Committee oversees and approves our director compensation
in consultation with the full Board. Our CEO, the only employee
director on the Board, does not receive any compensation for his
service as a director.
Determination of Director Compensation
Each year, the Comp/HC Committee, together with its independent
compensation consultant, conducts a comprehensive review of
director compensation, taking into consideration our overall
compensation philosophy, as well as competitive compensation data
from the Company’s Peer Group for the applicable year and other
relevant and comparable market data and trends. The committee
reviews, on at least an annual basis, each of the various
components of pay, the form and amount of payment, as well as the
cash/equity compensation mix. Based on this review and any
recommendations from its independent compensation consultant, the
Comp/HC Committee may make changes to director compensation to the
extent it deems appropriate. For example, in 2017 and 2018, the
Comp/HC Committee replaced Board and committee meeting fees with
annual Board and committee member retainers to better align with
peer and S&P 500 index company practices.
2022 Director Compensation
Compensation for our non-employee directors reflects a combination
of cash (annual director retainer fees and committee member
retainer fees) and equity (annual restricted stock unit awards), as
outlined in the Schedule of Director Fees below. The chairs of the
Board and each committee are also entitled to receive annual chair
retainer fees. Additionally, directors are eligible for
reimbursement for their reasonable expenses incurred in connection
with attendance at meetings or the performance of their director
duties in accordance with Company policy.
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Schedule of Director Fees for 2022-2023 Term |
|
Director
Retainer Fee |
$90,000 |
|
Chair Retainer Fees |
$100,000, Board
$20,000, Audit Committee and Risk Committee
$15,000, All other committees
|
|
Committee Member Retainer Fees |
$25,000, Audit Committee and Risk Committee
$15,000, All other committees
|
|
Equity Awards |
$240,000 (Board Chair) and $160,000 (all other non-employee
directors) in restricted stock units |
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|
The above Schedule of Director Fees reflects the following
adjustments made by the Comp/HC Committee in April 2022. These
changes were based on the committee's review of our director
compensation structure, taking into consideration peer and S&P
500 index company practices and pay levels.
•Director
Retainer Fee –
Increased each director’s annual director retainer fee from $80,000
to $90,000
•Chair
Retainer Fees
•Increased
Board Chair retainer fee from $90,000 to $100,000
•Increased
Risk Committee Chair retainer fee from $15,000 to
$20,000
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28
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
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|
SECURITY OWNERSHIP |
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|
INDEPENDENT AUDITOR MATTERS |
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|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
•Instituted
Technology Committee Chair retainer fee at $15,000 (Technology
Committee was established in April 2022)
•Committee
Member Retainer Fees
•Increased
Comp/HC, Finance and Governance/CR Committee member retainer fees
from $12,000 to $15,000
•Increased
Risk Committee member retainer fee from $12,000 to
$25,000
•Instituted
Technology Committee member retainer fee at $15,000
•Equity
Awards –
Increased each director's equity award value from $150,000 to
$160,000 except for Board Chair, whose equity award value was
increased from $225,000 to $240,000
Director Equity Compensation
Our annual equity retainer awards are typically granted to
directors in the form of restricted stock units. The awards are
approved by the Comp/HC Committee and are granted shortly after the
Company’s annual meeting of stockholders. The awards vest in full
upon the completion of the annual director term on the date of the
next annual meeting.
The determination of the number of shares to be granted to
directors is based on the 30-day average stock price from the date
of grant, rounded to the nearest dollar. New directors that join
the Board during the annual director term receive a pro-rated
award. For 2022, the Board Chair and each other director (except
Mr. King) were each granted 466 and 310 restricted stock units,
respectively. Mr. King, who joined the Board in September 2022, was
granted a pro-rated award of 297 restricted stock
units.
Deferred Equity
Non-employee directors may irrevocably elect to defer the
settlement of restricted stock unit awards until the earliest of:
(i) a specific future settlement date that meets the
requirements of Section 409A of the Internal Revenue Code of 1986,
as amended, (ii) separation from service, (iii) a change
in control, (iv) death, or (v) disability. Messrs. Daniels and
Staglin each elected to defer the settlement of his 2022 equity
grant.
Equity Plan Limits Applicable to Directors
Equity grants to directors are subject to the terms of our 2006
Equity Incentive Plan, as amended and restated, including the
following limitations (as provided under the plan):
•No
non-employee director may be granted, in any fiscal year, awards
covering shares having an initial value greater than
$500,000.
•Annual
director grants may become fully vested no earlier than the last
day of the director’s then current annual term of service, subject
to certain limited exceptions as provided under the
plan.
Director Equity Ownership Guidelines
Under the current equity ownership guidelines for our non-employee
directors, each non-employee member of the Board of Directors is
expected to hold, within five years of becoming a director, shares
of our Common Stock that have a minimum value equivalent to 600% of
the annual director cash retainer fee (currently $90,000) for
directors other than the Board Chair, who must satisfy the
requirement with respect to $190,000. The Comp/HC Committee is
responsible for setting and periodically reviewing the equity
ownership guidelines and overseeing director compliance, including
reviewing directors' holdings on a quarterly basis. Equity
ownership requirements for non-employee directors are established
based upon a competitive review and subsequent recommendations by
the committee’s independent compensation consultant. Any exceptions
to meeting the guidelines due to personal financial or other
reasons are reviewed and determined by the Comp/HC
Committee.
As of December 31, 2022, all non-employee directors had
attained the applicable ownership requirements or otherwise
remained on target to meet such requirements within the established
compliance time frame.
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SVB 2023 PROXY STATEMENT |
29
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|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
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|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
Director Compensation Table
The Director Compensation Table below sets forth the current
committee membership assignments, as well as the amounts earned or
paid to each non-employee director during the year ended December
31, 2022. Individual compensation reflects the base cash and equity
compensation, as well as incremental committee chair and membership
fees, as applicable. Each non-employee director serves on at least
one committee, ranging up to four committees.
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Board Committee Membership*
(2022 – 2023 Term)
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|
Name |
Audit |
Comp/HC |
Finance |
Gov/CR |
Risk |
Tech |
Fees Earned or Paid in Cash
($) |
Stock Awards
($)(1)
|
Total
($) |
|
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|
Beverly Kay Matthews, Board Chair |
X |
|
|
X |
X |
|
255,000 |
|
231,914 |
|
486,914 |
|
|
Eric Benhamou |
|
|
X |
C |
X |
|
160,000 |
|
154,278 |
|
314,278 |
|
|
Elizabeth “Busy” Burr |
X |
|
|
|
|
X |
130,000 |
|
154,278 |
|
284,278 |
|
|
Richard Daniels |
X |
X |
|
|
X |
C |
185,000 |
|
154,278 |
|
339,278 |
|
|
Alison Davis |
X |
X |
|
|
|
X |
145,000 |
|
154,278 |
|
299,278 |
|
|
Joel Friedman |
|
|
C |
X |
X |
|
160,000 |
|
154,278 |
|
314,278 |
|
|
Thomas King(2)
|
|
X |
|
|
|
|
63,288 |
|
71,132 |
|
134,419 |
|
|
Jeffrey Maggioncalda |
|
X |
|
|
|
X |
120,000 |
|
154,278 |
|
274,278 |
|
|
Mary Miller |
C |
|
X |
|
X |
|
175,000 |
|
154,278 |
|
329,278 |
|
|
Kate Mitchell |
|
|
X |
|
C |
X |
150,000 |
|
154,278 |
|
304,278 |
|
|
Garen Staglin |
|
C |
|
X |
X |
|
160,000 |
|
154,278 |
|
314,278 |
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|
*C
denotes committee chair
(1)Values
indicated for annual director equity awards reflect the fair value
of restricted stock units based on the closing stock price on the
applicable grant date (May 2, 2022 ($497.67) for all directors
other than Mr. King, and October 25, 2022 ($239.50) for Mr. King)
rather than the equity award calculation methodology described
above. Such values were computed in accordance with the Financial
Accounting Standards Board Accounting Standards Codification Topic
718. As of December 31, 2022: Ms. Matthews had 466
restricted stock units outstanding; Mr. King had 297 restricted
stock units outstanding; and each of the other non-employee
directors had 310 restricted stock units outstanding.
(2)Mr.
King joined the Board of Directors in September 2022 and received
compensation on a pro-rata basis.
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30
|
SVB 2023 PROXY STATEMENT |
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|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
Corporate Governance Matters
Corporate Governance
We are committed to having strong corporate governance principles
and practices, as governed by our organizational documents, as well
as our Corporate Governance Guidelines and other applicable
policies. Our principles and practices promote Board effectiveness
and are important to how we manage our business and to maintain our
integrity in the marketplace. In setting our practices, we balance
our corporate and stockholder interests, as well as applicable
market practices and trends.
Our Corporate Governance Guidelines set forth a framework for our
Company with respect to specific corporate governance practices.
The guidelines are reviewed at least annually by the Governance/CR
Committee, as well as amended from time to time to ensure they
reflect evolving best practices, regulatory requirements and
business needs. A copy of our guidelines is available on our
Corporate Governance webpage at www.svb.com under “About
Us—Investor Relations—Governance.”
Stockholder Rights
The Company’s charter documents provide our stockholders with
important rights or other features, including:
•Ability
to act by written stockholder consent;
•Proxy
access, which enables eligible shareholders to include their
nominees for election as directors in the Company's Proxy Statement
(see “Meeting and Other Information - Stockholder Proposals and
Director Nominations”);
•One
single voting class;
•Majority
voting standard for director elections (see “Meeting and Other
Information - Majority Vote Standard”)
We do not have cumulative or supermajority voting requirements, nor
do we have a “poison pill” in effect.
Communications with the Board
Individuals who wish to communicate with our Board may do so by
sending correspondence to the attention of the Board (or committee,
chair or individual director) to:
Corporate Secretary
SVB Financial Group
3003 Tasman Drive
Santa Clara, California 95054
Email: CorporateSecretary@svb.com
Telephone (408) 654-7400
Code of Conduct
We are deeply committed to maintaining the highest standards of
ethical conduct that reflect our purpose and values. A copy of our
Code of Conduct, which applies to all of our directors, executives
and employees, including our senior financial officers, is
available on our website at www.svb.com under “About Us—Investor
Relations—Governance,” or can be obtained without charge by any
person requesting it from the Corporate Secretary at the contact
information above. Employees are trained on the principles of the
Code of Conduct and must annually affirm that they have read,
understand and are in compliance with the Code of Conduct.
Violations or suspected violations of the Code of Conduct,
including matters involving ethics, discrimination or harassment,
may be reported through multiple channels, including to any member
of our Executive Committee or the Chair of the Audit Committee.
Additionally, anonymous and confidential reports of unethical
conduct can be made through our “EthicsPoint” Hotline, which may be
accessed from the internet or by calling a toll-free number and is
available 24 hours a day, seven days a week. We intend to disclose
any waivers from the Code of Ethics Provisions contained within our
Code of Conduct granted to our directors, executive
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|
SVB 2023 PROXY STATEMENT |
31
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|
PROXY SUMMARY |
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|
BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
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|
SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
officers or senior financial officers, and any substantive changes
to our Code of Conduct by posting such information on our website.
No such waivers or substantive changes were made during fiscal year
2022.
Political Activities
Our corporate responsibility includes participation in the
political and public policy process, specifically in areas that
impact the innovation economy and the banking industry, as well as
our clients, stockholders, employees, communities and business. It
is important that we engage with legislators and policymakers,
where appropriate, and support initiatives to advocate
constructively for the long-term interests of our business and our
key constituents. Our political activities are subject to the
oversight of our Governance/CR Committee, which recognizes the
importance of appropriate governance and risk management of our
corporate political activities, and reviews our activities for
alignment with our business, strategy and corporate values, as well
as compliance with applicable laws and regulations. Political
contributions are made primarily through a federal Political Action
Committee that is non-partisan and employee-funded. Political
contributions utilizing corporate funds are limited and subject to
restrictions and disclosure pursuant to our policies. For more
information, see our “Statement on Political Activities,” which may
be found on our website at www.svb.com under “About Us—Investor
Relations—Governance.” Our Statement on Political Activities aims
to ensure transparency of the Company's practices and procedures
regarding political activities and oversight by our Executive
Committee and the Board.
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32
|
SVB 2023 PROXY STATEMENT |
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|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
Certain Relationships and Related Transactions
Related Party and Insider Loan Policies
We maintain written policies and procedures governing transactions
with related persons (directors, director nominees, executive
officers, holders of more than 5% of our common stock, and any of
their immediate family members or affiliated entities (“Related
Parties”) (“related party transactions”). Generally, these policies
and procedures cover any transaction, arrangement or relationship
in which: (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
has or will have a direct or indirect material interest in the
transaction. We also maintain written policies and procedures
governing loan transactions with insiders (directors, executive
officers and principal stockholders) and their related interests,
pursuant to the applicable requirements of Regulation O of the
Federal Reserve Act (“insider loans”).
The Audit Committee has primary responsibility for reviewing
related party transactions and insider loans for potential
conflicts of interest and approving them (or denying approval, as
the case may be). The Audit Committee’s approval may be granted in
advance, ratified or delegated to the committee chair or other
member. Additionally, the Governance/CR Committee takes into
consideration related party transactions and insider loans
involving our directors as part of its annual director independence
review. Further, in accordance with Regulation O, insider loans are
subject to full Board approval; directors do not vote on or
participate in Board discussions about any transaction in which
they may have an interest.
Related Party Transactions
Ordinary Course Loan Transactions
During 2022, 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, that were (i) in the
ordinary course of business, (ii) on substantially the same
terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with other persons, and
(iii) not involving more than the normal risk of collectability or
present other unfavorable features.
Employee Matters
SVB maintains 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. Of our executive officers, Messrs. Becker,
Beck, Cox, Descheneaux, and Zuckert and Ms. Draper have each made
commitments to QIFs in aggregate commitment amounts ranging from
$150,000 to $2,550,000 depending on the number of QIF funds they
participate in.
Vendor Arrangements
Cachematrix, a cash management platform provider for the Bank’s
Cash Sweep Program, is controlled by BlackRock, Inc., which,
together with its affiliates, owns greater than 5% of our
outstanding voting securities. In 2022, we paid fees totaling
approximately $590,000 to Cachematrix. Additionally, we offer
certain BlackRock investment funds, among other third-party
investment funds, under our Cash Sweep Program. In connection with
offering BlackRock funds in our Cash Sweep Program, we earned
approximately $101.2 million in fee sharing and related revenue for
2022. Client investments in the Cash Sweep Program are initiated
and directed by clients themselves.
In addition, The Vanguard Group, which, together with its
affiliates, owns greater than 5% of our outstanding securities, is
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. Fees relating to these services rendered for the
fiscal year 2022 totaled approximately $347,000.
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|
SVB 2023 PROXY STATEMENT |
33
|
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|
PROXY SUMMARY |
|
|
BOD & CORPORATE GOVERNANCE |
|
|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
|
OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
Environmental, Social and Governance (ESG)
ESG Program Governance
Our ESG Program is supported by a robust governance framework at
both the board and management levels. The Board of Directors has
delegated primary oversight of our ESG practices to the
Governance/CR Committee. The Governance/CR Committee's oversight
includes environmental sustainability, climate change, the
Company's external diversity, equity and inclusion ("DEI")
initiatives, Board diversity, as well as our philanthropic strategy
and advocacy activities; internal DEI is overseen by the Comp/HC
Committee. The full Board and other of its committees also receive
updates on ESG-related matters. From a management perspective, our
ESG program governance includes executive oversight, dedicated
program management and a commitment to transparency and
accountability. Our ESG program is led by our Chief Marketing and
Strategy Officer, with appropriate alignment and involvement from
the Chief Executive Officer, other executive leaders and
cross-functional management support. Our ESG Program Office team,
led by our Head of Corporate Social Responsibility, is responsible
for implementing ESG programs, processes and policies and partners
across the organization to integrate ESG opportunities and risk
management into the way we do business.
Our Commitment to ESG
For 40 years, we have helped the world’s most innovative companies
and their investors move bold ideas forward fast. Our ability to
make a difference is magnified by the outsized impact our clients
often make. They develop incredible solutions — such as vaccines
and therapies, clean water and funding sources for microbusinesses
— and they create jobs around the world. Our dedication to
supporting evolving technologies enables us to contribute to the
creation of a more equitable and sustainable, low-carbon, net-zero
emission economy. This includes expanding our commitment and
investments to create a more diverse, equitable and inclusive
company culture and innovation ecosystem, highlighted in our latest
Diversity, Equity & Inclusion overview.
As described in our 2022 Environmental, Social and Governance
Report, we are currently focused on advancing six ESG strategic
initiatives:
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01 |
Engaging and empowering employees
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04 |
Supporting communities where we live and work
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02 |
Building a culture of diversity, equity and inclusion at
SVB
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05 |
Advancing the transition to a sustainable, low-carbon
world |
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03 |
Championing inclusion in the innovation economy
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06 |
Practicing responsible corporate governance |
The contents of our website referenced in this section (including
reports and other disclosures) are not deemed incorporated by
reference in this Proxy Statement.
ESG Highlights
We continue to evolve our ESG efforts and corresponding disclosures
to keep pace with the Company’s growth, seek alignment with
business opportunities, improve ESG-related risk management and
incorporate the input of our various stakeholders, including our
employees and shareholders. This summary reflects selected
highlights of our various ESG efforts during 2022, unless otherwise
indicated, and is not an exhaustive list. See below for details on
where you can find additional ESG disclosures.
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34
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Environmental
Climate
•In
January 2022, SVB committed to provide at least $5 billion in
loans, investments and other financing by 2027 to support companies
that are working to decarbonize the energy and infrastructure
industries and hasten the transition to a sustainable, net-zero
emission economy in several related sectors.
•We
also committed to reducing our own emissions and continue to take
steps to achieve carbon neutral operations, including business
travel, and 100% renewable electricity by 2025.
•We
signed on as a member of the Risk Management Association’s Climate
Risk Consortium with nearly 20 other banks.
•We
continue to conduct our greenhouse gas emissions inventory
according to the guidelines of the Greenhouse Gas Protocol; full
year 2021 data is included in our 2022 ESG Report and CDP
response.
Social
Internal DEI
•We
introduced DEI goals related to increasing representation of women
in senior leadership roles globally to 43%, as well as increasing
Black/African American and Hispanic/Latinx representation in senior
leadership roles to 5% and 6%, respectively, by 2025. Our goals
also include providing DEI education for employees and increasing
spend with diverse suppliers.
•We
published our DEI overview and continue to share our annual US
EEO-1 Report and UK Branch Gender Pay Gap Report.
•We
implemented a diversity slate initiative to ensure a diverse
candidate pool during the interview stage for senior leadership
roles.
•We
continued to engage in experiential DEI learning and
skill-building, through formal training courses and on-demand
resources designed to address bias, systemic racism and social
oppression, as well as promote allyship and inclusive
behaviors.
•We
continued supporting the Employee Resource Groups to unite diverse
groups of employees to build community, enhance career development
and contribute to professional and personal
development.
•We
continued to engage on key issues impacting underrepresented
groups, such as by creating forums for employee feedback and
discussion, including our quarterly DEI Townhalls, and providing
leadership with training and resources to help them navigate
conversations on DEI-related matters.
•We
became a signatory of CEO Action for Diversity & Inclusion, a
growing coalition pledging our commitment and advancement of
diversity and inclusion in the workplace.
Advancing Equity in the Innovation Economy
•We
remain committed to advancing underrepresented groups in the
innovation economy – particularly women and Black and Latinx
individuals, through our five-year, $50 million commitment to reach
25,000 people through our Access to Innovation platform
(2021-2025). To date against this commitment, SVB has reached more
than 17,000 individuals and deployed more than $25 million through
fellowships, internships, scholarships, and other avenues, as well
as by working with partners at Black VC, Latinx VC and Venture
Forward to reach underrepresented investors; and has made milestone
investments in and secured partnerships with organizations focused
on similar goals, such as Valence, the Boardlist and Hello
Alice.
•In
2022, we announced an equity audit to collectively review our
externally focused-DEI efforts, under the banner of the Access to
Innovation platform, and enable us to: (a) better understand how
our external DEI efforts work toward our end goal of creating a
more diverse and inclusive innovation economy; (b) assess the
Access platform’s gender and racial
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
equity impact; and (c) develop a proactive approach for responding
to any necessary remediation identified as a result of the audit.
We value the input of our shareholders and all of our stakeholders
and recognize the importance of assessing the progress and impact
of our Access platform. We expect to publish the audit findings in
Q3 2023.
•We
also launched an external advisory board for Access to Innovation
to advise, guide and help drive the program's core objectives. The
founding members comprise a diverse group of industry and thought
leaders within the innovation economy.
Community
•We
continue to make progress toward our five year, $11.2 billion
community benefits plan commitment by providing financial support
to low- and moderate-income communities in California and greater
Boston. We will report on our 2022 progress toward this commitment
in our 2023 ESG Report.
•SVB
earned an "Outstanding" rating from the Federal Reserve Bank for
our 2018-2020 CRA strategic plan.
•We
exceeded our annual, aspirational goal of giving 1% of our net
income to charitable causes in 2022 by donating approximately $20
million via our various philanthropic programs, including the SVB
Foundation.
•We
donated 21 full-ride and partial scholarships at four US-based
universities for students in need over the last two
years.
Governance
Disclosures
•We
issued our first annual ESG Report in August 2022, replacing the
annual Corporate Responsibility Report published in prior years. In
addition, we published updates to our Sustainability Accounting
Standards Board (“SASB”) framework, Task Force on Climate related
Financial Disclosures ("TCFD") framework, CDP and World Economic
Forum Stakeholder Capitalism (“WEF”) disclosures.
ESG Governance
•We
enhanced our ESG governance framework by expanding the oversight of
the Governance/CR Committee in relation to our ESG strategy and
program.
2022 Recognitions
We are proud of the recognition our ESG-related initiatives
received in 2022. For the fifth consecutive year, we were included
in Bloomberg’s Gender-Equality Index, which tracks the financial
performance of public companies committed to supporting gender
equality through policy development, representation and
transparency. We were also included in the 2022 rankings of
America’s Most JUST Companies, Newsweek’s list of America’s Most
Responsible Companies, and the Silicon Valley Business Journal and
San Francisco Business Times' lists of Top Corporate
Philanthropists. We also received the 2022 Foreign Policy
Association Corporate Social Responsibility Award.
Where You Can Find More Information
Our ESG disclosures are consistent with our longstanding commitment
to transparency and accountability. You can find our ESG
disclosures and additional information about SVB's corporate
responsibility efforts on our website under “About Us—Living Our
Values.”
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
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02 |
Proposal Two | Approval of Second Amended and Restated Certificate
of Incorporation
The Board of Directors recommends a vote
"FOR"
the approval of our Second Amended and Restated Certificate of
Incorporation to update the exculpation provision to align with
Delaware law.
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We are asking our stockholders to approve the Second Amended and
Restated Certificate of Incorporation, which reflects amendments to
align the exculpation provision with current Delaware
law.
Delaware recently amended Section 102(b)(7) of the Delaware General
Corporation Law (the “DGCL”) to allow Delaware corporations to
exculpate (i.e., to limit or eliminate the monetary liability of)
both senior officers and directors for certain fiduciary duty
breaches, as further described below. Currently, the Ninth Article
of our Amended and Restated Certificate of Incorporation provides
exculpation for directors, but not senior officers. The Company is
proposing to amend our Amended and Restated Certificate of
Incorporation to provide exculpation for senior officers, in
addition to directors, consistent with, and to the extent permitted
by, Delaware law.
The Board has approved the Second Amended and Restated Certificate
of Incorporation, subject to approval from our stockholders at the
Annual Meeting. The general description of the amendment to our
Amended and Restated Certificate of Incorporation is a summary only
and is qualified in its entirety by, and subject to, the full text
of the proposed Second Amended and Restated Certificate of
Incorporation, which is included as Appendix A to this Proxy
Statement, marked with underlines and strike outs to show the
relevant additions and deletions, respectively.
Background
Section 102(b)(7) of the DGCL previously permitted Delaware
corporations to exculpate directors, but not officers. Last August,
the Delaware legislature amended Section 102(b)(7) to permit
Delaware corporations to exculpate certain senior officers, in
addition to directors. However, for both directors and officers,
the amended Section 102(b)(7) does not permit exculpation with
respect to breaches of the duty of loyalty; acts or omissions not
in good faith or those that involve intentional misconduct or a
knowing violation of law; or any transactions in which a director
or officer derived an improper personal benefit. Further,
specifically for senior officers, the amended Section 102(b)(7)
only permits exculpation for direct claims brought by stockholders
(as opposed to derivative claims made by stockholders on behalf of
the corporation, with respect to which exculpation of officers is
not permitted).
To keep our exculpation provision aligned with the amended Section
102(b)(7), we are proposing to update the exculpation provision in
the Ninth Article of our Amended and Restated Certificate of
Incorporation. If the Second Amended and Restated Certificate of
Incorporation is approved by our stockholders, directors and
certain senior officers will be exculpated from monetary liability
from certain breaches of fiduciary duty, solely to the extent
permitted by Section 102(b)(7) of the DGCL.
Reasons for the Amendment
The Board believes that providing exculpation to senior officers
(to the extent permitted by Delaware law) is important,
particularly for a financial services company like us, in order to
attract and retain executive talent who can deliver a high level of
performance for our stockholders. Exculpation has been available to
directors of Delaware corporations for a long time, and we expect
our peers to exculpate their senior officers now that Delaware law
permits such exculpation. If our peers adopt such exculpation
provisions and we do not, our ability to attract and retain highly
qualified officer candidates in this competitive marketplace may be
adversely impacted. In particular, officer candidates for financial
sector companies often weigh the benefits of serving as an officer
with
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
potential exposure to liability, costs of defense and other risks
of proceedings, given the current litigious environment and the
complex regulatory environment in which we operate.
In addition, adopting an exculpation provision that aligns with
current Delaware law could prevent costly and protracted litigation
that distracts our directors and senior officers from important
operational and strategic matters. Our directors and senior
officers are often called upon to make decisions on crucial matters
in response to time-sensitive challenges and opportunities,
including in light of changes in macroeconomic conditions and the
evolving regulatory landscape. In the current litigious
environment, these decisions can create substantial risk of claims,
actions, suits or proceedings seeking to impose liability on the
basis of hindsight. An exculpation provision that aligns with
current Delaware law would empower both directors and senior
officers to exercise their business judgment in furtherance of
stockholder interests. On the other hand, even under the amended
exculpation provision, our directors or senior officers would not
be protected from liability for breaches of the duty of loyalty,
acts or omissions not in good faith or those that involve
intentional misconduct or a knowing violation of law, or any
transactions in which a director or officer derived an improper
personal benefit.
For these reasons, the Board believes this proposal to approve the
Company’s Second Amended and Restated Certificate of Incorporation,
which would update the exculpation provision to align with Delaware
law, is in the best interests of the Company and our stockholders.
If stockholders approve this Proposal No. 2, the Company’s Second
Amended and Restated Certificate of Incorporation will become
effective upon its filing with the Delaware Secretary of State,
which we anticipate doing as soon as practicable following
stockholder approval.
Our Board of Directors recommends that stockholders vote “FOR” the
approval of the Company’s Second Amended and Restated Certificate
of Incorporation to update the exculpation provision to align with
Delaware law.
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SVB 2023 PROXY STATEMENT |
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 Silicon Valley Bank (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 his or her biography below.
In 2022, we welcomed two new executives: Laura Cushing, Chief Human
Resources Officer, and Kim Olson, Chief Risk Officer. Ms. Cushing
and Ms. Olson bring to the executive team strong experience leading
human resources and risk functions, respectively, at large, complex
organizations.
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Name |
Age
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Principal Occupation |
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Greg Becker |
55
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President and Chief Executive Officer |
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Dan Beck |
50
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Chief Financial Officer |
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Philip Cox |
56
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Chief Operations Officer |
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Laura Cushing |
54 |
Chief Human Resources Officer |
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Michael Descheneaux |
55
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President, Silicon Valley Bank |
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Michelle Draper |
55
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Chief Marketing and Strategy Officer |
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Kim Olson |
58 |
Chief Risk Officer |
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Michael Zuckert |
64
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General Counsel |
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Executive Biographies
Greg Becker’s
biography can be found under “Proposal No. 1—Election of
Directors” above.
Dan Beck,
Chief Financial Officer,
joined us in June 2017 and is responsible for our finance, treasury
and accounting functions. Before joining the Company in 2017, Mr.
Beck served as the Chief Financial Officer for Bank of the West,
then a subsidiary of BNP Paribas Group, from June 2015 to May 2017
and as Executive Vice President and Corporate Controller from June
2008 to June 2015. Prior to his tenure at Bank of the West, Mr.
Beck held various finance and accounting roles with Wells Fargo
Bank, the Federal Home Loan Mortgage Corporation, E*TRADE Financial
Corporation and Deloitte & Touche LLP. Mr. Beck holds a
Bachelor’s degree in Accounting from Virginia Commonwealth
University and a Bachelor’s degree in Biology from Virginia
Polytechnic Institute and State University.
Philip Cox,
Chief Operations Officer,
is responsible for our core operations, enterprise project
management, client service and information technology teams. Mr.
Cox joined us in 2009 as Head of UK, Europe & Israel, and was
appointed Head of Europe, Middle East and Africa and President of
the UK Branch in 2012, where he was focused on the international
development of our business and was responsible for our UK Branch,
prior to his appointment to his current role in 2019. 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 his tenure at Torex Retail PLC, Mr. Cox spent
approximately 23 years with NatWest/RBS Group in a variety of
positions, including Managing Director of Transport and
Infrastructure Finance,
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
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).
Laura Cushing,
Chief Human Resources Officer,
oversees our human resources function, which includes our
compensation, global mobility, recruiting and learning and
development functions. Before joining the Company, Ms. Cushing
served as the Chief Human Resources Officer for Loews Corporation,
a diversified holding company, from 2016 to 2022. Prior to Loews,
Ms. Cushing held various leadership roles at JPMorgan Chase &
Co., including Head of Talent Management and Organizational
Development and roles in the wholesale, consumer banking and
corporate business groups. Ms. Cushing holds a Bachelor’s degree in
Psychology from The University of Rhode Island and a Master’s
degree in Human Resource Development from Villanova
University.
Michael Descheneaux,
President, Silicon Valley Bank,
oversees the Company’s global commercial bank, private bank and
funds management businesses, as well as credit administration. Mr.
Descheneaux joined us in 2006 as Managing Director of Accounting
and Financial Reporting, and was appointed as Chief Financial
Officer in 2007, where he was responsible for all our finance,
treasury, accounting and legal functions, as well as our funds
management business until he assumed his current role in 2017.
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 Bachelor’s degree in Business Administration
from Texas A&M University. He is also a certified public
accountant, as well as a member of the Texas State Board of Public
Accountancy.
Michelle Draper,
Chief Marketing and Strategy Officer,
is responsible for leading the corporate strategy, marketing,
R&D and client capabilities to best serve clients and drive
business results. Prior to joining us in 2013, Ms. Draper held
various senior-level marketing positions at Charles Schwab &
Co. (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 Bachelor’s 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.
Kim Olson,
Chief Risk Officer,
is responsible for leading our enterprise-wide risk management,
corporate compliance and regulatory functions. Ms. Olson joined the
Company from Sumitomo Mitsui Banking Corporation (SMBC), a Japanese
multinational banking and financial institution, where she served
as Co-General Manager (Risk Management Department, Americas
Division) and Chief Risk Officer (Americas) from 2018 to 2022 and
Executive Officer of SMBC and Sumitomo Mitsui Financial Group from
2021 to 2022. Prior to that, Ms. Olson held senior positions at
various multinational organizations, including Senior Managing
Director, Enterprise Risk Management at AIG (2013-2017), Principal
at Deloitte & Touche (2011-2013) and Managing Director at
Deutsche Bank (2007-2010). She previously held a variety of senior
policy, regulatory and examination roles in banking supervision at
the Federal Reserve Bank of New York over a period of ten years.
Ms. Olson holds a Bachelor's degree in Political Science from Santa
Clara University and a Master's degree in Public Administration
from Harvard University.
Michael Zuckert,
General Counsel,
is responsible for all our legal and government affairs matters.
Prior to joining the Company in 2014, 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 company’s
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 is a director of the
Law Foundation of Silicon Valley, a member of the leadership
council of Tech:NYC and a member of the Investment Committee of
Waterman Ventures as well as an advisory member of the Board of the
Silicon Valley Directors’ Exchange. He holds Bachelor’s 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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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
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03 |
Proposal Three | Advisory Approval of Our Executive
Compensation
The Board of Directors Recommends a Vote
“FOR”
the Approval of the Compensation of our Named Executive Officers,
as Disclosed in this Proxy Statement.
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In accordance with the requirements of Section 14A of the Exchange
Act and the related rules of the SEC, we are seeking a non-binding,
advisory vote (otherwise known as "Say on Pay") to approve the
compensation of our Named Executive Officers ("NEOs"), as described
in the "Compensation Discussion and Analysis" section of this Proxy
Statement. This vote allows our stockholders to indicate their
support for our executive compensation program for our NEOs,
including their overall compensation and our compensation
philosophy, policies and practices, by voting “FOR” the following
resolution:
“RESOLVED, that the compensation paid to the Company’s named
executive officers, as disclosed pursuant to Item 402 of Regulation
S-K, including the Compensation Discussion and Analysis,
compensation tables and narrative discussion, is hereby
APPROVED.”
Because your vote is advisory, it will not be binding upon the
Board or the Comp/HC Committee. However, the Board and Comp/HC
Committee value the opinion of our stockholders and will take into
consideration the outcome of this advisory vote when considering
future executive compensation arrangements. Stockholders are
encouraged to carefully review the following “Compensation
Discussion and Analysis” and “Compensation for Named Executive
Officers” sections for a detailed discussion of our executive
compensation program for our NEOs.
We currently conduct "Say on Pay" votes on an annual basis. Under
Proposal No. 4 of this Proxy Statement, we are separately seeking a
non-binding, advisory vote to approve continuation of an annual
frequency for "Say on Pay" votes.
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SVB 2023 PROXY STATEMENT |
41
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
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04 |
Proposal Four | Advisory Approval of Frequency of "Say on Pay"
Votes
The Board of Directors recommends an
ANNUAL
frequency of future "Say on Pay" votes.
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In accordance with the requirements of Section 14A of the Exchange
Act and the related rules of the SEC, we are seeking a non-binding,
advisory vote (otherwise known as "Say on Frequency") on how
frequently we should seek an advisory vote, or Say on Pay, on the
compensation of our NEOs. Stockholders may indicate whether they
prefer a Say on Pay vote on an annual (every one year), biennial
(every two years) or triennial (every three years)
basis.
Our Board has determined that an annual Say on Pay vote remains the
most appropriate for our stockholders. Our Board values the
opinions of our stockholders and believes that an annual vote will
continue to allow our stockholders to provide us with direct input
on our executive compensation program for our NEOs each
year.
Because your vote is advisory, it will not be binding upon the
Board. However, the Board will take into consideration the outcome
of the vote when considering how frequently to submit an advisory
"Say on Pay" proposal for stockholder approval.
Our Board of Directors recommends that stockholders vote for an
ANNUAL frequency of future "Say on Pay" votes.
It is expected that the next Say on Pay frequency vote will occur
at the 2029 annual meeting of our stockholders.
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42
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Compensation & Human Capital Committee Report
This Compensation & Human Capital Committee Report shall not be
deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing
under the Act or the Exchange Act, except to the extent that we
specifically incorporate the information contained in the report by
reference, and shall not otherwise be deemed filed under such
acts.
The Compensation & Human Capital Committee has reviewed and
discussed with management the Compensation Discussion and Analysis
set forth in this Proxy Statement. Based on this review and these
discussions, the Compensation & Human Capital Committee
recommended to our Board of Directors that the Compensation
Discussion and Analysis be included in our Annual Report on Form
10-K for the year ended December 31, 2022 and this Proxy
Statement.
This report is included herein at the direction of the members of
the Compensation & Human Capital Committee.
Compensation & Human Capital Committee
Garen Staglin (Chair)
Richard Daniels
Alison Davis
Thomas King
Jeffrey Maggioncalda
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SVB 2023 PROXY STATEMENT |
43
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) discusses
the compensation philosophy, methodology and structure of our 2022
executive compensation program, primarily as it relates to our
“named executive officers” (“NEOs”) for 2022 listed
below.
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Greg Becker - President & CEO
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Philip Cox - Chief Operations Officer
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Dan Beck - Chief Financial Officer
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Michael Zuckert - General Counsel
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Michael Descheneaux - President of Silicon Valley Bank
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Laura Izurieta - Former Chief Risk Officer*
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*Ms.
Izurieta departed the Company on October 1, 2022. For additional
information, please see "Compensation For Named Executive
Officers—Summary Compensation Table" and "Compensation For Named
Executive Officers—Other Post-Employment Payments"
below.
Overview of 2022 Executive Compensation
The Company overall delivered a healthy year of financial
performance and business growth despite a challenging macroeconomic
environment. We continued to focus our attention on developing
strategies and solutions to continue to support clients and
partners to innovate and thrive, heightening our focus on risk
management and controls, prioritizing and supporting our business
and people, and supporting a culture that promotes the growth of
our employees. We also continued to maintain our core compensation
strategy and objectives, including pay for performance, appropriate
risk management and talent retention. As further explained in this
CD&A, our key areas of focus in 2022 were:
•Maintaining
our core executive compensation program which emphasizes pay for
performance, particularly long-term performance (in an effort to
align with stockholders’ interests and drive accountability),
consistent with prior years.
•Continuing
to focus on risk management as a key component of compensation
decisions.
•Expanding
our focus on human capital, including DEI initiatives and
leadership development and succession planning.
Our pay decisions reflected our 2022 performance. In determining
executive compensation for 2022, the Comp/HC Committee took into
consideration actual performance against targets, as well as the
market challenges that impacted our performance, including balance
sheet pressures and declines in stock price performance.
Accordingly, annual ICP was funded below target, and individual
awards were adjusted based on performance, resulting in payments
for eligible NEOs between 46% and 91% of applicable ICP targets.
Long-term performance-based equity awards for 2020-2022 were
partially earned at 62.5% of target.
Our executive compensation strategy is based on our commitment to
effectively drive the Company’s sustainable, long-term global
growth and strategy, as well as to hold management accountable for
performance.
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44
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
2022 Executive Compensation Elements At-A-Glance
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CASH
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EQUITY
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Salary
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ICP
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PRSUs
(50%)
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Stock Options
(25%)
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RSUs
(25%) |
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Purpose |
Designed to attract and retain experienced executives. Reflects
scope of leadership, years of experience, skills, market
competitiveness and on-going individual performance. |
Short-term incentive designed to reward based on financial
performance and achievement of individual goals and
objectives. |
Long-term incentive designed to align executives with stockholder
interests by aligning payouts to financial performance relative to
peers. |
Long-term incentive designed to align executives with stockholder
interests by aligning payouts to share price performance over
time. |
Long-term incentive designed to align executives with stockholder
interests and retain executives. |
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Performance Period |
Ongoing
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1-Year
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3-Year
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4-Year Vesting Period
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Performance Measures |
- |
ROE*
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TSR*
ROE*
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Stock Price Appreciation^
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^RSU
and stock option awards are based on a fixed number of shares at
the time of grant; any incremental value realized above the grant
value of RSUs and stock options, as well as earned PRSUs, is based
on stock price appreciation.
*Includes
measurement of performance relative to peers.
2022 Executive Compensation Highlights
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$1.5B |
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$25.35 |
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12.14% |
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(66)% |
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Net Income |
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EPS |
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ROE
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TSR
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Pay for Performance
Despite broader market conditions, we delivered a year of solid
strategic execution, business and new client growth and healthy
financial performance, resulting in total net income, EPS, ROE and
TSR performance for the year 2022 as highlighted above. Other
notable accomplishments included: growing our workforce and talent
base across business units and jurisdictions, continuing support of
our clients and employees operating in a predominantly virtual
environment and further advancing our DEI initiatives.
The Comp/HC Committee’s compensation decisions for 2022 reflected
our overall performance balanced with prudent risk taking,
commitment to maintaining our company’s strong culture and values,
and further definition of and collaboration across business units.
Compensation was determined reflective of actual performance and
the market challenges that impacted our performance, including
balance sheet pressures and declines in stock price performance.
Individual annual ICP awards were adjusted
accordingly.
As further discussed in this CD&A, specific performance metrics
for 2022 annual and long-term incentive awards include ROE and TSR,
and in certain cases our performance is measured relative to peer
performance. More specifically, ROE is a performance metric for
both our annual ICP funding and PRSU
awards. This is an intentional design by the Comp/HC Committee,
because it believes that ROE is the most appropriate indicator of
our short-term and long-term financial performance as it
demonstrates how efficiently the Company is using capital invested
by shareholders to generate profit. We use ROE both on an absolute
basis and relative to peers. While the Comp/HC Committee has
considered other more absolute measures of earnings (e.g., EPS or
Net Income) in place of ROE in either the long-term or the
short-term plan, the committee believes ROE is a preferred metric
to assess profitability and shareholder return.
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SVB 2023 PROXY STATEMENT |
45
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
2022 NEO Pay
In designing the 2022 compensation structure, we continued to
emphasize long-term, performance-based pay. 90% of our CEO's total
target pay and 81% of our other NEOs' total target pay is at risk
and subject to Company/individual performance. Total target pay
consisted of 2022 annual base salary, target ICP value and target
annual equity award grant value for PRSUs, RSUs and stock options.
We place greater emphasis on long-term, performance-based pay in
our target pay mix set forth below relative to our 2022 Peer Group.
Compared with Mr. Becker's target pay mix shown below, the average
target pay mix for CEOs in our Peer Group is 63% long-term pay and
37% short-term pay.^
*Excludes
former executive, Ms.Izurieta.
^Based
on our 2022 Peer Group and peer compensation data available at the
time of determination of Mr. Becker’s 2022
compensation.
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46
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Executive Compensation – Summary of Key Features
The key features of our executive compensation programs and
practices align with our executive compensation philosophy and
program objectives, align with stockholder interests, reflect best
practices and discourage and mitigate excessive risk
taking.
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What We Do |
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a |
Pay for performance:
90% of our CEO's total target compensation and 81% of our other
NEOs' target compensation is "at-risk" based on Company and share
price performance.
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a |
Align with stockholders:
71% of our CEO's target compensation and 59% of our other NEOs'
target compensation is based on long-term incentives.
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a |
Incentivize both short- and long-term performance:
Balanced performance metrics to drive both short-term and long-term
objectives utilizing performance metrics focused on stockholder
return (including ROE and relative TSR).
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a |
Align compensation decisions to peer group and best
practices:
Review market data from our peer group as well as other financial
services firms.
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a |
Value stockholder feedback:
We conduct an annual Say on Pay vote (89% approval in 2022) and
solicit feedback from stockholders throughout the
year.
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a |
Require significant stock ownership:
Our executives are subject to rigorous stock ownership
requirements.
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a |
Retain an Independent Compensation Consultant:
We engage an independent compensation consultant who reports
directly to the Comp/HC Committee.
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a |
Discourage unnecessary risk taking:
With oversight of performance and compensation practices that
maintain sound risk management and promote compliance with laws,
regulations and policies, the Comp/HC Committee can adjust payouts
for negative risk outcomes.
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a |
Maintain strong hedging and pledging restrictions:
By policy, executives are not permitted to hedge, sell puts, sell
shorts or sledge our securities.
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a |
Pay severance upon a "double trigger" qualifying termination in the
event of a change in control. |
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a |
Maintain recoupment/clawback policy:
We can recoup annual incentive payments and long-term incentive
compensation, including upon a financial restatement or detrimental
conduct.
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What We Don't Do |
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X |
Provide tax gross-ups in the event of a change in control:
Under our executive Change in Control Plan, there are no 280G
excise tax gross-ups.
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X |
Allow repricing of underwater stock options:
We cannot re-price outstanding stock options without stockholder
approval.
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X |
Provide enhanced benefits plans for our NEOs:
Our NEOs generally participate in the same retirement, health and
welfare plans broadly available to all U.S. employees. The Company
does not sponsor any pensions or supplemental retirement (SERP)
plans for executives.
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X |
Offer excessive perquisites to our NEOs. |
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X |
Enter into individual employment agreements with our NEOs:
Except for our at-will offer letters, we do not have any individual
employment agreements for our NEOs.
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SVB 2023 PROXY STATEMENT |
47
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PROXY SUMMARY |
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|
BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Executive Compensation Program Objectives
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Pay for Performance
Link pay to Company and individual performance, with long-term
emphasis
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Pay Competitively
Pay based on external market standards, while considering internal
parity
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Top Executive Talent
Attract and retain a cohesive, top-talent executive
team
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Governance
& Risk Management
Focus on strong governance and sound risk management
practices
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Stockholder Alignment
Align interests with our stockholders and other stakeholders (e.g.,
rewarding increase in total franchise value)
|
Our compensation philosophy and program also take into account
considerations including: our business and strategic objectives of
sustainable long-term global growth; the relative complexity our
business diversity represents in an organization of our size;
emerging trends in executive compensation (particularly for
financial institutions); and market practices.
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Glossary of CD&A Terms
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DCP
DEI
EPS
ERM
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–Deferred
Compensation Plan
–Diversity,
equity and inclusion
–Earnings
Per Share
–Enterprise-wide
Risk Management
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ICP
NEO
PRSU
|
–Incentive
Compensation Plan (annual cash incentive plan)
–Named
Executive Officer
–Performance-Based
Restricted Stock Unit
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ROE
RSU
TSR
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–Return
on Equity
–Restricted
Stock Unit
–Total
Stockholder Return
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48
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
Compensation Governance and Risk Management
Role of Compensation & Human Capital Committee and the
Independent Board Members
All members of the Comp/HC Committee are “independent” under
applicable NASDAQ rules. The Comp/HC 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 program objectives described above. More specifically,
the Comp/HC Committee determines compensation strategy, establishes
applicable performance goals and metrics, selects forms of
compensation, determines the overall pay mix, sets target pay
levels, and approves final executive compensation
awards.
In the case of the CEO, the Comp/HC Committee makes recommendations
about CEO pay decisions for approval by the independent members of
the full Board (all Board members except the CEO, acting as a
committee). Subject to the recommendation of the Comp/HC Committee,
all of the independent directors of the Board review and approve
the compensation for the CEO. Such review and approval are
conducted during executive sessions, where neither the CEO nor any
other member of management is present. In the case of all other
non-CEO executives, as well as other key positions, the Comp/HC
Committee reviews and approves the compensation of such
individuals. The determination of compensation awards for all
non-CEO positions is conducted during executive sessions, where the
CEO may participate at the Comp/HC Committee’s
invitation.
The Comp/HC Committee regularly monitors performance against
established goals, approves funding accruals, and focuses on other
aspects of the compensation program, including, among other things,
peer group review and determination, compensation risk review, and
monitoring of market and governance trends impacting
compensation.
In carrying out its oversight responsibilities, the Comp/HC
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 Comp/HC Committee also makes recommendations for
all other compensation-related matters that require full Board
approval.
The Comp/HC Committee meets on a regular basis, and routinely meets
in executive sessions without management present. During 2022, the
committee held 11 meetings, including a separate annual session
dedicated to enhancing compensation strategy based on the direction
of the business and market trends and discussing the broader HR
strategy as it relates to attracting and retaining talent,
succession planning, and diversity, equity and inclusion. In 2023,
the Comp/HC Committee held two meetings to assess achievement of
Company and individual performance objectives, review individual
performance against established risk management parameters and make
2022 short-term compensation decisions.
Role of Chief Executive Officer
At the Comp/HC Committee’s request, our CEO will attend portions of
the Comp/HC Committees' meetings and certain executive sessions to
discuss the Company’s performance and compensation-related matters,
as well as his recommendations for compensation for our executives
of the Company (excluding himself). The CEO does not participate in
any deliberations relating to his own compensation. The Comp/HC
Committee considers the CEO’s input and recommendations, but
retains full discretion to approve all non-CEO executive
compensation (and the independent members of the full Board have
discretion to approve CEO compensation, as described
above).
Role of Compensation & Human Capital Committee
Consultant
Consistent with prior years, the Comp/HC Committee retained 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 committee’s
charter. The Comp/HC Committee, in its sole discretion, selects the
consultant and determines its compensation and the scope of its
responsibilities.
In 2022, Pay Governance assisted the Comp/HC Committee with: advice
and recommendations regarding the Company’s compensation philosophy
and strategies; advice on director and executive compensation
levels and practices, including review and
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SVB 2023 PROXY STATEMENT |
49
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
recommendations on director, CEO and other executive compensation
and evaluation of CEO pay and Company performance; assessment of
realizable pay and performance; advice on the Company’s peer group;
guidance on the design of the Company’s compensation plans and
policies, including recoupment policy and executive/director stock
ownership guidelines; evaluation of performance metrics and peer
performance; assistance with the Comp/HC Committee’s annual
compensation risk review; and periodic reports to the Comp/HC
Committee on market and industry compensation trends and regulatory
developments.
Pay Governance provides services only to the Comp/HC Committee, and
not to the Company, and did not provide any additional services to
the Comp/HC Committee outside of executive and director
compensation consulting during 2022. The Comp/HC Committee does not
believe there were any potential conflicts of interest that arose
from any work performed by Pay Governance during 2022.
Compensation & Human Capital Committee – Key Areas of
Focus
Prudent Risk Management
Prudent risk management is a primary area of oversight of the
Comp/HC Committee. At the direction of the Comp/HC Committee and in
coordination with the Risk Committee, Pay Governance conducts an
annual review of the Company’s incentive programs, including design
and risk assessments. Additionally, management performs an annual
risk assessment of certain compensation plans, which includes
back-testing of awards to evaluate against plan design, governance
and risk mitigation. Our Chief Risk Officer (in the case of 2022,
Risk senior leadership) reviews and shares input on those risk
assessments, and discusses with the Comp/HC Committee the safety
and soundness of our compensation programs (including plan design
and execution), and any recommendations. Based on these assessments
and discussions, we do not believe that our compensation program
promotes excessive risk taking or creates risks that are reasonably
likely to have a material adverse effect on the
Company.
Moreover, from time to time, the Comp/HC Committee may implement
policies or other tools to strengthen compensation risk management,
such as the Company’s Recoupment Policy, which applies to our
executives, certain senior level employees and other material risk
takers. See “Executive Benefits and Other Executive
Compensation-Related Matters—Compensation
Recoupment Policy” below.
In 2022, the Comp/HC Committee adopted a formalized framework for
assessing risk taking across four different evaluation areas for
all NEOs (including the CEO), including (i) performance against
stated risk management goals, (ii) performance against assigned
risk-related objectives and key results, (iii) qualitative feedback
on risk behaviors from risk partners in the second line of defense
and (iv) analysis of any key risk events or deficiencies. As
demonstrated in the "Executive Compensation Pay
Decisions—ICP-2022
NEO Awards" section below, risk management played a significant
role in determining ICP payouts in 2022.
The safety and soundness of our compensation programs are routinely
discussed at the Board level, both with and without the CEO
present. In particular, the chair of our Comp/HC Committee reports
to and discusses compensation matters with the full Board and the
Risk Committee. The chair of the Comp/HC Committee (Mr. Staglin) is
also a member of the Risk Committee. Additionally, certain
compensation matters are also reviewed by the Audit Committee,
specifically those related to exclusions under our
performance-based funding arrangements, where
applicable.
Competitive Benchmarking Against Peers
The Comp/HC Committee routinely benchmarks and compares our
compensation and performance against selected peer companies,
utilizing this information as a reference for setting pay and
making pay decisions. The Comp/HC Committee, with its compensation
consultant and management, conducts a review, at least annually, of
the composition of the Company’s peer group to determine whether
any changes are warranted. In its determination, the Comp/HC
Committee considers a variety of factors and characteristics
including, among other things, banking industry, business model,
product offering, complexity of the business, geography, market
capitalization, asset size, assets under management, number of
employees, performance on financial and market-based measures,
brand, and extent they compete with our business, as well as for
talent. For example, in conducting its review, the Comp/HC
Committee takes into account the increase in growth and complexity
of our business, and the impact of such
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50
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
growth on demands on our existing talent, any further
specialization needs for our workforce, as well as increased
competition for our talent with other institutions of similar
sophistication within the industry.
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2022 Peer Group |
|
Capital One Financial Corporation |
First Republic Bank |
PNC Financial Services Group, Inc. |
Truist Financial Corporation |
|
Charles Schwab Corporation |
KeyCorp |
Regions Financial Corporation |
U.S. Bancorp |
|
Citizens Financial Group, Inc. |
M&T Bank Corporation |
Signature Bank |
|
|
Fifth Third Bancorp |
Northern Trust Corporation |
State Street Corporation |
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|
For 2022, the Comp/HC Committee selected 14 peer companies (listed
above), based on its review of the evaluation criteria (described
above). The peer group benchmarking review for 2022 compensation
was conducted in November 2021 and was based on our size and
business scope at that time. Given the Company's growth in 2021,
several changes were made to the peer companies in order to reflect
our business and size. Compared with the peer group from 2021, we
added Capital One Financial Corporation, The Charles Schwab
Corporation, PNC Financial Services Group, Inc., State Street
Corporation, Truist Financial Corporation and U.S. Bancorp to our
peer group. Given the large growth in our business in 2021, we
removed Associated Banc Corp, BOK Financial Corporation, Comerica
Incorporated, Cullen/Frost Bankers, Inc., East West Bancorp Inc.,
Huntington Bancshares, Webster Financial Corp., and Zions
Bancorporation.
The Comp/HC Committee does not solely rely on comparative data from
the peer group in making compensation decisions. Such comparative
data provides helpful market information about our peer companies
as a reference, but the Comp/HC Committee does not target any
specific positioning or percentile, nor does it use a formulaic
approach, in determining executive pay levels. The Comp/HC
Committee may refer to other banks or financial companies outside
of the peer group for additional benchmarking comparative
information. It also utilizes other resources, including published
compensation surveys (from Willis Towers Watson and McLagan), proxy
statements and other available compensation data. All such
comparative peer data and supplemental resources are considered,
along with the Company’s pay for performance and internal parity
objectives. All applicable information is reviewed and considered
in aggregate, and the Comp/HC Committee does not place any
particular weighting on any one factor.
Performance-Based Compensation – Design and Assessment
Another primary area of focus of the Comp/HC Committee is the
design of performance-based compensation, including selecting and
setting appropriate performance metrics and measuring actual
performance against those metrics. The Comp/HC Committee monitors
performance of current year performance-based awards, as well as
designs and plans performance metrics for future years. In
designing performance metrics, the Comp/HC Committee reviews market
and peer practices, as well as seeks the input of the full Board
and the CEO to take into account key areas of strategic and
business focus.
As further discussed in this CD&A, specific performance metrics
for recent annual and long-term incentive awards include ROE and
TSR, and in certain cases our performance is measured relative to
peer performance. More specifically, ROE is a performance metric
for both our annual ICP funding and PRSU
awards. This is an intentional design by the Comp/HC Committee
because it believes that ROE is the most appropriate indicator of
our short-term and long-term financial performance as it
demonstrates how efficiently the Company is using capital invested
by shareholders to generate profit. We use ROE both on an absolute
basis and relative to peers. While the Comp/HC Committee has
considered other more absolute measures of earnings (e.g., EPS or
Net Income) in place of ROE in either the long-term or the
short-term plan, the committee believes ROE is a preferred metric
to assess profitability and shareholder return.
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SVB 2023 PROXY STATEMENT |
51
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
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|
SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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|
MEETING & OTHER INFORMATION |
Determination of Compensation for Individual
Executives
In making compensation decisions or recommendations for individual
executives, the Comp/HC Committee takes into consideration the
performance reviews conducted for each executive. The Comp/HC
Committee meets with the CEO to discuss his assessment of the
performance of the other executives, based on their self-reviews
and the CEO’s own evaluation of their performance. Additionally, an
independent assessment of each executive's risk management and
risk-related behaviors is completed by our second line of defense
risk leaders and provided to the CEO and Comp/HC Committee for
executives other than the CEO and to the full Board for the CEO.
The independent members of the Board meet and discuss, without the
CEO present, their collective performance assessment of the CEO,
taking into consideration his self-review, each Board member’s
individual evaluation, and the independent assessment by the second
line of defense. (See “Oversight of CEO and
Executives—Annual
CEO Performance Evaluations” under the “Corporate Governance and
Board Matters” section of this Proxy Statement.)
Executives are evaluated based on individual performance and
overall contributions, in addition to Company performance against
the broader corporate performance metrics discussed above.
Specifically, individual evaluation criteria may include, among
other things: skills and expertise, demonstrated leadership,
development and execution of strategy, span of responsibility,
achievement of corporate and individual goals, risk management,
talent management, regulatory compliance and alignment with the
Company’s core values. The overall performance assessment by the
Comp/HC Committee (or the Board) of each individual executive is
also taken into consideration in setting the executive’s total
target compensation for the following year.
Committee Decisions
The performance metrics utilized for executive compensation, where
applicable, are largely used for target funding determination
purposes. Funding determinations guide decisions for actual awards
to executives by the Comp/HC Committee (or in the case of the CEO,
the Board) at its discretion. We believe that discretion, when
judiciously applied, is an important part of our compensation
decision processes, as it allows the Comp/HC Committee (or in the
case of the CEO, the Board) to better link executive pay to actual
performance, or take into account extraordinary considerations.
Discretion, both positive and negative, allows directors to make
appropriate pay decisions based on their informed business
judgment, particularly in circumstances where there may be other
relevant performance factors or unforeseen circumstances that
should be considered beyond the actual performance metrics, such as
risk management. The Comp/HC Committee believes that a balanced
utilization of performance metrics and committee discretion leads
to appropriately calibrated compensation for executives or the
broader employee base.
Enhanced Focus on Human Capital
In 2022, the Comp/HC Committee, along with the full Board,
continued to focus on various human capital-related matters. In
particular, the committee focused on internal DEI initiatives, such
as increasing representation of females and underrepresented
minorities among the Company’s leadership, fair pay analyses,
training and educational opportunities, employment awareness
programs and resource groups, and promoting an inclusive culture.
The Comp/HC Committee also focused on talent management, including
leadership development, succession planning, competition for
talent, workforce growth and culture. Additionally, the committee
continued to focus on the future of work in an increasingly virtual
environment, balancing employee flexibility, internal collaboration
and engagement, as well as business needs.
Annual Say on Pay
We submit an advisory vote on executive compensation, or Say on
Pay, to our stockholders on an annual basis. Our Board 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. We are once again submitting our
Say on Pay frequency proposal for stockholders' advisory vote this
year and our Board is recommending that we continue our Say on Pay
advisory vote on an annual frequency. See "Proposal No. 4 -
Advisory Approval of Frequency of "Say on Pay" Votes."
In 2022, 89% of the votes cast approved, on an advisory basis, our
2021 executive compensation program (as described in our 2022 proxy
statement). In light of the voting support and feedback we have
received from our stockholders (as described below),
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52
|
SVB 2023 PROXY STATEMENT |
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|
|
PROXY SUMMARY |
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|
BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
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|
SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
the Comp/HC Committee maintained consistency in our executive
compensation philosophy, policies and overall program, and did not
make any material changes. We continue to carry out our executive
compensation program based on our key philosophy and objectives as
described above. The Comp/HC 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.
Stockholder Alignment and Engagement
Aligning our executives’ interests with our stockholders’ interests
is important. We use performance metrics tied to stockholder return
for our performance-based incentive awards: total stockholder
return and return on equity. We measure performance against our own
goals and/or relative to our peer performance.
In addition to our active stockholder engagement activities
throughout the year (more than 350 meetings in person and virtually
with current, past and potential stockholders conducted in 2022),
we reach out to our larger stockholders to invite their feedback on
proxy matters, including their views about our executive
compensation program. Feedback from stockholders is important to
consider, and we value opportunities to seek their
input.
Executive Compensation Pay Decisions
In deciding compensation for our executives, the Comp/HC Committee
(and in the case of the CEO, the Board) reviews each executive’s
total target compensation package holistically, balancing long-term
and short-term pay, cash and equity compensation, and performance-
and non-performance-based pay, and taking into account market
competitiveness and internal parity. The primary elements of
executive compensation are discussed below.
Base Salary
We pay base salaries in order to provide executives with a
reasonable level of fixed compensation. Executive base salary
levels are typically reviewed at least annually by the Comp/HC
Committee and adjusted as appropriate, typically to reflect merit,
promotions or changes in responsibilities, or market adjustments.
Base salaries are determined on an individual basis. When
determining any base salary increases, the Comp/HC Committee
considers an individual’s 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 executive’s responsibilities relative to
peers and other executives, and retention.
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Annual Base Salary
|
|
NEO |
2022
($)
|
2021
($)
|
Increase Over 2021
(%) |
|
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|
|
|
Greg Becker |
1,100,000 |
1,050,000
|
4.8% |
|
Dan Beck |
750,000 |
700,000
|
7.1% |
|
Michael Descheneaux |
800,000 |
775,000
|
3.2% |
|
Philip Cox |
700,000 |
625,000
|
12.0% |
|
Michael Zuckert |
675,000 |
625,000
|
8.0% |
|
Laura Izurieta |
650,000 |
650,000 |
0.0% |
In February 2022, each NEO, with the exception of Ms. Izurieta,
received adjustments to their base salaries based on individual
performance, salary market positioning relative to peers, and
internal parity, as applicable. Given the Company's growth and
strong
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|
SVB 2023 PROXY STATEMENT |
53
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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|
MEETING & OTHER INFORMATION |
performance in 2021, the NEOs generally received adjustments to
their base salaries in order to align with the higher salary levels
commensurate with the updated 2022 peer group and strong individual
performance.
In January 2023, the Comp/HC Committee approved 2023 base salaries
for executive officers. Base salaries for 2023 will remain
unchanged from 2022 levels for all NEOs.
Annual Cash Incentives (ICP)
Our NEOs, as well as other executives and employees, participate in
the Company’s ICP, our annual cash incentive plan that provides
rewards based on individual and Company performance. Each executive
participant is assigned an incentive target, stated as a percentage
of the individual’s annual base salary. Executive incentive targets
are set by the Comp/HC Committee based on the objective of
balancing overall total target pay mix with an appropriate
allocation of at-risk compensation, as well as comparative peer and
market compensation data for their respective positions, and in the
case of our non-CEO executives, the CEO’s
recommendations.
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Annual Cash Incentives (ICP)
(% of Annual Base Salary)
|
|
NEO |
2022 Annual
ICP Target
(%)
|
2021 Annual
ICP Target
(%)
|
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|
Greg Becker |
200 |
150
|
|
Dan Beck |
125 |
100
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|
Michael Descheneaux |
125 |
110
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Philip Cox |
100 |
100
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Michael Zuckert |
100 |
90
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Laura Izurieta(1)
|
N/A |
80 |
(1) Ms. Izurieta separated from the Company on October 1, 2022 and
accordingly was not eligible to receive an ICP award for 2022.
Pursuant to her separation (without cause) agreement, Ms. Izurieta
received a cash payment equal to a pro-rata portion of her target
ICP bonus for 2022.
In January 2022, the Comp/HC Committee adjusted the incentive
targets for each of our NEOs due to strong performance and
execution in 2021, as well as market compensation data commensurate
with the updated 2022 peer group.
In January 2023, the Comp/HC Committee approved 2023 ICP targets
for executive officers. ICP targets for 2023 will remain unchanged
for all NEOs.
ICP - Funding
Each year, the Comp/HC Committee establishes metric(s) used to
measure Company performance for ICP funding purposes, on an
absolute basis, as well as relative to peers. For 2022, the Comp/HC
Committee maintained its prior methodology for funding the ICP by
utilizing ROE as the primary performance metric on an absolute and
relative basis. The Comp/HC Committee believes that ROE continues
to be an appropriate indicator of financial performance that drives
shareholder value, as it demonstrates how efficiently the Company
is using capital invested by shareholders to generate profit. The
funding methodology for 2022 was as follows, which includes an
adjustment to the absolute ROE slope to reflect better alignment to
peers and to the relative ROE slope to accommodate the decrease in
number of peer companies in our 2022 Peer Group.
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54
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SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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|
MEETING & OTHER INFORMATION |
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ROE Performance Against Annual Budget
(Two-Thirds (2/3) of Pool) |
|
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ROE Performance Against 2022 Peer Group
(One-Third (1/3) of Pool) |
|
Two-thirds (2/3) of the total incentive pool is funded based on the
Company’s ROE performance (adjusted for applicable exclusions*)
relative to our Board-approved annual target (budget) ROE (adjusted
for applicable exclusions*), as illustrated by the graph below. At
threshold performance (80%) the funding is equal to 50%, at target
performance the funding is equal to 100% and at maximum performance
(140% or higher) the funding is equal to 200%. Funding amount is
subject to straight line interpolation between threshold and
maximum levels. |
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|
One-third (1/3) of the total incentive pool is funded based on the
Company’s actual (unadjusted) ROE performance for 2022, measured
against ROE performance of the 2022 Peer Group, as illustrated in
the graph below. There is no funding if our performance falls in
the bottom four positions, and a maximum funding equal to 200% if
our performance falls in the first four positions. Funding amount
for the 5th through 11th ranking is subject to straight-line
interpolation between peer ROE of rank #12 and peer ROE of rank
#4. |
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Achieved ROE as a % of Annual Company Target |
Company Ranking Against 2022 Peer Group |
|
Subject to interpolation |
Subject to interpolation between ROE of #4 and #12 ranked
peers |
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*Exclusions/Adjustments.
The Comp/HC Committee determines the extent to which the Company
meets its budgeted ROE performance target. It may adjust for out of
the ordinary or non-recurring items, or other items that are
subject to factors beyond management’s control, such as investment
securities gains and losses. Adjustments are determined by the
Comp/HC Committee, in coordination with the Audit Committee, who
assesses the adjustments based on impact to the Company’s
financials. Similar to prior years, for 2022, excluded items
included the impact from: (i) (x) certain gains or losses from the
Company’s investment securities, largely because performance of
such securities is subject to market performance beyond the
Company’s control and (y) certain gains on warrants in excess of
budgeted amounts; and (ii) certain tax-related adjustments.
Additionally for 2022, the committee approved the exclusion of (i)
certain expenses related to the Boston Private merger, including
merger related expenses; and (ii) budgeted equity capital
raise.
The Comp/HC Committee determines the final ICP funding and adheres
to the pre-determined formulaic funding for the applicable year,
unless it determines in its discretion an adjustment is necessary.
Such adjustments are made infrequently and no adjustments were made
in 2022.
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SVB 2023 PROXY STATEMENT |
55
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PROXY SUMMARY |
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|
BOD & CORPORATE GOVERNANCE |
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|
EXECUTIVE OFFICERS & COMPENSATION |
|
|
SECURITY OWNERSHIP |
|
|
INDEPENDENT AUDITOR MATTERS |
|
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OTHER PROPOSALS |
|
|
MEETING & OTHER INFORMATION |
For 2022, despite solid financial performance, the Company’s ROE
performance relative to peers was below target, resulting in an
overall below target ICP pool. The Comp/HC Committee approved the
funding of the total ICP pool at 92% of total target, based on: (i)
the Company’s ROE (as adjusted) of 13.26% against the annual target
ROE (as adjusted) of 13.08%, resulting in the funding of 104% (2/3
of pool), and (ii) the Company's actual ROE of 12.1% ranking in the
10th position against 2022 Peer Group, resulting in the funding of
68% (1/3 of pool).
ICP - 2022 NEO Awards
The Comp/HC Committee (or in the case of the CEO, the Board)
determines actual annual cash incentive awards for the NEOs
following the performance period based upon: the individual’s
target incentive level; the funding based on the Company’s
performance as described above; and the NEO’s individual
performance. ICP awards for NEOs may be at, above, or below the
target incentive. For 2022, each NEO was awarded the ICP amounts
set forth in the table below.
|
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|
|
|
|
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|
|
NEO(1)
|
2022 ICP Target ($) |
2022 ICP Award ($) |
|
|
|
|
|
Greg Becker |
2,200,000 |
1,500,000 |
|
Dan Beck |
937,500 |
625,000 |
|
Michael Descheneaux |
1,000,000 |
900,000 |
|
Philip Cox |
700,000 |
325,000 |
|
Michael Zuckert |
675,000 |
615,000 |
|
|
|
|
(1)Ms.
Izurieta separated from the Company on October 1, 2022, and
accordingly was not eligible to receive an ICP award for 2022. In
accordance with her separation (without cause) agreement, Ms.
Izurieta received a cash payment equal to a pro-rata portion of her
target ICP bonus for 2022.
In determining 2022 awards, the independent members of the Board
(with respect to the CEO) and the Comp/HC Committee (with respect
to the other NEOs) considered a variety of factors, including: (i)
the overall performance of the Company and the respective areas of
oversight of each NEO in 2022, (ii) each NEO’s contributions to our
business and financial results, execution of our 2022 corporate
initiatives, and broader leadership within the organization, and
(iii) each NEO's support and execution of risk management
objectives.
Based on lower than target ICP funding and individual performance,
Mr. Becker received 68% of his target and the other NEOs received
ICP awards between 46% and 91% of their applicable ICP
targets.
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Greg Becker
President and CEO |
2022 Target ICP Award ($) |
2022 ICP Award ($) |
2022 ICP Award
(% of Target) |
|
|
|
|
|
2,200,000 |
1,500,000 |
68% |
|
Key Performance Factors |
|
Mr. Becker's ICP award reflects the following performance in 2022
as the President and CEO:
•Effective
leadership and execution of the Company’s strategy, focusing on
clients and employees in an uncertain market
environment
•Achievement
of solid financial results, though was held accountable for balance
sheet pressures stemming from declining deposits and overall market
environment
•Enhancement
of the Executive Committee team by adding 3 seasoned leaders (our
Chief Risk Officer, Chief Human Resources Officer and (joining in
2023) President of SVB Private), adding more gender diversity and
thought leadership
•Excellent
client focus, including strong client satisfaction and
acquisition
•Continued
advancement of DEI amongst employees and promotion of inclusion
across the innovation economy
•Strong
leadership of the continued evolution of risk management and
controls throughout the organization
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|
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|
56
|
SVB 2023 PROXY STATEMENT |
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PROXY SUMMARY |
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BOD & CORPORATE GOVERNANCE |
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EXECUTIVE OFFICERS & COMPENSATION |
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SECURITY OWNERSHIP |
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INDEPENDENT AUDITOR MATTERS |
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OTHER PROPOSALS |
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MEETING & OTHER INFORMATION |
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Dan Beck
Chief Financial Officer |
2022 Target ICP Award ($) |
2022 ICP Award ($) |
2022 ICP Award
(% of Target) |
|
|
|
|
|
937,500 |
625,000 |
67% |
|
Key Performance Factors |
|
Mr. Beck's ICP award reflects the following performance in 2022 as
the Chief Financial Officer:
•Strengthening
of the Finance team by bringing in new talent
•Continued
strengthening of the Finance organization to meet applicable
regulatory requirements, including capital planning, liquidity
management and resolution planning
•Effective
engagement with investor community
•Accountability
for balance sheet pressures stemming from declining deposits and
overall market environment
•Strong
leadership and support for the Company to meet expectations for
large financial institutions ("LFI") and promotion of a strong risk
culture
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Michael
Descheneaux
President of Silicon Valley Bank |
2022 Target ICP Award ($) |
2022 ICP Award ($) |
2022 ICP Award
(% of Target) |
|
|
|
|
|
1,000,000 |
900,000 |
90% |
|
Key Performance Factors |
|
Mr. Descheneaux's ICP award reflects the following performance in
2022 as the leader of our core banking business:
•Achievement
of strong Net Promoter Scores, as well as record levels of
commercial client acquisition and account openings
•Successful
leadership to drive our ongoing OneSVB initiative to deliver the
Company’s full platform to clients
•Continued
progress on digitization of solutions and successful roll-out of
key digital platforms, resulting in positive client
feedback
•Continued
mentorship and development of key leaders across the banking
organization
•Engagement
on risk management initiatives and priorities and ongoing efforts
to instill a strong risk culture
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Philip
Cox
Chief Operations Officer |
2022 Target ICP Award ($) |
2022 ICP Award ($) |
2022 ICP Award
(% of Target) |
|
|
|
|
|
700,000 |
325,000 |
46% |
|
Key Performance Factors |
|
Mr. Cox's ICP award reflects the following performance in 2022 as
the leader of our Operations and Technology functions:
•Effective
delivery of key digital solutions, resulting in positive client
feedback
•Continued
strong employee engagement across the Operations and Technology
organization
•Continued
focus to enhance Operations and Technology to align with LFI
practices
•Partially
met goals to carry out the Company’s technology strategy and to
strengthen processes and controls
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Michael
Zuckert
General Counsel |
2022 Target ICP Award ($) |
2022 ICP Award ($) |
2022 ICP Award
(% of Target) |
|
|
|
|
|
675,000 |
615,000 |
91% |
|
Key Performance Factors |
|
Mr. Zuckert's ICP award reflects the following performance in 2022
as the leader of our Legal function:
•Strengthening
of the Legal team by bringing in new talent and continuing to add
diversity
•Effective
management of matters involving potential legal
exposure
•Strong
focus on enhancing Board of Directors and management committee
governance
•Driving
of risk management throughout the Legal function, resolving issues
in a timely manner and proactively identifying risks
•Advancement
of the Company’s profile and innovation ecosystem initiatives in
the New York market
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SVB 2023 PROXY STATEMENT |
57
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