| Fee paid previously with preliminary materials. | ||||
| Check box if any part of the fee is offset as provided by Exchange Act Rule | ||||
| (1) | Amount Previously Paid: | |||
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Mail Stop J09N05
Minneapolis, Minnesota 55402
612303-6000
March 16, 2009
Dear Shareholders:
You are cordially invited to join us for our 20092012 annual meeting of shareholders, which will be held on Thursday,Wednesday, May 7, 2009,9, 2012, at 3:2:30 p.m., Central Time, in the Huber Room on the 12th floor of our Minneapolis headquarters in the U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota. The Notice of Annual Meeting of Shareholders and the proxy statement that follow describe the business to be conducted at the meeting.
We are furnishing our proxy materials to you over the Internet, which will reduce our costs and the environmental impact of our annual meeting. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials to you, which contains instructions on how to access our proxy statement and annual report and vote online. The Notice of Availability also contains instructions on how to request a printed set of proxy materials.
Whether or not you plan to attend the meeting, your vote is important and we encourage you to vote your shares promptly. You may vote your shares using a toll-free telephone number or the Internet. If you received a paper copy of the proxy card by mail, you may sign, date and mail the proxy card in the envelope provided. Instructions regarding the three methods of voting are contained on the Notice of Availability and the proxy card.
We look forward to seeing you at the annual meeting.
| Sincerely, |
 |
| ANDREW S. DUFF |
| Chairman and Chief Executive Officer |
Mail Stop J09N05
Minneapolis, Minnesota 55402
612303-6000
| NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | |||
| Date and Time: | |||
| Place: | The Huber Room in our Minneapolis Headquarters 12th Floor, U.S. Bancorp Center 800 Nicollet Mall Minneapolis, MN 55402 | ||
| Items of Business: | 1. The election of | ||
2. Ratification of the selection of Ernst & Young LLP as the independent auditor of Piper Jaffray Companies for the fiscal year ending December 31, 2012. | |||
3. An advisory vote to approve the compensation of the officers disclosed in the attached proxy statement, or a “say-on-pay” vote. | |||
4. Any other business that may properly be considered at the meeting or any adjournment or postponement of the meeting. | |||
| Record Date: | You may vote at the meeting if you were a shareholder of record at the close of business on March | ||
| Voting by Proxy: | Whether or not you plan to attend the annual meeting, please vote your shares by proxy to ensure they are represented at the meeting. You may submit your proxy vote by telephone or Internet, as described in the Notice of Internet Availability of Proxy Materials and the following proxy statement, by no later than 11:59 p.m. Eastern Daylight Time on | ||
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting to be held on May 7, 20099, 2012
Our proxy statement and 20082011 annual report are available at www.piperjaffray.com/proxymaterials
| By Order of the Board of Directors |
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| JAMES L. CHOSY |
| Secretary |
March 16, 2009
23, 2012
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20092012 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 20099, 2012
The Board of Directors of Piper Jaffray Companies is soliciting proxies for use at the annual meeting of shareholders to be held on May 7, 2009,9, 2012, and at any adjournment or postponement of the meeting. Notice of Internet Availability of Proxy Materials, which contains instructions on how to access this proxy statement and our annual report online, is first being mailed to shareholders on or about March 16, 2009.
At our annual meeting, shareholders will act upon the matters outlined in the Notice of Annual Meeting of Shareholders, and management will report on matters of current interest to our shareholders and respond to questions from our shareholders. The matters outlined in the notice include the election of directors, and the approvalratification of an amendment to our Amended and Restated 2003 Annual and Long-Term Incentive Plan (the “Incentive Plan”), which is being amended principally to increase the number of sharesselection of our common stock availableindependent auditor for issuance under2012 and an advisory vote to approve the Incentive Plan by 1,500,000 shares.With respect to the Incentive Plan proposal, the Boardcompensation of Directors believes thatour officers disclosed in this proposal is critical to Piper Jaffray’s future success. The increase in shares will allow us to strengthen our employee ownership culture and further align employees’ interests with the interests of shareholders. The Board of Directors recommends that you vote for approval of this increase in available shares under the plan.
The Board has set March 10, 2009,14, 2012 as the record date for the annual meeting. If you were a shareholder of record at the close of business on March 10, 2009,14, 2012, you are entitled to vote at the meeting. As of the record date, 19,669,60119,034,787 shares of common stock, representing all of our voting stock, were issued and outstanding and, therefore, eligible to vote at the meeting.
Holders of our common stock are entitled to one vote per share. Therefore, a total of 19,669,60119,034,787 votes are entitled to be cast at the meeting. There is no cumulative voting.
In accordance with our bylaws, shares equal to a majority of the voting power of the outstanding shares of common stock entitled to vote generally in the election of directors as of the record date must be present at the annual meeting in order to hold the meeting and conduct business. This is called a quorum. Shares are counted as present at the meeting if: you are present and vote in person at the meeting; or you have properly and timely submitted your proxy as described below under “How do I submit my proxy?” It is your designation of another person to vote stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. When you designate a proxy, you also may direct the proxy how to vote your shares. We• you are present and vote in person at the meeting; or• you have properly and timely submitted your proxy as described below under “How do I submit my proxy?”
It is a document that we are required to make available to you by Internet or, if you request, by mail in accordance with regulations of the Securities and Exchange Commission, when we ask you to designate proxies to vote your shares of Piper Jaffray Companies common stock at a meeting of our shareholders. The proxy statement includes information regarding the matters to be acted upon at the meeting and certain other information required by regulations of the Securities and Exchange Commission and rules of the New York Stock Exchange.
As permitted by Securities and Exchange Commission rules, we have elected to provide access to our proxy materials over the Internet, which in the mail this year instead of a full set of proxy materials?will reducereduces our costs and the environmental impact of our annual meeting. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials to our shareholders of record and beneficial owners.owners who have not previously requested a printed set of proxy materials. The Notice of Availability contains instructions on how to access our proxy statement and annual report and vote online, as well as instructions on how to request a printed set of proxy materials.
To get electronic access to the proxy materials, you will need your control number, which was provided to you in the Notice of Internet Availability of Proxy You will need your control number toMaterials.Materials or the proxy card included in your printed set of proxy materials. Once you have your control number, you may either go towww.proxyvote.comand enter your control number when prompted, or send ane-mail requesting electronic delivery of the materials tosendmaterial@proxyvote.com.
If your shares are registered directly in your name, you are considered the shareholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the shareholder of record with respect to those shares, while you are considered the beneficial owner of those shares. In that case, your shares are said to be held in “street name.” Street name holders generally cannot vote their shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares using the method described below under “How do I submit my proxy?”
If you are a shareholder of record, you can submit a proxy to be voted at the meeting in any of the following ways:
| • | ||
through the Internet usingwww.proxyvote.com; | ||
over the telephone by calling a toll-free number; or
if you receive a paper copy of the proxy card after requesting the proxy materials by mail, you may sign, date and mail the proxy card.
To vote by telephoneInternet or Internet,telephone, you will need to use a control number that was provided to you by our vote tabulator, Broadridge Financial Solutions, and then follow the additional proceduressteps when prompted. The proceduressteps have been designed to authenticate your identity, allow you to give voting instructions, and
confirm that those instructions have been recorded properly. If you hold your shares in street name, you must vote your shares in the manner prescribed by your broker, bank, trust or other nominee, which is similar to the voting procedures for shareholders of record. However, if you request
2
If you hold shares of Piper Jaffray common stock in the Piper Jaffray Companies Retirement Plan or U.S. BancorpBank 401(k) Savings Plan?BancorpBank 401(k) Savings Plan, the submission of your proxy by Internet or telephone or your completed proxy card will serve as voting instructions to the respective plan’s trustee. Your voting instructions must be received at least five days prior to the annual meeting in order to count. In accordance with the terms of the Piper Jaffray Companies Retirement Plan and U.S. BancorpBank 401(k) Savings Plan, the trustee of each plan will vote all of the shares held in the plan in the same proportion as the actual proxy votes submitted by plan participants at least five days prior to the annual meeting.
If you receive more than one Notice of Internet Availability of Proxy Materials or printed set of proxy materials, it means that you hold shares registered in more than one account. To ensure that all of your shares are voted, vote once for each control number you receive as described above under “How do I submit my proxy?”Materials?Materials or printed set of proxy materials?.
If you are a shareholder of record, you may vote your shares in person at the meeting by completing a ballot at the meeting. Even if you currently plan to attend the meeting, we recommend that you submit your proxy as described above so your vote will be counted if you later decide not to attend the meeting. If you submit your vote by proxy and later decide to vote in person at the annual meeting, the vote you submit at the meeting will override your proxy vote. If you are a street name holder, you may vote your shares in person at the meeting only if you obtain and bring to the meeting a signed letter or other form of proxy from your broker, bank, trust or other nominee giving you the right to vote the shares at the meeting. If you are a participant in the Piper Jaffray Companies Retirement Plan or U.S. BancorpBank 401(k) Savings Plan, you may submit voting instructions as described above, but you may not vote your Piper Jaffray shares held in the Piper Jaffray Companies Retirement Plan or U.S. BancorpBank 401(k) Savings Plan in person at the meeting.
The Board of Directors recommends a vote: FOR all of the nominees for director; FORthe ratification of the selection of Ernst & Young LLP as the independent auditor of Piper Jaffray Companies for the year ending December 31, 2012; and FORthe advisory approval of the compensation of our officers included in this proxy statement. If you are a shareholder of record and submit a signed proxy card or submit your proxy by Internet or telephone but do not specify how you want to vote your shares on a particular matter, we will vote your shares as follows: Your vote is important. We urge you to vote, or to instruct your broker, bank, trust or other nominee how to vote, on all matters before the annual meeting.If you are a street name holder and fail to instruct the shareholder of record how you want to vote your shares on a particular matter, those shares are considered to be “uninstructed.” New York Stock Exchange rules determine the circumstances under which member brokers of the New York Stock Exchange may exercise discretion to vote “uninstructed” shares held by them on behalf of their clients who are street name holders. Other than the ratification of the selection of Ernst & Young LLP as our independent auditor for the year ending December 31, 2012, the rules donotpermit member brokers to exercise voting discretion as to the uninstructed shares on any matter included in the notice of meeting. With respect to the Our broker-dealer subsidiary, Piper Jaffray & Co., is a member broker of the New York Stock Exchange and may be a shareholder of record with respect to shares of our common stock held in street name on behalf of Piper Jaffray & Co. clients. Because Piper Jaffray & Co. is our affiliate, New York Stock Exchange rules prohibit Piper Jaffray & Co. from voting uninstructed shares even on routine matters. Instead, Piper Jaffray & Co. may vote uninstructed shares on such matters only in the same proportion as the shares represented by the votes cast by all shareholders of record with respect to such matters. Yes. You may revoke your proxy and change your vote at any time before your proxy is voted at the annual meeting, in any of the following ways: by submitting a later-dated proxy by Internet or telephone before 11:59 p.m. Eastern Daylight Time on Tuesday, May 8, 2012; by submitting a later-dated proxy to the corporate secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; by sending a written notice of revocation to the corporate secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; or by voting in person at the meeting. The The affirmative vote of the holders of a majority of the outstanding shares of common stock present in person or represented by proxy and entitled to vote at the annual meeting is required to If the The advisory vote on the compensation of our executives is not binding on us or the Board, but we will consider the shareholders’ advisory input on this matter when establishing compensation for our executive officers in future years. You may either vote “FOR” or “WITHHOLD” authority to vote for each director nominee. You may vote “FOR,” “AGAINST” or “ABSTAIN” on ratification of the If you withhold authority to vote for one or more of the director nominees or you do not vote your shares on this matter (whether by broker non-vote or otherwise), this will have no effect on the outcome of the vote. With respect to the proposal to All of our shareholders are invited to attend the annual meeting. You may be asked to present valid photo identification, such as a driver’s license or passport, before being admitted to the meeting. If you hold your shares in street name, you also may be asked to present proof of ownership to be admitted to the meeting. A brokerage statement or letter from your broker, bank, trust or other nominee are examples of proof of ownership. To help us plan for the meeting, please let us know whether you expect to attend, by responding affirmatively when prompted during Internet or telephone voting or by marking the attendance box on the proxy card. Piper Jaffray pays for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokerage firms, banks, trusts or other nominees for forwarding proxy materials to street name holders. We have retained Innisfree M&A Incorporated to assist in the solicitation of proxies for the annual meeting for a fee of approximately The number of directors currently serving on our Board of Directors is Andrew S. Duff, Michael R. Francis, B. Kristine Johnson, Addison L. Piper, Lisa K. Polsky, Following is biographical information for each of the nominees for election as a ANDREW S. DUFF: Age 54, chairman and MICHAEL R. FRANCIS: Age B. KRISTINE JOHNSON:Age as a consultant to Affinity Capital Management in 1999. Prior to that, she was employed for 17 years at Medtronic, Inc., a manufacturer of cardiac pacemakers, neurological and spinal devices and other medical products, serving most recently as senior vice president and chief administrative officer from 1998 to 1999. Her experience at Medtronic also included service as president of the vascular business and president of the tachyarrhythmia management business, among other roles. ADDISON L. PIPER: Age LISA K. POLSKY: Age FRANK L. SIMS: Age JEAN M. TAYLOR: Age 49, director since July 27, 2005. Ms. Taylor is president of Life is Now, Inc., a strategy and consulting firm that she founded in October 2011. She was affiliated with Performance Unlimited, also a consulting firm, from the founding of Life is Now through January 2012. Previously, Ms. Taylor served as the president and chief executive officer of Taylor Corporation, having served as chief executive officer from 2007 until July 2010. Taylor Corporation is a privately held group of approximately 80 affiliated entrepreneurial companies engaged in marketing, fulfillment, personalization and printing services. Ms. Taylor joined Taylor Corporation in 1994. MICHELE VOLPI: Age 48, director since February 3, 2010. Since October 2011, Mr. Volpi has served as the chief executive officer of Betafence, a global provider of fencing solutions. Prior to joining Betafence, Mr. Volpi served as the president and chief executive officer and as a director of H.B. Fuller Company from December 2006 to November 2010. H.B. Fuller and its subsidiaries manufacture and market adhesives and specialty chemical products worldwide. Prior to becoming president and chief executive officer, he was group president, general manager of the global adhesives division of H.B. Fuller from December 2004 to December 2006. Mr. Volpi also served as global strategic business unit manager, assembly for H.B. Fuller from June 2002 to December 2004. From 1999 to June 2002, Mr. Volpi served as general manager, marketing for General Electric Company. He currently serves as a member of the board of directors of Saipem, S.p.A. HOPE B. WOODHOUSE: Age 55, director since September 22, 2011. Ms. Woodhouse most recently served as the chief operating officer of Bridgewater Associates, LP, a large investment advisory firm, a position she held from 2005 to 2008. Prior to that, Ms. Woodhouse served as the president and chief operating officer of Auspex Group, L.P., a global macro hedge fund, and as the chief operating officer of Soros Fund Management LLC, a privately owned hedge fund sponsor. Ms. Woodhouse also held a variety of positions at Salomon Brothers Inc. from 1983 to 1998, including serving as managing director of the global finance department from 1997 to 1998. Each nominee brings unique capabilities to the Board. The Board believes the nominees as a group have the experience and skills in areas such as general business management, corporate governance, leadership development, investment banking, finance and risk management that are necessary to effectively oversee our company. In addition, the Board believes that each of our directors possesses high standards of ethics, integrity and professionalism, sound judgment, community leadership and a commitment to representing the long-term interests of our shareholders. The following is information as to why each nominee should serve as a director of our company: Mr. Duff has been our chairman and chief executive officer since our spin-off from U.S. Bancorp in 2003, and has more than 30 years of experience in the capital markets industry with Piper Jaffray. The Board believes he has the knowledge of our company and its business necessary to help formulate and execute our business plans and growth strategies. Mr. Francis provides the Board with extensive marketing knowledge and expertise from his more than 25 years in the retail industry, including his service as president of J.C. Penney Company, Inc., and as chief marketing officer for Target Corporation. Also, Mr. Francis’ current role with J.C. Penney as well as his service as an executive officer of Target, provide him with significant management experience that is valuable to the Board and our management. Mr. Francis also has prior experience as a public company director. Ms. Johnson has extensive experience in both the health care industry and the venture capital business, with the health care industry being one of our primary areas of focus. She has served as president of a venture capital firm investing in health care companies and as a senior officer in various roles at Medtronic, a global leader in medical technology and a Minnesota-based public company. Her deep ties to the health care industry and the venture capital business provide the Board with valuable insights and knowledge, both from a client and public company perspective. Ms. Johnson also has prior experience as a public company director in the telecommunications and industrial manufacturing industries. Mr. Piper has been a part of our company since 1969, serving in many roles, including chief executive officer from 1983 to 2000 and vice chairman following our spin-off from U.S. Bancorp until his retirement. His experience with the company provides deep institutional knowledge as well as a comprehensive understanding of the financial services industry. Mr. Piper also has experience as a public company director, having served on the board of directors of Renaissance Learning, an education software company, from July 2001 until its sale in October 2011. Ms. Polsky has extensive experience in the financial services industry, having served as a managing director at both Morgan Stanley and Merrill Lynch. Ms. Polsky currently serves as chief risk officer of CIT Group, a position she previously held at Morgan Stanley, providing valuable experience and insights relating to risk management, an important discipline for a securities firm such as our company. Ms. Polsky’s significant financial experience caused the Board to determine that she is an audit committee financial expert under applicable rules of the Securities and Exchange Commission. Ms. Polsky also has experience as a public company director, having served on the board of directors of thinkorswim Group Inc., an online brokerage specializing in options, from 2007 until its sale to TD Ameritrade in June 2009. Mr. Sims has significant management, financial, and risk management knowledge and experience gained from his role as a senior executive of Cargill, a large, diversified, international company. He has served as chairman of the Federal Reserve Bank of Minneapolis and has current and prior experience as a public company director. His leadership experience as an executive of one of the country’s largest private companies and his considerable experience in oversight roles as a director, provides valuable experience, insight and judgment to the Board. The Board also determined that Mr. Sims is an audit committee financial expert under applicable rules of the Securities and Exchange Commission. Ms. Taylor has extensive management and financial experience from her service as president and chief executive officer of Taylor Corporation, one of the largest privately held companies in the United States. She also has a thorough understanding of strategy, leadership development and employee relations, which has benefited the Board and management in shaping the company’s culture. Mr. Volpi has significant international management experience, currently serving as chief executive officer of Betafence, a global provider of fencing solutions located in Belgium, and previously serving as the president and chief executive officer and a director of H.B. Fuller Company, a large, global public company based in Minnesota. His international experience and extensive management skills provide valuable perspective and insight to our management and to the Board. Ms. Woodhouse has more than 25 years of experience in the financial services industry, most recently serving as chief operating officer of Bridgewater Associates, LP, a large global hedge fund. Her deep experience at leading, global alternative asset management firms and broker-dealers provides the Board valuable perspectives on the Company’s operations and also strategic decisions. Ms. Woodhouse’s significant financial experience caused the Board to determine that she is an audit committee financial expert under applicable rules of the Securities and Exchange Commission. The Board of Directors conducts its business through meetings of the Board and the following standing committees: Audit, Compensation, and Nominating and Governance. Each of the standing committees has adopted and operates under a written charter, and, annually in November, each committee reviews its charter, performs a self-evaluation and establishes a plan for committee activity for the upcoming year. The committee charters are all We have adopted a Code of Ethics and Business Conduct applicable to our employees, including our principal executive officer, principal financial officer, principal accounting officer, controller and other employees performing similar functions, and a separate Code of Ethics and Business Conduct applicable to our directors. Directors who also serve as officers of Piper Jaffray must comply with both codes. Both codes are available on our website atwww.piperjaffray.com Under applicable rules of the New York Stock Exchange, a majority of the members of our Board of Directors must be independent, and no director qualifies as independent unless the Board of Directors affirmatively determines that the director has no material relationship with Piper Jaffray. To assist the Board with these determinations, the Board has adopted Mr. Duff Board Leadership Structure and Since our spin-off from U.S. Bancorp, Mr. Duff has served in the combined roles of presides at all meetings of the Board at which the chairman is not present, including executive sessions of the independent directors, and coordinates the agenda for and moderates these executive sessions; serves formally as a liaison between the chief executive officer and the independent directors; monitors Board meeting schedules and agendas to ensure that appropriate matters are covered and that there is sufficient time for discussion of all agenda items; monitors information sent to the Board and advises the chairman as to the quality, quantity and timeliness of the flow of information; has authority to call meetings of the independent directors; and if requested by major shareholders, makes himself available for consultation and direct communication. We believe that Mr. Duff’s combined service as chairman and chief executive officer creates unified leadership for the Board and the company, with one cohesive vision for our organization. This leadership structure, which is common among U.S.-based publicly traded companies, demonstrates to our clients, employees and shareholders that the company is under strong leadership. As chairman and chief executive officer, Mr. Duff helps shape the strategy ultimately set by the entire Board and also leverages his operational experience to balance growth and risk management. We believe the oversight provided by the Board’s independent directors, the work of the Board’s committees described below and the coordination between the chief executive officer and the independent directors conducted by the lead director help provide effective oversight of our company’s strategic plans and operations. We believe having one person serve as chairman and chief executive officer is in the best interests of our company and our shareholders at this time. Board Involvement in Risk Oversight At both the Board and committee levels, our non-employee directors meet regularly in executive sessions in which Mr. Duff and other members of management do not participate. Mr. We have three standing committees of the Board: the Audit Committee, Director Michael R. Francis B. Kristine Johnson Lisa K. Polsky Frank L. Sims Jean M. Taylor Michele Volpi Hope B. Woodhouse Effective May 9, 2012, Ms. Taylor will join the Audit Committee and Compensation Committee, Ms. Woodhouse will join the Compensation Committee, and Mr. Sims will transition off of the Compensation Committee. The Audit Committee’s purpose is to oversee the integrity of our financial statements, the independent auditor’s qualifications and independence, the performance of our internal audit function and independent auditor, and compliance with legal and regulatory requirements. The Audit Committee has sole authority to retain and terminate the independent auditor and is directly responsible for the compensation and oversight of the work of the independent auditor. As discussed above, the Audit Committee is primarily responsible for monitoring management’s responsibility in the area of risk oversight. The Audit Committee also meets with management and the independent auditor to review and discuss the annual audited and quarterly unaudited financial statements, reviews the integrity of our accounting and financial reporting processes and audits of our financial statements, and prepares the Audit Committee Report included in the proxy statement. The responsibilities of the Audit Committee are more fully described in the Committee’s charter. The Audit Committee met eight times during The Compensation Committee discharges the Board’s responsibilities relating to compensation of the executive officers, oversees succession planning for the executive officers jointly with the Nominating and Governance Committee and ensures that our compensation and employee benefit programs are aligned with our compensation and benefits philosophy. These responsibilities also include reviewing and discussing with management whether the company’s compensation arrangements are consistent with effective controls and sound risk management. The Committee has full discretion to determine the amount of compensation to be paid to the executive officers. The Committee also has sole authority to evaluate the chief executive officer’s performance and determine the compensation of the chief executive officer based on this evaluation. guidelines for the executive officers and directors, for recommending the compensation and benefits to be provided to our non-employee directors, for reviewing and approving the establishment of broad-based incentive compensation, equity-based, retirement or other material employee benefit plans, and for discharging any duties under the terms of these plans. The Committee has delegated authority to our chief executive officer under The work of the Committee is supported by our human capital department, primarily through our global head of human capital, as well as by our finance department, primarily through our chief The Compensation Committee has engaged an independent outside compensation consultant, The Compensation Committee reviews and discusses with management the disclosures regarding executive compensation to be included in our annual proxy statement, and recommends to the Board inclusion of the Compensation Discussion and Analysis in our annual proxy statement. The responsibilities of the Compensation Committee are more fully described in the Committee’s charter. For more information regarding the Committee’s process in setting compensation, please see “Compensation Discussion and Analysis — Setting Compensation” below. The Compensation Committee met The Nominating and Governance Committee identifies and recommends individuals qualified to become members of the Board of Directors and recommends to the Board sound corporate governance principles and practices for Piper Jaffray. In particular, the Committee assesses the independence of our Board members, identifies and evaluates candidates for nomination as directors, responds to director nominations submitted by shareholders, recommends the slate of director nominees for election at the annual meeting of shareholders and candidates to fill vacancies between annual meetings, recommends qualified members of the Board for membership on committees, oversees the director orientation and continuing education programs, reviews the Board’s committee structure, reviews and assesses the adequacy of our Corporate Governance Principles, executive officer, the Board and Board committees, and oversees the succession planning process for the executive officers jointly with the Compensation Committee. The Nominating and Governance Committee also oversees administration of our related person transaction policy and reviews the transactions submitted to it pursuant to such policy. The responsibilities of the Nominating and Governance Committee are more fully described in the Committee’s charter. The Nominating and Governance Our Corporate Governance Principles provide that our directors are expected to attend meetings of the Board and of the committees on which they serve, as well as our annual meeting of shareholders. Our Board of Directors held The Board has established a process for shareholders and other interested parties to send written communications to the Board or to individual directors. Such communications should be sent by U.S. mail to the attention of the Office of the Secretary, Piper Jaffray Companies, 800 Nicollet Mall, Suite 800, Mail Stop The Nominating and Governance Committee will consider director candidates recommended by shareholders and has adopted a policy that contemplates shareholders recommending and nominating director candidates. A shareholder who wishes to recommend a director candidate for nomination by the Board at the annual meeting of shareholders or for vacancies on the Board that arise between shareholder meetings must timely provide the Nominating and Governance Committee with sufficient written documentation to permit a determination by the Board whether such candidate meets the required and desired director selection criteria set forth in our bylaws, our Corporate Governance Principles and our Director Nominee Selection Policy described below. Such documentation and the name of the director candidate must be sent by U.S. mail to the Chairperson, Nominating and Governance Committee,c/o the Office of the Secretary, Piper Jaffray Companies, 800 Nicollet Mall, Suite 800, Mail Stop Alternatively, shareholders may directly nominate a person for election to our Board by complying with the procedures set forth in Article II, Section 2.4 of our bylaws, and with the rules and regulations of the Securities and Exchange Commission. Under our bylaws, only persons nominated in accordance with the procedures set forth in the bylaws will be eligible to serve as directors. In order to nominate a candidate for service as a director, you must be a shareholder at the time you give the Board notice of your nomination, and you must be entitled to vote for the election of directors at the meeting at which your nominee will be considered. In accordance with our bylaws, director nominations generally must be made pursuant to notice delivered to, or mailed and received at, our principal executive offices at the address above, not later than the 90th day, nor earlier than the 120th day, prior to the first anniversary of the prior year’s annual meeting of shareholders. Your notice must set forth all information relating to the nominee that is required to be disclosed in solicitations of proxies for the election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934 (including the nominee’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected). During 2011, non-employee directors received a $60,000 annual cash retainer Our non-employee directors may participate in the Piper Jaffray Companies Deferred Compensation Plan for Non-Employee Directors, which was designed to facilitate increased equity ownership in the market value of the stock on the last day of the year in which the director’s service with us terminates. Share amounts that have been deferred will be paid out to the director (or, in the event of the director’s death, to his or her beneficiary) in the form of shares of common stock in an amount equal to the full number of shares credited to the non-employee director’s account as of the last day of the year in which the cessation of service occurred. Directors who elect to participate in the plan are not required to pay income taxes on amounts or grants deferred but will instead pay income taxes on the amount of the lump-sum cash payment paid to the director (or beneficiary) at the time of such payment. Our obligations under the plan are unsecured general obligations to pay in the future the value of the participant’s account pursuant to the terms of the plan. Non-employee directors The following table contains compensation information for our non-employee directors for the year ended December 31, Director Michael R. Francis Virginia Gambale B. Kristine Johnson Addison L. Piper Lisa K. Polsky Frank L. Sims Jean M. Taylor Michele Volpi Hope B. Woodhouse Represents the As of December 31, Director Michael R. Francis Virginia Gambale B. Kristine Johnson Addison L. Piper Lisa K. Polsky Frank L. Sims Jean M. Taylor Michele Volpi Hope B. Woodhouse All other compensation for non-employee directors for the year ended December 31, The amounts for Ms. Johnson, Mr. Piper, Ms. Polsky, Mr. Sims, Ms. Taylor, Mr. Volpi and The These amounts were deferred pursuant to the Piper Jaffray Companies Deferred Compensation Plan for Non-Employee Directors. Reflects a pro rata portion of the Reflects a pro rata portion of the Reflects a pro rata portion of the full additional cash retainer for the portion of the year Mr. Volpi served as chairperson of the Compensation Committee (February 3, 2011 — December 31, 2011). Reflects a pro rata portion of the full annual cash retainer for the portion of the year Ms. Woodhouse served on the Board (September 22, 2011 — December 31, 2011). Includes Ms. Woodhouse’s initial equity grant of $60,000 for joining the Board of Directors (3,279 shares issued on September 22, 2011 using the closing price of our common stock on that day of $18.30 per share) as well as the pro rata portion of her annual equity grant equal to $16,603 for the portion of the year Ms. Woodhouse served on the Board (September 22, 2011 — December 31, 2011). COMPENSATION DISCUSSION AND ANALYSIS Executive Summary 2011 Financial Performance 2011 represented a volatile year filled with macroeconomic challenges. During the second half of 2011, the escalation of the sovereign debt crisis in Europe, the credit rating downgrade by S&P of U.S. debt, and Against this challenging operating environment, we achieved positive pre-tax earnings in each quarter on a non-GAAP basis (excluding a goodwill impairment charge described in the next paragraph), in part due to reduced incentive compensation commensurate with our performance for both executive officers and employees generally. Also, we further reduced our non-compensation expenses. We were The volatile environment in the second half of the year had a significant impact on public market valuations for financial services firms, and our common stock, like others’ in the industry, traded at historically low levels relative to book value. This depressed valuation placed significant pressure on our goodwill impairment testing as market capitalization is a key determinant of possible goodwill impairment, and during our annual impairment testing for 2011, we determined that an The following are more specific financial highlights for the year: We generated revenues of $458.1 million, down from $530.1 million in 2010, which was our highest level of revenues since becoming a public company. We incurred a net loss of $102.0 million on a GAAP basis; excluding the $118.4 million after-tax goodwill impairment charge, we generated non-GAAP net income of $16.4 million for the year. Net income was $24.4 million for 2010, which included $10.9 million of pre-tax restructuring charges primarily related to our European operations. Investment banking revenues declined 21.2% to $212.9 million, compared to $270.1 million in 2010. Debt financing revenues decreased to $54.6 million, compared with $66.0 million in 2010. Our public finance investment banking business was negatively impacted by concerns over Institutional brokerage revenues declined 9.6% to $168.2 million, compared to $186.0 million in 2010. Asset management revenue increased 5.9% to $71.2 million, compared to $67.2 million in 2010, due to the recognition of a full year of management fee revenue from Advisory Research, which was acquired in March 2010, offset by lower performance fees. We Overview of 2011 Compensation Throughout this proxy statement, we refer to our chief executive officer, The most significant actions taken in 2011 with respect to our named executive officers’ were significant reductions in year-over-year incentives. The annual incentive program for each executive officer, other than our general counsel, is funded solely from a measure of pre-tax operating income. (The annual incentive for our general counsel is 50% based on profitability, rather than 100% as is the case for other named executive officers.) These incentive pools decreased along with our profitability for the year, consistent with the discussion of our financial performance above. As a result, year-over-year annual incentives declined as follows: 65% decline for our chief executive officer, with his annual incentive decreasing to $702,000 from $1,991,667 in 2010; 79% decline for our chief financial officer, with her annual incentive decreasing to $75,000 from $358,333 in 2010; 88% decline for our former president and chief operating officer, with his annual incentive decreasing to $200,000 from $1,691,667 in 2010; 46% decline for our head of 36% decline for our general The effect of these Our executive compensation program is designed to drive and reward corporate performance annually and over the long term, as measured by increasing shareholder value. Compensation also must be internally equitable and externally competitive. Pay for Align risk and reward through a blend of pay components — We are committed to using a mix of compensation components — base salary, annual incentives and long-term incentives — to create an environment that encourages increased profitability for the company without undue risk taking. Align employees with shareholders — We are committed to using our compensation program to increase executive stock ownership over time. Setting Compensation The Compensation Committee, compensation that may be paid under the annual incentive program (as described below under “Compensation Program and Payouts — Involvement of Executive Officers The work of the Committee is supported by our Compensation Peer Group Our human capital department, in consultation with We also use data from external market surveys reflecting a broad number of firms within our industry (including members of our peer group), and we may review publicly available data for similar companies that are not direct Compensation Consultant The Committee engaged Frederic W. Cook & Co., Inc. (“FWC”) as its independent compensation consultant as of May 2011. FWC is independent of the Company’s management, reports directly to the Committee, and has no economic relationships with the Company other than its role advising the Committee. The Committee considers advice and recommendations received from FWC in making executive compensation decisions. Prior to the engagement of FWC, the Committee had engaged Towers Watson as its independent compensation consultant during 2011 to provide executive compensation advice at Committee meetings. Towers Watson also provided benefit plan services to our human capital department, including health and group benefit services (e.g., medical and dental cost analysis) and retiree medical actuarial services. These additional services were pre-approved by the Compensation Committee in early 2011, and the amount we paid for these services did not exceed $120,000. Say-on-Pay At our 2011 annual meeting of shareholders, our say-on-pay proposal received “for” votes that represented 82% of the votes cast. The Committee considered the results of the 2011 say-on-pay vote when evaluating our compensation practices and policies in 2011 and when setting the compensation of our named executive officers Compensation Program and The key components of our executive compensation program are base salary and annual incentive compensation, and the equity portion of our annual incentive compensation The purpose of base salary is to provide a set amount of cash compensation for each executive that is not variable in nature and is generally competitive with Annual Incentive Compensation Delivering a significant portion of our compensation through annual incentives reflects one of the 2011 Program At the The amount With respect to the elimination of the goodwill impairment, the losses from this impairment principally related to the low public market valuations for financial services firms, as discussed above, and not any specific actions taken by the named executive officers during the year that affected operating performance. Accordingly, we believe that eliminating this goodwill impairment charge, in accordance with the formula established at the outset of the year, more accurately reflects our operating performance for the year. As to the two components, we eliminated the entire $105.5 million pre-tax goodwill impairment charge created from the 1998 acquisition of our under the formula for pre-tax operating income because this component of goodwill related to acquisitions undertaken by management following our In Net income/(loss) Removal of net income applicable to noncontrolling interests Income tax expense Expense under our annual incentive program Amortization expense for equity awards granted in connection with acquisitions Goodwill impairment charge (U.S. Bancorp-related) Goodwill impairment charge (other) Adjusted pre-tax operating income Mr. Chosy’s annual incentive is discretionary and based on a percentage of salaries for corporate support leaders and full-firm profitability. For 2011, 50% of his annual incentive was based on full-firm profitability. The Committee believes his annual incentive compensation should be less dependent on our performance than the other named executive officers, who have a greater ability to affect our performance. Compensation Determinations and Relevant Factors When determining the amount of incentive compensation to be paid for 2011, the Committee reviewed and considered the following information: for the chief executive officer, a self-evaluation, a performance review with input from his direct reports, and feedback from the full Board of Directors, gathered by the Committee chairperson, regarding performance for 2011; performance evaluations of each other named executive officer prepared by the chief executive officer and the head of our human capital department; the financial performance of the peer group financial and compensation data, including total shareholder return for the compensation market data provided by our human capital department; the recommendations of the chief executive officer regarding the incentive compensation to be paid to each executive officer for 2011, which the Committee discussed with the chief executive officer; and tally sheets specifying each element of compensation paid to the executive officers for the current and prior year and reflecting the total proposed compensation for 2011 based on the recommendations of the chief executive officer, as well as the potential compensation to be received by the executive officers under various scenarios, including a change-in-control of the company and terminations of employment under a variety of circumstances. In determining the payments made to our named executive officers, the Committee took into account all of the information described above and the annual incentive program provision governing the maximum aggregate amount payable under the qualified performance-based awards granted to our named executive officers other than Mr. Chosy. The Committee considers all of the factors described above in exercising its discretion to determine the annual incentive compensation paid to each named executive officer. For executives responsible for a business unit, payouts were impacted by the financial performance of their business unit. Our chief executive officer’s incentive was impacted by the operating performance of public finance and fixed income, as to which he had primary operational responsibility for the year. Also, our former president and chief operating Andrew S. Duff, chairman and chief executive officer. Mr. Duff’s compensation was primarily influenced by our decline in profitability for 2011 compared to our strong performance in 2010, with a 65% year-over-year decline in incentives. The decline in profitability was mitigated somewhat by progress against our strategic initiatives, which focus on increasing the proportion of higher margin businesses that include public finance, asset management, and merger and acquisition advisory engagements. As to business unit performance, our public finance business continued to build a national franchise and achieved strong relative results, including market share gains for 2011. As to fixed income, revenues were only down slightly in a volatile macroeconomic second half of the year that experienced widening credit spreads in a low interest rate environment. Debbra L. Schoneman, chief financial officer. Ms. Schoneman’s compensation was also influenced by our decline in financial performance for 2011, with a 79% decline in year-over-year incentives. Her efforts to reduce year-over-year non-compensation expenses and our related quarterly run-rate for these expenses, as well as her continued efforts to improve our financial planning and risk management functions during 2011, positively influenced her compensation for the year. James L. Chosy, general counsel and secretary. Mr. Chosy’s compensation reflected his efforts to strengthen our global compliance structure, drive our focus on ethics, and successfully manage legal expenses, which the Committee considered favorably when evaluating his 2011 performance. Brien M. O’Brien, head of asset management. Mr. O’Brien’s compensation was influenced by the stable performance of our asset management business for 2011 compared to our other business lines. His efforts successfully integrating Advisory Research as well as his overall leadership of our asset management segment, which we view as a significant part of our long-term strategy, also positively impacted his 2011 compensation. Thomas P. Schnettler, former president and chief operating officer. Mr. Schnettler’s compensation was primarily influenced by the decline in performance of our equity investment banking and institutional brokerage businesses compared to 2010, and in particular the loss we incurred in our Asia operations. Countering this negative performance was our positive relative performance within the U.S. and European markets in which we operate. Consistent with our pay-for-performance philosophy, this overall decline in performance caused the incentive compensation awarded to him for 2011 to decrease 88% from $1,691,667 for 2010 to $200,000 for 2011. Based on this information, the Committee evaluated the performance of The table below shows the annual incentive awards that were earned by each individual in 2011. This supplemental table differs from the Supplemental Compensation Table Name Andrew S. Duff Debbra L. Schoneman James L. Chosy Brien M. O’Brien Thomas P. Schnettler Equity Awards Consistent with our philosophy regarding executive stock ownership, the annual incentive compensation for the named executive officers was paid out in a combination of cash and equity. Our equity awards each year are not in addition to other incentive amounts. Rather, we calculate a total annual incentive, then divide that amount between cash and equity. Since 2009, we have granted equity awards to our executive officers in the form of restricted stock. We believe restricted stock awards strongly align the executive officers’ interests with those of shareholders by ensuring that the same fluctuations in our stock that affect our shareholders also directly affect the value of the awards granted to executive officers. In 2012, the Committee intends to further consider potential long-term incentives in the form of equity to facilitate increased alignment of the interests of our stockholders and management and foster long-term shareholder valuation creation. In determining the allocation between cash and equity, the Committee, together with the Nominating and Governance Committee, reviews the executive officer compensation process, which includes a review of the allocation for the prior year. The Committee also reviews the compensation mix between cash and equity for executives as part of its regular strategic review of executive compensation programs. This is to ensure the programs will incentivize executives to focus on firm-wide, long-term value creation for shareholders. Accordingly, the executives who are viewed to have the greatest ability to influence long-term, firm-wide results receive the largest allocation of equity within the company. In establishing the allocation between cash and equity, the Committee may consider historic practice, current equity ownership levels, input from its independent compensation consultant on current market practices, and the role of equity in overall executive compensation program design. The annual incentive compensation for our chief executive officer historically has been divided equally between cash and equity, as seen above in the Supplemental Compensation Table. Our executive officers, other than the chief executive officer and head of asset management, historically have received between 40% to 45% of their annual incentive compensation in equity and 55% and 60% in cash. Mr. O’Brien has not received equity as a part of his incentive compensation. He received a significant ownership stake in the company as part of our acquisition of Advisory Research, and currently holds 335,199 shares, 1.72% of our outstanding common stock as of February 17, 2012. Given his significant equity ownership in our company, the Committee believes his interests already are significantly aligned with our shareholders and cash is a more appropriate form of compensation for him. Lastly, the number of shares of restricted stock granted to each officer was determined by dividing the total dollar value designated to be paid out to the officer in restricted stock by the closing price of our common stock on February 15, 2012. The restricted stock vests in three equal annual installments. Recent Developments Effective as of January 1, 2012, we entered into an employment agreement with Brien O’Brien, our Head of Asset Management. The agreement has a three-year term, and provides for a base salary and that we will make quarterly cash payments to Mr. O’Brien equal to 11% of the earnings before interest, taxes, depreciation and amortization (EBITDA) of our asset management business for the preceding quarter. This EBITDA calculation also excludes the impact of Mr. O’Brien’s compensation, corporate overhead allocations, certain extraordinary costs related to Fiduciary Asset Management (FAMCO), and gains or losses on investments we make in funds of our asset management business. Applying the calculation to Mr. O’Brien in 2011 would have resulted in adjusted EBITDA for the year of $32.4 million. In addition to the quarterly payments, the agreement provides for annual payments to Mr. O’Brien if the asset management business exceeds EBITDA performance thresholds for the year as follows: Annual Asset Management EBITDA Additional % of Asset Management EBITDA Payable Accordingly, the variable component of Mr. O’Brien’s compensation pursuant to his employment agreement is dependent upon the profitability of our asset management business, for which he is primarily responsible. We entered into this agreement with Mr. O’Brien in recognition of the strategic importance of sustaining and growing our asset management operations over the long term. Another change for 2012 was the adoption by the Committee of the Piper Jaffray Companies Mutual Fund Restricted Shares Investment Plan (the “MFRS Plan”) in February 2012. The MFRS Plan allows recipients of restricted stock of the company to instead elect to receive 10% to 50% of their equity grant in the form of restricted shares of selected mutual funds managed by our affiliates, Advisory Research or FAMCO. The mutual fund restricted shares have the same restrictions that would apply to restricted stock, and also vest ratably over three years. We adopted the MFRS Plan to provide our executives an opportunity to diversify the equity compensation they receive, and believe the plan will help us attract and retain top talent. It also capitalizes on the strength of our asset management business by allowing us to offer a compensation plan that most of our competitors cannot provide. For the current year, none of our named executive officers participated in this plan, though we expect in future years that one or more executive officers may participate. In May 2008, the Committee granted a long-term, performance-based restricted stock award to our executive officers at that time, which will not vest unless the Other Compensation Our executives receive only limited perquisites, as illustrated in Some of our We do not have any separate change-in-control agreements (often referred to as “golden parachute” arrangements) that would pay a Under our Incentive Plan, following a termination of employment (other than as a result of a change-in-control), our stock option awards granted during and after 2007 and our restricted stock Executive officers who are terminated during the year (other than as a result of a change-in-control) will receive cash and equity compensation for that year under our annual incentive program in the discretion of the Committee. Compensation Policies Executive Stock Ownership We have adopted stock Equity Grant Timing Policy In 2006, we established a policy pursuant to which equity grants to employees will be made only once each quarter, on the Section 162(m) of the Internal Revenue Code limits deductions for non-performance-based annual compensation in excess of $1 million paid to our named executive officers who served as executive officers at the end of the preceding fiscal year. Our policy is to maximize the tax deductibility of compensation paid to these officers. Accordingly, in 2004, 2006, and 2008 we sought and obtained shareholder approval for the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan, under which our annual incentive program is administered and annual cash and equity incentives are paid. The This Compensation Discussion and Analysis includes the use of The Committee has reviewed and discussed the Compensation Discussion and Analysis with management and has recommended to the Board of Directors the inclusion of the Compensation Discussion and Analysis in the company’s year-end disclosure documents. Compensation Committee of the Board of Directors of Piper Jaffray Companies Michele Volpi,Chairperson Lisa K. Polsky Frank L. Sims The following table contains compensation information for our chief executive officer, our chief financial officer, and our three other most highly compensated executive officers. Andrew S. Duff Chairman and CEO 2010 2009 608,333 400,000 995,834 1,200,000 1,200,000 — 11,691 11,691 2,815,858 1,611,691 Debbra L. Schoneman Chief Financial Officer 2010 2009 391,667 225,000 215,000 315,000 210,000 — 6,768 6,963 823,435 546,963 James L. Chosy General Counsel and Secretary( 2010 391,667 128,000 170,000 11,253 700,920 Brien M. O’Brien Head of Asset Management(4) 2010 354,167 3,525,398 — 144,082 4,023,647 Thomas P. Schnettler Former President and Chief Operating Officer 2010 2009 508,333 300,000 930,417 1,155,000 945,000 — 9,270 27,750 2,393,020 1,482,750 The amounts in this column include the cash compensation paid under our annual incentive The entries in the All other compensation consists of the following: Form of All Other Compensation ($) Club membership dues 2010 2009 4,494 4,494 — — 4,200 n/a 20,669 n/a — — 401(k) matching contributions 2010 2009 6,408 6,408 6,408 6,408 6,408 n/a 6,408 n/a 6,408 6,408 Life and long-term disability insurance premiums 2010 2009 789 789 360 555 645 n/a 78,994 n/a 789 789 Automobile lease payments 2010 2009 — — — — — n/a 34,111 n/a — — Other 2010 2009 — — — — — n/a 3,900 n/a 2,073 20,553 Amount for “Club membership dues” for Messrs. Chosy and Duff in 2011 consisted for annual dues for a Minneapolis-based club membership, and the amounts for Mr. O’Brien in 2010 were provided pursuant to a now-expired letter agreement entered into as part of our acquisition of Advisory Research, Inc. The “Other” amounts identified in the table above Messrs. The following table provides information regarding the grants of plan-based awards made to the named executive officers during the year ended December 31, Name Andrew S. Duff Debbra L. Schoneman James L. Chosy Brien M. O’Brien Thomas P. Schnettler The Compensation Committee approved a grant of stock The amount in The The following table sets forth certain information concerning equity awards held by the named executive officers that were outstanding as of December 31, Name Andrew S. Duff Debbra L. Schoneman James L. Chosy Brien M. O’Brien Thomas P. Schnettler The shares of restricted stock vest on the dates and in the amounts set forth in the table below, so long as the award recipient complies with the terms and conditions of the applicable award agreement.• FORall of the nominees for director; and• FORthe amendment to the Incentive Plan to increase the number of shares of our common stock available for issuance under the Incentive Plan by 1,500,000 shares. The Board of Directors believes that this proposal is critical to Piper Jaffray’s future success, so please vote your shares, or instruct your broker, bank, trust or other nominee to vote FOR this proposal.• FORall of the nominees for director; and• FORthe amendment to the Incentive Plan.3FOR all of the nominees for director;
FORthe ratification of the selection of Ernst & Young LLP as the independent auditor of Piper Jaffray Companies for the year ending December 31, 2012; andelectionratification of the nomineesselection of Ernst & Young LLP as our independent auditor for director,the year ending December 31, 2012, the rules permit member brokers (other than our broker-dealer subsidiary, Piper Jaffray & Co.) to exercise voting discretion as to the uninstructed shares. IfFor matters with respect to which the broker, bank or other nominee does not have voting discretion or has, but does not exercise, thisvoting discretion, the uninstructed shares will be referred to as a “broker non-vote.” With respect to the amendment to the Incentive Plan, however, member brokers (including Piper Jaffray & Co.) maynotexercise voting discretion and thus uninstructed shares will not be voted on this proposal. For more information regarding the effect of broker non-votes on the outcome of the vote, see below under “How are votes counted?”• by submitting a later-dated proxy by Internet or telephone before 11:59 p.m. Eastern Daylight Time on Wednesday, May 6, 2009;• by submitting a later-dated proxy to the corporate secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting;• by sending a written notice of revocation to the corporate secretary of Piper Jaffray Companies, which must be received by us before the time of the annual meeting; or• by voting in person at the meeting.fivenine director nominees who receive the most votes cast at the meeting in person or by proxy will be elected.amendratify the Incentive Plan, provided, however, that a majorityselection of our independent auditor.total number of outstanding shares of common stock mustadvisory vote on the proposal.compensation of our officers included in this proxy statement receives more votes “for” than “against,” then it will be deemed to be approved.other proposal.selection of Ernst & Young LLP as our independent auditor for the year ending December 31, 2012 and the advisory say-on-pay vote. If you properly submit your proxy but withhold authority to vote for one or more director nominees or abstain from voting on the other proposal,proposals, your shares will be counted as present at the meeting for the purpose of determining a quorum and for the purpose of calculating the vote on the particular matter(s) with respect to which you abstained from voting or withheld authority to vote. If you do not submit your proxy or voting instructions and also do not vote by ballot at the annual meeting, your shares will not be counted as present at the meeting for the purpose of determining a quorum unless you hold your shares in street name and the broker, bank, trust or other nominee has discretion to vote your shares and does so. For4amendratify the Incentive Plan,selection of Ernst & Young LLP as our independent auditor, if you abstain from voting, thisdoing so will have the same effect as a vote against the proposal, but if you do not vote your shares (or, for shares held in street name, if you do not submit voting instructions and your broker, bank, trust or other nominee does not or may not vote your shares), this will have no effect on the outcome of the vote. However, a failure to vote or a broker non-vote withWith respect to the Incentive Plan may affectproposal to approve the advisory say-on-pay vote, if you abstain from voting toor if you do not vote your shares or submit voting instructions, this will have no effect on the extent that the failure to vote or the broker non-vote causes less than a majorityoutcome of the outstanding shares of common stock to be voted on this proposal.$25,000$20,000 plus reimbursement of out-of-pocket expenses. We are soliciting proxies primarily by mail. In addition, our directors, officers and regular employees may solicit proxies personally, telephonically, electronically or by other means of communication. Our directors, officers and regular employees will receive no additional compensation for their services other than their regular compensation.eight. In 2007, our Board of Directors and shareholders approved an amendment and restatement of our Amended and Restated Certificate of Incorporation, which declassified our Board of Directors and provided fornine. At the annual election of all of our directors in a manner that does not affect the unexpired terms of the directors elected prior to our 2008 annual meeting. By staggering the implementation of the declassified board in a manner that does not affect unexpired terms, the directors who previously served in Classes II and III are the only nominees for election at our 2009 annual meeting. At our 20102012 annual meeting, and each annual meeting thereafter, our shareholders will be asked to vote forto elect each of the entire Boardnine current members of Directors.At this year’s annual meeting, the terms of our directors who previously served as Class II and Class III directors will expire.Board.andFrank L. Sims, Jean M. Taylor, Michele Volpi and Hope B. Woodhouse have been nominated for reelection to the Board to serve until our 20102013 annual meeting of shareholders or until their successors are elected and qualified. Each of the nominees has agreed to serve as a director if elected. The fivenine nominees receiving a plurality of the votes cast at the meeting in person or by proxy will be elected. Proxies may not be voted for more than fivenine directors. If, for any reason, any nominee becomes unable to serve before the annual meeting occurs, the persons named as proxies may vote your shares for a substitute nominee selected by our Board of Directors.5fivenine director nominees. Proxies will be voted FOR the election of the fivenine nominees unless otherwise specified.directordirector.for the directors whose termschief executive officer since December 31, 2003. Mr. Duff became chairman and chief executive officer of office will continue after the meeting.Nominees for ElectionPiper Jaffray Companies following completion of our spin-off from U.S. Bancorp on December 31, 2003. He has served as chairman of our broker-dealer subsidiary since 2003, as chief executive officer of our broker-dealer subsidiary since 2000 and as president of our broker-dealer subsidiary since 1996. He has been with Piper Jaffray since 1980. Prior to the Boardspin-off from U.S. Bancorp, Mr. Duff also was a vice chairman of Directors for a One-Year Term Expiring in 2010U.S. Bancorp from 1999 through 2003.46,49, director since December 31, 2003. Since October 2011, Mr. Francis ishas served as president of J.C. Penney Company, Inc., a department store and online retail company. Prior to joining J.C. Penney, Mr. Francis was the executive vice president and chief marketing officer for Target Corporation a position he has held sincefrom August 2008. Target Corporation operates Target-brand general merchandise discount stores and an online business, Target.com. Mr. Francis began his career with Marshall Field’s department stores in 1985 and has been with Target Corporation since its acquisition of Marshall Field’s in 1990.2008 to October 2011. He previously served Target Corporation as executive vice president, marketing from 2003 until August 2008, senior vice president, marketing from 2001 to 2003, and as senior vice president, marketing and visual presentation of the department store division from 1995 to 2001. Prior to that, he held a variety of positions within Target Corporation.57,60, director since December 31, 2003. Since 2000, Ms. Johnson has been president of Affinity Capital Management, a Minneapolis-based venture capital firm that invests primarily in seed and early-stage health care companies in the United States. Ms. Johnson served62,65, director since December 31, 2003. Mr. Piper retired from Piper Jaffray effective at the end of 2006, having served as vice chairman of Piper Jaffray Companies since the completion of our spin-off from U.S. Bancorp on December 31, 2003. He worked for Piper Jaffray from 1969 through 2006, serving as assistant equity syndicate manager, director of securities trading and director of sales and marketing. He served as chief executive officer from 1983 to 2000 and as chairman from 1988 to 2003. From 1998 through August 11, 2006, Mr. Piper also had responsibility for our venture and private capital fund activities. Mr. Piper also isserved as a member of the board of directors of Renaissance Learning Corporation.52,55, director since May 2, 2007. In February 2009,Since May 2010, Ms. Polsky joinedhas been executive vice president, chief risk officer of CIT Group, Inc., a bank holding company that focuses on small business and middle market lending and financing. Prior to joining CIT Group, Ms. Polsky worked at Jane Street Capital, LLC, a New York-based quantitative proprietary trading firm.firm, from February 2009 until May 2010. From March 2008 until joining Jane Street Capital, she served as partner and head of global investment solutions for Duff Capital Advisors, which provides integratedprovided portfolio solutions to funding liabilities and fulfilling investment needs, particularly in the retirement space. She previously served as the president of Polsky Partners, a New York-based consulting firm specializing in hedge fund allocation, risk management and valuation policy, which she founded in 2002. Ms. Polsky also has served as managing director, head of client financing services and head of leveraged client channel with Merrill Lynch & Co., Inc. from 2000 to 2002, and as managing director, chief risk officer, head of risk policy, chief derivative strategist and head of product development at Morgan Stanley DW Inc. from 1996 to 2000. Ms. Polsky isserved as a member of the board of directors of thinkorswim Group Inc.JEAN M. TAYLOR: Age 46, director since July 27, 2005. Ms. Taylor is the president and chief executive officer of Taylor Corporation, positions she has held since 2001 and from 2007 respectively. Taylor Corporation is a privately held group of approximately 80 affiliated entrepreneurial companies engaged in marketing, fulfillment, personalization and printing services. These businesses operate throughout North America, Europe and Australia and together employ more than 15,000 employees. Ms. Taylor joined Taylor Corporation in 1994 as vice president and served as executive vice president from 1999 to 2001.6Members of the Board of Directors Continuing in OfficeANDREW S. DUFF: Age 51, chairman and chief executive officer since December 31, 2003. Mr. Duff became chairman and chief executive officer of Piper Jaffray Companies following completion of our spin-off from U.S. Bancorp on December 31, 2003. He also has served as chairman of our broker-dealer subsidiary since 2003, as chief executive officer of our broker-dealer subsidiary since 2000 and as president of our broker-dealer subsidiary since 1996. He has been with Piper Jaffray since 1980. Prior to the spin-off from U.S. Bancorp, Mr. Duff alsountil June 2009 while it was a vice chairman of U.S. Bancorp from 1999 through 2003.SAMUEL L. KAPLAN: Age 72, director since December 31, 2003. Mr. Kaplan is a partner and founding member of the law firm of Kaplan, Strangis and Kaplan, P.A., Minneapolis, Minnesota, and has served as the firm’s president continuously since the firm was founded in 1978.58,61, director since December 31, 2003. Mr. Sims retired from Cargill, Inc. effective at the end of 2007, having served as corporate vice president, transportation and product assurance and a member of the management corporate center since July 2000. Cargill is a marketer and distributor of agricultural and industrial products and services. Mr. Sims had responsibility for global transportation and supply chain solutions and served as a member of the risk management and financial solutions platform. He joined Cargill in 1972 and served in a number of executive positions, including president of Cargill’s North American Grain Division from 1998 to 2000. Mr. Sims is a member of the board of directors of PolyMet Mining Corp., and he served as a member of the board of directors of Tennant Company from 1999 through 2007. of which are available on our website atwww.piperjaffray.com. Other corporate governance documents available on our website include, together with our Corporate Governance Principles, Director Independence Standards, Director Nominee Selection Policy, Procedures for Contacting the Board of Directors, Codes of Ethics and Business Conduct, and Complaint Procedures Regarding Accounting and Auditing Matters. All of these documents also are available in print to any shareholder who requests them.and are available in print to any shareholder who requests them.. We will post on our website atwww.piperjaffray.comor file a Form 8-K with the Securities and Exchange Commission disclosing any amendment to, or waiver from, a provision of either of our Codes of Ethics and Business Conduct within four business days following the date of such amendment or waiver.the following categorical Director Independence Standards, which are available on our website atwww.piperjaffray.com. Under the Director Independence Standards, a director will be deemed independent for purposes of service on the Board if:(1) the director does not have any relationship described in Rule 303A.02(b) of the New York Stock Exchange corporate governance rules;7(2) in the event the director has a relationship that is not of a type described in the Director Independence Standards or that exceeds the limits of the relationships described in the Director Independence Standards, the Board determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material; and(3) the Board reviews all commercial, banking, consulting, legal, accounting, charitable, familial and other relationships the director has with Piper Jaffray that are not of a type described in the Director Independence Standards and determines in its judgment, after broad consideration of all relevant facts and circumstances, that the relationship is not material.Our Director Independence Standards deem the following types of relationships not to be material relationships that would cause a director not to be independent:(a) Piper Jaffray has made payments for goods or services to, or has received payments for goods or services from, the primary business affiliation of the director or an immediate family member of the director in an aggregate amount during a fiscal year that does not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues for that fiscal year;(b) lending relationships, deposit relationships, or other banking relationships between Piper Jaffray, on one hand, and a director’s or immediate family member’s primary business affiliation, on the other hand, if the relationship is in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with similarly situated non-affiliates;(c) the director or an immediate family member, or their primary business affiliation, maintains a brokerage, margin or similar account with, or has purchased investment services, investment products, securities or similar products and services from Piper Jaffray, including ownership of interests in partnerships or funds sponsored or managed by Piper Jaffray, if the relationship is on substantially the same terms as those prevailing at the time for comparable transactions with similarly situated non-affiliates;(d) the director or an immediate family member is a partner or associate of, or of counsel to, a law firm providing services to Piper Jaffray if (i) such person has not personally provided legal services to Piper Jaffray, and (ii) the aggregate payments received by the law firm from Piper Jaffray in any fiscal year do not exceed the greater of $1 million or 2% of the law firm’s consolidated gross revenues for that fiscal year;(e) a relationship arising solely from a director’s, an immediate family member’s, or their primary business affiliation’s ownership of an equity or limited partnership interest in an entity that engages in a transaction with Piper Jaffray, if the director’s, the immediate family member’s or their primary business affiliation’s ownership interest does not exceed 5% of the total equity or partnership interests in that other entity;(f) a relationship arising solely from a director’s position as a director of another company that provides services to, or is provided services by, Piper Jaffray;(g) a relationship arising from both an interest as described in subsection (e) and a position as described in subsection (f) above;(h) a relationship arising solely because an immediate family member of the director is a director or employee of another company that provides services to, or is provided services by, Piper Jaffray;(i) the director or an immediate family member has received personal loans from Piper Jaffray that are specifically permitted under Section 402 of the Sarbanes-Oxley Act of 2002 and any regulations adopted thereunder;(j) the director or an immediate family member is a director, trustee or executive officer of a foundation, university or other non-profit organization that receives from Piper Jaffray or the8Piper Jaffray Foundation charitable contributions in an amount that does not exceed the greater of $100,000 or 5% of the organization’s aggregate annual charitable receipts during its preceding fiscal year; and(k) the director’s primary business affiliation is a venture capital, private equity, hedge fund, merchant bank, asset manager or similar investment firm and a portfolio company thereof engages Piper Jaffray or its subsidiaries to provide investment banking or financial advisory services and such engagement is in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with similarly situated companies.For purposes of these standards, a director’s “primary business affiliation” means an entity of which the director is an executive officer, partner or employee or owns directly at least a 10% equity interest, and an immediate family member’s “primary business affiliation” means an entity of which the immediate family member is an executive officer, general partner or owns directly or indirectly at least a 10% equity interest.the foregoingour Director Independence Standards, that none of our non-employee directors other than Addison L. Piper has a material relationship with Piper Jaffray and that other than Mr. Piper, each non-employee director (including Michael R. Francis, B. Kristine Johnson, Samuel L. Kaplan, Lisa K. Polsky, Frank L. Sims and Jean M. Taylor)of them is independent. NoneWhen determining the independence of theour independent directors, has a relationship described in Rule 303A.02(b) of the New York Stock Exchange rules, and, with one exception, every relationship between Piper Jaffray and each of these directors is of a type described inBoard considered the Director Independence Standards and does not exceed the limits set forth in the Director Independence Standards. Within thefollowing types of relationships listed above,transactions or arrangements: (i) with respect to Messrs. Francis and Kaplan,Piper, and Ms. Johnson, Ms. Taylor and Ms. Polsky, havethe Board considered immaterial commercial relationships withbetween Piper Jaffray and companies with which each of those directors is associated or an immediate family member of the type described in (a);director is associated that are deemed to be immaterial under our Director Independence Standards; with respect to Mr. Francis, Ms. JohnsonVolpi, the Board considered a brokerage account with the company (provided on substantially the same terms and Ms. Taylor have relationshipsconditions as other similarly-situated clients) that is deemed to be immaterial under our Director Independence Standards, (ii) with Piper Jaffray of the type described in (f);respect to Messrs. Francis, KaplanPiper and Sims, and Ms. Johnson and Ms. Taylor, havethe Board considered immaterial relationships withbetween Piper Jaffray and charitable foundations or other non-profit organizations with which each of those directors or an immediate family member of the type described in (j);director is associated and Ms. Johnson has a relationshipthat are deemed to be immaterial under our Director Independence Standards; and (iii) with respect to Mr. Piper, the Board considered distributions and capital commitments from legacy venture capital funds of Piper Jaffray of the type described in (k). The Board also considered(currently administered by a third party) that Ms. Johnson’s nephew is an investment banking analyst forare deemed to be immaterial under our company and determined that this relationship is not material given the nature of the family relationship and the position.Our other directors, Director Independence Standards. and Mr. Piper, cannot be considered an independent directors because of relationships with the company that are described in Rule 303A.02(b) of thedirector under New York Stock Exchange corporate governance rules. Specifically, Mr. Duffrules because he is employed as our chief executive officer,officer.Mr. Piper was employed as an executive officer of Piper Jaffray within the last three years.The BoardDirectorschairman and chief executive officer. Since 2006, the Board has appointed Mr. Kaplan to serve as thea lead director of the Board. Mr. Francis currently serves as the lead director. The lead director has the following duties and responsibilities, as described in our Corporate Governance Principles:• presides at all meetings of the board at which the chairman is not present, including executive sessions of the independent directors, and coordinates the agenda for and moderates these executive sessions;• • monitors board meeting schedules and agendas to ensure that appropriate matters are covered and that there is sufficient time for discussion of all agenda items;• monitors information sent to the board and advises the chairman as to the quality, quantity and timeliness of the flow of information;• has authority to call meetings of the independent directors; and9
The company’s management is responsible for defining the various risks facing the company, formulating risk management policies and procedures, and managing the company’s risk exposures on a day-to-day basis. The Board’s responsibility is to monitor the company’s risk management processes by informing itself concerning the company’s material risks and evaluating whether management has reasonable controls in place to address the material risks; the Board is not responsible, however, for defining or managing the company’s various risks. The Audit Committee of the Board of Directors is primarily responsible for monitoring management’s responsibility in the area of risk oversight, and risk management is a factor the Board and the Nominating and Governance Committee consider when determining which directors serve on the Audit Committee. Accordingly, management regularly reported to the Audit Committee on risk management during 2011. The Audit Committee, in turn, reports on the matters discussed at the committee level to the full Board. The Audit Committee and the full Board focus on the material risks facing the company, including operational, market, credit, liquidity, legal and regulatory risks, to assess whether management has reasonable controls in place to address these risks. In addition, the Compensation Committee is charged with reviewing and discussing with management whether the company’s compensation arrangements are consistent with effective controls and sound risk management. The Board believes this division of responsibilities provides an effective and efficient approach for addressing risk management.• if requested by major shareholders, makes himself available for consultation and direct communication.Kaplan,Francis, our lead director, serves as the presiding director ofat executive sessions of the Board, and the chairperson of each committee serves as the presiding director at executive sessions of that committee. At least once annually, our independent directors meet in an executive session without Messrs. Piper and Duff.Members: Audit Committee Compensation Committee Nominating and
Governance CommitteeChair X X X ChairpersonSamuel L. KaplanLisa K. PolskyChair X X Chair X 2008.2011. The Board has determined that all members of the Audit Committee are independent (as that term is defined in the applicable New York Stock Exchange rules and in regulations of the Securities and Exchange Commission), that all members are financially literate and have the accounting or related financial expertise required by the New York Stock Exchange rules, and that each of Mr. Sims, Ms. Polsky and Ms. PolskyWoodhouse is an “audit committee financial expert” as defined by regulations of the Securities and Exchange Commission.Members: Lisa K. Polsky,ChairpersonMichael R. FrancisFrank L. SimsJean M. TaylorIn addition, theThe Committee is responsible for recommending stock ownershiptheour 2003 Annual and Long-Term Incentive Plan (the “Incentive Plan”) to allocate awards to employees other(other than our executive officersofficers) in connection with our annual equity10year. The annual equity grants areyear (as part of the payment of incentive compensation for the preceding year.year). Under this delegated authority, the Committee approves the aggregate amount of equity to be awarded to all employees other than executive officers, and the chief executive officer approves the award recipients and specific amount of equity to be granted to each recipient. All other terms of the awards are determined by the Committee. The Committee also has delegated authority to the chief executive officer to grant equity awards to employees other than executive officers in connection with recruiting, retention and significant promotions. This delegation permits the chief executive officer to determine the recipient of the award as well the type and amount of the award, subject to an annual share limitation set by the Committee each year. All awards granted pursuant to this delegated authority must be made in accordance with our equity grant timing policy described below in “Compensation Discussion and Analysis — Equity Grant Timing Policy.” All other terms of the awards are determined by the Committee.administrative officer and our Human Resources department.financial officer. These personnel work closely with the chief executive officer and, as appropriate, the chief financialgeneral counsel and accounting officers and theassistant general counsel, to prepare and present information and recommendations for review and consideration by the Committee, as described below under “Compensation Discussion and Analysis — Setting Compensation — Involvement of Executive Officers.”In 2008, theTowers Perrin,Frederic W. Cook & Co., to provide peer group analyses, competitive assessments, program design recommendationsstrategic planning, market context, and general advice to the Committee with respect to executive compensation, as described below under “Compensation Discussion and Analysis — Setting Compensation — Compensation Consultant.”fiveeight times during 2008.2011. The Board has determined that all members of the Compensation Committee are independent (as that term is defined in applicable New York Stock Exchange rules).Members: Samuel L. Kaplan,ChairpersonMichael R. FrancisB. Kristine JohnsonJean M. Taylorevaluatesreviews the annual evaluation process for the chief11sixfour times during 2008.2011. The Board has determined that all members of the Nominating and Governance Committee are independent (as that term is defined in applicable New York Stock Exchange rules).eightsix meetings during 2008.2011. Each of our incumbent directors attended at least 75% of the meetings of the Board of Directors and the committees on which he or she served during 2008, other than Mr. Francis. Mr. Francis attended 70% of the meetings of the Board of Directors and the committees on which he served for the year as2011. As a result of absences due to a prolonged family medical issue during 2008. Attendancegroup, attendance at our Board and committee meetings during 20082011 averaged 94.7%97.9% for our directors as a group, and sixwho were nominated for re-election at the 2012 annual meeting of shareholders. All of our directors attendedwho were serving on the 2008Board as of the date of our 2011 annual meeting of shareholders.J09N05,J12SSH, Minneapolis, Minnesota 55402. Communications regarding accounting and auditing matters will be handled in accordance with our Complaint Procedures Regarding Accounting and Auditing Matters. Other communications will be collected by the secretary of the company and delivered, in the form received, to the lead director or, if so addressed, to a specified director.J09N05,J12SSH, Minneapolis, Minnesota 55402.12ethnic diversity.ethnicity. Based on these factors and the qualifications and background of each director, the Board believes that its current composition is diverse. As indicated above, diversity is one factor in the total mix of information the Board considers when evaluating director candidates. The Committee will reassess the qualifications of a director, including the director’s attendance, and contributionsinvolvement at Board and committee meetings and contribution to Board diversity, prior to recommending a director for reelection.Directors who are not Piper Jaffray employees receive an of $50,000 for service on our Board and Board committees. No separate meeting fees are paid. TheAlso, the lead director and the chairperson of the Audit Committee each receivesreceived an additional annual cash retainer of $8,000. The$20,000, the chairperson of each other standing committeethe Compensation Committee received an additional annual cash retainer of $10,000, and the chairperson of the Board each receivesNominating and Governance Committee received an additional annual cash retainer of $5,000. In additionOur non-employee director compensation program provides that each non-employee director receives a $60,000 grant of stock on the date of a director’s initial election or appointment to the cash retainer, we grant equity awards to our non-employee directors to further align their interests with thoseBoard for a number of our shareholders. We grant non-employee directors who continue their service onshares determined by dividing $60,000 by the Board following an annual meeting of shareholders 1,000 sharesclosing price of our common stock on the date of initial election or appointment. Directors whose service on the Board continues following each annual meeting. In addition, each non-employee director receives 500 sharesmeeting of our common stock onshareholders receive an annual equity grant of $60,000 as of the date of the director’s initial election to the Board. Theannual meeting. All equity awards granted to our non-employee directors are granted under the Incentive Plan. Non-employee directors who join our Board after the first month of a calendar year are paid a pro rata annual retainersretainer and awarded a pro rata annual equity awardsaward based on the period they serve as directorsa director during the year.company by our non-employee directors.company. The plan permits our non-employee directors to defer all or a portion of the cash payable to them and shares of common stock granted to them for service as a director of Piper Jaffray for any calendar year. All cash amounts and share grants deferred by a participating director are credited to a recordkeeping account and deemed invested in shares of our common stock as of the date the deferred fees otherwise would have been paid or the shares otherwise would have been issued to the director. This deemed investment is measured in phantom stock, and no shares of common stock are reserved, repurchased or issued pursuant to the plan. With respect to cash amounts that have been deferred, the fair market value of all phantom stock credited to a director’s account will be paid out to the director (or, in the event of the director’s death, to his or her beneficiary) in a single lump-sum cash payment following the director’s cessation of service as a non-employee director.service. The amount paid out will be determined based on the fair also may participate in our charitable gift matching program, pursuant to which we will match a director’s gifts to eligible organizations dollar for dollar from a minimum of $50 up to an aggregate maximum of $1,500 per year. In addition, our non-employee directors are reimbursedWe also reimburse for reasonable out-of-pocket expenses incurred in connection with their service on the Board132008.20082011 Fees Earned or Paid in Cash Annual Additional Stock Option All Other Retainer Retainer(1) Awards(2)(3) Awards(3) Compensation(4) Total ($) ($) ($) ($) ($) ($) Michael R. Francis 50,000 5,000 37,630 — — 92,630 B. Kristine Johnson 50,000 — 37,630 — 1,500 89,130 Samuel L. Kaplan 50,000 (5) 13,000 (5) 37,630 (7) — 1,500 102,130 Addison L. Piper 50,000 — 47,691 (8) 1,824 (8) 22,566 122,081 Lisa K. Polsky 50,000 (5) 1,352 (5) 37,630 (7) — 1,500 90,482 Frank L. Sims 50,000 8,000 37,630 (7) — 1,500 97,130 Jean M. Taylor 50,000 (6) — 37,630 (7) — 1,500 89,130 Fees Earned or Paid in Cash Stock
Awards(1)(2)
($) All Other
Compensation(3)
($) Total
($) Annual
Retainer
($) Additional
Retainer
($) 60,000 25,000 60,006 (4) — 145,006 20,384 (5) — — — 20,384 60,000 — 60,006 2,130 122,136 60,000 — 60,006 (4) 2,130 122,136 60,000 (4) 905 (4)(6) 60,006 (4) 1,500 122,411 60,000 20,000 60,006 (4) 1,734 141,740 60,000 — 60,006 (4) 1,500 121,506 60,000 9,095 (7) 60,006 2,130 131,231 16,603 (8) — 76,622 (4)(9) 1,500 94,725 (1) (1)The amounts in this column reflectadditional cash retainer of $8,000 paid to each of the lead director and the chairperson of the Audit Committee as well as the additional cash retainer of $5,000 paid to the chairperson of each other standing committee of the Board. Ms. Polsky became the chairperson of the Compensation Committee on September 23, 2008 and received a pro rated portion of the additional cash retainer payable to the chairperson of the Compensation Committee for 2008.(2)Each non-employee director received a grant of 1,000 shares of our common stock on May 7, 2008, the day of our 2008 annual meeting of shareholders. The values in this column reflect the $37.63 closing sale price of our common stock on the New York Stock Exchange on May 7, 2008 multiplied by the number of shares granted, which isaggregate grant date fair value of each award computedcalculated in accordance with Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123(R)”).generally accepted accounting principles.( (3)2) 2008,2011, our non-employee directors held stock and option awards as set forth in the table below. The stock award values are based on the $39.76$20.20 closing sale price of our common stock on the New York Stock Exchange on December 31, 2008, and30, 2011, the option award values are based on the difference between the exercise pricelast trading day of the in-the-money stock options and the closing price of $39.76.2011. The amounts for Mr. Piper include restricted stock and stock option awards granted to him in 2004, 2005 2006 and 20072006 during his tenure as an executive officer of the company. ReferBecause all stock options held by our directors were out-of-the-money based on the closing sale price of our common stock on the New York Stock Exchange on December 30, 2011, the last trading day of 2011, no value is attributed to Note 21those stock options in the Notes to Consolidated Financial Statements included in our Annual Report onForm 10-K filed on February 28, 2009 for a discussion of the relevant assumptions used to determine the valuation of our stock and option awards for accounting purposes. Stock Year-End Value of Option Year-End Value of Awards Stock Awards Awards Option Awards (#) ($) (#) ($) Michael R. Francis 2,000 79,520 11,800 67,128 B. Kristine Johnson 2,000 79,520 11,800 67,128 Samuel L. Kaplan 2,000 79,520 11,800 67,128 Addison L. Piper 12,924 513,858 11,614 304 Lisa K. Polsky 2,169 86,239 — — Frank L. Sims 2,000 79,520 11,800 67,128 Jean M. Taylor 2,000 79,520 5,963 25,446 14 Stock Awards
(#) Year-End Value of
Stock Awards
($) Option Awards
(#) Year-End Value of
Option Awards
($) 6,325 127,765 11,880 — 3,033 61,267 — — 6,325 127,765 11,880 — 13,620 275,124 11,614 — 6,494 131,179 — — 6,325 127,765 11,880 — 6,325 127,765 5,963 — 4,465 90,193 — — 4,187 84,577 — — (3) (4)20082011 consists of the following: • ŸMessrs. Kaplan and SimsMs. Woodhouse include charitable matching contributions made by Piper Jaffray. • Ÿamountamounts for Mr.Messrs. Piper, consists of the following: (A) $16,968Sims and Volpi and for Ms. Johnson include the cost of office space that the company agreedairfare for their respective spouses to provide Mr. Piper following his retirement and related moving expenses, (B) $1,098 for travel expenses for Mr. Piper related to a teaching engagement profiling the company conducted at a leading university’s graduate business school, (C) $3,000 paid to Mr. Piper for his service as a member of an investment committee for certain funds managed by our private equity business, and (D) $1,500 of charitable matching contributions made by Piper Jaffray.offsite directors’ retreat we held during 2011.(4) (5)All of the cash fees received(5) (6)Twenty percentcash fees received were deferred pursuant tofull annual retainer for the Piper Jaffray Companies Deferred Compensation Plan for Non-Employee Directors.(7)Allportion of the restricted shares received were deferred pursuant toyear Ms. Gambale served on the Piper Jaffray Companies Deferred Compensation Plan for Non-Employee Directors.Board (January 1, 2011 — May 4, 2011).( (8)6) The amount includes amounts amortized in accordance with restricted stock and stock option awards granted to Mr. Piper prior to 2008 under our Incentive Plan during his tenure as an executive officercompany.full additional annual cash retainer for the portion of the year Ms. Polsky served as chairperson of the Compensation Committee (January 1, 2011 — February 2, 2011).(7) (8) (9) IntroductionIn 2008, global economicfinancialcontinued sluggishness in the U.S. economy led to broad-based market conditionsdeclines and volatility that negatively impacted almost all aspects of our business, particularly capital-raising for equity investment banking. Interest rates remained at historically low levels during the year, and volatility in the macroeconomic environment widened credit spreads. This interest rate environment negatively impacted our fixed income institutional business as investors reduced activity and shifted to shorter-duration fixed income securities.extraordinarily difficult,not, however, able to fully offset the impact of lower revenues from the challenging second half environment and these conditionslosses in our Asia business, which resulted in Piper Jaffray postinglower financial performance.operatingimpairment to our capital markets segment goodwill had occurred. Accordingly, we recognized a $118.4 million non-cash, after-tax goodwill impairment charge ($120.3 million pre-tax), with the substantial majority of the impaired goodwill created from the 1998 acquisition of our predecessor firm by U.S. Bancorp, which we retained after our spin-off from U.S. Bancorp on December 31, 2003.Ø Equity financing revenues decreased to $79.6 million, compared with $113.7 million in 2010. We completed 64 equity financings in 2011, raising $13.0 billion for our clients, compared with 96 equity financings, raising $11.9 billion in 2010. Our equity financing results were negatively impacted by reduced activity in Asia and market volatility in the second half of the year that slowed capital-raising more broadly, particularly initial public offerings. Ø municipal-issuer credit quality. During the year, our par value of negotiated issuance was down 15%, but the industry was down 36%. As a result, we gained market share. Ø Equity institutional brokerage revenues decreased to $92.4 million, compared with $106.2 million in 2010, attributable in part to lower U.S. client volumes in 2011 and our exit from the distribution of European securities in the fourth quarter of 2010. Ø Fixed income institutional brokerage revenues decreased to $75.8 million, compared to $79.8 million in 2010, as a decline in taxable fixed income sales and trading revenues was partially offset by higher municipal strategic trading revenues. Ø Our average effective revenue yield — total management fees as a percentage of average assets under management — was 56 basis points, compared to 53 basis points in 2010. Ø Segment pre-tax operating margin remained strong at 20.5%, though lower than 24.0% in 2010 due to lower performance fees in 2011. believe, however, that as a firm we fared comparatively well overall,continued to carefully monitor and remain focused on two key priorities: 1) appropriately adjusting our cost structure to enable us to operate through the difficult period, and 2) positioning the firm for when the markets eventually turn positive.Givencontain our operating lossexpenses, with non-interest expenses of $547.8 million for 2011, or $427.5 million on a non-GAAP basis that excludes the pre-tax $120.3 goodwill impairment charge. We had $472.8 million of non-interest expenses for 2010, which included $10.9 million of restructuring charges. The 9.6% decrease on a non-GAAP basis was driven by a decline in variable compensation due to lower operating performance, the restructuring charge incurred in 2010, and these priorities, ourcost saving initiatives. Committee determined, based in part upon the recommendation ofthat no memberchief financial officer, and each of the company’s Leadership Team would receive any type of annual incentive awardour three other most highly compensated executive officers for 2008 performance.The Leadership Team consists of eleven individuals who serve2011, as the executive officers of the company. Within this group, five constitute our “named executive officers” for purposes of this proxy statement. These individuals are:• Andrew S. Duff, our chairman and chief executive officer;• Debbra L. Schoneman, our chief financial officer;• Thomas P. Schnettler, our president and chief operating officer, who served as our vice chairman and chief financial officer until May 2008;• Jon W. Salveson, head of our Investment Banking business; and• Robert W. Peterson, head of our Equities business. the named executive officers, the Leadership Team includes the following six individuals: our chief executive officer and chief financial officer, this group includes our president and chief operating officer, head of Piper Jaffray Ltd. (our European operation),asset management and general counsel and secretary. At the end of 2011, our president and chief operating officer relinquished these roles and became a vice chairman of our U.S. broker-dealer subsidiary and head of merchant banking, though he remains in the proxy statement for his service during 2011.Piper Jaffray Asia, our head of Public Finance Services, our head of Fixed Income Services, our chief administrative officer,asset management, with his annual incentive decreasing to $1,893,990 from $3,525,398 in 2010; andcounsel.Nonecounsel, with his annual incentive decreasing to $137,000 from $213,333 in 2010.eleven individuals received an annual incentive awardreductions was to meaningfully reduce total compensation for 2008 performance.15The company’sThe companyWe continually reviews itsreview our executive compensation program to ensure it reflects good governance practices and the best interests of shareholders, while meeting the following core objectives: • Performanceperformance— As noted above, the Leadership Team, which includes our named executive officers, did not receive annual incentive compensation for 2008 based on the company’s operating results for the year. Consistent with historic industry practice, the company’s performance-based annual incentive has typically accounted for a significantA large portion of the total compensation for each named executive officer. The amount of compensation paid is based first on the performanceprofitability of the company, then applicablefollowed by the performance of each business unitunit. Each named executive officer’s performance is also measured against defined objectives in areas such as strategic initiatives, business performance, leadership effectiveness and individual performance goals. In 2008, the company posted an operating loss, and the Compensation Committee, based in part upon the recommendation of our chief executive officer, determined that the company’s Leadership Team would not receive any annual incentive award. The Committee reached this determination based on overall company performance even though certain executive officers within this group met their business unit and individual performance goals.people development. • Stock OwnershipSustain and strengthen the franchise— The companyOur compensation program is designed to be sufficiently competitive to allow us to attract and retain the most talented people who are committed to increasingthe long-term success of our company. Continued progress over the long term will create greater opportunity for executives, both in increased annual compensation and in the appreciation of the company’s equity.• • EquityWe believe that equity ownership betterdirectly aligns the interests of executivesour executive officers with those of our shareholders and helps to focus our executives on creating long-term shareholder value creation. The company’s practice has been to pay a significant portion of the total compensation for our named executive officers in the form of equity awarded under our Incentive Plan. In addition, for the first time since our spin-off from U.S. Bancorp on December 31, 2003, the Committee granted the Leadership Team a long-term, performance-based restricted stock award in May 2008, which requires that the company meet a return on adjusted common equity target of 11% over a twelve-month period by April 30, 2013. This performance target is a significant increase to the company’s historic return on equity, and the award is described in more detail below under “— 2008 Long-Term, Performance-Based Equity Grant”.• Recruiting and Retention— The securities industry has historically been marked by intense competition, and one of our key objectives has been to attract and retain outstanding executives who are motivated to achieve our mission to build the leading international middle-market investment bank and institutional securities firm. In previous years, retention has been a key area of focus for not only the Leadership Team, but also employees throughout the organization. As the company works to position itself for when the markets eventually turn positive, we will be focused not only on retaining our executives, but also on firm efforts to recruit.• Tax Deductibility and Compliance— The company’s executive compensation program is designed to maximize the tax deductibility of compensation payments to our named executive officers, to ensure that compensation is delivered as cost-efficiently as possible, and to comply with the deferred compensation rules set forth in Section 409A of the Internal Revenue Code, to avoid the payment of punitive excise taxes by our executive officers.value.of our Board of Directors (referredwhich we refer to as the “Committee” in this Compensation Discussion and Analysis)Analysis, has responsibility for approving the compensation paid to our executive officers and ensuring it meets our objectives. EarlyWith respect to our chief executive officer, the Committee has sole responsibility for evaluating performance and determining his compensation. In doing so, the chairperson of the Committee solicits evaluation input from each year,member of the Board of Directors, and also leads a discussion of the full Board reporting on the results of the annual evaluation. More generally, the Committee approves the amount of incentive compensation to be paid to our executive officers in recognition of prior-year performance, approves their base salaries for the upcoming year if there are changes and establishes performance goals for the Leadership Team under an annual incentive program. Subject to limits on the16chief administrative officer and our Human Resources department. Our chief administrative officer and head of human resources workcapital department, which works closely with our chief executive officer, and, as appropriate, our chief financial officer and our general counsel, to preparecounsel. The global head of human capital, together with these executive officers, prepares and presentpresents information and recommendations for review and consideration by the Committee in connection with its executive compensation decisions, including regarding the performance goals to be established under the annual incentive program;program, financial information reviewed in connection with executive compensation decisions;decisions, the firms to be included in the compensation peer group;group, the performance evaluations and compensation recommendations for the executive officers;officers, and the evaluation and compensation process to be followed by the Committee.Specifically respect to annual incentive compensation, our chief executive officer presents the Committee with his recommendations for each member ofand the Leadership Team other than himself. In November 2008, he made a recommendation to the Committee that no member of our Leadership Team should receive an annual incentive award based on the company’s operating results, and following further discussion the Committee approved his recommendation at its first regular meeting of 2009.Compensation Peer GroupOur Human Resources departmentCommittee’s independent compensation consultant, annually identifies a compensation peer group of firms with which we compete for executive talent,talent. As a middle-market, full-service investment bank with material asset management operations, we believe there are few other companies that are directly comparable to Piper Jaffray. In constructing our peer group for 2011, we attempted to assemble a group of companies primarily consisting of investment banks with revenues and thismarket capitalizations similar to ours, while including representation of companies with asset management operations, which are a significant and growing portion of our business. Our peer group currently consists of the following companies, each of whom we believe are direct competitors for talent in some aspect of our business:Cowen Group, Inc.; FBR Capital Markets Corporation; Jefferies Group, Inc.; KBW, Inc.; and Thomas Weisel Partners Group, Inc.JMP Group Inc. Evercore Partners Inc. KBW, Inc. FBR & Co. Lazard Ltd. Gleacher & Company, Inc. Oppenheimer Holdings Inc. Jefferies Group, Inc. Stifel Financial Corp. competitors.competitors to address issues we may encounter obtaining compensation information for executives holding positions comparable to our executive officers. The external market surveys that we used for 20082011 were prepared by McLagan Partners, Towers Perrin and Mercer, and generally related to our industry and sub-sectors within our industry.In prior years, We also used the surveys to gather market data outside of our industry in the corporate support area. This peer group and market data is an important factor considered by the Committee comparedwhen setting compensation, but it is only one of multiple factors considered by the base salaries, cash incentivesCommittee, and long-term incentivethe amount paid to each executive may be more or less than the composite market median based on individual performance, the roles and responsibilities of the executive, experience level of the individual, internal equity and other factors that the Committee deems important. As such, the Committee uses peer group and market survey information to put the total compensation proposed to be paid to each named executive officer in context of pay ranges for like positions at similar companies and to confirm that any variances from market norms are justified in light of the specific circumstances of our named executive officers.tofor 2011. The Committee believed that the market median data derived fromsignificant support for the 2011 say-on-pay vote demonstrates shareholders’ support of our compensation peer group,policies. We therefore maintained our historic pay-for-performance compensation structure implemented through annual incentive awards based on our adjusted pre-tax operating income, which resulted in a significant decline in the external market surveys and other available data, taking into consideration the features and constraints of this information. In 2008, our operating results took precedence over the actions of peer firms. Also, the rapid deterioration of global economic and financial market conditions during 2008 rendered the available data less meaningful, as prior year comparisons failed to accurately reflect current market conditions. Ultimately, the Committee determined not to award annual incentivestotal compensation paid to our entire Leadership Team based onnamed executive officers for 2011, and we continued to pay a meaningful portion of annual incentive awards in the operating resultsform of equity consistent with our philosophy of aligning the company for 2008.Compensation ConsultantIn 2008, the Committee engaged an independent outside compensation consultant, Towers Perrin, to provide ongoing assessmentsinterests of executives and advice to the Committee. The independent compensation consultant participated in four Committee meetings during the year, and advised the Committee regarding the information presented to the Committee by our Human Resources department. The only services provided by the compensation consultant to the company related to its services for the Committee, other than our Human Resources department’s use of three external market surveys prepared by Towers Perrin.PaymentsPayoutshas historically servedserves as long-term incentive compensation. In 2008,our primary long-term incentive compensation consisted of a one-time,17performance-based equity award, which is described below under “— 2008 Long-Term, Performance-Based Equity Grant”. Our executives also have the opportunity to participate in our company-wide Retirement Plan and to receive certain personal benefits, as described below. From time to time, some of our executives receive (or may be entitled to receive in the future) compensation paid out under historical compensation programs in which they participated in prior years and that continue to provide benefits, also as described below.market practices. Base salaries for our executive officers are determined annually by the Committee based on a review of the executive’s role and responsibilities, external market data for similar positions in companies with which we compete for executive talent, and the recommendations of the chief executive officer. The base salary levels of our named executive officers reflect a desire to maintain a relatively equitable compensation baseline among the individuals serving on our Leadership Team, other than our chief executive officer and our president whose contributions are distinguished by a higher base salary reflective of the decision-making responsibility of these positions. Consistent with industry practice and our pay-for-performance objective, the base salary for each of our named executive officers accounts for a relatively small portion of overall compensation.Historically, we have not adjusted base salaries for our Leadership Team members on an annual basis but have adjusted salaries for individuals upon their initial appointment to the Leadership Team, and have adjusted salaries for the Leadership Team as a group when warranted to reflect changes in market pay levels, as reported in external compensation sources, changes in the officers’ roles or responsibilities, or changes in contributions to the company. In light of this practice and the operating environment of 2008, the Committee did not make any changes tomarket. We increased the base salaries of any named executive officers for 2009, except for two promotional increases. Mr. Schnettler’s base salary was increased to $300,000in 2010 as a resultpercentage of his appointment astotal compensation to mitigate the potential for risk-taking generally associated with a compensation mix more heavily weighted to annual performance and in recognition of the importance of key leadership and daily accountabilities of our president and chief operating officer, and Ms. Schoneman’ssenior leaders. Prior to 2010, we had increased base salary was increased to $225,000 as a result of her appointment assalaries only once following our chief financial officer. Since the company’s spin-off from U.S. Bancorp in December 2003,2003. In light of the salary increases granted during 2010 and consistent with our past practice of not regularly granting salary increases, the salaries of most of our named executive officers were unchanged for 2011 compared to 2010. Ms. Schoneman’s base salary increased from $425,000 for 2010 to $500,000 for 2011 and Mr. O’Brien’s base salary increased from $425,000 for 2010 to $550,000 for 2011, in each case primarily in recognition of the important responsibilities they have for strategic matters and to maintain a level of internal pay equity among our named executive officers that the Committee has only increased the base salariesbelieves is appropriate.Leadership Team (outside of promotional increases) on one occasion, which occurred in 2007.Annual Incentive CompensationAs noted above, the Committee determined, based in part upon the recommendationcore objectives of our chief executive officer, that no member of the Leadership Team would receive any type of annual incentive award for 2008 performance. This determination was based primarily on the company’s operating results and management’s inability to achieve the performance goalscompensation program, which is pay-for-performance. The Committee has established in February 2008 under the company’san annual incentive program designedthat provides a significant portion of the total compensation paid to reward pay for performance.incentiveperformance goals determined each year by the Committee. The program is administered by the Committee under the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan and is designed to comply with the requirements of Section 162(m) of the Internal Revenue Code to ensure the tax deductibility of incentive compensation paid to our named executive officers. Under Section 162(m), we cannot deduct compensation in excess of $1 million that is paid to a named executive officer in any year unless the compensation qualifies as “performance-based” compensation under Section 162(m).Under Awards under the annual incentive program are referred to as “qualified performance-based awards.”Committee sets a performance target in Februaryoutset of each year, the Committee grants performance-based awards subject to the achievement of an annual performance goal of the company — typically a financial performance goal related to pre-tax operating income — that the Leadership Team must attain before the annual incentive program will fund. Consistent with prior years,income. In February 2011, the Committee usedgranted qualified performance-based awards to our named executive officers other than our general counsel (who was covered by a separate incentive plan for corporate support leaders). Each award was for an amount equal to 7% of our 2011 adjusted pre-tax operating income, subject to an aggregate limitation of 25% for the group as a whole. The Committee retains sole discretion to reduce the aggregate accrual rate as well as the performance goal, and granted a performance-based award in February 2008amount allocated to each of member ofnamed executive officer, and historically the Leadership Team in anCommittee has exercised this negative discretion.equal to 5%payable under each award principally depends on the amount of our 2008 adjusted pre-tax operating income. However, these performance awards are subject to18an aggregate limitation for our Leadership Team as a group, expressed as a designated percentage of our adjusted pre-tax operating income.income generated by the company. Adjusted pre-tax operating income equals our total revenues less our total expenses before income taxes, adjusted to eliminate certain compensation and benefits expenses and certain other expenses, losses, income or gains that are unusual in nature or infrequent in occurrence. Adjustments have historicallyThe adjustments to eliminate certain expenses and losses that are unusual or infrequent in nature are established at the beginning of each year prior to granting the qualified performance-based awards, and the exclusion of these items from pre-tax operating income more accurately reflects our operating performance for a given year. For 2011, adjustments included the elimination ofof: income attributable to noncontrolling interests; amounts expensed during the year under our Leadership Team annual incentive program (including equity amortization expense) for executive officers; amortization expense incurredfor equity awards granted in connection with acquisitions; losses related to the impairment of goodwill resulting from the prior acquisition of our predecessor company by U.S. Bancorp, and half of the losses from the impairment of goodwill other than the goodwill created from the prior acquisition of U.S. Bancorp goodwill.Leadership Team members, and expensespredecessor firm by U.S. Bancorp, which we retained after our spin-off from U.S. Bancorp on December 31, 2003, but only half of the remaining $14.8 million pre-tax goodwill impairment charge. Only 50% of the latter was permitted to be excludedcash award program (described below under “— Cash Award Program”).January 2009,applying the Committee determined that the company failed to achieve anyformula described above, our adjusted pre-tax operating income for 2008.Consequently, no member2011 was $27.1 million, resulting in a maximum amount payable to each award recipient of $1.89 million, subject to a maximum aggregate payout of $6.76 million for the group as a whole (other than the general counsel as described above). Consistent with prior years, the Committee paid less than the maximum amount payable for 2011, paying an aggregate of $2.87 million, or 10.6% of our adjusted pre-tax operating income for 2011. The table below sets forth a calculation of our adjusted pre-tax operating income for 2011 (in thousands): ($ 100,557 ) ($ 1,463 ) $ 10,876 $ 3,712 $ 1,579 $ 105,522 $ 7,388 $ 27,057 Leadership Team,company and each business unit;company’speer group as compared to the company;officer, chief financial officer,officer’s incentive was impacted by results for equity investment banking and institutional brokerage, the businesses that he managed during the year. Our head of Investment Banking and headasset management was impacted by the operating performance of Equities, received any typethis business. The following is a brief description of how the various factors impacted annual incentive award for 2008 performance.The amountcompensation at an individual level:• • • • • base salary earningsthe chief executive officer and totaldetermined his annual incentive compensation, as measured internallyassessed relative levels of responsibility and contribution during the year for each of the other named executive officers, and approved 2011 annual incentive compensation.company, is includedSummary Compensation Table appearing later in the following table. proxy statement because it shows stock awards earned in 2011 that were granted in 2012. For the year 2011, the Summary Compensation Table (in accordance with SEC rules) shows stock awards earned in 2010 and granted in 2011, not stock awards earned in 2011 and granted in 2012. Accordingly, the year-over-year changes in compensation reflect changes in amounts earned between 2011 and 2010.This table is not a substitute for the information required by theSEC rules, of the Securities and Exchange Commission, specifically the Summary Compensation Table and the related tables that appearappearing later in this proxy statement. Base Annual Incentive Compensation(1) Salary Total Earnings Cash Incentive Restricted Stock Stock Options Incentive Andrew S. Duff 2008 $ 400,000 -0- -0- -0- -0- 2007 $ 396,667 $ 1,123,777 $ 786,644 $ 505,700 $ 2,416,121 2006 $ 380,000 $ 1,633,732 $ 1,560,828 $ 275,440 $ 3,470,000 Debbra L. Schoneman 2008 $ 205,417 -0- -0- -0- -0- Thomas P. Schnettler 2008 $ 271,875 -0- -0- -0- -0- 2007 $ 221,667 $ 1,182,250 $ 677,106 $ 435,282 $ 2,294,638 2006 $ 205,000 $ 1,687,105 $ 1,173,305 $ 207,054 $ 3,067,464 Jon W. Salveson 2008 $ 225,000 -0- -0- -0- -0- 2007 $ 221,667 $ 1,034,598 $ 592,542 $ 380,920 $ 2,008,060 2006 $ 180,000 $ 2,045,762 (2) $ 1,111,754 $ 196,192 $ 3,353,708 Robert W. Peterson 2008 $ 225,000 -0- -0- -0- -0- 2007 $ 221,667 $ 725,483 $ 415,504 $ 267,110 $ 1,408,097 2006 $ 205,000 $ 1,039,144 $ 722,678 $ 127,531 $ 1,889,353 Base
Salary Annual Incentive Compensation Yearly
Incentive
Change Total with
Base
Salary Year
Total
Change Cash
Incentive Restricted
Stock Total
Incentive 2011 $ 650,000 $ 351,000 $ 351,000 $ 702,000 –64.75% $ 1,352,000 –48.00% 2010 $ 608,333 $ 995,834 $ 995,833 $ 1,991,667 $ 2,600,000 2009 $ 400,000 $ 1,200,000 $ 1,200,000 $ 2,400,000 $ 2,800,000 2011 $ 500,000 $ 45,000 $ 30,000 $ 75,000 –79.07% $ 575,000 –23.33% 2010 $ 391,667 $ 215,000 $ 143,333 $ 358,333 $ 750,000 2009 $ 225,000 $ 315,000 $ 210,000 $ 525,000 $ 750,000 2011 $ 425,000 $ 82,200 $ 54,800 $ 137,000 –35.78% $ 562,000 –7.11% 2010 $ 391,667 $ 128,000 $ 85,333 $ 213,333 $ 605,000 2011 $ 550,000 $ 1,893,990 -0- $ 1,893,990 –46.28% $ 2,443,990 –37.00% 2010 $ 354,167 $ 3,525,398 -0- $ 3,525,398 $ 3,879,565 2011 $ 550,000 $ 110,000 $ 90,000 $ 200,000 –88.18% $ 750,000 –65.91% 2010 $ 508,333 $ 930,417 $ 761,250 $ 1,691,667 $ 2,200,000 2009 $ 300,000 $ 1,155,000 $ 945,000 $ 2,100,000 $ 2,400,000 (1)Equal to or less than $30 millionRestricted stock and stock option amounts reflect the value of equity compensation grantedNothing additional to the named executive officers for 2007 performance (paid in 2008) and 2006 performance (paid in 2007) under our Incentive Plan. Amounts shown in the Summary Compensation Table appearing later in this proxy statement reflect the respective dollar amounts of stock-based compensation expense associated with equity awards for a given year in accordance with SFAS 123(R).quarterly payments(2)Greater than $30 million but less than or equal to $47 million$742,5207.5% of Mr. Salveson’s cash incentive amount for 2006 was paid outsideasset management EBITDA in excess of the annual incentive program for named executive officers because he did not become an executive officer until August 11, 2006, and was not covered by the annual incentive program for executive$30 millionGreater than $47 million Additional 7.5% of asset management prior to that date.EBITDA described above, plus 9.0% of asset management EBITDA in excess of $47 million2008 Long-Term, Performance-Based (ROE) Equity Grantcompany’s Leadership Team.company meets a return on adjusted common equity target of 11% over a twelve-month period. This incremental grant iswas designed to improve our executive share ownership to a more meaningful level, further link executive performance with shareholder value, and act as a significant retention tool for our Leadership Team. This performance-based granttool. Presently, we do not anticipate that we will not vest unlessmeet the company meets a return on adjusted common equity target of 11% over a twelve-month period, at which time it willrequired for these awards to vest in its entirety. This performance target represents a significant increase to the company’s historic twelve-month return on adjusted common equity levels, and the target must be met by April 30, 2013 orexpect that the awards will be forfeited. The adjustment to the returnforfeited on common equity metric eliminates the remaining goodwill associated with the 1998 acquisition of our predecessor19company by U.S. Bancorp, which we acquired at the time of our spin-off from U.S. Bancorp. We excluded this goodwill from the definition of return on common equity because we believe it does not accurately reflect the equity deployed in our businesses. The award terms also require the recipient to be employed for vesting, which acts as a retention tool for our Leadership Team, and the Committee has the discretion to forfeit the award if a recipient leaves the Leadership Team but remains an employee of the company.This performance-based grant was awarded to each member of the Leadership Team as of May 15, 2008, which included each of our named executive officers other than Ms. Schoneman, our chief financial officer. Ms. Schoneman was granted a performance-based award following her appointment as chief financial officer, and her award has the same vesting provisions as the other members of the Leadership Team, i.e., the award requires a return on adjusted common equity of 11% sustained over a twelve-month period to be attained by April 30, 2013. The total number of shares granted connection with these awards was 362,037, and the value of these awards and the number of shares granted to each named executive officer is reported below in the Grants of Plan-Based Awards table that follows the Summary Compensation Table.Other CompensationMembers of Also, we do not pay our Leadership Teamexecutive officers additional amounts to cover tax liability, or gross-ups, arising from compensation they receive from us. Executive officers receive limited additional compensation in the form of a monthly stipend to cover parking expenses (which was discontinued effective December 31, 2008), reimbursement of dues for club memberships used for business purposes and certain insurance premiums. Our executive officers who participateIn connection with our acquisition of Advisory Research, we agreed to provide Mr. O’Brien certain perquisites that he previously received from Advisory Research for one year following the closing of the acquisition, which include parking expense reimbursement, reimbursement for automobile lease payments, reimbursement of certain insurance premiums and reimbursement of club membership dues. The cost of these perquisites is included in our Retirement Plan, a 401(k) plan, receive company matching contributionsthe “All Other Compensation” column of the Summary Compensation Table. We ceased providing these perquisites to Mr. O’Brien on 100% of their annual contributions up to a maximum of 6% of their total pay, up toMarch 1, 2011 as agreed upon in connection with the social security taxable wage base; their contributions are matched on the same basis we match contributions by non-executive employees. acquisition. named executive officers also receive payments from time to time related to historical compensation programs, typically structured as investments made by the company on behalf of certain employees. For example, our2011, Mr. Schnettler was the only named executive officers receive payments under the U.S. Bancorp Piper Jaffray Inc. Second Century Growth Deferred Compensation Plan (As Amended and Restated Effective September 30, 1998) (the “Second Century 1998 Plan”) and the U.S. Bancorp Piper Jaffray Inc. Second Century 2000 Deferred Compensation Plan (the “Second Century 2000 Plan”). Certain key employees were eligible to participateofficer who participated in these plans, under which participants were granted one or more deferred awards that were deemed investedand he received $16,720 in certain measuring investments. Followingpayments. These payments typically follow a liquidity event for a particularan investment within the plan, with the participant receivesreceiving a benefit payment based on the deemed return to the participant and payment of the portion of the participant’s account that was deemed invested. Participants may continue to receive payments under the plans until a liquidity or bankruptcy event has occurred with respect to each measuring investment. Messrs. Peterson, Salveson and Schnettler were granted deferred awards under these plans in 1996, 1997, 1998and/or 2000, and received payouts in 2008, 2007 and 2006 as set forth in the Summary Compensation Table.his investment account. No new awards have been granted under these plans since 2000, and participation in the plans is frozen.2003 Cash Award Program Following Our Spin-Off From U.S. BancorpTermination and Change-in-Control ArrangementsIn connection with our spin-off from U.S. Bancorp on December 31, 2003, we establishedcash award program pursuant to which we granted cash awards tocertain multiple of an executive’s compensation (e.g., base salary) upon a large number of our employees, including our executive officers, who were employed by us on December 15, 2003. This cash award program was a unique, one-time event that resulted from our spin-off from U.S. Bancorp, and all awards under this program have now been paid. Under the program, an employee could receive an award that replaced the lost value of U.S. Bancorp equity or a discretionary award to aid in retention.With respect to our Leadership Team, Messrs. Duff, Schnettler, Salveson and Peterson and Ms. Schoneman were granted cash awards replacing the lost value of U.S. Bancorp equity, which totaled $4,567,096; $244,184; $82,500; $559,622; and $20,564, respectively. Fifty percent of each of these cash awards was paid on March 31, 2004, with the remaining 50% payable in four equal installments20on each of March 31, 2005, 2006, 2007 and 2008. In addition, Mr. Duff and Ms. Schoneman were granted discretionary cash awards in the amount of $500,000 and $40,000, respectively, which were payable in four equal installments on each of March 31, 2004, 2005, 2006 and 2007. The Summary Compensation Table below also includes the amountchange-in-control of the cash awards paid to each named executive officer in the year indicated.Termination and Change in Control Arrangements Non-Qualified Retirement PlanFollowing our spin-off from U.S. Bancorp on December 31, 2003, we assumed liability for the non-qualified benefits accrued for our employees under the defined benefit excess plan component of the U.S. Bancorp Cash Balance Pension Plan.company. In 2004, we established the Piper Jaffray Companies Non-Qualified Retirement Plan to maintain and administer these benefits, which were transferred to us following the spin-off. Thereafter, participation in the plan was frozen. No new benefits may be earned by participants in this plan, but participating employees will continue to receive investment credits on their transferred plan balances until the plan balance is paid out upon the employee’s retirement or termination of employment. As of December 31, 2008, the Non-Qualified Retirement Plan account balances for our named executive officers were as follows: Mr. Duff, $383,857; Ms. Schoneman, $12,651; Mr. Schnettler, $601,559; Mr. Salveson, $377,649; and Mr. Peterson, $332,065. Severance PlansAll of our named executive officers are eligible to participate in the Piper Jaffray Severance Plan, a broad-based plan in which all of our full-time,U.S.-based employees generally are eligible to participate. In the event of certain involuntary terminations of employment resulting from an employer-determined severance event, employees may receive severance pay up to a maximum of their weekly base salary multiplied by 52, subject to a maximum dollar amount equal to the limit in effect under Internal Revenue Code section 401(a)(17) for the year in which the employee’s employment involuntarily terminates. (For 2009, this limit is $245,000.) Employer-determined severance events may include, depending on the circumstances, closure of a company facility, a permanent reduction in our workforce or certain organizational changes that result in the elimination of the employee’s position. Other Termination andChange-in-Control ProvisionsCertaininstances, award agreements and plans under which compensation has been awarded to our named executive officersmay include provisions regarding the payment of the covered compensation in the event of a termination of employment or a change in controlchange-in-control of our company, as follows: • Under our Incentive Plan, following a termination of employment (other than as a result of a change in control), our option awards granted in 2007 and 2008 andas part of our restricted stock awardsannual incentive program will continue to vest so long as the termination was not for cause and the employee does not violate certain post-termination restrictions for the remaining vesting term of their awards. For stock option awards granted prior to 2007, unvested stock options are immediately canceled upon termination of employment for any reason other than death, disability or qualifying retirement, in which case the options will either vest immediately (in the case of death or disability) or continue to vest according to their original vesting schedule (in the case of retirement) and may be exercised for a designated period or the full term of the option, as set forth in the award agreement. For pre-2007 stock option grants, vested stock options may be exercised only while the optionee remains employed by us, except that vested options may be exercised for 90 days after termination of employment for a reason other than death, disability, qualifying retirement or termination for cause. A qualifying retirement means any termination of employment when an optionee is age 55 or older and has at least five years of service with Piper Jaffray. None of the named executive officers currently meets the qualifications for retirement under the terms of the option award agreement.21• Executive officers who are terminated during the year (other than as a result of a change in control) will receive cash and equity compensation for that year under our annual incentive program in the discretion of the Committee. If a payout is made to the terminated executive, the amount will be based on adjusted pre-tax operating income for the portion of the year preceding the executive’s termination.• Under our Incentive Plan, following a termination of employment as a result of a change in control, all outstanding stock options will become fully vested and exercisable, all outstanding restricted stock (other than the long-term, performance-based restricted stock awards that were granted to the Leadership Team in 2008)Following a change-in-control, all outstanding restricted stock (other than the long-term, performance-based (ROE) restricted stock awards) will vest and all restrictions on the restricted stock will lapse. Our annual performance awards, including the annual qualified performance-based awards under the annual incentive program for our Leadership Team members, will be considered to be earned and payable in full, and such annual performance awards will be settled in cash or shares, as determined by the Committee, as promptly as practicable. Because annual incentive award payouts are based on adjusted pre-tax operating income, which varies from year to year, and because the Committee historically has needed to reduce the size of some awards to comply with the limits on the aggregate amount of incentive compensation that may be paid out to the Leadership Team as a group under the annual incentive program, the specific amounts that would be payable to our Leadership Team upon a change in control historically have been indeterminable.• Under the applicable award agreements for the long-term, performance-based restricted stock awards that were granted to the Leadership Team in 2008, no amount of the award would vest upon a change in control as of December 31, 2008, but 20% of the award will vest if a change in control occurs between April 30, 2009 and April 30, 2010 and an additional 20% will vest in each subsequent year if a change in control occurs during that year.• Under the Non-Qualified Retirement Plan, employees are entitled to a payout of their vested account balance upon any employment termination other than a termination for cause.• Participants in the Second Century 2000 Plan remain entitled to receive full benefits under the plan if the participant’s employment terminates following a change in control or if the participant’s employment terminates for any other reason, so long as the individual is not terminated for cause and does not violate certain post-termination restrictions; otherwise the amount of the benefits may be limited to the lesser of (i) the amount of the participant’s deferred award plus simple interest at 6.5% per annum from the effective date of the plan (February 28, 2000) through the participant’s termination date, and (ii) the value of the participant’s account under the plan.• Participants in the Second Century 1998 Plan remain entitled to receive full benefits under the plan if the participant’s employment terminates following a change in control or if the participant’s employment terminates for any other reason, so long as the individual does not violate certain post-termination restrictions and does not commit any act of “gross misconduct,” as defined in the plan; otherwise the benefits are forfeited.• Our employees who are at least 55 years old and have at least five years of service with us at the time of their employment termination are eligible to participate in our retiree medical insurance program following their termination of employment. Under this program, the employee pays premiums to cover the cost of retiree medical insurance that is negotiated by us at a group rate and therefore may be more economical than what is available for employees purchasing insurance on their own. Employees who meet certain eligibility requirements accrue credits during their employment with us that may be applied to offset two-thirds of the cost of the employee’s retiree medical insurance premiums, until the credit balance is depleted. Such credits begin to accrue to employees when the employee first meets one of the following age and years of service thresholds: age of 45 plus at least 15 years of service with us, or age of 50 plus at least 10 years of service with us. The credits are valued at $1,200 per year and accrue annual interest22
Our annual performance awards, including the annual qualified performance-based awards under the annual incentive program, will be considered to be earned and payable in full upon a change-in-control, and the awards will be settled in cash or shares, as determined by the Committee, as promptly as practicable. Because annual incentive award payouts are based on adjusted pre-tax operating income, which varies from year to year, and because the Committee historically has needed to reduce the size of some awards to comply with the limits on the aggregate amount of incentive compensation that may be paid under the annual incentive program, the specific amounts that would be payable in the event of a change-in-control are indeterminable.of 5.5%. As of December 31, 2008, our named executive officers had accrued credit balances as follows: Mr. Duff, $9,920; and Mr. Schnettler, $11,666; Messrs. Salveson and Peterson and Ms. Schoneman do not meet the eligibility requirements to receive credits. None of the named executive officers currently meets the eligibility requirements to participate in our retiree medical insurance program.ownershipretention guidelines to ensure that each member of the Leadership Team maintainsour executives maintain a meaningful equity stake in the company, which aligns management’s interests with those of our shareholders. The guidelines whichalso help to drive long-term performance and strengthen retention. Our stock retention guidelines provide forthat our Leadership Team members to hold Piper Jaffray Companies stock as follows:• For the chief executive officer, a value equal to seven times base salary;• For the president and chief operating officer, a value equal to six times base salary;• For the head of each business line (including the chief executive officer of Piper Jaffray Ltd. (our European operation) and the chief executive officer of Piper Jaffray Asia), a value equal to five times base salary; and• For the chief financial officer, chief administrative officer and general counsel, a value equal to two times base salary.These goals must be attained within five years of joining the Leadership Team. As of January 2, 2009, all of the named executive officers meet the guidelines based on 2009 salary levels. We also have adopted a share retention policy requiring members of our Leadership Team to holdexecutives should retain at least 50% of the shares awarded to them through our incentive plans,plan, or acquired upon exercise of stock options, awarded to them, net of taxes and transaction costs, for a minimum of five years. Shares held by Leadership Team members that were acquired prior toexercise costs. The guideline applies upon becoming an executive officer and remains in effect while the member joining the Leadership Team are not subject to these retention guidelines.We haveindividual serves as an employee trading policy providing that employees may not sell our stock short and may not enter into any derivatives transaction in our stock if the effect of the transaction would be substantially equivalent to a short position in our stock or any standardized options strategy other than a covered call or protective put, and employees may not utilize any hedging strategy with respect to non-transferable Piper Jaffray securities, including restricted stock. Subject to these rules, our employees are permitted to hedge investments in our stock so long as they do not initiate any part of the hedge or unwind any part of such a hedge during designated trading blackout periods.15th15th calendar day of the month following the public release of earnings for the preceding quarter (or, if the 15th15th calendar day falls on a weekend or holiday, on the first business day thereafter). This policy covers grants made by the Committee as well as grants made by our chief executive officer to employees other than executive officers pursuant to authority delegated to him by the Committee. We established this equity grant timing policy to provide a regular, fixed schedule for equity grants that eliminates the exercise of discretion with respect to the grant date of employee equity awards. The grant dates under this policy are outside of the designated trading blackout periods that apply to our employees generally and fall within the regularly scheduled trading window periods during which our executive officers generally are permitted to trade in our securities.23planIncentive Plan is designed and administered to qualify compensation awarded under our annual incentive program as “performance-based” to ensure that the tax deduction is available to the company. From time to time the Committee may authorize payments to the named executive officers that may not be fully deductible, if they believe such payments are in the interests of shareholders.RestatementNon-GAAP InformationIn Februarythis year,non-GAAP financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and that exclude the company announced that certain previously-issued financial statements, including the annual financial statements for the years ended December 31, 2007 and 2006, and the related reportseffects of our independent registered public accounting firm, Ernst & Young LLP, should no longer be relied upon. The company reached this conclusion after management re-evaluated the practice of expensing our stock-based compensation typically over a period of three years. Management believed that expensing these awards was permitted based on the terms of the equity award agreement and Statement of Financial Accounting Standards No 123(R), “Share-Based Payment”. Following an extensive analysis of the complex criteria with SFAS 123(R), management concluded, in consultation with our auditors, that the company’s results should be restated to recognize expense for all of the outstanding affected equity awardsgoodwill impairment charge recognized in the yearfourth quarter of 2011. These non-GAAP financial measures should not be considered a substitute for measures of financial performance prepared in which those awards were deemedaccordance with GAAP. These non-GAAP financial measures have been used in this proxy statement because management believes they are useful to be earned, rather than over the three-year vesting period. The Committee has evaluated the impact of this event on the prior compensation of our Leadership Team, including the named executive officers,shareholders by providing greater transparency to our operating performance and determined that no adjustment is necessary or appropriate.ChairpersonMichael R. FrancisJean M. Taylor24None of named executive officers included in the following table received an annual incentive award for 2008 performance. The 2008 amounts included in the following table (other than an individual’s salary) consist primarily of equity amortization expense under SFAS 123(R) for a long-term, performance-based restricted stock award that is subject to forfeiture if the company does not achieve a return on adjusted common equity target within five years, and cash awards dating back to our spin-off from U.S. Bancorp on December 31, 2003, that were paid out on a five-year schedule. Stock Option All Other Salary Bonus(2)(3) Awards(4) Awards(4) Compensation(5) Total Year ($) ($) ($) ($) ($) ($) Andrew S. Duff 2008 400,000 — 491,990 54,847 585,470 1,532,307 Chairman and CEO 2007 396,667 1,248,777 1,192,612 639,170 585,200 4,062,426 2006 380,000 1,758,732 2,910,694 562,283 579,206 6,190,915 Debbra L. Schoneman 2008 205,417 — 117,586 244 12,408 335,655 Thomas P. Schnettler 2008 271,875 — 429,532 64,103 77,896 843,406 President and Chief Operating Officer 2007 225,000 1,182,249 1,109,970 563,493 69,065 3,149,777 2006 205,000 1,687,105 2,655,542 339,907 49,077 4,936,631 Jon W. Salveson 2008 225,000 — 334,616 8,937 37,591 606,144 Head of Investment Banking 2007 225,000 1,034,598 835,132 447,029 57,000 2,598,759 2006 180,000 2,045,762 2,420,060 299,054 18,608 4,963,484 Robert W. Peterson 2008 225,000 — 264,631 36,755 100,058 626,444 Head of Equities 2007 225,000 725,483 631,790 336,245 80,023 1,998,541 2006 205,000 1,039,144 1,567,888 204,504 80,622 3,097,158 (1)Name & Principal PositionMs. Schoneman became our chief financial officer in May 2008 and was not one of our named executive officers for 2007 or 2006. As permitted by regulations of the Securities and Exchange Commission, the table above includes Ms. Schoneman’s compensation only for the year in which she was one of our named executive officers.Year Salary
($)Bonus(1)
($)Stock
Awards(2)
($)All Other
Compensation(3)
($)Total
($)2011 650,000 351,000 995,833 11,691 2,008,524 2011 500,000 45,000 143,333 6,963 695,296 (2)4)2011 425,000 82,200 85,333 11,253 603,786 2011 550,000 1,893,990 — 11,526 2,455,516 2011 550,000 110,000 761,250 24,277 1,445,527 (1) program, which is designed to permit the company to deduct the compensation paid.program. The program allows the Committee substantial discretion to determine compensation if the company achieves adjusted pre-tax operating income, and the Committee consistently has used this discretion in establishing compensation following the completion of a fiscal year. Accordingly, we report amounts paid under this program in the “Bonus” column and not the “Non-Equity Incentive Plan Compensation” column. For 2008, the Company failed to achieve any adjusted pre-tax operating income and no amounts were paid.( (3)2) The amounts in this column for Mr. Duff in 2007 and 2006 also include $125,000 paid to him in each of those years pursuant to a discretionary cash award granted to him in December 2003 in connection with our spin-off from U.S. Bancorp. In addition to these discretionary awards, Mr. Duff received a cash award in December 2003 to replace the lost value of U.S. Bancorp equity, and these amounts are included in the “All Other Compensation” column and footnote 5 below. These cash awards are described in more detail above in “Compensation Discussion and Analysis — Compensation Program and Payments — 2003 Cash Award Program Following Our Spin-Off From U.S. Bancorp.” The amount in this column for Mr. Salveson in 2006 also includes $742,520 that was paid to him outside of the annual incentive program described above because he did not become an executive officer until August 11, 2006.(4)stock awards and option awards columns“Stock Awards” column reflect the respective dollar amountsaggregate grant date value of stock-based compensation recognized for 2008, 2007 and 2006 financial statement reporting purposesthe awards granted during the year computed in accordance with SFAS 123(R). The amounts for 2008 relate to the long-term, performance based restrictedFASB ASC 718. SEC rules do not permit inclusion in a given year of stock awards that were grantedattributable to a particular year’s performance, as is the Leadership Team in 2008 as described above in “Compensation Discussioncase for salary and Analysis — Compensation Program and Payments — 2008 Long-Term,bonus amounts.25(3) Performance-Based Equity Grant.” These amounts have been reported on a restated basis following a determination that resulted in the recognition of expense associated with these equity awards in the year in which the awards were earned rather than over the three-year vesting period. Refer to Notes 1 and 21 in the Notes to Consolidated Financial Statements included in our Annual Report onForm 10-K filed on February 28, 2009 for a discussion of this restatement and the relevant assumptions used to determine the valuation of our stock and option awards for accounting purposes.(5) Form of All Other Andrew S. Debbra L. Thomas P. Jon W. Robert W. Year Duff Schoneman Schnettler Salveson Peterson Parking stipend 2008 2,880 2,880 2,880 2,880 2,880 2007 2,880 n/a 2,880 2,160 2,880 2006 2,880 n/a 2,880 2,160 2,880 Club membership dues 2008 4,494 — — — — 2007 4,494 n/a — — — 2006 4,494 n/a — — — 401(k) matching contributions 2008 6,120 6,120 6,120 6,120 6,120 2007 5,850 n/a 5,850 5,850 5,850 2006 — n/a 3,768 3,768 3,768 Life and long-term 2008 1,089 837 1,089 855 855 disability insurance premiums 2007 1,089 n/a 1,089 855 855 2006 945 n/a 1,089 855 837 2003 cash awards (replacing the 2008 570,887 2,571 30,523 10,313 69,953 lost value of U.S. Bancorp equity) 2007 570,887 n/a 30,523 10,313 69,953 2006 570,887 n/a 30,523 10,313 69,953 Other 2008 — — 37,284 17,423 20,250 2007 — n/a 28,723 37,822 485 2006 — n/a 10,817 1,512 3,184 The “Parking stipend” has been discontinued,Year Andrew S.
DuffDebbra L.
SchonemanJames L.
ChosyBrien M.
O’BrienThomas P.
Schnettler2011 4,494 — 4,200 — — 2011 6,408 6,408 6,408 6,408 6,408 2011 789 555 645 789 1,149 2011 — — — 429 — 2011 — — — 3,900 16,720 include:(4) • For Schnettler, SalvesonChosy and Peterson, amounts paid outO’Brien were not named executive officers for 2009. Accordingly, the table above includes the respective compensation of each of Messrs. Chosy and O’Brien only for the years in 2008, 2007 and 2006 under the Second Century 1998 Plan and the Second Century 2000 Plan.• For Mr. Salveson for 2008, the amount also includes a $5,175 cash payment representing his proportionate sharewhich they were one of a venture capital fund carried interest held by the company as part of a compensation program implemented prior to our spin-off from U.S. Bancorp.named executive officers.262008. Estimated Possible All Other Payouts All Other Option Under Stock Awards: Grant Date Incentive Awards: Number of Exercise Fair Value Compensation Plan Number of Securities Price of of Stock Committee Awards Shares of Underlying Option and Option Approval Maximum Stock(3)(4) Options(3)(5) Awards(6) Awards(4)(5) Grant Date Date(1) ($)(2) (#) (#) ($) ($) Andrew S. Duff 5/15/2008 5/2/2008 — 78,314 — — 3,250,000 2/15/2008 1/22/2008 3,706,500 19,145 32,149 41.09 1,292,344 Debbra L. Schoneman 8/15/2008 7/30/2008 — 24,390 — — 863,406 2/15/2008 1/22/2008 3,706,500 1,922 — — 78,975 Thomas P. Schnettler 5/15/2008 5/2/2008 — 66,266 — — 2,750,000 2/15/2008 1/22/2008 3,706,500 16,479 27,673 41.09 1,112,388 Jon W. Salveson 5/15/2008 5/2/2008 — 54,217 — — 2,250,000 2/15/2008 1/22/2008 3,706,500 14,421 24,217 41.09 973,462 Robert W. Peterson 5/15/2008 5/2/2008 — 42,169 — — 1,750,000 2/15/2008 1/22/2008 3,706,500 10,113 16,981 41.09 682,614 Grant Date Compensation
Committee
Approval
Date(1) Estimated
Possible
Payouts
Under
Incentive
Plan Awards All Other
Stock
Awards:
Number of
Shares of
Stock
(#)(3)(4) Grant Date
Fair Value of
Stock Awards
($) Maximum
($)(2) 2/15/2011 2/2/2011 1,893,990 23,520 995,833 2/15/2011 2/2/2011 1,893,990 3,386 143,333 — — — 2,016 85,333 2/15/2011 2/2/2011 1,893,990 — — 2/15/2011 2/2/2011 1,893,990 17,980 761,250 (1) (1)and option awards identified in the all other stock awards and all other option award columns“All Other Stock Awards” column of this table at a meeting on January 22, 2008.February 2, 2011. In accordance with the terms of this approval and our equity grant timing policy, the awards were granted on February 15, 2008. In addition, the Compensation Committee approved a long-term, performance-based restricted stock award to the named executive officers other than Ms. Schoneman on May 2, 2008, and this award was granted on May 15, 2008 in accordance with the terms of our equity grant timing policy. Ms. Schoneman’s long-term, performance-based award was approved in connection with her promotion as chief financial officer on July 30, 2008, and the award was granted on August 15, 2008 in accordance with the terms of our equity grant timing policy. These long-term, performance based restricted stock awards are identified in the all other stock awards column of the above table, and the vesting provisions of these awards require that the company meet a return on adjusted common equity target of 11% over a twelve-month period, to be achieved by April 30, 2013.2011.(2) (2)The amounts in this column reflect an estimate of the maximum combined value of the cash and equity that would have been payable to the named executive officers under qualified performance-based awards granted to the named executive officers for 20082011 performance under the annual incentive program, forcalculated using our Leadership Team, had we achieved the same adjusted pre-tax operating income for 2008 as was achieved for 2007.actual 2011 performance. Because the potential amounts payable under the qualified performance-based awards are stated in the annual incentive program as a percentage of adjusted pre-tax operating income that can only be decreased, and not increased, from that maximum level, and because actual amounts paid below this maximum level are within the full discretion of the Committee, there are no identifiable threshold or target amounts under the awards, and the maximum amounts actually payable to the named executive officers pursuant to the awards for 20082011 performance were indeterminable at the time the awards were granted. Accordingly, we estimated these amounts using our adjusted pre-tax operating income for 2007. In addition, because the Committee has full discretion to determine the total dollar value of the respective amounts to be paid out under the awards(3) the form of cash and equity, the amount of each form of payment under the awards is indeterminable until after the awards are paid. No amounts were actually paid under our 2008 annual incentive program as discussed above in “Compensation Discussion and Analysis — Compensation Program and Payments — Annual Incentive Compensation.”(3)The amounts in these columns reflectthis column reflects equity compensation paid out to the named executive officers in 20082011 pursuant to annual qualified performance-based awards granted to these officers in 20072010 under our annual incentive program for the Leadership Team.program. The shares of restricted stock and stock options27were granted to these officers on February 15, 20082011 following the Compensation Committee’s certification of the attainment of 20072010 annual financial performance goals established by the Committee under the annual incentive program. All of the restricted stock and stock options werewas granted under ourthe Incentive Plan and will vest in fullthree equal installments on February 15, 2011,2012-2014, assuming the award recipient complies with the terms and conditions of the applicable award agreement, as discussed in the Compensation Discussion and Analysis under “Compensation Program and Payouts — Termination and Change in Control Arrangements — Other Termination andChange-in-Control Arrangements.”Change-in-Control(4) Provisions.” amounts in the all other stock awards column also reflect the long-term, performance-based restricted stock awards that were granted to the Leadership Team in 2008. All of the named executive officers other than Ms. Schoneman were granted this award on May 15, 2008, and Ms. Schoneman was granted the award on August 15, 2008 following her appointment as chief financial officer. For more information regarding these grants, refer to “Compensation Discussion and Analysis — “Compensation Program and Payments — 2008 Long-Term, Performance-Based Equity Grant.”(4)The restricted stock awards (other than the long-term, performance-based restricted stock award that was granted to the Leadership Team in 2008)2011 are subject to forfeiture prior to vesting following certain terminations of employment or in the event the award recipient is terminated for cause, misappropriates confidential company information, participates in or is employed by a talent competitor of Piper Jaffray, or solicits employees, customers or clients of Piper Jaffray, all as set forth in more detail in the applicable award agreement. Recipients have the right to vote all shares of Piper Jaffray restricted stock they hold and to receive dividends (if any) on the restricted stock at the same rate paid to our other shareholders. (We currently do not pay dividends on our common stock.) The number of shares of restricted stock awarded to each named executive officer under our 20072011 annual incentive program was determined by dividing specified dollar amounts representing a percentage of the individual’s total annual incentive compensation for that year by $41.09,$42.34, the closing price of our common stock on the February 15, 20082011 grant date. With respect to Messrs. Duff, Schnettler, Salveson and Peterson, the number of shares of restricted stock awarded in connection with our long-term performance-based grant in May 2008 was determined by the Compensation Committee by reference to a number of shares for each individual that could not exceed a pre-determined maximum value for each based on the closing price of our common stock on the grant date. On the date of grant, this maximum value reduced the number of shares for each individual. With respect to Ms. Schoneman, the number of shares of restricted stock awarded to her in August 2008 was an amount that correlated with the awards in May for other Leadership Team members in corporate support functions, except that the number of shares to be awarded was not reduced on the grant date because the maximum value had not been reached.(5)The stock option awards granted under our 2007 annual incentive program expire on the tenth anniversary of the grant date if not earlier exercised; they will continue to vest following a termination of employment so long as the termination was not for cause and the employee does not violate certain post-termination restrictions for the remaining vesting term of the awards. The number of shares of stock options awarded to each officer in 2008 for 2007 performance was determined by dividing specified dollar amounts representing a percentage of the individual’s total annual incentive compensation for that year by the Black-Scholes value of one option share on the grant date.(6)The exercise price equals the $41.09 closing sale price of one share of our common stock on the grant date of the options (February 15, 2008).282008. Stock Awards Option Awards Number of Number of Securities Number of Securities Shares of Market Value of Underlying Underlying Stock that Shares of Stock Unexercised Options Unexercised Options Option Option Have Not That Have Not (#) (#) Exercise Price Expiration Vested(2) Vested(3) Exercisable Unexercisable ($) Date(1) (#) ($) Andrew S. Duff 24,940 — 47.30 2/12/2014 135,704 5,395,591 11,719 — 39.62 2/22/2015 — — 6,098 47.85 2/21/2016 — — 9,641 70.13 2/15/2017 — — 32,149 41.09 2/15/2018 — — Debbra L. Schoneman 485 — 47.30 2/12/2014 27,478 1,092,525 290 — 39.62 2/22/2015 Thomas P. Schnettler 1,938 — 47.30 2/12/2014 118,462 4,710,049 12,696 — 39.62 2/22/2015 — — 7,241 47.85 2/21/2016 — — 7,248 70.13 2/15/2017 — — 27,673 41.09 2/15/2018 — — Jon W. Salveson 5,729 — 47.30 2/12/2014 103,759 4,125,458 10,639 — 39.62 2/22/2015 — — 6,868 70.13 2/15/2017 — — 24,217 41.09 2/15/2018 — — Robert W. Peterson 1,938 47.30 2/12/2014 73,779 2,933,453 6,250 — 39.62 2/22/2015 — — 4,269 47.85 2/21/2016 — — 4,646 70.13 2/15/2017 — — 16,981 41.09 2/15/2018 — — Option Awards Stock Awards Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares of
Stock
That Have
Not
Vested(1)
(#) Market Value of
Shares of Stock
That Have Not
Vested(2)
($) 24,940 — 47.30 2/12/2014 128,813 2,602,023 11,719 — 39.62 2/22/2015 — — 6,098 — 47.85 2/21/2016 — — 9,641 — 70.13 2/15/2017 — — 32,149 — 41.09 2/15/2018 — — 485 — 47.30 2/12/2014 32,498 656,460 290 — 39.62 2/22/2015 — — 1,695 — 47.30 2/12/2014 29,935 604,687 1,042 — 39.62 2/22/2015 — — 678 — 47.85 2/21/2016 — — 1,208 — 70.13 2/15/2017 — — 4,502 — 41.09 2/15/2018 — — — — n/a n/a — — 1,938 — 47.30 2/12/2014 105,492 2,130,938 12,696 — 39.62 2/22/2015 — — 7,241 — 47.85 2/21/2016 — — 7,248 — 70.13 2/15/2017 — — 27,673 — 41.09 2/15/2018 — — (1) (1)Option awards expiring on February 21, 2016, will vest on February 21, 2009; option awards expiring on February 15, 2017, will vest on February 15, 2010; and option awards expiring on February 15, 2018, will vest on February 15, 2011; in each case so long as the award recipient complies with the terms and conditions of the applicable award agreement.(2) Number of Shares Scheduled to Vest That Are Held by Each Named Executive Officer Andrew S. Debbra L. Thomas P. Jon W. Robert W. Duff Schoneman Schnettler Salveson Peterson February 21, 2009 15,988 617 18,986 19,268 11,192 February 15, 2010 22,257 549 16,731 15,853 10,305 February 15, 2011 19,145 1,922 16,479 14,421 10,113
