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

SCHEDULE 14A

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

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March 2, 20186, 2019

To the Stockholders of
Waddell & Reed Financial, Inc.:

        Waddell & Reed Financial, Inc.'s 20182019 Annual Meeting of Stockholders will be held in the William T. Morgan Auditorium at the principal executive offices of the Company, 6300 Lamar Avenue, Overland Park, Kansas 66202 at 10:00 a.m., local time, on Thursday,Tuesday, April 26, 2018.23, 2019.

        At the annual meeting, we will ask you to (1) elect Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. Morrissey,Kathie J. Andrade, who have been nominated by the Board, as Class IIIII directors, (2) conduct an advisory vote to approve named executive officer compensation, (3) ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 20182019 fiscal year, and (4) transact such other business as may properly come before the annual meeting or any adjournments or postponements thereof. The accompanying formal notice and Proxy Statement further discuss the matters that will be presented for a stockholder vote.

        We have also enclosed our 20172018 Annual Report, which is not a part of the proxy soliciting materials. If you have any questions or comments about the matters discussed in the Proxy Statement or about our operations, we will be pleased to hear from you. It is important that your shares be voted at the annual meeting. If you are unable to attend the annual meeting in person and wish to have your shares voted, you may vote by telephone, Internet or by filling in, signing and dating the enclosed proxy card or voting instruction form and returning it in the accompanying envelope as promptly as possible.

        We hope that you will take this opportunity to meet with us to discuss our results and operations for the 20172018 fiscal year.

		Sincerely,
		Henry J. HerrmannThomas C. Godlasky Chairman of the Board

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WADDELL AND REED FINANCIAL, INC.
6300 Lamar Avenue
Overland Park, Kansas 66202
(913) 236-2000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 26, 201823, 2019

To the Stockholders of
Waddell & Reed Financial, Inc.:

        I am pleased to give you notice that the 20182019 Annual Meeting of Stockholders of Waddell & Reed Financial, Inc. (the "Company") will be held in the William T. Morgan Auditorium at the principal executive offices of the Company, 6300 Lamar Avenue, Overland Park, Kansas 66202 on Thursday,Tuesday, April 26, 2018,23, 2019, at 10:00 a.m., local time.

        At the annual meeting, you will be asked to:

1.

Elect Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. Morrissey,Kathie J. Andrade, who have been nominated by the Board, as Class IIIII directors to hold office until the 20212022 Annual Meeting of Stockholders.

2.

Conduct an advisory vote to approve named executive officer compensation.

3.

Ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for the 20182019 fiscal year.

4.

Transact such other business as may properly come before the annual meeting or any adjournments or postponements thereof.

        These matters are more fully discussed in the accompanying Proxy Statement.

        The Board of Directors has fixed Monday, February 26, 2018,25, 2019, at the close of business, as the record date for the determination of stockholders entitled to notice of, and to vote at, the annual meeting.

        All stockholders are cordially invited to attend the annual meeting in person. However, if you are unable to attend in person and wish to have your shares voted,YOU MAY VOTE BY TELEPHONE, INTERNET OR BY FILLING IN, SIGNING AND DATING THE ENCLOSED PROXY CARD OR VOTING INSTRUCTION FORM AND RETURNING IT IN THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Regardless of how you deliver your proxy, you may revoke your proxy before it is voted by timely submitting to the Secretary of the Company a written revocation or a proxy bearing a later date, or by attending the annual meeting and giving verbal notice of your intention to vote in person.

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        The annual meeting for which this notice is given may be adjourned or postponed from time to time without further notice other than announcement at the annual meeting or any adjournments or postponements thereof.

		BY ORDER OF THE BOARD OF DIRECTORS
		Wendy J. HillsMark P. Buyle ExecutiveSenior Vice President, Chief Legal Officer, General Counsel & Secretary

        The accompanying Proxy Statement is dated March 2, 20186, 2019 and is first being mailed to stockholders on or about March 9, 2018.13, 2019.

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WADDELL & REED FINANCIAL, INC.

PROXY STATEMENT

        This Proxy Statement is furnished in connection with the solicitation of proxies by Waddell & Reed Financial, Inc. (the "Company"), on behalf of its Board of Directors (the "Board"), for the 20182019 Annual Meeting of Stockholders (the "Annual Meeting"). This Proxy Statement is dated March 2, 20186, 2019 and, together with the related proxy card, is being mailed to stockholders on or about March 9, 2018.13, 2019.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING

When and where is the Annual Meeting?

        The Annual Meeting will be held in the William T. Morgan Auditorium at the Company's principal executive offices located at 6300 Lamar Avenue, Overland Park, Kansas 66202 at 10:00 a.m., local time, on Thursday,Tuesday, April 26, 2018.23, 2019.

What matters will be voted upon at the Annual Meeting?

        At the Annual Meeting you will be asked to:

•

Elect Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. Morrissey,Kathie J. Andrade, who have been nominated by the Board, as Class IIIII directors to hold office until the 20212022 Annual Meeting of Stockholders.



•

Conduct an advisory vote to approve named executive officer compensation.



•

Ratify the appointment of KPMG LLP ("KPMG") as the Company's independent registered public accounting firm for the 20182019 fiscal year.



•

Transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

What constitutes a quorum?

        The presence, either in person or by proxy, of the holders of at least a majority of the voting power of our issued and outstanding shares of Class A common stock is required to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes, which are described in more detail below, are counted as shares present at the Annual Meeting for purposes of determining whether a quorum exists.

Who is entitled to vote?

        Only stockholders of record of the Company's Class A common stock at the close of business on February 26, 2018,25, 2019, which is the "record date," are entitled to notice of, and to vote at, the Annual Meeting. Shares that may be voted include shares that are held (1) directly by the stockholder of record and (2) beneficially through a broker, bank or other nominee. Each share of our Class A common stock is entitled to one vote on each matter submitted for a vote at the Annual Meeting.

        As of the record date, there were approximately 83,142,12976,126,894 shares of our Class A common stock issued and outstanding and entitled to be voted at the Annual Meeting. Any shares held in treasury on the record date are not considered outstanding and will not be voted.

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What is the difference between holding shares as a "registered owner" and as a "beneficial owner"?

        Most of the Company's stockholders hold their shares through a broker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between registered shares and those owned beneficially.

•

Registered Owners – If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A. ("Computershare"), you are the stockholder of record. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the Annual Meeting.



•

Beneficial Owners – If your shares are held in a brokerage account, bank or by another nominee, you are the "beneficial owner" of shares held in street name. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote or to vote in person at the Annual Meeting. However, since you are not a stockholder of record, you may not vote these shares in person at the Annual Meeting unless you obtain a "legal proxy" from your broker, bank or other nominee (who is the stockholder of record), giving you the right to vote the shares.

What stockholder approval is necessary for approval of the proposals?

•

Election of Directors

        The election of directors requires the affirmative vote of a plurality of the shares of our Class A common stock cast at the Annual Meeting. This means that the threetwo Class IIIII director nominees receiving the most votes will be elected. For purposes of this vote, neither withholding your vote (or a direction to a broker or nominee to do so) nor a broker non-vote (as described below) will be counted as votes cast, and therefore, will have no effect on the outcome of the election of directors.

        Under our Director Resignation Policy, any nominee for director in an uncontested election who receives a greater number of "withheld" votes than "for" votes is required to tender his or her resignation for consideration by the Board. For more detail on this policy, see "Corporate Governance – Director Resignation Policy" below.

•

Advisory Vote on Named Executive Officer Compensation

        The advisory vote to approve named executive officer compensation requires the affirmative vote of a majority of the shares of our Class A common stock cast at the Annual Meeting. For purposes of this vote, neither a vote to abstain (or a direction to a broker or other nominee to do so) nor a broker non-vote (as described below) will be counted as a vote cast, and therefore, will have no effect on this vote. Although this vote is advisory and non-binding on the Board, the Compensation Committee and the Company, we value the opinion of our stockholders and will take the results of this advisory vote into account when making future decisions regarding our executive compensation program.

•

Ratification of the Appointment of the Company's Independent Registered Public Accounting Firm

        The ratification of the Audit Committee's appointment of KPMG as the Company's independent registered public accounting firm for the 20182019 fiscal year requires the affirmative vote of a majority of the shares of our Class A common stock cast at the Annual Meeting. For purposes of this vote, a vote to abstain (or a direction to a broker or other nominee to do so) is not counted as a vote cast, and therefore, will have no effect on this vote. Stockholder ratification is not required for the appointment of KPMG because the Audit Committee has the responsibility of appointing the Company's independent registered public accounting firm. However, we are submitting the proposal to solicit the opinion of our stockholders.

        As of the record date, directors and executive officers of the Company beneficially owned an aggregate of approximately 2,800,0231,618,074 shares of Class A common stock representing approximately 3.4%2% of our Class A common stock issued and outstanding, and therefore, 3.4%2% of the voting power entitled to vote

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vote at the Annual Meeting. The Company believes that its directors and executive officers currently intend to vote their shares (1) FOR the election of Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. MorrisseyKathie J. Andrade as Class IIIII directors, (2) FOR the approval, on an advisory basis, of the compensation paid to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, and (3) FOR the ratification of KPMG as the Company's independent registered public accounting firm for the 20182019 fiscal year.

May I vote my shares in person at the Annual Meeting?

        If you are the registered owner of shares of our Class A common stock, you have the right to vote these shares in person at the Annual Meeting.

        If you are the beneficial owner of shares of our Class A common stock, you may vote these shares in person at the Annual Meeting if you have requested and received a legal proxy from your broker, bank or other nominee (the stockholder of record) giving you the right to vote the shares at the Annual Meeting, complete such legal proxy and present it to the Company at the Annual Meeting.

        Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy card or voting instructions so that your vote will be counted if you later decide not to attend the Annual Meeting.

How can I vote my shares without attending the Annual Meeting?

        If you are the registered owner of shares of our Class A common stock, you may instruct the named proxy holders on how to vote your shares by completing, signing, dating and timely returning the enclosed proxy card in the postage pre-paid envelope provided with this Proxy Statement, or by using the Internet voting site or the toll-free telephone number listed on the proxy card. Specific instructions for using the Internet and telephone voting systems are on the proxy card. The Internet and telephone voting systems will be available until 11:59 p.m. Central Time, on Wednesday,Monday, April 25, 201822, 2019 (the day before the Annual Meeting).

        If you are the beneficial owner of shares of our Class A common stock held in street name, you may instruct your broker, bank or other nominee on how to vote your shares. Your nominee has enclosed with this Proxy Statement a voting instruction form for you to use in directing your nominee on how to vote your shares. The instructions from your nominee will indicate if Internet or telephone voting is available and, if so, will provide details regarding how to use those systems.

If my shares are held in "Street Name," will my broker, bank or other nominee vote my shares for me?

        Brokers, banks and other nominees who do not have instructions from their "street name" customers may not use their discretion in voting their customers' shares on "non-routine" matters. The proposal to elect Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. MorrisseyKathie J. Andrade as Class IIIII directors and the advisory vote to approve named executive officer compensation are non-routine matters and, therefore, shares of our Class A common stock held in "street name" will not be voted with respect to these proposals without voting instructions from the beneficial owners. However, the proposal to ratify the appointment of KPMG as the Company's independent registered public accounting firm for the 20182019 fiscal year is considered a routine matter and, therefore, if beneficial owners fail to give voting instructions, nominees will have discretionary authority to vote shares of our Class A common stock with respect to this proposal. You should follow the instructions provided by your nominee in directing your nominee on how to vote your shares.

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What is a "broker non-vote"?

        Generally, a "broker non-vote" occurs when a broker, bank or other nominee that holds shares in "street name" for customers is precluded from exercising voting discretion on a particular proposal because (1) the beneficial owner has not instructed the nominee how to vote, and (2) the nominee lacks discretionary voting power to vote such shares. Under New York Stock Exchange ("NYSE") rules, a nominee does not have discretionary voting power with respect to the approval of "non-routine" matters absent specific voting instructions from the beneficial owners of such shares.

        The proposal to elect Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. MorrisseyKathie J. Andrade as Class IIIII directors and the advisory vote to approve named executive officer compensation are "non-routine" matters. If you are the beneficial owner of shares of the Company's Class A common stock, your nominee will send you directions on how you can instruct them to vote. If you do not provide voting instructions, your nominee will not vote your shares on these proposals.

How will my proxy be voted?

        Shares represented by a properly executed proxy (in paper form, by Internet or by telephone) that is timely received, and not subsequently revoked, will be voted at the Annual Meeting or any adjournments or postponements thereof in the manner directed on the proxy. HenryThomas C. Godlasky and Philip J. Herrmann and Alan W. KosloffSanders are named as proxy holders in the proxy form and have been designated by the Board to represent you and vote your shares at the Annual Meeting. All shares represented by a properly executed proxy on which no choice is specified will be voted (1) FOR the election of Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. MorrisseyKathie J. Andrade as Class IIIII directors, (2) FOR the approval, on an advisory basis, of the compensation paid to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, (3) FOR the ratification of the appointment of KPMG as the Company's independent registered public accounting firm for the 20182019 fiscal year, and (4) in accordance with the proxy holders' best judgment as to any other business that properly comes before the Annual Meeting.

        This Proxy Statement is considered to be voting instructions for the trustee of the Waddell & Reed Financial, Inc. 401(k) and Thrift Plan (the "401(k) Plan") for our Class A common stock allocated to individual accounts under that plan. If account information is the same, participants in the plan401(k) Plan who are also stockholders of record will receive a single proxy representing all of their shares. If a plan401(k) Plan participant does not submit a proxy to us, the trustee of the plan401(k) Plan will vote the shares allocated to the participant's account in the same proportion as the total shares in the plan401(k) Plan for which directions have been received.

May I revoke my proxy and change my vote?

        Yes. You may revoke your proxy and change your vote prior to the vote at the Annual Meeting.

        If you are the registered owner of shares of our Class A common stock, you may revoke your proxy and change your vote with respect to those shares by (1) timely submitting a later-dated proxy, a later-dated vote by telephone or later-dated vote via the Internet (which automatically revokes the earlier proxy), (2) giving timely notice of your changed vote to us in writing mailed to the attention of Wendy J. Hills,Mark P. Buyle, Secretary, at our principal executive offices, or (3) attending the Annual Meeting and giving verbal notice of your intention to vote in person.

        If you are the beneficial owner of shares of our Class A common stock held in street name, you may revoke your proxy and change your vote with respect to those shares (1) by submitting new voting instructions to your broker, bank or other nominee in accordance with their voting instructions, or (2) if you have obtained a legal proxy from your nominee giving you the right to vote your shares, by attending the Annual Meeting, presenting the completed proxy to the Company and voting in person.

        You should be aware that simply attending the Annual Meeting will not in and of itself constitute a revocation of your proxy.

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Who will count the votes?

        Our transfer agent, Computershare, will tabulate and certify the votes. A representative of Computershare will serve as the inspector of election at the Annual Meeting.

Who will pay the costs of soliciting proxies?

        The costs of soliciting proxies pursuant to this Proxy Statement will be borne by the Company. Proxies will be solicited initially by mail. Further solicitation may be made in person or by telephone, electronic mail or facsimile. The Company will bear the expense of preparing, printing and mailing this Proxy Statement and accompanying materials to our stockholders. Upon request, the Company will reimburse brokers, banks or other nominees for reasonable expenses incurred in forwarding copies of the proxy materials relating to the Annual Meeting to the beneficial owners of our Class A common stock.

        The Company has retained Georgeson Inc., an independent proxy solicitation firm ("Georgeson"), to assist in soliciting proxies from stockholders. Georgeson will receive a fee of approximately $10,000 as compensation for its services and will be reimbursed for its out-of-pocket expenses. The Company has agreed to indemnify Georgeson against certain liabilities arising under the federal securities laws.

What other business will be presented at the Annual Meeting?

        As of the date of this Proxy Statement, the Board knows of no other business that may properly be, or is likely to be, brought before the Annual Meeting. If any other matters should arise at the Annual Meeting, the persons named as proxy holders, HenryThomas C. Godlasky and Philip J. Herrmann and Alan W. Kosloff,Sanders, will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If, for any unforeseen reason, any of the Class IIIII director nominees are not available to serve as a director, the named proxy holders will vote your proxy for such other director candidate or candidates as may be nominated by the Board.

What are the deadlines to nominate directors or to propose other business for consideration at the 20192020 Annual Meeting of Stockholders?

•

Stockholder Proposals to be Considered for Inclusion in the Company's Proxy Materials

        In order for a stockholder proposal to be eligible to be included in the Company's proxy statement and proxy card for the 20192020 Annual Meeting of Stockholders, the proposal must (1) be received by the Company at its principal executive offices, 6300 Lamar Avenue, Overland Park, Kansas 66202, Attn: Secretary, on or before November 9, 2018,14, 2019, and (2) concern a matter that may be properly considered and acted upon at the annual meeting in accordance with applicable laws, regulations and the Company's Bylaws and policies, and must otherwise comply with Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

•

Director Nominations and Other Business to be Brought Before the 20192020 Annual Meeting of Stockholders

        Notice of any director nomination or the proposal of other business that you intend to present at the 20192020 Annual Meeting of Stockholders, but do not intend to have included in the Company's proxy statement and form of proxy relating to the 20192020 Annual Meeting of Stockholders, must be received by the Company at its principal executive offices, 6300 Lamar Avenue, Overland Park, Kansas 66202, Attn: Secretary, not earlier than the close of business on December 27, 201825, 2019 and not later than the close of business on January 16, 2019 .14, 2020. In the event that the date of the 20192020 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after the anniversary date of the 20182019 Annual Meeting of Stockholders, the notice must be delivered to the Company not earlier than the 120^th day prior to the 20192020 Annual Meeting of Stockholders and not later than the later of the 100^th day prior to such annual meeting or the 10^th day following the day on which public announcement of the date of such annual meeting is first

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made by the Company. In addition, your notice must include the information required by the Company's Bylaws with respect to each director nomination or proposal of other business that you intend to present at the 20192020 Annual Meeting of Stockholders.

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Where can I find the voting results of the Annual Meeting?

        The Company will publish final voting results of the Annual Meeting in a Current Report on Form 8-K within four business days after the Annual Meeting.

What should I do if I receive more than one set of voting materials?

        You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy or voting instruction forms. For example, if you hold your shares of our Class A common stock in more than one brokerage account, you may receive a separate voting instruction form for each brokerage account. If you are a registered owner and your shares of our Class A common stock are registered in more than one name, you will receive more than one proxy card. Please vote each proxy and voting instruction form that you receive.

What is "householding"?

        In an effort to reduce printing costs and postage fees, the Company has adopted a practice approved by the Securities and Exchange Commission (the "SEC") called "householding." Under this practice, certain stockholders who have the same address and last name will receive only one copy of this Proxy Statement and the Company's Annual Report on Form 10-K, unless one or more of these stockholders notifies the Company that he or she wishes to continue receiving individual copies. Stockholders who participate in householding will continue to receive separate proxy cards.

        If you share an address with another stockholder and received only one copy of this Proxy Statement and the Company's Annual Report on Form 10-K, and you would like to request a separate copy of these materials, or you do not wish to participate in householding in the future, please (1) mail such request to Waddell & Reed Financial, Inc. Attn: Investor Relations Department, 6300 Lamar Avenue, Overland Park, Kansas 66202, or (2) contact our Investor Relations Department toll-free at (800) 532-2757. The Company will promptly deliver a separate copy of this Proxy Statement and the Company's Annual Report on Form 10-K upon receipt of such request. Similarly, stockholders sharing an address that are receiving multiple copies of the Company's proxy materials may request that they receive a single copy of those materials in the future by contacting the Company at the address and phone number above.

What do I need to do now?

        First, read this Proxy Statement carefully. Then, if you are a registered owner of shares of our Class A common stock, you should, as soon as possible, submit your proxy by either executing and timely returning the proxy card or by voting electronically via the Internet or by telephone. If you are the beneficial owner of shares of our Class A common stock held in street name, then you should follow the voting instructions of your broker, bank or other nominee. Your shares will be voted in accordance with the directions you specify. If you submit an executed proxy card to the Company, but fail to specify voting directions, your shares will be voted (1) FOR the approval of the director nominees, (2) FOR the approval, on an advisory basis, of the compensation paid to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K and (3) FOR the ratification of KPMG as the Company's independent registered public accounting firm for the 20182019 fiscal year.

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Who can help answer my questions?

        If you have questions concerning a proposal or the Annual Meeting, if you would like additional copies of this Proxy Statement or our 20172018 Annual Report, or if you need special assistance at the Annual Meeting, please call our Investor Relations office toll free at (800) 532-2757. In addition, information regarding the Annual Meeting is available via the Internet at our websiteir.waddell.com.

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        YOU SHOULD CAREFULLY READ THIS PROXY STATEMENT IN ITS ENTIRETY.    The summary information provided above in "question and answer" format is for your convenience only and is merely a brief description of material information contained in this Proxy Statement.

        YOUR VOTE IS IMPORTANT. IF YOU ARE A REGISTERED OWNER OF SHARES OF OUR CLASS A COMMON STOCK, YOU MAY VOTE BY TELEPHONE, INTERNET OR BY FILLING IN, SIGNING AND DATING THE ENCLOSED PROXY CARD AND TIMELY RETURNING IT IN THE ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. IF YOU ARE A BENEFICIAL OWNER OF SHARES OF OUR CLASS A COMMON STOCK, PLEASE FOLLOW THE VOTING INSTRUCTIONS OF YOUR BROKER, BANK OR OTHER NOMINEE PROVIDED WITH THIS PROXY STATEMENT AS PROMPTLY AS POSSIBLE.

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PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING

PROPOSAL NO. 1
ELECTION OF DIRECTORS

        The Board nominates Thomas C. Godlasky, Dennis E. LoguePhilip J. Sanders and Michael F. MorrisseyKathie J. Andrade, as Class IIIII directors, to hold office for a term of three years, expiring at the close of the 20212022 Annual Meeting of Stockholders or until their successors are elected and qualified, or their earlier resignation or removal. James M. Raines, a Class III director, will retire from the Board on the date of the Annual Meeting and is not standing for re-election.

The Nominating and Corporate Governance Committee (the "Corporate Governance Committee"), which is comprised of non-employee directors, recommended Messrs. Godlasky, LogueMr. Sanders and Morrissey,Ms. Andrade, as nominees for director. AllBoth of these nominees are current directors of the Company, and each nominee has agreed to be named in this Proxy Statement and to serve as a director of the Company if elected. The Board believes these incumbent directors standing for re-election are well qualified and experienced to direct and oversee the Company's operations and business affairs and will represent the interests of the stockholders as a whole. Biographical information on each of these nominees is included below in "Directors and Executive Officers of the Company – Directors and Executive Officers."

        Ms. Andrade was appointed to the Board as a Class III director in March 2019 to fill the vacancy created by Henry J. Herrmann's retirement in April 2018. See "Corporate Governance – Board Composition and Director Qualifications" for information regarding the identification of Ms. Andrade as a director candidate.

        If any director nominee becomes unavailable for election, which is not anticipated, the named proxy holders will vote for the election of such other person or persons as the Board may nominate, unless the Board resolves to reduce the number of Class IIIII directors to serve on the Board and thereby reduce the number of directors to be elected at the Annual Meeting.

        THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTEFOR EACH OF THE DIRECTOR NOMINEES LISTED HEREIN.

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OTHER INFORMATION YOU NEED TO MAKE AN INFORMED DECISION

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Number of Directors and Term of Directors and Executive Officers

        The Company's Bylaws provide that the number of directors will not be less than seven nor more than 15 with the exact number to be fixed by the Board. The Company's Certificate of Incorporation divides the Board into three classes of as equal size as possible, with the terms of each class expiring in consecutive years so that only one class is elected in any given year. Currently, there are nine directors with three directors in Class I, three directors in Class II and three directors in Class III. Upon Mr. Herrmann'sRaines' retirement from the Board on the date of the Annual Meeting, the number of Class III directors will be reduced to two until the Board elects to fill the vacant position.

        The stockholders of the Company elect successors for directors whose terms have expired at the Company's annual meeting. The Board elects members to fill new membership positions and vacancies in unexpired terms on the Board.Board resulting from death, resignation, retirement, disqualification, removal from office or other cause. Pursuant to the Company's Bylaws,Corporate Governance Guidelines, non-employee directors must retire from the Board at the close of the annual meeting of Stockholders following their 7975^th birthday.birthday; provided, that existing directors that are 75 years or older may complete their current term. Executive officers of the Company are elected by the Board and hold office until their successors are elected and qualified or until their earlier death, retirement, resignation or removal.

Directors and Executive Officers

        The names of each of the Company's directors and executive officers and their respective age on the date of the Annual Meeting and current position are as follows:

        Below is a description of the backgrounds of the executive officers, directors and nominees for director, including their principal occupation and membership on public or registered investment company boards for the past five years. We have also provided information concerning the particular experience, qualification, attributes and skills that the Corporate Governance Committee and the Board considered relevant to each director and nominee for director that led to the conclusion that he or she should serve as a director.

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Kathie J. Andrade has been a director of the Company since March 2019. She served as a member of the Executive Committee of TIAA, a financial services organization in New York, New York, from 2014 to June 2018 and as CEO of its Retail Financial Services business and Chairman of TIAA Federal Savings from 2016 to August 2018. Ms. Andrade also served as President of TIAA Services Broker Dealer from 2011 to 2016. She joined TIAA in 2008 as COO of Wealth Management. Prior to TIAA, Ms. Andrade held a number of senior management positions at Bank of America, a financial services company in Boston, Massachusetts, from 1986 to 2008.Ms. Andrade is a nominee for director.

Ms. Andrade has over 33 years of experience in the financial services industry, including as a member of the executive leadership team of TIAA, a Fortune 100 company. She has significant experience developing and executing successful sales and recruitment strategies for financial services organizations. Ms. Andrade also brings to the Board substantial knowledge in the areas of mergers and acquisitions, strategic operational leadership, wealth management, risk management and compliance, technology innovation, leadership development, diversity and inclusion.

        Brent K. Bloss has been Executive Vice President of the Company since February 2018 and Chief Operating Officer of the Company since November 2017. Mr. Bloss served as Senior Vice President, Chief Financial Officer and Treasurer of the Company from March 2014 to February 2018. Prior thereto, Mr. Bloss was Senior Vice President – Finance and Principal Accounting Officer of the Company since July 2007 and Treasurer of the Company since January 2006. Previously, he served as Vice President of the Company from April 2004 to July 2007, as Assistant Treasurer of the Company from January 2002 to January 2006, and as Assistant Vice President from January 2002 to April 2004. From September 1995 to December 2001, he served in various roles in the audit practice of KPMG. Mr. Bloss joined the Company in January 2002.

        Mark P. Buyle has been Senior Vice President, Chief Legal Officer, General Counsel and Secretary of the Company since August 2018. Previously he served as Interim General Counsel and Secretary of the Company from April 2018 to August 2018 and as Senior Vice President and Deputy General Counsel of the Company from January 2017 to April 2018. Prior thereto, he served as Senior Vice President and Associate General Counsel of the Company from March 2000 to January 2017. Before joining the Company, Mr. Buyle was a corporate attorney with the Kansas City law firm Polsinelli. Mr. Buyle joined the Company in 1995 as a senior attorney.

Benjamin R. Clouse has been Senior Vice President and Chief Financial Officer of the Company since February 2018 and Treasurer since December 2018. Mr. Clouse served as Vice President and Chief Accounting Officer of the Company from February 2017 to February 2018 and Vice President and Principal Accounting Officer from March 2016 to February 2017. Prior thereto, Mr. Clouse was Vice President of the Company since October 2015. Prior to joining the Company, Mr. Clouse served as Chief Financial Officer of Executive AirShare Corporation, a private aviation company in Lenexa, Kansas, from September 2012 to October 2015. From 2006 to 2012 and from 2002 to 2005, he served in various roles with H&R Block, Inc., a tax preparation company in Kansas City, Missouri, including Assistant Vice President – Audit Services and Assistant Vice President and Controller – Tax Services. From 2005 to 2006, Mr. Clouse served as Vice President – Finance and Corporate Controller of Gold Bank Corporation, Inc., a bank holding company. From September 1996 to January 2002, he served in various roles in the audit practice of Deloitte & Touche, LLP. Mr. Clouse joined the Company in October 2015.

Sharilyn S. Gasaway.Gasaway    Ms. Gasaway has been a director of the Company since July 2010. She has served as a director of Genesis Energy, L.P., a Houston, Texas diversified midstream energy master limited partnership, since March 2010 and of J.B. Hunt Transport Services, Inc., a transportation logistics company in Lowell, Arkansas, since February 2009. From February 2006 to January 2009, she served as Executive Vice President and Chief Financial Officer of Alltel Corporation ("Alltel"), a U.S. wireless telecommunications network operator, acquired by Verizon Wireless in 2009. She served as Corporate Controller of Alltel from May 2002 to February 2006 and as Controller of Alltel Communications, Inc., a subsidiary of Alltel, from

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April 1999 to May 2002. Prior thereto, she served as Audit Manager of the former independent registered public accounting firm Arthur Andersen LLP from 1992 to April 1999. Ms. Gasaway's term on the Board expires in 2020.

        As the former Executive Vice President and Chief Financial Officer of a Fortune 500 company, Ms. Gasaway has extensive experience in the areas of capital markets, budgeting and forecasting, strategic planning, internal audit, tax and auditing with respect to complex business operations and transactions. As a result, she brings to the Board a breadth of knowledge regarding the financial and accounting functions of the Company's operations, as well as with respect to the Company's financial controls, financial reporting and disclosure, balance sheet management, integration of acquisitions, and accounting. Ms. Gasaway's experience serving as a director for companies within the oil and gas and transportation industries provides her with a diverse perspective on Board-related matters. She has been a Certified Public Accountant since 1993.

Thomas C. Godlasky.Godlasky    Mr. Godlasky has been a director of the Company since July 2010 and will succeed Mr. Herrmann as Chairman of the Board on the date of the Annual Meeting.since April 2018. Mr. Godlasky served as Chief Executive Officer of Aviva North America, Aviva plc's life insurance and annuity business in the U.S. and its property and casualty business in Canada, from July 2007 to March 2010. Mr. Godlasky also served in the dual position as Chief Executive Officer and President of Aviva USA from November 2006 to November 2009. Prior thereto, Mr. Godlasky served as Chairman of the Board, Chief Executive Officer and President of AmerUs Group, Des Moines, Iowa, a life insurance and annuity business, which was acquired by Aviva plc in 2006, from November 2005 to November 2006 and as President and Chief Operating Officer from November 2003 to November 2006. He also served as a director of AmerUs Group from November 2003 until November 2006, whereupon he joined the Aviva USA Board of Directors until

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March 2010. Mr. Godlasky earned the Chartered Financial Analyst designation in 1992.Mr. Godlasky is a nominee for director.Godlasky's term on the Board expires in 2021

        Mr. Godlasky's service as the Chairman and Chief Executive Officer of AmerUs Group, a leading U.S. producer of annuity and life insurance products, provides him with valuable insights on running a complex financial services company with diverse operations and products. He has experience in a number of areas that are critical to the Company, including mergers and acquisitions, information and technology, risk management, long-range strategic planning, expertise in the types of products we offer to our clients and the importance of close cooperation with our regulators. Mr. Godlasky brings strong leadership skills and a valuable perspective on global financial, operational and strategic matters to the Board, as well as maintains a deep understanding of the challenges of operating in a highly regulated industry such as ours.

        Henry J. Herrmann has been Chairman of the Board since January 2010 and a Director since March 1998. Mr. Herrmann served as Chief Executive Officer of the Company from May 2005 to August 2016. Prior thereto, he served as President of the Company from March 1998 to May 2005 and as Chief Investment Officer from March 1987 to June 2005. He is also a trustee of the InvestEd Portfolios, Ivy Funds, Ivy High Income Opportunities Fund, Ivy NextShares and Ivy Variable Insurance Portfolios, all of which are mutual funds managed by the Company. Mr. Herrmann served as a director of Blue Cross Blue Shield of Kansas City, a Kansas City, Missouri health insurance company, from 2007 to May 2017 and of the United Way of Greater Kansas City, the local Kansas City, Missouri office of United Way, a global leadership and support organization for community-based non-profit organizations, from June 2007 to 2012. He joined the Company in March 1971 and earned the Chartered Financial Analyst designation in 1977. Mr. Herrmann will retire from the Board on the date of the Annual Meeting.

Mr. Herrmann has over 52 years of experience in the financial services industry and is widely regarded as a distinguished leader in the asset management industry. Mr. Herrmann celebrated his 46^th anniversary with the Company in 2017. As Chairman of the Board and trustee of the Company's affiliated mutual fund boards, he has provided the Board with in-depth knowledge of, and experience with, the Company and its business, as well as valuable leadership and management experience. Mr. Herrmann's prior oversight of all Company operations and his experience in investment management, annual and long-term business planning, the negotiation and integration of acquisitions, and risk management has been an indispensable contribution to the Board.

Wendy J. Hills has been Executive Vice President of the Company since February 2018, Chief Legal Officer and General Counsel of the Company since February 2014 and Secretary of the Company since April 2005. Prior thereto, she served as Vice President and Associate General Counsel of the Company from April 2005 to February 2014, as Assistant General Counsel from April 2002 to April 2005, and as Assistant Secretary from April 2000 to April 2005. From June 1998 to April 2000, she served as the Compliance Officer of Waddell & Reed Investment Management Company ("WRIMCO"). Ms. Hills is also Vice President, General Counsel and Assistant Secretary of the InvestEd Portfolios, Ivy Funds, Ivy High Income Opportunities Fund, Ivy NextShares and Ivy Variable Insurance Portfolios, all of which are mutual funds managed by the Company. Prior to joining the Company in June 1998, Ms. Hills was associated with the law firm of Klenda, Mitchell, Austerman and Zuercher LLC, in Wichita, Kansas.

Alan W. Kosloff has been a Director of the Company since January 2003 and was Lead Independent Director sincefrom January 2010.2010 to April 2018. Prior thereto, he served as Chairman of the Board from May 2005 through December 2009. He has served as Chairman of Kosloff & Partners, LLC, Edwards, Colorado, a consulting and investment firm, since April 1996. Previously, he served as Chairman of Jones & Mitchell, Olathe, Kansas, an imprinted and licensed sportswear company, from October 1997 to March 2005 and as Chairman, Chief Executive Officer and President of American Marketing Industries, Inc., Kansas City, Missouri, an apparel manufacturing, distribution and marketing firm from 1976 to 1995. Mr. Kosloff's term on the Board expires in 2020. He will step down as Lead Independent Director on the date of the Annual Meeting in connection with Mr. Godlasky's appointment as Chairman of the Board.

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        Mr. Kosloff has over 4243 years of experience in executive management, investment, sales and marketing roles, including as President and Chief Executive Officer of American Marketing Industries, Inc. and founder of Kosloff & Partners, LLC. Mr. Kosloff provides the Board the benefit of his substantial financial, management and operational expertise, including with respect to marketing and distribution efforts, corporate governance, strategic planning and corporate strategy. As Lead Independent Director, Mr. Kosloff has offered valuable insights with respect to strategic planning, executive succession planning and executive development, corporate governance and stockholder communications.

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        Dennis E. Logue has been a Director of the Company since January 2002. He has served as Chairman of the Board of Ledyard Financial Group, Inc., a bank holding company located in Hanover, New Hampshire, since August 2005. Additionally, Mr. Logue has served as an Emeritus Professor of Management at the Amos Tuck School, Dartmouth College since August 2005. He served as Dean of the Michael F. Price College of Business at the University of Oklahoma from July 2001 to September 2005. Prior thereto, Mr. Logue held numerous business-oriented professorships, including at the Amos Tuck School, Dartmouth College from July 1974 to June 2001. He has also worked as a consultant and expert witness on various financial matters since 1974. Mr. Logue has served as a director of Abraxas Petroleum Corporation, San Antonio, Texas, a natural gas and crude oil exploration, development and production company, since April 2003 and of ALCO Stores, Inc., Dallas, Texas, a general merchandise retailer, from May 2005 through September 2014.Mr. Logue is a nominee for director.Logue's term on the Board expires in 2021.

        Mr. Logue is highly accomplished in the field of business management and financial academia, having taught in the areas of managerial economics and finance, corporate governance, financial markets and international finance for 4546 years and published over 90 books and articles in the areas of economics, pension plans, corporate and international finance and capital markets. His past leadership roles in the academic world allow him to bring a wide range of experience and new insights to his service on the Board. As a founding director of Ledyard National Bank, Mr. Logue also has substantial expertise in the areas of the financial services industry, executive management and operations.

        Michael F. Morrissey.Shawn M. Mihal has been Senior Vice President – Broker-Dealer of the Company since December 2018 and President, Waddell & Reed, Inc. ("WRI") since November 2017. Prior to that, Mr. Mihal was Chief Operating Officer of WRI from August 2017 to November 2017 and Senior Vice President, Chief Compliance Officer and Chief Regulatory Officer of WRI and Ivy Distributors, Inc. ("IDI") from March 2015 to August 2017. Prior to joining the company, he served as Vice President and Chief Compliance Officer for Transamerica Financial Advisors, Inc., an independent broker-dealer and registered investment advisor in St. Petersburg, Florida, from September 2010 to March 2015 and as Chief Compliance Officer for Great American Advisors, Inc., a registered investment advisor in Cincinnati, Ohio, from October 2004 to August 2010. Mr. Mihal joined the Company in March 2015.

Michael F. Morrissey has been a director of the Company since July 2010. He has been a director of Ferrellgas Partners, L.P., a propane gas marketing and distribution company in Liberty, Missouri since 1999. He was a director of Westar Energy, Inc., an electric service company based in Topeka, Kansas, from 2003 through May 2015. Mr. Morrissey retired in September 1999 after serving 24 years, including 17 years as a partner, with Ernst & Young LLP, an auditing and financial services firm. Prior thereto, Mr. Morrissey worked for five years for another major accounting firm and six years for a motor truck manufacturer. Mr. Morrissey has been a Certified Public Accountant since 1972. Mr. Morrissey also served as a director of Blue Cross Blue Shield of Kansas City, a Kansas City, Missouri health insurance company, from 2006 through April 2017; of J.E. Dunn Construction Group, Inc., a private construction business located in Kansas City, Missouri, from 2000 through January 2017; of Balance Innovations, Inc., an office management technology company located in Lenexa, Kansas, since 2008; and a special advisor to the audit committee of the Dairy Farmers of America, a farmer-owned milk marketing cooperative located in Kansas City, Missouri, from 2000 through August 2014. Mr. Morrissey also serves as a director or trustee for numerous non-profit, civic, and charitable organizations.Mr. Morrissey is a nominee for director.Morrissey's term on the Board expires in 2021.

        Mr. Morrissey's qualifications to serve as a director include his substantial experience as the Chairman or member of the audit committee of other public companies, his many years of experience as an audit partner of a major accounting firm, and his extensive experience as a director of other large companies, both public and private. Mr. Morrissey brings to the Board significant audit and accounting expertise and a deep understanding of financial statements, corporate finance, risk management and internal audit functions. Mr. Morrissey's knowledge and experience gained as a board member of various public and private companies, as well as not-for profit, civic and charitable organizations provide the Board with a wide range of experience and insights regarding Board actions. Mr. Morrissey is also a Certified Public Accountant (retired).

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        Christopher W. Rackers has been Senior Vice President and Chief Human Resources Officer of the Company since January 2019 and Senior Vice President and Chief Human Resources Officer of certain of the Company's subsidiaries since January 2017. Prior to joining the Company, Mr. Rackers was Vice President, Global Human Resources at Payless ShoeSource, a discount footwear retailer in Topeka, Kansas, from January 2016 to January 2017, Vice President, Global Human Resources at WIS International, a retail and inventory services company in Dallas, Texas, from May 2015 to December 2015, Vice President of Human Resources at H&R Block, a tax preparation company in Kansas City, Missouri, from May 2013 to June 2015. Prior thereto, he held several positions with Aramark, a food service, facilities and uniform services provider, including Senior Vice President, Human Resources, from June 2006 to May 2013. Mr. Rackers joined the Company in January 2017.

James M. Raines has been a Director of the Company since July 1998. He has served as President of James M. Raines and Company, San Antonio, Texas, an investment banking firm, since September 1988 and served as a director of Clear Channel Outdoor Holdings, Inc., a San Antonio, Texas outdoor advertising company, from November 2005 to May 2010. Mr. Raines' term on the Board expires in April 2019.

        Mr. Raines' 3031 years of experience in the investment banking business gives him valuable perspectives on financial and strategic matters, as well as expertise in capital markets and securities distribution. He has provided investment banking and financial advisory services, including with respect to merger and acquisition and capital raising functions, for numerous public and private companies covering a diverse range of businesses, which provides him with a broad perspective that is an asset to the Board. Additionally, Mr. Raines' tenure on the Board provides him with an important depth of knowledge regarding the Company's business, strategy and culture. His experience in investment banking has been particularly useful when the Board considers its capital and liquidity needs and potential acquisitions.

        Philip J. Sanders has been Chief Executive Officer and a Director of the Company since August 2016 and Chief Investment Officer of the Company since February 2011. He has served as President of WRIMCO and Ivy Investment Management Company ("IICO") since August 2016 and as Chief Investment Officer of WRIMCO and IICO since August 2010. Prior thereto, he served as Senior Vice President of WRIMCOWaddell & Reed Investment Management Company ("WRIMCO") from July 2000 to August 2016, Senior Vice President of IICO from April 2003 to August 2016 and Vice President of WRIMCO from January 1999 to July 2000. He is also President of the InvestEd Portfolios, Ivy Funds, Ivy High Income Opportunities Fund, Ivy NextShares and Ivy Variable Insurance Portfolios, all of which are mutual funds managed by the Company. Mr. Sanders joined the Company as a mutual fund portfolio manager in August 1998.Mr. Sanders is a nominee for director.

        Mr. Sanders has over 2930 years of experience in the financial services industry, including 1920 years with the Company. Mr. Sanders' oversight of all Company operations and his experience in investment management is an indispensable contribution to the Board and provides a critical link between management and the Board.

        John E. Sundeen, Jr.Amy J. Scupham has been Senior Vice President – Distribution of the Company since July 1999December 2018 and President of IDI since April 2018. Prior to that Ms. Scupham was Chief Administrative Officer – Investments since January 2006 He has also been Executive Vice President and Chief AdministrativeOperating Officer of WRIMCOIDI from February 2018 to April 2018 and of IICO since June 2004. He was appointed Executive Vice President of Waddell & Reed Services Company in August 2016. Mr. Sundeen was Chief Financial Officer from July 1999 to June 2004 and Treasurer of the Company from July 1999 to January 2006. Previously, he served as Senior Vice President of WRIMCO– Institutional Sales from January 1996May 2016 to June 2004February 2018. Prior thereto, she held various positions at the Company in institutional sales and as Head of Fixed Income within the Investment Management Division thereof from January 1994 to June 1999. Mr. Sundeenconsultant relations. Ms. Scupham joined the Company in June 1983.April 2008.

        Jerry W. Walton has been a Director of the Company since April 2000. Mr. Walton served as a business consultant to Hunt Ventures, a group of private companies located in Rogers, Arkansas, from April 2010 to February 2016. He served as Executive Vice President of Finance and Administration and Chief Financial Officer of J.B. Hunt Transport Services, Inc., a transportation provider in Lowell, Arkansas, from October 1991 until September 2009. Prior thereto, Mr. Walton served as a managing partner and a tax partner with KPMG, with whom he had been employed since 1968. Mr. Walton's term on the Board expires in 2020.

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        Mr. Walton brings extensive financial, operational and executive management expertise to the Board having served as the Executive Vice President and Chief Financial Officer of J.B. Hunt Transport Services, Inc., one of the largest transportation logistics companies in North America. Mr. Walton also has significant public accounting experience, including in the areas of accounting, finance and tax, and direct experience in the areas of information and technology services, treasury functions, real estate, human resources and risk management. As a long-time director, Mr. Walton offers a breadth of knowledge about issues affecting the Company and its industry, as well as with respect to its financial statements, balance sheet management, budgeting process and executive compensation. Mr. Walton is also a Certified Public Accountant (retired).

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        There are no family relationships among any of the Company's executive officers, directors or nominees for director.

Security Ownership of Management

        The following table reflects information regarding beneficial ownership of the Company's Class A common stock by each of its current directors (including all nominees for director), the current named executive officers set forth in the Summary Compensation Table and by all directors and executive officers as a group, as of February 26, 2018.25, 2019. Unless otherwise indicated in the footnotes below, "beneficially owned" means the sole power to vote or direct the voting of a security and the sole power to dispose or direct the disposition of a security.

*

Denotes less than 1%.

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CORPORATE GOVERNANCE

        We believe that good corporate governance helps to ensure that the Company is managed for the long-term benefit of our stockholders, and we continually review and consider our corporate governance policies and practices, the SEC's corporate governance rules and regulations, and the corporate governance listing standards of the NYSE, the stock exchange on which our Class A common stock is traded.

        You can access and print the charters of our Audit Committee, Compensation Committee and Corporate Governance Committee, as well as our Corporate Governance Guidelines, Corporate Code of Business Conduct and Ethics, Whistleblower Policy and other Company policies and procedures required by applicable law, regulation or NYSE corporate governance listing standards on the "Governance Documents" link in the dropdown menu on the "Corporate Governance" tab of the "Investor Relations" section of our website atir.waddell.com.

Director Independence

        The Board is composed of a majority of directors who satisfy the criteria for independence under the NYSE corporate governance listing standards. In determining independence, each year the Board affirmatively determines, among other items, whether the directors have any direct or indirect material relationship with the Company or any of its subsidiaries pursuant to the NYSE corporate governance listing standards. When assessing the "materiality" of a director's relationship with the Company, if any, the Board considers all relevant facts and circumstances, not merely from the director's standpoint, but from that of the persons or organizations with which the director has an affiliation. Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships. The Board also considers any other relationship that could interfere with the exercise of independence or judgment in carrying out the duties of a director.

        Applying these independence standards, the Board determined that Kathie J. Andrade, Sharilyn S. Gasaway, Thomas C. Godlasky, Alan W. Kosloff, Dennis E. Logue, Michael F. Morrissey, James M. Raines and Jerry W. Walton are all independent directors.

        After due consideration, the Board has determined that none of these non-employee directors have a material relationship with the Company or any of its subsidiaries (either directly or indirectly as a partner, stockholder or officer of an organization that has a relationship with the Company or any of its subsidiaries) and they all meet the criteria for independence under the NYSE corporate governance listing standards.

        Pursuant to the independence criteria of the NYSE corporate governance listing standards, the Board has determined that Henry J. Herrmann, who retired as Chief Executive Officer on August 1, 2016, is not an independent director due to his service as an employee of the Company within the last three years.

Board Composition and Director Qualifications

        The Corporate Governance Committee periodically assesses the appropriate size and composition of the Board, and whether any vacancies on the Board are expected. In the event that vacancies are anticipated or otherwise arise, the Corporate Governance Committee will review and assess potential director candidates. The Corporate Governance Committee utilizes various methods for identifying and evaluating candidates for director. Candidates may come to the attention of the Corporate Governance Committee through recommendations of Board members, management, stockholders or professional search firms. Generally, director candidates should, at a minimum:

•

Possess relevant business and financial expertise and experience, including an understanding of financial statements;

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Have the highest character and integrity and a reputation for working constructively with others;



•

Have sufficient time to devote to Board meetings and consultation on Board matters; and



•

Be free of conflicts of interest that violate applicable law or interfere with director performance.

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        In addition, the Corporate Governance Committee will consider for recommendation director candidates who possess the following qualities and skills, among others:

•

The capacity and desire to represent the interests of the Company's stockholders as a whole and not primarily a special interest group or constituency;



•

Diverse backgrounds with respect to business experience, professional expertise, individual perspectives, gender and ethnicity that support Board dynamics and effectiveness;



•

High level of leadership experience and sound business judgment;



•

Highly accomplished in their respective field, with superior credentials and recognition;



•

The ability to contribute to the mix of skills, core competencies, diversity and qualifications of the Board through notable or significant achievements or expertise in one or more of the following areas: accounting and finance, mergers and acquisitions, investment management, law, financial academia, strategic planning and executive leadership development;



•

Service as a senior officer of, or a trusted advisor to senior management of, a publicly-held company; and



•

Knowledge of the critical aspects of the Company's business and operations.

        The director qualifications above are general in nature and may be modified by the Board or the Corporate Governance Committee from time to time as the Board or the Corporate Governance Committee deems appropriate.

        In considering candidates for director nominee, the Corporate Governance Committee generally assemblesreviews all information regarding a candidate's background and qualifications, evaluates a candidate's mix of skills and qualifications, and determines the contribution the candidate could be expected to make to the overall functioning of the Board. The Board seeks independent directors who represent a diverse mix of perspectives, backgrounds and experiences that will enhance the quality of the Board's deliberations and decisions. The Corporate Governance Committee does not have a separate policy regarding gender, ethnicity or other similar diversity criteria in identifying candidates for director nominee, but rather evaluates diversity in a broad sense, recognizing the benefits of gender and ethnic diversity, while also considering the breadth of perspectives, backgrounds and experiences that directors and candidates for director nominee may bring to the Board. In its assessment of the Board's composition as a whole, the Corporate Governance Committee considers whether the Board reflects the appropriate overall balance of independence, sound judgment, business specialization, technical skills, diversity and other desired qualities.

        Following the retirement of Mr. Herrmann and Mr. Godlasky's appointment as Chairman of the Board in April 2018, the Board engaged Russell Reynolds Associates to assess the skills, experiences and background of our directors in light of the Company's strategic initiatives and the planned retirement of additional directors over the next couple of years. Based on the results of this assessment, the Corporate Governance Committee engaged Russell Reynolds to assist in the search for director candidates to fill the vacancy on the Board created by Mr. Herrmann's retirement and to identify candidates to fill vacancies created by future retirements. Through this process, the Corporate Governance Committee identified Ms. Andrade and recommended her to the full Board for appointment in March 2019.

Director Resignation Policy

        Our Corporate Governance Guidelines include a Director Resignation Policy pursuant to which any director nominee in an uncontested election who receives a greater number of "withheld" votes than "for" votes will, within five business days following the certification of the stockholder vote, tender his or her resignation to the Chairman of the Board for consideration by the Board. A director whose resignation is

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under consideration shall abstain from participating in any recommendation or decision regarding that resignation.

        The Board will promptly make a determination whether to accept, reject or otherwise act with respect to the tendered resignation. In making this determination, the Board may consider all factors that it deems

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relevant, including the underlying reasons why stockholders "withheld" votes for election from such director (if ascertainable), the length of service and qualifications of the director whose resignation has been tendered, the director's contributions to the Company, whether by accepting such resignation the Company will no longer be in compliance with any applicable law, rule, regulation or governing document, and whether or not accepting the resignation is in the best interests of the Company and its stockholders. The Board may also consider a range of possible alternatives concerning the director's tendered resignation, including acceptance of the resignation, rejection of the resignation, or rejection of the resignation coupled with a commitment to seek to address and cure the underlying reasons reasonably believed by the Board to have substantially resulted in the "withheld" votes.

        The Board shall act on the tendered resignation and shall publicly disclose its decision regarding the resignation within 120 days after the results of the election are certified. If the Board does not accept the resignation, the director shall continue to serve until the end of his or her term and until the director's successor is elected and qualified, or until his or her earlier resignation or removal.

Director Recommendations by Stockholders

        In addition to recommendations from Board members, management or professional search firms, the Corporate Governance Committee will consider director candidates properly submitted by stockholders who individually or as a group have beneficially owned at least two percent of the outstanding shares of the Company's Class A common stock for at least one year prior to the date the recommendation is submitted. The manner in which the Corporate Governance Committee evaluates candidates recommended by stockholders is generally the same as any other candidate, although the Corporate Governance Committee will also seek and consider information concerning any relationship between a stockholder recommending a candidate and the candidate to determine whether the candidate will represent the interests of all stockholders.

        Stockholders must submit director candidate recommendations in writing by certified mail to the Company's Secretary not less than 120 days prior to the first anniversary of the date of the proxy statement relating to the Company's previous annual meeting. Accordingly, for the 20192020 Annual Meeting of Stockholders, director candidates must be submitted to the Company's Secretary by November 2, 2018.7, 2019. Director candidates submitted by stockholders must contain at least the following information:

•

The name and address of the recommending stockholder;



•

The number of shares of the Company's Class A common stock beneficially owned by the recommending stockholder and the dates such shares were acquired;



•

The name, age, business address and residence of the candidate;



•

The principal occupation or employment of the candidate for the past five years;



•

A description of the candidate's qualifications to serve as a director, including financial expertise, and why the candidate does or does not qualify as "independent" under the NYSE corporate governance listing standards;



•

The number of shares of the Company's Class A common stock beneficially owned by the candidate, if any; and

        Equity awards for Outside Directors are intended to increase their beneficial ownership in the Company to more closely align their interests with those of our stockholders. On the first business day in January, Outside Directors (other than the Chairman of the Board) arewere granted $125,000 inshares restricted stock ($207,500 in restricted stock for the Lead Independent Director) based on the closing market price on the grant date. Accordingly, Ms. Gasaway and Messrs. Godlasky, Logue, Morrissey, Raines and Walton were each granted 6,2545,734 shares of restricted stock, Mr. Godlasky was granted 6,958 shares of restricted stock and Mr. Kosloff was granted 10,3816,996 shares of restricted stock on January 3, 2017.2, 2018. The value of the restricted stock awards for Messrs. Godlasky and Kosloff were calculated based on the time period during 2018 that they served as Chairman and Lead Independent Director, respectively. Restricted shares granted to Outside Directors do not have a purchase price and are subject to accelerated vesting upon a change of control, death, disability or mandatory retirement. Prior to 2017, restrictedRestricted stock awards vested in 33¹/3% increments annually beginning on the second anniversary of the grant date. However, beginning in 2017, grants of restricted stockgranted to Outside Directors

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and employees vest in 25% increments annually beginning2018 vested 100% on the first anniversary of the grant date in order to be more consistent with the vesting practices of our peers.date. Dividends are paid on awards of restricted stock at the same rate that is paid to all stockholders generally.

Other Personal Benefits

        In addition to the compensation outlined above, Outside Directors also receive the following benefits:

•

Until December 31, 2017, Outside Directors and their spouses were eligible to participate in the Company's group health insurance plan, which is generally available to all Company employees, with a portion of the Outside Directors' premiums paid for by the Company. Ms. Gasaway and Messrs. Godlasky, Herrmann, Kosloff, Raines and Walton made this election for 2017. Beginning January 1, 2018, Outside Directors arewere no longer eligible to participate in the Company's group health insurance plan, except for Mr. Herrmann, who iswas eligible to participate as a former employee. However, the cost of Mr. Herrmann's coverage was not subsidized by the Company.



•

On certain occasions, an Outside Director's spouse may accompany the Outside Director on Company aircraft when the director is attending Board or committee meetings; no incremental cost is incurred by the Company in these instances. The value of these benefits (calculated pursuant to Internal Revenue Service guidelines) is imputed as income to the Outside Director and included as taxable income on their Form 1099-MISC. See footnote 4(a) to the Summary Compensation Table for additional information regarding the value of personal aircraft usage.



•

The Company maintains director and officer insurance coverage and provides Outside Directors with special indemnification rights in the form of an indemnification agreement that exceeds the general rights provided under our Certificate of Incorporation and Bylaws.



•

Outside Directors may receive occasional perquisites or personal benefits of reasonable value, such as commemorative items in connection with their Board service and recreational benefits or other services and amenities when attending off-site Board meetings.

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20182019 Compensation

        In December 2017,2018, the Compensation Committee retained FWC to provide competitive compensation data and analysis of our Outside Director compensation, including retainers meeting fees and equity compensation awards, as compared to that paid to the non-employee directors of the Company's peer group. The Compensation Committee considered the current compensation structure for Outside Directors, market trends with respect to director compensation including committee retainers vs. individual meeting fees, and peer data for companies with an independent Chairman. TheBased on the time commitment of Mr. Godlasky, as Chairman of the Board, including leading the search process for new directors to fill vacancies created by the retirement of directors, the Compensation Committee approved changes to 20182019 compensation for Outside Directorsthe Chairman of the Board, and the Board ratified the changes, including changes that will take effect onchanges. For 2019, the date of the Annual Meeting when Mr. Herrmann retires from the Board, Mr. Godlasky assumes the duties of Chairman and Mr. Kosloff steps down as Lead Independent Director.

        For 2018, Outside Directors will receive the following cash and equity compensation:

Cash Retainers – Board

•

$80,000 for each Board member (other than the Chairman)



•

$110,000 for the Lead Independent Director



•

$325,000retainer for the Chairman (through the date of the Annual Meeting)



•

$150,000 forBoard was increased to $225,000 and the Chairman (from the date of the Annual Meeting)

Cash Retainers – Committees

•

$20,000would not be eligible to receive any additional cash compensation through committee retainers or meeting fees. Compensation for Audit Committee Chair



•

$10,000 for Audit Committee Member



•

$15,000 for Compensation Committee Chair



•

$7,500 for Compensation Committee Member



•

$12,000 for Corporate Governance Committee Chair



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$6,000 for Corporate Governance Committee Member

Restricted Stock Awards

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$125,000 for each Board member (other than the Chairman)



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$207,500 for the Lead Independent Director



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$165,000 for the Chairman (from the date of the Annual Meeting)

Restricted stock awards were granted on the first business day of January. The number of shares of restricted stock were calculated based on the closing price of the Company's stock on the grant date and the shares shall vest on the first anniversary of the grant date.

        The cash retainers and restricted stock awards payable toother Outside Directors shall be pro-rated based on the number of whole or partial months served during a calendar year.

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        The following table reflects the compensation paid to our Outside Directors for 2017.2018.

20172018 Director Compensation

Table of (i) group health insurance premiums subsidized by the Company for Ms. Gasaway and Messrs. Godlasky, Herrmann, Kosloff, Raines and Walton and (ii) personal aircraft usage for Mr. Herrmann. The methodology used to determine the Company's incremental cost for personal aircraft usage is described in footnote 4(a) of the Summary Compensation Table.Contents

Code of Business Conduct and Ethics

        The Board has adopted a Corporate Code of Business Conduct and Ethics that applies to all of the Company's directors, officers and employees. The purpose and role of this code is to focus our directors, officers and employees on areas of ethical risk, provide guidance to help them recognize and deal with ethical issues, provide mechanisms to report unethical or unlawful conduct, and to help enhance and formalize our culture of integrity, honesty and accountability. As required by applicable law, the Company will post on the "Governance Documents" page under the "Corporate Governance" tab on the "Investor Relations" section of its website atir.waddell.com any amendments or waivers of any provision of this code made for the benefit of executive officers or directors of the Company.

Corporate Governance Guidelines

        The Board has adopted Corporate Governance Guidelines to assist it in exercising its responsibilities to the Company and its stockholders. The guidelines address, among other items, director responsibilities, Board committees, non-employee director compensation and stock ownership guidelines.

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Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Exchange Act requires each director, officer and any individual beneficially owning more than 10% of the Company's Class A common stock to file with the SEC reports of security ownership and reports on subsequent changes in ownership. These reports are generally due within two business days of the transaction giving rise to the reporting obligation.

        To the Company's knowledge, all required Section 16(a) filings were timely and correctly made by reporting persons during 2017.2018, except that due to an administrative error, a Form 4 reporting the forfeiture of restricted shares of the Company's Class A common stock held by the spouse of Benjamin R. Clouse upon her termination of employment with the Company, was not timely filed.

Certain Relationships and Related Transactions

        The Corporate Governance Committee is charged with the responsibility of reviewing and pre-approving all "related-person transactions" (as defined in SEC regulations), and periodically reassessing any related-person transaction entered into by the Company to ensure its continued appropriateness. This responsibility is set forth in the Company's Corporate Code of Business Conduct and Ethics.

        MelissaKurt A. Clouse,Sundeen, the spousebrother of Benjamin R. Clouse,John E. Sundeen, Jr., our Senior Vice President and Chief FinancialAdministrative Officer is– Investments, was an employee in the Human Resources department of the Company. However, Ms. Clouse intends to resign from her position with the Company in Apriluntil December 2018. For the 20172018 fiscal year, Ms. ClouseKurt Sundeen received an aggregate salary and bonuscash compensation of $112,308,$225,000, Company matching and discretionary contributions totaling $8,985$8,705 under the Company's 401(k) Plan, and participated in the Company's active employee flexible benefits plans, which are generally available to all Company employees. Additionally, theThe Company awarded Ms. Clouse 1,299 sharesMr. K. Sundeen 4,737shares of restricted stock and 1,2994,737 cash-settled restricted stock units in January 20172018 with aan aggregate grant date fair value of $50,037$210,039 calculated in accordance with ASC 718.

        Kurt A. Sundeen, the brother of John E. Sundeen, Jr., our Senior Vice President and Chief Administrative Officer – Investments, is an employee of the Company. For the 2017 fiscal year, Kurt Sundeen received an aggregate salary and bonus of $324,616, Company matching and discretionary contributions totaling $21,600 under the Company's 401(k) Plan, and participated in the Company's active employee flexible benefits plans, which are generally available to all Company employees. Additionally, the Company awarded Mr. K. Sundeen 5,712received 105 shares of restrictedCompany Class A common stock and 5,712 cash-settled restrictedon November 29, 2018 pursuant to the Company's anniversary stock unitsprogram in January 2017recognition of his 25th anniversary with a grant date fair value of $220,026 calculated in accordance with ASC 718.the Company.

        The Corporate Governance Committee has reviewed and ratified the employment of Ms. Clouse and Mr. K. Sundeen in accordance with Company policy.

Compensation Committee Interlocks and Insider Participation

        During the 20172018 fiscal year, none of the Company's executive officers served on the board of directors of any entities whose directors or officers serve as a director of the Company. No current or past executive officers of the Company serve on the Compensation Committee.

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Stockholder Ownership

        Based on the results of the Corporate Governance Committee's most recent triennial review, we terminated our Rights Agreement, which we had entered into on April 8, 2009 (the "Rights Agreement") by entering into an amendment with the rights agent named in the Rights Agreement to accelerate the expiration of the Rights (as defined below) to February 15, 2018. Under the now terminated Rights Agreement, holders of the Company's Class A common stock had received a preferred stock purchase right (the "Rights") that could be exercised to purchase additional shares of Class A common stock in the event certain persons, along with their affiliates and associates, beneficially owned 15% or more of the Company's outstanding Class A common stock. The original expiration date of the Rights was April 28, 2019. The Corporate Governance Committee reviewed and evaluated the Rights Agreement every three years in order to consider whether the maintenance of the Rights Agreement continued to be in the best interests of the Company and its stockholders. Following each review, the Corporate Governance Committee communicated its conclusions to the Board.

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PRINCIPAL STOCKHOLDERS OF THE COMPANY

        The following table reflects all persons known to be the beneficial owner of more than 5% of the Company's Class A common stock as of February 26, 2018.25, 2019. Unless otherwise indicated in the footnotes below, "beneficially owned" means the sole power to vote or direct the voting of a security and the sole power to dispose or direct the disposition of a security.

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COMPENSATION COMMITTEE REPORT

        Notwithstanding anything to the contrary set forth in any filings of Waddell & Reed Financial, Inc. (the "Company") under the Securities Act of 1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act") that might incorporate future filings by reference, including this Proxy Statement, in whole or in part, the following Compensation Committee Report shall not be incorporated by reference into any such filings, and shall not be deemed soliciting material or filed under the Securities Act or the Exchange Act.

        The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion & Analysis be included in this Proxy Statement.

Waddell & Reed Financial, Inc. Compensation Committee

20172018 Members

Jerry W. Walton, Chairman
Alan W. Kosloff
Michael F. Morrissey
James M. Raines

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COMPENSATION DISCUSSION & ANALYSIS

Introduction

        This Compensation Discussion & Analysis, among other things, provides an overview of our executive compensation program, sets forth the objectives and elements of our executive compensation program, and describes the executive compensation decisions with respect to our named executive officers for 2017,2018, which includes our Chief Executive Officer, our Chief Financial Officer, our Chief Operating Officer (who served as Chief Financial Officer until February 2018), our next three most highly compensated executive officers, including Thomas W. Butch,and Wendy J. Hills, our former Executive Vice President, Chief Legal Officer, General Counsel and Chief Marketing Officer,Secretary, whose employment terminatedended on December 31, 2017.April 17, 2018. Unless the context requires otherwise, references to "executive officers" in this proxy statement means our designated executive officers, including our named executive officers, and references to "current named executive officers" means the named executive officers, excluding Mr. Butch.Ms. Hills.

Executive Summary

        The intellectual capital of our employees is collectively the most important asset of our firm. We invest in people – we hire qualified people, train them, motivate them to give their best thinking to the Company and our clients, and compensate them in a manner designed to motivate and retain them. As an asset manager, our financial results are primarily based upon the strength of our investment performance, the success of our marketing and distribution organization, and careful management of our expenses, all of which are directly dependent upon our people and the intellectual capital they bring to bear.

        We believe that the quality, expertise and commitment of our executive officers are critical to enhancing the long-term value of the Company. To this end, a core objective in designing our executive compensation program is to deliver competitive total direct compensation (i.e., base salary, annual cash incentive award and annual equity incentive award), upon the achievement ofbased on financial and operating performance and individual performance and contributions, that will attract, motivate and retain a high-performance executive team. The compensation awarded to our executive officers is substantially dependent on corporate financial and operating performance, as well as individual performance and contributions, which drives the creation of sustainable long-term stockholder value.

        Although the financial market environment was strong during 2017, theThe operating environment for active asset managers in 2018 remained challenging, as the low-growth, low interest rate environment withflows toward passive strategies remained steady in a high correlation among asset classes continued during most of 2017 resulting in investors continuing to favor passively managed index and exchange-traded funds over actively managed funds. These factors, alongvolatile market that concluded with the uncertainty caused byworst quarter for U.S. equities since 2011. Trade disputes, geopolitical tensions and uncertain global growth rates contributed to the Departmentmarket conditions. The industry continues to feel the impact of Labor's new fiduciary standard, resulted in continued fee pressure, product rationalization on broker-dealer platforms and evolving customer preference.

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        Given these challenges,the challenging industry environment, our senior management team developedcontinued to execute on the following strategic initiatives to help reposition the Company in an industry undergoing significant change:Company: (1) strengthening our investment management resources, processes and results; (2) reinvigorating our product line and sales; (3) continuing the evolution of our broker-dealer to a self-sustaining, competitive and profitable entity; and (4) focusing investment on support of our business model, while improving operating efficiency. See

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"Analysis of 20172018 Compensation" for a summary of the progress made during 20172018 with respect to these strategic initiatives.

        Key financial measures and operational highlights from 20172018 include the following:

•

Earnings per share of $1.69$2.28 compared to $1.90$1.69 in 2016.2017.



•

Net income attributable to the Company of $141.3$183.6 million compared to $156.7$141.3 million in 2016.2017.



•

Operating revenues of $1.2 billion compared to $1.2 billion in 2016.2017.



•

Operating income of $241.2$222.0 million compared to $251.9$219.8 million in 2016.2017.



•

An operating margin of 20.8%19.1% compared to 20.3%19.0% in 2016.2017.



•

Cash and investments at year endyear-end remained strong increasingat $849.1 million compared to $908.3 million from $883.9 million at 2016 year end.2017 year-end. Our liquidity position allowed us to return $189.8$217.1 million to stockholders in 20172018 (compared to $202.6$189.8 million in 2016)2017) through $154.0$81.2 million in regular annual dividends and $35.8$135.9 million in stock repurchases.

        The Compensation Committee (the "Committee") believes that our executive compensation program plays a significant role in our ability to drive financial and operating results and align the interests of our executive officers with the interests of our stockholders. Key aspects of our executive compensation program in 20172018 included the following:

•

A significant portion of each current named executive officer's total direct compensation – approximately 81%77% on average for 20172018 – was "at risk" compensation, delivered in the form of a short-term cash incentive award and a long-term equity incentive award.



•

A significant portion of each current named executive officer's total annual incentive compensation – approximately 79%67% on average for 20172018 – was comprised of an equity incentive award, which drives long-term performance and aligns the interests of our current named executive officers with those of our stockholders.



•

Equity incentive awards were subject to a four-year vesting period to further emphasize long-term performance and commitment to the Company.



•

The Company's Executive Incentive Plan incorporated a financial performance measure that was quantifiable and measurable. For 2017,2018, the Committee utilized one incentive pool, funded with 8% of the Company's adjusted operating income, from which cash and equity incentive compensation was awarded to the current named executive officers.officers that participated in the Executive Incentive Plan.



•

Each current named executive officer is employed at-will and is expected to demonstrate strong personal performance in order to continue serving as a member of the executive team.



•

The Committee maintains stock ownership guidelines which, along with the design of equity incentive awards, promotes long-term executive stock ownership and aligns executive interests with those of our stockholders. As of the date of this Proxy Statement, all of the current named executive officers exceed these ownership guidelines.

        Perquisites do not, and have not, represented a material portion of executive officer compensation. Additionally, the types of perquisites available to executive officers has been significantly reduced over time. See "Analysis of 20172018 Compensation – Personal Benefits and Other Perquisites".

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        Although the Company experienced challenging market conditions during 2018 and assets under management declined, the Company's financial performance in 2017 was down slightly from 2016 performance due to lower average AUM,operating revenues and operating income remained flat and the pace of outflows declined significantly in 2017 and thecontinued to decline. In addition, senior management team worked hardcontinued to develop and begin implementingmake progress on the strategic initiatives described above, which are designed to reposition the Company in today's competitive environment. These factors contributed to stock price appreciation of approximately 15% during 2017 and total shareholder return of approximately

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26%. The components of total direct compensation for each current named executive officer varied based on factors affecting each respective officer, as well as the need to provide total direct compensation that remains competitive in the marketplace.

20172018 Stockholder Vote on Named Executive Officer Compensation

        In April 2017,2018, the compensation paid to our named executive officers in 20162017 was approved by over 95%91% of the votes cast on the proposal. The Committee considered the results of the advisory vote in reviewing our executive compensation program, noting the high level of stockholder support, and elected to continue the same principles in determining the types and amounts of compensation to be paid to our named executive officers in 2017.2018. The Committee will continue to focus on responsible executive compensation practices that attract, motivate and retain high performance executives, reward those executives for the achievement of short-term and long-term performance, and support our other executive compensation objectives, including long-term career development and retention goals.

Compensation Program Objectives

        The Company's executive compensation program is intended to attract and retain highly qualified executive talent, provide rewards for the past year's performance, and provide incentives for future performance to drive the creation of stockholder value. More specifically, our executive compensation program objectives are to:

•

Attract, motivate and retain a high-performance executive team with the appropriate expertise and leadership to build and sustain long-term stockholder value;



•

Incentivize and reward short-term and long-term financial, strategic and individual performance that results in increased value for our stockholders; and



•

Align our executives' long-term interests with those of our stockholders.

        The investment management and financial services industries are extremely competitive and experienced professionals have significant career mobility. Our intellectual capital is our greatest asset. Our success, and that of our stockholders, depends on our ability to successfully engage a highly skilled and experienced executive team through a combination of career opportunities, a challenging work environment, and competitive compensation, particularly during the difficult financial and economic conditions experienced during recent years. Our executive officers have developed over a number of years as a cohesive and complementary executive team and are considered an invaluable resource. Historically, we have sought to groom internal personnel for executive positions or recruited external candidates with a high degree of experience and knowledge of our industry, believing that executives with industry knowledge are more likely to excel. However, this limits the recruiting pool and makes retention a key focus of our compensation program.

        Considering these objectives and factors, the Committee has developed an executive compensation program that continues to be based on the following principles:

•

Compensation levels should be sufficiently competitive to attract, motivate and retain high caliber executives.



•

Appropriate levels of reward for performance should be tied to and vary with the Company's financial and operational performance, as well as individual performance.

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A majority of total compensation should be "at risk" in the form of short-term and long-term incentive awards.



•

Long-term awards should constitute a significant portion of incentive awards to encourage executives to focus on the Company's long-term growth and prospects.




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        Retirement benefits no longer comprise a significant element of executive compensation. Prior to September 30, 2017, employees, including the named executive officers, accrued benefits under the Company's Retirement Income Plan (the "Pension Plan"). Effective September 30, 2017, the Committee froze future benefit accruals under the PensionCompany's Retirement Income Plan (the "Pension Plan"), which was a component of the Company's strategic initiatives to improve financial performance. Although each named executive officer has accrued a vested pension benefit, they stopped earning additional benefits based on service or compensation after September 30, 2017. The Company maintains the 401(k) Plan and matches employee contributions up to 4% of eligible compensation and has the discretion to make additional contributions to eligible participants.participants, subject to applicable non-discrimination requirements.

Elements of Our Compensation Program


        Each element of compensation paid to the Company's executive officers is designed to support one or more of the objectives described above. Total compensation for the executive officers consists of one or more of the following components:

•

Base salary;



•

Annual performance-based incentive awards, including a short-term cash award and long-term equity compensation award;



•

Retirement benefits; and



•

Personal benefits and other perquisites.

How We Determine Compensation


        Each year, the Committee makes compensation decisions using an approach that considers total direct compensation (i.e., base salary, annual cash incentive awards and annual equity incentive awards). Base salary is generally the smallest component of total direct compensation, which results in a significant portion of our executive officers' compensation being paid in "at risk" incentive compensation. At the beginning of each year, the Committee designates certain of our executive officers to participate in our Executive Incentive Plan. For 2017,2018, the named executive officers that participated in the Executive Incentive Plan were Messrs. Sanders, Bloss, SundeenClouse and ButchBloss and Ms. Hills.

        For 2016, the Committee utilized separate pools to awardHill. However, Ms. Hills did not receive incentive compensation pursuant toin 2018, as her employment ended in April 2018. Messrs. Mihal and Buyle and Ms. Scupham did not participate in the Executive Incentive Plan –in 2018. Instead, they were each eligible to receive a discretionary cash incentive pool funded with 6% of adjusted operating income and a restricted stockequity incentive pool funded with 600,000 shares if return on equity exceeded 20%. Prior to setting performance goals for 2017 incentive compensation,award, which were determined by the Committee reviewedin a manner similar to that utilized by the Company's incentive compensation structure with FWC compared toCommittee for the Company's peer group. Based on this analysisExecutive Incentive Plan by factoring in Company financial and upon the recommendation of FWC,operating performance, internal pay equity and individual performance.

        For 2018, the Committee utilized one incentive pool for 2017 incentive compensation,under the Executive Incentive Plan, funded with 8% of adjusted operating income for cash and restricted stock awards to be determined at the discretion of the Committee. Utilizing one pool for cash and equity incentive compensation is consistent with the Company's peer group and provides the Committee the flexibility to award cash and equity incentive compensation in the proportions that it determines is most appropriate for each executive officer.




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        The maximum incentive award each executive officer who participated in the Executive Incentive Plan is eligible to receive is calculated as the individual percentage of the incentive pool allocated to the executive officer by the Committee. Upon calculating the maximum incentive award each executive officer is eligible to receive pursuant to the Executive Incentive Plan, the Committee may exercise its negative




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discretion, as it did in 2017,2018, to pay actual incentive amounts that are less than the maximum amount. In determining total direct compensation, the Committee reviews and considers one or more of the following:

•

The Company's financial and operational performance for the year;



•

Market survey information for comparable public and private asset managers;



•

Recommendations of the Company's Chief Executive Officer, based on individual performance and contributions;contributions and internal pay equity;



•

The previous year's compensation levels for each executive officer; and



•

Overall effectiveness of the executive compensation program.

        The Committee may also consider, as applicable, levels of sustained past performance, performance potential, retention risk and the value of the particular compensation element needed to keep an executive's level of total direct compensation competitive and consistent with our executive compensation program's objectives. Although there is no formal policy regarding the relationship of compensation among the executive officers, the Committee also considers the appropriateness of each executive officer's compensation relative to the other executive officers to reflect differences in the scope of authority and responsibilities among executive officers. The actual cash and equity incentive award paid to each executive officer is determined in the Committee's subjective judgment and discretion, based upon the above factors, and its assessment of such compensation's fairness and adequacy in achieving the objectives of our executive compensation program. This approach enables the Committee to be responsive to the dynamics of the labor market, including the need to retain and motivate a particular executive, and provides the Committee with flexibility to compensate our executive officers in a way that reflects the influence and contributions of each executive individually to overall corporate performance and reinforces our pay-for-performance culture. See "Base Salary" and "Annual Performance-Based Incentive Awards" below for further information on base salaries and the methodology under which annual incentive awards are calculated.

        In 2018, senior management engaged a compensation consultant (the "Non-executive Compensation Consultant") to review 2019 incentive plan design for eligible non-executive officers and employees that do not participate in a business unit specific incentive plan. Although executive officer positions were not the focus of its engagement, the Non-executive Compensation Consultant included, for informational purposes, executive officer compensation data consistent with the proposed incentive compensation structure for non-executive officer positions. The Committee asked FWC to review the executive officer compensation information included in the Non-executive Compensation Consultant's recommendations to determine if any changes should be made to the plan design for 2019 executive officer incentive compensation in order to align incentive plan design throughout the Company. See "Compensation Consultant" below regarding FWC's review and assessment of the design of 2019 incentive compensation for executive officers.

        The Company's goals for this project included providing market competitive incentive opportunities to eligible non-executive officers and employees with a slight emphasis on long-term incentive compensation for the target pay mix. The Non-executive Compensation Consultant gathered compensation data from 10 public company asset management companies, five of which are also included in the peer group used by the Committee in connection with executive officer compensation decisions. The selection of these companies was based upon market capitalization, with all 10 companies having market capitalization between $700 million and $3 billion. The Non-executive Compensation Consultant also used McLagan and other compensation survey information, as appropriate, for the project.




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        Senior management determined to move forward with the Non-executive Compensation Consultant's recommendations, as described below, for the 2019 incentive plan design for eligible non-executive officers and employees that do not participate in a business unit specific incentive plan and the new program was communicated to eligible participants in the first quarter of 2019.

•

Shifting a portion of equity incentive compensation to cash incentive compensation, while maintaining a slight emphasis on long-term incentives, to better align the Company's pay mix with the market;



•

Implementing target long-term and short-term incentive opportunities as a percentage of base salary for the different levels throughout the organization (e.g., SVP, VP, director and manager); and



•

Moving to a more structured discretionary approach to better align incentive awards with performance. With this approach, funding for incentive compensation would take into account certain pre-established business unit metrics, including adjusted operating income and net consolidated AUM flows, as well as progress on strategic objectives

Compensation Consultant

        The Committee has the authority to engage independent advisors to assist it in carrying out its responsibilities. For 2017,2018, the Committee engaged FWC to (1) review and assess competitive compensation information regarding total direct compensation and individual pay components for the Company's named executive officers compared to the Company's peer group, (2) review the Company's incentive compensation pool structure compared to the Company's peer group, and (3) review and assess competitive compensation information for the Company's Outside Directors.Directors and (3) review and assess proposed changes to the design of 2019 incentive compensation for executive officers and the peer group used to assess 2019 executive officer compensation. FWC did not provide any other additional services to the Company or management, meet with any members of management individually, or receive any payments from the Company, other than in its capacity as a consultant to the Committee in 2017.2018. FWC has served as the Committee's compensation consultant since 2004. At the Committee's request, FWC provided the Committee with information regarding its independence pursuant to SEC and NYSE disclosure requirements regarding the independence of compensation consultants. This information, which addressed each of the six independence factors, affirmed the independence of FWC and the partners, consultants and employees who service the Committee on executive compensation issues.

        As described above, the Committee asked FWC to review the materials prepared by the Non-executive Compensation Consultant in connection with their engagement regarding 2019 incentive plan design for eligible non-executive officers and employees that do not participate in a business unit specific incentive plan, with particular emphasis on the executive officer compensation data, to determine if FWC believed any changes should be made to the design of 2019 executive officer incentive compensation. The Committee also asked FWC to determine if the peer group used by the Non-executive Compensation Consultant would be an appropriate peer group for the Committee to use in connection with 2019 executive officer compensation decisions. See "Peer Group Analysis" below.

        Based on its review and analysis, FWC determined that it would be appropriate to apply the Non-executive Compensation Consultant's recommendations for 2019 incentive plan design to the Company's executive officers, as the recommendations reflect a blend of market practices that are tailored to the Company and would align the executive officers' incentive compensation with eligible non-executive officers and employees that do not participate in a business unit specific incentive plan. In February 2019, the Committee approved the continued funding of executive officer equity and cash incentive compensation from an incentive pool based on a percentage of the Company's adjusted operating income, while also taking into consideration the incentive plan design elements the Non-executive Compensation Consultant recommended for non-executive officers as described above.




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Peer Group Analysis

        In making executive compensation decisions, the Committee evaluates its executive compensation program against a broad group of companies in the investment management and financial services industries representative of companies against which the Company competes for executive talent. In 2017, theThe Committee, undertook, with the assistance of FWC, a review of the composition of our compensation peer group and determined that no changes were necessary.necessary to the Company's compensation peer group in connection with decisions related to 2018 executive compensation. With the assistance of FWC, the Committee compared the Company's executive compensation program in 20172018 against this peer group, which consists of:

• Affiliated Managers Group,  Inc.		• Franklin Resources,  Inc.
• AllianceBernstein Holding L.P.		• GAMCO Investors,  Inc.
• Artisan Partners Asset Management Inc.		• Janus Henderson Group Plc
• Eaton Vance Corp.		• Legg Mason,  Inc.
• Federated Investors,  Inc.		• T. Rowe Price Group,  Inc.

        The Committee believes that the Company competes for market share, shelf space, mutual fund shareholders and institutional clients, executive talent and employees with each of these 10 publicly traded asset managers. Additionally, this peer group comprises 10 of the 41 companies in the SNL Asset Manager Index, a composite of publicly traded asset management companies used by SNL Financial for comparison purposes in preparing the Company's stock performance graph. The peer group does not include the 30 additional companies comprising the SNL Asset Manager Index due to their size, business orientation and/or status as a foreign corporation.

        The Committee reviews compensation information of the peer group compared to that of the Company based on both the 1^st through 5^th most highly paid officer positions, and information comparing titled officer positions, if available. In evaluating competitive compensation information of the peer group, the Committee does not target our executives' compensation to be paid at a specific percentile or limit its overall evaluation of competitive compensation to a particular percentile, but does take into consideration, on a non-formulaic basis, various differences between the Company and the comparison companies, including measures such as market capitalization, number of employees, assets under management, revenues, income and profitability (income per $1 billion of assets under management).

        The Committee also reviews competitive compensation information obtained from the McLagan Survey, which provides detailed analyses of compensation for a greater depth of investment management employees than is available for our public peers and is specifically focused on the asset management industry. Confidentiality obligations to McLagan Partners and to its survey participants prevent us from disclosing the firms included in the McLagan Survey. In addition, the McLagan Survey maintains the confidentiality of individual company pay practices from other participants. The Committee reviewed the results of the McLagan Survey to account for differences in the scale and scope of operations of participant companies, to evaluate the overall competitive position of the Company, as well as its position by business unit and by officer title, and to make comparisons on an officer by officer basis, where sufficient market data was available and an appropriate match of position and responsibilities could be made.

        The Committee considers the compensation information derived from the peer group and the McLagan Survey equally relevant and important, with neither source of information being a determining factor in setting executive compensation levels.

        As described above, the Committee asked FWC to determine if the peer group used by the Non-executive Compensation Consultant would be an appropriate peer group for the Committee to use in connection with 2019 executive officer compensation decisions. Based on its review and analysis, FWC determined that the peer group used by the Non-executive Compensation Consultant would be an




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appropriate peer group for the Committee to use, as it reflects a set of peers that are more closely aligned with the Company in terms of market capitalization with overlap in the existing peer group used by the Committee. In February 2019, the Committee approved the following peer group to be used for 2019 executive officer compensation decisions:

• AllianceBernstein Holding L.P.		• GAMCO Investors,  Inc.
• Artisan Partners Asset Management Inc.		• Legg Mason,  Inc.
• BrightSphere Investment Group plc		• Victory Capital Holdings,  Inc.
• Cohen & Steers,  Inc.		• Virtus Investment Partners, Inc.
• Federated Investors,  Inc.		• WisdomTree Investments,  Inc.

Management's Role in the Compensation Setting Process and Other Considerations

        Our Chief Executive Officer regularly attends Committee meetings and advises the Committee regarding, among other things, the design and effectiveness of the Company's performance measures, the general competitiveness of our compensation program, information on the Company's business strategies and objectives, financial results and other measures of corporate performance, and historical context regarding the link between the Company's strategic goals and various elements of compensation. The Committee also requests that the Chief Executive Officer evaluate the performance of the executive officers who report directly to him and to make recommendations to the Committee regarding their base salary levels and the form and amount of their annual cash incentive award and equity incentive award. In 2017,2018, Mr. Sanders evaluated the performance of the other executive officers; Mr. Sanders did not make a recommendation with respect to his own base salary or his performance-based incentive awards.

        Mr. Sanders' recommendations are based on his subjective evaluations regarding the individual performance and contributions of each of the other executive officers in furthering the Company's success, building stockholder value and executing individual responsibilities, which may include:

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Individual performance and contributions to financial and operational measures;



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Operational management, such as project milestones and process improvements;



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Internal working and reporting relationships that promote collaboration and teamwork;



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Leadership, including the ability to develop and motivate employees and personal development; and



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Individual expertise, skills and knowledge relevant to each executive's position and responsibilities, the potential to assume increased responsibilities, and long-term value to the Company.

        In making his recommendations for the mix of equity and cash incentive compensation for the other executive officers in 2018, Mr. Sanders considered the Non-executive Compensation Consultant's recommendations for pay mix based on market data.

With respect to Mr. Sanders' position and responsibilities, the Committee considers his company-wide oversight and management, execution and success of the Company's business and strategic initiatives, the Company's financial and operating results, the creation of stockholder value, leadership of the investment management process, his years of industry experience, the size and complexity of the Company's business, and effective leadership of the Company's management team.

        The Committee does not assign individual weight or particular emphasis to any of the above factors; the emphasis placed on any specific factor or individual contribution may vary by executive officer.




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        Our Chief Financial Officer regularly attends Committee meetings and advises the Committee as necessary regarding the Company's financial results or accounting rules that are relevant to incentive compensation or other matters that come before the Committee, and provides the Committee with historical and prospective compensation information relevant to their determinations. Additionally, our Chief Legal Officer, General Counsel and Secretary regularly attends Committee meetings and provides advice regarding legal and corporate governance matters, details regarding our stock award and incentive compensation plans, and other requested information related to Committee discussions.

Analysis of 20172018 Compensation


        The Committee's focus is to set competitive pay levels on an annual basis, and to ensure a significant portion of compensation is performance-based. Consistent with the philosophy that a majority of total direct compensation should be "at risk," the current named executive officers received, on average, approximately 19%23% of their total direct compensation for 20172018 in base salary and approximately 81%77% in variable incentive compensation (based on the grant date fair value of 2017 equity incentive awards)awards with respect to 2018 performance). The analysis above excludes Mr. Butch,Ms. Hills, as heshe did not receive equity incentive compensation for 2017 due to the termination of his2018, as her employment ended on December 31, 2017.




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20172018 Operating Environment

        Although the financial market environment was strong during 2017, theThe operating environment for active asset managers in 2018 remained challenging, as the low-growth, low interest rate environment withflows toward passive strategies remained steady in a high correlation among asset classes continued during most of 2017, resulting in investors continuing to favor passively managed index and exchange-traded funds over actively managed funds. These factors, alongvolatile market that concluded with the uncertainty caused byworst quarter for U.S. equities since 2011. Trade disputes, geopolitical tensions and uncertain global growth rates contributed to the Departmentmarket conditions. The industry continues to feel the impact of Labor's new fiduciary standard, resulted in continued fee pressure, product rationalization on broker-dealer platforms and evolving customer preference.

        Given these challenges,the challenging industry environment, our senior management team developedcontinued to execute on the following strategic initiatives to help reposition the Company in an industry undergoing significant change:Company: (1) strengthening our investment management resources, processes and results; (2) reinvigorating our product line and sales; (3) continuing the evolution of our broker-dealer to a self-sustaining, competitive and profitable entity; and (4) focusing investment on support of our business model, while improving operating efficiency. Following is a summary of the progress we made on these strategic initiatives during 2017:2018:

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Moved more fully to team-based portfolio management for manyCompleted targeted pricing adjustments on selected funds and completed the merger of our funds to balance the management, process execution and succession planning for those funds.



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Fortified the investment management research team with six additional analysts and implemented a central data collaboration warehouse to capture and leverage our intellectual capital.



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Implemented a client relationship management tool to facilitate the aggregation of sales data and targeted sales initiatives.



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Merged theremaining Waddell & Reed Advisors Funds into the Ivy Funds family, resulting in operational efficiency and added fund-level scale. The initial round of fund mergers occurred in October 2017 with the final round of mergers closing in February 2018.



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Realigned field resources under a new market structure model to facilitate local management accountability and enhance collaboration.



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Continued to add analyst resources, realign certain portfolio management teams and implement significant enhancements to our investment advisory programstechnology that facilitates information sharing and financial planning capabilities, referred to as "Project E", including the launch of MAP Navigator, an open architecture advisory program.collaboration across teams.



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Further developed and implemented measures designedContinued to comply with the Department of Labor's new fiduciary standard.enhance data capabilities to inform targeted sales strategies across all sales channels.



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EstablishedContinued to expand advisory product lineup, including the addition of a project management organization to drive transparencythird-party program that offers both ETFs and accountability and to ensure the right focus of our resources through enterprise-wide prioritization.mutual funds with multiple portfolio options



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Created aReduced the broker-dealer real estate footprint to align more flexible capital return policy that is designedclosely with an industry-standard independent model, while enhancing the payout grid for affiliated advisors to allow us to invest inbe among the business, support ongoing operations and maintain a strong balance sheet, while providing a competitive return to stockholders through quarterly dividends and share repurchases, including up to $250 million of share repurchases through 2019.industry's best-in-class.



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Announced aRealigned the broker-dealer field services model to deliver more robust practice development resources, while expanding recruiting and creating an elite service group for top advisors.



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Reduced the pace of advisor attrition, while increasing overall advisor productivity.



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Achieved our goal to addof adding $30 to 40 million, on a 2019 run-rate basis, to pre-tax income from implementationthrough targeted cost reductions, while making targeted investments in growth areas.




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Instituted enhanced efficiency and accountability through an enterprise project management organization, with a focus on the strategic initiativesdeliberate allocation of our resources.



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Advanced our culture by 2019, of which approximately $20 million was achievedfocusing on our core values and further investing in our people through the end of 2017.talent management, employee experiences, diversity and inclusion and total rewards.

        We continue to work hard to ensure our firm's ability to compete, succeed and – most important – serve investors well across the many different market cycles and business challenges that companies in our business inevitably face.




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Base Salary

        We provide our executive officers with a base level of monthly income for the expertise, skills, knowledge and experience they offer to our management team. Base salaries are reviewed annually by the Committee.

        The Committee reviewed the base salary of each named executive officerMessrs. Sanders, Clouse and Bloss for 20172018 and, based on Mr. Sander'sSanders' recommendations in December 2016,2017, Messrs. BlossClouse and Sundeen and Ms. HillsBloss received a base salary increase for 20172018 in recognition of their promotions to Chief Operating Officer and Chief Financial Officer, respectively. Mr. Sanders did not receive a base salary adjustment for 2018. The Committee did not review the base salary of Messrs. Mihal or Buyle or Ms. Scupham for 2018, as each of their respective base salaries for 2018 was determined prior to their designation as an executive officer. However, their respective base salaries for 2018 were established based on market data, their responsibilities and experience, and internal pay equity among the executive officers. The base salary for eachother members of Messrs. Sanders and Butch remained flat at 2016 levels.senior management.

        For a further description of the base salaries paid to the named executive officers in 2017,2018, please refer to the Summary Compensation Table below.

Annual Performance-Based Incentive Awards

        Certain executive officers are eligible to receive annual performance-based incentive awards underpursuant to the Executive Incentive Plan. These incentive awards, granted in cash and restricted stock from an incentive pool, provide an incentive for annual performance in building stockholder value, align our executives' interests with that of our stockholders, and encourage retention and a long-term commitment to the Company, all of which are reinforced by the vesting provisions of our equity incentive awards. The size of the incentive pool is determined upon the achievement of a pre-established performance goal that is set by the Committee in the first quarter of each year.

        The Committee has discretion to designate the executive officers of the Company that are eligible to receive such incentive awards, as well as to set the percentage of the incentive pool each participant is entitled to earn upon achievement of the performance goal, as discussed below. For 2017,2018, Messrs. Sanders, Bloss, SundeenClouse and ButchBloss and Ms. Hills were the named executive officers that participated in the Executive Incentive Plan. Notwithstanding the foregoing, the Committee may, in its discretion, award compensation that is not contingent upon the achievement of performance goals or reduce or eliminate entirely the amount of incentive awards payable to any participant upon attainment of the performance goals, but any such reduction may not increase the awards of another participant. InMs. Hills did not receive any incentive compensation in 2018, as her employment ended in April 2018.

        Executive officers that do not participate in the eventExecutive Incentive Plan are eligible to receive an annual cash incentive award pursuant to the Committee awards compensation that isCompany's management bonus program and an award of restricted stock pursuant to the Company's Stock Incentive Plan. Although the cash incentive and restricted stock award opportunity are not contingent upondetermined by the achievementsatisfaction of pre-established performance goals, the award may not be deductible byCommittee determines awards for executive officers under the management bonus program and the Stock Incentive Plan taking into account Company financial and operating performance, individual performance and internal pay equity. In 2018, Messrs. Mihal and Buyle and Ms. Scupham received cash and equity incentive awards under IRC Section 162(m). See the "Tax Considerations" section below for a discussion regardingmanagement bonus program and the impactStock Incentive Plan.




Table of amendments to IRC Section 162(m) on the deductibility of executive compensation beginning in 2018.Contents

        Determination of Incentive Compensation Pool.    Since 2003, performance-based incentive awards have been based on incentive pool formulas established underpursuant to the Executive Incentive Plan. Prior to 2017, the Committee utilized a cash incentive pool funded with a percentage of adjusted operating income and restricted stock pool funded with a set number of shares of the Company's Class A common stock based on an adjusted return on equity percentage threshold. As described in "How We Determine Compensation" above, for 2017,2018, the Committee elected to utilize a single incentive pool funded with a percentage of adjusted operating income from which cash and restricted stock would be awarded at the discretion of the Committee. TheIn February 2018, the Committee approved the 2017 incentive pool and participants in the Executive Incentive Plan in March 2017 for the 20172018 performance period.

        For 2017,2018, the size of the incentive pool available for cash and restricted stock incentive awards was based upon 8% of the Company's 20172018 "adjusted operating income," defined as net income (1) increased by interest expense; federal, state and local income taxes; executive cash incentive awards; extraordinary or non-recurring losses ($1.51.2 million comprised of intangible impairment charges); and losses from publicly-disclosed acquisitions in 20172018 (of which there were none) and (2) decreased by extraordinary or non-recurring gains ($21.517.8 million related to a change to mark-to-market accounting forthe revaluation of the Pension Plan)Plan liability) and gains from publicly-disclosed acquisitions (of which there were none), for a total of $18,893,200.




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        Operating income is used by the Company and investors as a measure of the Company's underlying profitability and fluctuates with the Company's performance, which in turn creates an incentive pool that moves with the Company's performance. It is adjusted in order to provide a measure of performance that reflects the influence and contributions of each participating executive on a relatively equal basis and excludes items that, for example, may be disproportionately influenced by the business decisions of one executive more than others, or that are not indicative of our business and economic trends. This results in a measure of our executive officers' management of the Company's operating business as a whole. In setting the discretionary 8% threshold, the Committee considered industry practice, recommendations of FWC regarding the performance measure, the number of executive officers participating in the Executive Incentive Plan, historicalprojected operating results, the need to have the ability to reward extraordinary performance, when and if achieved, and incentive awards granted in prior years.

        Percentage Allocations.    The maximum percentage of the incentive pool that each participating executive is eligible to receive is based on the Committee's subjective judgment and primarily determined relative to each individual's scope of authority and complexity of responsibilities. The Committee also takes into consideration internal equity within the incentive compensation structures and the overall compensation structure of individual positions.

        The Company's Chief Executive Officer has comprehensive oversight and management responsibilities across the entire organization and is held primarily responsible for the Company's financial results. In addition, Mr. Sanders continues to oversee the investment management division, as Chief Investment Officer. The investment management division and our distribution organization, which Mr. Butch oversaw for most of 2017, represent the two business units with the most influence on our success and the creation of stockholder value. Therefore, the incentive compensation of Messrs. Sanders and Butch has been more variable from year to year compared to the incentive compensation of the other named executive officers based on the financial and operating performance of the investment management division and distribution organization, respectively.

For 2017,2018, the Committee designated Messrs. Sanders, Bloss, SundeenClouse and ButchBloss and Ms. Hills eligible to earn 30%, 18%17%, 15%, 22%24% and 15%17%, respectively, of the incentive pool, consistent with the philosophy that individuals with greater roles and the ability to directly impact the Company's performance goals and long-term results should bear a greater proportion of the risk if our performance measures are not achieved. These percentage allocations were established in the first quarter of 2017.2018.

        Use of Negative Discretion.    Pursuant to IRC Section 162(m) and the Executive Incentive Plan, the Committee may exercise its discretion to pay actual incentive amounts that are less than the maximum amounts that the executive officers are eligible to receive upon the achievement of the objective pre-established performance goal determined by the Committee. The incentive compensation award that each executive officer is eligible to receive, calculated as the percentage of the incentive pool assigned to each executive officer, is not an expectation of actual incentive compensation amounts that will be paid to the executive officers, but a cap on the range of compensation ($0 to the maximum amount) that an individual may be paid while maintaining the tax deductibility of the incentive compensation in 2017 as "performance-based" compensation for purposes of IRC Section 162(m).2018. The maximum incentive award amount may be awarded under extraordinary circumstances or for extraordinary performance, although the Committee more often determines incentive awards that are less than the maximum amount the executive officer is eligible to earn. This provides the Committee with the flexibility to compensate executives for truly exceptional performance without paying more than is necessary to incentivize and retain our executive officers. The Committee believes that this incentive compensation structure is in the best interests of stockholders because it enables the most prudent use of Company assets




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by maximizing the deductibility of performance-based compensation while empowering the Committee to pay only those amounts it determines are necessary to appropriately compensate executives. Although the deductibility of executive compensation may beis more limited beginning in 2018 due to amendments to IRC Section 162(m), the Committee still believes thisdid not make any changes to the Company's executive officer incentive compensation structure is in the best interests of stockholders.




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        20172018 Cash and Equity Incentive Awards.    In determining 20172018 cash and equity incentive awards, the Committee considered the Company's financial and operating performance forin light of the year, includingchallenging industry environment during 2018, the development and execution of the strategic initiatives described above, and Mr. Sanders' recommendations based on his assessment of the other named executive officers' individual performance and contributions.

        Based on a review of market data and the recommendation of Mr. Sanders, the Committee adjusted the mix of incentive compensation paid to executive officers by shifting a portion of the executive officers' incentive awards from equity awards to cash. After this adjustment, on average, the Company still paid a higher percentage of incentive compensation in the form of equity awards than its peer companies.

        The Committee determined the level of incentive compensation to award to Mr. Sanders based on his service as Chief Executive Officer and Chief Investment Officer. The Committee increased Mr. Sanders' cash incentive award from $500,000 in 2016 to $600,000 in 2017 to $750,000 in 2018 and provided approximately 84%reduced his equity incentive award by $150,000, as described below. Approximately 80% of hisMr. Sanders' incentive compensation inand approximately 67% of Mr. Sanders' total direct compensation was paid the form of restricted stock to tie a significant portion of his compensation to the long-term performance of the Company and align his interest with our stockholders. Overall, Mr. Sanders' cash compensation decreased by approximately $100,000 in 2017 compared to 2016, as Mr. Sanders received revenue sharing payments in the first half of 2016 related to his portfolio manager duties prior to his appointment as Chief Executive Officer.

        The Committee accepted Mr. Sanders' recommendations with respect to 20172018 cash incentive awards for the other current named executive officers, and awarded Messrs. Clouse, Bloss, SundeenMihal and ButchBuyle and Ms. HillsScupham awards of $450,000, $365,000, $425,000$375,000, $600,000, $375,000, $300,000 and $375,000,$350,000, respectively. TheThese cash incentive awards for Messrs. Bloss and Sundeen and Ms. Hills increased by approximately 4-7% compared to 2016, which was driven primarily due to the significant effortrepresented between 29-40% of each of them contributed to the development and execution of the strategic initiatives described above, and to align their cash incentive awards with those of the other named executive officers. The cashofficers' (other than Mr. Sanders) total incentive awardcompensation for Mr. Butch remained flat in 2017.2018. The Committee believed that these cash incentive award amounts were appropriate based on Company financial and operating performance and individual performance and contributions as described below. Ms. Hills did not receive cash incentive award for 2018, as her employment ended in April 2018.

        The Committee awarded Mr. Sanders $3,125,000$2,975,000 in shares of restricted stock and accepted Mr. Sanders' recommendations with respect to equity incentive awards for the other named executive officers, awarding Messrs. Clouse, Bloss, Mihal and awarded Messrs. Bloss and SundeenBuyle and Ms. Hills $1,650,000, $1,085,000Scupham $700,000, $1,500,000, $650,000, $450,000 and $1,240,000$650,000 in shares of restricted stock, respectively, pursuant to the Executive Incentive Plan.for 2018 performance. These equity incentive awards represented between 60-71% of total 2018 incentive compensation for each named executive officer (other than Mr. Sanders). The number of shares of restricted stock granted to each current named executive officer was determined by dividing the dollar value of the award by the closing market price of the Company's Class A common stock on the last business day immediately preceding the grant date and rounding the shares up to the nearest whole share. Mr. Butch did not receive a grant of restricted stock due to the termination of his employment on December 31, 2017. The Committee believes that equity incentive awards must be sufficient in size to provide a strong, long-term performance and retention incentive for executives, and to increase their vested interest in the Company.

        The value of the equity incentive award for each of Messrs. Sanders and Bloss increased by approximately 12% compared to 2016 due to the desire by the Committee to tie a greater portion of their incentive compensation to the long-term performance of the Company. The value of Mr. Bloss' equity award also increased compared to 2016 based on his increased operational responsibilities and internal pay equity among the named executive officers. The value of the 2017 equity incentive award for each of Mr. Sundeen and Ms. Hills was flat compared to 2016.did not receive a grant of restricted stock in 2018, as her employment ended in April 2018.

        These equityEquity incentive awards for 2018 were granted on December 31, 20172018 and vest in 25% increments annually, beginning on the first anniversary of the grant date. For a further description of the restricted stock granted to the current named executive officers in 2017,for 2018 performance, please refer to the Grants of Plan-Based Awards Table below. The Committee believed that these equity incentive awards were appropriate due to Company financial and operating performance and individual performance and contributions, as well as to further align the interests of the current named executive officers with the Company's stockholders.




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        Total incentive compensation for Messrs. Sanders and Bloss remained flat compared to 2017 in recognition of the Company's progress related to its strategic initiatives in light of the challenging industry environment. The value of incentive compensation for Messrs. Clouse, Mihal and Buyle and Ms. Scupham increased compared to 2017 based on their increased operational responsibilities and internal pay equity among the named executive officers.

        The 20172018 annual incentive compensation awards described above reflect the Committee's determination to (1) award incentive compensation in light of the Company's 2017 financial and operational performance, including the development andbased on execution of the strategic initiatives described above in light of the Company's 2018 financial and operational performance in a challenging industry environment, balanced with the need to provide total direct compensation that remains competitive in the marketplace and (2) reflect, as appropriate, differences in the named executive officers' scope of authority and responsibilities, the assumption of additional responsibilities, and an appropriate balance of total direct compensation between cash and equity.




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        Mr. Sanders discussed with the Committee the following individual performance considerations that impacted his award recommendations for 2017:2018:

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Mr. BlossClouse:  Mr. Bloss directedClouse directs the finance divisionorganization and oversawoversees all financial matters for the Company, including financial performance, treasury management, strategic planning, budgeting and investor relations. He was alsoinstrumental in developing and leading the enterprise project management organization, which is responsible for Human Resources, Procurement, Facilities, Information Technologydriving targeted allocation and Investment Management Operations. In addition,efficient utilization of corporate resources to accomplish the Company's strategic initiatives. Along with Mr. Bloss, continued to lead our process to implement changes to our business processes due to the Department of Labor's new fiduciary standard. Mr. Bloss isClouse was also instrumental in achieving the evolution of our broker-dealer to a self-sustaining, fully competitive and profitable entity and in developing theCompany's goal of adding $30 to 40 million, on a 2019 run-rate basis, to pre-tax income by 2019, of which approximately $20 million was achieved through the end of 2017. Mr. Bloss oversaw the renewal of our unsecured credit facility in October 2017 andincome. In addition, he administered the Company's capital management initiatives during the year, including the return of $189.8$217 million to shareholdersstockholders through a combination of stock repurchases and regular dividends, resulting in a payout ratio of 109%119% for the fiscal year. He was also responsible, along with Mr. Sanders, for developing the Company's revised capital return policy that was announced in October 2017.



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Mr. Bloss:  Mr. Bloss directed the finance organization until Mr. Clouse's appointment as Chief Financial Officer in February 2018. He has oversight responsibilities for all operations of the Company and is directly responsible for the Broker-Dealer business, Transfer Agency, Human Resources, Procurement, Facilities, Marketing, Information Technology and Investment Management Operations. Mr. Bloss has been influential in the continued development of the Company's information technology group, including the hiring of a new Chief Technology Officer in 2018. Along with Mr. Mihal, he has been instrumental in the evolution of our broker-dealer, Waddell & Reed, Inc. ("WRI"), to a self-sustaining, fully competitive and profitable entity and, along with Mr. Clouse, was instrumental in achieving the goal of adding $30 million, on a 2019 run-rate basis, to pre-tax income. He has also been influential in the development of a strategic Human Resources function that has advanced the Company's culture through a focus on core values. This effort has resulted in additional investment in our people through areas such as talent management, employee experiences, diversity and inclusion and total rewards.



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Mr. Mihal:  Mr. Mihal leads the Company's Broker-Dealer business, WRI. Along with Mr. Bloss, he has been instrumental in the evolution of WRI to a self-sustaining, fully competitive and profitable entity. Mr. Mihal has been key in the realignment of field structure and resources, as well as the reduction of the field office real estate footprint. He has also led initiatives to improve the experience of the independent financial advisors associated with WRI, including improving technology that the advisors use to service clients and developing new advisory programs. For example, Mr. Mihal has advanced WRI's technology initiatives through a new Business Administration Program, which is designed to more seamlessly connect WRI's core data and systems to provide advisors with streamlined access to the tools they use to support clients as well as access to data to proactively help advisors run and manage their independent business practices. He was also instrumental in the development and roll out of the revised advisor compensation model.




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Ms. HillsScupham:  Ms. HillsScupham leads the Company's wholesale and institutional distribution efforts, sales and product development, as well as managing strategic relationships. She has been instrumental in re-shaping the Company's sales infrastructure and use of data analytics to allow for a more focused and targeted approach to distribution. In addition, she has focused on improved sales talent with a new Intermediary Sales Leader and was instrumental in revamping the distribution team's incentive compensation plans. Ms. Scupham has also been working to improve the competitive profile of the Ivy Investments product set, working closely with Mr. Sanders on fund consolidation and product pricing initiatives.



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Mr. Buyle:  Buyle directs the Company's legal, compliance and complianceinternal audit functions, coordinates the work performed by inside and outside counsel and represents the Company, as Chief Legal Officer and General Counsel, with external agencies and regulators. SheHe is responsible for the proactive identification and management of legal, compliance and business risks, management of the Company's regulatory and legal matters and related expenses, and the provision of sound legal advice to the Company's Board of Directors and its committees, Company management, and the boards of trustees of the Company's affiliated mutual fund companies. In 2017, Ms. HillsUpon assuming his role in 2018, Mr. Buyle demonstrated strong leadership and advocacy at all levels of the Company, particularly within the legal and compliance divisions, in effectively managing the Company's regulatory and legal matters, including legal expenses. Additionally, she continueshe has contributed to be instrumental in our process to implementof implementing changes to our business processes due toin connection with the Department of Labor's new fiduciary standard. Ms. Hills was also significantly involved in developing and executing our strategic initiatives, including the evolution of our broker-dealer and the analyses of legal and business risks related to that process. In November 2017, Ms. Hills assumed administrative reporting responsibility for the Company's Internal Audit function.



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Mr. Sundeen:  Mr. Sundeen has day-to-day management and oversight responsibility over administrative and operational aspects of our investment management subsidiaries, including strategic analysis and setting of investment practices, policies and procedures. In this role, he oversees our subadvisory relationships and leads the Section 15(c) process in which the Board of Trustees for each of our affiliated mutual funds must annually review and approve its investment management agreements. Mr. Sundeen also oversees investment operations and accounting, which has responsibility for all mutual funds and institutional accounts. Related to these roles, Mr. Sundeen is central to analyzing the pricingexecution of the Company's investment products, including investment management fees and other fund expenses. Mr. Sundeen plays a primary role in developing, restructuring and implementing products, of which there were many in 2017, including the conversion of the Waddell & Reed Advisors Asset Strategy fund into the Waddell & Reed Advisors Wilshire Global Allocation fund in partnership with Wilshire Associates, Inc. Mr. Sundeen was also instrumental in the merger of Waddell & Reed Advisor Funds into Ivy Funds in October 2017 and February 2018.




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Mr. Butch:  Mr. Butch was responsible for the Company's distribution strategies and initiatives for the Retail Unaffiliated, Retail Broker-Dealer and Institutional channels, including sales, marketing, product development, and management of the Company's broker/dealer subsidiaries and their strategic relationships with key business partners through November 2017. The Company's continuing focus on product sale diversification efforts resulted in 18 strategies with more than $1 billion in total assets and 10 strategies with more than $500 million in total assets by year end. In the Advisors channel, the redemption rate of 16.1% in 2017 remained significantly below industry standard levels. In addition, Mr. Butch was instrumental in the introduction of new products during 2017, including the launch of the Ivy IG International Small Cap Fund, the Ivy Crossover Credit Fund, five index funds in partnership with ProShares Advisors LLC, the Ivy PineBridge High Yield Fund, MAP Navigator and the retooled SPA program, in partnership with Wilshire Associates, Inc. Finally, Mr. Butch oversaw progress regarding the implementation of Project E to modernize the operating and product framework within the Retail Broker-Dealer channel and the restructuring of the broker-dealer field organization.initiatives.

        The Committee believes that the levels of cash and equity incentive compensation awarded to the named executive officers in 20172018 appropriately reflect corporate performance and individual contributions and maintain a high level of incentive for retention and future performance, which is consistent with the Company's executive compensation objectives. This determination is guided by a basic formulaic process, but also involves the exercise of discretion and subjective judgment by the Committee taking into account the above referenced information. For a further description of the incentive awards paid to each of the named executive officers in 2017,2018, please refer to the Summary Compensation Table below.

Retirement Benefits

        We provide retirement benefits to all of our employees, including the named executive officers, through the Pension Plan and the 401(k) Plan. Historically, these plans were designed in combination to provide an appropriate level of replacement income upon retirement. Future benefit accruals under the Pension Plan were frozen, effective September 30, 2017, in connection with the Company's strategic initiative to add $30 to 40 million, on a run-rate basis, to pre-tax income by 2019. For a description of material provisions of the Pension Plan, please refer to "Pension Benefits" below.

        In 2017,2018, the Company made matching contributions and discretionary contributions to the account of all eligible participants in the 401(k) Plan, including the named executive officers. For a description of material provisions of the Pension Plan, please refer to "Pension Benefits" below.

Personal Benefits and Other Perquisites

        The Company's employees are eligible to participate in the Company's active employee flexible benefits plans, which include medical, vision, life insurance and long-term disability coverage and are generally available to all Company employees. Additionally, all of the Company's employees are entitled to vacation, sick leave and other paid holidays, and may be eligible for severance payments under a severance pay plan further described below. The Committee believes that the Company's commitment to provide the employee benefits summarized above recognizes that the health and well-being of the Company's employees contribute directly to a productive and successful work life that enhances results for the Company and its stockholders.




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        The Company provides all full-time employees with (1) life insurance coverage equal to two times the sum of the employee's current base salary plus the prior year's bonus/commissions, up to a maximum of $2 million in coverage, and (2) long-term disability coverage equal to 60% of the employee's current base salary plus the prior year's bonus/commissions, up to a maximum annual benefit of $90,000 ($240,000 for designated senior executives based on job grade).

        In addition to the personal benefits discussed above, the named executive officers were eligible to receive the following perquisites:




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Company Aircraft

        Pursuant to the Company's Aircraft Policy, the executive officers and other management employees are provided use of Company aircraft for business purposes. Additionally, pursuant to an executive security program established by the Committee and approved by the Board, the Company encourages its Chief Executive Officer to use Company aircraft for personal as well as business travel, when practicable. The other named executive officers are provided use of Company aircraft for personal travel in limited circumstances.

        From time to time, executives may be accompanied by family members invited to attend business functions, which is deemed "personal use" of the Company aircraft by the Internal Revenue Service for tax purposes. Although the Company does not incur any incremental costs for such "personal use," the taxable value of such use, calculated pursuant to Internal Revenue Service guidelines, is imputed as income to the named executive officers. We do not provide tax gross-up reimbursement for this imputed income. The methodology used to determine the Company's incremental cost for personal aircraft usage is described in footnote 4(a)below.

        The value of personal aircraft usage is based on the Company's direct operating costs. This methodology calculates our aggregate incremental cost based on the average weighted variable cost per hour of flight for fuel/oil expenses, mileage, trip related maintenance, crew travel expenses, landing fees and other miscellaneous variable costs. Since the Company's aircraft are used primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as pilot salaries, the cost of the Summary Compensation Table below.

Financial Services

        During 2017,aircraft, depreciation and administrative expenses. On certain occasions, an executive's spouse or other family member may accompany the executive on a flight when such person is invited to attend the event for appropriate business purposes. No additional direct operating cost is incurred in such situations under the foregoing methodology; however, the value of personal use of Company reimbursedaircraft is imputed as income to the named executive officers for financial counseling services,officer. This value is calculated pursuant to Internal Revenue Service guidelines using Standard Industry Fare Level ("SIFL)" rates, which may include financial, estate and/or tax planning, and tax preparation assistance. In an effort to reduce the perquisites provided to executive officers, these services will no longer be eligible for reimbursementare determined by the Company starting in 2018.U.S. Department of Transportation.

Other Perquisites

        During 2017,2018, the named executive officers were eligible for the following perquisites: (1) reimbursement of country club membership dues; (2) an annual executive physical; and (3)had access to tickets to various sporting, civic, cultural, charity and entertainment events if the event tickets are not otherwise being used for business purposes. For further information on perquisites received by the named executive officers in 2017,2018, please refer to the "All Other Compensation" column of the Summary Compensation Table below. In an effort to reduce the perquisites provided to executive officers, country club membership dues, reimbursement for financial, estate and tax planning, and the cost of an annual executive physical willwere no longer be eligible for reimbursement by the Company starting in 2018. In 2017, executive officers were no longer eligible for Company provided travel insurance for themselves and their families.

        In determining total compensation payable to the named executive officers for 2017,2018, the Committee considered these benefits and perquisites. As these benefits and perquisites represent a relatively insignificant portion of the named executive officers' total compensation, they did not materially influence the Committee's decision in setting such officers' total compensation.




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Equity Compensation Program in General


        The Company maintains an equity compensation program for key employees, including the executive officers, in order to attract and retain employees who contribute to the Company's success, to provide incentives that enhance job performance, and to enable those persons to participate in the long-term success of the Company. In recent years, these awards have been in the form of restricted stock. Beginning in 2017, equity compensation awards granted to non-executive officers have been comprised of 50% restricted stock and 50% cash-settled restricted stock units ("RSUs"), which are economically equivalent to restricted stock from the recipient's perspective. On the vesting date, the recipient of a RSU receives cash equal to the closing price of the Company's Class A common stock on the vesting date for each RSU, subject to applicable taxes withholding. Recipients of RSUs are not entitled to voting rights or to receive dividends. However, recipients of RSUs receive dividend equivalent rights, which are economically equivalent to, and paid concurrently with, dividend payments on the Company's Class A common stock. The Committee grants RSUs to non-executives to preserve the number of shares available for issuance pursuant to the Stock Incentive Plan.

        Historically,        For the 2017 performance period, Messrs. Mihal and Buyle and Ms. Scupham participated in this program as non-executive officers and received awards of restricted stock and RSUs in January 2018. See footnote 8 to the Summary Compensation Table and the Grants of Plan-Based Awards Table for additional information regarding the equity awards typically vested in 33¹/3% increments beginning on the second anniversary of the grant date. However, beginningawarded to Messrs. Mihal and Buyle and Ms. Scupham for 2017 performance.

        Beginning with awards granted on December 31, 2016, restricted




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stock and RSU awards will vest in 25% increments beginning on the first anniversary of the grant date in order to be more consistent with the vesting practices of our peers. All restricted stock awards are classified in the Company's financial statements as equity awards.

        The Committee has approved, and will continue to approve, all grants of equity compensation. Although Company management, including the Chief Executive Officer, makes recommendations to the Committee from time to time on the form and amount of equity incentive awards to be granted to Company employees, such awards are approved by the Committee; the Committee does not expect to delegate such approval authority to the Company's executive officers or any subcommittee in the foreseeable future. Additionally, the Committee determines the grant date of all equity incentive awards; the Company's executive officers may not unilaterally select the grant date of awards. In March 2017,February 2018, concurrent with the Committee's approval of the 20172018 performance goals for executive officers that participated in the Executive Incentive Plan, the Committee set the grant date for 20172018 equity incentive awards as December 2017.2018. The 20172018 equity incentive awards for the current named executive officers were granted on December 31, 2017,2018, the last day of the performance period for which the incentive awards were earned. Equity incentive awards for all awardees, other than executive officers, have historically been awarded in January and April of each year. The current named executive officers receivereceived their equity incentive awards for 2018 performance in December in lieu of April, for administrative purposes only. Beginning in 2017,with the 2019 performance period, equity awards for home officeall employees, including the Investment Management Division, wereexecutive officers, will be granted in January to more closely align withMarch of the grant date for executive officers.year following the performance period.

        Notwithstanding the foregoing, grants of equity incentive awards have been made in months other than December and April on a very limited basis, but these occurrences did not involve grants to executive officers as an isolated group.        The Company does not have a formal policy on timing equity incentive awards in connection with the release of material non-public information to affect the value of compensation. In the event that material non-public information becomes known to the Committee prior to granting equity incentive awards, the Committee will take the existence of such information under advisement and make an assessment in its business judgment whether to delay the grant of the award in order to avoid any impropriety.




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Tax Considerations


        IRC Section 162(m) places a limit of $1 million on the amount of compensation the Company may deduct for federal income tax purposes in any one year with respect to certain covered officers that were employed by the Company on the last day of the fiscal year. Prior to the enactment of the Tax Cuts and Jobs Act of 2017 (the "TCJA") in December 2017, compensation that was "performance-based" (i.e., compensation that was paid pursuant to pre-established objective performance goals that were based on criteria approved by the stockholders and were determined and administered by the Committee according to related regulations) was excluded from this $1 million limitation and was deductible by the Company. Under the TCJA, the performance-based exception has been repealed for tax years beginning after December 31, 2017. Notwithstanding the changes to IRC Section 162(m), a limited exception may apply to certain compensation intended to qualify as "performance-based compensation" under IRC Section 162(m), provided it is paid pursuant to a written binding contract in effect on November 2, 2017 and which has not been modified in any material respect on or after that date. Pursuant to these "grandfathering" rules, the Company may be entitled to deduct certain qualifying "performance-based" compensation. However, absent formal guidance from the Treasury Department and the IRS, it is not possible for the Company to determine which, if any, awards previously granted (or which may be granted in the future) under the Company's compensatory plans may continue to qualify for this exception.

        In connection with 20172018 executive compensation decisions, the Committee considered the anticipated tax treatment to the Company and to the executive officers of various payments and benefits, including deductibility under IRC Section 162(m). The deductibility of certain compensation payments depends upon the timing of an executive's vesting of previously granted awards, as well as interpretations and




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changes in the tax laws and other factors beyond the Committee's control. For these and other reasons, including to maintain flexibility in compensating the executive officers in a manner designed to promote varying corporate goals, the Committee has not historically limited executive compensation to that which is deductible under IRC Section 162(m) and has not adopted a policy requiring all compensation to be deductible. In light of the repeal of the "performance-based" compensation exception to IRC Section 162(m), in December 2017, the Committee expects in the future to approve compensation that is not deductible for income tax purposes.

Clawback Policy


        The Board adopted a Clawback Policy in November 2016. The Clawback Policy provides that in the event a material restatement of the Company's financial results is necessary within three years of the original reporting, the Board will review the facts and circumstances that led to the requirement for the restatement and will consider whether any executive officer received incentive compensation based on the original financial statements that in fact was not warranted based on the restated financial statements. The Board will also consider the accountability of any executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement.

        The actions the Board may elect to take against a particular executive officer, depending on all facts and circumstances as determined during its review, include: (1) the recoupment of all or part of any incentive compensation paid to the executive officer, including recoupment in whole or in part of vested and/or unvested equity awards; (2) the reduction of future incentive compensation to be paid to the executive officer; (3) disciplinary actions, up to and including termination; and/or (4) the pursuit of other available remedies, at the Board's discretion.

        The Clawback Policy applies to "executive officers" of the Company as defined under the Exchange Act and such other senior executives as may be determined by the Board.

Prohibition on Hedging and Pledging of Company Securities


        Our Insider Trading Policy prohibits all directors and "officers" of the Company for purposes of Section 16 of the Exchange Act, including the named executive officers, from transacting in put and call options on any Company securities. The policy also prohibits these individuals from engaging in any hedging or monetization transactions or similar arrangements with respect to any Company securities. Additionally, the policy prohibits these individuals from holding Company securities in a margin account or pledging Company securities as collateral for any indebtedness.




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Stock Ownership Guidelines


        To reinforce the importance of aligning the financial interests of the Company's directors and executive officers with stockholders, the Board has approved minimum stock ownership guidelines for the directors and executive officers. Directors are required to maintain stock ownership equal in value to five times such director's annual cash retainer. The Chief Executive Officer is required to maintain stock ownership equal in value to five times his base salary and the other executive officers are required to maintain stock ownership equal in value to three times their base salary. The value of minimum stock ownership that must be maintained is based upon, and shall be fixed at, the annual cash retainer or base salary paid at the time such director or executive officer initially becomes subject to such ownership guidelines. Directors and executive officers are expected to be in compliance with the applicable ownership level within five years of becoming subject to the ownership guidelines. Stock ownership includes shares of the Company's Class A common stock over which a director or executive officer has direct or indirect ownership or control, including restricted stock or funds invested in the Company's 401(k) Plan stock fund, but does not include shares underlying stock options. Currently,All of our directors (except Ms. Andrade, who was appointed to the Board on March 3, 2019) and all of our directorsexecutive officers (except for the individuals designated as executive officers in December 2018 and January 2019) have satisfied their respective stock ownership requirement. Ms. Andrade and the recently designated executive officers are in compliance with theseprogressing toward attaining their respective stock ownership guidelines.




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Executive Compensation in 2018


        In December 2017, Mr. Sanders recommended to the Committee that executive salaries for 2018 remain flat with 2017 levels for the other current named executive officers, except for Mr. Bloss, who received a 12% increase in base salary to reflect his responsibilities as Chief Operating Officer. The Committee accepted Mr. Sanders' recommendations, and also did not increase Mr. Sanders' base salary for 2018.requirement.

        The foregoing discussion primarily describes the compensation philosophies, principles and practices the Committee utilized in setting executive compensation for the 20172018 fiscal year. In the future, as the Committee continues to review each element of the executive compensation program, these philosophies, principles and practices may change.




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EXECUTIVE COMPENSATION


Summary Compensation


        The following table summarizes total compensation awarded, paid or earned by our named executive officers who served in such capacities during 2015, 2016, 2017 and 2017.2018.

        The named executive officers were not entitled to receive payments characterized as "Bonus" payments, for the 2015, 2016 and 2017 fiscal years, except for Messrs. Mihal and Buyle and Ms. Hills,Scupham, who did not participate in the Company's Executive Incentive Plan in 2015.2018. Amounts reflected under "Non-Equity Incentive Plan Compensation" are performance-based cash incentive awards determined by the Compensation Committee in December of the respective year, based on performance goals set in the first quarter of the respective year.


SUMMARY COMPENSATION TABLE


Name and Principal Position		Year			Salary ($)			Bonus ($)			Stock Awards ($)(1)			Option Awards ($)			Non-Equity Incentive Plan Compensation ($)(2)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)			All Other Compensation ($)(4)			Total ($)
(a)			(b)			(c)			(d)			(e)			(f)			(g)			(h)			(i)			(j)
Philip J. Sanders,			2017			725,000			-			3,125,009			-			600,000			356,724			21,600			4,828,333
Chief Executive Officer and			2016			608,333			-			2,799,685			-			500,000			85,718			348,785			4,342,521
Chief Investment Officer			2015			525,000			-			1,433,000			-			600,000			45,456			371,648			2,975,104
Brent. K. Bloss,			2017			425,000			-			1,650,010			-			450,000			223,185			25,796			2,773,991
EVP and Chief Operating Officer			2016			425,000			-			1,474,956			-			425,000			58,309			16,756			2,400,021
(Chief Financial Officer in 2017)			2015			400,000			-			1,289,700			-			425,000			19,094			23,443			2,157,237
Wendy J. Hills,			2017			400,000			-			1,240,004			-			375,000			255,343			23,404			2,293,751
EVP, Chief Legal Officer,			2016			375,000			-			1,221,326			-			350,000			75,928			13,400			2,035,654
General Counsel and Secretary			2015			350,000			200,000			1,289,700			-			-			29,399			16,635			1,885,734
John E. Sundeen, Jr.,			2017			400,000			-			1,085,009			-			365,000			515,123			25,278			2,390,410
SVP and Chief Administrative			2016			385,000			-			1,086,707			-			350,000			99,776			21,454			1,942,937
Officer – Investments (5)
Thomas W. Butch,			2017			630,000			-			-			-			425,000			364,580			82,071			1,501,651
Former EVP and Chief			2016			630,000			-			1,843,695			-			425,000			92,054			33,773			3,024,522
Marketing Officer			2015			630,000			-			2,006,200			-			750,000			58,848			99,735			3,544,783

Name and Principal Position		Year			Salary ($)			Bonus ($)(1)			Restricted Stock Awards ($)(2)			Restricted Stock Unit Awards ($)(2)			Non-Equity Incentive Plan Compensation ($)(3)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4)			All Other Compensation ($)(5)			Total ($)
(a)			(b)			(c)			(d)			(e)			(f)			(g)			(h)			(i)			(j)
Philip J. Sanders,			2018			725,000			-			2,975,010			-			750,000			-			18,478			4,468,488
Chief Executive Officer and			2017			725,000			-			3,125,009			-			600,000			356,724			21,600			4,828,333
Chief Investment Officer			2016			608,333			-			2,799,685			-			500,000			85,718			348,785			4,342,521
Benjamin R. Clouse			2018			350,000			-			700,003			-			375,000			-			12,060			1,437,063
SVP, Chief Financial
Officer and Treasurer (6)
Brent. K. Bloss,			2018			475,000			-			1,500,007			-			600,000			-			18,934			2,593,941
EVP and Chief Operating			2017			425,000			-			1,650,010			-			450,000			223,185			25,796			2,773,991
Officer (7)			2016			425,000			-			1,474,956			-			425,000			58,309			16,756			2,400,021
Shawn M. Mihal			2018			350,000			375,000			900,023	(8)		250,011	(8)		-			-			35,344			1,910,378
SVP – Broker-Dealer (6)
Amy J. Scupham			2018			323,000			350,000			750,021	(8)		100,009	(8)		-			-			11,000			1,534,030
SVP – Distribution (6)
Mark P. Buyle			2018			292,000			350,000			575,028	(8)		125,017	(8)		-			-			11,530			1,353,574
SVP, Chief Legal Officer, GC and Secretary (6)
Wendy J. Hills,			2018			127,282			-			-			-			-			-			2,363,175			2,490,457
Former EVP, Chief Legal			2017			400,000			-			1,240,004			-			375,000			255,343			23,404			2,293,751
Officer, GC and Secretary			2016			375,000			-			1,221,326			-			350,000			75,928			13,400			2,035,654

---

(1)

Represents the cash incentive paid to Messrs. Mihal and Buyle and Ms. Scupham for 2018 pursuant to the Company's management bonus program, which is discussed in further detail under "Analysis of 2018 Compensation" set forth above in the "Compensation Discussion & Analysis." For Mr. Buyle, $50,000 of his bonus in 2018 represents a bonus for his tenure as Interim General Counsel before his base salary was adjusted.



(2)

Represents the grant date fair value computed in accordance with ASC 718, disregarding any forfeiture assumptions. All awards are valued based on the closing market price of the Company's Class A common stock on the date of grant, or the last business day immediately preceding grant date if the grant date is not a business day ($22.3422.17 on January 10, 2018 and $18.08 on December 29, 2017 for awards granted December 31, 2017)2018). Restricted stock and cash-settled restricted stock awards are subject to accelerated vesting upon a change of control, death or disability.



(2)(3)

For 2017,2018, represents the cash incentive awards made under the Executive Incentive Plan, which are discussed in further detail under "Analysis of 20172018 Compensation" set forth above in the "Compensation Discussion & Analysis."



(3)(4)

For 2017, represents the actuarial increase in2018, the present value of the named executive officers' benefits under the Pension Plan whichdecreased. Those benefits were determined based on a lump sum discount rate of 4.39% at December 31, 2016 and 3.76% at December 31, 2017 and 4.45% at December 31, 2018, a retirement age of 65, (or current age if greater), Internal Revenue Code Section 417(e) prescribed 20182019 mortality rates and discount rate using the three segment yield curve of 2.20%3.43%/3.57%4.46%/4.24%4.88% for the lump sum conversion, and other assumptions set forth in footnote 910 to the Company's audited financial statements for the fiscal year ended December 31, 20172018 included in the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2018.22, 2019. The increasedecrease for 20172018 in the present value of benefits under the Pension Plan is due to: (i) normalfreezing benefit accruals throughon September 30, 2017 when the Pension Plan was frozen;2017; (ii) a decreasean increase in the interest rate;discount rate from 3.76% to 4.45%; and (iii) an update to the mortality table for lump sum conversions; and (iv) an update to the interest rate assumption used to convert annuities to lump sums. The decrease in pension value during 2018 was as follows for each named executive officer: Messrs. Sanders (140,866), Clouse (10,252), Bloss (111,933), Mihal (15,853) and Buyle (150,715) and Mss. Scupham (44,565) and Hills (127,187).





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(4)(5)

For 2017,2018, represents the following:



(a)

Incremental cost to the Company of all perquisites and personal benefits, as applicable, including (i) tax or estate planning, (ii) country club membership dues, (iii) personal use of Company aircraft, (iv) personal use of entertainment tickets (v)and (ii) convention allowance and (vi) executive physicals.gross-up.


The value of personal aircraft usage is based on the Company's direct operating costs. This methodology calculates our aggregate incremental cost based on the average weighted variable cost per hour of flight for fuel/oil expenses, mileage, trip related maintenance, crew travel expenses, landing fees and other miscellaneous variable costs. Since the Company's aircraft are used primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as pilot salaries, the







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cost of the aircraft, depreciation and administrative expenses. On certain occasions, an executive's spouse or other family member may accompany the executive on a flight when such person is invited to attend the event for appropriate business purposes. No additional direct operating cost is incurred in such situations under the foregoing methodology; however, the value of personal use of Company aircraft is imputed as income to the named executive officer. This value is calculated pursuant to Internal Revenue Service guidelines using Standard Industry Fare Level ("SIFL)" rates, which are determined by the U.S. Department of Transportation.

(b)

Company matching contributions to the 401(k) Plan of $21,600$11,000 for each of Messrs. Sanders, Clouse, Bloss, SundeenMihal and ButchBuyle and Ms. Hills, comprisedScupham, and $5,046 for Ms.Hills.



(c)

Pursuant to Ms. Hills' separation agreement described below, (i) she received cash payments of $600,000 and (ii) 86,950 shares of unvested restricted stock vested with a $10,800 matching contribution and a $10,800 discretionary contribution. In connection withfair market value on the Pension Plan freeze, effective September 30, 2017, the Company made a discretionary contribution in the first quarter of 2018 to the account of eligible 401(k) Plan participants in an amountvesting date equal to 4% of eligible 2017 compensation.$1,758,129.



(5)(6)

Mr. Sundeen wasMessrs. Clouse, Mihal and Buyle and Ms. Scupham were not a named executive officerofficers during 2015;2016 or 2017; therefore, compensation information is not presented for that year.those years.



(7)

Mr. Bloss served as Senior Vice President and Chief Financial Officer until February 2018.



(8)

Messrs. Mihal's and Buyle's and Ms. Scupham's equity-based awards include (a) restricted stock and cash-settled restricted stock unit awards for 2017 performance granted on January 10, 2018 with an aggregate grant date fair value equal to $500,022, $250,034 and $200,018, respectively, and (b) restricted stock awards for 2018 performance granted on December 31, 2018 with a grant date fair value equal to $650,012, $450,011 and $650,012. See "Grant of Plan-Based Awards Table".

        The direct costs of tax or estate planning, country club membership dues, convention allowance, personal use of entertainment tickets, and the value of personal use of corporate aircraft (based upon SIFL rates) are imputed to the named executive officers, as applicable, and included as taxable income on their Form W-2s.

        Mr. Butch'sMs. Hills' employment with the Company terminatedended on December 31, 2017.April 17, 2018. In connection therewith,with Ms. Hills' departure, an affiliate of the Company and Mr. ButchMs. Hills executed a SeveranceSeparation Agreement and Release of All Claims, which became effective January 13,on April 18, 2018 (the "Severance"Separation Agreement"). Pursuant to the SeveranceSeparation Agreement: (1) Mr. Butch(i) Ms. Hills (a) to the extent permitted by law, released claims against the Company and its affiliates, from all claims, (b) is subject to indefinite confidentiality and non-disparagement obligations and (c) is subject to a non-competition and non-solicitationcertain post-employment restrictive covenants until NovemberApril 17, 2018; (2) pursuant2019, including non-solicitation covenants; (ii) Ms. Hills received a separation payment of $300,000 (less applicable deductions and withholdings); and (iii) subject to Ms. Hills not timely revoking her release of claims under the termsAge Discrimination in Employment Act within seven days of the Company's Severance Pay Plan, as described in "Potential Payments Upon Termination or Change in Control" below, Mr. Butch will receive severance pay for 36 weeks following the effective dateher execution of the Separation Agreement, at his current base salary;(a) Ms. Hills received a supplemental separation payment in the amount of $300,000 (less applicable deductions and (3) 61,666withholdings), and (b) 86,950 shares of Mr. Butch'sMs. Hills' unvested restricted stock of the Company vested on the effective date of the Severance Agreement. Mr. Butchvested. Ms. Hills also is also entitled to receive standard retirement and pension benefits, subject to the terms and conditions of the Company's 401(k) and Thrift Plan and PensionRetirement Income Plan.

Grants of Plan-Based Awards


        The following table reflects estimated possible payouts under incentive plans to the named executive officers during 2017. The Company's cash2018. Cash and equity incentive awards are granted to participants in the Executive Incentive Plan based upon a pre-established performance goal set annually by the Compensation Committee with a performance period equal to the fiscal year for which the performance goal is set. The Executive Incentive Plan is an annual plan;plan pursuant to which both cash and equity incentive awards are determined, and generallyfor 2018, paid (in the case of cash incentive awards) and granted (in the case of equity incentive awards), in the same fiscal year that such awards were earned.

        The named executive officers who participate in the Executive Incentive Plan are eligible to earn a maximum incentive award for the fiscal year, calculated as a certain percentage of the incentive pool assigned to each such named executive officer. For 2017,2018, Messrs. Sanders, Bloss, SundeenClouse and ButchBloss and Ms. Hills were the named executive officers that participated in the Executive Incentive Plan and were eligible to receive a maximum of 30%, 18%17%, 15%, 22%24% and 15%17%, respectively, of the incentive pool with the portion of such incentive award to be paid in cash and/or restricted stock determined at the discretion of the Compensation Committee. Ms. Hills did not receive any incentive compensation in 2018, as her employment ended in April 2018.

        Messrs. Mihal and Buyle and Ms. Scupham did not participate in the Executive Incentive Plan in 2018. Instead, they were each eligible to receive a cash incentive award pursuant to the Company's management bonus program and an award of restricted stock pursuant to the Company's Stock Incentive Plan, which are discussed in further detail under "Analysis of 2018 Compensation" set forth above in the "Compensation Discussion & Analysis." The following table also reflects restricted stock and cash-settled




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restricted stock unit awards that Messrs. Mihal and Buyle and Ms. Scupham received in January 2018 based on 2017 performance.

        Dividends are paid on awards of restricted stock and dividend equivalent rights are paid on cash-settled restricted stock units at the same rate as is paid to all stockholders generally. Pursuant to ASC 718, the right to receive dividends isand dividend equivalent rights are included in the calculation of the grant date fair value of the equity incentive awards set forth in the following table.

        For more detailed information regarding awards paid to the named executive officers, please refer to "Analysis of 20172018 Compensation" set forth in the "Compensation Discussion & Analysis".




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GRANTS OF PLAN-BASED AWARDS TABLE


																																						Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (2)									All Other Stock Awards: Number of Shares of Stock or Units (#)(6)
								Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)									Estimated Possible Payouts Under Equity Incentive Plan Awards									Grant Date Fair Value of Stock Awards ($)(5)																								Grant Date Fair Value of Stock and Unit Awards ($)(7)
Name		Grant Date			Date of Committee Action			Thres- hold ($)(2)			Target ($)(3)			Maximum ($)(4)			Thres- hold (#)			Target (#)			Maximum (#)							Grant Date			Date of Committee Action			Grant Type(1)		Thres- hold ($)(3)			Target ($)(4)			Maximum ($)(5)
(a)		(b)			(c)			(d)			(e)			(f)			(g)			(h)			(i)			(j)				(b)			(c)			(d)		(e)			(f)			(g)			(h)			(i)
Philip J. Sanders			12/31/17			12/7/17												-			-			-			3,125,009												-			750,000			5,557,416
									-			600,000			5,667,960																12/31/18			12/6/18		RSA												-			2,975,010
Benjamin R. Clouse																																							-			375,000			3,149,202
																															12/31/18			12/6/18		RSA												-			700,003
Brent K. Bloss			12/31/17			12/7/17												-			-			-			1,650,010												-			600,000			4,445,933
									-			450,000			3,400,776																12/31/18			12/6/18		RSA												-			1,500,007
Shawn M. Mihal																															1/10/18			12/7/17		RSA			-			-			-			11,277			250,011
																															1/10/18			12/7/17		RSU			-			-			-			11,277			250,011
																															12/31/18			12/6/18		RSA			-			-			-			35,952			650,012
Amy J. Scupham																															1/10/18			12/7/17		RSA			-			-			-			4,511			100,009
																															1/10/18			12/7/17		RSU			-			-			-			4,511			100,009
																															12/31/18			12/6/18		RSA			-			-			-			35,952			650,012
Mark P. Buyle																															1/10/18			12/7/17		RSA			-			-			-			5,639			125,017
																															1/10/18			12/7/17		RSU			-			-			-			5,639			125,017
																															12/31/18			12/6/18		RSA			-			-			-			24,890			450,011
Wendy J. Hills			12/31/17			12/7/17												-			-			-			1,240,004				-			-		-			-			-			-			-			-
									-			375,000			2,833,980
John E. Sundeen, Jr.			12/31/17			12/7/17												-			-			-			1,085,009
									-			365,000			2,833,980
Thomas W. Butch			12/31/17			12/7/17												-			-			-			0
									-			425,000			4,156,504

---

(1)

"RSAs" are restricted stock awards granted pursuant to the Company's Stock Incentive Plan. "RSUs" are cash-settled restricted stock unit awards granted pursuant to the Company's Cash Settled RSU Plan. See "Equity Compensation Program in General" set forth in the Compensation Discussion and Analysis for a description of the Company's Cash Settled RSU Plan.



(2)

The estimated possible payouts to the named executive officers pursuant to the Executive Incentive Plan are reported in dollars; however, the Compensation Committee has discretion to award shares of the Company's Class A common stock in lieu of cash. Messrs. Mihal and Buyle and Ms. Scupham were not participants in the Executive Incentive Plan during 2018.



(2)(3)

There is no threshold amount for incentive awards under the Executive Incentive Plan.



(3)(4)

Represents the cash incentive awards earned for 2017.2018. These awards are reported in the "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table.



(4)(5)

Represents the maximum incentive award each named executive officer was eligible to receive for 20172018 pursuant to the Executive Incentive Plan based on the percentage of the incentive pool assigned to each such officer, which was payable in either cash or equity at the discretion of the Compensation Committee. The Compensation Committee used negative discretion to determine the incentive award for each named executive officer and allocated the incentive award between cash as set forth in the "Target" column for non-equity incentive plan awards and restricted stock as set forth in the "Grant Date Fair Value of Stock Awards" column in this table. See "Analysis of 20172018 Compensation" set forth in the "Compensation Discussion & Analysis".



(5)(6)

Represents the number of shares of restricted stock granted pursuant to the Company's Stock Incentive Plan and the number of cash-settled restricted stock units granted pursuant to the Company's Cash Settled RSU Plan.



(7)

Represents the grant date fair value computed in accordance with ASC 718, disregarding any forfeiture assumptions and based on the number of shares of restricted stock actuallyand the number of cash-settled restricted stock units granted and the closing market price of the Company's Class A common stock on the last business day immediately preceding the December 31, 20172018 grant date, which was $22.34.$18.08. The number of shares of restricted stock and the number of cash-settled restricted stock units granted was determined by dividing the dollar amount of the equity award by such closing market price and rounding up to the nearest whole share.share or unit, as applicable. Each award vests in 25% increments annually beginning on the first anniversary of the grant date. All awards are subject to accelerated vesting upon a change of control, death or disability. TheseThe restricted stock awards are reported in the "Stock"Restricted Stock Awards" column and the cash-settled restricted stock unit awards are reported in the "Restricted Stock Unit Awards" column of the Summary Compensation Table.




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Outstanding Equity Awards at Fiscal Year-End


        The following table reflects outstanding shares of restricted stock and cash-settled restricted stock units held by the named executive officers as of December 31, 2017,2018, the value of which was determined based on the number of shares of restricted stock or cash-settled restricted stock units granted and the $22.34$18.08 closing market price of the Company's Class A common stock on December 29, 2017, the last business day31, 2018.




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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

		Option Awards															Stock Awards													Stock Awards
Name		Number of Securities Underlying Unexercised Options Exercisable (#)			Number of Securities Underlying Unexercised Options Unexercisable (#)			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)			Option Exercise Price ($)			Option Expiration Date			Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)				Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
(a)		(b)			(c)			(d)			(e)			(f)			(g)			(h)			(i)			(j)				(b)			(c)			(d)			(e)
Philip J. Sanders			-			-			-			-			-			15,000	(1)		335,100			-			-				16,666	(1)		301,321			-			-
																		33,333	(2)		744,659										71,750	(2)		1,297,240
																		107,625	(3)		2,404,343										104,913	(3)		1,896,827
																		139,884	(4)		3,125,009										164,547	(4)		2,975,010
Benjamin R. Clouse																															3,489	(1)		63,081			-			-
																															7,688	(2)		138,999
																															16,786	(3)		303,491
																															38,717	(4)		700,003
Brent K. Bloss			-			-			-			-			-			11,000	(1)		245,740			-			-				15,000	(1)		271,200			-			-
																		30,000	(2)		670,200										37,800	(2)		683,424
																		56,700	(3)		1,266,678										55,394	(3)		1,001,524
																		73,859	(4)		1,650,010										82,965	(4)		1,500,007
Wendy J. Hills			-			-			-			-			-			10,000	(1)		223,400			-			-
Shawn M. Mihal																															4,868	(5)		88,013			-			-
																		30,000	(2)		670,200										4,868	(5)		88,013
																		46,950	(3)		1,048,863										11,277	(6)		203,888
																		55,506	(4)		1,240,004										11,277	(6)		203,888
																		8,333	(5)		186,159										5,239	(7)		94,271
John E., Sundeen, Jr.			-			-			-			-			-			6,666	(1)		148,918			-			-
																															35,952	(4)		650,012
Amy J. Scupham																															3,894	(5)		70,404			-			-
																		23,333	(2)		521,529										3,894	(5)		70,404
																		41,775	(3)		933,254										4,511	(6)		81,559
																		48,568	(4)		1,085,009										4,511	(6)		81,559
Thomas W. Butch (6)			-			-			-			-			-			15,000	(1)		335,100			-			-
																		46,666	(2)		1,042,518										390	(8)		7,051
																															1,796	(7)		32,472
																															35,952	(4)		650,012
Mark P. Buyle																															4,868	(5)		88,013			-			-
																															4,868	(5)		88,013
																															5,639	(6)		101,953
																															5,639	(6)		101,953
																															1,561	(8)		28,223
																															7,184	(7)		129,887
																															24,890	(4)		450,011
Wendy J. Hills																															-			-			-			-

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(1)

These shares will vest on December 31, 2018.2019.



(2)

These shares will vest in 50% increments on December 31, 20182019 and 2019.2020.



(3)

These shares will vest in 33¹/3% increments on December 31, 2018, 2019, 2020 and 2020.2021.



(4)

These shares will vest in 25% increments on December 31, 2018,2019, 2020, 2021 and 2022.



(5)

These shares will vest in 33¹/3% increments on January 10, 2019, 2020 and 2021.



(5)(6)

These awards will vest in 25% increments on January 10, 2019, 2020, 2021 and 2022.



(7)

These shares will vest in 50% increments on April 2, 2019 and 2020.



(8)

These shares will vest on April 2, 2018.



(6)

All unvested shares of restricted stock held by Mr. Butch on December 31, 2017 were forfeited in connection with his departure from the Company on that date with the exception of 61,666 shares of unvested restricted stock that vested on January 13, 2018 pursuant to his Severance Agreement and Release of All Claims with the Company. See the narrative immediately following the Summary Compensation Table for a description of the terms of such agreement.2019.




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Option Exercises and Stock Vested


        The following table reflects shares of restricted stock and cash-settled restricted stock units held by the named executive officers that vested during 2017.2018.


OPTION EXERCISES AND STOCK VESTED TABLE


		Options Awards				Stock Awards				Stock Awards
Name		Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)(1)		Value Realized on Vesting ($)(2)		Number of Shares Acquired on Vesting (#)(1)		Value Realized on Vesting ($)(2)
(a)		(b)		(c)		(d)		(e)		(b)		(c)
Philip J. Sanders		-		-		77,542		1,732,288		102,513		1,853,435
Benjamin R. Clouse										12,929		233,756
Brent K. Bloss		-		-		61,566		1,330,886		63,365		1,145,639
Shawn M. Mihal										6,799		141,105
Amy J. Scupham.										4,141		87,624
Mark P. Buyle.										9,733		198,201
Wendy J. Hills		-		-		52,316		1,106,443		95,283		1,920,289
John E. Sundeen, Jr.		-		-		36,592		817,465
Thomas W. Butch		-		-		73,625		1,644,783

---

(1)

The number of shares acquired on vesting for Messrs. Mihal and Buyle and Ms. Scupham includes 1,623, 1,623 and 1,299 cash-settled restricted stock units, respectively, the value of which is based on the closing price of the Company's Class A common stock on the vesting date, or the last business day immediately preceding the vesting date if the vesting date is not a business day. The number of shares of the Company's Class A common stock received by each of Messrs. Sanders, Bloss, Sundeen and Butch and Ms. Hillsnamed executive officer upon vesting of these awards, net of shares withheld by the Company to cover associated tax liabilities, was 41,137, 34,779, 22,259, 40,099as follows: Messrs. Sanders (57,051), Clouse (9,135), Bloss (37,112), Mihal (3,541) and 30,671 shares, respectively.Buyle (1,821) and Mss. Scupham (5,623) and Hills (58,061).



(2)

The value realized on vesting is based on the closing market price of the Company's Class A common stock on the vesting date, or the last business day immediately preceding the vesting date if the vesting date is not a business day.

Pension Benefits


        The Pension Plan is a tax-qualified, non-contributory pension plan that covers all eligible employees of the Company who are 21 years of age or older and have one or more years of credited service. Benefits payable are generally based on a participant's years of credited service and their highest average earnings in any five consecutive years during the last ten years of service prior to retirement, or their "5-year average earnings." The retirement benefit amount payable upon normal retirement is calculated as (1) 2% of a participant's 5-year average earnings for each year of credited service (up to a maximum of 30 years), plus (2) 1% of a participant's 5-year average earnings for each additional year of credited service in excess of 30 years (up to a maximum of ten years); this amount is then reduced by a social security offset. Due to the Pension Plan freeze, effective September 30, 2017, participants will no longer accrue future benefits based on years of service and compensation after the freeze date.

        Earnings used to determine benefits include the amount shown in the "Salary" column of the Summary Compensation Table, but exclude all other elements of compensation and, for 2017, may not exceed $270,000 per year pursuant to limitations under the Internal Revenue Code. Because of this limitation, the compensation used to determine benefits payable under the Pension Plan for each of the named executive officers was $270,000.

        Benefits under the Pension Plan vest 100% after five years, and are payable monthly for the retiree's lifetime beginning at age 65, or in a reduced amount as early as age 55 with at least 10 years of credited service. Messrs.Mr. Sanders Sundeen and Butch areis eligible for early retirement under the Pension Plan; the early retirement reduction is 1/180^th for each of the first 60 months preceding age 65, and 1/360^th for each additional month. Upon a participant's retirement, benefits under the Pension Plan may be paid (1) pursuant to a variety of annuity options, which provide benefits during the retiree's lifetime and generally provide continuing benefits to a surviving spouse or other beneficiary, or (2) in a lump sum, which provides for an immediate lump sum equal to the actuarial value of the retiree's future benefits in lieu of receiving those benefits over their lifetime.




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        Messrs. Sanders, Bloss, Sundeen and Butch and Ms. Hills are credited with 19, 15.75, 32.78, 17.9 and 19 years of service, respectively. Under the Pension Plan, participants cannot be credited with years of service in excess of their actual years of service with the Company.

The following table reflects the actuarial present value of accumulated benefits payable to each of the named executive officers, including the number of years of service credited to each such officer, under the Pension Plan. Under the Pension Plan, participants cannot be credited with years of service in excess of their actual years of service with the Company. These benefits were determined using a lump sum discount rate of 4.39% at December 31, 2016 and 3.76% at December 31, 2017 and 4.45% at December 31, 2018, a retirement age of 65, (or current age if greater), Internal Revenue Code Section 417(e) prescribed 20182019 mortality rates and discount rate using the three segment yield curve of 2.20%3.43%/3.57%4.46%/4.24%4.88% for the lump sum conversion, and other assumptions set forth in footnote 910 to the Company's audited financial statements for the fiscal year ended December 31, 20172018 included in the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2018.22, 2019. Benefits reflected below are estimates; the actual benefit payable is determined upon retirement or termination from the Company.


PENSION BENEFITS TABLE


Name		Plan Name		Number of Years Credited Service (#)		Present Value of Accumulated Benefit ($)		Payments During Last Fiscal Year ($)		Plan Name		Number of Years Credited Service (#)		Present Value of Accumulated Benefit ($)		Payments During Last Fiscal Year ($)
(a)		(b)		(c)		(d)		(e)		(b)		(c)		(d)		(e)
Philip J. Sanders		Pension Plan		19		1,038,834		-		Pension Plan		19		897,968		-
Benjamin R. Clouse										Pension Plan		1.98		38,258		-
Brent K. Bloss		Pension Plan		15.75		600,001		-		Pension Plan		15.75		488,068		-
Shawn M. Mihal										Pension Plan		2.52		56,352		-
Amy J. Scupham										Pension Plan		9		159,610		-
Mark. P. Buyle										Pension Plan		22		720,655		-
Wendy J. Hills		Pension Plan		19		656,580		-		Pension Plan		19		529,393		-
John E. Sundeen, Jr.		Pension Plan		32.78		1,628,814		-
Thomas W. Butch		Pension Plan		17.90		1,096,593		-

Nonqualified Deferred Compensation Plans


        The Company does not provide any deferred compensation arrangements for its named executive officers.

Potential Payments Upon Termination or Change in Control


        The table below quantifies (1) amounts payable and the value of benefits available pursuant to the Severance Plan if a current named executive officer is involuntarily terminated due to a corporate realignment, downsizing or other event that the Company, in its sole discretion, determines is a qualifying event for purposes of the Severance Plan [column (a)] and (2) the value of restricted stock vesting upon a "change in control," death or "disability" for purposes of the Company's Stock Incentive Plan [column (b)], all of which assume that the applicable triggering event occurred on December 31, 20172018 and where applicable, is based on a stock price of $22.34,$18.08, the closing market price of the Company's Class A common stock on December 29, 2017,31, 2018, the last business day of the year. Benefits reflected below are estimates; the actual benefit payable is determined upon termination.

        No information is provided in the narrative or table for Mr. Butch,Ms. Hills, as hisher employment terminatedended on December 31, 2017.April 17, 2018. See the narrative immediately following the Summary Compensation Table for a description of the terms of the Severance Agreement and Release of All Claims, effective January 13,dated April 18, 2018, between an affiliate of the Company and Mr. Butch.Ms. Hills.

Severance Plan

        The current named executive officers are eligible to receive certain severance benefits under the Company's Severance Pay Plan (the "Severance Plan") if they are involuntarily terminated due to a corporate realignment, downsizing or other event that the Company, in its sole discretion, determines is a




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qualifying event for purposes of the Severance Plan. Participants in the Severance Plan who receive




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severance are entitled to periodic payment of their base pay and health care severance pay for no fewer than 12 weeks and no more than 52 weeks (subject to the six month delay on certain termination payments imposed by the Internal Revenue Code) with the number of weeks of severance determined by multiplying the participant's years of service by two weeks. The amount of the health care severance pay will be determined by the Company in its discretion. In addition, the Severance Plan provides participants with payment for any unused vacation, and the Company may provide, in its discretion, career transition services.

Accelerated Vesting of Restricted Stock

        The equity incentive awards granted to the current named executive officers under the Stock Incentive Plan provide for accelerated vesting upon a "change in control" (as defined in the Stock Incentive Plan) unless otherwise determined by the Compensation Committee prior to such "change in control," whether or not the current named executive officer's employment terminates. Equity incentive awards also vest upon the death or "disability" (permanent disability as determined under the Company's long term disability plan) of a current named executive officer.




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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE


Name		Payments and Benefits under Severance Plan ($)(1)(2)(3)			Change in Control Events, Events, Death, or Disability Pursuant to Stock Stock Incentive Plan and Cash Settled RSU Plan ($)(4)(3)
		(a)			(b)
Philip J. Sanders
Severance Plan Benefits			529,808557,692
Medical and Dental Benefits			9,102
Accrued Vacation			40,27810,570
Career Transition Services			108,750
Equity CompensationAward Vesting						6,609,1106,470,398
​	​	​	​	​	​	​	​
Total			687,938677,012
Brent K. BlossBenjamin R. Clouse
Severance Plan Benefits			245,19292,308
Medical and Dental Benefits			7,186
Accrued Vacation			23,6113,333
Career Transition Services			63,75060,000
Equity CompensationAward Vesting						3,832,6281,205,574
​	​	​	​	​	​	​	​
Total			339,740155,640
Wendy J. HillsBrent K. Bloss
Severance Plan Benefits			292,308
Medical and Dental Benefits			2,824
Accrued Vacation			22,2228,456
Career Transition Services			60,00071,250
Equity CompensationAward Vesting						3,368,6263,456,155
​	​	​	​	​	​	​	​
Total			377,354372,014
John E. Sundeen, Jr.Shawn M. Mihal
Severance Plan Benefits			400,00086,538
Medical and Dental Benefits			12,468
Accrued Vacation			27,7783,333
Career Transition Services			60,00056,250
Equity CompensationAward Vesting						2,688,4401,328,536
​	​	​	​	​	​	​	​
Total			500,246146,121
Amy J. Scupham
Severance Plan Benefits			144,231
Medical and Dental Benefits			2,432
Career Transition Services			56,250
Equity Award Vesting						993,460
​	​	​	​	​	​	​	​
Total			202,913
Mark P. Buyle
Severance Plan Benefits			296,346
Medical and Dental Benefits			12,156
Career Transition Services			50,250
Equity Award Vesting						988,054
​	​	​	​	​	​	​	​
Total			358,752

---

(1)

Severance Plan benefits for Messrs. Sanders, Clouse, Bloss, Mihal and SundeenBuyle and Ms. HillsScupham are equal to 38, 30, 5240, 12, 32, 12, 46 and 3820 weeks of base pay, respectively, in accordance with the normal payroll practices of the Company.



(2)

Reflects career transition services equal to 15% of each current named executive officer's base salary. Pursuant to the Severance Plan, career transition services may be offered in the sole discretion of the Company. Consequently, these amounts may not be payable even if the current named executive officer is otherwise eligible for benefits under the Severance Plan.



(3)

Represents accrued vacation of 20 days for Messrs. Sanders and Bloss and Ms. Hills and 25 days for Mr. Sundeen, which is the maximum number of vacation days each officer could have accrued in 2017.



(4)

Includes for Messrs. Sanders, Bloss and Sundeen and Ms. Hills 295,842, 171,559, 120,342 and 150,789 shares, respectively, of unvested restricted stock and unvested cash-settled restricted stock units held as of December 31, 2017.2018 by each current named executive officer as follows: Messrs. Sanders (357,876), Clouse (66,680), Bloss (191,159), Mihal (73,481) and Buyle (54,649) and Ms. Scupham (54,948).




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Pay Ratio


        Following is a reasonable estimate of the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of our other employees. We determined our median employee based on compensation during 2017 for each of our employees (excluding the Chief Executive Officer), as reflected in our payroll records and reported to the IRS on Form W-2. Of the two potential median employees, we selected the employee with a vested benefit in the Pension Plan. For 2018, we are using the median employee identified during 2017, as we have not had any changes to our employee population or employee compensation arrangements that we reasonably believe would significantly impact the pay ratio during 2018. The annual total compensation of our median employee (other than the Chief Executive Officer) for 20172018 was $76,370.$65,268. As disclosed in the Summary Compensation Table, the annual total compensation of our Chief Executive Officer for 20172018 was $4,828,333.$4,468,488. Based on the foregoing, our estimate of the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all other employees was 6368 to 1.




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PROPOSAL NO. 2
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

        This advisory vote gives stockholders the opportunity to approve our named executive officers' compensation, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K.

        As described in detail in our Compensation Discussion & Analysis above, a core objective in designing our executive compensation program is to deliver competitive total direct compensation (i.e., base salary, annual cash incentive award and annual equity incentive award), upon the achievement of financial and operating performance and individual contributions, that will attract, motivate and retain a high-performance executive team who will drive the creation of stockholder value. The Compensation Committee believes that the Company's executive compensation program reflects a strong "pay-for-performance" philosophy and is well aligned with stockholders' long-term interests. The compensation awarded to our named executive officers is substantially dependent on corporate financial and operating performance, as well as individual performance and contributions, which drives the creation of sustainable long-term stockholder value. The Compensation Committee will continue to focus on responsible executive compensation practices that attract, motivate and retain high-performance executives, reward those executives for the achievement of short-term and long-term performance, and support our other executive compensation objectives, including long-term career development and retention goals.

        Among the important elements of our executive compensation program and features incorporated into our program to achieve our core objectives are the following:

•

A significant portion of each current named executive officer's total direct compensation – approximately 81%77% on average for 20172018 – was "at risk" compensation, delivered in the form of a short-term cash incentive award and a long-term equity incentive award.



•

A significant portion of each current named executive officer's total annual incentive compensation – approximately 79%67% on average for 20172018 – was comprised of an equity incentive award, which drives long-term performance and aligns the interests of our current named executive officers with those of our stockholders.



•

Equity incentive awards were subject to a four-year vesting period to further emphasize long-term performance and commitment to the Company.



•

The Company's Executive Incentive Plan incorporated a financial performance measure that was quantifiable and measurable. For 2017,2018, the Committee utilized one incentive pool, funded with 8% of the Company's adjusted operating income, from which cash and equity incentive compensation was awarded to the named executive officers.officers that participated in the Executive Incentive Plan.



•

Each current named executive officer is employed at-will and is expected to demonstrate strong personal performance in order to continue serving as a member of the executive team.



•

The Committee maintains stock ownership guidelines which, along with the design of equity incentive awards, promotes long-term executive stock ownership and aligns executive interests with those of our stockholders. As of the date of this Proxy Statement, all of the current named executive officers exceed these ownership guidelines.




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        The Compensation Committee believes that our executive compensation program has played a significant role in our ability to drive financial and operating results and align the interests of our executive officers with the interests of our stockholders. Although the financial market environment was strong during 2017, theThe operating environment for active asset managers in 2018 remained challenging, as the low-growth, low interest rate environment withflows toward passive strategies remained steady in a high correlation among asset classes continued during most of 2017 resulting in investors continuing to favor passively managed index and exchange-traded funds over actively managed funds. These factors, alongvolatile market that concluded with the uncertainty caused byworst quarter for U.S. equities since 2011. Trade disputes, geopolitical tensions and uncertain global growth rates contributed to the Departmentmarket conditions. The industry continues to feel the




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impact of fee pressure, broker-dealers reducing the number of productsproduct rationalization on theirbroker-dealer platforms and evolving customer preference.

        Given these challenges,the challenging industry environment, our senior management team developedcontinued to execute on the following strategic initiatives to help reposition the Company in an industry undergoing significant change:Company: (1) strengthening our investment management resources, processes and results; (2) reinvigorating our product line and sales; (3) continuing the evolution of our broker-dealer to a self-sustaining, competitive and profitable entity; and (4) focusing investment on support of our business model, while improving operating efficiency. Following is a summary of the progress we made on these strategic initiatives during 2017:2018:

•

Moved more fully to team-based portfolio management for manyCompleted targeted pricing adjustments on selected funds and completed the merger of our funds to balance the management, process execution and succession planning for those funds.



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Fortified the investment management research team with six additional analysts and implemented a central data collaboration warehouse to capture and leverage our intellectual capital.



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Implemented a client relationship management tool to facilitate the aggregation of sales data and targeted sales initiatives.



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Merged theremaining Waddell & Reed Advisors Funds into the Ivy Funds family, resulting in operational efficiency and added fund-level scale. The initial round of fund mergers occurred in October 2017 with the final round of mergers closing in February 2018.



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Realigned field resources under a new market structure model to facilitate local management accountability and enhance collaboration.



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Continued to add analyst resources, realign certain portfolio management teams and implement significant enhancements to our investment advisory programstechnology that facilitates information sharing and financial planning capabilities, referred to as "Project E", including the launch of MAP Navigator, an open architecture advisory program.collaboration across teams.



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Further developed and implemented measures designedContinued to comply with the Department of Labor's new fiduciary standard.enhance data capabilities to inform targeted sales strategies across all sales channels.



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EstablishedContinued to expand advisory product lineup, including the addition of a project management organization to drive transparencythird-party program that offers both ETFs and accountability and to ensure the right focus of our resources through enterprise-wide prioritization.mutual funds with multiple portfolio options



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Created aReduced the broker-dealer real estate footprint to align more flexible capital return policy that is designedclosely with an industry-standard independent model, while enhancing the payout grid for affiliated advisors to allow us to invest inbe among the business, support ongoing operations and maintain a strong balance sheet, while providing a competitive return to stockholders through quarterly dividends and share repurchases, including up to $250 million of share repurchases through 2019.industry's best-in-class.



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Announced aRealigned the broker-dealer field services model to deliver more robust practice development resources, while expanding recruiting and creating an elite service group for top advisors.



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Reduced the pace of advisor attrition, while increasing overall advisor productivity.



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Achieved our goal to addof adding $30 to 40 million, on a 2019 run-rate basis, to pre-tax income from implementationthrough targeted cost reductions, while making targeted investments in growth areas.



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Instituted enhanced efficiency and accountability through an enterprise project management organization, with a focus on the deliberate allocation of the strategic initiativesour resources.



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Advanced our culture by 2019, of which approximately $20 million was achievedfocusing on our core values and further investing in our people through the end of 2017.talent management, employee experiences, diversity and inclusion and total rewards.

        Key financial measures and operational highlights from 20172018 include the following:

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Earnings per share of $1.69$2.28 compared to $1.90$1.69 in 2016.2017.



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Net income attributable to the Company of $141.3$183.6 million compared to $156.7$141.3 million in 2016.2017.






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Operating revenues of $1.2 billion compared to $1.2 billion in 2016.2017.



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Operating income of $241.2$222.0 million compared to $251.9$219.8 million in 2016.2017.



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An operating margin of 20.8%19.1% compared to 20.3%19.0% in 2016.2017.



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Cash and investments at year endyear-end remained strong increasingat $849.1 million compared to $908.3 million from $883.9 million at 2016 year end.2017 year-end. Our liquidity position allowed us to return $189.8$217.1 million to stockholders in 20172018 (compared to $202.6$189.8 million in 2016)2017) through $154.0$81.2 million in regular annual dividends and $35.8$135.9 million in stock repurchases.








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Stock price appreciationTable of approximately 15% and total shareholder return of approximately 26% in 2017.