Over the past fourfive years, we have continually recruited new talent to our Board to increase diversity of thought and experience and to better align overall Board capability with our strategic focus. During this time, our Chairman/CEO and our Lead Independent Director have focused considerable attention on Board refreshment and we have added sixseven new directors (seven should Alvaro Monserrat be elected at the Annual Meeting) with skill sets needed to help navigate the fast-changing environment impacting our business. As a result, our overall Board composition has been significantly altered across a number of important aspects creating a vibrant Board culture and unrelenting focus on creating shareholder value over the long term.

8

 

Below is a graphic illustration of the changes in our Board over the past fourfive years:

 

Seacoast Board of Directors

11

 

Currently, our board has the following characteristics:

  

Seacoast Policy:  Ensure a balanced mix of directors with a deep knowledge of Seacoast and its markets, as well as new members with fresh perspectives.	Seacoast Policy:  Build a diverse board with experience aligned with our strategic mission.

 

Since 2013, we have managedmade the Board talent pipeline and:following changes to the Board:

·

added three women to our Board;

·

added expertise in the areas of regulatory matters, risk management, talent acquisition, corporate governance, credit management, strategic planning, investment banking and technology; and

·

transitioned four retiring long-tenured directors.directors; and

Should Alvaro Monserrat be elected at the Annual Meeting, we will have reduced the average tenure of our non-executive directors from 13.7 years to 9.5 years and decreased the average age by nearly 6.8 years.

·

reduced the average tenure of our non-executive directors from 13.7 years to 9.4 years and decreased the average age by nearly 5.8 years.

 

129

 

 

Our Board is committed to identifying, appointing and developing directors who reflect the diverse profiles of our existing and prospective customers, have experience and expertise aligned with our strategic objectives, and who can add significant value to the Board’s efforts to oversee Seacoast on behalf of our shareholders. Constructing an effective Board and positioning it for success are key objectives for Seacoast. Under our Independent Lead Director Goldman’s guidance, we have made significant progress in expanding the experience of the Board. These outcomes have increased overall Board effectiveness while increasing its agility and the velocity of decision making, which are critical inputs in the governance process. Under Mr. Goldman’s leadership, the Board is well-positioned to fulfill its duties to our shareholders and meet the evolving needs of Seacoast.Corporate Governance Framework

13

 

Our Corporate Governance Framework

Board Independence	·  Assuming the electionA total of director nominee Monserrat, 11 of our 14 directors, will beor over 75% are considered independent. ·  Our CEO is the only member of management who serves as a director.
Board Refreshment & Diversity	·  We seek a board that, considered as a group, will possess a diversity of experience which may, at any one or more times, includeand differences with respect to personal, educational or professional experience, gender, ethnicity, national origin, geographic representation, community involvement and age. ·  We have a mix of new and longer tenured directors to help ensure fresh perspectives as well as continuity and experience. The average tenure of our non-management directors is 9.59.4 years. ·    In the event that director nominee Monserrat is elected to the Board, we have added 8 new directors to our Board since 2012, including three women.
Board Committees	·  We have four standing Board committees—Audit; Compensation and Governance (“CGC”); Enterprise Risk Management (“ERMC”); and Strategy and Innovation (“S&I”). ·  The Audit Committee and CGC consist entirely of independent, non-management directors. ·  Chairs of the committees shape the agenda and information presented to their committees.
Strong Independent Lead Director	·  Our independent directors elect an independent lead director. ·  Our independent lead director chairs regularly scheduled executive sessions, without management present, at which directors can discuss management performance, succession planning, board informational needs, board effectiveness or any other matter. ·  Our lead independent director strongly influences our strategy and direction, and facilitates our annual strategic planning sessions.
Board Oversight of Strategy & Risk	·  Our Board has ultimate oversight responsibility for strategy and risk management. ·  Our Board directly advises management on development and execution of the company’sCompany’s strategy and provides oversight through regular updates. ·  The S&I Committee helps ensure that the strategic vision for the Company is fulfilled by challenging, proposing, reviewing, and monitoring strategic initiatives of the Company relating to M&A activity, capital allocation and planning, business model transformation, innovation, and shareholder relations. ·  Through an integrated enterprise risk management process, key risks are reviewed and evaluated by the ERMC before they are reviewed by the Board. ·  The ERMC oversees the integration of risk management at Seacoast, monitors the risk framework and makes recommendations to the Board regarding the Company’s risk appetite. ·  The Audit Committee oversees the Company’s financial risk management process. ·  The CGC oversees risks and exposures related to the Company’s corporate governance, director succession planning, and compensation practices to ensure that they do not encourage imprudent or excessive risk-taking. ·    The CGCrisk-taking, and assists the Board with its leadership assessment and CEO succession.succession planning.
Accountability	·  We have a plurality vote standard for the election of directors, with a director resignation policy for uncontested elections. ·  Each common share is entitled to one vote. ·  We have a process by which all shareholders may communicate with our Board, a Board committee or non-management directors as a group, or other individual directors.
Director Stock Ownership	·  A minimum stock holding of three times the annual base retainer is required for each director, to be acquired within four years of joining the Board.
Succession Planning	·  CEO and management succession planning is one of the Board’s highest priorities.  Our Board ensures that appropriate attention is given to identifying and developing talented leaders.
Board Effectiveness	·  Our Board strives to continually improve its effectiveness. ·The Board meets in a director-only session prior to each regular meeting to discuss the Company’s business condition. Each regular meeting is followed by an executive session of non- managementnon-management directors led by the lead independent director. ·  The Board and its independent committees annually evaluate their performance.
Open Communication	·  Our Board receives regular updates from business leaders regarding their area of expertise. ·  Our directors have access to all management and employees on a confidential basis. ·  Our Board and its committees are authorized to hire outside consultants at their discretion and at the Company’s expense.

 

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CORPORATE GOVERNANCE AT SEACOAST

CORPORATE GOVERNANCE AT SEACOAST

Our goal is to maintain a corporate governance framework that supports an engaged, independent board with diverse perspectives and judgment that is committed to representing the long-term interests of our shareholders. We believe our directors should possess the highest personal and professional standards for ethics, integrity and values, as well as practical wisdom and mature judgment. Therefore, our Board, with the assistance of management and the CGC, regularly reviews our corporate governance principles and practices.

 

Corporate Governance Principles and Practices

 

Governance Policies

 

Important elements of our corporate governance framework are our governance policies, which include:

 

·

our Corporate Governance Guidelines

·

our Code of Conduct (applicable to all directors, officers and employees)

·

our Code of Ethics for Financial Professionals (applicable to, among others, our chief executive officer and chief financial officer); and

·

charters for each of our Board Committees

 

You may view these and other corporate governance documents at our investor relations website located atwww.SeacoastBanking.com, or request a copy, without charge, upon written request to Seacoast Banking Corporation of Florida, c/o Corporate Secretary, 815 Colorado Avenue, P. O. Box 9012, Stuart, Florida 34995.

 

Board Independence

Our governance principles provide that a substantial majority of our directors will meet the criteria for independence required by Nasdaq. If director nominee Monserrat is elected by our shareholders at the Annual Meeting, over 78% of our Board will meet our criteria for independence.

 

The Company’s common stock is listed on the Nasdaq Global Select Market (“Nasdaq”). Nasdaq requires that a majority of the Company’s directors be “independent,” as defined by the Nasdaq rules. Generally, a director does not qualify as an independent director if the director (or, in some cases, a member of the director’s immediate family) has, or in the past three years had, certain relationships or affiliations with the Company, its external or internal auditors, or other companies that do business with the Company. The Board of Directors has determined that a majority of the Company’s directors are independent directors under the Nasdaq rules. The Company’s current independent directors are: Dennis J. Arczynski, Stephen E. Bohner, Jacqueline L. Bradley, H. Gilbert Culbreth, Jr., Julie H. Daum, Christopher E. Fogal, Maryann Goebel, Roger O. Goldman, Timothy S. Huval, Alvaro J. Monserrat and Thomas E. Rossin. Our governance principles provide that a substantial majority of our directors will meet the criteria for independence required by Nasdaq. Over 78% of our Board meets our criteria for independence.

 

15

Board Leadership Structure

 

Board leadership is provided through: 1) a combined Chairman and CEO role, 2) a clearly defined and substantial lead independent director role, 3) active committees and committee chairs, and 4) talented directors who are committed and independent-minded. At this time, the Board believes this governance structure is appropriate and best serves the interests of our shareholders.

 

Board Leadership Structure

Board leadership is provided through: 1) a combined Chairman and CEO role, 2) a clearly defined and substantial lead independent director role, 3) active committees and committee chairs, and 4) talented directors who are committed and independent-minded. At this time, the Board believes this governance structure is appropriate and best serves the interests of our shareholders.

Chairman and CEO Roles

The Board of Directors periodically assesses who should serve as Chairman and as Chief Executive Officer, and whether the offices should be combined or separate, with appropriate consideration of current facts and circumstances.

The Company’s current Chief Executive Officer, Dennis S. Hudson, III, also serves as the Chairman of the Board of Directors. He has held the post of Chief Executive Officer for the past 1920 years, Chairman for the past 1213 years, President for the nine10 years prior to being named Chairman, and has also served as Chief Executive Officer of the Bank for the past 2425 years. During this time, Mr. Hudson has led the Company through its growth from a local community bank to the fourth largest Florida bank with nearly $4.7$5.8 billion in assets and 4951 full-service branches and five commercial banking centers in 15 counties today.as of year-end 2017. In light of Mr. Hudson’s significant leadership tenure with the organization, his breadth of knowledge of the Company and his relationship with the institutional investor community, as well as the efficiencies, accountability, unified leadership and cohesive corporate culture that this structure provides, the Board of Directors believes it is appropriate that he serve as both Chief Executive Officer and Chairman.

Independent Lead Director

To further strengthen our corporate governance, environment, our independent directors select a lead director from the independent directors if the positions of Chairman and Chief Executive Officer are held by the same person or if the Chairman of the Board is not an independent director. The role of our Lead Independent Director is described in our Corporate Governance Guidelines and in the table at the end of this section.

Our current Lead Independent Director is Mr. Roger Goldman. He has served in this capacity since 2012. Mr. Goldman’s experience includes a number of high profile leadership assignments at or on behalf of shareholders or other constituent groups at organizations significantly larger than Seacoast. The depth and breadth of his experience and his willingness and capacity to dedicate a significant portion of his time on behalf of the Board and our shareholders are key inputs in our transformative efforts. We aspire to be a significantly larger organization. Our ability to attain our aspirations depends heavily on our success in developing and implementing innovative products and services that are easily accessible, secure, and that make a meaningful difference to our customers. His vision for our future and his “operator” level understanding of the required strategies, investments, talent needs, capabilities, infrastructure and the associated risks provide our Board with an independent and objective perspective on our management.

Mr. Goldman’s affiliation with Seacoast enhances our reputation within the industry, improves the performance and effectiveness of the Board, and enhances our exposure with the investment community. He is uniquely suited to lead the Board during the normal course of business and in its day-to-day interactions with and oversight of management.

In addition to Mr. Goldman’s efforts to ensure an effective and results-oriented Board, he engages on the Board’s behalf with management and employees across the Company. Frequent active, independent, and effective engagement by Mr. Goldman aids our Board of Directors in making informed decisions on our business and risk strategies. He also is well-positioned to assess our executive and managerial talent, succession readiness plans, and leadership development efforts, which are key to our success. Finally, his accessibility and high level of visibility within the Company provides employees with ongoing opportunities to raise issues or concerns free from management’s direct influence. Mr. Goldman provides a wide array of highly valuable services to Seacoast. We believe the associated replacement costs if he were to step down from the Lead Independent Director role are significantly greater than the costs that we would incur to engage a replacement to replicate the services he provides to the Board and our shareholders.

Mr. Goldman devotes significant time to serving as our Lead Independent Director. While the structure of his role and scope of responsibilities are significantly greater than most other US companies, we view his contributions and level of commitment as material to the Company’s success. In order to induce Mr. Goldman to accept the role of Lead Independent Director and ensure that he is paid appropriately for his contributions and time, the Board of Directors approved a compensation package that is discussed below in the “Director Compensation” section under “Lead Independent Director Compensation and Agreement.”

Shareholders.

BOARD LEADERSHIP STRUCTURE - DEFINITION OF ROLES

Non-Management Executive Sessions

In order to give a significant voice to our non-management directors, our Corporate Governance Guidelines provide for executive sessions of our non-management and independent directors. Our Board believes this is an important governance practice that enables the Board to discuss matters (such as strategy, CEO and management performance, succession planning, and board effectiveness) without management present.

Our non-management directors generally meet in executive session following each regularly scheduled Board meeting. Our independent directors meet separately from the other directors in regularly scheduled executive sessions at least twice annually, and at such other times as may be deemed appropriate by the Company’s independent directors. Our Lead Independent Director presides at all executive sessions of the independent directors and non-management directors, and sets the agenda for such executive sessions. Any independent director may call an executive session of independent directors at any time. The independent directors met eightfour times in executive session in 2016.2017.

Committee Structure & Other Matters

Oversight is also provided through the extensive work of the Board’s committees – Audit Committee; Compensation and Governance Committee (“CGC”); Enterprise Risk Management Committee (“ERMC”); and Strategy and Innovation (S&I) Committee – in key areas such as financial reporting, internal controls, compliance, corporate governance, succession planning, compensation programs, strategic planning and risk management. The Audit Committee and the CGC consist entirely of independent, non-management directors.

In addition, at the end of each year, the Board and each of its committees review a schedule of agenda topics to be considered in the coming year. Each Board and committee member may raise subjects that are not on the agenda at any meeting and suggest items for inclusion in future agendas.

The Company believes that the foregoing structure, policies, and practices, when combined with the Company’s other governance policies and procedures, provide appropriate opportunities for oversight, discussion, evaluation of decisions and direction from the Board of Directors.

Shareholder Engagement and Board Responsiveness

The company communicatesCompany engages with our shareholders in a numberto ensure that the Board and management are aware of ways:and address issues of importance to our investors. We regularly meet with various institutional shareholders and welcome feedback from other shareholders, which is considered by the Board or appropriate Board committee.

The Company’s Corporate Governance Guidelines provide for a process by which shareholders may communicate with the Board, a Board committee or the non-management directors as a group, or other individual directors. Shareholders who wish to communicate with the Board of Directors, a Board committee, the Lead Independent Director, other directors or an individual director may do so by sending written communications addressed to the Board of Directors, a Board committee or such group of directors or individual director, c/o Corporate Secretary, Seacoast Banking Corporation of Florida, 815 Colorado Avenue, P.O. Box, 9012, Stuart, Florida 34995. All communications will be compiled by the Company’s Secretary and submitted to the Board of Directors, a committee of the Board of Directors or the appropriate group of directors or individual director, as appropriate, at the next regular meeting of the Board.

Since 2009 the Company has annually included in its proxy statement a separate advisory vote on the compensation paid to its executives, as disclosed in the Compensation Discussion and Analysis, the compensation tables and related proxy disclosure, commonly known as a “say-on-pay” proposal. Independent surveys have shown that an annual vote is the preferred frequency of most institutional investors. Our Board also endorses an annual vote as we believe it gives shareholders an opportunity to voice their concerns with respect to executive compensation. Shareholder support of our say-on-pay proposal at our 20162017 annual meeting declinedincreased compared to the prior years.year. (See “Outcome of our 20162017 Say-On-Pay vote” in the table below.) Shareholder support of directors standing for re-election at the 20162017 annual meeting also droppedincreased compared to the prior year. To better understand shareholder interests and concerns, we expanded our shareholder outreach in 2016, taking the following actions:

In these meetings, our shareholders expressed a wide range of viewpoints relating to our performance, compensation, governance and other matters. This engagement process was very informative and constructive.

Below are highlights of the feedback we have received from shareholders and our Board’s response:

¹ Non-GAAP measure; refer to Appendix A - Informtion Regarding Non-GAAP Financial Measures.

The Board and the CGC will continue to monitor best practices, future advisory votes on executive compensation and other shareholder feedback to guide it in addressing issues of importance to our investors.

Management Succession Planning and Development

Our Board understands that a strong succession framework reduces Company risk and therefore ensures that appropriate attention is given to identifying and developing talented leaders. Consequently, we have a robust management succession and development plan which is reviewed and updated annually.

The Board maintains oversight responsibility for succession planning with respect to the position of CEO and monitors and advises management regarding succession planning for other executive officers. The Board’s goal is to have a long-term and continuing program for effective senior leadership development and succession. The Board also has short-term contingency plans in place for emergency and unexpected occurrences, such as the sudden departure, death, or disability of our CEO or other executive officers.

The CGC, working with the CEO, annually evaluates succession planning at the senior levels of management and reports the results of such evaluation to the Board, along with recommendations on management development and succession planning. The updated succession plan is reviewed and approved by the Board to ensure that competencies are in alignment with our strategic plan. The annual review of the CEO succession planning includes a review of specific individuals identified as active CEO succession candidates, and each of those individuals is reviewed with respect to progress in his or her current job position and progress toward meeting his or her defined leadership development plan. The Company’s CEO and senior management are similarly responsible for supporting “next generation” leadership development by: identifying core talent, skills and capabilities of future leaders within the Company; assessing the individuals against leadership capabilities; identifying talent and skill gaps and development needs; assisting with internal candidate development; and identifying significant external hiring needs.

¹Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

The Board and individual Board members may advise, meet with advise and assist CEO succession candidates and become familiar with other senior and future leaders within the Company. Directors are encouraged to become sufficiently familiar with the Company’s executive officers to be able to provide perspective on the experience, capabilities and performance of potential CEO candidates. The Board urges senior management, as well as other members of management who have future leadership potential within the Company, to attend and present at Board meetings so that each can be given appropriate exposure to the Board. The Board may contact and meet with any employee of the Company at any time, and are encouraged to make site visits, to meet with management, and to attend Company, industry and other events.

Executive Officers

Executive officers are appointed annually at the organizational meeting of the respective Boards of Directors of Seacoast and the Bank, to serve until the next annual meeting and until successors are chosen and qualified.

Dennis S. Hudson, III

Age: 61 Education: MBA, Florida State University  Tenure with Seacoast: 40 years		CURRENT ROLE:Chairman and CEO
		Chairman and CEO of Seacoast and Bank
		SELECT PRIOR EXPERIENCE:
		·   Chairman of Seacoast since July 2005
	·   CEO of Seacoast since June 1998
	·   Chairman and CEO of the Bank since 1992
	·   Director of Seacoast since 1984
	·   Over 40 years of banking experience with Seacoast
Age: 62 Education: MBA, Florida State University Tenure: 41 years
		OTHER AFFILIATIONS/CERTIFICATIONS:
		OTHER AFFILIATIONS/CERTIFICATIONS:
		·   Member of board of directors and audit committee of Chesapeake Utilities Corporation, Dover, DEmember of board, audit and compensation committees
		·  Board member,   Miami Branch of Federal Reserve Bank of Atlanta Board from 2005 to 2010
	·   Independent director,   PENN Capital Funds, a mutual fund group managed by PENN Capital Management, independent director
	·   ServedServes on boards of Martin County YMCAHealth System and Community Foundation Council on Aging, American Heart Association,for Palm Beach and as Chairman of the Economic Council of Martin Countycounties

Stephen A. Fowle

Charles M. Shaffer

Age: 51 Education: MBA, Northwestern University Tenure with Seacoast: 2 years		CURRENT ROLE:EVP, CFO and Head of Strategy   EVP and former CFO of Seacoast and Bank from April 2015 to March 15, 2017
		SELECT PRIOR EXPERIENCE:
		·  CFO   EVP and Community Banking Executive from October 2013 to March 2017
		·   SVP and Controller of WSFS Financial Corporation, a $4.9 billion publicly-traded financial institution in Wilmington, Delaware,Bank from 2005 to March 2015  2013
		·  CFO at Third Federal Savings   Diverse experience from multiple roles including strategy, corporate finance, traditional sales, and Loan Association of Cleveland, MHC, an $8+ billion multibank holding company of 15+ subsidiaries, from 2000 to 2004 alternative sales platforms
Age: 44 Education: MBA, University of Central Florida Tenure: 20 years		OTHER AFFILIATIONS/CERTIFICATIONS:
		·   CPA licensed in Florida
		·   Chartered Global Management Accountant
		·   Board member, United Way of Martin County
		·   Board member,Girl Scouts of Southeast Florida
		·   Florida Bankers Association, Government Relations Committee Member Financial Executives International
		·   Board Member,Armellini Logistics Corporation

Charles K. Cross, Jr.

Age: 59 Education: BSBA, University of Florida Tenure with Seacoast: 5 years		CURRENT ROLE: EVP of Commercial Banking
		EVP of Commercial Banking of Bank since July 2013
		SELECT PRIOR EXPERIENCE:
	·    Seacoast’s SVP & Commercial Market Executive for Palm Beach County from March 2012 to July 2013
	·   Over 30 years of banking experience and thorough knowledge ofin Palm Beach and Broward County markets
	·   Market leader for EverBank in Palm Beach County, FL from August 2010 to March 2012
Age: 60  Education:BSBA, University of Florida Tenure:6 years
		OTHER AFFILIATIONS/CERTIFICATIONS:
	·   Chairman, District Board of Trustees of Palm Beach State College
	·   Past board member of Florida Atlantic University College of Business Dean’s Council, Economic Council of Palm Beach County, West Palm Beach Chamber of Commerce, Business Development Board of Palm Beach County and Black Business Investment Corporation.

David D. Houdeshell

Age: 56 Education: MBA, The Stonier Graduate School of Banking Tenure with Seacoast: 7 years		CURRENT ROLE:
		EVP and Chief Risk Officer of Seacoast and Bank since May 2015
		SELECT PRIOR EXPERIENCE:
	·   EVP and Chief Credit Officer of Seacoast and Bank since June 2010
	·   EVP and Credit Administrative Executive for The South Financial Group in Greenville, SC for 3 years
	·   Chief Credit Officer of Bombardier Capital, a financial services entity of a global transportation manufacturer, for 4 years
		OTHER AFFILIATIONS/CERTIFICATIONS:Age: 57 Education: MBA, The Stonier Graduate School of Banking   Tenure:  8 years
	OTHER AFFILIATIONS/CERTIFICATIONS: ·Member of audit & compliance committee of Martin Health System, Stuart, FL

Juliette P. Kleffel

		EVP and Community Banking Executive
		SELECT PRIOR EXPERIENCE:
		·   EVP and Community Banking Executive since January 2017
		·   EVP and Commercial Sales Leader for BankFIRST prior to acquisition by Seacoast in October 2014
		·   Held various positions  managing Government Lending/SBA, Treasury Sales, Marketing, as well as Commercial Lending with BankFIRST since November 2000
		·   Over 20 years of retail banking experience in the Orlando Market
Age: 47 Education: The Stonier Graduate School of Banking   Tenure:  3 years		OTHER AFFILIATIONS/CERTIFICATIONS:
		·   Executive Director for the National Entrepreneur Center
		·   Director for the West Orange County Chamber of Commerce
		·   Board Member for the Central Florida YMCA Finance Committee, Garden Theatre, The Gardens of DePugh Nursing Home, and Edgewood Children’s Ranch
		·   Certified Lender Business Banker

Charles M. Shaffer

Management Stock Ownership

As of the Record Date, based on available information, all directors, director nominees and executive officers of Seacoast as a group (19(18 persons) beneficially owned approximately 1,286,4001,424,700 outstanding shares of common stock, constituting 3.2%3.0% of the total number of shares of common stock outstanding at that date. In addition, as of the Record Date, various subsidiaries of Seacoast, as fiduciaries, custodians, and agents, had sole or shared voting power over 49,62146,512 outstanding shares, or 0.1% of the outstanding shares, of Seacoast common stock, including shares held as trustee or agent of various Seacoast employee benefit and stock purchase plans.

Director Nomination Process

The CGC serves as the nominating committee of the Company. The committee annually reviews and makes recommendations to the full Board of Directors regarding the composition and size of the Board of Directors and its committees, and if determined necessary, recommends potential candidates to the Board for nomination for election to the Board by the Company’s shareholders. The CGC’s goal is to ensure that the Board of Directors consists of a diverse group of members with the proper expertise, skills, personal attributes and professional backgrounds who, individually and collectively, are appropriate to achieve the Company’s strategic vision and business objectives, and best serve the Company’s and shareholders’ long-term interests.

As part of the assessment process, the CGC evaluates whether the addition of a director or directors with particular attributes, experience, or skill sets could enhance the Board’s effectiveness. The CGC identifies director candidates through business, civic and legal contacts, and may consult with other directors and senior officers of the Company. The CGC may also hire a search firm to help it identify, evaluate and conduct due diligence on potential director candidates. Once a candidate has been identified, the CGC confirms that the candidate meets the minimum qualifications for director nominees, and gathers information about the candidate through interviews, questionnaires, background checks, or any other means that the CGC deems to be helpful in the evaluation process. Director candidates are interviewed by the Chairman of the CGC and at least one other member of the committee. Each member of the committee participates in the review and discussion of director candidates. Where appropriate, directors who are not on the CGC are encouraged to meet with and evaluate the suitability of potential candidates. The CGC then evaluates the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board in relation to the Company’s strategic goals, and recommends nominees to the Board. The full Board formally nominates candidates to be included in the slate of directors presented for shareholder vote based upon the recommendations of the CGC following this process.

Given the evolving needs and business strategy of the Company, the CGC believes that the Board of Directors as a whole should have diversity of thought and experience, which may, at any one or more times, include differences with respect to personal, educational or professional experience, gender, ethnicity, national origin, geographic representation, community involvement and age. However, the CGC does not assign specific weights to any particular criteria. Its goal is to identify nominees that, considered as a group, will possess the talents and characteristics necessary for the Board of Directors to fulfill its responsibilities and advance our strategic mission. In addition, each director must have the qualifications set forth in the Company’s Bylaws, as well as the personal characteristics and core competencies described below as our Director Eligibility Guidelines:

The CGC also considers numerous other qualities, skills and characteristics when evaluating director nominees, such as a candidate’s:

In addition to nominations by the CGC, any Company shareholder entitled to vote generally on the election of directors may recommend a candidate for nomination as a director by providing advance notice of such proposed nomination to the Corporate Secretary at the Company’s principal offices. The written submission must comply with the applicable provision in the Company’s Articles of Incorporation. To be considered, recommendations with respect to an election of directors to be held at an annual meeting must be received not less than 60 days nor more than 90 days prior to the anniversary of the Company’s last annual meeting of shareholders (or, if the date of the annual meeting is changed by more than 20 days from such anniversary date, within 10 days after the date that the Company mails or otherwise gives notice of the date of the annual meeting to shareholders), and recommendations with respect to an election of directors to be held at a special meeting called for that purpose must be received by the 10th day following the date on which notice of the special meeting was first mailed to shareholders. Recommendations meeting these requirements will be brought to the attention of the Company’s CGC. Candidates for director recommended by shareholders in compliance with these provisions and who satisfy the Director Eligibility Guidelines will be afforded the same consideration as candidates for director identified by Company directors, executive officers or search firms, if any, employed by the Company. In 2016,2017, no shareholder nominee recommendations were received.

Board Evaluation Process

BOARD MEETINGS AND BOARD COMMITTEES 

Board Meeting Attendance

The Board of Directors held eightfour regular meetings and twosix special meetings during 2016. All2017. Each of the directors attended at least 75% of the total number of meetings of the Board of Directors and committees on which they served.

Annual Meeting Attendance

TenSix of the 1214 then-incumbent Directors attended the Company’s 20162017 annual shareholders’ meeting. The Company encourages all of its directors to attend its shareholders’ meetings but understands that situations may arise that prevent such attendance.

Board Committees

The Company’s Board of Directors has four standing permanent committees: the Audit Committee, the Compensation and Governance Committee, the Enterprise Risk Management Committee, and the Strategy and Innovation Committee. These committees serve the same functions for the Company and the Bank. The current composition of each Company committee is set forth in the table underProxy Summary - Board and Governance Highlights.Highlights.

Each committee has a charter specifying such committee’s responsibilities and duties. The Audit Committee and CGC charters are reviewed annually. These charters are available on the Company’s website at www.SeacoastBanking.com or upon written request.

Audit Committee

Compensation and Governance Committee (“CGC”)

Enterprise Risk Management Committee (“ERMC”)

Strategy and Innovation (“S&I”) Committee

The Board’s Role in Strategy and Risk Oversight

The Board of Directors actively reviews our long termlong-term strategy and the plans and programs that management develops to implement our strategy. While the Board meets formally at least once every year to consider overall long termlong-term strategy, it generally reviews various elements of strategy, and our progress towards implementation, at every regular meeting. Under the leadership of Lead Independent Director Goldman, our directors are active in our strategic planning process and exercise robust oversight of and challenges to both our strategies and our implementation of thesuch strategies.

The Board believes that strategic risk is an exceptionally important risk element among a number of risks that the Company faces and works to ensure that this risk is appropriately managed in the context of the rapidly changing environment in which the Company and its customers operate. The Board does not believe this risk can be delegated and the Board as a whole regularly spends a significant amount of its time engaged with management and in executive session discussing our long termlong-term strategy, the effectiveness of our plans to implement such strategy, and our progress against those plans.

The Board believes that an integral part of managing strategic risk is the appointment of a strong lead director to: i) regularly engage with the CEO on an ongoing basis, ii) interact from time to time with other key members of management and other leaders throughout the Company to examine alignment around our chosen long-term strategy, and iii) ensure that the Board’s views are considered as our strategy evolves. The Board strongly believes that having an active and engaged lead director better ensures that the Board as a whole can serve as a credible challenge to management’s plans and programs and increases transparency into the fast-paced changes management is implementing.

The Board’s committees also work to ensure that we have the right alignment to support our long-term strategic direction including: (i) an active Board recruitment process focused on developing or acquiring the skill, experience and attributes of both individuals and the Board as a whole needed to support our strategy, (ii) ensuring an appropriate link is established between our compensation design and our long-term strategy to encourage and reward the achievement of our long-term goals and protect shareholder value by discouraging excessive risk, and (iii) ensuring that our risk management structure can effectively manage the inherent risks that underlie our strategy.

Other types of risks that the Company faces include:

Our ERMC regularly accessesassesses our overall risk profile and oversees our risk management programs which are implemented by our chief risk officer.

AUDIT COMMITTEE REPORTAudit Committee Report

The Audit Committee is currently comprised of threefour directors, Christopher E. Fogal (Chair), Dennis J. Arczynski Maryann Goebel, and Maryann Goebel.Alvaro J. Monserrat.

The purpose of the Audit Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Seacoast Banking Corporation of Florida (the “Company”) in its general oversight of the Company’s accounting, auditing and financial reporting practices. Management is primarily responsible for the Company’s financial statements, systems of internal controls and compliance with applicable legal and regulatory requirements. The Company’s independent registered public accounting firm, Crowe Horwath LLP, for the year ended December 31, 20162017 is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States, as well as expressing an opinion (pursuant to Section 404 of the Sarbanes-Oxley Act of 2002) on the effectiveness of internal control over financial reporting.

The members of the Committee are not professional auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm, nor can the Committee certify that the Company’s registered public accounting firm is “independent” under applicable rules. The Committee serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the basis of the information it receives, discussions with management and the independent registered public accounting firm, and the experience of the Committee’s members in business, financial and accounting matters. To carry out its responsibilities, the Committee held nineeight meetings in 2016.2017.

In the performance of its oversight responsibilities, the Committee has reviewed and discussed with management and Crowe Horwath LLP the audited financial statements of the Company for the year ended December 31, 2016.2017. Management represented to the Committee that all financial statements were prepared in accordance with accounting principles generally accepted in the United States and that these statements fairly present the financial condition and results of operations of the Company at the dates and for the periods described. The Committee has relied upon this representation without any independent verification, except for the work of Crowe Horwath LLP. The Committee also discussed these statements with Crowe Horwath LLP, both with and without management present, and has relied upon their reported opinion on these financial statements. The Committee’s review included discussion with Crowe Horwath LLP of the matters required to be discussed under Public Company Accounting Oversight Board standards.

With respect to the Company’s independent registered public accounting firm, the Committee, among other things, discussed with Crowe Horwath LLP matters relating to its independence and received from Crowe Horwath LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Committee concerning independence.

On the basis of these reviews and discussions, and subject to the limitations of its role, the Committee recommended that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016,2017, for filing with the Securities and Exchange Commission.

The Audit Committee: 

Christopher E. Fogal, Chairman

Dennis J. Arczynski

Maryann Goebel

Alvaro J. Monserrat

March 14, 2017February 28, 2018

OWNERSHIP OF OUR COMMON STOCK SHARES

The tables below provide information regarding the beneficial ownership of our common stock as of the Record Date by:

As of the Record Date, 40,729,65646,982,399 shares of common stock were outstanding. Beneficial ownership is determined in accordance with SEC rules and regulations. Unless otherwise indicated, and subject to community property laws where applicable, the Company believes that each of the shareholders named in the tables below has sole voting and investment power with respect to the shares indicated as beneficially owned. Some of the information in the tables is based on information included in filings made by the beneficial owners with the SEC.

Principal Shareholders (5% Owners Exclusive of Directors and Officers)

The following table sets forth information regarding the number and percentage of shares of common stock held by all persons and entities known by the Company to beneficially own 5% or more of the Company’s outstanding common stock. The information regarding beneficial ownership of common stock by the entities identified below are included in reliance on reports filed by the entities with the SEC, except that the ownership percentage is based on the Company’s calculations.

¹ Non-GAAP measure; refer(1)    According to Appendix a Schedule 13G/A - Informtion Regarding Non-GAAP Financial Measures.filed by BlackRock, Inc. (“BlackRock”) on March 8, 2018 with the SEC with respect to Seacoast common stock beneficially owned as of February 28, 2018, BlackRock, Inc. has sole voting power with respect to 6,073,777 shares of Seacoast common stock and sole dispositive power with respect to 6,156,934 shares of Seacoast common stock. The Schedule 13G/A provides that BlackRock is a parent holding company and that the shares of common stock listed on the Schedule 13G/A are owned by various subsidiaries of BlackRock. In addition, BlackRock reported that various persons have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock, and that no one person is known to have more than 5% of Seacoast common stock.

(2)    According to a Schedule 13G filed jointly by T. Rowe Price Associates, Inc., (“Price Associates”) and T. Rowe Price Funds on February 14, 2018 with the SEC with respect to Seacoast common stock beneficially owned as of December 31, 2017, T. Rowe Price Associates, Inc. has sole voting power with respect to 664,396 shares of Seacoast common stock and sole dispositive power with respect to 4,313,495 shares of Seacoast common stock. The Schedule 13G provides that Price Associates is an Investment Advisor and that the shares of common stock listed on the Schedule 13G are owned by various subsidiaries of Price Associates. In addition, Price Associates reported that in respect to securities owned by any one of the T. Rowe Funds, only the custodian has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, these shares of common stock, and that no one person has shared voting and dispositive powers with respect to the following number of shares of Seacoast common stock.

Ownership of Directors and Executive Officers

X* Less than 1%

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION & ANALYSIS

Executive Summary

20162017 Performance Considerations

The attainment ofOur strategic plan for 2017 focused on shareholder value creation, and the CGC once again used adjusted EPS¹ as an indicator that management is on the right path. The CGC determined the amount of $1.00 set the stageannual and long-term incentives to award to our named executive officers (“NEOs”) for the CGC’s2017 performance using a qualitative assessment of management’s performance and the resulting pay actions for 2016.performance. The assessment process included scorecards that identified shared and individual goals for the year. The CGC relied on scorecards for eachyear, with our adjusted EPS¹ target of our NEOs$1.28 serving as performance guidelines in arriving at pay decisions for our named executive officers (“NEOs”) in 2016.the primary consideration. Based on the CGC’s assessment of our adjusted EPS¹ performance and in the areas of operations, technology, innovation, risk, talent, and business transformation, our NEO’s received a rating of “exceeds” expectations. The incentive awards issued based on 2017 performance were granted in 2018. Grants made in 2017 were based on the scorecard assessment of performance in the prior year.

2016Our Executive Compensation Design Priorities and Prohibitions

¹ Non-GAAP measure; refer to Appendix A – Information Regarding Non-GAAP Financial Measures.

2017 NEO PAYPay

Our Executive Compensation Design Priorities and Prohibitions

The CGC is committed to establishing and maintaining an executive compensation philosophy that allows us to attain our business and talent objectives, is transparent, reflects a high standard of corporate governance, ensures that our incentive programs are sensitive to risk, and above all else, promotes and protects the interests of our shareholders. The CGC accomplishes these objectives by continuously assessing our executive compensation program and adhering to the following set of Design Priorities and Prohibitions.

Summary of Compensation Decisions in 20162017

For planning purposes, the CGC focuses on the sum of annual base salary paid during the performance year and the values it considers and approves for cash bonus valuebonuses and the new performance-based equity award earned forawards based on annual scorecard performance but granted in the performance year but approved in a subsequent year. We refer to this planning value as Total Direct Compensation or “TDC”. TDC provides a different perspective on pay than is provided by SCTP, which reflects the values shown in the summary compensation table less all other compensation. The CGC considered TDC in its decision process when determining the value of the total incentive award value to approve in 20172018 for 20162017 performance.

The following chart illustrates the relative emphasis of each pay element in relation to TDC, as disclosed in our 20162017 Summary Compensation Table (“SCT”). Base salary represents the sole component of TDC that is not “at risk” for performance. The percentage of TDC “at risk” would have increased in relation to fixed pay if our NEO’s received cash bonuses for 2016 performance rather than PRSUs.

2016 NEO Mix of Total Direct Compensation

In general, the CGC typically structures NEO pay so that at least one-half of TDC is structured as “at risk” incentive pay. The incentive pay portion of TDC is allocated to cash bonus and performance-based equity using target weightings of 25% to 35% and 65% to 75%, respectively. The value allocated to performance-based equity is further allocated into PSUs and options using target weightings of 65% and 35%, respectively. The CGC relies on this structure to ensure that both short-term and long-term incentive awards are fully reflective of performance for the year in which cash bonuses are earned and new target award values are determined and that performance-based equity serves as our primary form of incentive compensation. For 2016, the weightings used to allocate total incentive award values represented a departure from this philosophy given that 100% of each NEO’s total incentive was granted as performance-contingent and or performance-based equity for 2016 performance.

The CGC approved PRSU awards in lieu of cash bonuses for 2016 performance for three reasons:

PRSU target award values were developed for each of our continuing NEOs using the total incentive methodology described previously. This effort was led by our CEO, who is responsible for developing pay proposals for the management team, which are then presented to the CGC for consideration. The first step in the process involved the CEO’s assessment of each recipient’s performance, as defined by their contributions in helping Seacoast attain the goal of adjusted EPS¹ of $1.00 and in terms of individual goals defined on their scorecards.

Our CEO then developed total incentive compensation proposals for each of our continuing NEOs, relying on input from the CGC and to a lesser extent our Chief Human Resources Officer. In developing pay proposals for the NEOs, our CEO considered a number of factors, including: performance; the target value of past total incentive awards; the potential of each executive; flight risk and succession readiness; the holding power (retention) of prior equity awards, including performance-based equity awards granted in April 2017; relative internal value considerations; and market competitiveness. The total incentive values were then allocated to a bonus equivalent cash value and the target award values of performance-based equity.

Bonus equivalent cash values were converted into target PRSU values using an equity value adjustment factor of 1.4. The CEO and the CGC, with input from its consultant, relied on the equity adjustment factor to balance the different risk profiles of unrestricted cash and a restricted stock-settled award subject to service and risk conditions over a multi-year vesting period. The CEO, working in concert with the CGC, evaluated equity value adjustment factors from 1.2 to 1.5 times the bonus equivalent cash value. Based on input from the CEO and the CGC’s consultant, the CGC approved an equity value adjustment factor of 1.4 and an equity structure featuring three-year ratable vesting conditions tied to continuing service and Seacoast’s ongoing compliance with its Tier 1 Regulatory Capital requirement.

The following table summarizes the CGC’s actions in regards to 2016 bonus cash equivalent values, how it compared to 2015 cash bonuses, and the target value of PRSU awards issued in April 2017 for 2016 performance.

¹ Non-GAAP measure; refer to Appendix A - Informtion– Information Regarding Non-GAAP Financial Measures.

Cash Equivalent Bonus Values & Target PRSU Award Values for 2016