Notice of Annual Meeting of Stockholders

To Be Held May 7, 201510, 2018

TO OUR STOCKHOLDERS:

You are cordially invited to attend the Annual Meeting of Stockholders of E*TRADE Financial Corporation (“E*TRADE,” the “Company,” “us” or “we”), which will be held in the Washington Square Park Room at the Time Life Conference Center, 1271 Avenue of the Americas, Room #1 (2^nd Floor),InterContinental New York Times Square, 300 West 44th Street, New York, NY 10020,10036, on May 7, 201510, 2018 at 8:30 a.m. EDT, for the following purposes:

The Board has fixed the close of business on March 9, 201512, 2018 as the record date for determining those stockholders entitled to receive notice of, to attend and to vote at the Annual Meeting.Meeting of Stockholders.

The Company is pleased to continue to furnish its proxy materials to its stockholders via the Internet. We believe that this process allows us to provide our stockholders with the information they need in a more timely manner, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials. If you received a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability.

It is important that your shares be represented at the Annual Meeting.Meeting of Stockholders. EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS, PLEASE SUBMIT YOUR PROXY BY INTERNET, PHONE OR MAIL AS SOON AS POSSIBLE. If you later choose to revoke your proxy or change your vote, you may do so by following the procedures described in the attached proxy statement. Unless you have previously requested printed materials or you request a paper copy of our proxy materials in the manner specified in the Notice of Internet Availability, you will not receive a paper proxy card.

Please read the proxy materials carefully. Your vote is important and the Company appreciates your cooperation in considering and acting on the matters presented.

March 25, 201527, 2018

New York, New York

TABLE OF CONTENTS

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PROXY SUMMARY

Below are highlights of the information that you will find in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement and our Annual Report for the year endingended December 31, 20142017 before voting.

Your Vote is Important

Please cast your vote, even if you plan to attend the Annual Meeting of Stockholders in person.Stockholders of Record, who hold shares registered in their names, may vote:

The deadline for voting online or by telephone is 11:59 p.m. EDT on May 6, 2015.9, 2018. If you vote by mail, your proxy card must be received no later than the day before the annual meeting.

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Street Name Holders, who own shares through a bank or brokerage firm, may vote by returning the voting instruction form, or by following the instructions for voting via telephone or the Internet, provided by their bank or broker.

If you own shares in different accounts or in more than one name you may receive different voting instructions for each type of ownership. Please vote all of your shares. If you are a Stockholder of Record or a Street Name Holder who has a legal proxy to vote the shares, you may choose to vote in person at the Annual Meeting.Meeting of Stockholders.

Even if you plan to attend the Annual Meeting of Stockholders in person, please cast your vote as soon as possiblepossible..

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The following table provides summary information about each director nominee standing for election to the Board for aone-year term that will expire at the 2016Company’s 2019 Annual Meeting.Meeting of Stockholders.

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The Company is committed to good corporate governance, which we believe is important to the success of our business and in advancing stockholder interests. Highlights include:

The Company’s executive compensation program is overseen by the Compensation Committee of the Board of Directors. A summary of the Compensation Committee’s philosophy on compensation and a detailed description of the Company’s executive compensation program beginbegins on page 3223 of this Proxy Statement.

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Stockholders Should Read the Entire Proxy Statement Carefully

Prior to Returning Their Proxy Cards

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS OF E*TRADE FINANCIAL CORPORATION

To Be Held May 7, 201510, 2018

This Proxy Statementproxy statement (the “Proxy Statement”) is furnished in connection with the solicitation by the Company’s Board of Directors (the “Board”) of proxies to be voted at the Annual Meeting of Stockholders (the “Annual Meeting”) which will be held in the Washington Square Park Room at the Time Life Conference Center, 1271 Avenue of the Americas, Room #1 (2^nd Floor),InterContinental New York Times Square, 300 West 44th Street, New York, NY 10020,10036, on May 7, 201510, 2018 at 8:30 a.m. EDT, or at any adjournments or postponements thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. These materials were first sent or made available to stockholders on or about March 25, 2015.27, 2018.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

Why am I receiving these materials?

We have made these materials available to you on the Internet or, upon your request, have delivered printed versions of these materials to you by mail, in connection with the Board’s solicitation of proxies for use at the Annual Meeting to be held on Thursday, May 7, 2015,10, 2018, at 8:30 a.m. EDT, and at any postponements or adjournments thereof. You are invited to attend the Annual Meeting and are requested to vote on the proposals described in this proxy statement (the “Proxy Statement”).Proxy Statement.

What is the purpose of the Annual Meeting?

At the Annual Meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting of Stockholders. These include the election of directors, approval of the E*TRADE Financial Corporation 2015 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), an advisory non-binding vote to approve compensation paid to our Named Executive Officers (“NEOs”), and ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. include:

Once the business of the Annual Meeting is concluded, representatives from the Company and Deloitte & Touche LLP will be available to respond to questions from stockholders.

What is a proxy and how does it work?

The Board is asking for your proxy. A “proxy” is your legal designation of another person to vote the stock you own in the manner you direct. If you designate someone as your proxy in a written document, that document is also is called a proxy or proxy card. By giving your proxy to the persons named as proxy holders in the proxy card accompanying this Proxy Statement, you authorize them to vote your shares of our common stock, $0.01 par value per share (the “Common Stock”), at the Annual Meeting in the manner you direct. You may vote your shares for, against or abstain for all, some or none of the director nominees and you may choose to vote your shares for, against or abstain with respect to the other matters we are submitting to a vote of our stockholders at the Annual Meeting.

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If you complete and submit your proxy in one of the manners described below, but do not specify how to vote, the proxy holders will vote your shares FOR the election of directors as described in “Proposal 1—Election of Directors”; FOR the approval of the 2015 Omnibus Incentivecompensation of the Company’s Named Executive Officers (“NEOs”) as described in “Proposal2—Non-Binding Advisory Vote to Approve the Compensation of the Company’s Named Executive Officers (the“Say-on-Pay Vote”)”; FOR the approval of the Company’s 2018 Employee Stock Purchase Plan as described in “Proposal 2—3—Approval of the Adoption of the 2015 Omnibus IncentiveCompany’s 2018 Employee Stock Purchase Plan”; FOR approval of the compensation paid to the Named Executive Officers of the Company as described in “Proposal 3—Advisory Vote to Approve Executive Compensation”; and FOR the ratification of the selectionappointment of accountants as described in “Proposal 4—Ratification of SelectionAppointment of Independent Registered Public Accounting Firm.”

How can I receive a paper or electronic copy of this Proxy Statement?

We mailed the Notice of Internet Availability to our stockholders, except those who had previously requested paper materials. The Notice of Internet Availability contains instructions on how to access and review the proxy materials and our

Annual Report for the year ended December 31, 20142017 (the “2014“2017 Annual Report”) over the Internet. If you received a Notice of Internet Availability by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice of Internet Availability.

Who may vote and how many votes do I have?

Only common stockholders of record at the close of business on March 9, 201512, 2018 (the “Record Date”) may vote at the Annual Meeting. On that date, there were 289,851,469265,146,157 outstanding shares of our Common Stock.

All of the outstanding shares of Common Stock are entitled to vote at the Annual Meeting. Stockholders of record on the Record Date will have one vote for each share of Common Stock they hold.

What is the difference between a stockholder of record and a beneficial owner of stock held in street name?

Stockholders of Record. If your shares are registered in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are a stockholder“stockholder of recordrecord” with respect to those shares and the Notice of Internet Availability or the proxy materials were sent directly to you by Broadridge Financial Solutions, Inc.

Street Name Holders. If you hold your shares in an account at a bank or broker, you are the beneficial owner of shares held in “street name.” The Notice of Internet Availability or proxy materials were forwarded to you by your bank or broker, who is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your bank or broker on how to vote the shares held in your account. See the voting instruction form provided by your bank or broker for instructions.

How can I vote my shares?

By Written Proxy. All stockholders of record who received a Notice of Internet Availability or the proxy materials electronically may request a proxy card at any time by following the instructions on the Notice of Internet Availability or on the voting website (www.proxyvote.com). If you are a street name holder, you will receive instructions on how you may vote from your bank or broker, unless you previously enrolled in electronic delivery.

By Telephone or Internet. All stockholders of record may vote by telephone using the toll-free telephone number on the proxy card, or throughover the Internet by visitingwww.proxyvote.com before 11:59 p.m. EDT on May 6, 2015.9, 2018. The Internet and telephone voting procedures are designed to authenticate stockholders’ identities, allow stockholders to vote their shares and to confirm that their instructions have been properly recorded. If you would like to receive future stockholder materials electronically, please enroll after you complete your voting process onwww.proxyvote.com. Street name holders may vote by Internet or telephone if their bank or broker makes those methods available, in which case the bank or broker will encloseprovide instructions with the proxy materials.

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In Person. All stockholders of record may vote in person at the Annual Meeting. Street name holders may vote in person at the Annual Meeting if they have a legal proxy, as described below.

Whether you plan to attend the Annual Meeting or not, we encourage you to vote by proxy as soon as possible.Please note that the Notice of Internet Availability is not a proxy card and it cannot be used to vote your shares.shares.

What does it mean if I receive more than one Notice of Internet Availability or Voting Instruction Form?

You may receive more than one Notice of Internet Availability or voting instruction form depending on how you hold your shares. You will receive a Notice of Internet Availability for shares registered in your name. If you are the beneficial owner of shares held in street name, you may also receive a voting instruction form from your bank or broker asking how you want to vote. If your shares are registered differently and are in more than one account, you will receive more than one Notice of Internet Availability or voting instruction form and may have to cast multiple votes. We encourage you to vote all of your shares and to have all accounts registered in the same name and address whenever possible.

Can I change my vote?

Stockholders of record may revoke a proxy and/or change their vote before the time of voting at the Annual Meeting by:

notifying our Corporate Secretary in writing that you are revoking your proxy before the Annual Meeting. Our Corporate Secretary may be reached at our principal offices located at 1271 Avenue of the Americas, 14th Floor, New York, New York 10020-1302.

For “Proposal 4—Ratification of SelectionAppointment of Independent Registered Public Accounting Firm,” an affirmative vote of the majority of the shares of Common Stock present in person or represented by proxy and entitled to vote on the item will be considered ratification of the selectionappointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm. Abstentions will have the same effect as a vote against Proposal 4.

If you are a street name holder and you do not instruct the bank or broker on how to vote your shares, your bank or broker may exercise its discretionary authority to vote your shares with regard to Proposal 4, but cannot exercise its discretionary authority to vote your shares regarding Proposals 1, 2 and 3, thus resulting in “brokernon-votes.”

Who pays for the solicitation of proxies?

The Company pays the cost of soliciting proxies. We retained Innisfree M&A Incorporated to advise the Company and assist with our solicitation of proxies for an estimated fee of $17,500 plus reasonableout-of-pocket expenses. We will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for their

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reasonableout-of-pocket expenses for sending soliciting materials to beneficial owners and obtaining their votes.

In addition toour employees, without additional compensation, may assist with our solicitation of proxies either personally or by mail, proxies may be solicited personally, by telephone or electronic media by our employees.media.

What if only one copy of the Notice of Internet Availability or proxy materials was delivered to multiple stockholders who share a single address?

AUnder Securities and Exchange Commission (“SEC”) rules, a single Notice of Internet Availability (or one copy of this Proxy Statement and the accompanying 20142017 Annual Report, for those stockholders who previously requested paper copies) will be delivered in one envelope to multiple stockholders having the same last name and address and to individuals with more than one account registered at American Stock Transfer & Trust Company, LLC with the same address unless contrary instructions have been received from an affected stockholder. This procedure, referred to as “householding,” reduces the volume of duplicate materials that stockholders receive and reduces mailing expenses.

If you would likeYou may revoke your consent to future householding mailings or enroll in this service or receive individual copies of all documents, now or in the future, you may submithouseholding by submitting a written request to our Corporate Secretary, at the Company’s principal offices located at 1271 Avenue of the Americas, 14thBallston Tower, 671 North Glebe Road, 15^th Floor, New York, New York 10020-1302.Arlington, VA 22203-2120. You may also send an email to ir@etrade.com or call us at(646) 521-4340. We will deliver a separate copy of all documents to an individual stockholder who shares an address with another stockholder upon request to the address, email or telephone number provided above even if a single copy of the documents was originally delivered.

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PROPOSAL 1

ELECTION OF DIRECTORS

Listed below are the Company’s eleventwelve directors, each of which havewhom has been nominated by the Board for election by the stockholders at the Annual Meeting and havehas agreed to be named in this Proxy Statement and to serve if elected. Under the Company’s Amended and Restated Certificate of Incorporation, each of the eleventwelve nominees standing for election at this Annual Meeting would, if elected, serve for a term beginning on the date of election and ending at the 2016Company’s 2019 Annual Meeting of Stockholders or until his or her earlier resignation or removal. Christopher Flink, one of our current directors, is not standing for re-election at the Annual Meeting.

In the absence of contrary instructions, the proxy holders intend to vote all proxies received by them FOR the nominees for director listed below. Although we know of no reason why any of the nominees would not be able to serve, if any nominee is unavailable for election, the proxy holders intend to vote your Common Stock for any substitute nominee proposed by the Board.

Qualifications of Directors

The Board, acting through its Governance Committee, is responsible for recommending to the stockholders a group of nominees that, taken together, have a significant breadth and diversity of relevant experience, professional expertise, knowledge and abilities to carry out the Board’s responsibilities. Our Governance Committee Charter requires the Governance Committee to periodically review the composition of the Board and its committees in light of the risks, current challenges and needs of the Company and determine whether to add or remove individuals after considering issues of knowledge, expertise, judgment, term of service, age, skills, diversity of background and experience and relationsrelationships with various constituencies.

In presenting this year’s nominees, the Governance Committee considered, among other things, the experience the nominees gained in enhancing their oversight over management in light of the heightened standards from the Company’s and its subsidiaries’ regulators, their ability to work as a collegial group during a period of increased competitive pressures and their willingness to spend the time necessary to perform their roleduties despite other professional commitments.

In addition to the characteristics common to all of our directors, which include expertise within the financial services industry, integrity, a strong professional reputation and a record of achievement in senior executive capacities, the Governance Committee has included on the Board persons with diverse backgrounds and skills reflecting the needs of the Company.

In evaluating each nominee for service on the Board, the Governance Committee considered the following specific experience and skills of the current Board:

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Nominees to the Board of Directors:

Richard J. Carbonehas been a director of the Company since August 2013. Mr. Carbone was formerly Chief Financial Officer of Prudential Financial, Inc. from 1997 through 2013, and served as Executive Vice President until retiring from that position in February 2014. Mr. Carbone brings nearly four decades of experience in financial services, having held senior finance office positions in both the banking and securities industries, including Managing Director and Controller of Salomon Brothers and Senior Vice President and Controller of Bankers Trust Company. He began his career at Price Waterhouse & Co. Mr. Carbone received an M.B.A. from St. John’s University and is a Certified Public Accountant. He was an officer in the United States Marine Corps from 1969 to 1972. Mr. Carbone is a member of the board of directors for Resolution Life Holdings and its indirect subsidiary, Lincoln Beneficial Life.Benefit Life, and an advisor to Hudson Structured Capital Management. He is also a director on the board of anon-profit organization focused on helping disabled adults and indigent children. Mr. Carbone is a member of the E*TRADE Bank board and a member of the Audit Committee, where he is designated an audit committee financial expert, and the Compensation Committee.

James P. Healyhas been a director of the Company since January 2015. He had a25-year career in the Investment Banking arm of the Credit Suisse Group, where he served as Global Head of the Fixed Income Division from 2003 to 2007. Other leadership positions while at Credit Suisse included Global Head of Emerging Markets Group, and the GlobalCo-Head of Credit Suisse Financial Products, which housed the firm’s derivative businesses. Prior to joining Credit Suisse, Mr. Healy was as an economist at the International Monetary Fund, served as a consultant to the Organization for Economic Cooperation and Development, and served as a visiting scholar at the Board of Governors of the Federal Reserve. He is currently the CEOChief Executive Officer of Capra Ibex Advisors, a registered Investment Advisor he founded in 2010 to provide investment and risk management advice to select financial institutions, including First Republic Bank and JPMorgan Chase. Mr. Healy is a member of the Boardboard of Directorsdirectors of Student Sponsor Partners, a New York City philanthropy serving 1,400 disadvantaged high school students, and served as its Board Chair from 2010 to 2014. He holds a B.A. in Economics from Stanford University, a M.Sc. in Economics from the London School of Economics, and a Ph.D. in Economics from Princeton University. Mr. Healy is a member of the E*TRADE Bank board, and the Risk Oversight Committee and the Compensation Committee.

PaulKevin T. IdzikKabat has been a directorLead Independent Director of the Company since September 2016 and a director since June 2016. He served as Chief Executive Officer since January 2013.of Fifth Third Bancorp from 2007 to 2015, where he was responsible for overseeing the strategic direction of the company. Mr. Kabat also served as President of Fifth Third Bancorp from 2006 to 2012, Chairman from 2008 to 2010, and Vice Chairman from 2012 to 2016. Prior to these roles, Mr. Kabat served as Executive Vice President where he led both retail and affiliate banking. Prior to joining Fifth Third Bancorp, Mr. Kabat spent 20 years at Old Kent Bank (acquired by Fifth Third Bancorp in 2001), where he served as Vice Chairman and President. Mr. Kabat currently serves as Chairman of the Company, Mr. Idzik wasboard of directors of Unum Group Chief Executiveand as Vice Chairman of DTZ Holdings plc in London from November 2008 to August 2011.the board of directors of NiSource Inc., where he has served as a director since 2015. He also spent 10 years at Barclays PLC, firstserved as Chief Administration Officer, then Chief Operating Officer at Barclays Capital Group and then as Group Chief Operating Officerchair of Barclays PLC. Mr. Idzik began his career as a consultant and spent over a decade with Booz Allen Hamilton, Inc. Mr. Idzik hasthe United Way of Greater Cincinnati’s 100th anniversary campaign. He holds a B.A. in Economics and a B.A. in Computer ApplicationsBehavioral Science from theJohns Hopkins University of Notre Dame and an M.B.A.M.S. in Finance and AccountingIndustrial/Organizational Psychology from the University of Chicago. HePurdue University. Mr. Kabat is President of E*TRADE Bank and a member of the E*TRADE Bank board.board and the Governance Committee and is an ex officio member of the Audit Committee, the Compensation Committee and the Risk Oversight Committee.

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Frederick W. Kanner has been a director of the Company since April 2008. Mr. Kanner is Seniora retired corporate lawyer who advised corporations, boards of directors, and financial advisors in connection with merger and acquisition transactions, financings, and securities law issues, as well as matters of fiduciary duty and corporate governance. During his over40-year legal career, he served as a partner and Of Counsel at the law firm of Covington & Burling LLP in New York City since May 2012. He was a partner in the law firm of Dewey Ballantine LLP and subsequently(subsequently, Dewey & LeBoeuf LLP from 1976 untilLLP) where he retired from the full-time practice of law at the end of 2009 and was Of Counsel until 2012. He served as Chairman of Dewey’s Corporate Finance practice for more than 15 years and as a member of its Management Committee for 20 years. HeThereafter, Mr. Kanner served as Senior Of Counsel at Covington & Burling LLP. Mr. Kanner is a member of the board of directors of Financial Guaranty Insurance Company, (wherewhere he serves as Chairman of the Compensation Committee), National Benefit Life Insurance Company (where he serves as ChairmanCommittee, and is a member of the Audit Committee) and theboard of trustees of The Lawyers’ Committee for Civil Rights Under Law. Mr. KannerHe received a B.A. in Economics from the University of Virginia and a J.D. from the Georgetown University Law Center. Mr. Kanner is a member of the E*TRADE Bank board and a member of the Audit Committee, the Compensation Committee and the Governance Committee.

James Lam has been a director of the Company since November 2012. Mr. Lam is currentlyhas been President of James Lam & Associates, a consulting firm focused on corporate governance and risk management, since January 2002. He previously served as Founder and President of ERisk, Chief Risk Officer of Fidelity Investments and Chief Risk Officer of GE Capital Markets Services, Inc. HeServices. Mr. Lam is the author of the best-selling book,books,Enterprise Risk Management (Wiley, 2003)2nd Edition, 2014) andImplementing Enterprise Risk Management (Wiley, 2017). He was named to the NACD Directorship 100,Directors & Boards “Directors to Watch,”Treasury & Risk “100 Most Influential People in Finance” three times, and GARP inaugural “Risk Manager of the Year.” Mr. Lam graduatedsumma cum laude with a B.B.A. from Baruch College in 1983 and received an M.B.A. with honors from UCLA in 1989. In 2004, he was appointed Senior ResearchHe is an NACD Board Leadership Fellow at Peking University.and is certified by the Software Engineering Institute of Carnegie Mellon in Cybersecurity Oversight. Previously, Mr. Lam has taught M.B.A. classes at Babson Collegeserved as Vice Chairman on the board of directors of ERisk and the Hult International Business School. He has also guest lectured at Harvard Business School.as an independent director of Covarity. Mr. Lam is a member of the E*TRADE Bank board, a member and Chair of the Risk Oversight Committee and a member of the Audit Committee.

Rodger A. Lawson has been Executive Chairman of the Company since September 2016 and has served as a director of the Company since February 2012 and Chairman of the Board since May 2013.2012. Mr. Lawson also served as the Company’snon-executive Chairman from May 2013 to September 2016 and Lead Independent Director from August 2012 to January 2013. Mr. Lawson is a retiredan experienced financial services executive who most recently served as President and Chief Executive Officer of Fidelity Investments – Investments—Financial Services from 2007 through 2010. Prior to joining Fidelity, Mr. Lawson served in several senior executive roles with Prudential Financial including Vice Chairman of Prudential Financial.Chairman. He has held numerous other executive positions in financial services, including President and Chief Executive Officer of Van Eck Global, and Chief Executive Officer and Partner of Global Private Banking at Bankers Trust Company. Previously, Mr. Lawson was President and Chief Executive Officer of Fidelity Investments Retail Group and Chief Executive Officer of the Dreyfus Service Corporation. Mr. Lawson earned a B.A. from London University and a M.Sc. from Bradford University. He is currently on the board of directors of UnitedHealth Group, Inc. Mr. Lawson is a member of the E*TRADE Bank board, the Governance Committee and anex officio member of the Audit, Compensation and Risk Oversight Committees.board.

Shelley B. Leibowitz has been a director of the Company since December 2014. Ms. Leibowitz is President of SL Advisory, a firm she founded in 2016 that focuses on technology strategy, IT portfolio and risk management, and cybersecurity governance. From 2009 through 2012, Ms. Leibowitz served as Group Chief Information Officer for the World Bank, where she was responsible for the technology services and capabilities that underlie the work of delivering quality knowledge and financing products to the Bank Group’s clients across the globe. Ms. Leibowitz managed the Bank Group’s cybersecurity program and served as a member of the Bank’sBank Group’s Pension Investment Committee. Previously, Ms. Leibowitz held Chief Information Officer positions at Morgan Stanley, Greenwich Capital Markets and Barclays Capital. Ms. Leibowitz also served as Boarda board member and technology advisor for GAIN Capital, now listedCapital. Ms. Leibowitz is currently on the NYSE. In 2002, Ms. Leibowitz receivedboard of directors of security intelligence firm Endgame, a Merit Award frommember of the Women’s Bond ClubCouncil on Foreign Relations and on the board of New York for career achievement and leadership indirectors of AllianceBernstein Holding L.P. (where she serves on the financial industry.Audit Committee). She graduated Phi Beta Kappa from Williams College with a B.A. in Mathematics. Ms. Leibowitz is currently an Advisor to security intelligence firm Endgame. Ms. Leibowitz is a member of the E*TRADE Bank board and a member of the Governance Committee and the Risk Oversight Committee.

Karl A. Roessner has been a director of the Company and the Chief Executive Officer since September 2016. Prior to his appointment as Chief Executive Officer, Mr. Roessner served as Executive Vice President and General Counsel for the Company for more than seven years, overseeing all compliance and regulatory functions for the Company and its bank and brokerage subsidiaries. During that time, he also served as the Corporate Secretary to the Company’s Board of Directors. Prior to joining E*TRADE in 2009, Mr. Roessner was a partner in the Corporate Practice group of Clifford Chance US LLP, one of the world’s leading law firms. There, he advised clients on negotiated public and private transactions, management and leveraged buyouts, capital raising activities, and corporate governance matters. Mr. Roessner earned his B.A. cum laude from Siena College and his J.D. cum laude from St. Johns University School of Law, where he was a member of the St. John’s University Law Review. He is President of E*TRADE Bank and a member of the E*TRADE Bank board.

Rebecca Saeger has been a director of the Company since February 2012. Ms. Saeger served as Executive Vice President at Charles Schwab from 2004 through 2010, most recently as Chief Marketing Officer. Prior to joining Charles Schwab, she was Executive Vice President, Marketing at Visa U.S.A. Previously, Ms. Saeger was Senior Vice President and head of Account Management at Foote, Cone & Belding and Senior Vice President at Ogilvy & Mather. She has served on the board of directors as Chair of the Association of National

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Advertisers (ANA). She received a B.A. from Muhlenberg College and an M.B.A. from the Wharton School at the University of Pennsylvania. Ms. Saeger is a member of the E*TRADE Bank board, a member and Chair of the Compensation Committee and a member of the Governance Committee.

Joseph L. Sclafani has been a director of the Company since June 2008. Mr. Sclafani was formerly Executive Vice President and Controller of JPMorgan Chase & Co., responsible for corporate financial operations, regulatory reporting, financial accounting and reporting and accounting policies until December 2006. His 38 years of experience include 27 years at JPMorgan Chase & Co. and its predecessors. Mr. Sclafani also spent 11 years at KPMG as a certified public accountant. He earned a B.A. from St. Francis College in Brooklyn and completed post-graduate studies in finance at Bernard M. Baruch College. Mr. Sclafani is a member of the E*TRADE Bank board, a member and the Chair of the Audit Committee, where he is designated an audit committee financial expert, and a member of the Risk Oversight Committee.

Gary H. Stern was appointedhas been a director of the Company insince June 2014. Mr. Stern was President and Chief Executive Officer of the Federal Reserve Bank of Minneapolis from 1985 through 2009, the longest-serving president in the Bank’s history. He joined the Federal Reserve Bank of Minneapolis in 1982 as senior vice president and director of research. His prior experience included seven years at the Federal Reserve Bank of New York. Mr. Sternco-authoredToo Big to Fail: The Hazards of Bank Bailouts, published by The Brookings Institution (2004). He holds an A.B. in Economics from Washington University in St. Louis, and an M.A. and Ph.D. in Economics from Rice University. He served on the Boardboard of Directorsdirectors of The Dolan Company from 2010 to 2014. He also currently serves on the Boardboard of Directorsdirectors of Standard and Poor’s Ratings, the FDIC Systemic Resolution Advisory Committee, the Ambac Assurance Corporation, The Depository Trust & Clearing Corporation, and the National Council on Economic Education. Mr. Stern is a member of the E*TRADE Bank board and a member of the Compensation Committee and Risk Oversight Committee.

Donna L. Weaver has been a director of the Company since April 2003. Ms. Weaver is a retired corporate financial executive and business owner. A Certified Management Accountant, Ms. Weaver received a B.S. in Economics and Finance from the University of Arizona and an M.S. in Management from the Stanford Graduate School of Business. Since 1986, Ms. Weaver has served on the boards of several public and private companies. Ms. Weaver is a member of the E*TRADE Bank board, a member and Chair of the Governance Committee and a member of the Audit Committee.

The Board of Directors recommends that stockholders vote FOR the election of each of the nominees

as directors listed above.

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BOARD MEETINGS AND COMMITTEESCORPORATE GOVERNANCE OVERVIEW

The Board held a total of 1311 meetings during 2014.2017. Each current director attended at least 75% of the aggregatetotal number of the meetings of the Board and the committees of the Board, held during his or her tenure, of which he or she was a member and was eligible to attend.member. Ournon-management directors met in executive session without management at least quarterly. The Chairman of the Board ledDuring 2017, these executive sessions during 2014.were led by our Lead Independent Director.

To conduct its business, the Board maintains four standing committees: Audit, Compensation, Governance and Risk Oversight. The primary responsibilities of each committee are set forth below:

During 2017, the Board also maintained two advisory working groups, the Growth Initiative Advisory Working Group and the Integration Advisory Working Group, which provided advice and counsel to management on the respective topics.

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Each of these committees is composed entirely of directors that meet the applicable independence requirements of the NASDAQNasdaq Global Select Market (“NASDAQ”Nasdaq”). The charters of each of these committees are available on our website atabout.etrade.com in the “Corporate Governance” section. You may also request a copy of each of these documents free of charge by writing to E*TRADE Financial Corporation, 1271 Avenue of the Americas, 14thBallston Tower, 671 North Glebe Road, 15^th Floor, New York, New York 10020-1302,Arlington, VA 22203-2120, Attention: Corporate Secretary.

The following table presents, as of March 25, 2015,27, 2018, the members of each committee of the Board and the number of times each committee met during 2014:2017:

		«Executive Chairman		I   Lead Independent Director				Chair		Member

Mr. Healy and Mses. Saeger (Chair) and Weaver are also members of the Growth Initiative Advisory Working Group and Messrs. Kabat (Chair) and Lam and Ms. Leibowitz are also members of the Integration Advisory Working Group.

Communications to the Board, the Executive Chairman of the Board, thenon-management directors or any other director may be sent to: E*TRADE Financial Corporation, 1271 Avenue of the Americas, 14thBallston Tower, 671 North Glebe Road, 15^th Floor, New York, New York 10020-1302,Arlington, VA 22203-2120, Attention: Corporate Secretary. The Company does not have a formal policy regarding director attendance at our annual stockholder meetings; however, all11 of 12 of the then-current directors attended the 20142017 Annual Meeting of Stockholders.

The Company’s Code of Professional Conduct, Corporate Governance Guidelines and Related Party Transactions Policy are available on our website atabout.etrade.com in the “Corporate Governance” section. You may also request a copy of each of these documents free of charge by writing to E*TRADE Financial Corporation, 1271 Avenue of the Americas, 14thBallston Tower, 671 North Glebe Road, 15^th Floor, New York, New York 10020-1302,Arlington, VA 22203-2120, Attention: Corporate Secretary. We intend to post on our corporate website any amendments to, or waivers from, our Code of Professional Conduct or Related Party Transactions Policy that applyapplies to our executive officers including our principal executive officer, principal financial officer and principal accounting officer.directors. The information on our website is not a part of this Proxy Statement.

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Risk Management

The Board plays an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board regularly reviews reports from members of senior management and committees on areas of material risk to the Company, including credit, interest rate, liquidity, market, operational, strategic, reputational, information security, data management, legal, and regulatory and compliance risks. In particular, the Risk Oversight Committee assists the Board and senior management, including the Company’s Chief Risk Officer, the Company’s General Counsel and the Company’s Chief

Compliance Officer, in the effective identification, assessment and management of the Company’s risk profilerisks and in working to improvemanage and monitor the financial risk and return of the Company. The Risk Oversight Committee reviewsoversees the capital planning processes, the Company’s capital position and capital adequacy, and structure, consolidated capital reporting, significant capital expenditures, capital structure, and financing requirements.reporting. The Risk Oversight Committee also oversees, reviews and challenges senior management and, when applicable, recommends to the Board for its approval policies related to the financial and risk management of the Company and its subsidiaries and oversees the Company’s implementation of such policies, includingpolicies. These include policies relating to capital, funding, liquidity and funds transfer, risk, asset and liability management and cash management, and policies for assessing and managing exposure of the Company’s operational risk, credit risk, market risk, interest rate risk, investment risk, liquidity risk, reputational risk, information security risk, data management risk, strategic risk, legal risk, and regulatory &and compliance risk, includingrisk. Additionally, the framework for counterparty credit risk management and trading limits, andRisk Oversight Committee reviews the Company’s business continuity plan, strategic plan, strategic transactions, and proposed investments.investments, and assists in defining the Company’s Enterprise Risk Appetite Statement. The Risk Oversight Committee makes recommendations regarding the Company’s Enterprise Risk Appetite Statement to the Board for its approval considering with senior management the Company’s risk capacity, risk appetite, global risk limits, current risk profile, remediation protocols and risk exceptions.

The Compensation Committee assists the Board in evaluating risks arising from Company executive andnon-executive compensation programs as well as succession planning for our executive officers.programs. The Governance Committee assists the Board in overseeing risks associated with Board organization, membership and structure, succession planning for our directors and executive officers, and corporate governance. The Audit Committee assists the Board in overseeing risks associated with financial reporting and internal controls.

Director Independence

The Board has adopted categorical standards to assist in its evaluation of the independence of directors. The categoricalThese standards describe various types of relationships that could exist between a Board member and the Company and set thresholds at which such relationships would be deemed to be material in the determination of a director’s independence. Although any director who meets the independence criteria of NASDAQNasdaq and the Board’s own categorical standards (as well as Rule10A-3(b) under the Securities Exchange Act Rule 10A-3(b)of 1934, as amended (the “Exchange Act”), in the case of Audit Committee members, and NASDAQNasdaq Rule 5605(d)(2), in the case of Compensation Committee members) will be presumed to be independent, the Board may make a decision to the contrary based on its review of any other relevant factors. The Board’s categorical standards are as follows:

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After a review of all relevant factors and applying these categorical standards and the independence criteria of NASDAQ,Nasdaq, the Board has determined that during 2014:

The Board has also determined that each member of the Company’s Audit Committee, Compensation Committee, Governance Committee and Risk Oversight Committee is independent.independent under the applicable standards and that Messrs. Carbone and Sclafani are each an “audit committee financial expert” as defined under SEC rules.

Identifying and Evaluating Director Nominees

The Governance Committee uses various methods to identify director nominees. The Governance Committee regularly assesses the appropriate size and composition of the Board and the particular needs of the Board, considering skill sets

required and whether any vacancies are expected due to retirement or otherwise. Candidates may come to the attention of the Governance Committee through current Board members, professional search firms, stockholders or other parties. While there is no formal diversity policy or fixed set of qualifications that must be satisfied before a candidate will be considered, we seek nominees with a broad diversity of skills, experience, expertise, professions, skills, geographic representation and backgrounds. All candidates are then evaluated based on a review of the individual’s qualifications, skills, independence, experience, expertise and expertise,business acumen, including the criteria included in our Corporate Governance Guidelines and the Board’s desire to draw on diverse perspectives and expertise in conducting its work.

Under our Bylaws, there shall be no fewer than six and no more than twelve directors concurrently serving on the Board. The Board will reduce its size to eleven directors upon the election of directors at the Annual Meeting. Our Bylaws permit the Board to increase or decrease its size within the authorized range and to add new directors between stockholder meetings. Any director appointed by the Board in accordance with the preceding sentence shall hold office for a term expiring at the next Annual Meeting.annual meeting of stockholders.

Submission of Director Nominees to the Governance Committee by Stockholders

The Governance Committee will consider director candidates submitted by any stockholder who has continuously held at least 5% of our voting securities (either directly or as part of a group) for at least one year and is not a competitor of the Company. Such recommendations must be mailed to E*TRADE Financial Corporation, 1271 Avenue of the Americas, 14th Floor, New York, New York 10020-1302, Attention: Corporate Secretary. Such recommendationssubmissions should (i) be accompanied by (i) evidence of the stockholder’s stock ownership overduring the previous twelvepreceding 12 months; (ii) include a statement that the stockholder is not a competitor of the Company; and (iii) a resume and contact information forcomply with the director candidate, as well as a descriptionadvance notice requirements set forth in Section 1.08 of the candidate’s qualifications; and (iv) a statement whetherCompany’s Bylaws. Candidates submitted by any stockholder for election must also comply with the candidate has expressed interestadditional requirements set forth in serving as a director.Section 1.09 of the Company’s Bylaws. The Governance Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders as it does for candidates proposed by other parties. The Governance Committee will consider such candidacy and will advise the recommending stockholder of its final decision. AnyEach Board nominee, for the Board, at the request of the Board, must submit a statement that, if elected, the nominee intends to comply with the Company’s majority voting policy described below.

Submissions of director candidates by stockholders should be mailed to E*TRADE Financial Corporation, Ballston Tower, 671 North Glebe Road, 15^th Floor, Arlington, VA 22203-2120, Attention: Corporate Secretary.

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Board Leadership

The Board believes that separating the functions of Lead Independent Director from the Executive Chairman and Chief Executive Officer (“CEO”) generally strengthens the Board’s independence from management. During 2014, Mr. Lawson served as the Company’s Non-Executive Chairman of the Board. We believe this structure is appropriate for the Company because it strengthens the Board’s independence from management.management and positions the Company to continue to execute on its commitment to stockholders to grow our core business.

Majority Voting Standard and Director Resignation Policy

Our Bylaws and Corporate Governance Guidelines provide that the voting standard for the election of directors in uncontested elections is a majority voting standard. Under our majority voting standard, in an uncontested election, each nominee shall be elected to the Board by the majority of the votes cast with respect to the director’s election (that is, the number of votes “for” a director’s election must exceed 50% of the votes cast with respect to that director’s election). Directors will be elected by plurality vote in contested elections (that is, when the number of nominees for election exceeds the number of directors to be elected). Whether an election is contested or not is determined on the last day by which stockholders may submit notice to nominate a person for election as a director pursuant to the Company’s Amended and Restated Certificate of Incorporation.Bylaws.

If a nominee who is serving as a director is not elected by a majority of the votes cast at the Annual Meeting, Delaware law provides that the director would continue to serve on the Board as a “holdover director.” However, under our Bylaws and Corporate Governance Guidelines, each director must submit in advance an irrevocable, contingent resignation to the Chair of the Governance Committee that the Board may accept if the director fails to be elected by the majority of the votes cast with respect to the director’s election. In that situation, the Governance Committee will act on an expedited basis to determine whether to accept the director’s resignation, and submit its recommendation to the Board. The Board will act on the Governance Committee’s recommendation and publicly disclose its decision and the rationale behind its decision within 90 days following certification of the stockholder vote. The Governance Committee, in making its recommendation, and the Board, in making its decision, may each consider any factors or other information that it considers appropriate and relevant.

The Board expects that any director whose resignation becomes effective pursuant to this policy will excuse himself or herself from participating in the consideration of his or her resignation by either the Governance Committee or the Board. If an incumbent director’s resignation is not accepted, he or she will continue to serve until the next Annual Meetingannual meeting of stockholders and until his or her successor is duly elected, or until his or her earlier removal. All nominees currently serve on the Board.

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DIRECTOR COMPENSATION

Introduction

Our Director Compensation program reflects our desire to attract, retain and motivate highly qualified individuals who have the skills, experience, expertise and expertisebackground necessary to serve on the board of directors of a company of our size and regulatory complexity and who can continue to guide the Company to provide long-term value to its stockholders. Accordingly, our Director Compensation program is designed to provide ournon-employee directors with a mix of cash and long-term equity compensation that both fairly compensates them for the services they provide to us asnon-employee directors and aligns their interests with the long-term interests of our stockholders.

2017 Annual Review of Director Compensation Program in 2014

The Governance Committee reviews the structure and philosophy of our Director Compensation program on an annual basis. In the second quarter of 2014,2017, the Governance Committee, with the advice ofsupported by its independent compensation consultant, analyzed the overall level and mix of compensation delivered by our Director Compensation program as compared to the Company’s peer group.

group, and conducted a thorough review of current trends and best practices regarding director compensation. As a result of this analysis and review, the Governance Committee approved increasesthe following changes to the Director Compensation program effective asMay 11, 2017:

2017 Director Compensation

Cash Compensation. Following the changes in our other non-employee directors were increased by $50,000 to $100,000.

In addition, the Governance Committee, as part of its 2014 annual review of the Company’s Director Compensation program approved the implementation of asummarized above, effective May 11, 2017, Director Compensation Deferral Program (the “Deferral Program”). Undercash fees fornon-employee directors were as follows:

From January 1, 2017 to May 11, 2017,non-employee directors receivedper-meeting fees in the termsamount of $2,500 per Board meeting or written consent, $2,500 per Committee meeting or written consent for the Committee Chair, and $2,000 per Committee meeting or written consent for Committee members.

Equity Compensation. Following the changes in our Director Compensation program, effective May 11, 2017 equity compensation fornon-employee directors was as follows:

As a part of our overall Director Compensation program,non-employee directors may elect, on an annual basis, to defer all or a portion of their cash and equity compensation for service on the Board and/or its committees into deferred restricted stock units (“DSUs”) issued under the Company’s 2005 Equity2015 Omnibus Incentive Plan.Plan pursuant to the terms of our Director Compensation Deferral Program (the “Deferral Program”). Grants of DSUs are issued atbased on the fair market value of our Common Stock on the grant date (measured as the average of the high and low of the price of theour Common Stock on the grant date) and fully vest one year following the grant. At the time of deferral,non-employee directors must elect settlement of the DSUs into shares of our Common StockStock. In 2017, directors had the option to elect settlement in either (i) one lump payoutdistribution of all shares on the first anniversary of the date on which Board service is completed or (ii) five (5) equal annual installments beginning on the first anniversary of the date on which Board service is completed.

2014 Director Compensation

Cash Compensation. The Director Compensation policy for cash fees for non-employee directors in 2014 was as follows:

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Equity Compensation. The Director Compensation policy for equity compensation for non-employee directors in 2014, which takes into account the increases described above, was as follows:

Each restricted stock or DSU award, as applicable, granted to anon-employee director in 2017 vests one year from the date of issuance, subject to immediate vesting upon (i) certain changes in the ownership or control of the Company or (ii) the death or disability of the director while serving as a Board member.

Expense Reimbursement and Perquisites. Allnon-employee

All non-employee directors receive reimbursement for reasonableout-of-pocket expenses incurred in connection with meetings of the Board and its committees. committees and for attending up to three director education programs.Non-employee directors do not receive perquisites, but are eligible to participate in the Deferral Program.

20142017 Director Compensation Table

The following table below does not include Mr. Idzik,shows information regarding the compensation paid during 2017 tonon-employee directors who did not receive separate compensation for his serviceserved on the Board.Board during the year.

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Policy of Equity Ownership for Board of Directors

The Board believes that directors should hold meaningful equity ownership positions in the Company to help align the interests of directors with those of stockholders. In August 2017, following the changes to the Director Compensation Program in May 2017, the Governance Committee determined that it was appropriate to increase the amount of stock required to be held by ournon-employee directors.

Under our policy regarding equity ownership guidelines for directors, as revised by the Governance Committee in 2017,non-employee directors are expected to be beneficial owners of shares of Common Stock with a market value equivalent to at least two years’three years of annual cash retainer fees due to non-employee directors (not including any additional retainer for service as a Committee Chair,Non-Executive Chairman, Lead Independent Director or Non-Executive Chairmanon an advisory working group or special committee and as adjusted from time to time) within twothree years of joining the Board. As a result, each of ournon-employee directors is required to hold shares of the Company’s Common Stock with an aggregate value of at least $360,000.

For purposes of the equity ownership guidelines described above, anon-employee director��s shareholdings include, in addition to shares held outright, any unvested restricted stock awards, any vested DSUs and thein-the-money portion of vested but unexercised stock options. The value of each DSU is treated the same as a share of the Company’s Common Stock.

Until anon-employee director has met thisour equity ownership guideline,guidelines, he or she is expected to hold 100% of any stock acquired through exercise of a stock option or vesting of restricted stock, net of shares sold to cover the cost of acquisition and any tax obligation. During 2014,2017, each of the Company’snon-employee directors was in compliance with this policy. our guidelines.

Anti-Pledging and Hedging Policy

The Company does not permit directors or executive officers to pledge or engage in hedging transactions involving Company stock.

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PROPOSAL 2

APPROVAL OF THE ADOPTION OF THENON-BINDING

E*TRADE FINANCIAL CORPORATION 2015 OMNIBUS INCENTIVE PLAN

At the Annual Meeting, stockholders will be asked to approve the E*TRADE Financial Corporation 2015 Omnibus Incentive Plan (the “2015 Plan”). The Compensation Committee approved the 2015 Plan on January 26, 2015, subject to its approval by stockholders. The 2015 Plan is intended to replace our 2005 Equity Incentive Plan, which is scheduled to expire on May 26, 2015 (the “Prior Plan”). If the stockholders approve the 2015 Plan, it will become effective on the day of the 2015 Annual Meeting (the “Effective Date”), and no further awards will thereafter be granted under the Prior Plan.

Introduction

We operate in a challenging marketplace in which our success depends to a great extent on our ability to attract and retain executives, employees and non-employee directors with the skills and experience necessary to operate our business in an efficient and effective manner. We strongly believe that a competitive compensation package which includes equity and equity-based awards is a critical component in attracting and retaining these individuals, and will also provide them with a long-term incentive to maximize value for our stockholders and contribute to our ongoing growth. The approval of the 2015 Plan by our stockholders will provide us with a vehicle by which we can make a wide variety of equity and equity-based awards, along with cash incentives, and will therefore help to ensure our ongoing ability to attract and retain key talent.

If our stockholders approve the 2015 Plan, approximately 12,295,917 common shares, which includes the 6,295,917 common shares that remain available for issuance under the Prior Plan and are not subject to outstanding awards as of the Record Date, will be available for grants of equity and equity-based awards under the 2015 Plan. In addition, any shares in respect of awards granted under the Prior Plan that are terminated or cancelled without being exercised or settled or that are acquired as a result of forfeiture or repurchase after the Effective Date will be available for issuance under the 2015 Plan.

In determining the number of shares of Common Stock to be reserved for issuance under the 2015 Plan, our management and the Compensation Committee, in consultation with Pay Governance LLC (the Compensation Committee’s independent compensation consultant) evaluated, among other things, the historic share usage and burn rate under the Prior Plan, the overhang under the Prior Plan and the existing terms of outstanding awards under the Prior Plan. For additional information on our annual share usage and burn rate, see the subsection entitled “Historical Annual Share Usage” below. We currently anticipate that the shares of Common Stock to be reserved for issuance under the 2015 Plan will allow us to continue making equity grants for four to six years.

Reasons for Adoption of the 2015 Plan

The Prior Plan, which is the only plan pursuant to which we make equity and equity-based awards to our executives, employees and non-employee directors, will expire by its terms on May 26, 2015, and we may not make any more grants under the Prior Plan after that date. We do not intend to grant any further awards under the Prior Plan after the Effective Date. Accordingly, we have adopted and are seeking stockholder approval of the 2015 Plan to provide a vehicle by which we can use equity and equity-based awards to continue to attract, retain, motivate and appropriately incentivize key talent who can effectively manage our business and provide long-term value to our stockholders.

If the 2015 Plan is not approved by our stockholders, we will no longer have a stockholder-approved plan by which we can make grants of equity and equity-based awards as of May 26, 2015. Accordingly, the failure to attain stockholder approval of the 2015 Plan will put us at a significant disadvantage relative to the companies with which we compete for key talent and could ultimately result in our failure to attract and retain high caliber talent who can achieve our business objectives.

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In addition, we are seeking approval of the 2015 Plan in order to, among other things: (1) comply with NASDAQ rules requiring stockholder approval of equity compensation plans; (2) allow the grant of incentive stock options (ISOs) to our employees; and (3) provide the Compensation Committee with the ability to grant both stock awards and cash bonuses that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

Historical Annual Share Usage

While the use of equity is an important part of our compensation program, we are particularly mindful of our responsibility to our stockholders to exercise judgment in the granting of equity and equity-based awards. As a result, we evaluated both our “overhang percentage” and annual share usage, or “burn rate,” in considering the advisability of the 2015 Plan and its potential impact on our stockholders.

PROPOSAL 3

26APPROVAL OF THE COMPANY’S 2018 EMPLOYEE STOCK PURCHASE PLAN

Tax Treatment for 2018 Plan Participants.Participants will not recognize income when they enroll in the 2018 Plan or when they purchase shares. All tax consequences are deferred until the participant disposes of the shares.

If the participant holds the shares for both one year or more after the purchase date and two years or more after the offering date, which is the first day of any offering period (referred to as the Section 423 holding period), the participant will generally recognize ordinary income upon sale or other disposition of the shares equal to the lesser of (i) the amount of the excess, if any, of the fair market value of the shares on the offering date over the purchase price and (ii) the amount of the excess, if any, of the fair market value of the shares on the date of disposition over the purchase price. Special rules apply if the purchase price is not fixed on the offering date. Any additional gain will be taxed as long-term capital gain. If the shares are sold for less than the purchase price, there is no ordinary income, and the participant will have a long-term capital loss for the difference between the purchase price and the sale price.

If a participant sells or otherwise disposes of the shares before the end of the Section 423 holding period, the participant will generally have ordinary income equal to the difference between the purchase price and the fair market value on the purchase date. The difference between the sale price and the fair market value on the purchase date will be a capital gain or loss, which will be long-term if the shares have been held for more than one year.

Tax Treatment to the Company.    If a participant recognizes ordinary income by selling or otherwise disposing of shares before the end of the Section 423 holding period, the Company will generally be entitled to a tax deduction equal to the participant’s ordinary income. Otherwise, the Company will not be entitled to any income tax deduction with respect to shares purchased under the 2018 Plan.

New Plan Benefits

The 2018 Plan will become effective only upon approval by the Company’s stockholders. Because benefits under the 2018 Plan will depend on employees’ elections to participate and to purchase shares under the 2018 Plan at various future dates, it is not possible to determine the benefits that will be received by the executive officers and other employees if the 2018 Plan is approved by the stockholders.Non-employee directors are not eligible to participate in the 2018 Plan.

Vote Required and Board of Directors’ Recommendation

Approval of this proposal requires a number of votes “for” the proposal that represents a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting, with abstentions and brokernon-votes each being counted as present for purposes of determining the presence of a quorum, abstentions having the same effect as a negative vote and brokernon-votes having no effect on the outcome of the vote.

The Board of Directors believes that the opportunity to purchase shares under the 2018 Plan is an important factor in motivating and retaining its employees. The Company holds the creation and unlocking of stockholder value among its guiding principles and strives in its performance-based compensation programs to focus the energy and attention of its employees on the creation of long-term value for our stockholders. The Board of Directors believes equity-based reward programs such as the 2018 Plan are valuable tools to retain the Company’s valued employees and to closely align their interests with those of our stockholders. Consequently, the Board believes that it is in the best interests of our stockholders to approve the adoption of the 2018 Plan.

The Board of Directors recommends that stockholders vote FOR the proposal to approve the

Company’s 2018 Employee Stock Purchase Plan.

PROPOSAL 4

RATIFICATION OF SELECTIONAPPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We are askingThe Audit Committee of the stockholders to ratifyBoard is responsible for the selectionappointment, compensation, retention and oversight of the independent registered public accounting firm responsible for auditing the Company’s consolidated financial statements. The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm for 2015. 2018, and we are asking the stockholders to ratify its appointment of Deloitte. Deloitte has been retained as the Company’s independent registered public accounting firm since 1994. The Audit Committee and the Board believe that the continued retention of Deloitte to serve as our independent registered public accounting firm is in the best interests of the Company and its stockholders.

If the stockholders fail to ratify the appointment, the Audit Committee of the Board will reconsider the appointment but is not obligated to appoint another independent registered public accounting firm. Even if the selectionappointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditor at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.

A representative of Deloitte & Touche LLP is expected to attend the Annual Meeting, will be given an opportunity to make a statement and will be available to respond to appropriate questions from stockholders.

Audit Fees Paid to Deloitte & Touche LLP

The aggregate fees billed by Deloitte & Touche LLP and their respective affiliates for professional services rendered in 20142017 and 20132016 are as follows:

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EXECUTIVE OFFICERS OF THE COMPANY

In addition to Paul T. Idzik, the CEO,Rodger A. Lawson, Executive Chairman, and Karl A. Roessner, Chief Executive Officer, the following are our executive officers as of March 25, 2015:27, 2018:

Matthew J. AudetteMichael A. Pizzi is Executive Vice President and Chief Financial Officer of the Company, a position he has held since January 2011. Mr. Audette joined E*TRADE in 2000, whenresponsible for all finance and accounting functions for the Company, acquired Telebank, whereincluding financial reporting, planning, tax, treasury, as well as the Company’s investor relations, corporate communications, facilities and procurement functions. Mr. Pizzi has been with the Company since 2003 and most recently served as the Company’s Chief Risk Officer. Prior to that he served as Controllerthe Corporate and bank Treasurer, during which time he was responsible for all portfolio, capital and liquidity management. He also previously held various positions in the Capital Markets department.Company’s portfolio management and derivatives functions. Before joining the Company, Mr. Audette served from 2005 through 2010Pizzi worked in asset/liability management at both Lehman Brothers and First Maryland Bank, as Senior Vice President, Corporate Controllerwell as in capital markets research for the Company.Federal Reserve Board. Mr. Pizzi earned a B.A. in Economics from Ursinus College, is a CFA charterholder, and holds the Financial Risk Manager (FRM) designation.

Michael J. Curcio is Chief Brokerage Officer of the Company, responsible for leading the retail brokerage business, including all Product, Digital Channels, all Marketing, and the Company’s Corporate Services channel. Prior to 2005,re-joining the Company, Mr. Curcio was the CEO of Aperture Group, LLC, the parent company of OptionsHouse. A respected veteran of the online brokerage industry, he servedhas a20-year track record of releasing award-winning products, implementing customer retention strategies, and building cross-functional teams. Before joining Aperture Group and OptionsHouse, Mr. Curcio spent 11 years at the Company, last serving as Controllerthe head of E*TRADE Bankthe Company’s brokerage business, in addition to the corporate services and Chief Financial Officermarket making channels. Prior to first joining the Company, Mr. Curcio spent 15 years at TD Waterhouse, last serving as EVP of E*TRADE Bank,Customer Relationship Management. Mr. Curcio received a position he continues to hold.B.S. in Business from the State University of New York, at Plattsburgh. He was also interim Chief Financial Officer in 2008. Since October 2011, he haspreviously served on the Board of Directors of Network for Teaching Entrepreneurship. Mr. Audette began his career in public accounting at KPMG and holds a B.S. in Accounting from Virginia Tech.

Michael E. Foley is Executive Vice President and Chief Administrative OfficerGovernors of the Company, a position he has held since June 2013, having joined the Company in February 2013. Mr. Foley oversees the Company’s technology infrastructure, operations, human resources, facilities management and procurement functions. Mr. Foley has an extensive background in project management, making him well-suited to oversee a wide range of programs critical to the successful execution of the Company’s strategic imperatives. Prior to joining the Company, Mr. Foley worked as a consultant at Foley & Cunningham from April 2009 to February 2013. Mr. Foley also held several roles at Barclays Bank PLC from January 2005 to April 2009, including Interim Chief Information Officer and Chief Administrative Officer, where he was responsible for several global functions supporting 170,000 employees across 60 countries. Mr. Foley began his career at Booz & Company, where he helped clients develop strategies and plans to address technology and operational issues over his 16 year career. Mr. Foley studied at Hatfield Polytechnic, in Hertfordshire, England.Philadelphia Stock Exchange (PHLX), now NASDAQ OMX PHLX.

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Karl A. Roessner is Executive Vice President and General Counsel of the Company, a position he has held since May 2009. Mr. Roessner manages the legal, compliance and regulatory functions for the Company and its bank and brokerage subsidiaries. He also acts as Corporate Secretary to the Company’s and E*TRADE Bank’s Boards of Directors. Leveraging a depth of experience in legal matters related to highly regulated public companies, including board advisory, corporate governance, mergers & acquisitions and capital raising, Mr. Roessner is responsible for the oversight, guidance and direction of all legal, compliance and regulatory matters. Mr. Roessner has more than 20 years of experience practicing law. Prior to joining the Company in May 2009, Mr. Roessner was a partner in the Corporate Practice group of Clifford Chance US LLP, one of the world’s leading law firms. There, he advised clients on negotiated public and private transactions, management and leveraged buyouts, capital raising activities and corporate governance matters. Mr. Roessner earned a B.S. in Business Administrationcum laude from Siena College and his J.D.cum laude from St. John’s University School of Law where he was a member of the St. John’s University Law Review.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of the Company’s Common Stock as of March 13, 2015,12, 2018, by (i) each director; (ii) each NEO; (iii) all current directors and executive officers as a group; and (iv) each person who is known to the Company to beneficially own more than 5% of the outstanding shares of the Common Stock of the Company. Unless otherwise indicated, all persons named as beneficial owners of the Common Stock have sole voting power and sole investment power with respect to the shares indicated as owned. In addition, unless otherwise indicated, the address for each person named below is c/o E*TRADE Financial Corporation, 1271 Avenue of the Americas, 14th11 Times Square, 32nd Floor, New York, New York 10020-1302.10036.