UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ¨☒
Filed by a Party other than the Registrant ¨☐
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(as permitted by Rule 14a-6(e)(2)) | |
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SVB FINANCIAL GROUP
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Thursday, April 21, 2016
4:30 P.M.
TO THE STOCKHOLDERS:
I am pleased to invite you to attend the 2016 Annual Meeting of Stockholders of SVB Financial Group, a Delaware corporation, which will be held at our offices located at 3005 Tasman Drive, Santa Clara, California 95054, on Thursday, April 21, 2016 at 4:30 p.m., Pacific Time. The purposes of the meeting are to:
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The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. To assure your representation at the meeting, you are encouraged to vote your shares as soon as possible. Voting instructions are included in: (i) for those stockholders receiving printed proxy materials, the enclosed Proxy Card, and (ii) for all other stockholders, the Notice Regarding the Availability of Proxy Materials (as further described in the Proxy Statement). Any stockholder attending the meeting may vote in person even if such stockholder has previously voted by proxy.
Only stockholders of record at the close of business on February 23, 2016 may vote at the meeting or any postponement or adjournment thereof.
Santa Clara, California
March 3, 2016
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, OR VOTE OVER THE TELEPHONE OR THE INTERNET AS PROMPTLY AS POSSIBLE, IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. IF YOU HAVE RECEIVED PRINTED PROXY MATERIALS, A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR YOUR CONVENIENCE. EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. WE ENCOURAGE YOU TO VOTE: (I) FOR THE ELECTION OF ALL ELEVEN (11) NOMINEES FOR DIRECTOR AND (II) IN FAVOR OF THE ABOVE REMAINING PROPOSALS.
PROXY STATEMENT—TABLE OF CONTENTS
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SUMMARY PERFORMANCE AND PROXY INFORMATION
This summary highlights our 2015 performance, as well as information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should review this entire Proxy Statement, as well as our Annual Report on Form 10-K for the year 2015.
2015 PERFORMANCE
2015 FINANCIAL PERFORMANCE (COMPAREDTO 2014)
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+ This is a non-GAAP financial metric. See Appendix A for reconciliation.
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SUMMARY INFORMATION
2015 BUSINESS PERFORMANCE
2015 marked another year of robust business growth. We continued to focus on building deep relationships with fast growth, innovation companies and their investors, and continued to leverage our platform and expertise to grow our market leadership. Key 2015 business highlights, compared to 2014, include:
For more information, please see our 2015 Year In Review Letter to Our Stockholders.
SVB BOARDOF DIRECTORS
From left to right: David Clapper, Greg Becker, Lata Krishnan, Joel Friedman, Kate Mitchell, Eric Benhamou, Garen Staglin, John Robinson, Mary Miller, Roger Dunbar, Jeff Maggioncalda, and C. Richard Kramlich.(Mr. Kramlich transitioned into an advisory director role as of January 1, 2016.)
1 “Innovation economy” companies mean those in the hardware, software, life science, and energy and resource innovation industries.
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SUMMARY INFORMATION
ANNUAL MEETINGAND PROXY STATEMENT INFORMATION
ANNUAL MEETING
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PROPOSALSAND VOTING RECOMMENDATIONS
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| Board Committee Membership* | ||||||||||||||||||||||||
| Name | Age | Year First Elected By Stockholders | Principal Occupation | Independent | Audit | Compensation | Credit | Finance | Governance | Risk | ||||||||||||||
Greg W. Becker | 48 | 2011 | President and Chief Executive Officer, SVB Financial Group and Silicon Valley Bank | — | ||||||||||||||||||||
Eric A. Benhamou | 60 | 2005 | Chairman and Chief Executive Officer, Benhamou Global Ventures, LLC | l | X | C | X | |||||||||||||||||
David M. Clapper | 64 | 2005 | Chief Executive Officer, Minerva Surgical, Inc. | l | X | C | X | |||||||||||||||||
Roger F. Dunbar | 70 | 2005 | Board Chairman SVB Financial Group and Silicon Valley Bank; Retired, Former Global Vice Chairman, Ernst & Young, LLP | l | X | X | X | C | ||||||||||||||||
Joel P. Friedman | 68 | 2005 | Retired, Former President, Business Process Outsourcing, Accenture | l | C | X | X | |||||||||||||||||
Lata Krishnan | 55 | 2008 | Chief Financial Officer, Shah Capital Partners | l | X | X | ||||||||||||||||||
Jeffrey N. Maggioncalda | 47 | 2012 | Former Chief Executive Officer, Financial Engines | l | X | X | ||||||||||||||||||
Mary J. Miller | 60 | — | Former Under Secretary for Domestic Finance, U.S. Department of Treasury | l | X | |||||||||||||||||||
Kate D. Mitchell | 57 | 2010 | Co-Founder and Managing Director, Scale Venture Partners | l | X | C | X | |||||||||||||||||
John F. Robinson | 69 | 2011 | Former Deputy Comptroller of the Currency and former Executive Vice President, Washington Mutual Bank | l | C | X | X | X | ||||||||||||||||
Garen K. Staglin | 71 | 2012 | Proprietor, Staglin Family Vineyard | l | X | X | ||||||||||||||||||
* “C” denotes committee chairperson; all memberships are as of the date of this Proxy Statement.
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SUMMARY INFORMATION
CORPORATE GOVERNANCE HIGHLIGHTS
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AUDITOR MATTERS
As a matter of good corporate practice, we are seeking your ratification of KPMG LLP as our independent registered public accounting firm for the 2016 fiscal year.
For 2015, 91% of total 2015 fees represented audit and audit-related fees. (For more information, see page 61.)
EXECUTIVE COMPENSATION
Consistent with our Board’s recommendation and our stockholders’ preference, we submit an advisory vote to approve our executive compensation (otherwise known as “Say on Pay”) on an annual basis. Accordingly, we are seeking your approval, on an advisory basis, of the compensation of our Named Executive Officers, as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement.
For a summary of the highlights of our 2015 executive compensation and key features of our executive compensation programs, please refer to the Executive Summary of the “Compensation Discussion and Analysis” section of this Proxy Statement on page 29.
IMPORTANT DATESFOR 2017 ANNUAL MEETING
Stockholder proposals for inclusion in our 2016 proxy statement pursuant to SEC Rule 14a-8 must be received by us by November 12, 2016. Notice of stockholder proposals for the 2016 annual meeting outside of SEC Rule 14a-8 must be received by us no earlier than December 26, 2016 and no later than January 25, 2017.
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SUMMARY INFORMATION
Mailed to Stockholders on or about March 10, 2016
PROXY STATEMENT
OF
SVB FINANCIAL GROUP
3003
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Thursday, April 27, 2017
4:30 P.M.
Dear Stockholders:
On behalf of the Board of Directors, I am pleased to invite you to attend the 2017 Annual Meeting of Stockholders of SVB Financial Group, a Delaware corporation, which will be held at our offices located at 3005 Tasman Drive,
Santa Clara, California 95054, on Thursday, April 27, 2017 at 4:30 p.m., Pacific Time. The purposes of the meeting are to:
| 1. | Elect eleven (11) directors to serve for the ensuing year and until their successors are elected, |
| 2. | Ratify the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2017, |
| 3. | Approve, on an advisory basis, our executive compensation (“Say on Pay”), |
| 4. | Approve, on an advisory basis, the frequency of future Say on Pay votes, and |
| 5. | Transact such other business as may properly come before the meeting. |
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. To assure your representation at the meeting, you are encouraged to vote your shares as soon as possible. This Notice and the Proxy Statement provide instructions on how you can vote your shares online or by telephone, or if you have received a printed copy of the proxy materials and a proxy card, by mail. You may attend the meeting and vote in person even if you have previously voted by proxy.
Only stockholders of record at the close of business on February 27, 2017 may vote at the meeting or any postponement or adjournment thereof.
| BY ORDER OF THE BOARD OF DIRECTORS, |
| /s/ Roger F. Dunbar |
| Roger F. Dunbar |
| Chairman of the Board |
Santa Clara, California
March 9, 2017
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD, OR VOTE OVER THE TELEPHONE OR THE INTERNET AS PROMPTLY AS POSSIBLE, IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. IF YOU HAVE RECEIVED PRINTED PROXY MATERIALS, A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR YOUR CONVENIENCE. EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. WE ENCOURAGE YOU TO VOTE: (I) FOR THE ELECTION OF ALL ELEVEN (11) NOMINEES FOR DIRECTOR, (II) FOR AN ANNUAL FREQUENCY OF FUTURE SAY ON PAY VOTES AND (III) IN FAVOR OF THE ABOVE REMAINING PROPOSALS.
PROXY STATEMENT—TABLE OF CONTENTS
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SUMMARY PERFORMANCE AND PROXY INFORMATION | ||||
PROXY STATEMENT GENERAL INFORMATION | ||||
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||||
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EXECUTIVE OFFICERS AND COMPENSATION | ||||
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SECURITY OWNERSHIP INFORMATION | ||||
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OTHER PROXY PROPOSALS | ||||
◾Proposal No. 2 – Ratification of Appointment of Independent Registered Public Accounting Firm | 53 | |||
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◾Proposal No. 3 – Advisory Approval of our Executive Compensation | 54 | |||
◾Proposal No. 4 – Advisory Approval of the Frequency of Say on Pay Vote | 54 | |||
MEETING AND OTHER INFORMATION | ||||
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Appendix A – Reconciliation of Certain GAAP toNon-GAAP Financial Information | A-1 | |||
| ◾ | Indicates matters to be voted on at the Annual Meeting. |
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SUMMARY PERFORMANCE AND PROXY INFORMATION
This summary highlights our 2016 performance, as well as information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should review this entire Proxy Statement, as well as our Annual Report on Form10-K, for the year 2016.
| 2016 PERFORMANCE |
| 2016 FINANCIAL PERFORMANCE (COMPAREDTO 2015) |
We achieved another year of record diluted earnings per common share (“EPS”) and net income, and we maintained multi-year growth of our average total assets, loans (net of unearned income), and client funds (deposits and client investment funds).
| 2016 BUSINESS PERFORMANCE |
We are proud of our healthy business growth in 2016, as we continued to serve the innovation economy. We continued to focus on enhancing our client relationships and building our brand, as well as expanding our platform, capabilities and global reach. Some of our business highlights from 2016, compared to 2015, include:
| • | MARKET SHARE GROWTH |
| ¡ | Our net client count increased by 16%. |
| ¡ | We maintained our leading market share of early-stage companies and grew our early-stage client count by 13%. |
| • | CONTINUED FOCUSONOUR GLOBAL GROWTH |
| ¡ | We established an office in Dublin, Ireland. |
| ¡ | We made progress establishing lending branches in Germany and Canada, subject to regulatory approval. |
| ¡ | Our UK and European client count increased by 26%. |
| • | PAYMENTS BUSINESS GROWTH |
| ¡ | Our foreign exchange and credit card fees (“Selected Fee Income”) increased by 20%. |
| ¡ | We crossed the $3 billion and $5 billion thresholds for client credit card spend and merchant card volume, respectively. |
| ¡ | We reached a significant payments processing milestone — over $1 trillion. |
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 | SUMMARY INFORMATION |
| ANNUAL MEETINGAND PROXY STATEMENT INFORMATION |
| ANNUAL MEETING |
| Time and Date: | 4:30 p.m. (Pacific Time), April 27, 2017 | Record Date: | February 27, 2017 | |||
| Place: | SVB Financial Group – Corporate Headquarters 3005 Tasman Drive, Santa Clara, California 95054 | Voting: | Stockholders as of record date are entitled to vote | |||
| PROPOSALSAND VOTING RECOMMENDATIONS |
Proposal | Board Recommendation | Page Reference | ||
Proposal No. 1 - Election of Eleven (11) Directors | For all nominees | 2 | ||
Proposal No. 2 - Ratification of KPMG LLP as Auditors for 2017 | For | 53 | ||
Proposal No. 3 - Advisory(Non-Binding) Vote on Executive Compensation | For | 54 | ||
Proposal No. 4 - Advisory(Non-Binding) Vote on Say on Pay Frequency | Annual | 54 | ||
| DIRECTOR NOMINEES |
We are seeking your vote FOR all of the director nominees below:
| Committee Membership* | ||||||||||||||||||||||
| Name | Age | Year First Elected By Stockholders | Principal Occupation | # of Other Public Company Boards | Audit | Compensation | Credit | Finance | Governance | Risk | ||||||||||||
Greg W. Becker | 49 | 2011 | President and Chief Executive Officer, SVB Financial Group | — | ||||||||||||||||||
Eric A. Benhamou | 61 | 2005 | Chairman and Chief Executive Officer, Benhamou Global Ventures, LLC | 2 | X | C | X | |||||||||||||||
David M. Clapper | 65 | 2005 | Chief Executive Officer, Minerva Surgical, Inc. | — | X | C | X | |||||||||||||||
Roger F. Dunbar | 71 | 2005 | Board Chairman SVB Financial Group; Former Global Vice Chairman, Ernst & Young, LLP | — | X | X | X | C | ||||||||||||||
Joel P. Friedman | 69 | 2005 | Former President, Business Process Outsourcing, Accenture | 1 | C | X | X | |||||||||||||||
Lata Krishnan | 56 | 2008 | Chief Financial Officer, Shah Capital Partners | — | X | X | ||||||||||||||||
Jeffrey N. Maggioncalda | 48 | 2012 | Former Chief Executive Officer, Financial Engines | — | X | X | ||||||||||||||||
Mary J. Miller | 61 | 2016 | Former Under Secretary for Domestic Finance, U.S. Department of Treasury | — | X | X | ||||||||||||||||
Kate D. Mitchell | 58 | 2010 | Co-Founder and Managing Director, Scale Venture Partners | 1 | C | X | X | |||||||||||||||
John F. Robinson | 70 | 2011 | Former Deputy Comptroller of the Currency and former Executive Vice President, Washington Mutual Bank | 1 | C | X | X | X | ||||||||||||||
Garen K. Staglin | 72 | 2012 | Proprietor, Staglin Family Vineyard | 1 | X | X | ||||||||||||||||
* “C” denotes committee chairperson; all memberships are as of the date of this Proxy Statement.
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| SUMMARY INFORMATION |
| CORPORATE GOVERNANCE HIGHLIGHTS |
Board Composition
| o | Innovation Economy |
| o | Banking/Financial Services |
| o | Finance/Audit |
| o | Regulatory/Government |
Board Accountability
Stockholder Interests
Risk Management
| AUDITOR MATTERS |
As a matter of good corporate practice, we are seeking your ratification of KPMG LLP as our independent registered public accounting firm for the 2017 fiscal year.
For 2016, 82.9% of total 2016 fees represented audit and audit-related fees. (For more information, see page 53.)
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| SUMMARY INFORMATION |
| EXECUTIVE COMPENSATION |
Consistent with our Board’s recommendation and our stockholders’ preference, we submit an advisory vote to approve our executive compensation (otherwise known as “Say on Pay”) on an annual basis. Accordingly, we are seeking your approval, on an advisory basis, of the compensation of our Named Executive Officers, as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement.
2016 Named Executive Officers (“NEOs”)
| • | Michael Descheneaux, Chief Financial Officer* |
| • | Joan Parsons, Credit Risk Manager** |
2016 Compensation Highlights
Compensation Governance and Practices
For a summary of the highlights of our 2016 executive compensation and key features of our executive compensation governance and practices, please refer to the Executive Summary of the “Compensation Discussion and Analysis” section of this Proxy Statement on page 27.
| ANNUAL “SAYON PAY” FREQUENCY |
Consistent with 2011 (the last time our Say on Pay Frequency vote was submitted for stockholder approval), our Board of Directors is once again recommending that a Say on Pay advisory vote occur on anannual basis. Our Board values the opinions of our stockholders and believes that an annual advisory vote will allow our stockholders to provide us with their direct input on our executive compensation for our NEOs. | Our Board of Directors recommends an ANNUAL FREQUENCY |
| IMPORTANT DATESFOR 2018 ANNUAL MEETING |
Stockholder proposals for inclusion in our 2018 proxy statement pursuant to SEC Rule14a-8 must be received by us by November 9, 2017. Notice of stockholder proposals for the 2018 annual meeting outside of SEC Rule14a-8 must be received by us no earlier than December 24, 2017 and no later than January 23, 2018.
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| * | We announced on January 26, 2017 that Mr. Descheneaux will be appointed as President of Silicon Valley Bank, to become effective upon the appointment of a new Chief Financial Officer. |
| ** | Ms. Parsons transitioned from Head of Specialty Banking to thenon-executive role of Credit Risk Manager and Mr. China’s title changed to Head of Technology Banking, both as of February 6, 2017. |
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| SUMMARY INFORMATION |
| PROXY STATEMENT INFORMATIONOF SVB FINANCIAL GROUP |
| 3003 TASMAN DRIVE, SANTA CLARA, CALIFORNIA 95054 |
PROXY STATEMENT GENERAL INFORMATION
Mailed to Stockholders on or about March 9, 2017
General
This Proxy Statement is furnished in connection with the solicitation of proxies by, and on behalf of, the Board of Directors (the “Board”) of SVB Financial Group (the “Company”) for useto be voted at our 20162017 Annual Meeting of Stockholders toand any adjournments or postponements of that meeting (the “Annual Meeting”). The Annual Meeting will be held at our offices located at 3005 Tasman Drive, Santa Clara, California 95054, on Thursday, April 21, 201627, 2017 at 4:30 p.m., Pacific Time, and at all postponements or adjournments thereof (the “Meeting”). (ForTime. For directions to attend the Annual Meeting in person, please contact usvisit our website at the telephone number below.)http://www.svb.com/locations.aspx.
Record Date
Only stockholders of record as of the close of business on February 23, 201627, 2017 (the “Record Date”) will be entitled to vote at the Annual Meeting. At the close of business on the Record Date, there were 51,629,09652,361,590 shares of our common stock, $0.001 par value (the(our “Common Stock”), outstanding.
Principal Executive Offices
The Company is a Delaware corporation and financial holding company for Silicon Valley Bank (the “Bank”) and its affiliates. Our principal executive offices are located at 3003 Tasman Drive, Santa Clara, California 95054, and our telephone number at that location is(408) 654-7400.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
This Proxy Statement and our 20152016 Annual Report on Form10-K are available electronically atwww.svb.com/proxyproxy.. (The The contents of our website are not incorporated herein by reference and any reference to our website address provided throughout this Proxy Statement is intended to be an inactive textual reference only. See also “Information about Voting and Proxy Solicitation – Delivery of Proxy Materials”below.The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.) See also “Information About Voting and Proxy Solicitation – Delivery of Proxy Materials” below.
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| PROXY STATEMENT INFORMATION |
PROXY STATEMENT INFORMATION
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
ELECTION OF DIRECTORS
The Board of Directors Recommends a Vote “For”“FOR” All Nominees
| DIRECTOR ELECTION, QUALIFICATIONAND OTHER INFORMATION |
Our amendedAmended and restated bylawsRestated Bylaws (the “Bylaws”) require the Board of Directors to consist of at least eight (8), but no more than thirteen (13) members, with the exact number to be fixed by the Board of Directors. The number of directors authorized by the Board is currently fixed at eleven (11).
OurUpon the recommendation of the Governance Committee, our Board of Directors has nominated eleven (11) directors — ten (10) independent directors and the CEO — for election at this year’s Annual Meeting to hold office until the next annual meeting. All of our incumbent directors are nominees forre-election to the Board and were recommended by the Governance Committee. All of the nominees, with the exception of Ms. Miller (who joined the Board in May 2015), servedlast elected to serve as directors of the Company since the lastat our annual meeting of stockholders in April 2015, each of whom2016. Each received the support of more than 99%98% of the votes cast at the 20152016 Annual Meeting.
We believe that our director nominees, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to createmaintain an effective Board to serve the best interests of the Company and its stockholders.
Vote Required
Pursuant to our Bylaws, directors are elected by a plurality of votes cast at the Annual Meeting. This means that the eleven (11) nominees who receive the highest number of votes cast “for” their election will be elected.
Director Qualifications
The Board recognizes that it is of utmost importance to assemble a body of directors that, taken together, has the skills, qualifications, experience and attributes appropriate for functioning as a board and working productively with
The Board believes that our incumbent directors, as a whole, have these areas of experience and that each director possesses particular attributes which qualify him or her to serve on the Board, as further noted in his or her respective biography below. | PRIMARY AREASOF DIRECTOR QUALIFICATION | |||||||
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ATTRIBUTES | ✓ Strong strategic and innovative thinking ✓ Integrity ✓ Collegial spirit ✓ Sound business judgment | ✓ Professionalism
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
Nominees for Director
All proxies will be voted “FOR”“FOR” the election of the following eleven (11) nominees recommended by the Board, for a term of one year, unless authority to vote for the election of directors (or for any particular nominee) is withheld. If any of the nominees should unexpectedly declinedeclines or bebecomes unable to act as a director, the proxies may be voted for a substitute nominee designated by the Board. As of the date of this Proxy Statement, the Board has no reason to believe that any nominee will become unavailable and has no present intention to nominate persons in addition to, or in lieu of, those listed below. Our directors serve until the next annual meeting of stockholders and until their successors are duly elected and qualified, or until their earlier death, resignation or removal.
Vote Required
Any nominee who receives a greater number of votes cast “for” his or her election than votes cast “withheld” his or her election will be elected.
Majority VotingDirector Resignation Policy
The
In addition, the Governance Committee of our Board has adopted a majority votingdirector resignation policy applicable to uncontested director elections, (i.e.,such as the election to be held at the upcoming Annual Meeting. Uncontested elections are elections where the number of nominees is not greater than the number of directors to be elected). Under thiselected. Pursuant to the director resignation policy, any of our director nominees in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall, promptly following certification of the stockholder vote, offeris required to tender his or her resignation to the Board for consideration.consideration promptly following certification of the stockholder vote. The Governance Committee will act within 90ninety (90) days after certification of the stockholder vote to determine whether to accept the director’s resignation, and thereafter submit such resignation and its recommendation to the Board for consideration at itsthe Board’s next scheduled meeting. The Board expects that theany director whose resignation is under consideration will abstain from participating in any decision or deliberation regarding that resignation. Following the Board’s decision, weWe will publicly disclose theany decision made by the Board with respect to any such tendered resignation.
Director Biographies
| DIRECTOR BIOGRAPHIES |
The biographical information for each of the director nominees is as follows:
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| Mr. Becker was appointed the President and Chief Executive Officer of the Company and the Bank in April 2011. He first joined us in 1993 as part of the Northern California Technology Division, and since then, has served in a number of executive and senior management positions, including Division Manager of Venture Capital (1999-2002), Chief Banking Officer (2002-2003), Chief Operating Officer (2003-2008) and President of the Bank (since 2008). | |||||
Director since: 2011 Age: 49 Committees: None Independent: — |
Mr. Becker, age 48, was appointed the PresidentSpecific Qualifications, Attributes, Skills and Chief Executive Officer of the Company and the Bank in April 2011. He first joined us in 1993 as part of the Northern California Technology Division, and since then, has served in a number of executive and senior management positions, including Division Manager of Venture Capital (1999-2002), Chief Banking Officer (2002-2003), Chief Operating Officer (2003-2008) and President of Silicon Valley Bank (since 2008). Mr. Becker was elected by stockholders as a director of the Company in April 2011.Experience
Current Private Directorships: | • Chairman, Silicon Valley Leadership Group, anon-profit organization with an emphasis on issues of importance to employers, employees and residents of Silicon Valley (member since 2011) • Executive Council, TechNet (since • Member, U.S. Department Digital Economy Board of Advisors (since 2016) | |
Prior Directorships: | • Director and executive committee member, Bay Area Council, a public policy advocacy organization (2011-2015) | |
Other Prior Experience: | • President, Board of Trustees, Silicon Valley and Monterey Bay Area Chapter of the Leukemia & Lymphoma Society (2004-2011) | |
Education: | • Bachelor’s degree in Business from Indiana University | |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| ERIC A. BENHAMOU |
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| Director since: 2005 Age: 61 Committees: Governance (Chair) Finance and Risk Independent: |
Mr. Benhamou, age 60, is ChairmanSpecific Qualifications, Attributes, Skills and CEO of Benhamou Global Ventures, LLC, which he founded in 2003. Benhamou Global Ventures, LLC invests and plays an active role in innovative high tech firms throughout the world. He also sits on various public and private technology company boards, and serves a variety of educational and philanthropic organizations. Mr. Benhamou was appointed by the Board of Directors as a director of the Company in February 2005 and was first elected by stockholders in April 2005.Experience
Public Directorships: | • Chairman, Cypress Semiconductor Corporation, a semiconductor company (since 1993) • Finjan | |
Private Directorships: | • Chairman, Totango, a customer success and data platform (since 2016) • Chairman, Ayehu, a developer of IT process automation products (since 2015) • Grid Dynamics, a provider of commerce technology solutions for retailers (since 2015) • Virtual Instruments, an infrastructure performance analytics company (since 2016) | |
Other Current Experience: | • Chairman, | |
Prior Directorships: | • Qubell, • ConteXtream, a private carrier equipment vendor for intellectual property based media services (acquired by Hewlett • Load Dynamix, • Purewave, Inc., a private developer of outdoor compact base stations for the 4G marketplace (2010-2014) • RealNetworks, Inc., a public company creator of digital media services and software (2003-2012)
• Voltaire Ltd., a public grid computing network solutions company (acquired by Mellanox Technologies, Ltd.) (2007-2011) • Dasient Inc., a private security company that provides malware detection and prevention solutions (acquired by Twitter, Inc.) (2010-2011) • Chairman, 3Com Corporation, a public networking solutions provider (acquired by Hewlett-Packard Company) (1990-2010) • Chairman of the Board of Directors of Palm, Inc., a public mobile products provider (acquired by Hewlett-Packard Company) (1999-2007)
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Other Prior Experience: | • Executive committee member, Stanford University School of Engineering (1996-2015) • Visiting professor, IDC Business School (2001-2015) • Executive committee member, Ben Gurion University of Negev (2000-2013) • Visiting professor, INSEAD Business School (2003-2012) • Executive committee member, Computer Science & Telecommunications Board (CSTB) (2003-2008) • Interim Chief Executive Officer of Palm, Inc. (2001-2003) • Chief Executive Officer, 3Com Corporation (1990-2000), and other • Executive committee member, • Member,US-Israel Science and Technology Commission (2003)
• Co-founder and Vice President of Engineering, Bridge Communications (1981-1987) | |
Education: | • Engineering degree from l’École Nationale Supérieure d’Arts et Métiers in Paris, France • Master’s degree in Science from the School of Engineering at Stanford University • Several honorary doctorates | |
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| Leadership – Held a variety of key executive positions, including Chairman/CEO roles at 3Com Corporation and Palm, Inc. |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| DAVID M. CLAPPER | ||||
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| Director since: 2004 Age: 65 Committees: Credit (Chair), Audit and Risk Independent: | ||||||
Mr. Clapper, age 64, has been the Chief Executive Officer of Minerva Surgical, a medical device company, since May 2011. He has had an extensive career in the healthcareSpecific Qualifications, Attributes, Skills and medical device industries, including serving as the President and Chief Executive Officer (2005-2008) of SurgRx, Inc., a privately held medical device manufacturer, until its acquisition by Ethicon Endo-Surgery in 2008, as well as a variety of public and private company directorships. Mr. Clapper was appointed by the Board of Directors as a director of the Company in October 2004 and was first elected by stockholders in April 2005.Experience
Private Directorships: | • | |
• Corinth • RELIGN Corporation, a medical device company (since 2011) | ||
Prior Directorships: | • Carbylan Therapeutics (acquired by KalVista) (2014-2016) • MOSIAX, Inc. | |
• Arqos Surgical, Inc., a private technology holding company (2011-2015) • • Neomend, Inc., a private designer of surgical sealants and adhesion prevention products (acquired by • Baxano Surgical, Inc., a private medical device manufacturer (2009-2011) • • Sierra Surgical Technologies, a private surgical device company (2007-2011) • Other directorships completed prior to 2009 | ||
Other Prior Experience: | • President and Chief Executive Officer, Novacept (1999-2004) • President and Chief Executive Officer, Focal, Inc. (1994-1999) • Various management positions at Johnson & Johnson, a public company provider of professional consumer health care products and services (1977-1993) | |
Education: | • Bachelor’s degree in Marketing from Bowling Green State University | |
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| Leadership – Current role as Chief Executive Officer of Minerva Surgical, Inc. as well as held other prior Chief Executive Officer positions of other life science companies. |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| ROGER F. DUNBAR |
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| Director since: 2004 Age: 71 Committees: Risk (Chair), Audit, Finance and Governance Independent: | ||||||
Mr. Dunbar, age 70, is our current Chairman of the Board of Directors,Specific Qualifications, Attributes, Skills and subject to his election, he is expected to continue to serve as our Board Chairman during the 2016-2017 director term. Mr. Dunbar retired from Ernst and Young in 2004, where he served in a variety of positions since 1974, including key leadership positions. Mr. Dunbar was appointed by the Board of Directors as a director of the Company in October 2004 and was first elected by stockholders in April 2005.Experience
| Prior Experience with Ernst & Young: | • Global Vice Chairman, Strategic Growth Markets and Venture Capital (2000-2004) • Member, Global Practice Council, London, United Kingdom (2000-2004) • Member, Global Management Committee, London, United Kingdom (2000-2004) • Member, • Client Service Partner and other key positions, includingPartner-in-Charge and Area Managing Partner, Silicon Valley and the Pacific Northwest Area (1974-2000) | |
Prior Directorships: | • Desert Mountain Club, Inc. (2010-2015) • Desert Mountain Property, Inc. (2009-2010) • Advisory Board Member, SVB Financial Group and Silicon Valley Bank (2001-2004)
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Other Prior Experience: | • Instructor, Santa Clara University’s Graduate School of Business • Instructor, Ernst & Young’s National Education Program • Advisory Boards, Santa Clara University and • Member, Joint Venture Silicon Valley’s 21st Century Education Board • U.S. Naval Officer (1967-1980) | |
Education: | • Bachelor’s degree in Business from San Francisco State University • Master’s degree in Business Administration from Santa Clara University • Certified public accountant, inactive, and a member of the California State Board of Accountancy and the AICPA | |
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| Leadership – Held a variety of key executive positions, including Global Vice Chairman of Ernst & Young. |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| JOEL P. FRIEDMAN |
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| Director since: 2004 Age: 69 Committees: Finance (Chair), Governance and Risk Independent: | ||||||
Mr. Friedman, age 68, retired from Accenture, a public company global management consulting firm in 2005, where he held the position of President of the Business Process Outsourcing (“BPO”) organization. Over the course of his 34-year career with Accenture, Mr. Friedman held a variety of senior leadership roles. Mr. Friedman was appointed by the Board of Directors as a director of the Company in October 2004Specific Qualifications, Attributes, Skills and was first elected by stockholders in April 2005.Experience
Public Directorships: | • NeuStar, Inc. a provider of essential clearinghouse services to the communications industry (since 2006) | |
Private Directorships: | • Advisory Director, FTV Capital (formerly Financial Technology Ventures) (since 2005) • Advisory Director, Community Gatepath, anon-profit organization dedicated to enabling persons with disabilities to live as fully integrated members of the community (since 2013; director from 1991-2012) | |
Prior Experience with Accenture: | • President of the • Managing Partner, Banking and Capital Markets • Managing General Partner, Accenture Technology Ventures • Founder, Accenture strategy consulting practice | |
Prior Directorships: | • EXL Services (Advisory Director), a provider of offshore business process outsourcing solutions (2008-2011) • Endeca Technologies, Inc., a provider of enterprise search solutions (2006-2011) (acquired by Oracle) • Junior Achievement of Northern California, anon-profit organization that assists young people understand the economics of life (2004-2010) • Other directorships completed prior to 2009 | |
Other Prior Experience: | • Dean’s Advisory Council for Stanford Graduate School of Business (1998-2004) | |
Education: | • Bachelor’s degree in Economics from Yale University • Master’s degree in Business Administration from Stanford University | |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| LATA KRISHNAN |
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Ms. Krishnan | Director since: 2008 Age: 56 Committees: Audit and Independent:✓ |
Specific Qualifications, Attributes, Skills and Experience
Private Directorships: | • Chair, American India Foundation, an organization dedicated to accelerating social and economic development in India (since 2001) • The Commonwealth Club, a public affairs forum (since 2004) | |
Other Experience: | • Fellow, American Leadership Forum (since 1998) | |
Prior Directorships: | • Enlighted, Inc., an information technology consulting firm (2010-2013) • TiE, anon-profit global network of entrepreneurs and professionals • Global Heritage Fund, • CEO Women, • America’s Foundation for Chess, anon-profit foundation committed to children’s education (2003-2011) • Global Philanthropy Forum, • Narika, a shelter for abused women in the Asian community (1998-2011) | |
Other Prior Experience: | • Co-Founder and Chief Financial Officer, SMART Modular Technologies, Inc., a manufacturer of computer memory modules (1989-1999) • Various corporate accounting and finance positions with Montgomery Services • Various corporate accounting and finance positions with Arthur Andersen & Company LLP • Various corporate accounting and finance positions with Hill Vellacott & Company in London | |
Education: | • Bachelor’s degree with honors from the London School of Economics • Member of the Institute of Chartered Accountants in England and Wales | |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| JEFFREY N. MAGGIONCALDA |
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Mr. Maggioncalda | Director since: 2012 Age: 48 Committees: Compensation and Credit Independent:✓ |
Specific Qualifications, Attributes, Skills and Experience
Prior Directorships: | • Financial Engines, an independent investment advisory firm (2011-2014) • Affinity Circles, a social networking developer | |
Other Prior Experience: | • Summer Associate, McKinsey & Co., a strategy consulting firm (1995) • Associate, Cornerstone Research, an economic and financial consulting firm (1991-1994) | |
Education: | • Bachelor’s degree in Economics and English from Stanford University • Master’s degree in Business Administration from Stanford University | |
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| MARY J. MILLER |
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Ms. Miller | Director since: 2015 Age: 61 Committees: Audit and Finance Independent:✓ |
Specific Qualifications, Attributes, Skills and Experience
Private Directorships: | • The Jeffrey Company, an investment company (since 2016) • Trustee, Cornell University, a higher education institution (since 2015) • ICE Benchmark Association, a unit of the Intercontinental Exchange | |
• Trustee, The Urban Institute, anon-profit research organization (since 2014) | ||
Other Prior Experience: | • Director, Fixed Income Division, T. Rowe Price Group, Inc. a global investment management firm (2004-2010) • Various investment management positions with T. Rowe Price Group | |
Education: | • Bachelor’s degree in Government from Cornell University • Master’s degree in City and Regional Planning, • Chartered Financial Analyst (CFA) | |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| KATE D. MITCHELL |
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| Director since: 2010 Age: 58 Committees: Compensation (Chair), Credit and Risk Independent:✓ |
Ms. Mitchell, age 57, is Managing PartnerSpecific Qualifications, Attributes, Skills and Co-Founder of Scale Venture Partners (“Scale”), a venture capital firm where she leads investments in software and business services and is instrumental in building the firm’s team and strategic direction. Prior to founding Scale in 1996, Ms. Mitchell held a variety of senior management positions with Bank of America. Ms. Mitchell was elected by stockholders as a director of the Company in April 2010.Experience
Public Directorships: | •
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Other Experience: | • Member, Steering Committee, Private Equity Women Investor Network, a forum for senior women in private equity (since 2010) • Member, • Co-Chair, NVCA Diversity Task Force, a forum to increase opportunities for women and minorities in venture capital and entrepreneurship (since 2014) • Silicon Valley Community Foundation, anon-profit organization advising philanthropic solutions for regional and global issues (since 2015) | |
Prior Directorships: | •
• • • New Century Hospice, a provider of hospice services for patients, families and healthcare providers (2014-2015) • Jaspersoft, Inc., a manufacturer of business intelligence software (2009-2014) • Friends of the San Francisco Public Library (2007-2010) • Wayport, Inc. (2000-2008) • Other directorships completed prior to 2009 include: Songbird Medical (1998-2005); Acusphere, Inc., a public pharmaceutical company (1999-2005); Tonic Software, Inc. (2000-2005); Pavilion Technologies, Inc. (2004-2007) | |
Other Prior Experience: | • Silicon Valley Bank Venture Capital Advisory Board (2008-2013) • Various senior management positions in finance and technology (including Senior Vice President), Bank of America • Various finance and lending positions at Bank of California (now Union Bank of California) | |
Education: | • Bachelor’s degree in Political Science from Stanford University • Master’s degree in Business Administration from Golden Gate University | |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| JOHN F. ROBINSON |
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| Director since: 2011 Age: 70 Committees: Audit (Chair), Compensation, Credit and Risk Independent: |
Mr. Robinson, age 69, is a former Executive Vice President of Washington Mutual Bank, a financial lending institution. Prior to his position with Washington Mutual, Mr. Robinson served with the Office of the Comptroller of the Currency as a Deputy Comptroller. Mr. Robinson was appointed by the Board of Directors as a director of the Company in July 2010Specific Qualifications, Attributes, Skills and was first elected by stockholders in April 2011.Experience
Public Directorships: | • Federal Home Loan Bank of San Francisco (from 2004-2005 and 2007-2008, and since 2011) | |
Prior Directorships: | • Vogogo, Inc., a Canadian based provider of verification tools for risk management and payment processing
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• Operation HOPE, anon-profit organization focusing on economic improvements for poverty-stricken people in America (2004-2013)
• Long Beach Mortgage Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006) • Long Beach Securities Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006) | ||
Other Prior Experience: | • National Outdoor Leadership School Advisory Committee (2007-2016) • Executive Vice President, Corporate Risk Management Washington Mutual Bank, a financial lending institution (2002-2008) • Deputy Comptroller, Office of the Comptroller of the Currency (1997-2002) | |
Education: | • Bachelor’s degree in Business Administration from Washington University in St. Louis • Master’s degree in Business Administration from Harvard University • Chartered Financial Analyst (CFA) | |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
| GAREN K. STAGLIN |
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Mr. Staglin | Director since: 2011 Age: 72 Committees: Compensation and Independent:✓ |
Specific Qualifications, Attributes, Skills and Experience
Public Directorships: | • Chairman, | |
Private Directorships: | • Senior Advisor and Advisory Director, FTV Capital (formerly Financial Technology Ventures) • Vice Chairman, Profit Velocity Solutions, a manufacturing analytics firm (since 2007) • Chairman, Nvoice Payments, an electronic payment service provider (since 2010) | |
Other Experience: | • Founder and President, • Founder andCo-Chairman, One Mind, | |
Prior Directorships: | • Advisory Director, Specialized Bicycle, a manufacturer of cycling equipment (1995-2014) • Chairman, Free Run Technologies, an internet and technology services company (2003-2014) • Bottomline Technologies, a provider of payment and invoice automation software and services (2007-2012) • Advisory Board, Blaze Mobile, a mobile payments company (2006-2011) •
• Global Document Solutions, a private document processing outsourcing company (2005-2010) • Other directorships completed prior to 2009 include: First Data Corporation, a payment solutions provider (1992-2003); Quick Response Services, a public retail management and supply chain services company (1991-2001); CyberCash, Inc., a public micro-payments and platform company (1996-2000); Chairman, Safelite Auto Glass, a private national auto glass provider (1993-1999) | |
Other Prior Experience: | • Founder and President, Bring Change 2 Mind, an organization devoted to removing the stigma associated with mental illness (2009-2014) | |
Education: | • Bachelor’s degree in Engineering-Electrical and Nuclear from the University of California, Los Angeles • Master’s degree in Business Administration, Finance and Systems Analysis from Stanford University Graduate School of Business | |
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| Leadership – Held a variety of leadership roles, including as Chairman of ExlService as well as other founder and president roles with variousnon-profit organizations. |
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| BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
BOARD & CORPORATE GOVERNANCE
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
We are committed to having sound corporate governance principles. These principles are important to the way in which we manage our business and to maintaining our integrity in the marketplace,marketplace. Our Corporate Governance Guidelines provide a framework for our Company with respect to corporate governance principles and are discussed in further detail inreviewed at least annually, as well as amended from time to time to continue to enhance our Corporate Governance Guidelines. (Agovernance structure. A copy of our guidelines is available atwww.svb.com under “About Us—Investor Relations—Corporate Governance.” The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.)
Board Independence and Leadership
The Board has determined that, with the exception of Mr. Becker, our President and CEO, all of our current directors and director nominees are “independent” within the meaning of the director independence standards set by NasdaqThe NASDAQ Stock Market LLC (“NASDAQ”) and the Securities Exchange Commission (the “SEC as currently in effect.”).
Additionally, our Bylaws provide that the Board shall not have more than two (2) directors who do not meet the definition of an “Outside Director.” AnFor these purposes, an Outside Director is any director who meets the independence and experience requirements of NASDAQ and the SEC, and Nasdaq Stock Market, Inc. (“Nasdaq”) and who, in the opinion of the Board, has the ability to exercise independent judgment in carrying out the responsibilities of a director of the Company. All of our current directors, except for our CEO, are considered Outside Directors.
Separate Chairperson/Chairperson and CEO Roles
The Board has determined that it is in the best interests of the Company to continue to maintain the Board chairperson and CEO positions separately. We believe that having an outside, independent director serve as chairperson is the most appropriate leadership structure for the Board at this time, as it enhances the Board’s independent oversight of management and strategic planning, reinforces the Board’s ability to exercise its independent judgment to represent stockholder interests and strengthens the objectivity and integrity of the Board. Moreover, we believe an independent chairperson can more effectively lead the Board in objectively evaluating the performance of management, including the CEO, and guide the Board through appropriate governance processes. The Board of Directors periodically reviews the Company’s leadership structure and may modify the structure, as it deems appropriate given the specific circumstances then facing the Company. | Independence and Leadership Structure
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The Board has determined that it is in the best interests of the Company to maintain the Board chairperson and CEO positions separately. It believes that having an outside, independent director serve as chairperson is the most appropriate leadership structure for the Board, as it enhances the Board’s independent oversight of management and our strategic planning, reinforces the Board’s ability to exercise its independent judgment to represent stockholder interests, and strengthens the objectivity and integrity of the Board. Moreover, an independent chairperson can more effectively lead the Board in objectively evaluating the performance of management, including the CEO, and guide it through appropriate Board governance processes.
Mr. Dunbar, our current Chairman of the Board, is independent within the meaning of the director independence standards described above. Subject to his election, Mr. Dunbar is expected to serve as the Board’s Chairman for the 2016-20172017-2018 term.
Executive Sessions
The Company’s independent directors meet in regularly scheduled executive sessions at which only independent directors are present.
Board Risk Oversight and Risk Committee
Oversight of the Company’s risk management is one of the Board’s key priorities and is carried out both by the Board as a whole, as well as by each of its various committees.
In January 2015, the The Board has formed a committee to specifically focus on the Company’s risk management. Our Risk Committee is comprised of the chairpersons of each of the Board and the Audit, Compensation, Credit, Finance and Governance Committees. The Risk Committee has the primary oversight responsibility forof the Company’s enterprise-wide risk management (“EWRM”) framework, including the oversight of risk management policies, and the monitoring of the Company’s risk profile. In addition, the Risk Committeeit is responsible for overseeing the Company’s compliance with its risk appetite statement, which sets forth the tolerance levels with respect to the amount and types of various acceptable key risks underlying the Company’s business. The Risk Committee also oversees compliance with,reviews, and recommends any changes for Board approval to, the Company’s risk appetite statement. Our other Board committees also share responsibility for the risk appetite statement by overseeing and approving applicable risk metrics, including risk limits and thresholds, for each of their relevant areas of responsibility.
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| BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
Additionally, each Board committee is engaged in overseeing the Company’s risks in itsas they relate to that committee’s respective areas of oversight. For example, the Audit Committee regularly oversees our risks relating to our accounting and financial reporting, as well as legal, information technology and security-related risks. The Compensation Committee engages in periodic risk assessments to review and evaluate our compensation programsrisks in relation to our risks.compensation programs. The Finance Committee actively oversees our capital, liquidity and financial management and the associated risks (whether as an ongoing matter or as it relates specifically to a transaction, such as an equity or debt securities offering). Our Governance Committee oversees our compliance functions and routinely reviews our compliance risks, including Bank Secrecy Act compliance. Moreover, the Credit Committee routinely oversees our management of credit risks. Each committee chairperson regularly reports back to both the Risk Committee and the full Board on its risk oversight activities. In addition, the Board routinely engages in discussions with management about the Company’s risks.
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BOARD & CORPORATE GOVERNANCE
Annual Board Evaluation
The Governance Committee of the Board, conducts, in coordination with the full Board, anconducts a periodic evaluation of the Board’s performance and effectiveness, either the Board as a whole and/or on an individual director basis. The Governance Committee develops and implements a process for such evaluation and review, which may involve outside consultants or advisers and may include a review of how certain attributes affect Board effectiveness, such as Board size, meeting frequency, quality and timing of information provided to the Board, director communication, director education, director skills and qualifications, director independence and Board strategy sessions. The results of the evaluation are discussed with the Board. The Governance Committee also leads an evaluation of the performance and effectiveness of each of the Board’s committees. All Board and committee evaluations are typically conducted on an annual basis. See “Board “Board Committees—Committee GovernanceGovernance”” below.
Board Refreshment and Succession Planning
The Board’sGovernance Committee primarily oversees the refreshment or succession planning is primarily overseen by the Governance Committee. Suchof Board membership. Succession planning takes into account the importance of balancing of the appropriate representation of experience and skills on the Board, with the importancebenefits of Board refreshment. IdentifyingIdentification of possible director candidates that possess the appropriate qualifications, and the desire to serve on a financial services public company board as well as who willand are able to complement our existing Board takes time and effort.can be a lengthy process. As such, the Governance Committee discusses recruiting strategies and actively considers potential director candidates, whether or not there is an immediate vacancy on the Board to fill. It may from time to time use outside recruiters to assist with identifying potential candidates. The Governance Committee also reports to, and discusses succession planning with, the full Board.
In 2015, the Board added one new director (Ms. Mary Miller) who brings a scope of skills, experience and perspectives to enhance the already well-rounded Board of Directors.
Oversight of CEO
Annual CEO Performance Evaluation
The independent members of the Board evaluate the performance of our CEO on an annual basis. Each year, the Governance Committee approves thea process to solicit the Board’s feedback. Our Chairman of the Board, together with the chairpersons of the Governance and Compensation Committees, then lead discussions with the Board (without the CEO present) to evaluate the CEO’s performance, both generally as well as against certain predetermined annual goals.
CEO Succession Planning
As a matter of sound governance, the Board, as a whole or through a special committee, of the Board, routinely reviews and discusses the Company’s contingency or long-term plans for CEO succession. The special committee seeksThese efforts involve seeking input from our current CEO and our Head of Human Resources, as well as external advisors, as appropriate. The special committee also reports toAny plans are reviewed and discusses any such plansdiscussed with the full Board.
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| BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
Meeting Attendance
Board and Committee Meetings
The Board held eight (8)nine (9) meetings during fiscal year 2015. For2016. (For the number of committee meetings held in 2015,2016, see “Board Committees—Committee Chairpersons/Membership, Responsibilities and Meetings” below.) Each director attended in person or via teleconference 75% or more of the total number of meetings of the Board and of the committees on which he or she served which were held during the period for which he or she was a director or committee member.2016.
Stockholder Meetings
It is the Board’s policy that each director employs his or her best efforts to attend each of our annual stockholder meetings. Eight (8) of our eleven (11) then-serving Board members attended our 20152016 Annual Meeting of Stockholders.
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BOARD & CORPORATE GOVERNANCE
Consideration of Director Nominees
Stockholder Nominees
The Governance Committee will consider Board nominees proposed by stockholders. The Governance Committee has no formal policy with regard to stockholder nominees as itand considers all nominees on their merits, as discussed below. Any stockholder nominations proposed for consideration by the Governance Committee should include the nominee’s name and qualifications for Board membership, and should be addressed to:
SVB Financial Group,
3003 Tasman Drive,
Santa Clara, California 95054,
Attn: General Counsel and Corporate Secretary,
Facsimile:(408) 969-6500969-6500.
In addition, our Bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting. For a description of the process for nominating directors in accordance with the Bylaws, please see “Stockholder Proposals and Director Nominations” below.
Board Diversity; Selection and Evaluation of Director Candidates
While the Board has not formally adopted a policy governing board diversity, it recognizes the importance of assembling a well-rounded, diverse body of directors. The Governance Committee, with the participation of the full Board, is primarily responsible for reviewing the composition of the Board and for identifying candidates for membership on the Board all in light of our ongoing requirements, itsthe committee’s assessment of the Board’s performance and any input received from stockholders or other key constituencies. The Governance Committee makes determinations as to whether to recommend directors forre-election or director candidates’ for nomination to the Board based on theirsuch individual’s skills, character, judgment and business experience, as well as theirhis or her ability to diversify and add to the Board’s existing strengths. TheOverall, the Governance Committee typically seeks an appropriate mix of individuals with diverse backgrounds and skills complementary to our business and strategic direction. In addition toPlease see the areas of director qualifications and attributes discusseddescription under “Director Qualifications” above this assessment includes consideration of areas of expertise in industries important to us (such as technology; life science/healthcare; energy and resource innovation; premium wine; and venture capital/private equity), functional expertise in areas such as banking/financial services, public companies, global markets, legal/compliance, regulatory, accounting, finance, operations, information technology and risk management, and an assessment of an individual’s abilities to work constructively with the other Board members and management.for additional information.
Communications with the Board
Individuals who wish to communicate with our Board may do so by sending ane-mail to our Board at bod@svb.com. Any communications intended fornon-management directors should be sent to thee-mail address above to the attention of the Board Chairman. Board-related communications are reviewed by the ChairmanChairperson of the Board and shared with the full Board as appropriate.
Code of Ethics
We havemaintain a Code of Ethics for the Principal Executive Officer and Senior Financial Officers (the “Code of Ethics”) that applies to our CEO, Chief Financial Officer, Chief Accounting Officer and other senior members of the Finance staff. A copy of thisthe Code of Ethics is available on our website at www.svb.com under “About Us—Investor Relations—Corporate Governance,” or can be obtained without charge by any person requesting it. (The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.) To request a copy of our Code of Ethics, please contact: Kristi Gilbaugh,Corporate Secretary, SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054, or by telephone(408) 654-7400.
We intend to disclose any waivers from, or changes to, our Code of Ethics by posting such information on our website. No waivers or substantive changes were made during fiscal year 2015.2016.
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| BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
BOARD & CORPORATE GOVERNANCE
OurWe believe our Board has created a sound committee structure designed to help the Board carry out its responsibilities in an effective and efficient manner. There are six (6) standing Board committees: Audit, Compensation, Credit, Finance, Governance and Risk.
Committee Independence and Audit Committee Financial Experts
The Board has determined that each of the current members of the Audit Committee, Compensation Committee, Credit Committee, Governance Committee and Risk Committee are “independent” under Nasdaqwithin the meaning of applicable SEC rules, NASDAQ director independence standards and other applicable regulatory requirements.requirements, to the extent applicable.
In addition, the Board has determined that each of Messrs. Robinson and Dunbar and Ms. Krishnan are “audit committee financial experts,” as defined under SEC rules, and possess “financial sophistication,” as defined under the rules of Nasdaq.NASDAQ.
Committee Governance
Committee Charters
Each committee is governed by a charter that is approved by the Board, which sets forth each committee’s purpose and responsibilities. The Board reviews the committees’ charters, and each committee reviews its own charter, on at least an annual basis, to assess the charters’ content and sufficiency, with final approval of any proposed changes required by the full Board. The charters of each committee are available on our website, www.svb.com under “About Us—Investor Relations—Corporate Governance.” (The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.)
The charters provide that each committee hashave adequate resources and authority to discharge its responsibilities, including appropriate funding for the retention of external consultants or advisers, as itthe committee deems necessary or appropriate.
Annual Committee Evaluations
The Governance Committee, in coordination with the Board, implements and develops a process to conduct an assessment ofassess committee performance and effectiveness. Typically, the assessments are conducted on an annual basis, and include a self-assessment by each committee. The review includes an evaluation of various areas that may include committee sizes,size, composition, performance, coordination among committee composition, committee performance, committee coordinationmembers and among the standing committees, and involvement with one another and committee involvement of the full Board. The results of the committee performance assessments are reviewed by each committee, as well as by the Governance Committee, and discussed with the full Board.
Committee Chairpersons/Membership, Responsibilities and Meetings
All committee chairpersons are independent and appointed annually by the Board of Directors. Each chairperson presides over committee meetings; oversees meeting agendas; serves as liaison between the committee members and the Board, as well as between committee members and management; and works actively and closely with management on all committee matters, as appropriate.
TheEach of the committees meetmeets regularly, at least on a quarterly basis. The committees, typically through their committee chairpersons, routinely report their activities to, and discuss their recommendations with, the full Board. In addition, certain committees periodically hold extended meetings dedicated to discussing key strategic matters or other business items, on a more in-depth basis, that are relevant or subject to the committee’s oversight responsibilities.responsibilities on a morein-depth basis.
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| BOARD & CORPORATE GOVERNANCE Board Committees |
BOARD & CORPORATE GOVERNANCE
The names of the members and highlights of some of the key oversight responsibilities of the committeesBoard Committees are set forth below:
Audit Committee
• Our corporate accounting and financial reporting processes and the quality and integrity of our financial statements and reports. • The qualification, independence, engagement and performance of our independent auditors. • The performance of our internal auditing function, as well as other key functions, including information technology, security, legal and regulatory matters. | John Robinson, Chair Dave Clapper Roger Dunbar Lata Krishnan
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Compensation Committee
• Our overall compensation strategies, plans, policies and programs. • The approval of executive and director compensation. • The assessment of compensation-related risks. | Kate Mitchell, Chair Jeff Maggioncalda John Robinson Garen Staglin |
Credit Committee
• The credit and lending strategies, objectives and risks of the Company and the Bank. • The credit risk management of the Company and the Bank, including reviewing internal credit policies and establishing portfolio limits. • The quality and performance of the credit portfolio of the Company and the Bank. | Dave Clapper, Chair Jeff Maggioncalda Kate Mitchell John Robinson |
Finance Committee
• The financial risk management of the Company and the Bank. • The financial strategies and objectives of the Company and the Bank, including the capital planning, capital and liquidity management, and the annual budget. • The review of the Company and Bank’s financial performance and compliance with applicable financial regulatory requirements, including stress testing. • The review of certain corporate development matters, such as strategic investments. | Joel Friedman, Chair Eric Benhamou Roger Dunbar Lata Krishnan Mary Miller |
Governance Committee
• Our general corporate governance practices, including review of our Corporate Governance Guidelines. • The annual performance evaluation process of our Board and its committees, and CEO. • The identification and nomination of director candidates. • Our regulatory compliance | Eric Benhamou, Chair Roger Dunbar Joel Friedman Garen Staglin |
Risk Committee
• The enterprise-wide risk management policies of the Company. • The operation of our enterprise-wide risk management framework. • Our compliance with the Company’s risk appetite statement. • The review of changes to our risk profile. | Roger Dunbar, Chair Eric Benhamou Dave Clapper Joel Friedman Kate Mitchell John Robinson |
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| BOARD & CORPORATE GOVERNANCE Board Committees |
BOARD & CORPORATE GOVERNANCE
REPORT OF THE AUDIT COMMITTEE OF THE BOARD
The Report of the Audit Committee of the Board shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the “Act”), or under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that we specifically incorporate the information contained in the report by reference, and shall not otherwise be deemed filed under such acts.
Our Audit Committee has prepared the following report for inclusion in this Proxy Statement. The Audit Committee is governed by a Board-adopted charter, a copy of which is available on our website at www.svb.com.www.svb.com. The charter specifies, among other things, the scope of the committee’s responsibilities and how those responsibilities are performed. All members of the Audit Committee are “independent” as defined by Nasdaq, ourNASDAQ and the requirements of the Exchange Act, and meet the applicable listing standard.heightened independence criteria under SEC rules. In addition, Messrs. Robinson and Dunbar and Ms. Krishnan meet the “audit committee financial expert” requirement as defined in RegulationS-Kunder SEC rules,the Exchange Act, and possess “financial sophistication,” as defined under the rules of Nasdaq.NASDAQ.
Responsibilities of the Audit Committee
The primary responsibility of the Audit Committee is to act on behalf of the Board in fulfilling the Board’s responsibility with respect to overseeing our accounting and reporting practices, and the quality and integrity of our financial statements and reports and our internal control over financial reporting. The committee is responsible for the appointment (or reappointment) and the compensation of our independent registered public accounting firm, as well as for the review of the qualifications, independence and performance of the registered public accounting firm engaged as our independent auditors. Specifically, in reappointing KPMG LLP as the Company’s independent registered public accounting firm for 2016, the Audit Committee considered, among other factors: KPMG’s performance on prior audits; the quality, efficiency and cost of KPMG’s services; KPMG’s knowledge of the Company’s business and the banking industry; and KPMG’s overall relationship with the Audit Committee and management. (See “Other Proxy Proposals – Principal Audit Fees and Services for more information about the Audit Committee’s oversight of KPMG’s audit and permissiblenon-audit fees.)
In addition, the Audit Committee oversees our internal auditInternal Audit function, which is responsible for reviewing and evaluating the effectiveness of our internal controls, and also overseesas well as other management functions including information technology and security. To the extent applicable, the committee also oversees the Company’s material litigation matters, regulatory enforcement actions, and other legal proceedings.
The Audit Committee meets regularly in executive session with our independent auditor and our Head of Internal Audit (both separately and together), without other members of management present.as appropriate.
Responsibilities of Management, and Independent Auditor and Internal Audit
Management has the primary responsibility forover the Company’s financial statements and the reporting process, as well as for our internal controls. Our independent registered public accounting firm, KPMG LLP, is responsible for expressing an opinion on the conformity of our audited financial statements with U.S. generally accepted accounting principles, as well as an opinion on the effectiveness of our internal control over financial reporting in accordance with the requirements promulgated by the Public Company Accounting Oversight Board (the “PCAOB”). KPMG LLP has served as our independent auditor since 1994.
Our Head of Internal Audit reports directly to the Audit Committee (and administratively to the CEO). Under his direction, our Internal Audit function is responsible for preparing an annual audit plan and conducting internal audits intended to evaluate the Company’s internal control structure and compliance with applicable regulatory requirements.
Financial Reporting for 20152016
The Audit Committee has reviewed and discussed with management its assessment and report on the effectiveness of our internal control over financial reporting as of December 31, 2015,2016, which it made using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control – Integrated Framework (2013).” The committee also has reviewed and discussed with KPMG LLP its review and report on our internal control over financial reporting.
Moreover, the Audit Committee has reviewed and discussed with management and the independent auditors the audited consolidated financial statements as of and for the year ended December 31, 2015. The Audit Committee discussed with the independent auditors the matters required to be discussed by PCAOB Auditing Standard No. 16,Communications with Audit Committees. In addition, the Audit Committee received from the independent auditors the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, including Rule 3526,Communication with Audit Committees Concerning Independence, and has discussed with the independent auditors the auditors’ independence from us and our management.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, for filing with the SEC.
This report is included herein at the direction of the members of the Audit Committee.
AUDIT COMMITTEE
John Robinson (Chair)
David Clapper
Roger Dunbar
Lata Krishnan
Kate Mitchell
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| BOARD & CORPORATE GOVERNANCE Audit Committee Report |
BOARD & CORPORATE GOVERNANCE
This Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Act or the Exchange Act, except to the extent that we specifically incorporate the information contained in the report by reference, and shall not otherwise be deemed filed under such acts.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based on this review and these discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the year ended December 31, 2015 and this Proxy Statement.
This report is included herein at the direction of the members of the Compensation Committee.
COMPENSATION COMMITTEE
Kate Mitchell (Chair)
Jeff Maggioncalda
John Robinson
Garen Staglin
(Report of the Audit Committee of the Board continued) Moreover, the Audit Committee has reviewed and discussed with management and the independent auditors the audited consolidated financial statements as of and for the year ended December 31, 2016. The Audit Committee discussed with the independent auditor the matters required to be discussed by PCAOB Auditing Standard No. 1301,Communications with Audit Committees. In addition, the Audit Committee received from the independent auditors the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, including Rule 3526,Communication with Audit Committees Concerning Independence, and has discussed with the independent auditor the auditor’s independence from us and our management. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report onForm 10-K for the fiscal year ended December 31, 2016, for filing with the SEC. This report is included herein at the direction of the members of the Audit Committee. AUDIT COMMITTEE | ||||||||||||
John Robinson (Chair) | David Clapper | Roger Dunbar | Lata Krishnan | Mary Miller |
This Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Act or the Exchange Act, except to the extent that we specifically incorporate the information contained in the report by reference, and shall not otherwise be deemed filed under such acts. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based on this review and these discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report onForm 10-K for the year ended December 31, 2016 and this Proxy Statement. This report is included herein at the direction of the members of the Compensation Committee. COMPENSATION COMMITTEE | ||||||||||||
Kate Mitchell (Chair) | Jeff Maggioncalda | John Robinson | Garen Staglin |
Compensation Committee Interlocks and Insider Participation
During 2015,2016, the Compensation Committee or the 162(m) Committee performed all compensationexecutive compensation-related functions of the Board, except for the approval of CEO compensation, which was approved by the independent members of the Board based on the Compensation Committee’s recommendation. (SeeSee discussion above under“Board Committees – Committee Chairpersons/Membership, Responsibilities and Meetings”for additional information on the Compensation Committee.) Mr. Becker does not participate in any of the Board or Compensation Committee discussions related to the evaluation of his performance or the recommendation/recommendation or determination of his compensation. See descriptions of related transactions between us and each of the members of the Compensation Committee, if any, under “Certain Relationships and Related Transactions” below. See also “Compensation Discussion and Analysis – Executive Benefits and Other Executive Compensation-Related Matters – Section 162(m)” for a description of the composition of the 162(m) Committee.
None of the members of the Compensation Committee has ever been one of our officers or employees and none of our executive officers serves, or in the past fiscal year served, as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving on our Board.
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| BOARD & CORPORATE GOVERNANCE Compensation Committee Report |
BOARD & CORPORATE GOVERNANCE
The following table sets forth the amounts earned or paid to eachnon-employee member of our Board of Directors during the year ended December 31, 2015.2016.
Overview
Overview
Our compensation for our non-employee
The Compensation Committee oversees
Our CEO, the only employee director on | Name | Fees Earned or Paid in Cash | Stock Awards ($) (1) | Total | ||||||||||
Roger F. Dunbar | $ | 192,500 | $ | 200,007 | $ | 392,507 | ||||||||
Eric A. Benhamou | 83,250 | 100,004 | 183,254 | |||||||||||
David M. Clapper | 86,250 | 100,004 | 186,254 | |||||||||||
Joel P. Friedman | 84,000 | 100,004 | 184,004 | |||||||||||
C. Richard Kramlich (2) | 67,500 | 100,004 | 167,504 | |||||||||||
Lata Krishnan | 71,500 | 100,004 | 171,504 | |||||||||||
Jeffrey N. Maggioncalda | 70,750 | 100,004 | 170,754 | |||||||||||
Mary J. Miller (3) | 51,750 | 100,004 | 151,754 | |||||||||||
Kate D. Mitchell | 94,000 | 100,004 | 194,004 | |||||||||||
John F. Robinson | 112,250 | 100,004 | 212,254 | |||||||||||
Garen K. Staglin | 65,250 | 100,004 | 165,254 | |||||||||||
(1) Values indicated for annual director equity grants reflect the fair value of awards made during the fiscal year for the 2015-2016 term. Such values were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. The actual value realized is subject to our stock price performance on the date of release. (2) Mr. Kramlich retired from the Board of Directors effective as of December 31, 2015 and transitioned to an advisory director position. (3) Ms. Miller joined the Board of Directors as of May 12, 2015.
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Our compensation for ournon-employee
The Compensation Committee oversees and
Our CEO, the only employee director on the | Name | Fees Earned or Paid in Cash | Stock Awards ($) (1) | Total | ||||||||||
Roger F. Dunbar | $ | 217,000 | | $ | 200,093 | $ | 417,093 | |||||||
Eric A. Benhamou | | 98,250 | | 100,046 | 198,296 | |||||||||
David M. Clapper | 113,000 | 100,046 | 213,046 | |||||||||||
Joel P. Friedman | 94,500 | 100,046 | 194,546 | |||||||||||
Lata Krishnan | 95,250 | 100,046 | 195,296 | |||||||||||
Jeffrey N. Maggioncalda | 84,000 | 100,046 | 184,046 | |||||||||||
Mary J. Miller | 82,500 | 100,046 | 182,546 | |||||||||||
Kate D. Mitchell | 113,250 | 100,046 | 213,296 | |||||||||||
John F. Robinson | 135,000 | 100,046 | 235,046 | |||||||||||
Garen K. Staglin | 79,500 | 100,046 | 179,546 | |||||||||||
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(1) Values indicated for annual director equity awards reflect the fair value of restricted stock units granted during the fiscal year. Such values were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718. The actual value realized is subject to our stock price performance on the date of settlement.
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Elements of Director Compensation
Compensation for our non-employee directors reflects a combination of cash (annual retainer fees and committee meeting fees) and equity (annual restricted stock unit awards). Consistent with 2014,In April 2016, the componentsCompensation Committee eliminated meeting fees for meetings of our the full Board, and increased the annualnon-employee director compensation for 2015 were as follows:retainer from $35,000 to $60,000.
Annual Director Retainer Fee | $ | |||
Annual Chairperson Fee | $90,000, Board Chair $20,000, Audit Committee Chair $15,000, Compensation Committee and Risk Committee Chairs $12,000, | |||
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Committee Meeting Fees | $2,500(in-person)/$1,250 (telephonic), Audit Committee $1,500(in-person)/$750 (telephonic), all other committees $5,000 per day, for $3,000 per day, for | |||
Annual Equity Retainer Award |
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The members of the Board are also eligible for reimbursement for their reasonable expenses incurred in connection with attendance at meetings or the performance of their director duties in accordance with Company policy.
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BOARD & CORPORATE GOVERNANCE
Director Equity Compensation; Deferral Elections
Our annual equity retainer awards are typically granted to directors in the form of restricted stock units. The awards are approved by the Compensation Committee and typically granted approximately one month after the annual meeting of stockholders (typically the following month), andstockholders. The awards typically vest in full upon the completion of the annual director term on the date of the next annual meeting. In 2015,2016, the directors were granted an aggregate of 8,84410,835 restricted stock units with a scheduled vesting date of April 21, 2016.the upcoming Annual Meeting.
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| BOARD & CORPORATE GOVERNANCE Director Compensation |
Non-employee directors may elect an irrevocable deferral of the receiptsettlement of restricted stock unit awards until the earliest of: (a)(i) a specific future settlement date that meets the requirements of Section 409A of the Internal Revenue Code 409A, (b)of 1986, as amended, (ii) separation from service, (c)(iii) the date of a change in control, (d)(iv) death or (e)(v) the date of disability. Elections will apply to restricted stock unit awards received during 2015. Ms.2016. Mses. Krishnan and Ms. Mitchell elected to defer the receiptsettlement of their 20152016 equity grants of 737985 restricted stock units each.
Equity Plan Limits Applicable to Directors
Equity grants to directors are subject to the terms of our 2006 Equity Incentive Plan, as amended (the “2006 Equity Incentive Plan”) including the following limitations (as provided under the plan):
Nonon-employee director may be granted, in any fiscal year, awards covering shares having an initial value greater than $500,000.
Annual director grants of full value equity awards may become fully vested no earlier than the last day of the director’s then current annual term of service, subject to certain limited exceptions as provided under the plan.
Determination of Director Compensation
Each year, the Compensation Committee, together with its independent compensation consultant, conducts a comprehensive review of director compensation, taking into consideration our overall compensation philosophy, as well as competitive compensation data from the Company’s 20152016 Peer Group and other relevant and comparable market data and trends. The committee routinely reviews each of the various pay components, the form and amount of payment, as well as the cash/equity compensation mix. Based on such review and any recommendations from its independent compensation consultant, the Compensation Committee willmay make changes to director compensation to the extent it deems appropriate.
Director Equity Ownership Guidelines
Under the current equity ownership guidelines for ournon-employee directors, eachnon-employee member of the Board of Directors is expected to hold, within five years of becoming a director, shares of our Common Stock that have a minimum value equivalent to 600% of his or her annual retainer fee.
The Compensation Committee is responsible for setting and periodically reviewing the equity ownership guidelines. Equity ownership requirements for directors are established based upon a competitive review and subsequent recommendations by the committee’s independent compensation consultant. The Governance Committee is responsible for overseeing director compliance with these guidelines, and reviews directors’ holdings on a quarterly basis. Any exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.
As of December 31, 2015,2016, allnon-employee directors were in compliance withhad attained the applicable ownership guidelines.requirements or otherwise remained on target to meet such requirements within the established compliance time frame.
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| BOARD & CORPORATE GOVERNANCE Director Compensation |
BOARD & CORPORATE GOVERNANCE
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions Policy
Our policy on related party transactions (“Related Party Policy”) governs the transactions involving us and certain related persons that are required to be disclosed under Item 404 of SEC RegulationS-K (“S-K 404”). We regularly monitor our business dealings and those of our directors and executive officers, as appropriate, to determine whether any such dealings would constitute a related party transaction under the Related Party Policy. Generally, under the policy, any transaction, arrangement or relationship will be considered an interested transaction subject to the review and/or approval of the Audit Committee, if: (i) we are a participant in the transaction; (ii) the aggregate transaction amount involved will or may be expected to exceed $120,000 in any calendar year; and (iii) a related person or party has or will have a direct or indirect material interest in the transaction. (Transactions not required to be disclosed under S-K 404 are excluded from this policy.) Moreover, any of theThe following persons isare considered a related person“Related Parties” under the Related Party Policy: (i) any director or executive officer of the Company; (ii) any nominee for director of the Company; (iii) any holder of more than 5% of our Common Stock; and (iv) any immediate family member of any of the above.
We have implemented a framework to help identify potential related party transactions, which may include from time to time, loan transactions by the Company or the Bank, investment transactions, compensation arrangements, or other business transactions involving us or our subsidiaries. Under this framework, we have processes in place that are designed to identify, review and escalate, as appropriate, proposed transactions involving a potential party related to the Company. In addition, employeesRelated Party. Employees are also expected to escalate any transaction involving potential conflicts of interests pursuant to our Code of Conduct.
The Audit Committee has primary responsibility for reviewing these transactions for potential conflicts of interests and approving them (or denying approval, as the case may be). Under the Related Party Policy, the Audit Committee’s approval may be granted in advance, ratified or based on certain standing approvals previously authorized by resolution. The Audit Committee may delegate its approval authority under the Related Party Policy to the committee chairperson. Additionally, the Credit Committee reviews and approves certain related party loan transactions as described below, and the Governance Committee takes into consideration related party transactions involving our directors as part of its annual director independence review.
Insider Loan Policy
We also have in place a policy whichthat permits the Bank to make loans (“Insider Loans”) to directors, executive officers and principal stockholders of the Bank or its affiliates (“Insiders”) and the related interests of those Insiders (“Insider LoansInsiders”), pursuant to the applicable requirements of Regulation O of the Federal Reserve Act (“Regulation O”). Moreover, Insider Loans qualify for an exemption from Section 402 of the Sarbanes-Oxley Act of 2002, as they are made by the Bank and subject to Regulation O.
Pursuant to Regulation O, theour Insider Loan policy authorizes the Bank to make Insider Loans if such Insider Loans: (a)(i) are approved in advance by a majority of the Board of Directors of the Bank, for Insider Loans whereif the aggregate amount of all outstanding extensions of credit to the Insider and to all related interests of the Insider exceeds $500,000; (b)(ii) are extended under substantially the same terms and conditions and rates as those prevailing at the time of the Insider Loan for comparable transactions withnon-Insider Bank clients; and (c)(iii) do not have more than a normal risk of failure of repayment to the Bank or other unfavorable features. The Insider whose credit extension is subject to Board approval mustmay not participate either directly or indirectly in the voting to approve such extension of credit.
Related Party Transactions
Ordinary Course Loan Transactions
During 2015,Except as described below, during 2016 the Bank made loans to related parties,Related Parties, including certain companies in which certain of our directors or their affiliated venture funds are beneficial owners of ten percent10% or more of the equity securities of such companies. Such loans: (a)(i) were made in the ordinary course of business; (b)(ii) were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons; and (c)(iii) did not involve more than the normal risk of collectability or present other unfavorable features.
Prior to their respective appointments as executive officers, each of John China and Philip Cox received a mortgage loan through the Bank’s
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| BOARD & CORPORATE GOVERNANCE Related Transactions |
Employee Matters
SVB also maintains an Employee Home Ownership Program (“EHOP”), an employeea benefit program wherebythat allows eligiblenon-executive employees of the Bank and its affiliates to receive preferential terms on mortgage loans.loans at preferred rates. Generally, executive officers may not participate in the EHOP unless they have received a loan prior to their appointment as executive officers, as was the case for Messrs. John China and Phil Cox. In March 2009, Mr. China’sChina received an EHOP mortgage loan in the amount was $1,176,000, with a principal balance of $1,014,689approximately $1.2 million, which became due as of December 31, 2015. Mr. China’s loan matures April 1, 2016. The loan was fully repaid on April 8, 2016. No late fees or other penalties were incurred pursuant to the terms of the loan. In September 2011, Mr. Cox’sCox received an EHOP mortgage loanin the amount was $310,553, with a principal balance of $262,918 as of December 31, 2015. Mr. Cox’s loanapproximately $311,000, which matures in October 1, 2018.
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BOARD & CORPORATE GOVERNANCE
Employee Funds
In 2015, we formed Qualified Investors Fund IV, LLC (“QIF IV”), a $5.3 million employee-funded investment fund. Participating employees must meet certain eligibility requirements pursuant to applicable regulatory requirements. QIF IV invests employees’ own capital in funds, including certain SVB Capital funds. We do not charge a management fee on QIF IV, but pass on the cost of external expenses to the QIF IV participants. The following executive officers each made a commitment to QIF IV in commitment amounts ranging from $50 thousand to $250 thousand: Greg Becker, John China, Philip Cox, Michael Descheneaux, Michelle Draper, Joan Parsons, Bruce Wallace and Michael Zuckert.
Other Arrangements
Total compensation for 2015 for2016, Mr. Jon Wolter, a vice presidentvice-president of the BankSVB and theson-in-law of Ms. Joan Parsons, also received a mortgage loan through our EHOP in the amount of approximately $1.2 million, which matures in December 2023. In addition, Mr. Wolter‘s total compensation for 2016 was approximately $144,000$189,100 (including his base salary, bonuses, company contributions to his 401(k)/ESOP account, but excluding other normal benefits provided to all employees). His compensation is in accordance with our standard employment and compensation practices applicable to employees with equivalentsimilar qualifications and responsibilities as those holding similar positions.responsibilities. Ms. Parsons hasdoes not participate in matters related to Mr. Wolter’s employment or compensation.
We also maintain a series of employee-funded investment funds known as Qualified Investors Funds (“QIFs”), which invest employees’ own capital in certain funds, including certain SVB Capital funds. We pass on the cost of external expenses to the QIF participants and do not charge a management fee. Participating employees must meet certain eligibility qualifications pursuant to applicable regulatory requirements. Messrs. Becker, Cadieux, China, Cox, Descheneaux, Wallace and Zuckert and Mdmes. Draper and Parsons have each made commitments to QIFs in commitment amounts ranging from $50,000 to $250,000.
Vendor Arrangements
In 2016, we also entered into an engagement with BlackRock Financial Management, Inc. to perform certain independent compliance testing services related to the effectiveness of the Company’s Volcker Rule compliance program, for a fee of approximately $150,000. In addition, we engaged The Vanguard Group as the record-keeper and trustee of our 401(k) and Employee Stock Ownership Plan, as well as the record-keeper of our Deferred Compensation Plan. Our transition to Vanguard became effective in January 2017, and as such, no management oversight responsibility over Mr. Wolter, norfees were incurred in connection with these arrangements during the 2016 fiscal year. Each of BlackRock, Inc. and The Vanguard Group, together with their respective affiliates, is she involved with any decisions concerning his compensation.a greater than 5% owner of our outstanding voting securities.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe, based on a review of Forms 3, 4 and 5 and amendments thereto filed with the SEC and other information known to us, that during fiscal year 20152016 our directors, officers (as defined in the rules under Section 16 of the Exchange Act), and any greater than 10% stockholders have complied with all Section 16(a) filing requirements in a timely manner; except for one late report relating to the disposition of shares held in the 401(k) account of our executive officer, Marc Verissimo, in November 2015 due to an inadvertent administrative error.manner.
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| BOARD & CORPORATE GOVERNANCE Section 16(a) Compliance |
BOARD & CORPORATE GOVERNANCE
EXECUTIVE OFFICERS AND COMPENSATION
INFORMATION ON EXECUTIVE OFFICERS
Our executive officers perform policy-making functions for us within the meaning of applicable SEC rules. They may also serve as officers of the Bank and/or our other subsidiaries. There are no family relationships among our directors or executive officers.
The following information outlines the name and age of each of our executive officers, (asas of the date of this Proxy Statement)Statement, and his or her principal occupation with the Company, followed by biographical information of each such executive officer:
Name | Age | Principal Occupation | ||||
Greg W. Becker | President and Chief Executive Officer | |||||
Marc C. Cadieux | Chief Credit Officer | |||||
John D. China | Head of | |||||
Philip C. Cox | Head EMEA and President of the UK Branch | |||||
Michael R. Descheneaux (1) | Chief Financial Officer | |||||
Michelle A. Draper | Chief Marketing Officer | |||||
Michael L. Dreyer | Chief Operations Officer | |||||
Christopher D. Edmonds-Waters | Head of Human Resources | |||||
Laura Izurieta | 56 | Chief Risk Officer | ||||
Roger E. Leone | Chief Information | |||||
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Bruce E. Wallace | Chief Digital Officer | |||||
Michael S. Zuckert | General Counsel | |||||
| (1) | In January 2017, the Company announced that Mr. Descheneaux was appointed as the President of Silicon Valley Bank, where he will oversee the Company’s global commercial bank, private bank and funds management businesses, as well as credit administration and business analytics. Mr. Descheneaux’s appointment is expected to become effective upon the appointment of a new chief financial officer, and until such time, he will continue to serve as the Company’s Chief Financial Officer. |
Executive Biographies
| EXECUTIVE BIOGRAPHIES |
Greg W. Becker’sbiography can be found under “Proposal No. 1—Election of Directors” above.
Marc C. Cadieuxjoined us in 1992 as an Assistant Vice President, and has held a variety of positions of increasing responsibility in the areas of credit administration, business development and relationship management during his tenure with us, includingthe Company. Mr. Cadieux was previously the Division Risk Manager for the Company’sSVB’s Eastern Division, where he was responsible for overseeing our commercial lending activities in the eastern United States, Canada, the United Kingdom and Israel. Mr. Cadieux was appointed as Assistant Chief Credit Officer in 2009 and was later appointed as Chief Credit Officer in 2013, where he currently oversees our credit administration function. Prior to joining the Company, Mr. Cadieux held several credit-related positions with Pacific Western Bank and Bank of New England. Mr. Cadieux holds a Bachelor’s degree in Economics from Colby College.
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EXECUTIVE OFFICERS & COMPENSATION
John D. China joined us in 1996 as Senior Relationship Manager and has since held a variety of positions with the Company, including Head of Venture Capital Group and Head of Private Equity Group. Mr. China was appointed as the Head of Relationship Management in 2010. In2010, and in 2014, Mr. China was appointedas the Head of Relationship Banking (currently Head of Technology Banking), where he focuses on our core technology banking clients. Mr. China is responsible for overseeing all aspectsa member of our relationships within the venture capitaladvisory board of DEMO, and private equity, private bank and commercial bank communities.
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Advisory Board Member, DEMO, an organization dedicated to emerging technology development (since 2010)
Director, Astia.org,serves on the boards of ASTIA, a not-for-profitnon-profit organization dedicated to the success ofwomen-led, high-growth ventures, (since 2009)
Advisory Council, Advancing Scienceand the California Israel Chamber of Commerce. Mr. China holds a Bachelor’s degree in America, a non-profit organization dedicated to advancing science and technology in the United States (since 2013)Industrial Engineering from Stanford University.
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Philip C. Cox joined us in 2009 as Head of UK, Europe & Israel, where he was responsible for the overall strategic direction of the Company in the UK, Europe and Israel, as well as the establishment of our UK Branch banking business. HeMr. Cox was appointed as Head of Europe, Middle East and Africa (“EMEA”) and President of the UK Branch in 2012, where he is focused on the international development of our business and is responsible for our UK branch. Prior to joining the Company, Mr. Cox was Head of Commercial Banking at the Bank of Scotland in London, a division of Lloyds Banking Group (2008-2009) and the Chief Executive Officer of Torex Retail PLC (2005-2008). Prior to that, Mr. Cox spent approximately 23 years with NatWest/RBS Group and held a variety of positions, including Managing Director of Transport and Infrastructure Finance, Regional Managing Director of the North of England Region and the same position for the South West and Wales business. Mr. Cox is a member of the Chartered Institute of Bankers (UK) and the Association of Corporate Treasurers (UK).
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Michael R. Descheneaux joined us in 2006 as Managing Director of Accounting and Financial Reporting, and was appointed as Chief Financial Officer in 2007, where he is responsible for all our finance, treasury, accounting and legal functions, as well as our funds management business. He also playsPrior to joining the Company, Mr. Descheneaux was a key role in our global strategymanaging director of Navigant Consulting (2004-2006) and growth.
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Directorships:
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Variousheld various leadership positions with Arthur Andersen for the Central and Eastern Europe Region (1995-2002)
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Technical expert on U.S. GAAP and generally accepted auditing standards matters
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Certified. Mr. Descheneaux holds a Bachelor’s degree in Business Administration from Texas A&M University. He is also a certified public accountant
Member of licensed by the Texas State Board of Public Accountancy and the American Institute of Certified Public Accountants
Accountancy.
25
EXECUTIVE OFFICERS & COMPENSATION
Michelle A. Draper joined us in 2013 as Chief Marketing Officer, where sheand is responsible for the strategy and execution of our global marketing initiatives. Prior to joining us, she wasMs. Draper held various senior-level marketing positions at Charles Schwab & Co. from 1992-2013, including as Senior Vice President of Institutional Services Marketing, atwhere she oversaw advertising, brand management and other key marketing strategies. Prior to that, Ms. Draper also served as a director of Investor Services Segment Marketing and Vice President of Advisor Services Marketing Programs, developing marketing strategies for both the retail and institutional sides of the Charles Schwab & Co.
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business. Ms. Draper holds a Bachelor’s degree in Journalism from California Polytechnic State University – San Luis Obispo, as well as Series 7 General Securities Representative and Series 24 General Securities Principal Licenses
licenses.
Michael L. Dreyer joined us in 2015 as Chief Operations Officer, where he is responsible for the Company’s global technology and infrastructure functions. Most recently, he served as the Chief Operations Officer and President of the Americas for Monitise, where he was responsible for the design, build and operations of itsMonitise’s technology globally, as well as its Americas business (2014-2015). Prior to that, Mr. Dreyer was the Chief Information Officer at Visa Inc., where he was responsible for company’s systems and the company’s Americas business.
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Various senior-level positions at American Express, (1995-1998)
Various senior-level positions at Prime Financial, Inc. (1992-1995)
Various senior-level positions at, the Federal Deposit Insurance Corporation (FDIC) (1990-1992)
Various senior-level positions atand Bank of America (1989-1990)
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America. He has been on the board of directors of Finisar Corporation (FNSR: NASDAQ) since 2015, and F5 Networks Inc. (FFIV: NASDAQ), since 2012. Mr. Dreyer holds a Bachelor’s degree in Psychology and a Master’s degree in Business Administration from Washington State UniversityUniversity.
Christopher D. Edmonds-Waters joined us in 2003 as Director of Organization Effectiveness, and in 2007, was appointed to his current role as Head of Human Resources, where he oversees our human resources function, which includes our compensation, global mobility, recruiting and learning and development functions. Prior to joining the Company, Mr. Edmonds-Waters held various senior-level human resources positions at Charles Schwab & Co. from 1996-2003, and began his career at Macy’s California where he held various merchandising as well human resources roles. Mr. Edmonds-Waters holds a Bachelor’s in Intercultural Communications from Arizona State University and a Master’s in Human Resources and Organization Development from the University of San Francisco.
Laura Izurietajoined us in August 2016 as Chief Risk Officer, and is responsible for leading our enterprise-wide risk management, corporate compliance and regulatory functions. Prior to joining the Company, Ms. Izurieta held various roles of increasing responsibility at Capital One (2000-2016). Most recently, Ms. Izurieta served as the Executive Vice President and Chief Risk Officer, Retail and Direct Bank at Capital One. Prior to that, she held various senior-level roles at Capital One, including Senior Vice President of Enterprise Risk Management, Vice President of Corporate Reputation and Governance, Vice President of Capital One Home Loans and Vice President of Information Technology. Prior to her tenure at Capital One, Ms. Izurieta also held positions at Freddie Mac and Bank of America. Ms. Izurieta holds a Bachelor’s degree in Business Administration from Towson University and a Master’s degree in Applied Behavioral Science from John Hopkins School of Business.
25
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| EXECUTIVE OFFICERS & |
Various leadership roles with Macy’s California, managing corporate training programsCOMPENSATION
Information on Executive Officers
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Roger E. Leone joined us in 2015 as Head of IT Infrastructure Engineering and Operations, and in September 2015, was appointed to his current role as Chief Information Officer, where he oversees our information technology functions. Prior to joining us, he served in a wide range of technology positions, including within the financial services industry.as an independent consultant from (2011-2014) and Vice President, Global IT Services at Yahoo! (2010-2011). Prior to joining us, hethat, Mr. Leone held seniorvarious senior-level IT leadership rolespositions at Pfizer (1996-2010), including as Vice President of Americas Regional Shared Services, where he managed a team of over 400 IT professionals supporting over 26,000 clients in the Americas.
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Vice President Global IT Services at Yahoo! (2010-2011)
Various senior-level positions Prior to his time at Pfizer, (1996-2010)
Various senior-level positions atMr. Leone spent approximately 20 years with Bank of America (1976-1996)
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Other:in a variety of IT positions. Mr. Leone holds a Bachelor’s degree in Mathematics from Utica College of Syracuse University.
26
EXECUTIVE OFFICERS & COMPENSATION
Joan S. Parsons joined us in 1994 and has served in a variety of leadership positions throughout the Company, including Eastern Division Manager and Chief Banking Officer. Ms. Parsons was appointed Head of U.S. Banking in 2008, and was appointed Head of Specialty Banking in 2014, where she is responsible for all specialty debt products; sponsor finance, mezzanine finance, life science and healthcare, and energy and resource innovation banking practices; loan syndications, SVB Investment Services and SVB Analytics.
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Director, Planstrong Investment Management (since 2005)
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Banking Officer, Mellon Bank (1981-1983)
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Marc J. Verissimo joined us in 1993 and has served in a variety of leadership positions throughout the Company, including Manager of our Corporate Finance Group and our Risk Management Group. Mr. Verissimo was named Chief Strategy Officer in 2002. He is currently the Chief Risk Officer, where he is responsible for overseeing our credit, enterprise-wide risk management, corporate compliance and security functions.
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High Street Partners, Inc., a cross-border finance and administrative services firm (2009-2010)
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Bruce E. Wallace joined us in 2008 as Head of Global Services, where he was responsible for our operations, product management, global transaction banking and service delivery. He was later appointed Chief Operations Officer in 2011, where he was responsible for leading all bank andnon-bank operations and information technology services, and inservices. In 2015, Mr. Wallace was appointed to his current role as Chief Digital Officer, where he is responsible for the Company’s digital banking functions and the Company’sfee-based product businesses.
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Various senior management positions in banking operations with Wells Fargo & Company, (1987-2005)
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most recently as Senior Vice President and Manager of Treasury Management Operations (2005-2008). Mr. Wallace holds a Bachelor’s degree in Accounting from California State University, Sacramento.
27
EXECUTIVE OFFICERS & COMPENSATION
Michael S. Zuckert joined us in 2014 as General Counsel where heand is responsible for all our legal matters. Prior to joining us, he served in a wide range of legal positions within the financial services industry. Most recently, he served as Deputy General Counsel of Citigroup from 2009-2014,(2009-2014), where he served as general counsel for its the company’snon-core assets business, Citi Holdings, and also focused on mergers and acquisitions.
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Law Foundation of Silicon Valley, a non-profit organization providing free legal services Prior to Silicon Valley individuals in need (since 2015)
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his time at Citigroup, Mr. Zuckert held various senior-level positions at Morgan Stanley & Co. Inc., and was Vice President and General Counsel at TheStreet.com, Inc., an online financial news provider (1999-2000)provider. Mr. Zuckert has also been a director of the Law Foundation of Silicon Valley since 2015 and a member of the leadership counsel of Tech:NYC since 2017. He holds Bachelor’s degrees in History and Law and Society from Brown University and a Juris Doctor from New York University School of Law.
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| EXECUTIVE OFFICERS & COMPENSATION Information on Executive Officers |
EXECUTIVE OFFICERS & COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) discusses our 20152016 executive compensation program, as it relates to our five “named executive officers” listed below.
CD&A – EXECUTIVE SUMMARY |
Message from the Compensation Committee… The Compensation Committee of the Board of Directors has primary oversight over the design and execution of the Company’s executive compensation program. While we did not make any material changes to the design of our 2016 executive compensation program — consistent with prior years, we continued to focus on: • Setting challenging performance metrics aligned with our strategic business and growth objectives, as well as stockholder interests; • Establishing a compensation framework that incents consistent and sustainable long-term performance, but without encouraging undue risk-taking; and • Determining compensation based on an appropriate balance of formulaic considerations, as well as Compensation Committee judgment. Despite a year of continued low interest rates, increasing regulatory complexities and strong competition, we believe the compensation paid to our executives for 2016 was commensurate with the strong performance delivered on both an individual and Company basis. (For a summary of our 2016 financial and business highlights, please see the “Summary Performance and Proxy Information” section at the beginning of this Proxy Statement.) The compensation framework we have established continues to be focused on our long-term global growth and we look forward to our continued execution against our strategic objectives in 2017. | NAMED EXECUTIVE OFFICERS (“NEOs”)
Greg Becker President and CEO
Chief Financial Officer
Chief Credit Officer John China Head of Banking
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(
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| John Robinson | Garen Staglin | |||||||
PRIMARY EXECUTIVE COMPENSATION ELEMENTSFOR 2015 - SUMMARY
| PRIMARY EXECUTIVE COMPENSATION ELEMENTSFOR 2016 - SUMMARY |
| Base Salary | Incentive Compensation Plan (ICP) | Performance-Based Restricted
| Stock Options | Restricted Stock Units (RSUs) | ||||||||
| Form of Compensation |
-------------------- Cash --------------------
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------------------------------- Equity-------------------------------
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---- Fixed ----
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-------------------------- Performance-Based -----------------------
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-----Fixed^-----
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| Performance Timing | --------- Short-Term Emphasis ---------
| ----------------------- Long-Term Emphasis -----------------------
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| Measurement Period | Ongoing
| 1 Year
| 3 Years
| 4 Year Vesting
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| Key Performance Metrics | --- |
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Relative Selected Fee Income
| Stock Price Appreciation
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Determination ofPerformance-Based Payouts | --- | Formulaic + Discretion | Formulaic + Negative Discretion | ---
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| * | On January 26, 2017, we announced plans to appoint Mr. Descheneaux as the President of Silicon Valley Bank, to become effective upon the hiring of a new Chief Financial Officer (a search for which is currently underway). |
| ** | As of February 6, 2017, Ms. Parsons transitioned from her former role as Head of Specialty Banking to thenon-executive role of Credit Risk Manager, focusing on the Company’s global banking activities. |
| ^ | Any incremental value realized above the grant value of time-based RSUs, as well as PRSUs, is based on stock price appreciation. |
ROE – Return on |
29
EXECUTIVE OFFICERS & COMPENSATION
2015 EXECUTIVE COMPENSATIONAND OTHER HIGHLIGHTS
27
|
Compensation Discussion & Analysis |
| 2016 CEO COMPENSATIONAND OTHER HIGHLIGHTS |
| CEO PAY ALIGNMENTWITH COMPANY PERFORMANCE |
The Compensation Committee takes into consideration a variety of factors in determining actual CEO compensation. For illustrative purposes, the graphs above show the general • Diluted Earnings per Common Share (“EPS”) and Net Income ¡ The metrics are also taken into consideration, in particular, for the determination of the CEO’s ICP award. ¡ Net income includes • Relative Return on Equity (“ROE”) Performance |
PAY (COMPETITIVEWITH |
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(Compared to
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Performance-Based: • ICP • PRSUs • Stock Options |
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Short-Term Pay: • Base Salary • ICP Long-Term Pay: • PRSUs • RSUs • Stock Options |
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CEO Target Pay Mix
MANAGEMENT
| 81%OF CEO TARGET PAYIS AT-RISK. |
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| EQUITY STEWARDSHIP |
In 2016, we maintained an annual equity burn rate of
We continue to stay below our long-standing commitment to keep our annual equity |
28
| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
30
EXECUTIVE OFFICERS & COMPENSATION
EXECUTIVE COMPENSATION GOVERNANCE AND PRACTICES
| EXECUTIVE COMPENSATIONAND PRACTICES |
| COMPENSATION OVERSIGHTAND GOVERNANCE |
• | Independent Board oversight of | |
• | Independent committee oversight ofnon-CEO executive compensation. Our Compensation Committee (comprised of all independent directors) | |
• | Independent compensation consultant to the Compensation Committee. The Compensation Committee’s independent compensation consulting firm does not provide any other services to the Company. | |
•
| Active Compensation Committee engagement. In | |
| FOCUSON STOCKHOLDER INTERESTS |
| • | ||||
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• Robust executive equity ownership guidelines. Our executives are subject to robust equity ownership guidelines, which are regularly reviewed. In • Active stockholder engagement. In addition to our active investor outreach activities throughout the year, as part of • Focus on stockholder return. Our performance metrics for our executives’ PRSUs and the funding of our ICP include our relative TSR performance and the Company’s relative ROE performance, respectively, which in both cases include performance as measured against our peers. | SAYON PAY FREQUENCY We are conducting our “Say on Pay” frequency vote this year, and similar to 2011, the Board has recommended that stockholders vote in favor of an annual frequency. (See Proposal No. 4
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| COMPENSATION RISK MITIGATIONAND MANAGEMENT |
• | Compensation risk management. The Compensation Committee, together with its compensation consultant, conducts annual | |
• | Our incentives are subject to certain minimums and maximum limits.We establish minimum thresholds for certain incentives where awards/payouts may not be earned or made unless actual performance meets or exceeds thresholds, such as our PRSUs. We also establish maximum limits | |
• | No hedging or pledging. Pursuant to our Insider Trading Policy, our directors, executive officers and employees are not permitted to “hedge” ownership by selling puts in or selling short any of our publicly-traded securities at any time. Additionally, we have not permitted any of our executive officers to pledge, or use as collateral, our securities to secure personal loans or other obligations. | |
29
| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
31
EXECUTIVE OFFICERS & COMPENSATION
| EXECUTIVE COMPENSATION FEATURES |
• | Competitive benchmarking against | |
• | Double trigger change in control severance.Our executive Change in Control Plan encourages continued dedication and alignment with stockholders’ interests through a potential change in control event, and is subject to a double trigger feature. | |
• | No 280G excise tax | |
•
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No employment | ||
•
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No executive perquisite or benefit | ||
•
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No special executive retirement | ||
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Our executives’ equity awards are made under our 2006 Equity Incentive Plan and have the following features/practices:
General Features/Practices:
| ¡ |
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¡ | No recycling of shares used to pay for the exercise price |
| ¡
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¡ | No single-trigger vesting upon change in control |
| ¡ | No tax gross-ups for plan awards |
| ¡ | Ability to qualify performance-based equity awards for 162(m) tax deductibility, where appropriate |
Stock Options:
| ¡ | No stock option repricing/exchange without stockholder approval |
| ¡ | No stock option reloads |
| ¡ | Minimum 100% fair market value exercise price for options |
| ¡ | Maximum 7-year term for options |
| ¡ | Minimum 1-year vesting for stock options awards |
Our typical practice for executives is vesting over 4 years
Full Value Awards:
| ¡ | Each full value award share counted as two shares |
¡ | Minimum 3-year time-based vesting for full value awards |
¡ | Minimum 1-year vesting for performance-based full value awards |
* * * *
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EXECUTIVE OFFICERS & COMPENSATION
| EXECUTIVE OFFICERS & COMPENSATION
|
| EXECUTIVE COMPENSATION PHILOSOPHYAND |
The key compensation philosophy and objectives of our executive compensation program and practices are as follows:
| • |
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| • |
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compensation; |
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| • | Recruiting and maintaining a cohesive,top-talent executive management team; and |
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Our compensation philosophy and program take into consideration our business objectives (including our long-term global growth); the relative complexity our business diversity represents in an organization of our size; stockholder interests; appropriate risk management practices; emerging trends in executive compensation (particularly for financial institutions); applicable regulatory requirements; and market practices.
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33
EXECUTIVE OFFICERS & COMPENSATION
Compensation Governance
The Company’s executive compensation program is supported by strong corporate governance and Board-level oversight:
Role of Compensation Committee; Committee Meetings
All members of the Compensation Committee are “independent” under applicable NasdaqNASDAQ rules. The Compensation Committee has primary oversight of our executive compensation program as provided in its charter, including the design and administration of executive compensation plans in a manner consistent with the executive compensation philosophy described above. The Compensation Committee:committee: (i) reviews and recommends for independent Board approval the compensation of the CEO, and (ii) reviews and approves the compensation of all othernon-CEO executive officers. In carrying out its oversight responsibilities, the Compensation Committeecommittee regularly reports to the Board on the actions it has taken, as well as confers with the Board on compensation matters, as necessary. The Compensation Committee also makes recommendations for all other compensation-related matters that require full Board approval. Additionally, the committee coordinates with other Board committees, as appropriate, including discussing: (i) compensation risk management with the Risk Committee, and (ii) financial items proposed for exclusion from the funding of our ICP with the Audit Committee. Membership of the Risk Committee includes the chairperson of the Compensation Committee, as well as one other member of the Compensation Committee who also serves as the chairperson of the Audit Committee.
The Compensation Committee meets on a regular basis, and routinely meets in executive session without management present. During 2015,2016, the Compensation Committee held ten (10)twelve (12) meetings, including an extended annual session where the Compensation Committee met with the Board Chair, (also Chair of the Risk Committee), as well as key members of executive management, including the CEO, the Chief Financial Officer, the Head of Human Resources and the General Counsel, to discuss considerations for reviewing and enhancing compensation strategy in light of the Company’s compensation strategy.strategic objectives, as well as relevant market trends.
Role of the Independent Board Members
Subject to the recommendation of the Compensation Committee, all of the independent directors of the Board (all Board members except the CEO)CEO, acting as a committee) review and approve the compensation for the CEO. Such review and approval are conducted during the executive session portion of the Board’s meetings,sessions, where neither the CEO nor any other member of management is present.
Role of Compensation Committee Consultant
The Compensation Committee has retained Pay Governance LLC (“Pay Governance”), an independent executive compensation consultant, to provide advice and recommendations on all compensation matters under its oversight responsibilities as defined in the Compensation Committee’s charter. The Compensation Committee in its sole discretion selects the consultant, and determines its compensation and the scope of its responsibilities.
In 2015, Pay Governance assisted the Compensation Committee with advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on executive and director compensation levels and practices, including review and recommendations on CEO and other executive compensation and evaluation of CEO pay and Company performance; advice on the Company’s 2015 Peer Group; guidance on the design of our compensation plans and executive/director stock ownership guidelines; evaluation of performance metrics and peer performance; assistance with the Compensation Committee’s periodic review of potential risks associated with our compensation programs; recommendations regarding our equity incentive plan; and periodic reports to the Compensation Committee on market and industry compensation trends and regulatory developments. The Compensation Committee did not engage Pay Governance for any additional services outside of executive and director compensation consulting during 2015. In addition, the Compensation Committee does not believe there were any potential conflicts of interest that arose from any work performed by Pay Governance during 2015.
Role of Chief Executive Officer
At the Compensation Committee’s request, our CEO will attend portions of the Compensation Committee’s meetings and executive sessions to discuss the Company’s performance and compensation-related matters. While he does not participate in any deliberations relating to his own compensation, he shares his assessment of the performance of the other executive officers with the Compensation Committee. Based on his assessmentsassessment and the Company’s overall performance, our CEO makes recommendations to the Compensation Committee on any compensation decisions or changes for the other executive officers. The Compensation Committeecommittee considers the CEO’s recommendations, as well as data and analyses provided by the Compensation Committee’s independent consultant (and to a lesser extent, management), but retains full discretion to approve, or recommend for the independent members of the Board to approve, all executive compensation.
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
EXECUTIVE OFFICERS & COMPENSATION
Role of Compensation Committee Consultant
The Compensation Committee has continued to retain Pay Governance LLC, an independent executive compensation consultant, to provide advice and recommendations on all compensation matters under its oversight responsibilities as defined in the Compensation Committee’s charter. The Compensation Committee in its sole discretion selects the consultant, and determines its compensation and the scope of its responsibilities.
In 2016, Pay Governance assisted the Compensation Committee with: advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on executive and director compensation levels and practices, including review and recommendations on CEO and other executive compensation and evaluation of CEO pay and Company performance; advice on the Company’s 2016 Peer Group; guidance on the design of our compensation plans and executive/director stock ownership guidelines; evaluation of performance metrics and peer performance; assistance with the Compensation Committee’s annual review of potential risks associated with our compensation programs; recommendations regarding our 2006 Equity Incentive Plan; and periodic reports to the Compensation Committee on market and industry compensation trends and regulatory developments. The Compensation Committee did not engage Pay Governance for any additional services outside of executive and director compensation consulting during 2016. In addition, the Compensation Committee does not believe there were any potential conflicts of interest that arose from any work performed by Pay Governance during 2016.
| ANNUAL SAYON PAY |
We submit an advisory vote on executive compensation, or Say on Pay, to our stockholders on an annual basis. In 2016, over 98.5% of the votes cast approved our 2015 executive compensation program (as described in our 2016 proxy statement). In light of the strong support and other feedback we have solicited from our stockholders, the Compensation Committee made no material changes to our compensation philosophy, policies or overall program. Nevertheless, we continue to carry out our executive compensation program based on our key philosophy and objectives as described above. The Compensation Committee will continue to consider changes to the program on an ongoing basis, as appropriate, in light of evolving factors such as our corporate strategy, the business environment and competition for talent, as well as stockholder feedback.
32
| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
|
For 2016, the Compensation Committee benchmarked and compared our compensation and performance with our peer companies, in a manner consistent with prior years. Our2016Peer Group companies are companies that are similarly sized, have certain business model similarities and compete with us for our talent. (See below for a list of our 15 peer group companies for 2016.)
The Compensation Committee, with its compensation consultant and management, reviews on at least an annual basis, the composition of the peer group. In determining the composition, the Compensation Committee considers various factors and characteristics including, but not limited to, business model, complexity of the business, market capitalization, asset size, assets under management, number of employees, and performance on financial and market-based measures. The 2016 Peer Group reflects the removal of two companies from our 2015 Peer Group: (i) City National Corp., which was acquired during 2015; and (ii) MB Financial, Inc., due to the lower total asset level relative to the Company. No new companies were added to the 2016 Peer Group. It is important to note that in determining executive compensation, the Compensation Committee does not solely rely on comparative data from the 2016 Peer Group. Such comparative data provides helpful market information about our peer companies, but the Compensation Committee does not target any specific positioning or percentile, nor does it use a formulaic approach, in determining executive pay levels. The Compensation Committee also utilizes other resources, including published compensation surveys (from Towers Watson and McLagan) and other proxy data. All such comparative peer data and supplemental resources are considered, along with the Company’s pay for performance and internal parity objectives. All applicable information is reviewed and considered in aggregate, and the Compensation Committee does not place any particular weighting on any one factor. | 2016 Peer Group
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Associated Banc-Corp
BOK Financial Corp
Comerica Incorporated
Commerce Bancshares, Inc.
Cullen/Frost Bankers, Inc.
East West Bancorp, Inc.
FirstMerit
First Republic Bancorp
Huntington Bancshares
Investors Bancorp,
Prosperity Bancshares, Inc.
Signature Bank
Umpqua Holdings Corporation
Webster Financial Corp.
Zions Bancorporation | ||||
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It is important to note that in determining executive compensation, the Compensation Committee does not solely rely on comparative data from the 2015 Peer Group. Such comparative data provides helpful market information about our peer companies, but the Compensation Committee does not target any specific positioning or percentile, nor does it use a formulaic approach, in determining executive pay levels. The Compensation Committee also utilizes other resources, including published compensation surveys and proxy data. All such comparative peer data and supplemental resources are considered, along with the Company’s pay for performance and internal parity objectives. All applicable information is reviewed and considered in aggregate, and the Compensation Committee does not place any particular weighting on any one factor.
| * | Acquired during |
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
EXECUTIVE OFFICERS & COMPENSATION
2015 Executive Compensation
Summary of 2015 Key Executive Compensation Components
| ELEMENTSOF EXECUTIVE COMPENSATION |
| SUMMARYOF KEY COMPONENTS |
| Component and Purpose |
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General
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| Base Salary
Provides ongoing fixed cash pay. |
| Annual base salary stayed at prior year’s level or was increased between 1.6-6.0%
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| Annual Cash Incentives
Provides short-term (annual) performance-based cash incentive compensation opportunity under our ICP. | No material changes to funding methodology for ¡ 2/3 of the pool based on ROE performance against our ¡ 1/3 of the pool based on relative ROE performance
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Based on the Company’s ROE performance above its annual target and its ranking against its peers, as well as the Company’s overall performance,
| Annual ICP targets stayed at prior year’s level or was increased by 11.1 to 16.7%. For | ||||||||||
| Performance-Based Restricted Stock Units (“PRSUs”)
Provides incentives to motivate and retain executives and to reward for our performance relative to peers based on certain specific metrics.
| PRSUs granted in 2016 vest subject to performance over a3-year period based on (each 50% of the award): (i) the Company’s TSR performance relative to peers; and (ii) the Company’s ROE and Selected Fee Income performance. | 2016 allocation | ||||||||
Stock Options
Provides incentives for long-term creation of stockholder value over a
| All stock options and RSU awards are subject to standard annual vesting over a | ||||||||||
Restricted Stock Units (“RSUs”)
Provides incentives for retention and long-term creation of stockholder value over a
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
36
EXECUTIVE OFFICERS & COMPENSATION
Elements of 2015 Compensation
Base Salary
We providepay base salaries in order to provide executives with a reasonable level of fixed short-term compensation. Executive base salary levels are typically reviewed at least annually by the Compensation Committee and adjusted as appropriate, typically asappropriate. Such adjustments generally consist of merit increases, promotions or changes in responsibilities, or market adjustments. Base salaries are determined on an individual basis. When determining any base salary increases, the Compensation Committee considers an individual’s total compensation package, his or her performance, Company performance, comparative peer and market compensation data, internal parity, and other relevant factors, including the scope of the executive’s responsibilities relative to peers and other executives, and retention concerns.
| NEO | Percentage from 2015 | 2016 Annual Base Salary | ||||||||||||||
Greg Becker | 1.6 | % | $ | 925,000 | ||||||||||||
Michael Descheneaux | — | 600,000 | ||||||||||||||
Marc Cadieux | 5.9 | 450,000 | ||||||||||||||
John China | 4.2 | 500,000 | ||||||||||||||
Joan Parsons | 4.2 | 500,000 | ||||||||||||||
In 2015,2016, each NEO, except our Chief Financial Officer, received merit increase adjustments to their base salaries based on individual performance, salary market positioning relative to peers, and internal parity, as appropriate. In particular, the salary increase for Mr. Descheneaux reflects: (i) his overall exceptional performance, and (ii) the increasing complexities under his span of responsibilities, including preparation for compliance of financial requirements applicable to large financial institutions with over $50 billion in total average assets.
| NEO | Percentage Increase | 2015 Annual Base Salary | ||||||||||||
Greg Becker | 4.0 | % | $ | 910,000 | ||||||||||
Michael Descheneaux | 14.3 | 600,000 | ||||||||||||
John China | 6.7 | 480,000 | ||||||||||||
Joan Parsons | 6.7 | 480,000 | ||||||||||||
Bruce Wallace | 5.9 | 450,000 | ||||||||||||
| ANNUAL CASH INCENTIVES |
Annual Cash Incentives
| NEO | Percentage from 2015 | 2016 Annual ICP Target (% of Annual | ||||||||||||||
Greg Becker | 11.1 | % | 100 | % | ||||||||||||
Michael Descheneaux | 16.7 | 70 | ||||||||||||||
Marc Cadieux | — | 50 | ||||||||||||||
John China | 16.7 | 70 | ||||||||||||||
Joan Parsons | 16.7 | 70 | ||||||||||||||
Our executives, including our NEOs, participate in the Company’s Incentive Compensation Plan (“ICP”), an annual cash incentive plan that rewards performance against individual and Company objectives.
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Each executive participant is assigned an incentive target, stated as a percentage of the individual’s annual base salary. In 2015,Based on the Compensation Committee’s annual compensation review, in 2016, ICP targets:
Increased from 80% to 90%targets for Mr. Becker; and
Increased from 50% to 60%NEOs, except for Messrs. Descheneaux and Wallace.
These adjustmentsour Chief Credit Officer, were made in orderincreased to align targets with comparative peer and market compensation and to continue to balance overall total target pay mix. In addition, the adjustments applicable to Messrs. Descheneaux and Wallace were made to maintain internal parity among the executive team, as applicable. No changes were made to targets for Mr. China or Ms. Parsons.
ICP Funding
Each year, the Compensation Committee establishes one or more metrics that it will use to measure Company performance for ICP funding purposes. These metrics measure the Company’s performance on an absolute basis, as well as relative to peers. Based on those metrics and overall Company performance, the Compensation Committee will also determine the extent to which the Company will fund the incentive pool for the broad employee base, including executive officers. For 2016, the Compensation Committee utilized the same methodology for funding the ICP as in prior years in all material respects. The committee continued to believe that return on equity (“ROE”) is an appropriate indicator of financial performance that drives stockholder value, especially if performance is measured against the Company’s target objectives, as well as peer performance. Accordingly, the Compensation Committee continued to apply the following two performance metrics:(See graphs below.) | Performance Metrics for ICP Funding • ROE measured against budget • ROE relative to 2016 Peer Group |
•ROE Performance Against Annual ROE Target(Two-Thirds (2/3) of Pool) -Two-thirds (2/3) of the total incentive pool is funded based on the Company’s ROE performance relative to our Board-approved annual target ROE. The graph below illustrates the relationship in 2016 between: (i) achieved (but adjusted for the exclusions discussed below) ROE of 10.53% as a percentage of our annual target ROE (which was budgeted for 2016 at 9.91%), and (ii) the percentage of the target incentive pool accrued. There is a funding maximum of 200% of target (for achievement of 150% or over of our target ROE).
In addition, the Compensation Committee retains discretion to determine the extent to which the Company will fundmet its ICP performance target, including discretion to consider adjustments for certain out of the incentive pool.
For 2015,ordinary ornon-recurring items. Adjustments are determined by the Compensation Committee, utilizedin coordination with the same methodology for funding the ICP as in 2014 in all material respects. The Compensation Committee continued to believe that return on equity (“ROE”) is an appropriate indicator of financialAudit Committee.
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EXECUTIVE OFFICERS & COMPENSATION
performance that drives stockholder value, especially if performance is measured againstFor 2016, excluded items included: (i) certain gains or losses of the Company’s target objectives,investment securities (includingnon-marketable securities, warrant securities andavailable-for-sale securities), largely because performance of such securities are subject to market performance beyond the Company’s control; (ii) any impact from changes in Federal Reserve interest rates (other than any changes already included in the annual budget); and (iii) certain expense adjustments due to refinements and enhancements to our allowance for loan and lease losses methodology as well as peer performance. Accordingly,changes to our deferred tax balances. The net impact of these exclusions resulted in a lower adjusted ROE metric that reduced the overall funding of the ICP pool.
• ROE Performance Against 2016 Peer Group(One-Third (1/3) of Pool) - For 2016, the Compensation Committee continuedalso established ROE relative to apply the following two2016 Peer Group as an additional ICP performance metrics:metric to fund 1/3 of the total pool. As illustrated in the graph below to the right, there is no payout if our performance falls in the bottom four positions, and a payout maximum in the top three positions. The extent of funding earned is subject to straight-line interpolation based on ROE performance between the third and thirteenth ranked companies.
|
| |||
| ||||
| Achieved 106.3% of our Annual ROE Target | Ranked in the | |||
| * |
|
| |
For 2015,2016, the Compensation Committee determined that: (i) 2/3 of the executivetotal ICP pool would be funded at 132%113% of target, based on the Company’s ROE performance, as adjusted, after taking into account the adjustments as discussed above; and (ii) 1/3 of the executivetotal ICP pool would be funded at 183%180% of target, based on the Company’s relative ROE performance, ranking in the fourthfifth position (76th percentile) against the 20152016 Peer Group. In addition to these two ROE metrics, the Compensation Committee took into consideration the overall strong performance of the Company and the executive team in 2015. In particular, they took into consideration: overall strong executive leadership as a team; exceptional annual financial performance, including, in particular, EPS and net income increases and strong financial growth in assets, loans and client fund balances; strong overall performance relative to peers; continued progress towards global growth; and continued focus on risk management. As a result, the Compensation Committee approved the funding of the overall executivetotal ICP pool at 156%135% of total target.
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20152016 NEO ICP Awards
The Compensation Committee (or in the case of the CEO, the independent members of the Board) determines actual annual cash incentive awards for the NEOs based upon the individual’s target incentive level, the Company’s performance, and the NEO’s individual performance. ICP awards for NEOs may be at, above, or below the target incentive. For 2015,2016, each NEO was awarded the ICP amounts set forth in the table to the right.
| NEO |
ICP Award | |||||||
Greg Becker | $ | | ||||||
Michael Descheneaux | ||||||||
Marc Cadieux | 375,000 | |||||||
John China | 525,000 | |||||||
Joan Parsons | ||||||||
| ||||||||
In determining such 20152016 awards, the Board considered Mr. Becker’s performance assessment conducted by the independent members of the Board, and the Compensation Committee considered the performance assessments of each of the other NEOs as conducted by Mr. Becker, as well as input from the independent members of the Board. (See “Corporate Governance Principles and Board Matters — Oversight of CEO — Annual CEO Performance Evaluation” above.)
In addition, the independent members of the Board (with respect to Mr. Becker) and the Compensation Committee (with respect to the other NEOs) considered a variety of factors that they believed to be relevant, including: (i) the overall strong
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
performance of the Company and the respective areas of oversight of each NEO, and (ii) each NEO’s contributions to our business and financial results, execution of our 20152016 corporate initiatives, corporate risk management, and broader leadership within the organization. Specifically for Mr. Becker, certainkey factors considered included:
Strong 2015 profitabilityContinued 2016 profitability:
|
|
Strong Company growth:
|
|
|
Continued growth innon-GAAP core fee |
Growth
Continued global growth
ContinuedCorporate focus on enterprise-wideenterprise risk management
Expansion and enhancementOngoing development of executive leadership team
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EXECUTIVE OFFICERS & COMPENSATION
Long-Term Equity Incentives
| LONG-TERM EQUITY INCENTIVES |
 | The Company believes that equity-based awards, particularly in combination with the Company’s equity ownership guidelines as discussed below, tie each of the NEOs’ compensation to the Company’s long-term financial performance and align the interests of the NEOs and our stockholders.
|
Performance-based Restricted Stock Units (PRSUs)
Performance-based restricted stock units (PRSUs) are earned based on the achievement of certain performance conditions, as determined by the Compensation Committee. After the end of the specified performance period, the Compensation Committee will determine whether (and to what extent) the NEOs had earned the PRSUs, based on the Company’s Relative TSR, ROE and Selected Fee Income performance. The PRSUs are subject to a maximum total payout at 150% of target award. No payout is made if the Company ranks in the bottom five peer companies.
Similar to 2014, for 2015, PRSUs are subject to performance-based vesting over a three-year period (from 2015 through 2017). To the extent earned, PRSUs are subject to additional time-based vesting through January 30, 2018. 2015 PRSU grants were made effective as of March 30, 2015. Additionally for 2015, the Compensation Committee designed the PRSUs to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code by subjecting the awards to the following performance conditions:
|  | |
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EXECUTIVE OFFICERS & COMPENSATION
|
The other fifty percent of the PRSU award is funded at a maximum 150% payout subject to the Company’s achievement of a three-year annual average ROE performance threshold of 5% or higher. (No funding below 5%.) The Compensation Committee may apply negative discretion to reduce the actual funding, as it deems appropriate.
|
The Compensation Committee determined Selected Fee Income as an additional PRSU performance metric mainly due to the desire to diversify the Company’s sources of income, in particular, non-interest income. Our foreign exchange and credit card-based businesses are key parts of our business targeted for growth.
2015 represents the first year of a three-year performance period, hence none of the PRSUs granted in 2015 have been earned.
The Compensation Committee typically makes equity awards to each NEO at the time the individual is hired or promoted, and annually thereafter. The size of the awards reflects the overall number of shares available to the Company under our equity incentive plan, the Compensation Committee’s determination of an appropriate annual equity burn rate (the percentage of total shares outstanding that the Company has issued during the year in the form of equity compensation), the NEO’s role and performance, and the market compensation data for the NEO’s external peers.
In 2016, the Compensation Committee continued to focus on long-term, performance-based equity compensation, keeping consistent with the equity mix from the prior year. The committee determined a target equity award total value for each NEO based on peer benchmarking comparisons, and granted a mix of 50% performance-based RSUs, and 25% each of stock options and time-based vesting RSUs.
Allocation of Total Equity Award for NEOs
Stock Options and Restricted Stock Units (RSUs)
Stock options and restricted stock units are subject to annual vesting over a four-year period. The stock options have a maximum term of seven years. No performance-based criteria was established, as the increase in the value of these stock options, and the value of the RSUs, are inherently tied to the future performance of the Company’s common stock. 2016 annual stock option and RSU grants were made effective as of May 2, 2016.
Performance-based Restricted Stock Units (PRSUs)
Performance-based restricted stock units are earned based on the achievement of certain performance metrics, as determined by the Compensation Committee. These metrics typically measure the Company’s performance on an absolute basis, as well as relative to peers. After the end of the specified performance period, the Compensation Committee will determine whether (and to what extent) the NEOs earned the PRSUs, subject to a maximum total payout of 150% of target award. For 2016 (and consistent with the prior year), the NEOs were granted, effective as of February 16, 2016, PRSUs that were subject to performance-based vesting over a three-year period (from 2016 through 2018) and certain designated performance metrics. To the extent earned, these awards are subject to additional time-based vesting through January 30, 2019. The PRSUs are designed to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code. 2016 represents the first year of a three-year performance period, hence none of the PRSUs granted in 2016 have been earned. | Performance Metrics for PRSUs • TSR relative to 2016 Peer Group • ROE (as funding threshold) • Selected Fee Income |
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
The performance metrics for the 2016 PRSUs are described below:
• Relative TSR Against 2016 Peer Group (50% of Award). Fifty percent of the PRSU award is funded at a maximum payout of 150% of target, and earned (subject to additional time-based vesting) based on the Company’s TSR1 performance over a three-year performance period as ranked against the 2016 Peer Group(“Relative TSR”). (The Compensation Committee may apply negative discretion to reduce the actual award, as it deems appropriate.) The committee selected Relative TSR as a key PRSU performance metric because it correlates directly with the Company’s stock price performance, which aligns with stockholder interests. No payout is made if the Company ranks in any of the bottom four positions.
• ROE Funding Threshold and Selected Fee Income Target(50% of Award).
| ¡ | The other fifty percent of the PRSU award is funded at a maximum payout of 150% of target and earned (subject to additional time-based vesting) based on the Company’s achievement of a three-year annual average ROE performance threshold of 5% or higher. (No funding if ROE falls below 5%.) (The Compensation Committee may apply negative discretion to reduce the actual funding, as it deems appropriate.) For 2016, the Company’s actual ROE exceeded the 5% funding threshold. |
| ¡ | If the ROE performance threshold is achieved and funding has been established, the Compensation Committee will, as it deems appropriate, determine the extent of the award earned based on the Company’s performance against the three-year annual average of its budgeted annual income from foreign exchange fees and credit card fees (“Selected Fee Income”). The budgeted income targets shall be specified in the Company’s overall annual budget as approved by the Board of Directors. The Compensation Committee determined Selected Fee Income as an additional PRSU performance metric mainly due to the desire to diversify the Company’s sources of income, in particular,non-interest income. Our foreign exchange and credit card-based businesses are key parts of our business targeted for growth. For 2016, the Company achieved $172.4 million in Selected Fee Income, or 98% of the budgeted total. |
|
| |||
2016Results-to-date (Year 1 of3-Year Performance Period): | ||||
| Ranked in the 9th position against our 2016 Peer Group. | Achieved 98% of our Budgeted Selected Fee Income. | |||
Previously Granted PRSU Awards for Performance Period Ended in 2016 In 2014, our NEOs were granted PRSU awards subject to a single performance metric of relative TSR performance over a three-year performance period (2014-2016). Upon completion of the performance period, the Compensation Committee determined that the Company’s relative TSR performance ranked 5th against the applicable 2014 peer group (of 20 companies) and consequently, that the maximum award of 150% of the target PRSU awards were earned. The awards were subject to a brief time-based vesting requirement, and were fully vested as of January 30, 2017. |  |
| 1 | TSR is measured based on the average closing stock price for the last two months of the applicable performance period and the average closing stock price for the two months immediately preceding the performance period, with dividends reinvested. |
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
| OTHER COMPENSATIONFOR MARC CADIEUX |
In 2012 (before he was appointed as an executive officer), Mr. Cadieux was awarded a specialone-time, long-term cash retention award of $300,000 (“Special Long-Term Cash Award”), which was subject to: (i) cliff vesting on June 30, 2016; (ii) continued employment and (iii) other minimum performance conditions. During the 2012-2016 vesting period, the award was invested under the Deferred Compensation Plan (“DCP”) in accordance with the terms of the plan. On June 30, 2016, Mr. Cadieux earned a total of $364,972, including his earnings under the DCP.
| EXECUTIVE BENEFITSAND OTHER EXECUTIVE COMPENSATION-RELATED MATTERS |
Executive Benefits
Employee Retirement Benefits
Our NEOs are eligible to participate in our SVB Financial Group 401(k) (“401(k) Plan”) and Employee Stock Ownership Plan (“ESOP”), our combined qualified retirement and profit sharing plan that is generally available to all of the Company’s U.S. employees. Our NEOs participate in the plan on the same terms as all other eligible employees. Other than our 401(k) plan, SVB Financial Group doesPlan, we do not provide any pension, excess retirement or SERPs to our NEOs.
Under our 401(k) plan,Plan, our U.S. employees, including our NEOs, may make voluntarypre-tax and/or Rothpost-tax deferrals up to the maximum provided for by IRS regulations. The Company providesdollar-for-dollar matching contributions up to a maximum of 5% of cash compensation or the Internal Revenue Section 401(a) compensation limit, whichever is less. Company 401(k) matching contributions vest immediately upon deposit into the individual’s 401(k) account.
The plan also includes a profit sharing component — the Employee Stock Ownership Plan (the “ESOP”).component. Under the ESOP, we may make discretionary annual contributions for U.S. employees, as determined by the Compensation Committee. ESOP
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EXECUTIVE OFFICERS & COMPENSATION
contributions may be in the form of cash, the Company’s Common Stock,common stock or a combination of both, and are subject to certain vesting conditions. Contributions are determined based on the Company’s performance and are not adjusted to reflect individual performance.
Similar to 2014, for 2015,For 2016, the Compensation Committee established performance criteria based on the Company’s adjusted ROE similar toagainst budget (same as the calculation of 2/3 of the total ICP pool) to fund the ESOP contribution, and set the funding level to a 2.5% (of1.25% (reduced by 50% from the prior year as part of our ongoing initiatives to reduce non-interest expenses) of eligible compensation) funding levelcompensation based on target ROE performance, upperformance. Despite a higher allowable maximum under the ESOP, the Compensation Committee has committed to a funding maximum funding of 5%. Based on the Company’s 20152016 above-target ROE performance, the Compensation Committee approved a contribution of 3.3%1.4% of eligible compensation in cash (50%) and the Company’s Common Stockcommon stock (50%) for all eligible participants.
Deferred Compensation
We do not provide NEOs with any Company-funded deferred compensation benefits. However, in order to help them achieve their retirement objectives, we offer each NEO the opportunity totax-defer a portion of their income, beyond what is allowed to be deferred in the Company’s qualified retirement plan. Specifically, under our Deferred Compensation Plan (“DCP,”), each individual may defer 5% to 50% of their base pay and 5% to 100% of eligible incentive payments during each plan year. The DCP is an unfunded plan, and participating executives bear the risk of forfeiture in the event that we cannot fund DCP liabilities. We do not match executive deferrals to the DCP, nor do we make any other contributions to the DCP. See “Compensation for Named ExecutiveOfficers—Non-Qualified Deferred Compensation”below.
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
We establish and maintain a bookkeeping account for each participant whichthat reflects compensation deferrals made by the executive along with any associated earnings, expenses, gains and losses. The amount in a participant’s account is adjusted for hypothetical investment earnings or losses in an amount equivalent to the gains or losses reported by the investment options selected by the participant from among the investment options designated for this purpose by the Company. A participant may, in accordance with rules and procedures we establish, change the investments to be used for the purpose of calculating future hypothetical investment adjustments to the participant’s account. The account of each participant is adjusted each business day to reflect: (a) the hypothetical investment earnings and/or losses described above; (b) participant deferrals; and (c) distributions or withdrawals from the account. Distributions or withdrawals from the DCP shall be made in full accordance with the requirements of Internal Revenue Code Section 409A. NoExcept in connection with Mr. Cadieux’s Special Long-Term Cash Award (see above), no NEOs participated in the DCP in 2015.2016. Among the NEOs, only Mr.Messrs. Becker holds a balance due to deferrals madeand Cadieux held balances under the plan in 2005.during 2016.
Health and Welfare BenefitsBenefits/Time Away From Work
Our NEOs are eligible to participate in our standard health and welfare benefits program, which provides medical, dental, life, accident and disability coverage to all of our eligible U.S.-based employees. We do not provide executives with any health and welfare benefits that are not generally available to other Company employees.
Time Away From Work
Under Additionally, under our “time away from work” policy, U.S. exempt employees, including our NEOs, do not accrue vacation benefits. Rather, such employees are expected to manage their time away from work, subject to the demands and needs of their jobs.Non-exempt U.S. employees and othernon-U.S. employees continue to accrue vacation benefits formulaically.
Executive Termination Benefits
See “Compensation “Compensation for Named Executive Officers—Other Post-Employment PaymentsPayments”” below.below.
Perquisites
We do not have any executive perquisite programs. From time to time, on a limited or exception basis, we may provide other benefits that we believe are related to, or serve, a business purpose or are customary outside of the U.S. that may otherwise be considered perquisites.purpose. We disclose those benefits as required by applicable rules.
Stock Option and Other Equity Practices
Grant Practices for Executive Officers
The Compensation Committee approved all equity grants in 20152016 made to executive officers of the Company, except that the independent members of the Board approved equity grants made to the Chief Executive Officer. Except for certain awards that we believe qualify as performance-based compensation under Section 162(m) of the Code (as defined below) which are awarded during the first quarter of the year,, annual equity compensation grants to executives haveare typically been approvedmade effective during the second quarter of the year. Grants are made effective during an open trading window pursuant to our Insider Trading Policy, with limited
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EXECUTIVE OFFICERS & COMPENSATION
exceptions. The exercise price for stock option grants is equal to the closing market price on the grant’s effective date and time-based grants typically have an annual vesting period of four years, subject to continued employment or service. All 20152016 grants to our NEOs were made in accordance with this practice.
For newly-hired executive officers, the Compensation Committee approves an equity grant amount prior to, or shortly after, the executive’s start of employment, and the effective grant date is typically set during an open trading window after such executive commencesthey commence employment. This approach provides forensures that the exercise price of stock options to reflectreflects a fair market price, since the exercise price for stock option grants is equal to the closing market price on the grant’s effective date.
Grant Practices for Other Employees
The Board has delegated authority to the Equity Awards Committee to make equity grants tonon-executive employees under our 2006 Equity Incentive Plan. The Equity Awards Committee is a committee of two, comprised of our Chief Executive Officer and the Chair of our Board. The Equity Awards Committee may not make equity grants to executives or anynon-executive employee that reports directly to the Chief Executive Officer.
The Equity Awards Committee may make grants only within established individual employee and aggregate share limits and in accordance with established requirements regarding the term, vesting period, exercise price and other terms and conditions for the grant. In addition, all grants of stock options, stock appreciation rights, and restricted stock units made by the Equity Awards Committee must be made (or become effective) on the first Monday of the month following approval or, where the first Monday is a Company-observed U.S. holiday, on the first
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| EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
Tuesday of such month. The Equity Awards Committee approves grants on a quarterly basis, and must approve all grants in writing on or before the date of grant, subject to the respective employee remaining an employee as of the date of grant. Finally, management updates the Compensation Committee regarding all grants made by the Equity Awards Committee on a regular basis. Any grant that does not meet the requirements established for the Equity Awards Committee must be made by the Board, the Compensation Committee or other authorized committee.
The Compensation Committee typically approves annual grants to all eligible employees, as well as any other grants that the Equity Awards Committee is not authorized to approve.
Prohibitions Against Hedging
Pursuant to our Insider Trading Policy, our directors, executive officers (including our NEOs) and employees are not permitted to “hedge” ownership by selling puts in or selling short any of the Company’s publicly-traded securities at any time. Additionally, we discourage, and have not permitted, any of our executive officers to pledge, or use as collateral, our securities to secure personal loans or other obligations.
Compensation Recovery Policies
Except as noted below, our Compensation Committee has not yet adopted a policy with respect to whether we will make retroactive adjustments to any cash or equity based incentive compensation paid to our NEOs or other employees where the payment was based on the achievement of financial results that were subsequently revised. Our Compensation Committee intends to adopt a general compensation recovery policy after the SEC adopts final rules implementing the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In 2015, our Compensation Committee approved an amendment to our 2006 Equity Incentive Plan to provide that equity awards granted under the 2006 Equity Incentive Plan will be subject to the terms and conditions of any compensation recovery policy adopted by the Company and as may be in effect from time to time. The committee also approved a similar amendment to the Incentive Compensation Plan as it relates to incentive awards under the plan.
Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) limits our deductibility of compensation paid to our CEO and each of the next three most highly compensated executive officers (excluding the Chief Financial Officer) in excess of $1,000,000, but excludes “performance-based compensation” from this limit. OurWe believe our stock options, as well as beginning for the year 2015, our executives’ PRSU awards, are designed to qualify for this tax deductibility.as “performance-based compensation.” However, in order to maintain flexibility and promote simplicity in the Compensation Committee’s administration of and oversight over executive compensation arrangements, other compensation arrangements, such as time-based restricted stock units that vest based solely on continued service and ICP payments, doare not designed to qualify for tax deductibility.as “performance-based compensation.” This design allows the Compensation Committee to balance tax deductibility with other business priorities that affect stockholder value.
Compensation that we intend to qualify as “performance-based” under Section 162(m) areis also reviewed and approved by an independent committee of the Board of Directors, comprised of Mr. Dunbar, our Board Chair, and Mr. Robinson, our Audit Committee Chair and member of the Compensation Committee.Committee (the “162(m) Committee”).
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Equity Ownership Guidelines for Executive Officers
The Company maintains stock ownership guidelines for the Company’s executive officers, including the NEOs. These stock ownership guidelines reflect the Board’s belief in the importance of aligning the economic interests of stockholders and management.
The Compensation Committee is responsible for setting and periodically reviewing the guidelines. Guidelines for each executive position are determined based on factors including the executive role, scope of responsibilities, base salary levels, Company stock price performance and market data. The current equity ownership guidelines applicable to executive officers are based on the value of the Company’s Common Stockcommon stock as a percentage of annual base salary, as follows:
| ||
| ||
|
| Stock Value as Percentage of Annual Base Salary | ||||||
| 600% | 300% | 200% | ||||
| Chief Executive Officer | Chief Credit Officer Chief Digital Officer Chief Financial Officer Chief Operations Officer | Chief Risk Officer Head of EMEA/President UK Branch Head of Technology Banking | Chief Information Officer Chief Marketing Officer General Counsel Head of Human Resources | |||
All executive officers have five years from the date on which they become an executive officer to attain the minimum level of ownership.
The Governance Committee monitors compliance with these guidelines and reviews executive equity holdings on a quarterly basis. In evaluating whether executives are meeting the ownership guidelines, the Governance Committee considers the following as shares owned: (1) shares actually held, (2) shares owned through investment in the Company’s stock fund in the SVB Financial Group 401(k) and Employee Stock Ownership Plan, and (3) earned but unvested awards of restricted stock awards and restricted stock units (subject to either time-based or performance-based vesting). Neither vested nor unvested stock options count towards the ownership guidelines. Exceptions to meeting the guidelines due to personal financial or other reasons are reviewed and determined by the Governance Committee.
As of December 31, 2015,2016, all of our NEOs executive officers were in compliance with the applicable ownership guidelines.guidelines or otherwise expected to achieve the requisite ownership levels within the designated five year time-frame.
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COMPENSATION FOR NAMED EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2013,2016, 2015 and 2014, and 2015.respectively.
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Stock Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($)(4) | Total ($) | ||||||||||||||||||||||||||
Greg Becker, | 2015 | 912,333 | - | 2,092,890 | 670,964 | 1,225,000 | 25,947 (5) | 4,927,134 | ||||||||||||||||||||||||||
President and Chief | 2014 | 869,167 | - | 1,175,470 | 1,070,211 | 935,000 | 22,924 (6) | 4,072,772 | ||||||||||||||||||||||||||
Executive Officer | 2013 | 835,613 | - | 1,336,868 | 867,018 | 925,000 | 22,389 (7) | 3,986,888 | ||||||||||||||||||||||||||
Michael Descheneaux, | 2015 | 592,885 | - | 837,104 | 268,394 | 575,000 | 22,508 (8) | 2,295,891 | ||||||||||||||||||||||||||
Chief Financial Officer | 2014 | 520,833 | 600 | 517,225 | 470,896 | 425,000 | 21,347 (9) | 1,955,901 | ||||||||||||||||||||||||||
| 2013 | 499,780 | - | 739,544 | 474,665 | 450,000 | 22,389 (10) | 2,186,378 | |||||||||||||||||||||||||||
John China, | 2015 | 479,308 | - | 456,520 | 146,366 | 525,000 | 24,383 (11) | 1,631,577 | ||||||||||||||||||||||||||
Head of Relationship | 2014 | 437,500 | 600 | 282,044 | 256,837 | 380,000 | 21,890 (12) | 1,378,871 | ||||||||||||||||||||||||||
Banking | 2013 | 373,113 | - | 412,438 | 235,961 | 1,072,500 | (13) | 22,389 (14) | 2,116,401 | |||||||||||||||||||||||||
Joan Parsons, | 2015 | 479,308 | - | 456,520 | 146,366 | 425,000 | 23,680 (15) | 1,530,874 | ||||||||||||||||||||||||||
Head of Specialty | 2014 | 441,667 | 600 | 282,044 | 256,837 | 380,000 | 24,067 (16) | 1,385,215 | ||||||||||||||||||||||||||
Banking | 2013 | 399,780 | - | 405,327 | 257,910 | 350,000 | 22,389 (17) | 1,435,406 | ||||||||||||||||||||||||||
Bruce Wallace, | 2015 | 449,872 | - | 456,520 | 146,366 | 440,000 | 22,609 (18) | 1,515,367 | ||||||||||||||||||||||||||
Chief Digital Officer | 2014 | 420,833 | 600 | 282,044 | 256,837 | 260,000 | 21,455 (19) | 1,241,769 | ||||||||||||||||||||||||||
| 2013 | 398,113 | - | 398,216 | 257,910 | 350,000 | 22,389 (20) | 1,426,628 | |||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Stock Awards ($) (2) | Stock Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($)(4) | Total ($) | ||||||||||||||||||||||||
Greg Becker | 2016 | 925,904 | - | 2,225,746 | 807,501 | 1,148,750 | 17,879 | 5,125,780 | ||||||||||||||||||||||||
President and Chief | 2015 | 912,333 | - | 2,092,890 | 670,964 | 1,225,000 | 25,947 | 4,927,134 | ||||||||||||||||||||||||
Executive Officer | 2014 | 869,167 | - | 1,175,470 | 1,070,211 | 935,000 | 22,924 | 4,072,772 | ||||||||||||||||||||||||
Michael Descheneaux | 2016 | 602,308 | - | 861,541 | 312,566 | 625,000 | 53,977 | 2,455,392 | ||||||||||||||||||||||||
Chief Financial Officer | 2015 | 592,885 | - | 837,104 | 268,394 | 575,000 | 22,508 | 2,295,891 | ||||||||||||||||||||||||
| 2014 | 520,833 | 600 | 517,225 | 470,896 | 425,000 | 21,347 | 1,955,901 | |||||||||||||||||||||||||
Marc Cadieux | 2016 | 447,308 | 364,972 | 430,727 | 156,283 | 375,000 | 17,093 | 1,791,383 | ||||||||||||||||||||||||
Chief Credit Officer | ||||||||||||||||||||||||||||||||
John China | 2016 | 498,385 | - | 538,395 | 195,346 | 525,000 | 19,424 | 1,776,550 | ||||||||||||||||||||||||
Head of Technology | 2015 | 479,308 | - | 456,520 | 146,366 | 525,000 | 24,383 | 1,631,577 | ||||||||||||||||||||||||
Banking (5) | 2014 | 437,500 | 600 | 282,044 | 256,837 | 380,000 | 21,890 | 1,378,871 | ||||||||||||||||||||||||
Joan Parsons | 2016 | 498,385 | - | 466,652 | 169,293 | 475,000 | 19,149 | 1,628,479 | ||||||||||||||||||||||||
Credit Risk Manager | 2015 | 479,308 | - | 456,520 | 146,366 | 425,000 | 23,680 | 1,530,874 | ||||||||||||||||||||||||
(Former Head of Specialty Banking) (5) | 2014 | 441,667 | 600 | 282,044 | 256,837 | 380,000 | 24,117 | 1,385,265 | ||||||||||||||||||||||||
| (1) |
|
| (2) | Values indicated for equity awards reflect the fair value of grants made during the fiscal year. Such values were computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC |
| (3) |
|
| (4) |
|
| Greg Becker | Michael Descheneaux | Marc Cadieux | John China | Joan Parsons | ||||||||||||||||
Imputed Income Tax Reimbursement (a) | $ | 703 | $ | 12,206 | $ | - | $ | 2,325 | $ | 2,050 | ||||||||||
ESOP Contribution | 3,737 | 3,737 | 3,737 | 3,737 | 3,737 | |||||||||||||||
401(k) Match | 13,439 | 13,365 | 13,356 | 13,362 | 13,362 | |||||||||||||||
Other (b) | - | 24,669 | - | - | - | |||||||||||||||
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|
|
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|
|
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| |||||||||||
Total | $ | 17,879 | $ | 53,977 | $ | 17,093 | $ | 19,424 | $ | 19,149 | ||||||||||
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| |||||||||||
| (a) | Amounts represent reimbursement payments of income taxes incurred by |
| (b) |
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4543
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
EXECUTIVE OFFICERS & COMPENSATION
Grants of Plan-Based Awards
The following table sets forth all plan-based awards, including both equity awards andnon-equity incentive awards, under plans, made to our NEOs during the year ended December 31, 2015.2016.
| Compensation Committee or Board Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards; Number of Shares of Stock or Units (3) | All Other Option Awards; Number of Securities Underlying Options | Exercise or Base Price of Option Awards (4) | Grant Date Fair Value of Stock and Option Awards(5) | Compensation Committee or Board Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards; Number of Shares of Stock or Units (3) | All Other Option Awards; Number of Securities Underlying Options | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date |
Threshold |
Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Grant Date |
Threshold |
Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Becker | January 22, 2015 | January 22, 2015 | - | 819,000 | - | - | - | - | - | - | $ | - | $ | - | February 16, 2016 | February 16, 2016 | - | 925,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Becker | March 30, 2015 | March 27, 2015 | - | - | - | 5,500 | 11,000 | 16,500 | - | - | - | 1,395,680 | February 16, 2016 | February 16, 2016 | - | - | - | 8,333 | 16,666 | 24,999 | - | - | - | 1,456,775 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Becker | May 1, 2015 | March 27, 2015 | - | - | - | - | - | - | 5,371 | - | - | 697,210 | May 2, 2016 | February 16, 2016 | - | - | - | - | - | - | 7,311 | - | - | 768,971 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Becker | May 1, 2015 | March 27, 2015 | - | - | - | - | - | - | - | 16,237 | 129.81 | 670,964 | May 2, 2016 | February 16, 2016 | - | - | - | - | - | - | - | 24,951 | 105.18 | 807,501 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Descheneaux | January 22, 2015 | January 22, 2015 | - | 360,000 | - | - | - | - | - | - | - | - | February 9, 2016 | February 9, 2016 | - | 420,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Descheneaux | March 30, 2015 | March 19, 2015 | - | - | - | 2,200 | 4,400 | 6,600 | - | - | - | 558,272 | February 16, 2016 | February 9, 2016 | - | - | - | 3,225 | 6,451 | 9,676 | - | - | - | 563,882 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Descheneaux | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | 2,148 | - | - | 278,832 | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | 2,830 | - | - | 297,659 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Descheneaux | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | - | 6,495 | 129.81 | 268,394 | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | - | 9,658 | 105.18 | 312,566 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marc Cadieux | February 9, 2016 | February 9, 2016 | - | 225,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marc Cadieux | February 16, 2016 | February 9, 2016 | - | - | - | 1,612 | 3,225 | 4,837 | - | - | - | 281,897 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marc Cadieux | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | 1,415 | - | - | 148,830 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marc Cadieux | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | - | 4,829 | 105.18 | 156,283 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John China | January 22, 2015 | January 22, 2015 | - | 288,000 | - | - | - | - | - | - | - | - | February 9, 2016 | February 9, 2016 | - | 350,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John China | March 30, 2015 | March 19, 2015 | - | - | - | 1,200 | 2,400 | 3,600 | - | - | - | 304,512 | February 16, 2016 | February 9, 2016 | - | - | - | 2,016 | 4,032 | 6,048 | - | - | - | 352,437 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John China | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | 1,171 | - | - | 152,008 | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | 1,768 | - | - | 185,958 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John China | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | - | 3,542 | 129.81 | 146,366 | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | - | 6,036 | 105.18 | 195,346 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joan Parsons | January 22, 2015 | January 22, 2015 | - | 288,000 | - | - | - | - | - | - | - | - | February 9, 2016 | February 9, 2016 | - | 350,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joan Parsons | March 30, 2015 | March 19, 2015 | - | - | - | 1,200 | 2,400 | 3,600 | - | - | - | 304,512 | February 16, 2016 | February 9, 2016 | - | - | - | 1,747 | 3,494 | 5,241 | - | - | - | 305,411 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joan Parsons | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | 1,171 | - | - | 152,008 | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | 1,533 | - | - | 161,241 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joan Parsons | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | - | 3,542 | 129.81 | 146,366 | May 2, 2016 | February 9, 2016 | - | - | - | - | - | - | - | 5,231 | 105.18 | 169,293 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Wallace | January 22, 2015 | January 22, 2015 | - | 270,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Wallace | March 30, 2015 | March 19, 2015 | - | - | - | 1,200 | 2,400 | 3,600 | - | - | - | 304,512 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Wallace | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | 1,171 | - | - | 152,008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bruce Wallace | May 1, 2015 | March 19, 2015 | - | - | - | - | - | - | - | 3,542 | 129.81 | 146,366 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | The ICP amounts represent target |
| (2) | For the performance-based restricted stock unit grants to the NEOs made in |
| (3) | The stock awards reported |
| (4) |
|
The fair values reported above are also reported in the “Summary Compensation Table” under the “Stock Awards” and “Stock Option Awards” columns. Amounts shown represent the grant date fair values of |
Option Exercises and Stock Vested
The following table sets forth the number of securities underlying equity awards that vested (in the case of restricted shares)stock) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2015,2016, and the value realized upon such vesting or exercise.
| OPTION AWARDS | STOCK AWARDS | OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||||||||||||||||||||
Greg Becker | 42,962 | $ | 3,102,893 | 39,758 | $ | 4,980,320 | - | $ | - | 5,851 | $ | 614,501 | ||||||||||||||||||||
Michael Descheneaux | 17,767 | 1,286,517 | 11,444 | 1,406,322 | 6,500 | 308,366 | 2,981 | 313,142 | ||||||||||||||||||||||||
Marc Cadieux | 4,000 | 348,345 | 2,060 | 218,112 | ||||||||||||||||||||||||||||
John China | 2,064 | 158,381 | 5,679 | 694,038 | 8,572 | 668,015 | 1,610 | 169,122 | ||||||||||||||||||||||||
Joan Parsons | - | - | 6,342 | 779,882 | - | - | 1,635 | 171,752 | ||||||||||||||||||||||||
Bruce Wallace | 8,836 | 548,706 | 6,042 | 741,358 | ||||||||||||||||||||||||||||
4644
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
EXECUTIVE OFFICERS & COMPENSATION
Outstanding Equity Awards at Fiscal Year End
The following tables set forth all outstanding equity awards to the NEOs as of December 31, 2015.2016. The exercise price for each of the stock option grants reported below is equal to the closing market price on the applicable grant date. The vesting schedule for each outstanding equity award is provided in the footnotes to the tablestable below. Outstanding stock awards are valued based upon the closing market price of our stock as of December 31, 2015,30, 2016, which was $118.90$171.66 per share.
| OPTION AWARDS | STOCK AWARDS | OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (# Exercisable) | Number of Securities Underlying Unexercised Options (# Unexercisable) | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price (per option) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | Number of Securities Underlying Unexercised Options (# Exercisable) | Number of Securities Underlying Unexercised Options (# Unexercisable) | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price (per option) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg Becker | 13,894 | - | - | $ | 60.37 | April 27, 2018 | - | - | 1,300 | (5) | $ | 154,570 | 13,894 | - | - | $ | 60.37 | April 27, 2018 | - | - | 2,200 | (1) | $ | 377,652 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 12,486 | 7,025 | (1) | - | 64.37 | May 1, 2019 | - | - | 4,400 | (6) | 523,160 | 19,511 | - | - | 64.37 | May 1, 2019 | - | - | 2,016 | (2) | 346,067 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 13,028 | 15,800 | (2) | - | 71.11 | April 30, 2020 | - | - | 3,024 | (7) | 359,554 | 20,928 | 7,900 | (1) | - | 71.11 | April 30, 2020 | - | - | 4,028 | (3) | 691,446 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 6,086 | 18,257 | (3) | - | 107.98 | April 29, 2021 | - | - | 5,371 | (8) | 638,612 | 12,172 | 12,171 | (2) | - | 107.98 | April 29, 2021 | - | - | 7,311 | (4) | 1,255,006 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 16,237 | (4) | - | 129.81 | May 1, 2022 | - | - | 10,281 | (9) | 1,222,411 | 4,060 | 12,177 | (3) | - | 129.81 | May 1, 2022 | - | - | 10,281 | (5) | 1,764,836 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - | - | 16,500 | (10) | 1,961,850 | - | 24,951 | (4) | - | 105.18 | May 2, 2023 | - | - | 16,500 | (6) | 2,832,390 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 24,999 | (7) | 4,291,328 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Descheneaux | 6,000 | - | - | $ | 60.37 | April 27, 2018 | - | - | 1,225 | (1) | $ | 210,284 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 11,400 | - | - | 64.37 | May 1, 2019 | - | - | 886 | (2) | 152,091 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10,975 | 4,325 | (1) | - | 71.11 | April 30, 2020 | - | - | 1,611 | (3) | 276,544 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,356 | 5,355 | (2) | - | 107.98 | April 29, 2021 | - | - | 2,830 | (4) | 485,798 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,624 | 4,871 | (3) | - | 129.81 | May 1, 2022 | - | - | 4,524 | (5) | 776,590 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 9,658 | (4) | - | 105.18 | May 2, 2023 | - | - | 6,600 | (6) | 1,132,956 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9,676 | (7) | 1,660,982 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marc Cadieux | 2,600 | - | - | $ | 49.18 | April 30, 2017 | - | - | 445 | (1) | $ | 76,389 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,260 | - | - | 60.37 | April 27, 2018 | - | - | 755 | (8) | 129,603 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,600 | - | - | 64.37 | May 1, 2019 | - | - | 370 | (2) | 63,514 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,663 | 887 | (1) | - | 71.11 | April 30, 2020 | - | - | 673 | (3) | 115,527 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,240 | 2,239 | (2) | - | 107.98 | April 29, 2021 | - | - | 1,415 | (4) | 242,899 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 679 | 2,037 | (3) | - | 129.81 | May 1, 2022 | - | - | 1,891 | (5) | 324,609 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 4,829 | (4) | - | 105.18 | May 2, 2023 | - | - | 2,760 | (6) | 473,782 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,837 | (7) | 830,319 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John China | 152 | - | - | $ | 54.88 | January 3, 2018 | - | - | 775 | (1) | $ | 133,037 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6,600 | - | - | 64.37 | May 1, 2019 | - | - | 483 | (2) | 82,912 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6,450 | 2,150 | (1) | - | 71.11 | April 30, 2020 | - | - | 878 | (3) | 150,717 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,922 | 2,920 | (2) | - | 107.98 | April 29, 2021 | - | - | 1,768 | (4) | 303,495 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 886 | 2,656 | (3) | - | 129.81 | May 1, 2022 | - | - | 2,467 | (5) | 423,485 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 6,036 | (4) | - | 105.18 | May 2, 2023 | - | - | 3,600 | (6) | 617,976 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6,048 | (7) | 1,038,200 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joan Parsons | 171 | - | - | $ | 45.53 | October 26, 2017 | - | - | 675 | (1) | $ | 115,871 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,750 | - | - | 60.37 | April 27, 2018 | - | - | 483 | (2) | 82,912 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,600 | - | - | 64.37 | May 1, 2019 | - | - | 878 | (3) | 150,717 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,700 | 2,350 | (1) | - | 71.11 | April 30, 2020 | - | - | 1,533 | (4) | 263,155 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,922 | 2,920 | (2) | - | 107.98 | April 29, 2021 | - | - | 2,467 | (5) | 423,485 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 886 | 2,656 | (3) | - | 129.81 | May 1, 2022 | - | - | 3,600 | (6) | 617,976 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 5,231 | (4) | - | 105.18 | May 2, 2023 | - | - | 5,241 | (7) | 899,670 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) |
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| (3) | Options and restricted stock unit awards scheduled to vest with respect toone-third of the underlying shares on |
| (4) |
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| (5) |
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| (6) |
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| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (# Exercisable) | Number of Securities Underlying Unexercised Options (# Unexercisable) | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price (per option) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | |||||||||||||||||||||||||||
Michael Descheneaux | 2,500 | - | - | $ | 45.19 | July 27, 2017 | - | - | 775 | (5) | $ | 92,148 | ||||||||||||||||||||||||
| 8,000 | - | - | 60.37 | April 27, 2018 | - | - | 2,450 | (6) | 291,305 | |||||||||||||||||||||||||||
| 9,050 | 4,350 | (1) | - | 64.37 | May 1, 2019 | - | - | 1,330 | (7) | 158,137 | ||||||||||||||||||||||||||
| 6,650 | 8,650 | (2) | - | 71.11 | April 30, 2020 | - | - | 2,148 | (8) | 255,397 | ||||||||||||||||||||||||||
| 2,678 | 8,033 | (3) | - | 107.98 | April 29, 2021 | - | - | 4,524 | (9) | 537,904 | ||||||||||||||||||||||||||
| - | 6,495 | (4) | - | 129.81 | May 1, 2022 | - | - | 6,600 | (10) | 784,740 | ||||||||||||||||||||||||||
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| (7) |
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47
EXECUTIVE OFFICERS & COMPENSATION
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (# Exercisable) | Number of Securities Underlying Unexercised Options (# Unexercisable) | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price (per option) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | |||||||||||||||||||||||||||
John China | 3,704 | - | - | $ | 19.48 | April 28, 2016 | - | - | 300 | (5) | $ | 35,670 | ||||||||||||||||||||||||
| 2,500 | - | - | 49.18 | April 30, 2017 | - | - | 1,550 | (6) | 184,295 | |||||||||||||||||||||||||||
| 2,520 | - | - | 54.88 | January 3, 2018 | - | - | 725 | (7) | 86,203 | |||||||||||||||||||||||||||
| 4,950 | 1,650 | (1) | - | 64.37 | May 1, 2019 | - | - | 1,171 | (8) | 139,232 | ||||||||||||||||||||||||||
| 4,300 | 4,300 | (2) | - | 71.11 | April 30, 2020 | - | - | 2,467 | (9) | 293,326 | ||||||||||||||||||||||||||
| 1,461 | 4,381 | (3) | - | 107.98 | April 29, 2021 | - | - | 3,600 | (10) | 428,040 | ||||||||||||||||||||||||||
| - | 3,542 | (4) | - | 129.81 | May 1, 2022 | |||||||||||||||||||||||||||||||
45
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| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (# Exercisable) | Number of Securities Underlying Unexercised Options (# Unexercisable) | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price (per option) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | |||||||||||||||||||||||||||
Joan Parsons | 171 | - | - | $ | 43.53 | October 26, 2017 | - | - | 425 | (5) | $ | 50,533 | ||||||||||||||||||||||||
| 1,750 | - | - | 60.37 | April 27, 2018 | - | - | 1,350 | (6) | 160,515 | |||||||||||||||||||||||||||
| 2,300 | 2,300 | (1) | - | 64.37 | May 1, 2019 | - | - | 725 | (7) | 86,203 | ||||||||||||||||||||||||||
| 2,350 | 4,700 | (2) | - | 71.11 | April 30, 2020 | - | - | 1,171 | (8) | 139,232 | ||||||||||||||||||||||||||
| 1,461 | 4,381 | (3) | - | 107.98 | April 29, 2021 | - | - | 2,467 | (9) | 293,326 | ||||||||||||||||||||||||||
| - | 3,542 | (4) | - | 129.81 | May 1, 2022 | - | - | 3,600 | (10) | 428,040 | ||||||||||||||||||||||||||
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48
EXECUTIVE OFFICERS & COMPENSATION
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (# Exercisable) | Number of Securities Underlying Unexercised Options (# Unexercisable) | Equity Incentive Plan Awards; Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price (per option) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested | |||||||||||||||||||||||||||
Bruce Wallace | 2,250 | 2,250 | (1) | - | $ | 64.37 | May 1, 2019 | - | - | 400 | (5) | $ | 47,560 | |||||||||||||||||||||||
| - | 4,700 | (2) | - | 71.11 | April 30, 2020 | - | - | 1,300 | (6) | 154,570 | ||||||||||||||||||||||||||
| - | 4,381 | (3) | - | 107.98 | April 29, 2021 | - | - | 725 | (7) | 86,203 | ||||||||||||||||||||||||||
| - | 3,542 | (4) | - | 129.81 | May 1, 2022 | - | - | 1,171 | (8) | 139,232 | ||||||||||||||||||||||||||
| - | - | 2,467 | (9) | 293,326 | ||||||||||||||||||||||||||||||||
| - | - | 3,600 | (10) | 428,040 | ||||||||||||||||||||||||||||||||
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Pension Benefits
We do not maintain any defined benefit pension plans in which any of our executive officers participate.
Non-Qualified Deferred Compensation
The following table sets forth information about executive contributions to, earnings from, and distributions ofnon-qualified deferred compensation under our Deferred Compensation Plan. There were no above-market or preferential earnings on any compensation that was deferred. We do not maintain any othernon-qualified deferred compensation program for our NEOs.
Name | Executive Contributions in Last FY | Registrant Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at December 31, 2015 | Executive Contributions in Last FY | Registrant Contributions in Last FY | Aggregate Earnings in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last December 31, 2016 | ||||||||||||||||||||||||||||||
Greg Becker (1) | - | - | ($ | 1,131 | ) | - | $ | 171,890 | $ | - | $ | - | $ | 14,692 | $ | - | $ | 186,582 | ||||||||||||||||||||||
Michael Descheneaux | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Marc Cadieux | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
John China | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Joan Parsons | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Bruce Wallace | - | - | - | - | - | |||||||||||||||||||||||||||||||||||
| (1) | Mr. Becker |
Other Post-Employment Payments
There are certain circumstances in which our NEOs may be entitled to post-employment payments, which are discussed in further detail below:
Change in Control Severance Plan
Our Change in Control Severance Plan (the “Change in Control Plan
Our Change in Control Plan,”), as adopted in 2006 and amended from time to time, provides a specified severance benefit to our executive officers in the event their employment is involuntarily terminated or they resign from such employment for a “good reason” following a change in control of the Company. (GenerallyGenerally under the plan, “good reason” is defined as the occurrence of any of the following events without the covered employee’s written consent: (i) a material, involuntary reduction in responsibilities, authorities or functions, except in connection with a termination of employment for death, disability, retirement, fraud, misappropriation, embezzlement and other exclusions; (ii) a material reduction in base salary; (iii) a reduction in total compensation to less than 85% of the
49
EXECUTIVE OFFICERS & COMPENSATION
amount provided for the last full calendar year; or (iv) a relocation of more than fifty (50)50 miles.) We adopted this plan in order to ensure that itsour executives remain incented to consider and, whereif it is determined by the Board or stockholders as appropriate,(as appropriate) to be in our best interests, to act diligently to promote a change in the control of the Company. The plan does not provide for any 280G excise taxgross-up provisions.
We did not make any amendments or changes to the planChange in 2015.Control Plan in 2016.
The planChange in Control Plan provides for a cash severance payment equal to 300% of base salary and target ICP incentive for the Chief Executive Officer, 200% of base salary and target ICP incentive for the Chief Financial Officer, the Bank’s President and the Chief Strategy Officer, as applicable, and 100% of base salary and target ICP incentive for the other executive officers. In addition, it provides for up to 12 months of Company-paid COBRA medical, dental and vision coverage, full vesting of Company contributions totax-qualified retirement plans and certain outplacement services.
The circumstances that constitute a “Change“change in Control”control” are set forth in the Change in Control Plan. Generally, speaking, a Changechange in Controlcontrol includes a merger or consolidation, other than a merger or consolidation in which the owners of our voting securities own fifty percent (50%)50% or more of the voting securities of the surviving entity; a liquidation or dissolution or the closing of the sale or other disposition of all or substantially all of our assets; an acquisition by any person, directly or indirectly, of 50% or more of our voting securities; and an acquisition by any person, directly or indirectly, of 25% or more of our voting securities and, within twelve (12)12 months of the occurrence of such event, a change in the composition of the Board occurs as a result of which sixty percent (60%)60% or fewer of the directors are incumbent directors.
46
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
Our Change in Control Plan includes a number of restrictive covenants that govern the executives’ rights to receive benefits under the plan. Specifically,Generally, unless we provide otherwise in writing, the executive must not directly or indirectly engage in, have any ownership in or participate in the financing, operation, management or control of any person, firm, corporation or business that competes with us or our affiliates, or any of our customers or ourtheir affiliates for a period of (i) 18 months, with respect toin the chief executive officer,case of the Chief Executive Officer (ii) 12 months, forin the chief financial officer,case of the Chief Financial Officer, the Bank’s presidentPresident and chief strategy officer,Chief Strategy Officer, as applicable and (iii) six months, forin the case of other covered executives. In addition, unless we provide otherwise in writing, the executive may not directly or indirectly solicit, recruit, or otherwise hire or attempt to hire any of our employees or cause any such person to leave his or her employment during the periods described in the previous sentence. Finally, the executive must execute a general release of claims in our favor covering all claims arising out of the executive’s involuntary termination of employment (as defined in the Change in Control Plan) and employment with us and our affiliates.
Any benefits payable to an executive under this Planplan are reduced by any severance benefits we may pay to that executive under any other policy, plan, program or arrangement, including our Group Severance Benefit Policy.
SVB Financial Group Severance Benefit Policy
Our Severance Benefit Policy provides severance pay and benefits to eligible employees who are involuntarily terminated from employment due to staff reduction, position elimination, closure of a business unit, organization restructuring or such other circumstances, as we deem appropriate for the payment of severance benefits. The policy is intended to promote our ability to modify itsour workforce and structure, while providing a reasonable level of certainty and job security to our employees. The policy covers all regular full-time or regularand part-time employees, including the NEOs.
The policySeverance Benefit Policy provides for a cash severance payment based on level of job.job-level. For NEOs, this benefit is equal to 6six weeks’ pay per year of service including apro-rata amount for each partial year worked, with a minimum benefit of 6six months’ pay and a maximum benefit of 1one year’s pay. In addition, under the policy, we continue to makeco-payments for COBRA medical, dental, and vision coverage during the severance pay period and pays for certainpay designated outplacement services provided by a Company-selected external vendor. Any benefits payable to an executive under this Policypolicy are reduced by any severance benefits we pay to that executive under any other policy, plan, program, or arrangement, including our Change in Control Plan discussed above.
2006 Equity Incentive Plan
Our 2006 Equity Incentive Plan, in which the NEOs participate, provides for full vesting of outstanding awards in the event of a change in control (as defined in the plan) of the Company in the event that a successor corporation does not assume or substitute an equivalent option or right for the original equity awards under the plans.plan. In addition, effective as of January 7, 2015, we amended the equity awards agreements under the plan to provide for certain vesting of outstanding awards upon the termination of a participant’s employment due to death or disability as follows: (i) full vesting of any outstanding stock option awards, restricted stock unit awards subject to time-based vesting, restricted stock awards and stock appreciation rights awards; and(ii) pro-rated vesting for any outstanding restricted stock unit awards subject to performance conditions based on the level of achievement of the applicable performance conditions as of the date of termination. These changes apply to all outstanding awards on a retrospective basis, as well as to any new grants made under the applicable amended form of award agreement on a prospective basis.
5047
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
EXECUTIVE OFFICERS & COMPENSATION
Payments Uponupon Termination Ofof Employment
The following tables summarize the payments whichthat would be payable to our NEOs, as of December 31, 2015,2016, in the event of various termination scenarios, including voluntary resignation, involuntary termination for cause, involuntary termination (not for cause), involuntary termination for good reason or after a change in control, death and disability.
| GREG BECKER, PRESIDENT AND CHIEF EXECUTIVE OFFICER | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in-Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 910,000 | $ | 5,187,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 2,183,145 | - | 2,183,145 | 2,183,145 | 2,183,145 | 2,183,145 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 1,337,522 | 1,337,522 | 1,337,522 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 3,798,737 (5) | 2,654,205 (6) | 2,654,205 (6) | ||||||||||||||||||
Company-paid health benefits | - | - | 13,243 | 17,652 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 20,000 | 20,000 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable (7) | 171,890 | 171,890 | 171,890 | 171,890 | 171,890 | 171,890 | ||||||||||||||||||
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| |||||||||||||
TOTAL | $ | 2,355,035 | $ | 171,890 | $ | 3,298,278 | $ | 12,715,946 | $ | 6,346,762 | $ | 6,346,762 | ||||||||||||
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| |||||||||||||
| GREG BECKER, PRESIDENT AND CHIEF EXECUTIVE OFFICER | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in-Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 925,000 | $ | 5,550,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 6,688,933 | - | 6,688,933 | 6,688,933 | 6,688,933 | 6,688,933 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 3,737,744 | 3,737,744 | 3,737,744 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 9,184,153 | (5) | 6,649,593 | (6) | 6,649,593 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 13,258 | 13,502 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 20,000 | 20,000 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable (7) | 186,582 | 186,582 | 186,582 | 186,582 | 186,582 | 186,582 | ||||||||||||||||||
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| ||||||||||
TOTAL | $ | 6,875,515 | $ | 186,582 | $ | 7,833,773 | $ | 25,380,914 | $ | 17,262,852 | $ | 17,262,852 | ||||||||||||
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| ||||||||||
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (2) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of |
| (4) | The market value of unvested equity |
| (5) | The amount reported is comprised of |
| (6) | The amount reported is comprised of |
| (7) | Deferred Compensation Plan balance for Mr. Becker reflects account balance as of December 31, |
51
EXECUTIVE OFFICERS & COMPENSATION
| MICHAEL DESCHENEAUX, CHIEF FINANCIAL OFFICER | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 600,000 | $ | 1,920,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 1,493,059 | - | 1,493,059 | 1,493,059 | 1,493,059 | 1,493,059 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 738,309 | 738,309 | 738,309 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 1,678,749 | (5) | 1,209,927 | (6) | 1,209,927 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 20,613 | 26,671 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
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| ||||||||||
TOTAL | $ | 1,493,059 | $ | - | $ | 2,121,172 | $ | 5,864,288 | $ | 3,441,295 | $ | 3,441,295 | ||||||||||||
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| ||||||||||
| MICHAEL DESCHENEAUX, CHIEF FINANCIAL OFFICER | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 600,000 | $ | 2,040,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 3,403,417 | - | 3,403,417 | 3,403,417 | 3,403,417 | 3,403,417 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 1,621,800 | 1,621,800 | 1,621,800 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 3,763,989 | (5) | 2,774,712 | (6) | 2,774,712 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 20,628 | 21,007 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
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| ||||||||||
TOTAL | $ | 3,403,417 | $ | - | $ | 4,031,545 | $ | 10,857,713 | $ | 7,799,929 | $ | 7,799,929 | ||||||||||||
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| ||||||||||
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (2) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of |
48
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
| (4) | The market value of unvested equity |
| (5) | The amount reported is comprised of |
| (6) | The amount reported is comprised of |
| JOHN CHINA, HEAD OF RELATIONSHIP BANKING | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 480,000 | $ | 768,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 1,195,257 | - | 1,195,257 | 1,195,257 | 1,195,257 | 1,195,257 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 343,312 | 343,312 | 343,312 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 926,350 | (5) | 670,596 | (6) | 670,596 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 20,613 | 26,671 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
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| ||||||||||
TOTAL | $ | 1,195,257 | $ | - | $ | 1,703,370 | $ | 3,267,090 | $ | 2,209,165 | $ | 2,209,165 | ||||||||||||
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| MARC CADIEUX, CHIEF CREDIT OFFICER | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason AfterChange-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 450,000 | $ | 675,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 1,395,031 | - | 1,395,031 | 1,395,031 | 1,395,031 | 1,395,031 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 638,048 | 638,048 | 638,048 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 1,821,999 | (5) | 1,347,874 | (6) | 1,347,874 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 21,142 | 21,532 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
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| ||||||||||
TOTAL | $ | 1,395,031 | $ | - | $ | 1,873,673 | $ | 4,559,110 | $ | 3,380,953 | $ | 3,380,953 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (2) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of |
| (4) | The market value of unvested equity |
| (5) | The amount reported is comprised of |
| (6) | The amount reported is comprised of |
52
EXECUTIVE OFFICERS & COMPENSATION
| JOAN PARSONS, HEAD OF SPECIALTY BANKING | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 480,000 | $ | 768,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 368,995 | - | 368,995 | 368,995 | 368,995 | 368,995 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 397,873 | 397,873 | 397,873 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 917,433 | (5) | 661,679 | (6) | 661,679 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 20,613 | 26,671 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
TOTAL | $ | 368,995 | $ | - | $ | 877,108 | $ | 2,486,472 | $ | 1,428,547 | $ | 1,428,547 | ||||||||||||
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|
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|
|
| ||||||||||
| JOHN CHINA, HEAD OF TECHNOLOGY BANKING | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason AfterChange-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 500,000 | $ | 850,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 1,597,564 | - | 1,597,564 | 1,597,564 | 1,597,564 | 1,597,564 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 914,555 | 914,555 | 914,555 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 2,197,763 | (5) | 1,599,357 | (6) | 1,599,357 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 20,628 | 21,007 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
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|
|
|
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|
|
|
|
|
|
|
|
|
| ||||||||||
TOTAL | $ | 1,597,564 | $ | - | $ | 2,125,692 | $ | 5,588,389 | $ | 4,111,476 | $ | 4,111,476 | ||||||||||||
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|
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|
|
|
|
|
| ||||||||||
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (2) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
49
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of |
| (4) | The market value of unvested equity |
| (5) | The amount reported is comprised of |
| (6) | The amount reported is comprised of |
| BRUCE WALLACE, CHIEF DIGITAL OFFICER | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason After Change-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 402,866 | $ | 720,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 122,693 | - | 122,693 | 122,693 | 122,693 | 122,693 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 395,146 | 395,146 | 395,146 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 908,515 | (5) | 652,761 | (6) | 652,761 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 14,129 | 20,363 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
TOTAL | $ | 122,693 | $ | - | $ | 547,188 | $ | 2,174,217 | $ | 1,170,600 | $ | 1,170,600 | ||||||||||||
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| ||||||||||
| JOAN PARSONS, CREDIT RISK MANAGER (FORMER HEAD OF SPECIALTY BANKING) | ||||||||||||||||||||||||
Compensation and Benefits | Voluntary Resignation (including Retirement) | Involuntary Termination for Cause | Involuntary Termination (Not for Cause) (1) | Involuntary or for Good Reason AfterChange-in- Control (2) | Death | Disability | ||||||||||||||||||
Cash severance pay | $ | - | $ | - | $ | 500,000 | $ | 850,000 | $ | - | $ | - | ||||||||||||
Market value of vested, exercisable stock options (3) | 1,405,939 | - | 1,405,939 | 1,405,939 | 1,405,939 | 1,405,939 | ||||||||||||||||||
Market value of unvested stock options which would vest (4) | - | - | - | 881,149 | 881,149 | 881,149 | ||||||||||||||||||
Market value of unvested restricted stock which would vest (4) | - | - | - | 2,047,904 | (5) | 1,510,952 | (6) | 1,510,952 | (6) | |||||||||||||||
Company-paid health benefits | - | - | 15,110 | 15,389 | - | - | ||||||||||||||||||
Accelerated retirement plan vesting | - | - | - | - | - | - | ||||||||||||||||||
Company-paid outplacement benefits | - | - | 7,500 | 7,500 | - | - | ||||||||||||||||||
Deferred Compensation Plan balance payable | - | - | - | - | - | - | ||||||||||||||||||
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|
|
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|
|
|
| ||||||||||
TOTAL | $ | 1,405,939 | $ | - | $ | 1,928,549 | $ | 5,207,881 | $ | 3,798,040 | $ | 3,798,040 | ||||||||||||
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|
|
| ||||||||||
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under |
| (2) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under Involuntary or for Good Reason AfterChange-in-Control are calculated based on the terms of our Change in Control Severance Plan for Executives. Consistent with that plan, amounts reported are calculated assuming no tax adjustment. Under our 2006 Equity Incentive Plan, if outstanding equity awards are not assumed or substituted by the successor of the Company upon a |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of |
| (4) | The market value of unvested equity |
| (5) | The amount reported is comprised of |
| (6) | The amount reported is comprised of |
5350
| EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
EXECUTIVE OFFICERS & COMPENSATION
SECURITY OWNERSHIP INFORMATION
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding beneficial ownership as of the Record Date of our Common Stock by: (i) each of our directors and director nominees, (ii) each of the executive officers named in the “Summary Compensation Table” above, and (iii) all directors, director nominees and executive officers as a group. Unless otherwise noted and subject to applicable community property laws, the respective nominees have sole voting and investment power with respect to the shares shown in the table as beneficially owned.
| Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number of Shares | Percent of Class Owned | ||||||
Eric Benhamou (1) | * | % | ||||||
David Clapper (1) | * | |||||||
Roger Dunbar (2) | * | |||||||
Joel Friedman (1) | * | |||||||
Lata Krishnan (3) | * | |||||||
Jeffrey Maggioncalda (1) | * | |||||||
Mary Miller (1) | * | |||||||
Kate Mitchell (3) | 7,949 | * | ||||||
John Robinson (1) | * | |||||||
Garen Staglin (1) | * | |||||||
Greg Becker (4) | * | |||||||
Michael Descheneaux (5) | * | |||||||
Marc Cadieux (6) | 30,697 | * | ||||||
John China | * | |||||||
Joan Parsons | ||||||||
| * | |||||||
All directors, director nominees and executive officers as a group | | | * | |||||
| * | Represents beneficial ownership of less than 1%. |
| (1) | Includes |
| (2) | Includes |
| (3) | Does not include |
| (4) | Includes |
| (5) | Includes |
| (6) | Includes |
| (7) | Includes |
| (8) | Includes |
|
5451
| SECURITY OWNERSHIP INFORMATION Principal Stockholders |
SECURITY OWNERSHIP INFORMATION
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our Common Stock as of December 31, 20152016 by those we know to own more than 5% of our outstanding Common Stock, and is based upon Schedules 13D and 13G filed with the SEC. Applicable percentages are based on 51,610,22652,254,074 shares outstanding as of December 31, 2015.2016. We know of no persons other than those entities described below which beneficially own more than 5% of our outstanding Common Stock. Unless otherwise noted, the respective nominees have sole voting and investment power with respect to the shares shown in the table as beneficially owned.
| Shares Beneficially Owned | Shares Beneficially Owned | |||||||||||||||
Name and Address of Beneficial Owner | Number of Shares | Percent of Class Owned | Number of Shares | Percent of Class Owned | ||||||||||||
BlackRock, Inc. (1) 55 East 52nd Street New York, NY 10055 | 3,837,003 | 7.43 | % | 4,267,100 | 8.17 | % | ||||||||||
The Vanguard Group (2) 100 Vanguard Blvd. Malvern, PA 19355 | 3,544,825 | 6.87 | % | 3,930,352 | 7.52 | % | ||||||||||
Harding Loevner LP (3) 400 Crossing Blvd. Bridgewater, NJ 08807 | 2,659,081 | 5.09 | % | |||||||||||||
T. Rowe Price Associates, Inc. (4) 100 E. Pratt Street Baltimore, MD 21202 | 2,647,195 | 5.07 | % | |||||||||||||
| (1) | Information is based on figures set forth in |
| (2) | Information is based on figures set forth in |
| (3) | Information is based on figures set forth the in the Schedule 13G filed by Harding Loevner LP (“Harding Loevner”) filed on January 9, 2017. According to the Schedule 13G, Harding Loevner has sole voting power with respect to 2,659,081 shares. |
| (4) | Information is based on figures set forth in the Schedule 13G filed by T. Rowe Price Associates, Inc. (“T. Rowe Price”) filed on February 7, 2017. According to the Schedule 13G, T. Rowe Price, an investment advisor, has sole voting power with respect to 650,161 shares and sole dispositive power with respect to 2,647,195 shares. |
5552
| SECURITY OWNERSHIP INFORMATION Principal Stockholders |
SECURITY OWNERSHIP INFORMATION
OTHER PROXY PROPOSALS
APPROVAL OF AN AMENDMENT TO THE 1999 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors Recommends a Vote “For” the Approval of an Amendment to the 1999 Employee Stock Purchase Plan
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The stockholders are being asked to approve an amendment to the Company’s 1999 Employee Stock Purchase Plan (the “Purchase Plan”). A total of 3,000,000 shares of our Common Stock are currently authorized for sale under the Purchase Plan. The Purchase Plan is a significant part of our overall equity compensation strategy, especially with respect to our non-executive employees and is one of the primary programs through which our employees may achieve ownership in the Company and thereby share in the success of our Company. Therefore, the Board has approved an amendment to the Purchase Plan to increase the number of the Company’s Common Stock available for sale under the Purchase Plan by 1,500,000 shares to a total of 4,500,000 (as adjusted for stock splits) shares, subject to stockholder approval at the Meeting. The Purchase Plan is not being amended in any other material respect.
Background for Request
As of December 31, 2015 which is the last day of the most recently completed offering, there were 1,303 employees participating in the offering then in progress under the Purchase Plan and these employees purchased approximately 47,232 shares of our Common Stock (with an approximate value of $5,615,885 on the date of purchase) at a purchase price of $101.07 per share.
As of February 23, 2016, without giving effect to the proposed amendment, a total of 425,728 shares were available for sale under the Purchase Plan. If stockholders approve this proposal, the total number of shares authorized and reserved for sale under the Purchase Plan will be 4,500,000. Since adoption, approximately 2,574,272 shares have been issued under the Purchase Plan. Based on current forecasts, current stock price levels, and estimated participation rates, if the increase subject to this proposal is not approved, it is anticipated that the Purchase Plan will run out of available shares after the year 2017. The requested increase of 1,500,000 shares represents approximately 2.9% of the Company’s outstanding shares as of December 31, 2015.
56
OTHER PROXY PROPOSALS
In considering its recommendation to amend the Purchase Plan to reserve an additional 1,500,000 shares available for sale thereunder, the Board considered the historical number of shares of Company Common Stock purchased under the Purchase Plan in the past three years. In fiscal years 2013, 2014 and 2015, the number of shares purchased under the Purchase Plan was 176,416 shares, 130,110 shares and 140,471 shares, respectively. Although the Board considered the historical number of purchased shares when considering its recommendation, the actual number of shares that will be purchased under the Purchase Plan in any given year will depend on a number of factors, including the number of participants, the participant’s participation rates and the Company’s stock price. Based on participation in the most recently completed fiscal year and current stock price levels, an additional 1,500,000 shares is expected to meet the Company’s needs for at least four years, but the actual number of shares that will be purchased under the Purchase Plan will depend on the factors listed above.
Summary of the Company 1999 Employee Stock Purchase Plan
The following is a summary of the principal features of the Purchase Plan and its operation. The summary is qualified in its entirety by reference to the Purchase Plan as set forth in Appendix B.
General
The Purchase Plan originally was adopted by the Board in January 1999, originally was approved by our stockholders in April 1999 and was most recently approved by our stockholders on April 22, 2010. The Board, through its Compensation Committee, approved the amendment to increase the number of the Company’s Common Stock available for sale under the Purchase Plan by 1,500,000 shares on February 9, 2016, subject to and effective upon, stockholder approval at the Meeting. The purpose of the Purchase Plan is to provide a means by which employees of the Company and its designated affiliates may be given an opportunity to purchase Common Stock of the Company.
Shares Available for Issuance
If our stockholders approve this proposal, a total of 4,500,000 (as adjusted for stock splits) shares of our Common Stock will be subject to the Purchase Plan. As of February 23, 2016, after giving effect to the proposed amendment, a total of 1,925,728 shares would be actually available for sale under the Purchase Plan.
Administration
The Board administers the Purchase Plan unless and until the Board delegates administration to a committee appointed by the Board (in either case, the “Administrator”). Whether or not the Board has delegated administration, the Board has the final power to determine all questions of policy and expediency that may arise in the administration of the Purchase Plan. The Administrator has the power to construe and interpret the Purchase Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Purchase Plan, in a manner and to the extent it deems necessary or expedient to make the Purchase Plan fully effective. The Administrator may amend or terminate the Purchase Plan, subject to the Purchase Plan’s provisions. Generally, the Administrator may exercise such powers and perform such acts it deems necessary or expedient to promote the best interests of the Company and its affiliates and to carry out the intent that the Purchase Plan be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). Any interpretation of the Purchase Plan by the Administrator of any decision made by it under the Purchase Plan is final and binding on all persons.
Eligibility
Employees of the Company and its designated affiliates whose customary employment is at least twenty (20) hours per week and more than five (5) months in a calendar year are eligible to participate in the Purchase Plan; except that no employee will be granted an option under the Purchase Plan to the extent that, immediately after the grant, such employee would own five percent (5%) or more of the total combined voting power or value of all classes of the Company’s stock or the stock of any parent or subsidiary. The Administrator may require that an employee be in the employ of the Company or any affiliate for a continuous period of time preceding the grant of a right, but in no event will the required period of continuous employment be greater than two (2) years. Officers of the Company and any designated subsidiary who otherwise satisfy the eligibility requirements are eligible to participate in the Purchase Plan; provided, however, that the Administrator may provide that certain employees who are highly compensated employees within the meaning of Code Section 414(q) with compensation above a certain level or who is an officer or subject to the disclosure requirements under Section 16(a) of the U.S. Securities Exchange Act of 1934, as amended, will not be eligible to participate in the Purchase Plan. The Administrator has the authority to adjust eligibility requirements consistent with the terms of the Purchase Plan.
57
OTHER PROXY PROPOSALS
Notwithstanding the foregoing, no employee will be granted a right to purchase stock under all of the Company’s employee stock purchase plans that accrues at a rate which exceeds $25,000 worth of stock (determined at the fair market value of the shares at the time such right is granted) for each calendar year in which such rights are outstanding at any time. Subject to the limit in the previous sentence, the maximum aggregate number of shares that a participant may purchase during an offering is 3,000 shares.
As of February 23, 2016, approximately 2,050 employees, including all five of our named executive officers, were eligible to participate in the Purchase Plan. Non-employee members of the Board are not eligible to participate in the Purchase Plan.
Offerings
The Purchase Plan is implemented by offerings of rights to eligible employees. Each offering will be in such form and will contain such terms and conditions as the Administrator will deem appropriate, which will comply with Code Section 423(b)(5) that all employees granted rights to purchase stock in an offering will have the same rights and privileges. The provisions of separate offerings need not be identical. The Administrator will determine the duration of an offering period, provided that no offering period can exceed twenty-seven (27) months.
If an employee has more than one (1) right outstanding under the Purchase Plan, unless he or she indicates otherwise, a right with a lower exercise price (or an earlier-granted right if two (2) rights have identical exercise prices), will be exercised to the fullest possible extent before a right with a higher exercise price (or a later-granted right if two (2) rights have identical exercise prices) will be exercised.
Contributions
An eligible employee may become a participant in the Purchase Plan pursuant to an offering by delivering an enrollment agreement to the Company within the time period specified in the offering, in such form as the Company provides. Employees may authorize payroll deductions of up to 15% (the actual percentage to be determined by the Administrator) of such employee’s earnings during the offering.
Purchase Price
The purchase price for shares is the lesser of: (i) eighty-five percent (85%) of the fair market value of the Common Stock on the first date of the offering, or (ii) eighty-five percent (85%) of the fair market value of the Common Stock on the purchase date.
Payment of Purchase Price
On each purchase date, each participant’s accumulated contributions will be applied to the purchase of whole shares of Company Common Stock, up to the maximum number of shares permitted under the Purchase Plan and a given purchase period. No fractional shares will be issued.
Withdrawal
At any time during an offering, a participant may terminate his or her contributions under the Purchase Plan and withdraw from the offering by delivering to the Company a notice of withdrawal in such form as the Company provides. The withdrawal may be elected at any time prior to the end of the offering except as provided by the Administrator. Once a participant withdraws from an offering, the Company will distribute to the participant all of his or her accumulated contributions under the offering, without interest, and the participant’s interest in that offering will be automatically terminated. A participant’s withdrawal from an offering will have no effect upon his or her eligibility to participate in any other offerings under the Purchase Plan, but the participant will be required to deliver a new enrollment agreement in order to participate in subsequent offerings under the Purchase Plan.
Termination of Employment
Rights granted under the Purchase Plan terminate immediately upon cessation of a participant’s employment with the Company and any designated affiliate for any reason. Once a participant’s employment is terminated, the Company will distribute to such terminated employee all of his or her accumulated contributions under the offering without interest.
Adjustments upon Changes in Capitalization, Dissolution or Liquidation, or Change of Control
Changes in Capitalization.If any change is made in the stock subject to the Purchase Plan, or subject to any rights granted under the Purchase Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Purchase Plan and outstanding rights will be appropriately adjusted in the classes and maximum number of shares subject to the Purchase Plan and the classes and number of
58
OTHER PROXY PROPOSALS
shares and price per share of stock subject to outstanding rights. Such adjustments will be made by the Administrator, whose determination will be final, binding and conclusive. The conversion of any convertible securities of the Company will not be treated as a transaction not involving the receipt of consideration by the Company.
Dissolution, Liquidation, or Change in Control.In the event of the Company’s dissolution or liquidation or certain change in control transactions set forth in the Purchase Plan, then the Administrator in its sole discretion may take any of the following actions: (i) any surviving or acquiring corporation may assume outstanding rights or substitute similar rights for those under the Purchase Plan, (ii) such rights may continue in full force and effect, or (iii) all participants’ accumulated contributions may be used to purchase the Company’s Common Stock immediately prior to or within a reasonable period of time following the dissolution, liquidation or transaction, and the participants’ rights under the ongoing offering terminated.
Amendment and Termination of the Purchase Plan
Amendment.The Administrator may, at any time and from time to time, amend the Purchase Plan or the terms of one or more offerings. Certain amendments will not be effective unless stockholder approval is obtained within twelve (12) months before or after the amendment, including increasing the number of shares reserved under the Purchase Plan, modifying the eligibility provisions, and other modifications which require stockholder approval under Code Section 423 or Rule 16b-3. The Administrator may amend the Purchase Plan or an offering in any respect the Administrator deems necessary or advisable to provide eligible employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Purchase Plan and/or rights granted under an offering into compliance therewith. Amendments generally may not adversely affect any rights and obligations granted before the amendment, except with the consent of the affected participant, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Purchase Plan and/or rights granted under an offering comply with the requirements of Section 423 of the Code.
Termination. The Administrator in its discretion may suspend or terminate the Purchase Plan at any time. The Purchase Plan will automatically terminate if all the shares subject to the Purchase Plan are issued. No rights may be granted under the Purchase Plan while the Purchase Plan is suspended or after it is terminated. Rights and obligations under any rights granted while the Purchase Plan is in effect generally will not be impaired by suspension or termination of the Purchase Plan, except as expressly provided in the Purchase Plan, or with the consent of the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Purchase Plan and/or rights granted under an offering comply with the requirements of Section 423 of the Code.
Participation in Plan Benefits
Participation in the Purchase Plan is voluntary and is dependent on each eligible employee’s election to participate and his or her determination as to the level of payroll deductions or other contributions. Accordingly, future purchases under the Purchase Plan are not determinable. Non-employee directors are not eligible to participate in the Purchase Plan. For illustrative purposes, the following table sets forth (i) the number of shares of our Common Stock that were purchased during the last fiscal year under the Purchase Plan and (ii) the weighted average price per share paid for such shares.
Name of Individual or Group | Number of Shares Purchased | Weighted Average Per Share Purchase Price ($) | ||||||
Greg Becker | 217 | $ | 97.86 | |||||
Michael Descheneaux | 217 | 97.86 | ||||||
John China | 217 | 97.86 | ||||||
Joan Parsons | 217 | 97.86 | ||||||
Bruce Wallace | N/A | - | ||||||
All executive officers, as a group | 1,451 | 98.33 | ||||||
All directors who are not executive officers, as a group | N/A | - | ||||||
All employees who are not executive officers, as a group | 139,020 | 98.94 | ||||||
59
OTHER PROXY PROPOSALS
Certain U.S. Federal Income Tax Information
The following brief summary of the effect of U.S. federal income taxation upon the participant and the Company with respect to the shares purchased under the Purchase Plan does not purport to be complete, and does not discuss the tax consequences of a participant’s death or the income tax laws of any state or non-U.S. jurisdiction in which the participant may reside.
The Purchase Plan, and the right of participants to make purchases thereunder, is intended to qualify under the provisions of Sections 421 and 423 of the Code. Under these provisions, no income will be taxable to a participant until the shares purchased under the Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition of the shares, the participant generally will be subject to tax in an amount that depends upon the holding period. If the shares are sold or otherwise disposed of more than two (2) years from the first day of the applicable offering and one (1) year from the applicable date of purchase, the participant will recognize ordinary income measured as the lesser of (a) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price, or (b) 15% of the fair market value of the shares on the start date of that offering. Any additional gain will be treated as long-term capital gain. If the shares are sold or otherwise disposed of before the expiration of these holding periods, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares have been held from the date of purchase. The Company generally is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income recognized by participants upon a sale or disposition of shares prior to the expiration of the holding periods described above.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY UNDER THE PURCHASE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR NON-U.S. JURISDICTION IN WHICH THE PARTICIPANT MAY RESIDE.
Vote Required; Recommendation of Board of Directors
The approval of the amendment to the Purchase Plan requires the affirmative vote of the holders a majority of the Votes Cast on the proposal at the Meeting.
Our Board of Directors has approved this proposal and recommends that stockholders vote “FOR” the approval of the amendment to the Company’s 1999 Employee Stock Purchase Plan.
60
OTHER PROXY PROPOSALS
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors Recommends a Vote “For”“FOR” the Ratification of the Appointment
of KPMG LLP as the Company’s Independent Registered Public Accounting Firm
The Audit Committee has appointed the firm of KPMG LLP (“KPMG”) to be our independent registered public accounting firm for our 20162017 fiscal year. KPMG LLP has audited our financial statements since November 1994. While neither our Bylaws nor other governing documents require stockholder ratification of the selection of KPMG LLP as our independent registered public accounting firm, the Board is, based on the recommendation of the Audit Committee, submitting the appointment of KPMG LLP to the stockholders for ratification as a matter of good corporate practice. If theour stockholders do not ratify suchthe selection by the affirmative vote of the holders ofKPMG by a majority of the Votes Cast,votes present and entitled to vote on the matter, then the Audit Committee may reconsider its selection.
RepresentativesWe expect a representative from the firm of KPMG LLP willto be present at the Meeting andAnnual Meeting. The representative will be afforded the opportunity to make a statement if they desire to do so. They will alsoso and is expected to be available to respond to stockholders’stockholder questions.
PRINCIPAL AUDIT FEES AND SERVICES
The following table sets forth fees billed for services billedrendered by or expected to be billed by KPMG LLP for the fiscal years 20152016 and 2014,2015, all of which were approved by the Audit Committee in conformity with itspre-approval process:
| 2015 | 2014 | 2016 | 2015 | |||||||||||||
Audit fees | $ | 5,852,555 | $ | 5,139,121 | $ | 5,678,821 | $ | 5,852,555 | ||||||||
Audit-related fees (1) | 208,000 | 278,443 | 288,443 | 208,000 | ||||||||||||
Tax fees (2) | 551,328 | 663,184 | 1,228,565 | 551,328 | ||||||||||||
All other fees (3) | 15,371 | 115,000 | - | 15,371 | ||||||||||||
|
|
|
| |||||||||||||
Total | $ | 6,627,254 | $ | 6,195,748 | $ | 7,195,829 | $ | 6,627,254 | ||||||||
|
|
|
| |||||||||||||
| (1) | Consists principally of fees billed or expected to be billed as incurred on a time and material basis related to |
| (2) | Represents fees for services provided in connection with the Company’s tax compliance |
| (3) | Represents fees for advisory services relating to the Company’s ALLL vendor selection |
In accordance with its charter, the Audit Committee must explicitly approve the engagement of theour independent auditor for all audit and permissiblenon-audit related services, as required by law. To the extent permitted by applicable law, the charter also permits the Audit Committee the authority to adoptpre-approval policies and procedures and/or delegate authority to grant approvals to one or more of its members. During fiscal years 20152016 and 2014,2015, all audit andnon-audit related services performed by our independent auditorKPMG were approved orpre-approved by the Audit Committee. Additionally, the Audit Committee reviewed allnon-audit related services provided by our independent auditor,KPMG. In considering the nature of the services provided by KPMG, LLP. Thethe Audit Committee concludeddetermined that such services are compatible with the performanceprovision of these services did not compromiseindependent audit services. KPMG LLP’s independence in the conduct of its auditing function. KPMG LLP also confirmed theirits independence to the Audit Committee.
6153
| OTHER PROXY PROPOSALS Proposal 2 — Ratification of Auditor |
OTHER PROXY PROPOSALS
ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION
The Board of Directors Recommends a Vote “FOR”“FOR” the Approval of the Compensation of our Named Executive Officers, as Disclosed in this Proxy Statement
Pursuant toAt the recommendation2011 annual meeting of our Board,stockholders, our stockholders approved in 2011 the frequency ofvoted that our advisory vote to approve ouron executive compensation (otherwise known as “Say on Pay”) to be on an annual basis.held annually. Our Say on Pay vote provides our stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our NEOs as further described in the “Compensation Discussion and Analysis” section of this Proxy Statement, including the accompanying compensation tables and narrative discussion.discussion therein. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement.
We ask our stockholders to indicate their support for our executive compensation program for our NEOs and vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
Because your vote is advisory, it will not be binding upon the Board or the Compensation Committee and may not be construed as overruling any decision by the Board or the Compensation Committee. However, the Board and Compensation Committee may, in eachvalue the opinion of their sole discretion,our stakeholders and will take into serious consideration the outcome of thethis advisory vote when considering future executive compensation arrangements.
Stockholders are encouraged to carefully review the “Compensation Discussion and Analysis” and “Compensation for Named Executive Officers” sections of this Proxy Statement for a detailed discussion of our executive compensation program for our NEOs.
ADVISORY VOTE ON THE FREQUENCY OF FUTURE “SAY ON PAY” VOTES
OTHER PROXY PROPOSALSThe Board of Directors Recommends a Vote “FOR” the Frequency of our “Say on Pay” votes on an ANNUAL Basis
The Dodd-Frank Wall Street Reform and Consumer Protection Act provides stockholders with the opportunity to vote on how frequently we should seek an advisory vote, or Say on Pay, on the compensation of our NEOs, as disclosed pursuant to applicable SEC rules. Stockholders may indicate on anon-binding, advisory basis whether they prefer an advisory vote on NEO compensation on an annual (every one year), biennial (every two years) or triennial (every three years) basis.
After consideration of this proposal, our Board of Directors has determined that an annual Say on Pay advisory vote remains the most appropriate for the stockholders of the Company. Our Board values the opinions of our stockholders and believes that an annual advisory vote will continue to allow our stockholders to provide us with their direct input on our executive compensation program for our NEOs.
Accordingly, we ask our stockholders to indicate their preferred voting frequency by choosing the option of an annual advisory vote (every year), a biennial advisory vote (every two years) or a triennial advisory vote (every three years) or by choosing to abstain from voting on this proposal.
Because your vote is advisory, it will not be binding upon the Board and may not be construed as overruling any decision by the Board. However, the Board will take into account the outcome of the vote when considering how frequently to submit an advisory “Say on Pay” proposal for stockholder approval.
54
| OTHER PROXY PROPOSALS Say on Pay Proposals |
MEETING AND OTHER INFORMATION
INFORMATION ABOUT VOTING AND PROXY SOLICITATION
Voting
Holders of our Common Stockcommon stock are entitled to one vote for each share held on all matters covered by this Proxy Statement, except for the election of directors. With respect to the election of directors, each stockholder has the right to invoke cumulative voting, which entitles each stockholder to as many votes as shall equal the number of shares held by such stockholder, multiplied by the number of directors to be elected. A stockholderAccordingly, you may cast all of his or heryour votes for a single candidate or distribute suchyour votes among as many of the candidates as he or she chooses (upyou choose, up to a maximum of the number of directors to be elected).elected. However, no stockholder shallwill be entitled to cumulate votes for a candidate unless such candidate’s namecandidate has been properly placed in nominationnominated prior to the voting in accordance with Article Fifth of the Restated Certificate of Incorporation of the Company and the stockholder (or any other stockholder) has given notice at the meeting prior to the voting of the stockholder’s intention to cumulate votes. If any stockholder has given such notice, all stockholders may cumulate their votes for candidates properly placed in nomination. If cumulative voting is properly invoked, the Proxy holders (the individuals named on the Proxy Card) are given discretionary authority under the terms of the Proxy to cumulate votes represented by shares for which they are named Proxy holders as they see fit among the nominees in order to assure the election of as many of such nominees as possible.
Whether you hold shares in your name or through a broker, bank or other nominee, you may vote without attending the meeting.Annual Meeting. You may vote by granting a Proxy or, for shares held through a broker, bank or other nominee, by submitting voting instructions to that nominee. Instructions for voting by telephone, by using the Internet or by mail are on your Proxy Card or “Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting,”, as applicable. For shares held through a broker, bank or other nominee, follow the voting instructions included with your materials. If you provide specific voting instructions, your shares will be voted as you have instructed for any item on which you provide instructionseach proposal enumerated in this Proxy Statement and as the Proxy holdersHolders may determine within their discretion for any other matters including any additional matters, whichthat properly come before the meeting.
If you hold shares in your name and you sign and return a Proxy Card without giving specific voting instructions, your shares will be voted as recommended by our Board on all matters set forth in this Proxy Statement and as the Proxy holders may determine in their discretion with respect to any other matters that properly come before the meeting. If you hold your shares through a broker, bank or other nominee and you do not provide instructions on how to vote, your broker or other nominee may have authority to vote your shares on certain matters. SeeSee “Quorum; Abstentions; Broker Non-Votes” below.
“Quorum; Abstentions; BrokerNon-Votes”below.
Quorum; Abstentions; BrokerNon-Votes
The required quorum for the transaction of business at the Annual Meeting is a majority of the shares of Common Stock issued and outstanding on the Record Date. Shares voted are treated as being present at the meetingAnnual Meeting for purposes of establishing a quorum and are also treated as shares “represented and voting”present at the Annual Meeting (the “Votes Cast”) with respect to such matter.
We count abstentionsExcept in the case of the election of directors and the advisory approval on Say on Pay frequency as described above, adoption of the proposals requires the affirmative vote the holders of a majority of the Common Stock represented and entitled to vote on the matter. This means that of the shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted “for” the proposal for it to be approved. Abstentions will be deemed present for purposes of determining both (i) the presence or absence of a quorum for the transaction of business and (ii) the total number of Votes Cast with respect to a proposal (other than Proposal No. 1 regarding the election of directors). Accordingly, in cases other than the election of directors, abstentions will have the same effect as a vote against the proposal.proposal, except for the election directors and the advisory approval on Say on Pay frequency.
Brokernon-votes occur on a matter when a broker, bank or other nominee is not permitted to vote on that matter without instructions from the beneficial owner and the beneficial owner does not give instructions. Without such voting instructions, for example, your broker or other nominee cannot vote your shares on “non-routine”“non-routine” matters such as the election of directors, and the advisory votevotes on Say on Pay.Pay and Say on Pay Frequency. Your broker or other nominee may, however, have discretion to vote your shares on “routine” matters, such as the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our 20162017 fiscal year. Brokernon-votes will be counted for purposes of determining the presence or absence of a quorum for the transaction of business but will not be counted for purposes of determining the number of Votes Castthe votes represented and entitled to vote with respect to proposals on which brokers, banks or other nominees are prohibited from exercising their discretionary authority.
6355
| MEETING & OTHER INFORMATION Voting And Proxy Solicitation |
MEETING & OTHER INFORMATION
Voting Required
The vote required for each proposal and the effect of uninstructed shares and abstentions on each proposal is as follows:
Proposal | Vote Required | Broker Non- | Abstentions | You May Vote | ||||
| Proposal No. 1 - Election of Directors | Plurality of Votes Cast* | No | No Effect | FOR or WITHHOLD | ||||
| Proposal No. 2 | Majority of Votes | Yes | Vote Against | FOR, AGAINST or ABSTAIN | ||||
| Proposal No. 3- Advisory Vote on Say on Pay | Majority of Votes Present and Entitled to Vote | No | Vote Against | FOR, AGAINST or ABSTAIN | ||||
| Proposal No. | ||||||||
| No | ||||||||
* See “Majority Voting Policy” under “Proposal No. 1 – Election of Directors.”
Revocability of Proxies
Any person giving a Proxy in the form accompanying this Proxy Statement has the power to revoke the Proxy at any time prior to its use. A Proxy is revocable prior to the Annual Meeting by delivering either a written instrument revoking it or a duly executed Proxy bearing a later date to our Corporate Secretary or Assistant Corporate Secretary. A Proxy is also automatically revoked if the stockholder is present at the Annual Meeting and votes in person.
Solicitation
This solicitation of Proxies is made by, and on behalf of, our Board. We will bear the entire cost of preparing, assembling, printing, mailing and otherwise making available Proxy materials furnished by the Board to stockholders. Copies of Proxy materials will be furnished to brokerage houses, fiduciaries and custodians to be forwarded to the beneficial owners of our Common Stock, as requested. In addition to the solicitation of Proxies by mail, some of our officers, directors and employees may (without additional compensation) solicit Proxies by telephone or personal interview, the costs of which we will bear.
Unless otherwise instructed, each valid returned Proxy that is not revoked will be voted:
“FOR” each of our nominees to the Board of Directors,
“FOR” approval of the amendment of the 1999 Employee Stock Purchase Plan,
“FOR” ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2016,2017,
| • | “FOR” approval, on an advisory basis, of our executive compensation (“Say on Pay”), |
Approval, on an advisory basis, of the frequency of future Say on Pay votes to be held ANNUALLY, and
At the Proxy holders’ discretion on such other matters, if any, as may properly come before the Annual Meeting (including any proposal to adjourn the Annual Meeting).
Delivery of Proxy Materials
In accordance with the rules adopted by the Securities and Exchange Commission (the “SEC,”), commonly referred to as “Notice and Access,” we have decided to provide access to our Proxy materials over the internetInternet instead of mailing a printed copy of the materials to every stockholder. StockholdersWe believe this helps to promote more cost-effective and efficient delivery of our Proxy materials to stockholders while reducing our environmental impact. As a result, you will not receive printed copies of the Proxy materials unless theyyou request them. Instead, a Notice Regarding the Availability of Proxy Materials (the “Notice”) was mailed to stockholders of record (other than stockholders
56
| MEETING & OTHER INFORMATION Voting And Proxy Solicitation |
who previously requested electronic or paper delivery of proxy materials) on or about March 10, 2016.9, 2017. The Notice explains the process to access and review the information contained in the Proxy materials and how to vote their proxies over the internet.Internet. In addition, the Notice will provide you the option to instruct us to send our future Proxy materials to you electronically by email. All stockholders will have the ability toYou may also access the Proxy materials on athe website referred to in the Notice or request to receive a printed set of the Proxy materials.
64
MEETING & OTHER INFORMATION
For those stockholders whoIf you will receive printed copies of the Proxy materials, upon request or otherwise, you may receive more than one set of materials, including multiple copies of this Proxy Statement and multiple Proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one Proxy Card. Please follow the instructions on your Proxy Card(s) and vote accordingly.
How to Obtain a Separate Set of Proxy Materials
Stockholders
You may request to receive Proxy materials in printed form by mail or electronically by email on an ongoing basis. Stockholders whoIf you sign up to receive Proxy materials electronically, you will receive an email with links to the materials, which may give them faster delivery of the materials and will help save printing and mailing costs and conserve natural resources.materials. If you choose to receive future Proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy votingproxy-voting site. Your election to receive Proxy materials by email will remain in effect until you terminate it.
For those stockholders whoIf you share an address with another stockholder, you may receive only one set of Proxy materials (including our 20152016 Annual Report onForm 10-K, Proxy Statement or Notice Regarding the Availability of Proxy Materials, as applicable) unless you have provided contrary instructions. If you wish to receive a separate set of Proxy materials now or in the future, you may write or call us to request a separate copy of these materials from:
SVB Financial Group
3003 Tasman Drive
Santa Clara, California 95054
Attention: Kristi GilbaughCorporate Secretary
Telephone:(408) 654-7400
Facsimile: 408-969-6500(408)969-6500
Email: kgilbaugh@svb.combod@svb.com
Similarly, if you share an address with another stockholder and have received multiple copies of our Proxy materials, you may write or call us at the above address and phone number to request delivery of a single copy of these materials.
6557
| MEETING & OTHER INFORMATION Voting And Proxy Solicitation |
MEETING & OTHER INFORMATION
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
You may submit proposals, including director nominations, for consideration at future stockholder meetings.
Stockholder Proposals
For a stockholder proposal to be considered for inclusion in our Proxy Statement for the annual meeting next year, the written proposal must be received by our Corporate Secretary at our principal executive offices no later than November 12, 2016.9, 2017. If the date of next year’s annual meeting is moved more than 30 days before or after the anniversary date of this year’s annual meeting, the deadline for inclusion of proposals in the Company’s Proxy Statement is instead a reasonable time before SVB Financial Group begins to print and mail its Proxy materials for the annual meeting next year. Such proposals will need to comply with the SEC regulations underRule 14a-8 regarding the inclusion of stockholder proposals in Company-sponsored proxy materials. Proposals should be addressed to:
Corporate Secretary
SVB Financial Group
3003 Tasman Drive
Santa Clara, California 95054
Facsimile: (408)969-6500
For a stockholder proposal that is not intended to be included in our Proxy Statement underRule 14a-8, the stockholder must deliver a Proxy Statement and form of Proxy to holders of a sufficient number of shares of our Common Stock to approve that proposal, provide the information required by our Bylaws and give timely notice to our Corporate Secretary in accordance with our Bylaws. In general, our Bylaws require that the notice be received by our Corporate Secretary:
Not earlier than the close of business on December 26, 2016,24, 2017, and
Not later than the close of business on January 25, 2017.23, 2018.
However, if the date of the stockholder meeting is moved more than 30 days before or 60 days after the first anniversary of our annual meeting for the prior year, then notice of a stockholder proposal that is not intended to be included in our Proxy Statement underRule 14a-8 must be received no earlier than the close of business 120 days prior to the meeting and no later than the close of business on the later of the following two dates:
90 days prior to the meeting, and
10 days after public announcement of the meeting date.
Nomination of Director Candidates
You may propose director candidates for consideration by the Board’s Governance Committee. Any such recommendations should include the nominee’s name and qualifications for Board membership and should be directed to our Corporate Secretary at the address of our principal executive offices set forth above. In addition, our Bylaws permit stockholders to nominate directors for election at an annual stockholder meeting. To nominate a director, the stockholder must deliver a Proxy Statement and form of Proxy to holders of a sufficient number of shares of our Common Stock to elect such nominee and provide the information required by our Bylaws, as well as a statement by the nominee acknowledging that he or she will owe a fiduciary obligation to us and its stockholders. In addition, the stockholder must give timely notice to our Corporate Secretary in accordance with our Bylaws, which, in general, require that the notice be received by our Corporate Secretary within the time period described above under “Stockholder Proposals.”
6658
| MEETING & OTHER INFORMATION Stockholder Proposals and Nominations |
MEETING & OTHER INFORMATION
You may contact our Corporate Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates. Our Bylaws also are available through the SEC’s website atwww.sec.gov.
Stockholders who wish to obtain copies of our Annual Report onForm 10-K for the year ended December 31, 2015,2016, without charge, should address a written request to Kristi Gilbaugh,Attention: Corporate Secretary, SVB Financial Group, 3003 Tasman Drive, Santa Clara, California 95054 (Facsimile: (408)969-6500). The report is also available electronically atwww.svb.com/proxy.(The contents of the website are not incorporated herein by reference and the website address provided above and throughout this Proxy Statement is intended to be an inactive textual reference only.)
The Board knows of no other matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual Meeting, the Board intends that the persons named in the proxies will vote upon such matters in accordance with their best judgment.
6759
| MEETING & OTHER INFORMATION Bylaw Provisions and Annual Report |
MEETING & OTHER INFORMATION
SVB FINANCIAL GROUP
RECONCILIATIONOF CERTAINGAAPTO NON-GAAP FINANCIAL INFORMATION
The following table provides a summary ofnon-GAAP core fee income, for the year ended December 31, 2015:2016:
(Dollars in thousands) | Year ended December 31, 2016 | |||||||
GAAP noninterest income | $ | 456,552 | ||||||
Less: gains on investment securities, net | 51,740 | |||||||
Less: gains on derivative instruments, net | 48,581 | |||||||
Less: other noninterest income | 40,061 | |||||||
| 2015 |
| |||||||
Noninterest income | ||||||||
Non-GAAP core fee income (1) | $ | 316,170 | ||||||
| ||||||||
Non-GAAP core fee income (1): | ||||||||
Foreign exchange fees | $ | 87,007 | $ | 104,183 | ||||
Credit card fees | 56,657 | 68,205 | ||||||
Deposit service charges | 46,683 | 52,524 | ||||||
Lending related fees (2) | 32,536 | |||||||
Lending related fees | 33,395 | |||||||
Client investment fees | 21,610 | 32,219 | ||||||
Letters of credit and standby letters of credit fees | 20,889 | 25,644 | ||||||
|
| |||||||
Total non-GAAP core fee income | 265,382 | |||||||
Total non-GAAP core fee income (1) | $ | 316,170 | ||||||
|
| |||||||
Gains on investment securities, net | 89,445 | |||||||
Gains on derivative instruments, net | 83,805 | |||||||
Other | 34,162 | |||||||
| ||||||||
GAAP noninterest income | $ | 472,794 | ||||||
| ||||||||
| (1) | Thisnon-GAAP measure represents noninterest income, but excludes certain line items where performance is typically subject to market or other conditions beyond our control. |
|
In discussing our financial performance, we use certainnon-GAAP measures. These supplemental performance measures may vary from, and may not be comparable to, similarly titled measures by other companies in our industry.Non-GAAP financial measures are not in accordance with or an alternative for, GAAP. Generally, anon-GAAP financial measure is a numerical measure of a company’s performance that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Anon-GAAP financial measure may also be a financial metric that is not required by GAAP or other applicable requirement.
Specifically in this Proxy Statement, we report ournon-GAAP core fee income, which is a part of our noninterest income, as reported in accordance with GAAP. We believe thisnon-GAAP financial measure, when taken together with the corresponding GAAP financial measures (as applicable), provides meaningful supplemental information regarding our performance by excluding from our noninterest income certain line items where performance is typically subject to market or other conditions beyond our control, such as gains (losses) on investment securities, net, gains (losses) on derivative instruments, net, and derivative instruments.other noninterest income items. We use, and believe our investors benefit from referring to, ournon-GAAP core fee income in assessing our overall operating results, forecasting and analyzing future periods.
Non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, financial measures prepared in accordance with GAAP.
A-1
APPENDICES
SVB FINANCIAL GROUP
1999 EMPLOYEE STOCK PURCHASE PLAN
(As Amended Most Recently by the Compensation Committee of the Board of Directors as of February 9, 2016)
|
Non-GAAP Reconciliation Table |
(a) The purpose of this 1999 Employee Stock Purchase Plan (the “Plan”) is to provide a means by which employees of SVB Financial Group (formerly Silicon Valley Bancshares), a Delaware corporation (the “Company”), and its Affiliates, as defined in subparagraph 1(b), which are designated as provided in subparagraph 2(b), may be given an opportunity to purchase stock of the Company. This 1999 Employee Stock Purchase Plan is intended to replace the Silicon Valley Bancshares 1988 Employee Stock Purchase Plan.
(b) The word “Affiliate” as used in the Plan means any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the “Code”).
(c) The Company, by means of the Plan, seeks to retain the services of its employees, to secure and retain the services of new employees, and to provide incentives for such persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the rights to purchase stock of the Company granted under the Plan be considered options issued under an “employee stock purchase plan” as that term is defined in Section 423(b) of the Code.
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(a) The Plan shall be administered by the Board of Directors (the “Board”) of the Company unless and until the Board delegates administration to a Committee, as provided in subparagraph 2(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the Company shall be granted and the provisions of each offering of such rights (which need not be identical).
(ii) To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan and any particular Offering.
(iii) To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the intent that the Plan be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Code.
(c) The Board may delegate administration of the Plan to a Committee composed of one (1) or more members of the Board (the “Committee”). If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.
(d) Any interpretation of the Plan by the Board of any decision made by it under the Plan shall be final and binding on all persons.
B-1
APPENDICES
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(a) Subject to the provisions of paragraph 12 relating to adjustments upon changes in stock, the stock that may be sold pursuant to rights granted under the Plan shall not exceed in the aggregate four million five hundred thousand (4,500,000) shares of the Company’s Common Stock (the “Common Stock”). If any right granted under the Plan shall for any reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for the Plan.
(b) The Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.
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(a) The Board or the Committee may from time to time grant or provide for the grant of rights to purchase Common Stock of the Company under the Plan to eligible employees (an “Offering”) on a date or dates (the “Offering Date(s)”) selected by the Board or the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all employees granted rights to purchase stock pursuant to the Offering shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in paragraphs 5 through 8, inclusive.
(b) If an employee has more than one (1) right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder, a right with a lower exercise price (or an earlier-granted right if two (2) rights have identical exercise prices), will be exercised to the fullest possible extent before a right with a higher exercise price (or a later-granted right if two (2) rights have identical exercise prices) will be exercised.
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(a) Rights may be granted only to employees of the Company or, as the Board or the Committee may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company. Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate shall not be eligible to be granted rights under the Plan unless, on the Offering Date, such employee has been in the employ of the Company or any Affiliate for such continuous period preceding such grant as the Board or the Committee may require, but in no event shall the required period of continuous employment be greater than two (2) years. In addition, unless otherwise determined by the Board or the Committee and set forth in the terms of the applicable Offering, no employee of the Company or any Affiliate shall be eligible to be granted rights under the Plan unless, on the Offering Date, such employee’s customary employment with the Company or such Affiliate is for at least twenty (20) hours per week and at least five (5) months per calendar year.
(b) The Board or the Committee may provide that each person who, during the course of an Offering, first becomes an eligible employee of the Company or designated Affiliate will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an eligible employee or occurs thereafter, receive a right under that Offering, which right shall thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics as any rights originally granted under that Offering, as described herein, except that:
(i) the date on which such right is granted shall be the “Offering Date” of such right for all purposes, including determination of the exercise price of such right;
(ii) the period of the Offering with respect to such right shall begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board or the Committee may provide that if such person first becomes an eligible employee within a specified period of time before the end of the Offering, he or she will not receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights under the Plan if, immediately after any such rights are granted, such employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any employee, and stock which such employee may purchase under all outstanding rights and options shall be treated as stock owned by such employee.
B-2
APPENDICES
(d) An eligible employee may be granted rights under the Plan only if such rights, together with any other rights granted under “employee stock purchase plans” of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase stock of the Company or any Affiliate to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of fair market value of such stock (determined at the time such rights are granted) for each calendar year in which such rights are outstanding at any time.
(e) Officers of the Company and any designated Affiliate shall be eligible to participate in Offerings under the Plan; provided, however, that the Board or the Committee may provide in an Offering that highly compensated employees within the meaning of Section 414(q) of the Code shall not be eligible to participate. In this respect, the Board or the Committee may exclude highly compensated employees with compensation above a certain level or who are officers or subject to the disclosure requirements of Section 16(a) of the Securities Act of 1934, as amended, provided the exclusion is applied with respect to each particular Offering in an identical manner to all highly compensated employees the Company and every Affiliate whose employees are participating in that Offering.
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(a) On each Offering Date, each eligible employee, pursuant to an Offering made under the Plan, shall be granted the right to purchase up to the number of shares of Common Stock of the Company purchasable with a percentage designated by the Board or the Committee not exceeding fifteen percent (15%) of such employee’s Earnings (as defined in subparagraph 7(a)) during the period which begins on the Offering Date (or such later date as the Board or the Committee determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering. The Board or the Committee shall establish one (1) or more dates during an Offering (the “Purchase Date(s)”) on which rights granted under the Plan shall be exercised and purchases of Common Stock carried out in accordance with such Offering.
(b) In connection with each Offering made under the Plan, the Board or the Committee may specify a maximum number of shares that may be purchased by any employee as well as a maximum aggregate number of shares that may be purchased by all eligible employees pursuant to such Offering. Unless the Board or the Committee provide otherwise prior to the commencement of an Offering, no employee will be permitted to purchase more than 3,000 shares of Common Stock during an Offering. In addition, in connection with each Offering that contains more than one (1) Purchase Date, the Board or the Committee may specify a maximum aggregate number of shares which may be purchased by all eligible employees on any given Purchase Date under the Offering. If the aggregate purchase of shares upon exercise of rights granted under the Offering would exceed any such maximum aggregate number, the Board or the Committee shall make a pro rata allocation of the shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable.
(c) The purchase price of stock acquired pursuant to rights granted under the Plan shall be not less than the lesser of: (i) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Offering Date; or (ii) an amount equal to eighty-five percent (85%) of the fair market value of the stock on the Purchase Date.
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(a) An eligible employee may become a participant in the Plan pursuant to an Offering by delivering an enrollment agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board or the Committee of such employee’s Earnings during the Offering. “Earnings” is defined as an employee’s regular salary or wages (including amounts thereof elected to be deferred by the employee, that would otherwise have been paid, under any arrangement established by the Company that is intended to comply with Section 125, Section 401(k), Section 402(e)(3), Section 402(h) or section 403(b) of the Code, and also including any deferrals under a non-qualified deferred compensation plan or arrangement established by the Company), and also, if determined by the Board or the Committee and set forth in the terms of the Offering, may include any or all of the following: (i) overtime pay, (ii) commissions, (iii) bonuses, incentive pay, profit sharing and other remuneration paid directly to the employee, and/or (iv) other items of remuneration not specifically excluded pursuant to the Plan. Earnings shall not include the cost of employee benefits paid for by the Company or an Affiliate, education or tuition reimbursements, imputed income arising under any group insurance or benefit program, traveling expenses, business and moving expense reimbursements, income received in connection with stock options or other equity awards, contributions made by the Company or an Affiliate under any employee benefit plan, and similar items of compensation, as determined by the Board or the Committee. Notwithstanding the foregoing, the Board or Committee may modify the definition of “Earnings” with respect to one or more Offerings as the Board or Committee determines appropriate. The payroll deductions made for each participant shall be credited to an account for such participant under the Plan and shall be deposited with the general funds of the Company. A participant
B-3
APPENDICES
may reduce (including to zero) or increase such payroll deductions, and an eligible employee may begin such payroll deductions, after the beginning of any Offering only as provided for in the Offering. A participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the participant has not had the maximum amount withheld during the Offering.
(b) At any time during an Offering, a participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board or the Committee in the Offering. Upon such withdrawal from the Offering by a participant, the Company shall distribute to such participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the participant) under the Offering, without interest, and such participant’s interest in that Offering shall be automatically terminated. A participant’s withdrawal from an Offering will have no effect upon such participant’s eligibility to participate in any other Offerings under the Plan but such participant will be required to deliver a new enrollment agreement in order to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating employee’s employment with the Company and any designated Affiliate, for any reason, and the Company shall distribute to such terminated employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the terminated employee), under the Offering, without interest.
(d) Rights granted under the Plan shall not be transferable by a participant other than by will or the laws of descent and distribution, or by a beneficiary designation as provided in paragraph 14, and during a participant’s lifetime, shall be exercisable only by such participant.
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(a) On each Purchase Date specified therefor in the relevant Offering, each participant’s accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of whole shares of stock of the Company, up to the maximum number of shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon the exercise of rights granted under the Plan. The amount, if any, of accumulated payroll deductions remaining in each participant’s account after the purchase of shares which is less than the amount required to purchase one share of Common Stock on the final Purchase Date of an Offering shall be held in each such participant’s account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering, as provided in subparagraph 7(b), or is no longer eligible to be granted rights under the Plan, as provided in paragraph 5, in which case such amount shall be distributed to the participant after such final Purchase Date, without interest. The amount, if any, of accumulated payroll deductions remaining in any participant’s account after the purchase of shares which is equal to the amount required to purchase one or more whole shares of Common Stock on the final Purchase Date of an Offering shall be distributed in full to the participant after such Purchase Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent unless the shares to be issued upon such exercise under the Plan (including rights granted thereunder) are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the Plan is in material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan is not so registered or in such compliance, no rights granted under the Plan or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If on the Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not registered and in such compliance, no rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire stock) shall be distributed to the participants, without interest.
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(a) During the terms of the rights granted under the Plan, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such rights.
B-4
APPENDICES
(b) The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such rights unless and until such authority is obtained.
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Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute general funds of the Company.
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A participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to rights granted under the Plan unless and until the participant’s shareholdings acquired upon exercise of rights under the Plan are recorded in the books of the Company (or its transfer agent).
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(a) If any change is made in the stock subject to the Plan, or subject to any rights granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan and outstanding rights will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the class(es) and number of shares and price per share of stock subject to outstanding rights. Such adjustments shall be made by the Board or the Committee, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a “transaction not involving the receipt of consideration by the Company.”)
(b) In the event of: (1) a dissolution or liquidation of the Company; (2) a sale of all or substantially all of the assets of the Company; (3) a merger or consolidation in which the Company is not the surviving corporation; (4) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; (5) the acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any Affiliate of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors; or (6) the individuals who, as of the date of the adoption of this Plan, are members of the Board (the “Incumbent Board”; (if the election, or nomination for election by the Company’s stockholders, of a new director was approved by a vote of at least fifty percent (50%) of the members of the Board then comprising the Incumbent Board, such new director shall upon his or her election be considered a member of the Incumbent Board) cease for any reason to constitute at least fifty percent (50%) of the Board; then the Board in its sole discretion may take any action or arrange for the taking of any action among the following: (i) any surviving or acquiring corporation may assume outstanding rights or substitute similar rights for those under the Plan, (ii) such rights may continue in full force and effect, or (iii) all participants’ accumulated payroll deductions may be used to purchase Common Stock immediately prior to or within a reasonable period of time following the transaction described above and the participants’ rights under the ongoing Offering terminated.
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(a) The Board at any time, and from time to time, may amend the Plan or the terms of one or more Offerings. However, except as provided in paragraph 12 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will:
(i) Increase the number of shares reserved for rights under the Plan;
(ii) Modify the provisions as to eligibility for participation in the Plan or an Offering (to the extent such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3 promulgated under the Exchange Act, or any comparable successor rule (“Rule 16b-3”); or
B-5
APPENDICES
(iii) Modify the Plan or an Offering in any other way if such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3.
It is expressly contemplated that the Board or the Committee may amend the Plan or an Offering in any respect the Board or the Committee deems necessary or advisable to provide eligible employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Plan and/or rights granted under an Offering into compliance therewith.
(b) The Board may, in its sole discretion, submit any amendment to the Plan or an Offering for stockholder approval.
(c) Rights and obligations under any rights granted before amendment of the Plan or Offering shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Plan and/or rights granted under an Offering comply with the requirements of Section 423 of the Code.
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(a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if applicable, from the participant’s account under the Plan in the event of such participant’s death subsequent to the end of an Offering but prior to delivery to the participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death during an Offering.
(b) Such designation of beneficiary may be changed by the participant at any time by written notice in the form prescribed by the Company. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living (or if an entity, is otherwise in existence) at the time of such participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares and/or cash to the spouse or to any one (1) or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may determine.
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(a) The Board or the Committee in its discretion may suspend or terminate the Plan at any time. The Plan shall automatically terminate if all the shares subject to the Plan pursuant to subparagraph 3(a) are issued. No rights may be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except as expressly provided in the Plan or with the consent of the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Plan and/or rights granted under an Offering comply with the requirements of Section 423 of the Code.
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The Plan shall become effective on the same day on which the Company’s shareholders approve the Plan pursuant to vote of the shareholders held at the duly noticed Annual Shareholders Meeting in 1999.
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All questions concerning the construction, validity and interpretation of this Plan shall be governed by the law of the State of California, without regard to such state’s conflict of laws rules.
* * * *
B-6
APPENDICES
svb
SVB FINANCIAL GROUP 3003 TASMAN DRIVE SANTA CLARA, CA 95054
VOTE BY INTERNET—INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m.P.M. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE—PHONE -1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m.P.M. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E01547-P71472
E17091-P85507
KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DETACH AND RETURN THIS PORTION ONLY
SVB FINANCIAL GROUP The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: 01) Greg W. Becker 02) Eric A. Benhamou 03) David M. Clapper 04) Roger F. Dunbar 05) Joel P. Friedman 06) Lata Krishnan 07) Jeffrey N. Maggioncalda 08) Mary J. Miller 09) Kate D. Mitchell 10) John F. Robinson 11) Garen K. Staglin For All Withhold All Except For All Except
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
The Board of Directors recommends you vote FOR the following proposals: following:
1. Election of Directors
Nominees:
01) Greg W. Becker 07) Jeffrey N. Maggioncalda
02) Eric A. Benhamou 08) Mary J. Miller
03) David M. Clapper 09) Kate D. Mitchell
04) Roger F. Dunbar 10) John F. Robinson
05) Joel P. Friedman 11) Garen K. Staglin
06) Lata Krishnan
The Board of Directors recommends you vote FOR Proposals 2 and 3: For Against Abstain
2. To approve an amendment to our 1999 Employee Stock Purchase Plan to reserve an additional 1,500,000 shares for issuance thereunder. 3. To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for its fiscal year ending December 31, 2016. 4.2017.
3. To approve, on an advisory basis, our executive compensation. For Againstcompensation (“Say on Pay”).
The Board of Directors recommends you vote 1 YEAR on Proposal 4: 1 Year 2 Years 3 Years Abstain
4. To approve, on an advisory basis, the frequency of future Say on Pay votes.
To cumulate votes as to a particular nominee as explained in the Proxy Statement, check box to the right then indicate the name(s) and the number of votes to be given to such nominee(s) on the reverse side of this card. Please do not check box unless you want to exercise cumulative voting.
Please indicate if you plan to attend this meeting.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement Annual Letter to Stockholders from the Chief Executive Officer and Board Chairman, and 20152016 Form10-K Annual Report are available at www.proxyvote.com. E01548-P71472
E17092-P85507
SVB FINANCIAL GROUP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING ON APRIL 21, 2016 27, 2017
The undersigned appoints GREG W. BECKER and MICHAEL S. ZUCKERT, or either of them, with full power of substitution for himself, as the proxy holder of the undersigned to vote and otherwise represent all of the shares registered in the name of the undersigned at the Annual Meeting of Stockholders of SVB Financial Group to be held on Thursday, April 21, 2016,27, 2017, at 4:30 p.m. local time, at the Company’s offices located at 3005 Tasman Drive, Santa Clara, California 95054 and any postponements or adjournments thereof, with the same effect as if the undersigned were present and voting such shares, on the matters and manner listed on the reverse side. If the undersigned holds shares in its name, and signs and returns this proxy card without giving specific voting instructions, the undersigned’s shares will be voted as recommended by the Company’s Board on each of the matters listed on the reverse side and as the proxy holders may determine in their discretion with respect to any other matters that properly come before the meeting.
Cumulative voting (Complete only if applicable) NAME OF CANDIDATE # OF VOTES CAST
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 (If
NAME OF CANDIDATE
# OF VOTES CAST
(If you exercised cumulative voting, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
svb
Financial Group
SVB 2015 | Letter to stockholders and partners
Year in review: 2015 Letter to stockholders and partners
To our stockholders and partners,
2015 was a strong year for SVB Financial Group, thanks to our dynamic client base and our effective execution. We delivered outstanding financial results, fueled growth across the business, expanded our client base and strengthened our market leadership. Our ongoing commitment to the innovation economy is the foundation of this success. Serving our clients and focusing on solid execution allowed us to outperform expectations while building momentum for long-term growth. In the face of low interest rates and intense competition, SVB delivered industry-leading growth and profitability, growing earnings per share by 25 percent and average assets by 24 percent.
Strong market position
We grew our net client count by 18 percent, and this strong client acquisition fueled our success. We continued to add early-stage clients at a rapid pace and made steady gains among fast-growing midsize firms and global enterprises. We also focused on growing our relationships with existing clients by adding value and winning their loyalty throughout their life cycles. Many of our current later-stage clients came to us as startups. Another area of focus was our relationships with innovation economy investors, particularly private equity firms. Those relationships drove approximately 50 percent of average loan growth in 2015 and contributed to strong fee income growth as well. Finally, our Private Bank and Wealth Advisory practices gained meaningful
corporates, and mainstream institutional fund managers. Many of these high-growth companies have been disrupting entire industries and delivering impressive customer and revenue traction. Although M&A and IPOs among venture- backed companies slowed compared with last year’s blockbuster pace and dollars, our clients continued to see relatively healthy activity, which contributed to strong venture capital-related gains for SVB.
Enhancing our business
In 2015, we continued to enhance our business in order to help our clients succeed. We improved and expanded our
FINANCIAL HIGHLIGHTS
24%
25%
$344 M
$ 6.62
$1.0B
NET INCOME
EARNINGS PER SHARE
NET INTEREST INCOME
$ 40.8B
$14.8B
$ 75.5B
2014
2015
2014
2015
AVERAGE TOTAL ASSETS
AVERAGE LOAN BALANCES
AVERAGE TOTAL CLIENT FUNDS1
AVERAGE ASSETS
EARNINGS
(PER SHARE)
momentum throughout the year, as we increased the number of Private Bank households we serve by 25 percent and nearly tripled our Wealth Management client count.
Healthy client markets
Our clients performed well in 2015. New company formation, fundraising and investment remained strong. High-growth companies saw capital infusions from a wide array of investors, including venture capital and private equity firms, large
digital delivery, expanding adoption of mobile banking among our clients by over 50 percent, and our SVB Mobile Banking app was recognized as one of the best in the industry.2 Most of our new client accounts were opened through our Digital Client Onboarding platform. We furthered our commitment to embracing and supporting our fintech clients and their technology, hiring a team from banking API (application programming interface) startup, Standard Treasury, to help expand our digital banking platform. We continued to grow
2
Year in review: 2015 Letter to stockholders and partners
our global presence and capabilities, which contributed to client, balance sheet and revenue growth across the board. We also marked a significant milestone in China, with our joint venture bank receiving its local currency license, which will significantly enhance our long-term opportunities there.
Core fee income was 18% of total revenues in 2015
We accomplished all of this by staying true to what we do best: leveraging our platform, expertise and unique role in the global innovation economy to deliver the innovative financial services, unparalleled insight and meaningful connections that increase our clients’ likelihood of success.
FEE AND INVESTMENT INCOME
$265M
$89M
$71M
CORE FEE INCOME3
GAINS ON INVESTMENT
GAINS ON EQUITY
SECURITIES4
WARRANTS
Giving back to our communities
SVB has always believed in giving back to our communities, and in 2015, SVB and our employees raised or donated more than $2.5 million to benefit charitable and community organizations worldwide. These causes ranged from community partnerships that help disadvantaged people to nonprofits focused on entrepreneurial development and inclusion of people with disabilities.
In one of our largest fundraising efforts in 2015, hundreds of SVB employees raised $646,000 for Best Buddies International, which provides employment and leadership opportunities for individuals with intellectual and developmental disabilities. SVB employees in San Francisco, Boston and New York volunteered their time and expertise to support BUILD, a social venture that helps low-income youth access the business and intellectual resources of their communities through education and entrepreneurship. In addition, our own SVB Foundation awarded approximately $200,000 in grants to community organizations for which our employees volunteer. On top of these corporatewide activities, SVB employees around the world selflessly donated their time, goods and services to nonprofit organizations serving their communities.
A YEAR OF GROWTH
28%
17%
Average loan growth
Net interest income growth
29%
27%
Average total client funds growth
Core fee income growth
33%
37%
International client count growth
Average Private Bank loan growth
GIVING BACK
$2.5M
In 2015, SVB and its employees raised and donated more than
$2.5 million to charitable and community organizations worldwide.
A LOOK AT SVB IN 2015
China JV bank receives RMB license
SVB named Financial Firm of the Year by Global Corporate Venturing
Standard Treasury team joins SVB to expand digital banking APIs
SVB appoints new chief information officer
Net interest income reaches $1.0B
SVB reaches $40B in total assets
SVB Asset Management exceeds $20B in balances
SVB Mobile Banking chosen as a top mobile app by American Banker2
SVB appoints chief digital officer and new chief operations officer
3
Year in review: 2015 Letter to our stockholders and partners
Outlook for 2016
As we move into 2016, we are focused on four overarching priorities:
Enhancing our strong brand and reputation through our digital platform and differentiated products, services, insights and networks
Investing in the talent and infrastructure to drive and support our long-term growth Maintaining strong risk management, with an emphasis on stable credit and enhancements to support our growth
Investing in people and communities
We are optimistic about the future. While uncertainty about the global economic outlook persists, and the pace and magnitude of future short-term rate increases are unclear, we believe in the power of innovation and the dynamic nature of our clients. We believe they will continue to outperform the broader economy over the long term, as they have done for many years. When our clients succeed, we succeed, and we will continue to serve them by adding value to their businesses, delivering on our promises and earning their loyalty every day.
Our motivated, talented employees make this possible. Their enterprising spirit, deep industry knowledge and passion for best-in-class service are the real-life embodiment of our reputation as a dedicated, insightful partner to our clients around the world.
Together, we remain committed to driving value for our stockholders by delivering on that reputation and further solidifying our position as the bank of the global innovation economy.
Sincerely,
Roger F. Dunbar
Chairman of the Board of Directors
Greg Becker
President and CEO
1. Total client funds consists of on-balance-sheet deposits and off-balance-sheet client investment funds.
2. “Top 6 Mobile Banking Apps for Business,” American Banker, September 22, 2015.
3. For the year ended December 31, 2015, we had total non-interest income of $472.8 million, which included $265.4 million of non-GAAP core fee income. This non-GAAP measure represents non-interest income but excludes certain line items where performance is typically subject to market or other conditions beyond our control.
Core fee income comprises foreign exchange fees, credit card fees, deposit service charges, lending-related fees, letter of credit fees and client investment fees.
4. For the year ended December 31, 2015, we had net gains on investment securities of $89.4 million with $32.1 million of net gains attributable to noncontrolling interests, including carried interests, resulting in non-GAAP net gains on investment securities, net of non-controlling interests, of $57.3 million.
Learn more at svb.com
CORPORATE HEADQUARTERS
3003 Tasman Drive, Santa Clara, CA 95054 U.S.A., Phone 408.654.7400
This letter contains forward-looking statements within the meaning of applicable federal securities laws. Such statements are predictions, and actual results may differ materially. Information about factors that could cause actual results to differ materially from our forward-looking statements is provided in our 2015 Annual Report on Form 10-K.
©2016 SVB Financial Group. All rights reserved. Member of FDIC and Federal Reserve System. SVB>, SVB Financial Group, and Silicon Valley Bank are registered trademarks.
02-24-16
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