| |  | Leadership– Former role as CEO and director of Financial Engines.
|
| | Banking/Financial Services– — Extensive experience in the investment advisory industry.industry |
9 | | |  | | MARY J. MILLERBOARD & CORPORATE GOVERNANCE
Proposal 1 — Election of Directors |
| | | | | | | | | 
| | DIRECTORSINCE 2015 | | |  | | Ms. Miller, age 62, is the former Under Secretary for Domestic Finance for the U.S. Department of the Treasury (“U.S. Treasury”), a position that she held following her confirmation by the U.S. Senate from March 2012 until September 2014. Ms. Miller also served as Assistant Secretary of the Treasury for Financial Markets following her confirmation by the U.S. Senate in February 2010 until June 2014. Prior to joining the U.S. Treasury, Ms. Miller held various positions with T. Rowe Price Group, Inc. from 1983 to 2009. | | | | Director since: 2015
Age: 61
Committees:Committees: Audit and Finance
Independent:✓
|
Specific Qualifications, Attributes, Skills and Experience
BUSINESS EXPERIENCE CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE: Private Directorships:
| - | | • The Jeffrey Company, an investment company (since 2016)
•
|
| - | | Trustee, Cornell University, a higher education institution (since 2015) |
| - | | Trustee, The Urban Institute, a non-profit research organization (since 2014) |
PRIOR DIRECTORSHIPS: •
| - | | ICE Benchmark Association, a unit of the Intercontinental Exchange (since 2014)• Trustee, The Urban Institute, anon-profit research organization (since 2014)
(2014-2018) |
OTHER PRIOR EXPERIENCE: Other Prior Experience:
| - | | • Director, Fixed Income Division, T. Rowe Price Group, Inc., a global investment management firm (2004-2010)
• (2004-2009)
|
| - | | Various investment management positions with T. Rowe Price Group |
EDUCATION: Education:
| - | | • Bachelor’s degree in Government from Cornell University
•
|
| - | | Master’s degree in City and Regional Planning, University of North Carolina at Chapel Hill •
|
| - | | Chartered Financial Analyst (CFA) |
QUALIFICATIONS | | | Leadership –— Held key leadership positions within the U.S. Treasury.Treasury |
| | Banking/Financial Services –— Extensive experience in financial markets, including regulatory experience; deep experience in the investment advisory industry.industry | 
| | Finance/Accounting— Extensive experience in financial roles, including within the U.S. Treasury | 
| | Government/Regulatory— Served in key positions within the U.S. Treasury |
910
| | |  | | BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
| | | | | | | 
| | DIRECTORSINCE 2010 | | |  | | Ms. Mitchell, age 59, is Managing Partner andCo-Founder of Scale Venture Partners (“Scale Venture”), a venture capital firm that invests in enterprise software companies, and is instrumental in building the firm’s team and strategic direction. Prior to founding Scale Venture in 1996, Ms. Mitchell held a variety of senior management positions with Bank of America. | | | | Director since: 2010
Age: 58
Committees:Committees: Compensation (Chair), Credit and Risk
Independent:✓
|
Specific Qualifications, Attributes, Skills and Experience
BUSINESS EXPERIENCE CURRENT PUBLIC DIRECTORSHIPS: Public Directorships:
| - | | • Fortive Corporation, (NYSE: FTV) a worldwide provider of professional instrumentation and industrial technologies (since 2016)
|
CURRENT PRIVATE DIRECTORSHIPS/OTHER EXPERIENCE: Other Experience:
| - | | • Member, Steering Committee, Private Equity Women Investor Network, a forum for senior women in private equity (since 2010)
•
|
| - | | Member, NASDAQ Private Market Advisory Council, an advisory forum related to private capital markets (since 2014) • Co-Chair,
|
| - | | Founding Chair and Member, NVCA Diversity Task Force (Venture Forward), 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:
| - | | • Mentor, Kauffman Fellows, a venture capital leadership development organization (since 2016)
|
PRIOR DIRECTORSHIPS: | - | | National Venture Capital Association (“NVCA”), a trade association focused on regulatory and economic policy impacting the venture industry and the companies that are funded by venture capital (2007-2011 and 2014-2016) •
|
| - | | PeopleMatter (PMW Technologies, Inc.), a provider of human resource management solutions (2014-2016) •
|
| - | | mBlox, Inc., a mobile transaction network provider (acquired by CLX Communications (2010-2016)• (2010 - 2016)
|
| - | | 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: Other Prior Experience:
| - | | • Silicon Valley Bank Venture Capital Advisory Board (2008-2013)
•
|
| - | | Various senior management positions in finance and technology (including Senior Vice President), at Bank of America•
|
| - | | Various finance and lending positions at Bank of California (now Union Bank of California) |
EDUCATION: Education:
| - | | • Bachelor’s degree in Political Science from Stanford University
•
|
| - | | Master’s degree in Business Administration from Golden Gate University |
QUALIFICATIONS | | | 
| | Leadership— Based on her role as managing partner and co-founder of Scale Venture |
| | Client Industry–— Deep experience and knowledge of the venture capitalindustry and innovation companies (as a venture capital investor and/or a director); current role asco-founder and managing partner of Scale Venture.Venture |
| | Banking/Financial Services–— Held a variety of key executive positions at Bank of America, a large global bank.bank |
| | Finance –/Accounting— Extensive finance and asset/liability management experience at two nationally recognized banks.Bank of America and Bank of California |
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| | | | | BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
| | | | | | | 
| | DIRECTORSINCE 2010 | | |  | | Mr. Robinson, age 71, is a former Executive Vice President, Corporate Risk Management 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. | | | | Director since: 2011
Age: 70
Committees:Committees: Audit (Chair), Compensation, Credit and Risk
| | Independent:✓ Yes |
Specific Qualifications, Attributes, Skills and Experience
BUSINESS EXPERIENCE CURRENT PUBLIC DIRECTORSHIPS: Public Directorships:
| - | | • Federal Home Loan Bank of San Francisco (from 2004-2005 and 2007-2008, and since 2011)
|
PRIOR DIRECTORSHIPS: Prior Directorships:
| - | | • Vogogo, Inc., a Canadian based provider of verification tools for risk management and payment processing (2015-2016)
•
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| - | | Operation HOPE, anon-profit organization focusing on economic improvements for poverty-stricken people in America (2004-2013) •
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| - | | Long Beach Mortgage Corporation aand Long Beach Securities Corporation, both wholly-owned subsidiarysubsidiaries of Washington Mutual Bank (2004-2006)• Long Beach Securities Corporation, a wholly-owned subsidiary of Washington Mutual Bank (2004-2006)
|
OTHER PRIOR EXPERIENCE: 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) •
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| - | | Deputy Comptroller, Office of the Comptroller of the Currency (1997-2002) |
EDUCATION: 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) |
QUALIFICATIONS | | | Banking/Financial Services – Deep— Extensive experience within the banking industry, including his roles at Washington Mutual Bank, a nationally recognized financial lending institution, and regulatory experience, especially as a former bank regulator.banking regulator at the Office of the Comptroller of the Currency |
| | Risk Oversight/Management–— Held a variety of executive risk management positions at Washington Mutual Bank |
| | Government/Regulatory— Served in a nationally recognized bank.key function at the Office of the Comptroller of the Currency |
1112
| | | | | BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
| | | | | | | 
| | DIRECTORSINCE 2011 | | |  | | Mr. Staglin, age 73, is the founder and proprietor of Staglin Family Vineyard, founded in 1985 in the Rutherford region of Napa Valley. Over the past 40 years, Mr. Staglin has also held a variety of positions in the financial and insurance services industries. | | | | Director since: 2011
Age: 72
Committees:Committees: Compensation and Governance
| | Independent:✓ Yes |
Specific Qualifications, Attributes, Skills and Experience
BUSINESS EXPERIENCE CURRENT PUBLIC DIRECTORSHIPS: Public Directorships:
| - | | • Chairman, ExlService Holdings, Inc. (NASDAQ: EXLS), a provider of outsourcing services to global companies (since 2005)
|
CURRENT PRIVATE DIRECTORSHIPS: Private Directorships:
| - | | • Senior Advisor and Advisory Director, FTV Capital (formerly Financial Technology Ventures) (since 2004)
•
|
| - | | Vice Chairman, Profit Velocity Solutions, a manufacturing analytics firm (since 2007) •
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| - | | Chairman, Nvoice Payments, an electronic payment service provider (since 2010) |
OTHER EXPERIENCE: Other Experience:
| - | | • FounderCo-Founder and President,Co-Chairman, One Mind, Institute, devoted to raising awareness and funding research to find a cure for major mental illnesses (since 1995)
• Founder andCo-Chairman, One Mind, anon-profit organization devoted to accelerating cures and treatments for all brain disorders (since 2010)
1995) |
PRIOR DIRECTORSHIPS: 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) •
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| - | | Bottomline Technologies, a provider of payment and invoice automation software and services (2007-2012) •
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| - | | Advisory Board, Blaze Mobile, a mobile payments company (2006-2011) •
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| - | | Solera Holdings, Inc., a public automotive insurance software service provider (2005-2011) •
|
| - | | 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: Other Prior Experience:
| - | | • Founder and President, Bring Change 2 Mind, an organization devoted to removing the stigma associated with mental illness (2009-2014)
|
EDUCATION: 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 |
QUALIFICATIONS | | | Leadership –— Held a variety of leadership roles, including as Chairman of ExlServiceboard positions, as well as other founder and president roles with variousnon-profit organizations. organizations |
| | Client Industryand Banking/Financial Services–— Extensive experience working within the premium wine and transaction/payment processing industries, as well as experience working with innovation companies as a director.director |
| | Banking/Financial Services— Extensive experience working within transaction/payment processing industries |
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| | | | | BOARD & CORPORATE GOVERNANCE Proposal 1 — Election of Directors |
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS We are committed to having sound corporate governance principles.practices, as outlined in our Corporate Governance Principles. These principles are important to the way in which we manage our business and to maintaining our integrity in the marketplace. Our Corporate Governance GuidelinesThey provide a framework for our Company with respect to corporate governance principlespractices and are reviewed at least annually by the Governance Committee, as well as amended from time to time to continue to enhance our governance structure. A copy of our guidelines is available atwww.svb.com under “About Us—Investor Relations—Corporate Governance.” Board Independence and LeadershipBOARD INDEPENDENCEAND LEADERSHIP
The Board has determined that, with the exception of Mr. Becker, our President and CEO, all of our current directors and(and director nomineesnominees) are “independent” within the meaning of the director independence standards set by The NASDAQ Stock Market LLC (“NASDAQ”) and the Securities Exchange Commission (the “SEC”). Additionally, our Amended and Restated Bylaws (“Bylaws”) provide that the Board shall not have more than two (2) directors who do not meet the definition of an “Outside Director.” For these purposes, an Outside Director is any director who meets the independence and experience requirements of NASDAQ and the SEC 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 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
|
The Board has determined that 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 2017-20182018-2019 director 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 CommitteeBOARD RISK OVERSIGHTAND RISK COMMITTEE
Oversight of the Company’s risk management is one of the Board’s key priorities and is carried out by the Board as a whole, as well as by each of its various committees. 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 primary oversight responsibility of the Company’s enterprise-wide risk management framework, including the oversight of risk management policies, and the monitoring of the Company’s risk profile. In addition, it 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 risks underlying the Company’s business. The Risk Committee also 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. 1314
| | | | | BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
Additionally, each Board committee is engaged in overseeing the Company’s risks as 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 risks in relation to our compensation programs. The Finance Committee actively oversees our capital liquidity and financialliquidity 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.risks. Moreover, the Credit Committee routinely oversees our management of credit risks. Each committee chairperson regularly reports 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 risk profile. 
Annual Board EvaluationANNUAL BOARD EVALUATION
The Governance Committee of the Board, in coordination with the full Board, conducts 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 Committees—Committee Governance”below. Board Refreshment and Succession PlanningOVERSIGHTOF CEOAND EXECUTIVES
The Governance Committee primarily oversees the refreshment or succession planning of Board membership. Succession planning takes into account the importance of balancing the appropriate representation of experience and skills on the Board, with the benefits of Board refreshment. Identification of possible director candidates that possess the appropriate qualifications, desire to serve on a financial services public company board and are able to complement our existing Board 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.
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 a process to solicit the Board’s feedback.feedback from each individual independent director. 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 and Executive Succession Planning As a matter of sound governance, the Board, as a whole or from time to time through a special committee, reviews and discusses the Company’s contingency or long-term plans for CEO and executive succession. These efforts involve seeking input from our current CEO and our Head ofChief Human Resources Officer, as well as external advisors, as the Board deems appropriate. AnySuccession plans are reviewed and discussed withby the Board.Board on at least an annual basis. DIRECTOR MATTERS 14Outside Directorships
We encourage all directors to carefully consider the number of other company boards of directors on which they serve, taking into account the time required for board attendance, conflicts of interests, participation, and effectiveness on these boards. Directors are asked to report all directorships, including advisory positions, accepted, as well as to notify the Governance Committee in advance of accepting any invitation to serve on another public company board. Director Education and Orientation The Board believes that ongoing director education is important for maintaining a current and effective Board. Accordingly, the Board encourages directors to be continually educated on matters pertinent to his or her service on the Board. It is the Board’s view that continuing education may be achieved in various ways as appropriate for each individual director, including, among other things, participation in formal education programs, conferences or seminars (the reasonable expenses of which are reimbursable by the Company) or through independent study or outside reading. In addition, from time to time, management may also bring education opportunities to the Board through management presentations, additional education materials or outside speakers. 15 | | | | | BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
Meeting AttendanceNew directors joining the Board also participate in a director orientation program, which involves a variety of informational sessions about our business, strategy and governance with Board members and members of executive and senior management. New directors typically join at least one Board committee upon joining the Board, and are also invited to participate as a guest director at the meetings of the other Board committees.
MEETING ATTENDANCE Board and Committee Meetings The Board and its standing committees held nine (9)a total of fifty-four (54) meetings during fiscal2017. The Board itself held eight (8) meetings during the year, 2016. (For the number of committee meetings held in 2016, see “Board Committees—Committee Chairpersons/Membership, Responsibilities and Meetings” below.)including atwo-day annual session focused on strategic planning. Each director attended in person or via teleconference 75% or more of the total number of meetings of the Board and the committees on which he or she served during 2016.2017. | 54 Total Board and Committee Meetings in 2017 |
| | | | | 2017 Meetings | Board | | 8 | Audit | | 11 | Compensation | | 8 | Credit | | 6 | Finance | | 10 | Governance | | 6 | Risk | | 5 |
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)Ten (10) of our eleven (11) then-serving Board members attended our 20162017 Annual Meeting of Stockholders. Consideration of Director NomineesBOARD REFRESHMENT; CONSIDERATIONOF DIRECTOR NOMINEES
Stockholder NomineesBoard Refreshment and Succession Planning
The Governance Committee primarily oversees the refreshment or succession planning of Board membership. Succession planning takes into account the importance of balancing the appropriate representation of experience and skills on the Board, with the benefits of Board refreshment. Identification of possible director candidates that possess the appropriate qualifications, desire to serve on a financial services public company board and are able to complement our existing Board can be a lengthy process. As such and as an ongoing matter, 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 director succession planning with, the full Board. Based on the recruiting efforts of, and recommendations from, the Governance Committee, the Board appointed a new director during the 2017-2018 director term, and nominated a new director nominee for election at the Annual Meeting. Mr. John Clendening joined the Board in August 2017 and Ms. Kimberly Jabal has been nominated for election to join the Board for the 2018-2019 director term. Board Diversity; Selection and Evaluation of Director Candidates While the Board has not formally adopted a policy governing board diversity, it is focused on 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 identifying candidates for membership on the Board in light of our ongoing requirements, the 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 such individual’s skills, character, judgment and business experience, as well as his or her ability to diversify and add to the Board’s existing strengths. Overall, the Governance Committee typically seeks an appropriate mix of individuals with diverse backgrounds and skills complementary to our business and strategic direction. Please see the description under “Director Qualifications” above for additional information. 16 | | | | | BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
Stockholder Nominees The Governance Committee considers director candidates it identifies, but will also consider Board nominees proposed by stockholders. The Governance Committee has no formal policy with regard to stockholder nominees and 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: Corporate Secretary, Facsimile:(408) 969-6500. 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 identifying candidates for membership on the Board in light of our ongoing requirements, the 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-electionCOMMUNICATIONSWITHTHE BOARD or director candidates’ for nomination to the Board based on such individual’s skills, character, judgment and business experience, as well as his or her ability to diversify and add to the Board’s existing strengths. Overall, the Governance Committee typically seeks an appropriate mix of individuals with diverse backgrounds and skills complementary to our business and strategic direction. Please see the description under “Director Qualifications” above 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 Chairperson of the Board and shared with the full Board as appropriate. Code of EthicsCODEOF ETHICS
We maintain 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 the 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. To request a copy of our Code of Ethics, please contact: 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 2016.2017. CORPORATE SOCIAL RESPONSIBILITY 15We are committed to the communities where we operate through corporate giving, employee volunteering, workforce development and environmental sustainability programs. In addition to these programs, we finance affordable housing in the San Francisco Bay Area as part of our commitment to the Community Reinvestment Act. We recognize that understanding our efforts to improve environmental, social and governance practices is increasingly important to our stockholders, customers and associates and have included some highlights below to clarify our ongoing commitments in these areas.
| • | | Community Development –As a financial institution focused on supporting innovation and entrepreneurship, we have contributed to community development by collaborating with local organizations to offer lending solutions for small businesses in our communities, including collaborating with the Opportunity Fund, which provides microloans, along with education and support, to underserved small business owners, and partnering with Grameen America, which provides microloans and education tolow-income female entrepreneurs. In addition, we have contributed funds and provided lending support to affordable housing efforts, including those of the Housing Trust Silicon Valley and various developers of affordable housing forvery-low andlow-income families, seniors, veterans and formerly homeless individuals in the San Francisco Bay Area. |
| • | | Environmental Sustainability –We have also invested in environmental sustainability both by implementing energy efficiencies internally that have significantly reduced carbon emissions and promoting sustainable practices in certain of our workplaces and by supporting companies that are developing energy and resource efficiency solutions. |
| • | | Diversity and Inclusion –In addition to investing in the environmental and economic health of our communities, we have also focused on fostering diversity and promoting inclusion in the workplace through corporate-wide initiatives, including hosting trainings and workshops on unconscious bias, sponsoring leading conferences focused on professional development for women, and serving as founding partner and global sponsor to theBoardlist, a resource designed to help recruit women for corporate board positions. |
For further information regarding our sustainability and social responsibility efforts, please see our website under “About Us— Living Our Values.” 17 | | | | | BOARD & CORPORATE GOVERNANCE Corporate Governance Principles |
BOARD COMMITTEES We believe our Board has created a sound committee structure designed to help the Board carry out its responsibilities in an effective and efficient manner. ThereWhile the Board may form from time to time ad hoc or other special purpose committees, there are six (6) core standing Board committees: Audit, Compensation, Credit, Finance, Governance and Risk. Committee Independence and Audit Committee Financial ExpertsCOMMITTEE INDEPENDENCEAND 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” within the meaning of applicable SEC rules, NASDAQ director independence standards and other regulatory 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. Committee GovernanceCOMMITTEE 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 charters provide that each committee have adequate resources and authority to discharge its responsibilities, including appropriate funding for the retention of external consultants or advisers, as the committee deems necessary or appropriate. Annual Committee Evaluations The Governance Committee, in coordination with the Board, implements and develops a process to assess committee performance and effectiveness. Typically, theThe 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 size, composition, performance, coordination among committee members and among the standing committees, and involvement with 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 MeetingsCOMMITTEE CHAIRPERSONS/MEMBERSHIP, RESPONSIBILITIESAND MEETINGS
All committee chairpersons of our six standing committees 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 executive and senior management on all committee matters, as appropriate. Each of the committeescommittee meets regularly, at least on a quarterly basis. The committees, typically through their committee chairpersons, routinely report their activitiesactions 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, that are relevant or subject to the committee’s oversight responsibilities on a morein-depth basis. 1618
| | | | | BOARD & CORPORATE GOVERNANCE Board Committees |
The names of the members and highlights of some of the key oversight responsibilities of the Board Committees are set forth below: | | | Audit Committee(12 meetings in 2016)
• 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 Mary Miller |
| | | CompensationAudit Committee(1211 meetings in 2016)2017)
• Our overall compensation strategies, plans, policiesQuality and programs. integrity of our financial statements, including internal controls over
financial reporting. • The approvalIndependent auditor of executivethe Company, including its qualification, independence,
engagement, compensation and director compensation. performance. • The assessmentInternal audit function of compensation-related risks. | | Kate Mitchell, Chairthe Company, as well as other key areas including
information technology, security, litigation and regulatory enforcement matters.
Jeff Maggioncalda
John Robinson
Garen Staglin
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| | | Kate Mitchell, Chair Jeff Maggioncalda John Robinson Garen Staglin | | CreditCompensation Committee(68 meetings in 2016)2017)
• The creditOverall compensation strategies, plans, policies and lending strategies, objectivesprograms. • Executive and risks of the Company and the Bank.director compensation approval. • Compensation risk management, including annual compensation-related risk
assessments. |
�� | | | • 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 John Clendening Jeff Maggioncalda Kate Mitchell John Robinson | | Credit Committee(6 meetings in 2017) • Credit and lending strategies, objectives and risks, primarily of the Bank. • Credit risk management, including reviewing internal credit policies and establishing
portfolio limits. • Quality and performance of the credit portfolio. |
| | | Finance Committee(8 meetings in 2016)
• 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 CommitteeFinance Committee(610 meetings in 2016)2017)
• Our general corporate governance practices, including review of our Corporate Governance Guidelines. Financial strategies, objectives and risks relating to capital and liquidity management,
investments, derivative activities, and funds management. • The annual performance evaluation process of our Board and its committees, and CEO. • The identification and nomination of director candidates.
• Our regulatory compliance and BSA functionsAnnual budget of the Company, and recommendation to the Bank.
| | Eric Benhamou, ChairBoard for approval.
Roger Dunbar• Compliance with certain applicable financial regulatory requirements, including capital
adequacy/planning and stress testing.
Joel Friedman
Garen Staglin• Material corporate development matters that may result in a significant financial
impact.
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| | | Eric Benhamou, Chair Roger Dunbar Joel Friedman Garen Staglin | | RiskGovernance Committee(46 meetings in 2016)2017)
• The enterprise-wide risk management policiesCorporate governance practices, including our Corporate Governance Guidelines. • Annual performance evaluation processes of our Board and its committees, and CEO. • Identification and nomination of director candidates. • Regulatory compliance function of the Company.Company, including financial crimes risk
management. • The operation of our enterprise-wide risk management framework.
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• 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 | | Risk Committee(5 meetings in 2017) • Enterprise-wide risk management policies of the Company. • Operation of our enterprise-wide risk management framework. • Risk appetite statement of the Company, including recommendations to the Board
regarding any changes. • Overall risk profile of the Company. |
1719
| | | | | BOARD & CORPORATE GOVERNANCE Board Committees |
REPORT OF THE AUDIT COMMITTEE OF THE BOARDREPORT
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”“Act”), or under the Securities Exchange Act of 1934, as amended (the “Exchange Act”“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 Audit Committee is governed by a Board-adopted charter, a copy of which is available on our website atwww.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 and the requirements of the Exchange Act, and meet the applicable 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-K under the Exchange Act, and possess “financial sophistication,” as defined under the rules of 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, 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 2016,2018, 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 – Proposals—Ratification of Appointment of Independent Registered Public Accounting Firm—Principal Audit Fees and Services Services”for more information about the Audit Committee’s oversight of KPMG’s audit and permissiblenon-audit fees.fees.) In addition, the Audit Committee oversees our Internal Audit function, as 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), as appropriate. Responsibilities of Management, Independent Auditor and Internal Audit Management has the primary responsibility over the Company’s financial statements and the reporting process, as well as 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 20162017 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, 2016,2017, 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. 1820
| | | | | BOARD & CORPORATE GOVERNANCE Audit Committee ReportBoard Committees
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(Report of the Audit Committee of the Board continued) | | | | | | | | | | | | | | | (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,
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, 2017. 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, 2017, 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 |
COMPENSATION COMMITTEE REPORT | | | | | | | | | | | | | | | COMPENSATION COMMITTEE REPORT
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
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 Form10-K for the year ended December 31, 2017 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 ParticipationCOMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2016,2017, the Compensation Committee or(or the 162(m) Committee of the Board) performed all executive 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. See discussion above under“Board Committees – 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 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. 1921
| | | | | BOARD & CORPORATE GOVERNANCE Compensation Committee ReportBoard Committees
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COMPENSATION FOR DIRECTORS The following table sets forth the amounts earned or paid to eachnon-employeeOVERVIEW member of our Board of Directors during the year ended December 31, 2016.
Overview
Our compensation for ournon-employee directors is designed to be competitive with other financial institutions that are similar in size, complexities or business models. In addition, our director compensation is designed to be tied to business performance and stockholder returns, and to align director and stockholder interests through director ownership of the Company’s stock. | | | | | | | | | | | | | | | Our compensation for ournon-employee
directors is designed to be competitive with other
financial institutions that are similar in size,
complexities or business models. In addition, our
director compensation is designed to be tied to
business performance and stockholder returns, and
to align director and stockholder interests through
director ownership of the Company’s stock. The Compensation Committee oversees and
approves our director compensation. In doing so, the
Compensation Committee reports to and, as
appropriate, consults with, the full Board on all
relevant matters. Our CEO, the only employee director on the
Board, does not receive any payment for his services
as a director. | | 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 | | | �� | (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. | |
The Compensation Committee oversees and approves our director compensation. In doing so, the Compensation Committee reports to and, as appropriate, consults with, the full Board on all relevant matters. Our CEO, the only employee director on the Board, does not receive any payment for his services as a director. 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 Peer Group for the applicable year and other relevant and comparable market data and trends. The committee reviews, on at least an annual basis, 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 may make changes to director compensation to the extent it deems appropriate. No changes to director compensation were made in 2017. Elements of Director Compensation Compensation for ournon-employee directors reflects a combination of cash (annual retainer fees and committee meeting fees) and equity (annual restricted stock unit awards). In April 2016,Directors are also eligible for reimbursement for their reasonable expenses incurred in connection with attendance at meetings or the Compensation Committee eliminated meeting fees for meetingsperformance of the full Board, and increased the annualnon-employeetheir director retainer from $35,000 to $60,000.duties in accordance with Company policy. | | | | | Annual Director Retainer Fee
| | $60,000Schedule of Director Fees
| | | Annual Director Retainer Fee | | $60,000 | | | | Annual Chairperson Fee | | $90,000, Board Chair $20,000, Audit Committee Chair $15,000, Compensation Committee and Risk Committee Chairs $12,000, Credit, Finance and Governance Chairs | | | 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 Audit Committee strategic planning or other extended meetings $3,000 per day, for strategic planning or other extended meetings for all other committees | | | Annual Equity Retainer Award | | Grant of restricted stock units subject to annual vesting with a total value of approximately $200,000 and $100,000 for the Board Chair and each of the othernon-employee directors, respectivelyrespectively. | | |
| | | | | | | | | | | | | 2017 Director Compensation | | | | The following table sets forth the amounts earned or paid to eachnon-employee member of our Board of Directors during the year ended December 31, 2017. | | | Name | | Fees Earned
or Paid in
Cash | | | Stock Awards
($) (1) | | | Total | | Roger F. Dunbar | | $ | 210,750 | | | $ | 200,154 | | | $ | 410,904 | | Eric A. Benhamou | | | 97,500 | | | | 100,077 | | | | 197,577 | | David M. Clapper | | | 104,750 | | | | 100,077 | | | | 204,827 | | John S. Clendening(2) | | | 51,640 | | | | 73,151 | | | | 124,791 | | Joel P. Friedman | | | 98,250 | | | | 100,077 | | | | 198,327 | | Lata Krishnan | | | 85,500 | | | | 100,077 | | | | 185,577 | | Jeffrey N. Maggioncalda | | | 77,250 | | | | 100,077 | | | | 177,327 | | Mary J. Miller | | | 91,500 | | | | 100,077 | | | | 191,577 | | Kate D. Mitchell | | | 98,250 | | | | 100,077 | | | | 198,327 | | John F. Robinson | | | 125,000 | | | | 100,077 | | | | 225,077 | | Garen K. Staglin | | | 75,750 | | | | 100,077 | | | | 175,827 | | (1) Values indicated for annual director equity awards reflect the fair value of restricted stock units at the time of grant for the fiscal year for the 2017-2018 term. The actual value realized is subject to our stock price performance on the date of settlement. (2) Mr. Clendening joined the Board in August 2017; represents a prorated annual equity award. | |
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.
22 | | | | | BOARD & CORPORATE GOVERNANCE Director Compensation |
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 typicallyare granted approximately one month after the Company’s annual meeting of stockholders. The awards typically vest in full upon the completion of the annual director term on the date of the next annual meeting. In 2016,2017, the directors were granted an aggregate total of 10,8356,508 restricted stock units with a scheduled vesting date of the upcoming Annual Meeting. 20
| | | | | BOARD & CORPORATE GOVERNANCE
Director Compensation
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Non-employee directors may elect an irrevocable deferral of the settlement of restricted stock unit awards until the earliest of: (i) a specific future settlement date that meets the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, (ii) separation from service, (iii) the date of a change in control, (iv) death or (v) the date of disability. Elections will apply to restricted stock unit awards received during 2016. Mses.Mdmes. Krishnan and Mitchell elected to defer the settlement of their 20162017 equity grants of 985561 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 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 2016 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 may make changes to director compensation to the extent it deems appropriate.
Director Equity Ownership GuidelinesDIRECTOR 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, 2016,2017, allnon-employee directors had attained the applicable ownership requirements or otherwise remained on target to meet such requirements within the established compliance time frame. 2123
| | | | | BOARD & CORPORATE GOVERNANCE Director Compensation |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Related Party Transactions PolicyRELATED PARTY TRANSACTIONS POLICY
Our policy on related party transactions (“Related Party Policy”) governs transactions involving us and certain related persons that are required to be disclosed under Item 404 of SEC RegulationS-KS-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 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. The following persons are considered “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 Related 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 interestsinterest 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 PolicyINSIDER LOAN POLICY
We also have in place a policy that permits the Bank to make loans (“Insider Loans”) to directors, executive officers and principal stockholders of the Bank or its affiliates and the related interests of those Insiders (“Insiders”), pursuant to the applicable requirements of Regulation O of the Federal Reserve Act (“Regulation O”). 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, our Insider Loan policy authorizes the Bank to make Insider Loans if such Insider Loans: (i) are approved in advance by a majority of the Board of Directors of the Bank, if the aggregate amount of all outstanding extensions of credit to the Insider and to all related interests of the Insider exceeds $500,000; (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 (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 may not participate either directly or indirectly in the voting to approve such extension of credit. Related Party TransactionsRELATED PARTY TRANSACTIONS
Ordinary Course Loan Transactions Except as described below, during 20162017 the Bank made loans to Related Parties, including certain companies in which certain of our directors or their affiliated venture funds are beneficial owners of 10% or more of the equity securities of such companies. Such loans:companies, that were (i) were made in the ordinary course of business;business, (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;persons, and (iii) did not involveinvolving more than the normal risk of collectability or present other unfavorable features. 2224
| | | | | BOARD & CORPORATE GOVERNANCE Related Transactions |
Employee Matters SVB also maintains an Employee Home Ownership Program (“EHOP”), a benefit program that allows eligiblenon-executive employees of the Bank and its affiliates to receive mortgage 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 andMr. Phil Cox. In March 2009, Mr. China received an EHOP mortgage loan in the amount of approximately $1.2 million, which became due as of 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 received an EHOP mortgage in the amount of approximately $311,000, which matures in October 2018. In 2016, Mr. Jon Wolter, a vice-president of SVB 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 $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 similar qualifications and responsibilities. Ms. Parsons does not participate in matters related to Mr. Wolter’s employment or compensation.fully repaid on September 19, 2017.
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. Beck, Becker, Cadieux, China, Cox, Descheneaux, WallaceDreyer, Leone and Zuckert and Mdmes.Mdme. Draper and Parsons have each made commitments to QIFs in commitment amounts ranging from $50,000 to $250,000.$1,025,000. Vendor Arrangements In 2016,July 2017, Cachematrix, a cash management platform provider for the Bank’s Cash Sweep Program, was acquired by BlackRock, Inc., which, together with its affiliates, is a greater than 5% owner of our outstanding voting securities. In 2017, we also entered into an engagement withpaid fees totaling approximately $770,000 to Cachematrix. Additionally, we offer certain BlackRock Financial Management, Inc. to perform certain independent compliance testing services related toinvestment funds, among other third party investment funds, under our Cash Sweep Program. Client investments in the effectiveness of the Company’s Volcker Rule compliance program, for a fee of approximately $150,000. Cash Sweep Program are initiated and directed by clients themselves. In addition, we have engaged The Vanguard Group, which, together with its affiliates, is a greater than 5% owner of our outstanding securities, 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 fees were incurred in connection with these arrangements during the 2016 fiscal year. Each of BlackRock, Inc. andWe paid The Vanguard Group together with their respective affiliates, is a greater than 5% ownerfee of our outstanding voting securities.approximately $215,000 relating to services rendered in 2017. 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 20162017 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. 2325
| | | | | BOARD & CORPORATE GOVERNANCE Section 16(a) Compliance |
| | EXECUTIVE OFFICERSAND COMPENSATION |
EXECUTIVE OFFICERS AND COMPENSATION
INFORMATION ON EXECUTIVE OFFICERSInformation 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, as of the date of this Proxy 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 | | | 49 | 50 | | President and Chief Executive Officer | | | | Dan J. Beck | | 45 | | Chief Financial Officer | | | | Marc C. Cadieux | | | 50 | 51 | | Chief Credit Officer | | | | John D. China | | | 51 | 52 | | Head of Technology Banking | | | | Philip C. Cox | | | 50 | 51 | | Head EMEA and President of the UK Branch | | | | Michael R. Descheneaux (1) | | | 4950 | | President, Silicon Valley Bank | | Chief Financial Officer | | Michelle A. Draper | | | 49 | 50 | | Chief Marketing Officer | | | | Michael L. Dreyer | | | 53 | 54 | | Chief Operations Officer | | | | Christopher D. Edmonds-Waters | | | 5455 | | | Head ofChief Human Resources Officer | | | | Laura H. Izurieta | | | 56 | 57 | | Chief Risk Officer | | | | Roger E. Leone | | | 63 | 64 | | Chief Information Officer | Bruce E. Wallace
| | | 52 | | | Chief Digital Officer | Michael S. Zuckert | | | 58 | 59 | | 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.
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Greg W. Becker’s biography can be found under “Proposal No. 1—Election of Directors” above. Marc C. CadieuxDan J. Beck,Chief Financial Officer joined 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 the Company. Mr. Cadieux was previously the Division Risk Manager for SVB’s Eastern Division, where he was responsible for overseeing our commercial lending activities in the 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.
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, and in 2014, as the Head of Relationship Banking (currently Head of Technology Banking), where he focuses on our core technology banking clients. Mr. China is a member of the advisory board of DEMO, and serves on the boards of ASTIA, anon-profit organization dedicated to the success ofwomen-led, high-growth ventures, and the California Israel Chamber of Commerce. Mr. China holds a Bachelor’s degree in Industrial Engineering from Stanford University.
24
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Information on Executive Officers
|
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. Mr. Cox was appointed as Head of Europe, Middle East and Africa 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 tofinance, treasury and accounting functions. Before joining the Company in 2017, 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).
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. Prior to joining the Company, Mr. Descheneaux was a managing director of Navigant Consulting (2004-2006) and held various leadership positions with Arthur Andersen (1995-2002). Mr. Descheneaux holds a Bachelor’s degree in Business Administration from Texas A&M University. He is also a certified public accountant licensed by the Texas State Board of Public Accountancy.
Michelle A. Draper joined us in 2013 as Chief Marketing Officer, and is responsible for the strategy and execution of our global marketing initiatives. Prior to joining us, Ms. Draper held various senior-level marketing positions at Charles Schwab & Co. from 1992-2013, including as Senior Vice President of Institutional Services Marketing, where 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 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.
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, heBeck served as the Chief OperationsFinancial Officer and Presidentfor Bank of the Americas for Monitise, where he was responsible for the design, buildWest, a subsidiary of BNP Paribas Group, from June 2015 to May 2017 and operations of Monitise’s technology globally, as well as its Americas business (2014-2015).Executive Vice President and Corporate Controller from June 2008 to June 2015. Prior to that,his tenure at Bank of the West, Mr. Dreyer was the Chief Information Officer at Visa Inc., where he was responsible for company’s systems and technology platforms (1998-2014). Mr. Dreyer has alsoBeck held various senior-level positions at American Express, Prime Financial, Inc.,finance and accounting roles with Wells Fargo Bank, the Federal Deposit InsuranceHome Loan Mortgage Corporation, (FDIC)E*TRADE Financial Corporation and Bank of America. He has been on the board of directors of Finisar Corporation (FNSR: NASDAQ) since 2015, and F5 Networks Inc. (FFIV: NASDAQ), since 2012.Deloitte & Touche LLP. Mr. DreyerBeck holds a Bachelor’s degreeB.S. in PsychologyAccounting from Virginia Commonwealth University and a Master’s degreeB.S. in Business AdministrationBiology from WashingtonVirginia Polytechnic Institute and State University.
ChristopherMarc C. Cadieux, 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.
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| | | | | EXECUTIVE OFFICERS & COMPENSATION
Information on Executive Officers
|
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 range of technology positions, including as an independent consultant from (2011-2014) and Vice President, Global IT Services at Yahoo! (2010-2011). Prior to that, Mr. Leone held various senior-level IT positions 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. Prior to his time at Pfizer, Mr. Leone spent approximately 20 years with Bank of America in a variety of IT positions. Mr. Leone holds a Bachelor’s degree in Mathematics from Utica College of Syracuse University.
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. 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. Prior to joining the Company, Mr. Wallace spent more than 20 years in a variety of management positions in banking operations with Wells Fargo & Company, 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.
Michael S. Zuckert joined us in 2014 as General Counsel and 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 (2009-2014), where he served as general counsel for the company’snon-core assets business, Citi Holdings, and focused on mergers and acquisitions. Prior to 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. 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.
26
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Information on Executive Officers
|
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) discusses our 2016 executive compensation program, as it relates to our five “named executive officers” listed below.
| | | | | | | | | | | | | | 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
Michael Descheneaux*
Chief Financial Officer
Marc Cadieux
Chief Credit Officer, oversees our credit administration function. Mr. Cadieux joined us in 1992 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 the Company. Mr. Cadieux was previously the Division Risk Manager for SVB’s Eastern Division, where he was responsible for overseeing our commercial lending activities in the 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. 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. 26 | | | | | EXECUTIVE OFFICERS & COMPENSATION Information on Executive Officers |
John D. China, Head of Technology Banking , oversees the growth of our technology banking business. Mr. 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 Management and Head of Venture Capital and Private Equity division. Mr. China was appointed as the Head of Relationship Management in 2010, Head of Relationship Banking in 2014, and Head of Technology Banking in 2017. Mr. China is a member of the boards of H2, a digital industry leadership network, and BUILD, a nonprofit organization dedicated to educating under-resourced youth through entrepreneurship; and the advisory boards of Alpha Club, a networking community of founders, CEOs and technology influencers, and York Butter Factory, an Australian coworking and startup incubator space. Mr. China holds a Bachelor’s degree in Industrial Engineering from Stanford University. Joan Parsons**
Philip C. Cox,Credit Risk ManagerHead of Europe, Middle East and Africa; President of the UK Branch, is focused on the international development of our business and is responsible for our UK branch. Mr. 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, prior to his appointment to his current role in 2012. 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 his tenure at Torex Retail PLC, Mr. Cox spent approximately 23 years with NatWest/RBS Group in 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). Michael R. Descheneaux,President, Silicon Valley Bank,oversees the Company’s global commercial bank, private bank and funds management businesses, as well as credit administration. Mr. Descheneaux joined us in 2006 as Managing Director of Accounting and Financial Reporting, and was appointed as Chief Financial Officer in 2007, where he was responsible for all our finance, treasury, accounting and legal functions, as well as our funds management business until he assumed his current role in 2017. Prior to joining the Company, Mr. Descheneaux was a managing director of Navigant Consulting (2004 – 2006) and held various leadership positions with Arthur Andersen (1995 – 2002). Mr. Descheneaux holds a Bachelor’s degree in Business Administration from Texas A&M University. He is also a certified public accountant, as well as a member of the Texas State Board of Public Accountancy. Michelle A. Draper,Chief Marketing Officer, is responsible for the strategy and execution of our global marketing initiatives. Prior to joining us in 2013, Ms. Draper held various senior-level marketing positions at Charles Schwab & Co. from 1992 - 2013, including as Senior Vice President of Institutional Services Marketing, where 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 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. Michael L. Dreyer,Chief Operations Officer, is responsible for the Company’s global technology and infrastructure functions. Prior to joining us in 2015, Mr. Dreyer served as the Chief Operations Officer and President of the Americas for Monitise, where he was responsible for the design, build and operations of Monitise’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 technology platforms (1998 - 2014). Mr. Dreyer has also held various senior-level positions at American Express, Prime Financial, Inc., the Federal Deposit Insurance Corporation (FDIC) and Bank of America. He has been on the board of directors of Finisar Corporation since 2015, and F5 Networks Inc., since 2012. Mr. Dreyer holds a Bachelor’s degree in Psychology and a Master’s degree in Business Administration from Washington State University. Christopher D. Edmonds-Waters,Chief Human Resources Officer, oversees our human resources function, which includes our compensation, global mobility, recruiting and learning and development functions. Mr. Edmonds-Waters joined us in 2003 as Director of Organization Effectiveness and was appointed to his current role in 2007. Prior to joining the Company, Mr. Edmonds-Waters held various senior-level human resources positions at Charles Schwab & Co. from 1996 – 2003 and began 27 | | | | | EXECUTIVE OFFICERS & COMPENSATION Information on Executive Officers | |
Kate Mitchell
(Committee Chair)
his career at Macy’s California where he held various merchandising as well human resources roles. Mr. Edmonds-Waters holds a Bachelor’s degree in Intercultural Communications from Arizona State University and a Master’s degree in Human Resources and Organization Development from the University of San Francisco. Laura H. Izurieta,Chief Risk Officer,is responsible for leading our enterprise-wide risk management, corporate compliance and regulatory functions. From 2000 until joining the Company in 2016, Ms. Izurieta held various roles of increasing responsibility at Capital One, including Vice President of Corporate Reputation and Governance, Vice President of Capital One Home Loans and Vice President of Information Technology, and most recently as the Executive Vice President and Chief Risk Officer, Retail and Direct Bank. 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. Roger E. Leone,Chief Information Officer, oversees our information technology function and previously served as Head of IT Infrastructure Engineering and Operations. Prior to joining us in 2015, he served in a range of technology positions, including as an independent consultant from (2011-2014) and Vice President, Global IT Services at Yahoo! (2010-2011). Prior to that, Mr. Leone held various senior-level IT positions 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. Prior to his time at Pfizer, Mr. Leone spent approximately 20 years with Bank of America in a variety of IT positions. Mr. Leone holds a Bachelor’s degree in Mathematics from Utica College of Syracuse University. Michael S. Zuckert,General Counsel, is responsible for all our legal and government affair matters. Prior to joining the Company in 2014, he served in a wide range of legal positions within the financial services industry. Most recently, he served as Deputy General Counsel of Citigroup (2009-2014), where he served as general counsel for the company’snon-core assets business, Citi Holdings, and focused on mergers and acquisitions. Prior to 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. Mr. Zuckert is a director of the Law Foundation of Silicon Valley and the Global EIR Coalition and a member of the leadership council of Tech:NYC. 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. 28 | | | | | EXECUTIVE OFFICERS & COMPENSATION Information on Executive Officers |
Compensation Discussion and Analysis This Compensation Discussion and Analysis (“CD&A”) discusses our 2017 executive compensation program, primarily as it relates to our “named executive officers” (“NEOs”). | | | | | | | | | | | MESSAGEFROMTHE COMPENSATION COMMITTEE We, as the Compensation Committee of the Board of Directors (“Compensation Committee”), have the delegated responsibility of primary oversight over the design and execution of the Company’s executive compensation program. We did not make any material changes to the design of our executive compensation program for 2017, and remained consistent with our core compensation strategy and philosophy, taking into account the following key considerations in determining executive pay: • Performance - Setting challenging performance metrics aligned with our strategic business and growth objectives, as well as stockholder interests; • Risk - Establishing a compensation framework that incents consistent and sustainable long-term performance, but without encouraging undue risk-taking; and • Talent - Setting appropriate compensation to attract and retain the executive talent needed for our business. We also considered the Company’s pace of growth and increasing business and regulatory complexities. Overall, we were pleased to see another year of strong performance delivered by the Company. Our pay decisions reflected that performance, as well as our continuing emphasis on our core banking business, operational infrastructure, risk management and financial performance. In 2018, we remain committed to setting the appropriate compensation framework to drive our long-term, sustainable global growth and other strategic objectives. | | | Kate Mitchell,Chair | | Jeff Maggioncalda | | John Robinson | | Garen Staglin | | |
| EXECUTIVE COMPENSATION ELEMENTS AT-A-GLANCE |
| | | | | | | | | | CASH COMPENSATION | | EQUITY COMPENSATION | | | | | | | |
| PRIMARY EXECUTIVE COMPENSATION ELEMENTSFOR 2016 - SUMMARYBase Salary | | Incentive Compensation Plan (ICP) | | Performance-Based Restricted
Stock Units (PRSUs) | | Stock Options | | Restricted Stock Units (RSUs) | ----------------- Short-Term Emphasis ----------------- | | ------------------------------------------- Long-Term Emphasis ------------------------------------------- | | Ongoing | | 1-Year Performance Period | | 3-Year Performance Period | | 4-Year Vesting Period | Fixed | | Performance-Based | | Fixed^ | ----------------------------------------------------------------------------- Applicable Performance Metrics ----------------------------------------------------------------------------- | Compensation
Committee judgment | | Return on Equity Formulaic pool funding, plus Compensation Committee judgment | | Total Stockholder Return Return on Equity Selected Fee Income Formulaically determined, plus Compensation Committee judgment | | Stock Price Appreciation |
| | | | | | | | | | | | | | | | | Base
Salary | | Incentive Compensation
Plan (ICP)
| | Performance-Based Restricted
Stock Units (PRSUs) | | Stock
Options | | Restricted Stock Units
(RSUs)
| Form of Compensation | | | | -------------------- Cash --------------------
| | ------------------------------- Equity-------------------------------
| | | ---- Fixed ----
| | -------------------------- Performance-Based -----------------------
| | -----Fixed^-----
| | | | ^ | Any incremental value realized above the grant value of time-based RSUs, as well as earned PRSUs, is based on stock price appreciation. | | Performance Timing | | | | --------- Short-Term Emphasis ---------
|
| ----------------------- Long-Term Emphasis -----------------------
| Measurement Period | | | | 2017 Named Executive Officers | | GREG BECKER, President and Chief Executive Officer | | JOHN CHINA, Head of Technology Banking | | DAN BECK, Chief Financial Officer | | MICHAEL DREYER, Chief Operations Officer | MICHAEL DESCHENEAUX, President, Silicon Valley Bank (former CFO) | | LAURA IZURIETA, Chief Risk Officer | | | | Ongoing
| | 1 Year
| | 3 Years
| | 4 Year Vesting
| | | | | | | Key Performance Metrics Applicable | | | | --- | | ROE^^
(budgeted and relative)
| | Relative TSR^^; ROE;
Selected Fee Income
| | Stock Price Appreciation
| | | | | | | Determination ofPerformance-Based Payouts
| | | | ---
| | Formulaic + Discretion
| | Formulaic + Negative Discretion
| | ---
|
| * | 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).
29 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
| ** | 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 Average Equity; TSR – Total Stockholder Return.
| |
27
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
|
20162017 CEO COMPENSATIONAND OTHER HIGHLIGHTS
|
| CEO PAY ALIGNMENTWITH COMPANY PERFORMANCE2017 Company Performance
|
| 
The Compensation Committee takes into consideration a variety of factors on a formulaic, as well as discretionary, basis, in determining actual CEO and executive compensation. For illustrative purposes,As further detailed in the graphs above showProxy Summary Information section at the general comparison between our CEO’s total actual compensation (as reportedbeginning of this Proxy Statement, the Company performed well in our 2016 Summary Compensation Table) and selected key financial metrics: • Diluted Earnings2017. In particular, its annual earnings per Common Shareshare (“EPS”EPS”) and Net Income — both core financial metrics are generally usedtotal net income increased by 26% and 28%, respectively, compared to evaluate overall Company performance.
¡the prior year of 2016. The metrics areCompany’s annual return on equity (“ROE”) for 2017 was 12.38%, reflecting a 14% year-over-year increase. Our stock price performance was also taken into consideration, in particular, for the determination of the CEO’s ICP award.
¡ Net income includes fee income from our foreign exchange and credit card-based businesses. Such selected fee income is one of the performance metrics applicable to executive PRSU awards.
• Relative Return on Equity (“ROE”) Performance — one of the metrics used to measure performancestrong, ranking first against our relevant peer group2017 Peer Group based on total stockholder return. Accordingly, our CEO compensation for purposes of determining2017 reflected the funding of our ICP.year’s strong performance as described below.
| | | | | | | | |  | | Stock Performance pTotal Stockholder
Return –ranked #1
against 2017 peer
Group* pSIVB Stock Price –
36.2% year-over-
year increase** |
2017 CEO Pay Summary+ | | | | | | | | | 2017 Year-Over-Year Changes | | | | CEO Compensation 
Based on SEC-reported total compensation | Total Target Pay | | p 15% | | Primarily due to an increase in long-term equity incentive awards. | | | | Total SEC-
Reported Pay | | p 19% | | Primarily due to an increase in long-term equity incentive awards and higher annual cash incentive compensation due to strong Company and individual performance. | | | | | | | | | | | |
Continued Emphasis on Performance-Based, Long Term CEO Pay (Competitive with Peers) | | | | | | Fixed v. Performance-Based CEO Target Pay | | Short-Term v. Long-Term CEO Target Pay | | 2017 CEO Target Pay Mix | (Compared to 2017 Peer Group) | | 
| | 
| Fixed Pay: Performance-Based Pay: Base Salary, RSUs ICP, PRSUs, Stock Options | | Short-Term Pay: Long-Term Pay: Base Salary, ICP PRSUs, RSUs, Stock Options | | 83% of total target pay at risk (slight increase from last year at 81%) | | |
| * | Based on TSR calculation methodology described on page 40. |
| ** | Based on closing prices reported as of December 30, 2016 and December 29, 2017. |
| + | CEO Target Pay discussed in this summary is based on the actual equity grant value of target awards. |
30 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
| EMPHASISON PERFORMANCE-BASED, LONG TERM CEO PAY (COMPETITIVEWITH PEERS) |
| | | | | | | | | EPS Net Income ROE SVB Fixed v.Peer Performance-Based CEO Target Pay (Compared to 2016 Peer Group)
| | 33% 33% 67% 67% SVB Short-Term v.Peers Long-Term CEO Target Pay (Compared to 2016 Peer Group)
| | |
| | | | | | | | | Fixed Pay:
•34% 45% 55% 66% Long-Term Equity Base Salary ICP 66% 17% 17%
• RSUs
Performance-Based:
• ICP
• PRSUs
• Stock Options
| | | | 
| | | | Short-Term Pay:
• Base Salary
• ICP
Long-Term Pay:
• PRSUs
• RSUs
• Stock Options
|
| BALANCED CEO TARGET PAY MIX |
CEO Target Pay Mix
| | | 81%OF CEO
TARGET PAYIS
AT-RISK. | | 
|
| In 2016, we maintained an annual equity burn rate of 1.7% under our 2006 Equity Incentive Plan.
We continue to stay below our long-standing commitment to keep our annual equity burn rate below 2.5% of our total number of shares outstanding as of the beginning of each fiscal year.
|
28
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
|
| | EXECUTIVE COMPENSATIONAND PRACTICES Highlights of our executive compensation program and practices are set forth below:(details are further discussed in this CD&A section) Compensation Oversight and Governance | | | • | | Independent Board* oversight of CEO compensation(based on the CompensationCommittee’s recommendations) | | | • | | Independent Compensation Committee oversight ofnon-CEO executive compensation | | | • | | Independent compensation consultant to the Compensation Committee | | | • | | Active Compensation Committee engagement (held 8 meetings in 2017) |
Focus on Stockholder Interests | | | • | | Say on Pay vote on an annual basis (Say on Pay approval rate of 98.6% of votes cast in 2017) | | | • | | Robust executive equity ownership guidelines | | | • | | Continuing stockholder outreach to solicit feedback and to discuss our business and practices(throughout the year) | | | • | | Performance metrics focused on stockholder return (including total stockholder return and return on equity) |
Compensation Risk Mitigation and Management | | | • | | Compensation risk management(includingannual risk assessments, internal audit review of compensation programs, oversight under the Company’s enterprise-wide risk management framework) | | | • | | Minimums/maximums applied to incentive awards (minimum performance thresholds and maximum funding limits) | | | • | | No hedging or pledging (executives not permitted to hedge ownership of our securities through selling puts or shorts, or to pledge our securities to secure personal obligations) |
Executive Compensation Features | | | • | | Competitive benchmarking against peers (both compensation and performance) | | | • | | Double trigger change in control severance(under our executive Change in Control Plan) | | | • | | No 280G excise taxgross-ups (under our executive Change in Control Plan) | | | • | | No individual employment agreements for executives(unless required by law) | | | • | | No executive perquisite/benefit programs | | | • | | No special executive retirement benefits; no pension or SERP plans |
Equity Plan Practices Our executives’ equity awards are made under our 2006 Equity Incentive Plan and have the following features/practices: General Features/Practices: | ¡ | | No recycling of shares used to pay for the exercise price of stock options |
| ¡ | | Annual burn rate maximum of 2.5% (2017 burn rate was 1.17%) |
| ¡ | | No single-trigger vesting upon change in control |
| ¡ | | No taxgross-ups for plan awards |
Stock Options: | ¡ | | No stock option repricing/exchange without stockholder approval |
| ¡ | | Minimum 100% fair market value exercise price for options |
| ¡ | | Maximum7-year term for options |
| ¡ | | Minimum1-year vesting for stock options awards (typical practice – 4 years) |
Full Value Awards: | ¡ | | Each full value award share counted as 2 shares |
| ¡ | | Minimum3-year time-based vesting for full value awards (typical practice – 4 year vesting) |
| ¡ | | Minimum1-year vesting for performance-based full value awards (typical practice –3-year vesting) |
* * * * * Independent members acting as a committee, without CEO participation
31 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
| | | | | | | EXECUTIVE COMPENSATION PHILOSOPHYAND OBJECTIVES The key compensation philosophy and objectives of our executive compensation program and practices are as follows: • Aligning the interests of our stockholders, our Company and employees; • Tying pay to Company and individual performance through appropriate performance metrics and consideration of market and business environment dynamics; • Maintaining an appropriate pay mix, with an emphasis on performance-based pay and long-term incentive compensation; • Paying competitively based on external market standards, while considering internal parity; • Recruiting and maintaining a cohesive,top-talent executive management team; and • Focusing on strong governance and risk management practices. 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. | | | |
COMPENSATION OVERSIGHTAND GOVERNANCEAND RISK MANAGEMENT |
| | | •
| | Independent BoardRole of Compensation Committee; Compensation Committee Meetings
All members of the Compensation Committee are “independent” under applicable NASDAQ rules. The Compensation Committee has primary oversight of CEO compensation.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 committee: (i) reviews and recommends for independent members of our Board of Directors (acting as a committee) oversee and approveapproval the compensation of ourthe CEO, based on recommendations made by the Compensation Committee. | | | •
| | Independent committee oversight ofnon-CEO executive compensation. Our Compensation Committee (comprised of all independent directors) overseesand (ii) reviews and approves the compensation of all othernon-CEO executive officers.
| | | •
| | Independent compensation consultant In carrying out its oversight responsibilities, the committee regularly reports to the Compensation Committee.Board on the actions it has taken, as well as confers with the Board on compensation matters, as necessary. The Compensation Committee’s independent compensation consulting firm does not provide anyCommittee also makes recommendations for all other services to the Company.
| | | •compensation-related matters that require full Board approval.
| | ActiveThe Compensation Committee engagement. In 2016,meets on a regular basis, and routinely meets in executive session without management present. During 2017, the Compensation Committee held twelve (12)8 meetings, to discuss compensation matters, including an extended annual session where the Compensation Committee met with key members of executive management, including the CEO, President of the Bank, Chief Financial Officer, Chief Human Resources Officer, Chief Risk Officer and General Counsel, to review compensation strategy session.programs in light of the Company’s 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, acting as a committee) review and approve the compensation for the CEO. Such review and approval are conducted during the executive sessions, where neither the CEO nor any other member of management is present. 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. He does not participate in any deliberations relating to his own compensation. The committee considers the CEO’s recommendations, but retains full discretion to approve, or recommend for the independent members of the Board to approve, all executive 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 committee’s charter. The Compensation Committee in its sole discretion selects the consultant, and determines its compensation and the scope of its responsibilities. 32 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
|
In 2017, Pay Governance assisted the Compensation Committee with: advice and recommendations regarding the Company’s compensation philosophy and strategies; advice on director and executive compensation levels and practices, including review and recommendations on director, CEO and other executive compensation and evaluation of CEO pay and Company performance; advice on the Company’s 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. Pay Governance provides services only to the Compensation Committee, and not to the Company, and did not provide any additional services to the committee outside of executive and director compensation consulting during 2017. 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 2017. Compensation Risk Management A primary area of focus of the Compensation Committee is compensation risk management. The committee, together with its compensation consultant, conducts annual risk assessments of our compensation program, which include process, tone and culture. Our compensation program is also reviewed by our internal audit function, as well as discussed as part of our Risk Appetite Statement and enterprise risk management efforts. Based on these various steps, we do not believe that our compensation program creates risks that are reasonably likely to have a material adverse effect on the Company. Moreover, our compensation programs and risks are routinely discussed at the Board-level, both with and without the CEO present. In particular, the chairperson of our Compensation Committee reports to and discusses compensation risk issues with the full Board and the Risk Committee. The chairperson of the Compensation Committee and one other member of the committee (who also serves as the chairperson of the Audit Committee) are members of the Risk Committee of the Board of Directors. Additionally, certain compensation matters are also reviewed with the Audit Committee, particularly as it relates to exclusions under our ICP funding. ANNUAL SAYON PAY; FOCUSON STOCKHOLDERTOCKHOLDERS INTERESTS |
| | | | | • Say on Pay Frequency.
We conduct a “Say on Pay”submit an advisory vote on executive compensation, or Say on Pay, to our stockholders on an annual basis. Our Board of Directors values the opinions of our stockholders and believes an annual advisory vote allows our stockholders to provide us with their input on our executive compensation program. We conducted an advisory vote on the frequency of the advisory Say on Pay vote at our 2017 Annual Meeting. Following the recommendation of our stockholders in 2017, we will continue to hold our advisory Say on Pay vote on an annual basis. 2017 Say on Pay Advisory Vote • In 2017, over 98.6% of the votes cast approved our 2016 executive compensation program (as described in our 2017 proxy statement). In light of the strong voting support and the extent of other feedback we have solicited from our stockholders, the Compensation Committee remained consistent with our executive compensation philosophy, policies or overall program, and did not make any material changes. 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.
Robust executive equity ownership guidelines.Stockholder Focus Our executives are subject to robust equity ownership guidelines, which are regularly reviewed. In particular, our CEO’s minimum requirement is equal to six (6) times his annual base salary. (No changes were made in 2016.)
• ActiveWe are focused on the interests of our stockholders. Our two primary performance metrics selected for our performance-based incentive awards measure stockholder engagement.return: (i) total stockholder return (for our executives’ performance-based restricted stock unit awards); and (ii) return on equity (for our annual incentive compensation awards). In additionboth cases, we measure performance relative to our peers.
33 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
We conduct active investor outreach activities throughout the year to engage with our stockholders. Additionally, as part of our annual proxy statement preparation process, we routinely and proactively reach out to our key stockholders to solicitinvite their feedback, including their view about our executive compensation program, including our equity compensation practices.program. • 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.
| | | | SCAYONOMPENSATION PDAYECISIONS FREQUENCY
WeOur Compensation Committee is responsible for deciding the design of the executive compensation structure (including choosing and setting applicable performance metrics, selecting the forms of compensation, determining the overall pay mix and setting pay levels) and approving actual executive compensation awards. (In the case of the CEO, the Compensation Committee makes recommendations about CEO pay decisions for approval by the independent members of the full Board.) Decisions are conductingtypically made within the first quarter of each year, both to determine the compensation design applicable for any performance period involving that particular and subsequent years, and to approve any incentive awards based on the prior year’s performance.
While compensation decisions are made during the earlier part of the year, the rest of the year is focused on monitoring performance against set goals and determining funding accruals, as well as other aspects of the compensation program, including, among other things, peer group review, compensation design changes for the subsequent years, compensation risk review, and monitoring market and governance trends impacting compensation. As further discussed below, in making compensation decisions, the Compensation Committee considers a variety of factors and data, including peer benchmarking and other industry data and performance reviews of individual executives. The key decisions for 2017 relating to 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.NEOs are also summarized below under “2017 NEO Compensation Decisions.” (See Proposal No. 4
on page 54.)
|
| COMPENSATION RISK MITIGATIONAND MANAGEMENT |
| | | •
| | Compensation risk management. The Compensation Committee, together with its compensation consultant, conducts annual risk assessments of our compensation program, which include process, tone and culture. Based on those assessments, we do not believe that our compensation program creates risks that are reasonably likely to have a material adverse effect on the Company. Our compensation program is also reviewed by our internal audit function, as well as discussed as part of our Risk Appetite Statement and enterprise risk management efforts. Moreover, our compensation programs and risks are routinely discussed at the Board-level beyond the Compensation Committee. In particular, the chairperson of our Compensation Committee reports to and discusses compensation risk issues with the full Board and the Risk Committee. Compensation matters are also reviewed with the Audit Committee, particularly as it relates to exclusions under our ICP funding.
| | | •
| | 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 for our executive PRSU awards, our annual cash incentives funding, and our broad-based employee stock ownership plan.
| | | •
| | 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.
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Compensation Discussion & Analysis
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| EXECUTIVE COMPENSATION FEATURES |
| | | •
| | Competitive benchmarking against peers. In making compensation decisions, we consider compensation and performance data from our benchmarking reference peer group and other relevant and comparable industry sources. Additionally, we routinely review, on at least an annual basis, the composition of the companies within the peer group. See “Competitive Benchmarking Against Peers” below.
| | | •
| | 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 gross-ups. Our executives are not entitled to any Section 280G excise tax gross-up payments under our executive Change in Control Plan or otherwise.
| | | •
| | No employment agreements. We do not have any individual employment agreements with any of our named executive officers.
| | | •
| | No executive perquisite or benefit programs. We do not have any executive perquisite programs. Other than our executive Change in Control Plan, we do not have any special executive programs that offer benefits exclusively to our executives. Our executives receive the same retirement, health, welfare and other benefits that are generally available to our employees, and may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Plan. From time to time and on a limited basis, we may provide individual benefits deemed to be perquisites, which we believe serve, or are related to, a reasonable business purpose.
| | | •
| | No special executive retirement benefits. Our executives are eligible to participate in our 401(k) plan (or other employee-funded retirement plan) that is broadly available to all employees. We do not provide any other pension, excess retirement, or supplemental executive retirement (“SERP”) plans to any executive.
|
Our executives’ equity awards are made under our 2006 Equity Incentive Plan and have the following features/practices:
General Features/Practices:
| ¡ | | No recycling of shares used to pay for the exercise price of stock options
|
| ¡ | | Annual burn rate maximum of 2.5%
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| ¡ | | No single-trigger vesting upon change in control
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| ¡ | | No tax gross-ups for plan awards
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| ¡ | | Ability to qualify performance-based equity awards for 162(m) tax deductibility, where appropriate
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Stock Options:
| ¡ | | No stock option repricing/exchange without stockholder approval |
| ¡ | | 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 |
Our typical practice for executives is vesting over 4 years
| ¡ | | Minimum 1-year vesting for performance-based full value awards |
Our typical practice for executives is vesting over 3 years
* * * *
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Compensation Discussion & Analysis
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| EXECUTIVE COMPENSATION PHILOSOPHYAND OBJECTIVES |
The key compensation philosophy and objectives of our executive compensation program and practices are as follows:
| • | | Aligning the interests of our stockholders, our Company and employees;
| |
| • | | Tying pay to Company and individual performance through appropriate performance metrics and consideration of market and business environment dynamics;
| |
| • | | Maintaining an appropriate pay mix, with an emphasis on performance-based pay and long-term incentive compensation;
| |
| • | | Paying competitively based on external market standards, while considering internal parity;
| |
| • | | Recruiting and maintaining a cohesive,top-talent executive management team; and
| |
| • | | Focusing on strong governance and risk management practices.
| |
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.
Role of Compensation Committee; Committee Meetings
All members of the Compensation Committee are “independent” under applicable NASDAQ 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 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 committee 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 2016, the Compensation Committee held twelve (12) meetings, including an extended annual session where the Compensation Committee met with the Board Chair, 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 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, acting as a committee) review and approve the compensation for the CEO. Such review and approval are conducted during the executive sessions, where neither the CEO nor any other member of management is present.
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 assessment 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 committee 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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Compensation Discussion & Analysis
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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.
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.
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Compensation Discussion & Analysis
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| COMPETITIVE BENCHMARKING AGAINST PEERS |
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,For 2017, the Compensation Committee considers various factorsbenchmarked and characteristics including, but not limited to, business model, complexity of the business, market capitalization, asset size, assets under management, number of employees,compared our compensation 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 aboutwith our peer companies, butin a manner consistent with prior years. The names of 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 information18 companies on our 2017 Peer Group list is reviewed and considered in aggregate, and the Compensation Committee does not place any particular weighting on any one factor.
| | | | 2016 Peer Groupset forth below.
| | | Associated Banc-Corp
BOK Financial Corp
| | | | | 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, among other things, industry, business model, complexity of the business, geography, market capitalization, asset size, assets under management, number of employees, performance on financial and market-based measures, and extent they compete with us for talent. Based on the above considerations, the Compensation Committee added six new companies to the 2017 Peer Group (indicated with an asterisk (*) on the list to the right), and removed three companies (FirstMerit Corporation (acquired), and primarily due to asset size, Investors Bancorp, Inc. and Prosperity Bancshares, Inc.). It is important to note that in determining executive compensation, the Compensation Committee does not solely rely on comparative data from the 2017 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 available proxy and compensation 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. | | | | 2017 Peer Group (18 companies) | | | | Associated Banc-Corp BOK Financial Corporation Comerica Incorporated Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. E*TRADE Financial Corporation* East West Bancorp, Inc. FirstMerit Corporation*
First Republic Bancorp Huntington Bancshares Investors Bancorp, Inc.KeyCorp*
Prosperity Bancshares,M&T Bank Corporation*
New York Community Bancorp Inc.* Northern Trust Corporation* Regions Financial Corporation* Signature Bank Umpqua Holdings Corporation Webster Financial Corp. Zions Bancorporation | | | | |
* Acquired during 2016;New for performance benchmarking purposes, we replaced this company with the performance average of the applicable metric of the other peer companies at the end of 2016.2017 |
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| | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
Executive Performance Reviews In making compensation decisions or recommendations for individual executives, the Committee takes into consideration the performance reviews conducted for each executive officer, which includes a self-review of the prior year’s performance. The Committee meets and discusses with the CEO his assessment of the performance of the other executive officers, based on such self-reviews and the CEO’s own evaluation. The independent members of the Board meet and discuss, without the CEO present, their collective performance assessment of the CEO, taking into consideration his self-review and the individual evaluation provided by each Board member. Executives are evaluated based on Company performance as well as individual performance. Specific performance metrics for annual and long-term incentive awards are based on corporate-wide performance, including return on equity, total stockholder return, selected fee income, and relative performance against peers. All executives are subject to the same corporate-wide performance metrics. In addition, executives are evaluated based on his or her individual performance and overall contributions. Evaluation criteria may include, among other things: skills and expertise, demonstrated leadership, development of strategy, span of responsibility, achievement of corporate and personal goals, risk management, talent management, regulatory compliance, and alignment with the Company’s core values. 2017 NEO Compensation Decisions Highlights of the key compensation decisions for 2017 are set forth, the details of which are discussed in this CD&A section:* | ELEMENTSOF EXECUTIVE COMPENSATION |
| | | | | | | | | | | | | | | | | | Component and Purpose | | 2016 Key Highlights
| | | | | | General
Component | | NEOs
2017 Determinations | | | | | | | | | | | | | | 
| | | | Base Salary Provides ongoing fixed cash pay.
| | ---
| | Annual base salary stayed at prior year’s level or was increased between 1.6-6.0%NEO merit increases (2.7% - 22.0%) reflect broadening span of NEO responsibilities amidst an increasingly complex business environment
| 
| | | | | Annual Cash Incentives Provides short-term (annual) performance-based cash incentive compensation opportunity under our ICP.
| | No material changes to performance-based funding methodology for 2016: ¡2017: (i) 2/3 of the pool based on ROE performance against our
annual target ROE;budget; and
¡ (ii) 1/3 of the pool based on relative ROE performance
relative against peer performance.
the 2017 Peer Group. Based on the Company’s ROEabove performance above its annual target and its ranking against its peers, as well as the Company’s overall performance, 135%metrics, 153% of the 20162017 total ICP pool was funded. | | Annual ICP targets for NEOs stayed at prior year’s level or was increased by 11.1 to 16.7%. increased. For 2016,2017, actual ICP awarded ranged from 124%144% to 167% of individual target payout. | | | | | | | | | | | | | | 
| | | | 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 20162017 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 (funding threshold) and Selected Fee Income performance. | | 2016 allocation
2017 PRSUs represented 50% of the targettotal value of each executive’s totalNEO’s target long-term equity compensationcompensation. | | | | | | Stock Options Provides incentives for long-term creation of stockholder value over a 4-year period.
| | All stock options and RSU awards are subject to standard annual vesting over a4-year period | | 2016 allocation of stock options and RSU awards each represented 25% of the target value of each executive’s total equity compensationperiod. | | | | | | Restricted Stock Units (“ (“RSUs”) | | 2017 stock options and RSUs each represented 25% of the total value of each NEO’s target long-term equity compensation. | | | | | | | | | |
| * | Excluding Mr. Beck’s 2017 equity awards, which were granted in connection with his hiring in June 2017. |
| ** | Approximately 75% of the average total target compensation for NEOs, including the CEO, is at risk. |
35 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
| | | | | | | | | OVERVIEWOF NAMED EXECUTIVE OFFICERS | We have six named executive officers (“Provides incentivesNEOs”) for retention2017. These executives represent some of the Company’s key areas of focus in 2017 — our banking business, operational infrastructure, risk management and long-term creationfinancial performance. Their respective compensation for 2017 was commensurate with each of stockholder value over a 4-year period.his/her individual performance, his/her contributions to the Company’s overall performance, and his/her leadership and expanded span of responsibilities in his/her respective area. Mr. Descheneaux, our former Chief Financial Officer, was promoted effective June 2017 to the role of President, Silicon Valley Bank. Mr. Beck, our Chief Financial Officer who joined in June 2017, along with Mr. Dreyer and Ms. Izurieta are NEOs for the first time since joining the Company. | | | | 2017 NEOs  GREG BECKER,President and Chief Executive Officer
DAN BECK,Chief Financial Officer MICHAEL DESCHENEAUX,President, Silicon Valley Bank (former Chief Financial Officer; promoted in 2017) JOHN CHINA,Head of Technology Banking MICHAEL DREYER,Chief Operations Officer LAURA IZURIETA,Chief Risk Officer | | | | | | | | | | | | | |
ELEMENTSOF EXECUTIVE COMPENSATION 34
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
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Base Salary We pay 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. Such adjustments generally consist ofappropriate, typically as 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
Increase from 2015 | | | 2016 Annual Base Salary | | | | Year-Over-
Year
Increase | | 2017 Annual Base Salary | | | | | | | | | | | | | Greg Becker | | | | | | 1.6 | % | | | | | $ | 925,000 | | | | | | | 2.7% | | | | $ | 950,000 | | | | | | | | | | | | | | Dan Beck | | | | | — | | | | | 525,000 | | | | | | | | | | Michael Descheneaux | Michael Descheneaux | | | | — | | | | | | | 600,000 | | | | | | | 16.7 | | | | | 700,000 | | | | | | | | | | | | Marc Cadieux | | | | | | 5.9 | | | | | | | 450,000 | | | | | | | | | | | | | | | John China | | | | | | 4.2 | | | | | | | 500,000 | | | | | | | 5.0 | | | | | 525,000 | | | | | | | | | | | | | | Joan Parsons | | | | | | 4.2 | | | | | | | 500,000 | | | | | Michael Dreyer | | | | | 11.1 | | | | | 500,000 | | | | | | | | | | Laura Izurieta | | | | | 22.0 | | | | | 500,000 | | | |
In 2016,2017, each NEO, except our Chief Financial Officer (who was hired in 2017), received merit increase adjustments to their base salaries based on individual performance, salary market positioning relative to peers, and internal parity, as appropriate.applicable. Annual Cash Incentives (Incentive Compensation Plan) | | | | | | | | | | | | | | | | | | | | | | | (% of Annual Salary) | | | | | | | | | | | | | | NEO | | | Percentage
Increase from 2015 | | | 2016 Annual ICP Target (% of Annual
Base Salary) | | | | | Prior Year
(2016) ICP
Target | | | 2017 Annual ICP Target | | | | | | | | | | | | | Greg Becker | | | | | | 11.1 | % | | | | | | 100 | % | | | | | | | 100 | % | | | | | 100 | % | | | | | | | | | | | | Dan Beck | | | | | | — | | | | | | 70 | | | | | | | | | Michael Descheneaux | Michael Descheneaux | | | | 16.7 | | | | | | | 70 | | | | | | | | 70 | | | | | | 90 | | | | | | | | | | Marc Cadieux | | | | | | — | | | | | | | 50 | | | | | | | | | | | | | | | | John China | | | | | | 16.7 | | | | | | | 70 | | | | | | | | 70 | | | | | | 80 | | | | | | | | | | | | | Joan Parsons | | | | | | 16.7 | | | | | | | 70 | | | | | Michael Dreyer | | | | | | 60 | | | | | | 80 | | | | | | | | | Laura Izurieta | | | | | | 50 | | | | | | 60 | |
Our NEOs, as well as other executives including our NEOs,and employees, participate in the Company’s Incentive Compensation Plan (“ICP”), an annual cash incentive plan that rewards performance against individual and Company objectives. Each executive participant is assigned an incentive target, stated as a percentage of the individual’s annual base salary. Based on the Compensation Committee’s annual compensation review, in 2016,2017, ICP targets for NEOs except for our Chief Credit Officer, were increased to align targetsreflected the committee’s focus on balancing overall total target pay mix with an emphasis towards increasing the allocation ofat-risk compensation, as well as comparative peer and market compensation and to continue to balance overall total target pay mix.data for their respective positions. 36 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
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 performancepurposes, on an absolute basis, as well as relative to peers. Based on those metrics and overall Company performance, the Compensation Committeecommittee will also determine the extent to which the Company will fund the incentive pool for the broad employee base, including executive officers. For 2016,2017, 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.)as outlined below: | | | | Performance Metrics for ICP Funding
• ROE measured against budget • ROE relative to 20162017 Peer Group |
• ROE Performance Against Annual ROE TargetBudget(Two-Thirds (2/3) of Pool) -–Two-thirds (2/3) of the total incentive pool is funded based on the Company’s ROE performance (as adjusted for the exclusions discussed below) relative to our Board-approved annual target ROE. The(budget) ROE, as illustrated by the graph below illustratesto 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.left. There is a funding maximum of 200% of target (for achievement of 150% or over of our target ROE). In addition, Additionally, the Compensation Committee retains discretionfunding slope applicable to determinethesub-pool for executives is steeper than the extent to whichgeneral broad-based pool, where there is no formulaic funding for executives if the Company metmeets less than 90% of its ICP performanceannual target including discretionROE (compared to consider adjustments for certain out80% of the ordinary ortarget for employees).
non-recurringExclusions/Adjustments items. Adjustments are determined by the Compensation Committee, in coordination with the Audit Committee.
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| | | | | | | EXECUTIVE OFFICERS & COMPENSATION
The Compensation Discussion & Analysis |
For 2016,Committee retains discretion to determine the extent to which the Company met its ROE performance target. It may adjust for certain out of the ordinary ornon-recurring items, or other items that are subject to factors beyond management’s control, such as investment securities gains and losses or interest rate changes. Adjustments are determined by the Compensation Committee, in coordination with the Audit Committee. For 2017, excluded items included: (i) the impact from changes in Federal Reserve interest rates (not otherwise included in the
| | | | 2017 exclusions resulted in reduced overall funding of the ICP pool |
annual budget); (ii) certain gains or losses of the Company’s 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(iii) certaintax-related adjustments, including those relating to the annual budget);recently-enacted Tax Cuts and (iii) certain expenseJobs Act; and (iv) other various items relating toout-of-period adjustments due to refinementsorone-time events, such as the redemption of the Company’s Trust Preferred Securities and enhancements to our allowance for loan and lease losses methodology as well as changes to our deferred tax balances.SVB Analytics’ sale of its valuation business. The net impact of these exclusions resulted in a lower adjusted ROE metric that reduced the overall funding of the 2017 ICP pool. • • ROE Performance Against 20162017 Peer Group(One-Third (1/3) of Pool) - For 2016,– The otherone-third of the Compensation Committee also establishedtotal incentive pool is funded based on the Company’s actual ROE performance of 12.38% relative to the 20162017 Peer Group, as an additional ICP performance metric to fund 1/3 of the total pool. As illustrated in the graph below to the right, thereright. There is no payout if our performance falls in the bottom fourfive positions, and a payout maximum if our performance falls in the top threefour positions. The extent of funding earned is subject to straight-line interpolation based on ROE performance between the thirdfifth and thirteenthfourteenth ranked companies. * While the Compensation Committee retains discretion to fund a portion of the bonus pool if performance thresholds are not achieved, this discretion was not exercised in 2017. 37 Achieved 106.3% of our Annual ROE Target | | | | | | | Ranked in the 5th position against our 2016 Peer Group.EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
* | While the Compensation Committee retains discretion to fund a portion of the bonus pool if performance thresholds are not achieved, this discretion was not exercised in 2016.
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For 2016, the Compensation Committee determined that: (i) 2/3 of the total ICP pool would be funded at 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 total ICP pool would be funded at 180% of target, based on the Company’s relative ROE performance, ranking in the fifth position against the 2016 Peer Group. As a result,2017, the Compensation Committee approved the funding of the total ICP pool at 135%153% of total target.target, based on: (i) the Company’s ROE (as adjusted) of 12.11% against the annual target ROE of 10.53%, resulting in the funding of 130% for 2/3 of the total pool; and (ii) the Company��s ranking in the second highest position against our 2017 Peer Group, resulting in the maximum funding of 200% for 1/3 of the pool. 20162017 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 2016,2017, each NEO was awarded the ICP amounts set forth in the table to the right. | | | | | | | | | | | | | | NEO | | | | 20162017
ICP Award | | | | Greg Becker | | $ | 1,148,7501,435,000 | | | | Dan Beck | | | 325,000 | + | | | Michael Descheneaux | | | 625,000 | | | | Marc Cadieux
| | | 375,000965,000 | | | | John China | | | 525,000650,000 | | | | Joan ParsonsMichael Dreyer
| | | 475,000575,000 | | | | Laura Izurieta | | | 500,000 | | | |
| + | Represents a prorated award for Mr. Beck who was hired in June 2017. |
In determining such 20162017 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
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performance of the Company and the respective areas of oversight of each NEO in 2017, and (ii) each NEO’s contributions to our business and financial results, execution of our 20162017 corporate initiatives, corporate risk management, and broader leadership within the organization. Specifically for Mr. Becker, key factors considered included: Continued 2016 profitability:
Annual EPS increase by 10%
Annual net income available to common stockholders increase by 11%
Healthy Company growth: Total average assetfinancial performance and growth by 8%
Total average loan balances (net of unearned income) increase by 24%
Total average client funds (deposits and total client investment funds) balance growth by 9%in 2017:
| • | | ◾ Annual EPS increase by 26% ◾ Annual net income increase by 28% ◾ Average total asset growth by 10% ◾ Average total loan balances (net of unearned income) increase by 16% | | Continued◾ Average total client funds (deposits and total client investment funds) balance growth inby 15% non-GAAP◾ coreCore fee income growth of 19% (see Appendix A)20%*
◾ Continued stable credit performance |
Continued stabilityStrategic leadership of credit performance
Demonstrated leadershipthe Company, focusing on the growth of the core banking business domestically and internationally, including in the Company’s long-term strategic planning
Continued global growth, including expansion into thenew European and Canadian markets
Strong client focus; growth in market share — 16% increase in net client count
CorporateStrengthening of the corporate brand and steadfast focus on enterpriseclient satisfaction
Appropriate prioritization and focus on risk management and regulatory compliance Continued execution of the Company’s diversity and inclusion initiatives Ongoing development of executive leadership team Key factors considered by the Compensation Committee for the other NEOs, included: (i) for Mr. Beck, excellence in execution of overall financial management, particularly his leadership in capital management; (ii) for Mr. Descheneaux, his effective transition into his new role as President of the Bank, demonstrating strong leadership in strategic execution and global expansion; (iii) for Mr. China, his outstanding leadership of our Technology Banking business, especially continued client engagement and development of his leadership team with a focus on diverse talent; (iv) for Mr. Dreyer, his exceptional leadership in the continued strengthening of the Company’s operations and infrastructure to increase efficiencies; and (v) for Ms. Izurieta, her strong leadership in the continued strengthening and evolution of the Company’s risk management function. * Core Fee Income is comprised of our foreign exchange fees, credit card fees, deposit service charges, lending related fees, client investment fees and letters of credit fees — each of which are components of our noninterest income. Please see a reconciliation of Core Fee Income, anon-GAAP financial measure, to the most closely related GAAP financial measure on page 53 of our Annual Report on Form10-K for the year ended December 31, 2017. 38 | | | | | LONG-TERM EQUITY INCENTIVESEXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis |
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. 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 
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In 2017, 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. For information about the actual grants made in 2017, see the “Grants of Plan-Based Awards” under “Compensation for Named Executive Officers.” 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 seven7 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. 20162017 annual stock option and RSU grants were made effective as of May 2, 2016.2017. 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 Committeecommittee 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 with2017, the Compensation Committee utilized the same performance metric design for the PRSUs as in the prior year), theyear in all material respects. The NEOs were granted, effective as of February 16, 2016,21, 2017, PRSUs that were subject to performance-based vesting over a three-year3-year period (from 20162017 through 2018)2019) and certain designated performance metrics. To the extent earned, these awards are subject to additional time-based vesting through January 30, 2019.2020. The PRSUs arewere designed to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code. 2016Code under then current law. 2017 represents the first year of a three-year3-year performance period, hence none of the PRSUs granted in 20162017 have been earned. The performance metrics for the 2017 PRSUs are as follows: | | | | Performance Metrics
for PRSUs • TSR relative to 20162017 Peer Group • ROE (as funding threshold) • Selected Fee Income (foreign exchange
and credit card fees) | | | |
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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).
| | | •Relative TSR Against 2017 Peer Group (50% of Award). 50% of the PRSU award is funded at a maximum payout of 150% of target, and earned based on the Company’s TSR¡1 performance over a3-year performance period as ranked against the 2017 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 five positions. For 2017, the first year of the three year performance period, we ranked in the first position against our 2017 Peer Group. | |  | •ROE Funding Threshold and Selected Fee Income Target(50% of Award). The other fifty percent50% 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-year3-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. |
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| | | | 
| | 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. |
Company’s performance against the 3-year annual average of its budgeted annual income from foreign exchange fees and credit card fees (“Selected Fee Income”). Consistent with prior years, the committee determined Selected Fee Income as a 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. | | | | | 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.
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For 2017, the first year of the3-year performance period: (i) the Company’s actual ROE of 12.38% exceeded the 5% funding threshold; and (ii) the Company achieved $192.3 million in Selected Fee Income, or 95% of the budgeted total. 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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Previously Granted PRSU Awards for Performance Period Ended in 2017 In 2015, Messrs. Becker, Descheneaux and China were granted PRSU awards subject to performance over a three-year performance period (2015-2017). (Messrs. Beck and Dreyer and Ms. Izurieta had not yet joined the Company at the time of grant in 2015.) Similar to the 2017 PRSUs described above: (i) 50% of the award was subject to the Company’s TSR performance relative to peers, and (ii) 50% of the award was subject to the Company’s ROE (funding threshold) and Selected Fee Income performance. Upon completion of the performance period, the Compensation Committee determined that: (i) the Company’s relative TSR performance ranked in the first position against the applicable 2015 peer group (of 17 companies), and (ii) the 5% minimum ROE funding threshold was met, and the Company achieved 106%, 98% and 95% of its Selected Fee Income targets for 2015, 2016 and 2017, respectively. Consequently, the committee determined that 125% of the target PRSU awards were earned. The awards were also subject to a brief time-based vesting requirement, and were fully vested as of January 30, 2018. 381 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.
40 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
| OTHER COMPENSATIONFOR MARC CADIEUX |
In 2012 (beforeOther Compensation for CFO
When Mr. Beck joined the Company in June 2017 as Chief Financial Officer, he received the following as part of his compensation: (i) an equity award for 2017 with a value of approximately $650,000, of which 75% was appointed as an executive officer), Mr. Cadieux was awardedin the form of restricted stock units and 25% in the form of stock options, all of which are subject to4-year time-based vesting; (ii) a specialone-time long-termnew hire equity award of approximately $300,000 in the form of restricted stock units, which is also subject to a 4-year time-based vesting; and (iii) aone-time new hire cash retention award of $300,000, (“Special Long-Term Cash Award”), which wasis subject to: (i) cliff vesting on June 30, 2016; (ii) continuedto repayment if his employment and (iii) other minimum performance conditions. During the 2012-2016 vesting period, the award was invested under the Deferred Compensation Plan (“DCP”)is terminated in accordance with the termscertain circumstances within1-year of the plan. On June 30, 2016, Mr. Cadieux earned a total of $364,972, including his earnings under the DCP.start date. | | EXECUTIVE BENEFITSAND OTHER EXECUTIVE COMPENSATION-RELATED MATTERS |
Executive Benefits
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, we do not provide any pension, excess retirement or SERPssupplemental executive retirement (“SERP”) to our NEOs. Under our 401(k) Plan, our U.S. employees, including our NEOs, may make voluntarypre-tax and/or traditional/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. Under the ESOP, we may make discretionary annual contributions for U.S. employees, as determined by the Compensation Committee. ESOP contributions may be in the form of cash, the Company’s 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. ForSimilar to 2016, for 2017, the Compensation Committee established performance criteria based on the Company’s adjusted ROE against budget (same as the calculation of 2/3 of the total ICP pool) to fund the ESOP contribution, and set the funding level to 1.25% (reduced by 50% from the prior year as part of our ongoing initiatives to reduce non-interest expenses) of eligible compensation based on target ROE performance. Despite a higher allowable maximum under the ESOP, the Compensation Committee has committed to a funding maximum of 5%. Based on the Company’s 20162017 above-target ROE performance, the Compensation Committee approved a contribution of 1.4%1.63% of eligible compensation in cash (50%) and the Company’s common 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 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. 39
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
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We establish and maintain a bookkeeping account for each participant that 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. Except in connection with Mr. Cadieux’s Special Long-Term Cash Award (see above), no NEOs participated in the DCP in 2016. Among the NEOs, Messrs.Mr. Becker and Cadieux held balances underMs. Izurieta are participants in the plan during 2016.plan. Mr. Becker received in January 2017 the first of five annual installments relating to certain compensation deferred in 2005. 41 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
Health and Welfare Benefits/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. 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 for Named Executive Officers—Other Post-Employment Payments”below. Perquisites We do not have any executive perquisite programs. Other than our executive Change in Control Plan, we do not have any special executive programs that offer benefits exclusively to our executives. Our executives receive the same retirement, health, welfare and other benefits that are generally available to our employees, and may also participate in certain programs that are available to members of senior management, such as our Deferred Compensation Plan. From time to time and on a limited or exception basis, we may provide otherindividual benefits thatdeemed to be perquisites, which we generally believe serve, or are related to, a reasonable business-related or serve, a businessemployment 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 20162017 made to executive officers of the Company, except that the independent members of the Board approved equity grants made to the Chief Executive Officer.Officer based on the Compensation Committee’s recommendation. Except for certain awards that we believewere intended to qualify as performance-based compensation under Section 162(m) of the Code (as defined below), annual equity compensation grants to executives are typically made 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 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 four4 years, subject to continued employment or service. All 20162017 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 they commence employment. This approach ensures that the exercise price of stock options reflects 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 40
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation Discussion & Analysis
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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. 42 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation Discussion & Analysis |
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. Employment Agreements Except as required by law, we do not have any individual employment agreements for our executives. None of our NEOs have an employment agreement. 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 committeeCompensation Committee also approved a similar amendment to the Incentive Compensation PlanICP as it relates to incentive awards under the plan. Generally, the topic of compensation recovery policies continues to be an area of consideration for the Compensation Committee, taking into account the Company’s compensation program, market practices and applicable regulatory developments. Section 162(m) Prior to the adoption of the Tax Cuts and Jobs Act (“TCJ Act”) in late 2017, Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) limitslimited our deductibility of compensation paid to our CEO and each of the next three3 most highly compensated executive officers (excluding the Chief Financial Officer) in excess of $1,000,000, but excludesexcluded “performance-based compensation” from this limit. We believeHowever, under the TCJ Act, effective for taxable years beginning after December 31, 2017, the exemption for “performance-based compensation” has been repealed, such that compensation paid to our covered executive officers (including our Chief Financial Officer) will no longer be deductible to the extent it exceeds $1,000,000, unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. The 2017 stock options as well as beginning for the year 2015, ourand executives’ PRSU awards arewere designed to qualify as “performance-based compensation.” However, in ordercompensation” for purposes of Section 162(m), but because of the uncertainties relating to maintain flexibility and promote simplicity in the Compensation Committee’s administration of and oversight over executive compensation arrangements, other compensation arrangements,transition relief, no assurances can be given as to whether such as time-based restricted stock units that vest based solely on continued service and ICP payments, are not designed toawards will qualify as “performance-based compensation.” This design allowscompensation” exempt from the Compensation Committee to balance tax$1,000,000 deductibility with other business priorities that affect stockholder value. Compensation that we intend to qualify as “performance-based” under Section 162(m) is 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 (the “162(m) Committee”).
limit. 4143
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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 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 |
| | | Position | | Stock Value as Percentage of Annual Base Salary | Chief Executive Officer | | 600% | | President of Silicon Valley Bank | | 400% | Chief Credit Officer Chief Financial Officer Chief Operations Officer Chief Risk Officer Head of EMEA/President UK Branch Head of Technology Banking | | 300% | Chief Human Resources Officer Chief Information Officer Chief Marketing Officer General Counsel | | 200% |
There were no changes to the guidelines in 2017, other than establishing a new guideline for the role of the President of Silicon Valley Bank. All executive officers have five5 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, 2016,2017, all of our NEOs executive officers were in compliance with the applicable ownership guidelines or otherwise expected to achieve the requisite ownership levels within the designated five5 year time-frame. 4244
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COMPENSATION FOR NAMED EXECUTIVE OFFICERSCompensation for Named Executive Officers
Summary Compensation TableSUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid to our NEOs for the years ended December 31, 2017, 2016 and 2015, and 2014, respectively.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 | | | 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 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 President and Chief Executive Officer | | | 2017 | | | | 945,673 | | | | - | | | | 2,774,296 | | | | 926,248 | | | | 1,435,000 | | | | 25,494 | | | | 6,106,711 | | | | | 2016 | | | | 925,904 | | | | - | | | | 2,225,746 | | | | 807,501 | | | | 1,148,750 | | | | 17,879 | | | | 5,125,780 | | | | | 2015 | | | | 912,333 | | | | - | | | | 2,092,890 | | | | 670,964 | | | | 1,225,000 | | | | 25,947 | | | | 4,927,134 | | Dan Beck Chief Financial Officer | | | 2017 | | | | 302,885 | | | | 300,000 | | | | 749,654 | | | | 161,829 | | | | 325,000 | | | | 4,938 | | | | 1,844,306 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael Descheneaux (5) President, Silicon Valley Bank (former CFO) | | | 2017 | | | | 682,692 | | | | - | | | | 1,155,820 | | | | 385,917 | | | | 965,000 | | | | 18,559 | | | | 3,207,988 | | | | | 2016 | | | | 602,308 | | | | - | | | | 861,541 | | | | 312,566 | | | | 625,000 | | | | 53,977 | | | | 2,455,392 | | | | | 2015 | | | | 592,885 | | | | - | | | | 837,104 | | | | 268,394 | | | | 575,000 | | | | 22,508 | | | | 2,295,891 | | John China Head of Technology Banking | | | 2017 | | | | 520,673 | | | | - | | | | 693,529 | | | | 231,562 | | | | 650,000 | | | | 19,597 | | | | 2,115,361 | | | | | 2016 | | | | 498,385 | | | | - | | | | 538,395 | | | | 195,346 | | | | 525,000 | | | | 19,424 | | | | 1,776,550 | | | | | 2015 | | | | 479,308 | | | | - | | | | 456,520 | | | | 146,366 | | | | 525,000 | | | | 24,383 | | | | 1,631,577 | | Michael Dreyer Chief Operations Officer | | | 2017 | | | | 491,346 | | | | - | | | | 616,331 | | | | 205,788 | | | | 575,000 | | | | 19,181 | | | | 1,907,646 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Laura Izurieta Chief Risk Officer | | | 2017 | | | | 484,423 | | | | - | | | | 500,618 | | | | 167,213 | | | | 500,000 | | | | 21,748 | | | | 1,674,002 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) For Mr. Beck, the amount reflects a signing bonus paid following his hire in 2017. (1) | For Messrs. Descheneaux and China, and Ms. Parsons, the amounts reflect the value of a cash gift card given to each such executive in 2014. In addition, for Mr. Cadieux, the amount reflects aone-time deferred retention incentive of $300,000 plus accrued interest of $64,972. The award was granted to Mr. Cadieux in 2012 and became payable in June 2016.
|
(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 718”). The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-based Compensation” in our audited financial statements included in our Annual Report on Form10-K for the applicable year. The amounts disclosed under the “Stock Awards” column also include the fair value of grants of certain performance-based restricted stock unit awards reported based on achievement at target level. The aggregate maximum fair value of such awards, assuming the highest level of achievement of the performance conditions, is 150% of the target level. For details of 2016
(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 718”). The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-based Compensation” in our audited financial statements included in our Annual Report on Form10-K for the applicable year. The amounts disclosed under the “Stock Awards” column also include the fair value of grants of certain performance-based restricted stock unit awards reported based on achievement at target level. The aggregate maximum fair value of such awards, assuming the highest level of achievement of the performance conditions, is 150% of the target level. For details of 2017 grants, see “Grants of Plan-Based Awards” below. |
(3) | Non-Equity Incentive Plan Compensation includesis comprised of ICP Payments for each executive. |
(4) | The following table provides the amounts of other compensation, including perquisites, paid to, or on behalf of, our NEOs during 20162017 included in the “All Other Compensation” column. Perquisites and other personal benefits are valued on the basis of the aggregate incremental cost to the Company. |
| | | | | | | | | | | | | | | | | | | | | | | | 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 | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | Total | | $ | 17,879 | | | $ | 53,977 | | | $ | 17,093 | | | $ | 19,424 | | | $ | 19,149 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Greg
Becker | | | Dan
Beck | | | Michael
Descheneaux | | | John
China | | | Michael
Dreyer | | | Laura
Izurieta | | Imputed Income Tax Reimbursement (a) | | $ | 7,569 | | | $ | 32 | | | $ | 562 | | | $ | 1,672 | | | $ | 1,232 | | | $ | 3,809 | | ESOP | | | 4,401 | | | | 4,401 | | | | 4,401 | | | | 4,401 | | | | 4,401 | | | | 4,401 | | 401(k) Match | | | 13,524 | | | | 505 | | | | 13,596 | | | | 13,524 | | | | 13,548 | | | | 13,538 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | $ | 25,494 | | | $ | 4,938 | | | $ | 18,559 | | | $ | 19,597 | | | $ | 19,181 | | | $ | 21,748 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Amounts represent reimbursement payments of income taxes incurred by our NEOs on imputed income. For 2017, such imputed income was primarily associated with spousal travel and attendance to our business events where our NEOs’ spouses or significant others were invited, and expected, to attend, and our relocation program. Amounts represent reimbursement payments of income taxes incurred by our NEOs on imputed income. For 2016, such imputed income was primarily associated with spousal travel and attendance to our business events where our NEOs’ spouses or significant others were invited, and expected, to attend. For(5) In June 2017, Mr. Descheneaux, such imputed incomeformer Chief Financial Officer, was also associated with personal security expenses incurred during international travel.promoted to President, Silicon Valley Bank.
45 | (b) | Amounts for Mr. Descheneaux represent personal security expenses incurred during international travel in an amount of $23,832 and the cost of guest attendance at SVB events of $837.
| | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
(5) | In February 2017, Mr. China’s title changed from Head of Relationship Banking
GRANTSOF PLAN-BASED AWARDS The following table sets forth all plan-based awards, including equity awards andnon-equity incentive awards, made to Head of Technology Banking. In addition, Ms. Parsons served as Head of Specialty Bankingour NEOs during 2016 and was appointed to thenon-executive position of Credit Risk Manager for the Company’s global banking activities, effective Februaryyear ended December 31, 2017. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grant Date | | Compensation
Committee or
Board Approval
Date | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
(1) | | | Estimated Future Payouts Under
Equity Incentive Plan Awards
(2) | | | All Other
Stock
Awards;
Number of
Shares of
Stock or
Units (3) | | | All Other
Option
Awards;
Number of
Securities
Underlying
Options | | | Exercise
or Base
Price of
Option
Awards | | | Grant Date
Fair Value
of Stock and
Option
Awards
(4) | | | Name | | | | Threshold
($) | | | Target ($) | | | Maximum
($) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | | | | | Greg Becker | | January 26, 2017 | | January 26, 2017 | | | - | | | | 950,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | February 21, 2017 | | February 21, 2017 | | | - | | | | - | | | | - | | | | 5,056 | | | | 10,112 | | | | 15,168 | | | | - | | | | - | | | | - | | | | 1,892,157 | | | | May 2, 2017 | | February 21, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 4,945 | | | | - | | | | - | | | | 882,139 | | | | May 2, 2017 | | February 21, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 15,920 | | | | 178.39 | | | | 926,248 | | Dan Beck | | June 5, 2017 | | April 26, 2017 | | | - | | | | 367,500 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | June 5, 2017 | | May 5, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 4,423 | | | | - | | | | - | | | | 749,654 | | | | June 5, 2017 | | May 5, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,939 | | | | 169.49 | | | | 161,829 | | Michael Descheneaux | | January 25, 2017 | | January 25, 2017 | | | - | | | | 630,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | February 21, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | 2,106 | | | | 4,213 | | | | 6,319 | | | | - | | | | - | | | | - | | | | 788,337 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,060 | | | | - | | | | - | | | | 367,483 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 6,633 | | | | 178.39 | | | | 385,917 | | John China | | January 25, 2017 | | January 25, 2017 | | | - | | | | 420,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | February 21, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | 1,264 | | | | 2,528 | | | | 3,792 | | | | - | | | | - | | | | - | | | | 473,039 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,236 | | | | - | | | | - | | | | 220,490 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 3,980 | | | | 178.39 | | | | 231,562 | | Michael Dreyer | | January 25, 2017 | | January 25, 2017 | | | - | | | | 400,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | February 21, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | 1,123 | | | | 2,247 | | | | 3,370 | | | | - | | | | - | | | | - | | | | 420,459 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,098 | | | | - | | | | - | | | | 195,872 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 3,537 | | | | 178.39 | | | | 205,788 | | Laura Izurieta | | January 25, 2017 | | January 25, 2017 | | | - | | | | 300,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | February 21, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | 912 | | | | 1,825 | | | | 2,737 | | | | - | | | | - | | | | - | | | | 341,494 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 892 | | | | - | | | | - | | | | 159,124 | | | | May 2, 2017 | | February 7, 2017 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2,874 | | | | 178.39 | | | | 167,213 | |
| (1) | The ICP amounts represent target levels. There are no individual thresholds or maximum amounts. |
43
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
Grants of Plan-Based Awards
The following table sets forth all plan-based awards, including equity awards andnon-equity incentive awards, made to our NEOs during the year ended December 31, 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 | | Grant Date
Fair Value
of Stock
and Option
Awards(4) | Name | | Grant Date | | | Threshold
($) | | Target ($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | | | Greg Becker | | February 16, 2016 | | February 16, 2016 | | | | - | | | | | 925,000 | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | Greg Becker | | February 16, 2016 | | February 16, 2016 | | | | - | | | | | - | | | | | - | | | | | 8,333 | | | | | 16,666 | | | | | 24,999 | | | | | - | | | | | - | | | | | - | | | | | 1,456,775 | | Greg Becker | | May 2, 2016 | | February 16, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 7,311 | | | | | - | | | | | - | | | | | 768,971 | | Greg Becker | | May 2, 2016 | | February 16, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 24,951 | | | | | 105.18 | | | | | 807,501 | | Michael Descheneaux | | February 9, 2016 | | February 9, 2016 | | | | - | | | | | 420,000 | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | Michael Descheneaux | | February 16, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | 3,225 | | | | | 6,451 | | | | | 9,676 | | | | | - | | | | | - | | | | | - | | | | | 563,882 | | Michael Descheneaux | | May 2, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 2,830 | | | | | - | | | | | - | | | | | 297,659 | | Michael Descheneaux | | 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 | | February 9, 2016 | | February 9, 2016 | | | | - | | | | | 350,000 | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | John China | | February 16, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | 2,016 | | | | | 4,032 | | | | | 6,048 | | | | | - | | | | | - | | | | | - | | | | | 352,437 | | John China | | May 2, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 1,768 | | | | | - | | | | | - | | | | | 185,958 | | John China | | May 2, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 6,036 | | | | | 105.18 | | | | | 195,346 | | Joan Parsons | | February 9, 2016 | | February 9, 2016 | | | | - | | | | | 350,000 | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | Joan Parsons | | February 16, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | 1,747 | | | | | 3,494 | | | | | 5,241 | | | | | - | | | | | - | | | | | - | | | | | 305,411 | | Joan Parsons | | May 2, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 1,533 | | | | | - | | | | | - | | | | | 161,241 | | Joan Parsons | | May 2, 2016 | | February 9, 2016 | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | - | | | | | 5,231 | | | | | 105.18 | | | | | 169,293 | |
(1) | The ICP amounts represent target levels. There are no individual thresholds or maximum amounts.
|
(2) | For the performance-based restricted stock unit grants to the NEOs made in 2016,
| (2) | For the performance-based restricted stock unit grants to the NEOs made in 2017, the performance achievement will be determined as of December 31, 2019 for the 2017-2019 performance period based upon the performance criteria presented under “Compensation Discussion and Analysis—Equity Incentives” above. |
| (3) | The stock awards reported reflect restricted stock unit awards granted to each NEO. |
| (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 stock options and stock awards granted in the fiscal year indicated, which were computed in accordance with ASC Topic 718. The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-based Compensation” of our audited financial statements included in our Annual Report on Form10-K for the applicable year. |
OPTION EXERCISESAND STOCK VESTED The following table sets forth the number of securities underlying equity awards that vested (in the case of restricted stock) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2017, and the value realized upon such vesting or exercise. | | | | | | | | | | | | | | | | | | | | 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 | | Greg Becker | | | 33,405 | | | $ | 4,729,537 | | | | 16,660 | | | $ | 2,943,156 | | Dan Beck | | | - | | | | - | | | | - | | | | - | | Michael Descheneaux | | | 21,375 | | | | 2,449,471 | | | | 7,437 | | | | 1,314,387 | | John China | | | 152 | | | | 26,881 | | | | 4,219 | | | | 746,123 | | Michael Dreyer | | | - | | | | - | | | | 2,774 | | | | 566,926 | | Laura lzurieta | | | - | | | | - | | | | 921 | | | | 158,900 | |
46 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
OUTSTANDING EQUITY AWARDSAT FISCAL YEAR END The following tables set forth all outstanding equity awards to the NEOs as of December 31, 20182017. The exercise price for each of the 2016-2018 performance periodstock 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 table below. Outstanding stock awards are valued based upon the performance criteria presented under “Compensation Discussion and Analysis-Equity Incentives” above. |
(3) | The stock awards reported reflect restricted stock unit awards granted to each NEO.
|
(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 stock options and stock awards granted in the fiscal year indicated, which were computed in accordance with ASC Topic 718. The amounts disclosed may never be realized. Assumptions used in calculating these amounts are included in the note entitled “Share-based Compensation”closing market price of our audited financial statements included in our Annual Report on Form10-K for the applicable year.stock as of December 29, 2017, which was $233.77 per share.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | Greg Becker | | | 28,828 | | | | - | | | | | | - | | | $ | 71.11 | | | | April 30, 2020 | | | | - | | | | - | | | | 1,008 | (1) | | $ | 235,640 | | | | | 18,258 | | | | 6,085 | (1) | | | | | - | | | | 107.98 | | | | April 29, 2021 | | | | - | | | | - | | | | 2,685 | (2) | | | 627,672 | | | | | 8,119 | | | | 8,118 | (2) | | | | | - | | | | 129.81 | | | | May 1, 2022 | | | | - | | | | - | | | | 5,483 | (3) | | | 1,281,761 | | | | | 6,238 | | | | 18,713 | (3) | | | | | - | | | | 105.18 | | | | May 2, 2023 | | | | - | | | | - | | | | 4,945 | (4) | | | 1,155,993 | | | | | - | | | | 15,920 | (4) | | | | | - | | | | 178.39 | | | | May 2, 2024 | | | | - | | | | - | | | | 16,500 | (5) | | | 3,857,205 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,999 | (6) | | | 5,844,016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,168 | (7) | | | 3,545,823 | | Dan Beck | | | - | | | | 2,939 | (8) | | | | | - | | | $ | 169.49 | | | | June 5, 2024 | | | | - | | | | - | | | | 4,423 | (8) | | $ | 1,033,965 | | Michael Descheneaux | | | 11,325 | | | | - | | | | | | - | | | $ | 71.11 | | | | April 30, 2020 | | | | - | | | | - | | | | 443 | (1) | | $ | 103,560 | | | | | 8,034 | | | | 2,677 | (1) | | | | | - | | | | 107.98 | | | | April 29, 2021 | | | | - | | | | - | | | | 1,074 | (2) | | | 251,069 | | | | | 3,248 | | | | 3,247 | (2) | | | | | - | | | | 129.81 | | | | May 1, 2022 | | | | - | | | | - | | | | 2,122 | (3) | | | 496,060 | | | | | 2,415 | | | | 7,243 | (3) | | | | | - | | | | 105.18 | | | | May 2, 2023 | | | | - | | | | - | | | | 2,060 | (4) | | | 481,566 | | | | | - | | | | 6,633 | (4) | | | | | - | | | | 178.39 | | | | May 2, 2024 | | | | - | | | | - | | | | 6,600 | (5) | | | 1,542,882 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,676 | (6) | | | 2,261,959 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,319 | (7) | | | 1,477,193 | | John China | | | 6,600 | | | | - | | | | | | - | | | $ | 64.37 | | | | May 1, 2019 | | | | - | | | | - | | | | 241 | (1) | | $ | 56,339 | | | | | 8,600 | | | | - | | | | | | - | | | | 71.11 | | | | April 30, 2020 | | | | - | | | | - | | | | 585 | (2) | | | 136,755 | | | | | 4,382 | | | | 1,460 | (1) | | | | | - | | | | 107.98 | | | | April 29, 2021 | | | | - | | | | - | | | | 1,326 | (3) | | | 309,979 | | | | | 1,772 | | | | 1,770 | (2) | | | | | - | | | | 129.81 | | | | May 1, 2022 | | | | - | | | | - | | | | 1,236 | (4) | | | 288,940 | | | | | 1,509 | | | | 4,527 | (3) | | | | | - | | | | 105.18 | | | | May 2, 2023 | | | | - | | | | - | | | | 3,600 | (5) | | | 841,572 | | | | | - | | | | 3,980 | (4) | | | | | - | | | | 178.39 | | | | May 2, 2024 | | | | - | | | | - | | | | 6,048 | (6) | | | 1,413,841 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,792 | (7) | | | 886,456 | | Michael Dreyer | | | - | | | | 3,537 | (4) | | | | | - | | | $ | 178.39 | | | | May 2, 2024 | | | | - | | | | - | | | | 4,032 | (9) | | $ | 942,561 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,272 | (10) | | | 531,125 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,098 | (4) | | | 256,679 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,370 | (7) | | | 787,805 | | Laura Izurieta | | | - | | | | 2,874 | (4) | | | | | - | | | $ | 178.39 | | | | May 2, 2024 | | | | - | | | | - | | | | 2,762 | (11) | | $ | 645,673 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 892 | (4) | | | 208,523 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,737 | (7) | | | 639,828 | |
| (1) | Options and awards scheduled to vest on April 29, 2018. |
Option Exercises and Stock Vested
The following table sets forth the number of securities underlying equity awards that vested (in the case of restricted stock) or were exercised (in the case of stock options) by the NEOs during the year ended December 31, 2016, and the value realized upon such vesting or exercise.
| | | | | | | | | | | | | | | | | | | | 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 | | Greg Becker | | | - | | | $ | - | | | | 5,851 | | | $ | 614,501 | | Michael Descheneaux | | | 6,500 | | | | 308,366 | | | | 2,981 | | | | 313,142 | | Marc Cadieux | | | 4,000 | | | | 348,345 | | | | 2,060 | | | | 218,112 | | John China | | | 8,572 | | | | 668,015 | | | | 1,610 | | | | 169,122 | | Joan Parsons | | | - | | | | - | | | | 1,635 | | | | 171,752 | |
44
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
| (2) | Options and awards scheduled to vest with respect toone-half of the underlying shares on each of May 1, 2018 and 2019, respectively. |
Outstanding Equity Awards at Fiscal Year End
The following tables set forth all outstanding equity awards to the NEOs as of December 31, 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 table below. Outstanding stock awards are valued based upon the closing market price of our stock as of December 30, 2016, which was $171.66 per share.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | | Greg Becker | | | 13,894 | | | | - | | | | - | | | $ | 60.37 | | | | April 27, 2018 | | | | - | | | | - | | | | 2,200 | (1) | | $ | 377,652 | | | | | 19,511 | | | | - | | | | - | | | | 64.37 | | | | May 1, 2019 | | | | - | | | | - | | | | 2,016 | (2) | | | 346,067 | | | | | 20,928 | | | | 7,900 | (1) | | | - | | | | 71.11 | | | | April 30, 2020 | | | | - | | | | - | | | | 4,028 | (3) | | | 691,446 | | | | | 12,172 | | | | 12,171 | (2) | | | - | | | | 107.98 | | | | April 29, 2021 | | | | - | | | | - | | | | 7,311 | (4) | | | 1,255,006 | | | | | 4,060 | | | | 12,177 | (3) | | | - | | | | 129.81 | | | | May 1, 2022 | | | | - | | | | - | | | | 10,281 | (5) | | | 1,764,836 | | | | | - | | | | 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 | |
| (3) | Options and awards scheduled to vest with respect toone-third of the underlying shares on each of May 2, 2018, 2019 and 2020, respectively. (1) | Options and restricted stock unit awards scheduled to vest on April 30, 2017.
|
(2) | Options and restricted stock unit awards scheduled to vest with respect toone-half of the underlying shares on each of April 29, 2017 and 2018, respectively.
|
(3) | Options and restricted stock unit awards scheduled to vest with respect toone-third
|
| (4) | Options and awards scheduled to vest with respect toone-fourth of the underlying shares on each of May 2, 2018, 2019, 2020 and 2021, respectively. |
| (5) | Reflects performance-based restricted stock units scheduled to vest on January 30, 2018, assuming maximum award at 150% of target. Following the fiscalyear-end, the actual shares earned pursuant to these awards were determined to be 125% of target. |
| (6) | Performance-based restricted stock units scheduled to vest on January 30, 2019, assuming maximum award at 150% of target. |
| (7) | Performance-based restricted stock units scheduled to vest on January 30, 2020, assuming maximum award at 150% of target. |
| (8) | Options and awards scheduled to vest with respect toone-fourth of the underlying shares on each of June 5, 2018, 2019, 2020 and 2021, respectively. |
| (9) | Restricted stock units scheduled to vest with respect toone-half of the underlying shares on each of November 12, 2018 and 2019, respectively. |
| (10) | Restricted stock units scheduled to vest with respect toone-third of the underlying shares on each of August 1, 2018, 2019 and 2020, respectively. |
| (11) | Restricted stock units scheduled to vest with respect toone-third of the underlying shares on each of September 1, 2017, 2018 and 2019, respectively. |
(4) | Options and restricted stock unit awards scheduled to vest with respect toone-fourth of the underlying shares on each of May 2, 2017, 2018, 2019 and 2020, respectively.
|
(5) | Performance-based restricted stock units vested at 150% of target on January 30, 2017.
47 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
(6) | Performance-based restricted stock units scheduled
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, vestearnings from, and distributions ofnon-qualified deferred compensation under our Deferred Compensation Plan. There were no above-market or preferential earnings on January 30, 2018 and reported at 150% of target assuming the highest level of achievement of the performance conditions. |
(7) | Performance-based restricted stock units scheduled to vest on January 30, 2019 and reported at 150% of target assuming the highest level of achievement of the performance conditions.
|
(8) | Restricted stock units scheduled to vest on September 3, 2017.
|
45
| | | | | EXECUTIVE OFFICERS & COMPENSATIONany compensation that was deferred. We do not maintain any othernon-qualified deferred compensation program for our NEOs.
Compensation for NEOs
|
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 Last
December 31,
2016 | | | Executive
Contributions in
Last FY (1) | | | Registrant
Contributions in
Last FY (1) | | | Aggregate
Earnings in
Last FY (1) | | | Aggregate
Withdrawals/
Distributions
(1) | | | Aggregate
Balance at Last
December 31,
2017 (1) | | Greg Becker (1) | | $ | - | | | $ | - | | | $ | 14,692 | | | $ | - | | | $ | 186,582 | | | Greg Becker (2) | | | $ | - | | | $ | - | | | $ | 33,790 | | | $ | 37,951 | | | $ | 182,421 | | Dan Beck | | | | - | | | | - | | | | - | | | | - | | | | - | | Michael Descheneaux | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | Marc Cadieux | | | - | | | | - | | | | - | | | | - | | | | - | | | John China | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | Joan Parsons | | | - | | | | - | | | | - | | | | - | | | | - | | | Michael Dreyer | | | | - | | | | - | | | | - | | | | - | | | | - | | Laura Izurieta (3) | | | $ | 46,692 | | | | - | | | $ | 4,152 | | | | - | | | $ | 50,844 | |
| (1) | Mr. Becker elected to participate in the Deferred Compensation Plan in 2005. No additional contributions were made during 2016. The amounts in the above table are not required to be, and are not, reflected in the Summary Compensation Table above.
|
Other Post-Employment Payments
| (2) | Mr. Becker elected to participate in the Deferred Compensation Plan in 2005. No additional contributions were made during 2017. |
| (3) | Ms. Izurieta elected to participate in the Deferred Compensation Plan in 2017. |
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”), 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. Generally 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 amount provided for the last full calendar year; or (iv) a relocation of more than 50 miles. We adopted this plan in order to ensure that our executives remain incented to consider and, if it is determined by the Board or stockholders (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 Changeplan in Control Plan in 2016.2017. The Change in Control Planplan 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 certain executive officers, including the Chief Financial Officer,chief financial officer and the Bank’s President and the Chief Strategy Officer, as applicable,president, 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 in control” are set forth in the Change in Control Plan. Generally, a change in control includes a merger or consolidation, other than a merger or consolidation in which the owners of our voting securities own 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 12 months of the occurrence of such event, a change in the composition of the Board occurs as a result of which 60% or fewer of the directors are incumbent directors. 4648
| | | | | 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. 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 theirour affiliates for a period of (i) 18 months, in the case of the Chief Executive Officerchief executive officer (ii) 12 months, in the case of the Chief Financial Officer,chief financial officer and the Bank’s President and Chief Strategy Officer, as applicablepresident and (iii) six months, in the case of most other covered executives. In addition, unless we provide otherwise in writing, the executive may not directly or indirectly solicit, recruit, 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 plan 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. 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 our workforce and structure, while providing a reasonable level of certainty and job security to our employees. The policy covers all regular full-time and part-time employees, including the NEOs. The Severance Benefit Policy provides for a cash severance payment based onjob-level. For NEOs, this benefit is equal to six weeks’ pay per year of service including apro-rata amount for each partial year worked, with a minimum benefit of six months’ pay and a maximum benefit of one 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 pay designated outplacement services provided by a Company-selected external vendor. Any benefits payable to an executive under this policy 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 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. Certain Executive Severance Arrangements 47In connection with Mr. Descheneaux’s promotion to the role of President, Silicon Valley Bank during 2017, we provided Mr. Descheneaux with a limited severance arrangement. Under the arrangement, in the event Mr. Descheneaux is terminated other than for cause or by reason of his death or disability following the his appointment, but on or before July 1, 2019, he will be entitled to receive the greater of: (A) the direct cash amount he would be eligible to receive under the Company’s Severance Benefit Policy (and if applicable, the Company’s Change in Control Severance Plan) or (B) if the termination occurs on or after (i) the effectiveness of his appointment through December 31, 2017, a multiple of two times his annual base salary and incentive compensation; (ii) January 1, 2018 through July 1, 2018, a multiple of one andone-half times his base salary and incentive compensation; (iii) July 2, 2018 through December 31, 2018, a multiple of one times his base salary and incentive compensation; or (iv) January 1, 2019 through July 1, 2019, a multiple ofone-half times his base salary and incentive compensation, each as in effect at such time. Following July 1, 2019, Mr. Descheneaux will only be eligible to receive severance benefits in accordance with the plans, programs or policies of the Company as may be in effect from time to time.
49 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
Payments upon Termination of EmploymentPAYMENTSUPON TERMINATIONOF EMPLOYMENT
The following tables summarize the payments that would be payable to our NEOs, as of December 31, 2016,2017, 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 | | | GREG BECKER, PRESIDENT & 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 | | 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 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 950,000 | | | $ | 5,700,000 | | | $ | - | | | $ | - | | Market value of vested, exercisable stock options (3) | | | 6,688,933 | | | | - | | | | 6,688,933 | | | | 6,688,933 | | | | 6,688,933 | | | | 6,688,933 | | | | 8,632,032 | | | | - | | | | 8,632,032 | | | | 8,632,032 | | | | 8,632,032 | | | | 8,632,032 | | Market value of unvested stock options which would vest (4) | | | - | | | | - | | | | - | | | | 3,737,744 | | | | 3,737,744 | | | | 3,737,744 | | | | - | | | | - | | | | - | | | | 4,897,334 | | | | 4,897,334 | | | | 4,897,334 | | Market value of unvested restricted stock which would vest (4) | | | - | | | | - | | | | - | | | | 9,184,153 | (5) | | | 6,649,593 | (6) | | | 6,649,593 | (6) | | | - | | | | - | | | | - | | | | 12,775,297 | (5) | | | 9,901,562 | (6) | | | 9,901,562 | (6) | Company-paid health benefits | | | - | | | | - | | | | 13,258 | | | | 13,502 | | | | - | | | | - | | | | - | | | | - | | | | 13,501 | | | | 17,992 | | | | - | | | | - | | Accelerated retirement plan vesting | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | �� | | - | | Company-paid outplacement benefits | | | - | | | | - | | | | 20,000 | | | | 20,000 | | | | - | | | | - | | | | - | | | | - | | | | 20,000 | | | | 20,000 | | | | - | | | | - | | Deferred Compensation Plan balance payable (7) | | | 186,582 | | | | 186,582 | | | | 186,582 | | | | 186,582 | | | | 186,582 | | | | 186,582 | | | | 182,421 | | | | 182,421 | | | | 182,421 | | | | 182,421 | | | | 182,421 | | | | 182,421 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | 6,875,515 | | | $ | 186,582 | | | $ | 7,833,773 | | | $ | 25,380,914 | | | $ | 17,262,852 | | | $ | 17,262,852 | | | $ | 8,814,453 | | | $ | 182,421 | | | $ | 9,797,954 | | | $ | 32,225,076 | | | $ | 23,613,349 | | | $ | 23,613,349 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under “Involuntary Termination (Not for Cause)” are calculated based on the terms of our U.S. Severance Benefit Policy. |
| (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 achange-in-control event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted. |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (4) | The market value of unvested equity that would vest is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (5) | The amount reported is comprised of (i) the market value of unvested restricted stock of $2,670,171$3,301,066 and (ii) the market value of performance-based restricted stock unit awards of $6,513,982$9,474,231 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| (6) | The amount reported is comprised of (i) the market value of unvested restricted stock of $2,670,171$3,301,066 and (ii) the market value of performance-based restricted stock unit awards of $3,979,422$6,600,496 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| (7) | Deferred Compensation Plan balance for Mr. Becker reflects account balance as of December 31, 2016.2017. Mr. Becker is entitled to receive his account balance under each of the termination scenarios, to be paid in accordance with the plan and Mr. Becker’s payment election. |
| | | | MICHAEL DESCHENEAUX, CHIEF FINANCIAL OFFICER | | | DAN BECK, 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 | | 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 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 262,500 | | | $ | 1,785,000 | | | $ | - | | | $ | - | | 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)(3) | | | - | | | | - | | | | - | | | | 1,621,800 | | | | 1,621,800 | | | | 1,621,800 | | | | - | | | | - | | | | - | | | | 188,919 | | | | 188,919 | | | | 188,919 | | Market value of unvested restricted stock which would vest (4)(3) | | | - | | | | - | | | | - | | | | 3,763,989 | (5) | | | 2,774,712 | (6) | | | 2,774,712 | (6) | | | - | | | | - | | | | - | | | | 1,033,965 | (4) | | | 1,033,965 | (4) | | | 1,033,965 | (4) | Company-paid health benefits | | | - | | | | - | | | | 20,628 | | | | 21,007 | | | | - | | | | - | | | | - | | | | - | | | | 10,503 | | | | 27,178 | | | | - | | | | - | | Accelerated retirement plan vesting | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | Company-paid outplacement benefits | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | Deferred Compensation Plan balance payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | 3,403,417 | | | $ | - | | | $ | 4,031,545 | | | $ | 10,857,713 | | | $ | 7,799,929 | | | $ | 7,799,929 | | | $ | - | | | $ | - | | | $ | 280,503 | | | $ | 3,042,562 | | | $ | 1,222,884 | | | $ | 1,222,884 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under “Involuntary Termination (Not for Cause)” are calculated based on the terms of our U.S. Severance Benefit Policy. |
| (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 achange-in-control event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted. |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (4) | The amount reported is comprised of the market value of unvested restricted stock. See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
4850
| | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | MICHAEL DESCHENEAUX, PRESIDENT, SILICON VALLEY BANK | | | 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 | | $ | - | | | $ | - | | | $ | 2,660,000 | | | $ | 2,660,000 | | | $ | - | | | $ | - | | Market value of vested, exercisable stock options (3) | | | 3,500,928 | | | | - | | | | 3,500,928 | | | | 3,500,928 | | | | 3,500,928 | | | | 3,500,928 | | Market value of unvested stock options which would vest (4) | | | - | | | | - | | | | - | | | | 1,973,011 | | | | 1,973,011 | | | | 1,973,011 | | Market value of unvested restricted stock which would vest (4) | | | - | | | | - | | | | - | | | | 5,110,913 | (5) | | | 3,951,882 | (6) | | | 3,951,882 | (6) | Company-paid health benefits | | | - | | | | - | | | | - | | | | 27,178 | | | | - | | | | - | | Accelerated retirement plan vesting | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | Company-paid outplacement benefits | | | - | | | | - | | | | - | | | | 7,500 | | | | - | | | | - | | Deferred Compensation Plan balance payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | 3,500,928 | | | $ | - | | | $ | 6,160,928 | | | $ | 13,279,530 | | | $ | 9,425,821 | | | $ | 9,425,821 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Cash severance pay reported under “Involuntary Termination (Not for Cause)” is calculated based on the terms of Mr. Descheneaux’s severance agreement. |
| (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 achange-in-control event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted. |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of $233.77 per share (the closing stock price as of December 29, 2017). |
| (4) | The market value of unvested equity that would vest is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (5) | The amount reported is comprised of (i) the market value of unvested restricted stock of $1,124,716$1,332,255 and (ii) the market value of performance-based restricted stock unit awards of $2,639,273$3,778,658 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| (6) | The amount reported is comprised of (i) the market value of unvested restricted stock of $1,124,716$1,332,255 and (ii) the market value of performance-based restricted stock unit awards of $1,649,996$2,619,627 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2016 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| | | | MARC CADIEUX, CHIEF CREDIT OFFICER | | | 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 | | 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 | | $ | - | | | $ | - | | | $ | 450,000 | | | $ | 675,000 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 525,000 | | | $ | 945,000 | | | $ | - | | | $ | - | | Market value of vested, exercisable stock options (3) | | | 1,395,031 | | | | - | | | | 1,395,031 | | | | 1,395,031 | | | | 1,395,031 | | | | 1,395,031 | | | | 3,446,387 | | | | - | | | | 3,446,387 | | | | 3,446,387 | | | | 3,446,387 | | | | 3,446,387 | | Market value of unvested stock options which would vest (4) | | | - | | | | - | | | | - | | | | 638,048 | | | | 638,048 | | | | 638,048 | | | | - | | | | - | | | | - | | | | 1,170,202 | | | | 1,170,202 | | | | 1,170,202 | | Market value of unvested restricted stock which would vest (4) | | | - | | | | - | | | | - | | | | 1,821,999 | (5) | | | 1,347,874 | (6) | | | 1,347,874 | (6) | | | - | | | | - | | | | - | | | | 3,026,854 | (5) | | | 2,318,765 | (6) | | | 2,318,765 | (6) | Company-paid health benefits | | | - | | | | - | | | | 21,142 | | | | 21,532 | | | | - | | | | - | | | | - | | | | - | | | | 21,006 | | | | 27,178 | | | | - | | | | - | | Accelerated retirement plan vesting | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | Company-paid outplacement benefits | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | Deferred Compensation Plan balance payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | 1,395,031 | | | $ | - | | | $ | 1,873,673 | | | $ | 4,559,110 | | | $ | 3,380,953 | | | $ | 3,380,953 | | | $ | 3,446,387 | | | $ | - | | | $ | 3,999,893 | | | $ | 8,623,121 | | | $ | 6,935,354 | | | $ | 6,935,354 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under “Involuntary Termination (Not for Cause)” are calculated based on the terms of our U.S. Severance Benefit Policy. |
| (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 achange-in-control event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards are not assumed or substituted. |
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (4) | The market value of unvested equity that would vest is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (5) | The amount reported is comprised of (i) the market value of unvested restricted stock of $627,932$792,013 and (ii) the market value of performance-based restricted stock unit awards of $1,194,067$2,234,841 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| (6) | The amount reported is comprised of (i) the market value of unvested restricted stock of $627,932$792,013 and (ii) the market value of performance-based restricted stock unit awards of $719,942$1,526,752 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | 1,597,564 | | | $ | - | | | $ | 2,125,692 | | | $ | 5,588,389 | | | $ | 4,111,476 | | | $ | 4,111,476 | | | | | | | | | | | | | | | | | | | | | | | | | | |
51 | | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | MICHAEL DREYER, CHIEF OPERATIONS 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 | | $ | - | | | $ | - | | | $ | 250,000 | | | $ | 900,000 | | | $ | - | | | $ | - | | Market value of vested, exercisable stock options | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | Market value of unvested stock options which would vest (3) | | | - | | | | - | | | | - | | | | 195,879 | | | | 195,879 | | | | 195,879 | | Market value of unvested restricted stock which would vest (3) | | | - | | | | - | | | | - | | | | 2,255,647 | (4) | | | 1,905,460 | (5) | | | 1,905,460 | (5) | Company-paid health benefits | | | - | | | | - | | | | 10,503 | | | | 27,178 | | | | - | | | | - | | Accelerated retirement plan vesting (6) | | | - | | | | - | | | | - | | | | 4,648 | | | | 4,648 | | | | 4,648 | | Company-paid outplacement benefits | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | Deferred Compensation Plan balance payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | - | | | $ | - | | | $ | 268,003 | | | $ | 3,390,852 | | | $ | 2,105,987 | | | $ | 2,105,987 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under “Involuntary Termination (Not for Cause)” are calculated based on the terms of our U.S. Severance Benefit Policy. |
| (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 achange-in-control event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards haveare not been assumed or substituted. |
49
| | | | | EXECUTIVE OFFICERS & COMPENSATION
Compensation for NEOs
|
| (3) | The market value of vested, exercisable stock options is calculated assuming a market value of $171.66 per share (the closing stock price as of December 30, 2016).
|
(4) | The market value of unvested equity that would vest is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017). |
| (4) | The amount reported is comprised of (i) the market value of unvested restricted stock of $1,730,366 and (ii) the market value of performance-based restricted stock unit awards of $525,281 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| (5) | The amount reported is comprised of (i) the market value of unvested restricted stock of $670,161$1,730,366 and (ii) the market value of performance-based restricted stock unit awards of $1,527,602$175,094 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above. |
| (6) | The amount reported is comprised of (i) the market value of unvested restricted stock of $670,161 and (ii) the market value of performance-based restricted stock unit awards of $929,196 (performance-based restricted stock unit awards for which final performance has not been determinedMr. Dreyer was 40% vested in his ESOP retirement account as of December 31, 2016 are deemed to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above.2017.
|
| | | | JOAN PARSONS, CREDIT RISK MANAGER (FORMER HEAD OF SPECIALTY BANKING) | | | LAURA IZURIETA, CHIEF RISK 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 | | 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 | | $ | - | | | $ | - | | | $ | 500,000 | | | $ | 850,000 | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | 250,000 | | | $ | 800,000 | | | $ | - | | | $ | - | | 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)(3) | | | - | | | | - | | | | - | | | | 881,149 | | | | 881,149 | | | | 881,149 | | | | - | | | | - | | | | - | | | | 159,162 | | | | 159,162 | | | | 159,162 | | Market value of unvested restricted stock which would vest (4)(3) | | | - | | | | - | | | | - | | | | 2,047,904 | (5) | | | 1,510,952 | (6) | | | 1,510,952 | (6) | | | - | | | | - | | | | - | | | | 1,280,826 | (4) | | | 996,328 | (5) | | | 996,328 | (5) | Company-paid health benefits | | | - | | | | - | | | | 15,110 | | | | 15,389 | | | | - | | | | - | | | | - | | | | - | | | | 10,765 | | | | 28,881 | | | | - | | | | - | | Accelerated retirement plan vesting | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 3,481 | | | | 3,481 | | | | 3,481 | | Company-paid outplacement benefits | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | | | - | | | | - | | | | 7,500 | | | | 7,500 | | | | - | | | | - | | Deferred Compensation Plan balance payable | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 50,844 | | | | 50,844 | | | | 50,844 | | | | 50,844 | | | | 50,844 | | | | 50,844 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TOTAL | | $ | 1,405,939 | | | $ | - | | | $ | 1,928,549 | | | $ | 5,207,881 | | | $ | 3,798,040 | | | $ | 3,798,040 | | | $ | 50,844 | | | $ | 50,844 | | | $ | 319,109 | | | $ | 2,330,694 | | | $ | 1,209,815 | | | $ | 1,209,815 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Cash severance pay, Company-paid health benefits and Company-paid outplacement benefits reported under “Involuntary Termination (Not for Cause)” are calculated based on the terms of our U.S. Severance Benefit Policy. |
| (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 achange-in-control event, all such awards will fully vest and all restrictions thereon will lapse. The amounts reported in this table assume that such equity awards haveare not been assumed or substituted. |
| (3) | The market value of vested exercisable stock options is calculated assuming a market value of $171.66 per share (the closing stock price as of December 30, 2016). |
(4) | The market value of unvested equity that would vest is calculated assuming a market value of $171.66$233.77 per share (the closing stock price as of December 30, 2016)29, 2017).
|
| (4) | The amount reported is comprised of (i) the market value of unvested restricted stock of $854,196 and (ii) the market value of performance-based restricted stock unit awards of $426,630 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 2017 are deemed to be achieved at target level). See “Other Post-Employment Payments—2006 Equity Incentive Plan” above. |
| (5) | The amount reported is comprised of (i) the market value of unvested restricted stock of $612,655$854,196 and (ii) the market value of performance-based restricted stock unit awards of $1,435,249$142,132 (performance-based restricted stock unit awards for which final performance has not been determined as of December 31, 20162017 are deemed to be achieved at target level). See “Other Post-Employment Payments – Payments—2006 Equity Incentive Plan” above. |
| (6) | The amount reported is comprised of (i) the market value of unvested restricted stock of $612,655 and (ii) the market value of performance-based restricted stock unit awards of $898,297 (performance-based restricted stock unit awards for which final performance has not been determinedMs. Izurieta was 20% vested in her ESOP retirement account as of December 31, 2016 are deemed2017
|
| (7) | Deferred Compensation Plan balance for Ms. Izurieta reflects account balance as of December 31, 2017. Ms. Izurieta is entitled to receive her account balance under each of the termination scenarios, to be achieved at target level). See “Other Post-Employment Payments – 2006 Equity Incentive Plan” above.paid in accordance with the plan and Ms. Izurieta’s payment election. |
5052
| | | | | EXECUTIVE OFFICERS & COMPENSATION Compensation for NEOs |
SECURITY OWNERSHIP INFORMATIONCEO Pay Ratio
RATIO BASEDON 2017 COMPENSATION As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Greg Becker, our President and Chief Executive Officer. For 2017, our last completed fiscal year: (i) the median of the annual total compensation of all employees of the company (other than the CEO) was $131,664; and (ii) the annual total compensation of our CEO, as reported in the “Summary Compensation Table”, was $6,106,711. Based on this information, for 2017, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 46 to 1. Please note that the provided pay ratio is a reasonable estimate calculated in accordance with Item 402(u) of RegulationS-K. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used is described below. We selected October 31, 2017 (which is a date within the last 3 months of our last completed fiscal year) as the date upon which we would identify the “median employee”. This date was chosen to allow sufficient time to identify the median employee given the global scope of our operations. As of October 31, 2017, our employee population (excluding the CEO) consisted of approximately 2,450 individuals, including employees in the United States, United Kingdom, Ireland, Germany, Israel, China, Hong Kong and India. All 2,450 of these employees were included when identifying our “median employee”. No employees were excluded due to data privacy restrictions in our determination of the “median employee,” and allnon-U.S. employees were included in the determination of the “median employee.” To identify the “median employee” from our employee population, we utilized payroll and equity plan records for November 1, 2016 through October 31, 2017 (the “compensation measure”). Given that prior year payroll earnings reports would not be available untilmid-January and prior-year bonus and profit sharing amounts would not be available until late-February, we measured compensation for the employees in our sample using the12-month period ended October 31, 2017. The payroll records included all earnings paid, except most benefit programs, realized equity compensation earnings, deferred compensation payments, andnon-taxable per diem payments. Equity plan records included the grant date fair value of all equity grants (with performance-based equity awards assumed to be achieved at target). Additionally, we did not annualize compensation for employees who were not active for the entire period between November 1, 2016 and October 31, 2017. Employees who did not receive compensation during this period were excluded (for example, recent hires who did not receive a paycheck by October 31, 2017). In identifying the “median employee”, we did not make anycost-of-living adjustments. Amounts paid in foreign currency were converted into United States dollars using third party foreign exchange rates as of October 31, 2017. We identified our “median employee” using a standard median formula based on the compensation measure, which was consistently applied to all of our employees included in this calculation. With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for 2017 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K, resulting in annual total compensation of $131,664. With respect to the annual total compensation for the CEO, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table. 53 | | | | | EXECUTIVE OFFICERS & COMPENSATION CEO Pay Ratio |
| | Security Ownership Information |
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERSSecurity 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 officersNEOs 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) | | | 10,8823,443 | | | | * | % | David Clapper (1) | | | 15,69116,252 | | | | * | | John Clendening (2) | | | 337 | | | | * | | Roger Dunbar (2)(3) | | | 16,99518,117 | | | | * | | Joel Friedman (1) | | | 20,69121,252 | | | | * | | Lata Krishnan (3)Kimberly Jabal^
| | | 12,793- | | | | - | | Lata Krishnan (4) | | | 13,778 | | | | * | | Jeffrey Maggioncalda (1) | | | 5,6866,247 | | | | * | | Mary Miller (1) | | | 2,7223,283 | | | | * | | Kate Mitchell (3)(4) | | | 7,9498,686 | | | | * | | John Robinson (1) | | | 6,4567,017 | | | | * | | Garen Staglin (1) | | | 12,39110,952 | | | | * | | Greg Becker (4)(5) | | | 130,287121,666 | | | | * | | Dan Beck | | | - | | | | - | | John China (6) | | | 42,097 | | | | * | | Michael Descheneaux (5)(7) | | | 38,68042,811 | | | | * | | Marc Cadieux (6)Michael Dreyer
| | | 30,6972,979 | | | | * | | John China (7)Laura Izurieta
| | | 33,218 | | | | * | | Joan Parsons
| | | 29,477626 | | | | * | | All directors, director nominees and executive officers as a group (22(23 persons) (8) | |
| 384,257
390,069 |
| | | * | |
| * | Represents beneficial ownership of less than 1%. |
| (1) | Includes 985561 shares thatwhich may be acquired pursuant to the vesting of restricted stock units within 60 days of the Record Date. |
| (2) | Includes 1,970337 shares thatwhich may be acquired pursuant to the vesting of restricted stock units within 60 days of the Record Date. |
| (3) | Includes 1,122 shares which may be acquired pursuant to the vesting of restricted stock units within 60 days of the Record Date. |
| (4) | Does not include 985561 shares underlying restricted stock units, receipt of which the director has elected to defer. |
(4) | (5) | Includes 70,56561,443 shares thatwhich may be acquired pursuant to the exercise of stock options within 60 days of the Record Date. |
(5) | (6) | Includes 23,98022,863 shares thatwhich may be acquired pursuant to the exercise of stock options within 60 days of the Record Date. |
(6) | (7) | Includes 11,44225,022 shares thatwhich may be acquired pursuant to the exercise of stock options within 60 days of the Record Date. |
(7) | Includes 17,010 shares that may be acquired pursuant to the exercise of stock options within 60 days of the Record Date.
|
| (8) | Includes 141,926141,072 shares thatwhich may be acquired pursuant to the vesting of restricted stock units or the exercise of stock options within 60 days of the Record Date. |
5154
| | | | | SECURITY OWNERSHIP INFORMATION Principal StockholdersDirectors and Executive Officers
|
SECURITY OWNERSHIP SECURITY OWNERSHIPOF PRINCIPAL STOCKHOLDERS PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of our Common Stock as of December 31, 20162017 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 52,254,07452,835,188 shares outstanding as of December 31, 2016.2017. 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 | | Name and Address of Beneficial Owner | | Number of
Shares | | | Percent of
Class Owned | | BlackRock, Inc. (1) 55 East 52nd Street New York, NY 10055 | | | 4,267,100 | | | | 8.17 | % | | | | The Vanguard Group (2) 100 Vanguard Blvd. Malvern, PA 19355 | | | 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 | % |
| | | | | | | | | | | | Shares Beneficially Owned | | Name and Address of Beneficial Owner | | Number of
Shares | | | Percent of
Class Owned | | BlackRock, Inc. (1) | | | 5,104,914 | | | | 9.66% | | 55 East 52nd Street New York, NY 10055 | | | | | | | | | The Vanguard Group (2) | | | 4,512,684 | | | | 8.54% | | 100 Vanguard Blvd. Malvern, PA 19355 | | | | | | | | |
| (1) | Information is based on figures set forth in the Schedule 13G/A filed by BlackRock, Inc., on January 27, 2017.23, 2018. According to the Schedule 13G/A, of the total shares reported, BlackRock, Inc., an investment adviser, has sole voting power with respect to 4,061,7374,775,678 shares and sole dispositive power with respect to 4,267,1005,104,914 shares. |
| (2) | Information is based on figures set forth in the Schedule 13G/A filed by The Vanguard Group (“Vanguard Group”) on February 10, 2017.12, 2018. According the Schedule 13G/A, of the total shares reported, Vanguard Group, an investment advisor, has sole voting power with respect to 30,52042,203 shares and sole dispositive power with respect to 3,896,8724,462,771 shares. |
(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.
|
5255
| | | | | SECURITY OWNERSHIP INFORMATION Principal Stockholders |
OTHER PROXY PROPOSALS
Proposal No. 2 – Ratification of Appointment of Independent Registered Public Accounting Firm RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors Recommends a Vote “FOR” the Ratification of the Appointment of KPMG LLP as the Company’s Independent Registered Public Accounting Firm The Audit Committee has appointed KPMG LLP (“KPMG”) to be our independent registered public accounting firm for our 20172018 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 as our independent registered public accounting firm, the Board is, based on the recommendation of the Audit Committee, submitting the appointment of KPMG to the stockholders for ratification as a matter of good corporate practice. If our stockholders do not ratify the selection of KPMG by a majority of the votes present and entitled to vote on the matter, then the Audit Committee may reconsider its selection. We expect a representative from KPMG to be present at the Annual Meeting. The representative will be afforded the opportunity to make a statement if they desire to do so and is expected to be available to respond to stockholder questions. PRINCIPAL AUDIT FEES AND SERVICESPRINCIPAL AUDIT FEES AND SERVICES
The following table sets forth fees billed for services renderedbilled by or expected to be billed by KPMG LLP for the fiscal years 20162017 and 2015,2016, all of which were approved by the Audit Committee in conformity with itspre-approval process: | | | | 2016 | | | 2015 | | | 2017 | | | 2016 | | Audit fees | | $ | 5,678,821 | | | $ | 5,852,555 | | | $ | 6,262,414 | | | $ | 5,678,821 | | Audit-related fees (1) | | | 288,443 | | | | 208,000 | | | | 296,930 | | | | 288,443 | | Tax fees (2) | | | 1,228,565 | | | | 551,328 | | | | 1,500,644 | | | | 1,228,565 | | All other fees (3) | | | - | | | | 15,371 | | | | 56,010 | | | | - | | | | | | | | | | | | | | | Total | | $ | 7,195,829 | | | $ | 6,627,254 | | | $ | 8,115,998 | | | $ | 7,195,829 | | | | | | | | | | | | | | |
| (1) | Consists principally of fees billed or expected to be billed as incurred on a time and material basis related to internal controls attestation for selected information systems and business units (SSAE 16 audits).units. |
| (2) | Represents fees for services provided in connection with the Company’s tax compliance and tax advice.consulting. |
| (3) | Represents 2017 fees for advisory services relatingrelated to the Company’s ALLL vendor selection project.certain outsourcing initiatives. |
In accordance with its charter, the Audit Committee must explicitly approve the engagement of ourthe 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 20162017 and 2015,2016, all audit andnon-audit related services performed by KPMGour independent auditor were approved orpre-approved by the Audit Committee. Additionally, the Audit Committee reviewed allnon-audit related services provided by KPMG. In considering the nature of the services provided byour independent auditor, KPMG theLLP. The Audit Committee determinedconcluded that suchthe performance of these services are compatible withdid not compromise KPMG LLP’s independence in the provisionconduct of independent audit services.its auditing function. KPMG LLP also confirmed itstheir independence to the Audit Committee. 5356
| | | | | OTHER PROXY PROPOSALS Proposal 2 — Ratification of Auditor |
Proposal No. 3 – Advisory Approval of our Executive Compensation ADVISORY APPROVAL OF OUR EXECUTIVE COMPENSATION
The Board of Directors Recommends a Vote “FOR” the Approval of the Compensation of our Named Executive Officers, as Disclosed in this Proxy Statement At the 2011 annual meeting2017 Annual Meeting of stockholders,Stockholders, our stockholders voted that our advisory vote on executive compensation (otherwise known as “Say on Pay”) be 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 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 value the opinion of our stakeholders and will take into consideration the outcome of this 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. Proposal No. 4
ADVISORY VOTE ON THE FREQUENCY OF FUTURE “SAY ON PAY” VOTES
The 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.
5457
| | | | | OTHER PROXY PROPOSALS Proposal 3 — Say on Pay Proposals |
| | MEETING AND OTHER INFORMATION |
Information About Voting and Proxy Solicitation INFORMATION ABOUT VOTING AND PROXY SOLICITATIONVOTING
Voting
Holders of our common 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 equal the number of shares held by such stockholder, multiplied by the number of directors to be elected. Accordingly, you may cast all of your votes for a single candidate or distribute your votes among as many of the candidates as you choose, up to a maximum of the number of directors to be elected. However, no stockholder will be entitled to cumulate votes for a candidate unless such candidate has been properly nominated 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 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 each proposal enumerated in this Proxy Statement and as the Proxy Holders may determine within their discretion for any other matters that 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. See“Quorum; Abstentions; BrokerNon-Votes”below. Quorum; Abstentions; BrokerQUORUM; ABSTENTIONS; BROKER NONNon-Votes-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 Annual Meeting for purposes of establishing a quorum and are treated as shares present at the Annual Meeting with respect to such matter. Except 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 a quorum for the transaction of business and abstentions will have the same effect as a vote against the proposal, except for the election directors and the advisory approval on Say on Pay frequency.directors. 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” matters such as the election of directors, and the advisory votesvote on Say on Pay and Say on Pay Frequency.Pay. 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 20172018 fiscal year. Brokernon-votes will be counted for purposes of determining the presence of a quorum for the transaction of business but will not be counted for purposes of determining the number of the votes represented and entitled to vote with respect to proposals on which brokers, banks or other nominees are prohibited from exercising their discretionary authority. 5558
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Voting RequiredVOTING 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-
Votes
Allowed | | Abstentions | | You May Vote | | | | | | Proposal No. 1 - Election of Directors | | Plurality of Votes Cast* | | No | | No Effect | | FOR or WITHHOLD | | | | | | Proposal No. 2 - Ratification of Auditors | | Majority of Votes Present and Entitled to Vote | | Yes | | Vote Against | | FOR, AGAINST or ABSTAIN | | | | | | Proposal No. 3 - 3- Advisory Vote on Say on Pay | | Majority of Votes Present and Entitled to Vote | | No | | Vote Against | | FOR, AGAINST or ABSTAIN |
| * | | | | See “Proposal No. 4 - Advisory approval on Say on Pay Frequency | | Most FOR Votes Cast | | No | | No Effect | | 1 2, or 3 YEARS or ABSTAIN– Election of Directors.” |
* See “Proposal No. 1 – Election of Directors.”
Revocability of ProxiesREVOCABILITYOF 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. A Proxy is also automatically revoked if the stockholder is present at the Annual Meeting and votes in person. SolicitationSOLICITATION
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” ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2017,
| • | | “FOR” each of our nominees to the Board of Directors, | |
| | • | | “FOR” ratification of the appointment of KPMG LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2018, | |
| • | | “FOR” approval, on an advisory basis, of our executive compensation (“Say on Pay”), 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). | |
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 MaterialsDELIVERYOF PROXY MATERIALS
In accordance with the rules adopted by the SEC, commonly referred to as “Notice and Access,” we have decided to provide access to our Proxy materials over the Internet instead of mailing a printed copy of the materials to every stockholder. We 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 you 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
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who previously requested electronic or paper delivery of proxy materials) on or about March 9, 2017.8, 2018. The Notice explains the process to access and review the information contained in the Proxy materials and how to vote proxies over the Internet. In addition, the Notice will provide you the option to instruct us to send our future Proxy materials to you electronically by email. You may also access the Proxy materials on the website referred to in the Notice or request to receive a printed set of the Proxy materials. 59 | | | | | MEETING & OTHER INFORMATION Voting and Proxy Solicitation |
If you will receive printed copies of the Proxy materials, 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 MaterialsHOWTO OBTAINA SEPARATE SETOF PROXY MATERIALS
You may request to receive Proxy materials in printed form by mail or electronically by email on an ongoing basis. If you sign up to receive Proxy materials electronically, you will receive an email with links to the 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-voting site. Your election to receive Proxy materials by email will remain in effect until you terminate it. If you share an address with another stockholder, you may receive only one set of Proxy materials (including our 2016 Annual Report onForm 10-K for the year ended December 31, 2017, 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: Corporate Secretary Telephone:(408) 654-7400 Facsimile: (408)969-6500 Email: bod@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. 5760
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STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONSStockholder Proposals and Director Nominations
STOCKHOLDER PROPOSALS 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 9, 2017.8, 2018. 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 24, 2017,23, 2018, and Not later than the close of business on January 23, 2018.22, 2019. 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 CandidatesNOMINATIONOF 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.” 5861
| | | | | MEETING & OTHER INFORMATION Stockholder Proposals and Nominations |
COPY OF BYLAW PROVISIONSCopy of Bylaw Provisions
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. 2016 ANNUAL REPORT2017 Annual Report
Stockholders who wish to obtain copies of our Annual Report onForm 10-K for the year ended December 31, 2016,2017, without charge, should address a written request to 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. OTHER MATTERSOther Matters
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. 5962
| | | | | MEETING & OTHER INFORMATION Bylaw Provisions and Annual Report |
APPENDIX A
SVB FINANCIAL GROUP
RECONCILIATIONOF CERTAIN GAAPTO NON-GAAP FINANCIAL INFORMATION
The following table provides a summary ofnon-GAAP core fee income, for the year ended December 31, 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 | | | | | | | Non-GAAP core fee income (1) | | $ | 316,170 | | | | | | | Non-GAAP core fee income (1): | | | | | Foreign exchange fees | | $ | 104,183 | | Credit card fees | | | 68,205 | | Deposit service charges | | | 52,524 | | Lending related fees | | | 33,395 | | Client investment fees | | | 32,219 | | Letters of credit and standby letters of credit fees | | | 25,644 | | | | | | | Total non-GAAP core fee income (1) | | $ | 316,170 | | | | | | |
(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.
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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 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
| | | | | APPENDIX
Non-GAAP Reconciliation Table
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svb
SVB FINANCIAL GROUP 3003 TASMAN DRIVE SANTA CLARA, CA 95054 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 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 -1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 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: E17091-P85507
E35818-P01245 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 For All Withhold All For All Except To withhold authority to vote for any individual The Board of Directors recommends you vote FOR the following: All All Except 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:
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 John S. Clendening 04) Roger F. Dunbar 10) John F. Robinson 05) Joel P. Friedman 06) Kimberly A. Jabal 07) Jeffrey N. Maggioncalda 08) Mary J. Miller 09) Kate D. Mitchell 10) John F. Robinson 11) Garen K. Staglin 06) Lata Krishnan
The Board of Directors recommends you vote FOR Proposals 2 and 3: For Against Abstain 2. To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for its fiscal year ending December 31, 2017. 2018. 3. To approve, on an advisory basis, our executive compensation (“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. Yes No 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 V.1.1
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and 20162017 Form10-K Annual Report are available at www.proxyvote.com. E17092-P85507
E35819-P01245 SVB FINANCIAL GROUP THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING ON APRIL 27, 2017 26, 2018 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 27, 2017,26, 2018, at 4:30 p.m. local time,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 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 NAME OF CANDIDATE
# OF VOTES CAST (If (If you exercised cumulative voting, please mark corresponding box on the reverse side.
) Continued and to be signed on reverse side V.1.1
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